DATED

2012

(1) WAKEFIELD WASTE PFI LIMITED

- and (2) SHANKS GROUP PLC

CONSTRUCTION CONTRACT
PARENT COMPANY
GUARANTEE
relating to
The Council of the City of Wakefield
Waste Management Project

THIS GUARANTEE ("Guarantee") is made on

2012

BETWEEN:
(1)

WAKEFIELD WASTE PFI LIMITED, a company incorporated under the laws of England
and Wales with registered number 08193325, whose registered office is at Dunedin House,
Auckland Park, Mount Farm, Bletchley, Milton Keynes, Buckinghamshire MK1 1BU
("Beneficiary"); and

(2)

SHANKS GROUP PLC, a company registered in Scotland with registered

number SC077438 and whose registered office is 16 Charlotte Square, Edinburgh, EH2 4DF
("Guarantor").

WHEREAS:
A

Pursuant to a construction contract dated on or about the date of this guarantee (as the same
may be amended from time to time, the "Construction Contract") and made between the
Beneficiary (1) and Shanks Waste Management Limited (a company registered in England
and Wales with registered number 2393309 and whose registered office is at Dunedin House,
Auckland Park, Mount Farm, Bletchley, Milton Keynes, Buckinghamshire MK1 1BU)
("Construction Sub-Contractor") (2) the Construction Sub-Contractor has agreed with the
Beneficiary to construct certain waste management facilities in relation to the Council of the
City of Wakefield Waste Management PFI project ("Project").

In consideration of the Beneficiary entering into the Construction Contract the Guarantor has
agreed to guarantee the obligations of the Construction Sub-Contractor under the terms of the
Construction Contract in the manner hereinafter appearing.

NOW IT IS HEREBY AGREED as follows:

1.

In this Guarantee, unless the context otherwise requires or unless otherwise defined in this
Guarantee, capitalised terms, words and expressions shall have the same respective meanings
that are given to them in the Construction Contract.

2.

The Guarantor irrevocably and unconditionally guarantees to the Beneficiary the due and
punctual performance by the Construction Sub-Contractor of the Construction
Sub-Contractor's duties and obligations pursuant to or in connection with the Construction
Contract and undertakes as a continuing obligation to the Beneficiary that if for any reason
there is any failure to perform any duties and/or obligations arising pursuant to or in
connection with the Construction Contract by the Construction Sub-Contractor the Guarantor
will, subject to clause 3, forthwith upon service of the written demand served by the
Beneficiary in compliance with the provisions of clause 5, duly and promptly perform or
procure the performance of each and every such duty or obligation.

3.

The Guarantor undertakes as a separate, independent and primary obligation to indemnify the
Beneficiary against any loss, cost or liability suffered or incurred by the Beneficiary by reason
of a failure by the Construction Sub-Contractor to perform any duties and/or obligations
arising pursuant to or in connection with, the Construction Contract, and as if such obligations
and duties were not unenforceable, invalid or illegal.

4.

Save in respect of the liabilities under clauses 6 and 7 hereof, nothing in this Guarantee shall
impose obligations or liabilities on the Guarantor which are greater or of longer duration than
are imposed on the Construction Sub-Contractor in the Construction Contract or (in the case

LAU/SHFDP/331411/1/UKM/43476457.1

of clause 2) would be so imposed but for any unenforceability, invalidity or illegality of the
Construction Contract.
5.

Any demand given by the Beneficiary to the Guarantor hereunder shall be given in writing to
the Guarantor at the address stated herein and shall be sufficiently served by letter delivered
by posting by pre-paid post or by personal delivery. The notice shall be effective on the
second day after posting (if served by post) or when actually delivered at the address for
service (if delivered personally) and shall:

5.1

include a statement that the Construction Sub-Contractor has failed to fulfil its obligations
pursuant to the terms of the Construction Contract;

5.2

specify the obligations which the Construction Sub-Contractor has failed to fulfil with a
description of such failure; and

5.3

state the amount claimed (if any).

6.

The Guarantor will pay to the Beneficiary interest on an amount due from the date of the
Beneficiary's demand under this Guarantee at the rate and in the manner applicable to overdue
payments set out in the Construction Contract.

7.

The Guarantor agrees that all sums payable by the Guarantor under this Guarantee shall be
paid to the Beneficiary in full without set-off or counterclaim and free of any present or future
taxes, levies, duties, charges, fees, withholdings or deductions (together referred to as
"Deductions") which would not have been imposed if such payments had been made by the
Construction Sub-Contractor, and if the Guarantor is compelled by law to make any
Deductions the Guarantor will gross up the payment so that the net sum received by the
Beneficiary is equal to the full amount which the Beneficiary would have received had no
such Deductions been made.

8.

The obligations of the Guarantor hereunder shall not be impaired, reduced, discharged or
otherwise affected by any act, omission, matter or thing which, but for this provision, might
operate to release or otherwise exonerate the Guarantor from its obligations hereunder in
whole or in part including, without limitation and whether or not known to the Guarantor:

8.1

any variation, amendment, alteration or supplement to the Construction Contract or any other
document or security so that references to the Construction Contract in this Guarantee shall
include each such variation; or

8.2

any allowance of time, indulgence, waiver or consent at any time granted to the Construction
Sub-Contractor, the Guarantor or to any other person; or

8.3

without prejudice to the requirements of clause 5 the making, or absence, of any demand for
payment on the Construction Sub-Contractor, the Guarantor or any other person; or

8.4

any legal limitation, disability, incapacity or other circumstances relating to the Construction
Sub-Contractor, the Guarantor or any other person; or

8.5

any enforcement, variation, compromise or absence of enforcement, of the Construction

Contract or of any security, right of action, guarantee or indemnity, against the Construction
Sub-Contractor, the Guarantor or any other person; or

8.6

the release of any security, right of action, guarantee or indemnity against the Guarantor or
any other person; or

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8.7

the dissolution, amalgamation, reconstruction or reorganisation of the Construction

Sub-Contractor, the Guarantor or any other person; or

8.8

termination of the Construction Sub-Contract or the Construction Sub-Contractor's

employment under the Construction Contract; or

8.9

any other event which might operate to discharge a guarantor,

in each case whether such matters are done or omitted to be done with or without notice to, or
the consent of, the Guarantor and the Guarantor hereby waives any requirement for notice of,
or consent to, any such matters.

9.

The Guarantor hereby authorises the Construction Sub-Contractor and the Beneficiary by
agreement between the parties to the Construction Contract to make any addendum or
variation to the Construction Contract the due and punctual performance of which addendum
or variation shall be likewise guaranteed by the Guarantor in accordance with the terms of this
Guarantee. Without prejudice to the foregoing, the Beneficiary shall supply the Guarantor
with a copy of the said addendum or variation as soon as reasonably practicable after the same
has been made.

10.

This Guarantee is not revocable by the Guarantor and is a continuing guarantee and
accordingly shall remain in operation until all obligations, warranties, duties and undertakings
now or hereafter to be carried out or performed by the Construction Sub-Contractor under the
Construction Contract shall have been satisfied or performed in full and is in addition to and
not in substitution for any rights or remedies that the Beneficiary may have against the
Construction Sub-Contractor under the Construction Contract or at law, and shall be
additional to any other security which the Beneficiary may at any time hold and may be
enforced without first having recourse to any such security and without taking any steps or
proceedings against the Construction Sub-Contractor.

11.

Without prejudice to the other provisions of this Guarantee, this Guarantee shall become
effective on the date of its execution by the Guarantor and shall expire on the date on which
the Guarantor's liabilities under clause 2 have been irrevocably and unconditionally
discharged in full.

12.

The Guarantor shall not, so long as this Guarantee remains in force and effect and until all
obligations of the Construction Sub-Contractor have been discharged and if any monies
which may be or become payable under the terms of the Construction Contract and this
Guarantee remain unpaid, unless the Beneficiary otherwise directs:

12.1

seek to recover, claim payment of or accept any monies or other property in respect of any
sum for the time being due to the Guarantor from the Construction Sub-Contractor on any
account whatsoever or exercise any other right or remedy which the Guarantor has in respect
of any such sum; or

12.2

claim or exercise any right of set-off, counter-claim, subrogation or indemnity against the
Construction Sub-Contractor or claim or take any benefit of or share in any assets,
composition, security or other benefit, right or remedy available to the Beneficiary in respect
of all or any of the sums payable by the Construction Sub-Contractor; or

12.3

claim or prove for or accept any payment in any composition by or in the insolvency or
liquidation of the Construction Sub-Contractor in competition with the Beneficiary in respect
of any monies owed to the Guarantor by the Construction Sub-Contractor on any account
whatsoever but shall afford the Beneficiary the full benefit of any right the Guarantor may

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have so to claim or prove and pay to the Beneficiary all monies received under that claim,
immediately upon receipt by the Guarantor; or
12.4

be subrogated to any right or security of the Beneficiary; or

12.5

claim or exercise in respect of the Construction Sub-Contractor any other right or remedy of a
surety or claim or enjoy the benefit of any right, remedy or equity available to or exercisable
by the Construction Sub-Contractor.

13.

The Guarantor declares and undertakes with the Beneficiary that the Guarantor has not taken
and shall not take or accept any security or received any payment or exercised any set-off of
whatever nature from the Construction Sub-Contractor in connection with this Guarantee, and
in the event of the Guarantor having taken or taking any such security in contravention of this
clause or receiving any payments, distributions, benefit or other property or exercising any
set-off in breach of clause 12, the Guarantor declares that the amount of any such payment,
distribution, benefit, other property or set-off will be held in trust for the Beneficiary and the
Guarantor will immediately deposit such amounts and all documents relating to them with the
Beneficiary and will immediately account to the Beneficiary for all monies at any time
received or held by or on behalf of the Guarantor in respect of them.

14.
14.1

The Guarantor represents and warrants to the Beneficiary that it is duly incorporated with
power to execute and perform its obligations under this Guarantee, that each of its obligations
under this Guarantee is (subject to general legal, equitable and statutory principles of English
law and applicable bankruptcy, liquidation, insolvency, reorganisation or other laws or other
legal or equitable principles) valid, binding and enforceable at law, that it has taken all
necessary corporate or other action to authorise such execution and performance and that its
execution and delivery of this Guarantee and the performance of its obligations hereunder
shall not cause it to breach any provision of its constitutional documents or any other
agreement binding on it.

14.2

The Guarantor represents and warrants to the Beneficiary that its obligations under this
Guarantee constitute its legal, valid and binding obligations and are in full force and effect
and rank at least pari passu with all other of its present and future unsecured and
unsubordinated indebtedness (with the exception of any obligations which are mandatorily
preferred by law and not by contract).

15.

The Guarantor's liability under this Guarantee shall not be discharged, reduced or affected by
any compromise or arrangement in relation to:

15.1

a court makes an order that the Construction Sub-Contractor be wound up or a resolution for a
voluntary winding-up of the Construction Sub-Contractor is passed;

15.2

any receiver or manager in respect of the Construction Sub-Contractor is appointed or

possession is taken by or on behalf of any creditor of any property of the Construction
Sub-Contractor that is the subject of a charge;

15.3

any voluntary arrangement is made for a composition of debts or a scheme of arrangement is

approved under the Insolvency Act 1986 or part 26 of the Companies Act 2006 in respect of
the Construction Sub-Contractor; and/or

15.4

an administration order is made, or an administrator is appointed in respect of the

Construction Sub-Contractor.

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16.

This Guarantee is and shall at all times remain the property of the Beneficiary
notwithstanding any release, settlement, satisfaction, discharge or termination of this
Guarantee.

17.

The Beneficiary shall be entitled to assign or charge the benefit of this Guarantee without the
consent of the Guarantor to:

17.1

by way of security and by way of re-assignment on redemption; or

17.2

to any person assuming any of the rights and obligations of the Beneficiary under or in
relation to the Construction Contract; or

17.3

to any of the Beneficiarys holding companies or subsidiaries (within the meaning of

section 1159 of the Companies Act 2006) and any other company in which the Beneficiary or
any such holding company or subsidiary holds more than 25% of the issued equity share
capital (as defined by section 548 of the Companies Act 2006),
but may not otherwise assign or transfer any of its rights or obligations under this Guarantee
without the consent of the Guarantor.

18.

The Guarantor may not assign, charge or transfer this Guarantee.

19.

If any provision of this Guarantee is or becomes invalid, illegal or unenforceable in any

respect under any law, the validity, legality and enforceability of the remaining provisions
shall not be affected or impaired in any way.

20.

The Contracts (Rights of Third Parties) Act 1999 ("Act") shall not apply to this Guarantee
and no person other than the parties to this Guarantee shall have any rights under it, nor shall
it be enforceable under the Act by any person other than the parties to it.

21.

This Guarantee may be executed in counterparts and both counterparts taken together shall be
deemed to constitute one and the same instrument.

22.

This Guarantee shall be governed by and construed in accordance with the law of England.

23.

The parties irrevocably agree that the courts of England shall have exclusive jurisdiction to
settle any dispute or difference which arises between the Guarantor and the Beneficiary in
connection with this Guarantee.

IN WITNESS whereof the parties have caused this Guarantee to be executed and delivered as a deed
on the date first above written.

LAU/SHFDP/331411/1/UKM/43476457.1

Executed as a deed by WAKEFIELD

WASTE PFI LIMITED by a director in the
presence of a witness:

)
)
)

Signature
Name (block capitals)
Director

Witness signature
Witness name
(block capitals)
Witness address

EXECUTED as a deed by SHANKS GROUP

PLC acting by its duly authorised attorney in
the presence of a witness:

)
)
)

Signature
Name (block capitals)
Attorney

Witness signature
Witness name
(block capitals)
Witness address

LAU/SHFDP/331411/1/UKM/43476457.1