PPP Contracts

Amended and Restated Major Enhancement Agreement dated 4 April 2003 between LUL and BCV

Recital

THIS AMENDED AND RESTATED MAJOR ENHANCEMENT AGREEMENT made on 4th APRIL 2003

BETWEEN

(1) LONDON UNDERGROUND LIMITED whose registered office is at 55 Broadway, London, SW1H 0BD ( LUL ); and

(2) INFRACO BCV LIMITED whose registered office is at 55 Broadway, London SW1H 0BD ( Infraco )

Purpose of Agreement

1.1 LUL and Infraco have entered into the PPP Contract for the provision of Services comprising the provision and maintenance of the Underground Network as more particularly set out in the PPP Contract.

1.2 LUL may require that Major Enhancement Services are provided and Major Enhancement Works are undertaken by Infraco as part of the provision of the Services under the PPP Contract.

1.3 This Agreement has been entered into by LUL and Infraco for the purposes of setting out the manner in which LUL may require Infraco to:

1.3.1 provide Major Enhancement Services;

1.3.2 perform Major Enhancement Works; and

1.3.3 afford reasonable co-operation with an Alternative Provider in respect of Major Enhancement Works and Major Enhancement Services with a view to facilitating the execution of such works or performance of such services,

as more particularly set out in this Agreement.

Interpretation and Definitions

2.1 To the extent applicable the provisions of this Agreement shall be interpreted in accordance with clause 1.2 of the Master Definitions Agreement between LUL, Infraco, SSL and JNP ( the MDA ).

2.2 Words and expressions used in this Agreement shall, to the extent applicable and unless defined herein or the context otherwise requires, have the meanings assigned to them in the MDA.

2.3 Where any provision of the PPP Contract applies to this Agreement the reference to the PPP Contract shall be read as a reference to this Agreement.

PART A: DURATION OF AGREEMENT AND PROVISION OF MAJOR ENHANCEMENTS

Agreement Duration

3.1 This Agreement shall commence on the Start Date.

3.2 This Agreement shall terminate upon the Expiry Date or otherwise by mutual agreement in writing.

Provision of A Major Enhancement

4.1 Where LUL determines that a Major Enhancement is required LUL shall give written notice to Infraco of the proposed Major Enhancement and shall in such a notice;

4.1.1 set out whether LUL intends to have part or all of the Major Enhancement performed by an Alternative Provider in accordance with clause 8.1.1; or

4.1.2 request that Infraco agree that all or part of Major Enhancement be performed by an Alternative Provider.

4.2 In the event that having given written notice under clause 4.1.2 Infraco has failed to provide a substantive response to LUL's notice within thirty (30) Business Days of its receipt, LUL may elect to appoint an Alternative Provider without further recourse to Infraco.

4.3 Where the Major Enhancement comprises Permitted Commercial Exploitation, LUL may, at any time, have all or any part of the Major Enhancement performed by an Alternative Provider without exercising an LUL Specified Right.

4.4 For the avoidance of doubt the parties may agree at any time during the performance of a Major Enhancement by Infraco that the Major Enhancement or any part of it should be performed by an Alternative Provider. If such agreement is reached then Part C of this Agreement shall govern the performance of that part of the Major Enhancement from such date as shall be agreed by the parties.

4.5 Notwithstanding the other terms of this Agreement and save as provided in respect of Essential Services and Essential Works in clause 29.5 of the PPP Contract, nothing in this Agreement shall require Infraco to carry out or perform any Major Enhancement Works or Major Enhancement Services if it is not able to agree the terms thereof with LUL and it is agreed that any such disagreement shall not be referred to the Disputes Resolution Agreement.

PART B: MAJOR ENHANCEMENT PERFORMED BY INFRACO

Major Enhancement Services

5.1 LUL may request Infraco and/or an Alternative Provider to perform all or any part of the Major Enhancement Services.

5.2 Major Enhancement Services may include any design or other professional services required by LUL to:

5.2.1 assist LUL and Infraco in determining the feasibility of a Major Enhancement;

5.2.2 provide the design of all or any part of a Major Enhancement;

5.2.3 provide a basis for agreeing the ME Contract Price for performing the Major Enhancement or any part of it on any basis requested by LUL including ( but not limited to ): (a) a fixed price basis;

(b) a cost plus basis;

(c) a guaranteed maximum price basis; and

(d) a target price basis.

5.2.4 provide assistance to LUL on agreeing the price of any Major Enhancement Works to be performed by an Alternative Provider on any basis requested by LUL including ( but not limited to ): (a) a fixed price basis;

(b) a cost plus basis;

(c) a guaranteed maximum price basis;

(d) a target price basis.

5.2.5 provide a basis for agreeing the ME Programme for the performance of a Major Enhancement;

5.2.6 provide a basis for amending Schedule 2.1 of the PPP Contract and the Performance Measurement Code to reflect the results of providing the Major Enhancement;

5.2.7 identify any relevant ME Obligations;

5.2.8 assist LUL in the identification, negotiation and/or acquisition of any land or rights in respect of land necessary for the implementation of the Major Enhancement.

5.3 For the purposes of sub-clauses 5.2.3 and 5.2.5 the parties may attempt to agree the ME Terms at any time between the Major Enhancement achieving the equivalent of RIBA Stage D ( Scheme Design ) and RIBA Stage H ( Tender Action ). LUL and Infraco shall establish a process and timetable for developing the ME Terms, including a period of time in which Infraco's proposals are open for acceptance by LUL, having due regard to the period of time in which the quotations of sub-contractors of Infraco are open for acceptance.

5.4 If approved in writing by LUL ( and LUL shall not withhold its approval in the case of Essential Services other than on safety grounds ), Infraco may subcontract part of its performance of Major Enhancement Services. Infraco shall be fully responsible for the provision of such Major Enhancement Services notwithstanding the use of a sub-contractor or consultant. Infraco shall comply with its obligations under Schedule 5.4 and Schedule 5.10 of the PPP Contract in respect of the employment of any sub-contractor or consultant.

The Major Enhancement Services Price

6.1 The ME Services Price and the terms on which Major Enhancement Services will be provided by Infraco ( the ME Services Terms ) shall be agreed or calculated as follows:

6.1.1 Upon LUL specifying the outline requirements for the Major Enhancement, Infraco shall submit details of any proposed design deliverables, resource requirements and a programme for the performance of the Major Enhancement Services that the parties agree are necessary.

6.1.2 LUL and Infraco shall work together to reach agreement upon the programme for and scope of the Major Enhancement Services and the ME Services Terms.

6.1.3 LUL may request Infraco to nominate a value for the ME Services Price for the Major Enhancement Services on either a fixed price or reimbursable basis or alternatively partly on a fixed price and partly on a reimbursable basis. LUL shall, at the same time, provide Infraco with details of its own proposed costs for its involvement in the Major Enhancement.

6.2 If the parties are unable to agree to the ME Services Price and the ME Services Terms, the performance of the Major Enhancement Services shall be limited by the extent to which such services are Essential Services and the ME Services Price shall be calculated in accordance with clause 29.5 of the PPP Contract and the ME Services Terms shall be determined in accordance with clauses 29.6 and 29.7 of the PPP Contract and with the Dispute Resolution Agreement.

6.3 Infraco shall perform the Major Enhancement Services in accordance with the requirements of Schedule 2.1 of the PPP Contract and in accordance with Part B of this Agreement and the ME Service Terms.

Major Enhancement Works

7.1 Where the ME Terms are agreed and upon being instructed to do so by LUL pursuant to the ME Terms, Infraco shall perform or procure the performance of the Major Enhancement Works.

7.2 The performance of the Major Enhancement Works shall be governed by the requirements of Schedule 2.1 of the PPP Contract and in accordance with Part B of this Agreement and the ME Terms.

PART C: MAJOR ENHANCEMENT PROVIDED BY AN ALTERNATIVE PROVIDER

Performance by an Alternative Provider

8.1 Where:

8.1.1 LUL chooses to have a Major Enhancement or any part of it performed by an Alternative Provider and follows the LUL Specified Rights procedure in clause 17 of the PPP Contract; or

8.1.2 a Major Enhancement consists of Permitted Commercial Exploitation; or

8.1.3 the parties agree that the Major Enhancement or any part of it is to be performed by an Alternative Provider, then

LUL may require the Major Enhancement or such part of it to be performed by an Alternative Provider and LUL shall require each Alternative Provider to agree that it shall afford reasonable co-operation with Infraco.

8.2 If the Major Enhancement Works or Major Enhancement Services or any part of it is performed by an Alternative Provider then:

8.2.1 Infraco shall co-operate with LUL and the Alternative Provider in the performance of the Major Enhancement Works and Major Enhancement Services;

8.2.2 LUL shall keep Infraco informed of any matters which are reasonably likely to affect Infraco in the provision of the Services under the PPP Contract; and

8.2.3 Infraco shall provide any Essential Services and perform any Essential Works required by LUL and LUL shall pay Infraco the amounts payable in respect of such Essential Services and/or Essential Works, all in accordance with clause 29 ( Commercial Exploitation ) of the PPP Contract.

8.2.4 LUL shall procure that the Alternative Provider shall agree to abide by the terms of the Access Code in performing the Major Enhancement Works and the Major Enhancement Services and any access to the Underground Network shall be booked on behalf of the Alternative Provider by LUL in accordance with the Access Code.

Suspension of Infraco for duration of Major Enhancement

9.1 LUL shall be entitled, as a result of a Major Enhancement or any part of it being performed by an Alternative Provider, to require Infraco to suspend the provision of the Services in respect of part of the Infraco Network and, where such suspension has occurred, LUL shall be entitled to terminate part of the Lease or Ancillary Lease and shall, in the event of such termination, deliver to Infraco a plan showing any Operational Property in respect of which the Lease or any Ancillary Lease is to be terminated and paragraph 4 of Schedule 1.5 to the PPP Contract shall apply.

9.2 The terms for compensating Infraco for any Increased Infraco Cost or the terms for dealing with the Increased Infraco Risk, so as to mitigate substantially the adverse effects of the Increased Infraco Cost or Increased Infraco Risk which would occur as a result of the provisions of clause 9.1 of this Agreement shall be included in the determination of such matters relating to the relevant Major Enhancement in accordance with clause 17 ( LUL Specified Rights ) of the PPP Contract.

PART D: EXTENSIONS TO THE EXISTING LUL NETWORK (SAVE IN RELATION TO STATIONS)

Line Extensions

10.1 Where the Major Enhancement involves a Line Extension the remaining provisions of this clause shall apply.

10.2 To the extent that the Line Extension involves a Specified Line Upgrade LUL shall not be entitled to appoint an Alternative Provider to perform the Major Enhancement ( or any part of it ) save where the parties agree.

10.3 All aspects of the Line Extension shall be output specified and designed by Infraco provided that to the extent that any Major Enhancement Services to be performed in relation to the Line Extension are required by reason of a need for the acquisition of any land and/or property or in relation to any application for approval under the Transport and Works Act 1992 then: (a) LUL shall provide such of the specification and design work as is required to obtain such approval; and (b) following receipt of such approval Infraco shall complete development of the remaining specification and design.

10.4 Where Infraco does not wish to perform the Line Extension the parties agree that the Line Extension may be performed as Major Enhancement Works or Major Enhancement Services by an Alternative Provider and the provisions of clause 8.2 of this Agreement shall apply.

Output Specified Work

11.1 The parties agree to co-operate to formulate and explore the possibility of undertaking Major Enhancements on the basis of an output based specification.

11.2 If the parties are able to agree on a mutually satisfactory approach to output specified Major Enhancements then LUL may instruct Infraco to perform all or any part of the Major Enhancement Services or Major Enhancement Works on the agreed basis.

PART E - ACQUISITION OF ADDITIONAL LAND AND RIGHTS

Acquisition of additional land and rights

12.1 Where the implementation of the Major Enhancement requires the acquisition of additional land or rights ( whether temporary or permanent ) in respect of land the provisions of this Clause 12 shall apply.

12.2 LUL may choose either:

12.2.1 to make its own arrangements for the acquisition of such land and rights; or

12.2.2 to include the negotiation and/or the acquisition of such rights in the scope of the Major Enhancement Services to be carried out by Infraco; or

12.2.3 to include the negotiation and/or the acquisition of such rights in the specification of the Major Enhancement Works.

12.3 Where any land or rights in respect of land are required for the ongoing operation of the assets comprised in the Major Enhancement and Infraco is required to negotiate the acquisition of any land or rights in respect of land then, unless the parties agree otherwise, such acquisition shall be completed in the name of LUL and the provisions of clauses 3.3 and 3.6 of Section 2 of the Property Code shall apply as if such land and rights were Adjoining Property or Permanent Rights.

12.4 Where Infraco is required to carry out the acquisition of any land or rights in respect of land the purchase price and ancillary costs shall be payable by Infraco and Infraco may take this into account in the calculation of the ME Services Price.

PART F: ADOPTION OF ASSETS

Adoption of Assets

13.1 Immediately following completion of a Major Enhancement in accordance with the terms of any agreement entered into relating to such Major Enhancement ( whether or not such Major Enhancement has been performed by Infraco or an Alternative Provider and whether or not the terms for compensating Infraco for any Increased Infraco Cost and/or the terms for dealing with any Increased Infraco Risk under clause 13.2 below have been agreed ), Infraco shall be responsible thereafter for the maintenance, renewal and enhancement of any new Facility or other Asset Delivered into Service as a consequence of the Major Enhancement and such new Facility or other Asset shall be made Available to LUL, all in accordance with the terms of the PPP Contract and the parties shall agree such changes to Schedule 2.1 as may be necessary to effect the foregoing, with the intention that the necessary changes shall be those which would place upon Infraco comparable obligations in respect of such new Facility or other Asset as it then has with respect to any comparable Assets.

13.2 The terms for compensating Infraco for any Increased Infraco Cost and/or the terms for dealing with the Increased Infraco Risk, so as to mitigate substantially the adverse effects of the Increased Infraco Risk and/or Increased Infraco Cost which would occur as a result of the provisions of clause 13.1 of this Agreement shall, subject to clause 17.15 of the PPP Contract, be determined ( mutatis mutandis ) in accordance with clause 17 ( LUL Specified Rights ) of the PPP Contract.

13.3 Where any Facility or Asset is Delivered into Service as a consequence of a Major Enhancement performed by an Alternative Provider, LUL shall use reasonable endeavours to make available to Infraco the benefits of any rights that LUL may have in respect of that Facility or Asset under any agreement or arrangement with the Alternative Provider and/or any third party ( including, without limitation, any professional manufacturer's or supplier's warranties and/or indemnities ).

PART G: FUNDING AND PAYMENT

Funding and Payment

14.1 Infraco shall use reasonable endeavours to comply with any request by LUL to fund any part of a Major Enhancement performed by Infraco.

14.2 Where Infraco is funding a Major Enhancement or any part of it LUL shall co-operate to agree the addition to the Underlying ISC in respect of such Major Enhancement or part thereof.

14.3 To the extent that funding for a Major Enhancement performed by Infraco is not provided by Infraco, LUL and Infraco shall agree as part of the ME Terms a schedule of milestone payments and Infraco shall be paid by LUL in accordance with such schedule.

PART H: PROVISIONS RELATING TO PERFORMANCE OF MAJOR ENHANCEMENT

Asset protection

15. The provisions of Schedule 5.9 of the PPP Contract shall apply.

Quality plan and Quality assurance

16. The provisions of Schedule 5.11 of the PPP Contract shall apply.

Standards of skill, care, competence and quality

17. The provisions of clause 9 of the PPP Contract shall apply and, in addition, Infraco shall perform the Major Enhancement Services and the Major Enhancement Works in accordance with Good Industry Practice.

Statutory obligations etc.

18. The provisions of clause 28 of the PPP Contract shall apply.

Construction (Design & Management) Regulations 1994 and Safety Assurance

19. The provisions of the Safety Agreement shall apply.

Intellectual property

20. The provisions of clause 37 of the PPP Contract shall apply.

Assignment and sub-contracting

21. The provisions of clauses 30, 31 and 57 of the PPP Contract and Schedules 5.4 and 5.9 shall apply.

Audit and information requirements

22. The provisions of clause 15 of the PPP Contract shall apply.

Liabilities and Indemnities

23. The provisions of clause 24 of the PPP Contract shall apply.

Confidentiality

24. The provisions of clauses 47 and 48 of the PPP Contract shall apply.

Corrupt Gifts

25. The provisions of clause 46 of the PPP Contract shall apply.

Waiver

26. The provisions of clause 56 of the PPP Contract shall apply.

Taxation

27. The provisions of clause 53 of the PPP Contract shall apply.

Notices

28. The provisions of clause 55 of the PPP Contract shall apply.

Contract Management

29. The provisions of Schedule 5.1 of the PPP Contract shall apply.

Infraco's General Responsibilities

30. Infraco shall perform the Major Enhancement in accordance with the ME Terms and in accordance with the Standards.

Extensions of Time

31. The provisions of clause 20 of the PPP Contract shall apply.

Termination or Suspension of Major Enhancement Services

32.1 LUL may, at any time, suspend or terminate, on reasonable notice to Infraco, the performance of the Major Enhancement Services by Infraco and Infraco shall be entitled to such sums as the parties agree are a reasonable proportion of the ME Services Price having regard to the Major Enhancement Services performed by Infraco up to and including the date of such termination or suspension and including the reasonable costs ( having regard to any agreements with respect to the nature and extent of such costs as may have been made by Infraco and LUL in the ME Terms ) incurred by Infraco in relation to that suspension or termination ( including in respect of liabilities for suspending or terminating ( as appropriate ) contracts made by Infraco with third parties relating to the performance of such Major Enhancement Services ) and in the absence of agreement the matter shall be determined in accordance with the Dispute Resolution Agreement.

32.2 LUL may on reasonable notice to Infraco, prior to the commencement of any Major Enhancement Works by Infraco, terminate or suspend the performance of such works.

32.3 Infraco shall be entitled to such sums as the parties agree are reasonable having regard to the expenses incurred by Infraco in preparing for the performance of the Major Enhancement Works and including the reasonable costs ( having regard to any agreements with respect to the nature and extent of such costs as may have been made by Infraco and LUL in the ME Terms ) incurred by Infraco in respect of liabilities for suspending or terminating ( as appropriate ) contracts made by Infraco with third parties relating to the performance of such Major Enhancement Works and in the absence of agreement the matter shall be determined in accordance with the Dispute Resolution Agreement.

Termination or Suspension of Major Enhancement Works

33.1 LUL may, on reasonable notice to Infraco, suspend or terminate the performance of the Major Enhancement Works by Infraco where such works are in progress and such works shall be suspended or terminated provided that the parties have agreed either:

33.1.1 that such termination or suspension shall not result in Increased Infraco Cost or Increased Infraco Risk; or

33.1.2 the terms for compensating Infraco for any Increased Infraco Costs or the terms for dealing with the Increased Infraco Risk, so as to mitigate substantially the adverse effects of the Increased Infraco Cost or Increased Infraco Risk which would occur as a result of the termination or suspension of the Major Enhancement Works, in each case such terms being reasonable in all the circumstances.

33.2 Notwithstanding the proviso in clause 33.1, if the parties are unable to agree the terms of such termination or suspension prior to the expiry of the reasonable notice given to Infraco by LUL under clause 33.1 Infraco shall, nevertheless, suspend or terminate the performance of the Major Enhancement Works on such expiry and the matter shall be determined, as soon as reasonably practicable, following the suspension or termination in accordance with the Dispute Resolution Agreement.

Dispute Resolution

34. Any Dispute shall be resolved in accordance with the Dispute Resolution Agreement.

Governing law

35. Without prejudice to clause 34, this Agreement shall be governed by and construed in accordance with English law and the parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales as provided for in clauses 9.1 to 9.2 of the Dispute Resolution Agreement.

Construction Contracts (England and Wales) Exclusion Order 1998

36. The parties acknowledge and agree that the PPP Contract is entered into by them under a project applying similar principles to the private finance initiative, as referred to in the Construction Contracts ( England and Wales ) Exclusion Order 1998 ( SI 198 No. 648 ).

Contracts (rights of third parties) act 1999

37. A person who is not a party to this Agreement shall have no right under the Contracts ( Rights of Third Parties ) Act 1999 to enforce any of its terms.

In witness whereof this Agreement has been signed for and on behalf of the parties on the date first above written.

SIGNED by ) MARTIN CALLAGHAN
and ) FRANCES LOW
for and on behalf of )
LONDON UNDERGROUND )
LIMITED )

SIGNED by ) MARTIN CALLAGHAN
and ) FRANCES LOW
for and on behalf of )
INFRACO BCV LIMITED )

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