NOW THIS DEED WITNESSES as follows:-

1.  The Guarantor guarantees to the Authority that in the event of a breach of the Agreement by the Service Provider the Guarantor shall subject to the provisions of this Performance Bond satisfy and discharge the damages sustained by the Authority as established and ascertained pursuant to and in accordance with the provisions or by reference to the Agreement and taking into account all sums due or to become due to the Service Provider.  The Authority's statement that there has been a breach of the Agreement shall be final and conclusive for the purposes of this Performance Bond.

2.  The maximum aggregate liability of the Guarantor and the Service Provider under this Performance Bond shall not exceed the sum set out in the Schedule (the "Bond Amount") but subject to such limitation and to clause 4 the liability of the Guarantor shall be co-extensive with the liability of the Service Provider under the Agreement.

3.  The Guarantor shall not be discharged or released by any waiver or alteration of any of the terms conditions and provisions of the Agreement or by any variation in the extent or nature of the Services and no allowance of time by the Authority under or in respect of the Agreement or the Services shall in any way release reduce or affect the liability of the Guarantor under this Performance Bond.

4.  Whether or not this Performance Bond shall be returned to the Guarantor the obligations of the Guarantor under this Performance Bond shall be released and discharged absolutely upon Expiry (as defined in the Schedule) save in respect of any breach of the Agreement which has occurred and in respect of which a claim in writing containing particulars of such breach has been made upon the Guarantor before Expiry.

5.  The Service Provider having requested the execution of this Performance Bond by the Guarantor undertakes to the Guarantor (without limitation of any other rights and remedies of the Authority or the Guarantor against the Service Provider) to perform and discharge the obligations on its part set out in the Agreement.

6.  This Performance Bond and the benefits thereof shall not be assigned without the prior written consent of the Guarantor and the Service Provider.

7.  This Performance Bond shall be governed by and construed in accordance with the laws of England and only the courts of England shall have jurisdiction hereunder.