PPP Contracts

Insurance Agreement (Amended and Restated)

Recital

AMENDED AND RESTATED INSURANCE AGREEMENT

AMENDED AND RESTATED AGREEMENT made on 31 DECEMBER 2002

Between:

(1) London Underground Limited whose registered office is at 55 Broadway, London SW1H 0BD ( LUL );

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

(3) Infraco JNP Limited whose registered office is at 55 Broadway, London SW1H 0BD ( JNP ); and

(4) Infraco Sub-Surface Limited whose registered office is at 55 Broadway, London SW1H 0BD ( SSL ).

Whereas:

(A) On the Start Date, BCV, JNP and SSL separately and independently, pursuant to a Transfer Scheme, acquired assets from LUL.

(B) Each Infraco has entered into a PPP Contract with LUL whereby LUL has transferred responsibility for certain infrastructure to that Infraco and that Infraco has agreed to provide infrastructure and asset management services to LUL.

It is hereby agreed as follows:

Definitions and Interpretation

1.1 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, BCV, JNP and SSL ( the MDA ).

1.2 Words and expressions used in this Agreement shall, to the extent applicable and unless defined herein or the context otherwise requires, have the meaning assigned to them in Schedule 2 of the MDA.

Duration

2 This Agreement shall commence on the Start Date and shall terminate automatically without notice on the Expiry Date of the PPP Contract last to expire of the PPP Contracts entered into by each of the Infracos provided that each Infraco shall cease to have any liability hereunder on the expiry of the PPP Contract to which it is a party save in respect of any accrued liabilities thereunder.

The Insurances

3.1 Subject to clauses 3.3 and 3.6 and clauses 7.13 and 7.14 and unless the parties to this Agreement agree to put in place alternative insurance arrangements or the following insurances are no longer available at commercially acceptable terms or are no longer available in the insurance market, LUL shall take out and maintain throughout the duration of this Agreement the following insurances:

3.1(a) asset damage insurance covering "all risks" of physical loss, destruction or damage to the Insured Assets on the basis of not less than standard market terms, conditions and exclusions as are detailed in Part A of the Schedule to this Agreement ( the Asset Damage Insurance ); and

3.1(b) third party liability insurance covering liabilities to third parties including general liability for death, personal injury and loss or destruction of, or damage to, property on the basis of not less than standard market terms, conditions and exclusions as are detailed in Part B of the Schedule to this Agreement ( the Third Party Liability Insurance ).

3.2.1 In the event that any of the Insurances are (i) unavailable in the insurance market or are no longer available at commercially acceptable terms or, (ii) are available in the insurance market but are not purchased by LUL, and an Infraco and/or any of the other Insured Parties that would have been covered under the Insurances incurs any Losses that would be covered under the Insurances if such insurances (a) had been available in the insurance market or had been available at commercially acceptable terms, or (b) had been purchased by LUL, then LUL shall indemnify the relevant Infraco ( on its own behalf and/or as agent for other relevant Insured Parties ) for such Losses suffered or incurred. The amount payable by LUL under this indemnity shall not exceed the amount of the proceeds of a claim under the Insurances had they been so available or purchased. For the avoidance of doubt this clause 3.2.1 is without limitation to LUL's obligation to take out and maintain the Insurances in accordance with clause 3.1.

3.2.2 Infraco shall ( and Infraco and LUL shall each use its reasonable endeavours to procure that each of the other Insured Parties shall ), so far as reasonably practicable, mitigate the Losses incurred by it ( or by the other Insured Parties as the case may be ) which are the subject of the indemnity in clause 3.2.1. LUL's liability to indemnify Infraco and/or the other Insured Parties as provided in clause 3.2.1 shall be reduced proportionately to the extent that the relevant Infraco or other Insured Party has failed to mitigate such Losses.

Common Requirements

3.3 LUL shall ensure that the Insurances ( including any amounts of Asset Damage Insurance and/or Third Party Liability Insurance that LUL takes out and maintains with any captive insurer of Transport for London from time to time ): (a) are taken out and maintained with insurers appointed by LUL from time to time and approved by the Infracos, such approval not to be unreasonably withheld;

(b) are in the form required by this Agreement and in accordance with the Risk Management and Insurance Code;

(c) are taken out in the names of the Insured Parties for their respective rights and interests;

(d) provide that a non-deliberate misrepresentation, misdescription or non-disclosure in any material particular by an Insured Party shall not invalidate a claim by that Insured Party or by any other Insured Party;

(e) provide that breach of the terms and conditions of a policy or deliberate misrepresentation, misdescription or non-disclosure in any material particular by an Insured Party shall not invalidate a claim by any other Insured Party;

(f) provide that any act, error or omission by an Insured Party shall not invalidate a claim by another Insured Party subject to they themselves having complied with the terms and conditions of the Insurances;

(g) provide that if any Insurance is cancelled or allowed to lapse or is suspended for any reason whatsoever, or adversely changed in coverage such cancellation, change, suspension or lapse shall not be effective as to an Insured Party for thirty (30) days after the issue of written notice to LUL and each Infraco from the relevant underwriters or insurers or their representatives of such cancellation, change, suspension or lapse;

(h) provide that the relevant underwriters or insurers shall waive any rights of subrogation howsoever arising which they may have or may acquire against any Insured Party;

(i) be primary without rights of contribution from any other insurance effected by any Insured Party and shall expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there was a separate policy with, and covering, each Insured Party;

(j) provide that if any Insured Party owes any amounts to the insurers in connection with the policy the insurers waive any right they may have to set off or counterclaim and agree not to deduct any such amount from insurance proceeds payable under the policy provided that any unpaid premium owing by any Insured Party may be set-off by the insurers from the insurance proceeds payable under the policy in respect of a claim by or on behalf of that Insured Party;

(k) in the case of loss or destruction of, or damage to, any of the Insured Assets, contain an endorsement providing that all insurance proceeds shall be paid into the Insurance Proceeds Account unless and until the insurers receive written notice from LUL directing otherwise; and

(l) provide that the insurers shall notify LUL and each Infraco, as soon as possible, of any act or omission or of any event of which the insurers have knowledge and which might reasonably be foreseen to invalidate or render unenforceable in whole or in part any policy.

3.4 The parties to this Agreement shall not ( and shall each use its reasonable endeavours to procure that each of the other Insured Parties shall not ), at any time, do or omit to do anything whereby any Insurance would, or would be likely to, be rendered void or voidable or suspended, impaired or defeated in whole or in any material part.

Application of proceeds

3.5.1 If a claim is made under the Asset Damage Insurance the proceeds of any such claim shall be paid into the Insurance Proceeds Account. LUL agrees that such proceeds shall be applied pursuant to clause 26 ( Reinstatement of Infrastructure ) of the PPP Contract to which the relevant Infraco is a party in paying for, or reimbursing Infraco for, the costs of the replacement of, or rectification of the loss, destruction or damage to, any Insured Asset. If payments on account are agreed to be made by the insurers to an Infraco ( on its own behalf and/or as agent for the other relevant Insured Parties ) in accordance with the terms of the policy then LUL shall ensure that proceeds are applied from the Insurance Proceeds Account as they are received from the insurers in reimbursing Infraco ( on its own behalf and/or as agent for the other relevant Insured Parties ) for the costs of the replacement of, or rectification of the loss, destruction or damage to, any Insured Asset.

3.5.2 The parties to this Agreement shall ensure that the escrow arrangements in respect of the Insurance Proceeds Account facilitate the application of the proceeds of any insurance claim in accordance with this clause 3.5.

PFI Contracts

3.6.1 The relevant PFI Contractor has obligations under the relevant PFI Contracts to effect certain insurances. The parties to this Agreement acknowledge that to effect the Insurances in respect of the assets and/or liabilities required to be insured under the PFI Contracts may amount to double insurance of the assets and/or liabilities insured under the insurances to be effected under the PFI Contracts. LUL shall be entitled to limit the coverage of the Insurances in respect of such assets and/or liabilities to the extent that such limitation in the coverage provided by the Insurances is otherwise provided to the Insured Parties by the insurances effected by the relevant PFI Contractors under the PFI Contracts. In the event that the insurances so effected by the PFI Contractors do not provide the coverage that would have been provided to the Insured Parties by the Insurances had the Insurances covered such PFI related assets and/or liabilities and an Infraco and/or any of the other Insured Parties incurs any Losses that would be covered by any of the Insurances, then LUL shall indemnify the relevant Infraco ( on its own behalf and/or as agent for the other relevant Insured Parties ) for such Losses suffered or incurred. The amount payable by LUL under this indemnity shall not exceed the amount of the proceeds of a claim under the Insurances had they been so effected.

3.6.2 Infraco shall ( and Infraco and LUL shall each use its reasonable endeavours to procure that each of the other Insured Parties shall ), so far as reasonably practicable, mitigate the Losses incurred by it ( or by the other Insured Parties as the case may be ) which are the subject of the indemnity in clause 3.6.1. LUL's liability to indemnify Infraco and/or the other Insured Parties as provided in clause 3.6.1 shall be reduced proportionately to the extent that the relevant Infraco or other Insured Party has failed to mitigate such Losses.

3.6.3 In the event that JNP is obliged to insure any Northern Line assets pursuant to the Northern Line Train Service Contracts then JNP shall give written notice to LUL to that effect and LUL shall take out the Insurances in respect of the Northern Line assets with effect from the date falling thirty (30) days from the date the notice given by JNP is received by LUL. Any increase in premium, insurance premium tax and insurance brokerage or fees shall be payable, by way of an Exceptional Amount in the first Payment Period after such premiums have been paid by LUL, by JNP.

Additional Insurances

4.1 Each party to this Agreement shall take out and maintain all those insurances which it is required to have by any applicable Law or by the terms of any contract to which it is a party.

4.2 Subject to clauses 3.6.3, 4.3, 4.4, 4.5, 4.6, 4.7 and Schedule 5.19 ( Insurance ) of the PPP Contracts, each party to this Agreement may take out insurance additional to the Insurances which shall be at the option and cost of the party requiring such additional insurance provided that no party may effect additional insurance in respect of the Asset Damage Mandatory Deductible and the Third Party Mandatory Deductible.

Unrelated Activities/Related Activities

4.3 Any activities ( regardless of whether or not such activities are related to the Services, the PPP Contract, the Transaction Documents or the Ancillary Agreements ) may be added to the Insurances on request by an Infraco if agreed to by LUL in its absolute discretion. Any resulting increase in the premium, insurance premium tax and insurance brokerage or fees payable by LUL in respect of the Insurances shall be payable, by way of an Exceptional Amount in the first Payment Period after such premiums have been paid by LUL, by the Infraco requesting the extension. LUL may at any subsequent date give written notice to the Infraco that it is declining to include such unrelated activities in the Insurances with effect from the date falling thirty (30) days from the date of the notice, in which event the Infraco requesting the extension must take out its own insurance in respect of such activity.

Commercial exploitation

4.4 LUL may at any time add: (a) LUL Commercial Exploitation permitted pursuant to clause 29 ( Commercial Exploitation ) of the PPP Contract; or

(b) any Major Enhancement, Major Enhancement Services or Major Enhancement Works, to the Insurances.

4.5 Any Infraco may request that commercial exploitation activities which it is permitted to carry out in accordance with clause 29 ( Commercial Exploitation ) of the PPP Contract are added to the Insurances. LUL may add such commercial exploitation activities to the Insurances in its absolute discretion. Any increase in premium, insurance premium tax and insurance brokerage or fees due to the addition of Infraco's commercial exploitation activities shall be payable, by way of an Exceptional Amount in the first Payment Period after such premiums have been paid by LUL, by the Infraco requesting the extension. LUL may at any subsequent date give written notice to the Infraco that it is declining to include such commercial exploitation activities in the Insurances with effect from the date falling thirty (30) days from the date of the notice, in which event the Infraco requesting the extension must take out its own insurance in respect of such activity.

Employers' Liability Insurance/Contract Works Insurance/other insurances

4.6 Subject to clauses 4.3, 4.5 and 4.7, any Infraco ( in respect of that Infraco only ) or LUL in its absolute discretion may request that risks and liabilities covered by Employers' Liability Insurance and/or Contract Works Insurance required to be taken out and maintained by Infraco pursuant to clause 8 of this Agreement and Schedule 5.19 ( Insurance ) of the PPP Contracts, respectively, and/or any other insurances taken out and maintained by Infraco, are taken out and maintained by LUL. LUL may take out and maintain such employers' liability insurance or add such risks and liabilities to its Employers' Liability Insurance and/or take out and maintain such contract works insurance or add such risks and liabilities to the Insurances and/or add further risks and liabilities to the Insurances and/or take out further insurances, in each case, in its absolute discretion if requested by Infraco ( in respect of that Infraco only ) or if at LUL's request, with the consent of the relevant Infraco. If any such request is: (a) made by an Infraco, any increase in premium, insurance premium tax and insurance brokerage or fees payable by LUL in respect of its insurances in any year as a result of the addition of the relevant Infraco's risks and liabilities shall be payable to LUL, by way of an Exceptional Amount in the first Payment Period after such premiums have been paid by LUL, by the Infraco requesting the change; or

(b) made by LUL which results in LUL paying a higher premium, insurance premium tax and insurance brokerage or fees than the relevant Infraco would otherwise have had to pay for such insurances for any year, the difference between the amount that Infraco would otherwise have had to pay for such insurances and the amount LUL is required to pay in respect of any premium, insurance premium tax and insurance brokerage or fees due to the addition of the relevant Infraco's risks and liabilities, shall be payable by LUL. Infraco shall pay to LUL, by way of an Exceptional Amount in the first Payment Period before such premiums are due to be paid by LUL for such additional insurances for such risks and liabilities the amount that Infraco would otherwise have had to pay for such insurances for such risks and liabilities ( including premium, insurance premium tax and insurance brokerage or fees ) for any such year.

LUL may at any subsequent date give written notice to the Infraco that LUL is declining to take out and maintain additional insurances and/or extend LUL's Employers' Liability Insurance and/or Insurances to include risks and liabilities that would be covered by Infraco's Employers' Liability Insurance and/or Contract Works Insurance and/or any other insurances with effect from the date falling sixty (60) days from the date of the notice, in which event the relevant Infraco must take out and maintain its own Employers' Liability Insurance pursuant to clause 8 of this Agreement and/or Contract Works Insurance in accordance with Schedule 5.19 ( Insurance ) of its PPP Contract and/or such other additional insurances to the extent that it is required to take out such additional insurances or in respect of any other insurances, to the extent it wishes to take out such additional insurances.

4.7 The purpose of clause 4.6 is to facilitate the most economical and effective basis for taking out and maintaining the insurances required to be taken out and maintained by the Infracos pursuant to clause 8 of this Agreement and Schedule 5.19 ( Insurance ) of the PPP Contracts and of other insurances to be taken out and maintained by the Infracos. In the event that any Infraco ( in respect of that Infraco only ) and LUL agree that LUL shall take out and maintain Infraco's Employers' Liability Insurance and/or Contract Works Insurance and other insurances as provided in this Agreement and/or Schedule 5.19 ( Insurance ) of its PPP Contract, then Infraco shall be discharged from its obligations under this Agreement and/or Schedule 5.19 ( Insurance ) of its PPP Contract ( as the case may be ) to take out and maintain such insurances and LUL shall assume such obligations but otherwise the provisions of this Agreement and Schedule 5.19 ( Insurance ) of its PPP Contact shall continue to apply to Infraco and LUL as if such insurance had been taken out and maintained by that Infraco.

Liability for Premiums and Renewal

5.1 LUL shall pay the premiums in respect of the Insurances and any insurance premium tax payable thereon in accordance with the terms thereof together with any insurance brokerage or fees and shall upon request promptly provide the Infracos, with satisfactory evidence of such payment.

5.2 Infracos shall in no circumstances have any liability for the payment of premiums and any insurance premium tax payable thereon or any insurance brokerage or fees, save as provided in clauses 3.6.3, 4.1, 4.2, 4.3, 4.5, 4.6 and 5.3 and save in relation to its Employers' Liability Insurance and its Contract Works Insurance where Infracos shall have liability for the payment of premiums and any insurance premium tax payable thereon or any insurance brokerage or fees ( save as may be provided in Schedule 5.19 ( Insurance ) of the PPP Contracts ).

5.3 If the premium ( including insurance premium tax, insurance brokerage or fees ) payable for an Insurance has been increased due to claims caused by an Infraco Party arising from events within the control of that Infraco Party ( including claims attributable to its direct or indirect contractors or sub-contractors ), LUL shall notify Infraco of the amount by which such premium ( including insurance premium tax, insurance brokerage or fees ) has increased and request payment for such increase. On receipt of such request for payment Infraco shall promptly pay to LUL the amount of such increase. In the event that Infraco disagrees that the increase in premium ( including insurance premium tax, insurance brokerage or fees ) is due to claims caused by it then such Dispute shall be determined in accordance with the Dispute Resolution Agreement.

5.4 LUL agrees that any premium, insurance premium tax, insurance brokerage or fees ( if any ) payable in respect of any amounts of Asset Damage Insurance and/or Third Party Liability Insurance that LUL takes out and maintains with any captive insurer of Transport for London from time to time shall not exceed the amount of premium, insurance premium tax, insurance brokerage or fees that would have been payable at the relevant time had such amounts been insured with independent insurers in the insurance market.

Claims Procedure

6 The parties to this Agreement agree that all claims under the Insurances shall be handled and dealt with by the claims handling procedure as set out in the Risk Management and Insurance Code.

Thresholds and Deductibles

7.1 Each party to this Agreement shall accept an Asset Damage Mandatory Deductible of £100,000 at the Start Date.

7.2 Each party to this Agreement shall accept a Third Party Mandatory Deductible of £50,000 at the Start Date.

7.3 If, in respect of a claim under the Asset Damage Insurance, a party to this Agreement accepts a deductible that is higher than the Asset Damage Mandatory Deductible then that party shall be solely liable for the difference between the Asset Damage Mandatory Deductible and the revised higher Asset Damage Mandatory Deductible.

7.4 If in respect of a claim under the Third Party Liability Insurance, a party to this Agreement accepts a deductible that is higher than the Third Party Mandatory Deductible then that party shall be solely liable for the difference between the Third Party Mandatory Deductible and the revised higher Third Party Mandatory Deductible.

Asset Damage

7.5 Subject to clause 7.6A, in the event that there is physical loss, destruction or damage to any Insured Asset ( including any associated costs or expenses ) which is covered by the Asset Damage Insurance ( the Asset Losses ) and the total Asset Losses ( being each and every Loss and/or series of Losses arising out of one event ) do not exceed £10,000 ( the Asset Losses Threshold ), the party to this Agreement which is responsible for the Insured Asset pursuant to the Transaction Documents at the time at which the loss, destruction or damage occurs to the Insured Asset shall bear the cost of such Asset Losses and shall have no recourse against any other Insured Party in respect of such Asset Losses. In the event that it is not possible to determine who is responsible for the Insured Asset pursuant to the Transaction Documents at the time at which the loss, destruction or damage occurs to the Insured Asset then the party to this Agreement which shall bear the cost of Asset Losses up to the Assets Losses Threshold shall be the party which owns such Insured Asset pursuant to the Transaction Documents at the time at which the loss, destruction or damage occurs to the Insured Asset and such party shall have no recourse against any other Insured Party in respect of such Asset Losses.

7.6 Subject to clause 7.6A, in the event that there are total Asset Losses ( being each and every Loss and/or series of Losses arising out of one event ) above the Asset Losses Threshold then: (a) if the party which caused such Asset Losses is a party to this Agreement then the party which caused such Asset Losses shall, to the extent such party caused such Asset Losses, bear the cost of such Asset Losses up to the Asset Damage Mandatory Deductible; or

(b) if no party to this Agreement caused such Asset Losses or some other Insured Party or a third party caused such Asset Losses then the party to this Agreement which is responsible for the Insured Asset pursuant to the Transaction Documents at the time at which the loss, destruction or damage occurs to the Insured Asset shall bear the cost of such Asset Losses up to the Asset Damage Mandatory Deductible and shall have no recourse against any other Insured Party in respect of such Asset Losses; or

(c) if it is not possible to determine who is responsible for the Insured Asset pursuant to the Transaction Documents at the time at which the loss, destruction or damage occurs to the Insured Asset then the party to this Agreement which shall bear the cost of such Asset Losses up to the Asset Damage Mandatory Deductible shall be the party which owns such Insured Asset pursuant to the Transaction Documents at the time at which the loss, destruction or damage occurs and such party shall have no recourse against any other Insured Party in respect of such Asset Losses.

7.6A In the event that there are Asset Losses ( whether or not such Asset Losses are above the Asset Losses Threshold ) and to the extent that such Asset Losses are covered ( both as to the nature and amount of such Asset Losses ) under a Motor Insurance Policy taken out and maintained on standard market terms, conditions and exclusions in accordance with Good Industry Practice by an Infraco that is claiming in respect of such Asset Losses, then that Infraco shall claim in respect of such Asset Losses under the Motor Insurance Policy.

Third Party Claims

7.7 Subject to clause 7.8A, in the event that an Insured Party is the subject of a claim or claims by a third party or third parties for death or personal injury or loss or destruction of, or damage to, property ( including any associated costs or expenses ) which is covered by the Third Party Liability Insurance ( the Third Party Losses ) and the total Third Party Losses arising from any one occurrence or series of occurrences arising out of any one source or original cause do not exceed £10,000 ( the Third Party Losses Threshold ), then LUL shall bear the cost of such claim for Third Party Losses and shall have no recourse against any other Insured Party in respect of such claim for Third Party Losses.

7.8 Subject to clause 7.8A, in the event that an Insured Party is the subject of a claim or claims by a third party or third parties for Third Party Losses and the total Third Party Losses arising from any one occurrence or series of occurrences arising out of any one source or original cause is above the Third Party Losses Threshold, then: (a) if the party which caused such Third Party Losses is a party to this Agreement then the party which caused such Third Party Losses shall, to the extent such party caused such Third Party Losses, bear the cost of such Third Party Losses up to the Third Party Mandatory Deductible; or

(b) if no party to this Agreement caused such Third Party Losses or some other Insured Party or a third party caused such Third Party Losses then, the cost of such Third Party Losses up to the Third Party Mandatory Deductible shall be borne equally between the parties to this Agreement relevant to the claim by the third party.

7.8A In the event that there are Third Party Losses ( whether or not such Third Party Losses are above the Third Party Losses Threshold ) and to the extent that such Third Party Losses are covered ( both as to the nature and amount of such Third Party Losses ) under a Motor Insurance Policy taken out and maintained on standard market terms, conditions and exclusions in accordance with Good Industry Practice by an Infraco that is claiming in respect of such Third Party Losses, then that Infraco shall claim in respect of such Third Party Losses under the Motor Insurance Policy.

Allocation of the Asset Damage Mandatory Deductible and the Third Party Mandatory Deductible

7.9 The allocation of responsibility for the Asset Damage Mandatory Deductible and the Third Party Mandatory Deductible between the parties to this Agreement shall be as agreed between the parties and any Dispute or failure to reach agreement shall be determined in accordance with the Dispute Resolution Agreement.

7.10 For the avoidance of doubt, clauses 7.5 and 7.6 and clauses 7.7 and 7.8 are mutually exclusive.

7.11 For the purposes of clauses 7.6 and 7.8, a party to this Agreement shall be deemed to have caused the Asset Losses or Third Party Losses, if the party is an Infraco, if such Losses were caused by a member of that Infraco Group, or if the party is LUL, by a member of the LUL Group.

Ancillary Agreements and Centralised Service Agreements

7.12 For the avoidance of doubt, all liability and indemnity provisions contained in the Ancillary Agreements and Centralised Service Agreements shall be subject to this Agreement. In the event of a conflict between this Agreement and any Ancillary Agreement or Centralised Service Agreement ( whether entered into before or after the Transfer Date ) this Agreement shall prevail. In particular, but without prejudice to the generality of the foregoing, the liability of any party to this Agreement for payment of any Asset Damage Mandatory Deductible and/or Third Party Mandatory Deductible shall not be included in calculating the Service Provider's Aggregate Liability Amount ( as defined in the relevant Ancillary Agreement or Centralised Service Agreement ).

LUL Self-Insurance

7.13 LUL may, at its option, elect that the Asset Damage Insurance taken out and maintained by LUL pursuant to clause 3.1 shall not cover the first £5,000,000 in respect of each and every Loss and/or series of Losses arising out of one event ( the Asset Damage Non-Insured Amount ). LUL agrees that it shall only be able to increase the Asset Damage Non-Insured Amount with the consent of each Infraco, such consent not to be unreasonably withheld or delayed. If the amount of the Asset Losses suffered by an Insured Party exceeds the Asset Damage Mandatory Deductible then LUL shall pay to that Insured Party any shortfall in claims proceeds between the Asset Damage Mandatory Deductible and the Asset Damage Non-Insured Amount. Upon request by Infraco ( on its own behalf and/or as agent for other relevant Insured Parties ), LUL shall make such payments to Infraco or other relevant Insured Parties on account if it is reasonable in the circumstances for such payments to be made at interim stages to reimburse Infraco or other relevant Insured Parties for the costs of replacement of, or rectification of the loss, destruction or damage to, any Insured Asset.

7.14 LUL may, at its option, elect that the Third Party Liability Insurance taken out and maintained by LUL pursuant to clause 3.1 shall not cover the first £250,000 arising from any one occurrence or series of occurrences arising out of any one source or original cause ( the Third Party Non-Insured Amount ). LUL agrees that it shall only be able to increase the Third Party Non-Insured Amount with the consent of each Infraco, such consent not to be unreasonably withheld or delayed. If the amount of the Third Party Losses suffered by an Insured Party exceeds the Third Party Mandatory Deductible then LUL shall pay to the third party any shortfall in claims proceeds between the Third Party Mandatory Deductible and the Third Party Non-Insured Amount.

Employers' Liability Insurance

8.1 (a) LUL shall take out and maintain employers' liability insurance for the period from the date of this Agreement up to and including the Transfer Date; and

(b) each party to this Agreement shall take out and maintain from the Transfer Date and throughout the remaining duration of this Agreement employers' liability insurance,

to comply with Employers' Liability ( Compulsory Insurance ) Act 1969 ( the Employers' Liability Insurance ) and for a limit of not less than £25,000,000 for any one occurrence.

8.2 (a) LUL shall ensure that its Employers' Liability Insurance provides that where an employee, officer or director or servant of Infraco makes a claim, whether before or after the Transfer Date, against Infraco for personal injury or death caused or occurring during the course of his employment with LUL or Infraco at any time up to and including the Transfer Date, LUL and/or LUL's relevant underwriters or insurers will accept such claim as if that claim had been made against LUL.

(b) LUL shall ensure that its Employers' Liability Insurance provides that where an employee, officer or director or servant of LUL makes a claim against an Infraco for personal injury or death caused or occurring during the course of his employment with LUL at any time after the Transfer Date, the relevant underwriters or insurers will accept such claim as if that claim had been made against LUL.

(c) LUL shall ensure that in respect of its Employers' Liability Insurance the relevant underwriters or insurers waive any rights of subrogation howsoever arising which they may have or acquire against any Insured Party.

(d) Infraco shall ensure that its Employers' Liability Insurance provides that where an employee, director, officer or servant of that Infraco makes a claim against LUL or another Infraco for personal injury or death caused or occurring during the course of his employment with that Infraco at any time after the Transfer Date, the relevant underwriters or insurers will accept such claim as if that claim had been made against that Infraco.

(e) Infraco shall ensure that in respect of its Employers' Liability Insurance the relevant underwriters or insurers waive any rights of subrogation in respect of claims relating to events, incidents or occurrences arising after the Transfer Date howsoever arising which they may have or acquire against any Insured Party.

8.3 Save as provided in clause 8.2(a), no party to this Agreement shall exercise recourse against another party to this Agreement in respect of personal injury or death of its own directors, officers, employees or servants caused or occurring in the course of their employment. Each party to this Agreement shall indemnify the other parties to this Agreement against Losses suffered or incurred as a result of personal injury or death of any of its directors, officers or employees caused or occurring in the course of their employment as provided in clauses 24.1(b) and (cA) and clauses 24.5(b) and (c)( iii ) of the PPP Contract to which it is a party and clause 11.1(b) of this Agreement.

Contract Works Insurance

9.1 Provided such insurance is available in the insurance market at commercially acceptable terms, each Infraco shall take out and maintain or cause to be taken out and maintained, from the Transfer Date and throughout the remaining duration of the PPP Contract, Contract Works Insurance in accordance with Schedule 5.19 ( Insurance ) of the PPP Contract to which it is a party.

9.2 If a claim is made under the construction or erection all risks section of the Contract Works Insurance the proceeds of any such claim shall be paid in the case of BCV into the BCV Insurance Proceeds Account, in the case of SSL into the SSL Insurance Proceeds Account and in the case of JNP into the JNP Insurance Proceeds Account. The proceeds of any such claim for loss, destruction or damage to any Asset shall be applied by Infraco pursuant to clause 26 ( Reinstatement of Infrastructure ) of the Contract to which the relevant Infraco is a party in paying for, or reimbursing Infraco for, the costs of the replacement of, or rectification of the loss, destruction or damage to, that Asset or otherwise in paying for, or reimbursing Infraco ( on its own behalf and/or as agent for the other relevant insured parties ) for, the costs of the replacement of, or rectification of the loss, destruction or damage to, the relevant contract works.

9.3 BCV shall ensure that the arrangements in respect of the BCV Insurance Proceeds Account facilitate the application of the proceeds of any insurance claim in accordance with clause 9.2. SSL shall ensure that the arrangements in respect of the SSL Insurance Proceeds Account facilitate the application of the proceeds of any insurance claim in accordance with clause 9.2. JNP shall ensure that the arrangements in respect of the JNP Insurance Proceeds Account facilitate the application of the proceeds of any insurance claim in accordance with clause 9.2.

9.4 In the event that there are Losses which may be claimed under an Infraco's Contract Works Insurance and to the extent that such Losses are covered ( both as to the nature and amount of such Losses ) under a Motor Insurance Policy taken out and maintained on standard market terms, conditions and exclusions in accordance with Good Industry Practice by LUL or an Infraco that is claiming in respect of such Losses, then that Infraco or LUL ( as the case may be ) shall claim in respect of such Losses under the Motor Insurance Policy.

Review

10.1 On every Review Date LUL shall review and determine the limits and cover of the Employers' Liability Insurance, the limits and cover specified in the Schedule to this Agreement, the amounts of the Asset Damage Mandatory Deductible, the Third Party Liability Deductible, the Asset Losses Threshold and the Third Party Losses Threshold with effect from the next renewal date after such Review Date. The limits and/or deductibles may be increased or decreased more frequently if agreed by the parties ( each acting reasonably ) to this Agreement. If the parties to this Agreement fail to so agree, such failure to agree shall not constitute a Dispute and the Dispute Resolution Agreement shall not apply.

10.2 Subject to clause 10.1, the parties agree that any limits ( including the limits under clauses 7.13 and 7.14 ) and deductibles on the Insurances and the Employers' Liability Insurance shall be maintained throughout the duration of this Agreement unless otherwise agreed between the parties to this Agreement or unless such insurance is no longer available on commercially acceptable terms.

Indemnity

11.1 Subject to clause 11.4, each Infraco ( the Indemnifying Infraco ) shall be responsible for, and shall indemnify each other Infraco, its agents, officers and employees ( Indemnified Parties ) from and against: (a) subject to clauses 11.2 and 11.3, Losses suffered or incurred by the Indemnified Parties as a result of:
(i) claims relating to liabilities to third parties; or

(ii) damage to property owned or used by Indemnified Parties,
to the extent that such Losses are Insured Losses and agreed or determined to have been caused by the Indemnifying Infraco in accordance with clause 7 of this Agreement or, subject to paragraph (c) below and clause 11.3A, to the extent that such Losses are Insured Losses and agreed or determined to have been caused by a contractor or sub-contractor, in each case acting on behalf of the Indemnifying Infraco;

(b) Losses suffered or incurred by Indemnified Parties as a result of personal injury or death of any director, officer or employee caused or occurring in the course of their employment by the Indemnifying Infraco to the extent that such Losses are covered ( both as to the nature and amount of such Losses ) within the scope of the Employers' Liability Insurance required to be put in place by the Indemnifying Infraco pursuant to clause 8 of this Agreement. The amount payable by the Indemnifying Infraco under this indemnity shall not exceed the aggregate of the amount of the proceeds of the relevant claim under the Employers' Liability Insurance and the amount of any deductible that may apply to that insurance; and

(c) subject to clause 11.3A, Losses suffered or incurred by Indemnified Parties to the extent that such Losses are covered ( both as to the nature and amount of such Losses ) within the scope of the Indemnifying Infraco's Contract Works Insurance required to be put in place pursuant to Schedule 5.19 ( Insurance ) of the PPP Contract to the extent that such Losses are agreed or determined to have been caused by the Indemnifying Infraco or by a contractor or sub-contractor, in each case acting on behalf of the Indemnifying Infraco. Subject to paragraph 3.6 of Schedule 5.19 ( Insurance ) of the PPP Contracts in the case of BCV and SSL only, the amount payable by Infraco under this indemnity shall not exceed the amount of any deductible that may apply to the Indemnifying Infraco's Contract Works Insurance.

11.2 Subject to clause 11.3, the amount payable by the Indemnifying Infraco under the indemnity in clause 11.1(a) shall not exceed the amount of the Asset Damage Mandatory Deductible or the Third Party Mandatory Deductible ( as the case may be ).

11.3 The limitation at clause 11.2 shall not apply where an Indemnified Party suffers or incurs Losses in the circumstances described at clause 11.1(a)(i) or (ii) if, as a result of the wilful act or omission of the Indemnifying Infraco, such Losses are not Insured Losses. In circumstances where this clause 11.3 applies, the Indemnifying Infraco shall be responsible for, and shall indemnify the Indemnified Parties from and against, such Losses and the amount payable by the Indemnifying Infraco under this clause 11.3 shall not exceed the aggregate of the amount of the proceeds of the relevant claim and the amount of the relevant deductible under the Insurances required to be put in place by LUL pursuant to this Agreement which would have been valid but for the Indemnifying Infraco's wilful act or omission.

11.3A The limitation at clause 11.1(c) shall not apply where an Indemnified Party suffers or incurs Losses in the circumstances described at clause 11.1(c) if, as a result of the wilful act or omission of the Indemnifying Infraco, such Losses are not insured losses under Infraco's Contract Works Insurance. In circumstances where this clause 11.3A applies, the Indemnifying Infraco shall be responsible for, and shall indemnify the Indemnified Parties from and against, such Losses and the amount payable by the Indemnifying Infraco under this clause 11.3A shall not exceed the aggregate of the amount of the proceeds of the relevant claim and the amount of the relevant deductible under the Contract Works Insurance required to be put in place by the Indemnifying Infraco pursuant to Schedule 5.19 ( Insurance ) of the PPP Contract which would have been valid but for the Indemnifying Infraco's wilful act or omission.

11.4 Each Infraco shall, so far as reasonably practicable, mitigate the Losses incurred by it which are the subject of the indemnity at clause 11.1. The Indemnifying Infraco's liability to indemnify the Indemnified Parties as provided in clause 11.1 shall be reduced proportionately to the extent that the relevant Infraco has failed to mitigate such Losses.

11.5 Subject to the other terms of this Agreement and the terms of the Risk Management and Insurance Code, if any Infraco ( the Recipient ) becomes aware of any third party claim against the Recipient which may result in a claim against another Infraco ( the Covenantor ) under any of the indemnities contained in clause 11 of this Agreement, the Recipient shall give written notice to the Covenantor as soon as is reasonably practicable thereafter. The Covenantor shall be entitled at its discretion ( but after consultation with the Recipient ) to resist at the Covenantor's own expense such claim on behalf of the Recipient provided that: (a) the Covenantor shall not be entitled to resist any such claim before any court unless it has been advised by leading counsel, after disclosure of all relevant information and documents, that it is reasonable to resist such claim in the manner proposed by the Covenantor;

(b) the Recipient shall be kept fully informed of all matters pertaining to the claim; and

(c) the Recipient is indemnified and secured to its reasonable satisfaction by the Covenantor against all Losses which may thereby be incurred.

11.6 The Recipient shall give the Covenantor all reasonable co-operation, access and assistance, technical or otherwise, for the purpose of resisting such a claim subject as provided in sub-clause 11.5(c).

11.7 If the Covenantor does not request the Recipient to take any appropriate action or shall fail to indemnify and secure the Recipient to its reasonable satisfaction within twenty-one (21) days of the said notice to the Covenantor, the Recipient shall be free to pay or settle the claim on such terms as it may in its absolute discretion think fit. Prior to the expiry of such notice period, the Recipient shall make no admission prejudicial to the resistance of such claim.

11.8 The liability of one Infraco ( the Liable Infraco ) to another Infraco under this Agreement ( except clause 7.12 of this Agreement to which this clause 11.8 shall not apply ) in relation to: (a) loss of profits or revenue;

(b) loss of business;

(c) loss of contracts;

(d) indirect, special, incidental or consequential loss or damage; and

(e) claims of third parties for any of the matters referred to in subparagraphs (a) - (d) above, ( Consequential Losses ) shall be limited to £500,000 in each Contract Year, and this limitation shall apply even if the Liable Infraco has notice of the likelihood of such Consequential Loss, save that the limitation in this clause shall not apply so as to prevent the recovery from the Liable Infraco by another Infraco of: (i) amounts that would have been recoverable under the Employer's Liability Insurances or the Contract Works Insurances had the Liable Infraco complied with its obligations under this Agreement and Schedule 5.19 ( Insurance ) of its PPP Contract; and/or

(ii) amounts otherwise recoverable from the Liable Infraco under the provisions of clause 11 of this Agreement.

Dispute Resolution

12 Subject to clause 10.1, any Dispute shall be resolved in accordance with the Dispute Resolution Agreement.

Survival

13.1 The provisions of clause 7, 12 and 14 shall survive the expiry of this Agreement and continue in full force and effect, along with any other provisions of this Agreement ( including the schedule ) necessary to give effect to them.

13.2 In addition, any other provisions of this Agreement ( including the schedule ), which by their nature or by implication ( including so far as they relate to accrued rights and liabilities ) are required to survive expiry of this Agreement, shall survive expiry as aforesaid.

Contracts (Rights of Third Parties) Act 1999

14 LUL agrees that the Insured Parties shall be entitled to enforce directly against LUL those rights expressed to be for their benefit ( including those expressed to be in Infraco's favour as their agent ) in clauses 3.2.1, 3.5.1, 3.6.1, 7.13, 7.14 and 9.2 along with any other provisions of this Agreement ( including the Schedule ) necessary to give effect to such rights, pursuant to the Contracts ( Rights of Third Parties ) Act 1999. Save as aforesaid, 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.

Governing Law

15 Without prejudice to clause 12, this Agreement shall be governed by and construed in accordance with laws of England and Wales and the parties to this Agreement irrevocably submit to the exclusive jurisdiction of the courts of England and Wales as provided for in clauses 9.1 and 9.2 of the Dispute Resolution Agreement.

Assignment

16 No Infraco may assign, transfer, charge or otherwise deal with, in whole or in part, any of its rights or obligations under this Agreement ( nor grant, declare a trust of, create or dispose of any right or interest in it ) other than in accordance with the terms of the relevant PPP Contract.

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

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

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

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

SIGNED by MARTIN CALLAGHAN ) MARTIN CALLAGHAN
and FRANCES LOW ) FRANCES LOW
for and on behalf of )
INFRACO SUB-SURFACE )
LIMITED )

SCHEDULE

PART A - Asset Damage

Insured

1.1 The Asset Damage Insurance shall cover the Insured Parties.

Risks

1.2 The Asset Damage Insurance shall cover "all risks" of physical loss, destruction or damage including by electrical and mechanical breakdown or detriment including full terrorism cover.

Interest Insured

1.3 The Asset Damage Insurance shall cover all Insured Assets whilst at the premises of any Insured Party, anywhere on the Underground Network and whilst in transit in the United Kingdom, including inland waterways.

Sum Insured

1.4 The amount of Asset Damage Insurance must be on a basis which provides for the full cost of reinstatement of the Insured Asset.

Deductible

1.5 The Asset Damage Insurance shall have an uninsured deductible of not less than the Asset Damage Mandatory Deductible in respect of each and every loss/occurrence.

Conditions

1.6 The Asset Damage Insurance shall contain the following clauses or extensions of cover:

(a) an automatic reinstatement of loss clause;

(b) a clause providing that workmen, joiners and other tradesmen may be employed to carry out repairs, general maintenance, decorations or structural alterations;

(c) full terrorism cover;

(d) a reinstatement memorandum including provision for undamaged property and modification for incompatible property. The undamaged property limit shall not be less than for £10,000,000;

(e) a clause providing for debris removal including following a tunnel collapse;

(f) a clause including the public authorities and any legislative requirements of any Competent Authority including HM Railway Inspectorate and similar bodies with an extension for a sum insured of not less than 15% of the policy sum insured in respect of undamaged property;

(g) a clause providing for insurance against loss reduction expenses including expediting expenses and temporary repairs;

(h) a clause providing for accidental discharge of extinguishing gases;

(i) capital additions subject to notification being made to the insurers where any one addition exceeds £10,000,000;

(j) a clause providing that the insurance shall not be prejudiced by any failure of equipment of whatsoever nature;

(k) a professional fees clause;

(l) an all other contents clause;

(m) a clause providing for sprinkler upgrade costs following damage;

(n) a clause providing for the cost of making safe and restoring tunnels and cuttings following damage;

(o) a seventy two (72) hours clause for storm, flood and earthquake providing that all earthquake, storm and flood, riot, civil commotion and malicious damage occurring within seventy two (72) consecutive hours is deemed to be one event for the purpose of determining the insurers' liability;

(p) a clause providing for damage by operator error;

(q) a clause providing for the difference in conditions and difference in limits cover for leased premises providing that in respect of any buildings leased by an Insured Party as lessor or lessee the policy shall apply to the extent that an indemnity is not provided by any other more specific insurance on any such policy;

(r) a clause providing for damage consequent upon a date recognition failure;

(s) a clause providing for insurance for any item of property not declared to insurers due to any unintentional or inadvertent omission of an Insured Party;

(t) a clause providing that an Insured Party's claim shall not be invalidated by any act, error or omission of another Insured Party;

(u) a clause providing for the reinstatement of landscaping features; and

(v) a clause providing for the costs and expenses incurred in investigating and identifying any cause of damage and identifying the location of such cause.

Principal Exclusions

1.7 The following exclusions shall apply: (a) war;

(b) nuclear fuel waste, assembly or components;

(c) inherent vice, vermin, latent defects, wear and tear, gradual deterioration, defective workmanship, or rust but this exclusion shall not exclude ensuing loss, destruction or damage not otherwise excluded;

(d) pollution or contamination except as a result of malicious act or of terrorism, fire, spontaneous combustion, lightning, aircraft, aerial devices, explosion, riot, civil commotion, strikers, locked out workers, earthquake, subterranean fire, storm, tempest, flood, escape of water from any tank, pipes or apparatus, leakage from any sprinkler or other extinguishing system or impact by vehicles including rolling stock or animal;

(e) changes in the water table;

(f) normal settlement;

(g) inventory losses revealed or found during normal stock taking or inventory checking where the loss cannot be traced to a specified insured event;

(h) motor vehicles licensed for road use whilst in circumstances requiring Road Traffic Act insurance; and

(i) losses to the extent that such losses are required to be more specifically insured under Contract Works Insurance.

PART B - Third party liability

Insured

2.1 The Third Party Liability Insurance shall insure the Insured Parties provided that for any finance party who is providing finance to an Infraco for the purpose of the PPP the Third Party Liability Insurance shall cover its interests in the PPP as finance party to an Infraco only.

Interest Insured

2.2 The Third Party Liability Insurance shall indemnify the Insured Parties against all sums which any Insured Party shall become legally liable to pay in respect of or consequent upon death or injury suffered by any person, or loss of or damage to property of any person occurring during the period of the insurance.

Limits of Liability

2.3 The limit of liability to be insured shall not be less than £200,000,000 arising from any one occurrence or series of occurrences arising out of any one source or original cause, except in respect of products and pollution liabilities which shall be in the aggregate in any twelve (12) month period of insurance.

Territorial limits

2.4 World-wide.

Jurisdiction

2.5 World-wide.

Conditions

2.6 The Third Party Liability Insurance shall contain the following clauses or extensions of cover: (a) personal injury ( including false arrest, false imprisonment, invasion of the right of privacy, wrongful detention, wrongful eviction, unlawful discrimination, mental anguish, nervous shock, libel, slander and defamation );

(b) property damage ( including trespass, nuisance, interference with the right of light, or way or water or easement and breach of copyright );

(c) contractual liability extension ( as, for the avoidance of doubt, an inclusion );

(cA) an extension for the minimum SRA wording set out below and no bar on Contracts ( Rights of Third Parties ) Act 1999 rights to the extent that benefits are given to contractors and subcontractors:
"The Company ( Insurers ) will indemnify any Contractor or Sub-Contractor employed for the benefit of the Insured in the course of the Insured's Business:
(a) In respect of liability which is not the subject of indemnity under any more specific valid and collectable insurance effected by or on behalf of the Contractor and or Sub-Contractor.

(b) in respect of the difference between the Limit of Indemnity under any more specific valid and collectable insurance offered by or on behalf of the Contractor and or Sub-Contractor and the Limit of Indemnity under this policy."
(d) contingent motor vehicle liability;

(e) liability arising under the Defective Premises Act 1972;

(f) cross liability;

(g) liability arising from sudden accidental and unexpected pollution; and

(h) a clause providing that an Insured Party's claim shall not be invalidated by any act, error or omission of another Insured Party.

Deductible

2.7 The Third Party Liability Insurance shall have an uninsured deductible of not less than the Third Party Mandatory Deductible arising from any one occurrence or series of occurrences arising out of any one source or original cause.

Principal Exclusions

2.8 The following exclusions shall apply: (a) liability arising from technical or professional advice plan or specification given for a fee. However, liability in respect of bodily injury or damage to property arising out of such technical or professional advice, plan or specification shall not be excluded;

(b) liability for liquidated damages, fines or penalties;

(c) liability arising out of the use of motor vehicles licensed for road use not being used as a tool of trade at any premises of an Insured Party or on any site of any contract where an Insured Party is working;

(d) pollution or contamination unless caused by a sudden accidental and unexpected incident;

(e) liability arising out of the ownership possession or use by or on behalf of an Insured Party of any aircraft, hovercraft or water borne craft exceeding seven (7) metres in length;

(f) liability for loss, destruction or damage to property owned by an Insured Party or in its care, custody or control except that this exclusion shall not apply to employees' own property, passenger or visitors' property, premises temporarily occupied by an Insured Party in the course of its business, any premises leased hired or rented to an Insured Party provided that the liability does not arise from an express term of any contract unless the liability would have existed notwithstanding such contract term;

(g) any consequence of war, invasion, act of foreign enemy, hostilities ( whether war be declared or not ), civil war, rebellion, revolution, insurrection or military or usurped power;

(h) loss of or damage to any property whatsoever or any loss or expense whatsoever resulting therefrom or any consequential loss or any legal liability of whatsoever nature directly or indirectly caused by or contributed to by or arising from ionising any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel or from radioactive toxic explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof; and

(i) liability required to be insured under an Employers' Liability Insurance.

PPP Contracts

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