EX-10.6.1



 





Exhibit 10.6.1




SECURED TERM LOAN FACILITY AGREEMENT




for a




R48,5 Million Loan

R76,5 Million Loan




to




Borrower




THE GREATER NELSPRUIT UTILITY

COMPANY (PROPRIETARY) LIMITED




granted by




Lender and Underwriter




DEVELOPMENT BANK OF

SOUTHERN AFRICA LIMITED




Security Trustee

NEDCOR INVESTMENT BANK LIMITED




WHITE & CASE

LIMITED LIABILITY PARTNERSHIP




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	SECURED TERM LOAN FACILITY AGREEMENT	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	1	 	PURPOSE AND DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	2	 	THE LOAN	 	 	31	 
	 
	 	 	 	 	 	 	 	 	 	 
	3	 	ADVANCES	 	 	32	 
	 
	 	 	 	 	 	 	 	 	 	 
	4	 	INTEREST, INTEREST PERIODS, FEES AND INTEREST ON
OVERDUE SUMS	 	 	36	 
	 
	 	 	 	 	 	 	 	 	 	 
	5	 	REPAYMENT AND REDUCTIONS, PREPAYMENT/
MANDATORY PREPAYMENT/CANCELLATION	 	 	39	 
	 
	 	 	 	 	 	 	 	 	 	 
	6	 	FEES AND EXPENSES	 	 	40	 
	 
	 	 	 	 	 	 	 	 	 	 
	7	 	PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS	 	 	43	 
	 
	 	 	 	 	 	 	 	 	 	 
	8	 	REPRESENTATIONS AND WARRANTIES	 	 	47	 
	 
	 	 	 	 	 	 	 	 	 	 
	9	 	UNDERTAKINGS, INFORMATION REPORTING, PROJECT ACCOUNTS,
RATIO LIMITS AND AGREEMENTS WITH THE COUNCIL	 	 	53	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.1	 	 	Positive Undertakings
	 	 	53	 
	 

	 	 	9.2	 	 	Further Positive Undertakings
	 	 	56	 
	 

	 	 	9.3	 	 	Project Accounts
	 	 	65	 
	 

	 	 	9.4	 	 	Negative Undertakings
	 	 	72	 
	 

	 	 	9.5	 	 	Maintenance of Value and Ratio Limits
	 	 	75	 
	 

	 	 	9.6	 	 	Obligations of the Borrower in respect of any agreement with the Council
	 	 	76	 
	 
	 	 	 	 	 	 	 	 	 	 
	10	 	CONDITIONS	 	 	76	 
	 
	 	 	 	 	 	 	 	 	 	 
	11	 	EVENTS OF DEFAULT	 	 	77	 
	 
	 	 	 	 	 	 	 	 	 	 
	12	 	TRUSTEE UNDERTAKING AND INDEMNITIES	 	 	84	 
	 
	 	 	 	 	 	 	 	 	 	 
	13	 	UNLAWFULNESS, INCREASED COSTS, ALTERNATIVE INTEREST
RATES	 	 	91	 
	 
	 	 	 	 	 	 	 	 	 	 
	14	 	SET-OFF AND PRO RATA PAYMENTS	 	 	96	 






(i)









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	15

	 	ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES
	 	 	98	 
	 
	 	 	 	 	 	 
	16

	 	AGENT, SECURITY TRUSTEE AND REFERENCE BANK
	 	 	100	 
	 
	 	 	 	 	 	 
	17

	 	ENFORCEMENT AND APPROPRIATIONS
	 	 	108	 
	 
	 	 	 	 	 	 
	18

	 	NOTICES AND OTHER MATTERS
	 	 	109	 
	 
	 	 	 	 	 	 
	19

	 	GOVERNING LAW
	 	 	114	 
	 
	 	 	 	 	 	 
	20

	 	JURISDICTION
	 	 	114	 
	 
	 	 	 	 	 	 
	21

	 	EXECUTION
	 	 	115	 
	 
	 	 	 	 	 	 
	SCHEDULE 1
	 	 	 	 
	THE LENDERS AND THEIR COMMITMENTS
	 	 	 	 
	PART A
	 	 	 	 
	DBSA LOAN FACILITY	 	 	117	 
	 
	 	 	 	 	 	 
	SCHEDULE 1
	 	 	 	 
	PART B
	 	 	 	 
	DBSA UNDERWRITING/PARTIAL RISK FACILITY	 	 	118	 
	 
	 	 	 	 	 	 
	SCHEDULE 2
	 	 	 	 
	PART A
	 	 	 	 
	FORM OF INITIAL DRAWDOWN NOTICE	 	 	119	 
	 
	 	 	 	 	 	 
	SCHEDULE 2
	 	 	 	 
	PART B
	 	 	 	 
	FORM OF SUBSEQUENT DRAWDOWN NOTICE	 	 	121	 
	 
	 	 	 	 	 	 
	SCHEDULE 2
	 	 	 	 
	PART C
	 	 	 	 
	FORM OF NOTICE TO LENDERS	 	 	123	 
	 
	 	 	 	 	 	 
	SCHEDULE 3
	 	 	 	 
	PART A
	 	 	 	 
	DOCUMENTS AND EVIDENCE REQUIRED AS CONDITIONS PRECEDENT	 	 	124	 
	 
	 	 	 	 	 	 
	SCHEDULE 3
	 	 	 	 
	PART B
	 	 	 	 
	TIMING OF CONDITIONS PRECEDENT	 	 	130	 
	 
	 	 	 	 	 	 
	SCHEDULE 4
	 	 	 	 
	FORM OF SUBSTITUTION CERTIFICATE	 	 	132	 






(ii)









 






	 	 	 	 	 
	 	 	Page
	SCHEDULE 5
	 	 	 	 
	SPONSOR SUPPORT AGREEMENT

	 	 	137	 
	 
	 	 	 	 
	SCHEDULE 6
	 	 	 	 
	OWNERSHIP OBLIGATION

	 	 	172	 
	 
	 	 	 	 
	SCHEDULE 7
	 	 	 	 
	ELIGIBLE COSTS

	 	 	174	 
	 
	 	 	 	 
	SCHEDULE 8
	 	 	 	 
	RATIO LIMITS

	 	 	175	 
	 
	 	 	 	 
	SCHEDULE 9
	 	 	 	 
	REPAYMENT INSTALMENTS AND IN’TEREST
	 	 	 	 
	PART A
	 	 	 	 
	DBSA LOAN FACILITY

	 	 	178	 
	 
	 	 	 	 
	SCHEDULE 9
	 	 	 	 
	REPAYMENT INSTALMENTS AND INTEREST
	 	 	 	 
	PART B
	 	 	 	 
	DBSA UNDERWRITING/PARTIAL RISK FACILITY

	 	 	181	 
	 
	 	 	 	 
	SCHEDULE 10
	 	 	 	 
	FEES, REFERENCE RATES AND CONDITIONS
	 	 	 	 
	PART A
	 	 	 	 
	DBSA LOAN FACILITY

	 	 	184	 
	 
	 	 	 	 
	SCHEDULE 10
	 	 	 	 
	FEES, REFERENCE RATES AND CONDITIONS
	 	 	 	 
	PART B
	 	 	 	 
	DBSA UNDERWRITING / PARTIAL RISK FACILITY

	 	 	186	 
	 
	 	 	 	 
	SCHEDULE 11
	 	 	 	 
	FORM OF GOLDEN SHARE AGREEMENT

	 	 	188	 
	 
	 	 	 	 
	ANNEXURE “A”
	 	 	 	 
	RIGHTS AND PRIVILEGES ATTACHING TO
THE “A” PREFERENCE SHARES

	 	 	195	 
	 
	 	 	 	 
	SCHEDULE 12
	 	 	 	 
	PART IA
	 	 	 	 
	FORM OF AGENT APPOINTMENT LETTER AGREEMENT

	 	 	199	 
	 
	 	 	 	 
	SCHEDULE 12
	 	 	 	 
	PART 1B
	 	 	 	 






(iii)









 





	 	 	 	 	 	 	 
	 	 	 	 	Page
	FORM OF AGENT ACCESSION MEMORANDUM	 	 	201	 
	 
	 	 	 	 	 	 
	SCHEDULE 12
	 	 	 	 
	PART 2
	 	 	 	 
	FORM OF TRUSTEE ACCESSION MEMORANDUM	 	 	203	 
	 
	 	 	 	 	 	 
	SCHEDULE 13
	 	 	 	 
	PART I
	 	 	 	 
	FORM OF GENERAL NOTARIAL BOND	 	 	205	 
	 
	 	 	 	 	 	 
	SCHEDULE 13
	 	 	 	 
	PART II
	 	 	 	 
	FORM OF SPECIAL NOTARIAL BOND	 	 	229	 
	 
	 	 	 	 	 	 
	SCHEDULE 13
	 	 	 	 
	PART III
	 	 	 	 
	FORM OF PLEDGE AND CESSION OF CLAIMS	 	 	242	 
	 
	 	 	 	 	 	 
	SCHEDULE 13
	 	 	 	 
	PART IV
	 	 	 	 
	FORM OF TRUST DEED	 	 	249	 
	 
	1.

	 	DEFINITIONS
	 	 	250	 
	 
	 	 	 	 	 	 
	2.

	 	SETTLEMENT
	 	 	253	 
	 
	 	 	 	 	 	 
	3

	 	NAME
	 	 	254	 
	 
	 	 	 	 	 	 
	4

	 	OBJECTS
	 	 	254	 
	 
	 	 	 	 	 	 
	5

	 	COMMENCEMENT
	 	 	254	 
	 
	 	 	 	 	 	 
	6

	 	IRREVOCABILITY AND REGISTRATION
	 	 	254	 
	 
	 	 	 	 	 	 
	7

	 	INCOME AND CAPITAL
	 	 	254	 
	 
	 	 	 	 	 	 
	8

	 	FACILITIES
	 	 	255	 
	 
	 	 	 	 	 	 
	9

	 	TRUSTEES
	 	 	256	 
	 
	 	 	 	 	 	 
	10

	 	PERIOD OF OFFICE OF THE TRUSTEE AND APPOINTMENT OF NEW TRUSTEE
	 	 	257	 
	 
	 	 	 	 	 	 
	11

	 	POWERS OF THE TRUSTEE
	 	 	259	 






(iv)









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	12

	 	RECORDS
	 	 	260	 
	 
	 	 	 	 	 	 
	13

	 	DUTIES OF THE TRUSTEE
	 	 	261	 
	 
	 	 	 	 	 	 
	14

	 	TERMINATION
	 	 	261	 
	 
	 	 	 	 	 	 
	15

	 	PROCEDURE FOR MEETINGS OF BENEFICIARIES
	 	 	261	 
	 
	 	 	 	 	 	 
	16

	 	REMUNERATION
	 	 	265	 
	 
	 	 	 	 	 	 
	17

	 	OTHER DEALINGS
	 	 	265	 
	 
	 	 	 	 	 	 
	18

	 	LEGAL PROCEEDINGS
	 	 	265	 
	 
	 	 	 	 	 	 
	19

	 	LIMITATION OF LIABILITY OF TRUSTEE
	 	 	265	 
	 
	 	 	 	 	 	 
	20

	 	TAX
	 	 	266	 
	 
	 	 	 	 	 	 
	21

	 	ACCEPTANCE
	 	 	266	 
	 
	 	 	 	 	 	 
	22

	 	AMENDMENTS TO THIS TRUST DEED
	 	 	266	 
	 
	 	 	 	 	 	 
	23

	 	CESSION
	 	 	266	 
	24

	 	DOMICILIUM
	 	 	267	 
	25

	 	JURISDICTION
	 	 	268	 
	SCHEDULE 13
	 	 	 	 
	PART V
	 	 	 	 
	FORM OF CESSION IN SECURITATEM DEBITI	 	 	269	 
	 
	 	 	 	 	 	 
	SCHEDULE 13
	 	 	 	 
	PART VI
	 	 	 	 
	FORM OF GUARANTEE AGREEMENT	 	 	279	 






(v)









 




THIS SECURED TERM LOAN FACILITY AGREEMENT (the “Agreement”) is made BETWEEN





	(1)	 	The Greater Nelspruit Utility Company (Proprietary) Limited (as “Borrower”);
	 
	(2)	 	Development Bank of Southern Africa Limited (“DBSA”) (as a “Lender” and “Underwriter”); and
	 
	(3)	 	Subject to clause 1.9 below, Nedcor Investment Bank Limited (as Security Trustee).





IT IS AGREED as follows:





	1	 	PURPOSE AND DEFINITIONS






	 	1.1	 	This Agreement sets out the terms and conditions upon and subject to which
the Lenders agree, according to their several obligations, to make available to the
Borrower loans of up to R48,5 million under the DBSA Loan Facility and R76,5 million
under the DBSA Underwriting/Partial Risk Facility to finance or (as the case may be)
to refinance Eligible Costs as provided for herein.
	 
	 	1.2	 	In this Agreement, unless the context otherwise requires:
	 
	 	 	 	“Account Bank” means ABSA Bank unless the Account Bank is otherwise agreed as
provided for in clause 7.2(a)(ii);
	 
	 	 	 	“Account Bank Undertaking” means a written undertaking by the Account Bank in
favour of the Security Trustee and DBSA, acknowledged and consented to by the
Borrower in a form approved by the Majority Lenders;
	 
	 	 	 	“Advance” means each borrowing of a portion of the Commitments by the Borrower or
(as the context may require) the principal amount of such borrowing (and includes
an Advance pursuant to clause 4.3);
	 
	 	 	 	“Affiliated Company” means in relation to a company a company which is for the time
being a holding company of that company or a subsidiary of that company or a
subsidiary of any holding company of which that company is a




 - 1 - 









 






	 	 	 	subsidiary or a company in which that company holds not less than 30,0% (thirty
comma nought per cent) of the issued shared capital directly or indirectly;






	 	 	 	“Agent” means, subject to clause 1.9, such person as may be appointed by the
Majority Lenders as agent for the Lenders (provided such person and the parties
hereto shall have executed a letter agreement substantially in the form set forth
in part 1A of schedule 12) or who shall have been appointed pursuant to clause
16.14, in any case subject to the consent of the Borrower, such consent not to be
unreasonably withheld and/or delayed;
	 
	 	 	 	“Agreed Form” means, in relation to any document, the form of such document
approved for the purposes of this Agreement by the Agent acting on the advice of
the Majority Lenders and the Borrower, which approval shall be evidenced by the
form of such document being initialled by or on behalf of both the Agent and the
Borrower;
	 
	 	 	 	“Alternative Application” has the meaning referred to in clause 7.2(a);
	 
	 	 	 	“Annual Technical Support Fee” means the annual fee for technical support payable
to BCIL under the Technical Support Agreement;
	 
	 	 	 	“Asset Transfer Agreement” means the written transfer of assets agreement concluded
between the Council, the Department of Water Affairs and Forestry (“DWAF”) and the
Minister of Water Affairs and Forestry on terms and conditions not inconsistent
with the Concession Agreement in terms whereof the DWAF assets (as defined in the
Concession Agreement) are transferred to the Council;
	 
	 	 	 	“Assignee” has the meaning ascribed thereto in clause 15.3;
	 
	 	 	 	“Available Commitments” means in relation to a Lender at any time, its Commitment
in respect of such Facility at such time less the aggregate amount of its
Contributions to the Loan at such time;




 - 2 - 









 












	 	 	 	“Available Facility Amount” means at any time, in respect of each Facility the
aggregate of the Available Commitments of all the Lenders in relation to such
Facility at such time;
	 
	 	 	 	“Availability Period” means in respect of each Facility, the period of years
stipulated in the relevant part of schedule 10 for each Facility against
“Availability Period”;
	 
	 	 	 	“Banking Day” means a day other than Saturday or Sunday on which dealing in
deposits in Rand are carried out in the Johannesburg interbank market and (if
payment is required to be made on such day) on which banks are open for business in
Johannesburg;
	 
	 	 	 	“Base Case Model” means the pro-forma electronic model of the Project for the time
being prepared by the Borrower in the Agreed Form (as the same may be revised in an
Agreed Form from time to time) accepted by the Majority Lenders;
	 
	 	 	 	“Base Interest Fixed Rate” in respect of each Facility has the meaning described in
the relevant part of schedule 9;
	 
	 	 	 	“Base Interest Floating Rate” in respect of each Facility has the meaning referred
to in the relevant part of schedule 9;
	 
	 	 	 	“Baseline Ratio Undertaking” has the meaning described in schedule 8;
	 
	 	 	 	“Biwater Capital BV” means Biwater Capital BV, a private company with limited
liability duly incorporated in the Netherlands with a principal place of business
at 3105 Strawinskylaan “Atrium”, 7th Floor, 1077, 2X Amsterdam, The Netherlands;
	 
	 	 	 	“Biwater Capital Investments Limited” or “BCIL” means Biwater Capital Investments
Limited, a company organised and existing under the laws of England and registered
in the United Kingdom of No. 3757398;




 - 3 - 









 












	 	 	 	“Biwater Group” means Biwater Plc and all its Affiliated Companies from time to
time;
	 
	 	 	 	“Biwater Operations” means Biwater Operations (Proprietary) Limited of registration
number 98/08713/07;
	 
	 	 	 	“Biwater Plc” means Biwater Plc, a public company with limited liability
incorporated in England with registration number 929686;
	 
	 	 	 	“Biwater (Pty) Ltd” means Biwater (Proprietary) Limited of registration number
75/00553/07;
	 
	 	 	 	“Borrowed Money” means Indebtedness incurred in respect of (i) money borrowed or
raised, (ii) the outstanding principal amount of any bond, note, loan stock,
debenture or similar instrument, (iii) acceptance or documentary credit facilities,
(iv) deferred payments for assets or services acquired, (v) rental payments under
leases (whether in respect of land, machinery, equipment or otherwise) entered into
primarily as a method of raising finance or of financing the acquisition of the
asset leased, (vi) guarantees, bonds, standby letters of credit or other
instruments issued in connection with the performance of contracts and (vii)
guarantees or other assurances against financial loss in respect of Indebtedness of
any person falling within any of (i) to(vi) above;
	 
	 	 	 	“Borrower” means The Greater Nelspruit Utility Company (Proprietary) Limited of
registration No: 98/16432/07;
	 
	 	 	 	“Borrower’s Advisers” means the Borrower’s Legal Advisers, HSBC Simpson McKie
(Proprietary) Limited, PriceWaterhouseCoopers, and any other professionally
qualified advisers duly appointed by the Borrower for the purposes of the Project
and the Facility Agreement;
	 
	 	 	 	“Borrower’s Legal Advisers” means Werksmans, Allen & Overy, Norton Rose, Adams &
Adams and any other professionally qualified legal advisers duly




 - 4 - 









 






	 	 	 	appointed by the Borrower for the purposes of the Project and the Facility
Agreement;






	 	 	 	“Borrower’s Legal Opinion” means the relevant legal opinions given and/or to be
given to the Lenders by the relevant Borrower’s Legal Advisers in form and
substance satisfactory to the Lenders;
	 
	 	 	 	“Bulk Water Supply Agreement” means the agreement so entitled concluded between the
Council and DWAF as the same may be amended from time to time;
	 
	 	 	 	“Capital Repayment Dates” means the dates referred to in schedule 9;
	 
	 	 	 	“Cession Agreements” means the agreements ceding, assigning, delegating and
transferring the relevant rights, obligations, title and interest in and to the
contracts between the Council and various third parties, which contracts are
reflected in Annexure H1 of the Concession Agreement;
	 
	 	 	 	“Cession in Securitatem Debiti” means the cession in securitatem debiti referred to
in clause 12.14.3 substantially in the form set out in part V of schedule 13;
	 
	 	 	 	“Clarification Memorandum” means the agreement entered into or to be entered into
between the Council and the Borrower in respect of the Concession Agreement;
	 
	 	 	 	“Committed Amount” has the meaning described in schedule 9;
	 
	 	 	 	“Commitment” means in relation to a Lender the amount set opposite its name in
respect of each Facility in the relevant part of schedule I or, as the case may be,
in any relevant Substitution Certificate, as reduced by clauses 5.1(b), 5.4, 5.5,
11.2 or 13.1 and 13.3 of this Agreement;
	 
	 	 	 	“Compensation” means each of the following, save to the extent that the same
constitutes Water Services Income:




 - 5 - 









 












	 	(a)	 	all proceeds of insurance, other than proceeds which are
subject to the terms of Clause 29.9 of the Concession Agreement, payable to or
for the account of the Borrower, and the proceeds of any insurance in respect
of liabilities to third parties;
	 
	 	(b)	 	all damages and other forms of compensation, other than
damages and compensation which are subject to the terms of clause 29.9 of the
Concession Agreement, payable to or for the account of the Borrower by any
third party;
	 
	 	(c)	 	all consideration payable to or for the account of the
Borrower from any appropriate authority, or any agent thereof, or from any
statutory corporation in respect of the partial or total nationalisation,
expropriation, compulsory acquisition or other requisition of the Secured
Assets or any of them;
	 
	 	(d)	 	any sum payable to or for the account of the Borrower in
respect of the release, inhibition, modification or extinguishment of any
rights, or servitudes enjoyed by or benefiting the Property, or the imposition
of any restrictions affecting the Property or the Project, or the grant of any
such rights or other rights over and/or affecting the Property or any part of
it; and
	 
	 	(e)	 	any sum payable to or for the account of the Borrower in
respect of the refusal, revocation or modification of any planning permission,
or grant of planning permission, any building preservation or purchase order,
the imposition of restrictions on advertising, water supply and/or supply
related services or otherwise pursuant to the relevant regulatory provisions;






	 	 	 	“Concession Agreement” means a legal, valid and enforceable contract in respect of
the operation, conduct and completion of the Project, comprising the Clarification
Memorandum and the agreement entered into between the Council




 - 6 - 









 






	 	 	 	and the Borrower dated 21 April 1999 appended thereto, as the same may be amended
from time to time with the approval of the Majority Lenders;






	 	 	 	“Concession Area” has the meaning ascribed to concession area in the Concession
Agreement;
	 
	 	 	 	“Conditions Precedent” means the conditions referred to in schedule 3;
	 
	 	 	 	“Contractor” means Biwater Operations;
	 
	 	 	 	“Contribution” means in relation to a Lender the principal amount of the Loan owing
to such Lender at any relevant time;
	 
	 	 	 	“Council” means the Nelspruit Transitional Local Council and its successors;
	 
	 	 	 	“Date Certain” means the date 72 (seventy-two) months after the Effective Agreement
Date;
	 
	 	 	 	“DBSA” means the Development Bank of Southern Africa Limited;
	 
	 	 	 	“DBSA Loan Facility” means the Facility between DBSA and the Borrower, the terms of
which are further described in part A of schedules 9 and 10 hereto;
	 
	 	 	 	“DBSA Underwriting/Partial Risk Facility” means the Facility between DBSA and the
Borrower, the terms of which are further described in part B of schedules 9 and 10
hereto;
	 
	 	 	 	“Debt-Equity Ratio” means respectively, 75:25 determined pursuant to schedule 8;
	 
	 	 	 	“Debt-Equity Undertaking” means the undertaking described in clause 9.5(a);
	 
	 	 	 	“Debt Service Reserve Account” has the meaning described in clause 9.3(h)(ii);




 - 7 - 









 












	 	 	 	“Debt Service Reserve Account Undertaking” means the undertaking in respect of the
Debt Service Reserve Account given by the Borrower in clause 9.3(h)(i);
	 
	 	 	 	“Debt Service Reserve Amount” has the meaning described in clause 9.3(h)(i);
	 
	 	 	 	 “Deeds
Registry” means the relevant Deeds Registry in South Africa;
	 
	 	 	 	“Default Rate” in respect of each Facility has the meaning referred to in clause
4.5 and schedule 9 parts A and B;
	 
	 	 	 	“Design and Construction Contracts” means the Executed Design and Construction
Contract and the Un-executed Design and Construction Contract;
	 
	 	 	 	“Dividend Payment Ratio Undertaking” means the undertaking described in clause
9.4(k);
	 
	 	 	 	“Drawdown Notice” means a notice (i) in relation to the first Advance to be made
pursuant to this Agreement, substantially in the terms of part A of schedule 2 and
(ii) in relation to each subsequent Advance, substantially in the terms of part B
of schedule 2;
	 
	 	 	 	“Drawdown Period” means the period from the Effective Agreement Date ending on the
earlier of the Date Certain or the Practical Completion Date plus 1 month; or the period ending on such earlier date (if any) (i) on which the
aggregate amount of all Advances is equal to the total of the Commitments of all
the Lenders; or (ii) on which the Commitments of all the Lenders are reduced to
zero pursuant to clauses 5.1(b), 5.4, 5.5, 11.2 or 13;
	 
	 	 	 	“Drawdown Schedule” means a drawdown schedule agreed between the Agent (acting on
the written instructions of the Majority Lenders) and the Borrower as further
described in the relevant part of schedule 9 (which, unless otherwise agreed,
covers all or part of the period covered under the Relevant Approved Payment
Schedule referred to in clause 3.4 below);





 - 8 - 









 






	 	 	 	“Drawdown Termination Date” means the last day of the Drawdown Period;
	 
	 	 	 	“Effective Agreement Date” means the date on which the Agent in reliance upon the
representations and warranties given by the Borrower in clause 8 and pursuant to
clause 10 confirms in writing to the Lenders and the Borrower that the Conditions
Precedent referred to in schedule 3 part B I are satisfied or waived by the
Majority Lenders;
	 
	 	 	 	“Eligible Costs” has the meaning described in schedule 7;
	 
	 	 	 	“Encumbrance” means any mortgage, notarial bond (whether general or special),
pledge, lien, hypothecation, cession by way of security or other security interest
of any kind;
	 
	 	 	 	“Enforcement Date” means the date on which the Agent and/or the Security Trustee
demands the payment or discharge of all or any part of the Secured Obligations;
	 
	 	 	 	“Environmental Management Plan” means an environmental management plan duly
prepared in accordance with applicable law and guidelines;
	 
	 	 	 	“Equity Subscription Agreements” means the agreements entered into or to be entered
into between the Borrower and each of the Shareholders in respect of the obligation
of the Shareholders to subscribe for Project Equity in the Borrower for the purpose
of ensuring that the Debt-Equity Ratio is achieved and/or maintained, in form and
substance satisfactory to the Majority Lenders;
	 
	 	 	 	“Equity Subscription Guarantees” means the bank guarantees provided or to be
provided to the Borrower and the Agent to secure the obligation of each of the
Shareholders to subscribe for shares in the Borrower for the purpose of ensuring
that the Debt-Equity Ratio is guaranteed to the satisfaction of the Majority
Lenders (as referred to in the Ownership Obligation) in form and substance
satisfactory to the Majority Lenders;




 - 9 - 









 












	 	 	 	“Event of Default” means any of the events or circumstances described in clause
11.1;
	 
	 	 	 	“Executed Design and Construction Contract” means the design and construction
contract in respect of the capital works to be completed within approximately 3
(three) years of the effective date of the Concession Agreement, made or to be made
between the Borrower and the Contractor (as the same may be amended from time to
time);
	 
	 	 	 	“Facilities” means the DBSA Loan Facility and the DBSA Underwriting/Partial Risk
Facility granted in accordance with clause 2.1 of this Facility Agreement;
	 
	 	 	 	“Facility” means the DBSA Loan Facility or the DBSA Underwriting / Partial Risk
Facility (as the case may be) granted in accordance with clause 2.1 of this
Agreement;
	 
	 	 	 	“Facility Agreement” means this Agreement;
	 
	 	 	 	“Facility Amount” means at any relevant time the aggregate of the Commitments of
the Lenders at that time;
	 
	 	 	 	“Final Repayment Date” in respect of each Facility means the last of the Capital
Repayment Dates in the relevant part of schedule 9 hereto which relates to that
Facility;
	 
	 	 	 	“Financial Close” means the procedure by which the Facilities are signed and dated
by the parties thereto and written notification is given by the Agent to the
Borrower of the Effective Agreement Date;
	 
	 	 	 	“Final Drawdown Date” means in respect of each Facility, the date referred to in
schedule 9 parts A and B against “Final Drawdown Date”;
	 
	 	 	 	“First Bank Substitute” has the meaning referred to in schedule 9 part B at
paragraph 10(b);




 - 10 - 









 












	 	 	 	“Five Year Plan” has the meaning ascribed to five year plan in the Concession
Agreement;
	 
	 	 	 	“First Drawdown Date” means the date of the first Drawdown Notice which, in any
event, shall be no earlier than 7 (seven) Banking Days after the Effective
Agreement Date and no later than the date referred to against “First Drawdown
Latest Date” in the relevant part of schedule 10;
	 
	 	 	 	“First (non-DBSA) Commercial Bank Drawdown Notice” has the meaning referred to in
schedule 10 part B at paragraph 3;
	 
	 	 	 	“Fixed Management Fee” means the management fee payable to the Operator (other than
the amount of R500 000 referred to in clauses 15.1.1 and 15.2.1 of the Operation
and Maintenance Agreement), as escalated in terms of clause 15.14 of that
agreement;
	 
	 	 	 	“Force Majeure” means an event of force majeure as defined in clause 75 of the
Concession Agreement, provided that each and every such event:






	 	(i)	 	materially adversely affects the performance by the Borrower
and/or by the Contractor and/or by the Operator of the terms and provisions of
the Concession Agreement and/or of the Design and Construction Contracts
and/or of the Operation and Maintenance Agreement (as applicable);
	 
	 	(ii)	 	prevents, or leads directly to a delay in, completion of the
undertakings in respect of the Project; and
	 
	 	(iii)	 	is beyond the control of the Borrower and/or the Contractor
and/or the Operator,






	 	 	 	“Forecast Annual Debt Service Cover Ratio or “Forecast ADSCR” has the meaning
referred to in schedule 8;




 - 11 - 









 












	 	 	 	“General Notarial Bond” means a general notarial bond as further described in
clause 12.14.1 below executed or, as the case may be, to be executed by the
Borrower in the Agreed Form;
	 
	 	 	 	“GNUC Security Trust” means the trust established under the Trust Deed;
	 
	 	 	 	“Golden Share Agreement” means the Golden Share Agreement in or substantially in
the form of schedule 11 hereto and made between the Borrower and the Security
Trustee;
	 
	 	 	 	“Guarantee Agreement” means the guarantee agreement executed by each Shareholder in
or substantially in the form set out in part VI of schedule 13;
	 
	 	 	 	“Historical Annual Debt Service Cover Ratio” or “Historical ADSCR” has the meaning
referred to in schedule 8;
	 
	 	 	 	“Income Account” has the meaning described in clause 9.3(d);
	 
	 	 	 	“Indebtedness” means any obligation for the payment or repayment of money, whether
as principal or as surety and whether present or future, actual or contingent;
	 
	 	 	 	“Initial Development Cost Fees” means the fees of the Lenders’ Advisers and the
fees of the Borrower’s Advisers and any other external fees and internal expenses
incurred by the Sponsor and Biwater (Pty) Ltd in respect of, in each case, the
Project (provided the aggregate of such fees and expenses do not exceed R20 million
and provided further that such expenditure is first proven to and verified by the
Agent to its satisfaction) approved by the Majority Lenders;
	 
	 	 	 	“Information Memorandum” means an information memorandum drawn up, printed and
published by the Borrower at its cost (in respect of the DBSA Underwriting/Partial
Risk Facility to be distributed in the domestic and international financial
markets) after consulting with but not relying upon the




 - 12 - 









 






	 	 	 	advice of DBSA, which provides a detailed, accurate description of the Project in
form and substance acceptable to the Borrower, DBSA and the Sponsor,






	 	 	 	“Interest Income” means all moneys payable to the Borrower under any interest rate
swap or other interest hedging agreements entered into or, as the case may be, to
be entered into by the Borrower pursuant to the terms of this Agreement;
	 
	 	 	 	“Interest Payment Date” means the last day of an Interest Period;
	 
	 	 	 	“Interest Period” means in relation to any Advance or the Loan the period of 3
(three) months unless such other period is agreed for the calculation of interest
in respect of such Advance or the Loan ascertained in accordance with clauses 4.2
and 4.3;
	 
	 	 	 	“JIBAR” means, in relation to the first Banking Day (the “Reset Date”) of a
particular quarterly period (the “Quarterly Designated Period”), the 3-month JIBAR
(Johannesburg Inter Bank Agreed Rate) which is the midpoint of the bid/offer spread
as polled and published by SAFEX (or any successor) and which appears on the
Reuters Screen SAFEY page at 11:00 am Johannesburg time, expressed as a yield rate.
If this rate is not quoted, the rate for the relevant Quarterly Designated Period
will be the arithmetic mean of the mid-market deposit rates for South African Rand
for a period of 3-months quoted by the Reference Banks at approximately 11:00 am,
Johannesburg time, on the Reset Date. If such rate does not appear on the Reuters
Screen SAFEY Page, the rate for that Reset Date will be determined as if the
Borrower and the Lender had specified “R-JIBAR-Reference Banks” as the applicable
rate;
	 
	 	 	 	“Lease Agreements” means collectively the Lease Agreement in respect of Movable
Assets and the Lease Agreement in respect of Immovable Assets;
	 
	 	 	 	“Lease Agreement in respect of Movable Assets” means the lease agreement described
in clause 1.2.44.1 of the Concession Agreement;




 - 13 - 









 












	 	 	 	“Lease Agreement in respect of Immovable Assets” means the lease agreement
described in clause 1.2.44.2 of the Concession Agreement;
	 
	 	 	 	“Lenders” means the banks and/or financial institutions listed in schedule 1 and
includes their successors in title and Substitutes;
	 
	 	 	 	“Lenders’ Advisers” means the Lenders’ Legal Adviser, Lenders’ Technical Adviser,
Lenders’ Insurance Adviser, Lenders’ Environmental Adviser and such other
professionally qualified externally appointed successors or replacements thereof
appointed by the Lenders for the purposes of the Project (such appointment, other
than with respect to the appointment of the Lenders’ Legal Adviser and otherwise in
connection with the preservation and/or enforcement by the Lenders of their rights
hereunder, to be subject to the consent of the Borrower, which shall not be
unreasonably withheld and/or delayed);
	 
	 	 	 	“Lenders’ Environmental Adviser” means such professional environmental advisers as
the Majority Lenders may from time to time appoint to monitor the Project on behalf
of the Lenders for the purposes of this Agreement;
	 
	 	 	 	“Lenders’ Insurance Adviser” means such professional insurance advisers as the
Majority Lenders may from time to time appoint to fulfill such function;
	 
	 	 	 	“Lenders’ Legal Adviser” means such professionally qualified legal advisers as the
Majority Lenders may from time to time appoint to fulfill such function;
	 
	 	 	 	“Lenders’ Technical Adviser” means such professionally qualified technical advisers
as the Majority Lenders may from time to time appoint to monitor the Project on
behalf of the Lenders for the purposes of this Agreement;
	 
	 	 	 	“Liabilities” means all present and future amounts in respect of any liabilities
(whether actual or contingent) which are from time to time owing by the Borrower to
the Lenders under this Facility Agreement together with all damages, costs, charges
and expenses incurred by the Lenders, Agent and/or the Security Trustee in
connection with any breach by the Borrower of its obligations




 - 14 - 









 






	 	 	 	under this Facility Agreement or the protection, preservation or enforcement of the
rights of the Lenders, Agent and/or Security Trustee against the Borrower under
this Facility Agreement and such amounts shall also include all amounts to which
the Lenders Agent and/or Security Trustee would be entitled but for the winding-up
or legal incapacity of the Borrower;






	 	 	 	“Loan” means the aggregate principal amount owing to the Lenders under this
Agreement at any relevant time;
	 
	 	 	 	“Loan Life Cover-Ratio” “LLCR” has the meaning defined in schedule 8;
	 
	 	 	 	“LTA Certificate” means a certified true copy of a certificate issued by the
Lenders’ Technical Adviser confirming that work performed by the Contractor in the
preceding three months has been satisfactorily carried out in accordance with the
terms of the Executed Design and Construction Contract and/or the Un-executed
Design and Construction Contract (as the case may be);
	 
	 	 	 	“Major Project Party” means any Sponsor, Biwater Operations (Pty) Ltd and any other
Shareholder of the Borrower except Martin Jonker Investments (Pty) Ltd or any other
Shareholder holding 10,0% (ten comma nought per cent) or less of the ordinary
issued share capital of the Borrower;
	 
	 	 	 	“Majority Lenders” means a Lender or Lenders, the aggregate of whose Contributions
at any relevant time exceeds 662/3% (sixty-six and two-thirds per cent)
of the Loan or, if no Advance has been made, the aggregate of whose Commitments
exceeds 662/3% (sixty-six and two-thirds per cent) of the total of the
Commitments of all the Lenders or such other meaning as agreed by DBSA and the
other Lenders, if any, whether under an inter-creditor agreement or otherwise
agreed subject to the consent of the Borrower, such consent not to be unreasonably
withheld and/or delayed;
	 
	 	 	 	“Margin” means in respect of each Facility the percentage amount per annum
specified in the relevant part of schedule 9 hereto which relates to that Facility;




 - 15 - 









 












	 	 	 	“Material Adverse Effect” means any event which occurs or circumstance which arises
which, in the reasonable opinion of the Majority Lenders, is likely materially and
adversely to affect the ability of any Major Project Party or the Borrower to
perform all or any of their respective material obligations under the terms of this
Agreement including (for the avoidance of doubt) any of the Security Documents to
which they are a party;
	 
	 	 	 	“Material Adverse Governmental Action” has the meaning ascribed to material adverse
governmental action in the Concession Agreement;
	 
	 	 	 	“MJI” means Martin Jonker Investments (Proprietary) Limited, a proprietary limited
company incorporated and registered in accordance with the laws of South Africa of
Registration No. 74/01948/07;
	 
	 	 	 	“Month” means a period beginning in one calendar month and ending in the next
calendar month on the day numerically corresponding to the day of the calendar
month on which it started, provided that (i) if the period started on the last
Banking Day in a calendar month or if there is no such numerically corresponding
day, it shall end on the last Banking Day in such next calendar month and (ii) if
such numerically corresponding day is not a Banking Day, the period shall end on
the next following Banking Day in the same calendar month but if there is no such
Banking Day it shall end on the preceding Banking Day and “months” and “monthly”
shall be construed accordingly;
	 
	 	 	 	“NACQ” means nominal annual (interest rate) compounded quarterly;
	 
	 	 	 	“National Government” means the central government of South Africa;
	 
	 	 	 	“Operating Account” has the meaning ascribed to that term in clause 9.3(e)(A);
	 
	 	 	 	“Operation and Maintenance Agreement” means the legal, valid and enforceable
contract in respect of the operation, maintenance and management of the Project and
the management of the day-to-day business and affairs of the Borrower, for and on
behalf of the Borrower, made or to be made between the




 - 16 - 









 






	 	 	 	Borrower and the Operator together with the agreement entitled Operation and
Maintenance Agreement entered into between the Borrower and the Operator dated 29
October 1999 appended thereto, as the same may be amended from time to time with
the approval of the Majority Lenders;






	 	 	 	“Operations Management Plan” has the meaning ascribed to operations management plan
in the Operation and Maintenance Agreement;
	 
	 	 	 	“Operator” means Biwater Operations;
	 
	 	 	 	“Ownership Obligation” means the conditions of ownership set forth in schedule 6;
	 
	 	 	 	“Part” means, in relation to the Project, part of the property comprised in the
Project which is shown as forming a distinct part in the project specifications;
	 
	 	 	 	“Permitted Encumbrance” means an Encumbrance being any of the following:






	 	(a)	 	title retention arrangements arising in the ordinary course
of trading with suppliers of goods to the Borrower or arising under
conditional sale or hiring arrangements in respect of goods supplied to the
Borrower in the ordinary course of trading;
	 
	 	(b)	 	liens arising in the ordinary course of trading by operation
of law and not by contract so long as any amount in respect of which such
liens arise is not overdue for payment; and
	 
	 	(c)	 	any Encumbrance created by any of the Security Documents;






	 	 	 	“Pledge of Shares and Cession of Claims” means the pledge of shares and cession of
claims by each Shareholder in or substantially in the form set out in part III of
schedule 13;




 - 17 - 









 












	 	 	 	“Potential Event of Default” means any Event of Default or any event which with the
giving of notice or lapse of time or the satisfaction of any other condition (or
any combination thereof) would constitute an Event of Default;
	 
	 	 	 	“Practical Completion Date” means the date confirmed, in writing, by the Lenders’
Technical Adviser to the Agent (and a copy of such confirmation shall be provided
by the Agent to the Borrower) as being the date upon which the completion of the
construction of all sections of the Project as provided for in the Design and
Construction Contracts in accordance with the Project Documents and the Facility
Agreement has occurred.
	 
	 	 	 	“Principal Indemnity” means the indemnity given by the Borrower to the Security
Trustee in clause 12.10.
	 
	 	 	 	“Proceeds Account” has the meaning ascribed to that term in clause 9.3(b)(i);
	 
	 	 	 	“Project” means the design, construction, financing, rehabilitation, operation,
maintenance and management of the supply of water services and works within the
Concession Area under the teens of the Concession Agreement and Relevant Consents;
	 
	 	 	 	“Project Accounts” means collectively the Proceeds Account, the Income Account, the
Debt Service Reserve Account, the Operating Account and such other banking and/or
investment accounts as may be opened by the Borrower with the prior written consent
of the Agent;
	 
	 	 	 	“Project Budget” means the annual budgeted cash flow forecast in the Agreed Form
based on the Base Case Model showing the anticipated cash requirements and the
anticipated dates for such cash requirements in respect of the Project;
	 
	 	 	 	“Project Costs” means, without limitation, the aggregate from time to time (without
double counting) of:




 - 18 - 









 












	 	(a)	 	all fees, costs and expenses paid or incurred in connection
with the Project both before and after the date of this Agreement by or on
behalf of the Borrower:






	 	(i)	 	under the Concession Agreement;
	 
	 	(ii)	 	under the Operation and Maintenance Agreement;
	 
	 	(iii)	 	under the terms of the Design and Construction Contracts;
	 
	 	(iv)	 	under the Technical Support Agreement;
	 
	 	(v)	 	to any architects, engineers, or other
appointed technicians in respect of the Project;
	 
	 	(vi)	 	in connection with obtaining the Relevant
Consents and performing its obligations thereunder,
	 
	 	(vii)	 	to any agents, valuers, surveyors,
attorney, lawyers, solicitors and other advisers;
	 
	 	(viii)	 	for the diversion of municipal utilities or services and the
provision of new or alternative municipal utilities or services to
any part of the Concession Assets;
	 
	 	(ix)	 	in respect of any necessary demolition and
clearance of any Concession Assets and the provision of security on
the Concession Assets;
	 
	 	(x)	 	in remedying any defects in the completed
Project (to the extent that the same are not remedied by or the
responsibility of the Contractor under the Design and Construction
Contracts); and
	 
	 	(xi)	 	in maintaining (including cleaning,
lighting and securing) the completed Project (save to the extent such
costs and expenses




 - 19 - 









 






	 	 	 	have lawfully been recovered from any tenant, licensee, occupier
or other persons);






	 	(b)	 	all stamp duty and Deeds Registry registration fees and other
statutory levies or tariffs paid or payable both before and after the date of
this Agreement in respect of the Project;
	 
	 	(c)	 	all insurance premiums, including, but not limited to,
premiums paid or payable in respect of insurances covering third party and
occupiers liability, rates, water rates, taxes and other impositions lawfully
assessed, charged or payable both before and after the date of this Agreement
in respect of the Concession Assets (save to the extent that such payments
have been lawfully recovered from any tenant, licensee, occupier or other
person) or in respect of the Project (other than taxes levied on any profits
of the Borrower or on any capital or development gain made by it in respect of
the Project or otherwise);
	 
	 	(d)	 	all Value Added Tax properly paid or payable both before and
after the date of this Agreement in respect of the supply of goods and the
rendering of services in connection with the Project; provided that at any
relevant time no Value Added Tax so paid or payable shall be counted as
“Project Costs” if the person incurring the same has at that date recovered
amounts attributable to such Value Added Tax;
	 
	 	(e)	 	all interest payments, commitment, agency and other fees
(including Value Added Tax) paid or payable under the Facility Agreement;
	 
	 	(f)	 	all moneys paid or payable by the Borrower under any interest
rate swap or other interest hedging agreement entered into by the Borrower in
accordance with the terms of the Facility Agreement; and
	 
	 	(g)	 	all other items of expenditure whatsoever, whether of a
capital or revenue nature, including without limitation sums paid or payable
in




 - 20 - 









 






	 	 	 	respect of the Debt Service Reserve Account Undertaking, incurred in or
about, or in contemplation of, or in pursuance of, or in any way relating
to the Project;






	 	 	 	“Project Documents” means the following duly executed enforceable documents:






	 	(a)	 	the Concession Agreement;
	 
	 	(b)	 	performance bond to be issued under the Concession Agreement;
	 
	 	(c)	 	the Five Year Plan;
	 
	 	(d)	 	the Lease Agreements;
	 
	 	(e)	 	the Clarification Memorandum;
	 
	 	(f)	 	the letter from the Council appointing the Borrower as an
industrial water services provider;
	 
	 	(g)	 	the Executed Design and Construction Contract;
	 
	 	(h)	 	upon its execution, the Un-executed Design and Construction
Contract;
	 
	 	(i)	 	the performance bond to be issued under the Executed Design
and Construction Contract;
	 
	 	(j)	 	upon the execution of the Un-executed Design and Construction
Contract, the performance bond to be issued under such contract;
	 
	 	(k)	 	the Operation and Maintenance Agreement;
	 
	 	(l)	 	the performance bond to be issued under the Operation and
Maintenance Agreement;




 - 21 - 









 












	 	(m)	 	the annual Operations Management Plan, including operational
budget, the implementation procedure, the procedure for the interim collection
arrangements and the customer facilitation plan;
	 
	 	(n)	 	the Technical Support Agreement;
	 
	 	(o)	 	the Articles and Memorandum of Association of the Borrower;
	 
	 	(p)	 	the Equity Subscription Agreements;
	 
	 	(q)	 	the Equity Subscription Guarantees;
	 
	 	(r)	 	the Shareholders’ Agreement;
	 
	 	(s)	 	the resolution and guidelines adopted by the Borrower
regarding the employee share incentive scheme to be implemented by the
Borrower;
	 
	 	(t)	 	the Asset Transfer Agreement;
	 
	 	(u)	 	the Bulk Water Supply Agreement and the agreement(s) by which
all of the Council’s rights, obligations, title and interest in and to the
Bulk Water Supply Agreement are ceded, assigned and transferred to the
Borrower;
	 
	 	(v)	 	the Environmental Management Plan;
	 
	 	(w)	 	the Project Budget;
	 
	 	(x)	 	the Hand-over Certificate as referred to in the Concession
Agreement; and
	 
	 	(y)	 	the Cession Agreements;






	 	 	 	“Project Equity” means (i) the funds contributed in respect of any issued ordinary
and/or preferential shares in the Borrower to which the Shareholders have
subscribed; and/or (ii) any loans provided by the Shareholders; and/or (iii)




 - 22 - 









 






	 	 	 	any Sponsor Subordinated Loan (other than the Subordinated Development Cost Loan
which for the avoidance of doubt may not in any circumstance be treated as Project
Equity) evidenced in the Sponsor Subordinated Loan Account, provided that the
treatment of (ii) and (iii) as Project Equity shall be subject to the prior written
approval of the Majority Lenders;






	 	 	 	“Project Life Cover Ratio” or “PLCR” has the meaning described in schedule 8;
	 
	 	 	 	“Project Revenues” means the aggregate from time to time, of:






	 	(a)	 	Advances under the Facility Agreement;
	 
	 	(b)	 	any loan to the Borrower for the purposes of the Project
other than any Loan under the Facility Agreement;
	 
	 	(c)	 	Project Equity;
	 
	 	(d)	 	Compensation; and
	 
	 	(e)	 	Water Services Income.






	 	 	 	(Provided that no amounts counted under any one of the above paragraphs shall also
be counted under any other paragraph).
	 
	 	 	 	“Property” means the moveable and immovable property within the Concession Area
which is subject to the terms of the Concession Agreement and the rights and
obligations of the Borrower under the Concession Agreement;
	 
	 	 	 	“RJIBAR Reference Banks” means that the rate for a Reset Date (as defined in the
definition of JIBAR above) will be determined on the basis of the basis of the
arithmetic mean of the mid-market deposit rates for the Rand for a period of the
Designated Period quoted by the Reference Banks at approximately 11:00am,
Johannesburg time, on the Reset Date. The Agent will request the principal
Johannesburg office of the Reference Banks to provide a quotation of its rate. If




 - 23 - 









 






	 	 	 	only two of the Reference Banks provide quotations, the rate for the Reset Date
will be the arithmetic mean of the quotations. If fewer than two quotations are
provided, the rate for the Reset Date will be determined by the Agent, pursuant to
the instructions of the Majority Lenders, acting in a commercially reasonable
manner;






	 	 	 	“Rand” or “R” means the lawful currency for the time being of the Republic of South
Africa;
	 
	 	 	 	“Ratio Limits” means the limits described in schedule 8 and referred to in clause
9.5(b);
	 
	 	 	 	“Ratio Test Date” has the meaning described in schedule 8;
	 
	 	 	 	“Ratio Undertakings” means the Debt Service Reserve Account Undertaking, the
Baseline Ratio Undertaking, the Debt Equity Undertaking and the Dividend Payment
Ratio Undertaking;
	 
	 	 	 	“Reference Banks” means the four largest South African banks in terms of market
capitalisation and/or any other Bank appointed as such pursuant to clause 16.15;
	 
	 	 	 	“Reference Rate” means for each Facility the rate described in clause 4.1 and the
relevant part of schedule 10 for that Facility;
	 
	 	 	 	“Relevant Approved Payment Schedule” means a payment schedule approved as provided
for in clause 13 of the Executed Design and Construction Contract and/or as
provided for in the relevant clause(s) of the Un-executed Design and Construction
Contract;
	 
	 	 	 	“Relevant Authority” means any ministry, department, provincial or local agency or
body of the State and any other public authority, body, entity or person having
jurisdiction under the laws of the State;




 - 24 - 









 












	 	 	 	“Relevant Consents” means the planning permissions and all other consents,
licences, intellectual property rights, permits including, without limitation,
waivers, environmental permits and approvals under the National Water Act, the
Water Services Act, the Local Government Transition Act (as the same are described
in the Concession Agreement) the Occupational Injuries and Disease Act, the
National Environmental Management Act, applicable building & fire regulations as
well as any other applicable statute, bye-law or regulation of any competent
authority which are necessary from time to time to enable the Project to be
commenced, carried out and completed and the obligations of the Borrower and
Sponsor to be performed;
	 
	 	 	 	“Repayment Dates” means each of the Capital Repayment Dates as described in
paragraph 7 of schedule 9 (including the Final Repayment Date) on which repayment
instalments in respect of the Loan are due under clause 5 of this Agreement;
	 
	 	 	 	“Secured Assets” means any goodwill, undertakings, property, assets, revenues and
rights of the Borrower secured or intended to be secured under the Security
Documents;
	 
	 	 	 	“Secured Obligations” means, in relation to the Borrower, all moneys, obligations
and liabilities covenanted or guaranteed to be paid or discharged by the Borrower
under the General Notarial Bond and under the other Security Documents;
	 
	 	 	 	“Security Documents” means each of (i) the General Notarial Bond, (ii) the Sponsor
Support Agreement, (iii) the Trust Deed, (iv) the Golden Share Agreement, (v) the
Cession in Securitatem Debiti, (vi) each Pledge of Shares and Cession of Claims
(vii) each Guarantee Agreement and (viii) any further security documents entered
into at any time by or on behalf of the Borrower as security for the payment and
discharge of the Secured Obligations;




 - 25 - 









 












	 	 	 	“Security Trustee” means the trustee for the time being of the GNUC Security Trust
appointed under the Trust Deed;
	 
	 	 	 	“Shareholders” means the following, including their successors and assigns:






	 	•	 	Biwater Capital BV;
	 
	 	•	 	Biwater Operations;
	 
	 	•	 	Sivukile;
	 
	 	•	 	MJI; and
	 
	 	•	 	any other holder of shares in the Borrower from time to time;






	 	 	 	“Shareholders’ Agreement” means the legal, valid and enforceable contract made or
to be made between the Shareholders and the Borrower relating to the formation of
the Borrower and the conduct of its business together with the agreement entered
into between the Borrower and the Shareholders dated 16 November 1999 appended
thereto, as same may be amended from time to time with the approval of the Majority
Lenders;
	 
	 	 	 	“Shareholding Proviso” means the proviso that no payment shall occur until an
Advance is made by a financial institution other than DBSA and upon or immediately
after the making of such Advance, not less than 100,0% (one hundred per cent) of
the Available Facility Amount under the DBSA Underwriting/Partial Risk Facility is
held as Lender by one or more commercial investment banks which, for the avoidance
of doubt, is a bank or banks other than DBSA;
	 
	 	 	 	“Short Term Loan” means a loan requiring repayment within 12 (twelve) Months of
being made;
	 
	 	 	 	“Sivukile” means Sivukile Investments (Pty) Ltd of registration number 96/13121/07;




 - 26 - 









 












	 	 	 	“Sivukile Put-Call Option” means the call option or the put option (as relevant) as
defined in the Shareholders’ Agreement;
	 
	 	 	 	“South Africa” or the “Republic of South Africa” means the Republic of South Africa
as defined in the Constitution of the Republic of South Africa Act 108 of 1996 and
its lawfully designated representatives;
	 
	 	 	 	“Sponsor” means, unless otherwise agreed, Biwater Plc for so long as Sivukile holds
no more than 10,0% (ten comma nought per cent) of the ordinary issued share capital
in the Borrower and both Biwater Plc and Sivukile in the event that Sivukile holds
more than 10,0% (ten comma nought per cent) of the ordinary issued share capital in
the Borrower.
	 
	 	 	 	“Sponsor Subordinated Loan” means at any relevant time the aggregate amount at that
time evidenced in the Sponsor Subordinated Loan Account in the books of the Sponsor
(as certified by the auditor of the Sponsor to the Security Trustee) the proceeds
of which have been applied by the Borrower towards supporting, financing or
refinancing the Project Costs or, pending such application, are held in the Income
Account;
	 
	 	 	 	“Sponsor Subordinated Loan Account” means an account maintained in the books of the
Borrower evidencing amounts from time to time borrowed by the Borrower and owing
by, the Borrower including, without limitation, amounts made available to the
Borrower by the Sponsor pursuant to the Sponsor Support Agreement;
	 
	 	 	 	“Sponsor Support Agreement” means the agreement in respect of inter alia, the
completion of the Project and shortfalls executed or, as the case may be, to be
executed by the Sponsor in the form of schedule 5;
	 
	 	 	 	“State” means any government acting through its lawfully designated
representatives;




 - 27 - 









 












	 	 	 	“Subordinated Development Cost Loan” has the meaning described in clause 9.4(k)(B)
below;
	 
	 	 	 	“Subordinated Liabilities” means all and any Indebtedness and all other Liabilities
including, without limitation, all sums now or hereafter due, owing or incurred by
the Borrower to the Shareholders and/or to the Sponsor and/or to any other member
of the Biwater Group including (without limitation) the Fixed Management Fee and
the Annual Technical Support Fee;
	 
	 	 	 	“Subsidiary” has the meaning ascribed to that term in the Companies Act No. 63 of
1973;
	 
	 	 	 	“Substitute” has the meaning described in clause 15.4 below;
	 
	 	 	 	“Substitution Certificate” means a certificate substantially in the form of
schedule 4 hereto;
	 
	 	 	 	“Swap Breakage Costs” means the breakage costs or profits as determined by the
Agent in respect of any interest and/or currency swap arrangement entered into in
compliance with this Agreement;
	 
	 	 	 	“Target Date” means the date 72 (seventy-two) Months (the “Seventy-Two Month
Period”) after the Effective Agreement Date provided that if any delay in carrying
out the Project shall occur by reason of Force Majeure, a Material Adverse
Governmental Action or as a result of an extension of time granted to the
Contractor as provided for under the Design and Construction Contracts, then
subject to the consent of the Borrower, which consent shall not be unreasonably
withheld and/or delayed, such date shall be postponed for such period after the
Seventy-Two Month Period as the Agent, acting on the instructions of the Majority
Lenders, considers fair and reasonable in all the circumstances;
	 
	 	 	 	“Taxes” includes all present and future taxes, levies, imposts, duties, fees or
charges of whatever nature together with interest thereon and penalties in respect
thereof and “Taxation” shall be construed accordingly;




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	 	 	 	“Technical Support Agreement” means the agreement entered into between the
Borrower, Biwater Operations and Biwater Capital Investments Limited (or such other
entity within the Biwater Group with whom a similar technical support agreement is
concluded) such that Biwater Capital Investments Limited (or such other entity) is
obliged to provide to the Borrower and Biwater Operations such Technical Support
(as defined in that agreement) as is required by the Borrower and Biwater
Operations to support their obligations under the Concession Agreement, the
Operation and Maintenance Agreement and the Design and Construction Contracts,
subject to the terms and conditions of that agreement;
	 
	 	 	 	“Termination Compensation and Co-Operation Agreement” means the agreement concluded
or to be concluded between the Council and DBSA concerning, inter alia, the rights
and obligations of the parties under such agreement in the event that the
Concession Agreement is terminated;
	 
	 	 	 	“Trust Deed” means the trust deed in respect of the Secured Obligations entered
into or to be entered into by DBSA (as founder) and the Security Trustee
substantially in the form set put in part IV of schedule 13;
	 
	 	 	 	“Trustee Undertaking” means the undertaking given by the Security Trustee to the
Lenders in respect of the Liabilities of the Borrower in clause 12;
	 
	 	 	 	“Underwriter” means DBSA;
	 
	 	 	 	“Un-executed Design and Construction Contract” means the design and construction
contract referred to in recital 4 of the Executed Design and Construction Contract,
entered into or to be entered into between the Borrower and the Contractor,
	 
	 	 	 	“Unfunded Cost” means any necessary cost, approved by the Agent acting on the
written advice of the Majority Lenders, incurred or likely to be incurred by the
Borrower for the purposes of performing its obligations hereunder which are not
included in the Project Budget and/or are not Eligible Costs or costs for




 - 29 - 









 






	 	 	 	which the Operator or Contractor are liable or for which the Sponsor is liable
under the terms of the Sponsor Support Agreement;






	 	 	 	“Value Added Tax or “VAT” means value added tax charged pursuant to the Value Added
Tax Act 89 of 1991; and
	 
	 	 	 	“Water Services Income” means, save to the extent the same constitutes
Compensation, the aggregate of all amounts payable to or for the benefit or account
of the Borrower in connection with the supply of water and related services under
the terms of the Concession Agreement, including without limitation (without double
counting) each of the following amounts so payable:






	 	(a)	 	any damages, compensation, settlement or expenses for or
representing loss of income or interest thereon payable as a result of any
proceedings taken or claim made for the same net of any costs, fees and
expenses paid (and which have not been reimbursed to or recovered by and which
are not reimbursable to or recoverable by, the Borrower from any party) in
furtherance of such proceedings so taken or claim so made;
	 
	 	(b)	 	any moneys payable under any policy of insurance in respect
of loss of income or interest thereon net of any costs, fees and expenses paid
(and which have not been reimbursed to or recovered by and which are not
reimbursable to or recovered by, the Borrower from any party) in furtherance
of any claims made under such policy;
	 
	 	(c)	 	any interest payable on any sum referred to in paragraphs (a)
or (b) above and any damages, compensation or settlement payable in respect of
the same; and
	 
	 	(d)	 	any amounts arising as a result of charges and/or tariffs
and/or government grants under clause 46 of the Concession Agreement and/or
vouchers, coupons or tokens purchased by the Council under Clause




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	 	 	 	45.11.2 of the Concession Agreement and/or other amounts payable to the
Borrower by the Council and/or other consumers.






	1.3	 	Clause headings and the table of contents are inserted for convenience of reference only and
shall be ignored in the interpretation of this Agreement.
	 
	1.4	 	The expressions:






	 	(a)	 	“Contractor” and “Operator” include, unless the context otherwise requires,
any further or substitute firm or company from time to time appointed as such or
appointed to fulfill any or all of the Contractor’s and/or Operator’s obligations in
connection with the Project;
	 
	 	(b)	 	“Concession Agreement”, includes any variations of or substitution for such;
in each case made with the prior written approval of the Agent pursuant to clause 9.4.






	1.5	 	In this Agreement, unless the context otherwise requires:






	 	(a)	 	references to clauses, schedules and annexures are to be construed as
references to the clauses of, schedules to and annexures to this Agreement and
references to this Agreement include its schedules and annexures;
	 
	 	(b)	 	references to (or to any specified provision of) this Agreement or any other
document shall be construed as references to this Agreement, that provision or that
document as in force for the time being and as amended in accordance with the terms
thereof, or, as the case may be, with the agreement of the relevant parties and (where
such consent is, by the terms of this Agreement or the relevant document, required to
be obtained as a condition to such amendment being permitted) the prior written
consent of the Agent;
	 
	 	(c)	 	words importing the plural shall include the singular and vice versa;





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	 	(d)	 	references to a person shall be construed as including references to an
individual, firm, company, corporation, unincorporated body of persons, trust, or any
State or Relevant Authority or any agency thereof;
	 
	 	(e)	 	references to any enactment shall be deemed to include references to such
enactment as re-enacted, amended, extended or superseded;
	 
	 	(f)	 	references to a time of day are to Johannesburg time;
	 
	 	(g)	 	terms, unless otherwise defined herein shall have the meaning given to such
terms in the Concession Agreement; and
	 
	 	(h)	 	if any provision in a definition is a substantive provision conferring rights
or imposing obligations on any party to this Agreement effect shall be given to it as
if it were a substantive provision in the body of the Agreement.






	1.6	 	In the event that DBSA is not the sole Lender hereunder and this Agreement provides for any
matter to be determined by reference to the opinion of the Majority Lenders or to be subject
to the consent or request of the Majority Lenders or for any action to be taken on the
instructions of the Majority Lenders, such opinion, consent, request or instructions shall (as
between the Lenders) only be regarded as having been validly given or issued by the Majority
Lenders if all the Lenders shall have received prior notice of the matter on which such
opinion, consent, request or instructions are required to be obtained and the Majority Lenders
shall have given or issued such opinion, consent, request or instructions but so that the
Borrower shall be entitled (and bound) to assume that such notice given to and received by the
Agent shall have been duly received by each Lender whether or not this is the case.
	 
	1.7	 	The obligations of the Borrower under this Agreement are unconditional and irrevocable
(subject to the express provisions of this Agreement) and, without limitation, shall not be in
any way be affected or discharged by reason of (a) any matter affecting the Project Documents,
including, without limitation, any breach or alleged breach of any of those documents or any
claim that the Borrower has, or considers that it has, against any other




 - 32 - 









 






	 	 	party to those documents or any approval, consent or waiver granted by the Agent in
relation to those documents or (b) any matter affecting the Property, its value or any
other matter whatsoever relating to the Property. The Borrower acknowledges that the
Lenders agreeing to make the Facilities available to the Borrower under this Agreement or
the grant of any approval or consent given under or in connection with this Agreement or
the Security Documents (or any of them) by the Agent, the Security Trustee or the Lenders
(or any of them) or any other document shall not constitute any representation or warranty
by the Agent or the Security Trustee or the Lenders as to the adequacy or effectiveness of
the Project Documents or of any purchase consideration payable by the Borrower entering
into the arrangements contemplated by the Project Documents or otherwise.






	1.8	 	Notwithstanding any other term of this Agreement (but without prejudice to the provisions of
this Agreement relating to or requiring action by the Majority Lenders) the interests of the
Agent, each of the Security Trustee and the Lenders are several and the amount due to the
Agent (for its own account), to the Security Trustee (for its own account) and to each Lender
is a separate and independent debt. The Agent, each of the Security Trustee and each Lender
shall have the right to protect and enforce its rights arising out of this Agreement (but
subject in all cases to clauses 1.9 and 18) and it shall not be necessary for the Agent, the
Security Trustee or any Lender (as the case may be) to be joined as an additional party in any
proceedings for this purpose.
	 
	1.9	 	For the avoidance of doubt, any reference in this Agreement to the Security Trustee and/or
Agent and their respective rights (including without limitation rights to fees and costs) and
obligations shall be deemed to refer to such Security Trustee and/or Agent including their
aforementioned rights and obligations when the same are appointed as provided for herein and
until such appointment only the rights and obligation of the parties to the Agreement in their
capacity as Lender or Borrower (as the case may be) shall apply and in the event that DBSA is
the sole Lender, DBSA shall be entitled to undertake any relevant rights, duties and/or
obligations ascribed hereunder to the Agent as well as any so attributable to the Security
Trustee which in either case, it may wish to exercise in its own name including, without
limitation, the right to register Security




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	 	 	Documents the form of which may
be duly amended by DBSA in an
Agreed Form for the purpose of
protecting its rights hereunder
and notwithstanding the terms of
clauses 3, 7, 18.2 or any other
term of the Agreement which
provides for communication or
transmission to the Lender or
Borrower to be made via the Agent
and/or Security Trustee (as the
case may be) until such
appointment all transmission
and/or communication to and
between the parties to the
Agreement shall be made directly
to each party to this Agreement
as provided for in clause 18.1.






	2	 	THE LOAN
	 
	2.1	 	The Borrower agrees to borrow and the Lenders, relying upon each of the representations and
warranties in clause 8, agree to lend to the Borrower upon and subject to the terms of this
Agreement the principal sum of up to R48,5 million and R76,5 million respectively under the
Facilities further described in parts A and B of schedules 9 and 10 hereto. The obligation of
DBSA hereunder is to be a Lender under the DBSA Loan Facility and the underwriting obligation
of DBSA shall be to underwrite the DBSA Underwriting / Partial Risk Facility by being a Lender
as at the date of this Agreement for all of the Committed Amount under the DBSA Underwriting /
Partial Risk Facility but for the avoidance of doubt and without prejudice to its rights or
limitation of its obligations hereunder DBSA shall have no underwriting obligation to be a
Lender in respect of all or any part of any Commitment and/or Loan under the DBSA Underwriting
/ Partial Risk Facility which has been assigned and/or otherwise transferred to a Substitute.
The obligation of any Lender under this Agreement in respect of each applicable Facility shall
be to contribute that proportion of the Loan or, as the case may be, each Advance which its
Commitment bears to the total of the Commitments of all the Lenders under such Facility.
	 
	2.2	 	The obligations of the Lenders and the Underwriter under this Agreement are several; the
failure of any Lender or the Underwriter to perform such obligations shall not relieve any
other Lender, each of the Security Trustee, the Agent, or the Borrower of any of their
respective obligations or liabilities under this Agreement nor shall the Agent, or the
Security Trustee be responsible for the obligations of any Lender (except for its own




 - 34 - 









 






	 	 	obligations, if any, as a Lender)
or the Underwriter nor shall any
Lender be responsible for the
obligations of any other Lender
or Underwriter under this
Agreement.






	3	 	ADVANCES
	 
	3.1	 	Subject to the terms and conditions of this Agreement notably, without limitation, the terms
of the relevant Drawdown Schedule, each Advance (other than an Advance to be made pursuant to
clause 4.3) shall be made to the Borrower following receipt by the Agent from the Borrower of
a Drawdown Notice not later than 10 a.m. (Johannesburg time) on the 7th (seventh)
Banking Day before the date on which the Advance is intended to be made. Each such Drawdown
Notice shall be effective on actual receipt by the Agent provided the conditions of this
Agreement at the time of receipt are satisfied and, once given, shall, subject as provided in
clause 13.3(a), be irrevocable. No Drawdown Notice may be given of an amount which is the
subject of a notice received by the Agent under clause 5.4.
	 
	3.2.	 	(a)     Advances may be made only on Banking Days falling within the Drawdown Period.






	 	(b)	 	Each Advance (other than (i) the first Advance made pursuant to clause 3.3,
(ii) an Advance made pursuant to clause 4.3 and (iii) the last Advance) shall be of
R500 000 (five hundred thousand Rand) under the DBSA Loan Facility and R300 000 (three
hundred thousand Rand) under the DBSA Underwriting / Partial Risk Facility or any sum
larger than R500 000 (five thousand Rand) and R300 000 (three hundred thousand Rand)
under respectively each Facility which is an integral multiple of R100 000 (one
hundred thousand Rand). The last Advance may be of an amount up to the aggregate of
the undrawn Commitments at the time of that Advance.
	 
	 	(c)	 	Advances may be made only for the purpose of financing or (as the case may
be) refinancing Eligible Costs.





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	 	(d)	 	No Advance may be made at any time if, as a result of such Advance being
made, the ratio of debt to equity would exceed the Debt-Equity Ratio.
	 
	 	(e)	 	Unless otherwise provided for in the Drawdown Schedule, not more than one
Advance may be made each Month hereunder.






	3.3	 	Subject to the terms and conditions of this Agreement, the first Advance will be made to the
Borrower on or after the Effective Agreement Date in the sum approved by the Lenders, being
the sum due in respect of the Initial Development Cost Fees, provided that such Advance shall
exceed such sum by an amount determined by the Majority Lenders and notified in writing by the
Agent to the Borrower in respect of Eligible Costs and any other outstanding fees due and
payable as at the time of such Advance (including agency fees, Security Trustee fees,
underwriting fee and appraisal fees, legal, front-end and other advisory fees payable on the
Effective Agreement Date) pursuant to clauses 6.1(a), 6.1(b) and 6.1(c).
	 
	3.4	 	No Advance (other than an Advance made pursuant to clause 4.3) shall be made unless:






	 	(i)	 	in respect of any Advance which includes a request, in whole or in part, for
Eligible Costs under sub-paragraph (a) of schedule 7, a Relevant Approved Payment
Schedule is attached to the Drawdown Notice under which such Advance is requested;
	 
	 	(ii)	 	in respect of the first Advance following each quarterly review and
reconciliation by the Lenders’ Technical Adviser under clause 13 of the Executed
Design and Construction Contract and/or the relevant clause(s) of the Unexecuted
Design and Construction Contract, an LTA Certificate is attached to the Drawdown
Notice under which such Advance is requested;
	 
	 	(iii)	 	the Advance requested is of an amount and on a date provided for in the
Drawdown Schedule; and
	 
	 	(iv)	 	no Potential Event of Default or Event of Default has occurred and is
continuing.




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	3.5	 	The Borrower irrevocably authorises the Agent:






	 	(a)	 	on or after the Effective Agreement Date, to apply and/or cause to apply on
its behalf the proceeds of the first Advance, made pursuant to clause 3.3, as follows:






	 	(i)	 	to the extent that such proceeds represent an amount drawn
down to meet the Initial Development Cost Fees and/or the Security Trustee
fees and/or agency fees and/or underwriting fee and appraisal fees and/or
front-end fees payable pursuant to clause 6.1(a) and/or 6.1(b) and/or 6.1(c)
or otherwise by applying such amount in payment of such fees to the account of
the Security Trustee and/or Agent (as the case may be) for payment of such
fees and the Initial Development Cost Fees; and
	 
	 	(ii)	 	the balance of the proceeds, if any, (after the application
of the amounts in clauses 3.5(a)(i)) to be paid into the Proceeds Account;






	 	(b)	 	if so requested by the Borrower in writing, to pay the proceeds of all
Advances to be made in respect of Eligible Costs in the nature of construction costs
(or costs otherwise payable by the Borrower under the Design and Construction
Contracts) direct to the Contractor (whose receipt shall be a good discharge to the
Agent) in or towards payment of amounts due and payable by the Borrower under the
Design and Construction Contracts;
	 
	 	(c)	 	to apply Advances made pursuant to clauses 4.3 and 7.2 in accordance with
clauses 4.3 and 7.2; and
	 
	 	(d)	 	to pay the proceeds of all other Advances in accordance with this Agreement.






	 	 	The Borrower acknowledges that such payments by (or made as agreed with) the Agent shall
constitute the making of an Advance to the Borrower by the Lenders and shall satisfy pro
tanto the obligation of the Lenders to advance sums to the Borrower under this Agreement.





 - 37 - 









 






	3.6	 	Upon receipt of each Drawdown Notice and a Drawdown Schedule complying with the terms of this
Agreement, the Agent shall deliver to each Lender a notice substantially in the form of part C
of schedule 2 and, subject to the provisions of clause 10, each of the Lenders shall on the
date set out in such notice, make available to the Agent its portion of such Advance in
accordance with clause 7.2.
	 
	3.7	 	If the first Advance has not occurred on or before the Date Certain, the Commitments shall
thereupon be automatically cancelled.
	 
	3.8	 	Any part of the Commitments undrawn and uncancelled at the end of the Drawdown Period shall
thereupon be automatically cancelled.
	 
	4	 	INTEREST, INTEREST PERIODS, FEES AND INTEREST ON OVERDUE SUMS
	 
	4.1	 	The Borrower shall pay interest by reference to the rate referred to in schedule 10 in
respect of the relevant Facility (the “Reference Rate”) which shall be calculated quarterly on
each Advance or, as the case may be, the Loan in respect of each Interest Period relating
thereto on each relevant Interest Payment Date at the rate per annum determined by the Agent
to be the aggregate of (a) the Margin; and (b) the Reference Rate for such Interest Period;
	 
	4.2	 	Every Interest Period in respect of each Facility shall be as specified in the relevant part
of schedule 9 which relates to that Facility but so that:






	 	(a)	 	the initial Interest Period in respect of each Facility in respect of each
Advance will commence on the date on which such Advance is made and each subsequent
Interest Period in respect of the Loan will commence forthwith upon the expiry of the
previous Interest Period;
	 
	 	(b)	 	the initial Interest Period in respect of the first Advance shall be the
period until the next Interest Payment Date and in respect of each Advance after the
first Advance shall end on the same day as the then current Interest Period for the
Loan; and




 - 38 - 









 












	 	(c)	 	each Interest Period in respect of the Loan shall end on the Interest Payment
Date.






	4.3	 	On any Interest Payment Date and/or on each date on which any interest and/or agency fee
and/or commitment fee and/or Security Trustee fee and/or underwriting fee and/or appraisal fee
and/or front-end fee or any other fee falls due under clause 6.1 or otherwise hereunder (as
the case may be), the Lenders shall, should the Majority Lenders so wish, (subject to any
application made pursuant to clause 9.3 in payment of any such fees and the provisions of the
Base Case Model in respect of the limitations concerning the use of the Loan for the payment
of interest) advance to the Borrower a principal amount equal to the amount of interest and/or
agency fee and/or Security Trustee fee and/or commitment fee and/or underwriting fee and/or
appraisal fee and/or front-end fee and/or any other fee hereunder (as the case may be) then
due for payment pursuant to clauses 4.1 and/or 6.1(b) and/or 6.1(c) and/or 9.3 or as otherwise
provided herein and subject to the conditions that:






	 	(a)	 	no Potential Event of Default or Event of Default shall have occurred and be
continuing unremedied and unwaived in accordance with the terms of this Agreement as
at any such relevant date;
	 
	 	(b)	 	the aggregate principal amount advanced under this clause 4.3 shall not
exceed the Committed Amount (as described in schedule 9) in respect of the relevant
Facility;
	 
	 	(c)	 	the aggregate principal amount available to be advanced under this clause 4.3
(determined in accordance with the other provisions of this Agreement, including,
without limitation, clause 4.3(b)) shall be at least equal to the aggregate amount of
such interest and/or agency fees and/or commitment fees and/or underwriting fee and/or
appraisal fee and/or Security Trustee fees and/or front-end fee or other fee hereunder
(as the case may be) due for payment on any such relevant date after application of
any moneys from the Proceeds Account as aforesaid; and




 - 39 - 









 












	 	(d)	 	no Advance may be made pursuant to this clause 4.3 which would result in a
breach of clause 3.2.






	 	 	Each amount so advanced shall be applied in payment of the interest and/or agency fee
and/or commitment fee and/or underwriting fee and/or appraisal fee and/or Security Trustee
fee and/or front-end fee or other fee hereunder (as the case may be) in respect of which it
is advanced and shall for all purposes of this Agreement be treated as an Advance made by
the Lenders and shall form part of the Loan and bear interest in accordance with the other
provisions of this Agreement. For the avoidance of doubt, no Drawdown Notice need be given
by the Borrower in relation to an Advance to be made pursuant to this clause 4.3.
	 
	4.4	 	The provisions of clause 4.3 above are without prejudice to the liability of the Borrower to
pay interest, agency fees, commitment fees, underwriting fee and/or appraisal fee, front-end
fees, Security Trustee fees and/or the fees of the Lenders’ Advisers and in the event that no
Advance is made available pursuant to clause 4.3 (because the conditions set out in clause 4.3
are not satisfied or as a result of the application of clause 13.1 or clause 13.3) the
Borrower shall pay the relevant amount of agency fee, commitment fee, underwriting fee and
appraisal fee, Security Trustee fee and/or other fees falling due in accordance with the other
terms of this Agreement.
	 
	4.5	 	If the Borrower fails to pay any sum (including, without limitation, any sum payable pursuant
to this clause 4.5) on its due date for payment under this Agreement the Borrower shall pay
interest on such sum from the due date up to the date of actual payment (as well after as
before judgment) at a rate determined by the Agent pursuant to this clause 4.5. The period
beginning on such due date and ending on such date of payment shall be divided into successive
periods of not more than three Months as selected by the Agent (after consultation with the
Lenders) each of which (other than the first, which shall commence on such due date) shall
commence on the last day of the preceding period. The rate of interest applicable to each such
period in respect of each Facility (the “Default Rate”) shall be the aggregate (as determined
by the Agent) of (a) two per cent per annum (b) the Margin, (c) the Reference Rate. Such
interest shall be due




 - 40 - 









 






	 	 	and payable on the last day of each such period as determined by the Agent and each such
day shall, for the purposes of this Agreement, be treated as an Interest Payment Date,
provided that if such unpaid sum is of principal which became due and payable on a date
other than an Interest Payment Date relating thereto, the first such period selected by the
Agent shall be of a duration equal to the period between the due date of such principal sum
and such Interest Payment Date and interest shall be payable on such principal sum during
such period at a rate two per cent above the rate applicable thereto immediately before it
fell due. If for the reasons specified in clause 13.2(a) or I3.2(b)(ii), or otherwise, the
Agent is unable to determine a rate in accordance with the foregoing provisions of this
clause 4.5, each Lender shall promptly notify the Agent of the cost of funds to such Lender
and interest on any sum not paid on its due date for payment shall be calculated for each
Lender at a rate determined by the Agent to be two per cent per annum above the aggregate
of the Margin and the cost of funds to such Lender.






	4.6	 	The Agent shall notify the Borrower and the Lenders promptly of the duration of each Interest
Period and of each rate of interest determined by it under this clause 4.
	 
	5	 	REPAYMENT AND REDUCTIONS, PREPAYMENT / MANDATORY PREPAYMENT / CANCELLATION







	 
	5.1	(a)	The Borrower shall repay the Loan in respect of each Facility by the instalments
indicated in the relevant part of schedule 9 which relates to the relevant Facility, together
with all interest and other sums then owing under this Agreement and/or the Security
Documents, one such instalment to be paid on each of the Repayment Dates set out therein.






	 	(b)	 	The Commitments of the Lenders shall be reduced on each such Repayment Date
by the amount of the relevant repayment instalment.






	5.2	 	Subject to and provided the Baseline Ratio Undertaking and the Debt Service Reserve Account
Undertaking are not breached and further subject to any capital repayment provisions in the
relevant part of schedule 9 in respect of the relevant Facility, the Borrower may in respect
of each Facility prepay the Loan in whole or part (which shall




 - 41 - 









 






	 	 	be applied towards the repayment obligations in inverse order of maturity), each such
prepayment being R500 000 (five hundred thousand Rand) under the DBSA Loan Facility or R300
000 (three hundred thousand Rand) under the DBSA Underwriting / Partial Risk Facility or
any sum larger than R500 000 (five hundred thousand Rand) and R300 000 (three hundred
thousand Rand) under respectively each Facility, which is an integral multiple of R100 000
(one hundred thousand Rand), on any Interest Payment Date relating to the part of the Loan
to be prepaid upon payment of a premium as specified in schedule 10 as the “Prepayment
Premium” of the principal amount prepaid, together with accrued interest to the date of
prepayment, any Swap Breakage Costs, and any other sum then payable under this Agreement,
provided that the Agent shall have received from the Borrower not less than 30 days notice
of its intention to make such prepayment, specifying the amount to be prepaid.






	5.3	 	Every notice of prepayment shall be effective only on actual receipt by the Agent, shall be
irrevocable and shall oblige the Borrower to make such prepayment on the date specified. No
amount prepaid may be reborrowed. The Borrower may not prepay the Loan or any part thereof
save as expressly provided in this Agreement.
	 
	5.4	 	Subject to and provided the Baseline Ratio Undertaking and Debt Service Reserve Account
Undertaking are not breached the Borrower may in respect of each Facility at any time during
the Drawdown Period by notice to the Agent (effective only on actual receipt) cancel with
effect from a date not less than 30 (thirty) days after the receipt by the Agent of such
notice the whole or any part (being R500 000 (five hundred thousand Rand) under the DBSA Loan
Facility or R300 000 (three hundred thousand Rand) under the DBSA Underwriting/Partial Risk
Facility (or the Available Facility Amount if less) or any larger sum which is an integral
multiple of R100 000 (one hundred thousand Rand)) of the Available Facility Amount which has
not then been borrowed or requested in a Drawdown Notice. Any such notice of cancellation,
once given, shall be irrevocable and upon such cancellation taking effect the Commitment of
each of the Lenders shall be reduced proportionately.




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	5.5	 	In the event that no Advance is made by the end of the last day of the Availability Period
the Commitment of all the Lenders shall be reduced to zero.
	 
	6	 	FEES AND EXPENSES
	 
	6.1	 	In respect of each Facility the Borrower shall pay to the Agent whether or not any part of
the Commitments is ever advanced:






	 	(a)	 	on the date of the first Advance as provided for in the Drawdown Notice and
on each anniversary thereof until all the Borrower’s actual and/or contingent payment
obligations under this Agreement have been fulfilled for the account respectively of
the Agent and of the Security Trustee, an agency fee (of an amount agreed between the
Lenders and the Agent, subject to the consent of the Borrower, such consent not to be
unreasonably withheld and/or delayed) and a trustee fee (of an amount agreed between
the Lenders, the Borrower and the Security Trustee and reflected in an appointment
letter).
	 
	 	(b)	 	on the dates falling on the Interest Payment Dates and on the Drawdown
Termination Date, for the account of the Lenders, a commitment fee computed at the
rate referred to in schedule 10 on the daily undrawn and uncancelled amount of the
Commitments, accruing for the following periods:






	 	(i)	 	from the date 30 (thirty) days after the date of this
Agreement (if such date is earlier than the date of the first Advance) until
the date of the first Advance or the next Interest Payment Date, whichever is
the earlier;
	 
	 	(ii)	 	from the date of any Advance until the next subsequent
Advance or the next Interest Payment Date, or the Drawdown Termination Date,
whichever is the earlier,
	 
	 	(iii)	 	from any Interest Payment Date to the next Interest Payment
Date or the Drawdown Termination Date, whichever is the earlier, where no
Advances are made within such period; and




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	 	(iv)	 	from the last Interest Payment Date to the Drawdown
Termination Date, where no Advances are made within such period;






	 	(c)	 	unless an earlier date is agreed or otherwise stipulated herein, on the date
of the first Advance or no later than one Month after the date of this Agreement,
whichever is the earlier (i) for the account of DBSA an underwriting fee, appraisal
fee and the front end fee referred to in the relevant parts of schedule 10, which fee
amounts are exclusive of VAT; and (ii) all other reasonable fees of the Lenders’
Advisers incurred as at the date of such Advance;






	6.2	 	The Borrower shall pay to the Agent on written notification:






	 	(a)	 	all expenses and costs reasonably incurred by the Agent and the Security
Trustee (provided the same are incurred subject to the consent of the Borrower, such
consent not to be unreasonably withheld and/or delayed) in connection with the
execution of this Agreement and/or the Security Documents and of any amendment or
extension of or the granting of any waiver or consent under this Agreement and/or the
Security Documents or any of them;
	 
	 	(b)	 	all expenses evidenced by way of a detailed and substantiated written account
reasonably incurred by the Agent, the Security Trustee, the Lenders or any of them in
contemplation of, in respect of the performance of or otherwise in connection with the
execution of, maintenance of, enforcement of or preservation of any rights under this
Agreement, the Project Documents or the Security Documents, or otherwise in respect of
the moneys owing under this Agreement or the Security Documents including, without
limitation, all breakage costs incurred as a result of the termination of any agreed
hedging strategy, facility or deposit arrangement, a Breakage Fee of the percentage
referred to in the relevant part of schedule 10 in respect of all outstanding amounts
under this Agreement in the event of acceleration of the Facilities due to an Event of
Default by the Borrower together with interest at the rate referred to in clause 4.5
from the date




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	 	 	 	on which such expenses were incurred to the date of payment (as well after as
before judgment); and






	 	(c)	 	all expenses reasonably incurred by the Agent and the Lenders or any of them
in connection with the appointment of the Security Trustee and Lenders’ Advisers on
behalf of the Agent and the Lenders provided the same, other than in respect of
expenses incurred in connection with the preservation and/or enforcement by the
Lenders of their rights hereunder, are incurred with the consent of the Borrower, such
consent not to be unreasonably withheld and/or delayed.






	 	 	All fees and expenses payable pursuant to clauses 6.1 and 6.2 above shall be paid in Rand
together with Value Added Tax (if any) thereon.
	 
	6.3	 	The Borrower shall pay all stamp, documentary, registration or other like duties or taxes
(including any duties or taxes payable by the Lenders) imposed on or in connection with this
Agreement, the Security Documents or the-Loan and shall indemnify the Agent, the Security
Trustee and the Lenders against any liability arising by reason of any delay or omission by
the Borrower to pay such duties or taxes, but for the avoidance of doubt the Borrower shall
not be liable to pay any other like duties or taxes of the Lenders which arise other than in
connection with this Agreement, the Security Documents or the Loan or any other duties whether
under this Agreement or otherwise unless otherwise provided for herein.
	 
	7	 	PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
	 
	7.1	 	All payments to be made by the Borrower under this Agreement or the Security Documents shall
be made in full, without any set-off or counterclaim whatsoever and, subject as provided in
clause 7.7, free and clear of any deductions or withholdings, in Rand and in immediately
available funds not later than 12 noon on the due date to the account of the Agent at such
bank in South Africa as notified to the Borrower by the Agent. Save as otherwise expressly
provided by this Agreement such payments shall be for the account of the Lenders and the Agent
shall forthwith distribute such payments in




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	 	 	like funds as are received by the Agent to the Lenders rateably in accordance with their
Commitments or Contributions, as the case may be.






	7.2(a)(i)	 	Subject to sub-clause 7.2(b) below, all sums to be advanced by the Lenders to the Borrower
under this Agreement shall be remitted in Rand and paid in immediately available funds on the
date of the Advance into the Proceeds Account or at such other bank or in such other place as
the Agent with the agreement of the Borrower may have notified to the Lenders and shall be
applied by the Agent (or applied as otherwise agreed by the Lenders and Borrower with the
Agent (the “Alternative Application”) in respect of Eligible Costs on such date in like funds
as are received by or by order of the Agent in accordance with clause 3.5.
	 
	7.2(a)(ii)	 	In the event that the Borrower and the Agent agree that the Account Bank shall not be
ABSA Bank, such bank shall be a reputable bank approved by the Agent acting on the
instructions of the Majority Lenders, which has agreed (without prejudice to or limitation of
any other reasonable conditions which the Majority Lenders may impose) to supply the Agent
with Monthly statements in arrears evidencing in sufficient detail all payments in and out of
the Account Bank, such that the Agent in reliance upon such statement might reasonably suppose
(but subject to clauses 16.8, 16.9 and 16.12 below) that such payments have been used solely
for the purposes of Eligible Costs or such other purposes as provided for herein.






	 	(b)	 	In the case of an Advance made pursuant to the Alternative Application or
pursuant to clause 4.3 (except in the case of an Advance, to be made in respect of
agency fees or Security Trustee fees due pursuant to clauses 6.1(a) and 6.2 or
otherwise payable hereunder to the Agent and/or Security Trustee, in which case the
foregoing provisions of sub-clause 7.2(a)(i) shall apply,) each Lender shall on each
date on which any commitment fee or other fee falls due make the appropriate entries
in its accounts referred to in clause 7.9 to reflect a payment to the Borrower of an
amount equal to the interest and/or commitment fee and/or underwriting fee and/or
appraisal fee and/or front-end fee or other fee hereunder and (as the case may be) due
and payable to such Lender on such date and an




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	 	 	 	application of such payment in satisfaction of such interest and/or commitment fee,
other fee or Debt Service Reserve Amount (as the case may be) so that no payment
shall actually be made to the account specified in clause 7.2(a) of the amount of
such Advance.






	7.3	 	Where any sum is to be paid under this Agreement to (or by order of) the Agent or as
otherwise agreed with the Agent and the Lenders for the account of another person, the Agent
may assume that the payment will be made when due and may (but shall not be obliged to) make
such sum available to the person so entitled. In the event that such payment was not made to
the Agent or in accordance with directions given by the Agent (or as otherwise agreed with the
Agent and the Lenders) then the person (to the extent such person is bound by the terms of
this Agreement) to whom such sum was so made available shall on request refund such sum to the
Agent together with interest thereon sufficient to compensate the Agent for the cost of making
and/or causing to be made available such sum up to the date of such repayment and the person
by whom such sum was payable (to the extent such person is bound by the terms of this
Agreement) shall indemnify the Agent for any and all loss or expense which the Agent may
sustain or incur as a consequence of such sum not having been paid on its due date.
	 
	7.4	 	When any payment under this Agreement would otherwise be due on a day which is not a Banking
Day, the due date for payment shall be made on the next succeeding Banking Day.
	 
	7.5	 	All interest and other payments of an annual nature under this Agreement shall accrue from
day to day and be calculated on the basis of actual days elapsed and a 365 day year.
	 
	7.6	 	Any certificate or determination of the Agent or any Lender as to any rate of interest shall,
in the absence of manifest error be prima facie binding on the Borrower and (in the case of a
certificate or determination by the Agent) on the Lenders.
	 
	7.7	 	If at any time the Borrower is required to make any deduction or withholding in respect of
Taxes from any payment due under this Agreement or the Security Documents for the account of
any Lender, the Security Trustee or the Agent (or if the Agent is required to




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	 	 	make any such deduction or withholding from a payment to the Lender) and such sums have not
been paid by and/or on behalf of the Borrower, the sum due from the Borrower in respect of
such payment shall be increased to the extent necessary to ensure that, after the making of
such deduction or withholding, each Lender, the Security Trustee, the Agent and receive on
the due date for such payment (and retains, free from any liability in respect of such
deduction or withholding) a net sum equal to the sum which it would have received had no
such deduction or withholding been required to be made. The Borrower shall and hereby does
indemnify each Lender, the Security Trustee and the Agent and against any losses or costs
incurred by any of them by reason of any failure of the Borrower to make any such deduction
or withholding or by reason of any increased payment not being made on the due date for
such payment. The Borrower shall promptly deliver to the Agent any receipts, certificates
or other proof evidencing the amounts (if any) paid or payable in respect of any deduction
or withholding as aforesaid.






	7.8	 	If following any such deduction or withholding as is referred to in clause 7.7 from any
payment by the Borrower, the Agent, the Security Trustee or any Lender shall receive or be
granted a credit against or remission for any Taxes payable by it, the Agent, the Security
Trustee or such Lender shall, subject to the Borrower having made any increased payment in
accordance with clause 7.7 reimburse the Borrower with such amount as places the Agent or the
Security Trustee or such Lender (after such reimbursement) in no worse position than it would
have been in had there been no such deduction or withholding from the payment by the Borrower
as aforesaid. Such reimbursement shall be made forthwith upon the Agent or such Lender
certifying that the amount of such credit or remission has been received by it. Nothing
contained in this Agreement shall obligate any Lender to rearrange its tax affairs or to
disclose any information regarding its tax affairs and computations and without prejudice to
the generality of the foregoing, the Borrower shall not, by virtue of this clause 7.8, be
entitled to enquire about the tax affairs of any Lender, or Agent or Security Trustee unless
it is necessary in order to enable the Borrower to comply with its obligations and benefit
from its rights under this clause and the Borrower is entitled to so enquire under applicable
law and each of the




 - 48 - 









 






	 	 	Lenders, Agent and Security Trustee (as the case may be) is obliged to provide such
information under applicable law.






	7.9	 	Each Lender shall maintain, in accordance with its usual practices, an account or accounts
evidencing the amounts from time to time lent by, owing to and paid to it under this
Agreement. The Agent shall maintain a control account showing the Loan and other sums owing by
the Borrower under this Agreement and all payments in respect thereof made by the Borrower
from time to time. The control account shall, in the absence of manifest error, provide prima
facie evidence as to the amount from time to time owing by the Borrower under this Agreement.
	 
	8	 	REPRESENTATIONS AND WARRANTIES
	 
	8.1	 	On and as from the Effective Agreement Date the Borrower shall represent and warrant (and
shall be deemed to so represent and warrant on a continuing basis) to each of the Lenders, the
Agent and the Security Trustee that:






	 	(a)	 	the Borrower is duly incorporated in South Africa and validly existing under
the laws of South Africa as a limited liability company and has power to carry on its
business in South Africa as it is now being conducted and to own its Property and
other assets;
	 
	 	(b)	 	the Borrower has power to execute, deliver and perform its obligations under
this Agreement, the Security Documents and the Project Documents to which it is a
party and to borrow the Commitments; all necessary corporate, shareholder and other
action has been taken to authorise the execution, delivery and performance of the same
and no limitation on the powers of the Borrower to borrow or to create security will
be exceeded as a result of borrowings under this Agreement or the creation and
delivery of the Security Documents to which it is a party respectively;




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	 	(c)	 	this Agreement, the Project Documents and the Security Documents to which it
is a party constitute valid and legally binding obligations of the Borrower
enforceable in accordance with their respective terms;
	 
	 	(d)	 	the execution and delivery of, the performance of the obligations of the
Borrower under and compliance with the provisions of, this Agreement, the Security
Documents and the Project Documents to which the Borrower is a party by the Borrower
will not (i) contravene any existing applicable law, statute, rule or regulation or
any judgment, decree or permit to which the Borrower is subject, (ii) conflict with,
or result in any breach of any of the terms of, or constitute a default under, any
agreement or other instrument to which the Borrower is a party or is subject or by
which the Borrower or any of the Property of the Borrower is bound, (iii) contravene
or conflict with any provision of the Memorandum and Articles of Association of the
Borrower or (iv) result in the creation or imposition of or oblige the Borrower to
create any Encumbrance (other than a Permitted Encumbrance or under the Security
Documents) on any of the Borrower’s undertaking, assets, rights or revenues;
	 
	 	(e)	 	no litigation, arbitration or administrative proceeding is taking place,
pending or, to the best of the knowledge and belief of the Borrower, threatened
against the Borrower which could have a Material Adverse Effect on the business,
assets or financial condition of the Borrower;
	 
	 	(f)	 	the audited financial statements of the Borrower in respect of the latest
financial year as delivered to the Agent have been prepared in accordance with
generally accepted accounting principles and practices in South Africa which have been
consistently applied and fairly present the financial position of the Borrower for
such financial year and, as at the end of such financial year the Borrower did not
have any significant liabilities (contingent or otherwise) which are not disclosed by,
or reserved against in, such financial statements and the Borrower did not have any
unrealised or anticipated losses, save that in the event that the aforementioned
audited financial statements are not available at the Effective




 - 50 - 









 






	 	 	 	Agreement Date, the representation and warranty in this clause 8.1(f) on such date
shall be in respect of the unaudited financial statements of the Borrower;






	 	(g)	 	the Secured Assets of the Borrower are beneficially owned by the Borrower
free and clear of any Encumbrance (save for Permitted Encumbrances and those created
or to be created by the Security Documents);
	 
	 	(h)	 	the Borrower is at least 26,0% (twenty-six comma nought per cent) owned by
Biwater Operations;
	 
	 	(i)	 	the Borrower is not in breach of the Ratio Undertakings; and
	 
	 	(j)	 	other than sub-paragraph (o) of part A of schedule 3 and subject to part B of
schedule 3 and other than any Condition Precedent which the Majority Lender has
notified to the Borrower, in writing, is to be waived under clause 10.3, the
Conditions Precedents referred to in schedule 3 are satisfied and no breach in respect
thereof has occurred and/or is continuing which is likely to have a Material Adverse
Effect.






	8.2	 	The Borrower further represents and warrants to each of the Lenders, the Agent and the
Security Trustee that:






	 	(a)	 	the Relevant Consents have been obtained or made and are in full force and
effect and there has been no default in the observance of the conditions or
restrictions (if any) imposed in, or in connection with, any of the same;
	 
	 	(b)	 	the copies of the Project Documents and the Memorandum and Articles of
Association of the Borrower delivered to the Agent on the date of the execution, or to
be delivered to the Agent pursuant to clause 10, of this Agreement are or, as the case
may be, will be true, complete and accurate in all material respects and have not been
amended, varied or supplemented in any material way and no other agreements,
arrangements or understandings exist or, to the best of the knowledge and belief of
the Borrower and its officers, are contemplated between all or any of the parties to
those agreements and instruments which would have a




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	 	 	 	Material Adverse Effect on the transactions or arrangements thereby contemplated;






	 	(c)	 	(other than as may result, or may have resulted, from entering into the
Project Documents) prior to the date of this Agreement, the Borrower has not
undertaken any trading or incurred any liabilities whatsoever other than normal
trading liability in respect of the Project as provided for in the Base Case Model,
whether actual or contingent, except for liabilities in respect of professional fees
or which would result if the Borrower were to be wound up;
	 
	 	(d)	 	the obligations of the Borrower under this Agreement are direct, general and
unconditional obligations of the Borrower and rank in priority to all other unsecured
and unsubordinated Indebtedness of the Borrower with the exception of any obligations
which are mandatorily preferred by law and not by contract;
	 
	 	(e)	 	the Borrower is not (nor would with the giving of notice or lapse of time or
the satisfaction of any other condition or any combination thereof be) in breach of or
in default under any agreement relating to Indebtedness to which it is a party or by
which it may be bound;
	 
	 	(f)	 	it has good right and title to its Secured Assets and has full power and
authority to grant to the Security Trustee the security interest in its Secured Assets
created pursuant to any of the Security Documents without the consent or approval of
any other person other than any consent or approval which has been obtained;
	 
	 	(g)	 	any of the Security Documents which describes Secured Assets as being
beneficially owned by the Borrower is a true, accurate and complete list of such
assets so owned by it as at the date of the relevant Security Document;
	 
	 	(h)	 	on the Effective Agreement Date it shall, subject to the rights and
obligations of the Council and DWAF, if any, as provided for under the Concession
Agreement, be entitled to use the Property for the purposes of the Project free from
Encumbrances other than Permitted Encumbrances;




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	 	(i)	 	the information, exhibits and reports furnished by the Borrower to the Agent
and the Lenders in connection with the Information Memorandum and/or in connection
with the negotiation and preparation of this Agreement are true and accurate in all
material respects and not misleading, do not omit material facts and all reasonable
enquiries have been made to verify the facts and statements contained therein; there
are no other facts, the omission of which would make any fact or statement therein
misleading;
	 
	 	(j)	 	in relation to the Property, to the best of its knowledge and belief -






	 	(i)	 	the Property is free from:






	 	(a)	 	any Encumbrance other than any Permitted
Encumbrance and no such matter exists which is capable of
registration against it;
	 
	 	(b)	 	any security registered or registerable at
the Deeds Registry, caution, inhibition or notice;






	 	 	 	which may have a Material Adverse Effect;






	 	(ii)	 	no person is entitled to any right over or interest in the
Property or any right of pre-emption, first refusal, surrender or
determination which may have a Material Adverse Effect and any option or right
enjoyed by the Borrower (or capable of being enjoyed by the Borrower following
the Effective Agreement Date) has been, or will on the Effective Agreement
Date, be properly protected by the appropriate registration where necessary
and all appropriate notices have been properly served where any such option or
right has become exercisable;
	 
	 	(iii)	 	there are no covenants, stipulations, restrictions,
easements, rights of way, exceptions, reservations, grants, conditions,
agreements or declarations nor is there any subsisting or alleged breach of
any of the said matters which may have a Material Adverse Effect;




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	 	(iv)	 	all the outgoings (if any) which have become due in respect
of the Property which affect and/or may affect the rights and obligations of
the Borrower, have been paid and all obligations under all covenants,
conditions, agreements, statutory requirements, planning consents, bye-laws,
orders and regulations have been performed and observed in all material
respects and no notice of any breach of any such matter has been received and
no use of the Property contravenes any of the foregoing in such a way as to
have a Material Adverse Effect in respect of the Property as provided for in
the Concession Agreement;
	 
	 	(v)	 	as far as the Borrower is aware, there are no outstanding
claims, orders or notices affecting the Property or any Part thereof and there
are no proposals of any local or other authority (involving compulsory
acquisition or requisition or otherwise) or any other circumstances which may
result in any such claims, order or notice being made or served or which may
otherwise adversely affect the use of the Property as provided for in the
Concession Agreement; and
	 
	 	(vi)	 	the Borrower has not received notice of and is not aware of
any dispute of a material nature relating to the Property likely to affect the
use of the Property or any Part thereof as provided for in the Concession
Agreement;
	 
	 	(k)	 	it has no Subsidiaries;
	 
	 	(1)	 	all Shareholders to the Shareholders’ Agreement are duly
fully paid subscribers and have subscribed to the capital of the Borrower as
provided for in the Shareholders’ Agreement and are not in breach of the
Ownership Obligation;
	 
	 	(m)	 	it is in compliance with clause 10.4 of the Concession
Agreement; and
	 
	 	(n)	 	no Event of Default has occurred and is continuing.




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	8.3	 	The representations and warranties in clause 8.1 and 8.2 (and so that the representation and
warranty in clause 8.1(f) shall for this purpose refer to the then latest audited financial
statements delivered to the Agent under clause 9.1) shall be deemed to be repeated by the
Borrower on and as of each date of drawing of an Advance and each Interest Payment Date as if
made with reference to the facts and circumstances existing on each such day.
	 
	9	 	UNDERTAKINGS, INFORMATION REPORTING, PROJECT ACCOUNTS, RATIO LIMITS AND AGREEMENTS WITH THE
COUNCIL
	 
	 	 	Subject to any more stringent undertakings in the Project Documents,
the Borrower hereby undertakes in this clause 9 as follows:
	 
	9.1	 	Positive Undertakings
	 
	 	 	The Borrower undertakes with each of the Lenders, the Agent and the
Security Trustee that, from the date of this Agreement and so long as
any moneys are owing under this Agreement, it will:






	 	(a)	 	promptly inform the Agent and the Security Trustee of any occurrence of which
it becomes aware which might have a Material Adverse Effect on its ability to perform
its obligations under this Agreement and/or any of the Security Documents and/or any
of the Project Documents to which it is a party and of any Potential Event of Default
and/or Event of Default forthwith upon becoming aware thereof;
	 
	 	(b)	 	without prejudice to clauses 8.2 and 10, obtain or cause to be obtained,
maintain in full force and effect and comply in all material respects with the
conditions and restrictions (if any) imposed in, or in connection with, the Relevant
Consents and do, or cause to be done, all other acts and things which may from time to
time be necessary under applicable law for the continued due performance of all its
obligations under this Agreement and/or the Security Documents and/or the Project
Documents to which it is a party (including, without limitation, the construction and
completion of the Project);




 - 55 - 









 












	 	(c)	 	use the Loan exclusively for the purpose specified in clause 2.1;
	 
	 	(d)	 	without prejudice to the provisions of clause 9.5 or to the security
constituted, or which is provided hereunder shall be constituted under the Security
Documents, ensure that its obligations under this Agreement shall, at all times rank
in priority to all its other unsecured and unsubordinated Indebtedness with the
exception of any obligations which are mandatorily preferred by law and not by
contract;
	 
	 	(e)	 	provide to the Agent and the Lenders, if requested, no later than one Month
after the date of this Agreement and at quarterly intervals until all amounts under
the Facilities have been repaid, Project reports (in form and substance satisfactory
to the Agent and the Lenders which reports shall include:






	 	(i)	 	details of the progress made in connection with the Project
since the date of this Agreement or (as the case may be) the date of the
immediately preceding such report;
	 
	 	(ii)	 	details of the projected cash flow or revised projected cash
flow for each of the uncompleted stages of the Project;
	 
	 	(iii)	 	a brief reconciliation of the changes (if any) in the cash
flow projections from the previous such projections;
	 
	 	(iv)	 	an explanation in reasonable detail of the reasons for any
likely breach of the Baseline Ratio Undertaking if such Project report reveals
that by reference to the Base Case Model the Forecast Annual Debt Service
Cover Ratio (excluding cash) if realized would result in a breach of the
Baseline Ratio Undertaking; and
	 
	 	(v)	 	such other information in relation to the Project as the
Agent shall from time to time reasonably specify in order to ensure compliance
with the terms of this Agreement,





 - 56 - 









 






	 	 	 	and shall, if so requested by the Agent or the Lenders’ Technical Adviser, afford
to the Agent, its representatives and/or the Lenders’ Technical Adviser a
reasonable opportunity of attending any meetings held by the Borrower and its
advisers for the purpose of discussing the subject matter of each such report;
	 
	 	(f)	 	provide the Agent, after the Effective Agreement Date, with a schedule which
lists the time, date and venue of all planned Project and site meetings and meetings
with professionals relating to the Project (and subsequently give to the Agent not
less than 5 (five) Banking Days notice of any change of the time or place of any such
scheduled meeting) and afford to the Agent an opportunity to attend any and all such
meetings and at the Practical Completion Date and at six Monthly intervals thereafter,
provide Project reports to the Agent and the Lenders’ Technical Adviser;
	 
	 	(g)	 	promptly provide to the Agent and/or Lenders’ Technical Adviser and/or the
Lenders’ Insurance Adviser, if requested, certified copies of each material contract
relating to the Project executed by or on behalf of the Borrower after the date of
this Agreement;
	 
	 	(h)	 	within 21 (twenty one) days after the end of each Month provide to the Agent
if so requested, details of the amount of any revenues (including Compensation) for
that Month and otherwise in a form and with such details as the Agent may reasonably
require;
	 
	 	(i)	 	provide the Agent and/or the Lenders’ Technical Adviser with such documents
and financial and other information (material in the context of the Project and this
Agreement) concerning the Borrower and its affairs and/or the Project (including,
without limitations, copies of all variation orders, instructions, minutes of
meetings, drawings, specifications, costings and valuations prepared or otherwise
available in connection with the Project) as the Agent or any Lender (acting through
the Agent) or the Lenders’ Technical Adviser may from time to time reasonably require;




 - 57 - 









 












	 	(j)	(i)	obtain from the Contractor and Operator a performance
guarantee in form and substance acceptable to the Majority Lenders as provided
for in clause 4.2 of the Executed Design and Construction Contract, the
relevant clause(s) of the Un-executed Design and Construction Contract and
clause 33 of the Operation and Maintenance Agreement;






	 	(ii)	 	give preference to and ensure that the
Contractor and Operator give preference to local economic development
including but without limitation to local labour, local procurement,
previously disadvantaged enterprises and/or individuals and provide
support for the development of small, medium and micro enterprises,
contractors and professionals in the manner provided for in the
Concession Agreement, the Design and Construction Contracts and the
Operation and Maintenance Agreement;
	 
	 	(iii)	 	produce or cause to be produced the Information Memorandum.






	9.2	 	Further Positive Undertakings
	 
	 	 	The Borrower undertakes with each of the Lenders, the Agent and the
Security Trustee that, from the date of this Agreement and so long as
any moneys are owing under this Agreement, it will:






	 	(a)	 	procure that (i) in the event that the work has not commenced, the Project is
commenced as soon as practicable after the Effective Agreement Date and (ii) the
Practical Completion Date occurs as soon as practicable and in any event on or before
the Target Date. For the avoidance of doubt, the Borrower’s obligation under this
clause 9.2(a) shall not be terminated, diminished or otherwise affected by reason of
any amounts not being capable of being drawn down under this Facility Agreement unless
such amounts are not so capable of being drawn down due to reasons other than the
fault of the Borrower or the Sponsor;




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	 	(b)	 	without prejudice to clause 9.2(a):






	 	(i)	 	ensure that the Project is undertaken and completed in a good
and workmanlike manner with good and suitable materials in accordance with the
terms of the Project Documents and in compliance with all applicable
technical, safety and environmental regulations and all Relevant Consents,
building regulation approvals and other relevant statutory or other regulatory
requirements and/or consents and approvals;
	 
	 	(ii)	 	obtain all further requisite planning consents, building
regulation approvals and other matters (in addition to the Relevant Consents)
to enable it to commence, continue with and complete the Project;
	 
	 	(iii)	 	procure due performance of the defects liability obligations
of the Contractor within the requisite period and otherwise in accordance with
the Design and Construction Contracts;
	 
	 	(iv)	 	not use or allow to be used in the Project any materials not
in accordance with South African law, regulation and/or codes of practice;
	 
	 	(v)	 	comply with all relevant Acts of the National Government
and/or any relevant provincial government and/or regulations made thereunder
and all by-laws, regulations and codes of practice of any local or competent
authority in relation to the Project and all deeds, agreements or other
obligations binding upon the owner or occupier of the Property and obtain all
necessary consents in respect of the Project upon reasonably satisfactory
terms;
	 
	 	(vi)	 	in order to fulfill its obligations under the Project
Documents negotiate and enter into any agreements necessary with third parties
in respect of the infringement of the access of light or air to, or other
rights or easements in relation to, adjoining or neighbouring property or in
respect of any easement, right or privilege required over adjoining or




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	 	 	 	neighbouring properties on terms previously approved by the Agent acting
on the advice of the Lenders and the instructions of the Majority Lenders;






	 	(vii)	 	in order to fulfill its obligations under the Project
Documents, make provision for the support and use of any land, walls,
buildings, roads or footpaths situate on or partly on the Property and on
adjoining land and, in carrying out the Project, minimise any nuisance or
annoyance, inconvenience or disturbance to the public or to adjoining or
neighbouring owners or occupiers or any other persons;
	 
	 	(viii)	 	procure that each of the Lenders, the Agent, the Lenders’ Technical Adviser,
the Security Trustee and all other persons authorised by them are at all times
afforded reasonable access to the Property and the books and records of the
Borrower and the buildings or other improvements in the course of construction
thereon to view the state and progress of the Project and materials used or
intended for use thereon;
	 
	 	(ix)	 	promptly commence and carry out the reinstatement of any Part
of the Property that is damaged whether or not as a result of the occurrence
of a risk in respect of which insurance has been effected or should have been
effected pursuant to the terms of this Agreement or the Security Documents;
	 
	 	(x)	 	notify the Agent and the Lenders’ Technical Adviser within
the relevant periods provided for in the Design and Construction Contracts of
the dates upon which the Borrower and/or the employers representative (as
described in the Design and Construction Contracts) intends to inspect the
Property in preparation of any test required under the Design and Construction
Contracts;
	 
	 	(xi)	 	subject to the terms of the Concession Agreement and/or the
Design and Construction Contracts, procure that the Contractor shall take down
or




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	 	 	 	remove all work or materials which the Lenders’ Technical Adviser may
determine to be unsound or unfit for the purposes for which they are
intended or which the Lenders’ Technical Adviser determines are not
substantially in accordance with the provisions of the Project Documents
and rectify any defects or omissions in the Project within a reasonable
period prescribed by notice in writing given by the Agent acting on the
advice of the Lenders’ Technical Adviser and the instructions of the
Majority Lenders;






	 	(c)	 	comply with all the terms of the Project Documents and any other agreement to
which it is a party that is material in the context of the Project and take all
necessary action to enforce prompt and proper performance and discharge by the other
parties of their respective obligations under the Project Documents and exercise its
rights and procure (so far as this is within its control) that others exercise their
rights under the Project Documents in a manner consistent with the Borrower’s
obligations under this Agreement and the Security Documents;
	 
	 	(d)	 	to the extent not already provided for in the Project Documents, use its
reasonable endeavours to procure that throughout the period of the involvement of any
contractor in the Project that each such contractor maintains professional indemnity
insurance policies in such sums and in such form as shall be approved by the Lenders’
Technical Adviser;
	 
	 	(e)	 	procure that each Project Document which is of a type that is ordinarily
cedable and in respect of which provision is made that it should be cedable, whether
under this Facility Agreement or the Security Documents or the Project Documents, is
capable of being ceded to the Security Trustee as security for the benefit of the
Security Trustee and to the Lenders or any substitute entity (as defined in the
Concession Agreement);
	 
	 	(f)	 	procure and/or ensure compliance with the matters referred to in sub-clause
9.2(n) below;




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	 	(g)	 	procure prior to the Effective Agreement Date the issue of an Operating and
Maintenance Performance Bond in respect of the Operation and Maintenance Agreement;
	 
	 	(h)	 	by the date falling 6 (six) months after the Effective Agreement Date,
prepare an Environmental Management Plan in form and substance satisfactory to the
Majority Lenders;
	 
	 	(i)	 	ensure compliance with South African market standards relating to the
installation and maintenance of computer software such that the terms of this
Agreement will be complied with and any works provided for hereunder efficiently
pursued;
	 
	 	(j)	 	ensure compliance with any laws or regulations relating to employee
shareholding and attendant rights and representation and to employment equity
obligations;
	 
	 	(k)	 	maintain satisfactory organisational structure and provide a flow-chart of
the same as well as essential and experienced qualified personnel as provided for in
the Operation and Maintenance Agreement and Design and Construction Contracts and/or
as otherwise provided for herein;
	 
	 	(l)	 	when requested by the Majority Lenders and/or the Agent negotiate in good
faith and enter into any necessary interest rate and/or currency swap hedging
arrangements on terms satisfactory to the Majority Lenders; and
	 
	 	(m)	 	obtain, where necessary, the consent of the South African Reserve Bank as
regards matters relating to exchange control.
	 
	 	(n)	 	without prejudice to or limitation of any of the undertakings referred to
above in this clause:




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	 	(i)	 	make timeous payment (time being of the essence) of all
amounts under the Facilities, this Agreement and the Project Documents
including all Taxes;
	 
	 	(ii)	 	obtain and maintain insurances covering risks and on terms
approved by the Lenders as provided for in the Project Documents;
	 
	 	(iii)	 	apply all insurance proceeds in accordance with the Project
Documents;
	 
	 	(iv)	 	maintain good title to all assets of the Borrower;
	 
	 	(v)	 	use all reasonable endeavours to ensure the accuracy and
completeness of all information supplied to the Lenders, the Agent or the
Security Trustee;
	 
	 	(vi)	 	immediately notify the Agent and the Security Trustee of any
statutory change to the functions, powers, duties, rights or obligations of
the Borrower or of any change to the management of the Borrower and/or of any
change in the overall structure of the Borrower;
	 
	 	(vii)	 	forthwith give notice to the Agent and the Security Trustee
of any major restructuring, or other transaction that may have a Material
Adverse Effect on the Borrower or the Project;
	 
	 	(viii)	 	furnish to the Agent information of any expected adverse fluctuation or
non-achievement of cash flow targets relative to the Project Budget;
	 
	 	(ix)	 	ensure that contractors (other than the Contractor and
Operator) to whom contracts are awarded by the Borrower are insured in terms
of policies in form and substance acceptable to the Majority Lenders;
	 
	 	(x)	 	if requested by the Majority Lenders, before awarding any
contract, other than any contract provided for in sub-clause 9.1(j)(i) above,
obtain from the relevant contractor a performance guarantee in terms of which
the




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	 	 	 	completion of the contract is guaranteed, in form and substance reasonably
acceptable to the Agent, acting on the instructions of the Majority
Lenders;






	 	(xi)	 	immediately notify the Agent and the Security Trustee upon
the exercise of the Sivukile Put-Call Option; and
	 
	 	(xii)	 	immediately notify the Agent and the Security Trustee of any
proposed allotment, issuance and/or transfer of shares in the Borrower;
	 
	 	(xiii)	 	procure the provision of Equity Subscription Guarantees in such amounts (as
determined by the Agent, acting on the instructions of the Majority Lenders)
as may be required to guarantee the Debt-Equity Ratio which amounts (without
prejudice to the obligations of the Borrower or the rights of the Lenders
hereunder) shall be reviewed and revised annually by the Agent (acting on the
instructions of the Majority Lenders) for the purpose of ensuring that the
Debt-Equity Ratio is guaranteed to the satisfaction of the Majority Lenders;






	 	(o)	 	Information Reporting
	 
	 	 	 	in addition to its obligations referred to in this clause 9.2, promptly upon
preparing, obtaining or becoming aware of, as the case may be, the relevant
information, documents or events, as soon as reasonably possible, provide to the
Agent the following:






	 	(i)	 	annual audited financial statements of the Sponsor and each
Shareholder by no later than 180 (one hundred and eighty) days after the
financial year end;
	 
	 	(ii)	 	in respect of the Borrower provide an annual audited
financial statement by no later than 180 (one hundred and eighty) days after
the financial year end;




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	 	(iii)	 	2 (two) Months (unless otherwise agreed) prior to each
anniversary of the effective date of the Concession Agreement, a copy of the
Project Budget, the Five Year Plan and Operations Management Plan for the 12
Month period following such date, for approval by the Majority Lenders;
	 
	 	(iv)	 	notification of the fulfilment or non-fulfilment of any tests
as provided for in the Design and Construction Contracts;
	 
	 	(v)	 	certified copies of all provisional and final acceptance
certificates issued by or on behalf of the Council or the Borrower or the
Contractor(s) during the Drawdown Period;
	 
	 	(vi)	 	all material information relative to the Borrower’s financial
affairs to the Lenders as may be reasonably required by the Lenders, Agent or
the Security Trustee from time to time within 10 (ten) Banking Days of any
request;
	 
	 	(vii)	 	all information required by the Agent in order to produce
cash flow projections at six-Monthly intervals;
	 
	 	(viii)	 	notification in writing of any material breakdown, stoppage or suspension of
any construction works;
	 
	 	(ix)	 	written notice of any breach or dispute in excess of R100 000
(one hundred thousand Rand) or in respect of any variation, termination of, or
right to terminate, any of the Project Documents which may have a Material
Adverse Effect and copies of all default notices, termination notices, other
material notices, reports and other material information delivered under the
Project Documents;
	 
	 	(x)	 	written notice of material claims, litigation, arbitration or
other similar proceedings commenced or threatened by a third party against the
Borrower or any of its subcontractors which may have a Material




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	 	 	 	Adverse Effect with respect to its obligations in terms of the Project
Documents;






	 	(xi)	 	written notice of occurrence of any Event of Default or
Potential Event of Default hereunder and any breach or default in terms of the
Project Documents together with details of the Borrower’s proposed action in
relation thereto;
	 
	 	(xii)	 	written notice of any request for the extension of time or
claim for additional payment pursuant to any Project Documents and all items
provided or received by the Borrower under the relevant Project Document in
connection therewith; and
	 
	 	(xiii)	 	written notification of the occurrence of an event of Force Majeure.






	9.3	 	Project Accounts
	 
	 	 	Without prejudice to the obligation of the Borrower to repay interest, principal and other amounts due under the Facilities
as provided for under schedules 9 and 10 hereto and otherwise in this Agreement, the Borrower undertakes with each of the
Lenders, the Agent and the Security Trustee that, from the date of this Agreement and for so long as any moneys are owing
under this Agreement:






	 	(a)	 	without the prior written consent of the Agent, it will not open or maintain
any bank account other than the Proceeds Account, the Income Account, the Debt Service
Reserve Account and the Operating Account;






	 	 	Credits to the Proceeds Account






	 	(b)(i)	 	it will ensure that all Advances are paid into an account in the name of the
Borrower opened and maintained by the Borrower with the Account Bank, such account
called or, as the case may be, to be called the “Nelspruit Water Project Proceeds
Account” (the “Proceeds Account”) (and such amounts shall be held by the Borrower in
trust for the Agent);




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	 	(b)(ii)	 	it will ensure that all Project Equity contributed in order to achieve or maintain
the Debt-Equity Ratio, whether pursuant to the Equity Subscription Agreements,
pursuant to any Equity Subscription Guarantee or otherwise, is paid into the Proceeds
Account;






	 	 	Withdrawals from the Proceeds Account






	 	(c)(i)	 	provided no Event of Default exists it shall be entitled to withdraw amounts from
the Proceeds Account, from amounts representing any Advance and from Project Equity
credited to the Proceeds Account, only to pay the relevant Eligible Costs for which
such Advance was borrowed and for which such Project Equity was contributed, when due
and payable;
	 
	 	(c)(ii)	 	after the expiry of the Drawdown Period, all amounts in the Proceeds Account which
have not been applied in accordance with clause 9.3(c)(i) above shall be transferred
to the Income Account to be applied pursuant to clause 9.3(e) below;






	 	 	Credits to the Income Account






	 	(d)	 	it will ensure that all amounts whatsoever (other than amounts credited to
the Proceeds Account in terms of clause 9.3(b) above) recovered or received by the
Borrower, whether capital, revenue or otherwise are forthwith upon recovery or receipt
and in like funds as recovered or received paid into an account in the name of the
Borrower opened and maintained by the Borrower with the Account Bank (the “Nelspruit
Water Services Income and Debt Service Account”) (the “Income Account”) (and such
amounts shall be held by the Borrower in trust for the Agent) and such amounts shall
include without limitation:






	 	(i)	 	Compensation;
	 
	 	(ii)	 	sums recovered by way of reclaim or set-off under the
relevant sections of the Value Added Tax Act in respect of expenditure
incurred in relation to the Project;




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	 	(iii)	 	all moneys other than those paid into the Proceeds Account
made available to the Borrower in respect of the Project whether under the
Sponsor Support Agreement (which amounts may only be used to pay the amount
for which such payment was made) or otherwise; and
	 
	 	(iv)	 	Water Services Income and Interest Income.






	 	 	Withdrawals from the Income Account






	 	(e)	 	provided no Event of Default exists, the Borrower shall be entitled to
withdraw amounts from the Income Account only to meet Project Costs due at any time,
in the following order of priority (the “Ranking Payment Order”):






	 	(A)	 	normal operation, maintenance and management costs (other
than the Fixed Management Fee) as evidenced in the Base Case Model and the
Operation and Maintenance Agreement (the “Operating Costs”) and in respect of
which the Borrower shall be entitled to withdraw funds in accordance with the
approved operational budget (as defined in the Operation and Maintenance
Agreement) provided the Borrower transfers such funds from the Income Account
to an operating account in the Borrower’s name opened and maintained by the
Borrower with the Account Bank and such account shall be called the Nelspruit
Water Project Operating Account (the “Operating Account”) and shall be used by
the Borrower to meet such Operating Costs from time to time and for no other
reason;
	 
	 	(B)	 	payments required to be made by the Borrower to the Council
in terms of the Concession Agreement, to the extent that set-off is not
permitted in terms of the Concession Agreement;
	 
	 	(C)	 	Eligible Costs, to the extent not paid out of the Proceeds
Account or to the extent there are insufficient funds in the Proceeds Account;




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	 	(D)	 	on each Interest Payment Date, on the Repayment Date and on
(or after but without prejudice to the obligation of the Borrower to make
payment when due) any other date on which any other amount falls due for
payment to the Agent or the Lenders or the Security Trustee (or any of them)
under this Agreement or any of the Security Documents, settlement of the
interest, Security Trustee fees, commitment fees, agency fees, other fees,
repayments, prepayments or other amounts then due and payable provided that
such moneys shall be applied first in or towards settlement of amounts which
would otherwise be the subject of an Advance pursuant to clause 4.3.
	 
	 	(E)	 	any Unfunded Cost;
	 
	 	(F)	 	transfer of the Debt Service Reserve Amount to the Debt
Service Reserve Account in respect of the Debt Service Reserve Account
Undertaking;
	 
	 	(G)	 	subject to clause 9.4(k)(B) below, payment of the
Subordinated Development Cost Loan;
	 
	 	(H)	 	subject to clause 9.4(k)(A) below, payment of the dividends
and/or Subordinated Liabilities;






	 	 	provided that -






	 	(f)	 	amounts representing moneys made available to the Borrower (whether by loan,
subscription for share capital or otherwise) by the Sponsor pursuant to the Sponsor
Support Agreement shall be applied to pay the amount for which such payment was made
when same is due and payable; and
	 
	 	(g)	 	amounts representing Compensation received by the Borrower shall be applied
as follows:




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	 	(i)	 	in relation to insurance proceeds received in respect of
third party liabilities, in payment of those liabilities;
	 
	 	(ii)	 	unless otherwise provided for under the terms of any relevant
insurance policy approved by the Majority Lenders, in relation to any other
insurance proceeds, in or toward reinstatement or making good the loss in
respect of which such proceeds were received;
	 
	 	(iii)	 	in relation to Compensation representing a payment of
damages and/or a penalty due to the Borrower under any Project Document, to
make a corresponding payment of damages and/or penalty due from the Borrower
under any other Project Document in respect of the same circumstances and any
excess may be applied in accordance with the Ranking Payment Order; and
	 
	 	(iv)	 	in relation to any other form of Compensation, in accordance
with the Ranking Payment Order.






	 	 	Debt Service Reserve Account Undertaking and Credits to the Debt Service Reserve
Account






	 	(h)(i)	 	the Borrower hereby undertakes that as from the date commencing at the end of the 36
(thirty-six) Month period after the Effective Agreement Date, the Debt Service Reserve
Account, shall be in funds of an amount not less than an amount equal to the aggregate
total amount of principal and interest payments due in respect of the next following 6
(six) Month period (the “Debt Service Reserve Amount”) (as determined by the Lenders
whose determination shall be final and binding) in respect of the relevant Facility
(such above mentioned undertakings in this clause 9.3(h)(i) shall herein be referred
to as the “Debt Service Reserve Account Undertaking”);
	 
	 	(h)(ii)	 	subject to clause 9.3(e), upon receipt of monies into the Income Account, the
Borrower shall, immediately such transfer is due for the purpose of satisfying the




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	 	 	 	Debt Service Reserve Account Undertaking cause the Account Bank to transfer the
Debt Service Reserve Amount in pursuance of the Debt Service Reserve Account
Undertaking to an account in the name of the Borrower opened and maintained by the
Borrower with the Account Bank called or, as the case may be, to be called the
“Nelspruit Debt Service Reserve Account” (the “Debt Service Reserve Account”) (and
pending such payment such amounts shall be held in trust by the Borrower for the
Agent);






	 	 	Withdrawals from Debt Service Reserve Account






	 	(i)	 	in the event there are no or insufficient monies in the Income Account and
provided the Borrower has obtained the prior written approval from the Agent acting on
the instructions of the Majority Lenders, the Borrower shall, on each Interest Payment
Date, on the Repayment Date and on (or after but without prejudice to the obligation
of the Borrower to make payment when due) any other date on which any other amount
falls due for payment to the Agent or the Lenders or the Security Trustee (or any of
them) under this Agreement or any of the Security Documents, transfer and/or cause to
be transferred moneys from the Debt Service Reserve Account, in or towards settlement
of the interest, Security Trustee fees, commitment fees, agency fees, other fees,
repayments, prepayments or other amounts then due and payable provided that such
moneys shall be applied first in or towards settlement of amounts which would
otherwise be the subject of an Advance pursuant to clause 4.3.






	 	 	Additional Provisions relating to the Project Accounts






	 	(j)	 	that the Project Accounts shall operate on the following terms:






	 	(i)	 	save as expressly provided in clause 9.3(e) above, and
sub-clause 9.3(j)(iii) below, the amounts credited to the Project Accounts
shall not be repayable to the Borrower nor shall the Borrower request the
withdrawal of any such amounts;




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	 	(ii)	 	the rights of the Borrower in respect of the Project Accounts
are not transferable (except as security under the relevant Security Document)
and the Borrower agrees that it will not create or permit to subsist any
cession or Encumbrance (other than a Permitted Encumbrance) over all or any
such rights;
	 
	 	(iii)	 	the Agent shall request the Account Bank (but without
liability therefor) to, on repayment of the Loan and the payment of all
interest, Security Trustee fees, agency fees, underwriting fee, appraisal fee,
front-end fees and commitment fees and all other fees and sums including,
without limitation, any Unfunded Cost payable under this Agreement and the
Security Documents) pay to the Borrower the balances (if any) then standing to
the credit of the Project Accounts;
	 
	 	(iv)	 	after an Event of Default has occurred and while it is
continuing unremedied and unwaived in accordance with the terms of this
Agreement, the Agent may, to the exclusion of the Borrower, in accordance with
the instructions of the Majority Lenders, withdraw sums from the Project
Accounts and operate the Project Accounts in or towards any of the purposes
for which moneys in those accounts may be applied and/or in or towards any of
the purposes specified in the enforcement provisions of the Security
Documents;
	 
	 	(v)	 	neither the Agent nor any Lender nor the Security Trustee
shall be liable to the Borrower for any non-payment of any liability of the
Borrower which could have been paid out of moneys standing to the credit of
the Project Accounts;
	 
	 	(vi)	 	the Borrower shall ensure that unless otherwise permitted
hereunder, so long as the Borrower is entitled to operate the Project
Accounts, such accounts are never overdrawn;




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	 	(vii)	 	the Agent may delegate its powers of withdrawal and
application hereunder to any administrator, receiver or other relevant
official in insolvency proceedings; and
	 
	 	(viii)	 	the Agent may require the Borrower to notify the Agent in advance of any
proposed withdrawals from the Project Accounts to show that such a withdrawal
is properly made.






	9.4	 	Negative Undertakings
	 
	 	 	The Borrower undertakes with each of the Lenders, the Agent and the
Security Trustee that, from the date of this Agreement and so long as
any moneys are owing under this Agreement, it will not, without the
prior written consent of the Agent acting on the instructions of the
Majority Lenders and (where the Agent considers it to be appropriate)
on the advice of the Lenders’ Technical Adviser, (and/or any other of
the Lenders’ Advisers) and, in respect of paragraphs (f), (g), (j) and
(q) only, the prior written consent of the Security Trustee:






	 	(a)	 	make any material change to the Project specifications;
	 
	 	(b)	 	terminate, rescind, vary, amend or waive, or acquiesce in any termination,
rescission, variation, amendment or waiver of the Project Documents (or any of them)
or of any provision of the Project Documents (or any of them) (and it will in any
event notify the Agent and the Security Trustee forthwith of any termination,
rescission, variation, amendment or waiver of any agreement referred to in this
Agreement or which relates to the Project);
	 
	 	(c)	 	enter into any substitute agreement for, or supplemental agreement to, any of
the Project Documents;
	 
	 	(d)	 	appoint any further or substitute Contractor or Operator;
	 
	 	(e)	 	abandon the Project as provided for in clause 11.1(r) below;




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	 	(f)	 	permit (save as contemplated by the Security Documents) any Encumbrance
(other than a Permitted Encumbrance) to subsist, arise or be created or extended over
all or any part of its present or future undertaking, assets, rights or revenues to
secure or prefer any present or future Indebtedness of the Borrower or any other
person;
	 
	 	(g)	 	save in respect of any agreed funding to be provided by the Shareholders,
whose rights and obligations shall be subordinated to those of the Lenders and the
Security Trustee, hereunder, incur or permit to exist any loan other than a Short Term
Loan not exceeding R5 million (five million Rand), any obligations in excess of the
aggregate amount of R5 million (five million Rand) in respect of Borrowed Money or
assume any liability under any guarantee, indemnity or other assurance against
financial loss in respect of Borrowed Money in favour of, any person except under or
pursuant to this Agreement and/or the Security Documents or any of them;
	 
	 	(h)	 	incur or permit to exist any obligations in respect of interest rate swap
and/or other interest rate hedging arrangements unless agreed with the Lenders;
	 
	 	(i)	 	merge, consolidate with any other company or person or make any offer of
shares in the Borrower to any other person or company;
	 
	 	(j)	 	(save as contemplated by the Security Documents) other than in accordance
with clause 9.4(m), sell, transfer, lease, lend or otherwise dispose of or cease to
exercise direct control over the whole or any part of its present or future
undertaking, assets, rights or revenues whether by one or a series of transactions
related or not which may have a Material Adverse Effect;






	 
	 	(k)	(A)	declare or pay any dividend or make any other distribution of
Subordinated Liabilities (other than the Annual Technical Support Fee and Management
Fee) (whether in cash or in specie) in respect of its share capital or any
subordinated loan, interest or principal, unless the Historical Annual Debt Service
Cover Ratio, the Forecast Annual Debt




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	 	 	 	Service Cover Ratio, the Loan Life Cover Ratio and the Project Life Cover
Ratio for the future years are respectively greater than 1,25:1, 1,25:1,
1,8:1 and 3:1 and provided further that no Potential Event of Default or
Event of Default is continuing (the “Dividend Payment Ratio Undertaking”)
save that payment of the Annual Technical Support Fee and the Management
Fee shall be subject to the fulfilment of the Baseline Ratio Undertakings
and subject further to there being no continuing Potential Event of
Default or Event of Default;






	 	(B)	 	repay the Subordinated Development Cost Loan (as below
defined) unless (a) the Sponsor is able to satisfy the Lenders by way of
documentary proof marked as approved by the Agent that a subordinated loan not
exceeding R10 million (ten million Rand) (the “Subordinated Development Cost
Loan”) would have been adjudged granted to the Borrower for purposes which
would have been covered by the definition of Initial Development Cost Fees had
such fees not been limited by the amount provided for in the definition of
Initial Development Cost Fees, (b) sub clause 9.4(k)(A) above is not breached
thereby and (c) until the earlier of :






	 	(i)	 	the date twelve Months after the Effective
Agreement Date (provided the Information Memorandum has been
produced); and
	 
	 	(ii)	 	the date on which the Shareholding Proviso
is satisfied;






	 	(l)	 	form, acquire or promote any Subsidiary or make any investment (whether by
subscription of share or loan capital or otherwise) in any other person;
	 
	 	(m)	 	carry on any business or incur any liability of any nature other than in
pursuance of the Project as contemplated by this Agreement and/or the Project
Documents to which it is a party;




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	 	(n)	 	make any loan other than a Short Term Loan not exceeding R300 000 (three
hundred thousand Rand) or provide any guarantee or indemnity to any person;
	 
	 	(o)	 	incur or commit any capital expenditure (in excess of R250 000 (two hundred
and fifty thousand Rand)) except in pursuance of the Project;
	 
	 	(p)	 	redeem or purchase any of its share capital or cancel or reduce any liability
for uncalled capital;
	 
	 	(q)	 	do or omit to do anything or acquiesce in any act or omission the effect of
which could or might reasonably be expected to jeopardise its ability to meet its
obligations under the Principal Indemnity and/or the security constituted by the
Security Documents or any of them;
	 
	 	(r)	 	enter into any transaction otherwise than on arm’s length commercial terms;
	 
	 	(s)	 	approve and/or enter into contracts other than the Project Documents
containing investments and/or financial expenditure of more than an aggregate annual
amount of R1 million;
	 
	 	(t)	 	authorise and/or incur expenditure and investments beyond an aggregate annual
amount of R1 million other than as provided for under the Project Documents;
	 
	 	(u)	 	undertake any “expansion” as described in clause 1.2.35 of the Concession
Agreement involving expenditure in excess of R250 000 (two hundred and fifty thousand
Rand); and
	 
	 	(v)	 	change its proprietary limited legal status and/or submit an-application in
that regard to the Registrar of Companies (in South Africa or elsewhere) or pass a
resolution for such change at a meeting of its Shareholders.





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	9.5	 	Maintenance of Value and Ratio Limits
	 
	 	 	The Borrower undertakes with each of the Lenders, the Agent and the
Security Trustee that, from the date of this Agreement and so long as
any moneys are owing under this Agreement, it will in respect of each
Facility:






	 	(a)	 	procure that at all times the subscription of the Shareholders to the issued
share capital of the Borrower is such that the Debt-Equity Ratio is not breached;
	 
	 	(b)	 	ensure that the ratio limits described in schedule 8 are not exceeded and
undertakings in respect of the same not breached.






	9.6	 	Obligations of the Borrower in respect of any agreement with the Council
	 
	 	 	Without prejudice to or limitation of the rights and obligations of the Borrower or Lenders under the Project Documents,
the Borrower shall obtain the written approval of the Majority Lenders (unless otherwise agreed) prior to reaching
agreement with the Council on any matter that may have a material impact on the Borrower and/or a Material Adverse Effect.
	 
	10	 	CONDITIONS






	 	10.1	(a)	The obligation of each Lender to make its Commitment available and to
contribute to any Advance shall be subject to the condition that the Effective
Agreement Date shall have occurred and that the Agent or its duly authorised
representative shall have received no later than the Effective Agreement Date the
documents and evidence specified in part B of schedule 3 to be supplied by such date
in form and substance satisfactory to the Agent.






	 	(b)	 	The obligation of each Lender to contribute to any Advance
other than any Advance referred to in clause 10.1(a) above shall be subject to
the condition that the Agent or its duly authorised representative shall have
received no later than 7 (seven) Banking Days before the day on which the
Drawdown Notice in respect of such Advance is given the documents and evidence
specified in part A of schedule 3 in form and substance




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	 	 	 	satisfactory to the Agent, unless the aforementioned documents and
evidence have already been received under clause 10.1(a) above.






	 	10.2	 	The obligation of each Lender to contribute to any Advance is subject to the
further conditions that at the time of the giving of a Drawdown Notice for and at the
time of the making of such Advance:






	 	(a)	 	the representations and warranties set out in clause 8.1 (and
so that the representation and warranty in clause 8.1(f) shall for this
purpose refer to the then latest audited financial statements delivered to the
Agent under clause 9.1) are true and correct on and as of each such time as if
each was made with respect to the facts and circumstances existing at such
time; and
	 
	 	(b)	 	no Event of Default shall have occurred and be continuing
unremedied and unwaived in accordance with the terms of this Agreement or
would result from the making of such Advance.






	 	10.3	 	The conditions specified in this clause 10 are inserted solely for the
benefit of the Lenders and may be waived on their behalf in whole or in part and with
or without conditions by the Agent acting on the instructions of the Lenders in
respect of the first or any other Advance without prejudicing the right of the Agent
acting on such instructions to require fulfilment of such conditions in whole or in
part in respect of any other Advance.






	11	 	EVENTS OF DEFAULT






	 	11.1	 	Each of the events set out below is an Event of Default (whether or not
caused by any reason outside the control of the Borrower) :






	 	(a)	 	Non-payment: the Borrower fails to pay any sum due
from it under this Agreement in Rand within 7 (seven) Banking Days (unless
such failure is due to the banking payment and/or settlement system by which
the




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	 	 	 	Borrower is obliged to make such payment) at the time stipulated and in
the manner provided for in this Agreement;






	 	(b)	 	Breach of other obligations: the Borrower or the
Sponsor commit any breach which has and/or is likely to have a Material
Adverse Effect or omits (and such omission has and/or is likely to have a
Material Adverse Effect) to observe or cause to be observed any of the
obligations or undertakings expressed to be assumed by it under or in relation
to this Agreement, including without limitation the Baseline Ratio
Undertaking, (other than failure to pay any sum when due) or any of the
Security Documents or Project Documents to which it is a party and, in respect
of any such breach or omission which in the reasonable opinion of the Majority
Lenders is capable of remedy, such action as the Agent may reasonably require
shall not have been taken within 20 (twenty) days of the Agent notifying the
Borrower or the Sponsor (as the case may be) of such default and of such
required action;
	 
	 	(c)	 	Misrepresentation: any representation or warranty
made or deemed to be made or repeated by the Borrower or the Sponsor in or
pursuant to this Agreement or any of the Security Documents or Project
Documents or in any notice, certificate or statement referred to in or
delivered under this Agreement or any of the Security Documents or Project
Documents is or proves to have been incorrect and in the reasonable opinion of
the Majority Lenders has a Material Adverse Effect on the ability of the
Borrower or of the Sponsor to perform all or any of their respective
obligations under or otherwise to comply with the terms of this Agreement or
any of the Security Documents or Project Documents;
	 
	 	(d)	 	Cross-default: any Indebtedness of the Borrower or of
the Sponsor (which, in the case of the Sponsor, has a Material Adverse Effect)
other than in respect of an Advance is not paid when due or becomes due and
payable, or any creditor of the Borrower or of the Sponsor (which, in the




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	 	 	 	case of the Sponsor, has a Material Adverse Effect) becomes entitled to
declare any such Indebtedness due and payable, prior to the date when it
would otherwise have become due or any guarantee or indemnity given by the
Borrower or of the Sponsor (which, in the case of the Sponsor, has a
Material Adverse Effect) in respect of Indebtedness or Borrowed Money is
not honoured when due and called upon and is not discharged within 20
(twenty) days;






	 	(e)	 	Consents and Authorisations: the Relevant Consents
are modified in a manner unacceptable to the Majority Lenders and a Material
Adverse Effect arises as a result of such modification or the Relevant
Consents are not granted or are revoked or terminated or expire and are not
renewed or otherwise cease to be in full force and effect and the
aforementioned has a Material Adverse Effect;
	 
	 	(f)	 	Attachment or Process: a creditor attaches or takes
possession of, or a judgment, execution or other process is levied or enforced
against, any of the undertakings, assets, rights or revenues of the Borrower
or of the Sponsor and is not discharged within 20 (twenty) days;
	 
	 	(g)	 	Insolvency:






	 	(i)	 	the Borrower or of the Sponsor commits an
act which if it were a natural person would be an act of insolvency
within the meaning of Section 8 of the Insolvency Act, 1936, as
amended or is deemed unable to pay its debts when they fall due or
otherwise the Borrower or the Sponsor is wound-up (whether
provisionally or finally and whether voluntarily or compulsorily) or
placed under judicial management (whether provisionally or finally);
	 
	 	(ii)	 	the Borrower or the Sponsor becomes, or
admits to being, unable generally to pay its debts as they fall due;
or




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	 	(iii)	 	the Borrower or the Sponsor otherwise
becomes insolvent or stops or suspends making payments (whether of
principal or interest) with respect to all or any class of its debts
or announces an intention to do so; or






	 	(h)	 	Compositions etc: any steps are taken, or
negotiations commenced, by the Borrower, the Sponsor or by the creditors
generally of the Borrower or of the Sponsor (or any class of them) with a view
to proposing (under any enactment or otherwise) any kind of composition,
scheme of arrangement, compromise or arrangement, in each case involving the
Borrower or of the Sponsor and their creditors generally (or any class of
them);
	 
	 	(i)	 	Appointment in winding-up:






	 	(i)	 	any person is appointed to wind-up or
administer the Borrower or of the Sponsor or any part of their
respective assets and/or undertaking;
	 
	 	(ii)	 	the directors of the Borrower or of the
Sponsor request any person to appoint a person to wind-up or
administer the Borrower or the Sponsor; or
	 
	 	(iii)	 	any other steps are taken to enforce any
Encumbrance over all or any part of the assets and/or undertaking of
the Borrower or of the Sponsor, or






	 	(j)	 	Winding Up:






	 	(i)	 	any meeting of the Borrower or of the
Sponsor or their creditors is convened for the purpose of considering
any resolution for its winding-up;




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	 	(ii)	 	the Borrower or of the Sponsor or their
creditors passes such a resolution;
	 
	 	(iii)	 	any person makes an application for the
winding-up of the Borrower or of the Sponsor and, if made by a
creditor on vexatious or frivolous grounds, the same is not
discharged or withdrawn within 20 (twenty) days; or
	 
	 	(iv)	 	an order for the winding-up of the Borrower
or of the Sponsor is made,






	 	 	 	not being a winding-up or dissolution of the Borrower or the Sponsor
involving an amalgamation or reorganisation on a solvent basis to which
the Majority Lenders have given their written consent;
	 
	 	(k)	 	Dissolution: any corporate, legal or administrative
proceedings are commenced with a view to the dissolution of the Borrower or of
the Sponsor not being a dissolution involving an amalgamation or
reorganisation on a solvent basis to which the Majority Lenders have given
their prior written consent;
	 
	 	(1)	 	Analogous Proceedings: there occurs, in relation to
the Borrower or of the Sponsor, in any country or territory in which any of
them carries on business or to the jurisdiction of whose courts they or any
part of their assets is subject, any event which, in the opinion of the Agent,
appears in that country or territory to correspond with, or have an effect
equivalent or similar to, any of those mentioned in clauses 11.1(f) to 11.1(l)
above (inclusive) or the Borrower or the Sponsors otherwise becomes subject,
in any such country or territory, to the operation of any law relating to
insolvency, bankruptcy or liquidation and such proceedings are not withdrawn
or discharged within 20 (twenty) days;





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	 	(m)	 	Cession of business: the Borrower or the Sponsor
suspends or ceases or threatens to suspend or cease to carry on its business;
	 
	 	(n)	 	Seizure: all or a material part of the undertakings,
assets, rights or revenues of, or shares or other ownership interests in, the
Borrower or the Sponsor are seized, nationalised, expropriated or compulsorily
acquired by or under the authority of any government;
	 
	 	(o)	 	Unlawfulness: it becomes unlawful at any time for the
Borrower or the Sponsor to perform all or any of their respective material
obligations under this Agreement or any of the Security Documents and the
parties to this Agreement are unable to agree on alternative arrangements
within 15 (fifteen) Banking Days of the Lenders becoming aware of such
illegality;
	 
	 	(p)	 	Repudiation: the Borrower or the Sponsor repudiates
this Agreement or any of the Security Documents or does or causes or permits
to be done any act or thing evidencing an intention to repudiate this
Agreement or any of the Security Documents;
	 
	 	(q)	 	Unenforceability: any of the Security Documents
ceases to be enforceable on the terms provided for therein against any of the
parties thereto for any reason;
	 
	 	(r)	 	Abandonment: the Project is abandoned or cancelled or
any other event occurs which, in the reasonable opinion of the Majority
Lenders indicates that the Project is unlikely to be completed (or if the
Property has been destroyed or materially damaged, reinstated and completed);
	 
	 	(s)	 	Destruction: after the Effective Agreement Date and
prior to the Repayment Date, the Property or the major Part of the Property is
destroyed or substantially damaged and the Borrower has not paid for and/or
provided the Majority Lenders with adequate undertakings to pay




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	 	 	 	for the repairs and/or rebuilding or replacement costs in respect of such
destruction and insurance will be insufficient to rebuild the Property
within a reasonable time and/or fully compensate the Lenders for any loss;






	 	(t)	 	Breach of Shareholders’ Agreement: any party to the
Shareholders’ Agreement fails to comply with any of its obligations under the
Shareholders’ Agreement and such failure would have a Material Adverse Effect
on the Shareholders’ Agreement or the Agreement, or the Shareholders’
Agreement is terminated or otherwise ceases to be in full force and effect for
any reason whatsoever,
	 
	 	(u)	 	Breach of Ownership Obligation: if any of the
conditions in the Ownership Obligation ceases to be true;
	 
	 	(v)	 	Material adverse change: there occurs, in the
reasonable opinion of the Majority Lenders, a material adverse change in the
financial condition of the Borrower which results in and/or is reasonably
likely to result in a breach of the Baseline Ratio Undertaking;
	 
	 	(w)	 	Material Events: any other event occurs or
circumstances arises which, in the reasonable opinion of the Majority Lenders,
is likely to have a Material Adverse Effect on the ability of the Borrower or
the Sponsor to perform all or any of their respective obligations under or
otherwise to comply with the terms of this Agreement or any of the Security
Documents;
	 
	 	(x)	 	Merger without assumption: The Sponsor (i)
consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and, at the time of such
consolidation, amalgamation, merger or transfer the resulting, surviving or
transferee entity fails to assume all the obligations of the Sponsor under
this Agreement or any guarantee and/or undertaking in respect of this




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	 	 	 	Agreement pursuant to an agreement reasonably satisfactory to the Majority
Lenders; or (ii) the creditworthiness of the resulting, surviving or
transferee entity is, in the reasonable opinion of the Majority Lenders,
materially weaker than that of the Sponsor immediately prior to such
action;






	 	(y)	 	Non-Sufficient Funding: at any time prior to the
Final Drawdown, the amount of the projected Water Services Income,
Commitments, Sponsor Subordinated Loan and Project Equity is less than the
Project Costs still to be expended as shown in the Base Case Model and the
Borrower fails within 90 (ninety) days to afford reasonable satisfaction to
the Majority Lenders that sufficient funding and equity will be available to
satisfy such Project Costs; or
	 
	 	(z)	 	Unfunded Costs: if any Unfunded Cost arises in excess
of R2,5 million (two comma five million) and the Borrower fails to notify the
Agent of the same, or fails to make a proposal to the Majority Lenders within
30 (thirty) days from date on which such Unfunded Cost arises, or fails to
make any such proposal that is acceptable to the Majority Lenders, or (having
made such a proposal which is accepted by the Majority Lenders) an amount
equal to such Unfunded Cost is not committed and paid to the Borrower within
60 (sixty) days (or such longer period as may be agreed between the Majority
Lenders and the Borrower) after the Borrower became aware or ought to have
been aware of the relevant Unfunded Cost.






	 	11.2	(i)	The Agent may and if so requested by the Majority Lenders shall, without
prejudice to any other rights of the Lenders, at any time after the happening of an
Event of Default so long as the same is continuing by written notice to the Borrower
declare that:




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	 	(a)	 	the obligation of each Lender to make its
Commitment available shall be terminated whereupon the Commitments
shall be reduced to zero forthwith; and/or
	 
	 	(b)	 	the Loan and all interest and commitment
commission accrued and all other sums payable under this Agreement
have become due and payable, whereupon the same shall, immediately or
in accordance with the terms of such notice, become due and payable;
and/or
	 
	 	(c)	 	in any event notify the Council of the said
Event of Default.






	 	(ii)	 	Notwithstanding clause 11.2 (i) above the Lenders and Agent
hereby confirm that they will not exercise the above remedies in the event of
an Event of Default if the only Event of Default of the Borrower hereunder
concerns a breach of its Ratio Undertakings unless at the time of such Event
of Default the following applies: (i) the Historical ADSCR is less than or
equal to 1:1 on both of the two most recent Ratio Test Dates; or (ii) the
Forecast ADSCR is less than or equal to 1:1 on both of the two most recent
Ratio Test Dates; or (iii) the Borrower has failed on three or more repayment
dates as provided for in clause 5 within the previous eighteen Months to pay
the full amount due under the Facilities.






	12	 	TRUSTEE UNDERTAKING AND INDEMNITIES






	 	12.1	 	Subject to clause 12.5 below, the Security Trustee irrevocably and
unconditionally undertakes to make to the Lenders a full, prompt and complete payment
of all of the Liabilities. As part of this Trustee Undertaking -






	 	12.1.1	 	the Security Trustee acknowledges that this Trustee Undertaking is given on
the basis that it constitutes a separate obligation enforceable against the
Security Trustee whether or not the applicable Liabilities are




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	 	 	 	enforceable against the Borrower when a claim is made under this
undertaking;






	 	12.1.2	 	the Security Trustee undertakes in favour of the Lenders and the Agent that
whenever it receives a demand for payment of any Liability under this Trustee
Undertaking from the Agent it will pay all amounts so claimed to the Agent on
the basis that, subject to 12.5 below, the Security Trustee is liable for all
those amounts as a primary obligation;
	 
	 	12.1.3	 	the Security Trustee undertakes to enforce the remedies available to it
under the Principal Indemnity and/or the Security Documents, and such other
remedies as may be available to it at law, promptly; and
	 
	 	12.1.4	 	the Security Trustee indemnifies the Lenders and the Agent against all
losses, claims, liabilities, damages, costs or expenses which may be suffered
by any of them in connection with any non-payment by the Security Trustee of a
Liability in accordance with the provisions of this clause 12.1.






	 	12.2	 	This Trustee Undertaking is a continuing security and shall remain in force
notwithstanding any fluctuation in or extinction for any period whatever of any of the
Liabilities or any intermediate payment in whole or in part of any of the Liabilities.
This Trustee Undertaking shall continue to apply to the remaining balance of the
Liabilities until the Liabilities have been extinguished in full.
	 
	 	12.3	 	Where any discharge (whether in respect of any amounts guaranteed by this
Trustee Undertaking, this Trustee Undertaking itself, any security to which the
Security Trustee is entitled in terms of this clause or otherwise) is made in whole or
in part or any arrangement is made on the basis of any payment or other disposition
which is made void or must be repaid on a winding-up of the Borrower or otherwise, the
liability of the Security Trustee under this Trustee Undertaking shall continue as if
there had been no such discharge or arrangement. The Agent shall be entitled to
concede or compromise any claim




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	 	 	 	that any such payment, security or other disposition is liable to be voided or
repaid.






	 	12.4	 	The Security Trustee waives any right that it may have to first require the
Lenders or the Agent to proceed against or claim payment from the Borrower or any
third party or enforce any guarantee or security granted by the Borrower or any third
party before claiming under this Trustee Undertaking.
	 
	 	12.5	 	The maximum amount recoverable from the Security Trustee under this Trustee
Undertaking shall be limited to the amount recovered by the Security Trustee pursuant
to enforcement by the Security Trustee of its rights under the Principle Indemnity
and/or the Security Documents and/or at law.
	 
	 	12.6	 	This Trustee Undertaking shall be in addition to any other undertakings,
guarantees or other securities or suretyships which the Lenders and/or the Agent may
obtain in relation to the Liabilities or any of them. The rights of the Lenders and/or
the Agent under this Trustee Undertaking are in addition to and not diminished or
otherwise affected by any other rights provided by law.
	 
	 	12.7	 	The Security Trustee renounces any benefits to which it may be entitled in
law as a result of this undertaking including, without limitation, the benefits of
division, cession of action, provision of accounts and no value received. The Security
Trustee acknowledges that it is fully aware of the meaning and effect of those
benefits.
	 
	 	12.8	 	The Security Trustee shall promptly furnish to the Agent any information
which comes into its possession or control in its capacity as Security Trustee that
the Agent requests.
	 
	 	12.9	 	The Security Trustee authorises the Agent -






	 	12.9.1	 	to set off any amount owing by the Security Trustee under the Trustee
Undertaking against any amount owing to the Security Trustee by the Lenders or
the Agent (whether or not then due);




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	 	12.9.2	 	to retain or withhold payment of any amount due by the Lenders or the Agent
to the Security Trustee in or towards payment of all or any part of the
Liabilities.






	 	12.10	 	Subject to clause 16.13, the Borrower shall and hereby does indemnify the
Security Trustee against any claim, loss, liability, costs, expenses or damages,
including legal costs as between attorney and own client, which it may suffer or incur
by reason of, or arising out of or in the enforcement of the Trustee Undertaking, save
where the same arises due to the negligent act and/or omission of the Lenders and/or
the Agent or due to the gross negligence or wilful misconduct of the Security Trustee
and the indemnity given by the Borrower in this clause 12.10 shall be the “Principal
Indemnity”.
	 
	 	12.11	 	The Borrower undertakes to pay the Security Trustee on first demand in
writing, unconditionally and without objection or qualification, any amount which the
Security Trustee may be called upon to pay hereunder, subject to the following :






	 	12.11.1	 	such amount has been demanded from the Borrower under this Facility
Agreement by the Agent;
	 
	 	12.11.2	 	such amount has been demanded from the Security Trustee under the Trustee
Undertaking as a consequence of the failure by the Borrower to make timeous
payment of the relevant amount under this Facility Agreement; and
	 
	 	12.11.3	 	the Borrower has received copies of the claim made by the Agent on behalf
of the Lenders under the Trustee Undertaking.






	 	12.12	 	Any payment made by the Borrower under its Principal Indemnity shall
discharge its liability in like amount for the underlying obligations under this
Facility Agreement to which that payment relates.





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	 	12.13	 	The obligation of the Borrower and liability under the Principal Indemnity
shall continue and remain in full force and effect as a continuing security and
indemnity until such time as -






	 	12.111	 	the Security Trustee is entirely and finally released and discharged from
its obligations under the Trustee Undertaking;
	 
	 	12.13.2	 	the Borrower has discharged all of its obligations under this Principal
Indemnity,






	 	 	 	and the Borrower shall not be entitled to withdraw from or terminate this Principal
Indemnity until the Security Trustee has been finally released and discharged and
the Trustee Undertaking has been cancelled.
	 
	 	12.14	 	As security for its obligations under its Principal Indemnity, the Borrower
shall provide the following security to the Security Trustee -






	 	12.14.1	 	a general notarial bond covering all of the Borrower’s movable assets both
corporeal and incorporeal, in the Agreed Form;
	 
	 	12.14.2	 	when from time to time so required by the Security Trustee, a special
notarial bond (as a collateral bond), in the form set out in part II of
schedule 13, over the specific corporeal movable assets of the Borrower
specified by the Lenders or the Agent and any amendment of such special
notarial bond to supplement the corporeal movable assets hypothecated under
it;
	 
	 	12.14.3	 	a cession in securitatem debiti of the Borrower’s rights and interests
under the Project Documents (other than its Memorandum and Articles of
Association), in the Agreed Form; and
	 
	 	12.14.4	 	any further security reflected in further Security Documents entered into
at any time by or on behalf of the Borrower as security for the payment




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	 	 	 	and discharge of the Secured Obligations, in each case in the Agreed Form.






	 	 	 	The security contemplated in this clause, other than that in clause 12.14.2 (which
will be executed and registered as provided for in that clause) and in clause
12.14.4 (which shall be executed and, if applicable, registered as and when agreed
by the Borrower and the Agent), shall be executed together with execution of this
Agreement and where applicable, registered forthwith thereafter.
	 
	 	12.15	 	In addition, the Borrower undertakes to -






	 	12.15.1	 	execute and give effect to the Golden Share Agreement; and
	 
	 	12.15.2	 	to procure the execution of a Pledge of Shares and Cession of Claims
Agreement and a Guarantee Agreement from each Shareholder in the Agreed Form,
which the Shareholders shall give in favour of the Security Trustee in respect
of all the ordinary issued shares in the Borrower held by the Shareholders as
at the date of this Agreement and any other ordinary issued shares in the
Borrower acquired by the Shareholders from time to time and the Borrower
undertakes to do everything within its power to give effect to each Pledge of
Shares and Cession of Claims Agreement and each Guarantee Agreement in the
Agreed Form; provided that in respect of the pledge and cession of shares by
Sivukile, the Borrower shall only be obliged to procure from Sivukile a pledge
and cession of ordinary issued shares in the Borrower owned or from time to
time acquired by Sivukile in excess of 10,0% (ten comma nought per cent) of
the ordinary issued share capital in the Borrower.






	 	12.16	 	The rights of the Lenders and the Agent under this clause may be exercised
as often as necessary, are cumulative and are not exclusive of any rights under law.




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	 	12.17	 	The liability of the Security Trustee under the Trustee Undertaking and the
liability of the Borrower under the Principal Indemnity, shall not be prejudiced,
affected or diminished by :






	 	12.17.1	 	any amendment or variation to any of the terms of this Facility Agreement
or any Project Document;
	 
	 	12.17.2	 	any indulgence which any Lender or the Agent may grant to the Borrower. No
such indulgence shall constitute a waiver of any of the rights of the Lenders
or the Agent and they shall not be precluded by such indulgence from
exercising any rights against the Borrower which may have arisen in the past
or which may arise in the future;
	 
	 	12.17.3	 	the taking, variation, compromise, renewal, release or failure to perfect
or enforce any rights or remedies or securities against the Borrower or any
other person, by the Lenders or the Agent;
	 
	 	12.17.4	 	the winding-up or any change in the name or constitution of the Borrower or
any other person.






	 	12.18	 	Neither the Agent nor the Security Trustee shall be obliged to enquire into
or satisfy itself of the powers or authority of the Borrower or its officers or agents
in connection with this Agreement or any of the Liabilities and anything done in the
exercise of any such powers or authorities by any person providing reasonable evidence
that such person is representing the Borrower shall give rise to a Liability binding
on the Borrower.
	 
	 	12.19	 	A certificate signed by any manager of the Agent (whose appointment and
authority it shall not be necessary to prove) setting forth the amount of any
Liability and setting out in reasonable detail the basis of calculation thereof, shall
in the absence of manifest error be prima facie evidence of the amount of that
Liability.




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	 	12.20	 	The Borrower indemnifies each Lender, the Agent and the Security Trustee
without prejudice to any of their other rights under this Agreement and/or the Security Documents, against any loss or expense which such Lender, the Agent or the
Security Trustee shall reasonably certify as sustained or incurred by it as a
consequence of (a) any default in payment by the Borrower of any sum under this
Agreement or the Security Documents when due, (b) the occurrence of any Event of
Default, (c) any prepayment of the Loan or part thereof being made under clause
13.1, 13.2 or 13.3 otherwise than on an Interest Payment Date relating to the part
of the Loan prepaid or (d) any Advance not being made for any reason (excluding any
default by the Agent, Security Trustee or any Lender) after a Drawdown Notice has
been given, including, in any such case, but not limited to, any loss or expense
sustained or incurred in maintaining or funding its Contribution or any part
thereof or in liquidating or re-employing deposits from third parties acquired to
effect or maintain its Contribution or any part thereof. 






	13	 	UNLAWFULNESS, INCREASED COSTS, ALTERNATIVE INTEREST RATES






	 	13.1	 	If any law, directive, regulation or regulatory requirement or any judgment,
order or direction of any court, tribunal or authority binding upon a Lender which
comes into effect after the date of this Agreement (whether or not in force before the
date of this Agreement) renders it unlawful or contrary to any directive or regulation
for such Lender to contribute to the Loan or to maintain or fund its Contribution,
such Lender shall promptly inform the Agent whereupon the Agent shall forthwith notify
the Borrower and the Security Trustee. If it shall so be unlawful or contrary to any
directive or regulation for such Lender to contribute to the Loan its Commitment shall
be reduced to zero. If it shall so be unlawful or contrary to any directive or
regulation for such Lender to maintain or fund its Contribution the Agent shall, at
the request and on behalf of such Lender, give notice to the Borrower requiring the
Borrower to prepay the Contribution of such Lender either (a) forthwith or (b) on a
future specified date not being earlier than the latest date permitted by such law,
directive, regulation, regulatory






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	 	 	 	requirement, judgment, order or direction and the Borrower shall prepay such
Lender’s contribution in accordance with and subject to the terms of such notice
and the provisions of clauses 13.4 and 13.5.
	 
	 	 	 	Without prejudice to the reduction of such Lender’s Commitment to zero or the
obligation of the Borrower to make such prepayment, the Borrower, the Agent and
such Lender shall negotiate for a period not exceeding 30 days with a view to such
Lender making available its Commitment and/or maintaining its Contribution in whole
or part in a manner which is not unlawful or contrary to any directive or
regulation.
	 
	 	13.2	 	If the result of any change in, or the introduction of, any law, regulation
or regulatory requirement or any change in the interpretation or application thereof
or compliance by any Lender with any direction, request or requirement (whether or not
having the force of law) of any central bank, monetary, regulatory or other authority
(including, in each case, without limitation, those relating to Taxation, capital
adequacy, liquidity, reserve assets and special deposits) is to :






	 	(a)	 	subject any Lender to Taxes or change the basis of Taxation
of any Lender with respect to any payment under this Agreement (other than
Taxes or Taxation on the overall net income or profits of such Lender imposed
in the jurisdiction in which its principal or lending office under this
Agreement is located); and/or
	 
	 	(b)	 	increase the cost to, or impose an additional cost on, any
Lender in making or keeping its Commitment available or maintaining or funding
its Contribution; and/or
	 
	 	(c)	 	reduce the amount payable or the effective return to any
Lender under this Agreement; and/or




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	 	(d)	 	reduce any Lender’s rate of return on its overall capital by
reason of a change in the manner in which it is required to allocate capital
resources to its obligations under this Agreement; and/or
	 
	 	(e)	 	require any Lender to make a payment or forgo a return on or
calculated by reference to any amount received or receivable by it under this
Agreement, then and in each such case but provided the aforementioned
sub-paragraphs (a) to (e) above do not arise as a result of any negligent
action or inaction of the Majority Lenders and reasonable action carried out
by the Majority Lenders would not, in the reasonable opinion of the Majority
Lenders, cause and/or enable all or any of the effects in sub-paragraphs (a)
to (e) above to be averted:






	 	(i)	 	such Lender shall notify the Borrower
through the Agent in writing of such event promptly upon such Lender
becoming aware of the same; and






	 	(ii)	 	the Borrower shall, on reasonable demand,
pay to the Agent for the account of such Lender on the relevant
Interest Payment Date the amount which such Lender specifies
including, without limitation, any historical costs (in a certificate
setting forth the basis of the computation and Interest Payment Date
of such amount but not including any matters which such Lender
regards as confidential in relation to its funding arrangements) is
required to compensate such Lender for such increased cost,
reduction, payment or forgone return; and






	 	(iii)	 	the Borrower may, at any time after
receipt of such demand and certificate, notify the Agent that it will
prepay all (but not part only) of such Lender’s Contribution
whereupon the Borrower shall prepay to the Agent for the account of
such Lender such




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	 	 	 	Lender’s Contribution in accordance with and subject to the
provisions of clauses 13.4 and 13.5.






	 	 	 	For the purpose of this clause 13.2 each Lender shall in good faith
allocate or spread costs and/or losses among its assets and liabilities
(or any class thereof) on such basis as it considers appropriate.
	 
	 	 	 	Nothing in this clause 13.2 shall entitle any Lender to compensation for
any such increased cost, reduction, payment or forgone to the extent that
the same is the subject of an additional payment under clause 7.3 to the
extent that the same arises solely by reason of such Lender ceasing to be
an authorised dealer, otherwise than as a consequence of any change in law
(which term shall include a change in the terms of any relevant double
taxation treaty) or its application or interpretation.
	 
	 	 	 	Notwithstanding the above provisions of this clause 13.2, the Borrower
shall not be obliged to compensate any Lender in respect of any such
increased cost, reduction, payment or forgone return which arises as a
consequence of any law or directive implementing the proposals for
international convergence of capital measurement and capital standards
published by the Basle Committee on Banking Regulations and Supervisory
Practices in July 1988 to the extent that the impact of such law or
directive can reasonably be calculated or envisaged at the date of this
Agreement.






	 	13.3	(a) 	 If and whenever, at any time prior to the commencement of any Interest
Period :






	 	(i)	 	the Agent shall have determined, after
consultation with the Reference Bank (which determination subject to
applicable law shall, in the absence of manifest error, be
conclusive), that adequate and fair means do not exist for
ascertaining JIBAR or the Reference Rate during such Interest
Period;




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	 	(ii)	 	no Reference Bank supplies the Agent with a
quotation for the purpose of calculating JIBAR or the Reference Rate;
or






	 	(iii)	 	the Agent shall have received notification
from Lenders that deposits in Rand are not available to such Lenders
in the Johannesburg Interbank Market in the ordinary course of
business in sufficient amounts to fund their Contributions for such
Interest Period or that the quotations for JIBAR or the Reference
Rate supplied by the Reference Bank do not accurately reflect the
cost to such Lenders of obtaining such deposits,






	 	 	 	the Agent shall forthwith give notice (a “Determination Notice”) thereof
to the Borrower and to each of the Lenders. A Determination Notice shall
contain particulars of the relevant circumstances giving rise to its
issue. After the giving of any Determination Notice the undrawn amount of
the Commitments of all the Lenders shall not be borrowed until notice to
the contrary is given to the Borrower by the Agent.
	 
	 	(b)	 	Subject to clause 13.3(d) below, during the period of 10
(ten) days after any Determination Notice has been given by the Agent under
clause 13.3(a), the Lenders shall certify (having consulted with the Borrower)
an alternative basis (the “Substitute Basis”) for the continuation of the
Loan. The Substitute Basis may (subject to the consent of the Borrower, which
consent shall not be unreasonably withheld and/or delayed) include (without
limitation) alternative interest periods, alternative currencies or
alternative rates of interest but shall include a margin above the cost of
funds to each of the Lenders equivalent to the Margin. The Substitute Basis
shall, subject to the consent of the Borrower, such consent not to be
unreasonably withheld and/or delayed, be binding upon the Borrower and shall
take effect in accordance with its terms from the date specified in the
Determination Notice.




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	 	(c)	 	During the period when a Substitute Basis is in force the
Agent and the Borrower shall consult not less frequently than once every 30
(thirty) days with a view to reverting to the other provisions of this
Agreement as soon as practicable.






	 	(d)	 	If the Borrower determines that it does not wish to continue
to borrow the Loan or the part thereof to which a Substitute Basis applies it
shall so notify the Agent within 10 (ten) days of receipt of the certificate
specifying such Substitute Basis, whereupon the Borrower shall forthwith
prepay the Contribution of each Lender in accordance with and subject to the
provisions of clauses 13.4 and 13.5 together with accrued interest to the date
of prepayment, calculated from the date specified in the Determination Notice
at a rate per annum equal to the rate certified by such Lender to be an
interest rate equivalent to the aggregate of (i) the Margin and (ii) the cost
to such Lender of funding its Contribution or the relevant part thereof during
the period commencing on the date specified in the Determination Notice and
ending on the date of prepayment.






	 	13.4	 	When the Contribution of any Lender is prepaid by the Borrower pursuant to
this clause 13 the Commitment of such Lender shall be reduced to zero, the amount of
each repayment instalment, if any, of the Loan falling due after such prepayment shall
be rateably reduced and the Borrower shall, at the time of such prepayment, pay to the
Agent for the account of such Lender accrued interest thereon to the date of actual
payment, any additional amount payable under clause 13.2 and all other sums payable by
the Borrower to such Lender pursuant to this Agreement, including, without limitation,
any amounts payable under clause 12.






	 	13.5	 	When the Commitment of any Lender is reduced to zero pursuant to this clause
13, the undrawn amount of the total of the Commitments of all the Lenders shall be
reduced by the undrawn amount of such Lender’s Commitment and the Borrower shall pay
to the Agent for the account of such Lender within 30 days of




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	 	 	 	such date accrued commitment commission on the principal amount the subject of such
reduction calculated to the date upon which such Lender’s Commitment was so reduced
to zero.






	14	 	SET-OFF AND PRO RATA PAYMENTS






	 	14.1	 	Subject to the terms of clause 9.3, and provided the below referred to Sum
Due is not in the Income Account and available to the Lenders at the time such Sum Due
is due, the Borrower authorises the Agent and each Lender to apply any credit balance
to which the Borrower is then entitled on any Project Account in or towards
satisfaction of any sum then due and payable (the “Sum Due”) from the Borrower to, in
the case of the Agent, the Agent and/or the Lenders and, in the case of such Lender,
such Lender under this Agreement. For this purpose the Agent and each Lender is
authorised to purchase with the moneys standing to the credit of such account such
other currencies as may be necessary to effect such application. Neither the Agent nor
any Lender shall be obliged to exercise any right given to it by this clause 14.1. The
Agent shall notify each Lender and the Borrower and each Lender shall notify the Agent
and the Borrower forthwith upon the exercise or purported exercise of any right of
set-off giving full details in relation thereto and the Agent shall inform the other
Lenders.






	 	14.2	 	If at any time the proportion which any Lender (the “Recovering Lender”) has
received or recovered (otherwise than from an Assignee, a Substitute or a
sub-participant in such Contribution of the Lender) in respect of its share of any
payment to be made for the account of the Recovering Lender and one or more other
Lenders under this Agreement is greater (the amount of the excess being referred to in
this clause 14.2 as the “excess amount”) than the proportion of the share of such
payment received or recovered by the Lender receiving or recovering the smallest or no
proportion of its share, then :




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	 	(a)	 	within two Banking Days of such receipt of recovery, the
Recovering Lender shall pay to the Agent an amount equal (or equivalent) to
the excess amount;






	 	(b)	 	the Agent shall treat such payment as if it were part of the
payment to be made by the Borrower and shall distribute the same in accordance
with the last sentence of clause 7.1; and






	 	(c)	 	as between the Borrower and the Recovering Lender the excess
amount shall be treated as not having been paid.






	 	 	 	Each Lender shall forthwith notify the Agent of any such receipt or recovery by
such Lender other than by payment through the Agent. If any excess amount
subsequently has to be wholly or partly refunded by the Recovering Lender which
paid an amount equal thereto to the Agent under (a) above each Lender to which any
part of such amount was distributed shall on request from the Recovering Lender
repay to the Recovering Lender such Lender’s pro rata share of the amount which has
to be refunded by the Recovering Lender. Each Lender shall on request supply to the
Agent such information as the Agent may from time to time request for the purpose
of this clause 14.2. Notwithstanding the foregoing provisions of this clause 14.2
no Recovering Lender shall be obliged to share any excess amount which it receives
or recovers pursuant to legal proceedings taken by it to recover any sums owing to
it under this Agreement with any other party which has a legal right to, but does
not, either join in such proceedings or commence and diligently pursue separate
proceedings to enforce its rights in the same or another court (unless the
proceedings instituted by the Recovering Lender are instituted by it without prior
notice having been given to such party through the Agent).






	 	14.3	 	For the avoidance of doubt it is hereby declared that failure by any
Recovering Lender to comply with the provisions of clause 14.2 shall not release any
other Recovering Lender from any of its obligations or liabilities under clause 14.2.




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	 	14.4	 	The provisions of this clause 14 shall not and shall not be construed so as
to, constitute a security interest by a Lender over all or any part of a sum received
or recovered by it in the circumstances mentioned in clause 14.2.






	15	 	ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES






	 	15.1	 	This Agreement shall be binding upon and enure for the benefit of, the
Lenders, the Agent, the Security Trustee and the Borrower and their respective
successors.






	 	15.2	 	The Borrower may not assign or transfer any of its rights or obligations
under this Agreement.






	 	15.3	 	Each Lender may cede all of its rights to receive repayments whether of
interest or principle under the Loan in respect of its Contribution to any other bank
or financial institution (an “Assignee”) without the consent of any party provided as
a result of such cession, such Assignee does not become a Lender hereunder and the
Agent informs the Borrower of such cession.






	 	15.4	 	Subject to the consent of the Borrower which consent shall not be
unreasonably withheld and/or delayed, each Lender may assign and transfer, all or any
part of its Commitment with all attendant rights, benefits and/or obligations under
this Agreement to another person (a “Substitute”). Any such assignment and transfer
shall be effected upon 5 Banking Days prior notice by delivery to the Agent of a duly
completed Substitution Certificate duly executed by such Lender, the Substitute, the
Borrower and the Agent (for itself, the Security Trustee and the other Lenders). On
the Effective Substitution Date specified in a Substitution Certificate so executed
and delivered, to the extent that they are expressed in such Substitution Certificate
to be the subject of the assignment and transfer effected pursuant to this clause 15.4
:






	 	(a)	 	the existing parties to this Agreement and the Lender party
to the relevant Substitution Certificate shall be released from their
respective obligations towards one another under this Agreement (“discharged




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	 	 	 	obligations”) and their respective rights against one another under this
Agreement (“discharged rights”) shall be cancelled;






	 	(b)	 	the Substitute party to the relevant Substitution Certificate
and the existing parties to this Agreement (other than the Lender party to
such Substitution Certificate) shall assume obligations towards each other
which differ from the discharged obligations only insofar as they are owed to
or assumed by such Substitute instead of to or by such Lender; and






	 	(c)	 	the Substitute party to the relevant Substitution Certificate
and the existing parties to this Agreement (other than the Lender party to
such Substitution Certificate) shall acquire rights against each other which
differ from the discharged rights only insofar as they are exercisable by or
against such Substitute instead of by or against such Lender,






	 	 	 	and, on the date upon which such assignment and transfer takes effect, the
Substitute shall pay to the Agent for its own account a reasonable fee determined
by the Agent. The Agent shall promptly notify the other parties hereto of the
receipt by it of any Substitution Certificate and shall promptly deliver a copy of
such Substitution Certificate to the Borrower and the Security Trustee.






	 	15.5	 	The Agent, the Security Trustee and the Borrower shall be fully entitled to
rely on any Substitution Certificate delivered to the Agent in accordance with the
foregoing provisions of this clause 15 which is complete and regular on its face as
regards its contents and purportedly signed on behalf of the relevant Lender and the
Substitute and neither the Agent, the Security Trustee or the Borrower shall have any
liability or responsibility to any party as a consequence of placing reliance on and
acting in accordance with any such Substitute Certificate if it proves to be the case
that the same was not authentic or duly authorised.






	 	15.6	 	The Borrower, the Security Trustee and each Lender irrevocably authorises the
Agent to counter-sign each Substitution Certificate on its behalf without any




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	 	 	 	further consent of, or consultation with, the Borrower, the Security Trustee or
such Lender except, in the case of the Borrower, the consent required pursuant to
clause 15.4.






	 	15.7	 	If any Lender cedes all or any part of its rights or assigns or transfers all
or any part of its rights, benefits and obligations as provided for in clause 15.3 or
15.4, all relevant references in this Agreement to such Lender shall thereafter be
construed as a reference to such Lender and/or its Assignee or Substitute (as the case
may be) to the extent of their respective interests.






	 	15.8	 	Each Lender shall lend through its office at the address specified in
schedule I or, as the case may be, in any relevant Substitution Certificate or through
any other office of such Lender selected from time to time by such Lender through
which such Lender wishes to lend for the purposes of this Agreement. If the office
through which a Lender is lending is changed pursuant to this clause 15.8, such Lender
shall notify the Agent promptly of such change and the Agent shall likewise so notify
the Security Trustee.






	 	15.9	 	Subject to clause 18.7 below, any Lender may disclose to a prospective
Assignee or Substitute or to any other person who may propose entering into
contractual relations with such Lender in relation to this Agreement such information
about the Borrower as such Lender shall consider appropriate.






	16	 	AGENT, SECURITY TRUSTEE AND REFERENCE BANK






	 	16.1	 	Each Lender irrevocably appoints the Agent as its agent for the purposes of
this Agreement and authorises the Agent to act solely on the instructions of the
Majority Lenders and take such action on such Lender’s behalf and to exercise such
rights, remedies, powers and discretions as are specifically delegated to the Agent by
this Agreement together with such powers and discretions as are reasonably incidental
thereto. Neither the Agent nor the Security Trustee shall have any duties, obligations
or liabilities to the Lenders beyond those expressly stated in this Agreement and the
Security Documents to which they are a party.




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	 	16.2	(a)	 	Subject to clause 16.2(b), the Agent may, with the written consent of the
Majority Lenders (or if and to the extent expressly authorised by the other provisions
of this Agreement), amend, modify or otherwise vary or waive breaches of, or defaults
under, or otherwise excuse performance of, any provision of this Agreement. Any such
action so authorised and effected by the Agent shall be promptly notified to the
Lenders by the Agent and shall be binding on all the Lenders.






	 	(b)	 	Except with the prior written consent of all the Lenders (and
of the Security Trustee in respect of item (vi)), the Agent shall not have
authority on behalf of the Lenders to agree with the Borrower any amendment to
this Agreement or (without limitation) carry out any action which would (i)
reduce the Margin, (ii) extend the due date or reduce the amount of any
payment of principal, interest or other amount payable under this Agreement,
(iii) change the currency in which any amount is payable under this Agreement,
(iv) increase the Commitment of any Lender, (v) extend the Drawdown Period,
(vi) change the definition of “Majority Lenders” in clause 1.2 (vi) do any
thing or cause any thing to be done which may adversely affect the rights of
the Lenders and/or the Security Trustee under the Security Documents; (vii)
change this clause 16.2.






	 	16.3	 	With respect to its own Commitment and Contribution (if any) the Agent shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not performing the duties and functions delegated
to it under this Agreement and the term “Lenders” shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity as a Lender. This
Agreement shall not and shall not be construed so as to constitute a partnership
between the parties or any of them.




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	 	16.4	 	Neither the Agent nor the Security Trustee shall:






	 	(a)	 	be obliged to request any confirmation, certificate, opinion,
information or valuation under clause 9 to verify that any costs to be
financed by a Drawdown of an Advance are Eligible Costs or to make any enquiry
as to the use of the proceeds of the Loan unless so required in writing by any
Lender, in which case the Agent shall promptly make the appropriate request of
the Borrower, or be obliged to make any enquiry as to any default by the
Borrower or the Sponsor in the performance or observance of any of the
provisions of this Agreement or as to the existence of an Event of Default,
unless the Agent or the Security Trustee has actual knowledge thereof or has
been notified in writing thereof by a Lender, in which case the Agent or the
Security Trustee shall promptly notify the Lenders of the relevant event or
circumstance; or






	 	(b)	 	be liable to any Lender for any action taken or omitted under
or in connection with this Agreement, the Security Documents or the Loan
unless caused by their or its gross negligence or wilful misconduct.






	 	 	 	For the purposes of this clause 16 the Agent and the Security Trustee shall not be
treated as having actual knowledge of any matter of which the corporate finance or
any other division outside the corporate lending or loan administration departments
of the person for the time being acting as the Agent, or the Security Trustee may
become aware in the context of corporate finance or advisory activities from time
to time undertaken by the Agent, or the Security Agent for the Borrower or the
Sponsor or any of their respective Subsidiaries or associated or Affiliated
Companies.
	 
	 	16.5	 	The Agent and/or the Security Trustee shall:






	 	(a)	 	promptly notify each Lender of the contents of each notice,
certificate or other document received by the Agent or the Security Trustee
from the




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	 	 	 	Borrower under or pursuant to this Agreement, the Security Documents
and/or the Project Documents;






	 	(b)	 	(subject to its being indemnified by the Lenders to its
satisfaction) take such action or, as the case may be, refrain from taking
such action with respect to any Event of Default of which the Agent or the
Security Trustee has actual knowledge as the Majority Lenders may reasonably
direct; and






	 	(c)	 	upon receipt of any Drawdown Notice the Agent shall promptly
notify and provide the Lenders with a certified copy of the same.






	 	16.6	 	The Agent and the Security Trustee may deem and treat (a) each Lender as the
person entitled to the benefit of the Contribution of such Lender for all purposes of
this Agreement and the Security Documents unless and until a notice of assignment of
such Lender’s Contribution or an part thereof or a duly completed and executed
Substitution Certificate shall have been filed with the Security Trustee and (b) the
office set opposite the name of each Lender in schedule I or, as the case may be, in
any relevant Substitution Certificate as such Lender’s office for the purposes of the
Facility unless and until a written notice of change of office shall have been
received by the Security Trustee; and the Agent and/or Security Trustee may act upon
any such notice unless and until the same is superseded by a further such notice.






	 	16.7	 	The Lenders shall provide the Agent and the Security Trustee with such
written information as they may reasonably require for the purpose of carrying out
their respective duties and obligations under this Agreement.






	 	16.8	 	Each Lender acknowledges that it has not relied on any statement, opinion,
forecast or other representation made by the Agent or the Security Trustee to induce
it to enter into this Agreement and that it has made and will continue to make,
without reliance on the Agent or the Security Trustee and based on such documents as
it considers appropriate, its own appraisal of the creditworthiness




- 106 -









 






	 	 	 	of the Borrower and of the Sponsors and its own independent investigation of the
financial conditions and affairs of the Borrower and of the Sponsor in connection
with the making and continuation of the Loan under this Agreement.
	 
	 	 	 	Neither the Agent nor the Security Trustee shall have any duty or responsibility,
either initially or on a continuing basis:






	 	(a)	 	to provide any Lender with any credit or other information
with respect to the Borrower or of the Sponsor whether coming into their or
its possession before the making of any Advance or at any time or times
thereafter, other than as provided in clause I6.5(a); or






	 	(b)	 	to ascertain whether all deeds and documents which should
have been deposited with the Security Trustee under or pursuant to the
Security Documents have been so deposited with it, nor to make any enquiry
into the title of the Borrower to the Secured Assets or any part thereof.






	 	16.9	 	Neither the Agent nor the Security Trustee shall have any responsibility to
any Lender (a) on account of the failure of the Borrower or of the Sponsor to perform
their respective obligations under this Agreement and/or the Security Documents or any
of them or (b) for the financial condition of the Borrower or the Sponsor or (c) for
the completeness or accuracy of any statements, representations or warranties in this
Agreement or the Security Documents or any of them or any document delivered under
this Agreement or the Security Documents or (d) for the execution, effectiveness,
adequacy, genuineness, validity, enforceability or admissibility in evidence of this
Agreement or the Security Documents or any of them or of any certificate, report or
other document executed or delivered under this Agreement or the Security Documents or
any of them or (e) to investigate or make any enquiry into the title of the Borrower
to the Secured Assets or any part thereof or (f) to ascertain whether all deeds and
documents which should have been deposited with it or under or pursuant to this
Agreement or the Security Documents or any of them have been




- 107 -









 






	 	 	 	so deposited or (g) for the failure to register the Security Documents or any of
them at the relevant Deeds Registry or elsewhere or (h) for the failure to register
the Security Documents or any of them in accordance with the provisions of the
documents of title of the Borrower to any of the Secured Assets of (i) of the
failure to effect or procure the registration of any floating charge created by the
Security Documents or any of them under any relevant legislation against any land
for the time being forming being part of the Secured Assets of (j) for the failure
to take or require the Borrower to take any steps to render the Security Documents
or any of them effective as regards Secured Assets outside South Africa or to
secure the creating of any ancillary charge under the laws of the jurisdiction
concerned or (k) otherwise in connection with the Loan or its negotiation or for
acting (or, as the case may be, refraining from acting) in accordance with the
instructions of the Lenders. The Agent and the Security Trustee shall be entitled
to rely on any communication, instrument or document believed by them to be genuine
and correct and to have been signed or sent by the proper person and shall be
entitled to rely as to legal or other professional matters on opinions and
statements of any legal or other professional advisers selected or approved by them
and in particular, but without limitation, to rely on the opinion, advice and
statements of the Lenders’ Technical Adviser as to any matter relevant to the
Project or the Property.






	 	16.10	 	The Agent may, without any liability to account to the Lenders, accept
deposits from, lend money to and generally engage in any kind of banking or trust
business with, the Borrower, the Sponsor or any of their respective Subsidiaries or
associated companies or any of the Lenders as if it were not an Agent.






	 	16.11	 	The Security Trustee shall be entitled to place all deeds, certificates and
other documents relating to the Secured Assets deposited with it under or pursuant to
the Security Documents or any of them in any safe deposit, safe or receptacle selected
by the Security Trustee or with any Advocate, Notary, Attorney, solicitor, lawyer or
firm and may make any such reasonable arrangements for allowing the Borrower access
to, or its lawyers or auditors possession of, such




- 108 -









 






	 	 	 	documents when necessary or convenient and the Security Trustee shall not be
responsible for any loss incurred in connection with any such deposit, access or
possession except in the case of gross negligence or wilful misconduct.






	 	16.12	 	Each Lender shall reimburse the Security Trustee and Agent (rateably in
accordance with its Commitment or Contribution), to the extent the Agent or Security
Trustee are not reimbursed by the Borrower, for the charges and expenses incurred by
the Agent or the Security Trustee (as the case may be) in connection with the
negotiation, preparation, syndication and execution of this Agreement and the Security
Documents and the preparation and distribution of the Information Memorandum and
advertising in connection with this Agreement, the enforcement of, or the preservation
of any rights under, or in carrying out its duties under, this Agreement and the
Security Documents including (in each case) the fees and expenses of legal or other
professional advisers including, without limitation, the Lenders’ Advisers. Each
Lender shall indemnify the Agent and the Security Trustee (rateably in accordance with
its Commitment or Contribution) against all liabilities, damages, costs and claims
whatsoever incurred by the Agent or the Security Trustee in connection with this
Agreement and/or the Security Documents or the performance of their duties under this
Agreement and/or the Security Documents or any action taken or omitted by the Agent or
the Security Trustee under this Agreement and/or the Security Documents, unless such
liabilities, damages, costs or claims arise from the gross negligence or wilful
misconduct of the Agent or the Security Trustee (as the case may be).






	 	16.13	 	Nothing in this Agreement shall in any case where the Agent or the Security
Trustee has failed to show the degree of care and diligence which would have been
required of it had it acted as trustee (in the Agent’s case) or is required of it (in
the Security Trustee’s) having regard to the provisions of this Agreement and/or the
Security Documents or any of them exempt the Agent and/or the Security Trustee from or
indemnify it against any liability for breach of trust or any liability which by
virtue of any rule of law would otherwise attach to it in




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	 	 	 	respect of any negligence, default, breach of duty or breach of trust of which it
may be guilty in relation to its duties under this Agreement and/or the Security
Documents or any of them.






	 	16.14	(a)	Subject to completion of a form by the successor Agent and/or Security
Trustee (as the case may be) in or substantially in the form of either respectively
part 1B or part 2 of schedule 12 hereto (with a copy thereof, provided to each of the
Lenders and the Borrower), each of the Agent or the Security Trustee may, on 60
(sixty) days written notice, be removed by the Majority Lenders or may retire from its
appointment as Agent or Security Trustee under this Agreement and/or the Security
Documents having given to the Borrower and each of the Lenders not less than 30
(thirty) banking days notice of its intention to do so, provided that no such
retirement shall take effect unless there has been appointed by the Lenders as a
successor as Agent or as Security Trustee for the purpose of this Agreement:






	 	(i)	 	a Lender nominated by the Majority Lenders
or, failing such a nomination;






	 	(ii)	 	any reputable and experienced bank or
financial institution with offices in Johannesburg nominated by the
Lenders in consultation with the Borrower.






	 	(b)	 	Upon any such successor as aforesaid being appointed and
subject to appropriate arrangements having been made in relation to the
Security Documents to the satisfaction of the Lenders (in the event of a
removed or retiring Security Trustee), the removed or retiring Agent or the
removed or retiring Security Trustee (as the case may be) shall save for any
undischarged obligation which may have arisen prior to such removal or
retiring be discharged from any further obligation under this Agreement and/or
the Security Documents and its successor and each of




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	 	 	 	the parties to this Agreement and the Security documents shall have the
same rights and obligations among themselves as they would have had if
such successor had been a party to this Agreement in place of the retiring
Agent or Security Trustee.






	 	16.15	 	If (a) the whole of the Contribution (if any) of any Reference Bank which is
a Lender is prepaid, (b) the whole Commitment (if any) of any Reference Bank is
reduced to zero in accordance with clause 13 or (c) a Reference Bank cedes, transfers,
novates and/or assigns the whole of its rights and obligations (if any) as a Lender
under this Agreement, the Agent may, acting on the instructions of the Majority
Lenders, terminate the appointment of such Reference Bank and appoint another Lender
to replace such Reference Bank.






	17	 	ENFORCEMENT AND APPROPRIATIONS






	 	17.1	 	Moneys received by the Security Trustee after the Enforcement Date pursuant
to the exercise of any of its rights and powers under or pursuant to the Principal
Indemnity and/or Security Documents or any of them shall, subject to clause 12 above,
be reasonably applied by the Security Trustee (after providing for all costs, charges,
expenses and liabilities and other payments ranking in priority to the Secured
Obligations) in the following manner and order:






	 	(a)	 	First in or towards payment or satisfaction of all costs,
charges, expenses and liabilities, incurred and payments made by the Security
Trustee and all remuneration payable to the Security Trustee, or the Agent,
under or pursuant to this Agreement and the Security Documents and any costs
incurred in recovering possession of any Secured Assets;






	 	(b)	 	Secondly, in or towards payment of any moneys due or owing to
the Agent under this Agreement;






	 	(c)	 	Thirdly, in or towards payment of any interest accrued in
respect of the Loan;




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	 	(d)	 	Fourthly, in or towards repayment of the Loan;






	 	(e)	 	Fifthly, in or towards payment of any other sums due to the
Lenders under this Agreement and/or the Security Documents of any of them; and






	 	(f)	 	Lastly, the surplus (if any) shall be paid to the Borrower or
other person entitled to it,






	 	 	 	save that the Security Trustee may credit the same to a suspense account for so
long and in such manner as the Security Trustee may from time to time determine and
retain the same for such period as the Security Trustee considers expedient.






	 	17.2	 	If the Borrower, with such consents as are required under the terms of this
Agreement, disposes of the Property or any interest therein, then the proceeds of such
disposal shall be treated as a prepayment in accordance with the provisions of clause
5.2.






	18	 	NOTICES AND OTHER MATTERS






	 	18.1	 	Every notice, request, demand or other communication under this Agreement
shall be in English and shall:






	 	(a)	 	be in writing delivered personally or sent by registered or
certified mail, return receipt requested, or sent by facsimile followed
promptly by the original delivered by hand or registered or certified mail,
return receipt requested;






	 	(b)	 	unless received earlier, be deemed to have been received,
subject as otherwise provided in this Agreement, in the case of a letter when
delivered personally or 7 (seven) days after it has been put into the post in
South Africa provided such posting is certified or registered; and






	 	(c)	 	be sent :




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	 	(i)	 	to the Borrower at:

16 Branders Street

Nelspruit, 1200

Facsimile: (013) 755-2618
	 
	 	 	 	Attention: The Managing Director
	 
	 	(ii)	 	to DBSA at:

1258 Lever Road

Headway Hill

Midrand

Facsimile: (011) 313-3629
	 
	 	 	 	Attention: Manager: Private Sector Investments Unit
	 
	 	(iii)	 	to each Lender at its address specified in
schedule 1 or in any relevant Substitution Certificate
	 
	 	(iv)	 	to the Security Trustee at:

3rd Floor

1 Newtown Avenue

Killarney, 2193

Facsimile: (011) 480-1774
	 
	 	 	 	Attention: Head: Project Management






	 	 	 	or to such other address as is notified by the Borrower, the Agent, the Security
Trustee or a Lender (as the case may be) to the other parties to this Agreement.
	 
	 	18.2	 	Every notice, request, demand or other communication under this Agreement to
be given by the Borrower to any Lender shall be given to the Agent for onward
transmission as appropriate and to be given to the Borrower by any Lender shall
(except as otherwise provided in this Agreement) be given to the Agent for onward
transmission as appropriate.
	 
	 	18.3	 	No failure or delay on the part of the Agent, the Security Trustee, the
Lenders or any of them to exercise any power, right or remedy under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise by the
Agent, the Security Trustee the Lenders or any of them of any power, right or remedy




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	 	 	 	preclude any other or further exercise thereof or the exercise of any other power,
right or remedy.






	 	18.4	 	The terms of this Agreement may not be varied, deleted, supplemental or
otherwise changed other than by the written agreement of all the parties hereto.






	 	18.5	 	The remedies provided in this Agreement are cumulative and are not exclusive
of any remedies provided by law.






	 	18.6	(a) 	This Agreement (including the documents and instruments referred to
herein) supersedes all prior representations, arrangements, understandings and
agreements between the parties (whether written or oral) relating to the subject
matter hereof and sets forth the entire complete and exclusive agreement and
understanding between the parties hereto relating to the subject matter hereof.






	 	(b)	 	Each party warrants to the other that it has not relied on
any representation, arrangement, understanding or agreement (whether written
or oral) not expressly set out or referred to in this Agreement.






	 	18.7	(a)	Confidential Information






	 	 	 	Each of the Borrower, Lenders, the Agent and the Security Trustee agrees,
for itself and its respective directors, officers, employees, servants and
agents, to keep confidential and not to disclose to any person (save as
provided for in this Agreement) any confidential or proprietary
information (including, without limitation, the Project Documents,
Security Documents and all related documents, the Base Case Model, any
Project Budget, computer, records, specifications, formulae, evaluations,
methods, processes, technical descriptions, reports and other data,
records, drawings and information) provided to or arising or acquired by
it pursuant to the terms or performance of this Agreement or any other
Project Documents (including without limitation any such




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	 	 	 	documents or information supplied in the course of proceedings under the
disputes resolution procedure under any Project Documents) or Security
Documents together the “Confidential Information”).






	 	(b)	 	Exceptions
	 
	 	 	 	Notwithstanding clause 18.7(a), the Borrower, Lenders, the Agent and the
Security Trustee (the Lenders, the Agent and the Security Trustee or any
of them hereinafter in this clause referred to as the “Lending Parties”),
as the context requires, shall be entitled to disclose the whole or any
part of the Confidential Information:






	 	(i)	 	to any Lender, Agent or Security Trustee,
Borrower or to their directors, officers, employees, servants,
subcontractors, agents, auditors or professional advisers to the
extent necessary to enable it or them to perform (or to cause to be
performed) or to enforce any of its or their rights or obligations
under any of the Project Documents, the Security Documents, this
Facility Agreement and in respect of the Lending Parties all related
documents or (as the case may be) to assess whether or not to become
a Lender, Agent and/or Security Trustee;






	 	(ii)	 	when required to do so by law or regulation
by or pursuant to the rules or any order having the force of law of
any court, association or agency including without limitation the
London Stock Exchange and/or the Johannesburg Stock Exchange or any
successors thereof or other agency of competent jurisdiction or any
governmental agency;






	 	(iii)	 	to the extent that the Confidential
Information has, except as a result of a breach of confidentiality,
become publicly available or generally known to the public at the
time of such disclosure;




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	 	(iv)	 	to the extent that the Confidential
Information is already lawfully in the public domain and/or lawfully
in the possession of the recipient or lawfully known to him prior to
such disclosure;






	 	(v)	 	subject to the consent of the Borrower in
the event that disclosure is by the Lending Parties and subject to
the consent of the Agent (acting on the advice of the Lenders) in the
event that disclosure is by the Borrower such consent in either case
not to be unreasonably withheld and/or delayed, to the extent that it
has acquired the Confidential Information from a third party who is
not in breach of any obligation as to confidentiality to the other
party;






	 	(vi)	 	to the extent permitted by any of the
Project Documents, Facility Agreement, Security Documents or any
related documents; or






	 	(vii)	 	subject to the consent of the Borrower in
the event that disclosure is by the Lending Parties and subject to
the consent of the Agent (acting on the advice of the Lenders) in the
event that disclosure is by the Borrower such consent in either case
not to be unreasonably withheld and/or delayed to the extent that any
of the parties wishes to use any non-commercially sensitive
Confidential Information for the purposes of marketing and/or
promotion of its business activities;






	 	(c)	 	Third Parties
	 
	 	 	 	If requested by any party, the party to whom a request is made (the
“Disclosing Party”) shall, if it is reasonable so to do, and without
prejudice to and/or limitation of its rights and obligations hereunder,
use reasonable endeavours to obtain from any third party to whom the
Disclosing Party intends to disclose Confidential Information, an




- 116 -









 






	 	 	 	undertaking in or substantially in the form of this clause 18.7 not to
disclose Confidential Information to any other person.






	 	(d)	 	Survival
	 
	 	 	 	The terms of this clause 18.7, shall remain in force and survive the
termination, cancellation, rescission or acceleration or any other
provisions which ends and/or purports to end in whole or in part the other
rights and obligations of the parties to each other under this Agreement.
	 
	 	(e)	 	Remedies
	 
	 	 	 	Without prejudice to any other rights and remedies that the other party
would have, each of the parties agrees that damages would not be an
adequate remedy for any breach of this clause 18.7 and that the other
party shall be entitled to the remedies of interdict, specific
performance, and/or other equitable relief for any threatened or actual
breach of this clause 18.7 and each party hereby indemnifies the other
against any cost, expense, loss or damage incurred or suffered by the
other party as a result of a breach of this clause 18.7.






	 	18.8	 	Invalidity of any Provision
	 
	 	 	 	If any of the provisions of any of this Agreement or the Project Documents or the
Security Documents become invalid, illegal or unenforceable in any respect under
any law, the validity, legality and enforceability of the remaining provisions of
the Facility Agreement shall not in any way be affected or impaired.
	 
	 	18.9	 	Severability
	 
	 	 	 	Any provision of this Facility Agreement or the Project Documents or the Security
Documents which is prohibited or unenforceable in any jurisdiction




- 117 -









 






	 	 	 	shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted by
applicable law, the Agent, the Security Trustee and each of the Lenders hereby
waives any provision of law which renders any provision of any of this Facility
Agreement, the Project Documents, the Security Documents or any other material
contract related to the Project prohibited or unenforceable in any respect.






	 	18.10	 	Supremacy
	 
	 	 	 	In the event of any conflict as between the parties hereto in respect of the terms
of this Facility Agreement and any other contract related to the Project, the terms
of this Agreement shall supersede such other contracts to the extent legally
permissible.






	19	 	GOVERNING LAW
	 
	 	 	This Agreement the date of which is the date first above written is
governed by and shall be construed in accordance with the Laws of
South Africa from time to time.




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	20	 	JURISDICTION
	 
	 	 	Each party submits to the exclusive jurisdiction of the High Court of South Africa
(Witwatersrand Local Division) or any successor to that court for all purposes relating to
this Agreement.






	21	 	EXECUTION





SIGNED at NELSPRUIT on 29TH JUNE, 2000




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For and on behalf of	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	THE GREATER NELSPRUIT UTILITY COMPANY
(PROPRIETARY) LIMITED as Borrower	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Witnesses:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1.

	 	/s/ S. Jackan
	 	 	 	 	 	/s/ SIGNATURE ILLEGIBLE
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name: S. Jackan
	 	 	 	 	 	who warrants his/her
authority hereto.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	2.

	 	/s/ K. Breytenbach	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: K. Breytenbach	 	 	 	 	 	 	 	 






- 119 -









 






SIGNED at NELSPRUIT on 29 JUNE, 2000




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For and on behalf of	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	THE DEVELOPMENT BANK OF SOUTHERN 

AFRICA LIMITED as Lender	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Witnesses:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1.

	 	/s/ S. Jackan
	 	 	 	 	 	/s/ SIGNATURE ILLEGIBLE
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name: S. Jackan
	 	 	 	 	 	who warrants his/her authority hereto.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	2.

	 	/s/
K. Breytenbach	 	 	 	 	 	 	 	 
	 

	 	Name: K. Breytenbach	 	 	 	 	 	 	 	 






SIGNED at KILLAINERY on 10 August, 2000




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For and on behalf of	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	NEDCOR INVESTMENT
BANK LIMITED as 
Security Trustee	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Witnesses:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1.

	 	/s/ Meyer
	 	 	 	 	 	/s/ SIGNATURE ILLEGIBLE	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name: Meyer
	 	 	 	 	 	who warrants his/her authority hereto.
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	2.

	 	/s/ Joanne Lamming	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: Joanne Lamming	 	 	 	 	 	 	 	 






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SCHEDULE 1

THE LENDERS AND THEIR COMMITMENTS

PART A

DBSA LOAN FACILITY




	 	 	 	 	 	 	 
	 	 	 	 	Commitment
	Name	 	Address and telefax number	 	R million
	The Development
Bank of Southern
Africa Limited

	 	1258 Lever Road, Headway Hill, Midrand
P O Box 1234, Halfway House, 1685
Facsimile: (011) 313-3629
	 	 	48,5	 
	 
	 	 	 	 	 	 
	 

	 	Attention: Manager: Private Sector

Investments Unit	 	 	 	 






 






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SCHEDULE 1

PART B

DBSA UNDERWRITING/PARTIAL RISK FACILITY




	 	 	 	 	 	 	 
	 	 	 	 	Commitment
	Name	 	Address and telefax number	 	R million
	The Development
Bank of Southern
Africa Limited

	 	1258 Lever Road, Headway Hill, Midrand
P O Box 1234, Halfway House, 1685
Facsimile: (011) 313-3629
	 	 	76,5	 
	 
	 	 	 	 	 	 
	 

	 	Attention: Manager: Private Sector

Investments Unit	 	 	 	 






 






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SCHEDULE 2

PART A

FORM OF INITIAL DRAWDOWN NOTICE




(referred to in clause 3.3)




To: [Name and address of Agent]




                    , 20      




R[                    ] Loan




Facility Agreement dated                     , 2000



We refer to the [specify Facility and the Drawdown Schedule, if any,] under the above Facility
Agreement and hereby give you notice that we wish to draw the first Advance of R[                     ] on the [                    ]
(being                     , 2000) of Interest Period in respect thereof of [3] Months [by reference to the
[insert Reference Rate]*.



Payment is to be made in accordance with our irrevocable instructions to you contained in clause
3.5 of the Facility Agreement in connection with which we confirm that:





	 	(i)	 	R[                    ] of the amount referred to above represents the fees payable pursuant to
clause 6.1(a), 6.1(b) 6.1(c) of the Facility Agreement on the Effective Agreement
Date; and






	 	(ii)	 	the balance represents (i) other Eligible Costs due on the Effective
Agreement Date; and where applicable (ii) amounts to be Advanced pursuant to the
Drawdown Schedule.




Where applicable, we enclose the Relevant Approved Payment Schedule and/or the LTA Certificate
required pursuant to clause 3.4 of the Facility Agreement




 





	*	 	If the first Advance under the above specified Facility is made subject to the Base Interest
Fixed Rate future Advances under the said Facility may not be made subject to the Base
Interest Floating Rate.




We confirm that:




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	(a)	 	no event or circumstance has occurred and is continuing which constitutes a Potential Event
of Default or an Event of Default;
	 
	(b)	 	the representations and warranties contained in clauses 8.1 and 8.2 of the Facility Agreement
(but, in the event that audited financial statements are not available at the time of the
Advance requested hereunder, the representation and warranty in clause 8.1(f) refers for this
purpose to the unaudited financial statements of the Borrower (and notwithstanding clause
8.1(f) not the audited financial statements) in respect of the financial year ended on                     ,
20     );
	 
	(c)	 	the borrowing to be effected by such Advance will be within our corporate powers, has been
validly authorised by appropriate corporate action and will not cause any limit on our
borrowings (whether imposed by statute, regulation, agreement or otherwise) to be exceeded;
	 
	(d)	 	there has been no material adverse change in our financial position from that set forth in
the financial statements (if any) referred to in (b) above; and
	 
	(e)	 	the Borrower has complied with its obligations under the Facility Agreement and any Security
Documents as well as any reasonable requests of the Lenders so as to enable Financial Close to
occur.




Words and expressions defined in the Facility Agreement shall have the same meanings where used
herein.




For and on behalf of




The Greater Nelspruit Utility (Proprietary) Company Limited




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SCHEDULE 2

PART B

FORM OF SUBSEQUENT DRAWDOWN NOTICE




(referred to in clause 3.1)




To: [Name and address of Agent]




                    , 20      




R[                    ] Loan




Facility Agreement dated                     , 2000



We refer to the [specify Facility and the Drawdown Schedule referred to therein] under the above
Facility Agreement and hereby give you notice that we wish to draw an
Advance of R[      ] 20      the
first Interest Period in respect thereof to expire on 20
     [by reference to the [insert Reference
Rate]*. Payment is to be made in accordance with our irrevocable instructions to you contained in
clause 3.5 of the Facility Agreement. The funds should be credited to the Proceeds Account.




     Where applicable, we enclose the Relevant Approved Payment Schedule and/or the LTA Certificate
required pursuant to clause 3.4 of the Facility Agreement.


We confirm that:





	 	(i)	 	no event or circumstance has occurred and is continuing which constitutes a
Potential Event of Default and/or an Event of Default;






	*	 	If the previous Advance under the above specified Facility was made subject to the Base
Interest Fixed Rate, this requested Advance, if it is to be made under the said Facility must
also be made subject to the Base Interest Fixed Rate.






	 	(ii)	 	the representations and warranties contained in clauses 8.1 and 8.2 of the
Facility Agreement (and so that the representation and warranty in clause
	 
	 	 	 	8.1(f), refers for this purpose to the audited financial statements of the Borrower
in respect of the financial year ended 
on                     
[ — ]         ) are true and correct at the date





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	 	 	 	hereof as if made with respect to the facts and circumstances existing at such
date;






	 	(iii)	 	the borrowing to be effected by such Advance will be within our corporate
powers, has been validly authorised by appropriate corporate action and will not cause
any limit on our borrowings (whether imposed by statute, regulation, agreement or
otherwise) to be exceeded;






	 	(iv)	 	there has been no material adverse change in our financial position from that
set forth in the financial statements (if any) referred to in (b) above.




Words and expressions defined in the Facility Agreement shall have the same meanings where used
herein.




For and on behalf of




The Greater Nelspruit Utility Company (Proprietary) Limited




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SCHEDULE 2

PART C

FORM OF NOTICE TO LENDERS




(referred to in clause 3.6)





	 	 	To: [Name and address of Agent]





                    , 20      




Facility Agreement dated                     , 2000




to                    in respect of




a Loan of up to R[          ].




     We refer to clause 3.6 of the above Facility Agreement in respect of the [specify Facility and
the Drawdown Schedule referred to therein] and hereby give you notice that the Borrower wishes to
draw down an Advance of R[      ] on 20      We confirm that we have received a Drawdown Notice from the
Borrower in respect of such Advance.



     We wish to confirm the following:




	 	(1)	 	the Interest Period selected by the Borrower in respect of such Advance is [3
Months/alternatively insert Base Interest Fixed Rate]; and
	 
	 	(2)	 	the current Interest Payment Date in respect of the Loan is 20     .





     Kindly transfer the sum of R[                     ] (being the portion of such Advance to be funded by you) to our
account in accordance with clause 7.2 of the Facility Agreement.



     Words and expressions defined in the Facility Agreement shall have the same meanings when used
herein.



For and on behalf of




[                     ]




                             as Agent




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SCHEDULE 3

PART A

DOCUMENTS AND EVIDENCE REQUIRED AS CONDITIONS PRECEDENT



Subject to part B, the following (stipulated for the benefit of the Lenders) shall be the
Conditions Precedent referred to in this Agreement:





	(a)	 	receipt by the Agent of a copy, certified as a true, complete and up-to-date by the company
secretary of the Borrower of the Certificate of Incorporation, the Memorandum and Articles of
Association of the Borrower and the organogram showing the organisational structure of the
Borrower and the Biwater Group (as defined in the Sponsor Support Agreement);
	 
	(b)(i)	 	receipt by the Agent of a copy, certified as a true copy by the company secretary of the
Borrower of resolutions of the Board of Directors of the Borrower evidencing approval of this
Agreement, the Security Documents and the Project Documents to which it is a party and
authorising its appropriate officers to execute and deliver this Agreement, the Security
Documents and such Project Documents and to give all notices and take all other action
required by the Borrower under this Agreement, the Security Documents and such Project
Documents;
	 
	(ii)	 	receipt by the Agent of a certified copy of the resolution(s) adopted by the Council to grant
the concession to the Borrower, to authorise the conclusion of the Concession Agreement,
Clarification Memorandum and Termination Compensation and Co-operation Agreement and in terms
whereof the Council official who signs and executes the aforementioned agreements for and on
behalf of the Council is specifically authorised and empowered to sign and execute such
agreements and such other ancillary agreements and documentation as may be necessary under the
terms of such agreements and to take all other action required to give effect to such
agreements and documentation;
	 
	(iii)	 	receipt by the Agent of satisfactory evidence that the committed shareholders (as defined in
the Shareholders’ Agreement) have approved the entering into by the Borrower of the Facility
Agreement and the entering into by the Borrower of the agreement(s) by which




- 128 -









 












	 	 	all of the Council’s rights, obligations, title and interest in and to the Bulk Water
Supply Agreement are ceded, assigned and transferred to the Borrower;
	 
	(c)	 	receipt by the Agent of a copy, certified as a true copy by the company secretary of the
Borrower of resolutions of the Board of Directors of Biwater Plc and Sivukile (i) evidencing
approval of the terms of the Sponsor Support Agreement and (ii) authorising its appropriate
officers to execute and deliver the Sponsor Support Agreement and to give all notices and take
all other action required by Biwater Plc and/or Sivukile under the Sponsor Support Agreement;
	 
	(d)	 	delivery to the Agent of specimen signatures, authenticated by the company secretary of the
Borrower of the persons authorised in the resolutions referred to in paragraphs (b)(i) and (c)
above;
	 
	(e)(i)	 	delivery to the Lenders of the Project Documents duly executed and in the form and substance
required by the Lenders;
	 
	(ii)	 	delivery to the Lenders of the Security Documents duly executed and registered (where
relevant) in accordance with applicable law and in the form and substance required by the
Lenders;
	 
	(f)	 	confirmation from the company secretary of the Borrower to the Lenders that the undertakings
in the Ownership Obligation remain true;
	 
	(g)	 	receipt of the Borrower’s Legal Opinion addressed to the Lenders duly signed by the
Borrower’s Legal Advisers;
	 
	(h)	 	evidence that the Borrower is not and in the foreseeable future is not likely to be in breach
of the Ratio Undertakings;
	 
	(i)	 	satisfactory evidence from the company secretary of the Borrower of insurance of the Property
and the Project by the Borrower and/or the Contractor and/or the Operator in accordance with
the Borrower’s obligations to insure or procure insurance under the Agreement, the Project
Documents and the Security Documents and specifically evidence




- 129 -









 












	 	 	that the interests of the Agent (as agent for the Lenders) and/or Security Trustee is noted
thereon;
	 
	(j))	 	evidence satisfactory to the Lenders that the Borrower has the benefit of the Relevant
Consents;
	 
	(k)	 	satisfactory evidence from the company secretary of the Borrower that the Borrower has duly
applied to be and/or is registered for VAT purposes as Vendor,
	 
	(1)	 	delivery to and evidence to the satisfaction of the Majority Lenders of the following (such
acknowledgement of satisfaction not to be unreasonably withheld and/or delayed):






	 	(i)	 	the two 3 (three) year capital expenditure programmes constituting the
initial construction phase, the first linked to the Executed Design and Construction
Contract and the second linked to the detail as contained in the Base Case Model;
	 
	 	(ii)	 	the Five Year Plan; and






	 	(iii)	 	the first year’s Operations Management Plan including the first year’s
operational budget, duly approved by the Majority Lenders;






	(m)	 	receipt by the Agent of satisfactory evidence of:






	 	(i)	 	approval by the Council of the Shareholders’ Agreement and Memorandum and
Articles of Association;






	 	(ii)	 	the passing of a resolution by the requisite majority of Shareholders in
respect of the approval to establish and implement an employee share incentive scheme
up to a maximum of 5,0% (five comma nought per cent) of the total
issued ordinary shares of the Borrower;






	 	(iii)	 	payment by the Concessionaire to the Council of the R200 000 (two hundred
thousand Rand) contract implementation fee;




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	 	(iv)	 	publication of the requisite disclosures pursuant to section 19 of the Water
Services Act 108 of 1997;






	 	(v)	 	the nomination by the Council of the Borrower to provide water for industrial
use as envisaged in section 7 of the Water Services Act 108 of 1997;






	(vi)	 	the granting of the Sivukile Put-Call Option; and






	 	(vii)	 	cession, assignment, delegation and transfer of the relevant rights,
obligations, title and interest in and to the contracts between the Council and
various third parties, which contracts are reflected in Annexure H1 of the Concession
Agreement by the Council to the Borrower with the consent, to the extent required, of
the other parties to such contracts;






	(n)	 	execution of an Account Bank Undertaking in relation to the Proceeds Account, the Income
Account, the Operating Account and the Debt Service Reserve Account;
	 
	(o)	 	there exists no evidence which might lead any of the Lenders to reasonably determine that any
other Lender is in breach of its obligations to make Contributions under this Agreement or of
maintaining its Available Commitments or is likely in the foreseeable future to so be in
breach or commit any such breach;
	 
	(p)	 	there exists no evidence which may lead a Lender to reasonably conclude that the Borrower or
Sponsor is unable to pay its debts as they fall due or reasonably conclude that the Borrower
or Sponsor is unlikely to be able to pay its debts as they fall due in the foreseeable future;
	 
	(q)	 	satisfaction of any Conditions Precedent including any additional Conditions Precedent
referred to in schedule 6 and in the relevant part of schedule 10 in respect of each Facility;
	 
	(r)	 	confirmation from the Borrower’s Legal Adviser or company secretary of the Borrower that the
Project Documents (other than such Project Documents, if any, which the Borrower and DBSA have
agreed shall be executed on or after the Effective Agreement




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	 	 	Date) have been duly executed and that no material amendments have been made to such
Project Documents without the consent of the Lenders;
	 
	(s)	 	written confirmation from the company secretary of the Borrower that the Borrower has not
incurred any Encumbrance (other than any Permitted Encumbrance) prior to the first Advance.
	 






	(t)	(i)	 	receipt of the legal opinion given by the Council’s legal adviser addressed to the
Lenders in form and substance satisfactory to the Lenders;




	 	(ii)	 	delivery to the Lenders of an agreed Base Case Model approved by the Majority
Lenders;






	 	(iii)	 	the Termination Compensation and Co-Operation Agreement shall have been
concluded between DBSA and the Council;






	 	(iv)	 	delivery to the Agent of a letter from the Council confirming that the
Council has received and reviewed the Facility Agreement;






	 	(v)	 	delivery to the Agent by the Borrower’s labour adviser, to the satisfaction
of the Majority Lenders, of an opinion that all relevant transferring employees have
been lawfully transferred to the Borrower;






	 	(vi)	 	delivery of a letter by the company secretary of the Borrower to the Agent
confirming that after reasonable due diligence by the Borrower, there is no legal
challenge in a court of law to the bidding process or the legality, validity or
enforceability of any of the Project Documents;






	 	(vii)	 	receipt by the Agent of written confirmation from the Council that the
signed Operation and Maintenance Agreement is substantially in accordance with
Annexure I of the Concession Agreement;






	 	(viii)(a)	 	in respect of all Advances which include a request, in whole or in part, for
Eligible Costs under sub-paragraph (a) of schedule 7, delivery to the Agent of a




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	 	 	 	Relevant Approved Payment Schedule attached to a Drawdown Notice which covers the
period of the attached Relevant Approved Payment Schedule and the date and amount
of the requested Advance is as indicated in the relevant Drawdown Schedule;
	 
	 	(b)	 	in respect of the first advance following each quarterly review and
reconciliation by the Lenders’ Technical Adviser under clause 13 of the Executed
Design and Construction Contract and/or the relevant clause(s) of the Un-executed
Design and Construction Contract, delivery to the Agent of an LTA Certificate attached
to the Drawdown Notice under which such Advance is requested;
	 
	 	(ix)	 	approval by the Majority Lenders of the pre-qualification process for
sub-contractors as contemplated in clause 6.6.1 of the Operation and Maintenance
Agreement, clause 4.5.2(a) of the Executed Design and Construction Contract and the
relevant clause(s) of the Un-executed Design and Construction Contract;
	 
	 	(x)	 	evidence satisfactory to the Majority Lenders of the opening of the dedicated
water services fund account as described in clause 85 of the Concession Agreement;
	 
	 	(xi)	 	delivery to the Lenders of a legal opinion given by the Lenders’ Legal
Advisers;
	 
	 	(xii)(a)	 	all amendments to the Borrower’s articles of association in order to give effect
to the Golden Share Agreement have been made to the satisfaction of the Majority
Lenders; and
	 
	 	(b)	 	the Security Trustee shall have received the “A” Preference Shares (as defined in the
Golden Share Agreement) issued by the Borrower to the Security Trustee pursuant to the
Golden Share Agreement which shall afford the Security Trustee the rights, privileges
and conditions set out in Annexure “A” of the Golden Share Agreement;




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	 	 	 	For the avoidance of doubt, unless indicated herein or otherwise notified to the Borrower
appropriate written confirmation to the Lenders given by the Borrower’s Legal Advisers,
will provide sufficient evidence of the matters referred to in this schedule 3.




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SCHEDULE 3

PART B

TIMING OF CONDITIONS PRECEDENT





	I	 	Conditions Precedent to be satisfied for the purposes of the Effective Agreement Date:






	 	1	 	(a), (b), (c), (d), (f), (g), (h), (i), (k), (1), (m), (n), (p), (q), (r) and
(s) of schedule 3 part A.






	 	2	 	Satisfaction of (e)(i) of schedule 3 part A other than with respect to the
delivery of any Five Year Plan other than the first Five Year Plan, the Un-executed
Design and Construction Contract and the performance bond to be issued under the
Un-executed Design and Construction Contract and other than with respect to the
preparation of an Environmental Management Plan.






	 	3	 	Satisfaction of (e)(ii) of schedule 3 part A other than the registration of
the General Notarial Bond and the execution by Sivukile of a pledge
and cession of shares in respect of the 10,0% (ten comma nought per cent) of the ordinary issued
share capital in the Borrower owned by Sivukile as at the date of this Agreement.






	 	4	 	Satisfaction of (j) of schedule 3 part A provided that in respect of the
Matsulu Sewage Treatment Works, the KaNyamazane Sewage Treatment Works and the
Kingstonvale Sewage Treatment Works, satisfaction of (j) may at the option of the
Majority Lenders be by way of receipt by the Agent of alternative evidence and the
giving of further undertakings satisfactory to the Majority Lenders.
	 
	 	5	 	Satisfaction of (t) other than (t)(viii).






	II	 	Conditions Precedent to be satisfied by the date 2 (two) Months after
the Effective Agreement Date:




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	 	6	 	All of I above plus registration of the General Notarial Bond.






	III	 	Conditions Precedent to be satisfied in respect of all Advances which
include a request, in whole or in part, for Eligible Costs under
sub-paragraph (a) of schedule 7:






	 	7	 	Subject to the other paragraphs of this part B, all of part B plus
satisfaction of (t)(viii)(a).






	IV	 	Conditions Precedent to be satisfied in respect of the first advance following the quarterly
review and reconciliation by the Lenders’ Technical Advisers under clause 13 of the Executed
Design and Contract and/or the relevant clause(s) of the Un-executed Design and Construction
Contract:






	 	8	 	Subject to the other paragraphs of this part B, all of part B plus
satisfaction of (t)(viii)(b).






	V	 	Conditions Precedent to be satisfied upon the execution of the Un-executed Design and
Construction Contract:






	 	9	 	Subject to the other paragraphs of this part B, all of part B plus delivery
to the Lenders of the Un-executed Design and Construction Contract and the performance
bond to be issued under the Un-executed Design and Construction Contract, both duly
executed and in the form and substance required by the Lenders.






	VI	 	Conditions Precedent to be satisfied in respect of an Advance immediately following delivery
by the Borrower to the Council of a Five Year Plan other than the first Five Year Plan:






	 	10	 	Subject to the other paragraphs of this part B, all of part B plus delivery
to the Lenders of the relevant Five Year Plan duly executed and in the form and
substance required by the Lenders.




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	VII	 	Conditions Precedent to be satisfied once DBSA is no longer the sole Lender:






	 	11	 	Subject to the other paragraphs of this part B, all of part B plus
satisfaction of (o).






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SCHEDULE 4

FORM OF SUBSTITUTION CERTIFICATE

(referred to in clause 15.4)




	 	 	 
	To:

	 	[Name of Agent]
	 
	 	 
	Attention:
	 
	 	 
	 

	 	[Date]






Substitution Certificate




     This Substitution Certificate relates to the [specify Facility Agreement] under the Facility
Agreement (the “Agreement”) dated [ , 20 ] between as Borrower (1), the banks and financial
institutions whose respective names and addresses are set out in schedule 1 thereto as Lenders (2)
[      ] (3) and [      ] as Agent (4) and [      ] as Security Trustee. Terms defined in the Agreement shall have
the same meaning in this Substitution Certificate.




	1	 	[Existing Lender] (the “Existing Lender”) (a) confirms the accuracy of the summary of its
participation in the Agreement set out in the schedule below; and (b) requests [Substitute
Lender] (the “Substitute”) to accept by way of assignment the portion of such participation
specified in the schedule hereto by counter-signing this Substitution Certificate and after
such acceptance the Substitute shall deliver the Substitution Certificate to the Agent with a
certified copy to the Security Trustee at its address for the service of notices specified in
the Agreement.
	 
	2	 	The Substitute hereby requests the Agent (on behalf of itself, the Security Trustee, the
Borrower and the Lenders) to accept this Substitution Certificate as being delivered to the
Agent pursuant to and for the purposes of clause 15.4 of the Agreement, so as to take effect
in accordance with the respective terms thereof on the [insert date of transfer] (the
“Effective Substitution Date”) or on such later date as may be determined in accordance with
the terms thereof.




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	3	 	The Agent on behalf of itself, the Security Trustee, the Borrower and the Lenders confirms
the assignment and/or transfer effected by this Substitution Certificate pursuant to and for
the purposes of clause 15.4 of the Agreement so as to take effect in accordance with the terms
thereof.
	 
	4	 	The Substitute confirms:






	 	(a)	 	that it has received a copy of the Agreement and each of the Security
Documents and all other documentation and information required by it in connection
with the transactions contemplated by this Substitution Certificate;
	 
	 	(b)	 	that it has made and will continue to make its own assessment of the
validity, enforceability and sufficiency of this Agreement, the Security Documents and
the Substitution Certificate and has not relied and will not rely on the Borrower, the
Existing Lender, the Security Trustee, the Agent or the Security Trustee or any
statements made by any of them in that respect;
	 
	 	(c)	 	that it has made and will continue to make its own credit assessment of the
Borrower and the Sponsor and has not relied and will not rely on the Existing Lender,
the Agent or the Security Trustee or any statements made by any of them in that
respect; and
	 
	 	(d)	 	accordingly, neither the Existing Lender nor the Agent or the Security
Trustee or the Borrower shall have any liability or responsibility to the Substitute
in respect of any of the foregoing matters.






	5	 	Execution of this Substitution Certificate by the Substitute constitutes its representation
to the Existing Lender and all other parties to the Agreement that it has power to become
party to the Agreement as a Lender on the terms herein and therein set out and has taken all
necessary steps to authorise execution and delivery of this Substitution Certificate.
	 
	6	 	The Existing Lender makes no representation or warranty and assumes no responsibility with
respect to the legality, validity, effectiveness, adequacy or enforceability of the Agreement
or the Security Documents (or any of them) or any document relating thereto




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	 	 	and assumes no responsibility for the financial condition of the Borrower or any other
party to the Agreement or the Security Documents (or any of them) or for the performance
and observance by the Borrower or any other such party of any of its obligations under the
Agreement or the Security Documents (or any of them) or any document relating thereto and
any and all such conditions and warranties, whether express or implied by law or otherwise,
are hereby excluded.






	7	 	The Substitute hereby undertakes to the Existing Lender, the Borrower, the Agent and the
Security Trustee that it will perform in accordance with their terms all those obligations
which by the respective terms of the Agreement and all other agreements under which the
existing Lender has obligations in respect of the Project and/or the Facility Agreement will
be assumed by it after acceptance of this Substitution Certificate by the Agent and the
Substitute hereby accepts and approves of all Project Documents both as to their form and
substance.
	 
	8	 	This Substitution Certificate and the rights and obligations of the parties hereunder shall
be governed by and construed in accordance with the law of the Republic of South Africa.






			
	Note:	 	This Substitution Certificate is not a security, bond, note, debenture, investment or similar instrument.




AS WITNESS the hands of the authorised signatories of the parties hereto on the date appearing
below.




	 	 	 	 	 
	THUS DONE AND EXECUTED at   this   day of   [20[      ]]	 	 
	 
	 	 	 	 
	Signed

	 	For and on behalf of	 	 
	 
	 	 	 	 
	 

	 	[    Substitute]	 	 
	 
	 	 	 	 
	 

	 	by	 	 
	 
	 	 	 	 
	 

	 	 

who warrants his/her authority hereto
	 	 






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	Signed

	 	For and on behalf of	 	 
	 
	 	 	 	 
	 

	 	[    Agent]	 	 
	 
	 	 	 	 
	 

	 	by	 	 
	 
	 	 	 	 
	 

	 	 

who warrants his/her authority hereto
	 	 
	 
	 	 	 	 
	Signed

	 	For and on behalf of	 	 
	 
	 	 	 	 
	 

	 	[    Existing Lender]	 	 
	 
	 	 	 	 
	 

	 	by	 	 
	 
	 	 	 	 
	 

	 	 

who warrants his/her authority hereto
	 	 
	 
	 	 	 	 
	Signed

	 	For and on behalf of	 	 
	 
	 	 	 	 
	 

	 	[    Borrower]	 	 
	 
	 	 	 	 
	 

	 	by	 	 
	 
	 	 	 	 
	 

	 	 

who warrants his/her authority hereto
	 	 






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THE SCHEDULE




	 	 	 	 	 
	Amount of Contribution (R)
	 	Next Interest Payment Date(s)
	 	Portion transferred (R)






Administrative Details of Substitute




Lending Office:




Account for payments:




Telephone:




[Telefax:]




Attention:




	 	 	 	 	 	 	 	 	 	 	 
	[Existing Lender]	 	 	 	[Substitute]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:	 	 	 	Date:	 	 






	 	 	 	 	 	 	 	 	 
	The Agent	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	On its own behalf
	 
	 	 	 	 	 	 	 	 
	and on behalf of the Borrower, the Lenders and the Security Trustee.






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SCHEDULE 5

SPONSOR SUPPORT AGREEMENT




SPONSOR SUPPORT AGREEMENT




between




BIWATER PLC




and




SIVUKILE INVESTMENTS (PROPRIETARY) LIMITED




and




THE GREATER NELSPRUIT UTILITY

COMPANY (PROPRIETARY) LIMITED

(as Borrower)




and




DEVELOPMENT BANK OF SOUTHERN AFRICA LIMITED

(as Lender and Underwriter)




and




NEDCOR INVESTMENT BANK LIMITED

as Security Trustee




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This Agreement is made and entered into



BETWEEN:





	(1)	 	Biwater Plc;
	 
	(2)	 	Sivukile Investments (Pty) Limited;
	 
	(3)	 	The Greater Nelspruit Utility Company (Proprietary) Limited (as Borrower);
	 
	(4)	 	Development Bank of Southern Africa Limited (as a Lender and Underwriter); and
	 
	(5)	 	Nedcor Investment Bank Limited (as Security Trustee).




WHEREAS:





	(A)	 	By a facility agreement (the “Facility Agreement”) made between the Borrower, the Lenders,
the Agent and the Security Trustee, the Lenders have agreed, upon and subject to the terms and
conditions of the Facility Agreement, to make available to the Borrower a loan comprising 2
facilities respectively of R48,5 million (the DBSA Loan Facility) and R76,5 million (the DBSA
Underwriting / Partial Risk Guarantee Facility) for the purpose of enabling the Borrower to
finance the Eligible Costs of the Project.
	 
	(B)	 	The execution and delivery of this Agreement is one of the conditions precedent to the
Lenders making their Commitments available under the Facility Agreement.
	 
	(C)	 	The Sponsor has agreed to execute and deliver this Sponsor Support Agreement as part
generally of the agreement between the parties, in order for the Lenders to make loans to the
Borrower pursuant to the Facility Agreement.




IT IS AGREED as follows:





	1	 	DEFINITIONS AND INTERPRETATION






	 	1.1	 	In this Agreement, unless the context otherwise requires or unless otherwise
defined in this Agreement, words and expressions defined in the Facility




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	 	 	Agreement and used in this Agreement shall have the same meaning when used in this
Agreement.






	 	1.2	 	In this Agreement, unless the context otherwise requires:





	 	 	 	 	 
	“Biwater Shareholders”	 	means any shareholders of the Borrower other than Sivukile;
	 
	 	 	 	 
	“Bonds”	 	means the performance bonds under the Concession Agreement, Operation and Maintenance
Agreement and the Design and Construction Contracts;
	 
	 	 	 	 
	“Collateral Instruments”	 	means notes, bills of exchange, certificates of deposit and other
negotiable and non-negotiable instruments, guarantees, indemnities and other
assurances against financial loss and any other documents or instruments which contain
or evidence an obligation (with or without security) to pay, discharge or be
responsible directly or indirectly for, any Indebtedness or Liabilities of the
Borrower or any other Person liable;
	 
	 	 	 	 
	“Concession Assets”	 	shall have the meaning ascribed to concession assets in the Concession Agreement;
	 
	 	 	 	 
	“Control”	 	means, in relation to a company any of the paragraphs below :
	 
	 	 	 	 
	 

	 	(a)
	 	the beneficial ownership of the majority of the ordinary
voting shares in the issued share capital of such
company;
	 
	 	 	 	 
	 

	 	(b)
	 	the beneficial ownership of the shares in the issued
share capital of such company entitling the
beneficial owner thereof to exercise less than






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	 	 	 	the majority of the votes attaching to all the
issued shares of such company, but where such
voting power is sufficiently dominant relative to
the spread of the shareholdings that it does
constitute a de facto control of such company;
	 
	 	 	 	 
	 

	 	(c)
	 	the right,
through shareholding or otherwise, to control the
composition of the board of directors of such company
and, without prejudice to the generality of the
aforegoing, the composition of such board shall be
deemed to be so controlled if the Person or entity
holding the right may by the exercise of some power,
directly or indirectly, appoint or remove the
majority of the directors;
	 
	 	 	 	 
	 

	 	(d)
	 	the right to control the management of such company; or
	 
	 	 	 	 
	 

	 	(e)
	 	the ability to exercise a material influence over the financial
and business policies of such company;
	 
	 	 	 	 
	“Effective Date”

	 	 	 	has the meaning ascribed to it in the Concession Agreement;
	 
	 	 	 	 
	“Incapacity”

	 	 	 	means in relation to a Person the death, bankruptcy, unsoundness of mind,
insolvency, liquidation, dissolution, winding-up, administration, receivership,
amalgamation, reconstruction, judicial management or other incapacity of such Person
whatsoever (and, in the case of a partnership, includes the termination or change in
the composition of the partnership);






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	“Person”

	 	 	 	has the meaning ascribed to person in clause 1.5(d) of the Facility Agreement;
	 
	 	 	 	 
	“Senior Liabilities”

	 	 	 	shall have the meaning described in clause 10.1;
	 
	 	 	 	 
	“Sponsor”

	 	 	 	means, unless otherwise agreed, Biwater Plc for so long as Sivukile holds no more
than 10,0% (ten comma nought per cent) of the ordinary issued share capital in the
Borrower and both Biwater Plc and Sivukile in the event that Sivukile holds more than
10,0% (ten comma nought per cent) of the ordinary issued share capital in the Borrower
and with the exception of the representations and warranties in clause 11 hereof,
Biwater Plc and Sivukile shall be jointly and severally liable hereunder;







	 	1.3	 	clause headings are inserted for convenience of reference only and shall be
ignored in the interpretation of this Agreement.
	 
	 	1.4	 	In this Agreement, unless the context otherwise requires:






	 	(a)	 	references to clauses and any schedule are to be construed as
references to the clauses of and any schedule to, this Agreement and
references to this Agreement include any such schedule;
	 
	 	(b)	 	references to (or to any specified provision of) this
Agreement or any other document shall be construed as references to this
Agreement, that provision or that document as in force for the time being and
as amended in accordance with the terms thereof, or, as the case may be, with
the agreement of the relevant parties and (where such consent is, by the terms
of this Agreement or the relevant document, required to be obtained as a
condition to such amendment being permitted) the prior written consent of the
Agent;




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	 	(c)	 	words importing the plural shall include the singular and
vice versa;
	 
	 	(d)	 	references to statutory provisions shall be construed as
references to those provisions as replaced, amended, re-enacted or superseded
from time to time; and
	 
	 	(e)	 	if any provision in a definition is a substantive provision
conferring rights or imposing obligations on any party to this Agreement,
effect shall be given to it as if it were a substantive provision in the body
of the Agreement.






	2	 	COMPLETION OF THE PROJECT
	 
	 	 	The Sponsor agrees and undertakes with and to the Agent, for itself and as agent for the
Lenders and the Security Trustee, that it will cause and procure that the Practical
Completion Date shall occur by the Target Date but, without prejudice to and/or limitation
of its other obligations hereunder, the Sponsor shall not be obliged to contribute any
amount in excess of its existing liabilities under this Agreement as a result of its
undertaking in this clause 2.
	 
	3	 	SHORTFALL UNDERTAKING






	 	3.1 (a)	 	If within 72 (seventy-two) Months of the earliest First Drawdown Date
under the Facilities at any time or times: (i) the Agent should reasonably determine
(or if the Borrower should so determine and the Agent acting on the written
instructions of the Majority Lenders approves in writing such determination (the
“Approval”)) that the Project Costs exceed the Project Revenues (the “Shortfall”) and
(ii) at the time of such determination the Borrower is in breach of any of its payment
obligations under the Facility Agreement, then, without prejudice to or limitation of
its other obligations under this Agreement, the Sponsor hereby undertakes on an
indemnity basis with and to the Agent, for itself and as agent for the Lenders, that
it will, within 15 (fifteen) Banking Days of




- 148 -









 






	 	 	 	the Approval or of the demand to that effect from the Agent, contribute to
the Borrower in cash new Sponsor Subordinated Loan funds equal to the
Shortfall and will procure that the Borrower applies the same in
supporting, financing or refinancing Project Costs and pending such
application will pay the same into the Income Account.






	 	(b)	 	Subject to clause 3.1(c) below, the total aggregate liability
of the Sponsor under clauses 3.1(a), 5.2(a), 5.2(b), 5.3(a) and 5.3(b) shall
not exceed the sum of R30 million.
	 
	 	(c)	 	The limitation in clause 3.1(b) on the total aggregate
liability of the Sponsor for contributions made by the Sponsor pursuant to
clause 3.1(a) shall not apply to such contributions where made in respect of
the Borrower’s payment obligations to a Contractor under a Design and
Construction Contract made necessary due to an increase in the contract price
of such Design and Construction Contract arising in whole or in part from an
increase in the CPI (as defined in the Concession Agreement) or from
escalation due to a change in the construction programme of such Design and
Construction Contract.






	 	3.2	 	The Sponsor further undertakes to procure the following:






	 	(a)	 	that, until the Practical Completion Date, Biwater Operations
in its capacity as the Operator shall obtain all amounts required by it to
fulfill its obligations as the Operator under the Operation and Maintenance
Agreement to the extent that for any reason whatsoever there is, or is
reasonably likely to be, any shortfall between the costs incurred or to be
incurred by it under the Operation and Maintenance Agreement and the amounts
paid to it under the approved operational budget (as defined in the Operation
and Maintenance Agreement);
	 
	 	(b)	 	that, until the Practical Completion Date, Biwater Operations
in its capacity as Contractor, shall obtain all amounts required to enable




- 149 -









 












	 	 	 	Biwater Operations to fulfill its obligations under the Design and
Construction Contracts to the extent that there is any shortfall between
the costs incurred by Biwater Operations in so fulfilling its obligations
and the amounts paid to it under the Design and Construction Contracts.






	 	 	 	The above clauses 3.1 and 3.2 may be invoked by the Agent at such times and with
such frequency as it deems fit.






	4	 	FULFILMENT OF BIWATER GROUP OBLIGATIONS
	 
	 	 	The Sponsor agrees and guarantees (on an indemnity basis) to the Agent, for itself and as
agent for the Lenders, that it will, within 15 Banking Days of a demand to that effect from
the Agent, procure the fulfilment of all obligations undertaken :






	 	(a)	 	by Biwater Operations as sub-contractor to the Borrower under the Operation
and Maintenance Agreement as contemplated in clause 4.1.1 of that agreement;
	 
	 	(b)	 	by Biwater Operations as manager and agent of the Borrower under the
Operation and Maintenance Agreement as contemplated in clause 4.1.2 of that agreement;
	 
	 	(c)	 	by Biwater Operations under the Design and Construction Contracts; and
	 
	 	(d)	 	by BCIL (or such other entity within the Biwater Group with whom a similar
technical support agreement is concluded) under the Technical Support Agreement;






	 	 	save that the obligations of the Sponsor under this clause 4 shall, in respect of
sub-paragraphs (a) and (c) cease on the Practical Completion Date and, in respect of
sub-paragraphs (b) and (d), cease on the date on which all of the Borrower’s actual and/or
contingent payment obligations under the Facility Agreement have been fulfilled.
	 
	 	 	This clause 4 may be invoked by the Agent at such times and with such frequency as it deems
fit.




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	5	 	OTHER SUPPORT






	5.1.	 (a)	 	The Sponsor agrees and undertakes with and to the Agent, for itself and
as agent for the Lenders and with and to the Security Trustee, that it will procure
that each of the Bonds to be issued, maintained or renewed before the date on which
all of the Borrower’s actual and/or contingent payment obligations under the Facility
Agreement have been fulfilled is so issued, maintained or renewed in accordance with
the terms of the Concession Agreement, the Operation and Maintenance Agreement and the
Design and Construction Contracts (the “Underlying Agreements”) and, unless otherwise
agreed in writing by the Lenders, the issuer of the Bond to be provided under the
Concession Agreement will have no recourse to the Borrower in respect of payments made
by the issuer under or in connection with such Bond and shall procure that, unless
otherwise consented to in writing by the Lenders, the issuer of such Bond provides to
the Agent a written waiver of any rights of subrogation, contribution or indemnity or
any other rights of whatsoever nature that the issuer may have against the Borrower.
	 
	 	(b)	 	In the event that the Sponsor indemnifies any such issuer in
respect of any payment made by that issuer under any Bond to be provided by
the Borrower, the Sponsor shall, unless otherwise agreed by the Lenders, treat
any amount becoming due to the Sponsor from the Borrower in connection
therewith as a Sponsor Subordinated Loan subject to the terms of the Facility
Agreement.
	 
	5.2.	 	 	If:
	 
	 	(a)	 	prior to the Practical Completion Date the Borrower incurs
any capital and/or other costs due to a rejection by the Council pursuant to
clause 45.6 of the Concession Agreement of any charge increase request based
in whole or in substantive part on:




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	 	(i)	 	any circumstances attributable to the state
of existing assets (as defined in the Concession Agreement) at the
Effective Date or at the date of delivery thereof to the Borrower;
	 
	 	(ii)	 	any adverse consequences of decisions by
the Borrower not involving facts affecting the supply of water
services (as defined in the Concession Agreement);






	 	(b)	 	the Borrower, in pursuance of the Project incurs any
necessary additional costs and expenses which have not been budgeted for in
the Base Case Model as at the date of this Agreement in connection with the
Kingstonvale Trunk Sewer, the KaNyamazane Bulk Water Rising Main and the
Matsulu Sewerage Treatment Works, which costs and expenses should have been
reasonably foreseen by a skilled and experienced contractor or professional in
the same or similar circumstances as the Borrower as at the date of this
Agreement and provided the Agent reasonably determines that the payment of
such costs and expenses by the Borrower will or is reasonably likely to place
the Borrower in breach of any of its payment obligations under the Facility
Agreement, the Sponsor agrees and undertakes with and to the Security Trustee
and the Agent, for itself and as agent for the Lenders, that it will, within
15 (fifteen) Banking Days of demand to that effect from the Agent, contribute
to the Borrower in cash Sponsor Subordinated Loan equal to such capital and/or
other costs and/or expenses as so determined and will procure that the
Borrower applies the same in supporting, financing or refinancing such capital
and/or other costs and/or expenses and pending such application will pay the
same into the Income Account. In the event of a disagreement or dispute
arising between the parties under this clause 5.2(b), any party may
immediately submit the disagreement or dispute to an independent expert, whose
decision shall be final and binding on the parties. The independent expert
shall be an independent professional agreed between the Sponsor and the Agent
(acting on the instructions of




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	 	 	 	the Majority Lenders) or, failing such agreement, an independent
professional appointed by the President for the time being of the South
African Association of Consulting Engineers.






	 	5.3.	 	The Sponsor hereby indemnifies the Lenders and/or the Agent and/or the
Security Trustee in respect of all costs, losses and expenses which the Lenders and/or
the Agent and/or the Security Trustee may incur, whether or not damages for such
losses and expenses would be recoverable at law, which result to any extent from:






	 	(a)	 	funds not being available to make payment under clause
28.11.4 of the Concession Agreement as a result of prior payment having been
made under clause 28.11.3 of the Concession Agreement, on any one occasion the
obligation of the Sponsor under this sub-clause (a) not to exceed the amount
so paid under clause 28.11.3; and
	 
	 	(b)	 	any inability of the Borrower to insure as required under the
Concession Agreement which is attributable to Biwater Operations or any other
entity within the Biwater Group involved in the Project.






	 	 	 	This clause 5 may be invoked by the Agent at such times and with such frequency as
it deems fit.






	6	 	SHAREHOLDING IN AND DIRECTORS OF THE BORROWER






	 	6.1	 	Subject to clause 11.1 (x) of the Facility Agreement the Sponsor agrees and
undertakes with and to the Agent, for itself and as agent for the Lenders and with and
to the Security Trustee that until all of the Borrower’s financial obligations under
the Facility Agreement have been fulfilled, Biwater Operations will at all times hold
no less than 26,0% (twenty-six comma nought per cent) of the issued ordinary share
capital in the Borrower and that until the Practical Completion Date, the Biwater
Group and MJI (or any successor to MJI) will on aggregate at all times hold no less
than 44,0% (forty-four comma nought per cent) of the




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	 	 	 	issued ordinary share capital in the Borrower, unless the Sivukile Put-Call Option
shall have been fully exercised in which case the Biwater Group and MJI (or any
successor to MJI) will, on aggregate, hold no less than 26,0% (twenty-six comma
nought per cent) of the issued ordinary share capital in the Borrower.






	 	6.2	 	Subject to clause 6.1 above, the Sponsor agrees and undertakes with and to
the Agent, for itself and as agent for the Lenders and with and to the Security
Trustee that until all of the Borrower’s financial obligations under the Facility
Agreement have been fulfilled, the Biwater Group and MJI (or any successor to MJI)
shall not, except for transfers within the Biwater Group and MJI, sell or otherwise
dispose of their shares in the Borrower without the prior written consent of the
Majority Lenders which consent shall not be unreasonably withheld and/or delayed.
	 
	 	6.3	 	The Sponsor agrees and undertakes with and to the Agent, for itself and as
agent for the Lenders and with and to the Security Trustee that until all of the
Borrower’s financial obligations under the Facility Agreement have been fulfilled, the
Biwater Group will be entitled, unless otherwise provided for in the Shareholders’
Agreement, to appoint not less than (5/7) five sevenths of the members of the
supervisory board of the Borrower and all of the members of the management board of
the Borrower and that no lawful quorum of the Borrower’s supervisory board and/or
management board (as the case may be) will be possible unless such members are
present.
	 
	 	6.4	 	The Sponsor agrees and undertakes with and to the Agent, for itself and as
agent for the Lenders and with and to the Security Trustee that to the extent it has
direct or indirect voting or other rights or powers of control over the Borrower,
Biwater Operations or any party to any Security Document or to any of the Project
Documents (including the Sponsor itself) it shall use and exercise its voting and
other rights to the extent possible to ensure that those companies comply with and
exercise their rights to the extent possible in respect of the provisions of those
various agreements and other documents to which they are parties.




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	 	6.5	 	The Sponsor agrees and undertakes with and to the Agent, for itself and as
agent for the Lenders and with and to the Security Trustee that it will ensure that
any member of the Biwater Group which has direct or indirect voting or other rights or
powers of control over the Borrower, Biwater Operations or any party to any Security
Document or to any of the Project Documents (including the Sponsor itself) shall use
and exercise their voting and other rights in respect of all of those companies to
ensure that those companies comply with and exercise their rights in respect of the
provisions of those various agreements and other documents to which they are parties.






	7.	 	BIWATER CAPITAL BV and BIWATER CAPITAL INVESTMENTS LIMITED TO REMAIN AFFILIATES
	 
	 	 	Subject to clause 11.1(x) of the Facility Agreement, the Sponsor agrees and undertakes with
and to the Agent, for itself and as agent for the Lenders and with and to the Security
Trustee that, until all of the Borrower’s financial obligations under the Facility
Agreement have been fulfilled, Biwater Plc will retain at least 30,0% (thirty comma nought
per cent) direct ownership of Biwater Capital BV and at least 30,0% (thirty comma nought
per cent) direct or indirect ownership of Biwater Capital Investments Limited, unless the
Majority Lenders otherwise consent, which consent shall not be unreasonably withheld or
delayed.
	 
	8	 	NO AMENDMENTS
	 
	 	 	Until all of the Borrower’s financial obligations under the Facility Agreement have been
fulfilled, the Sponsor agrees and undertakes with and to the Agent, for itself and as agent
for the Lenders and with and to the Security Trustee that neither it nor any of the
companies in the Biwater Group shall (except to the extent approved in writing by the Agent
acting on the instructions of the Majority Lenders) propose any resolution for, or agree to
any amendment to, variation, modification or waiver of or cancellation, suspension,
termination or revocation of :




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	 	8.1	 	any of the material terms or conditions of any of the Project Documents or
the Facility Agreement or any of the other agreements referred to in clause 4 to which
it or any of those companies is a party; or
	 
	 	8.2	 	the material terms of the Memorandum and Articles of Association of the
Borrower or of Biwater Operations.






	9	 	SPONSOR’S OBLIGATIONS






	 	9.1	 	Any certificate or determination of the Agent or the Security Trustee as to
any amount payable or to be contributed by the Sponsor under this Agreement shall, in
the absence of manifest error, be prima facie evidence of that amount.
	 
	 	9.2	 	Until all of the Borrower’s financial obligations under the Facility
Agreement have been fulfilled, the Sponsor shall use all reasonable endeavours to
remedy any illegality, invalidity, lack of bindingness and/or unenforceability
concerning this Agreement, the Facility Agreement, any Security Document, the
Concession Agreement and/or any other Project Document.
	 
	 	9.3	 	Until all of the Borrower’s financial obligations under the Facility
Agreement have been fulfilled, the Sponsor shall use its best endeavours to perform
all further acts as may be reasonably required or necessary to implement and/or give
effect to this Agreement, the Facility Agreement, the Security Documents, the
Concession Agreement and any other Project Document but, without prejudice to or
limitation of its other obligations hereunder, the Sponsor shall not be obliged to
contribute any amounts in excess of its existing liabilities under this Agreement as a
result of its undertaking in this clause 9.3.
	 
	 	9.4	 	Save as otherwise provided hereunder, this Agreement shall:






	 	(a)	 	be a continuing security until the Sponsor shall have fully
performed all of its obligations under this Agreement;




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	 	(b)	 	be in addition to the Security Documents or any present or
future Collateral Instrument or other agreement, right or remedy held by or
available to the Lenders or any of them or the Agent or the Security Trustee;
and
	 
	 	(c)	 	not be in any way prejudiced or affected by the existence of
the Security Documents or any such Collateral Instrument or other agreement or
any other rights or remedies or by the same becoming wholly or in part void,
voidable or unenforceable on any ground whatsoever or by the Lenders or the
Agent or the Security Trustee dealing with, exchanging, varying or failing to
perfect or enforce any of the same or giving time for payment or indulgence or
compounding with any other Person liable.






	 	9.5	 	The liability of the Sponsor shall not be affected nor shall this Agreement
be discharged or reduced by reason of:






	 	(a)	 	the Incapacity or any change in the name, style or
constitution of the Borrower or any other Person liable;
	 
	 	(b)	 	the Agent or any of the Lenders or the Security Trustee
granting any time, indulgence or concession to, or compounding with,
discharging, releasing or varying the liability of, the Borrower (whether as a
result of discussions with the Council, in the event that the Council wishes
to discuss any Event of Default with the Lenders, the Agent, the Security
Trustee and/or the Borrower or otherwise) or any other Person liable or
renewing, determining, varying or increasing any accommodation, facility or
transaction or otherwise dealing with the same in any manner whatsoever or
concurring in, accepting or varying any compromise, arrangement or settlement
or omitting to claim or enforce payment from the Borrower or any other Person
liable; or
	 
	 	(c)	 	any act or omission which would not have discharged or
affected the liability of the Sponsor had it been a principal debtor instead
of a




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	 	 	 	guarantor or by anything done or omitted which but for this provision
might operate to exonerate the Sponsor.






	 	9.6	 	Any release, discharge or settlement between the Sponsor and the Security
Trustee or the Agent or any of the Lenders shall be conditional upon no security,
disposition or payment to the Security Trustee or the Agent or any of the Lenders by
the Borrower or any other Person liable being void, set aside or ordered to be
refunded pursuant to any enactment or law relating to bankruptcy, liquidation,
administration or insolvency or for any other reason whatsoever and if such condition
shall not be fulfilled the Lenders, the Agent and the Security Trustee shall be
entitled to enforce this Agreement subsequently as if such release, discharge or
settlement had not occurred and any such payment had not been made.






	10	 	SUBORDINATED LIABILITIES






	 	10.1	 	Until all Indebtedness and Liabilities of the Borrower to the Lenders and the
Agent under the Facility Agreement and to the Security Trustee under the Principal
Indemnity (the “Senior Liabilities”) have been paid, discharged or satisfied in full
(and notwithstanding payment of a dividend in any liquidation or under any compromise
or arrangement):






	 	(a)	 	the Sponsor undertakes that without the prior written consent
of the Agent acting on the instructions of the Majority Lenders, it will not
and that it shall ensure that the Shareholders (excluding Sivukile for so long
as Sivukile is not a Sponsor) (or any one of them) will not: 






	 	(i)	 	exercise its rights of subrogation,
reimbursement and indemnity against the Borrower or any other Person
liable;
	 
	 	(ii)	 	except as otherwise provided in the
Facility Agreement, demand or accept repayment in whole or in part of
the Subordinated Liabilities or any Indebtedness now or hereafter due
to the




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	 	 	 	Sponsor from the Borrower or from any other Person liable
(including without limitation any fees or other remuneration for
services) or demand or accept any Collateral Instrument in respect
of the same or dispose of the same;






	 	(iii)	 	take any step to enforce any right against
the Borrower or any other Person liable in respect of any of the
Subordinated Liabilities;
	 
	 	(iv)	 	claim any set-off or counterclaim against
the Borrower or any other Person liable or claim or prove in
competition with the Agent or any of the Lenders or the Security
Trustee in the liquidation of the Borrower or any other Person liable
or have the benefit of, or share in, any payment from or composition
with, the Borrower or any other Person liable or any other Collateral
Instrument now or hereafter held by the Agent or any of the Lenders
or the Security Trustee for any Indebtedness or Liabilities of the
Borrower or any other Person liable but so that, if so directed by
the Agent, it will prove for whole or any part of its claim in the
liquidation of the Borrower on terms that the benefit of such proof
and of all money received by it in respect thereof shall be held in
trust for the Lenders and/or the Agent and/or the Security Trustee
and applied in or towards discharge of the Indebtedness and
Liabilities of the Borrower in such manner as the Agent shall deem
appropriate;
	 
	 	(v)	 	take any step or action which will result
in the Borrower creating any Encumbrance over all or part of its
present or future assets in breach of the Facility Agreement or which
will result in an Event of Default or Potential Event of Default by
the Borrower under the Facility Agreement; or




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	 	(vi)	 	take any step or action which will result
in the Borrower creating any Encumbrance over any right or asset in
respect of which security is granted to the Security Trustee.






	 	10.2	 	The Sponsor shall whenever the Agent so requests certify to the Agent the
balance owing to the Sponsor in the relevant Sponsor Subordinated Loan Account.
	 
	 	10.3	 	If the Borrower or any other Person liable is placed under judicial
management, wound-up or makes an arrangement in favour of creditors (other than the
Lenders) or if in any circumstances sums become payable or are paid to the Sponsor
which ought to have been paid to the Lenders or which the Sponsor is liable to pay to
the Lenders hereunder in or toward discharge of the Subordinated Liabilities, the
Sponsor agrees that if it receives any such sum, it will pay to the Agent for the
account of the Lenders or to the Security Trustee as the case may be, to be applied in
or towards discharge of the Senior Liabilities, an amount equal to that it receives in
respect of the Subordinated Liabilities (and pending such application shall hold the
same in trust for the Agent and the Lenders and the Security Trustee) to the extent
that the Sponsor shall not receive any payment for, repayment of or benefit in respect
of the Subordinated Liabilities until the Senior Liabilities shall have been paid or
discharged in full unless otherwise provided for in the Facility Agreement.
	 
	 	10.4	 	This clause 10 shall remain in force until the Senior Liabilities have been
paid or discharged in full or until determined by mutual consent in writing of all
parties to this Agreement and shall not be affected by variation to or extension of
the Facility Agreement or change in the nature of fluctuation in the amount of the
Subordinated Liabilities or the Senior Liabilities or by any change in the
constitution of the Borrower or in the name or style thereof or by the Agent or the
Lenders or the Security Trustee giving time for payment or indulgence or by the Agent
or the Lenders or the Security Trustee now or hereafter dealing with, exchanging,
releasing, modifying or abstaining from perfecting or enforcing any




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	 	 	 	of the Security Documents, any Collateral Instrument, other agreement or other
security or any rights which it may now or hereafter have or compounding with any
Person liable.






	 	10.5	 	If the Borrower is wound-up, whether provisionally or finally and whether
voluntarily or compulsorily, the Subordinated Liabilities and any other claim which
the Sponsor may have against the Borrower shall be and remain subordinated to the
claims of the Lenders and/or the Agent and/or the Security Trustee under the Facility
Agreement, any of the other Project Documents, the Security Documents and under this
Agreement and :






	 	(a)	 	the Agent is hereby irrevocably authorised for and on behalf
of the Sponsor to claim, enforce and prove for any of the claims so
subordinated and to receive all distributions applied in satisfaction of any
of those claims;
	 
	 	(b)	 	if and to the extent that the Agent is not entitled to do or
carry out any action referred to in clause 10.5 above, the Sponsor will do
and/or carry out such actions in good time and in accordance with the
directions of the Lenders;
	 
	 	(c)	 	to the extent that the Sponsor receives any distribution, in
cash or in kind, it will hold that distribution in trust for the Agent and
will on demand transfer it to the Agent for application to the Lenders and/or
the Security Trustee, as the case may be.






	11	 	REPRESENTATIONS AND WARRANTIES






	 	11.1	 	A Biwater Plc represents and warrants that:






	 	(a)	 	Biwater Plc, the Biwater Shareholders and BCIL are duly
incorporated and validly existing under the laws of their respective countries
of




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	 	 	 	incorporation as limited liability companies and have power to carry on
their respective business as they are now being conducted and to own their
respective property and other assets;






	 	(b)	 	Biwater Plc has power to execute, deliver and perform its
obligations under this Agreement; all necessary corporate, shareholder and
other action has been taken to authorise the execution, delivery and
performance of the same and no limitation on the powers of Biwater Plc to
borrow or give guarantees will be exceeded as a result of this Agreement;
	 
	 	(c)	 	this Agreement constitutes valid and legally binding
obligations of Biwater Plc enforceable in accordance with its terms;
	 
	 	(d)	 	the execution and delivery of, the performance of its
obligations under and compliance with the provisions of, this Agreement by
Biwater Plc will not (i) contravene any existing applicable law, statute, rule
or regulation or any judgement, decree or permit to which Biwater Plc is
subject, (ii) conflict with, or result in any breach of any of the terms of,
or constitute a default under, any agreement or other instrument to which
Biwater Plc is a party or is subject or by which it or any of its property is
bound (iii) contravene or conflict with any provision of Biwater Plc’s
Articles of Incorporation/By-laws/Statutes or (iv) result in the creation or
imposition of or oblige Biwater Plc or any of the Biwater Shareholders or BCIL
to create any Encumbrance on any of their undertakings, assets, rights or
revenues;
	 
	 	(e)	 	no litigation, arbitration or administration proceeding is
taking place, pending or, to the best of the knowledge and belief of the
officers of Biwater Plc or Biwater Plc itself, threatened against Biwater Plc
or any of the Biwater Shareholders or BCIL which could have a Material




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	 	 	 	Adverse Effect on the business, assets or financial condition of Biwater
Plc or any of the Biwater Shareholders or BCIL;






	 	(f)	 	the audited financial statements of Biwater Plc and the
audited consolidated financial statements of Biwater Plc and its Affiliated
Companies in respect of the financial year ended on 31 March 1999 as delivered
to the Agent have been prepared in accordance with generally accepted
accounting principles and practices in a form which have been consistently
applied and present fairly and accurately the financial position of Biwater
Plc and the consolidated financial position of Biwater Plc and its Affiliated
Companies respectively as at such date and the results of the operations of
Biwater Plc and its Affiliated Companies respectively for the financial year
ended on such date and, as at such date, neither Biwater Plc nor any of its
Affiliated Companies had any significant liabilities (contingent or otherwise)
which are not disclosed by, or reserved against in, such financial statements
and Biwater Plc did not have any unrealised or anticipated losses;
	 
	 	(g)	 	it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement that it or any
other instrument be notarised, filed, recorded, registered or enrolled in any
court, public office or elsewhere in the United Kingdom, the Netherlands or
South Africa or that any stamp, registration or similar tax or charge be paid
in the United Kingdom, the Netherlands or South Africa on or in relation to
this Agreement and this Agreement is in proper form for its enforcement in the
courts of the United Kingdom, the Netherlands or South Africa;
	 
	 	(h)	 	the choice by Biwater Plc of South African law to govern this
Agreement and the submission by Biwater Plc to the non-exclusive jurisdiction
of the South African courts as set forth in this Agreement are valid and
binding; and




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	 	(i)	 	neither Biwater Plc nor any of its assets is entitled to
immunity on the grounds of sovereignty or otherwise from any legal action or
proceeding (which shall include, without limitation, suit, attachment prior to
judgement, execution or other enforcement).






	 	11.1B 	 	In the event that Sivukile becomes a Sponsor, it shall be deemed to represent and warrant that:






	 	(a)	 	it is duly incorporated and validly existing under the laws
of South Africa as a limited liability company and has power to carry its
business as it is now being conducted and to own its property and other
assets;
	 
	 	(b)	 	it has power to execute, deliver and perform its obligations
under this Agreement; all necessary corporate, shareholder and other action
has been taken to authorise the execution, delivery and performance of the
same and no limitation on its powers to borrow or give guarantees will be
exceeded as a result of this Agreement;
	 
	 	(c)	 	this Agreement constitutes valid and legally binding
obligations of Sivukile enforceable in accordance with its terms;
	 
	 	(d)	 	the execution and delivery of, the performance of its
obligations under and compliance with the provisions of, this Agreement by
Sivukile will not (i) contravene any existing applicable law, statute, rule or
regulation or any judgement, decree or permit to which Sivukile is subject,
(ii) conflict with, or result in any breach of any of the terms of, or
constitute a default under, any agreement or other instrument to which
Sivukile is a party or is subject or by which it or any of its property is
bound (iii) contravene or conflict with any provision of Sivukile’s Articles
of Incorporation/By-laws/Statutes or (iv) result in the creation or imposition
of or oblige Sivukile to create any Encumbrance on any of its undertakings,
assets, rights or revenues;




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	 	(e)	 	no litigation, arbitration or administration proceeding is
taking place, pending or, to the best of the knowledge and belief of the
officers of Sivukile or Sivukile itself, threatened against the Sivukile which
could have a Material Adverse Effect on the business, assets or financial
condition of Sivukile;
	 
	 	(f)	 	the audited financial statements of Sivukile and the audited
consolidated financial statements of Sivukile and its Affiliated Companies in
respect of the financial year ended on 31 March 1999 as delivered to the Agent
have been prepared in accordance with generally accepted accounting principles
and practices in a form which have been consistently applied and present
fairly and accurately the financial position of Sivukile and the consolidated
financial position of Sivukile and its Affiliated Companies respectively as at
such date and the results of the operations of Sivukile and its Affiliated
Companies respectively for the financial year ended on such date and, as at
such date, neither Sivukile nor any of its Affiliated Companies had any
significant liabilities (contingent or otherwise) which are not disclosed by,
or reserved against in, such financial statements and Sivukile did not have
any unrealised or anticipated losses;
	 
	 	(g)	 	it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement that it or any
other instrument be notarised, filed, recorded, registered or enrolled in any
court, public office or elsewhere in South Africa or that any stamp,
registration or similar tax or charge be paid in South Africa on or in
relation to this Agreement and this Agreement is in proper form for its
enforcement in the courts of South Africa;
	 
	 	(h)	 	the choice by Sivukile of South African law to govern this
Agreement and the submission by Sivukile to the non-exclusive jurisdiction of
the




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	 	 	 	South African courts as set forth in this Agreement are valid and binding;
and






	 	(i)	 	neither Sivukile nor any of its assets is entitled to
immunity on the grounds of sovereignty or otherwise from any legal action or
proceeding (which shall include, without limitation, suit, attachment prior to
judgement, execution or other enforcement).






	 	11.2A 	 	Biwater Plc further represents and warrants that:






	 	(a)	 	there has been no material adverse change in the financial
position of Biwater Plc or the consolidated financial position of Biwater Plc
and its Affiliated Companies from that set forth in the financial statements
referred to in clause 11.1 A(f);
	 
	 	(b)	 	every consent, authorisation, licence or approval of, or
registration with or declaration to, governmental or public bodies or
authorities or courts required by Biwater Plc to authorise, or required by
Biwater Plc in connection with, the execution, delivery, validity,
enforceability or admissibility in evidence of this Agreement or the
performance by Biwater Plc of its obligations under this Agreement has been
obtained or made and is in full force and effect and there has been no default
in the observance of the conditions or restrictions (if any) imposed in, or in
connection with, any of the same;
	 
	 	(c)	 	the obligations of Biwater Plc under this Agreement are
direct, general and unconditional obligations of Biwater Plc and rank at least
pari passu with all other present and future unsecured and unsubordinated
Indebtedness of Biwater Plc with the exception of any obligations which are
mandatorily preferred by law and not by contract;
	 
	 	(d)	 	Biwater Plc is not (nor would with the giving of notice or
lapse of time or the satisfaction of any other condition or any combination
thereof be)




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	 	 	 	in breach of or in default under any agreement relating to Indebtedness or
to which it is a party or by which it may be bound which could have a
Material Adverse Effect on the business, assets or financial condition of
Biwater Plc; and






	 	(e)	 	any information, exhibits and reports furnished by Biwater
Plc to the Agent and/or the Lenders in connection therewith or with the
negotiation, preparation and/or enforcement of this Agreement is true and
accurate in all material respects and not misleading, does not omit material
facts and all reasonable enquiries have been made to verify the facts and
statements contained therein; there are no other facts the omission of which
would make any fact or statement therein misleading.






	 	11.2 B	 	In the event that Sivukile becomes a Sponsor, it shall be deemed to further represent and warrant that:






	 	(a)	 	there has been no material adverse change in the financial
position of Sivukile or the consolidated financial position of Sivukile and
its Affiliated Companies from that set forth in the financial statements
referred to in clause 11.1B(f);
	 
	 	(b)	 	every consent, authorisation, licence or approval of, or
registration with or declaration to, governmental or public bodies or
authorities or courts required by Sivukile to authorise, or required by
Sivukile in connection with, the execution, delivery, validity, enforceability
or admissibility in evidence of this Agreement or the performance by Sivukile
of its obligations under this Agreement has been obtained or made and is in
full force and effect and there has been no default in the observance of the
conditions or restrictions (if any) imposed in, or in connection with, any of
the same;
	 
	 	(c)	 	the obligations of Sivukile under this Agreement are direct,
general and unconditional obligations of Sivukile and rank at least pari passu
with all




- 167 -









 






	 	 	 	other present and future unsecured and unsubordinated Indebtedness of
Sivukile with the exception of any obligations which are mandatorily
preferred by law and not by contract;






	 	(d)	 	Sivukile is not (nor would with the giving of notice or lapse
of time or the satisfaction of any other condition or any combination thereof
be) in breach of or in default under any agreement relating to Indebtedness or
to which it is a party or by which it may be bound which could have a Material
Adverse Effect on the business, assets or financial condition of Sivukile; and
	 
	 	(e)	 	any information, exhibits and reports furnished by Sivukile
to the Agent and/or the Lenders in connection therewith or with the
negotiation, preparation and/or enforcement of this Agreement is true and
accurate in all material respects and not misleading, does not omit material
facts and all reasonable enquiries have been made to verify the facts and
statements contained therein; there are no other facts the omission of which
would make any fact or statement therein misleading.






	 	11.3	 	The representations and warranties in clause 11.1 (and so that for this
purpose the representation and warranty in clause 11.1(A and B)(f) shall refer to the
then latest audited financial statements delivered to the Agent under clause 11.1) and
in clause 11.2(A and B) (a), (b), (c) and (d) shall be deemed to be repeated on and as
of each day upon which the Borrower is deemed to repeat its representations and
warranties under clause 8 of the Facility Agreement as if made with reference to the
facts and circumstances existing on each such day.






	12	 	UNDERTAKINGS






	 	12.1	 	The Sponsor undertakes that, from the date of this Agreement and so long as
any moneys are owing under the Facility Agreement, it will:




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	 	(a)	 	promptly inform the Agent and the Security Trustee of any
occurrence having a Material Adverse Effect of which it becomes aware;
	 
	 	(b)	 	without prejudice to clause 11.2, obtain or cause to be
obtained, maintain in full force and effect and comply in all material
respects with the conditions and restrictions (if any) imposed in, or in
connection with, every consent, authorisation, licence or approval of
governmental or public bodies or authorities or courts and do, or cause to be
done, all other acts and things which may from time to time be necessary under
applicable law for the continued due performance of all its obligations under
this Agreement;
	 
	 	(c)	 	ensure that its obligations under this Agreement shall,
without prejudice to the provisions of clause 11.2, at all times rank at least
pari passu with all its other present and future unsecured and unsubordinated
Indebtedness with the exception of any obligations which are mandatorily
preferred by law and not by contract;
	 
	 	(d)	 	prepare financial statements and consolidated financial
statements in accordance with generally accepted accounting principles in
effect in the country in which the company is domiciled, consistently applied
in respect of each financial year and cause the same to be reported on by its
auditors and prepare unaudited financial statements and abridged consolidated
financial statements in respect of each half-year on the same basis as the
annual statements and deliver sufficient copies of the same to the Agent for
distribution to all the Lenders and the Security Trustee as soon as
practicable but not later than 180 (one hundred and eighty) days (in the case
of audited financial statements) or 90 (ninety) days (in the case of unaudited
financial statements) after the end of the financial period to which they
relate; and




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	 	(e)	 	provide the Agent with such financial and other information
concerning the Sponsor, its Affiliated Companies and its affairs as the Agent
or any Lender (acting through the Agent) or the Security Trustee may from time
to time reasonably require.






	13	 	BENEFIT OF THIS AGREEMENT AND CONFIDENTIAL INFORMATION






	 	13.1	 	This Agreement shall be binding upon the Sponsor and its successors in title
and shall enure for the benefit of Agent, for the benefit of itself and each of the
Lenders and of the Security Trustee and their respective successors in title and (in
the case of the Lenders) their Assignees and Substitutes. The Sponsor expressly
acknowledges and accepts the provisions of clause 15 of the Facility Agreement and
agrees that any Person in favour of whom an assignment, cession or a transfer is made
in accordance with such clause shall be entitled to the benefit of this Agreement.
	 
	 	13.2	 	For the avoidance of doubt and without prejudice to the provisions of clause
13.1, this Agreement shall remain binding on the Sponsor notwithstanding any change in
the constitution of the Lenders or any of them or the Agent or Security Trustee or
their or its absorption in, or amalgamation with, or the acquisition of all or part of
their or its undertaking or assets by, any other Person, or any reconstruction or
reorganisation of any kind, to the intent that this Agreement shall remain valid and
effective in all respects in favour of any assignee, transferee or other successor in
tide of the Lenders, the Agent and the Security Trustee in the same manner as if such
assignee, transferee or other successor in title had been named in this Agreement as a
party instead of, or in addition to, the relevant Lender or the Agent, as the case may
be and save for the representations and warranties in clause 11 above, Biwater Plc,
Sivukile and any Sponsor shall be jointly and severally liable hereunder.
	 
	 	13.3	 	Except as otherwise approved by the Agent, the Sponsor may not cede, assign
or transfer any of its rights or obligations under this Agreement.




- 170 -









 












	 	13.4	 	Subject to clause 13.5 below, any Lender or the Agent or the Security Trustee
may disclose to a prospective cessionary, assignee or transferee or to any other
Person who may propose entering into contractual relations with such Lender or the
Agent or the Security Trustee in relation to the Agreement (as defined in the Facility
Agreement) such information about the Sponsor as such Lender or the Agent or the
Security Trustee shall consider appropriate.
	 
	 	13.5 (a)	 	Each of the Borrower, Biwater Plc, Sivukile, the Lenders, the Agent and the
Security Trustee agrees, for itself and its respective directors, officers, employees,
servants and agents, to keep confidential and not to disclose to any person (save as
provided for in this Agreement) any confidential or proprietary information
(including, without limitation, the Project Documents, Security Documents and all
related documents, the Base Case Model, any Project Budget, computer, records,
specifications, formulae, evaluations, methods, processes, technical descriptions,
reports and other data, records, drawings and information) provided to or arising or
acquired by it pursuant to the teens or performance of this Agreement or any other
Project Documents or Security Documents (including without limitation any such
documents or information supplied in the course of proceedings under the disputes
resolution procedure under any Project Documents) together the “Confidential
Information”).






	 	(b)	 	Exceptions
	 
	 	 	 	Notwithstanding clause 13.3(a), the Borrower, Biwater Plc, Sivukile (the
Borrower, Biwater Plc and Sivukile or any of them hereafter referred to in
this clause as the “Borrowing Parties”), the Lenders, the Agent and the
Security Trustee (the Lenders, the Agent and the Security Trustee or any
of them hereinafter in this clause referred to as the “Lending Parties”,
as the context requires), shall be entitled to disclose the whole or any
part of the Confidential Information:




- 171 -









 












	 	(i)	 	to any Lender, Agent or Security Trustee,
Borrower, Sponsor, Sivukile or to their directors, officers,
employees, servants, subcontractors, agents, auditors or professional
advisers to the extent necessary to enable it or them to perform (or
to cause to be performed) or to enforce any of its or their rights or
obligations under any of the Project Documents, the Security
Documents, this Facility Agreement and in respect of the Lending
Parties all related documents or (as the case may be) to assess
whether or not to become a Lender, Agent and/or Security Trustee;
	 
	 	(ii)	 	when required to do so by law or regulation
by or pursuant to the rules or any order having the force of law of
any court, association or agency including without limitation the
London Stock Exchange and/or the Johannesburg Stock Exchange or any
successors thereof or other agency of competent jurisdiction or any
governmental agency;
	 
	 	(iii)	 	to the extent that the Confidential
Information has, except as a result of a breach of confidentiality,
become publicly available or generally known to the public at the
time of such disclosure;
	 
	 	(iv)	 	to the extent that the Confidential
Information is already lawfully in the public domain and/or lawfully
in the possession of the recipient or lawfully known to him prior to
such disclosure; or
	 
	 	(v)	 	subject to the consent of the Borrower
acting on the advice of the Borrowing Parties in the event that
disclosure is by the Lending Parties and subject to the consent of
the Agent (acting on the advice of the Lenders) in the event that
disclosure is by the Borrowing Parties, such consent in either case
not to be unreasonably withheld and/or delayed, to the extent that it
has




- 172 -









 






	 	 	 	acquired the Confidential Information from a third party who is
not in breach of any obligation as to confidentiality to the other
party;






	 	(vi)	 	to the extent permitted by any of the
Project Documents, Security Documents, Facility Agreement or any
related documents; or
	 
	 	(vii)	 	subject to the consent of the Borrower
acting on the advice of the Borrowing Parties in the event that
disclosure is by the Lending Parties and subject to the consent of
the Agent (acting on the advice of the Lenders) in the event that
disclosure is by the Borrowing Parties such consent in either case
not to be unreasonably withheld and/or delayed to the extent that any
of the parties wishes to use any non-commercially sensitive
Confidential Information for the purposes of marketing and/or
promotion of its business activities.






	 	(c)	 	Third Parties
	 
	 	 	 	If requested by any party, the party to whom a request is made (the
“Disclosing Party”) shall, if it is reasonable so to do, and without
prejudice to its rights and obligations hereunder, use reasonable
endeavours to obtain from any third party to whom the Disclosing Party
intends to disclose Confidential Information, an undertaking in or
substantially in the form of this clause 13.5 not to disclose Confidential
Information to any other person.
	 
	 	(d)	 	Survival
	 
	 	 	 	The terms of this clause 13.5, shall remain in force and survive the
termination, cancellation, rescission or acceleration or any other
provisions which ends and/or purports to end in whole or in part the




- 173 -









 






	 	 	 	other rights and obligations of the parties to each other under this
Agreement.






	 	(e)	 	Remedies
	 
	 	 	 	Without prejudice to any other rights and remedies that the other party
would have, each of the parties agrees that damages would not be an
adequate remedy for any breach of this clause 13.5 and that the other
party shall be entitled to the remedies of interdict, specific performance
and/or other equitable relief for any threatened or actual breach of this
clause 13.5 and each party hereby indemnifies the other against any cost,
expense, loss or damage incurred or suffered by the other party as a
result of a breach of this clause 13.5.






	14	 	NOTICES AND OTHER MATTERS






	 	14.1	 	Every notice, request, demand or other communication under this Agreement
shall:






	 	(a)	 	be in writing delivered personally or sent by registered or
certified mail, return receipt requested, or sent by facsimile followed
promptly by the original delivered by hand or registered or certified mail,
return receipt requested;
	 
	 	(b)	 	unless received earlier, be deemed to have been received,
subject as otherwise provided in this Agreement, in the case of a letter when
delivered personally or 7 (seven) days after it has been put into the post
(provided certified or registered post) in South Africa and 10 (ten) days
after it has been put in the post in the United Kingdom or the Netherlands;
and
	 
	 	(c)	 	be sent:






	 	(i)	 	to Biwater Plc at:




- 174 -









 






	 	 	 	Biwater House

Station Approach

Dorking, Surrey RH4 1TZ

England

Facsimile: 0044 1306 885233


Attention: The Company Secretary
	 
	 	(ii)	 	to the Borrower at:


16 Branders Street

Nelspruit, 1200

Facsimile: (013) 755-2618


Attention: The Managing Director
	 
	 	(iii)	 	to each Lender at its address specified in
schedule 1 of the Facility Agreement or in any relevant Substitution
Certificate;
	 
	 	(iv)	 	to DBSA at:


1258 Lever Road

Headway Hill

Midrand

Facsimile: (011) 313-3629


Attention: Head: Private Sector Investments Unit
	 
	 	(v)	 	to each other Lender at the address
notified by such Lender to the Borrower,
	 
	 	(vi)	 	to the Security Trustee at:


3rd Floor

1 Newtown Avenue

Killarney, 2193

Facsimile: (011) 480-1774


Attention: Head: Project Management




- 175 -









 






	 	 	 	(vii) to Sivukile at:


6371 Ward 5

KaNwamazane, 1214

Mpumalanga Province

Facsimile: (013) 794-1900


Attention: Dr P.M.H. Maduna






	 	 	 	or to such other address as is notified by the party concerned to the
other parties to this Agreement.






	 	14.2	 	No failure or delay on the part of any party to this Agreement to exercise
any power, right or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise by any party of any power, right or remedy
preclude any other or further exercise thereof or the exercise of any other power,
right or remedy. The remedies provided in this Agreement are cumulative and are not
exclusive of any remedies provided by law.
	 
	 	14.3	 	All certificates, instruments and other documents to be delivered under or
supplied in connection with this Agreement shall be in the English language or shall
be accompanied by a certified English translation upon which the parties shall be
entitled to rely.
	 
	 	14.4	 	The Sponsor agrees to be bound by this Agreement notwithstanding that any
other Person which the parties intend shall execute or be bound by any other guarantee
or assurance under or pursuant to the Facility Agreement may not do so or may not be
effectually bound and notwithstanding that such other guarantee or assurance may be
determined or be or become invalid or unenforceable against any other Person, whether
or not the deficiency is known to the Lenders or any of them or the Agent or the
Security Trustee.






	15	 	LAW AND JURISDICTION




- 176 -









 














	 	15.1	 	This Agreement is governed by and shall be construed in accordance with the
law of South Africa.
	 
	 	15.2	 	The Sponsor agrees for the benefit of the Lenders and the Agent and the
Security Trustee that any legal action or proceedings arising out of or in connection
with this Agreement instituted against the Sponsor or any of its assets may be brought
in the South African courts, irrevocably and unconditionally submits to the
jurisdiction of such courts and irrevocably designates, appoints and empowers
Werksmans Attorneys (c/o Companies Department at present of West Wing, Werksmans
Chambers, 22 Girton Road, Parktown, Johannesburg, 2193, to receive for it and on its
behalf, service of process issued out of the South African courts in any such legal
action or proceedings. The submission to such jurisdiction shall not (and shall not be
construed so as to) limit the right of the Agent or the Lenders or the Security
Trustee to take proceedings against the Sponsor in whatsoever jurisdictions shall to
it or them seem fit, nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction, whether
concurrently or not.
	 
	 	15.3	 	The Sponsor agrees that any legal action or proceedings arising out of or in
connection with this Agreement instituted by the Sponsor against the Lenders or any of
them or the Agency or the Security Trustee shall be brought exclusively in the South
African courts save where the proceedings have been brought against the Sponsor in
another jurisdiction pursuant to clause 15.2 and hereby irrevocably and
unconditionally submits to the jurisdiction of such courts and irrevocably designates,
appoints and empowers Werksmans Attorneys at present of West Wing, Werksmans Chambers,
22 Girton Road, Parktown, Johannesburg, 2193, to receive for it and on its behalf,
service of process issued out of the South African courts in any such legal action or
proceedings.




IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on
the date first above written.




- 177 -









 







THUS DONE
AND EXECUTED at
                     on                      2000




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For and on behalf of
	 
	 	 	 	 	 	 	 	 
	As Witnesses:	 	 	 	BIWATER PLC
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 
	1.
	 	 	 	 	 	 	 	 
	 	Name:

	 	 	 	 	 	 
	 	 	 	 	 	 	 
	2.
	 	 	 	 	 	 	 	 
	 	Name

	 	 
	 	 

	 	 
	 	 	 	 	who warrants his/her authority hereto.





THUS DONE
AND EXECUTED at
                    
on                      2000




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For and on behalf of
	 
	 	 	 	 	 	 	 	 
	As Witnesses:	 	 	 	THE GREATER NELSPRUIT UTILITY COMPANY (PROPRIETARY) LIMITED
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 
	 
	 	 	 	 	 	 	 	 
	1.

	 	 

	 	 	 	 	 	 
	Name:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2.

	 	 

	 	 
	 	 

	 	 
	Name	 	 	 	who warrants his/her authority hereto.






- 178 -









 




THUS DONE
AND EXECUTED at
                    
on                      2000




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For and on behalf of
	 
	 	 	 	 	 	 	 	 
	As Witnesses:	 	 	 	SIVUKILE INVESTMENTS (PTY) LIMITED
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 
	 
	 	 	 	 	 	 	 	 
	1.

	 	 

	 	 	 	 	 	 
	Name:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2.

	 	 

	 	 
	 	 

	 	 
	Name	 	 	 	who warrants his/her authority hereto.





THUS DONE
AND EXECUTED at
                     on                      2000




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For and on behalf of
	 
	 	 	 	 	 	 	 	 
	As Witnesses:	 	 	 	THE DEVELOPMENT BANK OF SOUTHERN AFRICA LIMITED, as a Lender
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 
	 
	 	 	 	 	 	 	 	 
	1.

	 	 

	 	 	 	 	 	 
	Name:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2.

	 	 

	 	 
	 	 

	 	 
	Name	 	 	 	who warrants his/her authority hereto.





THUS DONE
AND EXECUTED at
                     on                      2000




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For and on behalf of
	 
	 	 	 	 	 	 	 	 
	As Witnesses:	 	 	 	NEDCOR INVESTMENT BANK LIMITED
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 
	 
	 	 	 	 	 	 	 	 
	1.

	 	 

	 	 	 	 	 	 
	Name:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2.

	 	 

	 	 
	 	 

	 	 
	Name	 	 	 	who warrants his/her authority hereto.






- 179 -









 





SCHEDULE 6

OWNERSHIP OBLIGATION



It shall be a condition precedent of any Advance that, as from the date of this Agreement and so
long as any moneys are owing under this Agreement:





	(a)	 	subject to sub-paragraph (h) below, of this schedule 6, Biwater Operations (Proprietary)
Limited shall remain as the beneficial owner of 26,0% (twenty-six comma nought per cent) of
the ordinary issued share capital of the Borrower but subject to the rights of the Creditor
under the Golden Share Agreement;
	 
	(b)	 	all the Shareholders are fully paid-up beneficial owners of the issued share capital of the
Borrower pursuant to the terms of the Shareholders’ Agreement;
	 
	(c)	 	all agreed and necessary (as determined by the Majority Lenders) Project Equity has been paid
prior to any Advance by the Lenders which Project Equity shall, in respect of each Advance, be
not less than 33,3% (thirty-three comma three per cent) of the amount of each Advance and in
any event the aggregate amount of Project Equity shall, as at the Final Drawdown Date, be not
less than 33,3% (thirty-three comma three per cent) of the aggregate of all Advances under the
Facilities;






	 	(d)	 	(i) subject to clause 11.1(x) of the Facility Agreement, Biwater Plc retains at least 30,0%
(thirty comma nought per cent) direct ownership (unless otherwise agreed with the Lenders) of
the ordinary issued share capital of Biwater Capital BV and at least 30,0% (thirty comma
nought per cent) direct or indirect ownership of the ordinary issued share capital of Biwater
Capital Investments Limited, unless the Majority Lenders otherwise consent; and
	 
	 	(ii)	 	Biwater Operations remains a 100,0% (one hundred comma nought per cent)
subsidiary of Biwater Capital BV;






	(e)	 	no material breach of the Shareholders’ Agreement shall have been committed or be continuing;




- 180 -









 












	(f)	 	a technical support agreement between the Borrower, the Operator and Biwater Capital
Investments Limited (or other entity within the Biwater Group) approved by the Lenders shall
be in existence and valid and binding;
	 
	(g)	 	performance bonds required under the Concession Agreement, the Operation and Maintenance
Agreement and the Design and Construction Contracts, approved by the Lenders, to secure
respectively each of the obligations of the Borrower, Operator and Contractor shall be in
existence and valid and binding;
	 
	(h)	 	except for:






	 	(i)	 	the exercise of the Sivukile Put-Call, Option;
	 
	 	(ii)	 	the right of MJI to freely transfer its shares to any entity within the
Biwater Group;
	 
	 	(iii)	 	the right of Shareholders to transfer shares necessary for the employee
share incentive scheme up to a maximum of 5,0% (five comma nought per cent) of the
total issued ordinary shares of the Borrower; or
	 
	 	(iv)	 	subject to clause 11.1(x) of the Facility Agreement, the right of companies
of the Biwater Group to effect transfers of shares between themselves,






	 	 	any transfer of shares by any of the Shareholders or listing or issuance of shares by the
Borrower shall require the written consent of the Agent, acting on the advice of the
Majority Lenders;
	 
	(i)	 	subject to the terms of the Project Documents, an employee share incentive scheme within 24
(twenty-four) Months of the Effective Agreement Date in accordance with the Project Documents
enabling designated employees of the Borrower to acquire, should they so wish not less than
5,0% (five comma nought per cent) of the ordinary shares of the Borrower, shall be
established; and




- 181 -









 






	(j)	 	the Sponsor shall have procured that the Shareholder Subscription Guarantees satisfactory to
the Majority Lenders are granted in respect of the obligations of the Shareholders under the
Shareholder Subscription Agreements.




- 182 -









 











SCHEDULE 7

ELIGIBLE COSTS



Eligible Costs means:





	a)	 	Design and construction costs as provided for under the Design and Construction Contracts
both before and after the date of this Agreement;
	 
	b)	 	Initial Development Cost Fees;
	 
	c)	 	stamp duty and registration fees properly paid or payable both before and after the date of
this Agreement in respect of the Project;
	 
	d)	 	Value Added Tax properly paid or payable both before and after the date of this Agreement in
respect of the supply of goods and the rendering of services in connection with paragraph (a)
above;
	 
	e)	 	interest payments to the extent provided for in the Base Case Model including, without
limitation, those payable in the manner provided for under clause 4.3;
	 
	f)	 	money paid or payable by the Borrower under any interest rate swap or other interest hedging
agreements entered into by the Borrower at the request of the Lenders in accordance with the
terms of this Agreement; and
	 
	g)	 	all other items of expenditure whatsoever under a Drawdown Notice pursuant to the Drawdown
Schedule, whether of a capital or revenue nature, which the Majority Lenders on the advice of
the Lenders’ Technical Adviser may approve as having been reasonably and necessarily incurred
in or about, or in contemplation of, or in pursuance of, or in any way relating to the
Project.




- 183 -









 











SCHEDULE 8

RATIO LIMITS




	 	 	 	 	 
	Definitions:
	 	 	 	 
	 
	 	 	 	 
	“Debt-Equity Ration”	 	at any time, the ratio of A:B where:
	 
	 	 	 	 
	 

	 	A.
	 	is the Loan; and
	 
	 	 	 	 
	 

	 	B.
	 	is Project Equity;
	 
	 	 	 	 
	“Discount Factor”	 	the factor shown in the Base Case Model and based on the
Discount Rate which is to be applied, in any calendar
year, to the Net Cash Flow in such calendar year or part
thereof in order to discount such Net Cash Flow to a
given date;
	 
	 	 	 	 
	“Discount Rate”	 	the weighted average of the interest rates applying on
all Facilities in the name of the Borrower in any given
calendar year, such average being weighted by the
outstandings (ie the contribution) of each Facility at
the beginning of such calendar year;
	 
	 	 	 	 
	“Net Cash Flow”	 	in respect of any period, (“the Period”) the Project
Revenues estimated as likely to arise or which is
received during the Period, less the Project Costs
(excluding non-cash items and other than the aggregate
of the expenses referred to in paragraphs (D) through
(H) of clause 9.3(e) of the Facility Agreement)
estimated as likely to be incurred or which is incurred
during the Period;
	 
	 	 	 	 
	“Ratios”	 	Historical Annual Debt Service Cover Ratio - means, in
respect of the 12 (twelve) Month period prior to any
Ratio Test Date, the ratio of (a) Net Cash Flow for such
period to (b) the aggregate of all regularly scheduled
payments of principal,






- 184 -









 






	 	 	 	 	 
	 	 	interest and other financing costs due (whether or not paid) under the
Facilities in respect of the relevant 12 (twelve) Month period;
	 
	 	 	 	 
	 	 	Forecast Annual Debt Service Cover Ratio - means, in
respect of the 12 (twelve) Month period after any
Ratio Test Date, the ratio of (a) Net Cash Flow
projected for such period to (b) the aggregate of all
regularly scheduled payments of principal, interest
and any fees and other financing costs due (or as the
case may be, projected to be due) under the
Facilities;
	 
	 	 	 	 
	 	 	Project Life Cover Ratio - means, in respect of each
Ratio Test Date, the ratio of (a) the Net Cash Flow
discounted back to the relevant Ratio Test Date at
the Discount Rate from the relevant date being 360
(three-hundred-and-sixty) Months from 1 November
1999, or if the Concession Period has been extended,
to the end of such extended Concession Period before
any amounts transferred to the Debt Service Reserve
Account to (b) the Loan at the relevant Ratio Test
Date or, as the case may be, forecast as likely to be
outstanding under the Facilities;
	 
	 	 	 	 
	 	 	Loan Life Cover Ratio - means, in respect of each
Ratio Test Date, the ratio of (a) the Net Cash Flow
discounted back to the relevant Ratio Test Date at
the Discount Rate from the relevant date to the Final
Repayment Date of the Facilities before any amounts
transferred to or from the Debt Service Reserve
Account to (b) the Loan at the relevant Ratio Test
Date or as the case may be, the amount of the Loan
forecast as likely to be outstanding under the
Facilities;
	 
	 	 	 	 
	“Ratio Test Date”	 	annually on receipt by the Agent of audited financial
information and annually on receipt by the Agent of
the Project Budget, Five Year Plan and Operations
Management Plan;






- 185 -









 





The Borrower hereby undertakes and such undertaking shall be referred to as the “Baseline Ratio
Undertaking” that the:





	•	 	Forecast Annual Debt Service Cover Ratio shall not be less than 1,15:1;
	 
	•	 	Project Life Cover Ratio shall not be less than 3:1;
	 
	•	 	Historical Annual Debt Service Cover Ratio shall not be less than 1,15:1; and the
	 
	•	 	Loan Life Cover Ratio shall not be less than 1,8:1.




For the purpose of calculating any of the above ratios the Agent will make any necessary forecast
in accordance with assumptions based on the Base Case Model pursuant to the instructions of the
Majority Lenders.




- 186 -









 








SCHEDULE 9

REPAYMENT INSTALMENTS AND INTEREST

PART A

DBSA LOAN FACILITY




	 	 	 	 	 	 	 
	1	 	Lender	 	DBSA.
	 
	 	 	 	 	 	 
	2	 	Committed Amount	 	R48,5 million
	 
	 	 	 	 	 	 
	3	 	Term of the Facility	 	180 (one-hundred-and-eighty) Months from the First Drawdown Date
	 
	 	 	 	 	 	 
	4	 	Margin	 	3,5% (three comma five per cent) NACQ inclusive of all costs until the earlier of:
	 
	 	 	 	 	 	 
	 

	 	 	 	(i)
	 	the
Practical Completion Date; and
	 
	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	the date of
the first Advance to the Borrower by a commercial
bank (other than DBSA) provided that upon the making
of such Advance, not less than 100% (one hundred per
cent) of the Available Facility Amount under the DBSA
Underwriting/Partial Risk Facility is held as Lender
by one or more commercial banks (other than DBSA),
	 
	 	 	 	 	 	 
	 	 	 	 	whereupon on such earlier date the margin shall be reduced
to 2,5% (two comma five per cent) NACQ inclusive of all
costs.
	 
	 	 	 	 	 	 
	5	 	Interest Periods	 	Quarterly in arrears.
	 
	 	 	 	 	 	 
	6	 	Capital Grace Period	 	36 (thirty-six) Months from the
Effective Agreement Date.






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	7	 	Capital Repayment Dates	 	Subject to the Base Case Model, 48
(forty-eight) consecutive quarterly
instalments commencing 3 (three)
Months after the expiry of the
Capital Grace Period, on the Interest
Repayment dates (referred to in
paragraph 8 of this schedule) as
determined by DBSA, after
consultation with the Borrower and
notified in writing to the Borrower
as well as to the Agent and to the
Security Trustee by DBSA.
	 
	 	 	 	 	 	 
	8	 	Interest Repayments	 	Quarterly in arrears on March 31,
June 30, September 30 and December 31
of each year. The first interest
payment being on 30 September 2000.
	 
	 	 	 	 	 	 
	9	 	Base Interest Floating Rate	 	3-Month JIBAR.
	 
	 	 	 	 	 	 
	10	 	Base Interest Fixed Rate	 	Shall be the rate determined by DBSA
and notified to the Borrower on the
date of the first Advance under the
DBSA Loan Facility.
	 
	 	 	 	 	 	 
	11	 	Drawdown Schedule	 	Advances shall be Monthly and take
into account the dates upon which
sums are payable and the aggregate
amount of such sums under the
Relevant Approved Payment Schedule
but in any event each Advance shall
be an integral multiple of R100 000
(one hundred thousand Rand) (the
“Integral Multiple”) and not less
than R500 000 (five hundred thousand
Rand) (the “Minimum Advance”) other
than the last Advance in the event
that the amount of the Available
Commitments prior to the last Advance
is less than the Minimum Advance or
the Integral Multiple.
	 
	 	 	 	 	 	 
	12	 	Final Drawdown Date	 	as referred to in clause 1.2
(“Definition”) in the definition of
“Final Drawdown Date” means the date
of






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	 	 	 	 	the last Advance made pursuant to the last Drawdown Notice or the date 36
(thirty-six) Months after the Effective Agreement Date, whichever date first occurs.
	 
	 	 	 	 	 	 
	13	 	Default Rate	 	As referred to in clause 1.2
(“Definition”) means the Default
Rate as defined in clause 4.5.






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SCHEDULE9

REPAYMENT INSTALMENTS AND INTEREST

PART B

DBSA UNDERWRITING/PARTIAL RISK FACILITY




	 	 	 	 	 	 	 
	1	 	Lender	 	DBSA and/or “Lender” as defined in clause 1.2.
	 
	 	 	 	 	 	 
	2	 	Committed Amount	 	R76,5 million.
	 
	 	 	 	 	 	 
	3	 	Term of the Facility	 	180 (one-hundred-and-eighty) Months from the First Drawdown Date.
	 
	 	 	 	 	 	 
	4	 	Margin	 	3,5% (three comma five per cent) NACQ inclusive of all costs.
	 
	 	 	 	 	 	 
	5	 	Interest Periods	 	Quarterly in an-ears.
	 
	 	 	 	 	 	 
	6

	 	Capital Grace Period
	 	(i)
	 	36 (thirty-six) Months as from the Effective Agreement Date (the
“Three Year Period”) in respect of all Contributions made during the
Three Year Period; and
	 
	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	36 (thirty-six) Months as from the end of the Three Year
Period in respect of all Contributions made after the
end of the Three Year Period.
	 
	 	 	 	 	 	 
	7	 	Capital Repayment Dates	 	Subject to the Base Case Model, 48
(forty-eight) consecutive quarterly
instalments, commencing three Months
after the expiry of the Capital Grace
Period, the dates which shall be on
the Interest Repayment dates
(referred to in paragraph 8 of this
schedule) as determined by DBSA,
after consultation with the Borrower
and Lenders and notified in writing
to the Borrower as well as to the
Agent and to the Security Trustee by
DBSA.






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	8	 	Interest Repayments	 	Quarterly in arrears on March 31,
June 30, September 30 and December 31
of each year. The first interest
payment being on 30 September 2000
(if applicable).
	 
	 	 	 	 	 	 
	9	 	Base Interest Floating Rate	 	3-Month JIBAR.
	 
	 	 	 	 	 	 
	10	 	Base Interest Fixed Rate	 	Shall be determined by DBSA and the
First Bank Substitute (as defined
below) on the date of the first
Advance under the First Commercial
Bank Drawdown Notice (as defined in
the definition of “Reference Rate” in
schedule 10 part B) and shall be
whichever of the three following
alternatives below is the higher:
	 
	 	 	 	 	 	 
	 

	 	 	 	(a)
	 	the best
rate at which DBSA is able to obtain funding in Rands
on the South African money markets;
	 
	 	 	 	 	 	 
	 

	 	 	 	(b)
	 	the best
rate at which the first reputable bank which is a
Substitute under the Facility Agreement (the “First
Bank Substitute”) is able to obtain funding in Rands
on the South African money markets; or
	 
	 	 	 	 	 	 
	 

	 	 	 	(c)
	 	the best
rate applicable to one or more government bond(s)
selected by DBSA and the First Bank Substitute.
	 
	 	 	 	 	 	 
	11	 	Drawdown Schedule	 	Advances shall be Monthly and take into account the Relevant Approved
Payment Schedule but in any event, each Advance shall be an integral multiple of R100 000 (one
hundred thousand Rand) (the “Integral Multiple”) and not less than R300 000 (three hundred
thousand Rand) (the “Minimum Advance”) other than the last






- 191 -









 






	 	 	 	 	 	 	 
	 	 	 	 	Advance in the event that the amount of the Available Commitments prior to the
last Advance is less than the Minimum Advance or the Integral Multiple.
	 
	 	 	 	 	 	 
	12	 	Final Drawdown Date	 	As referred to in clause 1.2
(“Definition”) in the
definition of “Final
Drawdown Date” means the
date of the last Advance
made pursuant to the last
Drawdown Notice or the date
72 (seventy-two) Months
after the Effective
Agreement Date, whichever
date first occurs.
	 
	 	 	 	 	 	 
	13	 	Default Rate	 	As referred to in clause 1.2
(“Definition”) means the
Default Rate as defined in
clause 4.5.







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SCHEDULE 10

FEES, REFERENCE RATES AND CONDITIONS

PART A

DBSA LOAN FACILITY




	 	 	 	 	 
	1

	 	Front End Fee
	 	As referred to in clause 6.1(c) shall be 1,0% (one comma nought per cent) of R48,5 million.
	 
	 	 	 	 
	2

	 	Commitment Fee
	 	As referred to in clause 6.1(b) shall be 0,5% (nought comma five per cent) per annum.
	 
	 	 	 	 
	3

	 	The Reference Rate
	 	Subject to the Reference Rate Proviso (as defined in paragraph 4 of this schedule 10 part A
below) the Reference Rate as referred to in clause 4.1 shall be the Base Interest Floating
Rate or the Base Interest Fixed Rate as stipulated in the relevant Drawdown Notice prior to
each Advance.
	 
	 	 	 	 
	4

	 	Reference Rate Proviso
	 	In the event that an Advance under the DBSA Loan Facility is made subject to the Base
Interest Fixed Rate any future Advance under the said Facility shall also be made subject to
the Base Interest Fixed Rate.
	 
	 	 	 	 
	5

	 	The Prepayment Premium
	 	As referred to in clause 5.2 shall be 1,0% (one comma nought per cent).
	 
	 	 	 	 
	6

	 	Additional Conditions
Precedent to any Advance:
	 	(a)    Receipt of any agreed fees, if for any reason such fees are not
covered by the relevant Advance;

	 
	 	 	 	 
	 

	 	 	 	(b)    At least 3
(three) Banking Days prior to any Advance, each
Advance shall be matched by a corresponding
contribution of Project Equity by the Shareholders
under the terms of the







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	 	 	 	       Shareholder Subscription Agreements (or as otherwise agreed) unless such
contribution has already been made.

	 
	 	 	 	 
	7

	 	Underwriting Fee
	 	As referred to in
clause 6.1(c) shall
be 0,75% (nought
comma seven five per
cent) of R76,5
million.
	 
	 	 	 	 
	8

	 	Appraisal Fee
	 	As referred to in
clause 6.1(c) shall
be R125 000 (one
hundred and twenty
five thousand Rand)
(one hundred and
twenty five thousand
Rand).
	 
	 	 	 	 
	9

	 	First Drawdown Latest Date
	 	As referred to in
clause 1.2
(“Definition”) in the
definition of First
Drawdown Date shall
be no later than one
Month after the
Effective Agreement
Date.
	 
	 	 	 	 
	10

	 	Availability Period
	 	As referred to in
clause 1.2
(“Definition”) in the
definition of
“Availability Period”
means the period of
36 (thirty-six)
Months from the First
Drawdown Date or from
the First Drawdown
Date until the Final
Drawdown Date
whichever period
first expires.
	 
	 	 	 	 
	11

	 	Breakage Fee
	 	As referred to in
clause 6.2(b) shall
be 1,25% (one comma
two five per cent).






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SCHEDULE 10

FEES, REFERENCE RATES AND CONDITIONS

PART B

DBSA UNDERWRITING / PARTIAL RISK FACILITY




	 	 	 	 	 
	1

	 	Front End Fee
	 	As referred to in clause 6.1(c) shall be nil.
	 
	 	 	 	 
	2

	 	Commitment Fee
	 	As referred to in clause 6.1(b) shall be 0,5% (nought comma five per cent) per annum.
	 
	 	 	 	 
	3

	 	The Reference Rate
	 	Subject to the Reference Rate Proviso (as defined in paragraph 4 of this schedule 10 part B
below) the Reference Rate as referred to in clause 4.1 shall be the Base Interest Fixed Rate
or the Base Interest Floating Rate stipulated in the first Drawdown Notice issued prior to
the first Advance when DBSA is not the sole Lender (the “First (non-DBSA) Commercial Bank
Drawdown Notice”).
	 
	 	 	 	 
	4

	 	Reference Rate Proviso
	 	Until the First (non-DBSA) Commercial Bank Drawdown Notice is issued any Drawdown Notice and
Advance under the DBSA Underwriting/Partial Risk Facility shall be subject to the proviso
that as long as the sole Lender under the Facility Agreement is DBSA the Reference Rate in
respect of any Drawdown Notice and Advance under the DBSA Underwriting/Partial Risk Facility
shall be the same Reference Rate as under the DBSA Loan Facility.
	 
	 	 	 	 
	5

	 	The Prepayment Premium
	 	As referred to in clause 5.2 shall be 1,0% (one comma nought per cent).
	 
	 	 	 	 
	6

	 	Additional Conditions	 	 






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	 	Precedent to any Advance
	 	(a)    Receipt of any agreed fees, if for any reason such fees are not
covered by the relevant Advance;

	 
	 	 	 	 
	 

	 	 	 	(b)    At least 3
(three) Banking Days prior to any Advance, each
Advance shall be matched by a corresponding
contribution of Project Equity by the Shareholders
under the terms of the Shareholder Subscription
Agreements (or as otherwise agreed) unless such
contribution has already been made.

	 
	 	 	 	 
	 

	 	 	 	(c)    In the
event that an Advance is made subject to the Base
Interest Fixed Rate under the First (non-DBSA)
Commercial Bank Drawdown Notice (as defined in
paragraph 3 of this schedule above) or under any
Drawdown Notice subsequent to such Drawdown Notice
the Borrower shall not be entitled to request a Base
Interest Floating Rate in any future Drawdown Notice.

	 
	 	 	 	 
	7

	 	First Drawdown Latest Date
	 	As referred to in clause 1.2
(“Definition”) in the definition of
First Drawdown Date shall be no later
than 36 (thirty-six) Months and one
Month after the Effective Agreement
Date.
	 
	 	 	 	 
	8

	 	Availability Period
	 	As referred to in clause 1.2
(“Definitions”) in the definition of
“Availability Period” means the period
of 72 (seventy-two) Months from the
First Drawdown Date or from the First
Drawdown Date until the Final Drawdown
Date whichever period first expires.






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	9

	 	Breakage Fee
	 	As referred to in clause 6.2(b) shall
be 1,25% (one comma two five per
cent).






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SCHEDULE 11




FORM OF GOLDEN SHARE AGREEMENT




 





GOLDEN SHARE AGREEMENT




Between




THE GREATER NELSPRUIT UTILITY COMPANY (PROPRIETARY)




LIMITED




and




BIWATER CAPITAL BV




and




THE TRUSTEE OF THE GNUC




SECURITY TRUST




 





-198-









 





GOLDEN SHARE AGREEMENT





	1	 	PARTIES






	 	1.1	 	THE GREATER NELSPRUIT UTILITY COMPANY (PROPRIETARY) LIMITED
	 
	 	1.2	 	BIWATER CAPITAL BV
	 
	 	1.3	 	THE TRUSTEE OF THE GNUC SECURITY TRUST






	2.	 	INTRODUCTION






	 	2.1.	 	The Borrower entered into a Concession Agreement dated 21 April 1999 with the
Nelspruit Transitional Local Council for the supply of water services by the Borrower
on the terms and subject to the conditions set out therein (the “Concession
Agreement”).
	 
	 	2.2.	 	For the purpose of financing, inter alia, performance of certain of its
obligations under the Concession Agreement, the Borrower and the Lender have entered
into, or are about to enter into, the Facility Agreement.
	 
	 	2.3.	 	As part of the security arrangements in respect of the Facility Agreement the
Security Trustee is entitled to subscribe for certain “A” Preference Shares on the
terms and conditions set out more fully in this Agreement.






	3.	 	INTERPRETATION
	 
	 	 	Terms used in this Agreement and not otherwise
defined herein, shall have the meanings given to
them in the Facility Agreement, unless the context
otherwise requires and the following terms shall
have the following meanings in this Agreement:





	 	 	 	 	 
	 

	 	“the/this Agreement”
	 	this golden share agreement






-199-









 






	 	 	 	 	 
	 

	 	“Borrower”
	 	The Greater Nelspruit Utility Company (Proprietary) Limited (Registration No.
98/16432/07)
	 
	 	 	 	 
	 

	 	“Facility Agreement”
	 	the written agreement so entitled of even date herewith between the
Lenders, the Borrower, the Agent and the Security Trustee relating to the financing of
the Project
	 
	 	 	 	 
	 

	 	““A” Preference Shares”
	 	the 1000 “A” redeemable preference shares of l c each in
the Borrower
	 
	 	 	 	 
	 

	 	“Security Trustee”
	 	the Trustee of the GNUC Security Trust







	4.	 	SUBSCRIPTION
	 
	 	 	The Security Trustee shall subscribe for the “A” Preference Shares having the rights,
privileges and conditions set out in Annexure “A” hereto at par. Upon receipt of the
subscription price, the Borrower shall allot and issue the “A” Preference Shares to the
Security Trustee.






	5.	 	SECURITY TRUSTEE’S UNDERTAKINGS
	 
	 	 	The Security Trustee hereby undertakes irrevocably to the Borrower and Biwater Capital BV
that:






	 	5.1.	 	it shall not issue a Default Notice as contemplated in the Borrower’s
articles of association, as further described in clause 3 of Annexure “A” hereto,
unless an Event of Default (as defined in the Facility Agreement) has occurred. If the
Event of Default is thereafter remedied, the Security Trustee shall forthwith issue a
Withdrawal Notice as contemplated in the Borrower’s articles of association, as
further described in clause 4 of Annexure “A” hereto;
	 
	 	5.2.	 	on the Final Repayment Date the Security Trustee shall request and consent to
the redemption of the “A” Preference Shares but in any event the Borrower shall




-200-









 






	 	 	 	be entitled to redeem the “A” Preference Shares after the Final Repayment Date if
all amounts under the Facilities have been repaid; and
	 
	 	5.3.	 	the Security Trustee shall not transfer, dispose, cede or otherwise encumber
any of the “A” Preference Shares to any person (as defined in the Facility Agreement)
unless such person enters into an agreement with the Borrower and Biwater Capital BV
in the exact terms of this Agreement, or such other terms as may be agreed between
such person, the Lenders, the Borrower and Biwater Capital BV at the time.






	6.	 	WAIVER






	 	6.1.	 	The rights and remedies of the Security Trustee whether arising under this
Agreement or under the common law shall not be capable of being waived or varied
otherwise than by an express waiver in writing and any such waiver shall not prejudice
any remedy of the Security Trustee in respect of the Borrower’s continuing or other
breach of the terms and conditions hereof.
	 
	 	6.2.	 	No failure, delay, relaxation or indulgence on the part of any party in
exercising any power or right conferred on such party in terms of this Agreement shall
operate as a waiver of such power or right nor shall any single or partial exercise of
any such power or right preclude any other or further exercises thereof or the
exercise of any other power or right under this Agreement.
	 
	 	6.3.	 	The expiry or termination of this Agreement shall not prejudice the rights of
either party in respect of any antecedent breach or non-performance by any party or
any of the terms or conditions hereof.






	7.	 	DOMICILIUM






	 	7.1.	 	The parties hereto choose domicilium citandi et executandi for all purposes
of and in connection with this Agreement as follows:




-201-









 






	 	 	 	The Borrower:




16 Branders Street

Nelspruit, 1200

Facsimile: (013) 755-2618



Attention: The Managing Director



Biwater Capital BV:



Atrium, 76th Floor

Strawinskylaan 3105

1077 ZX, Amsterdam

The Netherlands

Facsimile: 0031 20 4064555



Attention: Annet van der Maten



with faxed copy to:

Biwater Capital BV

Facsimile: 0044 1306 746031

Attention of: Company Secretary



Nedcor Investment Bank Limited:



3rd Floor

1 Newtown Avenue

Killarney, 2193

Facsimile: (011) 480-1774



Attention: Head: Project Management





	 	7.2.	 	Any party hereto shall be entitled to change its domicilium citandi et
executandi from time to time, provided that any such change shall only be effective
upon receipt of notice in writing by the other parties of such change.
	 
	 	7.3.	 	All notices, demands and communications under this Agreement shall be in
writing and all such notices, demands and communications or payments intended for any
party shall be made or given at such party’s domicilium for the time being.




-202-









 






	 	7.4.	 	Every notice, request, demand or other communication under this Agreement
shall:






	 	(a)	 	be in writing delivered personally or sent by registered or
certified mail, return receipt requested, or sent by facsimile followed by the
original delivered by hand or registered and certified mail, return receipt
requested;
	 
	 	(b)	 	unless received earlier, be deemed to have been received,
subject as otherwise provided in this Agreement, in the case of a letter when
delivered personally or 7 (seven) days after it has been put into the post
(provided registered post) in South Africa and 10 (ten) days after it has been
put in the post in the United Kingdom or the Netherlands; and






	 	7.5.	 	Notwithstanding anything to the contrary herein contained a written notice or
communication actually received by a party shall be an adequate written notice or
communication to it notwithstanding that it was not sent to or delivered at its chosen
domicilium citandi et executandi.






	8.	 	JURISDICTION
	 
	 	 	Each party submits to the non-exclusive jurisdiction of the High Court of South Africa
(Witwatersrand Local Division) or any successor to that court for all purposes relating to
this Agreement.






	9.	 	APPLICABLE LAW
	 
	 	 	This agreement is governed by and shall be construed in accordance with, the laws of South
Africa.






	10.	 	AMENDMENTS
	 
	 	 	No variation, modification or waiver of any provision or consensual cancellation of this
Agreement, or consent to any departure therefrom, shall in any way be of any force or




-203-









 






	 	 	effect unless confirmed in writing and signed by the Borrower and the Security Trustee and
then such variation, modification, waiver, cancellation or consent shall be effective only
in the specific instance and for the purpose and to the extent for which made or given.




-204-









 











	 	 	 	 	 	 	 
	SIGNED at

	 	 	 	on this the        
               
                
 day of             
               
            2000	 	 
	 

	 	 

	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	For and on behalf of	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	THE GREATER NELSPRUIT UTILITY COMPANY

(PROPRIETARY) LIMITED	 	 
	 
	 	 	 	 	 	 
	Witnesses:
	 	 	 	 	 	 
	1.
	 	 	 	 	 	 
	Name

	 	 

	 	 	 	 
	 
	 	 	 	 	 	 
	2.
	 	 	 	 	 	 
	Name

	 	 

	 	 

Who warrants his/her authority hereto
	 	 
	 
	 	 	 	 	 	 
	SIGNED at

	 	 	 	on this the        
               
                
 day of             
               
            2000	 	 
	 

	 	 

	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	For and on behalf of	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	BIWATER CAPITAL BV	 	 
	 
	 	 	 	 	 	 
	Witnesses:
	 	 	 	 	 	 
	1.
	 	 	 	 	 	 
	Name

	 	 

	 	 	 	 
	 
	 	 	 	 	 	 
	2.
	 	 	 	 	 	 
	Name

	 	 

	 	 

Who warrants his/her authority hereto
	 	 
	 
	 	 	 	 	 	 
	SIGNED at

	 	 	 	on this the        
               
                
 day of             
               
            2000	 	 
	 

	 	 

	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	For and on behalf of	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	NEDCOR INVESTMENT BANK LIMITED

as Trustee of the GNUC Security Trust	 	 
	 
	 	 	 	 	 	 
	Witnesses:
	 	 	 	 	 	 
	1.
	 	 	 	 	 	 
	Name

	 	 

	 	 	 	 
	 
	 	 	 	 	 	 
	2.
	 	 	 	 	 	 
	Name

	 	 

	 	 

Who warrants his/her authority hereto
	 	 






-205-









 






ANNEXURE “A”

RIGHTS AND PRIVILEGES ATTACHING TO

THE “A” PREFERENCE SHARES





	1	 	The following rights, privileges and conditions set out herein shall attach to the 1000 “A”
redeemable preference shares of 1 cent each (the ““A” Preference Shares”).






	2.	 	The “A” Preference Shares shall have a par value of one cent each and shall be allotted and
issued only to the Security Trustee, credited as fully paid up, against receipt of the
subscription price of one cent for each “A” Preference Share.






	3.	 	The holder for the time being of the “A” Preference Shares may in the event of an Event of
Default at any time deliver a written notice to the Company (hereinafter referred to as the
“Default Notice”) and, with effect from the date of such Default Notice, the holder of the “A”
Preference Shares shall have the following rights, without prejudice to any other rights the
holder may have as Security Trustee or otherwise:






	 	3.1.	 	the right to attend, speak and vote at all meetings of the members of the
Company and at such meetings the “A” Preference Shares shall cumulatively have the
number of votes which are exercisable by all the shareholders entitled to attend at
such meeting multiplied by 1000, such votes to be divided equally between the number
of “A” Preference Shares then in issue;
	 
	 	3.2.	 	the right to re-organise the supervisory and/or management boards of the
Company, including the right to dismiss members of such boards and to appoint new
members of such boards;






	4.	 	As soon as reasonably practical after the Event of Default has been remedied to the
satisfaction of the Majority Lenders the holder shall deliver a notice to the Company
(hereinafter referred to as the “Withdrawal Notice”) and with effect from the date of receipt
by the Company of such Withdrawal Notice the holder shall no longer be entitled to the
aforementioned rights set out in this paragraph, save that the holder shall be entitled
thereafter to deliver a further Default Notice to the Company. There shall be no




-206-









 






	 	 	limit to the number of Default and Withdrawal Notices which may be delivered whilst the “A”
Preference Shares are in issue.






	5.	 	On a winding-up or liquidation of the Company, the holder of the “A” Preference Shares shall
be entitled to all of the surplus assets of the Company in priority to any payment in respect
of any of the Company’s other shares only to the extent due to the holder under the Facility
Agreement and subject to its terms.






	6.	 	The holder of the “A” Preference Shares may at any time on notice to the Company (provided
that such notice may not be given within a period of 36 (thirty-six) Months and one day from
date of issue of the “A” Preference Shares) require the redemption of the “A” Preference
Shares and upon receipt of such notice the Company shall forthwith redeem the “A” Preference
Shares at an amount equal to the subscription price thereof against surrender to the Company
of the certificates in respect of the “A” Preference Shares. Notwithstanding anything to the
contrary contained herein, the Company shall be entitled to redeem the “A” Preference Shares
and the holder shall be obliged to accept such redemption of the “A” Preference Shares at any
time after all amounts owing under the Facility Agreement have been paid and repaid in full,
provided that:






	 	6.1.	 	the redemption price in respect of the “A” Preference Shares shall be an
amount equal to the initial subscription price thereof as paid by the holder therefor,
	 
	 	6.2.	 	such redemption of the “A” Preference Shares shall take place by notice to
the holder; and
	 
	 	6.3	 	the holder shall, upon receipt of the redemption price, surrender and deliver
the share certificates in respect of the “A” Preference Shares to the Company.






	7.	 	The Company shall be obliged, whether or not a Default Notice has been delivered, to give the
holder notice, in terms of the Companies Act, 61 of 1973, as amended, of any meeting of
preference shareholders. At every meeting of the holders of the “A” Preference Shares, the
provisions of the Company’s articles of association relating to general meetings of ordinary
members shall apply mutatis mutandis, except that a




-207-









 






	 	 	quorum at any such class meeting of preference shareholders shall include the Security
Trustee or its proxy representing the holder of all of the issued “A” Preference Shares,
provided that if at any adjournment of such meeting a quorum is not so present, the
provisions of the said articles of association relating to adjourned general meetings shall
apply.






	8.	 	Whether or not a Default Notice has been delivered, the registered holder of the “A”
Preference Shares shall be entitled to receive notice of and to attend and speak at any
meeting of the Company but, subject to paragraph 3, shall not be entitled to vote, either in
person or by proxy, by virtue of or in respect of the “A” Preference Shares, unless one or
more of the following circumstances prevail at the date of the meeting :






	 	8.1.	 	any redemption payment remains in arrears and unpaid after seven days from
due date thereof; or
	 
	 	8.2.	 	a resolution of the Company is proposed which directly affects the rights
attached to the “A” Preference Shares or the interest of the holders thereof in their
capacity as such, including (without limitation) a resolution for the winding-up of
the Company or for the reduction of its share capital or share premium account or for
the conversion of the Company into a public company;






	 	 	in which event the holder of the “A” Preference Shares shall have the voting rights set
forth in paragraph 3.1 above.
	 
	9.	 	Notwithstanding any provisions to the contrary contained herein :






	 	9.1.	 	the terms, rights, privileges and/or conditions of the “A” Preference Shares
may not be modified, altered, varied, added to or abrogated;
	 
	 	9.2.	 	the ordinary share capital of the Company may not be reduced;
	 
	 	9.3.	 	the share premium and non-distributable reserves of the Company may not be
repaid or distributed,




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	 	 	without the prior written consent of the registered holders of the “A” Preference Shares.






	10.	 	The Company shall not be entitled at any time after the date of issue. of the “A” Preference
Shares to create and/or issue any further shares (whether of the same class as the “A”
Preference Shares or not) ranking pan passu with or in priority to the “A” Preference Shares,
without the prior consent of a majority of the registered holders of the “A” Preference
Shares.




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SCHEDULE 12

PART IA

FORM OF AGENT APPOINTMENT LETTER AGREEMENT




[Date]




[To]





	1.	 	The DBSA (as a Lender), The Greater Nelspruit Utility Company (Proprietary) Limited and
Nedcor Investment Bank Limited (as Security Trustee) entered into a Secured Term Loan Facility
Agreement dated [ ] (the “Facility Agreement”);






	2.	 	Words and expressions defined in the Facility Agreement shall have the same meanings in this
letter agreement.






	3.	 	We, [Lenders], hereby appoint [Agent] as Agent under the Facility Agreement and we, [Agent)
hereby accept such appointment, with effect from [Date] under and in accordance with the terms
of the Facility Agreement (as same may be amended from time to time) and this letter
agreement.






	4.	 	The parties hereto acknowledge and agree that upon execution of this letter agreement,
[Agent] will forthwith become a party to the Facility Agreement as the Agent thereunder and
shall be entitled to the rights and benefits and be bound by the obligations, of the Agent
thereunder.






	5.	 	[Agent] address and facsimile number for the purpose of our domicilium citandi et executandi
under the Facility Agreement are as follows:





Address:




Facsimile No:




For the attention of:




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	6.	 	This letter agreement shall be governed by and construed in accordance with the law of South
Africa





ACKNOWLEDGED AND AGREED to at                                         on                          
               2000



[Lenders]

[Borrower]

[Agent]

[Security Trustee]




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SCHEDULE 12

PART lB

FORM OF AGENT ACCESSION MEMORANDUM




	 	 	 	 	 
	To:

	 	[existing Agent/Trustee]	 	 
	 
	 	 	 	 
	From:

	 	[prospective Agent]
	 	Date:






Agent Accession Memorandum



We [prospective Agent] refer to the facility agreement (the Facility Agreement) dated [      ], 20[      ]
and originally made between, 1 ] as the Agent and trustee and the financial institutions listed
therein.



Words and expressions defined in the Facility Agreement shall have the same meanings in this Agent
Accession Memorandum.





	1.	 	We hereby confirm that we are to replace [existing Agent] as the Agent with effect from
[date] under and in accordance with the terms of the Facility Agreement.






	2.	 	We acknowledge and agree that upon and by reason of our delivering this Agent Accession
Memorandum to the existing Agent (which Agent shall immediately deliver a copy of the same to
each Lender and the Security Trustee) we will thereby forthwith become a party to the Facility
Agreement as the Agent thereunder and shall be entitled to the rights and benefits and be
bound by the obligations, of the Agent thereunder.






	3.	 	Our facsimile number, telex number and address for the purposes of our domicilium citandi et
executandi under the Facility Agreement are as follows:
	 
	 	 	Address:
	 
	 	 	Facsimile No:
	 
	 	 	Telephone:




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	 	 	For the attention of:






	4.	 	This Agent Accession Memorandum shall be governed by and construed in accordance with the law
of South Africa.




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SCHEDULE 12

PART 2

FORM OF TRUSTEE ACCESSION MEMORANDUM




	 	 	 	 	 
	To:

	 	[existing Agent Trustee]	 	 
	 
	 	 	 	 
	From:

	 	[prospective Trustee]
	 	Date:






Trustee Accession Memorandum



We [prospective Trustee] refer to the facility agreement (the Facility Agreement) dated [ ], 20[ ]
and originally made between, [ ].



Words and expressions defined in the Facility Agreement shall have the same meanings in this
Trustee Accession Memorandum.





	1.	 	We hereby confirm that we are to replace [existing Trustee] as the Trustee with effect from
[date] under and in accordance with the terms of the Facility Agreement.






	2.	 	We acknowledge and agree that upon and by reason of our delivering this Trustee Accession
Memorandum to the existing Trustee (which Trustee shall immediately deliver a copy of the same
to the Agent and each Lender) we will thereby forthwith become a party to the Facility
Agreement as the Trustee thereunder and shall be entitled to the rights and benefits and be
bound by the obligations, of the Trustee thereunder.






	3.	 	Our facsimile number, telex number and address for the purpose of our domicilium citandi et
executandi under the Facility Agreement are as follows:
	 
	 	 	Address:
	 
	 	 	Facsimile No:
	 
	 	 	Telephone:




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	 	 	For the attention of:






	4.	 	This Trustee Accession Memorandum shall be governed by and construed in accordance with the
law of South Africa.




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SCHEDULE 13




PART I




FORM OF GENERAL NOTARIAL BOND




(referred to in clause 12.14.1 of the Facility Agreement)




Protocol No:                                        




GENERAL NOTARIAL BOND




BE IT HEREBY MADE KNOWN



THAT on this the                     day of                     TWO THOUSAND (2000) before me [                     ], Notary Public, by l
awful authority duly
admitted and sworn and practising at [                     ] in the Province of [                     ] , Republic of South Africa and in
the presence of the undersigned witnesses, personally came and appeared




in his/her capacity as the attorney and agent of



THE GREATER NELSPRUIT UTILITY COMPANY (PROPRIETARY) LIMITED

Registration No. 98/164432/07

(hereinafter referred to as the “Mortgagor”)




having its registered head office situate at :




                    [                                        ]




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	and who carries on business at :
	 	 
	 
	 	 
	 


	 	 
	 
	 	 
	 


	 	 
	 
	 	 
	 


	 	 





he/she being duly authorised hereto by virtue of a power of attorney granted to his/her by the
Mortgagor on                                         , therein represented by                                    
     for and on behalf of the
Mortgagor, he/she being duly
authorised thereto by virtue of a resolution passed at a meeting of the board of directors of the
Mortgagor held at on which said power of attorney and certified copy of which resolution has been
exhibited to me the Notary at the passing of these presents and now remain filed in my Protocol.




WHEREAS:





	1.	 	AND THE APPEARER DECLARED THAT:






	 	1.1.	 	The Mortgagor has concluded a Concession Contract for the design,
construction, financing, rehabilitation operation, maintenance and management of the
supply of water services and works (the “Project”) located in the Mpumalanga Province,
Republic of South Africa;
	 
	 	1.2.	 	The “Lenders” (as defined in the Facility Agreement) have agreed to provide
finance facilities to the Mortgagor for the purpose of funding the obligations of the
Mortgagor under the Concession Contract and such facilities are governed by a facility
agreement (hereinafter referred to as the “Facility Agreement”);
	 
	 	1.3.	 	At the instance and request of the Mortgagor for the Trustee for the time
being of the GNUC Security Trust (hereinafter together with permitted successors in
title and permitted assigns, referred to as the “Creditor”) has issued, or will issue,
to the Lenders under the Facility Agreement an irrevocable undertaking (hereinafter
referred to as the “Trustee Undertaking”) pursuant and subject to the Facility
Agreement;
	 
	 	1.4.	 	The Mortgagor is firmly held and bound to the Creditor under a principal
indemnity, as defined in the Facility Agreement (hereinafter referred to as the




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	 	 	 	“Principal Indemnity”) pursuant to which the Mortgagor indemnifies and holds the
Creditor harmless against any liability, loss or costs the Creditor may suffer or
incur by reason or consequence of the Trustee Undertaking.






	2.	 	AND the Appearer, on behalf of the Mortgagor, hereby acknowledged and declared the Mortgagor
to be held and firmly bound unto and in favour of the Creditor for:






	 	2.1.	 	the sum of R125 000 000 (one hundred and twenty five million Rand)
(hereinafter referred to as the “Capital Sum”), as a continuing covering security for
and in respect of all sums of money and all obligations which the Mortgagor may at
present or in the future owe or incur to the Creditor under and in terms of the
Principal Indemnity.
	 
	 	2.2.	 	an additional sum of R12 500 000 (twelve million five hundred thousand Rand)
(hereinafter referred to as the Additional Sum”) to secure and cover the further
amount arising under the Principal Indemnity (including without limitations amounts
arising from fluctuations in exchange rates between currencies) which amounts will
enable the Mortgagor to pay the Principal Indemnity to the Creditor in such amounts
and currency denominations as required in terms of the Facility Agreement and
contingent costs as set forth in clauses 5.19, 5.20 and 5.22 hereof.
	 
	 	2.3.	 	All interest on all indebtedness by this bond shall bear interest at the
Default Rate (as defined in the Facility Agreement).






	3.	 	AND as a continuing covering security for the due payment of :






	 	3.1.	 	the Capital Sum and the Additional Sum as set out in clauses 2.1 and 2.2
hereof; and
	 
	 	3.2.	 	all interest payable in accordance with clause 2.3 above; and
	 
	 	3.3.	 	all future advances, debts or demands (over and above the Capital Sum and
interest thereon) which are lawfully secured and recovered under this collateral bond,
in respect of premiums of insurance, expenses of any notice, further amounts arising
under the Facility Agreement (including without limitation amounts arising from
fluctuations in exchange rates between currencies), charges incurred in suing for the
recovery of any sum due hereunder and moneys disbursed for stand licences, government
and municipal fees and taxes, stamp duty and other charges and costs on an attorney
and own client scale incurred as




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	 	 	 	above set forth as also any charges and costs on an attorney and own client scale
which may be incurred by the Creditor in defending any action which may be
instituted by or against it arising out of or in connection with this collateral
bond, together with interest thereon; and all other sums of money apart from the
aforegoing claimable in terms of this collateral bond or that may at any time be or
become due and owing to the Creditor arising from any cause whatsoever and for the
due performance of the conditions of this collateral bond the Mortgagor binds to
and in favour of the Creditor generally all the Mortgagor’s movable property and
effects of every description, corporeal and incorporeal, nothing whatsoever
excepted and both to such as the Mortgagor now has or may in future become
possessed of and wheresoever situate, it being the intention that all the movable
assets of the Mortgagor shall be comprised in the security hereby given, submitting
them all and the choice thereof to constraint and execution as the law directs.






	4.	 	AND the Appearer, on behalf of the Mortgagor, declared to renounce the benefits arising from
the legal exceptions non numerate pecuniae, non causa debiti, errore calculi, revision of
accounts, no value received, excussion, division de duobus vel pluribus reis debendi and all
other legal benefits and exceptions which might or could be taken to the payment of the
Capital Sum or the Additional Sum or any part thereof, with the full force, meaning and effect
whereof the Mortgagor declares itself to be fully acquainted.






	5.	 	AND the Appearer, on behalf of the Mortgagor, declared that this bond shall be subject to the
following conditions and stipulations :






	 	5.1.	 	The Lenders may afford to the Mortgagor such credit and facilities from time
to time as is set out in the Facility Agreement.
	 
	 	5.2.	 	All payments required to be made by the Mortgagor shall be made, free of
exchange and without deduction of whatsoever nature in such currency, by the Mortgagor
to the Creditor at [ ], Account No. [ ] or at such other bank as the Creditor may
advise the Mortgagor in writing from time to time.
	 
	 	5.3.	 	The Mortgagor shall comply with its obligations as set forth in clause 9.2(o)
(insofar as it relates to information reporting) of the Facility Agreement, which
shall be read as if specifically incorporated herein.




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	 	5.4.	 	If so required and on good cause shown by the Creditor at any time during the
operation of this bond, the Mortgagor shall procure the resignation or removal of the
Mortgagor’s auditors and the appointment, on such reasonable terms as the Creditor may
stipulate, of an auditor or auditors nominated by the Creditor, subject to the consent
of the Mortgagor, such consent not to be unreasonably withheld and/or delayed.
	 
	 	5.5.	 	The Mortgagor shall for so long as this bond is in force :






	 	5.5.1.	 	keep all the mortgaged assets in good order and condition, fair wear and
tear excepted;
	 
	 	5.5.2.	 	unless the Creditor otherwise agrees, obtain and maintain insurance covering
risks in relation to the mortgaged assets as stipulated in the Facility
Agreement.






	 	5.6.	 	The Mortgagor, for so long as this bond remains in force, gives to the
Creditor the undertakings stipulated in clause 9.4 of the Facility Agreement which
shall be read as if specifically incorporated herein.
	 
	 	5.7.	 	If this bond becomes executable under clause 5.11, the Creditor shall,
subject to the terms of the Facility Agreement, be entitled (but not obliged):






	 	5.7.1.	 	to claim and recover from the Mortgagor forthwith any and all sums for the
time being secured by this bond, whether then due for payment or not; and/or
	 
	 	5.7.2.	 	for the purpose of perfecting its security hereunder to enter upon the
premises of the Mortgagor or any other place where any of the mortgaged assets
are situated and to take possession of such assets; and/or
	 
	 	5.7.3.	 	to conduct the business of the Mortgagor in the name, place and stead of the
Mortgagor and to do all such things in respect of or incidental to the
business as the Mortgagor would itself have been able to do including, but
without limiting the generality of the aforegoing -






	 	(a)	 	to engage and dismiss staff in its absolute
discretion and on such terms as it may determine;




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	 	(b)	 	to purchase goods of every description
provided that the Creditor shall be restricted to the normal course
of the Mortgagor’s business;
	 
	 	(c)	 	subject to the landlord’s consent, to hire,
cancel and vary the terms of leases of the premises of the Mortgagor;
	 
	 	(d)	 	to lock and change the locks on the
premises of the Mortgagor;
	 
	 	(e)	 	to receive, uplift, open and keep in its
custody post whether addressed to the business or the Mortgagor;
	 
	 	(f)	 	to operate on any banking account conducted
by the Mortgagor;
	 
	 	(g)	 	to discharge the debts of the Mortgagor and
other liabilities including its liabilities to the Creditor in terms
hereof,
	 
	 	(h)	 	to sue for and recover from any debtor of
the Mortgagor all and any debts and monies owing by such debtors to
the Mortgagor,
	 
	 	(i)	 	to draw and endorse cheques, bills of
exchange, promissory notes and other negotiable instruments; and/or






	 	5.7.4.	 	to discharge the Mortgagor’s liabilities to it in terms hereof by selling
the business of the Mortgagor and any of its assets either as a going concern
or piecemeal and whether as principal or agent as the Creditor in its absolute
discretion determines, by public auction or, on reasonable notice to the
Mortgagor not exceeding 7 (seven) days, by private treaty;
	 
	 	5.7.5.	 	to take over the Mortgagor’s business as a going concern or the Mortgagor’s
assets at a valuation placed thereon by an independent chartered accountant or
other independent expert appointed by the Creditor’s auditors;
	 
	 	5.7.6.	 	to apply for and procure the transfer of all licences, quotas, permits,
registration certificates and the like that may have been issued to the
Mortgagor;
	 
	 	5.7.7.	 	to sign or subscribe on behalf of the Mortgagor to all applications or
agreements for or transfer of licences, quotas, permits, registration
certificates and the like which relate to the assets hereby mortgaged;




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	 	5.7.8.	 	to sub-let, cede and/or assign and/or transfer or novate such rights and/or
obligations in respect of any leases or sub-leases of the premises of the
Mortgagor;
	 
	 	5.7.9.	 	to do all such other acts as may be necessary or desirable to record the
sale, disposal and/or transfer, as the case may be, of any assets hereby
mortgaged; and/or
	 
	 	5.7.10.	 	to employ such other remedies and to take such other steps against the
Mortgagor as are in law allowed.






	 	 	 	The Creditor shall apply the net proceeds of any recovery or sale in terms of
clause 5.7.4 or the valuation determined in terms of clause 5.7.5, as the case may
be, in reduction or discharge, as the case may be, of the Mortgagor’s obligations
to the Creditor without prejudice to the Creditor’s rights to recover from the
Mortgagor any balance which may remain owing to the Creditor after the exercise of
such rights. Should the total amount collected recovered by the Creditor exceed the
full amount of the Mortgagor’s obligations to the Creditor for the time being, the
Creditor shall be obliged to refund such excess to the Mortgagor.
	 
	 	5.8.	 	The Creditor is hereby empowered irrevocably and in rem suam, with power of
substitution and delegation to exercise all or any of its rights, authorities and
powers in terms of this bond and the bond for this purpose shall be deemed to be an
irrevocable power of attorney by the Mortgagor in favour of the Creditor.
	 
	 	5.9.	 	Without making any representations or warranties that any existing or future
landlord has agreed thereto, the Mortgagor hereby cedes and undertakes to cede, for
the duration of this bond, as collateral security for the Mortgagor’s obligations to
the Creditor in terms hereof its tights under any present or future lease or sub-lease
of the Premises and shall deliver to the Creditor all agreements of lease and
sub-lease relating to each such premises.
	 
	 	5.10.	 	The Mortgagor shall be bound punctually to pay on the due dates thereof all
rents for which it may be liable as the lessee or sub-lessee of the premises and shall
produce on demand to the Creditor proper receipts for the payments of such rents. In
the event of the Mortgagor at any time failing to pay such rents on the




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	 	 	 	due dates thereof, the Creditor shall have the right at its discretion to pay such
rents and forthwith to recover the same from the Mortgagor without prejudice,
holder of this bond as set out in 6 hereof.
	 	5.11.	 	Notwithstanding anything to the contrary herein contained, this bond will
become executable against the Mortgagor if the Mortgagor commits any breach of any of
the terms and conditions, of this bond and/or or upon the occurrence of any of the
Events of Default (as defined in the Facility Agreement).
	 
	 	5.12.	 	A certificate signed by any authorised representative of the Creditor (whose
authority and appointment need not be proved) reflecting the amount of the
indebtedness of the Mortgagor under this bond, the fact that same is due and payable,
the rate of interest payable thereon and the date from which interest is reckoned :






	 	5.12.1.	 	will be prima facie proof of the amount of the indebtedness and the facts
stated therein;
	 
	 	5.12.2.	 	will constitute sufficient particularity for the purposes of pleading and
trial in any action; and
	 
	 	5.12.3.	 	will, in the absence of evidence to the contrary, be sufficient proof for
the purposes of obtaining provisional sentence, summary judgment or any other
judgment or order;






	 	 	 	and the onus shall be on the Mortgagor to prove that such amount is not owing to
the Creditor.
	 
	 	5.13.	 	No relaxation or indulgence and no extension of time which may be granted by
the Creditor, nor failure by the Creditor to enforce compliance with the provisions of
this bond and (without derogating from the generality of the aforegoing) no acceptance
of payments after due date, whether on one or more occasions, shall be deemed to be a
waiver in respect of any past or future breach of any of the terms and conditions of
this bond or estop or preclude the Creditor from insisting on and enforcing, without
notice, its full rights hereunder.
	 
	 	5.14.	 	No negligent acts or omissions by or on behalf of the Creditor in
implementing its rights hereunder shall found a cause of action against the Creditor.




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	 	5.15	 	5.15.1. Mortgagor hereby chooses domicilium citandi et executandi for all
purposes under this bond, whether in respect of court process, notices or other
documents or communications of whatsoever nature, at :




[


South Africa

Facsimile:

Telephone                                        ]



with a copy to :



[


South Africa

Facsimile:

Telephone                                        ]





	 	5.15.2.	 	The Mortgagor may change its domicilium citandi et executandi to another
physical address in the Republic of South Africa provided that the change
shall become effective on the 7th (seventh) day after the latest receipt of
the notice.
	 
	 	5.15.3.	 	Any notice to the Mortgagor contained in a correctly addressed envelope and
:






	 	(a)	 	sent by prepaid registered post to the
Mortgagor at its domicilium citandi et executandi; or
	 
	 	(b)	 	delivered by hand to a responsible person
during ordinary business hours at the Mortgagor’s domicilium citandi
et executandi,




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	 	 	 	shall be deemed to have been received, in the case of sub-clause (a)
above, on the 10th (tenth) day after posting (unless the
contrary is proved) and, in the case of sub-clause (b) above, on the day
of delivery, provided such day is a business day or otherwise on the next
following business day.






	 	5.15.4.	 	Notwithstanding anything to the contrary herein contained, a written notice
or communication actually received by the Mortgagor shall be an adequate
written notice or communication to it notwithstanding that it was not sent to
or delivered at its chosen domicilium citandi et executandi.
	 
	 	5.15.5.	 	“Business day” means any day except a Saturday, Sunday or public holiday.






	 	5.16.	 	Notwithstanding anything to the contrary herein contained, the Creditor
shall be entitled to allocate any moneys paid by the Mortgagor to the Creditor either
to the Capital Sum, any part of the Capital Sum, interest or the Additional Sum as the
Creditor may determine.
	 
	 	5.17.	 	This bond shall not novate, cancel or affect any other securities at present
held or which may from time to time be held by the Creditor and the Creditor shall be
entitled to take action against the Mortgagor under this bond and/or on any other
securities in any of the events referred to in clause 5.11 of this bond or otherwise.
	 
	 	5.18.	 	Without in any way limiting or affecting any of the other provisions of this
bond, and in addition thereto, all amounts from time to time owing by the Mortgagor to
the Creditor shall bear interest at the Default Rate as defined in the Facility
Agreement.
	 
	 	5.19.	 	The Mortgagor shall be bound and obliged to pay the costs of preparing these
presents and the registration thereof, including stamp duty thereon and upon
cancellation of this bond, the costs of such cancellation.
	 
	 	5.20.	 	All costs and expenses that may be incurred by the Creditor in order to
enforce or preserve the Creditor’s rights hereunder or in terms of the Principal
Indemnity or in suing for the recovery of any sum that may become due which is secured
hereunder, including but without limiting the generality of the aforegoing, the




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	 	 	 	costs on the attorney and own client scale of all legal proceedings, the costs of
execution, the costs and expenses of all notices that may be given in terms of this
bond, all premiums of insurance that may be paid by the Creditor in terms hereof,
any other payments or disbursements that may be made by the Creditor on behalf of
the Mortgagor and the costs and expenses relating to the due performance by the
Mortgagor of all its obligations hereunder shall be paid by the Mortgagor.
	 
	 	5.21.	 	All amounts outstanding under the Principal Indemnity in excess of the
capital sum shall be paid by the Mortgagor (including without limitation amounts
arising from fluctuations in exchange rates between currencies which amounts will
enable the Mortgagor to repay the pay the Principal Indemnity to the Creditor in such
amounts and currency denominations as required in terms of the Principal indemnity).
	 
	 	5.22.	 	All the costs and amounts referred to in clauses 5.19, 5.20 and 5.21 shall
be secured hereunder in addition to the Capital Sum and the Additional Sum. The
Creditor shall not, however, be precluded from recovering from the Mortgagor any such
costs, expenses and other amounts as are referred to in clauses 5.19, 5.20 and 5.21
that may exceed the Additional Sum.
	 
	 	5.23.	 	Notwithstanding anything to the contrary contained herein, the Creditor
shall be entitled to exercise the rights granted to it hereunder only if, at the time,
there is an actual obligation or indebtedness owing by the Mortgagor to the Creditor.
	 
	 	5.24.	 	This bond may only be cancelled when all the Mortgagor’s obligations and
indebtedness to the Creditor have been discharged.
	 
	 	5.25.	 	The provisions of this bond shall be and continue to be of full force and
effect and binding on the Mortgagor, subject to the provisions of clauses 5.24 and
5.25, notwithstanding :






	 	5.25.1.	 	any variation or amendment of, addition to or deletion from any terms of
the Facility Agreement or any Project Document (as defined in the Facility
Agreement);
	 
	 	5.25.2.	 	any indulgence which the Creditor may grant to the Mortgagor. No such
indulgence shall constitute a waiver of any of the Creditor’s rights under
this bond;




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	 	5.25.3.	 	the Creditor’s receipt of any dividend or other benefit in any liquidation
or judicial management of the Mortgagor or any compromise whether in terms of
any statute or the common law; and/or
	 
	 	5.25.4.	 	the Creditor’s release in whole or in part of any other security and/or any
surety for the obligations of the Mortgagor; and/or
	 
	 	5.25.5.	 	the cancellation, termination, determination or breach of any agreement to
which the Mortgagor became a party by any person whatsoever or the application
of section 6C of the Usury Act, No 73 of 1968, as amended; and/or
	 
	 	5.25.6.	 	any intermediate discharge or settlement of or fluctuation in any
indebtedness or obligation referred to in or contemplated by the preamble;
and/or
	 
	 	5.25.7.	 	the winding-up or any change in the name or constitution of the Mortgagor.






	 	5.26.	 	Subject to clause 15 of the Facility Agreement, the Creditor may at any time
and without reference to the Mortgagor, cede its right, title and interest in and to
this bond to any person or persons whatsoever (even if such cession entails an
increase in the number of creditors) in which event any reference to the Creditor in
this bond shall be deemed to be a reference to any such successor in title of the
Creditor.
	 
	 	5.27.	 	Should the Mortgagor at any time fail to comply with any of its obligations
under this bond, the Creditor shall be entitled on behalf of the Mortgagor to take the
necessary remedial measures in the exercise of its absolute discretion and at the cost
of the Mortgagor but without prejudice and in addition to the Creditor’s rights in
terms hereof arising from the Mortgagor’s breach in question.






	6.	 	In this bond, including the preamble, words importing any one gender shall include the other
two genders and words signifying the singular shall include the plural and vice versa and any
reference to “person” includes a natural person, a company and an association or body of
persons whether natural or not and whether incorporated or unincorporated.




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	7.	 	This bond is a general notarial bond as contemplated in terms of section 102 of the
insolvency Act No. 24 of 1936.






	8.	 	The Mortgagor hereby consents to the Creditor taking any legal proceedings for enforcing any
of its rights under this collateral bond for recovery of any monies claimable hereunder, or
otherwise, in the High Court of any district having jurisdiction in regard to the person of
the Mortgagor and the Creditor shall be entitled to High Court costs, on the attorney and
own-client scale.






	9.	 	This bond shall be governed and interpreted by the substantive laws of the Republic of South
Africa.






	10.	 	If any of the provisions of this bond are found to be unlawful, unenforceable or invalid such
provision shall be deemed to be severable from the remaining provisions of this bond and
shall, to the extent that the same is unlawful, unenforceable or invalid, be deemed to be pro
non scripto.




THUS DONE AND SIGNED AT [ 
                
                
       ] on the       
               
                
               
        of       
               
                
               
        2000 in the presence of the undersigned witnesses.




AS WITNESSES:




	 	 	 	 	 	 	 	 	 
	1.
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2.
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 
	 

	 	 	 	 	 	q.q.

QUOD ATTESTOR,

NOTARY PUBLIC	 	 






-228-









 






SPECIAL POWER OF ATTORNEY




I/We, the undersigned,




duly authorised hereto by a Resolution of




THE GREATER NELSPRUIT UTILITY COMPANY (PROPRIETARY) LIMITED




(Registration No. 98/164432/07)



do hereby nominate, constitute and appoint [                                                            ] and/or [
                                                            ]
and/or [                                         ] jointly and severally and each
with power of substitution, to be our lawful attorneys and agents in our name, place and stead to
appear before any Notary Public and then and there to sign and execute on my behalf a general
notarial bond in accordance with the draft hereto annexed which has been initialled by me and the
witnesses at the foot of each page thereof for identification purposes, with the power to make any
amendments thereto at any time before registration thereof which the Notary and/or the Registrar of
Deeds may consider to be necessary and/or desirable for the purposes of execution and/or
registration thereof and which amendments shall require the consent of the Creditor, including the
amendment of any incorrect or incomplete description of any person, property or title deed therein
referred to and generally, for effecting the purposes aforesaid, to do or cause to be done
whatsoever shall be requisite as fully and effectually for all intents and purposes as we might or
could do if personally present and acting herein — hereby ratifying, allowing and confirming all
and whatsoever our said attorneys and agents shall lawfully do, or cause to be done, by virtue of
these presents.




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SIGNED at    
               
              
              
             on this the 
                
    day of           
              
               
              
       [2000] in the presence of the undersigned witnesses.




AS WITNESSES:




	 	 	 	 	 	 	 	 	 
	1
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 






-230-









 





EXTRACT FROM A RESOLUTION PASSED AT A MEETING OF THE GREATER NELSPRUTT UTILITY COMPANY
(PROPRIETARY) LIMITED (Registration No. 98/164432/07) (the “Company”) HELD AT ON THE
DAY OF 2000




RESOLVED:



THAT the Company pass a GENERAL NOTARIAL BOND for the following amounts in favour of [ ], as
Trustee on behalf of the GNUC Security Trust (the “Creditor”) in terms of the




draft bond tabled before the meeting:




RESOLVED FURTHER:





	I.	 	the sum of R125 000 000 (one hundred and twenty five million Rand) (hereinafter referred to
as the “Capital Sum”), as a continuing covering security for and in respect of all sums of
money and all obligations which the Mortgagor may at present or in the future are or incur to
the Creditor under and in terms of the Principal Indemnity.






	II.	 	an additional sum of R12 500 000 (twelve million five hundred thousand Rand) (hereinafter
referred to as the “Additional Sum”) to secure and cover the further amount arising under the
Principal Indemnity (including without limitations amounts arising from fluctuations in
exchange rates between currencies which amounts will enable the Mortgagor to pay the Principal
Indemnity to the Creditor in such amounts and currency denominations as required in terms of
the Facility Agreement and contingent costs as set forth in clauses 5.19, 5.20 and 5.21 of the
draft bond.






	III.	 	All interest on all indebtedness by this bond shall bear interest at same rate that is
applicable to the Default Rate (as defined in the Facility Agreement)




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THAT [                                         ] and/or [               
           
               ] on behalf of the Company, be and is
hereby authorised to sign all documents and
do all things necessary to give effect to the aforegoing.





THIS IS TO CERTIFY THAT the above is a true extract of the Resolution passed at a
meeting of the Board of Directors of the above Company, duly called and
constituted and that the original minute of this resolution has been inserted in
the minute book of the Company.



 



CHAIRPERSON




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MINUTES OF A GENERAL MEETING OF THE SHAREHOLDERS OF THE GREATER NELSPRUIT
UTILITY COMPANY (PROPRIETARY) LIMITED (Registration No. 98/164432/07) (the
“Company”) HELD AT ON THE  DAY OF  [2000]



 





RESOLVED in terms of section 228 of the Companies Act No. 61 of 1973 as amended:





	1	 	THAT notice convening the meeting for the purpose of taking the undermentioned resolution in
terms of section 228 of the Companies Act No. 61 of 1973 as amended, be waived;






	2.	 	THAT the Company pass a general notarial bond in terms of the draft tabled before the meeting
in favour of GNUC Security Trust in the following amounts in respect of credit facilities
granted:






	I.	 	the sum of R125 000 000 (one hundred and twenty five million Rand) (hereinafter referred to
as the “Capital Sum”), as a continuing covering security for and in respect of all sums of
money and all obligations which the Mortgagor may at present or in the future are or incur to
the Creditor under and in terms of the Principal Indemnity.






	II.	 	an additional sum of R12 500 000 (twelve million five hundred thousand Rand) (hereinafter
referred to as the “Additional Sum”) to secure and cover the further amount arising under the
Principal Indemnity (including without limitations amounts arising from fluctuations in
exchange rates between currencies which amounts will enable the Mortgagor to pay the Principal
Indemnity to the Creditor in such amounts and currency denominations as required in terms of
the Facility Agreement and contingent costs as set forth in clauses 5.19, 5.20 and 5.21 of the
draft bond).






	III.	 	All interest on all indebtedness by this bond shall bear interest at the Default Rate (as
defined in the Facility Agreement).




-233-









 











FURTHER RESOLVED:



THAT the directors of the Company be and they are hereby authorised to proceed with the aforegoing
and also to settle all terms and conditions relating to the bond.




	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 






-234-









 








C E R T I F I C A T E




I, the undersigned,



hereby certify that:





	1.	 	I am auditor to THE GREATER NELSPRUIT UTILITY COMPANY (PRORIETARY) LIMITED] (Registration No.
98/164432/07)

(the “Company”).






	2.	 	2.1. The Company has been registered in the Companies Registration Office and is still on the
register and is entitled to commence business and exercise borrowing powers. The necessary
returns have been made to that office and to the best of my knowledge and belief there is no
action pending for the removal of the Company from the Register of Companies and I am unaware
of circumstances that might result in such action being instituted.






	 	2.2.	 	The Company’s Memorandum and Articles of Association have since its
registration not been amended either so as to restrict its borrowing powers as
reflected in the Memorandum and Articles of Association thereof, or in any other
material way.
	 
	 	2.3.	 	No resolution has been passed for the voluntary winding-up of the Company.
	 
	 	2.4.	 	No application for winding-up of the Company has been presented to the Court.
	 
	 	2.5.	 	The Company is not under judicial management.






	3.	 	The passing by the Company of a GENERAL NOTARIAL BOND for:




-235-









 












	I.	 	the sum of R125 000 000 (one hundred and twenty five million Rand) (hereinafter referred to
as the “Capital Sum”), as a continuing covering security for and in respect of all sums of
money and all obligations which the Mortgagor may at present or in the future are or incur to
the Creditor under and in terms of the Principal Indemnity.
	 
	II.	 	an additional sum of R12 500 000 (twelve million five hundred
thousand Rand) (hereinafter referred to as the “Additional Sum”) to
secure and cover the further amount arising under the Principal
Indemnity (including without limitations amounts arising from
fluctuations in exchange rates between currencies which amounts will
enable the Mortgagor to pay the Principal Indemnity to the Creditor
in such amounts and currency denominations as required in terms of
the Facility Agreement and contingent costs as set forth in clauses
5.19, 5.20 and 5.21 of the draft bond).
	 
	III.	 	All interest on all indebtedness by this bond shall bear interest at
the Default Rate (as defined in the Facility Agreement)
	 
	 	 	in favour of GNUC Security Trust does not constitute a contravention
of sections 38 or 226 of the Companies Act neither will any part of
the funds provided from the aforementioned transaction be used in
contravention of sections 38 or 226 of the Companies Act; there is
nothing in the Company’s Memorandum and Articles of Association
prohibiting the passing of the aforesaid bond nor is the Company a
“shareblock company” as defined in the Shareblocks Control Act No 59
of 1980.






	4.	 	The aforesaid transaction does not contravene the provisions of regulation 3(1)(f)(ii) of the
Exchange Control Regulations of 1961, as amended.






	 	4.1	 	The present directors of the Company are:
	 
	 	4.2	 	The present shareholders of the Company are:
	 
	 	4.3	 	The registered office of the Company is:




-236-









 










[


South Africa

Facsimile:

Telephone                                         ]



DATED at    
                
                
    on this          day
of                
                
        [2000].




	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 











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SCHEDULE 13

PART II

FORM OF SPECIAL NOTARIAL BOND

(a “Collateral Bond”)

(referred to in clause 12.14.2 of the Facility Agreement)




	 	 	 
	 

	 	Prepared by me
	 
	 	 
	 

	 	CONVEYANCER
	 

	 	[                    ]






SPECIAL NOTARIAL BOND

(BY VIRTUE OF A POWER OF ATTORNEY)




BE IT HEREBY MADE KNOWN



THAT

appeared before me, REGISTRAR OF DEEDS at [                    ] he, the said Appearer, being duly authorised thereto
by a power of attorney granted to him by THE GREATER NELSPRUIT UTILITY COMPANY (PROPRIETARY)
LIMITED.



dated the     
               
              
        day of       
               
                
   drawn up at           
               
               and
witnessed in accordance with law, which said power of attorney was this day exhibited to me.




AND THE SAID APPEARER DECLARED THAT WHEREAS:





	 	1.	 	His principal, the said





THE GREATER NELSPRUIT UTILITY COMPANY (PROPRIETARY) LIMITED

(Registration No.                    )

(the “Mortgagor”)




is indebted to




GNUC SECURITY TRUST

(the “Creditor”)



as hereinafter stated;




-238-









 









	 	1.1.	 	THE GREATER NELSPRUIT UTILITY COMPANY (PROPRIETARY) LIMITED (Registration
Number 98/164432/07) (the “Mortgagor”) has concluded a Concession Contract for the
design, construction, financing, rehabilitation, operation, maintenance and management
of the supply of water services and works (the “Project”) located in the Mpumalanga
Province, Republic of South Africa;
	 
	 	1.2.	 	The “Lenders” (as defined in the Facility Agreement) have entered into
certain finance facilities with the Mortgagor to provide loans to the Mortgagor for
the purposes of funding the obligations of the Mortgagor under the Concession Contract
and such facilities are governed by a facility agreement (hereinafter referred to as
the “Facility Agreement”);
	 
	 	1.3.	 	At the instance and request of the Mortgagor , the Trustee for the time being
of the GNUC Security Trust (hereinafter together with permitted successors in title
and permitted assigns, referred to as the “Creditor”) has issued, or will issue, to
the Lenders under the Facility Agreement an irrevocable undertaking (hereinafter
referred to as the “Trustee Undertaking”) pursuant and subject to the Facility
Agreement;
	 
	 	1.4.	 	The Mortgagor is firmly held and bound to the Creditor under a principal
indemnity, as defined in the Facility Agreement (thereinafter referred to as the
“Principal Indemnity”) pursuant to which the Mortgagor indemnifies and holds the
Creditor harmless against any liability, loss or costs the Creditor may suffer or
incur by reason or consequence of the Trustee Undertaking.




-239-









 










NOW THEREFORE:





	2.	 	In this collateral bond (including the preamble), unless inconsistent with the context, words
importing the masculine include the feminine and the neuter and words importing the singular
include the plural.






	3.	 	The Mortgagor is truly and lawfully indebted and held and firmly bound to the Creditor in the
aggregate sums of:






	 	3.1.	 	the sum of R125 000 000 (one hundred and twenty five million Rand)
(hereinafter referred to as the “Capital Sum”), as a continuing covering security for
and in respect of all sums of money and all obligations which the Mortgagor may at
present or in the future owe or incur to the Creditor under and in terms of the
Principal Indemnity.
	 
	 	3.2.	 	an additional sum of R12 500 000 (twelve million five hundred thousand Rand)
(hereinafter referred to as the “Additional Sum” to secure and cover the further
amount arising under the Principal Indemnity (including without limitations amounts
arising from fluctuations in exchange rates between currencies) which amounts will
enable the Mortgagor to pay the Principal Indemnity to the Creditor in such amounts
and currency denominations as required in terms of the Facility Agreement and
contingent costs as set forth in clause 18 below.
	 
	 	3.3.	 	All interest on all indebtedness by this collateral bond shall bear interest
at same rate that is applicable to the Default Rate (as defined in the Facility
Agreement).






	4.	 	AND as security for the indebtedness referred to in clauses 3.1 and 3.2 above, a Principal
Bond No. B                     has been registered in the Deeds Registry at [                     ] (the “Principal Bond”) over the
property thereby specially hypothecated;






	5.	 	AND WHEREAS the Creditor requires the indebtedness of the Mortgagor under the Principal Bond
to be further secured by the hypothecation of the undermentioned property as collateral
security thereof;






	 	5.1.	 	As a continuing covering security for the due payment of :




-240-









 












	 	5.1.1.	 	the Capital Sum and the Additional Sum as set out in clauses 3.1 and 3.2
hereof; and
	 
	 	5.1.2.	 	all interest payable in accordance with clause 3.3 hereof; and
	 
	 	5.1.3.	 	all future advances, debts or demands (over and above the Capital Sum and
interest thereon) which are lawfully secured and recovered under this
collateral bond, in respect of premiums of insurance, expenses of any notice,
further amounts arising under the Facility Agreement (including without
limitation amounts arising from fluctuations in exchange rates between
currencies), charges incurred in suing for the recovery of any sum due
hereunder and moneys disbursed for stand licences, government and municipal
fees and taxes, stamp duty and other charges and costs on an attorney and own
client scale incurred as above set forth as also any charges and costs on an
attorney and own client scale which may be incurred by the Creditor in
defending any action which may be instituted by or against it arising out of
or in connection with this collateral bond, together with interest thereon.






and all other sums of money apart from the aforegoing claimable in terms of this
collateral bond or that may at any time be or become due and owing to the Creditor
arising from any cause whatsoever and for the due performance of the conditions of
this collateral bond, the Mortgagor binds to and in favour of the Creditor
specially as a first mortgage all the Mortgagor’s movable property and effects
specified in the schedule annexed hereto, marked “Annexure A”, as updated from time
to time (the “Mortgage Rights”) :




	6.	 	All sums due hereunder shall be paid free of exchange and
without deduction or set off of whatsoever nature in such
currency and at [            
               
               
                
  ] Acct. No. [         
               
               
               
      ] or at such other places as the
Creditor may from time to time direct.
	 
	7	 	The Mortgagor shall for so long as this bond is in force :




-241-









 












	 	7.1.	 	keep all the assets specified in Annexure A in good order and condition, fair
wear and tear excepted;
	 
	 	7.2.	 	unless the Creditor otherwise agrees, obtain and maintain insurance coveting
risks, in relation to the assets specified in Annexure A, as stipulated in the
Facility Agreement.






	8.	 	The Mortgagor, for so long as this bond remains in force gives to the Creditor the
undertakings stipulated in the Facility Agreement which shall be read as if specifically
incorporated herein.






	 	9.1.	 	If this bond becomes executable under clause 10, the Creditor shall, subject
to the terms of the Facility Agreement, be entitled (but not obliged), without notice
to the Mortgagor and without first obtaining any order or judgment :






	 	9.1.1.	 	to claim and recover from the Mortgagor forthwith any and all sums for the
time being secured by this bond, whether then due for payment or not; and/or
	 
	 	9.1.2.	 	for the purpose of perfecting its security hereunder to enter upon the
premises of the Mortgagor or any other place where any of the mortgaged assets
are situated and to take possession of such assets; and






	 	 	 	the Creditor shall apply the net proceeds of any recovery in reduction or
discharge, as the case may be, of the Mortgagor’s obligations to the Creditor
without prejudice to the Creditor’s rights to recover from the Mortgagor any
balance which may remain owing to the Creditor after the exercise of such rights.
Should the total amount collected/ recovered by the Creditor exceed the full amount
of the Mortgagor’s obligations to the Creditor for the time being, the Creditor
shall be obliged to refund such excess to the Mortgagor.
	 
	 	9.2.	 	The Creditor is hereby empowered irrevocably and in rem suam, with power of
substitution and delegation to exercise all or any of its rights, authorities and
powers in terms of this bond and the bond for this purpose shall be deemed to be an
irrevocable power of attorney by the Mortgagor in favour of the Creditor.




-242-









 












	10.	 	Notwithstanding anything to the contrary herein contained, this bond will become executable
against the Mortgagor if the Mortgagor commits any breach of any of the terms and conditions
of this bond and/or upon the occurrence of any of the Events of Default (as defined in the
Facility Agreement).






	11.	 	A certificate signed by any authorised representative of the Creditor (whose authority and
appointment need not be proved) reflecting the amount of the indebtedness of the Mortgagor
under this bond, the fact that same is due and payable, the rate of interest payable thereon
and the date from which interest is reckoned :






	 	11.1.	 	will be prima facie proof of the amount of the indebtedness and the facts
stated therein;
	 
	 	11.2.	 	will constitute sufficient particularity for the purposes of pleading and
trial in any action; and
	 
	 	11.3.	 	will, in the absence of evidence to the contrary, be sufficient proof for
the purposes of obtaining provisional sentence, summary judgment or any other judgment
or order,






	 	 	and the onus shall be on the Mortgagor to prove that such amount is not owing to the
Creditor.
	 
	12.	 	No relaxation or indulgence and no extension of time which may be granted by the Creditor,
nor failure by the Creditor to enforce compliance with the provisions of this bond and
(without derogating from the generality of the aforegoing) no acceptance of payments after due
date, whether on one or more occasions, shall be deemed to be a waiver in respect of any past
or future breach of any of the terms and conditions of this bond or estop or preclude the
Creditor from insisting on and enforcing, without notice, its full rights hereunder.






	13.	 	No negligent acts or omissions by or on behalf of the Creditor in implementing its rights
hereunder shall found a cause of action against the Creditor.




-243-









 












	14.	14.1.	Mortgagor hereby chooses domicilium
citandi et executandi for all purposes under
this bond, whether in respect of court
process, notices or other documents or
communications of whatsoever nature, at the
following addresses :




[


South Africa

Facsimile:

Telephone                                        ]



with a copy to :



[


South Africa

Facsimile:

Telephone                                         ]





	 	14.2.	 	The Mortgagor may change its domicilium citandi et executandi to another
physical address in the Republic of South Africa provided that the change shall become
effective on the 7th (seventh) day after the latest receipt of the notice.
	 
	 	14.3.	 	Any notice to the Mortgagor contained in a correctly addressed envelope and:






	 	14.3.1.	 	sent by prepaid registered post to the Mortgagor at its domicilium citandi
et executandi; or
	 
	 	14.3.2.	 	delivered by hand to a responsible person during ordinary business hours at
the Mortgagor’s domicilium citandi et executandi,






	 	 	 	shall be deemed to have been received, in the case of clause 14.3.1 above, on the
10th (tenth) day after posting (unless the contrary is proved) and, in the case of
clause 14.3.2 above, on the day of delivery, provided such day is a business day or
otherwise on the next following business day.




-244-









 






	 	14.4.	 	Notwithstanding anything to the contrary herein contained, a written notice
or communication actually received by the Mortgagor shall be an adequate written
notice or communication to it notwithstanding that it was not sent to or delivered at
its chosen domicilium citandi at executandi.
	 
	 	14.5.	 	“Business day” means any day except a Saturday, Sunday or public holiday.






	15.	 	Notwithstanding anything to the contrary herein contained, the Creditor shall be entitled to
allocate any moneys paid by the Mortgagor to the Creditor either to the Capital Sum, any part
of the Capital Sum, interest or the Additional Sum as the Creditor may determine.






	16.	 	This bond shall not novate, cancel or affect any other securities at present held or which
may from time to time be held by the Creditor and the Creditor shall be entitled to take
action against the Mortgagor under this bond and/or on any other securities in any of the
events referred to in clause 10 of this bond or otherwise.






	17.	 	Without in any way limiting or affecting any of the other provisions of this bond, and in
addition thereto, all amounts from time to time owing by the Mortgagor to the Creditor shall
bear interest at the Default Rate as defined in the Facility Agreement.






	18.	 	18.1. The Mortgagor shall be bound and obliged to pay the costs of preparing these presents
and the registration thereof, including stamp duty thereon and upon cancellation of this bond,
the costs of such cancellation.







	 	18.2.	 	All costs and expenses that may be incurred by the Creditor in order to
enforce or preserve the Creditor’s rights hereunder or in terms of the Principal
Indemnity or in suing for the recovery of any sum that may become due which is secured
hereunder, including but without limiting the generality of the aforegoing, the costs
on the attorney and own client scale of all legal proceedings, the costs of execution,
the costs and expenses of all notices that may be given in terms of this bond, all
premiums of insurance that may be paid by the Creditor in terms hereof, any other
payments or disbursements that may be made by the Creditor on behalf of the Mortgagor
and the costs and expenses relating to the due performance by the Mortgagor of all its
obligations hereunder shall be paid by the Mortgagor.




-245-









 






	 	18.3.	 	All amounts outstanding under the Principal Indemnity in excess of the
capital sum shall be paid by the Mortgagor (including without limitation amounts
arising from fluctuations in exchange rates between currencies which amounts will
enable the Mortgagor to repay the pay the Principal Indemnity to the Creditor in such
amounts and currency denominations as required in terms of the Principal Indemnity).
	 
	 	18.4.	 	All the costs and amounts referred to in clauses 18.1, 18.2 and 18.3 shall
be secured hereunder in addition to the Capital Sum and the Additional Sum. The
Creditor shall not, however, be precluded from recovering from the Mortgagor any such
costs, expenses and other amounts as are referred to in clauses 18.1, 18.2 and 18.3
that may exceed the Additional Sum.






	19.	 	19.1. Notwithstanding anything to the contrary contained herein, the Creditor shall be
entitled to exercise the rights granted to it hereunder only if, at the time, there is an
actual obligation or indebtedness owing by the Mortgagor to the
Creditor.







	 	19.2	 	This bond may only be cancelled when all the Mortgagor’s obligations and
indebtedness to the Creditor have been discharged.






	20.	 	The provisions of this bond shall be and continue to be of full force and effect and binding
on the Mortgagor, subject to the provisions of clauses 19.1 and 19.2, notwithstanding :






	 	20.1.	 	any variation or amendment of, addition to or deletion from any terms of the
Facility Agreement or any Project Document (as defined in the Facility Agreement) to
which the Mortgagor is or may become a party;
	 
	 	20.2.	 	any indulgence which the Creditor may grant to the Mortgagor. No such
indulgence shall constitute a waiver of any of the Creditor’s rights under this bond;
and/or
	 
	 	20.3.	 	the Creditor’s receipt of any dividend or other benefit in any liquidation
or judicial management of the Mortgagor or any compromise whether in terms of any
statute or the common law;
	 
	 	20.4.	 	the Creditor’s release in whole or in part of any other security and/or any
surety for the obligations of the Mortgagor;




-246-









 






	 	20.5.	 	the cancellation, termination, determination or breach of any agreement to
which the Mortgagor became a party by any person whatsoever or the application of
section 6C of the Usury Act, No 73 of 1968, as amended;
	 
	 	20.6.	 	any intermediate discharge or settlement of or fluctuation in any
indebtedness or obligation referred to in or contemplated by the preamble;
	 
	 	20.7.	 	the winding-up or any change in the name or constitution of the Mortgagor.






	21.	 	The Mortgagor renounces the benefits arising from the legal exceptions non numerate pecuniae,
non causa debiti, errore calculi, revision of accounts, no value received, excussion, division
de duobus vel pluribus reis debendi and all other legal benefits and exceptions which might or
could be taken to the payment of the Capital Sum or the Additional Sum or any part thereof,
with the full force, meaning and effect whereof the Mortgagor declares itself to be fully
acquainted.






	22.	 	Subject to clause 15 of the Facility Agreement, the Creditor may at any time and without
reference to the Mortgagor, cede its right, title and interest in and to this bond to any
person or persons whatsoever (even if such cession entails an increase in the number of
creditors) in which event any reference to the Creditor in this bond shall be deemed to be a
reference to any such successor in title of the Creditor.






	23.	 	Should the Mortgagor at any time fail to comply with any of its obligations under this bond,
the Creditor shall be entitled on behalf of the Mortgagor to take the necessary remedial
measures in the exercise of its absolute discretion and at the cost of the Mortgagor but
without prejudice and in addition to the Creditor’s rights in terms hereof arising from the
Mortgagor’s breach in question.






	24.	 	In this bond, including the preamble, words importing any one gender shall include the other
two genders and words signifying the singular shall include the plural and vice versa and any
reference to “person” includes a natural person, a company and an association or body of
persons whether natural or not and whether incorporated or unincorporated.






	25.	 	If any of the provisions of this bond are found to be unlawful, unenforceable or invalid such
provision shall be deemed to be severable from the remaining provisions of this bond and
shall, to the extent that the same is unlawful, unenforceable or invalid, be deemed to be pro
non scripto




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	26	 	The Mortgagor hereby consents to the Creditor taking any legal proceedings for enforcing any
of its rights under this collateral bond for recovery of any monies claimable hereunder, or
otherwise, in the High Court of any district having jurisdiction in regard to the person of
the Mortgagor and the Creditor shall be entitled to High Court costs, on the attorney and own
client scale.






	27	 	This bond shall be governed and interpreted by the substantive laws of the Republic of South
Africa.




IN WITNESS WHEREOF I, the said Registrar, together with the Appearer, q.q., have subscribed to
these presents and have caused the seal of office to be affixed hereto.



THUS DONE AND EXECUTED at the office of the Registrar of Deeds at                                                            
on               
               
           day of    
               
               
               
            [2000].




	 	 	 
	 

	 	q.q

In my presence,
	 
	 	 
	 

	 	REGISTRAR OF DEEDS






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ANNEXURE A




-249-









 








	 	 	 
	 

	 	Prepared by me
	 
	 	 
	 

	 	CONVEYANCER
	 

	 	[Insert Conveyancer’s
	 

	 	details]






POWER OF ATTORNEY TO PASS BOND



I/We, the undersigned [                                         ], authorised hereto by a resolution of THE GREATER NELSPRUIT UTILITY
COMPANY (PROPRIETARY) LIMITED (Registration No. 98/17064/07), do hereby nominate, constitute and
appoint [             
               
             ] and/or
[               
               
           ] and/or
[                                         ],
jointly and severally and each with power of substitution to be my/our lawful attorney and agent,
in my/our name, place and stead to appear before the REGISTRAR OF DEEDS at [                     ] or wherever else may
be necessary and then and there on my/our behalf to pass and execute the annexed bond, with the
contents whereof and with the force and effect of the terms, conditions and exceptions wherein
contained I/we declare myself/ourselves to be acquainted; to deduct from the amount payable to
me/us thereunder the legal charges for the registration thereof and any commission which may be
payable by me/us to any agent in connection with the raising of the said bond; to make such
amendments in the said bond as may be required by the said Registrar and to cede to the Creditor/s
any policy or policies of insurance in accordance with the provisions of the said bond.



SIGNED at                                                            on this the         
                                                    day of
                                                            2000.




AS WITNESSES:




	 	 	 	 	 	 	 	 	 
	1.
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2.
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 






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SCHEDULE 13




PART III

FORM OF PLEDGE AND CESSION OF CLAIMS




PLEDGE OF SHARES AND CESSION OF CLAIMS




between




[RELEVANT SHAREHOLDER]




(the “Pledgor”)




and




[                                         ]




in its capacity as Trustee of the GNUC Security Trust




(the “Creditor”)




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	1.	 	As security for the obligations which [Relevant Shareholder] (a company and existing under
South African law) now has and may from time to time in the future have to the Creditor
arising from or out of the agreement between the Creditor and the Pledgor (the “Guarantee
Agreement”) pursuant to which the Pledgor irrevocably and unconditionally guarantees the
obligations of the Borrower under the terms of the Principal Indemnity, (as defined in the
Facility Agreement) dated [ 20, ] including any obligations which may arise from any
cancellation, termination or breach of the Guarantee Agreement, the Pledgor hereby :






	 	1.1.	 	pledges to and cedes in securitatem debiti in favour of the Creditor, which
accepts such pledge and cession, all of the Pledgor’s shares in The Greater Nelspruit
Utility Company (Proprietary) Limited (the “Company”) held by the Pledgor as at the
date hereof (the “Present Shares”) and any other shares in the Company which are
acquired by the Pledgor at any time after the date hereof (the “Future Shares”); (the
Present Shares and Future Shares hereinafter collectively referred to as the
“Shares”);
	 
	 	1.2.	 	cedes in securitatem debiti to the Creditor all claims of whatever nature
which the Pledgor now has or may from time to time in the future have against the
Company (the “Claims”).






	2.	 	In order to perfect the pledge of the Shares, the Pledgor undertakes forthwith to deliver to
the Creditor, all of the Pledgor’s share certificates in respect of the Present Shares and a
duly executed share transfer form, which shall be undated and blank as to transferee and
undertakes forthwith upon the acquisition of any Future Shares to deliver to the Creditor all
of the Pledgor’s share certificates in respect of such Future Shares and a duly executed share
transfer form, which shall be undated and blank as to transferee, to be retained by the
Creditor for the Pledgor’s and the Creditor’s respective rights and interests.






	3.	 	If the Pledgor commits a breach of any of the Pledgor’s obligations set out herein (including
any breach of the Guarantee Agreement) or if the Creditor becomes entitled to claim payment
from the Pledgor in respect of any of the obligations for which this pledge has been given,
the Creditor shall give written notice of such breach (the “Notice”) and if the Pledgor fails
to remedy the breach within the period provided for in clause 11.1(b) of




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	 	 	the Facility Agreement, the Creditor shall be entitled, but not obliged, without further
notice, to do any of the following:






	 	3.1.	 	cause all or any of the Shares to be sold either by public auction or private
treaty, as the Creditor in its sole and absolute discretion deems fit;
	 
	 	3.2.	 	acquire all or any of the Shares (without prejudice to the rights of the
Creditor to purchase such Shares at any such sale by public auction) at a price equal
to the fair value thereof which, in the absence of agreement, shall be determined by a
firm of auditors appointed for that purpose by the Creditor, acting as experts and not
as arbitrators and their decision shall be final and binding on the Pledgor;
	 
	 	3.3.	 	convey valid title in the Shares to any purchaser thereof (including the
Creditor); and/or
	 
	 	3.4.	 	recover the amount of the Claims ceded directly from the Company.
	 
	 	
The Creditor shall apply the net proceeds of any such sale or recovery in terms of clause 3
or the purchase price payable by the Creditor, as the case may be, after deducting
therefrom all costs and expenses incurred in or about the realisation of the Shares and the
exercise by the Creditor of its rights in reduction or discharge, as the case may be, of
the Pledgor’s indebtedness to the Creditor. Any surplus monies remaining after payments in
terms of clause 3 shall accrue to and be paid to the Pledgor. All of the aforegoing is
without prejudice to such other rights as the Creditor may have at law.






	4.	 	In the event of that the Creditor becomes entitled for any reason to exercise the rights set
out in clause 3 above, the Pledgor hereby irrevocably and in rem suam nominates, constitutes
and appoints the Creditor as the Pledgor’s attorney and agent in the Pledgor’s name, place and
stead :






	 	4.1.	 	to sign and execute all such documents and to do all such things as it in its
sole and absolute discretion may consider to be necessary or desirable to give effect
to this Pledge of Shares and Cession of Claims;
	 
	 	4.2.	 	to receive from the Company all dividends which may become payable in respect
of the Shares or any of them;
	 
	 	4.3.	 	to appoint any person as the Pledgor’s proxy or representative to attend
meetings of shareholders of the Company, to vote at any such meetings of shareholders
and to represent the Pledgor in all respects at such meetings.




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	5.	 	The Pledgor shall render to the Creditor such assistance as the Creditor may require for the
purpose of enforcing its rights in respect of the Claims and/or to prove the amount of the
Claims or any portion thereof.






	6.	 	If for any reason whatsoever the Company or any of its members or directors fail to recognise
this Pledge of Shares and Cession of Claims or to give effect to any of the terms hereof, the
Pledgor hereby irrevocably and in rem suam nominates, constitutes and appoints the Creditor
with power of substitution as the Pledgor’s attorney and agent in the Pledgor’s name, place
and stead to exercise the Pledgor’s votes as a shareholder of the Company for any of the
following purposes :






	 	6.1.	 	to remove the directors thereof and to take all steps necessary or desirable
to achieve that end; or
	 
	 	6.2.	 	to appoint such persons as directors of the Company as the Creditor in its
sole and absolute discretion deems fit.






	7.	 	The Pledgor hereby absolves the Creditor absolutely from any liability for any loss or damage
which the Pledgor may suffer as a consequence, directly or indirectly, of the Creditor
lawfully exercising any of the Creditor’s rights set out herein.






	8.	 	During the subsistence of this pledge, the Pledgor gives to the Creditor the undertakings
stipulated in the Facility Agreement which shall be read as if specifically incorporated
herein.






	9.	 	If as a result of a breach of this Pledge, the Creditor is entitled to exercise its rights
under clause 3 above, the Creditor shall be entitled, without notice to the Pledgor, to claim
payment of any and all amounts for which this Pledge is given and to exercise all or any of
the rights set out in clause 3 above, whether or not the due date for payment has otherwise
arrived.






	10.	 	The provisions of this agreement shall continue to be of full force and effect and binding on
the Pledgor notwithstanding the following :






	 	10.1.	 	any amendment or variation to any of the terms of the Facility Agreement or
any Project Document (as defined in the Facility Agreement);
	 
	 	10.2.	 	the temporary extinction of any of the Pledgor’s obligations to the
Creditor, it being recorded that this agreement is a continuing covering security in
favour of the Creditor;




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	 	10.3.	 	any indulgence which may be shown or given by the Creditor to the Pledgor.
No such indulgence shall constitute a waiver of any of the rights of the Creditor, who
shall not thereby be precluded from exercising any rights against the Pledgor which
may have arisen in the past or which might arise in the future;
	 
	 	10.4.	 	the Creditor’s receipt of any dividend or other benefit in any liquidation
or judicial management, compromise or composition; or
	 
	 	10.5.	 	the Creditor’s release in whole or in part of any other security and/or any
other person to any suretyship or other undertaking.






	11.	 	The Creditor shall at any time and for any reason and without recourse to the Pledgor be
entitled to cede and assign any of its rights under this Guarantee to a third party for the
sole purpose of transferring those rights to a replacement Creditor.






	12.	 	The Pledgor hereby consents to the jurisdiction of the Witwatersrand Local Division of the
High Court of South Africa in respect of any proceedings which may be instituted against the
Pledgor pursuant to or in connection with any of the provisions of this agreement.






	13.	 	The Pledgor chooses domicilium citandi et executandi (“domicilium”) for the purpose of
receiving any notice, the serving of any process and for any other purpose arising from this
agreement, at:
	 
	 	 	[                                                            ]
	 
	 	 	The Pledgor shall be entitled from time to time, by written notice to the
Creditor, to vary the Pledgor’s domicilium to any other address which is not a
post office box or poste restante. Any notice given to the Pledgor at the
Pledgor’s domicilium for the time being which :






	 	13.1.	 	is delivered by hand shall be deemed to have been received by the Pledgor at
the time of delivery;
	 
	 	13.2.	 	is posted to the Pledgor by prepaid registered post shall be deemed to have
been received by the Pledgor on the tenth (10th) day after the date of posting.






	14.	 	No addition to, variation, or consensual cancellation of this agreement shall be of any force
or effect unless in writing and signed both by the Creditor and by the Pledgor.




-255-









 












	15.	 	All costs of and incidental to this agreement including the stamp duty payable thereon shall
be borne and paid by the Pledgor.






	16.	 	This agreement shall be governed and interpreted by the substantive laws of the Republic of
South Africa.




SIGNED by the Parties and witnessed on the following dates and at the following places
respectively:



THUS DONE AND SIGNED at  
                
               
        this        
               
                
  day of             
               
             2000




	 	 	 	 	 
	 

	 	for and on behalf of	 	 
	 

	 	[                                        ]	 	 
	 

	 	By	 	 
	 
	 	 	 	 
	 

	 	 

who warrants his/her authority hereto

(as Pledgor)
	 	 
	 
	 	 	 	 
	THUS DONE AND SIGNED
at____  this day of _____ 2000	 	 
	 
	 	 	 	 
	 

	 	for and on behalf of	 	 
	 

	 	[                                        ]	 	 
	 

	 	By	 	 
	 
	 	 	 	 
	 

	 	 

who warrants his/her authority hereto.

(as Creditor)
	 	 






-256-









 





SCHEDULE 13

PART IV

FORM OF TRUST DEED




TRUST DEED




For




THE GNUC SECURITY TRUST




entered into between:




Development Bank of Southern Africa Limited




(as Founder)




And




Nedcor Investment Bank Limited




(as Trustee)




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WHEREAS:





	A.	 	It is desired to constitute a Trust in order to guarantee certain obligations of The Greater
Nelspruit Utility Company (Pty) Ltd (the “Borrower”) as provided for in the Facility Agreement
between the Borrower, the Founder and any other Lenders referred to in the Facility Agreement.






	B.	 	Accordingly the Trust shall provide a Trustee Undertaking, against which the Trust will
receive a Principal Indemnity from the Borrower supported by the Secured Assets.






	C.	 	The Trustee will be the first Trustee of the Trust.






	D.	 	It is desired to record the terms and conditions upon which the Trust is to be formed and is
to operate.




NOW THEREFORE IT IS AGREED:





	1.	 	DEFINITIONS






	 	1.1	 	Unless the context otherwise requires, words importing the singular shall
include the plural and vice versa, words importing any gender shall include the
remaining genders, words importing persons shall include bodies corporate, words and
expressions defined in the Facility Agreement shall bear the same meaning in this Deed
unless otherwise stated and the following words and expressions when used in the Deed
shall have the following meanings, namely:





	 	 	 	 	 
	 

	 	the “Act”
	 	the Companies Act No. 61 of 1973, as amended or
superseded from time to time;
	 
	 	 	 	 
	 

	 	“Beneficiaries”
	 	Development Bank of Southern Africa Limited and any substitute,
assignee, cedee, transferee or other person now or hereafter from time to time
having the benefit of any obligations or liabilities owed by the Borrower
under the Facilities;
	 
	 	 	 	 
	 

	 	“Borrower”
“Capital”
	 	The Greater Nelspruit Utility Company (Proprietary) Limited;

the Trust Fund excluding any net Income;
	 
	 	 	 	 
	 

	 	“Commitment”
	 	in relation to a Lender, the amount set opposite its name in respect
of each Facility in the relevant part of






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	 	 	 	schedule I of the Facility Agreement or, as the case may
be, in any relevant Substitution Certificate, as reduced
by any relevant term of the Facility Agreement;
	 
	 	 	 	 
	 

	 	“Contributions”
	 	means, in relation to a Lender, the principal amount of the Loan
owing to such Lender at any relevant time;
	 
	 	 	 	 
	 

	 	“Facilities”
	 	the DBSA Loan Facility and the DBSA Underwriting/Partial Risk Facility
as provided for under the Facility Agreement;
	 
	 	 	 	 
	 

	 	“Facility Agreement”
	 	the Secured Term Loan Facility Agreement between the
Development Bank of Southern Africa Limited and the Borrower;
	 
	 	 	 	 
	 

	 	“Founder”	 	Development Bank of Southern Africa
Limited; 
	 
	 	 	 	 
	 

	 	“Income”
	 	
any income earned by the Trust Fund;
	 
	 	 	 	 
	 

	 	“Income Tax”
	 	shall include any tax or levy or duty or any other imposition now
leviable or which may hereafter become leviable under whatever name is
assigned thereto and irrespective of whether the same is levied by a national,
provincial or local government authority;
	 
	 	 	 	 
	 

	 	“Loan”
	 	means the aggregate principal amount owing to the Lenders under the Facility
Agreement at any relevant time;
	 
	 	 	 	 
	 

	 	“Majority Vote”
	 	a majority vote of the Beneficiaries which shall be a 66 2/3%
(sixty-six and two-thirds per cent) majority of the votes exercisable by all
the Beneficiaries, whether at a meeting or by way of a round-robin proposal,
for purposes of which each Beneficiary’s exercisable vote shall, prior to the
making of any Advance under any of the Facilities, be equal to that
Beneficiary’s Commitment and, subsequent to an Advance having been made under
any Facility, be equal to that Beneficiary’s Contribution, so that if only one
of the Lenders has made an Advance,






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	 	 	 	then only that Lender shall be entitled to vote as a
Beneficiary;
	 
	 	 	 	 
	 

	 	“Principal Indemnity”
	 	the Principal Indemnity referred to in clause 12.10 of the
Facility Agreement;
	 
	 	 	 	 
	 

	 	“Special Vote”
	 	a special vote of the Beneficiaries which shall be a 75,0%
(seventy-five comma nought per cent) majority of the votes exercisable by all
the Beneficiaries, whether at a meeting or by way of a round-robin proposal,
for purposes of which each Beneficiary’s vote shall be determined as set out
in the definition of Majority Vote;
	 
	 	 	 	 
	 

	 	the “Trust”
	 	the Trust constituted in terms of this Deed;
	 
	 	 	 	 
	 

	 	“Trustee”
	 	in the first instance shall mean Nedcor Investment Bank Limited and
thereafter its successors in office for the time being, including any Trustees
assumed hereunder;
	 
	 	 	 	 
	 

	 	“Trustee
Undertakings”
	 	the undertaking of the Trustee referred to in clause
12 of the Facility Agreement;
	 
	 	 	 	 
	 

	 	“Trust Fund”
	 	(a) the sum of R100 (one hundred Rand) settled by the Founder upon the
Trustee in terms of clause 2 hereof;

	 
	 	 	 	 
	 

	 	 	 	(b) all other
sums of money, property or assets hereinafter
acquired, whether pursuant to or in connection with
the Principal Indemnity, the Facility Agreement or
any of the Secured Assets, or otherwise, for the
purpose of the Trust;

	 
	 	 	 	 
	 

	 	 	 	(c) the
Principal Indemnity and the Secured Assets; and

	 
	 	 	 	 
	 

	 	 	 	(d) all
investments and property and unexpended or
accumulated or undistributed Income, of which the
Trustee may from time to time stand possessed.












-260-









 












	 	1.2	 	The headnotes used in this Deed are inserted for reference purposes only and
shall not be used in the construction or interpretation of this Deed or the paragraphs
to which they refer.
	 
	 	1.3	 	If any provision in a definition is a substantive provision conferring rights
or imposing obligations on any party, notwithstanding that it is in the definition
clause, effect shall be given to it as a substantive provision of this Deed.






	2.	 	SETTLEMENT
	 
	 	 	The Founder hereby settles upon the Trust the sum of R100 (one hundred Rand) which will
be utilised by the Trustee in accordance with its powers hereunder. The Trustee hereby
agrees to act as such and to accept the said sum for the benefit of the Beneficiaries
hereunder and upon and subject to all the terms and conditions herein contained.
	 
	3	 	NAME
	 
	 	 	The Trust hereby constituted shall be styled and known as the “GNUC Security Trust”.
	 
	4	 	OBJECTS
	 
	 	 	The Trustee will own, stand possessed of and administer the Trust Fund and carry out its
functions and exercise its rights and duties hereunder for the following main purposes
only, namely to issue the Trustee Undertaking and to receive, hold, administer and
enforce its rights under the Principal Indemnity and in and to the Secured Assets and
matters incidental thereto.
	 
	5	 	COMMENCEMENT
	 
	 	 	The Trust shall commence on the date of execution of this Deed.
	 
	6	 	IRREVOCABILITY AND REGISTRATION






	 	6.1	 	The settlement hereby made is irrevocable.
	 
	 	6.2	 	The Trustee shall cause the Trust to be registered and take whatever steps
are necessary for that purpose.






	7	 	INCOME AND CAPITAL






	 	7.1	 	All monies received by the Trust shall be applied by it in making the
following payments in the order set out in this clause 7.
	 
	 	7.2	 	Out of the Income the Trustee shall:






	 	7.2.1	 	pay all costs, expenses and disbursements and satisfy every
liability incurred by it in the execution of the powers and provisions
contained in




-261-









 






	 	 	 	this Deed, including but not limited to the costs of furnishing security
which may be required notwithstanding the provisions of clause 9.5;
	 
	 	7.2.2	 	pay all interest, fees, charges and other costs due to the
Lenders under the Trustee Undertaking;
	 
	 	 	 	provided that -
	 
	 	7.2.3	 	to the extent that the Income is inadequate for any of these
purposes, the Trustee shall apply such Income in accordance with the Facility
Agreement; and
	 
	 	7.2.4	 	to the extent that there is surplus Income, the Trustee
shall add it to the capital of the Trust Fund after paying or providing for
any tax due on it.






	 	7.3	 	All Capital received by the Trust, including but not limited to capital
payments by the Borrower under the Principal Indemnity or capital amounts arising out
of the realisation of the Secured Assets, shall subject to the provisions of clause
7.2, be applied in repaying all amounts due to the Lenders under the Trustee
Undertaking and shall be allocated in accordance with such ranking as may exist
between the Facilities and further pursuant to the provisions of the Facility
Agreement.
	 
	 	7.4	 	Any surplus monies remaining as part of the Trust Fund after making the
payments referred to in clauses 7.2 and 7.3 above shall accrue to and be paid to the
Borrower.






	8	 	FACILITIES






	 	8.1	 	The Trust shall enter into the Trustee Undertaking and Principal Indemnity
substantially on the terms included in the Facility Agreement or on such other terms
as the Trustee may approve.
	 
	 	8.2	 	The Trustee shall, subject to the further provisions of this Deed, administer
the Principal Indemnity and the Secured Assets in accordance with the terms and
conditions of the Trustee Undertaking and the terms and conditions of the Facility
Agreement.
	 
	 	8.3	 	If the Trustee becomes obliged to perform any of the Trust’s obligations
under the Trustee Undertaking, the Trustee shall enforce the Trust’s rights and
remedies available under the Principal Indemnity and, if necessary to enable the Trust
to




-262-









 






	 	 	 	meet its obligations under the Trustee Undertaking, under the Security Documents
and such other remedies as may be available to it at law, promptly. The Trustee may
take such action as it is entitled to take to protect the interests of the
Beneficiaries. Notwithstanding anything to the contrary herein contained, the
Trustee shall not be obliged to take any action to recover any amounts owing by the
Borrower under the Principal Indemnity or any grantor in respect of the Secured
Assets if the Trust does not have the financial resources to do so and in such
event, the Trustee may decline to take any such action until such time as the
Beneficiaries shall have provided the necessary financial resources to the Trust to
enable it to do so or the Trustee shall have received from the Beneficiaries
assurances and security to its satisfaction in this regard.






	9	 	TRUSTEES






	 	9.1	 	The Trustee is hereby appointed as the first Trustee of the Trust and hereby
accepts its appointment as such.
	 
	 	9.2	 	The Trustee in office from time to time shall, with the prior written consent
of the Beneficiaries, be entitled to appoint additional Trustees whether to fill any
vacancy arising on the death, retirement or disqualification of any Trustee, or for
any other reason.
	 
	 	9.3	 	Each additional Trustee appointed in terms hereof shall execute a written
acceptance of such appointment mutatis mutandis in accordance with the provisions of
clause 10.4 below and shall execute an agreement pursuant to which it agrees to adhere
to the Facility Agreement and any other agreement to which the Trust is then a party.
	 
	 	9.4.	 	If there be more than one Trustee in office at any time then the Trustees, in
the exercise of their respective functions and duties, but subject to the terms of the
Facility Agreement:






	 	9.4.1	 	shall meet together for the despatch of business, adjourn
and otherwise regulate meetings and the manner of convening the same as they
may deem fit;
	 
	 	9.4.2	 	shall except in respect of questions involving the taking up
or making of any loans or the granting or cession of any security (all of
which matters




-263-









 






	 	 	 	require the unanimous vote of all Trustees or a direction from the
Majority Lenders) or as otherwise provided in this Deed, determine all
questions arising at all meetings by a majority of votes;
	 
	 	9.4.3	 	may meet by way of telephone conference or in such other
manner as the Trustees may in their sole discretion determine.






	 	9.5	 	None of the Trustees from time to time holding office shall be required to
furnish security, whether individually or collectively, to the Master of the High
Court or to any other Government official or body of whatsoever nature for the
administration of the Trust and the need for the furnishing of any such security is
hereby specifically dispensed with, whether the same may be required under the Trust
Property Control Act or any other law or enactment or regulation from the time being
in force.
	 
	 	9.6	 	Subject to clause 11.6 below, the Trustee may from time to time delegate to
any committee or to any other person or company appointed by it, any specific duty or
assignment.
	 
	 	9.7	 	A resolution in writing signed by all the Trustees shall be as valid and
effective as if it had been passed at a meeting of the Trustees duly called and
constituted.






	10	 	PERIOD OF OFFICE OF THE TRUSTEE AND APPOINTMENT OF NEW TRUSTEE






	 	10.1	 	The Trustee shall be entitled to remain in office as such unless and until:






	 	10.1.1	 	the Trustee resigns as such on not less than 60 (sixty) days written notice
to the Founder;
	 
	 	10.1.2	 	the Trustee becomes disqualified in law to hold the office of trustee;
	 
	 	10.13	 	the Trustee is removed from office by a Majority Vote of the
Beneficiaries on 60 (sixty) days written notice to the Trustee; or
	 
	 	10.1.4	 	the Trustee is provisionally or finally wound-up or placed under judicial
management, curatorship or administration.






	 	10.2	 	Upon the termination of office of a Trustee as provided for in clause 10.1
above:






	 	10.2.1	 	that Trustee shall be discharged from the trusts in terms of this Deed and
shall not be responsible for any loss or costs occasioned by such termination,
provided that the Trustee shall not be so discharged in




-264-









 






	 	 	 	circumstances contemplated in clauses 10.1.1 or 10.1.3 until such time as
a successor trustee shall have been appointed in terms of the succeeding
provisions of this clause 10; and
	 
	 	10.2.2	 	the Founder shall immediately nominate a new trustee, who shall be subject
to approval by a Special Vote. In the event of the Founder failing, within a
reasonable time, to nominate a person for approval by Special Vote, the
Beneficiaries may themselves, by Special Vote, make such appointment.






	 	10.3	 	If a successor Trustee shall not have been appointed within 30 (thirty) days
after the occurrence of an event as referred to in clause 10.1, the Founder, any
Beneficiary or the Trustee may apply to any court of competent jurisdiction to appoint
a successor Trustee to act until such time, if any, as a successor Trustee shall have
been appointed as above provided above. Any successor Trustee so appointed by such
court shall immediately and without further act be superseded by any successor Trustee
appointed as provided above.
	 
	 	10.4	 	Any successor Trustee shall execute and deliver to the predecessor Trustee,
the Founder and the Beneficiaries, an instrument accepting such appointment and
thereupon such successor Trustee, without further act, shall become vested with all
the estates, properties, rights, powers, duties and trusts of the predecessor Trustee
in the Trust hereunder with like effect as if originally named as a Trustee herein;
but nevertheless upon the request of such successor Trustee, such predecessor Trustee
shall execute and deliver an instrument or instruments transferring to such successor
Trustee, upon the Trust herein expressed, all the estates, properties, rights, powers
and trusts of such predecessor Trustee and such predecessor Trustee shall duly assign,
transfer, deliver and pay over to such successor Trustee any property or monies then
held by such predecessor Trustee upon the Trust herein expressed, including an
agreement in terms of which the successor Trustee agrees to adhere to the Facility
Agreement or any other agreement by which the Trust is bound.
	 
	 	10.5	 	The Borrower shall be notified in writing of the appointment of any successor
Trustee pursuant to clauses 10.2, 10.3 or 10.4 above.










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	11	 	POWERS OF THE TRUSTEE
	 
	 	 	Subject to the terms of the Facility Agreement, the Trustee shall have
the powers mutatis mutandis as set out in Schedule Two of the Act
subject to any restrictions set out in this Deed and also shall have
the following powers and authorities in regard to its administration
of the Trust, namely:






	 	11.1	 	to enter into the Trustee Undertaking and, if necessary or desirable, to
amend it;
	 
	 	11.2	 	to enter into and, if necessary or desirable, to amend the Principal
Indemnity and to implement and administer and take any other action under or in
connection with the Principal Indemnity in accordance with its terms;
	 
	 	11.3	 	to take, hold and, if necessary, enforce or foreclose upon, the Secured
Assets;
	 
	 	11.4	 	instead of acting personally, to employ as far as it may consider it to be
necessary and to pay, any attorney, agent or other person to transact any business or
to do any act of whatsoever nature required to be done pursuant to this Deed, provided
that any payment which may be made pursuant thereto shall be refunded to the Trustee
out of the funds from time to time held by the Trust and provided that,
notwithstanding any such employment, the Trustee shall not be discharged from any of
its obligations, or performing any of its duties, hereunder;
	 
	 	11.5	 	to take and act upon any expert or professional advice;
	 
	 	11.6	 	subject to the consent of the Beneficiaries given by way of a Special Vote,
to delegate to any person the performance of all or any acts or the exercise of all or
any discretions, functions or duties which it may be entitled or obliged to perform or
exercise under this Deed and provided that, notwithstanding any such delegation, the
Trustee shall not be discharged from any of its obligations, or performing any of its
duties, hereunder;
	 
	 	11.7	 	to draw, accept, make or endorse cheques, bills of exchange, promissory notes
or any other negotiable or other instruments for and on behalf of the Trust and to
open and operate upon banking and building society accounts of any description;
	 
	 	11.8	 	to acquire and hold whether in its own name as Trustee for and on behalf of
the Trust, or in the name of the Trust, such movable or immovable property as it may
deem necessary for the purposes of the Trust;




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	 	11.9	 	to enter into any contract or arrangement and otherwise to transact any
business of whatsoever nature which it in its discretion considers to be necessary for
the proper fulfilment of its duties hereunder and to give effect to the purpose and
intent of this Deed;
	 
	 	11.10	 	to add to the Trust Fund by accepting additions thereto which may be made by
donations or by any other means;
	 
	 	11.11	 	to do such other things as are necessary or incidental to the objects of the
Trust or as may be authorised by a Majority Vote; or
	 
	 	11.12	 	to bind the Trust to the Facility Agreement.






	12	 	RECORDS
	 
	 	 	The Trustee shall keep true and proper records and books of account of
its administration of and dealings under the Trust and its assets, all
in such manner and form that such books at all times reflect the true
position of the Trust and shall appoint a firm of reputable auditors
to act as such to the Trust.
	 
	13	 	DUTIES OF THE TRUSTEE
	 
	 	 	In the event of the Trustee having knowledge of an Event of Default or
a Potential Event of Default, the Trustee shall forthwith give written
notice of the same to the Agent and the Beneficiaries. For all
purposes of this Deed, the Trustee shall be deemed not to have
knowledge of an Event of Default or Potential Event of Default unless
the Trustee has actual knowledge thereof or has been notified in
writing thereof by a Beneficiary or the Borrower.
	 
	14	 	TERMINATION






	 	14.1	 	The Trust constituted by this Deed shall terminate upon whichever of the
following first occurs, namely:






	 	14.1.1	 	the passing of a Special Vote to that effect by the Beneficiaries, who shall
be entitled to terminate the Trust when they consider there is good reason so
to do; or
	 
	 	14.1.2	 	on the date upon which all obligations, actual or contingent, of the
Borrower under the Principal Indemnity and all the obligations, actual or
contingent, of the Trust under the Trustee Undertaking, have been fully and
finally extinguished or discharged.




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	 	14.2	 	On termination of this Trust as provided in clause 14.1, the Trustee shall
pay or deliver the balance of the Trust Fund then existing to the Beneficiaries in
equal shares or in such other proportions as are then determined in terms of the
Facility Agreement or, if none are, as the Trustee decides are appropriate.






	15	 	PROCEDURE FOR MEETINGS OF BENEFICIARIES






	 	15.1	 	The Trustee may at any time convene a meeting of Beneficiaries.
	 
	 	15.2	 	The Trustee shall convene a meeting of Beneficiaries on receiving a written
request from Beneficiaries, the aggregate of whose Contributions at the time the
meeting is requested is not less than 30,0% (thirty comma nought per cent) of the
Loan. Such written request shall contain an indemnity in favour of the Trustee to its
satisfaction against all costs and expenses occasioned in the holding of that meeting;
and such written request shall set out the nature of the business for which the
meeting is requested.
	 
	 	15.3	 	Whenever the Trustee convenes a meeting of Beneficiaries it shall forthwith
give notice in writing to the Beneficiaries of the place, day and time of the proposed
meeting and of the nature of the business for which that meeting is to be held.
	 
	 	15.4	 	Every meeting of Beneficiaries shall be held at a place in Johannesburg
determined by the Trustee.
	 
	 	15.5	 	Unless all Beneficiaries agree otherwise, a minimum of 14 (fourteen) days
notice (exclusive of the day on which the notice is served or deemed to be served and
of the day on which the meeting is held) of every meeting shall be given to every
Beneficiary when the meeting is convened by the Trustee.
	 
	 	15.6	 	The accidental omission to give notice to, or the non-receipt of such notice
by, any Beneficiary shall not invalidate the proceedings at a meeting convened and
held in terms of that notice.
	 
	 	15.7	 	Every notice convening a meeting of Beneficiaries shall specify:






	 	15.7.1	 	the date, place and hour of the meeting;
	 
	 	15.7.2	 	the general nature of the business to be transacted; and
	 
	 	15.7.3	 	the terms of any resolution to be proposed at the meeting, including whether
such resolution shall be passed with a Majority Vote or a Special Vote or
unanimously.




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	 	15.8	 	A quorum for the meeting shall be the Lenders, present in person or by proxy,
the aggregate of whose Contributions exceeds 50,0% (fifty comma nought per cent) of
the Loan or, if no Advance has been made, the aggregate of whose Commitments exceeds
50,0% (fifty comma nought per cent) of the total of the Commitments of all the
Lenders.
	 
	 	15.9	 	No business shall be transacted at a meeting unless a quorum is present at
the commencement of and throughout the meeting.
	 
	 	15.10	 	If within half an hour from the time appointed for the meeting, a quorum is
not present, the meeting shall stand adjourned to such day and time being 7 (seven)
days thereafter and at the same place and time and at that adjourned meeting the
Beneficiaries present in person or by proxy entitled to vote shall constitute a quorum
for the transaction of business.
	 
	 	15.11	 	Only the business which was not dealt with at the meeting at which the
adjournment took place shall be considered and dealt with at such adjourned meeting.
	 
	 	15.12	 	Notice of an adjourned meeting shall be given forthwith in the same manner
as that in which notice of the original meeting was given save for the requirement to
give 14 (fourteen) days notice under clause 15.5 above.
	 
	 	15.13	 	The notice shall state that the Beneficiaries present at the adjourned
meeting will constitute a quorum.
	 
	 	15.14	 	The chairman of a meeting of Beneficiaries shall be a person who is
nominated in writing by the Trustee.
	 
	 	15.15	 	If the Trustee does not make such a nomination or the person nominated by
the Trustee is not present within 30 (thirty) minutes after the time fixed for the
holding of the meeting, then the Beneficiaries present at the meeting shall choose
another person to be the chairman.
	 
	 	15.16	 	The chairman






	 	15.16.1	 	with the consent of a meeting at which a quorum is present, may; and
	 
	 	15.16.2	 	if directed by a Majority Vote at a meeting at which a quorum is present,
shall, adjourn that meeting from time to time but no business shall be
transacted at any adjournment of that meeting except business which




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	 	 	 	might lawfully have been transacted at the meeting from which that
adjournment took place.






	 	15.17	 	At any meeting at which any resolution is put to a vote, every Beneficiary
present






	 	15.17.1	 	in person or by proxy; or
	 
	 	15.17.2	 	by its authorised representative, shall have a vote as determined in the
definitions of Majority Vote and Special Vote respectively at the time that
the vote is taken.






	 	15.18	 	Any instrument appointing a proxy shall be in writing under the hand of the
appointer or of its authorised representative. Such instrument shall automatically
entitle a proxy to speak at a meeting.
	 
	 	15.19	 	A person appointed to act as a proxy need not be a Beneficiary.

15.20 The chairman shall not have a casting vote.
	 
	 	15.21	 	A resolution in writing signed by all the Beneficiaries shall be regarded as
valid and effective for all purposes as a resolution passed at a meeting properly
convened and held in accordance with this clause 15. References in this Deed to
decisions being made by a round robin proposal are referring to resolutions
contemplated in this sub-clause.
	 
	 	15.22	 	Any such resolution may be contained in one document or in several documents
in the same or like form each signed by 1 (one) or more of the Beneficiaries and shall
be deemed to have been passed on the date on which it was signed by the last
Beneficiary to do so.
	 
	 	15.23	 	A record shall be kept of all resolutions and proceedings at each meeting
and shall be entered in a book to be provided and kept for that purpose by the
Trustee.
	 
	 	15.24	 	Any such record or any extract therefrom purporting to be signed by the
chairman of the meeting in question or by an authorised representative of the Trustee
shall be prima facie evidence of the matters stated therein.
	 
	 	15.25	 	Any Beneficiary shall be entitled at all reasonable times to inspect the
resolutions envisaged in terms of clause 15.23 above and to take copies of or extracts
from the same.






	16	 	REMUNERATION




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	 	 	The Trustee shall be entitled to be remunerated for its services as
Trustee on such basis as shall be agreed from time to time by the
Trustee and the Beneficiaries.
	 
	17	 	OTHER DEALINGS
	 
	 	 	The Trustee may, in its individual capacity, without liability to
account to either of the Founder or to any Beneficiary, make loans to,
accept deposits from and generally engage in any kind of business with
the Borrower, the grantors of security or any Beneficiary, without
limitation.
	 
	18	 	LEGAL PROCEEDINGS
	 
	 	 	The Trustee shall be entitled to sue and be sued in any court having
competent jurisdiction in respect of any matter arising out of the
Trust, the Trustee Undertaking, the Secured Assets, the Principal
indemnity or any matter relating thereto.
	 
	19	 	LIMITATION OF LIABILITY OF TRUSTEE






	 	19.1	 	The Trustee, solely in its capacity as Trustee, shall not be liable for any
loss sustained by the Trust or by the Beneficiaries out of whatsoever cause arising,
save and except for any loss sustained as a result of the negligence, wilful
wrongdoing or dishonesty of the Trustee.
	 
	 	19.2	 	The Trustee, solely in its capacity as Trustee and every attorney, agent or
other person appointed by the Trustee hereunder, are hereby indemnified out of the
Trust Fund against all actions, proceedings, costs, liabilities, claims, expenses and
demands in respect of any matter or thing done or omitted to be done in any way in the
execution of its office as Trustee or of its functions or duties as such, but this
indemnity shall not apply to claims arising out of its negligence, wilful wrongdoing
or its dishonesty.






	20	 	TAX
	 
	 	 	If the Trustee becomes liable for Income Tax arising out of the Trust
or the operation of the Trust (save in respect of any remuneration
payable under clause 16), the Trustee shall be entitled but not
obliged at any time and notwithstanding any previous decision on its
part not to do so, to claim from the Trust Fund or to refund to the
Trustee out of the Trust Fund the amount of the Income Tax for which
the Trustee at any time becomes or became so liable on such basis as
may be equitable with the intention of affording the Trustee a full
indemnity against the Income Tax for which it may become so liable.




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	21	 	ACCEPTANCE
	 
	 	 	The Trustee, by its signature hereto, accepts office as such and
undertakes to carry out all the duties, functions and obligations
incumbent upon it hereunder.
	 
	22	 	AMENDMENTS TO THIS TRUST DEED
	 
	 	 	Subject to the provisions of the Facility Agreement, the Trustee may
with the agreement of the Founder and with the approval of a Special
Vote of the Beneficiaries amend the provisions of this Deed in such
manner as they may determine including without limitation the
extension of the class of Beneficiaries hereunder and all such
amendments shall be binding on the parties hereto and on the
Beneficiaries and on all future Beneficiaries.
	 
	23	 	CESSION
	 
	 	 	The Beneficiaries shall be entitled to cede and assign all or part of
their rights hereunder and delegate all or part of their obligations,
to any person who is or becomes Lender under and so a party to the
Facility Agreement.






	 	24.4	 	Notwithstanding anything to the contrary herein contained a written notice or
communication actually received by a party shall be an adequate written notice or
communication to it notwithstanding that it was not sent to or delivered at its chosen
domicilium citandi et executandi or was not sent or delivered in accordance with
clause 24.3 above.
	 
	 	24.5	 	All notices and communications given hereunder shall be in writing.






	25	 	JURISDICTION
	 
	 	 	Each party submits to the non-exclusive jurisdiction of the High Court of South
Africa (Witwatersrand Local Division) or any successor to that court having
jurisdiction in respect of causes of action arising in and having its seat at
Johannesburg, for all purposes relating to this Deed.




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THUS DONE AND EXECUTED at                                        on                           
             2000




	 	 	 	 	 
	 

	 	for and on behalf of

Development Bank of Southern Africa Limited

by	 	 
	 
	 	 	 	 
	 

	 	 

who warrants his/her authority hereto.

(as Founder)
	 	 
	 
	 	 	 	 
	 

	 	for and on behalf of

Nedcor Investment Bank Limited

by	 	 
	 
	 	 	 	 
	 

	 	 

who warrants his/her authority hereto.

(as Founder)
	 	 






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SCHEDULE 13

PART V

FORM OF CESSION IN SECURITATEM DEBITI




Between




THE GREATER NELSPRUTT UTILITY COMPANY (PROPRIETARY)LIMITED




(the “Debtor”)




And




NEDCOR INVESTMENT BANK LIMITED

in its capacity as Trustee of the GNUC Security Trust




(the “Creditor”)




White & Case LLP

Johannesburg




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	1	 	INTERPRETATION






	 	1.1.	 	In this agreement, unless the context clearly otherwise indicates :






	 	1.1.1.	 	“Business day” means any day except a Saturday, Sunday or public holiday;

	 
	 	1.1.2.	 	“Cession” means a cession in securitatem debiti;
	 
	 	1.1.3.	 	“Claim” means all rights and interests of the debtor of whatsoever nature
and howsoever arising under the following:






	 	1.1.3.1	 	the Project Documents (as defined in the Facility Agreement);
	 
	 	1.1.3.2	 	the Project Accounts;
	 
	 	1.1.3.3	 	permits, to the extent permissible; and
	 
	 	1.1.3.4	 	agreements which:






	 	1.1.3.4.1	 	have been concluded between the Debtor and third parties
in connection with the Project at the date hereof and the
terms of which do not prohibit the Debtor from ceding its
rights and interest under them to a Creditor, and
	 
	 	1.1.3.4.2	 	will be concluded between the Debtor and third parties
in connection with the Project after the date thereof to
which the provisions of clause 6.3(b) shall apply.






	 	1.1.4.	 	the “Facility Agreement” means the agreement entered into between the
Lenders (as defined in the Facility Agreement) and the Debtor as borrower in
terms whereof the Debtor has borrowed from the Lenders in the aggregate, an
amount of R125 000 000 (one hundred and twenty five million Rand) subject to
the terms and conditions as set out in the Facility Agreement;






	 	1.1.5.	 	the “Obligations” means the due payment of every sum of money which may at
any time hereafter be or become owing by the Debtor to the Creditor under
and/or arising from the Principal Indemnity and for the due performance of
every other obligation which the Debtor may now be




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	 	 	 	or become bound to perform in favour of the Creditor under and/or arising
from the Principal Indemnity;
	 
	 	1.1.6.	 	“Principal Indemnity” means the indemnity given by the Debtor to the
Creditor in clause 12.10 of the Facility Agreement;
	 
	 	1.1.7	 	the “Project” means the project to be implemented by the
Debtor consisting of the design, construction, financing, rehabilitation,
operation, maintenance and management of the supply of water services in the
Mpumalanga Province, Republic of South Africa.






	1.2.	 	In this agreement, unless the context otherwise requires :






	 	1.2.1.	 	the masculine gender includes the feminine gender and vice versa;
	 
	 	1.2.2.	 	the masculine gender includes the neuter and vice versa; and
	 
	 	1.2.3.	 	the singular includes the plural and vice versa.
	 






	1.3.	 	The headings to the clauses of this agreement are for reference purposes only
and shall not aid in the interpretation of the clauses to which they relate.
	 
	1.4.	 	
This agreement shall be binding on the executors, administrators, trustees,
assigns or liquidators (as the case may be) of the parties as fully and effectually as
if they had signed this agreement in the first instance and reference to any party
shall be deemed to include such party’s executors, administrators, trustees, assigns
or liquidators, as the case may be.
	 
	1.5.	 	
If any provision in a definition is a substantive provision conferring rights
or imposing Obligations on any party, not withstanding that it is in the definition
clause, effect shall be given to it as a substantive provision of this agreement.






	2.	 	THE CESSION
	 
	 	 	The Debtor cedes the Claims to the Creditor in securitatem debiti for the Obligations on
the terms and conditions contained in this agreement.
	 
	3.	 	DURATION
	 
	 	 	The Cession which is the subject matter of this agreement shall endure and be of force and
effect until the Obligations have been cancelled and all liability of the Debtor to the
Creditor under the Facility Agreement has been paid by the Debtor to the Creditor or
otherwise discharged.
	 
	4.	 	PRIOR RIGHTS,




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	 	 	Subject to the Facility Agreement, the Debtor warrants to the Creditor that no other
person, company or fine has any rights of any nature whatsoever in respect of the Claims
which rank prior to the Creditor’s rights in terms hereof, save for any claims which any of
the parties to any of the agreements specified in clause 1.1.3 may have as parties under
those agreements.
	 
	5.	 	POWER OF ATTORNEY






	 	5.1.	 	Subject to the terms of the Facility Agreement, the Debtor hereby appoints
the Creditor irrevocably and in rem suam with power of substitution to be its lawful
attorney and agent, and to sign all such documents and do all such things as may be
necessary or desirable to give effect to any steps taken by the Creditor in pursuance
of the rights and powers which the Creditor may have in terms of this agreement or at
common law.
	 
	 	5.2.	 	The Debtor shall render to the Creditor such assistance as the Creditor may
require for the purpose of enforcing its rights in respect of the Claims and/or to
prove the amount of the Claims or any portion thereof.
	 
	 	5.3.	 	If the Debtor commits a breach of any of the Debtor’s Obligations set out
herein or if the Creditor becomes entitled to claim payment from the Debtor in respect
of any of the Obligations for which this Cession has been given, the Creditor shall be
entitled, but not obliged, without notice to the Debtor and without first obtaining
any order of court, to recover the amount of the Claims ceded directly.
Notwithstanding anything to the contrary and without derogating from any rights which
the Creditor may have in terms of this agreement or at law, the Debtor shall be
obliged to notify the Creditor of any event which may entitle the Creditor to claim
payment from the Debtor in respect of any of the Obligations for which this Cession
has been given.
	 
	 	5.4.	 	The Creditor shall apply the net proceeds of such recovery in terms of clause
5.3. (after deducting therefrom all costs and expenses incurred in or about the
realisation of the Claims and the exercise by the Creditor of its rights in reduction
or discharge, as the case may be, of the Debtor’s indebtedness to the Creditor),
without prejudice to the Creditor’s right to recover from the Debtor any balance which
may remain owing to the Creditor after the exercise of such rights. All of




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	 	 	 	the aforegoing is without prejudice to such other rights as the Creditor may have
at law.
	 
	 	5.5	 	Any surplus monies remaining after payments in terms of clauses 5.3 and 5.4
shall accrue to and be paid to the Debtor.






	6.	 	GENERAL






	 	6.1.	 	No amendment, variation, addition or consensual cancellation of this
agreement or any provision or term thereof and no extension of time, waiver or
relaxation of any of the provisions or terms of this agreement shall be binding unless
recorded in a written document signed by the parties.
	 
	 	 	 	Any such extension, waiver or relaxation which is so given or made shall be
construed as relating strictly to the matter in respect whereof it was made or
given.
	 
	 	6.2.	 	No extension of time or waiver or relaxation of any of the provisions or
terms of this agreement shall operate as an estoppel against either party in respect
of its rights under this agreement, nor shall it operate so as to preclude such party
thereafter from exercising its rights strictly in accordance with this agreement.
	 
	 	6.3.	 	The Debtor hereby undertakes and warrants that it:






	 	(a)	 	has not, as at the date hereof entered into any agreement
restricting or excluding the transferability of the Claims that form the
object of this Cession (save for the permits referred to in clause 1.1.3.3,
and to the extent that there are agreements which by their terms or nature
exclude such transferability);
	 
	 	(b)	 	it will not enter into any agreements contemplated in clause
1.1.3.4.2 which restrict or exclude the transferability of the Debtor’s rights
and interests under them in terms of this Cession, without obtaining the prior
written consent of the Creditor to that restriction or exclusion, which
approval shall not be unreasonably withheld.
	 
	 	(c)	 	has no knowledge of any counterclaims that may extinguish the
Claims that form the object of this Cession;
	 
	 	(d)	 	has not, prior to this Cession, ceded the Claims that form
the object of this Cession to any other person or concern; but if it should so
happen




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	 	 	 	that the Debtor is in breach hereof, then this Cession shall operate as a
cession of the Debtor’s reversionary rights, including all rights of
action against the prior cessionary.






	 	6.4.	 	The Creditor agrees that it shall be the cessionary during such time as the
Cession, which is the subject matter of this agreement, remains of force and effect
and that it shall re-cede to the Debtor all the remaining rights after the Creditor’s
claim against the Debtor has been satisfied.






	7.	 	DOMICILIA CITANDI ET EXECUTANDI






	 	7.1.	 	The parties choose as their domicilia citandi et executandi for all purposes
under this agreement, whether in respect of court process, notices or other documents
or communications of whatsoever nature, the following addresses -






	 	7.1.1.	 	the Debtor:




16 Branders Street

Nelspruit, 1200

Facsimile (013)-755-2618

Attention: The Managing Director





	 	7.1.2.	 	the Creditor:




3rd Floor

1 Newtown Avenue

Killarney, 2193

Facsimile (011)-480-1774

Attention: Head: Project Management





	 	7.2.	 	Any notice or communication required or permitted to be given in terms of
this agreement shall be valid and effective only if in writing.
	 
	 	7.3.	 	Any party may by notice to the other parties change its domicilium citandi et
executandi to another physical address in the Republic of South Africa provided that
the change shall become effective on the 7th day after the latest receipt of the
notice.
	 
	 	7.4.	 	Any notice to a party contained in a correctly addressed envelope and -






	 	7.4.1.	 	sent by prepaid registered post to it at its domicilium citandi et
executandi; or




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	 	7.4.2.	 	delivered by hand to a responsible person during ordinary business hours at
its domicilium citandi et executandi;






	 	 	 	shall be deemed to have been received, in the case of clause 7.4.1. on the tenth
business day after posting (unless the contrary is proved) and, in the case of
clause 7.4.2., on the day of delivery, provided such day is a business day or
otherwise on the next following business day.
	 
	 	7.5.	 	Notwithstanding anything to the contrary herein contained, a written notice
or communication actually received by a party shall be an adequate written notice or
communication to it notwithstanding that it was not sent to or delivered at its chosen
domicilium.






	8.	 	This agreement shall be governed by the substantive laws of the Republic of South Africa.




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SIGNED by the parties and witnessed on the following dates and at the following places
respectively:



THUS DONE AND SIGNED at  
                
               
        this       
               
                   day of                                         2000




	 	 	 	 	 
	 

	 	for and on behalf of

THE GREATER NELSPRUIT

UTILITY COMPANY

(PROPRIETARY) LIMITED

by	 	 
	 
	 	 	 	 
	 

	 	 

who warrants his/her authority hereto.

(as Debtor)
	 	 
	 
	 	 	 	 
	THUS DONE AND SIGNED at     
               
              
       this       
               
                
   day of            
               
              2000
	 
	 	 	 	 
	 

	 	for and on behalf of

NEDCOR INVESTMENT BANK

LIMITED (Trustee)

by	 	 
	 
	 	 	 	 
	 

	 	 

who warrants his/her authority hereto.

(as Creditor)
	 	 






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SCHEDULE 13

PART VI

FORM OF GUARANTEE AGREEMENT




guarantee agreement




between




[relevant shareholder]




and




NEDCOR INVESTMENT BANK LIMITED




in its capacity as Trustee of the GNUC Security Trust




DATED                                         2000




white & case llp




johannesburg




-282-









 





Page



WHEREAS:





	1.	 	THE GREATER NELSPRUIT UTILITY COMPANY (PROPRIETARY) LIMITED (Registration Number 98/164432/07
(“the Debtor”) has secured a concession contract for the design, construction, financing,
rehabilitation, operation, maintenance and management of the supply of water services and
works (“the Project”);






	2.	 	The Lenders (as defined in the Facility Agreement) have entered into certain finance
facilities with the Debtor to provide loans to the Debtor for the purposes of the Project. All
the loans are governed by a Facility Agreement to be entered into between the Debtor and the
Lenders in respect of the loans (“the Facility Agreement”). The Security Trustee (herein
together with permitted successors in title and permitted assigns, referred to as “the
Trustee”) has issued or will issue, to the Lenders under the Facility Agreement an irrevocable
undertaking (herein referred to as “the Trustee Undertaking”);






	3.	 	The Debtor is firmly held and bound to the Trustee under the Principal Indemnity (as defined
in the Facility Agreement) pursuant to which the Debtor indemnifies and holds the Trustee
harmless against any liability, loss or costs the Trustee may suffer or incur by reason or
consequence of the Trustee having issued the Trustee Undertaking; and






	4.	 	[                     ] (“the Guarantor”) is a shareholder of the Debtor and has certain claims against the
Debtor and is prepared to guarantee the obligations of the Debtor to the Trustee in terms of
the Principal Indemnity.




NOW THEREFORE:



The Guarantor, herein represented by 
                
               
         in his capacity as    
               
              
        , and being duly authorised thereto in
terms of a resolution of the board of directors of the Guarantor, dated , hereby irrevocably and
unconditionally guarantees as a principal and independent obligation in favour of the Trustee, its
successors-in-title and assigns to pay to the Trustee any and all amounts which may be payable by
the Debtor to the Trustee in terms of or as a result of the Principal Indemnity and any subsequent
amendment or substitution thereof, subject to the limitations set out below.




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The debts and obligations of the Debtor arising out of the Principal Indemnity are hereinafter
referred to as the “Obligations”. The Obligations shall be secured by the Guarantor pledging its
shares in the Debtor to the Trustee and by the Guarantor ceding its claims against the Debtor to
the Trustee, in terms of the Pledge of Shares and Cession of Claims Agreement entered into by the
Guarantor dated contemporaneously herein (the “Pledge of Shares and Cession of Claims Agreement”).



The Guarantor and the Trustee agree that:





	1.	 	the Trustee shall be only be entitled to exercise its rights under this Guarantee and under
the Pledge of Shares and Cession of Claims Agreement upon the Debtor being duly called upon by
the Trustee to pay to the Trustee any and all amounts which may be payable by the Debtor to
the Trustee in terms of or as a result of the Principal Indemnity or as a result of a breach
by the Debtor of this Guarantee or the Pledge of Shares and Cession of Claims Agreement;






	2.	 	the liability of the Guarantor under this Guarantee is limited to the aggregate of such
amount(s) as shall be realised by the Trustee on the exercise by the Trustee of its rights
under the Pledge of Shares and Cession of Claims Agreement;






	3.	 	the Trustee shall be entitled to exercise its rights under this Guarantee by exercising its
rights under the Pledge of Shares and Cession of Claims Agreement and for the avoidance of
doubt, the Trustee shall not request or obtain (unless otherwise agreed) any monies from the
Guarantor arising from its obligations under this Guarantee other than by the Trustee
exercising its rights under the Pledge of Shares and Cession of Claims Agreement.






	 	3.1	 	The rights of the Trustee under this Guarantee shall in no way be affected or
diminished in the event that the Trustee at any time obtains additional suretyships,
guarantees, securities or indemnities in connection with the obligations of the
Debtor.
	 
	 	3.2	 	The Guarantee shall be continuing and shall remain in full force and effect
notwithstanding any fluctuation in or extinction for any period whatsoever of the
obligations and shall only terminate after all of the obligations have been fully




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	 	 	 	and finally performed and settled or through a discharge by the Trustee of the
Pledge of Shares and Cession of Claims Agreement or on termination of the Pledge of
Shares and Cession of Claims Agreement for whatever reason.
	 
	 	3.3	 	No alteration or variation of the Facility Agreement or any other present or
future agreement between the Debtor and the Trustee shall in any way release the
Guarantor from its liability hereunder (unless such release is an express term of such
alteration or variation or other agreement).
	 
	 	3.4	 	The Trustee shall be entitled, whether before or after the due dates for
payment or performance of the obligations, without reference or notification to the
Guarantor and without affecting its rights and the Guarantor’s liabilities hereunder,
to






	 	(a)	 	release (or omit to perfect) any other securities (including
suretyships and guarantees) held by it in respect of the obligations;
	 
	 	(b)	 	grant the Debtor extensions of time for payment; and
	 
	 	(c)	 	compound, or to make any other arrangements, with the Debtor
for the reduction or discharge of the Debtor’s indebtedness.






	 	3.5	 	If the Debtor is placed in liquidation (whether provisional or final) or
under judicial management or submits an offer of compromise or of composition, or is
party to a scheme of arrangement in terms of any company or insolvency law or in terms
of the common law, -






	 	(a)	 	the Guarantor shall not file any claim against the Debtor,
save with the prior written consent of the Trustee; and
	 
	 	(b)	 	the Guarantor’s liabilities in terms of this Guarantee shall
not be discharged or reduced and the obligations of the Debtor immediately
prior to such liquidation, judicial management, compromise, composition or
scheme of arrangement shall, for the purposes of this Guarantor, be deemed to
be unaffected by such event.






	 	 	 	The Guarantor shall not vote in favour of any resolution, or apply to any court for
an order, seeking to wind-up, or place under judicial management, the Debtor, save
with the prior written consent of the Trustee.




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	 	3.6	 	The Guarantor hereby represents and warrants to the Trustee that it has a
material interest in and receives benefit from entering into and binding itself under
this Guarantee.
	 
	 	3.7	 	In the event of any payment having the effect of reducing or discharging the
Debtor’s liability under the Facility Agreement whether made by the Guarantor or
otherwise, being set aside or reversed or revised for any reason whatsoever the
Guarantor will remain Liable to the Trustee under this Guarantee for the discharge of
any debt arising from or revived by the occurrence of any such event, even if such
event takes place after the termination of the Guarantor’s liability hereunder in
other respects.
	 
	 	3.8	 	The Guarantor shall refrain from taking or permitting to be taken any action
which may prevent, hamper or detrimentally affect the fulfilment by the Debtor of the
Obligations.
	 
	 	3.9	 	The Guarantor absolves the Trustee from all and any liability for any loss or
damage which the Guarantor may sustain as a result of the exercise by the Trustee of
its rights under this Guarantee or the omission by the Trustee to protect the
Guarantor’s interests in any way, otherwise than by reason of the gross negligence or
wilful misconduct of the Trustee, and the Guarantor indemnifies the Trustee
accordingly.
	 
	 	3.10	 	A certificate under the hand of any director or manager of the Trustee as to
any indebtedness of the Debtor and/or of the Guarantor to the Trustee under any of the
Principle Indemnity, this Guarantee, the Pledge of Shares and Cession of Claims
Agreement (as the case may be) or as to any other fact shall be prima facie evidence
of the indebtedness of the Debtor and/or the Guarantor to the Trustee or of such other
fact for the purposes of any application or action, judgment or order or for any
purposes whatsoever. It shall not be necessary to prove the appointment or the
authority of the person signing any such certificate and such certificate shall be
deemed to be sufficiently particular for the purposes of pleading or trial in any
action or other proceedings instituted by the Trustee against the Guarantor.




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	 	3.11	 	The Guarantor shall be liable to and shall reimburse the Trustee for all
expenses (including legal and out-of-pocket expenses on the attorney and own client
scale), charges and disbursements and fees of a like nature, including, without
limitation, all taxes, incurred by the Trustee in preserving, enforcing or defending,
or attempting to preserve, enforce or defend, any of its rights under this Guarantee
provided that if the Trustee is unsuccessful in so doing such expenses shall be borne
by the Trustee (in respect of legal costs on the attorney and own client scale) unless
the reason for such failure is the invalidity or unenforceability of such right or the
breach of any warranty (howsoever arising) which has been given by the Borrower under
the Facility Agreement.
	 
	 	3.12	 	The Guarantor hereby renounces all benefits arising from the exceptions non
numerate pecuniae, non causa debiti, errore calculi, beneficium excussionis et
divisionis and other legal benefits and exceptions, the force and effect of which it
hereby declares itself to be fully acquainted and agrees and declares that this
Guarantee is to be in addition and without prejudice to any other security now or
hereafter to be held by the Trustee.
	 
	 	3.13	 	The Guarantor represents and warrants that it has received all necessary
governmental, exchange control and other approvals and consents required for and in
connection with the giving of this Guarantee and represents and warrants that this
Guarantee is lawfully and validly given.
	 
	 	3.14	 	This Guarantee shall be governed by and construed in accordance with the laws
of the Republic of South Africa. The Guarantor hereby irrevocably and unconditionally
consents to the non-exclusive jurisdiction of the Witwatersrand Local Division of the
High Court of South Africa in regard to all matters arising from this Guarantee.
	 
	 	3.15	 	The parties hereto choose domicilia citandi et executandi for all purposes of
and in connection with this Guarantee at the following physical addresses situated in
the Republic of South Africa:




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	 	The Guarantor
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Telefax
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	The Trustee
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Telefax:	 	 	 	 
	 

	 	 	 	 

	 	 







	 	(a)	 	Any party hereto shall be entitled to change its domicilium
from time to time, provided that any new domicilium selected by it shall be a
physical address in the Republic of South Africa, and any such change shall
only be effective upon receipt of notice in writing by the other party of such
change.
	 
	 	(b)	 	All notices, demands and communications under the Guarantee
shall be in writing and all such notices, demands and communications or
payments intended for any party shall be made or given at such party’s
domicilium for the time being.
	 
	 	(c)	 	A notice sent by one party to another party shall be deemed
to be received:






	 	(i)	 	on the same day, if delivered by hand;
	 
	 	(ii)	 	on the same day of transmission if sent by
telefax and if sent by telefax with receipt received confirming
completion of transmission.






	 	(d)	 	Notwithstanding anything to the contrary herein contrary a
written notice or communication actually received by a party shall be an
adequate written notice or communication to it notwithstanding that it was not
sent to or delivered at its chosen domicilium citandi et executandi.






	 	3.16	 	Each and every provision of this Guarantee shall be severable from the
remainder of this Guarantee.




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	 	3.17	 	The Trustee shall at any time and for any reason and without recourse to the
Guarantor be entitled to cede and assign any of its rights under this Guarantee to a
third party.
	 
	 	3.18	 	This Guarantee supersedes any previous guarantee and understanding between
the Guarantor and the Trustee with respect to the subject matter of this Guarantee and
this Guarantee is the complete agreement of the Guarantor and the Trustee with respect
to the subject matter thereof.
	 
	 	3.19	 	No variation, modification or waiver of any provision or consensual
cancellation of this Guarantee, or consent to any departure therefrom, shall in any
way be of any force or effect unless confirmed in writing and signed by the Guarantor
and the Trustee and then such variation, modification, waiver, cancellation or consent
shall be effective only in the specific instance and for the purpose and to the extent
for which made or given.




THUS DONE AND SIGNED at  
                
               
        this        
               
                  day of                                         2000




	 	 	 	 	 	 	 
	 	 	for and on behalf of	 	 
	 
	 	 	 	 	 	 
	 

	 	by:	 	 	 	 
	 

	 	 	 	 

who warrants his/her authority hereto
	 	 
	 
	 	 	 	 	 	 
	THUS DONE AND SIGNED at     
               
              
       this       
               
                
   day of            
                             2000
	 
	 	 	 	 	 	 
	 	 	for and on behalf of	 	 
	 
	 	 	 	 	 	 
	 

	 	by:	 	 	 	 
	 

	 	 	 	 

who warrants his/her authority hereto
	 	 







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