Document:

STILWELL FINANCIAL INC.

                        Officers' Certificate Pursuant to
            Section 201, Section 203 and Section 301 of the Indenture
                      Establishing Terms and Provisions of
                 7.875% Public Income NotES (PINES(R)) due 2032

                                  April 5, 2002
                      ------------------------------------

     1. Each of the undersigned, Danny R. Carpenter, being the duly appointed
Executive Vice President of Stilwell Financial Inc., a Delaware corporation (the
"Company"), and Daniel P. Connealy, being the duly appointed Vice President and
Chief Financial Officer of the Company, does hereby certify pursuant to the
authority delegated to the undersigned pursuant to resolutions adopted on March
19, 2002 by the Board of Directors of the Company (the "Board") (a copy of such
resolutions which is attached hereto as Exhibit I), that, pursuant to Section
301 of the Indenture, dated as of November 6, 2001 (the "Indenture"), between
the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan
Bank), a New York banking corporation, as trustee (the "Trustee"), a series of
senior debt securities of the Company is hereby established with the terms and
provisions set forth below. Unless otherwise defined herein, capitalized terms
used herein have the meanings given thereto in the Indenture.

     (1) The title of such series of debt securities is the "7.875% Public
     Income NotES (PINES(R)) due 2032" (the "Notes").

     (2) The aggregate principal amount of Notes that may be authenticated and
     delivered under the Indenture is unlimited. The Notes need not all be
     issued at the same time and such series of Notes may be reopened, without
     the consent of the Holders, for issuances of additional Notes of such
     series.

     (3) The Stated Maturity of the Notes is April 15, 2032.

     (4) The Notes shall bear interest at the rate of 7.875% per annum from
     April 5, 2002, or from the most recent Interest Payment Date to which
     interest has been paid or duly provided for, payable quarterly on January
     31, April 30, July 31 and October 31 of each year (each, an "Interest
     Payment Date"), commencing July 31, 2002, to the Persons in whose names the
     Notes are registered at the close of business on the Regular Record Date
     for such interest, which shall be the Business Day, immediately preceding
     such Interest Payment Date. Interest on the Notes shall be calculated on
     the basis of a 360-day year of twelve 30-day months. The amount of interest
     payable for any period shorter than a full quarterly interest period will
     be computed on the basis of the actual number of days elapsed in a 90-day
     quarter of three 30-day months.

     (5) The Company hereby designates as Places of Payment for the Notes the
     office or agency of the Company in the Borough of Manhattan, The City of
     New York, and initially appoints the Trustee at its Corporate Trust Office
     as Paying Agent in such city and as its agent to receive all such
     presentations, surrenders, notices and demands.

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     (6) The Notes are not redeemable prior to April 5, 2007. On and after April
     5, 2007, the Company may, at its option, redeem the Notes, in whole at any
     time or in part from time to time, on any date prior to the Stated Maturity
     of the Notes, and otherwise in accordance with Article Eleven of the
     Indenture. The Redemption Price payable upon redemption of the Notes shall
     be an amount equal to the principal amount of the Notes and payments of the
     Redemption Price shall be made in Dollars. The Company shall also pay
     accrued and unpaid interest, if any, on the Notes, in Dollars, to but
     excluding the Redemption Date set forth in the notice of redemption given
     by the Company pursuant to Article Eleven of the Indenture.

     (7) The Company shall have no obligation to redeem, repay or purchase the
     Notes pursuant to any sinking fund or analogous provision or at the option
     of a Holder thereof.

     (8) The Notes are issuable in denominations of $25 and any integral
     multiples of $25.

     (9) The Trustee, at its Corporate Trust Office, is hereby initially
     appointed Security Registrar and Paying Agent for the Notes.

     (10) The aggregate principal amount of the Notes then Outstanding shall be
     payable upon declaration of acceleration of the Maturity thereof pursuant
     to Section 502 under the Indenture.

     (11) Payment of principal of and interest on the Notes will be made in
     Dollars.

     (12) NOT APPLICABLE.

     (13) Holders of the Notes shall not have the option to receive payments of
     principal of or interest on the Notes in Currencies other than the Dollar.

     (14) Other than as set forth in this Officers' Certificate, there are no
     other provisions granting special rights to the Holders of the Notes.

     (15) The Events of Default set forth in Section 501 of the Indenture (other
     than the Event of Default set forth in Section 501(3) of the Indenture,
     which shall not be applicable to the Notes) and the covenants set forth in
     Article Ten of the Indenture will apply to the Notes. In addition, solely
     with respect to the Notes (and not with respect to any other series of
     Securities that may be issued under the Indenture), the following covenant
     shall be added to, and shall be deemed a part of, Article Ten of the
     Indenture:

          "SECTION 1007. Limitation on Liens. The Company will not, and it will
          not cause or permit any of its subsidiaries to, create, assume, incur
          or guarantee any indebtedness for money borrowed that is secured by a
          pledge, mortgage, deed of trust or other lien on any voting stock or
          profit participating equity interests of Janus Capital Corporation
          ("Janus") or any entity that succeeds (whether by merger,
          consolidation, sale of assets or otherwise) to all or any substantial
          part of the business of Janus, without providing that the Notes
          (together with, if the Company shall so determine, any other
          indebtedness of, or guarantee by, the Company ranking equally with the
          Notes and existing as of the date hereof or

                                       2

<PAGE>

          hereafter created) will be secured equally and ratably with or prior
          to all other indebtedness secured by such pledge, mortgage, deed of
          trust or other lien on the voting stock or profit participating equity
          interests of Janus; provided that this Section 1007 shall not limit
          the Company's ability or the ability of the Company's subsidiaries to
          incur indebtedness or other obligations secured by liens on assets
          other than the shares of common stock of Janus."

     (16) The Notes shall be issued as one or more Registered Securities in
     permanent global form without coupons. The Company initially appoints The
     Depository Trust Company, New York, New York ("DTC"), to act as the
     depositary with respect to the Notes.

     (17) NOT APPLICABLE.

     (18) Interest on the Notes that is payable on any Interest Payment Date
     shall be paid to the Person in whose name the Note is registered at the
     close of business on the Regular Record Date for such interest, which shall
     be the Business Day immediately preceding such Interest Payment Date.

     (19) Section 1402 (Defeasance and Discharge) and Section 1403 (Covenant
     Defeasance) shall apply to the Notes, in accordance with the provisions,
     terms and conditions set forth in Article Fourteen.

     (20) NOT APPLICABLE.

     (21) The Notes do not provide for the payment of any Additional Amounts.

     (22) NOT APPLICABLE.

     (23) NOT APPLICABLE.

     (24) With respect to any action or consent to be taken pursuant to the
     terms of the Indenture, Holders of the Notes shall vote as one class with
     Holders of Securities of all other series issued or to be issued under the
     Indenture.

     2. The Notes will be evidenced by a Security in global form in
substantially the form attached hereto as Exhibit II, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by the Indenture and may have imprinted or otherwise reproduced
thereon such legend or legends or endorsements, not inconsistent with the
provisions of the Indenture, as may be required to comply with any law or with
any rules or regulations pursuant thereto, or with any rules of any securities
exchange or to conform to general usage, all as may be determined by the Officer
executing such global Security on behalf of the Company, as evidenced by the
execution of such global Security by such Officer. In the event that
certificated Notes (the "Certificated Notes") are issued in exchange for the
global Security, the form of certificate evidencing each Certificated Note shall
be in substantially the form of the attached global Security, with such changes
as are necessary to evidence the Notes in definitive form rather than as a
global Security.

                                       3

<PAGE>

     IN WITNESS WHEREOF, I have executed this certificate this 5th day of April,
2002.

                             /s/  Danny R. Carpenter
                            ---------------------------------------------------
                            Name:    Danny R. Carpenter
                            Title:   Executive Vice President

                             /s/  Daniel P. Connealy
                            ---------------------------------------------------
                            Name:    Daniel P. Connealy
                            Title:   Vice President and Chief Financial Officer

                                       4

<PAGE>

                                                                      EXHIBIT I

                        MARCH 19, 2002 BOARD RESOLUTIONS

                                       5

<PAGE>

                                                                     EXHIBIT II

                               FORM OF GLOBAL NOTE

                                       6

<PAGE>

CUSIP NO.: 860831304
No. 1

                 7.875% Public Income NotES (PINES(R)) due 2032
                                  $158,125,000

                             STILWELL FINANCIAL INC.

UNLESS AND UNTIL THIS CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE REGISTERED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR OF THE DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL, BECAUSE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

     Stilwell Financial Inc., a Delaware corporation (herein referred to as the
"Company", which term includes any successor corporation under the Indenture
hereinafter defined), for value received, hereby promises to pay to Cede & Co.,
or registered assigns, the principal sum of $158,125,000 on April 15, 2032 (the
"Maturity Date") and to pay interest thereon from April 5, 2002, or from the
most recent Interest Payment Date (hereinafter defined) to which interest has
been paid or duly provided for, quarterly on January 31, April 30, July 31 and
October 31 of each year (each, an "Interest Payment Date"), commencing July 31,
2002, at 7.875% per annum until the principal hereof is paid or duly provided
for.

     Any payment of principal or interest required to be made on a day that is
not a Business Day need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on such day
and no interest shall accrue as a result of such delayed payment. Interest
payable on each Interest Payment Date will include interest accrued from and
including April 5, 2002, or from and including the most recent Interest Payment
Date to which interest has been paid or duly provided for, as the case may be,
to but excluding such Interest Payment Date.

     The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
(the "Holder") in whose name this Note (or one or more predecessor Securities)
is registered at the close of business on

                                       i

<PAGE>

the Business Day immediately preceding such Interest Payment Date (each, a
"Regular Record Date"). Interest on the Notes shall be calculated on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly interest period will be computed on the
basis of the actual number of days elapsed in a 90-day quarter of three 30-day
months. Any such interest not so punctually paid or duly provided for
("Defaulted Interest") will forthwith cease to be payable to the Holder on such
Regular Record Date and may either (1) be paid to the Person in whose name this
Note is registered at the close of business on a special record date (the
"Special Record Date") for the payment of such Defaulted Interest to be fixed by
the Trustee (referred to herein), notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been given to the
Holder of this Note not less than ten days prior to such Special Record Date, or
(2) be paid at any time in any other lawful manner, all as more fully provided
in the Indenture.

     For purposes of this Note, "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday that is not a day on which banking institutions
in the city of New York, New York are authorized or obligated by law or
executive order to close

     Payment of the principal of this Note on the Maturity Date will be made
against presentation of this Note at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, the City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts. So long as
this Note remains in book-entry form, all payments of principal and interest
will be made by the Company in immediately available funds.

     General. This Note is one of a duly authorized issue of securities (herein
called the "Securities") of the Company, issued under an Indenture, dated as of
November 6, 2001 (the "Indenture"), between the Company and JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank), a New York banking corporation, as
trustee (herein called the "Trustee," which term includes any successor trustee
under the Indenture with respect to a series of which this Note is a part).
Reference is made to the Indenture and all indentures supplemental thereto for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Note is one of a duly authorized series of Securities designated
as "7.875% Public Income NotES (PINES(R)) due 2032" (collectively, the "Notes").

     Optional Redemption. The Notes are not redeemable prior to April 5, 2007.
On and after April 5, 2007, the Company may, at its option, redeem the Notes, in
whole at any time or in part from time to time, on any date prior to the
Maturity Date, and otherwise in accordance with Article Eleven of the Indenture.
The Redemption Price payable upon redemption of the Notes shall be an amount
equal to the principal amount of the Notes and payments of the Redemption Price
shall be made in Dollars. The Company shall also pay accrued and unpaid
interest, if any, on the Notes, in Dollars, to but excluding the Redemption Date
set forth in the notice of redemption given by the Company pursuant to Article
Eleven of the Indenture.

                                       ii

<PAGE>

     Events of Default. If an Event of Default with respect to the Notes shall
have occurred and be continuing, the principal of the Notes may be declared due
and payable in the manner and with the effect provided in the Indenture.

     Modification and Waivers; Obligations of the Company Absolute. The
Indenture permits the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Notes, subject
to certain exceptions set forth in the Indenture. Such amendments may be
effected under the Indenture at any time with the consent of the Holders of not
less than a majority in principal amount of all Notes then Outstanding issued
under the Indenture and affected thereby, subject to certain exceptions set
forth in the Indenture. The Indenture also contains provisions permitting the
Holders of not less than a majority in principal amount of the Notes at the time
Outstanding, on behalf of the Holders of all Notes at such time Outstanding, to
waive compliance by the Company with certain provisions of the Indenture.
Furthermore, provisions in the Indenture permit the Holders of not less than a
majority in principal amount of the Notes then Outstanding to waive on behalf of
all of the Holders of such Notes certain past defaults under the Indenture and
their consequences. Any such consent or waiver shall be conclusive and binding
upon the Holder of this Note and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Note.

     No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.

     Defeasance and Covenant Defeasance. The Indenture contains provisions for
defeasance at any time of (a) the entire indebtedness of the Company on this
Note and (b) certain restrictive covenants and the related defaults and Events
of Default, upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.

     Authorized Denominations. The Notes are issuable only in registered form
without coupons in denominations of $25 or any integral multiple of $25.

     Registration of Transfer or Exchange. As provided in the Indenture and
subject to certain limitations herein and therein set forth, the transfer of
this Note is registrable in the Security Register upon presentation of this Note
for registration of transfer at the office or agency of the Company in any place
where the principal of and interest on this Note are payable, duly endorsed by
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

     As provided in the Indenture and subject to certain limitations herein and
therein set forth, the Notes are exchangeable for a like aggregate principal
amount of Notes of different authorized denominations, as requested by the
Holders surrendering the same.

                                      iii

<PAGE>

     This Note is a Global Security. If the depositary with respect to the Notes
(which shall initially be DTC) is at any time unwilling, unable or ineligible to
continue as depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue Notes in definitive registered
form without coupons, in any authorized denominations, of like tenor, in an
aggregate principal amount equal to the principal amount of the Registered
Securities in global form (the "Registered Global Note"), in exchange for such
Registered Global Note(s). In addition, the Company may at any time and in its
sole discretion determine that the Notes will no longer be represented by
Registered Global Notes and, in such event, will issue Notes in definitive
registered form, in such tenor, in any authorized denominations and in an
aggregate principal amount equal to the principal amount of the Registered
Global Notes representing such Notes, in exchange for such Registered Global
Notes. In any such instance, an owner of a beneficial interest in a Registered
Global Note will be entitled to physical delivery in definitive registered form
of Notes equal in principal amount to such beneficial interest and to have such
Notes registered in its name. Notes so issued in definitive registered form will
be issued in denominations of $25 or any amount in excess thereof which is an
integral multiple of $25 and will be issued in registered form only, without
coupons.

     No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.

     Defined Terms. Unless otherwise defined in this Note, all capitalized terms
used in this Note shall have the meanings assigned to them in the Indenture.

     Governing Law. This Note shall be governed by and construed in accordance
with the law of the State of New York, without regard to principles of conflicts
of laws.

     Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

                                   * * * * * *

                                       iv

<PAGE>

          IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed as of the date hereof.

Dated:   April 5, 2002                        STILWELL FINANCIAL INC.

                                              By:
                                                  -----------------------------
                                                  Name:
                                                  Title:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the
within-mentioned Indenture

JPMORGAN CHASE BANK,
    as Trustee

By: ________________________
      Authorized Officer

                                       v

<PAGE>

                                 ASSIGNMENT FORM

          To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to

-------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint -------------------------------------------------------
to transfer this Note on the books of Stilwell Financial Inc. The agent may
substitute another to act for him.

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Date:
      -----------------------

                                   Your Signature:

                                   --------------------------------------------
                                   (Sign exactly as your name appears on the
                                   face of this Note)

                                   Signature guarantee:

                                       vi<PAGE>

10.1 Form of Concession Contract ...............................................

<PAGE>
                                                                    EXHIBIT 10.1

COC No.     CONCESSION AGREEMENT FOR THE DEVELOPMENT OF THE PUBLIC WATER SUPPLY
            AND WASTEWATER REMOVAL SYSTEM MADE BETWEEN COMPANHIA DE SANEAMENTO
            DO PARANA, SANEPAR, AND THE CITY OF ________, STATE OF PARANA, AS
            GIVEN BELOW:

On this date, the party of the first part, the CITY OF ___________, represented
by its Mayor, ________, duly authorized by Law, and the party of the second
part, COMPANHIA DE SANEAMENTO DO PARANA - SANEPAR, represented herein by its
General Director, _______, and his Director of Operations, appear for the
purpose of signing this Concession Agreement, with the right of sole succession,
which will be governed by Federal Law No. 9074 of 07/07095 and by the following
Clauses and conditions:

CLAUSE ONE. SUBJECT

Companhia de Saneamento do Parana -- SANEPAR is awarded by the City of _______,
with the right of sole succession, the operation of the basic public sanitary
systems of water and wastewater removal, including the production of the water
to be supplied, distribution, operation, conservation, maintenance, collection
and the removal of wastewater.

SOLE PARAGRAPH. For the purposes of this Agreement, the following parties are
designated: (a) GRANTOR; the CITY OF _________; and the GRANTEE: COMPANHIA DE
SANEAMENTO DO PARANA - SANEPAR.

CLAUSE TWO. AREA OF OPERATION AND TERM

The GRANTEE will perform the services that are the subject of this Agreement
within the territorial area of the GRANTOR, and the term of the concession, by
succession of the City of _______, will be until _________.

CLAUSE THREE. THE MANNER, FORM AND CONDITIONS OF THE PROVISION OF SERVICE

In order to perform the obligations accepted under this Agreement, the GRANTEE
must, solely, directly, or by contracting a company specializing in sanitary
engineering: (a) study, plan and execute projects relating to the construction,
expansion or remodeling of the public potable water supply and municipal sewage
systems; (b) act as the coordinator, the executor or the overseer of the
execution of the agreements entered into with the City and Federal or State
agencies for the purposes of item "a;" (c) operate, maintain, conserve, and
develop the potable water and sewage systems; (d) issue, control and collect the
accounts for the services to be provided.

CLAUSE FOUR. QUALITY OF SERVICE

The service must be performed in strict conformity with the legislative rules
that regulate the basic sanitation sector, in particular with regard to the
potability of

<PAGE>

the water for the public water supply, according to the standard established in
Ministry of Health Regulation No. 56-BSB, as well as the laws defined by
resolutions of the National Council on the Environment - CONAMA, the National
Health Code, the State Sanitary Code and related municipal legislation.

ss. 1. Water and sewer service must be provided to all properties with buildings
in the territory of the GRANTOR, in which the service may be available.

ss. 2. The Municipal Sanitary Inspector, at the request of the GRANTEE, will
notify the owner or tenant of the property for the purpose of complying with the
provisions of ss. 1 of this Clause.

CLAUSE FIVE. RATES

The GRANTEE is authorized to set rates that will permit the equitable return of
the investment, the improvement and expansion of the services, and assure the
economic and financial equilibrium of the system being operated, after a hearing
of the Municipal Council of Users of the respective service.

ss. 1. The cost of rates for the service will depend upon the service plan.

ss. 2. The rate that is set must guarantee the economic-financial equilibrium of
the agreement and the preservation of the social aspects of the respective
services, in such a manner that it is possible to provide adequate attention to
users who consume less, based on a minimum rate.

ss. 3. The cost of the services that is to be calculated in the determination of
the rates must be the minimum necessary for the adequate operation of the
systems by the GRANTEE and for its own economic-financial viability.

ss. 4. The cost of the services includes:
      (a) Operating expenses;
      (b) Depreciation allowances, provisions for bad debts, and amortization of
costs;
      (c) Recuperation of the investment.

CLAUSE SIX. INCIDENCE, READJUSTMENT AND REVISION OF RATES

The water supply and sewage services that are provided or made available by the
GRANTEE will be remunerated by means of rates," which must cover, at a minimum,
the costs of operation and maintenance, depreciation allowances, provisions for
bad debts, amortization of costs and recovery of the investment.

ss. 1. The rates will be readjusted one time annually, with a proposal from the
GRANTEE, for the purpose of guaranteeing the economic-financial equilibrium of
the agreement.

                                                                               2
<PAGE>

ss. 2. The rates will also be revised upon the occurrence of any event that
might affect the equilibrium of the contract, such as an increase in the costs
of services, the creation or alteration of any taxes or legal fees, the
standardization of the rates or their readjustment.

ss. 3. If any unilateral alteration occurs that might affect the initial
economic-financial equilibrium of the agreement, the GRANTEE must renew it,
concomitantly with the alteration.

ss. 4. At the opinion of the Municipal Council of Users on the selling of the
rates, the GRANTOR must provide, as a budget item, a subsidy to the GRANTEE, for
the purpose of maintaining affordable rates.

ss. 5. The setting of the rates and their revision or readjustment will be
performed with the authorization of the appropriate state authority, at the
proposal of the GRANTEE, after a hearing of the Municipal Council of Users, in
accordance with current legislation.

CLAUSE SEVEN. DIFFERENTIAL RATES

Rates may differ on the basis of the technical characteristics or the specific
costs related to the provision of service to the various user segments.

ss. 1. Depending on the Rate Policy adopted by the GRANTEE, the rate structure
will be adjusted for five (5) segments or categories of users: Residential,
Commercial, Industrial, Public and Public Utility.

ss. 2. For the rates for water, sewage and services, the constant prices
appearing in the Price Table attached to State Act No. __ of __/__/9_ will be in
effect.

ss. 3. The minimum rate will be at least 10 cubic meters of water consumption
per month per household for the user category referred to in ss. 1 of this
Clause.

CLAUSE EIGHT. RIGHTS AND OBLIGATIONS.

OF THE GRANTOR:
      I.    Permanent supervision of the provision of services through the
            Municipal Council of Users;
      II.   Comply with and enforce compliance with the regulatory provisions
            expressed in State Act No. 3926/88 and the Clauses of this
            Agreement;
      III.  Monitor the quality of service, and receive and process user
            complaints about the GRANTEE so that the latter may resolve the
            problems;
      IV.   Rescind and declare the Agreement to be terminated as provided in
            Articles 37 and 38 of Law No. 8987/95.

                                                                               3
<PAGE>

OF THE GRANTEE:

      I.    Provide adequate service, in the manner set forth by law and in this
            Agreement;
      II.   Keep an updated inventory or record of the goods belonging to the
            concession;
      III.  Provide information on the service to the GRANTOR, to the Council
            and to the users;
      IV.   Comply with and enforce compliance with the regulations for the
            provision of service and the Clauses of this Agreement;
      V.    Execute expropriations and enforce easements authorized by the
            GRANTOR, as agreed upon in the Appendix to this Agreement;
      VI.   Protect the integrity of the goods connected with the provision of
            service, and insure them adequately;
      VII.  Receive, apply and manage the financial resources necessary for the
            provision of service;
      VIII. Enter into contracts for the purposes of this Agreement, including
            the hiring of personnel, with no legal relationship being
            established between the GRANTOR and the third parties contracted by
            the GRANTEE.

CLAUSE NINE. THE RIGHTS AND OBLIGATIONS OF THE USERS

      I.    Receive adequate service;
      II.   Receive Information from the GRANTOR and the GRANTEE for the defense
            of individual or collective interest;
      III.  Obtain and use the services in accordance with the regulations of
            the GRANTOR;
      IV.   Notify the public authorities and the GRANTEE of any known
            irregularities in connection with the service provided;
      V.    Notify the competent authorities regarding any illegal actions by
            the GRANTEE in the course of providing the service;
      VI.   Assist in the maintenance of the public property through which the
            services are provided;
      VII.  Comply with the provisions of the Service Regulations of the GRANTEE
            (State Act No. 3926/88) and the basic rules of the service issued by
            the GRANTEE;
      VIII. Pay bills for this service promptly.

CLAUSE TEN. ADEQUATE SERVICE

Adequate service will mean that which qualifies as regular, continuous,
efficient, secure, up to date and generalized.

ss. 1. Being up to date means the modernization of the techniques, equipment and
facilities, and their maintenance as well as the improvement and expansion of
service.

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ss. 2. When service is interrupted because of an emergency or upon prior notice,
it will not be considered discontinuity of service when:
I. It results from technical causes or for the security of the facilities; or
II. It is for the common good, because of non-compliance by the user.

ss. 3. Service will be interrupted if payment of a bill that is due has not been
made for more than thirty (30) days, with this non-payment being subject to the
other sanctions provided in the Regulations of the GRANTEE.

CLAUSE ELEVEN. PROHIBITION OF FREE SERVICE.

The GRANTEE may not offer its services free of cost.

CLAUSE TWELVE. SUBDIVISION.

Within the city limits, the parceling of land by allotments, subdivision or
condominium will only be authorized by the Authorities if they include water and
sewer networks, with the projects previously approved by the GRANTEE.

SOLE PARAGRAPH. The owner of the parcel of urban land in any of its forms will
transfer to the GRANTEE, without cost, any water and sewer networks established
in it, without indemnification from the GRANTOR.

CLAUSE THIRTEEN. REPAIR OF PUBLIC STREETS

The GRANTOR will be liable for the repair of the pavement of streets that are
damaged in the performance of the installation, expansion or repair of public
networks and building collection points, during the use or shortage of the
pledged resources.

ss. 1. The expenses appropriated for the repair of the damaged streets covered
by this Clause will be credited to the GRANTOR as part of the financial
participation referred to in CLAUSE SEVENTEEN.

ss. 2. It will be the obligation of the GRANTEE to repair the sidewalks, billing
the directly affected users for the cost of the repairs.

CLAUSE FOURTEEN. EXPROPRIATION - RIGHT OF WAY

For the purposes of expropriation or the exercise of right of way, the Municipal
Authority will declare any property that is needed for the installation or
expansion of water and sewer systems, in accordance with the projects approved
by the competent authorities, to be of public utility.

ss. 1. The GRANTEE is authorized to initiate the expropriation or acquisition of
easements for the purposes set forth in this Clause, being liable for any
appropriate indemnifications.

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ss. 2. By agreement, the GRANTOR may assume liability for indemnification. In
this case, the provisions of ss. 3 of CLAUSE SEVENTEEN of this Agreement will be
applicable.

CLAUSE FIFTEEN. GOODS AND RIGHTS CONNECTED TO THE SERVICE

The Municipal Authority is authorized to transfer to the GRANTEE all those goods
and rights connected to the water and sewer services, through the shareholder
participation of the GRANTOR in the capital of the GRANTEE, in the amount of
verified liquid assets, pursuant to the valuation procedures of Federal Law No.
6404, December 16, 1976.

SOLE PARAGRAPH. For the performance of the services awarded herein, the GRANTEE
may use lands in the public domain and establish easements across public roads,
routes and highways, in the legally specified manner.

CLAUSE SIXTEEN. TAX EXEMPTION

The GRANTEE will be completely exempt from municipal taxes or duties on its
goods and services.

CLAUSE SEVENTEEN. BUDGETARY ALLOTMENTS

The budgetary laws of the GRANTOR for future fiscal periods, as well as the
respective investment budgets, will provide for the appropriate and necessary
allotments for covering the expenses of the municipal share of the agreement
authorized by this Law [sic], which will be set at 25% (twenty five percent) for
the systems, according to the life of each investment.

ss. 1. The GRANTOR will share in the costs of expansion, extension,
reinforcement and installation of new water supply and sewer systems with a
contribution that will be defined in the APPENDIX.

ss. 2. The share of the GRANTOR covered in this Clause will be concomitant with
the payment of expenses by the GRANTEE, starting with the initiation of the
expansion or improvement projects.

ss. 3. The share covered in ss. 2 will be in the form of money, services and/or
assets and rights, with the contributions being converted into preferential
shares in the capital of the GRANTEE, pursuant to Article 5 of the Municipal
Concessions Law, in an amount that does not make the installation of the system
economically unfeasible.

CLAUSE EIGHTEEN. NEW PROJECTS - PARTICIPATION

It will be incumbent upon the GRANTEE to negotiate, as a priority, with the
appropriate entities for the acquisition of the financing necessary for the
performance of the water supply and sewer projects and services, with no
liability for these loans being imputable to the GRANTOR.

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CLAUSE NINETEEN. SUBROGATION OF RIGHTS AND OBLIGATIONS

The GRANTOR accepts and subrogates itself in the rights and obligations of the
original agreement signed between the City of _____ and the GRANTEE.

CLAUSE TWENTY. PUBLIC RESTROOMS AND FOUNTAINS

The GRANTOR will be liable for payment of rates on public restrooms, fountains
and spigots and branches of the sewer system used by the GRANTOR or that are its
responsibility.

CLAUSE TWENTY-ONE. INTERRUPTION OF SERVICE BECAUSE OF ACTS OF GOD

The GRANTEE will not be liable for interruption of water and sewer services
resulting from Acts of God, such as strikes, floods, accidents, fires, civil
unrest, wars, etc.

CLAUSE TWENTY-TWO. STUDIES AND PLANS FOR PROJECTS

As part of its operating plan, the GRANTEE will perform ongoing studies
regarding the improvement and planning of the installation projects and the
expansion of the public services that it has been awarded, and may therefore
sign agreements with the GRANTOR under the terms of Article ___ of the Municipal
Concessions Law (__/__).

CLAUSE TWENTY-THREE. EXPLANATIONS TO THE MUNICIPAL COUNCIL OF USERS

Whenever it deems necessary, the GRANTOR, acting on its own or through the
Municipal Council of Users, may request explanations regarding the operating
plan being used in the area served by the GRANTEE, and about the rates in
effect.

CLAUSE TWENTY-FOUR. SEIZURE OF WELLS

Within the urban limits, the GRANTEE may take over the operation of artesian
wells, reservoirs and cisterns within the area supplied by the public water
distribution system, being permitted to close and seal the aforementioned supply
sources, with the owners or users having no right to demand indemnification.

ss. 1. The provisions of this Clause will only be applicable when the system
operated by the GRANTEE has achieved the technical capacity to provide services
to the users who are supplied by private wells.

ss. 2. Already existing artesian wells/reservoirs and cisterns may continue to
be used freely provided there are no hygiene and health objections.

                                                                               7
<PAGE>

ss. 3. Rural areas and industrial districts are not affected by the
aforementioned grant of exclusivity of service defined in Clause One of this
Agreement.

CLAUSE TWENTY-FIVE. EXTENSION

This Agreement may be extended or renewed at the agreement of the parties, to be
executed in a formal act, adjusted and signed before the termination of the
concession period, which is expected to be ________.

CLAUSE TWENTY-SIX. TERMINATION

This Agreement may be terminated by:
I. The end of contractual term;
II. An agreement between the parties;
III. A serious violation, heard in a regular administrative proceeding;
IV. A judicial decision issued in a court.

SOLE PARAGRAPH. When the Agreement is declared to be terminated, in any form,
the GRANTEE will continue to manage and operate the systems up to the effective
date of transfer to its successor, and the rights of the GRANTEE will be
respected and any existing credits and debits will be settled.

CLAUSE TWENTY-SEVEN. THE EFFECTS OF TERMINATION

After the termination, the GRANTOR will remain liable for the indemnification of
assets and rights before public institutions, local governments, in any court or
tribunal, claimed by third parties of any kind, physical or legal, service
providers or not, of water supply and sewage collection systems.

CLAUSE TWENTY-EIGHT. REVERSION

If the concession period is not extended or upon termination of this Agreement,
the property of the water and sewer systems will revert to the possession of the
GRANTOR, in accordance with the By Laws of the GRANTEE, and the GRANTOR will
also assume liability for the payment of any financial commitments existing on
the date of transfer of the property, and indemnify the GRANTEE for the
investments, at their original book value, that exceed the stake of the GRANTOR
and were not amortized during the life of the Agreement.

SOLE PARAGRAPH. Any movable or immovable assets intended for the management of
the GRANTEE and that were not acquired as a result of this Agreement are
excluded from reversion.

CLAUSE TWENTY-NINE. TERM

This Agreement will become effective at the time of its signing, ratifying all
the terms and conditions of the original agreement signed with the City of ____
which are not altered by this present instrument.

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CLAUSE THIRTY. JURISDICTION

The jurisdiction of the District of Curitiba, Capital of the State, is chosen
for the resolution of all judicial matters arising from this instrument, with
the parties expressly renouncing any other forum, regardless of its privileged
status. For full legal efficacy, the parties date and sign this Agreement in
three copies equal in form and tenor, in the presence of the witnesses.

Curitiba

GENERAL DIRECTOR                        MAYOR, CITY OF _______________

DIRECTOR OF OPERATIONS

WITNESSES: ______________               ______________

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