PPP Contracts

SCHEDULE 5.9 - Key System Assets

Designation as Key System Assets

1.1 With effect from the Transfer Date and subject to paragraph 1.2, all property, rights and liabilities of Infraco and REW ( Acton ) Limited ( for so long as it is a subsidiary of Infraco ) from time to time during the term of the Contract shall be designated as key system assets ( Key System Assets ) and shall constitute key system assets for the purposes of section 213 of the GLA Act.

1.2 The following property, rights and liabilities shall not be designated as Key System Assets and shall not constitute key system assets for the purposes of section 213 of the GLA Act: (a) the rights and liabilities of Infraco under any contract of employment;

(b) the rights and liabilities of Infraco under the Contract, any Transfer Scheme on the Expiry Date or Contract Disposal Date, as the case may be, under paragraph 10.1, or Contract Disposition Agreement;

(c) any balance on an account with a bank or other financial institution and any financial asset acquired by Infraco for normal treasury management purposes out of all or any part of any balance from time to time on any such account;

(d) such other assets as the parties may agree from time to time under paragraph 12.1 or as LUL may de-designate as Key System Assets under paragraph 12.2;

(e) the rights and liabilities of Infraco under the Guarantee or any funding arrangements of Infraco save for funding arrangements relating to any operating leases, or finance leases or other financial arrangements under which Infraco procures use or possession of non-financial assets used by Infraco in the provision of the Services or non-financial assets in respect of which Infraco is to provide the Services; and

(f) save for rights and liabilities in respect of the non-financial assets used by Infraco in the provision of the Services or relating to non-financial assets in respect of which Infraco is to provide the Services over which security is granted, all rights and liabilities of Infraco pursuant to the Funding Agreements, the Put Option Agreement and the Stand Still Agreement.

Designation as Primary Assets

2 The following property, rights and liabilities shall be designated as primary assets ( Primary Assets ) with effect from the following dates: (a) all property, rights and liabilities falling within the categories listed in the Annex to this Schedule with effect from the Transfer Date or, if later, the date of their acquisition or creation;

(b) any additional property, rights and liabilities designated under paragraph 5 during the term of the Contract, from the date of their designation;

(c) any property or right which is vested in Infraco and used for the purpose of maintaining, replacing, repairing or renewing any property designated as Primary Assets pursuant to paragraph 2(a) or (b) and which forms or replaces part or all of such designated property on completion of such maintenance, replacement, renewal or repair, from the date of their use for such purpose and, subject to clause 12.4, to the extent that any Primary Asset which is of a category listed in paragraphs (a) to (d) of the Annex to this Schedule is replaced in the ordinary course of maintenance and renewal and is thereafter surplus to requirements, such Primary Asset shall cease to be designated as a Primary Asset;

(d) all property, rights and liabilities of Infraco under any Key Sub-Contract designated under paragraph 9, from the date of their designation;

(e) all property, rights and liabilities of Infraco under any contract relating to Major Enhancement Works or Major Enhancement Services designated under paragraph 9A, from the date of their designation; and

(f) all property, rights and liabilities of Infraco under any contract relating to the CTRL Works Agreement designated under paragraph 9B, from the date of their designation.

Consent to certain transactions

3 For the purposes of section 216 of the GLA Act, and subject to paragraph 4.1, LUL shall procure that consent is given by London Regional Transport to Infraco: (a) if and to the extent that the Key System Assets are property or rights and are not designated as Primary Assets and to the extent that any such Key System Assets or any transactions in respect of such Key System Assets contemplated in paragraphs (i) or (ii) below has a financial value or effect of up to £500,000:
(i) in the ordinary course of business, to transfer or agree to transfer any such Key System Assets or any interest in, or right over, any such Key System Assets; and

(ii) in the ordinary course of business, to create or extinguish, or agree to create or extinguish, any interest in, or right over, any such Key System Assets,
and, for the avoidance of doubt, to the extent that any such Key System Assets or any transactions in respect of any such Key System Assets has a financial value or effect which exceeds £500,000, the consent of LUL shall be required to any such transaction;

(b) if and to the extent that the Key System Assets are liabilities and are not designated as Primary Assets, to enter into any agreement under which any such liability is released or discharged, or transferred to some other person; and

(c) to create or extinguish, agree to create or extinguish, any interest in, or right over any Key System Asset to the extent the same is expressly required by, or integral to, any Transaction Document.

Security interests

4.1 Subject to clause 57.1 of the Contract and paragraph 3(c) of this Schedule, for the purpose of section 216 of the GLA Act, LUL shall procure that consent is given by London Regional Transport to Infraco, if and to the extent that the Key System Assets are property or rights ( and whether or not designated as Primary Assets ), creating or agreeing to create any Security Interest over any Key System Asset to the extent that the terms of any such Security Interest are such that: (a) if the relevant Key System Asset becomes the subject of a Transfer Scheme, it shall be fully and automatically released from the relevant Security Interest immediately before the coming into force of that Transfer Scheme; and

(b) it shall not be enforced or enforceable until the date of such Key System Asset ceasing to be designated as such other than for the appointment, by the holder of the Security Interest, of an administrative receiver, provided such administrative receiver shall not be entitled to, and shall not exercise any power to, sell, lease or otherwise dispose of any interest in any Key System Asset other than in accordance with paragraph 3 above or with the relevant authority's ( as such term is defined under the GLA Act ) prior written consent.

4.2 Infraco shall accordingly not create or agree to create a Security Interest over any Key System Assets except on the terms permitted under paragraph 4.1.

4.3 Infraco shall provide LUL with such information as it may reasonably require in relation to any Security Interest over any of Infraco's property or rights.

Designation of additional property, rights and liabilities

5.1 LUL may at any time, and from time to time, during the term of the Contract by serving a notice on Infraco specifying the property, rights or liabilities in question, designate any or all of the Key System Assets as Primary Assets. Such designation shall take effect from the delivery of such notice and may refer to all or certain categories of property, rights or liabilities provided that the designation of such property, rights or liabilities is reasonably necessary for securing that the Services may continue to be provided by Infraco or a Successor Infraco, or securing that services may continue to be provided by any other Infraco, on the Expiry Date or Contract Disposal Date or otherwise facilitating the transfer of the provision of the Services at such time.

5.2 Any such notice shall be accompanied by a statement of the reasons why LUL has so designated such property, rights or liabilities and shall specify the time ( not being less than twenty-eight (28) days from the date of giving the notice ) within which Infraco may make representations or objections with respect to the designation. If Infraco makes representations or objections which cannot be resolved by agreement within a period of fifty-six (56) days from the date of LUL's notice, Infraco may refer the dispute for resolution in accordance with the Dispute Resolution Agreement for determination of whether or not the relevant property, rights or liabilities should cease to be so designated.

5.3 In the event of there being any outstanding dispute on the Expiry Date or Contract Disposal Date in respect of any such designation, then, except to the extent that LUL and Infraco may otherwise agree, such dispute shall be deemed to cease immediately before the Expiry Date or Contract Disposal Date and the relevant property, rights and liabilities shall not cease to be designated as Primary Assets on or after the Expiry Date or Contract Disposal Date.

Effective Designation

6 Subject to paragraphs 3 and 4, Infraco shall, for the purpose of ensuring that LUL may designate as Key System Assets or Primary Assets the relevant property, rights and liabilities, keep vested in Infraco at all times during the term of the Contract such property, rights and liabilities as LUL may reasonably require in order for Infraco to be able to comply with: (a) the Contract;

(b) any contracts of employment with Infraco Staff;

(c) any Key Sub-Contracts;

(d) any contracts relating to Major Enhancement Works or Major Enhancement Services; and

(e) any applicable safety legislation, safety regulations or safety standards and the LUL Safety Case.

Corrective action notices

7 LUL may effect a designation for purposes of paragraph 5 above by provisions to that effect in any Corrective Action Notice.

Property, Rights and Liabilities

8 LUL, in designating as a Primary Asset the property, rights and liabilities of Infraco ( whether under a contract or otherwise ), may restrict such rights and liabilities or property so designated to such extent as it may reasonably consider appropriate, including to those rights and liabilities or property arising after, or otherwise relating to a period after, a particular time ( including the period after the expiry of the Contract ) or to those relating only to the Services or a particular part thereof.

Designation of Key Sub-Contracts

9 LUL shall be entitled to designate the property, rights and liabilities of Infraco under any Key Sub-Contract as a Primary Asset at any time during the Contract Period by serving a notice on Infraco specifying the relevant property, rights or liabilities. Such designation shall take effect from delivery of such notice.

Designation of Major Enhancement contracts

9A LUL shall be entitled to designate the property, rights and liabilities of Infraco under any contract ( excluding any Key Sub-Contract ( where the provisions of paragraph 9 shall apply ), contract of employment and any funding arrangement ) entered into by Infraco which relates to Major Enhancement Works or Major Enhancement Services as a Primary Asset at any time during the Contract Period by serving a notice on Infraco specifying the relevant property, rights or liabilities. Such designation shall take effect from delivery of such notice.

Designation of contracts under CRTL Works Agreement

9B LUL shall be entitled to designate the property, rights and liabilities of Infraco under any contract ( excluding any Key Sub-Contract ( where the provisions of paragraph 9 shall apply ), contract of employment and any funding arrangement ) entered into by Infraco which relates to the CTRL Works Agreement as a Primary Asset at any time during the Contract Period by serving a notice on Infraco specifying the relevant property, rights or liabilities. Such designation shall take effect from delivery of such notice. Provided that if Infraco is entitled to terminate the CTRL Works Agreement in accordance with its terms and it gives notice in writing to LUL that it wishes to exercise such right, LUL shall promptly de-designate the property, rights and liabilities of Infraco under the CTRL Works Agreement as Primary Assets and Key System Assets and Infraco shall be entitled to terminate the CTRL Works Agreement.

Transfer of Primary Assets and/or Key System Assets

Option Arrangements

10.1 LUL hereby grants to Infraco the right to require LUL to procure the making of, and Infraco hereby grants to LUL, or such person as LUL may nominate, the right to make a Transfer Scheme for the transfer of any or all of such property, rights or liabilities as may be designated as Primary Assets and/or Key System Assets on the Expiry Date or Contract Disposal Date, as the case may be. Each such right may be exercised no later than ninety (90) days before the Expiry Date or upon execution of a Contract Disposition Agreement, as the case may be, by serving notice on the other party specifying the Primary Assets and/or Key System Assets in question. Following any such exercise of such rights LUL shall procure the making of one or more Transfer Schemes for the transfer of the Primary Assets and/or Key System Assets specified in any such notice before, or within forty (40) days after, the Expiry Date, or on the Contract Disposal Date, as the case may be. Any Primary Assets and/or Key System Assets which are not so transferred shall cease to be designated as Primary Assets and Key System Assets or Key System Assets, as the case may be, forty (40) days after the Expiry Date, or on the Contract Disposal Date, as the case may be.

10.2 Not used

Possession of Primary Assets

10.3 On the coming into force of a Transfer Scheme, Infraco shall deliver up to LUL ( or such other person as it may specify including a Successor Infraco ) possession of such Primary Assets and/or Key System Assets as may be transferred under that Transfer Scheme in accordance with the processes and procedures developed under Schedule 5.6 ( Handback ) of the Contract.

Provision of information to LUL

11.1 Infraco shall, as soon as reasonably practicable in each case, notify LUL of any assets ( together with a description of such assets ) acquired by it during the term of the Contract which fall within one or more of the categories of assets identified or designated as Primary Assets in paragraph 2 or pursuant to paragraph 5 above and, if requested by LUL, provide LUL with a copy of such contracts as are Primary Assets.

11.2 Infraco shall provide such additional information as LUL may reasonably require in order to satisfy itself, before any property, rights or liabilities are designated as Primary Assets after the Start Date, that, if they are so designated, they will be vested in Infraco. Such information may include details of any Security Interests over such property, rights and liabilities.

De-designation

12.1 LUL and Infraco may agree in writing at any time during the term of the Contract that a Key System Asset shall cease to be designated as a Key System Asset or that a Primary Asset shall cease to be designated as a Primary Asset, and the relevant property, right or liability shall cease to be designated upon such agreement coming into effect.

12.2 LUL may at any time during the term of the Contract, by serving notice on Infraco specifying the Key System Assets in question, cause such Key System Assets to cease to be so designated. Key System Assets shall cease to be designated Key System Assets on the date specified in such notice. Such right may only be exercised in respect of Key System Assets which are not Primary Assets.

12.3 LUL may in addition, at any time during the term of the Contract by serving notice on Infraco specifying the Primary Assets in question, cause such Primary Assets to cease to be so designated. Primary Assets shall cease to be designated Primary Assets on the date specified in such notice.

12.4 Infraco may, at any time during the term of the Contract, serve notice on LUL specifying (i) that a Primary Asset is permanently withdrawn from service and (ii) that Infraco believes that there is no reasonable likelihood that the Primary Asset in question will be reintroduced into service by Infraco and Infraco shall serve such notice on LUL as soon as reasonably practicable after Infraco becomes aware that such Primary Asset is to be permanently withdrawn from Service. If LUL believes that there is no reasonable likelihood that the Primary Asset in question will be reintroduced into service, LUL shall serve a notice upon Infraco that such Primary Asset shall cease to be so designated and shall cease to be designated a Key System Asset and LUL shall serve such notice on Infraco as soon as reasonably practicable after LUL decides whether there is or is not a reasonable likelihood that such Primary Asset will be reintroduced into service. The Primary Asset and Key System Asset in question shall cease to be so designated on the date specified in the notice. Where LUL believes that there is a reasonable likelihood that the Primary Asset in question will be reintroduced into service, LUL shall, at its option ( notified in writing to Infraco ): (a) acquire from Infraco such Primary Asset for £nil consideration, subject to paying any reasonable removal costs; or

(b) require Infraco to store such Primary Asset in accordance with Good Industry Practice, subject to Infraco procuring storage where there is no storage available ( and which Infraco does not otherwise need for the performance of the Services ) on that part of the Underground Network for which Infraco is responsible and subject to, in either case, LUL paying Infraco's reasonable storage costs associated therewith, until LUL serves further notice on Infraco ( which it may do at its discretion at any time ) in accordance with this paragraph 12.4.

12.5 Where a Key System Asset ( which is not designated a Primary Asset ) is permanently withdrawn from service and there is no reasonable likelihood that the Key System Asset in question will be reintroduced into service, such Key System Asset shall cease to be so designated on the date it is permanently withdrawn from service.

12.6 Infraco may, at any time during the term of the Contract, serve notice on LUL specifying (i) that Infraco proposes to terminate a Key Sub-Contract in accordance with its terms and (ii) that Infraco has made appropriate alternative arrangements to replace the Key Sub-Contract and Infraco shall serve such notice on LUL as soon as reasonably practicable after such termination is proposed. If LUL is reasonably satisfied that the alternative arrangements are appropriate in the circumstances, LUL shall serve a notice upon Infraco that such Key Sub-Contract shall cease to be designated as a Primary Asset and/or as a Key System Asset ( as the case may be ) and the same shall cease to be so designated on the date specified in the notice and LUL shall serve such notice on Infraco as soon as reasonably practicable after LUL is satisfied that such alternative arrangements are appropriate in the circumstances.

13 Where, in accordance with the provisions of this Schedule 5.9, Infraco removes, replaces, transfers or disposes of any Asset, or creates or extinguishes any interest in any Assets, Infraco shall have no liability under the general law to the extent that such law prohibits the removal of, or dealing with, fixtures by a tenant.

THE ANNEX

1 Primary Assets shall include all property, rights and liabilities falling within the following categories:

(a) vehicles used on the permanent way of the Underground Network;

(b) signalling systems;

(c) the permanent way;

(d) signalling and other ( whether standard or customised ) specialist plant, machinery, tools and test equipment engaged in maintenance;

(e) Information and the means of reading and updating Information;

(f) the Infraco Leases, the LUL Leases and the Depot Sub-leases;

(g) Key IPRs;

(h) shares in the capital of REW ( Acton ) Limited; and

(i) the following contracts:

1. Agreement regarding 31" and 36" Wheels between SSL and Adtranz dated 1 January 1999.

2. Agreement regarding 28" Wheels between SSL and Adtranz dated 1 January 1999.

3. Agreement for the Supply of Bearings between SSL and NSK-RHP UK Limited dated 1 September 1999.

4. Agreement regarding Gearwheels between SSL and Anderson Precision Gears Ltd dated 1 March 2000.

5. Agreement regarding Maintenance of Track and Signals on the Wimbledon Branch between SSL and Amec Rail Ltd dated 25 October 1999.

6. Agreement regarding Cleaning of Station and Premises -on the District Line between SSL and Exclusive Group PLC dated 16 April 1998.

7. Agreement regarding Train Cleaning between SSL and Swirl Service Group dated 1 December 1995.

8. Agreement regarding Maintenance of Heavy Duty Lifts at Earls Court; Hammersmith; Gloucester Road; Shadwell and Wapping Stations between SSL and Otis PLC dated 1 February 1998.

9. Agreement regarding Flood Mitigation ( Phase 4 ) and Concrete Strengthening on the Jubilee Line Extension between SSL and Gleeson MCL Ltd ( Mabey ) dated 2 October 2000.

10. Agreement regarding Maintenance of Escalators at South Kensington between SSL and Otis PLC dated 7 June 1995.

11. Agreement regarding Earth Structure Project and Embankment Stabilisation at 3 Sites on the District Line between SSL and Amey Construction dated 3 December 1998.

12. Agreement regarding Earth Structure Project and Embankment Stabilisation Works on the East London Line between SSL and Kvaerner E&C UK Limited dated 15 January 1999.

13. Agreement regarding Covered Way 58 Strengthening works at High Street Kensington Station between SSL and John Mowlem Construction PLC dated 4 May 1999.

14. Agreement regarding Paddington Station Metropolitan and Circle Lines "Lawns" Ticket Office Upgrade between SSL and Cleshar Contract Services Limited dated 22 October 1998.

15. Agreement regarding East Ham Station Refurbishment between SSL and Birse Construction Ltd dated 3 December 1999.

16. Agreement regarding Pinner Bridge and mobility impaired person Lifts between SSL and Birse Construction Ltd dated 10 September 1999.

17. Agreement regarding Upton Park Refurbishment between SSL and Birse Construction Ltd dated 3 December 1999.

18. Agreement regarding Earls Court Station Modernisation between SSL and Cleshar Contract Services Limited dated 1 April 2000.

19. Agreement regarding Earl's Court Station Modernisation between SSL and Cleshar Contract Services Limited dated 12 April 2000.

20. Agreement regarding Baker Street Control Centre Communications System Upgrade for the Metropolitan and Circle Lines between SSL and Foxboro Great Britain Limited dated 18 September 2000.

21. Agreement regarding District Line Help Points between SSL and Bryen & Langley Ltd dated 5 July 2000.

22. Agreement regarding Station Cleaning Services between SSL and Swirl Service Group dated 14 September 2000.

23. Agreement regarding Metropolitan, Circle and East London Lines Jointless Track Circuit Transmitter Replacement between SSL and Westinghouse Signals Ltd dated 31 January 1999.

24. Agreement regarding Maintenance of Lighting and Low Voltage Equipment between SSL and Parkersell ( L&E ) Services Ltd dated 1 November 1999.

25. Agreement regarding Train Cleaning on the District Line between SSL and Blue Diamond Services Ltd dated 1 March 1999.

26. Agreement regarding East London Line Re-Signalling ( Phase II ) between SSL and Adtranz dated 17 September 1999.

27. Agreement regarding King's Cross CTRL Development Project Multi-Discipline Design Service between SSL and OVE Arup Partnership Ltd dated 3 March 1999.

28. Agreement regarding Secure Access to Key Track Technical Skills between SSL and Brown & Root Projects Limited dated 15 August 2000.

29. Agreement regarding Safety Critical Resource between SSL and Finchpalm Limited dated 9 April 2001.

30. Agreement regarding Safety Critical Resource between SSL and Cleshar Contract Services Limited dated 9 April 2001.

31. Agreement regarding Track Cleaning between SSL and Cleshar Contract Services Limited dated 20 July 1997.

32. Agreement regarding Track Labour for Maintenance between SSL and Cleshar Contract Services Limited dated 3 August 1998.

33. Agreement regarding Refurbishment of Euston Square and Great Portland Street Stations between SSL and Cleshar Contract Services Limited dated 11 January 2001.

34. Agreement regarding Replacement of Bridge D136 between SSL and Gleeson MCL Ltd ( Mabey ) dated 10 June 2000.

35. Agreement regarding Bridge D136 between SSL and Gleeson MCL Ltd ( Mabey ) dated 15 June 2000.

36. Agreement regarding Earth Structure Stabilisation at Chiswick Park between SSL and Cementation Foundations Skanska Ltd dated 20 August 2001.

37. Agreement regarding Harrow on the Hill to North Harrow Track Replacement between SSL and Grant Rail Limited dated 19 October 2000.

38. Agreement regarding Corporate Track Alliance Programme at Chorleywood to Moor Park between SSL and Grant Rail Limited dated 29 August 2000.

39. Agreement regarding North Harrow to Harrow on the Hill Track Renewal between SSL and Grant Rail Limited dated 1 November 2000.

40. Agreement regarding King's Cross Refurbishment of Escalators 2, 7 and 9 between SSL and Kone ( O&K Escalators Ltd ) dated 7 April 1999.

41. Agreement regarding New Escalators 2 and 8 at King's Cross Station between SSL and Kone ( O&K Escalators Ltd ) dated 15 November 1999.

42. Agreement regarding Refurbishment of Escalator 1 and 2 at Rotherhithe Station between SSL and Otis PLC dated 14 February 2001.

43. Agreement regarding Station Cleaning between SSL and Blue Diamond Services Ltd dated 15 February 2001.

44. Agreement regarding Maintenance of Track and Signals on the District Line Wimbledon Branch between SSL and Amec Rail Ltd dated 1 August 1996.

45. Agreement regarding Maintenance of Gas, Heating, Water, Tunnel Ventilation and Piped Services between SSL and Dalkia Technical Services Ltd dated 11 October 1998.

46. Agreement regarding Maintenance of CCTV Communications Systems and Associated Equipment between SSL and Initial Electronic SecurityServices Limited dated 26 April 2000.

47. Agreement regarding D78 Surface Stock Bogie Replacement between SSL and ABB Daimler Benz Transportation Ltd dated 20 March 1998.

48. Agreement regarding Metropolitan Line "A" Stock Safety Modification between SSL and TMU ( Acton ) Ltd dated 16 September 1999.

49. Agreement regarding Replacement of "C69" Stock Sector Bars between SSL and TMU ( Acton ) Ltd dated 18 October 1999.

50. Agreement regarding Stock Derail Repair for Unit "D78" between SSL and Alstom Train Services dated 16 June 2000.

51. Agreement regarding "A" Stock Flash Shields between SSL and British Mica Co Ltd dated 18 April 2000.

52. Agreement regarding "C" Stock Minor Modifications: Labour between SSL and ATS dated 19 October 2000.

53. Agreement regarding "C" Stock Minor Works Autocoupler Contact Blocks between SSL and Radenton dated 20 August 2000.

54. Agreement regarding Embankment Stabilisation at Chiswick Park between SSL and Cementation Foundation Skanska Limited dated 20 August 2002.

55. Agreement regarding Wimbledon Park Cutting between SSL and Gleeson MCL dated 28 January 2002.

56. Agreement regarding Repeat Maintenance Avoidance ( Phase 2 ) between SSL and Cleshar Contract Services Limited dated 7 February 2002.

57. Agreement regarding Renewal of Boundary Fencing between SSL and Birse Metro Limited dated 26 February 2002.

58. Agreement regarding Enabling Works - Undercutting Elm Park to Hornchurch between SSL and Strukton Railinfra UK Limited dated 31 May 2002.

59. Agreement regarding Ballast Under-Cutting - Barbican to Farringdon between SSL and Strukton Railinfra UK Limited dated 14 November 2002.

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