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•

Advance our High Performance Organization. We plan to continue to operate with an emphasis on speed, simplicity and accountability. We focus on attracting, developing and managing talent within the Company. Further, we align individual performance to the objectives of the Company in order to ensure accountability, standardization and alignment of all key business processes, and to ensure a seamless transition from strategy to execution.

•	Drive Profitable Growth. To achieve our goal of accelerating growth, we have identified the following four priorities:

◦

Leverage Integrated Front End Resources - We plan to drive more sales growth through our regionally integrated sales organization. We will enhance our marketing and sales capabilities with the assistance of digital marketing and automation. We will implement technologies we believe will accelerate our growth, including a customer relationship management system that will enable us to have a view of all customer touch points and to share leads and expertise.

◦	Accelerate Innovation and Product Renewal - We plan to focus our research and development on products designed to offer specialized advantages to customers; multi-product packages; and integrated offers that leverage Xylem's intelligent analytics and monitoring and control technologies.

◦	Accelerate International Expansion - We plan to target fast-growing markets for additional investment and resource allocation, including the expansion of distribution and sales channels. We plan to customize product offerings based upon local needs.

◦	Expand Industrial End-Market Presence - We plan to build upon our current capabilities to serve industrial end-markets through the development of key vertical strategies, including channel development and market-specific offerings.

•

Improve Operational Excellence. We will focus on growth in our operating margins to make the Company more profitable. To accomplish this, we will build on our global strategic sourcing capability to maximize leverage from global spend and reinvigorate lean capabilities. We are committed to optimizing our cost structure by eliminating unnecessary costs and inefficient overhead, as well as by simplifying the business by streamlining product relationships across our businesses. We have been executing our plan to simplify our business through restructuring and realignment actions which we believe will better position the Company for the future and enable us to re-prioritize investments to high-priority areas. We will also continue to align the Company to leverage our existing cost structure and broad product portfolio into a greater competitive advantage. We will implement additional cost reductions in an effort to further reduce manufacturing, selling and general and administrative costs.

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Optimize Capital Deployment. We plan to continue to allocate capital strategically in an effort to drive strong returns for shareholders, taking decisive action to pivot our portfolio composition and future growth investments in order to create the greatest value. These investments include share repurchases, dividend payments and acquisitions. We intend to continue to execute on our share repurchase programs. We recently announced a 10% increase in our quarterly dividend to shareholders. Finally, although we announced a slow down in acquisitions during 2013 as we focused on growth and operational efficiency, we will continue to selectively evaluate and pursue acquisitions that will broaden our core product portfolio, expand our geographic footprint and enhance our position in strategic markets.

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•	possibility of unfavorable circumstances arising from host country laws or regulations;

•	currency exchange rate fluctuations and restrictions on currency repatriation;

•	potential negative consequences from changes to taxation policies;

•	disruption of operations from labor and political disturbances;

•	changes in tariff and trade barriers and import and export licensing requirements; and

•	insurrection or war.

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•	our decision to repatriate non-U.S. earnings for which we have not previously provided for U.S. taxes;

•	the jurisdictions in which profits are determined to be earned and taxed;

•	sustainability of historical income tax rates in the jurisdictions in which we conduct business;

•	the resolution of issues arising from tax audits with various tax authorities; and

•	changes in the valuation of our deferred tax assets and liabilities, and changes in deferred tax valuation allowances.

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•	increase our vulnerability to general adverse economic and industry conditions;

•	limit our ability to obtain additional financing or borrow additional funds;

•	limit our ability to pay future dividends;

•	limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

•	require that a substantial portion of our cash flow from operations be used for the payment of interest on our indebtedness instead of funding working capital, capital expenditures, acquisitions or other general corporate purposes; and

•	increase the amount of interest expense that we must pay because some of our borrowings are at variable interest rates, which, as interest rates increase, would result in higher interest expense.

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•	actual or anticipated fluctuations in our operating results due to factors related to our business;

•	success or failure of our business strategy;

•	our quarterly or annual earnings, or those of other companies in our industry;

•	our ability to obtain financing as needed;

•	announcements by us or our competitors of significant new business awards;

•	announcements by us or our competitors of significant acquisitions or dispositions;

•	changes in accounting standards, policies, guidance, interpretations or principles;

•	changes in earnings estimates by securities analysts or our ability to meet those estimates;

•	the operating and stock price performance of other comparable companies;

•	natural or environmental disasters that investors believe may affect us;

•	overall market fluctuations;

•	fluctuations in the budgets of federal, state and local governmental entities around the world;

•	results from any material litigation or government investigation;

•	changes in laws and regulations affecting our business; and

•	general economic conditions and other external factors.

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(b)

On August 18, 2012, the Board of Directors authorized the repurchase of up to two million shares of common stock with no expiration date. The program's objective is to offset dilution associated with various Xylem employee stock plans by acquiring shares in the open market from time to time. There were no shares purchased under this program during the three months ended December 31, 2013 and there are 1.0 million shares (approximately $35 million based on a share price of $34.60 per share) that may still be purchased under this plan.

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*	The Company calculates Working Capital as follows: Net Accounts Receivable + Net Inventory - Accounts Payable - Customer Advances.

(a)

On October 31, 2011, the Spin-off from ITT was completed through a tax-free stock dividend to ITT’s shareholders. ITT shareholders received one share of Xylem common stock for each share of ITT common stock. As a result on October 31, 2011, we had 184.6 million shares of common stock outstanding and this share amount is being utilized to calculate earnings per share and diluted earnings per share for all prior periods presented.

(b)	In 2010, we acquired Godwin Pumps of America, Inc. and Nova Analytics Corporation. These businesses in the aggregate contributed revenue of $247 million in 2010 and $1,070 million of total assets on date of acquisition.

(c)	In 2011, we acquired YSI Incorporated, which contributed revenue of $35 million in 2011 and $371 million of total assets on date of acquisition.

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•

Water Infrastructure serves the water infrastructure sector with pump systems that transport water from aquifers, lakes, rivers and seas; with filtration, ultraviolet and ozone systems that provide treatment, making the water fit to use; and pumping solutions that move the wastewater to treatment facilities where our mixers, biological treatment, monitoring, and control systems provide the primary functions in the treatment process. We provide analytical instrumentation used to measure water quality, flow, and level in wastewater, surface water, and coastal environments.

•

Applied Water serves the usage applications sector with water pressure boosting systems for heating, ventilation and air conditioning and for fire protection systems to the residential and commercial building services markets. In addition, our pumps, heat exchangers, valves and controls provide cooling to power plants and manufacturing facilities, as well as circulation for food and beverage processing. We also provide boosting systems for farming irrigation, pumps for dairy operations, and rainwater reuse systems for small scale crop and turf irrigation.

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•

"organic revenue" and "organic orders" defined as revenue and orders, respectively, excluding the impact of foreign currency fluctuations, intercompany transactions and contributions from acquisitions and divestitures. Divestitures include sales of insignificant portions of our business that did not meet the criteria for classification as a discontinued operation. The period-over-period change resulting from foreign currency fluctuations assumes no change in exchange rates from the prior period.

•	"constant currency" defined as financial results adjusted for currency translation impacts by translating current period and prior period activity using the same currency conversion rate. This approach is used for countries whose functional currency is not the U.S. dollar.

•	"adjusted net income" and "adjusted earnings per share" defined as net income and earnings per share, respectively, adjusted to exclude non-recurring separation costs from the Spin-off (not excluded in 2013), restructuring and realignment costs, special charges and tax-related special items. A reconciliation of adjusted net income is provided below.

(a)	Costs of $4 million ($2 million, net of tax) during 2013, associated with non-recurring separation activities are not excluded from adjusted net income.

•	"operating expenses excluding separation, restructuring and realignment costs and special charges" defined as operating expenses, adjusted to exclude non-recurring separation costs from the Spin-off (not excluded in 2013), restructuring and realignment costs and special charges.

•	"adjusted segment operating income" defined as segment operating income, adjusted to exclude non-recurring separation costs from the Spin-off (not excluded in 2013), restructuring and realignment costs and special charges, and "adjusted segment operating margin" defined as adjusted segment operating income divided by total segment revenue.

•	“realignment costs” defined as non-recurring costs not included in restructuring costs that are incurred as part of actions taken to reposition our business, including items such as professional fees, relocation, travel and other costs.

•

“special charges" defined as costs incurred by the Company associated with the settlement of legal proceedings with Xylem Group LLC and certain costs incurred for the change in chief executive officer made during the third quarter of 2013, as well as costs incurred in the fourth quarter of 2013 for the contractual indemnification of federal tax obligations to ITT and costs associated with a legal judgment arising from a historical acquisition matter.

•

"free cash flow" defined as net cash provided by operating activities less capital expenditures, as well as adjustments for other significant items that impact current results that management believes are not related to our ongoing operations and performance. Our definition of free cash flow does not consider certain non-discretionary cash payments, such as debt. The following table provides a reconciliation of free cash flow.

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(a)	Separation cash payments associated with non-recurring separation activities are included in the 2013 free cash flow. Separation cash payments are excluded from free cash flow in 2012 and include capital expenditures associated with the Spin-off of $4 million.

•	Net income of $228 million, or $1.22 per diluted share ($311 million or $1.67 on an adjusted basis)

•	Free cash flow generation of $198 million, and net cash from operating activities of $324 million

•	Orders of $3,912 million (a 3.4% increase from 2012 on a constant currency basis)

•	We repurchased $67 million in shares under the $250 million share repurchase program approved by our Board of Directors in 2013 and the previous share repurchase program implemented in 2012 as part of our strategy to enhance shareholder return and offset the impact of employee stock plans

•	Dividends paid to shareholders increased 15% in 2013

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(a)	Separation costs of $4 million ($2 million, net of tax) during 2013 are included within the $1,048 million of operating expenses.

(a)	Foreign currency impact primarily due to fluctuations in the value of the Euro, Australian Dollar, South African Rand, Swedish Krona, Canadian Dollar and British Pound against the US Dollar.

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*	Costs associated with non-recurring separation activities of $4 million ($2 million, net of tax) during 2013 are not excluded from adjusted operating income.

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(a)	Foreign currency impact primarily due to fluctuations of the Euro against the US Dollar.

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(a)

During the third quarter of 2011, we recorded an impairment charge of $8 million on one of our facilities in China within our Applied Water segment. Prior to the separation this was a shared facility among certain Xylem and ITT businesses and in connection with the separation, the removal of certain ITT operations triggered an impairment evaluation. The fair value of the applicable assets was calculated using the cost approach.

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(a)	Comprising non-recurring separation costs of $6 million and $29 million in our business segments and $16 million and $58 million within Corporate for 2012 and 2011, respectively.

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(1)	Refer to Note 14, “Credit Facilities and Long-Term Debt,” in the notes to the consolidated financial statements for discussion of the use and availability of debt and revolving credit agreements. Amounts represent principal payments of long-term debt including current maturities and exclude unamortized discounts.

(2)	Amounts represent estimate of future interest payments on long-term debt outstanding as of December 31, 2013.

(3)	Represents unconditional purchase agreements that are enforceable and legally binding and that specify all significant terms to purchase goods or services, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase agreements that are cancellable without penalty have been excluded.

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NM	Not meaningful. During 2013, an amendment to one of the Company's business unit's pension plans, the Xylem Standard Hourly Bargaining Unit Pension Plan, modified the benefit formula. Similar to all other U.S. pension plans, pension benefits for future service will be based on years of service and not impacted by future compensation increases.

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(a)	2013 includes $10 million of expense incurred under the tax matters agreement with ITT. Refer to Note 7 "Income Taxes" for additional information regarding the tax matters agreement.

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(a)	Restricted stock awards containing rights to non-forfeitable dividends which participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing earnings per share.

(b)

Incremental shares from stock options, restricted stock and performance share units are computed by the treasury stock method. The weighted average shares listed below were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented or were otherwise excluded under the treasury stock method. The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of restricted stock and performance share awards, reduced by the repurchase of shares with the proceeds from the assumed exercises, unrecognized compensation expense for outstanding awards and the estimated tax benefit of the assumed exercises. Performance share units will be included in the treasury stock calculation of diluted earnings per share upon achievement of underlying performance conditions. See Note 16, "Stock-Based Compensation Plans" for further detail on the performance share units.

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(a)	Effective portion

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(a)

The fair value of our Senior Notes (as defined below) was determined using quoted prices in active markets for identical securities, which are considered Level 1 inputs. The fair value of our Senior Notes due 2016 (as defined below) was $635 million and $639 million as of December 31, 2013 and 2012, respectively. The fair value of our Senior Notes due 2021 (as defined below) was $629 million and $680 million as of December 31, 2013 and 2012, respectively.

(b)	The unamortized discount is recognized as a reduction in the carrying value of the Senior Notes in the Consolidated Balance Sheets and is being amortized to interest expense in our Consolidated and Combined Income Statements over the expected remaining terms of the Senior Notes.

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(a)	The 2011 amount excludes $97 million ($68 million net of tax) of deferred losses assumed upon Spin-off.

(a)	The 2011 amount excludes $8 million ($5 million net of tax) of deferred losses assumed upon Spin-off.

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NM	Not meaningful. During 2013, an amendment to one of the Company's business unit's pension plans, the Xylem Standard Hourly Bargaining Unit Pension Plan, modified the benefit formula. Similar to all other U.S. pension plans, pension benefits for future service will be based on years of service and not impacted by future compensation increases.

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•	Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

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Level 2 inputs are other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices (in non-active markets or in active markets for similar assets or liabilities), inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•	Level 3 inputs are unobservable inputs for the assets or liabilities.

•

Equity securities — Equities (including common and preferred shares, domestic listed and foreign listed, closed end mutual funds and exchange traded funds) are generally valued at the closing price reported on the major market on which the individual securities are traded at the measurement date. Equity securities held by the Company that are publicly traded in active markets are classified within Level 1 of the fair value hierarchy.

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•

Fixed income — United States government securities are generally valued using quoted prices of securities with similar characteristics. Corporate bonds and notes are generally valued by using pricing models (e.g. discounted cash flows), quoted prices of securities with similar characteristics or broker quotes. Fixed income securities are generally classified in Level 2 of the fair value hierarchy, however, bond funds listed on active markets are classified in Level 1.

•

Hedge funds — Hedge funds are pooled funds that employ a range of investment strategies including equity and fixed income, credit driven, macro and multi oriented strategies. The valuation of limited partnership interests in hedge funds may require significant management judgment. The NAV reported by the asset manager is adjusted when it is determined that NAV is not representative of fair value. In making such an assessment, a variety of factors is reviewed, including, but not limited to, the timeliness of NAV as reported by the asset manager and changes in general economic and market conditions subsequent to the last NAV reported by the asset manager. Depending on how these investments can be redeemed and the extent of any adjustments to NAV, hedge funds are classified within either Level 2 (redeemable within 90 days) or Level 3 (redeemable beyond 90 days) of the fair value hierarchy.

•

Private equity — Private equity includes a diversified range of strategies, including buyout funds, distressed funds, venture and growth equity funds and mezzanine funds. The valuation of limited partnership interests in private equity funds may require significant management judgment. The NAV reported by the asset manager is adjusted when it is determined that NAV is not representative of fair value. In making such an assessment, a variety of factors is reviewed, including, but not limited to, the timeliness of NAV as reported by the asset manager and changes in general economic and market conditions subsequent to the last NAV reported by the asset manager. These funds are generally classified within Level 3 of the fair value hierarchy.

•	Insurance contracts and other — Primarily comprised of insurance contracts and cash. Insurance contracts are valued at book value, which approximates fair value, and is calculated using the prior year balance adjusted for investment returns and cash flows. Cash and cash equivalents are held in accounts with brokers or custodians for liquidity and investment collateral.

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(a)	Other includes treatment equipment, analytical instrumentation, heat exchangers, valves and controls.

(a)	Corporate and other consists of items pertaining to our corporate headquarters function, which principally consist of deferred tax assets and certain property, plant and equipment.

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WHEREAS:	2

INTERPRETATION AND DEFINITIONS	3

ARTICLE 1	16

ARTICLE 2	22

ARTICLE 3	22

ARTICLE 4	24

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ARTICLE 5	28

ARTICLE 6	30

A. PROJECT UNDERTAKINGS	30

B. GENERAL UNDERTAKINGS	31

ARTICLE 7	36

ARTICLE 8	38

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ARTICLE 9	41

ARTICLE 10	42

ARTICLE 11	44

ARTICLE 12	45

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(1)

The Borrowers have stated that they are undertaking, through their direct and/or indirect subsidiaries, a project of research, development and innovation related to pumps, analytical instruments, flow control systems and related automation during the period of 2013-2016, such activities to be carried out at its research and development facilities in Sweden, Germany, Italy, the United Kingdom, Austria, Norway and Hungary as more particularly described in the technical description (the "Technical Description") set out in Schedule A (the "Project").

(2)	The total cost of the Project, as estimated by the Bank, is EUR 247,300,000 (two hundred and forty seven million three hundred thousand euros) and the Borrowers have stated that they intend to finance the Project as follows:

(3)	In order to fulfil the financing plan set out in Recital (2), the Borrowers have requested from the Bank a credit equivalent to EUR 120,000,000 (one hundred and twenty million euros) in aggregate.

(4)

The Bank, considering that the financing of the Project falls within the scope of its functions, and having regard to the statements and facts cited in these Recitals, has decided to give effect to the Borrowers’ request providing to them a credit in an amount equivalent to EUR 120,000,000 (one hundred and twenty million euros) in aggregate under this Finance Contract (the "Contract"); provided that the amount of the Bank loan shall not, in any case, exceed 50% (fifty per cent) of the total cost of the Project set out in Recital (2).

(5)	The board of managers of each of the Borrowers has authorised the borrowing of the sum of EUR 120,000,000 (one hundred and twenty million euros) in aggregate represented by this credit on the terms and conditions set out in this Contract and in Annex I.

(6)	The financial obligations of the Borrowers under this Contract are to be guaranteed by the Guarantor under a guarantee and indemnity (the "Guarantee") by execution of a guarantee and indemnity agreement in form and substance satisfactory to the Bank (as amended and restated on or about the Restatement Date) (the "Guarantee Agreement").

(7)	The Statute of the Bank provides that the Bank shall ensure that its funds are used as rationally as possible in the interests of the European Union; and, accordingly, the terms and conditions of the Bank's loan operations must be consistent with relevant EU policies.

(8)	The Risk-Sharing Finance Facility, in pursuance of a joint initiative between the Bank and the European Commission, is intended as a new Bank financing instrument, to finance, inter alia, research projects and research infrastructures under the 7th framework programme of the European Union for Research and Technological Development (2007-2013).

(9)	The Bank considers that access to information plays an essential role in the reduction of environmental and social risks, including human rights violations, linked to the projects it finances. The Bank has therefore established its transparency policy, the purpose of which is to enhance the accountability of the Bank's group

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(a)	Interpretation

(i)	References in this Contract to Articles, Recitals, Schedules and Annexes are, save if explicitly stipulated otherwise, references respectively to articles of, and recitals, schedules and annexes to this Contract.

(ii)

References in this Contract to "law" mean any law (including any common or customary law) and any treaty, constitution, statute, legislation, decree, normative act, rule, regulation, judgement, order, writ, injunction, determination, award or other legislative or administrative measure or judicial or arbitral decision in any jurisdiction which has the force of law or the compliance with which is in accordance with general practice in such jurisdiction.

(iii)	References in this Contract to a provision of law are references to that provision as amended or re-enacted.

(iv)	References in this Contract to any other agreement or instrument are references to that other agreement or instrument as amended, novated, supplemented, extended or restated.

(v)	In this Contract "including" and "include" shall be deemed to be followed by "without limitation" where not so followed.

(vi)	In this Contract the headings and Table of Contents are inserted for convenience of reference only and shall not affect the interpretation of this Contract.

(vii)	Words imparting the plural shall include the singular and vice versa.

(viii)	In this Contract, references to "Subsidiary" and "Group" shall at all times include each of the Borrowers.

(ix)	In this Contract, references to the "relevant Borrower" in relation to a Tranche or proposed Tranche shall mean the borrower of, or proposed borrower of that Tranche or the proposed Tranche.

(x)	In this Contract, references to "date of this Contract" mean the date of the Original Finance Contract

(b)	Definitions

(a)	16h00 Luxembourg time on the day of delivery, if the notice is delivered by 14h00 Luxembourg time on a Business Day; or

(b)	11h00 Luxembourg time on the next following day which is a Business Day, if the notice is delivered after 14h00 Luxembourg time on any such day or is delivered on a day which is not a Business Day.

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(a)	without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of:

(i)	Consolidated Interest Expense for such period;

(ii)	consolidated income tax expense for such period;

(iii)	all amounts attributable to depreciation for such period and amortization of intangible and capitalized assets for such period;

(iv)	any losses during such period attributable to the disposition of assets other than in the ordinary course of business;

(v)	any other extraordinary non-cash charges for such period;

(vi)	any non-cash expenses for such period resulting from the grant of stock options or other equity-based incentives to any director, officer or employee of the Guarantor or any Subsidiary;

(vii)	any losses attributable to early extinguishment of Financial Indebtedness or obligations under any hedging agreement;

(viii)	any unrealised non-cash losses for such period attributable to accounting in respect of any hedging agreements;

(ix)	the cumulative effect of changes in accounting principles; and

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(x)	any fees and expenses for such period in relation to the Finance Documents,

(b)	without duplication and to the extent included in determining such Consolidated Net Income:

(i)	any gains during such period attributable to the disposition of assets other than in the ordinary course of business;

(ii)	any other extraordinary non-cash gains for such period;

(iii)	any gains attributable to the early extinguishment of Financial Indebtedness or obligations under any hedging agreement;

(iv)	any unrealized non-cash gains for such period attributable to accounting in respect of hedging agreements;

(v)	the cumulative effect of changes in accounting principles; and

(vi)	any cash payments made during such period with respect to noncash items added back (or that would have been added back had the Contract been in effect) in computing Consolidated EBITDA for any prior period.

(a)	the book amount of all segregated intangible assets, including such items as goodwill, trademarks, trademark rights, trade names, trade name rights, copyrights, patents, patent rights and licenses and unamortized debt discount and expense less unamortized debt premium;

(b)	all depreciation, valuation and other reserves;

(c)	current liabilities;

(d)	any minority interest in the shares of stock (other than Preferred Stock) and surplus of Subsidiaries; and

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(e)	deferred income and deferred liabilities.

(a)	the rating assigned to the Guarantor's most recent unsecured and unsubordinated medium or long term debt;

(b)	the Long Term Issuer Credit Rating (or equivalent) defined as such by Standard and Poor's Financial Services LLC or its successor;

(c)	the Corporate Credit Rating (or equivalent) defined as such by Standard and Poor's Financial Services LLC or its successor;

(d)	the Long Term Issuer Default Rating (or equivalent) defined as such by Fitch Ratings Limited or its successor; or

(e)	the Long Term Issuer Rating (or equivalent) defined as such by Moody's Investor Services, Inc. or its successor,

-	the Relevant Interbank Rate (one month rate) less 0.125% (12.5 basis points), unless this value is less than zero, in which case it will be set at zero.

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(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 this Contract; 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 either the Bank or a Borrower preventing that party:

(i)	from performing its payment obligations under this Contract; or

(ii)	from communicating with other parties,

(a)	fauna and flora;

(b)	soil, water, air, climate and the landscape; and

(c)	cultural heritage and the built environment,

(a)	EU law, standards and principles;

(b)	national laws and regulations; and

(c)	applicable international treaties,

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(a)	Payment Dates chosen in accordance with the provisions of Article 3.01A;

(b)	the preferred repayment schedule chosen in accordance with Article 4.01; and

(c)	any further Interest Revision/Conversion Date chosen in accordance with Article 3.01A.

(a)	there are, in the reasonable opinion of the Bank, events or circumstances adversely affecting the Bank's access to its sources of funding;

(b)	in the opinion of the Bank, funds are not available from its ordinary sources of funding in order to adequately fund a Tranche in the relevant currency and/or for the relevant maturity and/or in relation to the reimbursement profile of such Tranche;

(c)	in relation to a Tranche in respect of which interest is or would be payable at a Floating Rate:

(A)	the cost to the Bank of obtaining funds from its sources of funding, as determined by the Bank, for a period equal to the Floating Rate Reference Period of such Tranche (i.e. in the money market) would be in excess of the applicable Relevant Interbank Rate;

(B)	the Bank determines that adequate and fair means do not exist for ascertaining the applicable Relevant Interbank Rate for the relevant currency of such Tranche or it is not possible to determine the Relevant Interbank Rate in accordance with the definition contained in Schedule B.

(a)	the ability of a Borrower or respectively the Guarantor to perform its payment obligations under any Finance Document;

(b)	the business, operations or financial condition of the Group taken as a whole; or

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(c)	the validity or enforceability of the rights or remedies of the Bank under any Finance Document.

(a)

for a Fixed Rate Tranche, the following Relevant Business Day, without adjustment to the interest due under Article 3.01A except for those cases where repayment is made in a single instalment according to Article 4.01B, when the preceding Relevant Business Day shall apply instead to this single instalment and last interest payment and only in this case, with adjustment to the interest due under Article 3.01A; and

(b)	for a Floating Rate Tranche, the next day, if any, of that calendar month that is a Relevant Business Day or, failing that, the nearest preceding day that is a Relevant Business Day, in all cases with corresponding adjustment to the interest due under Article 3.01A.

(a)	made in the ordinary course of trading of the disposing entity; or

(b)	of assets in exchange for other assets comparable or superior as to type, value and quality; or

(c)	made with the prior written consent of the Bank; or

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(d)	where the disposal would not result or is not likely to result in a Material Adverse Change;

(a)	any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

(b)	any payment or close out netting or set-off arrangement pursuant to any hedging transaction entered into by a member of the Group for the purpose of:

(i)	hedging any risk to which any member of the Group is exposed in its ordinary course of trading; or

(ii)	its interest rate or currency management operations which are carried out in the ordinary course of business and for non-speculative purposes only,

(c)	other than any lien imposed pursuant to Section 430(k) of the Code or Section 303(k) of ERISA or a violation of Section 436 of the Code, any lien arising by operation of law and in the ordinary course of trading;

(d)	any Security or Quasi Security over or affecting any asset acquired by a member of the Group after the date of this Contract if:

(i)	the Security or Quasi Security was not created in contemplation of the acquisition of that asset by a member of the Group; and

(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;

(e)	any Security or Quasi Security over or affecting any asset of any company which becomes a member of the Group after the date of this Contract, where the Security or Quasi Security is created prior to the date on which that company becomes a member of the Group, if:

(i)	the Security or Quasi Security was not created in contemplation of the acquisition of that company; and

(ii)	the principal amount secured has not increased in contemplation of or since the acquisition of that company;

(f)	any Security or Quasi Security entered into pursuant to or to secure amounts arising under this Contract or the Guarantee;

(g)	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

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(h)	any Security or Quasi Security created over the receivables transferred under a Permitted Securitisation; or

(i)

any Security or Quasi Security securing indebtedness the principal amount of which (when aggregated with the principal amount of any other indebtedness which has the benefit of Security or Quasi Security given by any member of the Group other than any permitted under paragraphs (a) to (h) above) does not exceed the greater of USD 150,000,000 (or its equivalent in another currency or currencies) and 10% of Consolidated Net Tangible Assets.

(a)	the aggregate outstanding or principal value of the receivables transferred to the securitisation vehicle by all members of that Group under that securitisation, when aggregated with:

(iii)	the aggregate outstanding value of all other receivables transferred under all other Permitted Securitisations which have been completed by that time; and

(iv)	the book value of any Security, sale, transfer or disposal permitted under Article 7.02(e)(z), does not exceed the greater of USD 150,000,000 (one hundred and fifty million dollars) (or its equivalent in another currency or currencies) and 10% of Consolidated Net Tangible Assets; and

(b)	that member of the Group receives at completion of the securitisation, as consideration for the receivables transferred, a cash sum of no less than the market value of the receivables transferred.

(a)	the interest net of the Margin that would accrue thereafter on such amount over the period from the Prepayment Date to the Interest Revision/Conversion Date, if any, or the Maturity Date, if it were not prepaid or cancelled; over

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(b)	the interest that would so accrue over that period, if it were calculated at the Redeployment Rate, less 0.15% (fifteen basis points).

(a)	for EUR, a day on which the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007 (TARGET2) is open for the settlement of payments in EUR; and

(b)	for any other currency, a day on which banks are open for general business in the principal domestic financial centre of the relevant currency.

(a)	EURIBOR for a Tranche denominated in EUR;

(b)	LIBOR for a Tranche denominated in GBP or USD; and

(c)	the market rate and its definition chosen by the Bank and separately communicated to a Borrower, for a Tranche denominated in any other currency. If such other market rate is or becomes at any time less than zero, for the purposes of this contract such other market rate shall be set at zero.

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1.01	Amount of Credit

1.02	Disbursement procedure

1.02A	Tranches

1.02B	Disbursement Offer

(a)	the amount and currency of the Tranche;

(b)	the Scheduled Disbursement Date, which shall be a Relevant Business Day, falling at least 10 (ten) days after the date of the Disbursement Offer and on or before the Final Availability Date;

(c)	the interest rate basis of the Tranche, being: (A) a Fixed Rate Tranche; or (B) a Floating Rate Tranche all pursuant to the relevant provisions of Article 3.01A;

(d)	the interest payment periodicity for the Tranche, in accordance with the provisions of Article 3.01A;

(e)	the first Payment Date for the Tranche;

(f)	the terms for repayment of principal for the Tranche, in accordance with the provisions of Article 4.01;

(g)	the first and last repayment dates of principal for the Tranche;

(h)	the Interest Revision/Conversion Date, if requested by a Borrower, for the Tranche;

(i)	for a Fixed Rate Tranche, the Fixed Rate and for a Floating Rate Tranche the Spread, applicable until the Interest Revision/Conversion Date, if any, or until the Maturity Date; and

(j)	the Disbursement Acceptance Deadline.

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1.02C	Disbursement Acceptance

(a)	by the IBAN code (and appropriate format in line with local banking practice) and SWIFT BIC of the relevant Borrower's bank account to which disbursement of the Tranche should be made in accordance with Article 1.02D; and

(b)	by evidence of the authority of the person or persons authorised to sign the Disbursement Acceptance and the specimen signature of such person or persons or a declaration by the relevant Borrower that no change has occurred in relation to the authority of the person or persons authorised to sign Disbursement Acceptances under this Contract.

1.02D	Disbursement Account

1.03	Currency of disbursement

1.04	Conditions of disbursement

1.04A	First Tranche

(a)	evidence that the execution of this Contract by each Borrower has been duly authorised and that the person or persons signing the Contract on behalf of each Borrower is/are duly authorised to do so together with the specimen signature of each such person or persons;

(b)	evidence that the Borrowers have obtained all necessary Authorisations required in connection with this Contract and the Project or, if none are required, a declaration by the Borrowers, signed by a person

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(c)	the duly executed Guarantee Agreement;

(d)	evidence that the execution of the Guarantee Agreement by the Guarantor has been duly authorised and that the person or persons signing the Guarantee Agreement on behalf of the Guarantor is/are duly authorised to do so together with the specimen signature of each such person or persons (unless such specimen signatures are provided under paragraph (a) above);

(e)	the duly executed solvency certificate in the form set out in Schedule F, together with evidence that the execution of the solvency certificate by the Borrowers has been duly authorised and that the person or persons signing the solvency certificate on behalf of the Borrowers is/are duly authorised to do so together with the specimen signature of each such person or persons;

(f)	in respect of the Guarantor, a certificate of good standing (or equivalent) issued as of a recent date by the Secretary of State or other appropriate official of the Guarantor's jurisdiction of incorporation, organisation or formation and principal place of business;

(g)	an English law legal opinion of Allen & Overy LLP in relation to enforceability of the Finance Documents (as to English law), governmental consents, registration requirements, stamp duties and choice of law in a form satisfactory to the Bank;

(h)	a Luxembourg law legal opinion of Danielle Kobach, Avocats, Luxembourg in relation to the Borrowers covering, inter alia, status, powers and authority, non-conflict, enforceability (assuming English law enforceability), governmental consents, registration requirements, stamp duties, choice of law and recognition of judgments opinion, in a form satisfactory to the Bank;

(i)	an Indiana law legal opinion of Barnes & Thornburg LLP in relation to the Guarantor covering, inter alia, status, powers and authority, non-conflict, governmental consents, registration requirements, stamp duties, choice of law, recognition of judgements; in a form satisfactory to the Bank;

(j)

a Delaware law legal opinion in relation to (i) choice of law (ii) recognition of judgements (iii) that it is not necessary under the laws of Delaware in order to enable the Bank to enforce its rights against the Guarantor under the Guarantee Agreement or this Contract or by reason of the execution of those documents or the performance by the Bank of its obligations under those documents, that the Bank should be licensed, qualified or otherwise entitled to carry on business in Delaware and (iv) the Bank is not and will not be deemed to be resident, domiciled or carrying on business in Delaware by reason only of the execution, performance and/or enforcement of the Guarantee Agreement or this Contract; in a form satisfactory to the Bank;

(k)	evidence of compliance with Article 6.10;

(l)	evidence that the process agents referred to in Article 11.03 and article 3.9 of the Guarantee Agreement have accepted their appointment; and

(m)	evidence that the Bank has received payment in full of all fees, costs and expenses then due from the Borrowers in relation to this Contract (including the Up-front Fee) and of all fees, costs and expenses then due from the Guarantor in relation to the Guarantee Agreement,

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1.04B	All Tranches

(a)	receipt by the Bank in form and substance satisfactory to it, on or before the date falling 5 (five) Business Days before the Scheduled Disbursement Date for the proposed Tranche, of the following documents or evidence:

(i)	a certificate from both of the Borrowers in the form of Schedule E.1;

(ii)	a certificate from the Guarantor in the form of Schedule E.2;

(iii)	evidence of the authority of the person or persons authorised to sign the certificates under paragraphs (i) and (ii) above and the specimen signature of such person or persons;

(iv)	a copy of any other authorisation or other document, opinion or assurance which the Bank has notified the Borrowers is necessary or desirable in connection with the entry into, delivery and performance of, and the transactions contemplated by, the Contract or the Guarantee Agreement or the validity and enforceability of the same.

(b)	that on the Scheduled Disbursement Date for the proposed Tranche:

(i)	the representations and warranties which are repeated pursuant to Article 6.12 are correct in all material respects; and

(ii)	no event or circumstance which constitutes or would with the passage of time or giving of notice under this Contract constitute:

1.05	Deferment of disbursement

1.05A	Grounds for deferment

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1.05B	Cancellation of a disbursement deferred by 6 (six) months

1.06	Cancellation and suspension

1.06A	Borrower's right to cancel

1.06B	Bank's right to suspend and cancel

(a)

The Bank may, by notice in writing to the Borrowers, suspend and/or cancel the undisbursed portion of the Credit in whole or in part at any time and with immediate effect, upon the occurrence of an event or circumstance mentioned in Article 4.03A or an event or circumstance which would with the passage of time or giving of notice under this Contract constitute an event under Article 4.03A or a Default.

(b)	The Bank may also suspend the portion of the Credit in respect of which it has not received a Disbursement Acceptance with immediate effect in the case that a Market Disruption Event occurs.

(c)	Any suspension shall continue until the Bank ends the suspension or cancels the suspended amount.

1.06C	Indemnity for suspension and cancellation of a Tranche

1.06C(1)	SUSPENSION

1.06C(2)	CANCELLATION

(a)	a Fixed Rate Tranche which is an Accepted Tranche, the relevant Borrower shall indemnify the Bank under Article 4.02B;

(b)	a Floating Rate Tranche which is an Accepted Tranche or any part of the Credit other than an Accepted Tranche, no indemnity is payable.

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(i)	a Fixed Rate Tranche which is an Accepted Tranche upon an Indemnifiable Prepayment Event or pursuant to Article 1.05B, the relevant Borrower shall pay to the Bank the Prepayment Indemnity; or

(ii)	an Accepted Tranche upon an Event of Default, the relevant Borrower shall indemnify the Bank under Article 10.03.

1.07	Cancellation after expiry of the Credit

1.08	Up-front fee

1.09	Non-utilisation fee

(a)	on each March 31, June 30, September 30, December 31; and

(b)	on the Final Availability Date; or, if the Credit is cancelled in full under Article 1.06 prior to the Final Availability Date, on the date of cancellation.

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1.10	Sums due under Article 1

2.01	Amount of Loan

2.02	Currency of repayment, interest and other charges

2.03	Confirmation by the Bank

3.01A	Rate of interest

(a)

if a change in Credit Rating occurs which would result in a change in the Margin, that change (and the resulting change in level of Margin) shall be applied to the Contract to each Tranche with effect from (and including) the Payment Date on which interest in respect of that Tranche is payable next following the date on which the relevant Rating Agency changed the applicable Credit Rating and/or ceased to provide an applicable Credit Rating; and

(b)	if no Rating Agency provides any Credit Rating then the Margin will continue to be the level that applied immediately before there ceased to be any Credit Rating.

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3.01B	Fixed Rate Tranches

3.01C	Floating Rate Tranches

3.01D	Revision or Conversion of Tranches

3.02	Interest on overdue sums

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3.03	Market Disruption Event

(a)	in the case of an Accepted Tranche to be disbursed in EUR, USD or GBP, the rate of interest applicable to such Accepted Tranche until the Maturity Date or the Interest Revision /Conversion Date, if any, shall be the percentage rate per annum which is the sum of:

-	the Margin; and

-

the rate (expressed as a percentage rate per annum) which is determined by the Bank to be the all-inclusive cost to the Bank for the funding of the relevant Tranche based upon the then applicable internally generated Bank reference rate or an alternative rate determination method reasonably determined by the Bank. The relevant Borrower shall have the right to refuse in writing such disbursement within the deadline specified in the notification and shall bear charges incurred as a result, if any, in which case the Bank shall not effect the disbursement and the corresponding Credit shall remain available for disbursement under Article 1.02B. If the relevant Borrower does not refuse the disbursement in time, the parties agree that the disbursement and the conditions thereof shall be fully binding for both parties.

(b)

in the case of an Accepted Tranche to be disbursed in a currency other than EUR, USD or GBP, the Bank shall notify to the relevant Borrower the EUR equivalent to be disbursed on the Scheduled Disbursement Date and the relevant percentage rate as described above under (a) applicable to the Tranche until the Maturity Date or the Interest Revision/Conversion Date if any. The relevant Borrower shall have the right to refuse in writing such disbursement within the deadline specified in the notification and shall bear charges incurred as a result, if any, in which case the Bank shall not effect the disbursement and the corresponding portion of the Credit shall remain available for disbursement under Article 1.02B. If the relevant Borrower does not refuse the disbursement in time, the parties agree that the disbursement in EUR and the conditions thereof shall be fully binding for both parties.

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4.01	Normal repayment

4.01A	Repayment by instalments

(a)	The relevant Borrower shall repay each Tranche by instalments on the Payment Dates specified in the relevant Disbursement Offer in accordance with the terms of the amortisation table delivered pursuant to Article 2.03.

(b)	Each amortisation table shall be drawn up on the basis that:

(i)	in the case of a Fixed Rate Tranche without an Interest Revision/Conversion Date, repayment shall be made annually, semi-annually or quarterly by equal instalments of principal or constant instalments consisting of principal and interest;

(ii)	in the case of a Fixed Rate Tranche with an Interest Revision/Conversion Date or a Floating Rate Tranche, repayment shall be made by equal annual, semi-annual or quarterly instalments of principal;

(iii)	the first repayment date of each Tranche shall be a Payment Date falling not earlier than 60 days from the Scheduled Disbursement Date and not later than the first Payment Date immediately following the fourth anniversary of the Scheduled Disbursement Date of the Tranche; and

(iv)	the last repayment date of each Tranche shall be a Payment Date falling not earlier than 4 (four) years and not later than 12 years from the Scheduled Disbursement Date.

4.01B	Single instalment

4.02	Voluntary prepayment

4.02A	Prepayment option

4.02B	Prepayment indemnity

4.02B(1)	FIXED RATE TRANCHE

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4.02B(2)	FLOATING RATE TRANCHE

4.02C	Prepayment mechanics

(a)	that it confirms the Prepayment Notice on the terms specified by the Bank; or

(b)	that it withdraws the Prepayment Notice.

4.03	Compulsory prepayment

4.03A	Grounds for prepayment

4.03A(1)	PROJECT COST REDUCTION

4.03A(2)	PARI PASSU TO NON-EIB FINANCING

-	such prepayment is not made within a revolving credit facility (save for cancellation of the revolving credit facility); or

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-	such prepayment is not made out of the proceeds of a loan having a term at least equal to the unexpired term of the Non-EIB Financing prepaid; or

-	following such prepayment the aggregate of the outstanding Loan and any other direct loans from the Bank constitutes more than 50% (fifty per cent.) of the aggregate outstanding Non-EIB Financing to the Group,

4.03A(3)	CHANGE OF CONTROL

(a)	a "Change-of-Control Event" occurs if:

(i)	any person or group of persons acting in concert shall have acquired beneficial ownership of more than 30% of the outstanding voting shares of the Guarantor;

(ii)	during any period of 12 consecutive months, commencing after the date of the Contract, individuals who on the first day of such period were directors of the Guarantor (together with any replacement or additional directors who were nominated or elected by a majority of directors then in office) cease to constitute a majority of the board of directors of the Guarantor; or

(iii)	the Guarantor ceases to be the beneficial owner directly, or indirectly through wholly-owned subsidiaries, of the issued share capital of either of the Borrowers; and

(b)	"acting in concert" means acting together pursuant to an agreement or understanding (whether formal or informal).

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4.03A(4)	CHANGE OF LAW

4.03A(5)	ILLEGALITY

4.03B	Prepayment mechanics

4.03C	Prepayment indemnity

4.04	General

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5.01	Day count convention

(a)	in respect of interest and indemnities due under a Fixed Rate Tranche, a year of 360 (three hundred and sixty) days and a month of 30 (thirty) days;

(b)	in respect of interest and indemnities due under a Floating Rate Tranche, a year of 360 (three hundred and sixty) days but 365 (three hundred and sixty five) days (invariable) for GBP and the number of days elapsed;

(c)	in respect of fees, a year of 360 (three hundred and sixty) days (but 365 (three hundred and sixty five) days (invariable) for fees due in GBP) and the number of days elapsed.

5.02	Time and place of payment

5.03	Disruption to Payment Systems

(a)	the Bank may, and shall if requested to do so by a Borrower consult with that Borrower with a view to agreeing with that Borrower such changes to the operation or administration of the Contract as the Bank may deem necessary in the circumstances;

(b)	the Bank shall not be obliged to consult with either Borrower in relation to any changes mentioned in paragraph (a) if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes; and

(c)	the Bank shall not be liable for any damages, costs or losses whatsoever arising as a result of a Disruption Event or for taking or not taking any action pursuant to or in connection with this Article 5.03.

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5.04	Application of sums received

(a)	General

(b)	Partial payments

(i)	first, in or towards payment pro rata of any unpaid fees, costs, indemnities and expenses due under this Contract;

(ii)	secondly, in or towards payment of any accrued interest due but unpaid under this Contract;

(iii)	thirdly, in or towards payment of any principal due but unpaid under this Contract; and

(iv)	fourthly, in or towards payment of any other sum due but unpaid under this Contract.

(c)	Allocation of sums related to Tranches

(i)	In case of:

-	a partial voluntary prepayment of a Tranche that is subject to a repayment in several instalments, the Prepayment Amount shall be applied pro rata to each outstanding instalment; and

-	a partial compulsory prepayment of a Tranche that is subject to a repayment in several instalments, the Prepayment Amount shall be applied in reduction of the outstanding instalments in inverse order of maturity.

(ii)	Sums received by the Bank following a demand under Article 10.01 and applied to a Tranche, shall reduce the outstanding instalments in inverse order of maturity. The Bank may apply sums received between Tranches at its discretion.

(iii)	In case of receipt of sums which cannot be identified as applicable to a specific Tranche, and on which there is no agreement between the Bank and the Borrowers on their application, the Bank may apply these between Tranches at its discretion.

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6.01	Use of Loan and availability of other funds

6.02	Completion of Project

6.03	Increased cost of Project

6.04	Procurement procedure

6.05	Continuing Project undertakings

(a)	Maintenance: maintain, repair and, if necessary, renew all material property forming part of the Project as required to keep it in good working order;

(b)

Project assets: unless the Bank shall have given its prior consent in writing retain title to and possession of all material assets comprising the Project or, as appropriate, replace and renew such assets and maintain the Project in substantially continuous operation in accordance with its original purpose; provided that the Bank may withhold its consent only where the proposed action would prejudice the Bank's interests as lender to either Borrower or would render the Project ineligible for financing by the Bank under its Statute or under Article 309 of the Treaty on the Functioning of the European Union;

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(c)	Insurance: insure all works and property forming part of the Project with insurance companies that maintain a minimum A.M. Best rating of at least A-VIII, which insurance shall include limits and coverages that are usual and customary for business in the same industry and the like financial size and risk profile;

(d)	Rights and Permits: maintain in force all rights of way or use and all material permits, licenses, approvals or authorisations necessary for the execution and operation of the Project; and

(e)	Environment:

(i)	implement and operate the Project in material compliance with Environmental Law;

(ii)	obtain and maintain requisite Environmental Approvals for the Project; and

(iii)	comply with any such Environmental Approvals.

6.06	Disposal of assets

(a)	Except as provided below, a Borrower shall not, and the Guarantor shall procure that no other member of the Group will, either in a single transaction or in a series of transactions whether related or not and whether voluntarily or involuntarily dispose of any part of its assets.

(b)	Paragraph (a) above does not apply to any disposal of assets which is a Permitted Disposal.

6.07	Compliance with laws

(a)	Each Borrower shall, and shall procure that its Subsidiaries will, comply in all material respects with all laws and regulations to which it or they or the Project is subject.

(b)	The Guarantor shall, and shall procure that each Material Subsidiary shall, comply in all material respects with all laws and regulations to which it or they is subject.

6.08	Change in business

6.09	Merger

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6.10	Financial covenants

6.11	Books and records

6.12	General Representations and Warranties

6.12A	General representations and warranties of the Borrowers

(a)	such Borrower is duly incorporated and validly existing with limited liability under the laws of Luxembourg and has power to carry on its business as it is now being conducted and to own its property and other assets;

(b)	such Borrower has the power to execute, deliver and perform its obligations under the Finance Documents to which it is a party and all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same by it;

(c)	subject to due authorisation of the Bank to enter into and perform its obligations under the Finance Documents and the reservations as to matters of law set out in the legal opinions provided to the Bank under Article 1.04A, the Finance Documents to which it is a party constitutes its legally valid, binding and enforceable obligations;

(d)	the execution and delivery of, the performance of its obligations under and compliance with the provisions of the Finance Documents to which it is a party do not and will not:

(i)	contravene or conflict in any material respect with any applicable law, statute, rule or regulation, or any judgement, decree or permit to which it is subject;

(ii)	contravene or conflict with any agreement or other instrument binding upon it which contravention or conflict is reasonably likely to result in a Material Adverse Change;

(iii)	contravene or conflict in any material respect with any provision of its constitutional documents;

(e)	there has been no Material Adverse Change since 1 November 2012;

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(f)	no Default has occurred and is continuing unremedied or unwaived or would result from the disbursement of the Loan;

(g)

no litigation, arbitration, administrative proceedings or investigation against it or any of its subsidiaries is current or to its knowledge is threatened or pending before any court, arbitral body or agency which has resulted or if adversely determined would reasonably be expected to be likely to result in a Material Adverse Change, nor is there subsisting against it or any of its subsidiaries any unsatisfied judgement or award;

(h)	it has obtained all necessary Authorisations required by it in connection with this Contract and in order to lawfully comply with its obligations hereunder, and the Project and all such Authorisations are in full force and effect and admissible in evidence;

(i)	the entry into the Finance Documents to which it is a party is for its intérêt social;

(j)	the entry by such Borrower into the Finance Documents to which it is a party will not violate or infringe any thin capitalisation rules applicable to that Borrower;

(k)	at the date of this Contract (or, in the case of Borrower 2, the Restatement Date), no Security exists over its assets other than Permitted Security;

(l)	its payment obligations under this Contract rank not less than pari passu in right of payment with all other present and future unsecured and unsubordinated obligations under any of its debt instruments except for obligations mandatorily preferred by law applying to companies generally;

(m)	it is in compliance with Article 6.05(e) and to the best of its knowledge and belief (having made due and careful enquiry) no material Environmental Claim has been commenced or is threatened against it;

(n)	it is in compliance with all undertakings under Article 6 and 7;

(o)	it is not required to make any deduction for or on account of tax from any payment it may make under the Finance Documents to the Bank;

(p)	neither it, nor any of its subsidiaries is or is required to be registered as an "investment company" under the US Investment Company Act of 1940;

(q)	it is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the FRB) as in effect from time to time, and no proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock;

(r)

no ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Change. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of FASB ASC Topic 715) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan by an amount that could reasonably be expected to result in a Material Adverse Change and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of FASB ASC Topic 715) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all

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(s)	subject to the reservations as to matters of law set out in the legal opinions provided to the Bank under Article 1.04A, the choice of English law as the governing law of the Finance Documents and the submission to the jurisdiction of the English courts will be recognised and enforced in England.

6.12B	General representations and warranties of the Guarantor

(a)

the Guarantor is a corporation, duly incorporated, organised or formed and in good standing under the laws of its jurisdiction of incorporation and it is duly qualified and in good standing in each other jurisdiction in which the character of its properties or the nature of its business requires such qualification except where the failure to be so qualified or in good standing would not result in a Material Adverse Change;

(b)	the Guarantor has the power to execute, deliver and perform its obligations under the Finance Documents to which it is a party and all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same by it;

(c)	subject to due authorisation of the Bank to enter into and perform its obligations under the Finance Documents and the reservations as to matters of law set out in the legal opinions provided to the Bank under Article 1.04A, the Finance Documents to which it is a party constitutes its legally valid, binding and enforceable obligations;

(d)	the execution and delivery of, the performance of its obligations under and compliance with the provisions of the Finance Documents to which it is a party do not and will not:

(i)	contravene or conflict in any material respect with any applicable law, statute, rule or regulation, or any judgement, decree or permit to which it is subject;

(ii)	contravene or conflict with any agreement or other instrument binding upon it which contravention or conflict is reasonably likely to result in a Material Adverse Change;

(iii)	contravene or conflict in any material respect with any provision of its constitutional documents;

(e)

the latest available consolidated audited accounts of the Group have been prepared in accordance with GAAP and have been approved by its auditors as representing a true and fair view in all material respects of the results of the Group's operations for that year and, as and from the end of the Guarantor's 2013 financial year, without any material change in accounting policies (other than where required by GAAP) from those applied in the immediately previous year;

(f)	there has been no Material Adverse Change since 1 November 2012;

(g)	no Default has occurred and is continuing unremedied or unwaived or would result from the disbursement of the Loan;

(h)	no litigation, arbitration, administrative proceedings or investigation against it or any of its Subsidiaries is current or to its knowledge is threatened or pending before any court, arbitral body or agency which

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(i)	it has obtained all necessary Authorisations required by it in connection with this Contract and in order to lawfully comply with its obligations hereunder, and the Project and all such Authorisations are in full force and effect and admissible in evidence;

(j)	the entry into the Finance Documents to which it is a party is for its corporate benefit;

(k)	at the date of this Contract, no Security exists over its assets or over those of the Group other than Permitted Security;

(l)	its payment obligations under this Contract rank not less than pari passu in right of payment with all other present and future unsecured and unsubordinated obligations under any of its debt instruments except for obligations mandatorily preferred by law applying to companies generally;

(m)	it is in compliance with all undertakings under Article 6 and 7;

(n)	no loss of rating clause or financial covenants exist under any Principal Bank Facility which are more restrictive than the ones contained in the Contract;

(o)	it is not required to make any deduction for or on account of tax from any payment it may make under the Finance Documents to the Bank;

(p)	neither it, nor any of its Subsidiaries is or is required to be registered as an "investment company" under the US Investment Company Act of 1940;

(q)

no ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Change. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of FASB ASC Topic 715) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan by an amount that could reasonably be expected to result in a Material Adverse Change and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of FASB ASC Topic 715) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans by an amount that could reasonably be expected to result in a Material Adverse Change;

(r)	at the date the Guarantor enters into the Guarantee Agreement and after and giving effect to the incurrence of any of the Guarantor's obligations under the Guarantee Agreement, the Guarantor is Solvent; and

(s)	subject to the reservations as to matters of law set out in the legal opinions provided to the Bank under Article 1.04A, the choice of English law as the governing law of the Finance Documents and the submission to the jurisdiction of the English courts will be recognised and enforced in England.

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6.12C	Acknowledgement

6.12D	Repetition

7.01	Guarantee

7.02	Negative pledge and sale / leasebacks

(a)	In this Contract "Quasi-Security" means an arrangement or transaction described in Article 7.02(c) below.

(b)	The Borrowers and the Guarantor shall not, and the Guarantor shall ensure that no other member of the Group will, create or permit to subsist any Security over any of its assets.

(c)

The Borrowers and the Guarantor shall not, and the Guarantor shall ensure that no other member of the Group will, enter into any arrangement or transaction on assets or receivables or money (such as the sale, transfer or other disposal of assets on terms whereby they are or may be leased to or re-acquired by the Borrowers, the Guarantor or any other member of the Group, the sale, transfer or otherwise dispose of any receivables on recourse terms or any arrangement under which money or the benefit of a bank account or other account may be applied or set-off or made subject to a combination of accounts or any preferential arrangement having a similar effect) 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.

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(d)	Paragraphs (b) and (c) above shall not apply to any Security (or, as the case may be, Quasi-Security), which is a Permitted Security.

(e)	The Borrowers and the Guarantor shall not, and the Guarantor 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 either of the Borrowers or the Guarantor or any other member of the Group; or

(ii)	enter into any other preferential arrangement having a similar effect,

(x)	any such sale, transfer or disposal approved by the Bank;

(y)	any such sale, transfer or disposal made to another member of the Group;

(z)

any such sale, transfer or disposal (other than those set out in paragraph (x) or (y) above) of such assets the book value of which (when aggregated with (i) the aggregate book value of Security created or subsisting under paragraph (i) of the definition of Permitted Security; and (ii) the book value of any other such sale, transfer or disposal of such assets not allowed under the subparagraphs (x) or (y) above), does not exceed the greater of USD 150,000,000 (one hundred and fifty million dollars) (or its equivalent in another currency or currencies) and 10% of Consolidated Net Tangible Assets.

7.03	Pari passu ranking

7.04	Clauses by inclusion

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8.01	Information concerning the Project

(a)	deliver to the Bank:

(i)	the information in content and in form, and at the times, specified in Schedule A.2 or otherwise as agreed from time to time by the parties to this Contract; and

(ii)	any such information or further document concerning the financing, procurement, implementation, operation and environmental matters of or for the Project as the Bank may reasonably require within a reasonable time,

(b)	submit for the approval of the Bank without delay any material change to the Project, also taking into account the disclosures made to the Bank in connection with the Project prior to the signing of this Contract, in respect of, inter alia, the price, design, plans, timetable or to the expenditure programme or financing plan for the Project;

(c)	promptly inform the Bank of:

(i)	any action or protest initiated or any objection raised by any third party or any genuine complaint received by a Borrower or any material Environmental Claim that is to its knowledge commenced, pending or threatened against it with regard to environmental or other matters affecting the Project;

(ii)	any fact or event known to a Borrower, after due enquiry, which may substantially prejudice or affect the conditions of execution or operation of the Project;

(iii)	any non-compliance by it with any applicable Environmental Law relevant to the Project; and

(iv)	any suspension, revocation or modification of any Environmental Approval known to a Borrower, after due enquiry,

(d)	A Borrower need not provide information to the Bank under Articles 8.01 or 8.02 if that information has already been provided to the Bank by the other Borrower.

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8.02	Information concerning the Borrowers

(a)	deliver to the Bank:

(i)	as soon as they become available but in any event within 90 days after the end of each of the Guarantor's financial years:

(A)	the Guarantor's consolidated annual report, balance sheet, profit and loss account and auditor's report for that financial year; and

(B)	a Compliance Certificate as set out in Schedule E.3 signed by two directors confirming compliance with Article 6.10 and with evidence of such compliance and related calculations;

(ii)	as soon as they become available but in any event within 45 days after the end of each of the relevant accounting periods:

(A)	the Guarantor's interim consolidated quarterly report, balance sheet and profit and loss account for each of the first three quarters of each of its financial years; and

(B)	a Compliance Certificate as set out in Schedule E.3 signed by two directors confirming compliance with Article 6.10 and with evidence of such compliance and related calculations;

(iii)

as soon as they become available but in any event within 210 days after the end of each of the Borrower's financial years, each Borrower's consolidated annual report, balance sheet, profit and loss account and auditor's report for that financial year together with a Compliance Certificate as set out in Schedule E.3 signed by two managers confirming compliance with Article 6.10 and with evidence of such compliance and related calculations;

(iv)	within 45 days of 30 June and 31 December in each financial year, confirmation from the Borrower or Guarantor of the Group’s current outstanding debt financing, including a breakdown of figures in respect of each borrower;

(v)	promptly upon the issuance thereof, copies of all reports, if any, to or other documents filed by any member of the Group with the SEC under the US Securities Act of 1933 or the US Securities Exchange Act of 1934 (other than on Form S- 8 or 8-A or similar forms) including for the avoidance of doubt the Group 20F SEC Filings;

(vi)	from time to time, such further information on its general financial situation as the Bank may reasonably require,

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(b)	inform the Bank immediately of:

(i)	any material alteration to its articles of incorporation;

(ii)	any fact which obliges it to prepay any Financial Indebtedness;

(iii)	any event or decision that constitutes or may result in the events described in Article 4.03A;

(iv)	any change in any Credit Rating;

(v)	any decision on its part to grant any Security over any of its assets in favour of a third party other than Permitted Security;

(vi)	any relinquishment on its part of any material component of the Project;

(vii)	any fact or event that is reasonably likely to prevent the substantial fulfilment of any obligation of the Borrowers or Guarantor under any Finance Document;

(viii)	any Default having occurred;

(ix)	any investigations by any Governmental Authority concerning the integrity of the members of the Guarantor's or such Borrower's board of directors or managers, to the extent that compliance with this obligation would not be in breach of any law binding on the Guarantor or itself as Borrower (as applicable); and

(x)	any litigation, arbitration or administrative proceedings or investigation which is current, or to its knowledge threatened or pending against any member of the Group which might if adversely determined result in a Material Adverse Change.

8.03	Visits by the Bank

9.01	Taxes, duties and fees

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9.02	Other charges

9.03	Increased costs, indemnity and set-off

(a)

Each Borrower shall pay to the Bank any sums or expenses incurred or suffered by the Bank as a consequence of the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or compliance with any law or regulation made after the date of signature this Contract, in accordance with which (i) the Bank is obliged to incur additional costs in order to fund or perform its obligations under this Contract, or (ii) any amount owed to the Bank under this Contract or the financial income resulting from the granting of the Credit or the Loan by the Bank to the relevant Borrower is reduced or eliminated.

(b)	Without prejudice to any other rights of the Bank under this Contract or under any applicable law, the relevant Borrower shall indemnify and hold the Bank harmless from and against any loss incurred as a result of any payment or partial discharge that takes place in a manner other than as expressly set out in this Contract.

(c)

The Bank may set off any matured obligation due from a Borrower as appropriate, under this Contract (to the extent beneficially owned by the Bank) against any obligation (whether or not matured) owed by the Bank to that Borrower regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Bank may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. If either obligation is unliquidated or unascertained, the Bank may set off in an amount estimated by it in good faith to be the amount of that obligation.

9.04	Currency indemnity

(a)	making or filing a claim or proof against that Borrower; or

(b)	obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

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10.01	Right to demand repayment

10.01A	Immediate demand

(a)	if either Borrower or the Guarantor does not pay on the due date any amount payable pursuant to the Finance Documents at the place and in the currency in which it is expressed to be payable, unless (i) its failure to pay is caused by an administrative or technical error or a Disruption Event and (ii) payment is made within 3 (three) Business Days of its due date;

(b)

if any information or document given to the Bank by or on behalf of either Borrower or the Guarantor or any representation or statement made or deemed to be made by either Borrower or the Guarantor in application of the Finance Documents, or in connection with the negotiation or performance of the Finance Documents is, or proves to have been, incorrect, incomplete or misleading in any material respect;

(c)	if, following any default of a Borrower or the Guarantor or any other member of the Group in relation to any loan, or any obligation arising out of any financial transaction, other than the Loan:

(i)	a Borrower or the Guarantor or any other member of the Group is required or is capable of being required or will, following expiry of any applicable contractual grace period, be required or be capable of being required to prepay, discharge, close out or terminate ahead of maturity such other loan or obligation; or

(ii)	any financial commitment for such other loan or obligation is cancelled or suspended,

(d)	if a Borrower or the Guarantor or any Material Subsidiary is unable to pay its debts as they fall due, or suspends its debts, or makes or, without prior written consent of the Bank, seeks to make a composition with its creditors;

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(e)

if any corporate action, legal proceedings or other procedure or step is taken in relation to or an order is made or an effective resolution is passed for the winding up of a Borrower or the Guarantor or any Material Subsidiary, or if a Borrower or the Guarantor or any Material Subsidiary takes steps towards a substantial reduction in its capital, is declared insolvent or suspends or ceases or resolves or threatens to suspend or to cease to carry on the whole or any substantial part of its business or activities;

(f)	if an encumbrancer takes possession of, or a receiver, liquidator, administrator, administrative receiver or similar officer is appointed, whether by a court of competent jurisdiction or by any competent administrative authority or by any person, of or over, any part of the business or assets of a Borrower or the Guarantor or any Material Subsidiary or any property forming part of the Project;

(g)	if a Borrower or Guarantor or any Material Subsidiary defaults in the performance of any obligation in respect of any other loan granted by the Bank or financial instrument entered into with the Bank;

(h)	if any distress, expropriation, attachment, execution, sequestration or other process is levied or enforced upon:

(i)	the property (other than property forming part of the Project) of the Borrower or the Guarantor or any Material Subsidiary and is not discharged or stayed within 60 (sixty) days and the book value of the property is in excess of USD 50,000,000 (fifty million dollars); or

(ii)	any property forming part of the Project and is not discharged or stayed within 30 (thirty) days;

(i)	if a Material Adverse Change occurs, as compared with Borrower 1’s or the Guarantor's condition at the date of this Contract, or as compared with Borrower 2’s condition at the Restatement Date;

(j)	if it is or becomes unlawful for a Borrower or the Guarantor to perform any of its obligations under Finance Documents or any Finance Documents are not effective in accordance with its terms or is alleged by the Borrower or the Guarantor to be ineffective in accordance with its terms; and/or

(k)	if an ERISA Event shall have occurred that, in the opinion of the Bank, when taken together with all other such ERISA Events, could reasonably be expected to result in a Material Adverse Change.

10.01B	Demand after notice to remedy

(a)	if a Borrower fails to comply with any obligation under this Contract not being an obligation mentioned in Article 10.01A or the Guarantor fails to comply with any obligation under the Finance Documents; or

(b)	if any fact related to a Borrower or the Project stated in the Recitals materially alters and is not materially restored and if the alteration either prejudices the interests of the Bank as lender to the Borrower or Borrowers or adversely affects the implementation or operation of the Project,

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10.02	Other rights at law

10.03	Indemnity

10.03A	Fixed Rate Tranches

10.03B	Floating Rate Tranches

10.03C	General

10.04	Non-Waiver

11.01	Governing Law

11.02	Jurisdiction

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11.03	Agent of Service

11.04	Forum conveniens and enforcement abroad

(f)	waives any objection it may have to the English courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Contract; and

(g)	agrees that a judgment or order of an English court in connection with this Contract is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.

11.05	Place of performance

11.06	Evidence of sums due

12.01	Notices to either party

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12.02	Form of notice

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12.03	Contracts (Rights of Third Parties) Act 1999

12.04	Counterparts

12.05	Invalidity

(a)	the legality, validity or enforceability in that jurisdiction of any other term of this Contract or the effectiveness in any other respect of this Contract in that jurisdiction; or

(b)	the legality, validity or enforceability in other jurisdictions of that or any other term of this Contract or the effectiveness of this Contract under the laws of such other jurisdictions.

12.06	Amendments

(a)	Unless otherwise expressly provided in this Contract, any amendment to this Contract shall be made in writing and shall be signed by the parties hereto.

(b)	The Original Finance Contract is amended and restated so that on and from the Restatement Date it is in the form of this Contract.

12.07	Recitals, Schedules and Annex

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-	Energy efficient solutions and energy capture

-	Water and nutrient re-use and recycle

-	Water source protection through the use of analytics and controls facilitating responsible and efficient use;

-	Use of Monitoring and Control systems and intelligent data capture and analysis towards the development knowledge based smart solutions

-	Larger systems of pump stations, treatment trains with high level of integrated technology

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-	Integration of equipment through Monitoring and Control in the building service sector; and

-	Novel service approaches through the use of predictive and remote control and management solutions

-	Radical reduction of equipment complexity in terms of material and number of components and footprint.

1.	Dispatch of information: designation of the person responsible

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2.	Information on the project's implementation

3.	Information on the end of works and first year of operation

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A.	EURIBOR

(a)	in respect of a relevant period of less than one month, the rate of interest for deposits in EUR for a term of one month;

(b)	in respect of a relevant period of one or more whole months, the rate of interest for deposits in EUR for a term for the corresponding number of whole months; and

(c)	in respect of a relevant period of more than one month (but not whole months), the rate resulting from a linear interpolation by reference to two rates for deposits in EUR, one of which is applicable for a period of whole months next shorter and the other for a period of whole months next longer than the length of the relevant period,

B.	LIBOR USD

(a)	in respect of a relevant period of less than one month, the rate of interest for deposits in USD for a term of one month;

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(b)	in respect of a relevant period of one or more whole months, the rate of interest for deposits in USD for a term for the corresponding number of whole months; and

(c)	in respect of a relevant period of more than one month (but not whole months), the rate resulting from a linear interpolation by reference to two rates for deposits in USD, one of which is applicable for a period of whole months next shorter and the other for a period of whole months next longer than the length of the relevant period,

C.	LIBOR GBP

(a)	in respect of a relevant period of less than one month, the rate of interest for deposits in GBP for a term of one month;

(b)	in respect of a relevant period or of one or more whole months, the rate of interest for deposits in GBP for a term for the corresponding number of whole months; and

(c)	in respect of a relevant period of more than one month (but not whole months), the rate resulting from a linear interpolation by reference to two rates for deposits in GBP, one of which is applicable for a period of whole months next shorter and the other for a period of whole months next longer than the length of the relevant period,

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D.	General

(a)	"London Business Day" means a day on which banks are open for normal business in London and "New York Business Day" means a day on which banks are open for normal business in New York.

(b)	All percentages resulting from any calculations referred to in this Schedule will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with halves being rounded up.

(c)	The Bank shall inform the Borrower without delay of the quotations received by the Bank.

(d)

If any of the foregoing provisions becomes inconsistent with provisions adopted under the aegis of EURIBOR FBE and EURIBOR ACI in respect of EURIBOR or of the British Bankers Association (or any successor to that function of the British Bankers Association as determined by the Bank) in respect of LIBOR, the Bank may by notice to the Borrower amend the provision to bring it into line with such other provisions.

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Subject:	Disbursement Offer/Acceptance for the Finance Contract between European Investment Bank Xylem Holdings S.à r.l. and Xylem International S.à r.l. dated l (the "Finance Contract")

(a)	Currency and amount to be disbursed and its EUR equivalent:

(b)	Scheduled Disbursement Date:

(c)	Interest rate basis:

(d)	Interest payment periodicity:

(e)	Payment Dates:

(f)	Terms for repayment of principal:

(g)	The first and last principal repayment dates:

(h)	The Interest Revision/Conversion Date:

(i)	The Fixed Rate or Spread, applicable until the Interest Revision/Conversion Date, if any, or until the Maturity Date:

(a)	A Borrower: [Xylem Holdings S.à r.l.]/[Xylem International S.à r.l.]

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(i)	the indication of the Borrower's bank account (with the appropriate format for the relevant currency in line with local banking practice, including the IBAN and BIC) where disbursement of the Tranche should be made; and

(ii)	evidence of the authority of the person or persons authorised to sign it on behalf of the Borrower and the specimen signature of such person or persons.

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A.	Mechanics of Interest Revision/Conversion

(a)	the Fixed Rate and/or Spread that would apply to the Tranche, or the part thereof indicated in the Interest Revision/Conversion Request pursuant to Article 3.01A; and

(b)	that such rate shall apply until the Maturity Date or until a new Interest Revision/Conversion Date, if any, and that interest is payable quarterly, semi-annually or annually in arrear on designated Payment Dates.

B.	Effects of Interest Revision/Conversion

C.	Non-fulfilment of Interest Revision/Conversion

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Subject:	Amended and Restated Finance Contract between European Investment Bank, Xylem Inc., Xylem Holdings S.à r.l. and Xylem International S.à r.l. dated l (the "Finance Contract")

(a)	we are in compliance with Article 6.10 and attached is evidence of such compliance and related calculations;

(b)	no Security of the type prohibited under Article 7.02 has been created or is in existence;

(c)	we have sufficient funds available to ensure the timely completion and implementation of the Project in accordance with the Technical Schedule;

(d)	there has been no material change to any aspect of the Project or in respect of which we are obliged to report under Article 8.01, save as previously communicated by us;

(e)	no Default or Compulsory Prepayment Event has occurred and is continuing unremedied or unwaived;

(f)	no litigation, arbitration administrative proceedings or investigation is current or to our knowledge is threatened or pending before any court, arbitral body or agency which has resulted or if adversely determined is reasonably likely to result in a Material Adverse Change, nor is there subsisting against us or any of our subsidiaries any unsatisfied judgement or award;

(g)	the representations and warranties to be made or repeated by us under Article 6.12 are true in all material respects; and

(h)	no Material Adverse Change has occurred, as compared with our condition at the date of the Finance Contract.

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Subject:	Disbursement Offer/Acceptance for the Finance Contract between European Investment Bank, Xylem Inc., Xylem Holdings S.à r.l. and Xylem International S.à r.l. dated l (the "Finance Contract") and Deed of Guarantee and Indemnity between European Investment Bank and Xylem Inc. dated l (the "Guarantee Agreement")

(a)	no Security of the type prohibited under Article 7.02 of the Finance Contract has been created or is in existence;

(b)	there has been no material change to any aspect of the Project or in respect of which we are obliged to report under the Finance Documents, save as previously communicated by us in writing;

(c)	no Default or Compulsory Prepayment Event has occurred and is continuing unremedied or unwaived;

(d)	the representations and warranties to be made or repeated by us under the Finance Documents are true in all material respects;

(e)

no litigation, arbitration, administrative proceedings or investigation is current or to our knowledge is threatened or pending before any court, arbitral body or agency which has resulted or if adversely determined is reasonably likely to result in a Material Adverse Change, nor is there subsisting against us or any of our Subsidiaries any unsatisfied judgement or award which has resulted or is reasonably likely to result in a Material Adverse Change;

(f)	no Material Adverse Change has occurred; and

(g)	no event of the type prohibited under Articles 6.06 or 6.09 of the Finance Contract has occurred.

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Subject:	Finance Contract between European Investment Bank, Xylem Inc., Xylem Holdings S.à r.l. and Xylem International S.à r.l. dated l     (the "Finance Contract")

(i)	we are in compliance with Article 6.10. Evidence of such compliance and related calculations are attached to this Compliance Certificate;

(ii)	[insert information regarding asset disposal];

(iii)	no Security of the type prohibited under Article 7.02 has been created or is in existence;

(iv)	[insert table of the Group’s current outstanding debt financing, indicating a breakdown of figures by legal entity.]

(v)	[no Default or Compulsory Prepayment Event has occurred and is continuing unremedied or unwaived. [If this statement cannot be made, this certificate should identify any potential event of default that is continuing and the steps, if any, being taken to remedy it].

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1.

the Company is not subject to bankruptcy (faillite), insolvency, voluntary or judicial liquidation (liquidation volontaire on judiciaire), composition with creditors (concordat préventif de faillite), reprieve from payment (sursis de paiement), controlled management (gestion contrôlée), fraudulent conveyance (actio pauliana), general settlement with creditors, reorganisation or similar laws affecting the rights of creditors generally;

2.	the Company is not, on the date hereof and will not, as a result of its entry into the Loan Agreement be in a state of cessation of payments (cessation de paiements) and has not lost and will not, as a result of its entry into the Loan Agreement lose its commercial creditworthiness (ébranlement de credit);

3.	the transactions contemplated by the Loan Agreement are not caught by articles 445, 446 and 448 of the Luxembourg code of commerce and article 1167 of the Luxembourg civil code (actio pauliana);

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4.	no application has been made by the Company or, as far as the Company is aware, by any other person for the appointment of a commissaire, commissaire surveillant, juge-commissaire, liquidateur, curateur or similar officer pursuant to any insolvency or similar proceedings; and

5.	no application has been made by the Company for a voluntary or judicial winding-up or liquidation.

(i)	the Company is entering into the Loan Agreement in good faith and for the purposes of carrying on its business and there are reasonable grounds for believing that the performance by the Company of the transactions brought into effect or contemplated by the Loan Agreement will be in the best interest and for the corporate benefit of the Company; and

(ii)	the entry into the Loan Agreement by the Company has been made at fair market value and on an arm's length basis.

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6.	the transactions contemplated by the Loan Agreement are not caught by articles 445, 446 and 448 of the Luxembourg code of commerce and article 1167 of the Luxembourg civil code (actio pauliana);

7.	no application has been made by the Company or, as far as the Company is aware, by any other person for the appointment of a commissaire, commissaire surveillant, juge-commissaire, liquidateur, curateur or similar officer pursuant to any insolvency or similar proceedings; and

8.	no application has been made by the Company for a voluntary or judicial winding-up or liquidation.

(i)	the Company is entering into the Loan Agreement in good faith and for the purposes of carrying on its business and there are reasonable grounds for believing that the performance by the Company of the transactions brought into effect or contemplated by the Loan Agreement will be in the best interest and for the corporate benefit of the Company; and

(ii)	the entry into the Loan Agreement by the Company has been made at fair market value and on an arm's length basis.

(a)	For all comparative periods presented above, these periods are prior to the Spin-off from ITT and the issuance of $1.2 billion aggregate principal amount of senior notes which were issued in September 2011. Interest on the Senior Notes accrues from September 20, 2011.

(b)	Calculated as 33% of rent expense, which is a reasonable approximation of the interest factor.

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1.	I have reviewed this Annual Report on Form 10-K of Xylem Inc. for the period ended December 31, 2013;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

1.	I have reviewed this Annual Report on Form 10-K of Xylem Inc. for the period ended December 31, 2013;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.