EXHIBIT 10.1
▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇
C H A N C E
P U N D E R
EXECUTION VERSION
ZELLSTOFF STENDAL GMBH
and
BAYERISCHE HYPO- UND VEREINSBANK AG
EURO 827,950,000
PROJECT FINANCING FACILITY AGREEMENT
CONTENTS
CLAUSE PAGE
1. Definitions And Interpretation 2
2. The Facility 24
3. Utilisation Of The Facility 26
4. Interest 30
5. Market Disruption 33
6. Repayment 34
7. Voluntary Prepayments 37
8. Cancellation 38
9. Payments 39
10. Equity Reserve Account 46
11. Debt Service Reserve Account 47
12. Illegality 49
13. Increased Costs 50
14. Taxes 51
15. Mitigation 53
16. Representations And Warranties 53
17. Financial Calculations (Wirtschaflichkeitsberechnungen) 61
18. Information Requirements 62
19. Inspection Rights 66
20. Hedging Requirements 67
21. Covenants 67
22. Insurances 77
23. Events of ▇▇▇▇▇▇▇ ▇▇
▇▇. Agent, Arranger And Lenders 87
25. Advisers 93
26. Fees 93
27. Costs and Expenses 94
28. Indemnity And Breakage Costs 96
29. Set-Off 97
30. Pro-Rata Sharing 97
31. Assignments And Transfers 98
32. Sub-Participations 100
33. Calculations And Evidence Of Debt 100
34. Non-Applicability of S 181 BGB 101
35. Form Requirements And Amendments 101
36. Conditions Of The State ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇. Remedies And Waivers, Cumulative Rights, Partial Invalidity 101
38. Notices 102
39. Governing Law 104
40. Jurisdiction 104
41. Counterparts 104
SCHEDULE 1 Drawdown Request 105
SCHEDULE 2 Conditions for the First Drawdown 108
SCHEDULE 3 General Drawdown Conditions 113
SCHEDULE 4 Conditions Subsequent 114
SCHEDULE 5 Lenders and Commitments 116
SCHEDULE 6 Mandatory Cost Formulae 117
SCHEDULE 7 Form of Account Pledge Agreement 120
SCHEDULE 8 Form of Luxemburg Account Pledge Agreement 146
SCHEDULE 9 Security Agreements 163
SCHEDULE 10 State Guarantee 164
SCHEDULE 11 Financing of the Subsidiaries 169
ANNEX 188
SCHEDULE 12 Minimum Insurance Schedule 173
SCHEDULE 13 Sample Table of Content Regarding Quarterly Construction
Progress Reports 181
SCHEDULE 14 Transfer Certificate 183
SCHEDULE 15 Development Costs 187
SCHEDULE 16 Broker's Letter of Undertaking 188
SCHEDULE 17 Archeological Sites 191
SCHEDULE 18 Investment and Financing Plan 192
THIS AGREEMENT is made on 26 August 2002
BETWEEN
(1) ZELLSTOFF STENDAL GMBH, a limited liability company incorporated,
organized and validly existing under the laws of the Federal Republic
of Germany, having its office at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany and registered in the commercial register
(Amtsgericht) of Stendal, number HRB 2446 (the "Borrower");
(2) BAYERISCHE HYPO- UND VEREINSBANK AG, a stock corporation incorporated,
organised and validly existing under the laws of the Federal Republic
of Germany, having its office at Am ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of Germany and registered in the commercial register
(Amtsgericht) of Munich, number HRB 42148 (the "Arranger");
(3) BAYERISCHE HYPO- UND VEREINSBANK AG (the "Agent" and "Security Agent");
and
(4) BAYERISCHE HYPO- UND VEREINSBANK AG, (the "Original Lender").
(together referred to as the "Parties").
WHEREAS
(A) The Borrower is a project company which was created as a limited
liability company (Gesellschaft mit beschrankter Haftung) in 1996 as a
project development company.
(B) The Borrower intends to build and operate a 552,000 tonnes per annum
bleached softwood kraft pulp mill located in Arneburg, Sachsen-Anhalt,
Federal Republic of Germany.
(C) ▇▇▇▇▇▇ International, Inc., a Massachussetts trust incorporated under
the laws of the state of Washington, United States of America
("▇▇▇▇▇▇ International"), RWE Industrie-Losungen GmbH, a limited
liability company incorporated under the laws of the Federal Republic
of Germany ("RWE-IN") and AIG Altmark Industrie AG, a company
incorporated under the laws of the Federal Republic of Germany ("AIG")
and FAHR Beteiligungen AG, a limited liability company incorporated
under the laws of the Federal Republic of Germany have agreed to act
as sponsors of the Project.
(D) The Federal Republic of Germany and the State of Sachsen-Anhalt have
agreed to guarantee 80 % of the claims of the Lenders in connection with
Tranche A and Tranche B (each as defined below) by issuing guarantees in
favour of the Lenders which guarantees will be administered by C&L
Deutsche Revision AG.
(E) The Original Lender has agreed to provide the Borrower with the Facility
(as defined below) subject to the terms and conditions set out
below.
(F) The Borrower acknowledges that the Facility will initially be provided
by the Original Lender but that the Original Lender intend to further
syndicate the Facility.
IT IS AGREED as follows:
1. Definitions And Interpretation
1.1 Definitions
"Acceptance": The date on which the Owner issues the Acceptance
Certificate in accordance with the terms and conditions of the EPC
Contract.
"Advance": A principal sum drawn by the Borrower under this
Agreement or, depending on the context, the principal sum outstanding
as a result of such drawdown.
"Advisers": The Technical Adviser, the Wood Supply Adviser, the Pulp
Market Adviser, the Insurance Adviser and any other consultant agreed from
time to time between the Lenders and the Borrower to act as an adviser
in relation to the Project or this Agreement.
"Agreement": This agreement including all of its schedules.
"Amortisation Schedule": The percentage amortisation Schedule pursuant to
Clause 6.3.1 (Repayments other than First Repayment).
"Annual Debt Service Cover Ratio": On a Repayment Date following the
First Repayment Date, the ratio of the Available Cash Flow for the
twelve (12) calendar months ending on the previous 31 December or 30 June,
as the case may be, to the total amount of interest, principal and fees
payable pursuant to the Financing Documents (adjusted by interest rate
hedging payments or receipts and excluding payments of principal under
Tranche E for that period. In relation to the First Repayment Date,
the relevant period for the Available Cash
Flow and debt servicing will be from Acceptance to the 31 December or
30 June next preceeding the First Repayment Date (or, in the circumstances
referred to in Clause 9.4.3(c)(ii) (Restricted Application), from
Acceptance to the First Repayment Date).
"Assurance of Overall Financing": For the purposes of this Agreement,
the overall financing is assured if in respect to the Project as a
whole, the Overall Funding Requirements are covered by the Overall
Funding Sources.
"Authority": Any national, supranational, regional or local government
or governmental, administrative, fiscal, judicial, or government-owned
body, department, commission, authority, tribunal, agency or entity, or
any person, whether or not government owned and howsoever constituted
or called, that exercises the functions of a central bank.
"Authorisation": Any consent, registration, filing, agreement,
notarisation, certificate, license, approval, permit, authority or
exemption from, by or with any Authority, whether given by express action
or deemed given by failure to act within any specified time period and all
corporate and creditors' approvals or consents.
"Availability Period": The relevant period mentioned in Clause 2.2
(Availability of Facility).
"Available Cash Flow": In relation to any period, operating revenues
(Umsatzerlose) of the Borrower (including any interest earnings on the
Cash Collateral Accounts, insurance proceeds for loss of revenue or
business interruption and delay liquidated damages under the EPC Contract
and adjusted for any currency or pulp price hedging payments or receipts)
for such period minus all operating costs for such period (for the
avoidance of doubt, excluding depreciation and Financing Costs), Capital
Expenditures (for the avoidance of doubt, excluding capital expenditure
financed by Shareholders' funds standing to the credit of the
Shareholders' Account, or by additional equity contributions or
Shareholder Loans), corporate tax payments and local and other taxes
(except VAT). Revenues in the form of Government Grants and recovery
of VAT are not included in the Available Cash Flow.
"Base Case": A statement of the technical, economic and tax assumptions
relating to the Project in the form of a run of the Financial Model as
updated from time to time.
"Breakage Costs": The costs pursuant to Clause 28.2 (Breakage Costs).
"Business Day": A day (other than a Saturday or Sunday) which is not a
public holiday and on which banks are open for general business in London,
Munich and Frankfurt am Main and:
(a) (in relation to any date for payment or purchase of a sum
denominated in a currency other than the euro) a day on which
banks are open for general business in the financial centre of the
country of such currency; or
(b) (in relation to any date for payment or purchase of a sum
denominated in the euro) any TARGET Day.
"C&L": C&L Deutsche Revision AG, Wirtschaftsprufungsgesellschaft,
Dusseldorf as agent (Mandatar) of the Guarantors.
"Capital Contributions": means the subscription and purchase of
Shares.
"Capital Expenditures": Costs and expenses of a capital nature pursuant
to the generally accepted accounting principles in the Federal Republic
of Germany incurred or to be incurred by the Borrower in the construction
and operation of the Project and in the normal acquisition and/or
replacement (but excluding any replacement cost which has been
confirmed by the relevant insurers as being payable out of insurance
proceeds) of fixed assets, machinery, parts and similar equipment in
relation to the Project according to the Project Budget.
"Cash Collateral Accounts": The Disbursement Account, the Proceeds
Account, the Insurance Account, Equity Reserve Account and the Debt
Service Reserve Account.
"Change of Control":
(a) Any change after Financial Close in the direct or indirect ownership
of the Shares without the Majority Lenders' written consent (such
consent not to be unreasonably withheld or delayed) after which the
aggregate direct or indirect shareholding of ▇▇▇▇▇▇ International
(on a fully diluted basis) no longer is equal to or exceeds 51% of
the voting rights in the Borrower; and/or
(b) any change before Acceptance in the direct or indirect ownership of
the Shares held by RWE-IN or FAHR at Financial Close.
"Commitment": In relation to each Lender, the sum of such Lender's
commitments under the Facility, as specified in Schedule 5 (Lenders and
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Commitments) (as reduced by any assignments/transfers in accordance with
this Agreement) or as specified in the relevant Transfer Certificate(s),
to the extent not cancelled or reduced hereunder.
"Construction Period": The period from the date of commencement of any
of the Works under the EPC Contract up to and including
Acceptance.
"Cost Overruns":
(a) Any Project Construction Costs and Development Costs over and
above those set out in the Investment and Financing Plan;
(b) any Financing Costs, start-up costs and Working Capital Costs
until Acceptance over and above those set out in the Investment
and Financing Plan;
(c) any shortfall in Start-Up Cash Flows below the budgeted amount
therefor as set out in the agreed Base Case delivered pursuant to
Schedule 2 (Conditions for the First Drawdown), paragraph 9; and
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(d) any shortfall in Government Grants determined on or before
Acceptance.
"Debt Service Reserve Account": The accounts (including foreign
currency and investment accounts) of the Borrower established for
the purposes set out in Clause 11 (Debt Service Reserve Account)
and maintained with Bayerische Hypo- und Vereinsbank AG or HVB
Banque Luxembourg Societe Anonyme.
"Derivative Transaction": Any swap agreement, warrant agreement,
futures and forward contracts or similar arrangement with respect
to interest rates, currencies or commodity prices.
"Development Costs": Those development costs, fees and expenses in
connection with the development of the Project incurred prior to
Financial Close and which are listed in Schedule 15 (Development
Costs) hereto. ------------
"Direct Agreement": The contractor's direct agreement on or about
the date hereof and made between the Borrower, RWE-IN, RWE Solutions
AG and the Security Agent.
"Disbursement Account": The account of the Borrower established for
the purposes set out in Clause 9.1 (Disbursement Account) and
maintained with the Agent.
"Drawdown Date": The day an Advance is made.
"Drawdown Request": A request for an Advance pursuant to Schedule 1
(Drawdown Request). ----------
"Environmental Claim": Any claim, notice, prosecution, demand, action,
official warning, abatement or other order (conditional or otherwise)
relating to, or any notification or order requiring compliance with,
any Environmental Law or Environmental Permits.
"Environmental Law": Any law applicable to the Project and the
Borrower which relates to the protection of the environment or harm
to or the protection of human health or the health of animals or
plants.
"Environmental Permits": Any Authorisation required under any
Environmental Law for the construction or operation of the Project
and business of the Borrower conducted on or from the properties owned
or used by the Borrower in connection with the Project.
"EPC Contract": The engineering, procurement and construction agreement
dated 26 August 2002 between RWE-IN and the Borrower.
"EPC Contractor": RWE-IN.
"Equity Reserve Account": The accounts (including foreign currency
and investment accounts) of the Borrower established for the purposes
set out in Clause 10 (Equity Reserve Account) and maintained with
Bayerische Hypo- und Vereinsbank AG or HVB Banque Luxembourg
Societe Anonyme.
"EU-Decision": The decision by the EU-Commission dated 19 June 2002
in respect of the State Guarantee and the Government Grants.
"EU-Equity Test": The EU-equity test as defined in the Financial
Model.
"EURIBOR": In relation to any amount outstanding for a particular
period:
(a) the percentage rate per annum determined by the European
Banking Federation for the relevant period which appears on the
Telerate page Euribor for that period or any other page it
is replaced by at 11.00 am; and
(b) if the Agent is unable to access the relevant screen rate or if
a rate is not available on the relevant screen for the
period, the arithmetic mean (rounded upwards to 4 decimal places)
of the rates (as notified to the Agent) at which each of the
Reference Banks was offered by prime
banks in the European interbank market deposits in euro in such
amount and for such period as of 12.00 noon,
in each case on the Quotation Date for such period. If fewer than two
Reference Banks provide the Agent with notifications for a particular
period, this method of determining EURIBOR will not be used for
that period and Clause 5 (Market Disruption) will apply instead.
"Event of Default": Any of the events mentioned in Clause 23 (Events
of Default).
"Event of Force Majeure": An Event of Force Majeure as defined
in the EPC-Contract.
"Excess Start-up Cash Flows": Any amount of Start-up Cash Flows that
exceeds the budgeted amount therefor as set out in the agreed Base
Case delivered pursuant to Schedule 2 (Conditions for the First
Drawdown), paragraph 9. -----------
"Existing Financial Indebtedness":
(a) the indebtedness under the loan made by Dresdner Bank in the
amount of EUR 12,286,000;
(b) the indebtedness to RWE-IN, AIG and Thyssen Rheinstahl
Technik Projektgesellschaft mbH for ancilliary costs for
which RWE-IN, AIG, Thyssen Rheinstahl Technik GmbH and its
legal successor Thyssen Rheinstahl Technik Projektgesellschaft
mbH have provided funds to the Borrower in connection with the
purchase of the Site, in the amount of not more than
EUR 2,708,339; and
(c) the indebtedness for Shareholder Loans in an amount not
exceeding EUR 55,255,646.
"Facility": The facility comprising Tranche A, Tranche B, Tranche C,
Tranche D1, Tranche D2 and Tranche E pursuant to Clause 2.1
(Granting of the Facility).
"Facility Office": The office or offices notified by a Lender to
the Agent in writing on or before the date it becomes a Lender (or,
following that date, by not less than five (5) days' written
notice) as the office or offices through which it will perform its
obligations under this Agreement.
"Federal Guarantor": The Federal Government of the Federal Republic
of Germany.
"Fees": The fees payable pursuant to Clause 26 (Fees).
"Fee Letter": The fee letter by Bayerische Hypo- und
Vereinsbank AG and addressed to the Borrower dated on or about
the date hereof.
"Final Maturity Date": With respect to:
(a) Tranche A: the first (1st) Repayment Date following the
fifteenth (15th) anniversary of the first Advance under Tranche
A;
(b) ▇▇▇-▇▇▇▇▇▇▇▇ ▇▇, ▇▇ and B3:
for each Sub-Tranche the first (1st) Repayment Date
following the eighth (8th) anniversary of the first
Advance under such Sub-Tranche;
(c) Sub-Tranche B4:
the first (1st) Repayment Date following the fifteenth
(15th) anniversary of the first Advance under Tranche A;
(d) Tranche C: the third (3rd) Repayment Date following the
Scheduled First Repayment Date;
(e) Tranche D1: the third (3rd) Repayment Date following the
Scheduled First Repayment Date;
(f) Tranche D2: the third (3rd) Repayment Date following the
Scheduled First Repayment Date; and
(g) Tranche E: the first (1st) Repayment Date following the
fifth (5th) anniversary of the first Advance under
Tranche A.
"Finance Party": The Agent, the Arranger or a Lender.
"Financial Close": The date on which all conditions precedent to
first drawdown pursuant to Clause 3.3 (Drawdown Conditions) and
3.4 (Drawdown Restrictions) are fulfilled or waived.
"Financial Indebtedness": Without duplication, any indebtedness
for or in respect of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance
credit facility;
(c) any amount raised pursuant to the issue of bonds or the
issue of fixed rate notes dividend debt or any similar
instrument;
(d) the amount of any liability in respect of any lease or
hire purchase contract which would, in accordance with
German generally accepted accounting principles, be treated
as a capital or finance lease;
(e) receivables sold or discounted (other than any receivables to the
extent they are sold on a non-recourse basis);
(f) any amount raised under any other transaction (including any
forward sale or purchase agreement) having the commercial
effect of a borrowing;
(g) any Derivative Transaction entered into in connection with
protection against or benefit from fluctuation in any rate or
price (and, when calculating the value of any Derivative
Transaction, only the marked to market value shall be taken into
account) unless entered into in accordance with the Hedging
Strategy;
(h) any counter-indemnity obligation in respect of a guarantee,
indemnity, surety, standby or documentary letter of credit or any
other instrument issued by a bank or financial institution; and
(i) the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraphs
(a) to (h) above.
"Financial Model": The audited financial model agreed between the
Parties at the time of the signing of this Agreement as amended from
time to time according to the provisions of this Agreement.
"Financing Costs": The interest costs and fees under the Financing
Documents, but excluding during the Pre-Production Period interest
payments on and fees pursuant to Clauses 26.4 (Fees to the Federal
Guarantor) and 26.5 (Fees to the State Guarantor) attributable to
Tranche A Advances.
"Financing Documents": This Agreement, any agreement entered
into with any Permitted Subsidiary in connection with the financing
of the wood supply or logistics aspects of the Project, the Hedging
Agreements, the Security
Agreements, the Shareholders' Undertaking Agreement, the Step-in
-Rights Agreement between SP Holding, RWE-IN, FAHR and the Agent on
or about the date hereof, the RWE Solutions AG Guarantee, any
agreement regarding Shareholder Loans and the corresponding
subordination declarations, the Stand-By Equity Security, the Fee
Letter, any waiver requests, waivers and other binding
notifications, the Direct Agreement, the Parent Company Guarantee,
the advance payment, performance and defects liability guarantee
issued in favour of the Borrower by a first class bank in
respect of the performance of the EPC Contractor under the EPC
Contract, the State Guarantee and any other document in relation to
the financing of the Project.
"First Repayment": bears the meaning ascribed to it in Clause 6.2
(First Repayment).
"First Repayment Date": The date on which the First Repayment is
made in full.
"Government Grants": The grants which will be given as direct
grants (GA-Zuschuss (investment incentives)) by the State of
Sachsen-Anhalt and as Investitionszulagen (tax grants) by the
Federal Republic of Germany, both as approved by the EU-Decision,
for the Project in favour of the Borrower.
"Group": The Borrower and its subsidiaries from time to
time.
"Guarantors": The Federal Guarantor and the State Guarantor in their
function as guarantors under the State Guarantee.
"Hedging Agreements": The agreements to be concluded in
relation to any Derivative Transaction in accordance with
the Hedging Strategy.
"Hedging Counterparty": Bayerische Hypo- und Vereinsbank AG.
"Hedging Strategy": The hedging strategy in relation to the
Facility to be agreed in writing between the Borrower and the Arranger,
as amended from time to time, for the hedging of the interest, currency
and commodity price risks of the Borrower.
"Information Memorandum": The information memorandum relating to the
Project to be sent to other credit institutions for their information
with respect to the syndication of the Facility.
"Infrastructure Agreement": The infrastructure agreement (Vereinbarung
uber die Durchfuhrung von Infrastrukturmabnahmen und die
Bereitstellung
finanzieller Mittel) dated 17 July 2002 between the Borrower and
the city of Arneburg.
"Insurance Account": Account no. 57 53 171, banking code 700 202 70
with the Agent in the name of the Borrower to be maintained for
certain payments by insurers.
"Insurance Adviser": Bankrisk Services ▇▇▇▇▇ Ltd. and its successors
as advisers to the Lenders in relation to insurance issues.
"Intellectual Property Rights": Any patent, trade secret, trademark,
copyright or other proprietary rights or knowhow, licences or
design registrations required in connection with the Project.
"Interest Period": The interest periods pursuant to Clause 4.1
(Interest Period).
"Interest Rate": The interest rate pursuant to Clause 4.2 (Interest
Rate).
"Investment Account": The accounts referred to in Clause 9.2 (Proceeds
Account) maintained with the Agent or HVB Banque Luxembourg Societe
Anonyme in the name of the Borrower.
"Investment and Financing Plan": The investment and financing plan
agreed by the Arranger and the Borrower at the time of the
signing of this Agreement in relation to the Project and attached as
Schedule 18 (Investment and Financing Plan).
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"Lenders": The lenders (including the Original Lender), acting
through their respective Facility Offices, and as far as permissible
under this Agreement, their successors, transferees and assignees.
"Majority Lenders": Lenders representing at least 66 2/3% of the total
aggregate of unutilised Commitments and outstanding Advances under
the Facility. When collecting a vote of the Lenders, the voting rights
of a Lender which does not respond within such period as is fixed by the
Agent (being a period of at least five (5) Business Days) or, if
requested by the Borrower, within thirty (30) Business Days from
receipt of any request by the Borrower for a consent, waiver or
amendment under the Financing Documents, will be disregarded in
determining whether the required majority was achieved.
"Mandatory Costs": The percentage rate per annum calculated by the
Agent in accordance with Schedule 6 (Mandatory Cost Formulae).
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"Margin": For:
(a) Tranche A: 0.75 % per annum;
(b) Tranche B: 0.60 % per annum
(for the guaranteed portion of
Tranche B);
1.50 % per annum (for the non
guaranteed portion of Tranche B);
(c) Tranche C: 1.55 % per annum;
(d) Tranches D1
and D2: 1.55 % per annum; and
(e) Tranche E: 1.25% per annum.
If repayments under the guaranteed portions of Tranche A and
Tranche B are deferred according to Clause 6.5 (Deferred Amortisation),
the margin in respect of the portions so deferred will be increased
by 0.10 % per annum until such deferred repayments are paid.
"Material Adverse Effect": An event, occurrence or condition which
has materially impaired, or which will materially impair (as compared
with the situation which would have prevailed but for such event,
occurrence or condition):
(a) the business, operation, property and financial condition
of the Borrower and as a result, the ability of the Borrower to
perform any of its obligations under the Financing Documents; or
(b) the validity or enforceability of the Financing Documents.
An event, occurrence or condition (other than an event, occurrence or
condition affecting a Shareholder itself) shall not be capable of
having a Material Adverse Effect if the risks and consequences of
such event, occurrence or condition are fully borne by a Shareholder
under the terms of any of the Transaction Documents within a period of
thirty (30) days following such event, occurrence or condition.
"Material Insurances": All insurances required to be taken out by the
Borrower pursuant to the Minimum Insurance Schedule as set out in
Schedule 12 (Minimum Insurance Schedule) apart from any employer's
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liability or motor vehicle liability insurance.
"Minimum Insurance Schedule": The Schedule prepared by the Insurance
Adviser and set out in Schedule 12 (Minimum Insurance Schedule),
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relating to insurances during the Construction Period and the
Operation Period.
"Operation Period": The period beginning on the day immediately
following Acceptance.
"Original Financial Statements": The financial statements of the
Borrower as of 31 December 2001.
"Overall Funding Requirements (Gesamtfinanzierungs-Planbedarf)": The
financing requirements for the Project pursuant to the Project
Budget as of the date hereof.
"OveralL Funding Sources (Gesamtfinanzierungsquellen)": The financing
sources for the Project comprising:
(a) Shareholder Contributions;
(b) Government Grants (and, pending receipt thereof, Tranche E);
(c) the Facility; and
(d) Start-up Cash Flows but excluding Excess Start-up Cash Flows.
"Owner's Scope": Has the meaning set out in the EPC-Contract.
"Parent Company Guarantee": The parent company guarantee to be
granted by RWE Solutions AG in favour of the Borrower in respect
of RWE-IN's obligations under the EPC Contract.
"Permitted Disposals":
(a) Annual disposals of assets with an aggregate market value of not
more than EUR 5 million if such disposals do not have a Material
Adverse Effect; and
(b) disposals of assets which are replaced according to the Base Case
or funded by Shareholders' funds.
"Permitted Encumbrances": Encumbrances:
(a) created by operation of law or arising in the ordinary course
of business (including any retention of title arrangements) which
do not secure indebtedness for money borrowed;
(b) existing at Financial Close which will be released following the
first drawdown of an Advance under this Agreement;
(c) created with the Majority Lenders' consent, which consent shall
not be unreasonably withheld, provided all consents required
by the Guarantors have been obtained;
(d) constituting Security; and
(e) additional encumbrances in an aggregate amount of not more than
EUR 1 million.
"Permitted Financial Indebtedness": Financial Indebtedness:
(a) incurred under the Financing Documents;
(b) Existing Financial Indebtedness;
(c) which is unsecured and subordinated to the claims of the
Lenders hereunder;
(d) incurred under Derivatives Transactions permitted under the
Hedging Strategy; and
(e) an additional aggregate amount of not more than EUR 5
million.
"Permitted Investments": Investments made in time deposits (Festgeld)
and short term euro debt securities (and, to the extent that funds are
held in USD, also in USD debt securities) with a maximum duration of 3
years of issuers with a short term A1 rating or better of Standard &
Poor's Corporation or an equivalent rating from such other rating
agency approved by the Agent.
"Permitted Subsidiaries": The two support holding companies, the wood
supply company and the logistic company.
"Post-Acceptance Costs": The amounts of costs specified by the Borrower
in a Drawdown Request, requesting a drawdown at or about the last
day of the Availability Period, as the Project Construction Costs (plus
Cost Overruns in relation thereto) and Working Capital Costs expected to
be incurred in relation to the Project after Acceptance.
"Potential Event of Default": Any event which might reasonably be
expected to become (with the passage of time, the giving of notice,
the making of any determination hereunder or any combination thereof)
an Event of Default.
"Pre-Production Period": The portion of the Construction Period ending
on the date of the first production of saleable pulp from the
Project.
"Proceeds Account": The Revenue Account and the Investment Account.
"Project": The design, development, financing, construction and
operation of a 552,000 tonnes per annum bleached softwood kraft pulp mill
located in Arneburg, near Stendal in Sachsen-Anhalt, Federal Republic
of Germany.
"Project Budget": The financial budget of the Borrower and its
Permitted Subsidiaries in the form delivered to and agreed by the Agent
from time to time pursuant to the provisions of Clause 18.3 (Project
Budget).
"Project Construction Costs": All Project Costs excluding:
(a) Financing Costs, start up costs, Development Costs and Working
Capital Costs; and
(b) recoverable VAT payments on such costs,
but including during the Pre-Production Period interest payments on and
fees pursuant to Clauses 26.4 (Fees to the Federal Guarantor) and 26.5
(Fees to the State Guarantor) attributable to Tranche A Advances.
"Project Contracts": The EPC contract as well as all other contracts in
relation to the planning, development and construction of the
Project as well as the construction of infrastructure, the sale of energy
and the agreement on reserve electricity services.
"Project Costs": All costs of the Borrower in relation to the Project
up to Acceptance (including, in any event, Post-Acceptance Costs) as
shown in the Financial Model or, as the case may be, as approved by the
relevant Advisers.
"Pulp Market Adviser": NLK Consultants Inc., Canada and its
successors as advisers to the Lenders in relation to pulp market
issues.
"Quotation Date": With respect to any Interest Period, the Business Day
which is two (2) Business Days prior to the commencement of such
Interest Period.
"Reference Banks": Bayerische Hypo und Vereinsbank AG, Deutsche Bank
AG and Barclays Bank PLC.
"Related Party": A company or person related to the Borrower, i.e. part
of the "Konzern" within the meaning of Sec. 18 German Act on Stock
Corporation (Aktiengesetz).
"Repayment Date": The First Repayment Date and each subsequent 31 March
and 30 September on which a repayment of any part of any Tranche (or
Sub-Tranche) is scheduled to take place.
"Repayment Schedule": The repayment Schedule pursuant to Clause 6.4
(Repayment Schedule).
"Required Level": EUR 590 million plus 30% of the aggregate Advances
made under Tranche D2, but in no event more than EUR 599 million.
"Responsible Officer": The chief executive officer or general
manager, the senior financial officer and/or the responsible project
manager.
"Revenue Account": The account referred to in Clause 9.2 (Proceeds
Account) maintained with the Agent in the name of the Borrower.
"RWE Solutions AG Guarantee": The guarantee given by RWE Solutions AG in
respect of RWE-IN's obligations under the Shareholders' Undertaking
Agreement.
"Scheduled First Repayment Date": The repayment date set out in Clause
6.2.1 (First Repayment).
"Security": The security from time to time constituted by or pursuant
to the Security Agreements securing all obligations of the Borrower and
its Permitted Subsidiaries in relation to the Project.
"Security Agreements": The security agreements listed in Schedule 9
----------
(Security Agreements), the Security Pooling Agreement and any other
agreement pursuant to which the Borrower, the Shareholders, the
Sponsors or any third party grant security to the Security Agent
and/or the Lenders (other than the State Guarantee), including
security agreements granting security in favour of or on behalf of
the subsidiaries.
"Security Pooling Agreement": The security pooling agreement dated on
or about the date hereof between the Security Agent, the Lenders,
the Hedging Counterparty, the Shareholders, the Sponsors and
the Borrower.
"Share": An ordinary fully paid up share in the Share
Capital.
"Share Capital": The share capital of the Borrower as increased
from time to time in accordance with this Agreement.
"Shareholder Contributions": Contributions of the Shareholders to be
made by way of Capital Contributions or Shareholder Loans in
accordance with the Shareholders' Undertaking Agreement.
"Shareholder Loans": Loans by the Shareholders to the Borrower
made and subordinated in accordance with the terms and conditions
of the Shareholders' Undertaking Agreement.
"Shareholders": As at the date of this Agreement, SP Holding, RWE-IN
and FAHR and thereafter includes any person to whom Shares may
be transferred.
"Shareholders' Account": An account in the name of the Borrower over
which the Lenders have no security and to which the Borrower is
allowed to make payments in accordance with Clauses 9.4.3 (a)
(Priority of Payments) and 9.4.3 (c) (Restricted Application).
"Shareholders' Agreement": The agreement dated on or about the
date hereof between the Shareholders and the Borrower.
"Shareholders' Undertaking Agreement": The agreement of even date
between the Sponsors, the Shareholders, the Borrower and the
Agent.
"Site": That portion of land
(a) more particularly defined in the Land Register (Grundbuch)
of the Stendal Local Court (Amtsgericht) for Arneburg folio
(▇▇▇▇▇) 3129, communal district (Gemarkung) Arneburg, under plot
(Flur) 18, sub-plots (Flurstuck) nos. 90, 105/0 and 107/0, under
plot (Flur) 21, sub-plots (Flurstuck) nos. 52, 36, 44, 35, 40
and 38, under plot (Flur) 22, sub-plot (Flurstuck) no. 5 and
under plot (Flur) 24, sub-plot (Flurstuck) no. 14/8;
(b) more particularly defined in the Land Register (Grundbuch)
of the Stendal Local Court (Amtsgericht) for Arneburg folio
(▇▇▇▇▇) 3215, communal district (Gemarkung) Arneburg, under plot
(Flur) 18, sub-plot (Flurstuck) no. 108 and under plot (Flur)
21, sub-plot (Flurstuck) no. 67;
(c) more particularly defined in the Land Register (Grundbuch)
of the Stendal Local Court (Amtsgericht) for Arneburg folio
(▇▇▇▇▇) 3230,
communal district (Gemarkung) Arneburg, under plot (Flur) 21,
sub-plots (Flurstuck) nos. 1/57 and 33;
(d) more particularly defined in the Land Register (Grundbuch)
of the Osterburg Local Court (Amtsgericht) for ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇▇▇) ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇) ▇▇▇▇▇▇▇▇▇, under plot
(Flur) 1, sub-plot (Flurstuck) 324;
(e) Land Register (Grundbuch) of the Stendal Local Court (Amtsgericht)
for ▇▇▇▇▇▇▇▇▇ (for the time being) folio (▇▇▇▇▇) 542, plot
(Flur) 9, sub-plot (Flurstuck) no. 2/23;
(f) and that portion of land currently leased to the Borrower
pursuant to a lease contract dated 16 May 2002 and made
between AIG and the Borrower (Land Register (Grundbuch) of the
Stendal Local Court (Amtsgericht) for Arneburg folio (▇▇▇▇▇)
3215, communal district (Gemarkung) Arneburg, under plot
(Flur) 21, sub-plot (Flurstuck) no. 61).
"SP Holding": Stendal Pulp Holding GmbH.
"Sponsors": ▇▇▇▇▇▇ International, RWE-IN, AIG and FAHR as
defined in the Recitals to this Agreement and any of their
respective successors.
"Stand-By Equity Security":
(a) an irrevocable letter of credit; or
(b) an unconditional guarantee on first demand,
in each case in form and substance satisfactory to the Agent and issued
by a bank whose long term unsecured credit rating is at least A
from Standard & Poor's Rating Services and A 2 from ▇▇▇▇▇'▇ Investors
Services Inc.; or
(c) an interest bearing cash deposit in the amount required by
the Shareholders' Undertaking Agreement to be held by the
Agent or at HVB Banque Luxembourg Societe Anonyme, such account
to be pledged in favour of the Lenders by entering into an
account pledge agreement providing for similar terms as set out
in Schedule 7 (Form of Account Pledge Agreement) in case the
----------
account is held by the Agent and an account pledge agreement
providing for similar terms as set out in Schedule 8
-----------
(Form of Luxembourg Account Pledge Agreement) in case the
account is held by HVB Banque Luxembourg Societe Anonyme.
"Start-up": bears the meaning ascribed thereto in the EPC
Contract.
"Start-up Cash Flows": Net operating cash flows generated by the
Project until Acceptance in the amount confirmed by an auditor
acceptable to the Agent after Acceptance.
"State Guarantee": The guarantees (Ausfallburgschaften) issued by
the Federal Republic of Germany (for 48 % of the aggregate amount of
Advances under Tranches A and B) and the State of Sachsen-Anhalt
(for 32 % of the aggregate amount of Advances under Tranches A and B)
issued in the form attached to this Agreement as Schedule 10 (State
------------
Guarantee) in favour of the Lenders with respect to this Agreement
including the "Allgemeinen Bestimmungen fur Burgschafts bernahmen
durch die Bundesrepublik Deutschland (Bund) und parallel burgende
Bundeslander" (General Conditions for the issuing of guarantees by
the Federal Republic of Germany and Lander).
"State Guarantor": The State Government of Sachsen-Anhalt.
"Sub-Tranche": a sub-tranche of Tranche B as more particularly
referred to in Clause 2.1.1 (b).
"Supplier": Suppliers and vendors of services and goods to the
Borrower and the EPC Contractor in connection with the EPC
Contract.
"Suspension Notice": The notice pursuant to Clause 5.1 (Market
Disruption).
"Target": The Trans-European Automated Real-time Gross Settlement
Express Transfer payment system.
"Target Balance": The balance targeted to be standing to the credit of
the Debt Service Reserve Account pursuant to Clause 11.3 (Target
Balance).
"Target Day": Any day on which TARGET is open for the settlement of
payments in euro.
"Technical Adviser": JP Management Consulting (Europe) OY, Vantaa,
Finland and its successors as advisers to the Lenders in relation
to technical issues.
"Tranche" or "Tranches": Any or all of Tranche A, Tranche B, Tranche C,
Tranche D1, Tranche D2 and Tranche E as the case may be.
"Tranche A": That part of the Facility granted to the Borrower
pursuant to Clause 2.1.1 (a) (Granting of the Facility).
"Tranche B": That part of the Facility granted to the Borrower
pursuant to Clause 2.1.1 (b) (Granting of the Facility) (comprising
up to 4 separate Sub-Tranches).
"Tranche C": That part of the Facility granted to the Borrower
pursuant to Clause 2.1.1 (c) (Granting of the Facility).
"Tranche D1": That part of the Facility granted to the Borrower
pursuant to Clause 2.1.1 (d) (Granting of the Facility).
"Tranche D2": That part of the Facility granted to the Borrower
pursuant to Clause 2.1.1 (e) (Granting of the Facility).
"Tranche E": That part of the Facility granted to the Borrower
pursuant to Clause 2.1.2 (Granting of the Facility).
"Transaction Documents": The Financing Documents, the Project Contracts
and the Shareholders' Agreement.
"Transfer Certificate": The transfer certificate pursuant to
Schedule 14 (Transfer Certificate).
------------
"Transferee": Any transferee pursuant to Clause 31.2 (Assignments and
Transfers by the Lenders).
"Transferor": Any transferor pursuant to Clause 31.2 (Assignments and
Transfers by the Lenders).
"Wood Supply Adviser": JP Management Consulting (Europe) OY, Vantaa,
Finland and its successors as advisers to the Lenders in relation to
wood supply issues.
"Working Capital Costs": Costs of working capital needed for the
operation of the Group's business, including operating costs, wood,
chemicals and other raw material and consumables stock costs as well
as intermediate - and end products.
"Works": Has the meaning as set out in the EPC Contract.
1.2 INTERPRETATION
Any reference in this Agreement to:
an "affiliate" of a specified person is construed as any other person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the person specified, or who holds
or beneficially
owns 10% or more of the equity interest in the person specified
or 10% or more of any class of voting securities of the person specified;
the "Agent", "Arranger", "Lender" and "Security Agent" is construed so as to
include it and any subsequent successors and permitted transferees and assigns
in accordance with their respective interests;
"assets" includes present and future properties, revenues and rights of every
description;
"calendar quarter" is a reference to the period from (and including) January 1
To (and including) March 31, or from (and including) April 1 to (and including)
June 30, or from (and including) July 1 to (and including) September 30, or from
(and including) October 1 to (and including) December 31;
"continuing", in relation to an Event of Default, is construed as a reference to
An Event of Default which has not been waived in accordance with the terms
Hereof or remedied and, in relation to a Potential Event of Default, one which
Has not been remedied within the relevant grace period or waived in accordance
With the terms hereof;
"disposal" is construed as any sale, lease, transfer, conveyance, assignment or
Other disposal and "dispose" and "disposals" is construed accordingly, but the
Payment of cash permitted hereunder shall not constitute a disposal;
"encumbrance" is construed as a reference to a mortgage, pledge, lien, charge,
hypothecation, security interest, title retention, preferential right or trust
arrangement, obligations under leasing agreements and conditional purchase
agreements, and any other collateral agreement or similar arrangement whether on
existing or future assets (including, without limitation, Sicherungs bereignung,
Sicherungsubtretung, Eigentumsvorbehalt, Pfandrecht, Grundpfand-rechte,
Treuhandvereinbarung, NieBbrauch);
"include" or "including" is construed without limitation and for avoidance of
doubt;
"indebtedness" is construed so as to include any obligation (whether incurred as
principal or as surety) for the payment or repayment of money, whether present
or future, actual or contingent;
a "law" is construed as any law, statute, constitution, binding (bestandskr
aftig) decree, binding (rechtskraftig) judgement, order, treaty, regulation,
legally binding (bestands- oder rechtskraftig) directive, rules or any other
legally
binding (bestands- oder rechtskraftig) legislative measure of any
government, supranational, local government, statutory or regulatory body or
court;
a "month" is a reference to a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next succeeding calendar
month save that:
(d) if any such numerically corresponding day is not a Business Day, such
period shall end on the immediately succeeding Business Day or, if none, it
shall end on the immediately preceding Business Day; and
(e) if there is no numerically corresponding day in that next succeeding
calendar month, that period shall end on the last Business Day in that next
succeeding calendar month,
(and references to "months" shall be construed accordingly);
a "person" is construed as a reference to any person, firm, company,
corporation, government, state or Bundesland, authority, of an entry state or
foreigners or any association or partnership (whether or not having separate
legal personality) of two or more of the foregoing;
"repay" (or any derivative form thereof) is, subject to any contrary indication,
construed to include "prepay" (or, as the case may be, the corresponding
derivative form thereof);
a "subsidiary" of a company or corporation is construed as a reference to any
company:
(a) which is controlled, directly or indirectly, by the first-mentioned
company or corporation and, for these purposes, a company shall be treated as
being controlled by a company if that other company is able to direct its
affairs and/or to control the composition of its board of directors or
equivalent body;
(b) more than half the issued share capital or partnership interest of which
is beneficially owned, directly or indirectly, by the first-mentioned company;
or
(c) which is a subsidiary of another subsidiary of the first mentioned
company;
a "successor" is construed so as to include a permitted assignee or successor in
title of such party and any person who under the laws of its jurisdiction of
incorporation or domicile has assumed the rights and obligations of such party
under this Agreement or to which, under such laws, such rights and obligations
have been transferred;
"tax" is construed so as to include any tax, levy, impost, duty or other charge
of a similar nature (including any penalty or interest payable in connection
with any failure to pay or any delay in paying any of the same);
"VAT" is construed as a reference to value added tax including any similar tax
which may be imposed in place thereof from time to time;
the "WINDING-UP" or "DISSOLUTION" of a company or corporation is construed so as
to include any equivalent or analogous proceedings under the law of the
jurisdiction in which such company or corporation is incorporated or any
jurisdiction in which such company or corporation carries on business including
the seeking of liquidation, winding-up, reorganisation, dissolution,
administration, general arrangement, general adjustment, protection or relief of
debtors.
1.3 CURRENCY SYMBOLS
"EUR" and "euro" mean the single currency unit of the European Union as
constituted by the Treaty on European Union as referred to in EMU legislation
and "euro unit" means the currency unit of the "euro" as defined in EMU
legislation.
1.4 AGREEMENTS AND STATUTES
Any reference in this Agreement to:
1.4.1 this Agreement or any other agreement or document is construed as a
reference to this Agreement or, as the case may be, such other agreement or
document as the same may have been, or may from time to time be, amended,
varied, novated or supplemented; and
1.4.2 a statute or treaty is construed as a reference to such statute or
treaty as the same may have been, or may from time to time be, amended or, in
the case of a statute, re-enacted.
1.5 HEADINGS
Clause, Part and Schedule headings are for ease of reference only.
1.6 SINGULAR AND PLURAL
Words incorporating the singular number include the plural and vice versa.
1.7 TIME
Any reference in this Agreement to a time of day is, unless a contrary
indication appears, a reference to German time.
1.8 LANGUAGE
Where a Financing Document is available in the English and German language, the
German version prevails.
2. THE FACILITY
2.1 Granting of the Facility
Subject to the terms and conditions of this Agreement, the Lenders will provide
the Borrower with a Facility comprising:
2.1.1 a euro denominated term loan facility in an aggregate amount of up to
EUR 668 million divided as follows:
(a) Tranche A in an amount of EUR 464.55 million ("Tranche A");
(b) Tranche B in an amount of EUR 122 million ("Tranche B") containing no
more than four (4) Sub-Tranches in the respective amounts of EUR 20,666,666
("Sub-Tranche B1"), EUR 20,666,667 ("Sub-Tranche B2"), EUR 20,666,667
("Sub-Tranche B3") and EUR 60 million ("Sub-Tranche B4");
(c) Tranche C in an amount of EUR 42 million ("Tranche C");
(d) Tranche D1 in an amount of EUR 9.40 million ("Tranche D1"); and
(e) Tranche D2 that may be drawn in an amount of up to EUR 30 million
("Tranche D2");
2.1.2 a euro denominated revolving loan facility in an aggregate amount of
up to EUR 160 million ("Tranche E").
2.2 Availability of Facility
Provided that the first Advance hereunder is made on or prior to the date
falling three months after the date hereof, the Facility will, subject to the
next following sentence, be available for disbursement, on and in accordance
with the terms hereof, from Financial Close up to and including the date on
which Acceptance is achieved, but no later than the date falling 40 months after
Financial Close.
Tranche D2 will, however, be available up to and including the date falling one
(1) month prior to the First Repayment Date.
2.3 Borrower's Obligations
2.3.1 The obligations of the Borrower to the Agent and each Lender hereunder
are created vis-a-vis each of them as separate and independent obligations
(Teilschuldnerschaft).
2.3.2 Unless otherwise provided for under the Financing Documents, the Agent
and each Lender may separately enforce their rights hereunder.
2.4 Lender's Obligations
The obligations of each Lender under this Agreement are several. Failure of a
Lender to carry out its obligations pursuant to this Agreement in a proper
manner does not relieve any other party of its obligations under this Agreement.
No Lender is responsible for the obligations of any other party under this
Agreement. Joint liability (gemeinschaftliche ▇▇▇▇▇▇) or joint and several
liability (Gesamtschuldnerschaft) is excluded.
2.5 Purpose and Application
The Facility is intended to finance the Project in accordance with the
Investment and Financing Plan. It will exclusively be used by the Borrower for
the following purposes:
2.5.1 Tranche A will only be used by the Borrower for the financing of
Project Construction Costs and Development Costs;
2.5.2 ▇▇▇-▇▇▇▇▇▇▇▇ ▇▇, ▇▇ and B3 will only be used by the Borrower for the
financing of the Financing Costs, up until Acceptance, start-up costs, up until
Acceptance, and other Project Construction Costs and Development Costs not
financed under Tranche A;
2.5.3 Sub-Tranche B4 will only be used by the Borrower for the financing of
Working Capital Costs;
2.5.4 Tranche C will only be used by the Borrower to fund in part the Debt
Service Reserve Account;
2.5.5 Tranche D1 will only be used by the Borrower for the financing of
Project Construction Costs;
2.5.6 Up to and including the date of Acceptance Tranche D2 will only be
used by the Borrower for the financing of Cost Overruns; thereafter it will only
be used by the Borrower for a prepayment of Tranche A (not already funded
pursuant to Clause 2.6.2 (b) (iv) of the Shareholders' Undertaking Agreement) to
the extent necessary to meet the EU-Equity Test; or lastly for the financing of
shortfalls in Government Grants (not already funded pursuant to Clause 2.6.2 (b)
(i) of the Shareholders' Undertaking Agreement or by an earlier drawing under
Tranche D2) as finally calculated one month prior to the First Repayment Date;
and
2.5.7 Tranche E will only be used by the Borrower to bridge finance:
(a) the portion of all costs in relation to the Project for which the
Government Grants are expected to be received; and
(b) recoverable VAT payments on Project Construction Costs.
2.5.8 Without affecting the obligations of the Borrower, neither the
Arranger, the Agent, the Security Agent, the Lenders nor any of them is required
to monitor or verify the application of any amount borrowed pursuant to this
Agreement. The Agent will however require from the Borrower the documents
regarding the application of funds in accordance with Clause 3.4.3 (Drawdown
Restrictions).
2.6 Cash Advances
The Facility will be available only in the form of cash Advances.
2.7 Substitute Lenders
In the event the Commitment of any Lender is terminated, and the Advances of
such Lender are prepaid or may be prepaid, pursuant to Clause 12 or Clause 13,
the Borrower shall have the right to seek a substitute lender (which may
be a Lender) to assume the Commitment and acquire the Advances (or make new
Advances in substitution for Advances prepaid) of such terminating
Lender.
3. UTILISATION OF THE FACILITY
3.1 Delivery of Drawdown Request
The Borrower may from time to time request the making of an Advance by delivery
to the Agent of a duly completed Drawdown Request in form and substance as set
out in Schedule 1 (Drawdown Request) not later than 11:00 a.m. on the fifth
-----------
(5th) Business Day before the Drawdown Date proposed in the Drawdown Request.
3.2 Drawdown Details
Each Drawdown Request delivered to the Agent pursuant to Clause 3.1 (Delivery of
Drawdown Request) is irrevocable and will not be regarded as having been duly
completed unless it specifies:
3.2.1 the proposed Drawdown Date which must be a Business Day within the
Availability Period and in the case of the first Advance hereunder no later than
the date falling three months after the date hereof;
3.2.2 the term of the initial Interest Period;
3.2.3 the amount of any Advance requested which, if it is not for the whole
undrawn amount of the relevant Tranche or Sub-Tranche, must be
(a) with respect to Tranche A a minimum amount of EUR 5 million or any
larger amount which is an integral multiple of EUR 1 million unless it is in
respect of Post-Acceptance Costs; and
(b) with respect to Tranches B, D1 and D2 a minimum amount of EUR 2 million
or any larger amount which is an integral multiple of EUR 1 million unless it is
in respect of Post-Acceptance Costs; and
3.2.4 the specific purposes for which the Advance will be used by the
Borrower and which Tranche it forms part of; Advances made under Tranche B
(other than in respect of Working Capital Costs which will be allocated to
Sub-Tranche B4) will be allocated first to Sub-Tranche B1, then to Sub-Tranche
B2 and lastly to Sub-Tranche B3.
3.3 Drawdown Conditions
3.3.1 The Borrower may only deliver a Drawdown Request to the Agent if:
(a) the conditions precedent listed in Schedule 2 (Conditions for the First
----------
Drawdown) are met with respect to the first Advance and the Agent has notified
the Borrower and the Lenders that it has received all of the documents and other
evidence to be delivered in respect of such conditions precedent and each is in
form and substance satisfactory to the Agent (and the Agent undertakes to
promptly after receipt of such documents and evidence notify the Borrower that
such conditions are met or inform the Borrower of the reasons they are not met);
(b) the conditions precedent listed in Schedule 3 (General Drawdown
-----------
Conditions) are met with respect to any Advance; and
(c) each condition subsequent listed in Schedule 4 (Conditions Subsequent)
----------
has been met to the satisfaction of the Agent within three months of the date
indicated in such Schedule for its satisfaction unless (i) the Agent, acting on
the instruction of Majority Lenders, determines that failure to meet the
relevant condition subsequent will not be materially adverse in relation to the
Borrower's ability to perform its obligations under the Transaction Documents
and/or the validity or enforceability of the Transaction Documents or (ii) such
failure is subsequently remedied.
3.3.2 The Agent may waive each drawdown condition with the Majority Lenders'
consent upon written request by the Borrower to the Agent.
3.4 Drawdown Restrictions
3.4.1 Drawings except under Tranche E will only be permitted to the extent
that amounts standing to (or expected to be standing to) the credit of the
Disbursement Account are not sufficient to meet the relevant funding
requirements for which the Borrower has delivered the Drawdown Request.
3.4.2 Drawings will further only be permitted if:
(a) on the Drawdown Date no Event of Default or Potential Event of Default
has occurred and remains uncured or unwaived or would occur as a result of the
making of the Advance to be drawn down; and
(b) the representations to be made by the Borrower remain true in all
respects,
(c) the Shareholders have made the additional Shareholder Loans which they
are required to make under the last paragraph of Clause 2.6.1 of the
Shareholders' Undertaking Agreement.
3.4.3 Drawings in respect of Project Costs (excluding Financing Costs, costs
for interest payments during the Construction Period and Post-Acceptance Costs)
will further only be permitted against submission to the Agent of a list of all
invoices as well as all detailed documents which the Agent requires in relation
to any item listed thereon evidencing the Project Costs for which the Borrower
has delivered a Drawdown Request or which have been or are to be paid from
equity in accordance with Schedule 2 (Conditions for the First Drawdown),
paragraphs 6(a) and (b), unless such Project Costs are anticipated to be
incurred within one month from the Drawdown Date specified in the respective
Drawdown Request. Upon receipt of the relevant invoice the Borrower shall
deliver to the Agent without undue delay a list of any Project Costs not
previously submitted as well
as those detailed documents which the Agent has requested in relation to any
item listed thereon.
3.4.4 Drawings under Tranche D2 will be permitted only:
(a) if approved by the Agent, and, in the case of , the Technical Adviser
and the Wood Supply Adviser, such approval or, as the case may be, the
procurement of such approval not to be unreasonably withheld or delayed;
(b) up to and including the date of Acceptance to the extent that such Cost
Overruns are not required to be paid by the Shareholders under the Shareholders'
Undertaking Agreement and in any case only so long as the portion thereof
required to be paid by the Shareholders under the Shareholders' Undertaking
Agreement has first been paid;
(c) up to a maximum amount of EUR 5,000,000 and only within 18 months after
Acceptance, with respect to a prepayment of Tranche A (not already funded
pursuant to Clause 2.6.2 (b) (iv) of the Shareholders' Undertaking Agreement) to
the extent necessary to meet the EU-Equity Test; and
(d) for the financing of shortfalls in Government Grants (not already funded
pursuant to Clause 2.6.2 (b) (i) of the Shareholders' Undertaking Agreement or
by an earlier drawing under Tranche D2) as finally calculated at the earlier of
the conclusion of the subsidy audit (Mittelverwendungsnachweis) and one month
prior to the First Repayment Date.
3.4.5 Drawings under Tranche C shall take place on or before Acceptance to
fund the Debt Service Reserve Account and will be permitted only to the extent
that the Agent has received evidence that on or before the date of such Advance
the Shareholders have deposited into the Debt Service Reserve Account the amount
determined pursuant to Clause 2.6.2 (b) (iii) of the Shareholders' Undertaking
Agreement.
3.5 Participation of the Lenders in Advances
3.5.1 Each Lender will contribute to each Advance made hereunder in the
proportion to which its Commitment bears to the total Commitments of all the
Lenders at the relevant time.
3.5.2 The Agent shall no later than three (3) Business Days prior to the
Drawdown Date notify each Lender of the amount of the Advance, the Drawdown
Date, the Interest Period and such Lender's participation in the Advance.
3.5.3 Upon receipt of the written notice pursuant to the previous paragraph,
each Lender will, no later than 10:00 a.m. on the Drawdown Date, credit the
account in the name of the Agent with Bayerische Hypo- und Vereinsbank AG, which
has been notified by the Agent to Lenders at the latest three (3) Business Days
prior to such Drawdown Date, with its participation in the Advance and the Agent
will, with same day value as the Drawdown Date, transfer the amount of the
Advance to the Disbursement Account in accordance with Clause 9.3.1 (Payments
to the Borrower).
4. INTEREST
4.1 Interest Period
4.1.1 Tranche A, Tranche B, Tranche C, Tranche D1 and Tranche D2
(a) Prior to the Scheduled First Repayment Date Interest Periods relating to
Advances made under Tranche A, Tranche B, Tranche C, Tranche D1 or Tranche D2
will be of one (1), three (3) or six (6) months duration (or such lesser
duration as may be necessary so that all Interest Periods in relation to
Advances made under each Tranche will end on the Scheduled First Repayment Date)
at the option of the Borrower provided that any Interest Period relating to an
Advance made under any Tranche commencing at the same time as or during another
Interest Period relating to an Advance made under the same Tranche shall be of
such duration that it shall end on the same date as that other Interest Period.
(b) Interest Periods commencing on or after the Scheduled First Repayment
Date relating to Advances made under Tranche A, Tranche B, Tranche C, Tranche D1
and Tranche D2 will end on a Repayment Date, thus in each case (other than the
first such Interest Period) being of six (6) months duration.
4.1.2 Tranche E: The Interest Periods relating to Advances under Tranche E
will be of one (1), three (3) or six (6) months duration at the option of the
Borrower (or such shorter period as is required in order for the Interest
Periods of the Advances under Tranche E to end on the Scheduled First Repayment
Date).
4.1.3 The Borrower will, where appropriate, give irrevocable notice to the
Agent of the chosen Interest Period in the relevant Drawdown Request or, if the
Advance has already been made, in an irrevocable written notice to be received
by the Agent no later than 11:00 a.m. on the fifth (5th) Business Day prior to
the commencement of that Interest Period. At the latest three (3) Business Days
prior to the commencement of the Interest Period chosen by the Borrower, the
Agent will give notice to the Lenders and the Guarantors of any notice given by
the Borrower pursuant to this Clause 4.1.3.
4.1.4 If the Borrower fails to give notice of an Interest Period, its term
will be one (1) month, or any shorter period as the Agent determines to be
necessary to comply with the requirements pursuant to Clauses 4.1.5.
4.1.5 The first Interest Period with respect to an Advance will commence on
its Drawdown Date, and each subsequent Interest Period will commence on the last
day of its preceding Interest Period.
4.1.6 The Agent may, with the approval of the Borrower, determine other
Interest Periods with respect to any or all Advances if the Agent deems such
other Interest Periods necessary or appropriate to facilitate syndication,
provided that any such other Interest Period will not be shorter than five (5)
Business Days nor longer than six (6) months.
4.1.7 If two or more Interest Periods relating to Advances under the same
Tranche end at the same time, then, on the last day of those Interest Periods,
the Advances to which they relate will be consolidated into and treated as a
single Advance under such Tranche. Advances under Tranche B forming part of any
Sub-Tranche will however, not be consolidated with any Advance forming part of a
different Sub-Tranche.
4.1.8 The Agent will notify the Borrower and the Lenders of the duration of
each Interest Period in respect of each Advance promptly after having determined
the same.
4.2 Interest Rate
The rate of interest applicable to an Advance under any of the Tranches from
time to time during an Interest Period is the percentage rate per annum which is
the aggregate of EURIBOR on the Quotation Date therefor, the applicable Margin
and Mandatory Costs, if any.
4.3 Payment of Interest
The Borrower will pay accrued interest for each Interest Period on the last day
of such Interest Period. Interest will accrue during each Interest Period from
and including the first day of such Interest Period to but excluding the last
day of such Interest Period.
4.4 Notification
The Agent will promptly notify the Borrower and the Lenders of each
determination of the Interest Rate and interest payable in relation to each
Advance. Each determination of the Interest Rate by the Agent will, in the
absence of a manifest error, be conclusive and binding on the Borrower and the
Lenders.
4.5 Default Interest
4.5.1 If the Borrower fails to pay any amount (other than interest) payable
by it hereunder on its due date, interest will accrue on the overdue amount from
the due date up to the date of actual payment at a rate of 1.5 per cent. per
annum above:
(a) in relation to an amount becoming due and payable before expiration of
the Interest Period applicable thereto, for the period until the expiration of
such Interest Period the rate applicable to such overdue amount immediately
prior to the due date; and
(b) in all other cases, the Interest Rate on the most recent Quotation Date
for such periods as the Agent may designate, provided, however, that such
Interest Period will not exceed three (3) months.
4.5.2 If the Borrower fails to pay any interest payable by it hereunder on
its due date, it will make, at the time of payment of all arrears of interest, a
lump sum payment for all arrears of interest in the amount of 1.5 per cent.
above EURIBOR applicable to the respective Interest Period of the amount due and
payable.
4.5.3 The right of the Lenders to compensation for any loss arising from the
default remains unaffected. Payments made under Clause 4.5.2 will however
be deducted from such compensation.
4.5.4 The Agent will promptly notify the Borrower and the Lenders of the
determination of any default interest. Each determination by the Agent will, in
the absence of a manifest error, be conclusive and binding on the Borrower and
the Lenders.
5. MARKET DISRUPTION
5.1 Market Disruption
If, on any Quotation Date in relation to any Advance and any Interest Period:
5.1.1 EURIBOR is to be determined by reference to Reference Banks and at or
about 11.00 a.m. on the Quotation Date for the relevant Interest Period none or
only one of the Reference Banks supplies a rate for the purpose of determining
the EURIBOR for the relevant Interest Period; or
5.1.2 before the close of business in Frankfurt am Main on the Quotation
Date for such Advance, the Agent has been notified by Lenders to whom in
aggregate 50 per cent. or more of the principal of the relevant Advance is owed
that EURIBOR does not, by reason of circumstances affecting the inter-bank
market generally, accurately reflect the cost to them of obtaining matching
deposits for their participation in such Advance,
then, notwithstanding anything contrary in this Agreement, the Agent will
promptly give written notice (the "Suspension Notice") to the Borrower and the
Lenders of such event.
5.2 Alternative Basis of Interest
5.2.1 If Clause 5.1.1 (Market Disruption) applies, the applicable Interest
Period will be one (1), three (3) or six (6) month(s) or such shorter period to
end on any Repayment Date, and the interest rate applicable will be the
weighted average of the interest rates notified by the Lenders to the Agent on
or before the last day of the relevant Interest Period to reflect the cost
of funding (regardless from what sources a Lender may reasonably select
to fund its participation) their participation in the relevant Advance,
expressed as a percentage per annum plus the Margin applicable to such
Advance and Mandatory Costs, if any.
5.2.2 If Clause 5.1.2 (Market Disruption) applies, the interest rate
applicable to the affected Lenders' participation in the relevant
Advance shall be:
(a) in respect of each Lender having notified the Agent in accordance with
Clause 5.1.2 (Market Disruption) the interest rate notified by it to the
Agent pursuant to the principles as set out in Clause 5.2 (Alternative
Basis of Interest); and
(b) in respect of all other Lenders EURIBOR and the Margin applicable to
such Advance and Mandatory Costs, if any.
5.3 Negotiations
During a period of thirty (30) days upon the giving of the Suspension Notice,
the Agent, the Lenders and the Borrower will negotiate in good faith with a view
to agreeing on the rate of interest or a substitute basis for determining the
rate of interest, including without limitation alternative Interest Periods or
alternative methods of determining the interest rate from time to time, (whereby
a margin above the cost of funding of each Lender's participation in the Advance
equivalent to the Margin has to be included) and any such rate of interest or
substitute basis that is agreed will take effect in accordance with its terms
and be binding on each party.
5.4 Prepayment
The Borrower may elect at any time during which an interest rate is determined
pursuant to Clause 5.2 (Alternative Basis of Interest) to give notice to a
Lender in writing through the Agent that it intends to prepay in full such
Lender's participation in each Advance on the last day of the then current
Interest Period for that Advance.
6. REPAYMENT
6.1 General
The Borrower shall repay in full all Advances under each Tranche outstanding on
the Final Maturity Date with respect to such Tranche.
6.2 First Repayment
6.2.1 Not later than the first (1st) 31 March or 30 September immediately
following the fourth (4th) anniversary of the first Advance under Tranche A (the
"Scheduled First Repayment Date"), the Borrower will repay an amount which will
reduce the aggregate Advances outstanding (other than under Tranche E) to no
more than the Required Level (the "First Repayment").
6.2.2 The First Repayment will be applied to the Tranches in the following
order:
(a) first, for the repayment of 70 % of Tranche D2;
(b) second, for the repayment of 70 % of Tranche D1;
(c) third, for the repayment of 70 % of Tranche C;
(d) fourth, for the repayment of part of any Sub-Tranche B1 to B3;
(e) fifth, for the repayment of Tranche A.
6.3 Repayments other than First Repayment
6.3.1 The Amortisation Schedule (expressed as a maximum percentage of the
Required Level to be outstanding at the close of business in Munich on the
relevant Repayment Date) to be delivered pursuant to paragraph 12 of Schedule 2
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(Conditions for the First Drawdown) shall be prepared on the basis that a
minimum Annual Debt Service Cover Ratio, as shown by the Base Case delivered
pursuant to paragraph 9 of Schedule 2 (Conditions for the First Drawdown) of
----------
1.73 is achieved at each Repayment Date assuming repayment of all Advances made
hereunder (other than under Tranche E) in accordance with the following
sub-clauses of this Clause 6.3 (Repayments other than First Repayment).
6.3.2 Following the repayment referred to in Clause 6.2 (First Repayment),
the Borrower will repay the outstanding Advances under Tranche A in 22
instalments semi-annually on each 31 March and 30 September following the
Scheduled First Repayment Date in accordance with the Amortisation Schedule. The
amount of each instalment shall be such that, after the repayments of Tranches
B, C, D1 and D2 required to be made on the relevant Repayment Date pursuant to
the following sub-clauses of this Clause 6.3 (Repayments other than first
Repayment) have been made, the aggregate outstanding amount of all Advances,
other than Advances under Tranche E, (at close of business in Munich on the
relevant Repayment Date) expressed as a percentage of the Required Level does
not exceed the percentage set out in the Amortisation Schedule against that
Repayment Date.
6.3.3 The Borrower will repay the outstanding Advances under each of
Sub-Tranche B1, B2 and B3, following the repayment referred to in Clause 6.2
(First Repayment), in eight (8) equal semi-annual instalments on the eight (8)
Repayment Dates ending on the (1st) first Repayment Date following the eighth
(8th) anniversary of the first Advance under the relevant Sub-Tranche.
6.3.4 The Borrower will repay Sub-Tranche B4 in one amount on the Final
Maturity Date for Sub-Tranche B4.
6.3.5 The Borrower will repay the outstanding Advances under Tranche C,
following the repayment referred to in Clause 6.2, in three (3) equal
semi-annual instalments on the three (3) Repayment Dates falling after the
Scheduled First Repayment Date.
6.3.6 The Borrower will repay the outstanding Advances under Tranche D1 in
three (3) equal semi-annual instalments on the three (3) Repayment Dates falling
after the Scheduled First Repayment Date.
6.3.7 The Borrower will repay the outstanding Advances under Tranche D2 in
three (3) equal semi-annual instalments on the three (3) Repayment Dates falling
after the Scheduled First Repayment Date.
6.3.8 The Borrower will repay the outstanding Advances under Tranche E in an
amount equal to the proceeds of Government Grants and/or VAT refunds on Project
Costs received from time to time and/or, as the case may be, out of one or more
drawings made under Clause 2.6.2 (b) of the Shareholders' Undertaking Agreement
and/or moneys on the Proceeds Account which are available in accordance with
Clause 9.4.3(a) (x) (Application of Moneys on Proceeds Account). Any such
repayment shall be made on the interest payment date(s) relating to any
Advance(s) outstanding under Tranche E next following receipt of such proceeds
or, in relation to the moneys on the Proceeds Account, on the relevant Repayment
Date. Such repayment is, however, not necessary to the extent the Borrower used
the proceeds of Government Grants and/or VAT refunds for purposes corresponding
to the purpose of Tranche E. Any Advances under Tranche E remaining outstanding
at Tranche E's Final Maturity Date will be repaid on that date by the Borrower.
Any such repayment shall be made together with accrued interest thereon and any
other amounts outstanding under this Agreement in respect thereof.
6.4 Repayment Schedule
The Agent will forward to the Borrower and the Lenders with respect to Tranche
A, Tranche B, Tranche C, Tranche D1 and Tranche D2 a repayment Schedule setting
out in accordance with Clause 6.3 (Repayments other than First Repayment) the
amount of the repayment instalments and their respective payment dates at the
latest 15 days prior to the Scheduled First Repayment Date (the "Repayment
Schedule"). The Repayment Schedule will be amended pro rata by the Agent
following the making of any voluntary prepayments or mandatory prepayments
according to this Agreement and will be submitted to the Borrower and the
Lenders upon its amendment.
6.5 Deferred Amortisation
6.5.1 If there are insufficient funds available to meet scheduled
amortisation payments from the Proceeds Account, the Equity Reserve Account and
the Debt Service Reserve Account, deferral of the amortisation of the amounts
outstanding (less any amount payable by the Shareholders pursuant to the proviso
to Clause 2.6.2 (b) (vi) of the Shareholders' Undertaking Agreement), excluding
Advances
under Tranche E, remaining after application of the available funds, the
Borrower may, subject to Clause 6.1 (General), ask for a deferral of the
outstanding amounts without triggering an Event of Default for a period of not
more than six (6) months and subject to the maximum permitted deferred
amortisation amount under any Tranche at any Repayment Date being no greater
than the principal amortisation amount due on such Repayment Date.
6.5.2 Any deferral shall be apportioned rateably across the Tranches due for
repayment on the relevant Repayment Date. On the First Repayment Date any
deferral shall, however, first be apportioned rateably across ▇▇▇▇▇▇▇▇ ▇▇, ▇▇
and C and only then rateably across Tranche A and Sub-Tranches B1, B2 and B3.
6.6 No Other Repayments
The Borrower will not repay all or any part of the Advances except at the times
and in the manner expressly provided for in this Agreement.
7. VOLUNTARY PREPAYMENTS
7.1 General
At any time after the Scheduled First Repayment Date the Borrower may, after
having given to the Agent not less than fifteen (15) Business Days' prior
irrevocable written notice to that effect, prepay any part of the amount
outstanding under Tranche A, Tranche B, Tranche C, Tranche D1 and Tranche D2 on
a Repayment Date in respect of such Tranche without Breakage Costs, subject to a
minimum prepayment amount of EUR 5 million or the total outstanding amount,
whichever is smaller. Voluntary prepayments under this Clause 7.1 (General) will
be applied first to Tranche D2, then to Tranche D1, then to Tranche C, then to
Tranche B (in reduction of Sub-Tranche B1 and then Sub-Tranche B2 and then
Sub-Tranche B3) then to Tranche A and will be applied pro rata over the
remaining instalments of the respective Tranche and/or Sub-Tranche. The
Borrower may, subject to paying Breakage Costs, where applicable, at any time
following the Scheduled First Repayment Date, by submitting at least fifteen
(15) Business Days in advance a written and irrevocable notice thereof, repay on
a Repayment Date any outstanding amounts under Tranche E in whole or in part.
7.2 Prepayment of First Repayment
The Borrower may, by giving not less than seven (7) Business Days' prior
irrevocable and written notice to the Agent, prepay all or from time to time any
part of the First Repayment prior to the Scheduled First Repayment Date. Such
prepayment must fall on the last day of an Interest Period relating to one or
more
Advances having an aggregate principal amount at least equivalent to the amount
of such prepayment.
7.3 Prepayment for meeting of EU-Equity Test
The Borrower shall have the right, effective on the first day of any Interest
Period commencing within 18 months after Acceptance, to prepay any amount
outstanding under Tranche A by drawing an equivalent amount from the Equity
Reserve Account or, if the balance standing to the credit of such account is
insufficient for the purpose, by drawing an amount of up to EUR 5 million under
Tranche D2 to the extent necessary to meet the EU-Equity Test. The Borrower
shall give the Agent at least ten (10) Business Days prior written notice,
specifying the principal amount outstanding under Tranche A to be prepaid, and
the amount to be drawn under the Equity Reserve Account or, as the case may be,
Tranche D2. Any such prepayment made by the Borrower shall satisfy rateably the
remaining obligations of the Borrower to repay Tranche A.
7.4 Scope of Prepayment
All prepayments will be made together with accrued interest on the amount
prepaid and all other amounts, if any, owing by the Borrower to the Lenders
hereunder.
7.5 Notice of Prepayment
Any notice of prepayment given by the Borrower pursuant to this Clause is
irrevocable and will specify the date upon which such prepayment is to be made
and the amount of such prepayment. The Agent will notify the Lenders promptly of
receipt of any such notice.
7.6 No Other Voluntary Prepayments
The Borrower will not voluntarily prepay all or any part of any Advances except
at the times and in the manner expressly provided for in this Agreement.
7.7 No Re-Borrowing
The Borrower will not be entitled to re-borrow any prepaid amount.
8. CANCELLATION
8.1 General
8.1.1 The Borrower may, by giving to the Agent not less than fifteen (15)
days' prior written notice to that effect, without premium or penalty, cancel
the whole or any part of the undrawn Commitments under any Tranche.
8.1.2 Any notice of cancellation given by the Borrower pursuant to this
paragraph will be irrevocable and specify the date upon which such cancellation
is to be made and the amount of such cancellation.
8.2 End of Availability Period; End of Period for first Advance
The unutilised portion (if any) of the Facility will automatically be cancelled
at close of business on the last day of the Availability Period or, if the first
Advance has not been made hereunder on or before the date falling three months
after the date hereof, on such later date unless the Agent acting on the
instructions of all Lenders otherwise notifies the Borrower in writing.
8.3 No Re-borrowing
Cancelled amounts are not available for re-borrowing.
8.4 Reduction of Commitments
Any cancellation will reduce the Lenders' Commitments proportionately across the
Tranches being cancelled.
9. PAYMENTS
9.1 Disbursement Account
9.1.1 The Borrower will open a disbursement account with the Agent at the
latest at Financial Close, such account to be pledged by the Borrower in favour
of the Lenders by entering into an account pledge agreement substantially in the
form set out in Schedule 7 (Form of Account Pledge Agreement).
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9.1.2 The Disbursement Account will be used to deposit
(a) amounts which are disbursed under the Facility (Tranche E) (unless
otherwise provided for in Clause 9.3.2 to 9.3.4),
(b) amounts which are provided by the Shareholders as Shareholder
Contributions up to Acceptance,
(c) Start-Up Cash Flows to the extent they do not exceed the budgeted amount
therefor as set out in the Base Case delivered pursuant to Schedule 2
----------
(Conditions for the First Drawdown), paragraph 9,
(d) material loss or damage insurance proceeds received prior to Acceptance
which will be applied in making good the related loss; and
(e) delayed start-up or business interruption insurance proceeds and/or any
delay liquidated damages under the EPC Contract received, in either case, prior
to Acceptance which will be applied first in or towards any increased costs and
expenses incurred by the Borrower as a result of the related delay.
9.1.3 Save as otherwise specifically provided herein, the Borrower is
entitled to apply any moneys standing to the credit of the Disbursement Account
exclusively, and, in the case of a continuing Event of Default, only with the
Agent's prior written consent, in or towards payment of all due and payable
Project Costs.
9.1.4 Any amount remaining on the Disbursement Account after Acceptance,
except for amounts to be used for the payment of Post-Acceptance Costs, shall be
applied by the Borrower to make a mandatory prepayment of amounts outstanding
under the Facility in accordance with the following provisions:
(a) Any such prepayment shall:
(i) be applied first to Tranche D1, then to Tranche C, then to Tranche D2,
then to Tranche B (in reduction of Sub-Tranche B1 and then Sub-Tranche B2 and
then Sub-Tranche B3) and then to Tranche A;
(ii) be applied pro-rata over the repayment instalments under each Tranche
and Sub-Tranche;
(iii) be effected on the Repayment Date immediately following Acceptance;
and
(iv) reduce each Lender's participation in the Advance outstanding under
each Tranche and/or Sub-Tranche in proportion to such prepayment.
(b) The Repayment Schedule shall be amended by the Agent pursuant to Clause
6.4 (Repayment Schedule).
(c) The Borrower authorises the Agent (on behalf of the Lenders) to debit
the Disbursement Account with any such amount for the purposes of making a
mandatory prepayment pursuant to Clause 9.1.4.
9.2 Proceeds Account
9.2.1 The Borrower will open a current account (Kontokorrentkonto) with the
Agent at the latest at Financial Close, such account to be pledged by the
Borrower in favour of the Lenders by entering into an account pledge agreement
substantially
in the form set out in Schedule 7 (Form of Account Pledge
-----------
Agreement) (the "Revenue Account").
9.2.2 The Revenue Account will be used to collect all revenues and income
generated by the Borrower's business apart from the budgeted Start-up Cash Flows
as set out in the Base Case delivered pursuant to Schedule 2 (Conditions for
----------
First Drawdown) paragraph 9 and Excess Start-up Cash Flows in an amount of up to
EUR 15 million. The Borrower will ensure that all payments to be made by the
respective counterparties to any agreement concluded with the Borrower, apart
from Shareholder Contributions, are made into the Revenue Account.
9.2.3 The Borrower may elect to open a further account with HVB Banque
Luxembourg Societe Anonyme and/or the Agent in respect of investments which may
be made by the Borrower pursuant to Clause 9.2.4 (each an "Investment Account",
together with the Revenue Account, the "Proceeds Account"), such accounts to be
pledged by the Borrower in favour of the Lenders by entering into an account
pledge agreement substantially in the form set out in Schedule 8 (Form of
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Luxembourg Account Pledge Agreement) in respect of the Investment Account
maintained with HVB Banque Luxembourg Societe Anonyme and in the form set out in
Schedule 7 (Form of Account Pledge Agreement) in respect of the Investment
-----------
Account maintained with the Agent. The Borrower will at its own cost provide the
-----
Agent with a legal opinion satisfactory to the Agent and issued by a reputable
Luxembourg law firm in respect of, inter alia, the validity and enforceability
of such Luxembourg account pledge agreement.
9.2.4 The Borrower may invest the balance standing to the credit of the
Revenue Account in Permitted Investments, provided that such Permitted
Investments are deposited in the Investment Account and the maturity of such
Permitted Investments does not conflict with the anticipated payments to be made
by the Borrower pursuant to Clause 9.4.3 (Application of Moneys on Proceeds
Account). To the extent necessary to make payments in accordance with Clause
9.4.3 (Application of Moneys on Proceeds Account), the Borrower will transfer
sufficient funds from the Investment Account to the Revenue Account and will
liquidate any of the Permitted Investments if necessary to meet its payment
obligations.
9.3 PAYMENTS TO OR ON BEHALF OF THE BORROWER
9.3.1 The proceeds of all Advances to be made to the Borrower under this
Agreement will, to the extent not otherwise provided in the following Clauses
9.3.2 and 9.3.4, be made into the Disbursement Account in accordance with
Clause 3.5.3.
The Borrower will procure that until Acceptance all funds in respect of
Shareholder Contributions will be made into the Disbursement Account.
9.3.2 The Borrower authorises the Agent to make payments on behalf of the
Borrower relating to the Financing Costs until Acceptance and costs for interest
payments for Tranche A Advances during the Pre-Production Period directly to the
Lender having incurred such costs.
9.3.3 The Borrower authorises the Agent to make payments on behalf of the
Borrower with respect to the provision of funds to the Debt Service Reserve
Account directly into the Debt Service Reserve Account.
9.3.4 The Borrower relieves the Agent from the restrictions of Sec. 181 BGB
in respect of the authority conferred upon the Agent in Clauses 9.3.2
and 9.3.3.
9.4 PAYMENTS BY THE BORROWER AND THE LENDERS
9.4.1 Time and Currency: Unless otherwise permitted, all payments required
to be made by the Borrower to the Lenders under any Financing Document will be
made in euro to the Agent on the due date therefor not later than 10:00 a.mIf a
payment is due on a day which is not a Business Day, the due date for that
payment will instead be the next Business Day in the same calendar month and, if
there is none, on the immediately preceding Business Day.
9.4.2 Set-off and Retention Rights: All payments required to be made by the
Borrower to the Lenders under any Financing Document (other than the Hedging
Agreements) will be made without set-off or counterclaim.
9.4.3 Application of Moneys on Proceeds Account:
(a) Priority of Payments: The Borrower is entitled to apply any moneys
standing to the credit of the Proceeds Account with the exception of proceeds
from Government Grants and/or VAT refunds on Project Costs applied in accordance
with Clauses 6.3.8 (Repayments other than First Repayment) and 21.1.11 (Payments
and Application of Payments) exclusively in the following order and, in the case
of a continuing Event of Default, only with the Agent's written consent:
(i) first, in or towards payment of all due and payable operating costs,
on-going capital costs, and Working Capital Costs, all as shown in the latest
Project Budget and any scheduled amount then due and payable under the Hedging
Agreement;
(ii) second, in and towards payment of any tax payment and fee for State
Guarantee then due and payable;
(iii) third, in and towards payment of any unpaid costs and expenses of the
Lenders, the Agent and the Security Agent due from the Borrower pursuant to
Clause 27 (Costs and Expenses) and any accrued interest and fees due and payable
to the Lenders hereunder, with the exception of the payments mentioned under
paragraphs 9.4.3 (a) (iv) to 9.4.3 (a) (vii);
(iv) fourth, in or towards payment of any deferred principal then due and
payable to the Lenders under ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇ and
Tranche A (in that order and rateably, other than in respect of any principal
deferred on the First Repayment Date where any principal relating to Tranches A
and B will be repaid first);
(v) fifth, in or towards payment of any principal then due and payable to
the Lenders under ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇ and Tranche C (in that order);
(vi) sixth, at the Final Maturity Date of Tranche E in or towards payment of
any principal due and payable to the Lenders under Tranche E, but not repaid due
to delays in the receipt of Government Grants and/or VAT refunds;
(vii) seventh, in or towards payment of any principal then due and payable
to the Lenders under Tranche B and Tranche A and the net amount of any close-out
or termination sums then due and payable under the Hedging Agreements;
(viii) eighth, in or towards payment of any interest and principal due and
payable under any other Permitted Financial Indebtedness;
(ix) ninth, but only following Acceptance in or towards any payment due and
payable into the Debt Service Reserve Account;
(x) tenth, on a Repayment Date, towards repayment of amounts outstanding
under Tranche E; and
(xi) eleventh, subject to Clause 9.4.3 (c) into the Shareholders' Account
to include any interest payable on any Shareholder Loan.
(b) Authorisation of Agent: The Borrower authorises the Agent (on behalf of
the Lenders) to debit and, to the extent necessary, to liquidate any Permitted
Investments previously purchased with any funds standing to the credit of the
relevant account:
(i) the Proceeds Account with all amounts referred to in Clause 9.4.3 (a)
(ii) (but only regarding the payment of fees in relation to the State Guarantee)
and Clause 9.4.3 (a) (iv) to 9.4.3 (a) (vii) inclusive when due; and
(ii) if the funds in the Proceeds Account are not sufficient to pay any
amounts set out in Clause 9.4.3 (a) (iv) to 9.4.3 (a) (vii) inclusive, to debit
the Equity Reserve Account and then the Debt Service Reserve Account with
any such amount,
and to apply any amount so debited in payment of the relevant amounts.
(c) Restricted Application:
(i) Payments by the Borrower from the Proceeds Account to the Shareholders'
Account pursuant to Clause 9.4.3 (a) (xi) are permitted only:
(1) from the time the aggregate outstanding amounts have been paid
down to the Required Level;
(2) Tranche E has been repaid in full;
(3) subject to the absence of a continuing Event of Default or
Potential Event of Default; and
(4) within a period of ten Business Days following a Repayment Date.
(ii) If the Annual Debt Service Cover Ratio at any Repayment Date is
less than 1.15, the moneys available to be paid into the Shareholders' Account
will be retained in the Proceeds Account, provided that if the Annual Debt
Service Cover Ratio (taking Available Cash Flow from Acceptance to the 31
December or 30 June next preceding the First Repayment Date) is less than 1.15
on the First Repayment Date, the Borrower may nevertheless (notwithstanding
Clause 9.4.3 (c)(i)(4) make payments into the Shareholders' Account pursuant to
Clause 9.4.3(a)(xi) prior to the
next following Repayment Date if it submits to the Agent a further calculation
of the Annual Debt Service Cover Ratio (taking into account Available Cash Flow
from Acceptance to the First Repayment Date) certified by its independent
auditors demonstrating that its Annual Debt Service Cover Ratio at the First
Repayment Date equalled or exceeded 1.15.
9.4.4 Application of Insurance Proceeds:
(a) Material loss or damage insurance proceeds each below or equal to EUR 10
million until Acceptance and below or equal to EUR 5 million after Acceptance
will be applied, for repairs or replacements by the Borrower.
(b) Material loss or damage insurance proceeds, each in excess of EUR 10
million but only up to a total of EUR 50 million until Acceptance and each in
excess of EUR 5 million after Acceptance, but only up to a total of EUR 50
million will be applied, if insured damage occurs which, in the opinion of the
Technical Adviser and the Wood Supply Adviser, is repairable or replaceable by
application of insurance proceeds (together with any monies then available to
the Borrower), directly to meet the cost of such repairs or replacements.
(c) Material loss or damage insurance proceeds
(i) in excess of EUR 10 million each, but only up to EUR 50 million until
Acceptance and in excess of EUR 5 million each, but only up to EUR 50 million
after Acceptance, if damage occurs which, in the opinion of the Technical
Adviser and the Wood Supply Adviser, is not replaceable by application of
insurance proceeds (together with any monies then available to the Borrower),
(ii) in excess of EUR 50 million,
will be applied at the direction of the Majority Lenders. For the avoidance of
doubt, the Lenders will however provide insurance services to the Borrower in
respect of security measures provided by the EPC Contractor pursuant to Clause
13.2 of the EPC Contract.
(d) Notwithstanding the provisions of Clauses 9.4.4 (a) and 9.4.4 (b) and to
the extent no material interests (versicherte Interessen) under the Construction
/Erection All Risks Material Damage Insurance Contract of any co-insured
are affected, payments by the Borrower from the Insurance Account will be
permitted only if no Event of Default has
occurred and is continuing unless such Event of Default would be cured by the
application of such payment.
9.4.5 Distribution of Payments:
(a) Each payment made to the Agent by the Borrower pursuant to this Clause
9 will be promptly distributed proportionately by the Agent among the Lenders
entitled thereto. Each such distribution will be made in like funds as and for
value the date on which such payment is received by the Agent.
(b) The previous paragraph applies mutatis mutandis to payments made to the
Agent by third parties under any Financing Document.
10. EQUITY RESERVE ACCOUNT
10.1 MAINTENANCE
The Borrower will open an interest bearing equity reserve account at the latest
at the First Repayment Date or earlier if required so that Excess Start-Up Cash
Flows can be deposited into it as they arise.
10.2 PURPOSE
The Equity Reserve Account will be used for securing the Lenders' claims under
the Financing Documents in priority to the funds on the Debt Service Reserve
Account.
10.3 ERA-BALANCE
The Equity Reserve Account will be funded by Excess Start-Up Cash Flows and by
the amount determined in accordance with Clause 2.6.2 (b) (vi) of the
Shareholders' Undertaking Agreement in accordance with the provisions of the
Shareholders' Undertaking Agreement.
10.4 SET-OFF
The Agent is entitled to set off the credit balance in the Equity Reserve
Account against any obligations of the Borrower due and payable under the
Financing Documents to the Lenders if the Borrower does not, does not on time or
does not entirely perform such obligations.
10.5 INVESTMENTS
10.5.1 The Borrower may elect to open a further account with HVB Banque
Luxembourg Societe Anonyme and/or the Agent in respect of investments which may
be made by the Borrower pursuant to Clause 10.5.2 (the "ERA Investment
Account"), such account to be pledged by the Borrower in favour of the Lenders
by entering into an account pledge agreement substantially in the form set
out in Schedule 8 (Form of Luxembourg Account Pledge Agreement) in respect of
----------
the ERA Investment Account maintained with HVB Banque Luxembourg Societe
Anonyme and in the form set out in Schedule 7 (Form of Account Pledge
-----------
Agreement) in respect of the ERA Investment Account maintained with the Agent.
The Borrower will at its own cost provide the Agent with a legal opinion
satisfactory to the Agent and issued by a reputable Luxembourg law firm in
respect of, inter alia, the validity and enforceability of such Luxembourg
account pledge agreement. Any interest or other income earned on balances on
the Equity Reserve Account may, so long as:
(a) the balance standing to the credit of the Debt Service Reserve Account
is at least equal to the then Target Balance; and
(b) no Event of Default or Potential Event of Default has occurred and is
then continuing,
be paid into the Shareholders' Account.
10.5.2 The Borrower may invest the balance standing to the credit of the ERA
Investment Account in Permitted Investments, provided that such Permitted
Investments are deposited in the ERA Investment Account and the maturity of such
Permitted Investments does not conflict with any anticipated payments to be made
by the Borrower out of the ERA Investment Account. To the extent necessary to
make any payments out of the ERA Equity Account, the Borrower will transfer
sufficient funds from the ERA Investment Account to the ERA Equity Account and
will liquidate any of the Permitted Investments if necessary to meet its payment
obligations.
11. DEBT SERVICE RESERVE ACCOUNT
11.1 MAINTENANCE
The Borrower will open an interest bearing debt service reserve account at the
latest at Acceptance.
11.2 PURPOSE
The Debt Service Reserve Account will be used for securing the Lenders' claims
under the Financing Documents.
11.3 TARGET BALANCE
The target balance to be maintained on the Debt Service Reserve Account prior to
the First Repayment Date is EUR 57 million and thereafter such amount as is
sufficient to service the amounts due and payable under the Facility during the
following twelve (12) months, taking into consideration any amounts held in USD
in accordance with Clause 11.5 (Currency) (the "Target Balance"). Any balance on
the Equity Reserve Account from time to time will count towards the Target
Balance. The Debt Service Reserve Account will be funded through
(a) a drawdown under Tranche C,
(b) the amount determined in accordance with Clause 2.6.2 (iii) of the
Shareholders' Undertaking Agreement,
(c) out of the Proceeds Account taking into consideration Clause 9.4.3 (a)
(Priority of Payments).
When determining the twelve (12) months debt service, the Agent will estimate
the costs of interest on the basis of the interest rates then currently payable
on outstanding Advances and that repayments are made only according to Clauses
6.1 (General) to 6.3 (Repayments other than First Repayment). The Agent will
notify the Borrower of the Target Balance at the latest two (2) Business
Days before Acceptance and each subsequent Repayment Date following the
notification on such date pursuant to Clause 4.4 (Notification).
11.4 SET-OFF
The Agent is entitled to set off the credit balance in the Debt Service Reserve
Account against any obligations of the Borrower due and payable under the
Financing Documents to the Lenders if the Borrower does not, does not on time or
does not entirely perform such obligations.
11.5 CURRENCY
The Borrower may elect to hold the moneys on the Debt Service Reserve Account in
USD up to an amount corresponding to the notional amount of interest payments
and payments as principal with regard to the EUR/USD cross-currency-swaps
concluded in accordance with the Hedging Strategy if (a) the respective
USD-account is held with the Agent or HVB Banque Luxembourg Societe Anonyme, and
(b) the USD-account is pledged by the Borrower in favour of the Lenders by
entering into an account pledge agreement substantially in the form set out in
Schedule 8 (Form of Luxembourg Account Pledge Agreement) in respect of the
----------
USD-account maintained with HVB Banque Luxembourg Societe Anonyme and in the
----
form set out in Schedule 7 (Form of Account Pledge Agreement) in respect of the
-- ----------
USD-account maintained with the Agent, and (c) the Agent is provided with a
legal opinion satisfactory to the Agent and issued by a reputable Luxembourg law
firm in respect of, inter alia, the validity and enforceability of such account
pledge agreement. The Agent will
notify the Borrower of the minimum amount of the Debt Service Reserve Account
that must be held in USD from time to time.
11.6 INVESTMENTS
The Borrower may elect to open a further account with HVB Banque Luxembourg Soci
ete Anonyme and/or the Agent in respect of investments which may be made by the
Borrower pursuant to Clause 11.6.1 (the "DSRA Investment Account"), such account
to be pledged by the Borrower in favour of the Lenders by entering into an
account pledge agreement substantially in the form set out in Schedule 8
----------
(Form of Luxembourg Account Pledge Agreement) in respect of the DSRA Investment
Account maintained with HVB Banque Luxembourg Societe Anonyme and in the form
and substance of the Account Pledge Agreement between the Borrower and the
Security Agent as of the date hereof in respect of the DSRA Investment Account
maintained with the Agent. The Borrower will at its own cost provide the Agent
with a legal opinion satisfactory to the Agent and issued by a reputable
Luxembourg law firm in respect of, inter alia, the validity and enforceability
of such Luxembourg account pledge agreement. Any balance on the Debt Service
Reserve Account in excess of the Target Balance from time to time may be paid
into the Revenue Account.
11.6.1 The Borrower may invest the balance standing to the credit of the
DSRA Investment Account in Permitted Investments, provided that such Permitted
Investments are deposited in the DSRA Investment Account and the maturity of
such Permitted Investments does not conflict with any anticipated payments to be
made by the Borrower out of the DSRA Investment Account. To the extent necessary
to make any payments out of the Debt Service Reserve Account, the Borrower will
transfer sufficient funds from the DSRA Investment Account to the Debt Service
Reserve Account and will liquidate any of the Permitted Investments if necessary
to meet its payment obligations.
12. ILLEGALITY
If at any time it is or becomes unlawful or impracticable, by reason of any
adoption, amendment or change of official application or interpretation of any
law or regulation or any directive, request or requirement (whether or not
having the force of law) from any central bank or other fiscal, monetary or
other authority, having jurisdiction over any Lender for such Lender to fund, or
to allow to remain outstanding, all or any of its participations in Advances
made or to be made, or to maintain its Commitment, or to charge or receive
interest or fees hereunder at the rate applicable, such Lender will promptly
after becoming aware thereof notify the Borrower through the Agent and:
12.1 the Commitment of such Lender under the Facility will forthwith be
reduced to zero; and
12.2 the Borrower will prepay to such Lender its participation in any
relevant Advances together with accrued interest and all other amounts owing to
such Lender hereunder on the next following date on which interest is payable on
the relevant Advance, or on such earlier date as such Lender certifies to be
necessary having regard to the relevant circumstances.
13. INCREASED COSTS
13.1 INCREASED COSTS
Where any Lender certifies that, as a result of the adoption or amendment of or
any change of official application or interpretation of any law, regulation,
directive, request or requirement (being legally binding or, if not legally
binding to the extent that non-compliance therewith would be impracticable)
(including without limitation any law, regulation or requirement relating to
taxation, reserve assets, special deposits, cash ratio, liquidity or capital
adequacy requirements, but not including any law, directive, request, regulation
or requirement as in effect on the date hereof or already adopted but not yet in
force on the date hereof):
13.1.1 such Lender or any of its affiliated companies incurs a cost in
relation to such Lender being a party to and/or performing its obligations
and/or exercising its rights under this Agreement;
13.1.2 the cost to such Lender of making available or maintaining or funding
its participation in any Advance or maintaining its Commitment is increased;
13.1.3 any sum received or receivable by such Lender under or in connection
with this Agreement is reduced;
13.1.4 the effective return of such Lender in connection with this Agreement
is reduced; or
13.1.5 such Lender becomes liable to make any payment on account of tax or
otherwise (except for taxes imposed on its net income or net worth) or is
required to forego any interest or other return on or calculated by reference to
the amount of any sum received or receivable by it under or in connection with
this Agreement,
then in any such case:
(a) a Lender intending to make a claim pursuant to the above will notify the
Borrower through the Agent setting forth in reasonable detail the basis for such
claim;
(b) the Borrower will pay to the Agent for the account of such Lender upon
demand of the Agent such amounts as are certified by such Lender to be necessary
to fully compensate such Lender for such cost, reduction, payment or foregone
interest or other return, after reduction of benefits which accrue to such
Lender directly or indirectly because of such event and reasonably allocable to
such costs; and
(c) the Borrower may, by giving irrevocable notice to the Agent, prepay to
such Lender its participation in each Advance together with accrued interest and
all other amounts owing to such Lender hereunder on the last day of the then
current Interest Period for that Advance, or on such earlier date as such Lender
certifies to be necessary having regard to the relevant circumstances.
13.2 For the avoidance of doubt, this Clause 13 shall not apply in case of a
removal of the guarantor's liability (Gewahrtragerhaftung) regarding German
public savings banks, state banks and public credit institutions of the Federal
Republic of Germany and its states.
14. TAXES
14.1 All payments by the Borrower under this Agreement will be made without
any deduction or withholding on account of any taxes unless the Borrower is
required by law to make such deduction or withholding, in which case the
Borrower will:
14.1.1 ensure that the deduction or withholding does not exceed the minimum
amount legally required; and
14.1.2 forthwith pay to the Lenders such additional amounts so as to ensure
that the amount received by each Lender will equal the full amount which would
have been received by it had no deduction or withholding been made,
provided that the foregoing obligation to pay such additional amounts will not
apply in respect of:
(a) any taxes measured or imposed upon the overall net income or the overall
capital or net worth of any Lender or its applicable lending office,
or any
branch or affiliate thereof, and all franchise taxes, branch taxes, or taxes on
doing business; or
(b) any taxes that would not have been imposed but for the failure of any
Lender to comply with any certification, identification, information,
documentation or other reporting requirement, if compliance is required by law,
regulation, administrative practice or an applicable treaty as a precondition to
exemption from, or reduction in the rate of, such taxes.
14.2 The Borrower will pay all stamp, recording or similar taxes payable in
respect of the execution, delivery and enforcement of the Transaction Documents
promptly when due.
14.3 If any Lender or the Agent is obliged to make any payment on account of
taxes referred to in Clause 14.2 or if any other additional tax burdens occur in
connection with the Transaction Documents the Borrower will indemnify each
Lender and the Agent from any payment on account of such taxes.
14.4 If, in the good faith determination of a Lender:
(a) such Lender has obtained a tax refund or tax allowance or tax credit as
a result of, and directly attributable to, an additional payment of the Borrower
under Clause 14.1 ; and
(b) it can make a lawful payment to the Borrower in an amount leaving it in
no better or worse position than it would have been had the payment by the
Borrower been made without any deduction or withholding,
then after actual receipt or usage of such tax refund or tax allowance or tax
credit it will pay such amount to the Agent for the account of the Borrower. The
Lender will make commercially reasonable efforts where permitted by law to claim
a refund or allowance or credit, but will not be obliged to disclose any
information as to its tax situation to the Borrower or to any other person
acting on the Borrower's behalf.
14.5 If the Borrower is required to make any payment to a relevant tax or
other authority for which the Borrower has made a deduction or withholding under
Clause 14.1 , the Borrower will pay the full amount of the deduction or
withholding within the applicable periods to the relevant authority and will
deliver to the Agent for the account of each Lender concerned as soon as
reasonably practical following the making of such payment the original receipt
or a certified copy thereof and/or other evidence reasonably satisfactory to
such Lender that the payment has been made.
15. MITIGATION
15.1 MITIGATION
15.1.1 Each Finance Party shall, in consultation with the Borrower, take all
reasonable steps to mitigate any circumstances which arise and which would
result in any amount becoming payable under or pursuant to, or cancelled
pursuant to, any of Clause 12 (Illegality), Clause 13 (Increased Costs) or
Clause 14 (Taxes), including, but not limited to, transferring its rights and
obligations under the Financing Documents to another affiliate or Facility
Office.
15.1.2 Clause 15.1.1 does not in any way limit the obligations of the
Borrower under the Financing Documents.
15.2 LIMITATION OF LIABILITY
15.2.1 The Borrower shall indemnify each Finance Party for all costs and
expenses reasonably incurred by that Finance Party as a result of steps taken by
it under Clause 15.1.
15.2.2 A Finance Party is not obliged to take any steps under Clause 15.1
if, in the opinion of that Finance Party (acting reasonably), to do so
might be prejudicial to it.
16. REPRESENTATIONS AND WARRANTIES
16.1 REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Arranger, Agent, Security
Agent and Lenders that:
16.1.1 Status: it is a limited liability company duly organised and validly
existing under the laws of the Federal Republic of Germany, has the capacity to
▇▇▇ and be sued in its own name and has the corporate power and authority to own
its assets and to carry on its business as currently conducted and the Project;
16.1.2 Powers and Authority: it has the corporate power and authority to
enter into and perform its obligations under the Transaction Documents and has
taken all necessary corporate and other action required to authorise the
execution, delivery and performance of the Transaction Documents;
16.1.3 Legal Validity: the Transaction Documents that have been executed by
the Borrower on or before the date as of which this representation is made or
repeated, create legal, valid and binding obligations of the Borrower and the
other parties thereto (apart from the Lenders in their various capacities)
enforceable in accordance with the terms and conditions of the respective
agreements and such agreements are in proper form for enforcement in the courts
of the Federal Republic of Germany, subject to applicable bankruptcy,
insolvency, liquidation or other laws affecting creditors' rights generally;
16.1.4 Non-Conflict: the entry into and the execution and performance of the
Transaction Documents by the Borrower do not and will not conflict:
(a) in any material respect with any agreement, mortgage, bond or other
instrument or treaty to which it is a party or which is binding upon it or any
of its assets which could reasonably be expected to have a Material Adverse
Effect;
(b) with its constitutive documents; or
(c) with any applicable law in a manner which could reasonably be expected
to be materially adverse in relation to its ability to perform its obligations
under the Transaction Documents and/or the validity or enforceability of the
Transaction Documents;
16.1.5 No Event of Default: no Event of Default or Potential Event of
Default has occurred and is continuing;
16.1.6 Authorisations: except for such Authorisations not obtainable by the
date as of which this representation is made or repeated, as to which the
Borrower reasonably believes that they will be obtained as and when necessary
for the Project, all authorisations listed in Appendix 3, Exhibits 4.4 and 13 of
the EPC Contract and any other material Authorisations required for the Project,
including, without limitation, in connection with the performance by each of the
parties of their obligations under the Infrastructure Agreement, or the
performance of its obligations under the Transaction Documents are in full force
and effect, have not been revoked or annulled by a first instance decision, to
the best of the Borrower's knowledge and after inquiry with the relevant
authority, have not been contested as a result of which the direct
enforceability of such Authorisation has been suspended until a final decision
and it has complied with the terms and conditions of such Authorisations in all
material respects; and such Authorisations have not been modified or amended and
there are no proposals to amend or modify the same unless such modification or
amendment is not materially adverse in relation to the Borrower's ability to
perform its obligations under the Transaction Documents and/or the validity or
enforceability of the Transaction Documents;
16.1.7 Further Authorisations: to the best of its knowledge, having made due
inquiry, it knows of no reason why any Authorisation required for the Project or
the performance of its obligations under the Transaction Documents (i) will not
be granted when applied for or requested, or (ii) will be withdrawn (zur
uckgenommen) or revoked (widerrufen);
16.1.8 Financial Statements: its most recent audited consolidated annual
financial statements:
(a) were prepared in accordance with accounting principles generally
accepted in the Federal Republic of Germany and consistently applied;
(b) disclose all material liabilities (contingent or otherwise) and all
unrealised or anticipated losses of any member of the Group required to be
disclosed by accounting principles generally accepted and (except as disclosed
therein) consistently applied in the Federal Republic of Germany; and
(c) give a true and fair view of the financial condition and operations of
the Group during the relevant period.
Its financial year-end and the financial year end of the Group is 31 December;
16.1.9 No Material Adverse Change: since the date as at which the latest
audited consolidated financial statements were stated to be prepared there has
been no material adverse change in its business or financial condition (or the
business or consolidated financial condition of the Group) apart from changes
affecting the industry generally;
16.1.10 Taxation: each member of the Group has duly and punctually paid and
discharged all taxes, assessments and governmental charges imposed upon it or
its assets within the time period allowed therefor without imposing tax
penalties, or creating any encumbrance having priority to the Lenders or the
Security (save to the extent payment thereof is being contested in good faith by
the relevant member of the Group and where payment thereof can lawfully be
withheld and would not result in any encumbrance having priority to the Lenders
or the Security);
16.1.11 Claims Pari-Passu: the claims of the Lenders against it under the
Financing Documents to which it is a party will rank at least pari passu with
the claims of all its unsecured and unsubordinated creditors save for those
preferred solely as a matter of law or resulting from those land charges which
will be released following the first Advance;
16.1.12 No Insolvency or Winding-Up: neither the Borrower or any of its
material subsidiaries has taken any corporate action nor have any other steps
been taken or legal proceedings been started or (to the best of its knowledge
and belief) threatened against the Borrower or any such subsidiary for the
opening of insolvency proceedings against it or its winding-up, dissolution,
administration or re-organisation (whether by voluntary arrangement, scheme of
arrangement or otherwise) or for the appointment of a receiver, administrator,
administrative receiver, conservator, custodian, trustee or similar officer of
it or of any or all of its assets or revenues;
16.1.13 No Material Proceedings: no action or administrative proceeding of
or before any court, arbitrator or agency (including, but not limited to,
investigative proceedings), which is materially adverse in relation to the
Borrower's ability to perform its obligations under the Transaction Documents
and/or the validity or enforceability of the Transaction Documents, has been
started or to the best of its knowledge threatened against any member of the
Group or its assets, nor are there to the best of its knowledge any
circumstances likely to give rise to any such action or proceedings which, if
resolved adversely could reasonably be expected to be materially adverse to its
ability to perform its obligations under the Transaction Documents and/or the
validity or enforceability of the Transaction Documents;
16.1.14 No Material Defaults: it is not in breach of or in default under any
agreement to which it is a party or which is binding on it or any of its assets
in a way which is materially adverse in relation to the Borrower's ability to
perform its obligations under the Transaction Documents and/or the validity or
enforceability of the Transaction Documents;
16.1.15 Project Contracts: (i) all existing Project Contracts are or
will be in full force and effect at the time of the first drawdown under this
Agreement (except for the EPC Contract, which will be in full force and effect
once the down payment under the EPC Contract has been made), (ii) no other
material Project Contracts have been concluded, which have not been disclosed to
the Agent, (iii) the Borrower has no notice of any material breaches by any
contracting party under the Project Contracts, and (iv) with regard to Project
Contracts, which cannot be produced until the day on which this representation
and warranty is made or repeated, the Borrower assumes that these are produced
as soon as and to the extent that they may become necessary for the Project;
16.1.16 Information: all financial projections contained in the Financial
Model were prepared or made in good faith and on the basis of assumptions
believed by the Borrower to be reasonable;
16.1.17 Environmental Compliance: it has duly performed and observed in all
material respects all Environmental Law, Environmental Permits and all other
material covenants, conditions, restrictions or agreements including in
connection with any contamination, pollution, emissions, waste, release or
discharge of any toxic or hazardous substance where failure to do so is
materially adverse in relation to the Borrower's ability to perform its
obligations under the Transaction Documents and/or the validity or
enforceability of the Transaction Documents;
16.1.18 Environmental Claims: no Environmental Claim has been commenced
against it or its officers, or is to the best of its knowledge threatened
against it or its officers materially adverse in relation to the Borrower's
ability to perform its obligations under the Transaction Documents and/or the
validity or enforceability of the Transaction Documents;
16.1.19 Relevant Substances: no substance which is capable of causing harm
to any living organism or damaging the environment, public health or welfare has
been deposited, disposed of, kept, treated, imported, exported, transported,
processed, manufactured, used, collected, sorted or produced at any time or is
present in the environment (whether or not on property owned, leased, owned,
occupied or controlled by any member of the Group) in circumstances which are
likely to result in any liability of any member of the Group under Environmental
Laws which is materially adverse in relation to the Borrower's ability to
perform its obligations under the Transaction Documents and/or the validity or
enforceability of the Transaction Documents;
16.1.20 Ownership of Assets: the Borrower is the sole owner of or fully
entitled to use all of its assets and is the legal and beneficial owner of its
assets subject only to the Security Agreements and other Permitted Encumbrances;
16.1.21 Easements: it has all easements, rights of way, rights of ingress
and egress necessary for the construction and operation of the Project, except
for those as to which it has no reason to believe will not be in place when so
necessary;
16.1.22 Encumbrances: save for Permitted Encumbrances no encumbrance exists
over all or any of the assets of any member of the Group and the execution of
the Transaction Documents to which it is a party and the exercise by it of its
rights thereunder will not result in the existence or imposition of nor oblige
any member of the Group to create any encumbrance (save for Permitted
Encumbrances) in favour of any person over any of its or any member of the
Group's assets;
16.1.23 Indebtedness: on the day of signing this Agreement, the Borrower has
no indebtedness save for:
(a) Permitted Financial Indebtedness (except for indebtedness named under
paragraph (e) of the definition of Permitted Indebtedness);
(b) indebtedness for Development Costs and other similar costs, not
exceeding EUR 1.3 million, envisaged in the Investment and Financing Plan and
incurred but not yet invoiced or paid);
(c) indebtedness under the Pre-Activity Agreement (as defined under the EPC
Contract) not exceeding EUR 4,210,000 plus VAT; and
(d) indebtedness to the former shareholders Kvaerner plc in the amount of
EUR 478,687 and Thyssen Rheinstahl Technik Projektgesellschaft mbH in the amount
of EUR 2,648,000;
(e) indebtedness for the payment of the second purchase price instalment for
the Site towards AIG in the amount of EUR 1,755,686 plus VAT and for liabilities
under the tenancy agreement dated 16 May 2002;
(f) further indebtedness to the Shareholders and AIG to be waived at the
latest on the day after Financial Close;
(g) indebtedness for the ongoing payments which become due at the date the
guarantee decision is delivered; and
(h) further indebtedness not exceeding EUR 100,000;
16.1.24 Tax Grants: it is not aware of any reason why the Tax Grants
(Investitionszulagen) should not be paid in the amounts assumed in the Base Case
and no encumbrances exist over any of its claims thereunder or rights and title
thereto;
16.1.25 Investment Incentives and State Guarantee: the Investment Incentives
(GA-Zuschuss) given by the State of Sachsen-Anhalt and the State Guarantee are
legal, valid and binding obligations of the State Guarantor and the Guarantors
respectively and no encumbrances (other than as contemplated hereby) exist over
any of its claims under the Investment Incentives (GA-Zuschuss) or rights and
title thereto;
16.1.26 EU-Decision: the EU-Decision is in full force and effect, it has
complied with the terms and conditions of the EU-Decision in all respects, and
the EU-
Decision has not been modified or amended in any material respect, withdrawn or
revoked, since the date of its issuance, and there are no proposals known to the
Borrower to amend or modify in any material respect, withdraw or revoke the
same, nor is it the subject of any existing challenge by any third party in
connection with which the EU-Decision has been suspended pending the outcome of
any appeal;
16.1.27 Intellectual Property: it has, or as the case may be, will have
available all material Intellectual Property Rights and is not in material
breach of or has not infringed in any material respect any Intellectual Property
Rights of any other person;
16.1.28 Insurances: all insurances required to be in place, as provided in
the Minimum Insurance Schedule, are in full force and effect and all premia then
due in respect thereof have been paid in full or will be paid in full out of the
proceeds of the following Advance;
16.1.29 No Deduction or Withholdings: under the laws of its jurisdiction of
incorporation in force at the date hereof, it will not be required to make any
deduction or withholding from any payment it may make hereunder;
16.1.30 Shareholding: upon the making of the Capital Contributions pursuant
to Clause 2.6.1 of the Shareholders' Undertaking Agreement, the Share Capital
will be EUR 15,000,000 and the Shareholders will be the owner of the following
Shares
SHAREHOLDER NUMBER OF SHARES NOMINAL VALUE OF SHARES PERCENTAGE
----------- ---------------- ----------------------- ----------
SP Holding 5 EUR 27,360 63,58 %
EUR 27,360
EUR 9,160
EUR 30,320
EUR 9,442,800
RWE-IN 4 EUR 51,130 29,42 %
EUR 31,100
EUR 38,970
EUR 4,291,800
FAHR 3 EUR 27,360 7 %
EUR 12,940
EUR 1,009,700
and no person will have any right to subscribe for any additional Shares in the
Share Capital;
16.1.31 Liability vis-a-vis Former Shareholders: it has no liabilities or
outstanding obligations to any of its former shareholders other than those to be
paid to
(i) Kvaerner plc in the amount of EUR 478,687,
(ii) Thyssen Rheinstahl Technik Projektgesellschaft mbH in the amount of EUR
2,648,000 for compensation payments and EUR 570,646 for ancilliary costs in
relation to the purchase of the Site for which Thyssen Rheinstahl Technik GmbH
and its legal successor Thyssen Rheinstahl Technik Projektgesellschaft mbH have
provided funds; and
(iii) AIG in the amount of EUR 1,755,686 plus VAT purchase price in
relation to the Site, EUR 546,794 for ancilliary costs in relation to the
purchase of the Site for which AIG has provided funds to the Borrower, and the
lease agreement dated 16 May 2002 between the Borrower and AIG all of which
(except for the obligations under the lease agreement) will be repaid under the
first Advance;
16.1.32 Assurance of Overall Financing: to the best of its knowledge there
is an Assurance of Overall Financing;
16.1.33 Accounts: the Borrower has no accounts other than those established
or to be established in accordance with this Agreement;
16.1.34 Subsidiaries and Affiliates: it does not have any subsidiaries,
other than the Permitted Subsidiaries, or any investments in any other person
other than Permitted Investments;
16.1.35 Utilities and Facilities: all utility services, means of
transportation, facilities and other materials necessary for the importation,
construction, installation, and operation of the Project (including, without
limitation, gas, wood receiving, pulp
dispatching, fuel, electrical, water supply, storm drainage, rail, port,
telephone and sewage services and facilities, as necessary) are or, to the best
of the Borrower's knowledge after due inquiry, will be available to the Project
(in the case of utility services, at or within the boundaries of the Site) as
soon as required for the construction, operation, testing and start-up of the
Project, and to the extent necessary or desirable, arrangements have been made
on commercially reasonable terms for such services, means of transportation,
facilities and other materials, except for such arrangements as are not required
to be made as of the date hereof by the applicable Transaction Documents, with
respect to which arrangements the Borrower has no reason to believe such
arrangements will not be made at the time so required;
16.1.36 Adequate Facilities: other than those services to be performed and
materials to be supplied that can reasonably be expected to be commercially
available as and when required or those described in Clause 16.1.35 (Utilities
and Facilities) which are not yet available, the services to be performed, the
facilities and materials to be supplied and the property interests and other
rights granted pursuant to the Project Contracts comprise all of the property
interests and other rights necessary to secure any right or privilege which is
material to the acquisition, development, construction, installation,
completion, operation and maintenance of the Project in accordance in all
material respects with the Transaction Documents and all Authorisations required
for the Project or the performance of its obligations under the Transaction
Documents;
16.2 Repetition
Each of the representations and warranties pursuant to Clause 16.1
(Representations and Warranties) (other than Clause 16.1.29) will be repeated
by the Borrower by reference to the facts and circumstances then existing
in each Drawdown Request and on the first day of each Interest Period.
17. FINANCIAL CALCULATIONS
(WIRTSCHAFTLICHKEITSBERECHNUNGEN)
17.1 Method of Calculation of Annual Debt Service Cover Ratio
The initial projected Annual Debt Service Cover Ratios are set out in the Base
Case delivered pursuant to paragraph 9 of Schedule 2 (Conditions for the First
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Drawdown).
17.2 Recalculation
The Agent will calculate the Annual Debt Service Cover Ratio on each Repayment
Date and on the basis of the financial statements most recently
delivered to it pursuant to Clauses 18.1.1 (a), 18.1.1 (b) , or as the
case may be Clause 9.4.3 (c)(ii).
17.3 Adjustments to Financial Model
The Borrower will provide information reasonably requested by the Agent for the
updating of the Financial Model.
18. INFORMATION REQUIREMENTS
18.1 Financial Statements
18.1.1 The Borrower will deliver to the Agent and C&L in sufficient copies
for each of the Lenders:
(a) as soon as available, but no later than 90 days after the end of its
financial year:
(i) the balance sheet, profit and loss statement and cash flow statement for
the Borrower and (on a consolidated basis) for the Group for such financial
year, audited by a recognised firm of independent auditors licensed to practise
in the Federal Republic of Germany, together with a statement from the Borrower
reconciling such financial statements with the budgeted yearly accounts and
explaining all material deviations of such financial statements from the
budgeted yearly accounts referred to in Clause 18.3 (Project Budget);
(ii) the related auditors' report; and
(iii) a confirmation by such auditors that all transactions effected by the
Borrower with Related Parties in such financial year have been made on terms no
less beneficial to the Borrower than those obtainable on an arms' length basis;
(b) as soon as available, but no later than 60 days after the end of its
financial half year, the balance sheet, profit and loss statement and cash flow
statement for the Borrower and (on a consolidated basis) for the Group for such
period which will be in a form reasonably acceptable to the Lenders and will be
accompanied by data necessary for the calculation of the Annual Debt Service
Coverage Ratio, certified by its independent auditors; and
(c) no later than thirty (30) days after the end of each calendar quarter, a
management commentary as to, inter alia, the Borrower's and the Group's
performance during such calendar quarter and any material developments or
proposals affecting the Borrower and the Group or its business.
18.1.2 The Borrower will ensure that each set of accounts delivered by it
pursuant to this Clause 18 is prepared on the same basis as was used in the
preparation of its Original Financial Statements or, in the case of a divergence
therefrom, will be accompanied by a statement explaining each changed accounting
principle and its effects.
18.1.3 The Borrower will at the request of the Agent require and authorise
its auditors to discuss with the Lenders matters reasonably related to or
arising out of the annual audit of the Borrower by such auditors.
18.1.4 The Borrower will provide the financial information required to be
provided to the Lenders under this Clause 18 in the German and the English
language.
18.2 Compliance Certificates
Each of the financial statements delivered by the Borrower under Clause 18.1.1
(a) and 18.1.1 (b) will be accompanied by a compliance certificate signed by two
directors of the Borrower certifying that all payments effected by the Borrower
out of the Proceeds Account were in compliance with the priorities set out in
Clause 9.4.3 (Application of Moneys on Proceeds Account).
18.3 Project Budget
18.3.1 The Borrower will deliver to the Agent, with sufficient copies for
each of the Lenders, starting from the calendar year in which the Start-Up is
expected to occur as soon as available, but no later than 30 days prior to the
beginning of the relevant financial year, the budgeted balance sheet, the
budgeted profit and loss statement and the budgeted cash flow statement for the
next following financial year and the Borrower will be available for a meeting
with the Lenders within two (2) weeks thereafter, to discuss such documents with
the Lenders. Such statements will forecast the costs of maintenance, overhauls
and Capital Expenditure for the next following three years in each case for the
Borrower and for the Group.
18.3.2 Following review by the Agent and if necessary the Technical Adviser
and the Wood Supply Adviser, if the Agent is satisfied with the information
supplied pursuant to Clause 18.3.1, it will confirm the same to the Borrower. If
the
Technical Adviser, the Wood Supply Adviser or the Agent is not satisfied with
such information, the Borrower shall make such amendments to such documents as
may be reasonably required by the Technical Advisor and/or Wood Supply Adviser
and/or the Agent.
18.4 Reports during Construction Period
18.4.1 During the Construction Period the Borrower will provide the Agent,
the Technical Adviser and the Wood Supply Adviser with the following information
within fifteen (15) days of the last day of each calendar quarter:
(a) quarterly construction progress reports in accordance with the
conditions set out in Schedule 14 (Sample Table of Content regarding Quarterly
-----------
Construction Progress Reports); and
(b) quarterly reports on the development of the costs budgeted for
construction, including a confirmation or a proposal for a revised version of
the Project Budget including a budgeted cost/actual cost comparison; and
(c) any material reports and other material notifications issued by the EPC
Contractor and/or any of its sub-contractors to the Borrower in respect of the
Project, including but not limited to the Detailed Program and any work around
plan (both as described in Clauses 8.7 and 8.11, respectively, of the EPC
Contract).
18.4.2 The Technical Adviser and the Wood Supply Adviser will review such
reports as to their compliance with the requirements of this Agreement, the EPC
Contract and the Investment and Financing Plan. If the Technical Adviser and the
Wood Supply Adviser is satisfied with such reports, he will confirm the same to
the Agent. If the Technical Adviser and/or the Wood Supply Adviser and/or the
Agent is not satisfied with such reports, the Borrower shall consult with the
Agent, the EPC Contractor and/or any of its subcontractors with a view to
rectifying the situation and ensuring that all future reports are satisfactory
to the Technical Adviser and/or Wood Supply Adviser and/or the Agent.
18.5 Reports during Operation Period
During the Operation Period the Borrower will provide the Agent with a quarterly
production report, including, inter alia, actual production figures, operating
cost figures, sales and sales price figures and the budgeted figures thereof
plus an actual/budget comparison within thirty (30) Business Days of the last
day of each calendar quarter.
18.6 Other Financial Information
The Borrower will from time to time on the request of the Agent or any Lender,
furnish the Agent or such Lender with such information about its business,
condition (financial or otherwise), operations, performance, properties or
prospects as the Agent or such Lender through the Agent may reasonably require,
in particular all information and documents as may be required under the
provisions of the German Banking Act (Gesetz uber das Kreditwesen) and any
material changes to the information included in the Information Memorandum and
the Financial Model.
18.7 Miscellaneous Information
18.7.1 The Borrower will inform the Agent in writing:
(a) promptly upon a Responsible Officer becoming aware of it, of the
occurrence of any Event of Default or Potential Event of Default and confirm to
the Agent in each Drawdown Request and, after the Facility has been fully drawn,
not later than thirty (30) days after the end of each calendar quarter that,
save as previously notified to the Agent or as notified in such Drawdown Request
or, as the case may be, confirmation, no Event of Default or Potential Event of
Default has occurred and is continuing;
(b) promptly upon a Responsible Officer becoming aware of it, of any
circumstances which are likely to delay in any material respect the completion
of the Project in accordance with the Base Case, including any event which might
reasonably be expected to result in Cost Overruns;
(c) promptly upon a Responsible Officer becoming aware of it, of any
material delay in the payment or non-payment of the Government Grants compared
with the assumption made in the Finance Model;
(d) promptly upon a Responsible Officer becoming aware of it, of any
circumstances which are likely to have a materially adverse impact on the
validity, enforceability and continuance of the State Guarantee, the Government
Grants and the EU-Decision;
(e) promptly upon a Responsible Officer becoming aware of it, of any Event
of Force Majeure or any other event which might delay construction or operation
or which might reasonably be expected to interrupt or reduce the operation of
the plant excluding any planned outage or maintenance
period previously notified to the Agent or which might reasonably be expected
to have a Material Adverse Effect;
(f) promptly upon a Responsible Officer becoming aware of it, of any
Environmental Claim commenced or threatened against it;
(g) promptly upon a Responsible Officer becoming aware of it, of any
material default of any party to a Project Contract;
(h) within ten (10) Business Days upon a Responsible Officer becoming aware
thereof, of the details of each litigation, arbitration or administrative
proceeding pending or threatened against it which is likely to result in a
liability of the Borrower in an amount or amounts exceeding, in aggregate, EUR
2,000,000 or the equivalent in other currencies;
(i) of any Change of Control;
(j) of any changes in its senior management;
(k) as soon as reasonably possible after a Responsible Officer becoming
aware of it, of possible Capital Expenditures in an amount of more than EUR 2
million in excess of the Project Budget for that financial year.
18.7.2 The Borrower will provide upon request such verbal or written
information concerning the Project as the Agent or the Lenders may reasonably
require including information that is publicly available.
The Borrower will fulfil its reporting requirements pursuant to this Clause 18
in a form which will allow the Agent to make the information available to the
Lenders without material effort. The Agent will notify the Borrower of the
number of copies needed and the form (e-mail, fax, mail) in which the
information will have to be provided. The Agent will promptly upon receipt
forward any information to the Lenders and, to the extent necessary, to the
Guarantors.
19. INSPECTION RIGHTS
The Borrower shall permit the Agent, the Lenders or any of their representatives
or the Advisers to inspect the Site and its books and records during usual
business hours, and upon reasonable prior notice, for the purpose of checking
whether the Borrower is in compliance with the provisions of the Transaction
Documents. Any requests for such inspections shall be made through the Agent.
20. HEDGING REQUIREMENTS
20.1 Implementation
The Borrower will implement the Hedging Strategy in a manner which is in form
and substance acceptable to the Agent and will enter into all Derivative
Transactions necessary for such purpose with the Hedging Counterparty.
20.2 Compliance with Hedging Strategy
The Borrower will not enter into any Derivative Transaction except in compliance
with the Hedging Strategy.
20.3 Adjustments
The Borrower and the Agent will negotiate in good faith and agree to adjustments
of the Hedging Strategy from time to time whenever adjustments are considered
necessary by the Borrower or the Agent at all times having regard to the
interests of the Lenders and the financial condition of the Borrower.
21. COVENANTS
21.1 Positive Covenants
The Borrower shall:
21.1.1 Maintenance of Legal Validity and Legal Status: do all things
necessary to maintain its existence as a legal person and to ensure the
legality, validity, enforceability or admissibility in evidence in the Federal
Republic of Germany of the Transaction Documents including the obtaining and
maintaining of all applicable Authorisations necessary for the Project and the
performance of its obligations under the Transaction Documents, as and when
required, and, on request of the Agent, shall supply copies (certified by a
director of the Borrower as true, complete and up to date) of any such
Authorisations;
21.1.2 Applicable Laws and Authorisations: with the exception of
Environmental Laws and Environmental Permits where the obligations of the
Borrower with respect thereto are set out in Clause 21.1.5 (Environmental
Compliance) comply in all material respects with all laws and comply with,
obtain, maintain and renew, all applicable Authorisations in each case which are
applicable in connection with the Project and the Borrower's business and
operation generally and required for its ability to perform its obligations
under the Transaction Documents. As soon as the Authorisations granted after the
conclusion of this Agreement become valid and upon request by the Agent, the
Borrower will obtain legal opinions on such validity from a reputable law firm
addressed to and for the benefit of the Agent;
21.1.3 Transaction Documents: Subject to Clause 21.2.15 (b) (Additional
Project Contracts and Amendments to Project Contracts) enter into, maintain
in full force and effect and comply with all Transaction Documents;
21.1.4 Authorised signatories: provide the Agent with a list of persons
authorised to sign Change Orders as defined in the EPC Contract and amendments
to the EPC Contract;
21.1.5 Relevant Advisers: from time to time and on the reasonable request of
the Agent inform the relevant Advisers and co-operate with them to enable each
such Adviser fully to perform its obligations under its advisory agreement;
21.1.6 Information regarding Permitted Encumbrances and Permitted Financial
Indebtedness: provide details to the Agent of any newly created Permitted
Encumbrance granted outside the ordinary course of business or any newly
incurred Permitted Financial Indebtedness incurred to any person;
21.1.7 Information of Technical Adviser and Wood Supply Adviser: provide the
Technical Adviser and the Wood Supply Adviser during the Construction Period on
a quarterly basis and upon request with all information and documentation
reasonably required for the purposes of this Agreement and bear the reasonable
costs of the report to be provided by the Technical Adviser and the Wood Supply
Adviser pursuant to Clause 18.4.2 (Reports during Construction Period);
21.1.8 Preservation of Assets: maintain and preserve all of its assets in
good condition and undertake regular maintenance, except disposal of obsolete
assets, in accordance with prudent industry practice or the EPC Contractor's and
Suppliers' recommendations;
21.1.9 Transactions with Third Parties: conclude and procure that any
subsidiary of the Borrower concludes any transaction with a third party,
irrespective of whether or not it is a Related Party, only on terms no less
beneficial to it than those obtainable on an arm's length basis. All contracts
to be concluded by it with a Related Party will be submitted to the Agent in
their final draft form for approval, such approval not to be unreasonably
withheld. It will further waive any Financial Indebtedness owed by any person to
it only for valuable market consideration;
21.1.10 Conduct of Business: cause the Project to be built, operated and
maintained in accordance with good industry practices, the Project Contracts and
all conditions, obligations, requirements set out in any Authorisation or
technical specifications from time to time agreed with the EPC Contractor or by
Suppliers,
or issued by any Authority in respect of the Borrower or the Project and ensure
that all staff necessary for the proper and efficient operation of its business
or that of its subsidiaries in place;
21.1.11 Payments and Application of Payments: otherwise than as referred to
in Clause 9.1.2 (Disbursement Account) and save for
(a) any proceeds of material loss and damage insurance obtained after
Acceptance which will be paid to the Insurance Account and applied in accordance
with Clause 9.4.4 (Application of Insurance Proceeds),
(b) any third party liability insurance which will be paid directly to the
relevant third party, and
(c) Excess Start-up Cash Flows up to a maximum amount of EUR 15 million
which will be paid into the Equity Reserve Account
ensure that all monies received by it in connection with the Project are paid to
the Proceeds Account and applied in accordance with Clause 9.4.3 (Application of
Moneys on Proceeds Account).
Amounts received in respect of the Government Grants and VAT refunds shall,
however, be applied to the repayment of Tranche E in accordance with Clause
6.3.8 (Repayments other than First Repayment) or for purposes corresponding to
the purpose of Tranche E. To the extent that, at the time these amounts are
received and at such time after the First Repayment Date when Tranche E has been
completely repaid in accordance with Clause 9.4.3(a)(x) (Application of Moneys
on Proceeds Account), the Borrower will however transfer these amounts to the
Shareholders' Account.
21.1.12 Tax: duly and punctually pay and discharge:
(a) all taxes, assessments and governmental charges imposed upon it or its
assets within the time period allowed therefor without imposing penalties and
without resulting in an encumbrance having priority to the Lenders or any
security purported to be granted by or created pursuant to the Security
Agreements; and
(b) all lawful claims which, if unpaid, would by law become encumbrances
upon its assets
(save to the extent payment thereof is being contested in good faith by the
Borrower and where payment thereof can lawfully be withheld and would not
result in an encumbrance having priority to the Lenders or any security
purported to be granted by or created pursuant to the Security Agreements).
21.1.13 Filing of Tax Returns: file or cause to be filed all tax returns
required to be filed in all jurisdictions in which the Borrower or any of its
subsidiaries is situated or carries on business or is otherwise subject to tax;
21.1.14 Claims Pari-Passu: ensure that at all times the claims of the
Lenders against it under the Financing Documents rank at least pari passu with
the claims of all its unsecured and unsubordinated creditors save those whose
claims are preferred by any bankruptcy, insolvency, liquidation or other similar
laws of general application and save for the claims resulting from those land
charges, which will be released following first drawdown;
21.1.15 Environmental Compliance: comply in all material respects with all
Environmental Law and obtain and maintain any Environmental Permits and notify
the Agent, promptly after a Responsible Officer becomes aware of the same of:
(a) any material Environmental Claim made on it or to any occupier of any
property owned or leased by it under any Environmental Law which may affect the
compliance with this Agreement; and
(b) any circumstances which arise whereby any material remedial action is
likely to be required to be taken by, or at the expense of, it pursuant to any
Environmental Law;
21.1.16 Enforcement: take all reasonable steps to promptly enforce its
rights under any Project Contract where failure to do so is material in relation
to the Project and the rights and obligations of the parties to any of the
Financing Documents;
21.1.17 Compliance with Conditions for State Guarantee and Government
Grants: comply, at all times, with all conditions, obligations and requirements
of, and assume all undertakings in, the EU-Decision, the State Guarantee and the
Government Grants, in particular:
(a) to allow inspections by the Guarantors or C&L (either by themselves or
by agents appointed by them) at any time for the purpose of checking whether a
drawdown under the State Guarantee may be made or whether the conditions for
such drawdown are satisfied or have been satisfied;
(b) to authorise the Agent and the Lenders to submit to the Guarantors and
C&L all documents concerning the Facility and the Security and to give to the
Guarantors and C&L all information requested by each of them;
(c) to pay all fees in connection with the State Guarantee; and
(d) to discharge the Arranger, the Agent, the Security Agent and the Lenders
vis-a-vis the Guarantor and C&L from any duty of discretion (Schweigepflicht)
whereby any requests by the Lenders shall be made through the Agent;
21.1.18 Intellectual Property: procure and comply in all material respects
with all material Intellectual Property Rights necessary to construct and
operate the Project and conduct the Borrower's business;
21.1.19 Security: provide and maintain the Security and any other security
to be provided to the Lenders pursuant to the Financing Documents and procure
that the Security is effective and maintained and upon reasonable request of the
Agent provide additional security over its assets in favour of the Lenders. The
Agent will determine the details of the additional security within its
reasonable discretion (billiges Ermessen) pursuant to Sec. 315 BGB. The
provision of additional security will not affect existing Permitted
Encumbrances;
21.1.20 Defects Liability Protection: refrain from any acts which may
prejudice materially and adversely any defects liability protection afforded to
the Borrower by the Contractor under the EPC Contract or, to the Borrower's
knowledge, by any subcontractor (at any level) to the Contractor and/or the
Borrower;
21.1.21 Management: employ experienced professionals in the paper and pulp
industry;
21.1.22 Syndication: provide at its own cost assistance to the Original
Lender in the syndication of the Facility, including without limitation, by
taking all reasonable steps to make management available for the purpose of
making presentations to, or meeting, potential lending institutions and comply
with all reasonable requests for information from potential syndicate members;
21.1.23 Technical Assistance: as and when reasonably requested obtain such
assistance as may be necessary prior to Acceptance in connection with the
construction, commissioning, testing, start-up, management, operation and
maintenance of the Project;
21.1.24 Information Memorandum: use best endeavours to assist the Arranger
in the preparation of the Information Memorandum and ensure that, save as
otherwise disclosed in the Information Memorandum, the factual information
contained in the Information Memorandum is true and accurate and complete in all
material respects on the date thereof (or, if different, as of the date when it
is stated) and that the Borrower and the Sponsors do not omit to make any
disclosure which would make the Information Memorandum misleading in any
material respect, and in the case of any financial projections or expressions of
opinion contained in the Information Memorandum, procure that such projections
and expressions are prepared or made in good faith and on the basis of
assumptions believed by the Borrower or any of its subsidiaries to be reasonable
and ensure that, if in the opinion of the Arranger it is necessary for the
purpose of syndication, the Information Memorandum is updated immediately prior
to syndication;
21.1.25 Rented part of the Site: not terminate the site lease agreement
dated 16 May 2002 and made between the Borrower and AIG, before the acquisition
of the part of the Site leased to it without the Majority Lenders' consent;
21.1.26 Owner's Scope: implement the Owner's Scope in accordance with
internationally recognised engineering standards in a prudent and timely manner
so as not to hinder achievement of Acceptance by month 28 after the Commencement
Date (as defined in the EPC-Contract) and so that such additional works are free
from any Defects and do not violate any intellectual property rights of third
parties;
21.1.27 Permitted Subsidiaries: save as the Majority Lenders may otherwise
agree (such agreement not to be unreasonably withheld) ensure that any Permitted
Subsidiaries operate their respective businesses in a proper and efficient
manner and in accordance with the principles set out in Schedule 11 (Financing
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of the Subsidiaries);
21.1.28 Reduction of Existing Financial Indebtedness: repay in full, using
funds from the first Advance, and in any event within 5 Business Days following
such Advance:
(a) the EUR 12,286,000 loan made to the Borrower by Dresdner Bank AG and
discharge all encumbrances securing any amounts payable thereunder;
(b) the claims of ex-shareholder Kvaerner plc in the amount of EUR 478,687
and Thyssen Rheinstahl Technik Projektgesellschaft mbH in the amount of EUR
2,648,000;
(c) the claims of AIG for the payment of the second instalment of the
purchase price for the Site in the amount of EUR 1,755,686 plus VAT; and
(d) the claims of RWE-IN, AIG and Thyssen Rheinstahl Technik
Projektgesellschaft mbH for the ancilliary costs in connection with the purchase
of the Site for which RWE-IN, AIG, Thyssen Rheinstahl Technik GmbH and its
successor in title Thyssen Rheinstahl Technik Projektgesellschaft mbH have
provided to the Borrower funds in the amount of EUR 2,708,339.
21.1.29 Accounts: close any existing bank account within one (1) month after
the first Advance other than as contemplated by this Agreement.
21.2 Negative Covenants
The Borrower will not (by action or omission):
21.2.1 Negative Pledge: create or permit to subsist any encumbrance over all
or any of its assets other than a Permitted Encumbrance or create any
restriction or prohibition on encumbrances over all or any of its assets;
21.2.2 Investments, Loans and Guarantees: make any investment in, make any
loans to, grant any credit or other financial accommodation to or for the
benefit of any person or give or have outstanding any guarantee or indemnity to
or for the benefit of any person other than product liability assumed in the
ordinary course of business or otherwise voluntarily assume any liability,
whether actual or contingent, in respect of any obligation of any other person
other than Permitted Investments and save as set out in the principles set out
in Schedule 11 (Financing of the Subsidiaries), nor will it make any material
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fixed asset investments (Sachinvestitionen) or financial investments
(Finanzinvestitionen) without the prior consent of the Guarantors or except as
permitted by this Agreement in relation to the Project;
21.2.3 Disposals: dispose of the whole or any part of its assets other than
in the ordinary course of business or other than by way of Permitted Disposals,
nor sell any material investments (Beteiligungen) or divisions of its business
(Betriebsteile) without the prior consent of the Majority Lenders and the
Guarantors. Any emission permits under the Kyoto Protocol to the United Nations
Framework Convention on Climate Change dated 11. December 1997 shall, however,
be disposed of only with the Agent's consent;
21.2.4 Financing: use the proceeds of any Advances for any other purposes
than those set out herein;
21.2.5 Transfer of Shares or Shareholder Loans: consent to any transfer of
Shares or Shareholder Loans in violation of the Shareholders' Undertaking
Agreement;
21.2.6 Shares in Subsidiaries: sell or otherwise dispose of (in any
transaction or series of transactions whether related or not) its existing
shares in any subsidiary and procure that no subsidiary shall issue any new
shares to any third party where following any such sale and/or issue more than
24.9% of the issued ordinary share capital of the relevant subsidiary would be
owned by one or more third parties unless the terms of such sale and/or issue
(including the terms upon which any new shareholder may enter into contracts
with such subsidiary) have been previously approved in writing by the Majority
Lenders, such approval not to be unreasonably withheld. In no event shall any
such new shareholder be a Sponsor or any affiliate of a Sponsor unless
previously approved in writing by the Majority Lenders (such approval not to be
unreasonably withheld).
21.2.7 Shareholders' Account: make any payments to the Shareholders' Account
other than in compliance with the provisions of this Agreement;
21.2.8 Capital Expenditures: incur any Capital Expenditures at any time or
in any amount of more than EUR 2 million in excess of the Project Budget for
that financial year other than with the consent of the Majority Lenders;
21.2.9 Capital Reserves: repay any capital reserves set up for Kvaerner
plc's, Thyssen Rheinstahl Technik Projektgesellschaft mbH or any Shareholder's
waivers of repayment claims under the shareholder loans granted by them to the
Borrower unless (a) the tax audit of the accounts has accepted the amount of
such capital reserves and (b) they are funded out of the Shareholders' Account
and such capital reserves shall be identified in a separate balance sheet item;
21.2.10 Shareholder Loans: (a) prior to the First Repayment Date pay
interest on any Shareholder Loans and thereafter only in accordance with the
terms hereof and of the Shareholder Loans and (b) prepay, repay, redeem,
purchase or otherwise acquire any Shareholder Loans prior to the Tranche A Final
Repayment Date and the repayment in full of each outstanding Advance hereunder;
21.2.11 Financial Indebtedness: incur, create or permit to subsist or have
outstanding any Financial Indebtedness or enter into any agreement or
arrangement whereby it is entitled to incur, create or permit to subsist any
Financial Indebtedness other than, in each case, Permitted Financial
Indebtedness;
21.2.12 Encumbrances: create or permit to subsist any encumbrance on any of
its assets other than Permitted Encumbrances;
21.2.13 Mergers: split, merge or consolidate with any other person, enter
into any demerger transaction, or participate in any other type of corporate
reconstruction without the prior consent of the Majority Lenders and the
Guarantors;
21.2.14 Subsidiaries: create any subsidiary or permit to exist any interest
in any person (whether by shareholding, joint venture, partnership, whether any
income or profits are, or would be, shared or transferred with any other party
or otherwise), other than the Permitted Subsidiaries;
21.2.15 Additional Project Contracts and Amendments to Project Contracts:
(a) enter into any additional material Project Contracts with a value of
more than EUR 4 million or contracts for the sale of energy and the agreement on
reserve electricity services save with the prior written consent of the Majority
Lenders (such consent not to be unreasonably withheld or delayed);
(b) subject to Clause 21.2.16 (Project Specifications), only, amend in any
material respect, or grant any waiver or consent under, any Project Contract if
such amendment, waiver or consent would not reasonably be expected to be
materially adverse in relation to the Borrower's ability to perform its
obligations under the Transaction Documents and/or the validity or
enforceability of the Transaction Documents. In the case of Project Contracts
with a value of more than EUR 4 million or contracts for the sale of energy and
the agreement on reserve electricity services such amendments, waivers and
consents will have to be notified to the Agent in writing seven (7) days in
advance;
(c) cancel or terminate any Project Contract with a value of more than EUR 4
million or any contract for the sale of energy and the agreement on reserve
electricity services (other than the EPC Contract or any contract for the
carrying out of the necessary infrastructure works at the Site), without having
given thirty (30) days prior written notice to the Agent and then only so long
as a replacement contract is in place on terms no less beneficial to the
Borrower as the cancelled/terminated Project Contract; and
(d) cancel, terminate or suspend the EPC Contract or any contract for the
carrying out of the necessary infrastructure works at the Site or (subject
to Clause 21.2.16 (Project Specifications)) grant any waiver or consent under
or amend the same without Majority Lenders' prior written consent;
21.2.16 Project Specifications: make any changes to the design,
specification or configuration of the plant without Majority Lenders' consent
except for such amendments and changes which are in conformity with the EPC
Contract or are of a minor nature, it being understood that any such change
which might result in an increase in the Project Costs in an aggregate amount of
at least EUR 1 million or a delay in a System Start-Up as defined in the EPC
Contract or in Acceptance will not be deemed to be of a minor nature;
21.2.17 Waiver of tests under EPC Contract: waive or materially alter any
test procedures or approve any test results in connection with the tests under
Clauses 16 to 19 of the EPC Contract where this could have an adverse effect on
the Project without Majority Lenders' consent (such consent not to be
unreasonably withheld or delayed);
21.2.18 Acceptance Certificate: issue the Acceptance Certificate as defined
in the EPC Contract without the Agent's consent (such consent not to be
unreasonably withheld or delayed);
21.2.19 Shares: purchase, cancel or redeem any Share Capital, reduce the
Share Capital, issue any Shares otherwise than to an existing Shareholder, grant
any option over or make any offer of Shares to any person or alter any material
rights attaching to the Shares without the Majority Lenders' and the Guarantors'
consent. Their consent is however not required in relation to the offer of
Shares;
21.2.20 Shareholders' Agreement: change its Shareholders' Agreement in any
manner which would be inconsistent with the provisions of any Transaction
Document without Majority Lenders' consent (such consent not to be unreasonably
withheld);
21.2.21 Change of Business: make any material changes to the general nature
of its business as a pulp mill and any business incidental thereto or carry on
any other business which results in any material change to the nature of such
business;
21.2.22 Abandonment: abandon the Project;
21.2.23 Withdrawals from Cash Collateral Accounts: withdraw any moneys on
the Cash Collateral Accounts other than pursuant to the provisions of the
Financing Documents;
21.2.24 Accounts: open or operate any bank accounts other than as
contemplated by this Agreement;
21.2.25 Assignment and Encumbrance of Government Grants: assign, pledge or
otherwise charge, encumber or dispose of its claims, rights and title under and
to the Government Grants except as provided in the Investment Incentives
Assignment Agreement listed in Schedule 9 (Security Agreements);
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21.2.26 Financial Year: change its financial year;
21.2.27 Obligations: incur any material obligations not contemplated by or
permissible under this Agreement or which the Borrower assumes in the ordinary
course of business in connection with the delivery and performance to it or by
it or otherwise, without the prior consent of the Guarantors;
22. INSURANCES
22.1 General
The Borrower will effect through brokers, previously approved in writing by the
Agent, pay the premiums when due, maintain in full force and effect and comply
with all provisions of the insurances for the Construction Period and the
Operation Period, under forms of policies commonly accepted in the industry and
with reputable insurance companies reasonably acceptable to the Agent. Such
insurances include the insurances set out in Schedule 12 (Minimum Insurance
-----------
Schedule) and such other insurances as the Agent specifies are required to be
maintained in connection with the Project in accordance with prudent operating
practice.
22.2 Specific Provisions of the Insurances
The Borrower will provide for the following with respect to all Material
Insurances:
22.2.1 Sole Loss Payee the Security Agent to be named as sole loss payee in
all policies save, in relation to policies relating to third party liability,
where payment is made directly to the third party claiming thereunder in full
and final settlement of his claim. A payment to the loss payee in accordance
with this Clause shall, to the extent of that payment, be made to the Insurance
Account or any other account specified to the insurers by the Security Agent and
discharge the liability of the respective insurer to pay the Borrower or other
claimant insured party. The arrangements in this Clause shall continue to apply
notwithstanding the liquidation or insolvency of the Borrower or any of the
insurers;
22.2.2 Waiver the insurers to agree to waive all rights of subrogation or
action against the Security Agent unless any of the members of the executive
board (Vorstand) of the Security Agent acted with gross negligence or wilful
misconduct (Vorsatz);
22.2.3 Reduction of Insurance Proceeds the insurers not to reduce any
insurance proceeds due and payable to the Security Agent (on behalf of itself
and other beneficiaries) as loss payee, save in respect of any unpaid premium if
so required by the respective insurer;
22.2.4 Insurance Claims Assignment cause the insurers to acknowledge that
they have noticed that, by the Insurance Claims Assignment Agreement as set out
in Schedule 9 (Security Agreements), the Borrower assigned to the Security Agent
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(for and on behalf of the Lenders) all its existing and future rights and claims
in and to the Material Insurances (including all claims of whatsoever nature
thereunder and return of premiums and proceeds in respect thereof). The insurers
shall also confirm that they have not received notice of any other assignment,
charge or other encumbrance of the Borrower's rights and claims under the
respective insurance.
22.2.5 Adequate Information the insurers to acknowledge that they have
received adequate information in order to evaluate the risk of insuring the
Borrower in respect of the risks hereby insured;
22.2.6 Cancellation the insurers not to cancel (kundigen) the Material
Insurances during the Construction Period;
22.2.7 Notices the insurers to give in writing to the Security Agent
(a) a thirty (30) days notice of cancellation, non-renewal (whether for
non-payment of premium or otherwise), suspension (if applicable) or adverse
change of terms;
(b) a thirty (30) days notice of any reduction in limits or coverage, any
increase in deductibles or any termination before the original expiry date is to
take effect; and
(c) as soon as any of the insurers becomes aware, notice of any act, event
or omission which such insurer considers may invalidate or render unenforceable
in whole or in part any insurance.
22.2.8 Delivery of Notices and Documents the policies to stipulate that any
notice or document to be served in relation to any policy may be delivered or
sent by
prepaid recorded delivery post (if within the Federal Republic of Germany), by
prepaid airmail (if elsewhere) or facsimile process to the party to be served at
its registered office or at such other address as it may have notified to the
other parties in writing in accordance with this Clause. Any such notice will be
deemed to be given as follows:
(a) if delivered by hand or by mail, when delivered; and
(b) if by facsimile when transmitted, but only if, immediately after the
transmission, the sender's fax machine records the correct answerback;
22.2.9 Governing Law and Jurisdiction the insurance policies to be governed
by German law and each of the insurers and co-insured to agree that any legal
proceedings arising out of or in connection with the policies will be brought in
the exclusive jurisdiction of a German court.
22.3 Insurance Documentation
The Borrower will promptly provide to the Security Agent copies of all cover
notes and policies (including endorsements) issued from time to time in relation
to each insurance, and of all changes requested or effected thereto, and, if so
requested by the Security Agent, of placing slips and all documents disclosed or
disclosable to the insurers of each insurance and relating to claims notified or
notifiable to insurers or the insurance brokers. In addition, the Borrower will
promptly deliver to the Security Agent the originals of all policies (including
endorsements) and placing slips.
22.4 Inspection Right
The Security Agent or any of its representatives or the Advisers will be
entitled to review from time to time the compliance of the insurances effected
by the Borrower with the above provisions and the provisions contained in the
Minimum Insurance Schedule and the Borrower undertakes to co-operate with the
Security Agent or any of its representatives or the Advisers, respectively, in
this respect and to furnish to it all information requested by it for such
purpose.
22.5 Broker's Letter of Undertaking
The Borrower will procure that every insurance broker who effects an insurance
writes a broker's letter of undertaking (substantially in the form set out in
Schedule 16 (Broker's Letter of Undertaking)) to the Security Agent. Such
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letters have to be provided prior to Financial Close with respect to insurances
----
during the Construction Period and at least five (5) Banking Days prior to
inception with respect to insurances during the Operation Period.
22.6 Changes to Insurance Programme
22.6.1 If any variation is proposed to be made to the terms of any
insurance, the Borrower will give at least thirty (30) days prior written notice
thereof to the Security Agent. No variation to any insurance should be effected
or agreed by the Borrower until the Security Agent notifies the Borrower in
writing either that the variation is not material to the Lenders or is otherwise
agreeable to the Security Agent. The Security Agent will not unreasonably
withhold or delay its agreement after obtaining any advice that it deems
appropriate in considering the Borrower's request.
22.6.2 No Event of Default occurs to the extent the Borrower has given
notice pursuant to Clause 22.6.1 (Changes to Insurance Programme), and for so
long as, cover required to be maintained is not available to the Borrower in the
international insurance or reinsurance market on what the Security Agent accepts
in writing to the Borrower to be reasonable commercial terms. In determining
whether such cover is available on reasonable commercial terms, the Security
Agent shall have on-going regard to the scope of such insurance, its cost in the
context of the financing of the Project and the direct and indirect interests of
the Lenders under the Financing Documents.
22.7 Notification
The Borrower will promptly notify the Security Agent and the insurers of any
increase or material change in any risk insured under any Material Insurance.
22.8 Claim Handling
The Borrower will
(a) diligently pursue any valid claim under any insurance,
(b) promptly notify the Security Agent and the insurers of any matter for
which it may be entitled to a claim under any insurance,
(c) keep the Security Agent informed on a regular basis regarding progress
towards settling any such claim,
(d) take account of any representations made by the Security Agent in
relation to any such claim, and
(e) not negotiate, compromise or settle any claims with a potential value in
excess of EUR 5 million without the written consent of the Security Agent, such
consent not to be reasonably withheld or delayed.
22.9 Renewals
The Borrower will, at least thirty (30) days prior to the renewal of any
insurance satisfy the Security Agent that the cover proposed to be effected for
the renewal period will, on and after the renewal date, comply with the
requirements of the Minimum Insurance Schedule.
22.10 Changes in Insurer Security
If an insurer under a Material Insurance ceases to carry a claims paying rating
from Standard & Poor's Corporation of at least A-, or an equivalent rating from
such other rating agency approved by the Security Agent, the Borrower will
promptly inform the Security Agent thereof and, at the request of the Security
Agent, promptly replace the affected cover with cover from another insurer, or
insurers, reasonably acceptable to the Security Agent and terminate the affected
insurer's participation in the risk, provided that there will at no time be any
period when any relevant risk is not insured as required by the Financing
Documents.
22.11 Lender's Right to Insure if Borrower Defaults
If at any time and for any reason any insurance is not in full force and effect
on the terms or for the insured values required under the Financing Documents,
then the Security Agent shall forthwith be entitled, at the cost and expense of
the Borrower, to procure and pay for such insurance as the Borrower should have
effected or procured pursuant to the terms hereof or at any time whilst such
failure is continuing.
22.12 Disputes over Availability of Cover Borrower Defaults
Any disagreement between the Borrower and the Security Agent over the
availability of cover in the international insurance market will be referred to
an independent expert appointed with the agreement of the Borrower and the
Security Agent, or, if the parties cannot so agree within 20 days of the notice
given by the Borrower under the covenant referred to in Clause 22.6 (Changes to
Insurance Programme), to a person nominated at the request of either party by
the President of the German Association of Insurers, in each case acting as an
independent expert. The expert's decision will be final and binding on the
parties hereto. The expert's fees and disbursements will be borne by the
Borrower.
23. EVENTS OF DEFAULT
23.1 Each of following circumstances constitutes an Event of Default for
the purposes of this Agreement, irrespective of whether or not caused by any
reason within the control of the Borrower or any other person:
23.1.1 Payment Obligations: subject to Clause 6.5, failure by the
Borrower to make:
(a) any payment of principal or interest due under the Facility within seven
(7) Business Days from the due date thereof; and
(b) any other payment due under the Financing Documents within five (5)
Business Days from a notification by the Agent of the Borrower's failure to pay;
23.1.2 Representations and Warranties: any representation, warranty or
statement made in any Financing Document, certificate, statement or opinion
delivered by or on behalf of the Borrower hereunder or in connection herewith is
or proves to have been incorrect, untrue or misleading in any material respect
when made and which, if capable of being remedied, has not been remedied within
thirty (30) days from notification by the Agent of such breach;
23.1.3 Covenants: the Borrower or any of its Shareholders breaches any
covenant or material obligation under the Financing Documents which, if capable
of being remedied, has not been remedied within fifteen (15) Business Days from
notification by the Agent of such breach;
23.1.4 Consents and Approvals: any Authorisation necessary to enable the
Borrower to comply with any of its material obligations under the Transaction
Documents and Project is revoked, withheld or modified or is limited in a way
which materially prejudices the validity and enforceability of the Transaction
Documents and/or the ability of the Borrower to meet its obligations thereunder;
23.1.5 EU-Decision, State Guarantee and Government Grants: any of the
EU-Decision, State Guarantee or Government Grants is modified in any material
respect, revoked, withdrawn, withheld or suspended, or does not remain in full
force and effect;
23.1.6 Insolvency and Rescheduling: any cause exists on the basis of which
insolvency proceedings under the German Insolvency Code should be initiated
against the
Borrower, the Borrower commences negotiations with any one or more of its
creditors with a view to the general readjustment or rescheduling of its
indebtedness or makes a composition with its creditors;
23.1.7 Winding-up: (a) the Borrower, (b) while it has any liability under
the Shareholders' Undertaking Agreement any of the Shareholders or any of the
Sponsors or (c) while it has any liability under the RWE Solutions AG Guarantee,
the Direct Agreement or the Parent Company Guarantee RWE Solutions AG takes any
corporate action or any other steps are taken or legal proceedings are started
for its winding-up, dissolution or reorganisation or for the appointment of a
liquidator, receiver, administrator, administrative receiver, conservator,
custodian, trustee or similar officer of it or of any part or all of its
revenues and assets;
23.1.8 Insolvency or Winding-up of EPC-Contractor: the EPC-Contractor during
the Construction Period is unable to pay its debts as they fall due, commences
negotiations with any one or more of its creditors with a view to the general
readjustments or rescheduling of its indebtedness, makes a composition with its
creditors, or takes any corporate action or other steps or legal proceedings are
started for its winding-up, dissolution, re-organisation (except for a solvent
re-organisation previously approved in writing by the Agent) or for the
appointment of a liquidator, receiver, administrator, administrative receiver or
similar officer of it or of any or all of its revenues and assets;
23.1.9 Indebtedness: failure by the Borrower to pay any other Financial
Indebtedness over EUR 100,000 when due or after the expiry of any applicable
grace period unless such payment is contested in good faith by the Borrower;
23.1.10 Obligations of the Borrower: at any time it is unlawful for the
Borrower to perform any of its material obligations under the Transaction
Documents, or to own its material assets or to carry on its business in
materially the same fashion as contemplated in the Financing Documents and such
condition continues for period of sixty (60) days;
23.1.11 Obligations of the Parties to Shareholders' Undertaking Agreement
and the RWE Solutions AG Guarantee: any of the Shareholders or Sponsors (or any
of their successors) fails to comply with any obligation assumed by it in the
Shareholders' Undertaking Agreement and/or RWE Solutions AG (or any of its
successors) fails to comply with any obligation assumed by it in the RWE
Solutions AG Guarantee, the Direct Agreement or the Parent Company Guarantee and
such failure, if capable of remedy, is not remedied within thirty (30) days
after receipt of written notice from the Agent requesting the same;
23.1.12 Change of Control: a Change of Control occurs without the prior
written consent of the Majority Lenders;
23.1.13 The Borrower's Business: the Borrower ceases or threatens to cease
to carry on all or a substantial part of the business it carries on at the date
hereof, abandons or threatens to abandon the Project or disposes of a
substantial part of its business or assets or a substantial part of its business
or assets is seized, nationalised or expropriated or compulsorily acquired by or
under the authority of any government;
23.1.14 Assets of the Borrower: except as permitted by the Financing
Documents, the Borrower ceases to be the sole lawful and beneficial owner of,
and having good title to, any material part of its assets, and such assets or
part thereof, are not re-acquired or replaced in a manner satisfactory to the
Lenders within fifteen (15) days of such cessation;
23.1.15 Acceptance: Acceptance does not occur by the date falling 40 months
after Financial Close;
23.1.16 Default under Transaction Documents: a material default under any of
the Transaction Documents which, if capable of being remedied, has not been
remedied within thirty (30) days in the case of any Financing Document and
ninety (90) days in the case of any Project Contract in each case of
notification by the Agent of such default;
23.1.17 Invalid, Non-binding and Non-enforceable Obligations: a material
provision of the Financing Documents is not, or is contested by a party other
than a Lender to be not, legal, valid, binding and enforceable;
23.1.18 Qualifications in the Auditors' Report: the auditors have made a
qualification in their report and there are reasonable doubts (vernunftige
▇▇▇▇▇▇▇) concerning the continuation of the Borrower's business on a going
concern basis unless within twenty (20) Business Days from the date of the
auditor's report the Borrower has presented a certificate from the auditors
showing that the reasons for the doubts raised have been remedied or sufficient
measures have been taken for their remedy;
23.1.19 Security: any Security ceases to be in full force and effect for any
reason other than:
(a) the assignment of any credit or portion of the finance to which such
Security relates;
(b) the failure to make the required filings or registrations where such
filings or registrations are under the control of the Lenders;
23.1.20 Litigation: any material judgement, award or decision on any
litigation, arbitration, administrative proceedings or governmental or
regulatory investigations, proceedings or disputes is commenced against the
Borrower or its assets which is materially adverse in relation to the Borrower's
ability to perform its obligations under the Transaction Documents and/or the
validity or enforceability of the Transaction Documents unless such judgement,
award or decision is stayed pending appeal without the necessity for the
Borrower to provide any security in connection therewith;
23.1.21 Enforceability of Encumbrance: any encumbrance over any assets of
the Borrower securing an indebtedness of not less than EUR 100,000 becomes
enforceable;
23.1.22 Execution or Distress: any execution (Zwangsvollstreckung) or
distress (Beschlagnahme) is levied against, or an encumbrancer takes possession
of the whole, or any material part of the assets of the Borrower or any event
which under the laws of any jurisdiction has a similar effect is not discharged
within thirty (30) days;
23.1.23 Insurances: Subject to Clause 22.6.2 (Changes to Insurance
Programme), the Borrower fails to maintain the insurances pursuant to the
provisions of Clause 22 (Insurances);
23.1.24 Destruction of Project: the Project or any substantial part thereof
is destroyed or damaged in a manner which is not covered in full by proceeds of
insurance, (excluding any agreed deductibles);
23.1.25 Material Adverse Change: any event or circumstance (or series of
events or circumstances) that have a Material Adverse Effect;
23.1.26 Force Majeure: an Event of Force Majeure occurs or a series of
Events of Force Majeure occur the effects of which continue (on an aggregated
basis) for a period of 230 days under the EPC-Contract.
23.1.27 Registration of Capital Increase: (i) the Borrower has failed to
produce within four (4) Business Days from receipt by it and the notary (who, in
accordance with Clause 2.6.1 of the Shareholders' Undertaking Agreement has
certified the capital increase) of a written confirmation by the Agent that the
Shareholder Contributions have been credited to the Disbursement Account, the
confirmation by the notary required as proof thereof that the registration of
the EUR
15,000,000 has been sent to the commercial register, or (ii) the registration of
the capital increase has been revoked by the Shareholders.
23.2 Acceleration and Cancellation
23.2.1 Upon the occurrence of an Event of Default and at any time thereafter
while such Event of Default is continuing, the Agent may and shall upon the
direction of the Majority Lenders by notice to the Borrower:
(a) declare all or any part of the Advances to be immediately due and
payable or declare all or any part of the Advances to be due and payable on its
demand (whereupon the same will become so payable together with accrued interest
thereon and any other sums then owed by the Borrower under the Financing
Documents);
(b) declare that any unutilised portion of the Facility will be cancelled,
whereupon the Lenders' undrawn Commitments shall be cancelled and each Lender's
undrawn Commitment will be reduced to zero, provided that, notwithstanding the
foregoing, upon the occurrence of an Event of Default specified in Clauses
23.1.5 (Insolvency and Rescheduling), 23.1.7 (Winding Up), the undrawn
Commitments of each Lender will immediately be reduced to zero and all Advances
and other sums then owed by the Borrower hereunder shall become immediately due
and payable; and/or
(c) exercise all rights and remedies under any Financing Document or
instruct the Security Agent to do so.
23.2.2 A notice of the Agent pursuant to Clause 23.2.1 may only be given (a)
if an Event of Default pursuant to Clauses 23.1.1 (Payment Obligations), 23.1.6
(Insolvency and Rescheduling), 23.1.7 (Winding-Up), 23.1.13 (The Borrower's
Business) and 23.1.24 (Destruction of Project) has occurred and is continuing,
or (b) if any other Event of Default has occurred and is continuing only after
careful consideration of the reasonable concerns of the Borrower or in case the
Majority Lenders have determined in their reasonable opinion that due to such
Event of Default the ability of the Borrower to perform any of its obligations
under the Financing Documents has been materially impaired.
23.3 Advances Due on Demand
If, pursuant to Clause 23.2.1(a), the Agent declares all or any part of the
Advances to be due and payable on demand of the Agent, then, and at any time
thereafter within a period of three months, the Agent may by notice to the
Borrower:
(a) require repayment of all or such part of the Advances on such date as it
may specify in such notice (whereupon the same will become due and payable on
the date specified together with accrued interest thereon and any other sums
then owed by the Borrower under the Financing Documents); and/or
(b) select as the duration of any Interest Period which begins whilst such
declaration remains in effect a period of six months or less.
23.4 Waivers
The Lenders may, subject to Clause 23.5.2, waive any Event of Default with the
Majority Lenders' consent upon written request by the Borrower to the Agent.
23.5 Participation of Guarantors
23.5.1 Upon the occurrence of an Event of Default the Agent will promptly
inform the Guarantors thereof.
23.5.2 The Lenders may waive any Event of Default pursuant to Clause
23.4 (Waivers) only with the consent of the Guarantors.
24. AGENT, ARRANGER AND LENDERS
24.1 Appointment And Authorisation
Each Lender hereby irrevocably (except for a removal under Clause 24.15
(Resignation)) appoints the Agent to act as its agent in connection with the
administration of the Facility under the Financing Documents, and irrevocably
(except for a removal under Clause 24.15 (Resignation)) authorises the Agent, to
take such action and to exercise and carry out such rights, discretions,
authorities, powers and duties as are specifically delegated to the Agent in the
Shareholders' Undertaking Agreement, the Security Agreements and the RWE
Solutions AG Guarantee together with such rights, discretions, authorities,
powers and duties as are reasonably incidental thereto, provided that the Agent
will not commence any legal action or proceedings on behalf of any Lender
without such Lenders' consent. Each Lender hereby relieves the Agent from the
restrictions of Sec. 181 BGB in respect of the authority conferred upon it in
this Agreement.
24.2 No Obligation
Neither the Agent nor the Arranger is obliged:
24.2.1 to take any action to ascertain whether any Event of Default has
occurred or is outstanding;
24.2.2 to ascertain the correctness of any representation made by the
Borrower or any other party in connection with this Agreement or any other
Transaction Document;
24.2.3 to inquire as to the performance by the Borrower or any other party
of its obligations under this Agreement or any other Transaction Document, or
any breach of the Borrower or any other party of its obligations under this
Agreement or any other Transaction Document; or
24.2.4 to give notice to the Lenders of any information or event of which
the Agent becomes aware otherwise than by notice given by a party to this
Agreement or to any of the Advisers in accordance with this Agreement.
The Agent will not be deemed to have knowledge of the occurrence of a Event of
Default until it has received notice thereof from a party to this Agreement
describing the Event of Default and stating that the event is an Event of
Default, in which case it will promptly notify the Lenders.
24.3 Reliance
The Agent is entitled to rely on any communication or document believed by it to
be genuine and correct, and on the advice given in connection with this
Agreement by any of the Advisers appointed in connection with this Agreement,
and will not be liable to any of the parties hereto and any of the Lenders for
any of the consequences of such reliance where such reliance is in good faith.
24.2 Information Obligations
Notwithstanding any specific provisions in this Agreement relating to reporting
requirements, the Agent will within the scope of its appointment:
24.4.1 promptly upon receipt notify each of the Lenders affected thereby of
any material information and notice received by it from the Borrower, any of its
Shareholders or any of the Advisers and will, to the extent it has obtained a
sufficient number of photocopies from the Borrower, any of its Shareholders or
such Adviser, supply photocopies of relevant documents to the Lenders;
24.4.2 promptly notify each of the Lenders of the occurrence of an Event of
Default or any default by the Borrower, any of its Shareholders or any other
party in the performance of or compliance with its respective obligations under
this Agreement and the other Transaction Documents of which the Agent has
received notice from a party to this Agreement or any of the Advisers in
accordance with this Agreement.
24.5 Compliance with Legal Provisions
Nothing in this Agreement obliges the Agent to do anything which would or might
in its opinion be contrary to the law of any relevant jurisdiction or render it
liable to any person, and the Agent may do anything which in its opinion is
necessary to comply with any such law.
24.6 Advisers
The Agent may retain and pay for the advice or services of any of the Advisers
or any expert whose advice in its opinion is necessary or appropriate and rely
upon any advice so obtained and shall not be liable to any of the parties hereto
or to any of the Lenders for any of the consequences where such reliance is in
good faith.
24.7 Liability
Neither the Agent nor the Arranger nor any of their respective directors,
officers, employees or agents will be liable for any action taken or omitted by
it, him or them under or in connection with this Agreement, the Security
Agreements, the Shareholders' Undertaking Agreement or any other Transaction
Document and any related documentation except, notwithstanding any other
provision of this Agreement, to the extent of its, his, or their gross
negligence, wilful misconduct or bad faith.
24.8 Agency
The Agent will in performing its functions and duties under this Agreement, the
Security Agreements, Shareholders' Undertaking Agreement and any other
Transaction Document solely act as the agent of the Lenders and will not assume
or be deemed to have assumed any obligation as agent or otherwise for the
Borrower or any of its Shareholders, except as specifically stated herein or in
any other Transaction Document. The Agent will have no liability or
responsibility to the Borrower or any Lender in connection with any failure or
delay in performance or breach by any Lender or Lenders (other than the Agent in
its capacity as a Lender) or the Borrower of any of its obligations under this
Agreement, the Security Agreements, the Shareholders' Undertaking Agreement or
any other Transaction Document.
24.9 No Verification Duties
Neither the Agent nor the Arranger will be responsible for or obliged to verify:
24.9.1 the accuracy and/or completeness of any statements, representations
or warranties made in or in connection with this Agreement, the Security
Agreements, the Shareholders' Undertaking Agreement or any other Transaction
Document;
24.9.2 for any information given to any of the Lenders in respect of the
Borrower or any matter relating to the Facility (including, without limitation,
the Information Memorandum);
24.9.3 the recoverability of any of the sums due or to become due under this
Agreement;
24.9.4 any failure, omission or defect in perfecting any Security, or the
enforceability or value of any Security; or
24.9.5 the legality, validity, effectiveness, adequacy or sufficiency of
this Agreement, the Security Agreements and the other Financing Documents.
24.10 Transaction Analysis
Each Lender acknowledges that it has made its own analysis of this transaction
(including, without limitation, all agreements entered into in connection with
this Agreement) without relying on the Agent or the Arranger and based on such
information as it has deemed appropriate, and has reached its decision to enter
into this Agreement based on its own investigations, and that it will continue
to make its decisions in taking or not taking action under this Agreement based
on such investigations as it shall deem appropriate. Each Lender hereby confirms
that it does not have any objections against any agreements entered into in
accordance with this Agreement.
24.11 Instruction by Majority Lenders
In the exercise of any right or power and in relation to any matter not
expressly provided for by this Agreement, the Security Agreements, the
Shareholders' Undertaking Agreement or any other Transaction Document the Agent
may act (or refrain from acting) in accordance with the instructions of the
Majority Lenders to be given by the Lenders within ten (10) Business Days of the
Lenders having received a respective request from the Agent and will be fully
protected in so doing, except to the extent of its own gross negligence, wilful
misconduct or bad faith. In the absence of such instructions being given, or if
the Agent were not provided with security satisfactory to it, whether by way of
payment in advance or otherwise, against any liability or loss which it may
incur in taking any proceedings or action in connection with this Agreement, the
Security Agreements, the Shareholders' Undertaking Agreement or any other
Transaction Document, then the Agent may act (or refrain from acting) as it
thinks fit provided that it shall only take action while the above period for
the issue of instructions is running if it determines that there is an urgent
need to do so.
24.12 Indemnity
Each Lender will indemnify the Agent and the Arranger on demand from and against
any and all liabilities, losses, damages, costs and expenses of any kind or
nature whatsoever including any VAT thereon which the Agent or the Arranger may
incur other than by reason of its own gross negligence or wilful misconduct in
acting in its respective capacity as Agent or Arranger. Such indemnification
will be made rateably in proportion to each Lender's Commitment.
24.13 Same Rights and Liabilities, Business with the Borrower
In relation to its participation in the Facility which the Agent or any Lender
and/or the Arranger will or may have from time to time, each of them will have
the same rights, liabilities and powers under this Agreement as though it had
not assumed such capacity. The Agent, the Arranger or any Lender or any of their
respective associated companies may engage in any kind of business with the
Borrower or any of their respective associated companies as if it were not the
Agent, a Lender or, as the case may be, the Arranger.
24.14 Designation of New Office
Subject to Clause 24.5 (Compliance with Legal Provisions), the Agent may from
time to time by giving notice to the Borrower and the Lenders designate an
office or branch different from that acting at the time of giving notice, from
which its duties under this Agreement will be performed thereafter provided that
the Borrower will not be obligated to pay any fees, taxes or other costs or
expenses to the extent the same would not have been payable in the absence of
such designation.
24.15 Resignation
The Agent may resign at any time its appointment under this Agreement by giving
written notice thereof to the other parties hereto, and the Agent may be removed
from its position under this Agreement by the Majority Lenders giving written
notice to that effect to the Borrower and the Agent. Any such resignation or
removal shall take effect upon the notification of the acceptance of the
appointment by the successor in its respective position in accordance with
Clause 24.16 (Appointment of Successor).
24.16 Appointment of Successor
In the event of a resignation or removal of the Agent, the Majority Lenders will
be entitled to appoint a successor in the position, upon agreement of the
Borrower. If no such successor has been appointed within 30 days from the notice
of resignation or notice of removal then the Agent will be entitled, upon
agreement of the Borrower, to appoint any reputable and experienced bank or
other financial institution as its successor.
24.17 Acceptance of Appointment
The acceptance of the appointment will be notified by any Lender being appointed
for such purpose by the Majority Lenders to the Agent and upon such notification
the relevant successor will succeed to and become vested with all rights,
powers, privileges and duties of its predecessor. The resigning or removed Agent
will do all such things as may be necessary to give effect to the succession and
will thereupon be discharged from its duties and obligations under this
Agreement (except for those under Clause 24.7 (Liability)), but shall continue
To benefit from the provisions of this Clause 24.7 (Liability) in respect
of any actions or omissions taken in its capacity as Agent. Such discharges
do not exempt the Borrower from any of its liabilities.
24.18 Arranger
The Arranger has no duties or responsibilities whatsoever in connection with the
operation or administration of the Facility.
24.19 Facility Office
The Agent may assume that the Facility Office or, as the case may be, each
Facility Office of each Lender is that identified in Schedule 5 (Lenders and
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Commitments) (or, in the case of a transferee, at the end of the Transfer
Certificate to which it is a party as transferee) until it has received from
such Lender a notice designating some other office of such Lender to replace any
such Facility Office, and the Agent may act upon any such notice until the same
is superseded by a further such notice.
24.20 Missing Communication
The Agent may, if it is unable to obtain instructions or communicate with a
Lender after making reasonable attempts to do so, either refrain from acting as
Agent on behalf of such Lender or take such action on behalf of such Lender as
it in its absolute discretion deems appropriate, and shall not be liable to such
Lender as a result of any such action or inaction.
24.21 Majority Lenders' Decisions
Aside from changes in maturity, amounts payable, size of Commitments, the
definition of Majority Lenders, this Clause 24.21 and as otherwise stated in the
Financing Documents, all amendments, consents and waivers under the Financing
Documents may be given by the Agent acting on the direction of the Majority
Lenders.
25. ADVISERS
25.1 The resignation or dismissal of an Adviser will be in accordance with
its respective mandate.
25.2 Subject to the terms of the relevant mandate the Agent or the Arranger,
as the case may be, will, if so instructed by the Majority Lenders cancel the
appointment of an Adviser.
25.3 If the mandate of an Adviser is terminated prematurely for whatever
reason, the Agent will, with the consent of the Majority Lenders and with the
consent of the Borrower, appoint a successor at terms and conditions which are
as similar to the terms and conditions on the initial mandate as is reasonably
practical, and in such a manner that the duties of the relevant Adviser are
continuously performed.
25.4 The Borrower hereby consents to the appointment of the Technical
Adviser and the Wood Supply Adviser until six (6) months after Acceptance upon
the expiry of its existing mandate.
26. FEES
26.1 Commitment Fee
From the date of signing of this Agreement the Borrower will pay to the Lenders
quarterly in arrears on each 31 March, 30 June, 30 September and 31 December on
the undrawn portion of each Tranche a commitment fee to be calculated at the
following rates:
Tranche A: 0.375% per annum
Tranche B: 0.250% per annum
Tranche C: 0.375% per annum
Tranche D1: 0.375% per annum
Tranche D2 0.375% per annum
Tranche E: 0.375% per annum
26.2 Arranging Fee
The Borrower will pay to the Arranger an arranging fee in accordance with the
Fee Letter.
26.3 Agency Fee
The Borrower will pay to the Agent an agency fee in accordance with the Fee
Letter.
26.4 Federal Guarantee Fee
The Borrower will pay to the Federal Guarantor a guarantee fee on each 1 April
and 1 October. The guarantee fee will be calculated for each half year starting
at these dates at a per annum rate of 0.25 % of the amount guaranteed by the
Federal Guarantor at those dates and is payable to C&L Deutsche Revision AG, D
sseldorf, Anderkonto Bundesminister der Finanzen, account 301 51 12 with
Westdeutsche Landesbank Girozentrale, by making reference to the State Guarantee
number. An amount of 0.25 % of the maximum guaranteed amount is due and payable
by the Borrower in accordance with the grading granted by the Federal Guarantor.
The Borrower will promptly inform the Agent of any payments made pursuant to
this Clause 26.4 (Federal Guarantee Fee).
26.5 State Guarantee Fee
The Borrower will pay to the State Guarantor a guarantee fee on each 1 April and
1 October. The guarantee fee will be calculated for each half year starting at
these dates at a per annum rate of 0.25 % of the amount guaranteed by the State
Guarantor at those dates and is payable to C&L Deutsche Revision AG, Dusseldorf,
Anderkonto Bundesminister der Finanzen, account 301 51 12 with Westdeutsche
Landesbank Girozentrale, by making reference to the State Guarantee number. An
amount of 0.25 % of the maximum guaranteed amount is due and payable by the
Borrower in accordance with the grading granted by the State Guarantor. The
Borrower will promptly inform the Agent of any payments made pursuant to this
Clause 26.5 (State Guarantee Fee).
26.6 VAT
Any fee referred to in this Clause 26 (Fees) is exclusive of any VAT or other
tax which might be chargeable in connection with that fee.
27. COSTS AND EXPENSES
27.1 Transaction Expenses
The Borrower will, from time to time on demand of the Agent, reimburse the
Agent, the Security Agent and the Arranger for all reasonable external costs and
expenses properly incurred (including travel and out-of-pocket expenses,
notarial fees, the reasonable fees for the Advisers and counsel to the Agent and
related expenses) on a full indemnity basis together with any VAT thereon
incurred by them in connection with:
(a) the carrying out of all due diligence enquiries and searches in
connection with the Transaction Documents;
(b) the negotiation, preparation and execution and translation of each of
the Financing Documents and if any such party is involved in the negotiation of
any Project Contract, the relevant Project Contract;
(c) the completion and performance of the transactions contemplated in the
Transaction Documents;
(d) the activities of C&L pursuant to Clause 21.1.17 (Compliance with
Conditions for State Guarantee and Government Grants);
(e) any initial syndication (excluding any legal counsel's fees of any
transferee under the syndication);
(f) the conduct of any audits; or
(g) any exercise or attempted exercise of any right, power or remedy under
any Financing Document or any failure to exercise any right, power or remedy
except where that failure is due to the wilful misconduct or gross negligence
of, as the case may be, the Arranger, the Agent or the Security Agent;
in each case subject to the terms of any agreement then made by the Borrower and
the Agent relating to such costs and expenses.
27.2 Preservation and Enforcement of Rights
The Borrower will, from time to time on demand of the Agent reimburse the
Lenders, the Agent, the Security Agent and the Arranger for all reasonable costs
and expenses (including reasonable legal fees) on a full indemnity basis
together with any VAT thereon incurred by them in connection with the
preservation and/or enforcement of any of the rights of the Agent, the Security
Agent or the Lenders under the Financing Documents and any document referred to
in the Financing Documents.
27.3 Registration Fee
The Borrower will pay all registration and other fees to which the Financing
Documents, any other document referred to in the Financing Documents or any
judgment given in connection therewith is or at any time may be subject and
shall, from time to time on demand of the Agent, indemnify the Lenders, the
Agent and the Security Agent against any liabilities, costs, claims and expenses
resulting from any failure to pay or any delay in paying any such fees.
27.4 Amendment Costs
If the Borrower requests any amendment, waiver or consent then it will, within
five (5) Business Days of demand by the Agent, reimburse the Lenders for all
reasonable external costs and expenses (including reasonable legal fees of one
law firm for the Lenders selected by the Agent) together with any VAT thereon
incurred by such Lender in responding to or complying with such request.
27.5 Lenders' Liabilities for Costs
If the Borrower fails to perform any of its obligations under this Clause 27
(Costs and Expenses), each Lender will, in proportion to its aggregate
participation in the Advances (or, if no Advances have been made, the Facility)
for the time being (or, if the Advances have been repaid in full, immediately
prior to the final repayment), indemnify the Agent (or as the case may be the
Security Agent) against any loss incurred by it as a result of the failure and
the Borrower will immediately reimburse each Lender for any payment made by it
pursuant to this Clause 27.5 (Lenders' Liabilities for Costs).
28. INDEMNITY AND BREAKAGE COSTS
28.1 Indemnity
The Borrower undertakes to indemnify the Lenders, the Agent and the Security
Agent, except where any such costs, loss, expense or liability results from a
Lender's, the Agent's and the Security Agent's gross negligence, wilful default,
bad faith or the breach of any of a Lender's, the Agent's and the Security
Agent's obligations under the Financing Documents against:
28.1.1 any reasonable cost, claim, loss, expense (including reasonable legal
fees) or liability together with any VAT thereon, which it may sustain or incur
as a consequence of the occurrence of any Event of Default or any default by the
Borrower in the performance of any of the obligations expressed to be assumed by
it in any of the Transaction Documents; and
28.1.2 any reasonable cost or loss it may suffer as a result of any claim or
proceeding against it relating to its involvement in the transactions
contemplated hereby or any use of the proceeds of the Facility.
28.2 Breakage Costs
28.2.1 If:
(a) any payment is made otherwise than on the last day of an Interest Period
applicable thereto;
(b) any other payment is made otherwise than on the due date therefor;
(c) any Advance requested cannot be made because the Borrower has failed to
fulfil a condition precedent; or
(d) the Borrower refuses to accept a requested Advance,
then the Borrower will pay to the Agent for the account of each Lender to which
such payment is made or who participated in the Advance requested, such
additional amount as the relevant Lender may reasonably certify as being
necessary to compensate it for any loss (excluding however the Margin) or
expense incurred on account of funds borrowed, funds contracted for or utilised
to fund its participation in the amount so paid or the Advance so requested,
which it has suffered or incurred as the result of such amount not having been
paid on the last day of such Interest Period or on its due date or the Advance
not having been disbursed or accepted, as the case may be.
28.2.2 The Borrower will pay to the Agent for the account of the Hedging
Counterparty to which such payment is made, such additional amount as the
Hedging Counterparty may reasonably certify as being necessary to compensate it
for any loss or expense arising as a result of the termination, in whole or in
part, of any Hedging Agreement entered into in relation to any amounts cancelled
or prepaid hereunder.
29. SET-OFF
Each Lender may set off any matured obligation owed by the Borrower under this
Agreement against any obligation owed by the Lender to the Borrower, regardless
of the place of payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Lender may convert either
obligation at a market rate of exchange in its usual course of business for the
purpose of set-off.
30. PRO-RATA SHARING
30.1 If at any time the proportion received or recovered by any Lender by
way of set-off or otherwise (other than through the Agent in accordance with
Clause 9 (Payments)) in respect of its portion of any amounts due from the
Borrower to the Lenders under this Agreement is greater than the proportion
thereof which the Lender would have received through the Agent if distributed in
accordance with Clause 9 (Payments) (the difference between the amount received
or recovered (after deduction of any costs incurred by the Lender in connection
with such receipt or recovery) by the Lender and the amount which the Lender
would have received or recovered had the recovery been received through the
Agent if distributed in accordance with Clause 9 (Payments) hereinafter called
the "Excess Amount"), then:
30.1.1 such Lender will promptly notify the Agent and pay to the Agent an
amount equal to the Excess Amount within three (3) Business Days of such
notification;
30.1.2 the Agent will account for such payment to the Lenders (excluding the
Lender having received the Excess Amount) as if it were a payment by the
Borrower on account of the sum owed to the Lenders under this Agreement; and
30.1.3 the liability of the Borrower to the Lenders will be adjusted in
accordance with the distribution of the Excess Amount among the Lenders,
provided that:
(a) if the Excess Amount or any part thereof thereafter has to be repaid to
the Borrower by the Lender having received the Excess Amount, each of the
Lenders will repay to the Agent for the account of such Lender such proportion
of the amount received by it out of the Excess Amount (plus any interest legally
demanded by the Borrower in respect of such proportion) as corresponds to the
proportion of the Excess Amount which has to be repaid by the relevant Lender to
the Borrower; and
(b) sums recovered as a result of litigation started by a Lender to enforce
its rights under this Agreement and resulting in an Excess Amount will only be
shared with all Lenders other than Lenders which were aware of such litigation
and did not join in such litigation without being legally prevented from doing
so.
31. ASSIGNMENTS AND TRANSFERS
31.1 Assignments and Transfers by the Borrower
The Borrower is not entitled to assign or transfer all or any of its rights,
benefits and obligations under the Financing Documents.
31.2 Assignments and Transfers by the Lenders
31.2.1 Each of the Lenders (a "Transferor") may at any time assign all its
rights and benefits under this Agreement or transfer its rights and obligations
under this Agreement in whole or in part to members of the European Central Bank
System, banks, financial service providers, financial institutions, insurance
companies, institutional investors, funds, pension funds, public pension schemes
and similar institutions (a "Transferee") subject to Clause 31.2.2 and any such
transfer will comprise a pro rata share of the entirety of the Transferor's
rights and obligations in relation to this Agreement. Participations in any
disbursement of an Advance may not be transferred independently from
corresponding participations in Commitments.
31.2.2 A transfer will only be permissible:
(a) if the amount of the Commitment and/or Advance, as the case may be,
under the Facilities which is transferred is not less than EUR 10 million
applied rateably across the Tranches and in any particular Tranche rateably
between the Transferor's share in each outstanding Advance thereunder and its
undrawn Commitment in relation thereto;
(b) with the consent of the Borrower, such consent not to be unreasonably
withheld provided that consent will not be required if such transfer is made to
an affiliate (belonging to the same group of companies within the meaning of
Sec. 18 AktG) of a Lender or to another Lender provided there are no adverse tax
or other detriments (e.g. Germany's thin capitalisation rules, Sec. 8a KStG) to
the Borrower; and
(c) following such transfer the circumstances envisaged in Clauses 12
(Illegality) or 13 (Increased Costs) would neither apply, nor reasonably be
expected to apply and the Borrower would not have, and would not reasonably be
expected to have, any obligations under Clause 14.1.2 (Taxes).
31.2.3 A transfer will only become effective upon execution by the
Transferor and the Transferee and countersignature by the Agent of a transfer
certificate in the form of Schedule 14 (Transfer Certificate) (the "Transfer
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Certificate") or, if later, at the time specified in the Transfer Certificate
and the payment by the Transferee of a transfer fee of EUR 1,000. Upon the
transfer becoming effective, and for such part of the Transferor's rights and
obligations, as is transferred, the Transferor shall be released from its
obligations under the Financing Documents and all other related documentation,
and its rights and obligations under such documents shall transfer to and vest
in the Transferee provided that it will be the sole responsibility of the
Transferee to ensure that any additional action which may be required for
securing the valid transfer to it of any rights in respect of Security is taken.
31.2.4 The Transferor will give prompt notice of any proposed transfer to
the Agent who will promptly inform the Borrower.
31.2.5 The Agent will promptly inform the Borrower of any perfected
transfer.
31.2.6 The Borrower will undertake all reasonable efforts to assist the
Arranger in all acts in connection with a syndication pursuant to this Clause
31.2 (Assignments and Transfers by the Lenders).
31.2.7 The Guarantors must consent to any transfer by the Lenders provided
that consent shall not be required if the transfer is to a credit institution or
branch of a credit institution within the European Union and the Transferor
assumes the Transferees' rights and obligations under the Financing Documents on
a fiduciary basis.
31.3 Disclosure of Information
The Agent may disclose to any actual or potential assignee, participant or
Transferee or to any person who may otherwise enter into contractual relations
with such bank or financial institution in relation to any of the Financing
Documents such information about the Borrower or such details of the Project
Contracts as the Agent considers appropriate provided that such person has
executed and delivered to the Borrower a confidentiality undertaking reasonably
satisfactory to the Borrower. The Agent will not in any way be liable or
responsible for such information not being kept confidential by such proposed
assignee, participant or Transferee or other person if a reasonable
confidentiality undertaking was obtained prior to such disclosure.
32. SUB-PARTICIPATIONS
32.1 Each Transferor may, in accordance with standard banking practices,
grant at any time sub-participations with respect to all or any part of its
rights and claims under this Agreement to Transferees and may make dispositions
with respect to such rights and claims.
32.2 Clauses 31.2.4 , 31.2.7 (Assignment and Transfers by the Lenders) and
31.3 (Disclosure of Information) apply mutatis mutandis.
33. CALCULATIONS AND EVIDENCE OF DEBT
33.1 Basis of Accrual
Unless otherwise provided, interest and Fees payable per annum will accrue from
day to day and be calculated for the actual number of days elapsed and on the
basis of a year of 360 days.
33.2 Prima Facie Evidence
33.2.1 In any legal action or proceeding arising out of or in connection
with this Agreement, the entries made in the accounts maintained with the Agent
and/or the Lenders are, in the absence of manifest error, prima facie evidence
of the existence and amounts of the specified obligations of the Borrowers.
33.2.2 A certificate of and determination by the Agent, Security Agent or a
Lender as to the interest rate and amounts owed under the Financing Documents
are, in the absence of manifest error, prima facie evidence of the existence and
amounts of the specified obligations of the Borrower.
34. NON-APPLICABILITY OF SEC. 181 BGB
Sec. 181 BGB does not apply to any authorisation the Borrower gives to the
Arranger, Agent, Security Agent and Lenders.
35. FORM REQUIREMENTS AND AMENDMENTS
35.1 No oral agreements (Nebenabreden) have been made.
35.2 Any modification or amendment of this Agreement, including this Clause,
and any waiver by the Agent or any of the Lenders of its rights under this
Agreement, must be made in writing.
35.3 Any modification or amendment of this Agreement needs the Guarantors'
consent.
36. CONDITIONS OF THE STATE GUARANTEE
The conditions of the State Guarantee as set out in Schedule 10 (State
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Guarantee) are incorporated in this Agreement, even if they are not explicitly
provided for in this Agreement. In the case of any discrepancies between the
conditions of the State Guarantee and the terms of this Agreement, the former
will apply.
37. REMEDIES AND WAIVERS, CUMULATIVE RIGHTS, PARTIAL INVALIDITY
37.1 Remedies and Waiver
No failure to exercise, nor any delay in exercising, on the part of the Lenders,
any right or remedy under any Financing Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy prevent
any further or other exercise thereof or the exercise of any other right or
remedy.
37.2 Cumulative Rights
The rights and remedies provided in the Financing Documents are cumulative and
not exclusive of any other rights and remedies provided in the Financing
Documents or by law.
37.3 Partial Invalidity
Should any provision of this Agreement be invalid or unenforceable, in whole or
in part, or should any provision later become invalid or unenforceable, this
shall not affect the validity of the remaining provisions of this Agreement. In
lieu of the invalid or unenforceable provision another reasonable provision
shall apply, which as far as legally possible comes as close as possible to the
intention of the contracting parties, or to what would have been their
intention, in correspondence with the spirit and the purpose of this Agreement,
had the parties upon entering into this Agreement taken into consideration the
invalidity or unenforceability of the respective provision. The same shall apply
mutatis mutandis to fill possible gaps in this Agreement.
38. NOTICES
38.1 Communications in Writing
Each communication to be made by the parties hereto under this Agreement or any
other Financing Document that does not contain a provision comparable to this
Clause 38.1 will be made in writing and, unless otherwise stated, will be made
by fax, letter or e-mail. Each communication will be in German or
English.
38.2 Addresses
Any communication or document to be made or delivered by the parties hereto
pursuant to this Agreement or to any other Financing Document that does not
contain a provision comparable to this Clause 38.2 will (unless the recipient of
such communication or document has, by fifteen (15) days' written notice to the
Agent, specified another address or fax number) be made or delivered to the
address set out below:
(a) to the Borrower:
Zellstoff ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇
▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
attn.:▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel.: +49 - (0) 39321 - 50321
Fax.: +49 - (0) 39321 - 50422
(b) to the Arranger:
Bayerische Hypo- und Vereinsbank ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇ (▇▇▇▇)
▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇
attn.: Marc Thumecke
Tel: +49 - ▇▇ ▇▇▇ ▇▇▇▇▇
Fax: +49 - ▇▇ ▇▇▇ ▇▇▇▇▇
(c) to the Agent and/or Security Agent:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇- ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇ (FPA13)
D - 80538 Munchen
attn.: FPA Agency
Tel: +49 -89-378 29541
Fax: +49 -89 ▇▇▇ ▇▇▇▇▇
(d) to the Lenders:
to the contact addresses mentioned in Schedule 5 (Lenders
and Commitments). ----------
38.2.2 Communications or documents addressed to C&L in connection with this
Agreement or any other Financing Document, not containing a provision
corresponding to this Clause 38.2, shall be addressed to it at:
C&L Deutsche Revision AG
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
D-40227 Dusseldorf
attn.: Katharina VoB
Tel.: +49 - (0) 211 - ▇▇▇ ▇▇▇▇
Fax.: +49 - (0) 211 - 981 2810
38.3 Delivery
Any communication or document to be made or delivered by one person to another
pursuant to the Financing Documents will (if by way of fax) be deemed to have
been received when transmission has been completed and evidenced by a positive
transmission statement (and, if such date is not a Business Day or if
transmission is completed after 5.30 p.m. in the place of receipt on a Business
Day, will be deemed to have been received on the next Business Day) or (if by
way of letter) deemed to have been delivered when left at that address or, as
the case may be, ten days after being deposited in the post postage prepaid in
an envelope addressed to it at that address, provided that any communication or
document to be made or delivered to the Agent will be effective only when
received by its agency division and then only if the same is expressly marked
for the attention of the department or officer identified with the Agent's
signature below (or such other department or officer as the Agent shall from
time to time specify for this purpose).
39. GOVERNING LAW
This Agreement will be governed by, and construed in accordance with, the laws
of the Federal Republic of Germany.
40. JURISDICTION
The exclusive place of jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes which may arise out of or in connection
with this Agreement is Munich. The Lenders, the Agent and the Security Agent
may, however, also commence proceedings before any other court in which assets
of the Borrower are located. Mandatory places of jurisdiction remain unaffected.
41. COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which taken
together constitute one and the same instrument.
SCHEDULE 1
DRAWDOWN REQUEST
[Borrower's Letterhead]
To: Bayerische Hypo- und Vereinsbank AG
Attn: FPA Agency
Telefax: +49 - 89 - 378 - 41517
Date: [ ]
We refer to the USD 827,950,000 facility agreement dated August 26, 2002 whereby
a facility has been made available to Stendal Zellstoff GmbH by [a group of
banks] on whose behalf Bayerische Hypo- und Vereinsbank AG is acting as agent in
connection therewith (such agreement as from time to time amended being referred
to herein as the "Facility Agreement"). Terms defined in the Facility Agreement
shall have the same meanings herein unless specified otherwise herein.
Pursuant to Clause 3.1 of the Facility Agreement, we hereby request the
following drawdown under
[ ] Tranche A
[ ] Tranche B: [ ] Sub-Tranche B1
[ ] Sub-Tranche B2
[ ] Sub-Tranche B3
[ ] Sub-Tranche B4
[ ] Tranche C
[ ] Tranche D1
[ ] Tranche D2
[ ] Tranche E
of the Facility Agreement:
Drawdown Date:
----------------------------
Interest Period:
----------------------------
Amount of Advance: EUR
--------------------
The Advance will be used for the following specific purposes:
Tranche A: [Project Construction Costs, Development Costs],
in particular
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
an amount of EUR [*] hereof are Post-Acceptance Costs
regarding Project Construction Costs.
Tranche B[1, 2, 3]: [Financing Costs, start-up costs as well as construction
costs and development costs which are not financed under
Tranche A], in particular
---------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
Tranche B4: Working Capital Costs of Borrower, in particular
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
An amount of EUR [] hereof are Post-Acceptance Costs.
Tranche C: Funding of the Debt Service Reserve Account
Tranche D1: Financing of Project Construction Costs, in particular
------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Tranche D2: Financing of Cost Overruns/shortfall in Government Grants post
Acceptance/prepayment of Tranche A for EU-Equity Test,
in particular
------------------------------------------------
--------------------------------------------------------------
Tranche E: [Bridge Financing of costs in relation to the Project for which
Government Grants are to be received, recoverable VAT
payments on Project Construction Costs], in particular
-----
---------------------------------------------------------------
---------------------------------------------------------------
The amount of the Advance shall be credited to the Disbursement Account.
We hereby confirm that
1. the representations and warranties pursuant to Clause 16.1
(Representation and Warranties) of the Facility Agreement are correct as at
the date hereof and will be correct immediately after the Advance is
made;
2. no Event of Default or Potential Event of Default as set out in Article
21 of the Facility Agreement has occurred and is continuing or might result from
the making of the Advance;
3. no Material Adverse Effect has occurred and is continuing;
4. Assurance of Overall Financing is still fulfilled;
5. the drawdown conditions for the requested Advance have been met unless
otherwise waived pursuant to Clause 3.3.2 (Drawdown Conditions) of the Facility
Agreement.
Zellstoff Stendal GmbH
by:
---------------------------
SCHEDULE 2
CONDITIONS FOR THE FIRST DRAWDOWN
The following documentation and information in form and substance satisfactory
to the Agent has been received by the Agent:
1. A certified and up-to-date copy of the commercial register extract and
the articles of association of the Borrower, RWE-IN, AIG, FAHR, ▇▇▇▇▇▇
International and SP Holding.
2. A copy of the corporate authorisations and/or shareholder resolutions of
the Borrower relating to the execution, delivery and performance of all
Financing Documents to which it is a party.
3. A certified copy of the Secretary Certificates of the Corporate Secretary
of ▇▇▇▇▇▇ International:
(a) authorising the execution, delivery and performance of all Financing
Documents to which ▇▇▇▇▇▇ International is a party as approved by ▇▇▇▇▇▇
International's board of trustees; and
(b) setting out the names and signatures of the authorised signatories for
the signing of such documents duly certified to be true and correct.
4. Specimen signatures of the persons authorised to sign the Financing
Documents and notices thereunder.
5. Original executed copies of the Transaction Documents, in each case, in
full force and effect (with respect to the Hedging Agreements, however, only the
agreement for the interest rate swap other than
(a) in the case of the Transaction Documents, which will be concluded or
be in full force and effect upon first drawdown hereunder and
(b) in the case of the EPC Contract, which will be in full force and
effect upon the payment of the down payment under the EPC Contract,
together, in each case, with any necessary notices of assignment and
acknowledgements thereof in form and substance acceptable to the Agent,
registrations (save for the land charges to be created) etc in each case, in
full force and effect.
6. Evidence that the Shareholders have paid into the Disbursement Account
the following funds:
(a) EUR 14,744,354 in the form of equity in respect of a subscription
for Share Capital; and
(b) EUR 37,520,412 million in the form of Shareholder Loans,
and have made Shareholder Loans in the amount of EUR 17,735,234.
7. Evidence that the Government Grants for the Project as contemplated in
the Investment and Financing Plan in an amount of not less than EUR 274,7
million are available of which EUR 109,2 will be given as direct grants
(GA-Zuschuss (Investment Incentives)) by the State of Sachsen-Anhalt and the
Agent is satisfied that EUR 165,5 million as Investitionszulagen (Tax Grants) by
the Federal Republic of Germany will be granted, both approved by EU
notification, for the Project in favour of the Borrower.
8. A copy of the EU-Decision the contents of which is satisfactory to the
Agent and its legal advisors.
9. The audited Financial Model and the agreed Base Case and the model
auditors' report thereon as well as the Investment and Financing Plan.
10. Provision of the Amortisation Schedule.
11. The Project Budget in accordance with the Financial Model setting out
all costs over the Construction Phase.
12. Execution by the parties thereto of the letter setting out the Hedging
Strategy.
13. Uncontested (nicht angefochten) official approval of the subsidies (F
ordermittelzuwendungsbescheid) to be granted by the State of Sachsen-Anhalt to
the city of Arneburg with respect to infrastructure measures.
14. Evidence from RWE-IN satisfactory to the Agent that such part of the
Owner's Scope in relation to the EPC Contract required to have been completed
prior to first drawdown has been fulfilled.
15. All Authorisations required for the Project and the performance of the
Borrower's obligations under the Transaction Documents required as of the first
Drawdown Date as contemplated by Clause 16.1.6 (Authorisations) have been
obtained.
16. Written confirmation by the Borrower that the official approval of the
plan (PlanfeststellungsbeschluB) has not been contested (nicht angefochten) and
all Authorisations required for the Project and the performance of the
Borrower's
obligations under the Transaction Documents required as of the first Drawdown
Date as contemplated by Clause 16.1.6 (Authorisations) have been obtained. The
Borrower will further present copies of the official approval of the
plan (PlanfeststellungsbeschluB) and the other Authorisations required
for the Project and the performance of the Borrower's obligations under the
Transaction Documents required as of the first Drawdown Date as
contemplated by Clause 16.1.6 (Authorisations).
17. Written confirmation from the Technical Adviser and the Wood Supply
Adviser and an auditor acceptable to Agent that the Development Costs are
reasonable.
18. Delivery of final reports from the Technical Adviser and the Wood Supply
Adviser and the Pulp Market Adviser satisfactory to the Agent.
19. Delivery of plan concepts prepared by the Borrower regarding wood
supply, logistics (and sales).
20. Presentation of wood supply Letters of Intent (LOI) covering, together
with own procured volumes, 1.25x the required wood volume of 3 Mio. M3.
21. Report by the Insurance Adviser containing, inter alia, the confirmation
that the insurances entered into are satisfactory.
22. Brokers' letter(s) of undertaking, insurance cover notes and agreed
draft policy wordings satisfactory to the Insurance Advisor.
23. Presentation of clearance letter by the German Federal Cartel Office
(Bundeskartellamt) concerning a positive decision on the capital increase in the
Borrower.
24. The most recent audited financial statements of the Borrower.
25. The most recent audited accounts of each of the Sponsors and
Shareholders.
26. Written confirmation by Kvaerner plc that, vis-a-vis the Borrower, they
only have one claim in the amount of EUR 478,687, by Thyssen Rheinstahl Technik
Projektgesellschaft mbH that they only have claims in the amount of EUR
2,648,000 (compensation payment) and EUR 570,646 for ancilliary costs for which
Thyssen Rheinstahl Technik GmbH and its successor Thyssen Rheinstahl Technik
Projektgesellschaft mbH have provided funds to the Borrower in connection with
the purchase of the Site.
27. Written confirmation by RWE-IN that the profit loss transfer agreement
between RWE AG and RWE Solutions AG dated 27/29 June 2000 is in full force and
effect at Financial Close.
28. Evidence that all real estate necessary for the construction of the
Project has been acquired and is free of any right of third parties (save under
that certain site lease agreement dated 16 May 2002 and made between the
Borrower and AIG and except for Permitted Encumbrances) which may interfere with
the Project as contemplated in the Financing Documents.
29. Delivery of the confirmation by the local office of archeology
(Landesamt fur Archaologie) declaring that the excavations on locations 1 to 4
as set out in Schedule 17 (Archeological Sites) have been finalised.
------------
30. All Advisers fees and amounts payable hereunder have been paid in full
or will be paid in full out of the first Advance.
31. Receipt by the Agent of evidence that the proceeds of the first Advance
will be used, inter alia, to repay indebtedness of the Borrower to Dresdner Bank
AG, to Kvaerner plc in the amount of EUR 478,687; Thyssen Rheinstahl Technik
Projektgesellschaft mbH in the amount of EUR 2,648,000; AIG in the amount of EUR
546,794, RWE-IN in the amount of EUR 1,590,899 and Thyssen Rheinstahl Technik
Projektgesellschaft mbH in the amount of EUR 570,646 for ancilliary costs for
which AIG, RWE-IN and Thyssen Rheinstahl Technik Projektgesellschaft have
provided to the Borrower in connection with the purchase of the Site; and for
payment of the second instalment of the purchase price to AIG for the Site.
32. The Lenders are satisfied in all respects with the construction and
operating arrangements for the Project.
33. Evidence satisfactory to the Agent that SP Holding (on a fully diluted
basis) holds at least 63.58 % of the voting rights in the Borrower and has
control over the board of directors of the Borrower and that SP Holding is a
wholly owned subsidiary of ▇▇▇▇▇▇ International.
34. A legal opinion from Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ with respect to
the obligations of ▇▇▇▇▇▇ International, SP Holding, AIG, FAHR and RWE-IN under
the Transaction Documents to which it is a party.
35. A legal opinion of the Borrower's legal counsel with respect to the
EU-Decision having been validly issued together with a report analysing the
risks of an appeal from this decision.
36. A legal opinion of the Agent's German legal counsel regarding the
transaction in form and substance satisfactory to the Agent.
SCHEDULE 3
GENERAL DRAWDOWN CONDITIONS
1. The Agent has received a duly completed irrevocable Drawdown Request not
later than 11:00 a.m. on the fifth (5th) Business Day before the Drawdown Date
proposed in the Drawdown Request.
2. The representations and warranties continue to be true and correct.
3. No Event of Default or Potential Event of Default has occurred and
remains uncured or unwaived or would occur as a result of the making of the
Advance to be drawn down.
4. Neither of the events mentioned in Clauses 5.1. and 5.1.2 has occurred.
5. All terms and conditions of the State Guarantee are met, no event has
occurred, as a result of which C&L refuses to allow disbursements under this
Agreement and the State Guarantee continues to be valid and in full force and
effect.
6. Certificate by the Insurance Adviser stating that the Project is
sufficiently insured in accordance with the construction progress. Such
certificate is not needed if the respective insurance company is obliged to
inform the Lenders promptly of a termination of any insurance.
7. The Borrower has:
(a) paid all due and unpaid fees and expenses due under any of the
Financing Documents; or
(b) instructed the Lenders to deduct the amount of such fees and
expenses from the amount of the Advance to be disbursed to the
Borrower and the amount of the Advance is sufficient to satisfy
all such outstanding fees and expenses.
SCHEDULE 4
CONDITIONS SUBSEQUENT
(A) Wood and Logistic related Issues
6 months after Employment of a wood supply
first drawdown manager satisfactory to the Agent
10 months after Management, in particular a purchasing director
first drawdown and a harvesting manager, in place satisfactory
10 months after The wood supply company and the logistic company
first drawdown have been incorporated
10 months after Final company agreement of the wood supply company
first drawdown and the logistic company and final agreements to
be entered into between the Borrower and the
Permitted Subsidiaries in place and heads of terms
Regarding the agreements to be entered into the
Borrower and the Permitted Subsidiaries in place
5 months before Presentation of final agreements, including prices
expected Start-up and volume, for 45 % of the required first year
volume of about 2.2 mio.m3 of round wood and chips
volumes with chips making up at least 20% of the
contracted volume
3 months before All staff required for the Start-up with regard to
expected Start-up the wood supply company and the logistic company
has been contracted
2 months before Wood inventory of 230.000 m3 at the mill or road
expected Start-up side
2 months before Presentation of final agreements, including prices
expected Start-up and volume, for 55 % in aggregate of the required
first year volume of about 2.2 mio. m3 of round
wood chips volumes with chips making up at least
20% of the contracted volume
(B) Pulp production related Issues
4 months after Employment of a Pulp Mill manager satisfactory
first drawdown to the Agent
4 months after Technical plans regarding railroad and natural
first drawdown gas connection in place
10 months after Presentation of final personnel recruitment and
first drawdown training plan
11 months after Employment of senior production, sales and
first drawdown maintenance management
3 months before Presentation of a detailed production start-up and
expected Start-up operation plan showing that the whole corp
SCHEDULE 5
LENDERS AND COMMITMENTS
Lender Commitment in Euro
------ --------------------
Bayerische Hypo- und 827,950,000
Vereinsbank ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇ (▇▇▇▇)
▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇
attn.: Marc Thumecke
Tel: +49 -89-378 21654
Fax: +49 -89 ▇▇▇ ▇▇▇▇▇
--------------------------------------------------------
Total Commitments 827,950,000
SCHEDULE 6
MANDATORY COST FORMULAE
1. The Mandatory Cost is an addition to the interest rate to compensate
Lenders for the cost of compliance with (a) the requirements of the Bank of
England and/or the Financial Services Authority (or, in either case, any other
authority which replaces all or any of their functions) or (b) the requirements
of the European Central Bank.
2. On the first day of each Interest Period (or as soon as possible
thereafter) the Agent shall calculate, as a percentage rate, a rate (the
"Additional Cost Rate") for each Lender, in accordance with the paragraphs set
out below. The Mandatory Cost will be calculated by the Agent as a weighted
average of the Lenders' Additional Cost Rates (weighted in proportion to the
percentage participation of each Lender in the relevant Advance) and will be
expressed as a percentage rate per annum.
3. The Additional Cost Rate for any Lender lending from a Facility Office in
a Participating Member State will be the percentage notified by that Lender to
the Agent. This percentage will be certified by that Lender in its notice to the
Agent to be its reasonable determination of the cost (expressed as a percentage
of that Lender's participation in all Advances made from that Facility Office)
of complying in respect of Advances made from that Facility Office.
4. The Additional Cost Rate for any Lender lending from a Facility Office in
the United Kingdom will be calculated by the Agent in accordance with the
formula set out below (expressed as a percentage rate per annum):
A x 0.01
-------- % per annum.
300
Where A is the rate of charge payable by that Lender to the Financial Services
Authority pursuant to the Fees Rules (calculated for this purpose by the Agent
as being the average of the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors, ignoring any minimum fee or zero related
fee required pursuant to the Fees Rules) and expressed in pounds per E 1,000,000
of the Tariff Base of that Lender.
5. For the purposes of this Schedule:
(a) "FEE RULES" means the Banking Supervision (Fees) Regulations 2000
or such other law as may be in force from time to time in respect of the payment
of fees for banking supervision;
(b) "PARTICIPATING MEMBER STATE" means any member state of the
European Communities that adopts or has adopted the euro as its lawful currency
in accordance with legislation of the European Union relating to European
Monetary Union;
(c) "SPECIAL DEPOSITS" has the meanings given to it from time to time
under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by
the Bank of England;
(d) "TARIFF BASE" has the meaning given to it in, and will be calculated
in accordance with, the Fees Rules; and
(e) the resulting figure will be rounded to four decimal places.
6. The Agent may from time to time, after consultation with the Borrower and
the Lenders, determine and notify to all parties hereto any amendments or
variations which are required to be made to this Schedule in order to comply
with any change in law, regulation or any requirements from time to time imposed
by the Bank of England, the Financial Services Authority and/or the European
Central Bank (or, in any case, any other authority which replaces all or any of
their functions) and any such determination shall, in the absence of manifest
error, be conclusive and binding on all the parties hereto.
7. Each Lender shall supply any information required by the Agent for the
purpose of calculating its Additional Cost Rate. In particular, but without
limitation, each Lender shall supply the following information in writing on or
prior to the date on which it becomes a Lender:
(a) its jurisdiction of incorporation and the jurisdiction of its
Facility Office; and
(b) any other information that the Agent may reasonably require for
such purpose.
Each Lender shall promptly notify the Agent in writing of any change to the
information provided by it pursuant to this paragraph.
8. The percentages or rates of charge of each Lender for the purpose of A
above shall be determined b the Agent based upon the information supplied to it
pursuant to paragraph 7 above and on the assumption that, unless a Lender
notifies the Agent to the contrary, each Lender's obligations in relation to
cash ratio deposits, Special Deposits and the Fee Rules are the same as those of
a typical bank from its jurisdiction of incorporation with a Facility Office in
the same jurisdiction as its Facility Office.
9. The Agent shall have no liability to any person if such determination
results in an Additional Cost Rate which over or under compensates any Lender
and shall be entitled to assume that the information provided by any Lender
pursuant to paragraphs 3 and 7 above is true and correct in all respects.
10. The Agent shall distribute the additional amounts received as a result
of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate
for each Lender based on the information provided by each Lender pursuant to
paragraphs 3 and 7 above.
11. Any determination by the Agent pursuant to this Schedule in relation to
the formula, the Mandatory Cost, an Additional Cost Rate or any amount payable
to a Lender shall, in the absence of manifest error, be conclusive and binding
on all of the parties to this Agreement.
SCHEDULE 7
FORM OF ACCOUNT PLEDGE AGREEMENT
ZELLSTOFF STENDAL GMBH
AS BORROWER AND PLEDGOR
AND
BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHAFT
AS ORIGINAL PLEDGEE AND SECURITY AGENT
ACCOUNT PLEDGE AGREEMENT
CONTENTS
CLAUSE PAGE
1. Definitions 123
2. Pledge 129
3. Secured Obligations 130
4. List of Bank Accounts 132
5. Enforcement of the Pledges 132
6. Right of Inspection 134
7. Representations ad Warranties 135
8. Pledgor's Undertakings 135
9. Notices 136
10. Legal Succession 137
11. Amendments 137
12. Release (Pfandfreigabe) 137
13. Partial Invalidity 138
14. Miscellaneous 138
15. Applicable Law, Jurisdiction 139
Schedule 1 "List Of Accounts" 140
Schedule 2 "Security Agreements" 141
Schedule 3 "Notice of Pledge" 142
THIS ACCOUNT PLEDGE AGREEMENT is made on the [Date] (the "Agreement")
BETWEEN:
(1) ZELLSTOFF STENDAL GMBH, a limited liability company incorporated,
organised and validly existing under the laws of the Federal Republic of
Germany, having its office at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of Germany and registered in the commercial register (Amtsgericht) of
Stendal, number HRB 2446 (the "Borrower" and "Pledgor");
(2) BAYERISCHE HYPO- UND VEREINSBANK AG, a stock corporation incorporated,
organised and validly existing under the laws of the Federal Republic of
Germany, having its office at Am ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
of Germany and registered in the commercial register (Amtsgericht) of Munich,
number HRB 42148 (the "Original Pledgee" and "Security Agent").
WHEREAS:
(A) The Lenders and the Pledgor have concluded a facility agreement dated
[*] August 2002 in the amount of EUR 827,950,000 for the purpose of the design,
development, construction and operation of a pulp mill located in Arneburg, near
Stendal in Sachsen-Anhalt (the "Facility Agreement").
(B) Pursuant to the Facility Agreement the Pledgor and its shareholders are
obliged to grant certain security for the purpose of securing the obligations
under the Financing Documents in accordance with the terms and conditions
therein.
NOW, IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1 Unless otherwise stated in this Agreement or required by the context the
definitions and principles of interpretation in the Facility Agreement are to be
used in this Agreement.
1.2 Definitions:
"Accounts": The bank accounts listed in Schedule 1 hereto and "Account" means
any of them.
"Account Bank": A bank administering any of the Accounts.
"Advance": A principal sum drawn by the Borrower under the Facility Agreement
or, depending on the context, the principal sum outstanding as a result of such
drawdown.
"Agent": Bayerische Hypo- und Vereinsbank AG or its successor.
"AIG": AIG Altmark Industrie AG, a company incorporated under the laws of the
Federal Republic of Germany.
"Arranger": Bayerische Hypo- und Vereinsbank AG and its successors.
"Derivative Transaction": Any swap agreement, option agreement, futures
contract, forward contract or similar arrangement with respect to interest
rates, currencies or commodity prices.
"EPC Contract": The engineering, procurement and construction agreement dated 26
August 2002 between REW-IN and the Borrower.
"EPC-Contractor": RWE-IN.
"EU-Decision": The decision by the EU-Commission dated 19 June 2002 in respect
of the State Guarantee and the Government Grants.
"Event of Default": Any of the events mentioned in Clause 23 (Events of Default)
of the Facility Agreement.
"Facility": The facility comprising Tranche A, Tranche B, Tranche C, Tranche D1,
Tranche D2 and Tranche E pursuant to Clause 2.1 (Granting of the Facility) of
the Facility Agreement.
"Facility Office": The office or offices notified by a Lender to the Agent in
writing on or before the date it becomes a Lender (or, following that date, by
not less than (5) five days' written notice) as the office or offices through
which it will perform its obligations under the Facility Agreement.
"FAHR": FAHR Beteiligungen AG.
"Fee Letter": The fee letter by Bayerische Hypo- und Vereinsbank AG and
addressed to the Borrower dated on or about the date hereof.
"Financing Documents": The Facility Agreement, any agreement entered into with
any Permitted Subsidiary in connection with the financing of the wood supply or
logistics aspects of the Project, the Hedging Agreements, the Security
Agreements, the Shareholders' Undertaking Agreement, the Step-In-Rights
Agreement between SP Holding, RWE-In, Fahr and the agent on or about the date
hereof, the RWE Solutions AG Guarantee, any agreement regarding Shareholder
Loans and the corresponding subordination declarations, the Stand-By Equity
Security, the Fee Letter, any waiver requests, waivers and other binding
notifications, the Direct Agreement, the Parent Company Guarantee, the advance
payment, performance and defects liability guarantee issued in favour of the
Borrower by a first class bank in respect of the performance of the EPC
Contractor under the EPC-Contract, the State Guarantee and any other document in
relation to the financing of the Project.
"Future Pledgees": any entity which may become a pledgee hereunder by way of (i)
transfer of the Pledges by operation of law following the transfer or assignment
(including by way of novation or assumption (Vertragsubernahme)) of any part of
the Secured Obligations (as defined hereinafter) from the Original Pledgee or
any Future Pledgee to such future pledgee and/or (ii) accession to this
Agreement pursuant to Clause 2.6 hereof as pledgee.
"Government Grants": The grants which will be given as direct grants
(GA-Zuschuss (investment incentives)) by the State of Sachsen-Anhalt and as
Investitionszulagen (tax grants) by the Federal Republic of Germany, both as
approved by the EU-Decision, for the Project in favour of the Borrower.
"Hedging Agreements": The Hedging Agreement dated 26 August 2002 between the
Hedging Counterparts and the Borrower in relation to any swap agreements, cap
agreements, collar agreements, future agreements, forward agreements and similar
agreements with respect to interest rates, currencies or commodity prices as
well as any single transactions to be concluded by the Hedging Agreement.
"Hedging Counterparty": Bayerische Hypo- und Vereinsbank AG.
"Hedging Strategy": The hedging strategy in relation to the Facility to be
agreed in writing between the Borrower and the Arranger, as amended from time to
time, for the hedging of the interest, currency and commodity price risks of the
Pledgor.
"Lenders": The lenders (including the Original Lender), acting through their
respective Facility Offices, and their successors, transferees and assignees, as
permitted under the Facility Agreement.
"▇▇▇▇▇▇ International": ▇▇▇▇▇▇ International Inc., a Massachussetts trust
incorporated und the laws of the state of Washington, United States of America.
"Original Lender": Bayerische Hypo- und Vereinsbank AG.
"Parent Company Guarantee": The parent company guarantee to be granted by RWE
Solutions AG in favour of the Borrower in respect of RWE-IN's obligations under
the EPC Contract.
"Permitted Subsidiaries": The two support holding companies, the wood supply
company and the logistic company.
"Pledgees": the Original Pledgee and the Future Pledgees.
"Project": The design, development, financing, construction and operation of a
552,000 tonnes per annum bleached softwood kraft pulp mill located in Arneburg,
near Stendal in Sachsen-Anhalt, Federal Republic of Germany.
"RWE Solutions AG Guarantee": The guarantee given by RWE Solutions AG in respect
of RWE-IN's obligations under the Shareholders' Undertaking Agreement.
"RWE-IN": RWE Industrie-L sungen GmbH, a limited liability company incorporated
under the laws of the Federal Republic of Germany.
"Secured Creditors": The Lenders and the Hedging Counterparty.
"Security Agreements": The security agreements listed in Schedule 2 (Security
----------
Agreements), the Security Pooling Agreement and any other agreement pursuant to
which the Borrower, the Shareholders, the Sponsors or any third party grant
security to the Security Agent and/or the Lenders (other than the State
Guarantee), including security agreements granting security in favour of or on
behalf of the subsidiaries.
"Security Pooling Agreement": The security pooling agreement dated on or about
the date hereof between the Security Agent, the Lenders, the Hedging
Counterparty, SP Holding, RWE-IN, FAHR and the Borrower.
"Share Capital": The share capital of the Borrower as increased from time to
time in accordance with the Facility Agreement.
"Share": An ordinary fully paid up share in the Share Capital.
"Shareholder Loans": Loans by the Shareholders to the Borrower made and
subordinated in accordance with the terms and conditions of the Shareholders'
Undertaking Agreement.
"Shareholders' Undertaking Agreement": The agreement of even date between the
Sponsors, the Shareholders, the Borrower and the Agent.
"Shareholders": As at the date of this Agreement, SP Holding, RWE-IN and FAHR,
and thereafter includes any person to whom Shares may be transferred.
"Shareholder's Account": An account in the name of the Borrower over which the
Lenders have no security and to which the Borrower is allowed to make payments
in accordance with Clauses 9.4.3 (a) (Priority of Payments) and 9.4.3 (c)
(Restricted Application) of the Facility Agreement.
"Sponsors": ▇▇▇▇▇▇ International, RWE-IN and AIG and any of their respective
successors.
"Stand-By Equity Security":
(e) an unconditional letter of credit; or
(f) an unconditional guarantee on first demand,
in each case in form and substance satisfactory to the Agent and issued by a
bank whose long term unsecured credit rating is at least A from Standard &
Poor's Rating Services and A 2 from ▇▇▇▇▇'▇ Investors Services Inc.; or
an interest bearing cash deposit in the amount required by the Shareholders'
Undertaking Agreement to be held by the Agent or at HVB Banque Luxembourg
Societe Anonyme, such account to be pledged in favour of the Lenders by entering
into an account pledge agreement substantially in the form set out in
Schedule 7 (Form of Account Pledge Agreement) of the Facility Agreement
----------
in case the account is held by the Agent and an account pledge agreement
substantially in the form set out in Schedule 8 (Form of Luxembourg Account
----------
Pledge Agreement) of the Facility Agreement in case the account is held by
HVB Banque Luxembourg Societe Anonyme.
"State Guarantee": The guarantees (Ausfallburgschaften) issued by the Federal
Republic of Germany (for 48 % of the aggregate amount of Advances under Tranches
A and B) and the State of Sachsen-Anhalt (for 32 % of the aggregate amount of
Advances under Tranches A and B) issued pursuant to the EU-Decision in the form
attached to the Facility Agreement as Schedule 11 (State Guarantee) of the
-----------
Facility Agreement in favour of the Lenders with respect to this Agreement
including the "Allgemeinen Bestimmungen fur Burgschaftsubernahmen durch die
Bundesrepublik Deutschland (Bund) und parallel burgende Bundeslander" (General
Conditions for the issuing of guarantees by the Federal Republic of Germany and
Lander).
2. PLEDGE
2.1 The Pledgor hereby pledges to the Pledgees
(a) all present, conditional and future claims including the
account balances (▇▇▇▇▇▇) of current accounts (Kontokorrentkonten), as the case
may be, and all respective rights of the Pledgor arising under all of its
accounts, including the bank accounts listed in Schedule 1 hereto and all such
accounts which will be mentioned in the relevant Account Lists pursuant to
Clause 4 ;
(b) all securities and other instruments including all secondary rights,
in particular the rights from interest and profit share coupons, which are or
will in the future be credited into the custody accounts mentioned in Schedule 1
hereto;
(each right of the Pledgees created hereunder is hereinafter referred to as a
"Pledge").
2.2 Excluded from the Pledge is the Shareholder's Account.
2.3 The Original Pledgee hereby accepts its Pledges for itself.
2.4 For the purpose of the Pledges the Pledgor hereby assigns to the
Pledgees its claims for possession regarding the items listed in Clause 2.1 (b)
above against the account holding bank. If order papers (Orderpapiere) are
deposited or will be deposited in the deposit of security mentioned under
Clause 2.1 (b) the Pledgor of such order papers will be provided with a
blank endorsement, if it has not been provided with such blank
endorsement already.
2.5 The Pledgor undertakes to notify the Account Bank and any other relevant
third party of the Pledges in substantially the form set out in Schedule 4
attached to this Agreement without undue delay requesting to acknowledge receipt
of the notification of and acceptance of the terms thereof to the Security
Agent.
2.6
(a) Upon transfer or assignment (including by way of assumption
(Vertragsubernahme)) of all or part of the Secured Obligations by a Pledgee the
Pledges created hereunder shall transfer by operation of law pursuant to para.
401 BGB. In the event that for any reason such transfer by operation of law is
not totally effective then the Security Agent shall, and hereby does accept, as
representative without power of attorney (Vertreter ohne Vertretungsmacht), the
respective Pledges for and on
behalf of each Future Pledgee. Each Future Pledgee ratifies and confirms the
declarations and acts so made by the Security Agent on its behalf by accepting
the transfer or assignment (including by way of novation or assumption (Vertrags
ubernahme)) of the Secured Obligations (or part of them) from a Pledgee. Upon
such ratification (Genehmigung) such Future Pledgee becomes a party to this
Agreement, it being understood that any future or conditional claim (zukunftiger
oder bedingter Anspruch) of such Future Pledgee arising under the Secured
Obligations shall be secured by the Pledges constituted hereunder.
(b) All parties hereby confirm that the validity of the Pledges
granted hereunder shall not be affected by the Security Agent acting as
representative without power of attorney for each Future Pledgee.
(c) The Pledgor herewith authorises the Security Agent to notify
the identity of such Future Pledgee and the new pledges created pursuant to
Clause 2.6 (a) above to the Pledgor and the Account Bank. Upon request of the
Security Agent, the Pledgor shall without undue delay give such notice and
provide the Security Agent with a copy thereof.
2.7 The validity and effect of each of the Pledges shall be independent from
the validity and the effect of the other Pledges created hereunder. The Pledges
to each of the Pledgees shall be separate and individual pledges ranking pari
passu with the other Pledges created hereunder.
2.8 Each of the Pledges is in addition, and without prejudice, to any other
security a Pledgee may now or hereafter hold in respect of the Secured
Obligations.
2.9 The Pledgor is not entitled to demand the delivery of interest and
profit share coupons with regard to securities which are pledged hereunder other
than provided in Clause 10.5.1 of the Facility Agreement.
3. SECURED OBLIGATIONS
The Pledges hereunder shall secure all claims (present and future, actual and
contingent) of the Secured Creditors which are or become owing by the Pledgor
pursuant to or in connection with
(i) the Facility Agreement,
(ii) the Security Agreements and all of the other Financing
Documents; and
(iii) the Hedging Agreements between the Hedging Counterparty
and the Pledgor;
in their respective valid, amended, supplemented, novated or newly arranged
forms.
(The claims mentioned in this Clause 3 will be hereinafter referred to as the
"Secured Obligations").
4. LIST OF BANK ACCOUNTS
4.1 The Pledgor shall supply at its own expense to the Security Agent a list
of the pledged accounts referred to in this Agreement within a period of ten
(10) days from the end of each calendar quarter. The first list shall be
supplied on the [Date] (the "Account List").
4.2 The Account List shall contain the account number, the accounting
balances, the bank code number and the addresses of the banks holding these
accounts.
4.3 The parties to this Agreement agree that all claims from the bank
accounts that are specified in the Account List pursuant to Clause 4.1 are
pledged to the Pledgees having equal priority.
4.4 The Pledgees are entitled to request further Account Lists from the
Pledgor at its expense, such Account Lists to be supplied by the Pledgor to the
Security Agent.
5. ENFORCEMENT OF THE PLEDGES
5.1 Until the Security Agent gives notice to the contrary to the Pledgor,
the Pledgor shall be authorised to withdraw money from the pledged accounts and
to transfer monies within the ordinary course of its business and pursuant to
Clause 9.2 of the Facility Agreement. The same does apply mutatis mutandis with
regard to transactions concerning the pledged custody accounts.
5.2 If the requirements set forth in Section 1204 et seq. of the German
Civil Code (Burgerliches Gesetzbuch) with regard to the enforcement of any of
the Pledges are met (Pfandreife), in particular, if any of the Secured
Obligations have become due and payable and, in addition, an Enforcement Event
pursuant to the Facility Agreement has occurred, then in order to enforce the
Pledges, the Pledgees (acting through the Security Agent) may at any time
hereafter avail themselves of all rights and remedies to enforce the pledges
that a pledgee has upon default of a pledgor by rights (the "Enforcement
Event").
5.3 Notwithstanding Section 1277 of the German Civil Code, the Pledgees,
acting through the Security Agent are entitled to exercise their rights without
obtaining enforceable judgment or other instrument (vollstreckbarer Titel).
5.4 The Pledgor hereby expressly agrees that two (2) weeks' prior written
notice to the Pledgor of the place and time of any such public auction shall be
sufficient. The public auction may take place at any place in the Federal
Republic of Germany designated by the Security Agent, acting for and on behalf
of the Pledgees.
5.5 The Pledgor hereby expressly waives all defences of voidability and
set-off pursuant to sections 770 and 1211 of the German Civil Code (Einrede der
Anfechtbarkeit und der Aufrechenbarkeit).
5.6 Provided that the other requirements in Clause 5.2 are met and to the
extent permissible under the applicable law the Pledgees acting through the
Security Agent shall be entitled to
(a) collect the monies standing to the credit of the pledged accounts
and to apply them to the satisfaction of the Secured Obligations;
(b) realise the securities booked on the Accounts;
(c) request that all documents relating to the Pledge be handed over to
the Security Agent and the Pledgor hereby agrees to comply promptly with any
such request; and
(d) take any other actions not mentioned in Section 5.5 (a) to 5.5 (c)
above which are necessary or appropriate for the purpose of realising the
security granted by the Pledgor in accordance with this Agreement, to the extent
that such actions are permissible under the applicable law.
5.7 The Pledgees acting through the Security Agent may realise the Pledges
only to the extent necessary to satisfy any outstanding Secured Obligations.
5.8 Among several claims the Pledgees acting through the Security Agent may
select at their own discretion which claims shall be realised. The Pledgees
shall, however, use their best efforts to give priority to actions which will
not endanger the ongoing concern of the Pledgor's business. Other actions shall
only be taken if necessary to satisfy in full the Secured Obligations.
5.9 The proceeds resulting from the realisation of the Pledges shall be
applied pursuant to Clause 7.7 of the Security Pooling Agreement.
6. RIGHT OF INSPECTION
6.1 The Security Agent is entitled during usual business-hours and with a
reasonable advance notice to demand and to inspect all information, records and
instruments which are required or useful in order to examine or to assert the
value of the Pledges created under this Agreement. If the Pledgor employs data
processing systems it will at its own cost and on reasonable request of the
Security Agent produce print-outs of the information, records and instruments
which are required or useful for the aforementioned purposes or will supply data
carriers to the Security Agent on which such information, records and
instruments are recorded.
6.2 In case any third party other than the Pledgor has access to
information, records and instruments described in Section 6 the Pledgor already
hereby irrevocably authorises the Security Agent and its successors acting for
and on behalf of the Pledgees to obtain such information, records and
instruments in the name of the Pledgor. The Security Agent shall immediately
inform the Pledgor of any such acts under the conditions set out in Clause 6.2.
6.3 The Pledgor shall on request update all information, records and
instruments relating to the claims and securities pledged under this Agreement.
6.4 A consultant or adviser authorised by the Security Agent may exercise
the Security Agent's rights under this Section 6.
7. REPRESENTATIONS AND WARRANTIES
7.1 The Pledgor represents and warrants to the Pledgees that:
(a) it alone holds title to and may freely dispose of the
Accounts;
(b) the Accounts have not been pledged to third parties or encumbered
in any other way in favour of third parties;
(c) no counterclaims as to which a right to set-off or a right of
retention could be exercised exist to date and, to the extent that this is
legally practicable and from a reasonable business perspective appropriate and
within the ordinary course of business, such counterclaims will not be allowed
to come into existence in the future; and
(d) it does not hold any bank accounts other than the accounts allowed
under the Facility Agreement.
7.2 If any of the warranties of the Pledgor under Section 7.1 should be
incorrect, wholly or in part, the Pledgor will place the Pledgees in the same
position as if the respective warranty given by the Pledgor had been correct.
The aforementioned claim of the Pledgees does not require negligence on the part
of the Pledgor.
8. PLEDGOR'S UNDERTAKINGS
The Pledgor undertakes:
(a) unless permitted in this Agreement and the Facility Agreement,
not to dispose of any assets booked on the accounts pledged hereunder other than
in the ordinary course of its business and in accordance with the Facility
Agreement as well as to refrain from encumbrances or any acts or omissions which
might result in a material decline of the aggregate value or in a loss of the
assets and not to enter into obligations to refrain from disposals of assets
(Verfugungsverbote);
(b) to identify the Pledge immediately in its books and records
and to refrain from any acts or omissions which could prevent third parties who
may have a legitimate interest in obtaining knowledge of the Pledge from
obtaining knowledge thereof;
(c) to open a new account only with prior written consent of the
Pledgees, which consent shall not be unreasonably withheld. In such a case, the
Pledgor shall grant a corresponding account pledge to the Pledgees over the
newly established account;
(d) to inform the Security Agent as soon as possible in the case
the Pledgees' rights in respect of the Pledge are prejudiced or jeopardised by
attachment or are prejudiced or jeopardised by other material actions of third
parties. Such information shall be accompanied, in the case of any attachment,
by a copy of the order for attachment as well as all documents required for the
filing of an objection against the attachment, and, in case of any other actions
by third parties, by copies evidencing which actions have or will be taken,
respectively, as well as all documents required for the filing of an objection
against such actions. The Pledgor shall further be obliged to inform as soon as
possible the attaching creditors or other third parties asserting rights with
respect to the transferred rights and claims in writing of the Pledgees' rights
in respect of the assets. All reasonable and adequately documented costs and
expenses for countermeasures of the Pledgees shall be borne by the
Pledgor. This shall also apply to the institution of legal action which
the Pledgees reasonably consider necessary;
(e) to inform the Security Agent promptly of any subsequent material
changes in the value of the accounts pledged hereunder resulting from any set
off or other reasons, after becoming aware of such changes other than in the
ordinary course of business; and
(f) to notify the Security Agent promptly of any event or circumstance
which might be expected to have a material adverse effect on the validity or
enforceability of this Agreement.
9. NOTICES
9.1 Communications in Writing
Each communication to be made by the parties hereto under this Agreement will be
made in writing and, unless otherwise stated, will be made by letter, fax or
e-mail. Any communication to be made by the parties hereto in connection with
the enforcement of the security created hereunder shall, however, only be made
by letter. Each communication will be in German or English.
9.2 Addresses
Any communication, information or document to be made or delivered by the
parties hereto pursuant to this Agreement will (unless the recipient of such
communication or document has, by fifteen (15) days' written notice to the
Security Agent, specified another address or fax number) be made or delivered to
the address set out below:
(a) to the Pledgor:
Zellstoff ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇
▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel.: +49 - (0) 39321 - 50321
Fax.: +49 - (0) 39321 - 50422
(b)
to the Security Agent:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇- ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇ (FPA 13)
D - 80538 Munchen
attn.: FPA Agency
Tel: +49 - (0)89-378 - 29541
Fax: +49 - (0)89-378 - 41517
10. LEGAL SUCCESSION
10.1 This Agreement shall create rights and obligations of the parties
hereto and of their respective permitted successors.
10.2 The Security Agent may transfer its rights and obligations under this
Agreement to third parties at any time after having resigned from its office as
Security Agent. However, all rights and obligations shall only be transferred
collectively to the same third party. The Borrower hereby irrevocably grants its
consent that the relevant third party shall become a party hereto in lieu and as
successor of the Security Agent upon the transfer becoming effective. The
Borrower is obliged not to transfer its rights and obligations under this
Agreement without the prior written consent of the Security Agent.
10.3 This Agreement shall continue to apply in the case of a change of the
Pledgor's shareholders or legal form and in the case of a universal succession
(Gesamtrechtsnachfolge) on the part of the Pledgor or the Security Agent.
11. AMENDMENTS
Changes to this Agreement and any waiver of rights under this Agreement shall be
made in writing. The parties may waive this form requirement by written
agreement only.
12. RELEASE (PFANDFREIGABE)
Upon complete and irrevocable satisfaction of the Secured Obligations, the
Pledgees will as soon as reasonably practical declare the release of the Pledges
(Pfandfreigabe) to the Pledgor as a matter of record. For the avoidance of
doubt, the parties are aware that upon full and complete satisfaction of the
Secured Obligations the Pledges, due to their accessory nature (Akzessorietat)
cease to exist by operation of German mandatory law.
PARTIAL INVALIDITY, WAIVER
13.1 Should any provision of this Agreement be invalid or unenforceable,
wholly or in part, or should any provision later become invalid or
unenforceable, this shall not affect the validity of the remaining provisions of
this Agreement. In lieu of the invalid or unenforceable provision another
reasonable and enforceable provision shall apply which corresponds to what the
parties would have agreed taking into account the spirit and purpose of this
Agreement had they considered the invalidity or lack of enforceability of the
relevant provision upon conclusion of this Agreement, and which corresponds to
the intentions of the parties in relation to the spirit and purpose of this
Agreement. The above provision shall apply mutatis mutandis to fill possible
gaps in this Agreement.
13.2 No failure to exercise, nor any delay in exercising, on the part of the
Security Agent, any right or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right or remedy prevent any
further or other exercise thereof or the exercise of any other right or remedy.
The rights and remedies provided hereunder are cumulative and not exclusive of
any rights or remedies provided by law.
14. MISCELLANEOUS
14.1 The Security Agent acts as agent for each of the Stendal Creditors
against the Borrower in the event of an assertion of the rights and obligations
under this Agreement. The Security Agent is authorised to authorise a third
party if necessary. The Security Agent and the third party are exempt from the
restrictions laid down in Section 181 of the German Civil Code (BGB).
14.2 Each Pledgee authorises the Security Agent to act as agent for the
Pledgees in the event of an assertion of the rights and obligations under this
Agreement. The Security Agent is authorised to authorise a third party if
necessary. The Security Agent and the third party are exempt from the
restrictions laid down in Section 181 of the German Civil Code (BGB).
14.3 The Security Agent in its capacity as account keeping bank herewith
agrees that its lien pursuant to its general business conditions
(AGB-Pfandrecht) shall rank behind all the pledges over the Account granted to
the Pledgees by the Pledgor pursuant to this Agreement.
14.4 This Agreement has been translated into the English language for
convenience purposes only. For the avoidance of doubt, the German version of
this Agreement shall prevail.
15. APPLICABLE LAW, JURISDICTION
15.1 This Agreement shall be governed by the laws of the Federal Republic of
Germany.
15.2 The courts in Munich shall have exclusive jurisdiction in respect of
any dispute out of or in connection with this Agreement. The Pledgees, however,
shall be entitled to take action against the Pledgor in any other court of
competent jurisdiction.
SCHEDULE 1
"LIST OF ACCOUNTS"
BANK CURRENCY ACCOUNT NUMBER USE
---- -------- -------------- ---
SCHEDULE 2
"Security Agreements"
1. First ranking Land Charge by the Borrower in an aggregate amount of EUR
827,950,000 on the site of the Borrower dated on or about the date hereof
whereby the Borrower submits in a separate certificate to the immediate
enforcement of judgement concerning the Site in an amount of EUR 60,000,000;
2. Security Purpose Agreement between the Borrower and the Security Agent
dated on or about the date hereof;
3. Security Transfer Agreement between the Borrower and the Security Agent
as of the date hereof;
4. Global Assignment Agreement between the Borrower and the Security Agent
dated on or about the date hereof;
5. Insurance Claims Assignment Agreement between the Borrower and the
Security Agent dated on or about the date hereof;
6. Investment Incentives Assignment Agreement between the Borrower and the
Security Agent dated on or about the date hereof;
7. Account Pledge Agreement between the Borrower and the Security Agent
dated on or about the date hereof;
8. Pledge of Hedging Claims between the Borrower and the Security Agent
dated on or about the date hereof;
9. Share Pledge Agreement between SP Holding, RWE-IN and FAHR and the
Security Agent dated on or about the date hereof; and
Schedule 3
"Notice of Pledge"
From: Zellstoff Stendal GmbH
To: [Account Bank]
Date:
Dear Sirs
Re: [Account No. [ ], Banking Code [ ] (the "Account")]
We hereby give you notice that by an account pledge agreement dated [Date] (the
"Account Pledge Agreement") we have pledged in favour of Bayerische Hypo- und
Vereinsbank Aktiengesellschaft (the "Security Agent") and others as pledgees all
of our right, title and interest in and to the above account (which shall
include all sub-accounts, renewals, replacements and redesignations thereof) and
all monies and interest from time to time standing or accruing to the credit
thereof.
Until notice to the contrary from the Security Agent to be served on you as
Account Bank we may continue to operate the Account and in particular may
dispose over the amounts standing to the credit of the Account. Upon receipt of
such aforesaid notice to the contrary you, as Account Bank, shall not allow any
dispositions by ourselves of amounts standing to the credit of the Account.
Please acknowledge receipt of this notice and your agreement to the terms hereof
by signing the enclosed copy and returning the same to Bayerische Hypo- und
Vereinsbank Aktiengesellschaft, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇.
Yours faithfully,
-----------------------------------------------------------
For and on behalf of Zellstoff Stendal GmbH
Annex to the Notice of Pledge
[Letterhead of the Account Bank]
To:
Bayerische Hypo- und Vereinsbank AG
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇ (▇▇▇ ▇▇)
▇▇▇▇▇ ▇▇▇▇▇▇▇
Re: [Account No. -[ ], Banking Code [ ] (the "Account")]
Dear Sirs,
We acknowledge receipt of the above notice and our agreement to the terms
thereof and confirm that we have neither received any previous notice of pledge
relating to this Account nor are we aware of any third party rights in relation
to this Account. We hereby grant our consent on behalf of ourselves and our
legal successors in title to the pledge of any claims arising out of the
Account.
We hereby irrevocably and unconditionally waive our rights in respect of and
agree not to make any set-off or deduction from the Account or invoke any rights
of retention in relation to this Account.
We agree that the pledge in our favour over the Account granted pursuant to our
General Business Conditions shall rank behind all the pledges over the Account
granted to the Pledgees by the Pledgor pursuant to the Account Pledge Agreement
of which we have been notified by the Pledgor.
-------------------------------------------- ------------------------
For and on behalf of [Account Bank] Date
EXECUTION PAGE
ACCOUNT PLEDGE AGREEMENT
Zellstoff Stendal GmbH
as "Borrower" and "Pledgor")
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Name: Name:
Address: ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇
D-39596 Arneburg
Bayerische Hypo- und Vereinsbank AG
as "Original Pledgee" and "Security Agent"
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Name: Name:
Address: Am ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
SCHEDULE 8
Form of Luxemburg Account Pledge Agreement
▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇
C H A N C E
P U N D E R
ZELLSTOFF STENDAL GMBH
as Pledgor
HVB BANQUE LUXEMBOURG SOCIETE ANONYME
as Account Bank
BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHAFT
as Security Agent
[*] LUXEMBOURG ACCOUNT PLEDGE AGREEMENT
CONTENTS
CLAUSE PAGE
1. Definitions 149
2. Pledge over pledged account claims 151
3. Undertaking 152
4. Power of Attorney 153
5. Remedies upon Default 153
6. Change of Value 154
7. Indemnity 154
8. Representatives and Warranties 154
9. Release of Security 155
10. Partial Enforcement 155
11. Effectiveness of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇. Cost and Expenses 156
13. Notices 156
14. Legal Successors 157
15. Amendment and Partial Invalidity 158
16. Law and Jurisdiction 158
SCHEDULE 1 List of Bank Accounts 159
THIS ACCOUNT PLEDGE AGREEMENT (the "Pledge Agreement") is dated as of 26 August
2002 and made between:
(1) ZELLSTOFF STENDAL GMBH, a limited liability company incorporated,
organised and validly existing under the laws of the Federal Republic of
Germany, having its office at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of Germany and registered in the commercial register (Amtsgericht) of
Stendal, number HRB 2446 (the "Pledgor");
(2) BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHAFT, a stock corporation
incorporated organised and validly under the laws of the Federal Republic of
Germany as Security Agent and as such acting for and on behalf of the Secured
Creditors (the "Security Agent");
AND IN THE PRESENCE OF
(3) HVB BANQUE LUXEMBOURG SOCIETE ANONYME, a company duly organized and
existing under the laws of the Grand Duchy of Luxembourg, having its registered
office in ▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (▇▇▇ "Account Bank");
WHEREAS:
(A) The Lenders and the Pledgor have concluded a Facility Agreement dated 26
August 2002 in the amount of EUR 827,950,000 for the purpose of the design,
development, construction and operation of a pulp mill located in Arneburg, near
Stendal in Sachsen-Anhalt (the "Facility Agreement").
(B) Pursuant to the Facility Agreement the Pledgor is obliged to grant
certain security for the purpose of securing the obligations under the Facility
Agreement in accordance with the terms and conditions therein.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1 Unless otherwise stated in this Agreement the definitions and principles
of interpretation in the Facility Agreement shall apply to this Agreement.
"2001 Law" means the Luxembourg law dated 1 August 2001 on the circulation of
securities and other fungible instruments (loi du 1er aout 2001 sur la
circulation de titres et d'autres instruments fongibles).
"Bank Account" means the bank account held with the Account Bank as set out in
Schedule 1 (List of Bank Accounts) including any sub-account, renewal,
redesignation or replacement thereof.
"Eligible Securities" means investments made in short term euro debt securities
with a maximum duration of 3 years of issuers with a short term A1 rating or
better of Standard & Poor' s Corporation or an equivalent rating from such other
rating agency approved by the agent.
"Hedging Counterparty" means Bayerische Hypo- und Vereinsbank AG:
"Lenders" means the financial institutions being, from time to time, Lenders
under the Facility Agreement.
"Pledged Assets" means the Pledged Account Claims, the Pledged Securities
and the Related Assets.
"Pledged Account Claims" means any claim to the cash credit balance of the Bank
Account as well as any other claim the Pledgor may have against the Account Bank
in relation to such Bank Account, including, for the avoidance of doubt, any
pecuniary claim for the payment of the relevant credit balance or for the
repayment of a terms deposit (Festgeld) as well as any other claim, regardless
of the nature thereof in relation to the Bank Account, including, for the
avoidance of doubt, any claim for the payment of the interests paid into the
Bank Account.
"Pledged Securities" means any securities and, in particular, any Eligible
Securities which, from time to time will be deposited by the Pledgor on the
securities ledger of the Bank Account.
"Related Assets" means all dividends, interest and other monies payable in
respect of the Pledged Securities and all other rights, benefits and proceeds in
respect of or derived from the Pledged Securities (whether by way of redemption,
bonus, preference, option, substitution, conversion or otherwise).
"Secured Creditors" means the Lenders and the Hedging Counterparty.
"Secured Obligations" means all present and future, conditional and
unconditional claims, rights, title, interests (whether actual or contingent) of
the Secured Creditors or any of them against the Pledgor or any of its
successors which are or become owing by the Pledgor or any of its successors to
the Secured Creditors under or in connection with the Facility Agreement, the
Security Agreements, all other Financing Documents, the Hedging Agreement
between the Hedging Counterparty and the Pledgor and any other agreement
including any renewal, extension, novation or any other amendment, modification
or supplement to such agreements including the Financing Documents concluded
between the Pledgor, on the one hand, and the Secured Creditors or any of them,
on the other hand, in connection with or related to the Financing Documents
irrespective of whether any other persons or entities are parties to such
agreements or supplements including letters of credit and/or guarantees
including all obligations of the Pledgor now or hereafter existing under this
Agreement including, without limitation,
all fees, costs and expenses whether in connection with a collection action
hereunder or other enforcement action hereunder.
1.2 References to Clauses, Recitals and Schedules are to clauses, recitals
and schedules of this Agreement.
2. PLEDGE OVER PLEDGED ACCOUNT CLAIMS
2.1 Pursuant to Article 110 et seq. of the Luxembourg Code of Commerce, the
Pledgor hereby irrevocably and unconditionally grants a first priority pledge
("gage") over the Pledged Account Claims (the "Pledge over Account ") in favour
of the Security Agent, who accepts, as security for the due and full payment and
discharge of all of the Secured Obligations.
2.2 Pursuant to Article 110 et seq. of the Luxembourg Code of Commerce and
Article 9 of the 2001 Law, the Pledgor hereby irrevocably and unconditionally
grants a first priority pledge ("gage") over the Pledged Securities (the "Pledge
over Securities", and together with the Pledge over Accounts, the "Pledges") in
favour of the Security Agent, who accepts, as security for the due and full
payment and discharge of all of the Secured Obligations.
2.3 The parties agree, to the extent necessary, that the Pledged Securities
shall be subject to the fungibility regime organised by the 2001 Law.
2.4 The Pledgor undertakes that the Pledge over Securities shall at all
times remain perfected in accordance with article 9 of the 2001 Law and, in
particular, that the Pledged Securities shall be held in a sub-account to the
Bank Account which shall be identified as an account holding securities pledged
in favour of the Security Agent (the "Securities Sub-Account").
2.5 Without prejudice to the above provisions, the Pledgor hereby
irrevocably authorises and empowers the Security Agent to cause any formal steps
to be taken by the Account Bank or any other person for the purpose of
perfecting the Pledges and, for the avoidance of doubt, undertakes to take any
such steps itself if so directed by the Security Agent. In particular, should
any such steps be required in relation to Pledged Securities acquired in the
future, the Pledgor undertakes to take any such steps immediately upon
acquisition or delivery of the relevant Pledged Securities.
2.6 Without prejudice to the restrictions contained in this respect in the
Facility Agreement, the Pledgor shall be allowed to dispose of any monies
standing to the credit of the Bank Account. The parties however expressly agree
that the Account Bank shall not be under an obligation to monitor compliance
with the restrictions contained in the Facility Agreement.
3. UNDERTAKING
The Pledgor undertakes to the Security Agent during the subsistence of this
Agreement that:
3.1 it shall from time to time promptly execute, acknowledge, deliver, file
and register all such additional documents, instruments, agreements,
certificates, consents and assurances and do all such other acts and things as
may be necessary or as the Security Agent may reasonably request from time to
time in order to perfect the security constituted by this Agreement and to
exercise and enforce the rights and remedies under this Pledge Agreement or in
respect of the Pledged Assets;
3.2 it shall promptly furnish to the Security Agent such information,
reports and records in respect of the Pledged Assets as the Security Agent may
reasonably request from time to time;
3.3 it shall abstain from any act or omissions affecting the enforceability
of the pledge or through which the rights and interests of the Security Agent as
the owner of security rights therein may be impaired;
3.4 it shall not close the Bank Account without the prior written consent of
the Security Agent;
3.5 it shall refrain from any acts or omissions including but not limited
to, the creation of any encumbrances, which might result in a material decline
of the aggregate value or in a loss of the Bank Account.
3.6 it shall identify the Pledge immediately in its books and records and
refrain from any acts or omissions which would reasonably be likely to prevent
third parties who may have a legitimate interest in obtaining knowledge of the
Pledge;
3.7 it shall inform the Security Agent as soon as possible in case the
Security Agent's rights in respect of the Bank Account are prejudiced or
jeopardised by attachment or are materially prejudiced or jeopardised by other
actions of third parties. Such information shall be accompanied, in case of any
attachment, by a copy of the order for attachment, as well as all documents
required for the filing of an objection against the attachment, and, in case of
any other actions by third parties, by copies evidencing which actions have or
will be taken, respectively, as well as all documents required for the filing of
an objection against such actions. The Pledgor shall further be obliged to
promptly inform as soon as possible the attaching creditors or other third
parties asserting rights with respect to the Bank Account in writing of the
Security Agent's rights in respect of the claims. All reasonable and adequately
documented costs and expenses for any actions of intervention and
countermeasures of the Security Agent shall be borne by the Pledgor. This shall
also apply to the institution of legal action, which the Security Agent
considers necessary;
3.8 it shall inform the Security Agent, forthwith upon becoming aware of
such event, in the event that any Pledged Securities no longer qualify as
Eligible Securities.
3.9 it shall sell, if so requested by the Security Agent, any Pledged
Securities in accordance with (i) Clauses 2.3 and 3.5 and (ii) any particular
instructions the Security Agent may have given; and
3.10 it shall notify the Security Agent as soon as possible of any event or
circumstance which may be expected to have a material adverse effect on the
validity or enforceability of this Agreement.
4. POWER OF ATTORNEY
4.1 The Pledgor irrevocably appoints the Security Agent to be its attorney
and in its name and on its behalf to execute, deliver and perfect all documents
and do all things that the Security Agent may consider to be requisite for (a)
carrying out any obligation imposed on the Pledgor under this Agreement, (b)
perfecting or maintaining the security interest created hereunder or (c)
exercising any of the rights conferred on the Security Agent by this Agreement
or by law, it being understood that the enforcement of the pledge over the
Pledged Assets must be carried out as described in Clause 5 (Remedies upon
Default) hereunder. The Pledgor shall ratify and confirm all things done and all
documents executed by the Security Agent in the exercise of that power of
attorney.
5. REMEDIES UPON DEFAULT
5.1 Three Eight days after a demand to pay (mise en demeure) the Secured
Obligations (or any part thereof) which may only be made if an Event of Default
(Kundigungsgrund) according to Clause 23.1.1 of the Facility Agreement has
occurred and is continuing is given to the Pledgor in the form provided for in
Clause 13, the Security Agent shall be entitled, and in addition to all other
rights and remedies granted hereunder and under any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, to
exercise all rights and remedies of a pledgee under the laws of Luxembourg (or
any other applicable laws) and may enforce the Pledge in the most favourable
manner available under applicable law, including, but not limited to, by using
any right of set-off arising under Article 118 (2) of the Code of Commerce or by
requesting direct payment from the Account Bank pursuant to the same provision.
5.2 For that purpose, the Security Agent shall be irrevocably empowered and
authorised to represent the Pledgor in relation to the Account Bank, in
particular but not limited to for the purpose of requesting the temporary
closure ("arret de compte") of the Bank Accounts or for the purpose of making
any other administrative arrangements necessary for the enforcement of the
Pledge. It may also request the "attribution judiciaire" of any claim or asset
pursuant to Article 2078 of the Civil Code, as well as exercise all other rights
to which it is entitled in such circumstances under Luxembourg law or any other
applicable laws.
6. CHANGE OF VALUE
In the event the Bank Account will substantially change in its value due to
objections, suspension or due to set-offs or for any other reasons the Pledgor
is obliged to promptly inform the Security Agent thereof.
7. INDEMNITY
7.1 The Security Agent and the Secured Creditors shall not be liable for any
loss or damage suffered by the Pledgor save in respect of such loss or damage
which is suffered as a result of wilful misconduct or gross negligence of either
of them.
7.2 The Pledgor will indemnify the Secured Creditors and the Security Agent
and keep the Secured Creditors and the Security Agent indemnified against all
damages, losses, actions, claims, expenses, demands and liabilities which may be
incurred by or made against the Secured Creditors and the Security Agent for
anything done or omitted in the exercise or purported exercise of the powers
contained herein and occasioned by any breach of the Pledgor of any of its
obligations or undertakings herein contained other than to the extent that such
damages, losses, actions, claims, expenses, demands and liabilities are incurred
or made against the Secured Creditors or the Security Agent as a result of gross
negligence or wilful misconduct of the Secured Creditors or the Security Agent.
8. REPRESENTATIONS AND WARRANTIES
8.1 The Pledgor represents and warrants to the Security Agent that, except
as expressly provided in the Facility Agreement and the Security Documents:
8.1.1 it alone holds title to and may, except for the Pledge created
hereunder, freely dispose of the Bank Account;
8.1.2 the Bank Account has not been pledged to third parties or encumbered
in any way in favour of third parties;
8.1.3 the pledgeability of the Bank Account is neither excluded nor
restricted in any way;
8.1.4 it has the power to execute and perform its obligations under this
Agreement and all necessary corporate, shareholder and other action has been
taken to authorise the execution and performance of the same;
8.1.5 no litigation, arbitration or administrative proceeding is presently
in progress, and the Pledgor has not received notice that the initiation of any
such proceedings is intended, to restrain the entry into, exercise of any of the
Pledgor's rights under and/or performance or enforcement of or compliance with
any of its obligations under this Agreement, which, if adversely determined, is
reasonably likely to have a material adverse effect on the ability of the
Pledgor to perform its obligations under this Agreement; and
8.1.6 no counterclaims as to which a right to set-off or right of retention
could be exercised exist with respect to the Bank Account.
8.2 The representations under Clause 8.1 (Representations and Warranties)
shall be expressly repeated by the Pledgor by reference to the facts and
circumstances then existing at each Drawdown Date
8.3 If any of the representations and warranties of the Pledgor under Clause
8.1 (Representations and Warranties) should be incorrect, in whole or in part,
the Pledgor will use its best efforts to place the Security Agent in the
same position as if the respective representation or warranty given by the
Pledgor had been correct. The rights and claims of the Security Agent
contained in this Clause 8.3 do not require negligence on the part
of the Pledgor.
9. RELEASE OF SECURITY
The Pledge shall be discharged by, and only by, the express release thereof
granted by the Security Agent. The Pledgor shall be entitled to demand the
release and the Security Agent shall be under the obligation to grant such
release upon good and final discharge of the Secured Obligations.
10. PARTIAL ENFORCEMENT
The Security Agent shall have the right, pursuant to the procedures set forth in
Clause 5 (Remedies upon Default) of this Agreement, to request enforcement of
all or part of the Pledge in its most absolute discretion. In particular,
the Security Agent shall, in its most absolute discretion, be entitled to
enforce the Pledge over all or part of the Pledged Account Claims only and/or
over all or part of the Pledged Securities only. No action, choice or absence
of action in this respect, or partial enforcement, shall in any manner affect
the Pledge as it then shall be. The security interest/pledge thereover shall
continue to remain in full and valid existence until the Security Agent
releases the Pledges in accordance with Clause 9.
11. EFFECTIVENESS OF COLLATERAL
11.1 The Pledge shall be a continuing security and shall not be considered
as satisfied or discharged or prejudiced by any partial payment, satisfaction or
settlement of any part of the Secured Obligations and shall remain in full force
and effect until the Security Agent releases the Pledges in accordance with
Clause 9.
11.2 The Pledge shall be cumulative, in addition to and independent of every
other security which the Security Agent may at any time hold as security for the
Secured Obligations or any rights, powers and remedies provided by law and shall
not operate so as in any way to prejudice or affect or be prejudiced or affected
by any security interest or other right or remedy which the Secured Creditors or
the Security Agent may now or at any time in the future have in respect of the
Secured Obligations.
11.3 This Pledge shall not be prejudiced by any time or indulgence granted
to any person, or any abstention or delay by the Secured Creditors or the
Security Agent in perfecting or enforcing any security interest or rights or
remedies that they may now or at any time in the future have from or against the
Pledgor or any other person having granted security for the Secured Obligations.
11.4 No failure on the part of the Security Agent to exercise, or delay on
its part in exercising, any of the rights under this Pledge Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right preclude any further or other exercise of that or any other rights.
11.5 None of the Secured Creditors or the Security Agent or any of their
agents shall be liable by reason of (a) taking any action permitted by this
Pledge Agreement or (b) any neglect or default in connection with the Pledged
Assets or (c) the realisation of all or any part of the Pledged Assets, except
in the case of gross negligence or wilful default upon its part.
11.6 The Pledgor hereby expressly renounces the benefit of article 2037 of
the Luxembourg Civil Code.
12. COST AND EXPENSES
12.1 All reasonable costs, charges, fees and expenses incurred in connection
with the negotiation, preparation, execution registration, implementation and
preservation and amendments, waivers or consents of this Agreement and all
reasonable costs, charges, fees and expenses incurred in connection with the
enforcement of this Agreement (in each case including fees for legal advisers to
the Security Agent) shall be borne by the Pledgor.
13. NOTICES
13.1 All notices or communications pursuant, under or in connection with
this Agreement shall be made pursuant to and in accordance with Clause 38
(Notices) of the Facility Agreement.
13.2 Any notice or other communication under or in connection with this
Agreement to the Account Bank shall be made or delivered with a copy to the
Security Agent to the following address of the Account Bank:
HVB Banque Luxembourg Societe Anonyme
address: ▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Luxembourg
attention of: FKA/PKR
telephone: +352 - ▇▇ ▇▇▇ ▇▇▇
fax: +352 - 42 724 548
For the avoidance of doubt, unless another address has been
communicated in accordance with Clause 38 (Notices) of the Facility Agreement
the addresses of any other party to the Agreement shall be determined pursuant
to Clause 38 (Notices) of the Facility Agreement.
13.3 Any notice or other communication under or in connection with this
Agreement shall be in the English language or, if in any other language,
accompanied by a translation into English. In the event of any conflict between
the English text and the text in any other language, the English text shall
prevail.
14. LEGAL SUCCESSORS
14.1 This Pledge Agreement shall remain in effect despite any amalgamation
or merger (howsoever effected) relating to Secured Creditors or the Security
Agent, and references to the Secured Creditors or the Security Agent shall be
deemed to include any assignee or successor in title of Secured Creditors or the
Security Agent and any person who, under any applicable law, has assumed the
rights and obligations of Secured Creditors or the Security Agent hereunder or
under any other agreements or to which under such laws the same have been
transferred or novated or assigned in any manner. To the extent a further
notification or registration or any other step is required by law to give effect
to the above, such further registration shall be made and the Pledgor hereby
gives power of attorney to the Security Agent to make any notifications, or to
take any other steps, and undertakes to do so himself if so requested by the
Security Agent .
14.2 For the purpose of Article 1278 of the Luxembourg Civil Code, to the
extent required under applicable law and without prejudice to any other terms
hereof or of any other agreements and in particular paragraph 1 of this Clause,
the Security Agent hereby expressly reserve and the Pledgor agrees to the
preservation of this Pledge and the security interest created thereunder in case
of assignment, novation, amendment or any other transfer of the Secured
Obligations or any other rights arising for it under the Financing Documents or
any other agreements to which the Pledgor is a party.
15. AMENDMENTS AND PARTIAL INVALIDITY
15.1 Changes to this Agreement and any waiver of rights under this Agreement
shall require written form. The parties may waive this form requirement by
written agreement only.
15.2 Should any provision of this Agreement be invalid or unenforceable,
wholly or in part, or should any provision later become invalid or
unenforceable, this shall not affect the validity of the remaining provisions of
this Agreement. In lieu of the invalid or unenforceable provision another
reasonable and enforceable provision shall apply which corresponds to what the
parties would have agreed taking into account the spirit and
purpose of this Agreement had they considered the invalidity or lack of
enforceability of the relevant provision upon conclusion of this Agreement, and
which corresponds to the intentions of the parties in relation to the spirit and
purpose of this Agreement.
16. LAW AND JURISDICTION
16.1 This Pledge Agreement shall be governed by Luxembourg law and the
courts of Luxembourg-City shall have exclusive jurisdiction to settle any
dispute which may arise from or in connection with it.
16.2 To the extent that the Pledgor may in any jurisdiction claim for itself
or its assets immunity from suit, execution, attachment (whether in aid of
execution, before judgement or otherwise) or other legal process and to the
extent that in any such jurisdiction there may be attributed to itself or its
assets such immunity (whether or not claimed), the Pledgor hereby irrevocably
agrees not to claim and hereby irrevocably waives such immunity to the full
extent permitted by the laws of such jurisdiction.
SCHEDULE 1
List of Bank Accounts
Currency and
Bank Address amount outstanding Account-No.:
HVB Banque ▇, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ Weicker
Societe 2099 Luxembourg EUR [*] [*]
Anonyme
SIGNATURE PAGE OF THE [*] LUXEMBOURG ACCOUNT PLEDGE AGREEMENT
IN WITNESS WHEREOF this Pledge Agreement has been duly executed by the parties.
SIGNATORIES TO THE
ACCOUNT PLEDGE AGREEMENT
The Pledgor
ZELLSTOFF STENDAL GMBH
By:
----------------------------- ------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Title:
Address: ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany
The Security Agent
BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHAFT
By:
------------------------------ ------------------------------
Name: ▇▇▇▇▇▇ Reppenthien Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Title:
Address: Am ▇▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany
SIGNATURE PAGE OF THE [*] LUXEMBOURG ACCOUNT PLEDGE AGREEMENT
By signing below, the Pledgor hereby expressly and specifically accepts the
limitation of liability in favour of the Security Agent (Clauses 4, 7, 11.5 and
11.6) and the jurisdiction of the Luxembourg courts (Clause 16.2).
The Pledgor
ZELLSTOFF STENDAL GMBH
By:
----------------------------- ---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Title:
ACKNOWLEDGEMENT
By signing hereunder for acceptance, the Account Bank acknowledges and accepts
the existence of this Pledge Agreement and of the security interest created
hereunder over the Pledged Account Claims for the purposes of Article 114 of the
Luxembourg Code of Commerce and article 2074 of the Luxembourg Civil Code and
takes notice of the terms of the Pledge Agreement.
Furthermore, by signing hereunder for acceptance, the Account Bank acknowledges
and accepts the security interest created hereunder over the Pledged Securities
for the purposes of Article 9 of the 2001 Law and undertakes to ▇▇▇▇ the
Securities Sub-Account in accordance with Clause 2.3 of this Pledge Agreement.
The Account Bank confirms that it is not aware of any prior encumbrances over
the Bank Account or the Pledged Assets. The Account Bank hereby releases any
pledge or lien resulting from the application of its general terms and
conditions or any other agreement over the Bank Account or Pledged Assets and
waives its right of retention, set-off rights and, more generally, any rights
that may adversely affect the Pledge and waives any option to create new pledges
or liens over future accounts of the Pledgor.
The Account Bank
HVB BANQUE LUXEMBOURG SOCIETE ANONYME
By:
---------------------------- -------------------------------
Name: Name:
Title: Title:
Address: ▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
SCHEDULE 9
Security Agreements
1. First ranking Land Charge by the Borrower in an aggregate amount of EUR
827,950,000 on the Site of the Borrower dated on or about the date hereof
whereby the Borrower submits in a separate certificate to the immediate
enforcement of judgement concerning the Site in an amount of EUR 60,000,000;
2. Security Purpose Agreement with regard to the first ranking Land Charge
between the Borrower and the Security Agent dated on or about the date hereof;
3. Security Transfer Agreement as security transfer of equipment (plant or
machinery) and as security transfer of all assets of the Borrower on the Secured
Site between the Borrower and the Security Agent as of the date hereof;
4. Global Assignment Agreement (including claims out of pocket and delivery
agreements) between the Borrower and the Security Agent dated on or about the
date hereof;
5. Insurance Claims Assignment Agreement between the Borrower and the
Security Agent dated on or about the date hereof;
6. Investment Incentives Assignment Agreement between the Borrower and the
Security Agent dated on or about the date hereof;
7. Account Pledge Agreement between the Borrower and the Security Agent
dated on or about the date hereof;
8. Pledge of Hedging Claims Agreement between the Borrower and the Security
Agent dated on or about the date hereof; and
9. Share Pledge Agreement between SP Holding, RWE-IN and FAHR and the
Security Agent dated on or about the date hereof.
SCHEDULE 10
State Guarantee
C&L Deutsche Revision
Aktiengesellschaft
Wirtschaftsprufungsgesellschaft
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
June 20, 2002
To: Bayerische Hypo- und Vereinsbank AG
Global Project Finance
Attn: ▇▇. ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇
Federal/State guarantees / Zellstoff Stendal GmbH
Ladies and Gentlemen:,
attached you will find the decision regarding guarantees by the Federal
government and the State of Sachsen-Anhalt as resolved on the meeting of the
ministers on March 27, 2002. Also attached you will find the grant of the
Federal government and the State with the request to give notice of the
recognition of the above decision in writing.
Since the decision about the grant of guarantees is not subject to any
preconditions, we ask you to transfer 0.25% of the guarantee, i.e. Euro
1.174,000) onto our account as described in the Section labeled "Comments"
(Account of the Federal Ministry of Finances, Account No. ▇▇▇▇▇▇▇, Routing no.
300500000) In the future due payments
(October 1st and April 1st of each year of the guarantee), please pay the
amounts required pursuant to the guarantee agreement on your own initiative.
Please submit the draft of the credit agreement so we can issue the guarantee.
Regards,
C&L Deutsche Revision
(Signature ▇▇▇▇) (Signature Ringelstein)
Decision of the meeting of ministers on March 27, 2002 regarding the application
of Zellstoff Stendal GmbH, Arneburg, for a guarantee
A. Borrower
Zellstoff Stendal GmbH, Niedergorner Damm 1, 39596 Arneburg
B. Credtior
Consortium of banks led by Bayerische Hypo- und ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇ ▇▇▇▇▇▇
The Syndication of parts of the credited amount is planned.
C. Credited amount
Total of EUR 587.000.000 by banks, consisting of
a) EUR 465.000.000 of investment financing
b) EUR 122.000.000 of internal financing
The credits are to be certified based on the Master Credit Agreement
F.02.01.2001 and pursuant to the "Comments" (version 2001) known to the creditor
and borrower and in accordance with the attached term sheet dated March 27, 2002
provided that for the
amount of the guarantee fee based on the application for a guarantee dated June
29,2000, the terms and conditions known to the creditor and the debtor
"Comments" (F.12.10.1990; version 1993) are still applicable.
D. Terms and Conditions of the credit
Relating to a) Investment credit
------------------------------------
Payment: Pursuant to the progress of the project, a total of 100%
Interest: The customary market interest variable, based on EURIBOR and an
additional payment of 0.75% per annum.
Amortization: In semi-annual rates, beginning on the date of the first
repayment date for years after the first valutation.
Duration: Until the first payment after the 15th year after the first
drawdown.
The required credit for investment purposes may partly or in whole be described
by program credits that are not relevant to granted project-related financing
aids. In this case, the terms and conditions of the respective credit agreement
apply.
Relating to b) Internal financing credit
---------------------------------------------
Payment: As required in a maximum of four tranches, totaling 100% latest
due on the day of "Acceptance".
Interest: Common market interest valuable and based on the EURIBOR plus an
additional payment of 0.6% per annum for the guaranteed portion and 1.5% per
annum on the continually increasing amount that is not covered by the guarantee
as reduced by the continually rising amount that is not subject to the
guarantee.
Amortization: 1. For a partial sum of EUR 62 million, consisting of
three subtranches, each subtranche will be reduced in eight consecutive
following semi-annual payments of the same amount. The subtranches have to be
reduced until the first repayment date after the 8th year of the first
utilization of each subtranche.
2. For partial sum of EUR 60 million, between creditor
and borrower until the due date of the investment credit: none.
Duration: Each under the above number 1 described subtranche until the first
repayment date after the 8th year of the first utilization of the credit;
the partial amount as described under number two pursuant to the duration of the
investment credit as described under lit.a).
Certification period for a) and b):
----------------------------------------
Until September 30, 2002
If the credit agreements are not signed within this period, the
grant of guarantee by the Federal government and the State of Sachsen-Anhalt
will cease to exist. Under special circumstances the guarantors may grant an
extension of the certification period.
E. Guarantee of the federal government and the state of Sachsen-Anhalt
A total of 80% of the amount due after the realization of securities pursuant to
the Exhibit F.02.01.2001 FEDERAL/STATE subsidiary guarantee (without the right
to prior settlement of claims) pursuant to the Section "Comments". The
guarantees will be accepted in the form of pro rata and parallel guarantees of
the Federal government (48%) and the State of Sachsen-Anhalt (32%).
The guarantees of the Federal government and the state for the respective
subtranches of the credit for internal funds in the amount totaling EUR 122
million will be reduced semi-annually by 12.5% per annum, beginning on the first
payback date four years after the first utilization of each subtranche.
F. Utilization of the credit
Financing of the investment and company with regard to a construction of a
facility for the production of bleached softwood pulp including the financing of
the company pursuant to the following financing plan.
FINANCE REQUIREMENTS EUR THOUSAND EUR THOUSAND
-------------------- ------------ ------------
Capitalized investment financing
- real estate cost and
cost/infrastructure 28,900
- project development, planning
and permit costs until
financial close 22,000
- EPC contact (setup costs) 716,000
- EPC contract (incidental
expenses) 10,500
- Setup costs and management,
ZSG portion 46,500
- Construction period interest
of tranche A to start-up 20,342
Total 844,242
Operating assets 121,478
Debt service reserves account
(initially debt-financed) 42,000
Cost overrun and debt service
reserves (financed from
internal funds) 30,000
TOTAL FINANCE REQUIREMENTS 1,037,720
FINANCE REQUIREMENTS EUR THOUSAND EUR THOUSAND
-------------------- ------------ ------------
Internal funds
- equity 15,000
- subordinated shareholder loans 55,000
- reserves of internal funds/cost
overrun financing 15,000
- internal funds (debt service 15,000
reserve account)
Total internal funds 100,000
Start-up cashflow 26,016
109,161
Subsidies 165,515
- GA subsidy
- investment subsidy 465,000
Total subsidies 122,000 274,676
9,000
Borrowed funds 42,000
- guaranteed credit long-term
(Tranche A)
- guaranteed credit short-term
(Tranche B)
- guaranteed credit (not
guaranteed,
Tranche D 1)
- bank loan for debt service
reserve account (not
guaranteed, Tranche C)
(- bank loan (cost overrun
reserve, not guaranteed,
Tranche D2)) (30,000)
Total borrowed funds
(excluding reserve) 638,000
TOTAL FINANCING 1,038,692
The slight excess of the financing requirements results from rounding up the
guaranteed credits and shall serve as additional reserve for the project.
The financing plan is based on the Term Sheet dated March 27, 2002 and
additionally covers a preliminary credit line of EUR 160 Mio. as Tranche E as
well as credit lines for futures relating to dealing in currencies, agreements
to protect interest rates and hedging agreements relating to pulp.
After the investment, the start-up and the finalization of the test-run of the
company, a financial statement of the project including information as to how
far reserved financing capital has been used must be submitted to the leader of
the consortium and the Federal government and the State as guarantor (attention:
C&L Deutsche Revision).
G. Collateral of the credit
Collateral (as described below) serves on a pro rata basis and is equally ranked
as security of the guaranteed credit and the credit tranches C, D1, D2, and E
totaling EUR 241 million as to be provided by the creditor pursuant to the Term
Sheet dated March 27, 2002, and the credits for future relating to currencies,
agreements for the protection of interest and hedging agreements relating to
pulp up to an amount totaling EUR 200 million.
1. First ranking land deed in the amount of EUR 638 million on the real
estate of the debtor in Arneburg.
Existing charges
In column II of the land register: only charges customary to the industry
In column III of the land register: none
2. Transfer by way of security of all machines and technical equipment that
will be bought in the process of the project, provided they are not subject to
third parties rights.
3. Transfer by way of security of assets located in the storage area of the
borrower in their respective state, free of third parties' rights, except assets
delivered under a retention of title as is customary in the respective business.
4. Assignment of the claims against customers of the borrower, free of third
parties' rights, excluding items sold under an extended retention of title by
suppliers in the ordinary cause of their business.
5. Assignment of the rights and claims of all material agreements relating
to the project.
6. Pledge of the accounts of the borrower relating to the project.
7. Assignment of all claims with respect to insurances of the borrower.
8. Pledge of all claims resulting from hedging contracts.
9. Pledges and assignments of the shares of the borrower Zellstoff Stendal
GmbH.
As permissible under law:
10. Assignment of claims relating to the payment of investment grants.
Alternatively, the borrower shall pay the grants for investment to an account
that has been pledged to the creditor.
H. Miscellaneous
I. Conditions relating to the validity of the credit
Prior to first drawdown of the credit, the creditor needs to receive proof that,
1. the investment grants have been granted;
2. equity to contribute to the financing to the project in the amount of EUR
70 million serving as equity and/or subordinated credits of the shareholders
have been utilized and that reserve equity funds are available;
3. the entire financing of the project is secured.
II. Conditions and other provisions
1. Prior to the first drawdown of the credit proof has to be submitted to
the creditor that authorization required under law and needed to realize the
project have been granted (in case such authorization cannot be presented, a
written statement of the respective authority shall be submitted, stating that
the submitted information relating to the applied authorization currently do not
pose an obstacles for the authorization).
2. Granted investment aids and other investment payments have to be
pre-financed in the amount of the granted credit line of EUR 160 million without
guarantee.
3. The borrower is required to establish an account pursuant to the Term
Sheet dated March 27, 2002 consisting of surplus from cash-flow, equity and
credits that are not subject to guarantees in the amount needed for payments in
the respectively following twelve months, which may be reduced by equity not
needed to repay the debts, such as equity with respect to the increase in costs.
4. The maximum interest rate of credits by the shareholders is 7% per annum.
Payment of the interest is permissible, beginning on the date that the credit
covered by the guarantee needs to be paid back, after the respective payments on
credits and the obligations arising under the subsidiary debt account have been
made. The afore mentioned conditions apply as far as permissible by law, also
to the distribution of earnings.
5. Commercial transactions between the borrower and its shareholders and
other companies under the influence of the shareholders or of the borrower,
for example affiliates for the supply of wood and transportation, have to comply
with contracts customary to the market; in the annual financial statement, the
annual auditor shall make a statement with respect to such transactions.
6. Any moratorium of credit payments pursuant to section II par. 3 of the
"General Conditions for Guarantees granted by the Federal Republic of Germany
and parallel Guarantees of the States" will only be granted if with respect to
the quota of credits that are not subject to a guarantee, and that have been
given an extension. Payments on the first payback date, however, need to be
repaid pursuant to term sheet dated March 27, 2002, unless sufficient funds are
not available for the payback of all tranches except for Tranche E. In this
case the Tranches C, D 1 and D 2 will be subject to a moratorium. A moratorium
for credits subject to the guarantee on the first date of payback will only be
granted if no sufficient funds for repayment are available.
7. The acceptance of the grant of guarantee includes a restatement of the
prior statement of the borrower that it has knowledge of the laws of state
grants and their conditions.
Bonn/Berlin, April 8 and 9, Per procuration Per procuration
2002
Federal Ministry Federal Ministry
for Economy and for Finance
Technology
(▇▇▇▇▇▇▇▇▇)
(Kleinpoppen)
Magdeburg, April 12, 2002 Per procuration Per procuration
Federal Ministry Federal Ministry
for Economy and for the state
Technology of ▇▇▇▇▇▇-▇▇▇▇▇▇
of the state
Sachsen-Anhalt (▇▇▇▇▇)
(Spieler)
Dusseldorf, April 2, 2002 Per procuration
C&L Deutsche Revision
(Sinne) (Ringelstein)
Federal Ministry for Commerce and Technology
Bonn, June 20, 2002
Bayerische Hypo- und Vereinsbank AG
Global Project Finance
z.Hd. Herrn ▇▇. ▇▇▇▇▇▇
Am Tucherpark
80538 Munchen
Guarantees of the Federal Government and the State/Zellstoff Stendal GmbH,
Arneburg
Your application dated June 29, 2000
Dear Ladies and Gentlemen,
With approval of the Federal Minister of Finance and in coordination with the
state and with respect to the discussions of ministers I have made the following
decision as you can see attached to the letter to C&L Deutsche Revision AG, D
usseldorf, dated June 20, 2002. In this matter, please communicate directly with
C&L Deutsche Revision AG, D sseldorf, who is the fiduciary of the federal
government and the state.
Regards
(by order)
▇▇. ▇▇▇▇▇▇
SCHEDULE 11
Financing of the Subsidiaries
Structure
ZSG
--------------------------------------------------------------------------
100%
Support Holding Company Support Holding Company
| | greater than or
| | equal to 51%
Wood supply company Logistics company
Contractual Matrix
[ ] All pulp sales contracts entered into by ZSG as principal.
[ ] Up to 50% of the wood will be sourced through the wood supply operating
company acting as principal. Contracts for the balance will be entered into by
ZSG as principal acting either directly or through the wood supply operating
company as its agent.
[ ] Profit and Loss Transfer Agreement entered into between ZSG and support
holding companies.
[ ] Maximum working capital limited to EUR 8mn down-streamed by ZSG to the
Holding Companies and, from such companies, to subsidaries.
[ ] Service agreement entered into between ZSG and Wood Supply Operating
Company providing for provision of up to 100% of total wood supply requirement.
Payment for wood supplied by Wood Supply Operating Company only against actual
delivery at mill. Average price over any 12 month period not to exceed average
market price over similar period as evidenced by contracts entered into by ZSG
as principal unless justified by ZSG to the reasonable satisfaction of the
Majority Lenders for exceptional reasons (e.g start-up, initial development of
new sources of supply etc.).
[ ] Support holding companies employ all employees except management. Support
holding company will on their "own-account" enter into leasing agreements for
wood harvest equipment and trucks with a maximum exposure of EUR 17 mn.
[ ] Each holding company enters into a service agreement with its respective
operating companies pursuant to which it will make available personnel (and in
the case of the holding company "own-account"-trucks on their own accounts)
against payment of fee covering annual operating / financing costs etc. of such
Support Holding Company.
OTHER ISSUES
[ ] Pledge of all bank accounts of Support Holding Companies to secure ZSG
debt and of Operating Companies to extent of working capital loans downstreamed
to them from time to time from ZSG.
[ ] Direct Agreement (substantially in the form annexed hereto) between ZSG
lenders and leasing companies providing that leasing companies cannot terminate
leases without giving prior notice to ZSG lenders and not at all if the ZSG
lenders "step-in" to the leases making good any existing payment default.
[ ] The Borrower delivers to the Agent:
(a) as soon as possible and no later than ninety (90) days after the close
of its financial year (i) the balance sheet, the profit and loss calculation and
the cashflow statement for the subsidiaries in respect of that financial year,
audited by a recognised independent firm of accountants with a license to
practice in the Federal Republic of Germany as well as a reconciliation of the
annual financial statements with the annual budgeted accounts made by the
Borrower which includes an explanation of all material deviations of it from the
budgeted annual financial statements; and (ii) the corresponding auditing report
of the firm of accountants; and (iii) a certificate of this firm of accountants
certifying that all business contracts of the Borrower with Related Parties in
this financial year have been entered into on conditions not less advantageous
to the Borrower than those business contracts achievable with third parties;
(b) upon request by the Agent semi-annually unaudited economic
evaluations, a list of balances and a statement of the board of directors in
respect of the development of the subsidiaries.
Annex
THIS DIRECT AGREEMENT is made on [ ], 2002 between
(1) [LEASING COMPANY] (the "Leasing Company")
(2) ZELLSTOFF STENDAL GmbH ("ZSG")
(3) ZSG SUPPORT HOLDING COMPANY ("Holding") and
(4) BAYERISCHE HYPO-UND VEREINSBANK AG (the "Agent")
WHEREAS
A. ZSG [will build and operate/has built and operates] a bleached softwood
kraft pulpmill located at Arneburg, Sachsen-Anhalt, Federal Republic of Germany
(the "Mill").
B. The Leasing Company has agreed to lease certain ["trucks/harvesters"]
(the "Equipment") to the Holding (a wholly-owned subsidiary of ZSG) as more
particularly identified in that certain Leasing Agreement dated [ ],
2002 (the "Leasing Agreement") for use in the operation of the Mill.
C. The Agent is agent for a syndicate of banks who have lent money to ZSG to
finance the construction and operation of the Mill.
IT IS AGREED as follows:
1. The Leasing Company agrees not to take any steps ("Enforcement Steps") to
terminate, rescind or suspend performance of the Leasing Agreement or to
repossess or seek to repossess any of the Equipment without first giving not
less that 30 days prior written notice thereof to the Agent specifying the
amount of any existing payment default under the Leasing Agreement.
2. If during such 30 day period the Agent or its nominee makes good such
payment default and undertakes by notice (a "Step-in-Notice") to the Leasing
Company that it will assume together with Holding responsibility for compliance
with the Leasing Agreement from the date of its notice until the date it serves
on the Leasing Company a further notice (a "Step-out Notice") specifying that it
will no longer be responsible for such compliance, the Holding undertakes not to
take any Enforcement Steps in respect of any default by Holding under the
Leasing Agreement which occurred prior to the effective date of the Step-in
Notice.
3. During the 30 days period referred to in Clause 1 and thereafter if the
Agent makes good the payment default and serves a Step-in Notice the Leasing
Company shall continue to perform its obligations under the Leasing Agreement.
If the Agent does not make good the payment default and serve a Step-in Notice
or if having done so it serves a Step-out Notice the Leasing Company may take
such action as it thinks fit to enforce its rights against the Holding under the
Leasing Agreement with effect from the expiry of such 30 day period or, as the
case may be, the effective date of the Step-Out Notice
4. All notices or other communications required or permitted hereunder shall
be in writing addressed to the relevant party at its address identified with its
signature below or such other address as any party may, by notice to each of the
other parties, specify. All notices shall be deemed delivered upon receipt.
5. This Direct Agreement shall be governed by and construed in accordance
with the laws of the Federal Republic of Germany.
6. The exclusive place of jurisdiction to hear and determine any suit,
action or proceeding and to settle any dispute which may arise out of or in
connection with this Direct Agreement is [Munich]. Mandatory places of
jurisdiction remain unaffected.
AS WITNESS the hands of the parties
[LEASING COMPANY] ZELLSTOFF STENDAL GmbH
by By
---------------------------------- -------------------------------
Address: Address:
Fax No: Fax No:
BAYERISCHE HYPO-UND VEREINSBANK AG
By
----------------------------------
Address:
Fax No:
SCHEDULE 12
Minimum Insurance
Schedule
Bankrisk Services Stendal Pulp Mill Project
Insurance Due Diligence Arranger's Insurance Concept
Minimum Insurance Schedule
CONSTRUCTION PHASE INSURANCE
1. Construction/Erection "All Risks" Material Damage Insurance
1.1 The Insured Parties
(a) Borrower and any Subsidiary Companies;
(b) The EPC Contractor and/or Contractor's Suppliers in respect of the EPC
Contract and the Contractor and/or Contractor's Suppliers in respect of the
non-EPC ancillary Contracts;
(c) Any consultants and suppliers for their site activities only;
(d) The Independent Engineer,
Each for their respective rights and interests.
1.2 The Insured Property
All permanent and temporary works, preliminary works (including associated works
and site mobilisation) executed or in course of execution, materials, goods,
parts, excavations, spare parts inventory, debris removal, consumables, fuels,
chemicals and oils and all other things equipment of whatsoever nature used for
or intended for incorporation within the Site, including the rail spur,
electricity, steam, gas and water interconnections, all designs drawings
specifications plans to be provided, together with computer and building
services equipment, all other parts or units or equipment plant and machinery or
whatever nature the property of the insured or for which they are responsible,
(but excluding any contractor's or sub contractor's constructional plant and
equipment), while on or adjacent to the Site and all associated and ancillary
works connected to the Plant.
1.3 Geographical Limits
Europe and Scandinavia.
1.4 Sum Insured
EURO 625,000,000 representing the amount equivalent to the total reinstatement
value of the Works and the Plant, including allowance for the costs of
demolition and debris removal and professional fees (including construction
management, Technical Advisers fees and fuel, chemical, raw material and Spares
Inventory at Site at the date of Acceptance), customs duties of the Works and
the Plant (as applicable). The sum insured is to operate in respect of each
occurrence of loss or damage to the insured property.
1.5 Indemnity
All risks of physical loss of or damage to any part of the Insured Property from
any cause not excluded.
1.6 Period of Insurance
From Financial Close (or the Commencement Date under the EPC Contract if
earlier) until the date of Acceptance, extending for an additional 18 months
thereafter with respect to cover during the Defects Liability Period.
Bankrisk Services Stendal Pulp Mill Project
Insurance Due Diligence Arranger's Insurance Concept
1.7 Main Exclusions
The Insurers shall not be liable for:
(a) War, Civil War, etc., including Terrorism (until such time as insurance
against acts of Terrorism becomes available in the international market on what
the Security Agent accepts to be reasonable commercial terms);
(b) Radioactive Contamination, etc.;
(c) Wear and Tear and gradual deterioration but this shall not exclude
consequent loss or damage;
(d) Date Recognition Clause;
(e) Unexplained Disappearance or Shortages;
(f) Consequential Losses, loss of use, delay penalties;
(g) Contractor's or its Subcontractor's Constructional Plant and Equipment;
(h) Loss of cash, banknotes, treasury notes, money orders, cheques or
stamps;
(i) Costs incurred arising out of wear, tear, wasting or wearing away,
gradual deterioration, rust, oxidation, corrosion or erosion but not consequent
damage;
(j) Marine and Air transits (but not transits inland waterways);
(k) Vehicles licensed for road use.
1.8 Maximum Deductible
Not exceeding EURO 75,000 in respect of each and every occurrence of loss or
damage.
1.9 Main Extensions/Conditions
(a) Including loss or damage arising from acts of Terrorism, strikes, riots,
civil commotion and criminal/malicious damage (except that insurance against
acts of Terrorism will be excluded until such time as that insurance becomes
available in the international market on what the Security Agent accepts to be
reasonable commercial terms);
(b) Natural Hazards Limit; Euro 12,500,000 each event and Euro 25,000,000
per annum;
(c) Defective Design cover only excluding the component part that is
defective but otherwise covering consequential damage;
(d) Debris removal;
(e) Expediting expenses;
(f) Professional and surveyor's fees;
(g) Automatic reinstatement of sum insured;
(h) Escalator on Sum Insured;
(i) Escalator on Limit of liability applied to Sum Insured;
(j) Seventy-two Hour Clause;
(k) Plans Specifications Drawings Electronic Records and data Clause;
(l) 50/50 Marine/Construction Loss Sharing Clause;
(m) Temporary Repairs and Minimizing Loss;
(n) Offsite Storage and inland Transits;
(o) Cover during Defects Liability Period to cover loss or damage caused to
the Works and the Plant by defects or whilst work is being undertaken pursuant
to the Defects Liability provisions of the relevant EPC Contract.
2. Delay in Start up/Advance Loss of Revenue Insurance (Construction)
2.1 The Insured Parties
Borrower
Bankrisk Services Stendal Pulp Mill Project
Insurance Due Diligence Arranger's Insurance Concept
2.2 Period of Insurance
From Financial Close (or the Commencement Date under the EPC Contract if
earlier) until the date of Acceptance.
2.3 Indemnity
Fixed operating costs and standing charges including loss of debt service
(interest - including fees - and Principal); plus any minimum take or pay
obligations; plus increased cost of working following delays in the date of
Start Up, including in the five month period from the date of Start Up until the
scheduled date of Acceptance, as a direct result of physical loss or damage
covered under Paragraph 1, "Construction/Erection "All Risks" Material Damage
Insurance," of this Minimum Insurance Schedule including loss or damage, which
would be insured but for the application of any deductible, that causes an
interference in the construction work resulting in a delay to the scheduled date
of Start Up or such later date on which the Insured Business would have become
operational or causes an interruption of the operation as scheduled from the
date of Start Up until schedule date of Acceptance, respectively.
2.4 Sum Insured
EURO 160 million for any 12 months period of indemnification being an amount
sufficient to cover the Plant's fixed operating costs including interest, fees
and principal payable plus any minimum take or pay obligations for the duration
of the Indemnity Period.
2.5 Indemnity Period
A period of 18 months from the scheduled Start Up date including the period from
the scheduled date of Start Up until the scheduled date of Acceptance for FLEXA
(Fire Lightning Explosion and Aircraft) perils and Acts of God and 12 months
from the scheduled Start Up date including the period from the scheduled date of
Start Up until the scheduled date of Acceptance for Machinery Breakdown & all
other damage.
2.6 Main Exclusions
The insurance excludes any event not insured under paragraph 1
"Construction/Erection "All Risks" Material Damage Insurance, above.
2.7 Maximum Time Excess
Not exceeding 60 days any one delay.
3. Marine Cargo and Inland Transit Insurance
3.1 The Insured Parties
(a) Borrower and any Subsidiary Companies;
(b) The EPC Contractor and/or Contractor's Suppliers in respect of the EPC
Contract and the Contractor and/or Contractor's Suppliers in respect of the
non-EPC ancillary Contracts;
(c) The Independent Engineer,
Each for their respective rights and interests.
3.2 Period of Insurance
From Financial Close (or the Commencement Date under the EPC Contract if
earlier) until date of delivery of the final consignment to the Site.
Bankrisk Services Stendal Pulp Mill Project
Insurance Due Diligence Arranger's Insurance Concept
3.3 The Insured Property
All imported Cargoes and/or interest and/or stock of whatsoever description
including plant, equipment, machinery, (other than Contractor's construction
plant and equipment), spare parts and other items for incorporation within the
Site.
3.4 Sum Insured
EURO 40,000,000 any one shipment but not less than 110% of the maximum value
(including cost of freight and insurance) any one conveyance and/or location of
each shipment and EURO 10,000,000 for Inland Transit.
3.5 Indemnity
Against "All Risks" of physical loss or damage while in transit by sea, air or
land or inland waterway portion of the journey or whilst in storage en route.
From the time the insured items leave the warehouse or factory anywhere in the
world for shipment or transit to, and until they are delivered and unloaded at
the Site, and return.
3.6 Main Exclusions
(a) German Institute Insolvency Exclusion Clause or Equivalent;
(b) German Institute Radioactive Contamination Exclusion Clause or
Equivalent;
(c) Excluding electrical and mechanical derangement unless caused by an
insured peril.
3.7 Main Extensions/Conditions
(a) German Institute Cargo and Air Cargo Clauses (A) or Equivalent;
(b) German Institute War Clauses (Cargo, Air Cargo) or Equivalent;
(c) German Institute Strikes Clause (Cargo, Air Cargo) or Equivalent;
(d) German Institute Classification Clause or Equivalent;
(e) German Institute Replacement Clause or Equivalent;
(f) 50/50 Marine Construction Loss Sharing and Concealed Damage clause;
(g) Debris Removal Clause;
(h) Expediting Expenses;
(i) Transhipment Clause;
(j) Accumulation Clause/Off-Site Storage.
3.8 Maximum Deductible
Not to exceed EURO 10,000 each and every loss.
4. Marine Delay in Start Up/Marine Advance Loss of Revenue
4.1 The Insured Parties
Borrower
4.2 Period of Insurance
From the date of Financial Close or the Commencement Date under the EPC Contract
(if earlier) until the date of Start Up.
Bankrisk Services Stendal Pulp Mill Project
Insurance Due Diligence Arranger's Insurance Concept
4.3 Indemnity
Fixed operating costs and standing charges including loss of debt service
(interest - including fees - and Principal); plus any minimum take or pay
obligations; plus increased cost of working following delays in Start Up as a
direct result of physical loss or damage covered under Paragraph 3, "Marine
Cargo/Transit Insurance," of this Minimum Insurance Schedule including loss or
damage, which would be insured but for the application of any deductible, that
causes an interference in the construction work resulting in a delay to the
scheduled date of Start Up or such later date on which the Insured Business
would have become operational.
4.4 Sum Insured
EURO 160,000,000 being an amount sufficient to cover the Project's fixed
operating costs including interest, fees and principal payable plus any minimum
take or pay obligations for the duration of the maximum Indemnity Period.
4.5 Indemnity Period
A minimum of 12 months from the schedule date of Start Up.
4.6 Main Exclusions
The insurance excludes any event not insured under paragraph 3, "Marine
Cargo/Transit Insurance," above.
4.7 Maximum Time Excess
Not exceeding 60 days any one delay.
5. Third Party Liability/Environmental Impairment Liability
5.1 The Insured Parties
(a) Borrower and Subsidiary Company;
(b) The EPC Contractor and/or Contractor's Suppliers in respect of the EPC
Contract and the Contractor and/or Contractor's Suppliers in respect of the
non-EPC ancillary Contracts;
(c) Any consultants and suppliers for their site activities only;
(d) The Independent Engineer;
(e) Each of their respective assigns, employees, agents, officers, partners
and Directors,
Each for their respective rights and interests.
5.2 Period of Insurance
From Financial Close (or the Commencement Date under the EPC Contract if
earlier) until the date of Acceptance, extending for an additional 18 months
thereafter with respect to cover required in respect of the EPC Contractor
and/or its Suppliers during the Defects Liability Period.
5.3 Indemnity
The legal and contractual liability of an Insured to pay damages, costs and
expenses as a result of:
Bankrisk Services Stendal Pulp Mill Project
Insurance Due Diligence Arranger's Insurance Concept
(a) Death, bodily injury and disease (including mental shock) of any person;
(b) Loss or damage to any third party property and/or loss of use thereof;
(c) Interference with traffic or property or any easement, right of air,
light, water, support or way or enjoyment of use by obstruction, loss of
amenities, nuisance, trespass or any like cause; and
(d) false arrest, invasion of privacy, detention, eviction or any like
cause,
Arising out of or in the course of or in connection with the performance of the
Works.
5.4 Geographical Limits
World-wide.
5.5 Limit of Indemnity
Not less than EURO 10,000,000 for any one occurrence or all occurrences of a
series consequent upon or attributable to one source or original source but in
respect of Products Liability EURO 10,000,000 in the aggregate.
5.6 Maximum Deductible
Not more than EURO 25,000 in respect of third party property damage only and not
more than EURO 250,000 in respect of EIL.
5.7 Main Extensions/Conditions
(a) Cross Liabilities Clause;
(b) World-wide jurisdiction clause;
(c) legal costs and expenses;
(d) Contingent Motor Liability.
5.8 Main Exclusions
(a) Death of, or bodily injury to, or illness or disease contracted by, the
employees of the Insured claiming indemnity arising out of or in the course of
their employment;
(b) Property belonging to, or in the charge, or under the control of, the
Insured;
(c) Liability arising out of technical or professional advice given for a
fee by the Insured or by any person acting on behalf of the Insured other than
advice relating to the construction and operation of the Plant in so far as
insured under paragraph 1, "Construction/Erection "All Risks" Material Damage
Insurance," of this Minimum insurance Schedule;
(d) Liability arising out of the use of mechanically propelled vehicles for
which compulsory insurance or security is required by legislation, except whilst
in use as a tool of trade;
(e) The cost of making good loss of or damage to property indemnified under
the insurance referred to in paragraph 1 "Construction/Erection "All Risks"
Material Damage Insurance," of this Minimum Insurance Schedule;
(f) Liability arising from ownership, possession, use or control of any
aircraft or watercraft; and
(g) Liquidated damages or penalties under any agreement in connection with
delay or guarantees of performance or efficiency.
5.9 Environmental Impairment Insurance ("Umwelthaftpflichtversicherung")
(a) All events for which one of the insured becomes liable to pay in respect
of legal liabilities to third parties arising from contamination of the Project
Site, which results in a pollution event causing third party bodily injury or
property damage;
Bankrisk Services Stendal Pulp Mill Project
Insurance Due Diligence Arranger's Insurance Concept
(b) Temporary ownership in Cover Component 2.6 of the
Umwelthaftpflicht-Modell des HUK-Verbandes;
(c) 36 month extended reporting period after cancellation.
SCHEDULE 13
Sample Table of Content Regarding
Quarterly Construction Progress Reports
Summary
1. Inspection Programme
1.1 Visits and Events
1.2 Next Steps
2. Organisation and Staffing
2.1 Recruitment
2.2 Site Organisation
3. General Progress and Observations
3.1 Pulp Mill, General
3.2 Pulp Mill, Technical Issues
3.3 Review of Quality of Installations
3.4 Training
3.5 Owner's Scope of Work
3.5.1 Works
3.5.2 Infrastructure and Connections
3.5.3 Municipalities
3.5.4 Utilities Supply
3.5.5 Administration
3.5.6 Chemicals and Supplies
4. Permits
4.1 Review of Permit Situation
4.2 New Permits and Inspections
5. Commissioning Plan
5.1 Departmental Plans
5.2 Start-up of Pulp Production
5.3 Operational budget
5.4 Wood Supply
5.5 Wood Transport
6. Investment Budget Follow-up
7. Main Events Causing Deviations and Change Orders
8. Milestones
8.1 Intermediate Steps
8.2 CMC 4
8.3 Start-up
8.4 Operational Acceptance
8.5 PAC 4
8.6 Performance Tests FAC 4
9. Certificates
9.1 Certificates Issued
9.2 New Certificates
ANNEXES
(A) Recruitment Plan
(B) Time Schedules
(C) Time Schedule Follow-up
SCHEDULE 14
Transfer Certificate
Transfer Agreement
Between
[ ]
(the "Assigning Lender")
and
[ ]
(the "Assignee")
Preamble
Whereas, by the agreement dated 26 August 2002 (the "Facility Agreement") the
Assigning Lender together with the other Lenders has provided to the Borrower
the Facility Agreement for an aggregate principal amount of up to EUR
827,950,000. The Assigning Lender has assumed a Lender's Commitment in the
amount of EUR [ ].
Whereas, the Assigning Lender has pursuant to Clause 31.2 of the Facility
Agreement the right to assign to a bank or financial institution its legal
position as Lender including all its rights, benefits and obligations under the
Facility Agreement in whole or in part in amounts of not less than EUR 10
million.
Whereas, the Assigning Lender is desirous to transfer its rights, benefits and
obligations related to an amount of EUR [ ] of the Facility Agreement to the
Assignee and the Assignee is desirous of assuming the legal position of the
Assigning Lender related thereto including all rights, benefits and obligations.
Now therefore, the parties to this Transfer Agreement hereby agree as follows:
1. Definitions
Terms used but not otherwise defined herein shall have the meaning given to them
in the Facility Agreement.
2. Transfer of Assigning Lender's Participation in Advances
Subject to the payment to the Agent of a fee in the amount of EUR 1,000 and to
the condition precedent that the Assignee pays the transfer price on the date of
payment as defined in Clause 6.2 , the Assigning Lender herewith assigns and
transfers and the Assignee herewith assumes, the Assigning Lender's legal
position related to such Lender's portion of its participation in each
outstanding Advance and/or the Commitments (applied rateably across the Tranches
and in any particular Tranche rateably between the Assigning Lender's share in
each outstanding Advance thereunder and its undrawn Commitment in relation
thereto) in the amount set out in Clause 6.2 hereof, including but not limited
to all rights, benefits and obligations of the Assigning Lender under the
Facility Agreement, the Shareholders' Undertaking Agreement, the Security
Agreements and the Security Pooling Agreement as against the Borrower (if
transferable) and the other parties thereto (the "Transferred Position")
effective as of the date of payment as defined in Clause 6.2. Upon the transfer
as set forth above becoming effective, the Assigning Lender shall be released
from the obligations related to the Transferred Position to the Borrower on the
one hand and to the Lenders on the other hand.
3. Confirmations
3.1 The Assignee confirms that it has received a copy of the Facility
Agreement and all other documentation and information required by it in
connection with the transaction contemplated by this Transfer Agreement.
3.2 The Assignee confirms that it has made and will continue to make its own
assessment of the validity, enforceability and sufficiency of the Facility
Agreement and the Transfer Agreement and has not relied and will not rely on the
Assigning Lender, the Original Lender and the Agent or any statements made by
any of them in this respect.
3.3 The Assigning Lender hereby confirms that it has fulfilled its
obligations arising out of the Facility Agreement with respect to the
Transferred Position until the date hereof. The Assigning Lender gives no
representation or warranty and assumes no responsibility with respect to the
validity or enforceability of the Facility Agreement or any document related
thereto and assumes no responsibility for the financial conditions of the
Borrower or any other party to the Facility Agreement or for the performance and
observance by the Borrower or any other party of any of its obligations under
the Facility Agreement and all such representations and warranties, whether
expressed or implied by law or otherwise, are hereby excluded.
3.4 The Assignee hereby ratifies and confirms the declarations and acts made
by the Security Agent on its behalf pursuant to Clause 4.3 of the Share Pledge
Agreement dated 26 August 2002 between the Shareholders as pledgors and the
Security Agent as pledgee (as amended from time to time) and Clause 2.5 of the
Account Pledge Agreement dated 26 August 2002 between the Borrower as pledgor
and the Security Agent as pledgee (as amended from time to time).
4. Miscellaneous
4.1 The Assigning Lender shall inform the Agent without undue delay of the
transfer of the Transferred Position pursuant to Clause 2 by sending an executed
copy of this Transfer Agreement to it.
4.2 The Assignee herewith empowers the Agent to exercise such rights, powers
of attorney and discretions as set forth in the provisions of the Financing
Documents.
4.3 Without prejudice to any future change of address, all correspondence to
the Assignee shall be sent to the following address:
[ ]
Attn.:
Fax:
5. Legal Provisions
5.1 Any alteration or amendment to this Transfer Agreement shall be in
writing.
5.2 The form and content of this Transfer Agreement shall be subject to and
construed in accordance with the laws of the Federal Republic of Germany in
every respect. Non-exclusive place of jurisdiction for all disputes arising out
of or in connection with this Transfer Agreement shall be Munich.
5.3 Should any provision of this Transfer Agreement be or become wholly or
partly invalid, then the remaining provisions shall remain valid. Invalid
provisions shall be construed in accordance with the intent of the parties and
the purpose of this Transfer Agreement.
5.4 This Transfer Agreement has been executed in the German language in
three (3) counterparts. One executed copy shall be provided to the Assigning
Lender, the Assignee and the Agent. Each executed copy shall have the effect of
an original.
6. Commitments and Advances Subject to Transfer
6.1 Assigning Lender's Commitment prior to transfer: EUR [ ]
Assigning Lender's participation in Advances
prior to transfer: EUR [ ]
Position transferred to Assignee: EUR [ ]
6.2 Date of payment by Assignee to Assigning Lender: [ ]
6.3 Account of Assigning Lender to which payment shall be effected: [ ]
-----------------------------------
[Assigning Lender]
-----------------------------------
[Assignee]
We hereby confirm the Borrower has consented to the above assignment and
transfer and we hereby agree on our own behalf as Lender and on behalf of the
other Lenders to the above Transfer Agreement.
[place], [date]
-----------------------------------
[Agent]
SCHEDULE 15
Development Costs
Development costs in the amount of EUR 26.5 million which, in the course of the
planning of the project until 31 July 2002, have been confirmed by the Technical
Adviser to be project development costs until Financial Close and which have
been incurred mainly in the following areas:
* project management
* conceptual pre-planning of the process technology
* obtaining of authorisations and approval (Genehmigungsplanung) (Beh
ordenengineering)
* availability/provision of wood and logistics
* financing and subsidies, EU notification, state guarantees
* ordering/commissioning and legal advice
* business management and local operating costs
* archeological excavations
SCHEDULE 16
Broker's Letter of Undertaking
[Letterhead of insurance broker]
LETTER OF UNDERTAKING
To: Bayerische Hypo-und Vereinsbank AG (the "Agent" and "Security Agent")
Dear Sirs,
[ ] (the "Project")
We have been requested by Zellstoff Stendal GmbH (the "Borrower"), to provide
you with certain confirmations relating to certain insurances arranged by us in
relation to the Project. Accordingly we provide you with the confirmations set
out below.
The insurances summarised in Appendix 1 attached to this letter (the
"Insurances") are, at the date hereof, in full force and effect in respect of
the risks and liabilities as set out in the insurance policies evidenced in the
policies/cover notes attached as Appendix 2 (the "Policies").
We further confirm in our capacity as insurance brokers to the Borrower that the
Insurances are, to the best of our knowledge and belief placed with insurers,
which as at the time of placement, are reputable and financially sound. We do
not, however, make any representations regarding such insurer's current or
future solvency or ability to pay claims.
We have arranged the Insurances on the basis of information and instructions
given by the Borrower. We have not made any particular or special enquiries
regarding the Insurances beyond those that we normally make in the ordinary
course of arranging insurances on behalf of our insurance broking clients. The
confirmations set out in this letter are given by reference to our state of
knowledge at the date hereof.
We shall use our best endeavours to notify the Borrower and the Security Agent
as soon as reasonably practicable after we become aware of an insurer ceasing to
carry a claims rating from Standard & Poors Rating Agency of at least BBB+ or a
comparable rating.
Pursuant to instructions received from the Borrower in connection with the
Insurances, we hereby undertake:
(a) to notify you as soon as reasonably practicable prior to the expiry of
the Insurances if we have not received instructions from the Borrower and/or any
insured parties or the agents of any such party to negotiate renewal, and, in
the event of our receiving instructions to renew, to advise you as soon as
reasonably practicable after receipt of the details thereof;
(b) to notify you as soon as reasonably practicable after giving or
receiving notice of termination of our appointment as brokers in relation to the
Insurances;
(c) to pay into the Revenue Account or such other account as you may inform
us in writing from time to time, without any set-off or deduction of any kind,
for any reason, all payments received by us from the insurers in relation to the
Insurances (including refunds of premium) other than as may be permitted in the
relevant loss payable clauses in the Endorsements;
(d) to advise you as soon as reasonably practicable after receiving notice
of any insurer's cancellation or suspension of any of the Insurances or
receiving notice of any insurer's intention to cancel or suspend any of the
Insurances;
(e) in accordance with our duties to our clients, make the Borrower aware of
its pre-contractual duties of disclosure to the insurers by advising the
Borrower of the type of information which generally needs to be disclosed to the
insurers;
(f) subject to the Borrower's consent, to hold the insurance slips or
contracts, the policies and any renewals thereof or any new or substitute
policies to the extent held by us, to the order of the Security Agent; and
(g) to treat as confidential all information in relation to the Insurances
marked as confidential and supplied to us by the Borrower or the Security Agent
and not to disclose such information, without the written consent of the
supplier, to any third party other than those persons who, in our reasonable
opinion, have a need to have access to such information from time to time. Our
obligations of confidentiality shall not conflict with our duties owed to the
Borrower and shall not apply to disclosure required by an order of a court of
competent jurisdiction, or pursuant to any applicable law or regulations having
the force of law or to information which is in the public domain.
The above undertakings are subject to our continuing appointment as insurance
brokers to the Borrower in relation to the Insurances and, following termination
of such appointment, our immediate release from all our obligations set out in
this letter (except for those mentioned in paragraph (g) above).
Nothing in this letter shall prejudice the right that any insurer may have to
cancel any of the Insurances following default in excess of 30 days in payment
of premiums, nor shall the exercise of such right in circumstances amount to a
breach of any obligations accepted by us pursuant to the terms of this letter.
In accordance with paragraph (d) above we will give you notice as soon as
reasonably practicable after receiving notice of any insurer's intention to
cancel any of the Insurances and where insurers wish to cancel for reasons of
non-payment of premium, we will request that insurers give you a reasonable
opportunity to pay amounts outstanding before such insurers issue a notice of
cancellation.
For the avoidance of doubt, all undertakings and other confirmations given in
this letter relate solely to the Insurances. They do not apply to any other
insurances and nothing in this letter should be taken as providing any
undertakings or confirmations in relation to any insurance that ought to have
been placed or may at some future date be placed by other brokers.
This letter is given by us on the instructions of the Borrower and with the
Borrower's full knowledge and consent as to its terms, as evidenced by the
Borrower's signature below.
This letter shall be governed by and shall be construed in accordance with
German law and any dispute as to its terms shall be submitted to the exclusive
jurisdiction of the courts of Germany.
Yours faithfully,
-------------------------------------------------------
For and on behalf of [insurance broker]
-------------------------------------------------------
For and on behalf of [Zellstoff Stendal GmbH]
SCHEDULE 17
ARCHEOLOGICAL
SITES
[Omitted]
[Map of Archeological Sites 1-4 excavated at Stendal Pulp Mill Site.
A Copy of this Schedule will be provided on request.]
SCHEDULE 18
INVESTMENT AND FINANCING PLAN
Finance Requirements EUR thousand EUR thousand
--------------------- ------------- -------------
Capitalized investment
financing
- real estate cost
and additional
real estate
cost/infrastructure 28,900
- project development,
planning and permit
costs until
financial close 22,000
- EPC contact (setup
costs) 716,000
- EPC contract
(incidental
expenses) 10,500
- Setup costs
and management,
ZSG portion
- Construction period 46,500
interest of tranche
A to start-up 20,342
Total 844,242
Operating assets 121,478
Debt service
reserves account
(initially
debt-financed) 42,000
Cost overrun and
debt service
reserves (financed
from internal funds) 30,000
TOTAL FINANCE REQUIREMENTS 1,037,720
Finance Requirements EUR thousand EUR thousand
--------------------- ------------- -------------
Internal funds
- equity 15,000
- subordinated
shareholder
loans 55,000
- reserves of
internal
funds/cost
overrun
financing 15,000
- internal
funds (debt
service
reserve
account) 15,000
Total internal funds 100,000
Start-up cashflow 26,016
109,161
Subsidies 165,515
- GA subsidy
- investment subsidy 465,000
Total subsidies 122,000 274,676
9,000
Borrowed funds 42,000
- guaranteed credit
long-term
(Tranche A)
- guaranteed credit
short-term
(Tranche B)
- guaranteed credit
(not guaranteed,
Tranche D 1)
- bank loan for
debt service
reserve account
(not guaranteed,
Tranche C)
Finance Requirements EUR thousand EUR thousand
--------------------- ------------- -------------
(- bank loan (30,000)
(cost overrun
reserve, not
guaranteed,
Tranche D2))
Total borrowed funds (excluding reserve) 638,000
Total Financing 1,038,692
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written:
The Borrower
Zellstoff Stendal GmbH
By:
----------------------------- ------------------------------
Name: Name:
Title: Title:
Address: ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
of Germany
The Arranger, Agent, Security Agent and Lender
Bayerische Hypo- und Vereinsbank AG
By:
----------------------------- -------------------------------
Name: Name:
Title: Title:
Address: Am ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
of Germany
