Dated 27 AUGUST 2014

SITE LICENCE COMPANY AGREEMENT relating to the restoration of the Magnox Limited and Research Sites Restoration Limited

nuclear licensed sites

NUCLEAR DECOMMISSIONING AUTHORITY

and

MAGNOX LIMITED

and

RESEARCH SITES RESTORATION LIMITED

(1)

(2)

(3)

Contract Ref: NDA-T1-MXR-14

CONTENTS

Clause Heading Page

PART 1: Interpretation ................................................................................................................... 2

1 INTERPRETATION .......................................................................................................... 2

PART 2: Term and Transition ...................................................................................................... 69

2 COMMENCEMENT AND DURATION ........................................................................... 69

PART 3: Core Obligations ........................................................................................................... 69

3 WARRANTIES................................................................................................................ 69

4 CONTRACTOR'S OBLIGATIONS ................................................................................. 71

5 RIGHTS AND OBLIGATIONS OF AUTHORITY ............................................................ 79

PART 4: Ancillary Obligations ..................................................................................................... 84

6 ASSET MANAGEMENT ................................................................................................. 84

7 SECURITY ..................................................................................................................... 90

8 INTEGRATED MANAGEMENT SYSTEM ..................................................................... 91

9 SOCIO-ECONOMIC DEVELOPMENT .......................................................................... 93

10 CDM REGULATIONS .................................................................................................... 94

PART 5: Performance and Monitoring ........................................................................................ 95

11 DEFECTIVE PERFORMANCE AND REMEDIATION ................................................... 95

12 DEPENDENCY EVENTS ............................................................................................. 101

13 FORCE MAJEURE ....................................................................................................... 103

14 PERFORMANCE MANAGEMENT, PERFORMANCE ASSURANCE AND

RECORDS .................................................................................................................... 106

15 INSPECTION AND AUDIT ........................................................................................... 113

PART 6: Financial Matters and Liability .................................................................................... 119

16 FINANCE ...................................................................................................................... 119

17 CLAIMS HANDLING .................................................................................................... 156

18 INSURANCE ................................................................................................................ 156

19 LIABILITIES AND INDEMNITIES ................................................................................. 159

PART 7: Contracting and Inter SLC Activities ........................................................................... 161

20 AUTHORITY RIGHTS IN RESPECT OF CUSTOMER CONTRACTS ........................ 161

21 PERMITTED ACTIVITIES ............................................................................................ 162

22 SUBCONTRACTING / PROCUREMENT .................................................................... 163

23 INTER SLC SERVICE CONTRACTS .......................................................................... 165

24 CROSS ESTATE INITIATIVES .................................................................................... 168

PART 8: Information Governance ............................................................................................. 170

25 CONFIDENTIALITY AND COMPLIANCE WITH LEGISLATION ................................. 170

26 FREEDOM OF INFORMATION ................................................................................... 175

27 DATA PROTECTION ................................................................................................... 177

28 KNOWLEDGE MANAGEMENT ................................................................................... 178

PART 9: Intellectual Property and IT ......................................................................................... 178

29 INTELLECTUAL PROPERTY ...................................................................................... 178

30 INFORMATION TECHNOLOGY .................................................................................. 194

PART 10: Personnel Matters ..................................................................................................... 198

31 EMPLOYEES AND NOMINATED STAFF ................................................................... 198

32 PENSIONS ................................................................................................................... 215

PART 11: Termination ............................................................................................................... 220

33 TERMINATION ............................................................................................................. 220

34 TRANSITION OUT ....................................................................................................... 223

35 TRANSITION ON EXPIRY OR TERMINATION ........................................................... 226

36 DISPUTES .................................................................................................................... 229

PART 12: Contract Administration and Miscellaneous Provisions ............................................ 229

37 MISCELLANEOUS ....................................................................................................... 230

Schedule 1 – Client Specification Schedule 2 – Change Control Procedure Schedule 3 – Financial Sanction and Validation Schedule 4 – Commercial Schedule 5 – Subcontracting and Procurement Schedule 6 – Finance Schedule 7 – Employment Schedule 8 – Intellectual Property Schedule 9 – Information Technology Schedule 10 – Insurance Schedule 11 – Authority Deliverables Schedule 12 – Dispute Resolution Procedure Schedule 13 – Reporting Schedule 14 – Freedom of Information Schedule 15 – Minimum Performance Standards Schedule 16 – Property Schedule 17 – Electricity Interface Obligation Schedule 18 – State Aid Decision Schedule 19 – Authority Policies and Procedures Schedule 20 – Call-Off Support

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THIS AGREEMENT is made as a deed on 27 AUGUST 2014

BETWEEN:

(1) NUCLEAR DECOMMISSIONING AUTHORITY, a Non-Departmental Public Body

whose head office is at Herdus House, West Lakes Science and Technology Park,

Moor Row, Cumbria (the "Authority");

(2) MAGNOX LIMITED, whose registered office is at Berkeley Centre, Berkeley,

Gloucestershire, GL13 9PB a company incorporated under the laws of England and

Wales with registered number 02264251 (the "Magnox Contractor"); and

(3) RESEARCH SITES RESTORATION LIMITED, whose registered office is at Building

392.10/Room 1.05, Harwell Oxford, Didcot, Oxfordshire, OX11 0DF, a company

incorporated under the laws of England and Wales with registered number 05915837

(the "RSRL Contractor"),

each a "Party" and together the "Parties".

WHEREAS:

(A) by an advertisement in the Supplement to the Official Journal of the European Union

dated 18 July 2012 (reference 227570-2012) the Authority invited expressions of

interest from economic operators wishing to be appointed to acquire and hold the share

capital of the Magnox Contractor and the RSRL Contractor and to provide Nominated

Staff and other services to the Magnox Contractor and the RSRL Contractor as the

parent body organisation of the Magnox Contractor and the RSRL Contractor, with a

view to promoting and supporting the delivery of improved value for money in the

Magnox Contractor’s and the RSRL Contractor's operations without compromising

health, safety, security or the protection of the environment;

(B) the Parent Body Organisation submitted an expression of interest and was selected to

act as the parent body organisation of the Magnox Contractor and the RSRL

Contractor;

(C) the Authority, the Magnox Contractor and the RSRL Contractor and the Parent Body

Organisation have entered into the Parent Body Agreement and, as of the

Commencement Date, the Parent Body Organisation holds the Magnox A Share and

the RSRL A Share;

(D) the Magnox Contractor and the RSRL Contractor and all relevant individuals hold the

relevant licences, authorisations, registrations, permits and consents required by

Legislation or Regulatory Requirements.

IT IS AGREED AS FOLLOWS:

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PART 1: Interpretation

1 INTERPRETATION

1.1 Definitions

In this Agreement (including the Recitals, Schedules and Tables of Contents) the

following terms shall, unless the context otherwise requires, have the meanings

ascribed below:

"Accounting Month" means the four or five week accounting month used by the

Contractor for the purposes of its reporting requirements (and "Accounting Monthly"

shall be construed accordingly);

"Accounting Policies and Procedures" means the Contractor's accounting policies

and procedures used by the Contractor in the production of financial statements on the

Commencement Date as the same may be amended and updated with the agreement

of the Authority from time to time;

"Accounting Standards" means the rules and conventions according to which financial

statements have to be prepared either by the Contractor for the production of its

statutory accounts or by the Contractor and Authority for the production of the Authority

statutory accounts, the latter to be advised by the Authority to the Contractor from time

to time;

"Accumulated Site Target Fee" means, in respect of a Site, the sum of all Allocated

Target Fee amounts in respect of Target Fee Payment Milestones pertaining to that Site

(as set out in the columns headed "Site" of the tables at Appendix K (Target Fee

Payment Milestones) to Schedule 6 (Finance)) which have been Achieved either:

(a) where a Site Substantial Completion Date has not been achieved, since the

Commencement Date; or

(b) where a Site Substantial Completion Date has been achieved, since the

achievement of that Site Substantial Completion Date;

"Achievement" means completion of the scope of work entailed by:

(a) a Target Fee Payment Milestone, in accordance with the completion criteria and

evidence of completion specified for such Target Fee Payment Milestone in the

relevant table at Appendix K (Target Fee Payment Milestones) to Schedule 6

(Finance), as further developed and underpinned by the relevant Performance

Agreement Form agreed pursuant to Section B (Performance Agreement Forms

for Target Fee Payment Milestones) of Part 5 (Performance Agreement Form)

of this Schedule 6 (Finance);

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(b) Phase 1 Completion, as evidenced in accordance with Schedule 1 (Client

Specification); or

(c) Phase 2 Completion, as evidenced in accordance with Schedule 1 (Client

Specification),

and "Achieve", "Achieved" and "Achieving" shall be construed accordingly;

"Actual Phase 1 Inflation" has the meaning given to it in Paragraph 3.2 (Adjustment of

the Phase 2 Target Fee) of Part 8 (Indexation) of Schedule 6 (Finance);

"Additional Quarterly Retention" has the meaning given to it in Paragraph 2.9

(Calculation of Retention Balance) of Part 4B (Calculation of Target Fee) of Schedule 6

(Finance);

"Additional Site Release" has the meaning given to it in Paragraph 5 (Release of

retention for incomplete Sites) of Part 4D (Arrangements on Termination for

Convenience) of Schedule 6 (Finance);

"Advance Agreement" means any agreement between the Authority and the

Contractor entered into in accordance with Paragraph 3 (Advance Agreements) of Part

2A (Allowable and Disallowable Costs) of Schedule 6 (Finance);

"Affected Party" has the meaning given in Clause 13.1 (Force Majeure);

"Affiliate" means any entity, not being the Magnox Contractor, the RSRL Contractor or

the Parent Body Organisation, which is:

(a) a shareholder in the Parent Body Organisation ("PBO Shareholder") or any

holding company or subsidiary of any PBO Shareholder ("holding company" and

"subsidiary" having the same meanings as in section 1159 of the Companies

Act 2006), together "Related Companies";

(b) a subsidiary or holding company of a Related Company;

(c) a company which has shareholdings or any other form of economic interest,

either directly or indirectly, of more than thirty per cent (30%) in the Parent Body

Organisation or in any Related Company;

(d) a wholly owned subsidiary of the Contractor or Parent Body Organisation;

(e) 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 thirty per cent (30%) of the issued shares;

4

(f) a company with which the Contractor and/or the Parent Body Organisation,

either jointly or separately, has a Relevant Partnering Arrangement in force;

(g) a company in which the Contractor and/or the Parent Body Organisation, either

jointly or separately, has less than a thirty per cent (30%) economic interest, but

where the economic interest is of such a nature as to create the perception of a

conflict of interest; or

(h) a company owned or controlled, directly or indirectly, to the extent of thirty per

cent (30%) or more of the outstanding equities, securities or assets by the

Parent Body Organisation or any of the companies described in (a), (b), (c) or

(d) above;

"Agreed Cash Flow Requirement" has the meaning given to it in Paragraph 2.1(c)

(Invoicing and Payment Process) Part 2B (Payment of Allowable Costs) of Schedule 6

(Finance);

"Agreed Payment Profile" has the meaning given to it in Paragraph 2.1(b) (Invoicing

and Payment Process) Part 2B (Payment of Allowable Costs) of Schedule 6 (Finance);

"AiP" or "Approval in Principle" has the meaning given to it in Paragraph 3.2.4.1

(Gated Process for Sanction and Validation of Work Activities) of Schedule 3 (Financial

Sanction and Validation);

"AiP Submission" has the meaning given to it in Paragraph 5.1.1 (Approval in

Principle) of Schedule 3 (Financial Sanction and Validation);

"Allocated Target Fee" means the base amount of Phase 1 Target Fee or Phase 2

Target Fee (as applicable) payable in respect of a Target Fee Payment Milestone (as

set out in the columns headed "Allocated Target Fee" of the tables at Paragraph 2.1

(Target Fee Payment Milestones for Phase 1) and Paragraph 2.2 (Target Fee Payment

Milestones for Phase 2) of Part 4B (Calculation of Target Fee) of Schedule 6 (Finance));

"Allowable Cost(s)" has the meaning given in Paragraph 2 (Allowable Costs) Part 2A

(Allowable and Disallowable Costs) of Schedule 6 (Finance) and "Allowable" and

"Allowability" shall be construed accordingly;

"Alternative Credit Support" has the meaning given to it in the Parent Body

Agreement;

"Alternative Strategy" means a strategy developed pursuant to Strategy Development

Support and that necessitates a change to a Site Strategic Specification;

"Amendment" has the meaning given in Clause 20.1 (Amendments to Customer

Contracts and New Customer Contracts);

5

"Annual Reconciliation Report" has the meaning given to it in Paragraph 8.1 (Annual

Reconciliation of Allowable Costs) of Part 2B (Payment of Allowable Costs) of Schedule

6 (Finance);

"Annual Site Funding Limit" or "ASFL" means the overall funding limit for the Costs to

be incurred by the Contractor in performing all of its obligations under this Agreement in

each Contract Year, as specified in or determined in respect of each Contract Year in

accordance with Part 7 (Financial Limits) of Schedule 6 (Finance) as the same may be

adjusted (if at all) pursuant to the Change Control Procedure;

"Applicable Schemes" means:

(a) the UKAEA Combined Pension Scheme including the Additional Voluntary

Contribution Scheme and the Shift Pay Pension Savings Plan;

(b) the Magnox Group of the Electricity Supply Pension Scheme (ESPS);

(c) the British Energy Generation Group of the Electricity Supply Pension Scheme

(ESPS);

(c) the CNPP;

(d) any other pension scheme set up, maintained and/or nominated by the

Authority whether pursuant to Section 8 and Schedule 8 of the Energy Act or

otherwise;

(e) any Automatic Enrolment Scheme; and

(f) any pension scheme which the Authority agrees shall be an Applicable Scheme

pursuant to Clause 32.2.3 (Participation in Other Applicable Schemes);

"Approval" means that the approval required in relation to any Proposed Change in

accordance with Paragraphs 5 (Category I, Category II and Category III Changes) and

6 (Category 0 Changes) of Schedule 2 (Change Control Procedure) has been given by

either:

(a) the appropriately authorised individual of the Contractor where the Proposed

Change in question is (pursuant to the provisions of the Change Control

Procedure) subject to the Contractor's Internal Change Control Procedure; or

(b) the Authority in all other instances,

and "Approve", "Approved" and "Approving" shall be construed accordingly;

"Approved Working Capital Allowance" means the budget for the Contract Year for

the net Costs which the Parties anticipate are likely to arise (after allowing for Authority

6

Entitled Interest) under an Approved Working Capital Facility as such budget is agreed

in accordance with Paragraph 2 (Invoicing and Payment Process) Part 2B (Payment of

Allowable Costs) of Schedule 6 (Finance);

"Approved Working Capital Facilities" means all loan facilities entered into by the

Contractor which:

(a) 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;

(b) have been provided by the Parent Body Organisation or an Affiliate and are on

terms that represent the best value for money and which have been approved

by the Authority;

(c) have been negotiated with lenders with whom the Parent Body Organisation

had arrangements with prior to its entering into the Parent Body Agreement, and

in relation to which the Authority has given its prior written consent; or

(d) are on terms not materially worse than the latest Benchmark established in

accordance with Clause 16.4 (Benchmarking – Working Capital Facilities),

and with each being an "Approved Working Capital Facility";

"Asset Purchase" means the purchase of supplies, goods, materials, equipment and/or

utilities (including gas, electricity, water, sewerage, heat, cable and

telecommunications) and excluding the creation, design, development or building by

any Subcontractor of any supplies, goods, materials, equipment and/or utilities, and

"Asset Purchases" shall be construed accordingly;

"Asset Register" means the asset register to be maintained by the Contractor in

accordance with Clause 6.5 (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)

associated with Tasks, such Costs to be allocated to activities on a cause and effect or

resource consumption basis depending on which is most appropriate and reasonable

for the relevant Cost concerned;

"Assured Retention" has the meaning given to it in Paragraph 4 (Release of retention

for incomplete Sites) of Part 4D (Arrangements on Termination for Convenience) of

Schedule 6 (Finance);

7

"Audit" means an audit carried out by the Authority or Authority Agents pursuant to

Clause 15 (Inspection and Audit);

"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" has the meaning given in Clause 15 (Inspection and Audit);

"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 under the

Property Leases or otherwise) and any New Assets acquired by the Contractor on

behalf of the Authority in complying with the Client Specification, but excluding any

Subcontracts and Customer Contracts;

"Authority Assumption" means an assumption set out at Appendix J (Authority

Assumptions) to Schedule 6 (Finance);

"Authority Customer Contracts" means the contracts between the Authority and Third

Parties relating to the provision at the Sites of Commercial Operations Tasks to Third

Parties;

"Authority Default" means non-payment by the Authority of any sums exceeding one

million pounds sterling (£1,000,000) in aggregate for a period of sixty (60) Calendar

Days beyond the due date for payment of such sums where payment of such sums is

not the subject of a bona fide dispute;

"Authority Deliverables" has the meaning given to it in paragraph 1.1 (Authority

Deliverables) of Schedule 11 (Authority Deliverables);

"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 Entitled Interest" any credit interest which may accrue on credit balances in

the Contractor's Payments Account and/or any foreign exchange or other accounts of

the Contractor which are used for similar purposes to the Contractor's Payments

Account;

"Authority Facing Work" means employment for Authority purposes as defined in the

Energy Act 2004;

"Authority Field of Use" means use in carrying out the Authority's functions, duties and

powers as prescribed in the Energy Act from time to time;

8

"Authority Insurances" means the insurance policies and the specified terms thereof

set out in the Magnox Register of Insurances and the RSRL Register of Insurances in

Schedule 10 (Insurance), and any further insurances that the Contractor is required by

Legislation to maintain;

"Authority IP" means IP owned by or licensed to (in which case, to the extent licensed

to) the Authority which relates to the activities to be undertaken by the Contractor or the

Authority under the terms of this Agreement and includes:

(a) Developed IP ownership of which vests in, or is licensed to, the Authority by

virtue of Clause 29.4 (Authority's Rights to IP developed by or on behalf of the

Contractor and/or Subcontractors);

(b) Parent IP licensed to the Authority under the provisions of Clause 29.3 (IP

contributed by Parent Body Organisation); and

(c) Third Party IP licensed to the Authority under the provisions of Clause 29.6

(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 Milestones" means the Target Fee Payment Milestones identified as

"Authority Milestones" in Paragraph 2 (Target Fee Payment Milestones) of Part 4B

(Calculation of Target Fee) and Appendix K (Target Fee Payment Milestones) to

Schedule 6 (Finance);

"Authority Owned IP" has the meaning given in Clause 29.5.1.1 (Infringement of IP

owned by the Authority);

"Authority Policies and Procedures" means the policies and procedures identified as

such in Schedule 19 (Authority Policies and Procedures);

"Authority Records" has the meaning given in Clause 14.2.3 (Ownership of Records);

"Authority's IP Register" has the meaning given to it in Paragraph 4.1 (Exploitation of

Innovations) of Schedule 8 (Intellectual Property);

"Authority's Representative" means the person identified as the Authority's

Representative in Clause 37.7.3 (Notices) or any successor appointed to that role in

accordance with Clause 37.2.4 (Change in Representative);

"Automatic Enrolment Scheme” means the pension scheme or schemes nominated

by the Authority pursuant to Clause 32.7 (Automatic Enrolment Scheme);

9

"Background IP" means any IP which a Subcontractor owns immediately prior to the

commencement of the relevant Subcontract, which relates to the deliverables under that

Subcontract, is to be used in the performance of the Subcontract and which could be

reasonably judged necessary for the Authority, the Contractor or any licensee of the

Authority or the Contractor to use, exploit or license any Output or Developed IP;

"Benchmark" has the meaning given in Clause 16.4 (Benchmarking – Working Capital

Facilities);

"Benchmark Assessment" has the meaning given in Clause 16.4 (Benchmarking –

Working Capital Facilities);

"Berkeley Site" means the site at Berkeley demised by a Magnox Property Lease as

the same may be varied pursuant to the terms of such Magnox Property Lease from

time to time;

"Bradwell Site" means the site at Bradwell demised by a Magnox Property Lease as

the same may be varied pursuant to the terms of such Magnox Property Lease from

time to time;

"Budgeted Cost of Work Scheduled" or "BCWS" means the estimated aggregate of

all Allowable Costs (and Associated Allocable Costs) which are provided for in the LTP

Performance Plan in respect of activities to be undertaken;

"Business Case" means a business case prepared by the Contractor in accordance

with public sector good practice and guidance issued by the Authority from time to time;

"Calendar Day" means a period of twenty-four (24) hours ending at twelve (12)

midnight;

"Call-off Support" means the provision of support by the Contractor in accordance with

Schedule 20 (Call-off Support);

"Capital Budget" means, in relation to each Annual Site Funding Limit, that proportion

of the Annual Site Funding Limit which the Contractor is permitted to spend on Capital

Costs;

"Capital Costs" means expenditure in accordance with the application of the Authority's

requirements under FNP-02 for SLC reporting in respect of Owner Books, as amended

from time to time and as notified by the Authority to the Contractor;

"Category" means the relevant Category 0 Change, Category I Change, Category II

Change or Category III Change;

10

"Category 0 Change" means any Proposed Change which, if implemented, would be

reasonably likely to:

(a) require any amendment to this Agreement (including any of its schedules,

appendices or annexes); and/or

(b) have a material and adverse effect on the Contractor's ability to perform its

obligations under this Agreement or increase the likelihood of the Contractor

failing to meet the Client Specification; and/or

(c) constitute a Change which the Contractor knows (or ought reasonably to know)

is Novel, Contentious or Repercussive,

and in any event shall include Proposed Changes which, if implemented, are

reasonably likely to require or entail:

(i) a Change to the Contract Baseline, Client Specification, or a Milestone

Delivery Date for an Authority Milestone;

(ii) any Change to the Annual Site Funding Limit;

(iii) any transfer of amounts between the Capital Budget and the Current

Budget;

(iv) any Change to the Phase 1 Target Cost or the Phase 2 Target Cost;

(v) any Change to the circumstances in which PBI Fee is payable, except

to the extent to which such change falls within Paragraph 2

(Establishing PBI Levels) of Part 4A (Calculation of PBI Fee) of

Schedule 6 (Finance);

(vi) any Changes that equate to an amount above the thresholds set out in

the Schedule of Delegated Authority;

(vii) the addition of a Work Activity to or removal of a Work Activity from the

LTP Performance Plan which will have a material impact on the

calculation of the Phase 1 Shareline or the Phase 2 Shareline;

(viii) the addition of a Work Activity to the LTP Performance Plan which is

not reasonably necessary to meet the Client Specification;

(ix) a Cost being treated as an Allowable Cost where that Cost would be

treated as a Disallowable Cost if the Change were not implemented;

11

(x) a reallocation of a Work Activity or a cost of a Work Activity, which is

allocated in the LTP Performance Plan to Phase 1, from Phase 1 to

Phase 2 (or vice versa);

(xi) a deferral of a Work Activity scheduled in the LTP Performance Plan to

be carried out or completed during the Term to beyond the Term;

(xii) an increase or decrease to the Estimate at Phase 2 Completion of more

than fifteen million pounds sterling (£15,000,000) prior to the date on

which the final adjustment to the Phase 2 Target Cost has been made

pursuant to Appendix G (Special adjustment to the Phase 2 Target

Cost); or

(xiii) any increase in Cost (including, for the purposes of this sub-Clause (xiii)

only, any rents and other charges payable under any leases including

the Property Leases) arising out of any Change as described in sub-

Clause (g) of the definition of "Change";

"Category 0 Change Control Form" means the form completed in respect of Category

0 Changes and in accordance with the provisions of the Change Control Procedure

which shall be substantially in the form of or contain the requirements set out in the

"Change Control Form" attached at Appendix A of Schedule 2 (Change Control

Procedure);

"Category I Change" means any Proposed Change which:

(a) is not a Category 0 Change; and

(b) is reasonably likely to result in a variation to the Budgeted Cost of Work

Scheduled of an amount that is above five million pounds sterling (£5,000,000)

but below the thresholds for changes set out in limb (vi) of the definition of

Category 0 Change;

"Category II Change" means any Proposed Change which:

(a) is not a Category 0 Change; and

(b) is reasonably likely to result in a variation to the Budgeted Cost of Work

Scheduled of an amount that is above two million pounds sterling (£2,000,000)

up to and including five million pounds sterling (£5,000,000);

"Category II Revenue" means:

(a) all monies received and receivable by the Contractor from another SLC within

the NDA estate, namely Dounreay Site Restoration Limited, LLW Repository

12

Limited, Sellafield Limited or any other entity as may be notified from time to

time in writing by the Authority whose accounts are consolidated as part of the

Authority’s group accounts, including Direct Rail Services Limited, International

Nuclear Services Limited, NDA Properties Limited and Rutherford Indemnity

Limited; and

(b) any other income received and receivable by the Contractor other than in

respect of the Contract Price, excluding that received under (a) above;

"Category III Change" means any Proposed Change which:

(a) is not a Category 0 Change; and

(b) is reasonably likely to result in no variation to the Budgeted Cost of Work

Scheduled or a variation to the Budgeted Cost of Work Scheduled of an amount

that is up to and including two million pounds sterling (£2,000,000);

"CDM Regulations" means the Construction (Design and Management) Regulations

2007 (SI 2007/320) as amended or revised from time to time;

"Change" means any change to:

(a) this Agreement (including the Phase 1 Target Cost, the Phase 2 Target Cost,

the Contract Baseline and any other schedules, appendices or annexes);

(b) the LTP Performance Plan;

(c) a Performance Agreement Form which has been agreed in accordance with

Part 5 (Performance Agreement Form) of Schedule 6 (Finance);

(d) the Nominated Staff Plan;

(e) the Supply Chain Strategic Plan; or

(f) [Not used]

(g) any Property Lease, including any variation to and/or partial or full termination

and/or replacement of any of the Property Leases (excluding the RSRL Property

Deeds of Variation but including, for the avoidance of doubt, any letting of any

land and/or premises to the Contractor for the purposes of this Agreement as a

direct result of any whole or partial termination of any Property Lease) and any

change to (including any variation to and/or partial or whole termination and/or

replacement of) any replacement leases;

which is Approved (or deemed to be Approved) in accordance with the provisions of the

Change Control Procedure;

13

"Change Control Log" means the log to record Changes maintained by the Contractor

under the Change Control Procedure and in accordance with PCP-05 (Change Control);

"Change Control Procedure" means the procedure outlined in Schedule 2 (Change

Control Procedure) and PCP-05 (Change Control);

"Change Control Programme” means a programme specifying the nature, Category

and schedule of Proposed Changes to be made to the Magnox LTP and the RSRL LTP

to achieve the objective specified in Paragraph 1 (Consolidation Objective) of Appendix

B (Development of the LTP Performance Plan) of Schedule 2 (Change Control

Procedure);

"Change in Control" means, in respect of a company, the obtaining of Control by any

person or group of persons acting in concert who did not previously exercise Control, of:

(a) such company; or

(b) any person who (whether directly or by means of holding Control over one or

more other persons) has Control of such company;

"Change in Law" means:

(a) the adoption, promulgation, modification or revocation of Legislation, other than

any Legislation which on the date two months prior to 1 November 2013 (being

the date on which the Final Tender was submitted to the Authority) has been

published:

(i) in a draft Bill as part of a Government departmental consultation paper;

(ii) in a Bill;

(iii) in a draft statutory instrument; or

(iv) as a proposal in the Official Journal of the European Union,

but including any Legislation which implements or intends to implement in the

United Kingdom the Protocols of 12 February 2004 to amend the Paris

Convention on Third Party Liability in the Field of Nuclear Energy of 29 July

1960 as amended and as supplemented by the Brussels Convention of 31

January 1963 Supplementary to the Paris Convention of 29 July 1960 as

amended, whether or not such Legislation was published in any draft form or as

a Bill on or before the date of this Agreement; or

(b) any applicable judgement of a relevant court of law which changes a binding

precedent;

14

"Chapelcross Site" means the site at Chapelcross demised by a Magnox Property

Lease as the same may be varied pursuant to the terms of such Magnox Property

Lease from time to time;

"CIL Change" means any change to this Agreement as a result of a Change in Law

pursuant to Clause 37.1 (Change in Law);

"Client Specification" means the document specifying the Authority's requirements in

respect of the Sites set out at Schedule 1 (Client Specification);

"Client Specification Completion State" means Phase 1 Completion and Phase 2

Completion;

"CNPP" means the Combined Nuclear Pension Plan set up by the Authority pursuant to

Section 8 and Schedule 8 of the Energy Act;

"Collaborative Procurement" means the procurement of goods and services for

benefit across the Authority's estate, whether by:

(a) one SLC on behalf of more than one SLC, and/or including a member of the

Authority's estate, and/or an agreed external member forming part of a

Collaborative Procurement initiative; or

(b) a centralised function within the Authority's estate; or

(c) a Third Party,

and including the Shared Service Alliance;

"Commencement Accounts" has the meaning given to it in Clause 16.11.10.6

(Payments to Parent);

"Commencement Date" means 1 September 2014;

"Commercial Guidance 02" means processes set out in Annex 2 to Schedule 8

(Intellectual Property) that may be proposed by the Authority and agreed by the

Contractor from time to time, which following such agreement are to be followed by the

Parties in implementing the provisions of Clause 29 (Intellectual Property);

"Commercial Operations Tasks" means those Tasks in the LTP Performance Plan

which generate Category II Revenue (or revenue received directly by the Authority from

a Third Party);

"Comptroller and Auditor General" means the Comptroller and Auditor General of the

UK National Audit Office;

15

"Consolidation Phase" means the period from the Commencement Date up to the date

upon which the Contractor has completed the execution of the Consolidation Plan and

the Authority has accepted the LTP Performance Plan and Contract Baseline under

Paragraph 7.5 (Approval of the LTP Performance Plan and Contract Baseline) of

Appendix B (Development of the LTP Performance Plan) to Schedule 2 (Change

Control Procedure) which shall be no more than twelve (12) Months from the

Commencement Date;

"Consolidation Plan" means the plan that the Parent Body Organisation submitted as

part of its Final Tender which describes the consolidation activities that the Contractor

plans to undertake during the Consolidation Phase, including development of the LTP

Performance Plan;

"Consolidation Report" has the meaning given to it in Paragraph 7.2 (Consolidation

Report) of Appendix B (Development of the LTP Performance Plan) of Schedule 2

(Change Control Procedure);

"Construction Industry Scheme Regulations" or "CISR" means the Income Tax

(Construction Industry Scheme) Regulations 2005 (as amended);

"Contamination" means the presence of substances in areas other than originally

intended or the presence of residue resulting from the historic presence of materials

which have subsequently been removed and "Uncontaminated" shall be construed

accordingly;

"Continuing Nominated Staff" has the meaning given to it in Clause 7.13.1

(Continuing Nominated Staff) of the Parent Body Agreement;

"Contract Baseline" means the document bearing that name and set out in Appendix H

(Contract Baseline) of Schedule 6 (Finance) (as may be changed from time to time in

accordance with the Change Control Procedure);

"Contract Baseline BCWS” means the estimated aggregate of all Allowable Costs

(including Associated Allocable Costs) which were provided for in the Final Tender (as

amended by any Category 0 Changes from time to time) in respect of activities to be

undertaken pursuant to this Agreement;

"Contract Documents" means this Agreement, the Parent Body Agreement, the

Nuclear Indemnity, the Parent Company Guarantees, the Transition Agreement, the

Property Leases and the documents referred to in them or required to give effect to

them;

"Contract Management Plan” means the document(s) providing guidance on the

approach to management of this Agreement and the Parent Body Agreement as agreed

16

by the Authority, the Parent Body Organisation and the Contractor (and as may be

amended by agreement of those parties from time to time), which:

(a) contain an overview of material information about how this Agreement and the

Parent Body Agreement will be managed; and

(b) outline certain systems and processes to aid the Authority, the Parent Body

Organisation and the Contractor in delivering the desired performance and

outcomes of this Agreement and the Parent Body Agreement during the Term;

"Contract Price" has the meaning given in Paragraph 1 (Total Remuneration) of Part 1

(General) of Schedule 6 (Finance);

"Contract Quarter" means each successive period of three Months throughout the

Term, provided that:

(a) the first Contract Quarter shall be the period of four Months starting on the

Commencement Date; and

(b) on termination or expiry of this Agreement in accordance with its terms, the final

Contract Quarter shall be the period between the end of the previous Contract

Quarter and the date of termination or expiry;

"Contract Year" means a period of twelve (12) Months starting on 1 April and ending on

31 March first occurring thereafter, except for:

(a) the first Contract Year of this Agreement, which shall commence on the

Commencement Date and end on 31 March first occurring thereafter; and

(b) the final Contract Year of this Agreement, which shall commence on 1 April and

end at the expiry of this Agreement (or the Parent Body Agreement (as

applicable));

"Contractor" has the meaning given to it in Clause 1.2.21 (Interpretation);

"Contractor Customer Contract" means any agreement between the Contractor and a

Third Party relating to the provision of Commercial Operations Tasks by the Contractor

to a Third Party;

"Contractor Default" means any of:

(a) the events described at Clauses 11.13.2, 11.14 and 11.18.5 (Defective

Performance and Remediation);

17

(b) the Authority being entitled to terminate the Parent Body Agreement for

Contractor Default and/or PBO Default (as defined in the Parent Body

Agreement);

(c) a material breach by the Contractor of its obligations under this Agreement,

applicable Legislation or Regulatory Requirements;

(d) a material breach by the Contractor of Security Requirements;

(e) a material breach by the Contractor of its supply obligations under the Customer

Contracts; or

(f) any other events or situations expressly described in this Agreement as a

Contractor Default;

(g) [Not used]

"Contractor Historical Costs" means Costs incurred:

(a) during the period prior to (and excluding) the Commencement Date; or

(b) on or after the Commencement Date as a result of events occurring during the

period prior to (and excluding) the Commencement Date,

which are properly attributable to the Contractor, and any Cost which has been or is

transferred to the Contractor by a Transfer Scheme;

"Contractor Information Asset Register" has the meaning given in Clause 14.4

(Information Asset Register);

"Contractor Records" has the meaning given in Clause 14.2.4 (Ownership of

Records);

"Contractor Related Party" means the Contractor, the Parent Body Organisation, each

Affiliate, their Subcontractors, their Sub-Subcontractors, and the employees and agents

of each of these;

"Contractor Required IP" has the meaning given to it in Paragraph 2.2 (Authority

Ownership of Subcontractor Created Developed IP) of Part B (Guidance on the choice

of IP Ts&Cs in Subcontracts) of Schedule 8 (Intellectual Property);

"Contractor's Commercial Department" means the department responsible for

managing the Contractor's Commercial activities;

"Contractor's Internal Change Control Procedure" means the internal procedure

established by the Contractor for the Approval of a Proposed Change not requiring

Authority Approval in accordance with the Change Control Procedure, provided that

18

such internal procedure shall be compliant with the provisions of Paragraph 1.6

(Contractor Conduct and Contractor Change Control Procedure) of Schedule 2 (Change

Control Procedure);

"Contractor's IP Database" has the meaning given to it in Paragraph 5.1 (Register of

Contractual IP Rights) of Schedule 8 (Intellectual Property);

"Contractor's Payments Account" means the Magnox Contractor's Payments

Account; or the RSRL Contractor's Payments Account, as appropriate;

"Contractors' Receipts Accounts" means the Magnox Contractor's Receipt Account

and the RSRL Contractor's Receipt Account;

"Control" means:

(a) the power (whether directly or indirectly and whether by the ownership of share

capital, the possession of voting power, agreement 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 1159 of the

Companies Act 2006 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 thirty per cent

(30%) or more of the total voting rights exercisable at general meetings of that

person on all, or substantially all, matters provided that any acquisition of any

shares of the ultimate holding company of any party which is listed on a

recognised stock exchange which exercises Control shall not constitute a

Change in Control;

"COP 10" means the Code of Practice 10 Submission comprising the letter of 1 March

2005 sent to HMRC by Herbert Smith on behalf of the Authority and subsequent

correspondence;

"Corrective Action" means action which the Contractor needs to take in response to

the Authority's audit findings where such audit identifies failure by the Contractor to

comply with its obligations under this Agreement;

19

"Correspondence Process" means the electronic communications and

correspondence process agreed by the Parties and the Parent Body Organisation as

the means of delivering, recording and referencing all formal correspondence between

the Parties in connection with this Agreement and the Parent Body Agreement;

"Cost" means any sum of money that the Contractor is legally obliged to pay and that

(with the exception of the Licence Fee and any rents and other sums payable under the

Property Leases) is payable to a person other than the Authority;

“CRC Allowances” means tradable allowances under the CRC Scheme which are

issued pursuant to the CRC Order;

"CRC Group" shall have the same meaning as "group" as defined in the CRC Order;

"CRC Order" means the CRC Energy Efficiency Scheme Order 2013 (SI 2013/1119);

"CRC Scheme" means the trading scheme established by the CRC Order;

"Critical Site IT Systems" means those IT Systems that are required for the safe

operation of any Site and effective delivery of the Client Specification and which

comprise the Magnox Critical Site IT Systems and the RSRL Critical Site IT Systems;

"Cross Estate Initiatives" means the strategies, policies, procedures, and

Collaborative Procurements developed in respect of activities performed by or in

relation to, or relevant to, more than one SLC (or one or more SLCs and subsidiaries of

the Authority) by the governance boards (comprising the SLCs and subsidiaries of the

Authority) established by the Authority;

"Currency Hedging Agreement" means an agreement to hedge foreign currency risk;

"Currency Hedging Strategy" means the strategy for hedging currency which on the

Commencement Date is in use by the Contractor as the same may be amended with

the agreement of the Authority from time to time;

"Current Budget" means, in respect of each Annual Site Funding Limit, that proportion

of the Annual Site Funding Limit which is allocated to Costs which are not Capital

Costs;

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

"Customer" means any party or former or prospective party to a Customer Contract;

"Customer Contract" means the Contractor Customer Contracts and/or the Authority

Customer Contracts;

20

"Customer Group" means any group or trade organisation of parties or former or

prospective parties to Customer Contracts;

"Data" means facilities, information, books of account, Authority Records, Contractor

Records or other documentation (including any stored in electronic form);

"Decommission" means the final phase in the life cycle of a nuclear installation

covering all activities from shutdown and removal of fissile material to environmental

restoration of a Site through to its agreed Interim State or Interim End State, as

applicable, and Decommissioning shall be construed accordingly;

"Deed of Participation" means the Deed of Participation for the Combined Nuclear

Pension Plan entered into between the Authority and the Magnox Contractor dated 28

March 2012 or the Deed of Participation for the Combined Nuclear Pension Plan

entered into between the Authority and the RSRL Contractor dated 23 October 2009 (as

applicable), or such subsequent deed or deeds of participation which the Authority

requires the Contractor to enter into from time to time;

"Defective Performance" has the meaning given to it in Clause 11 (Defective

Performance and Remediation);

"Defective Performance Notice" has the meaning given to it in Clause 11.2 (Defective

Performance and Remediation);

"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 37.2 (Representatives and Delegation of Authority to Act);

"Delivered Parent IP" has the meaning given in Clause 29.3.1.1 (IP Contributed by

Parent Body Organisation – Licence to Authority and Contractor);

"Dependency Event" means:

(a) where the Authority does not respond within a relevant period for the purposes

of Clause 5.3.1 (Authority Responses), and there is an impact on the cost or

Schedule of the Tasks as a result of such Authority delay;

(b) a failure by the Authority to provide the Authority Deliverables or any of them;

(c) where, as a result of any Authority or National Audit Office inspection or audit,

the Contractor is prevented from performing its obligations under this

Agreement, despite having used reasonable endeavours to so perform; and

21

(d) any other event expressly referred to in this Agreement as a Dependency

Event;

"Designated Sites" means sites designated under Section 3 of the Energy Act;

"Detailed Project Plans" means all the documentation produced by the Contractor

underlying the LTP Performance Plan and setting out how Tasks will be undertaken and

to what standard;

"Determination Date" has the meaning given to it in Paragraph 1.13 (Phase 1 True

Cost Variance and Projected Cost Variance adjustments) or Paragraph 1.28 (Phase 2

True Cost Variance and Projected Cost Variance adjustments) of Part 4B (Calculation

of Target Fee) of Schedule 6 (Finance) (as applicable);

"Developed IP" means IP created or developed by or on behalf of the Contractor and/or

by Subcontractors during the performance of this Agreement;

"Disaggregated CRC Costs" means those costs, liabilities, losses and expenses that

arise directly or indirectly in connection with the CRC Scheme that would be properly

attributable and/or allocable to the Contractor as if the Contractor had been

disaggregated from its CRC Group for the purposes of the CRC Scheme and treated as

a separate CRC participant;

"Disallowable Cost" has the meaning given in Paragraph 4 (Disallowable Costs) Part

2A (Allowable and Disallowable Costs) of Schedule 6 (Finance) and "Disallowable"

shall be construed accordingly;

"Disposal" means the process by which Waste, particularly controlled, Contaminated or

radioactive Waste is placed in a safe condition, with no intent to retrieve and Dispose

shall be construed accordingly;

"Disposal Authority" means the Radioactive Waste Management Directorate (RWMD)

responsible for authorising the Disposal of waste forms or any successor body whose

role is to carry out the same or materially similar services to that of the RWMD;

"Dispute" has the meaning given to it in the Dispute Resolution Procedure;

"Dispute or Claim Negotiation" means any Third Party claim brought against the

Contractor where there is reasonable expectation that the financial value of any

settlement may exceed the sum of five hundred thousand pounds sterling (£500,000);

"Disputed Amount" has the meaning given to it in Paragraph 3.6 (Disputed Amounts)

of Part 2B (Payment of Allowable Costs) of Schedule 6 (Finance);

22

"Dispute Resolution Procedure" means the dispute resolution procedure set out in

Schedule 12 (Dispute Resolution Procedure);

"Dividend Payment Policy" has the meaning given to it in Clause 16.11.10.5

(Payments to Parent);

"Dounreay Site Resoration Limited" or "DSRL" means the contractor to whom the

ONR has granted a Nuclear Site Licence in respect of the Authority owned site located

at Dounreay in Caithness, Scotland;

"DPA" means the Data Protection Act 1998;

"Dungeness A Site" means the site at Dungeness demised by a Magnox Property

Lease as the same may be varied pursuant to the terms of such Magnox Property

Lease from time to time;

"EA" means the Environment Agency or its successor body from time to time;

"EDF Energy" means EDF Energy plc whose registered office is at 40 Grosvenor

Place, Victoria, London, SW1X 7EN a company incorporated under the laws of England

and Wales with registered number 02366852;

"EGG 02" means the Guidance Note for Assessment of Asset Care Requirements for

Inclusion in Life Time Plans Rev 1 as may be amended or updated by the Authority

from time to time;

"e-Government Metadata Standard (e-GMS)" means the e-GMS Standard Version

3.1: 29th August 2006 as updated from time to time;

"EIR" means the Environmental Information Regulations 2004 (as amended);

"Emergency Action" means an action taken by the Contractor pursuant to the

Contractor's genuine belief that risk to life, limb or the Environment requires immediate

action. It 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. 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 Change" means any Change directly resulting from an Emergency Action;

"Employees" means the Magnox Employees and the RSRL Employees;

"EMU" means European Economic and Monetary Union;

"End State" means the Interim State or Interim End State, as applicable, for each Site;

23

"Energy Act" means the Energy Act 2004;

"Environment" means any and all living organisms, ecosystems, air, water, land and

property, whether natural or man-made and wherever occurring or situated, and

"Environmental" shall be construed accordingly;

"Escrow Agent" means NCC Escrow International Limited, a company incorporated in

England and Wales with registered number 3081952, whose registered office is at

Manchester Technology Centre, Oxford Road, Manchester M1 7EF, or such 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;

"Estimate at Completion" means the Estimate at Phase 1 Completion or the Estimate

at Phase 2 Completion, as applicable;

"Estimate at Phase 1 Completion" means:

(a) as at the Commencement Date, an amount equalling the Phase 1 Target Cost;

or

(b) following the end of each Contract Quarter throughout Phase 1, the most recent

estimate of the Allowable Costs to be incurred by the Contractor in Achieving

Phase 1 Completion calculated in accordance with Paragraphs 1.14 and 1.15

(Calculation of Estimate at Phase 1 Completion) of Part 4B (Calculation of

Target Fee) of Schedule 6 (Finance),

provided that the Estimate at Phase 1 Completion shall not include any estimated

Allowable Costs included within the Estimate at Phase 2 Completion;

"Estimate at Phase 2 Completion" means:

(a) as at the Commencement Date, an amount equalling the Phase 2 Target Cost;

or

(b) following the end of each Contract Quarter throughout the Term, the most

recent estimate of the Allowable Costs to be incurred by the Contractor in

Achieving Phase 2 Completion calculated in accordance with Paragraphs 1.29

and 1.30 (Calculation of Estimate at Phase 2 Completion) of Part 4B

(Calculation of Target Fee) of Schedule 6 (Finance),

provided that the Estimate at Phase 2 Completion shall not include any estimated

Allowable Costs included within the Estimate at Phase 1 Completion;

24

"Estimated Phase 1 Inflation" has the meaning given to it in Paragraph 3.3

(Adjustment of the Phase 2 Target Fee) of Part 8 (Indexation) of Schedule 6 (Finance);

"Estimated Phase 2 Inflation" has the meaning given to it in Paragraph 3.3

(Adjustment of the Phase 2 Target Fee) of Part 8 (Indexation) of Schedule 6 (Finance);

“EU Procurement Rules” means Directives 2004/18/EC, 2004/17/EC and 2007/66/EC

of the European Parliament and Council and all applicable Treaty principles and other

EU measures adopted from time to time in relation to public procurement, together with

the Public Contracts Regulations 2006, the Utilities Contracts Regulations 2006 and any

other UK implementing measures;

"EURATOM Treaty" means the treaty establishing the European Atomic Energy

Community;

"Exceptional Item" has the meaning given to it in Paragraph 4.2 (Exceptional Items) of

Part 2B (Payment of Allowable Costs) of Schedule 6 (Finance);

"Exceptional Item Information" has the meaning given to it in Paragraph 4.3

(Exceptional Items) of Part 2B (Payment of Allowable Costs) of Schedule 6 (Finance);

"Exceptional Item Threshold" has the meaning given to it in Paragraph 4.1

(Exceptional Items) of Part 2B (Payment of Allowable Costs) of Schedule 6 (Finance);

"Existing Agreements" means all the agreements that are legally binding on the

Contractor and were entered into prior to the Commencement Date, including those

listed in Schedule 5 to the Magnox Property Leases, but excluding any Secondment

Agreements entered into in relation to the Former Secondees;

"Expiry Date" means, subject to any variation of such date in accordance with the

terms of this Agreement and, without prejudice to the validity of any earlier termination

of this Agreement in accordance with its terms, the date on which the Client

Specification Completion State is achieved in accordance with the provisions of this

Agreement;

"Extravagant Outlays" means, in relation to any Cost (which would otherwise be an

Allowable Cost) which, in the Authority's reasonable opinion, is materially in excess of

any value obtained in relation to the LTP Performance Plan, that part of the Cost which

is in excess of the value that the Contractor ought reasonably to have expected to have

obtained;

"Fall Due" means become payable in accordance with the legal terms governing the

relevant obligation to make payment;

"FCA" means the Financial Conduct Authority;

25

"Fee" means the aggregate of the PBI Fee, the Target Fee (as adjusted by the

Shareline) and any further category of fee that may be agreed between the Parties in

accordance with this Agreement;

"Fee Reconciliation Report" has the meaning given to it in Paragraph 2.1 (Fee

Reconciliation) of Part 4C (Payment of PBI Fee and Target Fee) of Schedule 6

(Finance);

"Final Reconciliation of Allowable Costs" has the meaning given to it in Paragraph

10.1 (Final Reconciliation of Allowable Costs) of Part 2B (Payment of Allowable Costs)

Schedule 6 (Finance);

"Final Tender" means the PBO's response to the Invitation to Submit Final Tender;

"FOIA" means the Freedom of Information Act 2000 as amended;

"FNP-01" means the document highlighting the accounting policies and procedures

adopted by the Authority for Owner Books as amended from time to time;

"FNP-02" means the document setting out the standards that the Contractor is required

to maintain over the Authority's books of accounts and the reports required;

"Force Majeure Event" means any act, event or occurrence affecting any Party's

performance of its obligations under this Agreement, the cause of which is not of such

Party's making nor within that Party's reasonable control (provided that, in the case of

the Contractor, for this purpose the Contractor shall not be deemed to have caused or

had control of matters occurring prior to the Commencement Date), and which is not

attributable to any act not in accordance with Good Industry Practice after the

Commencement Date nor any failure to take preventative action in accordance with

Good Industry Practice after the Commencement Date including (to the extent not of

that Party's making nor within that Party's reasonable control) but not limited to:

(a) war, hostilities (whether or not war has been declared), terrorist acts, or acts of

any civil or military authority;

(b) riot, insurrection, civil commotion, public demonstration, sabotage, or acts of

vandalism;

(c) fire, flood, earthquake, extreme weather conditions (when compared with

meteorological conditions that characteristically prevail in the relevant locale)

epidemic, or explosion;

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

26

(e) any strike, lock-out or trade dispute not involving solely the employees or

Subcontractors of that Party and not originating with that Party's employees or

Subcontractors or (in the case of the Contractor) the employees or

Subcontractors of the Parent Body Organisation or an Affiliate;

(f) acts of God;

(g) delay in transport or communications;

(h) structural shift or subsidence;

but expressly excluding:

(A) any unlawful act of a Third Party who has gained entry to any Site due

to a failure of the Contractor to comply with the Security Plan or other

failure to comply with its obligations under Clause 4 (Contractor's

Obligations) of this Agreement;

(B) any unauthorised release of ionising radiation from, or Contamination by

radioactivity from an occurrence involving nuclear matter on any 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 (a) to (d) or (f) of this definition; and

(C) any radioactive, chemical or biological Contamination on any Site or

emanating from any Site or matter in the course of transportation to or

from any Site save to the extent that such Contamination is caused by

any of the events listed in (a) to (d) or (f) of this definition;

"Foreign Exchange Accounts" means any bank accounts held in currencies other

than sterling used for the purposes of the Currency Hedging Agreements or otherwise;

"Former Secondee" has the meaning given to it in Clause 17.4.1 (TUPE) of the Parent

Body Agreement;

"Funding Limit" means each Annual Site Funding Limit, each Current Budget and each

Capital Budget;

"Future Transfer Scheme" means a nuclear transfer scheme made after the

Commencement Date under section 40(2) of the Energy Act;

"GAAP" means Generally Accepted Accounting Practice;

"GAD Certified Pension Scheme" has the meaning given to it in Paragraph 11.1.1

(Transfer of Employees) of Schedule 5 (Subcontracting and Procurement);

27

"Gated Process" has the meaning given to it in Paragraph 2.1 (Contractor's Gated

Process) of Schedule 3 (Financial Sanction and Validation);

"General Change in Law" means a Change in Law which is not a Specific Change in

Law or Material General Change in Law;

"Good Industry Practice" means the exercise of the reasonable degree of skill, care,

diligence, prudence and foresight which would (taking into account all the factors

relating to the Sites) ordinarily be expected from a skilled and experienced contractor

engaged (in any jurisdiction of the European Union, United States of America or

Canada where there is experience of nuclear operations and/or decommissioning

activities which have at least equivalent standards to those of the United Kingdom and

any other standards generally adopted in the United Kingdom) in activities of a similar

scope and complexity to those that are the subject of this Agreement and under the

same or similar circumstances, where such contractor is seeking to comply with

contractual, legal and regulatory obligations which are analogous to those obligations

which are incumbent on the Contractor;

"Government" means the government of the United Kingdom;

"Government Payment Obligations" means the guidance contained in Annex 4.6 of

Managing Public Money 2007;

"Harwell Site" means the site at Harwell demised by an RSRL Property Lease as the

same may be varied pursuant to the terms of such RSRL Property Lease from time to

time;

"Hinkley Point A Site" means the site at Hinkley Point demised by a Magnox Property

Lease as the same may be varied pursuant to the terms of such Magnox Property

Lease from time to time;

"Historical Costs" means Contractor Historical Costs and Non-Contractor Historical

Costs;

"HMRC" HM Revenue & Customs and any successor to such organisation;

"HR Internal Procedures" means the Contractor's Internal Procedures referred to in

Clause 31.11 (Terms and Conditions of Employment);

"HSE" means the Health and Safety Executive;

"HSSSE Obligations" means the obligations on the Contractor to manage the Sites so

as to minimise any material risk to health, safety, security, safeguards and the

environment;

28

"HSSSE Internal Procedures" means the Contractor's Internal Procedures in relation

to health, safety, security, safeguards and the environment, including the HSSSE Trend

and Issues Log;

"HSSSE Trend and Issues Log" means a log of trend data and issues updated and

maintained by the Contractor containing details of incidents, issues and trends

(including in relation to Regulatory compliance) relating to health, safety, security,

safeguards and the environment at the Sites in accordance with the provisions of

Paragraph 2.1.4 of Schedule 15 (Minimum Performance Standards);

"Hunterston A Site" means the site at Hunterston demised by a Magnox Property

Lease as the same may be varied pursuant to the terms of such Magnox Property

Lease from time to time;

"Impartiality Undertaking" means an undertaking in the form set out in Part 5 (Pro

Forma Impartiality Undertaking) of Schedule 7 (Employment);

"Incoming Parent" means the organisation that successfully bids or is appointed to

replace the Parent Body Organisation in relation to the Sites, or any other organisation

that successfully bids in response to any other arrangement as determined by the

Authority to replace the current organisational structure on the Sites;

"Index" means the index published monthly by the Office for National Statistics in Table

CPI under the title "Consumer Prices Index (all items)", or failing such publication, or in

the event of a fundamental change to the nature of the Index, such other index or

adjustments to the Index as the Parties may, each acting reasonably, agree from time

to time (in each case with the intention of putting the Parties in no better and no worse a

position than they would have been had the Index not ceased to be published or the

relevant fundamental change not been made) or, in the event that no such agreement is

reached, as may be determined in accordance with the Dispute Resolution Procedure;

"Indexation Adjustment Date" means each anniversary of the Commencement Date;

"Indexed” means that on each Indexation Adjustment Date an amount referred to in this

Agreement shall be increased by the application of the indexation factor set out in

Clause 1.2.15 (Interpretation);

"Information" has the meaning given in Clause 25.3 (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;

29

"Information Governance" means an amalgamation of the following disciplines:

information management, information risk management, knowledge management,

information and communication technology and intellectual property put in place by the

Authority to fulfil the requirements of the Authority's Information Governance Strategy in

order to meet its statutory and regulatory obligations;

"Information Governance Compliance Programme" means the Authority's high level

programme to achieve information management compliance across the SLCs for which

it has responsibility under the Energy Act;

"Information Governance Strategy" means the Authority strategy to implement its

policy on Information Governance;

"Insolvency Event" means the occurrence of any of the following:

(a) an application is made to court, or an order is made, for the appointment of an

administrator or if a notice of intention to appoint an administrator is given or if

an administrator is appointed;

(b) commencing negotiations with all or any class of creditors with a view to

rescheduling any debts, or making a proposal for or entering into any

compromise or arrangement with creditors (other than for the purposes of a

solvent reconstruction or amalgamation);

(c) the presentation of a petition for a winding up order;

(d) the passing of a resolution for winding up (other than for the purposes of a

solvent reconstruction or amalgamation);

(e) the court making an order for winding up (other than for the purposes of a

solvent reconstruction or amalgamation);

(f) the appointment of, or a person with a right to appoint becoming entitled to

appoint, a receiver or manager or administrative receiver;

(g) being unable to pay debts as they fall due or being deemed unable to pay debts

within the meaning of section 123 of the Insolvency Act 1986; and

(h) any event occurs, or proceeding is taken, in any jurisdiction which has an effect

equivalent or similar to any of the events mentioned above unless, in the case

of the events set out in limbs (a), (c) and (f) above, the proceedings to which

they relate are frivolous or vexatious and are dismissed, stayed or discharged

within twenty one (21) Calendar Days of their commencement;"

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"Insurance Premium Contribution" means, in respect of an Authority Insurance listed

in Appendix 4 (Insurance Premium Contributions) of Schedule 10 (Insurance), the

applicable amount specified in the column headed "Insurance Premium Contribution" in

the table in that Appendix;

"Insurance Proceeds" amounts received by way of payment of benefits due under an

Authority Insurance policy and/or any insurance policy taken out by the Contractor in

accordance with Clause 18.1.3 (Authority Insurances) but excluding any amount which

is received in respect of the costs of the Authority or the Contractor (as applicable) of

pursuing such claim or in respect of any delay in the settlement of such claim;

"Integrated Assurance and Approvals Plan" means the "Integrated Assurance and

Approvals Plan" as referred to and contained in Appendix C of PCP-17 (Sanction);

"Integrated Management System" means a management system which combines all

of a business’ processes and policies (including but not limited to those processes and

policies relating to quality, health and safety, environment, personnel, finance and

security) in a single system, which enables the business to achieve its objectives;

"Inter SLC Service Contracts" means the Inter SLC services contracts entered into in

accordance with Clause 23 (Inter SLC Service Contracts);

"Interim End State" means the physical state of the Winfrith Site achieved by

completion of the Contractor's obligations set out in the Client Specification;

"Interim State" means the physical state of the Magnox Sites and the Harwell Site

achieved by completion of the Contractor's obligations set out in the Client

Specification;

"Internal Procedures" means all internal company documentation of the Contractor

(regardless of the manner in which it is held, stored or collated) which:

(a) constitutes a mandatory internal guideline, standard, procedure or policy;

(b) relates directly or indirectly to the Contractor's structure, operation and

management; and

(c) relates materially and directly to the duties imposed on the Contractor in

accordance with Clause 4.2 (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 HSSSE

Internal Procedures,

and "Internal Procedure" shall be construed accordingly;

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"Invitation to Submit Final Tender" or "ITSFT" means the Invitation to Submit Final

Tender issued by the Authority on 2 October 2013;

"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;

"IP Schedule" means the Authority's policy and strategy document setting out the

Authority's requirements in relation to the management and ownership of IP set out in

Schedule 8 (Intellectual Property) as may be supplemented by any Commercial

Guidance 02;

"IT Agreement" means any agreement 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:

(a) all hardware, including servers, desktop and laptop PCs and other terminal

equipment, printers, scanners and other peripherals;

(b) networks and network equipment;

(c) Software; and

(d) data comprised or used therein;

"IT/Telecoms Projects" means a unique set of information technology related tasks

and activities, planned and executed in a structured manner to achieve a specific

business requirement to a defined duration, or any Subcontracts;

"Joint Fee Account" means the bank account jointly held in the names of the Magnox

Contractor and the RSRL Contractor for the receipt of Fee under this Agreement;

"Joint Nominated Staff" means the individuals identified as such in the Nominated

Staff Plan and, in the case of the members of Joint Nominated Staff whose

appointments are planned as at the Commencement Date, listed in Part 2A (Joint

Nominated Staff) of Schedule 7 (Employment);

"Key Personnel" means the Magnox Key Personnel and the RSRL Key Personnel;

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"Legal Proceedings" means any litigation, arbitration, adjudication, defence, dispute,

claim, mediation, negotiation, other alternative dispute resolution procedure,

compromise, appeal or investigations before an Ombudsman or tribunal;

"Legislation" means:

(a) 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, and

any enforceable community right within the meaning of Section 2 of the

European Communities Act 1972;

(b) codes of practice, policy, guidance issued by any Regulator, the Government or

(to the extent applicable in the United Kingdom) the legislative bodies of the

European Union; and

(c) any judgment of a relevant court of law,

in each case enforceable in the United Kingdom;

"Licence Fee" has the meaning given to it in Clause 29.1.1 (Licence of Authority IP to

the Contractor);

"Licensees" has the meaning given to it in the Nuclear Installations Act;

"LLW Repository Limited" or "LLWR" means the contractor to whom the ONR has

granted a Nuclear Site Licence in respect of the UK low level waste disposal facility

located at Drigg in Cumbria;

"LTP Performance Plan" means the overarching lifetime plan or combination of plans

describing the totality of activities required to take the Sites from their current states to

their respective final end states, and which:

(a) as at the Commencement Date is constituted by the Magnox Commencement

Date LTP and the RSRL Commencement Date LTP together;

(b) during the Consolidation Phase is the most recent version of the lifetime plan

developed by the Contractor in accordance with Appendix B (Development of

the LTP Performance Plan) of Schedule 2 (Change Control Procedure); and

(c) following completion of the Consolidation Phase, is the lifetime plan approved

by the Authority pursuant to Paragraph 7.5 (Approval of the LTP Performance

Plan and Contract Baseline) of Appendix B (Development of the LTP

Performance Plan) of Schedule 2 (Change Control Procedure) as may be

subsequently changed and updated by the Contractor in accordance with

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Paragraph 1.5 (LTP Performance Plan) of Schedule 2 (Change Control

Procedure);

"Maentwrog Power Station" means the hydroelectric power station at Blaenau

Ffestiniog, Gwynedd, LL41 4HY;

"Magnox A Share" means the one (1) A ordinary share of one pound sterling (£1) in the

Magnox Contractor;

"Magnox A Shareholder" means the holder of the Magnox A Share for the time being;

"Magnox B Share" means the one (1) B share of one pound sterling (£1) in the Magnox

Contractor;

"Magnox B Share Dividend" means such dividend or dividends as are paid or payable

to the Magnox B Shareholder in relation to the Magnox B Share from time to time;

"Magnox B Shareholder" means the holder of the Magnox B Share for the time being;

"Magnox Commencement Date LTP" means the Magnox LTP as at the

Commencement Date;

"Magnox Contractor's Payments Account" means the bank account of the Magnox

Contractor which the Magnox Contractor nominates to the Authority into which drawings

made under an Approved Working Capital Facility are paid and which is separate from

the Magnox Contractor's Receipts Account;

"Magnox Contractor's Receipts Account" means the bank account of the Magnox

Contractor which the Magnox Contractor nominates as such to the Authority;

"Magnox Contractor’s Representative" means the person identified as the Magnox

Contractor's Representative in Clause 37.7.3 (Notices) or any successor appointed to

that role in accordance with Clause 37.2.4 (Change in Representative);

"Magnox Critical Site IT Systems" means the IT Systems listed in Part A (Magnox

Critical Site IT Systems) of Schedule 9 (Information Technology);

"Magnox Employees" means all persons, whether part-time or full-time, employed or

engaged by the Magnox Contractor in the performance of the Tasks and/or the

Contractor's other obligations under this Agreement from time to time (but excluding

Nominated Staff) and "Magnox Employee" shall be construed accordingly;

"Magnox Final Incentive Fee" means the "Final Incentive Fee" as defined in the

Magnox Management and Operations Contract;

“Magnox Group” means the Magnox Group of the Electricity Supply Pension Scheme

(ESPS);

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"Magnox Key Personnel" means the individuals, whether Nominated Staff or

Employees, who from time to time are appointed to roles identified by the Authority as

key personnel roles in accordance with Clause 31.3 (Magnox Key Personnel) and listed

in Part 1 (Magnox) of Schedule 7 (Employment) as amended from time to time;

"Magnox LTP" means the overarching lifetime plan describing the totality of activities

required to take the Magnox Sites from their current states to their respective final end

states that is in place (as amended from time to time) prior to the Commencement Date

and comprises the documents specified in PCP-07 (Baseline Management);

"Magnox Management and Operations Contract" means the site management and

operations contract between the Authority and Magnox Limited dated 4 October 2011;

"Magnox M&O Contractor's Fee Account" means the bank account nominated as

such by the Contractor;

"Magnox Nominated Staff" means the individuals identified as such in the Nominated

Staff Plan and, in the case of the members of Magnox Nominated Staff whose

appointments are planned as at the Commencement Date, listed in Part 1 (Magnox) of

Schedule 7 (Employment);

"Magnox OPG Receipts Account" means the account which the Authority nominates

to the Magnox Contractor as such;

"Magnox Property Leases" means the leases of part or parts of the Magnox Sites

(except in relation to the Sixth Site) subject to the terms of this Agreement entered into

on the same date as this Agreement and "Magnox Property Lease" means any of

them;

"Magnox Records Agreement" means the records agreement dated 1 April 2005

between the Nuclear Decommissioning Authority and British Nuclear Group Sellafield

Limited and the deed of adherence of the same date entered into by Magnox Limited;

"Magnox Shareholder" means the holder of shares of any class of the Magnox

Contractor from time to time;

"Magnox Sites" means the Berkeley Site, the Bradwell Site, the Chapelcross Site, the

Dungeness A Site, the Hinkley Point A Site, the Hunterston A Site, Maentwrog Power

Station, the Oldbury Site, the Sixth Site, the Sizewell A Site, the Trawsfynydd Site and

the Wylfa Site;

"Magnox Year End Sum" means the "Year End Sum" as defined in the Magnox

Management and Operations Contract;

"Mandatory Services" means:

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(a) undertaking Emergency Action in accordan