Common use of LENDING POLICY Clause in Contracts

LENDING POLICY. All Local Authorities that borrow from the Company will: ◼ Provide debenture security in relation to their borrowing from the Company and related obligations, and (if relevant), equity commitment liabilities to the Company and (if relevant) guarantee liabilities to a security trustee approved for the Company's creditors. ◼ Issue securities (bonds / FRNs / CP) to the Company and/or enter into facility arrangements with the Company. ◼ Comply with their own internal borrowing policies. ◼ Comply with the financial covenants outlined in the following table, provided that: ◼ Unrated Local Authorities or Local Authorities with a long-term credit rating lower than ‘A’ equivalent can have bespoke financial covenants that exceed the:  Lending policy covenants outlined in the following table with the approval of the Board;  Foundation policy covenants outlined in the following table with the approval of an Ordinary Resolution. ◼ Local Authorities with a long-term credit rating of ‘A’ equivalent or higher will not be required to comply with the lending policy covenants in the following table, and can have bespoke financial covenants that exceed the foundation policy covenants outlined in the following table with the approval of an Ordinary Resolution. ◼ Any Board or Ordinary Resolution approval of bespoke financial covenants will only be provided after a robust credit analysis and any approval must also include bespoke reporting and monitoring arrangements. ◼ If the principal amount of a Local Authority's borrowings or the Company's commitment under a facility agreement with a Local Authority is at any time greater than NZD 20 million, be a party to a deed of guarantee and an equity commitment deed (in each case in a form set by the Company). Financial covenant Lending policy covenants Foundation policy covenants Net Debt / Total Revenue <175% <250% Net Interest / Total Revenue <20% <20% Net Interest / Annual Rates Income <25% <30% Liquidity >110% >110% Total Revenue is defined as cash earnings from rates, grants and subsidies, user charges, interest, dividends, financial and other revenue and excludes non government capital contributions (e.g. developer contributions and vested assets). Net debt is defined as total debt less liquid financial assets and investments. Liquidity is defined as external debt plus committed loan facilities plus liquid investments divided by external debt. Net Interest is defined as the amount equal to all interest and financing costs less interest income for the relevant period. Annual Rates Income is defined as the amount equal to the total revenue from any funding mechanism authorised by the Local Government (Rating) Xxx 0000 together with any revenue received from other local authorities for services provided (and for which the other local authorities rate). Financial covenants are measured on Council only basis and not consolidated group basis, unless requested by a Local Authority and approved by the Board. During the initial three years of operation the Auckland Council will be limited to a maximum of 60% of the Company's total Local Authority (including CCOs (as defined below)) assets. After three years Auckland Council will be limited to a maximum of 40% of the Company's total Local Authority (including CCO) assets. No more than the greater of NZD 100 million or 33% of a Local Authority's or CCO's (as defined below) borrowings from the Company will mature in any 12 month period. Subject to implementation of any amendments or other actions considered necessary, advisable or expedient by the Board and the approval of the Board in relation to the relevant CCO (as defined below)(which may be a Council-Controlled Trading Organisation), an approved CCO may borrow from the Company provided that: ▪ The CCO is a "council-controlled organisation" as defined in section 6 of the Local Government Xxx 0000, where the CCO is a company in which equity securities carrying at least 51% or more of the voting rights at a meeting of the shareholders of the CCO are held or controlled, directly or indirectly, by one or more Local Authorities (respectively, a "CCO" and each such Local Authority being a "CCO Shareholder"); ▪ Each CCO Shareholder provides a guarantee in respect of the CCO in favour of the Company and/or there is sufficient uncalled capital in respect of the CCO to meet the financial obligations of the CCO; ▪ Each CCO Shareholder provides equity commitment liabilities to the Company, guarantees liabilities to a security trustee approved for the Company's creditors, and provides debenture security for its equity commitments to the Company and guarantee liabilities to the security trustee; ▪ Each CCO Shareholder complies with Lending policy financial covenants, Foundation policy financial covenants or other financial covenants required by the Board (if any); ▪ The CCO complies with any covenants required by the Board; and ▪ If required by the Board, the CCO will grant security in favour of the Company (which may be subject to any intercreditor arrangements acceptable to the Board). Where the Company agrees to provide funding to the CCO, it must within 90 days of receiving annual financial covenant reporting from a CCO Shareholder (in its capacity as a borrower) report to the Shareholders' Council, holders of ordinary shares in the Company and any Local Authority guarantors of the Company's liabilities as to whether that CCO Shareholder has complied with its financial covenants on an individual and consolidated group basis. Notwithstanding the definition of "CCO" set out above, the Board may not approve a CCO to borrow from the Company unless 100% of the equity securities carrying voting rights at a meeting of shareholders of the CCO are held or controlled, directly or indirectly, by one or more Local Authorities and the Crown (if applicable).

LENDING POLICY. All Local Authorities that borrow from the Company will: ◼ Provide debenture security in relation to their borrowing from the Company and related obligations, and (if relevant), equity commitment liabilities to the Company and (if relevant) guarantee liabilities to a security trustee approved for the Company's creditors. ◼ Issue securities (bonds / FRNs / CP) to the Company and/or enter into facility arrangements with the Company. ◼ Comply with their own internal borrowing policies. ◼ Comply with the financial covenants outlined in the following table, provided that: ◼ Unrated Local Authorities or Local Authorities with a long-term credit rating lower than ‘A’ equivalent can have bespoke financial covenants that exceed the:  🞎 Lending policy covenants outlined in the following table with the approval of the Board;  🞎 Foundation policy covenants outlined in the following table with the approval of an Ordinary Resolution. ◼ Local Authorities with a long-term credit rating of ‘A’ equivalent or higher higher: 🞎 will not be required to comply with the lending policy covenants in the following table, ; and 🞎 can have bespoke financial covenants that exceed the foundation policy covenants outlined in the following table with the approval of an Ordinary Resolution; and in any event, will not be required to comply with the Net Debt / Total Revenue foundation policy covenant outlined in the following table until the financial year ending 30 June 2026. Until that date, such Local Authority must comply with the Net Debt / Total Revenue covenant set out in the table entitled "Alternative Net Debt / Total Revenue Covenant" below. ◼ Any Board or Ordinary Resolution approval of bespoke financial covenants will only be provided after a robust credit analysis and any approval must also include bespoke reporting and monitoring arrangements. ◼ If the principal amount of a Local Authority's borrowings borrowings, or the Company's commitment under a facility agreement with a Local Authority Authority, is at any time greater than NZD 20 million, be a party to a deed of guarantee and an equity commitment deed (in each case in a form set by the Company). Financial covenant Lending policy covenants Foundation policy covenants Net Debt / Total Revenue <175% <250280% Net Interest / Total Revenue <20% <20% Net Interest / Annual Rates Income <25% <30% Liquidity >110% >110% Alternative Net Debt / Total Revenue Covenant Financial Year ending Net Debt / Total Revenue 30 June 2020 <250% 30 June 2021 <300% 30 June 2022 <300% 30 June 2023 <295% 30 June 2024 <290% 30 June 2025 <285% Total Revenue is defined as cash earnings from rates, grants and subsidies, user charges, interest, dividends, financial and other revenue and excludes non government capital contributions (e.g. developer contributions and vested assets). Net debt is defined as total debt less liquid financial assets and investments. Liquidity is defined as external debt plus committed loan facilities plus liquid investments divided by external debt. Net Interest is defined as the amount equal to all interest and financing costs less interest income for the relevant period. Annual Rates Income is defined as the amount equal to the total revenue from any funding mechanism authorised by the Local Government (Rating) Xxx 0000 together with any revenue received from other local authorities for services provided (and for which the other local authorities rate). Financial covenants are measured on Council only basis and not consolidated group basis, unless requested by a Local Authority and approved by the Board. During the initial three years of operation the Auckland Council will be limited to a maximum of 60% of the Company's total Local Authority (including CCOs (as defined below)) assets. After three years Auckland Council will be limited to a maximum of 40% of the Company's total Local Authority (including CCO) assets. No more than the greater of NZD 100 million or 33% of a Local Authority's or CCO's (as defined below) borrowings from the Company will mature in any 12 month period. Subject to implementation of any amendments or other actions considered necessary, advisable or expedient by the Board and the approval of the Board in relation to the relevant CCO (as defined below)(which below) (which may be a Councilcouncil-Controlled Trading Organisationcontrolled trading organisation, as defined in the Local Government Act), an approved CCO may borrow from the Company provided that: ▪ The CCO is a "council-controlled organisation" as defined in section 6 of the Local Government Xxx 0000Act, where the CCO is a company in which equity securities carrying at least 51% or more of the voting rights at a meeting of the shareholders of the CCO are held or controlled, directly or indirectly, by one or more Local Authorities (respectively, a "CCO" and each such Local Authority being a "CCO Shareholder"); ▪ Each CCO Shareholder provides a guarantee in respect of the CCO in favour of the Company and/or there is sufficient uncalled capital in respect of the CCO to meet the financial obligations of the CCO; ▪ Each CCO Shareholder provides equity commitment liabilities to the Company, guarantees liabilities to a security trustee approved for the Company's creditors, and provides debenture security for its equity commitments to the Company and guarantee liabilities to the security trustee; ▪ Each CCO Shareholder complies with Lending policy financial covenants, Foundation policy financial covenants or other financial covenants required by the Board (if any); ) and, in the case of a CCO Shareholder with a long-term credit rating of 'A' equivalent or higher, until the financial year ending 30 June 2026, the Net Debt / Total Revenue covenant in the table entitled "Alternative Net Debt / Total Revenue Covenant" above. ▪ The CCO complies with any covenants required by the Board; and ▪ If required by the Board, the CCO will grant security in favour of the Company (which may be subject to any intercreditor arrangements acceptable to the Board). Where the Company agrees to provide funding to the CCO, it must within 90 days of receiving annual financial covenant reporting from a CCO Shareholder (in its capacity as a borrower) report to the Shareholders' Council, holders of ordinary shares in the Company and any Local Authority guarantors of the Company's liabilities as to whether that CCO Shareholder has complied with its financial covenants on an individual and consolidated group basis. Notwithstanding the definition of "CCO" set out above, the Board may not approve a CCO to borrow from the Company unless 100% of the equity securities carrying voting rights at a meeting of shareholders of the CCO are held or controlled, directly or indirectly, by one or more Local Authorities and the Crown (if applicable).. First Opening (Clause 7.1) SHAREHOLDER NO. OF PAID UP ORDINARY SHARES NO. OF UNPAID ORDINARY SHARES Auckland Council 2,000,000 2,000,000 Bay of Plenty Regional Council 2,000,000 2,000,000 Christchurch City Council 1,999,999 2,000,000 Xxxxxxxx City Council 2,000,000 2,000,000 Hastings District Council 400,000 400,000 Masterton District Council 100,000 100,000 New Plymouth District Council 100,000 100,000 Otorohanga District Council 100,000 100,000 Selwyn District Council 200,000 200,000 South Taranaki District Council 100,000 100,000 Tasman District Council 2,000,000 2,000,000 Xxxxx Xxxxxxxx Xxxxxxx 000,000 000,000 Xxxxxxxx Xxxx Council 2,000,000 2,000,000 Waipa District Council 100,000 100,000 Wellington City Council 2,000,000 2,000,000 Wellington Regional Council 2,000,000 2,000,000 Western Bay of Plenty District Council 2,000,000 2,000,000 Whangarei District Council 800,000 800,000 New Zealand Government 5,000,000 0 Total 24,999,999 20,000,000 Reimbursement (Clause 7.2) LOCAL AUTHORITY AMOUNT Auckland Council $250,000.00 Christchurch City Council $200,000.00 Xxxxxxxx City Council $200,000.00 Tasman District Council $200,000.00 Tauranga City Council $200,000.00 Wellington City Council $200,000.00 Wellington Regional Council $200,000.00 Western Bay of Plenty District Council $150,000.00 Whangarei District Council $200,000.00 Form of Accession Deed (Clause 10.11) DEED dated [ ] PARTIES [ [ [ ] ("Remaining Shareholder(s)") ] ("Transferor") ] ("Transferee") INTRODUCTION

LENDING POLICY. All Local Authorities that borrow from the Company will: ◼ Provide debenture security in relation to their borrowing from the Company and related obligations, and (if relevant), equity commitment liabilities to the Company and (if relevant) guarantee liabilities to a security trustee approved for the Company's creditors. ◼ Issue securities (bonds / FRNs / CP) to the Company and/or enter into facility arrangements with the Company. ◼ Comply with their own internal borrowing policies. ◼ Comply with the financial covenants outlined in the following table, provided that: ◼ Unrated Local Authorities or Local Authorities with a long-term credit rating lower than ‘A’ equivalent can have bespoke financial covenants that exceed the:  🞎 Lending policy covenants outlined in the following table with the approval of the Board;  🞎 Foundation policy covenants outlined in the following table with the approval of an Ordinary Resolution. ◼ Local Authorities with a long-term credit rating of ‘A’ equivalent or higher higher: 🞎 will not be required to comply with the lending policy covenants in the following table, ; and 🞎 can have bespoke financial covenants that exceed the foundation policy covenants outlined in the following table with the approval of an Ordinary Resolution; and in any event, will not be required to comply with the Net Debt / Total Revenue foundation policy covenant outlined in the following table until the financial year ending 30 June 2026. Until that date, such Local Authority must comply with the Net Debt / Total Revenue covenant set out in the table entitled "Alternative Net Debt / Total Revenue Covenant" below. ◼ Any Board or Ordinary Resolution approval of bespoke financial covenants will only be provided after a robust credit analysis and any approval must also include bespoke reporting and monitoring arrangements. ◼ If the principal amount of a Local Authority's borrowings borrowings, or the Company's commitment under a facility agreement with a Local Authority Authority, is at any time greater than NZD 20 million, be a party to a deed of guarantee and an equity commitment deed (in each case in a form set by the Company). Financial covenant Lending policy covenants Foundation policy covenants Net Debt / Total Revenue <175% <250280% Net Interest / Total Revenue <20% <20% Net Interest / Annual Rates Income <25% <30% Liquidity >110% >110% Alternative Net Debt / Total Revenue Covenant Financial Year ending Net Debt / Total Revenue 30 June 2020 <250% 30 June 2021 <300% 30 June 2022 <300% 30 June 2023 <295% 30 June 2024 <290% 30 June 2025 <285% Total Revenue is defined as cash earnings from rates, grants and subsidies, user charges, interest, dividends, financial and other revenue and excludes non government capital contributions (e.g. developer contributions and vested assets). Net debt is defined as total debt less liquid financial assets and investments. Liquidity is defined as external debt plus committed loan facilities plus liquid investments divided by external debt. Net Interest is defined as the amount equal to all interest and financing costs less interest income for the relevant period. Annual Rates Income is defined as the amount equal to the total revenue from any funding mechanism authorised by the Local Government (Rating) Xxx 0000 Act 2002 together with any revenue received from other local authorities for services provided (and for which the other local authorities rate). Financial covenants are measured on Council only basis and not consolidated group basis, unless requested by a Local Authority and approved by the Board. During the initial three years of operation the Auckland Council will be limited to a maximum of 60% of the Company's total Local Authority (including CCOs (as defined below)) assets. After three years Auckland Council will be limited to a maximum of 40% of the Company's total Local Authority (including CCO) assets. No more than the greater of NZD 100 million or 33% of a Local Authority's or CCO's (as defined below) borrowings from the Company will mature in any 12 month period. Subject to implementation of any amendments or other actions considered necessary, advisable or expedient by the Board and the approval of the Board in relation to the relevant CCO (as defined below)(which below) (which may be a Councilcouncil-Controlled Trading Organisationcontrolled trading organisation, as defined in the Local Government Act), an approved CCO may borrow from the Company provided that: ▪ The CCO is a "council-controlled organisation" as defined in section 6 of the Local Government Xxx 0000Act, where the CCO is a company in which equity securities carrying at least 51% or more of the voting rights at a meeting of the shareholders of the CCO are held or controlled, directly or indirectly, by one or more Local Authorities (respectively, a "CCO" and each such Local Authority being a "CCO Shareholder"); ▪ Each CCO Shareholder provides a guarantee in respect of the CCO in favour of the Company and/or there is sufficient uncalled capital in respect of the CCO to meet the financial obligations of the CCO; ▪ Each CCO Shareholder provides equity commitment liabilities to the Company, guarantees liabilities to a security trustee approved for the Company's creditors, and provides debenture security for its equity commitments to the Company and guarantee liabilities to the security trustee; ▪ Each CCO Shareholder complies with Lending policy financial covenants, Foundation policy financial covenants or other financial covenants required by the Board (if any); ) and, in the case of a CCO Shareholder with a long-term credit rating of 'A' equivalent or higher, until the financial year ending 30 June 2026, the Net Debt / Total Revenue covenant in the table entitled "Alternative Net Debt / Total Revenue Covenant" above. ▪ The CCO complies with any covenants required by the Board; and ▪ If required by the Board, the CCO will grant security in favour of the Company (which may be subject to any intercreditor arrangements acceptable to the Board). Where the Company agrees to provide funding to the CCO, it must within 90 days of receiving annual financial covenant reporting from a CCO Shareholder (in its capacity as a borrower) report to the Shareholders' Council, holders of ordinary shares in the Company and any Local Authority guarantors of the Company's liabilities as to whether that CCO Shareholder has complied with its financial covenants on an individual and consolidated group basis. Notwithstanding the definition of "CCO" set out above, the Board may not approve a CCO to borrow from the Company unless 100% of the equity securities carrying voting rights at a meeting of shareholders of the CCO are held or controlled, directly or indirectly, by one or more Local Authorities and the Crown (if applicable).. First Opening (Clause 7.1) SHAREHOLDER NO. OF PAID UP ORDINARY SHARES NO. OF UNPAID ORDINARY SHARES Auckland Council 2,000,000 2,000,000 Bay of Plenty Regional Council 2,000,000 2,000,000 Christchurch City Council 1,999,999 2,000,000 Hamilton City Council 2,000,000 2,000,000 Hastings District Council 400,000 400,000 Masterton District Council 100,000 100,000 New Plymouth District Council 100,000 100,000 Otorohanga District Council 100,000 100,000 Selwyn District Council 200,000 200,000 South Taranaki District Council 100,000 100,000 Tasman District Council 2,000,000 2,000,000 Taupo District Council 100,000 100,000 Tauranga City Council 2,000,000 2,000,000 Waipa District Council 100,000 100,000 Wellington City Council 2,000,000 2,000,000 Wellington Regional Council 2,000,000 2,000,000 Western Bay of Plenty District Council 2,000,000 2,000,000 Whangarei District Council 800,000 800,000 New Zealand Government 5,000,000 0 Total 24,999,999 20,000,000 Reimbursement (Clause 7.2) LOCAL AUTHORITY AMOUNT Auckland Council $250,000.00 Christchurch City Council $200,000.00 Hamilton City Council $200,000.00 Tasman District Council $200,000.00 Tauranga City Council $200,000.00 Wellington City Council $200,000.00 Wellington Regional Council $200,000.00 Western Bay of Plenty District Council $150,000.00 Whangarei District Council $200,000.00 Form of Accession Deed (Clause 10.11) DEED dated [ ] PARTIES [ [ [ ] ("Remaining Shareholder(s)") ] ("Transferor") ] ("Transferee") INTRODUCTION

LENDING POLICY. All Local Authorities that borrow from the Company will: ◼ Provide debenture security in relation to their borrowing from the Company and related obligations, and (if relevant), equity commitment liabilities to the Company and (if relevant) guarantee liabilities to a security trustee approved for the Company's creditors. ◼ Issue securities (bonds / FRNs / CP) to the Company and/or enter into facility arrangements with the Company. ◼ Comply with their own internal borrowing policies. ◼ Comply with the financial covenants outlined in the following table, provided that: ◼ Unrated Local Authorities or Local Authorities with a long-term credit rating lower than ‘A’ equivalent can have bespoke financial covenants that exceed the:  🞎 Lending policy covenants outlined in the following table with the approval of the Board;  🞎 Foundation policy covenants outlined in the following table with the approval of an Ordinary Resolution. ◼ Local Authorities with a long-term credit rating of ‘A’ equivalent or higher will not be required to comply with the lending policy covenants in the following table, and can have bespoke financial covenants that exceed the foundation policy covenants outlined in the following table with the approval of an Ordinary Resolution. ◼ Any Board or Ordinary Resolution approval of bespoke financial covenants will only be provided after a robust credit analysis and any approval must also include bespoke reporting and monitoring arrangements. ◼ If the principal amount of a Local Authority's borrowings or the Company's commitment under a facility agreement with a Local Authority is at any time greater than NZD 20 million, be a party to a deed of guarantee and an equity commitment deed (in each case in a form set by the Company). Financial covenant Lending policy covenants Foundation policy covenants Net Debt / Total Revenue <175% <250% Net Interest / Total Revenue <20% <20% Net Interest / Annual Rates Income <25% <30% Liquidity >110% >110% Total Revenue is defined as cash earnings from rates, grants and subsidies, user charges, interest, dividends, financial and other revenue and excludes non government capital contributions (e.g. developer contributions and vested assets). Net debt is defined as total debt less liquid financial assets and investments. Liquidity is defined as external debt plus committed loan facilities plus liquid investments divided by external debt. Net Interest is defined as the amount equal to all interest and financing costs less interest income for the relevant period. Annual Rates Income is defined as the amount equal to the total revenue from any funding mechanism authorised by the Local Government (Rating) Xxx 0000 together with any revenue received from other local authorities for services provided (and for which the other local authorities rate). Financial covenants are measured on Council only basis and not consolidated group basis, unless requested by a Local Authority and approved by the Board. During the initial three years of operation the Auckland Council will be limited to a maximum of 60% of the Company's total Local Authority (including CCOs (as defined below)) assets. After three years Auckland Council will be limited to a maximum of 40% of the Company's total Local Authority (including CCO) assets. No more than the greater of NZD 100 million or 33% of a Local Authority's or CCO's (as defined below) borrowings from the Company will mature in any 12 month period. Subject to implementation of any amendments or other actions considered necessary, advisable or expedient by the Board and the approval of the Board in relation to the relevant CCO (as defined below)(which may be a Council-Controlled Trading Organisation), an approved CCO may borrow from the Company provided that: ▪ The CCO is a "council-controlled organisation" as defined in section 6 of the Local Government Xxx 0000, where the CCO is a company in which equity securities carrying at least 51% or more of the voting rights at a meeting of the shareholders of the CCO are held or controlled, directly or indirectly, by one or more Local Authorities (respectively, a "CCO" and each such Local Authority being a "CCO Shareholder"); ▪ Each CCO Shareholder provides a guarantee in respect of the CCO in favour of the Company and/or there is sufficient uncalled capital in respect of the CCO to meet the financial obligations of the CCO; ▪ Each CCO Shareholder provides equity commitment liabilities to the Company, guarantees liabilities to a security trustee approved for the Company's creditors, and provides debenture security for its equity commitments to the Company and guarantee liabilities to the security trustee; ▪ Each CCO Shareholder complies with Lending policy financial covenants, Foundation policy financial covenants or other financial covenants required by the Board (if any); ▪ The CCO complies with any covenants required by the Board; and ▪ If required by the Board, the CCO will grant security in favour of the Company (which may be subject to any intercreditor arrangements acceptable to the Board). Where the Company agrees to provide funding to the CCO, it must within 90 days of receiving annual financial covenant reporting from a CCO Shareholder (in its capacity as a borrower) report to the Shareholders' Council, holders of ordinary shares in the Company and any Local Authority guarantors of the Company's liabilities as to whether that CCO Shareholder has complied with its financial covenants on an individual and consolidated group basis. Notwithstanding the definition of "CCO" set out above, the Board may not approve a CCO to borrow from the Company unless 100% of the equity securities carrying voting rights at a meeting of shareholders of the CCO are held or controlled, directly or indirectly, by one or more Local Authorities and the Crown (if applicable).