PPP Contracts

SCHEDULE 1.9 - The Statutory Arbiter and Reviews

Part 1: The Statutory Arbiter

Part 2: Periodic Review

Part 3: Extraordinary Review

Part 4: Other Matters

Annexes

Annex 1: Definitions

Annex 2: Guidance to the Statutory Arbiter

Annex 3: Fixed Amounts

Annex 4: Eligible Equity subscribed by LUL

Annex 5: Baseline for Net Adverse Effects

Part 1: The Statutory Arbiter

1. Statutory Arbiter's jurisdiction

Agreed jurisdiction

1.1 The parties agree that: (a) either of them may:
(i) at any time and from time to time during a Review Process ( or at any time where relevant in connection with an actual or potential Extraordinary Review, subsequent Periodic Review or application pursuant to paragraph 1.9(a)) refer any of the matters referred to in sub paragraphs 1.2 to 1.10 below to the Statutory Arbiter for direction pursuant to section 229 of the GLA Act; or

(ii) at any time and from time to time, refer any of the matters referred to in sub-paragraphs 1.2 to 1.10 below to the Statutory Arbiter for guidance pursuant to section 230 of the GLA Act;
(b) any matter that may be referred to the Statutory Arbiter shall not be referred to the Dispute Resolution Agreement, save to the extent that either express contrary provision is made or the matter relates to a failure by either party to comply with any direction which takes effect as a term of the contract issued by the Statutory Arbiter.

Form and structure of review

1.2 This paragraph refers to the form and structure of the way in which ( or any aspect of the way in which ) the parties should proceed concerning a Periodic Review or an Extraordinary Review to give effect to and facilitate the intent of Part 2 or Part 3 of Schedule 1.9 including ( without limitation ): (a) information to be exchanged between the parties including provision for LUL to revise its Affordability Constraints;

(b) following any direction as to financing impossibility pursuant to paragraph 1.4 (a) below;

(c) in relation to obtaining a current credit rating for Infraco as contemplated by paragraph 6.3, the procedure for a joint application by the parties for a credit rating and information to be supplied to credit rating agencies;

(d) procedures in relation to any election that LUL may make pursuant to paragraph 4.2(b) below;

(e) procedures for iterations that enable the LUL Options to be utilised in refining the balance between Restated Terms, Affordability Constraints and financing constraints in a manner that makes provision for LUL to propose and Infraco to respond by service of notices equivalent to those required pursuant to paragraphs 2 and 3 in respect of the Restated Terms and Affordability Constraints as originally proposed;

(f) in relation to any aspect of the appointment or role of the financial advisor referred to in paragraphs 6, 9 and 11 below;

(g) the dates that are to be the End Date and the Last Financing Date ;

(h) any contention that it would be advantageous for:
(i) the Review Process to continue beyond the Review Date; and/or

(ii) to revise the End Date; and/or

( iii ) to revise the Last Financing Date ( subject to the limits in the definition of that term );
(i) following any direction confirming that there has been a material adverse change and/or temporary market disruption which has prevented Infraco procuring the Required Finance prior to the Last Financing Date;

(j) in relation to an Extraordinary Review, the timetable to which the parties should provide one another with the notices that are equivalent ( mutatis mutandis ) to those that are required pursuant to paragraphs 2 and 3 below; and

(k) procedures to take account ( for the purposes of giving or amending any direction pursuant to paragraph 1.5 below ) of any information received by Infraco in relation to the price and/or terms on which Infraco is able to procure the provision of Rolling Stock on the Northern Line in LUL NL Circumstances ( as such term is defined in paragraph 21 of Part 3 of this Schedule 1.9 ).

Base finance, risk and eligible finance

1.3 This paragraph refers to any contention by Infraco that:- (a) Base Finance is required at a Periodic Review; and/or

(b) new or varied obligations contained in the Restated Terms proposed by LUL at a Periodic Review or at an Extraordinary Review ( which for the avoidance of doubt shall include the variation of any of the limits and cover ( including deductibles ) of insurance in accordance with paragraph 4 of Schedule 5.19 ( Insurance ) of the Contract and/or clause 10.1 of the Insurance Agreement ) or the Affordability Constraints: (i) involve an increase in risk ( including but not limited to an increase in technical risk in meeting the Restated Terms ( and regardless of any costs or contingencies in respect thereof taken into account pursuant to paragraph 7 ) and including also an increase in risk of non-payment by LUL resulting from a change in the payment profile that LUL may specify as part of the Restated Terms ) for Infraco that is material in the context of Infraco's overall activities pursuant to the Contract or in the context of the risk of failure to pay ISC; and/or

(ii) are such that a Notional Infraco would require Eligible Finance for performance of the Restated Terms from the Review Date.

Eligible and Base Equity Options

1.3A This paragraph refers to any contention:- (a) by LUL that it ought to be permitted to exercise an option in the terms of paragraph 8.3 or paragraph 9.4 (d) and Annex 4 to subscribe or procure subscribers for any amounts of Eligible Equity or Base Equity that the parties have agreed or the Statutory Arbiter has directed pursuant to paragraph 1.5 is required and in respect of which either Infraco has elected pursuant to paragraph 8.2 not to procure subscribers or in respect of which the financial adviser referred to in paragraph 9 has advised that he is not reasonably confident that Infraco has the requisite financing ability;

(b) by either party as to division, if any, of the amounts to be subscribed pursuant to any such option into equity and shareholder subordinated debt components;

(c) by either party as to the steps that each or either of them are to take so as to enable the options referred to in paragraph (a) above to be exercised and the subscriptions to be made and received as contemplated by the relevant provisions of this schedule 1.9.

1.3B This paragraph refers to any contention by LUL that it ought to be permitted to exercise an option in the terms of paragraph 9.4(e) to attach an economic return to the Special Share.

Financing Impossibility

1.4 This paragraph refers to any contention:- (a) by Infraco in its notice pursuant to paragraph 3.1(a) below that a Notional Infraco would be incapable of financing performance of the Restated Terms on any basis;

(b) at any time after the Advice Date and prior to the Last Financing Date, that a Notional Infraco with the ISC agreed or directed pursuant to paragraph 1.5 would be incapable of procuring the Required Finance for any reason ( including concerning the credit rating of Transport for London ) other than a reason to which paragraph 1.4(c) relates; and

(c) at any time after the date on which the ISC is agreed or directed pursuant to paragraph 1.5, that a Notional Infraco with that ISC would be incapable of procuring the Required Finance due to a subsequent material adverse change or due to temporary market disruption.

Required Finance

1.4A This paragraph refers to any contention as to: (a) the amount or any other characteristics of Required Finance; and

(b) the amount of any finance required for standby or liquidity facilities or for the purposes of financing Net Adverse Effects less than the Materiality Threshold as it would be prudent for a Notional Infraco to have.

ISC requirements

1.5 This paragraph refers to:

(a) the best estimate ( that is, the most likely outcome ) of amounts and times of payment and receipt of each of the cashflows:

(i) as referred to in paragraph 7 below; or

(ii) as subsequently adjusted pursuant to the exercise of an LUL Option referred to in paragraph 9 below,

on the basis ( in relation to paragraph 7.2(b)) that the aggregate of all the amounts allowed in respect of the operating and capital costs of a Notional Infraco after the Review Date shall be the best estimate of such amounts as would be agreed to by a Notional Infraco when entering into a contract after a competitive tendering process in respect of the relevant activities having regard to:

(x) the risks associated with individual activities ( including the risk of cost overruns and ISC Adjustments );

(y) the risk that a Notional Infraco may have to undertake activities which it has not expected to have to carry out; and

(z) the probability that in the management of a portfolio of activities, the actual cost of some individual activities will exceed the costs allowed, and the actual costs of other individual activities will be less than the costs allowed;
(b) the ISC to be paid by LUL from the next Review Date on the basis set out in paragraph 7.4 below and such that the negative cashflows ( as directed pursuant to paragraph (a) above ) are funded by the positive cashflows ( as directed pursuant to paragraph (a) above ) without the need to draw on other finance. Such ISC to be stated:

(i) in semi-annual periods in the form set out in Appendix 1 ( Underlying ISC and Aggregated Usage Projections ) of Schedule 4.1 of the PPP Contract;

(ii) in such amounts as to take into account that indexation will be applied to those amounts in accordance with Schedule 4.2; and

( iii ) separately identifying in respect of each such semi-annual period the aggregate Fixed Amounts for that period used by the Arbiter in the cashflows referred to in paragraph 7 as adjusted to take into account that indexation will be applied to those amounts in accordance with Schedule 4.2;
(c) a statement of the amounts allowed by way of fixed amounts and the timing of their payment in respect of any Base Finance, and/or Eligible Finance as the Statutory Arbiter may have directed in the current Review is required pursuant to this paragraph and paragraph 7 below, in the form of a revised version of Annex 3 of this Schedule 1.9 ( Fixed Amounts ) as new terms of the Contract pursuant to section 229(4) of the GLA Act;

(d) a statement of the value of RPIX applicable to the relevant Contract Year which has been used to state the ISC in accordance with paragraph 1.5(b).

Equity Rate of Return

1.6 This paragraph refers to any contention that the Equity Rate of Return in respect of any Base Equity or Eligible Equity ought to be adjusted to a higher or lower rate of return to allow for: (a) any change to the general perception of Infraco's risk in carrying out its original requirements under the Contract, to the extent any perceived increase or decrease in risk is not provided for in the operating or capital costs taken into account pursuant to paragraph 7 in particular having regard to the extent to which that change in the perception of risk may be reflected in contingent obligations imposed on those providing Base Equity or Eligible Equity to invest further sums in the Infraco which will not be remunerated other than by way of the fixed amounts allowed in respect of the Equity Rate of Return;

(b) any change to the risk that Infraco will be carrying in its future performance of the Contract as a result of the Restated Terms, to the extent that any perceived increase or decrease in risk is not provided for in the operating or capital costs taken into account pursuant to paragraph 7, in particular having regard to the extent to which that change in the perception of risk may be reflected in contingent obligations imposed on those providing Base Equity or Eligible Equity to invest further sums in the Infraco which will not be remunerated other than by way of the fixed amounts allowed in respect of the Equity Rate of Return;

(c) any change in the consensus view of the market risk premium over the appropriate risk free rate between the premium as at the Transfer Date ( which is agreed to be 4.4 per cent. being the simple average value of the most recently quoted views of London Business School and Barclays Capital expressed to one decimal place ) and the premium on the Review Date;

(d) any change in the appropriate risk free rate ( that is, a change in the gross yield to redemption on UK Government gilt edged stock of a maturity matching the remaining period of the contract, between the yield as at the Transfer Date ( which is agreed to be 4.491 per cent. when expressed to three decimal places ) and the yield on the Review Date ); and

(e) any material difference in the proportions of debt and equity components of Eligible Finance as compared to existing finance. PROVIDED THAT the Equity Rate of Return for equity and Shareholder Subordinated Debt referred to in paragraph (a) of the definition of Equity Rate of Return shall, when expressed to one decimal place, be 26.0 per cent. and that rate of return and any other Equity Rate of Return directed by the Statutory Arbiter pursuant to this paragraph shall in respect of the corresponding equity and Shareholder Subordinated Debt all be rates of return incorporated into this Agreement for the purposes of Section 231(4) of the GLA Act.

Prior Net Adverse Effect

1.7 This paragraph refers to: (a) whether Infraco incurred Net Adverse Effects during the last Review Period in excess of the Materiality Threshold which have not been compensated pursuant to an Extraordinary Review; and

(b) where the Statutory Arbiter has directed in terms of sub-paragraph (a) above, the amount and timing of any adjustments to the level of ISC or other payments to be made to compensate Infraco in respect of that excess.

Interim ISC

1.8 This paragraph refers to an interim level of ISC that would be sufficient to enable a Notional Infraco to perform its existing obligations: (a) in relation to a Periodic Review, pending the Restated Terms taking effect pursuant to paragraph 5.5 below where this has not occurred prior to the Review Date; and

(b) in relation to an Extraordinary Review, pending any direction pursuant to paragraph 1.9(b) below.

Extraordinary Review

1.9 This paragraph refers to:

(a) the amount of Net Adverse Effects which Infraco has incurred or will incur upon any contention being made by Infraco that it has incurred ( or facts subsist as a result of which it will incur ) a Net Adverse Effect in excess of £50 million or any integral multiple of £50 million provided that references to £50 million in this paragraph are not subject to indexation pursuant to Schedule 4.2 ( Indexation ) of the Contract;

(b) any reasonable request for ancillary directions to enable factual findings relevant to a direction pursuant to paragraph (a) above to be final, so as to avoid reconsideration if later directions are sought ( under this paragraph or paragraph 1.7 ) about Net Adverse Effects;

(c) any contention by Infraco that it has incurred or will incur Net Adverse Effects during the Review Period in excess of the Materiality Threshold;

(d) where the Statutory Arbiter has directed in terms of sub paragraph (c) above ( or, in relation to sub paragraph (i) below only, where any Extraordinary Review is instigated by LUL pursuant to paragraph 16 below or clause 40.3(d) ( LUL Breaches ) of the Contract ), the amount and timing of any adjustments to the level of ISC sufficient for a Notional Infraco:

(i) properly to perform its contractual obligations during the remainder of the current Review Period; and

(ii) to avoid the need for Infraco to finance any Net Adverse Effect during the then current Review Period as a whole that is in excess of the Materiality Threshold;
(e) any contention by Infraco as to restrictions on the scope of contract changes that LUL may propose so as to limit these:

(i) ( in relation to an Extraordinary Review instigated by LUL pursuant to paragraph 16 below ) to ones designed to address shortfalls in contract performance that LUL has experienced and to enable LUL to finance any costs of those changes; or

(ii) ( in relation to an Extraordinary Review instigated by LUL pursuant to clause 40.3(d) ( LUL Breaches ) of the Contract ) to ones designed to remedy the impossibility referred to in that clause; or

( iii ) ( in relation to an Extraordinary Review instigated by Infraco ) to ones designed to address affordability considerations raised by the need for LUL to finance Net Adverse Effects in excess of the Materiality Threshold;
(f) any contention by LUL, where it has served a Warning Notice in relation to circumstances primarily attributable to matters that are the subject of an earlier notice by Infraco pursuant to paragraph 14 ( Extraordinary Review ), that it is unlikely that any direction pursuant to sub paragraph (c) above will materially further increase the resources available to Infraco to respond to the Warning Notice over and above those already made available pursuant to paragraph 1.8(b); and

(g) any ancillary direction as to the form and content of the next Periodic Review that may be necessary or desirable to prevent inappropriate double counting of items in both Reviews which by their nature should be taken into account in one review only.

To avoid doubt, the intention of the parties is that any Upfront Benefit, Over Time Benefit or LUL's entitlement to an amount of Benefit accruing from a Refinancing other than the Initial Refinancing shall be calculated and made available to LUL in accordance with the provisions of clause 31.6 of the PPP Contract as an adjustment to the ISC ( with such adjustment to the ISC being dealt with in accordance with clause 18 of the PPP Contract ) and shall be disregarded for the purposes of this paragraph 1.9.

Exercise of Special Share Rights

1.10 This paragraph refers to:

1.10(a) any contention by Infraco that an exercise of the Special Share Rights by giving consent to a specific action for which the Special Shareholder's consent is required would enable Infraco to pay to its shareholders or Sponsors amounts that are lawfully distributable by it while also leaving it, after the action had been made, with adequate resources available to perform properly its activities under the Contract and that such consent should therefore be given;

1.10(b) any resolutions of Infraco to make such changes ( if any ) to the terms of the Special Share Rights as may be reasonably necessary to give effect to any direction pursuant to paragraph (a) above; and

1.10(c) any resolutions of Infraco to make such changes ( if any ) to the terms of the Special Share Rights as may be reasonably necessary to give effect to distributions that may be made to Base Equity or Eligible Equity subscribed in a subsequent Review Period.

1.10(d) for the purpose of this paragraph 1.10:

Special Share Rights means, save as provided below, the right of the Special Shareholder, pursuant to the Articles of Association of the Infraco, to require that its consent be obtained prior to Infraco releasing any uncalled equity commitments or undrawn Shareholder Subordinated Debt commitments or making any distribution of equity or any payment or repayment in respect of Shareholder Subordinated Debt: (a) in any particular year during the period of four (4) years immediately following the Transfer Date, which, if released, distributed, paid or repaid during that year would, when aggregated with:
(i) all other such acts during that year;

(ii) all such acts during that year of any Finance Obligor, provided that this paragraph shall only apply to the extent that such amounts (A) are not, or have not been, included in any other amounts referred to in this sub-paragraph (a) or are not derived from any such amount and (B) arise from the performance of the Infraco Obligations under the Transaction Documents;

( iii ) all payments, loans, contractual arrangements or transfers of assets or rights made by Infraco to any Sponsor, whether directly or indirectly including where such payments, loans, arrangements or transfers are made to a third party and subsequently received by a Sponsor from a third party, during that year to the extent ( in each case ) it was put in place after the Transfer Date and was neither in the ordinary course of business nor on reasonable commercial terms; and

(iv) receipt of any other benefit by any Sponsor, whether directly or indirectly, from Infraco during that year which is not received in the ordinary course of business and not on reasonable commercial terms,
exceed the agreed maximum aggregate amount to be distributed to equity providers or to be paid or repaid to providers of Shareholder Subordinated Debt for that year as set out in the Articles of Association of the Infraco; or

(b) during a particular Review Period, which, if released, distributed, paid or repaid during that Review Period would, when aggregated with:
(i) all other such acts during that Review Period;

(ii) all such acts during that Review Period of any Finance Obligor, provided that this paragraph shall only apply to the extent that such amounts (A) are not, or have not been, included in any other amounts referred to in this sub-paragraph (b) or are not derived from any such amount and (B) arise from the performance of the Infraco Obligations under the Transaction Documents;

( iii ) all payments, loans, contractual arrangements or transfers of assets or rights made by Infraco to any Sponsor, whether directly or indirectly including where such payments, loans, arrangements or transfers are made to a third party and subsequently received by a Sponsor from a third party, during that Review Period to the extent ( in each case ) it was put in place after the Transfer Date and was neither in the ordinary course of business nor on reasonable commercial terms; and

(iv) receipt of any other benefit by any Sponsor, whether directly or indirectly, from Infraco during that Review Period which is not received in the ordinary course of business and not on reasonable commercial terms,
exceed the agreed maximum aggregate amount to be distributed to equity providers or to be paid or repaid to providers of Shareholder Subordinated Debt for that Review Period, as set out in the Articles of Association of Infraco, by a sum greater than £13,500,000 being the amount which is equal to ten per cent ( 10% ) of the aggregate of the fully paid up or unconditionally committed share capital of Infraco and the advanced or unconditionally committed Shareholder Subordinated Debt as at the Transfer Date to be adjusted to take account of any Base Equity or Eligible Equity, PROVIDED THAT to the extent Infraco has received equity contributions or Shareholder Subordinated Debt or commitments in respect of the same in excess of £135,000,000, the consent of the Special Shareholder shall not be required for Infraco to release any such commitment or to make any distribution, payment or repayment up to the amount of such additional equity or Shareholder Subordinated Debt;

Part 2: Periodic Reviews

2. LUL's periodic review notice

Timing and content

2.1 LUL shall serve Infraco with notice in writing at least eighteen months before a Review Date setting out: (a) the Restated Terms including the profile for payments of the ISC to be taken into account pursuant to paragraph 7.4; and

(b) its Affordability Constraints.

Limitations

2.2 The Restated Terms shall: (a) be within the scope of the Key Objectives and the General Purposes;

(b) not include changes to any of the General Purposes, any of clauses 1 ( Key Objectives ), 3 ( Contract Period ), 4.2 ( Infrastructure Services ), 16.1, 16.5 and 16.7 ( Co-operation ), 16.8 ( LUL Breach of Safety Case ) 18.5-18.10 ( Disputed Amounts ) 18.17 ( Interest on Late Payment ) 18.18 ( Payment Deductions ) 21 ( Indexation ), 23.1 and 23.9 ( Step-in ), 24.12 and 24.13 ( Consequential Loss ), 27 and Schedule 1.9 ( Review ), 32 ( Change of Infraco control ), 33 ( Change of LUL control ) 35.6-7 ( Environmental Risks ), 37.8-9 ( IPR Licences ), 40 ( Default ), 41 ( Contract Disposition ), 42.3 ( Payment on Expiry ), 44.3 ( Compensation ), 46 ( Corrupt Gifts and Safety Breach ), 49 ( Dispute Resolution ), 50 ( Claims ), 52 ( Acceptance of Network Conditions and Terms ), 53 ( Tax ), 54 ( Survival ), 57 ( Assignment and Variations ), 62 ( Entire Agreement ), 67 ( Governing Law and Jurisdiction ), paragraph 1.2 of Schedule 5.9 ( Key System Assets ), Schedule 5.16 ( Contract Disposition Agreement ) of the Contract and any other provisions of the Transaction Documents ( including terms defined in the Master Definitions Agreement ) the effect of which would be to cause a material change to the commercial arrangements established by the clauses referred to above;

(c) be technically achievable;

(d) where they stipulate fixed times for performance of any new or varied obligations, do so by reference to the effective date for the Restated Terms and not by reference to fixed calendar dates;

(e) not contain any Major Enhancements other than Station Control Room Projects and/or Additional Staff Accommodation the capital cost of which would either on its own exceed fifty million pounds ( £50,000,000 ) or which would in aggregate with other such projects proposed in the Restated Terms exceed two hundred million pounds ( £200,000,000 ) in the following Review Period provided that this shall not prohibit LUL from proposing that such projects be carried out pursuant to the Major Enhancement Agreement; and

(f) in stipulating any payment profile for the ISC with effect from the Review Date, have due regard to doing so in a way that would enable a Notional Infraco to maintain its cover ratios.

Failure to serve and consequences

2.3 In the event that LUL does not serve any such notice, Infraco shall put LUL on notice, in writing referring to this paragraph and addressed to LUL's Chief Executive, of that fact and if LUL has not served its notice within ten (10) Business Days thereafter LUL shall be deemed to have served a notice to the effect that the then subsisting contractual terms shall be the Restated Terms in respect of that Review Date.

3. Infraco response

Timing and subject

3.1 Following the serving of a notice pursuant to paragraph 2.1 or the deemed serving of a notice pursuant to paragraph 2.3 above, Infraco shall serve a written notice on LUL at least twelve months before the Review Date, setting out: (a) whether it contends that a Notional Infraco would be incapable of financing performance of the Restated Terms on any basis;

(b) whether it disputes that the Restated Terms, or any of them, comply with paragraph 2.2 and, if it does, in what specific respects and what changes are required in order to produce compliance;

(c) whether it contends that a Notional Infraco would require Base Finance;

(d) whether it contends that new or varied obligations in the Restated Terms:
(i) involve an increase in risk for Infraco that is material in the manner referred to in
paragraph 1.3 above; and/or

(ii) are such that a Notional Infraco would require Eligible Debt and/or Eligible Equity for performance of the Restated Terms and, if so, in what amounts; and
(e) the level of ISC it proposes for efficient and economic performance in accordance with Good Industry Practice of the Restated Terms from the Review Date, disregarding the need to comply with any that it states do not comply with paragraph 2.2.

Failure to serve and consequences

3.2 If Infraco does not serve any notice pursuant to paragraph 3.1 above, LUL shall put Infraco on notice, in writing referring to this paragraph and addressed to Infraco's Chief Executive, of that fact and if Infraco has not served its notice within ten (10) Business Days thereafter Infraco shall be deemed to have served a notice to the effect that it accepts that the Restated Terms comply with paragraph 2.2 in all respects and that it proposes that the level of ISC shall continue in accordance with the existing terms of the Contract.

4. Disputed LUL notice

4.1 If Infraco contends pursuant to paragraph 3.1(a) that a Notional Infraco would be incapable of financing on any basis the continued and future performance of the Restated Terms, either party may refer that matter to the Statutory Arbiter for his direction. In the event that the Statutory Arbiter directs that the contention is correct LUL shall within such further period as the Statutory Arbiter may direct provide further Restated Terms which do not include the terms directed to have had the effect that the contention is correct and paragraphs 2.2, 2.3 and 3 shall apply subject to any agreement between the parties, or in default of agreement to any directions made by the Statutory Arbiter, with regard to the time at which the steps referred to in such paragraphs shall be taken.

4.2 If Infraco disputes that LUL's notice pursuant to paragraph 2.1 above or pursuant to exercise by LUL of an LUL Option complies with paragraph 2.2 then: (a) the dispute shall be resolved in accordance with the Dispute Resolution Agreement and may not be referred for resolution to the Statutory Arbiter, save in relation to any dispute as to whether LUL has had due regard in the manner required pursuant to paragraph 2.2(f) above, which may only be referred to the Statutory Arbiter for a direction either that:
(i) LUL has had due regard in the manner required pursuant to paragraph 2.2(f), in which case the stipulated payment profile is to stand; or

(ii) that LUL has not had due regard in the manner required pursuant to paragraph 2.2(f) and that LUL shall reconsider and restate the Restated Terms in a manner that does have due regard as required pursuant to paragraph 2.2(f) and paragraphs 2.2, 2.3 and 3 shall apply subject to any agreement between the parties, or in default of agreement to any directions made by the Statutory Arbiter, with regard to the time at which the steps referred to in such paragraphs shall be taken; and
(b) LUL may elect to proceed with any reference to the Statutory Arbiter with the Restated Terms modified so as to exclude the terms in dispute and/or so as to substitute others for them and may also, when the dispute is agreed or finally determined, introduce into the Review Process the disputed terms ( if agreed or upheld ) and/or compliant substitutes for any of them ( and the Review Process shall not be regarded as complete until the dispute is finally determined and LUL has had a reasonable opportunity to do so ).

5. Discussions and effectiveness of restated terms

5.1 The parties agree to discuss their respective notices with one another in good faith with the objective of agreeing the level of ISC for the Restated Terms.

5.2 If either party believes that these discussions are not progressing with suitable priority and the other party does not address this satisfactorily in response to a written request to do so, then the first party may invoke dispute resolution, as a means of securing due priority, in accordance with clause 5.3 below.

5.3 A party, by giving notice in writing to the other party, may refer its own contention as to the operating and capital costs of a Notional Infraco after the Review Date ( as referred to in paragraph 7.2( a/b ) and (b) below ) for consideration under the Dispute Resolution Agreement, on the basis that it is to be considered directly by the Senior Representatives and may be referred to ( but not beyond ) the Adjudicator.

5.4 Any decision of an Adjudicator, in respect of the matters referred to in paragraph 5.3, is not to be dispositive but it, together with any statement of reasons given in accordance with clause 4.8 of the Dispute Resolution Agreement, shall be provided to the Statutory Arbiter along with any relevant information provided to the Adjudicator and/or a transcript of proceedings before him.

5.5 The Restated Terms shall have effect between the parties on the latest of:- (a) the Review Date;

(b) at the start of the first Payment Period in respect of which the level of ISC as agreed between the parties or directed by the Statutory Arbiter is payable; and

(c) on procurement of the Required Finance by Infraco in circumstances where the parties agree or the Statutory Arbiter directs that: -
(i) Base Finance or Eligible Finance is required; or

(ii) there has been a material change in risk within the terms of paragraph 1.3 and any of the existing Funders require to be refinanced.

5.6 The Contract shall ( apart from any direction about interim ISC pursuant to paragraph 1.8 above ) continue in accordance with its existing terms until then.

6. Guidance to the Statutory Arbiter

General

6.1 This paragraph 6 and Annex 2 to this Schedule 1.9 sets out guidance that LUL and Infraco jointly give to the Statutory Arbiter pursuant to section 231(6) of the GLA Act. The guidance set out in this paragraph 6 and in Annex 2 has equal status.

Transparency

6.2 LUL and Infraco attach great weight to the Statutory Arbiter following open and transparent procedures in determining what directions to give on any matters that are referred to him in connection with a Periodic Review or in connection with an actual or potential Extraordinary Review and, in particular, to: (a) both parties being notified of any matters referred to him and of the general process that he intends to adopt in dealing with them;

(b) LUL, Infraco and their respective stakeholders ( including, in the case of LUL, its holding company, Transport for London, the Mayor and any Minister and in the case of Infraco, direct and indirect providers of equity and debt finance ) being invited to submit representations to the Statutory Arbiter on these matters and having access to the representations submitted by others;

(c) the Statutory Arbiter taking expert advice on matters where he would be better informed by expert opinion and making available to the parties and their stakeholders the terms of reference of the advisors and an informative summary of their advice;

(d) the Statutory Arbiter providing the parties and their stakeholders with provisional conclusions on matters referred to him, with summaries of the arguments made to him in relation to those matters and the reasons in support of the conclusions provisionally reached;

(e) LUL, Infraco and their stakeholders being invited to submit representations to the Statutory Arbiter on the provisional conclusions and having access to the representations submitted by others; and

(f) the issue of final conclusions taking into account the representations received.

Credit rating

6.3 LUL and Infraco attach great weight to the Statutory Arbiter having regard to the desirability, from the point of view of maintaining Infraco's ability to finance contract performance by borrowings in the debt finance market, of Infraco having a credit rating at the end of a Periodic Review not less than the lower of its credit rating at the Transfer Date, and its credit rating immediately before the Review Process, it being acknowledged that: (a) the quality and/or quantity of information available to the Statutory Arbiter may be greater than that available to the rating agencies and that the Statutory Arbiter is to be able, in accordance with his statutory duties and any other guidance provided to him, to draw whatever conclusions are supported by information available to him and relevant to his functions; and

(b) the parties intend that the credit rating of Infraco ought not to be adversely affected solely because of new or varied obligations to be assumed by it at a Periodic Review or solely because of the level of the ISC set by the Statutory Arbiter in respect of the efficient and economic costs of performing the Infraco Obligations after the Review Date.

Market advice

6.4 The parties: (a) agree to procure joint advice to the Statutory Arbiter from a financial adviser of international repute in relation to offers of finance likely to be available to Infraco in relevant markets to finance efficient and economic performance in accordance with Good Industry Practice of the Restated Terms from a Review Date ( based on preparation and circulation of an appropriate information memorandum to interested parties containing such information as it is reasonable for the parties to provide and for the recipients to receive in order for the Statutory Arbiter to receive a well founded view of the terms of offers of finance that Infraco may reasonably expect to be able to obtain in those markets ); and

(b) attach great weight to the Statutory Arbiter having due regard to such advice.

Joint guidance

6.5 The parties may by joint notice in writing given pursuant to this paragraph 6.5 provide to the Statutory Arbiter further guidance on any matter relating to the exercise of his functions on which the parties hold a common view.

Form of reference

6.6 The parties may, by agreement referring to this paragraph 6.6 but not otherwise, express the terms of any matter that is referred to the Statutory Arbiter so as to advise him that they do not request or require him to consider any aspect of the matter being referred on which they state they have reached agreement.

7. Cashflows

Relevant cashflows

7.1 The cashflows referred to in this paragraph 7 are the negative cashflows referred to in paragraph 7.2 and the positive cashflows referred to in paragraph 7.3, in each case from the Review Date for the remainder of the Contract Period and disregarding: (a) negative cashflows in respect of matters to the extent covered by insurance and positive cashflows to the extent of insurance receipts;

(b) negative cashflows associated with matters to the extent of any ability of Infraco to recover under any provision in the Transaction Documents and Share Purchase Agreement and the positive cashflows to the extent of those recoveries; and

(c) any negative or positive cashflows in respect of Upfront Benefit, Overtime Benefit or LUL's entitlement to an amount of Benefit accruing from a Refinancing other than the Initial Refinancing.

Negative cashflows

7.2 The negative cashflows are:

(a) the Fixed Amounts and the timing of their payment as set out in Annex 3 of this Schedule 1.9 ( Fixed Amounts );

( a/b ) the operating and capital costs of a Notional Infraco in performing its activities after the first Review Date in respect of assets classified as Grey Assets on the Transfer Date;

(b) the other operating and capital costs of a Notional Infraco of performing its activities after the Review Date: (i) including commitment and arrangement fees and premia ( in respect of financial guarantee policies ) in respect of any liquidity and standby facilities ( including, but not limited to, any facility in relation to Reimbursable Law and Safety Change Costs ) and in respect of the amounts of finance referred to in sub paragraphs (c) and (d) below;

(ii) excluding both VAT or Taxation on, or calculated by reference to, income, profits or gains, subject to sub-paragraph ( iii );

( iii ) including such Taxation as arises as a direct result of a Qualifying Change of Law that is a Discriminatory Change of Tax Law; and

(iv) where the parties agree or the Statutory Arbiter directs pursuant to paragraph 1.3 that there has been an increase in risk as described in paragraph 1.3(b)(i) or that Eligible Finance is required, also including costs and fees associated with any termination or prepayment of existing finance arrangements in addition to the costs and fees associated with putting new finance arrangements in place save to the extent that such amounts may be taken into account in calculating the Refinancing Benefits from any refinancing to which such costs and fees relate.

(c) the amounts to be paid to achieve the Equity Rate of Return as at the Review Date for any Base Equity, and/or Eligible Equity;

(d) the amounts required to pay interest ( including net hedging cashflow ) on and repay the principal amount of any Base Debt and/or Eligible Debt;

(e) the amounts and/or timings of any payments concerning specific activities on which the parties have notified pursuant to paragraph 6.6 their agreement to the Statutory Arbiter ( which amounts, timings and activities are then to be disregarded for purposes of sub-paragraphs (a) to (d) above ); and

(f) Net Adverse Effects incurred during the last Review Period in excess of the Materiality Threshold that have not been compensated previously pursuant to an Extraordinary Review.

Positive cashflows

7.3 The positive cashflows are: (a) the amounts of any Base Finance and/or Eligible Finance;

(b) not used;

(c) the amount of any payment which LUL has stated pursuant to paragraph 2.2 it wishes to make upon expiry of the Contract;

(d) the amount of any increases to be made to the ISC in relation to the Delivery into Service of the Specified Line Upgrades that are not yet Delivered into Service and having a Latest Implementation Date following the Review Date;

(e) the amounts and/or timings of any receipts concerning specific activities on which the parties have notified pursuant to paragraph 6.6 their agreement to the Statutory Arbiter ( which amounts, timings and activities are then to be disregarded for purposes of sub paragraphs (a) to (d) above );

(f) the effect of indexation pursuant to Schedule 4.2 ( Indexation ); and

(g) in respect of the first Periodic Review Date only, an amount receivable on the first day of the Second Review Period equal to fifty per cent. ( 50% ) of the Net Gain accruing to any Sponsor with respect to any direct or indirect transfer of interest in Tube Lines ( Holdings ) Limited to which clause 32.7 ( Change of Control of Infraco ) of the Contract applies together with interest at the Applicable Rate from the date on which the gain arose down to the Review Date.

Profile of periodic payments

7.4 The payment obligation to be assumed by LUL such that the negative cashflows ( as directed pursuant to paragraph 1.5(a)) are funded by the positive cashflows ( as directed pursuant to paragraph 1.5(a)) without the need to draw on other finance is one that requires a payment from LUL to Infraco in each Payment Period from the Review Date or, if later, from the date upon which the Restated Terms take effect pursuant to paragraph 5.5, up to the Expiry Date that is in accordance with the profile for payments that LUL has stated pursuant to paragraphs 2.2 and 4.2 save in respect of any variations in payment attributable to any of the factors referred to in paragraph 7.5.

7.5 The factors referred to in this paragraph are increases in payment attributable to: (a) the amount of any increases to be made to the ISC in relation to the Delivery into Service of the Specified Line Upgrades that are not yet Delivered into Service and having a Latest Implementation Date following the Review Date;

(b) the amount of any payment which LUL has stated pursuant to paragraph 2.1(a) it wishes to make upon expiry of the Contract; and

(c) indexation in accordance with Schedule 4.2 ( Indexation ).

8. Eligible Equity

8.1 This paragraph 8 applies where the parties agree or Statutory Arbiter directs pursuant to paragraph 1.5(c) above that Eligible Equity is required.

8.2 Infraco may elect not to procure subscribers for Eligible Equity by notice to LUL within thirty (30) days of the parties agreeing or the Statutory Arbiter directing pursuant to paragraph 1.5(c) above as to the amount of Eligible Equity and the Equity Rate of Return for the Eligible Equity.

8.3 Where Infraco elects not to procure subscribers for the Eligible Equity, LUL may, subject to a direction from the Statutory Arbiter pursuant to paragraph 1.3A(a) above permitting it to do so, itself elect to subscribe or procure subscribers for such equity on the terms set out in Annex 4. LUL's election is to be made by notice to Infraco within thirty (30) days after service of Infraco's notice pursuant to paragraph 8.2 and any election made is to be on terms that it is subject to LUL later electing to exercise the LUL Options pursuant to paragraph 9 in preference to completing the Eligible Equity subscription.

8.4 LUL may, within thirty (30) days of receipt of Infraco's notice pursuant to paragraph 8.2 above, exercise the LUL Options provided for in paragraph 9.4, in which case the provisions of paragraph 9.5 shall apply in place of the provisions of paragraph 8.5.

8.5 Subject to paragraph 8.4 above, where neither party is willing to commit to the subscription of the Eligible Equity then a Special Mandatory Sale shall be instigated pursuant to clause 41 ( Mandatory Sale ) of the Contract and on the basis set out in paragraph 10.3 below.

9. Financing

9.1 This paragraph applies where the Statutory Arbiter has directed pursuant to paragraph 1.5(c) above that Base Finance is required and/or that new or varied obligations contained in the Restated Terms: (a) involve an increase in risk for Infraco that is material in the context of Infraco's overall activities pursuant to the Contract; and/or

(b) are such that a Notional Infraco would require Eligible Finance for performance of the Restated Terms from the Review Date.

9.2 Where this paragraph applies:

(a) the parties shall obtain joint advice from the financial adviser of international repute retained pursuant to paragraph 6.4 above, as to whether he is reasonably confident that Infraco has the financing ability referred to in sub-paragraph (b) below;

(b) this sub-paragraph refers to Infraco's ability on the basis of the ISC available to it pursuant to any direction by the Statutory Arbiter pursuant to paragraph 1.5(c) above, and any election pursuant to paragraph 8 by LUL or Infraco to procure any Eligible Equity, to procure the Required Finance prior to the Last Financing Date;

(c) the parties shall procure that the advice referred to in sub paragraph (a) above is obtained within thirty (30) days ( the Advice Date ) of the direction referred to in sub paragraph (b) above.

9.2A In the event that at any time after the Advice Date and prior to the Last Financing Date the Statutory Arbiter directs, pursuant to paragraph 1.4(b) or paragraph 1.4(c) above, that a Notional Infraco with the ISC agreed or directed pursuant to paragraph 1.5 would be incapable of procuring the Required Finance for any reason ( including concerning the credit rating of Transport for London ) then: (a) LUL may within thirty (30) days thereafter exercise the LUL Options set out in paragraph 9.4 below; and, subject thereto;

(b) a Special Mandatory Sale shall be instigated pursuant to paragraph 10.3 below.

9.3 LUL may, if the financial adviser has not advised that he is reasonably confident that Infraco has the financing ability referred to in paragraph 9.2(b) above, by notice in writing to Infraco within thirty (30) days after the Advice Date, exercise any one or more of the LUL Options in a manner that is specified in the notice with a view to: (a) addressing any direction of the Statutory Arbiter's as to financing impossibility pursuant to paragraph 1.4(b) above; or

(b) removing any material increase in risk which the Statutory Arbiter has directed results from the Restated Terms pursuant to paragraph 3.1; and/or

(c) removing or reducing the need for Infraco to procure further Eligible Equity and/or Base Equity; and/or

(d) removing or reducing the need for Infraco to procure Eligible Debt and/or Base Debt; and/or

(e) enabling LUL to facilitate Infraco's financing programme by an increase to the ISC in combination with the attachment of an economic return to the Special Share.

9.4 The LUL Options are any one or more of the following: (a) any change to the Restated Terms permitted in accordance with paragraph 2.2; and/or

(b) any change to the Affordability Constraints; and/or

(c) [not used];

(d) any subscription of Base Equity and/or Eligible Equity to Infraco on the terms set out in Annex 4, subject to a direction of the Statutory Arbiter pursuant to paragraph 1.3A(a) above permitting it to do so; and/or

(e) the attachment of an economic return to the Special Share, subject to a direction of the Statutory Arbiter pursuant to paragraph 1.3B above permitting it to do so.

9.5 The parties shall proceed following the service of a notice in relation to the LUL Options pursuant to paragraph 9.3 above in whatever manner they may agree or the Statutory Arbiter may direct pursuant to paragraph 1.2 above.

10. Special Mandatory Sale

10.1 The provisions of this paragraph apply either where they are required to apply in accordance with paragraph 9.2A or where:

(a) the Statutory Arbiter has directed pursuant to paragraph 1.3 above that Base Finance is required and/or that new or varied obligations contained in the Restated Terms:

(i) involve an increase in risk for Infraco that is material in the context of Infraco's overall activities pursuant to the Contract; and/or

(ii) are such that a Notional Infraco would require Eligible Finance for performance of the Restated Terms from the Review Date; and

(b) Infraco is not able to procure the Required Finance prior to the Last Financing Date.

10.2 Where this paragraph applies a Mandatory Sale shall be instigated pursuant to clause 41 ( Mandatory Sale ) of the Contract and on the basis set out in paragraph 10.3 or 10.4 below as the case may be.

10.3 Where any of the factors identified in paragraph 10.5 below are present or the Mandatory Sale is to be instigated as a consequence of paragraph 9.2A a Mandatory Sale shall be instigated pursuant to this paragraph and the Special Mandatory Sale Amount is to mean the sum ( without double counting ), calculated as at the Contract Disposal Calculation Date, of:

(a) the amount of the Approved Debt;

(b) the amount of the Approved Mezzanine Debt;

(c) one of the following amounts, as applicable, which shall not be subject to indexation in accordance with Schedule 4.2 ( Indexation ) of the Contract:

(i) where a Mandatory Sale occurs as a consequence of the first Periodic Review, £310,229,597.00;

(ii) where a Mandatory Sale occurs as a consequence of the second Periodic Review, £337,086,343.00;

( iii ) where a Mandatory Sale occurs as a consequence of the third Periodic Review, £189,477,592.00,

provided that to the extent that additional Eligible Equity and/or Base Equity is subscribed the figures in sub-paragraphs (ii) or ( iii ) will be adjusted to include an additional payment which when added to the expected cashflows to additional equity gives the appropriate blended nominal equity and shareholder loan return over the period invested. Such amount shall be recalculated on each subsequent Periodic Review and shall not be subject to indexation.

(d) any Sellback Costs;

(e) any Reimbursable Law & Safety Change Costs;

(f) any Termination Costs;

(g) to the extent not included in (d) or (e), any Exceptional Amounts, or amounts payable in accordance with Schedule 5.7 ( Non-ISC Invoices ) to the PPP Contracts, either previously agreed with LUL as being due to be paid prior to the Contract Disposal Calculation Date or payable to Infraco under the terms of the Transaction Documents or the Share Purchase Agreement in respect of costs of the Infraco which have not been paid at the Contract Disposal Calculation Date; and

(h) any Administration Costs,

provided that the Special Mandatory Sale Amount calculated pursuant to this paragraph 10.3 shall never be less than the aggregate of the 95% Amount ( the "Base Amount" ) and the best estimate that can be made as at the Contract Disposal Calculation Date of any additional amount in respect of Taxation ( as defined in clause 41.13(b) ( Tax ) ) which would be payable under clause 41.13 by reference to the Base Amount as determined upon the bases and assumptions set out in clause 41.13(d) ( Tax )

10.4 Where none of the factors identified in paragraph 10.5 below are present and the Mandatory Sale is not to be instigated pursuant to paragraph 9.2A the Special Mandatory Sale Amount is to mean, the sum ( without double counting ) of:

(a) the amount of the Approved Debt as at the Contract Disposal Calculation Date less the amount of One Year's Margin;

(b) the higher of:

(i) £65 million, such amount not to be subject to indexation in accordance with Schedule 4.2 ( Indexation ) of the Contract; and

(ii) the value determined under paragraph (a) of the definition of Underpinned Amount less the Approved Debt as at the Contract Disposal Calculation Date; and

provided that, if such amount is higher than the aggregate of the amount of the Approved Mezzanine Debt as at the Contract Disposal Calculation Date and any additional amount in respect of Taxation ( as defined in clause 41.13(b) of the PPP Contract ) which would be payable on the Approved Mezzanine Debt as determined upon the assumptions and bases set out in clause 41.13(d) of the PPP Contract, then the amount payable under this paragraph (ii) shall be the Approved Mezzanine Debt as at the Contract Disposal Calculation Date. Provided also that to the extent that additional Approved Mezzanine Debt is subscribed the figure in sub-paragraph (i) will be adjusted to include an additional payment which when added to the expected cashflows to additional mezzanine would result in the additional mezzanine providers substantially recovering their original investment.

One Year's Margin means in respect of a Contract Year ( or any part of a Contract Year ), the amount calculated as follows:

One Year's Margin = A x B

Where:

A equals the amount of Approved Debt outstanding as at the Contract Disposal Calculation Date and

B equals the figure, expressed as a percentage, which represents the weighted average pre-refinancing margin in respect of the 12 month period ( the "Calculation Period" ) ending on the Contract Disposal Calculation Date. B shall be calculated as follows:

B = ∑₁ⁿ ( x_n /365 ) x WAM_n

Where:

x_n: is the number of days during period n which fall within the Calculation Period

WAM_n is the value for period n taken from the following table

_n is the number of periods spanned by the Calculation Period

Table: One Year's Margin

	ONE YEAR'S MARGIN
Period Start Date	Period End Date	Weighted Average Pre-Refinance Margin( "WAM" )
01-Apr-04	30-Jun-04	0.945 %
01-Jul-04	30-Sep-04	0.951 %
01-Oct-04	31-Dec-04	0.956 %
01-Jan-05	31-Mar-05	0.959 %
01-Apr-05	30-Jun-05	1.061 %
01-Jul-05	30-Sep-05	1.062 %
01-Oct-05	31-Dec-05	1.063 %
01-Jan-06	31-Mar-06	1.064 %
01-Apr-06	30-Jun-06	1.065 %
01-Jul-06	30-Sep-06	1.066 %
01-Oct-06	31-Dec-06	1.066 %
01-Jan-07	31-Mar-07	1.077 %
01-Apr-07	30-Jun-07	1.077 %
01-Jul-07	30-Sep-07	1.077 %
01-Oct-07	31-Dec-07	1.078 %
01-Jan-08	31-Mar-08	1.078 %
01-Apr-08	30-Jun-08	1.078 %
01-Jul-08	30-Sep-08	1.078 %
01-Oct-08	31-Dec-08	1.079 %
01-Jan-09	31-Mar-09	1.079 %
01-Apr-09	30-Jun-09	1.079 %
01-Jul-09	30-Sep-09	1.080 %
01-Oct-09	31-Dec-09	1.079 %
01-Jan-10	31-Mar-10	1.081 %
01-Apr-10	30-Jun-10	1.079 %
01-Jul-10	30-Sep-10	1.079 %
01-Oct-10	31-Dec-10	1.079 %
01-Jan-11	31-Mar-11	1.079 %
01-Apr-11	30-Jun-11	1.080 %
01-Jul-11	30-Sep-11	1.080 %
01-Oct-11	31-Dec-11	1.080 %
01-Jan-12	31-Mar-12	1.080 %
01-Apr-12	30-Jun-12	1.080 %
01-Jul-12	30-Sep-12	1.080 %
01-Oct-12	31-Dec-12	1.081 %
01-Jan-13	31-Mar-13	1.081 %
01-Apr-13	30-Jun-13	1.081 %
01-Jul-13	30-Sep-13	1.081 %
01-Oct-13	31-Dec-13	1.082 %
01-Jan-14	31-Mar-14	1.082 %
01-Apr-14	30-Jun-14	1.083 %
01-Jul-14	30-Sep-14	1.083 %
01-Oct-14	31-Dec-14	1.083 %
01-Jan-15	31-Mar-15	1.083 %
01-Apr-15	30-Jun-15	1.084 %
01-Jul-15	30-Sep-15	1.084 %
01-Oct-15	31-Dec-15	1.085 %
01-Jan-16	31-Mar-16	1.085 %
01-Apr-16	30-Jun-16	1.087 %
01-Jul-16	30-Sep-16	1.087 %
01-Oct-16	31-Dec-16	1.088 %
01-Jan-17	31-Mar-17	1.088 %
01-Apr-17	30-Jun-17	1.089 %
01-Jul-17	30-Sep-17	1.089 %
01-Oct-17	31-Dec-17	1.091 %
01-Jan-18	31-Mar-18	1.091 %
01-Apr-18	30-Jun-18	1.093 %
01-Jul-18	30-Sep-18	1.093 %
01-Oct-18	31-Dec-18	1.096 %
01-Jan-19	31-Mar-19	1.096 %
01-Apr-19	30-Jun-19	1.100 %
01-Jul-19	30-Sep-19	1.100 %
01-Oct-19	31-Dec-19	1.105 %
01-Jan-20	31-Mar-20	1.105 %
01-Apr-20	30-Jun-20	1.110 %
01-Jul-20	30-Sep-20	1.110 %
01-Oct-20	31-Dec-20	1.121 %
01-Jan-21	31-Mar-21	1.121 %
01-Apr-21	30-Jun-21	1.121 %
01-Jul-21	30-Sep-21	1.121 %
01-Oct-21	31-Dec-21	1.121 %
01-Jan-22	31-Mar-22	1.121 %
01-Apr-22	30-Jun-22	1.121 %
01-Jul-22	30-Sep-22	1.121 %
01-Oct-22	31-Dec-22	1.121 %
01-Jan-23	31-Mar-23	1.121 %
01-Apr-23	30-Jun-23	1.121 %
01-Jul-23	30-Sep-23	1.121 %
01-Oct-23	31-Dec-23	1.121 %
01-Jan-24	31-Mar-24	1.121 %
01-Apr-24	30-Jun-24	1.121 %
01-Jul-24	30-Sep-24	1.121 %
01-Oct-24	31-Dec-24	1.121 %
01-Jan-25	31-Mar-25	1.121 %
01-Apr-25	30-Jun-25	1.121 %
01-Jul-25	30-Sep-25	1.121 %
01-Oct-25	31-Dec-25	1.121 %
01-Jan-26	31-Mar-26	1.121 %
01-Apr-26	30-Jun-26	1.121 %
01-Jul-26	30-Sep-26	1.121 %
01-Oct-26	31-Dec-26	1.121 %
01-Jan-27	31-Mar-27	1.121 %
01-Apr-27	30-Jun-27	1.121 %
01-Jul-27	30-Sep-27	1.121 %
01-Oct-27	31-Dec-27	0.000 %

10.5 The factors identified in this paragraph 10.5 are any direction from the Statutory Arbiter that any new or varied obligations contained in the Restated Terms proposed by LUL at a Periodic Review or at an Extraordinary Review or the Affordability Constraints ( including the profile of payments of the ISC to be taken into account pursuant to paragraph 7.4 ) or any amount which LUL has stated pursuant to paragraph 2.2 it wishes to make upon expiry of the Contract: (i) involve an increase in risk ( including but not limited to an increase in technical risk in meeting the Restated Terms and regardless of any costs or contingencies in respect thereof taken into account pursuant to paragraph 7, and including also an increase in risk of non-payment resulting from a change in the payment profile that LUL may specify as part of the Restated Terms ) for Infraco that is material in the context of Infraco's overall activities pursuant to the Contract or in the context of the risk of failure to pay ISC; and/or

(ii) are such that a Notional Infraco would require Eligible Finance for performance of the Restated Terms from the Review Date.

11. Miscellaneous

11.1 A Mandatory Sale for a Special Mandatory Sale Amount may not be implemented prior to the End Date unless LUL elects to do so in preference to exercising any one or more of the LUL Options.

11.2 The circumstances referred to in paragraphs 8.5, 9 and 10 are the only circumstances in which a Mandatory Sale for a Special Mandatory Sale Amount may be instigated.

[Paragraphs 12 and 13 are not used]

Part 3 : Extraordinary Review

Infraco's notice

14 If Infraco reasonably considers that Net Adverse Effects arising in a Review Period have exceeded or will exceed the Materiality Threshold it may by notice to LUL pursuant to this paragraph instigate an Extraordinary Review in relation to which the scope of any Restated Terms that LUL may propose is to be restricted to ones designed to address affordability considerations raised by the need for LUL to fund Net Adverse Effects in excess of the Materiality Threshold.

LUL's notice

15 If: (a) LUL suffers a substantial shortfall in the performance of the Services which Infraco is required to perform under the Contract having regard ( where applicable ) to Benchmarks in relation to Service Performance and to the Asset Management Strategy in relation to Asset Management Services and which it is unable to cause Infraco to remedy, LUL may by notice to Infraco pursuant to this paragraph instigate an Extraordinary Review the scope of which shall be restricted to the proposal of Restated Terms designed to address shortfalls in performance under the Contract that LUL has experienced and so as to enable LUL to finance any costs of those changes;

(b) a Law Change occurs which renders it impossible for Infraco to perform a material part of its obligations under the Transaction Documents, LUL may by notice to Infraco pursuant to clause 40.3(d) of the Contract instigate an Extraordinary Review the scope of which shall be restricted to the proposal of Restated Terms designed to remedy such impossibility and so as to enable LUL to finance any costs of those changes.

16 [not used]

Effect of notice

17 If notice is served under paragraph 14 or paragraph 15 above, the parties shall meet with a view to agreeing the form and conduct of the Extraordinary Review within ten (10) Business Days thereafter. In the absence of agreement, either party may refer the matter to the Statutory Arbiter for him to give a direction pursuant to paragraph 1.2 above on the basis that the provisions relating to a Periodic Review shall apply to the Extraordinary Review mutatis mutandis

Part 4 : Other Matters

Secondment Agreements

18 The parties agree for the purposes of paragraph 6.6 the matters set out in paragraphs (a) to (e). (a) Having evaluated the commercial and financial proposals put forward by or on behalf of Tube Lines as part of the bidding process pursuant to which Infraco was sold to Tube Lines ( Holdings ) Limited ( including its Secondment Agreements and also including the procurement arrangements referred to in paragraph 19 below ) LUL considered that: (i) they were founded on a sound understanding of how Tube Lines' proposed Infraco would deliver the Infraco Obligations under the Service Contract;

(ii) Tube Lines's bid for Infraco as part of the bidding process pursuant to which Infraco was sold to Tube Lines ( Holdings ) Limited offered the most economically advantageous terms;

( iii ) the sub-contracting and funding arrangements ( including the Secondment Agreements ) proposed by Tube Lines to be adopted and/or entered into by Infraco on or around the Transfer Date were an acceptable position from which to start performance of the Infraco Obligations.

(b) The costs incurred by Infraco under a Secondment Agreement shall be Qualifying Costs for the purpose of the determination of Net Adverse Effects, and costs projected to be incurred by Infraco under the Secondment Agreements shall be included in the negative cashflows under paragraph 7.2(b) unless and only to the extent the Statutory Arbiter considers they should be disallowed for such purposes because he has concluded in accordance with paragraphs (c) and (d) below that the Secondment Agreement is inconsistent with Infraco performing its obligations in an overall economic and efficient manner and in accordance with Good Industry Practice.

(c) The Statutory Arbiter shall not conclude that a Secondment Agreement is inconsistent with Infraco performing its obligations in an overall economic and efficient manner and in accordance with Good Industry Practice unless:
(i) Infraco has not performed the Infraco Obligations in accordance with their terms and such a failure to perform is inconsistent with the expected performance of a Notional Infraco; or

(ii) Infraco is seeking an increase to the ISC

and the Secondment Agreement in question is relevant to the failure to perform or to the increase in ISC being sought.

(d) In considering terms of a Secondment Agreement in the circumstances of sub paragraph (c) the Statutory Arbiter may conclude that it is inconsistent with Infraco performing its obligations in an overall economic and efficient manner and in accordance with Good Industry Practice only if and to the extent that he considers that it was inappropriate at the time it was entered into, which conclusion is to be based on his consideration of
(A) the Infraco Obligations;

(B) the range of terms that would have been available to a Notional Infraco using Good Industry Practice in a contract to acquire the services of management personnel with the skills equivalent to the skills of the personnel made available to Infraco under the terms of the Secondment Agreement from organisations with a market reputation for capital programme management ( in the case of the Capex Secondment Agreement ) or the management of railway maintenance ( in the case of the Opex Secondment Agreement ) equivalent to the relevant Sponsors' Groups;

(C) the circumstances and information known to or reasonably foreseeable by Tube Lines at that time ( and not the circumstances and information known at the time of the Statutory Arbiter's consideration ).

(e) Payments from Infraco to the counterparty to one of the Secondment Agreements in respect of the Management Fee Incentive Component or MFIC ( in each case as defined in the relevant Secondment Agreement ) may be paid under a particular Secondment Agreement in accordance with its terms nothwithstanding underperformance in other aspects of Infraco's business. This is not a fact or matter which justifies a conclusion that costs or cashflows arising under any term of that Secondment Agreement are inconsistent with the performance of the Infraco Obligations in an overall economic and efficient manner and in accordance with Good Industry Practice unless and then only to the extent that either the activities to which that Secondment Agreement relates or any terms of that Secondment Agreement have contributed to such underperformance.

Overall procurement approach

19 The parties' guidance to the Statutory Arbiter is that fixed price contracting is not the only efficient and economic approach to procurement and that Infraco's approach at the Transfer Date, as described in paragraphs (a) and (b) below is one that a Notional Infraco could follow ( without prejudice to any consideration at a Review of whether Infraco has implemented this approach to the standards of a Notional Infraco ). Infraco's approach at the Transfer Date is to: (a) procure capital works by contracts for works and/or services in respect of work packages of varying sizes at appropriate points throughout the Review Period ( and thereby accepting the risk ( without prejudice to the existence of the Extraordinary Review ) that the costs incurred in respect of those work packages may differ from the costs anticipated by the parties at the Transfer Date or at a subsequent Review Date ); and

(b) to perform most operating and maintenance activities through its own work force ( and thereby accepting the risk that the costs incurred in respect of those activities may differ from the costs anticipated by the parties at the Transfer Date or at a subsequent Review Date ).

20 Infraco is required to achieve Specified Line Upgrades in respect of the Jubilee Line with a Latest Implementation Date of 31st December 2009 and in respect of the Northern Line with a Latest Implementation Date of 7th January 2012. At the Transfer Date, the components of Infraco's proposed approach to the achievement of those Specified Line Upgrades contains the elements described in paragraphs (a) to (f) below: (a) to employ transmission based train control systems;

(b) to overlay the transmission based train control systems on the existing signalling system;

(c) to use transmitted communications between the wayside equipment and the trains for train detection purpose;

(d) to procure train control systems for both the Northern Line and the Jubilee Line under one contract let to the qualified vendor making the most economically advantageous offer following a procurement process involving competitive tendering; and

(f) to let this the contract on a "turnkey" basis ( imposing single point design, procurement, installation and commissioning responsibility on the contractor ) and to include in it incentives and provisions for damages and other consequences in connection with schedule completion and delivered performance or alternatively to procure the train control system ( design, manufacture, testing and commissioning responsibility ) from the technology supplier with installation and test and commissioning support provided by a separate installation contractor, both contractors having incentives, provisions for damages and delivered performance.

The parties' guidance to the Statutory Arbiter is that this is an approach which a Notional Infraco could propose, without prejudice to consideration in the context of either an Extraordinary Review or a Periodic Review ( as the case may be ) of whether Infraco: (x) reviewed the appropriateness of each element of the above approach from time to time to take into account information becoming available after the Transfer Date;

(y) executed the elements of the above approach finally adopted by them; and/or

(z) adapted its approach to managing the elements of the above approach finally adopted in the light of changing circumstances,

to the standards required of a Notional Infraco.

The parties' further guidance to the Statutory Arbiter is that he should not allow as Qualifying Costs any costs incurred in relation to the Specified Line Upgrades on the Jubilee and Northern lines referred to above to the extent that they result from a failure by Infraco to carry out the activities listed in (x)-(z) above in an economic and efficient manner.

21 The parties agree that, for the purposes of paragraph 6.6, in the event that Infraco has requested the prior written consent of LUL in accordance with clause 11A.12 of the JNP Contract to serve a notice under: (a) the Usage Contract requiring the provision of the Trains, the Equipment and the Services in the Secondary Usage Period ( as each such term is defined in the Usage Contract ); or

(b) under the Trains Direct Lease or the Equipment Direct Lease requiring the leasing of the Leased Trainsets ( as defined in the Trains Direct Lease ) or the Leased Equipment ( as defined in the Equipment Direct Lease ), as the case may be, to continue into the Secondary Period ( as defined in the relevant Direct Lease ), and LUL has withheld its consent for any reason ( LUL NL Circumstances ), any debt required by Infraco to finance Infraco Obligations in relation to the provision of Rolling Stock on the Northern Line shall be deemed to be Eligible Debt.

21A LUL and Infraco agree that the Statutory Arbiter should attach great weight to any information received by Infraco as part of a competitive tendering process conducted in accordance with Schedule 5.4 of the PPP Contract in relation to the price and/or terms on which Infraco is able to procure the provision of Rolling Stock on the Northern Line in LUL NL Circumstances.

ANNEX 1 - Definitions

1.1 In this Schedule 1.9, the following expression shall have the following meaning:

Materiality Threshold means: (a) £200 million for the first Review Period; and

(b) in each subsequent Review Period £50 million;

1.2 Words and expressions used in this Schedule 1.9 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.

ANNEX 2 - Guidance to the Statutory Arbiter
Factors to which the Statutory Arbiter must have regard in giving any direction under section 229(3) of the GLA.

Date:

Guidance from parties to a PPP Agreement

1. Introduction

1.1 This guidance and paragraph 6 ( Guidance to the Statutory Arbiter ) of Schedule 1.9 ( The Statutory Arbiter and Reviews ) of the PPP agreement is issued to the Statutory Arbiter pursuant to Schedule 1.9 ( The Statutory Arbiter and Reviews ) of the PPP agreement between London Underground Limited ( LUL ) and Infraco JNP ( Infraco ) ( collectively, the Parties ) dated _____ ( the PPP Contract ). The guidance constitutes factors notified to Statutory Arbiter by the Parties, acting jointly, for the purpose of Section 231(6) of the Greater London Authority Act 1999 ( the GLA Act ). It covers matters relating to the exercise of the Statutory Arbiter's functions on which the Parties hold a common view.

1.2 This guidance dated [ ] relates to the discharge by the Statutory Arbiter of the functions conferred or imposed on him by or under the GLA Act in connection with any reference to him for directions and/or guidance pursuant to Schedule 1.9 of the PPP Contract.

1.3 The Parties have agreed that the guidance on this matter may not be changed or rescinded except by consent of both Parties.

1.4 The Parties have agreed that this guidance replaces the guidance to him in the letter dated 31 December 2002 and that such former guidance is hereby rescinded.

2. Objective The Parties agree that their objective in issuing this guidance to the Statutory Arbiter is to provide a clear statement of the approach that the Parties agree should be taken on certain issues, so that the Statutory Arbiter can take account of the Parties' agreement on these issues.

3. Process LUL and Infraco attach great weight to the Statutory Arbiter following open and transparent procedures in determining what directions to give on any matters that are referred to him in connection with a Periodic or Extraordinary Review and, in particular, to: (a) both parties being notified of any matters referred to him and of the general process that he intends to adopt in dealing with them;

(b) LUL, Infraco and their respective stakeholders ( including, in the case of LUL, its holding company, Transport for London, the Mayor and any Minister and in the case of Infraco providers of equity and debt finance ) being invited to submit representations to the Statutory Arbiter on these matters and having access to the representations submitted by others;

(c) the Statutory Arbiter taking expert advice on matters where he would be better informed by expert opinion and making available to the parties and their stakeholders the terms of reference of the advisors and an informative summary of their advice;

(d) the Statutory Arbiter providing the parties and their stakeholders with provisional conclusions on matters referred to him, with summaries of the arguments made to him in relation to those matters and the reasons in support of the conclusions provisionally reached;

(e) LUL, Infraco and their stakeholders being invited to submit representations to the Statutory Arbiter on the provisional conclusions and having access to the representations submitted by others; and

(f) the issue of final conclusions taking into account the representations received.

4. Credit rating LUL and Infraco attach great weight to the Statutory Arbiter having regard to the desirability, from the point of view of maintaining Infraco's ability to finance contract performance by borrowings in the debt finance market, of Infraco having a credit rating at the end of a Periodic Review not less than the lower of its credit rating at the Transfer Date, and its credit rating immediately before the Review Process, it being acknowledged that: (a) the quality and/or quantity of information available to the Statutory Arbiter may be greater than that available to the rating agencies and that the Statutory Arbiter is to be able, in accordance with his statutory duties and any other guidance provided to him, to draw whatever conclusions are supported by information available to him and relevant to his functions; and

(b) the parties intend that the credit rating of Infraco ought not to be adversely affected solely because of new obligations to be assumed by it at a Periodic Review or solely because of the level of the ISC set by the Statutory Arbiter in respect of the efficient and economic costs of performing the Infraco Obligations after the Review Date.

5. Market advice The parties: (a) agree to procure joint advice to the Statutory Arbiter from a financial adviser of international repute in relation to the markets available to Infraco to finance efficient and economic performance in accordance with Good Industry Practice of the Restated Terms from a Review Date ( based on preparation and circulation of an appropriate Information Memorandum to interested parties and the indicative commitments they are willing to offer in response and the terms of offers of finance that Infraco may reasonably expect to be able to obtain in those markets; and

(b) attach great weight to the Statutory Arbiter having due regard to such advice.

6. Notional Infraco; efficiency and economy; Good Industry Practice

6.1 Paragraph 1 ( Statutory Arbiters' Jurisdiction ), Schedule 1.9 ( The Statutory Arbiter and Reviews ) of the PPP Contract describes the basis on which references to the Statutory Arbiter for directions and/or guidance may be made. A copy of Schedule 1.9 ( The Statutory Arbiter and Reviews ) is attached.

6.2 Many of the matters on which the Statutory Arbiter may be asked to give directions and/or guidance relate to the level of Underlying ISC that LUL is to pay to Infraco from the next Review Date and to the components from which this amount is constructed.

6.3 For these purposes the Statutory Arbiter is referred to a Notional Infraco. A Notional Infraco is defined by the PPP Contract as an assumed entity that has taken over Infraco's responsibilities at the Transfer Date, that carries out its activities in an overall efficient and economic manner and in accordance with Good Industry Practice, that has the characteristics set out below and also has Infraco's responsibilities for future performance of the Contract. The characteristics are that the assumed entity: (a) by the time of any Periodic Review, has performed the activities that an efficient and economic Infraco would have performed in prior Review Periods so as to be reasonably certain of its ability to perform obligations that are due for performance in that and subsequent Review Periods;

(b) in the next Review Period, will perform the obligations that are due for performance in that Review Period and the activities that an efficient and economic Infraco would perform in that Review Period so as to be reasonably certain of its ability to perform obligations that are due for performance in a subsequent Review Period;

(c) has the same contractual commitments to third parties as Infraco actually has to the extent that these relate to:
(i) performance of the Infraco Obligations; or

(ii) performance of obligations that LUL modifies or discontinues through the Restated Terms,
and, in either case, such contractual commitments are consistent with Infraco performing its obligations in an overall economic and efficient manner and in accordance with Good Industry Practice;

(d) has the same funding arrangements as Infraco actually has, to the extent that these are consistent with Infraco performing its obligations in an overall economic and efficient manner and in accordance with Good Industry Practice, and where further finance is required for the future performance of its obligations and activities ( other than to meet Net Adverse Effects in excess of the Materiality Threshold ), will procure finance in an efficient and economic manner both as to the proportions to be contributed by equity and debt and to the cost of the debt assuming the equity to be remunerated at the Equity Rate of Return; and

(e) assesses operating and capital costs as it would when entering into a contract after a competitive tendering process in respect of the relevant activities and having regard to:
(x) the risks associated with individual activities ( including the risk of cost overruns and ISC Adjustments );

(y) the risk that it may have to undertake activities which it has not expected to have to carry out; and

(z) the probability that in the management of a portfolio of activities, the actual cost of some individual activities will exceed the costs allowed, and the actual costs of other individual activities will be less than the costs allowed;

6.4 The Parties' guidance to the Statutory Arbiter is that, in considering the costs that would be incurred and the debt and equity required by Notional Infraco, he should proceed on the basis that such an Infraco would follow Good Industry Practice, which is defined in the Master Definitions Agreement as: "in respect of any aspect of the Services and subject always to its statutory safety obligations, whilst always ensuring that risks are reduced to a level which is as low as is reasonably practicable the exercise of the degree of skill, diligence, prudence and foresight and practice which could reasonably and ordinarily be expected from a skilled and experienced person engaged in:
(a) carrying out the same type of responsibilities of Infraco under the PPP Contract with respect to such aspect of the Services; or

(b) carrying out responsibilities, whether individually or as a package of responsibilities, which could reasonably be regarded as being comparable to the responsibilities of Infraco under the PPP Contract with respect to such aspect of the Services,
in each case, performing its obligations under the same, reasonably comparable or similar circumstances and utilising all the information available at the relevant time".

6.5 The Parties' guidance to the Statutory Arbiter is that what should be expected of an Infraco working to Good Industry Practice is: (a) establishing and maintaining whole life asset planning and maintenance regimes;

(b) considering the issues relevant to each stage in any project and putting in place a strategy to deal with them;

(c) ensuring the right competence is available, including appropriate external advice when needed;

(d) planning for operational, contractual and financial contingencies;

(e) recognising that systems and assets must be useable in practice and taking appropriate steps to ensure this, looking at comparable industries where relevant and taking account of practical constraints;

(f) recognising the time and resources needed for systems integration and taking appropriate steps to make it possible;

(g) understanding the degraded operation of complex systems so as to ensure controlled degradation;

(h) planning, and monitoring projects effectively, and monitoring and taking account of critical constraints;

(i) designing to take account of buildability and operational constraints; and

(j) effective change management.

6.6 The Parties' guidance to the Statutory Arbiter is that where Infraco has procured a contract through competitive tendering in accordance with paragraph 1A of Schedule 5.4 ( Sub-contracts ) of the PPP Contract, the Statutory Arbiter should presume that the pricing and terms of that contract were a fair reflection of the market for such a contract at the date when that contract was entered into ( although this shall not constitute a presumption that the procurement strategy of Infraco under which such contract was entered into was efficient and economic ). However, where there is any reason to doubt that the pricing and/or terms were such a fair reflection and that this might be to the disadvantage of Infraco or its "successors", the Statutory Arbiter may take into account any other evidence he reasonably considers relevant in assessing whether the pricing and/or terms of the contract were a fair reflection of the market for such a contract.

6.7 The Parties' guidance to the Statutory Arbiter is that, subject to paragraph 6.8 the Statutory Arbiter should have regard, in particular, to the following factors in estimating the level of costs that would be incurred and the amount of debt and equity that would be required by a Notional Infraco: (a) the costs actually incurred by all Infracos who are party to PPP Contracts with LUL in the period prior to the Review, to the extent that these are incurred with efficiency and economy and in accordance with Good Industry Practice;

(b) efficiency savings that can reasonably be expected based on the experiences of other Infracos and other participants in markets relevant to the Infraco's activities;

(c) reasonable expectations about trends of these costs taking account of likely trends in input costs to the Infracos;

(d) trends in costs that have been exhibited in similar industries in the past;

(e) cost implications of changes in LUL's performance and/or contractual requirements including appropriate provision for contingencies in the manner referred to in paragraph 6.8;

(f) reasonable standards of financial prudence having been demonstrated by Infraco;

(g) the proportion of debt and equity in the Infraco's financing plan at the Transfer Date; and

(h) the proportion of debt and equity which could be expected in any future funding for an efficient and economic Infraco which had properly performed its contractual obligations up to the date of the Review following Good Industry Practice.

6.8 The Parties' guidance to the Statutory Arbiter is that it is particularly important that he should determine Infrastructure Services Charges based on his estimate of what the most likely level of operating and capital costs would be in future periods for a Notional Infraco on the basis that such best estimate shall be the aggregate of all the amounts as would be agreed to by a Notional Infraco in a competitive tender in respect of the relevant activities having regard to: (a) the risks associated with individual activities ( including the risk of cost overruns and revenue abatements );

(b) the risk that a Notional Infraco may have to undertake activities which it has not expected to have to carry out; and

(c) the probability that in the management of a portfolio of activities, the actual cost of some individual activities will exceed the costs allowed, and the actual costs of other individual activities will be less than the costs allowed.

He should not base his determination on:

(x) expected levels of efficiency for future periods which would represent a target that is unlikely to be achieved by such an Infraco; and

(y) an assumption that all the Infracos could reasonably be expected to achieve the financial performance previously demonstrated by the best Infraco, unless there is a clear reason for this assumption. The Statutory Arbiter should base his decision by reference to Good Industry Practice notwithstanding that he may consider that an Infraco could in future outperform the level of costs which would be agreed to by a Notional Infraco in a competitive tender in respect of the relevant activities in the manner described above.

6.9 The Parties' guidance to Statutory Arbiter is that in determining the Infrastructure Service Charge the Statutory Arbiter should also have regard to and take account of the following factors: (a) to give great weight to the importance of concluding his review and issuing his directions by the Review Date or of making interim adjustment to the level of Infrastructure Service Charge where there is overall benefit in extending his review beyond the Review Date;

(b) in considering whether the actions of an Infraco are efficient and economic, (i) the implications of the contractual structure and performance and payment regime under which the Infraco operates; (ii) the fact that following Good Industry Practice may still allow for different methods of procurement; and ( iii ) the specific nature of Infraco's asset base, should be considered;

(c) that the Infracos may have continuing commitments in connection with supply contracts ( including the Secondment Agreements ) and/or collective labour agreements and ( in relation to the impact of the new finance on the cost of finance already in place, and in relation to the new fixed amounts to be allowed in respect of Base Finance and Eligible Finance respectively ) funding documents at the Review Date to meet the continuing requirements of the PPP Contract and these commitments are less good value for money than terms available in relevant supply market at the time of the Review. In these circumstances, it would be appropriate to consider:
(i) whether those supply contracts and/or collective labour agreements and/or funding documents and the constraints on Infracos that they imply, were nevertheless consistent with Infraco performing its obligations in an overall economic and efficient manner and in accordance with Good Industry Practice at the time they were entered into rather than considering them in isolation and in circumstances prevailing at the time of the relevant review; and/or

(ii) whether, taking due account of all consequences ( including any Refinancing Benefit which accrues to LUL ) which may arise as a consequence of any termination ( or in the case of funding documents, prepayment ), the Infraco could now effect overall efficiency and economy gains by terminating the existing commitment in accordance with its terms or by agreement, bearing any termination costs and recommitting on current market terms;
(d) that an Infraco may have continuing contractual commitments entered into to meet obligations which LUL modifies or discontinues from the Review Date, where regard should be had to whether the commitments would have been assumed by an efficient and economic Infraco at the point of entering into such contractual commitment and the cancellation expenditure which an efficient and economic Infraco would now incur in terminating the commitment;

(e) in relation to amounts to be allowed pursuant to sub-paragraphs 7.2(c) and (d) of Schedule 1.9 of the PPP Contract and in respect of finance costs and fees and like matters associated with finance which are considered to be part of operating and capital costs pursuant to paragraph 7.2(b) of Schedule 1.9 of the Contract, that:
(i) the terms of reference to the Statutory Arbiter require him to allow the costs of finance as stipulated in or pursuant to annex 3 to Schedule 1.9 without regard to whether these represent efficient and economic costs;

(ii) where Base Finance or Eligible Finance is required, it is relevant to consider whether this can be obtained with greater efficiency and economy or this can only be obtained at all, by refinancing existing facilities and in such circumstances to take into account the costs and fees associated with termination or prepayment of existing finance arrangements in addition to the costs and fees associated with putting new finance arrangements in place; and

( iii ) for purposes of paragraph (ii) above, it is relevant to have regard to the considerations referred to in paragraph (c) above and also to (x) existing terms and types of financing it has utilised prior to the Review, to the extent that these are on an efficient and economic basis, which includes the recognition of the possible requirement of the Infracos to raise additional finance; (y) the terms on which efficient and economic finance is available to a Notional Infraco in the market at the time; and (z) reasonable standards of financial prudence in light of the obligations of the PPP Contract at the time;
(f) to the extent that raising incremental finance impacts on the cost of existing finance, the cost allowed as referred to in paragraph (e) in respect of the incremental finance that would be incurred by a Notional Infraco should take include the costs created for the original finance by any conditions in the original financing; and

(g) representations by and evidence from the Parties as to the availability, levels and terms of financing that would then be available to a Notional Infraco.

6.9A The Parties' guidance to Statutory Arbiter is that in determining the Infrastructure Service Charge, and in particular, when he is considering the matters referred to in paragraph 6.9 in the context of such determination, the Statutory Arbiter should also have regard to and take account of the following factors:

(a) Infraco has refinanced its Approved Debt pursuant to the terms of ( inter alia ) an Issuer/Borrower Facility Agreement dated [ ] and made between Infraco, Tube Lines ( Finance ) plc and the Law Debenture Trust Corporation PLC ( the IBFA );

(b) as a consequence of the structure of the refinancing, amendments have been made to certain defined terms in the Master Definitions Agreement to take account of the fact that the Issuer under the IBFA is the provider of both Approved Debt and Mezzanine Debt;

(c) the Parties do not intend that these changes to definitions should have any effect on the matters which the Arbiter should consider in circumstances when Base Finance or Eligible Finance is required, and particularly in considering any matter referred to him pursuant to paragraph 1.4A of Schedule 1.9 with regard to the terms of Required Finance.

7. Refinancing Benefit

The parties wish that the Arbiter should be aware that they have agreed that LUL's share of any Refinancing Benefit calculated in accordance with clause 31.6 of the PPP Contract would be effected through clause 31.6 of the PPP Contract and an adjustment to the ISC ( with such adjustment to the ISC being dealt with in accordance with clause 18 of the PPP Contract ).

8. Net Adverse Effect

8.1 Schedule 1.9 of the PPP Contract contains a number of provisions that are designed to protect Infraco altogether from Net Adverse Effect within a Review Period that are in excess of the Materiality Threshold.

8.2 When assessing whether Infraco has incurred Net Adverse Effects it is necessary to start by ascertaining the lower of: - (a) the aggregate costs that Infraco actually incurred in performing the Infraco Obligations during a Review Period; or

(b) the aggregate costs that Infraco would have incurred in performing the Infraco Obligations during a Review Period in an overall efficient and economic manner and in accordance with Good Industry Practice with regard to the extent applicable to the characteristics of a Notional Infraco save for any need to fund Net Adverse Effects in excess of the Materiality Threshold. In considering the aggregate costs that Infraco would have incurred in performing the Infraco Obligations during a Review Period in an overall efficient and economic manner as referred to in sub-paragraph (b), the parties wish the Statutory Arbiter to have regard to: (x) Infraco's costs, budgets and programmes of activities proposed as part of the original bidding process; and (y) the possibility that some of the costs Infraco actually incurred ( including but not limited to costs incurred under subcontracts and the Secondment Agreements ) may be less than those that would have been incurred by performance in an efficient and economic manner as referred to in sub-paragraph (b) ( and the parties wish any such difference to be ignored for purposes of determining costs pursuant to paragraph (b) above ) as well as having regard to the possibility that some of the costs that Infraco actually incurred ( including but not limited to costs incurred under subcontracts and the Secondment Agreements ) are more than those that would have been incurred by performance in an efficient and economic manner as referred to in sub-paragraph (b) ( and the parties wish any such difference to also be ignored for purposes of determining costs pursuant to paragraph (b) above ).

8.3 For these purposes, the parties also wish the Statutory Arbiter to allow the efficient and economic costs that Infraco incurs after the Transfer Date: (a) arising out of the pre-Transfer Date working practices that may or may not have been efficient and economic; or

(b) from settling undischarged pre-Transfer Date liabilities not reimbursable under the Share Purchase Agreement that may or may not be efficiently and economically incurred.

8A. Lease Financing
The parties' guidance to the Statutory Arbiter in relation to the financing of the procurement of certain assets ( such as rolling stock ) which may be procured by Infraco in order to fulfil the Infraco Obligations is that it is likely that an economic and efficient means of financing such procurement may be to use an operating or finance lease with a duration which is linked to the likely economic life of the assets. As the economic life of such assets is likely to exceed the remaining duration of the Contract Period, it is recognised that it is unlikely to be possible to proceed on the basis of such a lease unless LUL agrees to enter into arrangements with the proposed lessors, including with regard to LUL's acceptance of appropriate liability under the lease after the end of the Contract Period. The parties recognise that LUL may not wish to undertake such a liability, or it may not agree terms in respect of such liability, so that the Infraco may need to arrange different means of finance. In particular such finance is likely to have to be repaid on or before the end of the Contract Period. The parties' guidance to the Statutory Arbiter is that if it is necessary for the Infraco to proceed as described in the last two sentences then that course of action is one which a Notional Infraco could follow.

9. Partnership
The Parties' guidance to the Statutory Arbiter is that in determining the level of Infrastructure Service Charges the Statutory Arbiter should be mindful of the fact that, in the context of their respective rights and obligations under the PPP Contract, the Parties intend to work in a spirit of partnership, which London Underground described in its Invitation to Tender as follows: "We are committed to providing the best possible Underground service to the travelling public by:

working together to improve customer service

creating an environment based on mutual respect, trust and fairness that promotes open and honest communication at all levels

solving problems together

recognising and rewarding those who contribute to the success of the partnership

working together to achieve our objectives"

As the parties intend to work together in partnership, in accepting evidence from either party as to the likely level of future costs, the Statutory Arbiter should have regard to the extent that such information has been shared with the other party on a timely and open basis.

Yours faithfully

London Underground Limited Infraco

ANNEX 3 - Fixed Amounts

1 All figures in this Annex 3 are nominal sums and shall not be indexed.

2 All amounts in this Annex 3 are references to £m.

3 Table 1.0 shows the Fixed Amounts in relation to Approved Debt. This is a consolidated table derived from Tables 1.1 to 1.8 which contain information extracted from the Financial Model as audited by the pricing model auditors May 2004.

4 This is a consolidated table derived from Table 2.1 which contain information extracted from the Financial Model as audited by the pricing model auditors May 2004.

5 Table 3.0 shows the Fixed Amounts in relation to Shareholder amounts. This is a consolidated table derived from Tables 3.1 to 3.3 which contain information extracted from the Financial Model as audited by the pricing model audiors May 2004.

Table 1.0



Table	1.0	Approved Debt Fixed Amounts

Period	Period Starting	Period Ending	Principal Repayment	Interest Payment

1	31-Dec-02	31-Mar-03	-	-
2	01-Apr-03	30-Sep-03	-	-
3	01-Oct-03	31-Mar-04	-	£5,535,314
4	01-Apr-04	30-Sep-04	-	£10,410,953
5	01-Oct-04	31-Mar-05	-	£14,836,341
6	01-Apr-05	30-Sep-05	-	£19,510,474
7	01-Oct-05	31-Mar-06	-	£24,039,506
8	01-Apr-06	30-Sep-06	-	£27,614,206
9	01-Oct-06	31-Mar-07	-	£30,858,149
10	01-Apr-07	30-Sep-07	-	£33,947,870
11	01-Oct-07	31-Mar-08	-	£36,859,143
12	01-Apr-08	30-Sep-08	-	£39,340,044
13	01-Oct-08	31-Mar-09	-	£41,523,733
14	01-Apr-09	30-Sep-09	-	£43,544,915
15	01-Oct-09	31-Mar-10	-	£45,306,192
16	01-Apr-10	30-Sep-10	-	£47,112,373
17	01-Oct-10	31-Mar-11	£18,288,098	£47,874,115
18	01-Apr-11	30-Sep-11	£14,929,529	£47,301,654
19	01-Oct-11	31-Mar-12	£38,227,682	£46,834,337
20	01-Apr-12	30-Sep-12	£37,323,598	£45,637,794
21	01-Oct-12	31-Mar-13	£46,086,226	£44,469,559
22	01-Apr-13	30-Sep-13	£51,663,274	£43,027,071
23	01-Oct-13	31-Mar-14	£54,265,394	£41,410,027
24	01-Apr-14	30-Sep-14	£44,148,413	£39,711,531
25	01-Oct-14	31-Mar-15	£48,161,731	£38,329,687
26	01-Apr-15	30-Sep-15	£57,511,656	£36,822,678
27	01-Oct-15	31-Mar-16	£48,590,438	£35,023,047
28	01-Apr-16	30-Sep-16	£42,699,747	£33,502,640
29	01-Oct-16	31-Mar-17	£49,751,622	£32,166,649
30	01-Apr-17	30-Sep-17	£52,461,963	£30,610,032
31	01-Oct-17	31-Mar-18	£66,527,333	£28,968,673
32	01-Apr-18	30-Sep-18	£71,343,139	£26,887,789
33	01-Oct-18	31-Mar-19	£72,189,788	£24,656,218
34	01-Apr-19	30-Sep-19	£70,937,594	£22,398,148
35	01-Oct-19	31-Mar-20	£69,214,722	£20,179,295
36	01-Apr-20	30-Sep-20	£79,031,547	£18,014,528
37	01-Oct-20	31-Mar-21	£30,428,908	£15,546,942
38	01-Apr-21	30-Sep-21	£37,114,596	£14,586,848
39	01-Oct-21	31-Mar-22	£36,125,994	£13,415,806
40	01-Apr-22	30-Sep-22	£36,670,153	£12,275,957
41	01-Oct-22	31-Mar-23	£35,626,187	£11,118,939
42	01-Apr-23	30-Sep-23	£36,177,144	£9,994,860
43	01-Oct-23	31-Mar-24	£33,517,849	£8,853,398
44	01-Apr-24	30-Sep-24	£27,238,205	£7,795,841
45	01-Oct-24	31-Mar-25	£29,754,163	£6,936,420
46	01-Apr-25	30-Sep-25	£38,509,124	£5,997,615
47	01-Oct-25	31-Mar-26	£43,343,958	£4,782,574
48	01-Apr-26	30-Sep-26	£41,934,605	£3,414,984
49	01-Oct-26	31-Mar-27	£39,151,678	£2,091,861
50	01-Apr-27	30-Sep-27	£27,147,086	£856,546
51	01-Oct-27	31-Mar-28	-	-
52	01-Apr-28	30-Sep-28	-	-
53	01-Oct-28	31-Mar-29	-	-
54	01-Apr-29	30-Sep-29	-	-
55	01-Oct-29	31-Mar-30	-	-
56	01-Apr-30	30-Sep-30	-	-
57	01-Oct-30	31-Mar-31	-	-
58	01-Apr-31	30-Sep-31	-	-
59	01-Oct-31	31-Mar-32	-	-
60	01-Apr-32	30-Sep-32	-	-

Totals			£1,526,093,144	£1,241,933,279

Table 1.1


Table	1.1	Approved Debt - EIB 25 Year Tranche

Period	Period Starting	Period Ending	Principal Repayment	Interest Payment

1	31-Dec-02	31-Mar-03	-	-
2	01-Apr-03	30-Sep-03	-	-
3	01-Oct-03	31-Mar-04	-	£565,042
4	01-Apr-04	30-Sep-04	-	£982,789
5	01-Oct-04	31-Mar-05	-	£1,387,036
6	01-Apr-05	30-Sep-05	-	£1,784,770
7	01-Oct-05	31-Mar-06	-	£2,191,515
8	01-Apr-06	30-Sep-06	-	£2,515,224
9	01-Oct-06	31-Mar-07	-	£2,803,226
10	01-Apr-07	30-Sep-07	-	£3,077,348
11	01-Oct-07	31-Mar-08	-	£3,337,892
12	01-Apr-08	30-Sep-08	-	£3,561,097
13	01-Oct-08	31-Mar-09	-	£3,757,167
14	01-Apr-09	30-Sep-09	-	£3,938,603
15	01-Oct-09	31-Mar-10	-	£4,096,352
16	01-Apr-10	30-Sep-10	-	£4,203,268
17	01-Oct-10	31-Mar-11	£1,122,217	£4,205,218
18	01-Apr-11	30-Sep-11	£909,213	£4,173,683
19	01-Oct-11	31-Mar-12	£2,305,247	£4,418,134
20	01-Apr-12	30-Sep-12	£2,245,486	£4,083,357
21	01-Oct-12	31-Mar-13	£2,762,841	£4,020,259
22	01-Apr-13	30-Sep-13	£3,094,741	£3,942,623
23	01-Oct-13	31-Mar-14	£3,253,836	£3,855,661
24	01-Apr-14	30-Sep-14	£2,651,471	£3,764,228
25	01-Oct-14	31-Mar-15	£2,648,519	£3,689,722
26	01-Apr-15	30-Sep-15	£3,194,048	£3,615,298
27	01-Oct-15	31-Mar-16	£2,663,527	£3,525,545
28	01-Apr-16	30-Sep-16	£2,288,987	£3,450,700
29	01-Oct-16	31-Mar-17	£2,660,055	£3,386,380
30	01-Apr-17	30-Sep-17	£2,773,458	£3,311,632
31	01-Oct-17	31-Mar-18	£3,229,207	£3,233,698
32	01-Apr-18	30-Sep-18	£3,492,698	£3,142,957
33	01-Oct-18	31-Mar-19	£3,543,105	£3,044,812
34	01-Apr-19	30-Sep-19	£3,455,233	£2,945,251
35	01-Oct-19	31-Mar-20	£3,265,228	£2,848,159
36	01-Apr-20	30-Sep-20	£1,454,601	£2,756,406
37	01-Oct-20	31-Mar-21	£5,967,844	£2,715,532
38	01-Apr-21	30-Sep-21	£7,279,069	£2,547,836
39	01-Oct-21	31-Mar-22	£7,085,180	£2,343,294
40	01-Apr-22	30-Sep-22	£7,191,903	£2,144,200
41	01-Oct-22	31-Mar-23	£6,987,156	£1,942,108
42	01-Apr-23	30-Sep-23	£7,095,212	£1,745,769
43	01-Oct-23	31-Mar-24	£6,573,660	£1,546,393
44	01-Apr-24	30-Sep-24	£5,342,070	£1,361,673
45	01-Oct-24	31-Mar-25	£5,835,510	£1,211,561
46	01-Apr-25	30-Sep-25	£7,552,570	£1,047,583
47	01-Oct-25	31-Mar-26	£8,500,797	£835,356
48	01-Apr-26	30-Sep-26	£8,224,389	£596,484
49	01-Oct-26	31-Mar-27	£7,678,590	£365,378
50	01-Apr-27	30-Sep-27	£5,324,200	£149,610
51	01-Oct-27	31-Mar-28	-	-
52	01-Apr-28	30-Sep-28	-	-
53	01-Oct-28	31-Mar-29	-	-
54	01-Apr-29	30-Sep-29	-	-
55	01-Oct-29	31-Mar-30	-	-
56	01-Apr-30	30-Sep-30	-	-
57	01-Oct-30	31-Mar-31	-	-
58	01-Apr-31	30-Sep-31	-	-
59	01-Oct-31	31-Mar-32	-	-
60	01-Apr-32	30-Sep-32	-	-

Totals			£149,651,868	£129,897,831

Table 1.2


Table	1.2	Approved Debt - Banks 25 Year Tranche

Period	Period Starting	Period Ending	Principal Repayment	Interest Payment

1	31-Dec-02	31-Mar-03	-	-
2	01-Apr-03	30-Sep-03	-	-
3	01-Oct-03	31-Mar-04	-	£1,128,013
4	01-Apr-04	30-Sep-04	-	£2,131,592
5	01-Oct-04	31-Mar-05	-	£3,112,353
6	01-Apr-05	30-Sep-05	-	£4,075,163
7	01-Oct-05	31-Mar-06	-	£5,058,238
8	01-Apr-06	30-Sep-06	-	£5,845,627
9	01-Oct-06	31-Mar-07	-	£6,575,409
10	01-Apr-07	30-Sep-07	-	£7,276,110
11	01-Oct-07	31-Mar-08	-	£7,916,566
12	01-Apr-08	30-Sep-08	-	£8,464,251
13	01-Oct-08	31-Mar-09	-	£8,944,287
14	01-Apr-09	30-Sep-09	-	£9,387,799
15	01-Oct-09	31-Mar-10	-	£9,778,077
16	01-Apr-10	30-Sep-10	-	£10,449,265
17	01-Oct-10	31-Mar-11	£2,355,321	£10,853,413
18	01-Apr-11	30-Sep-11	£1,908,267	£10,772,025
19	01-Oct-11	31-Mar-12	£4,838,277	£10,706,085
20	01-Apr-12	30-Sep-12	£4,712,851	£10,538,898
21	01-Oct-12	31-Mar-13	£5,798,681	£10,376,046
22	01-Apr-13	30-Sep-13	£6,495,276	£10,175,672
23	01-Oct-13	31-Mar-14	£6,829,186	£9,951,228
24	01-Apr-14	30-Sep-14	£5,564,936	£9,715,245
25	01-Oct-14	31-Mar-15	£5,558,741	£9,522,949
26	01-Apr-15	30-Sep-15	£6,703,702	£9,330,867
27	01-Oct-15	31-Mar-16	£5,590,240	£9,099,220
28	01-Apr-16	30-Sep-16	£4,804,151	£8,906,050
29	01-Oct-16	31-Mar-17	£5,582,953	£8,740,042
30	01-Apr-17	30-Sep-17	£5,820,964	£8,547,123
31	01-Oct-17	31-Mar-18	£6,777,494	£8,345,980
32	01-Apr-18	30-Sep-18	£7,330,513	£8,111,784
33	01-Oct-18	31-Mar-19	£7,436,307	£7,858,478
34	01-Apr-19	30-Sep-19	£7,251,881	£7,601,516
35	01-Oct-19	31-Mar-20	£6,853,095	£7,350,927
36	01-Apr-20	30-Sep-20	£3,052,931	£7,114,119
37	01-Oct-20	31-Mar-21	£12,525,376	£7,008,625
38	01-Apr-21	30-Sep-21	£15,277,389	£6,575,810
39	01-Oct-21	31-Mar-22	£14,870,453	£6,507,900
40	01-Apr-22	30-Sep-22	£15,094,444	£5,534,052
41	01-Oct-22	31-Mar-23	£14,664,719	£5,012,463
42	01-Apr-23	30-Sep-23	£14,891,508	£4,505,724
43	01-Oct-23	31-Mar-24	£13,796,869	£3,991,148
44	01-Apr-24	30-Sep-24	£11,211,995	£3,514,397
45	01-Oct-24	31-Mar-25	£12,247,632	£3,126,966
46	01-Apr-25	30-Sep-25	£15,851,415	£2,703,749
47	01-Oct-25	31-Mar-26	£17,841,566	£2,156,004
48	01-Apr-26	30-Sep-26	£17,261,437	£1,539,489
49	01-Oct-26	31-Mar-27	£16,115,908	£943,020
50	01-Apr-27	30-Sep-27	£11,174,488	£386,134
51	01-Oct-27	31-Mar-28	-	-
52	01-Apr-28	30-Sep-28	-	-
53	01-Oct-28	31-Mar-29	-	-
54	01-Apr-29	30-Sep-29	-	-
55	01-Oct-29	31-Mar-30	-	-
56	01-Apr-30	30-Sep-30	-	-
57	01-Oct-30	31-Mar-31	-	-
58	01-Apr-31	30-Sep-31	-	-
59	01-Oct-31	31-Mar-32	-	-
60	01-Apr-32	30-Sep-32	-	-
61	01-Oct-32	31-Mar-33	-	-

Totals			£314,090,967	£326,805,900

Table 1.3


Table	1.3	Approved Debt - EIB 18 Year Tranche

Period	Period Starting	Period Ending	Principal Repayment	Interest Payment

1	31-Dec-02	31-Mar-03	-	-
2	01-Apr-03	30-Sep-03	-	-
3	01-Oct-03	31-Mar-04	-	£572,080
4	01-Apr-04	30-Sep-04	-	£995,031
5	01-Oct-04	31-Mar-05	-	£1,404,313
6	01-Apr-05	30-Sep-05	-	£1,807,000
7	01-Oct-05	31-Mar-06	-	£2,218,811
8	01-Apr-06	30-Sep-06	-	£2,546,553
9	01-Oct-06	31-Mar-07	-	£2,838,142
10	01-Apr-07	30-Sep-07	-	£2,115,678
11	01-Oct-07	31-Mar-08	-	£3,379,467
12	01-Apr-08	30-Sep-08	-	£3,605,452
13	01-Oct-08	31-Mar-09	-	£3,803,965
14	01-Apr-09	30-Sep-09	-	£3,987,660
15	01-Oct-09	31-Mar-10	-	£4,147,375
16	01-Apr-10	30-Sep-10	-	£4,255,622
17	01-Oct-10	31-Mar-11	£2,464,521	£4,257,569
18	01-Apr-11	30-Sep-11	£2,018,828	£4,187,480
19	01-Oct-11	31-Mar-12	£5,192,125	£4,130,044
20	01-Apr-12	30-Sep-12	£5,074,573	£3,982,328
21	01-Oct-12	31-Mar-13	£6,275,781	£3,837,957
22	01-Apr-13	30-Sep-13	£7,037,675	£3,659,411
23	01-Oct-13	31-Mar-14	£7,388,919	£3,459,189
24	01-Apr-14	30-Sep-14	£6,007,099	£3,248,978
25	01-Oct-14	31-Mar-15	£6,797,160	£3,078,078
26	01-Apr-15	30-Sep-15	£8,085,378	£2,884,693
27	01-Oct-15	31-Mar-16	£6,866,232	£2,654,664
28	01-Apr-16	30-Sep-16	£6,085,465	£2,459,320
29	01-Oct-16	31-Mar-17	£7,097,440	£2,286,188
30	01-Apr-17	30-Sep-17	£7,515,600	£2,084,266
31	01-Oct-17	31-Mar-18	£9,818,411	£1,870,447
32	01-Apr-18	30-Sep-18	£10,499,415	£1,591,113
33	01-Oct-18	31-Mar-19	£10,615,057	£1,292,405
34	01-Apr-19	30-Sep-19	£10,457,343	£990,407
35	01-Oct-19	31-Mar-20	£10,309,452	£692,895
36	01-Apr-20	30-Sep-20	£14,045,394	£399,591
37	01-Oct-20	31-Mar-21	-	-
38	01-Apr-21	30-Sep-21	-	-
39	01-Oct-21	31-Mar-22	-	-
40	01-Apr-22	30-Sep-22	-	-
41	01-Oct-22	31-Mar-23	-	-
42	01-Apr-23	30-Sep-23	-	-
43	01-Oct-23	31-Mar-24	-	-
44	01-Apr-24	30-Sep-24	-	-
45	01-Oct-24	31-Mar-25	-	-
46	01-Apr-25	30-Sep-25	-	-
47	01-Oct-25	31-Mar-26	-	-
48	01-Apr-26	30-Sep-26	-	-
49	01-Oct-26	31-Mar-27	-	-
50	01-Apr-27	30-Sep-27	-	-
51	01-Oct-27	31-Mar-28	-	-
52	01-Apr-28	30-Sep-28	-	-
53	01-Oct-28	31-Mar-29	-	-
54	01-Apr-29	30-Sep-29	-	-
55	01-Oct-29	31-Mar-30	-	-
56	01-Apr-30	30-Sep-30	-	-
57	01-Oct-30	31-Mar-31	-	-
58	01-Apr-31	30-Sep-31	-	-
59	01-Oct-31	31-Mar-32	-	-
60	01-Apr-32	30-Sep-32	-	-

Totals			£149,651,868	£91,724,189

Table 1.4


Table	1.4	Approved Debt - Banks 18 Year Tranche

Period	Period Starting	Period Ending	Principal Repayment	Interest Payment

1	31-Dec-02	31-Mar-03	-	-
2	01-Apr-03	30-Sep-03	-	-
3	01-Oct-03	31-Mar-04	-	£1,101,379
4	01-Apr-04	30-Sep-04	-	£2,081,262
5	01-Oct-04	31-Mar-05	-	£3,038,865
6	01-Apr-05	30-Sep-05	-	£3,978,943
7	01-Oct-05	31-Mar-06	-	£4,938,805
8	01-Apr-06	30-Sep-06	-	£5,707,603
9	01-Oct-06	31-Mar-07	-	£6,394,988
10	01-Apr-07	30-Sep-07	-	£7,048,833
11	01-Oct-07	31-Mar-08	-	£7,669,284
12	01-Apr-08	30-Sep-08	-	£8,199,861
13	01-Oct-08	31-Mar-09	-	£8,664,903
14	01-Apr-09	30-Sep-09	-	£9,094,561
15	01-Oct-09	31-Mar-10	-	£9,472,648
16	01-Apr-10	30-Sep-10	-	£10,153,379
17	01-Oct-10	31-Mar-11	£5,175,564	£10,575,443
18	01-Apr-11	30-Sep-11	£4,237,138	£10,401,283
19	01-Oct-11	31-Mar-12	£10,897,289	£10,258,618
20	01-Apr-12	30-Sep-12	£10,650,569	£9,891,706
21	01-Oct-12	31-Mar-13	£13,171,678	£9,533,102
22	01-Apr-13	30-Sep-13	£14,770,749	£9,089,611
23	01-Oct-13	31-Mar-14	£15,507,943	£8,592,280
24	01-Apr-14	30-Sep-14	£12,607,766	£8,070,128
25	01-Oct-14	31-Mar-15	£14,265,953	£7,645,624
26	01-Apr-15	30-Sep-15	£16,969,678	£7,165,290
27	01-Oct-15	31-Mar-16	£14,410,922	£6,593,921
28	01-Apr-16	30-Sep-16	£12,772,240	£6,108,705
29	01-Oct-16	31-Mar-17	£14,896,184	£5,678,664
30	01-Apr-17	30-Sep-17	£15,773,824	£5,177,109
31	01-Oct-17	31-Mar-18	£20,606,987	£4,646,004
32	01-Apr-18	30-Sep-18	£22,036,286	£3,952,167
33	01-Oct-18	31-Mar-19	£22,278,996	£3,210,205
34	01-Apr-19	30-Sep-19	£21,947,985	£2,460,072
35	01-Oct-19	31-Mar-20	£21,637,589	£1,721,083
36	01-Apr-20	30-Sep-20	£29,478,627	£992,545
37	01-Oct-20	31-Mar-21	-	-
38	01-Apr-21	30-Sep-21	-	-
39	01-Oct-21	31-Mar-22	-	-
40	01-Apr-22	30-Sep-22	-	-
41	01-Oct-22	31-Mar-23	-	-
42	01-Apr-23	30-Sep-23	-	-
43	01-Oct-23	31-Mar-24	-	-
44	01-Apr-24	30-Sep-24	-	-
45	01-Oct-24	31-Mar-25	-	-
46	01-Apr-25	30-Sep-25	-	-
47	01-Oct-25	31-Mar-26	-	-
48	01-Apr-26	30-Sep-26	-	-
49	01-Oct-26	31-Mar-27	-	-
50	01-Apr-27	30-Sep-27	-	-
51	01-Oct-27	31-Mar-28	-	-
52	01-Apr-28	30-Sep-28	-	-
53	01-Oct-28	31-Mar-29	-	-
54	01-Apr-29	30-Sep-29	-	-
55	01-Oct-29	31-Mar-30	-	-
56	01-Apr-30	30-Sep-30	-	-
57	01-Oct-30	31-Mar-31	-	-
58	01-Apr-31	30-Sep-31	-	-
59	01-Oct-31	31-Mar-32	-	-
60	01-Apr-32	30-Sep-32	-	-

Totals			£314,090,967	£219,308,873

Table 1.5


Table	1.5	Not Used

Table 1.6


Table	1.6	Approved Debt - Banks 25 Year AMBAC Wrapped

Period	Period Starting	Period Ending	Principal Repayment	Interest Payment

1	31-Dec-02	31-Mar-03	-	-
2	01-Apr-03	30-Sep-03	-	-
3	01-Oct-03	31-Mar-04	-	£1,090,046
4	01-Apr-04	30-Sep-04	-	£2,121,421
5	01-Oct-04	31-Mar-05	-	£2,962,809
6	01-Apr-05	30-Sep-05	-	£3,952,786
7	01-Oct-05	31-Mar-06	-	£4,841,224
8	01-Apr-06	30-Sep-06	-	£5,528,471
9	01-Oct-06	31-Mar-07	-	£6,155,369
10	01-Apr-07	30-Sep-07	-	£6,750,275
11	01-Oct-07	31-Mar-08	-	£7,316,282
12	01-Apr-08	30-Sep-08	-	£7,795,569
13	01-Oct-08	31-Mar-09	-	£8,219,834
14	01-Apr-09	30-Sep-09	-	£8,613,357
15	01-Oct-09	31-Mar-10	-	£8,952,891
16	01-Apr-10	30-Sep-10	-	£9,062,303
17	01-Oct-10	31-Mar-11	£2,244,433	£9,017,046
18	01-Apr-11	30-Sep-11	£1,818,427	£8,949,429
19	01-Oct-11	31-Mar-12	£4,610,494	£8,894,645
20	01-Apr-12	30-Sep-12	£4,490,973	£8,755,746
21	01-Oct-12	31-Mar-13	£5,525,683	£8,620,448
22	01-Apr-13	30-Sep-13	£6,189,482	£8,453,977
23	01-Oct-13	31-Mar-14	£6,507,672	£8,267,508
24	01-Apr-14	30-Sep-14	£5,302,942	£8,071,453
25	01-Oct-14	31-Mar-15	£5,297,038	£7,911,693
26	01-Apr-15	30-Sep-15	£6,388,095	£7,752,110
27	01-Oct-15	31-Mar-16	£5,327,054	£7,559,658
28	01-Apr-16	30-Sep-16	£4,577,974	£7,399,171
29	01-Oct-16	31-Mar-17	£5,320,110	£7,261,252
30	01-Apr-17	30-Sep-17	£5,546,916	£7,100,974
31	01-Oct-17	31-Mar-18	£6,458,413	£6,933,863
32	01-Apr-18	30-Sep-18	£6,985,397	£6,739,293
33	01-Oct-18	31-Mar-19	£7,086,210	£6,528,845
34	01-Apr-19	30-Sep-19	£6,910,466	£6,315,361
35	01-Oct-19	31-Mar-20	£6,530,455	£6,107,171
36	01-Apr-20	30-Sep-20	£2,909,202	£5,910,430
37	01-Oct-20	31-Mar-21	£11,935,688	£5,822,785
38	01-Apr-21	30-Sep-21	£14,558,138	£5,463,202
39	01-Oct-21	31-Mar-22	£14,170,361	£5,024,612
40	01-Apr-22	30-Sep-22	£14,383,806	£4,597,706
41	01-Oct-22	31-Mar-23	£13,974,312	£4,164,368
42	01-Apr-23	30-Sep-23	£14,190,424	£3,743,368
43	01-Oct-23	31-Mar-24	£13,147,320	£3,315,857
44	01-Apr-24	30-Sep-24	£10,684,140	£2,919,771
45	01-Oct-24	31-Mar-25	£11,671,021	£2,597,892
46	01-Apr-25	30-Sep-25	£15,105,139	£2,246,283
47	01-Oct-25	31-Mar-26	£17,001,595	£1,791,214
48	01-Apr-26	30-Sep-26	£16,448,779	£1,279,011
49	01-Oct-26	31-Mar-27	£15,357,180	£783,463
50	01-Apr-27	30-Sep-27	£10,648,398	£320,802
51	01-Oct-27	31-Mar-28	-	-
52	01-Apr-28	30-Sep-28	-	-
53	01-Oct-28	31-Mar-29	-	-
54	01-Apr-29	30-Sep-29	-	-
55	01-Oct-29	31-Mar-30	-	-
56	01-Apr-30	30-Sep-30	-	-
57	01-Oct-30	31-Mar-31	-	-
58	01-Apr-31	30-Sep-31	-	-
59	01-Oct-31	31-Mar-32	-	-
60	01-Apr-32	30-Sep-32	-	-

Totals			£299,303,737	£279,983,044

Table 1.7


Table	1.7	Not Used

Table 1.8


Table	1.8	Approved Debt - Banks 18 Year AMBAC Wrapped

Period	Period Starting	Period Ending	Principal Repayment	Interest Payment

1	31-Dec-02	31-Mar-03	-	-
2	01-Apr-03	30-Sep-03	-	-
3	01-Oct-03	31-Mar-04	-	£1,078,753
4	01-Apr-04	30-Sep-04	-	£2,098,859
5	01-Oct-04	31-Mar-05	-	£2,930,965
6	01-Apr-05	30-Sep-05	-	£3,911,812
7	01-Oct-05	31-Mar-06	-	£4,790,912
8	01-Apr-06	30-Sep-06	-	£5,470,728
9	01-Oct-06	31-Mar-07	-	£6,091,014
10	01-Apr-07	30-Sep-07	-	£6,679,626
11	01-Oct-07	31-Mar-08	-	£7,239,652
12	01-Apr-08	30-Sep-08	-	£7,713,814
13	01-Oct-08	31-Mar-09	-	£8,133,578
14	01-Apr-09	30-Sep-09	-	£8,522,936
15	01-Oct-09	31-Mar-10	-	£8,858,849
16	01-Apr-10	30-Sep-10	-	£8,988,537
17	01-Oct-10	31-Mar-11	£4,929,042	£8,965,400
18	01-Apr-11	30-Sep-11	£4,037,656	£8,817,754
19	01-Oct-11	31-Mar-12	£10,384,250	£8,696,810
20	01-Apr-12	30-Sep-12	£10,149,146	£8,385,758
21	01-Oct-12	31-Mar-13	£12,551,562	£8,081,748
22	01-Apr-13	30-Sep-13	£14,075,351	£7,705,777
23	01-Oct-13	31-Mar-14	£14,777,838	£7,284,161
24	01-Apr-14	30-Sep-14	£12,014,199	£6,841,503
25	01-Oct-14	31-Mar-15	£13,594,320	£6,481,627
26	01-Apr-15	30-Sep-15	£16,170,755	£6,074,420
27	01-Oct-15	31-Mar-16	£13,732,463	£5,590,039
28	01-Apr-16	30-Sep-16	£12,170,930	£5,178,694
29	01-Oct-16	31-Mar-17	£14,194,880	£4,814,124
30	01-Apr-17	30-Sep-17	£15,031,201	£4,388,928
31	01-Oct-17	31-Mar-18	£19,636,821	£3,938,680
32	01-Apr-18	30-Sep-18	£20,998,830	£3,350,475
33	01-Oct-18	31-Mar-19	£21,230,113	£2,721,472
34	01-Apr-19	30-Sep-19	£20,914,686	£2,085,542
35	01-Oct-19	31-Mar-20	£20,618,903	£1,459,059
36	01-Apr-20	30-Sep-20	£28,090,791	£841,437
37	01-Oct-20	31-Mar-21	-	-
38	01-Apr-21	30-Sep-21	-	-
39	01-Oct-21	31-Mar-22	-	-
40	01-Apr-22	30-Sep-22	-	-
41	01-Oct-22	31-Mar-23	-	-
42	01-Apr-23	30-Sep-23	-	-
43	01-Oct-23	31-Mar-24	-	-
44	01-Apr-24	30-Sep-24	-	-
45	01-Oct-24	31-Mar-25	-	-
46	01-Apr-25	30-Sep-25	-	-
47	01-Oct-25	31-Mar-26	-	-
48	01-Apr-26	30-Sep-26	-	-
49	01-Oct-26	31-Mar-27	-	-
50	01-Apr-27	30-Sep-27	-	-
51	01-Oct-27	31-Mar-28	-	-
52	01-Apr-28	30-Sep-28	-	-
53	01-Oct-28	31-Mar-29	-	-
54	01-Apr-29	30-Sep-29	-	-
55	01-Oct-29	31-Mar-30	-	-
56	01-Apr-30	30-Sep-30	-	-
57	01-Oct-30	31-Mar-31	-	-
58	01-Apr-31	30-Sep-31	-	-
59	01-Oct-31	31-Mar-32	-	-
60	01-Apr-32	30-Sep-32	-	-

Totals			£299,303,737	£194,213,442

Tables 2.0 & 2.1


Tables	2.0 & 2.1	Approved Mezzanine Debt

Period	Period Starting	Period Ending	Principal Repayment	Interest Payment

1	31-Dec-02	31-Mar-03	-	£5,062,500
2	01-Apr-03	30-Sep-03	-	£10,125,000
3	01-Oct-03	31-Mar-04	-	£10,125,000
4	01-Apr-04	30-Sep-04	-	£10,125,000
5	01-Oct-04	31-Mar-05	-	£10,125,000
6	01-Apr-05	30-Sep-05	-	£10,125,000
7	01-Oct-05	31-Mar-06	-	£10,125,000
8	01-Apr-06	30-Sep-06	-	£10,125,000
9	01-Oct-06	31-Mar-07	-	£10,125,000
10	01-Apr-07	30-Sep-07	-	£10,125,000
11	01-Oct-07	31-Mar-08	-	£10,125,000
12	01-Apr-08	30-Sep-08	-	£10,125,000
13	01-Oct-08	31-Mar-09	-	£10,125,000
14	01-Apr-09	30-Sep-09	-	£10,125,000
15	01-Oct-09	31-Mar-10	-	£10,125,000
16	01-Apr-10	30-Sep-10	-	£10,125,000
17	01-Oct-10	31-Mar-11	£692,816	£10,125,000
18	01-Apr-11	30-Sep-11	£744,777	£10,073,039
19	01-Oct-11	31-Mar-12	£800,636	£10,017,180
20	01-Apr-12	30-Sep-12	£860,683	£9,957,133
21	01-Oct-12	31-Mar-13	£925,234	£9,892,582
22	01-Apr-13	30-Sep-13	£994,627	£9,823,189
23	01-Oct-13	31-Mar-14	£1,069,224	£9,748,592
24	01-Apr-14	30-Sep-14	£1,149,416	£9,668,400
25	01-Oct-14	31-Mar-15	£1,235,622	£9,582,194
26	01-Apr-15	30-Sep-15	£1,328,294	£9,489,522
27	01-Oct-15	31-Mar-16	£1,427,916	£9,389,900
28	01-Apr-16	30-Sep-16	£1,535,009	£9,282,807
29	01-Oct-16	31-Mar-17	£1,650,135	£9,167,681
30	01-Apr-17	30-Sep-17	£1,773,895	£9,043,921
31	01-Oct-17	31-Mar-18	£1,906,937	£8,910,879
32	01-Apr-18	30-Sep-18	£2,049,958	£8,767,858
33	01-Oct-18	31-Mar-19	£2,203,705	£8,614,111
34	01-Apr-19	30-Sep-19	£2,368,982	£8,448,834
35	01-Oct-19	31-Mar-20	£2,546,656	£8,271,160
36	01-Apr-20	30-Sep-20	£2,737,655	£8,080,161
37	01-Oct-20	31-Mar-21	£2,942,979	£7,874,837
38	01-Apr-21	30-Sep-21	£3,163,703	£7,654,113
39	01-Oct-21	31-Mar-22	£3,400,981	£7,416,835
40	01-Apr-22	30-Sep-22	£3,656,054	£7,161,762
41	01-Oct-22	31-Mar-23	£3,930,258	£6,887,558
42	01-Apr-23	30-Sep-23	£4,225,028	£6,592,788
43	01-Oct-23	31-Mar-24	£4,541,905	£6,275,911
44	01-Apr-24	30-Sep-24	£4,882,548	£5,935,268
45	01-Oct-24	31-Mar-25	£5,248,739	£5,569,077
46	01-Apr-25	30-Sep-25	£5,642,394	£5,175,422
47	01-Oct-25	31-Mar-26	£6,065,574	£4,752,242
48	01-Apr-26	30-Sep-26	£6,520,492	£4,297,324
49	01-Oct-26	31-Mar-27	£7,009,529	£3,808,288
50	01-Apr-27	30-Sep-27	£7,535,243	£3,282,573
51	01-Oct-27	31-Mar-28	£8,100,386	£2,717,430
52	01-Apr-28	30-Sep-28	£8,707,915	£2,109,901
53	01-Oct-28	31-Mar-29	£9,361,009	£1,456,807
54	01-Apr-29	30-Sep-29	£10,063,085	£754,731
55	01-Oct-29	31-Mar-30	-	-
56	01-Apr-30	30-Sep-30	-	-
57	01-Oct-30	31-Mar-31	-	-
58	01-Apr-31	30-Sep-31	-	-
59	01-Oct-31	31-Mar-32	-	-
60	01-Apr-32	30-Sep-32	-	-

Totals			£135,000,000	£433,014,511

Table 3.0


Table	3.0	Shareholder Fixed Amounts

Period	Period Starting	Period Ending	Principal Repayment	Interest Payment	Dividends	Tax Paid

1	31-Dec-02	31-Mar-03	-	£3,600,000	-	£1,529,714
2	01-Apr-03	30-Sep-03	-	£7,200,000	-	£1,019,809
3	01-Oct-03	31-Mar-04	-	£7,200,000	-	£6,160,956
4	01-Apr-04	30-Sep-04	-	£7,200,000	-	£4,447,240
5	01-Oct-04	31-Mar-05	-	£7,200,000	-	£5,984,989
6	01-Apr-05	30-Sep-05	-	£7,200,000	-	£5,472,406
7	01-Oct-05	31-Mar-06	-	£7,200,000	-	£6,370,060
8	01-Apr-06	30-Sep-06	-	£7,200,000	-	£6,070,842
9	01-Oct-06	31-Mar-07	-	£7,200,000	-	£6,857,661
10	01-Apr-07	30-Sep-07	-	£7,200,000	-	£6,595,388
11	01-Oct-07	31-Mar-08	-	£7,200,000	-	£6,878,918
12	01-Apr-08	30-Sep-08	-	£7,200,000	-	£6,784,408
13	01-Oct-08	31-Mar-09	-	£7,200,000	-	£6,688,233
14	01-Apr-09	30-Sep-09	-	£7,200,000	-	£6,720,291
15	01-Oct-09	31-Mar-10	-	£7,200,000	-	£7,795,329
16	01-Apr-10	30-Sep-10	-	£7,200,000	-	£7,436,983
17	01-Oct-10	31-Mar-11	-	£7,200,000	£27,363,684	£5,762,604
18	01-Apr-11	30-Sep-11	-	£7,200,000	£20,409,081	£6,320,731
19	01-Oct-11	31-Mar-12	-	£7,200,000	£19,264,153	£8,391,562
20	01-Apr-12	30-Sep-12	-	£7,200,000	£19,360,705	£7,701,285
21	01-Oct-12	31-Mar-13	-	£7,200,000	£14,911,371	£8,219,773
22	01-Apr-13	30-Sep-13	-	£7,200,000	£26,881,493	£8,046,944
23	01-Oct-13	31-Mar-14	-	£7,200,000	£26,523,366	£8,651,208
24	01-Apr-14	30-Sep-14	-	£7,200,000	£22,691,485	£8,449,787
25	01-Oct-14	31-Mar-15	-	£7,200,000	£24,829,637	£9,515,812
26	01-Apr-15	30-Sep-15	-	£7,200,000	£30,216,757	£9,160,470
27	01-Oct-15	31-Mar-16	-	£7,200,000	£29,059,506	£8,756,142
28	01-Apr-16	30-Sep-16	-	£7,200,000	£22,634,395	£8,890,918
29	01-Oct-16	31-Mar-17	-	£7,200,000	£21,564,734	£8,845,187
30	01-Apr-17	30-Sep-17	-	£7,200,000	£15,605,473	£8,860,431
31	01-Oct-17	31-Mar-18	£2,967,918	£7,200,000	£19,585,870	£8,349,988
32	01-Apr-18	30-Sep-18	£3,205,352	£6,962,567	£29,055,936	£8,520,135
33	01-Oct-18	31-Mar-19	£3,461,780	£6,706,138	£30,157,360	£8,101,126
34	01-Apr-19	30-Sep-19	£3,738,723	£6,429,196	£27,893,157	£8,240,796
35	01-Oct-19	31-Mar-20	£4,037,820	£6,130,098	£29,297,025	£8,342,793
36	01-Apr-20	30-Sep-20	£4,360,846	£5,807,073	£28,302,434	£8,308,794
37	01-Oct-20	31-Mar-21	£4,709,714	£5,458,205	£33,339,281	£7,975,422
38	01-Apr-21	30-Sep-21	£5,086,491	£5,081,428	£56,886,979	£8,086,546
39	01-Oct-21	31-Mar-22	£5,493,410	£4,674,509	£19,072,035	£8,163,456
40	01-Apr-22	30-Sep-22	£5,932,883	£4,235,036	£12,923,795	£8,137,820
41	01-Oct-22	31-Mar-23	£6,407,513	£3,760,405	£13,423,005	£8,211,699
42	01-Apr-23	30-Sep-23	£6,920,114	£3,247,804	£13,419,539	£8,187,073
43	01-Oct-23	31-Mar-24	£7,473,724	£2,694,195	£12,982,158	£8,293,284
44	01-Apr-24	30-Sep-24	£8,071,622	£2,096,297	£9,867,394	£8,257,880
45	01-Oct-24	31-Mar-25	£8,717,351	£1,450,567	£6,446,553	£8,340,955
46	01-Apr-25	30-Sep-25	£9,414,739	£753,179	£12,791,951	£8,313,263
47	01-Oct-25	31-Mar-26	-	-	£24,257,877	£7,526,339
48	01-Apr-26	30-Sep-26	-	-	£28,957,406	£7,788,647
49	01-Oct-26	31-Mar-27	-	-	£32,277,820	£7,765,698
50	01-Apr-27	30-Sep-27	-	-	£34,030,821	£7,773,348
51	01-Oct-27	31-Mar-28	-	-	£19,375,830	£7,146,249
52	01-Apr-28	30-Sep-28	-	-	£25,301,288	£7,355,282
53	01-Oct-28	31-Mar-29	-	-	£20,164,410	£6,835,492
54	01-Apr-29	30-Sep-29	-	-	£13,841,535	£7,008,756
55	01-Oct-29	31-Mar-30	-	-	£19,116,440	£7,067,745
56	01-Apr-30	30-Sep-30	-	-	£16,302,890	£7,048,082
57	01-Oct-30	31-Mar-31	-	-	£16,306,926	£7,111,829
58	01-Apr-31	30-Sep-31	-	-	£14,977,246	£7,090,580
59	01-Oct-31	31-Mar-32	-	-	£18,699,555	£7,624,673
60	01-Apr-32	30-Sep-32	-	-	£16,578,993	£7,446,642
61	01-Oct-32	30-Dec-32	-	-	-	£7,624,023

Totals			£90,000,000	£285,086,696	£976,949,348	£450,430,497

Table 3.1


Table	3.1	Shareholder Subordinated Debt

Period	Period Starting	Period Ending	Principal Repayment	Interest Payment

1	31-Dec-02	31-Mar-03	-	£3,600,000
2	01-Apr-03	30-Sep-03	-	£7,200,000
3	01-Oct-03	31-Mar-04	-	£7,200,000
4	01-Apr-04	30-Sep-04	-	£7,200,000
5	01-Oct-04	31-Mar-05	-	£7,200,000
6	01-Apr-05	30-Sep-05	-	£7,200,000
7	01-Oct-05	31-Mar-06	-	£7,200,000
8	01-Apr-06	30-Sep-06	-	£7,200,000
9	01-Oct-06	31-Mar-07	-	£7,200,000
10	01-Apr-07	30-Sep-07	-	£7,200,000
11	01-Oct-07	31-Mar-08	-	£7,200,000
12	01-Apr-08	30-Sep-08	-	£7,200,000
13	01-Oct-08	31-Mar-09	-	£7,200,000
14	01-Apr-09	30-Sep-09	-	£7,200,000
15	01-Oct-09	31-Mar-10	-	£7,200,000
16	01-Apr-10	30-Sep-10	-	£7,200,000
17	01-Oct-10	31-Mar-11	-	£7,200,000
18	01-Apr-11	30-Sep-11	-	£7,200,000
19	01-Oct-11	31-Mar-12	-	£7,200,000
20	01-Apr-12	30-Sep-12	-	£7,200,000
21	01-Oct-12	31-Mar-13	-	£7,200,000
22	01-Apr-13	30-Sep-13	-	£7,200,000
23	01-Oct-13	31-Mar-14	-	£7,200,000
24	01-Apr-14	30-Sep-14	-	£7,200,000
25	01-Oct-14	31-Mar-15	-	£7,200,000
26	01-Apr-15	30-Sep-15	-	£7,200,000
27	01-Oct-15	31-Mar-16	-	£7,200,000
28	01-Apr-16	30-Sep-16	-	£7,200,000
29	01-Oct-16	31-Mar-17	-	£7,200,000
30	01-Apr-17	30-Sep-17	-	£7,200,000
31	01-Oct-17	31-Mar-18	£2,967,918	£7,200,000
32	01-Apr-18	30-Sep-18	£3,205,352	£6,962,567
33	01-Oct-18	31-Mar-19	£3,461,780	£6,706,138
34	01-Apr-19	30-Sep-19	£3,738,723	£6,429,196
35	01-Oct-19	31-Mar-20	£4,037,820	£6,130,098
36	01-Apr-20	30-Sep-20	£4,360,846	£5,807,073
37	01-Oct-20	31-Mar-21	£4,709,714	£5,458,205
38	01-Apr-21	30-Sep-21	£5,086,491	£5,081,428
39	01-Oct-21	31-Mar-22	£5,493,410	£4,674,509
40	01-Apr-22	30-Sep-22	£5,932,883	£4,235,036
41	01-Oct-22	31-Mar-23	£6,407,513	£3,760,405
42	01-Apr-23	30-Sep-23	£6,920,114	£3,247,804
43	01-Oct-23	31-Mar-24	£7,473,724	£2,694,195
44	01-Apr-24	30-Sep-24	£8,071,622	£2,096,297
45	01-Oct-24	31-Mar-25	£8,717,351	£1,450,567
46	01-Apr-25	30-Sep-25	£9,414,739	£753,179
47	01-Oct-25	31-Mar-26	-	-
48	01-Apr-26	30-Sep-26	-	-
49	01-Oct-26	31-Mar-27	-	-
50	01-Apr-27	30-Sep-27	-	-
51	01-Oct-27	31-Mar-28	-	-
52	01-Apr-28	30-Sep-28	-	-
53	01-Oct-28	31-Mar-29	-	-
54	01-Apr-29	30-Sep-29	-	-
55	01-Oct-29	31-Mar-30	-	-
56	01-Apr-30	30-Sep-30	-	-
57	01-Oct-30	31-Mar-31	-	-
58	01-Apr-31	30-Sep-31	-	-
59	01-Oct-31	31-Mar-32	-	-
60	01-Apr-32	30-Sep-32	-	-
61	01-Oct-32	30-Dec-32	-	-

Totals			£90,000,000	£285,086,696

Table 3.2


Table	3.2	Equity Amounts

Period	Period Starting	Period Ending	Dividend

1	31-Dec-02	31-Mar-03	-
2	01-Apr-03	30-Sep-03	-
3	01-Oct-03	31-Mar-04	-
4	01-Apr-04	30-Sep-04	-
5	01-Oct-04	31-Mar-05	-
6	01-Apr-05	30-Sep-05	-
7	01-Oct-05	31-Mar-06	-
8	01-Apr-06	30-Sep-06	-
9	01-Oct-06	31-Mar-07	-
10	01-Apr-07	30-Sep-07	-
11	01-Oct-07	31-Mar-08	-
12	01-Apr-08	30-Sep-08	-
13	01-Oct-08	31-Mar-09	-
14	01-Apr-09	30-Sep-09	-
15	01-Oct-09	31-Mar-10	-
16	01-Apr-10	30-Sep-10	-
17	01-Oct-10	31-Mar-11	£27,363,684
18	01-Apr-11	30-Sep-11	£20,409,081
19	01-Oct-11	31-Mar-12	£19,264,153
20	01-Apr-12	30-Sep-12	£19,360,705
21	01-Oct-12	31-Mar-13	£14,911,371
22	01-Apr-13	30-Sep-13	£26,881,493
23	01-Oct-13	31-Mar-14	£26,523,366
24	01-Apr-14	30-Sep-14	£22,691,485
25	01-Oct-14	31-Mar-15	£24,829,637
26	01-Apr-15	30-Sep-15	£30,216,757
27	01-Oct-15	31-Mar-16	£29,059,506
28	01-Apr-16	30-Sep-16	£22,634,395
29	01-Oct-16	31-Mar-17	£21,564,734
30	01-Apr-17	30-Sep-17	£15,605,473
31	01-Oct-17	31-Mar-18	£19,585,870
32	01-Apr-18	30-Sep-18	£29,055,936
33	01-Oct-18	31-Mar-19	£30,157,360
34	01-Apr-19	30-Sep-19	£27,893,157
35	01-Oct-19	31-Mar-20	£29,297,025
36	01-Apr-20	30-Sep-20	£28,302,434
37	01-Oct-20	31-Mar-21	£33,339,281
38	01-Apr-21	30-Sep-21	£56,886,979
39	01-Oct-21	31-Mar-22	£19,072,035
40	01-Apr-22	30-Sep-22	£12,923,795
41	01-Oct-22	31-Mar-23	£13,423,005
42	01-Apr-23	30-Sep-23	£13,419,539
43	01-Oct-23	31-Mar-24	£12,982,158
44	01-Apr-24	30-Sep-24	£9,867,394
45	01-Oct-24	31-Mar-25	£6,446,553
46	01-Apr-25	30-Sep-25	£12,791,951
47	01-Oct-25	31-Mar-26	£24,257,877
48	01-Apr-26	30-Sep-26	£28,957,406
49	01-Oct-26	31-Mar-27	£32,277,820
50	01-Apr-27	30-Sep-27	£34,030,821
51	01-Oct-27	31-Mar-28	£19,375,830
52	01-Apr-28	30-Sep-28	£25,301,288
53	01-Oct-28	31-Mar-29	£20,164,410
54	01-Apr-29	30-Sep-29	£13,841,535
55	01-Oct-29	31-Mar-30	£19,116,440
56	01-Apr-30	30-Sep-30	£16,302,890
57	01-Oct-30	31-Mar-31	£16,306,926
58	01-Apr-31	30-Sep-31	£14,977,246
59	01-Oct-31	31-Mar-32	£18,699,555
60	01-Apr-32	30-Sep-32	£16,578,993
61	01-Oct-32	30-Dec-32	-

Totals			£976,949,348

Table 3.3


Table	3.3	Tax Amounts

Period	Period Starting	Period Ending	Tax Paid

1	31-Dec-02	31-Mar-03	£1,529,714
2	01-Apr-03	30-Sep-03	£1,019,809
3	01-Oct-03	31-Mar-04	£6,160,956
4	01-Apr-04	30-Sep-04	£4,447,240
5	01-Oct-04	31-Mar-05	£5,984,989
6	01-Apr-05	30-Sep-05	£5,472,406
7	01-Oct-05	31-Mar-06	£6,370,060
8	01-Apr-06	30-Sep-06	£6,070,842
9	01-Oct-06	31-Mar-07	£6,857,661
10	01-Apr-07	30-Sep-07	£6,595,388
11	01-Oct-07	31-Mar-08	£6,878,918
12	01-Apr-08	30-Sep-08	£6,784,408
13	01-Oct-08	31-Mar-09	£6,688,233
14	01-Apr-09	30-Sep-09	£6,720,291
15	01-Oct-09	31-Mar-10	£7,795,329
16	01-Apr-10	30-Sep-10	£7,436,983
17	01-Oct-10	31-Mar-11	£5,762,604
18	01-Apr-11	30-Sep-11	£6,320,731
19	01-Oct-11	31-Mar-12	£8,391,562
20	01-Apr-12	30-Sep-12	£7,701,285
21	01-Oct-12	31-Mar-13	£8,219,773
22	01-Apr-13	30-Sep-13	£8,046,944
23	01-Oct-13	31-Mar-14	£8,651,208
24	01-Apr-14	30-Sep-14	£8,449,787
25	01-Oct-14	31-Mar-15	£9,515,812
26	01-Apr-15	30-Sep-15	£9,160,470
27	01-Oct-15	31-Mar-16	£8,756,142
28	01-Apr-16	30-Sep-16	£8,890,918
29	01-Oct-16	31-Mar-17	£8,845,187
30	01-Apr-17	30-Sep-17	£8,860,431
31	01-Oct-17	31-Mar-18	£8,349,988
32	01-Apr-18	30-Sep-18	£8,520,135
33	01-Oct-18	31-Mar-19	£8,101,126
34	01-Apr-19	30-Sep-19	£8,240,796
35	01-Oct-19	31-Mar-20	£8,342,793
36	01-Apr-20	30-Sep-20	£8,308,794
37	01-Oct-20	31-Mar-21	£7,975,422
38	01-Apr-21	30-Sep-21	£8,086,546
39	01-Oct-21	31-Mar-22	£8,163,456
40	01-Apr-22	30-Sep-22	£8,137,820
41	01-Oct-22	31-Mar-23	£8,211,699
42	01-Apr-23	30-Sep-23	£8,187,073
43	01-Oct-23	31-Mar-24	£8,293,284
44	01-Apr-24	30-Sep-24	£8,257,880
45	01-Oct-24	31-Mar-25	£8,340,955
46	01-Apr-25	30-Sep-25	£8,313,263
47	01-Oct-25	31-Mar-26	£7,526,339
48	01-Apr-26	30-Sep-26	£7,788,647
49	01-Oct-26	31-Mar-27	£7,765,698
50	01-Apr-27	30-Sep-27	£7,773,348
51	01-Oct-27	31-Mar-28	£7,146,249
52	01-Apr-28	30-Sep-28	£7,355,282
53	01-Oct-28	31-Mar-29	£6,835,492
54	01-Apr-29	30-Sep-29	£7,008,756
55	01-Oct-29	31-Mar-30	£7,067,745
56	01-Apr-30	30-Sep-30	£7,048,082
57	01-Oct-30	31-Mar-31	£7,111,829
58	01-Apr-31	30-Sep-31	£7,090,580
59	01-Oct-31	31-Mar-32	£7,624,673
60	01-Apr-32	30-Sep-32	£7,446,642
61	01-Oct-32	30-Dec-32	£7,624,023

Totals			£450,430,497

ANNEX 4 - Eligible Equity subscribed by LUL

1 LUL may subscribe for a combination of Base Equity or Eligible Equity ( by way of a combination of shares and/or Shareholder Subordinated Debt and/or any junior funding instrument apart from the shares and/or Shareholder Subordinated Debt that is owned proportionally by the shareholders of Infraco JNP from time to time ( Other Shareholder Funds ) ) in compliance with the directions given by the Arbiter pursuant to this Schedule. The shares and Shareholder Subordinated Debt and Other Shareholder Funds subscribed for by LUL pursuant to such directions are referred to as LUL Option Shares and LUL Option Subordinated Debt and LUL Option Other Shareholder Funds respectively and references to those instruments below shall be construed as including a reference to Base Equity and Eligible Equity. For purpose of the remainder of this Annex, reference to LUL Option Shares and LUL Option Subordinated Debt shall also include reference to LUL Option Other Shareholder Funds.

2 The LUL Option Shares to be subscribed by LUL shall be a separate class of shares and the rights and restrictions attached thereto are set out in the remaining paragraphs of this Annex. The LUL Option Subordinated Debt will have such rights to interest and capital repayment as comply with the directions of the Arbiter and will have only such other rights, and will be subject to such restrictions as are described in the remaining paragraphs of this Annex. The rights and restrictions of Other Shareholder Funds shall be similar to those for the shares and/or Shareholder Subordinated Debt, as appropriate for the nature of such instruments. If LUL Option Shares and LUL Option Subordinated Debt are issued together then no transfer of any LUL Option Shares shall be made without also transferring the corresponding amount of LUL Option Subordinated Debt.

Capital and Income

3 The LUL Option Shares shall participate pari passu with the ordinary shares in Infraco in any distribution ( income or capital ) subject to arrangements entered into pursuant to paragraph 8.

Voting Rights

4 The holders of the LUL Option Shares shall be entitled to receive notice of and be entitled to attend all general meetings of shareholders but shall not be entitled to vote on any matters other than in respect of their class rights as set out in the remaining paragraphs of this Annex. The holders of the LUL Option Subordinated Debt shall be entitled to receive notice of and to attend all general meetings of other shareholders in Infraco who hold Shareholder Subordinated Debt in Infraco which are convened pursuant to the instrument creating the debt but shall not be entitled to vote on any matters other than in respect of their class rights as set out in paragraphs 5, 6 and 7 of this Annex.

Pre-emption Rights

5 The terms and conditions of any pre-emptive rights are to be agreed at the time of subscription.

Special Rights

6 For as long as any LUL Option Shares ( or, as the case may be, LUL Option Subordinated Debt ) remain in issue except either (A) with the consent of the holders of the issued LUL Option Shares ( or LUL Option Subordinated Debt, as the case may be ) or (B) where the action is taken in distress circumstances: (a) no further shares ( or as the case may be, Shareholder Subordinated Debt ( or, as the case may be, LUL Option Subordinated Debt ) ) which rank in priority to or pari passu with the LUL Option Shares as regards participation in either profits or assets of Infraco may be created or issued unless, in respect of any shares ( or, as the case may be, Shareholder Subordinated Debt ) that are to rank pari passu, the Statutory Arbiter has allowed for a rate of return on such shares ( or, as the case may be, Shareholder Subordinated Debt ) as Base Equity or Eligible Equity; and

(b) the rights attached to the ordinary shares and Shareholder Subordinated Debt which is not LUL Option Subordinated Debt shall not be modified, varied or abrogated nor shall there be any reduction in Infraco's share capital or any uncalled liability thereon or the amount of the capital redemption reserve in any manner which either requires the consent of the court or is in connection with any purchase by Infraco of its own shares.

7 Except in the case of where the action is taken in distress circumstances, if Infraco proposes to issue any further equity share capital ( or Shareholder Subordinated Debt ) that is to rank pari passu with LUL Option Shares ( or, as the case may be, LUL Option Subordinated Debt ) it shall first procure that an offer is made by any proposed subscribers to acquire the whole of the LUL Option Shares ( and, where applicable, LUL Option Subordinated Debt ) of LUL, for cash on completion prior to the first subscription, at a price equal to the fair market value of such shares and subordinated debt, such price to be directed by the Statutory Arbiter if not agreed by LUL and the person or persons who will acquire such shares and subordinated debt.

8 (a) If Infraco proposes to issue any further equity share capital and/or Shareholder Subordinated Debt that is to rank behind the LUL Option Shares and/or LUL Option Subordinated Debt as to dividends or interest respectively it shall provide LUL with an opportunity to participate in the proposed issue pro rata to its existing holdings save that any shares or debt issued to LUL will be on the basis as set out in paragraph 4.

(b) For the purposes of paragraph 8(a), equity share capital and/or Shareholder Subordinated Debt shall be regarded as ranking behind ( and shall not be regarded as ranking pari passu with ) the ordinary shares and Shareholder Subordinated Debt as to dividends or interest respectively if they are not to receive dividends or interest until the ordinary shares and/or Shareholder Subordinated Debt have received the Equity Rate of Return for that year.

Relationship with debt finance

(a) LUL Option Shares and LUL Option Subordinated Debt shall be subject to any requirements in respect of debt finance to which ordinary equity and/or other Shareholder Subordinated Debt is subject, save that any requirements relating to security shall be replaced by those set out in paragraph 9(b) of this Annex 4. For clarity, it is agreed that this includes an obligation on the holders of LUL Option Shares and LUL Option Shareholder Subordinated Debt to accede to any intercreditor agreements and arrangements then in place between Infraco, Funders and the subordinated financiers of Infraco and/or its holding company, including any arrangements relating to subordination, turnover and related matters, as a "Junior Creditor" ( as that term is defined in the Intercreditor Agreement ( being the agreement of that name which is one of the Funding Agreements approved by LUL for the purposes of Approved Debt ) and for the purposes of these arrangements the LUL Option Shares and LUL Option Subordinated Debt shall constitute "Borrower Shares" and "Borrower Debt" respectively ( as those terms are defined in the Intercreditor Agreement referred to above ); and for purposes of the payment cascade any dividend or other distribution ( whether in cash or in kind ) in respect of any of the LUL Option Shares, including any bonus issue or return of such capital, or any payment or discharge by way of set-off or counterclaim in respect of LUL Option Subordinated Debt ( including principal, interest or other fees or costs ) made to LUL would constitute a "Distribution" ( as that term is defined in the Intercreditor Agreement referred to above ). Once the indebtedness of Infraco to the Funders shall have been repaid, LUL shall enter into intercreditor arrangements with the remaining financiers of Infraco and/or its holding company on substantially the same basis as the subordination arrangements to which the Funders were a party and with LUL being subordinated to the Mezzanine Funders. Accession of LUL to any such intercreditor arrangements shall not oblige the holders of LUL Option Shares and LUL Option Subordinated Debt to create any charge or other similar security in favour of the Funders, Mezzanine Funders or otherwise.

(b) The holders of the LUL Option Shares and LUL Option Subordinated Debt shall grant security interests over the LUL Option Shares and LUL Option Subordinated Debt in favour of the Senior Funders and the Mezzanine Funders. The liability of the holders of the LUL Option Shares and LUL Option Subordinated Debt under any such security shall be limited so that upon the occurrence of a default under the Funding Agreements all liabilities of the holder under that security shall be discharged in full upon the holder transferring the LUL Option Shares and LUL Option Subordinated Debt to the relevant Funder ( or its nominee ) in accordance with the terms of the security. The foregoing provisions of this paragraph 9(b) shall not apply if the holder of the LUL Option Shares and LUL Option Subordinated Debt has granted any other Security Interest to the Funders and instead such person shall grant security over the LUL Option Shares and LUL Option Subordinated Debt in a form acceptable to the Funders.

10 Any Dispute concerning any matter referred to in this Annex shall be referred to the Statutory Arbiter, for directions as to resolution of the Dispute.

Proportionality

11 In order to achieve the proportionality of sharing in benefits of performance of the Infraco, as described in clause 9A2(b) of this Schedule 1.9, the proportions of LUL Option Shares and LUL Option Subordinated Debt will be determined in accordance with the following calculations: (a) the value of each of the shares and the Shareholder Subordinated Debt held by the Funders prior to the subscription of LUL Option Shares and LUL Option Subordinated Debt will be valued by taking the present value of the forecast cash flows for each of those instruments for the remainder of the Contract Period ( for clarity, disregarding the further Fixed Amounts or amendments to the existing Fixed Amounts attributable to the Eligible Equity to be provided by LUL Option Shares and LUL Subordinated Debt ) discounted at the rate of return prescribed by the Statutory Arbiter as the appropriate rate of return for equity funds subscribed at the Periodic Review, where the value of the equity would be "X ", the value of the Shareholder Subordinated Debt "Y ", and the value of the total shareholder funds "Z ";

(b) the division of the amounts of the LUL Option Shares and LUL Option Subordinated Debt subscribed will be in the proportion of X/Z and Y/Z, respectively;

(c) the price per share of LUL Option Shares to be issued by Infraco will be X divided by the number of shares outstanding prior to the new financing, and the number of LUL Option Shares will be X/Z times the total funds subscribed by LUL, divided by this price; and

(d) the premium or discount to the face amount of LUL Option Subordinated Debt to be issued by Infraco will be Y divided by the face amount of Shareholder Subordinated Debt outstanding prior to the financing, and the face amount of LUL Option Subordinated Debt will be Y/Z times the total funds subscribed by LUL, divided by this premium or discount.

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