6 Supplier of Last Resort

5.13 The giving of Termination Notice and the application of paragraph 5.12 shall not affect the rights and obligations of the Operator and the Defaulting User under the Code or the Framework Agreement (including rights and obligations in respect of the User Default, and in respect of amounts including interest payable by either Party, and rights and obligations arising pursuant to any provision of the Code in respect of the User's ceasing to be a User) accrued up to the date referred to in paragraph 5.12, which shall continue to be enforceable notwithstanding that paragraph.

5.14 Upon the occurrence of a User Default or where the Operator has given Termination Notice it shall be entitled to inform such persons as it thinks fit of such User Default or Termination Notice (as applicable) including but not limited to the Authority, Distribution System Operators, the Delivery Facility Operator in relation to any System Entry Point at which the Defaulting User held System Capacity, and any person from whom the Operator believes the Defaulting User to have purchased gas for delivery to the System, or with whom the Operator believes the Defaulting User has arranged for the conveyance of gas directly or indirectly to the System.

5.15 For the purposes of paragraph 5.9(c)(i) and (d)(i) the following breaches are excluded:

(a) a breach which results from a breach by the Operator of the Code;

(b) the delivery or tendered delivery by the User of non-compliant gas (as described in Section G paragraph 6);

(c) a breach other than a wilful breach of a provision of the Code where the Code specifically provides some remedy for such breach and such other remedy may reasonably be considered to be adequate in the circumstances.

5.16 For the purposes of paragraph 5.9(d)(i) a breach is a material breach of a relevant provision where and only where:

(a) the breach is wilful or reckless; or

(b) in the case of any provision, as a result of the breach the Operator or any other User is in material breach of any material provision of the Code or any Legal Requirement or incurs any material liability or expense; or

(c) where the breach is one of a series of related or substantially similar breaches and the Operator has previously given the User seven (7) days notice that, in the event that the User continues to breach the provisions of the Code in a similar manner that it may give Termination Notice to such User.

5.17 On giving Termination Notice to any User the Operator shall be entitled to set off all monies received from the Defaulting User subsequent to the date of such Termination Notice against any payments due from such User firstly in respect of Distribution Charges and secondly against Reconciliation Energy Charges.

6 Supplier of Last Resort

6.1 For the purposes of paragraph 6:

(a) where a User has been given a Termination Notice by the Operator (under Section O

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paragraph 5), all Supply Meter Points in respect of which the Discontinuing User was the Registered User immediately prior to the User Discontinuance Date shall be "Terminated Supply Meter Points";

(b) a "Supplier of Last Resort" is a User whom by virtue of Article 24A of the Order has been directed by the Authority to supply gas in accordance with that article in respect of any or all of the Terminated Supply Meter Points;

(c) "day of notification" is the Day on which the Operator receives written notice from the Authority of the appointment and identity of the Supplier of Last Resort;

(d) a "Supplier of Last Resort Event" commences on the Day, specified in the direction of the Authority, from which the Supplier of Last Resort is directed to supply gas in respect of any Terminated Supply Meter Point and continues for such a period as may be specified in the direction (being no longer than six months); and

(e) "Distribution System Operators" means parties authorised to convey gas through distribution pipelines by virtue of holding a licence granted under Article 8(1)(a) of the Order as further set out in Section P.

6.2 Where the Authority directs a Supplier of Last Resort to supply gas in respect of a Terminated Supply Meter Point, then notwithstanding any other provision of the Code, such Supplier of Last Resort shall become the Registered User of the Terminated Supply Meter Points specified in the Authority's written notice, thereby accepting the benefit of the rights and the burden of obligations under the Code and the Framework Agreement in respect of the Terminated Supply Meter Points (including without limitation the payment of charges set out in the Conveyance Charge Statement in respect thereof) with effect from and including the date of the appointment of the Supplier of Last Resort by the Authority.

6.3 A Supplier of Last Resort's Code Credit Limit will be reviewed and may be revised by the Operator as follows:

(a) The Operator shall undertake a review of the Supplier of Last Resort's Code Credit Limit in accordance with the Supplier of Last Resort Arrangements and shall advise the Supplier of Last Resort, as soon as reasonably practicable thereafter, of any further security that will be required to be provided by the Supplier of Last Resort in accordance with paragraph 6.3 (b);

(b) in the event that following the review referred to in paragraph 6.3(a) the Operator notifies the Supplier of Last Resort that additional security is required, then the Supplier of Last Resort shall be obliged to provide the requisite security in accordance with the Code Credit Rules (as appropriate) in favour of the Operator as soon as reasonably practicable after the day of notification but in any event no later than 6 weeks from the day of notification and upon receipt of that security the Operator shall revise the Supplier of Last Resort's Code Credit Limit as soon as reasonably practicable thereafter; and

(c) in the event that security is required to be provided by the Supplier of Last Resort pursuant to paragraph 6.3(a) but the Supplier of Last Resort fails to provide the security in accordance with paragraph 6.3(b), then the Operator shall be entitled to exercise

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