Document:

EX-10.2

 

Exhibit 10.2

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

among

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE

and

ONEX PARTNERS LP

ONEX AMERICAN HOLDINGS II LLC

ONEX US PRINCIPALS LP

CGG EXECUTIVE INVESTCO, LLC

Dated 27 September 2004

 

 

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made as of the
27th day of September, 2004, among:

	 	1.	 	COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE (“CGG”), a French société anonyme
with a share capital of 23,363,436 euros having its registered office
at 1, rue Léon Migaux-Massy, 91300 with registered number 969 202 241
RCS Evry; and
	 
	 	2.	 	ONEX PARTNERS LP, a limited partnership organised under the laws of
Delaware, with its registered office at 1209 Orange Street, Wilmington,
Delaware 19801, U.S.A. c/o The Corporation Trust Company,
	 
	 	3.	 	ONEX AMERICAN HOLDINGS II LLC, a limited liability company
organised under the laws of Delaware with its registered office at 15,
East Dover Street, Dover (Kent County), Delaware 19901, U.S.A.,
	 
	 	4.	 	ONEX US PRINCIPALS LP, a limited partnership organised under the
laws of Delaware with its registered office at United Corporate
Services, 15 E. North Street, Dover, Delaware 19901, U.S.A.,
	 
	 	5.	 	CGG EXECUTIVE INVESTCO, LLC, a limited liability company organised
under the laws of Delaware with its registered office at 874, Walker
Road, Suite C, Dover (Kent County), Delaware, 19904, U.S.A.

The parties mentioned under (2) to (5) above, and one or more of their
affiliated entities and co-investors, shall be referred to collectively as the
“Subscribers”.

R E C I T A L S:

A. CGG and the Subscribers are parties to a subscription agreement, dated [•]
September 2004 (the “Subscription Agreement”) whereby the Subscribers have
agreed to acquire from CGG US$ 84,980,000 nominal amount 7.75% convertible
subordinated bonds due 2012 (the “Bonds”) convertible into ordinary shares of
CGG (the “Acquisition”);

B. The Subscribers wish to provide for certain matters relating to their
ownership of the Bonds and the registration under certain circumstances of the
CGG Shares (as defined below) into which the Bonds are convertible.

     NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, the parties agree as follows:

ARTICLE I

PURPOSE AND IMPLEMENTATION

          1.1 Purpose. The purpose of this Agreement is to provide for the granting
of certain rights to (i) the Subscribers and (ii) holders from time to time of
at least US$ 15 million in principal amount of the Bonds (“Qualified Holders”).

ARTICLE II

DEFINITIONS AND INTERPRETATION

          2.1 Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

          “Acquisition” shall have the meaning specified in the recitals.

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          “ADSs” shall mean American Depositary Shares.

          “Affiliate” shall mean, with respect to any party hereto, a Person
controlled directly or indirectly by such party or controlling directly or
indirectly such party or directly or indirectly under the same control as such
party, and the term “control” shall have the meaning set forth in Rule 405 of
the Securities Act (as defined below).

          “Agreement” means this Agreement, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with the terms hereof.

          “AMF” shall mean the French Autorité des Marchés Financiers.

          “Closing Date” shall mean the date of closing of the Acquisition.

          “CGG Shares” shall mean the ordinary shares of CGG, nominal value 2 euros
per share, and any shares into which such shares may be converted or exchanged
and any securities issued or distributed in respect thereof by way of stock
dividend, stock split or other distribution, recapitalization or
reclassification.

          “Demand Request” shall have the meaning specified in Section 3.3(a).

          “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as
amended, or any similar federal statute then in effect, and a reference to a
particular section thereof shall be deemed to include a reference to the
comparable section, if any, of any such similar federal statute.

          “Holder” shall mean the Subscribers and any Qualified Holders existing
from time to time.

          “Holder’s Counsel” shall mean counsel selected pursuant to Section 3.6 to
represent the Holders.

          “Indemnified Party” shall have the meaning specified in Section 3.5(a).

          “Majority Affiliate” shall mean shall mean, with respect to any party
hereto, a Person controlled directly or indirectly by such party or controlling
directly or indirectly such party or directly or indirectly under the same
control as such party, and the term “control” shall mean the power derived
from holding a majority of the voting rights of a Person other than a limited
partnership or from holding a majority of the voting rights of the general
partner of a Person that is a limited partnership.

          “Other Demand Holders” shall mean any Person who, pursuant to an agreement
entered into with CGG, has the right to request CGG to act to permit a listing
or public offering of all or part of such Person’s CGG Shares.

          “Person” shall mean a natural person, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or other entity or organization.

          “Qualified Holder” shall have the meaning specified in Section 1.1.

          “Registration Expenses” shall mean any and all expenses incident to
performance of or compliance with the provisions of Article III of this
Agreement or any underwriting agreement entered into in accordance therewith,
including, without limitation, (i) all registration, application, qualification
and listing fees and filing quotation fees of the SEC, a stock exchange or the
National Association of Securities Dealers, Inc. (the “NASD”) (including, if
applicable, the fees and expenses

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of any “qualified independent underwriter”, as such term is defined in the
By-laws of the NASD, and of its counsel), (ii) all reasonable fees and expenses
of complying with securities or blue sky laws (including reasonable fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), (iii) all reasonable road show,
printing, messenger and delivery expenses, (iv) all fees and expenses incurred
in connection with the listing of the Registrable Securities on any securities
exchange pursuant to Section 3.4(g) and all rating agency fees, (v) the fees
and disbursements of counsel in each relevant jurisdiction for CGG and of its
independent public accountants, including the expenses of any special audits
and/or “cold comfort” letters required by or incident to such performance and
compliance, (vi) the reasonable fees and disbursements of counsel selected
pursuant to Section 3.6 in connection with each such registration, (vii) all
fees and disbursements of underwriters customarily paid by the issuers or
sellers of securities, including liability insurance if CGG so desires or if
the underwriters so require, and the reasonable fees and expenses of any
special experts retained in connection with the requested registration, but
excluding underwriting discounts and commissions and transfer taxes, if any,
(viii) all reasonable fees and expenses incurred in connection with the
creation of ADSs, including the reasonable fees and disbursements of the
depositary for such ADSs that the depositary is not otherwise required to pay,
and (ix) other reasonable out-of-pocket expenses of the Subscribers.

          “Registration Statement” shall mean any registration statement (including
a Shelf Registration Statement or a registration statement covering ADSs) of
CGG that covers any Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.

          “Registrable Securities” shall mean any CGG Shares which are, prior to
listing or public offering, issuable upon conversion, exercise, exchange,
interest payment or principal repayment of the Bonds. For purposes of this
Agreement, any Registrable Securities will cease to be Registrable Securities
when (a) the Registration Statement in respect of such Registrable Securities
has been declared effective by the SEC and such Registrable Securities have
been disposed of pursuant to such Registration Statement, (b) such Registrable
Securities may be offered and sold pursuant to Rule 144 (or any similar
provision then in effect) under the Securities Act without registration, (c)
such Registrable Securities are sold by a Person in a transaction in which
rights under the provisions of this Agreement are not assigned in accordance
with this Agreement, or (d) such Registrable Securities cease to be
outstanding.

          “Rules” shall have the meaning specified in Section 5.8.

          “Securities Act” shall mean the U.S. Securities Act of 1933, as amended,
or any similar federal statute then in effect, and a reference to a particular
section thereof shall be deemed to include a reference to the comparable
section, if any, of any such similar federal statute.

          “Shelf Registration Statement” shall have the meaning specified in Section
3.3(b).

          “SEC” shall mean the U.S. Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act or the Exchange
Act.

          “Transfer” shall mean a transfer, sale, assignment, hypothecation or other
disposition, whether directly or indirectly pursuant to the creation of a
derivative security or otherwise, or the grant of an option or other right.

          2.2 Interpretation.

               (a) Whenever the words “include”, “includes” or “including” are used in
this Agreement they shall be deemed to be followed by the words “without
limitation”.

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               (b) The words “hereof”, “herein” and “herewith” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit and schedule references are to the articles,
sections, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.

               (c) The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term, and words
denoting any gender shall include all genders. Where a word or phrase is
defined herein, each of its other grammatical forms shall have a corresponding
meaning.

               (d) A reference to Subscribers or any party to any other agreement or
document shall include the Subscribers’ or party’s successors and permitted
assigns.

               (e) A reference to any legislation or to any provision of any legislation
shall include any amendment to, and any modification or re-enactment thereof,
any legislative provision substituted therefor and all regulations and
statutory instruments issued thereunder or pursuant thereto.

ARTICLE III

REGISTRATION RIGHTS

          3.1 Listings and Public Offerings.

     The terms and conditions governing a listing or public offering of CGG
Shares are set forth below.

          3.2 Incidental Registrations (“Piggyback Rights”).

               (a) Notification of Right to Include Registrable Securities. If CGG at
any time after the date hereof proposes to register securities of any such
class of securities for sale under the Securities Act (other than a
registration on Form S-4, F-4 or S-8, or any successor or other forms
promulgated for similar purposes, or otherwise for securities to be offered in
a transaction of the type referred to in Rule 145 under the Securities Act or
to employees of CGG pursuant to any employee benefit plan, respectively),
whether or not for sale for its own account, CGG will, at each such time, give
prompt written notice to all Holders of its Registrable Securities of its
intention to do so and of such Holders’ rights under this Section 3.2.

               (b) Exercise of Right to Include Registrable Securities. Upon the written
request of any such Holder made within 15 days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such Holder), CGG will use its reasonable best efforts to take
such steps as are necessary or appropriate to effect the registration under the
Securities Act (provided that the form proposed to be used would also permit
the registration of such Registrable Securities, and the filing of the
registration statement is to be on CGG’s behalf and/or behalf of selling
Holders or the general registration of CGG shares for cash) of all Registrable
Securities which it has been so requested to register by the Holders thereof;
provided that if such registration involves an underwritten offering by CGG,
all Holders requesting to be included in such registration as provided herein
must sell their Registrable Securities to the underwriters selected by CGG on
the same terms and conditions as apply to CGG and complete and execute all
customary questionnaires, powers of attorney, custody arrangements,
indemnities, underwriting agreements and/or other documents reasonably required
under the terms of such underwriting arrangements, except for such differences,
including any with respect to indemnification

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and liability insurance, as may be customary or appropriate in combined
primary and secondary offerings.

               (c) Withdrawal from Listing/Public Offering. If a registration requested
pursuant to this Section 3.2 involves an underwritten public offering, any
Holder requesting to be included in such registration may elect in writing by
providing at least two business days prior notice from the first date on which
the SEC grants effectiveness to a preliminary or final Registration Statement,
not to register such Registrable Securities in connection with such
registration.

          If at any time after giving written notice of its intention to register
any securities and prior to the effective date of the Registration Statement,
CGG shall determine for any reason not to proceed with the proposed
registration of the securities, if any, to be sold by it, CGG will give prompt
written notice of such determination to each Holder and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith) and (ii) in the case of a determination to delay such registration
of its equity securities, shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other equity securities.

               (d) Expenses. CGG will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this Section
3.2.

               (e) Priority in Incidental Registrations. If a registration pursuant to
this Section 3.2 involves an underwritten offering and the managing underwriter
advises CGG in writing that, in its opinion, the number of securities to be
included in such registration exceeds the number which can be sold in such
offering, so as to be reasonably likely to have an adverse effect on the price
or distribution of the securities offered in such offering or the timing of
such offering, then CGG will include in such registration:

     (i) first, in the event such underwritten offering is being made at
the request of Other Demand Holders, 100% of the securities, if any,
requested to be included by such Other Demand Holders (the “Other Demand
Holders Securities”);

     (ii) second, 100% of the securities, if any, CGG proposes to sell on
its own behalf;

     (iii) third, the number of Registrable Securities which the Holders
have requested to be included in such registration which, in the opinion
of such managing underwriter, can be sold without having the adverse
effect referred to above, which number shall be allocated first to each
Subscriber that is a requesting Holder (and, if such number is less than
the requested number, allocated among the Subscribers as they may direct
or, failing such direction, prorata according to the number requested by
each of them, respectively) and second, pro rata among all other
requesting Holders, such pro rata amount to be determined by multiplying:

(x) the aggregate number of Registrable Securities that may
be included in such registration without the adverse effect
referred to above by

(y) a fraction, the numerator of which is the number of
Registrable Securities requested by the Holder to be
included in such registration and the denominator of which
is the aggregate number of Registrable Securities requested
to be included in such registration.

          3.3 Registration on Request (“Demand Rights”).

               (a) Request by a Demand Party. Upon the written request of a Subscriber
requesting that CGG act to permit a listing or public offering of all or part
of the Subscriber’s Registrable Securities (a “Demand Request”) under the laws
of the United States (such actions relating to such requested listing or public
offering collectively referred to as “registration” in this Section 3.3) and
specifying the amount and intended method of disposition thereof, CGG will use
its

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reasonable best efforts to effect the registration of such Registrable
Securities, as expeditiously as possible.

Notwithstanding the foregoing, CGG shall not be obligated to effect a listing
or public offering or file any Registration Statement relating to any
registration request under this Section 3.3(a):

     (i) unless the reasonably anticipated aggregate price to the public
of the Registrable Securities to be offered pursuant to such offering is
equal to at least US$ 20 million at the time of such request;

     (ii) within a period of six months after: (x) the effective date of
any Registration Statement relating to any registration request under
this Section 3.3 or relating to any registration effected under Section
3.2, (y) the date of any other registration request under this Section
3.3, or (z) the date the Subscribers were given the opportunity to
register Registrable Securities pursuant to Section 3.2 hereof;

     (iii) if with respect thereto the managing underwriter, the SEC or
the laws, rules and regulations thereof would require the conduct of an
audit other than the regular audit conducted by CGG at the end of its
fiscal year, in which case the filing may be delayed until the timely
completion of such regular audit;

     (iv) if CGG is in possession of material non-public information and
the board of directors of CGG determines in good faith that disclosure of
such information would not be in the best interests of CGG and its
shareholders, in which case the filing of the Registration Statement may
be delayed until the earlier of the second business day after such
conditions shall have ceased to exist and the 90th day after receipt by
CGG of the written request from the Subscriber(s) to register Registrable
Securities under this Section 3.3; or

     (v) if on the date of receipt of the Demand Request the Exchange
Trading Volume Threshold (as defined in and determined in accordance with
the terms and conditions of the Bonds) has not been satisfied as of the
last date of determination thereof under the terms of the Bonds.

               (b) Shelf Registration Requests. So long as CGG is eligible to use SEC
Form F-3, or any successor or other forms promulgated for similar purposes,
upon the written request of any Subscriber (or, with the consent of any
Subscriber, the written request of any Qualified Holder) requesting that CGG
file with the SEC a continuous registration statement pursuant to Rule 415
under the Securities Act (or any successor rule or regulation thereto)
(together with the prospectus included therein, all amendments and supplements
thereto and all exhibits and materials incorporated by reference therein, the
“Shelf Registration Statement”) with respect to the resale of the Registrable
Securities in the United States (a “Shelf Registration Request”), CGG will use
its reasonable best efforts to file a Shelf Registration Statement within
ninety (90) days of receipt of the Shelf Registration Request, and will use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective by the SEC within 180 days of receipt of the Shelf
Registration Request; provided, however, that CGG shall have no obligation to
file a Shelf Registration Statement pursuant to this clause if the Exchange
Trading Volume Threshold (as defined in and determined in accordance with the
terms and conditions of the Bonds) has not been satisfied on the last date of
determination thereof under the terms of the Bonds on any regulated stock
exchange in the United States. Each Shelf Registration Statement filed in
connection with a Shelf Registration Request shall cover all of the Registrable
Securities issuable upon conversion of the Bonds. CGG will use its reasonable
best efforts to keep such Shelf Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section 3.4 hereof
until the earlier of:

     (i) the second anniversary of the effective date of such Shelf
Registration Statement;

     (ii) such time as all of the Registrable Securities have been sold
pursuant to an effective registration statement, transferred pursuant to
Rule 144 under the Securities Act or otherwise transferred in a manner
that results in such Registrable Securities no

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longer being subject to transfer restrictions under the Securities
Act and no longer necessitating a restrictive legend regarding Securities
Act registration; and

     (iii) such time when all of the Registrable Securities (as from the
date of issuance) are eligible for resale pursuant to Rule 144(k) under
the Securities Act or any successor rule or regulation thereto.

               (c) Number of Requests. Subject to the limitations above, the Subscribers
shall have, in aggregate, three (3) Demand Requests. In addition, the Holders
shall collectively have a total of two (2) Shelf Registration Requests.

               (d) Expenses. The Registration Expenses in connection with the
registration of Registrable Securities under Section 3.3(a) and 3.3(b) shall be
paid by CGG.

               (e) Selection of Underwriters. If a requested registration pursuant to
Section 3.3(a) involves an underwritten offering, the requesting Subscribers
shall have the right to select the investment banker or bankers and managers to
administer the offering; provided that such investment banker or bankers and
managers shall be reasonably satisfactory to CGG.

               (f) Priority in Requested Registrations. If a requested registration
pursuant to this Section 3.3 involves an underwritten offering and the managing
underwriter (or a majority of them if more than one) advises CGG in writing
that, in its reasonable opinion, the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering so as to be reasonably likely to have an adverse effect on the price
or distribution of the securities offered in such offering or the timing of
such offering, then CGG will include in such registration such number of
Registrable Securities requested to be included in such registration, excluding
any securities sought to be included by other security holders under incidental
registration rights agreements they have with CGG, which, in the reasonable
opinion of such managing underwriter(s), can be sold without having the adverse
effect referred to above. If the number of Registrable Securities requested to
be included in such registration is less than the number which, in the
reasonable opinion of the managing underwriter(s), can be sold without the
adverse effect referred to above, CGG may include in such registration
securities of the same class up to the number of such securities that, in the
reasonable opinion of the underwriter, can be sold without having such adverse
effect.

               (g) Additional Rights. CGG will not grant or permit any registration
rights to any Person (a) on terms that are inconsistent herewith, provided that
any agreement granting registration rights that provides for the entering into
by the Company of an agreement on customary terms to prohibit the Company from
offering or selling securities for a specified period of time following the
completion of an underwritten offering shall not be considered to be
inconsistent with this Agreement, or (b) on terms that are more favourable, as
a whole, than those contained in this Agreement without offering to amend the
terms hereof so that they are no longer less favourable, as a whole, than those
granted to such Person.

          3.4 Registration Procedures. If and whenever it is required to file a
Registration Statement or to use its reasonable best efforts to effect or cause
the registration (including, where applicable, the shelf registration pursuant
to Section 3.3(b) hereof) of any Registrable Securities under the Securities
Act as provided in this Agreement, CGG shall, as expeditiously as possible:

               (a) Filing of prospectus: prepare and file and, in the case of ADSs,
cause to be filed, with the SEC, in any event within 90 days after receiving a
Demand Request or Shelf Registration Request, as the case may be, a
Registration Statement covering such Registrable Securities and use its
reasonable best efforts to cause such Registration Statement to become
effective, as the case may be; provided that CGG may discontinue any
registration of its securities which is being effected pursuant to Section 3.2
at any time prior to the effective date of the Registration Statement, as the
case may be, relating thereto (and, in such event, CGG shall pay the
Registration

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Expenses incurred in connection therewith); provided, further, that before
filing any Registration Statement or any amendments or supplements thereto, CGG
will furnish to Holder’s Counsel, copies of all documents proposed to be filed,
which documents will be subject to the review and approval of Holder’s Counsel,
such approval not to be unreasonably withheld and to be deemed received if no
comments are sent by Holder’s Counsel to CGG or its counsel within five (5)
business days of confirmed receipt;

               (b) Filing of amendments to prospectus: prepare and file with the SEC
such amendments and supplements to each Registration Statement as may be
necessary to keep it effective for a period not in excess of 270 days (or, in
the case of a Shelf Registration Statement filed pursuant to Section 3.3(b),
not in excess of two (2) years from the date of effectiveness of such
registration statement) and to comply with the provisions of the Securities Act
and the Exchange Act and the rules and regulations of the SEC thereunder with
respect to the disposition of all securities covered by such Registration
Statement, during such period in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such Registration
Statement; provided that before filing any Registration Statement with the SEC,
or any amendments or supplements thereto, CGG will furnish to Holder’s Counsel
copies of all documents proposed to be filed, which documents will be subject
to the review and approval of Holder’s Counsel, such approval not to be
unreasonably withheld and to be deemed received if no comments are sent by
Holder’s Counsel to CGG or its counsel within five (5) business days of
confirmed receipt;

               (c) Availability to Holders of copies of offering documents: furnish to
each selling Holder of such Registrable Securities such number of copies of
each Registration Statement and amendment and supplement thereto (in each case
including all exhibits filed therewith, including any documents incorporated by
reference), such number of copies of any prospectus included in it (including
each preliminary prospectus and summary prospectus) in conformity with the
requirements of the Securities Act, and such other documents as such selling
Holder may reasonably request in order to facilitate the disposition of the
Registrable Securities by such selling Holder;

               (d) Other necessary or advisable acts for disposition of the Registrable
Securities: use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions within the United States and Puerto Rico as the selling Holders
shall reasonably request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable the selling Holders to consummate
the disposition in such jurisdictions of the Registrable Securities owned by
such selling Holders, except that CGG shall not for any such purpose be
required (i) to qualify generally to do business as a foreign corporation in
any jurisdiction where, but for the requirements of this clause (d), it would
not be obligated to be so qualified, (ii) to subject itself to taxation in any
such jurisdiction or (iii) to consent to general service of process in any such
jurisdiction;

               (e) Notification and implementation of corrections to disclosure:
promptly notify each selling Holder of such Registrable Securities at any time
(i) when a prospectus relating thereto is required to be delivered under the
Securities Act within the appropriate period mentioned in clause (b) of this
Section 3.4, (ii) if, between the effective date of a Registration Statement
and closing of any sale of Registrable Securities covered thereby, the
representations and warranties of CGG contained in the underwriting agreement,
securities sales agreement or other similar agreement relating to an offering
of such Registrable Securities cease to be true and correct in all material
respects; or (iii) upon CGG becoming aware that any Registration Statement
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing, and at the
request of any such selling Holder, promptly prepare and furnish to such
selling Holder a reasonable number of copies of an amended or supplemental
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Registration Statement shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the

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circumstances then existing; provided, however, if (A) the full Board of
Directors of CGG, having consulted with counsel regarding CGG’s disclosure
obligations under applicable law to the extent that the Board deems
appropriate, determines in good faith that it is in the best interests of CGG
not to disclose the existence of or facts surrounding any proposed or pending
material corporate transaction involving CGG or any of its subsidiaries, and
(B) CGG notifies the Holders, pursuant to Section 5.4 hereof, within five (5)
business days after such Board of Directors makes such determination, CGG may
allow the Shelf Registration Statement to fail to be effective and usable as a
result of such nondisclosure for up to 120 days during the period of
effectiveness required by Section 3.4 hereof, but in no event may CGG allow a
Shelf Registration Statement to fail to be effective and usable as a result of
such nondisclosure for more than an aggregate of 120 days in any twelve-month
period.

               (f) Compliance with regulations; earnings statement: otherwise comply
with all applicable rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable (but not more than eighteen
months) after the earliest effective date or approval date of the registration
statement, an earnings statement which shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations promulgated
thereunder;

               (g) Listing; transfer agent: (i) use its reasonable best efforts to list
such Registrable Securities on any securities exchange on which CGG’s Shares or
ADSs representing CGG’s Shares are then listed if such Registrable Securities
are not already so listed and if such listing is then permitted under the rules
of such exchange; and (ii) use its reasonable best efforts to provide a
transfer agent and registrar for such Registrable Securities not later than the
effective date or approval date of any Registration Statement, as the case may
be;

               (h) Entry into underwriting and other customary agreements: use its
reasonable best efforts to enter into such customary agreements (including an
underwriting agreement in customary form), which may include indemnification
provisions in favor of underwriters and other persons in addition to, or in
substitution for the provisions of Section 3.5 hereof, and take such other
actions as the Holders or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities;

               (i) Creation of ADSs: if requested by a selling Holder, create additional
ADSs representing the same number of underlying shares per ADS as the ADSs that
previously were created and issued;

               (j) Procurement of comfort letter: use its reasonable best efforts to
obtain a “cold comfort” letter or letters and updates thereof from the
independent certified public accountants of CGG in customary form and covering
matters of the type customarily covered by “cold comfort” letters and such
attestations as the selling Holders shall reasonably request dated the date of
effectiveness of the Shelf Registration Statement;

               (k) Due diligence review: make available, in a reasonably prompt manner,
for inspection during reasonable business hours by the selling Holders of such
Registrable Securities, by any underwriter participating in any disposition
with respect to such Registrable Securities and by any attorney or accountant
retained by the selling Holder or any such underwriter, all pertinent financial
and other records, pertinent corporate documents and properties of CGG, and
cause all of CGG’s officers, directors and employees to supply all information
reasonably requested by the selling Holders, or any such underwriter, attorney
or accountant in connection with such registration statement or statements in
each case as is customary for similar due diligence exercises; provided that
such information shall not be available for any such Holder who does not agree
in writing to hold such information in confidence on customary terms and
subject to customary exceptions and exclusions; provided, in any event, that
any such confidentiality agreement will not restrict any such Holder from
satisfying its own disclosure obligations or restrict such Holder’s ability to
sell their Registrable Securities;

10

 

               (l) Notification of effectiveness, any comments of the SEC or any stop
order: notify Holder’s Counsel and the managing underwriter or agent,
promptly, and confirm the notice in writing (i) when any Registration
Statement, or any post-effective amendment thereto, shall have become effective
or any supplement to any prospectus or any amendment to any prospectus shall
have been filed, (ii) of the receipt of any comments from the SEC, (iii) of any
request of the SEC to amend any Registration Statement or amend or supplement
any prospectus or for additional information, and (iv) of the issuance by the
SEC of any stop order suspending the effectiveness of any Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of any Registration
Statement, for offering or sale in any jurisdiction, or of the institution or
threatening of any proceedings for any of such purposes;

               (m) Prevention of stop orders: make every reasonable effort to prevent
the issuance of any stop order suspending the effectiveness of any Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus and, if any such order is issued, to use its reasonable efforts to
obtain the withdrawal of any such order at the earliest possible moment and
provide prompt notice to each Holder of the withdrawal of such order;

               (n) Incorporation of information in prospectus supplement as reasonably
requested: if requested by the managing underwriter or agent or a selling
Holder, promptly incorporate and, in the case of ADSs, cause to be incorporated
in a prospectus supplement or post-effective amendment such information as the
managing underwriter or agent or a selling Holder reasonably requests to be
included therein, including, without limitation, with respect to the number of
Registrable Securities being sold to such underwriter or agent, the purchase
price being paid therefor by such underwriter or agent and with respect to any
other terms of the underwritten offering of the Registrable Securities to be
sold in such offering; and make and, in the case of ADSs, cause to be made all
required filings of such prospectus supplement or post-effective amendment as
soon as practicable after being notified of the matters incorporated in such
prospectus supplement or post-effective amendment;

               (o) Delivery of Registrable Securities: cooperate with the selling
Holders and the managing underwriter or agent or depositary, if any, to
facilitate the timely preparation and delivery of the Registrable Securities,
including the removal of any restrictive legends, and enable such securities to
be in such denominations and registered in such names as the managing
underwriter or agent or depositary, if any, or such Holders may request;

               (p) Opinion of CGG’s counsel: obtain for delivery to each selling Holder
and to the underwriter or agent or depositary, if any, an opinion or opinions
from counsel for CGG in customary form and in form, substance and scope
reasonably satisfactory to the selling Holders, and to each of the underwriters
or agents or depositary and their counsel dated the date of effectiveness of
the Shelf Registration Statement; and

               (q) NASD filing: cooperate with the selling Holders and each underwriter
or agent participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made
with the NASD or equivalent non U.S. body or authority.

               CGG may require each selling Holder of Registrable Securities as to which
any registration is being effected to furnish CGG with such information
regarding such selling Holder and pertinent to the disclosure requirements
relating to the registration and the distribution of such securities as CGG may
from time to time reasonably request in writing.

               Each Holder of Registrable Securities agrees that, upon receipt of any
notice from CGG of the happening of any event of the kind described in clause
(e) of this Section 3.4 (notification and implementation of corrections to
disclosure), such Holder will keep such notice confidential and forthwith
discontinue disposition of Registrable Securities pursuant to any

11

 

Registration Statement until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by clause (e) of this Section
3.4, and, if so directed by CGG, such Holder will deliver to CGG (at CGG’s
expense) all copies, other than permanent file copies then in such Holder’s
possession, of any prospectus or other document covering such Registrable
Securities current at the time of receipt of such notice. In the event CGG
shall give any such notice, the period mentioned in clause (b) of this Section
3.4 shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to clause (e) of this
Section 3.4 and including the date when each selling Holder shall have received
the copies of the supplemented or amended prospectus contemplated by clause (e)
of this Section 3.4.

          3.5 Indemnification.

               (a) Indemnification by CGG. In the event of any registration or
qualification of any securities of CGG under the Securities Act pursuant to
Section 3.2 or 3.3, CGG will indemnify and hold harmless, to the extent
permitted by law, the seller of any Registrable Securities in such public
offering and/or covered by any Registration Statement, each affiliate of such
seller and their respective directors and officers, each other Person who
participates as an underwriter in the offering, subscription or sale of such
securities and each other Person, if any, who controls such seller or any such
underwriter within the meaning of the Securities Act (each, an “Indemnified
Party”), against any and all losses, claims, damages or liabilities, joint or
several, and expenses, as incurred (including reasonable attorney’s fees and
reimbursements and reasonable expenses of investigation) to which such
Indemnified Party may become subject under the Securities Act, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions or proceedings in respect thereof, whether or not such Indemnified
Party is a party thereto) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, any preliminary, final or summary prospectus contained
therein, or any amendment or supplement thereto, or (b) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances under
which they were made not misleading, and CGG will reimburse such Indemnified
Party for any legal or any other expenses reasonably incurred by it in
connection with investigating or defending against any such loss, claim,
liability, action or proceeding; provided that CGG shall not be liable to any
Indemnified Party in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in any such Registration Statement, or
amendment or supplement thereto or in any such preliminary, final or summary
prospectus in reliance upon and in conformity in all respects with written
information relating to such seller or underwriter, or such seller’s or such
underwriter’s affiliates, directors, officers or controlling Persons or the
proposed distribution, furnished to CGG through an instrument duly executed by
such seller or underwriter specifically stating that it is for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such seller or any
Indemnified Party and shall survive the transfer of such securities by such
seller.

               (b) Indemnification by the Holders. In the event of any registration or
qualification of any securities of CGG under the Securities Act pursuant to
Section 3.2 or 3.3, the Holder of any Registrable Securities in such public
offering and/or covered by any Registration Statement will indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
3.5(a)) CGG or any of its affiliates, directors, officers or controlling
Persons and all other prospective sellers with respect to (a) any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, any preliminary, final or summary prospectus contained
therein, or any amendment or supplement thereto, or (b) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances under
which they were made not misleading, if such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity in all respects with written information relating to such selling
Holder and/or its affiliates, directors, officers or controlling Persons or the
proposed distribution, furnished to CGG through an instrument duly

12

 

executed by such selling Holder specifically stating that it is for use in
the preparation of such Registration Statement, preliminary, final or summary
prospectus or amendment or supplement, other required document or filing or a
document incorporated by reference into any of the foregoing. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of CGG or any of its affiliates, directors, officers or
controlling Persons and shall survive the transfer of such securities by the
selling Holders. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

               (c) Notices of Claims, etc. Promptly after receipt by an Indemnified
Party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 3.5, such Indemnified Party will, if a claim in
respect thereof is to be made against an indemnifying party, give written
notice to the latter of the commencement of such action; provided that the
failure of the Indemnified Party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the foregoing
provisions of this Section 3.5, except to the extent that such failure is
materially prejudicial to the Indemnifying Party. In case any such action is
brought against an Indemnified Party, unless in such Indemnified Party’s
reasonable judgment a conflict of interest between such Indemnified Party and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such Indemnified Party, and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party will not be liable to
such Indemnified Party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs
of investigation. No indemnifying party will consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof, the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation.

               (d) Contribution. If the indemnification provided for in this Section 3.5
from the indemnifying party is unavailable to an Indemnified Party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and Indemnified Parties in connection with the actions which
resulted in such losses, claims, damages, liabilities or expenses, or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative fault
referred to in clause (i) above but also other relevant equitable
considerations. The relative fault of such indemnifying party and Indemnified
Parties shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
Indemnified Parties, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party under this Section 3.5(d) as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 3.5(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act or, if an offering is occurring
primarily in another jurisdiction,

13

 

under the comparable provisions of the laws, rules and regulations of such
jurisdiction) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

          Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or parties
under this Section 3.5, notify such party or parties from whom contribution may
be sought, but the failure to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation
it or they may have under this Section 3.5 or otherwise, except to the extent
it or they have been prejudiced by such failure. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent; provided that such written consent was not unreasonably
withheld.

               (e) Other Indemnification. Indemnification similar to that specified in
the preceding subdivisions of this Section 3.5 (with appropriate modifications)
shall be given by CGG and each selling Holder with respect to any required
registration or other qualification of securities under any federal or state
law or regulation or governmental authority other than the Securities Act
including the laws, rules and regulations of any non-U.S. jurisdiction in which
the securities of CGG are listed for trading.

               (f) Non-Exclusivity. The obligations of the parties under this Section
3.5 shall be in addition to any liability that any party may otherwise have to
any other party.

          3.6 Selection of Counsel. In connection with any registration of
Registrable Securities pursuant to this Agreement, the selling Holders may
select one counsel (which counsel shall be selected by the Holders holding a
majority interest of the Registrable Securities being registered), provided
that such counsel shall be reasonably satisfactory to CGG.

          3.7 Rule 144. CGG hereby covenants with the Holders that if and to the
extent CGG shall be required to do so under the Exchange Act, it will timely
file the reports required to be filed by it under the Exchange Act or the
Securities Act (including, but not limited to, the reports under Sections 13
and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144
adopted by the SEC under the Securities Act) and shall take such further action
as the Holders may reasonably request, all to the extent required from time to
time to enable the Holders to sell Registrable Securities without registration
under the Securities Act within the limitations of the exemption provided by
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the SEC. Upon the
request of the Holders, CGG shall deliver to the Holders a written statement as
to whether CGG has complied with such requirements.

          3.8 Holdback. If any registration of Registrable Securities shall be in
connection with an underwritten public offering, the Subscribers agree not to
effect any public sale or distribution, including any sale pursuant to Rule 144
under the Securities Act, or otherwise transfer, directly or indirectly, the
economic consequences of ownership of any equity securities of CGG, or of any
security convertible into or exchangeable or exercisable for any equity
security of CGG (in each case, other than as part of such underwritten public
offering), within 10 days before or such period not to exceed 135 days as the
underwriting agreement may require (or such lesser period as the managing
underwriters may permit) after the effective date of such registration (except
as part of such registration), and CGG hereby also so agrees and agrees to use
its reasonable best efforts to cause each other holder of any equity security,
or of any security convertible into or exchangeable or exercisable for any
equity security of CGG purchased from CGG or any of its affiliates (at any time
other than in a public offering) to so agree.

14

 

ARTICLE IV

COOPERATION

          4.1 Non-Public Offers and Sales by the Subscribers of Registrable
Securities. Upon the request of any Subscriber, CGG will use its best efforts
to do and perform and cause to be done such further acts and things as may be
reasonably required or customary to facilitate the offer and sale by such
Subscriber of the Registrable Securities in transactions not involving any
public offering.

          4.2 Offers and Sales by the Subscribers of the Bonds. Upon the request of
any Subscriber(s), CGG will use its best efforts in order to facilitate the
sale by such Subscriber(s) of the Bonds in any non-public transaction or
non-public transaction outside the U.S. in accordance with Regulation S of the
Securities Act involving, in aggregate, at least US$ 20 million in principal
amount of the Bonds. Among other things, CGG shall cause its management team to
participate in any road show meetings or other presentations, meetings or
conference calls as such Subscriber(s) may reasonably request.

ARTICLE V

MISCELLANEOUS

          5.1 Assignment. The Subscribers may (i) assign at any time all their
rights and obligations under this Agreement to one or more Majority Affiliates
and (ii) without limiting the foregoing clause (i), transfer their rights to
benefit from one registration upon demand to any Person provided such Person
purchases all of the Registrable Securities of the Subscribers (the “Transferee
Holder”). The Transferee Holder will be entitled to all the rights and will
be subject to all of the obligations of the Subscribers pursuant to this
Agreement, except for the rights set forth in Sections 4.1 and 4.2 of this
Agreement and except that the Transferee Holder shall only be entitled to make
one Demand Request. No assignment, except as provided in this Section 5.1, may
be carried out without the consent of CGG.

          5.2 Third Party Beneficiaries. Any Person that is a Qualified Holder shall
be a third party beneficiary under this Agreement, and shall benefit from the
rights provided to Qualified Holders hereunder as if such Person were a party
to this Agreement.

          5.3 Effectiveness; Termination. This Agreement shall become effective on
the Closing Date and shall terminate and be of no further force or effect upon
the earlier of (i) the written agreement of all parties hereto and (ii) the
tenth anniversary of the Closing Date. The Subscribers and CGG agree to the
disclosure of this Agreement to the SEC and the AMF, if so required to give it
full operation.

15

 

          5.4 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if in writing and personally delivered or
sent by registered or certified mail, return receipt requested, postage
prepaid, overnight delivery service such as DHL or if sent by facsimile
transmission with confirmation of receipt addressed as follows or to such other
address as the relevant party shall have given notice of pursuant hereto:

	 	 	 
	If to the Subscribers, to:

	 	c/o Onex Partners LP
	

	 	c/o Onex Advisors Partners LP
	

	 	161 Bay Street, P.O. Box 700
	

	 	Toronto, Ontario, Canada M5J 2S1
	

	 	Attention: Nigel Wright / Andrew Sheiner
	

	 	Tel: + 1 (416) 362 7711
	

	 	Fax: + 1 (416) 362 5765
	 
	 	 
	With a copy to:

	 	Shearman & Sterling LLP
	

	 	114 avenue des Champs Elysées
	

	 	75008 Paris, France
	

	 	Attention: Sami Toutounji
	

	 	Tel: + 33 1 53 89 70 00
	

	 	Fax: + 33 1 53 89 70 70
	 
	 	 
	If to CGG, to:

	 	Compagnie Générale de Géophysique
	

	 	Tour Maine-Montparnasse
	

	 	33, avenue du Maine
	

	 	75755 Paris Cedex 15
	

	 	France
	

	 	Attention: Michel Ponthus / Béatrice Place-Faget
	

	 	Tel: + 33 1 64 47 45 00
	

	 	Fax: + 33 1 64 47 34 29
	 
	 	 
	With a copy to:

	 	Linklaters
	

	 	25, rue de Marignan
	

	 	75008 Paris, France
	

	 	Attention: Thomas N. O’Neill III
	

	 	Tel: +33 1 56 43 56 43
	

	 	Fax: +33 1 43 59 41 96

     All such notices and other communications shall be deemed to have been
given (w) if by personal delivery, on the day of such delivery; (x) if by
registered or certified mail, on the seventh day after the sending thereof; (y)
if by overnight delivery service such as DHL, on the next business day after
the mailing thereof; and (z) if by fax, on the next day following the day on
which such fax was sent, provided that a copy is also sent by registered or
certified mail.

          5.5 Entire Agreement. This Agreement represents the entire understanding
and agreement of the parties hereto and supersedes all prior agreements,
understandings and arrangements (whether written or oral) among the parties
hereto with respect to the subject matter hereof. Each party hereto
acknowledges that it has not made or relied on any representation or warranty
other than those specifically set forth herein.

16

 

          5.6 Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

          5.7 Applicable Law. This Agreement shall be governed by and shall be
construed in accordance with the laws of New York.

          5.8 Arbitration. Each party hereto hereby irrevocably agrees to submit
any dispute, controversy or claim arising out of or relating to the
interpretation, validity or breach of this Agreement or any instruments
executed by the parties in connection herewith to arbitration in Paris to be
conducted in accordance with the then-existing international arbitration rules
of the International Chamber of Commerce (the “Rules”). In resolving any such
dispute, controversy or claim, the parties hereto intend that New York law will
apply, without regard to the conflict of laws principles thereof. The parties
hereto agree that the arbitration proceedings will be conducted and all
documents related thereto will be submitted in English (or, if any relevant
original documentation is in French, such documentation may be submitted in
French). The arbitration proceedings will be conducted before a panel of three
arbitrators to be chosen in accordance with the Rules. The decision of the
panel will be final, binding and nonappealable.

          5.9 Waiver; Amendment.

               (a) This Agreement may not be amended, modified, supplemented or changed,
and no provision hereof may be waived, except in a writing duly executed on
behalf of each party hereto.

               (b) No failure or delay by any party in exercising any powers, right or
privilege under this Agreement shall operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other power, right or privilege.

          5.10 Severability. Should any provision of this Agreement be invalid or
unenforceable, in whole or in part, or should any provision later become
invalid or unenforceable, this shall not affect the validity of the remaining
provisions of this Agreement which shall not be affected and shall remain in
full force and effect. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of such void or unenforceable provision.

          5.11 Counterparts. This Agreement shall be executed in counterparts, each
of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

          5.12 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors and
permitted assigns.

          5.13 Specific Performance. Each of the parties to this Agreement
acknowledges and agrees that money damages would not be a sufficient remedy for
any breach of any of the provisions of Article III of this Agreement, and that
in addition to all other remedies which the non-breaching parties may have, the
non-breaching parties will be entitled to specific performance and injunctive
or other equitable relief as a remedy for any such breach.

          5.14 Further Assurances. The parties hereto will sign such further
documents, cause such further meetings to be held, adopt such resolutions and
do and perform and cause to be done such further acts and things as may be
necessary in order to give full effect to this Agreement and every provision
thereof.

17

 

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.

	 	 	 	 	 
	 	COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE

 	 
	 	/s/ ROBERT BRUNCK
 	 
	 	Name:  	Robert Brunck 	 
	 	Title:  	Chairman and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	ONEX PARTNERS LP,

by Onex Partners GP LP, its general partner

by Onex Partners Manager GP LP, its agent,

by Onex Partners Manager GP Inc., its general partner

 	 

	 	 	 	 	 
	 	 	 
	 	                               /s/ ROBERT M. LE BLANC
 	 
	 	Name:  	Robert M. Le Blanc 	 
	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	                               /s/ ERIC. J. ROSEN
 	 
	 	Name:  	Eric J. Rosen 	 
	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	ONEX AMERICAN HOLDINGS II LLC

 	 
	 	/s/ ERIC J. ROSEN
 	 
	 	Name:  	Eric J. Rosen 	 
	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	                               /s/ DONALD WEST
 	 
	 	Name:  	Donald West 	 
	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	ONEX US PRINCIPALS LP

by Onex American Holdings GP LLC, its general partner

 	 
	 	/s/ ERIC J. ROSEN
 	 
	 	Name:  	Eric J. Rosen 	 
	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	                               /s/ DONALD WEST
 	 
	 	Name:  	Donald West 	 
	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	CGG EXECUTIVE INVESTCO, LLC

 	 
	 	/s/ ROBERT M. LE BLANC
 	 
	 	Name:  	Robert M. Le Blanc 	 
	 	Title:  	Director 	 

18

 

	 	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	                               /s/ DONALD WEST
 	 
	 	Name:  	Donald West 	 
	 	Title:  	Director 	 
	 

19<PAGE>

                                                                    EXHIBIT 10.5

                                  30 April 2004

                          MEIF LUXEMBOURG HOLDINGS S.A.

                                   COINVESTORS

                  MACQUARIE INVESTMENT MANAGEMENT (UK) LIMITED

                       MACQUARIE LUXEMBOURG WATER S.A.R.L

                    -----------------------------------------

                             SHAREHOLDERS' AGREEMENT

                        RELATING TO MACQUARIE LUXEMBOURG
                                  WATER S.A.R.L

                    -----------------------------------------

                           SEW Coinvestment Agreement

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                                                   PAGE
<S>                                                                                      <C>
1.     DEFINITIONS AND INTERPRETATION...............................................       1
       Statutory provisions.........................................................       4
       Clauses and Schedules........................................................       4
       Singular/plural..............................................................       4
       Headings.....................................................................       4
       Agreed form..................................................................       4
       Exercise of powers of control................................................       5
       Permitted Transferees and Group Members......................................       5

2.     ESTABLISHMENT OF JOINT VENTURE...............................................       5

3.     PURPOSE OF THE COMPANY.......................................................       6

4.     RELATED AGREEMENTS...........................................................       6

5.     THE BOARD AND MANAGEMENT.....................................................       6
       Supervision by the Board.....................................................       6

6.     APPOINTMENT OF THE ADVISER...................................................       7

7.     RESERVED MATTERS.............................................................       7
       Use of powers................................................................       7
       Reserved Shareholder Matters.................................................       7
       Meetings of Shareholders.....................................................       7

8.     FINANCIAL MATTERS............................................................       8
       Auditors.....................................................................       8
       Accounting Reference Date....................................................       8
       Distribution of cash.........................................................       8
       Accounting principles........................................................       8

9.     EXPENSES.....................................................................       8

10.    TAX MATTERS..................................................................      10
       Co-operation.................................................................      10
       Residence....................................................................      10

11.    REGULATORY MATTERS...........................................................      10
       Co-operation.................................................................      10
       Regulatory Action............................................................      10

12.    TRANSFER.....................................................................      11
       General......................................................................      11
</TABLE>

                                                                          Page I

<PAGE>

<TABLE>
<S>                                                                                      <C>
       Restriction on transfer......................................................      11
       Transfer of Shares - concurrent requirements.................................      11
       Assignment of rights under Preferred Equity Certificate Agreement............      11

13.    ISSUE OF NEW SECURITIES......................................................      11

14.    FURTHER ASSURANCE............................................................      13

15.    NON-ASSIGNMENT...............................................................      13

16.    WAIVER OF RIGHTS.............................................................      13

17.    AMENDMENTS...................................................................      13

18.    INVALIDITY...................................................................      13

19.    NO PARTNERSHIP OR AGENCY.....................................................      13

20.    ANNOUNCEMENTS................................................................      14

21.    COSTS........................................................................      14

22.    NO RELIANCE..................................................................      14

23.    CONFLICT WITH ARTICLES.......................................................      14
       Supremacy of this Agreement..................................................      14

24.    DURATION.....................................................................      15

25.    NOTICES......................................................................      15
       Notices......................................................................      15
       Notice details...............................................................      15
       English language.............................................................      17

26.    COUNTERPARTS.................................................................      17

27.    RIGHTS UNDER CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999....................      17

28.    GOVERNING LAW AND JURISDICTION...............................................      17

SCHEDULE 1  DEED OF ADHERENCE.......................................................      18

SCHEDULE 2  ARTICLES OF THE COMPANY.................................................      22

SCHEDULE 3  TRANSFER OF SECURITIES..................................................      23

SCHEDULE 4  THE COINVESTORS.........................................................      28
</TABLE>

                           SEW Coinvestment Agreement

                                                                         Page II

<PAGE>

THIS AGREEMENT is made on 30 April 2004

BETWEEN

(1)   THE PARTIES whose names and addresses are set out in Schedule 4 to this
      Agreement (each a "COINVESTOR");

(2)   MEIF LUXEMBOURG HOLDINGS S.A. a company organized and existing under the
      laws of the Grand Duchy of Luxembourg, having its registered office at
      398, route d'Esch, L-1471 Luxembourg ("MEIF");

(3)   MACQUARIE INVESTMENT MANAGEMENT (UK) LIMITED incorporated under the laws
      of England whose registered office is at 1 Ropemaker Street, London EC2Y
      9HD United Kingdom ("ADVISER");

(4)   MACQUARIE LUXEMBOURG WATER S.A.R.L, a company incorporated under the laws
      of Luxembourg, whose registered office is at 5, rue Guillaume Kroll, -1882
      Luxembourg, Grand-Duchy of Luxembourg ("the COMPANY").

WHEREAS

(A)   The Coinvestors and MEIF have agreed to invest in South East Water ("SEW")
      through the Company. MEIF is the controlling shareholder of the Company.

(B)   The Company proposes to purchase from Macquarie Leasing (UK) Limited (a
      subsidiary of Macquarie Bank Limited ("MBL")) 41,680,500 shares in the
      Parent for (pound)41,680,501 comprising 75.1% of the issued share capital
      of the Parent and to subscribe for (pound)41,680,501 nominal of unsecured
      loan notes in the Parent (together, "THE PARENT SECURITIES").

(C)   To provide the funds necessary to enable the Company to purchase the
      shares in the Parent, the Coinvestors and MEIF will enter into the
      Preferred Equity Certificate Agreements with the Company as described in
      this Agreement.

(D)   The parties are entering into this Agreement in order to set out the terms
      governing the relationship of the Shareholders in the Company.

IT IS AGREED as follows:

1.    DEFINITIONS AND INTERPRETATION

1.1   In this Agreement, and in the Recitals and Schedules, the Terms set out in
      this clause 1 shall (unless the context requires otherwise) have the
      following respective meanings:

ADVISER means Macquarie Investment Management (UK) Limited;

ARTICLES means the articles of association of the Company as amended from time
to time;

ASSOCIATES means in relation to a company, any member of its Group;

                           SEW Coinvestment Agreement

                                      -1-

<PAGE>

AUDITORS means the auditors of the Company from time to time;

BOARD means the board of managers of the Company;

BUSINESS means the business to be carried on by the Company, as described in
clause 3;

BUSINESS DAY means a day on which clearing banks generally are open in
Luxembourg and London for a full range of business;

CHAIRMAN means the chairman from time to time of the Board and of the Company;

COMPANY means any body corporate, wherever incorporated;

COSTS has the meaning given in clause 9.1;

DEED OF ADHERENCE means a deed in the form set out in Schedule 1;

DRAG-ALONG REQUEST has the meaning given in paragraph 3.2 of Schedule 3;

DRAG-ALONG RIGHT has the meaning given in paragraph 3.1 of Schedule 3;

FINANCIAL YEAR means a financial period of the Company;

GROUP means, in relation to the Company or a Shareholder, that company and its
holding company and subsidiaries of it or of such holding company for the time
being;

HOLDING COMPANY shall have the meaning ascribed to that expression by sections
736 and 736A of the Companies Act 1985;

MANAGERS means the board of managers of the Company;

MEIF UK means MEIF UK Limited, a company incorporated in England and Wales
(registered number 4866246) with its registered office at Level 30 City Point, 1
Ropemaker Street, London EC2Y 9HD;

MBL has the meaning given in recital (B);

NON-DEFAULTING SHAREHOLDER has the meaning given in clause 2.3;

NON-MEIF SHAREHOLDER means each Shareholder other than MEIF;

OFFERED SECURITIES has the meaning given in paragraph 2.2 of Schedule 3;

PARENT means Macquarie Water UK Limited, a company incorporated in England and
Wales (registered number 4866247) whose registered office is at Level 30
Citypoint, 1 Ropemaker Street London EC2Y 9HD, the parent company of SEW;

PARENT SECURITIES has the meaning given in recital (B);

                           SEW Coinvestment Agreement

                                      -2-

<PAGE>

PERMITTED TRANSFEREE means any future shareholder in the Company who has
acquired its Shares pursuant to a transfer of such Shares in accordance with
clause 1.2 of Schedule 3;

PREFERRED EQUITY CERTIFICATE AGREEMENTS means the agreements in the agreed form
between the Company and each Shareholder (including, for the avoidance of doubt,
the preferred equity certificate agreement between MEIF and the Company) under
which the Shareholders lend money to the Company;

PREFERRED EQUITY CERTIFICATES means the preferred equity certificates of the
Company constituted by the Preferred Equity Certificate Agreements or the
nominal amount of them for the time being outstanding or a specific proportion
of them, as the context may require;

PRO RATA PROPORTION has the meaning given in paragraph 2.6 of Schedule 3;

PROPOSED TRANSFEREE has the meaning given in paragraph 3.1 of Schedule 3;

PURCHASING SHAREHOLDERS has the meaning given in paragraph 2.8 of Schedule 3;

QUALIFYING CORPORATE CAPITAL means all corporate capital of the Company acquired
pursuant to clauses 2.1, 2.2 and 13.3(a);

REGULATORY ACTION means:

(a)   any order of a court of competent jurisdiction; or

(b)   any order, decision or conclusive view made, given or expressed by a
      competent supranational, governmental or regulatory authority or agency;
      or

(c)   an enactment of a legislative body which:

      (i)   materially prohibits or restricts completion of the Share Purchase
            Agreement; or

      (ii)  would materially prohibit or restrict the carrying on of the
            business of the Company as contemplated by this Agreement;

REMAINING OFFERED SECURITIES has the meaning given in paragraph 2.6 of Schedule
3;

RESERVED SHAREHOLDER MATTERS has the meaning given in clause 7.1;

SALE SECURITIES has the meaning given in paragraph 2.1 of Schedule 3;

SECURITIES means Shares and/or Preferred Equity Certificates;

SHARES means ordinary shares of(euro)25 nominal value each in the capital of the
Company;

SHAREHOLDERS means, for so long as they hold Shares in the Company, MEIF and the
Coinvestors and any person to whom any of the Shares may be issued or
transferred in accordance with the Articles and this Agreement;

                           SEW Coinvestment Agreement

                                      -3-

<PAGE>

SHARE PURCHASE AGREEMENT means the agreement in the agreed form to be entered
into between the Company, MBL and Macquarie Leasing (UK) Limited in relation to
the purchase by the Company of certain shares in the Parent and the subscription
for certain loan notes as set out in Recital B;

SPA means the agreements in the agreed form to be entered into between each of
the Shareholders and MEIF UK regarding the purchase by the Shareholders of the
entire issued share capital of the Company;

SUBSIDIARY shall have the meaning ascribed to that expression by sections 736
and 736A of the Companies Act 1985;

TRANSFER DETAILS has the meaning given in paragraph 2.2 of Schedule 3;

TRANSFEREE has the meaning given in paragraph 2.9 of Schedule 3;

TRANSFEROR has the meaning given in paragraph 2.1 of Schedule 3; and

WRITTEN OFFER has the meaning given in paragraph 2.2 of Schedule 3.

STATUTORY PROVISIONS

1.2   Except where the context requires otherwise, references to statutory
      provisions shall be construed as references to those provisions as
      respectively amended or re-enacted or as their application is modified by
      other provisions (whether before or after the date hereof) from time to
      time.

CLAUSES AND SCHEDULES

1.3   Except where the context requires otherwise, references to clauses,
      paragraphs and Schedules are to clauses, paragraphs or schedules to this
      Agreement.

SINGULAR/PLURAL

1.4   Words denoting the singular number include the plural number and vice
      versa, words denoting the masculine gender include the feminine gender and
      words denoting persons include companies.

HEADINGS

1.5   Headings are inserted for convenience only and shall not affect the
      construction of this Agreement or its Schedules.

AGREED FORM

1.6   Any reference to an agreed form is to the form of the relevant document
      agreed between all the Shareholders, or to a substantially similar form,
      signed on the Shareholders' behalf for the purpose of identification
      either before the signature of this Agreement (with such

                           SEW Coinvestment Agreement

                                      -4-

<PAGE>

      amendments (if any) as may subsequently be provided for in this Agreement)
      or subsequently.

EXERCISE OF POWERS OF CONTROL

1.7   Where any obligation pursuant to this Agreement is expressed to be
      undertaken or assumed by any Shareholder, such obligation shall be
      construed as requiring the Shareholder concerned to exercise all rights
      and powers of control over the affairs of any other person which that
      Shareholder is able to exercise (whether directly or indirectly) in order
      to secure performance of such obligation.

PERMITTED TRANSFEREES AND GROUP MEMBERS

1.8   The rights and obligations of a party pursuant to this Agreement shall, in
      relation to a party, extend to and incorporate any Permitted Transferee or
      any member of the same Group of such party.

2.    ESTABLISHMENT OF JOINT VENTURE

2.1   Each of the Shareholders have acquired from MEIF UK the number of Shares
      set out below against its name pursuant to the SPA which constitute the
      entire issued share capital of the Company:

<TABLE>
<CAPTION>
            SHAREHOLDER               NUMBER OF SHARES    PERCENTAGE OF SHARES
                                                                   (%)
<S>                                   <C>                 <C>
[REDACTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST]                           125                 16.6445

[REDACTED PURSUANT TO CONFIDENTIAL           125                 16.6445
TREATMENT REQUEST]

MEIF                                         501                 66.7110
                                             ---                --------
Total                                        751                100.0000
</TABLE>

2.2   Each of the Shareholders has agreed to subscribe for Preferred Equity
      Certificates issued by the Company pursuant to the Preferred Equity
      Certificate Agreements in the amount set out below against its name on the
      terms of the Preferred Equity Certificate between that Shareholder and the
      Company:

<TABLE>
<CAPTION>
            SHAREHOLDER               AMOUNT TO BE SUBSCRIBED    PERCENTAGE OF PREFERRED
                                              (pound)            EQUITY CERTIFICATES (%)
<S>                                   <C>                        <C>
[REDACTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST]                          13,924,227                   16.6445

[REDACTED PURSUANT TO CONFIDENTIAL          13,924,227                   16.6445
TREATMENT REQUEST]

MEIF                                        55,808,303                   66.7110
                                            ----------                  --------
Total                                       83,656,757                  100.0000
</TABLE>

CONFIDENTIAL TREATMENT REQUESTED BY MACQUARIE INFRASTRUCTURE COMPANY TRUST AND
MACQUARIE INFRASTRUCTURE COMPANY LLC

                           SEW Coinvestment Agreement

                                      -5-

<PAGE>

2.3   If a Shareholder:

      (a)   fails to pay up subscription monies under its Preferred Equity
            Certificate Agreement with the Company in accordance with the terms
            of and by the date specified in that Agreement; and/or

      (b)   fails to pay up acquisition funds on Shares pursuant to the SPA;

            then such Shareholder agrees to severally indemnify the Company and
            each other Shareholder (NON-DEFAULTING SHAREHOLDER) against any and
            all loss, damage, cost, liability, demand, charge or expense
            (including legal fees) suffered or incurred by the Company and/or
            the Non-Defaulting Shareholders in connection with or arising out of
            the failure of the Company to complete the Share Purchase Agreement.

3.    PURPOSE OF THE COMPANY

      The business of the Company shall be to acquire and hold the Parent
      Securities.

4.    RELATED AGREEMENTS

      The parties shall ensure that immediately upon execution of this
      Agreement:

      (a)   the Company enters into the Sale and Purchase Agreement and all
            agreements and documents ancillary thereto;

      (b)   the Shareholders shall and the Company shall procure that MEIF UK
            enters into the SPA; and

      (c)   the Company and the Shareholders enter into the Preferred Equity
            Certificate Agreements.

5.    THE BOARD AND MANAGEMENT

SUPERVISION BY THE BOARD

5.1   The Board shall (subject to the requirements of clause 7) be responsible
      for the overall direction and supervision of the Company.

5.2   Subject to the requirements of any relevant law which provides otherwise,
      the Board shall be responsible for all decisions relating to the
      management of the Company except for Reserved Shareholder Matters.

5.3   The Board of Managers shall be appointed by MEIF, acting through its
      delegate, the Adviser (and such other person who may be acting as manager
      of MEIF from time to time). The Shareholders authorise MEIF and
      irrevocably grant a power of attorney to it to exercise any right to vote
      attaching to their shares in relation to the appointment of

                           SEW Coinvestment Agreement

                                      -6-

<PAGE>

      directors including the execution of forms of proxy and/or powers of
      attorney to ensure that MEIF is able to exercise such powers.

6.    APPOINTMENT OF THE ADVISER

      Each Shareholder agrees to procure the appointment of the Adviser and the
      Adviser agrees to accept such appointment on the terms set out herein and
      pursuant to separate Advisory Agreements between each Shareholder and the
      Adviser.

7.    RESERVED MATTERS

USE OF POWERS

7.1   The Shareholders shall use their respective powers to ensure, so far as
      they are legally able, that no action or decision is taken (whether by the
      Board, the Company, any subsidiary of the Company or any of the officers
      or managers of the Company or any subsidiary) relating to any of the
      matters specified in clause 7.2 (RESERVED SHAREHOLDER MATTERS) unless such
      matter is approved by a resolution of Shareholders at a general meeting of
      the Company. At the general meeting the outcome of the resolution will be
      determined by the majority of Shareholders representing both (i)
      three-quarters of the corporate capital and (ii) greater than
      three-quarters of the Qualifying Corporate Capital in the case of the
      Reserved Shareholder Matters in clause 7.2(a), (b) or (c) or all of the
      Shareholders in the case of the Reserved Shareholder Matters in clause
      7.2(d), provided in each case that the relevant notice requirements
      imposed by Luxembourg law for the holding of meetings are satisfied.

RESERVED SHAREHOLDER MATTERS

7.2   The Reserved Shareholder Matters are:

      (a)   altering the Articles;

      (b)   changing the issued share capital or Preferred Equity Certificates
            of the Company or the rights attaching thereto;

      (c)   except as required by law, the placing of the Company in liquidation
            or other external administration or dissolution of the Company; and

      (d)   the Company engaging in a business other than investing directly or
            indirectly in SEW or realising such investment.

MEETINGS OF SHAREHOLDERS

7.3   General meetings of Shareholders shall take place in accordance with the
      applicable provisions of the Articles including on the basis that the
      notice of meeting shall set out in reasonable detail the matters to be
      discussed (unless the Shareholders agree otherwise) and shall entitle a
      Shareholder to attend in person or by proxy.

                           SEW Coinvestment Agreement

                                      -7-

<PAGE>

8.    FINANCIAL MATTERS

AUDITORS

8.1   The auditors of the Company shall be PricewaterhouseCoopers or such firm
      of accountants as may be agreed from time to time by the Board.

ACCOUNTING REFERENCE DATE

8.2   The accounting reference date of the Company shall be 31 March and each
      Financial Year of the Company shall end on 31 March in each year or such
      other date as the Shareholders may from time to time determine.

DISTRIBUTION OF CASH

8.3   Each Shareholder will use all powers vested in it as a shareholder of the
      Company to procure that and the Company shall procure that the Parent,
      subject always to the Company and the Parent (as the case may be) having
      retained, in the opinion of its directors, sufficient financial resources
      to meet its normal and foreseeable working capital requirements for the
      following financial year and having made adequate provision for
      liabilities in accordance with International Accounting Standards
      consistently applied (and having respected the legal reserve foreseen by
      Luxembourg company law), the Parent shall make to the Company and the
      Company will make to the Shareholders the maximum possible distributions
      of available cash each year, whether by repayment of interest or capital
      on Shareholder loans, cash settlement or other payments pursuant to the
      Preferred Equity Certificates, by way of interest, dividends or otherwise.

      Any distribution by the Company to Shareholders, whether by way of
      interest, dividend or otherwise shall be made in accordance with the terms
      of the Preferred Equity Certificate Agreements and otherwise pro rata
      according to their respective holdings of Shares.

ACCOUNTING PRINCIPLES

8.4   Without prejudice to the Company's obligations to draw up and submit to
      the Shareholders annual financial statements and, as the case may be,
      consolidated accounts in accordance with Luxembourg law, the Company's
      accounts shall be prepared in accordance with International Accounting
      Standards.

9.    EXPENSES

9.1   Company expenses

      In addition to any other right of indemnity which it may have under this
      Agreement or at law, the Adviser and its delegates and agents shall be
      indemnified and entitled to be reimbursed for, or have paid, in each case,
      by the Company on demand, all reasonable costs incurred in relation to the
      proper performance of its powers and duties under this Agreement or in
      relation to the administration of the Company (in either case, whether by

                           SEW Coinvestment Agreement

                                      -8-

<PAGE>

      the Adviser or any permitted delegate or agent of the Adviser) ("Costs").
      This includes but is not limited to reasonable Costs as incurred in
      connection with:

      (a)   the administration of the Company, including travel and
            accommodation expenses and expenses in connection with any register
            or the valuation of any asset of the Company or the Company as a
            whole;

      (b)   borrowing arrangements on behalf of the Company or guarantees in
            connection with the Company, including hedging costs;

      (c)   the admission of the Company to and compliance with the listing
            rules of any stock exchange;

      (d)   convening and holding meetings of Shareholders, holders of Preferred
            Equity Certificates or other interests in the Company, the
            implementation of any resolutions and communications with
            Shareholders or option holders and attending any meetings of the
            Company;

      (e)   taxes (including any amount charged by a supplier of goods or
            services or both to the Adviser by way of or as a reimbursement for
            VAT) and financial institution fees;

      (f)   the engagement of agents (including real estate agents and managing
            agents), valuers, contractors and advisers (including accounting,
            auditing, consulting, financial, tax and legal advisers) whether or
            not the agents, valuers, contractors or advisers are Associates of
            the Adviser provided that the arrangements with Associates shall be
            on an arm's length basis and only for services that the Adviser is
            not already obliged to provide pursuant to its advisory agreement
            with any Coinvestor;

      (g)   preparation and audit of the taxation returns, financial statements
            and accounts of the Company;

      (h)   termination of this Agreement (other than due to the Adviser's
            default under this Agreement) and the retirement or removal of the
            Adviser and the appointment of a replacement (but only if the Board
            requests the Adviser to perform functions in relation to the
            appointment of the replacement);

      (i)   any court proceedings, arbitration or other dispute concerning the
            Company and/or the Adviser (other than in respect of actions
            successfully brought against the Adviser or any employee, agent or
            contractor of the Adviser);

      (j)   all damages, expenses, payments, legal and other costs and
            disbursements incurred by the Adviser in relation to or in
            connection with any claim, dispute or litigation arising as a result
            of or in connection with any untrue representation or warranty
            contained in any document relating to any investment by the Company
            and any offering document for any bond issue or other borrowing
            except where the claim, dispute or litigation arises out of the
            negligence, fraud or wilful default

                           SEW Coinvestment Agreement

                                      -9-

<PAGE>

            of, or breach of this Agreement by, the Adviser or any employee,
            agent or contractor of the Adviser; and

      (k)   recording, managing and resolving disputes, except in circumstances
            where the dispute is between the Company and the Adviser and the
            dispute is resolved or determined in favour of the Company, in which
            case any expenses paid or reimbursed under this clause must be
            repaid.

10.   TAX MATTERS

CO-OPERATION

10.1  Each of the Shareholders agrees to co-operate, and undertakes to procure
      that its subsidiaries shall co-operate, to such extent as may be
      reasonably requested in connection with the making of any returns, claims,
      or elections for taxation purposes by the Company in relation to the
      taxation affairs of the Company or the Company's Group.

RESIDENCE

10.2  Each of the Shareholders agrees with the Company and each other
      Shareholder that the Company shall at all times be resident in Luxembourg
      for tax purposes and shall not be resident in any other country for tax
      purposes.

11.   REGULATORY MATTERS

CO-OPERATION

11.1  The parties shall co-operate with each other and the Adviser to ensure
      that all information necessary or desirable for making (or responding to
      any requests for further information following) any notification or filing
      made in respect of this Agreement, or the transactions contemplated by it,
      is supplied to the party dealing with such notification and filing and
      that they are properly, accurately and promptly made.

REGULATORY ACTION

11.2  If any Regulatory Action material to the Company or its Business is taken
      or threatened, the Shareholders shall promptly meet to discuss the
      situation and the action to be taken as a result and whether any
      modification to the terms of this Agreement (or any agreement entered into
      pursuant to this Agreement) should be made in order that any requirement
      (whether as a condition of giving any approval, exemption, clearance or
      consent or otherwise) of any regulatory authority may be reconciled with,
      and within the intended scope of, the business arrangement contemplated by
      this Agreement. The Shareholders shall co-operate to give effect to any
      agreed modifications.

                           SEW Coinvestment Agreement

                                      -10-

<PAGE>

12.   TRANSFER

GENERAL

12.1  The provisions of this clause 12 and Schedule 3 apply in relation to any
      transfer or proposed transfer of Securities in the Company.

RESTRICTION ON TRANSFER

12.2  Except as permitted by the provisions of Schedule 3 no Shareholder (nor
      any member of its Group) shall:

      (a)   transfer any Securities;

      (b)   grant, declare, create, deal in or dispose of any right, obligation
            or interest in any Securities; or

      (c)   create or permit to exist any pledge, lien, fixed or floating charge
            or other encumbrance (save for any arising by operation of law) over
            any Securities.

TRANSFER OF SHARES - CONCURRENT REQUIREMENTS

12.3  No Shareholder shall transfer any Shares, the Company shall not register
      any transfer of Shares and the Shareholders shall procure that no transfer
      of Shares is registered by the Managers, unless the transferring
      Shareholder concurrently:

      (a)   assigns its rights and obligations under its Preferred Equity
            Certificate Agreement in the same proportion as the proportion of
            the Shareholder's total Shares being transferred by that
            Shareholder; and/or

      (b)   to the extent that the proposed transferee of such Shares is not
            already a party to this Agreement, subject to such party entering
            into a Deed of Adherence.

ASSIGNMENT OF RIGHTS UNDER PREFERRED EQUITY CERTIFICATE AGREEMENT

12.4  No Shareholder shall assign any proportion of its rights and obligations
      under its Preferred Equity Certificate Agreement to any assignee unless
      the assigning Shareholder concurrently transfers to the assignee, in
      accordance with this clause 12 and Schedule 3, the same proportion of the
      Shareholder's total Shares as the proportion of the Shareholder's rights
      and obligations under the Preferred Equity Certificate Agreement which the
      Shareholder seeks to assign to the assignee.

13.   ISSUE OF NEW SECURITIES

13.1  Subject to clause 13.3, the Shareholders shall procure that the Company
      does not issue any new shares or Preferred Equity Certificates (or similar
      instruments) in itself or cause or allow any new shares in any subsidiary
      to be issued (NEW SHARES) unless it has first invited the Shareholders to
      subscribe for the New Shares pro rata to their current holdings

                           SEW Coinvestment Agreement

                                      -11-

<PAGE>

      of Shares. If a Shareholder does not subscribe for its pro rata
      entitlement to the New Shares or any portion thereof within thirty (30)
      Business Days of the Company issuing an invitation to subscribe, the
      Shareholders shall procure that the Company invites MEIF to subscribe for
      the New Shares which have not been subscribed for (the UNSOLD SHARES).
      MEIF shall have seven (7) Business Days to subscribe for the Unsold
      Shares. If MEIF does not subscribe for any number of the Unsold Shares
      within seven (7) Business Days, the Company shall invite Non-MEIF
      Shareholders to subscribe for those Unsold Shares (the REMAINING UNSOLD
      SHARES). In the event that Non-MEIF Shareholders deliver notices to
      subscribe for more than the number of Remaining Unsold Shares, the Company
      shall allot the Remaining Unsold Shares in accordance with the ratio of
      the amount of Remaining Unsold Shares subscribed for by such Non-MEIF
      Shareholder to the total number of Remaining Unsold Shares subscribed for
      by all Non-MEIF Shareholders, provided that each accepting Non-MEIF
      Shareholder shall be entitled to subscribe for a minimum of the lesser of
      its Pro Rata Proportion and the proportion that the number of Remaining
      Unsold Shares subscribed for by the Non-MEIF Shareholder bears to the
      total number of Remaining Unsold Shares. For the purposes of this clause
      13, PRO RATA PROPORTION means, with respect to each Non-MEIF Shareholder,
      that number of Securities which equals the Remaining Unsold Shares
      multiplied by a fraction the numerator of which shall be the number of
      Shares owned by such Non-MEIF Shareholder and the denominator of which
      shall be the aggregate number of Shares owned by all Non-MEIF
      Shareholders.

13.2  Subject to clause 13.3, if there are any Remaining Unsold Shares remaining
      after the procedure in clause 13.1 has been completed, the Company may
      issue those Remaining Unsold Shares on the same terms and conditions as
      offered to the Shareholders pursuant to clause 13.1 to a third party
      within seven (7) Business Days, provided that the third party executes a
      Deed of Adherence.

13.3  The Company shall be free to issue New Shares (and the Shareholders shall
      not be entitled to participate in or restrict any such issue):

      (a)   to any third party or parties nominated by the Adviser in order to
            fund the purchase of the Retained Shares (as defined in paragraph
            4.3 of Schedule 3); or

      (b)   in relation to up to 5 per cent of the fully diluted share capital
            of any subsidiary (whether by way of option, issue or otherwise) to
            employees, consultants and directors of the Company (or any of its
            subsidiaries); or

      (c)   pursuant to any group re-structuring or reorganisation which results
            in the Company directly or indirectly owning before such event, the
            same economic rights in such subsidiary after such event, as it did
            before

      provided that to the extent that the proposed subscriber for such New
      Shares is not already a party to this Agreement, it executes a Deed of
      Adherence.

                           SEW Coinvestment Agreement

                                      -12-

<PAGE>

14.   FURTHER ASSURANCE

14.1  So far as it is legally able, each Shareholder agrees with the other
      Shareholders to exercise all voting rights and powers (direct or indirect)
      available to it in relation to any person and/or the Company to ensure
      that the provisions of this Agreement (and the other agreements referred
      to in this Agreement) are completely and punctually fulfilled, observed
      and performed and generally that full effect is given to the principles
      set out in this Agreement.

15.   NON-ASSIGNMENT

15.1  No Shareholder, nor the Company, nor any guarantor shall, nor shall
      purport to, assign, transfer, charge or otherwise deal with all or any of
      its rights and/or obligations under this Agreement nor grant, declare,
      create or dispose of any right or interest in it in whole or in part
      (otherwise than pursuant to a transfer of Shares or assignment of rights
      and obligations under a Shareholder's Preferred Equity Certificate
      Agreement in accordance with the terms of this Agreement).

16.   WAIVER OF RIGHTS

16.1  No waiver by a party of a failure by the other party to perform any
      provision of this Agreement operates or is to be construed as a waiver in
      respect of any other failure whether of a like or different character.

17.   AMENDMENTS

17.1  A variation of this Agreement (or of any of the documents referred to in
      it) is valid only if it is in writing and signed by or on behalf of each
      party (except that a variation of any provision of this Agreement which
      only affects the respective rights and obligations of the Shareholders as
      between themselves does not need the Company's agreement).

18.   INVALIDITY

18.1  If any provision of this Agreement is or is held to be invalid or
      unenforceable, then so far as it is invalid or unenforceable it has no
      effect and is deemed not to be included in this Agreement. This shall not
      invalidate any of the remaining provisions of this Agreement.

19.   NO PARTNERSHIP OR AGENCY

19.1  Nothing in this Agreement (or any of the arrangements contemplated by it)
      is or shall be deemed to constitute a partnership between the Shareholders
      nor, except as may be expressly set out in it, constitute any party the
      agent of the other for any purpose.

19.2  Unless the Shareholders agree otherwise in writing, none of them shall:

      (a)   enter into any contracts or commitments with third parties as agent
            for the Company or for any of the other Shareholders; or

                           SEW Coinvestment Agreement

                                      -13-

<PAGE>

      (b)   describe itself as such an agent or in any way hold itself out as
            being such an agent.

20.   ANNOUNCEMENTS

20.1  No formal public announcement or press release in connection with the
      signature or subject matter of this Agreement shall (subject to clause
      20.2) be made or issued by or on behalf of any party or any member of its
      Group without the prior written approval of the Shareholders (such
      approval not to be unreasonably withheld or delayed).

20.2  If a party has an obligation to make or issue any announcement required by
      law or by any stock exchange or by any governmental authority, the
      relevant party shall give the other parties every reasonable opportunity
      to comment on any announcement or release before it is made or issued
      (provided that this shall not have the effect of preventing the party
      making the announcement or release from complying with its legal and/or
      stock exchange obligations).

21.   COSTS

21.1  Each of the Shareholders shall pay its own legal and accountancy costs,
      charges and expenses (including taxation) incurred in connection with
      negotiating, preparing and implementing this Agreement and the
      transactions contemplated by it.

22.   NO RELIANCE

22.1  No party has relied or has been induced to enter into this Agreement in
      reliance on any representation, warranty or undertaking which is not
      expressly set out or referred to in this Agreement.

22.2  A party may claim in contract for breach of warranty under this Agreement
      but no party shall have any claim or remedy in respect of
      misrepresentation (whether negligent or otherwise and whether made prior
      to, and/or in, this Agreement) or untrue statement made by the other
      party. Liability for, or any remedy in respect of, fraudulent
      misrepresentation is not excluded.

23.   CONFLICT WITH ARTICLES

SUPREMACY OF THIS AGREEMENT

23.1  If the provisions of this Agreement conflict with the Articles, the
      provisions of this Agreement shall prevail as between the Shareholders.
      The Shareholders shall:

      (a)   exercise all voting and other rights and powers available to them to
            give effect to the provisions of this Agreement; and

      (b)   (if necessary) ensure that any required amendment is made to the
            Articles.

                           SEW Coinvestment Agreement

                                      -14-

<PAGE>

24.   DURATION

24.1  This Agreement shall terminate upon a resolution being passed to wind-up
      the Company in accordance with this agreement. In such event, the
      Shareholders shall endeavour to agree a suitable basis for dealing with
      the Company's interests and assets. Subject to this clause 24, the
      Shareholders shall co-operate (but without any obligation to provide any
      additional finance) with a view to enabling all existing obligations of
      the Company to be completed insofar as the Company's resources allow.

25.   NOTICES

NOTICES

25.1  Any notice or other formal communication to be given under this Agreement
      shall be in writing and signed by or on behalf of the party giving it. It
      shall be:

      (a)   sent by fax to the relevant number set out in clause 25.2; or

      (b)   delivered by hand or sent by courier to the relevant address in
            clause 25.2.

      In each case it shall be marked for the attention of the relevant party
      set out in clause 25.2 (or as otherwise notified from time to time under
      this Agreement), with a copy to MEIF as set out in that clause. Any notice
      given by hand delivery, fax or courier shall be deemed to have been duly
      given:

      (c)   if hand delivered, when delivered;

      (d)   if sent by fax, twenty four (12) hours after the time of despatch;

      (e)   if sent by courier, on the fourth Business Day from the date of
            posting

      unless there is evidence that it was received earlier than this and
      provided that, where the delivery or transmission occurs after 6 pm on a
      Business Day or on a day which is not a Business Day, service shall be
      deemed to occur at 9 am on the next following Business Day. References to
      time in this clause are to local time in the country of the addressee.

NOTICE DETAILS

25.2  The addresses and fax numbers of the parties for the purpose of clause
      25.1 are:

      (a)   COINVESTORS:

            (i)   [REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]

            ADDRESS: [REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]

CONFIDENTIAL TREATMENT REQUESTED BY MACQUARIE INFRASTRUCTURE COMPANY TRUST
AND MACQUARIE INFRASTRUCTURE COMPANY LLC

                           SEW Coinvestment Agreement

                                      -15-

<PAGE>

            Attention: [REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]

            Fax:  [REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]

            (ii)  [REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]

            Address: [REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]

            Attention: [REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]

            Fax:  [REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]

      (b)   MEIF:

            Address: 398, route d'Esch, L-1471

            Attention:

            Fax:

            with a copy to the Adviser

      (c)   The Company:

            Address: 5, rue Guillaume Kroll, L-1882

            Attention: Gerard Becquer

            Fax: +352 48 18 28 3941

            with a copy to the Adviser

      (d)   The Adviser:

            Address: Level 30, CityPoint, 1 Ropemaker Street, London EC2Y 9HD
                     United Kingdom

            Attention: Annabelle Helps

            Fax: +44 20 7065 2041

                           SEW Coinvestment Agreement

CONFIDENTIAL TREATMENT REQUESTED BY MACQUARIE INFRASTRUCTURE COMPANY TRUST AND
MACQUARIE INFRASTRUCTURE COMPANY LLC

                                      -16-

<PAGE>

ENGLISH LANGUAGE

25.3  All notices or formal communications under or in connection with this
      Agreement shall be in the English language or, if in any other language,
      accompanied by a translation into English. In the event of any conflict
      between the English text and the text in any other language, the English
      text shall prevail.

26.   COUNTERPARTS

      This Agreement may be executed in any number of counterparts and by the
      parties to it on separate counterparts, each of which shall be an original
      but all of which together shall constitute one and the same instrument.

27.   RIGHTS UNDER CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

27.1  The parties intend that this Agreement may be enforced pursuant to the
      Contracts (Rights of Third Parties) Act 1999 by the Adviser, to the extent
      that this Agreement grants rights to the Adviser.

27.2  No person who is not a party to this Agreement, other than the Adviser,
      shall have rights under the Contracts (Rights of Third Parties) Act 1999
      to enforce any of its terms.

28.   GOVERNING LAW AND JURISDICTION

28.1  This Agreement shall be governed by and construed in accordance with the
      laws of England (without prejudice to the mandatory provisions of
      Luxembourg law) and shall be subject to the exclusive jurisdiction of the
      English Courts.

AS WITNESS this Agreement has been signed by the duly authorised representatives
of the parties the day and year first before written.

                           SEW Coinvestment Agreement

                                      -17-

<PAGE>

                                   SCHEDULE 1

                                DEED OF ADHERENCE

THIS DEED is made on [               ]

BY [        ] of [                   ] (the COVENANTOR) [and

BY [        ] of [                   ] (the GUARANTOR)]

WHEREAS:

(A)   On [      ] 2004 the persons in the schedule hereto entered into a
      shareholders' agreement governing their relationship as shareholders in
      Macquarie Luxembourg Water S.A.R.L (the COMPANY) and establishing the
      manner in which the affairs of the Company would be conducted (the
      SHAREHOLDERS' AGREEMENT).

(B)   The Covenantor wishes to become a party to the Shareholders' Agreement
      immediately upon acquiring certain Securities in the Company and wishes to
      amend the Shareholders' Agreement with the effect that the Covenantor
      becomes a party thereto and as such assumes the rights and obligations of
      a Shareholder under the Shareholders' Agreement.

(C)   [The Covenantor is a member of the Guarantors Group and the Guarantor has
      agreed to guarantee the obligations of the Covenantor under the
      Shareholders' Agreement.](1)

NOW THIS DEED WITNESSES as follows:

INTERPRETATION

1.    Words and expressions defined in the Shareholders' Agreement shall, unless
      the context otherwise requires, have the same meanings when used in this
      Deed.

ADHERENCE

2.    The Covenantor hereby covenants to and undertakes with each of the other
      persons in the schedule to this Deed and with each such other person who
      may from time to time expressly adhere to the Shareholders' Agreement (by
      way of execution of a deed or by way of novation) to be bound by and
      comply in all respects with the Shareholders' Agreement and to assume the
      benefits of the Shareholders' Agreement, as if the Covenantor had executed
      the Shareholders' Agreement and was named as an original party thereto.

---------------

(1)   Clauses in square brackets will apply where paragraph 6(b) of Schedule 3
      of the Shareholders' Agreement requires a guarantor.

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                                      -18-

<PAGE>

RETRANSFER

3.    The Covenantor and the Guarantor hereby undertake to each other
      Shareholder and to the Company that, if the Covenantor ceases or proposes
      to cease to be a member of the Guarantor's Group the Covenantor will
      forthwith transfer all its interests in any securities in the Company and
      assign its rights and obligations under its Preferred Equity Certificate
      Agreement to the Guarantor or to another member of the Guarantor's Group.

GUARANTEE

4.    The Guarantor hereby irrevocably and unconditionally guarantees the
      performance by the Covenantor of all of its obligations under this Deed,
      the Shareholders' Agreement.

CONTINUING GUARANTEE

5.    The guarantee given in this Deed shall be continuing and shall extend to
      the performance in full of all obligations guaranteed hereunder,
      regardless of any intermediate payment or discharge in whole or in part or
      performance in part.

WAIVER OF DEFENCES

6.    The liabilities and obligations of the Guarantor shall remain in force
      notwithstanding any act, omission, neglect, event or matter whatsoever
      whether or not known to the Guarantor, the Covenantor, the Company, the
      Adviser or the other Shareholders (other than the full performance of all
      obligations guaranteed hereunder) and the foregoing shall apply, without
      limitation, in relation to:

      (a)   anything which would have discharged the Guarantor (wholly or in
            part) whether as surety, co-obligor or otherwise or which would have
            afforded the Guarantor any legal or equitable defence;

      (b)   any winding up, dissolution, reconstruction or reorganisation, legal
            limitation, disability, incapacity or lack of corporate power or
            authority or other circumstances of, or any change in the
            constitution or corporate identity or loss of corporate identity by,
            the Covenantor or any other person; and

      (c)   anything which renders the Covenantor's obligations invalid or
            unenforceable under the Shareholders' Agreement and any defence or
            counterclaim which the Covenantor may be able to assert against any
            of the other Shareholders, the Adviser or the Company.

NO IMPAIRMENT OF GUARANTOR'S OBLIGATIONS

7.    Without limiting clause 6, none of the liabilities or obligations of the
      Guarantor under this Deed shall be impaired by the Company and other
      Shareholders agreeing with the Covenantor any amendment, variation,
      assignment, novation or departure (however substantial or material) of, to
      or from the Shareholders' Agreement so that any such amendment, variation,
      assignment, novation or departure (including any which may have

                           SEW Coinvestment Agreement

                                      -19-

<PAGE>

      been made before the signing of this Deed) shall, whatever its nature, be
      binding upon the Guarantor in all circumstances, notwithstanding that it
      may increase or otherwise affect the liability of the Guarantor.

8.    Without limiting clause 6, none of the liabilities or obligations of the
      Guarantor under this Deed shall be impaired by the Company, the Adviser
      and other Shareholders agreeing with the Covenantor any amendment,
      variation, assignment, novation or departure (however substantial or
      material) of, to or from any agreement so that any such amendment,
      variation, assignment, novation or departure (including any which may have
      been made before the signing of this Deed) shall, whatever its nature, be
      binding upon the Guarantor in all circumstances, notwithstanding that it
      may increase or otherwise affect the liability of the Guarantor.

DEMANDS

9.    Demands under this Deed may be made, and the liabilities and obligations
      of the Guarantor under this Deed may be enforced, irrespective of whether
      any demands, steps or proceedings are being or have been made or taken
      against the Covenantor and/or any third party.

RIGHTS SEVERAL

10.   The rights of the Company and each Shareholder under this Deed shall be in
      all respects several and the failure of any one or more of them to perform
      obligations under the Shareholders' Agreement shall in no way affect the
      rights of the others of them under or in connection with this Deed. It
      shall not be necessary for the Company or any other Shareholder to be
      joined as an additional party in any proceedings by a Shareholder to
      protect or enforce its rights and interests under this Deed.

11.   The rights of the Company, the Adviser and each Shareholder under this
      Deed shall be in all respects several and the failure of any one or more
      of them to perform obligations under the any agreement shall in no way
      affect the rights of the others of them under or in connection with this
      Deed. It shall not be necessary for the Company, the Adviser or any other
      Shareholder to be joined as an additional party in any proceedings by a
      Shareholder to protect or enforce its rights and interests, under this
      Deed.

INVALIDITY

12.   If any provision of this Deed becomes invalid, illegal or unenforceable in
      any respect under any law, the validity, legality and enforceability of
      the remaining provisions shall not in any way be affected or impaired.

CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

13.   The Adviser shall have the right to enforce this Deed pursuant to the
      Contracts (Rights of Third Parties) Act 1999. No person who is not a party
      to this Deed shall have the right to enforce any of its terms pursuant to
      the Contracts (Rights of Third Parties) Act 1999.

                           SEW Coinvestment Agreement

                                      -20-

<PAGE>

[AGENT FOR SERVICE OF PROCESS

14.   The Guarantor shall, unless it is a Company incorporated in England and
      Wales, at all times maintain an agent for service of process and any other
      documents in proceedings in England or any other proceedings in connection
      with this Deed of Adherence. Such agent shall be _______ ________
      currently of ________ _________ and any writ, judgment or other notice of
      legal process shall be sufficiently served on the Guarantor if delivered
      to such agent at its address for the time being. The Guarantor irrevocably
      undertakes not to revoke the authority of the above agent and if, for any
      reason, the Company requests the Guarantor to do so, the Guarantor shall
      promptly appoint another such agent with an address in England and so
      advise the Company. If following such request, the Guarantor fails to
      appoint another agent, the Company shall be entitled to appoint one on
      behalf of the Guarantor at the expense of the Guarantor.]

NOTICES

15.   For the purpose of the Shareholders' Agreement the Covenantor's address
      for notices shall be as follows:

Address:

Fax No:

Telex No:

Addressed for the personal attention of:

SUBMISSION TO JURISDICTION

16.   Each of the parties agrees that the Courts of England are to have
      exclusive jurisdiction to settle any disputes which may arise in
      connection with this Deed.

GOVERNING LAW

17.   This Deed shall be governed by and construed in accordance with English
      law without prejudice to the mandatory provisions of Luxembourg law.

                           SEW Coinvestment Agreement

                                      -21-

<PAGE>

                                   SCHEDULE 2

                             ARTICLES OF THE COMPANY

                           SEW Coinvestment Agreement

                                      -22-

<PAGE>

                                   SCHEDULE 3

                             TRANSFER OF SECURITIES

TRANSFER OF SECURITIES

RESALE OF SECURITIES

1.1   No Shareholder may transfer or agree to transfer any Securities other than
      in accordance with the provisions of this Schedule 3 and clause 12. Any
      transfer or purported transfer made in breach of this Schedule 3 or clause
      12 shall be void ab initio and of no effect and shall be disregarded by
      the Company. Each of the Shareholders undertakes to procure, so far as it
      is able, that each Manager shall exercise his power to cause the Company
      to refuse to register any transfer of Securities not made in accordance
      with this Agreement.

1.2   Subject to compliance with clauses 12.3 and/or 12.4 and paragraph 6 below,
      a Shareholder may at any time transfer any of the Securities held by it to
      a company which:

      (a)   (where the transferor is one of the parties itself) is a
            wholly-owned Subsidiary of that party; or

      (b)   (where the transferor is a Subsidiary) is either the party of which
            the transferor is a Subsidiary or is another wholly-owned Subsidiary
            of that party; or

      (c)   to a trust, managed investment scheme or collective investment
            scheme managed or advised by a party referred to in paragraph (a) or
            (b) or of which a party referred to in paragraph (a) or (b) is a
            trustee or responsible entity or managed or advised by a manager or
            adviser of the said Shareholder,

      and the remainder of this Schedule (other than paragraph 6) will not apply
      to any such transfer of Shares provided that if at any time a Shareholder
      ceases to be any of (a) or (b) or (c) above, the Securities will be
      transferred back to the original Shareholder.

RIGHTS OF FIRST REFUSAL ON A PROPOSED TRANSFER BY A SHAREHOLDER

2.1   Subject to paragraph 1 above and paragraph 3 below, a Shareholder
      intending to transfer or to agree to transfer any or all of the Securities
      it owns (the TRANSFEROR) shall not do so unless it has first made a
      conditional offer (on the same terms and conditions as those it originally
      proposed to transfer such Securities) to sell those Securities (the SALE
      SECURITIES) to each other Shareholder in accordance with the remainder of
      this Schedule 3, and such offer has not been accepted by the other
      Shareholders in respect of all of the Sale Securities.

2.2   Copies of any offer made by the Transferor pursuant to paragraph 2.1 above
      shall be delivered to the Company and each other Shareholder and shall
      consist of a conditional written offer (the WRITTEN OFFER) to sell to each
      other Shareholder the Sale Securities then subject to a bona fide cash
      offer from a third party (the OFFERED SECURITIES). Those copies shall have
      attached to them a statement of intention to transfer to a third party,
      the third

                           SEW Coinvestment Agreement

                                      -23-

<PAGE>

      party's name and address, the number of Offered Securities involved in the
      proposed transfer and the terms and conditions (including, without
      limitation, the price to be paid) of the transfer (the TRANSFER DETAILS).

2.3   Subject to paragraph 2.5, each other Shareholder shall be entitled to
      accept the Written Offer in respect of any or all of the Offered
      Securities by giving written notice (the NOTICE) to the Transferor and to
      the Company within thirty (30) Business Days after receipt of the Written
      Offer. Such Notice shall specify the number of Offered Securities to be
      purchased by such accepting Shareholder. The completion of any sale and
      purchase of Offered Securities by the Transferor to accepting Shareholders
      shall be conditional on all the Offered Securities being sold to one or
      more accepting Shareholders.

2.4   The Notice must specify a date for completion of the sale and purchase,
      which shall not be more than thirty (30) Business Days after the date upon
      which the Notice was given.

2.5   In the event that MEIF delivers a Notice in respect of some or all of the
      Offered Securities, such Offered Securities shall be sold (subject to
      satisfaction of the condition in paragraph 2.3) to MEIF by the Transferor,
      in priority to any other accepting Shareholder.

2.6   To the extent there are unsold Offered Securities (REMAINING OFFERED
      SECURITIEs) after taking into account the Offered Securities (if any) sold
      to MEIF pursuant to paragraph 2.5, the Remaining Offered Securities will
      be sold (subject to satisfaction of the condition in paragraph 2.3)
      pursuant to this paragraph 2.6. In the event that Non-MEIF Shareholders
      deliver Notices to accept more than the number of Remaining Offered
      Securities, such Remaining Offered Securities shall be sold to each such
      accepting Non-MEIF Shareholder by the Transferor in accordance with the
      ratio of the amount of Remaining Offered Securities accepted by such
      Non-MEIF Shareholder to the total number of Remaining Offered Securities
      accepted in Notices delivered by all Non-MEIF Shareholders provided that
      each accepting Non-MEIF Shareholder shall be entitled to be sold a minimum
      of the lesser of its Pro Rata Proportion and the proportion that the
      number of Remaining Offered Securities subscribed for by the Non-MEIF
      Shareholder bears to the total number of Remaining Offered Securities. For
      the purposes of this paragraph 2.6, PRO RATA PROPORTION means, with
      respect to each Non-MEIF Shareholder, that number of Shares which equals
      the Remaining Offered Securities multiplied by a fraction the numerator of
      which shall be the number of Shares owned by such Non-MEIF Shareholder and
      the denominator of which shall be the aggregate number of Shares owned by
      all Non-MEIF Shareholders.

2.7   The purchase price for the Offered Securities sold pursuant to paragraphs
      2.5 and 2.6 shall be the price set out in the Transfer Details. The
      purchase price shall be paid in cash or, if so provided in the Transfer
      Details, cash and deferred cash consideration in the same proportions and
      with the same terms of deferred consideration as set out in the Transfer
      Details.

2.8   Completion of the sale and purchase of the Offered Securities sold to
      Shareholders (PURCHASING SHAREHOLDERS) pursuant to paragraphs 2.5 and 2.6
      shall take place at the offices of the Company or another location agreed
      between the Transferor and each

                           SEW Coinvestment Agreement

                                      -24-

<PAGE>

      Purchasing Shareholder. The purchase price, to the extent comprised of
      cash, shall be paid, and documents evidencing any deferred consideration
      shall be delivered, at completion. At completion, the Transferor shall
      deliver to each Purchasing Shareholder the certificates and, if
      applicable, duly executed stock transfer forms in the name of the
      Purchasing Shareholder relating to the Offered Securities being purchased
      by that Purchasing Shareholder.

2.9   If the Offered Securities are not sold to Shareholders pursuant to
      paragraphs 2.5 and 2.6, the Transferor may transfer the Offered Securities
      to the prospective transferee (the TRANSFEREE) named in the Transfer
      Details attached to the Written Offer in respect of those Offered Shares
      in accordance with the terms set out in those Transfer Details within
      thirty (30) Business Days after expiry of the Written Offer provided that:

      (a)   the transfer shall be made only in strict accordance with the terms
            set out in the Transfer Details; and

      (b)   clause 12.3 and paragraphs 4 and 6 of this Schedule are complied
            with.

DRAG-ALONG RIGHTS

3.1   If at any time MEIF wishes to transfer (other than as part of an
      intra-Group reorganisation or to a partner of Macquarie European
      Infrastructure Fund LP or upon a listing of MEIF) all (but not some only)
      of its Securities to any person for cash (the PROPOSED TRANSFEREE), all
      Non-MEIF Shareholders promise to sell to the Proposed Transferee all (but
      not some only) of the Securities (and all other interests in the Company
      including rights and obligations under the Non-MEIF Shareholders'
      Preferred Equity Certificates, as the case may be) held by the Non-MEIF
      Shareholders (including any Securities issued after the date on which MEIF
      serves the Drag-Along Request (as defined in paragraph 3.2)) at the price
      per Share and/or Preferred Equity Certificate) and on the same terms and
      conditions offered by the Proposed Transferee to MEIF. All the Non-MEIF
      Shareholders undertake to perform such promise subject only to MEIF
      exercising its right (the DRAG-ALONG RIGHTS) to require them to do so.
      Each Non-MEIF Shareholder agrees to take all steps necessary to comply
      with the provisions of this paragraph 3.1 and to facilitate the exercise
      of a Drag-Along Right, including selling their Securities to a Proposed
      Transferee if required to do so pursuant to this paragraph 3.1.

3.2   To exercise a Drag-Along Right, MEIF shall give to each Non-MEIF
      Shareholder a written request (DRAG-ALONG REQUEST) containing:

      (a)   the name and address of the Proposed Transferee;

      (b)   the offered price per Share (and offered price for each Non-MEIF
            Shareholder's rights and obligations under its Preferred Equity
            Certificate Agreement, as the case may be), and

      (c)   the terms of payment and other material terms and conditions of the
            Proposed Transferee's offer (including the terms and conditions
            relating to the concurrent

                           SEW Coinvestment Agreement

                                      -25-

<PAGE>

            sale by MEIF of its rights and obligations under its Preferred
            Equity Certificate Agreement to the Transferee, pursuant to clause
            12.3).

3.3   On the date of sale by MEIF to the Proposed Transferee or, if later,
      within thirty (30) Business Days of service of a Drag-Along Request, each
      Non-MEIF Shareholder shall then be obliged to sell its Shares on the terms
      and conditions contained in the Drag-Along Request (including as to
      completion of the transaction or assignment of rights and obligations
      under its Preferred Equity Certificate Agreement) and otherwise in
      accordance with this Agreement.

      TAG-ALONG RIGHTS

4.1   Subject to clause 4.3 if at any time MEIF wishes to transfer (other than
      as part of an intra-group re-organisation or a transfer to a partner of
      Macquarie European Infrastructure Fund LP) any of its Securities to a
      Proposed Transferee, MEIF will not be permitted to transfer said
      Securities unless the Proposed Transferee shall:

      (a)   have offered to purchase from the Coinvestors all the Securities
            held by the Coinvestors on the same terms and conditions as the
            offer to purchase the Securities of MEIF; and

      (b)   in respect of any Coinvestor who wishes to take up the offer
            referred to in paragraph (a) above, acquire from such Coinvestor the
            Securities they hold, or such proportion as they wish to sell
            pro-rata, at the relevant price simultaneously with the acquisition
            from MEIF of the Securities to be sold.

4.2   Subject to clause 4.3, if at any time the whole or a significant majority
      of the shares in a subsidiary are proposed to be transferred (other than
      as part of any group re-structuring or re-organisation which results in
      the Company owning before such event, the same economic rights in such
      subsidiary after such event, as it did before), the parties shall, to the
      extent they are able, procure that such transfer shall not be permitted
      unless the proposed transferee shall:

      (a)   have offered to purchase from the Coinvestors all the Securities
            held by the Coinvestors on equivalent economic terms and conditions
            (as nearly as can be and having regard to any other interests of the
            Company other than the subsidiary being sold) as the offer to
            purchase the shares in the subsidiary; and

      (b)   in respect of any Coinvestor who wishes to take up the offer
            referred to in paragraph (a) above, acquire from such Coinvestor the
            Securities they hold, or such proportion as they wish to sell
            pro-rata, at the relevant price simultaneously with the acquisition
            of the shares of the subsidiary to be sold.

4.3   For the avoidance of doubt, the provisions of paragraphs 4.1 and 4.2 of
      this Schedule 3 shall not apply to any sale by Macquarie Leasing (UK)
      Limited (or any other member of the same Group as MBL) of all or any of
      its 24.9% interest in the Parent at the date of this Agreement ("the
      RETAINED SHARES").

                           SEW Coinvestment Agreement

                                      -26-

<PAGE>

4.4   The Company shall use all reasonable endeavours to procure that in the
      event that Macquarie Leasing (UK) Limited proposes to transfer any of the
      Retained Shares to anyone other than the Company or any member of the same
      Group as MBL:

      (a)   any such transfer is done on economic terms which are no more
            favourable to those upon which the Company acquired the Parent
            Securities (taking into account and adjusting for any material event
            which may have occurred between the date of this Agreement and the
            date of any such sale); and

      (b)   any such transferee shall be required to enter into an agreement,
            substantially in the form of the Deed of Adherence, agreeing to be
            bound by the terms of this Agreement as if the Retained Shares were
            Shares and the transferee was a party to this Agreement and named
            herein as a Coinvestor.

SPECIFIC PERFORMANCE

5.    The Company and the Shareholders hereby acknowledge that it is not
      possible to measure in money the damages which will accrue to the parties
      by reason of the failure of any Shareholder or the Company to observe any
      of the obligations in this Schedule 3. Therefore, the Company and the
      Shareholders shall have the right to specific performance of those
      obligations or other equitable remedies, and if any party shall institute
      any action or proceedings to enforce the provisions of this Agreement,
      both the Company and the Shareholders, as applicable, hereby waive any
      claim or defence that the party instituting the action or proceedings has
      an adequate remedy in damages.

ADHERENCE TO THIS AGREEMENT BY TRANSFEREES

6.    Any Shareholder wishing to effect a transfer of its Securities in
      accordance with the terms of this Agreement shall:

      (a)   procure that the transferee executes a Deed of Adherence; and

      (b)   except in the case of transfers by MEIF or as agreed to by the
            Company, if the transfer is to a member of the transferring
            Shareholder's Group, guarantee to the Company by deed the due
            performance of the transferee's obligations under this Agreement in
            terms agreed by the Board;

                           SEW Coinvestment Agreement

                                      -27-

<PAGE>

                                   SCHEDULE 4

                                 THE COINVESTORS
<TABLE>
<CAPTION>
                         NAME                                                            ADDRESS
                         ----                                                            -------
<S>                                                      <C>
[REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]    [REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]

[REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]    [REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]
</TABLE>

CONFIDENTIAL TREATMENT REQUESTED BY MACQUARIE INFRASTRUCTURE COMPANY TRUST
AND MACQUARIE INFRASTRUCTURE COMPANY LLC

                           SEW Coinvestment Agreement

                                      -28-

<PAGE>

                                  ATTESTATIONS

Executed and delivered as a deed by
[REDACTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST]        )
acting by:                                                   )

Executed and delivered as a deed by                          )
[REDACTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST]                                           )
acting by:                                                   )

Executed and delivered as a deed by                          )
MEIF LUXEMBOURG HOLDINGS SA                                  )

Executed and delivered as a deed by                          )
MACQUARIE INVESTMENT MANAGEMENT (UK) LIMITED                 )
acting by two directors/                                     )

Executed and delivered as a deed by                          )
MACQUARIE LUXEMBOURG WATER S.A.R.L.                          )
acting by:                                                   )

CONFIDENTIAL TREATMENT REQUESTED BY MACQUARIE INFRASTRUCTURE COMPANY TRUST
AND MACQUARIE INFRASTRUCTURE COMPANY LLC

                           SEW Coinvestment Agreement

                                      -29-

<PAGE>

                                  ATTESTATIONS

Executed and delivered as a deed by                          )
[REDACTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST]                                           )
acting by:                                                   )

Executed and delivered as a deed by                          )
[REDACTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST]                                           )
acting by:                                                   )

Executed and delivered as a deed by                          )
MEIF LUXEMBOURG HOLDINGS SA                                  )

Executed and delivered as a deed by                          )
MACQUARIE INVESTMENT MANAGEMENT (UK) LIMITED                 )
acting by two directors/                                     )
one director and the company secretary                       )

Executed and delivered as a deed by                          )
MACQUARIE LUXEMBOURG WATER S.AR.L.                           )
acting by:                                                   )

 CONFIDENTIAL TREATMENT REQUESTED BY MACQUARIE INFRASTRUCTURE COMPANY TRUST AND
                      MACQUARIE INFRASTRUCTURE COMPANY LLC

                           SEW Coinvestment Agreement

                                      -30-

<PAGE>

                                  ATTESTATIONS

Executed and delivered as a deed by                          )
[REDACTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST]                                           )
acting by:                                                   )

Executed and delivered as a deed by                          )
[REDACTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST]                                           )
acting by:                                                   )

Executed and delivered as a deed by                          )
MEIF LUXEMBOURG HOLDINGS SA                                  )

Executed and delivered as a deed by                          )
MACQUARIE INVESTMENT MANAGEMENT (UK) LIMITED                 )
acting by two directors /                                    )
one director and the company secretary                       )

Executed and delivered as a deed by                          )
MACQUARIE LUXEMBOURG WATER S.A.R.L.                          )
acting by:                                                   )

 CONFIDENTIAL TREATMENT REQUESTED BY MACQUARIE INFRASTRUCTURE COMPANY TRUST AND
                      MACQUARIE INFRASTRUCTURE COMPANY LLC

                           SEW Coinvestment Agreement

                                      -31-

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