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


THISDEED OF AMENDMENT, RESTATEMENT AND CONSOLIDATIONis dated 2007  BETWEEN  (1)THENUCLEAR DECOMMISSIONING AUTHORITY, a non-departmental public body whose
registered office is at Herdus House, Westlakes Science and Technology Park,
Moor Row, Cumbria, CA2 3HU (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, Warrington,
Cheshire, WA4 4GB (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, Warrington, Cheshire, WA4 4GP (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 atMaentwrog, Oldbury and Wylfaare
hereinafter referred to as theGenerating
Sitesand whichcontract 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 tothe
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  1


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  1.1Definitions  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  1.2.1headings and
sub-headings are for ease of reference only and shall not be taken into
consideration in the interpretation or construction of this Deed;  1.2.2all references
to Clauses and Schedules are references to clauses of and schedules to this
Deed;  1.2.3Appendix 1 is
an integral part of this Deed and reference to this Deed includes reference to
Appendix 1;  1.2.4words importing
the singular include the plural and vice
versa;  1.2.5words importing
a particular gender include all genders;  1.2.6references 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  2.1With 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.  2.2For the avoidance of doubt:  2


(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.  3GOVERNING 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:DirectorSecretary/DirectorEXECUTED AS A DEED byMAGNOX ELECTRIC LIMITEDDirectorDirectorEXECUTED AS A DEED byENERGY SALES AND TRADING LIMITED  3


DirectorDirector  4


APPENDIX 1  AMENDED, RESTATED AND CONSOLIDATED SITE MANAGEMENT & OPERATIONS CONTRACT TERMS AND CONDITIONS  5


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  
  6


TABLE OF CONTENTS  PART 1
  GENERALPART 2
  CONTRACTORS OBLIGATIONSPART 3
  RIGHTS AND OBLIGATIONS OF AUTHORITYPART 4
  PERFORMANCE MANAGEMENT, PERFORMANCE ASSURANCE AND
  RECORDSPART 5
  EMPLOYEESPART 6
  FINANCE (Pre-Sale)PART 6A
  FINANCE (Post-Sale)PART 7
  REAL ESTATE AND ASSET MANAGEMENTPART 8
  INTELLECTUAL PROPERTYPART 9
  INFORMATION TECHNOLOGYPART 10
  CONFIDENTIALITY, SECURITY AND COMPLIANCE WITH LAWPART 11
  INDEMNITY, LIABILITY AND INSURANCEPART 12
  TERMINATIONPART 13
  DISPUTE MANAGEMENTPART 14
  RELETTING THE CONTRACT  7


LIST
OF SCHEDULES  Schedule 1
  Lifetime Plan SchedulePart 1:
  Statement of WorkSchedule 2
  Programme Management SchedulePart 1:
  Programme ControlsPart 2:
  Setting the LTP and Change ControlPart 3:
  Project Validation and Financial SanctionSchedule 3
  Commercial SchedulePart 1:
  Customer ContractsPart 2:
  Permitted ActivitiesSchedule 4
  Employee SchedulePart 1:
  Nominated StaffPart 2:
  Key PersonnelPart 3:
  Pro Forma Secondment AgreementPart 4:
  Deed of ParticipationPart 5:
  Pro Forma Impartiality UndertakingSchedule 5
  Subcontracting/Procurement SchedulePart 1:
  Subcontracting/Procurement RequirementsPart 2:
  Inter-SLC Service Contract Pro FormaSchedule 6
  Finance SchedulePart 1
  Funding Limit and Available Incentive FeePart 2
  Use of Performance Based IncentivesPart 3
  Calculation of Efficiency Gain FeePart 4
  Costs Principles and ProcedurePart 5:
  Not used.Part 6:
  Cashflow Forecasting and
  Calculating Dates for PaymentPart 7:
  Provisions Applying to Defective Performance of Alternative
  Remuneration TasksSchedule 7
  Property SchedulePart 1:
  Nuclear Licensed Site Area PlansPart 2:
  Site Boundary PlansSchedule 8
  Intellectual Property SchedulePart 1:
  Parent Supplied Intellectual PropertySchedule 9
  Information Technology SchedulePart 1:
  Critical IT SystemsPart 2:
  Deposit of Source CodeSchedule 10
  Insurance SchedulePart 1:
  Authority and Contractor InsurancesSchedule 11
  Not used  8


Schedule 12
  Dispute Management SchedulePart 1:
  Dispute Management ProcedureSchedule 13
  Reporting SchedulePart 1:
  Monthly Reporting
  RequirementsSchedule 14
  European State AidPart 1:
  European State Aid
  DecisionSchedule 15
  Not usedSchedule 16
  Not usedSchedule 17
  Knowledge Management PolicyPart 1:
  Authority Knowledge
  Management PolicySchedule 18
  Contractors Obligations in relation to the
  SitesPart 1:
  Contractors Obligations
  in relation to the SitesSchedule 19
  Authorised Persons under the ContractPart 1:
  Addresses for Notices and
  CorrespondenceSchedule 20
  Electricity Interface Obligations SchedulePart 1:
  Allocation of
  Responsibilities under Industry DocumentsPart 2:
  BETS InterfacesSchedule 21
  Post Commencement Date Issues to be
  ResolvedPart 1:
  Post Commencement Date
  Issues to be Resolved  9


THIS AGREEMENTis made on 1 April 2005 and amended by deed of amendment,
restatement and consolidation on                                                
2007  BETWEEN  (1)THENUCLEAR DECOMMISSIONING AUTHORITY, a non-departmental public body whose registered office is at Herdus
House, Westlakes Science and Technology Park, Moor Row, Cumbria, CA2 3HU(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, Warrington,
Cheshire, WA4 4GB (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, Warrington, Cheshire WA4 4GP (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;  (C)The following events have occurred:  (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  1.1Definitions  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 Act 1990 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);  10


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 PartneringArrangementin 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;  11


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, Annan,
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);  12


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 Act
2004;  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;  13


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);  14


(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 theChapelcrossSite, the Hunterston A Site,
theOldburySite, theTrawsfynyddSite and theWylfaSite 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 Act 1985 and, for
the purposes of Clauses6.5 and 6A.5 (Historical Costs) only, means the Authority and Direct
Rail Services (Co. no. 3020822);  15


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  16


all) pursuant to Part 2 of the Programme
Management Schedule (Setting the LTP and Change Control);  Capital Costsmeansany 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 2ndJune 2004;  (ii)LCH EnClear OTC
Third Party Clearing Agreement Calyon Financial SNC and Magnox Electric Limited
dated 6thAugust 2004;  (iii)Accession
Agreement to the Network Code between Transco Plc and Magnox Electric Limited
dated 5thFebruary 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]  17


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;  18


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 shownyellow
and blueon 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meansthose 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 thePermitted Activities, the
Trading Limits and theTrading
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  19


(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meansan 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;  20


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;  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;  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 Act 1985 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  21


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 toHMRCby
Herbert Smith 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;  22


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meansfacilities, 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 Act 2004;  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);  23


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 Act 1989 relating to the distribution of electricity;  DPAmeans the Data Protection Act 1998;  EAmeans the Environment Agency;  e-Government Metadata Standard
(e-GUS)means the e-GUS 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 thePermitted Activities, the
Trading Limits and theTrading
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 Walesunder the Finance Act
2004established by a resolution of The Electricity Council passed on 20thJanuary 1983and 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  24


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 thePermitted Activities, the Trading Limits and theTrading 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 Act 2004;  Escrow Agentmeans NCC Escrow International Limited, registration
office Manchester Technology Centre, Oxford Road, Manchester M1 7EF, 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 1stApril 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  25


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
Act 1995 or section 227 of the Pensions Act 2004, 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 Act 1995 or section 227 of the Pensions Act 2004, 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meansthat 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:  26


(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;  27


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 thePermitted Activities, the Trading
Limits and theTrading 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 meansthe 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;  28


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 shownyellow
and blueon the plan
markedHunterston Arelating toHunterston Aat 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;  29


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  30


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 Act
1978, any exercise of the Royal Prerogative, any enforceable community right
within the meaning of section 2 of the European Communities Act 1972, 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;  31


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meansa group within
theElectricity Supply Pension Schemewhich 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);  32


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
toHMRCunder 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);  33


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 Act 1965 (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;  34


Oldbury Sitemeans
the area of land at Oldbury licensed to the Contractor as shownyellow
and blueon the plan
markedOldburyrelating toOldburyat 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 number6005193) whose registered office is at 1100 Daresbury
Park, Daresbury, Warrington, Cheshire WA4 4GB;  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;  35


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;  36


(b)under any applicable Law creating offences in respect
of fraudulent acts; or  (c)at common law in respect of fraudulent acts in
relation to this Contract or any other contract with the Authority;  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;  37


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) Act 1992;  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 thePermitted Activities, the Trading Limits and theTrading Strategy or required to be paid to Ofgem as a
result of a failure to surrender sufficient Renewables Obligation  38


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 andBritish 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  39


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;  40


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  41


(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 Act 1988;  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
mark-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 theGeneratingSites 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;  42


(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);  43


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 Act 2000;  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 Act 1994 or any similar tax imposed in addition thereto or in substitution
therefore;  VATAmeans Value Added Tax Act 1994;  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 shownyellow
and blueon the plan
markedWylfarelating toWylfaat 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).  44


1.2Interpretation  Save to the extent that the context
or the express provisions of this Contract
otherwise require:  1.2.1in 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);  1.2.2headings and sub-headings are for
ease of reference only and shall not be taken into consideration in the
interpretation or construction of this Contract;  1.2.3all 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;  1.2.4the Schedules (including Appendices
to such Schedules) are an integral part of this Contract and reference to this
Contract includes reference to the Schedules ;  1.2.5all 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;  1.2.6all 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;  1.2.7words importing
the singular include the plural and vice versa;  1.2.8words 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;  1.2.10any 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;  1.2.11references to Party and Parties means a party or the parties to this Contract as
applicable;  1.2.12all monetary
amounts are expressed in pounds sterling;  45


1.2.13a reference to
a balance sheet or profit and loss account includes a reference to any note
forming part of or attached to it;  1.2.14references to
the word includes or including are to be construed
without limitation;  1.2.15references to a
document being in the agreed form
means a copy of such document initialled for the purposes of identification by
the Parties;  1.2.16any 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;  1.2.17a reference to
a site or the Sites shall include any part of a site or the  Sites; and  1.2.18all
references to a time of day are references to UK time.  1.3Commencement
And Duration  1.3.1Initial 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).  1.3.2Secondary Period  1.3.2.1The 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).  1.3.2.2If 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.  1.3.2.3The 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.  46


1.3.3Survival 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.  1.4State 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.  1.5Representatives and Authority
to Act  1.5.1Co-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.  1.5.2Delegation of Authority  1.5.2.1Each 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.  1.5.2.2Each 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 theAuthority or the Contractor,
as relevant.  1.5.3Authority to Act  1.5.3.1Individual members of the Authoritys team shall have such authority to
act on behalf of the Authority for the purposes of this Contract as  47


is specified in the relevant Delegation of Authority in respect of that
team member issued by the Authority and copied to the Contractor.  1.5.3.2Individual 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.  1.5.3.3All 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.  1.5.4Extent 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:  1.5.4.1agree any variation or amendment to this Contract; or  1.5.4.2agree to any material waiver by the Authority or the Contractor (as the
case may be) of any term of this Contract.  1.6Liaison with Regulators  1.6.1Communicationswith
Regulators  Save in relation to correspondence, orparts 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 shallpromptly 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.  1.6.2RegulatorMeetings  1.6.2.1The Contractor shall use all reasonable endeavours to give the Authority
prompt notice of all Regulator Meetings.  1.6.2.2Save 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).  1.6.2.3Whether 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  48


shall keep the Authority informed on a timely basis of the outcome of the
meeting.  1.6.3Notification 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.  1.7Site Meetings  1.7.1The Authority shall be
entitled to attend and participate in Site Meetings.  1.7.2The Contractor shall:  1.7.2.1maintain a timetable of all Site Meetings; and  1.7.2.2give the Authority reasonable notice of all proposed Site Meetings in
order to enable the Authority to attend.  1.8Other 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.  1.9Force Majeure  1.9.1Performance ofObligations  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.  49


1.9.2Notification and Mitigation  1.9.2.1The Affected Party shall, as soon as reasonably practicable, on becoming
aware of a Force Majeure Event, notify the other Party in writing of:  1.9.2.1.1the nature of the Force Majeure
Event relied on;  1.9.2.1.2the estimated effect of the Force Majeure Event on the Affected Partys
ability to perform its obligations under this Contract; and  1.9.2.1.3the period for which it is estimated the Force Majeure Event will
continue.  1.9.2.2As 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.  1.9.3The Affected Party shall:  1.9.3.1use all reasonable endeavours to minimise the effects of the Force
Majeure Event on the performance of its obligations under this Contract;  1.9.3.2where 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;  1.9.3.3so 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;  1.9.3.5where 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;  1.9.3.6As soon as reasonably practicable after the cessation of a Force Majeure
Event, the Affected Party shall notify the other Party in  50


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  1.9.3.7For 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.  1.9.4Long 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.  1.9.5Requirement 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.  1.10Emergency
Action  The Contractor shall be entitled to
take Emergency Action at any time notwithstanding the other provisions of this
Contract.  1.11Warranties  1.11.1Authority Warranties  Without prejudice to any warranties
or conditions either express orimplied by any applicable Law, the Authority warrants and undertakes
that as at the Commencement Date:  1.11.1.1it 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  1.11.1.2has taken all
necessary action to authorise the execution and the performance of its
obligations under this Contract.  51


1.11.2Contractors Warranties  Without prejudice to any warranties
or conditions either express orimplied by any applicable Law, the Contractor warrants and undertakes
that as at the Commencement Date:  1.11.2.1it 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  1.11.2.2has taken all
necessary action to authorise the execution and the performance of its
obligations under this Contract.  1.12Severability  1.12.1If 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.  1.12.2The 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.  1.13Notices
and Communications  1.13.1A 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.  1.13.2All 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.  52


1.13.3If an electronic mail address has been provided
pursuant to Clause 1.13.1 the following Notices may be sent by electronic mail:  1.13.3.1electronic
transmittal of a scanned image of an original executed Notice;  1.13.3.2day-to-day communication
in connection with this Contract and the documents referred to in it; and  1.13.3.3Authority
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).  1.13.4In 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.  1.13.5Subject to Clause 1.13.4, a Notice is deemed to be
received:  1.13.5.1where delivered by
hand, upon delivery at the address of the addressee;  1.13.5.2where 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;  1.13.5.3where 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  1.13.5.4where 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.  1.13.6A 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.  1.13.7Notwithstanding 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.  53


1.14Waiver  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.  1.15Entire
Agreement  1.15.1Each 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.  1.15.2The Contractor confirms that:  1.15.2.1in 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  1.15.2.2in 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).  1.15.3The Authority confirms that:  1.15.3.1in 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  1.15.3.2in 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  54


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).  1.16Corrupt
Gifts  1.16.1Contractor 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.  1.16.2Remedies  1.16.2.1If 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.  1.16.2.2If 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.  1.16.2.3If 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.  1.16.2.4If 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.  1.16.2.5If 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.  1.16.2.6Any notice under
this 1.16 (Corrupt Gifts) shall specify:  1.16.2.6.1the nature of the
Prohibited Act; and  1.16.2.6.2the identity of
the person whom the Authority believes has committed the Prohibited Act.  55


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.  1.16.2AThe 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.1The 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.  1.17Variation  1.17.1Except 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.  1.18Assignment  1.18.1Subject 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.  1.18.2The 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.  1.19Contracts
(Rights of Third Parties) Act 1999  No term of this
Contract is enforceable under the Contracts (Rights of Third Parties) Act 1999 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.  56


1.20Shared
Services  1.20.1The 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:  1.20.1.1The Contractor
agrees to use its reasonable endeavours to assist the Authority with the
development and implementation of the Shared Services Project;  1.20.1.2The 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.  1.20.2Section 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.  1.20.2For 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.  1.20.3The requirements described in clause 1.20.2 are
that:  1.20.3.1the Future
Transfer Scheme(s) is/are designed to facilitate the Shared Services
Project;  1.20.3.2the 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  1.20.3.3the Future
Transfer Scheme(s) does/do not operate to alter the Parties to this
Contract or the Parent Body Agreement.  1.20.4The 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) Act 1999.  1.21Consents   1.21.1No Exclusion or Limitation  1.21.1.1Neither 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  57


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:  1.21.1.2exclude or limit
any of the Contractors obligations or liabilities under or in connection with
this Contract; or  1.21.1.3affect 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).  1.21.1.4Subject 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.  1.21.1.5The 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.  1.21.2Examination  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.  1.21.3Inspections  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.  1.21.4Contractor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.  1.22Approvals  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  58


accordance with
Paragraph 3.11.4.1 of Part 2 of the Finance Schedule (Use of Performance
Based Incentives).  1.23Counterparts  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.  1.24Governing
Law and Jurisdiction  1.24.1This Contract shall be governed by, and construed
in accordance with the laws of England and Wales.  1.24.2Subject 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:  1.24.2.1agrees to submit
to the exclusive jurisdiction of the courts of England and Wales; and  1.24.2.2waives 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  1.25Claims
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.  1.26LC35  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.  1.27Knowledge
Management  1.27.1The 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.  59


1.27.2The Contractor acknowledges and agrees that
adoption and compliance with the Contractor Knowledge Management Policy will
facilitate:  1.27.2.1the 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;  1.27.2.2a systematic and
organised attempt to use knowledge within the Contractors organisation to
transform its ability to store and use knowledge to improve performance.  60


PART 2 : CONTRACTORS OBLIGATIONS  2.1Nature of Contractors
Obligations  The Contractor
shall:  2.1.1without 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);  2.1.2keep the Sites secure in accordance with the
Internal Procedures relating to safety and Site security;  2.1.3comply with all applicable Law;  2.1.4comply with all applicable Regulatory Requirements
;  2.1.5meet Historical Costs in accordance with Clause 6.5
and 6A.5 Historical Costs  2.1.6comply with Clause 2.2 (Standard of Performance);  2.1.7comply with the Customer Contracts in accordance
with their terms;  2.1.8be aware and, where appropriate have reasonable
regard to the Authority Policies and Procedures;  2.1.9except 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  2.1.10subject 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.  2.2Standard of Performance  The Contractor
shall comply with  its obligations under
this Contract:  2.2.1in a safe, secure, efficient and
cost effective manner; and  2.2.2exercising 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  61


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:  2.2.2.1Regulatory
Requirements, the only regulatory standards against which the Contractor will
be judged under this Contract will be those related to the United Kingdom; and  2.2.2.2Analogous
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  2.2.3in a transparent and co-operative
manner with both the Authority and the Regulators; and  2.2.4ensuring that all aspects of any
works, services or undertakings comply with the requirements of this Contract;
andensuring 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  2.2.5in 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  2.2.6in 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  2.2.7in 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).  2.3No activities outside current
Contract Year of LTP  2.3.1In 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  62


performance of this Contract in the
relevant Contract Year (except in relation to meeting  Historical Costs and other Transitional
Activities),  unless:  2.3.1.1the 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  2.3.1.2the Contractor is permitted to do so
pursuant to Part 1 (Statement of Work) of the Lifetime Plan Schedule.  2.3.1.3the Contractor is directed to do so
pursuant to a direction issued by the Authority in accordance with Clause 3.1
(Authority Directions); or  2.3.1.4the 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  2.3.1.5the Contractor is obliged to do so
or has the right to do so under the Records Agreement; or  2.3.1.6the Authority otherwise agrees in
writing and in such terms as the Authority determines.  2.3.1.7such 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).  2.3.2For the avoidance of doubt:  2.3.2.1the 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  2.3.2.2the 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  2.3.2.3Category III Changes (which do not
require the prior approval of the Authority) shall not constitute a breach of
Clause 2.3.1; and  2.3.2.4the Contractor may carry out any
works, operations, services or other activities which constitute an Emergency
Action.  63


2.3.3Cost 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:  2.3.3.1the Costs incurred which shall be
Disallowable Costs in accordance with Part 4 of the Finance Schedule  (Costs Principles and Procedures); and  2.3.3.2any 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.  2.4Quality Management System  2.4.1The 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.  2.4.2The 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.  2.4.3The 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.  2.4.4The 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.  2.4.5When responding to any Contractor
request for the Authoritys approval of changes to the Contractors quality
management systems, the Authority shall:  2.4.5.1respond in writing and without
unreasonable delay; and  64


2.4.5.2provide reasons for any
determination that the Contractors proposed changes to its quality management
systems are unsuitable.  2.4.6For 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.  2.5Socio-Economic Development  2.5.1The 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.  2.5.2No 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:  2.5.2.1the events, activities or functions
which the Contractor intends to fund pursuant to its obligations under Clause
2.5.1 above;  2.5.2.2the costs of these intended events,
activities or functions;  2.5.2.3the reasons for the selection of
these events by the Contractor; and  2.5.2.4the 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.  2.5.3Within 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:  2.5.3.1respond in writing and without
unreasonable delay;  2.5.3.2provide reasons for any
determination that the Contractors proposed events, activities or functions
are unsuitable; and  65


2.5.3.3not wilfully impede the Contractor
from being able to comply with any schedule set out in such Socio-Economic
Development Plan.  2.5.4Once 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.  2.6Setting The LTP And Change
Control  2.6.1The 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).  2.6.2If 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).  2.7Subcontracting/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).  2.8Contractors Internal Procedures  2.8.1The
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).  2.8.2The
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.  2.8.3When
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.  2.8.4The
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.  2.8.5Failure
to comply with an Authority Internal Procedure change request  If the Contractor:  66


2.8.5.1fails to comply with the Authoritys
request to introduce a new Internal Procedure within the time specified in
Clause 2.8.4; and/or  2.8.5.2fails 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).  2.9Inter-SLC
Service Contracts  2.9.1To
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  2.9.1.1where 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.  2.9.1.2where 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.  2.9.2Each
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.  2.9.3Compliance  The Contractor shall:  2.9.3.1perform its responsibilities as set out in
the Inter-SLC Service Contracts; and  67


2.9.3.2ensure 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.  2.9.4Review of 
Inter-SLC Service Contracts  2.9.4.1If 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.  2.9.4.2The 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  2.9.4.3The 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:  2.9.4.3.1the grounds upon which the change is
requested;  2.9.4.3.2the nature of the change requested and to
whose responsibilities; and  2.9.4.3.3the 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.  2.9.4.3.4Upon 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).  2.9.4.3.5In 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  68


relevant
Inter-SLC Service Contracts and those obligations and duties.  2.9.4.4Confirmation 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).  2.9.4.5Failure 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  2.9.4.5.2fails 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  2.9.4.5.3fails 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).  2.10Assumption
of Existing Agreements  2.10.1Subject 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.  2.10.2Within ninety
(90) Calendar Days of the Commencement Date, or such later date as the
Authority may determine and notify to the Contractor, the  69


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).  2.10.3If 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.  2.10.4If, 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.  2.11Health and Safety  2.11.1Where the
CDM Regulations are applicable to any project which is being carried out
pursuant to this Contract:  2.11.1.1the 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;  2.11.1.2the Contractor:  2.11.1.2.1shall, 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  2.11.1.2.2where 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  70


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.  2.11.1.4if 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:  2.11.1.4.1the Contractor shall be subject to such requirements and prohibitions as
are placed by CDM 2007 on the Authority;  2.11.1.4.2the 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  2.11.1.4.3the 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.  2.11.2The
Contractor shall observe, perform and discharge and shall procure the
observance, performance and discharge of:  2.11.2.1all the
obligations, requirements and duties arising under the CDM Regulations in
connection with any project; and  2.11.2.2any code
of practice for the time being approved by the Health and Safety Commission
pursuant to the Health and Safety at Work etc. Act 1974 in 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.  71


PART 3:  RIGHTS AND OBLIGATIONS OF AUTHORITY  3.1Authority
Directions  3.1.1Nothing in this Clause 3.1 shall, or is
intended to:  3.1.1.1bind the Authority as to the particular manner in which any statutory
power is exercised in the future; and/or  3.1.1.2otherwise act as a fetter on the future discretion of the Authority in
exercising its rights or acting in accordance with its obligations.  3.1.2Without 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:  3.1.2.1a Contractor Default has occurred; and/or  3.1.2.2an Authority Default has occurred or the Authority has otherwise given a
termination notice in accordance with Clause 12.8 (Termination for
Convenience); and/or  3.1.2.3at 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  3.1.2.4at 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.  3.1.3For 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:  3.1.3.1the 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);  3.1.3.2the 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  72


3.1.3.3the Authority shall, when giving any Authority Direction, act in
accordance with its powers under the Energy Act.  3.2Compliance 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  3.3.1Without prejudice to Clause 3.1 (Authority
Directions), and its rights under this Contract, the Authority shall:  3.3.1.1co-operate with the Contractor to facilitate the performance of its
obligations under this Contract; and  3.3.1.2not wilfully impede the Contractor in performing its obligations under
this Contract.  3.3.2The 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 Clause3.3.1 above in any material
respect.  3.4Authority responses  3.4.1Unless 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.  3.4.2Where 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.  3.5Failure of Performance  If at any time during the period of
this Contract, either Party becomes aware of:  3.5.1a failure by the other Party to perform any
obligations to which it is subject pursuant to this Contract; and/or  3.5.2a 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.  73


3.6.Authority Rights In Respect Of Customer
Contracts  3.6.1New Business and Amendments to Customer Contracts  3.6.1.1Except 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).  3.6.1.2In
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).  3.6.2Authority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:  3.6.2.1whether
or not to exercise any rights under the relevant Customer Contract (including
any rights to terminate);  3.6.2.2whether
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;  3.6.2.3choosing
between any options that arise concerning the manner in which the Contractor
could perform the relevant Customer Contract;  3.6.2.4when the
Contractor is uncertain about what it is required to do under the relevant
Customer Contract;  3.6.2.5how 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.  3.6.3Authoritys right to instruct  3.6.3.1Notwithstanding
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  74


relation
to any of the Customer Contracts including requiring the Contractor to:  3.6.3.1.1seek 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;  3.6.3.1.2resist an
amendment proposed by a counterparty to the relevant Customer Contract;  3.6.3.1.3enter or not
enter into a New Customer Contract in accordance with timescales, with
counterparties and on terms specified by the Authority;  3.6.3.1.4enforce or not
enforce the counterpartys obligations under a Customer Contract;  3.6.3.1.5terminate or
not terminate a Customer Contract;  3.6.3.1.6waive or not
waive any of the counterpartys obligations under a Customer Contract.  3.6.3.2If 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.  3.6.3.3If 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).  3.6.4Permitted Activities  3.6.4.1Subject
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:  3.6.4.1.1no New Customer Contract or no Amendment (as the case may be) contains
any term which:  75


3.6.4.1.1.2provides 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;  3.6.4.1.1.3directly or indirectly excludes or attempts to exclude any right of the
Authority which arises under the Contracts (Rights of Third Parties) Act 1999
or in any other way seeks to prevent the Authority from enforcing the terms of
the Customer Contract;  3.6.4.1.2Not used  3.6.4.1.3Not used  3.6.4.1.4any New Customer Contract
includes:  3.6.4.1.4.1provisions 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;  3.6.4.1.4.2an 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;  3.6.4.1.4.3an 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);  3.6.4.1.4.4if 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;  3.6.4.1.4.5an obligation on the counterparty
to the Customer Contract to permit the Authority to  76


attend meetings between the
Contractor and the Customer and/or Customer Groups;  3.6.4.1.4.6a 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;  3.6.4.1.4.7a 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,  3.6.4.1.5that 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.  3.6.4.1.6where 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;  3.6.4.2In 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.  3.6.4.3Notwithstanding 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  77


Part 3
of the Programme Management Schedule 
(Project Validation and Financial Sanction).  3.6.4.4The 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.  3.6.4.5Subject 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.  3.6.4.6If 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).  3.6.4.7The 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).  3.6.4.8If 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.  3.6.4.9For 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).  3.7Customer 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:  3.7.1any New
Customer Contract;  3.7.2any Amendment;  78


3.7.3any exercise of the Contractors discretion under a
Customer Contract; and  3.7.4any exercise of the Authoritys right to instruct
pursuant to Clause 3.6.3 (Authoritys Right to Instruct),  from the initiation of the issue or matter until such
issue or matter is executed, carried out, rejected, abandoned or resolved (as
the case may be) in each case recording the date of any relevant issue or
matter and the Contractors, Authoritys and/or counterpartys action, inaction
or response as applicable.  3.8Customer
Contracts Option  3.8.1The Parties acknowledge that the Authority may
request that the Secretary of State makes a Future Transfer Scheme to transfer
the property, rights or liabilities of the Contractor under the Customer
Contracts to the Authority.  By virtue
of  Section 40(2) of the Energy
Act, 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.  3.8.2Where a Future Transfer Scheme has been proposed by
the Secretary of State, under which only the property, rights or liabilities of
the Contractor under some or all of the Customer Contracts are proposed to be
transferred to the Authority by virtue of Section 40(2) of the Energy
Act, the Contractor agrees that it will consent to such a Future Transfer
Scheme (and such consent will constitute consent in accordance with a nuclear
transfer scheme) for the purposes of  Section 40(2) of
the Energy Act.  3AFINANCIAL MATTERS
RELATING TO ESTL  3A.1All
Trading Costs and Allowable Costs incurred or Incentive Fee earned by the
Contractor or ESTL in performance of the Trading Activities, the Advisory
Activities and the Agency Activities undertaken prior to the ESTL Transfer Date
in accordance with the relevant NTWP(s) applicable prior to the ESTL
Transfer Date shall be met by the Authority in accordance with and subject to
the terms of this Contract, whether falling due, before or after the ESTL
Transfer Date.  3A.2All
Trading Costs incurred in respect of the Generation Activities undertaken prior
to the Effective Date in accordance with the relevant NTWP(s) applicable
prior to the Effective Date shall be met by the Authority in accordance with
and subject to the terms of this Contract, whether falling due before or after
the Effective Date.  3A.3Any
costs incurred by the Contractor as a result of complying with its obligations
underPart 1 (Allocation of
Responsibilities under Industry Documents) and Part 2 (BETS Interfaces) of
the Electricity Interface Obligations Schedulewhich are outside the relevant Sites NTWP shall nevertheless be Allowable, provided
that:-  3.A.3.1the
Contractor did not undertake the relevant activity which results in such costs
prior to the ESTL Transfer Date otherwise than in accordance with the relevant
NTWP(s) in existence at that time; and  79


3.A.3.2the
Contractor complies with the provisions of Part 2 of the Programme
Management Schedule (Setting the LTP and Change Control) in respect of such
costs.  3A.4Without prejudice to the Contractors or ESTLs (as applicable) other
obligations under this Contract, the Contractor or ESTL (as applicable) having
incurred Trading Costs shall not, in itself, constitute a breach of Clause 2.3.  3A.5All costs reasonably incurred in the first
three Months following the ESTL Transfer Date by the Contractor and / or ESTL
in respect of the winding up of ESTL or in respect of complying with its
obligations under Clause 3E (Advisory Activities Transition) of this Contract
(including, in each case, costs relating to the secondment of the Contractors
employees to ESTL) shall be deemed to be Allowable Costs under this
Contract.  Following the expiry of that
three Month period, costs reasonably incurred by the Contractor and / or ESTL
in respect of the winding up of ESTL, other than costs relating to the
Contractors employees seconded to ESTL, shall be Allowable Costs under this
Contract. Provided that where any of the costs referred to in this clause 3A.5
are incurred in the performance of activities which are outside the relevant
Sites NTWP, the Contractor shall comply with the provisions of Part 2 of
the Programme Management Schedule (Setting the LTP and Change Control).  3B:ELECTRICITY INTERFACE OBLIGATIONS  3B.1The Authority shall fulfil its
obligations and shall procure that British Energy Trading Services Limited
fulfils its obligations as set out inPart 1
(Allocation of Responsibilities under Industry Documents) and Part 2 (BETS
Interfaces) of the Electricity Interface Obligations Schedule.  3B.2The Contractor shall fulfil its
obligations as set out inPart 1 (Allocation of
Responsibilities under Industry Documents) and Part 2 (BETS Interfaces) of
the Electricity Interface Obligations Schedule.  3B.3The Authority shall be relieved
from its obligations, and from procuring that British Energy Trading Services
Limited fulfils its obligations, as set out inPart 1
(Allocation of Responsibilities under Industry Documents) and Part 2 (BETS
Interfaces) of the Electricity Interface Obligations Schedule, or part thereof, to the extent
that the Authority and/or British Energy Trading Services Limited is unable to
fulfil those obligations as a result of the Contractors failure to fulfil its
obligations inPart 1 (Allocation of
Responsibilities under Industry Documents) and Part 2 (BETS Interfaces) of
the Electricity Interface Obligations Schedule.  3B.4The Contractor shall be relieved
from its obligations as set out inPart 1 (Allocation of
Responsibilities under Industry Documents) and Part 2 (BETS Interfaces) of
the Electricity Interface Obligations Schedule, or part thereof, and shall not have any other
liability to the Authority under this Contract in respect of any breach of
those obligations, in each case to the extent that the Contractor is unable to
fulfil its obligations under this Contract as a result of the Authoritys
failure to fulfil its obligations and/or the Authoritys failure to procure the
fulfilment by British Energy Trading Services Limited of its obligations inPart 1 (Allocation of Responsibilities under Industry Documents) and
Part 2 (BETS Interfaces) of the Electricity Interface Obligations Schedule.  80


3B.5The
Authoritys Right to Instruct  3B.5.1The Authority shall be entitled to amend the Parties
obligations as set out in Part 1 (Allocation of Responsibilities under
Industry Documents) and Part 2 (BETS Interfaces) of the Electricity
Interface Obligations Schedule where, in the Authoritys reasonable opinion,
such amendment:  (A)is required to reflect the
Authoritys obligations and/or British Energy Trading Services Limiteds
obligations under the Trading Contract;  (B)would materially enhance the
Contractors and/or the Authoritys and/or British Energy Trading Services
Limiteds ability to fulfil its obligations as set out inPart 1 (Allocation of Responsibilities under Industry Documents) and
Part 2 (BETS Interfaces) of the Electricity Interface Obligations Schedule; or  (C)would materially enhance the
Authoritys ability to fulfil its obligations to any other SLC.  3B.5.2The Authority (acting reasonably) shall submit its
instructions in respect of an amendment to Part 1 (Allocation of
responsibilities under Industry Documents) and Part 2 (BETS Interfaces) of
the Electricity Interface Obligations Schedule to the Contractor setting out:  (A)the grounds upon which the
instruction is given; and  (B)the amendments required.  The
instructions of the Authority in respect of such an amendment shall take into
account the obligations and duties placed on the Contractor by applicable Law
and Regulatory Requirements (including applicable requirements under the
Industry Documents to which the Contractor is a party), in order to avoid
conflict between such instructions and those obligations and duties.  3B.5.3Any instruction issued by the Authority pursuant to
this Clause 3D.5 shall be deemed to be a Change directed by the Authority and
the Contractor shall be entitled to prepare and submit to the Authority a
Change proposal in accordance with Part 2 of the Programme Management Schedule
(Setting the LTP and Change Control).  3B.6Electricity
Generated  With effect from the ESTL Transfer Date, the Authority shall hold all
rights and benefits arising from all electricity generated at the Sites and
such electricity shall be and become an Authority Asset.  3CADVISORY ACTIVITIES TRANSITION  3C.1For a period of three Months from the ESTL
Transfer Date, ESTL shall be required to use its reasonable endeavours:  3C.1.1in the event that the Authority appoints, or proposes to appoint, any
advisors to provide it with some or all of the Advisory Activities or any other
Advisory Activities of a similar nature either in conjunction with, separate
from or in place of ESTL (an Incoming
Advisor), to co-operate with the Authority and any Incoming  81


Advisor in
order to effect an orderly transfer of the provision of such Advisory
Activities to the Authority from ESTL to the Incoming Advisor;  3C.1.2save to the extent that ESTL must comply with applicable Law and
Regulatory Requirements, not to take any action which is intended to prevent,
prejudice or frustrate the transition between ESTL and the Incoming Advisor;  3C.1.3if the Authority appoints, or proposes to appoint, an Incoming
Advisor,:  3C.1.3.1subject to the provisions of Part 10
(Confidentiality, Security and Compliance with Law), and if so requested by the
Authority, to provide the Authority and/or an Incoming Advisor with access to
the personnel of ESTL and all books, records and other materials kept by or on
behalf of ESTL in connection with its provision of the Advisory Activities for
the purpose of assisting the Authority and/or an Incoming Advisor in relation
to any tender process regarding the selection of an Incoming Advisor; and  3C.1.3.2to make available to the Authority and/or an Incoming
Advisor such information (including, without limitation, computer models and
financial and operational information) as the Authority and/or an Incoming
Advisor reasonably require in connection with the selection of an Incoming
Advisor and on an ongoing basis following the appointment of an Incoming
Advisor, and to assist in the verification of the information.  PART 4 PERFORMANCE
MANAGEMENT, PERFORMANCE ASSURANCE AND RECORDS  4.1Reporting And Reviewing  4.1.1Reporting and Reviewing Programme  The Contractor shall implement
systems and processes on the Sites for a performance reporting and reviewing
programme in a manner reasonably satisfactory to the Authority,  4.1.2Required
Reports  The Contractor shall submit to the
Authority:  4.1.2.1a Monthly Progress Report containing the information
required by the Authority procedures contained in Part 1 of the Programme
Management Schedule (Programme Controls) for each Site and in consolidated
format for the Sites in electronic format and in a form reasonably satisfactory
to the Authority; and subject to Paragraph 2 Part 1 of the Programme
Management Schedule (Programme Controls) such other information as the
Authority may from time to time reasonably require and notify to the Contractor.The Contractor shall provide the
Reports listed at Schedule 13 (Reporting Schedule)  4.1.2.2such other reports as may be agreed between the
Authority and the Contractor prior to each Contract Year; and  82


4.1.2.3such other reports as may reasonably be requested by
the Authority in connection with its statutory functions and duties from time
to time in writing; and  4.1.2.4the Monthly Progress Report shall
include notification to the Authority once 75% of the SLC Annual Funding Limit
and/or any ASFL and/or each PSWBS category level has been spent.  4.1.3Objections to Reports  4.1.3.1If the Authority considers that any Report either
has not been compiled in accordance with the requirements of this Contract or
has been based on erroneous information or data, it may serve a notice to that
effect on the Contractor within thirty (30) Calendar Days of receipt of the
Report, objecting to it and the Parties shall endeavour to agree any consequent
amendments to the Report in the light of the Authoritys objections.  4.1.3.2If any such objection has not been resolved by
agreement between the Authority and the Contractor within sixty (60) Calendar
Days after service of such notice, the matter shall be resolved in accordance
with Part 13 ( Dispute Management).  4.1.3.3If, following the submission of any Report, but
prior to any objection raised by the Authority pursuant to this Clause 4.1.3
(Objections to Reports), the Contractor considers that such Report contains a
material error, the Contractor shall notify the Authority immediately of such
error and shall reflect and clearly identify upon becoming aware the required
correction(s) in the relevant subsequent Report where applicable (for
example the next monthly report of the same type). If there will be no
subsequent Report submitted to the Authority (for example because the original
report was not of a type regularly required), the Contractor shall correct the
relevant original Report as soon as reasonably practicable and in any event in
accordance with any applicable Authority procedures as set out in Part 1
of the Programme Management Schedule (Programme Controls).  4.1.4Revisions to Reports  If;  4.1.4.1the resolution (whether by agreement or
determination in accordance with Part 13 (Dispute Management) of any
objection made pursuant to Clause 4.1.3 (Objections to Reports); or  4.1.4.2the correction of any calculation pursuant to any
provision of this Contract,  in either case requires
corrections to be made to any Report submitted by the Contractor pursuant to
Clause 4.1.2 (Required Reports), the Contractor shall reflect and clearly
identify the required
corrections in the relevant subsequent Report (for example the next monthly
report of the same type) where applicable. If there will be no subsequent
Report submitted to the Authority (for example because the original report was
not of a type regularly required),  83


the Contractor
shall correct the relevant original Report and re-submit to the Authority and
the provisions of Clause 4.1.3 (Objections to Reports) and this Clause 4.1.4
(Revisions to Reports) shall apply in respect of the re-submitted Report.  4.1.5Obligation to Report  4.1.5.1Without
prejudice to any other obligation on the Contractor under this Contract to
report and notwithstanding the Contractors right to carry out Permitted
Activities, the Contractor shall, as often as reasonably necessary to keep the
Authority properly and fully informed and on a regular basis, notify the
Authority in as much detail as practicable of any matters of which the
Contractor becomes aware, which have affected, or which may affect, the
Commercial Operations Tasks and/or the Customer Contracts and about which the
Authority may reasonably be expected to wish to be informed including (and
without prejudice to the generality of this Clause 4.1.5):  4.1.5.1.1any breach or impending breach by the Contractor and/or the counterparty
to any Customer Contract;  4.1.5.1.2any impending event that will require the Authoritys consent under
Clause 3.6 (Authority Rights in respect of Customer Contracts);  4.1.5.1.3any exercise of the Contractors Permitted Activities;  4.1.5.1.4any material change in the financial position of a counterparty to a
Customer Contract;  4.1.5.1.5any change or impending change in the business strategy of a counterparty
to a Customer Contract;  4.1.5.1.6any Change in Control of a counterparty to a Customer Contract
particularly where such change in Control will or is likely to adversely affect
the counterpartys financial position or future performance under the Customer
Contract(s) to which it is a party;  4.1.5.1.7any change to the key management personnel with whom the Contractor
liaises which might adversely affect the future business relationship with the
counterparty to the Customer Contract;  4.1.5.1.8any actual or threatened labour disputes affecting the counterparty to
the Customer Contracts;  4.1.5.1.9any change in the policy of other public authorities including, in
particular, public authorities outside the United Kingdom, which might
adversely affect the performance of the Customer Contracts or the Contractors
relationships with counterparties to the Customer Contracts;  84


4.1.5.1.10any issue which affects or may affect the supply chain under any
Subcontract or Series of Subcontracts which relate(s) to the Customer
Contracts.  4.1.5.2The Contractor
shall also forthwith report to the Authority any exercise of its right:  4.1.5.2.1to challenge any threatened or actual revocation of a Nuclear Site
Licence or any other regulatory permit or consent which is essential to the
Contractors ability to operate the Sites or carry out the Commercial
Operations Tasks in accordance with Law; or  4.1.5.2.2to apply for, or resist, or join into an injunction which the Contractor,
acting reasonably, considers urgent and necessary to the Contractors performance
of its obligations to the Authority.  4.2Records  4.2.1Required Records  The Contractor
shall hold and make the following records available to the Authority in
accordance with the open access, inspection and audit rights set out Clause 4.5 (Inspection and Audit).  4.2.1.1all statutory
and, regulatory records and reports required to be kept (and/or submitted to
the Regulators) by the Contractor in its capacity as employer, as nuclear site
licensee and as holder of any permit, consent or other authorisation issued by
any Regulator;  4.2.1.2books of
account and other information set out in Clause 4.2.2 (Books of Account and
Other Information); and  4.2.1.3such other
information as would normally be expected to be 
created, received and maintained as evidence and information by an
organisation or person carrying on the business of the Contractor in pursuance
of legal obligations or in the transaction of business which is not already
required to be kept by the Contractor pursuant to Clause 4.2.1.1 or Clause
4.2.1.2 and which may be reasonably required by the Authority from time to time
in order to comply with its statutory functions and/or duties or otherwise,  (together the Records) in such condition, format and detail as is suitable for their intended
purpose, or in relation to Clause 4.2.1.3 above as required by the Authority,
and for the period specified in Clause 4.3 (Retention of Records).  4.2.2Books of Account and Other Information  4.2.2.1Books of
Account  The Contractor shall maintain, on a current and accurate basis,
books of account relating to its activities under this Contract in accordance
with:  85


4.2.2.1.1UK generally accepted accounting practice (UK GAAP), consisting of all
extant Statements of Standard Accounting Practice (SSAPs), Financial Reporting
Standards (FRSs), Urgent Issues Task Force Abstracts and any relevant
industry-specific authoritative guidance; or  4.2.2.1.2international generally accepted accounting practice, comprising to the
extent adopted by the European Commission, all extant International Financial
Reporting Standards (IFRSs), International Accounting Standards (IASs),
interpretations of the International Financial Reporting Interpretations
Committee and its predecessor body, and other relevant industry-specific
authoritative guidance; and  4.2.2.1.3the Companies Act 1985; and  4.2.2.1.4Part 4 of the Finance Schedule (Costs Principles and Procedures);
and  4.2.2.1.5an Open Book System.  4.2.2.2Further
Information  Without prejudice to information
provided by the Contractor to the Authority pursuant to this Contract the
Contractor shall, provide to the
Authority such further information as the Authority may at any time reasonably
request on reasonable notice.  4.2.2.3Financial
Information  Without prejudice to the generality
of Clause 4.2.2.2 (Further Information),the Contractor shall furnish to the Authority as soon as they become
publicly available and, in any event, not later than ninety (90) Calendar Days
after the close of its statutory accounting period a copy of the audited
financial statements of the Contractor, prepared in accordance with UK
generally accepted accounting principles and practices for such period,
including in each case a balance sheet prepared as at the end of such
accounting period, a profit and loss account, cash flow statement in respect of
such accounting period and a reconciliation of total Allowable Costs claimed
within such accounting period.  4.2.2.4Authority
Accounts  The Contractor
shall maintain, in accordance with the Authoritys reasonable instructions from
time to time including as to its then current accounting policy, on a current and accurate basis
books of account recording the Authoritys interest in the Authority Assets and
the Sites and any associated liabilities.  4.3Retention of Records  The Contractor
shall retain all Records for either:  86


4.3.1a period of
twelve (12) years after the expiry or earlier termination of this Contract or
such longer period as may be required by applicable Law or Regulatory
Requirement; or  4.3.2in relation to certain Records as identified by the
Authority and notified to the Contractor from time to time, for such longer
period as may reasonably be required by the Authority.  4.4Information Asset Register  4.4.1The Authority
shall create and then maintain an accurate Information Asset Register within
eighteen (18) months of the Commencement Date.  4.4.2In respect of the Sites, the Contractor shall submit
to the Authority such metadata as is required by the Authority (acting
reasonably) for the Information Asset Register via electronic transfer at such
intervals as are notified to the Contractor by the Authority, acting
reasonably, and shall ensure that all such metadata conforms to the
e-Government Metadata Standard (e-GMS).  4.4.3To the extent that the Authority considers, in its absolute discretion,
that any metadata to be contributed by the Contractor pursuant to Clause 4.4.2
above should be protectively marked, the Authority shall inform the Contractor
of the method by which the Authority requires the Contractor to deliver such
protectively marked metadata.  4.5Inspection
and Audit  4.5.1Site Access  Subject to compliance with applicable Law and Regulatory Requirements
and the Contractors Internal Procedures relating to safety and Site security,
the Authority and its duly authorised representatives (including advisers,
consultants, and agents on behalf of the Authority) (together Authority Agents) shall have the right,
whether required by the National Audit Office or otherwise, to enter at all
times onto all parts of the Sites and their facilities, installations,
structures and outbuildings and, in respect of the Commercial Operations Tasks,
any other areas and locations which the Contractor uses in its performance of
such Commercial Operations Tasks.  4.5.2Inspection and Audit  4.5.2.1Subject to
Clause 4.5.3 below, the Authority and any Authority Agent, acting reasonably,
and subject to compliance with all applicable Law and Regulatory Requirements
and the Contractors Internal Procedures, relating to safety and Site security,
shall be entitled to carry out for the purpose of fulfilling the Authoritys
statutory functions and duties and contractual rights pursuant to this
Contract:  4.5.2.1.1any audit, inspection, review, periodic monitoring and spot checks of any
of the Contractors activities in connectionwith this Contract and any
aspect of the Contractors performance of this Contract as required by the
Authority or where the same shall have been requested by the National Audit
Office or otherwise;  87


4.5.2.1.2audits, inspections, reviews, periodic monitoring and spot checks of all
information required to be kept by the Contractor;  4.5.2.1.3audits of the Contractors compliance with its Inter-SLC Service
Contracts, Internal Procedures, quality management systems, procedures required
by Regulatory Requirements and any operating procedures, policies or standards
ancillary to, or used in connection or accordance with, the same;  4.5.2.1.4inspections and tests to determine the quality of any of the Tasks
performed or procured;  4.5.2.1.5interviews with any employees, secondees or other personnel of the
Contractor and, to the extent that the Contractor is able to procure it, with
the counterparties to the Customer Contracts and any officers, employees or
personnel of such counterparties; and  4.5.2.1.6the copying and collation of any information held in electronic or paper
form.  4.5.3The Authority and any Authority Agent shall be
entitled to carry out the matters referred to in Clause 4.5.2 above at any time
or frequency, provided always that the Authority or Authority Agent as
applicable shall:  4.5.3.1act reasonably
at all times; and  4.5.3.2use all
reasonable endeavours to minimise any disruption to the provision of the Tasks
by the Contractor, a Subcontractor, or a Sub-Sub-Contractor as applicable.  4.5.3.3For the purposes
of Clause 4.5.2.1 above, the Contractor shall provide all reasonable
co-operation including:  4.5.3.3.1granting, or procuring the grant of timely access to any equipment
(including all computer hardware and software and databases) used in the
performance of this Contract, wherever situated. To the extent that such access
is required to equipment which does not belong to the Contractor or access is
not within the Contractors control, the Contractor shall (and shall only be
obliged to) use all reasonable efforts to procure such access;  4.5.3.3.2granting timely access to any data dictionary and the fields and records
within it to enable data to be downloaded from any computer systems operated by
the Contractor; and  4.5.3.3.3ensuring that appropriate security systems are in place to prevent
unauthorised access to, extraction of and/or alteration of information during
the audit.  88


4.5.4The Contractor
agrees that the Comptroller and Auditor General shall, and for the purposes of
Clause 4.5.2.1 above, the Authority and any Authority Agent shall have access
to such of the Contractors facilities, information, books of account, Records
and other documentation (including any stored in electronic form) (Data) andpersonnel as they reasonably
consider necessary for the performance of their duties to the extent allowed
under the DPA.  4.5.5The Contractor agrees that the Authority and any
Authority Agent shall be entitled to request and receive at any time, a reasonable
number of copies of any Data on demand, whether for the purposes of this
Contract or for any other reasonable purpose, including, but not limited to,
inviting tenders as part of a competition for the right to manage and operate
the Sites and carry out the Commercial Operation Tasks to the extent allowed
under the DPA.  4.5.6The Authority shall procure that the Authority
Agents shall be suitably qualified third parties entitled to have the access
rights and/or undertake any of the inspections or audits referred to in this
Clause 4.5 (Inspection and Audit) on the Authoritys behalf. Such Authority
Agents shall report their findings directly to the Authority. The Contractor is
entitled to object to the Authority use of any Authority Agent on the grounds
that such Authority Agent is a direct competitor of the Parent Body
Organisation in the field of nuclear decommissioning and clean up or any other
activities carried on at the Site under this Contract. If the Contractor so
objects, it must notify the Authority in writing specifying the reasons for
such objection and the Authority, acting reasonably, shall consider whether to
use a different Authority Agent.  4.5.7The Contractor shall:  4.5.7.1fully
co-operate in relation to the provisions of this Clause 4.5 (Inspection and
Audit);  4.5.7.2provide the
Authority or any Authority Agent with all information reasonably required in
connection with the exercise of the Authoritys rights under this Clause 4.5
(Inspection and Audit); and  4.5.7.3keep all records
and other relevant documentation relating to the Contractors quality
management system and all information required to be held by the Contractor in
good order and in such form as to be capable of audit (including by electronic
means) by the Authority or by any Authority Agent and:  4.5.7.3.1make such records available for inspection by the Authority or any
Authority Agent at all reasonable times; and  4.5.7.3.2at the Authoritys or any Authority Agents request, make available to
the Authority or Authority Agent as applicable any software necessary to review
such records.  89


4.5.8The Authority shall:  4.5.8.1implement and
maintain procedures for notifying all Authority Agents of the Contractors
Internal Procedures relating to safety and Site security;  4.5.8.2use reasonable
endeavours to ensure that all Authority Agents comply with the relevant rules and
requirements;  4.5.8.3notify the
Contractor that an Authority Agent acting on behalf of the Authority in
accordance with this Clause 4.5 (Inspection and Audit) is duly authorised; and  4.5.8.4procure that
the Authority Agent has, in the Authoritys reasonable opinion, insurance that
is adequate and suitable to accord with the rights of access, audit and
inspection that the Authority may grant to such Authority Agent under this
Clause 4.5 (Inspection and Audit).  4.5.9Provision of Facilities  4.5.9.1Subject to
compliance with Regulatory Requirements, during any inspection or audit of the
Sites (pursuant to this Clause 4.5 (Inspection and Audit), the Contractor shall
(on request by the Authority or the Authority Agent) make available such
suitable office accommodation on the Sites (or, in respect of the Commercial
Operations Tasks, at any other locations which the Contractor uses in its
performance of such Commercial Operations Tasks) and such other facilities as
the Authority or Authority Agent may reasonably require for the purposes of
exercising the Authoritys rights of access, inspection and audit pursuant to
this Clause 4.5 (Inspection and Audit).  4.5.9.2All
accommodation provided shall be adequately furnished, lit, heated and
ventilated and shall include suitable access to cloakrooms and IT and
communication facilities.  4.5.10Co-operation with Regulators  The Authority undertakes to the
Contractor that it will co-operate with the Regulators in exercising its rights
under this Contract and will use reasonable endeavours to synchronise the Authoritys audits and
inspections with those of the Regulators where reasonably practical.  4.5.11Examination by National Audit Office  For the purpose
of:  4.5.11.1the examination
and certification of the accounts of the Authority; or  4.5.11.2any examination
pursuant to Section 6(1) of the National Audit Act 1983, or any
re-enactment thereof, of the economy, efficiency and effectiveness with which
the Authority has used its resources.  the Comptroller and Auditor General may examine such
documents relating to expenditure and income as he may reasonably require which
are owned,  90


held or otherwise within the control of the
Contractor and may require the Contractor to produce such oral or written
explanations as he considers necessary. 
The Contractor agrees that they will make such documentation available
to the Comptroller and Auditor General.  4.5.12Audit Findings and Corrective Action  4.5.12.1The Contractor
shall be entitled to receive a copy of the Authoritys audit findings once
completed in relation to any audit carried out in accordance with this Clause
4.5 (Inspection and Audit), subject to any redaction reasonably requested by an
Authority Agent.  4.5.12.2Within thirty
(30) Calendar Days of the Contractors receipt of the audit findings, the Parties
shall hold an Audit Close-Out Meeting.  4.5.12.3At the Audit
Close-Out Meeting, and where applicable, the Contractor shall have the
opportunity to demonstrate to the satisfaction of the Authority that some or
all of the relevant audit findings are incorrect.  4.5.12.4If, at the
Audit Close-Out Meeting, the Authority considers that certain Corrective Action
is required, the Contractor shall within thirty (30) Calendar Days of the Audit
Close-Out Meeting (or such other date as agreed between the Parties) either:  4.5.12.4.1carry out the
Corrective Action; or  4.5.12.4.2propose to the
Authority, and obtain the Authoritys approval for, a plan for carrying out the
Corrective Action.  4.5.13Where the Contractor proposes a plan for the
Corrective Action in accordance with Clause 4.5.12.4.2 above, the Authority
shall have thirty (30) Calendar Days to notify the Contractor whether it
accepts such proposed plan for the Corrective Action (such acceptance not to be
unreasonably withheld). Failure of the Authority to provide such notification
within the above period  shall constitute
deemed acceptance by the Authority. Where the Authority accepts or is deemed to
accept the Contractors plan the Contractor shall upon such acceptance or
deemed acceptance implement the plan for the Corrective Action. Where the
Authority notifies the Contractor that it does not accept the plan for the
Corrective Action, the Parties shall endeavour within the following thirty (30)
Calendar Days to agree any necessary amendments to the plan for the Corrective
Action. In the absence of agreement within such thirty (30) Calendar Day
period, the question of whether or not the Authoritys withholding of
acceptance is reasonable may be referred by either Party to be resolved in
accordance with Part 13 (Dispute Management).  4.5.14Books of Audit Findings  The Contractor shall maintain books containing the findings of audits carried out pursuant
to Clause 4.5 (Inspection and Audit) together with any relevant correction
reports setting out the Corrective Action taken as a result of such audit
findings in accordance with Clause 4.5.12 (Audit Findings and Corrective
Action).  91


4.5.15Good Practice  Without prejudice to Clause 8.4
(Authoritys Rights to IP developed by or on behalf of the Contractor and
Subcontractors), the Authority reserves the right to use any best practice
identified during any inspection or audit carried out pursuant to this Clause 4.5 (Inspection and Audit) and/or at
any Audit Close-Out Meeting, including the right to promulgate such good
practice across all nuclear sites designated under section 3 of the Energy Act.  4.5.16Records relating to Authoritys Property  Without prejudice to the generality
of this Clause 4.5 (Inspection and Audit), the Contractor shall provide the
Authority, any Authority Agent and the Comptroller and Auditor General (and any
of its authorised representatives) with full access to, the right of inspection of, and
extraction from all records whether manual or on computer that relate to the
Authoritys property (both real and personal) leased to or otherwise made
available to the Contractor. All such records shall be retained by the
Contractor for the period specified in Clause 4.3 (Retention of Records).  4.5.17Contractors Obligations Persist  The Contractor
shall not be excused from performance of any aspect of its obligations under
this Contract for any period of time during which the Authority and/or the Comptroller and
Auditor General are exercising their respective rights in accordance with this
Clause 4.5 (Inspection and Audit). If, as a result of any Authority or National
Audit Office inspection or audit, the Contractor is prevented from performing
its obligations under this Contract despite having used reasonable endeavours
to so perform, the Contractor shall be entitled to bring a Change Proposal in
accordance with Clause 2.6 (Setting the LTP and Change Control) and Part 2
of the Programme Management Schedule (Setting the LTP and Change Control) to
seek to address the impact of such inspection or audit.  4.5.18Confidentiality  The
Parties obligations under this Clause 4.5 (Inspection and Audit) shall be
subject to the obligations set out in Part 10 (Confidentiality, Security
and Compliance with Law).  92


PART 5 EMPLOYEES  5.1Nominated Staff  5.1.1The Contractor shall enter, and shall procure that
the Parent Body Organisation and each person who is a named member of  Nominated Staff (or is appointed as a
replacement for Nominated Staff) enters, into a Secondment Agreement in the
form attached at Part 3 of the Employee Schedule (Pro Forma Secondment
Agreement).  5.1.2Subject to Clause 5.1.3 below, the Contractor shall
not permit any of the Nominated Staff to be withdrawn from full time employment
on a Site without first obtaining the prior written consent of the Authority
(such consent not to be unreasonably withheld) as to the suitability and
adequacy of a replacement who must have a level of skills and experience
broadly comparable to that of the Nominated Staff being withdrawn, or if more
appropriate depending on the relevant job position, have the necessary skills
and experience required for that job position.  5.1.3Where the withdrawal from full time employment of
Nominated Staff and/or appointment of a replacement for a person named
Nominated Staff in accordance with this Clause 5.1 (Nominated Staff) requires
the approval of the Regulators, the Contractor shall procure all such approvals
as are necessary before making the withdrawal and/or replacement as applicable.  5.1.4In the event that individual persons designated
Nominated Staff are withdrawn and replaced in accordance with Clauses 5.1.1 to
5.1.3 above, them the Contractor shall enter, and shall procure that the Parent
Body Organisation and each replacement shall enter into a Secondment Agreement
in terms substantively to the term of the pro forma Secondment Agreement
attached at Part 3 of the Employee Schedule.  5.2Key Personnel  5.2.1The Authority shall be entitled to identify and name
individuals, whether Employees or Nominated Staff, as Key Personnel in its
absolute discretion. The individuals so named by the Authority are listed in Part 2
of the Employee Schedule (Key Personnel). Such list may be amended from time to
time by the Authority whether to take account of the replacement of any
individual as a member of Key Personnel or to add any new person or to remove
any person from such list.  5.2.2Subject to Clauses 5.2.3 below, the Contractor shall
not and shall procure that the Parent Body Organisation shall not:  5.2.2.1dismiss
(either summarily or on notice);  5.2.2.2suspend for
more than 5 Calendar Days;  5.2.2.3change the
job description of,  5.2.2.4subject to
Clause 5.8.4 (Terms and Conditions of Employment) alter any material term or
condition of the contract or terms of employment of;  93


5.2.2.5redeploy
or reallocate to other services  any Key Personnel without the
prior written consent of the Authority (such consent not to be unreasonably
withheld);  5.2.2.6do anything (by act or omission) which is,
or may be, a breach of the contract or terms of employment of, any Key
Personnel.  5.2.3      Where
either the Contractor or the Parent Body Organisation intends to withdraw from
employment any member of Key Personnel or Nominated Staff, the Contractor must
and shall procure that the Parent Body Organisation will:  5.2.3.1   obtain the prior written consent of the Authority
(such consent not to be unreasonably withheld) as to the suitability and
adequacy of a replacement who must have a level of skills and experience
comparable to that of the member of Nominated Staff or Key Personnel being
withdrawn, or if more appropriate depending on the relevant job position, have
the necessary skills and experience required for that job position; and  5.2.3.2   where such withdrawal and/or
appointment of a replacement member of Nominated Staff or Key Personnel in
accordance with this Clause 5.2.3 requires the approval of the Regulators,
procure all such approvals as are necessary before making the withdrawal and/or
replacement as applicable.  5.2.4Nothing in this Clause 5.2 (Key Personnel) will prevent the either
Contractor or the Parent Body Organisation from immediately dismissing or
suspending from their duties any Key Personnel or Nominated Staff where, in the
reasonable opinion of the Contractor or the Parent Body Organisation, such
action is:  5.2.4.1necessary to comply with
any applicable Law or Regulatory Requirements; and/or  5.2.4.2required to safeguard the
health and wellbeing of any employee on any Site; and/or  5.2.4.3justified on the grounds
that any member of the Key Personnel or Nominated Staff has committed an act of
gross misconduct; and/or  5.2.4.4justified on the grounds
that any member of the Key Personnel or Nominated Staff has failed a drugs
and/or alcohol test.  5.2.5Organisational Change  Subject to Regulatory Requirements, the Contractor shall not
make any material change to the organisational structure of the Contractor
without previously having consulted the Authority.  5.3Non-Contract Activities  The Contractor shall ensure and procure that the Employees
and the Nominated Staff are engaged solely in the performance of the Tasks and
the Contractors other  94


obligations under this Contractand/or the performance of the Contractors
obligations to the Authority in relation to other sites under the Energy Act or
another Site Management and Operations Contract, save as may otherwise be expressly agreed in writing in advance with the
Authority pursuant to Clause 16 (Provision of Staff to the SLC) of the Parent
Body Agreement or as permitted by the Contractors HR Internal Procedures.  If any Employee and/or any
Nominated Staff perform the Contractors obligations to the Authority in
relation to other sites under the Energy Act or another Site Management and
Operations Contract, the Contractor shall ensure that such Employees or
Nominated Staffs time (as the case may be) is apportioned and charged to the
relevant Site or site.  5.4Notice to Authority of Disputes  5.4.1The Contractor shall notify the Authority of the existence and details of
any grievance made in accordance with applicable statutory grievance procedures
or dispute (whether actual, pending or threatened) between:  5.4.1.1the Contractor and any of
the Employees or Nominated Staff; and/or  5.4.1.2   the Contractor and any of the
Contractors Subcontractors engaged in connection with this Contract and/or
their employees; and/or  5.4.1.3   the Contractor and any trade union
or other body representing any such person in Clause 5.4.1.1 or 5.4.1.2 above.  Such notification will be made as
soon reasonably practicable after the Contractor becomes aware of any such
grievance or dispute and the Contractor shallprovide such level of detail as the Authority reasonably requires.  5.4.2The Contractor
shall keep the Authority informed with updates and progress reports on any
dispute notified pursuant to Clause 5.4.1 above together with any proposed
settlements or developments which may affect the approved funding categories in
the LTP and/or LCBL.  5.5Maintenance Skills  The Contractor acknowledges the
responsibility of the Authority under section 9(2)(a) of the Energy Act in
relation to the maintenance and development in the United Kingdom of a skilled workforce and shall comply with the
provisions of Clause 2.7 (Subcontracting/Procurement). In particular, the
Contractor shall:  5.5.1when
considering redundancies or any other programme involving a reduction of
Employee or Nominated Staff numbers and/or when making make-or-buy decisions
pursuant to its Make-or-Buy Plan, take into account the Authoritys duty to
maintain and develop in the United Kingdom a skilled workforce under section
9(2)(a) of the Energy Act;  5.5.2consider and
plan future skills requirements and predict possible skills shortages and needs
and, in each case, train Employees and Nominated Staff and recruit and train
additional employees accordingly; and,  95


5.5.3ensure that
when it replaces any of the Employees pursuant to this Clause 5 (Employees),
the replacement has a level of skills and experience which:  5.5.3.1is at least broadly
comparable to that of the Employee that he or she is replacing; or  5.5.3.2   if more appropriate depending on the
relevant job position, matches the necessary skills and experience required for
that job position.  5.6Authority Approval of Redundancy  5.6.1Subject to
Clause 5.1 (Nominated Staff) and 5.2 (Key Personnel), the Contractor shall
procure that the Parent Body Organisation obtain the prior written consent of
the Authority (such consent not to be unreasonably withheld) in advance of:  5.6.1.1   commencing and/or continuing a
Redundancy programme or any other programme involving the reduction of employee
numbers such as a voluntary early release scheme; and/or  5.6.1.2   suspending or terminating the
employment of 5 or more Employees within any period of one (1) Month or
less or 15 or more Employees within any period of 3 months or less;  5.6.2Nothing in this Clause
5.6 (Authority Approval of Redundancy) will prevent the Contractor from
immediately dismissing or suspending from their duties or procuring such
dismissal or suspension by the Parent Body Organisation any Employees or from
procuring the immediate dismissal or suspension of Nominated Staff by the
Parent Body Organisation where, in the reasonable opinion of the Contractor,
such action is:  5.6.2.1necessary to comply with
any applicable Law or Regulatory Requirements;  5.6.2.2required to safeguard the
health and wellbeing of any employee on any Site;  5.6.2.3justified on the grounds
that any Employee has committed an act of gross misconduct; and/or  5.6.2.4justified on the grounds
that any Employee has failed an alcohol and/or drugs test.  5.7Non-Discrimination  The Contractor shall, in respect of the Employees, comply with, and
shall procure that the Parent Body Organisation and those of its agents,
Employees and Nominated Staff who carry out activities on any Site shall,
comply with, the:  5.7.1Sex
Discrimination Act 1975 and Sex Discrimination Act 1986;  5.7.2Race Relations
Act 1976;  5.7.3Disability
Discrimination Act 1995;  5.7.4Human Rights
Act 1998;  96


5.7.5Equal Pay Act
1970;  5.7.6Employment
Rights Act 1996;  5.7.7Employment
Equality (Sexual Orientation) Regulations 2003;  5.7.8Employment
Equality (Religion or Belief) Regulations 2003;  5.7.9Employment
Equality (Age) Regulations 2006; and  5.7.10any other legal
or statutory requirement, modification or re-enactment relating to
discrimination in employment, and shall procure that the Parent Body
Organisation and those of its agents who carry on activities on any Site
operate an appropriate equal opportunities policy.  5.8Terms and Conditions of Employment  5.8.1The Contractor
shall keep and maintain adequate HR Internal Procedures and records to enable
it to manage its Employees. Such HR Internal Procedures and records shall
contain, amongst other things, all Employees up to date terms and conditions
of employment and details of remuneration including bonus schemes.  5.8.2The Contractor
shall obtain the prior written consent of the Authority (such consent not to be
unreasonably withheld) before making any change to its HR Internal Procedures
and record keeping systems where such change will cause a significant increase
in the costs of operating the Sites and/or performing its obligations under
this Contract.  5.8.3Without
prejudice to the generality of Clause 5.8.2 the Contractor shall not (other
than when it is legally required to do so), without the prior written consent
of the Authority make or agree any changes to its procedures and policies
relating to the terms and conditions of Employees, including procedures and
policies which relate to:  5.8.3.1the inclusion, increase or reclassification in wages, salary, other
elements of pay, benefits or emoluments as pensionable or non-pensionable;  5.8.3.2increases in wages, salary, other elements of pay, benefits or
emoluments; and  5.8.3.3the agreement or approval of any severance or redundancy
augmentations to any wages, salary, other elements of pay, benefits or
emoluments  in each case the effect of which may increase the
costs incurred by the Authority in relation to Employees.  5.8.4Subject to
compliance with relevant employment law, the Contractor shall make such
additions to, omissions from, or other changes to the employment contracts of
Employees from time as required to be made by the Authority.  97


5.9Trade Union Agreements  5.9.1The Contractor
shall comply with and disclose to the Authority the terms of all agreements it
has made with trade unions or other bodies representing any of the Employees
where those agreements relate to any of the Employees.  5.9.2The Contractor
shall disclose to the Authority the terms of all agreements entered into with
trade unions or other bodies representing any of the Employees and shall keep
the Authority fully informed of any changes to any such agreement or of any new
agreements entered into which relate to any of the Employees.  5.10Termination Costs  The Authority shall recover, in
accordance with its rights under Clause 7 (Parent Body Organisation
Indemnities) of the Parent Body Agreement, all costs,claims, losses, liabilities and
expenses which arise out of the termination of the employment of any of the
Nominated Staff (or their replacements) from the Parent Body Organisation by
claiming under the Parent Body Organisation Indemnities. Where the Authority
makes a claim against the Parent Body Organisation pursuant to this Clause 5.10
(Termination Costs), it shall do so by serving a Demand on the Parent Body
Organisation specifying the amount due.  5.11Removal of Contractor or Subcontractor Employees from Sites  If:  5.11.1there is a
Contractor Default (whether or not remedied to the satisfaction of the
Authority in accordance with Clause 12.4 (Termination or Remedy for Contractor
Default)) and the Authority:  5.11.1.1has made all reasonable enquiries
into the circumstances in which the Contractor Default occurred; and  5.11.1.2believes, acting reasonably, that:  5.11.1.2.1the Contractor Default may fairly be attributable in whole or in
substantive part to any particular Employee or member of Nominated Staff; and  5.11.1.2.2if the relevant Employee were to continue in the employment of the
Contractor, it would adversely affect the Contractors ability to fulfil its
obligations to the Authority;  or  5.11.2the Authority
reasonably believes that the presence on the Sites of an Employee or
Subcontractors employee or a Nominated Staff represents a threat to health,
safety, security or the environment, then the Authority shall be entitled to
request that any such Employee, Subcontractors employee or Nominated Staff as
applicable be removed from the Sites.  5.11.3The Contractor
shall comply with any request made by the Authority pursuant to this Clause
5.11.  98


5.12PENSIONS (Pre Sale)  5.12.1Energy Act
Requirements  The
Contractor shall not do or omit to do anything that shall cause the Authority
to be in breach of any of  its duties and
obligations under Part 3 and/or Part 4 of Schedule  8 to the Energy Act. In the event of any breach
of this undertaking, the Contractor shall do all things necessary, as directed
by the Authority, to restore the rights and benefits of relevant Employees as
referred to therein.  5.12.2Participation
in Combined Nuclear Pension Plan  The Contractor shall, on the
Sale Date, enter into the Deed of Participation in the form attached as Part 4
of the Employee Schedule.  If for any
reason the Deed of Participation is not executed as aforesaid the Contractor
shall be deemed to have entered into the Deed of Participation and shall be
bound by and shall comply with the same as if the terms thereof were fully set
out  herein.For the avoidance of doubt, it is not expected that
Employees or Nominated Staff who are currently members of the Electricity
Supply Pension Scheme will transfer to the Combined Nuclear Pension Plan.  5.12.3Participation
in Other Applicable Schemes  The
Contractor shall participate in such of the other Applicable Schemes as the
Authority may at any time direct in respect of those of the Employees who were
Employees on the Commencement Date where this is necessary in recognition of
the Authoritys duties and obligations under Schedule 8 of the Energy Act and
who are not in the class of Employees referred to in Clause 2.3 of the Deed of
Participation and in respect of those who become Employees or Nominated Staff
after that date and who are not otherwise in the class of  Employees referred to in Clause 2.3 of the
Deed of Participation or at any time hereafter cease to be within the class of
Employees referred to in Clause 2.3 of the Deed of Participation.. In each
case, the Contractors obligations shall be subject to such consents as may be
required under the governing documentation of the Applicable Schemes, which
consents the Contractor and the Authority will each use their reasonable
endeavours to procure.  5.12.4The Contractor
shall not participate in any other pension scheme in respect of the Employees
or Nominated Staff without the consent of the Authority.  5.12.5The Contractor
shall not take or fail to take any action which would cause it to cease to
participate in any Applicable Scheme without the consent of the Authority.  5.12.6Authority
Rights and Contractor Obligations in Respect of Applicable Schemes  The Contractor shall, in respect of
all Applicable Schemes in which it participates under Clauses 5.12.2 and/or
5.12.3,  5.12.6.1appoint the Authority as
its nominee for the purposes of consultation on the investment strategy of the
Applicable Schemes under section 35 of the Pensions Act 1995. The Contractor  99


acknowledges that the Authority may take account of its own
interests as well as those of the Contractor when discussing investment
strategy with the trustees (or if there are no applicable trustees the
administrator) or managers of the Applicable Schemes. In respect of any
Applicable Scheme to which section 35 of the Pensions Act 1995 does not apply,
any powers held by the Contractor under the Scheme to influence notional investment
strategy shall be delegated to the Authority.  5.12.6.2appoint the
Authority as its nominee for the purposes of consultation on the member
nominated trustee provisions of the Pensions Act 1995 and the Pensions Act
2004.  5.12.6.3not exercise
or consent to the exercise of any powers or discretions in relation to the
Applicable Schemes without the consent of the Authority and shall exercise any
such powers or discretions and shall give such consents in such a way as the
Authority may direct.  5.12.6.4Without
limiting the obligations in Clauses 5.12.2 and 5.12.3 and 5.12.6 above in any
way, the Contractor shall in relation to Applicable Schemes in which it
participates under Clauses 5.12.2 and/or 5.12.3  5.12.6.4.1agree to the
substitution of the Authority as Principal Employer of the Applicable Scheme if
the Authority so requests and if such substitution is permitted under the
governing documentation of the Applicable Scheme;  5.12.6.4.2set or agree employer
contribution rates as directed by the Authority;  5.12.6.4.3comply  with the Scheme Documents and, in respect of
Applicable Schemes other than the CNPP, comply with the trust deeds or such
other governing documents and rules of the relevant Applicable Schemes
relevant to it as employer;  5.12.6.4.4pay all sums due to the Scheme
Trustee or the trustees (or if there are no applicable trustees the
administrator) of other Applicable Schemes as and when they fall due;  5.12.6.4.5comply with administration
systems and risk management procedures as reasonably required by the Authority
or the relevant Applicable Scheme;  5.12.6.4.6comply with all obligations
whenever arising to consult in respect of matters related to pensions and
disclose all relevant information in advance of its issuance to the Authority
and in connection therewith cooperate and liaise with the Authority as
reasonably required by the Authority  5.12.6.5where it has
power, amend the Applicable Schemes as directed by the Authority and not amend
the Applicable Schemes otherwise;  100


5.12.6.5.1not agree to the funding of
any deficit or the treatment of any surplus without the consent of the
Authority;  5.12.6.5.2not make any augmentations to
benefits without consent of the Authority;  5.12.6.5.3not admit any other employer
to the Applicable Scheme without the consent of the Authority;  5.12.6.5.4not terminate (or allow to
terminate) the service of any Employees or Nominated Staff in circumstances
where an enhanced benefit would be due under the Applicable Schemes without the
consent of the Authority;  5.12.6.5.5not wind up the scheme or any
part or section of it  without the
consent of the Authority;  5.12.6.5.6comply with its obligations as
employer arising under the general law relating to pensions; and  5.12.6.6except where
and to the extent required by law, not make, without the consent of the
Authority, any announcements or issue any, material, information  or issue any publicity or advertising in any
media or form whatsoever affecting or relating to pension arrangements such
consent not to be unreasonably withheld or delayed.  5.12APENSIONS (Post Sale)  5.12A.1Energy Act
Requirements  The
Contractor shall not do or omit to do anything that shall cause the Authority
to be in breach of any of its duties and obligations under Part 3 and/or Part 4
of Schedule  8 to the Energy Act. In the
event of any breach of this undertaking, the Contractor shall do all things
necessary, as directed by the Authority, to restore the rights and benefits of
relevant Employees as referred to therein.  5.12A.2Participation
in Combined Nuclear Pension Plan  The Contractor shall, on the
date of execution of this Agreement, enter into the Deed of Participation in
the form attached as Part 4 of the Employee Schedule.  If for any reason the Deed of Participation
is not executed as aforesaid the Contractor shall be deemed to have entered
into the Deed of Participation and shall be bound by and shall comply with
the  same as if the terms thereof were
fully set out  herein.For the avoidance of doubt, it is not expected that
Employees or Nominated Staff who are currently members of the Electricity
Supply Pension Scheme will transfer to the Combined Nuclear Pension Plan.  5.12A.3Participation
in Other Applicable Schemes  The
Contractor shall participate in such of the other Applicable Schemes as the
Authority may at any time direct in respect of those of the Employees who were
Employees on the Commencement Date where this is necessary in recognition of
the Authoritys duties and obligations under Schedule 8 of the  101


Energy Act
and who are not in the class of Employees referred to in Clause 2.3 of the Deed
of Participation and in respect of those who become Employees or Nominated
Staff after that date and who are not otherwise in the class of  Employees referred to in Clause 2.3 of the
Deed of Participation or at any time hereafter cease to be within the class of
Employees referred to in Clause 2.3 of the Deed of Participation.. In each
case, the Contractors obligations shall be subject to such consents as may be
required under the governing documentation of the Applicable Schemes, which
consents the Contractor and the Authority will each use their reasonable
endeavours to procure.  5.12A.4      The Contractor shall not
participate in any other pension scheme in respect of the Employees or
Nominated Staff without the consent of the Authority.  5.12A.5      The
Contractor shall not take or fail to take any action which would cause it to
cease to participate in any Applicable Scheme without the consent of the
Authority.  5.12A.6      Authority
Rights and Contractor Obligations in Respect of Applicable Schemes  The Contractor shall, in respect of
all Applicable Schemes in which it participates under Clauses 5.12A.2 and/or
5.12A.3,  5.12A.6.1appoint the
Authority as its nominee for the purposes of consultation on the investment
strategy of the Applicable Schemes under section 35 of the Pensions Act 1995.
The Contractor acknowledges that the Authority may take account of its own
interests as well as those of the Contractor when discussing investment
strategy with the trustees (or if there are no applicable trustees the
administrator) or managers of the Applicable Schemes. In respect of any
Applicable Scheme to which section 35 of the Pensions Act 1995 does not apply,
any powers held by the Contractor under the Scheme to influence notional
investment strategy shall be delegated to the Authority.  5.12A.6.2appoint the
Authority as its nominee for the purposes of consultation on the member
nominated trustee provisions of the Pensions Act 1995 and the Pensions Act
2004.  5.12A.6.3not exercise
or consent to the exercise of any powers or discretions in relation to the
Applicable Schemes without the consent of the Authority and shall exercise any
such powers or discretions and shall give such consents in such a way as the
Authority may direct.  5.12A.6.4Without limiting
the obligations in Clauses 5.12A.3 and 5.12A.4 and 5.12A.6 in any way, the
Contractor shall in relation to Applicable Schemes in which it participates
under Clauses 5.12A.2 and/or 5.12A.3  5.12A.6.4.1      agree
to the substitution of the Authority as Principal Employer of the Applicable
Scheme if the Authority so requests and if such substitution is permitted under
the governing documentation of the Applicable Scheme;  102


5.12A.6.4.2      set
or agree employer contribution rates as directed by the Authority;  5.12A.6.4.3      comply  with the Scheme Documents and, in respect of
Applicable Schemes other than the CNPP, comply with thetrustdeeds or
such other governing documents and rules of the relevant Applicable
Schemes relevant to it as employer;  5.12A.6.4.4      pay
all sums due to the Scheme Trustee or the trustees (or if there are no
applicable trustees the administrator) of other Applicable Schemes as and when
they fall due;  5.12A.6.4.5      comply
with administration systems and risk management procedures as reasonably
required by the Authority or the relevant Applicable Scheme;  5.12A.6.4.6      comply
with all obligations whenever arising to consult in respect of matters related
to pensions and disclose all relevant information in advance of its issuance to
the Authority and in connection therewith cooperate and liaise with the
Authority as reasonably required by the Authority  5.12A.6.5where it has
power, amend the Applicable Schemes as directed by the Authority and not amend
the Applicable Schemes otherwise;  5.12A.6.5.1not agree to the funding of any
deficit or the treatment of any surplus without the consent of the Authority;  5.12A.6.5.2      not
make any augmentations to benefits without consent of the Authority;  5.12A.6.5.3      not
admit any other employer to the Applicable Scheme without the consent of the
Authority;  5.12A.6.5.4      not
terminate (or allow to terminate) the service of any Employees or Nominated
Staff in circumstances where an enhanced benefit would be due under the
Applicable Schemes without the consent of the Authority;  5.12A.6.5.5      not
wind up the scheme or any part or section of it 
without the consent of the Authority;  5.12A.6.5.6      comply
with its obligations as employer arising under the general law relating to
pensions; and  5.12A.6.6except where
and to the extent required by law, not make, without the consent of the
Authority, any announcements or issue any, material, information  or issue any publicity or advertising in any
media or form whatsoever affecting or relating to pension  103


arrangements such consent not to be unreasonably withheld or
delayed.  PART 6: FINANCE (Pre Sale)  6.1Funding Limits  The
Contractor must fulfil its obligation to perform the Tasks and its other
obligations under this Contract within the SLC Funding Limit, Current Budget,
Capital Budget and PSWBS Category Levels (in each case as amended in accordance
with Part 2 (Setting the LTP and Change Control) of the Programme
Management Schedule if applicable) set by the Authority for each Contract Year
as specified in Part 1 of the Finance Schedule (Funding Limits and
Available Incentive Fee).  6.2.Determination of Funding Limits and
Compliance with Funding Limits  6.2.1Prior to each Contract Year, the Authority shall determine and notify the
Contractor in respect of the Site and the Sites of the SLC Annual Funding Limit
and Annual Site Funding Limits, the Site Current Budgets, the Current Budget,
the Site Capital Budgets and the Capital Budget for that Contract Year in
accordance with Part 2 of the Programme Management Schedule (Setting the
LTP and Change Control).  6.2.2Subject to Clause 6.2.3 below, if the Contractor breaches
the SLC Annual Funding Limit and/or Current Budget without the express written
consent of the Authority obtained pursuant to Clause 2.6 (Setting the LTP and
Change Control), the costs incurred in excess of such SLC Annual Funding Limit
and/or Current Budget, as applicable, shall be Disallowable Costs.  6.2.3To the extent that the Contractors breach of the SLC Annual
Funding Limit and/or Current Budget arises as a direct result of an event
listed at Paragraph 11 of Part 2 (Changes that the Authority Cannot
Refuse) of the Programme Management Schedule (Setting the LTP and Change
Control) then the costs incurred in excess of such SLC Annual Funding Limit
and/or Current Budget shall not be Disallowable Costs.  6.3Restrictions on Payment to Parent Body Organisation  Subject to
Clauses 6.11.8 (Payments to Parent), the Contractor shall not without the prior
written consent of the Authority make any payment to the Parent Body
Organisation.  6.4Other Financial Restrictions  6.4.1The Contractor shall not without the prior written consent of the
Authority:  6.4.1.1dispose,
let or otherwise part with the possession of the whole of or any part of the
Sites, business, undertaking or asset including any asset subject to a finance
or operating lease;  6.4.1.2make any
change to its accounting reference date;  6.4.1.3make any
change to the Accounting Policies and Procedures save as required by applicable
Law, UK generally accepted accounting principles or HM Treasurys Government
Reporting Requirements;  6.4.1.4create or
permit to subsist any Security Interest over any Authority Assets or give any
guarantee or indemnity to or for the benefit of any person or otherwise assume
liability or become obliged (actually or contingently) in respect of any
obligation of any other person, in each case other than as permitted by this
Contract save that nothing in this  104


Clause 6.4.1.4 is intended to
prevent the creation of any liens in the course of performance of this
Contract;  6.4.1.5borrow
(including intra-group) or make any payment under any intra-group borrowings;  6.4.1.6create or
acquire any subsidiary or dispose of any shareholding in a subsidiary or make
or have any investment in any other entity, except for the deposit of cash in
the Contractors Fee Account, or the Contractors Payment Account ;  6.4.1.7commence
any litigation or arbitration other than:  6.4.1.7.1       in
accordance with Clause 7.6 (Necessary Consents), Part 8 (Intellectual
Property) or Clause 1.25 (Claims Handling);  6.4.1.7.2       in
accordance with the Dispute Resolution Procedure;  6.4.1.7.3       in
any attempt to commence judicial review proceedings against the Authority in
connection with this Contract;  6.4.1.7.4       to
challenge any threatened or actual revocation of the Nuclear Site Licence or
any other regulatory permit or consent which is essential to the Contractors
ability to operate any Site or carry out the Commercial Operations Tasks in
accordance with Law; or  6.4.1.7.5       to
apply for or resist or join into an injunction which the Contractor, acting
reasonably, considers urgent and necessary to the Contractors performance of
its obligations to the Authority;  6.4.1.8incur any liability or financial indebtedness except as
permitted by this Contract;  6.4.1.9make any loan or grant any credit, or have or permit to
subsist any loan or any credit, to any person (other than the deposit of cash
with a financial institution or Office of the Paymaster General as permitted by
this Contract);  6.4.1.10 enter into any finance or
operating leases;  6.4.1.11 notwithstanding the
Permitted Activities, enter into any Customer Contract or Subcontract where a
disproportionate element of liability, cost or benefit is likely to crystallise
after the expiry of this Contract; and  6.4.1.12 make payment of any
management or other charges to the Parent Body Organisation or to any of its
Affiliates:  6.4.1.12.1in excess of those set out in Subcontracts specifically
approved by the Authority pursuant to Clause 2.7 (Subcontracting/Procurement);  6.4.1.12.2unless under an Existing Agreement which is not a Recent
Existing Agreement;  6.4.1.12.3unless in respect of a Recent Existing Agreement which is
awaiting the Authoritys review pursuant to Clause 2.10 (Assumption of Existing
Agreements);  6.4.1.12.4in excess of those set out in Recent Existing Agreements
approved or amended by the Authority pursuant to Clause 2.10 (Assumption of
Existing Agreements);  105


6.4.1.12.5unless pursuant to Clauses 6.11.8 (Payment to Parent);  6.4.1.12.6unless as agreed under an Advance Agreement  6.4.1.13 undertake hedging
activities (except in accordance with the Currency Hedging Strategy).  6.4.2For the purposes of Clause 6.4 (Other Financial Restrictions), other than
where the Authority has expressly given or withheld its consent in writing, the
Contractor shall be deemed to have the prior written consent of the Authority
to carry out any of the activities in Clauses 6.4.1.1 to 6.4.1.13 (Other
Financial Restrictions) to the extent the relevant activity is expressly:  6.4.2.1set out in the then current Contract Year of the LTP;  6.4.2.2contained in a Subcontract or Customer Contract which is
specifically approved by the Authority. For the avoidance of doubt and
notwithstanding any other provision of this Contract, any Subcontract or
Customer Contract which enables the Contractor to do any of the matters set out
in Clause 6.4 (Other Financial Restrictions) requires the approval of the
Authority notwithstanding the Permitted Activities;  6.4.2.3contained in an Internal Procedure reviewed by the Authority
and accepted or deemed to have been accepted by the Authority in accordance
with Clause 2.8  (Contractors Internal
Procedure);  6.4.2.4save in the case of Clause 6.4.1.11, a Permitted Activity or
otherwise approved by the Authority in accordance with Clause 3.6.2 (Authoritys
right to be consulted in respect of Customer Contracts); or  6.4.2.5in the case of Clause 6.4.,2.1, permitted by Clause
6.4.1.12.5.  6.5Historical Costs  6.5.1Without prejudice to Clause 6.5.4, the Contractor shall
determine whether any cost, claim or liability which relates to the period
prior to 1 April 2005 falls within the definition of a BNF Historical Cost
or a Contractor Historical Cost or a BNF Historical Trading Cost or a
Contractor Historical Trading Cost, in accordance with the provisions of the
Overarching Costs Management Agreement.  6.5.2The Contractor shall mitigate, to the extent reasonably
possible, all Contractor Historical Costs and meet such Contractor Historical
Costs subject, where relevant, to the provisions of Clause 1.25 (Claims
Handling).  6.5.3Where the Contractor, in error, has paid a BNF Historical
Cost or a BNF Historical Trading Cost, the Contractor shall reclaim such BNF
Historical Cost or Group BNF Historical Trading Cost from the relevant BNF
Company in accordance with the terms of the Overarching Costs Management Agreement.
The Contractor shall pay any amounts reclaimed pursuant to this Clause 6.5.3 to
the Authority as Category I Revenue.  6.5.4The treatment of pension deficit contributions in relation
to the Applicable Schemes shall not be dealt with under this Clause 6.5
(Historical Costs). Such deficit contributions shall be made in accordance with
the Schedule of Contributions for the relevant Applicable Scheme prepared under
section 58 Pensions Act 1995 or section 227 Pensions Act 2004 together with any
other obligations as to funding imposed by the documents governing the
Applicable Schemes.  106


6.6Cashflow  6.6.1Payments Account  6.6.1.1 The Contractor is entitled
to drawdown funds from the OPG Payments Account on a daily basis which it
requires:  (A)to meet its
obligations to make payments to creditors as they Fall Due and in accordance
with Government Payment Obligations (save as otherwise agreed by the Authority
in writing),such obligations to
creditors incurred in the Contractors proper performance of its obligations
under the Contract (but excluding any costs properly to be met from a Customer
Ringfenced Account); and  (B)to fund any
foreign currency hedging activities carried out in accordance with the Currency
Hedging Strategy or to which the Authority has given its prior written consent
in accordance with Clause 6.4.1.13 above (Other Financial Restrictions)  6.6.1.2Each drawdown of funds must be authorised on behalf of the Contractor and
on behalf of the Authority.  Both the
Contractor and the Authority shall have, maintain and comply with effective
internal procedures to ensure secure and timely drawdown of funds.  6.6.1.3  (A)The Contractor
will advise the Authority of the amount to be drawn down from the OPG Payment
Account on a daily basis, within a timeframe notified by the Authority, acting
reasonably from time to time.  (B)The Contractor
will provide such supporting information relating to the drawdown from the OPG
Payments Account as the Authority, acting reasonably, requires and notifies to
the Contractor from time to time.  The
supporting information will include a transaction analysis report, the relevant
daily statement, an explanation of any variance from the latest cash flow
forecast, an explanation for an opening balance on any of the Contractors bank
accounts other than zero (other than any Customer Ringfenced Accounts or
Foreign Exchange Accounts) and, on a monthly basis, a report on balances in all
foreign currency bank accounts held by or on behalf of the Contractor.  6.6.1.4If the Authority reasonably believes that the Contractor intends to use all
or part of any drawdown of funds from the OPG Payments Account for purposes
which are fraudulent or otherwise illegal or contrary to public policy the
Authority will not authorise the drawdown of such funds until it is satisfied,
acting reasonably, that such of the funds are to satisfy the proper purposes of
the Contractor in its performance of this Contract.  The Authority shall no later than five (5) Calendar
Days after withholding its 
authorisation, inform the Contractor that it has not authorised the
release of such funds and shall inform the Contractor of the amount withheld
and the reason or reasons for the lack of authorisation.  6.6.1.5Funds drawn down by the Contractor pursuant to Clause 6.6.1.1 above shall
be transferred only into the Contractors Payments Account, from which the
Contractor shall only:  (A)make payments to
creditors as they Fall Due and in accordance with Government Payment
Obligations (save as otherwise agreed by the Authority); or  107


(B)Transfer monies
into the Foreign Exchange Accounts to fund any foreign currency hedging
activities carried out in accordance with the Currency Hedging Strategy or to
which the Authority has given its prior written consent in accordance with
Clause 6.4.1.13 above (Other Financial Restrictions) and/or to make payments to
creditors as they Fall Due and in accordance with Government Payment
Obligations (save as otherwise agreed by the Authority in writing),  and the Contractor shall accurately record such
transfers of funds and payments to creditors on the Ledger for the Site to
which such transfer or payment relates.  6.6.1.6The balance of any funds transferred from the OPG Payments Account into the
Contractors Payments Account or ESTLs Capital Adequacy Account and recorded
on the relevant site ledger (as applicable) and not paid out to creditors or
required to meet the Capital Adequacy Requirements or required to fund deposits
to be made pursuant to any of the Cash Credit Support Agreements (subject to
any restrictions imposed by the Authority pursuant to Clause 3.6 and/or set out
in the Permitted Activities and the Trading Limits) or to fund any foreign
currency hedging activities carried out in accordance with the Currency Hedging
Strategy or which the Authority has given its prior written consent in
accordance with Clause 6.4.1.13 (Other Financial Restrictions) shall reduce the
Contractors or ESTLs (as applicable) requirement for and entitlement to
further drawdowns of funds from the OPG Payments Account by an equal amount.  6.6.1.7If the Authority, acting reasonably, considers that the balance of funds in
any  Foreign Exchange Account is surplus
to the requirements of the Contractors or ESTLs (as applicable) performance
of its obligations under this Contract, or if the balance of funds in ESTLs
Capital Adequacy Account is surplus to ESTLs Capital Adequacy Requirements, or
if amounts on deposit pursuant to any of the Cash Credit Support Agreements is
in excess of any restrictions imposed by the Authority pursuant to Clause 3.6
and/or set out in the Permitted Activities and the Trading Limits, then the
Authority shall be entitled to require the Contractor or ESTL (as applicable)
to withdraw such surplus funds from such Foreign Exchange Account or the
Capital Adequacy Account (as the case may be) or the relevant account in
relation to the relevant Cash Credit Support Agreement and pay such surplus
funds to the Authority as Category 1 Revenue within twenty-one (21) Calendar
Days of the Contractors or ESTLs (as applicable) withdrawal of such surplus
funds.  6.6.1.8The Contractor shall record on the relevant Site Trading Ledger all
funds drawndown to meet Trading Costs. Trading Costs correctly recorded on the
relevant Site Trading Ledger shall not reduce the available balance of any
Annual Site Funding Limit, Current Budget, Capital Budget or PSWBS Category
Level.  6.6.2Cashflow Forecasting  6.6.2.1The Contractor shall submit to the Authority a cashflow forecast in a form
and at a frequency to be determined by the Authority, acting reasonably, and
notified to the Contractor from time to time.  6.6.2.2The
timeliness and accuracy of the cashflow forecast as determined in accordance
with Clause 6.6.2.1 as compared with the Contractors requests to the Authority
for payment into the Contractors Payments Account  as well as the Contractors adherence to the
Authoritys reasonable requirements from time to time (which the Authority
shall notify to the Contractor) shall be a  108


criterion under which 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) but declaring that in any Contract Year the amount by which the
Authority shall be entitled to reduce the Incentive Fee on the basis of such
criterion shall be limited to the sum being 50% of the Total Incentive Fee
payable to the Contractor in respect of such Contract Year for the Sixth Site.  6.6.3Reimbursement  6.6.3.1    Should
the Contractor become aware that it has drawn down funds from the OPG Payments
Account in respect of payments which relate to a Disallowable Cost, it shall
use its best endeavours to procure that within thirty (30) Calendar Days of
such drawdown the Parent Body Organisation pays a sum equal to the amount of
such drawn down funds to the Authority.  6.6.3.2    Should
the Authority become aware that the Contractor has drawn down funds from the
OPG Payments Account for payments which relate to a Disallowable Cost, it shall
be entitled to require the Contractor to take the actions described in Clause
6.6.3.1 above.  6.7Not Used  6.8Customer Ringfenced Accounts  6.8.1      The
Contractor is entitled to draw down funds from Customer Ringfenced Accounts in
accordance with the legally binding provisions and/or documented understandings
with the relevant customer(s) (where inconsistent with legally binding
provisions the legally binding provisions shall prevail) governing withdrawal
from such Customer Ringfenced Accounts to meet such costs as it is entitled to
meet from Customer Ringfenced Accounts.  6.8.2      For
the avoidance of doubt, funds in Customer Ringfenced Accounts shall not
constitute Category I revenue or Category II Revenue unless or until released
from such Customer Ringfenced Accounts as revenue in accordance with the terms
governing the operation of such accounts.  6.9Determination of Revenue Category  6.9.1      Subject
to Clause 6.9.4, in each Contract Year during the setting of the LTP for the
next Contract Year pursuant to Paragraph 7 (NTWP and LTP) of Part 2 of the
Programme Management Schedule (Setting the LTP and Change Control), the
Authority shall in respect of any Site or Sites be entitled, acting reasonably
and in consultation with the Contractor, to:  6.9.1.1amend the definition of Category II Revenue so that revenue which would
otherwise have fallen into the definition of Category I Revenue falls into the
definition of Category II Revenue for all succeeding Contract Years; and/or  6.9.1.2amend categories of revenue within or delete categories of revenue from the
definition of Category I Revenue and/or Category II Revenue for all succeeding
Contract Years.  6.9.2      If
the amount of Category II Revenue received by the Contractor to date in the
current Contract Year exceeds the amount forecast by the Contractor in the LTP
as receivable for that Contract Year in respect of any Site as set out in
Finance Schedule Part 1 (Funding Limits and Available Incentive Fee), the
Authority shall be entitled in respect of such Site at any time thereafter in
the current Contract Year, acting reasonably, to treat the excess revenue
falling within the definition of Category II Revenue for such Site as revenue
falling into the definition of Category I Revenue for any Site.  109


6.9.3Prior to setting the Funding Limits for the next
Contract Year in accordance with Paragraph 7 (NTWP and LTP) of Part 2 of
the Programme Management Schedule (Setting the LTP and Change Control), the
Authority shall (acting reasonably and in consultation with the Contractor) be
entitled at any time to add new categories of revenue to the definition of
Category I Revenue and/or Category II Revenue to the extent that such
categories of revenue are not already accounted for as Category I Revenue or
Category II Revenue in the current Contract Years LTP.  6.9.4The assumption is that monies received or receivable
by the Contractor shall predominantly be treated as Category I Revenue. Any
dispute as to whether monies received or receivable by the Contractor are to be
treated as Category I Revenue or Category II Revenue shall be determined by the
Authority acting reasonably.  6.10Receipts
Accounts  The Contractor shall pay all Category I Revenue and
Category II Revenue into the Contractors Receipts Accounts within nine (9) Working
Days of its receipt of such Revenue and shall transfer the entire balance of
the Contractors Receipts Account on a daily basis to the OPG Receipts Account,
in either case other than as specifically instructed in writing by the Authority.  6.11Reimbursement  6.11.1Allowable and Disallowable Costs  6.11.1.1The Contractor
acknowledges that the Authority is entitled to be reimbursed by the Parent Body
Organisation for any payments which relate to Disallowable Costs.  6.11.1.2The Contractor
must determine whether a payment in respect of a Cost is an Allowable Cost or a
Disallowable Cost in accordance with Part 4 of the Finance Schedule (Costs
Principles and Procedures).  6.11.1.3The Contractor
shall be entitled to agree in advance with the Authority as to whether certain
Costs it proposes to incur are Allowable Costs by entering into Advance
Agreements with the Authority pursuant to the process set out in Part 4 of
the Finance Schedule (Costs Principles and Procedures).  6.11.1.4Should the
Contractor become aware that it has incorrectly determined an Allowable Cost as
a Disallowable Cost and accordingly wishes to claim such Cost as an Allowable
Cost, it shall be entitled to make such claim.  6.11.2If the
Parties cannot agree whether a particular Cost is an Allowable Cost or a
Disallowable Cost according to this Clause 6 or Part 4 of the Finance
Schedule (Costs Principles and Procedures), the matter shall be resolved in
accordance with Part 13 (Dispute Management).  6.11.3Performance Based Incentive Arrangements  6.11.3.1The PBIs shall be
prepared and determined, and thePBI shall be calculated and paid, in accordance with Part 2 (Use of
Performance Based Incentives) of the Finance Schedule.  6.11.3.2.The Contractor may propose, and the Authority may
require the Contractor to bring forward, changes to PBIs at any time during the  110


Contract Year in accordance with Part 2 of the Finance Schedule
(Use of Performance Based Incentives).  6.11.4Incentive
Fee  6.11.4.1The Incentive Fee shall becalculated, in
accordance with Part 2 (Use of Performance Based Incentives) of the
Finance Schedule.  6.11.5Alternative
Basis of Remuneration   6.11.5.1Should the Parties agree to utilise an alternative basis of
remuneration to reimbursement of Allowable Costs andIncentive Fee
they shall as appropriate agree:  6.11.5.1.1the
basis of remuneration; and  6.11.5.1.2the
work or services to which it relates; and  6.11.5.1.3the
terms and conditions upon which such work or services is to be performed; and  6.11.5.1.4to
the extent the terms of this Contract are not applicable and/or to the extent
that any additional terms or conditions are required or require to be amended,
the deletions from and additions to and amendments of this Contract; and  6.11.5.1.5the
relevant rates and prices, any profit, overhead and incentive arrangements; and  6.11.5.1.6the
method of and basis for variation and adjustment  and the Parties
shall document the same in a written agreement to be attached as a supplemental
agreement to this Contract.  6.11.5.2For the avoidance of doubt any such supplemental agreement:  6.11.5.2.1shall
apply only in respect of the work and services specified therein and shall have
no other effect upon the terms of this Contract; and  6.11.5.2.2shall
contain provisions allocating responsibility for the costs of additional works
needed as a consequence of the Contractors failure to comply with the
requirements of this Contract in accordance with Part 7 of the Finance
Schedule (Provisions Applying
to Defective Performance of Alternative Remuneration Tasks).  6.11.6Payment of Incentive Fee  6.11.6.1Where any amount of Incentive Fee is awarded provisionally pursuant to Part 2
of the Finance Schedule (Use of Performance based Incentives), the Contractor
may issue a VAT invoice for the net amount of the Incentive Fee plus VAT
seeking payment of such amount into the Contractors Fee Account and, subject
to the sum sought being properly due and to Clause 6.11.6.3 below, the
Authority will make such payment.  6.11.6.2If Clause 6.11.6.1 applies, the Authority subject to Clauses 6.11.6.3,
6.11.6.4, 6.11.6.5 and 6.11.6A.4 will pay a maximum of 5 (five) per cent of the
Contractors Available Incentive Fee for the relevant Contract Year on the last
Working Day in each Month within the Contract Year in respect of provisionally
awarded Incentive Fee unless, subject to Clause 6.11.6.3 below the Authority in
its sole discretion, agrees to pay a higher amount  111


of provisionally
awarded Incentive Fee in any Month within the Contract Year, subject always to
a maximum figure equal to 60% of the Available Incentive Fee within any
Contract Year.  6.11.6.3Notwithstanding Clauses 6.11.6.1 and 6.11.6.2 above, the Authority will
not pay more than 60% of the Available Incentive Fee to the Contractor in
respect of provisionally awarded Incentive Fee in any Contract Year.  6.11.6.4The Authority may
during the seventh Month and during the tenth Month of each Contract Year
require the Contractor to provide such information as the Authority may
reasonably require in order to satisfy itself so far as reasonably practicable
at that stage of the Contract Year that the total of the payments made by the
Authority pursuant to Clause 6.11.6.2 for the Contract Year will not exceed the
total of the Incentive Fee payable for such Contract Year.  In the event that the Authority reasonably
believes on the basis of such information or otherwise that the total of the
payments made by the Authority pursuant to Clause 6.11.6.2 for the Contract
Year will exceed the amount of the Authoritys reasonable estimate of the total
Incentive Fee which will be payable in respect of such Contract Year, the
Authority may decide to reduce its monthly payment pursuant to Clause 6.11.6.2
so that the total of such payments for the Contract Year is equal to the amount
being the Authoritys reasonable estimate of the total Incentive Fee which
shall be payable in respect of such Contract Year.  6.11.6.5In
the event that the Authority reasonably believes on the basis of the
information provided pursuant to Clause 6.11.6.4 or otherwise that the total of
the payments made by the Authority pursuant to Clause 6.11.6.2 in any Contract
Year exceeds the Authoritys reasonable estimate of the total Incentive Fee
payable in respect of such Contract Year, the Authority shall be entitled to
make no further payments during such Contract Year pursuant to Clause 6.11.6.2
and may during the remaining period of such Contract Year deduct the amount by
which the total of the payments so made exceeds the Authoritys reasonable
estimate as aforesaid from any amounts of Budgeted Efficiency Gain Fee which
would but for this provision remain to be paid pursuant to clause 6.11.6.2.  6.11.6APayment
of Budgeted Efficiency Gain Fee  6.11.6A.1Subject
to Clauses 6.11.6A.3, 6.11.6A.4 and 6.11.6.5, the Authority will pay 5 (five) per cent of
the Budgeted Efficiency Gain Fee for the relevant Contract Year on the last
Working Day in each Month within that Contract Year on account of Efficiency
Gain Fee.  The Contractor will issue a
VAT invoice for the net amount of the Budgeted Efficiency Gain Fee plus VAT.  6.11.6A.2The Authority will not pay more than 60% of
the Budgeted Efficiency Gain Fee to the Contractor on account of Efficiency
Gain Fee in any Contract Year.  6.11.6A.3The Authority may during the seventh Month
and during the tenth Month of each Contract Year require the Contractor to provide
such information as the Authority may reasonably  112


require in
order to satisfy itself so far as reasonably practicable at that stage of the
Contract Year that the total of the payments made by the Authority pursuant to
Clause 6.11.6A.2 for the Contract Year will not exceed the total of the
Efficiency Gain Fee payable for such Contract Year.  In the event that the Authority reasonably
believes on the basis of such information or otherwise that the total of the
payments made by the Authority pursuant to Clause 6.11.6A.1 for the Contract
Year will exceed 80% of the amount of the Authoritys reasonable estimate of
the total Efficiency Gain Fee which will be payable in respect of such Contract
Year, the Authority may decide to reduce its monthly payments pursuant to
Clause 6.11.6A.1so that the total of such payments for the Contract Year is
equal to the amount being 80% of the Authoritys reasonable estimate of the
total Efficiency Gain Fee which will be payable in respect of such Contract
Year.  6.11.6A.4In the event that the Authority reasonably
believes on the basis of the information provided pursuant to Clause 6.11.6A.3
or otherwise that the total of the payments made by the Authority pursuant to
Clause 6.11.6A.1 in any Contract Year exceeds the Authoritys reasonable
estimate of the total Efficiency Gain Fee payable in respect of such Contract
Year, the Authority shall be entitled to make no further payments during such
Contract Year pursuant to Clause 6.11.6A.1 and may during the remaining period
of such Contract Year deduct the amount by which the total of the payments so
made exceeds the Authoritys reasonable estimate as aforesaid from any amounts
of provisionally awarded Incentive Fee which would but for this provision
remain to be paid pursuant to Clause 6.11.6A.1.  6.11.7Contractors
Fee Account  Any interest accruing on amounts in the Contractors
Fee Account shall be for the account of the Contractor.  6.11.8Payments
to Parent  6.11.8.1Within fourteen (14) Calendar Days of the Authoritys determination
pursuant to Clause 6.2 (Determination of Funding Limits and Compliance with
Funding Limits) and the final determination of Incentive Fee undertaken
pursuant to Paragraph 3.11 (Final Determination of, and Adjustment to,
Incentive Fee) of Part 2 of the Finance Schedule (Use of Performance Based
Incentives), taking account of the Annual Reconciliation Reports, the Authority
will calculate the Year End Sum which shall be an amount equal to the Final Incentive
Fee minus:  6.11.8.1.1the
Total Provisional Incentive Fee paid by the Authority to the Contractor;  6.11.8.1.2an
amount in respect of any Disallowable Costs not otherwise reimbursed to the
Authority; and  6.11.8.1.3any
amount owing from the Parent Body Organisation to the Contractor or the
Authority pursuant to this Contract or the Parent Body Agreement.  113


6.11.8.2If the Year End Sum is a positive figure then the Authority shall pay
an amount equal to the Year End Sum into the Contractors Fee Account within
thirty (30) Calendar Days of the Authoritys calculation of the Year End Sum.
If the Year End Sum is a negative figure then the Authority shall serve a
Demand on the Parent Body Organisation requiring that the Parent Body
Organisation pays an amount equal to the Year End Sum to the Authority within
thirty (30) Calendar Days of receipt of such Demand.  6.11.8.3If the Year End Sum is a positive figure then the Contractor shall
issue a VAT invoice to the Authority for the sum as defined in 6.11.8.2 plus
VAT.  6.11.8.4Upon expiry or termination of this Contract, if the final form Annual
Reconciliation Report has been referred to the Dispute Resolution procedure,
the Authority shall calculate the Year End Sum whether that be a positive or
negative sum and to the extent that such Year End Sum is undisputed then Clause
6.11.8.2 shall apply in respect of that undisputed amount.  Following agreement or determination of the
disputed amounts under the Annual Reconciliation Report, Clauses 6.11.8.1 and
6.11.8.2 shall apply as appropriate.  6.11.8.5The Authority hereby gives its consent to the Contractor paying such
amount of the provisionally awarded Incentive Fee and of the Year End Sum (if
the Year End Sum is a positive figure) to the Parent Body Organisation as the
Contractor thinks fit and proper.  6.11.9Currency
of Contract  All
amounts of money in this Contract are expressed in pounds sterling (£). If the
United Kingdom joins European Monetary Union any figure expressed in £ and sterling in this Contract shall be converted into
euro at the rate for conversion of sterling into euro established by the
Council of the European Union pursuant to the Treaty (including compliance with
rules relating to rounding in accordance with European Community
regulations) and any reference to a figure in £ or sterling shall mean
that figure adjusted into euro.  6.12Not used  6.13Funding Limits  6.13.1Expenditure and accruals shall attrite the Funding Limits in
accordance with the provisions of Part 4 of the Finance Schedule (Cost
Principles and Procedures).  6.13.2Within Fourteen (14)
Calendar Days of the end of each Month, the Contractor shall provide the
Authority with a report for each Site (in such a form and containing such
information as the Authority may reasonably require from time to time) setting
out each of the following in respect of the relevant previous Month:  6.13.2.1the funds paid out by the Contractor
from the OPG Payments Account in accordance with Clause 6.6.1 (Payments
Account) and recorded on the relevant site ledger;  114


6.13.2.2
  the amounts received by the
  Contractor of Category I Revenue, Category II Revenue or otherwise (including
  any amounts released as revenue form the Customer Ringfenced Accounts);6.13.2.3
  the amounts expended by the
  Contractor in the proper performance of its obligations under this Contract
  in respect of Allowable Costs;6.13.2.4
  a reconciliation between the
  drawdowns authorised on behalf of the Authority and the sums drawn down by
  the Contractor;6.13.2.5
  not used;6.13.2.6
  the amounts drawn down from the
  Customer Ringfenced Accounts; and6.13.2.7
  any movements into and out of the
  Foreign Exchange Accounts, and  with all relevant supporting
documents and any other applicable information (and in such a form) as the
Authority may reasonably require from time to time (each such reporting being aMonthly Reconciliation
Report),  and within sixty (60) Calendar Days
of the end of each Contract Year (or if, at the end of the Contract Year, the
Authority exercises its Call Option and shares are transferred pursuant tothe provisions of the Parent Body
Agreement), the Contractor shall provide the Authority with a report for each
Site in the same form as the Monthly Reconciliation Report or as otherwise
reasonably required by the Authority in respect of that previous Contract Year
(theAnnual Reconciliation
Report).  6.14Reports  6.14.1The
Contractor shall prepare and submit to the Authority periodic reports for each
Site (including the Annual Reconciliation Reports) showing the amounts of
expenditure expended and/or accrued against each Funding Limit in accordance
with Clause 4.1 (Reporting and Reviewing).  6.14.2Following
the end of each Contract Year and within ninety (90) Calendar Days of its
receipt of the Contractors Annual Reconciliation Reports, the Authority shall
notify the Contractor that it either agrees the Annual Reconciliation Reports
or that it requires the Contractor to amend and re-submit them (indicating
those reports and sections therein which it requires to be amended). Within
thirty (30) Calendar Days of such notification from the Authority, the
Contractor shall either submit revised Annual Reconciliation Reports
incorporating all amendments required by the Authority (and the Authority shall
notify the Contractor of its agreement to the revised Annual Reconciliation
Reports within a further thirty (30) Calendar Day period) or notify the
Authority that it does not accept any one or more of the amendments requested
by the Authority (identifying the relevant amendments). In the event that the
Contractor does not accept any or all of the Authoritys requested amendments,
the Parties shall consult each other with a view to agreeing revised Annual
Reconciliation Reports but if they cannot agree the final form Annual
Reconciliation Reports within fourteen (14) Calendar Days of first notification
by the Contractor to the Authority that it does not accept all of the Authoritys
amendments, the matter shall he resolved, and the final form Annual
Reconciliation Reports determined, in accordance with the Dispute Management
Schedule.  6.14.3The amount
of expenditure and accruals reported against each Funding Limit shall be
reduced by the amount of Category II Revenue reported  115


against the relevant Funding
Limit. The Contractor shall report Category II Revenue.  6.14.4Within
fourteen (14) Calendar Days of the agreement or determination of the Agreed
Reconciliation Reports pursuant to Clause 6.14.2 above, the Authority shall
determine whether or not the Contractor has complied with Clause 6.13.1
(Funding Limits) and, if the Contractor has not complied with Clause 6.13.1
(Funding Limits), the Authority will serve a Demand on the Contractor in
respect of sums paid by the Authority as Allowable Costs which pursuant the
procedures in this clause 6.14 are agreed or determined to be Disallowable Costs.  6.14.5The Contractor shall provide any
information reasonably requested by the Authority that enables the Authority to
comply with its State Aid reporting obligations to the Department of Trade and
Industry.  6.15Costs Transparency and Auditing  6.15.1At any time the Authority or the Authoritys Agents may
choose to exercise the rights set out in Clause 4.5 (Inspection and Audit) to
audit the Contractors determination of Costs as Allowable Costs or
Disallowable, or the reconciliation between payments made and accruals.  6.15.2The Contractor shall adopt a
system of cost transparency and open book accounting which provides for the
cost components, cost levels and cost build up and calculation for each and
every item of cost that is used on the formulation of the rate, prices and sums
under this Contract, including those relating to Subcontracts, which relate to
the Contractors performance of its obligations under this Contract to be
calculated and made available to the Authority. The Contractor shall, at the
request of the Authority, make such of its records available to the Authority
as are necessary for the Authority to verify that a system of cost transparency
has and is being adopted. The Contractor shall ensure that its Subcontractors
also comply with such cost transparency and reporting provisions by including
such provisions in its Subcontracts. The Authority shall have the right to
access to the build up and calculations for each and every item of cost that is
used in the formulation of the rates, prices and sums under this Contract. The
Authority shall have the right to audit the Contractors Subcontractors and
Affiliates on the same basis.  6.16Reconciliation for Mid-Year Termination  6.16.1If the last day of the final Contract Year is any day other
than 31 March (or if the Authority exercises its Call Option under the
provisions of the Parent Body Agreement) ,the Authority shall require the
Contractor to produce an Annual Reconciliation Report (subject to any
modifications necessary to deal with mid-year termination, where relevant)
showing the information listed in Clauses 6.13.2.1 to 6.13.2.7 above for the
Contract Year up to the date of termination, within sixty (60) Calendar Days of
such date of termination.  6.16.2The Contractor shall propose an equitable apportionment of
the ASFL for the then current Contract Year for each Site based on progress as
against the costs, scope and schedule in the then current Contract Year of the
LTP for each Site in accordance with Paragraph 6 (Accounting Basis) of Part 4
of the Finance Schedule (Costs Principles and Procedures). If the Parties fail
to agree on such apportionments proposed by the Contractor, the matter shall be
resolved and determined in accordance with the Dispute management Schedule.  116


6.16.3The Contractor and the Authority shall comply with the
provisions of Clauses 6.14.2, 6.14.3 and 6.14.4 above.  6.16.4Within fourteen (14) Calendar Days of agreement or
determination of the Annual Reconciliation Reports the Authority shall, acting
reasonably, determine the amount of Incentive Fee for each Site to which the
Contractor is entitled, taking account of the profile of the PBIs in the
context of mid-year termination of the Contract and of the Annual
Reconciliation Report agreed or determined pursuant to Clause 6.16.3 above and
in accordance with Part 2 of the Finance Schedule (Use of Performance
Based Incentives).  6.16.5Within fourteen (14) Calendar Days of the agreement or
determination of the Incentive Fee to which the Contractor is entitled the
Authority shall calculate the Year End Sum in accordance with Clause 6.11.8
(Payments to Parent) above. If the Year End Sum is a positive figure then the
Authority shall pay an amount equal to the Year End Sum into the Contractors
Fee Account within thirty (30) Calendar Days of the Authoritys calculation of
the Year End Sum. If the Year End Sum is a negative figure then the Authority
shall serve a Demand on the Parent Body Organisation requiring that the Parent
Body Organisation pays an amount equal to the Year End Sum to the Authority
within thirty (30) Calendar Days of receipt of such Demand.  6.16.6Notwithstanding the termination of this Contract, the
Authority hereby gives its consent to the Contractor paying the Year End Sum
(if a positive figure) to the Parent Body Organisation unless for the
Contractor to do so would be contrary to Law.  6.17DIRECT AND INDIRECT TAXATION  6.17.1Tax general  6.17.1.1The Contractor agrees to take all reasonable actions
to meet its Taxation compliance obligations, and in particular to assist in the
reduction or elimination of any irrecoverable Taxation.  6.17.2 Corporation Tax  The Contractor:  6.17.2.1agrees to
prepare and submit to HMRC corporation tax computations on the basis of the
principles agreed between HMRCand the
Authority in the Code of Practice 10 Submission (theCOP 10);  6.17.2.2undertakes not to seek agreement
from HMRC to a treatment of any item in the corporation tax computations which
is inconsistent with the COP 10, unless the Authority expressly consents in
writing.  6.17.2.3shall
produce a tax pack in respect of the accounting records maintained by the SLC
on behalf of the Authority in the form and to the frequency and timescales reasonably
required by the Authority and respond to any queries on a timely basis such
that the Authority is able to meet its taxation obligations  117


6.17.3 VAT  6.17.3.1The Contractor
agrees to charge VAT, issue VAT invoices and comply with VAT compliance
obligations on the basis of the VAT Agreement and in particular:  6.17.3.1.1agrees to register and maintain registration for the purposes ofthe VATA;  6.17.3.1.2agrees properly
to charge VAT and issue VAT invoices in respect of supplies made to Third Party
customers;  6.17.3.1.3agrees properly
to charge VAT and issue VAT invoices in respect of the reimbursement of
Allowable Costs by the Authority;  6.17.3.1.4agrees properly
to charge VAT and issue VAT invoices and credit notes as appropriate in respect
of the Incentive Fee;  6.17.3.1.5agrees properly
to prepare and submit VAT returns on a timely basis to HM Customs and Excise
and to seek recovery as far as possible of VAT incurred in respect of goods and
services supplied to the Contractor; and  6.17.3.1.6agrees not to
act in any way inconsistently with the principles set out in this Contract.  6.17.3.2The Authority
shall charge VAT in respect of the fee for the Property Licence for the Sites
and the fee forthe licence of
the Authority IP to the Contractor, and shall properly issue VAT invoices in
respect thereof.  6.17.3.3The Authority warrants that it
has elected to waive exemption from VAT in accordance with the provisions of
Paragraph 2 of Schedule 10 to VATA in respect of the Sites.  6.17.4Withholding Taxes  6.17.4.1Any payment made by the Authority or the Contractor under, or pursuant to
the terms of, this Contract shall be made free and clear of all taxation
whatsoever save only for any deductions or withholdings required by applicable Law.  6.17.4.2The Authority warrants that it is
a company resident in the United Kingdom for the purposes of Part 15 of
the Income Tax Act 2007.  6.17.4.3The Contractor warrants that it
is a company resident in the United Kingdom for the purposes of Part 15 of
the Income Tax Act 2007.  6.17.4.4Where the Contractor is or will
be required to account under this Contract to the Authority in respect of any
receipt from a Third Party, and such receipt is or may be subject to deductions
or withholdings in respect of Taxation, the Contractor is required to take
reasonable action necessary to  118


obtain the payment without such deduction or
withholding, or to recover all or part of the deduction or withholding.  6.17.5Employee Taxes  The Contractor undertakes properly
to make all National Insurance Contributions and sums payable toHMRCunder the PAYE system in respect of emoluments and benefits paid or
payable, and to make all deductions and retentions as should be made in
accordance with the applicable Law.  6.17.6Tax Returns  The Contractor agreesthat the Authority may, at the
Authoritys request, review tax returns and tax correspondence prior to their
submission to the relevant tax Authority and that the Contractor will take into
account the Authoritys reasonable comments provided that the timing of the
provision of such comments takes into account any deadline for the relevant
submission of which the Authority is aware and provided that the tax return or
tax correspondence relates to a matter for which the Authority has financial
responsibility.  6.17.7Construction
Industry Scheme Regulations  6.17.7.1For
the purposes of this Clause 6.17.7, CIS means the scheme prescribed by
Chapter IV of Part XIII of the Income and Corporation Taxes Act 1988
and/or the scheme prescribed by Chapter 3 of Part 3 of the Finance
Act 2004, in either case to the extent that such scheme is in force.  6.17.7.2The
Contractor shall comply with the obligations imposed on it by the CIS and the
obligation of the Authority to make any payment under this Contract is subject
to the provisions of the CIS.  119


PART 6A : FINANCE (Post-Sale)  6A.1Funding Limits  The
Contractor must fulfil its obligation to perform the Tasks and its other
obligations under this Contract within the SLC Annual Funding Limit, Current
Budget, Capital Budget and PSWBS Category Levels (in each case as amended in
accordance with Part 2 (Setting the LTP and Change Control) of the
Programme Management Schedule if applicable) set by the Authority for each
Contract Year as specified in Part 1 of the Finance Schedule (Funding
Limits and Available Incentive Fee).  6A.2.Determination of Funding Limits and
Compliance with Funding Limits  6A.2.1Prior to
each Contract Year, the Authority shall determine and notify the Contractor of
the SLC Annual Funding Limit and Annual Site Funding Limits, the Current Budget
and the Capital Budget for that Contract Year in accordance with Part 2 of
the Programme Management Schedule (Setting the LTP and Change Control).  6A.2.2Subject to
Clause 6A.2.3 below, if the Contractor breaches the SLC Annual Funding Limit
and/or Current Budget without the express written consent of the Authority
obtained pursuant to Clause 2.6 (Setting the LTP and Change Control), the costs
incurred in excess of such SLC Annual Funding Limit and/or Current Budget, as
applicable, shall be Disallowable Costs.  6A.2.3To the
extent that the Contractors breach of the SLC Annual Funding Limit and/or
Current Budget arises as a direct result of an event listed at Paragraph 11 of Part 2
(Changes that the Authority Cannot Refuse) of the Programme Management Schedule
(Setting the LTP and Change Control) then the costs incurred in excess of such
SLC Annual Funding Limit and/or Current Budget shall not be Disallowable Costs  6A.3Restrictions on Payment to Parent Body
Organisation  Subject to
Clauses 6A.12.6 (Payments to Parent), the Contractor shall not without the
prior written consent of the Authority make any payment to the Parent Body
Organisation  6A.4Other Financial Restrictions  6A.4.1The
Contractor shall not without the prior written consent of the Authority:  6A.4.1.1dispose, let or otherwise part with the possession of the
whole of or any part of the Sites, business, undertaking or asset including any
asset subject to a finance or operating lease;  6A.4.1.2make any change to its accounting reference date;  6A.4.1.3make any change to the Accounting Policies and Procedures
save as required by applicable Law, UK generally accepted accounting principles
or HM Treasurys Government Reporting Requirements;  6A.4.1.4create or permit to subsist any Security Interest over any
Authority Assets or give any guarantee or indemnity to or for the benefit of
any person or otherwise assume liability or become obliged (actually or
contingently) in respect of any obligation of any other person, in each case
other than as permitted by this Contract save that nothing in this Clause
6A.4.1.4 is intended to prevent the creation of any liens in the course of
performance of this Contract;  120


6A.4.1.5save for borrowings under an Approved Working Capital
Facility, borrow (including intra-group) or make any payment under any
intra-group borrowings;  6A.4.1.6create or acquire any subsidiary or dispose of any
shareholding in a subsidiary or make or have any investment in any other
entity, except for the deposit of cash in the Contractors Fee Account, or the
Contractors Payment Account ;  6A.4.1.7commence any litigation or arbitration other than:  6A.4.1.7.1in accordance with Clause 7.6 (Necessary Consents), Part 8
(Intellectual Property) or Clause 1.25 (Claims Handling);  6A.4.1.7.2in accordance with the Dispute Resolution Procedure;  6A.4.1.7.3in any attempt to commence judicial review proceedings against the
Authority in connection with this Contract;  6A.4.1.7.4to challenge any threatened or actual revocation of the Nuclear Site
Licence or any other regulatory permit or consent which is essential to the
Contractors ability to operate any Site or carry out the Commercial Operations
Tasks in accordance with Law; or  6A.4.1.7.5to apply for or resist or join into an injunction which the Contractor,
acting reasonably, considers urgent and necessary to the Contractors
performance of its obligations to the Authority;  6A.4.1.8incur any liability or financial indebtedness except
pursuant to an Approved Working Capital Facility or as permitted by this
Contract;  6A.4.1.9make any loan or grant any credit, or have or permit to
subsist any loan or any credit, to any person (other than the deposit of cash with
a financial institution or Office of the Paymaster General as permitted by this
Contract);  6A.4.1.10enter into any finance or operating leases;  6A.4.1.11notwithstanding the Permitted Activities, enter into any
Customer Contract or Subcontract where a disproportionate element of liability,
cost or benefit is likely to crystallise after the expiry of this Contract; and  6A.4.1.12make payment of any management or other charges to the
Parent Body Organisation or to any of its Affiliates:  6A.4.1.12.1in excess of those set out in Subcontracts specifically approved by the
Authority pursuant to Clause 2.7 (Subcontracting/Procurement);  6A.4.1.12.2unless under an Existing Agreement which is not a Recent Existing
Agreement;  6A.4.1.12.3unless in respect of a Recent Existing Agreement which is awaiting the
Authoritys review pursuant to Clause 2.10 (Assumption of Existing Agreements);  121


6A.4.1.12.4in excess of those set out in Recent Existing Agreements approved or
amended by the Authority pursuant to Clause 2.10 (Assumption of Existing
Agreements);  6A.4.1.12.5unless pursuant to Clauses 6A.12.6 (Payments to Parent); or  6A.4.1.12.6unless as agreed under an Advance Agreement;  6A.4.1.13undertake hedging activities (except in accordance with the
Currency Hedging Strategy).  6A.4.2For the
purposes of Clause 6A.4 (Other Financial Restrictions), other than where the
Authority has expressly given or withheld its consent in writing, the
Contractor shall be deemed to have the prior written consent of the Authority
to carry out any of the activities in Clauses 6A.4.1.1 to 6A.4.1.13 (Other
Financial Restrictions) to the extent the relevant activity is expressly:  6A.4.2.1set out in the then current Contract Year of the LTP;  6A.4.2.2contained in a Subcontract or Customer Contract which is
specifically approved by the Authority. For the avoidance of doubt and
notwithstanding any other provision of this Contract, any Subcontract or
Customer Contract which enables the Contractor to do any of the matters set out
in Clause 6A.4 (Other Financial Restrictions) requires the approval of the
Authority notwithstanding the Permitted Activities;  6A.4.2.3contained in an Internal Procedure reviewed by the Authority
and accepted or deemed to have been accepted by the Authority in accordance
with Clause 2.8  (Contractors Internal
Procedure);  6A.4.2.4save in the case of Clause 6A.4.1.11, a Permitted Activity
or otherwise approved by the Authority in accordance with Clause 3.6A.2
(Authoritys right to be consulted in respect of Customer Contracts); or  6A.4.2.5in the case of Clause 6A.4.2.1, permitted by Clause
6A.4.1.12.5.  6A.5Historical Costs  6A.5.1Without
prejudice to Clause 6A.5.4, the Contractor shall determine whether any cost,
claim or liability which relates to the period prior to 1 April 2005 falls
within the definition of a BNF Historical Cost or a Contractor Historical Cost
or a BNF Historical Trading Cost or a Contractor Historical Trading Cost, in
accordance with the provisions of the Overarching Costs Management Agreement.  6A.5.2The
Contractor shall mitigate, to the extent reasonably possible, all Contractor
Historical Costs and, subject to Clause 6A.7 in respect of Exceptional Costs,
meet such Contractor Historical Costs subject, where relevant, to the
provisions of Clause 1.25 (Claims Handling).  6A.5.3Where the
Contractor, in error, has paid a BNF Historical Cost or a BNF Historical
Trading Cost the Contractor shall reclaim such BNF Historical Cost or a BNF
Historical Trading Cost from the relevant BNF Company in accordance with the
terms of the Overarching Costs Management Agreement. The Contractor shall pay
any amounts reclaimed pursuant to this Clause 6A.5.3 to the Authority as
Category I Revenue.  122


6A.5.4The
treatment of pension deficit contributions in relation to the Applicable
Schemes shall not be dealt with under this Clause 6A.5 (Historical Costs). Such
deficit contributions shall be made in accordance with the Schedule of
Contributions for the relevant Applicable Scheme prepared under section 58
Pensions Act 1995 or section 227 Pensions Act 2004 together with any other
obligations as to funding imposed by the documents governing the Applicable
Schemes.  6A.6Cashflow  6A.6.1Costs and
Capital  6A.6.1.1Working Capital  6A.6.1.1.1The Contractor shall be responsible for ensuring that it has sufficient
working capital to enable it to meet its obligations under the Contract.  6A.6.1.1.2The Contractor shall make payments to creditors as they Fall Due and in
accordance with the Government Payment Obligations (save as otherwise agreed by
the Authority in writing) but excluding any costs properly to be met from a
Customer Ringfenced Account  6A.6.1.1.3Unless the Authority approves otherwise in writing, the working capital
required under Clause 6A.6.1.1.1 shall be provided by the Contractor entering
into one or more Approved Working Capital Facilities.  6A.6.1.1.4All drawings under an Approved Working Capital Facility shall be
transferred only into the Contractors Payment Account.  The Contractor shall pay creditors out of the
Contractors Payments Account including, without limitation, Working Capital
Costs.  6A.6.2Cashflow
Forecasting  6A.6.2.1The Contractor shall submit to the Authority a cashflow
forecast in a form and at a frequency to be determined by the Authority, acting
reasonably, and notified to the Contractor from time to time.  6A.6.2.2The timeliness and accuracy of the cashflow forecast as
determined in accordance with Clause 6A.6.2.1. as compared with the Monthly
Invoice and the Contractors requests for payment under Clause 6A.7 as well as
the Contractors adherence to the Authoritys reasonable requirements from time
to time (which the Authority shall notify to the Contractor) shall be a
criterion under which 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) but declaring that in any
Contract Year the amount by which the Authority shall be entitled to reduce the
Incentive Fee on the basis of such criterion shall be limited to the sum being
50% of the Total Incentive Fee payable to the Contractor in respect of such
Contract Year for the Sixth Site.  123


6A.7Exceptional Costs  6A.7.1Subject to
the Contractor complying with the provisions of Clauses 6A.7.2 and 6A.7.3 the
Authority acknowledges that it is responsible for providing the funds to the
Contractor to enable it to pay creditors in so far as the relevant obligations
to make payments to those creditors are in respect of Exceptional Costs
including Exceptional Historical Costs and Exceptional Pension Costs.  The provision of such funds is to be made in
accordance with Clause 6A.7.2.1 in respect of Exceptional Costs other than
Exceptional Historical Costs and Exceptional Pension Costs, Clause 6A.7.2.2 in
respect of Exceptional Historical Costs and Clause 6A.7.3 in respect of
Exceptional Pension Costs.  6A.7.2.Information  6A.7.2.1If the Contractor becomes aware that it will incur an
Exceptional Cost , it shall seek the Authoritys prior written consent to the
incurrence of such a Cost (an Exceptional Cost Agreement).  The Contractor shall not incur any
Exceptional Cost without obtaining the Authoritys prior written consent under
an Exceptional Cost Agreement.  For the
avoidance of doubt, the Authority will make payment in relation to an
Exceptional Cost only where the Authoritys consent to the incurrence of such
Exceptional Cost has been obtained pursuant to an Exceptional Cost
Agreement.  In relation to any
Exceptional Cost for which it seeks funding, the Contractor shall provide to
the Authority a VAT invoice or cost statement as appropriate with all relevant
supporting documents and any other applicable information in such a form as the
Authority may reasonably require from time to time (such information being Exceptional
Costs Information). Following receipt of the Exceptional Cost Information, and
subject to clause 6A.7.4 below, the Authority will in respect of any
Exceptional Cost not being an Exceptional Historical Cost or an Exceptional
Pension Cost make payment thereof by electronic transfer of funds to the
Contractors Payment Account no later than the date specified in the notice
issued by the Authority pursuant to Part 6 of the Finance Schedule(Cashflow Forecasting and
Calculating Dates for Payment) as being
the date by which such funds are to be credited to said Contractors Payment
Account.  6A.7.2.2In relation to any Exceptional Historical Cost for which it
seeks funding, the Contractor shall provide to the Authority in such form as
the Authority may reasonably require from time to time, as soon as it becomes
aware of the liability, a VAT invoice with all relevant supporting documents
and any other applicable information including the due date for payment to the
supplier of the Exceptional Historical Cost and the date on which the Authority
will need to have transferred funds into the Contractors Payment Account in
order for the amount in respect of that Exceptional Historical Cost to be paid
to the supplier (such information being Exceptional Historical Costs
Information). Following receipt of the Exceptional Historical Costs
Information, and subject to Clause 6A.7.4 below, the Authority will, at least
the Working Day before the due date for payment of the Exceptional Historical
Cost to the supplier, make payment in respect of the relevant Exceptional
Historical Cost to the Contractor by electronic transfer of funds to the
Contractors Payments Account.  6A.7.3In
relation to any Exceptional Pension Costs for which it seeks funding, the
Contractor will provide to the Authority either :  124


6A.7.3.1details of the amount which the Contractor (or any
subsidiary of the Contractor) will be liable to pay under the schedule of
contributions (prepared under section 227 of the Pensions Act 2004) or under
the governing documents of the scheme; or  6A.7.3.2a demand for payment made in accordance with the Scheme
Document of the CNPP or, in respect of Applicable Schemes other than the CNPP,
the governing documents governing the Applicable Scheme,  as appropriate (and in such form
as the Authority may reasonably require from time to time such information
being Exceptional Pension Costs Information). 
As soon as the Contractor becomes aware of the Exceptional Pensions Cost
Information, and in any event no later than 8 (eight) Working Days before the
due date for payment by the Contractor, the Contractor will submit such
Exception Pensions Cost Information to the Authority.  Following receipt of the Exceptional Pension
Costs Information and subject to clause 6A.7.4 below, the Authority will, at
least the Working Day before the due date for payment of the Exceptional
Pension Costs by the Contractor, make payment in respect of the relevant
Exceptional Pension Costs to the Contractor by electronic transfer of funds to
the Contractors Payments Account.  The
Contractor shall immediately on receipt of the funds referred to herein remit
the same to the relevant pension fund.  6A.7.4The due
date for payment of a sum otherwise due under Clause 6A.7.2 or Clause 6A.7.3
(as applicable) shall be delayed to the date hereinafter specified where the
Authority acting reasonably has sought further information from the Contractor
(in addition to Exceptional Costs Information or Exceptional Historical Costs
Information or Exceptional Pension Costs Information) which is necessary to
enable the Authority to satisfy itself that the Cost in relation to which the
Contractor is seeking funds has been properly incurred and/or is an Exceptional
Cost.  In such circumstances, the due date
for payment of the amount in respect of which clarification has been sought as
aforesaid shall be the date falling five (5) Working Days after the
Authority receives to its reasonable satisfaction the information sought under
this Clause 6A.7.4 where such date is later than the date at which the
Exceptional Costs, the Exceptional Historical Costs or the Exceptional Pension
Costs would be due pursuant to Clause 6A.7.2 or 6A.7.3. Any dispute in relation
to the repayment of amounts by the Authority pursuant to this Clause 6A.7.4
will be resolved in accordance with Part 13 (Dispute Management).  6A.7.5Following
its receipt of funds into the Contractors Payments Account from the Authority
pursuant to Clause 6A.7.4, the Contractor shall make payments in respect of
Exceptional Costs to creditors as soon as practicable and otherwise in
accordance with the Government Payment Obligations (save as otherwise agreed by
the Authority in writing).  6A.7ATrading Costs  The Contractor shall record on the relevant
Site Trading Ledger all costs to be treated as Trading Costs. The Contractor
shall be entitled to be reimbursed all Trading Costs correctly recorded on the
relevant Site Trading Ledger as Exceptional Costs to the extent that funds to
meet such costs have not been drawndown prior to the Sale Date. Provided that,
for the purposes of clause 6A.7 above, the Authority shall be deemed to have
consented to the incurrence of any Trading Costs.  125


6A.8Customer Ringfenced Accounts  6A.8.1The
Contractor is entitled to draw down funds from Customer Ringfenced Accounts in
accordance with the legally binding provisions and/or documented understandings
with the relevant customer(s) (where inconsistent with legally binding
provisions the legally binding provisions shall prevail) governing withdrawal
from such Customer Ringfenced Accounts to meet such costs as it is entitled to
meet from Customer Ringfenced Accounts.  6A.8.2For the
avoidance of doubt, funds in Customer Ringfenced Accounts shall not constitute
Category I Revenue or Category II Revenue unless or until released from such
Customer Ringfenced Accounts as revenue in accordance with the terms governing
the operation of such accounts.  6A.9Determination of Revenue Category  6A.9.1Subject to
Clause 6A.9.4, in each Contract Year during the setting of the LTP for the next
Contract Year pursuant to Paragraph 7(NTWP and LTP)of Part 2 of the Programme Management Schedule (Setting the LTP and
Change Control), the Authority shall in respect of any Site or Sites be
entitled, acting reasonably and in consultation with the Contractor, to:  6A.9.1.1amend the definition of Category II Revenue so that revenue
which would otherwise have fallen into the definition of Category I Revenue
falls into the definition of Category II Revenue for all succeeding Contract
Years; and/or  6A.9.1.2amend categories of revenue within or delete categories of
revenue from the definition of Category I Revenue and/or Category II Revenue
for all succeeding Contract Years.  6A.9.2If the
amount of Category II Revenue received by the Contractor to date in the current
Contract Year exceeds the amount forecast by the Contractor in the LTP as
receivable for that Contract Year in respect of any Site as set out in Finance
Schedule Part 1 (Funding Limits and Available Incentive Fee), the
Authority shall be entitled in respect of such Site at any time thereafter in
the current Contract Year, acting reasonably, to treat the excess revenue
falling within the definition of Category II Revenue for such Site as revenue
falling into the definition of Category I Revenue for any Site.  6A.9.3Prior to
setting the Funding Limits for the next Contract Year in accordance with
Paragraph 7(NTWP
and LTP)of Part 2 of the Programme
Management Schedule (Setting the LTP and Change Control), the Authority shall
(acting reasonably and in consultation with the Contractor) be entitled at any
time to add new categories of revenue to the definition of Category I Revenue
and/or Category II Revenue to the extent that such categories of revenue are
not already accounted for as Category I Revenue or Category II Revenue in the
current Contract Years LTP.  6A.9.4The
assumption is that monies received or receivable by the Contractor shall predominantly
be treated as Category I Revenue. Any dispute as to whether monies received or
receivable by the Contractor are to be treated as Category I Revenue or
Category II Revenue shall be determined by the Authority acting reasonably.  6A.9ASurplus ESTL Funds  6A.9A.1Without prejudice to clause 6A.11.4 below, if the Authority,
acting reasonably, considers that the balance of funds on ESTLs Capital
Adequacy Account is surplus to ESTLs Capital Adequacy Requirements, or if
amounts on deposit pursuant to any of the Cash Credit Support  126


Agreements is in excess of any restrictions imposed by the Authority
pursuant to Clause 3.6 and/or set out in the Permitted Activities and the
Trading Limits, then the Authority shall be entitled to require the Contractor
or ESTL (as applicable) to withdraw such surplus funds from the Capital
Adequacy Account or the relevant account in relation to the relevant Cash
Credit Support Agreement and pay such surplus funds to the Authority as
Category 1 Revenue within twenty-one (21) Calendar Days of the Contractors or
ESTLs (as applicable) withdrawal of such surplus funds.  6A.10Receipts Accounts  6A.10.1Unless specifically
instructed in writing by the Authority, the Contractor shall pay all Category I
Revenue and Category II Revenue into the Contractors Receipts Accounts on
receipt of such Revenue and shall transfer the entire balance of the Contractors
Receipts Account on a daily basis to the OPG Receipts Account.  6A.10.2If the Contractor becomes
aware that an amount so transferred to the OPG Receipts Account was paid into
the Contractors Receipts Account in error and so should not have been so
transferred, then the Contractor shall inform the Authority immediately of the
amount, the date of transfer and the reason for the error (an Overpayment
Notice).  The Contractor will use all
reasonable endeavours to make such claim within 15 days following the end of
the month in which a receipt has been transferred by the Contractor to the OPG
Receipts Account under Clause 6A.10.1 above. 
In the event that, exercising such reasonable endeavours, the Contractor
is unable to make such claim as aforesaid, the Contractor shall make such claim
as soon as reasonably practicable after the expiry of fifteen (15) days
following the end of the month in which a receipt has been transferred by the
Contractor to the OPG Receipts Account under Clause 6A.10.1 above.  The Contractor will provide along with the
Overpayment Notice or as soon as reasonably practicable following the Authoritys
receipt of an Overpayment Notice all relevant supporting documents and
information (and in such a form) as the Authority may reasonably require in
order to satisfy itself that the payment into the Contractors Receipts Account
was made in error. As soon as reasonably practicable following receipt of an
Overpayment Notice and receipt of such supporting documentation and information
as the Authority may reasonably require, the Authority shall repay the amounts
paid in error as aforesaid into the Contractors Receipt Account.  6A.10.3.If the Parties cannot agree whether an amount was paid into
the Contractors Receipts Account in error or if there is any disagreement
regarding the amount paid in error the matter shall be resolved in accordance
with Part 13 (Dispute Management).  6A.11Reimbursement  6A.11.1Basis of Reimbursement  6A.11.2Payment to the Contractor
shall, except and to the extent otherwise set out in the Finance Schedule or
otherwise agreed between the Parties, be on the basis of reimbursement of
Allowable Costs incurred together with any Fee and/or Incentive Fee due.  6A.11.3Allowable
and Disallowable Costs  6A.11.3.1The
Authority acknowledges that it is responsible for reimbursing the Contractor for
payments in respect of Allowable Costs the Contractor makes to creditors out of
the Contractors Payments  127


Account or which are Transitional Balances (but not
in the case of payments properly to be met from a Customer Ringfenced Account
or in respect of Exceptional Costs) insofar as the relevant obligations to make
such payments were incurred in the Contractors performance of its obligations
under this Contract. Such reimbursement is to be made on the basis provided in
Clause 6A.12 (Invoicing and Payment).  6A.11.3.2The
Contractor acknowledges that it is not entitled to be reimbursed by the
Authority under Clause 6A.11.3.1 in respect of payments to creditors which are
Disallowable Costs and that, to the extent that the Authority has paid or
reimbursed Disallowable Costs or Costs claimed as Allowable Costs in excess of
the Costs referred to in Clause 6A.11.3.1, the Authority is entitled to be
reimbursed by the Contractor.  6A.11.3.3The
Contractor must determine whether a payment in respect of a Cost is an
Allowable Cost or a Disallowable Cost in accordance with Part 4 of the
Finance Schedule (Costs Principles and Procedures).  6A.11.3.4The
Contractor shall be entitled to agree in advance with the Authority as to
whether certain Costs it proposes to incur are Allowable Costs by entering into
Advance Agreements with the Authority pursuant to the process set out in Part 4
of the Finance Schedule (Costs Principles and Procedures).  6A.11.3.5Should the Contractor become aware that it
has incorrectly determined an Allowable Cost as a Disallowable Cost and
accordingly wishes to claim such Cost as an Allowable Cost, it shall be
entitled to make such claim.  6A.11.3.6If the Parties cannot agree whether a particular Cost is an Allowable Cost
or a Disallowable Cost according to this Clause 6A.11.3 or Part 4 of the
Finance Schedule (Costs Principles and Procedures), the matter shall be
resolved in accordance with Part 13 (Dispute Management).  6A.11.4ESTL Funds  6A.11.4.1Without prejudice to clause 6A.9A above, the Authority shall
be entitled to require the Contractor or ESTL (as applicable) to withdraw the
balance of any funds held on ESTLs Capital Adequacy Account and recorded on
the relevant site ledger (as applicable) and not paid out to creditors or
required to meet the Capital Adequacy Requirements or required to fund deposits
to be made pursuant to any of the Cash Credit Support Agreements (subject to
any restrictions imposed by the Authority pursuant to Clause 3.6 and/or set out
in the Permitted Activities and the Trading Limits) from the Capital Adequacy
Account and pay such surplus funds to the Authority as Category 1 Revenue
within twenty-one (21) Calendar Days of the Contractors or ESTLs (as applicable)
withdrawal of such surplus funds.  6A.11.5Performance Based Incentive Arrangements  6A.11.5.1The
PBIs shall be prepared and determined, and the PBIs shall be calculated and
paid, in accordance with Part 2 (Use of Performance Based Incentives) of
the Finance Schedule.  128


6A.11.5.2The Contractor may propose, and the Authority
may require the Contractor to bring forward, changes to PBIs at any time during
the Contract Year in accordance with Part 2 of the Finance Schedule (Use
of Performance Based Incentives).  6A.11.6Incentive
Fee  6A.11.6.1The
Incentive Fee shall be calculated, in accordance with Part 2 (Use of
Performance Based Incentives) of the Finance Schedule.  6A.11.7Alternative
Basis of Remuneration  6A.11.7.1Should
the Parties agree to utilise an alternative basis of remuneration to
reimbursement of Allowable Costs and Incentive Fee they shall as appropriate
agree:  6A.11.7.1.1the basis of remuneration;
and  6A.11.7.1.2the
work or services to which it relates; and  6A.11.7.1.3the
terms and conditions upon which such work or services is to be performed; and  6A.11.7.1.4to
the extent the terms of this Contract are not applicable and/or to the extent
that any additional terms or conditions are required or require to be amended,
the deletions from and additions to and amendments of this Contract; and  6A.11.7.1.5the
relevant rates and prices, any profit, overhead and incentive arrangements; and  6A.11.7.1.6the
method of and basis for variation and adjustment  and the Parties
shall document the same in a written agreement to be attached as a supplemental
agreement to this Contract.  6A.11.7.2For
the avoidance of doubt any such supplemental agreement:  6A.11.7.2.1shall
apply only in respect of the work and services specified therein and shall have
no other effect upon the terms of this Contract; and  6A.11.7.2.2shall
contain provisions allocating responsibility for the Costs of additional works
needed as a consequence of the Contractors failure to comply with the
requirements of this Contract in accordance with Part 7 of the Finance
Schedule (Provisions Applying
to Defective Performance of Alternative Remuneration Tasks).  6A.12Invoicing and Payment  6A.12.1Invoicing of Allowable Costs and Other Costs  6A.12.1.1Not
later than the earlier of the twelfth (12th) Working Day or the
fifteenth (15th) Calendar Day of the Month immediately following the relevant
Month during which the Contractor incurs Allowable Costs for which it seeks
reimbursement in accordance with Clause 6A.11.3.1 and Exceptional Costs for
which it seeks payment the Contractor will issue a VAT invoice (theMonthly Invoice).  129


6A.12.1.2In
the event that any Monthly Invoice is received by the Authority after the
earlier of the twelfth (12th) Working Day or the
fifteenth (15th)
Calendar Day of the Month immediately following the relevant Month during which
the Contractor incurs Allowable Costs for which it seeks reimbursement in
accordance with Clause 6A.11.3.1 and Exceptional Costs for which it seeks
payment, such Monthly Invoice shall be deemed to have been received by the
Authority on the twelfth (12th) Working Day of the Month following receipt of
the same.  The dates for payment of the
Allowable Costs and Exceptional Costs stated in such Monthly Invoice shall be
amended to reflect the dates for payment which would have been stated therein
had the Allowable Costs and Exceptional Costs to which it relates been
reimbursed and due to be paid in the relevant Month immediately prior to the
date at which such Monthly Invoice is deemed to have been received by the
Authority. Notwithstanding the foregoing, the Authority shall use all reasonable
endeavours to make payment of all sums due consequent to such Monthly Invoice
as soon as reasonably practicable in order to minimise the Contractors
liabilities in respect of Working Capital Costs.  6A.12.1.3The
Monthly Invoice shall be prepared in accordance with Clause 6A.12.1.4 and shall
be accompanied by  6A.12.1.3.1a
description of the work and/or services to which it relates.  6A.12.1.3.2a
breakdown setting out in reasonable detail the Allowable Costs incurred and the
Exceptional Cost to be paid and an explanation of what they relate to;  6A.12.1.3.3adequate
documentation supporting the sums claimed, and  6A.12.1.3.4any
other information or documentation that the Authority may from time to time
require and notify to the Contractor.  6A.12.1.3.5details
of the due dates for payment of Exceptional Costs and Allowable Costs together
with the amount of such Exceptional Costs and Allowable Costs gross and net of
VAT all in accordance with Part 6 of the Finance Schedule (Cashflow
Forecasting and Calculating Dates for Payment); and  6A.12.1.3.6an
analysis of all amounts paid by the Authority against amounts due on the
invoice in accordance with Part 6 of the Finance Schedule (Cashflow
Forecasting and Calculating Dates for Payment)  6A.12.1.4The
Monthly Invoice shall be prepared on an accruals accounting basis in accordance
with UK GAAP (and not a cash accounting basis) save in respect of purchase of
stock as provided below.  Any Allowable
Costs will be shown exclusive of any VAT payable by the Contractor and the
Monthly Invoice shall calculate the VAT payable by the Authority to the
Contractor in respect of such Allowable Costs.  130


In respect of
purchases of stock by the Contractor, the Monthly Invoice shall be adjusted to
reflect the value (excluding VAT) of actual purchases during the relevant Month
(as compared with value of stock consumed in that Month).  Such stock shall be the property of the Authority
and the Monthly Invoice will treat its purchase by the Contractor on behalf of
the Authority as a taxable supply.  6A.12.1.5Subject
to Clause 6A.12.1.2 the Authority shall reimburse the Contractor in respect of
Allowable Costs as shown in each Monthly Invoice complying with Clauses 6A.12.1.3
and 6A.12.1.4 in accordance with the provisions of Part 6 of the Finance
Schedule (Cashflow Forecasting and Calculating Dates for Payment) to this
Contract.  Payment shall be
made by electronic transfer of funds into the Contractors Payments Account.  6A.12.1.6The
due date for payment of a sum otherwise due under Clause 6A.12.1.5 shall be
delayed to the date hereinafter specified where the Authority has sought
further information from the Contractor (in addition to that included or
accompanying any Monthly Invoice) to enable the Authority to satisfy itself
that the Cost in relation to which the Contractor is seeking reimbursement has
been properly incurred as an Allowable Cost,. 
In such circumstances, the due date for payment of the Allowable Cost in
respect of which clarification has been sought shall be the date falling five (5) Working
Days after the Authority receives, to its reasonable satisfaction, the
information sought under this Clause 6A.12.1.6 where such date is later than
the date at which such Allowable Cost would be due to be reimbursed by the
Authority pursuant to Clause 6A.12.1.5.  
Any dispute in relation to the reimbursement of amounts to the
Contractor pursuant to this Cluase 6A.12.1.6 will be resolved in
accordance with Part 13 (Dispute Management).  6A.12.1.7Where
the Contractor becomes aware that an amount in relation to which it is to seek
reimbursement under Clause 6A.12.1 (Invoicing of Allowable Costs and Other
Costs) and Clause 6A.7 (Exceptional Costs) exceeds the relevant amount
specified in the cashflow forecast submitted by the Contractor under Clause
6A.6.2 (Cashflow Forecasting) the Contractor will take immediate steps to
notify the Authority that the amount exceeds the relevant amount specified in
the cashflow forecast.  Upon receiving
the notice, the Authority will review its cash flow position with a view to
reimbursing the Contractor in accordance with Clauses 6A.12.1 and 6A.7. Where
reimbursement under Clauses 6A.12.1 and 6A.7 is not possible as a result of the
Authoritys cash flow position, the Authority will not reimburse the Contractor
in accordance with Clauses 6A.12.1 and 6A.7 in respect of the amount which
exceeds the relevant amount specified in the cashflow forecast. In this event,
the Contractor and the Authority will use their best endeavours to enable the
Authority to reimburse to the Contractor the amount which exceeds the relevant
amount specified in the cashflow forecast as soon as practicable after any
reimbursement would have been due under Clauses 6A.12.1 and 6A.7 but for that
amount  131


exceeding the
relevant amount specified in the cashflow forecast and the due and final dates
in respect of such amounts shall be delayed accordingly.  6A.12.2Transitional
Balances  6A.12.2.1The
Contractor shall deliver to the Authority by no later than the earlier of the
twelfth (12th) Working Day or the fifteenth (15th) Calendar Day following the
Sale Date a statement which specifies all Transitional Balances of which the
Contractor is aware (the Provisional Transitional Balance Statement) together
with a schedule specifying the dates which the Contractor proposes to be the
dates at which the Authority is to reimburse the Transitional Balances
specified in the Provisional Transitional Balance Statement (the Provisional
Payment Schedule) which Provisional Transitional Balance Statement and
Provisional Payment Schedule shall be in accordance with the requirements of Part 6
of the Finance Schedule (Cashflow Forecasting and Calculating Dates for
Payment).  6A.12.2.2The
Contractor shall notify the Authority as soon as it becomes reasonably apparent
that the date at which they shall become due to make payment of the sum
comprised in any Transitional Balance to their supplier will be after the
Transitional Balance Payment Date. In such circumstances the Transitional
Balance Payment Date shall be revised in accordance with Part 6 of the
Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment).  6A.12.2.3The Contractor
shall notify the Authority that it is seeking payment of any Transitional
Balance and shall within such notification identify the Transitional Balance
Payment Date for such Transitional Balance. Such notification shall be
accompanied by all records and information necessary to establish either;  6A.12.2.3.1that
the amount of the Transitional Balance stated in the Provisional Transitional
Balance Statement is an accurate valuation of the sum due to be reimbursed to
the Contractor in respect of the Allowable Cost to which the Transitional
Balance relates; or  6A.12.2.3.2where
the amount stated in the Provisional Transitional Balance Statement is not an
accurate valuation as detailed at Clause 6A.12.2.3.1, the sum which is the
proper amount due to be reimbursed to the Contractor in respect of the
Allowable Cost to which the Transitional Balance relates.  6A.12.2.4The
Authority shall make payment of any Transitional Balances properly due as
Allowable Cost at the later of the Transitional Balance Payment Date or the
date falling 10 Working Days after receipt by the Authority of the notification
and all records and information to be submitted by the Contractor pursuant to
Clause 6A.12.2.3  6A.12.2.5The
Contractor shall comply with the whole requirements of Part 6 of the
Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment).  132


6A.12.3Termination
Invoice  6A.12.3.1The
Contractor shall deliver to the Authority by no later than the twelfth (12th)
Working Day following the last day of the final Contract Year a VAT invoice
(the Provisional Termination Invoice) which specifies all Allowable Costs
incurred of which the Contractor is aware for which it would have sought
reimbursement in accordance with Clause 6A.12.1.1 but in respect of which it
has not delivered to the Authority a Monthly Invoice. The provisions of clause
6A.12.1.2 to 6A.12.1.6 will apply to the Provisional Termination Invoice as if
references therein to Monthly Invoice were references to Provisional
Termination Invoice.  6A.12.3.2The
Contractor shall deliver to the Authority by no later than the sixtieth (60th)
Working Day following the last day of the final Contract Year a VAT invoice
(the Final Termination Invoice) which specifies all Allowable Costs other
than Allowable Costs specified in the Provisional Termination Invoice for which
it would have sought reimbursement in accordance with clause 6A.12.1.1 but in
respect of which it has not delivered to the Authority a Monthly Invoice.  The provisions of clause 6A.12.1.2 to
6A.12.1.6 will apply to the Final Termination Invoice as if references therein
to Monthly Invoice were references to Final Termination Invoice.  6A.12.4Payment of Incentive Fee  6A.12.4.1Subject
to Clauses 6A.12.4.3, 6A.12.4.4, 6A.12.4.5 and 6A.12.4A.4 below, the Authority
will pay 5 (five) per cent of the Contractors Available Incentive Fee for the
relevant Contract Year on the last Working Day in each Month within that
Contract Year in respect of provisionally awarded Incentive Fee. The Contractor
will issue a VAT invoice for the net amount of the Incentive Fee plus VAT.  6A.12.4.2In
addition to any payments made by the Authority pursuant to Clause 6A.12.4.1
above, where any amount of Incentive Fee is awarded provisionally pursuant to
Paragraph 3.10 (Provisional Payment of Incentive Fee) of Part 2 of the
Finance Schedule (Use of Performance Based Incentives), the Contractor will
submit a VAT invoice to the Authority requesting payment of such amount into
the Contractors Fee Account and, subject to Clause 6A.12.4.3 below, the
Authority will make such payment.  6A.12.4.3Notwithstanding
Clauses 6A.12.4.1 and 6A.12.4.2 above, the Authority will not pay more than 60%
of the Available Incentive Fee to the Contractor in respect of provisionally
awarded Incentive Fee in any Contract Year.  6A.12.4.4The
Authority may during the seventh Month and during the tenth Month of each
Contract Year require the Contractor to provide such information as the Authority
may reasonably require in order to satisfy itself so far as reasonably
practicable at that stage of the Contract Year that the total of the payments
made by the Authority pursuant to Clause 6A.12.4.1 for the Contract Year will
not exceed the total of the Incentive Fee payable for such Contract Year.  In the event that the Authority  133


reasonably
believes on the basis of such information or otherwise that the total of the
payments made by the Authority pursuant to Clause 6A.12.4.1 for the Contract
Year will exceed the amount of the Authoritys reasonable estimate of the total
Incentive Fee which will be payable in respect of such Contract Year, the
Authority may decide to reduce its monthly payment pursuant to Clause 6A.12.4.1
so that the total of such payments for the Contract Year is equal to the amount
being the Authoritys reasonable estimate of the total Incentive Fee which
shall be payable in respect of such Contract Year.  6A.12.4.5In
the event that the Authority reasonably believes on the basis of the
information provided pursuant to Clause 6A.12.4.4 or otherwise that the total
of the payments made by the Authority pursuant to Clause 6A.12.4.1 in any
Contract Year exceeds the Authoritys reasonable estimate of the total
Incentive Fee payable in respect of such Contract Year, the Authority shall be
entitled to make no further payments during such Contract Year pursuant to
Clause 6A.12.4.1 and may during the remaining period of such Contract Year
deduct the amount by which the total of the payments so made exceeds the
Authoritys reasonable estimate as aforesaid from any amounts of Budgeted
Efficiency Gain Fee which would but for this provision remain to be paid
pursuant to clause 6A.12.4A.1.  6A.12.4A Payment of Budgeted Efficiency Gain Fee  6A.12.4A.1Subject
to Clause 6A.12.4A.3, 6A.12.4A.4 and 6A.12.4.5, the Authority will pay 5 (five)
per cent of the Budgeted Efficiency Gain Fee for the relevant Contract Year on
the last Working Day in each Month within that Contract Year on account of
Efficiency Gain Fee.  The Contractor will
issue a VAT invoice for the net amount of the Budgeted Efficiency Gain Fee plus
VAT.  6A.12.4A.2The
Authority will not pay more than 60% of the Budgeted Efficiency Gain Fee to the
Contractor on account of Efficiency Gain Fee in any Contract Year.  6A.12.4A.3The
Authority may during the seventh Month and during the tenth Month of each
Contract Year require the Contractor to provide such information as the
Authority may reasonably require in order to satisfy itself so far as
reasonably practicable at that stage of the Contract Year that the total of the
payments made by the Authority pursuant to Clause 6A.12.4A.1 for the Contract
Year will not exceed the total of the Efficiency Gain Fee payable for such
Contract Year.   In the event that the
Authority reasonably believes on the basis of such information or otherwise
that the total of the payments made by the Authority pursuant to clause
6A.12.4A.1 for the Contract Year will exceed 80% of the amount of the Authoritys
reasonable estimate of the total Efficiency Gain Fee which will be payable in
respect of such Contract Year, the Authority may decide to reduce its monthly
payments pursuant to Clause 6A.12.4A.1 so that the total of such payments
for the Contract Year is equal to the amount being 80% of the Authoritys
reasonable estimate of the total Efficiency Gain Fee which will be payable in
respect of such Contract Year.  134


6A.12.4A.4In
the event that the Authority reasonably believes on the basis of the
information provided pursuant to Clause 6A.12.4A.3 or otherwise that the total
of the payments made by the Authority pursuant to Clause 6A.12.4A.1 in any
Contract Year exceeds the Authoritys reasonable estimate of the total
Efficiency Gain Fee payable in respect of such Contract Year, the Authority
shall be entitled to make no further payments during such Contract Year
pursuant to Clause 6A.12.4A.1 and may during the remaining period of such
Contract Year deduct the amount by which the total of the payments so made
exceeds the Authoritys reasonable estimate as aforesaid from any amounts of
provisionally awarded Incentive Fee which would but for this provision remain
to be paid pursuant to Clause 6A.12.4.1.  6A.12.5Contractors
Fee Account  Any interest accruing on
amounts in the Contractors Fee Account shall be for the account of the
Contractor.  6A.12.6Payments
to Parent  6A.12.6.1Within
fourteen (14) Calendar Days of the Authoritys determination pursuant to Clause
6A.2 (Determination of Funding Limits and Compliance with Funding Limits) and
the final determination of Incentive Fee undertaken pursuant to Paragraph 3.11
(Final Determination of, and Adjustment to, Incentive Fee) of Part 2 of
the Finance Schedule (Use of Performance Based Incentives), taking account of
the Annual Reconciliation Reports, the Authority will calculate the Year End
Sum which shall be an amount equal to the Final Incentive Fee and the
Efficiency Gain Fee minus:  6A.12.6.1.1the
Total Provisional Incentive Fee paid by the Authority to the Contractor;  6A.12.6.1.1Athe
Budgeted Efficiency Gain Fee paid by the Authority to the Contractor;  6A.12.6.1.2an
amount in respect of any Disallowable Costs not otherwise reimbursed to the
Authority; and  6A.12.6.1.3any
amount owing from the Parent Body Organisation to the Contractor or the
Authority pursuant to this Contract or the Parent Body Agreement.  6A.12.6.2If
the Year End Sum is a positive figure then the Authority shall pay an amount
equal to the Year End Sum into the Contractors Fee Account within thirty (30)
Calendar Days of the Authoritys calculation of the Year End Sum. If the Year
End Sum is a negative figure then the Authority shall serve a Demand on the
Parent Body Organisation requiring that the Parent Body Organisation pays an
amount equal to the Year End Sum to the Authority within thirty (30) Calendar
Days of receipt of such Demand.  6A.12.6.3If
the Year End Sum is a positive figure then the Contractor shall issue a VAT
invoice to the Authority for the sum as defined in 6A.12.6.2 plus VAT.  135


6A.12.6.4Upon
expiry or termination of this Contract, if the final form Annual Reconciliation
Report has been referred to the Dispute Resolution Procedure, the Authority
shall calculate the Year End Sum whether that be a positive or negative sum and
to the extent that such Year End Sum is undisputed Clause 6A.12.6.2 shall apply
in respect of that undisputed amount. 
Following agreement or determination of the disputed amounts under the
Annual Reconciliation Report, Clauses 6A.12.6.1 and 6A.12.6.2 shall apply as
appropriate.  6A.12.6.5The
Authority hereby gives its consent to the Contractor paying such amount of the
provisionally awarded Incentive Fee, the Budgeted Efficiency Gain Fee and of
the Year End Sum (if the Year End Sum is a positive figure) to the Parent Body
Organisation as the Contractor thinks fit and proper.  6A.12.7Payment  6A.12.7.1Sums
payable to the Contractor shall become due from the Authority to the Contractor
on the date or dates specified in Clauses 6A.7.2.1, 6A.7.2.2 and 6A.7.3 (all as
modified by the operation of Clause 6A.7.4); Clauses 6A.12.1.5 (as modified by
the operation of clause 6A.12.1.6); Clause 6A.12.2.4   and on the dates of the invoices referred to
in Clauses 6A.12.4.1 and 6A.12.4A.1 and shall (subject to Clauses 6A.12.4.3) be
paid by the Authority to the Contractor by the date or dates specified or
calculated in accordance with in Clauses 6A.7.2.1, 6A.7.2.2 and 6A.7.3 (all as
modified by Clause 6A.7.4);  Clause
6A.12.1.5 (as modified by the operation of Clause 6A.12.1.6); Clause 6A.12.2.4
and the dates stated for payment in Clauses 6A.12.4.1 and 6A.12.4A.1 (the Final
Date for Payment).  6A.12.7.2Not
used  6A.12.7.3If
at any time the Authority fails to make any payment by the Final Date for
Payment then the Contractor shall so notify the Authority in writing and such
sum as remains unpaid shall bear interest at the Interest Rate from the date of
the Contractors notice referred to herein until the date the same is paid by
the Authority to the Contractor.  6A.12.7.4Without
prejudice to the Authoritys rights under Clauses 6A.7.4 and 6A.12.1.6 the
Authority shall be entitled to set off against any money otherwise due under
this Contract the amount of any claim for loss and/or expense which has
actually been incurred by the Authority by reason of any breach of or failure
to observe the provisions of this Contract by the Contractor provided always:  6A.12.7.4.1the
amount of the set off has been quantified in detail and with reasonable
accuracy by the Authority: and  6A.12.7.4.2the
Authority has given to the Contractor notice in writing (the Effective Notice)
specifying its intention to set off the amount quantified in accordance with
Clause 6A.12.7.4.1 and the grounds on which such set off is claimed to be
made.  Where there is more than one
ground the Authority shall state in the Effective Notice each of the grounds on
which the set off is claimed to be made and the  136


amounts
attributable to each of them.  The
Effective Notice shall be given not less than seven (7) days before the
money from which the amount is to be set off becomes due to the Contractor
provided that the Effective Notice shall not be binding insofar as the
Authority may amend it in preparing its pleadings for any Legal Proceedings.  6A.12.7.5The
rights of the Parties in respect of set off are fully set out herein and no
other rights whatsoever shall be implied as terms of this Contract relating to
set off.  6A.12.8Currency of Contract  All amounts of money in this Contract are expressed
in pounds sterling (£). If the United Kingdom joins European Monetary Union any
figure expressed in £ and sterling in this Contract shall be converted into euro at the rate for
conversion of sterling into euro established by the Council of the European
Union pursuant to the Treaty (including compliance with rules relating to
rounding in accordance with European Community regulations) and any reference
to a figure in £ or sterling shall mean that figure adjusted into euro.  6A.13Funding Limits  6A.13.1Expenditure and accruals shall
attrite the Funding Limits in accordance with the provisions of Part 4 of
the Finance Schedule (Cost Principles and Procedures).  6A.13.2Within Fourteen (14) Calendar Days of the end
of each Month, the Contractor shall provide the Authority with a report for
each Site (in such a form and containing such information as the Authority may
reasonably require from time to time) setting out each of the following in
respect of the relevant previous Month:  6A.13.2.1the
funds paid out by the Contractor from the Contractors Payments Account;  6A.13.2.2the
amounts received by the Contractor of Category I Revenue, Category II Revenue
or otherwise (including any amounts released as revenue form the Customer
Ringfenced Accounts);  6A.13.2.3the
amounts expended by the Contractor in the proper performance of its obligations
under this Contract in respect of Allowable Costs;  6A.13.2.4a
reconciliation between the Monthly Invoice sent to the Authority and cash
payments made by the Contractor;  6A.13.2.5any
payments made by the Authority pursuant to Clauses 6A.7.2 and 6A.7.3 to meet
Exceptional Costs ;  6A.13.2.6the
amounts drawn down from the Customer Ringfenced Accounts; and  6A.13.2.7any
movements into and out of the Foreign Exchange Accounts, and  6A.13.2.8an
analysis of the daily cash balances in the month against that forecast having
regard to the cashflow forecast agreed or determined pursuant to Part 6 of
the Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment).  137


with all relevant supporting documents and any other applicable
information (and in such a form) as the Authority may reasonably require from
time to time (each such reporting being a Monthly
Reconciliation Report),  and
within sixty (60) Calendar Days of the end of each Contract Year (or if, at the
end of the Contract Year, the Authority exercises its Call Option and shares
are transferred pursuant to the provisions of the Parent Body Agreement), the
Contractor shall provide the Authority with a report for each Site in the same
form as the Monthly Reconciliation Report or as otherwise reasonably required
by the Authority in respect of that previous Contract Year (the Annual Reconciliation Report).  6A.14Reports  6A.14.1The Contractor shall prepare and submit to
the Authority periodic reports for each Site (including the Annual
Reconciliation Reports) showing the amounts of expenditure expended and/or
accrued against each Funding Limit in accordance with Clause 4.1 (Reporting and
Reviewing).  6A.14.2Following the end of each Contract Year and
within ninety (90) Calendar Days of its receipt of the Contractors Annual
Reconciliation Reports, the Authority shall notify the Contractor that it
either agrees the Annual Reconciliation Reports or that it requires the
Contractor to amend and re-submit them (indicating those reports and sections
therein which it requires to be amended). Within thirty (30) Calendar Days of
such notification from the Authority, the Contractor shall either submit
revised Annual Reconciliation Reports incorporating all amendments required by
the Authority (and the Authority shall notify the Contractor of its agreement
to the revised Annual Reconciliation Reports within a further thirty (30)
Calendar Day period) or notify the Authority that it does not accept any one or
more of the amendments requested by the Authority (identifying the relevant
amendments). In the event that the Contractor does not accept any or all of the
Authoritys requested amendments, the Parties shall consult each other with a
view to agreeing revised Annual Reconciliation Reports but if they cannot agree
the final form Annual Reconciliation Reports within fourteen (14) Calendar Days
of first notification by the Contractor to the Authority that it does not
accept all of the Authoritys amendments, the matter shall he resolved, and the
final form Annual Reconciliation Reports determined, in accordance with the
Dispute Management Schedule.  6A.14.3The amount of expenditure and accruals
reported against each Funding Limit shall be reduced by the amount of Category
II Revenue reported against the relevant Funding Limit. The Contractor shall
report Category II Revenue.  6A.14.4Within fourteen (14) Calendar Days of the
agreement or determination of the Agreed Reconciliation Reports pursuant to
Clause 6A.14.2 above, the Authority shall determine whether or not the
Contractor has complied with Clause 6A.13.1 (Funding Limits) and, if the
Contractor has not complied with Clause 6A.13.1 (Funding Limits), the Authority
will serve a Demand on the Contractor in respect of sums paid by the Authority
as Allowable Costs which pursuant the procedures in this clause 6A.14 are
agreed or determined to be Disallowable Costs  6A.14.5The Contractor shall provide any information
reasonably requested by the Authority that enables the Authority to comply with
its State Aid reporting obligations to the Department of Trade and Industry.  138


6A.15Costs Transparency and Auditing  6A.15.1At any time the Authority or the Authoritys
Agents may choose to exercise the rights set out in Clause 4.5 (Inspection and
Audit) to audit the Contractors determination of Costs as Allowable Costs or
Disallowable, the Contractors claims for reimbursement of Allowable Costs or
the reconciliation between payments made and accruals.  6A.15.2The Contractor shall adopt a system of cost
transparency and open book accounting which provides for the cost components,
cost levels and cost build up and calculation for each and every item of cost
that is used on the formulation of the rates prices and sums under this
Contract, including those relating to Subcontracts, which relate to the
Contractors performance of its obligations under this Contract to be
calculated and made available to the Authority. The Contractor shall, at the
request of the Authority, make such of its records available to the Authority
as are necessary for the Authority to verify that a system of cost transparency
has and is being adopted. The Contractor shall ensure that its Subcontractors
also comply with such cost transparency and reporting provisions by including
such provisions in its Subcontracts. The Authority shall have the right to
access to the build up and calculations for each and every item of cost that is
used in the formulation of the rates, prices and sums under this Contract. The
Authority shall have the right to audit the Contractors Subcontractors and
Affiliates on the same basis.  6A.16Reconciliation
for Mid-Year Termination  6A.16.1If the last day of the final Contract Year is
any day other than 31 March (or if the Authority exercises its Call Option
under the provisions of the Parent Body Agreement or terminates the Parent Body
Agreement as a result of the default or insolvency of the Parent Body
Organisation notwithstanding the continuation of this Contract), the Authority
shall require the Contractor to produce an Annual Reconciliation Report
(subject to any modifications necessary to deal with mid-year termination,
where relevant) showing the information listed in Clauses 6A.13.2.1 to 6A.13.28
above for the Contract Year up to the date of termination, within sixty (60)
Calendar Days of such date of termination.  6A.16.2The Contractor shall propose an equitable apportionment of
the ASFL for the then current Contract Year for each Site based on progress as
against the costs, scope and schedule in the then current Contract Year of the
LTP for each Site in accordance with Paragraph 6 (Accounting Basis) of Part 4
of the Finance Schedule (Costs Principles and Procedures). If the Parties fail
to agree on such apportionments proposed by the Contractor, the matter shall be
resolved and determined in accordance with the Dispute Management Schedule.  6A.16.3The Contractor and the Authority shall comply with the
provisions of Clauses 6A.14.2, 6A.14.3 and 6A.14.4 above.  6A.16.4Within fourteen (14) Calendar Days of agreement or determination of the
Annual Reconciliation Reports the Authority shall, acting reasonably, determine
the amount of Incentive Fee for each Site and the amount of Efficiency Gain Fee
to which the Contractor is entitled, taking account of the profile of the PBIs
in the context of mid-year termination of the Contract or the Parent Body
Agreement as appropriate and of the Annual Reconciliation Report agreed or
determined pursuant to Clause 6A.16.3 above and in accordance with Part 2
of the Finance Schedule (Use of Performance Based Incentives).  139


6A.16.5Within fourteen (14) Calendar Days of the agreement or
determination of the Incentive Fee to which the Contractor is entitled the
Authority shall calculate the Year End Sum in accordance with Clause 6A.12.6
(Payments to Parent) above. If the Year End Sum is a positive figure then the
Authority shall pay an amount equal to the Year End Sum into the Contractors
Fee Account within thirty (30) Calendar Days of the Authoritys calculation of
the Year End Sum. If the Year End Sum is a negative figure then the Authority
shall serve a Demand on the Parent Body Organisation requiring that the Parent
Body Organisation pays an amount equal to the Year End Sum to the Authority
within thirty (30) Calendar Days of receipt of such Demand.  6A.16.6Notwithstanding the termination of this Contract or the
Parent Body Agreement as appropriate, the Authority hereby gives its consent to
the Contractor paying the Year End Sum (if a positive figure) to the Parent
Body Organisation unless for the Contractor to do so would be contrary to Law.  6A.17Direct
and Indirect Taxation  6A.17.1Tax  general  6A.17.1.1The Contractor agrees to take all reasonable actions
to meet its Taxation compliance obligations, and in particular to assist in the
reduction or elimination of any irrecoverable Taxation.  6A.17.1.2The
Authority shall retain the right to discuss the new VAT regime with the
Contractor at Sale Date to assess the cashflow implications for the Authority
and to review the first VAT return (and subsequent VAT returns as it may
consider necessary) prepared and submitted to HMRC after the Sale Date to
understand any changes to the previously anticipated cashflow forecast and to
make any appropriate amendments to the cashflow profile.  6A.17.2Corporation Tax  The Contractor:  6A.17.2.1agrees to prepare and submit toHMRCcorporation tax computations on the basis of the
principles agreed betweenHMRCand the Authority in the Code of Practice 10 Submission (the COP 10);  6A.17.2.2undertakes not to seek agreement fromHMRCto a treatment of any item in the corporation tax
computations which is inconsistent with the COP 10, unless the Authority
expressly consents in writing.  6A.17.2.3shall produce a tax pack in respect of the accounting records
maintained by the SLC on behalf of the Authority in the form and to the
frequency and timescales reasonably required by the Authority and respond to
any queries on a timely basis such that the Authority is able to meet its
taxation obligations  6A.17.3VAT  6A.17.3.1The Contractor agrees to charge VAT, issue VAT invoices and comply with
VAT compliance obligations on the basis of the VAT Agreement and in particular:  140


6A.17.3.1.1agrees to register and maintain registration for the purposes ofthe VATA;  6A.17.3.1.2agrees properly
to charge VAT and issue VAT invoices in respect of supplies made to Third Party
customers;  6A.17.3.1.3agrees properly
to charge VAT and issue VAT invoices in respect of the reimbursement of
Allowable Costs by the Authority;  6A.17.3.1.4agrees properly
to charge VAT and issue VAT invoices and credit notes as appropriate in respect
of the Incentive Fee;  6A.17.3.1.5agrees properly
to prepare and submit VAT returns on a timely basis to HM Customs and Excise
and to seek recovery as far as possible of VAT incurred in respect of goods and
services supplied to the Contractor; and  6A.17.3.1.6agrees not to
act in any way inconsistently with the principles set out in this Contract.  6A.17.3.2The Authority shall charge VAT in respect of the fee for the Property
Licence for the Sites and the fee for the licence of the Authority IP to the
Contractor, and shall properly issue VAT invoices in respect thereof.  6A.17.3.3The Authority warrants that it has elected to waive exemption from VAT
in accordance with the provisions of Paragraph 2 of Schedule 10 to VATA in
respect of the Sites.  6A.17.4Withholding Taxes  6A.17.4.1Any payment made by the Authority or the Contractor under, or pursuant
to the terms of, this Contract shall be made free and clear of all taxation
whatsoever save only for any deductions or withholdings required by applicable
Law.  6A.17.4.2The Authority warrants that it is a company resident in the United
Kingdom for the purposes of Part 15 of the Income Tax Act 2007.  6A.17.4.3The Contractor warrants that it is a company resident in the United
Kingdom for the purposes of Part 15 of the Income Tax Act 2007.  6A.17.4.4Where the Contractor is or will be required to account under this
Contract to the Authority in respect of any receipt from a Third Party, and
such receipt is or may be subject to deductions or withholdings in respect of
Taxation, the Contractor is required to take reasonable action necessary to
obtain the payment without such deduction or withholding, or to recover all or
part of the deduction or withholding.  6A.17.5Employee Taxes  The Contractor undertakes properly
to make all National Insurance Contributions and sums payable toHMRCunder the PAYE system in respect of emoluments and benefits paid or
payable, and to make all deductions and retentions as should be made in
accordance with the applicable Law.  141


6A.17.6Tax Returns  The Contractor agreesthat the Authority may, at the
Authoritys request, review tax returns and tax correspondence prior to their
submission to the relevant tax Authority and that the Contractor will take into
account the Authoritys reasonable comments provided that the timing of the
provision of such comments takes into account any deadline for the relevant
submission of which the Authority is aware and provided that the tax return or
tax correspondence relates to a matter for which the Authority has financial
responsibility.  6A.17.7Construction Industry Scheme Regulations:
Sections 559-567 Income and Corporation Taxes Act 1988  6A.17.7.1For the purposes of this Clause 6A.17.7, CIS means
the scheme prescribed by Chapter IV of Part XIII of the Income and
Corporation Taxes Act 1988 and/or the scheme prescribed by Chapter 3 of Part 3
of the Finance Act 2004, in either case to the extent that such scheme is in
force.  6A.17.7.2The Contractor shall comply with the obligations
imposed on it by the CIS and the obligation of the Authority to make any
payment under this Contract is subject to the provisions of the CIS.  142


PART 7 REAL ESTATE AND ASSET MANAGEMENT  7.1Right to
Occupy Sites  7.1.1From the
Commencement Date until the expiry or earlier termination of this Contract, the
Authority licences the Contractor:  7.1.1.1to use and occupy the Licensed Nuclear Site
Area (including the facilities and installations thereon and any easements
appurtenant thereto); and  7.1.1.2to use and occupy such part or parts of the
Authority Land (other than the Licensed Nuclear Site Area) (including the
facilities and installations thereon and rights and easements appurtenant
thereto) previously specified by the Authority and which the Contractor from
time to time properly requires for the purpose of performing its obligations
under this Contract and which at the date of this Contract comprises the land
shown coloured blue on the plans marked Chapelcross, Hunterston A, Oldbury,
Trawsfynydd and Wylfa attached at Part 1 (Nuclear Licensed Site Area
Plan) and Part 2 (Site Boundary Plan) of the Property Schedule and the
Ancillary Properties (but excluding any land that is the subject of an Off-Site
Tenancy Document); and  7.1.1.3to use and occupy any part or parts of the
Licensed Nuclear Site Area that are the subject of a Tenancy Document where
(and for so long as) the lawful right of occupation by the person with the
benefit of the relevant Tenancy Document has been properly suspended by the
Authority (or its agent) in accordance with the terms of the relevant Tenancy
Document; and  7.1.1.4to use the Authority Assets; and  7.1.1.5to sell Authority Assets in accordance with
the terms of the Customer Contracts; and  7.1.1.6to use (in common with the Authority and
all those authorised by it) such roads, accessways and pathways over and upon
the Authority Land (but outside a Site) as notified by the Authority to the
Contractor from time to time for the purposes of access to and from such Site;
and  7.1.1.7to exercise the rights reserved in favour
of the landlord pursuant to any Off-Site Tenancy Document insofar as it may
relate to the Sites)  to enable the Contractor to:  1) perform its obligations under
this Contract; and  2) discharge its obligations
pursuant to the Nuclear Site Licence and all other relevant Regulatory
Requirements; and  3) use the Sites and the
Authority Assets for any other use that the Authority has consented to in
writing,  (the Property Licence).  143


7.1.2The Contractor
agrees and undertakes with the Authority:  7.1.2.1to pay to the Authority the Property
Licence Fee in advance by way of one payment on 1 April each year (the
first payment being due on the date of this Contract); and  7.1.2.2not to impede in any way the Authority or
its officers servants or agents in the exercise of the Authoritys rights of
possession and ownership of any Site provided that (in respect of the part of
the Site that comprises the Licensed Nuclear Site Area) the Authority agrees
that in exercising its rights of possession and ownership the Authority shall
not do anything that would contravene the terms of the Nuclear Site Licence and
shall at all times comply with any proper regulations relating to the Licensed
Nuclear Site Area made by the Contractor (in its capacity as the holder of the
Nuclear Site Licence) (which the Contractor agrees shall not materially
adversely affect the exercise of the Authoritys rights) and notified to the
Authority from time to time; and  7.1.2.3to perform and observe all covenants
restrictions provisions and stipulations affecting the Sites and not to
interfere with any rights easements or other like matters affecting the Sites.  7.1.3The licence granted to the Contractor by
Clause 7.1.1 above is personal to the Contractor and shall not be capable of
being assigned or in any way otherwise dealt with or disposed of provided that
the Contractor may with the prior written consent of the Authority (at the
Authoritys sole discretion) and subject to the Contractor complying with the
terms of any necessary Regulatory Requirements grant:  7.1.3.1sub-licences of
any part of the Licensed Nuclear Site Area to authorised Subcontractors and/or
the Constabulary; and  7.1.3.2sub-licences of
any part of the Sites (excluding the Licensed Nuclear Site Area) to any Third
Party engaged by the Contractor for the proper performance of its obligations
under this Contract and/or the Constabulary.  7.1. 4If the Authority has granted its consent to
a Subcontract pursuant to Part 1 (Subcontracting/Procurement Requirements)
of the Subcontracting/ Procurement Schedule, such consent shall constitute the
Authoritys prior written consent in respect of the sub-licence to the relevant
Subcontractor for the purposes of Clause 7.1.3.1.  7.1. 5Without prejudice to the requirement to
obtain the Authoritys prior written consent under Clause 7.1.3.1, if the
Contractor has notified the Authority of its proposed entry into a Subcontract
in accordance with Paragraph 3.11 (Notification of Subcontracts not Requiring
Authority Approval) of Part 1 (Subcontracting/Procurement Requirements) of
the Subcontracting/ Procurement Schedule, such notification shall constitute
the Contractors notification and the Authoritys consent in respect of the
sub-licence to the relevant Subcontractor for the purposes of Clause 7.1.3.1.  7.1. 6If the Contractor is not required to notify
the Authority of its entry into a Subcontract nor required to obtain the
Authoritys prior written consent to the entry into such Subcontract under Part 1
(Subcontracting/Procurement Requirements) of the Subcontracting/Procurement
Schedule then, for the purposes of Clause 7.1.3.1, the Authority shall be
deemed to have given its prior written consent in respect of the sub-licence to
the relevant Subcontractor.  144


7.1.7The
licence granted to the Contractor by Clause 7.1.1 above is granted subject to:  7.1.7.1the Authoritys proprietary rights in
respect of the Sites; and  7.1.7.2the rights, covenants, conditions and other
matters affecting the Sites; and  7.1.7.3the rights of any third parties from time
to time subsisting in relation to the Sites; and  7.1.7.4the Tenancy Documents (to the extent that
they relate to the Site) and the Off-Site Tenancy Documents.  7.1.8The
Contractor shall not by virtue of the licence granted by Clause 7.1.1 above (or
otherwise) claim to be or become entitled to any estate right or interest in or
exclusive possession of any of the land of the Authority and/or the Authority
Assets and nothing contained in this Clause 7.1 shall be construed as creating
a legal or equitable demise of the Sites.  7.1.9For
the avoidance of doubt, notwithstanding the provisions of clause 7.1.8 the
Authority served on the Contractor notices dated 25 April 2007 in
accordance with the terms of section 38A(3)(a) of the Landlord and Tenant
Act 1954 and the Contractor or a person duly authorised by the Contractor made
statutory declarations in accordance with Paragraph 3 and 4 of schedule 2 of
the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 and
accordingly the Authority and the Contractor confirm and agree that the
provisions of sections 24 to 28 (inclusive) of the Landlord and Tenant Act 1954
are excluded in relation to any right of occupation created by this Contract.  7.1.10Nothing
contained in this Contract shall imply or warrant that the Sites may (whether
under statute or otherwise) be used for any purpose for which the Contractor
uses or intends to use the Sites.  7.1.11The
Ancillary Properties may only be used for the purposes specified by the
Authority from time to time.  7.1.12The
Contractor agrees that it shall not claim any proprietary interest or right in
the Sites.  7.2Objects of antiquity or value  The Contractor shall notify the Authority of all objects of antiquity or
value discovered in the course of the performance of this Contract. All such
objects shall belong to and be at the disposal of the Authority.  7.3Condition of Sites and Authority Assets  The Authority shall not give any
warranty as to the condition of each Site or the Authority Assets.  145


7.4Use
of Sites and Authority Assets  7.4.1The Contractor
shall not, without the prior written consent of theAuthority, use the Authority Assets (or part
thereof) other than in fulfilment of its obligations under this Contract,
applicable Law and Regulatory Requirements.  7.4.2The Authority shall be entitled
to require that:  7.4.2.1any movable Authority Asset beredeployed for
use on behalf of the Authority at any place outside a Site provided that such
redeployment will not impede or prevent the Contractor from performing its
obligations under this Contract; and/or  7.4.2.2the Contractor utilise any other movable asset
deployed to such Site by the Authority in the Contractors performance of its
obligations under this Contract.  7.4.3The care and maintenance of any Authority Asset redeployed pursuant to
Clause 7.4.2.1 above shall be the responsibility of the Authority untilsuch time as the Authority Asset
is returned to the relevant Site. The care and maintenance of any other movable
asset deployed to the relevant Site pursuant to Clause 7.4.2.2 above shall be
the responsibility of the Contractor until the Authority procures the removal
of such movable asset from the Site.  7.5Maintenance
of Sites and Authority Assets  7.5.1Save to the extent that it is the responsibility of a Third Party
pursuant to a Tenancy Document or an Off-Site Tenancy Document, the Contractor
shall maintain the Sites in accordance with the provisions of the LTP and shall
maintain, service and repair the Authority Assets in accordance with the
Contractors Internal Procedure relating to asset management.  7.5.2The Contractor shall create and
maintain a current and accurate Site 
Maintenance Register and supply a copy of that register to the Authority
upon Request.  7.5.3The Contractor shall create the
Asset Register which shall be completed no later than 12 months after the date
of this Contract.  7.5.4The Contractor
shall maintain the Asset Register as current and accurate and shall allow the
Authority to inspect the Asset Register at any time upon reasonable notice.  7.5.5The Contractor
will throughout the period of the Contract appoint and keep appointed a
suitability qualified person, who shall have been previously approved by the
Authority (such approval not to be unreasonably withheld), to liaise with the
Authority in connection with the Contractors compliance with its obligations
under Schedule 18 (Contractors Obligations in relation to the Sites).  7.6Necessary
Consents  7.6.1The Contractor
shall be required to maintain and procure a Nuclear Site Licence and
Environmental Agency licences, authorisations, permits or  146


consents or any other licence or permit necessary to enable it to
access, occupy and use each of the Sites for the purpose of fulfilling its
obligations under this Contract.  7.6.2Save as
provided in Clause 7.6.1 above, the Contractor shall only be obliged to use
reasonable endeavours to procure any Consent necessary for the purpose of
fulfilling its obligations under this Contract.  7.6.3The Authority
will provide reasonable co-operation and assistance to the Contractor in the
procuring of any Consent.  7.6.4Where a Consent
is required by the Contractor, but such Consent can only be obtained by the
Authority, the Authority shall take all reasonable steps to obtain such Consent
for the benefit of the Contractor.  7.7.Right
to Acquire  New Assets  7.7.1New Assets
acquired by the Contractor in performing the Contract shall be acquired in the
name of the Authority and shall pass into the immediate ownership of the
Authority and become Authority Assets.  7.7.2Upon acquiring
any New Assets, the Contractor shall promptly and accurately record such
acquisition(s) on the Asset Register.  7.7.3Any New Assets
must be purchased in accordance with the requirements of Part 1
(Subcontracting/Procurement Requirements) attached at the
Subcontracting/Procurement Schedule.  7.8Customer
Contracts  7.8.1Without
prejudice to Clause 3.6.3 (Authoritys right to instruct) and Clause 7.1.3 if,
at the Commencement Date, the terms of any Customer Contract provide to the
Customer (and/or an agent of the Customer) rights of access to and use of the
Authority Assets the Sites and their facilities, installations, structures and
outbuildings, if the Customer (and/or an agent of the Customer) wishes to
exercise such rights, the Authority shall allow the Contractor to fulfil its
obligations under such Customer Contract by, upon notice from the Contractor to
the Authority, permitting the Customer (and/or an agent of the Customer) such
access and such use required under the terms of the relevant Customer Contract
subject always to the applicable Law and Regulatory Requirements.  7.8.2If a Customer
Contract provides for the transfer of title in Authority Assets to the
Customer, the Contractor shall request the Authoritys prior written consent to
such transfer of title in accordance with the terms of the Customer Contracts.  7.9Contractors
obligations relating to the Site  The
Contractor shall observe and perform the obligations set out in Schedule 18
(Contractors Obligations in Relation to the Site).  147


PART 8
- INTELLECTUAL PROPERTY  8.1Licence of Authority IP to Contractor  8.1.1The Authority hereby grants to the Contractor a
non-transferable, non-exclusive, royalty-free licence of the Authority IP to
use during the Term for the purpose of fulfilling its obligations under this
Contract in consideration of a fee of £1,000 per annum.  The Contractor shall have the right to
sub-license the Authority IP to Subcontractors approved by the Authority for
use in performance of their Subcontracts, but shall have no other rights to
sub-license without the prior written approval of the Authority (such approval
not to be unreasonably withheld).  8.1.2The Contractor acknowledges that nothing in this Contract
shall constitute any representation or warranty by the Authority in respect of
the Authority IP and, in particular, acknowledges that the Authority does not
represent or warrant that any registered Authority IP is valid or that any
application for registration or grant will proceed to registration or grant or
will remain registered.  8.1.3The Contractor acknowledges that nothing in this Contract
shall constitute any representations or warranties that the Contractors
exercise of rights granted under this Contract shall not infringe any valid
intellectual property rights of third parties.  8.2The fee payable in Clause 8.1 is a VAT exclusive amount and
is payable in advance by way of one payment on 1 April in each Contract
Year (the first payment being due on the Commencement Date).  8.3IP Contributed by Parent Body
Organisation  Licence to Authority and Contractor  8.3.1Any IP made available to the Contractor by the Parent Body
Organisation for the purpose of fulfilling its obligations under this Contract
whether such IP is owned by the Parent Body Organisation or licensed to the
Parent Body Organisation with appropriate sub-license rights, (Parent IP) shall also be, and is hereby, licensed in
perpetuity to the Authority in its current application as of the date of
commencement of this Contract for utilisation in the Authority Field of Use
without payment of royalty fees (except to the extent otherwise agreed) and
then sub-licensed in perpetuity by the Authority to the Contractor who in turn
shall be entitled to grant sub-licences to its Subcontractors under this Agreement
in each case without payment of royalty fees. 
Subject to the Parent Body Organisations consent (such consent not to
be unreasonably withheld or delayed), the Authority shall have the right to
sub-license the Parent IP to other site licensee companies for use in relation
to their activities falling within the Authority Field of Use on any Designated
Sites without payment of royalty fees. 
The Authoritys right to use and sub-license the Parent IP shall remain
in force both during the term of this Contract and after this Contract has
expired or has been terminated until the Authority reasonably determines that
the Parent IP is no longer needed in relation to any Designated Sites for which
the Authority has obtained the rights to use the IP.  148


8.3.2Any Parent IP that is directly or indirectly required to
enable the Authority or its licensees to use or exploit any Developed IP shall
also be licensed in perpetuity to the Authority for utilisation in the Authority
Field of Use without payment of royalty fees (except to the extent otherwise
agreed). The Authority shall have the right to sub-license such Parent IP to
the Contractor who in turn shall be entitled to grant sub-licences to its
Subcontractors under this Agreement in each case without payment of royalty
fees.  The Authority shall have the right
to sub-license such Parent IP to other site licensee companies for use in
relation to their activities falling within the Authority Field of Use without
payment of royalty fees who shall be entitled to grant sub-licences to their
subcontractors for use in relation to their activities falling within the
Authority Field of Use, without payment of royalty fees.  The Authoritys right to use and sub-license
the Parent IP shall remain in force both during the term of this Agreement and
after this Agreement has expired or has been terminated until the Authority
reasonably determines that the Parent IP is no longer needed to enable the use
of any Developed IP.  Licence of new or additional Parent IP  8.3.3If during the term of this Contract, the Parent Body
Organisation wishes to make available to the Contractor, for the Contractors
use at the Site to fulfil its activities falling within the Authoritys Field
of Use, new or additional Parent IP beyond such Parent IP made available to the
Contractor as of the date of commencement of this Contract, such new or
additional Parent IP shall be licensed in accordance with this Clause 8.3 (IP
Contributed by Parent Body Organisation).  Licensing of Parent IP contained in Developed IP  8.3.4For the avoidance of doubt, Parent IP that is contained in
or forms the basis or background of any IP developed by or on behalf of the
Contractor (including by Subcontractors) or is otherwise required for the use
of such Developed IP, either during the term of this Contract or after this
Contract has expired or terminated shall, with respect to such Parent IP, be
treated for licensing purposes in a manner consistent with this Clause 8.3 (IP
Contributed by Parent Body Organisation).  8.3.5The Contractor shall have the further right to sub-license
Parent IP licensed to it under this Clause 8.3 (IP Contributed by Parent Body
Organisation) to Subcontractors approved by the Authority for use in the performance
of their Subcontracts.  Such sub-licence
of Parent IP to the Contractors Subcontractors shall contain terms that are
materially similar to the terms contained in the Authoritys licence from the
Parent Body Organisation and the Contractors follow-on licence from the
Authority.  Infringement of Parent IP by Third Parties  8.3.6In the case of any infringement or suspected infringement by
any Third Party of Parent IP which is licensed to the Authority pursuant to
this Clause 8.3 (IP Contributed by Parent Body Organisation), the Contractor,
in consultation with the Authority, shall promptly notify the Parent Body
Organisation and shall take such reasonable direction as the Parent Body
Organisation may provide for purposes of the Parent Body Organisations
response to such infringement or suspected infringement.  149


Use of
unlicensed Parent IP  8.3.7If the Contractor uses IP for the purposes of fulfilling its
obligations in relation to the Site under this Contract where that IP is owned
by or is licensed to the Parent Body Organisation but has not been licensed to
the Authority for the Authority Field of Use, a retrospective licence for such
use will be deemed to be granted to the Authority to the extent permitted under
the sub-licence rights granted by the Parent Body Organisation under this
Clause 8.3 (IP Contributed by Parent Body Organisation).  The Authority will have the same rights as it
has in relation to Parent IP under this Clause 8.3 (IP Contributed by Parent
Body Organisation).  8.4Authoritys Rights to IP developed
by or on behalf of the Contractor and Subcontractors  The Contractor shall establish procedures (which shall be audited on
reasonable notice by the Authority from time to time) under which the
identification, protection, exploitation and ownership of Developed IP is
evaluated in accordance with the principles set out in the provisions of this
Clause 8.4 and under which the Contractor shall seek approval from the
Authority as required under this Clause 8.4. 
IP created by or on behalf of the Contractor and/or by Subcontractors
during the performance of this Contract (Developed IP) shall be owned in
accordance with the provisions of this Clause 8.4:  Ownership by Authority of Developed IP created by the Contractor  8.4.1Ownership of any Developed IP
created by the Contractor shall vest in the Authority, subject to any
pre-existing rights of third parties and of the Parent Body Organisation and
the Contractor hereby assigns to the Authority all its right, title and
interest in any Developed IP created by it on or at any time after the date
hereof.  Ownership of Developed IP by the Authority  8.4.2Without prejudice to Clause 8.4.1 the Authority
shall own any Developed IP which the Authority determines (i) raises or
which may raise security issues relating to the use of such Developed IP
(including without limitation where the use or disclosure of such Developed IP
could compromise the security of any Designated Site, facilities, equipment or
materials relating to any Designated Site) and/or (ii) is of strategic
interest to the Authority and/or to United Kingdom business.  8.4.3As between the Authority and the Contractor, the
Authority shall own any and all IP in all output (including information,
results, test data, safety cases and other reports) obtained by and arising
from the application and use of any IP including Developed IP.  Ownership of Developed IP by Subcontractors  8.4.4Save in the circumstances identified in Clauses 8.4.2
and 8.4.3 and subject to the provisions of Clauses 8.4.6 and 8.4.10, Developed
IP that is created by or on behalf of any Subcontractor under its Subcontract
and which is based on or derived from IP owned by the Subcontractor immediately
prior to the commencement of the Subcontract shall be owned by the
Subcontractor (subject to any pre-existing rights of third parties).  150


8.4.5Ownership of Developed IP that is created by or on
behalf of any Subcontractor under its Subcontract and which is not based on or
derived from IP owned by the Subcontractor immediately prior to the
commencement of the Subcontract shall be owned by the Authority.  The Authority acknowledges that it may be
appropriate for such Developed IP that falls outside the provisions of Clauses
8.4.2 and 8.4.3 to be owned by the Subcontractor.  The Contractor, on behalf of any
Subcontractor, may give written notice to the Authority that the Subcontractor
wishes to retain ownership of such Developed IP.  Following receipt of such notice, the
Authority, in consultation with the Contractor on behalf of any Subcontractor,
shall determine the ownership of such Developed IP (such determination to be in
the sole discretion of the Authority).  Access to and use of information by the Authority  8.4.6Notwithstanding ownership of any Developed IP by
the Subcontractor and without prejudice to the provisions of Clause 4.2
(Records) and Clause 4.5 (Inspection and Audit), the Contractor shall ensure
that the Authority shall be entitled to access, use and disclose all and any
information created, received or maintained by or on behalf of the
Subcontractor whether from use or application of the Developed IP or otherwise
that is reasonably required by the Authority for any purpose.  Further Assurance  8.4.7In respect of any Developed IP owned by the
Authority pursuant to Clauses 8.4.1, 8.4.2, 8.4.3 and 8.4.5 the Contractor
shall (and shall procure that any Subcontractor shall) execute such further
documents and do such further acts as the Authority reasonably requires to give
full effect to the terms of this Clause 8 (Intellectual Property) and perfect
the Authoritys title to any such Developed IP.  Identification of IP owned by the Subcontractor and Licence of IP owned
by the Subcontractor to Authority  8.4.8The Contractor shall procure that any Subcontractor
identifies and declares to the Contractor prior to entering into its
Subcontract any IP which the Subcontractor owns immediately prior to the
commencement of the Subcontract which is to be used in the performance of the
Subcontract.  In respect of any such IP,
the Contractor shall procure that the Subcontractor shall grant to the
Authority a non-exclusive, perpetual, irrevocable, royalty-free licence to use such
IP within the Authority Field of Use together with the right to license such IP
to the Contractor SLC without the consent of the Subcontractor and permitting
the Contractor itself to sub-license its rights under any such sub-licence to
any of its sub-contractors without the consent of the Subcontractor.  Licence to the Authority of IP licensed to the Subcontractor  8.4.9In respect of any third party IP that is licensed
to the Subcontractor immediately prior to the commencement of the Subcontract
or at any time during the term of the Subcontract and is used by the
Subcontractor in the performance of its Subcontract, the Contractor shall
procure that the Subcontractor shall use all reasonable endeavours to procure a
licence for the Authority on reasonable terms which enables the Authority to
use and to  151


license
that IP within in the Authority Field of Use to the Contractor without the
consent of the licensor, and permitting the Contractor itself to sub-license
its rights under any such sub-licence to any of its sub-contractors without the
consent of the licensor.  Licence of Developed IP from Subcontractor to Authority  8.4.10Subject to Clause 8.4.11 the event that any
Developed IP is owned by a Subcontractor, the Contractor shall procure that the
Subcontractor shall grant to the Authority a non-exclusive, perpetual,
irrevocable, royalty-free licence to use such Developed IP within the Authority
Field of Use together with the right to license such Developed IP to any third
party including any other site licensee company without the consent of the
Subcontractor, and permitting any other site licensee company itself to
sub-license its rights under any such sub-licence to any of its sub-contractors
without the consent of the Subcontractor.  Licence of Background IP from Subcontractor to
Authority  8.4.11The Contractor shall procure that any Subcontractor
shall grant to the Authority a non-exclusive, perpetual, irrevocable,
royalty-free licence to use any IP owned by that Subcontractor that is
contained in or forms the basis or background of any Developed IP (Background IP) together with the right to
license such Background IP to the Contractor who in turn shall be entitled to
grant sub-licenses to its Subcontractors under this Agreement in each case
without payment of royalty fees.  The
Authority shall have the right to sub-license such Background IP to other site
licenses companies for use in relation to their activities falling within the
Authority Field of Use without payment of royalty fees who shall be entitled to
grant sub-licences to their subcontractors for use in relation to their
activities falling within the Authority Field of Use, without payment of
royalty fees.  Contractors Notification of Developed IP  8.4.12The Contractor shall procure that any Subcontractor
shall promptly notify the Contractor of any IP which is created and/or
developed by the Subcontractor during the performance of its Subcontract. The
Contractor shall promptly notify the Authority of any such Developed IP and any
Developed IP created by the Contractor itself. 
To the extent that the ownership of Developed IP created by or on behalf
of the Subcontractor has not been determined prior to the commencement of the
Subcontract the Authority may determine whether such Developed IP should be
owned by the Authority in accordance with the provisions of Clauses 8.4.2,
8.4.3 and 8.4.5.  Use of Developed IP by the Subcontractor  8.4.13If the Authority so requires, the Contractor shall
procure that, in the event that the Subcontractor exploits or licenses the use
of Developed IP owned by the Subcontractor outside the Authority Field of Use,
the Subcontractor shall negotiate in good faith with the Authority appropriate
payment (which may include royalties and/or lump sum payments) to the
Authority.  152


Licence to Parent Body Organisation  8.4.14Subject to the reasonable terms of the Authority
(which may include payment of reasonable royalties or fees) the Authority will
grant to the Parent Body Organisation a world-wide licence (which is freely
assignable or sub-licensable) to use for purposes other than activities falling
within the Authoritys Field of Use any Developed IP which vests in the
Authority pursuant to Clauses 8.4.1, 8.4.2, or 8.4.5 provided that where the
basis or background of the Developed IP is Parent IP such licence to the Parent
Body Organisation shall be on an exclusive basis.  The Authority shall execute such further documents
and do such further acts as the Parent Body Organisation reasonably requires to
give full effect to the terms of this Clause 8.4.14.  Exclusion of Parent IP from Developed IP  8.4.15For the avoidance of doubt Developed IP created by
or on behalf of the Contractor (including Subcontractors) and which vests in
the Authority pursuant to Clause 8.4.1, 8.4.2, 8.4.3 or 8.4.5 above shall
exclude any Parent IP under Clause 8.3 or any Third Party IP under Clause 8.7
that may form the basis or background of such Developed IP.  Protection of Developed IP  8.4.16Where any Developed IP vests in the Authority
pursuant to Clauses 8.4.1, 8.4.2, 8.4.3 or 8.4.5, the Contractor shall seek
(and shall procure that any relevant Subcontractor seeks) reasonable and
necessary protection in respect of such Developed IP by way of patent
applications or otherwise as the Authority may direct.  The Contractor shall keep the Authority
advised as to all developments with respect to any such applications and assign
the rights arising therefrom to the Authority.  Warranty  8.4.17The Contractor warrants (and shall procure that any
Subcontractor warrants) that the use and licensing of any Developed IP shall
not infringe the IP rights of any Third Party.  Register of IP  8.4.18The Contractor shall (and shall procure that any
Subcontractor shall) maintain an up to date register of the details of all
Developed IP including details of the owner of such Developed IP, and the terms
on which any Developed IP is licensed by the Contractor (or Subcontractor, as
the case may be) to any third party.  8.5Infringement of IP owned by the
Authority  8.5.1The Contractor shall immediately give notice in writing to
the Authority if it becomes aware of any:  (A)actual, suspected or threatened infringement of any of the
IP owned by the Authority (including Developed IP which vests in the Authority
pursuant to Clause 8.4 above) (Authority Owned IP);
or  153


(B)allegation, complaint, claims, actions or proceedings made,
raised or threatened by any Third Party that Authority Owned IP infringes the
rights of any Third Party.  8.5.2In the case of any actual or threatened infringement or
suspected infringement by any Third Party of Authority Owned IP:  (A)the Contractor shall, in consultation with the Authority,
decide what action, if any, to take including the bringing of proceedings in
the name of the Authority;  (B)the Contractor shall, subject to the Authoritys approval
(not to be unreasonably withheld or delayed), have control over and conduct of
any such claims and proceedings;  (C)the Contractor shall keep the Authority informed as to all
developments and steps taken by it or by any Third Party in relation to any
infringement or suspected infringement;  (D)the Contractor shall not make any admission other than to
the Authority and the Authority will provide the Contractor with all assistance
as it may reasonably require and request in connection with the Contractor
conduct of any claims, actions  or
proceedings.  Such assistance may include
the Authority at its cost, agreeing to be joined as a party in any such claims,
actions or proceedings brought by the Contractor pursuant to Clause 8.5.2(B).  (E)any award of costs or damages or other compensation payment
recovered in connection with any of the matters in this Clause 8.5 shall be for
the account of the Authority as Category I Revenue.  8.6Access to and
use of information by the Authority  Without prejudice to the provisions of
Clause 4.2 (Records) and Clause 4.5 (Inspection and Audit), the Contractor
shall ensure that the Authority shall be entitled to access, use and disclose
all and any information created, received or maintained by or on behalf of the
Subcontractor whether from use or application of the Developed IP or otherwise
that is reasonably required by the Authority for any purpose.  8.7Third Party IP  8.7.1In the event that the Contractor wishes to use third party
IP for the purpose of fulfilling its obligations in relation to a Site under
this Contract (Third  Party IP)
it shall discuss with the Authority whether the Authority wishes to have a
licence of the Third Party IP.  In the
event that the Authority indicates a desire to have such a licence the
Contractor shall use all reasonable endeavours to procure a licence for the
Authority on reasonable terms which enable the Authority to use and to
sub-license to the Contractor the Third Party IP and, if the Authority
indicates a further desire, the Contractor shall use all reasonable endeavours
also to procure for the Authority, the right to sub-license the Third Party IP
to other site licensee companies for use in relation activities falling within
the Authority Field of Use on any other Designated Sites.  The Contractor also shall use all reasonable
endeavours to procure that any licence from the Third Party to the Authority
shall remain in force until the Authority reasonably  154


determines
that the Third Party IP is no longer needed in relation to the carrying out of
its functions in relation to the Site and, where applicable, any other
Designated Site.  For the avoidance of
doubt this Clause 8.7.1 shall not apply to IP that is licensed by a third party
to any Subcontractor to which the provisions of Clause 8.4.9 apply.  8.7.2The Contractor shall (and shall procure that any
Subcontractor shall) maintain an up to date register of the details of any
Third Party IP licensed to the Contractor or the Subcontractor (as the case may
be) for the purposes of this Contract or any subcontract relating thereto
including the principal terms in respect thereof.  8.8Contractors
obligation to protect IP  The Contractor shall take all such
reasonable and necessary steps to protect IP owned by the Authority including
Developed IP.  Among other things, the
Contractor shall keep the Authority informed of all matters relevant to the
protection of the IP owned by the Authority and, if requested by the Authority,
make applications for patents, diligently prosecute any patent applications,
respond to oppositions filed by third parties, assign the patent rights to the
Authority and maintain any patents (including the payment of renewal fees). The
Authority, at its cost, will provide the Contractor with all assistance as it
may reasonably require and request in the protection and maintenance of the IP
owned by the Authority.  8.9Use and Sharing
of Information and Know-How  Subject to Part 10
(Confidentiality, Security and Compliance with Law), the Contractor shall share
information and know-how relating to activities falling within the Authoritys
Field of Use with the Authority and with third parties as directed by the
Authority.  8.10Back-up and
Storage  The Contractor shall ensure the back-up
of and storage in safe custody of all electronic data, material and documents
required to be maintained and retained under this Contract in accordance with
its Internal Procedures relating to records and data management.  8.11Documents and
Other Materials  8.11.1At the Authoritys request the Contractor shall provide to
the Authority any documents and other materials in any form and any other
articles (including copies) in its possession or control bearing or embodying any
of the Authority IP created on or after the Commencement Date subject to any
pre-existing rights of third parties and the Parent Body Organisation.  8.11.2In the event of expiry or termination of this Contract, the
Contractor shall preserve and shall deliver-up to the Authority all documents
and other materials in any form and all other articles (including copies) in
its possession or control bearing or embodying any of the Authority IP subject
to any pre-existing rights of third parties and the Parent Body Organisation.  155


PART 9 INFORMATION
TECHNOLOGY  9.1NISR and Other Statutory Obligations  9.1.1The Contractor
shall at all times comply with, and the provisions of this Clause 9.1 (NISR and
Other Statutory Obligations) shall be without prejudice to any obligations,
restrictions or directions imposed on the Contractor by:  9.1.1.1      the
provisions of the NISR and any direction or approval given by the OCNS pursuant
thereto; and  9.1.1.2any other applicable law or
regulations relevant to information security.  9.1.2The Contractor
shall, if requested by the Authority, promptly provide to the Authority all
information and
documents necessary to evidence such compliance.  9.1.3The Contractor shall promptly
notify the Authority in the event that the Contractor becomes aware of:  9.1.3.1      any breach of Clause 9.1.1; or  9.1.3.2any notice
received by the Contractor alleging a breach or a possible breach of the
matters referred to in Clause 9.1.1.1 and 9.1.1.2  and the Contractor shall provide to
the Authority all such information in relation thereto as the Authority
reasonably requests.  9.2Access to
Authority IT Systems and the Site IT Systems  Inthe event that, with the agreement of the Authority, the Contractor has
access to any Authority IT Systems, the Contractor shall comply with such
reasonable requirements in relation to the security thereof as the Authority
shall specify from time to time in writing. In the event that, pursuant to this
Contract or otherwise with the agreement of the Contractor, the Authority has
access to any of the Site IT Systems, the Authority shall comply with such
reasonable requirements in relation to the security thereof as the Contractor
shall specify from time to time in writing.  9.3Inspections  Without prejudice or limitation to
the Contractors obligations under Clause 4.5 (Inspection and Audit), the
Contractor shall allow the Authority to co-ordinate any inspection byor on behalf of the Authority of the
Site IT Systems with any inspection thereof being performed by or on behalf of
the OCNS, and shall permit the OCNS to share with the Authority the results of
any such inspection by or on behalf of the OCNS.  9.4Maintenanceand Support and Business Continuity  9.4.1Without
prejudice to the Contractors obligations under the LTP, the Contractor shall
at all times ensure that the Critical Site IT Systems are maintained and
supported in accordance with Good Industry Practice, and inparticular, subject to the
provisions in Part 1 of the Information Technology  156


Schedule
(Critical IT Systems), the Contractor shall at all times ensure that all
material components of Critical Site IT Systems are of a version which is
supported by the manufacturer or supplier thereof.  9.4.2The Contractor shall at all times
maintain and put into effect IT and business continuity and disaster recovery
plans, consistent with ISO/IEC 17799 and Good Industry Practice, in respect of
the Critical Site IT Systems that are identified in the column of part 1 of the
Information Technology Schedule that details the requirement to comply with
this clause.  9.5Changes to Site IT Systems  9.5.1Withoutprejudice to the Contractors
obligation to comply with the Regulatory Requirements of the OCNS and the HSE
in respect of the Site IT Systems and its ability to make emergency fixes to
the Site IT Systems in accordance with the Contractors documented Internal
Procedures (which procedures shall meet with the Authoritys approval), the
Contractor shall not without the Authoritys prior written consent make any
material alteration to any of the Critical Site IT Systems, including without
limitation:  9.5.1.1     the
introduction of any new data or voice circuits to or from a Site or new or
altered interfaces to external IT Systems;  9.5.1.2     the
introduction of any new or altered Software which requires `the reconfiguration
of any application external to the Sites and not maintained by the Contractor,
or which alters the interfaces referred to in Clause 9.8; and  9.5.1.3     any
alteration which has or may have a material impact on safety at the Sites
and/or the security of a Critical Site IT System.  9.5.2Without
prejudice to the Contractors obligation to comply with the Regulatory Requirements of
the OCNS and the HSE in respect of the Site IT Systems and its ability to make
emergency fixes to the Site IT Systems in accordance with the Contractors
documented Internal Procedures (which procedures shall meet with the Authoritys
approval), the Contractor shall not without the Authoritys prior written
consent make any material alteration to any of the Site IT Systems which would
adversely affect the separability of the Site IT Systems from any IT Systems
owned or operated by the Contractors Affiliates or any IT Systems external to
the Sites.  9.5.3Any change to the hardware or
Software comprised in a Site IT System shall be reflected in the Asset Register
maintained pursuant to Clause 7.5 (Maintenance of Sites and Authority Assets).  9.6Deposit of Source Code  9.6.1Subject to the
provisions in Part 2 of the Information Technology (Deposit Source Code),
the Contractor shall adhere to Good Industry Practice in relation to the
deposit in escrow of the Source Code of
Software packages comprised in the Site IT Systems, having regard to the
materiality and criticality of the Software concerned and the ease with which
the same could be replaced and, without prejudice to the generality of the
foregoing, the Contractor shall if so requested in writing by the Authority in
respect of one or more such Software packages to ensure that the Source Code
thereof is  157


deposited in
escrow with the Escrow Agent for the benefit of the Contractor and the
Authority on the Escrow Terms. The Contractor shall maintain a register of the
Software packages deposited in escrow.  9.6.2The Contractor shall ensure that
any deposit made in accordance with Clause 9.6.1 is at all times complete and
up to date such that it accurately reflects the relevant Software as the same
is installed and used by the Contractor from time to time.  9.7Release of Source Code  Inthe event that any Source Code deposited pursuant to Clause 9.6 is
released in accordance with the applicable escrow terms, the Contractor shall
ensure that the licence referred to in Clause 8.7 (Third Party IP) shall
include all IP subsisting in such Source Code.  9.8Data Interfaces  The Contractor shall at all times maintain, and
shall produce to the Authority upon request complete descriptions in such
format as the Authority reasonably requires of all interfaces through which
data relating to the Sites is transmitted or received as between the Contractor
and any Third Party and/or as between the Site IT Systems located on the Sites
and any other IT Systems, and of the nature of the data so transmitted, such
descriptions to include full definition of the relevant interfaces and the
format in which such data is transmitted. During the first six months following
the Commencement Date, the Contractors obligation under this Clause 9.8 shall
be an obligation to use reasonable endeavours to maintain and produce such
descriptions.  9.9Transferability of Contracts  9.9.1The Contractor
shall at all times ensure that, save to the extent otherwise agreed inwriting by the Authority, each IT
Contract entered into on or after the Commencement Date shall provide that the
rights and obligations (if any) of the Contractor thereunder which relate to
the performance of the Contractors obligations under this Contract are capable
of being separately transferred to the Authority or its nominee without the
consent of any counterparty to such IT Contract or other Third Party and
without incurring any payment obligation or other additional liability under
such IT Contract.  9.9.2Where, having used all reasonable
endeavours to do so, the Contractor is unable to procure the transferability of
any IT Contract referred to in Clause 9.9.1, the Contractor shall consult with
the Authority and give the Authority such information in relation thereto as
the Authority reasonably requests. The Authority will not unreasonably withhold
consent to the Contractor entering into such IT Contract where the Contractor
is able to demonstrate to the Authoritys reasonable satisfaction that the
proposed counterparty thereto will not agree to such transferability on
commercially reasonable terms, and there is no acceptable alternative to such
counterparty.  158


PART 10: CONFIDENTIALITY, SECURITY AND
COMPLIANCE WITH LAW  10.1Confidential Information  10.1.1Subject to Clauses 10.3 to 10.9
below, each Party shall hold in confidence all documents, materials and other
information, whether technical or commercial, supplied by or on behalf of the
other parties (including all documents and information supplied in the course
of proceedings under Part 13 (Dispute Management) or the rules of any
other dispute resolution procedure to which a dispute is referred in accordance
with this Contract) and all documents, materials and other information of any
nature relating to a Third Party which it may acquire or have access to
directly or indirectly and shall not, except with the written authority of the
other Party, publish or otherwise disclose the same otherwise than as expressly
provided for in this Contract unless or until the recipient Party can
demonstrate that any such document, material or information is in the public
domain through no fault of its own and through no contravention of this
Contract, whereupon to the extent that it is in the public domain this
obligation shall cease.  10.1.2the Contractor shall not make use of
this Contract or any information issued or provided by or on behalf of the
Authority in connection with this Contract otherwise than forthe purpose of complying with its
obligations under this Contract and otherwise than as expressly provided for in
this Contract except with the written authority of the Authority.  10.2Contractor right to request confidentiality  The Contractor may at any time request in writing, stating reasons,
that the Authority keeps particular information confidential and does not
disclose it to Third Parties. The Contractor may further request in writing at
any time that, where the Authority discloses Information pursuant to Clause
10.3 (Disclosure by the Authority), the Authority shall make representations to
the recipient of such Information as to the desirability of keeping such Information
confidential. Any such request by the Contractor shall be accompanied by a
document setting out in writing the requested representations. The Authority
shall consider whether to make such representations.  10.3        Disclosure
by the Authority  10.3.1The Authority, having considered any request made
by the Contractor under Clause 10.2 (Contractor right to request
confidentiality) may, save for information which relates solely to the business
and operations of the Parent Body Organisation or information which is judged
by OCNS to be security sensitive (unless the recipient of information pursuant
to this Clause 10.3 (Disclosure by the Authority) holds all relevant security
clearances), disclose any and all information acquired by it under or pursuant
to this Contract (the Information)  10.3.1.1tothe
Parliamentary Commissioner for Administration, a Minister of the Crown, any
department of the government of the United Kingdom, the United Kingdom
Parliament, the Scottish Parliament, the National Assembly of Wales, the Mayor
of London, Greater  159


London Authority or any
department, officer, agent, representative, employee, consultant or adviser of
any of them;  10.3.1.2to the Regulators;  10.3.1.3to the extent required by
applicable Law or pursuant to an order of any court of competent jurisdiction
or under the Dispute Resolution Procedure;  10.3.1.4to bidders who have pre-qualified
to participate in any relevant forthcoming tender process, upon obtaining an
undertaking of confidentiality equivalent to that contained in Clause 10.1
(Confidential Information);  10.3.1.5to insurers upon obtaining an
undertaking of confidentiality equivalent to that contained in Clause 10.1
(Confidential Information);  10.3.1.6to professional advisers, upon
obtaining an undertaking of confidentiality equivalent to that contained in
Clause 10.1 (Confidential Information);  10.3.1.6.1for the purpose of:  10.3.1.6.1.1      the examination
and certification of the Authoritys or the Contractors accounts; or  10.3.1.6.1.2any examination pursuant to Section 
6(1)  of the National Audit Act 1983 of the economy, efficiency and
effectiveness with which the Authority has used its resources; and/or  10.3.1.6.2to consultees under the Energy
Act  10.3.2So far as is practicable, the
Authority shall give the Contractor reasonable notice of any proposed
disclosure pursuant to Clause 10.3 (Disclosure by the Authority).  10.3.3Notwithstanding the provisions of
Clause 10.1 (Confidential Information), the Authority may, with the consent of
the Contractor not to be unreasonably withheld, further disclose the
Information to persons not referred to in Clause 10.3 (Disclosure by the
Authority).  10.3.4Any determination as to whether it
is reasonable for the Contractor to withhold its consent to disclosure under
Clause 10.3.3 above shall have regard to:  160


10.3.4.1compliance with the
Authoritys statutory functions and duties, including in particular the
promotion of effective competition and value for money;  10.3.4.2.     relevant
Government policy;  10.3.4.3the requirement to
maintain security;  10.3.4.4the public interest;
and  10.3.4.5the requirement to
maintain openness and transparency.  10.4Publication  10.4.1The Authorityhaving considered any request made
by the Contractor pursuant to Clause 10.2 (Contractor right to request
confidentiality) may publish, in such form and at such times as it sees fit,
the following:  10.4.1.1amounts of payments to the Contractor and any reductions made from the
Contractor under this Contract;  10.4.1.2performance statistics;  10.4.1.3monitoring reports; and  10.4.1.4such information as the Authority reasonably requires to publish having
regard to the list of considerations set out in Clause 10.3.4 above, including
information it includes in its annual report.  10.4.2The Authority shall give the Contractor reasonable
notice of any proposed publication pursuant to this Clause 10.4(Publication).  10.5Disclosure by the Contractor  The Contractor may disclose without
the consent of the Authority, any and all information acquired by it under or pursuant to this Contract save for
information which is judged by OCNS to be security sensitive (unless the
recipient of information pursuant to this Clause 10.5 (Disclosure by the
Contractor) holds all relevant security clearances) to:  10.5.1 the Regulators  10.5.2 the
extent required by any parliamentary obligation, applicable Law or pursuant to
an order of any court of competent jurisdiction or under the Dispute Resolution
Procedure;  10.5.3
insurers, upon obtaining an undertaking of confidentiality equivalent to that
contained in Clause 10.1.1 (Confidential Information);  10.5.4
professional advisers including lenders, upon obtaining an undertaking of
confidentiality equivalent to that contained in Clause 10.1.1 (Confidential
Information); and  10.5.5 any
department, officer, agent, representative, employee, consultant or adviser of
any of the entities referred to in Clauses 10.5.1 to 10.5.4 above subject, in
any case where the entity in question would be required to provide an
undertaking of  161


confidentiality
equivalent to that contained in Clause 10.1.1 (Confidential Information), to
obtaining such an undertaking of confidentiality.  10.6Delivery Up  On expiry or termination of this
Contract, the Contractor shall ensure or procure that the Nominated Staff return to the
Contractor or the Authority (as applicable) all documents, materials or any
information which is confidential (in accordance with Clause 10.1 (Confidential
Information) belonging to the Contractor or the Authority.  10.7Damages not the only remedy  Without prejudice to any other rights or
remedies that the Authority may have, the Parties acknowledge and agree that
damages alone would not be an adequate remedy for any breach by the Contractor
of this Clause 10.1 (Confidentiality) and that the remedies of injunction and
specific performance as well as any other equitable relief for any threatened
or actual breach of this Clause 10.1 (Confidentiality) by the Contractor would
be more appropriate remedies.  10.8Freedom of Information
Act  10.8.1This Part 10 (Confidentiality, Security and Compliance with Law) is
subject to the
Freedom of Information Act 2000 (FOIA), as amended, and the Environmental
Information Regulations 2004 (EIR), as amended together with any guidance
and/or codes of practice issued by the Information Commissioner, the Department
for Constitutional Affairs or the Lord Chancellors Department.  10.8.2The Contractor shall facilitate
the Authoritys compliance with its information disclosure obligations under
the FOIA and the EIR in the manner provided for in Clauses 10.8.2 to 10.8.6.
and shall also comply with a protocol to be agreed between the parties from
time to time detailing the practical arrangements and procedures to be adopted.
If the Authority is required to provide information as a result  of a request made to it under the FOIA or EIR
and such information is in the possession of any of the Contractor or any of
its Subcontractors then the Contractor shall provide such information to the
Authority as soon as reasonably practicable. 
The Contractor shall provide all necessary assistance as reasonably
requested by the Authority to enable the Authority to respond to a Request for
Information (as defined under the FOIA) within the time for compliance set out
in section 10 of the FOIA or regulation 5 of the EIR.  10.8.3The Contractor
shall provide a nominated member of staff with sufficient authority to handle,
co-ordinate and be responsible for the supply of information to the Authority
for the purposes of compliance with this Clause 10.8.  10.8.4The Authority
shall be responsible for determining at its absolute discretion whether any
information provided to the Authority is exempt from disclosure in accordance
with the FOIA or EIR or is to be disclosed in response to a Request for
Information.  10.8.5The Contractor
acknowledges that the Authority may, acting in accordance with the FOIA or EIR,
disclose information without consulting the  162


Contractor, or the Authority may, at its discretion, elect to consult
the Contractor and take its view into account.  10.8.6The Contractor
acknowledges that any lists or schedules provided by it outlining confidential
information or commercially sensitive information are of indicative value only
and that the Authority may nevertheless be obliged to disclose such information
in accordance with this Clause 10.8.  10.9National Audit Office  The Parties acknowledge and agree
that the National Audit Office has the right to publish details of thisContract (including information
considered by the Parties to be commercially sensitive) in its relevant reports
to Parliament.  10.10Data
Protection Act  10.10.1Each Party to this Contract shall ensure that it
complies at all times with the DPA or such other equivalent data
protection legislation as may be relevant to its performance of this Contract
in respect of all personal data processed by it.  10.10.2In relation to
all data, the Contractor shall at all times comply with the DPA as a data
controller if necessary, including maintaining a valid up-to-date registration
or notification under the DPA covering the data processing to be performed in
connection with its obligations under this Contract.  10.10.3The Contractor
shall, and shall procure that any Subcontractor shall, only undertake
processing of personal data reasonably required in connection with the
Contractors obligations under this Contract and shall not transfer any
personal data to any country or territory outside the European Economic Area.  10.10.4The Contractor
shall not disclose personal data to any Third Parties other than to:  10.10.4.1Employees,
Nominated Staff and Subcontractors to whom such disclosure is reasonably
necessary in order for the Contractor to carry out its obligations under this
Contract; or  10.10.4.2to the extent
required under a court order,  provided that disclosure under
Clause 10.10.4.1 above is made subject to written terms substantially the same
as, and no less stringent than, the terms contained in this Clause 10.10 (Data
Protection Act) and that the Contractor shall givenotice in
writing to the Authority of any disclosure of personal data it or a
Subcontractor is required to make under Clause 10.10.4.2 above immediately it
is aware of such a requirement.  10.10.5The Contractor
shall bring into effect and maintain all technical and organisational measures
to prevent unauthorised or unlawful processing of personal data and accidental
loss or destruction of, or damage to, personal data including but not limited
to taking reasonable steps to ensure the reliability of Employees and Nominated
Staff having access to the personal data.  163


10.10.6The
Authority may, at reasonable intervals, request a written description of the
technical and organisational methods employed by the Contractor and referred to
in Clause 10.10.5 above. Within thirty (30) Calendar Days of such a request,
the Contractor shall supply written particulars of all such measures detailed
to a reasonable level such that the Authority can determine whether or not, in
connection with the personal data, it is compliant with the DPA.  10.11      Publicity  10.11.1Adverse Publicity  A Party shall notify the other Party
as soon as reasonably practicable of any fact or occurrence of which the
notifying Party is aware relating to the Authority,Contractor or the Parent Body Organisation which could in the reasonable
opinion of the notifying Party be expected to cause adverse publicity to the
Contractor or the Parent Body Organisation in relation to this Contract or to
the Authority generally.  10.11.2Announcements  10.11.2.1Subject to the
remaining provisions of this Clause, no Party shall release any announcement or
despatch any announcement or circular, relating to this Contract unless the
form and content of such announcement or circular have been submitted to, and
agreed by, the other Party.  10.11.2.2Nothing in
this Clause 10.11.2 (Announcements) shall prohibit any Party from making any
announcement or despatching any circular as required by law or the rules of
the UK Listing Authority or of the London Stock Exchange or any other
regulatory body in which case, to the extent not inconsistent with legal
obligations or the rules of the UK Listing Authority or of the London
Stock Exchange, the announcement shall only be released or the circular
despatched after consultation with the other Party and after taking into
account the reasonable requirements of the other Party as to the content of
such announcement or circular.  164


PART 11               INDEMNITY,
LIABILITY AND INSURANCE  11.1The Authority
shall notify the Contractor of the policies it has negotiated in respect of the
Contractor Required Insurances.  11.2The Contractor
shall fully co-operate in the procurement of the Contractor Required Insurances
as directed by the Authority.  11.3Except as
expressly directed by the Authority, the Contractor shall not take out any
insurance other than pursuant to Clause 11.2 above.  11.4The Contractor
shall not take any action or fail to take any reasonable action, or (insofar as
it is reasonably within its power) permit anything to occur in relation to it,
which would entitle any insurer to refuse to pay any claim under:  11.4.1any Contractor
Required Insurance(s) under which it is an insured person; or  11.4.2any insurance
taken over by the Authority relating to this Contractor and the terms of which
the Authority has notified the Contractor in writing.  11.5The Contractor
shall notify the Authority and relevant insurers immediately on becoming aware
of any claim or potential claim on the Contractor Required Insurance or on any
insurance taken out by the Authority in relation to the Sites, facilities or
installations and/or the activities of the Contractor or Subcontractors and
shall follow promptly all directions given to it by the Authority or the
insurers in relation to such claim or potential claim including in particular
full disclosure of all relevant facts pertaining to the claim or potential
claim.  11.6The Contractor
shall either apply the proceeds of any claims on the Contractor Required
Insurance as directed by the Authority or, at the direction of the Authority
remit such amount to the Authority, in either case within nine (9) Calendar
Days of the receipt of such proceeds by the Contractor.  165


PART 12               TERMINATION  12.1Termination Events  This
Contract shall terminate on the earlier of the expiry of the Term pursuant to
Clause 1.3 (Commencement and Duration) or as a result of:  12.1.1early termination caused by Contractor Default in
accordance with Clause 12.2;  12.1.2early
termination caused by Authority Default in accordance with Clause 12.6;  12.1.3Termination for
Convenience by the Authority in accordance with Clause 12.8; or  12.1.4termination for
Long Term Force Majeure in accordance with Clause 1.9.4.  12.2Contractor Default  The
following events shall give rise to an Authority right to terminate for
Contractor Default:  12.2.1Breach of
Contractor Obligations  12.2.1.1A material breach by the
Contractor of any of its obligations under this Contract which materially and
adversely affects the performance of this Contract, including:  12.2.1.2a failure by the Contractor to
comply with applicable Law or Regulatory Requirements;  12.2.1.3a material breach by the
Contractor of security requirements;  12.2.1.4a failure by the Contractor to
meet those standards of performance specified in Clause 2.2 (Standard of
Performance) other than the standards specified in Clauses 2.2.4 and 2.2.5;  12.2.1.5a material adverse finding is
made against the Contractor by any one or more of  the Regulators in
relation to the Contractors performance of its obligations under this
Contract;  12.2.1.6a material breach by the
Contractor of its supply obligations to Customers under the Customer Contracts;  12.2.1.7a material failure by the
Contractor to comply with the provisions of Clauses 5.12 and 5.12A (Pensions);  12.2.1.8a material failure by the
Contractor to comply with the provisions of Part 10 (Confidentiality,
Security and Compliance with Law);  12.2.1.9a failure by the Contractor to
comply with the provisions of Clause 1.18 (Assignment);  166


12.2.1.10the Parent Body Organisation
undergoes a Change in Control without having obtained the prior written consent
of the Authority to such change;  12.2.1.11Persistent Breach; or  12.2.1.12a failure by the Contractor to
report to the Authority a breach of the subcontracting requirements set out in Part 1
(Subcontracting/Procurement Requirements) of the Subcontracting/Procurement
Schedule; except where the event in question was caused by the Authority
failing to reimburse the Contractor for Allowable Costs or Trading Costs
pursuant to Clauses 6.11 and 6A.11 (Reimbursement).  12.2.2Insolvency  The occurrence of an Insolvency Event in respect of
the Contractor or the Parent Body Organisation except where in the case of the
Contractor such Insolvency Event was:  12.2.2.1caused by the Authoritys belief
that funds were to be used for a purpose which was fraudulent, otherwise
illegal or contrary to public policy which was not proved correct; or  12.2.2.2caused by the Authority failing
to reimburse the Contractor for Allowable Costs or Trading Costs pursuant to
Clauses 6.11 and 6A.11 above (Reimbursement).  12.2.3Revocation of
licence  12.2.3.1any revocation of the Nuclear
Site Licence, any Environmental Agency or Scottish Environment Protection
Agency (as applicable) licence, authorisation, permit or consent or any other
material licence or permit held by the Contractor the possession of which is
necessary to enable the Contractor to operate the Site; or  12.2.3.2upon receipt of notice by the
Contractor of the HSEs (or other relevant bodys) intention to revoke such
licence or permit where the Contractor has no ability to appeal, challenge or
discharge any such intention to revoke;  12.2.3.3.in either case where such
revocation or threatened revocation is not for the sole purpose of issuing a
replacement licence to the Contractor.  12.2.4Parent Body
Agreement  A
material or persistent breach by the Contractor or the Parent Body Organisation
of the Parent Body Agreement or upon the Parent Body Agreement ceasing to be
valid and binding on the Parent Body Organisation.  167


12.3Termination for Persistent Breach  12.3.1For the
purposes of this Clause 12.3 (Termination for Persistent Breach), Breach of
the Same Type means the recurrence of any of the events specified in Clause
12.2.1, whether or not each occurrence was in itself of a material nature.  12.3.2Except where
the occurrence is caused by the Authority failing to reimburse the Contractor
for Allowable Costs or Trading Costs pursuant to Clauses 6.11 and 6A.11
(Reimbursement) if any of:  (i) a Breach of the Same Type; or  (ii) a failure to pay creditors pursuant to its
obligations under Clauses 6.6.1.1(A) and 6A.6.1.1.2; or  (iii) a failure to Protect the Supply Chain; or  (iv) a failure to comply with Clause 2.2.5
(Standard of Performance).  12.3.2.1has occurred more than 2 times in
any 3 month period or the Authority (acting reasonably) believes that the
Contractor is demonstrating a pattern of behaviour which is reasonably likely
to lead to a Contractor Default, then the Authority may serve a notice on the
Contractor;  12.3.2.2specifying that it is a formal
warning notice (Performance Warning Notice) giving reasonable details of the
breach specifying the Authoritys concerns; and  12.3.2.3stating that such breach is a
breach which, if it recurs frequently or continues, may result in a termination
of this Contract, or requiring the Contractor to take steps to address those
concerns by a specified date.  12.3.3If, following
service of such a Performance Warning Notice, the breach specified has
continued beyond the specified date or recurred one or more times within the 6
month period after the date of service, then the Authority may serve another
notice on the Contractor (Final Performance Warning Notice):  12.3.3.1specifying that it is the final
warning notice;  12.3.3.2stating that the breach specified
has been the subject of a Performance Warning Notice served within the six (6) month
period prior to the date of service of the Final Performance Warning Notice;
and  12.3.3.3stating that if such failure
continues or recurs one or more times within the three (3) month period
after the date of service of the Final Performance Warning notice, the same may
constitute a Contractor Default with the result that the Contract may be
terminated.  168


12.3.4A Performance
Warning Notice may not be served in respect of any breach in respect of which a
previous Performance Warning Notice has already been served until a period of
three (3) months has elapsed since the date of service of the previous
Performance Warning Notice or related Final Performance Warning Notice.  12.4Termination or Remedy for Contractor Default  12.4.1If a Contractor Default has occurred and the
Authority wishes to terminate this Contract, the Authority shall serve a
termination notice (theAuthoritys Termination Notice) on the Contractor.  12.4.2The Authoritys Termination Notice shall specify the
type and nature of Contractor Default that has occurred, giving reasonable
details.  12.4.3In the case of a Contractor Default in the type
specified in Clauses 12.2.1.1, 12.2.1.2, 12.2.1.6, 12.2.1.7 or 12.2.1.8
 the Authority (acting reasonably) may decide that the Contractor Default
is incapable of remedy, the Authority shall specify this in the Authoritys
Termination Notice and this Contract shall terminate on the date falling thirty
(30) Calendar Days after the date of receipt by the Contractor of the Authoritys
Termination Notice.  12.4.4In the case of a Contractor Default (including, for
the avoidance of doubt, the types specified in Clause 12.4.3 above) which the
Authority (acting reasonably) considers is capable of remedy, the Authoritys
Termination Notice shall require the Contractor at the Contractors option
either:  12.4.4.1to remedy the Contractor Default
within thirty (30) Calendar Days of the date of the Authoritys Termination
Notice (or such longer period as may be agreed by the Authority in its absolute
discretion);  12.4.4.2to propose within thirty (30)
Calendar Days of the date of the Authoritys Termination Notice and obtain the
Authoritys approval to a programme to remedy the Contractor Default (the Remediation
Programme).  12.4.5If the Contractor Default is not remedied within the
period specified in the Authoritys Termination Notice for such remedy under
Clause 12.4.4.1, the Authority shall be entitled to terminate this Contract
either with immediate effect or on such period of notice not exceeding 12
months as it reasonably determines to be appropriate.  If the Authority
terminates on notice, it will use all reasonable endeavours, including liaison
with the Regulators, to ensure that the period of notice is as short as
possible.  12.5Remediation Programme  12.5.1The Remediation Programme shall specify in detail
how the Contractor Default is proposed to be remedied, the steps required to
remedy the Contractor Default and the latest date by which the Contractor
anticipates that the Contractor Default will be remedied.  12.5.2Where the Contractor proposes a Remediation
Programme in accordance with Clause 12.4.4.2 (Termination or Remedy for
Contractor Default), the Authority shall have thirty (30) Calendar Days from
the date of receipt of  169


the proposed Remediation
Programme within which to notify the Contractor whether the Authority accepts
the proposed Remediation Programme (such acceptance not to be unreasonably
withheld).  Failure of the Authority to
provide such notification shall constitute deemed acceptance by the Authority.  12.5.3Where the Authority notifies the Contractor that it
does not accept the Remediation Programme, the Parties shall endeavour within
the following thirty (30) Calendar Days to agree any necessary amendments to
the Remediation Programme.  In the absence of agreement within such thirty
(30) Calendar Day period, the question of whether or not the Authoritys
withholding of acceptance is reasonable may be referred by either Party to be
resolved in accordance with Clause 13 (Dispute Management).  12.5.4Where the Contractor has put forward a Remediation
Programme that has been accepted by the Authority or determined to be
reasonable and the Contractor fails to achieve any element of the Remediation
Programme or fails to remedy the Contractor Default within the date specified
in the Remediation Programme (as the event may be), or the Remediation
Programme is rejected by the Authority as not being reasonable and the Dispute
Resolution Proceduredoes
not find against that rejection, then the Authority may terminate this Contract
either with immediate effect or on such period of notice as it reasonably
determines to be appropriate.  If the Authority terminates on notice, it
will use all reasonable endeavours, including liaison with the Regulators, to
ensure that the period of notice is as short as possible.  12.5.5Where the Authority has issued an Authority
Termination Notice in the event of Contractor Default pursuant to Clause 12.2.3
(Revocation of licence) which the Authority accepts (acting reasonably) has
occurred through no fault of the Contractor, the Authority shall provide
reasonable assistance to the Contractor in its discussions with HSE and/or EA
or SEPA as applicable to procure the remedy of such Contractor Default.  12.6Authority Default  12.6.1     The following events
shall be an Authority Default:  the Authority:  12.6.1.1not funding or reimbursing
Allowable Costs or Trading Costs (except to the extent that such Costs are
treated as Disallowable Costs in accordance with this Contract); or  12.6.1.2failing to make any undisputed payment
of Incentive Fee to the Contractor in accordance with Clauses 6.11.3 and
6A.11.5 (Performance Based Incentive Arrangements),  12.6.1.3in each case within thirty (30)
Calendar Days of such sum(s) being due and payable; and  12.6.1.4a material breach by the
Authority of its obligations under this Contract which materially and
substantially prevents the performance of the Contractors obligations under
this Contract.  170


12.7Termination or Remedy for Authority Default  12.7.1If an Authority Default has occurred and the
Contractor wishes to terminate this Contract, the Contractor shall be entitled
to serve a termination notice (theContractors
Termination Notice) on the Authority within
twenty-eight (28) Calendar Days of becoming aware of the Authority Default.  12.7.2The Contractors Termination Notice shall specify
the type of Authority Default that has occurred entitling the Contractor to
terminate.  12.7.3This Contract will terminate on the day falling
thirty (30) Calendar Days after the date on which the Authority received the
Contractors Termination Notice, unless the Authority rectifies the Authority
Default within twenty-one (21) Calendar Days of receipt of the Contractors
Termination Notice.  12.7.4Where the Contractor has terminated this Contract
for Authority Default, the Authority shall provide reasonable assistance to the
Contractor in its discussions with HSE regarding Licence Condition 36 and its
discussions with EA regarding any applicable RSA 93 Authorisation Schedule 1
Condition 6 with a view to enabling the Contractor to replace the Nominated
Staff as soon as is reasonably practical.  12.8Termination for Convenience  The Authority shall be entitled to terminate this Contract at any time
on giving reasonable notice to the Contractor such notice not being a period
less than twelve (12) Months (Termination
for Convenience).  12.9Reasonable Costs on Termination  In the event of:  12.9.1termination for Authority Default in accordance with
Clause 12.7 (Termination or Remedy for Authority Default);  12.9.2Termination for Convenience pursuant to Clause 12.8
(Termination for Convenience);  12.9.3termination for Long Term Force Majeure pursuant to
Clause 1.9.4 (Long Term Force Majeure); or  12.9.4termination for an Insolvency Event of the
Contractor where such Insolvency Event was caused by any of the events listed
in Clause 12.2.2 (Insolvency),  the Authority shall pay the Contractors reasonable costs (proposed by
the Contractor and agreed by the Authority) arising directly from such
termination of this Contract provided always that the Authority shall not make
any payment in respect of the Contractors loss of profits or loss of
opportunity or the consequential losses of Affiliates.  171


12.10                      Accrued Liabilities  Termination of this Contract pursuant to this Clause
12 (Termination) shall be without prejudice to the Parties liabilities which
accrued prior to the date of termination.  172


PART 13 DISPUTE
MANAGEMENT  13.1        Requirement
to refer disputes  13.1.1Save as otherwise expressly provided in this
Contract including in Clauses 13.2 (Reasonableness of the Authority), any
dispute or difference arising out of or in connection with this Contract,
including, but not limited to, any question regarding its existence,
interpretation, validity, construction or termination shall be attempted to be
resolved between the Contractor and the Authority. If any dispute or difference
cannot be so resolved, it shall be resolved in accordance with the Dispute
Resolution Procedure attached at the Dispute Management Schedule.  13.1.2Neither Party shall commence any claim, legal action
or proceedings until it has followed the Dispute Resolution Procedure, provided
that nothing in the Dispute Resolution Procedure shall prevent a Party from
seeking interim or interlocutory relief in the English courts.  13.2        Reasonableness of the Authority  13.2.1In relation to the Clauses and Schedules listed in
Clause 13.2.2 below pursuant to which the Authority shall reasonably determine
certain matters, the Contractor may only dispute whether a determination made
by the Authority is reasonable. Such dispute shall be attempted to be resolved
between the Contractor and the Authority and if it cannot be so resolved, only
the issue of the reasonableness of the Authoritys decision may be referred to
the Dispute Resolution Procedure. The Authoritys determination pursuant to the
relevant clause shall prevail unless and until it is agreed or found to be
unreasonable. In the event that the Authority is found to have acted
reasonably, the Contractors costs relating to the reference of the dispute to
the Dispute Resolution Procedure shall be Disallowable and the Authority shall
claim its relevant costs from the Parent Body Organisation pursuant to the
Parent Body Agreement. In the event that the Authority is found to have acted
unreasonably, the Authority shall bear such costs.  13.2.2The Clauses and Schedules referred to in Clause 13.2.1
above are:  13.2.2.1Clause 2.3 (No activities outside
current Contract Year of LTP), the Authoritys determination as to whether an
activity is outside of the LTP; and  13.2.2.2Clause 4.5.12 (Audit Findings and
Corrective Action) in relation to the Authoritys reasonable withholding of
acceptance to the Contractors plan for Corrective Action; and  13.2.2.3Clause 12.4 (Termination or
Remedy for Contractor Default) in relation to whether the Authority has acted
reasonably in determining that the Contractor Default is incapable of remedy;
and  13.2.2.4Clause 12.5 (Remedial Programme)
in relation to the Authoritys reasonable withholding of acceptance to the
Contractors Remedial Programme; and  173


13.2.2.5Programme Management Schedule Part 2
(Setting the LTP and Change Control) other than Paragraph 9.2 (Change Directed
by the NDA) and Paragraph 11 (Changes that the Authority Cannot Refuse); and  13.2.2.6Subcontracting/Procurement
Schedule Paragraph 1.1.2 of Part 1 (Subcontracting/Procurement
Requirements), the Authoritys interpretation of the applicable EU Procurement
Rules; and  13.2.2.7Finance Schedule Part 4
(Costs Principles and Procedures); and  13.2.2.8Finance Schedule Part 2(Use of Performance Based
Incentives); and  13.2.2.9Clause 7.3 (Transitional
Balances) of Finance Schedule Part 6 (Cashflow Forecasting and Calculating
Dates for Payment) in relation to the Authoritys determination of the
Transitional Balance Payment Dates; and  13.2.2.10Clause 7.4 (Transitional
Balances) of Finance Schedule Part 6 (Cashflow Forecasting and Calculating
Dates for Payment) in relation to the Authoritys determination of the revised
Transitional Balance Payment Dates.  174


PART 14               RELETTING
THE CONTRACT  14.1        Acknowledgement  The Contractor acknowledges that the Authority may wish, at or before
the expiry of the Term:  14.1.1to invite persons (including the Parent Body
Organisation) to tender for the right to own the shares in the Contractor and
to negotiate a replacement Site Management and Operations Contract to be
entered into between the Contractor and the Authority (upon the acquisition of
the shares by the Incoming Parent); or  14.1.2to acquire the shares in the Contractor itself.  14.2        Preparation for Reletting  The Contractor will, if so requested by the Authority, provide the
Authority with access to the personnel of the Contractor and all books, records
and other materials kept by or on behalf of the Contractor in connection with
the Tasks for the purpose of assisting the Authority in relation to the tender
and/or transfer referred to in Clause 14.1 (Acknowledgement) and will supply an
external facing team to assist the Authority with the reletting of the Contract
which team must consist of a sufficient number of sufficiently qualified and
experienced people (in the reasonable opinion of the Contractor). Subject to
Clause 10 (Confidentiality, Security and Compliance with Law) the Authority will
be permitted to make such personnel, including the external facing team, books,
records or other material available to participants in the tender process.  14.3The
Contractor will make available to the Authority such information (including
financial and operational information) as the Authority reasonably requires in
connection with such tender and/or transfer and will be required to assist in
the verification of the information.  14.4        Parent Body Organisation Bid  The Contractor acknowledges the importance to the
Authority of:  14.4.1a fair and unbiased competitive process; and  14.4.2the perception by all interested parties that the
competitive process is fair and unbiased.  14.5        If the
Parent Body Organisation wishes to participate in the competitive process then
immediately on receipt of notice from the Authority notifying the Contractor of
the commencement of a competitive process for the Sites, the Contractor shall
demonstrate to the satisfaction of the Authority that:  14.5.1the Contractor is remaining impartial;  14.5.2treating all tenderers equally including providing
them with equality of information;  14.5.3making the Employees (except for the Nominated
Staff) equally available to assist and be consulted by tenderers;  14.5.4using all reasonable endeavours to procure that the
tenderers perceive that they are being treated equally;  175


14.5.5the time costs for any Nominated Staff who the
Parent Body Organisation is permitted to use in its bid team pursuant to Clause
16 (Provision of Staff to the SLC) of the Parent Body Agreement will be charged
to an appropriate corporate centre and will not be charged as Allowable Costs;
and  14.5.6all Nominated Staff and Key Employees have entered
into an Impartiality Undertaking in the form of Part 5 of the Employee
Schedule (Pro Forma Impartiality Undertaking).  14.6        The
Contractor shall not allow any Nominated Staff to participate in the
competitive process on behalf of the Parent Body Organisation unless they are
individually named in the list agreed between the Parent Body Organisation and
the Authority pursuant to Clause 14.4 of the Parent Body Agreement.  For the avoidance of doubt, the Contractor
shall not allow any Employee to participate in the competitive process.  14.7        Employees  Save as where otherwise permitted by the Contractors Internal
Procedures relating to human resources, and save as where otherwise required by
applicable Law and Regulatory Requirements, during the last twelve (12) Months
of the Term, the Contractor will not be permitted without the prior written
consent of the Authority (such consent not to be unreasonably withheld):  14.7.1to vary or purport or promise to vary the terms and
conditions of employment or pensions terms of any Employees or Nominated Staff;  14.7.2to create or grant, or purport or promise to create
or grant, terms or conditions of employment for any Employee where the
employment of such Employee by the Contractor may commence on or after the end
of the Term if and to the extent that such terms or conditions are materially
different from the terms or conditions of employment of equivalent Employees;  14.7.3to increase or decrease the number of Employees such
that:  14.7.3.1the total number of Employees or
the total cost per annum to the Contractor of employing all Employees is
increased; or  14.7.3.2the total number of Employees is
decreased,  in each case, by more than 5 per cent during such
period of twelve (12) Months; and  14.7.4to make any changes to the identity of any Key
Personnel or to any of the Nominated Staff.  14.8Subcontracts  Save as permitted by Part 1 of the Subcontractor/Procurement
Schedule (Subcontracting/Procurement Requirements), during the last twelve (12)
Months of the Term, the Contractor will not be permitted to agree to any
significant or material amendment of the terms of any Subcontract without the
Authoritys prior written consent (such consent not to be unreasonably
withheld).  14.9        The
Authority may require the Contractor to take steps to terminate any
Subcontracts that will continue beyond the expiry or earlier termination of the
Term.  176


14.10      ESTABLISHMENT
OF NEW SLC  14.10.1If the Authority notifies the Contractor that it intends
to establish a new SLC, the Contractor shall fully cooperate with any
reasonable instruction of the Authority to assist in such establishment
including in relation to consultation of relevant Employees regarding transfer
to the new SLC, separability of IT systems, novation or assignment of IT
Contracts, Customer Contracts and Subcontracts, the requirement to put legally
binding contracts in place between the new SLC and the Contractor and any party
with whom the Contractor has  Inter-SLC
Service Contract and obtaining a new Nuclear Site Licence in respect of the
relevant site.  14.10.2The Contractor
shall have due regard to the Authoritys intention to establish new SLCs in the
performance of its obligations under this Contract.  14.10.3Any requirement
of the Authority placed on the Contractor pursuant to this Clause 14.10
(Establishment of New SLC) shall, to the extent that such requirement is not in
the relevant current Contract Years NTWP, be an Authority Change to be
included in the NTWP  in accordance with
Paragraph 9 (Change Directed by the NDA) of Part 2 (Setting the LTP and
Change Control) of the Programme Management Schedule.  14.11      TRANSITION OUT  14.11.1The Contractor undertakes to the Authority that it
will co-operate with the reasonable instructions of the Outgoing Parent and, in
particular, will use all reasonable endeavours to facilitate the release of the
Nominated Staff of the Outgoing Parent as soon as is compatible with Regulatory
Requirements.  14.11.2Save to the extent the Contractor must comply with
applicable Law and Regulatory Requirements, the Contractor undertakes to the
Authority not to take any action which prevents, prejudices or frustrates the
transition between the Outgoing Parent and the Incoming Parent.  177


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  SOUTHERN SITES


THISDEED OF AMENDMENT, RESTATEMENT AND CONSOLIDATIONis dated 2007  BETWEEN  (1)THENUCLEAR DECOMMISSIONING AUTHORITY, a non-departmental public body whose
registered office is at Herdus House, Westlakes Science and Technology Park,
Moor Row, Cumbria, CA2 3HU (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, Warrington,
Cheshire, WA4 4GB (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, Warrington, Cheshire, WA4 4GP (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 Berkeley, Bradwell and
Hinkley (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 Dungeness and
Sizewell (which sites at Dungeness and Sizewell are hereinafter
referred to as theGenerating
Sitesand whichcontract 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 tothe
Dungeness Site and the Sizewell 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  1


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  1.1Definitions  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  1.2.1headings and
sub-headings are for ease of reference only and shall not be taken into
consideration in the interpretation or construction of this Deed;  1.2.2all references
to Clauses and Schedules are references to clauses of and schedules to this
Deed;  1.2.3Appendix 1 is
an integral part of this Deed and reference to this Deed includes reference to
Appendix 1;  1.2.4words importing
the singular include the plural and vice
versa;  1.2.5words importing
a particular gender include all genders;  1.2.6references 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  2.1With 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.  2.2For the avoidance of doubt:  2


(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.  3GOVERNING 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:  DirectorSecretary/DirectorEXECUTED AS A DEED byMAGNOX ELECTRIC LIMITEDDirectorDirectorEXECUTED AS A DEED byENERGY SALES AND TRADING LIMITED  3


DirectorDirector  4


APPENDIX 1  AMENDED, RESTATED AND CONSOLIDATED SITE MANAGEMENT & OPERATIONS CONTRACT TERMS AND CONDITIONS  5


Nuclear
DecommissioningAuthority  Dr
  Peter WalkdenMagnox
  North
  Our
  ref: T1-MN-07-NDA- 1987-RR1100
  Daresbury ParkDaresburyWarringtonWA4 4GB  Date: 10 November 2009  Dear Peter  CONTRACT No: NDA-T1-MN-07  Subject:Contract Amendment No. 13
in respect of Contract Extension  In accordance with clause 1.13 
Notices and Communications and 1.17 Variation, of the above contract, please
see attached Contract amendment number 13 dated 10thNovember 2009.  Please acknowledge acceptance of
this correspondence within 7 days of the above date by returning a duly signed
and authorised copy of the enclosed contract amendment.   Yours sincerely   /s/
  SARA JOHNSTONSara
  JohnstonNDA Programme Director - Magnox North, Magnox South
  & RSRL  1000 Birchwood Boulevard
  
  T + 44 (0) 1925 802303Millennium Business ParkWarringtonWA3 7QL  www.nda.gov.uk


AMENDMENT TO CONTRACT  Contract
  Number:
  
  NDA-T1-MN-07Contract
  Name:
  
  MAGNOX
  NORTH AMENDED, RESTATEDAND CONSOLIDATED SITE MANAGEMENTAND OPERATIONS CONTRACTAmendment
  Number:
  
  13Date:
  
  10
  November 2009  Amendment:  1.3 Commencement And Duration  1.3.2Secondary Period  In
accordance with clause 1.3.2.3 the Authority wishes to extend the Contract for
a further period from 1stApril 2010 to
31stMarch 2012.  In
addition the Authority shall have the 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 31stMarch 2012, to be awarded in
periods of time to be determined by the NDA, but to align with the transfers of
shares to the new Parent Body Organisation.  Signed
  on behalf of NDA:
  
  /s/
  TONY GODLEYName:
  
  Tony
  GodleyPosition:
  
  Contract
  ManagerDate:
  
  10
  November 2009  Contract Amendment Acceptance:  I hereby confirm receipt and
acceptance of Amendment No. 13 to the above Contract.  Signed
  on behalf of Contractor:Name:Position:Contractor:
  
  Magnox
  Electric LtdDate:


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  
  1


TABLE OF CONTENTS  PART 1
  GENERALPART 2
  CONTRACTORS OBLIGATIONSPART 3
  RIGHTS AND OBLIGATIONS OF AUTHORITYPART 4
  PERFORMANCE MANAGEMENT, PERFORMANCE ASSURANCE AND
  RECORDSPART 5
  EMPLOYEESPART 6
  FINANCE (Pre-Sale)PART 6A
  FINANCE (Post-Sale)PART 7
  REAL ESTATE AND ASSET MANAGEMENTPART 8
  INTELLECTUAL PROPERTYPART 9
  INFORMATION TECHNOLOGYPART 10
  CONFIDENTIALITY, SECURITY AND COMPLIANCE WITH LAWPART 11
  INDEMNITY, LIABILITY AND INSURANCEPART 12
  TERMINATIONPART 13
  DISPUTE MANAGEMENTPART 14
  RELETTING THE CONTRACT  2


LIST
OF SCHEDULES   Schedule 1
  
  Lifetime Plan SchedulePart 1:
  
  Statement of WorkSchedule 2
  
  Programme Management SchedulePart 1:
  
  Programme ControlsPart 2:
  
  Setting the LTP and Change ControlPart 3:
  
  Project Validation and Financial SanctionSchedule 3
  
  Commercial SchedulePart 1:
  
  Customer ContractsPart 2:
  
  Permitted ActivitiesSchedule 4
  
  Employee SchedulePart 1:
  
  Nominated StaffPart 2:
  
  Key PersonnelPart 3:
  
  Pro Forma Secondment AgreementPart 4:
  
  Deed of ParticipationPart 5:
  
  Pro Forma Impartiality UndertakingSchedule 5
  
  Subcontracting/Procurement SchedulePart 1:
  
  Subcontracting/Procurement RequirementsPart 2:
  
  Inter-SLC Service Contract Pro FormaSchedule 6
  
  Finance SchedulePart 1
  
  Funding Limit and Available Incentive FeePart 2
  
  Use of Performance Based IncentivesPart 3
  
  Calculation of Efficiency Gain FeePart 4
  
  Costs Principles and ProcedurePart 5:
  
  Not used.Part 6:
  
  Cashflow Forecasting and
  Calculating Dates for PaymentPart 7:
  
  Provisions Applying to Defective Performance of Alternative
  Remuneration TasksSchedule 7
  
  Property SchedulePart 1:
  
  Nuclear Licensed Site Area PlansPart 2:
  
  Site Boundary PlansSchedule 8
  
  Intellectual Property SchedulePart 1:
  
  Parent Supplied Intellectual PropertySchedule 9
  
  Information Technology SchedulePart 1:
  
  Critical IT SystemsPart 2:
  
  Deposit of Source CodeSchedule 10
  
  Insurance SchedulePart 1:
  
  Authority and Contractor InsurancesSchedule 11
  
  Not used  3


Schedule 12
  
  Dispute Management SchedulePart 1:
  
  Dispute Management ProcedureSchedule 13
  
  Reporting SchedulePart 1:
  
  Monthly Reporting
  RequirementsSchedule 14
  
  European State AidPart 1:
  
  European State Aid DecisionSchedule 15
  
  Not usedSchedule 16
  
  Not usedSchedule 17
  
  Knowledge Management PolicyPart 1:
  
  Authority Knowledge
  Management PolicySchedule 18
  
  Contractors Obligations in relation to the
  SitesPart 1:
  
  Contractors Obligations
  in relation to the SitesSchedule 19
  
  Authorised Persons under the ContractPart 1:
  
  Addresses for Notices and
  CorrespondenceSchedule 20
  
  Electricity Interface Obligations SchedulePart 1:
  
  Allocation of
  Responsibilities under Industry DocumentsSchedule 21
  
  Post Commencement Date Issues to be
  ResolvedPart 1:
  
  Post Commencement Date
  Issues to be Resolved  4


THIS AGREEMENTis made on 1 April 2005 and amended by deed of amendment,
restatement and consolidation on                
2007  BETWEEN  (1)THENUCLEAR DECOMMISSIONING AUTHORITY, a non-departmental public body whose registered office is at Herdus
House, Westlakes Science and Technology Park, Moor Row, Cumbria, CA2 3HU(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, Warrington,
Cheshire, WA4 4GB (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, Warrington, Cheshire WA4 4GP (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;  (C)The following events have occurred:  (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  1.1Definitions  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 Act 1990 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);  5


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;  6


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 Berkeley Site, such storage and other
facilities as nominated by the Authority from time to time and which at the
date of this Contract comprises an Emergency Control Centre, Police
Headquarters, Holland House, Cheltenham (used as an emergency control centre),
the land known as Breakheart Quarry (used as a former explosives testing site)
and two pipelines leading from the former Bankside Power Station Southwark onto
or under the riverbed of the River Thames (being redundant pipes);  ·in relation to Bradwell 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 Hinkley Site, such storage and other
facilities as nominated by the Authority from time to time and which at the
date of this Contract comprise an administration block, Hinkley Point B Power
Station (used as an administration block) and an area of land on the C site
(used for storage of spoil), Hinkley Point B Power Station;  ·in relation to Dungeness Site, such storage and other
facilities as nominated by the Authority from time to time and which at the
date of the Contract comprise a right of way over a level crossing at Lydd,
Kent (used by the Dungeness A nuclear site as a level crossing); and  ·in relation to Sizewell Site, such storage and other
facilities as nominated by the Authority from time to time and which at the
date of the Contract comprise a helicopter landing site, Sizewell B nuclear
site (used by Sizewell A nuclear site as a helicopter landing site), a
sub-station on the Sizewell B nuclear site (used by the Sizewell A nuclear site
as a sub-station), premises known as the District Survey Laboratory, Lovers
Land, Leiston, Suffolk (used by the Sizewell A nuclear site as a survey laboratory)
and a reservoir at Sizewell B nuclear site (used by the Sizewell A nuclear site
as a reservoir).  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.  7


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 Act
2004;  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  8


(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;  9


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 Berkeley Site, the Bradwell
Site, the Dungeness Site, the Hinkley Site and the Sizewell Site shown coloured
yellow and coloured blue on the plans marked Berkeley, Bradwell, Dungeness,
Hinkley and Sizewell 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;  10


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;  Berkeley Sitemeans the area of land at
Berkeley licensed to the Contractor as shown yellow and blue on the plan markedBerkeleyrelating to Berkley at Part 2
of the Property Schedule (Site Boundary Plans);  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 Act 1985 and, for
the purposes of Clauses6.5 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;  Bradwell Sitemeans the area of land at
Bradwell licensed to the Contractor as shown coloured yellow and blue on the
plan marked Bradwell relating to Bradwell at Part 2 of the Property
Schedule (Site Boundary Plans);  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;  11


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meansany 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 2ndJune 2004;  (ii)LCH EnClear OTC
Third Party Clearing Agreement Calyon Financial SNC and Magnox Electric Limited
dated 6thAugust 2004;  12


(iii)Accession
Agreement to the Network Code between Transco Plc and Magnox Electric Limited
dated 5thFebruary 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;  13


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;  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);  14


Climate Change Levy Exemption
Certificates Costsmeansthose 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 thePermitted Activities, the
Trading Limits and theTrading
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meansan 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);  15


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;  16


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;  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 Act 1985 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 toHMRCby
Herbert Smith 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.  17


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meansfacilities, 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;  18


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 Act 2004;  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 Act 1989 relating to the distribution of electricity;  DPAmeans the Data Protection Act 1998;  Dungeness Sitemeans the area of land at
Dungeness licensed to the Contractor as shown coloured yellow and blue on the
plan marked Dungeness relating to Dungeness at Part 2 of the Property
Schedule (Site Boundary Plans);  EAmeans the Environment Agency;  e-Government Metadata Standard
(e-GUS)means the e-GUS 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;  19


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 thePermitted Activities, the
Trading Limits and theTrading
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 Walesunder the Finance Act
2004established by a resolution of The Electricity Council passed on 20thJanuary 1983and 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 thePermitted Activities, the Trading Limits and theTrading 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 Act 2004;  20


Escrow Agentmeans NCC Escrow International Limited, registration
office Manchester Technology Centre, Oxford Road, Manchester M1 7EF, 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 1stApril 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
Act 1995 or section 227 of the Pensions Act 2004, 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 Act 1995 or section 227 of the Pensions Act 2004, 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meansthat 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;  21


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);  22


(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 thePermitted Activities, the Trading
Limits and theTrading Strategy;  23


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 Dungeness Site
and the Sizewell 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);  Hinkley Sitemeans the area of land at
Hinkley licensed to the Contractor as shown coloured yellow and blue on the
plan marked Hinkley relating to Hinkley of Part 2 of the Property
Schedule (Site Boundary Plans);  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;  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);  24


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;  25


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  26


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 Act
1978, any exercise of the Royal Prerogative, any enforceable community right
within the meaning of section 2 of the European Communities Act 1972, 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 Berkeley,
Bradwell, Dungeness, Hinkley and Sizewell 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meansa group within
theElectricity Supply Pension Schemewhich was
sectionalised on 31 March 2007 into financially independent sections, each
with their own participating employer(s);  27


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
toHMRCunder 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  28


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;  29


Nuclear Site Licencemeans the nuclear site licence granted to the Contractor
pursuant to section l of the Nuclear Installations Act 1965 (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;  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 number6005193) whose registered office is at 1100 Daresbury
Park, Daresbury, Warrington, Cheshire WA4 4GB;  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;  30


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:  31


(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  (c)at common law in respect of fraudulent acts in
relation to this Contract or any other contract with the Authority;  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);  32


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) Act 1992;  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  33


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 thePermitted Activities, the Trading Limits and theTrading 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 andBritish 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  34


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 Berkeley Site; the
Bradwell Site, the Dungeness Site, the Hinkley Site, the Sizewell 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 Berkeley Site, the
Bradwell Site, the Dungeness Site, the Hinkley Site and the Sizewell 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 numbers 39 and 70 in the LTP;  35


Sizewell Sitemeans the area of land at
Sizewell licensed to the Contractor as shown coloured yellow and blue on the
plan marked Sizewell relating to Sizewell at Part 2 of the Property
Schedule (Site Boundary Plans);  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);  36


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 Act 1988;  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);  37


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
mark-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 theGeneratingSites 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;  38


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);  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 Act 2000;  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 Act 1994 or any similar tax imposed in addition thereto or in substitution
therefore;  VATAmeans Value Added Tax Act 1994;  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;  39


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;  Year End Sumhas the meaning
given in Clauses 6.11.8 and 6A.12.6 (Payments to Parent).  40


1.2Interpretation  Save to the extent that the context or the express
provisions of this Contract otherwise
require:  1.2.1in 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);  1.2.2headings and
sub-headings are for ease of reference only and shall not be taken into
consideration in the interpretation or construction of this Contract;  1.2.3all 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;  1.2.4the Schedules
(including Appendices to such Schedules) are an integral part of this Contract
and reference to this Contract includes reference to the Schedules ;  1.2.5all 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;  1.2.6all 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;  1.2.7words importing
the singular include the plural and vice versa;  1.2.8words 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;  1.2.10any 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;  1.2.11references to Party and Parties means a party or the parties to this Contract as
applicable;  1.2.12all monetary
amounts are expressed in pounds sterling;  41


1.2.13a reference to a balance sheet or
profit and loss account includes a reference to any note forming part of or
attached to it;  1.2.14references to the word includes or including are to be construed without limitation;  1.2.15references to a document being in the agreed form means a copy of
such document initialled for the purposes of identification by the Parties;  1.2.16any 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;  1.2.17a reference to
a site or the Sites shall include any part of a site or the Sites; and  1.2.18all references to a time of day are references to UK
time.  1.3Commencement
And Duration  1.3.1Initial 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).  1.3.2Secondary Period  1.3.2.1The 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 two (2) years
beyond the Initial Period with such option being divided into two (2) one (1) year
consecutive periods (each being a One Year Extension).  1.3.2.2If 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.  1.3.2.3The 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.  42


1.3.3Survival 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.  1.4State 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.  1.5Representatives and Authority to Act  1.5.1Co-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.  1.5.2Delegation of Authority  1.5.2.1Each 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.  1.5.2.2Each 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 theAuthority or the Contractor,
as relevant.  1.5.3Authority
to Act  1.5.3.1Individual members of the Authoritys team shall have such authority to
act on behalf of the Authority for the purposes of this Contract as  43


is specified in the relevant Delegation of Authority in respect of that
team member issued by the Authority and copied to the Contractor.  1.5.3.2Individual 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.  1.5.3.3All 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.  1.5.4Extent 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:  1.5.4.1agree any variation or amendment to this Contract; or  1.5.4.2agree to any material waiver by the Authority or the Contractor (as the
case may be) of any term of this Contract.  1.6Liaison with Regulators  1.6.1Communicationswith Regulators  Save in relation to correspondence, orparts 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 shallpromptly 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.  1.6.2RegulatorMeetings  1.6.2.1The Contractor shall use all reasonable endeavours to give the Authority
prompt notice of all Regulator Meetings.  1.6.2.2Save 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).  1.6.2.3Whether 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  44


shall keep the Authority informed on a timely basis of the outcome of the
meeting.  1.6.3Notification 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.  1.7Site Meetings  1.7.1The
Authority shall be entitled to attend and participate in Site Meetings.  1.7.2The
Contractor shall:  1.7.2.1maintain a timetable of all Site Meetings; and  1.7.2.2give the Authority reasonable notice of all proposed Site Meetings in
order to enable the Authority to attend.  1.8Other 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.  1.9Force
Majeure  1.9.1Performance ofObligations  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.  1.9.2Notification and Mitigation  45


1.9.2.1The Affected Party shall, as soon as reasonably practicable, on becoming
aware of a Force Majeure Event, notify the other Party in writing of:  1.9.2.1.1the nature of the Force Majeure Event relied on;  1.9.2.1.2the estimated effect of the Force Majeure Event on the Affected Partys
ability to perform its obligations under this Contract; and  1.9.2.1.3the period for which it is estimated the Force Majeure Event will
continue.  1.9.2.2As 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.  1.9.3The Affected Party shall:  1.9.3.1use all reasonable endeavours to minimise the effects of the Force
Majeure Event on the performance of its obligations under this Contract;  1.9.3.2where 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;  1.9.3.3so 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;  1.9.3.5where 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;  1.9.3.6As soon as reasonably practicable after the cessation of a Force Majeure
Event, the Affected Party shall notify the other Party in  46


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  1.9.3.7For 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.  1.9.4Long 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.  1.9.5Requirement 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.  1.10Emergency
Action  The Contractor shall be entitled to
take Emergency Action at any time notwithstanding the other provisions of this
Contract.  1.11Warranties  1.11.1Authority Warranties  Without prejudice
to any warranties or conditions either express orimplied by any applicable Law, the Authority warrants and undertakes
that as at the Commencement Date:  1.11.1.1it 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  1.11.1.2has taken all necessary action to authorise the execution and the
performance of its obligations under this Contract.  47


1.11.2Contractors Warranties  Without prejudice
to any warranties or conditions either express orimplied by any applicable Law, the Contractor warrants and undertakes
that as at the Commencement Date:  1.11.2.1it 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  1.11.2.2has taken all necessary action to authorise the execution and the
performance of its obligations under this Contract.  1.12Severability  1.12.1If 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.  1.12.2The 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.  1.13Notices
and Communications  1.13.1A 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.  1.13.2All 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.  48


1.13.3If an electronic mail address has been provided pursuant to Clause
1.13.1 the following Notices may be sent by electronic mail:  1.13.3.1electronic transmittal of a scanned image of an original executed
Notice;  1.13.3.2day-to-day communication in connection with this Contract and the
documents referred to in it; and  1.13.3.3Authority 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).  1.13.4In 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.  1.13.5Subject to Clause 1.13.4, a Notice is deemed to be received:  1.13.5.1where delivered by hand, upon delivery at the address of the addressee;  1.13.5.2where 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;  1.13.5.3where 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  1.13.5.4where 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.  1.13.6A 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.  1.13.7Notwithstanding 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.  49


1.14Waiver  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.  1.15Entire
Agreement  1.15.1Each 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.  1.15.2The Contractor confirms that:  1.15.2.1in 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  1.15.2.2in 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).  1.15.3The Authority confirms that:  1.15.3.1in 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  1.15.3.2in 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  50


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).  1.16Corrupt
Gifts  1.16.1Contractor 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.  1.16.2Remedies  1.16.2.1If 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.  1.16.2.2If 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.  1.16.2.3If 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.  1.16.2.4If 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.  1.16.2.5If 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.  1.16.2.6Any notice under this 1.16 (Corrupt Gifts) shall specify:  1.16.2.6.1the nature of the Prohibited Act; and  1.16.2.6.2the identity of the person whom the Authority believes has committed the
Prohibited Act.  51


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.  1.16.2AThe 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.1The 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.  1.17Variation  1.17.1Except 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.  1.18Assignment  1.18.1Subject 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.  1.18.2The 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.  1.19Contracts
(Rights of Third Parties) Act 1999  No term of this Contract is
enforceable under the Contracts (Rights of Third Parties) Act 1999 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.  52


1.20Shared
Services  1.20.1The 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:  1.20.1.1The Contractor agrees to use its reasonable endeavours to assist the
Authority with the development and implementation of the Shared Services
Project;  1.20.1.2The 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.  1.20.2Section 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.  1.20.2For 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.  1.20.3The requirements described in clause 1.20.2 are that:  1.20.3.1the Future Transfer Scheme(s) is/are designed to facilitate the
Shared Services Project;  1.20.3.2the 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  1.20.3.3the Future Transfer Scheme(s) does/do not operate to alter the
Parties to this Contract or the Parent Body Agreement.  1.20.4The 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) Act 1999.  1.21Consents   1.21.1No Exclusion or Limitation  1.21.1.1Neither 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  53


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:  1.21.1.2exclude or limit any of the Contractors obligations or liabilities
under or in connection with this Contract; or  1.21.1.3affect 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).  1.21.1.4Subject 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.  1.21.1.5The 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.  1.21.2Examination  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.  1.21.3Inspections  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.  1.21.4Contractor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.  1.22Approvals  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  54


accordance with Paragraph 3.11.4.1
of Part 2 of the Finance Schedule (Use of Performance Based Incentives).  1.23Counterparts  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.  1.24Governing
Law and Jurisdiction  1.24.1This Contract shall be governed by, and construed in accordance with
the laws of England and Wales.  1.24.2Subject 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:  1.24.2.1agrees to submit to the exclusive jurisdiction of the courts of England
and Wales; and  1.24.2.2waives 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  1.25Claims
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.  1.26LC35  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.  1.27Knowledge
Management  1.27.1The 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.  55


1.27.2The Contractor acknowledges and agrees that adoption and compliance
with the Contractor Knowledge Management Policy will facilitate:  1.27.2.1the 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;  1.27.2.2a systematic and organised attempt to use knowledge within the
Contractors organisation to transform its ability to store and use knowledge
to improve performance.  56


PART 2 : CONTRACTORS OBLIGATIONS  2.1Nature of Contractors Obligations  The Contractor
shall:  2.1.1without 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);  2.1.2keep the Sites secure in accordance with the Internal Procedures
relating to safety and Site security;  2.1.3comply with all applicable Law;  2.1.4comply with all applicable Regulatory Requirements
;  2.1.5meet Historical Costs in accordance with Clause 6.5
and 6A.5 Historical Costs  2.1.6comply with Clause 2.2 (Standard of Performance);  2.1.7comply with the Customer Contracts in accordance
with their terms;  2.1.8be aware and, where appropriate have reasonable
regard to the Authority Policies and Procedures;  2.1.9except 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  2.1.10subject 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.  2.2Standard of Performance  The Contractor
shall comply with its obligations under this Contract:  2.2.1in a safe, secure, efficient and
cost effective manner; and  2.2.2exercising 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  57


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:  2.2.2.1Regulatory Requirements,
the only regulatory standards against which the Contractor will be judged under
this Contract will be those related to the United Kingdom; and  2.2.2.2Analogous 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  2.2.3in a transparent and co-operative
manner with both the Authority and the Regulators; and  2.2.4ensuring that all aspects of any
works, services or undertakings comply with the requirements of this Contract;
andensuring 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  2.2.5in 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  2.2.6in 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  2.2.7in 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).  2.3No activities outside current Contract Year of LTP  2.3.1In 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  58


performance of this Contract in the
relevant Contract Year (except in relation to meeting Historical Costs and
other Transitional Activities),  unless:  2.3.1.1the 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  2.3.1.2the Contractor is permitted to do so pursuant to Part 1 (Statement
of Work) of the Lifetime Plan Schedule.  2.3.1.3the Contractor is directed to do so pursuant to a direction issued by
the Authority in accordance with Clause 3.1 (Authority Directions); or  2.3.1.4the 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  2.3.1.5the Contractor is obliged to do so or has the right to do so under the
Records Agreement; or  2.3.1.6the Authority otherwise agrees in
writing and in such terms as the Authority determines.  2.3.1.7such 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).  2.3.2For the avoidance of doubt:  2.3.2.1the 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  2.3.2.2the 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  2.3.2.3Category III Changes (which do not
require the prior approval of the Authority) shall not constitute a breach of
Clause 2.3.1; and  2.3.2.4the Contractor may carry out any
works, operations, services or other activities which constitute an Emergency
Action.  59


2.3.3Cost 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:  2.3.3.1the Costs incurred which shall be
Disallowable Costs in accordance with Part 4 of the Finance Schedule
(Costs Principles and Procedures); and  2.3.3.2any 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.  2.4Quality Management System  2.4.1The 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.  2.4.2The 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.  2.4.3The 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.  2.4.4The 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.  2.4.5When responding to any Contractor
request for the Authoritys approval of changes to the Contractors quality
management systems, the Authority shall:  2.4.5.1respond in writing and without
unreasonable delay; and  60


2.4.5.2provide reasons for any
determination that the Contractors proposed changes to its quality management
systems are unsuitable.  2.4.6For 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.  2.5Socio-Economic Development  2.5.1The 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.  2.5.2No 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:  2.5.2.1the events, activities or functions
which the Contractor intends to fund pursuant to its obligations under Clause
2.5.1 above;  2.5.2.2the costs of these intended events,
activities or functions;  2.5.2.3the reasons for the selection of
these events by the Contractor; and  2.5.2.4the 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.  2.5.3Within 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:  2.5.3.1respond in writing and without
unreasonable delay;  2.5.3.2provide reasons for any
determination that the Contractors proposed events, activities or functions
are unsuitable; and  61


2.5.3.3not wilfully impede the Contractor
from being able to comply with any schedule set out in such Socio-Economic
Development Plan.  2.5.4Once 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.  2.6Setting The LTP And Change Control  2.6.1The 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).  2.6.2If 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).  2.7Subcontracting/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).  2.8Contractors
Internal Procedures  2.8.1The
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).  2.8.2The
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.  2.8.3When
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.  2.8.4The
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.  2.8.5Failure
to comply with an Authority Internal Procedure change request  If the Contractor:  62


2.8.5.1fails to comply with the Authoritys
request to introduce a new Internal Procedure within the time specified in
Clause 2.8.4; and/or  2.8.5.2fails 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).  2.9Inter-SLC
Service Contracts  2.9.1To
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  2.9.1.1where 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.  2.9.1.2where 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.  2.9.2Each
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.  2.9.3Compliance  The Contractor shall:  2.9.3.1perform its responsibilities as set out in the
Inter-SLC Service Contracts; and  63


2.9.3.2ensure 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.  2.9.4Review of Inter-SLC Service Contracts  2.9.4.1If 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.  2.9.4.2The 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  2.9.4.3The 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:  2.9.4.3.1the grounds upon which the change is requested;  2.9.4.3.2the nature of the change requested and to whose
responsibilities; and  2.9.4.3.3the 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.  2.9.4.3.4Upon 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).  2.9.4.3.5In 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  64


relevant
Inter-SLC Service Contracts and those obligations and duties.  2.9.4.4Confirmation 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).  2.9.4.5Failure 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  2.9.4.5.2fails 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  2.9.4.5.3fails 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).  2.10Assumption
of Existing Agreements  2.10.1Subject 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.  2.10.2Within ninety
(90) Calendar Days of the Commencement Date, or such later date as the
Authority may determine and notify to the Contractor, the  65


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).  2.10.3If 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.  2.10.4If, 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.  2.11Health and Safety  2.11.1Where the CDM Regulations are applicable to
any project which is being carried out pursuant to this Contract:  2.11.1.1the 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;  2.11.1.2the Contractor:  2.11.1.2.1shall, 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  2.11.1.2.2where 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  66


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.  2.11.1.4if 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:  2.11.1.4.1the Contractor shall be subject to
such requirements and prohibitions as are placed by CDM 2007 on the Authority;  2.11.1.4.2the 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  2.11.1.4.3the 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.  2.11.2The Contractor shall observe,
perform and discharge and shall procure the observance, performance and
discharge of:  2.11.2.1all the obligations, requirements
and duties arising under the CDM Regulations in connection with any project;
and  2.11.2.2any code of practice for the time
being approved by the Health and Safety Commission pursuant to the Health and
Safety at Work etc. Act 1974 in connection with the CDM Regulations.  2.11.3In 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.  67


PART 3:  RIGHTS AND OBLIGATIONS OF AUTHORITY  3.1Authority Directions  3.1.1Nothing in this Clause 3.1 shall, or is
intended to:  3.1.1.1bind the Authority as to the
particular manner in which any statutory power is exercised in the future;
and/or  3.1.1.2otherwise act as a fetter on
the future discretion of the Authority in exercising its rights or acting in
accordance with its obligations.  3.1.2Without 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:  3.1.2.1a Contractor Default has
occurred; and/or  3.1.2.2an Authority Default has
occurred or the Authority has otherwise given a termination notice in
accordance with Clause 12.8 (Termination for Convenience); and/or  3.1.2.3at 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  3.1.2.4at 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.  3.1.3For 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:  3.1.3.1the 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);  3.1.3.2the 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  68


3.1.3.3the Authority shall, when
giving any Authority Direction, act in accordance with its powers under the
Energy Act.  3.2Compliance 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  3.3.1Without prejudice to Clause 3.1 (Authority
Directions), and its rights under this Contract, the Authority shall:  3.3.1.1co-operate with the Contractor
to facilitate the performance of its obligations under this Contract; and  3.3.1.2not wilfully impede the
Contractor in performing its obligations under this Contract.  3.3.2The 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 Clause3.3.1 above in any material
respect.  3.4Authority responses  3.4.1Unless 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.  3.4.2Where 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.  3.5Failure of Performance  If at any time during the period of
this Contract, either Party becomes aware of:  3.5.1a failure by the other Party to perform any
obligations to which it is subject pursuant to this Contract; and/or  3.5.2a 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.  69


3.6.Authority Rights In Respect Of
Customer Contracts  3.6.1New Business and Amendments to Customer
Contracts  3.6.1.1Except 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).  3.6.1.2In 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).  3.6.2Authority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:  3.6.2.1whether or not to exercise any
rights under the relevant Customer Contract (including any rights to
terminate);  3.6.2.2whether 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;  3.6.2.3choosing between any options
that arise concerning the manner in which the Contractor could perform the
relevant Customer Contract;  3.6.2.4when the Contractor is
uncertain about what it is required to do under the relevant Customer Contract;  3.6.2.5how 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.  3.6.3Authoritys right to instruct  3.6.3.1Notwithstanding 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  70


relation to any of the Customer Contracts
including requiring the Contractor to:  3.6.3.1.1seek 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;  3.6.3.1.2resist an
amendment proposed by a counterparty to the relevant Customer Contract;  3.6.3.1.3enter or not
enter into a New Customer Contract in accordance with timescales, with
counterparties and on terms specified by the Authority;  3.6.3.1.4enforce or not
enforce the counterpartys obligations under a Customer Contract;  3.6.3.1.5terminate or
not terminate a Customer Contract;  3.6.3.1.6waive or not
waive any of the counterpartys obligations under a Customer Contract.  3.6.3.2If 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.  3.6.3.3If 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).  3.6.4Permitted Activities  3.6.4.1Subject 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:  3.6.4.1.1no New Customer Contract or no
Amendment (as the case may be) contains any term which:  71


3.6.4.1.1.2provides 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;  3.6.4.1.1.3directly or indirectly
excludes or attempts to exclude any right of the Authority which arises under
the Contracts (Rights of Third Parties) Act 1999 or in any other way seeks to
prevent the Authority from enforcing the terms of the Customer Contract;  3.6.4.1.2Not used  3.6.4.1.3Not used  3.6.4.1.4any New Customer Contract
includes:  3.6.4.1.4.1provisions 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;  3.6.4.1.4.2an 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;  3.6.4.1.4.3an 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);  3.6.4.1.4.4if 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;  3.6.4.1.4.5an obligation on the
counterparty to the Customer Contract to permit the Authority to  72


attend meetings between the
Contractor and the Customer and/or Customer Groups;  3.6.4.1.4.6a 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;  3.6.4.1.4.7a 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,  3.6.4.1.5that 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.  3.6.4.1.6where 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;  3.6.4.2In 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.  3.6.4.3Notwithstanding 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  73


Part 3
of the Programme Management Schedule (Project Validation and Financial
Sanction).  3.6.4.4The 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.  3.6.4.5Subject 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.  3.6.4.6If 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).  3.6.4.7The 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).  3.6.4.8If 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.  3.6.4.9For 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).  3.7Customer 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:  3.7.1any New Customer Contract;  3.7.2any Amendment;  74


3.7.3any exercise of the Contractors
discretion under a Customer Contract; and  3.7.4any exercise of the Authoritys
right to instruct pursuant to Clause 3.6.3 (Authoritys Right to Instruct),  from the initiation of the issue
or matter until such issue or matter is executed, carried out, rejected,
abandoned or resolved (as the case may be) in each case recording the date of
any relevant issue or matter and the Contractors, Authoritys and/or
counterpartys action, inaction or response as applicable.  3.8Customer
Contracts Option  3.8.1The Parties
acknowledge that the Authority may request that the Secretary of State makes a
Future Transfer Scheme to transfer the property, rights or liabilities of the
Contractor under the Customer Contracts to the Authority.  By virtue of Section 40(2) of the
Energy Act, 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.  3.8.2Where a Future
Transfer Scheme has been proposed by the Secretary of State, under which only
the property, rights or liabilities of the Contractor under some or all of the
Customer Contracts are proposed to be transferred to the Authority by virtue of
Section 40(2) of the Energy Act, the Contractor agrees that it will
consent to such a Future Transfer Scheme (and such consent will constitute consent
in accordance with a nuclear transfer scheme) for the purposes of Section 40(2) of
the Energy Act.  3AFINANCIAL
MATTERS RELATING TO ESTL  3A.1All Trading Costs and Allowable Costs incurred or Incentive
Fee earned by the Contractor or ESTL in performance of the Trading Activities,
the Advisory Activities and the Agency Activities undertaken prior to the ESTL
Transfer Date in accordance with the relevant NTWP(s) applicable prior to
the ESTL Transfer Date shall be met by the Authority in accordance with and
subject to the terms of this Contract, whether falling due, before or after the
ESTL Transfer Date.  3A.2All Trading Costs incurred in respect of the Generation
Activities undertaken prior to the Effective Date in accordance with the
relevant NTWP(s) applicable prior to the Effective Date shall be met by
the Authority in accordance with and subject to the terms of this Contract,
whether falling due before or after the Effective Date.  3A.3Any costs incurred by the Contractor as a result of
complying with its obligations underPart 1
(Allocation of Responsibilities under Industry Documents) of the Electricity
Interface Obligations Schedulewhich are outside the relevant Sites
NTWP shall nevertheless be Allowable, provided that:-  3.A.3.1the
Contractor did not undertake the relevant activity which results in such costs
prior to the ESTL Transfer Date otherwise than in accordance with the relevant
NTWP(s) in existence at that time; and  75


3.A.3.2the
Contractor complies with the provisions of Part 2 of the Programme
Management Schedule (Setting the LTP and Change Control) in respect of such
costs.  3A.4Without prejudice to the Contractors or ESTLs (as
applicable) other obligations under this Contract, the Contractor or ESTL (as
applicable) having incurred Trading Costs shall not, in itself, constitute a
breach of Clause 2.3.  3A.5All costs reasonably
incurred in the first three Months following the ESTL Transfer Date by the
Contractor and / or ESTL in respect of the winding up of ESTL or in respect of
complying with its obligations under Clause 3E (Advisory Activities Transition)
of this Contract (including, in each case, costs relating to the secondment of
the Contractors employees to ESTL) shall be deemed to be Allowable Costs under
this Contract.  Following the expiry of
that three Month period, costs reasonably incurred by the Contractor and / or
ESTL in respect of the winding up of ESTL, other than costs relating to the
Contractors employees seconded to ESTL, shall be Allowable Costs under this
Contract. Provided that where any of the costs referred to in this clause 3A.5
are incurred in the performance of activities which are outside the relevant
Sites NTWP, the Contractor shall comply with the provisions of Part 2 of
the Programme Management Schedule (Setting the LTP and Change Control).  3B:ELECTRICITY INTERFACE
OBLIGATIONS  3B.1The Authority shall fulfil its
obligations and shall procure that British Energy Trading Services Limited
fulfils its obligations as set out inPart 1
(Allocation of Responsibilities under Industry Documents) of the Electricity
Interface Obligations Schedule.  3B.2The Contractor shall fulfil its
obligations as set out inPart 1 (Allocation of
Responsibilities under Industry Documents) of the Electricity Interface
Obligations Schedule.  3B.3The Authority shall be relieved
from its obligations, and from procuring that British Energy Trading Services
Limited fulfils its obligations, as set out inPart 1
(Allocation of Responsibilities under Industry Documents) of the Electricity
Interface Obligations Schedule, or part thereof, to the extent that the Authority and/or British Energy
Trading Services Limited is unable to fulfil those obligations as a result of
the Contractors failure to fulfil its obligations inPart 1 (Allocation of Responsibilities under Industry Documents) of
the Electricity Interface Obligations Schedule.  3B.4The Contractor shall be relieved
from its obligations as set out inPart 1 (Allocation of
Responsibilities under Industry Documents) of the Electricity Interface
Obligations Schedule, or part thereof, and shall not have any other liability to the
Authority under this Contract in respect of any breach of those obligations, in
each case to the extent that the Contractor is unable to fulfil its obligations
under this Contract as a result of the Authoritys failure to fulfil its
obligations and/or the Authoritys failure to procure the fulfilment by British
Energy Trading Services Limited of its obligations inPart 1 (Allocation of Responsibilities under Industry Documents) of
the Electricity Interface Obligations Schedule.  76


3B.5The Authoritys Right to Instruct  3B.5.1The Authority shall be entitled to amend the Parties
obligations as set out in Part 1 (Allocation of Responsibilities under
Industry Documents) of the Electricity Interface Obligations Schedule where, in
the Authoritys reasonable opinion, such amendment:  (A)is required to reflect the
Authoritys obligations and/or British Energy Trading Services Limiteds
obligations under the Trading Contract;  (B)would materially enhance the
Contractors and/or the Authoritys and/or British Energy Trading Services
Limiteds ability to fulfil its obligations as set out inPart 1 (Allocation of Responsibilities under Industry Documents) of
the Electricity Interface Obligations Schedule; or  (C)would materially enhance the
Authoritys ability to fulfil its obligations to any other SLC.  3B.5.2The Authority (acting reasonably) shall submit its
instructions in respect of an amendment to Part 1 (Allocation of
responsibilities under Industry Documents) of the Electricity Interface
Obligations Schedule to the Contractor setting out:  (A)the grounds upon which the
instruction is given; and  (B)the amendments required.  The instructions of the Authority in respect of
such an amendment shall take into account the obligations and duties placed on
the Contractor by applicable Law and Regulatory Requirements (including
applicable requirements under the Industry Documents to which the Contractor is
a party), in order to avoid conflict between such instructions and those
obligations and duties.  3B.5.3Any instruction issued by the Authority pursuant to
this Clause 3D.5 shall be deemed to be a Change directed by the Authority and
the Contractor shall be entitled to prepare and submit to the Authority a
Change proposal in accordance with Part 2 of the Programme Management
Schedule (Setting the LTP and Change Control).  3CADVISORY ACTIVITIES
TRANSITION  3C.1For a period of three Months
from the ESTL Transfer Date, ESTL shall be required to use its reasonable
endeavours:  3C.1.1in the event that the
Authority appoints, or proposes to appoint, any advisors to provide it with
some or all of the Advisory Activities or any other Advisory Activities of a
similar nature either in conjunction with, separate from or in place of ESTL
(an Incoming Advisor), to
co-operate with the Authority and any Incoming Advisor in order to effect an
orderly transfer of the provision of such Advisory Activities to the Authority
from ESTL to the Incoming Advisor;  3C.1.2save to the extent that ESTL
must comply with applicable Law and Regulatory Requirements, not to take any
action which is intended to prevent, prejudice or frustrate the transition
between ESTL and the Incoming Advisor;  77


3C.1.3if the Authority appoints, or
proposes to appoint, an Incoming Advisor,:  3C.1.3.1subject to the provisions of Part 10
(Confidentiality, Security and Compliance with Law), and if so requested by the
Authority, to provide the Authority and/or an Incoming Advisor with access to
the personnel of ESTL and all books, records and other materials kept by or on
behalf of ESTL in connection with its provision of the Advisory Activities for
the purpose of assisting the Authority and/or an Incoming Advisor in relation
to any tender process regarding the selection of an Incoming Advisor; and  3C.1.3.2to make available to the
Authority and/or an Incoming Advisor such information (including, without
limitation, computer models and financial and operational information) as the
Authority and/or an Incoming Advisor reasonably require in connection with the
selection of an Incoming Advisor and on an ongoing basis following the
appointment of an Incoming Advisor, and to assist in the verification of the
information.  PART 4 PERFORMANCE MANAGEMENT, PERFORMANCE ASSURANCE AND RECORDS  4.1Reporting And Reviewing  4.1.1Reporting and
Reviewing Programme  The Contractor shall implement
systems and processes on the Sites for a performance reporting and reviewing
programme in a manner reasonably satisfactory to the Authority,  4.1.2Required
Reports  The Contractor shall submit to the
Authority:  4.1.2.1a Monthly Progress Report containing the information
required by the Authority procedures contained in Part 1 of the Programme
Management Schedule (Programme Controls) for each Site and in consolidated
format for the Sites in electronic format and in a form reasonably satisfactory
to the Authority; and subject to Paragraph 2 Part 1 of the Programme
Management Schedule (Programme Controls) such other information as the
Authority may from time to time reasonably require and notify to the Contractor.The Contractor shall provide the
Reports listed at Schedule 13 (Reporting Schedule)  4.1.2.2such other reports as may be agreed between the
Authority and the Contractor prior to each Contract Year; and  4.1.2.3such other reports as may
reasonably be requested by the Authority in connection with its statutory
functions and duties from time to time in writing; and  4.1.2.4the Monthly
Progress Report shall include notification to the Authority once 75% of the SLC
Annual Funding Limit and/or any ASFL and/or each PSWBS category level has been
spent.  78


4.1.3Objections to Reports  4.1.3.1If the Authority considers that
any Report either has not been compiled in accordance with the requirements of
this Contract or has been based on erroneous information or data, it may serve
a notice to that effect on the Contractor within thirty (30) Calendar Days of
receipt of the Report, objecting to it and the Parties shall endeavour to agree
any consequent amendments to the Report in the light of the Authoritys
objections.  4.1.3.2If any such objection has not been
resolved by agreement between the Authority and the Contractor within sixty
(60) Calendar Days after service of such notice, the matter shall be resolved
in accordance with Part 13 ( Dispute Management).  4.1.3.3If, following the submission of
any Report, but prior to any objection raised by the Authority pursuant to this
Clause 4.1.3 (Objections to Reports), the Contractor considers that such Report
contains a material error, the Contractor shall notify the Authority
immediately of such error and shall reflect and clearly identify upon becoming
aware the required correction(s) in the relevant subsequent Report where
applicable (for example the next monthly report of the same type). If there
will be no subsequent Report submitted to the Authority (for example because
the original report was not of a type regularly required), the Contractor shall
correct the relevant original Report as soon as reasonably practicable and in
any event in accordance with any applicable Authority procedures as set out in Part 1
of the Programme Management Schedule (Programme Controls).  4.1.4Revisions to Reports  If;  4.1.4.1the resolution (whether by
agreement or determination in accordance with Part 13 (Dispute Management)
of any objection made pursuant to Clause 4.1.3 (Objections to Reports); or  4.1.4.2the correction of any calculation
pursuant to any provision of this Contract,  in either case
requires corrections to be made to any Report submitted by the Contractor
pursuant to Clause 4.1.2 (Required Reports), the Contractor shall reflect and
clearly identify the required
corrections in the relevant subsequent Report (for example the next monthly
report of the same type) where applicable. If there will be no subsequent
Report submitted to the Authority (for example because the original report was
not of a type regularly required), the Contractor shall correct the relevant
original Report and re-submit to the Authority and the provisions of Clause
4.1.3 (Objections to Reports) and this Clause 4.1.4 (Revisions to Reports)
shall apply in respect of the re-submitted Report.  79


4.1.5Obligation to Report  4.1.5.1Without prejudice to any other obligation on the Contractor under this
Contract to report and notwithstanding the Contractors right to carry out
Permitted Activities, the Contractor shall, as often as reasonably necessary to
keep the Authority properly and fully informed and on a regular basis, notify
the Authority in as much detail as practicable of any matters of which the
Contractor becomes aware, which have affected, or which may affect, the
Commercial Operations Tasks and/or the Customer Contracts and about which the
Authority may reasonably be expected to wish to be informed including (and
without prejudice to the generality of this Clause 4.1.5):  4.1.5.1.1any breach or impending breach by the Contractor
and/or the counterparty to any Customer Contract;  4.1.5.1.2any impending event that will require the Authoritys
consent under Clause 3.6 (Authority Rights in respect of Customer Contracts);  4.1.5.1.3any exercise of the Contractors Permitted
Activities;  4.1.5.1.4any material change in the financial position of a
counterparty to a Customer Contract;  4.1.5.1.5any change or impending change in the business
strategy of a counterparty to a Customer Contract;  4.1.5.1.6any Change in Control of a counterparty to a
Customer Contract particularly where such change in Control will or is likely
to adversely affect the counterpartys financial position or future performance
under the Customer Contract(s) to which it is a party;  4.1.5.1.7any change to the key management personnel with whom
the Contractor liaises which might adversely affect the future business
relationship with the counterparty to the Customer Contract;  4.1.5.1.8any actual or threatened labour disputes affecting
the counterparty to the Customer Contracts;  4.1.5.1.9any change in the policy of other public authorities
including, in particular, public authorities outside the United Kingdom, which
might adversely affect the performance of the Customer Contracts or the
Contractors relationships with counterparties to the Customer Contracts;  4.1.5.1.10any issue which affects or may affect the supply
chain under any Subcontract or Series of Subcontracts which relate(s) to
the Customer Contracts.   4.1.5.2The Contractor shall also forthwith report to the Authority any exercise
of its right:  80


4.1.5.2.1to challenge any threatened or actual revocation of
a Nuclear Site Licence or any other regulatory permit or consent which is
essential to the Contractors ability to operate the Sites or carry out the
Commercial Operations Tasks in accordance with Law; or  4.1.5.2.2to apply for, or resist, or join into an injunction
which the Contractor, acting reasonably, considers urgent and necessary to the
Contractors performance of its obligations to the Authority. 4.2Records  4.2.1Required Records  The Contractor
shall hold and make the following records available to the Authority in
accordance with the open access, inspection and audit rights set out Clause 4.5 (Inspection and Audit).  4.2.1.1all statutory and, regulatory records and reports required to be kept
(and/or submitted to the Regulators) by the Contractor in its capacity as
employer, as nuclear site licensee and as holder of any permit, consent or
other authorisation issued by any Regulator;  4.2.1.2books of account and other information set out in Clause 4.2.2 (Books of
Account and Other Information); and  4.2.1.3such other information as would normally be expected to be created,
received and maintained as evidence and information by an organisation or
person carrying on the business of the Contractor in pursuance of legal
obligations or in the transaction of business which is not already required to
be kept by the Contractor pursuant to Clause 4.2.1.1 or Clause 4.2.1.2 and
which may be reasonably required by the Authority from time to time in order to
comply with its statutory functions and/or duties or otherwise,  (together the Records) in such condition, format and detail as is
suitable for their intended purpose, or in relation to Clause 4.2.1.3 above as
required by the Authority, and for the period specified in Clause 4.3
(Retention of Records).  4.2.2Books of Account and Other Information  4.2.2.1Books of Account  The Contractor shall maintain, on a current and accurate basis,
books of account relating to its activities under this Contract in accordance
with:  4.2.2.1.1UK generally accepted accounting practice (UK GAAP),
consisting of all extant Statements of Standard Accounting Practice (SSAPs),
Financial Reporting Standards (FRSs), Urgent Issues Task Force Abstracts and
any relevant industry-specific authoritative guidance; or  81


4.2.2.1.2international generally accepted accounting
practice, comprising to the extent adopted by the European Commission, all
extant International Financial Reporting Standards (IFRSs), International Accounting
Standards (IASs), interpretations of the International Financial Reporting
Interpretations Committee and its predecessor body, and other relevant
industry-specific authoritative guidance; and  4.2.2.1.3the Companies Act 1985; and  4.2.2.1.4Part 4 of the Finance Schedule (Costs
Principles and Procedures); and  4.2.2.1.5an Open Book System.  4.2.2.2Further Information  Without prejudice to information
provided by the Contractor to the Authority pursuant to this Contract the
Contractor shall, provide to the
Authority such further information as the Authority may at any time reasonably
request on reasonable notice.  4.2.2.3Financial Information  Without prejudice to the generality
of Clause 4.2.2.2 (Further Information),the Contractor shall furnish to the Authority as soon as they become
publicly available and, in any event, not later than ninety (90) Calendar Days
after the close of its statutory accounting period a copy of the audited
financial statements of the Contractor, prepared in accordance with UK
generally accepted accounting principles and practices for such period,
including in each case a balance sheet prepared as at the end of such
accounting period, a profit and loss account, cash flow statement in respect of
such accounting period and a reconciliation of total Allowable Costs claimed
within such accounting period.  4.2.2.4Authority Accounts  The Contractor
shall maintain, in accordance with the Authoritys reasonable instructions from
time to time including as to its then current accounting policy, on a current and accurate basis
books of account recording the Authoritys interest in the Authority Assets and
the Sites and any associated liabilities.  4.3Retention of Records  The Contractor
shall retain all Records for either:  4.3.1a period of twelve (12) years
after the expiry or earlier termination of this Contract or such longer period
as may be required by applicable Law or Regulatory Requirement; or  82


4.3.2in relation to certain Records as
identified by the Authority and notified to the Contractor from time to time,
for such longer period as may reasonably be required by the Authority.  4.4Information Asset Register  4.4.1The Authority shall create and
then maintain an accurate Information Asset Register within eighteen (18)
months of the Commencement Date.  4.4.2In respect of the Sites, the
Contractor shall submit to the Authority such metadata as is required by the
Authority (acting reasonably) for the Information Asset Register via electronic
transfer at such intervals as are notified to the Contractor by the Authority,
acting reasonably, and shall ensure that all such metadata conforms to the
e-Government Metadata Standard (e-GMS).  4.4.3To the extent that the Authority considers,
in its absolute discretion, that any metadata to be contributed by the
Contractor pursuant to Clause 4.4.2 above should be protectively marked, the
Authority shall inform the Contractor of the method by which the Authority
requires the Contractor to deliver such protectively marked metadata.  4.5Inspection and Audit  4.5.1Site Access  Subject to compliance with applicable Law and Regulatory Requirements
and the Contractors Internal Procedures relating to safety and Site security,
the Authority and its duly authorised representatives (including advisers,
consultants, and agents on behalf of the Authority) (together Authority Agents) shall have the right,
whether required by the National Audit Office or otherwise, to enter at all
times onto all parts of the Sites and their facilities, installations,
structures and outbuildings and, in respect of the Commercial Operations Tasks,
any other areas and locations which the Contractor uses in its performance of
such Commercial Operations Tasks.  4.5.2Inspection and Audit  4.5.2.1Subject to Clause 4.5.3 below, the Authority and any Authority Agent,
acting reasonably, and subject to compliance with all applicable Law and
Regulatory Requirements and the Contractors Internal Procedures, relating to
safety and Site security, shall be entitled to carry out for the purpose of
fulfilling the Authoritys statutory functions and duties and contractual
rights pursuant to this Contract:  4.5.2.1.1any audit, inspection, review, periodic monitoring
and spot checks of any of the Contractors activities in connectionwith this
Contract and any aspect of the Contractors performance of this Contract as
required by the Authority or where the same shall have been requested by the
National Audit Office or otherwise;  4.5.2.1.2audits, inspections, reviews, periodic monitoring
and spot checks of all information required to be kept by the Contractor;  83


4.5.2.1.3audits of the Contractors compliance with its
Inter-SLC Service Contracts, Internal Procedures, quality management systems,
procedures required by Regulatory Requirements and any operating procedures,
policies or standards ancillary to, or used in connection or accordance with,
the same;  4.5.2.1.4inspections and tests to determine the quality of
any of the Tasks performed or procured;  4.5.2.1.5interviews with any employees, secondees or other
personnel of the Contractor and, to the extent that the Contractor is able to
procure it, with the counterparties to the Customer Contracts and any officers,
employees or personnel of such counterparties; and  4.5.2.1.6the copying and collation of any information held in
electronic or paper form.  4.5.3The Authority and any Authority Agent shall be entitled to carry out the matters
referred to in Clause 4.5.2 above at any time or frequency, provided always
that the Authority or Authority Agent as applicable shall:  4.5.3.1act reasonably at all times; and  4.5.3.2use all reasonable endeavours to minimise any disruption to the provision
of the Tasks by the Contractor, a Subcontractor, or a Sub-Sub-Contractor as
applicable.  4.5.3.3For the purposes of Clause 4.5.2.1 above, the Contractor shall provide
all reasonable co-operation including:  4.5.3.3.1granting, or procuring the grant of timely access to
any equipment (including all computer hardware and software and databases) used
in the performance of this Contract, wherever situated. To the extent that such
access is required to equipment which does not belong to the Contractor or
access is not within the Contractors control, the Contractor shall (and shall
only be obliged to) use all reasonable efforts to procure such access;  4.5.3.3.2granting timely access to any data dictionary and
the fields and records within it to enable data to be downloaded from any
computer systems operated by the Contractor; and  4.5.3.3.3ensuring that appropriate security systems are in
place to prevent unauthorised access to, extraction of and/or alteration of
information during the audit.  4.5.4The Contractor agrees that the Comptroller and Auditor General shall, and
for the purposes of Clause 4.5.2.1 above, the Authority and any Authority Agent
shall have access to such of the Contractors facilities, information, books of
account, Records and other documentation (including any stored in  84


electronic form) (Data) andpersonnel as they reasonably
consider necessary for the performance of their duties to the extent allowed
under the DPA.  4.5.5The Contractor agrees that the
Authority and any Authority Agent shall be entitled to request and receive at
any time, a reasonable number of copies of any Data on demand, whether for the
purposes of this Contract or for any other reasonable purpose, including, but
not limited to, inviting tenders as part of a competition for the right to
manage and operate the Sites and carry out the Commercial Operation Tasks to
the extent allowed under the DPA.  4.5.6The Authority shall procure that
the Authority Agents shall be suitably qualified third parties entitled to have
the access rights and/or undertake any of the inspections or audits referred to
in this Clause 4.5 (Inspection and Audit) on the Authoritys behalf. Such
Authority Agents shall report their findings directly to the Authority. The
Contractor is entitled to object to the Authority use of any Authority Agent on
the grounds that such Authority Agent is a direct competitor of the Parent Body
Organisation in the field of nuclear decommissioning and clean up or any other
activities carried on at the Site under this Contract. If the Contractor so
objects, it must notify the Authority in writing specifying the reasons for
such objection and the Authority, acting reasonably, shall consider whether to
use a different Authority Agent.  4.5.7The Contractor shall:  4.5.7.1fully co-operate in relation to the provisions of this Clause 4.5
(Inspection and Audit);  4.5.7.2provide the Authority or any Authority Agent with all information
reasonably required in connection with the exercise of the Authoritys rights
under this Clause 4.5 (Inspection and Audit); and  4.5.7.3keep all records and other relevant documentation relating to the
Contractors quality management system and all information required to be held by
the Contractor in good order and in such form as to be capable of audit
(including by electronic means) by the Authority or by any Authority Agent and:  4.5.7.3.1make such records available for inspection by the
Authority or any Authority Agent at all reasonable times; and  4.5.7.3.2at the Authoritys or any Authority Agents request,
make available to the Authority or Authority Agent as applicable any software
necessary to review such records.  4.5.8The Authority shall:  4.5.8.1implement and maintain procedures for notifying all Authority Agents of
the Contractors Internal Procedures relating to safety and Site security;  85


4.5.8.2use reasonable endeavours to ensure that all Authority Agents comply with
the relevant rules and requirements;  4.5.8.3notify the Contractor that an Authority Agent acting on behalf of the
Authority in accordance with this Clause 4.5 (Inspection and Audit) is duly
authorised; and  4.5.8.4procure that the Authority Agent has, in the Authoritys reasonable
opinion, insurance that is adequate and suitable to accord with the rights of
access, audit and inspection that the Authority may grant to such Authority
Agent under this Clause 4.5 (Inspection and Audit).  4.5.9Provision of Facilities  4.5.9.1Subject to compliance with Regulatory Requirements, during any inspection
or audit of the Sites (pursuant to this Clause 4.5 (Inspection and Audit), the
Contractor shall (on request by the Authority or the Authority Agent) make available
such suitable office accommodation on the Sites (or, in respect of the
Commercial Operations Tasks, at any other locations which the Contractor uses
in its performance of such Commercial Operations Tasks) and such other
facilities as the Authority or Authority Agent may reasonably require for the
purposes of exercising the Authoritys rights of access, inspection and audit
pursuant to this Clause 4.5 (Inspection and Audit).  4.5.9.2All accommodation provided shall be adequately furnished, lit, heated and
ventilated and shall include suitable access to cloakrooms and IT and
communication facilities.  4.5.10Co-operation with Regulators  The Authority undertakes to the
Contractor that it will co-operate with the Regulators in exercising its rights
under this Contract and will use reasonable endeavours to synchronise the Authoritys audits and
inspections with those of the Regulators where reasonably practical.  4.5.11Examination by National Audit
Office  For the purpose of:  4.5.11.1the examination
and certification of the accounts of the Authority; or  4.5.11.2any examination
pursuant to Section 6(1) of the National Audit Act 1983, or any
re-enactment thereof, of the economy, efficiency and effectiveness with which
the Authority has used its resources.  the Comptroller and Auditor General may examine such documents relating
to expenditure and income as he may reasonably require which are owned, held or
otherwise within the control of the Contractor and may require the Contractor
to produce such oral or written explanations as he considers necessary.  The Contractor agrees that they will make
such documentation available to the Comptroller and Auditor General.  86


4.5.12Audit Findings and Corrective
Action  4.5.12.1The Contractor
shall be entitled to receive a copy of the Authoritys audit findings once
completed in relation to any audit carried out in accordance with this Clause
4.5 (Inspection and Audit), subject to any redaction reasonably requested by an
Authority Agent.  4.5.12.2Within thirty
(30) Calendar Days of the Contractors receipt of the audit findings, the
Parties shall hold an Audit Close-Out Meeting.  4.5.12.3At the Audit
Close-Out Meeting, and where applicable, the Contractor shall have the
opportunity to demonstrate to the satisfaction of the Authority that some or
all of the relevant audit findings are incorrect.  4.5.12.4If, at the
Audit Close-Out Meeting, the Authority considers that certain Corrective Action
is required, the Contractor shall within thirty (30) Calendar Days of the Audit
Close-Out Meeting (or such other date as agreed between the Parties) either:  4.5.12.4.1            carry out the Corrective Action; or  4.5.12.4.2propose to the Authority, and
obtain the Authoritys approval for, a plan for carrying out the Corrective
Action.  4.5.13Where the Contractor proposes a
plan for the Corrective Action in accordance with Clause 4.5.12.4.2 above, the
Authority shall have thirty (30) Calendar Days to notify the Contractor whether
it accepts such proposed plan for the Corrective Action (such acceptance not to
be unreasonably withheld). Failure of the Authority to provide such
notification within the above period shall constitute deemed acceptance by the
Authority. Where the Authority accepts or is deemed to accept the Contractors
plan the Contractor shall upon such acceptance or deemed acceptance implement
the plan for the Corrective Action. Where the Authority notifies the Contractor
that it does not accept the plan for the Corrective Action, the Parties shall
endeavour within the following thirty (30) Calendar Days to agree any necessary
amendments to the plan for the Corrective Action. In the absence of agreement
within such thirty (30) Calendar Day period, the question of whether or not the
Authoritys withholding of acceptance is reasonable may be referred by either
Party to be resolved in accordance with Part 13 (Dispute Management).  4.5.14Books of Audit Findings  The Contractor shall maintain books containing the findings of audits carried out pursuant
to Clause 4.5 (Inspection and Audit) together with any relevant correction
reports setting out the Corrective Action taken as a result of such audit
findings in accordance with Clause 4.5.12 (Audit Findings and Corrective
Action).  4.5.15Good Practice  Without prejudice to Clause 8.4
(Authoritys Rights to IP developed by or on behalf of the Contractor and
Subcontractors), the Authority reserves the right  87


to use any best practice identified
during any inspection or audit carried out pursuant to this Clause 4.5 (Inspection and Audit) and/or at
any Audit Close-Out Meeting, including the right to promulgate such good
practice across all nuclear sites designated under section 3 of the Energy Act.  4.5.16Records relating to Authoritys
Property  Without prejudice to the generality
of this Clause 4.5 (Inspection and Audit), the Contractor shall provide the
Authority, any Authority Agent and the Comptroller and Auditor General (and any
of its authorised representatives) with full access to, the right of inspection of, and
extraction from all records whether manual or on computer that relate to the
Authoritys property (both real and personal) leased to or otherwise made
available to the Contractor. All such records shall be retained by the
Contractor for the period specified in Clause 4.3 (Retention of Records).  4.5.17Contractors Obligations Persist  The Contractor
shall not be excused from performance of any aspect of its obligations under
this Contract for any period of time during which the Authority and/or the Comptroller and
Auditor General are exercising their respective rights in accordance with this
Clause 4.5 (Inspection and Audit). If, as a result of any Authority or National
Audit Office inspection or audit, the Contractor is prevented from performing
its obligations under this Contract despite having used reasonable endeavours
to so perform, the Contractor shall be entitled to bring a Change Proposal in
accordance with Clause 2.6 (Setting the LTP and Change Control) and Part 2
of the Programme Management Schedule (Setting the LTP and Change Control) to
seek to address the impact of such inspection or audit.  4.5.18Confidentiality  The
Parties obligations under this Clause 4.5 (Inspection and Audit) shall be
subject to the obligations set out in Part 10 (Confidentiality, Security
and Compliance with Law).  88


PART 5 EMPLOYEES  5.1Nominated Staff  5.1.1The Contractor shall enter, and shall procure that the Parent Body
Organisation and each person who is a named member of Nominated Staff (or is
appointed as a replacement for Nominated Staff) enters, into a Secondment
Agreement in the form attached at Part 3 of the Employee Schedule (Pro
Forma Secondment Agreement).  5.1.2Subject to Clause 5.1.3 below,
the Contractor shall not permit any of the Nominated Staff to be withdrawn from
full time employment on a Site without first obtaining the prior written
consent of the Authority (such consent not to be unreasonably withheld) as to
the suitability and adequacy of a replacement who must have a level of skills
and experience broadly comparable to that of the Nominated Staff being
withdrawn, or if more appropriate depending on the relevant job position, have
the necessary skills and experience required for that job position.  5.1.3Where the withdrawal from full
time employment of Nominated Staff and/or appointment of a replacement for a
person named Nominated Staff in accordance with this Clause 5.1 (Nominated
Staff) requires the approval of the Regulators, the Contractor shall procure
all such approvals as are necessary before making the withdrawal and/or
replacement as applicable.  5.1.4In the event that individual persons designated Nominated Staff are
withdrawn and replaced in accordance with Clauses 5.1.1 to 5.1.3 above, them
the Contractor shall enter, and shall procure that the Parent Body Organisation
and each replacement shall enter into a Secondment Agreement in terms
substantively to the term of the pro forma Secondment Agreement attached at Part 3
of the Employee Schedule.  5.2Key Personnel  5.2.1The Authority shall be entitled to identify and name individuals, whether
Employees or Nominated Staff, as Key Personnel in its absolute discretion. The
individuals so named by the Authority are listed in Part 2 of the Employee
Schedule (Key Personnel). Such list may be amended from time to time by the
Authority whether to take account of the replacement of any individual as a
member of Key Personnel or to add any new person or to remove any person from
such list.  5.2.2Subject to Clauses 5.2.3 below, the Contractor shall not and shall
procure that the Parent Body Organisation shall not:  5.2.2.1dismiss (either summarily or on notice);  5.2.2.2suspend for more than 5 Calendar Days;  5.2.2.3change the job description of,  5.2.2.4subject to Clause 5.8.4 (Terms and Conditions of
Employment) alter any material term or condition of the contract or terms of
employment of;  89


5.2.2.5redeploy or reallocate to
other services  any Key Personnel without the
prior written consent of the Authority (such consent not to be unreasonably
withheld);  5.2.2.6do
anything (by act or omission) which is, or may be, a breach of the contract or
terms of employment of, any Key Personnel.  5.2.3Where either the Contractor or the Parent Body Organisation intends to
withdraw from employment any member of Key Personnel or Nominated Staff, the
Contractor must and shall procure that the Parent Body Organisation will:  5.2.3.1obtain the prior written consent of the Authority
(such consent not to be unreasonably withheld) as to the suitability and
adequacy of a replacement who must have a level of skills and experience
comparable to that of the member of Nominated Staff or Key Personnel being
withdrawn, or if more appropriate depending on the relevant job position, have
the necessary skills and experience required for that job position; and  5.2.3.2where such withdrawal and/or appointment of a
replacement member of Nominated Staff or Key Personnel in accordance with this
Clause 5.2.3 requires the approval of the Regulators, procure all such approvals
as are necessary before making the withdrawal and/or replacement as applicable.  5.2.4Nothing in this Clause 5.2 (Key Personnel) will prevent the either
Contractor or the Parent Body Organisation from immediately dismissing or
suspending from their duties any Key Personnel or Nominated Staff where, in the
reasonable opinion of the Contractor or the Parent Body Organisation, such
action is:  5.2.4.1necessary to comply with any applicable Law or
Regulatory Requirements; and/or  5.2.4.2required to safeguard the health and wellbeing of any
employee on any Site; and/or  5.2.4.3justified on the grounds that any member of the Key
Personnel or Nominated Staff has committed an act of gross misconduct; and/or  5.2.4.4justified on the grounds that any member of the Key
Personnel or Nominated Staff has failed a drugs and/or alcohol test.  5.2.5Organisational Change  Subject to Regulatory Requirements, the Contractor shall not
make any material change to the organisational structure of the Contractor
without previously having consulted the Authority.  5.3Non-Contract Activities  The Contractor shall ensure and procure that the Employees
and the Nominated Staff are engaged solely in the performance of the Tasks and
the Contractors other  90


obligations under this Contract and/or the performance
of the Contractors obligations to the Authority in relation to other sites
under the Energy Act oranother Site Management and Operations
Contract, save as may otherwise be expressly agreed in writing in advance with
the Authority pursuant to Clause 16 (Provision of Staff to the SLC) of the
Parent Body Agreement or as permitted by the Contractors HR Internal
Procedures.  If any Employee and/or any
Nominated Staff perform the Contractors obligations to the Authority in
relation to other sites under the Energy Act or another Site Management and
Operations Contract, the Contractor shall ensure that such Employees or
Nominated Staffs time (as the case may be) is apportioned and charged to the
relevant Site or site.  5.4Notice to Authority of Disputes  5.4.1The Contractor shall notify the Authority of the existence and details of
any grievance made in accordance with applicable statutory grievance procedures
or dispute (whether actual, pending or threatened) between:  5.4.1.1the Contractor and any of the Employees or Nominated
Staff; and/or  5.4.1.2the Contractor and any of the Contractors
Subcontractors engaged in connection with this Contract and/or their employees;
and/or  5.4.1.3the Contractor and any trade union or other body
representing any such person in Clause 5.4.1.1 or 5.4.1.2 above.  Such notification will be made as
soon reasonably practicable after the Contractor becomes aware of any such
grievance or dispute and the Contractor shallprovide such level of detail as the Authority reasonably requires.  5.4.2The Contractor shall keep the Authority informed with updates and
progress reports on any dispute notified pursuant to Clause 5.4.1 above
together with any proposed settlements or developments which may affect the
approved funding categories in the LTP and/or LCBL.  5.5Maintenance Skills  The Contractor acknowledges the
responsibility of the Authority under section 9(2)(a) of the Energy Act in
relation to the maintenance and development in the United Kingdom of a skilled workforce and shall comply with the
provisions of Clause 2.7 (Subcontracting/Procurement). In particular, the
Contractor shall:  5.5.1when considering redundancies or any other programme involving a
reduction of Employee or Nominated Staff numbers and/or when making make-or-buy
decisions pursuant to its Make-or-Buy Plan, take into account the Authoritys
duty to maintain and develop in the United Kingdom a skilled workforce under
section 9(2)(a) of the Energy Act;  5.5.2consider and plan future skills requirements and predict possible skills
shortages and needs and, in each case, train Employees and Nominated Staff and
recruit and train additional employees accordingly; and,  91


5.5.3ensure that when it replaces any of the Employees pursuant to this Clause
5 (Employees), the replacement has a level of skills and experience which:  5.5.3.1is at least broadly comparable to that of the Employee
that he or she is replacing; or  5.5.3.2if more appropriate depending on the relevant job
position, matches the necessary skills and experience required for that job
position.  5.6Authority Approval of Redundancy  5.6.1Subject to Clause 5.1 (Nominated Staff) and 5.2 (Key Personnel), the
Contractor shall procure that the Parent Body Organisation obtain the prior
written consent of the Authority (such consent not to be unreasonably withheld)
in advance of:  5.6.1.1commencing and/or continuing a Redundancy programme
or any other programme involving the reduction of employee numbers such as a
voluntary early release scheme; and/or  5.6.1.2suspending or terminating the employment of 5 or more
Employees within any period of one (1) Month or less or 15 or more
Employees within any period of 3 months or less;  5.6.2Nothing in this Clause 5.6 (Authority
Approval of Redundancy) will prevent the Contractor from immediately dismissing
or suspending from their duties or procuring such dismissal or suspension by the
Parent Body Organisation any Employees or from procuring the immediate
dismissal or suspension of Nominated Staff by the Parent Body Organisation
where, in the reasonable opinion of the Contractor, such action is:  5.6.2.1necessary to comply with any applicable Law or
Regulatory Requirements;  5.6.2.2required to safeguard the health and wellbeing of any
employee on any Site;  5.6.2.3justified on the grounds that any Employee has
committed an act of gross misconduct; and/or  5.6.2.4justified on the grounds that any Employee has failed
an alcohol and/or drugs test.  5.7Non-Discrimination  The Contractor shall, in respect of the Employees, comply with, and
shall procure that the Parent Body Organisation and those of its agents,
Employees and Nominated Staff who carry out activities on any Site shall,
comply with, the:  5.7.1Sex Discrimination Act 1975 and Sex Discrimination Act 1986;  5.7.2Race Relations Act 1976;  5.7.3Disability Discrimination Act 1995;  5.7.4Human Rights Act 1998;  92


5.7.5Equal Pay Act 1970;  5.7.6Employment Rights Act 1996;  5.7.7Employment Equality (Sexual Orientation) Regulations 2003;  5.7.8Employment Equality (Religion or Belief) Regulations 2003;  5.7.9Employment Equality (Age) Regulations 2006; and  5.7.10any other legal
or statutory requirement, modification or re-enactment relating to
discrimination in employment, and shall procure that the Parent Body
Organisation and those of its agents who carry on activities on any Site
operate an appropriate equal opportunities policy.  5.8Terms and Conditions of Employment  5.8.1The Contractor shall keep and maintain adequate HR Internal Procedures
and records to enable it to manage its Employees. Such HR Internal Procedures
and records shall contain, amongst other things, all Employees up to date
terms and conditions of employment and details of remuneration including bonus
schemes.  5.8.2The Contractor shall obtain the prior written consent of the Authority
(such consent not to be unreasonably withheld) before making any change to its
HR Internal Procedures and record keeping systems where such change will cause
a significant increase in the costs of operating the Sites and/or performing
its obligations under this Contract.  5.8.3Without prejudice to the generality of Clause 5.8.2 the Contractor shall
not (other than when it is legally required to do so), without the prior
written consent of the Authority make or agree any changes to its procedures
and policies relating to the terms and conditions of Employees, including
procedures and policies which relate to:  5.8.3.1the inclusion,
increase or reclassification in wages, salary, other elements of pay,
benefits or emoluments as pensionable or non-pensionable;  5.8.3.2increases in
wages, salary, other elements of pay, benefits or emoluments; and  5.8.3.3the agreement
or approval of any severance or redundancy augmentations to any wages,
salary, other elements of pay, benefits or emoluments  in each case the effect of which may increase the
costs incurred by the Authority in relation to Employees.  5.8.4Subject to compliance with relevant employment law, the
Contractor shall make such additions to, omissions from, or other changes to
the employment contracts of Employees from time as required to be made by the
Authority.  93


5.9Trade Union Agreements  5.9.1The Contractor shall comply with and disclose to the Authority the terms
of all agreements it has made with trade unions or other bodies representing
any of the Employees where those agreements relate to any of the Employees.  5.9.2The Contractor shall disclose to the Authority the terms of all
agreements entered into with trade unions or other bodies representing any of
the Employees and shall keep the Authority fully informed of any changes to any
such agreement or of any new agreements entered into which relate to any of the
Employees.  5.10Termination Costs  The Authority shall recover, in
accordance with its rights under Clause 7 (Parent Body Organisation
Indemnities) of the Parent Body Agreement, all costs,claims, losses, liabilities and
expenses which arise out of the termination of the employment of any of the
Nominated Staff (or their replacements) from the Parent Body Organisation by
claiming under the Parent Body Organisation Indemnities. Where the Authority
makes a claim against the Parent Body Organisation pursuant to this Clause 5.10
(Termination Costs), it shall do so by serving a Demand on the Parent Body Organisation
specifying the amount due.  5.11Removal of Contractor or Subcontractor
Employees from Sites  If:  5.11.1there is a
Contractor Default (whether or not remedied to the satisfaction of the
Authority in accordance with Clause 12.4 (Termination or Remedy for Contractor
Default)) and the Authority:  5.11.1.1has made all reasonable enquiries into the
circumstances in which the Contractor Default occurred; and  5.11.1.2believes, acting reasonably, that:  5.11.1.2.1the Contractor Default may fairly
be attributable in whole or in substantive part to any particular Employee or
member of Nominated Staff; and  5.11.1.2.2if the relevant Employee were to
continue in the employment of the Contractor, it would adversely affect the
Contractors ability to fulfil its obligations to the Authority;  or  5.11.2the Authority
reasonably believes that the presence on the Sites of an Employee or
Subcontractors employee or a Nominated Staff represents a threat to health,
safety, security or the environment, then the Authority shall be entitled to
request that any such Employee, Subcontractors employee or Nominated Staff as
applicable be removed from the Sites.  5.11.3The Contractor
shall comply with any request made by the Authority pursuant to this Clause
5.11.  94


5.12PENSIONS
(Pre Sale)  5.12.1Energy Act
Requirements  The
Contractor shall not do or omit to do anything that shall cause the Authority
to be in breach of any of its duties and obligations under Part 3 and/or Part 4
of Schedule 8 to the Energy Act. In the event of any breach of this
undertaking, the Contractor shall do all things necessary, as directed by the
Authority, to restore the rights and benefits of relevant Employees as referred
to therein.  5.12.2Participation
in Combined Nuclear Pension Plan  TheContractor shall, on the
Sale Date, enter into the Deed of Participation in the form attached as Part 4
of the Employee Schedule.  If for any
reason the Deed of Participation is not executed as aforesaid the Contractor
shall be deemed to have entered into the Deed of Participation and shall be
bound by and shall comply with the same as if the terms thereof were fully set
out herein.  For the avoidance of doubt,
it is not expected that Employees or Nominated Staff who are currently members
of the Electricity Supply Pension Scheme will transfer to the Combined Nuclear
Pension Plan.  5.12.3Participation
in Other Applicable Schemes  The
Contractor shall participate in such of the other Applicable Schemes as the
Authority may at any time direct in respect of those of the Employees who were
Employees on the Commencement Date where this is necessary in recognition of
the Authoritys duties and obligations under Schedule 8 of the Energy Act and
who are not in the class of Employees referred to in Clause 2.3 of the Deed of
Participation and in respect of those who become Employees or Nominated Staff
after that date and who are not otherwise in the class of Employees referred to
in Clause 2.3 of the Deed of Participation or at any time hereafter cease to be
within the class of Employees referred to in Clause 2.3 of the Deed of
Participation.. In each case, the Contractors obligations shall be subject to
such consents as may be required under the governing documentation of the
Applicable Schemes, which consents the Contractor and the Authority will each
use their reasonable endeavours to procure.  5.12.4The Contractor
shall not participate in any other pension scheme in respect of the Employees
or Nominated Staff without the consent of the Authority.  5.12.5The Contractor
shall not take or fail to take any action which would cause it to cease to
participate in any Applicable Scheme without the consent of the Authority.  5.12.6Authority
Rights and Contractor Obligations in Respect of Applicable Schemes  The Contractor shall, in respect of all Applicable
Schemes in which it participates under Clauses 5.12.2 and/or 5.12.3,  5.12.6.1appoint the Authority as its nominee for
the purposes of consultation on the investment strategy of the Applicable
Schemes under section 35 of the Pensions Act 1995. The Contractor  95


acknowledges that the Authority may take account of its own
interests as well as those of the Contractor when discussing investment
strategy with the trustees (or if there are no applicable trustees the
administrator) or managers of the Applicable Schemes. In respect of any
Applicable Scheme to which section 35 of the Pensions Act 1995 does not apply,
any powers held by the Contractor under the Scheme to influence notional
investment strategy shall be delegated to the Authority.  5.12.6.2appoint the Authority as its nominee for
the purposes of consultation on the member nominated trustee provisions of the
Pensions Act 1995 and the Pensions Act 2004.  5.12.6.3not exercise or consent to the exercise of
any powers or discretions in relation to the Applicable Schemes without the
consent of the Authority and shall exercise any such powers or discretions and
shall give such consents in such a way as the Authority may direct.  5.12.6.4Without limiting the obligations in
Clauses 5.12.2 and 5.12.3 and 5.12.6 above in any way, the Contractor shall in
relation to Applicable Schemes in which it participates under Clauses 5.12.2
and/or 5.12.3  5.12.6.4.1agree to the substitution of the
Authority as Principal Employer of the Applicable Scheme if the Authority so
requests and if such substitution is permitted under the governing
documentation of the Applicable Scheme;  5.12.6.4.2set or agree employer
contribution rates as directed by the Authority;  5.12.6.4.3comply with the Scheme Documents
and, in respect of Applicable Schemes other than the CNPP, comply with the
trust deeds or such other governing documents and rules of the relevant
Applicable Schemes relevant to it as employer;  5.12.6.4.4pay all sums due to the Scheme
Trustee or the trustees (or if there are no applicable trustees the
administrator) of other Applicable Schemes as and when they fall due;  5.12.6.4.5comply with administration
systems and risk management procedures as reasonably required by the Authority
or the relevant Applicable Scheme;  5.12.6.4.6comply with all obligations
whenever arising to consult in respect of matters related to pensions and
disclose all relevant information in advance of its issuance to the Authority
and in connection therewith cooperate and liaise with the Authority as
reasonably required by the Authority  5.12.6.5where it has power, amend the Applicable Schemes as
directed by the Authority and not amend the Applicable Schemes otherwise;  96


5.12.6.5.1not agree to the funding of any
deficit or the treatment of any surplus without the consent of the Authority;  5.12.6.5.2not make any augmentations to
benefits without consent of the Authority;  5.12.6.5.3not admit any other employer to
the Applicable Scheme without the consent of the Authority;  5.12.6.5.4not terminate (or allow to
terminate) the service of any Employees or Nominated Staff in circumstances
where an enhanced benefit would be due under the Applicable Schemes without the
consent of the Authority;  5.12.6.5.5not wind up the scheme or any
part or section of it without the consent of the Authority;  5.12.6.5.6comply with its obligations as
employer arising under the general law relating to pensions; and  5.12.6.6except where and to the extent required by law, not
make, without the consent of the Authority, any announcements or issue any,
material, information or issue any publicity or advertising in any media or
form whatsoever affecting or relating to pension arrangements such consent not
to be unreasonably withheld or delayed.  5.12APENSIONS
(Post Sale)  5.12A.1Energy Act
Requirements  The
Contractor shall not do or omit to do anything that shall cause the Authority
to be in breach of any of its duties and obligations under Part 3 and/or Part 4
of Schedule 8 to the Energy Act. In the event of any breach of this
undertaking, the Contractor shall do all things necessary, as directed by the
Authority, to restore the rights and benefits of relevant Employees as referred
to therein.  5.12A.2Participation
in Combined Nuclear Pension Plan  TheContractor shall, on the date of execution of
this Agreement, enter into the Deed of Participation in the form attached as
Part 4 of the Employee Schedule.  If for
any reason the Deed of Participation is not executed as aforesaid the
Contractor shall be deemed to have entered into the Deed of Participation and
shall be bound by and shall comply with the same as if the terms thereof were
fully set out herein.  For the avoidance
of doubt, it is not expected that Employees or Nominated Staff who are
currently members of the Electricity Supply Pension Scheme will transfer to the
Combined Nuclear Pension Plan.  5.12A.3Participation
in Other Applicable Schemes  The
Contractor shall participate in such of the other Applicable Schemes as the
Authority may at any time direct in respect of those of the Employees who were
Employees on the Commencement Date where this is necessary in recognition of
the Authoritys duties and obligations under Schedule 8 of the  97


Energy Act
and who are not in the class of Employees referred to in Clause 2.3 of the Deed
of Participation and in respect of those who become Employees or Nominated
Staff after that date and who are not otherwise in the class of Employees
referred to in Clause 2.3 of the Deed of Participation or at any time hereafter
cease to be within the class of Employees referred to in Clause 2.3 of the Deed
of Participation.. In each case, the Contractors obligations shall be subject
to such consents as may be required under the governing documentation of the
Applicable Schemes, which consents the Contractor and the Authority will each
use their reasonable endeavours to procure.  5.12A.4The Contractor
shall not participate in any other pension scheme in respect of the Employees
or Nominated Staff without the consent of the Authority.  5.12A.5The Contractor
shall not take or fail to take any action which would cause it to cease to
participate in any Applicable Scheme without the consent of the Authority.  5.12A.6Authority
Rights and Contractor Obligations in Respect of Applicable Schemes  The Contractor shall, in respect of all Applicable
Schemes in which it participates under Clauses 5.12A.2 and/or 5.12A.3,  5.12A.6.1appoint the Authority as its nominee for the purposes
of consultation on the investment strategy of the Applicable Schemes under
section 35 of the Pensions Act 1995. The Contractor acknowledges that the
Authority may take account of its own interests as well as those of the
Contractor when discussing investment strategy with the trustees (or if there
are no applicable trustees the administrator) or managers of the Applicable
Schemes. In respect of any Applicable Scheme to which section 35 of the
Pensions Act 1995 does not apply, any powers held by the Contractor under the
Scheme to influence notional investment strategy shall be delegated to the
Authority.  5.12A.6.2appoint the Authority as its nominee for the purposes
of consultation on the member nominated trustee provisions of the Pensions Act
1995 and the Pensions Act 2004.  5.12A.6.3not exercise or consent to the exercise of any powers
or discretions in relation to the Applicable Schemes without the consent of the
Authority and shall exercise any such powers or discretions and shall give such
consents in such a way as the Authority may direct.  5.12A.6.4Without limiting the obligations in Clauses 5.12A.3
and 5.12A.4 and 5.12A.6 in any way, the Contractor shall in relation to
Applicable Schemes in which it participates under Clauses 5.12A.2 and/or
5.12A.3  5.12A.6.4.1agree to the substitution of the Authority as Principal Employer of the
Applicable Scheme if the Authority so requests and if such substitution is
permitted under the governing documentation of the Applicable Scheme;  98


5.12A.6.4.2set or agree employer contribution rates as directed by the Authority;  5.12A.6.4.3comply with the Scheme Documents and, in respect of Applicable Schemes
other than the CNPP, comply with the trust deeds or such other governing
documents and rules of the relevant Applicable Schemes relevant to it as
employer;  5.12A.6.4.4pay all sums due to the Scheme Trustee or the trustees (or if there are
no applicable trustees the administrator) of other Applicable Schemes as and
when they fall due;  5.12A.6.4.5comply with administration systems and risk management procedures as
reasonably required by the Authority or the relevant Applicable Scheme;  5.12A.6.4.6comply with all obligations whenever arising to consult in respect of
matters related to pensions and disclose all relevant information in advance of
its issuance to the Authority and in connection therewith cooperate and liaise
with the Authority as reasonably required by the Authority  5.12A.6.5where it has power, amend the Applicable
Schemes as directed by the Authority and not amend the Applicable Schemes
otherwise;  5.12A.6.5.1not agree to the funding of any deficit or the treatment of any surplus
without the consent of the Authority;  5.12A.6.5.2not make any augmentations to benefits without consent of the Authority;  5.12A.6.5.3not admit any other employer to the Applicable Scheme without the consent
of the Authority;  5.12A.6.5.4not terminate (or allow to terminate) the service of any Employees or
Nominated Staff in circumstances where an enhanced benefit would be due under
the Applicable Schemes without the consent of the Authority;  5.12A.6.5.5not wind up the scheme or any part or section of it without the consent
of the Authority;  5.12A.6.5.6comply with its obligations as employer arising under the general law
relating to pensions; and  5.12A.6.6except where and to the extent required by
law, not make, without the consent of the Authority, any announcements or issue
any, material, information or issue any publicity or advertising in any media
or form whatsoever affecting or relating to pension  99


arrangements such consent
not to be unreasonably withheld or delayed.  PART 6: FINANCE (Pre Sale)  6.1Funding Limits  The
Contractor must fulfil its obligation to perform the Tasks and its other
obligations under this Contract within the SLC Funding Limit, Current Budget,
Capital Budget and PSWBS Category Levels (in each case as amended in accordance
with Part 2 (Setting the LTP and Change Control) of the Programme
Management Schedule if applicable) set by the Authority for each Contract Year
as specified in Part 1 of the Finance Schedule (Funding Limits and
Available Incentive Fee).  6.2.Determination of Funding Limits and
Compliance with Funding Limits  6.2.1Prior to each
Contract Year, the Authority shall determine and notify the Contractor in respect
of the Site and the Sites of the SLC Annual Funding Limit and Annual Site
Funding Limits, the Site Current Budgets, the Current Budget, the Site Capital
Budgets and the Capital Budget for that Contract Year in accordance with Part 2
of the Programme Management Schedule (Setting the LTP and Change Control).  6.2.2Subject to
Clause 6.2.3 below, if the Contractor breaches the SLC Annual Funding Limit
and/or Current Budget without the express written consent of the Authority
obtained pursuant to Clause 2.6 (Setting the LTP and Change Control), the costs
incurred in excess of such SLC Annual Funding Limit and/or Current Budget, as
applicable, shall be Disallowable Costs.  6.2.3To the extent
that the Contractors breach of the SLC Annual Funding Limit and/or Current
Budget arises as a direct result of an event listed at Paragraph 11 of Part 2
(Changes that the Authority Cannot Refuse) of the Programme Management Schedule
(Setting the LTP and Change Control) then the costs incurred in excess of such
SLC Annual Funding Limit and/or Current Budget shall not be Disallowable Costs.  6.3Restrictions on Payment to Parent Body
Organisation  Subject to
Clauses 6.11.8 (Payments to Parent), the Contractor shall not without the prior
written consent of the Authority make any payment to the Parent Body
Organisation.  6.4Other Financial Restrictions  6.4.1The Contractor
shall not without the prior written consent of the Authority:  6.4.1.1 dispose, let or otherwise
part with the possession of the whole of or any part of the Sites, business,
undertaking or asset including any asset subject to a finance or operating
lease;  6.4.1.2make any change
to its accounting reference date;  6.4.1.3make any change
to the Accounting Policies and Procedures save as required by applicable Law,
UK generally accepted accounting principles or HM Treasurys Government
Reporting Requirements;  6.4.1.4create or permit
to subsist any Security Interest over any Authority Assets or give any
guarantee or indemnity to or for the benefit of any person or otherwise assume
liability or become obliged (actually or contingently) in respect of any
obligation of any other person, in each case other than as permitted by this
Contract save that nothing in this  100


Clause 6.4.1.4 is intended to
prevent the creation of any liens in the course of performance of this
Contract;  6.4.1.5borrow
(including intra-group) or make any payment under any intra-group borrowings;  6.4.1.6create or
acquire any subsidiary or dispose of any shareholding in a subsidiary or make
or have any investment in any other entity, except for the deposit of cash in
the Contractors Fee Account, or the Contractors Payment Account ;  6.4.1.7commence any
litigation or arbitration other than:  6.4.1.7.1in accordance
with Clause 7.6 (Necessary Consents), Part 8 (Intellectual Property) or
Clause 1.25 (Claims Handling);  6.4.1.7.2in accordance
with the Dispute Resolution Procedure;  6.4.1.7.3in any attempt
to commence judicial review proceedings against the Authority in connection
with this Contract;  6.4.1.7.4to challenge any
threatened or actual revocation of the Nuclear Site Licence or any other
regulatory permit or consent which is essential to the Contractors ability to
operate any Site or carry out the Commercial Operations Tasks in accordance
with Law; or  6.4.1.7.5to apply for or
resist or join into an injunction which the Contractor, acting reasonably,
considers urgent and necessary to the Contractors performance of its obligations
to the Authority;  6.4.1.8incur any
liability or financial indebtedness except as permitted by this Contract;  6.4.1.9make any loan or
grant any credit, or have or permit to subsist any loan or any credit, to any
person (other than the deposit of cash with a financial institution or Office
of the Paymaster General as permitted by this Contract);  6.4.1.10 enter into any finance or
operating leases;  6.4.1.11 notwithstanding the
Permitted Activities, enter into any Customer Contract or Subcontract where a
disproportionate element of liability, cost or benefit is likely to crystallise
after the expiry of this Contract; and  6.4.1.12 make payment of any
management or other charges to the Parent Body Organisation or to any of its
Affiliates:  6.4.1.12.1in excess of
those set out in Subcontracts specifically approved by the Authority pursuant
to Clause 2.7 (Subcontracting/Procurement);  6.4.1.12.2unless under an
Existing Agreement which is not a Recent Existing Agreement;  6.4.1.12.3unless in respect
of a Recent Existing Agreement which is awaiting the Authoritys review
pursuant to Clause 2.10 (Assumption of Existing Agreements);  6.4.1.12.4in excess of
those set out in Recent Existing Agreements approved or amended by the
Authority pursuant to Clause 2.10 (Assumption of Existing Agreements);  101


6.4.1.12.5unless pursuant
to Clauses 6.11.8 (Payment to Parent);  6.4.1.12.6unless as agreed
under an Advance Agreement  6.4.1.13 undertake hedging activities
(except in accordance with the Currency Hedging Strategy).  6.4.2For the purposes
of Clause 6.4 (Other Financial Restrictions), other than where the Authority
has expressly given or withheld its consent in writing, the Contractor shall be
deemed to have the prior written consent of the Authority to carry out any of
the activities in Clauses 6.4.1.1 to 6.4.1.13 (Other Financial Restrictions) to
the extent the relevant activity is expressly:  6.4.2.1set out in the
then current Contract Year of the LTP;  6.4.2.2contained in a
Subcontract or Customer Contract which is specifically approved by the
Authority. For the avoidance of doubt and notwithstanding any other provision
of this Contract, any Subcontract or Customer Contract which enables the Contractor
to do any of the matters set out in Clause 6.4 (Other Financial Restrictions)
requires the approval of the Authority notwithstanding the Permitted
Activities;  6.4.2.3contained in an
Internal Procedure reviewed by the Authority and accepted or deemed to have
been accepted by the Authority in accordance with Clause 2.8 (Contractors
Internal Procedure);  6.4.2.4save in the case
of Clause 6.4.1.11, a Permitted Activity or otherwise approved by the Authority
in accordance with Clause 3.6.2 (Authoritys right to be consulted in respect
of Customer Contracts); or  6.4.2.5in the case of
Clause 6.4.,2.1, permitted by Clause 6.4.1.12.5.  6.5Historical Costs  6.5.1Without
prejudice to Clause 6.5.4, the Contractor shall determine whether any cost, claim
or liability which relates to the period prior to 1 April 2005 falls
within the definition of a BNF Historical Cost or a Contractor Historical Cost
or a BNF Historical Trading Cost or a Contractor Historical Trading Cost, in
accordance with the provisions of the Overarching Costs Management Agreement.  6.5.2The Contractor
shall mitigate, to the extent reasonably possible, all Contractor Historical
Costs and meet such Contractor Historical Costs subject, where relevant, to the
provisions of Clause 1.25 (Claims Handling).  6.5.3Where the
Contractor, in error, has paid a BNF Historical Cost or a BNF Historical
Trading Cost, the Contractor shall reclaim such BNF Historical Cost or Group
BNF Historical Trading Cost from the relevant BNF Company in accordance with
the terms of the Overarching Costs Management Agreement. The Contractor shall
pay any amounts reclaimed pursuant to this Clause 6.5.3 to the Authority as
Category I Revenue.  6.5.4The treatment of
pension deficit contributions in relation to the Applicable Schemes shall not
be dealt with under this Clause 6.5 (Historical Costs). Such deficit
contributions shall be made in accordance with the Schedule of Contributions
for the relevant Applicable Scheme prepared under section 58 Pensions Act 1995 or
section 227 Pensions Act 2004 together with any other obligations as to funding
imposed by the documents governing the Applicable Schemes.  102


6.6Cashflow  6.6.1        Payments
Account  6.6.1.1 The Contractor is entitled
to drawdown funds from the OPG Payments Account on a daily basis which it
requires:  (A)to meet its obligations to make
payments to creditors as they Fall Due and in accordance with Government
Payment Obligations (save as otherwise agreed by the Authority in writing),such obligations to creditors incurred in
the Contractors proper performance of its obligations under the Contract (but
excluding any costs properly to be met from a Customer Ringfenced Account); and  (B)to fund any foreign currency
hedging activities carried out in accordance with the Currency Hedging Strategy
or to which the Authority has given its prior written consent in accordance
with Clause 6.4.1.13 above (Other Financial Restrictions)  6.6.1.2Each drawdown of
funds must be authorised on behalf of the Contractor and on behalf of the
Authority.  Both the Contractor and the
Authority shall have, maintain and comply with effective internal procedures to
ensure secure and timely drawdown of funds.  6.6.1.3  (A)The Contractor will advise the
Authority of the amount to be drawn down from the OPG Payment Account on a
daily basis, within a timeframe notified by the Authority, acting reasonably
from time to time.  (B)The Contractor will provide such
supporting information relating to the drawdown from the OPG Payments Account
as the Authority, acting reasonably, requires and notifies to the Contractor
from time to time.  The supporting
information will include a transaction analysis report, the relevant daily
statement, an explanation of any variance from the latest cash flow forecast,
an explanation for an opening balance on any of the Contractors bank accounts
other than zero (other than any Customer Ringfenced Accounts or Foreign
Exchange Accounts) and, on a monthly basis, a report on balances in all foreign
currency bank accounts held by or on behalf of the Contractor.  6.6.1.4If the Authority
reasonably believes that the Contractor intends to use all or part of any
drawdown of funds from the OPG Payments Account for purposes which are
fraudulent or otherwise illegal or contrary to public policy the Authority will
not authorise the drawdown of such funds until it is satisfied, acting
reasonably, that such of the funds are to satisfy the proper purposes of the
Contractor in its performance of this Contract. 
The Authority shall no later than five (5) Calendar Days after
withholding its authorisation, inform the Contractor that it has not authorised
the release of such funds and shall inform the Contractor of the amount
withheld and the reason or reasons for the lack of authorisation.  6.6.1.5Funds drawn down
by the Contractor pursuant to Clause 6.6.1.1 above shall be transferred only
into the Contractors Payments Account, from which the Contractor shall only:  (A)make payments to creditors as they
Fall Due and in accordance with Government Payment Obligations (save as
otherwise agreed by the Authority); or  103


(B)Transfer monies into the Foreign
Exchange Accounts to fund any foreign currency hedging activities carried out
in accordance with the Currency Hedging Strategy or to which the Authority has
given its prior written consent in accordance with Clause 6.4.1.13 above (Other
Financial Restrictions) and/or to make payments to creditors as they Fall Due
and in accordance with Government Payment Obligations (save as otherwise agreed
by the Authority in writing),  and the Contractor shall accurately record such
transfers of funds and payments to creditors on the Ledger for the Site to
which such transfer or payment relates.  6.6.1.6The balance of
any funds transferred from the OPG Payments Account into the Contractors
Payments Account or ESTLs Capital Adequacy Account and recorded on the
relevant site ledger (as applicable) and not paid out to creditors or required
to meet the Capital Adequacy Requirements or required to fund deposits to be
made pursuant to any of the Cash Credit Support Agreements (subject to any
restrictions imposed by the Authority pursuant to Clause 3.6 and/or set out in
the Permitted Activities and the Trading Limits) or to fund any foreign
currency hedging activities carried out in accordance with the Currency Hedging
Strategy or which the Authority has given its prior written consent in
accordance with Clause 6.4.1.13 (Other Financial Restrictions) shall reduce the
Contractors or ESTLs (as applicable) requirement for and entitlement to
further drawdowns of funds from the OPG Payments Account by an equal amount.  6.6.1.7If the
Authority, acting reasonably, considers that the balance of funds in any
Foreign Exchange Account is surplus to the requirements of the Contractors or
ESTLs (as applicable) performance of its obligations under this Contract, or
if the balance of funds in ESTLs Capital Adequacy Account is surplus to ESTLs
Capital Adequacy Requirements, or if amounts on deposit pursuant to any of the
Cash Credit Support Agreements is in excess of any restrictions imposed by the
Authority pursuant to Clause 3.6 and/or set out in the Permitted Activities and
the Trading Limits, then the Authority shall be entitled to require the
Contractor or ESTL (as applicable) to withdraw such surplus funds from such
Foreign Exchange Account or the Capital Adequacy Account (as the case may be)
or the relevant account in relation to the relevant Cash Credit Support
Agreement and pay such surplus funds to the Authority as Category 1 Revenue
within twenty-one (21) Calendar Days of the Contractors or ESTLs (as
applicable) withdrawal of such surplus funds.  6.6.1.8The Contractor shall
record on the relevant Site Trading Ledger all funds drawndown to meet Trading
Costs. Trading Costs correctly recorded on the relevant Site Trading Ledger
shall not reduce the available balance of any Annual Site Funding Limit,
Current Budget, Capital Budget or PSWBS Category Level.  6.6.2        Cashflow
Forecasting  6.6.2.1The Contractor
shall submit to the Authority a cashflow forecast in a form and at a frequency
to be determined by the Authority, acting reasonably, and notified to the Contractor
from time to time.  6.6.2.2The timeliness and accuracy
of the cashflow forecast as determined in accordance with Clause 6.6.2.1 as
compared with the Contractors requests to the Authority for payment into the
Contractors Payments Account as well as the Contractors adherence to the
Authoritys reasonable requirements from time to time (which the Authority
shall notify to the Contractor) shall be a  104


criterion under which 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) but declaring that in any Contract Year the amount by which
the Authority shall be entitled to reduce the Incentive Fee on the basis of
such criterion shall be limited to the sum being 50% of the Total Incentive Fee
payable to the Contractor in respect of such Contract Year for the Sixth Site.  6.6.3        Reimbursement  6.6.3.1Should
the Contractor become aware that it has drawn down funds from the OPG Payments
Account in respect of payments which relate to a Disallowable Cost, it shall
use its best endeavours to procure that within thirty (30) Calendar Days of
such drawdown the Parent Body Organisation pays a sum equal to the amount of
such drawn down funds to the Authority.  6.6.3.2Should
the Authority become aware that the Contractor has drawn down funds from the
OPG Payments Account for payments which relate to a Disallowable Cost, it shall
be entitled to require the Contractor to take the actions described in Clause
6.6.3.1 above.  6.7Not Used  6.8Customer Ringfenced Accounts  6.8.1The Contractor is entitled to draw down funds from Customer
Ringfenced Accounts in accordance with the legally binding provisions and/or
documented understandings with the relevant customer(s) (where
inconsistent with legally binding provisions the legally binding provisions
shall prevail) governing withdrawal from such Customer Ringfenced Accounts to
meet such costs as it is entitled to meet from Customer Ringfenced Accounts.  6.8.2For the avoidance of doubt, funds in Customer Ringfenced Accounts
shall not constitute Category I revenue or Category II Revenue unless or until
released from such Customer Ringfenced Accounts as revenue in accordance with
the terms governing the operation of such accounts.  6.9Determination of Revenue Category  6.9.1Subject to Clause 6.9.4, in each Contract Year during the setting of
the LTP for the next Contract Year pursuant to Paragraph 7 (NTWP and LTP) of Part 2
of the Programme Management Schedule (Setting the LTP and Change Control), the
Authority shall in respect of any Site or Sites be entitled, acting reasonably
and in consultation with the Contractor, to:  6.9.1.1amend the
definition of Category II Revenue so that revenue which would otherwise have
fallen into the definition of Category I Revenue falls into the definition of
Category II Revenue for all succeeding Contract Years; and/or  6.9.1.2amend categories
of revenue within or delete categories of revenue from the definition of
Category I Revenue and/or Category II Revenue for all succeeding Contract
Years.  6.9.2If the amount of Category II Revenue received by the Contractor to
date in the current Contract Year exceeds the amount forecast by the Contractor
in the LTP as receivable for that Contract Year in respect of any Site as set
out in Finance Schedule Part 1 (Funding Limits and Available Incentive
Fee), the Authority shall be entitled in respect of such Site at any time
thereafter in the current Contract Year, acting reasonably, to treat the excess
revenue falling within the definition of Category II Revenue for such Site as
revenue falling into the definition of Category I Revenue for any Site.  105


6.9.3Prior to setting the Funding Limits for the next Contract Year in
accordance with Paragraph 7 (NTWP and LTP) of Part 2 of the Programme
Management Schedule (Setting the LTP and Change Control), the Authority shall
(acting reasonably and in consultation with the Contractor) be entitled at any
time to add new categories of revenue to the definition of Category I Revenue
and/or Category II Revenue to the extent that such categories of revenue are
not already accounted for as Category I Revenue or Category II Revenue in the
current Contract Years LTP.  6.9.4The assumption is that monies received or receivable by the
Contractor shall predominantly be treated as Category I Revenue. Any dispute as
to whether monies received or receivable by the Contractor are to be treated as
Category I Revenue or Category II Revenue shall be determined by the Authority
acting reasonably.  6.10Receipts Accounts  The Contractor shall pay all Category I Revenue and
Category II Revenue into the Contractors Receipts Accounts within nine (9) Working
Days of its receipt of such Revenue and shall transfer the entire balance of
the Contractors Receipts Account on a daily basis to the OPG Receipts Account,
in either case other than as specifically instructed in writing by the
Authority.  6.11Reimbursement  6.11.1      Allowable and Disallowable Costs  6.11.1.1The Contractor acknowledges that
the Authority is entitled to be reimbursed by the Parent Body Organisation for
any payments which relate to Disallowable Costs.  6.11.1.2The Contractor must determine
whether a payment in respect of a Cost is an Allowable Cost or a Disallowable
Cost in accordance with Part 4 of the Finance Schedule (Costs Principles
and Procedures).  6.11.1.3The Contractor shall be entitled
to agree in advance with the Authority as to whether certain Costs it proposes
to incur are Allowable Costs by entering into Advance Agreements with the
Authority pursuant to the process set out in Part 4 of the Finance
Schedule (Costs Principles and Procedures).  6.11.1.4Should the Contractor become aware
that it has incorrectly determined an Allowable Cost as a Disallowable Cost and
accordingly wishes to claim such Cost as an Allowable Cost, it shall be
entitled to make such claim.  6.11.2If the Parties
cannot agree whether a particular Cost is an Allowable Cost or a Disallowable
Cost according to this Clause 6 or Part 4 of the Finance Schedule (Costs
Principles and Procedures), the matter shall be resolved in accordance with Part 13
(Dispute Management).  6.11.3      Performance Based Incentive Arrangements  6.11.3.1The PBIs shall be prepared and determined, and the PBI shall be
calculated and paid, in accordance with Part 2 (Use of Performance Based
Incentives) of the Finance Schedule.  6.11.3.2.The Contractor may propose, and
the Authority may require the Contractor to bring forward, changes to PBIs at
any time during the  106


Contract Year in accordance with Part 2 of the Finance Schedule
(Use of Performance Based Incentives).  6.11.4Incentive Fee  6.11.4.1The Incentive Fee shall becalculated, in
accordance with Part 2 (Use of Performance Based Incentives) of the
Finance Schedule.  6.11.5Alternative Basis of Remuneration   6.11.5.1Should
the Parties agree to utilise an alternative basis of remuneration to
reimbursement of Allowable Costs and Incentive Fee they shall as appropriate agree:  6.11.5.1.1the basis of remuneration; and  6.11.5.1.2the work or services to which it
relates; and  6.11.5.1.3the terms and conditions upon
which such work or services is to be performed; and  6.11.5.1.4to the extent the terms of this
Contract are not applicable and/or to the extent that any additional terms or
conditions are required or require to be amended, the deletions from and
additions to and amendments of this Contract; and  6.11.5.1.5the relevant rates and prices, any
profit, overhead and incentive arrangements; and  6.11.5.1.6the method of and basis for
variation and adjustment  and the Parties
shall document the same in a written agreement to be attached as a supplemental
agreement to this Contract.  6.11.5.2For
the avoidance of doubt any such supplemental agreement:  6.11.5.2.1shall apply only in respect of the
work and services specified therein and shall have no other effect upon the
terms of this Contract; and  6.11.5.2.2shall contain provisions allocating responsibility for the costs of
additional works needed as a consequence of the Contractors failure to comply
with the requirements of this Contract in accordance with Part 7 of the
Finance Schedule (Provisions Applying to Defective Performance of
Alternative Remuneration Tasks).  6.11.6
     Payment of Incentive Fee  6.11.6.1Where
any amount of Incentive Fee is awarded provisionally pursuant to Part 2 of
the Finance Schedule (Use of Performance based Incentives), the Contractor may
issue a VAT invoice for the net amount of the Incentive Fee plus VAT seeking
payment of such amount into the Contractors Fee Account and, subject to the
sum sought being properly due and to Clause 6.11.6.3 below, the Authority will
make such payment.  6.11.6.2If
Clause 6.11.6.1 applies, the Authority subject to Clauses 6.11.6.3, 6.11.6.4,
6.11.6.5 and 6.11.6A.4 will pay a maximum of 5 (five) per cent of the
Contractors Available Incentive Fee for the relevant Contract Year on the last
Working Day in each Month within the Contract Year in respect of provisionally
awarded Incentive Fee unless, subject to Clause 6.11.6.3 below the Authority in
its sole discretion, agrees to pay a higher amount  107


of provisionally
awarded Incentive Fee in any Month within the Contract Year, subject always to
a maximum figure equal to 60% of the Available Incentive Fee within any
Contract Year.  6.11.6.3Notwithstanding
Clauses 6.11.6.1 and 6.11.6.2 above, the Authority will not pay more than 60%
of the Available Incentive Fee to the Contractor in respect of provisionally
awarded Incentive Fee in any Contract Year.  6.11.6.4The Authority may during the
seventh Month and during the tenth Month of each Contract Year require the
Contractor to provide such information as the Authority may reasonably require
in order to satisfy itself so far as reasonably practicable at that stage of
the Contract Year that the total of the payments made by the Authority pursuant
to Clause 6.11.6.2 for the Contract Year will not exceed the total of the
Incentive Fee payable for such Contract Year. 
In the event that the Authority reasonably believes on the basis of such
information or otherwise that the total of the payments made by the Authority
pursuant to Clause 6.11.6.2 for the Contract Year will exceed the amount of the
Authoritys reasonable estimate of the total Incentive Fee which will be
payable in respect of such Contract Year, the Authority may decide to reduce
its monthly payment pursuant to Clause 6.11.6.2 so that the total of such
payments for the Contract Year is equal to the amount being the Authoritys
reasonable estimate of the total Incentive Fee which shall be payable in
respect of such Contract Year.  6.11.6.5In the event that the Authority
reasonably believes on the basis of the information provided pursuant to Clause
6.11.6.4 or otherwise that the total of the payments made by the Authority
pursuant to Clause 6.11.6.2 in any Contract Year exceeds the Authoritys
reasonable estimate of the total Incentive Fee payable in respect of such
Contract Year, the Authority shall be entitled to make no further payments
during such Contract Year pursuant to Clause 6.11.6.2 and may during the
remaining period of such Contract Year deduct the amount by which the total of
the payments so made exceeds the Authoritys reasonable estimate as aforesaid
from any amounts of Budgeted Efficiency Gain Fee which would but for this
provision remain to be paid pursuant to clause 6.11.6.2.  6.11.6APayment of Budgeted Efficiency Gain Fee  6.11.6A.1Subject to Clauses 6.11.6A.3,
6.11.6A.4 and 6.11.6.5, the Authority will pay 5 (five)
per cent of the Budgeted Efficiency Gain Fee for the relevant Contract Year on
the last Working Day in each Month within that Contract Year on account of
Efficiency Gain Fee.  The Contractor will
issue a VAT invoice for the net amount of the Budgeted Efficiency Gain Fee plus
VAT.  6.11.6A.2The Authority will not pay more than 60% of the Budgeted Efficiency
Gain Fee to the Contractor on account of Efficiency Gain Fee in any Contract
Year.  6.11.6A.3The Authority may during the seventh Month and during the tenth
Month of each Contract Year require the Contractor to provide such information
as the Authority may reasonably  108


require in
order to satisfy itself so far as reasonably practicable at that stage of the
Contract Year that the total of the payments made by the Authority pursuant to
Clause 6.11.6A.2 for the Contract Year will not exceed the total of the
Efficiency Gain Fee payable for such Contract Year.  In the event that the Authority reasonably
believes on the basis of such information or otherwise that the total of the
payments made by the Authority pursuant to Clause 6.11.6A.1 for the Contract
Year will exceed 80% of the amount of the Authoritys reasonable estimate of
the total Efficiency Gain Fee which will be payable in respect of such Contract
Year, the Authority may decide to reduce its monthly payments pursuant to
Clause 6.11.6A.1so that the total of such payments for the Contract Year is
equal to the amount being 80% of the Authoritys reasonable estimate of the
total Efficiency Gain Fee which will be payable in respect of such Contract
Year.  6.11.6A.4In the event that the Authority reasonably believes on the basis of
the information provided pursuant to Clause 6.11.6A.3 or otherwise that the
total of the payments made by the Authority pursuant to Clause 6.11.6A.1 in any
Contract Year exceeds the Authoritys reasonable estimate of the total
Efficiency Gain Fee payable in respect of such Contract Year, the Authority
shall be entitled to make no further payments during such Contract Year pursuant
to Clause 6.11.6A.1 and may during the remaining period of such Contract Year
deduct the amount by which the total of the payments so made exceeds the
Authoritys reasonable estimate as aforesaid from any amounts of provisionally
awarded Incentive Fee which would but for this provision remain to be paid
pursuant to Clause 6.11.6A.1.  6.11.7Contractors Fee Account  Any interest accruing on amounts in the Contractors
Fee Account shall be for the account of the Contractor.  6.11.8Payments to Parent  6.11.8.1Within
fourteen (14) Calendar Days of the Authoritys determination pursuant to Clause
6.2 (Determination of Funding Limits and Compliance with Funding Limits) and
the final determination of Incentive Fee undertaken pursuant to Paragraph 3.11
(Final Determination of, and Adjustment to, Incentive Fee) of Part 2 of
the Finance Schedule (Use of Performance Based Incentives), taking account of
the Annual Reconciliation Reports, the Authority will calculate the Year End
Sum which shall be an amount equal to the Final Incentive Fee minus:  6.11.8.1.1the Total Provisional Incentive
Fee paid by the Authority to the Contractor; 6.11.8.1.2an amount in respect of any
Disallowable Costs not otherwise reimbursed to the Authority; and 6.11.8.1.3any amount owing from the Parent
Body Organisation to the Contractor or the Authority pursuant to this Contract
or the Parent Body Agreement.  109


6.11.8.2If
the Year End Sum is a positive figure then the Authority shall pay an amount
equal to the Year End Sum into the Contractors Fee Account within thirty (30)
Calendar Days of the Authoritys calculation of the Year End Sum. If the Year
End Sum is a negative figure then the Authority shall serve a Demand on the
Parent Body Organisation requiring that the Parent Body Organisation pays an
amount equal to the Year End Sum to the Authority within thirty (30) Calendar
Days of receipt of such Demand.  6.11.8.3If
the Year End Sum is a positive figure then the Contractor shall issue a VAT
invoice to the Authority for the sum as defined in 6.11.8.2 plus VAT.  6.11.8.4Upon
expiry or termination of this Contract, if the final form Annual Reconciliation
Report has been referred to the Dispute Resolution procedure, the Authority
shall calculate the Year End Sum whether that be a positive or negative sum and
to the extent that such Year End Sum is undisputed then Clause 6.11.8.2 shall
apply in respect of that undisputed amount. 
Following agreement or determination of the disputed amounts under the
Annual Reconciliation Report, Clauses 6.11.8.1 and 6.11.8.2 shall apply as
appropriate.  6.11.8.5The
Authority hereby gives its consent to the Contractor paying such amount of the
provisionally awarded Incentive Fee and of the Year End Sum (if the Year End
Sum is a positive figure) to the Parent Body Organisation as the Contractor
thinks fit and proper.  6.11.9Currency of Contract  All
amounts of money in this Contract are expressed in pounds sterling (£). If the
United Kingdom joins European Monetary Union any figure expressed in £ and sterling in this Contract shall be converted into euro at the rate for
conversion of sterling into euro established by the Council of the European
Union pursuant to the Treaty (including compliance with rules relating to
rounding in accordance with European Community regulations) and any reference
to a figure in £ or sterling shall mean that figure adjusted into euro.  6.12Not used  6.13Funding Limits  6.13.1Expenditure and
accruals shall attrite the Funding Limits in accordance with the provisions of Part 4
of the Finance Schedule (Cost Principles and Procedures).  6.13.2Within Fourteen (14) Calendar Days
of the end of each Month, the Contractor shall provide the Authority with a
report for each Site (in such a form and containing such information as the
Authority may reasonably require from time to time) setting out each of the
following in respect of the relevant previous Month:  6.13.2.1the funds paid out by the Contractor
from the OPG Payments Account in accordance with Clause 6.6.1 (Payments
Account) and recorded on the relevant site ledger;  110


6.13.2.2the amounts received by the
Contractor of Category I Revenue, Category II Revenue or otherwise (including
any amounts released as revenue form the Customer Ringfenced Accounts);  6.13.2.3the amounts expended by the
Contractor in the proper performance of its obligations under this Contract in
respect of Allowable Costs;  6.13.2.4a reconciliation between the
drawdowns authorised on behalf of the Authority and the sums drawn down by the
Contractor;  6.13.2.5not used;  6.13.2.6the amounts drawn down from the
Customer Ringfenced Accounts; and  6.13.2.7any movements into and out of the
Foreign Exchange Accounts, and  with all relevant
supporting documents and any other applicable information (and in such a form)
as the Authority may reasonably require from time to time (each such reporting
being aMonthly Reconciliation
Report),  and within sixty
(60) Calendar Days of the end of each Contract Year (or if, at the end of the
Contract Year, the Authority exercises its Call Option and shares are
transferred pursuant tothe provisions of the Parent Body Agreement), the Contractor shall
provide the Authority with a report for each Site in the same form as the
Monthly Reconciliation Report or as otherwise reasonably required by the
Authority in respect of that previous Contract Year (theAnnual Reconciliation
Report).  6.14Reports  6.14.1The Contractor
shall prepare and submit to the Authority periodic reports for each Site
(including the Annual Reconciliation Reports) showing the amounts of
expenditure expended and/or accrued against each Funding Limit in accordance
with Clause 4.1 (Reporting and Reviewing).  6.14.2Following the
end of each Contract Year and within ninety (90) Calendar Days of its receipt
of the Contractors Annual Reconciliation Reports, the Authority shall notify
the Contractor that it either agrees the Annual Reconciliation Reports or that
it requires the Contractor to amend and re-submit them (indicating those
reports and sections therein which it requires to be amended). Within thirty
(30) Calendar Days of such notification from the Authority, the Contractor
shall either submit revised Annual Reconciliation Reports incorporating all
amendments required by the Authority (and the Authority shall notify the
Contractor of its agreement to the revised Annual Reconciliation Reports within
a further thirty (30) Calendar Day period) or notify the Authority that it does
not accept any one or more of the amendments requested by the Authority
(identifying the relevant amendments). In the event that the Contractor does
not accept any or all of the Authoritys requested amendments, the Parties shall
consult each other with a view to agreeing revised Annual Reconciliation
Reports but if they cannot agree the final form Annual Reconciliation Reports
within fourteen (14) Calendar Days of first notification by the Contractor to
the Authority that it does not accept all of the Authoritys amendments, the
matter shall he resolved, and the final form Annual Reconciliation Reports
determined, in accordance with the Dispute Management Schedule.  6.14.3The amount of
expenditure and accruals reported against each Funding Limit shall be reduced
by the amount of Category II Revenue reported  111


against the relevantFunding Limit. The Contractor
shall report Category II Revenue.  6.14.4Within fourteen
(14) Calendar Days of the agreement or determination of the Agreed
Reconciliation Reports pursuant to Clause 6.14.2 above, the Authority shall
determine whether or not the Contractor has complied with Clause 6.13.1
(Funding Limits) and, if the Contractor has not complied with Clause 6.13.1
(Funding Limits), the Authority will serve a Demand on the Contractor in
respect of sums paid by the Authority as Allowable Costs which pursuant the
procedures in this clause 6.14 are agreed or determined to be Disallowable Costs.  6.14.5The Contractor shall provide any information
reasonably requested by the Authority that enables the Authority to comply with
its State Aid reporting obligations to the Department of Trade and Industry.  6.15Costs Transparency and Auditing  6.15.1At any time the
Authority or the Authoritys Agents may choose to exercise the rights set out
in Clause 4.5 (Inspection and Audit) to audit the Contractors determination of
Costs as Allowable Costs or Disallowable, or the reconciliation between
payments made and accruals.  6.15.2The
Contractor shall adopt a system of cost transparency and open book accounting
which provides for the cost components, cost levels and cost build up and
calculation for each and every item of cost that is used on the formulation of
the rate, prices and sums under this Contract, including those relating to
Subcontracts, which relate to the Contractors performance of its obligations
under this Contract to be calculated and made available to the Authority. The
Contractor shall, at the request of the Authority, make such of its records
available to the Authority as are necessary for the Authority to verify that a
system of cost transparency has and is being adopted. The Contractor shall
ensure that its Subcontractors also comply with such cost transparency and
reporting provisions by including such provisions in its Subcontracts. The
Authority shall have the right to access to the build up and calculations for
each and every item of cost that is used in the formulation of the rates,
prices and sums under this Contract. The Authority shall have the right to
audit the Contractors Subcontractors and Affiliates on the same basis.  6.16Reconciliation for Mid-Year Termination  6.16.1If the last day
of the final Contract Year is any day other than 31 March (or if the
Authority exercises its Call Option under the provisions of the Parent Body
Agreement) ,the Authority shall require the Contractor to produce an Annual
Reconciliation Report (subject to any modifications necessary to deal with
mid-year termination, where relevant) showing the information listed in Clauses
6.13.2.1 to 6.13.2.7 above for the Contract Year up to the date of termination,
within sixty (60) Calendar Days of such date of termination.  6.16.2The Contractor
shall propose an equitable apportionment of the ASFL for the then current
Contract Year for each Site based on progress as against the costs, scope and
schedule in the then current Contract Year of the LTP for each Site in
accordance with Paragraph 6 (Accounting Basis) of Part 4 of the Finance
Schedule (Costs Principles and Procedures). If the Parties fail to agree on
such apportionments proposed by the Contractor, the matter shall be resolved
and determined in accordance with the Dispute management Schedule.  112


6.16.3The Contractor and the Authority shall comply with the provisions of
Clauses 6.14.2, 6.14.3 and 6.14.4 above.  6.16.4Within fourteen (14) Calendar Days of agreement or determination of the
Annual Reconciliation Reports the Authority shall, acting reasonably, determine
the amount of Incentive Fee for each Site to which the Contractor is entitled,
taking account of the profile of the PBIs in the context of mid-year
termination of the Contract and of the Annual Reconciliation Report agreed or
determined pursuant to Clause 6.16.3 above and in accordance with Part 2
of the Finance Schedule (Use of Performance Based Incentives).  6.16.5Within fourteen (14) Calendar Days of the agreement or determination of the
Incentive Fee to which the Contractor is entitled the Authority shall calculate
the Year End Sum in accordance with Clause 6.11.8 (Payments to Parent) above.
If the Year End Sum is a positive figure then the Authority shall pay an amount
equal to the Year End Sum into the Contractors Fee Account within thirty (30)
Calendar Days of the Authoritys calculation of the Year End Sum. If the Year
End Sum is a negative figure then the Authority shall serve a Demand on the
Parent Body Organisation requiring that the Parent Body Organisation pays an
amount equal to the Year End Sum to the Authority within thirty (30) Calendar
Days of receipt of such Demand.  6.16.6Notwithstanding the termination of this Contract, the Authority hereby
gives its consent to the Contractor paying the Year End Sum (if a positive
figure) to the Parent Body Organisation unless for the Contractor to do so
would be contrary to Law.  6.17DIRECT AND INDIRECT TAXATION  6.17.1Tax general  6.17.1.1The Contractor agrees to take all
reasonable actions to meet its Taxation compliance obligations, and in
particular to assist in the reduction or elimination of any irrecoverable
Taxation.  6.17.2 Corporation Tax  The Contractor:  6.17.2.1agrees to prepare and submit to HMRC corporation tax computations on the
basis of the principles agreed between HMRCand the Authority in the Code of Practice 10
Submission (theCOP 10);  6.17.2.2undertakes not to seek agreement
from HMRC to a treatment of any item in the corporation tax computations which
is inconsistent with the COP 10, unless the Authority expressly consents in
writing.  6.17.2.3shall
produce a tax pack in respect of the accounting records maintained by the SLC
on behalf of the Authority in the form and to the frequency and timescales
reasonably required by the Authority and respond to any queries on a timely
basis such that the Authority is able to meet its taxation obligations  113


6.17.3 VAT  6.17.3.1The Contractor agrees to charge VAT, issue VAT invoices and comply with
VAT compliance obligations on the basis of the VAT Agreement and in particular:  6.17.3.1.1agrees to register and maintain registration for the purposes ofthe VATA;  6.17.3.1.2agrees properly to charge VAT and issue VAT invoices in respect of
supplies made to Third Party customers;  6.17.3.1.3agrees properly to charge VAT and issue VAT invoices in respect of the
reimbursement of Allowable Costs by the Authority;  6.17.3.1.4agrees properly to charge VAT and issue VAT invoices and credit notes as
appropriate in respect of the Incentive Fee;  6.17.3.1.5agrees properly to prepare and submit VAT returns on a timely basis to HM
Customs and Excise and to seek recovery as far as possible of VAT incurred in
respect of goods and services supplied to the Contractor; and  6.17.3.1.6agrees not to act in any way
inconsistently with the principles set out in this Contract.  6.17.3.2The Authority shall charge VAT in respect of the fee for the Property
Licence for the Sites and the fee forthe licence of the Authority IP to the Contractor,
and shall properly issue VAT invoices in respect thereof.  6.17.3.3The Authority warrants that it
has elected to waive exemption from VAT in accordance with the provisions of
Paragraph 2 of Schedule 10 to VATA in respect of the Sites.  6.17.4Withholding Taxes  6.17.4.1Any payment made by the Authority or the Contractor under, or pursuant to
the terms of, this Contract shall be made free and clear of all taxation
whatsoever save only for any deductions or withholdings required by applicable Law.  6.17.4.2The Authority warrants that it is
a company resident in the United Kingdom for the purposes of Part 15 of
the Income Tax Act 2007.  6.17.4.3The Contractor warrants that it
is a company resident in the United Kingdom for the purposes of Part 15 of
the Income Tax Act 2007.  6.17.4.4Where the Contractor is or will
be required to account under this Contract to the Authority in respect of any
receipt from a Third Party, and such receipt is or may be subject to deductions
or withholdings in respect of Taxation, the Contractor is required to take
reasonable action necessary to  114


obtain the payment without such deduction or
withholding, or to recover all or part of the deduction or withholding.  6.17.5Employee Taxes  The Contractor undertakes properly
to make all National Insurance Contributions and sums payable toHMRCunder the PAYE system in respect of emoluments and benefits paid or
payable, and to make all deductions and retentions as should be made in
accordance with the applicable Law.  6.17.6Tax Returns  The Contractor agreesthat the Authority may, at the
Authoritys request, review tax returns and tax correspondence prior to their
submission to the relevant tax Authority and that the Contractor will take into
account the Authoritys reasonable comments provided that the timing of the
provision of such comments takes into account any deadline for the relevant
submission of which the Authority is aware and provided that the tax return or
tax correspondence relates to a matter for which the Authority has financial
responsibility.  6.17.7Construction Industry Scheme Regulations  6.17.7.1For
the purposes of this Clause 6.17.7, CIS means the scheme prescribed by
Chapter IV of Part XIII of the Income and Corporation Taxes Act 1988
and/or the scheme prescribed by Chapter 3 of Part 3 of the Finance
Act 2004, in either case to the extent that such scheme is in force.  6.17.7.2The
Contractor shall comply with the obligations imposed on it by the CIS and the
obligation of the Authority to make any payment under this Contract is subject
to the provisions of the CIS.  115


PART 6A : FINANCE (Post-Sale)  6A.1Funding Limits  The
Contractor must fulfil its obligation to perform the Tasks and its other
obligations under this Contract within the SLC Annual Funding Limit, Current
Budget, Capital Budget and PSWBS Category Levels (in each case as amended in
accordance with Part 2 (Setting the LTP and Change Control) of the
Programme Management Schedule if applicable) set by the Authority for each
Contract Year as specified in Part 1 of the Finance Schedule (Funding
Limits and Available Incentive Fee).  6A.2.Determination of Funding Limits and Compliance with Funding Limits  6A.2.1Prior to each Contract Year, the Authority shall determine and notify the
Contractor of the SLC Annual Funding Limit and Annual Site Funding Limits, the
Current Budget and the Capital Budget for that Contract Year in accordance with
Part 2 of the Programme Management Schedule (Setting the LTP and Change
Control).  6A.2.2Subject to Clause 6A.2.3 below, if the Contractor breaches the SLC Annual
Funding Limit and/or Current Budget without the express written consent of the
Authority obtained pursuant to Clause 2.6 (Setting the LTP and Change Control),
the costs incurred in excess of such SLC Annual Funding Limit and/or Current
Budget, as applicable, shall be Disallowable Costs.  6A.2.3To the extent that the Contractors breach of the SLC Annual Funding Limit
and/or Current Budget arises as a direct result of an event listed at Paragraph
11 of Part 2 (Changes that the Authority Cannot Refuse) of the Programme
Management Schedule (Setting the LTP and Change Control) then the costs incurred
in excess of such SLC Annual Funding Limit and/or Current Budget shall not be
Disallowable Costs  6A.3Restrictions on Payment to Parent Body Organisation  Subject to
Clauses 6A.12.6 (Payments to Parent), the Contractor shall not without the
prior written consent of the Authority make any payment to the Parent Body
Organisation  6A.4Other Financial Restrictions  6A.4.1The Contractor shall not without the prior written consent of the
Authority:  6A.4.1.1dispose, let or otherwise part with the possession of the whole of or any
part of the Sites, business, undertaking or asset including any asset subject
to a finance or operating lease;  6A.4.1.2make any change to its accounting reference date;  6A.4.1.3make any change to the Accounting Policies and Procedures save as required
by applicable Law, UK generally accepted accounting principles or HM Treasurys
Government Reporting Requirements;  6A.4.1.4create or permit to subsist any Security Interest over any Authority Assets
or give any guarantee or indemnity to or for the benefit of any person or
otherwise assume liability or become obliged (actually or contingently) in
respect of any obligation of any other person, in each case other than as
permitted by this Contract save that nothing in this Clause 6A.4.1.4 is
intended to prevent the creation of any liens in the course of performance of
this Contract;  116


6A.4.1.5save for borrowings under an Approved Working Capital Facility, borrow
(including intra-group) or make any payment under any intra-group borrowings;  6A.4.1.6create or acquire any subsidiary or dispose of any shareholding in a
subsidiary or make or have any investment in any other entity, except for the
deposit of cash in the Contractors Fee Account, or the Contractors Payment
Account ;  6A.4.1.7commence
any litigation or arbitration other than:  6A.4.1.7.1in accordance with Clause 7.6 (Necessary Consents), Part 8
(Intellectual Property) or Clause 1.25 (Claims Handling);  6A.4.1.7.2in accordance with the Dispute Resolution Procedure;  6A.4.1.7.3in any attempt to commence judicial review proceedings
against the Authority in connection with this Contract;  6A.4.1.7.4to challenge any threatened or actual revocation of the
Nuclear Site Licence or any other regulatory permit or consent which is
essential to the Contractors ability to operate any Site or carry out the
Commercial Operations Tasks in accordance with Law; or  6A.4.1.7.5to apply for or resist or join into an injunction which the
Contractor, acting reasonably, considers urgent and necessary to the Contractors
performance of its obligations to the Authority;  6A.4.1.8incur any
liability or financial indebtedness except pursuant to an Approved Working
Capital Facility or as permitted by this Contract;  6A.4.1.9make any
loan or grant any credit, or have or permit to subsist any loan or any credit,
to any person (other than the deposit of cash with a financial institution or
Office of the Paymaster General as permitted by this Contract);  6A.4.1.10enter into any finance or operating leases;  6A.4.1.11notwithstanding the Permitted Activities, enter into any Customer Contract
or Subcontract where a disproportionate element of liability, cost or benefit
is likely to crystallise after the expiry of this Contract; and  6A.4.1.12make payment of any management or other charges to the Parent Body
Organisation or to any of its Affiliates:  6A.4.1.12.1in excess of those set out in Subcontracts specifically approved by the
Authority pursuant to Clause 2.7 (Subcontracting/Procurement);  6A.4.1.12.2unless under an Existing Agreement which is not a Recent Existing
Agreement;  6A.4.1.12.3unless in respect of a Recent Existing Agreement which is awaiting the
Authoritys review pursuant to Clause 2.10 (Assumption of Existing Agreements);  117


6A.4.1.12.4in excess of those set out in Recent Existing Agreements approved or
amended by the Authority pursuant to Clause 2.10 (Assumption of Existing
Agreements);  6A.4.1.12.5unless pursuant to Clauses 6A.12.6 (Payments to Parent); or  6A.4.1.12.6unless as agreed under an Advance Agreement;  6A.4.1.13undertake hedging activities (except in accordance with the Currency
Hedging Strategy).  6A.4.2For the purposes of Clause 6A.4 (Other Financial Restrictions), other than
where the Authority has expressly given or withheld its consent in writing, the
Contractor shall be deemed to have the prior written consent of the Authority
to carry out any of the activities in Clauses 6A.4.1.1 to 6A.4.1.13 (Other
Financial Restrictions) to the extent the relevant activity is expressly:  6A.4.2.1set out in
the then current Contract Year of the LTP;  6A.4.2.2contained
in a Subcontract or Customer Contract which is specifically approved by the
Authority. For the avoidance of doubt and notwithstanding any other provision
of this Contract, any Subcontract or Customer Contract which enables the
Contractor to do any of the matters set out in Clause 6A.4 (Other Financial
Restrictions) requires the approval of the Authority notwithstanding the
Permitted Activities;  6A.4.2.3contained
in an Internal Procedure reviewed by the Authority and accepted or deemed to
have been accepted by the Authority in accordance with Clause 2.8 (Contractors
Internal Procedure);  6A.4.2.4save in
the case of Clause 6A.4.1.11, a Permitted Activity or otherwise approved by the
Authority in accordance with Clause 3.6A.2 (Authoritys right to be consulted
in respect of Customer Contracts); or  6A.4.2.5in the
case of Clause 6A.4.2.1, permitted by Clause 6A.4.1.12.5.  6A.5Historical Costs  6A.5.1Without prejudice to Clause 6A.5.4, the Contractor shall determine whether
any cost, claim or liability which relates to the period prior to 1 April 2005
falls within the definition of a BNF Historical Cost or a Contractor Historical
Cost or a BNF Historical Trading Cost or a Contractor Historical Trading Cost,
in accordance with the provisions of the Overarching Costs Management
Agreement.  6A.5.2The Contractor shall mitigate, to the extent reasonably possible, all
Contractor Historical Costs and, subject to Clause 6A.7 in respect of
Exceptional Costs, meet such Contractor Historical Costs subject, where
relevant, to the provisions of Clause 1.25 (Claims Handling).  6A.5.3Where the Contractor, in error, has paid a BNF Historical Cost or a BNF
Historical Trading Cost the Contractor shall reclaim such BNF Historical Cost
or a BNF Historical Trading Cost from the relevant BNF Company in accordance
with the terms of the Overarching Costs Management Agreement. The Contractor
shall pay any amounts reclaimed pursuant to this Clause 6A.5.3 to the Authority
as Category I Revenue.  118


6A.5.4The treatment of pension deficit contributions in relation to the
Applicable Schemes shall not be dealt with under this Clause 6A.5 (Historical
Costs). Such deficit contributions shall be made in accordance with the
Schedule of Contributions for the relevant Applicable Scheme prepared under
section 58 Pensions Act 1995 or section 227 Pensions Act 2004 together with any
other obligations as to funding imposed by the documents governing the
Applicable Schemes.  6A.6Cashflow  6A.6.1Costs and Capital  6A.6.1.1Working Capital  6A.6.1.1.1The Contractor shall be responsible for ensuring that it has
sufficient working capital to enable it to meet its obligations under the
Contract.  6A.6.1.1.2The Contractor shall make payments to creditors as they Fall
Due and in accordance with the Government Payment Obligations (save as
otherwise agreed by the Authority in writing) but excluding any costs properly
to be met from a Customer Ringfenced Account  6A.6.1.1.3Unless the Authority approves otherwise in writing, the
working capital required under Clause 6A.6.1.1.1 shall be provided by the
Contractor entering into one or more Approved Working Capital Facilities.  6A.6.1.1.4All drawings under an Approved Working Capital Facility
shall be transferred only into the Contractors Payment Account.  The Contractor shall pay creditors out of the
Contractors Payments Account including, without limitation, Working Capital
Costs.  6A.6.2Cashflow Forecasting  6A.6.2.1The
Contractor shall submit to the Authority a cashflow forecast in a form and at a
frequency to be determined by the Authority, acting reasonably, and notified to
the Contractor from time to time.  6A.6.2.2The
timeliness and accuracy of the cashflow forecast as determined in accordance
with Clause 6A.6.2.1. as compared with the Monthly Invoice and the Contractors
requests for payment under Clause 6A.7 as well as the Contractors adherence to
the Authoritys reasonable requirements from time to time (which the Authority
shall notify to the Contractor) shall be a criterion under which 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) but declaring that in any Contract Year the amount by which the
Authority shall be entitled to reduce the Incentive Fee on the basis of such
criterion shall be limited to the sum being 50% of the Total Incentive Fee
payable to the Contractor in respect of such Contract Year for the Sixth Site.  119


6A.7Exceptional Costs  6A.7.1Subject to the Contractor complying with the provisions of Clauses 6A.7.2
and 6A.7.3 the Authority acknowledges that it is responsible for providing the
funds to the Contractor to enable it to pay creditors in so far as the relevant
obligations to make payments to those creditors are in respect of Exceptional
Costs including Exceptional Historical Costs and Exceptional Pension
Costs.  The provision of such funds is to
be made in accordance with Clause 6A.7.2.1 in respect of Exceptional Costs
other than Exceptional Historical Costs and Exceptional Pension Costs, Clause
6A.7.2.2 in respect of Exceptional Historical Costs and Clause 6A.7.3 in
respect of Exceptional Pension Costs.  6A.7.2.Information  6A.7.2.1If the Contractor becomes aware that it will incur an Exceptional Cost , it
shall seek the Authoritys prior written consent to the incurrence of such a
Cost (an Exceptional Cost Agreement). 
The Contractor shall not incur any Exceptional Cost without obtaining
the Authoritys prior written consent under an Exceptional Cost Agreement.  For the avoidance of doubt, the Authority
will make payment in relation to an Exceptional Cost only where the Authoritys
consent to the incurrence of such Exceptional Cost has been obtained pursuant
to an Exceptional Cost Agreement.  In
relation to any Exceptional Cost for which it seeks funding, the Contractor
shall provide to the Authority a VAT invoice or cost statement as appropriate
with all relevant supporting documents and any other applicable information in
such a form as the Authority may reasonably require from time to time (such
information being Exceptional Costs Information). Following receipt of the
Exceptional Cost Information, and subject to clause 6A.7.4 below, the Authority
will in respect of any Exceptional Cost not being an Exceptional Historical
Cost or an Exceptional Pension Cost make payment thereof by electronic transfer
of funds to the Contractors Payment Account no later than the date specified
in the notice issued by the Authority pursuant to Part 6 of the Finance
Schedule(Cashflow
Forecasting and Calculating Dates for Payment) as being the date by which such funds are to be credited to said
Contractors Payment Account.  6A.7.2.2In relation to any Exceptional Historical Cost for which it seeks funding,
the Contractor shall provide to the Authority in such form as the Authority may
reasonably require from time to time, as soon as it becomes aware of the
liability, a VAT invoice with all relevant supporting documents and any other
applicable information including the due date for payment to the supplier of
the Exceptional Historical Cost and the date on which the Authority will need
to have transferred funds into the Contractors Payment Account in order for
the amount in respect of that Exceptional Historical Cost to be paid to the
supplier (such information being Exceptional Historical Costs Information).
Following receipt of the Exceptional Historical Costs Information, and subject
to Clause 6A.7.4 below, the Authority will, at least the Working Day before the
due date for payment of the Exceptional Historical Cost to the supplier, make
payment in respect of the relevant Exceptional Historical Cost to the
Contractor by electronic transfer of funds to the Contractors Payments
Account.  6A.7.3In relation to any Exceptional Pension Costs for which it seeks funding,
the Contractor will provide to the Authority either :  120


6A.7.3.1details of the amount which the Contractor (or any subsidiary of the
Contractor) will be liable to pay under the schedule of contributions (prepared
under section 227 of the Pensions Act 2004) or under the governing documents of
the scheme; or  6A.7.3.2a demand for payment made in accordance with the Scheme Document of the
CNPP or, in respect of Applicable Schemes other than the CNPP, the governing
documents governing the Applicable Scheme,  as appropriate (and in such form
as the Authority may reasonably require from time to time such information
being Exceptional Pension Costs Information). 
As soon as the Contractor becomes aware of the Exceptional Pensions Cost
Information, and in any event no later than 8 (eight) Working Days before the
due date for payment by the Contractor, the Contractor will submit such
Exception Pensions Cost Information to the Authority.  Following receipt of the Exceptional Pension
Costs Information and subject to clause 6A.7.4 below, the Authority will, at
least the Working Day before the due date for payment of the Exceptional
Pension Costs by the Contractor, make payment in respect of the relevant
Exceptional Pension Costs to the Contractor by electronic transfer of funds to
the Contractors Payments Account.  The
Contractor shall immediately on receipt of the funds referred to herein remit
the same to the relevant pension fund.  6A.7.4The due date for payment of a sum otherwise due under Clause 6A.7.2 or
Clause 6A.7.3 (as applicable) shall be delayed to the date hereinafter
specified where the Authority acting reasonably has sought further information
from the Contractor (in addition to Exceptional Costs Information or
Exceptional Historical Costs Information or Exceptional Pension Costs
Information) which is necessary to enable the Authority to satisfy itself that
the Cost in relation to which the Contractor is seeking funds has been properly
incurred and/or is an Exceptional Cost. 
In such circumstances, the due date for payment of the amount in respect
of which clarification has been sought as aforesaid shall be the date falling five
(5) Working Days after the Authority receives to its reasonable
satisfaction the information sought under this Clause 6A.7.4 where such date is
later than the date at which the Exceptional Costs, the Exceptional Historical
Costs or the Exceptional Pension Costs would be due pursuant to Clause 6A.7.2
or 6A.7.3. Any dispute in relation to the repayment of amounts by the Authority
pursuant to this Clause 6A.7.4 will be resolved in accordance with Part 13
(Dispute Management).  6A.7.5Following its receipt of funds into the Contractors Payments Account from
the Authority pursuant to Clause 6A.7.4, the Contractor shall make payments in
respect of Exceptional Costs to creditors as soon as practicable and otherwise
in accordance with the Government Payment Obligations (save as otherwise agreed
by the Authority in writing).  6A.7ATrading Costs  The Contractor shall record on the relevant
Site Trading Ledger all costs to be treated as Trading Costs. The Contractor shall
be entitled to be reimbursed all Trading Costs correctly recorded on the
relevant Site Trading Ledger as Exceptional Costs to the extent that funds to
meet such costs have not been drawndown prior to the Sale Date. Provided that,
for the purposes of clause 6A.7 above, the Authority shall be deemed to have
consented to the incurrence of any Trading Costs.  121


6A.8Customer Ringfenced Accounts  6A.8.1The Contractor is entitled to draw down funds from Customer Ringfenced
Accounts in accordance with the legally binding provisions and/or documented
understandings with the relevant customer(s) (where inconsistent with
legally binding provisions the legally binding provisions shall prevail)
governing withdrawal from such Customer Ringfenced Accounts to meet such costs
as it is entitled to meet from Customer Ringfenced Accounts.  6A.8.2For the avoidance of doubt, funds in Customer Ringfenced Accounts shall not
constitute Category I Revenue or Category II Revenue unless or until released
from such Customer Ringfenced Accounts as revenue in accordance with the terms
governing the operation of such accounts.  6A.9Determination of Revenue Category  6A.9.1Subject to Clause 6A.9.4, in each Contract Year during the setting of the
LTP for the next Contract Year pursuant to Paragraph 7(NTWP and LTP)of Part 2 of the Programme Management Schedule (Setting
the LTP and Change Control), the Authority shall in respect of any Site or
Sites be entitled, acting reasonably and in consultation with the Contractor,
to:  6A.9.1.1amend the
definition of Category II Revenue so that revenue which would otherwise have
fallen into the definition of Category I Revenue falls into the definition of
Category II Revenue for all succeeding Contract Years; and/or  6A.9.1.2amend categories of revenue within or delete categories of revenue from the
definition of Category I Revenue and/or Category II Revenue for all succeeding
Contract Years.  6A.9.2If the amount of Category II Revenue received by the Contractor to date in
the current Contract Year exceeds the amount forecast by the Contractor in the
LTP as receivable for that Contract Year in respect of any Site as set out in
Finance Schedule Part 1 (Funding Limits and Available Incentive Fee), the
Authority shall be entitled in respect of such Site at any time thereafter in
the current Contract Year, acting reasonably, to treat the excess revenue
falling within the definition of Category II Revenue for such Site as revenue
falling into the definition of Category I Revenue for any Site.  6A.9.3Prior to setting the Funding Limits for the next Contract Year in
accordance with Paragraph 7(NTWP and LTP)of Part 2 of the Programme Management Schedule (Setting the LTP and
Change Control), the Authority shall (acting reasonably and in consultation
with the Contractor) be entitled at any time to add new categories of revenue
to the definition of Category I Revenue and/or Category II Revenue to the
extent that such categories of revenue are not already accounted for as
Category I Revenue or Category II Revenue in the current Contract Years LTP.  6A.9.4The assumption is that monies received or receivable by the Contractor
shall predominantly be treated as Category I Revenue. Any dispute as to whether
monies received or receivable by the Contractor are to be treated as Category I
Revenue or Category II Revenue shall be determined by the Authority acting
reasonably.  6A.9ASurplus ESTL Funds  6A.9A.1Without prejudice to clause 6A.11.4 below, if the Authority, acting
reasonably, considers that the balance of funds on ESTLs Capital Adequacy
Account is surplus to ESTLs Capital Adequacy Requirements, or if amounts on
deposit pursuant to any of the Cash Credit Support  122


Agreements is in excess of any restrictions imposed by the Authority
pursuant to Clause 3.6 and/or set out in the Permitted Activities and the
Trading Limits, then the Authority shall be entitled to require the Contractor
or ESTL (as applicable) to withdraw such surplus funds from the Capital
Adequacy Account or the relevant account in relation to the relevant Cash
Credit Support Agreement and pay such surplus funds to the Authority as
Category 1 Revenue within twenty-one (21) Calendar Days of the Contractors or
ESTLs (as applicable) withdrawal of such surplus funds.  6A.10Receipts Accounts  6A.10.1Unless specifically instructed in writing by the Authority, the Contractor
shall pay all Category I Revenue and Category II Revenue into the Contractors
Receipts Accounts on receipt of such Revenue and shall transfer the entire
balance of the Contractors Receipts Account on a daily basis to the OPG
Receipts Account.  6A.10.2If the Contractor becomes aware that an amount so transferred to the OPG
Receipts Account was paid into the Contractors Receipts Account in error and
so should not have been so transferred, then the Contractor shall inform the
Authority immediately of the amount, the date of transfer and the reason for
the error (an Overpayment Notice).  The
Contractor will use all reasonable endeavours to make such claim within 15 days
following the end of the month in which a receipt has been transferred by the
Contractor to the OPG Receipts Account under Clause 6A.10.1 above.  In the event that, exercising such reasonable
endeavours, the Contractor is unable to make such claim as aforesaid, the
Contractor shall make such claim as soon as reasonably practicable after the
expiry of fifteen (15) days following the end of the month in which a receipt
has been transferred by the Contractor to the OPG Receipts Account under Clause
6A.10.1 above.  The Contractor will
provide along with the Overpayment Notice or as soon as reasonably practicable
following the Authoritys receipt of an Overpayment Notice all relevant
supporting documents and information (and in such a form) as the Authority may
reasonably require in order to satisfy itself that the payment into the
Contractors Receipts Account was made in error. As soon as reasonably
practicable following receipt of an Overpayment Notice and receipt of such
supporting documentation and information as the Authority may reasonably
require, the Authority shall repay the amounts paid in error as aforesaid into
the Contractors Receipt Account.  6A.10.3.If the Parties cannot agree whether an amount was paid into
the Contractors Receipts Account in error or if there is any disagreement
regarding the amount paid in error the matter shall be resolved in accordance
with Part 13 (Dispute Management).  6A.11Reimbursement  6A.11.1Basis of Reimbursement  6A.11.2Payment to the Contractor shall, except and to the extent otherwise set out
in the Finance Schedule or otherwise agreed between the Parties, be on the
basis of reimbursement of Allowable Costs incurred together with any Fee and/or
Incentive Fee due.  6A.11.3Allowable and Disallowable Costs  6A.11.3.1The Authority
acknowledges that it is responsible for reimbursing the Contractor for payments
in respect of Allowable Costs the Contractor makes to creditors out of the
Contractors Payments  123


Account or which are Transitional Balances (but not
in the case of payments properly to be met from a Customer Ringfenced Account
or in respect of Exceptional Costs) insofar as the relevant obligations to make
such payments were incurred in the Contractors performance of its obligations
under this Contract. Such reimbursement is to be made on the basis provided in
Clause 6A.12 (Invoicing and Payment).  6A.11.3.2The Contractor
acknowledges that it is not entitled to be reimbursed by the Authority under
Clause 6A.11.3.1 in respect of payments to creditors which are Disallowable
Costs and that, to the extent that the Authority has paid or reimbursed
Disallowable Costs or Costs claimed as Allowable Costs in excess of the Costs
referred to in Clause 6A.11.3.1, the Authority is entitled to be reimbursed by
the Contractor.  6A.11.3.3The Contractor
must determine whether a payment in respect of a Cost is an Allowable Cost or a
Disallowable Cost in accordance with Part 4 of the Finance Schedule (Costs
Principles and Procedures).  6A.11.3.4The Contractor
shall be entitled to agree in advance with the Authority as to whether certain
Costs it proposes to incur are Allowable Costs by entering into Advance
Agreements with the Authority pursuant to the process set out in Part 4 of
the Finance Schedule (Costs Principles and Procedures).  6A.11.3.5Should the
Contractor become aware that it has incorrectly determined an Allowable Cost as
a Disallowable Cost and accordingly wishes to claim such Cost as an Allowable
Cost, it shall be entitled to make such claim.  6A.11.3.6If the Parties cannot agree whether a particular Cost is an
Allowable Cost or a Disallowable Cost according to this Clause 6A.11.3 or Part 4
of the Finance Schedule (Costs Principles and Procedures), the matter shall be
resolved in accordance with Part 13 (Dispute Management).  6A.11.4ESTL Funds  6A.11.4.1Without prejudice to clause 6A.9A above, the Authority shall
be entitled to require the Contractor or ESTL (as applicable) to withdraw the
balance of any funds held on ESTLs Capital Adequacy Account and recorded on
the relevant site ledger (as applicable) and not paid out to creditors or
required to meet the Capital Adequacy Requirements or required to fund deposits
to be made pursuant to any of the Cash Credit Support Agreements (subject to
any restrictions imposed by the Authority pursuant to Clause 3.6 and/or set out
in the Permitted Activities and the Trading Limits) from the Capital Adequacy
Account and pay such surplus funds to the Authority as Category 1 Revenue
within twenty-one (21) Calendar Days of the Contractors or ESTLs (as
applicable) withdrawal of such surplus funds.  6A.11.5Performance Based Incentive Arrangements  6A.11.5.1The PBIs shall be
prepared and determined, and the PBIs shall be calculated and paid, in
accordance with Part 2 (Use of Performance Based Incentives) of the
Finance Schedule.  124


6A.11.5.2The Contractor
may propose, and the Authority may require the Contractor to bring forward,
changes to PBIs at any time during the Contract Year in accordance with Part 2
of the Finance Schedule (Use of Performance Based Incentives).  6A.11.6Incentive Fee  6A.11.6.1The Incentive Fee
shall be calculated, in accordance with Part 2 (Use of Performance Based
Incentives) of the Finance Schedule.  6A.11.7Alternative Basis of Remuneration  6A.11.7.1Should the
Parties agree to utilise an alternative basis of remuneration to reimbursement
of Allowable Costs and Incentive Fee they shall as appropriate agree:  6A.11.7.1.1         the basis of remuneration; and  6A.11.7.1.2the work or services to
which it relates; and  6A.11.7.1.3the terms and conditions
upon which such work or services is to be performed; and  6A.11.7.1.4to the extent the terms of
this Contract are not applicable and/or to the extent that any additional terms
or conditions are required or require to be amended, the deletions from and
additions to and amendments of this Contract; and  6A.11.7.1.5the relevant rates and
prices, any profit, overhead and incentive arrangements; and  6A.11.7.1.6the method of and basis for
variation and adjustment  and the Parties
shall document the same in a written agreement to be attached as a supplemental
agreement to this Contract.  6A.11.7.2For the avoidance
of doubt any such supplemental agreement:  6A.11.7.2.1shall apply only in respect
of the work and services specified therein and shall have no other effect upon
the terms of this Contract; and  6A.11.7.2.2shall contain provisions
allocating responsibility for the Costs of additional works needed as a
consequence of the Contractors failure to comply with the requirements of this
Contract in accordance with Part 7 of the Finance Schedule (Provisions Applying to Defective Performance of
Alternative Remuneration Tasks).  6A.12Invoicing and Payment  6A.12.1Invoicing of
Allowable Costs and Other Costs  6A.12.1.1Not
later than the earlier of the twelfth (12th) Working Day or the
fifteenth (15th) Calendar Day of the Month immediately following the relevant
Month during which the Contractor incurs Allowable Costs for which it seeks
reimbursement in accordance with Clause 6A.11.3.1 and Exceptional Costs for
which it seeks payment the Contractor will issue a VAT invoice (theMonthly Invoice).  125


6A.12.1.2In
the event that any Monthly Invoice is received by the Authority after the
earlier of the twelfth (12th) Working Day or the
fifteenth (15th)
Calendar Day of the Month immediately following the relevant Month during which
the Contractor incurs Allowable Costs for which it seeks reimbursement in
accordance with Clause 6A.11.3.1 and Exceptional Costs for which it seeks payment,
such Monthly Invoice shall be deemed to have been received by the Authority on
the twelfth (12th) Working Day of the Month following receipt of the same.  The dates for payment of the Allowable Costs
and Exceptional Costs stated in such Monthly Invoice shall be amended to
reflect the dates for payment which would have been stated therein had the
Allowable Costs and Exceptional Costs to which it relates been reimbursed and
due to be paid in the relevant Month immediately prior to the date at which such
Monthly Invoice is deemed to have been received by the Authority.
Notwithstanding the foregoing, the Authority shall use all reasonable
endeavours to make payment of all sums due consequent to such Monthly Invoice
as soon as reasonably practicable in order to minimise the Contractors
liabilities in respect of Working Capital Costs.  6A.12.1.3The
Monthly Invoice shall be prepared in accordance with Clause 6A.12.1.4 and shall
be accompanied by  6A.12.1.3.1a description of the work and/or services to which
it relates.  6A.12.1.3.2a breakdown setting out in reasonable detail the
Allowable Costs incurred and the Exceptional Cost to be paid and an explanation
of what they relate to;  6A.12.1.3.3adequate documentation supporting the sums claimed,
and  6A.12.1.3.4any other information or documentation that the
Authority may from time to time require and notify to the Contractor.  6A.12.1.3.5details of the due dates for payment of Exceptional
Costs and Allowable Costs together with the amount of such Exceptional Costs
and Allowable Costs gross and net of VAT all in accordance with Part 6 of
the Finance Schedule (Cashflow Forecasting and
Calculating Dates for Payment); and  6A.12.1.3.6an analysis of all amounts paid by the Authority
against amounts due on the invoice in accordance with Part 6 of the
Finance Schedule (Cashflow Forecasting and Calculating Dates
for Payment)  6A.12.1.4The
Monthly Invoice shall be prepared on an accruals accounting basis in accordance
with UK GAAP (and not a cash accounting basis) save in respect of purchase of
stock as provided below.  Any Allowable
Costs will be shown exclusive of any VAT payable by the Contractor and the
Monthly Invoice shall calculate the VAT payable by the Authority to the
Contractor in respect of such Allowable Costs.  126


In respect of
purchases of stock by the Contractor, the Monthly Invoice shall be adjusted to
reflect the value (excluding VAT) of actual purchases during the relevant Month
(as compared with value of stock consumed in that Month). Such stock shall be
the property of the Authority and the Monthly Invoice will treat its purchase
by the Contractor on behalf of the Authority as a taxable supply.  6A.12.1.5Subject
to Clause 6A.12.1.2 the Authority shall reimburse the Contractor in respect of
Allowable Costs as shown in each Monthly Invoice complying with Clauses
6A.12.1.3 and 6A.12.1.4 in accordance with the provisions of Part 6 of the
Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment) to
this Contract. Payment shall be
made by electronic transfer of funds into the Contractors Payments Account.  6A.12.1.6The
due date for payment of a sum otherwise due under Clause 6A.12.1.5 shall be
delayed to the date hereinafter specified where the Authority has sought
further information from the Contractor (in addition to that included or
accompanying any Monthly Invoice) to enable the Authority to satisfy itself
that the Cost in relation to which the Contractor is seeking reimbursement has
been properly incurred as an Allowable Cost,. 
In such circumstances, the due date for payment of the Allowable Cost in
respect of which clarification has been sought shall be the date falling five (5) Working
Days after the Authority receives, to its reasonable satisfaction, the
information sought under this Clause 6A.12.1.6 where such date is later than
the date at which such Allowable Cost would be due to be reimbursed by the
Authority pursuant to Clause 6A.12.1.5. 
Any dispute in relation to the reimbursement of amounts to the
Contractor pursuant to this Cluase 6A.12.1.6 will be resolved in
accordance with Part 13 (Dispute Management).  6A.12.1.7Where
the Contractor becomes aware that an amount in relation to which it is to seek
reimbursement under Clause 6A.12.1 (Invoicing of Allowable Costs and Other
Costs) and Clause 6A.7 (Exceptional Costs) exceeds the relevant amount
specified in the cashflow forecast submitted by the Contractor under Clause
6A.6.2 (Cashflow Forecasting) the Contractor will take immediate steps to
notify the Authority that the amount exceeds the relevant amount specified in
the cashflow forecast.  Upon receiving
the notice, the Authority will review its cash flow position with a view to
reimbursing the Contractor in accordance with Clauses 6A.12.1 and 6A.7. Where
reimbursement under Clauses 6A.12.1 and 6A.7 is not possible as a result of the
Authoritys cash flow position, the Authority will not reimburse the Contractor
in accordance with Clauses 6A.12.1 and 6A.7 in respect of the amount which
exceeds the relevant amount specified in the cashflow forecast. In this event,
the Contractor and the Authority will use their best endeavours to enable the
Authority to reimburse to the Contractor the amount which exceeds the relevant
amount specified in the cashflow forecast as soon as practicable after any
reimbursement would have been due under Clauses 6A.12.1 and 6A.7 but for that
amount  127


exceeding the
relevant amount specified in the cashflow forecast and the due and final dates
in respect of such amounts shall be delayed accordingly.  6A.12.2Transitional Balances  6A.12.2.1The
Contractor shall deliver to the Authority by no later than the earlier of the
twelfth (12th) Working Day or the fifteenth (15th) Calendar Day following the
Sale Date a statement which specifies all Transitional Balances of which the
Contractor is aware (the Provisional Transitional Balance Statement) together
with a schedule specifying the dates which the Contractor proposes to be the
dates at which the Authority is to reimburse the Transitional Balances
specified in the Provisional Transitional Balance Statement (the Provisional
Payment Schedule) which Provisional Transitional Balance Statement and
Provisional Payment Schedule shall be in accordance with the requirements of Part 6
of the Finance Schedule (Cashflow Forecasting and Calculating Dates for
Payment).  6A.12.2.2The
Contractor shall notify the Authority as soon as it becomes reasonably apparent
that the date at which they shall become due to make payment of the sum
comprised in any Transitional Balance to their supplier will be after the
Transitional Balance Payment Date. In such circumstances the Transitional
Balance Payment Date shall be revised in accordance with Part 6 of the
Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment).  6A.12.2.3The
Contractor shall notify the Authority that it is seeking payment of any
Transitional Balance and shall within such notification identify the
Transitional Balance Payment Date for such Transitional Balance. Such
notification shall be accompanied by all records and information necessary to
establish either;  6A.12.2.3.1that the amount of the Transitional Balance stated
in the Provisional Transitional Balance Statement is an accurate valuation of
the sum due to be reimbursed to the Contractor in respect of the Allowable Cost
to which the Transitional Balance relates; or  6A.12.2.3.2where the amount stated in the Provisional
Transitional Balance Statement is not an accurate valuation as detailed at
Clause 6A.12.2.3.1, the sum which is the proper amount due to be reimbursed to
the Contractor in respect of the Allowable Cost to which the Transitional
Balance relates.  6A.12.2.4The
Authority shall make payment of any Transitional Balances properly due as
Allowable Cost at the later of the Transitional Balance Payment Date or the
date falling 10 Working Days after receipt by the Authority of the notification
and all records and information to be submitted by the Contractor pursuant to
Clause 6A.12.2.3  6A.12.2.5The
Contractor shall comply with the whole requirements of Part 6 of the
Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment).  128


6A.12.3Termination Invoice  6A.12.3.1The
Contractor shall deliver to the Authority by no later than the twelfth (12th)
Working Day following the last day of the final Contract Year a VAT invoice
(the Provisional Termination Invoice) which specifies all Allowable Costs
incurred of which the Contractor is aware for which it would have sought
reimbursement in accordance with Clause 6A.12.1.1 but in respect of which it
has not delivered to the Authority a Monthly Invoice. The provisions of clause
6A.12.1.2 to 6A.12.1.6 will apply to the Provisional Termination Invoice as if
references therein to Monthly Invoice were references to Provisional
Termination Invoice.  6A.12.3.2The
Contractor shall deliver to the Authority by no later than the sixtieth (60th)
Working Day following the last day of the final Contract Year a VAT invoice
(the Final Termination Invoice) which specifies all Allowable Costs other
than Allowable Costs specified in the Provisional Termination Invoice for which
it would have sought reimbursement in accordance with clause 6A.12.1.1 but in
respect of which it has not delivered to the Authority a Monthly Invoice.  The provisions of clause 6A.12.1.2 to
6A.12.1.6 will apply to the Final Termination Invoice as if references therein
to Monthly Invoice were references to Final Termination Invoice.  6A.12.4Payment of
Incentive Fee  6A.12.4.1Subject
to Clauses 6A.12.4.3, 6A.12.4.4, 6A.12.4.5 and 6A.12.4A.4 below, the Authority
will pay 5 (five) per cent of the Contractors Available Incentive Fee for the
relevant Contract Year on the last Working Day in each Month within that
Contract Year in respect of provisionally awarded Incentive Fee. The Contractor
will issue a VAT invoice for the net amount of the Incentive Fee plus VAT.  6A.12.4.2In
addition to any payments made by the Authority pursuant to Clause 6A.12.4.1
above, where any amount of Incentive Fee is awarded provisionally pursuant to
Paragraph 3.10 (Provisional Payment of Incentive Fee) of Part 2 of the
Finance Schedule (Use of Performance Based Incentives), the Contractor will
submit a VAT invoice to the Authority requesting payment of such amount into
the Contractors Fee Account and, subject to Clause 6A.12.4.3 below, the
Authority will make such payment.  6A.12.4.3Notwithstanding
Clauses 6A.12.4.1 and 6A.12.4.2 above, the Authority will not pay more than 60%
of the Available Incentive Fee to the Contractor in respect of provisionally
awarded Incentive Fee in any Contract Year.  6A.12.4.4The
Authority may during the seventh Month and during the tenth Month of each
Contract Year require the Contractor to provide such information as the
Authority may reasonably require in order to satisfy itself so far as
reasonably practicable at that stage of the Contract Year that the total of the
payments made by the Authority pursuant to Clause 6A.12.4.1 for the Contract
Year will not exceed the total of the Incentive Fee payable for such Contract
Year.  In the event that the Authority  129


reasonably
believes on the basis of such information or otherwise that the total of the
payments made by the Authority pursuant to Clause 6A.12.4.1 for the Contract
Year will exceed the amount of the Authoritys reasonable estimate of the total
Incentive Fee which will be payable in respect of such Contract Year, the
Authority may decide to reduce its monthly payment pursuant to Clause 6A.12.4.1
so that the total of such payments for the Contract Year is equal to the amount
being the Authoritys reasonable estimate of the total Incentive Fee which
shall be payable in respect of such Contract Year.  6A.12.4.5In
the event that the Authority reasonably believes on the basis of the
information provided pursuant to Clause 6A.12.4.4 or otherwise that the total
of the payments made by the Authority pursuant to Clause 6A.12.4.1 in any
Contract Year exceeds the Authoritys reasonable estimate of the total
Incentive Fee payable in respect of such Contract Year, the Authority shall be
entitled to make no further payments during such Contract Year pursuant to
Clause 6A.12.4.1 and may during the remaining period of such Contract Year
deduct the amount by which the total of the payments so made exceeds the
Authoritys reasonable estimate as aforesaid from any amounts of Budgeted
Efficiency Gain Fee which would but for this provision remain to be paid
pursuant to clause 6A.12.4A.1.  6A.12.4A    Payment of Budgeted
Efficiency Gain Fee  6A.12.4A.1Subject to Clause
6A.12.4A.3, 6A.12.4A.4 and 6A.12.4.5, the Authority will pay 5 (five) per cent
of the Budgeted Efficiency Gain Fee for the relevant Contract Year on the last
Working Day in each Month within that Contract Year on account of Efficiency
Gain Fee.  The Contractor will issue a
VAT invoice for the net amount of the Budgeted Efficiency Gain Fee plus VAT.  6A.12.4A.2The Authority
will not pay more than 60% of the Budgeted Efficiency Gain Fee to the
Contractor on account of Efficiency Gain Fee in any Contract Year.  6A.12.4A.3The Authority may
during the seventh Month and during the tenth Month of each Contract Year
require the Contractor to provide such information as the Authority may
reasonably require in order to satisfy itself so far as reasonably practicable
at that stage of the Contract Year that the total of the payments made by the
Authority pursuant to Clause 6A.12.4A.1 for the Contract Year will not exceed
the total of the Efficiency Gain Fee payable for such Contract Year.  In the event that the Authority reasonably
believes on the basis of such information or otherwise that the total of the
payments made by the Authority pursuant to clause 6A.12.4A.1 for the Contract
Year will exceed 80% of the amount of the Authoritys reasonable estimate of
the total Efficiency Gain Fee which will be payable in respect of such Contract
Year, the Authority may decide to reduce its monthly payments pursuant to
Clause 6A.12.4A.1 so that the total of such payments for the Contract Year
is equal to the amount being 80% of the Authoritys reasonable estimate of the
total Efficiency Gain Fee which will be payable in respect of such Contract
Year.  130


6A.12.4A.4In the event that
the Authority reasonably believes on the basis of the information provided
pursuant to Clause 6A.12.4A.3 or otherwise that the total of the payments made
by the Authority pursuant to Clause 6A.12.4A.1 in any Contract Year exceeds the
Authoritys reasonable estimate of the total Efficiency Gain Fee payable in
respect of such Contract Year, the Authority shall be entitled to make no
further payments during such Contract Year pursuant to Clause 6A.12.4A.1 and
may during the remaining period of such Contract Year deduct the amount by
which the total of the payments so made exceeds the Authoritys reasonable
estimate as aforesaid from any amounts of provisionally awarded Incentive Fee
which would but for this provision remain to be paid pursuant to Clause
6A.12.4.1.  6A.12.5Contractors
Fee Account  Any interest accruing on
amounts in the Contractors Fee Account shall be for the account of the
Contractor.  6A.12.6Payments to Parent  6A.12.6.1Within
fourteen (14) Calendar Days of the Authoritys determination pursuant to Clause
6A.2 (Determination of Funding Limits and Compliance with Funding Limits) and
the final determination of Incentive Fee undertaken pursuant to Paragraph 3.11
(Final Determination of, and Adjustment to, Incentive Fee) of Part 2 of
the Finance Schedule (Use of Performance Based Incentives), taking account of
the Annual Reconciliation Reports, the Authority will calculate the Year End
Sum which shall be an amount equal to the Final Incentive Fee and the
Efficiency Gain Fee minus:  6A.12.6.1.1the Total Provisional Incentive Fee paid by the
Authority to the Contractor;  6A.12.6.1.1Athe Budgeted Efficiency Gain Fee paid by the
Authority to the Contractor;  6A.12.6.1.2an amount in respect of any Disallowable Costs not
otherwise reimbursed to the Authority; and  6A.12.6.1.3any amount owing from the Parent Body Organisation
to the Contractor or the Authority pursuant to this Contract or the Parent Body
Agreement.  6A.12.6.2If
the Year End Sum is a positive figure then the Authority shall pay an amount
equal to the Year End Sum into the Contractors Fee Account within thirty (30)
Calendar Days of the Authoritys calculation of the Year End Sum. If the Year
End Sum is a negative figure then the Authority shall serve a Demand on the
Parent Body Organisation requiring that the Parent Body Organisation pays an
amount equal to the Year End Sum to the Authority within thirty (30) Calendar
Days of receipt of such Demand.  6A.12.6.3If
the Year End Sum is a positive figure then the Contractor shall issue a VAT
invoice to the Authority for the sum as defined in 6A.12.6.2 plus VAT.  131


6A.12.6.4Upon
expiry or termination of this Contract, if the final form Annual Reconciliation
Report has been referred to the Dispute Resolution Procedure, the Authority
shall calculate the Year End Sum whether that be a positive or negative sum and
to the extent that such Year End Sum is undisputed Clause 6A.12.6.2 shall apply
in respect of that undisputed amount. 
Following agreement or determination of the disputed amounts under the
Annual Reconciliation Report, Clauses 6A.12.6.1 and 6A.12.6.2 shall apply as
appropriate.  6A.12.6.5The
Authority hereby gives its consent to the Contractor paying such amount of the
provisionally awarded Incentive Fee, the Budgeted Efficiency Gain Fee and of
the Year End Sum (if the Year End Sum is a positive figure) to the Parent Body
Organisation as the Contractor thinks fit and proper.  6A.12.7Payment  6A.12.7.1Sums
payable to the Contractor shall become due from the Authority to the Contractor
on the date or dates specified in Clauses 6A.7.2.1, 6A.7.2.2 and 6A.7.3 (all as
modified by the operation of Clause 6A.7.4); Clauses 6A.12.1.5 (as modified by
the operation of clause 6A.12.1.6); Clause 6A.12.2.4 and on the dates of the
invoices referred to in Clauses 6A.12.4.1 and 6A.12.4A.1 and shall (subject to
Clauses 6A.12.4.3) be paid by the Authority to the Contractor by the date or
dates specified or calculated in accordance with in Clauses 6A.7.2.1, 6A.7.2.2
and 6A.7.3 (all as modified by Clause 6A.7.4); Clause 6A.12.1.5 (as modified by
the operation of Clause 6A.12.1.6); Clause 6A.12.2.4 and the dates stated for
payment in Clauses 6A.12.4.1 and 6A.12.4A.1 (the Final Date for Payment).  6A.12.7.2Not
used  6A.12.7.3If
at any time the Authority fails to make any payment by the Final Date for
Payment then the Contractor shall so notify the Authority in writing and such
sum as remains unpaid shall bear interest at the Interest Rate from the date of
the Contractors notice referred to herein until the date the same is paid by
the Authority to the Contractor.  6A.12.7.4Without
prejudice to the Authoritys rights under Clauses 6A.7.4 and 6A.12.1.6 the
Authority shall be entitled to set off against any money otherwise due under
this Contract the amount of any claim for loss and/or expense which has actually
been incurred by the Authority by reason of any breach of or failure to observe
the provisions of this Contract by the Contractor provided always:  6A.12.7.4.1the amount of the set off has been quantified in
detail and with reasonable accuracy by the Authority: and  6A.12.7.4.2the Authority has given to the Contractor notice in
writing (the Effective Notice) specifying its intention to set off the amount
quantified in accordance with Clause 6A.12.7.4.1 and the grounds on which such
set off is claimed to be made.  Where
there is more than one ground the Authority shall state in the Effective Notice
each of the grounds on which the set off is claimed to be made and the  132


amounts
attributable to each of them.  The
Effective Notice shall be given not less than seven (7) days before the
money from which the amount is to be set off becomes due to the Contractor
provided that the Effective Notice shall not be binding insofar as the
Authority may amend it in preparing its pleadings for any Legal Proceedings.  6A.12.7.5The
rights of the Parties in respect of set off are fully set out herein and no
other rights whatsoever shall be implied as terms of this Contract relating to
set off.  6A.12.8Currency of Contract  All amounts of money in
this Contract are expressed in pounds sterling (£). If the United Kingdom joins
European Monetary Union any figure expressed in £ and sterling in this Contract shall be converted into
euro at the rate for conversion of sterling into euro established by the
Council of the European Union pursuant to the Treaty (including compliance with
rules relating to rounding in accordance with European Community
regulations) and any reference to a figure in £ or sterling shall mean
that figure adjusted into euro.  6A.13Funding Limits  6A.13.1Expenditure
and accruals shall attrite the Funding Limits in accordance with the provisions
of Part 4 of the Finance Schedule (Cost Principles and Procedures).  6A.13.2Within
Fourteen (14) Calendar Days of the end of each Month, the Contractor shall
provide the Authority with a report for each Site (in such a form and
containing such information as the Authority may reasonably require from time
to time) setting out each of the following in respect of the relevant previous
Month:  6A.13.2.1the
funds paid out by the Contractor from the Contractors Payments Account;  6A.13.2.2the
amounts received by the Contractor of Category I Revenue, Category II Revenue
or otherwise (including any amounts released as revenue form the Customer
Ringfenced Accounts);  6A.13.2.3the
amounts expended by the Contractor in the proper performance of its obligations
under this Contract in respect of Allowable Costs;  6A.13.2.4a
reconciliation between the Monthly Invoice sent to the Authority and cash
payments made by the Contractor;  6A.13.2.5any
payments made by the Authority pursuant to Clauses 6A.7.2 and 6A.7.3 to meet
Exceptional Costs ;  6A.13.2.6the
amounts drawn down from the Customer Ringfenced Accounts; and  6A.13.2.7any
movements into and out of the Foreign Exchange Accounts, and  6A.13.2.8an
analysis of the daily cash balances in the month against that forecast having
regard to the cashflow forecast agreed or determined pursuant to Part 6 of
the Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment).  133


with all relevant supporting
documents and any other applicable information (and in such a form) as the
Authority may reasonably require from time to time (each such reporting being a
Monthly Reconciliation Report),  and within sixty (60) Calendar Days of
the end of each Contract Year (or if, at the end of the Contract Year, the
Authority exercises its Call Option and shares are transferred pursuant to the
provisions of the Parent Body Agreement), the Contractor shall provide the
Authority with a report for each Site in the same form as the Monthly
Reconciliation Report or as otherwise reasonably required by the Authority in
respect of that previous Contract Year (the Annual
Reconciliation Report).  6A.14Reports  6A.14.1The
Contractor shall prepare and submit to the Authority periodic reports for each
Site (including the Annual Reconciliation Reports) showing the amounts of
expenditure expended and/or accrued against each Funding Limit in accordance
with Clause 4.1 (Reporting and Reviewing).  6A.14.2Following
the end of each Contract Year and within ninety (90) Calendar Days of its
receipt of the Contractors Annual Reconciliation Reports, the Authority shall
notify the Contractor that it either agrees the Annual Reconciliation Reports
or that it requires the Contractor to amend and re-submit them (indicating
those reports and sections therein which it requires to be amended). Within
thirty (30) Calendar Days of such notification from the Authority, the
Contractor shall either submit revised Annual Reconciliation Reports
incorporating all amendments required by the Authority (and the Authority shall
notify the Contractor of its agreement to the revised Annual Reconciliation
Reports within a further thirty (30) Calendar Day period) or notify the
Authority that it does not accept any one or more of the amendments requested
by the Authority (identifying the relevant amendments). In the event that the
Contractor does not accept any or all of the Authoritys requested amendments,
the Parties shall consult each other with a view to agreeing revised Annual
Reconciliation Reports but if they cannot agree the final form Annual
Reconciliation Reports within fourteen (14) Calendar Days of first notification
by the Contractor to the Authority that it does not accept all of the Authoritys
amendments, the matter shall he resolved, and the final form Annual Reconciliation
Reports determined, in accordance with the Dispute Management Schedule.  6A.14.3The
amount of expenditure and accruals reported against each Funding Limit shall be
reduced by the amount of Category II Revenue reported against the relevant
Funding Limit. The Contractor shall report Category II Revenue.  6A.14.4Within
fourteen (14) Calendar Days of the agreement or determination of the Agreed
Reconciliation Reports pursuant to Clause 6A.14.2 above, the Authority shall
determine whether or not the Contractor has complied with Clause 6A.13.1
(Funding Limits) and, if the Contractor has not complied with Clause 6A.13.1
(Funding Limits), the Authority will serve a Demand on the Contractor in
respect of sums paid by the Authority as Allowable Costs which pursuant the
procedures in this clause 6A.14 are agreed or determined to be Disallowable
Costs  6A.14.5The
Contractor shall provide any information reasonably requested by the Authority
that enables the Authority to comply with its State Aid reporting obligations
to the Department of Trade and Industry.  134


6A.15Costs Transparency and
Auditing  6A.15.1At
any time the Authority or the Authoritys Agents may choose to exercise the
rights set out in Clause 4.5 (Inspection and Audit) to audit the Contractors
determination of Costs as Allowable Costs or Disallowable, the Contractors
claims for reimbursement of Allowable Costs or the reconciliation between
payments made and accruals.  6A.15.2The
Contractor shall adopt a system of cost transparency and open book accounting
which provides for the cost components, cost levels and cost build up and
calculation for each and every item of cost that is used on the formulation of
the rates prices and sums under this Contract, including those relating to
Subcontracts, which relate to the Contractors performance of its obligations
under this Contract to be calculated and made available to the Authority. The
Contractor shall, at the request of the Authority, make such of its records
available to the Authority as are necessary for the Authority to verify that a
system of cost transparency has and is being adopted. The Contractor shall
ensure that its Subcontractors also comply with such cost transparency and
reporting provisions by including such provisions in its Subcontracts. The
Authority shall have the right to access to the build up and calculations for
each and every item of cost that is used in the formulation of the rates,
prices and sums under this Contract. The Authority shall have the right to
audit the Contractors Subcontractors and Affiliates on the same basis.  6A.16Reconciliation for Mid-Year Termination  6A.16.1If
the last day of the final Contract Year is any day other than 31 March (or
if the Authority exercises its Call Option under the provisions of the Parent
Body Agreement or terminates the Parent Body Agreement as a result of the
default or insolvency of the Parent Body Organisation notwithstanding the
continuation of this Contract), the Authority shall require the Contractor to
produce an Annual Reconciliation Report (subject to any modifications necessary
to deal with mid-year termination, where relevant) showing the information
listed in Clauses 6A.13.2.1 to 6A.13.28 above for the Contract Year up to the
date of termination, within sixty (60) Calendar Days of such date of
termination.  6A.16.2The Contractor shall propose an equitable
apportionment of the ASFL for the then current Contract Year for each Site
based on progress as against the costs, scope and schedule in the then current
Contract Year of the LTP for each Site in accordance with Paragraph 6
(Accounting Basis) of Part 4 of the Finance Schedule (Costs Principles and
Procedures). If the Parties fail to agree on such apportionments proposed by
the Contractor, the matter shall be resolved and determined in accordance with
the Dispute Management Schedule.  6A.16.3The Contractor and the Authority shall comply with
the provisions of Clauses 6A.14.2, 6A.14.3 and 6A.14.4 above.  6A.16.4Within fourteen (14) Calendar Days of agreement or
determination of the Annual Reconciliation Reports the Authority shall, acting
reasonably, determine the amount of Incentive Fee for each Site and the amount
of Efficiency Gain Fee to which the Contractor is entitled, taking account of
the profile of the PBIs in the context of mid-year termination of the Contract
or the Parent Body Agreement as appropriate and of the Annual Reconciliation
Report agreed or determined pursuant to Clause 6A.16.3 above and in accordance with
Part 2 of the Finance Schedule (Use of Performance Based Incentives).  135


6A.16.5Within fourteen (14) Calendar Days of the agreement
or determination of the Incentive Fee to which the Contractor is entitled the
Authority shall calculate the Year End Sum in accordance with Clause 6A.12.6
(Payments to Parent) above. If the Year End Sum is a positive figure then the
Authority shall pay an amount equal to the Year End Sum into the Contractors
Fee Account within thirty (30) Calendar Days of the Authoritys calculation of
the Year End Sum. If the Year End Sum is a negative figure then the Authority
shall serve a Demand on the Parent Body Organisation requiring that the Parent
Body Organisation pays an amount equal to the Year End Sum to the Authority
within thirty (30) Calendar Days of receipt of such Demand.  6A.16.6Notwithstanding the termination of this Contract or
the Parent Body Agreement as appropriate, the Authority hereby gives its
consent to the Contractor paying the Year End Sum (if a positive figure) to the
Parent Body Organisation unless for the Contractor to do so would be contrary
to Law.  6A.17Direct and Indirect Taxation  6A.17.1Tax 
general  6A.17.1.1The
Contractor agrees to take all reasonable actions to meet its Taxation
compliance obligations, and in particular to assist in the reduction or
elimination of any irrecoverable Taxation.  6A.17.1.2The
Authority shall retain the right to discuss the new VAT regime with the
Contractor at Sale Date to assess the cashflow implications for the Authority
and to review the first VAT return (and subsequent VAT returns as it may
consider necessary) prepared and submitted to HMRC after the Sale Date to
understand any changes to the previously anticipated cashflow forecast and to
make any appropriate amendments to the cashflow profile.  6A.17.2Corporation
Tax  The Contractor:  6A.17.2.1agrees to prepare and submit
toHMRCcorporation tax
computations on the basis of the principles agreed betweenHMRCand the
Authority in the Code of Practice 10 Submission (the COP 10);  6A.17.2.2undertakes not to seek
agreement fromHMRCto a treatment of any item in the corporation tax computations which is
inconsistent with the COP 10, unless the Authority expressly consents in
writing.  6A.17.2.3shall produce a tax pack in
respect of the accounting records maintained by the SLC on behalf of the
Authority in the form and to the frequency and timescales reasonably required
by the Authority and respond to any queries on a timely basis such that the
Authority is able to meet its taxation obligations  6A.17.3VAT  6A.17.3.1The Contractor agrees to
charge VAT, issue VAT invoices and comply with VAT compliance obligations on
the basis of the VAT Agreement and in particular:  136


6A.17.3.1.1agrees to register and maintain registration for the
purposes ofthe VATA;  6A.17.3.1.2agrees
properly to charge VAT and issue VAT invoices in respect of supplies made to
Third Party customers;  6A.17.3.1.3agrees
properly to charge VAT and issue VAT invoices in respect of the reimbursement
of Allowable Costs by the Authority;  6A.17.3.1.4agrees
properly to charge VAT and issue VAT invoices and credit notes as appropriate
in respect of the Incentive Fee;  6A.17.3.1.5agrees
properly to prepare and submit VAT returns on a timely basis to HM Customs and
Excise and to seek recovery as far as possible of VAT incurred in respect of
goods and services supplied to the Contractor; and  6A.17.3.1.6agrees
not to act in any way inconsistently with the principles set out in this
Contract.  6A.17.3.2The Authority shall charge VAT
in respect of the fee for the Property Licence for the Sites and the fee for
the licence of the Authority IP to the Contractor, and shall properly issue VAT
invoices in respect thereof.  6A.17.3.3The Authority warrants that it
has elected to waive exemption from VAT in accordance with the provisions of
Paragraph 2 of Schedule 10 to VATA in respect of the Sites.  6A.17.4Withholding
Taxes  6A.17.4.1Any payment made by the
Authority or the Contractor under, or pursuant to the terms of, this Contract
shall be made free and clear of all taxation whatsoever save only for any
deductions or withholdings required by applicable Law.  6A.17.4.2The Authority warrants that it
is a company resident in the United Kingdom for the purposes of Part 15 of
the Income Tax Act 2007.  6A.17.4.3The Contractor warrants that
it is a company resident in the United Kingdom for the purposes of Part 15
of the Income Tax Act 2007.  6A.17.4.4Where the Contractor is or
will be required to account under this Contract to the Authority in respect of
any receipt from a Third Party, and such receipt is or may be subject to
deductions or withholdings in respect of Taxation, the Contractor is required
to take reasonable action necessary to obtain the payment without such
deduction or withholding, or to recover all or part of the deduction or
withholding.  6A.17.5Employee
Taxes  The Contractor undertakes properly to make all National
Insurance Contributions and sums payable toHMRCunder the
PAYE system in respect of emoluments and benefits paid or payable, and to make
all deductions and retentions as should be made in accordance with the
applicable Law.  137


6A.17.6Tax
Returns  The Contractor agreesthat the Authority
may, at the Authoritys request, review tax returns and tax correspondence
prior to their submission to the relevant tax Authority and that the Contractor
will take into account the Authoritys reasonable comments provided that the
timing of the provision of such comments takes into account any deadline for
the relevant submission of which the Authority is aware and provided that the
tax return or tax correspondence relates to a matter for which the Authority
has financial responsibility.  6A.17.7Construction
Industry Scheme Regulations: Sections 559-567 Income and Corporation Taxes Act
1988  6A.17.7.1For the purposes
of this Clause 6A.17.7, CIS means the scheme prescribed by Chapter IV of
Part XIII of the Income and Corporation Taxes Act 1988 and/or the scheme
prescribed by Chapter 3 of Part 3 of the Finance Act 2004, in either
case to the extent that such scheme is in force.  6A.17.7.2The Contractor
shall comply with the obligations imposed on it by the CIS and the obligation
of the Authority to make any payment under this Contract is subject to the
provisions of the CIS.  138


PART 7 REAL ESTATE AND ASSET
MANAGEMENT  7.1Right to Occupy Sites  7.1.1From the Commencement Date until the expiry or earlier termination of
this Contract, the Authority licences the Contractor:  7.1.1.1to use and occupy
the Licensed Nuclear Site Area (including the facilities and installations
thereon and any easements appurtenant thereto); and  7.1.1.2to use and occupy
such part or parts of the Authority Land (other than the Licensed Nuclear Site
Area) (including the facilities and installations thereon and rights and easements
appurtenant thereto) previously specified by the Authority and which the
Contractor from time to time properly requires for the purpose of performing
its obligations under this Contract and which at the date of this Contract
comprises the land shown coloured blue on the plans marked Berkeley, Bradwell,
Dungeness, Hinkley and Sizewell attached at Part 1 (Nuclear Licensed
Site Area Plan) and Part 2 (Site Boundary Plan) of the Property Schedule
and the Ancillary Properties (but excluding any land that is the subject of an
Off-Site Tenancy Document); and  7.1.1.3to use and occupy
any part or parts of the Licensed Nuclear Site Area that are the subject of a
Tenancy Document where (and for so long as) the lawful right of occupation by
the person with the benefit of the relevant Tenancy Document has been properly
suspended by the Authority (or its agent) in accordance with the terms of the
relevant Tenancy Document; and  7.1.1.4to use the
Authority Assets; and  7.1.1.5to sell Authority
Assets in accordance with the terms of the Customer Contracts; and  7.1.1.6to use (in common
with the Authority and all those authorised by it) such roads, accessways and
pathways over and upon the Authority Land (but outside a Site) as notified by
the Authority to the Contractor from time to time for the purposes of access to
and from such Site; and  7.1.1.7to exercise the
rights reserved in favour of the landlord pursuant to any Off-Site Tenancy
Document insofar as it may relate to the Sites)  to enable the Contractor to:  1) perform its obligations under
this Contract; and  2) discharge its obligations
pursuant to the Nuclear Site Licence and all other relevant Regulatory
Requirements; and  3) use the Sites and the
Authority Assets for any other use that the Authority has consented to in
writing,  (the Property Licence).  139


7.1.2The Contractor agrees and undertakes with the Authority:  7.1.2.1to pay to the
Authority the Property Licence Fee in advance by way of one payment on 1 April each
year (the first payment being due on the date of this Contract); and  7.1.2.2not to impede in
any way the Authority or its officers servants or agents in the exercise of the
Authoritys rights of possession and ownership of any Site provided that (in
respect of the part of the Site that comprises the Licensed Nuclear Site Area)
the Authority agrees that in exercising its rights of possession and ownership
the Authority shall not do anything that would contravene the terms of the
Nuclear Site Licence and shall at all times comply with any proper regulations
relating to the Licensed Nuclear Site Area made by the Contractor (in its
capacity as the holder of the Nuclear Site Licence) (which the Contractor
agrees shall not materially adversely affect the exercise of the Authoritys
rights) and notified to the Authority from time to time; and  7.1.2.3to perform and
observe all covenants restrictions provisions and stipulations affecting the
Sites and not to interfere with any rights easements or other like matters
affecting the Sites.  7.1.3The licence
granted to the Contractor by Clause 7.1.1 above is personal to the Contractor
and shall not be capable of being assigned or in any way otherwise dealt with
or disposed of provided that the Contractor may with the prior written consent
of the Authority (at the Authoritys sole discretion) and subject to the
Contractor complying with the terms of any necessary Regulatory Requirements
grant:  7.1.3.1sub-licences of any part of the Licensed Nuclear Site Area to authorised
Subcontractors and/or the Constabulary; and  7.1.3.2sub-licences of any part of the Sites (excluding the Licensed Nuclear
Site Area) to any Third Party engaged by the Contractor for the proper
performance of its obligations under this Contract and/or the Constabulary.  7.1.
4If the Authority
has granted its consent to a Subcontract pursuant to Part 1
(Subcontracting/Procurement Requirements) of the Subcontracting/ Procurement
Schedule, such consent shall constitute the Authoritys prior written consent
in respect of the sub-licence to the relevant Subcontractor for the purposes of
Clause 7.1.3.1.  7.1.
5Without prejudice
to the requirement to obtain the Authoritys prior written consent under Clause
7.1.3.1, if the Contractor has notified the Authority of its proposed entry
into a Subcontract in accordance with Paragraph 3.11 (Notification of
Subcontracts not Requiring Authority Approval) of Part 1
(Subcontracting/Procurement Requirements) of the Subcontracting/ Procurement
Schedule, such notification shall constitute the Contractors notification and
the Authoritys consent in respect of the sub-licence to the relevant
Subcontractor for the purposes of Clause 7.1.3.1.  7.1.
6If the Contractor
is not required to notify the Authority of its entry into a Subcontract nor
required to obtain the Authoritys prior written consent to the entry into such
Subcontract under Part 1 (Subcontracting/Procurement Requirements) of the
Subcontracting/Procurement Schedule then, for the purposes of Clause 7.1.3.1,
the Authority shall be deemed to have given its prior written consent in
respect of the sub-licence to the relevant Subcontractor.  140


7.1.7The
licence granted to the Contractor by Clause 7.1.1 above is granted subject to:  7.1.7.1the Authoritys
proprietary rights in respect of the Sites; and  7.1.7.2the rights,
covenants, conditions and other matters affecting the Sites; and  7.1.7.3the rights of any
third parties from time to time subsisting in relation to the Sites; and  7.1.7.4the Tenancy
Documents (to the extent that they relate to the Site) and the Off-Site Tenancy
Documents.  7.1.8The
Contractor shall not by virtue of the licence granted by Clause 7.1.1 above (or
otherwise) claim to be or become entitled to any estate right or interest in or
exclusive possession of any of the land of the Authority and/or the Authority
Assets and nothing contained in this Clause 7.1 shall be construed as creating
a legal or equitable demise of the Sites.  7.1.9For
the avoidance of doubt, notwithstanding the provisions of clause 7.1.8 the
Authority served on the Contractor notices dated 25 April 2007 in
accordance with the terms of section 38A(3)(a) of the Landlord and Tenant
Act 1954 and the Contractor or a person duly authorised by the Contractor made
statutory declarations in accordance with Paragraph 3 and 4 of schedule 2 of
the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 and
accordingly the Authority and the Contractor confirm and agree that the
provisions of sections 24 to 28 (inclusive) of the Landlord and Tenant Act 1954
are excluded in relation to any right of occupation created by this Contract.  7.1.10Nothing contained in
this Contract shall imply or warrant that the Sites may (whether under statute
or otherwise) be used for any purpose for which the Contractor uses or intends
to use the Sites.  7.1.11The Ancillary
Properties may only be used for the purposes specified by the Authority from
time to time.  7.1.12The Contractor agrees
that it shall not claim any proprietary interest or right in the Sites.  7.2Objects
of antiquity or value  The Contractor shall notify the
Authority of all objects of antiquity or value discovered in the course of the
performance of this Contract. All such objects shall belong to and be at the
disposal of the Authority.  7.3Condition of Sites and Authority Assets  The Authority shall not give any warranty as to the
condition of each Site or the Authority Assets.  141


7.4Use of Sites and Authority Assets  7.4.1The Contractor shall not, without the prior written consent of theAuthority, use the Authority
Assets (or part thereof) other than in fulfilment of its obligations under this
Contract, applicable Law and Regulatory Requirements.  7.4.2The Authority shall be entitled
to require that:  7.4.2.1any movable Authority Asset beredeployed
for use on behalf of the Authority at any place outside a Site provided that
such redeployment will not impede or prevent the Contractor from performing its
obligations under this Contract; and/or  7.4.2.2the
Contractor utilise any other movable asset deployed to such Site by the
Authority in the Contractors performance of its obligations under this
Contract.  7.4.3The care and maintenance of any Authority Asset redeployed pursuant to
Clause 7.4.2.1 above shall be the responsibility of the Authority untilsuch time as the Authority Asset
is returned to the relevant Site. The care and maintenance of any other movable
asset deployed to the relevant Site pursuant to Clause 7.4.2.2 above shall be
the responsibility of the Contractor until the Authority procures the removal
of such movable asset from the Site.  7.5Maintenance of Sites and Authority Assets  7.5.1Save to the extent that it is the responsibility of
a Third Party pursuant to a Tenancy Document or an Off-Site Tenancy Document,
the Contractor shall maintain the Sites in accordance with the provisions of
the LTP and shall maintain, service and repair the Authority Assets in accordance
with the Contractors Internal Procedure relating to asset management.  7.5.2The Contractor shall create and
maintain a current and accurate Site Maintenance Register and supply a copy of
that register to the Authority upon Request.  7.5.3The Contractor shall create the
Asset Register which shall be completed no later than 12 months after the date
of this Contract.  7.5.4The Contractor shall maintain the Asset Register as current
and accurate and shall allow the Authority to inspect the Asset Register at any
time upon reasonable notice.  7.5.5The Contractor will throughout the period
of the Contract appoint and keep appointed a suitability qualified person, who
shall have been previously approved by the Authority (such approval not to be
unreasonably withheld), to liaise with the Authority in connection with the
Contractors compliance with its obligations under Schedule 18 (Contractors
Obligations in relation to the Sites).  7.6Necessary Consents  7.6.1The Contractor shall be required to maintain and procure a
Nuclear Site Licence and Environmental Agency licences, authorisations, permits
or  142


consents or any other licence or
permit necessary to enable it to access, occupy and use each of the Sites for
the purpose of fulfilling its obligations under this Contract.  7.6.2Save as provided in Clause 7.6.1 above, the Contractor shall
only be obliged to use reasonable endeavours to procure any Consent necessary
for the purpose of fulfilling its obligations under this Contract.  7.6.3The Authority will provide reasonable co-operation and
assistance to the Contractor in the procuring of any Consent.  7.6.4Where a Consent is required by the Contractor, but such
Consent can only be obtained by the Authority, the Authority shall take all
reasonable steps to obtain such Consent for the benefit of the Contractor.  7.7.Right to Acquire New Assets  7.7.1New Assets acquired by the Contractor in performing the
Contract shall be acquired in the name of the Authority and shall pass into the
immediate ownership of the Authority and become Authority Assets.  7.7.2Upon acquiring any New Assets, the Contractor shall promptly
and accurately record such acquisition(s) on the Asset Register.  7.7.3Any New Assets must be purchased in accordance with the
requirements of Part 1 (Subcontracting/Procurement Requirements) attached
at the Subcontracting/Procurement Schedule.  7.8Customer Contracts  7.8.1Without prejudice to Clause 3.6.3 (Authoritys right to instruct)
and Clause 7.1.3 if, at the Commencement Date, the terms of any Customer
Contract provide to the Customer (and/or an agent of the Customer) rights of
access to and use of the Authority Assets the Sites and their facilities,
installations, structures and outbuildings, if the Customer (and/or an agent of
the Customer) wishes to exercise such rights, the Authority shall allow the
Contractor to fulfil its obligations under such Customer Contract by, upon
notice from the Contractor to the Authority, permitting the Customer (and/or an
agent of the Customer) such access and such use required under the terms of the
relevant Customer Contract subject always to the applicable Law and Regulatory
Requirements.  7.8.2If a Customer Contract provides for the transfer of title in
Authority Assets to the Customer, the Contractor shall request the Authoritys
prior written consent to such transfer of title in accordance with the terms of
the Customer Contracts.  7.9Contractors obligations relating to the Site  The Contractor shall observe and perform the obligations set out in
Schedule 18 (Contractors Obligations in Relation to the Site).  143


PART 8 - INTELLECTUAL PROPERTY  8.1Licence of Authority IP to Contractor  8.1.1The Authority hereby grants to the Contractor a
non-transferable, non-exclusive, royalty-free licence of the Authority IP to
use during the Term for the purpose of fulfilling its obligations under this
Contract in consideration of a fee of £1,000 per annum.  The Contractor shall have the right to
sub-license the Authority IP to Subcontractors approved by the Authority for
use in performance of their Subcontracts, but shall have no other rights to
sub-license without the prior written approval of the Authority (such approval
not to be unreasonably withheld).  8.1.2The Contractor acknowledges that nothing in this Contract
shall constitute any representation or warranty by the Authority in respect of
the Authority IP and, in particular, acknowledges that the Authority does not
represent or warrant that any registered Authority IP is valid or that any
application for registration or grant will proceed to registration or grant or
will remain registered.  8.1.3The Contractor acknowledges that nothing in this Contract
shall constitute any representations or warranties that the Contractors
exercise of rights granted under this Contract shall not infringe any valid
intellectual property rights of third parties.  8.2The fee payable in Clause 8.1 is a VAT exclusive amount and
is payable in advance by way of one payment on 1 April in each Contract
Year (the first payment being due on the Commencement Date).  8.3IP Contributed by Parent Body
Organisation  Licence to Authority and Contractor  8.3.1Any IP made available to the Contractor by the Parent Body
Organisation for the purpose of fulfilling its obligations under this Contract
whether such IP is owned by the Parent Body Organisation or licensed to the
Parent Body Organisation with appropriate sub-license rights, (Parent IP) shall also be, and is hereby, licensed in
perpetuity to the Authority in its current application as of the date of
commencement of this Contract for utilisation in the Authority Field of Use
without payment of royalty fees (except to the extent otherwise agreed) and
then sub-licensed in perpetuity by the Authority to the Contractor who in turn
shall be entitled to grant sub-licences to its Subcontractors under this
Agreement in each case without payment of royalty fees.  Subject to the Parent Body Organisations
consent (such consent not to be unreasonably withheld or delayed), the
Authority shall have the right to sub-license the Parent IP to other site
licensee companies for use in relation to their activities falling within the
Authority Field of Use on any Designated Sites without payment of royalty
fees.  The Authoritys right to use and
sub-license the Parent IP shall remain in force both during the term of this
Contract and after this Contract has expired or has been terminated until the
Authority reasonably determines that the Parent IP is no longer needed in
relation to any Designated Sites for which the Authority has obtained the
rights to use the IP.  144


8.3.2Any Parent IP that is directly or indirectly required to
enable the Authority or its licensees to use or exploit any Developed IP shall
also be licensed in perpetuity to the Authority for utilisation in the
Authority Field of Use without payment of royalty fees (except to the extent
otherwise agreed). The Authority shall have the right to sub-license such
Parent IP to the Contractor who in turn shall be entitled to grant sub-licences
to its Subcontractors under this Agreement in each case without payment of
royalty fees.  The Authority shall have
the right to sub-license such Parent IP to other site licensee companies for
use in relation to their activities falling within the Authority Field of Use
without payment of royalty fees who shall be entitled to grant sub-licences to
their subcontractors for use in relation to their activities falling within the
Authority Field of Use, without payment of royalty fees.  The Authoritys right to use and sub-license
the Parent IP shall remain in force both during the term of this Agreement and
after this Agreement has expired or has been terminated until the Authority
reasonably determines that the Parent IP is no longer needed to enable the use
of any Developed IP.  Licence of new or additional Parent IP  8.3.3If during the term of this Contract, the Parent Body
Organisation wishes to make available to the Contractor, for the Contractors
use at the Site to fulfil its activities falling within the Authoritys Field
of Use, new or additional Parent IP beyond such Parent IP made available to the
Contractor as of the date of commencement of this Contract, such new or
additional Parent IP shall be licensed in accordance with this Clause 8.3 (IP
Contributed by Parent Body Organisation).  Licensing of Parent IP contained in Developed IP  8.3.4For the avoidance of doubt, Parent IP that is contained in
or forms the basis or background of any IP developed by or on behalf of the
Contractor (including by Subcontractors) or is otherwise required for the use
of such Developed IP, either during the term of this Contract or after this
Contract has expired or terminated shall, with respect to such Parent IP, be
treated for licensing purposes in a manner consistent with this Clause 8.3 (IP
Contributed by Parent Body Organisation).  8.3.5The Contractor shall have the further right to sub-license
Parent IP licensed to it under this Clause 8.3 (IP Contributed by Parent Body
Organisation) to Subcontractors approved by the Authority for use in the
performance of their Subcontracts.  Such
sub-licence of Parent IP to the Contractors Subcontractors shall contain terms
that are materially similar to the terms contained in the Authoritys licence
from the Parent Body Organisation and the Contractors follow-on licence from
the Authority.  Infringement of Parent IP by Third Parties  8.3.6In the case of any infringement or suspected infringement by
any Third Party of Parent IP which is licensed to the Authority pursuant to
this Clause 8.3 (IP Contributed by Parent Body Organisation), the Contractor,
in consultation with the Authority, shall promptly notify the Parent Body
Organisation and shall take such reasonable direction as the Parent Body
Organisation may provide for purposes of the Parent Body Organisations
response to such infringement or suspected infringement.  145


Use of
unlicensed Parent IP  8.3.7If the Contractor uses IP for the purposes of fulfilling its
obligations in relation to the Site under this Contract where that IP is owned
by or is licensed to the Parent Body Organisation but has not been licensed to
the Authority for the Authority Field of Use, a retrospective licence for such
use will be deemed to be granted to the Authority to the extent permitted under
the sub-licence rights granted by the Parent Body Organisation under this
Clause 8.3 (IP Contributed by Parent Body Organisation).  The Authority will have the same rights as it
has in relation to Parent IP under this Clause 8.3 (IP Contributed by Parent
Body Organisation).  8.4Authoritys Rights to IP developed
by or on behalf of the Contractor and Subcontractors  The Contractor shall establish procedures (which shall be audited on
reasonable notice by the Authority from time to time) under which the
identification, protection, exploitation and ownership of Developed IP is
evaluated in accordance with the principles set out in the provisions of this
Clause 8.4 and under which the Contractor shall seek approval from the
Authority as required under this Clause 8.4. 
IP created by or on behalf of the Contractor and/or by Subcontractors
during the performance of this Contract (Developed IP) shall be owned in
accordance with the provisions of this Clause 8.4:  Ownership by Authority of Developed IP created by the Contractor  8.4.1Ownership of any Developed IP
created by the Contractor shall vest in the Authority, subject to any
pre-existing rights of third parties and of the Parent Body Organisation and
the Contractor hereby assigns to the Authority all its right, title and
interest in any Developed IP created by it on or at any time after the date
hereof.  Ownership of Developed IP by the Authority  8.4.2Without prejudice to Clause 8.4.1
the Authority shall own any Developed IP which the Authority determines (i) raises
or which may raise security issues relating to the use of such Developed IP
(including without limitation where the use or disclosure of such Developed IP
could compromise the security of any Designated Site, facilities, equipment or
materials relating to any Designated Site) and/or (ii) is of strategic
interest to the Authority and/or to United Kingdom business.  8.4.3As between the Authority and the
Contractor, the Authority shall own any and all IP in all output (including
information, results, test data, safety cases and other reports) obtained by
and arising from the application and use of any IP including Developed IP.  Ownership of Developed IP by Subcontractors  8.4.4Save in the circumstances
identified in Clauses 8.4.2 and 8.4.3 and subject to the provisions of Clauses
8.4.6 and 8.4.10, Developed IP that is created by or on behalf of any
Subcontractor under its Subcontract and which is based on or derived from IP
owned by the Subcontractor immediately prior to the commencement of the
Subcontract shall be owned by the Subcontractor (subject to any pre-existing
rights of third parties).  146


8.4.5Ownership of Developed IP that is
created by or on behalf of any Subcontractor under its Subcontract and which is
not based on or derived from IP owned by the Subcontractor immediately prior to
the commencement of the Subcontract shall be owned by the Authority.  The Authority acknowledges that it may be
appropriate for such Developed IP that falls outside the provisions of Clauses
8.4.2 and 8.4.3 to be owned by the Subcontractor.  The Contractor, on behalf of any
Subcontractor, may give written notice to the Authority that the Subcontractor
wishes to retain ownership of such Developed IP.  Following receipt of such notice, the
Authority, in consultation with the Contractor on behalf of any Subcontractor,
shall determine the ownership of such Developed IP (such determination to be in
the sole discretion of the Authority).  Access to and use of information by the Authority  8.4.6Notwithstanding ownership of any
Developed IP by the Subcontractor and without prejudice to the provisions of
Clause 4.2 (Records) and Clause 4.5 (Inspection and Audit), the Contractor
shall ensure that the Authority shall be entitled to access, use and disclose
all and any information created, received or maintained by or on behalf of the
Subcontractor whether from use or application of the Developed IP or otherwise
that is reasonably required by the Authority for any purpose.  Further Assurance  8.4.7In respect of any Developed IP
owned by the Authority pursuant to Clauses 8.4.1, 8.4.2, 8.4.3 and 8.4.5 the
Contractor shall (and shall procure that any Subcontractor shall) execute such
further documents and do such further acts as the Authority reasonably requires
to give full effect to the terms of this Clause 8 (Intellectual Property) and
perfect the Authoritys title to any such Developed IP.  Identification of IP owned by the Subcontractor and Licence of IP owned
by the Subcontractor to Authority  8.4.8The Contractor shall procure that
any Subcontractor identifies and declares to the Contractor prior to entering
into its Subcontract any IP which the Subcontractor owns immediately prior to
the commencement of the Subcontract which is to be used in the performance of
the Subcontract.  In respect of any such
IP, the Contractor shall procure that the Subcontractor shall grant to the
Authority a non-exclusive, perpetual, irrevocable, royalty-free licence to use
such IP within the Authority Field of Use together with the right to license
such IP to the Contractor SLC without the consent of the Subcontractor and
permitting the Contractor itself to sub-license its rights under any such
sub-licence to any of its sub-contractors without the consent of the
Subcontractor.  Licence to the Authority of IP licensed to the Subcontractor  8.4.9In respect of any third party IP
that is licensed to the Subcontractor immediately prior to the commencement of
the Subcontract or at any time during the term of the Subcontract and is used
by the Subcontractor in the performance of its Subcontract, the Contractor
shall procure that the Subcontractor shall use all reasonable endeavours to
procure a licence for the Authority on reasonable terms which enables the
Authority to use and to  147


license
that IP within in the Authority Field of Use to the Contractor without the
consent of the licensor, and permitting the Contractor itself to sub-license
its rights under any such sub-licence to any of its sub-contractors without the
consent of the licensor.  Licence of Developed IP from Subcontractor to Authority  8.4.10Subject to Clause 8.4.11 the event that any
Developed IP is owned by a Subcontractor, the Contractor shall procure that the
Subcontractor shall grant to the Authority a non-exclusive, perpetual,
irrevocable, royalty-free licence to use such Developed IP within the Authority
Field of Use together with the right to license such Developed IP to any third
party including any other site licensee company without the consent of the
Subcontractor, and permitting any other site licensee company itself to
sub-license its rights under any such sub-licence to any of its sub-contractors
without the consent of the Subcontractor.  Licence of Background IP from Subcontractor to
Authority  8.4.11The Contractor shall procure that any Subcontractor
shall grant to the Authority a non-exclusive, perpetual, irrevocable,
royalty-free licence to use any IP owned by that Subcontractor that is
contained in or forms the basis or background of any Developed IP (Background IP) together with the right to
license such Background IP to the Contractor who in turn shall be entitled to
grant sub-licenses to its Subcontractors under this Agreement in each case
without payment of royalty fees.  The
Authority shall have the right to sub-license such Background IP to other site
licenses companies for use in relation to their activities falling within the
Authority Field of Use without payment of royalty fees who shall be entitled to
grant sub-licences to their subcontractors for use in relation to their
activities falling within the Authority Field of Use, without payment of
royalty fees.  Contractors Notification of Developed IP  8.4.12The Contractor shall procure that any Subcontractor
shall promptly notify the Contractor of any IP which is created and/or
developed by the Subcontractor during the performance of its Subcontract. The
Contractor shall promptly notify the Authority of any such Developed IP and any
Developed IP created by the Contractor itself. 
To the extent that the ownership of Developed IP created by or on behalf
of the Subcontractor has not been determined prior to the commencement of the
Subcontract the Authority may determine whether such Developed IP should be
owned by the Authority in accordance with the provisions of Clauses 8.4.2,
8.4.3 and 8.4.5.  Use of Developed IP by the Subcontractor  8.4.13If the Authority so requires, the Contractor shall
procure that, in the event that the Subcontractor exploits or licenses the use
of Developed IP owned by the Subcontractor outside the Authority Field of Use,
the Subcontractor shall negotiate in good faith with the Authority appropriate
payment (which may include royalties and/or lump sum payments) to the
Authority.  148


Licence to Parent Body Organisation  8.4.14Subject to the reasonable terms of the Authority
(which may include payment of reasonable royalties or fees) the Authority will
grant to the Parent Body Organisation a world-wide licence (which is freely
assignable or sub-licensable) to use for purposes other than activities falling
within the Authoritys Field of Use any Developed IP which vests in the
Authority pursuant to Clauses 8.4.1, 8.4.2, or 8.4.5 provided that where the
basis or background of the Developed IP is Parent IP such licence to the Parent
Body Organisation shall be on an exclusive basis.  The Authority shall execute such further
documents and do such further acts as the Parent Body Organisation reasonably
requires to give full effect to the terms of this Clause 8.4.14.  Exclusion of Parent IP from Developed IP  8.4.15For the avoidance of doubt Developed IP created by
or on behalf of the Contractor (including Subcontractors) and which vests in
the Authority pursuant to Clause 8.4.1, 8.4.2, 8.4.3 or 8.4.5 above shall
exclude any Parent IP under Clause 8.3 or any Third Party IP under Clause 8.7
that may form the basis or background of such Developed IP.  Protection of Developed IP  8.4.16Where any Developed IP vests in the Authority
pursuant to Clauses 8.4.1, 8.4.2, 8.4.3 or 8.4.5, the Contractor shall seek
(and shall procure that any relevant Subcontractor seeks) reasonable and
necessary protection in respect of such Developed IP by way of patent applications
or otherwise as the Authority may direct. 
The Contractor shall keep the Authority advised as to all developments
with respect to any such applications and assign the rights arising therefrom
to the Authority.  Warranty  8.4.17The Contractor warrants (and shall procure that any
Subcontractor warrants) that the use and licensing of any Developed IP shall
not infringe the IP rights of any Third Party.  Register of IP  8.4.18The Contractor shall (and shall procure that any
Subcontractor shall) maintain an up to date register of the details of all
Developed IP including details of the owner of such Developed IP, and the terms
on which any Developed IP is licensed by the Contractor (or Subcontractor, as
the case may be) to any third party.  8.5Infringement of IP owned by the
Authority  8.5.1The Contractor shall immediately give notice in writing to
the Authority if it becomes aware of any:  (A)actual, suspected or threatened infringement of any of the
IP owned by the Authority (including Developed IP which vests in the Authority
pursuant to Clause 8.4 above) (Authority Owned IP);
or  149


(B)allegation, complaint, claims, actions or proceedings made,
raised or threatened by any Third Party that Authority Owned IP infringes the
rights of any Third Party.  8.5.2In the case of any actual or threatened infringement or
suspected infringement by any Third Party of Authority Owned IP:  (A)the Contractor shall, in consultation with the Authority,
decide what action, if any, to take including the bringing of proceedings in
the name of the Authority;  (B)the Contractor shall, subject to the Authoritys approval
(not to be unreasonably withheld or delayed), have control over and conduct of
any such claims and proceedings;  (C)the Contractor shall keep the Authority informed as to all
developments and steps taken by it or by any Third Party in relation to any
infringement or suspected infringement;  (D)the Contractor shall not make any admission other than to
the Authority and the Authority will provide the Contractor with all assistance
as it may reasonably require and request in connection with the Contractor
conduct of any claims, actions or proceedings. 
Such assistance may include the Authority at its cost, agreeing to be
joined as a party in any such claims, actions or proceedings brought by the
Contractor pursuant to Clause 8.5.2(B).  (E)any award of costs or damages or other compensation payment
recovered in connection with any of the matters in this Clause 8.5 shall be for
the account of the Authority as Category I Revenue.  8.6Access to and use of information
by the Authority  Without prejudice to the provisions of
Clause 4.2 (Records) and Clause 4.5 (Inspection and Audit), the Contractor
shall ensure that the Authority shall be entitled to access, use and disclose
all and any information created, received or maintained by or on behalf of the
Subcontractor whether from use or application of the Developed IP or otherwise
that is reasonably required by the Authority for any purpose.  8.7Third Party IP  8.7.1In the event that the Contractor wishes to use third party
IP for the purpose of fulfilling its obligations in relation to a Site under
this Contract (Third  Party IP)
it shall discuss with the Authority whether the Authority wishes to have a
licence of the Third Party IP.  In the
event that the Authority indicates a desire to have such a licence the
Contractor shall use all reasonable endeavours to procure a licence for the
Authority on reasonable terms which enable the Authority to use and to
sub-license to the Contractor the Third Party IP and, if the Authority
indicates a further desire, the Contractor shall use all reasonable endeavours
also to procure for the Authority, the right to sub-license the Third Party IP
to other site licensee companies for use in relation activities falling within
the Authority Field of Use on any other Designated Sites.  The Contractor also shall use all reasonable
endeavours to procure that any licence from the Third Party to the Authority
shall remain in force until the Authority reasonably  150


determines
that the Third Party IP is no longer needed in relation to the carrying out of
its functions in relation to the Site and, where applicable, any other
Designated Site.  For the avoidance of
doubt this Clause 8.7.1 shall not apply to IP that is licensed by a third party
to any Subcontractor to which the provisions of Clause 8.4.9 apply.  8.7.2The Contractor shall (and shall procure that any
Subcontractor shall) maintain an up to date register of the details of any
Third Party IP licensed to the Contractor or the Subcontractor (as the case may
be) for the purposes of this Contract or any subcontract relating thereto
including the principal terms in respect thereof.  8.8Contractors obligation to protect
IP  The Contractor shall take all such
reasonable and necessary steps to protect IP owned by the Authority including
Developed IP.  Among other things, the
Contractor shall keep the Authority informed of all matters relevant to the
protection of the IP owned by the Authority and, if requested by the Authority,
make applications for patents, diligently prosecute any patent applications,
respond to oppositions filed by third parties, assign the patent rights to the
Authority and maintain any patents (including the payment of renewal fees). The
Authority, at its cost, will provide the Contractor with all assistance as it
may reasonably require and request in the protection and maintenance of the IP
owned by the Authority.  8.9Use and Sharing of Information and
Know-How  Subject to Part 10
(Confidentiality, Security and Compliance with Law), the Contractor shall share
information and know-how relating to activities falling within the Authoritys
Field of Use with the Authority and with third parties as directed by the
Authority.  8.10Back-up and Storage  The Contractor shall ensure the back-up
of and storage in safe custody of all electronic data, material and documents
required to be maintained and retained under this Contract in accordance with
its Internal Procedures relating to records and data management.  8.11Documents and Other Materials  8.11.1At the Authoritys request the Contractor shall provide to
the Authority any documents and other materials in any form and any other
articles (including copies) in its possession or control bearing or embodying
any of the Authority IP created on or after the Commencement Date subject to
any pre-existing rights of third parties and the Parent Body Organisation.  8.11.2In the event of expiry or termination of this Contract, the
Contractor shall preserve and shall deliver-up to the Authority all documents
and other materials in any form and all other articles (including copies) in
its possession or control bearing or embodying any of the Authority IP subject
to any pre-existing rights of third parties and the Parent Body Organisation.  151


PART 9 INFORMATION TECHNOLOGY  9.1NISR and Other Statutory Obligations  9.1.1The Contractor
shall at all times comply with, and the provisions of this Clause 9.1 (NISR and
Other Statutory Obligations) shall be without prejudice to any obligations,
restrictions or directions imposed on the Contractor by:  9.1.1.1the provisions of the NISR and any
direction or approval given by the OCNS pursuant thereto; and  9.1.1.2any other
applicable law or regulations relevant to information security.  9.1.2The Contractor
shall, if requested by the Authority, promptly provide to the Authority all
information and
documents necessary to evidence such compliance.  9.1.3The Contractor shall promptly
notify the Authority in the event that the Contractor becomes aware of:  9.1.3.1any breach of Clause 9.1.1; or  9.1.3.2any notice
received by the Contractor alleging a breach or a possible breach of the
matters referred to in Clause 9.1.1.1 and 9.1.1.2  and the Contractor shall provide to
the Authority all such information in relation thereto as the Authority
reasonably requests.  9.2Access to
Authority IT Systems and the Site IT Systems  Inthe event that, with the agreement of the Authority, the Contractor has
access to any Authority IT Systems, the Contractor shall comply with such
reasonable requirements in relation to the security thereof as the Authority
shall specify from time to time in writing. In the event that, pursuant to this
Contract or otherwise with the agreement of the Contractor, the Authority has
access to any of the Site IT Systems, the Authority shall comply with such
reasonable requirements in relation to the security thereof as the Contractor
shall specify from time to time in writing.  9.3Inspections  Without prejudice or limitation to
the Contractors obligations under Clause 4.5 (Inspection and Audit), the
Contractor shall allow the Authority to co-ordinate any inspection byor on behalf of the Authority of
the Site IT Systems with any inspection thereof being performed by or on behalf
of the OCNS, and shall permit the OCNS to share with the Authority the results
of any such inspection by or on behalf of the OCNS.  9.4Maintenanceand Support and Business Continuity  9.4.1Without
prejudice to the Contractors obligations under the LTP, the Contractor shall
at all times ensure that the Critical Site IT Systems are maintained and
supported in accordance with Good Industry Practice, and inparticular, subject to the
provisions in Part 1 of the Information Technology  152


Schedule
(Critical IT Systems), the Contractor shall at all times ensure that all
material components of Critical Site IT Systems are of a version which is
supported by the manufacturer or supplier thereof.  9.4.2The Contractor shall at all times
maintain and put into effect IT and business continuity and disaster recovery
plans, consistent with ISO/IEC 17799 and Good Industry Practice, in respect of
the Critical Site IT Systems that are identified in the column of part 1 of the
Information Technology Schedule that details the requirement to comply with
this clause.  9.5Changes to Site IT Systems  9.5.1Withoutprejudice to the Contractors
obligation to comply with the Regulatory Requirements of the OCNS and the HSE
in respect of the Site IT Systems and its ability to make emergency fixes to
the Site IT Systems in accordance with the Contractors documented Internal
Procedures (which procedures shall meet with the Authoritys approval), the
Contractor shall not without the Authoritys prior written consent make any
material alteration to any of the Critical Site IT Systems, including without
limitation:  9.5.1.1the
introduction of any new data or voice circuits to or from a Site or new or
altered interfaces to external IT Systems;  9.5.1.2the
introduction of any new or altered Software which requires `the reconfiguration
of any application external to the Sites and not maintained by the Contractor,
or which alters the interfaces referred to in Clause 9.8; and  9.5.1.3any alteration
which has or may have a material impact on safety at the Sites and/or the
security of a Critical Site IT System.  9.5.2Without
prejudice to the Contractors obligation to comply with the Regulatory Requirements of
the OCNS and the HSE in respect of the Site IT Systems and its ability to make
emergency fixes to the Site IT Systems in accordance with the Contractors
documented Internal Procedures (which procedures shall meet with the Authoritys
approval), the Contractor shall not without the Authoritys prior written
consent make any material alteration to any of the Site IT Systems which would
adversely affect the separability of the Site IT Systems from any IT Systems
owned or operated by the Contractors Affiliates or any IT Systems external to
the Sites.  9.5.3Any change to the hardware or
Software comprised in a Site IT System shall be reflected in the Asset Register
maintained pursuant to Clause 7.5 (Maintenance of Sites and Authority Assets).  9.6Deposit of Source Code  9.6.1Subject to the
provisions in Part 2 of the Information Technology (Deposit Source Code),
the Contractor shall adhere to Good Industry Practice in relation to the
deposit in escrow of the Source Code of
Software packages comprised in the Site IT Systems, having regard to the materiality
and criticality of the Software concerned and the ease with which the same
could be replaced and, without prejudice to the generality of the foregoing,
the Contractor shall if so requested in writing by the Authority in respect of
one or more such Software packages to ensure that the Source Code thereof is  153


deposited in
escrow with the Escrow Agent for the benefit of the Contractor and the
Authority on the Escrow Terms. The Contractor shall maintain a register of the
Software packages deposited in escrow.  9.6.2The Contractor shall ensure that
any deposit made in accordance with Clause 9.6.1 is at all times complete and
up to date such that it accurately reflects the relevant Software as the same is
installed and used by the Contractor from time to time.  9.7Release of Source Code  Inthe event that any Source Code deposited pursuant to Clause 9.6 is
released in accordance with the applicable escrow terms, the Contractor shall
ensure that the licence referred to in Clause 8.7 (Third Party IP) shall
include all IP subsisting in such Source Code.  9.8Data Interfaces  The Contractor shall at all times maintain, and
shall produce to the Authority upon request complete descriptions in such
format as the Authority reasonably requires of all interfaces through which
data relating to the Sites is transmitted or received as between the Contractor
and any Third Party and/or as between the Site IT Systems located on the Sites
and any other IT Systems, and of the nature of the data so transmitted, such
descriptions to include full definition of the relevant interfaces and the
format in which such data is transmitted. During the first six months following
the Commencement Date, the Contractors obligation under this Clause 9.8 shall
be an obligation to use reasonable endeavours to maintain and produce such
descriptions.  9.9Transferability of Contracts  9.9.1The Contractor
shall at all times ensure that, save to the extent otherwise agreed inwriting by the Authority, each IT
Contract entered into on or after the Commencement Date shall provide that the
rights and obligations (if any) of the Contractor thereunder which relate to
the performance of the Contractors obligations under this Contract are capable
of being separately transferred to the Authority or its nominee without the
consent of any counterparty to such IT Contract or other Third Party and
without incurring any payment obligation or other additional liability under
such IT Contract.  9.9.2Where, having used all reasonable
endeavours to do so, the Contractor is unable to procure the transferability of
any IT Contract referred to in Clause 9.9.1, the Contractor shall consult with
the Authority and give the Authority such information in relation thereto as
the Authority reasonably requests. The Authority will not unreasonably withhold
consent to the Contractor entering into such IT Contract where the Contractor
is able to demonstrate to the Authoritys reasonable satisfaction that the
proposed counterparty thereto will not agree to such transferability on
commercially reasonable terms, and there is no acceptable alternative to such
counterparty.  154


PART 10: CONFIDENTIALITY, SECURITY AND
COMPLIANCE WITH LAW  10.1Confidential Information  10.1.1Subject to Clauses 10.3 to 10.9
below, each Party shall hold in confidence all documents, materials and other
information, whether technical or commercial, supplied by or on behalf of the
other parties (including all documents and information supplied in the course
of proceedings under Part 13 (Dispute Management) or the rules of any
other dispute resolution procedure to which a dispute is referred in accordance
with this Contract) and all documents, materials and other information of any
nature relating to a Third Party which it may acquire or have access to
directly or indirectly and shall not, except with the written authority of the
other Party, publish or otherwise disclose the same otherwise than as expressly
provided for in this Contract unless or until the recipient Party can
demonstrate that any such document, material or information is in the public
domain through no fault of its own and through no contravention of this
Contract, whereupon to the extent that it is in the public domain this
obligation shall cease.  10.1.2the Contractor shall not make use of
this Contract or any information issued or provided by or on behalf of the
Authority in connection with this Contract otherwise than forthe purpose of complying with its
obligations under this Contract and otherwise than as expressly provided for in
this Contract except with the written authority of the Authority.  10.2Contractor right to request confidentiality  The Contractor may at any time request in writing, stating reasons,
that the Authority keeps particular information confidential and does not
disclose it to Third Parties. The Contractor may further request in writing at
any time that, where the Authority discloses Information pursuant to Clause 10.3
(Disclosure by the Authority), the Authority shall make representations to the
recipient of such Information as to the desirability of keeping such
Information confidential. Any such request by the Contractor shall be
accompanied by a document setting out in writing the requested representations.
The Authority shall consider whether to make such representations.  10.3Disclosure by the Authority  10.3.1The Authority, having considered any request made
by the Contractor under Clause 10.2 (Contractor right to request
confidentiality) may, save for information which relates solely to the business
and operations of the Parent Body Organisation or information which is judged
by OCNS to be security sensitive (unless the recipient of information pursuant
to this Clause 10.3 (Disclosure by the Authority) holds all relevant security
clearances), disclose any and all information acquired by it under or pursuant
to this Contract (the Information)  10.3.1.1tothe Parliamentary Commissioner
for Administration, a Minister of the Crown, any department of the government
of the United Kingdom, the United Kingdom Parliament, the Scottish Parliament,
the National Assembly of Wales, the Mayor of London, Greater  155


London Authority or any
department, officer, agent, representative, employee, consultant or adviser of
any of them;  10.3.1.2to the Regulators;  10.3.1.3to the extent required by applicable Law or pursuant
to an order of any court of competent jurisdiction or under the Dispute
Resolution Procedure;  10.3.1.4to bidders who have pre-qualified to participate in
any relevant forthcoming tender process, upon obtaining an undertaking of
confidentiality equivalent to that contained in Clause 10.1 (Confidential
Information);  10.3.1.5to insurers upon obtaining an undertaking of
confidentiality equivalent to that contained in Clause 10.1 (Confidential
Information);  10.3.1.6to professional advisers, upon obtaining an
undertaking of confidentiality equivalent to that contained in Clause 10.1
(Confidential Information);  10.3.1.6.1for the purpose of:  10.3.1.6.1.1the examination and certification of the Authoritys
or the Contractors accounts; or  10.3.1.6.1.2any examination pursuant to Section 6(1)  of the National Audit Act 1983 of the economy, efficiency and
effectiveness with which the Authority has used its resources; and/or  10.3.1.6.2to consultees under the Energy
Act  10.3.2So far as is practicable, the
Authority shall give the Contractor reasonable notice of any proposed
disclosure pursuant to Clause 10.3 (Disclosure by the Authority).  10.3.3Notwithstanding the provisions of
Clause 10.1 (Confidential Information), the Authority may, with the consent of
the Contractor not to be unreasonably withheld, further disclose the
Information to persons not referred to in Clause 10.3 (Disclosure by the
Authority).  10.3.4Any determination as to whether it
is reasonable for the Contractor to withhold its consent to disclosure under
Clause 10.3.3 above shall have regard to:  156


10.3.4.1compliance
with the Authoritys statutory functions and duties, including in particular
the promotion of effective competition and value for money;  10.3.4.2. relevant Government policy;  10.3.4.3the
requirement to maintain security;  10.3.4.4the
public interest; and  10.3.4.5the
requirement to maintain openness and transparency.  10.4Publication  10.4.1The Authorityhaving considered any request made
by the Contractor pursuant to Clause 10.2 (Contractor right to request
confidentiality) may publish, in such form and at such times as it sees fit,
the following:  10.4.1.1amounts of payments to the Contractor and any reductions made from the
Contractor under this Contract;  10.4.1.2performance statistics;  10.4.1.3monitoring reports; and  10.4.1.4such information as the Authority reasonably requires to publish having
regard to the list of considerations set out in Clause 10.3.4 above, including
information it includes in its annual report.  10.4.2The Authority shall give the Contractor reasonable notice of any
proposed publication pursuant to this Clause 10.4(Publication).  10.5Disclosure by the Contractor  The Contractor may disclose without
the consent of the Authority, any and all information acquired by it under or pursuant to this Contract save for
information which is judged by OCNS to be security sensitive (unless the
recipient of information pursuant to this Clause 10.5 (Disclosure by the
Contractor) holds all relevant security clearances) to:  10.5.1 the Regulators  10.5.2 the
extent required by any parliamentary obligation, applicable Law or pursuant to
an order of any court of competent jurisdiction or under the Dispute Resolution
Procedure;  10.5.3
insurers, upon obtaining an undertaking of confidentiality equivalent to that
contained in Clause 10.1.1 (Confidential Information);  10.5.4
professional advisers including lenders, upon obtaining an undertaking of
confidentiality equivalent to that contained in Clause 10.1.1 (Confidential
Information); and  10.5.5 any
department, officer, agent, representative, employee, consultant or adviser of
any of the entities referred to in Clauses 10.5.1 to 10.5.4 above subject, in
any case where the entity in question would be required to provide an
undertaking of  157


confidentiality
equivalent to that contained in Clause 10.1.1 (Confidential Information), to
obtaining such an undertaking of confidentiality.  10.6Delivery
Up  On expiry or termination of this
Contract, the Contractor shall ensure or procure that the Nominated Staff return to the
Contractor or the Authority (as applicable) all documents, materials or any
information which is confidential (in accordance with Clause 10.1 (Confidential
Information) belonging to the Contractor or the Authority.  10.7Damages
not the only remedy  Without prejudice to any other rights or
remedies that the Authority may have, the Parties acknowledge and agree that
damages alone would not be an adequate remedy for any breach by the Contractor
of this Clause 10.1 (Confidentiality) and that the remedies of injunction and
specific performance as well as any other equitable relief for any threatened
or actual breach of this Clause 10.1 (Confidentiality) by the Contractor would
be more appropriate remedies.  10.8Freedom of Information Act  10.8.1This Part 10 (Confidentiality, Security and Compliance with Law) is
subject to the
Freedom of Information Act 2000 (FOIA), as amended, and the Environmental Information
Regulations 2004 (EIR), as amended together with any guidance and/or codes of
practice issued by the Information Commissioner, the Department for
Constitutional Affairs or the Lord Chancellors Department.  10.8.2The Contractor shall facilitate the
Authoritys compliance with its information disclosure obligations under the
FOIA and the EIR in the manner provided for in Clauses 10.8.2 to 10.8.6. and
shall also comply with a protocol to be agreed between the parties from time to
time detailing the practical arrangements and procedures to be adopted. If the
Authority is required to provide information as a result of a request made to
it under the FOIA or EIR and such information is in the possession of any of
the Contractor or any of its Subcontractors then the Contractor shall provide
such information to the Authority as soon as reasonably practicable.  The Contractor shall provide all necessary
assistance as reasonably requested by the Authority to enable the Authority to
respond to a Request for Information (as defined under the FOIA) within the
time for compliance set out in section 10 of the FOIA or regulation 5 of the
EIR.  10.8.3The Contractor
shall provide a nominated member of staff with sufficient authority to handle,
co-ordinate and be responsible for the supply of information to the Authority
for the purposes of compliance with this Clause 10.8.  10.8.4The Authority
shall be responsible for determining at its absolute discretion whether any
information provided to the Authority is exempt from disclosure in accordance
with the FOIA or EIR or is to be disclosed in response to a Request for
Information.  10.8.5The Contractor
acknowledges that the Authority may, acting in accordance with the FOIA or EIR,
disclose information without consulting the  158


Contractor, or the Authority may, at its discretion, elect to consult
the Contractor and take its view into account.  10.8.6The Contractor
acknowledges that any lists or schedules provided by it outlining confidential
information or commercially sensitive information are of indicative value only
and that the Authority may nevertheless be obliged to disclose such information
in accordance with this Clause 10.8.  10.9National Audit Office  The Parties acknowledge and agree
that the National Audit Office has the right to publish details of thisContract (including information
considered by the Parties to be commercially sensitive) in its relevant reports
to Parliament.  10.10Data Protection Act  10.10.1Each Party to this Contract shall ensure that it
complies at all times with the DPA or such other equivalent data
protection legislation as may be relevant to its performance of this Contract
in respect of all personal data processed by it.  10.10.2In relation to
all data, the Contractor shall at all times comply with the DPA as a data
controller if necessary, including maintaining a valid up-to-date registration
or notification under the DPA covering the data processing to be performed in
connection with its obligations under this Contract.  10.10.3The Contractor
shall, and shall procure that any Subcontractor shall, only undertake
processing of personal data reasonably required in connection with the
Contractors obligations under this Contract and shall not transfer any
personal data to any country or territory outside the European Economic Area.  10.10.4The Contractor
shall not disclose personal data to any Third Parties other than to:  10.10.4.1Employees, Nominated Staff and
Subcontractors to whom such disclosure is reasonably necessary in order for the
Contractor to carry out its obligations under this Contract; or  10.10.4.2to the extent required under a
court order,  provided that disclosure under
Clause 10.10.4.1 above is made subject to written terms substantially the same
as, and no less stringent than, the terms contained in this Clause 10.10 (Data
Protection Act) and that the Contractor shall givenotice in
writing to the Authority of any disclosure of personal data it or a
Subcontractor is required to make under Clause 10.10.4.2 above immediately it
is aware of such a requirement.  10.10.5The Contractor
shall bring into effect and maintain all technical and organisational measures
to prevent unauthorised or unlawful processing of personal data and accidental
loss or destruction of, or damage to, personal data including but not limited
to taking reasonable steps to ensure the reliability of Employees and Nominated
Staff having access to the personal data.  159


10.10.6The Authority
may, at reasonable intervals, request a written description of the technical
and organisational methods employed by the Contractor and referred to in Clause
10.10.5 above. Within thirty (30) Calendar Days of such a request, the
Contractor shall supply written particulars of all such measures detailed to a
reasonable level such that the Authority can determine whether or not, in
connection with the personal data, it is compliant with the DPA.  10.11Publicity  10.11.1Adverse Publicity  A Party shall notify the other Party
as soon as reasonably practicable of any fact or occurrence of which the
notifying Party is aware relating to the Authority,Contractor or the Parent Body Organisation which could in the reasonable
opinion of the notifying Party be expected to cause adverse publicity to the
Contractor or the Parent Body Organisation in relation to this Contract or to
the Authority generally.  10.11.2Announcements  10.11.2.1Subject to the remaining
provisions of this Clause, no Party shall release any announcement or despatch
any announcement or circular, relating to this Contract unless the form and
content of such announcement or circular have been submitted to, and agreed by,
the other Party.  10.11.2.2Nothing in this Clause 10.11.2
(Announcements) shall prohibit any Party from making any announcement or
despatching any circular as required by law or the rules of the UK Listing
Authority or of the London Stock Exchange or any other regulatory body in which
case, to the extent not inconsistent with legal obligations or the rules of
the UK Listing Authority or of the London Stock Exchange, the announcement
shall only be released or the circular despatched after consultation with the
other Party and after taking into account the reasonable requirements of the
other Party as to the content of such announcement or circular.  160


PART 11INDEMNITY, LIABILITY AND INSURANCE  11.1The Authority
shall notify the Contractor of the policies it has negotiated in respect of the
Contractor Required Insurances.  11.2The Contractor
shall fully co-operate in the procurement of the Contractor Required Insurances
as directed by the Authority.  11.3Except as
expressly directed by the Authority, the Contractor shall not take out any
insurance other than pursuant to Clause 11.2 above.  11.4The Contractor
shall not take any action or fail to take any reasonable action, or (insofar as
it is reasonably within its power) permit anything to occur in relation to it,
which would entitle any insurer to refuse to pay any claim under:  11.4.1any Contractor
Required Insurance(s) under which it is an insured person; or  11.4.2any insurance
taken over by the Authority relating to this Contractor and the terms of which
the Authority has notified the Contractor in writing.  11.5The Contractor
shall notify the Authority and relevant insurers immediately on becoming aware
of any claim or potential claim on the Contractor Required Insurance or on any
insurance taken out by the Authority in relation to the Sites, facilities or
installations and/or the activities of the Contractor or Subcontractors and
shall follow promptly all directions given to it by the Authority or the
insurers in relation to such claim or potential claim including in particular
full disclosure of all relevant facts pertaining to the claim or potential
claim.  11.6The Contractor
shall either apply the proceeds of any claims on the Contractor Required
Insurance as directed by the Authority or, at the direction of the Authority
remit such amount to the Authority, in either case within nine (9) Calendar
Days of the receipt of such proceeds by the Contractor.  161


PART 12TERMINATION  12.1Termination
Events  This
Contract shall terminate on the earlier of the expiry of the Term pursuant to
Clause 1.3 (Commencement and Duration) or as a result of:  12.1.1early termination caused by Contractor Default in accordance with Clause 12.2;  12.1.2early
termination caused by Authority Default in accordance with Clause 12.6;  12.1.3Termination for
Convenience by the Authority in accordance with Clause 12.8; or  12.1.4termination for
Long Term Force Majeure in accordance with Clause 1.9.4.  12.2Contractor
Default  The
following events shall give rise to an Authority right to terminate for
Contractor Default:  12.2.1Breach of
Contractor Obligations  12.2.1.1A material breach by the Contractor of any of its
obligations under this Contract which materially and adversely affects the
performance of this Contract, including:  12.2.1.2a failure by the Contractor to comply with
applicable Law or Regulatory Requirements;  12.2.1.3a material breach by the Contractor of security requirements;  12.2.1.4a failure by the Contractor to meet those standards
of performance specified in Clause 2.2 (Standard of Performance) other than the
standards specified in Clauses 2.2.4 and 2.2.5;  12.2.1.5a material adverse finding is made against the
Contractor by any one or more of the Regulators in relation to the
Contractors performance of its obligations under this Contract;  12.2.1.6a material breach by the Contractor of its supply
obligations to Customers under the Customer Contracts;  12.2.1.7a material failure by the Contractor to comply with
the provisions of Clauses 5.12 and 5.12A (Pensions);  12.2.1.8a material failure by the Contractor to comply with
the provisions of Part 10 (Confidentiality, Security and Compliance with
Law);  12.2.1.9a failure by the Contractor to comply with the
provisions of Clause 1.18 (Assignment);  162


12.2.1.10the Parent Body Organisation undergoes a Change in
Control without having obtained the prior written consent of the Authority to
such change;  12.2.1.11Persistent Breach; or  12.2.1.12a failure by the Contractor to report to the
Authority a breach of the subcontracting requirements set out in Part 1
(Subcontracting/Procurement Requirements) of the Subcontracting/Procurement
Schedule; except where the event in question was caused by the Authority
failing to reimburse the Contractor for Allowable Costs or Trading Costs
pursuant to Clauses 6.11 and 6A.11 (Reimbursement).  12.2.2Insolvency  The occurrence of an
Insolvency Event in respect of the Contractor or the Parent Body Organisation
except where in the case of the Contractor such Insolvency Event was:  12.2.2.1caused by the Authoritys belief that funds were to
be used for a purpose which was fraudulent, otherwise illegal or contrary to
public policy which was not proved correct; or  12.2.2.2caused by the Authority failing to reimburse the
Contractor for Allowable Costs or Trading Costs pursuant to Clauses 6.11 and
6A.11 above (Reimbursement).  12.2.3Revocation of
licence  12.2.3.1any revocation of the Nuclear Site Licence, any
Environmental Agency or Scottish Environment Protection Agency (as applicable)
licence, authorisation, permit or consent or any other material licence or
permit held by the Contractor the possession of which is necessary to enable
the Contractor to operate the Site; or  12.2.3.2upon receipt of notice by the Contractor of the HSEs
(or other relevant bodys) intention to revoke such licence or permit where the
Contractor has no ability to appeal, challenge or discharge any such intention
to revoke;  12.2.3.3.in either case where such revocation or threatened
revocation is not for the sole purpose of issuing a replacement licence to the
Contractor.  12.2.4Parent Body Agreement  A
material or persistent breach by the Contractor or the Parent Body Organisation
of the Parent Body Agreement or upon the Parent Body Agreement ceasing to be
valid and binding on the Parent Body Organisation.  163


12.3Termination
for Persistent Breach  12.3.1For the
purposes of this Clause 12.3 (Termination for Persistent Breach), Breach of
the Same Type means the recurrence of any of the events specified in Clause
12.2.1, whether or not each occurrence was in itself of a material nature.  12.3.2Except where
the occurrence is caused by the Authority failing to reimburse the Contractor
for Allowable Costs or Trading Costs pursuant to Clauses 6.11 and 6A.11
(Reimbursement) if any of:  (i) a Breach of the Same Type; or  (ii) a failure to pay creditors pursuant to its
obligations under Clauses 6.6.1.1(A) and 6A.6.1.1.2; or  (iii) a failure to Protect the Supply Chain; or  (iv) a failure to comply with Clause 2.2.5
(Standard of Performance).  12.3.2.1has occurred more than 2 times in any 3 month period
or the Authority (acting reasonably) believes that the Contractor is
demonstrating a pattern of behaviour which is reasonably likely to lead to a
Contractor Default, then the Authority may serve a notice on the Contractor;  12.3.2.2specifying that it is a formal warning notice (Performance
Warning Notice) giving reasonable details of the breach specifying the
Authoritys concerns; and  12.3.2.3stating that such breach is a breach which, if it
recurs frequently or continues, may result in a termination of this Contract,
or requiring the Contractor to take steps to address those concerns by a
specified date.  12.3.3If, following
service of such a Performance Warning Notice, the breach specified has continued
beyond the specified date or recurred one or more times within the 6 month
period after the date of service, then the Authority may serve another notice
on the Contractor (Final Performance Warning Notice):  12.3.3.1specifying that it is the final warning notice;  12.3.3.2stating that the breach specified has been the
subject of a Performance Warning Notice served within the six (6) month
period prior to the date of service of the Final Performance Warning Notice;
and  12.3.3.3stating that if such failure continues or recurs
one or more times within the three (3) month period after the date of
service of the Final Performance Warning notice, the same may constitute a
Contractor Default with the result that the Contract may be terminated.  164


12.3.4A Performance
Warning Notice may not be served in respect of any breach in respect of which a
previous Performance Warning Notice has already been served until a period of
three (3) months has elapsed since the date of service of the previous
Performance Warning Notice or related Final Performance Warning Notice.  12.4Termination
or Remedy for Contractor Default  12.4.1If a Contractor Default has occurred and the
Authority wishes to terminate this Contract, the Authority shall serve a
termination notice (theAuthoritys Termination Notice) on the Contractor.  12.4.2The Authoritys Termination Notice shall specify the
type and nature of Contractor Default that has occurred, giving reasonable
details.  12.4.3In the case of a Contractor Default in the type
specified in Clauses 12.2.1.1, 12.2.1.2, 12.2.1.6, 12.2.1.7 or 12.2.1.8
 the Authority (acting reasonably) may decide that the Contractor Default
is incapable of remedy, the Authority shall specify this in the Authoritys
Termination Notice and this Contract shall terminate on the date falling thirty
(30) Calendar Days after the date of receipt by the Contractor of the Authoritys
Termination Notice.  12.4.4In the case of a Contractor Default (including, for
the avoidance of doubt, the types specified in Clause 12.4.3 above) which the
Authority (acting reasonably) considers is capable of remedy, the Authoritys
Termination Notice shall require the Contractor at the Contractors option
either:  12.4.4.1to remedy the Contractor Default within thirty (30)
Calendar Days of the date of the Authoritys Termination Notice (or such longer
period as may be agreed by the Authority in its absolute discretion);  12.4.4.2to propose within thirty (30) Calendar Days of the
date of the Authoritys Termination Notice and obtain the Authoritys approval
to a programme to remedy the Contractor Default (the Remediation Programme).  12.4.5If the Contractor Default is not remedied within the
period specified in the Authoritys Termination Notice for such remedy under
Clause 12.4.4.1, the Authority shall be entitled to terminate this Contract
either with immediate effect or on such period of notice not exceeding 12
months as it reasonably determines to be appropriate.  If the Authority
terminates on notice, it will use all reasonable endeavours, including liaison
with the Regulators, to ensure that the period of notice is as short as
possible.  12.5Remediation
Programme  12.5.1The Remediation Programme shall specify in detail
how the Contractor Default is proposed to be remedied, the steps required to
remedy the Contractor Default and the latest date by which the Contractor
anticipates that the Contractor Default will be remedied.  12.5.2Where the Contractor proposes a Remediation
Programme in accordance with Clause 12.4.4.2 (Termination or Remedy for
Contractor Default), the Authority shall have thirty (30) Calendar Days from
the date of receipt of  165


the proposed Remediation
Programme within which to notify the Contractor whether the Authority accepts
the proposed Remediation Programme (such acceptance not to be unreasonably
withheld).  Failure of the Authority to
provide such notification shall constitute deemed acceptance by the Authority.  12.5.3Where the Authority notifies the Contractor that it
does not accept the Remediation Programme, the Parties shall endeavour within
the following thirty (30) Calendar Days to agree any necessary amendments to
the Remediation Programme.  In the absence of agreement within such thirty
(30) Calendar Day period, the question of whether or not the Authoritys
withholding of acceptance is reasonable may be referred by either Party to be
resolved in accordance with Clause 13 (Dispute Management).  12.5.4Where the Contractor has put forward a Remediation
Programme that has been accepted by the Authority or determined to be
reasonable and the Contractor fails to achieve any element of the Remediation
Programme or fails to remedy the Contractor Default within the date specified
in the Remediation Programme (as the event may be), or the Remediation
Programme is rejected by the Authority as not being reasonable and the Dispute
Resolution Proceduredoes
not find against that rejection, then the Authority may terminate this Contract
either with immediate effect or on such period of notice as it reasonably
determines to be appropriate.  If the Authority terminates on notice, it
will use all reasonable endeavours, including liaison with the Regulators, to
ensure that the period of notice is as short as possible.  12.5.5Where the Authority has issued an Authority
Termination Notice in the event of Contractor Default pursuant to Clause 12.2.3
(Revocation of licence) which the Authority accepts (acting reasonably) has
occurred through no fault of the Contractor, the Authority shall provide
reasonable assistance to the Contractor in its discussions with HSE and/or EA
or SEPA as applicable to procure the remedy of such Contractor Default.  12.6Authority
Default  12.6.1The following events shall be an
Authority Default:  the Authority:  12.6.1.1not funding or reimbursing Allowable Costs or
Trading Costs (except to the extent that such Costs are treated as Disallowable
Costs in accordance with this Contract); or  12.6.1.2failing to make any undisputed payment of Incentive
Fee to the Contractor in accordance with Clauses 6.11.3 and 6A.11.5
(Performance Based Incentive Arrangements),  12.6.1.3in each case within thirty (30) Calendar Days of
such sum(s) being due and payable; and  12.6.1.4a material breach by the Authority of its
obligations under this Contract which materially and substantially prevents the
performance of the Contractors obligations under this Contract.  166


12.7Termination
or Remedy for Authority Default  12.7.1If an Authority Default has occurred and the
Contractor wishes to terminate this Contract, the Contractor shall be entitled
to serve a termination notice (theContractors Termination
Notice) on the Authority within
twenty-eight (28) Calendar Days of becoming aware of the Authority Default.  12.7.2The Contractors Termination Notice shall specify
the type of Authority Default that has occurred entitling the Contractor to terminate.  12.7.3This Contract will terminate on the day falling
thirty (30) Calendar Days after the date on which the Authority received the
Contractors Termination Notice, unless the Authority rectifies the Authority
Default within twenty-one (21) Calendar Days of receipt of the Contractors
Termination Notice.  12.7.4Where the Contractor has terminated this Contract
for Authority Default, the Authority shall provide reasonable assistance to the
Contractor in its discussions with HSE regarding Licence Condition 36 and its
discussions with EA regarding any applicable RSA 93 Authorisation Schedule 1
Condition 6 with a view to enabling the Contractor to replace the Nominated
Staff as soon as is reasonably practical.  12.8Termination
for Convenience  The Authority shall be entitled to terminate this Contract at any time
on giving reasonable notice to the Contractor such notice not being a period
less than twelve (12) Months (Termination
for Convenience).  12.9Reasonable
Costs on Termination  In the event of:  12.9.1termination for Authority Default in accordance with
Clause 12.7 (Termination or Remedy for Authority Default);  12.9.2Termination for Convenience pursuant to Clause 12.8
(Termination for Convenience);  12.9.3termination for Long Term Force Majeure pursuant to
Clause 1.9.4 (Long Term Force Majeure); or  12.9.4termination for an Insolvency Event of the
Contractor where such Insolvency Event was caused by any of the events listed
in Clause 12.2.2 (Insolvency),  the Authority shall pay the Contractors reasonable costs (proposed by
the Contractor and agreed by the Authority) arising directly from such
termination of this Contract provided always that the Authority shall not make
any payment in respect of the Contractors loss of profits or loss of
opportunity or the consequential losses of Affiliates.  167


12.10Accrued
Liabilities  Termination of this Contract pursuant to this Clause
12 (Termination) shall be without prejudice to the Parties liabilities which
accrued prior to the date of termination.  168


PART 13 DISPUTE
MANAGEMENT  13.1Requirement to refer disputes  13.1.1Save as otherwise expressly provided in this
Contract including in Clauses 13.2 (Reasonableness of the Authority), any
dispute or difference arising out of or in connection with this Contract,
including, but not limited to, any question regarding its existence,
interpretation, validity, construction or termination shall be attempted to be
resolved between the Contractor and the Authority. If any dispute or difference
cannot be so resolved, it shall be resolved in accordance with the Dispute
Resolution Procedure attached at the Dispute Management Schedule.  13.1.2Neither Party shall commence any claim, legal action
or proceedings until it has followed the Dispute Resolution Procedure, provided
that nothing in the Dispute Resolution Procedure shall prevent a Party from
seeking interim or interlocutory relief in the English courts.  13.2Reasonableness of the Authority  13.2.1In relation to the Clauses and Schedules listed in
Clause 13.2.2 below pursuant to which the Authority shall reasonably determine
certain matters, the Contractor may only dispute whether a determination made
by the Authority is reasonable. Such dispute shall be attempted to be resolved
between the Contractor and the Authority and if it cannot be so resolved, only
the issue of the reasonableness of the Authoritys decision may be referred to
the Dispute Resolution Procedure. The Authoritys determination pursuant to the
relevant clause shall prevail unless and until it is agreed or found to be
unreasonable. In the event that the Authority is found to have acted
reasonably, the Contractors costs relating to the reference of the dispute to
the Dispute Resolution Procedure shall be Disallowable and the Authority shall
claim its relevant costs from the Parent Body Organisation pursuant to the
Parent Body Agreement. In the event that the Authority is found to have acted unreasonably,
the Authority shall bear such costs.  13.2.2The Clauses and Schedules referred to in Clause
13.2.1 above are:  13.2.2.1Clause 2.3 (No activities outside current Contract
Year of LTP), the Authoritys determination as to whether an activity is
outside of the LTP; and  13.2.2.2Clause 4.5.12 (Audit Findings and Corrective Action)
in relation to the Authoritys reasonable withholding of acceptance to the
Contractors plan for Corrective Action; and  13.2.2.3Clause 12.4 (Termination or Remedy for Contractor
Default) in relation to whether the Authority has acted reasonably in
determining that the Contractor Default is incapable of remedy; and  13.2.2.4Clause 12.5 (Remedial Programme) in relation to the
Authoritys reasonable withholding of acceptance to the Contractors Remedial
Programme; and  169


13.2.2.5Programme Management Schedule Part 2 (Setting
the LTP and Change Control) other than Paragraph 9.2 (Change Directed by the
NDA) and Paragraph 11 (Changes that the Authority Cannot Refuse); and  13.2.2.6Subcontracting/Procurement Schedule Paragraph 1.1.2
of Part 1 (Subcontracting/Procurement Requirements), the Authoritys
interpretation of the applicable EU Procurement Rules; and  13.2.2.7Finance Schedule Part 4 (Costs Principles and
Procedures); and  13.2.2.8Finance Schedule Part 2(Use of Performance Based
Incentives); and  13.2.2.9Clause 7.3 (Transitional Balances) of Finance
Schedule Part 6 (Cashflow Forecasting and Calculating Dates for Payment)
in relation to the Authoritys determination of the Transitional Balance
Payment Dates; and  13.2.2.10Clause 7.4 (Transitional Balances) of Finance
Schedule Part 6 (Cashflow Forecasting and Calculating Dates for Payment)
in relation to the Authoritys determination of the revised Transitional
Balance Payment Dates.  170


PART 14RELETTING
THE CONTRACT  14.1Acknowledgement  The Contractor acknowledges that the Authority may wish, at or before
the expiry of the Term:  14.1.1to invite persons (including the Parent Body
Organisation) to tender for the right to own the shares in the Contractor and
to negotiate a replacement Site Management and Operations Contract to be
entered into between the Contractor and the Authority (upon the acquisition of
the shares by the Incoming Parent); or  14.1.2to acquire the shares in the Contractor itself.  14.2Preparation
for Reletting  The Contractor will, if so requested by the Authority, provide the
Authority with access to the personnel of the Contractor and all books, records
and other materials kept by or on behalf of the Contractor in connection with
the Tasks for the purpose of assisting the Authority in relation to the tender
and/or transfer referred to in Clause 14.1 (Acknowledgement) and will supply an
external facing team to assist the Authority with the reletting of the Contract
which team must consist of a sufficient number of sufficiently qualified and
experienced people (in the reasonable opinion of the Contractor). Subject to
Clause 10 (Confidentiality, Security and Compliance with Law) the Authority
will be permitted to make such personnel, including the external facing team,
books, records or other material available to participants in the tender process.  14.3The Contractor will make
available to the Authority such information (including financial and
operational information) as the Authority reasonably requires in connection
with such tender and/or transfer and will be required to assist in the verification
of the information.  14.4Parent
Body Organisation Bid  The Contractor acknowledges the importance to the Authority of:  14.4.1a fair and unbiased competitive process; and  14.4.2the perception by all interested parties that the
competitive process is fair and unbiased.  14.5If
the Parent Body Organisation wishes to participate in the competitive process
then immediately on receipt of notice from the Authority notifying the
Contractor of the commencement of a competitive process for the Sites, the Contractor
shall demonstrate to the satisfaction of the Authority that:  14.5.1the Contractor is remaining impartial;  14.5.2treating all tenderers equally including providing
them with equality of information;  14.5.3making the Employees (except for the Nominated
Staff) equally available to assist and be consulted by tenderers;  14.5.4using all reasonable endeavours to procure that the
tenderers perceive that they are being treated equally;  171


14.5.5the time costs for any Nominated Staff who the
Parent Body Organisation is permitted to use in its bid team pursuant to Clause
16 (Provision of Staff to the SLC) of the Parent Body Agreement will be charged
to an appropriate corporate centre and will not be charged as Allowable Costs;
and  14.5.6all Nominated Staff and Key Employees have entered
into an Impartiality Undertaking in the form of Part 5 of the Employee
Schedule (Pro Forma Impartiality Undertaking).  14.6The
Contractor shall not allow any Nominated Staff to participate in the
competitive process on behalf of the Parent Body Organisation unless they are
individually named in the list agreed between the Parent Body Organisation and
the Authority pursuant to Clause 14.4 of the Parent Body Agreement.  For the avoidance of doubt, the Contractor
shall not allow any Employee to participate in the competitive process.  14.7Employees  Save as where otherwise permitted by the Contractors Internal
Procedures relating to human resources, and save as where otherwise required by
applicable Law and Regulatory Requirements, during the last twelve (12) Months
of the Term, the Contractor will not be permitted without the prior written
consent of the Authority (such consent not to be unreasonably withheld):  14.7.1to vary or purport or promise to vary the terms and
conditions of employment or pensions terms of any Employees or Nominated Staff;  14.7.2to create or grant, or purport or promise to create
or grant, terms or conditions of employment for any Employee where the
employment of such Employee by the Contractor may commence on or after the end
of the Term if and to the extent that such terms or conditions are materially
different from the terms or conditions of employment of equivalent Employees;  14.7.3to increase or decrease the number of Employees such
that:  14.7.3.1the total number of Employees or the total cost per
annum to the Contractor of employing all Employees is increased; or  14.7.3.2the total number of Employees is decreased,  in each case, by more than 5 per cent during such
period of twelve (12) Months; and  14.7.4to make any changes to the identity of any Key
Personnel or to any of the Nominated Staff.  14.8Subcontracts  Save as permitted by Part 1 of the Subcontractor/Procurement
Schedule (Subcontracting/Procurement Requirements), during the last twelve (12)
Months of the Term, the Contractor will not be permitted to agree to any
significant or material amendment of the terms of any Subcontract without the
Authoritys prior written consent (such consent not to be unreasonably
withheld).  14.9The
Authority may require the Contractor to take steps to terminate any
Subcontracts that will continue beyond the expiry or earlier termination of the
Term.  172


14.10ESTABLISHMENT OF NEW SLC  14.10.1If the Authority notifies the Contractor that it intends to establish a
new SLC, the Contractor shall fully cooperate with any reasonable instruction
of the Authority to assist in such establishment including in relation to
consultation of relevant Employees regarding transfer to the new SLC,
separability of IT systems, novation or assignment of IT Contracts, Customer
Contracts and Subcontracts, the requirement to put legally binding contracts in
place between the new SLC and the Contractor and any party with whom the
Contractor has Inter-SLC Service Contract and obtaining a new Nuclear Site
Licence in respect of the relevant site.  14.10.2The Contractor
shall have due regard to the Authoritys intention to establish new SLCs in the
performance of its obligations under this Contract.  14.10.3Any requirement
of the Authority placed on the Contractor pursuant to this Clause 14.10
(Establishment of New SLC) shall, to the extent that such requirement is not in
the relevant current Contract Years NTWP, be an Authority Change to be
included in the NTWP in accordance with Paragraph 9 (Change Directed by the
NDA) of Part 2 (Setting the LTP and Change Control) of the Programme
Management Schedule.  14.11TRANSITION OUT  14.11.1The Contractor undertakes to the Authority that it will co-operate with
the reasonable instructions of the Outgoing Parent and, in particular, will use
all reasonable endeavours to facilitate the release of the Nominated Staff of
the Outgoing Parent as soon as is compatible with Regulatory Requirements.  14.11.2Save to the extent the Contractor must comply with applicable Law and
Regulatory Requirements, the Contractor undertakes to the Authority not to take
any action which prevents, prejudices or frustrates the transition between the
Outgoing Parent and the Incoming Parent.  173


Nuclear
DecommissioningAuthority  Mark
  Lesinski
  Our
  ref: T1-MS-07-NDA- 407
  {RR
  - Reply Requested]
  Your
  ref: T1-MS-07-MEL-1449Managing
  Director - Magnox South
  Magnox Electric Ltd
  Mallard CourtExpress
  ParkBristol
  RoadBridgwaterSomersetTA64RN  31stMarch 2009  Dear Mark  CONTRACT No: NDA-T1-MS-07  Subject:Formal Issue of
Magnox South Contract Amendment 11 dated 10thMarch 2009  Please find enclosed Amendment 11
to the Magnox South Amended, Restated and Consolidated Site Management and
Operations Contract which records changes agreed by both parties.  This letter also records the
extension of the above Contract to cover a period of three years from 1stApril 2009 to 31stMarch 2012 with a further option of a
single additional one year extension if required. NDA will give a minimum of
six months notice of their intention to take up this option.  Please record your acceptance of
this extension and amendment by returning a copy of the contract amendment duly
signed in accordance with the Contract.   Yours sincerely   /s/
  C LITTLECHILDC
  LittlechildFor
  and on behalf of
  Dr Brian BurnettProgramme Director, Magnox
  South  1000 Birchwood Blvd
  T+44(0)1925 802303
  www.nda.gov.ukBirchwoodWarrington WA3 7QL


CcFile copy
S Barker
P Welch  Enclosures  Magnox
South Amended, Restated and Consolidated Site Mangement and Operations Contract
- Amendment 11 dated io March 2009 signed by John Clarke New
clause 5.12 Pensions Updated
Schedules 1 part1; 9 part 1; 10 and 19