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EXHIBIT 10.28
PLEDGE AGREEMENT
Eastfield Beteiligungsgesellschaft m.b.H., ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇-▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ("Eastfield") and EuroGas Holdings, Inc., a Delaware corporation
("EuroGas") (together the "Pledgors")
and
Raiffeisen Zentralbank Osterreich Aktiengesellschaft, Am ▇▇▇▇▇▇▇▇▇ ▇, ▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the ("Pledgee")
hereby enter into the following Pledge Agreement (the "Agreement"):
ARTICLE I
GENERAL
1.1 Eastfield intends to hold 99% and EuroGas 1% of the shares in FLAGA
Beteiligungs Aktiengesellschaft, a stock corporation with its corporate
seat in Leobendorf, Austria, registered with the Commercial Register of
Korneuburg under the file number FN 59338 m (hereinafter referred to as
the "Company") pursuant to the Share Purchase Agreement set forth in
Section 1.4 yet to be executed.
1.2 Eastfield as well as FLAGA Beteiligungs Aktiengesellschaft, as
borrowers, have extended offers to conclude three loan agreements (the
"Facility Agreements") to Pledgee as creditor in the amounts of EURO
74,000,000 (seventy-four million EURO), EURO 16,000,000 (sixteen
million EURO) and EURO 15,000,000 (fifteen million EURO), respectively.
Such offers have not been accepted by Pledgee and the Facility
Agreements thus have not been concluded to date.
1.3 UGI Corporation has entered into guarantee agreements with Pledgee
within the meaning of Section 1357 of the Austrian Civil Code (the
"Guarantee Agreements").
1.4 This Pledge Agreement shall only enter into force in the event that the
Pledgee has disbursed the Loan amount duly drawn pursuant to Loan Offer
(A) made by Eastfield.
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ARTICLE II
PLEDGE OF CORPORATE SHARES AND ASSOCIATED RIGHTS
2.1 In order to secure the full and punctual fulfillment of the payment and
other obligations of the borrowers under the Facility Agreements, the
Pledgors hereby pledge to the Pledgee all of their shares in the
Company (hereinafter referred to as "Pledged Corporate Shares").
2.2 The Pledgors herewith pledge to the Pledgee in addition to the Pledged
Corporate Shares any and all profits that are due to them as
shareholders of the Company and which fall due after the occurrence of
the Event of Default (hereinafter referred to as "Pledged Rights to
Distributed Profits"), exercisable when an Event of Default as
specified in the Facility Agreements (hereinafter referred to as "Event
of Default") shall have occurred and be continuing.
2.3 In addition to the pledges under Sections 2.1 and 2.2 the Pledgors
herewith pledge to the Pledgee their rights and claims towards the
Company arising from a claim for payment of the liquidation quota,
repayment of share capital or claims arising from a sale or other
disposition with respect to the Pledged Corporate Shares or any part
thereof (e.g., a claim for payment of the purchase price); such rights
and claims shall be collectively referred to as "Pledged Rights of
Substitution".
2.4 To secure perfection of the pledge granted by the Pledgors, the latter
shall notify the Company of the pledge of the Pledged Corporate Shares,
of the Pledged Rights of Substitution and the Pledged Rights to
Distributed Profits without delay. The Pledgors shall also make and
maintain an entry into their books regarding such pledges in their
description of shareholders. In addition, upon request of the Pledgee,
the Pledgors shall take any other steps necessary or expedient to
secure the perfection of the pledge. In particular, the Pledgors shall
deliver the shares to the Pledgee immediately after the Closing, with
the Pledgors properly endorsing the shares with the endorsement clause
"verpfandet an Raiffeisen Zentralbank Osterreich Aktiengesellschaft".
The Pledgee shall hold and maintain the Pledged Corporate Shares in a
separate depositary ("Sonderverwahrung") established by the Pledgee in
the name of Eastfield at its main office in Vienna at a cost to the
Pledgor of ATS 100,000 per annum, payable in arrears so that the first
payment is due on September 21, 2000. EuroGas hereby agrees
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that its shares may be held in such depositary. The Pledgee shall
fulfill its obligations set forth in the Depositary Act ("Depotgesetz")
and shall in particular maintain such Pledged Corporate Shares in such
depositary separate from any other shares or other items. The Pledgee
shall not be entitled to pass on to a third party subject to the terms
of this Agreement the Pledge Corporate Shares or its depositary
obligations or allow anyone access to such depositary. In addition, the
Pledgee shall not have any rights with respect to the Pledged Corporate
Shares except as explicitly provided for herein. For the purposes of
clarification, the parties acknowledge and agree that the Pledgee shall
not be entitled to exercise any voting rights with respect to the
Pledged Corporate Shares. In the event the Pledgors require
confirmation that they own the Pledged Corporate Shares in order to
exercise voting or other rights, the Pledgee shall provide such
confirmation in a timely manner to the Pledgors upon request.
2.5 Until full payment under the Facility Agreements the Pledgors are
obligated to arrange that payments on account of (i) Pledged Rights of
Substitution or (ii) in case of an Event of Default on account of
Pledged Rights to Distributed Profits, are made directly to the Pledgee
and the Pledgee shall be entitled to keep such monies insofar as they
do not exceed the amounts under the Facility Agreements which are
currently outstanding and which may become outstanding in the future.
Any surplus remaining shall be released to the Pledgors without delay.
The Pledgee shall hold in trust the amounts so retained prior to their
release. With respect to any amounts received by the Pledgors under (i)
or (ii) above, the Pledgors shall hold such amounts in trust for, and
release such amounts to the Pledgee without delay.
2.6 Irrespective of the pledge of the Pledged Corporate Shares and subject
to the terms of this Agreement, the Pledgors shall not be restricted in
any way whatsoever in exercising the rights enjoyed by them as
shareholders of the Company and attaching to the Pledged Corporate
Shares.
ARTICLE III
ENFORCEMENT OF THE PLEDGE
3.1 The Pledgors herewith grant their express consent that in case of an
Event of Default under the Facility Agreements which has not been cured
pursuant to the provisions of curing Events of Default under such
Facility Agreements, the Pledgee shall be entitled to
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enforce the Pledged Corporate Shares without writ, judgment or any
other court action, in a public auction (hereinafter referred to as
"Public Auction") or in a private sale, be it with or without the
assistance of a court (hereinafter referred to as "Private Sale"),
applying the provision No. 14 (fourteen) of Article VIII of the 4th
(fourth) "EVHGB" (Ordinance on the Introduction of the German
Commercial Code in Austria) mutatis mutandis. Such an enforcement of
the pledge is conditional on the Pledgee having requested the Pledgors
in writing to settle the due portions of the amounts owing within 7
(seven) days as from service of the written request, and in such a
request the Pledgee shall advise the Pledgors that a Public Auction or
Private Sale will take place if these outstanding amounts are not
settled within the said period of time. The Public Auction or the
Private Sale may take place only after the aforementioned term has
elapsed without payment in full of the outstanding amounts.
Furthermore, any Private Sale or Public Auction shall only be made upon
prior assessment of the Pledged Corporate Shares pursuant to the
provisions set forth below. The request by Pledgee set forth in this
paragraph shall be in writing and shall be delivered by registered
mail, by express mail service or by personal delivery to the address of
Pledgors (to the attention of the managing directors) given in this
Agreement or at such other address as Pledgors may have notified to
Pledgee in writing. Each notice sent by registered mail or by express
mail service shall be deemed duly received by the Pledgors on the fifth
calendar day after the date of its dispatch by Pledgee, provided that
Pledgee has, on the day of such dispatch, either dispatched by
registered mail or by express mail service, or delivered by personal
delivery, a copy of the same notice to the law firm Bruckhaus ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ in Vienna, Austria, to the attention of ▇▇. ▇▇▇▇▇ ▇▇▇▇ or
▇▇. ▇▇▇▇ ▇▇▇▇▇.
3.2 If the contracting parties fail to reach an agreement on the value of
the Pledged Corporate Shares within 14 (fourteen) days after the
expiration of the period mentioned in Section 3.1 above, the said value
shall be determined by an independent Austrian certified public
accountant. If the Pledgors and the Pledgee fail to reach agreement on
who the independent Austrian certified public accountant is to be who
shall act as an expert ("Schiedsmann") within 30 (thirty) days after
the expiration of the aforementioned 14-day period, such independent
certified public accountant shall be appointed by the President of the
Vienna Bar Association upon the request of either contracting party.
The assessment of the Pledged Corporate Shares shall be made by such
certified public accountant in accordance with the Rules and Guidelines
No. 74 of the Special Committee for Business Management and
Organization of the Institute for Business Management, Tax Law and
Organization at the Chamber of Certified Public Accountants, Vienna
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("Fachgutachten Nr. 74 des Fachsenats fur Betriebswirtschaft und
Organisation des Institutes fur Betriebswirtschaft, Steuerrecht und
Organisation bei der ▇▇▇▇▇▇ der Wirtschaftstreuhander, Wien") as
amended from time to time, or failing such in accordance with any
appropriate substitute rules and guidelines.
3.3 As soon as the value of the Pledged Corporate Shares has been
determined, the Pledgee shall inform the Pledgors of the terms and
conditions, the place, the date and the time of the Public Auction or
the Private Sale and shall give its instructions therefor. Between
receipt of such letter of information and the date of the Public
Auction or the Private Sale there must elapse a period of at least 4
(four) weeks. Neither in a Public Auction nor in a Private Sale may the
Pledged Corporate Shares be transferred at a price which is more than
20% (twenty percent) below the value determined by the parties or the
expert. Each party to the Facility Agreements, including the Pledgee,
is entitled to purchase the Pledged Corporate Shares in a Public
Auction or in a Private Sale. The Private Sale shall be made with the
diligence customary for banks and by safeguarding the Pledgors's
interests to the greatest extent possible.
ARTICLE IV
GUARANTEE AGREEMENT
Notwithstanding any provision herein to the contrary, the Pledgee shall not be
entitled to enforce the pledge under this Agreement if and as long as UGI
Corporation is in compliance with the Guarantee Agreement. UGI Corporation is
deemed to duly comply with the provisions of the Guarantee Agreement, provided
that UGI Corporation duly fulfills all present and future payment or other
obligations under the Guarantee Agreement, and provided further that everything
guaranteed by UGI Corporation pursuant to clause 4 of the Guarantee Agreement is
and remains true and accurate.
ARTICLE V
REPRESENTATIONS AND WARRANTIES/COVENANTS
The Pledgors hereby represent, warrant and covenant to the Pledgee that the
following shall hold true after the Closing:
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5.1 Until completion of the merger contemplated by Section 9.1(h) of loan
offer A, the Pledgors are and shall remain the legal and beneficial
owner of all the shares, and, except for the security interest granted
to the Pledgee herein, the Pledgors have, and will at all times during
the term hereof have good and transferable title to all and every part
of the shares, free and clear of any security interests, lien, pledge,
encumbrance, option, claim or conditional sale contract, lease or other
title retention agreement.
5.2 During the term hereof and following the occurrence of an Event of
Default as specified in the Facility Agreements, the Pledgors shall
notify immediately the Pledgee upon becoming aware of any event which
may materially effect the rights of the Pledgee hereunder.
5.3 During the term hereof and following the occurrence of an Event of
Default which has not been cured as specified in the Facility
Agreements and immediately upon written request from the Pledgee, the
Pledgors shall give to Pledgee all necessary declarations,
authorizations and other documents or take all other actions in order
to enable Pledgee, either in its own name or for and on behalf of the
Pledgee, to promptly execute any of the security interests contained
herein.
ARTICLE VI
CONTINUING AND INDEPENDENT SECURITY
6.1 This security shall be in addition to and shall be independent of every
other security which the Pledgee at any time holds in respect of any or
all of the obligations under the Facility Agreements.
6.2 This security shall constitute and be a continuing security,
notwithstanding any settlement of accounts and, in particular but
without limitation, shall not be considered satisfied by any
intermediate payment or satisfaction of any of the obligations under
the Facility Agreements in part, and shall continue in full force and
effect until such time as all of the principal and interest under the
Facility Agreements and all other amounts payable by the Pledgee under
the Facility Agreements have been paid in full, whereupon this
agreement shall be terminated in accordance with Article 7.
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ARTICLE VII
TERMINATION
This agreement shall continue in full force and effect until any or all of the
Facility Agreements terminates and the Pledgee has duly received all amounts
payable to it under the Facility Agreements, at which time this agreement shall
terminate and cease to be of any effect.
ARTICLE VIII
FINAL PROVISIONS
8.1 Any and all notices in connection with this Agreement shall be made by
registered letter and in accordance with the provisions of the Facility
Agreements, except as otherwise set forth herein.
8.2 If any provision hereof is or becomes invalid or unenforceable, the
validity or enforceability of the other provisions of this Agreement
shall not be affected thereby. The invalid or unenforceable provision
shall be replaced by a valid and enforceable provision which comes as
close as possible to the original purpose of this Agreement.
8.3 In addition to the terms of this Agreement the General Business
Conditions of the Austrian Credit Institutions ("GBC") shall apply
subject to the last sentence of this clause 8.3. The Pledgors hereby
confirm that they has taken notice of the GBC and agree thereto, except
that Points 23, 24, 25, 26, 27 and 36 of the GBC shall not apply if and
as long as UGI Corporation duly complies with the terms of the
Guarantee Agreements.
8.4 The Pledgors shall bear and pay to the Pledgee all reasonable out of
pocket costs and expenses of whatever nature incurred by the Pledgee
after the conclusion of this Agreement in connection with the
implementation of this Agreement including, without limitation, costs
and expenses arising in connection with the preservation or enforcement
of the Bank's rights under this Agreement (e.g., duties arising under
the Austrian Duties Act).
8.5 Any notice or communication under or in connection with this Agreement
shall be in writing and shall be delivered by mail, fax or courier to
the addresses given in this
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Agreement or at such other address as the recipient may have notified
to the other party in writing.
8.6 This Pledge Agreement shall be governed by Austrian law. Irrespective
of the place of jurisdiction agreed upon in the Facility Agreements,
the Pledgee shall be entitled, at its sole discretion, to assert claims
arising out of this Agreement also before any Austrian court having
subject-matter jurisdiction at the seat of the Company.
This Agreement has been executed, concluded and delivered on September 21, 1999
in Bratislava, Slovakia.
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Raiffeisen Zentralbank Eastfield International Holdings, Inc.
Osterreich Aktiengesellschaft
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EuroGas Holdings, Inc.
The Company hereby acknowledges that it has knowledge of the content of this
Agreement and the pledges stipulated herein.
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Eastfield Beteiligungsgesellschaft m.b.H.
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