NETWORK RAIL INFRASTRUCTURE LIMITED. and. NEXUS (the trading name of the Tyne and Wear Passenger Transport Executive) and [OPERATOR]
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1 DATED 20[ ] NETWORK RAIL INFRASTRUCTURE LIMITED and NEXUS (the trading name of the Tyne and Wear Passenger Transport Executive) and [OPERATOR] Draft NOVATION OF TRACK ACCESS AGREEMENT with provision for RE-NOVATION
2 THIS DEED is dated 20[ ] BETWEEN: (1) NETWORK RAIL INFRASTRUCTURE LIMITED (CN ) whose registered office is at King s Place, 90 York Way, London, N1 9AG ( Network Rail ); (2) NEXUS (the trading name of the Tyne and Wear Passenger Transport Executive) whose principal address is at Nexus House, St. James Boulevard, Newcastle upon Tyne, NE1 4AX ( Nexus ); and (3) [OPERATOR] (CN [ ]) whose registered office is at [ ] (the Operator ). WHEREAS (A) (B) (C) Network Rail and Nexus are parties to the Track Access Agreement, under which Network Rail has granted Nexus, as operator of the Tyne and Wear Metro light rail transit system, rights of access to the railway track between Pelaw Junction and South Hylton Station via Sunderland Station. Nexus is proposing to grant the Concession to the Operator with effect from the Start Date. The parties have agreed to transfer Nexus s rights and obligations under the Track Access Agreement to the Operator, for the duration of the Concession, on and subject to the provisions of this Deed. NOW IT IS AGREED as follows: 1. INTERPRETATION 1.1 In this Deed capitalised terms have, unless the context requires otherwise, the meaning set out below: Concession a 7-9 year concession to operate the Tyne and Wear Metro light rail transit system, to be granted to the Operator by Nexus; New Operator has the meaning given in clause 4.4; ORR the Office of Rail Regulation or any successor body; Re-novation Date has the meaning given in clause 4.2; Start Date 0200 on 1 April 2010, or such later date on which the Concession commences as notified to Network Rail pursuant to clause 2.2; Track Access Agreement the track access agreement dated 22 December 1999 between Network Rail (then Railtrack plc) and Nexus, as supplemented from time to time. 1.2 Clause headings are inserted for convenience of reference only and shall be ignored in the interpretation of this Deed. 1.3 In this Deed, unless the context otherwise requires: 1
3 2. NOVATION references to clauses and schedules are to be construed as references to the clauses of, and schedules to, this Deed and references to this Deed include its schedules; references to (or to any specified provision of) this Deed or any other document shall be construed as references to this Deed, that provision or that document as in force for the time being and as from time to time amended or supplemented or replaced in accordance with its terms or, as the case may be, with the agreement of the relevant parties; words importing the plural shall include the singular and vice versa; references to a person shall be construed as including, without limitation, references to an individual, firm, company, corporation, unincorporated association or body of persons and any government entity; references to any statute or statutory provision include any statute or statutory provision which amends, extends, consolidates or replaces the same, or which has been amended, extended, consolidated or replaced by the same, and shall include any orders, regulations, instruments or other subordinate legislation made under the relevant statute; and references to a person shall be construed as including a reference to its successors and assigns. 2.1 The provisions of this clause 2 are subject to the condition precedent that the ORR has approved the novation of Nexus s interest in the Track Access Agreement to the Operator pursuant to this Deed. 2.2 Nexus shall: give Network Rail not less than 48 hours notice of any anticipated change to the Start Date in advance of the Start Date (except where Nexus itself has less notice, in which case Nexus shall give Network Rail as much notice as is reasonably practicable in the circumstances); and not permit the Start Date to be deferred by more than one week without the prior written approval of Network Rail (not to be unreasonably withheld or delayed). 2.3 With effect on and from the Start Date (subject to clause 2.1): Network Rail releases Nexus from Nexus s obligations, duties and liabilities under the Track Access Agreement which relate to the period commencing on and including the Start Date; Nexus releases Network Rail from Network Rail s obligations, duties and liabilities under the Track Access Agreement which relate to the period commencing on and including the Start Date; the Operator assumes the rights, obligations, duties and liabilities of Nexus under the Track Access Agreement which relate to the period commencing on and including the Start Date; 2
4 2.3.4 the Operator agrees to perform in favour of Network Rail its obligations under the Track Access Agreement which relate to the period commencing on and including the Start Date; each of Network Rail, Nexus and the Operator agree that, as at and from the Start Date, the Track Access Agreement constitutes an effective agreement between Network Rail and the Operator; all references in the Track Access Agreement to Nexus shall be read and construed as references to the Operator, in place of Nexus, including the references to Nexus in clause 9.2(A)(2) and the definition of Insolvency Event as those provisions are amended as referred to below; the provisions of clause 9.2(A)(2) of the Track Access Agreement shall be deemed to be deleted and replaced with the words 9.2(A)(2) an Insolvency Event occurs in relation to Nexus ; in the definition of Insolvency Event in clause 1.1 of the Track Access Agreement, the words any successor of Nexus to this Agreement which is not a publicly owned entity shall be deemed to be deleted and replaced with the word Nexus ; the provisions of clause 12.3, clause 12.4 and Schedule 9 of the Track Access Agreement shall be disapplied; the contact details for the Operator shall be as follows: ATTENTION: [ ] ADDRESS: [ ] [ ] TELEPHONE: [ ] the Operator and Network Rail shall be bound by all notices given and all determinations made under the Track Access Agreement prior to the Start Date (except where the same are in dispute or have not been agreed within any permitted time period); and no time limit or period shall be affected by this Deed and such time limit or period shall be determined as though the Operator had been Nexus prior to the Start Date. 2.4 In respect of obligations, duties and liabilities under the Track Access Agreement which relate to the period prior to the Start Date: Network Rail and Nexus shall continue to have the rights and remedies against each other as are set out in or arise in relation to the Track Access Agreement, and the Operator shall not be liable to Network Rail in respect of any such obligations, duties and liabilities; and nothing in this Deed shall operate to discharge Network Rail or Nexus from any liability in respect of duties performed or not performed prior to the Start Date. 3
5 3. CONTRACT MANAGEMENT 3.1 Network Rail and the Operator shall copy to Nexus each notice or communication it receives under or in connection with the Track Access Agreement (other than notices or communications of a routine day to day nature). 3.2 Where the Operator is failing to perform its obligations under the Track Access Agreement, Nexus shall on reasonable request assist Network Rail in the management by Network Rail of the non-performance by the Operator. This clause 3.2 is without prejudice to the rights of Network Rail under the Track Access Agreement and the other provisions of this Deed. 4. RE-NOVATION 4.1 This clause 4 applies where either: the Concession is to terminate or expire and the circumstances described in clause 5.2 apply; or Network Rail wishes to exercise a right to terminate or suspend the Track Access Agreement and the circumstances described in clause 6.4 apply. 4.2 Where clause 4 applies, the Re-novation Date shall be: in the case of clause 4.1.1, the date of termination or expiry of the Concession; or in the case of clause 4.1.2, the date of proposed termination or suspension of the Track Access Agreement (in accordance with clause 6.1.1). 4.3 The provisions of this clause 4 are subject to the conditions precedent that: the ORR has approved the novation of the Operator s interest in the Track Access Agreement to the New Operator pursuant to this Deed; and where clause applies, Nexus has consulted with Network Rail as part of the procurement process for selecting a third party successor operator, in advance of any appointment, and has taken into consideration as part of that procurement process any representations made by Network Rail. 4.4 With effect on and from the Re-novation Date (subject to clause 4.3), Nexus shall: take from the Operator; procure that a wholly owned subsidiary of Nexus takes from the Operator; or procure that a third party successor operator of the Concession who has obtained a licence to operate passenger trains under the Railways Act 1993 (or any legislation superseding or replacing the same) takes from the Operator, a novation of the Track Access Agreement on the terms set out in clause 4.5 (Nexus or such wholly owned subsidiary or third party successor operator being for these purposes the New Operator ), by delivering to Network Rail and the Operator a duly completed novation deed in substantially the form set out in schedule 1, duly executed by Nexus and (if different) the New Operator. 4
6 4.5 Network Rail, the Operator and Nexus, and by executing the novation deed any other New Operator, agree that with effect on and from the Re-novation Date: Network Rail releases the Operator from the Operator s obligations, duties and liabilities under the Track Access Agreement (whether arising prior to, on or after the Re-novation Date); the Operator releases Network Rail from Network Rail s obligations, duties and liabilities under the Track Access Agreement (whether arising prior to, on or after the Re-novation Date); the New Operator assumes the rights, obligations, duties and liabilities of the Operator under the Track Access Agreement (whether arising prior to, on or after the Re-novation Date); the New Operator agrees to perform in favour of Network Rail its obligations under the Track Access Agreement (whether arising prior to, on or after the Renovation Date); each of Network Rail, the Operator and the New Operator agrees that, as at and from the Re-novation Date, the Track Access Agreement constitutes an effective agreement between Network Rail and the New Operator; all references in the Track Access Agreement to the Operator shall be read and construed as references to the New Operator, in place of the Operator; where the New Operator is Nexus or a wholly-owned subsidiary of Nexus, the original provisions of clause 9.2(A)(2), clause 12.3, clause 12.4 and schedule 9 of the Track Access Agreement and the definition of Insolvency Event in clause 1.1 of the Track Access Agreement shall be re-applied in full; the contact details for the New Operator shall be as stated in the novation deed; the New Operator and Network Rail shall be bound by all notices given and all determinations made under the Track Access Agreement prior to the Renovation Date (except where the same are in dispute or have not been agreed within any permitted time period); and no time limit or period shall be affected by this Deed and such time limit or period shall be determined as though the New Operator had been the Operator prior to the Re-novation Date. 4.6 The Operator, Nexus and Network Rail irrevocably and unconditionally consent to any novation made in accordance with this clause. 4.7 Nothing contained in this clause shall affect any right or power that Nexus may have against the Operator under the concession agreement for the Concession. 4.8 The parties agree to take such further action and execute such documents as may be reasonably requested by Network Rail or Nexus to give effect to the novation described in this clause. 4.9 The parties acknowledge and agree that this clause 4 may operate on more than one occasion. 5
7 5. TERMINATION OR EXPIRY OF THE CONCESSION 5.1 If Nexus proposes to terminate the Concession, or the Concession is due to expire, in either case in circumstances where the Operator is to cease being the operator of the Tyne and Wear Metro light rail transit system, Nexus shall notify Network Rail specifying the proposed date of termination or expiry (which shall be not less than 3 months after the date of the notice, except in an emergency). 5.2 Where Nexus notifies Network Rail pursuant to clause 5.1, unless Network Rail and Nexus agree on another course of action the provisions of clause 4 shall apply. 6. PROPOSED TERMINATION OR SUSPENSION OF THE TRACK ACCESS AGREEMENT If Network Rail wishes to exercise a right to terminate the Track Access Agreement or a right to serve any suspension or termination notice on the Operator in respect of the Track Access Agreement: 6.1 Network Rail shall give notice to Nexus, specifying: the proposed date of termination or suspension (which shall be not less than 3 months after the date of the notice); and details of the circumstances giving rise to the right to serve the suspension or termination notice; 6.2 Network Rail waives any right it may have, pending the proposed date of termination or suspension, to terminate or suspend the Track Access Agreement by reason of such circumstances; 6.3 if the Operator is in default of the Track Access Agreement, Nexus may (but is not obliged to) remedy such event of default on behalf of the Operator; and 6.4 unless any event of default is remedied or Network Rail and Nexus agree on another course of action, the provisions of clause 4 shall apply. 7. ASSIGNMENT BY NEXUS 7.1 Clause clause 12.4 and schedule 9 of the Track Access Agreement shall be deemed to be set out in full in this Deed, with: references in clauses 12.3 and 12.4 to this Agreement (howsoever expressed) being deemed to be references to this Deed; references in schedule 9 to the Track Access Agreement (howsoever expressed) being deemed to be references to this Deed; and recital (A) in schedule 9 being deleted. 7.2 Nexus and Network Rail agree to be bound by such provisions accordingly. 6
8 8. CONTRACT IN FORCE The terms and conditions of this Deed represent the entire agreement between the parties relating to the novation and re-novation of the Track Access Agreement, and except as specifically amended by this Deed all the terms and conditions of the Track Access Agreement remain in full force and effect. 9. COUNTERPARTS This Deed may be executed in two counterparts which, taken together, shall constitute one and the same document. Either party may enter into this Deed by signing either of such counterparts. 10. RIGHTS OF OTHER PARTIES Nothing in this Deed shall confer or purport to confer upon any person which is not a party to this Deed any benefit or right to enforce any term of this Deed or the Track Access Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999, other than any New Operator who has executed a novation deed pursuant to clause GOVERNING LAW This Deed shall be governed by and construed in accordance with the law of England and the parties hereby submit to the exclusive jurisdiction of the English courts. IN WITNESS of which the parties have caused this document to be executed and delivered as a Deed the day and year first written above [Network Rail Infrastructure Limited] [Nexus] [Operator] 7
9 SCHEDULE 1 Form of re-novation deed (for a re-novation pursuant to clause 4) This deed is made and delivered on [ ], and relates to a Novation of Track Access Agreement with provision for Re-novation dated [ ] (as amended and supplemented from time to time, the Novation Deed ) between Network Rail Infrastructure Limited ( Network Rail ), Nexus the trading name of the Tyne and Wear Passenger Transport Executive ( Nexus ), and [Operator] (the Operator ). Terms defined in the Novation Deed have the same meaning in this deed, unless otherwise stated. 1. [insert name of New Operator] (the New Operator ) hereby: 1.1 accepts the transfer of all of the Operator s rights and obligations under the Track Access Agreement in accordance with clause 4 of the Novation Deed; 1.2 accepts and confirms the application of, and undertakes to be bound by and comply with, the provisions of the Novation Deed; and 1.3 undertakes for the benefit of Network Rail, the Operator and (unless the New Operator is Nexus) Nexus to be bound by the Track Access Agreement as if it was an original party to it, subject to and in accordance with the provisions of clause 4 of the Novation Deed. 2. The New Operator s contact details are: ATTENTION: [ ] ADDRESS: [ ] [ ] TELEPHONE: [ ] 3. This deed shall be governed by and construed in accordance with the laws of England and Wales. 4. This deed may be entered into in any number of counterparts and by the parties to it in separate counterparts, all of which when taken together shall constitute one and the same document. 5. No term of this deed is enforceable by a person who is not a party to it, other than Network Rail, the Operator and Nexus who may enforce the provisions of this deed. Executed as a deed by: [New Operator] 8
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