Document:

EX-10.7

 

Exhibit 10.7

AGREEMENT RELATING TO REGISTRATION RIGHTS

AND OTHER MATTERS

DATED AS OF JANUARY 1, 2008

 

 

AGREEMENT RELATING TO REGISTRATION RIGHTS AND OTHER MATTERS

     THIS AGREEMENT RELATING TO REGISTRATION RIGHTS AND OTHER MATTERS (as the same may be amended,
modified or supplemented in accordance with its terms, this “Agreement”) is made as of
January 1, 2008 by and between Cascal B.V.1, a Dutch private limited liability company
(the “Company”), and Biwater Investments Limited, a company incorporated in England and
Wales (the “Shareholder”).

     Following the series of stock split and recapitalization transactions that will effectively
result in a 2,067-for-1 split of the Company’s shares and the Shareholder’s acquisition of all of
the Shares of the Company owned by Biwater B.V., the Shareholder will own 21,849,343 common shares,
par value EUR 0.50 per share, of the Company. This Agreement is being entered into in order to
state affirmatively the agreement of the Company to provide the registration rights set forth in
this Agreement and to address other matters related to the planned initial public offering of the
Company (the “IPO”), in which the Shareholder expects to sell for its own account a portion
of the Shares to be sold in the IPO. Unless otherwise provided in this Agreement, capitalized
terms used herein shall have the meanings set forth in Section 4.

     NOW, THEREFORE, in consideration of the mutual premises herein and other good and valuable
consideration, the receipt and sufficiency of which the parties acknowledge, the parties hereby
agree as follows:

1. Registration Rights Agreement.

     1.1 Demand Registrations.

     (a) Requests for Registration. On no more than two (2) occasions on or after
the DR Reference Date, the Shareholder may request registration under the Securities Act of
all or part of its Registrable Securities on Form F-1 or any similar long-form registration
(“Long-Form Registrations”), or Form F-3 or any similar short-form registration
(“Short-Form Registrations”), if available; provided, however, that
the Registrable Securities to be included shall have an aggregate offering price (determined
as provided in the applicable provisions of Securities Act Rule 457(a) and (c)) of not less
than $15,000,000. All such requests shall be made by the Shareholder giving written notice
thereof to the Company. All registrations requested pursuant to this Section 1.1(a) are
referred to herein as “Demand Registrations.” Each request for a Demand
Registration shall specify the number of Registrable Securities requested to be registered
and the anticipated per share price range for the sale of the Registrable Securities.
Subject to Section 1.1(d), the Company will include in each such Demand Registration all
Registrable Securities with respect to which written notices of request for inclusion
therein have been given to the Company as provided above.

 

			
	1	 	Cascal B.V. will be converted to a Dutch public limited
liability company and renamed Cascal N.V prior to the completion of its initial
public offering.

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     (b) Priority on Demand Registrations. If a Demand Registration is an
underwritten offering and the managing underwriters advise the Company in writing that, in
their opinion, the number of Registrable Securities and other securities (if any) requested
to be included in such offering exceeds the number of Registrable Securities and other
securities (if any) which can be sold in such offering without adversely affecting the
marketability of the offering, the Company will include in such registration prior to the
inclusion of any securities that are not Registrable Securities the number of Registrable
Securities requested to be included that in the opinion of the underwriters can be sold
without adversely affecting the marketability of the offering.

     (c) Restrictions on Demand Registrations. The Company will not be obligated to
effect any Demand Registration prior to the DR Reference Date or within 180 days after the
effective date of a previous Demand Registration.

     (d) Selection of Underwriters. In any Demand Registration, the Shareholder
will select the underwriters and manager(s) to administer the offering, subject to the
approval of the Company, which approval will not be unreasonably withheld or delayed.

     (e) Other Registration Rights. Except as provided in this Agreement, the
Company will not grant to any Persons the right to require or request the Company to
register any of its equity securities, or any securities convertible or exchangeable into or
exercisable for any of its equity securities, without the prior written consent of the
Shareholder, which consent shall not be unreasonably withheld or delayed; provided that the
Company may without such consent grant rights to other Persons to participate in any
registration of securities of the Company so long as those such rights are either pari passu
or subordinate to the rights of the holders of Registrable Securities provided for in
Section l.1(b) and in Sections 1.2(b) and 1.2(c).

     (f) Demand Registration Expenses. The Registration Expenses of the
Shareholder, whether or not it becomes effective, will be paid by the Company in accordance
with Section 1.5.

     (g) Delays in Filing Registration Statement. If the Company has been requested
by the Shareholder to effect a Demand Registration, whether or not a registration statement
with respect thereto has been filed or has become effective, and furnishes to the
Shareholder a copy of a resolution of the Board of Directors of the Company, certified by
the Company Secretary to be true and correct, stating that, in the good faith judgment of
the Board of Directors it would be seriously detrimental to the Company and its stockholders
for such Demand Registration (A) to be filed on or before the dates such filing would
otherwise be required hereunder; (B) to become effective; or (C) to remain effective as long
as such registration statement would otherwise be required to remain effective because such
action (x) would materially interfere with a significant acquisition, corporate
reorganization or other similar transaction involving the Company; (y) would require
disclosure of material information that the Company has a bona fide business purpose for
preserving as confidential or (z) the Company is unable to comply with the requirements of
the Securities and Exchange Commission, the Company has the

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right, but not more than once with respect to any Demand Registration, to defer such filing
or effectiveness or to suspend such effectiveness for a period of not more than 180 days;
provided, however, that in the case of a deferral or suspension based on
subclause (z), above, the Company shall use commercially reasonable efforts to effect
compliance with the requirements of the Securities and Exchange Commission as promptly as
may be practicable within such 180-day period.

     1.2. Piggyback Registrations.

     (a) Right to Piggyback. Whenever the Company proposes to register any of its
securities under the Securities Act (other than pursuant to a Demand Registration) and the
registration form to be used may be used for the registration of Registrable Securities (a
“Piggyback Registration”), the Company will give prompt written notice to the
Shareholder of its intention to effect such a registration and will include in such
registration, subject to Sections 1.2(b) and 1.2(c), all Registrable Securities with respect
to which the Shareholder has given the Company written notices of request for inclusion
therein within 20 days after the Company’s notice was given.

     (b) Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company and the managing underwriters
advise the Company in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such offering without
adversely affecting the marketability of the offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii) second, the
Registrable Securities requested to be included in such registration (subject to pro rata
reduction along with other holders with pari passu registration rights), and (iii) third, if
all of the Registrable Securities requested to be included in such registration are so
included, other securities requested or permitted to be included in such registration.

     (c) Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration on behalf of holders of the Company’s securities (other
than the Shareholder) for the benefit of which the Shareholder has consented to priority
registration rights, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering without adversely affecting the marketability
of the offering, the Company will include (i) first the securities requested to be included
in the registration statement on behalf of the other holders of the Company’s securities,
and if all such securities are included in such registration, then (ii) second, the
Registrable Securities requested to be included in such registration. To the extent that
the managing underwriters determine that additional securities may be included in such
registration, such additional securities shall be comprised of (i) first, the Registrable
Securities requested to be included in such registration (subject to pro rata reduction
along with other holders with pari passu registration rights), and (ii) second, if all of
the Registrable Securities requested to be included in such registration are so included,
other securities requested or permitted to be included in such registration.

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     (d) Selection of Underwriters. If a Piggyback Registration is an underwritten
primary registration on behalf of the Company, the selection of underwriters and manager(s)
for the offering by the Company must be approved by the Shareholder, which approval will not
be unreasonably withheld or delayed.

     (e) Other Registrations. If the Company previously has filed a registration
statement with respect to Registrable Securities pursuant to Section 1.1 or pursuant to this
Section 1.2, and if such previous registration has not been withdrawn or abandoned, the
Company will not file or cause to be effected any other registration of any of its equity
securities or securities convertible or exchangeable into or exercisable for any of its
equity securities under the Securities Act except on Form S-8 or any successor form, whether
on its own behalf or at the request of any holder or holders of such securities, until a
period of at least 90 days has elapsed from the effective date of such previous
registration.

     (f) Piggyback Registration Expenses. The Registration Expenses of the
Shareholder in all Piggyback Registrations, whether or not they become effective, will be
paid by the Company in accordance with Section 1.5.

     1.3. Holdback Agreements.

     (a) The Shareholder agrees not to effect any public sale or distribution (including
sales pursuant to Rule 144) of equity securities of the Company or any securities
convertible into or exchangeable or exercisable for such securities during the seven-day
period prior to and during the 90-day period beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration in which
Registrable Securities are included (except as part of that underwritten
registration)(referred to herein as the “holdback period”), unless the underwriters managing
the registered public offering otherwise agree or request a different holdback period, which
holdback period shall in no event exceed 180 days.

     (b) The Company agrees (i) not to effect any public sale or distribution of any of its
equity securities or any securities convertible into or exchangeable or exercisable for any
of its equity securities during the seven-day period prior to and during the 90-day period
beginning on the effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of that underwritten registration or pursuant to
registrations on Form S-8 or any successor form), unless the underwriters managing the
registered public offering otherwise agree or request a different holdback period, which
holdback period shall in no event exceed 180 days, and (ii) to use its reasonable commercial
efforts to cause each director and officer of the Company and each other holder of 10% or
more of its outstanding equity securities (or any securities convertible into or
exchangeable or exercisable for its equity securities) purchased from the Company at any
time after the date of this Agreement (other than in a registered public offering) to agree
not to effect any public sale or distribution (including sales pursuant to Rule 144) of any
such securities during such periods (except as part of that

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underwritten registration, if otherwise permitted), unless the underwriters managing
the registered public offering otherwise agree.

     1.4. Registration Procedures. Whenever the Shareholder has requested that any
Registrable Securities be registered pursuant to this Agreement, the Company will use its
reasonable commercial efforts to effect the registration and the sale of those Registrable
Securities in accordance with the intended method of disposition thereof, and pursuant
thereto the Company will as expeditiously as possible:

     (a) Furnish to the Shareholder such copies of each preliminary and final prospectus and
such other documents as the Shareholder may reasonably request to facilitate the public
offering of its Registrable Securities;

     (b) Use its best efforts to register or qualify the Registrable Securities covered by
said registration statement under the applicable securities or “blue sky” laws of such
jurisdictions as any selling holder may reasonably request; provided, however, that the
Company shall not be obligated to qualify to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it to the service of process in
suits other than those arising out of the offer or sale of the securities covered by the
registration statement in any jurisdiction where it is not then so subject;

     (c) Furnish to the Shareholder a copy of:

     (i) an opinion of counsel for the Company, dated the effective date of the
registration statement, in customary form and covering matters of the type
customarily covered by legal opinions obtained by the underwriters in an
underwritten registration, as the Shareholder may reasonably request, and

     (ii) a “comfort” letter signed by the Company’s independent registered public
accounting firm who have examined and reported on the Company’s financial
statements included in the registration statement, to the extent permitted by the
standards of the American Institute of Certified Public Accountants, covering
substantially the same matters with respect to the registration statement (and the
prospectus included therein) and (in the case of the accountants’ “comfort” letters)
with respect to events subsequent to the date of the financial statements, as are
customarily covered in opinions of issuer’s counsel and in accountants’ “comfort”
letters delivered to the underwriters in underwritten public offerings of
securities, to the extent that the Company is required to deliver or cause the
delivery of such opinion or “comfort” letters to the underwriters in an underwritten
public offering of securities;

     (d) Upon three (3) days’ prior written notice and at reasonable times during normal
business hours and without undue interruption of the Company’s business or operations,
permit the Shareholder or its counsel or other representatives to inspect and copy such
corporate documents and records as may reasonably be requested by them;

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     (e) Furnish to the Shareholder a copy of all documents filed and all correspondence
from or to the Securities and Exchange Commission in connection with any such offering of
securities;

     (f) Use its best efforts to ensure the obtaining of all necessary approvals from the
National Association of Securities Dealers, Inc., if such approvals are required;

     (g) Cause all Registrable Securities covered by the registration statement to be listed
on each securities exchange on which similar securities issued by the Company are then
listed; and

     (h) Otherwise use its best efforts to comply with all applicable rules and regulations
of the Securities and Exchange Commission.

     1.5. Registration Expenses.

     (a) The Company will bear, as provided herein, all expenses incident to the Company’s
performance of or compliance with this Agreement, including without limitation all
registration and filing fees, fees and expenses of compliance with state securities or blue
sky laws, printing expenses, messenger and delivery expenses, and fees and disbursements of
counsel for the Company and all independent registered public accounting firm, underwriters
(excluding underwriting discounts and commissions) and other Persons retained by the Company
(all such expenses being herein called “Registration Expenses”). Registration Expenses will
also include the Company’s internal expenses (including without limitation all salaries and
expenses of its officers and employees performing legal or accounting duties), the expenses
of any annual audits or quarterly reviews, the expenses of any liability insurance and the
expenses and fees for the listing of the securities to be registered on each required
securities exchange.

     (b) The Company will reimburse the Shareholder for the reasonable fees and
disbursements of one law firm chosen by the Shareholder, such law firm to be reasonably
satisfactory to the Company.

     (c) The Registration Expenses will not include, and the Shareholder will pay, any
underwriting discounts and commissions incurred upon the sale of such securities.

     1.6. Indemnification and Contribution.

     (a) The Company agrees to indemnify the Shareholder, its officers and directors and
each Person who controls the Shareholder (within the meaning of the Securities Act) against
all losses, claims, damages, liabilities and expenses resulting from any untrue or alleged
untrue statement of material fact contained in any registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same result from any information
furnished in writing to the Company by or on behalf of the

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Shareholder expressly for use therein or by the Shareholder’s failure to deliver a copy
of the registration statement or prospectus or any amendments or supplements thereto after
the Company has been requested to furnish that holder with copies of the same. In
connection with an underwritten offering, the Company will indemnify the underwriters, their
officers and directors and each Person who controls the underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the indemnification
of the Shareholder.

     (b) In connection with any registration statement in which the Shareholder is
participating, the Shareholder will furnish to the Company in writing any information
regarding the Shareholder and its intended method of distribution as the Company reasonably
requests for use in connection with any registration statement or prospectus and will
indemnify the Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against all losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that the same result from any information so furnished in
writing by or on behalf of the Shareholder; provided that the obligation to indemnify will
be limited to the net amount of proceeds (before deducting expenses, if any) received by the
Shareholder from the sale of Registrable Securities pursuant to the registration statement.

     (c) Any Person entitled to indemnification hereunder will (i) give prompt written
notice to the indemnifying party of any claim with respect to which it seeks indemnification
and (ii) unless in the indemnified party’s reasonable judgment a conflict of interest
between the indemnified and indemnifying parties may exist with respect to any claim, permit
the indemnifying party to assume the defense of the claim with counsel reasonably
satisfactory to the indemnified party. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by the indemnifying party with
respect to that claim, unless in the reasonable judgment of any indemnified party a conflict
of interest may exist between the indemnified party and any other of the indemnified parties
with respect to the claim. In any event, the indemnifying party will not be subject to any
liability for any settlement made by the indemnified party without his or its consent, which
consent will not be unreasonably withheld.

     (d) If the indemnification provided for under this Section 1.6 is unavailable (other
than by reason of the application of the provisions of this Agreement) to an indemnified
party in respect of any losses, claims, damages, liabilities or expenses referred to herein,
then each indemnifying party thereunder will contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities or expenses
in such proportion as is appropriate to reflect the relative fault of the Company and the
Shareholder in connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other

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relevant equitable considerations. The relative fault of the Company and the
Shareholder will be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Shareholder and the
parties’ relative intent and knowledge.

     (e) The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 1.6 were determined by pro rata allocation or by any other method
of allocation that does not take account of the equitable considerations referred to in
Section 1.6(d). Notwithstanding anything herein to the contrary, the Shareholder will not
be required to contribute any amount in excess of the amount by which the net amount of
proceeds (before deducting expenses, if any) received by the Shareholder from the sale of
Registrable Securities pursuant to the registration statement exceeds the amount of any
damages that the Shareholder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.

     (f) The indemnification and contribution provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of the
indemnified party or any officer, director or controlling Person of the indemnified party
and will survive any transfer of securities.

     1.7. Current Public Information. At all times after the Company has filed a
registration statement with the Securities and Exchange Commission which has been declared
effective pursuant to the requirements of either the Securities Act or the Securities
Exchange Act, the Company will file all reports required to be filed by it under the
Securities Act and the Securities Exchange Act and the rules and regulations adopted by the
Securities and Exchange Commission thereunder and will take such further action as the
Shareholder may reasonably request, all to the extent required to enable the Shareholder to
sell Registrable Securities pursuant to (a) Rule 144 adopted by the Securities and Exchange
Commission under the Securities Act (as such rule may be amended from time to time) or any
similar rule or regulation hereafter adopted by the Securities and Exchange Commission or
(b) Short-Form Registrations. Upon request, the Company will give to the Shareholder a
written statement as to whether it has complied with such requirements.

2. Appointment and Non-Removal of Directors.

          (a) The Shareholder agrees that it will use its best efforts to take all action necessary to
support the initial election of the directors of the Company to staggered terms (the
“classified board”) as described in the Company’s preliminary prospectus filed with the
Securities and Exchange Commission (the “Preliminary Prospectus”) within the periods
described in the Preliminary Prospectus.

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          (b) The Shareholder further agrees that until it elects to end its support of the election of
directors to a classified board, the Shareholder will not, and will cause each of its subsidiaries
to not, vote to remove without cause any director elected to serve a term on a classified board;
provided however that the Shareholder may at any time without cause vote to remove, or vote
to cause the removal of, any director who was not elected to a staggered term on a classified
board.

          (c) For the avoidance of doubt, the Shareholder agrees that the purpose of this Section 2 is
to provide a director serving a staggered term on the classified board with the same tenure rights
as a director elected to serve on a classified board of a corporation incorporated under the laws
of the State of Delaware, notwithstanding the fact that the laws of the jurisdiction of
incorporation of the Company may be different.

3. Pension Plan Payment.

          The Shareholder agrees with the Company that it will use or cause to be used a portion of the
proceeds it obtains from the sale of shares in the IPO to make the following payments to the
trustees of the Biwater Retirement and Security Scheme as described in the Preliminary Prospectus:

          (i) a GBP 10 million fixed payment, and

          (ii) a variable payment equal to 50% of the amount by which the total proceeds of the IPO, net
of underwriting discounts and commissions and other expenses of the IPO, exceed $120 million, up to
the value of the plan-specific deficit as calculated by the plan actuary at the time of the IPO,
which was estimated to be £55.6 million as of March 31, 2007.

4. Definitions.

     (a) “Common Shares” means common shares of the Company’s Common Stock, par
value EUR 0.50 per share.

     (b) “DR Reference Date” means such date that is one hundred eighty (180) days
after the consummation of the Company’s IPO.

     (c) “Person” means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency, or
political subdivision thereof

     (d) “Registrable Securities” means (i) any outstanding Common Shares held by
the Shareholder or its successors and assigns and (ii) any Common Shares issued or issuable
with respect to the securities referred to in clause (i) by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. As to any particular Registrable Securities, those

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securities will cease to be Registrable Securities when they have been distributed to
the public pursuant to an offering registered under the Securities Act or sold to the public
through a broker, dealer or market maker in compliance with Rule 144 under the Securities
Act (or any similar rule then in force). For purposes of this Agreement, the Shareholder
will be deemed to be a holder of Registrable Securities whenever that Person has the right
to acquire, directly or indirectly, those Registrable Securities (upon conversion or
exercise), disregarding any restrictions or limitations upon such conversion or exercise and
regardless of whether or not the acquisition has actually been effected.

     (e) “Securities Act” means the Securities Act of 1933, as amended.

     (f) “Securities Exchange Act” means the Securities Exchange Act of 1934, as
amended.

5. Miscellaneous.

     (a) No Inconsistent Agreements. The Company will not hereafter enter into any
agreement with respect to its securities which is inconsistent with or violates the rights
granted to the Shareholder in this Agreement unless the Shareholder shall have consented to
such agreement, which consent shall not be unreasonably withheld or delayed.

     (b) Remedies. Any Person having rights under any provision of this Agreement
will be entitled to enforce those rights specifically to recover damages caused by reason of
any breach of any provision of this Agreement and to exercise all other rights granted by
law. The parties hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive relief in
order to enforce or prevent violation of the provisions of this Agreement.

     (c) Amendment or Waiver. The provisions of this Agreement may be amended or
waived only with both the written approval of the Company and the Shareholder.

     (d) Successors and Assigns. All covenants and agreements in this Agreement by
or on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto, whether so expressed or not. In
addition, whether or not any express assignment has been made, the provisions of this
Agreement which are for the benefit of the Shareholder are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities, including a Person who
acquires the Registrable Securities through the exercise of its right as a pledgee of such
Registrable Securities whether the pledge was entered into before or after the date of this
Agreement. No other Person shall acquire or have any rights under or by virtue of this
Agreement.

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     (e) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under applicable law,
that provision will be ineffective only to the extent of the prohibition or invalidity,
without invalidating the remainder of this Agreement.

     (f) Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, any one of which need not contain the signatures of more than one party, but
all counterparts taken together will constitute one and the same agreement.

     (g) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

     (h) Governing Law. This Agreement will be governed by the laws of the State of
New York (regardless of the laws that might otherwise govern under applicable principles of
conflicts of law) as to all matters.

     (i) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in writing and
shall be deemed to have been given when delivered personally to the recipient, sent to the
recipient by reputable express courier service (charges prepaid) or mailed to the recipient
by certified or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications will be sent to the Company and the Shareholder at
the addresses indicated below:

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If to the Company, to:

Cascal B.V.

Biwater House

Station Approach

Dorking

Surrey RH4 1TZ

United Kingdom

Attention: Chief Executive Officer

With a copy to:

Alan N. Waxman, Esq.

Squire, Sanders & Dempsey LLP

350 Park Avenue

New York, New York 10022-6022

Telephone: (212) 872-9831

Fax: (212) 872-9815

If to the Shareholder, to:

Biwater Investments Limited

Station Approach

Dorking

Surrey RH4 1TZ

United Kingdom

Attention: Company Secretary

or to such other address or to the attention of such other Person as the recipient has
specified by prior written notice to the sender.

     Except as otherwise provided in this Agreement, each notice shall be effective and
shall be deemed delivered on the earlier of (i) its actual receipt, if delivered personally,
by courier service, or by fax (on the condition that the sending party has confirmation of
transmission receipt of the notice), or (ii) on the third (3rd) day after the
notice is postmarked for mailing by first class, postage prepaid, certified, or registered,
United States mail, with return receipt requested (whether or not the return receipt is
subsequently received by the sender).

     (j) If the closing of the IPO does not occur on or before February 28, 2008, then this
Agreement shall automatically terminate on that date.

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[The remainder of this page has been left blank intentionally.]

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     IN WITNESS WHEREOF, the parties have executed, or have caused their duly authorized
representatives to execute, this Agreement as of the date first written above.

Company:

Cascal B.V.

	 	 	 	 	 
	By:

	 	/s/ Stephane Richer
 

	 	 

Shareholder:

Biwater Investments Limited

	 	 	 	 	 
	By:

	 	/s/ Philip Wainwright
 

	 	 

14EX-10.8

 

Exhibit 10.8

NON-COMPETE, CONFIDENTIALITY AND

DIRECTOR NON-REMOVAL AGREEMENT

DATED AS OF JANUARY 3, 2008

 

 

NON-COMPETE, CONFIDENTIALITY AND

DIRECTOR NON-REMOVAL AGREEMENT

     THIS NON-COMPETE, CONFIDENTIALITY AND DIRECTOR NON-REMOVAL AGREEMENT (as the same may be
amended, modified or supplemented in accordance with its terms, this “Agreement”) is made
as of January 3, 2008 by and between Cascal B.V.1, a Dutch private limited liability
company (“Cascal”) and Biwater Plc, a company organized under the laws of the United
Kingdom (the “Parent”).

     Following the series of stock split and recapitalization transactions that will effectively
result in a 2,067-for-1 split of Cascal’s shares, the Parent will indirectly own 21,849,343 common
shares, par value EUR 0.50 per share, of Cascal. This Agreement is being entered into in order to
state affirmatively the agreement of Parent to refer certain business opportunities to Cascal in
accordance with the terms hereof after consummation of the planned initial public offering of
Cascal (the “IPO”), in which a subsidiary of the Parent expects to sell for its own account
a portion of the shares to be sold in the IPO.

     NOW, THEREFORE, in consideration of the mutual premises herein and other good and valuable
consideration, the receipt and sufficiency of which the parties acknowledge, the parties hereby
agree as follows:

1. Non-Compete Agreement.

          (a) The Parent agrees with Cascal that the Parent will refer, and will cause each of its
subsidiaries to refer, to Cascal all future long-term water and wastewater project opportunities
for Cascal’s consideration before the Parent or any of its subsidiaries considers the project for
its own portfolio. In connection with such referral, Cascal will, and where appropriate Cascal
shall cause the Cascal Group Member to, (i) acknowledge to and agree with Biwater that it will
abide by any confidentiality obligations to which Biwater is subject and (ii) will retain as
confidential any other information provided to Cascal by Biwater.

          (b) The Parent agrees with Cascal that it will take all reasonable measures to cause its
direct and indirect subsidiaries and entities in which it has made any joint venture investments
(in which it has a greater than 50% interest) other than Cascal, Cascal’s subsidiaries or Cascal’s
joint venture investments (collectively along with Parent, “Biwater”) to refer to Cascal
all future long-term water and wastewater project opportunities for Cascal’s consideration before
Biwater considers the project for its own portfolio. If Cascal or any of its subsidiaries or joint
venture investments (in which it has a greater than 50% interest) (collectively along with Cascal,
referred to in this clause as “Cascal Group Member”) promptly elects to pursue the
opportunity and continues in good faith to pursue the opportunity, Biwater will not be permitted to
pursue the opportunity. Having elected to do so, if the Cascal Group Member subsequently determines
that it does not wish to continue to pursue such an opportunity, Cascal will, or will cause the
Cascal Group Member to, (i) immediately inform Biwater and (ii) offer to transfer the

 

			
	1	 	Cascal B.V. will be converted to a Dutch public limited
liability company and renamed Cascal N.V prior to the completion of its initial
public offering.

-1-

 

opportunity to Biwater for development. Cascal agrees that time is of the essence in
considering whether to elect to undertake a project. Cascal and Biwater acknowledge the benefit of
regular dialogue through monthly business development meetings.

          (c) The agreement in this Section 1 will terminate upon the earlier of:

     (i) three years after the closing of the IPO; or

     (ii) Biwater owning less than 15% of Cascal’s outstanding common shares.

          (d) For the avoidance of doubt, this Section 1 will not restrict Biwater’s design,
engineering, constructing or consulting businesses (including the
Farrer business) and excludes all projects which have been
previously notified to Cascal.

          (e) Upon termination of this Agreement, Biwater may elect to compete against Cascal for all
future long-term water and wastewater project opportunities.

2. Additional Obligations of Parent.

          (a) The Parent shall use its best efforts to cause its subsidiary, Biwater Investments
Limited, to satisfy its obligations under Sections 2 and 3 of the Agreement Relating to
Registration Rights and Other Matters, dated as of January 1, 2008, between Biwater Investments
Limited and Cascal.

          (b) The Parent acknowledges that Biwater and/or its Representatives (hereinafter defined) have
been furnished and may in the future be furnished certain information which is non-public,
confidential or proprietary in nature, including material non-public information within the meaning
of the U.S. federal securities laws. Such information (whether provided orally or in written,
electronic, recorded or other form) furnished or disclosed to Biwater and/or its employees,
representatives (including, without limitation, financial advisors, attorneys and accountants) or
agents (collectively, “Representatives”), together with analyses, compilations, studies or
other documents or materials prepared by Biwater or Biwater’s Representatives which contain or
otherwise reflect such information, is hereinafter referred to as the “Confidential Information.”
For the avoidance of doubt, “Confidential Information” shall include all information provided by
Cascal to the Parent that is reasonably requested by the Parent, which Cascal hereby agrees to
provide in a timely manner, as necessary in order for the Parent and its officers (i) to comply
with U.K. law (including U.K. corporate and tax law), (ii) to enable the Parent and its officers to
operate the Parent’s business efficiently (including government statistics, pension information and
tax calculations and computations), and (iii) monthly, semi-annual and annual financial reports
under the accounting principles currently used by the Parent in its financial statements.

In consideration of the furnishing to Biwater of the Confidential Information, the Parent agrees as
follows:

     (i) The Parent hereby acknowledges the confidential and proprietary nature of the
Confidential Information, and agrees that the Confidential Information will be kept

-2-

 

confidential by Biwater and Biwater’s Representatives and shall not, without the prior
written consent of Cascal, be disclosed by Biwater or Biwater’s Representatives, in any
manner whatsoever, in whole or in part. The Parent agrees that Biwater shall reveal
Confidential Information only to those of Biwater’s Representatives who need to know the
Confidential Information for lawful and legitimate business purposes, who are informed by
Biwater of the confidential nature of the Confidential Information and who shall be bound by
the terms and conditions of this confidentiality agreement (without the need for any
additional joinder or signature page hereto).

     (ii) The Parent agrees to be responsible for any breach of this confidentiality
agreement by Biwater or Biwater’s Representatives, including those whose relationship with
Biwater terminates after the date hereof.

     (iii) The undertakings set forth herein shall not apply to any portion of the
Confidential Information which (i) at the time of disclosure or thereafter is or becomes
generally available to the public through no fault or action by Biwater or by Biwater’s
Representatives, (ii) is or becomes available to Biwater on a nonconfidential basis from a
source other than Cascal, its subsidiaries and/or its joint ventures (the “Cascal
Group”) or any of its representatives, which source, to Biwater’s knowledge or to the
knowledge of Biwater’s Representatives after reasonable inquiry, is not prohibited from
disclosing such portions to Biwater by a contractual, legal or fiduciary obligation, (iii)
was within Biwater’s possession prior to its being furnished to Biwater by or on behalf of
the Cascal Group, provided that the source of such information was not, to Biwater’s
knowledge or to the knowledge of Biwater’s Representatives after reasonable inquiry, (A)
bound by a confidentiality agreement with the Cascal Group, or (B) subject to any duty,
contractual or otherwise, prohibiting transmission of information to Biwater, or (iv) was
independently developed or acquired by Biwater without violating any of Biwater’s
obligations under this confidentiality agreement.

     (iv) The Parent hereby acknowledges that nothing in this confidentiality agreement
shall give Biwater any right, title, license or interest whatsoever in or to the
Confidential Information or to any existing or future intellectual property of the Cascal
Group.

     (v) In the event that Biwater or any of Biwater’s Representatives receives notification
of a legal requirement to disclose, or becomes legally compelled to disclose, any of the
Confidential Information, the Parent will provide Cascal with prompt prior written notice,
to the extent permitted by law, so that the Cascal Group may, at its sole expense, seek a
protective order or other appropriate remedy. In the event that such protective order or
other remedy is not obtained, or that Cascal waives compliance with the provisions of this
confidentiality agreement, Biwater or Biwater’s Representatives, as the case may be, agree
to furnish only that portion of the Confidential Information which the Parent’s legal
counsel advises, in an opinion delivered to the Cascal Group, be disclosed and Biwater will
use best efforts in cooperation with Cascal to obtain reasonably satisfactory assurances
that the confidentiality of the Confidential Information will be maintained following its
required disclosure.

-3-

 

     (vi) It is further understood and agreed that no failure or delay by the Cascal Group
in exercising any right, power or privilege under this Section 2 will 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 right, power or privilege hereunder.

3. Miscellaneous.

     (a) No Inconsistent Agreements. The Parent will not, and will not permit any of
its subsidiaries to, hereafter enter into any agreement with respect to its potential
portfolio of projects which is inconsistent with or violates the rights granted to Cascal in
this Agreement unless Cascal shall have consented to such agreement, which consent shall not
be unreasonably withheld or delayed.

     (b) Remedies. Any party having rights under any provision of this Agreement
will be entitled to enforce those rights specifically to recover damages caused by reason of
any breach of any provision of this Agreement and to exercise all other rights granted by
law. The parties hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive relief in
order to enforce or prevent violation of the provisions of this Agreement. In the event of
any legal proceedings to enforce any provision of this Agreement, if a court of competent
jurisdiction in a final, non-appealable order determines that Biwater or Biwater’s
Representatives have breached this agreement, then the Cascal Group shall be entitled to
recover its costs incurred to enforce this agreement, including, without limitation,
attorneys’ fees and expenses to the extent that a court of competent jurisdiction awards the
same to the Cascal Group in a final non-appealable order.

     (c) Amendment or Waiver. The provisions of this Agreement may be amended or
waived only with both the written approval of Cascal and the Parent.

     (d) Successors and Assigns. All covenants and agreements in this Agreement by
or on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto, and the Cascal Group, whether so
expressed or not.

     (e) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under applicable law,
that provision will be ineffective only to the extent of the prohibition or invalidity,
without invalidating the remainder of this Agreement.

-4-

 

     (f) Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, any one of which need not contain the signatures of more than one party, but
all counterparts taken together will constitute one and the same agreement.

     (g) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

     (h) Governing Law. This Agreement will be governed by the laws and jurisdiction
of England (regardless of the laws that might otherwise govern under applicable principles
of conflicts of law) as to all matters.

     (i) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in writing and
shall be deemed to have been given when delivered personally to the recipient, sent to the
recipient by reputable express courier service (charges prepaid) or mailed to the recipient
by certified or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications will be sent to Cascal and the Parent at the
addresses indicated below:

If to Cascal, to:

Cascal B.V.

Biwater House

Station Approach

Dorking

Surrey RH4 1TZ

United Kingdom

Attention: Chief Executive Officer

With a copy to:

Alan N. Waxman, Esq.

Squire, Sanders & Dempsey LLP

350 Park Avenue

New York, New York 10022-6022

Telephone: (212) 872-9831

Fax: (212) 872-9815

-5-

 

If to the Parent, to:

Biwater Plc

Station Approach

Dorking

Surrey RH4 1TZ

United Kingdom

Attention: Company Secretary

or to such other address or to the attention of such other person as the recipient has
specified by prior written notice to the sender.

     Except as otherwise provided in this Agreement, each notice shall be effective and
shall be deemed delivered on the earlier of (i) its actual receipt, if delivered personally,
by courier service, or by fax (on the condition that the sending party has confirmation of
transmission receipt of the notice), or (ii) on the third (3rd) day after the
notice is postmarked for mailing by first class, postage prepaid, certified, or registered
mail, with return receipt requested (whether or not the return receipt is subsequently
received by the sender).

     (j) If the closing of the IPO does not occur on or before February 28, 2008, then this
Agreement shall automatically terminate on that date.

[The remainder of this page has been left blank intentionally.]

-6-

 

     IN WITNESS WHEREOF, the parties have executed, or have caused their duly authorized
representatives to execute, this Agreement as of the date first written above.

	 	 	 	 	 
	 	Cascal B.V.

 	 
	 	By:  	/s/  Stephane
Richer	 
	 	 	 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Biwater Plc

 	 
	 	By:  	/s/ Martin
Duffy	 
	 	 	 	 
	 	 	 	 
	 

-7-

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