Document:

exv4w29

Exhibit 4.29

Dated 14 June 2010

CASCAL INVESTMENTS (UK) LIMITED

(as Borrower and Original Guarantor)

MACQUARIE BANK LIMITED

(as Arranger)

THE FINANCIAL INSTITUTIONS LISTED IN PART B OF SCHEDULE 1

(as Original Lenders)

MACQUARIE BANK LIMITED

(as Agent)

MACQUARIE BANK LIMITED

(as Security Trustee)

 

FACILITY AGREEMENT

 

Freshfields Bruckhaus Deringer LLP

65 Fleet Street

London EC4Y 1HS

 

 

CONTENTS

	 	 	 	 	 
	CLAUSE	 	PAGE	 
	1. DEFINITIONS AND INTERPRETATION
	 	 	1	 
	2. THE FACILITY
	 	 	26	 
	3. PURPOSE
	 	 	27	 
	4. CONDITIONS OF UTILISATION
	 	 	27	 
	5.
UTILISATION - LOANS
	 	 	29	 
	6. REPAYMENT
	 	 	30	 
	7. ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION
	 	 	30	 
	8. MANDATORY PREPAYMENT
	 	 	31	 
	9. RESTRICTIONS
	 	 	32	 
	10. INTEREST
	 	 	34	 
	11. INTEREST PERIODS
	 	 	35	 
	12. CHANGES TO THE CALCULATION OF INTEREST
	 	 	35	 
	13. FEES
	 	 	36	 
	14. TAX GROSS UP AND INDEMNITIES
	 	 	38	 
	15. INCREASED COSTS
	 	 	43	 
	16. OTHER INDEMNITIES
	 	 	44	 
	17. MITIGATION BY THE LENDERS
	 	 	46	 
	18. COSTS AND EXPENSES
	 	 	46	 
	19. GUARANTEE AND INDEMNITY
	 	 	48	 
	20. REPRESENTATIONS
	 	 	52	 
	21. INFORMATION UNDERTAKINGS
	 	 	59	 
	22. FINANCIAL COVENANTS
	 	 	64	 
	23. GENERAL UNDERTAKINGS
	 	 	73	 
	24. EVENTS OF DEFAULT
	 	 	84	 
	25. CHANGES TO THE LENDERS
	 	 	91	 
	26. RESTRICTION ON DEBT PURCHASE TRANSACTIONS
	 	 	95	 
	27. CHANGES TO THE OBLIGORS
	 	 	96	 
	28. ROLE OF THE AGENT, THE ARRANGER AND OTHERS
	 	 	99	 
	29. ROLE OF THE SECURITY TRUSTEE
	 	 	105	 
	30. CONDUCT OF BUSINESS BY THE FINANCE PARTIES
	 	 	112	 
	31. SHARING AMONG THE FINANCE PARTIES
	 	 	112	 
	32. PAYMENT MECHANICS
	 	 	115	 

Page I

 

	 	 	 	 	 
	CLAUSE	 	PAGE	 
	33. SET-OFF
	 	 	118	 
	34. NOTICES
	 	 	118	 
	35. CALCULATIONS AND CERTIFICATES
	 	 	121	 
	36. PARTIAL INVALIDITY
	 	 	122	 
	37. REMEDIES AND WAIVERS
	 	 	122	 
	38. AMENDMENTS AND WAIVERS
	 	 	122	 
	39. CONFIDENTIALITY
	 	 	126	 
	40. COUNTERPARTS
	 	 	130	 
	41. CONFLICT WITH INSTRUMENT OF APPOINTMENT AND WATER ACT
	 	 	130	 
	42. GOVERNING LAW
	 	 	131	 
	43. ENFORCEMENT
	 	 	131	 
	SCHEDULE 1 THE ORIGINAL PARTIES
	 	 	135	 
	SCHEDULE 2 CONDITIONS PRECEDENT
	 	 	137	 
	SCHEDULE 3 REQUESTS AND NOTICES
	 	 	142	 
	SCHEDULE 4 MANDATORY COST FORMULA
	 	 	144	 
	SCHEDULE 5 FORM OF TRANSFER CERTIFICATE
	 	 	147	 
	SCHEDULE 6 FORM OF ASSIGNMENT AGREEMENT
	 	 	150	 
	SCHEDULE 7 FORM OF RESIGNATION LETTER
	 	 	153	 
	SCHEDULE 8 FORM OF COMPLIANCE CERTIFICATE
	 	 	154	 
	SCHEDULE 9 LMA FORM OF CONFIDENTIALITY UNDERTAKING
	 	 	157	 
	SCHEDULE 10 TIMETABLES
	 	 	162	 
	SCHEDULE 11 AGREED SECURITY PRINCIPLES
	 	 	163	 
	SCHEDULE 12 FORMS OF NOTIFIABLE DEBT PURCHASE TRANSACTION NOTICE
	 	 	165	 
	SCHEDULE 13 FORM OF SUBORDINATION AGREEMENT
	 	 	167	 

Page II

 

THIS AGREEMENT is dated 14 June 2010

Between:

	(1)	 	CASCAL INVESTMENTS (UK) LIMITED, a company incorporated under the laws of England with number
07283293 as borrower and original guarantor (the Borrower);
	 
	(2)	 	MACQUARIE BANK LIMITED as mandated lead arranger (the Arranger);
	 
	(3)	 	THE FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 (The Original Parties) as lenders
(the Original Lenders);
	 
	(4)	 	MACQUARIE BANK LIMITED as agent of the other Finance Parties (the Agent); and
	 
	(5)	 	MACQUARIE BANK LIMITED as security trustee for the Secured Parties (the Security Trustee).

It is agreed as follows:

SECTION 1

INTERPRETATION

	1.	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Definitions
	 
	(a)	 	In this Agreement:

Acceptable Bank means:

	(a)	 	a bank or financial institution which has a rating for its long-term unsecured and non
credit-enhanced debt obligations of A or higher by Standard & Poor’s Rating Services or Fitch
Ratings Ltd or A2 or higher by Moody’s Investor Services Limited or a comparable rating from
an internationally recognised credit rating agency; or
	 
	(b)	 	any other bank or financial institution approved by the Agent.

Accounting Principles means GAAP until such time as (i) GAAP is replaced by IFRS for small and
medium-sized enterprises or (ii) the relevant member of the Group changes its accounting principles
from GAAP to IFRS, and from such time, IFRS.

Accounting Reference Date means 31 March.

Additional Cost Rate has the meaning given to it in Schedule 4 (Mandatory Cost Formula).

Additional Guarantor means a company which becomes an Additional Guarantor in accordance with
Clause 27 (Changes to the Obligors).

Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of
that person or any other Subsidiary of that Holding Company.

 

 

Agreed Security Principles means the principles set out in Schedule 11 (Agreed Security
Principles).

Artesian Debentures mean:

	(a)	 	the debenture between the Licensed Undertaking and Capita IRG Trustees Limited dated 20 April
2005; and
	 
	(b)	 	the debenture between Holdco and Capita IRG Trustees Limited dated 20 April 2005.

Artesian Facility means the facility made available under the Artesian Facility Agreement.

Artesian Facility Agreement means the £65,000,000 secured index-linked term facility agreement
between, among others, the Licensed Undertaking as borrower, Artesian Finance II plc as lender and
The Royal Bank of Scotland plc as agent dated 14 March 2005 as amended and restated on 20 April
2005.

Artesian Finance Documents means the Borrower Finance Documents as such term is defined in the
Artesian Facility Agreement.

Artesian STID means the security trust and intercreditor deed between, among others, the Licensed
Undertaking and Capita IRG Trustees Limited dated 20 April 2005.

Assignment Agreement means an agreement substantially in the form set out in Schedule 6 (Form of  Assignment Agreement) or any other form agreed between the relevant assignor and assignee.

Auditors means one of PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte & Touche or any other
firm approved in advance by the Majority Lenders.

Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing,
notarisation or registration.

Availability Period means the period from and including the date of this Agreement to and including
the date falling 45 days after the execution of this Agreement.

Available Commitment means a Lender’s Commitment under the Facility minus the aggregate amount of
its participation in any outstanding Utilisations under the Facility.

Available Facility means the aggregate for the time being of each Lender’s Available Commitment.

Base Case Model means the financial model including profit and loss, balance sheet and cashflow
projections in agreed form relating to the Group, each prepared by the Borrower.

Base Reference Bank Rate means the arithmetic mean of the rates (rounded upwards to four decimal
places) as supplied to the Agent at its request by the Base Reference Banks in relation to LIBOR,
as the rate at which the relevant Base Reference Bank could borrow funds in the London interbank
market in the relevant currency and for the relevant period, were it to do so by asking for and
then accepting interbank offers for deposits in reasonable market size in that currency and for
that period.

Page 2

 

Base Reference Banks means, in relation to LIBOR and Mandatory Cost, the principal London offices
of Barclays Bank plc, Lloyds TSB Bank plc and HSBC Bank plc or such other banks as may be appointed
by the Agent in consultation with the Borrower.

Borrowings has the meaning given to that term in Clause 22.1 (Financial definitions).

Break Costs means the amount (if any) by which:

	(a)	 	the interest excluding the Margin which a Lender should have received for the period from the
date of receipt of all or any part of its participation in the Loan or an Unpaid Sum to the
last day of the current Interest Period in respect of the Loan or that Unpaid Sum, had the
principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

	(b)	 	the amount which that Lender would be able to obtain by placing an amount equal to the
principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant
Interbank Market for a period starting on the Business Day following receipt or recovery and
ending on the last day of the current Interest Period.

Budget means:

	(a)	 	in relation to the period beginning on 1 April 2010 and ending on 31 March 2011, the Base
Case Model in agreed form to be delivered by the Borrower to the Agent pursuant to Clause 4.2
(Initial conditions precedent to Utilisation); and
	 
	(b)	 	in relation to any other period, any budget delivered by the Borrower to the Agent in respect
of that period pursuant to Clause 21.4 (Budget).

Business Day means a day (other than a Saturday or Sunday) on which banks are open for general
business in London.

Capital Expenditure has the meaning given to that term in Clause 22.1 (Financial definitions).

Cash has the meaning given to that term in Clause 22.1 (Financial definitions).

Cash Equivalent Investments has the meaning given to that term in Clause 22.1 (Financial
definitions).

Cashflow has the meaning given to that term in Clause 22.1 (Financial definitions).

Cash Flow Forecast has the meaning given to that term in Clause 22.1 (Financial definitions).

Change of Control means the Parent ceases to control directly or indirectly the Borrower.

For the purposes of this definition control means:

	(a)	 	the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

Page 3

 

	 	(i)	 	cast, or control the casting of, 100% of the maximum number of votes that
might be cast at a general meeting of the Borrower; or
	 
	 	(ii)	 	appoint or remove all, of the directors or other equivalent officers of the
Borrower; or
	 
	 	(iii)	 	give directions with respect to the operating and financial policies of the
Borrower with which the directors or other equivalent officers of the Borrower are
obliged to comply; and/or

	(b)	 	the holding beneficially of 100% of the issued share capital of the Borrower (excluding any
part of that issued share capital that carries no right to participate beyond a specified
amount in a distribution of either profits or capital).

Charged Property means all of the assets of the Obligors which from time to time are, or are
expressed to be, the subject of the Transaction Security.

Closing Date means the date of Utilisation of the Facility.

Commitment means:

	(a)	 	in relation to an Original Lender, the amount in sterling set opposite its name under the
heading “Commitment” in Part B of Schedule 1 (The Original Lenders) and the amount of any
other Commitment transferred to it under this Agreement; and
	 
	(b)	 	in relation to any other Lender, the amount in sterling of any Commitment transferred to it
under this Agreement,

to the extent:

	 	(i)	 	not cancelled, reduced or transferred by it under this Agreement; and
	 
	 	(ii)	 	not deemed to be zero pursuant to Clause 26.2 (Disenfranchisement on Debt
Purchase Transactions entered into by Sponsor Affiliates).

Compliance Certificate means a certificate substantially in the form set out in Schedule 8 (Form of Compliance Certificate).

Confidential Information means all information relating to any Obligor, the Group, the Finance
Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the
purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for
the purpose of becoming a Finance Party under, the Finance Documents or a Facility from either:

	(a)	 	any member of the Group or any of its advisers; or
	 
	(b)	 	another Finance Party, if the information was obtained by that Finance Party directly or
indirectly from any member of the Group or any of its advisers,

in whatever form, and includes information given orally and any document, electronic file or any
other way of representing or recording information which contains or is derived or copied from such
information but excludes information that:

Page 4

 

	 	(i)	 	is or becomes public information other than as a direct or indirect result of
any breach by that Finance Party of Clause 39 (Confidentiality); or
	 
	 	(ii)	 	is identified in writing at the time of delivery as non-confidential by any
member of the Group or any of its advisers; or
	 
	 	(iii)	 	is known by that Finance Party before the date the information is disclosed
to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that
Finance Party after that date, from a source which is, as far as that Finance Party is
aware, unconnected with the Group and which, in either case, as far as that Finance
Party is aware, has not been obtained in breach of, and is not otherwise subject to,
any obligation of confidentiality.

Confidentiality Undertaking means a confidentiality undertaking substantially in a recommended form
of the LMA as set out in Schedule 9 (LMA Form of Confidentiality Undertaking) or in any other form
agreed between the Borrower and the Agent.

Contribution Notice means a contribution notice issued by the Pensions Regulator under section 38
or section 47 of the Pensions Act 2004.

CTA means the Corporation Tax Act 2009.

Debenture Stock means the 4 per cent. perpetual debenture stock and the 5 per cent. perpetual
debenture stock of the Licensed Undertaking together with premiums on such perpetual debenture
stock.

Debt Purchase Transaction means, in relation to a person, a transaction where such person:

	(a)	 	purchases by way of assignment or transfer;
	 
	(b)	 	enters into any sub-participation in respect of; or
	 
	(c)	 	enters into any other agreement or arrangement having an economic effect substantially
similar to a sub-participation in respect of,

any Commitment or amount outstanding under this Agreement.

Debt Service has the meaning given to that term in Clause 22.1 (Financial definitions).

Default means an Event of Default or any event or circumstance specified in Clause 24 (Events of
Default) which would (with the expiry of a grace period, the giving of notice, the making of any
determination under the Finance Documents or any combination of any of the foregoing) be an Event
of Default provided that any such event which by reason of the express provisions in any Finance
Document requires the satisfaction of a condition of materiality before it may become an Event of
Default shall not be a Default unless that condition of materiality is satisfied.

Defaulting Lender means any Lender (other than a Lender which is a Sponsor Affiliate):

	(a)	 	which has failed to make its participation in the Loan available or has notified the Agent
that it will not make its participation in the Loan available by the Utilisation Date of the
Loan in accordance with Clause 5.4 (Lenders’ participation); or

Page 5

 

	(b)	 	which has otherwise rescinded or repudiated a Finance Document;

unless, in the case of paragraph (a) above:

	 	(i)	 	its failure to pay is caused by:

	 	(A)	 	administrative or technical error; or
	 
	 	(B)	 	a Disruption Event; and

	 	 	 	payment is made within five Business Days of its due date; or

	 	(ii)	 	the Lender is disputing in good faith whether it is contractually obliged to
make the payment in question.

Delegate means any delegate, agent, attorney or co-trustee appointed by the Security Trustee.

Disruption Event means either or both of:

	(a)	 	a material disruption to those payment or communications systems or to those financial
markets which are, in each case, required to operate in order for payments to be made in
connection with the Facility (or otherwise in order for the transactions contemplated by the
Finance Documents to be carried out) which disruption is not caused by, and is beyond the
control of, any of the Parties; or
	 
	(b)	 	the occurrence of any other event which results in a disruption (of a technical or
systems-related nature) to the treasury or payments operations of a Party preventing that, or
any other Party:

	 	(i)	 	from performing its payment obligations under the Finance Documents; or
	 
	 	(ii)	 	from communicating with other Parties in accordance with the terms of the
Finance Documents,

	 	 	and which (in either such case) is not caused by, and is beyond the control of, the Party
whose operations are disrupted.

Dormant Subsidiary means a member of the Group which does not trade (for itself or as agent for any
person) and does not own, legally or beneficially, assets (including, without limitation,
indebtedness owed to it) which in aggregate have a value of £10,000 or more.

EBITDA has the meaning given to that term in Clause 22.1 (Financial definitions).

Enforcement Order has the meaning given to it in the Water Act.

Environment means humans, animals, plants and all other living organisms including the ecological
systems of which they form part and the following media:

	(a)	 	air (including, without limitation, air within natural or man-made structures, whether above
or below ground);
	 
	(b)	 	water (including, without limitation, territorial, coastal and inland waters, water under or
within land and water in drains and sewers); and

Page 6

 

	(c)	 	land (including, without limitation, land under water).

Environmental Claim means any claim, proceeding, formal notice or investigation by any person in
respect of any Environmental Law.

Environmental Law means any applicable law or regulation which relates to:

	(a)	 	the pollution or protection of the Environment;
	 
	(b)	 	the conditions of the workplace; or
	 
	(c)	 	the generation, handling, storage, use, release or spillage of any substance which, alone or
in combination with any other, is capable of causing harm to the Environment, including,
without limitation, any waste.

Environmental Permits means any permit and other Authorisation and the filing of any notification,
report or assessment required under any Environmental Law for the operation of the business of any
member of the Group conducted on or from the properties owned or used by any member of the Group.

Event of Default means any event or circumstance specified as such in Clause 24 (Events of
Default).

Excess Distribution has the meaning given to that term in Clause 23.22 (Dividends and share
redemption).

Excess Cashflow means, for any period for which it is being calculated, Cashflow for that period
less (except to the extent already deducted in calculating Cashflow) Debt Service for that period.

Facility means the term loan facility made available under this Agreement as described in Clause
2.1 (The Facility).

Facility Office means:

	(a)	 	in respect of a Lender, the office or offices notified by that Lender to the Agent in writing
on or before the date it becomes a Lender (or, following that date, by not less than five
Business Days’ written notice) as the office or offices through which it will perform its
obligations under this Agreement; or
	 
	(b)	 	in respect of any other Finance Party, the office in the jurisdiction in which it is resident
for tax purposes.

Fee Letter means any letter or letters dated on or about the date of this Agreement between the
Arranger and the Borrower (or the Agent and the Borrower or the Security Trustee and the Borrower)
setting out any of the fees referred to in Clause 13 (Fees).

Finance Document means this Agreement, any Accession Deed, any Compliance Certificate, any Fee
Letter, any Resignation Letter, any Selection Notice, any Transaction Security Document, any
Utilisation Request, any Subordination Agreement and any other document designated as a “Finance
Document” by the Agent and the Borrower.

Finance Party means the Agent, the Arranger, the Security Trustee, or a Lender.

Page 7

 

Financial Indebtedness means any indebtedness for or in respect of:

	(a)	 	moneys borrowed and debit balances at banks or other financial institutions (including in
each case, without limitation, any capitalised element thereof);
	 
	(b)	 	any acceptance under any acceptance credit or bill discounting facility (or dematerialised
equivalent);
	 
	(c)	 	any note purchase facility or the issue of bonds, notes, debentures, loan stock or any
similar instrument (including any capitalised interest or, if issued at a discount, the issue
price thereof);
	 
	(d)	 	the amount of any liability in respect of Finance Leases;
	 
	(e)	 	receivables sold or discounted (other than any receivables to the extent they are sold on a
non-recourse basis);
	 
	(f)	 	any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only
the marked to market value (or, if any actual amount is due as a result of the termination or
close-out of that Treasury Transaction, that amount) shall be taken into account);
	 
	(g)	 	any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary
letter of credit or any other instrument issued by a bank or financial institution;
	 
	(h)	 	any amount raised by the issue of redeemable shares which are redeemable (other than at the
option of the issuer) before the Repayment Date or are otherwise classified as borrowings
under the Accounting Principles;
	 
	(i)	 	any amount of any liability under an advance or deferred purchase agreement if (i) one of the
primary reasons behind entering into the agreement is to raise finance or to finance the
acquisition or construction of the asset or service in question or (ii) the agreement is in
respect of the supply of assets or services and payment is due more than 90 days after the
date of supply;
	 
	(j)	 	any amount raised under any other transaction (including any forward sale or purchase, sale
and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or
otherwise classified as borrowings under the Accounting Principles; and
	 
	(k)	 	the amount of any liability in respect of any guarantee or indemnity for any of the items
referred to in paragraphs (a) to (j) above.

Financial Quarter has the meaning given to that term in Clause 22.1 (Financial definitions).

Financial Support Direction means a financial support direction issued by the Pensions Regulator
under section 43 of the Pensions Act 2004.

Financial Year has the meaning given to that term in Clause 22.1 (Financial definitions).

GAAP means generally accepted accounting principles in the UK.

Page 8

 

Good Industry Practice means the standards, practices, methods and procedures as practised in the
United Kingdom conforming to all applicable laws and that degree of skill, diligence, prudence and
foresight which would reasonably be expected from a skilled and experienced
person undertaking all or part of the relevant business under the same or similar circumstances.

Group means the Borrower and each of its Subsidiaries for the time being.

Group Structure Chart means the group structure chart in the agreed form.

Guarantor means the Borrower and each Additional Guarantor, unless it has ceased to be a Guarantor
in accordance with Clause 27 (Changes to the Obligors).

Holdco means Bournemouth & West Hampshire Water Holdings Limited, a company incorporated under the
laws of England with company number 05321147.

Holding Company means, in relation to a company or corporation, any other company or corporation in
respect of which it is a Subsidiary.

HSBC Facility means the facility borrowed under the $70,000,000 (originally $30,000,000) facility
agreement between, among others, Cascal N.V. and Cascal Holdings Limited as borrowers and HSBC Bank
plc as mandated lead arranger, agent and security trustee dated 25 June 2007 (as amended from time
to time).

IFRS means international accounting standards within the meaning of IAS Regulation 1606/2002 to the
extent applicable to the relevant financial statements.

Impaired Agent means the Agent at any time when:

	(a)	 	it has failed to make (or has notified a Party that it will not make) a payment required to
be made by it under the Finance Documents by the due date for payment;
	 
	(b)	 	the Agent otherwise rescinds or repudiates a Finance Document;
	 
	(c)	 	(if the Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the
definition of “Defaulting Lender”; or
	 
	(d)	 	an Insolvency Event has occurred and is continuing with respect to the Agent;

unless, in the case of paragraph (a) above:

	 	(i)	 	its failure to pay is caused by:

	 	(A)	 	administrative or technical error; or
	 
	 	(B)	 	a Disruption Event; and

	 	 	 	payment is made within five Business Days of its due date; or

	 	(ii)	 	the Agent is disputing in good faith whether it is contractually obliged to
make the payment in question.

Indexed has the meaning given to that term in Clause 22.1 (Financial definitions).

Page 9

 

Information Package means the Base Case Model and each document, agreement, instrument, schedule,
certificate, statement, cash flow schedule, number run or other written
information and data provided by an Obligor to the Agent or its professional advisers before the
date of this Agreement.

Insolvency Event in relation to a Finance Party means that the Finance Party:

	(a)	 	is dissolved (other than pursuant to a consolidation, amalgamation or merger);
	 
	(b)	 	becomes insolvent or is unable to pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due;
	 
	(c)	 	makes a general assignment, arrangement or composition with or for the benefit of its
creditors;
	 
	(d)	 	institutes or has instituted against it, by a regulator, supervisor or any similar official
with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction
of its incorporation or organisation or the jurisdiction of its head or home office, a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition
is presented for its winding-up or liquidation by it or such regulator, supervisor or similar
official;
	 
	(e)	 	has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any
other relief under any bankruptcy or insolvency law or other similar law affecting creditors’
rights, or a petition is presented for its winding-up or liquidation, and, in the case of any
such proceeding or petition instituted or presented against it, such proceeding or petition is
instituted or presented by a person or entity not described in paragraph (d) above and:

	 	(i)	 	results in a judgment of insolvency or bankruptcy or the entry of an order
for relief or the making of an order for its winding-up or liquidation; or
	 
	 	(ii)	 	is not dismissed, discharged, stayed or restrained in each case within 30
days of the institution or presentation thereof;

	(f)	 	has a resolution passed for its winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger);
	 
	(g)	 	seeks or becomes subject to the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official for it or for all or
substantially all its assets;
	 
	(h)	 	has a secured party take possession of all or substantially all its assets or has a distress,
execution, attachment, sequestration or other legal process levied, enforced or sued on or
against all or substantially all its assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed or restrained, in each case within 30
days thereafter;
	 
	(i)	 	causes or is subject to any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h)
above; or

Page 10

 

	(j)	 	takes any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts.

Instrument of Appointment means the Instrument of Appointment by the Secretary of State for the
Environment of the Licensed Undertaking as a water undertaker under Sections 11 and 14 of the Water
Act 1989 (now Sections 6, 7, 11 and 12 of the Water Industry Act 1991) as modified and varied by
the Director General under Sections 11 to 17 of the Water Industry Act 1991.

Intellectual Property means:

	(a)	 	any patents, trade marks, service marks, designs, business names, copyrights, database
rights, design rights, domain names, moral rights, inventions, confidential information,
knowhow and other intellectual property rights and interests (which may now or in the future
subsist), whether registered or unregistered; and
	 
	(b)	 	the benefit of all applications and rights to use such assets of each member of the Group
(which may now or in the future subsist).

Interest Period means, in relation to the Loan, each period determined in accordance with Clause 11
(Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with
Clause 10.3 (Default interest).

ITA means the Income Tax Act 2007.

Joint Venture means any joint venture entity, whether a company, unincorporated firm, undertaking,
association, joint venture or partnership or any other entity.

Legal Opinion means any legal opinion delivered to the Agent under Clause 4.2 (Initial conditions
precedent to Utilisation) or Clause 27 (Changes to the Obligors).

Legal Reservations means:

	(a)	 	the principle that equitable remedies may be granted or refused at the discretion of a court
and the limitation of enforcement by laws relating to insolvency, reorganisation and other
laws generally affecting the rights of creditors;
	 
	(b)	 	the time barring of claims under the Limitation Acts, the possibility that an undertaking to
assume liability for or indemnify a person against non-payment of UK stamp duty may be void
and defences of set-off or counterclaim; and
	 
	(c)	 	similar principles, rights and defences under the laws of any Relevant Jurisdiction; and
	 
	(d)	 	any other matters which are set out as qualifications or reservations as to matters of law of
general application in the Legal Opinions.

Lender means:

	(a)	 	any Original Lender; and
	 
	(b)	 	any bank, financial institution, trust, fund or other entity which has become a Party as a
Lender in accordance with Clause 25 (Changes to the Lenders),

Page 11

 

which in each case has not ceased to be a Lender in accordance with the terms of this Agreement.

LIBOR means, in relation to any Loan:

	(a)	 	the applicable Screen Rate; or
	 
	(b)	 	(if no Screen Rate is available for the currency or Interest Period of that Loan) the Base
Reference Bank Rate,

as of the Specified Time on the Quotation Day for the currency of that Loan and a period comparable
to the Interest Period of that Loan.

Licensed Undertaking means Bournemouth & West Hampshire Water plc, a company incorporated under the
laws of England with company number 02924312.

Limitation Acts means the Limitation Act 1980 and the Foreign Limitation Periods Act 1984.

LMA means the Loan Market Association.

Loan means the loan made or to be made under the Facility or the principal amount outstanding for
the time being of that loan.

Majority Lenders means a Lender or Lenders whose Commitments aggregate more than
662/3 per cent. of the Total Commitments (or, if the Total Commitments have
been reduced to zero, aggregated more than 662/3 per cent. of the Total
Commitments immediately prior to that reduction).

Mandatory Cost means the percentage rate per annum calculated by the Agent in accordance with
Schedule 4 (Mandatory Cost formula).

Margin means 6 per cent. per annum,

but if:

	(a)	 	no Default has occurred and is continuing; and
	 
	(b)	 	the RAR in respect of the most recently completed Relevant Period is within a range set out
below,

then the Margin will be the percentage per annum set out below in the column opposite that range:

	 	 	 	 	 
	 	 	Margin
	RAR	 	% p.a.
	Greater than or equal to 0.85:1
	 	 	6.00	 
	 
	 	 	 	 
	Less than 0.85:1
	 	 	5.00	 

However:

Page 12

 

	 	(i)	 	any increase or decrease in the Margin for the Loan shall take effect on the
date (the reset date) which is one (1) Business Day after receipt by the Agent
of the Compliance Certificate for that Relevant Period pursuant to Clause 21.2
(Provision and contents of Compliance Certificate);
	 
	 	(ii)	 	if, following receipt by the Agent of the annual audited financial statements
of the Group and related Compliance Certificate, those statements and Compliance
Certificate demonstrate that the Margin:

	 	(A)	 	should have been varied in accordance with the table above
where it has not been; or
	 
	 	(B)	 	should not have been varied in accordance with the table
when it has been,

	 	 	 	then either (i) the Borrower will promptly pay to the agent for the account of the
Lenders such additional amount of interest as would have been payable had the
Margin been set for the relevant period at the correct level as demonstrated by
the audited financial statements; or (ii) the amount of interest overpaid by the
Borrower shall be credited against and deducted from the amount of interest
payable by the Borrower on the next interest payment date;
	 
	 	(iii)	 	while a Default is continuing, the Margin shall be the highest percentage
per annum set out above; and
	 
	 	(iv)	 	for the purpose of determining the Margin, the RAR and Relevant Period shall
be determined in accordance with Clause 22.1 (Financial definitions).

Material Adverse Effect means a material adverse effect on:

	(a)	 	the business, operations, property, condition (financial or otherwise) or prospects of the
Group taken as a whole; or
	 
	(b)	 	the ability of an Obligor to perform its payment or other material obligations (including,
for the avoidance of doubt, its obligations under Clause 22.2 (Financial condition)) under the
Finance Documents; or
	 
	(c)	 	the validity or enforceability of, or the effectiveness or ranking of any Security granted or
purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies
of any Finance Party under any of the Finance Documents.

Material Company means, at any time:

	(a)	 	an Obligor; or
	 
	(b)	 	a wholly-owned member of the Group that holds shares in an Obligor; or
	 
	(c)	 	the Licensed Undertaking; or
	 
	(d)	 	if not listed in paragraph (c) above, any Subsidiary of the Borrower which has earnings
before interest, tax, depreciation and amortisation calculated on the same basis as EBITDA
representing 5 per cent. or more of EBITDA or has gross assets representing 5 per cent. or
more of the gross assets calculated on a consolidated basis.

Page 13

 

Compliance with the conditions set out in paragraph (d) shall be determined by reference to the
most recent Compliance Certificate supplied by the Borrower and/or the latest audited financial
statements of that Subsidiary (consolidated in the case of a Subsidiary which itself has
Subsidiaries) and the latest audited consolidated financial statements of the Group.

A report by the Auditors of the Borrower that a Subsidiary is or is not a Material Company shall,
in the absence of manifest error, be conclusive and binding on all Parties.

Month means a period starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month, except that:

	(a)	 	(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day,
that period shall end on the next Business Day in that calendar month in which that period is
to end if there is one, or if there is not, on the immediately preceding Business Day;
	 
	(b)	 	if there is no numerically corresponding day in the calendar month in which that period is to
end, that period shall end on the last Business Day in that calendar month; and
	 
	(c)	 	if an Interest Period begins on the last Business Day of a calendar month, that Interest
Period shall end on the last Business Day in the calendar month in which that Interest Period
is to end.

The above rules will only apply to the last Month of any period.

Non-Consenting Lender has the meaning given to that term in Clause 38.3 (Replacement of Lender).

Obligor means the Borrower or a Guarantor.

Obligors’ Agent means the Borrower, appointed to act on behalf of each Obligor in relation to the
Finance Documents pursuant to Clause 2.3 (Obligors’ Agent).

OFWAT means The Office of Water Services, including any successor office or body.

On-Loan means a loan referred to in paragraph (b) of the definition of Permitted Loan.

On-Loan Agreement means an agreement evidencing an On-Loan delivered to the Agent under paragraph
4(h) of Part A of Schedule 2 (Conditions precedent to initial Utilisation).

Original Financial Statements means:

	(a)	 	the statutory accounts and supplementary regulatory accounting statements of the Licensed
Undertaking for its Financial Year ended 31 March 2009; and
	 
	(b)	 	in relation to the Borrower, its unconsolidated unaudited balance sheet as at the Closing
Date.

Parent means BWH Group Limited, a company incorporated under the laws of England and Wales with
company number 0653827.

Page 14

 

Parent Loan Agreement means together the agreements between the Parent (as borrower) and the
Licensed Undertaking (as lender) evidencing the loans referred to in paragraph (c) of the
definition of Permitted Loan.

Participating Member State means any member state of the European Communities that adopts or has
adopted the euro as its lawful currency in accordance with legislation of the European Community
relating to Economic and Monetary Union.

Party means a party to this Agreement.

Pension Scheme means the “Water Company” section of the Biwater Retirement and Security Scheme or
such successor or replacement pension scheme as may be established.

Pensions Regulator means the body corporate called the Pensions Regulator established under Part I
of the Pensions Act 2004.

Permitted Acquisition means an acquisition of assets:

	(a)	 	in accordance with any planned Capital Expenditure which is otherwise permitted under the
terms of the Finance Documents;
	 
	(b)	 	in circumstances constituting a Permitted Disposal;
	 
	(c)	 	which are Cash Equivalent Investments for treasury management purposes;
	 
	(d)	 	an acquisition of shares pursuant to a Permitted Share Issue;
	 
	(e)	 	(other than shares) by the Licensed Undertaking provided that the consideration for the
acquisition (when aggregated with the consideration for any other Permitted Acquisition under
this paragraph (e)) does not during the life of the Facility exceed £1,000,000 (as such amount
is Indexed);
	 
	(f)	 	for the replacement, reinstatement and/or repair of assets using the proceeds of any
insurance claim;
	 
	(g)	 	using the proceeds of any grant received by any member of the Group from any third party
(which would not otherwise cause a breach of the Finance Documents);
	 
	(h)	 	the incorporation of a limited liability company incorporated under the laws of England and
Wales in order to implement a Permitted Sale and Leaseback Transaction;
	 
	(i)	 	in circumstances constituting a Permitted Transaction that complies with paragraph (e) of the
definition of that term; and
	 
	(j)	 	made with the prior written consent of the Majority Lenders.

Permitted Disposal means any sale, lease, licence, transfer or other disposal of assets which,
except in the case of paragraph (a), is on arm’s length terms:

	(a)	 	of any asset by a member of the Group (the Disposing Company) to another member of the Group
(the Acquiring Company), but if:

Page 15

 

	 	(i)	 	the Disposing Company is an Obligor, the Acquiring Company must also be an
Obligor;
	 
	 	(ii)	 	the Disposing Company had given Security over the asset, the Acquiring
Company must give equivalent Security over that asset; and
	 
	 	(iii)	 	the Disposing Company is a Guarantor, the Acquiring Company must be a
Guarantor guaranteeing at all times an amount no less than that guaranteed by the
Disposing Company;

	(b)	 	of Cash Equivalent Investments for treasury management purposes for cash or in exchange for
other Cash Equivalent Investments which would not otherwise cause a breach of the Finance
Documents;
	 
	(c)	 	in the ordinary course of trade or in connection with arm’s length transactions entered into
for bona fide commercial purposes in the ordinary course of business of the disposing entity
(which includes for the avoidance of doubt any disposal by the Licensed Undertaking of land
(other than the sale of protected land as permitted under paragraph (e) below) made on an
arm’s length basis);
	 
	(d)	 	of any obsolete, surplus, worn-out or destroyed assets;
	 
	(e)	 	of protected land (as that term is defined in the Water Act) made in accordance with the
Instrument of Appointment;
	 
	(f)	 	any Permitted Sale and Leaseback Transaction;
	 
	(g)	 	of cash which would not otherwise cause a breach of the Finance Documents;
	 
	(h)	 	arising as a result of any Permitted Security;
	 
	(i)	 	any Permitted Tax Disposal; and
	 
	(j)	 	is made with the prior written consent of the Majority Lenders.

Permitted Distribution means:

	(a)	 	the payment of a dividend by the Borrower to its Holding Company provided that:

	 	(i)	 	no Default is continuing or would occur immediately after the making of such
payment;
	 
	 	(ii)	 	no Trigger Event (as defined in the Artesian STID) is continuing;
	 
	 	(iii)	 	either:

	 	(A)	 	if the RAR as at the Quarter Date immediately prior to the
date of such payment, is equal to or greater than 0.80:1 but less than
0.85:1, such payment does not exceed 50 per cent. of the Excess Cashflow
(calculated on a pro forma basis taking into account the proposed
distribution and less the amount of any Excess Distribution which has not
previously been deducted) generated in the Financial Quarter that ended on
such Quarter Date, or

Page 16

 

	 	(B)	 	if the RAR as at the Quarter Date immediately prior to the
date of such payment, is less than 0.80:1, such payment does not exceed 100
per cent. of the Excess Cashflow (calculated on a pro forma basis taking into
account the proposed distribution and less the amount of any Excess
Distribution which has not previously been deducted) generated in the
Financial Quarter that ended on such Quarter Date,

	 	 	 	in each case to the extent such amount has not already been distributed and
provided further that Excess Cashflow for the relevant Financial Quarter shall be
calculated by reference to financial statements delivered under paragraph (a) and
(b) of Clause 21.1 (Financial statements) in respect of the relevant Financial
Quarter; and

	 	(iv)	 	the Borrower certifies that it will have sufficient cash resources to meet
its payment obligations under the Finance Documents in respect of the immediately
succeeding twelve months;

	(b)	 	the payment of dividend by a member of the Group (other than the Borrower) to its
shareholders provided that the shareholders receive such payment pro rata to their
shareholding in that member of the Group;
	 
	(c)	 	the payment of management fees to any member of the Topco Group (which is not a member of the
Group) for actual management services provided on arm’s length commercial terms up to a
maximum aggregate amount equal to £341,000 in any Financial Year of the Borrower (as such
amount is Indexed provided that at the time such payment is made no Event of Default has
occurred and is continuing or would occur immediately after the making of the proposed
payment); and
	 
	(d)	 	any payment made with the prior written consent of the Majority Lenders.

Permitted Financial Indebtedness means Financial Indebtedness:

	(a)	 	arising under this Agreement;
	 
	(b)	 	arising under the Artesian Facility Agreement provided that the aggregate principal amount of
such Financial Indebtedness does not exceed £65,000,000 (as such amount is indexed in
accordance with the terms of the Artesian Facility Agreement and as reduced by any prepayments
of the Artesian Facility made after the date of this Agreement);
	 
	(c)	 	arising under the Debenture Stock or any other debenture stock issued by the Licensed
Undertaking in a maximum aggregate amount of Financial Indebtedness under such Debenture Stock
(or other debenture stock, as the case may be) does not exceed £300,000 at any time;
	 
	(d)	 	arising under a Permitted Loan or a Permitted Guarantee;
	 
	(e)	 	incurred by a member of the Group pursuant to or in connection with any cash pooling
arrangements with an Acceptable Bank but only to the extent that such debit balances are
offset by credit balances of other members of the Group;
	 
	(f)	 	under finance or capital leases of vehicles, plant, equipment or computers entered into by
the Licensed Undertaking, provided that the aggregate capital value of all such items so
leased under outstanding leases by members of the Group (including, for the

Page 17

 

	 	 	avoidance of doubt, any such items permitted under paragraph (a) of the definitions of
Permitted Indebtedness contained in the Artesian STID (which includes, for the avoidance of
doubt, the W. & G. Finance Lease (as defined in the Artesian STID)) does not exceed
£4,100,000;
	 
	(g)	 	arising under an overdraft facility provided to the Licensed Undertaking by Lloyds TSB Bank
plc provided that the aggregate principal amount outstanding under such facility does not
exceed £5,000,000 (or such larger amount as maybe agreed with the Agent (acting reasonably)
from time to time);
	 
	(h)	 	arising in connection with any counter-indemnity, guarantee or similar obligation in favour
of The Royal Bank of Scotland plc in respect of the standby letter of credit dated 4 February
2008 (as the same may be amended, supplemented, varied or replaced from time to time) and
issued by The Royal Bank of Scotland plc in favour of the trustees of the Water Company
Sub-Fund Section of the BiWater Retirement and Security Scheme;
	 
	(i)	 	that arises on any intra-day basis in the ordinary course of the business of the Licensed
Undertaking under any BACS or settlement facilities, provided that no such indebtedness is
outstanding at the end of any Business Day;
	 
	(j)	 	under any Permitted Sale and Leaseback Transaction;
	 
	(k)	 	any loans made from a member of the Topco Group (which is not a member of the Group) to the
Borrower to finance any payment obligations of the Borrower under the Finance Documents from
time to time provided that such loans are subordinated to the Facility under and pursuant to
the terms of a Subordination Agreement; and
	 
	(l)	 	incurred with the prior written consent of the Majority Lenders.

Permitted Guarantee means

	(a)	 	any guarantee given under the Artesian Debentures; and
	 
	(b)	 	any guarantee arising under the Finance Documents.

Permitted Loan means:

	(a)	 	a loan made by a member of the Group to another member of the Group;
	 
	(b)	 	any loan from the Borrower to a member of the Topco Group using the proceeds of the Loan
provided that the aggregate principal amount lent pursuant to all such loans does not exceed
the principal amount drawn by the Borrower under the first Utilisation;
	 
	(c)	 	the loans from the Licensed Undertaking to the Parent provided that the principal amount
outstanding under such loan does not exceed £4,433,045.81 at any time; and
	 
	(d)	 	any loans made by the Licensed Undertaking to its employees provided that the amount of any
such loan when aggregated with the aggregate amount of all loans to employees does not exceed
£50,000 at any time.

Page 18

 

Permitted Sale and Leaseback Transaction means a sale and leaseback transaction between any members
of the Group provided that the aggregate market value of the assets subject to such transactions at
any time does not exceed £10,000,000.

Permitted Security means:

	(a)	 	the Transaction Security and any other Security created under the Finance Documents;
	 
	(b)	 	any lien arising by operation of law and in the ordinary course of trading;
	 
	(c)	 	any Security arising from bankers’ liens or arising by operation of law or under standard
banking terms and conditions;
	 
	(d)	 	any netting or set-off arrangement entered into by any Obligor in the ordinary course of its
banking arrangements for the purpose of netting debit and credit balances of Obligors;
	 
	(e)	 	any Security or Quasi-Security over or affecting any asset acquired by a member of the Group
after the Closing Date if:

	 	(i)	 	the Security or Quasi-Security was not created in contemplation of the
acquisition of that asset by a member of the Group;
	 
	 	(ii)	 	the principal amount secured has not been increased in contemplation of or
since the acquisition of that asset by a member of the Group; and
	 
	 	(iii)	 	the Security or Quasi-Security is removed or discharged within three months
of the date of acquisition of such asset;

	(f)	 	any Security or Quasi-Security arising under any retention of title, hire purchase or
conditional sale arrangement or arrangements having similar effect in respect of goods
supplied to a member of the Group in the ordinary course of trading and on the supplier’s
standard or usual terms and not arising as a result of any default or omission by any member
of the Group;
	 
	(g)	 	any Security or Quasi-Security arising as a consequence of any finance or capital lease
permitted pursuant to paragraph (f) of the definition of “Permitted Financial Indebtedness”;
	 
	(h)	 	any Security created under the Artesian Debentures as at the date of this Agreement
(including, for the avoidance of doubt, under Security required to be created after the date
of this Agreement under the terms of the Artesian Finance Documents);
	 
	(i)	 	any Security in relation to Taxes not yet assessed or, if assessed, not yet due or actively
contested in good faith by appropriate proceedings (and for the payment of which adequate
reserves have been made, or when required in order to pursue such proceedings an adequate bond
has been provided); and
	 
	(j)	 	any Security arising out of judgments with respect to which at the time (i) an appeal or
proceedings for review is actively being prosecuted in good faith and for the payment of which
adequate reserves have been made, or where required in order to pursue such proceedings, an
adequate bond has been provided; and (ii) a stay of

Page 19

 

	 	 	execution shall have been secured (and is still in force) pending such appeal or proceeding
for review.

Permitted Share Issue means:

	(a)	 	an issue of shares by a member of the Group other than the Borrower to its immediate Holding
Company where (if the existing shares of the Subsidiary are the subject of the Transaction
Security) the newly-issued shares also become subject to the Transaction Security on the same
terms; and
	 
	(b)	 	any issue of share capital by the Borrower, paid for in full in cash upon issue and which by
their terms are not redeemable and where shares are of the same class and on the same terms as
those initially issued by the Borrower and such issue does not lead to a Change of Control of
the Borrower and where (if the existing share capital of the Borrower is the subject of the
Transaction Security) the newly-issued share capital also becomes subject to the Transaction
Security on the same terms;

Permitted Tax Disposal means any surrender or disposal of tax credits, losses, relief or allowances
between any members of the Group.

Permitted Transaction means:

	(a)	 	any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Security or
Quasi-Security given, or other transaction arising, under the Finance Documents;
	 
	(b)	 	the solvent liquidation or reorganisation of any member of the Group which is not an Obligor
so long as any payments or assets distributed as a result of such liquidation or
reorganisation are distributed to other members of the Group;
	 
	(c)	 	any insurance or similar transactions entered into by any member of the Group with Mill
Stream Insurance Limited;
	 
	(d)	 	transactions (other than any sale, lease, licence, transfer or other disposal or the granting
or creation of Security or the incurring or permitting to subsist of Financial Indebtedness)
conducted in the ordinary course of trading on arm’s length terms; and
	 
	(e)	 	transactions between any members of the Group and any member of the Topco Group (which is not
a member of the Group), pursuant to which any member of the Group acquires, receives the
surrender or disposal of, tax credits, losses, relief or allowances from or by any member of
the Topco Group (which is not a member of the Group) in respect of which:

	 	(i)	 	the relevant member of the Group receives the benefit of that tax credit,
loss, relief or allowance; and
	 
	 	(ii)	 	that member of the Group receives an indemnity from the transferor company in
an amount equal to the value of the benefit of that tax credit, loss, relief or
allowance (such indemnity becoming payable should the surrender or disposal by the
transferor company be subsequently challenged by H.M. Revenue & Customs).

Qualifying Lender has the meaning given to that term in Clause 14 (Tax gross-up and indemnities).

Page 20

 

Quarter Date means the last day of a Financial Quarter.

Quasi-Security has the meaning given to that term in Clause 23.17 (Negative pledge).

Quotation Day means, in relation to any period for which an interest rate is to be determined the
first day of that period unless market practice differs in the Relevant Interbank Market for
sterling, in which case the Quotation Day will be determined by the Agent in accordance with market
practice in the Relevant Interbank Market (and if quotations would normally be given by leading
banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of
those days).

RAR has the meaning given to that term in Clause 22.1 (Financial definitions).

RAV has the meaning given to that term in Clause 22.1 (Financial definitions).

Receiver means a receiver or receiver and manager or administrative receiver of the whole or any
part of the Charged Property.

Regulatory Authority means each of the Commission of the European Communities, the UK Office of
Fair Trading, the UK Competition Commission, the Secretary of State for the Environment, Food and
Rural Affairs, the Department of Trade and Industry, the Environment Agency, OFWAT, the DWI, the
Greater London Authority or any other governmental department or regulatory authority.

Regulatory Consent means any Authorisation that is or may in the future be required to be obtained
from any Regulatory Authority under the terms of the Instrument of Appointment, or under any
relevant statutory provision or other law or regulation or any undertakings or assurances agreed
with a Regulatory Authority applicable to the activities of the Licensed Undertaking, including,
but not limited, to the Water Act.

Regulatory Restrictions means any restriction which is or may in the future be contained in, or
arise from the terms of the Instrument of Appointment, or any relevant statutory provision or other
law or regulation or any undertakings or assurances agreed with a Regulatory Authority applicable
to the activities of the Licensed Undertaking, including, but not limited, to the Water Act, and
includes any requirement to obtain Regulatory Consent.

Related Fund in relation to a fund (the first fund), means a fund which is managed or advised by
the same investment manager or investment adviser as the first fund or, if it is managed by a
different investment manager or investment adviser, a fund whose investment manager or investment
adviser is an Affiliate of the investment manager or investment adviser of the first fund.

Relevant Interbank Market means the London interbank market.

Relevant Jurisdiction means, in relation to a member of the Group:

	(a)	 	its jurisdiction of incorporation;
	 
	(b)	 	any jurisdiction where any asset subject to or intended to be subject to the Transaction
Security to be created by it is situated;
	 
	(c)	 	any jurisdiction where it conducts its business; and

Page 21

 

	(d)	 	the jurisdiction whose laws govern the perfection of any of the Transaction Security
Documents entered into by it.

Relevant Period has the meaning given to that term in Clause 22.1 (Financial definitions).

Repayment Date means the fifth anniversary of the date of the first Utilisation Date.

Repeating Representations means each of the representations set out in Clause 20.2 (Status) to
Clause 20.7 (Governing law and enforcement), Clause 20.11 (No default), paragraph (f) of Clause
20.12 (No misleading information), Clause 20.13 (Original Financial Statements), Clause 20.19
(Ranking) to Clause 20.21 (Legal and beneficial ownership) and Clause 20.26 (Centre of main
interests and establishments).

Representative means any delegate, agent, manager, administrator, nominee, attorney, trustee or
custodian.

Resignation Letter means a letter substantially in the form set out in Schedule 7 (Form of
Resignation Letter).

Screen Rate means in relation to LIBOR, the British Bankers’ Association Interest Settlement Rate
for the relevant currency and period displayed on the appropriate page of the Reuters screen. If
the agreed page is replaced or service ceases to be available, the Agent may specify another page
or service displaying the appropriate rate after consultation with the Borrower and the Lenders.

Secured Parties means each Finance Party from time to time party to this Agreement, any Receiver or
Delegate.

Security means a mortgage, charge, pledge, lien or other security interest securing any obligation
of any person or any other agreement or arrangement having a similar effect.

Selection Notice means a notice substantially in the form set out in Part B of Schedule 3
(Selection Notice) given in accordance with Clause 11 (Interest Periods) in relation to the
Facility.

Senior Management means each and all of the executive members of the board of directors of the
Borrower, Holdco and the Licensed Undertaking.

Special Administration Order has the meaning given to that term in the Water Act.

Specified Time means a time determined in accordance with Schedule 10 (Timetables).

Sponsor means the Parent and any subsequent successors or assigns or transferees.

Sponsor Affiliate means the Sponsor, each of its Affiliates, any trust of which the Sponsor or any
of its Affiliates is a trustee, any partnership of which the Sponsor or any of its Affiliates is a
partner and any trust, fund or other entity which is managed by, or is under the control of, the
Sponsor or any of its Affiliates provided that any such trust, fund or other entity which has been
established for at least 6 months solely for the purpose of making, purchasing or investing in
loans or debt securities and which is managed or controlled independently from all other trusts,
funds or other entities managed or controlled by the Sponsor or any of its Affiliates which have
been established for the primary or main purpose of investing in the share capital of companies
shall not constitute a Sponsor Affiliate.

Page 22

 

sterling and £ denote the lawful currency from time to time of the United Kingdom.

Subsidiary means a subsidiary within the meaning of section 1159 of the Companies Act 2006.

Subordinated Loan means Financial Indebtedness incurred under paragraph (k) of the definition of
Permitted Financial Indebtedness.

Subordination Agreement means the form of subordination agreement set out in Schedule 13 (Form of
Subordination Agreement) or any other subordination agreement that is in form and substance
satisfactory to the Agent.

Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including
any penalty or interest payable in connection with any failure to pay or any delay in paying any of
the same).

Topco means Cascal N.V..

Topco Guarantee means the guarantee to be entered into between Topco and the Finance Parties in
respect of the Borrower’s obligations under the Finance Documents.

Topco Group means the Topco and its Subsidiaries for the time being.

Total Commitments means the aggregate of the Commitments, being £55,200,000 at the date of this
Agreement.

Transaction Security means the Security created or expressed to be created in favour of the
Security Trustee pursuant to the Transaction Security Documents.

Transaction Security Documents means each of the documents listed as being a Transaction Security
Document in paragraph 2(d) of Part A of Schedule 2 (Conditions precedent to initial Utilisation)
and any document required to be delivered to the Agent under paragraph 13 of Part B of Schedule 2
(Conditions precedent required to be delivered by an Additional Guarantor) together with any other
document entered into by any Obligor creating or expressed to create any Security over all or any
part of its assets in respect of the obligations of any of the Obligors under any of the Finance
Documents.

Transfer Certificate means a certificate substantially in the form set out in Schedule 5 (Form of
 Transfer Certificate) or any other form agreed between the Agent and the Borrower.

Transfer Date means, in relation to an assignment or a transfer, the later of:

	(a)	 	the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer
Certificate; and
	 
	(b)	 	the date on which the Agent executes the relevant Assignment Agreement or Transfer
Certificate.

Transfer Scheme means a Transfer Scheme under section 10 and Schedule 2 to the Water Act.

Page 23

 

Treasury Transactions means any derivative transaction entered into in connection with protection
against or benefit from fluctuation in any rate or price.

Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents.

Utilisation means a Loan.

Utilisation Date means the date of a Utilisation, being the date on which the Loan is to be made.

Utilisation Request means a notice substantially in the relevant form set out in Part A of Schedule
3 (Utilisation Request).

Unused Amount has the meaning given to it in Clause 22.2 (Financial condition).

VAT means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a
similar nature.

Water Act means the Water Industry Act 1991.

Working Capital has the meaning given to that term in Clause 22.1 (Financial definitions).

	1.2	 	Construction
	 
	(a)	 	Unless a contrary indication appears, a reference in this Agreement to:

	 	(i)	 	the Agent, the Arranger, any Finance Party, any Lender, any Obligor, any
Party, any Secured Party, the Security Trustee or any other person shall be construed
so as to include its successors in title, permitted assigns and permitted transferees
and, in the case of the Security Trustee, any person for the time being appointed as
Security Trustee or Security Trustees in accordance with the Finance Documents;
	 
	 	(ii)	 	a document in agreed form is a document which is previously agreed in writing
by or on behalf of the Borrower and the Agent or, if not so agreed, is in the form
specified by the Agent;
	 
	 	(iii)	 	assets includes present and future properties, revenues and rights of every
description;
	 
	 	(iv)	 	a Finance Document or any other agreement or instrument (other than any
Artesian Finance Document (which includes, without limitation, the Artesian Facility
Agreement, the Artesian STID and the Artesian Debentures), any On-Loan Agreement and
the Parent Loan Agreement) is a reference to that Finance Document or other agreement
or instrument as amended, novated, supplemented, extended or restated;
	 
	 	(v)	 	guarantee means (other than in Clause 19 (Guarantee and Indemnity)) any
guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any
obligation, direct or indirect, actual or contingent, to purchase or assume any
indebtedness of any person or to make an investment in or loan to any person or to
purchase assets of any person where, in each case, such

Page 24

 

	 	 	 	obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;
	 
	 	(vi)	 	indebtedness includes any obligation (whether incurred as principal or as
surety) for the payment or repayment of money, whether present or future, actual or
contingent;
	 
	 	(vii)	 	a person includes any individual, firm, company, corporation, government,
state or agency of a state or any association, trust, joint venture, consortium or
partnership (whether or not having separate legal personality);
	 
	 	(viii)	 	a regulation includes any regulation, rule, official directive, request or guideline
(whether or not having the force of law) of any governmental, intergovernmental or
supranational body, agency, department or of any regulatory, self-regulatory or other
authority or organisation;
	 
	 	(ix)	 	a provision of law is a reference to that provision as amended or re-enacted;
and
	 
	 	(x)	 	a time of day is a reference to London time.

	(b)	 	Section, Clause and Schedule headings are for ease of reference only.
	 
	(c)	 	Unless a contrary indication appears, a term used in any other Finance Document or in any
notice given under or in connection with any Finance Document has the same meaning in that
Finance Document or notice as in this Agreement.
	 
	(d)	 	A Default is continuing if it has not been remedied or waived.
	 
	1.3	 	Third party rights
	 
	(a)	 	Unless expressly provided to the contrary in a Finance Document a person who is not a Party
has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to
enforce or enjoy the benefit of any term of this Agreement.
	 
	(b)	 	Notwithstanding any term of any Finance Document, the consent of any person who is not a
Party is not required to rescind or vary this Agreement at any time.

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SECTION 2

THE FACILITY

	2.	 	THE FACILITY
	 
	2.1	 	The Facility

Subject to the terms of this Agreement, the Lenders make available a sterling term loan facility
(to be drawn in one Utilisation) in an aggregate amount equal to the Total Commitments.

	2.2	 	Finance Parties’ rights and obligations

	(a)	 	The obligations of each Finance Party under the Finance Documents are several. Failure by a
Finance Party to perform its obligations under the Finance Documents does not affect the
obligations of any other Party under the Finance Documents. No Finance Party is responsible
for the obligations of any other Finance Party under the Finance Documents.
	 
	(b)	 	The rights of each Finance Party under or in connection with the Finance Documents are
separate and independent rights and any debt arising under the Finance Documents to a Finance
Party from an Obligor shall be a separate and independent debt.
	 
	(c)	 	A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce
its rights under the Finance Documents.

	2.3	 	Obligors’ Agent

	(a)	 	Each Obligor (other than the Borrower) by its execution of this Agreement or an Accession
Deed irrevocably appoints the Borrower to act on its behalf as its agent in relation to the
Finance Documents and irrevocably authorises:

	 	(i)	 	the Borrower on its behalf to supply all information concerning itself
contemplated by this Agreement to the Finance Parties and to give all notices and
instructions, to execute on its behalf any Accession Deed, to make such agreements and
to effect the relevant amendments, supplements and variations capable of being given,
made or effected by any Obligor notwithstanding that they may affect the Obligor,
without further reference to or the consent of that Obligor; and
	 
	 	(ii)	 	each Finance Party to give any notice, demand or other communication to that
Obligor pursuant to the Finance Documents to the Borrower,

	 	 	and in each case the Obligor shall be bound as though the Obligor itself had given the
notices and instructions or executed or made the agreements or effected the amendments,
supplements or variations, or received the relevant notice, demand or other communication.
	 
	(b)	 	Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement,
variation, notice or other communication given or made by the Obligors’ Agent or given to the
Obligors’ Agent under any Finance Document on behalf of another Obligor or in connection with
any Finance Document (whether or not known

Page 26

 

	 	 	to any other Obligor and whether occurring before or after such other Obligor became an
Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if
that Obligor had expressly made, given or concurred with it. In the event of any conflict
between any notices or other communications of the Obligors’ Agent and any other Obligor,
those of the Obligors’ Agent shall prevail.

	3.	 	PURPOSE
	 
	3.1	 	Purpose

The Borrower shall apply all amounts borrowed by it under the Facility towards:

	(a)	 	the making of On-Loans;
	 
	(b)	 	the payment of interest, costs, fees and expenses incurred or to be incurred in connection
with or due under the Finance Documents; and
	 
	(c)	 	the general corporate and working capital purposes of the Group.
	 
	3.2	 	Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to
this Agreement.

	4.	 	CONDITIONS OF UTILISATION
	 
	4.1	 	Condition precedent to the execution of this Agreement

The Lenders will only be obliged to execute this Agreement if, on the date of execution, the Agent
has received a certificate signed by two directors of the Borrower certifying the RAR as at the
date of execution of this Agreement. Such certificate shall be in form and substance satisfactory
to the Agent.

In this Clause 4.1, RAR as at the date of execution of this Agreement means the ratio of Total Net
Debt (as such term is defined in Clause 22.1 (Financial definitions)) as at that date divided by
£140,798,000 (being RAV as at 30 April 2010).

	4.2	 	Initial conditions precedent to Utilisation

The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) in relation to
the Utilisation if on or before the Utilisation Date, the Agent has received all of the documents
and other evidence listed in Part A of Schedule 2 (Conditions precedent to initial Utilisation) in
form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders
promptly upon being so satisfied.

	4.3	 	Further conditions precedent

Subject to Clause 4.2 (Initial conditions precedent to Utilisation), the Lenders will only be
obliged to comply with Clause 5.4 (Lenders’ participation), if on the date of the Utilisation
Request and on the proposed Utilisation Date:

	(a)	 	no Default is continuing or would result from the proposed Utilisation; and

Page 27

 

	(b)	 	in relation to any Utilisation on the Closing Date, all the representations and warranties in
Clause 20 (Representations) to be made by each Obligor are true.

	4.4	 	Maximum number of Utilisations

A Borrower may only deliver one Utilisation Request.

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SECTION 3

UTILISATION

	5.	 	UTILISATION — LOANS
	 
	5.1	 	Delivery of a Utilisation Request

A Borrower may utilise the Facility by delivery to the Agent of a duly completed Utilisation
Request not later than the Specified Time.

	5.2	 	Completion of a Utilisation Request for the Loan

The Utilisation Request for the Loan is irrevocable and will not be regarded as having been duly
completed unless:

	(a)	 	the proposed Utilisation Date is a Business Day within the Availability Period; and
	 
	(b)	 	the proposed Interest Period complies with Clause 11 (Interest Periods).

	5.3	 	Currency and amount
	 
	(a)	 	The currency specified in a Utilisation Request must be sterling.
	 
	(b)	 	The amount of the proposed Utilisation must be an amount equal to the Total Commitments.
	 
	5.4	 	Lenders’ participation
	 
	(a)	 	If the conditions set out in this Agreement have been met each Lender shall make its
participation in the Loan available by the Utilisation Date through its Facility Office.
	 
	(b)	 	The amount of each Lender’s participation in the Loan will be equal to the proportion borne
by its Available Commitment to the Available Facility immediately prior to making the Loan.
	 
	5.5	 	Cancellation of Commitment

The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of
the Availability Period.

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SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

	6.	 	REPAYMENT

	6.1	 	Repayment of the Loan

The Borrower shall repay the Loan in full on the Repayment Date.

	7.	 	ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION
	 
	7.1	 	Illegality

If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its
obligations as contemplated by this Agreement or to fund, issue or maintain its participation in
any Utilisation:

	(a)	 	that Lender, shall promptly notify the Agent upon becoming aware of that event and the Agent
shall notify the Borrower of the same;
	 
	(b)	 	upon the Agent notifying the Borrower, the Commitment of that Lender will be immediately
cancelled; and
	 
	(c)	 	the Borrower shall repay that Lender’s participation in the Utilisations made to the Borrower
on the last day of the Interest Period for each Utilisation occurring after the Agent has
notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered
to the Agent (being no earlier than the last day of any applicable grace period permitted by
law).
	 
	7.2	 	Voluntary cancellation

The Borrower may, if it gives the Agent not less than five Business Days’ (or such shorter period
as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum
amount of £500,000) of the Available Facility. Any cancellation under this Clause 7.2 (Voluntary
cancellation) shall reduce the Commitments of the Lenders rateably under the Facility.

	7.3	 	Voluntary prepayment of the Loan
	 
	(a)	 	The Borrower may, if it gives the Agent not less than five Business Days’ (or such shorter
period as the Majority Lenders may agree) prior notice, prepay the whole or any part of that
Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount
of £500,000 and an integral multiple of £100,000).
	 
	(b)	 	The Loan may only be prepaid after the last day of the Availability Period (or, if earlier,
the day on which the Available Facility is zero).
	 
	7.4	 	Right of cancellation and repayment in relation to a single Lender
	 
	(a)	 	If:

Page 30

 

	 	(i)	 	any sum payable to any Lender by an Obligor is required to be increased under
paragraph (c) of Clause 14.2 (Tax gross-up); or
	 
	 	(ii)	 	any Lender claims indemnification from an Obligor under Clause 14.3 (Tax
indemnity) or Clause 15.1 (Increased costs),

	 	 	the Borrower may, whilst the circumstance giving rise to the requirement for that increase
or indemnification continues, give the Agent notice (if such circumstances relate to a
Lender) of cancellation of the Commitment of that Lender and its intention to procure the
repayment of that Lender’s participation in the Utilisation.
	 
	(b)	 	On receipt of a notice referred to in paragraph (a) above in relation to a Lender, the
Commitment of that Lender shall immediately be reduced to zero.
	 
	(c)	 	On the last day of each Interest Period which ends after the Borrower has given notice under
paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the
Borrower in that notice), the Borrower shall repay that Lender’s participation in the
Utilisation together with all interest and other amounts accrued under the Finance Documents.
	 
	7.5	 	Right of cancellation in relation to a Defaulting Lender
	 
	(a)	 	If any Lender becomes a Defaulting Lender, the Borrower may, at any time whilst the Lender
continues to be a Defaulting Lender, give the Agent five Business Days’ notice of cancellation
of each Available Commitment of that Lender.
	 
	(b)	 	On the notice referred to in paragraph (a) above becoming effective, each Available
Commitment of the Defaulting Lender shall immediately be reduced to zero.
	 
	(c)	 	The Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a)
above, notify all the Lenders.
	 
	8.	 	MANDATORY PREPAYMENT
	 
	8.1	 	Exit
	 
	(a)	 	For the purpose of this Clause 8.1:
	 
	 	 	Flotation means:

	 	(i)	 	a successful application being made for the admission of any part of the
share capital of any member of the Group or the Parent to the Official List maintained
by the FSA and the admission of any part of the share capital of any member of the
Group to trading on the London Stock Exchange plc; or
	 
	 	(ii)	 	the grant of permission to deal in any part of the issued share capital of
any member of the Group or the Parent on the Alternative Investment Market or the PLUS
market (formerly Ofex) or on any recognised investment exchange (as that term is used
in the Financial Services and Markets Act 2000) or in or on any exchange or market
replacing the same or any other exchange or market in any country.

	 	 	FSA means the Financial Services Authority acting in its capacity as the competent
authority for the purposes of Part VI of the Financial Services and Markets Act 2000.

Page 31

 

	 	 	Net Flotation Proceeds means the proceeds of a Flotation (net of any Taxes, reasonable
fees, costs and expenses (including, without limitation, legal fees) incurred in connection
therewith).
	 
	(b)	 	Upon the occurrence of any Flotation which does not otherwise constitute a Change of Control,
the Borrower shall apply 75% per cent. of the Net Flotation Proceeds in prepayment of the Loan
at the end of the then current Interest Period.
	 
	(c)	 	Upon the occurrence of:

	 	(i)	 	a Change of Control; or
	 
	 	(ii)	 	the sale of all or substantially all of the assets of the Group whether in a
single transaction or a series of related transactions,

	 	 	the Facility will be cancelled and all the outstanding Utilisations, together with accrued
interest, and all other amounts accrued under the Finance Documents, shall become
immediately due and payable.

	9.	 	RESTRICTIONS
	 
	9.1	 	Notices of cancellation or prepayment

Any notice of cancellation, prepayment, authorisation or other election given by any Party under
Clause 7 (Illegality, voluntary prepayment and cancellation), shall (subject to the terms of that
Clause) be irrevocable and, unless a contrary indication appears in this Agreement, shall specify
the date or dates upon which the relevant cancellation or prepayment is to be made and the amount
of that cancellation or prepayment.

	9.2	 	Interest and other amounts

Any prepayment under this Agreement shall be made together with accrued interest on the amount
prepaid and, subject to any Break Costs, without premium or penalty.

	9.3	 	No reborrowing of Facility

No Borrower may reborrow any part of the Facility which is prepaid.

	9.4	 	Prepayment in accordance with Agreement

No Borrower shall repay or prepay all or any part of the Utilisation or cancel all or any part of
the Commitments except at the times and in the manner expressly provided for in this Agreement.

	9.5	 	No reinstatement of Commitments

No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

	9.6	 	Agent’s receipt of Notices

If the Agent receives a notice under Clause 7 (Illegality, voluntary prepayment and cancellation),
it shall promptly forward a copy of that notice or election to either the Borrower or the affected
Lender, as appropriate.

Page 32

 

	9.7	 	Effect of Repayment and Prepayment on Commitments

If all or part of the Loan is repaid or prepaid and is not available for redrawing, an amount of
the Commitments (equal to the amount of the Utilisation which is repaid or prepaid) in respect of
the Facility will be deemed to be cancelled on the date of repayment or prepayment. Any
cancellation under this Clause 9.7 (Effect of Repayment and Prepayment on Commitments) shall reduce
the Commitments of the Lenders rateably under the Facility.

Page 33

 

SECTION 5

COSTS OF UTILISATION

	10.	 	INTEREST
	 
	10.1	 	Calculation of interest

The rate of interest on the Loan for each Interest Period is the percentage rate per annum which is
the aggregate of the applicable:

	(a)	 	Margin;
	 
	(b)	 	LIBOR; and
	 
	(c)	 	Mandatory Cost, if any.
	 
	10.2	 	Payment of interest

The Borrower shall pay accrued interest on the Loan on the last day of each Interest Period (and,
if the Interest Period is longer than six Months, on the dates falling at six Monthly intervals
after the first day of the Interest Period).

	10.3	 	Default interest
	 
	(a)	 	If an Obligor fails to pay any amount payable by it under a Finance Document on its due date,
interest shall accrue on the overdue amount from the due date up to the date of actual payment
(both before and after judgment) at a rate which, subject to paragraph (b) below, is 1 per
cent. higher than the rate which would have been payable if the overdue amount had, during the
period of non-payment, constituted a Utilisation in the currency of the overdue amount for
successive Interest Periods, each of a duration selected by the Agent (acting reasonably).
Any interest accruing under this Clause 10.3 (Default interest) shall be immediately payable
by the Obligor on demand by the Agent.
	 
	(b)	 	If any overdue amount consists of all or part of a Utilisation which became due on a day
which was not the last day of an Interest Period relating to that Utilisation:

	 	(i)	 	the first Interest Period for that overdue amount shall have a duration equal
to the unexpired portion of the current Interest Period relating to that Loan; and
	 
	 	(ii)	 	the rate of interest applying to the overdue amount during that first
Interest Period shall be 1 per cent. higher than the rate which would have applied if
the overdue amount had not become due.

	(c)	 	Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue
amount at the end of each Interest Period applicable to that overdue amount but will remain
immediately due and payable.
	 
	10.4	 	Notification of rates of interest

The Agent shall promptly notify the Lenders and the relevant Borrower of the determination of a
rate of interest under this Agreement.

Page 34

 

	11.	 	INTEREST PERIODS
	 
	11.1	 	Selection of Interest Periods and Terms
	 
	(a)	 	The Borrower may select an Interest Period for the Loan in the Utilisation Request and after
it has been borrowed in a Selection Notice.
	 
	(b)	 	Each Selection Notice is irrevocable and must be delivered to the Agent by the Borrower not
later than the Specified Time.
	 
	(c)	 	If the Borrower fails to deliver a Selection Notice to the Agent in accordance with paragraph
(b) above, the relevant Interest Period will be three Months.
	 
	(d)	 	Subject to this Clause 11 (Interest Periods), a Borrower may select an Interest Period of
three or six Months or any other period agreed between the Borrower and the Agent (acting on
the instructions of all the Lenders).
	 
	(e)	 	An Interest Period for the Loan shall not extend beyond the Repayment Date.
	 
	(f)	 	The Interest Period for the Loan shall start on the Utilisation Date or (if already made) on
the last day of its preceding Interest Period.
	 
	11.2	 	Non-Business Days

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest
Period will instead end on the next Business Day in that calendar month (if there is one) or the
preceding Business Day (if there is not).

	12.	 	CHANGES TO THE CALCULATION OF INTEREST
	 
	12.1	 	Absence of quotations

Subject to Clause 12.2 (Market disruption), if LIBOR is to be determined by reference to the Base
Reference Banks but a Base Reference Bank does not supply a quotation by the Specified Time on the
Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the
remaining Base Reference Banks.

	12.2	 	Market disruption
	 
	(a)	 	If a Market Disruption Event occurs in relation to the Loan for any Interest Period, then the
rate of interest on each Lender’s share of that Loan for the Interest Period shall be the
percentage rate per annum which is the sum of:

	 	(i)	 	the Margin;
	 
	 	(ii)	 	the rate notified to the Agent by that Lender (and the Agent shall promptly
notify the Borrower of the same) as soon as practicable and in any event prior to the
date on which interest is due to be paid in respect of that Interest Period, to be
that which expresses as a percentage rate per annum the cost to that Lender of funding
its participation in that Loan from whatever source it may reasonably select; and
	 
	 	(iii)	 	the Mandatory Cost, if any, applicable to that Lender’s participation in the
Loan.

Page 35

 

	(b)	 	If:

	 	(i)	 	the percentage rate per annum notified by a Lender pursuant to paragraph
(a)(ii) above is less than LIBOR; or
	 
	 	(ii)	 	a Lender has not notified the Agent of a percentage rate per annum pursuant
to paragraph (a)(ii) above,

	 	 	the cost to that Lender of funding its participation in that Loan for that Interest Period
shall be deemed, for the purposes of paragraph (a) above, to be LIBOR.

	(c)	 	In this Agreement:
	 
	 	 	Market Disruption Event means at or about noon on the Quotation Day for the relevant
Interest Period the Screen Rate is not available and none or only one of the Base Reference
Banks supplies a rate to the Agent to determine LIBOR for the relevant currency and
Interest Period.
	 
	12.3	 	Alternative basis of interest or funding
	 
	(a)	 	If a Market Disruption Event occurs, the Agent shall promptly notify the Borrower and, if the
Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations
(for a period of not more than thirty days) with a view to agreeing a substitute basis for
determining the rate of interest.
	 
	(b)	 	Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of
all the Lenders and the Borrower, be binding on all Parties.
	 
	12.4	 	Break Costs
	 
	(a)	 	Each Borrower shall, within three Business Days of demand by a Finance Party, pay to that
Finance Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being
paid by that Borrower on a day other than the last day of an Interest Period for that Loan or
Unpaid Sum.
	 
	(b)	 	Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a
certificate confirming the amount of its Break Costs for any Interest Period in which they
accrue.
	 
	13.	 	FEES
	 
	13.1	 	Commitment fee
	 
	(a)	 	The Borrower shall pay to the Agent (for the account of each Lender) a fee in sterling
computed at the rate of 2.0 per cent. per annum on that Lender’s Available Commitment for the
Availability Period;
	 
	(b)	 	The accrued commitment fee is payable on the last day of the Availability Period and on the
cancelled amount of the relevant Lender’s Commitment at the time the cancellation is
effective.
	 
	(c)	 	No commitment fee is payable to the Agent (for the account of a Lender) on any Available
Commitment of that Lender for any day on which that Lender is a Defaulting Lender.

Page 36

 

	13.2	 	Arrangement fee

The Borrower shall pay to the Arranger an arrangement fee in the amount and at the times agreed in
a Fee Letter.

	13.3	 	Agency fee

The Borrower shall pay to the Agent (for its own account) an agency fee in the amount and at the
times agreed in a Fee Letter.

	13.4	 	Security Trustee fee

The Borrower shall pay to the Security Trustee (for its own account) the Security Trustee fee in
the amount and at the times agreed in a Fee Letter.

Page 37

 

SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

	14.	 	TAX GROSS UP AND INDEMNITIES
	 
	14.1	 	Definitions

In this Agreement:

Protected Party means a Finance Party which is or will be subject to any liability or required to
make any payment for or on account of Tax in relation to a sum received or receivable (or any sum
deemed for the purposes of Tax to be received or receivable) under a Finance Document.

Qualifying Lender means:

	(a)	 	a Lender (other than a Lender within paragraph (ii) below) which is beneficially entitled to
interest payable to that Lender in respect of an advance under a Finance Document and is:

	 	(i)	 	a Lender:

	 	(A)	 	which is a bank (as defined for the purpose of section 879
of the ITA) making an advance under a Finance Document; or
	 
	 	(B)	 	in respect of an advance made under a Finance Document by a
person that was a bank (as defined for the purpose of section 879 of the ITA)
at the time that that advance was made,

	 	 	 	and which is within the charge to United Kingdom corporation tax as respects any
payments of interest made in respect of that advance;

	 	(ii)	 	a Lender which is:

	 	(A)	 	a company resident in the United Kingdom for United Kingdom
tax purposes;
	 
	 	(B)	 	a partnership each member of which is:

	 	(I)	 	a company so resident in the United
Kingdom; or
	 
	 	(II)	 	a company not so resident in the United
Kingdom which carries on a trade in the United Kingdom through a
permanent establishment and which brings into account in computing
its chargeable profits (within the meaning of section 19 of the CTA)
the whole of any share of interest payable in respect of that advance
that falls to it by reason of Part 17 of the CTA;

	 	(C)	 	a company not so resident in the United Kingdom which
carries on a trade in the United Kingdom through a permanent establishment
and which brings into account interest payable in respect of that advance

Page 38

 

	 	 	 	in computing the chargeable profits (within the meaning of section 19 of
the CTA) of that company; or

	 	(iii)	 	a Treaty Lender; or

	(b)	 	a building society (as defined for the purposes of section 880 of the ITA) making an advance
under a Finance Document).

Tax Confirmation means a confirmation by a Lender that the person beneficially entitled to interest
payable to that Lender in respect of an advance under a Finance Document is either:

	(a)	 	a company resident in the United Kingdom for United Kingdom tax purposes;
	 
	(b)	 	a partnership each member of which is:

	 	(i)	 	a company so resident in the United Kingdom; or
	 
	 	(ii)	 	a company not so resident in the United Kingdom which carries on a trade in
the United Kingdom through a permanent establishment and which brings into account in
computing its chargeable profits (within the meaning of section 19 of the CTA) the
whole of any share of interest payable in respect of that advance that falls to it by
reason of Part 17 of the CTA; or

	(c)	 	a company not so resident in the United Kingdom which carries on a trade in the United
Kingdom through a permanent establishment and which brings into account interest payable in
respect of that advance in computing the chargeable profits (within the meaning of section 19
of the CTA) of that company.

Tax Credit means a credit against, relief or remission for, or repayment of, any Tax.

Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a
Finance Document.

Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under
Clause 14.2 (Tax gross-up) or a payment under Clause 14.3 (Tax indemnity).

Treaty Lender means a Lender which:

	(a)	 	is treated as a resident of a Treaty State for the purposes of the Treaty; and
	 
	(b)	 	does not carry on a business in the United Kingdom through a permanent establishment with
which that Lender’s participation in the Loan is effectively connected.

Treaty State means a jurisdiction having a double taxation agreement (a “Treaty”) with the United
Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on
interest.

UK Non-Bank Lender means where a Lender becomes a Party after the day on which this Agreement is
entered into, a Lender which gives a Tax Confirmation in the Assignment Agreement or Transfer
Certificate which it executes on becoming a Party.

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Unless a contrary indication appears, in this Clause 14 (Tax Gross Up And Indemnities) a reference
to determines or determined means a determination made in the absolute discretion of the person
making the determination.

	14.2	 	Tax gross-up
	 
	(a)	 	Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax
Deduction is required by law.
	 
	(b)	 	The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or
that there is any change in the rate or the basis of a Tax Deduction) notify the Agent
accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a
payment payable to that Lender. If the Agent receives such notification from a Lender it
shall notify the Borrower and that Obligor.
	 
	(c)	 	If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due
from that Obligor shall be increased to an amount which (after making any Tax Deduction)
leaves an amount equal to the payment which would have been due if no Tax Deduction had been
required.
	 
	(d)	 	A payment shall not be increased under paragraph (c) above by reason of a Tax Deduction on
account of Tax imposed by the United Kingdom, if on the date on which the payment falls due:

	 	(i)	 	the payment could have been made to the relevant Lender without a Tax
Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is
not or has ceased to be a Qualifying Lender other than as a result of any change after
the date it became a Lender under this Agreement in (or in the interpretation,
administration, or application of) any law or Treaty or any published practice or
published concession of any relevant taxing authority; or
	 
	 	(ii)	 	the relevant Lender is a Qualifying Lender solely by virtue of paragraph
(a)(ii) of the definition of Qualifying Lender and:

	 	(A)	 	an officer of H.M. Revenue & Customs has given (and not
revoked) a direction (a Direction) under section 931 of the ITA which relates
to the payment and that Lender has received from the Obligor making the
payment or from the Company a certified copy of that Direction; and
	 
	 	(B)	 	the payment could have been made to the Lender without any
Tax Deduction if that Direction had not been made; or

	 	(iii)	 	the relevant Lender is a Qualifying Lender solely by virtue of paragraph
(a)(ii) of the definition of Qualifying Lender and:

	 	(A)	 	the relevant Lender has not given a Tax Confirmation to the
Borrower; and
	 
	 	(B)	 	the payment could have been made to the Lender without any
Tax Deduction if the Lender had given a Tax Confirmation to the Borrower, on
the basis that the Tax Confirmation would have enabled the Borrower to have
formed a reasonable belief that the

Page 40

 

	 	 	 	payment was an “excepted payment” for the purpose of section 930 of the
ITA; or

	 	(iv)	 	the relevant Lender is a Treaty Lender and the Obligor making the payment is
able to demonstrate that the payment could have been made to the Lender without the
Tax Deduction had that Lender complied with its obligations under paragraph (g) below.

	(e)	 	If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction
and any payment required in connection with that Tax Deduction within the time allowed and in
the minimum amount required by law.
	 
	(f)	 	Within thirty days of making either a Tax Deduction or any payment required in connection
with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for
the Finance Party entitled to the payment a statement under section 975 of the ITA or other
evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or
(as applicable) any appropriate payment paid to the relevant taxing authority.
	 
	(g)	 	A Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is
entitled shall co-operate in completing any procedural formalities necessary for that Obligor
to obtain authorisation to make that payment without a Tax Deduction.
	 
	14.3	 	Tax indemnity
	 
	(a)	 	The Borrower shall (within three Business Days of demand by the Agent) pay to a Protected
Party an amount equal to the loss, liability or cost which that Protected Party determines
will be or has been (directly or indirectly) suffered for or on account of Tax by that
Protected Party in respect of a Finance Document.
	 
	(b)	 	Paragraph (a) above shall not apply:

	 	(i)	 	with respect to any Tax assessed on a Finance Party:

	 	(A)	 	under the law of the jurisdiction in which that Finance
Party is incorporated or, if different, the jurisdiction (or jurisdictions)
in which that Finance Party is treated as resident for tax purposes; or
	 
	 	(B)	 	under the law of the jurisdiction in which that Finance
Party’s Facility Office is located in respect of amounts received or
receivable in that jurisdiction,

	 	 	 	if that Tax is imposed on or calculated by reference to the net income received or
receivable (but not any sum deemed to be received or receivable) by that Finance
Party; or

	 	(ii)	 	to the extent a loss, liability or cost:

	 	(A)	 	is compensated for by an increased payment under Clause
14.2 (Tax gross-up); or
	 
	 	(B)	 	would have been compensated for by an increased payment
under Clause 14.2 (Tax gross-up) but was not so compensated solely

Page 41

 

	 	 	 	because one of the exclusions in paragraph (d) of Clause 14.2 (Tax
gross-up) applied.

	(c)	 	A Protected Party making, or intending to make a claim under paragraph (a) above shall
promptly notify the Agent of the event which will give, or has given, rise to the claim,
following which the Agent shall notify the Borrower.
	 
	(d)	 	A Protected Party shall, on receiving a payment from an Obligor under this Clause 14.3 (Tax
indemnity), notify the Agent.
	 
	14.4	 	Tax Credit

If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

	(a)	 	a Tax Credit is attributable either to an increased payment of which that Tax Payment forms
part or to that Tax Payment; and
	 
	(b)	 	that Finance Party has obtained, utilised and retained that Tax Credit,

the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave
it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment
not been required to be made by the Obligor.

	14.5	 	Lender Status Confirmation

Each Lender which becomes a Party to this Agreement after the date of this Agreement shall
indicate, in the Transfer Certificate, Assignment Agreement which it executes on becoming a Party,
and for the benefit of the Agent and without liability to any Obligor, which of the following
categories it falls in:

	(a)	 	not a Qualifying Lender;
	 
	(b)	 	a Qualifying Lender (other than a Treaty Lender); or
	 
	(c)	 	a Treaty Lender.

If a New Lender fails to indicate its status in accordance with this Clause 14.5 (Lender Status
Confirmation) then such New Lender shall be treated for the purposes of this Agreement (including
by each Obligor) as if it is not a Qualifying Lender until such time as it notifies the Agent which
category applies (and the Agent, upon receipt of such notification, shall inform the Borrower).
For the avoidance of doubt, a Transfer Certificate or Assignment Agreement shall not be invalidated
by any failure of a Lender to comply with this Clause 14.5 (Lender Status Confirmation).

	14.6	 	Stamp taxes

The Borrower shall pay and, within three Business Days of demand, indemnify each Secured Party and
Arranger against any cost, loss or liability that Secured Party or Arranger incurs in relation to
all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

Page 42

 

	14.7	 	VAT
	 
	(a)	 	All amounts set out or expressed in a Finance Document to be payable by any Party to a
Finance Party which (in whole or in part) constitute the consideration for a supply or
supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on
such supply or supplies, and accordingly, subject to paragraph (b) below, if VAT is or becomes
chargeable on any supply made by any Finance Party to any Party under a Finance Document, that
Party shall pay to the Finance Party (in addition to and at the same time as paying any other
consideration for such supply) an amount equal to the amount of such VAT (and such Finance
Party shall promptly provide an appropriate VAT invoice to such Party).
	 
	(b)	 	If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier) to any
other Finance Party (the Recipient) under a Finance Document, and any Party other than the
Recipient (the Subject Party) is required by the terms of any Finance Document to pay an
amount equal to the consideration for such supply to the Supplier (rather than being required
to reimburse the Recipient in respect of that consideration), such Party shall also pay to the
Supplier (in addition to and at the same time as paying such amount) an amount equal to the
amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to
any credit or repayment obtained by the Recipient from the relevant tax authority which the
Recipient reasonably determines is in respect of such VAT.
	 
	(c)	 	Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any
cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance
Party for the full amount of such cost or expense, including such part thereof as represents
VAT, save to the extent that such Finance Party reasonably determines that it is entitled to
credit or repayment in respect of such VAT from the relevant tax authority.
	 
	(d)	 	Any reference in this Clause 14.7 (VAT) to any Party shall, at any time when such Party is
treated as a member of a group for VAT purposes, include (where appropriate and unless the
context otherwise requires) a reference to the representative member of such group at such
time (the term “representative member” to have the same meaning as in the Value Added Tax Act
1994).
	 
	15.	 	INCREASED COSTS
	 
	15.1	 	Increased costs
	 
	(a)	 	Subject to Clause 15.3 (Exceptions) the Borrower shall, within three Business Days of a
demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs
incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of
or any change in (or in the interpretation, administration or application of) any law or
regulation or (ii) compliance with any law or regulation made after the date of this
Agreement.
	 
	(b)	 	In this Agreement Increased Costs means:

	 	(i)	 	a reduction in the rate of return from a Facility or on a Finance Party’s (or
its Affiliate’s) overall capital;
	 
	 	(ii)	 	an additional or increased cost; or

Page 43

 

	 	(iii)	 	a reduction of any amount due and payable under any Finance Document,

	 	 	which is incurred or suffered by a Finance Party or any of its Affiliates to the extent
that it is attributable to that Finance Party having entered into its Commitment or funding
or performing its obligations under any Finance Document.

	15.2	 	Increased cost claims
	 
	(a)	 	A Finance Party intending to make a claim pursuant to Clause 15.1 (Increased Costs) shall
notify the Agent of the event giving rise to the claim, following which the Agent shall
promptly notify the Borrower.
	 
	(b)	 	Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a
certificate confirming the amount of its Increased Costs.
	 
	15.3	 	Exceptions
	 
	(a)	 	Clause 15.1 (Increased Costs) does not apply to the extent any Increased Cost is:

	 	(i)	 	attributable to a Tax Deduction required by law to be made by an Obligor;
	 
	 	(ii)	 	compensated for by Clause 14.3 (Tax indemnity) (or would have been
compensated for under Clause 14.3 (Tax indemnity) but was not so compensated solely
because any of the exclusions in paragraph (b) of Clause 14.3 (Tax indemnity)
applied);
	 
	 	(iii)	 	compensated for by the payment of the Mandatory Cost; or
	 
	 	(iv)	 	attributable to the wilful breach by the relevant Finance Party or its
Affiliates of any law or regulation.

	(b)	 	In this Clause 15.3 (Exceptions) reference to a Tax Deduction has the same meaning given to
the term in Clause 14.1 (Definitions).
	 
	16.	 	OTHER INDEMNITIES
	 
	16.1	 	Currency indemnity
	 
	(a)	 	If any sum due from an Obligor under the Finance Documents (a Sum), or any order, judgment or
award given or made in relation to a Sum, has to be converted from the currency (the First
Currency) in which that Sum is payable into another currency (the Second Currency) for the
purpose of:

	 	(i)	 	making or filing a claim or proof against that Obligor; or
	 
	 	(ii)	 	obtaining or enforcing an order, judgment or award in relation to any
litigation or arbitration proceedings,

	 	 	that Obligor shall as an independent obligation, within three Business Days of demand,
indemnify the Arranger and each other Secured Party to whom that Sum is due against any
cost, loss or liability arising out of or as a result of the conversion including any
discrepancy between (A) the rate of exchange used to convert that Sum from the First
Currency into the Second Currency and (B) the rate or rates of exchange available to that
person at the time of its receipt of that Sum.

Page 44

 

	(b)	 	Each Obligor waives any right it may have in any jurisdiction to pay any amount under the
Finance Documents in a currency or currency unit other than that in which it is expressed to
be payable.
	 
	16.2	 	Other indemnities

The Borrower shall (or shall procure that an Obligor will), within three Business Days of demand,
indemnify the Arranger and each other Secured Party against any cost, loss or liability incurred by
it as a result of:

	(a)	 	the occurrence of any Event of Default;
	 
	(b)	 	a failure by an Obligor to pay any amount due under a Finance Document on its due date,
including without limitation, any cost, loss or liability arising as a result of Clause 31
(Sharing among the Finance Parties);
	 
	(c)	 	funding, or making arrangements to fund, its participation in a Utilisation requested by a
Borrower in a Utilisation Request but not made by reason of the operation of any one or more
of the provisions of this Agreement (other than by reason of default or negligence by that
Finance Party alone); or
	 
	(d)	 	a Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice of
prepayment given by a Borrower.
	 
	16.3	 	Indemnity to the Agent

The Borrower shall promptly indemnify the Agent against any cost, loss or liability incurred by the
Agent (acting reasonably) as a result of:

	(a)	 	investigating any event which it reasonably believes is a Default; or
	 
	(b)	 	acting or relying on any notice, request or instruction which it reasonably believes to be
genuine, correct and appropriately authorised.
	 
	16.4	 	Indemnity to the Security Trustee
	 
	(a)	 	Each Obligor shall promptly indemnify the Security Trustee and every Receiver and Delegate
against any cost, loss or liability incurred by any of them as a result of:

	 	(i)	 	the taking, holding, protection or enforcement of the Transaction Security,
	 
	 	(ii)	 	the exercise of any of the rights, powers, discretions and remedies vested in
the Security Trustee and each Receiver and Delegate by the Finance Documents or by
law; or
	 
	 	(iii)	 	any default by any Obligor in the performance of any of the obligations
expressed to be assumed by it in the Finance Documents.

	(b)	 	The Security Trustee may, in priority to any payment to the Secured Parties, indemnify itself
out of the Charged Property in respect of, and pay and retain, all sums necessary to give
effect to the indemnity in this Clause 16.4 (Indemnity to the Security Trustee) and shall have
a lien on the Transaction Security and the proceeds of the enforcement of the Transaction
Security for all monies payable to it.

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	17.	 	MITIGATION BY THE LENDERS
	 
	17.1	 	Mitigation
	 
	(a)	 	Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to
mitigate any circumstances which arise and which would result in any amount becoming payable
under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 14 (Tax
gross-up and indemnities) or Clause 15 (Increased Costs) or paragraph 3 of Schedule 4
(Mandatory Cost formula) including (but not limited to) transferring its rights and
obligations under the Finance Documents to another Affiliate or Facility Office.
	 
	(b)	 	Paragraph (a) above does not in any way limit the obligations of any Obligor under the
Finance Documents.
	 
	17.2	 	Limitation of liability
	 
	(a)	 	The Borrower shall promptly indemnify each Finance Party for all costs and expenses
reasonably incurred by that Finance Party as a result of steps taken by it under Clause 17.1
(Mitigation).
	 
	(b)	 	A Finance Party is not obliged to take any steps under Clause 17.1 (Mitigation) if, in the
opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
	 
	18.	 	COSTS AND EXPENSES
	 
	18.1	 	Transaction expenses

The Borrower shall promptly on demand pay the Agent, the Arranger and the Security Trustee the
amount of all costs and expenses (including legal fees) reasonably incurred by any of them (and, in
the case of the Security Trustee, by any Receiver or Delegate) in connection with the negotiation,
preparation, printing, execution and perfection of:

	(a)	 	this Agreement and any other documents referred to in this Agreement and the Transaction
Security; and
	 
	(b)	 	any other Finance Documents executed after the date of this Agreement.
	 
	18.2	 	Amendment costs

If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant
to Clause 32.10 (Change of currency), the Borrower shall, within three Business Days of demand,
reimburse each of the Agent and the Security Trustee for the amount of all costs and expenses
(including legal fees) reasonably incurred by the Agent and the Security Trustee (and, in the case
of the Security Trustee, by any Receiver or Delegate) in responding to, evaluating, negotiating or
complying with that request or requirement.

	18.3	 	Security Trustee’s ongoing costs
	 
	(a)	 	In the event of (i) a Default or (ii) the Security Trustee considering it necessary or
expedient or (iii) the Security Trustee being requested by an Obligor or the Majority Lenders
to undertake duties which the Security Trustee and the Borrower agree to be of an exceptional
nature and/or outside the scope of the normal duties of the Security

Page 46

 

	 	 	Trustee under the Finance Documents, the Borrower shall pay to the Security Trustee any
additional remuneration that may be agreed between them.

	(b)	 	If the Security Trustee and the Borrower fail to agree upon the nature of the duties or upon
any additional remuneration, that dispute shall be determined by an investment bank (acting as
an expert and not as an arbitrator) selected by the Security Trustee and approved by the
Borrower or, failing approval, nominated (on the application of the Security Trustee) by the
President for the time being of the Law Society of England and Wales (the costs of the
nomination and of the investment bank being payable by the Borrower) and the determination of
any investment bank shall be final and binding upon the parties to this Agreement.
	 
	18.4	 	Enforcement and preservation costs

The Borrower shall, within three Business Days of demand, pay (but avoiding any double recovery) to
the Arranger and each other Secured Party the amount of all costs and expenses (including legal
fees) incurred by it in connection with the enforcement of or the preservation of any rights under
any Finance Document and the Transaction Security and any proceedings instituted by or against the
Security Trustee as a consequence of taking or holding the Transaction Security or enforcing these
rights.

Page 47

 

SECTION 7

GUARANTEE

19. GUARANTEE AND INDEMNITY

19.1 Guarantee and indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:

	(a)	 	guarantees to each Finance Party punctual performance by each other Obligor of all that
Obligor’s obligations under the Finance Documents;
	 
	(b)	 	undertakes with each Finance Party that whenever another Obligor does not pay any amount when
due under or in connection with any Finance Document, that Guarantor shall immediately on
demand pay that amount as if it was the principal obligor; and
	 
	(c)	 	agrees with each Finance Party that if any obligation guaranteed by it is or becomes
unenforceable, invalid or illegal, it will, as an independent and primary obligation,
indemnify that Finance Party immediately on demand against any cost, loss or liability it
incurs as a result of an Obligor not paying any amount which would, but for such
unenforceability, invalidity or illegality, have been payable by it under any Finance Document
on the date when it would have been due. The amount payable by a Guarantor under this
indemnity will not exceed the amount it would have had to pay under this Clause 19 (Guarantee
and indemnity) if the amount claimed had been recoverable on the basis of a guarantee.

19.2 Continuing Guarantee

This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by
any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in
whole or in part.

19.3 Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or
any security for those obligations or otherwise) is made by a Finance Party in whole or in part on
the basis of any payment, security or other disposition which is avoided or must be restored in
insolvency, liquidation, administration or otherwise, without limitation, then the liability of
each Guarantor under this Clause 19 (Guarantee and indemnity) will continue or be reinstated as if
the discharge, release or arrangement had not occurred.

19.4 Waiver of defences

The obligations of each Guarantor under this Clause 19 (Guarantee and indemnity) will not be
affected by an act, omission, matter or thing which, but for this Clause 19, (Guarantee and
indemnity) would reduce, release or prejudice any of its obligations under this Clause 19
(Guarantee and indemnity) (without limitation and whether or not known to it or any Finance Party)
including:

	(a)	 	any time, waiver or consent granted to, or composition with, any Obligor or other person;

Page 48

 

	(b)	 	the release of any other Obligor or any other person under the terms of any composition or
arrangement with any creditor of any member of the Group;
	 
	(c)	 	the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to
perfect, take up or enforce, any rights against, or security over assets of, any Obligor or
other person or any non-presentation or non-observance of any formality or other requirement
in respect of any instrument or any failure to realise the full value of any security;
	 
	(d)	 	any incapacity or lack of power, authority or legal personality of or dissolution or change
in the members or status of an Obligor or any other person;
	 
	(e)	 	any amendment, novation, supplement, extension restatement (however fundamental and whether
or not more onerous) or replacement of a Finance Document or any other document or security
including, without limitation, any change in the purpose of, any extension of or increase in
any facility or the addition of any new facility under any Finance Document or other document
or security;
	 
	(f)	 	any unenforceability, illegality or invalidity of any obligation of any person under any
Finance Document or any other document or security; or
	 
	(g)	 	any insolvency or similar proceedings.

19.5 Guarantor Intent

Without prejudice to the generality of Clause 19.4 (Waiver of defences), each Guarantor expressly
confirms that it intends that this guarantee shall extend from time to time to any (however
fundamental) variation, increase, extension or addition of or to any of the Finance Documents
and/or any facility or amount made available under any of the Finance Documents for the purposes of
or in connection with any of the following: business acquisitions of any nature; increasing
working capital; enabling investor distributions to be made; carrying out restructurings;
refinancing existing facilities; refinancing any other indebtedness; making facilities available to
new borrowers; any other variation or extension of the purposes for which any such facility or
amount might be made available from time to time; and any fees, costs and/or expenses associated
with any of the foregoing.

19.6 Immediate recourse

Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or
agent on its behalf) to proceed against or enforce any other rights or security or claim payment
from any person before claiming from that Guarantor under this Clause 19 (Guarantee and indemnity).
This waiver applies irrespective of any law or any provision of a Finance Document to the
contrary.

19.7 Appropriations

Until all amounts which may be or become payable by the Obligors under or in connection with the
Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent
on its behalf) may:

	(a)	 	refrain from applying or enforcing any other moneys, security or rights held or received by
that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or
apply and enforce the same in such manner and order as it sees fit

Page 49

 

	 	 	(whether against those amounts or otherwise) and no Guarantor shall be entitled to the
benefit of the same; and
	 
	(b)	 	hold in an interest-bearing suspense account any moneys received from any Guarantor or on
account of any Guarantor’s liability under this Clause 19 (Guarantee and indemnity).

19.8 Deferral of Guarantors’ rights

Until all amounts which may be or become payable by the Obligors under or in connection with the
Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no
Guarantor will exercise any rights which it may have by reason of performance by it of its
obligations under the Finance Documents or by reason of any amount being payable, or liability
arising, under this Clause 19 (Guarantee and indemnity).

	(a)	 	to be indemnified by an Obligor;
	 
	(b)	 	to claim any contribution from any other guarantor of any Obligor’s obligations under the
Finance Documents;
	 
	(c)	 	to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of
any rights of the Finance Parties under the Finance Documents or of any other guarantee or
security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
	 
	(d)	 	to bring legal or other proceedings for an order requiring any Obligor to make any payment,
or perform any obligation, in respect of which any Guarantor has given a guarantee,
undertaking or indemnity under Clause 19.1 (Guarantee and indemnity);
	 
	(e)	 	to exercise any right of set-off against any Obligor; and/or
	 
	(f)	 	to claim or prove as a creditor of any Obligor in competition with any Finance Party.

If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall
hold that benefit, payment or distribution to the extent necessary to enable all amounts which may
be or become payable to the Finance Parties by the Obligors under or in connection with the Finance
Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer
the same to the Agent or as the Agent may direct for application in accordance with Clause 32
(Payment mechanics).

19.9 Release of Guarantors’ right of contribution

If any Guarantor (a Retiring Guarantor) ceases to be a Guarantor in accordance with the terms of
the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then
on the date such Retiring Guarantor ceases to be a Guarantor:

	(a)	 	that Retiring Guarantor is released by each other Guarantor from any liability (whether past,
present or future and whether actual or contingent) to make a contribution to any other
Guarantor arising by reason of the performance by any other Guarantor of its obligations under
the Finance Documents; and
	 
	(b)	 	each other Guarantor waives any rights it may have by reason of the performance of its
obligations under the Finance Documents to take the benefit (in whole or in part and whether
by way of subrogation or otherwise) of any rights of the Finance Parties

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	 	 	under any Finance Document or of any other
security taken pursuant to, or in connection
with, any Finance Document where such rights
or security are granted by or in relation to
the assets of the Retiring Guarantor.

19.10 Additional security

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or
security now or subsequently held by any Finance Party.

19.11 Guarantee Limitations

This guarantee does not apply to any liability to the extent that it would result in this guarantee
constituting unlawful financial assistance within the meaning of sections 678 or 679 of the
Companies Act 2006 or any equivalent and applicable provisions under the laws of the jurisdiction
of incorporation of the relevant Guarantor and, with respect to any Additional Guarantor, is
subject to any limitations set out in the Accession Deed applicable to such Additional Guarantor.

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SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

20. REPRESENTATIONS

20.1 General

Each Obligor makes the representations and warranties set out in this Clause 20 (Representations)
to each Finance Party.

20.2 Status

	(a)	 	It and each of its Subsidiaries is a limited liability corporation, duly incorporated and
validly existing under the law of its jurisdiction of incorporation.
	 
	(b)	 	It and each of its Subsidiaries has the power to own its assets and carry on its business as
it is being conducted.

20.3 Binding obligations

Subject to the Legal Reservations:

	(a)	 	the obligations expressed to be assumed by it in each Finance Document to which it is a party
are legal, valid, binding and enforceable obligations; and
	 
	(b)	 	(without limiting the generality of paragraph (a) above), each Transaction Security Document
to which it is a party creates the security interests which that Transaction Security Document
purports to create and those security interests are valid and effective.

20.4 Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, the Finance
Documents and the granting of the Transaction Security do not and will not conflict with:

	(a)	 	any law or regulation applicable to it;
	 
	(b)	 	the constitutional documents of the relevant member of the Group; or
	 
	(c)	 	any agreement or instrument binding upon it or any member of the Group or any of its or any
member of the Group’s assets or constitute a default or termination event (however described)
under any such agreement or instrument.

20.5 Power and authority

	(a)	 	It has the power to enter into, perform and deliver, and has taken all necessary action to
authorise its entry into, performance and delivery of, the Finance Documents to which it is or
will be a party and the transactions contemplated by those Finance Documents.
	 
	(b)	 	No limit on its powers will be exceeded as a result of the borrowing, grant of security or
giving of guarantees or indemnities contemplated by the Finance Documents to which it is a
party.

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20.6 Validity and admissibility in evidence

	(a)	 	All Authorisations required or, in its reasonable opinion, desirable:

	 	(i)	 	to enable it lawfully to enter into, exercise its rights and comply with its
obligations in the Finance Documents to which it is a party; and
	 
	 	(ii)	 	to make the Finance Documents to which it is a party admissible in evidence
in its Relevant Jurisdictions,
	 

	 	 	have been obtained or effected and are in full force and effect except any Authorisation
referred to in Clause 20.9 (No filing or stamp taxes), which Authorisation, if required,
will be promptly obtained or effected after the Closing Date.
	 
	(b)	 	All Authorisations (including without limitation in the case of the Licensed Undertaking
pursuant to the Instrument of Appointment) necessary for the conduct of the business, trade
and ordinary activities of members of the Group have been obtained or effected and are in full
force and effect if failure to obtain or effect those Authorisations has or is reasonably
likely to have a Material Adverse Effect.

20.7 Governing law and enforcement

	(a)	 	Subject to the Legal Reservations, the choice of governing law of the Finance Documents will
be recognised and enforced in its Relevant Jurisdictions.
	 
	(b)	 	Subject to the Legal Reservations, any judgment obtained in relation to a Finance Document in
the jurisdiction of the governing law of that Finance Document will be recognised and enforced
in its Relevant Jurisdictions.

20.8 Insolvency and Special Administration

	(a)	 	No:

	 	(i)	 	corporate action, legal proceeding or other procedure or step described in
paragraph (a) of Clause 24.9 (Insolvency proceedings); or
	 
	 	(ii)	 	creditors’ process described in Clause 24.10 (Creditors’ process); or
	 
	 	(iii)	 	steps referred to in paragraph (c) of Clause 24.20 (Licensed Undertaking
Events)

	 	 	have been taken or, to the knowledge of the Borrower, threatened in relation to a member of
the Group; and none of the circumstances described in Clause 24.8 (Insolvency) applies to a
member of the Group.
	 
	(b)	 	It is not aware of a petition having been presented pursuant to Section 24 of the Water Act
or a winding-up petition having been presented as referred to in Section 25 of the Water Act
in each case in respect of the Licensed Undertaking or a Special Administration Order having
been made in respect of the Licensed Undertaking.

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20.9 No filing or stamp taxes

Under the laws of its Relevant Jurisdiction it is not necessary that the Finance Documents be
filed, recorded or enrolled with any court or other authority in that jurisdiction or that any
stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance
Documents or the transactions contemplated by the Finance Documents except registration of
particulars of Transaction Security Documents at the Companies Registration Office in England and
Wales under section 860 of the Companies Act 2006 and payment of associated fees which
registrations, filings ,taxes and fees will be made and paid promptly after the date of the
relevant Finance Document.

20.10 Deduction of Tax

It is not required to make any deduction for or on account of Tax from any payment it may make
under any Finance Document to a Lender which is:

	(a)	 	a Qualifying Lender:

	 	(i)	 	falling within paragraph (a)(i) of the definition of Qualifying Lender; or
	 
	 	(ii)	 	except where a Direction has been given under section 931 of the ITA in
relation to the payment concerned, falling within paragraph (a)(ii) of the definition
of Qualifying Lender; or
	 
	 	(iii)	 	falling within paragraph (b) of the definition of Qualifying Lender or;

	(b)	 	a Treaty Lender and the payment is one specified in a direction given by the Commissioners of
Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General)
Regulations 1970 (SI 1970/488).

20.11 No default

	(a)	 	On the date of this Agreement and the Closing Date, no Default is continuing or is reasonably
likely to result from the making of any Utilisation or the entry into, the performance of, or
any transaction contemplated by, any Finance Document.
	 
	(b)	 	No other event or circumstance is outstanding which constitutes a default or termination
event (however described) under any other agreement or instrument which is binding on it or
any of its Subsidiaries or to which its (or any of its Subsidiaries’) assets are subject which
has or is reasonably likely to have a Material Adverse Effect.

20.12 No misleading information

Save as disclosed in writing to the Agent and the Arranger prior to the date of this Agreement:

	(a)	 	any factual information contained in the Information Package was true and accurate in all
material respects as at the date of the relevant report or document containing the information
or (as the case may be) as at the date the information is expressed to be given;
	 
	(b)	 	the Base Case Model has been prepared in accordance with the Accounting Principles as applied
to the Original Financial Statements, and the financial projections contained in the Base Case
Model have been prepared on the basis of recent historical

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	 	 	information, are fair and based on reasonable assumptions and have been approved by the
board of directors of the Borrower;
	 
	(c)	 	any financial projection or forecast contained in the Information Package has been prepared
on the basis of recent historical information and on the basis of reasonable assumptions and
was fair (as at the date of the relevant report or document containing the projection or
forecast) and arrived at after careful consideration;
	 
	(d)	 	the expressions of opinion or intention provided by or on behalf of an Obligor for the
purposes of the Information Package were made after careful consideration and (as at the date
of the relevant report or document containing the expression of opinion or intention) were
fair and based on reasonable grounds;
	 
	(e)	 	no event or circumstance has occurred or arisen and no information has been omitted from the
Information Package and no information has been given or withheld that results in the
information, opinions, intentions, forecasts or projections contained in the Information
Package being untrue or misleading in any material respect; and
	 
	(f)	 	all other written information provided by any member of the Group (including its advisers) to
a Finance Party was true, complete and accurate in all material respects as at the date it was
provided and is not misleading in any material respect.

20.13 Original Financial Statements

	(a)	 	In relation to the Licensed Undertaking, the Original Financial Statements were prepared in
accordance with the Accounting Principles consistently applied and give a true and fair view
of its financial condition and results of operations during the relevant Financial Year.
	 
	(b)	 	Except for the disposal of the “Aquacare” business by the Licensed Undertaking to AquaCare
(BWH) Limited on 1 April 2009, there has been no material adverse change, nor is there
currently expected to be any such change, in its assets, business or financial condition (or
the assets, business or consolidated financial condition of the Group taken as a whole, in the
case of the Borrower) since the date of the Original Financial Statements.
	 
	(c)	 	The most recent financial statements delivered pursuant to Clause 21.1 (Financial
statements):

	 	(i)	 	have been prepared in accordance with the Accounting Principles as applied to
the Original Financial Statements and the Base Case Model; and
	 
	 	(ii)	 	give a true and fair view of (if audited) or fairly present (if unaudited)
its consolidated financial condition as at the end of, and consolidated results of
operations for, the period to which they relate.

	(d)	 	The budgets and forecasts supplied under this Agreement were arrived at after careful
consideration and have been prepared in good faith on the basis of recent historical
information and on the basis of assumptions which were reasonable as at the date they were
prepared and supplied.
	 
	(e)	 	Since the date of the most recent financial statements delivered pursuant to Clause 21.1
(Financial statements) there has been no material adverse change in the business, assets or
financial condition of the Group taken as a whole.

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20.14 No proceedings pending or threatened

No litigation, arbitration or administrative proceedings or investigations of, or before, any
court, arbitral body or agency which are reasonably likely to be adversely determined and which, if
adversely determined, are reasonably likely to have a Material Adverse Effect have (to the best of
the Borrower’s knowledge and belief (having made, in the reasonable opinion of the Borrower,
prudent enquiry)) been started or threatened against it or any of its Subsidiaries.

20.15 No breach of laws

	(a)	 	It has not (and none of its Subsidiaries has) breached any law or regulation applicable to it
(including, without limitation, in the case of the Licensed Undertaking, the Water Act or the
Instrument of Appointment) which breach has or is reasonably likely to have a Material Adverse
Effect.
	 
	(b)	 	No labour disputes are current or, to the best of the Borrower’s knowledge and belief (having
made, in the reasonable opinion of the Borrower, prudent enquiry), threatened against any
member of the Group which have or are reasonably likely to have a Material Adverse Effect.

20.16 Environmental laws

	(a)	 	Each member of the Group is in compliance with Clause 23.3 (Environmental compliance) and to
the best of the Borrower’s knowledge and belief (having made, in the reasonable opinion of the
Borrower, prudent enquiry) no circumstances have occurred which would prevent such compliance
in a manner or to an extent which has or is reasonably likely to have a Material Adverse
Effect.
	 
	(b)	 	No Environmental Claim has been commenced or (to the best of the Borrower’s knowledge and
belief (having made, in the reasonable opinion of the Borrower, prudent enquiry)) is
threatened against any member of the Group where that claim has or is reasonably likely, if
determined against that member of the Group, to have a Material Adverse Effect.
	 
	(c)	 	The cost to the Group of compliance with Environmental Laws (including Environmental Permits)
is (to the best of the Borrower’s knowledge and belief (having made, in the reasonable opinion
of the Borrower, prudent enquiry)) adequately provided for in the Base Case Model.

20.17 Taxation

	(a)	 	It is not (and none of its Subsidiaries is) materially overdue in the filing of any Tax
returns and it is not (and none of its Subsidiaries is) overdue in the payment of any amount
in respect of Tax, unless such payment is being withheld for any of the reasons referred to in
Clause 23.5(a) (Taxation).
	 
	(b)	 	No claims or investigations are being, or are reasonably likely to be, made or conducted
against it (or any of its Subsidiaries) with respect to Taxes which would have, or be
reasonably likely to have, a Material Adverse Effect.
	 
	(c)	 	It is resident for Tax purposes only in the jurisdiction of its incorporation.

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20.18 Security and Financial Indebtedness

	(a)	 	No Security or Quasi-Security exists over all or any of the present or future assets of any
member of the Group other than as permitted by this Agreement.
	 
	(b)	 	No member of the Group has any Financial Indebtedness outstanding other than as permitted by
this Agreement.

20.19 Ranking

The Transaction Security has or will have the ranking in priority which it is expressed to have in
the Transaction Security Documents and it is not subject to any prior ranking or pari passu ranking
Security.

20.20 Good title to assets

It and each of its Subsidiaries has a good, valid and marketable title to, or valid leases or
licences (including the Instrument of Appointment) of, and all appropriate Authorisations to use,
the assets necessary to carry on its business as presently conducted.

20.21 Legal and beneficial ownership

It and each of its Subsidiaries is the sole legal and beneficial owner of the respective assets
over which it purports to grant Security.

20.22 Shares

The shares of any member of the Group which are subject to the Transaction Security are fully paid
and not subject to any option to purchase or similar rights. The constitutional documents of
companies whose shares are subject to the Transaction Security do not and could not restrict or
inhibit any transfer of those shares on creation or enforcement of the Transaction Security. There
are no agreements in force which provide for the issue or allotment of, or grant any person the
right to call for the issue or allotment of, any share or loan capital of any member of the Group.

20.23 Intellectual Property

It and each of its Subsidiaries:

	(a)	 	is the sole legal and beneficial owner of or has licensed to it all the Intellectual Property
which is material in the context of its business and which is required by it in order to carry
on its business as it is being conducted and as contemplated in the Base Case Model;
	 
	(b)	 	does not, to the best of the Borrower’s knowledge and belief (having made, in the reasonable
opinion of the Borrower, prudent enquiry), in carrying on its businesses, infringe any
Intellectual Property of any third party in any respect; and
	 
	(c)	 	has taken all formal or procedural actions (including payment of fees) required to maintain
any material Intellectual Property owned by it.

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20.24 Group Structure Chart

	(a)	 	The Group Structure Chart delivered to the Agent pursuant to Part A of Schedule 2 (Conditions
precedent to initial Utilisation) is true, complete and accurate in all material respects and
shows the following information:

	 	(i)	 	each member of the Group, including current name and company registration
number, its jurisdiction of incorporation and/or establishment, a list of shareholders
and indicating whether a company is a Dormant Subsidiary or not a company with limited
liability; and
	 
	 	(ii)	 	all minority interests in any member of the Group and any person in which any
member of the Group holds shares in its issued share capital or equivalent ownership
interest of such person.

	(b)	 	All necessary intra-Group loans, transfers, share exchanges and other steps resulting in the
final group structure are set out in the Group Structure Chart and have been or will be taken
in compliance with all relevant laws and regulations and all requirements of relevant
regulatory authorities.

20.25 Accounting reference date

The Accounting Reference Date of each member of the Group is 31 March.

20.26 Centre of main interests and establishments

For the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency
Proceedings (the Regulation), its centre of main interest (as that term is used in Article 3(1) of
the Regulation) is situated in England and Wales.

20.27 Pensions

Except for the Pension Scheme, neither the Borrower nor any of its Subsidiaries is or has been at
any time an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004) of an
occupational pension scheme which is not a money purchase scheme (both terms as defined in the
Pensions Schemes Act 1993).

20.28 Holding Companies and Dormant Companies

	(a)	 	Except as may arise under the Finance Documents, before the Closing Date the Borrower has not
traded or incurred any liabilities or commitments (actual or contingent, present or future).
	 
	(b)	 	As at the date of this Agreement, each of Bournemouth Water Limited and West Hampshire Water
Limited are Dormant Subsidiaries.

20.29 Obligors

Each Subsidiary of the Borrower is incorporated in the United Kingdom.

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20.30 Times when representations made

	(a)	 	All the representations and warranties in this Clause 20 (Representations) are made by the
Borrower on the date of this Agreement except for the representations and
warranties set out in Clause 20.12 (No misleading information) which are deemed to be made
by each Obligor with respect to the Base Case Model, on the date of this Agreement and on
the Closing Date.
	 
	(b)	 	The Repeating Representations are deemed to be made by each Obligor on the date of each
Utilisation Request, on each Utilisation Date and on the first day of each Interest Period
(except that those contained in paragraphs (a) to (c) of Clause 20.13 (Original Financial
Statements) will cease to be so made once subsequent financial statements have been delivered
under this Agreement).
	 
	(c)	 	All the representations and warranties in this Clause 20 (Representations) except Clause
20.12 (No misleading information), Clause 20.24 (Group Structure Chart) and Clause 20.28
(Holding Companies and Dormant Companies) are deemed to be made by each Additional Guarantor
on the day on which it becomes (or it is proposed that it becomes) an Additional Guarantor.
	 
	(d)	 	Each representation or warranty deemed to be made after the date of this Agreement shall be
deemed to be made by reference to the facts and circumstances existing at the date the
representation or warranty is deemed to be made.

21. INFORMATION UNDERTAKINGS

The undertakings in this Clause 21 (Information undertakings) remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is
in force.

In this Clause 21 (Information undertakings):

Annual Financial Statements means the financial statements for a Financial Year delivered pursuant
to paragraph (a) of Clause 21.1 (Financial statements).

Quarterly Financial Statements means the financial statements delivered pursuant to paragraph (b)
of Clause 21.1 (Financial statements).

21.1 Financial statements

The Borrower shall supply to the Agent in sufficient copies for all the Lenders:

	(a)	 	as soon as they are available, but in any event within 130 days after the end of each of its
Financial Years (commencing in respect of the Financial Year ended 31 March 2010):

	 	(i)	 	the audited consolidated financial statements of the Group for that Financial
Year, provided that the first audited consolidated financial statements of the Group
to be delivered shall be in respect of the Financial Year ended 31 March 2011;
	 
	 	(ii)	 	the audited financial statements (consolidated if appropriate) of the
Licensed Undertaking for that Financial Year; and

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	 	(iii)	 	the audited financial statements of any other Material Company for that
Financial Year if requested by the Agent;

	(b)	 	as soon as they are available, but in any event within 60 days after the end of each
Financial Quarter:

	 	(i)	 	the unaudited consolidated financial statements of the Group for that
Financial Quarter; and
	 
	 	(ii)	 	the unaudited financial statements (consolidated if appropriate) of the
Licensed Undertaking for that Financial Quarter.

21.2 Provision and contents of Compliance Certificate

	(a)	 	The Borrower shall supply a Compliance Certificate to the Agent with each set of its audited
consolidated Annual Financial Statements and each set of its consolidated Quarterly Financial
Statements.
	 
	(b)	 	The Compliance Certificate shall, amongst other things, set out (in detail reasonably
satisfactory to the Agent) computations as to compliance with Clause 22 (Financial Covenants).
	 
	(c)	 	Each Compliance Certificate shall be signed by the chief financial officer of the Borrower
and one other director and, if required to be delivered with the consolidated Annual Financial
Statements of the Borrower, shall be reported on by the Borrower’s Auditors in the form agreed
by the Borrower and the Majority Lenders.

21.3 Requirements as to financial statements

	(a)	 	The Borrower shall procure that each set of Annual Financial Statements and Quarterly
Financial Statements includes a balance sheet, profit and loss account and cashflow statement
for the Group. In addition the Borrower shall procure that each set of Annual Financial
Statements shall be audited by the Auditors.
	 
	(b)	 	Each set of financial statements delivered pursuant to Clause 21.1 (Financial statements):

	 	(i)	 	shall be certified by a director of the Borrower, Licensed Undertaking or
Material Company (as applicable) as giving a true and fair view of (in the case of
Annual Financial Statements for any Financial Year), or fairly representing (in other
cases), its financial condition and operations as at the date as at which those
financial statements were drawn up and, in the case of the Annual Financial
Statements, shall be accompanied by any letter addressed to the management of the
Borrower, Licensed Undertaking or Material Company (as applicable) by the Auditors and
accompanying those Annual Financial Statements;
	 
	 	(ii)	 	in the case of consolidated financial statements of the Group, shall be
accompanied by a statement by the directors of the Borrower in a form reasonably
acceptable to the Agent comparing actual performance (including, without limitation,
profit and loss and cashflow) for the period to which the financial statements relate
to:

	 	(A)	 	the projected performance for that period set out in the
Budget; and

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	 	(B)	 	the actual performance for the corresponding period in the
preceding Financial Year of the Group; and
	 
	 	(C)	 	in the case of the annual consolidated financial statements
only, the current final price determination published by OFWAT;

	 	(iii)	 	shall be prepared using the Accounting Principles, accounting practices and
financial reference periods consistent with those applied in the preparation of the
Original Financial Statements, unless, in relation to any set of financial statements,
the Borrower notifies the Agent that there has been a change in the Accounting
Principles or the accounting practices (including, for the avoidance of doubt, a
change in accounting principles from GAAP to IFRS contemplated by the definition of
Accounting Principles) and its Auditors (or, if appropriate, the Auditors of the
Obligor) deliver to the Agent:

	 	(A)	 	a description of any change necessary for those financial
statements to reflect the Accounting Principles or accounting practices upon
which the Original Financial Statements were prepared; and
	 
	 	(B)	 	sufficient information, in form and substance as may be
reasonably required by the Agent, to enable the Lenders to determine whether
Clause 22 (Financial covenants) has been complied with, to determine the
Margin as set out in the definition of “Margin” and to make an accurate
comparison between the financial position indicated in those financial
statements and the Original Financial Statements.

	 	 	 	Any reference in this Agreement to any financial statements shall be construed as
a reference to those financial statements as adjusted to reflect the basis upon
which the Base Case Model or, as the case may be, the Original Financial
Statements were prepared.

	(c)	 	The Agent may at any time:

	 	(i)	 	upon the occurrence of a Default;
	 
	 	(ii)	 	if the Agent reasonably believes that a Default is outstanding; or
	 
	 	(iii)	 	if the Agent reasonably believes that financial information delivered under
this Agreement is incorrect or misleading,

	 	 	 	request that, at the expense of the Borrower, additional comfort be obtained by the
Borrower from the Auditors by means of agreed upon procedures as set out in a separate
letter of engagement between the Borrower and the Auditors.

21.4 Budget

	(a)	 	The Borrower shall supply to the Agent in sufficient copies for all the Lenders, as soon as
the same become available but in any event before the start of each of its Financial Years, an
annual Budget for that Financial Year (which includes the operating budget of the Licensed
Undertaking).
	 
	(b)	 	Except in the case of the Base Case Model, the Borrower shall ensure that each Budget (broken
down by Financial Quarter):

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	 	(i)	 	is in a form reasonably acceptable to the Agent and includes a projected
consolidated profit and loss, balance sheet and cashflow statement for the
Group, projected financial covenant calculations, projected disposals and an
inflation forecast;
	 
	 	(ii)	 	is prepared in accordance with the Accounting Principles and the accounting
practices and financial reference periods applied to financial statements under Clause
21.1 (Financial statements); and
	 
	 	(iii)	 	has been approved by the board of directors of the Borrower.

	(c)	 	If the Borrower updates or changes the Budget, it shall promptly deliver to the Agent, in
sufficient copies for each of the Lenders, such updated or changed Budget together with a
written explanation of the main changes in that Budget.

21.5 Group companies

The Borrower shall, at the request of the Agent, supply to the Agent a report issued by its
Auditors stating which of its Subsidiaries are Material Companies falling within paragraph (d) of
the definition of Material Company and confirming that the aggregate of earnings before interest,
tax, depreciation and amortisation (calculated on the same basis as EBITDA, as defined in Clause 22
(Financial Covenants)) and the aggregate gross assets of the Material Companies (calculated on an
unconsolidated basis and excluding all intra-Group items and investments in Subsidiaries of any
member of the Group) exceeds 5% of EBITDA (as defined in Clause 22 (Financial Covenants)) and the
consolidated gross assets.

21.6 Presentations

	(a)	 	Twice in every Financial Year, or more frequently if requested to do so by the Agent if the
Agent reasonably suspects a Default is continuing, the Borrower shall procure that the chief
financial officer of Cascal N.V. and the chief financial officer of the Licensed Undertaking
(or any other person agreed to by the Agent) give a presentation to the Finance Parties about
the on-going business and financial performance of the Group.
	 
	(b)	 	In addition to paragraph (a) above, the Borrower shall use reasonable efforts to answer at
any time written questions submitted to it by any Lender regarding the on-going business and
financial performance of the Group.

21.7 Year-end

The Borrower shall not change its Accounting Reference Date.

21.8 Information: miscellaneous

The Borrower shall (or shall procure that any member of the Group) supply to the Agent (in
sufficient copies for all the Lenders, if the Agent so requests):

	(a)	 	at the same time as they are dispatched, copies of all documents dispatched by any member of
the Group to their respective shareholders generally (or any class of them) or dispatched by
the Borrower, Holdco or the Licensed Undertaking to its creditors generally or any class of
them including for the avoidance of doubt all documents despatched by a member of the Group to
the lenders under the Artesian Facility;

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	(b)	 	promptly upon becoming aware of them, the details of any litigation, arbitration or
administrative proceedings which are current, threatened or pending against any
member of the Group which are reasonably likely to be adversely determined and which, if
adversely determined, are reasonably likely to have a Material Adverse Effect;
	 
	(c)	 	promptly, such information as the Security Trustee may reasonably require about the Charged
Property and compliance of the Obligors with the terms of any Transaction Security Documents;
	 
	(d)	 	promptly on request, such further information regarding the financial condition, assets and
operations of the Group and/or any member of the Group (including any requested amplification
or explanation of any item in the financial statements, budgets or other material provided by
any Obligor under this Agreement and any changes to Senior Management) as any Finance Party
through the Agent may reasonably request;
	 
	(e)	 	with respect to the Licensed Undertaking, as soon as possible but in any event within 60 days
of each Quarter Date, a Cash Flow Forecast prepared for the period of 12 months commencing on
the first day after such Quarter Date in accordance with Accounting Principles;
	 
	(f)	 	with respect to the Licensed Undertaking, on the date of this Agreement the current capital
expenditure programme from and in accordance with the most recent final price determination
made by OFWAT on a five yearly basis, and promptly following an agreement with OFWAT any
adjusted capital expenditure programme, and as soon as agreed with OFWAT the next capital
expenditure programme;
	 
	(g)	 	with respect to the Licensed Undertaking, a copy of all material information which would have
a Material Adverse Effect which the Licensed Undertaking supplies to the Director General of
Water Services (or any successor thereto) save to the extent prohibited by law (at the same
time as such is supplied); and
	 
	(h)	 	with respect to the Licensed Undertaking, as soon as reasonably practicable after becoming
aware of the same, details of any proposed changes to the Instrument of Appointment.

21.9 Notification of default

	(a)	 	Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to
remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a
notification has already been provided by another Obligor).
	 
	(b)	 	Promptly upon a request by the Agent, the Borrower shall supply to the Agent a certificate
signed by the chief financial officer and one other director on its behalf certifying that no
Default is continuing (or if a Default is continuing, specifying the Default and the steps, if
any, being taken to remedy it).

21.10 “Know your customer” checks

	(a)	 	If:

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	 	(i)	 	the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation made after the date of this
Agreement;
	 
	 	(ii)	 	any change in the status of an Obligor or the composition of the shareholders
of an Obligor after the date of this Agreement; or
	 
	 	(iii)	 	a proposed assignment or transfer by a Lender of any of its rights and/or
obligations under this Agreement to a party that is not a Lender prior to such
assignment or transfer,

		 	obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective
new Lender) to comply with “know your customer” or similar identification procedures in
circumstances where the necessary information is not already available to it, each Obligor
shall promptly upon the request of the Agent or any Lender supply, or procure the supply
of, such documentation and other evidence as is reasonably requested by the Agent (for
itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event
described in paragraph (iii) above, on behalf of any prospective new Lender) in order for
the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any
prospective new Lender to carry out and be satisfied it has complied with all necessary
“know your customer” or other similar checks under all applicable laws and regulations
pursuant to the transactions contemplated in the Finance Documents.
	 
	(b)	 	Each Lender shall promptly upon the request of the Agent supply, or procure the supply of,
such documentation and other evidence as is reasonably requested by the Agent (for itself) in
order for the Agent to carry out and be satisfied it has complied with all necessary “know
your customer” or other similar checks under all applicable laws and regulations pursuant to
the transactions contemplated in the Finance Documents.
	 
	(c)	 	The Borrower shall, by not less than 10 Business Days’ prior written notice to the Agent,
notify the Agent (which shall promptly notify the Lenders) of its intention to request that
one of its Subsidiaries becomes an Additional Guarantor pursuant to Clause 27 (Changes to the
Obligors).
	 
	(d)	 	Following the giving of any notice pursuant to paragraph (c) above, if the accession of such
Additional Guarantor obliges the Agent or any Lender to comply with “know your customer” or
similar identification procedures in circumstances where the necessary information is not
already available to it, the Borrower shall promptly upon the request of the Agent or any
Lender supply, or procure the supply of, such documentation and other evidence as is
reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for
itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or
any prospective new Lender to carry out and be satisfied it has complied with all necessary
“know your customer” or other similar checks under all applicable laws and regulations
pursuant to the accession of such Subsidiary to this Agreement as an Additional Guarantor.

22. FINANCIAL COVENANTS

22.1 Financial definitions

In this Agreement:

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Adjusted Total Net Debt means (i) for the Quarter Dates 31 March and 30 September in each Financial
Year, Total Net Debt; and (ii) for the Quarter Dates 30 June and 31 December in each Financial
Year, Total Net Debt provided that when calculating Total Net Debt the
Borrowings under the Artesian Facility shall be adjusted by multiplying such Borrowings by the
Artesian Index Ratio in respect of the relevant Quarter Date.

Artesian Index Ratio is the Index Figure applicable to that month divided by the Artesian Base
Index Figure and the result multiplied by 1.0011. Any references to Index Figure in relation to a
particular month (the Relevant Month) means the Index Figure in respect of the eighth month prior
to the Relevant Month.

Artesian Base Index Figure means 187.4 (being the United Kingdom All Items Retail Price Index for
August 2004).

Borrowings means, at any time, the aggregate outstanding principal, capital or nominal amount (and
any fixed or minimum premium payable on prepayment or redemption) of any indebtedness of members of
the Group for or in respect of:

	(a)	 	moneys borrowed and debit balances at banks or other financial institutions (including in
each case, without limitation, any capitalised element thereof) including, for the avoidance
of doubt, any amount outstanding (as such amount is indexed in accordance with the terms
thereof) under the Artesian Facility;
	 
	(b)	 	any acceptances under any acceptance credit or bill discount facility (or dematerialised
equivalent);
	 
	(c)	 	any note purchase facility or the issue of bonds, notes, debentures, loan stock or any
similar instrument (including any capitalised element, or, if issued at a discount, the issue
price thereof);
	 
	(d)	 	the amount of any liability in respect of Finance Lease;
	 
	(e)	 	receivables sold or discounted (other than any receivables to the extent they are sold on a
non-recourse basis);
	 
	(f)	 	any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary
letter of credit or any other instrument issued by a bank or financial institution in respect
of an underlying liability of an entity which is not a member of the Group which liability
would fall within one of the other paragraphs of this definition (but excluding for the
avoidance of doubt any obligation arising under paragraph (h) of the definition of Permitted
Financial Indebtedness);
	 
	(g)	 	any amount raised by the issue of shares which are redeemable (other than at the option of
the issuer) before the Repayment Date or are otherwise classified as borrowings under the
Accounting Principles;
	 
	(h)	 	any amount of any liability under an advance or deferred purchase agreement if (i) one of the
primary reasons behind entering into the agreement is to raise finance or to finance the
acquisition or construction of the asset or service in question or (ii) the agreement is in
respect of the supply of assets or services and payment is due more than 90 days after the
date of supply;
	 
	(i)	 	any amount raised under any other transaction (including any forward sale or purchase
agreement, sale and sale back or sale and leaseback agreement) having the

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	 	 	commercial effect of a borrowing or otherwise classified as a borrowing under the
Accounting Principles; and
	 
	(j)	 	(without double counting) the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraphs (a) to (i) above.

Capital Expenditure means any expenditure or obligation in respect of expenditure which, in
accordance with the Accounting Principles, is treated as capital expenditure (and including the
capital element of any expenditure or obligation incurred in connection with a Finance Lease but
net of any capital contribution received from third parties).

Cash means, at any time, cash denominated in sterling in hand or at bank and (in the latter case)
credited to an account in the name of a member of the Group with an Acceptable Bank and to which a
member of the Group is alone (or together with other members of the Group) beneficially entitled
and for so long as:

	(a)	 	that cash is repayable on demand;
	 
	(b)	 	repayment of that cash is not contingent on the prior discharge of any other indebtedness of
any member of the Group or of any other person whatsoever or on the satisfaction of any other
condition;
	 
	(c)	 	there is no Security over that cash except for Transaction Security or any Permitted
Security; and
	 
	(d)	 	the cash is freely and immediately available to be applied in repayment or prepayment of the
Facility or the Artesian Facility and, for the avoidance of doubt, includes all cash standing
to the credit of the Debt Service Payment Account (as such term is defined in the Artesian
Facility Agreement) from time to time.

Cash Equivalent Investments means at any time:

	(a)	 	securities issued by the government of the United Kingdom;
	 
	(b)	 	demand or time deposits, certificates of deposit and short-term unsecured debt obligations,
including commercial paper, provided that the issuing entity or, if such investment is
guaranteed, the guaranteeing entity, is rated either A-1 or higher by Standard & Poor’s Rating
Services or Fitch Rating Ltd or P-1 or higher by Moody’s Investor Services Limited and (if the
relevant Cash Equivalent Investments have an original maturity in excess of one year) either
AA- or higher by Standard & Poor’s Rating Services or Fitch Rating Ltd or Aa3 or higher by
Moody’s Investor Services Limited;
	 
	(c)	 	money market funds rated either A-1 or higher by Standard & Poor’s Rating Services or Fitch
Rating Ltd or P-1 or higher by Moody’s Investor Services Limited; and
	 
	(d)	 	any other obligations provided that in each case the relevant investment is rated either A-1
or higher by Standard & Poor’s Rating Services or Fitch Rating Ltd or P-1 or higher by Moody’s
Investor Services Limited or (if the relevant Cash Equivalent Investments have an original
maturity in excess of one year) either AA- or higher by Standard & Poor’s
Rating Services or Fitch Rating Ltd or Aa3 or higher by Moody’s Investor Services Limited
and in each case denominated in sterling.

Cashflow means, in respect of any period, EBITDA for that period after:

Page 66

 

	(a)	 	adding the amount of any decrease (and deducting the amount of any increase) in Working
Capital for that period;
	 
	(b)	 	adding the amount of any cash receipts (and deducting the amount of any cash payments) during
that Relevant Period in respect of any Exceptional Items not already taken account of in
calculating EBITDA for any period;
	 
	(c)	 	adding the amount of any cash receipts during that period in respect of any Tax rebates or
credits and deducting the amount actually paid or due and payable in respect of Taxes during
that period by any member of the Group;
	 
	(d)	 	adding the amount of any increase in provisions, other non-cash debits and other non-cash
charges (which are not Current Assets or Current Liabilities) and deducting the amount of any
non-cash credits (which are not Current Assets or Current Liabilities) in each case to the
extent taken into account in establishing EBITDA;
	 
	(e)	 	adding the amount of any cash receipts during that period in respect of Permitted Share
Issues;
	 
	(f)	 	adding any profit or deducting any loss during that period on the disposal of fixed assets to
the extent that such amounts are not already accounted for in EBIT;
	 
	(g)	 	deducting the amount of any cash costs of Pension Items during that period to the extent such
amounts are not already accounted for in EBIT;
	 
	(h)	 	deducting the amount of any Capital Expenditure actually made during that period by any
member of the Group; and
	 
	(i)	 	deducting the amount of any dividends paid in cash during the period by the Borrower,

and so that, in each case, no amount shall be added (or deducted) more than once.

Cash Flow Forecast means for each Quarter Date a forecast of Cashflow for the period of 12 months
commencing on the first day after such Quarter Date.

Current Assets means the aggregate (on a consolidated basis) of all inventory, work in progress,
trade and other receivables of each member of the Group including prepayments in relation to
operating items and sundry debtors (but excluding Cash and Cash Equivalent Investments) maturing
within twelve months from the date of computation but excluding amounts in respect of:

	(a)	 	receivables in relation to Tax (other than value added tax);
	 
	(b)	 	Exceptional Items and other non-operating items;
	 
	(c)	 	insurance claims; and
	 
	(d)	 	any interest owing to any member of the Group.

Current Liabilities means the aggregate (on a consolidated basis) of all liabilities (including
trade creditors, accruals and provisions) of each member of the Group falling due within twelve
months from the date of computation but excluding amounts in respect of:

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	(a)	 	liabilities for Borrowings and Finance Charges;
	 
	(b)	 	liabilities for Tax (other than value added tax);
	 
	(c)	 	Exceptional Items and other non-operating items;
	 
	(d)	 	insurance claims; and
	 
	(e)	 	liabilities in relation to dividends declared but not paid by the Borrower or by a member of
the Group in favour of a person which is not a member of the Group.

Debt Service means, in respect of any Relevant Period, the aggregate of:

	(a)	 	Net Finance Charges for that Relevant Period;
	 
	(b)	 	the aggregate of all scheduled and mandatory repayments of Borrowings falling due during that
Relevant Period but excluding:

	 	(i)	 	any amounts falling due under any overdraft or revolving facility and which
were available for simultaneous redrawing according to the terms of that facility; and
	 
	 	(ii)	 	any such obligations owed to any member of the Group; and

	(c)	 	the amount of the capital element of any payments in respect of that Relevant Period payable
under any Finance Lease entered into by any member of the Group,

and so that no amount shall be included more than once.

EBIT means, in respect of any Relevant Period (or any other specified period), the consolidated
operating profit (calculated on the same basis as the calculation of operating profit in the most
recent audited financial statements of the Licensed Undertaking or the Group (as applicable)) of
the Group before taxation:

	(a)	 	without including any interest, commercial fees, discounts, prepayment fees, premiums or
charges and other finance payments whether paid, payable or capitalised by any member of the
Group (calculated on a consolidated basis) in respect of the relevant period;
	 
	(b)	 	without including any accrued interest owing to any member of the Group;
	 
	(c)	 	without including any Exceptional Items;
	 
	(d)	 	without including any unrealised gains or losses on any derivative instrument (other than any
derivative instrument which is accounted for on a hedge accounting basis); and
	 
	(e)	 	without including any gain or loss arising from an upward or downward revaluation of any
other asset (including any loss or gain against book value from the disposal of any asset (not
being a Disposal in the ordinary course of trading)),

in each case, to the extent added, deducted or taken into account, as the case may be, for the
purposes of determining operating profits of the Group before taxation.

Page 68

 

EBITDA means, in respect of any Relevant Period (or any other specified period), EBIT for the
relevant period after adding back any amount attributable to the amortisation or depreciation of
assets of members of the Group.

Exceptional Items means any exceptional, one off, non-recurring or extraordinary items including
those arising on:

	(a)	 	the restructuring of the activities of an entity and reversals of any provisions for the cost
of restructuring;
	 
	(b)	 	disposals, revaluations or impairment of non-current assets; and
	 
	(c)	 	disposals of assets associated with discontinued operations.

Finance Charges means, for any Relevant Period, the aggregate amount of accrued interest under the
Artesian Facility Agreement (including any interest which is capitalised as a result of indexation
under the Artesian Facility Agreement) and any commission, fees, discounts, prepayment fees,
premiums or charges and other finance payments in respect of other Borrowings whether paid, payable
or capitalised by any member of the Group (calculated on a consolidated basis) in respect of that
Relevant Period:

	(a)	 	including any upfront fees or costs which are included as part of the effective interest rate
adjustments;
	 
	(b)	 	including the interest (but not the capital) element of payments in respect of Finance
Leases; and
	 
	(c)	 	including any commission, fees, discounts and other finance payments payable by (and
deducting any such amounts payable to) any member of the Group under any interest rate hedging
arrangement;

and so that no amount shall be added (or deducted) more than once.

Finance Lease means any lease or hire purchase contract which would, in accordance with the
Accounting Principles, be treated as a finance or capital lease.

Financial Quarter means the period commencing on the day after one Quarter Date and ending on the
next Quarter Date.

Financial Year means the annual accounting period of the Group ending on 31 March in each year.

Indexed means, in relation to an amount and a period, that amount multiplied by the Index Figure in
respect of that month divided by 220.7 (being the Index Figure for March 2010).

Index Figure in respect of a particular month means the United Kingdom Retail Price Index. All
Items as published by the Office for National Statistics (January 1987 = 100) in respect of that
month. For the avoidance of doubt, any reference to the Index Figure in respect of a particular
month (the Relevant Month) shall be construed as a reference to the Index Figure published in the
Monthly Digest of Statistics (or in any official publication substituted therefore) in the month
succeeding the Relevant Month and stated to be relating to the Relevant Month.

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Interest Cover means the ratio of EBITDA to Net Finance Charges in respect of any Relevant Period.

Interim Determination means any interim changes to prices, Capital Expenditure, RAV or other
material regulatory item as provided for in Part IV of Condition B of the Instrument of
Appointment.

Net Finance Charges means, for any Relevant Period, the Finance Charges for that Relevant Period
after deducting any cash interest received during that Relevant Period by any member of the Group
on any Cash or Cash Equivalent Investment and any cash interest received under the Parent Loan
Agreement and any cash interest received under the On-Loan Agreement.

Out-turn inflation means, in respect of any period for which the relevant indices have been
published, the actual inflation rate applicable to such period determined by reference to movements
in the Index Figure.

Pension Items means the current service costs and deficit contribution payments.

Periodic Review means any determination of prices, Capital Expenditure, RAV or other material
regulatory item arising from OFWAT announcing acceptance of the same in accordance with Condition B
of the Instrument of Appointment.

Permitted Carry Forward Amount has the meaning given to it in Clause 22.2 (Financial condition).

Quarter Date means each of 31 March, 30 June, 30 September and 31 December.

RAR means for any Relevant Period, the ratio of Adjusted Total Net Debt on the last day of that
Relevant Period to RAV.

RAV means the regulatory asset base of the Licensed Undertaking as last determined and notified to
the Licensed Undertaking by OFWAT at the most recent Periodic Review or Interim Determination or
other procedure through which in future OFWAT may make such determination on an equally definitive
basis to that of a Periodic Review or Interim Determination (interpolated as necessary and adjusted
as appropriate for Out-turn inflation) and provided that (a) where a draft OFWAT determination is
available, the figures set out in such draft OFWAT determination shall be used; and (b) where the
directors of the Borrower reasonably expect OFWAT to revise its determination as to the regulatory
asset base of the Licensed Undertaking as a result of a Permitted Disposal, Permitted Acquisition
or otherwise by way of an Interim Determination, then the expected revised figures (in the opinion
of the directors of the Borrower, acting reasonably) shall be used, in each case unless otherwise
agreed by the Majority Lenders.

Regulatory Indexation means, in relation to an amount and a period, that amount multiplied by the
Regulatory Index Ratio.

Regulatory Index Ratio is the Index Figure applicable to that month divided by the Regulatory Base
Index Figure.

Regulatory Base Index Figure means 212.1 (being the Index Figure for March 2008).

Relevant Period means each period of twelve months ending on the last day of each Financial
Quarter.

Page 70

 

Total Net Debt means, at any time, the aggregate amount of all obligations of members of the
Group for or in respect of Borrowings at that time but:

	(a)	 	excluding any such obligations to any other member of the Group and excluding any such
obligations owed by the Borrower under a Subordinated Loan;
	 
	(b)	 	including, in the case of Finance Leases only, their capitalised value; and
	 
	(c)	 	deducting the aggregate amount of Cash and Cash Equivalent Investments held by any member of
the Group at that time,

and so that no amount shall be included or excluded more than once.

Working Capital means, on any date, Current Assets less Current Liabilities.

	22.2	 	Financial condition

The Borrower shall ensure that:

	(a)	 	RAR in respect of any Relevant Period ending on each Quarter Date specified in column 1 below
shall not exceed the ratio set out in column 2 below opposite that Quarter Date.

	 	 	 
	Column 1	 	Column 2
	Relevant Period	 	Ratio
	30 June 2010

	 	0.95:1
	 
	 	 
	30 September 2010

	 	0.95:1
	 
	 	 
	31 December 2010

	 	0.95:1
	 
	 	 
	31 March 2011

	 	0.95:1
	 
	 	 
	30 June 2011

	 	0.95:1
	 
	 	 
	30 September 2011

	 	0.94:1
	 
	 	 
	31 December 2011

	 	0.94:1
	 
	 	 
	31 March 2012

	 	0.93:1
	 
	 	 
	30 June 2012

	 	0.92:1
	 
	 	 
	30 September 2012

	 	0.92:1
	 
	 	 
	31 December 2012

	 	0.91:1
	 
	 	 
	31 March 2013

	 	0.90:1
	 
	 	 
	30 June 2013

	 	0.90:1
	 
	 	 
	30 September 2013

	 	0.90:1

Page 71

 

	 	 	 
	Column 1	 	Column 2
	Relevant Period	 	Ratio
	31 December 2013

	 	0.90:1
	 
	 	 
	31 March 2014

	 	0.90:1
	 
	 	 
	30 June 2014

	 	0.90:1
	 
	 	 
	30 September 2014

	 	0.90:1
	 
	 	 
	31 December 2014

	 	0.90:1
	 
	 	 
	31 March 2015

	 	0.90:1

	(b)	 	Interest Cover in respect of any Relevant Period shall not be less than 2.00:1.
	 
	(c)	 	The aggregate Capital Expenditure of the Group in respect of any Financial Year specified in
column 1 below shall not exceed the amount set out in column 2 below opposite that Financial
Year provided that each amount set out in column 2 will be adjusted for Regulatory Indexation:

	 	 	 
	Column 1	 	Column 2
	Financial Year Ending	 	Maximum Expenditure
	31 March 2011
	 	9.010
	 
	 	 
	31 March 2012
	 	8.800
	 
	 	 
	31 March 2013
	 	10.560
	 
	 	 
	31 March 2014
	 	10.890
	 
	 	 
	31 March 2015
	 	9.350

	 	 	If in any Financial Year (the Original Financial Year) the amount of the Capital
Expenditure is less than the maximum amount permitted for that Original Financial Year (the
difference being referred to below is the Unused Amount), then the maximum expenditure
amount set out in column 2 above for the immediately following Financial Year (the Carry
Forward Year) shall for the purpose of that Carry Forward Year only be increased by an
amount (the Permitted Carry Forward Amount) equal to the lower of (1) the Unused Amount and
(2) 25% of the maximum amount permitted for the Original Financial Year.
	 
	 	 	In any Carry Forward Year, the original amount specified in column 2 above shall be treated
as having been incurred prior to any Permitted Carry Forward Amount carried forward into
that Carry Forward Year and no amount carried forward into that Carry Forward Year may be
carried forward into a subsequent Financial Year.
	 
	 	 	The Unused Amount shall be subject to indexation as follows: in respect of a particular
month, the Unused Amount shall be multiplied by the Index Figure for that month divided by
the Index Figure in respect of the last month in the immediately preceding Financial Year.

Page 72

 

	22.3	 	Financial testing
	 
	(a)	 	The financial covenants set out in Clause 22.2 (Financial condition) shall be calculated in
accordance with the Accounting Principles and tested by reference to each of the financial
statements delivered pursuant to paragraphs (a)(i) and 21.1(b)(i) of Clause 21.1 (Financial
statements) and/or each Compliance Certificate delivered pursuant to Clause 21.2 (Provision
and contents of Compliance Certificate).
	 
	(b)	 	If at any time there appears to be, in the reasonable opinion of the Agent, a material
discrepancy, inconsistency or error in any of the financial information provided to it by the
Borrower or any other Obligor, the Agent may require the Borrower or, as the case may be, such
other Obligor, at the cost of the Borrower or, as the case may be, such other Obligor, to have
such financial information reviewed by the Auditors of the Group, if reasonably required by
the Agent and a copy of the auditors’ report with respect thereto shall be delivered to the
Agent.

22.4 IFRS replacing GAAP

If and to the extent the Group changes its Accounting Principles to IFRS or to the extent any
changes are made to GAAP or IFRS during the life of the Facility, the Borrower and the Agent shall
agree (in good faith and acting reasonably) such amendments to this Agreement as are necessary to
reflect such change, including without limitation, amending the definitions and financial covenants
contained in this Clause 22 (Financial Covenants). To the extent the terms of this Agreement are
breached solely as a result of IFRS replacing GAAP, such breach shall be waived until such time as
this Agreement is amended.

23.
GENERAL UNDERTAKINGS

The undertakings in this Clause 23 (General undertakings) remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is
in force.

Authorisations and compliance with laws

 23.1 Authorisations

Each Obligor shall (and the Borrower shall ensure that each member of the Group will) promptly:

	(a)	 	obtain, comply with and do all that is necessary to maintain in full force and effect; and
	 
	(b)	 	upon request by the Agent, supply certified copies to the Agent of,

any Authorisation (including, without limitation, the Instrument of Appointment) required under any
law or regulation of a Relevant Jurisdiction to:

	 	(i)	 	enable it to perform its obligations under the Finance Documents;
	 
	 	(ii)	 	ensure the legality, validity, enforceability or admissibility in evidence of
any Finance Document; and
	 
	 	(iii)	 	carry on its business where failure to do so has or is reasonably likely to
have a Material Adverse Effect.

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	23.2	 	Compliance with laws

Each Obligor shall (and the Borrower shall ensure that each member of the Group will) comply in all
respects with all laws to which it may be subject, if failure so to comply has or is reasonably
likely to have a Material Adverse Effect.

	23.3	 	Environmental compliance

Each Obligor shall (and the Borrower shall ensure that each member of the Group will):

	(a)	 	comply with all Environmental Laws;
	 
	(b)	 	obtain, maintain and ensure compliance with all requisite Environmental Permits;
	 
	(c)	 	implement procedures to monitor compliance with and to prevent liability under any
Environmental Law;
	 
	(d)	 	comply with all other covenants, conditions, restrictions or agreements directly or
indirectly concerned with any contamination, pollution or waste or the release or discharge of
any toxic or hazardous substance in connection with any real property which is or was at any
time owned, leased or occupied by any member of the Group or on which any member of the Group
has conducted any activity,

where failure to do so has or is reasonably likely to have a Material Adverse Effect.

23.4 Environmental claims 

Each Obligor shall (through the Borrower), promptly upon becoming aware of the same, inform the
Agent in writing of:

	(a)	 	any Environmental Claim against any member of the Group which is current, pending or
threatened; and
	 
	(b)	 	any facts or circumstances which are reasonably likely to result in any Environmental Claim
being commenced or threatened against any member of the Group,

where the claim is reasonably likely to be adversely determined against that member of the Group
and, if determined against that member of the Group, has or is reasonably likely to have a Material
Adverse Effect.

23.5 Taxation

	 
	(a)	 	Each Obligor shall (and the Borrower shall ensure that each member of the Group will) pay and
discharge all Taxes imposed upon it or its assets within the time period allowed without
incurring penalties unless and only to the extent that:

	 	(i)	 	such payment is being contested in good faith;
	 
	 	(ii)	 	adequate reserves are being maintained for those Taxes and the costs required
to contest them which have been disclosed in its latest financial statements delivered
to the Agent under Clause 21.1 (Financial statements); and
	 
	 	(iii)	 	such payment can be lawfully withheld and failure to pay those Taxes does
not have or is not reasonably likely to have a Material Adverse Effect.

Page 74

 

	(b)	 	No member of the Group may change its residence for Tax purposes.

Restrictions on business focus

	23.6	 	Merger

No Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter into
any amalgamation, demerger, merger, consolidation or corporate reconstruction other than a
Permitted Transaction.

23.7 Change of business

	 
	(a)	 	The Borrower shall procure that no substantial change is made to the general nature of the
business of the Group taken as a whole from that carried on by the Group taken as a whole at
the date of this Agreement.
	 
	(b)	 	The Borrower shall procure that no substantial change is made to the general nature of the
business of the Licensed Undertaking from that carried on by the Licensed Undertaking at the
date of this Agreement, except to the extent permitted under the terms of the Artesian STID.
	 
	(c)	 	The Borrower shall procure that no change is made to the business of the Group which results
or would reasonably be expected to result in the termination, suspension or revocation of the
Instrument of Appointment.

23.8 Conduct of business

	 
	(a)	 	Each Obligor shall operate, maintain and conduct its business in accordance with its
memorandum and articles of association and this Agreement.
	 
	(b)	 	The Borrower shall ensure that the Licensed Undertaking shall operate, maintain and conduct
its business in accordance with:

	 	(i)	 	its memorandum and articles of association;
	 
	 	(ii)	 	the Instrument of Appointment and the Water Act; and
	 
	 	(iii)	 	Good Industry Practice where failure to do so has or would be reasonably
likely to have a Material Adverse Effect.

 23.9 Directors

The Borrower shall procure that the Licensed Undertaking shall maintain the composition of its
board of directors in accordance with the requirements of OFWAT.

23.10 Acquisitions

	 
	(a)	 	Except as permitted under paragraph (b) below, no Obligor shall (and the Borrower shall
ensure that no other member of the Group will):

	 	(i)	 	acquire a company or any shares or securities or a business or undertaking
(or, in each case, any interest in any of them);
	 
	 	(ii)	 	acquire any assets; or

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	 	(iii)	 	incorporate a company.

	(b)	 	Paragraph (a) above does not apply to an acquisition of a company, of shares, securities or a
business or undertaking or assets (or, in each case, any interest in any of them) or the
incorporation of a company which is:

	 	(i)	 	a Permitted Acquisition; or
	 
	 	(ii)	 	a Permitted Transaction.

23.11 Joint ventures

No Obligor shall (and the Borrower shall ensure that no member of the Group will):

	(a)	 	enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or
other interest in any Joint Venture; or
	 
	(b)	 	transfer any assets or lend to or guarantee or give an indemnity for or give Security for the
obligations of a Joint Venture or maintain the solvency of or provide working capital to any
Joint Venture (or agree to do any of the foregoing).

23.12 Holding Companies

Neither the Borrower nor Holdco shall trade, carry on any business, own any assets or incur any
liabilities except for:

	(a)	 	the provision of administrative services (excluding treasury services) to other members of
the Group of a type customarily provided by a holding company to its Subsidiaries;
	 
	(b)	 	ownership of shares in its Subsidiaries, intra-Group debit balances (which includes, for the
avoidance of doubt, debt balances owed by it in respect of a Subordinated Loan), intra-Group
credit balances (which includes, for the avoidance of doubt, credit balances owed to it in
respect of the On-Loan) and other credit balances in bank accounts, cash and Cash Equivalent
Investments but only if (in the case of the Borrower and each member of the Group that is
required to grant Security under Clauses 4.2 (Initial conditions precedent to Utilisation) and
27.2 (Additional Guarantors)) those shares, credit balances, cash and Cash Equivalent
Investments are subject to the Transaction Security;
	 
	(c)	 	any liabilities under the Finance Documents or the Artesian Finance Documents to which it is
a party and professional fees and administration costs in the ordinary course of business as a
holding company; and
	 
	(d)	 	in connection with the making or receipt of payments in respect of a Permitted Distribution.

23.13 The Water Act

The Borrower shall procure that the Licensed Undertaking shall not (to the extent its agreement is
required for the same) agree:

	(a)	 	any Transfer Scheme (other than following receipt of a notice of termination) unless an
independent financial adviser acceptable to the Majority Lenders (provided that

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	 	 	any independent financial adviser which is acceptable under the Artesian STID shall be
acceptable to the Majority Lenders) has certified to the Agent that such Transfer Scheme
will not be materially prejudicial to the interests of the Lenders or that no Transfer
Scheme which is materially prejudicial to such interest is likely to be forthcoming prior
to the Repayment Date; or
	 
	(b)	 	any variation to the Instrument of Appointment which has or would have a Material Adverse
Effect.

23.14 Dormant Subsidiaries

The Borrower shall not cause or permit any member of the Group which is a Dormant Subsidiary to
commence trading or cease to satisfy the criteria for a Dormant Subsidiary without the prior
consent of the Agent (acting reasonably).

Restrictions on dealing with assets and Security

23.15 Preservation of assets

Each Obligor shall (and the Borrower shall ensure that each member of the Group will) maintain in
good working order and condition (ordinary wear and tear excepted) all of its assets necessary or,
in its reasonable opinion, desirable in the conduct of its business.

23.16 Pari passu ranking

Each Obligor shall ensure that at all times any unsecured and unsubordinated claims of a Finance
Party against it under the Finance Documents rank at least pari passu with the claims of all its
other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily
preferred by laws of general application to companies.

23.17 Negative pledge

In this Clause 23.17 (Negative pledge), Quasi-Security means an arrangement or transaction
described in paragraph (b) below.

Except as permitted under paragraph (c) below:

	(a)	 	No Obligor shall (and the Borrower shall ensure that no other member of the Group will)
create or permit to subsist any Security over any of its assets.
	 
	(b)	 	No Obligor shall (and the Borrower shall ensure that no other member of the Group will):

	 	(i)	 	sell, transfer or otherwise dispose of any of its assets on terms whereby
they are or may be leased to or re-acquired by an Obligor or any other member of the
Group;
	 
	 	(ii)	 	sell, transfer or otherwise dispose of any of its receivables on recourse
terms;
	 
	 	(iii)	 	enter into any arrangement under which money or the benefit of a bank or
other account may be applied, set-off or made subject to a combination of accounts; or
	 
	 	(iv)	 	enter into any other preferential arrangement having a similar effect,

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	 	 	in circumstances where the arrangement or transaction is entered into primarily as a method
of raising Financial Indebtedness or of financing the acquisition of an asset.
	 
	(c)	 	Paragraphs (a) and (b) above do not apply to any Security or (as the case may be)
Quasi-Security, which is:

	 	(i)	 	Permitted Security; or
	 
	 	(ii)	 	a Permitted Transaction.

23.18 Disposals

	 
	(a)	 	Except as permitted under paragraph (b) below, no Obligor shall (and the Borrower shall
ensure that no member of the Group will) enter into a single transaction or a series of
transactions (whether related or not) and whether voluntary or involuntary to sell, lease,
transfer or otherwise dispose of any asset.
	 
	(b)	 	Paragraph (a) above does not apply to any sale, lease, transfer or other disposal which is:

	 	(i)	 	a Permitted Disposal; or
	 
	 	(ii)	 	a Permitted Transaction.

23.19 Arm’s length basis

	 
	(a)	 	Except as permitted by paragraph (b) below, no Obligor shall (and the Borrower shall ensure
no member of the Group will) enter into any transaction with any person except:

	 	(i)	 	for full market value on arm’s length terms (and, in the case of the Licensed
Undertaking, on terms as to comply with Regulatory Accounting Guideline 5); or
	 
	 	(ii)	 	on terms which are favourable or advantageous to a member of the Group.

	(b)	 	The following transactions shall not be a breach of this Clause 23.19 (Arm’s length basis):

	 	(i)	 	intra-Group loans permitted under Clause 23.20 (Loans or credit);
	 
	 	(ii)	 	fees, costs and expenses payable under the Finance Documents in the amounts
set out in the Finance Documents delivered to the Agent under Clause 4.2 (Initial
conditions precedent to Utilisation) or agreed by the Agent;
	 
	 	(iii)	 	any Permitted Transaction (other than a Permitted Transaction that complies
with paragraphs (c) or (e) of the definition of that term);
	 
	 	(iv)	 	any Permitted Distribution; or
	 
	 	(v)	 	any Permitted Share Issue.

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Restrictions on movement of cash — cash out

23.20 Loans or credit

	 
	(a)	 	Except as permitted under paragraph (b) below, no Obligor shall (and the Borrower shall
ensure that no member of the Group will) be a creditor in respect of any Financial
Indebtedness.
	 
	(b)	 	Paragraph (a) above does not apply to:

	 	(i)	 	a Permitted Loan; or
	 
	 	(ii)	 	a Permitted Transaction.

23.21 No Guarantees or indemnities

	 
	(a)	 	Except as permitted under paragraph (b) below, no Obligor shall (and the Borrower shall
ensure that no member of the Group will) incur or allow to remain outstanding any guarantee in
respect of any obligation of any person.
	 
	(b)	 	Paragraph (a) does not apply to a guarantee which is:

	 	(i)	 	a Permitted Guarantee; or
	 
	 	(ii)	 	a Permitted Transaction.

23.22 Dividends and share redemption

	 
	(a)	 	Except as permitted under paragraph (b) below, the Borrower shall not (and will ensure that
no other member of the Group will):

	 	(i)	 	declare, make or pay any dividend, charge, fee or other distribution (or
interest on any unpaid dividend, charge, fee or other distribution) (whether in cash
or in kind) on or in respect of its share capital (or any class of its share capital);
	 
	 	(ii)	 	repay or distribute any dividend or share premium reserve;
	 
	 	(iii)	 	pay or allow any member of the Group to pay any management, advisory or
other fee to or to the order of any of the shareholders of the Borrower; or
	 
	 	(iv)	 	redeem, repurchase, defease, retire or repay any of its share capital or
resolve to do so.

	(b)	 	Paragraph (a) above does not apply to:

	 	(i)	 	a Permitted Distribution; or
	 
	 	(ii)	 	a Permitted Transaction (other than a Permitted Transaction referred to in
paragraph (d) of the definition of that term).

	(c)	 	If, following receipt by the Agent of the annual audited financial statements of the Group
and related Compliance Certificate, those statements and Compliance Certificate demonstrate
that a Permitted Distribution was made by the Borrower

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	 	 	under paragraph (a) of the definition thereof in
respect of a previous Financial Quarter where it
should not have been made, then the Borrower
shall deduct the amount by which that Permitted
Distribution made during the relevant Financial
Year exceeds the amount that should have been
distributed (an Excess Distribution) from the
immediately succeeding Permitted
Distributions(s) which, were it not for the
provisions of this paragraph (c), would
otherwise have been made under paragraph (b) of
the definition of Permitted Distribution.

Restrictions on movement of cash — cash in

23.23 Financial Indebtedness

	 
	(a)	 	Except as permitted under paragraph (b) below, no Obligor shall (and the Borrower shall
ensure that no member of the Group will) incur or allow to remain outstanding any Financial
Indebtedness.
	 
	(b)	 	Paragraph (a) above does not apply to Financial Indebtedness which is:

	 	(i)	 	Permitted Financial Indebtedness; or
	 
	 	(ii)	 	a Permitted Transaction.

23.24 Share capital

No Obligor shall (and the Borrower shall ensure no member of the Group will) issue any shares
except pursuant to:

	(a)	 	a Permitted Share Issue; or
	 
	(b)	 	a Permitted Transaction.

Miscellaneous

23.25 Insurance

	 
	(a)	 	Each Obligor shall (and the Borrower shall ensure that each member of the Group will) effect
and maintain with reputable underwriters or insurance companies insurances on and in relation
to its assets and its business of a type and in an amount as is usual for companies carrying
on the same, or substantially the same business provided such insurance is available in the
market on commercially reasonable terms. If self insured, insurance shall be effected and
maintained with an entity that has sufficient financial resources to meet potential claims
under such insurance policies and which operates in accordance with Good Industry Practice.
	 
	(b)	 	The Borrower shall (if so requested by the Agent in writing) supply the Agent with copies of
all such insurance policies or certificates of insurance maintained pursuant to paragraph (a)
above.

23.26 Pensions

	 
	(a)	 	The Borrower shall ensure that all pension schemes, including without limitation the Pension
Scheme operated by or maintained for the benefit of members of the Group and/or any of their
employees (the Current Schemes), are funded in accordance with, and otherwise in material
compliance with, the Schedules of Contributions agreed in

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	 	 	accordance with section 227 of the Pensions Act 2004 in respect of such Current Schemes
which is from time to time in force in respect of such Current Schemes.
	 
	(b)	 	The Borrower shall ensure that no action or omission is taken by any member of the Group in
relation to such a Current Scheme which has, or is reasonably likely to have, a Material
Adverse Effect (including, without limitation, the termination or commencement of winding-up
proceedings of any such Current Scheme or any member of the Group who employs members in a
Current Scheme ceasing to employ a person who is an active member of that Current Scheme).
	 
	(c)	 	Except for the Pension Scheme, the Borrower shall ensure that no member of the Group is or
will be at any time an employer (for the purposes of sections 38 to 51 of the Pensions Act
2004) of an occupational pension scheme (as defined in the Pension Schemes Act 1993) which is
subject to sections 75 or 75A of the Pensions Act 1995.
	 
	(d)	 	The Borrower shall deliver to the Agent as soon as reasonably practicable, but in any case
within 10 days, after those reports are prepared in order to comply with the then current
statutory or auditing requirements (as applicable either to the trustees of any relevant
schemes or to the Borrower), actuarial reports in relation to the Current Schemes.
	 
	(e)	 	The Borrower shall promptly notify the Agent as soon as reasonably practicable, but in any
case within 10 days, of any material change in the rate of contributions to any Current
Schemes paid or recommended to be paid (by the scheme actuary or otherwise) or required (by
law or otherwise).
	 
	(f)	 	Each Obligor shall within five days notify the Agent in writing of any investigation of which
it is aware by the Pensions Regulator which it anticipates may lead to the wind up of a
Current Scheme or to the issue of a Financial Support Direction or a Contribution Notice to
it/any member of the Group.
	 
	(g)	 	Each Obligor shall within five days notify the Agent in writing if it receives a Financial
Support Direction or a Contribution Notice (or a warning notice in respect of either) from the
Pensions Regulator.

23.27 Access

If a Default is continuing or the Agent reasonably suspects a Default is continuing, each Obligor
shall, and the Borrower shall ensure that each member of the Group will, (not more than once in
every Financial Year unless the Agent reasonably suspects a Default is continuing) permit the Agent
and/or the Security Trustee and/or accountants or other professional advisers and contractors of
the Agent or Security Trustee free access at all reasonable times and on reasonable notice at the
risk and cost of the Obligor or Borrower to (a) the premises, assets, books, accounts and records
of each member of the Group and (b) meet and discuss matters with Senior Management.

23.28 Intellectual Property

	 
	(a)	 	Each Obligor shall (and the Borrower shall procure that each Group member will):

	 	(i)	 	preserve and maintain the subsistence and validity of the Intellectual
Property necessary for the business of the relevant Group member;

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	 	(ii)	 	use reasonable endeavours to prevent any infringement in any material respect
of the Intellectual Property;
	 
	 	(iii)	 	make registrations and pay all registration fees and taxes necessary to
maintain the Intellectual Property necessary for its business in full force and effect
and record its interest in that Intellectual Property;
	 
	 	(iv)	 	not use or permit the Intellectual Property necessary for its business to be
used in a way or take any step or omit to take any step in respect of that
Intellectual Property which may materially and adversely affect the existence or value
of the Intellectual Property or imperil the right of any member of the Group to use
such property; and
	 
	 	(v)	 	not discontinue the use of the Intellectual Property necessary for its
business,

	 	 	where failure to do so, in the case of paragraphs (i) and (ii) above, or, in the case of
paragraphs (iv) and (v) above, such use, permission to use, omission or discontinuation, is
reasonably likely to have a Material Adverse Effect.
	 
	(b)	 	Failure to comply with any part of paragraph (a) above shall not be a breach of this Clause
23.28 (Intellectual Property) to the extent that any dealing with Intellectual Property which
would otherwise be a breach of paragraph (a) is contemplated by the definition of Permitted
Transaction.

23.29 Amendments

	 
	(a)	 	No Obligor shall (and the Borrower shall ensure that no member of the Group will) amend,
vary, novate, supplement, supersede, waive or terminate any term of a Finance Document or any
other document delivered to the Agent pursuant to Clause 4.2 (Initial conditions precedent to
Utilisation) or Clause 27 (Changes to the Obligors) or enter into any agreement with any
shareholders of the Borrower or any of their Affiliates which is not a member of the Group
except in writing:

	 	(i)	 	in accordance with the provisions of Clause 38 (Amendments and Waivers);
	 
	 	(ii)	 	prior to or on the Closing Date, with the prior written consent of the
Original Lenders; or
	 
	 	(iii)	 	after the Closing Date, in a way which could not be reasonably expected
materially and adversely to affect the interests of the Lenders.

	(b)	 	The Borrower shall promptly supply to the Agent a copy of any document relating to any of the
matters referred to in paragraphs (i) to (iii) above.
	 
	(c)	 	No Obligor shall (and the Borrower shall ensure that no member of the Group will) amend,
vary, novate, supplement, supersede, waive or terminate any term of any Artesian Finance
Document or any On-Loan Agreement or the Parent Loan Agreement, without the prior written
consent of the Agent.

23.30 Financial assistance

Each Obligor shall (and the Borrower shall procure each member of the Group will) comply in all
respects with sections 678 and 679 of the Companies Act 2006 and any equivalent

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legislation in other jurisdictions including in relation to the execution of the Transaction
Security Documents and payment of amounts due under this Agreement.

23.31 Group bank accounts

The Borrower shall ensure that all bank accounts of the Borrower shall be opened and maintained
with a Finance Party or an Affiliate of a Finance Party or an Acceptable Bank and are subject to
valid Security under the Transaction Security Documents.

23.32 Treasury Transactions

Except with the prior written consent of the Agent (such consent not to be unreasonably withheld or
delayed), no Obligor shall (and the Borrower will procure that no members of the Group will) enter
into any Treasury Transaction other any Treasury Transactions entered into at the date of this
Agreement or entered into from time to time on an arm’s length basis in relation to the forward
purchase of long term power costs in the ordinary course of trading of the Licensed Undertaking and
not for speculative purposes.

23.33 Guarantors

	 
	(a)	 	Subject to the provisions of paragraphs (b) and (c) below, the Borrower shall ensure that at
all times after the Closing Date, the aggregate of earnings before interest, tax, depreciation
and amortisation (calculated on the same basis as EBITDA, as defined in Clause 22 (Financial
Covenants)) of the Guarantors or the aggregate gross assets of the Guarantors (in each case
calculated on an unconsolidated basis and excluding all intra-group items and investments in
Subsidiaries of any member of the Group) represents not less than 95 per cent of EBITDA (as
defined in Clause 22 (Financial Covenants)) of consolidated gross assets of the Group.
	 
	(b)	 	The Borrower need only perform its obligations under paragraph (a) above if it is not
unlawful for the relevant person to become a Guarantor, that person becoming a Guarantor would
not result in personal liability for that person’s directors or other management or would not
be in breach of any Regulatory Restrictions or the terms of the Artesian Finance Documents.
Each Obligor must use, and must procure that the relevant person uses, all reasonable
endeavours lawfully available to avoid any such unlawfulness or personal liability. This
includes agreeing to a limit on the amount guaranteed. The Agent may (but shall not be
obliged to) agree to such a limit if, in its opinion, to do so would avoid the relevant
unlawfulness or personal liability.
	 
	(c)	 	For the avoidance of doubt, while any amount is outstanding under the Artesian Facility there
shall be no obligation on the Borrower to procure that the Licensed Undertaking or Holdco
accede as Guarantors.

23.34 Further assurance

	 
	(a)	 	Subject to the Agreed Security Principles, each Obligor shall (and the Borrower shall procure
that each member of the Group will) promptly do all such acts or execute all such documents
(including assignments, transfers, mortgages, charges, notices and instructions) as the
Security Trustee may reasonably specify (and in such form as the Security Trustee may
reasonably require in favour of the Security Trustee or its nominee(s)):

	 	(i)	 	to perfect the Security created or intended to be created under or evidenced
by the Transaction Security Documents (which may include the execution of

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	 	 	 	a mortgage, charge, assignment or other Security over all or any of the assets
which are, or are intended to be, the subject of the Transaction Security) or for
the exercise of any rights, powers and remedies of the Security Trustee or the
Finance Parties provided by or pursuant to the Finance Documents or by law;
	 
	 	(ii)	 	to confer on the Security Trustee or confer on the Finance Parties Security
over any property and assets of that Obligor located in any jurisdiction equivalent or
similar to the Security intended to be conferred by or pursuant to the Transaction
Security Documents; and/or
	 
	 	(iii)	 	to facilitate the realisation of the assets which are, or are intended to
be, the subject of the Transaction Security.

	(b)	 	Each Obligor shall (and the Borrower shall procure that each member of the Group shall) take
all such action as is available to it (including making all filings and registrations) as may
be necessary for the purpose of the creation, perfection, protection or maintenance of any
Security conferred or intended to be conferred on the Security Trustee or the Finance Parties
by or pursuant to the Finance Documents.

24. EVENTS OF DEFAULT

Each of the events or circumstances set out in this Clause 24 (Events of Default) is an Event of
Default (save for Clause 24.23 (Acceleration)).

24.1 Non-payment

An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the
place at and in the currency in which it is expressed to be payable unless:

	(a)	 	its failure to pay is caused by:

	 	(i)	 	administrative or technical error; or
	 
	 	(ii)	 	a Disruption Event; and

	(b)	 	payment is made within 3 Business Days of its due date.

24.2 Financial covenants and other obligations

	 
	(a)	 	Any requirement of Clause 22 (Financial covenants) is not satisfied or an Obligor does not
comply with the provisions of Clause 21 (Information Undertakings).
	 
	(b)	 	An Obligor or the Parent does not comply with any provision of any Transaction Security
Document.
	 
	(c)	 	No Event of Default under paragraph (b) above will occur if the failure to comply is capable
of remedy and is remedied within 15 Business Days of the earlier of (i) the Agent giving
notice to the Borrower, the Parent or relevant Obligor and (ii) the Borrower, the Parent or an
Obligor becoming aware of the failure to comply.

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24.3 Other obligations

	 
	(a)	 	An Obligor or the Parent does not comply with any provision of the Finance Documents (other
than those referred to in Clause 24.1 (Non-payment), Clause 24.2 (Financial covenants and
other obligations) and Clause 24.5 (Artesian Facility)).
	 
	(b)	 	No Event of Default under paragraph (a) above will occur if the failure to comply is capable
of remedy and is remedied within 15 Business Days of the earlier of (i) the Agent giving
notice to the Borrower or relevant Obligor and (ii) the Borrower or an Obligor becoming aware
of the failure to comply.

24.4 Misrepresentation

	 
	(a)	 	Any representation or statement made or deemed to be made by an Obligor or the Parent in the
Finance Documents or any other document delivered by or on behalf of any Obligor or the Parent
under or in connection with any Finance Document is or proves to have been incorrect or
misleading when made or deemed to be made.
	 
	(b)	 	No Event of Default under paragraph (a) above will occur if the facts or circumstances
underlying the misrepresentation are capable of remedy and are remedied within 15 Business
Days of the earlier of (i) the Agent giving notice to the Borrower, Parent or relevant Obligor
and (ii) the Borrower, Parent or an Obligor becoming aware of the misrepresentation.

24.5 Artesian Facility

	 
	(a)	 	Any of the following occurs:

	 	(i)	 	a Trigger Event (as such term is defined in the Artesian STID);
	 
	 	(ii)	 	a Potential Acceleration Event (as such term is defined in the Artesian
STID);
	 
	 	(iii)	 	a breach of clause 8.12 (Rating) of the Artesian STID; or
	 
	 	(iv)	 	a non-payment of interest under clause 6 (Interest) of the On-Loan Agreement
and such non-payment is not remedied with 5 days,

	 	 	and results (or will result) in the Licensed Undertaking being prohibited from making a
Scheduled Distribution.
	 
	(b)	 	No Event of Default under paragraph (a) above will occur if the Borrower adduces evidence in
form and substance satisfactory to the Agent (acting reasonably) not less than 20 days after
the occurrence of any of (i) to (iv) above that it has sufficient cash resources to meet its
payment obligations under the Finance Documents for the immediately succeeding twelve months.
	 
	(c)	 	On each Quarter Date following the provision of evidence set out in paragraph (b) until such
date that the Licensed Undertaking is no longer prohibited from making a Scheduled
Distribution due to the occurrence of any of the events set out in paragraph (a) (i) to (iv)
above, the Borrower shall adduce evidence in form and substance satisfactory to the Agent
(acting reasonably) that it has sufficient cash resources to meet its payment obligations
under the Finance Documents for the immediately succeeding twelve months from the relevant
Quarter Date and, provided that such

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	 	 	evidence is adduced, there shall be no Event of Default under this Clause 24.5 (Artesian
Facility).

In this Clause 24.5 (Artesian Facility), Scheduled Distribution means, in respect of the Licensed
Undertaking, the interim dividend and the final dividend made in December and August (respectively)
of each Financial Year.

24.6 Subordination Agreement

	(a)	 	Any party to a Subordination Agreement (other than a Finance Party or an Obligor) fails to
comply with the provisions of, or does not perform its obligations under, a Subordination
Agreement; or

	(b)	 	a representation or warranty given by that party in a Subordination Agreement is incorrect in
any material respect,

and, if the non-compliance or circumstances giving rise to the misrepresentation is capable of
remedy, it is not remedied within 15 Business Days of the earlier of the Agent giving notice to
that party or that party becoming aware of the non-compliance or misrepresentation.

24.7 Cross default

	(a)	 	Any Financial Indebtedness of any member of the Group is not paid when due nor within any
originally applicable grace period.

	(b)	 	Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes
due and payable prior to its specified maturity as a result of an event of default (however
described).

	(c)	 	Any commitment for any Financial Indebtedness of any member of the Group is cancelled or
suspended by a creditor of any member of the Group as a result of an event of default (however
described).

	(d)	 	Any creditor of any member of the Group becomes entitled to declare any Financial
Indebtedness of any member of the Group due and payable prior to its specified maturity as a
result of an event of default (however described).

	(e)	 	No Event of Default will occur under this Clause 24.7 (Cross default) if the aggregate amount
of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs
(a) to (d) above is less than £750,000 (as such amount is Indexed) (or its equivalent in any
other currency or currencies).

24.8 Insolvency

	(a)	 	A member of the Group or the Parent is unable or admits inability to pay its debts as they
fall due or is deemed to or declared to be unable to pay its debts under applicable law,
suspends or threatens to suspend making payments on any of its debts or, by reason of actual
or anticipated financial difficulties, commences negotiations with one or more of its
creditors with a view to rescheduling any of its indebtedness.

	(b)	 	The value of the assets of any member of the Group or the Parent is less than its liabilities
(taking into account contingent and prospective liabilities).

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	(c)	 	A moratorium is declared in respect of any indebtedness of any member of the Group or the
Parent. If a moratorium occurs, the ending of the moratorium will not remedy any Event of
Default caused by that moratorium.

24.9 Insolvency proceedings

	(a)	 	Any corporate action, legal proceedings or other procedure or step is taken in relation to:

	 	(i)	 	the suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration or reorganisation (by way of voluntary arrangement, scheme
of arrangement or otherwise) of any member of the Group or the Parent;
	 
	 	(ii)	 	a composition, compromise, assignment or arrangement with any creditor of any
member of the Group or the Parent by reason of actual or anticipated financial
difficulties;
	 
	 	(iii)	 	the appointment of a liquidator, receiver, administrative receiver,
administrator, compulsory manager or other similar officer in respect of any member of
the Group or the Parent or any of its assets in excess of £750,000 (as such amount is
Indexed); or
	 
	 	(iv)	 	enforcement of any Security over any assets of any member of the Group or the
Parent and where the value of the indebtedness secured is in excess of £750,000 (as
such amount is Indexed),

	 	 	or any analogous procedure or step is taken in any jurisdiction.
	 
	(b)	 	Paragraph (a) shall not apply to:

	 	(i)	 	any winding-up petition which is frivolous or vexatious and is discharged,
stayed or dismissed within 21 days of commencement; or

	 	(ii)	 	any step or procedure contemplated by paragraph (b) of the definition of
Permitted Transaction.

24.10 Creditors’ process

Any expropriation, attachment, sequestration, distress or execution or any analogous process in any
jurisdiction affects any asset or assets of a member of the Group or the Parent having an aggregate
value in excess of £750,000 (as such amount is Indexed) and is not discharged within 21 days.

24.11 Unlawfulness and invalidity

	(a)	 	Subject to the Legal Reservations, it is or becomes unlawful for an Obligor or the Parent to
perform any of its obligations under the Finance Documents or any Transaction Security created
or expressed to be created or evidenced by the Transaction Security Documents ceases to be
effective.

	(b)	 	Any obligation or obligations of any Obligor or the Parent under any Finance Documents are
not (subject to the Legal Reservations) or cease to be legal, valid,

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	 	 	binding or enforceable and the cessation individually or cumulatively materially and
adversely affects the interests of the Lenders under the Finance Documents.

	(c)	 	Any Finance Document ceases to be in full force and effect.

24.12 Cessation of business

Any member of the Group suspends or ceases to carry on (or threatens to suspend or cease to carry
on) all or a material part of its business except as a result of a Permitted Disposal or a
Permitted Transaction.

24.13 Change of ownership

	(a)	 	The Licensed Undertaking ceases to be a wholly-owned Subsidiary of Holdco; or

	(b)	 	Holdco ceases to be a wholly-owned Subsidiary of the Borrower.

24.14 Audit qualification

The Auditors of the Group qualify the audited annual consolidated financial statements of the
Borrower or any Subsidiary.

24.15 Expropriation

The authority or ability of any member of the Group to conduct its business is limited or wholly or
substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction
or other action by or on behalf of any governmental, regulatory or other authority or other person
in relation to any member of the Group or any of its assets.

24.16 Repudiation and rescission of agreements

An Obligor or the Parent (or any other relevant party) rescinds or purports to rescind or
repudiates or purports to repudiate a Finance Document or any of the Transaction Security or
evidences an intention to rescind or repudiate a Finance Document or any Transaction Security.

24.17 Litigation

Any litigation, arbitration, administrative, governmental, regulatory or other investigations,
proceedings or disputes are commenced or threatened in relation to the Finance Documents or the
transactions contemplated in the Finance Documents or against any member of the Group or its assets
which is reasonably likely to be adversely determined and which, if adversely determined, has or is
reasonably likely to have a Material Adverse Effect.

24.18 Pensions

The Pensions Regulator issues a Financial Support Direction or a Contribution Notice to any member
of the Group in circumstances where either:

	(a)	 	the Obligor has not notified the Agent in accordance with Clauses 23.26(f) or 23.26(g); or

	(b)	 	the aggregate liability of the Obligors under all Financial Support Directions and
Contributions Notices (due and payable during the life of the Facility) is more than

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	 	 	1.5 x the aggregate amount of liability for all Financial Support Directions and
Contribution Notices which are expected to be incurred during the life of the Facility as
identified in the Base Case Model.

24.19 Enforcement Orders

An Enforcement Order is made under section 18 of the Water Act against the Licensed Undertaking and
does or would reasonably be expected to lead to:

	(a)	 	the loss of the Instrument of Appointment; or

	(b)	 	a fine being levied against the Licensed Undertaking which has or would reasonably be
expected to have a Material Adverse Effect.

24.20 Licensed Undertaking Events

	(a)	 	An order is made in respect of the Licensed Undertaking under section 23 or section 24 of the
Water Act.

	(b)	 	The Instrument of Appointment is revoked, ceases to be in full force and effect or is altered
in a manner which would have a Material Adverse Effect, except in circumstances in which it is
replaced immediately by a further instrument of appointment granted to the Licensed
Undertaking on equivalent terms which permit the Licensed Undertaking to carry on its water
and sewerage business substantially as carried on at the date of this Agreement.

	(c)	 	A Special Administration Order is made in respect of the Licensed Undertaking.

	(d)	 	Following notice of termination of the Instrument of Appointment, the Licensed Undertaking
fails to put in place an approved Transfer Scheme by a date less than 5 years prior to the
expiration of such notice.

24.21 Governmental Intervention

By or under the authority of any government, regulatory or other authority (including any
Regulatory Authority):

	(a)	 	the management of any member of the Group is wholly or partially displaced or the authority
of any member of the Group in the conduct of its business is limited or wholly or partially
curtailed; or

	(b)	 	all or a majority of the issued shares of any member of the Group or the whole or any
material part of its revenues or assets is seized, nationalised, expropriated, compulsorily
acquired or otherwise restricted,

in each case where any such event has or would be reasonably likely to have a Material Adverse
Effect.

24.22 Material adverse change

Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse
Effect.

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24.23 Acceleration

On and at any time after the occurrence of an Event of Default which is continuing the Agent may,
and shall if so directed by the Majority Lenders, by notice to the Borrower:

	(a)	 	cancel the Total Commitments at which time they shall immediately be cancelled;

	(b)	 	declare that all or part of the Utilisations, together with accrued interest, and all other
amounts accrued or outstanding under the Finance Documents be immediately due and payable, at
which time they shall become immediately due and payable;

	(c)	 	declare that all or part of the Utilisations be payable on demand, at which time they shall
immediately become payable on demand by the Agent on the instructions of the Majority Lenders;
and/or

	(d)	 	exercise or direct the Security Trustee to exercise any or all of its rights, remedies,
powers or discretions under the Finance Documents.

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SECTION 9

CHANGES TO PARTIES

25. CHANGES TO THE LENDERS

25.1 Assignments and transfers by the Lenders

Subject to this Clause 25 (Changes to the Lenders) and to Clause 26 (Restriction on Debt Purchase
Transactions), a Lender (the Existing Lender) may:

	(a)	 	assign any of its rights; or

	(b)	 	transfer by novation any of its rights and obligations,

under any Finance Document to another bank or financial institution or to a trust, fund or other
entity which is regularly engaged in or established for the purpose of making, purchasing or
investing in loans, securities or other financial assets and which is a Qualifying Lender (the New
Lender).

25.2 Conditions of assignment or transfer

	(a)	 	An Existing Lender must consult with the Borrower for no more than five days before it may
make an assignment or transfer in accordance with Clause 25.1 (Assignments and transfers by
the Lenders) unless the assignment or transfer is:

	 	(i)	 	to another Lender or an Affiliate of a Lender;

	 	(ii)	 	if the Existing Lender is a fund, to a fund which is a Related Fund of the
Existing Lender; or

	 	(iii)	 	made at any time when an Event of Default is continuing.

	(b)	 	An assignment will only be effective on:

	 	(i)	 	receipt by the Agent (whether in the Assignment Agreement or otherwise) of
written confirmation from the New Lender (in form and substance satisfactory to the
Agent) that the New Lender will assume the same obligations to the other Finance
Parties and the other Secured Parties as it would have been under if it was an
Original Lender; and

	 	(ii)	 	the performance by the Agent of all necessary “know your customer” or other
similar checks under all applicable laws and regulations in relation to such
assignment to a New Lender, the completion of which the Agent shall promptly notify to
the Existing Lender and the New Lender.

	(c)	 	A transfer will only be effective if the procedures set out in Clause 25.5 (Procedures for
transfer) are complied with.

	(d)	 	If:

	 	(i)	 	a Lender assigns or transfers any of its rights or obligations under the
Finance Documents or changes its Facility Office; and

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	 	(ii)	 	as a result of circumstances existing at the date the assignment, transfer or
change occurs, an Obligor would be obliged to make a payment to the New Lender or
Lender acting through its new Facility Office under Clause 15 (Increased Costs),

	 	 	then the New Lender or Lender acting through its new Facility Office is only entitled to
receive payment under that Clause to the same extent as the Existing Lender or Lender
acting through its previous Facility Office would have been if the assignment, transfer or
change had not occurred.

	(e)	 	Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement,
confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf
any amendment or waiver that has been approved by or on behalf of the requisite Lender or
Lenders in accordance with this Agreement on or prior to the date on which the transfer or
assignment becomes effective in accordance with this Agreement and that it is bound by that
decision to the same extent as the Existing Lender would have been had it remained a Lender.

25.3 Assignment or transfer fee

Unless the Agent otherwise agrees and excluding an assignment or transfer (i) to an Affiliate of a
Lender or (ii) to a Related Fund the New Lender shall, on the date upon which an assignment or
transfer takes effect, pay to the Agent (for its own account) a fee of £2,000.

25.4 Limitation of responsibility of Existing Lenders

	(a)	 	Unless expressly agreed to the contrary, an Existing Lender makes no representation or
warranty and assumes no responsibility to a New Lender for:

	 	(i)	 	the legality, validity, effectiveness, adequacy or enforceability of the
Finance Documents, the Transaction Security or any other documents;

	 	(ii)	 	the financial condition of any Obligor;

	 	(iii)	 	the performance and observance by any Obligor or any other member of the
Group of its obligations under the Finance Documents or any other documents; or

	 	(iv)	 	the accuracy of any statements (whether written or oral) made in or in
connection with any Finance Documents or any other document,

	 	 	and any representations or warranties implied by law are excluded.
	 

	(b)	 	Each New Lender confirms to the Existing Lender, the other Finance Parties and the Secured
Parties that it:

	 	(i)	 	has made (and shall continue to make) its own independent investigation and
assessment of the financial condition and affairs of each Obligor and its related
entities in connection with its participation in this Agreement and has not relied
exclusively on any information provided to it by the Existing Lender or any other
Finance Party in connection with any Finance Documents or the Transaction Security;
and

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	 	(ii)	 	will continue to make its own independent appraisal of the creditworthiness
of each Obligor and its related entities whilst any amount is or may be outstanding
under the Finance Documents or any Commitment is in force.

	(c)	 	Nothing in any Finance Document obliges an Existing Lender to:

	 	(i)	 	accept a re-transfer or re-assignment from a New Lender of any of the rights
and obligations assigned or transferred under this Clause 25 (Changes to the Lenders);
or

	 	(ii)	 	support any losses directly or indirectly incurred by the New Lender by
reason of the non-performance by any Obligor of its obligations under the Finance
Documents or otherwise.

25.5 Procedure for transfer

	(a)	 	Subject to the conditions set out in Clause 25.2 (Conditions of assignment or transfer) a
transfer is effected in accordance with paragraph (c) below when the Agent executes an
otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the
New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably
practicable after receipt by it of a duly completed Transfer Certificate appearing on its face
to comply with the terms of this Agreement and delivered in accordance with the terms of this
Agreement, execute that Transfer Certificate.

	(b)	 	The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the
Existing Lender and the New Lender once it is satisfied it has complied with all necessary
“know your customer” or similar checks under all applicable laws and regulations in relation
to the transfer to such New Lender.

	(c)	 	On the Transfer Date:

	 	(i)	 	to the extent that in the Transfer Certificate the Existing Lender seeks to
transfer by novation its rights and obligations under the Finance Documents and in
respect of the Transaction Security each of the Obligors and the Existing Lender shall
be released from further obligations towards one another under the Finance Documents
and in respect of the Transaction Security and their respective rights against one
another under the Finance Documents and in respect of the Transaction Security shall
be cancelled (being the Discharged Rights and Obligations);

	 	(ii)	 	each of the Obligors and the New Lender shall assume obligations towards one
another and/or acquire rights against one another which differ from the Discharged
Rights and Obligations only insofar as that Obligor or other member of the Group and
the New Lender have assumed and/or acquired the same in place of that Obligor and the
Existing Lender;

	 	(iii)	 	the Agent, the Arranger, the Security Trustee, the New Lender and the other
Lenders shall acquire the same rights and assume the same obligations between
themselves and in respect of the Transaction Security as they would have acquired and
assumed had the New Lender been an Original Lender with the rights, and/or obligations
acquired or assumed by it as a result of the transfer and to that extent the Agent,
the Arranger, the Security Trustee and

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	 	 	 	the Existing Lender shall each be released from further obligations to each other
under the Finance Documents; and

	 	(iv)	 	the New Lender shall become a Party as a “Lender”.

25.6 Procedure for assignment

	(a)	 	Subject to the conditions set out in Clause 25.2 (Conditions of assignment or transfer) an
assignment may be effected in accordance with paragraph (c) below when the Agent executes an
otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the
New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably
practicable after receipt by it of a duly completed Assignment Agreement appearing on its face
to comply with the terms of this Agreement and delivered in accordance with the terms of this
Agreement, execute that Assignment Agreement.

	(b)	 	The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the
Existing Lender and the New Lender once it is satisfied it has complied with all necessary
“know your customer” or similar checks under all applicable laws and regulations in relation
to the assignment to such New Lender.

	(c)	 	On the Transfer Date:

	 	(i)	 	the Existing Lender will assign absolutely to the New Lender its rights under
the Finance Documents and in respect of the Transaction Security expressed to be the
subject of the assignment in the Assignment Agreement;

	 	(ii)	 	the Existing Lender will be released from the obligations (the Relevant
Obligations) expressed to be the subject of the release in the Assignment Agreement
(and any corresponding obligations by which it is bound in respect of the Transaction
Security); and

	 	(iii)	 	the New Lender shall become a Party as a “Lender” and will be bound by
obligations equivalent to the Relevant Obligations.

	(d)	 	Lenders may utilise procedures other than those set out in this Clause 25.6 (Procedure for
assignment) to assign their rights under the Finance Documents (but not, without the consent
of the relevant Obligor or unless in accordance with Clause 25.5 (Procedure for transfer), to
obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor
the assumption of equivalent obligations by a New Lender) provided that they comply with the
conditions set out in Clause 25.2 (Conditions of assignment or transfer).

25.7 Copy of Transfer Certificate or Assignment Agreement to Borrower

The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or
an Assignment Agreement, send to the Borrower a copy of that Transfer Certificate or Assignment
Agreement.

25.8 Security over Lenders’ rights

In addition to the other rights provided to Lenders under this Clause 25 (Changes to the Lenders),
each Lender may without consulting with or obtaining consent from any Obligor, at any time charge,
assign or otherwise create Security in or over (whether by way of collateral

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or otherwise) all or any of its rights under any Finance Document to secure obligations of that
Lender including, without limitation:

	(a)	 	any charge, assignment or other Security to secure obligations to a federal reserve or
central bank; and

	(b)	 	in the case of any Lender which is a fund, any charge, assignment or other Security granted
to any holders (or trustee or representatives of holders) of obligations owed, or securities
issued, by that Lender as security for those obligations or securities,

except that no such charge, assignment or Security shall:

	 	(i)	 	release a Lender from any of its obligations under the Finance Documents or
substitute the beneficiary of the relevant charge, assignment or other Security for
the Lender as a party to any of the Finance Documents; or

	 	(ii)	 	require any payments to be made by an Obligor or grant to any person any more
extensive rights than those required to be made or granted to the relevant Lender
under the Finance Documents.

26. RESTRICTION ON DEBT PURCHASE TRANSACTIONS

26.1 Prohibition on Debt Purchase Transactions by the Group

The Borrower shall not, and shall procure that each other member of the Group shall not, enter into
any Debt Purchase Transaction or beneficially own all or any part of the share capital of a company
that is a Lender or a party to a Debt Purchase Transaction of the type referred to in paragraphs
(b) or (c) of the definition of Debt Purchase Transaction.

26.2 Disenfranchisement on Debt Purchase Transactions entered into by Sponsor Affiliates

	(a)	 	For so long as a Sponsor Affiliate (i) beneficially owns a Commitment or (ii) has entered
into a sub-participation agreement relating to a Commitment or other agreement or arrangement
having a substantially similar economic effect and such agreement or arrangement has not been
terminated:

	 	(i)	 	in ascertaining the Majority Lenders or whether any given percentage
(including, for the avoidance of doubt, unanimity) of the Total Commitments has been
obtained to approve any request for a consent, waiver, amendment or other vote under
the Finance Documents such Commitment shall be deemed to be zero; and

	 	(ii)	 	for the purposes of Clause 38.2 (Exceptions), such Sponsor Affiliate or the
person with whom it has entered into such sub-participation, other agreement or
arrangement shall be deemed not to be a Lender (unless in the case of a person not
being a Sponsor Affiliate it is a Lender by virtue otherwise than by beneficially
owning the relevant Commitment).

	(b)	 	Each Lender shall, unless such Debt Purchase Transaction is an assignment or transfer,
promptly notify the Agent in writing if it knowingly enters into a Debt Purchase Transaction
with a Sponsor Affiliate (a Notifiable Debt Purchase Transaction), such notification to be
substantially in the form set out in

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		 	Part A of Schedule 12 (Forms of Notifiable Debt Purchase
Transaction Notice). 
	 
	(c)	 	A Lender shall promptly notify the Agent if a Notifiable Debt Purchase Transaction to which
it is a party:

	 	(i)	 	is terminated; or

	 	(ii)	 	ceases to be with a Sponsor Affiliate,

	 	 	such notification to be substantially in the form set out in Part B of Schedule 12 (Forms
of Notifiable Debt Purchase Transaction Notice).

	(d)	 	Each Sponsor Affiliate that is a Lender agrees that:

	 	(i)	 	in relation to any meeting or conference call to which all the Lenders are
invited to attend or participate, it shall not attend or participate in the same if so
requested by the Agent or, unless the Agent otherwise agrees, be entitled to receive
the agenda or any minutes of the same; and

	 	(ii)	 	in its capacity as Lender, unless the Agent otherwise agrees, it shall not be
entitled to receive any report or other document prepared at the behest of, or on the
instructions of, the Agent or one or more of the Lenders.

27. CHANGES TO THE OBLIGORS

27.1 Assignment and transfers by Obligors

No Obligor or any other member of the Group may assign any of its rights or transfer any of its
rights or obligations under the Finance Documents.

27.2 Additional Guarantors

	(a)	 	Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 21.10 (“Know
your customer” checks), the Borrower may request that any of its wholly owned Subsidiaries
become a Guarantor.

	(b)	 	The Borrower shall procure that any other member of the Group which is a Material Company
(other than, while any amounts are outstanding under the Artesian Facility Agreement, the
Licensed Undertaking or Holdco or any other Subsidiary that is prevented under the terms of an
Artesian Finance Document from acceding as an Additional Guarantor and/or from providing
Security for the Facility) shall, as soon as possible after becoming a Material Company and
subject to the Regulatory Restrictions become an Additional Guarantor and subject to the
Agreed Security Principles and the Regulatory Restrictions, grant such Security as the Agent
may request.

	(c)	 	A member of the Group shall become an Additional Guarantor if:

	 	(i)	 	the Borrower and the proposed Additional Guarantor deliver to the Agent a
duly completed and executed Accession Deed; and

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	 	(ii)	 	the Agent has received all of the documents and other evidence listed in
Part B of Schedule 2 (Conditions precedent required to be delivered by an Additional
Guarantor) in relation to that Additional Guarantor, each in form and substance
satisfactory to the Agent.

	(d)	 	The Agent shall notify the Borrower and the Lenders promptly upon being satisfied that it has
received (in form and substance satisfactory to it) all the documents and other evidence
listed in Part B of Schedule 2 (Conditions precedent required to be delivered by an Additional
Guarantor).

27.3 Resignation of a Guarantor

	(a)	 	The Borrower may request that a Guarantor (other than the Original Borrower) ceases to be a
Guarantor by delivering to the Agent a Resignation Letter if:

	 	(i)	 	that Guarantor is being disposed of by way of a Third Party Disposal (means
the disposal of an Obligor to a person which is not a member of the Group where that
disposal is permitted under Clause 23.18 (Disposals) or made with the approval of the
Majority Lenders) and the Borrower has confirmed this is the case and the Borrower has
confirmed this is the case; or

	 	(ii)	 	all the Lenders have consented to the resignation of that Guarantor.

	(b)	 	The Agent shall accept a Resignation Letter and notify the Borrower and the Lenders of its
acceptance if:

	 	(i)	 	the Borrower has confirmed that no Default is continuing or would result from
the acceptance of the Resignation Letter; and

	 	(ii)	 	no payment is due from the Guarantor under Clause 19.1 (Guarantee and
indemnity).

	(c)	 	The resignation of that Guarantor shall not be effective until the date of the relevant Third
Party Disposal at which time that company shall cease to be a Guarantor and shall have no
further rights or obligations under the Finance Documents as a Guarantor.

27.4 Repetition of Representations

Delivery of an Accession Deed constitutes confirmation by the relevant Subsidiary that the
representations and warranties referred to in paragraph (d) of Clause 20.30 (Times when
representations made) are true and correct in relation to it as at the date of delivery as if made
by reference to the facts and circumstances then existing.

27.5 Resignation and release of security on disposal

If a Borrower or Guarantor is or is proposed to be the subject of a Third Party Disposal then:

	(a)	 	where that Borrower or Guarantor created Transaction Security over any of its assets or
business in favour of the Security Trustee, or Transaction Security in favour of the Security
Trustee was created over the shares (or equivalent) of that Borrower or Guarantor, the
Security Trustee may, at the cost and request of the Borrower, release

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	 	 	those assets, business or shares (or equivalent) and issue certificates of non-crystallisation;

	(b)	 	the resignation of that Borrower or Guarantor and related release of Transaction Security
referred to in paragraph (a) above shall not become effective until the date of that disposal;
and

	(c)	 	if the disposal of that Borrower or Guarantor is not made, the Resignation Letter of that
Borrower or Guarantor and the related release of Transaction Security referred to in paragraph
(a) above shall have no effect and the obligations of the Borrower or Guarantor and the
Transaction Security created or intended to be created by or over that Borrower or Guarantor
shall continue in such force and effect as if that release had not been effected.

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SECTION 10

THE FINANCE PARTIES

	28.	 	ROLE OF THE AGENT, THE ARRANGER AND OTHERS
	 
	28.1	 	Appointment of the Agent
	 
	(a)	 	Each of the Arranger and the Lenders appoints the Agent to act as its agent under and in
connection with the Finance Documents.
	 
	(b)	 	Each of the Arranger and the Lenders authorises the Agent to exercise the rights, powers,
authorities and discretions specifically given to the Agent under or in connection with the
Finance Documents together with any other incidental rights, powers, authorities and
discretions.
	 
	28.2	 	Duties of the Agent
	 
	(a)	 	Subject to paragraph (b) below, the Agent shall promptly forward to a Party the original or a
copy of any document which is delivered to the Agent for that Party by any other Party.
	 
	(b)	 	Without prejudice to Clause 25.7 (Copy of Transfer Certificate or Assignment Agreement to
Borrower), paragraph (a) above shall not apply to any Transfer Certificate or any Assignment
Agreement.
	 
	(c)	 	Except where a Finance Document specifically provides otherwise, the Agent is not obliged to
review or check the adequacy, accuracy or completeness of any document it forwards to another
Party.
	 
	(d)	 	If the Agent receives notice from a Party referring to this Agreement, describing a Default
and stating that the circumstance described is a Default, it shall promptly notify the other
Finance Parties.
	 
	(e)	 	If the Agent is aware of the non-payment of any principal, interest, commitment fee or other
fee payable to a Finance Party (other than the Agent, the Arranger or the Security Trustee)
under this Agreement it shall promptly notify the other Finance Parties.
	 
	(f)	 	The Agent’s duties under the Finance Documents are solely mechanical and administrative in
nature.
	 
	28.3	 	Role of the Arranger

Except as specifically provided in the Finance Documents, the Arranger has no obligations of any
kind to any other Party under or in connection with any Finance Document.

	28.4	 	No fiduciary duties
	 
	(a)	 	Nothing in this Agreement constitutes the Agent and/or the Arranger as a trustee or fiduciary
of any other person.

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	(b)	 	None of the Agent, the Security Trustee or the Arranger, shall be bound to account to any
Lender for any sum or the profit element of any sum received by it for its own account.
	 
	28.5	 	Business with the Group

The Agent, the Security Trustee and the Arranger may accept deposits from, lend money to and
generally engage in any kind of banking or other business with any member of the Group.

	28.6	 	Rights and discretions
	 
	(a)	 	The Agent may rely on:

	 	(i)	 	any representation, notice or document believed by it to be genuine, correct
and appropriately authorised; and
	 
	 	(ii)	 	any statement made by a director, authorised signatory or employee of any
person regarding any matters which may reasonably be assumed to be within his
knowledge or within his power to verify.

	(b)	 	The Agent may assume (unless it has received notice to the contrary in its capacity as agent
for the Lenders) that:

	 	(i)	 	no Default has occurred (unless it has actual knowledge of a Default arising
under Clause 24.1 (Non-payment));
	 
	 	(ii)	 	any right, power, authority or discretion vested in any Party or the Majority
Lenders has not been exercised;
	 
	 	(iii)	 	any notice or request made by the Borrower (other than a Utilisation Request
or Selection Notice) is made on behalf of and with the consent and knowledge of all
the Obligors; and
	 
	 	(iv)	 	no Notifiable Debt Purchase Transaction:

	 	(A)	 	has been entered into;
	 
	 	(B)	 	has been terminated; or
	 
	 	(C)	 	has ceased to be with a Sponsor Affiliate.

	(c)	 	The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants,
surveyors or other experts.
	 
	(d)	 	The Agent may act in relation to the Finance Documents through its personnel and agents.
	 
	(e)	 	The Agent may disclose to any other Party any information it reasonably believes it has
received as agent under this Agreement.
	 
	(f)	 	Without prejudice to the generality of paragraph (e) above, the Agent may disclose the
identity of a Defaulting Lender to the other Finance Parties and the Borrower and shall
disclose the same upon the written request of the Borrower or the Majority Lenders.

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	(g)	 	Notwithstanding any other provision of any Finance Document to the contrary, none of the
Agent or the Arranger is obliged to do or omit to do anything if it would or might in its
reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary
duty or duty of confidentiality.
	 
	(h)	 	The Agent is not obliged to disclose to any Finance Party any details of the rate notified to
the Agent by any Lender or the identity of any such Lender for the purpose of paragraph
(a)(ii) of Clause 12.2 (Market disruption).

28.7 Majority Lenders’ instructions

	 
	(a)	 	Unless a contrary indication appears in a Finance Document, the Agent shall (i) exercise any
right, power, authority or discretion vested in it as Agent in accordance with any
instructions given to it by the Majority Lenders (or, if so instructed by the Majority
Lenders, refrain from exercising any right, power, authority or discretion vested in it as
Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking
any action) in accordance with an instruction of the Majority Lenders.
	 
	(b)	 	Unless a contrary indication appears in a Finance Document, any instructions given by the
Majority Lenders will be binding on all the Finance Parties other than the Security Trustee.
	 
	(c)	 	The Agent may refrain from acting in accordance with the instructions of the Majority Lenders
(or, if appropriate, the Lenders) until it has received such security as it may require for
any cost, loss or liability (together with any associated VAT) which it may incur in complying
with the instructions.
	 
	(d)	 	In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders)
the Agent may act (or refrain from taking action) as it considers to be in the best interest
of the Lenders.
	 
	(e)	 	The Agent is not authorised to act on behalf of a Lender (without first obtaining that
Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document.
This paragraph (e) shall not apply to any legal or arbitration proceeding relating to the
perfection, preservation or protection of rights under the Transaction Security Documents or
enforcement of the Transaction Security or Transaction Security Documents.

28.8 Responsibility for documentation

None of the Agent or the Arranger:

	(a)	 	is responsible for the adequacy, accuracy and/or completeness of any information (whether
oral or written) supplied by the Agent, the Arranger, an Obligor or any other person given in
or in connection with any Finance Document or the Information Memorandum or the transactions
contemplated in the Finance Documents;
	 
	(b)	 	is responsible for the legality, validity, effectiveness, adequacy or enforceability of any
Finance Document or the Transaction Security or any other agreement, arrangement or document
entered into, made or executed in anticipation of or in connection with any Finance Document
or the Transaction Security; or

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	(c)	 	is responsible for any determination as to whether any information provided or to be provided
to any Finance Party is non-public information the use of which may be regulated or prohibited
by applicable law or regulation relating to insider dealing or otherwise.
	 
	28.9	 	Exclusion of liability
	 
	(a)	 	Without limiting paragraph (b) below, the Agent will not be liable (including, without
limitation, for negligence or any other category of liability whatsoever) for any action taken
by it under or in connection with any Finance Document or the Transaction Security, unless
directly caused by its gross negligence or wilful misconduct.
	 
	(b)	 	No Party (other than the Agent) may take any proceedings against any officer, employee or
agent of the Agent, in respect of any claim it might have against the Agent or in respect of
any act or omission of any kind by that officer, employee or agent in relation to any Finance
Document and any officer, employee or agent of the Agent may rely on this Clause subject to
Clause 1.3 (Third party rights) and the provisions of the Third Parties Act.
	 
	(c)	 	The Agent will not be liable for any delay (or any related consequences) in crediting an
account with an amount required under the Finance Documents to be paid by the Agent if the
Agent has taken all necessary steps as soon as reasonably practicable to comply with the
regulations or operating procedures of any recognised clearing or settlement system used by
the Agent for that purpose.
	 
	(d)	 	Nothing in this Agreement shall oblige the Agent or the Arranger to carry out any “know your
customer” or other checks in relation to any person on behalf of any Lender and each Lender
confirms to the Agent and the Arranger that it is solely responsible for any such checks it is
required to carry out and that it may not rely on any statement in relation to such checks
made by the Agent or the Arranger.
	 
	28.10	 	Lenders’ indemnity to the Agent

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments
are then zero, to its share of the Total Commitments immediately prior to their reduction to zero)
indemnify the Agent, within three Business Days of demand, against any cost, loss or liability
incurred by the Agent (otherwise than by reason of the Agent’s gross negligence or wilful
misconduct) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed
by an Obligor pursuant to a Finance Document).

	28.11	 	Resignation of the Agent
	 
	(a)	 	The Agent may resign and appoint one of its Affiliates acting through an office in the United
Kingdom as successor by giving notice to the Lenders and the Borrower.
	 
	(b)	 	Alternatively the Agent may resign by giving 30 days notice to the Lenders and the Borrower,
in which case the Majority Lenders (after consultation with the Borrower) may appoint a
successor Agent.
	 
	(c)	 	If the Majority Lenders have not appointed a successor Agent in accordance with paragraph (b)
above within 20 days after notice of resignation was given, the retiring Agent (after
consultation with the Borrower) may appoint a successor Agent.

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	(d)	 	If the Agent wishes to resign because (acting reasonably) it has concluded that it is no
longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor
Agent under paragraph (c) above, the Agent may (if it concludes (acting reasonably) that it is
necessary to do so in order to persuade the proposed successor Agent to become a party to this
Agreement as Agent) agree with the proposed successor Agent amendments to this Clause 28 (Role
of the Agent, the Arranger and Others) and any other term of this Agreement dealing with the
rights or obligations of the Agent consistent with then current market practice for the
appointment and protection of corporate trustees together with any reasonable amendments to
the agency fee payable under this Agreement which are consistent with the successor Agent’s
normal fee rates and those amendments will bind the Parties.
	 
	(e)	 	The retiring Agent shall, at its own cost, make available to the successor Agent such
documents and records and provide such assistance as the successor Agent may reasonably
request for the purposes of performing its functions as Agent under the Finance Documents.
	 
	(f)	 	The Agent’s resignation notice shall only take effect upon the appointment of a successor.
	 
	(g)	 	Upon the appointment of a successor, the retiring Agent shall be discharged from any further
obligation in respect of the Finance Documents but shall remain entitled to the benefit of
this Clause 28 (Role of the Agent, the Arranger and Others). Any successor and each of the
other Parties shall have the same rights and obligations amongst themselves as they would have
had if such successor had been an original Party.
	 
	28.12	 	Replacement of the Agent
	 
	(a)	 	After consultation with the Borrower, the Majority Lenders may, by giving 30 days’ notice to
the Agent (or, at any time the Agent is an Impaired Agent, by giving any shorter notice
determined by the Majority Lenders) replace the Agent by appointing a successor Agent.
	 
	(b)	 	The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the
expense of the Lenders) make available to the successor Agent such documents and records and
provide such assistance as the successor Agent may reasonably request for the purposes of
performing its functions as Agent under the Finance Documents.
	 
	(c)	 	The appointment of the successor Agent shall take effect on the date specified in the notice
from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall
be discharged from any further obligation in respect of the Finance Documents but shall remain
entitled to the benefit of this Clause 28 (Role of the Agent, the Arranger and Others) (and
any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be
payable on) that date).
	 
	(d)	 	Any successor Agent and each of the other Parties shall have the same rights and obligations
amongst themselves as they would have had if such successor had been an original Party.

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	28.13	 	Confidentiality
	 
	(a)	 	In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its
agency division which shall be treated as a separate entity from any other of its divisions or
departments.
	 
	(b)	 	If information is received by another division or department of the Agent, it may be treated
as confidential to that division or department and the Agent shall not be deemed to have
notice of it.
	 
	(c)	 	Notwithstanding any other provision of any Finance Document to the contrary, neither the
Agent nor the Arranger is obliged to disclose to any other person (i) any confidential
information or (ii) any other information if the disclosure would or might in its reasonable
opinion constitute a breach of any law or a breach of a fiduciary duty.
	 
	28.14	 	Relationship with the Lenders
	 
	(a)	 	The Agent may treat the person shown in its records as Lender at the opening of business (in
the place of the Agent’s principal office as notified to the Finance Parties from time to
time) as the Lender acting through its Facility Office entitled to any payment due under any
Finance Document on that day unless it has received not less than five Business Days’ prior
notice from that Lender to the contrary in accordance with the terms of this Agreement.
	 
	(b)	 	Each Lender shall supply the Agent with any information required by the Agent in order to
calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost Formula).
	 
	(c)	 	Each Lender shall supply the Agent with any information that the Security Trustee may
reasonably specify (through the Agent) as being necessary or desirable to enable the Security
Trustee to perform its functions as Security Trustee. Each Lender shall deal with the
Security Trustee exclusively through the Agent and shall not deal directly with the Security
Trustee.
	 
	(d)	 	Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices,
communications, information and documents to be made or despatched to that Lender under the
Finance Documents. Such notice shall contain the address, fax number and (where communication
by electronic mail or other electronic means is permitted under Clause 34.6 (Electronic
communication)) electronic mail address and/or any other information required to enable the
sending and receipt of information by that means (and, in each case, the department or
officer, if any, for whose attention communication is to be made) and be treated as a
notification of a substitute address, fax number, electronic mail address, department and
officer by that Lender for the purposes of Clause 34.2 (Addresses) and paragraph (a)(iii) of
Clause 34.6 (Electronic communication) and the Agent shall be entitled to treat such person as
the person entitled to receive all such notices, communications, information and documents as
though that person were that Lender.
	 
	28.15	 	Credit appraisal by the Lenders

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf
in connection with any Finance Document, each Lender confirms to the Agent, the Arranger that it
has been, and will continue to be, solely responsible for making its own

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independent appraisal and investigation of all risks arising under or in connection with any
Finance Document including but not limited to:

	(a)	 	the financial condition, status and nature of each member of the Group;
	 
	(b)	 	the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and
the Transaction Security and any other agreement, arrangement or document entered into, made
or executed in anticipation of, under or in connection with any Finance Document or the
Transaction Security;
	 
	(c)	 	whether that Secured Party has recourse, and the nature and extent of that recourse, against
any Party or any of its respective assets under or in connection with any Finance Document,
the Transaction Security, the transactions contemplated by the Finance Documents or any other
agreement, arrangement or document entered into, made or executed in anticipation of, under or
in connection with any Finance Document;
	 
	(d)	 	the adequacy, accuracy and/or completeness of any information provided by the Agent, any
Party or by any other person under or in connection with any Finance Document, the
transactions contemplated by the Finance Documents or any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or in connection with any
Finance Document; and
	 
	(e)	 	the right or title of any person in or to, or the value or sufficiency of any part of the
Charged Property, the priority of any of the Transaction Security or the existence of any
Security affecting the Charged Property.

28.16 Deduction from amounts payable by the Agent

If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving
notice to that Party, deduct an amount not exceeding that amount from any payment to that Party
which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount
deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents
that Party shall be regarded as having received any amount so deducted.

	28.17	 	Reliance and engagement letters

Each Finance Party and Secured Party confirms that each of the Arranger and the Agent has authority
to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports
already accepted by the Arranger or Agent) the terms of any reliance letter or engagement letters
relating to any reports or letters provided by accountants in connection with the Finance Documents
or the transactions contemplated in the Finance Documents and to bind it in respect of those
reports or letters and to sign such letters on its behalf and further confirms that it accepts the
terms and qualifications set out in such letters.

	29.	 	ROLE OF THE SECURITY TRUSTEE
	 
	29.1	 	Trust
	 
	(a)	 	The Security Trustee declares that it shall hold the Transaction Security on trust for the
Secured Parties on the terms contained in this Agreement.

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	(b)	 	Each of the parties to this Agreement agrees that the Security Trustee shall have only those
duties, obligations and responsibilities expressly specified in this Agreement or in the
Transaction Security Documents to which the Security Trustee is expressed to be a party (and
no others shall be implied).

29.2 No independent power

The Finance Parties shall not have any independent power to enforce, or have recourse to, any of
the Transaction Security or to exercise any rights or powers arising under the Transaction Security
Documents except through the Security Trustee.

	29.3	 	Security Trustee’s Instructions

The Security Trustee shall:

	(a)	 	unless a contrary indication appears in a Finance Document, act in accordance with any
instructions given to it by the Agent and shall be entitled to assume that (a) any
instructions received by it from the Agent are duly given by or on behalf of the Majority
Lenders or, as the case may be, the Lenders in accordance with the terms of the Finance
Documents and (b) unless it has received actual notice of revocation that any instructions or
directions given by the Agent have not been revoked;
	 
	(b)	 	be entitled to request instructions, or clarification of any direction, from the Agent as to
whether, and in what manner, it should exercise or refrain from exercising any rights, powers
and discretions and the Security Trustee may refrain from acting unless and until those
instructions or clarification are received by it; and
	 
	(c)	 	be entitled to, carry out all dealings with the Lenders through the Agent and may give to the
Agent any notice or other communication required to be given by the Security Trustee to the
Lenders.

29.4 Security Trustee’s Actions

Subject to the provisions of this Clause 29 (Role of the Security Trustee):

	(a)	 	the Security Trustee may, in the absence of any instructions to the contrary, take such
action in the exercise of any of its powers and duties under the Finance Documents which in
its absolute discretion it considers to be for the protection and benefit of all the Finance
Parties; and
	 
	(b)	 	at any time after receipt by the Security Trustee of notice from the Agent directing the
Security Trustee to exercise all or any of its rights, remedies, powers or discretions under
any of the Finance Documents, the Security Trustee may, and shall if so directed by the Agent,
take any action as in its sole discretion it thinks fit to enforce the Transaction Security.

29.5 Security Trustee’s discretions

The Security Trustee may:

	(a)	 	assume (unless it has received actual notice to the contrary in its capacity as Security
Trustee for the Finance Parties) that (a) no Default has occurred and no Obligor is in breach
of or default under its obligations under any of the Finance Documents and (b) any right,
power, authority or discretion vested in any person has not been exercised.

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	(b)	 	if it receives any instructions or directions from the Agent to take any action in relation
to the Transaction Security, assume that all applicable conditions under the Finance Documents
for taking that action have been satisfied.
	 
	(c)	 	engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or
other experts (whether obtained by the Security Trustee or by any other Secured Party) whose
advice or services may at any time seem necessary, expedient or desirable.
	 
	(d)	 	rely upon any communication or document believed by it to be genuine and, as to any matters
of fact which might reasonably be expected to be within the knowledge of a Secured Party or an
Obligor, upon a certificate signed by or on behalf of that person.
	 
	(e)	 	refrain from acting in accordance with the instructions of the Agent or Lenders (including
bringing any legal action or proceeding arising out of or in connection with the Finance
Documents) until it has received any indemnification and/or security that it may in its
absolute discretion require (whether by way of payment in advance or otherwise) for all costs,
losses and liabilities which it may incur in bringing such action or proceedings.

29.6 Security Trustee’s obligations

The Security Trustee shall promptly inform the Agent of:

	(a)	 	the contents of any notice or document received by it in its capacity as Security Trustee
from any Obligor under any Finance Document; and
	 
	(b)	 	the occurrence of any Default or any default by an Obligor in the due performance of or
compliance with its obligations under any Finance Document of which the Security Trustee has
received notice from any other party to this Agreement.

29.7 Excluded obligations

The Security Trustee shall not:

	(a)	 	be bound to enquire as to the occurrence or otherwise of any Default or the performance,
default or any breach by an Obligor of its obligations under any of the Finance Documents;
	 
	(b)	 	be bound to account to any other Party for any sum or the profit element of any sum received
by it for its own account;
	 
	(c)	 	be bound to disclose to any other person (including any Secured Party) (a) any confidential
information or (b) any other information if disclosure would, or might in its reasonable
opinion, constitute a breach of any law or be a breach of fiduciary duty;
	 
	(d)	 	be under any obligations other than those which are specifically provided for in the Finance
Documents; or
	 
	(e)	 	have or be deemed to have any duty, obligation or responsibility to, or relationship of trust
or agency with, any Obligor.

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	29.8	 	Exclusion of liability

Unless caused directly by its gross negligence or wilful misconduct the Security Trustee shall not
accept responsibility or be liable for:

	(a)	 	the adequacy, accuracy and/or completeness of any information supplied by the Security
Trustee or any other person in connection with the Finance Documents or the transactions
contemplated in the Finance Documents, or any other agreement, arrangement or document entered
into, made or executed in anticipation of, under or in connection with the Finance Documents;
	 
	(b)	 	the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or
the Transaction Security or any other agreement, arrangement or document entered into, made or
executed in anticipation of, under or in connection with any Finance Document or the
Transaction Security;
	 
	(c)	 	any losses to any person or any liability arising as a result of taking or refraining from
taking any action in relation to any of the Finance Documents or the Transaction Security or
otherwise, whether in accordance with an instruction from an Agent or otherwise;
	 
	(d)	 	the exercise of, or the failure to exercise, any judgment, discretion or power given to it by
or in connection with any of the Finance Documents, the Transaction Security or any other
agreement, arrangement or document entered into, made or executed in anticipation of, under or
in connection with the Finance Documents or the Transaction Security; or
	 
	(e)	 	any shortfall which arises on the enforcement of the Transaction Security..

29.9 No proceedings

No Party (other than the Security Trustee) may take any proceedings against any officer, employee
or agent of the Security Trustee in respect of any claim it might have against the Security Trustee
or in respect of any act or omission of any kind by that officer, employee or agent in relation to
any Finance Document.

	29.10	 	Own responsibility

It is understood and agreed by each Secured Party that at all times that Secured Party has itself
been, and will continue to be, solely responsible for making its own independent appraisal of and
investigation into all risks arising under or in connection with the Finance Documents including
but not limited to:

	(a)	 	the financial condition, creditworthiness, condition, affairs, status and nature of each of
the Obligors;
	 
	(b)	 	the legality, validity, effectiveness, adequacy and enforceability of each of the Finance
Documents and the Transaction Security and any other agreement, arrangement or document
entered into, made or executed in anticipation of, under or in connection with the Finance
Documents or the Transaction Security;
	 
	(c)	 	whether that Secured Party has recourse, and the nature and extent of that recourse, against
any Obligor or any other person or any of their respective assets under or in connection with
the Finance Documents, the transactions contemplated in the Finance

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	 	 	Documents or any other agreement, arrangement or document entered into, made or executed in
anticipation of, under to or in connection with the Finance Documents;

	(d)	 	the adequacy, accuracy and/or completeness of any information provided by any person in
connection with the Finance Documents, the transactions contemplated in the Finance Documents
or any other agreement, arrangement or document entered into, made or executed in anticipation
of, under or in connection with the Finance Documents; and
	 
	(e)	 	the right or title of any person in or to, or the value or sufficiency of any part of the
Charged Property, the priority of any of the Transaction Security or the existence of any
security interest affecting the Charged Property,

and each Secured Party warrants to the Security Trustee that it has not relied on and will not at
any time rely on the Security Trustee in respect of any of these matters.

29.11 No responsibility to perfect Transaction Security

The Security Trustee shall not be liable for any failure to:

	(a)	 	require the deposit with it of any deed or document certifying, representing or constituting
the title of any Obligor to any of the Charged Property;
	 
	(b)	 	obtain any licence, consent or other authority for the execution, delivery, legality,
validity, enforceability or admissibility in evidence of any of the Finance Documents or the
Transaction Security;
	 
	(c)	 	register, file or record or otherwise protect any of the Transaction Security (or the
priority of any of the Transaction Security) under any applicable laws in any jurisdiction or
to give notice to any person of the execution of any of the Finance Documents or of the
Transaction Security;
	 
	(d)	 	take, or to require any of the Obligors to take, any steps to perfect its title to any of the
Charged Property or to render the Transaction Security effective or to secure the creation of
any ancillary security interest under the laws of any jurisdiction; or
	 
	(e)	 	require any further assurances in relation to any of the Transaction Security Documents.

29.12 Insurance by Security Trustee

	 
	(a)	 	The Security Trustee shall not be under any obligation to insure any of the Charged Property,
to require any other person to maintain any insurance or to verify any obligation to arrange
or maintain insurance contained in the Finance Documents. The Security Trustee shall not be
responsible for any loss which may be suffered by any person as a result of the lack of or
inadequacy of any such insurance.
	 
	(b)	 	Where the Security Trustee is named on any insurance policy as an insured party, it shall not
be responsible for any loss which may be suffered by reason of, directly or indirectly, its
failure to notify the insurers of any material fact relating to the risk assumed by the
insurers or any other information of any kind, unless any Secured Party has requested it to do
so in writing and the Security Trustee has failed to do so within fourteen days after receipt
of that request..

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	29.13	 	Custodians and nominees

The Security Trustee may appoint and pay any person to act as a custodian or nominee on any terms
in relation to any assets of the trust as the Security Trustee may determine, including for the
purpose of depositing with a custodian this Agreement or any document relating to the trust created
under this Agreement and the Security Trustee shall not be responsible for any loss, liability,
expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or
default on the part of any person appointed by it under this Agreement or be bound to supervise the
proceedings or acts of any person.

	29.14	 	Acceptance of title

The Security Trustee shall be entitled to accept without enquiry, and shall not be obliged to
investigate, the right and title as each of the Obligors may have to any of the Charged Property
and shall not be liable for or bound to require any Obligor to remedy any defect in its right or
title.

	29.15	 	Refrain from illegality

The Security Trustee may refrain from doing anything which in its opinion will or may be contrary
to any relevant law, directive or regulation of any jurisdiction which would or might otherwise
render it liable to any person, and the Security Trustee may do anything which is, in its opinion,
necessary to comply with any law, directive or regulation.

	29.16	 	Business with the Debtors

The Security Trustee may accept deposits from, lend money to, and generally engage in any kind of
banking or other business with any of the Obligors.

	29.17	 	Winding up of trust

If the Security Trustee, with the approval of the Majority Lenders, determines that (a) all of the
Secured Obligations and all other obligations secured by any of the Transaction Security Documents
have been fully and finally discharged and (b) none of the Finance Parties is under any commitment,
obligation or liability (actual or contingent) to make advances or provide other financial
accommodation to any Obligor pursuant to the Finance Documents, the trusts set out in this
Agreement shall be wound up and the Security Trustee shall release, without recourse or warranty,
all of the Transaction Security and the rights of the Security Trustee under each of the
Transaction Security Documents.

	29.18	 	Perpetuity period

The perpetuity period under the rule against perpetuities, if applicable to this Agreement, shall
be the period of 125 years from the date of this Agreement.

	29.19	 	Powers supplemental

The rights, powers and discretions conferred upon the Security Trustee by this Agreement shall be
supplemental to the Trustee Acts 1925 and 2000 and in addition to any which may be vested in the
Security Trustee by general law or otherwise.

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29.20 Trustee division separate

In acting as trustee for the Finance Parties, the Security Trustee shall be regarded as acting
through its trustee division which shall be treated as a separate entity from any of its other
divisions or departments and any information received by any other division or department of the
Security Trustee may be treated as confidential and shall not be regarded as having been given to
the Security Trustee’s trustee division.

29.21 Disapplication

Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Trustee in relation
to the trusts constituted by this Agreement. Where there are any inconsistencies between the
Trustee Acts 1925 and 2000 and the provisions of this Agreement, the provisions of this Agreement
shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee
Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the
purposes of that Act.

29.22 Resignation of the Security Trustee

	 
	(a)	 	The Security Trustee may resign and appoint one of its Affiliates as successor by giving
notice to the other Parties (or to the Agent on behalf of the Lenders).
	 
	(b)	 	Alternatively the Security Trustee may resign by giving notice to the other Parties (or to
the Agent on behalf of the Lenders) in which case the Majority Lenders may appoint a successor
Security Trustee.
	 
	(c)	 	If the Majority Lenders have not appointed a successor Security Trustee in accordance with
paragraph (b) of this Clause 29.22 (Resignation of Security Trustee) within 30 days after the
notice of resignation was given, the Security Trustee (after consultation with the Agent) may
appoint a successor Security Trustee.
	 
	(d)	 	The retiring Security Trustee shall, at its own cost, make available to the successor
Security Trustee such documents and records and provide such assistance as the successor
Security Trustee may reasonably request for the purposes of performing its functions as
Security Trustee under the Finance Documents.
	 
	(e)	 	The Security Trustee’s resignation notice shall only take effect upon (a) the appointment of
a successor and (b) the transfer of all of the Transaction Security to that successor.
	 
	(f)	 	Upon the appointment of a successor, the retiring Security Trustee shall be discharged from
any further obligation in respect of the Finance Documents but shall remain entitled to the
benefit of Clause 28 (Role of the Agent, the Arranger and others) and this Clause 29 (Role of
the Security Trustee). Its successor and each of the other Parties shall have the same rights
and obligations amongst themselves as they would have had if such successor had been an
original Party.
	 
	(g)	 	The Majority Lenders may, by notice to the Security Trustee, require it to resign in
accordance with paragraph (f) of this Clause 29.22 (Resignation of the Security Trustee). In
this event, the Security Trustee shall resign in accordance with paragraph (f) of this Clause
29.22 (Resignation of the Security Trustee).

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29.23 Delegation

	 
	(a)	 	The Security Trustee may, at any time, delegate by power of attorney or otherwise to any
person for any period, all or any of the rights, powers and discretions vested in it by any of
the Finance Documents.
	 
	(b)	 	The delegation may be made upon any terms and conditions (including the power to
sub-delegate) and subject to any restrictions as the Security Trustee may think fit in the
interests of the Finance Parties and it shall not be bound to supervise, or be in any way
responsible for any loss incurred by reason of any misconduct or default on the part of any
delegate or sub-delegate.

29.24 Additional Security Trustees

	 
	(a)	 	The Security Trustee may at any time appoint (and subsequently remove) any person to act as a
separate trustee or as a co-trustee jointly with it (a) if it considers that appointment to be
in the interests of the Finance Parties or (b) for the purposes of conforming to any legal
requirements, restrictions or conditions which the Security Trustee deems to be relevant or
(c) for obtaining or enforcing any judgment in any jurisdiction, and the Security Trustee
shall give prior notice to the Borrower and the Agent of that appointment.
	 
	(b)	 	Any person so appointed shall have the rights, powers and discretions (not exceeding those
conferred on the Security Trustee by this Agreement) and the duties and obligations that are
conferred or imposed by the instrument of appointment.
	 
	(c)	 	The remuneration that the Security Trustee may pay to any person, and any costs and expenses
incurred by that person in performing its functions pursuant to that appointment shall, for
the purposes of this Agreement, be treated as costs and expenses incurred by the Security
Trustee.

30. CONDUCT OF BUSINESS BY THE FINANCE PARTIES

No provision of this Agreement will:

	(a)	 	interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in
whatever manner it thinks fit;
	 
	(b)	 	oblige any Finance Party to investigate or claim any credit, relief, remission or repayment
available to it or the extent, order and manner of any claim; or
	 
	(c)	 	oblige any Finance Party to disclose any information relating to its affairs (tax or
otherwise) or any computations in respect of Tax.

31. SHARING AMONG THE FINANCE PARTIES

31.1 Payments to Finance Parties

If a Finance Party (a Recovering Finance Party) receives or recovers any amount from an Obligor
other than in accordance with Clause 32 (Payment mechanics) (a Recovered Amount) and applies that
amount to a payment due under the Finance Documents then:

	(a)	 	the Recovering Finance Party shall, within three Business Days, notify details of the receipt
or recovery, to the Agent;

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	(b)	 	the Agent shall determine whether the receipt or recovery is in excess of the amount the
Recovering Finance Party would have been paid had the receipt or recovery been received or
made by the Agent and distributed in accordance with Clause 32 (Payment mechanics), without
taking account of any Tax which would be imposed on the Agent in relation to the receipt,
recovery or distribution; and
	 
	(c)	 	the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to
the Agent an amount (the Sharing Payment) equal to such receipt or recovery less any amount
which the Agent determines may be retained by the Recovering Finance Party as its share of any
payment to be made, in accordance with Clause 32.6 (Partial payments).

31.2 Redistribution of payments

The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and
distribute it between the Finance Parties (other than the Recovering Finance Party) (the Sharing
Finance Parties) in accordance with Clause 32.6 (Partial payments) towards the obligations of that
Obligor to the Sharing Finance Parties.

	31.3	 	Recovering Finance Party’s rights

On a distribution by the Agent under Clause 31.2 (Redistribution of payments) of a payment received
by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering
Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as
not having been paid by that Obligor.

	31.4	 	Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes
repayable and is repaid by that Recovering Finance Party, then:

	(a)	 	each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account
of that Recovering Finance Party an amount equal to the appropriate part of its share of the
Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance
Party for its proportion of any interest on the Sharing Payment which that Recovering Finance
Party is required to pay) (the Redistributed Amount); and
	 
	(b)	 	as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to
the relevant Redistributed Amount will be treated as not having been paid by that Obligor.

31.5 Exceptions

	 
	(a)	 	This Clause 31.5 (Exceptions) shall not apply to the extent that the Recovering Finance Party
would not, after making any payment pursuant to this Clause, have a valid and enforceable
claim against the relevant Obligor.
	 
	(b)	 	A Recovering Finance Party is not obliged to share with any other Finance Party any amount
which the Recovering Finance Party has received or recovered as a result of taking legal or
arbitration proceedings, if:

	 	(i)	 	it notified the other Finance Party of the legal or arbitration proceedings;
and

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	 	(ii)	 	the other Finance Party had an opportunity to participate in those legal or
arbitration proceedings but did not do so as soon as reasonably practicable having
received notice and did not take separate legal or arbitration proceedings.

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SECTION 11

ADMINISTRATION

	32.	 	PAYMENT MECHANICS
	 
	32.1	 	Payments to the Agent
	 
	(a)	 	On each date on which an Obligor or a Lender is required to make a payment under a Finance
Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary
indication appears in a Finance Document) for value on the due date at the time and in such
funds specified by the Agent as being customary at the time for settlement of transactions in
the relevant currency in the place of payment.
	 
	(b)	 	Payment shall be made to such account in the principal financial centre of the country of
that currency with such bank as the Agent specifies.
	 
	32.2	 	Distributions by the Agent

Each payment received by the Agent under the Finance Documents for another Party shall, subject to
Clause 32.3 (Distributions to an Obligor) and Clause 32.4 (Clawback) be made available by the Agent
as soon as practicable after receipt to the Party entitled to receive payment in accordance with
this Agreement (in the case of a Lender, for the account of its Facility Office), to such account
as that Party may notify to the Agent by not less than five Business Days’ notice with a bank in
the principal financial centre of the country of that currency.

	32.3	 	Distributions to an Obligor

The Agent may (with the consent of the Obligor or in accordance with Clause 33 (Set-Off)) apply any
amount received by it for that Obligor in or towards payment (on the date and in the currency and
funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards
purchase of any amount of any currency to be so applied.

	32.4	 	Clawback

	(a)	 	Where a sum is to be paid to the Agent under the Finance Documents for another Party, the
Agent is not obliged to pay that sum to that other Party (or to enter into or perform any
related exchange contract) until it has been able to establish to its satisfaction that it has
actually received that sum.
	 
	(b)	 	If the Agent pays an amount to another Party and it proves to be the case that the Agent had
not actually received that amount, then the Party to whom that amount (or the proceeds of any
related exchange contract) was paid by the Agent shall on demand refund the same to the Agent
together with interest on that amount from the date of payment to the date of receipt by the
Agent, calculated by the Agent to reflect its cost of funds.
	 
	32.5	 	Impaired Agent
	 
	(a)	 	If, at any time, the Agent becomes an Impaired Agent, an Obligor or a Lender which is
required to make a payment under the Finance Documents to the Agent in accordance with Clause
32.1 (Payments to the Agent) may instead either pay that amount direct to the required
recipient or pay that amount to an interest-bearing

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	 	 	account held with an Acceptable Bank within the meaning of paragraph (a) of the definition
of Acceptable Bank and in relation to which no Insolvency Event has occurred and is
continuing, in the name of the Obligor or the Lender making the payment and designated as a
trust account for the benefit of the Party or Parties beneficially entitled to that payment
under the Finance Documents. In each case such payments must be made on the due date for
payment under the Finance Documents.

	(b)	 	All interest accrued on the amount standing to the credit of the trust account shall be for
the benefit of the beneficiaries of that trust account pro rata to their respective
entitlements.
	 
	(c)	 	A Party which has made a payment in accordance with this Clause 32.5 (Impaired Agent) shall
be discharged of the relevant payment obligation under the Finance Documents and shall not
take any credit risk with respect to the amounts standing to the credit of the trust account.
	 
	(d)	 	Promptly upon the appointment of a successor Agent in accordance with Clause 28.12
(Replacement of the Agent), each Party which has made a payment to a trust account in
accordance with this Clause 32.5 (Impaired Agent) shall give all requisite instructions to the
bank with whom the trust account is held to transfer the amount (together with any accrued
interest) to the successor Agent for distribution in accordance with Clause 32.2
(Distributions by the Agent).
	 
	32.6	 	Partial payments
	 
	(a)	 	If the Agent receives a payment for application against amounts due in respect of any Finance
Documents that is insufficient to discharge all the amounts then due and payable by an Obligor
under those Finance Documents, the Agent shall apply that payment towards the obligations of
that Obligor under those Finance Documents in the following order:

	 	(i)	 	first, in or towards payment pro rata of any unpaid fees, costs and expenses
of the Agent and the Security Trustee under those Finance Documents;
	 
	 	(ii)	 	secondly, in or towards payment pro rata of any accrued interest, fee or
commission due but unpaid under those Finance Documents;
	 
	 	(iii)	 	thirdly, in or towards payment pro rata of any principal due but unpaid
under those Finance Documents; and
	 
	 	(iv)	 	fourthly, in or towards payment pro rata of any other sum due but unpaid
under the Finance Documents.

	(b)	 	The Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs
(a)(ii) to (iv) above.
	 
	(c)	 	Paragraphs (a) and (b) above will override any appropriation made by an Obligor.
	 
	32.7	 	Set-off by Obligors

All payments to be made by an Obligor under the Finance Documents shall be calculated and be made
without (and free and clear of any deduction for) set-off or counterclaim.

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	32.8	 	Business Days
	 
	(a)	 	Any payment which is due to be made on a day that is not a Business Day shall be made on the
next Business Day in the same calendar month (if there is one) or the preceding Business Day
(if there is not).
	 
	(b)	 	During any extension of the due date for payment of any principal or Unpaid Sum under this
Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the
original due date.
	 
	32.9	 	Currency of account
	 
	(a)	 	Subject to paragraphs (b) to (e) below, sterling is the currency of account and payment for
any sum due from an Obligor under any Finance Document.
	 
	(b)	 	A repayment of a Utilisation or Unpaid Sum or a part of a Utilisation or Unpaid Sum shall be
made in the currency in which that Utilisation or Unpaid Sum is denominated on its due date.
	 
	(c)	 	Each payment of interest shall be made in the currency in which the sum in respect of which
the interest is payable was denominated when that interest accrued.
	 
	(d)	 	Each payment in respect of costs, expenses or Taxes shall be made in the currency in which
the costs, expenses or Taxes are incurred.
	 
	(e)	 	Any amount expressed to be payable in a currency other than sterling shall be paid in that
other currency.
	 
	32.10	 	Change of currency
	 
	(a)	 	Unless otherwise prohibited by law, if more than one currency or currency unit are at the
same time recognised by the central bank of any country as the lawful currency of that
country, then:

	 	(i)	 	any reference in the Finance Documents to, and any obligations arising under
the Finance Documents in, the currency of that country shall be translated into, or
paid in, the currency or currency unit of that country designated by the Agent (after
consultation with the Borrower); and
	 
	 	(ii)	 	any translation from one currency or currency unit to another shall be at the
official rate of exchange recognised by the central bank for the conversion of that
currency or currency unit into the other, rounded up or down by the Agent (acting
reasonably).

	(b)	 	If a change in any currency of a country occurs, this Agreement will, to the extent the Agent
(acting reasonably and after consultation with the Borrower) specifies to be necessary, be
amended to comply with any generally accepted conventions and market practice in the Relevant
Interbank Market and otherwise to reflect the change in currency.
	 
	32.11	 	Disruption to Payment Systems etc.

If either the Agent determines (in its discretion) that a Disruption Event has occurred or the
Agent is notified by the Borrower that a Disruption Event has occurred:

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	(a)	 	the Agent may, and shall if requested to do so by the Borrower, consult with the Borrower
with a view to agreeing with the Borrower such changes to the operation or administration of
the Facility as the Agent may deem necessary in the circumstances;
	 
	(b)	 	the Agent shall not be obliged to consult with the Borrower in relation to any changes
mentioned in paragraph (a) if, in its reasonable opinion, it is not practicable to do so in
the circumstances and, in any event, shall have no obligation to agree to such changes;
	 
	(c)	 	the Agent may consult with the Finance Parties in relation to any changes mentioned in
paragraph (a) but shall not be obliged to do so if, in its opinion, it is not practicable to
do so in the circumstances;
	 
	(d)	 	any such changes agreed upon by the Agent and the Borrower shall (whether or not it is
finally determined that a Disruption Event has occurred) be binding upon the Parties as an
amendment to (or, as the case may be, waiver of) the terms of the Finance Documents
notwithstanding the provisions of Clause 38 (Amendments and Waivers);
	 
	(e)	 	the Agent shall not be liable for any damages, costs or losses whatsoever (including, without
limitation for negligence, gross negligence or any other category of liability whatsoever but
not including any claim based on the fraud of the Agent) arising as a result of its taking, or
failing to take, any actions pursuant to or in connection with this Clause 32.11 (Disruption
to Payment Systems etc.); and
	 
	(f)	 	the Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d)
above.
	 
	33.	 	SET-OFF

A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents
(to the extent beneficially owned by that Finance Party) against any matured obligation owed by
that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency
of either obligation. If the obligations are in different currencies, the Finance Party may
convert either obligation at a market rate of exchange in its usual course of business for the
purpose of the set-off.

	34.	 	NOTICES
	 
	34.1	 	Communications in writing

Any communication to be made under or in connection with the Finance Documents shall be made in
writing and, unless otherwise stated, may be made by fax or letter.

	34.2	 	Addresses

The address and fax number (and the department or officer, if any, for whose attention the
communication is to be made) of each Party for any communication or document to be made or
delivered under or in connection with the Finance Documents is:

	(a)	 	in the case of the Borrower, that identified with its name below;
	 
	(b)	 	in the case of each Lender or any other Obligor, that notified in writing to the Agent on or
prior to the date on which it becomes a Party; and

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	(c)	 	in the case of the Agent or the Security Trustee, that identified with its name below,

or any substitute address, fax number or department or officer as the Party may notify to the Agent
(or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than
five Business Days’ notice.

	34.3	 	Delivery
	 
	(a)	 	Any communication or document made or delivered by one person to another under or in
connection with the Finance Documents will only be effective:

	 	(i)	 	if by way of fax, when received in legible form; or
	 
	 	(ii)	 	if by way of letter, when it has been left at the relevant address or five
Business Days after being deposited in the post postage prepaid in an envelope
addressed to it at that address,

	 	 	and, if a particular department or officer is specified as part of its address details
provided under Clause 34.2 (Addresses), if addressed to that department or officer.
	 
	(b)	 	Any communication or document to be made or delivered to the Agent or the Security Trustee
will be effective only when actually received by the Agent or Security Trustee and then only
if it is expressly marked for the attention of the department or officer identified with the
Agent’s or Security Trustee’s signature below (or any substitute department or officer as the
Agent or Security Trustee shall specify for this purpose).
	 
	(c)	 	All notices from or to an Obligor shall be sent through the Agent.
	 
	(d)	 	Any communication or document made or delivered to the Borrower in accordance with this
Clause 34.3 (Delivery) will be deemed to have been made or delivered to each of the Obligors.
	 
	34.4	 	Notification of address and fax number

Promptly upon receipt of notification of an address or fax number or change of address or fax
number pursuant to Clause 34.2 (Addresses) or changing its own address or fax number, the Agent
shall notify the other Parties.

	34.5	 	Communication when Agent is Impaired Agent

If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through
the Agent, communicate with each other directly and (while the Agent is an Impaired Agent) all the
provisions of the Finance Documents which require communications to be made or notices to be given
to or by the Agent shall be varied so that communications may be made and notices given to or by
the relevant Parties directly. This provision shall not operate after a replacement Agent has been
appointed.

	34.6	 	Electronic communication
	 
	(a)	 	Any communication to be made between the Agent or the Security Trustee and a Lender under or
in connection with the Finance Documents may be made by electronic mail or other electronic
means, if the Agent, the Security Trustee and the relevant Lender:

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	 	(i)	 	agree that, unless and until notified to the contrary, this is to be an
accepted form of communication;
	 
	 	(ii)	 	notify each other in writing of their electronic mail address and/or any
other information required to enable the sending and receipt of information by that
means; and
	 
	 	(iii)	 	notify each other of any change to their address or any other such
information supplied by them.

	(b)	 	Any electronic communication made between the Agent and a Lender or the Security Trustee will
be effective only when actually received in readable form and in the case of any electronic
communication made by a Lender to the Agent or the Security Trustee only if it is addressed in
such a manner as the Agent or Security Trustee shall specify for this purpose.
	 
	34.7	 	Use of websites
	 
	(a)	 	The Borrower may satisfy its obligation under this Agreement to deliver any information in
relation to those Lenders (the Website Lenders) who accept this method of communication by
posting this information onto an electronic website designated by the Borrower and the Agent
(the Designated Website) if:

	 	(i)	 	the Agent expressly agrees (after consultation with each of the Lenders) that
it will accept communication of the information by this method;
	 
	 	(ii)	 	both the Borrower and the Agent are aware of the address of and any relevant
password specifications for the Designated Website; and
	 
	 	(iii)	 	the information is in a format previously agreed between the Borrower and
the Agent.

	 	 	If any Lender (a Paper Form Lender) does not agree to the delivery of information
electronically then the Agent shall notify the Borrower accordingly and the Borrower shall
at its own cost supply the information to the Agent (in sufficient copies for each Paper
Form Lender) in paper form. In any event the Borrower shall at its own cost supply the
Agent with at least one copy in paper form of any information required to be provided by
it.

	(b)	 	The Agent shall supply each Website Lender with the address of and any relevant password
specifications for the Designated Website following designation of that website by the
Borrower and the Agent.
	 
	(c)	 	The Borrower shall promptly upon becoming aware of its occurrence notify the Agent if:

	 	(i)	 	the Designated Website cannot be accessed due to technical failure;
	 
	 	(ii)	 	the password specifications for the Designated Website change;
	 
	 	(iii)	 	any new information which is required to be provided under this Agreement is
posted onto the Designated Website;

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	 	(iv)	 	any existing information which has been provided under this Agreement and
posted onto the Designated Website is amended; or
	 
	 	(v)	 	the Borrower becomes aware that the Designated Website or any information
posted onto the Designated Website is or has been infected by any electronic virus or
similar software.

	 	 	If the Borrower notifies the Agent under paragraph (c)(i) or paragraph (c)(v) above, all
information to be provided by the Borrower under this Agreement after the date of that
notice shall be supplied in paper form unless and until the Agent and each Website Lender
is satisfied that the circumstances giving rise to the notification are no longer
continuing.
	 
	(d)	 	Any Website Lender may request, through the Agent, one paper copy of any information required
to be provided under this Agreement which is posted onto the Designated Website. The Borrower
shall at its own cost comply with any such request within ten Business Days.
	 
	34.8	 	English language
	 
	(a)	 	Any notice given under or in connection with any Finance Document must be in English.
	 
	(b)	 	All other documents provided under or in connection with any Finance Document must be:

	 	(i)	 	in English; or
	 
	 	(ii)	 	if not in English, and if so required by the Agent, accompanied by a
certified English translation and, in this case, the English translation will prevail
unless the document is a constitutional, statutory or other official document.

	35.	 	CALCULATIONS AND CERTIFICATES
	 
	35.1	 	Accounts

In any litigation or arbitration proceedings arising out of or in connection with a Finance
Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence
of the matters to which they relate.

	35.2	 	Certificates and determinations
	 
	(a)	 	Any certification or determination by a Finance Party of a rate or amount under any Finance
Document is, in the absence of manifest error, conclusive evidence of the matters to which it
relates.
	 
	(b)	 	All certificates issued by a director of an Obligor under or pursuant to the terms of the
Finance Documents shall be issued (and treated as issued whether or not so stated) by that
director on behalf of the relevant Obligor without personal liability, save in the case of
gross negligence, wilful default or fraud.

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	35.3	 	Day count convention

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and
is calculated on the basis of the actual number of days elapsed and a year of 365 days or, in any
case where the practice in the Relevant Interbank Market differs, in accordance with that market
practice.

	36.	 	PARTIAL INVALIDITY

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or
unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction will in any way be affected or impaired.

	37.	 	REMEDIES AND WAIVERS

No failure to exercise, nor any delay in exercising, on the part of any Finance Party or Secured
Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any
single or partial exercise of any right or remedy prevent any further or other exercise or the
exercise of any other right or remedy. The rights and remedies provided in this Agreement are
cumulative and not exclusive of any rights or remedies provided by law.

	38.	 	AMENDMENTS AND WAIVERS
	 
	38.1	 	Required consents
	 
	(a)	 	Subject to Clause 38.2 (Exceptions) any term of the Finance Documents may be amended or
waived only with the consent of the Majority Lenders and the Borrower and any such amendment
or waiver will be binding on all Parties.
	 
	(b)	 	The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by
this Clause 38 (Amendments and Waivers).
	 
	(c)	 	Each Obligor agrees to any such amendment or waiver permitted by this Clause 38 (Amendments
and Waivers) which is agreed to by the Borrower. This includes any amendment or waiver which
would, but for this paragraph (c), require the consent of all of the Guarantors.
	 
	38.2	 	Exceptions
	 
	(a)	 	An amendment or waiver that has the effect of changing or which relates to:

	 	(i)	 	the definition of “Majority Lenders” in Clause 1.1 (Definitions);
	 
	 	(ii)	 	an extension to the date of payment of any amount under the Finance
Documents;
	 
	 	(iii)	 	a reduction in the Margin or a reduction in the amount of any payment of
principal, interest, fees or commission payable;
	 
	 	(iv)	 	a change in currency of payment of any amount under the Finance Documents;

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	 	(v)	 	an increase in or an extension of any Commitment or the Total Commitments;
	 
	 	(vi)	 	a change to the Borrowers or Guarantors other than in accordance with Clause
27 (Changes to the Obligors);
	 
	 	(vii)	 	any provision which expressly requires the consent of all the Lenders;
	 
	 	(viii)	 	Clause 2.2 (Finance Parties’ rights and obligations), Clause 8 (Mandatory
prepayment), Clause 25 (Changes to the Lenders) or this Clause 38 (Amendments and
Waivers);
	 
	 	(ix)	 	(other than as expressly permitted by the provisions of any Finance Document)
the nature or scope of:

	 	(A)	 	the guarantee and indemnity granted under Clause 19
(Guarantee and Indemnity);
	 
	 	(B)	 	the Charged Property; or
	 
	 	(C)	 	the manner in which the proceeds of enforcement of the
Transaction Security are distributed

	 	 	 	(except in the case of paragraph (B) and paragraph (C) above, insofar as it
relates to a sale or disposal of an asset which is the subject of the Transaction
Security where such sale or disposal is expressly permitted under this Agreement
or any other Finance Document); or
	 
	 	(x)	 	the release of any guarantee and indemnity granted under Clause 19 (Guarantee
and Indemnity) or of any Transaction Security unless permitted under this Agreement or
any other Finance Document or relating to a sale or disposal of an asset which is the
subject of the Transaction Security where such sale or disposal is expressly permitted
under this Agreement or any other Finance Document,

	 	 	shall not be made without the prior consent of all the Lenders.

	(b)	 	An amendment or waiver which relates to the rights or obligations of the Agent, the Arranger
or the Security Trustee, (each in their capacity as such) may not be effected without the
consent of the Agent, the Arranger or the Security Trustee.
	 
	(c)	 	If any Lender fails to respond to a request for a consent, waiver, amendment of or in
relation to any of the terms of any Finance Document (other than an amendment or waiver
referred to in paragraphs (a)(ii), (iii) and (v) above) or other vote of Lenders under the
terms of this Agreement within 15 Business Days (unless the Borrower and the Agent agree to a
longer time period in relation to any request) of that request being made, its Commitment
and/or participation shall not be included for the purpose of calculating the Total
Commitments or participations under the relevant Facility when ascertaining whether any
relevant percentage (including, for the avoidance of doubt, unanimity) of Total Commitments
and/or participations has been obtained to approve that request.

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	38.3	 	Replacement of Lender
	 
	(a)	 	If at any time:

	 	(i)	 	any Lender becomes a Non-Consenting Lender (as defined in paragraph (c)
below); or
	 
	 	(ii)	 	an Obligor becomes obliged to repay any amount in accordance with Clause 7.1
(Illegality) or to pay additional amounts pursuant to Clause 15.1 (Increased Costs) or
Clause 14.2 (Tax gross-up) to any Lender in excess of amounts payable to the other
Lenders generally,

	 	 	then the Borrower may, on 15 Business Days’ prior written notice to the Agent and such
Lender, replace such Lender by requiring such Lender to (and such Lender shall) transfer
pursuant to Clause 25 (Changes to the Lenders) all (and not part only) of its rights and
obligations under this Agreement to a Lender or other bank, financial institution, trust,
fund or other entity (a Replacement Lender) selected by the Borrower, and which is
acceptable to the Agent (acting reasonably) which confirms its willingness to assume and
does assume all the obligations of the transferring Lender (including the assumption of the
transferring Lender’s participations on the same basis as the transferring Lender) for a
purchase price in cash payable at the time of transfer equal to the outstanding principal
amount of such Lender’s participation in the outstanding Utilisations and all accrued
interest and/or Letter of Credit fees, Break Costs and other amounts payable in relation
thereto under the Finance Documents.
	 
	(b)	 	The replacement of a Lender pursuant to this Clause shall be subject to the following
conditions:

	 	(i)	 	the Borrower shall have no right to replace the Agent or Security Trustee;
	 
	 	(ii)	 	neither the Agent nor the Lender shall have any obligation to the Borrower to
find a Replacement Lender;
	 
	 	(iii)	 	in the event of a replacement of a Non-Consenting Lender such replacement
must take place no later than five days after the date the Non-Consenting Lender
notifies the Borrower and the Agent of its failure or refusal to give a consent in
relation to, or agree to any waiver or amendment to the Finance Documents requested by
the Borrower; and
	 
	 	(iv)	 	in no event shall the Lender replaced under this paragraph (b) be required to
pay or surrender to such Replacement Lender any of the fees received by such Lender
pursuant to the Finance Documents.

	(c)	 	In the event that:

	 	(i)	 	the Borrower or the Agent (at the request of the Borrower) has requested the
Lenders to give a consent in relation to, or to agree to a waiver or amendment of, any
provisions of the Finance Documents;
	 
	 	(ii)	 	the consent, waiver or amendment in question requires the approval of all the
Lenders; and

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	 	(iii)	 	Lenders whose Commitments aggregate more than 85 per cent. of the Total
Commitments (or, if the Total Commitments have been reduced to zero, aggregated more
than 85 per cent. of the Total Commitments prior to that reduction) have consented or
agreed to such waiver or amendment,

	 	 	then any Lender who does not and continues not to consent or agree to such waiver or
amendment shall be deemed a Non-Consenting Lender.

	38.4	 	Disenfranchisement of Defaulting Lenders
	 
	(a)	 	For so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority
Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of
the Total Commitments has been obtained to approve any request for a consent, waiver,
amendment or other vote under the Finance Documents, that Defaulting Lender’s Commitments will
be reduced by the amount of its Available Commitments.
	 
	(b)	 	For the purposes of this Clause 38.4 (Disenfranchisement of Defaulting Lenders), the Agent
may assume that the following Lenders are Defaulting Lenders:

	 	(i)	 	any Lender which has notified the Agent that it has become a Defaulting
Lender;
	 
	 	(ii)	 	any Lender in relation to which it is aware that any of the events or
circumstances referred to in paragraphs (a) or (b) of the definition of Defaulting
Lender has occurred,

	 	 	unless it has received notice to the contrary from the Lender concerned (together with any
supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that
the Lender has ceased to be a Defaulting Lender.

	38.5	 	Replacement of a Defaulting Lender
	 
	(a)	 	The Borrower may, at any time a Lender has become and continues to be a Defaulting Lender, by
giving 15 Business Days’ prior written notice to the Agent and such Lender replace such Lender
by requiring such Lender to (and such Lender shall) transfer pursuant to Clause 25 (Changes to
the Lenders) all (and not part only) of its rights and obligations under this Agreement to a
Lender or other bank, financial institution, trust, fund or other entity (a Replacement
Lender) selected by the Borrower, and which (unless the Agent is an Impaired Agent) is
acceptable to the Agent (acting reasonably) and which confirms its willingness to assume and
does assume all the obligations or all the relevant obligations of the transferring Lender
(including the assumption of the transferring Lender’s participations or unfunded
participations (as the case may be) on the same basis as the transferring Lender) for a
purchase price in cash payable at the time of transfer equal to the outstanding principal
amount of such Lender’s participation in the outstanding Utilisations and all accrued interest
and/or Break Costs and other amounts payable in relation thereto under the Finance Documents.
	 
	(b)	 	Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall
be subject to the following conditions:

	 	(i)	 	the Borrower shall have no right to replace the Agent or Security Trustee;

Page 125

 

	 	(ii)	 	neither the Agent nor the Defaulting Lender shall have any obligation to the
Borrower to find a Replacement Lender;
	 
	 	(iii)	 	the transfer must take place no later than 5days after the notice referred
to in paragraph (a) above; and
	 
	 	(iv)	 	in no event shall the Defaulting Lender be required to pay or surrender to
the Replacement Lender any of the fees received by the Defaulting Lender pursuant to
the Finance Documents.

	39.	 	CONFIDENTIALITY
	 
	39.1	 	Confidential Information

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it
to anyone, save to the extent permitted by Clause 39.2 (Disclosure of Confidential Information) and
Clause 39.3 (Disclosure to numbering service providers), and to ensure that all Confidential
Information is protected with security measures and a degree of care that would apply to its own
confidential information.

	39.2	 	Disclosure of Confidential Information

Any Finance Party may disclose:

	(a)	 	to any of its Affiliates and Related Funds and any of its or their officers, directors,
employees, professional advisers, auditors, partners and Representatives such Confidential
Information as that Finance Party shall consider appropriate if any person to whom the
Confidential Information is to be given pursuant to this paragraph (a) is informed in writing
of its confidential nature and that some or all of such Confidential Information may be
price-sensitive information except that there shall be no such requirement to so inform if the
recipient is subject to professional obligations to maintain the confidentiality of the
information or is otherwise bound by requirements of confidentiality in relation to the
Confidential Information;
	 
	(b)	 	to any person:

	 	(i)	 	to (or through) whom it assigns or transfers (or may potentially assign or
transfer) all or any of its rights and/or obligations under one or more Finance
Documents and to any of that person’s Affiliates, Related Funds, Representatives and
professional advisers;
	 
	 	(ii)	 	with (or through) whom it enters into (or may potentially enter into),
whether directly or indirectly, any sub-participation in relation to, or any other
transaction under which payments are to be made or may be made by reference to, one or
more Finance Documents and/or one or more Obligors and to any of that person’s
Affiliates, Related Funds, Representatives and professional advisers;
	 
	 	(iii)	 	appointed by any Finance Party or by a person to whom paragraph (b)(i) or
(ii) above applies to receive communications, notices, information or documents
delivered pursuant to the Finance Documents on its behalf (including, without
limitation, any person appointed under paragraph (d) of Clause 28.14 (Relationship
with the Lenders));

Page 126

 

	 	(iv)	 	who invests in or otherwise finances (or may potentially invest in or
otherwise finance), directly or indirectly, any transaction referred to in paragraph
(b)(i) or (b)(ii) above;
	 
	 	(v)	 	to whom information is required or requested to be disclosed by any court of
competent jurisdiction or any governmental, banking, taxation or other Regulatory
Authority or similar body, the rules of any relevant stock exchange or pursuant to any
applicable law or regulation;
	 
	 	(vi)	 	to whom or for whose benefit that Finance Party charges, assigns or otherwise
creates Security (or may do so) pursuant to Clause 25.8 (Security over Lenders’
rights);
	 
	 	(vii)	 	to whom information is required to be disclosed in connection with, and for
the purposes of, any litigation, arbitration, administrative or other investigations,
proceedings or disputes;
	 
	 	(viii)	 	who is a Party; or
	 
	 	(ix)	 	with the consent of the Borrower;

	 	 	in each case, such Confidential Information as that Finance Party shall consider
appropriate if:

	 	(A)	 	in relation to paragraphs (b)(i), (b)(ii) and (b)(iii)
above, the person to whom the Confidential Information is to be given has
entered into a Confidentiality Undertaking except that there shall be no
requirement for a Confidentiality Undertaking if the recipient is a
professional adviser and is subject to professional obligations to maintain
the confidentiality of the Confidential Information;
	 
	 	(B)	 	in relation to paragraph (b)(iv) above, the person to whom
the Confidential Information is to be given has entered into a
Confidentiality Undertaking or is otherwise bound by requirements of
confidentiality in relation to the Confidential Information they receive and
is informed that some or all of such Confidential Information may be
price-sensitive information;
	 
	 	(C)	 	in relation to paragraphs (b)(v), (b)(vi) and (b)(vii)
above, the person to whom the Confidential Information is to be given is
informed of its confidential nature and that some or all of such Confidential
Information may be price-sensitive information except that there shall be no
requirement to so inform if, in the opinion of that Finance Party, it is not
practicable so to do in the circumstances;

	(c)	 	to any person appointed by that Finance Party or by a person to whom paragraph (b)(i) or
(b)(ii) above applies to provide administration or settlement services in respect of one or
more of the Finance Documents including without limitation, in relation to the trading of
participations in respect of the Finance Documents, such Confidential Information as may be
required to be disclosed to enable such service provider to provide any of the services
referred to in this paragraph (c) if the service provider to whom the Confidential Information
is to be given has entered into a confidentiality agreement substantially in the form of the
LMA Master Confidentiality Undertaking for Use With Administration/Settlement

Page 127

 

	 	 	Service Providers or such other form of confidentiality undertaking agreed between the Borrower and
the relevant Finance Party;

	(d)	 	to any rating agency (including its professional advisers) such Confidential Information as
may be required to be disclosed to enable such rating agency to carry out its normal rating
activities in relation to the Finance Documents and/or the Obligors if the rating agency to
whom the Confidential Information is to be given is informed of its confidential nature and
that some or all of such Confidential Information may be price-sensitive information.
	 
	39.3	 	Disclosure to numbering service providers
	 
	(a)	 	Any Finance Party may disclose to any national or international numbering service provider
appointed by that Finance Party to provide identification numbering services in respect of
this Agreement, the Facility and/or one or more Obligors the following information:

	 	(i)	 	names of Obligors;
	 
	 	(ii)	 	country of domicile of Obligors;
	 
	 	(iii)	 	place of incorporation of Obligors;
	 
	 	(iv)	 	date of this Agreement;
	 
	 	(v)	 	the names of the Agent and the Arranger;
	 
	 	(vi)	 	date of each amendment and restatement of this Agreement;
	 
	 	(vii)	 	amount of Total Commitments;
	 
	 	(viii)	 	currencies of the Facility;
	 
	 	(ix)	 	type of Facility;
	 
	 	(x)	 	ranking of Facility;
	 
	 	(xi)	 	Repayment Date for Facility;
	 
	 	(xii)	 	changes to any of the information previously supplied pursuant to paragraphs
(i) to (xi) above; and
	 
	 	(xiii)	 	such other information agreed between such Finance Party and the Borrower,

	 	 	to enable such numbering service provider to provide its usual syndicated loan numbering
identification services.

	(b)	 	The Parties acknowledge and agree that each identification number assigned to this Agreement,
the Facility and/or one or more Obligors by a numbering service provider and the information
associated with each such number may be disclosed to users of its services in accordance with
the standard terms and conditions of that numbering service provider.

Page 128

 

	(c)	 	Each Obligor represents that none of the information set out in paragraphs (i) to (xiii) of
paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.
	 
	(d)	 	The Agent shall notify the Borrower and the other Finance Parties of:

	 	(i)	 	the name of any numbering service provider appointed by the Agent in respect
of this Agreement, the Facility and/or one or more Obligors; and
	 
	 	(ii)	 	the number or, as the case may be, numbers assigned to this Agreement, the
Facility and/or one or more Obligors by such numbering service provider.

	39.4	 	Entire agreement

This Clause 39 (Confidentiality) constitutes the entire agreement between the Parties in relation
to the obligations of the Finance Parties under the Finance Documents regarding Confidential
Information and supersedes any previous agreement, whether express or implied, regarding
Confidential Information.

	39.5	 	Inside information

Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may
be price-sensitive information and that the use of such information may be regulated or prohibited
by applicable legislation including securities law relating to insider dealing and market abuse and
each of the Finance Parties undertakes not to use any Confidential Information for any unlawful
purpose.

	39.6	 	Notification of disclosure

Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the
Borrower:

	(a)	 	of the circumstances of any disclosure of Confidential Information made pursuant to paragraph
(b)(v) of Clause 39.2 (Disclosure of Confidential Information) except where such disclosure is
made to any of the persons referred to in that paragraph during the ordinary course of its
supervisory or regulatory function; and
	 
	(b)	 	upon becoming aware that Confidential Information has been disclosed in breach of this Clause
39 (Confidentiality).
	 
	39.7	 	Continuing obligations

The obligations in this Clause 39 (Confidentiality) are continuing and, in particular, shall
survive and remain binding on each Finance Party for a period of twelve months from the earlier of:

	(a)	 	the date on which all amounts payable by the Obligors under or in connection with the Finance
Documents have been paid in full and all Commitments have been cancelled or otherwise cease to
be available; and
	 
	(b)	 	the date on which such Finance Party otherwise ceases to be a Finance Party.

Page 129

 

	40.	 	COUNTERPARTS

Each Finance Document may be executed in any number of counterparts, and by each party on separate
counterparts. Each counterpart is an original, but all counterparts shall together constitute one
and the same instrument. Delivery of a counterpart of this Agreement by email attachment or
telecopy shall be an effective mode of delivery.

	41.	 	CONFLICT WITH INSTRUMENT OF APPOINTMENT AND WATER ACT

No Obligor shall be obliged to comply (and no Obligor shall be obliged to ensure that any member of
the Group does comply) with any obligations or restrictions contained in the Finance Documents
where to do so would cause that Obligor (or any other member of the Group) to breach the Instrument
of Appointment (including without limitation Condition P of the Instrument of Appointment and any
undertakings provided pursuant to the Instrument of Appointment) and/or the Water Act and where an
Obligor does not comply with any such obligation or restriction it shall not constitute a breach of
the Finance Documents.

Page 130

 

SECTION 12

GOVERNING LAW AND ENFORCEMENT

	42.	 	GOVERNING LAW

This Agreement and any non-contractual obligations arising out of or in connection with it are
governed by English law.

	43.	 	ENFORCEMENT

	43.1	 	Jurisdiction of English courts
	 
	(a)	 	The courts of England have exclusive jurisdiction to settle any dispute arising out of or in
connection with this Agreement (including a dispute relating to the existence, validity or
termination of this Agreement or any non-contractual obligation arising out of or in
connection with this Agreement) (a Dispute).
	 
	(b)	 	The Parties agree that the courts of England are the most appropriate and convenient courts
to settle Disputes and accordingly no Party will argue to the contrary.
	 
	(c)	 	This Clause 43.1 (Jurisdiction of English courts) is for the benefit of the Finance Parties
and Secured Parties only. As a result, no Finance Party or Secured Party shall be prevented
from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the
extent allowed by law, the Finance Parties and Secured Parties may take concurrent proceedings
in any number of jurisdictions.
	 
	43.2	 	Service of process
	 
	(a)	 	Without prejudice to any other mode of service allowed under any relevant law, each Obligor
(other than an Obligor incorporated in England and Wales):

	 	(i)	 	irrevocably appoints the Borrower as its agent for service of process in
relation to any proceedings before the English courts in connection with any Finance
Document (and the Borrower by its execution of this Agreement, accepts that
appointment); and
	 
	 	(ii)	 	agrees that failure by an agent for service of process to notify the relevant
Obligor of the process will not invalidate the proceedings concerned.

	(b)	 	If any person appointed as an agent for service of process is unable for any reason to act as
agent for service of process, the Borrower (on behalf of all the Obligors) must immediately
(and in any event within five days of such event taking place) appoint another agent on terms
acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.
	 
	(c)	 	Each Obligor (other than an Obligor incorporated in England and Wales) expressly agrees and
consents to the provisions of this Clause 43 (Enforcement) and Clause 42 (Governing law).

This Agreement has been entered into on the date stated at the beginning of this Agreement.

Page 131

 

SIGNATURES TO THIS AGREEMENT

	 	 	 	 	 
	THE BORROWER

CASCAL INVESTMENTS (UK) LIMITED

 	 
	By:  	/s/ Jonathan Lamb
 	 
	 	 	JONATHAN LAMB 	 

	 	 	 

	Address:

	 	Biwater House

Station Approach

Dorking

Surrey RH4 1TZ
	 
	 	 
	Fax:

	 	+44 (0)1306 746031
	 
	 	 
	Attention:

	 	Group Counsel

	 	 	 	 	 
	THE GUARANTOR

CASCAL INVESTMENTS (UK) LIMITED

 	 
	By:  	/s/ Mark Thurston
 	 
	 	MARK THURSTON 	 

	 	 	 

	Address:

	 	Biwater House
	 

	 	Station Approach
	 

	 	Dorking
	 

	 	Surrey RH4 1TZ
	 
	 	 
	Fax:

	 	+44 (0)1306 746031
	 
	 	 
	Attention:

	 	Group Counsel

Signature Page to Facility Agreement

 

 

	 	 	 	 	 	 	 	 	 	 	 

	THE ARRANGER	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	MACQUARIE BANK LIMITED	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Phil Castro
	 	 	 	 	 	/s/ Andrew Dainton
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	PHIL CASTRO
	 	 	 	 	 	ANDREW DAINTON	 	 
	 

	 	Division Director
	 	 	 	 	 	Associate Director	 	 

	 	 	 

	Address:

	 	No. 1 Martin Place
	 

	 	Sydney, NSW, 2000
	 

	 	Australia
	 
	 	 
	Fax:

	 	+61 2 8232 3569 with a copy to: +353 1 238 3490
	 
	 	 
	Email:

	 	mcafdebtops@macquarie.com
	 
	 	 
	Attention:

	 	Emma Quigly

	 	 	 	 	 	 	 	 	 	 	 

	THE AGENT	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	MACQUARIE BANK LIMITED	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Phil Castro
	 	 	 	 	 	/s/ Andrew Dainton
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	PHIL CASTRO
	 	 	 	 	 	ANDREW DAINTON	 	 
	 

	 	Division Director
	 	 	 	 	 	Associate Director	 	 

	 	 	 

	Address:

	 	No. 1 Martin Place
	 

	 	Sydney, NSW, 2000
	 

	 	Australia
	 
	 	 
	Fax:

	 	+61 2 8232 3569 with a copy to +353 1 238 3490
	 
	 	 
	Email:

	 	mcafdebtops@macquarie.com
	 
	 	 
	Attention:

	 	Emma Quigly
	 
	 	 
	With a copy to	 	 
	 
	 	 
	Address:

	 	Level 25 CityPoint
	 

	 	One Ropemaker Street
	 

	 	London
	 

	 	EC2Y 9HD
	 
	 	 
	Fax:

	 	+44 203 037 2516 with a copy to both +61 2 8232 3569 and +353 1 238 3490
	 
	 	 
	Email:

	 	mcafcredituk@macquarie.com
	 
	 	 
	Attention:

	 	Peter Farthing/ Adam Joseph

Signature Page to Facility Agreement

 

 

	 	 	 	 	 	 	 	 	 	 	 

	THE SECURITY TRUSTEE	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	MACQUARIE BANK LIMITED	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Phil Castro
	 	 	 	 	 	/s/ Andrew Dainton
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	PHIL CASTRO

Division Director
	 	 	 	 	 	ANDREW DAINTON

Associate Director	 	 

	 	 	 

	Address:

	 	No. 1 Martin Place
	 

	 	Sydney, NSW, 2000
	 

	 	Australia
	 
	 	 
	Fax:

	 	+61 2 8232 3569 with a copy to +353 1 238 3490
	 
	 	 
	Email:

	 	mcafdebtops@macquarie.com
	 
	 	 
	Attention:

	 	Emma Quigly
	 
	 	 
	With a copy to
	 	 
	 
	 	 
	Address:

	 	Level 25 CityPoint
	 

	 	One Ropemaker Street
	 

	 	London
	 

	 	EC2Y 9HD
	 
	 	 
	Fax:

	 	+44 203 037 2516 with a copy to both +61 2 8232 3569 and +353 1 238 3490
	 
	 	 
	Email:

	 	mcafcredituk@macquarie.com
	 
	 	 
	Attention:

	 	Peter Farthing/ Adam Joseph

	 	 	 	 	 	 	 	 	 	 	 

	THE ORIGINAL LENDERS	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	MACQUARIE BANK LIMITED	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Phil Castro
 

PHIL CASTRO 

Division Director
	 	 	 	 	 	/s/ Andrew Dainton
 

ANDREW DAINTON 

Associate Director
	 	 

	 	 	 

	Address:

	 	No. 1 Martin Place
	 

	 	Sydney, NSW, 2000
	 

	 	Australia
	 
	 	 
	Fax:

	 	+61 2 8232 3569 with a copy to: +353 1 238 3490
	 
	 	 
	Email:

	 	mcafdebtops@macquarie.com
	 
	 	 
	Attention:

	 	Emma Quigly

Signature Page to Facility Agreement

 

 

SCHEDULE 1

THE ORIGINAL PARTIES

Part A

The Borrower

	 	 	 

	Name of Borrower
	 	Registration number (or equivalent, if any) Jurisdiction of Incorporation
	 
	Cascal Investments (UK) Limited
	 	07283293

Page 135

 

Part B

The Original Lenders

	 	 	 	 	 

	Name of Original Lender
	 	Commitment
	 
	 	 	 	 
	Macquarie Bank Limited
	 	£	55,200,000	 

Page 136exv10w1

Exhibit 10.1

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

OFFEROR TO COMPLETE BLOCKS 17,23,24, & 30

2 CONTRACT NO.

3. AWARD/
DATE

4. ORDER NUMBER

5. SOLICITATION NUMBER
797-DSNS-0903

6. SOLICITATION ISSUE DATE
1/7/09

b. TELEPHONE NUMBER (No COLLECT calls)
7. FOR SOLICITATION INFORMATION CALL:
9. ISSUED BY:

 a. NAME

CODE

10. THIS ACQUISITION IS X UNRESTRICTED OR

8. OFFER DUE DATE/ LOCAL TIME 1/14/09
12:30 PM Central Time
SET ASIDE       100%; FOR

EMERGING SMALL BUSINESS
Department of Veterans Affairs P.O. Box 76, 049A2-l Hines, IL 60141
Hand carried offers may be delivered to the front Desk of the location indicated in Block 16.
12. DISCOUNT TERMS:
11. DELIVERY FOR HOD; DESTINATION unless block is marked
SEE SCHEDULE
15. DELIVER TO:
CODE

NAICS: 562211 STANDARD: $11.5
On.  THIS CONTRACT IS A
RATED ORDER UNDER
DPAS(15CFR700)
16. ADMINISTERED BY::

SMALL BUSINESS
HUBZONE SMALL BUSINESS
SERVICE-DISABLED VETERAN.       8(A)
OWNED SMALL BUSINESS
13b. RATING
14. METHOD OF SOLICITATION
RFQ IFB RFF
CODE

DELIVERY ADDRESS IS SHOWN ON INDIVIDUAL DELIVERY ORDERS

Department of Veterans Affairs
1st Ave., 1 Block North of Cermak Rd., Bldg. 37, 049A2-1
Hines, IL 60141

I7a CONTRACTOR OFFEROR

CODE

FACILITY CODE

18a. PAYMENT WILL BE MADE BY:
SAME BLOCK AS #16

CODE

TELEPHONE NO.

DUNS NO

17b.

CHECK IF REMITTANCE IS DIFFERENT AND PUT SUCH
ADDRESS IN
OFFER

18b. SUBMIT INVOICES TO ADDRESS SHOWN IN BLOCK 18a UNLESS BLOCK BELOW IS CHECKED  SEE ADDENDUM

19. ITEM NO.

20.
SCHEDULE Of supplies/services

21. QUANTITY

22. UNIT

23.
UNIT PRICE

24. AMOUNT

/Use Reverse and/or Attach Additional Sheets as Necessary)

25. ACCOUNTING AND APPROPRIATION DATA
SHOWN ON INDIVIDUAL DELIVERY ORDERS

26. TOTAL AWARD AMOUNT (For Govt. Use Only)

27a. SOLICITATION INCORPORATES BY REFERENCE FAR 52.212-1, 52.2l2-1. FAR 52.212-3 AND FAR  52.2l2-5 ARE ATTACHED. ADDENDA 27b. CONTRACT/PURCHASE ORDER INCORPORATES BY REFERENCE FAR 52.212-1, 52.212-1. FAR 52.212-3 AND FAR  52.2l2-5  ATTACHED. ADDENDA

ARE ARE

ARE NOT ATTACHED ARE NOT ATTACHED

28. CONTRACTOR IS REQUIRED TO SIGN THIS DOCUMENT AND RETURN 1 COPIES TO ISSUING OFFICE. CONTRACTOR AGREES TO FURNISH AND DELIVER ALL ITEMS SET FORTH OK OTHERWISE. IDENTIFIED ABOVE AND ON ANY ADDITIONAL. SHEETS SUBJECT TO THE TERMS AND CONDITIONS SPECIFIED HEREIN.

29. AWARD OF CONTRACT REF SHARPS OFFER
DATED 1/13/09 YOUR OFFER ON SOLICITATION
(BLOCK 5), INCLUDING ANY ADDITIONS OR CHANGES WHICH ARE SET FORTH HEREIN, IS ACCEPTED AS TO ITEMS:

30a. SIGNATURE OF OFFEROR/CONTRACTOR
31a. UNITED STATES OF AMERICA (SIGNATURE OF CONTRACTING OFFICER

30b. Name and title of signer (Type or print
30c. DATE SIGNED

31b. NAME OF CONTRACTING OFFICER (Type or print)
31c. DATE SIGNED

AUTHORIZED FOR LOCAL REPRODUCTION
PREVIOUS EDITION IS NOT USABLE

STANDARD FORM 1449 (REV. 3/2005)
PRESCRIBED BY GSA - FAR (48 CFR) 43212

V797P-DSNS-9005
1/29/2009
SHARPS COMPLIANCE
9220 KIRBY DR., SUITE 500
HOUSTON, TX 77054
713-432-0300
DAVID P. TVSA, EXEC VP & CFO
1/29/09

38,769,185.00

1

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

SCHEDULE Of SUPPLIES/SERVICES

STIMATED QUANTITY

UNIT

UNIT PRICE

AMOUNT

REFER TO ATTACHMENT A
32a. QUANTITY IN COLUMN 21 HAS BEEN

 RECEIVED

INSPECTED

ACCEPTED, AND CONFORMS TO THE CONTRACT, EXCEPT AS NOTED:

32b. SIGNATURE OF AUTHORIZED GOVERNMENT REPRESENTATIVE

32c. DATE

32d. POINTED NAME AND TITLE OF AUTHORIZED GOVERNMENT REPRESENTATIVE

32c. MAILING ADDRESS OF AUTHORIZED GOVERNMENT REPRESENTATIVE

32f. TELEPHONE NUMBER OF AUTHORIZED GOVERNMENT REPRESENTATIVE

32g. e-mail of authorized government representative

33. SHIP NUMBER

34. VOUCHER NUMBER.

35. AMOUNT VERIFIED CORRECT FOR

35. PAYMENT

37. CHECK NUMBER

PARTIAL   FINAL

 COMPLETE        PARTIAL	 FINAL

38. S/R ACCOUNT NUMBER	39. VOUCHER NUMBER 40. PAID BY

42h. RECEIVED AT (Location) 42c. DATE REC'D (YY/MM/DD)
41b. I CERTIFY THIS ACCOUNT IS CORRECT AMD PROPER FOR PAYMENT   41b. RECEIVED BY (Print 41b. SIGNATURE AND TITLE OF CERTIFYING OFFICER       41c. DATE

 42d. TOTAL CONTAINERS

STANDARD FORM 1449 (REV. 3/2005) BACK

2

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ATTACHMENT “A”

RFP 797-DSNS-0903

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	QTV	 	EA PRICE	 	BASE YEAR	 	OPTION YR 1	 	OPTION YR 2	 	OPTION YR 3	 	OPTION YR 4
	 	 	 
	Kitted-
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mailbacks(l)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[REDACTED]
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[REDACTED]
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[REDACTED]
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Ancillary Items (2)
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(Refer to page 2 for list of items)
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Assembly & Inspection
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Shipping (5)
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Unkitted-
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mailbacks(1)
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[REDACTED]
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[REDACTED]
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[REDACTED]
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Ancillary Items (2)
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Assembly & Inspection (7)
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Shipping (6)
	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Warehousing (3)
	 	 	 	 	 	 	 	 	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Training (4)
	 	 	 	 	 	 	 	 	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]	 	[REDACTED]
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ANNUAL TOTAL
	 	 	 	 	 	 	 	 	 	$	28,541,409.00	 	 	$	1,518,125.00	 	 	$	2,888,186.00	 	 	$	2,901,490.00	 	 	$	2,919,975.00	 
	 	 	 	 	 	 	 	 	 	 	 

NOTES:

 

			
	(1)	 	Includes all Mailback Products listed in Section 3.1 of the SOW.
	 
	 	 	Cost of outbound shipment of the Kits from the VMI
warehouse to the deployment destination determined by the Customer is not included.
	 
	(2)	 	Includes all ancillary supplies listed in Section 3.2 of the Request; see charges by component item in separate schedule.
	 
	 	 	Cost of outbound shipment of the Kits from the VMI
warehouse to the deployment destination determined
by the Customer is not included.
	 
	(3)	 	Includes all charges for warehousing including facilities, personnel, racking, insurance,
temperature monitoring, QA / QC, program manager, inventory rotation (once during the five year
contract period and in years three, four and five).
	 
	(4)	 	Includes that necessary to facilitate Section
2.3.1 of the Request (i.e., extensive CE certified
web-based training designed for this specific VMI
program).
	 
	(5)	 	Will be billed as incurred (.i.e., when Kits are shipped to the warehouse locations from Sharps
Manufacturing facility).
	 
	(6)	 	Will be billed for shipment of mailback Products as
incurred (i.e., when mailback Products are shipped to
the warehouse locations from Sharps Manufacturing
facility).
	 
	(7)	 	Will be billed as incurred (i.e., upon request by customer to kit product).

 

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

RFP 797-DSNS-0903

“ATTACHMENT A”

Ancillary Supplies (Per Kit) (See Note 1):

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Item Description	 	Package Type	 	 	Quantity	 	 	Total	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	[REDACTED]
	 	each	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	Bundle 10 each	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	100 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	100 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	2000 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	2000 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	2000 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	100 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	100 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	100 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	12 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	12 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	12 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	12 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	each	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	30 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	30 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	12 per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	4 rolls per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	each	 	[REDACTED]	 	 	[REDACTED]	 
	[REDACTED]
	 	36 roll per Carton	 	[REDACTED]	 	 	[REDACTED]	 
	Charge Per Kit
	 	 	 	 	 	 		 	 	$	5,364	 
	 
	 	 	 	 	 	 		 	 	 	 

Note:

 

			
	(1)	 	Excludes Assembly, Inspection and Outbound Shipping Charges.

 

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

STATEMENT OF WORK

1.0 INTRODUCTION

This Statement of Work is for logistical and operational support of requirements for medical waste
collection and disposal management support for the Division of Strategic National Stockpile (DSNS),
and for management guidance and support of a comprehensive system that will maintain public health
and medical waste disposal preparedness. The contractor must have national presence, understand and
adhere to local, state, and federal regulations, and have at least 10 years experience within the
field of medical waste disposal systems. The contractor will provide capabilities that enhance the
preparedness and response infrastructure of DSNS, including support for overall preparedness
functions, emergency response events, and post-event requirements.

This Statement of Work responds to requirements outlined by DSNS to be included as an operational
requirement for the program and provides specific capabilities for supporting public health and
medical preparedness pertaining to: 1) operations, 2) warehousing, 3) distribution, and 4) training
and exercising regarding medical waste. The general performance objectives for this SOW are
directly related to, and support the following components of Homeland Security Presidential
Directive 21 (HSPD21).

The Contractor shall support the DSNS by providing medical waste management sets, managed assets
warehouse facilities, on-site program management, subject matter expertise, consultation, and
technical support. Initial efforts will focus on standard business management and services for
organizational engineering, operational concept development, strategic planning, training, medical
waste kit procurement, and information technology assets in context with HSPD21 and other key DSNS
response plans, programs, and efforts.

2.0 GENERAL PERFORMANCE OBJECTIVES

Operations Include:

	 	•	 	Seamless Interoperability and Awareness of Medical Waste Management Systems
	 
	 	•	 	Complete and Effective Communications between
	 
	 	•	 	Command and Control of Facilities, Resources, and Operations in Preparation for
Emergency Events, During Emergency Events, and During Recovery
	 
	 	•	 	Development and Management of Medical Waste Management Records and Reports

Medical Waste Management System Assets and Technology and Infrastructure

	2.1.1.1	 	The Contractor shall assist in the definition, research, analysis, prototyping and deployment of Medical
Waste Management System assets and infrastructure to provide a baseline of technical capabilities supporting
efficient information exchanges and storage, situational awareness and action processing on both a daily and
emergency response basis by ensuring the availability of decision support tools (e.g., databases, reference
library, pre-scripted message templates, etc), multi-media visual displays, and the ability to communicate down to
state/local level and up to the DSNS levels. This task will entail redundant communications capability up to the
classified level (and IT access security through approved security solutions) and will require an end-to-end IT
systems approach.
	 
	2.1.1	 	Facilities Planning
	 
	2.1.1.1	 	The Contractor shall leverage the lessons learned from current or past operations to
produce operational documentation (concepts, plans, processes, information flows, interagency
agreements, and other documentation delivered as technical reports) so that the DSNS is
properly prepared to meet future all hazards public health emergencies regarding medical
waste management.
	 
	2.1.2	 	Contract/Task Management
	 
	2.1.2.1	 	The Contractor shall assign a Science Advisor (SA) to manage all task order actions and be
the primary interface with the Contracting Officer Technical Representative
	 
	2.1.2.2	 	The Contractor shall provide two standard deliverables in contractor format — the Technical
Report for operational document, plans, analyses, prototype efforts, etc. and the Monthly
Report for management of the task order effort. Technical Reports shall be provided as
requested.
	 
	2.1.2.3	 	The Contractor shall provide status, messaging, resource identification, credential
management, people and asset tracking and logistical resource management on a monthly basis to
the Contracting Officer Technical Representative.

3

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

STATEMENT OF WORK

	2.1.2.4	 	The Contractor shall maintain a system that encompasses full online assets visibility
of the readiness level of the Medical Waste Management System assets. This system will
include a database of individuals that have received and are certified in the
understanding of the Medical Waste Management System, messaging, logistical deployment
demands, hours of service and door to door accountability.
	 
	2.1.2.5	 	The Contractor shall maintain a WEB-based portal which supports the client on
contractor based resources, training certificates, kit inventory, and other informational
requirements determined by the DSNS Project Officer and the coordination with the SA.

2.2 Managed Inventory Warehousing

At a minimum the warehousing responsibilities includes:

	 	•	 	Facilities Management
	 
	 	•	 	Situational Awareness for Distribution of Assets
	 
	 	•	 	Inventory Management
	 
	 	•	 	Maintaining Inventory/Asset Integrity
	 
	 	•	 	Inventory/Asset and Facility Security
	 
	 	•	 	Safety
	 
	 	•	 	Records Management
	 
	 	•	 	Reporting
	 
	 	•	 	Quality Assurance/Quality Control

Warehousing is defined as the receipt and storage of Government Owned supplies, equipment,
ancillary support items, and the preparation of these materials for distribution if and
when required to do so in response to public health emergencies and natural disasters.
This includes providing all necessary facilities, expertise, labor, and materials to
accept delivery, unload, store, and account for all inventory acquired by the DSNS. All
products will be controlled, protected, and managed in a manner that will prevent damage
and/or losses while in the care of the Contractor. The warehouse facilities will include
all necessary temperature controlled storage areas required to maintain the Medical Waste
Management System assets, as well as office space, staging area space, and outside/parking
for staff and tractor-trailers (deliveries).

	2.2.1	 	Facilities Design, Monitoring and Maintenance
	 
	2.2.1.1	 	The Contractor shall maintain written procedures to describe the operation, maintenance
(including scheduled storage temperature alarm testing), and Out-Of-Specification
reporting (including emergency contact information with back-up personnel) of all
temperature-controlled storage areas.
	 
	2.2.1.2	 	The Contractor shall provide a Contractor owned and managed facility where Government
owned medical waste supplies and kits would be store to facilitate proper warehousing,
kitting, cleaning, maintenance, and operations.
	 
	2.2.1.3	 	The Contractor shall sustain and follow a written maintenance program and keep
documentation to ensure that all storage facilities are maintained in a good state of
repair and cleanliness. The Contractor will institute appropriate measures concerning
cleaning, refrigeration, maintenance, pest control, and the quality system governing these
procedures to ensure that the storage specifications meet cGMP standards. A quality
agreement will be in place between DSNS and the Contractor.
	 
	2.2.2	 	Comprehensive Qualification/Validation Program
	 
	2.2.2.1	 	The Contractor shall qualify/validate all temperature-controlled storage areas and
temperature monitoring systems using documented pre-specified testing procedures and
endpoints relevant to the qualifications. Results will be documented in a
qualifications/validation report.
	 
	2.2.3	 	Receipt and Storage of Products
	 
	2.2.3.1	 	The Contractor shall maintain physical control and ongoing accounting of all products as
they are received, stored, kitted, and withdrawn for shipment as requested by the Contracting
Officer Technical Representative to ensure that the lot, dating, and quantity of product
defined in each shipment manifest reconciles with that on the pack list.
	 
	2.2.3.2	 	The Contractor shall perform inventory of stored products so that 100% of product is
accounted for annually.

4

 

\

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

STATEMENT OF WORK

	2.2.4	 	Quality Control
	 
	2.2.4.1	 	The Contractor shall follow all manufacturers’ requirements for receipt, handling, storage,
and shipment of their products as well as all applicable state and federal regulations
governing the storage, handling and distribution of the Medical Waste Management System
assets. All warehouse operations must meet or exceed the standards defined by the U.S.
Pharmacopoeia (USP).
	 
	2.2.4.2	 	The Contractor shall maintain comprehensive Quality System programs which comply in all
material respects with the regulations contained in 21CFR Parts 210 and 211 applicable to
holding finished pharmaceuticals and goods, Title 21 CFR Part 820 applicable to quality system
regulation, Title 21 CFR Part 600 applicable to Biological Products, 21 CFR Part 11
regulations applicable to GMPs, current edition of the USP applicable to holding of
Pharmaceuticals, and FDA and cGMP (current Good Manufacturing Practices) standards for
environmental and quality controls.
	 
	2.2.4.3	 	The Contractor shall have an appropriate calibration, and maintenance/repair program for
all temperature controlled equipment or monitoring systems established and documented within
their quality system. Appropriate schedules for all calibration, maintenance, and regular
replacement of components, as well as the responsibilities for the execution of the schedules
will be clearly defined within this program. All calibration, maintenance/repair will be
documented and maintained in individual equipment files. All calibrations will be performed
according to current NIST standards.
	 
	2.2.4.4	 	The Contractor shall meet all 21CFR Part 11 requirements for data security regarding
logging of changes, password exportation, and all other details set forth by this regulatory
requirement.
	 
	2.2.4.5	 	The Contractor shall utilize a master warehouse layout plan that aids in locating
inventories by rack, shelf, and section.
	 
	2.2.4.6	 	The Contractor shall maintain SOPs for all activities and responsibilities. All employees
will be trained on all approved SOPs applicable to their assigned tasks prior to them
performing the tasks and SOPs will be readily available to the employees.
	 
	2.2.4.7	 	The Contractor shall maintain a written deviation and/or non-conformance reporting system
documenting deviations from SOPs and protocols, investigation of the root cause, and
corrective actions/preventive actions (CAPA) taken, and follow-up procedures, when
appropriate.
	 
	2.2.4.8	 	The Contractor shall contact the Project Officer within one business day for guidance on
handling inventoried items that have been affected by temperature or humidity deviations, and
notify the Contracting Officer and the Project Officer in writing of any product losses,
including loss due to spoilage, theft, fire, water damage, etc., within one business day of
the loss.
	 
	2.2.5	 	Safety
	 
	2.2.5.1	 	The Contractor warehouse facilities and operations shall have acceptable safety monitoring
and an annual review of all OSHA safety policies.
	 
	2.2.6	 	Security
	 
	2.2.6.1	 	Contractor warehouse facilities will have 24-hour physical security monitoring and
response. Security is an integral part of the DSNS sensitive material storage and distribution
mission. Therefore, the primary responsibility of Contractor Security Officers and their
supervisor shall be to provide quality security protection services.
	 
	2.2.6.2	 	The Contractor will limit access to the Medical Waste Management System assets and
operating inventories to only authorized personnel and ensure that these personnel enter the
storage areas only when necessary.
	 
	2.2.7	 	Fire Protection
	 
	2.2.7.1	 	The Contractor warehouse facilities will have 24 hour day-to-day physical protection and monitoring for fires.
	 
	2.2.8	 	Electronic Temperature Monitoring
	 
	2.2.8.1	 	The Contractor shall use state-of-the-art technologies in temperature and humidity
monitoring throughout the warehouse facilities. This will include 24-hour electronic monitoring
with alarms in the event that temperatures and humidity vary from the appropriate ranges.

5

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

STATEMENT OF WORK

	2.2.9	 	Redundant Systems
	 
	2.2.9.1	 	Contractor warehouse operations shall have backup electric power generators with transfer
switches between the electric utility and the power generator to insure a safe, continuous
and reliable source of power in the event of failure of electricity supplies. Specifically,
the Contractor will provide and maintain the following applicable redundant systems:

	 	•	 	Back-up generator power for key facility components, including all temperature controlled environments.
	 
	 	•	 	Uninterrupted Power Source (UPS) for all temperature monitoring systems.
	 
	 	•	 	Back up temperature monitoring system.
	 
	 	•	 	Data back-up of all validated temperature monitoring systems.

	2.2.10	 	Inventory Management
	 
	2.2.10.1	 	The Contractor shall have written inventory policies and procedures that include physical
inventory balancing and discrepancy handling procedures.
	 
	2.2.10.2	 	The Contractor shall implement a system to track supplies, equipment, ancillary supplies,
and other items that will be maintained for the DSNS. This will include logging and scheduling
preventive maintenance, validations, and calibrations of equipment requiring such activities.
	 
	2.2.11	 	 Preparing Shipments
	 
	2.2.11.1	 	The Contractor shall kit, label, tag or otherwise prepare products for shipment as
requested by DSNS.
	 
	2.2.11.2	 	The Contractor shall assemble client orders and load trailers for shipment of products to
destinations designated by the DSNS.
	 
	2.2.11.3	 	The Contractor shall be able to deliver shipments to the continental United States as
requested the Contracting Officer Technical Representative within a 24 hour period.
	 
	2.2.12	 	 Data Management, Document Control, and Reporting
	 
	2.2.12.1	 	The Contractor shall maintain all facility records in compliance with DSNS-approved
quality assurance standards, to include a formal document control program to manage the approval, distribution, archival, and change
control of all cGMP-relevant documents, such as standard operating procedures (SOPs),
validation documents, and training records.
	 
	2.2.12.2	 	The Contractor shall generate and present all documentation, receipts, and reports on
demand to the Project Officer/DSNS in a format acceptable to the Project Officer/DSNS.
	 
	2.2.13	 	Product Insurance
	 
	2.2.13.1	 	The Contractor shall maintain custodial risk insurance or other similar insurance in an
adequate amount to cover the commercial replacement value of all supplies, equipment,
ancillary support items, and other materials and items held in the Contractor’s possession
under this program.

2.3 Training

The intent of on line training and is to help federal, state, and local officials plan and manage
an effective medical response to a terrorist attack, natural disaster, or technological accident.
The on line training will concentrate on the design of a comprehensive system, and within that
system, individual sites, that will quickly dispense assets to the public to protect it from an
incident. System design covers issues such as determining the location and number of response sites
for responding to a large-scale incident. Site design covers issues such as management, staffing,
material and equipment support, and process flow that directly affect the number of people each
site is able to process. When participants complete the on line training, they will better
appreciate the need for vigorous, detailed planning before an event, the value of exercising their
plan to test its effectiveness, and the importance of maintaining a permanent infrastructure to
ensure their plan is ready when an event occurs.

6

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

STATEMENT OF WORK

	2.3.1	 	Robust and Recurring Training
	 
	2.3.1.1	 	The Contractor shall establishing a robust and recurring on line training program regarding
medical waste collection and disposal management. This subtask is an inherent part of
developing the Operational Concept and is key to future success. This effort will provide
requisite training and/or exercises that includes all DSNS emergency response organizational
elements related to HSPD21 to enhance the DSNS public health response to future emergencies.
Typical products may include overall training and/or exercise plans, lesson outlines, on-line
or computer based training modules, tradeoff analyses, and inputs to a variety of documents
delivered as technical reports. The training developed by the Contractor will need to be
certified through the appropriate organizations to be a Continuing Education (CE) certified
program. Certificates of completion will be maintained and produced by the Contractor. All
registered and completed trainees will be provided to the Contracting Officer Technical
Representative on a pre-determined reporting format and periodical basis.
	 
	2.3.1.2	 	The Contractor shall provide a nationwide preparedness training and education program for
state and local health care providers, first responders, and governments (to include federal
officials, governors’ offices, state and local health departments, and emergency management
agencies). This training will include an explanation of the Medical Waste Management System
for the SNS Program and how it enhances the overall DSNS mission and operations, but it will
also alert state and local emergency response officials to the important issues they must plan
for in order to dispose of SNS assets.
	 
	3.0	 	
Medical Waste Management System
Assets

This section of the Statement Of Work is to provide the contractor with a clear and concise list
of materials that will be required to formulate the Medical Material Waste Management System. This
will include medical waste disposal systems, supplies, equipment, and other items to build the
system.

	3.1

 The Contractor shall provide the following quantities and sizes of medical
waste mail-back systems:

Table 1

	 	 	 	 	 

	3.1.1	 	[REDACTED]	 	 
	3.1.2	 	[REDACTED]	 	 
	3.1.3	 	[REDACTED]	 	 
	 	 	Criteria for the above mail-back systems:
	 

	 	     (i)
	 	USPS approved for transporting small quantities of medical waste
	 

	 	     (ii)
	 	Include polyethylene puncture and leak resistant container
	 

	 	     (iii)
	 	Protective 4 mil bag liner
	 

	 	     (iv)
	 	Instructions in English and Spanish
	 

	 	     (v)
	 	Bar coded manifest and online tracking and proof of destruction
	 

	 	     (vi)
	 	Independently tested for compliance with standards for medical waste transportation with USPS
	 

	 	     (vii)
	 	All appropriate USPS permits
	 

	 	     (viii)
	 	Opening of container at 45 degree angle and sturdy handle
	 

	 	     (ix)
	 	Listed as EPA approved solution for proper disposal of medical waste
	 

	 	     (x)
	 	Permitted and packaged for pre-arranged transportation including postage

	3.2

 The Contractor shall provide the following ancillary supplies that will be utilized as support
items for the Medical Waste Management Systems:

Table 2

	 	 	 	 	 
	 	 	Quantity	 	Item
	3.2.1	 	[REDACTED]	 	[REDACTED]
	3.2.2	 	[REDACTED]	 	[REDACTED]
	3.2.3	 	[REDACTED]	 	[REDACTED]
	3.2.4	 	[REDACTED]	 	[REDACTED]
	3.2.5	 	[REDACTED]	 	[REDACTED]
	3.2.6	 	[REDACTED]	 	[REDACTED]
	3.2.7	 	[REDACTED]	 	[REDACTED]
	3.2.8	 	[REDACTED]	 	[REDACTED]

7

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

	 	 	 	 	 
	 	 	Quantity	 	Item
	3.2.9	 	[REDACTED]	 	[REDACTED]
	3.2.10	 	[REDACTED]	 	[REDACTED]
	3.2.11	 	[REDACTED]	 	[REDACTED]
	3.2.12	 	[REDACTED]	 	[REDACTED]
	3.2.13	 	[REDACTED]	 	[REDACTED]
	3.2.14	 	[REDACTED]	 	[REDACTED]
	3.2.15	 	[REDACTED]	 	[REDACTED]
	3.2.16	 	[REDACTED]	 	[REDACTED]
	3.2.17	 	[REDACTED]	 	[REDACTED]
	3.2.18	 	[REDACTED]	 	[REDACTED]
	3.2.19	 	[REDACTED]	 	[REDACTED]
	3.2.20	 	[REDACTED]	 	[REDACTED]
	3.2.21	 	[REDACTED]	 	[REDACTED]

3.3 The contractor shall assemble, kit, label, and store ready to deploy [REDACTED] Medical Waste
Management Kits. One kit will consist of the following items from
table 1 and table 2:

	 	 	 	 	 
	3.3	 	Quantity	 	Item
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]
	 	 	[REDACTED]	 	[REDACTED]

[REDACTED]. A maximum of 20% of these items will be kitted and palletized [REDACTED]. These kits will be
palletized on standard wooden pallets with a dimension not greater than 48 inches by 48
inches. The pallets will not have a height dimension greater than 50 inches. These pallets
will be shrink wrapped with transparent pallet wrapping.

3.4 The Contractor shall own and operate state-approved and permitted treatment facility with
destruction capabilities including incineration to support the destruction of the Medical Waste
Management System assets. This facility must be operational during non- deployment times to handle
assets used for Public Health non-emergency deployments.

3.5 The Contractor will be required to perform a rotation in place handling of the Medical Waste
Management System assets to insure that the DSNS is receiving clean and up to date products
maintained in the DSNS assets. These rotations will be coordinated with DSNS and the appropriate
reports will be provided. DSNS will determine the percentage of readiness the Medical Waste
Management System can fall to during a product rotation. The goal of this contract will be to
rotate the assets at least once during the contract period. Items that do not have adequate
regular consumption will be rotated to maximum level within the contractor customer base use.

8

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART II — 52.212-4 CONTRACT TERMS AND CONDITIONS-COMMERCIAL ITEMS (OCT 2008)

     (a) Inspection/Acceptance. The Contractor shall only tender for acceptance those items that
conform to the requirements of this contract. The Government reserves the right to inspect or test
any supplies or services that have been tendered for acceptance. The Government may require repair
or replacement of nonconforming supplies or reperformance of nonconforming services at no increase
in contract price. If repair/replacement or reperformance will not correct the defects or is not
possible, the Government may seek an equitable price reduction or adequate consideration for
acceptance of nonconforming supplies or services. The Government must exercise its post-acceptance
rights—

          (1) Within a reasonable time after the defect was discovered or should have been discovered;
and

          (2) Before any substantial change occurs in the condition of the item, unless the change is due
to the defect in the item.

     (b) Assignment. The Contractor or its assignee may assign its rights to receive payment
due as a result of performance of this contract to a bank, trust company, or other financing
institution, including any Federal lending agency in accordance with the Assignment of Claims
Act (31 U.S.C. 3727). However, when a third party makes payment (e.g., use of the
Governmentwide commercial purchase card), the Contractor may not assign its rights to receive
payment under this contract.

     (c) Changes. Changes in the terms and conditions of this contract may be made only by written
agreement of the parties.

     (d) Disputes. This contract is subject to the Contract Disputes Act of 1978, as amended
(41 U.S.C. 601-613). Failure of the parties to this contract to reach agreement on any
request for equitable adjustment, claim, appeal or action arising under or relating to this
contract shall be a dispute to be resolved in accordance with the
clause at FAR 52.233-1,
Disputes, which is incorporated herein by reference. The Contractor shall proceed diligently with
performance of this contract, pending final resolution of any dispute
arising under the contract.

     (e) Definitions.
The clause at FAR 52.202-1, Definitions, is incorporated herein by
reference.

     (f) Excusable delays. The Contractor shall be liable for default unless nonperformance is
caused by an occurrence beyond the reasonable control of the Contractor and without its fault or
negligence such as, acts of God or the public enemy, acts of the Government in either its sovereign
or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, unusually
severe weather, and delays of common carriers. The Contractor shall notify the Contracting Officer
in writing as soon as it is reasonably possible after the commencement of any excusable delay,
setting forth the full particulars in connection therewith, shall remedy such occurrence with all
reasonable dispatch, and shall promptly give written notice to the Contracting Officer of the
cessation of such occurrence.

     (g) Invoice.

          (1) The Contractor shall submit an original invoice and three copies (or electronic
invoice, if authorized) to the address designated in the contract to receive invoices. An
invoice must include—

               (i) Name and address of the Contractor;

               (ii) Invoice
date and number;

               (iii) Contract number, contract line item number and, if applicable, the order number;

               (iv) Description, quantity, unit of measure, unit price and extended price of the items
delivered;

               (v) Shipping number and date of shipment, including the bill of lading number and weight
of shipment if shipped on Government bill of lading;

               (vi) Terms of any discount for prompt payment offered;

               (vii) Name and address of official to whom payment is to be sent;

               (viii) Name, title, and phone number of person to notify in event of defective invoice; and

               (ix) Taxpayer Identification Number (TIN). The Contractor shall include its TIN on the invoice
only if required elsewhere in this contract,

               (x) Electronic funds transfer (EFT) banking information.

                    (A) The Contractor shall include EFT banking information on the invoice only if required
elsewhere in this contract.

                    (B) If EFT banking information is not required to be on the invoice, in order for the invoice
to be a proper invoice, the Contractor shall have submitted correct EFT banking information in
accordance with the applicable solicitation provision, contract
clause (e.g., 52.232-33,
Payment by Electronic Funds Transfer—Central Contractor
Registration, or 52232-34, Payment
by Electronic Funds Transfer—Other Than Central Contractor Registration), or applicable agency
procedures.

                    (C) EFT banking information is not required if the Government waived the requirement to pay
by EFT.

          (2) Invoices will be handled in accordance with the Prompt Payment Act (31 U.S.C. 3903) and Office of Management and Budget (OMB) prompt payment regulations at 5 CFR Part
1315.

9

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART
II — 52.212-4 CONTRACT TERMS AND CONDITIONS—COMMERCIAL ITEMS (OCT 2008) cont.

     (h) Patent indemnity. The Contractor shall indemnify the Government and its officers,
employees and agents against liability, including costs, for actual or alleged direct or
contributory infringement of, or inducement to infringe, any United States or foreign patent,
trademark or copyright, arising out of the performance of this contract, provided the Contractor is
reasonably notified of such claims and proceedings.

     (i) Payment—

          (1) Items accepted. Payment shall be made for items accepted by the Government that have
been delivered to the delivery destinations set forth in this
contract.

          (2) Prompt payment The Government will make payment in accordance with the Prompt Payment Act
(3l U.S.C. 3903) and prompt payment regulations at 5 CFR Part 1315.

          (3) Electronic Funds Transfer (EFT). If the Government makes payment by EFT, see
52.212-5(b) for the appropriate EFT clause.

          (4) Discount. In connection with any discount offered for early payment, time shall be computed
from the date of the invoice. For the purpose of computing the discount earned, payment shall be
considered to have been made on the date which appears on the payment check or the specified
payment date if an electronic funds transfer payment is made.

          (5) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice
payment or that the Government has otherwise overpaid on a contract financing or invoice payment,
the Contractor shall—

               (i) Remit the overpayment amount to the payment office cited in the contract along with a
description of the overpayment including the—

                    (A) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment,
liquidation errors, date(s) of overpayment);

                    (B) Affected contract number and delivery order number, if applicable;

                    (C) Affected contract line item or subline item, if applicable; and

                    (D) Contractor point of contact.

               (ii) Provide a copy of the remittance and supporting documentation to the Contracting
Officer.

          (6) Interest.

               (i) All amounts that become payable by the Contractor to the Government under this contract
shall bear simple interest from the date due until paid unless paid within 30 days of becoming due.
The interest rate shall be the interest rate established by the Secretary of the Treasury as
provided in Section 611 of the Contract Disputes Act of 1978 (Public Law 95-563), which is
applicable to the period in which the amount becomes due, as provided in (i)(6)(v) of this clause,
and then at the rate applicable for each six-month period as fixed by the Secretary until the
amount is paid.

               (ii) The Government may issue a demand for payment to the Contractor upon finding a debt is
due under the contract.

               (iii) Final decisions. The Contracting Officer will issue a final decision as required by
33.211 if—

                    (A) The Contracting Officer and the Contractor are unable to reach agreement on the
existence or amount of a debt within 30 days;

                    (B) The Contractor fails to liquidate a debt previously demanded by the Contracting Officer
within the timeline specified in the demand for payment unless the amounts were not repaid because
the Contractor has requested an installment payment agreement; or

                    (C) The Contractor requests a deferment of collection on a debt previously demanded by the
Contracting Officer (see 32.607-2).

               (iv) If a demand for payment was previously issued for the debt, the demand for payment
included in the final decision shall identify the same due date as the original demand for payment.

               (v) Amounts shall be due at the earliest of the following dates:

                    (A) The
date fixed under this contract.

                    (B) The date of the first written demand for payment, including any demand for payment
resulting from a default termination.

               (vi) The interest charge shall be computed for the actual number of calendar days involved
beginning on the due date and ending on—

10

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART
II — 52.212-4 CONTRACT TERMS AND CONDITIONS—COMMERCIAL ITEMS (OCT 2008) cont.

                    (A) The date on which the designated office receives payment from the Contractor;

                    (B) The date of issuance of a Government check to the Contractor from which an amount
otherwise payable has been withheld as a credit against the contract debt; or

                    (C) The date on which an amount withheld and applied to the contract debt would otherwise have
become payable to the Contractor.

               (vii) The interest charge made under this clause may be reduced under the procedures
prescribed in 32.608-2 of the Federal Acquisition Regulation in effect on the date of this
contract.

     (j) Risk of loss. Unless the contract specifically provides otherwise, risk of loss or
damage to the supplies provided under this contract shall remain with the Contractor until, and
shall pass to the Government upon:

          (1) Delivery of the supplies to a carrier, if transportation is f.o.b. origin; or

          (2) Delivery of the supplies to the Government at the destination specified in the contract,
if transportation is f.o.b. destination.

     (k) Taxes. The contract price includes all applicable Federal, State, and local taxes and duties.

     (l) Termination for the Government’s convenience. The Government reserves the right to
terminate this contract, or any part hereof, for its sole convenience. In the event of such
termination, the Contractor shall immediately stop all work hereunder and shall immediately cause
any and all of its suppliers and subcontractors to cease work. Subject to the terms of this
contract, the Contractor shall be paid a percentage of the contract price reflecting the percentage
of the work performed prior to the notice of termination, plus reasonable charges the Contractor
can demonstrate to the satisfaction of the Government using its standard record keeping system,
have resulted from the termination. The Contractor shall not be required to comply with the cost
accounting standards or contract cost principles for this purpose. This paragraph does not give the
Government any right to audit the Contractor’s records. The Contractor shall not be paid for any
work performed or costs incurred which reasonably could have been avoided.

     (m) Termination for cause. The Government may terminate this contract, or any part hereof, for
cause in the event of any default by the Contractor, or if the Contractor fails to comply with any
contract terms and conditions, or fails to provide the Government, upon request, with adequate
assurances of future performance. In the event of termination for cause, the Government shall not
be liable to the Contractor for any amount for supplies or services not accepted, and the
Contractor shall be liable to the Government for any and all rights and remedies provided by law.
If it is determined that the Government improperly terminated this contract for default, such
termination shall be deemed a termination for convenience.

     (n) Title. Unless specified elsewhere in this contract, title to items furnished under this
contract shall pass to the Government upon acceptance, regardless of when or where the Government
takes physical possession.

     (o) Warranty. The Contractor warrants and implies that the items delivered hereunder are
merchantable and fit for use for the particular purpose described in
this contract.

     (p) Limitation of liability (TAILORED). Except as otherwise provided by an express warranty,
the Contractor will not be liable to the Government in a breach of warranty action for
consequential damages resulting from any defect or deficiencies in accepted items.

     (q) Other compliances. The Contractor shall comply with all applicable Federal, State and
local laws, executive orders, rules and regulations applicable to its performance under this
contract.

     (r) Compliance with laws unique to Government contracts. The Contractor agrees to comply with
31 U.S.C. 1352 relating to limitations on the use of appropriated funds to influence
certain Federal contracts; 18 U.S.C. 431 relating to officials not to benefit; 40
U.S.C. 3701, et seq., Contract Work Hours and Safety Standards
Act; 41 U.S.C. 51-38.
Anti-Kickback Act of 1986; 41 U.S.C. 265 and 10 U.S.C. 2409 relating to
whistleblower protections; 49 U.S.C. 40118, Fly American; and 41 U.S.C. 423
relating to procurement integrity.

     (s) Order of precedence. Any inconsistencies in this solicitation or contract shall be
resolved by giving precedence in the following order:

          (1) The schedule of supplies/services.

          (2) The Assignments, Disputes, Payments, Invoice, Other Compliances, and Compliance with Laws
Unique to Government Contracts paragraphs of this clause.

          (3) The clause at 52.212-5.

          (4) Addenda to this solicitation or contract, including any license agreements for computer
software.

          (5) Solicitation provisions if this is a solicitation.

          (6) Other paragraphs of this clause.

          (7) The Standard Form 1449.

11

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART II — 52.212-4 CONTRACT TERMS AND CONDITIONS-COMMERCIAL ITEMS (OCT 2008) cont.

          (8) Other documents, exhibits, and attachments.

          (9) The specification.

     (t) Central Contractor Registration (CCR).

          (1) Unless exempted by an addendum to this contract, the Contractor is responsible during
performance and through final payment of any contract for the accuracy and completeness of the data
within the CCR database, and for any liability resulting from the Government’s reliance on
inaccurate or incomplete data. To remain registered in the CCR database after the initial
registration, the Contractor is required to review and update on an annual basis from the date of
initial registration or subsequent updates its information in the CCR database to ensure it is
current, accurate and complete. Updating information in the CCR does not alter the terms and
conditions of this contract and is not a substitute for a properly executed contractual document.

          (2)(i) If a Contractor has legally changed its business name, “doing business as” name, or
division name (whichever is shown on the contract), or has transferred the assets used in
performing the contract, but has not completed the necessary requirements regarding novation and
change-of-name agreements in FAR Subpart 42.12, the Contractor shall provide the
responsible Contracting Officer a minimum of one business day’s written notification of its
intention to (A) change the name in the CCR database; (B) comply with the requirements of
Subpart 42.12; and (C) agree in writing to the timeline and procedures specified by the
responsible Contracting Officer. The Contractor must provide with the notification sufficient
documentation to support the legally changed name.

               (ii) If the Contractor fails to comply with the requirements of paragraph (t)(2)(i) of this
clause, or fails to perform the agreement at paragraph (t)(2)(i)(C) of this clause, and, in the
absence of a properly executed novation or change-of-name agreement, the CCR information that shows
the Contractor to be other than the Contractor indicated in the contract will be considered to be
incorrect information within the meaning of the “Suspension of Payment” paragraph of the electronic
funds transfer (EFT) clause of this contract.

          (3) The Contractor shall not change the name or address for EFT payments or manual payments,
as appropriate, in the CCR record to reflect an assignee for the purpose of assignment of claims
(see Subpart 32.8, Assignment of Claims). Assignees shall be separately registered in the
CCR database. Information provided to the Contractor’s CCR record that indicates payments,
including those made by EFT, to an ultimate recipient other than that Contractor will be considered
to be incorrect information within the meaning of the “Suspension of payment” paragraph of the EFT
clause of this contract.

          (4) Offerors and Contractors may obtain information on registration and annual confirmation
requirements via the internet at http://www.ccr.gov or by calling 1-888-227-2423 or
269-961-5757.

12

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS — COMMERCIAL ITEMS

52.216-1 TYPE OF CONTRACT (APR 1984)

The Government contemplates award of a Indefinite Delivery Requirements Firm Fixed Price Contract
resulting from this solicitation.

52.216-21 REQUIREMENTS (OCT 1995)

     (a) This is a requirements contract for the supplies or services specified, and effective for
the period stated, in the Schedule. The quantities of supplies or services specified in the
Schedule are estimates only and are not purchased by this contract. Except as this contract may
otherwise provide, if the Government’s requirements do not result in orders in the quantities
described as “estimated” or “maximum” in the Schedule, that fact shall not constitute the basis for
an equitable price adjustment.

     (b) Delivery or performance shall be made only as authorized by orders issued in accordance
with the Ordering clause. Subject to any limitations in the Order Limitations clause or elsewhere
in this contract, the Contractor shall furnish to the Government all supplies or services specified
in the Schedule and called for by orders issued in accordance with the Ordering clause. The
Government may issue orders requiring delivery to multiple destinations or performance at multiple
locations.

     (c) Except as this contract otherwise provides, the Government shall order from the Contractor
all the supplies or services specified in the Schedule that are required to be purchased by the
Government activity or activities specified in the Schedule.

     (d) The Government is not required to purchase from the Contractor requirements in excess of
any limit on total orders under this contract.

     (e) If the Government urgently requires delivery of any quantity of an item before the
earliest date that delivery may be specified under this contract, and if the Contractor will not
accept an order providing for the accelerated delivery, the Government may acquire the urgently
required goods or services from another source.

     (f) Any order issued during the effective period of this contract and not completed within
that period shall be completed by the Contractor within the time specified in the order. The
contract shall govern the Contractor’s and Government’s rights and obligations with respect to that
order to the same extent as if the order were completed during the contract’s effective period;
provided, that the Contractor shall not be required to make any deliveries under this contract
after January 31, 2014.

52.216-18 ORDERING (OCT 1995)

     (a) Any supplies and services to be furnished under this contract shall be ordered by issuance
of delivery orders or task orders by the individuals or activities designated in the Schedule. Such
orders may be issued from effective date through January 31, 2014.

     (b) All delivery orders or task orders are subject to the terms and conditions of this
contract. In the event of conflict between a delivery order or task order and this contract, the
contract shall control.

     (c) If mailed, a delivery order or task order is considered “issued” when the Government
deposits the order in the mail. Orders may be issued orally, by facsimile, or by electronic
commerce methods only if authorized in the Schedule.

     [REDACTED]

     (a) The offeror or respondent, in the performance of any contract resulting from this
solicitation, [REDACTED]

     (b) If the offeror or respondent checks [REDACTED] paragraph (a) of this
provision, it shall insert in the following spaces the required information:

     [REDACTED]

13

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS — COMMERCIAL ITEMS 

52.217-9 OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 2000)

     a) The Government may extend the term of this contract by written notice to the Contractor
within 30 days before expiration of the contract provided that the Government gives the
Contractor a preliminary written notice of its intent to extend at least 60 days before the
contract expires. The preliminary notice does not commit the Government to an extension.

     (b) If the Government exercises this option, the extended contract shall be considered to
include this option clause.

     (c) The total duration of this contract, including the exercise of any options under this
clause, shall not exceed five years.

52.232-18 AVAILABILITY OF FUNDS

Funds are not presently available for this contract. The Government’s obligation under this
contract is contingent upon the availability of appropriated funds from which payment for
contract purposes can be made. No legal liability on the part of the Government for any payment
may arise until funds are made available to the Contracting Officer for this contract and until
the Contractor receives notice of such availability, to be confirmed in writing by the
Contracting Officer.

852.202-70 COMMERCIAL ADVERTISING (JAN 2008)

The bidder or offeror agrees that if a contract is awarded to him/her, as a result of this
solicitation, he/she will not advertise the award of the contract in his/her commercial
advertising in such a manner as to state or imply that the Department of Veterans Affairs endorses
a product, project or commercial line of endeavor.

52.222-1 NOTICE TO THE GOVERNMENT OF LABOR DISPUTES (FEB 1997)

If the Contractor has knowledge that any actual or potential labor dispute is delaying or
threatens to delay the timely performance of this contract, the Contractor shall immediately give
notice, including all relevant information, to the Contracting Officer.

52.247-34 F.O.B. DESTINATION (NOV 1991)

     a) The term “f.o.b. destination,” as used in this clause, means—

          (1) Free of expense to the Government, on board the carrier’s conveyance, at a specified
delivery point where the consignee’s facility (plant, warehouse, store, lot, or other location to
which shipment can be made) is located; and

          (2) Supplies shall be delivered to the destination consignee’s wharf (if destination is a
port city and supplies are for export), warehouse unloading platform, or receiving dock, at the
expense of the Contractor. The Government shall not be liable for any delivery, storage,
demurrage, accessorial, or other charges involved before the actual delivery (or “constructive
placement” as defined in carrier tariffs) of the supplies to the destination, unless such charges
are caused by an act or order of the Government acting in its contractual capacity, If rail
carrier is used, supplies shall be delivered to the specified unloading platform of the
consignee. If motor carrier (including
“piggyback”) is used, supplies shall be delivered to truck tailgate at the unloading platform of
the consignee, except when the supplies delivered meet the requirements of Item 568 of the
National Motor Freight Classification for “heavy or bulky
freight”. When supplies meeting the
requirements of the referenced Item 568 are delivered, unloading (including movement to the
tailgate) shall be performed by the consignee, with assistance from the truck driver, if
requested. If the contractor uses rail carrier or freight forwarded for less than carload
shipments, the contractor shall ensure that the carrier will furnish tailgate delivery, when
required, if transfer to truck is required to complete delivery to consignee.

     (b) The Contractor
shall—

          (l)(i) Pack and mark the shipment to comply with contract specifications; or

               (ii) In the absence of specifications, prepare the shipment in conformance with carrier
requirements;

          (2) Prepare and distribute commercial bills of lading;

          (3) Deliver the shipment in good order and condition to the point of delivery specified in
the contract;

          (4) Be responsible for any loss of and/or damage to the goods occurring before receipt of
the shipment by the consignee at the delivery point specified in the contract;

14

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS — COMMERCIAL ITEMS 

52.247-34 F.O.B. DESTINATION (NOV 1991) cont.

          (5) Furnish
a delivery schedule and designate the mode of delivering carrier; and

          (6) Pay and bear all charges to the specified point of delivery.

AS214
PRODUCT MODIFICATION, REMOVAL OR RECALL (JAN 2008)

If any product awarded under this solicitation requires modification, is removed or recalled by the
contractor or manufacturer due to defects in the product or potential dangers to patients, or if
any required modification, removal or recall is suggested or mandated by a regulatory or official
agency, the following steps will immediately be taken by the contractor or manufacturer:

a. Notify [REDACTED] Division of Strategic National Stockpile (049A2-1), V A
National Acquisition Center, P.O. Box 76, Building 37, Hines, IL 60141, in writing, by the
most expeditious manner possible. Provide two copies of the notification, which shall
include, but not be limited to the following:

(1) Complete item description and/or identification, order numbers from customers,
and the contract number assigned as a result of an award on this solicitation.

(2) Reasons for modifications, removal or recall.

(3) Necessary instructions for return for credit, replacement or corrective action.

b. A copy of the notification in a. above shall be provided to:

[REDACTED]

852.270-4 COMMERCIAL ADVERTISING (JAN 2008)

The bidder or offeror agrees that if a contract is awarded to him/her, as a result of this
solicitation, he/she will not advertise the award of the contract in his/her commercial advertising
in such a manner as to state or imply that the Department of Veterans Affairs endorses a product,
project or commercial line of endeavor.

52.203-3 GRATUITIES (APR 1984)

     (a) The right of the Contractor to proceed may be terminated by written notice if, after
notice and hearing, the agency head or a designee determines that the Contractor, its agent, or
another representative—

          (1) Offered or gave a gratuity (e.g., an entertainment or gift) to an officer, official, or
employee of the Government; and

          (2) Intended,
by the gratuity, to obtain a contract or favorable treatment under a contract.

     (b) The facts supporting this determination may be reviewed by any court having lawful
jurisdiction.

     (c) If this contract is terminated under paragraph (a) of this clause, the Government is
entitled—

          (1) To pursue the same remedies as in a breach of the contract; and

          (2) In addition to any other damages provided by law, to exemplary damages of not less than 3
nor more than 10 times the cost incurred by the Contractor in giving gratuities to the person
concerned, as determined by the agency head or a designee. (This paragraph (c)(2) is applicable
only if this contract uses money appropriated to the Department of Defense.)

     (d) The rights and remedies of the Government provided in this clause shall not be exclusive
and are in addition to any other rights and remedies provided by law or under this contract.

15

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS — COMMERCIAL ITEMS cont.

52.245-1 GOVERNMENT PROPERTY (JUNE 2007)

     (a) Definitions. As used in this clause—

     “Acquisition cost” means the cost to acquire a tangible capital asset including the purchase
price of the asset and costs necessary to prepare the asset for use.
Costs necessary to prepare the
asset for use include the cost of placing the asset in location and bringing the asset to a
condition necessary for normal or expected use.

     “Cannibalize” means to remove serviceable parts from one item of equipment in order to
install them on another item of equipment.

     “Contractor-acquired property” means property acquired, fabricated, or otherwise provided
by the Contractor for performing a contract, and to which the Government has title.

     “Contractor inventory” means—

          (1) Any property acquired by and in the possession of a Contractor or subcontractor under a
contract for which title is vested in the Government and which exceeds the amounts needed to
complete full performance under the entire contract;

          (2) Any property that the Government is obligated or has the option to take over under any
type of contract, e.g., as a result either of any changes in the specifications or plans thereunder
or of the termination of the contract (or subcontract thereunder), before completion of the work,
for the convenience or at the option of the Government; and

          (3) Government-furnished property that exceeds the amounts needed to complete full performance
under the entire contract.

          (4) “Contractor’s managerial personnel” means the Contractor’s directors, officers,
managers, superintendents, or equivalent representatives who have supervision or direction of—

          (1) All or substantially all of the Contractor’s business;

          (2) All or substantially all of the Contractor’s operation at any one plant or separate
location; or

          (3) A separate and complete major industrial operation.

     “Demilitarization” means rendering a product unusable for, and not restorable to, the
purpose for which it was designed or is customarily used.

     “Discrepancies incident to shipment” means any differences (e.g., count or condition)
between the items documented to have been shipped and items actually received.

     “Equipment” means a tangible asset that is functionally complete for its intended purpose,
durable, nonexpendable, and needed for the performance of a contract. Equipment is not intended
for sale, and does not ordinarily lose its identity or become a component part of another article
when put into use.

     “Government-furnished property” means property in the possession of, or directly acquired
by, the Government and subsequently furnished to the Contractor for performance of a contract.

     “Government property” means all property owned or leased by the Government. Government
property includes both Government-furnished and Contractor-acquired property.

     “Material” means property that may be consumed or expended during the performance of a
contract, component parts of a higher assembly, or items that lose their individual identity
through incorporation into an end-item. Material does not include equipment, special tooling and
special test equipment.

     “Nonseverable” means property that cannot be removed after construction or installation
without substantial loss of value or damage to the installed property or to the premises where
installed.

     “Plant equipment” as used in this part, means personal property of a capital nature (including
equipment, machine tools, test equipment, furniture, vehicles, and accessory and auxiliary items)
for use in manufacturing supplies, in performing services, or for any administrative or general
plant purpose. It does not include special tooling or special test equipment.

     “Precious
metals” means silver, gold, platinum, palladium, iridium, osmium, rhodium, and
ruthenium.

     “Property” means all tangible property, both real and personal.

     “Property Administrator” means an authorized representative of the Contracting Officer
appointed in accordance with agency procedures, responsible for administering the contract
requirements and obligations relating to Government property in the possession of a Contractor.

     “Provide” means to furnish, as in Government-furnished property, or to acquire, as in
contractor-acquired property.

     “Real property” means land and rights in land, ground improvements, utility distribution
systems, and buildings and other structures. It does not include foundations and other work
necessary for installing special tooling, special test equipment, or plant equipment.

16

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS — COMMERCIAL ITEMS cont.

52.245-1 GOVERNMENT PROPERTY (JUNE 2007) cont.

     “Sensitive property” means property potentially dangerous to the public safety or security if
stolen, lost, or misplaced, or that shall be subject to exceptional physical security, protection,
control, and accountability. Examples include weapons, ammunition, explosives, controlled
substances, radioactive materials, hazardous materials or wastes, or precious metals.

     “Surplus property” means excess personal property not required by any Federal agency as
determined by the Administrator of the General Services Administration (GSA).

     (b) Property management.

          (1) The Contractor shall have a system to manage (control, use, preserve, protect, repair and
maintain) Government property in its possession. The system shall be adequate to satisfy the
requirements of this clause. In doing so, the Contractor shall initiate and maintain the processes,
systems, procedures, records, and methodologies necessary for effective control of Government
property, consistent with voluntary consensus standards and/or industry-leading practices and
standards for Government property management except where inconsistent with law or regulation.
During the period of performance, the Contractor shall disclose any significant changes to their
property management system to the Property Administrator prior to implementation.

          (2) The Contractor’s responsibility extends from the initial acquisition and receipt of
property, through stewardship, custody, and use until formally relieved of responsibility by
authorized means, including delivery, consumption, expending, disposition, or via a completed
investigation, evaluation, and final determination for lost, damaged, destroyed, or stolen
property. This requirement applies to all Government property under the Contractor’s
accountability, stewardship, possession or control, including its vendors or subcontractors (see
paragraph (f)(l)(v) of this clause).

          (3) The Contractor shall include the requirements of this clause in all subcontracts under
which Government property is acquired or furnished for subcontract performance.

     (c) Use of Government property. The Contractor shall use Government property, either furnished
or acquired under this contract, only for performing this contract, unless otherwise provided for
in this contract or approved by the Contracting Officer. The Contractor shall not modify,
cannibalize, or make alterations to Government property unless this contract specifically
identifies the modifications, alterations or improvements as work to be performed.

     (d) Government-furnished property.

          (1) The Government shall deliver to the Contractor the Government-furnished property described
in this contract. The Government shall furnish related data and information needed for the intended
use of the property. The warranties of suitability of use and timely delivery of
Government-furnished property do not apply to property acquired or fabricated by the Contractor as
contractor-acquired property and subsequently transferred to another contract with this
Contractor.

          (2) The delivery and/or performance dates specified in this contract are based upon the
expectation that the Government-furnished property will be suitable for contract performance and
will be delivered to the Contractor by the dates stated in the contract.

               (i) If the property is not delivered to the Contractor by the dates stated in the contract,
the Contracting Officer shall, upon the Contractor’s timely written request, consider an equitable
adjustment to the contract.

               (ii) In the event property is received by the Contractor, or for Government-furnished property
after receipt and installation, in a condition not suitable for its intended use, the Contracting
Officer shall, upon the Contractor’s timely written request, advise the Contractor on a course of
action to remedy the problem. Such action may include repairing, replacing, modifying, returning,
or otherwise disposing of the property at the Government’s expense. Upon completion of the required
action(s), the Contracting Officer shall consider an equitable adjustment to the contract (see also
paragraph (f)(1)(ii)(A) of this clause).

               (iii) The Government may, at its option, furnish property in an “as-is” condition. The
Contractor will be given the opportunity to inspect such property prior to the property being
provided. In such cases, the Government makes no warranty with respect to the serviceability and/or
suitability of the property for contract performance. Any repairs, replacement, and/or
refurbishment shall be at the Contractor’s expense.

          (3)

               (i) The Contracting Officer may by written notice, at any time—

                    (A) Increase or decrease the amount of Government-furnished property under this contract;

                    (B) Substitute other Government-furnished property for the property previously furnished,
to be furnished, or to be acquired by the Contractor for the Government under this contract; or

                    (C) Withdraw authority to use property.

17

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS — COMMERCIAL ITEMS cont.

52.245-1 GOVERNMENT PROPERTY (JUNE 2007) cont.

               (ii) Upon completion of any action(s) under paragraph (d)(3)(i) of this clause, and the
Contractor’s timely written request, the Contracting Officer shall consider an equitable
adjustment to the contract.

     (e) Title to Government property.

          (1) The Government shall retain title to all Government-furnished property. Title to
Government property shall not be affected by its incorporation into or attachment to any property
not owned by the Government, nor shall Government property become a fixture or lose its identity as
personal property by being attached to any real property.

          (2) Fixed-price contracts.

               (i) All Government-furnished property and all property acquired by the Contractor, title
to which vests in the Government under this paragraph (collectively referred to as “Government
property”), are subject to the provisions of this clause.

               (ii) Title to each item of equipment, special test equipment and special tooling acquired by
the Contractor for the Government under this contract shall pass to and vest in the Government when
its use in performing this contract commences or when the Government has paid for it, whichever is
earlier, whether or not title previously vested in the Government.

               (iii) If this contract contains a provision directing the Contractor to purchase material
for which the Government will reimburse the Contractor as a direct item of cost under this
contract—

                    (A) Title to material purchased from a vendor shall pass to and vest in the Government upon
the vendor’s delivery of such material; and

                    (B) Title to all other material shall pass to and vest in the Government upon—

                         (1) Issuance of the material for use in contract performance;

                         (2) Commencement of processing of the material or its use in contract performance; or

                         
(3) Reimbursement of the cost of the material by the Government, whichever occurs first.

          
(3) Title under Cost-Reimbursement or Time-and-Material Contracts or Cost-Reimbursable
contract line items under Fixed-Price contracts.

               (i) Title to all property purchased by the Contractor for which the Contractor is entitled
to be reimbursed as a direct item of cost under this contract shall pass to and vest in the
Government upon the vendor’s delivery of such property.

               (ii) Title to all other property, the cost of which is reimbursable to the Contractor,
shall pass to and vest in the Government upon—

                    (A) Issuance of the property for use in contract performance;

                    (B) Commencement of processing of the property for use in contract performance; or

                    (C) Reimbursement of the cost of the property by the Government, whichever occurs first.

               (iii) All Government-furnished property and all property acquired by the Contractor, title
to which vests in the Government under this paragraph (e)(3)(iii) (collectively referred to as
“Government property”), are subject to the provisions of this clause.

     (f) Contractor plans and systems.

          (1) Contractors shall establish and implement property management plans, systems, and
procedures at the contract, program, site or entity level to enable the following outcomes:

               (i) Acquisition of Property. The Contractor shall document that all property was acquired
consistent with its engineering, production planning, and material control operations.

               (ii) Receipt of Government Property. The Contractor shall receive Government property
(document the receipt), record the information necessary to meet the record requirements of
paragraph (f)(l)(iii)(A)(l) through (5) of this clause, identify as Government owned in a manner
appropriate to the type of property (e.g., stamp, tag, mark, or other identification), and manage
any discrepancies incident to shipment.

                    (A) Government-furnished property. The Contractor shall furnish a written statement to the
Property Administrator containing all relevant facts, such as cause or condition and a recommended
course(s) of action, if overages, shortages, or damages and/or other discrepancies are discovered
upon receipt of Government-furnished property.

                    (B) Contractor-acquired property. The Contractor shall take all actions necessary to adjust
for overages, shortages, damage and/or other discrepancies discovered upon receipt, in shipment of
Contractor-acquired property from a vendor or supplier, so as to ensure the proper allocability and
allowability of associated costs.

18

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS — COMMERCIAL ITEMS cont.

52.245-1 GOVERNMENT PROPERTY (JUNE 2007) cont.

               (iii) Records of Government property. The Contractor shall create and maintain records
of all Government property accountable to the contract, including Government-furnished and
Contractor-acquired property.

                    (A) Property records shall enable a complete, current, auditable record of all
transactions and shall, unless otherwise approved by the Property Administrator, contain the
following:

                         (1) The name, part number and description, manufacturer, model number, and National Stock
Number (if needed for additional item identification tracking and/or disposition).

                         (2) Quantity received (or fabricated), issued, and balance-on-hand.

                         (3) Unit acquisition cost.

                         (4) Unique-item identifier or equivalent (if available and necessary for individual item
tracking).

                         (5) Unit of measure.

                         (6) Accountable contract number or equivalent code designation.

                         (7) Location.

                         (8) Disposition.

                         (9) Posting reference and date of transaction.

                         (10) Date placed in service.

                    (B) Use of a Receipt and Issue System for Government Material. When approved by the Property
Administrator, the Contractor may maintain, in lieu of formal property records, a file of
appropriately cross-referenced documents evidencing receipt, issue, and use of material that is
issued for immediate consumption.

               (iv) Physical inventory. The Contractor shall periodically perform, record, and disclose
physical inventory results. A final physical inventory shall be performed upon contract completion
or termination. The Property Administrator may waive this final inventory requirement, depending on
the circumstances (e.g., overall reliability of the Contractor’s system or the property is to be
transferred to a follow-on contract).

               (v) Subcontractor control.

                    (A) The Contractor shall award subcontracts that clearly identify assets to be provided and
shall ensure appropriate flow down of contract terms and conditions (e.g., extent of liability for
loss, damage, destruction or theft of Government property).

                    (B) The Contractor shall assure its subcontracts are properly administered and reviews are
periodically performed to determine the adequacy of the subcontractor’s property management
system.

               (vi) Reports. The Contractor shall have a process to create and provide reports of
discrepancies; loss, damage, destruction, or theft; physical inventory results; audits and
self-assessments; corrective actions; and other property related reports as directed by the
Contracting Officer.

                    (A) Loss, damage, destruction, or theft. Unless otherwise directed by the Property
Administrator, the Contractor shall investigate and promptly furnish a written narrative of all
incidents of loss, damage, destruction, or theft to the property administrator as soon as the facts
become known or when requested by the Government.

                    (B) Such reports shall, at a minimum, contain the following information:

                         (1) Date of incident (if known).

                         (2) The name, commercial description, manufacturer, model number, and National Stock
Number (if applicable).

                         (3) Quantity.

                         (4) Unique Item Identifier (if available).

                         (5) Accountable Contract number.

                         (6) A statement indicating current or future need.

                         (7) Acquisition cost, or if applicable, estimated scrap proceeds, estimated repair or
replacement costs.

                         (8) All known interests in commingled property of which the Government property is a
part.

                         (9) Cause and corrective action taken or to be taken to prevent recurrence.

                         (10) A statement that the Government will receive any reimbursement covering the loss, damage,
destruction, or theft, in the event the Contractor was or will be reimbursed or compensated.

                         (11) Copies of all supporting documentation.

                         (12) Last known location.

19

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS — COMMERCIAL ITEMS cont.

52.245-1 GOVERNMENT PROPERTY (JUNE 2007) cont.

                         (13) A statement that the property did or did not contain sensitive or hazardous material,
and if so, that the appropriate agencies were notified.

               (vii) Relief of stewardship responsibility. Unless the contract provides otherwise, the
Contractor shall be relieved of stewardship responsibility for Government property when such
property is—

                    (A) Consumed or expended, reasonably and properly, or otherwise accounted for, in the
performance of the contract, including reasonable inventory adjustments of material as determined
by the Property Administrator; or a Property Administrator granted relief of responsibility for
loss, damage, destruction or theft of Government property;

                    (B) Delivered or shipped from the Contractor’s plant, under Government instructions,
except when shipment is to a subcontractor or other location of the Contractor; or

                    (C) Disposed of in accordance with paragraphs (j)
and (k) of this clause.

               (viii) Utilizing Government property.

                    (A) The Contractor shall utilize, consume, move, and store Government Property only as
authorized under this contract. The Contractor shall promptly disclose and report Government
property in its possession that is excess to contract performance.

                    (B) Unless otherwise authorized in this contract or by the Property Administrator the
Contractor shall not commingle Government property with property not owned by the Government

               (ix) Maintenance. The Contractor shall properly maintain Government property. The
Contractor’s maintenance program shall enable the identification, disclosure, and performance of
normal and routine preventative maintenance and repair. The Contractor shall disclose and report
to the Property Administrator the need for replacement and/or capital rehabilitation.

               
(x) Property closeout. The Contractor shall promptly perform and report to the Property
Administrator contract property closeout, to include reporting, investigating and securing
closure of all loss, damage, destruction, or theft cases; physically inventorying all property
upon termination or completion of this contract; and disposing of items at the time they are
determined to be excess to contractual needs.

          (2) The Contractor shall establish and maintain Government accounting source data, as
may be required by this contract, particularly in the areas of recognition of acquisitions
and dispositions of material and equipment.

          (3) The Contractor shall establish and maintain procedures necessary to assess its property
management system effectiveness, and shall perform periodic internal reviews and audits.
Significant findings and/or results of such reviews and audits pertaining to Government property
shall be made available to the Property Administrator.

     (g) Systems analysis.

          (1) The Government shall have access to the contractor’s premises and all Government
property, at reasonable times, for the purposes of reviewing, inspecting and evaluating the
Contractor’s property management plan, systems, procedures, records, and supporting documentation
that pertains to Government property.

          (2) Records of Government property shall be readily available to authorized Government
personnel and shall be safeguarded from tampering or destruction.

          (3) Should it be determined by the Government that the Contractor’s property management
practices are inadequate or not acceptable for the effective management and/or control of
Government property under this contract, and/or present an undue risk to the Government, the
Contractor shall immediately take all necessary corrective actions as directed by the Property
Administrator.

          (4) The Contractor shall ensure Government access to subcontractor premises, and all
Government property located at subcontractor premises, for the purposes of reviewing,
inspecting and evaluating the subcontractor’s property management plan, systems, procedures,
records, and supporting documentation that pertains to Government property.

     (h) Contractor Liability for Government Property.

          (1) Unless otherwise provided for in the contract, the Contractor shall not be liable for loss,
damage, destruction, or theft to the
Government property furnished or acquired under this contract, except when any one of the
following applies—

               (i) The risk is covered by insurance or the Contractor is otherwise reimbursed (to
the extent of such insurance or reimbursement). The allowability of insurance costs shall
be determined in accordance with 31.205-19.

20

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS — COMMERCIAL ITEMS cont.

52.245-1 GOVERNMENT PROPERTY (JUNE 2007) cont.

               (ii) The loss, damage, destruction, or theft is the result of willful misconduct or lack
of good faith on the part of the Contractor’s managerial personnel. Contractor’s managerial
personnel, in this clause, means the Contractor’s directors, officers, managers,
superintendents, or equivalent representatives who have supervision or direction of all or
substantially all of the Contractor’s business; all or substantially all of the Contractor’s
operation at any one plant or separate location; or a separate and complete major industrial
operation.

               (iii) The Contracting Officer has, in writing, revoked the Government’s assumption of risk for
loss, damage, destruction, or theft, due to a determination under paragraph (g) of this clause that
the Contractor’s property management practices are inadequate, and/or present an undue risk to the
Government, and the Contractor failed to take timely corrective action. If the Contractor can
establish by clear and convincing evidence that the loss, damage, destruction, or theft of
Government property occurred while the Contractor had adequate property management practices or the
loss, damage, destruction, or theft of Government property did not result from the Contractor’s
failure to maintain adequate property management practices, the Contractor shall not be held
liable.

          (2) The Contractor shall take all reasonable actions necessary to protect the Government
property from further loss, damage, destruction, or theft. The Contractor shall separate the
damaged and undamaged Government property, place all the affected Government property in the best
possible order, and take such other action as the Property Administrator directs.

          (3) The Contractor shall do nothing to prejudice the Government’s rights to recover against
third parties for any loss, damage, destruction, or theft of Government property.

          (4) Upon the request of the Contracting Officer, the Contractor shall, at the Government’s
expense, furnish to the Government all reasonable assistance and cooperation, including the
prosecution of suit and the execution of instruments of assignment in favor of the Government in
obtaining recovery.

     (i) Equitable adjustment. Equitable adjustments under this clause shall be made in
accordance with the procedures of the Changes clause. The right to an equitable adjustment shall
be the Contractor’s exclusive remedy and the Government shall not be liable to suit for breach of
contract for the following:

          (1) Any delay in delivery of Government-furnished property.

          (2) Delivery of Government-furnished property in a condition not suitable for its intended use.

          (3) An increase, decrease, or substitution of Government-furnished property.

          (4) Failure to repair or replace Government property for which the Government is responsible.

     (j) Contractor inventory disposal. Except as otherwise provided for in this contract, the
Contractor shall not dispose of Contractor inventory until authorized to do so by the Plant
Clearance Officer.

          (1) Scrap to which the Government has obtained title under
paragraph (e) of this clause.

               (i) Contractor with an
approved scrap procedure.

                    (A) The Contractor may dispose of scrap resulting from production or testing under this
contract without Government approval. However, if the scrap requires demilitarization or is
sensitive property, the Contractor shall submit the scrap on an inventory disposal schedule.

                    (B) For scrap from other than production or testing the Contractor may prepare scrap lists in
lieu of inventory disposal schedules (provided such lists are consistent with the approved scrap
procedures), except that inventory disposal schedules shall be submitted for scrap aircraft or
aircraft parts and scrap that—

                         (1) Requires demilitarization;

                         (2) Is a classified item;

                         (3) Is generated from classified items;

                         (4) Contains hazardous materials or hazardous wastes;

                         (5) Contains precious metals; or

                         (6) Is dangerous to the public health, safety, or welfare.

               (ii) Contractor without an approved scrap procedure. The Contractor shall submit an inventory
disposal schedule for all scrap.

21

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS—COMMERCIAL ITEMS cont.

52.245-1
GOVERNMENT PROPERTY (JUNE 2007) cont.

               The Contractor may not dispose of scrap resulting from production or testing under this
contract without Government approval.

          (2) Predisposal requirements.

               (i) Once the Contractor determines that Contractor-acquired property is no longer needed
for contract performance, the Contractor in the following order of priority—

                    (A) May contact the Contracting Officer if use of the property in the performance of other
Government contracts is practical;

                    (B) May purchase the property at the acquisition cost; or

                    (C) Shall make reasonable efforts to return unused property to the appropriate supplier at
fair market value (less, if applicable, a reasonable restocking fee that is consistent with the
supplier’s customary practices).

               (ii) The
Contractor shall list, on Standard Form 1428, Inventory Disposal Schedule,
property that was not used in the performance of other Government contracts under paragraph
(j)(2)(i)(A) of this clause, property that was not purchased under paragraph (j)(2)(i)(B) of this
clause, and property that could not be returned to a supplier under paragraph (j)(2)(i)(C) of
ths clause.

          (3) Inventory disposal schedules.

               (i) The Contractor shall use Standard Form 1428, Inventory Disposal Schedule, to
identify—

                    (A) Government-furnished property that is no longer required for performance of this contract,
provided the terms of another Government contract do not require the Government to furnish that
property for performance of this contract;

                    (B) Contractor-acquired property, to which the Government has obtained title under paragraph
(e) of this clause, which is no longer required for performance of that contract; and

                    (C) Termination inventory.

               (ii) The Contractor may annotate inventory disposal schedules to identify property the
Contractor wishes to purchase from the Government.

               (iii) Unless the Plant Clearance Officer has agreed otherwise, or the contract requires
electronic submission of inventory disposal schedules, the Contractor shall prepare separate
inventory disposal schedules for—

                    (A) Special test equipment with commercial components;

                    (B) Special test equipment without commercial components;

                    (C) Printing equipment;

                    (D) Information technology (e.g., computers, computer components, peripheral equipment,
and related equipment);

                    (E) Precious metals;

                    (F) Nonnuclear hazardous materials or hazardous wastes; or

                    (G) Nuclear materials or nuclear wastes.

               (iv) The Contractor shall describe the property in sufficient detail to permit an
understanding of its intended use. Property with the same description, condition code, and
reporting location may be grouped in a single line item.

          (4) Submission requirements. The Contractor shall submit inventory disposal schedules to the
Plant Clearance Officer no later than—

               (i) 30-days following the Contractor’s determination that a Government property item is no
longer required for performance of this contract;

               (ii) 60 days, or such longer period as may be approved by the Plant Clearance Officer,
following completion of contract deliveries or performance; or

               (iii) 120 days, or such longer period as may be approved by the Termination Contracting
Officer following contract termination in whole or in part.

          (5) Corrections. The Plant Clearance Officer may—

               (i) Reject a schedule for cause (e.g., contains errors, determined
to be inaccurate); and

               (ii) Require the Contractor to correct an
inventory disposal schedule.

          (6) Postsubmission adjustments. The Contractor shall notify the Plant Clearance Officer at
least 10 working days in advance of its intent to remove an item from an approved inventory
disposal schedule. Upon approval of the Plant

22

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-4 CONTRACT TERMS AND CONDITIONS — COMMERCIAL ITEMS cont.

52.245-1 GOVERNMENT PROPERTY (JUNE 2007) cont.

Clearance Officer, or upon expiration of the notice period, the Contractor may make the
necessary adjustments to the inventory schedule.

          (7) Storage.

               (i) The Contractor shall store the property identified on an inventory disposal schedule
pending receipt of disposal instructions. The Government’s failure to furnish disposal instructions
within 120 days following acceptance of an inventory disposal schedule may entitle the Contractor
to an equitable adjustment for costs incurred to store such property on or after the
121st day.

               (ii) The Contractor shall obtain the Plant Clearance Officer’s approval to remove Government
property from the premises where the property is currently located prior to receipt of final
disposition instructions. If approval is granted, any costs incurred by the Contractor to transport
or store the property shall not increase the price or fee of any Government contract. The storage
facility shall be appropriate for assuring the property’s physical safety and suitability for use.
Approval does not relieve the Contractor of any liability for such property under this contract.

          (8) Disposition instructions.

               (i) If the Government does not furnish disposition instructions to the Contractor within 45
days following acceptance of a scrap list, the Contractor may dispose of the listed scrap in
accordance with the Contractor’s approved scrap procedures.

               (ii) The Contractor shall prepare for shipment, deliver f.o.b. origin, or dispose of
Contractor inventory as directed by the Plant Clearance Officer. If not returned to the Government,
the Contractor shall remove and destroy any markings identifying the property as U.S.
Government-owned property prior to its disposal.

               (iii) The Contracting Officer may require the Contractor to demilitarize the property prior to
shipment or disposal. In such cases, the Contractor may be entitled to an equitable adjustment
under paragraph (i) of this clause.

          (9) Disposal proceeds. As directed by the Contracting Officer, the Contractor shall credit the
net proceeds from the disposal of Contractor inventory to the contract, or to the Treasury of the
United States as miscellaneous receipts.

          (10) Subcontractor inventory disposal schedules. The Contractor shall require its
Subcontractors to submit inventory disposal schedules to the Contractor in accordance with the
requirements of paragraph (j)(4) of this clause.

     (k) Abandonment of Government property.

          (1) The Government shall not abandon sensitive Government property or termination inventory
without the Contractor’s written consent.

          (2) The Government, upon notice to the Contractor, may abandon any nonsensitive Government
property in place, at which time all obligations of the Government regarding such property shall
cease.

          (3) The Government has no obligation to restore or rehabilitate the Contractor’s premises
under any circumstances; however, if Government-furnished property is withdrawn or is unsuitable
for the intended use, or if other Government property is substituted, then the equitable adjustment
under paragraph (i) of this clause may properly include restoration or rehabilitation costs.

     (l) Communication. All communications under this clause shall be in writing.

     (m) Contracts outside the United States. If this contract is to be performed outside of the
United States and its outlying areas, the words “Government” and “Government-furnished” (wherever
they appear in this clause) shall be construed as “United States Government” and “United States
Government-furnished,” respectively.

23

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

52.212-5 CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR EXECUTIVE
ORDERS—COMMERCIAL ITEMS (JAN 2009)

     (a) The Contractor shall comply with the following Federal Acquisition Regulation (FAR)
clauses, which are incorporated in this
contract by reference, to implement provisions of law or Executive orders applicable to
acquisitions of commercial items:

          (1) 52.233-3, Protest After Award (Aug 1996) (31 U.S.C. 3553).

          (2) 52.233-4,
Applicable Law for Breach of Contract Claim
(Oct 2004) (Pub. L.
108-77, 108-78)

     (b) The Contractor shall comply with the FAR clauses in this paragraph (b) that the
Contracting Officer has indicated as being
incorporated in this contract by reference to implement provisions of law or Executive orders
applicable to acquisitions of commercial
items:

          þ (1) 52.203-6, Restrictions on Subcontractor Sales to the
Government (Sept 2006), with Alternate I (Oct 1995) (41 U.S.C. 253g and 10
U.S.C. 2402).

          o (2) 52.203-13, Contractor Code of Business Ethics and Conduct (Dec 2008)
(Pub. L. 110-252, Title VI, Chapter 1
(41 U.S.C. 251 note)).

          o (3) 52.219-3, Notice of Total HUBZone Set-Aside (Jan 1999) (15 U.S.C.
657a).

          þ (4) 52.219-4, Notice of Price Evaluation Preference for HUBZone Small
Business Concerns (July
2005) (if the offeror elects to waive the preference, it shall so indicate
in its offer) (15 U.S.C. 657a).

          o (5) [Reserved]

          o
(6)(i) 52.219-6, Notice of Total Small Business Set-Aside (June 2003) (15 U.S.C. 644).

               o (ii) Alternate I (Oct 1995) of 52.219-6.

               o (iii) Alternate II (Mar 2004) of 52.219-6.

          o (7)(i) 52.219-7, Notice of Partial Small Business
Set-Aside (June 2003) (15 U.S.C. 644).

               o
(ii) Alternate I (Oct 1995) of 52.219-7.

               o
(iii) Alternate II (Mar 2004) of 52.219-7.

          þ (8) 52.219-8, Utilization of Small Business Concerns (May 2004) (15
U.S.C. 637(d)(2) and (3)).

          þ (9)(i) 52.219-9, Small Business Subcontracting
Plan (Apr 2008) (15 U.S.C. 637(d)(4).

               o
(ii) Alternate I (Oct 2001) of 52.219-9.

               þ
(iii) Alternate II (Oct 2001) of 52219-9.

          o (10) 52.219-14, Limitations on Subcontracting (Dec 1996) (15 U.S.C.
637(a)(14)).

          þ (11) 52.219-16, Liquidated Damages—Subcon-tracting Plan (Jan 1999) (15
U.S.C. 637(d)(4)(F)(i)).

          o (12)(i) 52.219-23, Notice of Price Evaluation Adjustment for Small
Disadvantaged Business Concerns (Oct 2008) (10 U.S.C. 2323) (if the offeror elects to
waive the adjustment, it shall so indicate in its offer).

               o
(ii) Alternate I (June 2003) of 52.219-23.

          o (13) 52.219-25, Small Disadvantaged Business Participation
Program—Disadvantaged Status and Reporting (Apr 2008)
(Pub. L. 103-355, section 7102, and 10 U.S.C. 2323).

24

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

52.212-5 CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR EXECUTIVE
ORDERS — COMMERCIAL ITEMS (JAN 2009) cont.

          o (14) 52.219-26, Small Disadvantaged Business Participation Program—
Incentive Subcontracting (Oct 2000) (Pub. L. 103-355, section 7102, and 10 U.S.C. 2323).

          o (15) 52.219-27, Notice of Total Service-Disabled Veteran-Owned Small
Business Set-Aside (May 2004) (15 U.S.C. 657 f).

          þ (16) 52.219-28, Post Award Small Business Program Representation (June
2007) (15 U.S.C. 632(a)(2)).

          þ (17) 52.222-3, Convict Labor (June 2003) (E.O. 11755).

          þ (18) 52.222-19, Child Labor—Cooperation with Authorities and Remedies (Feb
2008) (E.O. 13126).

          þ (19) 52.222-21, Prohibition of Segregated Facilities (Feb 1999).

          þ (20) 52.222-26, Equal Opportunity (Mar 2007) (E.O. 11246).

          þ (21) 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans
of the Vietnam Era, and Other Eligible Veterans (Sept 2006) (38 U.S.C. 4212),

          þ (22) 52.222-36, Affirmative Action for Workers with Disabilities (Jun 1998)
(29 U.S.C. 793).

          þ (23) 52.222-37, Employment Reports on Special Disabled Veterans,
Veterans of the Vietnam Era, and Other Eligible Veterans (Sept 2006) (38 U.S.C. 4212).

          þ (24) 52.222-39, Notification of Employee Rights Concerning Payment of Union
Dues or Fees (Dec 2004) (E.O. 13201).

          þ (25)(i) 52.222-50, Combating Trafficking in
Persons (Aug 2007) (Applies to all contracts).

               o (ii) Alternate I (Aug 2007) of 52.222-50.

          o (26) 52.222-54, Employment Eligibility Verification (Jan 2009). (Executive
Order 12989). (Not applicable to the acquisition
of commercially available off-the-shelf items or certain types of commercial items as prescribed in
22.1803.)

          o (27) (i) 52.223-9, Estimate of Percentage of Recovered Material
Content for EPA-Designated Items (May 2008)
(42 U.S.C. 6962(c)(3)(A)(ii)).

               
o (ii) Alternate I (May 2008) of 52.223-9 (42 U.S.C. 6962(i)(2)(C)).

          
o (28) 52.223-15, Energy Efficiency in Energy-Consuming Products (Dec
2007) (42 U.S.C. 8259b).

          o (29)(i) 52.223-16, IEEE 1680 Standard for the Environmental Assessment of
Personal Computer Products (Dec 2007) (E.O. 13423).

               
o (ii) Alternate I (Dec 2007) of 52.223-16.

          
o (30) 52.225-1, Buy American Act—Supplies (June 2003) (41 U.S.C.
l0a-l0d).

          o
(31)(i) 52.225-3, Buy American Act—Free Trade Agreements—Israeli
Trade Act (Aug 2007) (41 U.S.C. l0a-l0d, 19 U.S.C.
3301 note, 19 U.S.C. 2112 note, Pub. L 108-77, 108-78, 108-286, 109-53 and 109-169).

               o (ii) Alternate I (Jan 2004) of 52.225-3.

               o (iii) Alternate II (Jan 2004) of 52.225-3.

25

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

52.212-5 CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR EXECUTIVE
ORDERS — COMMERCIAL ITEMS (JAN 2009) cont.

          þ (32)
52.225-5, Trade Agreements (Nov 2007) (19 U.S.C. 2501, et
seq., 19 U.S.C. 3301 note).

          þ (33) 52.225-13, Restrictions on Certain Foreign Purchases (June 2008)
(E.O.’s, proclamations, and statutes administered by the Office of Foreign Assets Control of the
Department of the Treasury).

          o
(34) 52.226-4, Notice of Disaster or Emergency Area Set-Aside (Nov
2007) (42 U.S.C. 5150).

          o (35) 52.226-5, Restrictions on Subcontracting Outside Disaster or
Emergency Area (Nov 2007) (42 U.S.C. 5150).

          o
(36) 52.232-29, Terms for Financing of Purchases of Commercial Items (Feb 2002) (41
U.S.C. 255(f), 10 U.S.C. 2307(f)).

          o
(37) 52.232-30, Installment Payments for Commercial Items (Oct 1995) (41
U.S.C. 255(f), 10 U.S.C. 2307(f)).

          þ
(38) 52.232-33, Payment by Electronic Funds Transfer—Central Contractor
Registration (Oct 2003) (31 U.S.C. 3332)

          o
(39) 52.232-34, Payment by Electronic Funds Transfer—Other than
Central Contractor Registration (May 1999)
(31 U.S.C. 3332).

          o
(40) 52.232-36, Payment by Third Party
(May 1999) (31 U.S.C. 3332).

          o
(41) 52.239-1. Privacy or Security Safeguards (Aug 1996) (5 U.S.C. 552a).

          o
(42)(i) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial
Vessels (Feb 2006) (46 U.S.C. Appx. 1241(b) and 10 U.S.C. 2631).

               o (ii) Alternate I (Apr 2003) of 52.247-64.

     (c) The Contractor shall comply with the FAR clauses in this paragraph (c), applicable to
commercial services, that the Contracting Officer has indicated as being incorporated in this
contract by reference to implement provisions of law or Executive orders applicable to acquisitions
of commercial items:

          þ
(1) 52.222-41, Service Contract Act of 1965 (Nov 2007) (41 U.S.C.
351, et seq.).

          þ
(2) 52.222-42, Statement of Equivalent Rates for Federal Hires (May 1989)
(29 U.S.C. 206 and 41 U.S.C. 351, et seq.).

          þ
(3) 52.222-43, Fair Labor Standards Act and Service Contract Act—Price
Adjustment (Multiple Year and Option Contracts) (Nov 2006) (29 U.S.C. 206 and 41 U.S.C.
351, et seq.).

          o
(4) 52.222-44, Fair Labor Standards Act and Service Contract
Act—Price Adjustment (Feb 2002) (29 U.S.C. 206 and
41 U.S.C. 35, et seq.).

          o
(5) 52.222-51, Exemption from Application of the Service Contract
Act to Contracts for Maintenance, Calibration, or Repair
of Certain Equipment—Requirements (Nov 2007) (41 U.S.C. 351, et seq.).

          o
(6) 52.222-53, Exemption from Application of the Service Contract
Act to Contracts for Certain Services—Requirements
(Nov 2007) (41 U.S.C. 351, et seq.).

          o
(7) 52.237-11, Accepting and Dispensing of $1 Coin (Sept 2008) (31
U.S.C. 5112(p)(1)).

26

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

52.212-5 CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR EXECUTIVE
ORDERS—COMMERCIAL ITEMS (JAN 2009) cont.

     (d) Comptroller General Examination of Record. The Contractor shall comply with the provisions
of this paragraph (d) if this contract was awarded using other than sealed bid, is in excess of the
simplified acquisition threshold, and does not contain the clause at 52.215-2, Audit and
Records—Negotiation.

          (1) The Comptroller General of the United States, or an authorized representative of the
Comptroller General, shall have access
to and right to examine any of the Contractor’s directly pertinent records involving
transactions related to this contract.

          (2) The Contractor shall make available at its offices at all reasonable times the records,
materials, and other evidence for
examination, audit, or reproduction, until 3 years after final payment under this contract or
for any shorter period specified in
FAR Subpart 4.7, Contractor Records Retention, of the other clauses of this contract.
If this contract is completely or partially
terminated, the records relating to the work terminated shall be made available for 3 years
after any resulting final termination
settlement. Records relating to appeals under the disputes clause or to litigation or the
settlement of claims arising under or relating to
this contract shall be made available until such appeals, litigation, or claims are finally
resolved.

          (3) As used in this clause, records include books, documents, accounting procedures and
practices, and other data, regardless of
type and regardless of form. This does not require the Contractor to create or maintain any
record that the Contractor does not
maintain in the ordinary course of business or pursuant to a provision of law.

     (e)(l) Notwithstanding the requirements of the clauses in paragraphs (a), (b), (c), and
(d) of this clause, the Contractor is not required to flow down any FAR clause, other than
those in paragraphs (i) through (vii) of this paragraph in a subcontract for commercial items.
Unless otherwise indicated below, the extent of the flow down shall be as required by the
clause—

               (i) 52.203-13, Contractor Code of Business Ethics and Conduct (Dec 2008) (Pub. L. 110-252,
Title VI, Chapter 1 (41 U.S.C. 251 note)).

               (ii) 52.219-8, Utilization of Small Business Concerns (May 2004) (15 U.S.C.
637(d)(2) and (3)), in all subcontracts that offer further subcontracting opportunities. If the
subcontract (except subcontracts to small business concerns) exceeds $550,000 ($1,000,000 for
construction of any public facility), the subcontractor must include 52.219-8 in lower tier
subcontracts that offer subcontracting opportunities.

               (iii) 52.222-26,
Equal Opportunity (Mar 2007) (E.O.11246).

               (iv) 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the
Vietnam Era, and Other Eligible Veterans (Sept 2006) (38 U.S.C. 4212).

               (v) 52.222-36, Affirmative Action for Workers with Disabilities (June 1998) (29
U.S.C. 793).

               (vi) 52.222-39, Notification of Employee Rights Concerning Payment of Union Dues or
Fees (Dec 2004) (E.O.13201).

               (vii) 52.222-41, Service Contract Act of 1965 (Nov 2007) (41 U.S.C. 351, et
seq.).

               (viii) 52.222-50, Combating Trafficking in Persons (Aug 2007) (22 U.S.C.
7104(g)). Flow down required in accordance with paragraph (f) of FAR clause 52.222-50.

               (ix) 52.222-51, Exemption from Application of the Service Contract Act to Contracts
for Maintenance, Calibration, or Repair of Certain Equipment-Requirements (Nov 2007) (41 U.S.C.
351, et seq.).

               (x) 52.222-53, Exemption from Application of the Service Contract Act to Contracts
for Certain Services-Requirements (Nov 2007) (41 U.S.C. 351, et seq.).

               (xi) 52.222-54, Employment Eligibility Verification (Jan 2009).

               (xii) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (Feb
2006) (46 U.S.C. Appx. 1241(b) and 10 U.S.C. 2631). Flow down required in
accordance with paragraph (d) of FAR clause 52.247-64.

          (2) While not required, the contractor may include in its subcontracts for commercial
items a minimal number of additional clauses necessary to satisfy its contractual obligations.

27

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART
III — 52.212-1 INSTRUCTIONS TO OFFERORS — COMMERCIAL ITEMS (JUNE 2008)

     (a) North American Industry Classification System (NAICS) code and small business size
standard. The NAICS code and small
business size standard for this acquisition appear in Block 10 of the solicitation cover sheet
(SF 1449). However, the small business
size standard for a concern which submits an offer in its own name, but which proposes to
furnish an item which it did not itself
manufacture, is 500 employees.

     (b) Submission of offers. Submit signed and dated offers to the office specified in this
solicitation at or before the exact time
specified in this solicitation. Offers may be submitted on the SF 1449, letterhead
stationery, or as otherwise specified in the
solicitation. As a minimum, offers must show—

          (1) The solicitation number;

          (2) The time specified in the solicitation for receipt of offers;

          (3) The name, address, and telephone number of the offeror;

          (4) A technical description of the items being offered in sufficient detail to evaluate
compliance with the requirements in the
solicitation. This may include product literature, or other documents, if necessary;

          (5) Terms of any express warranty;

          (6) Price and any discount terms;

          (7) “Remit to” address, if different than mailing address;

          (8) A completed copy of the representations and certifications at FAR 52.212-3 (see
FAR 52.212-3(b) for those representations
and certifications that the offeror shall complete electronically);

          (9) Acknowledgment of Solicitation Amendments;

          (10) Past performance information, when included as an evaluation factor, to include recent
and relevant contracts for the same
or similar items and other references (including contract numbers, points of contact with
telephone numbers and other relevant
information); and

          (11) If the offer is not submitted on the SF 1449, include a statement specifying the
extent of agreement with all terms,
conditions, and provisions included in the solicitation. Offers that fail to furnish required
representations or information, or reject the
terms and conditions of the solicitation may be excluded from consideration.

     (c) Period for acceptance of offers. The offeror agrees to hold the prices in its offer
firm for 30 calendar days from the date
specified for receipt of offers, unless another time period is specified in an addendum to
the solicitation.

     (d) Product samples. When required by the solicitation, product samples shall be submitted at
or prior to the time specified for
receipt of offers. Unless otherwise specified in this solicitation, these samples shall be
submitted at no expense to the Government, and
returned at the sender’s request and expense, unless they are destroyed during preaward
testing.

     (e) Multiple offers. Offerors are encouraged to submit multiple offers presenting alternative
terms and conditions or commercial
items for satisfying the requirements of this solicitation. Each offer submitted will be
evaluated separately.

     (f) Late submissions, modifications, revisions, and withdrawals of offers.

          (1) Offerors are responsible for submitting offers, and any modifications, revisions, or
withdrawals, so as to reach the Government office designated in the solicitation by the time
specified in the solicitation. If no time is specified in the solicitation, the time for receipt is
4:30 p.m., local time, for the designated Government office on the date that offers or revisions
are due.

          (2)(i) Any offer, modification, revision, or withdrawal of an offer received at the Government
office designated in the solicitation after the exact time specified for receipt of offers is
“late” and will not be considered unless it is received before award is made, the Contracting
Officer determines that accepting the late offer would not unduly delay the acquisition; and—

               (A) If it was transmitted through an electronic commerce method authorized by the
solicitation, it was received at the
initial point of entry to the Government infrastructure not later than 5:00 p.m. one working
day prior to the date specified for receipt of
offers; or

               (B) There is acceptable evidence to establish that it was received at the Government
installation designated for receipt of
offers and was under the Government’s control prior to the time set for receipt of offers; or

               (C) If this solicitation is a request for proposals, it was the only proposal received.

28

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART III — 52.212-1 INSTRUCTIONS TO OFFERORS—COMMERCIAL ITEMS (JUNE 2008) cont.

               (ii) However, a late modification of an otherwise successful offer, that makes its terms
more favorable to the Government, will be considered at any time it is received and may be
accepted.

          (3) Acceptable evidence to establish the time of receipt at the Government installation
includes the time/date stamp of that
installation on the offer wrapper, other documentary evidence of receipt maintained by the
installation, or oral testimony or statements
of Government personnel.

          (4) If an emergency or unanticipated event interrupts normal Government processes so that
offers cannot be received at the
Government office designated for receipt of offers by the exact time specified in the
solicitation, and urgent Government requirements
preclude amendment of the solicitation or other notice of an extension of the closing
date, the time specified for receipt of offers will
be deemed to be extended to the same time of day specified in the solicitation on the
first work day on which normal Government
processes resume.

          (5) Offers may be withdrawn by written notice received at any time before the exact time
set for receipt of offers. Oral offers in
response to oral solicitations may be withdrawn orally. If the solicitation authorizes
facsimile offers, offers may be withdrawn via
facsimile received at any time before the exact time set for receipt of offers, subject to
the conditions specified in the solicitation
concerning facsimile offers. An offer may be withdrawn in person by an offeror or its
authorized representative if, before the exact
time set for receipt of offers, the identity of the person requesting withdrawal is
established and the person signs a receipt for the offer.

     (g) Contract award (not applicable to Invitation for Bids). The Government intends to
evaluate offers and award a contract without discussions with offerors. Therefore, the
offeror’s initial offer should contain the offeror’s best terms from a price and technical
standpoint. However, the Government reserves the right to conduct discussions if later
determined by the Contracting Officer to be necessary. The Government may reject any or all
offers if such action is in the public interest; accept other than the lowest offer; and waive
informalities and minor irregularities in offers received.

     (h) Multiple awards. The Government may accept any item or group of items of an offer,
unless the offeror qualifies the offer by specific limitations. Unless otherwise provided in
the Schedule, offers may not be submitted for quantities less than those specified. The
Government reserves the right to make an award on any item for a quantity less than the
quantity offered, at the unit prices offered, unless the offeror specifies otherwise in the
offer.

     (i) Availability of requirements documents cited in the solicitation.

          (1)(i) The GSA Index of Federal Specifications, Standards and Commercial Item
Descriptions, FPMR Part 101-29, and copies of specifications, standards, and commercial item
descriptions cited in this solicitation may be obtained for a fee by submitting a request to—

GSA Federal Supply Service Specifications Section

Suite 8100

470 East L’Enfant Plaza, SW

Washington, DC 20407

Telephone (202) 619-8925 

Facsimile (202) 619-8978.

               (ii) If the General Services Administration, Department of Agriculture, or Department of
Veterans Affairs issued this solicitation, a single copy of specifications, standards, and
commercial item descriptions cited in this solicitation may be obtained free of charge by
submitting a request to the addressee in paragraph (i)(1)(i) of this provision. Additional
copies will be issued for a fee.

          (2) Most unclassified Defense specifications and standards may
be downloaded from the following ASSIST websites:

               (i) ASSIST (http://assist.daps.dla.mil).

               (ii) Quick Search (http://assist.daps.dla.mil/quicksearch).

               (iii) ASSISTdocs.com (http://assistdocs.com).

29

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART III — 52.212-1 INSTRUCTIONS TO OFFERORS—COMMERCIAL ITEMS (JUNE 2008) cont.

          (3) Documents not available from ASSIST may be ordered from the Department of Defense
Single Stock Point (DoDSSP) by—

               (i) Using the ASSIST Shopping Wizard (http://assist.daps.dla.mil/wizard);

               (ii) Phoning the DoDSSP Customer Service Desk (215) 697-2179, Mon-Fri, 0730 to 1600 EST; or

               (iii) Ordering from DoDSSP, Building 4, Section D, 700 Robbins Avenue, Philadelphia, PA
19111-5094, Telephone (215) 697-2667/2179, Facsimile (215) 697-1462.

          (4) Nongovernment (voluntary) standards must be obtained from the organization responsible
for their preparation, publication, or maintenance.

     (j) Data Universal Numbering System (DUNS) Number. (Applies to all offers exceeding
$3,000, and offers of $3,000 or less if the solicitation requires the Contractor to be
registered in the Central Contractor Registration (CCR) database.) The offeror shall enter, in
the block with its name and address on the cover page of its offer, the annotation “DUNS” or
“DUNS+4” followed by the DUNS or DUNS+4 number that identifies the offeror’s name and address.
The DUNS+4 is the DUNS number plus a 4-character suffix that may be assigned at the discretion
of the offeror to establish additional CCR records for identifying alternative Electronic
Funds Transfer (EFT) accounts (see FAR Subpart 32.11) for the same concern. If the
offeror does not have a DUNS number, it should contact Dun and Bradstreet directly to obtain
one. An offeror within the United States may contact Dun and Bradstreet by calling
1-866-705-5711 or via the internet at http://fedgov.dnb.com/webform. An offeror located
outside the United States must contact the local Dun and Bradstreet office for a DUNS number.
The offeror should indicate that it is an offeror for a Government contract when contacting the
local Dun and Bradstreet office.

     (k) Central Contractor Registration. Unless exempted by an addendum to this solicitation,
by submission of an offer, the offeror acknowledges the requirement that a prospective awardee
shall be registered in the CCR database prior to award, during performance and through final
payment of any contract resulting from this solicitation. If the Offeror does not become
registered in the CCR database in the time prescribed by the Contracting Officer, the
Contracting Officer will proceed to award to the next otherwise successful registered Offeror.
Offerors may obtain information on registration and annual confirmation requirements via the
internet at http://www.ccr.gov or by calling
1-888-227-2423 or
269-961-5757.

     (1) Debriefing. If a post-award debriefing is given to requesting offerors, the Government
shall disclose the following information, if applicable:

          (1) The agency’s evaluation of the significant weak or deficient factors in the debriefed
offeror’s offer.

          (2) The overall evaluated cost or price and technical rating of the successful and the
debriefed offeror and past performance information on the debriefed offeror.

          (3) The overall ranking of all offerors, when any ranking was developed by the agency during
source selection.

          (4) A summary of the rationale for award;

          (5) For acquisitions of commercial items, the make and model of the item to be delivered by the
successful offeror.

          (6) Reasonable responses to relevant questions posed by the debriefed offeror as to whether
source-selection procedures set forth in the solicitation, applicable regulations, and other
applicable authorities were followed by the agency.

30

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM TO 52.212-1 INSTRUCTIONS TO OFFERORS—COMMERCIAL ITEMS

52.204-4 PRINTING/COPYING DOUBLE-SIDED ON RECYCLED PAPER (AUG 2000)

a) Definitions. As used in this clause—

“Postconsumer material” means a material or finished product that has served its intended use and
has been discarded for disposal or recovery, having completed its life as a consumer item. Postconsumer material is a part of the
broader category of “recovered material.” For paper and paper products, postconsumer material means “postconsumer fiber” defined
by the U.S. Environmental Protection Agency (EPA) as—

(1) Paper, paperboard, and fibrous materials from retail stores, office buildings, homes, and so forth, after they have passed through
their end-usage as a consumer item, including: used corrugated boxes; old newspapers; old magazines; mixed waste paper;
tabulating cards; and used cordage; or

(2) All paper, paperboard, and fibrous materials that enter and are collected from municipal solid
waste; but not

(3) Fiber derived from printers’ over-runs, converters’ scrap, and over-issue publications.

“Printed or copied double-sided” means printing or reproducing a document so that information is on
both sides of a sheet of paper.

“Recovered material,” for paper and paper products, is defined by EPA in its Comprehensive
Procurement Guideline as “recovered fiber” and means the following materials:

          (1) Postconsumer fiber; and

          (2) Manufacturing wastes such as—

          
(i) Dry paper and paperboard waste generated after completion of the papermaking
process (that is, those manufacturing operations up to and including the cutting and
trimming of the paper machine reel into smaller rolls or rough sheets) including: envelope
cuttings, bindery trimmings, and other paper and paperboard waste resulting from printing,
cutting, forming, and other converting operations; bag, box, and carton manufacturing
wastes; and butt rolls, mill wrappers, and rejected unused stock; and

          
(ii) Repulped finished paper and paperboard from obsolete
inventories of paper and paperboard manufacturers, merchants, wholesalers,
dealers, printers, converters, or others.

(b) In accordance with Section 101 of Executive Order 13101 of September 14, 1998, Greening the
Government through Waste Prevention, Recycling, and Federal Acquisition, the Contractor is encouraged to submit paper
documents, such as offers, letters, or reports, that are printed or copied double-sided on recycled paper that meet minimum content
standards specified in Section 505 of Executive Order 13101, when not using electronic commerce

(c) If the Contractor cannot purchase high-speed copier paper, offset paper, forms bond, computer
printout paper, carbonless paper, file folders, white wove envelopes, writing and office paper, book paper, cotton fiber paper, and
cover stock meeting the 30 percent postconsumer material standard for use in submitting paper documents to the Government, it should
use paper containing no less than 20 percent postconsumer material. This lesser standard should be used only when paper meeting the
30 percent postconsumer material standard is not obtainable at a reasonable price or does not meet reasonable performance standards.

52.214-34 SUBMISSION OF OFFERS IN THE ENGLISH LANGUAGE (APR 1991)

Offers submitted in response to this solicitation shall be in the English language. Offers
received in other than English shall be rejected.

52.214-35 SUBMISSION OF OFFERS IN U.S. CURRENCY (APR 1991)

Offers submitted in response to this solicitation shall be in terms of U.S. dollars. Offers
received in other than U.S. dollars shall be rejected.

52.233-2 SERVICE OF PROTEST (SEP 2006)

(a) Protests, as defined in section 33.101 of the Federal Acquisition Regulation, that are filed
directly with an agency, and copies of any protests that are filed with the Government Accountability Office (GAO), shall be served on the
Contracting Officer (addressed as follows) by obtaining written and dated acknowledgment of receipt from:

[REDACTED]

Department of Veterans Affairs

P.O. Box 76, 049A2-l

Hines, IL 60141

(b) The copy of any protest shall be received in the office designated above within one day of
filing a protest with the GAO.

31

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

ADDENDUM
TO 52.212-1 INSTRUCTIONS TO OFFERORS — COMMERCIAL ITEMS cont 

852.233-70 PROTEST CONTENT/ALTERNATE DISPUTE RESOLUTION (JAN 2008)

(a) Any protest filed by an interested party shall:

(1) Include the name, address, fax number, and telephone number of the protester;

(2) Identify the solicitation and/or contract number;

(3) Include an original signed by the protester or the protester’s representative,
and at least one copy;

(4) Set forth a detailed statement of the legal and factual grounds of the protest,
including a description of resulting prejudice to the protester, and provide copies of relevant documents;

(5) Specifically request a ruling of the individual upon whom the protest is served;

(6) State the form of relief requested; and

(7) Provide all information establishing the timeliness of the protest

(b) Failure to comply with the above may result in dismissal of the protest without further
consideration.

(c) Bidders/offerors and contracting officers are encouraged to use alternative dispute resolution (ADR) procedures to resolve protests at any stage in the protest process. If ADR is used, the Department of Veterans Affairs will not furnish any documentation in an ADR proceeding beyond what is allowed by the Federal Acquisition Regulation.

852.233-71 ALTERNATE PROTEST PROCEDURE (JAN 1998)

As an alternative to filing a protest with the contracting officer, an interested party may file a
protest with the Deputy Assistant Secretary for Acquisition and Materiel Management, Acquisition
Administration Team, Department of Veterans Affairs, 810 Vermont Avenue, NW, Washington, DC,
20420, or, for solicitations issued by the Office of Facilities Management, the Chief Facilities
Management Officer, Office of Facilities Management, 810 Vermont Avenue, NW, Washington, DC 20420.
The protest will not be considered if the interested party has a protest on the same or similar
issues pending with the contracting officer.

AS1108 CONTACT FOR CONTRACT ADMINISTRATION (MAY 1992)

Bidders are requested to designate a person to be contacted for prompt contract administration.

NAME: DAVID P. TUSA

TITLE: EXECUTIVE VP & CFO

ADDRESS: 9220 KIRBY PR # 500

CITY/STATE: HOUSTON, TX

ZIP CODE: 77054

TELEPHONE NO. 713-660-3514 EXT. ___

FAX NO.: 713-432-0555

E-Mail: dtusa@sharpsinc.com

AS1521 AUTHORIZED NEGOTIATORS (JAN 1998)

The offeror or quoter represents that the following persons are authorized to negotiate on its
behalf with the Government in connection with this request for proposals or quotations:

	 	 	 	 	 
	 	 	 
	DAVID P. TUSA, EXEC VP & CFO
 	 	 
	Name, Title 	 	 
	 
	713-660-3514 	 	 
	Phone number 	 	 
	(list names, titles, and telephone numbers of the authorized negotiators). 	 	 

32

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART IV — 52.212-3 OFFEROR REPRESENTATIONS & CERTIFICATIONS—COMMERCIAL ITEMS (JUNE 2008)

     An offeror shall complete only paragraph (b) of this provision if the offeror has
completed the annual representations and certifications electronically at
http://orca.bpn.gov. If an offeror has not completed the annual representations and
certifications electronically at the ORCA website, the offeror shall complete only paragraphs
(c) through (m) of this provision.

     (a) Definitions. As used in this provision—

     “Emerging small business” means a small business concern whose size is no greater than 50
percent of the numerical size standard for the NAICS code designated.

     “Forced or indentured child labor” means all work or service—

          (1) Exacted from any person under the age of 18 under the menace of any penalty for its
nonperformance and for which the worker does not offer himself voluntarily; or

          (2) Performed by any person under the age of 18 pursuant to a contract the enforcement of
which can be accomplished by process or penalties.

     “Manufactured end product” means any end product in Federal Supply Classes (FSC) 1000-9999,
except—

          (1) FSC 5510, Lumber and Related Basic Wood Materials;

          (2) Federal Supply Group (FSG) 87, Agricultural Supplies;

          (3) FSG 88, Live Animals;

          (4) FSG 89, Food and Related
Consumables;

          (5} FSC 9410, Crude Grades of Plant
Materials;

          (6) FSC 9430, Miscellaneous Crude Animal Products, Inedible;

          (7) FSC 9440, Miscellaneous Crude Agricultural and Forestry Products;

          (8) FSC 9610, Ores;

          (9) FSC 9620, Minerals, Natural and Synthetic; and

          (10) FSC 9630, Additive Metal Materials.

     “Place of manufacture” means the place where an end product is assembled out of components, or
otherwise made or processed from raw materials into the finished product that is to be provided to
the Government. If a product is disassembled and reassembled, the place of reassembly is not the
place of manufacture.

     “Restricted business operations” means business operations in Sudan that include power
production activities, mineral extraction activities, oil-related activities, or the production of
military equipment, as those terms are defined in the Sudan Accountability and Divestment Act of
2007 (Pub. L. 110-174). Restricted business operations do not include business operations that the
person conducting the business can demonstrate—

          (1) Are conducted under contract directly and exclusively with the regional government of
southern Sudan;

          (2) Are conducted pursuant to specific authorization from the Office of Foreign Assets
Control in the Department of the Treasury, or are expressly exempted under Federal law from the requirement to be conducted
under such authorization;

          (3) Consist of providing goods or services to marginalized populations of Sudan;

          (4) Consist of providing goods or services to an internationally recognized peacekeeping force
or humanitarian organization;

          (5) Consist of providing goods or services that are used only to promote health or education;
or

          (6) Have been voluntarily suspended.

     “Service-disabled veteran-owned small business concern"—

          (1) Means a small business concern—

               (i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in
the case of any publicly owned business, not less than 51 percent of the stock of which is owned by
one or more service-disabled veterans; and

               (ii) The management and daily business operations of which are controlled by one or more
service-disabled veterans or, in the case of a service-disabled veteran with permanent and severe
disability, the spouse or permanent caregiver of such veteran.

          (2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2),
with a disability that is service-connected, as defined in 38 U.S.C. 101(16).

33

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART
IV — 52.212-3 OFFEROR REPRESENTATIONS & CERTIFICATIONS — COMMERCIAL ITEMS (JUNE 2008) cont.

     “Small business concern” means a concern, including its affiliates, that is independently
owned and operated, not dominant in the field of operation in which it is bidding on Government
contracts, and qualified as a small business under the criteria in 13 CFR Part 121 and size
standards in this solicitation.

     “Veteran-owned small business concern” means a small business concern—

          (1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38
U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or
more veterans; and

          (2) The management and daily business operations of which are controlled by one or more
veterans.

     “Women-owned business concern” means a concern which is at least 51 percent owned by one or
more women; or in the case of any publicly owned business, at least 51 percent of its stock is
owned by one or more women; and whose management and daily business operations are controlled by
one or more women.

     “Women-owned small business concern” means a small business concern—

          (1) That is at least 51 percent owned by one or more women; or, in the case of any publicly
owned business, at least 51 percent of the stock of which is owned by one or more women; and

          (1) Whose management and daily business operations are controlled by
one or more women.

     (b)

          (1) Annual Representations and Certifications. Any changes provided by the offeror in
paragraph (b)(2) of this provision do not automatically change the representations and certifications posted on the Online
Representations and Certifications Application (ORCA) website.

          (2) The offeror has completed the annual representations and certifications electronically via
the ORCA website at http://orca.bpn.gov. After reviewing the ORCA database information, the offeror
verifies by submission of this offer that the representations and certifications currently posted electronically at FAR 52.212-3, Offeror
Representations and Certifications—Commercial Items, have been entered or updated in the last 12 months, are current, accurate,
complete, and applicable to this solicitation (including the business size standard applicable to the NAICS code referenced for
this solicitation), as of the date of this offer and are incorporated in this offer by reference (see FAR 4.1201), except for
paragraphs _________.

     [Offeror to identify the applicable paragraphs at (c) through (m) of this provision that the
offeror has completed for the purposes of this solicitation only, if any.

     These amended representation(s) and/or certifications are also incorporated in this offer and
are current, accurate, and complete as of the date of this offer.

     Any changes provided by the offeror are applicable to this solicitation only, and do not
result in an update to the representations and certifications posted on ORCA.]

34

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART IV — 52.212-3 OFFEROR REPRESENTATIONS & CERTIFICATIONS — COMMERCIAL ITEMS (JUNE 2008) cont.

     Note: Complete paragraphs (c)(6) and (c)(7) only if this solicitation is expected to exceed the
simplified acquisition threshold.

          (6) Women-owned business concern (other than small business concern). [Complete only if the
offeror is a women-owned business concern and did not represent itself as a small business concern in paragraph (c)(l)
of this provision.] The offeror represents that it o is a women-owned business concern.

          (7) Tie bid priority for labor surplus area concerns. If this is an invitation for bid, small
business offerors may identify the labor surplus areas in which costs to be incurred on account of manufacturing or production (by
offeror or first-tier subcontractors) amount to more than 50 percent of the contract price: ___ ___ ___ ___ ___ ___ ___ ___

          (8) Small Business Size for the Small Business Competitiveness Demonstration Program and for
the Targeted Industry Categories under the Small Business Competitiveness Demonstration Program. [Complete only if
the offeror has represented itself to be a small business concern under the size standards for this solicitation.]

               (i) [Complete only for solicitations indicated in an addendum as being set-aside for
emerging small businesses in one of the designated industry groups (DIGs).] The offeror
represents as part of its offer that it o is, o is not an emerging small business.

               (ii) [Complete only for solicitations indicated in an addendum as being for one of the
targeted industry categories (TICs) or designated industry groups (DIGs).] Offeror represents as
follows:

                    (A) Offeror’s number of employees for the past 12 months (check the Employees column if size
standard stated in the solicitation is expressed in terms of number of employees); or

                    (B) Offeror’s average annual gross revenue for the last 3 fiscal years (check the Average
Annual Gross Number of Revenues column if size standard stated in the solicitation is expressed in terms of
annual receipts).

     (Check one of the following):

Number of Employees Average Annual Gross Revenues

	 	 	 

	___  50 or fewer

	 	___  $1 million or less
	___  51-100

	 	___  $1,000,001-$2 million
	___ 101-250

	 	___ $2,000,001-$3.5 million
	___ 251-500

	 	___ $3,500,001-$5 million
	___ 501-750

	 	___ $5,000,001-$10 million
	___ 751-1,000

	 	___ $10,000,001-$17 million
	___ Over 1,000

	 	___ Over $17 million

          (9) [Complete only if the solicitation contains the clause at FAR 52.219-23. Notice of
Price Evaluation Adjustment for Small Disadvantaged Business Concerns, or FAR 52.219-25. Small Disadvantaged Business
Participation Program—Disadvantaged Status and Reporting, and the offeror desires a benefit based on its disadvantaged status.]

               (i) General. The offeror represents that either—

                    (A) It o is, o is not certified by the Small Business Administration as a small disadvantaged
business concern and identified, on the date of this representation, as a certified small disadvantaged business
concern in the database maintained by the Small Business Administration (PRO-Net), and that no material change in disadvantaged
ownership and control has occurred since its certification, and, where the concern is owned by one or more individuals claiming
disadvantaged status, the net worth of each individual upon whom the certification is based does not exceed $750,000 after taking into
account the applicable exclusions set forth at 13 CFR 124.104(c)(2);or

                    (B) It o has, o has not submitted a completed application to the Small Business Administration
or a Private Certifier to be certified as a small disadvantaged business concern in accordance with 13 CFR 124, Subpart B,
and a decision on that application is pending, and that no material change in disadvantaged ownership and control has occurred since
its application was submitted.

               (ii) o Joint Ventures under the Price Evaluation Adjustment for Small Disadvantaged Business
Concerns. The offeror represents, as part of its offer, that it is a joint venture that complies with the
requirements in 13 CFR I24.1002(f) and that the representation in paragraph (c)(9)(i) of this provision is accurate for the small
disadvantaged business concern that is participating in the joint venture. [The offeror shall enter the name of the small disadvantaged business
concern that is participating in the joint venture: ___ ___ ___ .]

35

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

representation
in paragraph (c)(9)(i) of this provision is accurate for the small
disadvantaged business concern that is participating in the joint venture. [The offeror shall
enter the name of the small disadvantaged business concern that is participating in the joint
venture:
              .]

PART
IV — 52.212-3 OFFEROR REPRESENTATIONS & CERTIFICATIONS — COMMERCIAL ITEMS (JUNE 2008) cont.

          (10) HUBZone small business concern. [Complete only if the offeror represented
itself as a small business concern in paragraph (c)(1) of this provision.] The offeror
represents, as part of its offer, that—

               (i) It o is, o is not a HUBZone small business concern listed, on the date of this
representation, on the List of Qualified HUBZone Small Business
Concerns maintained by the Small
Business Administration, and no material change in ownership and control, principal office, or
HUBZone employee percentage has occurred since it was certified by the Small Business
Administration in accordance with 13 CFR Part 126; and

               (ii) It o is, o is not a joint venture that complies with the requirements of 13 CFR Part
126, and the representation in paragraph (c)(10)(i) of this provision is accurate for the HUBZone
small business concern or concerns that are participating in the joint venture. [The offeror
shall enter the name or names of the HUBZone small business concern or concerns that are
participating in the joint venture:                     .] Each HUBZone small business concern participating in the joint venture
shall submit a separate signed copy of the HUBZone representation.

     (e) Certification
Regarding Payments to Influence Federal Transactions (31 U.S.C. 1352).
(Applies only if the contract is expected to exceed $100,000.) By submission of its offer, the
offeror certifies to the best of its knowledge and belief that no Federal appropriated funds have
been paid or will be paid to any person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee of Congress or an employee
of a Member of Congress on his or her behalf in connection with the award of any resultant
contract. If any registrants under the Lobbying Disclosure Act of 1995 have made a lobbying
contact on behalf of the offeror with respect to this contract, the offeror shall complete and
submit, with its offer, OMB Standard Form LLL, Disclosure of Lobbying Activities, to provide the
name of the registrants. The offeror need not report regularly employed officers or employees of
the offeror to whom payments of reasonable compensation were made.

     (f) Buy American Act Certificate. (Applies only if the clause at Federal Acquisition
Regulation (FAR) 52.225-1, Buy American Act—Supplies, is included in this solicitation.)

          (1) The offeror certifies that each end product, except those listed in paragraph (f)(2) of
this provision, is a domestic end product and that the offeror has considered components of
unknown origin to have been mined, produced, or manufactured outside the United States. The
offeror shall list as foreign end products those end products manufactured in the United States
that do not qualify as domestic end products. The terms “component,” “domestic end product,” “end
product,” “foreign end product,” and “United States” are defined in the clause of this
solicitation entitled “Buy American Act—Supplies.”

          (2) Foreign End Products:

	 	 	 	 	 
	Line Item No.	 	Country of Origin	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

[List as necessary]

[INITIALED:
DT]

36

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART
IV — 52.212-3 OFFEROR REPRESENTATIONS & CERTIFICATIONS
— COMMERCIAL ITEMS (JUNE 2008) cont.

          (3) The Government will evaluate offers in accordance with the policies and procedures of FAR
Part 25.

     (g)(1) Buy American Act—Free Trade Agreements—Israeli Trade Act Certificate.
(Applies only if the clause at FAR 52.225-3. Buy American Act—Free Trade
Agreements—Israeli Trade Act, is included in this solicitation.)

               (i) The offeror certifies that each end product, except those listed in paragraph (g)(l)(ii)
or (g)(l)(iii) of this provision, is a domestic end product and that the offeror has considered
components of unknown origin to have been mined, produced, or manufactured outside the United
States. The terms “Bahrainian or Moroccan end product,” “component,” “domestic end product,” “end
product,” “foreign end product,” “Free Trade Agreement country,” “Free Trade Agreement country end
product,” “Israeli end product,” and “United States” are defined in the clause of this solicitation
entitled “Buy American Act—Free Trade Agreements—Israeli Trade Act.”

               (ii) The offeror certifies that the following supplies are Free Trade Agreement country end
products (other than Bahrainian or Moroccan end products) or Israeli end products as defined in the
clause of this solicitation entitled “Buy American Act—Free Trade Agreements—Israeli Trade Act”:

     Free Trade Agreement Country End Products (Other than Bahrainian or Moroccan End Products) or Israeli End Products:

	 	 	 	 	 
	Line Item No.	 	Country of Origin	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

[List as necessary]

               (iii) The offeror shall list those supplies that are foreign end products (other than those
listed in paragraph (g)(l)(ii) of this provision) as defined in the clause of this solicitation
entitled “Buy American Act—Free Trade Agreements—Israeli Trade Act.” The offeror shall list as
other foreign end products those end products manufactured in the United States that do not qualify
as domestic end products.

     Other Foreign End
Products:

	 	 	 	 	 
	Line Item No.	 	Country of Origin	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

[List as necessary]

               (iv) The Government will evaluate offers in accordance with the policies and procedures of
FAR Part 25.

          (2) Buy American Act—Free Trade Agreements—Israeli Trade Act
Certificate, Alternate I. If Alternate I to the clause at FAR 52.225-3 is included in
this solicitation, substitute the following paragraph (g)(l)(ii) for paragraph (g)(l)(ii) of
the basic provision:

     (g)(l)(ii) The offeror certifies that the following supplies are Canadian end
products as defined in the clause of this solicitation entitled “Buy American Act—Free
Trade Agreements—Israeli Trade Act”:

     Canadian End Products:

	 	 	 
	Line Item No.	 	 
	 
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

[List as necessary]

37

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

	PART IV — 52.212-3 OFFEROR REPRESENTATIONS & CERTIFICATIONS — COMMERCIAL ITEMS (JUNE 2008)
cont.

          (3) Buy
American Act—Free Trade Agreements—Israeli Trade Act
Certificate, Alternate II.
If Alternate II to the clause at FAR 52.225-3 is included in this solicitation,
substitute the following paragraph (g)(1)(ii) for paragraph (g)(l)(ii) of the basic provision:

     (g)(l)(ii) The offeror certifies that the following supplies are Canadian end products or
Israeli end products as defined in the clause of this solicitation entitled “Buy American
Act—Free Trade Agreements—Israeli Trade Act”:

     Canadian or Israeli End Products:

	 	 	 	 	 
	Line Item No.	 	Country of Origin	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

(List as necessary]

          (4) Trade Agreements Certificate. (Applies only if the clause at FAR 52.225-5.
Trade Agreements, is included in this solicitation.)

               (i) The offeror certifies that each end product, except those listed in paragraph (g)(4)(ii)
of this provision, is a U.S.-made or designated country end product, as defined in the clause of
this solicitation entitled “Trade Agreements.”

               (ii) The offeror shall list as other end products those end products that are not U.S.-made
or designated country end products.

     Other End Products:

	 	 	 	 	 
	Line Item No.	 	Country of Origin	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

[List as necessary]

               (iii) The Government will evaluate offers in accordance with the policies and procedures of
FAR Part 25. For line items covered by the WTO GPA, the Government will evaluate offers of
U.S.-made or designated country end products without regard to the restrictions of the Buy American
Act. The Government will consider for award only offers of U.S.-made or designated country end
products unless the Contracting Officer determines that there are no offers for such products or
that the offers for such products are insufficient to fulfill the requirements of the solicitation.

38

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART IV — 52.212-3 OFFEROR REPRESENTATIONS & CERTIFICATIONS — COMMERCIAL ITEMS (JUNE 2008) cont.

               (i) Taxes are considered delinquent if both of the following criteria apply:

                    (A) The tax liability is finally determined. The liability is finally determined if it has
been assessed. A liability is not finally determined if there is a pending administrative or
judicial challenge. In the case of a judicial challenge to the liability, the liability is not
finally determined until all judicial appeal rights have been exhausted.

                    (B) The taxpayer is delinquent in making payment. A taxpayer is delinquent if the taxpayer has
failed to pay the tax liability when full payment was due and required. A taxpayer is not
delinquent in cases where enforced collection action is precluded.

               (ii) Examples.

                    (A) The taxpayer has received a statutory notice of deficiency, under I.R.C. §6212, which
entitles the taxpayer to seek Tax Court review of a proposed tax deficiency. This is not a
delinquent tax because it is not a final tax liability. Should the taxpayer seek Tax Court review,
this will not be a final tax liability until the taxpayer has exercised all judicial appeal rights.

                    (B) The IRS has filed a notice of Federal tax lien with respect to an assessed tax liability,
and the taxpayer has been issued a notice under I.R.C. §6320 entitling the taxpayer to request a
hearing with the IRS Office of Appeals contesting the lien filing, and to further appeal to the Tax
Court if the IRS determines to sustain the lien filing. In the course of the hearing, the taxpayer
is entitled to contest the underlying tax liability because the taxpayer has had no prior
opportunity to contest the liability. This is not a delinquent tax because it is not a final tax
liability. Should the taxpayer seek tax court review, this will not be a final tax liability until
the taxpayer has exercised all judicial appeal rights.

                    (C) The taxpayer has entered into an installment agreement pursuant to I.R.C. §6159. The
taxpayer is making timely payments and is in full compliance with the agreement terms. The
taxpayer is not delinquent because the taxpayer is not currently required to make full payment.

                    (D) The taxpayer has filed for bankruptcy protection. The taxpayer is not delinquent because
enforced collection action is stayed under 11 U.S.C. §362 (the Bankruptcy Code).

     (i) Certification Regarding Knowledge of Child Labor for Listed End Products (Executive Order
13126). [The Contracting Officer must list in paragraph (i)(l) any end products being acquired
under this solicitation that are included in the List of Products Requiring Contractor
Certification as to Forced or Indentured Child Labor, unless excluded at 22.1503(b).]

          (1) Listed end products.

	 	 	 

	Listed End Product

	 	Listed Countries of Origin
	 
	 	 
	 

	 	 

	 
	 	 
	 

	 	 

          (2) Certification. [If the Contracting Officer has identified end products and countries
of origin in paragraph (i)(l) of this provision, then the offeror must certify to either
(i)(2)(i) or (i)(2)(ii) by checking the appropriate block.]

	 	o(i)	 	The offeror will not supply any end product listed in paragraph (i)(l) of this
provision that was mined, produced, or manufactured in the corresponding country as listed for that
product.
	 
	 	o(ii)	 	The offeror may supply an end product listed in paragraph (i)(l) of this provision
that was mined, produced, or manufactured in the corresponding country as listed for that product.
The offeror certifies that it has made a good faith effort to determine whether forced or
indentured child labor was used to mine, produce, or manufacture any such end product furnished
under this contract. On the basis of those efforts, the offeror certifies that it is not aware of
any such use of child labor.

     (j) Place of manufacture. (Does not apply unless the solicitation is predominantly for the
acquisition of manufactured end products.) For statistical purposes only, the offeror shall
indicate whether the place of manufacture of the end products it expects to provide in response to
this solicitation is predominantly—

          (1) o In the United States (Check this box if the total anticipated price of offered end
products manufactured in the United States exceeds the total anticipated price of offered end
products manufactured outside the United States); or

          (2) o Outside the United States.

     (k) Certificates regarding exemptions from the application of the Service Contract Act.
(Certification by the offeror as to its compliance with respect to the contract also constitutes
its certification as to compliance by its subcontractor if it subcontracts out the exempt
services.) [The contracting officer is to check a box to indicate if paragraph (k)(l) or (k)(2)
applies.]

39

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART
IV — 52.212-3 OFFEROR REPRESENTATIONS & CERTIFICATIONS
— COMMERCIAL ITEMS (JUNE 2008) cont.

          o (1) Maintenance, calibration, or repair of certain equipment as described in FAR
22.1003-4(c)(1). The offeror o does o does not certify that—

               (i) The items of equipment to be serviced under this contract are used regularly for
other than Governmental purposes and are sold or traded by the offeror in substantial
quantities to the general public in the course of normal business operations;

               (ii) The services will be furnished at prices which are, or are based on,
established catalog or market prices (see FAR 22.1003-4(c)(2)(ii)) for the
maintenance, calibration, or repair of such equipment; and

               (iii) The compensation (wage and fringe benefits) plan for all service employees
performing work under the contract will be the same as that used for these employees and
equivalent employees servicing the same equipment of commercial customers.

          o (2) Certain
services as described in FAR 22.1003-4(d)(1). The offeror o does o does not certify
that—

               (i) The services under the contract are offered and sold regularly to
non-Governmental customers, and are provided by the offeror (or subcontractor in the
case of an exempt subcontract) to the general public in substantial quantities in the
course of normal business operations;

               (ii) The contract services will be furnished at prices that are, or are based on,
established catalog or market prices (see FAR 22.1003-4(d)(2)(iii));

               (iii) Each service employee who will perform the services under the contract will
spend only a small portion of his or her time (a monthly average of less than 20 percent
of the available hours on an annualized basis, or less than 20 percent of available
hours during the contract period if the contract period is less than a month) servicing
the Government contract; and

               (iv) The compensation (wage and fringe benefits) plan for all service employees
performing work under the contract is the same as that used for these employees and
equivalent employees servicing commercial customers.

          (3) If paragraph (k)(l) or (k)(2)
of this clause applies—

               (i) If the offeror does not certify to the conditions in paragraph (k)(1) or
(k)(2) and the Contracting Officer did not attach a Service Contract Act wage
determination to the solicitation, the offeror shall notify the Contracting Officer as
soon as possible; and

               (ii) The
Contracting Officer may not make an award to the offeror if the offeror
fails to execute the certification in paragraph (k)(l) or (k)(2) of this clause or to
contact the Contracting Officer as required in paragraph (k)(3)(i) of this clause.

     (l) Taxpayer
Identification Number (TIN) (26 U.S.C. 6109, 31 U.S.C. 7701).
(Not applicable if the offeror is required to provide this information to a central
contractor registration database to be eligible for award.)

          (1) All offerors must submit the information required in paragraphs (1)(3) through
(1)(5) of this provision to comply with debt collection requirements of 31 U.S.C.
7701 (c) and 3325(d), reporting requirements of 26 U.S.C. 6041, 6041 A. and
6050M, and implementing regulations issued by the Internal Revenue Service (IRS).

          (2) The TIN may be used by the Government to collect and report on any delinquent amounts
arising out of the offeror’s relationship with the Government
(31 U.S.C. 7701(c)(3)).
If the resulting contract is subject to the payment reporting requirements
described in FAR 4.904, the TIN provided hereunder may be matched with IRS records to
verify the accuracy of the offeror’s TIN.

          (3) Taxpayer Identification Number (TIN).

	 	o 	 	TIN: 76-0439542
	 
	 	o 	 	TIN has been applied for.
	 
	 	o 	 	TIN is not required because:
	 
	 	o 	 	Offeror is a nonresident alien, foreign corporation, or foreign partnership that
does not have income effectively connected with the conduct of a trade or business in the
United States and does not have an office or place of business or a fiscal paying agent
in the United States;
	 
	 	o 	 	Offeror is an agency or instrumentality of a foreign government;
	 
	 	o 	 	Offeror is an agency or instrumentality of the Federal Government

40

 

NOTE: All provisions in this Agreement indicated by “[REDACTED]” are confidential and have been omitted from
this copy of the Agreement and filed separately with the Securities and Exchange Commission.

PART IV — 52.212-3 OFFEROR REPRESENTATIONS & CERTIFICATIONS—COMMERCIAL ITEMS (JUNE 2008) cont.

          (4) Type of organization.

	 	o 	 	Sole proprietorship;
	 
	 	o 	 	Partnership;
	 
	 	þ 	 	Corporate entity (not tax-exempt);
	 
	 	o 	 	Corporate entity (tax-exempt);
	 
	 	o 	 	Government entity (Federal, State, or local);
	 
	 	o 	 	Foreign government;
	 
	 	o 	 	International organization per 26 CFR 1.6049-4;
	 
	 	o 	 	Other                                         .

          (5) Common parent.

	 	o 	 	Offeror is not owned or controlled by a common parent;
	 
	 	o 	 	Name and TIN of common parent:
	 
	 	 	 	Name SHARPS COMPLIANCE CORP.
	 
	 	 	 	TIN 74-2657168

     (m) Restricted business operations in Sudan. By submission of its offer, the offeror certifies
that it does not conduct any restricted business operations in Sudan.

41

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