Exhibit 10.20
Security Pool Agreement
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Between the following credit institutions of the one part:
1. Berliner Bank Aktiengesellschaft, Berlin
-Hereinafter also referred to as the "pool principal"
2. Deutsche Genossenschaftsbank Bayam, Nuremberg branch
3. National Bank Detroit, Frankfurt branch
4. The First National Bank of Chicago, Chicago
5. Sparkasse Miltenberg-Obernburg, Miltenberg
-hereinafter referred to jointly as "the Banks" and referred to
individually as "the Bank",
and
Xxxxxxxx Hohe GmbH & Co KG, Collenberg (at present still called Hohe
GmbH & Co KG) of the other part
-hereinafter referred to as "the Firm"
the following agreement has been reached:
Clause 1 Loans and credit facilities
The following banks have made/shall make the following loans and credit lines
available to the firm:
Berliner Bank AG: Loan for DM 5,000,000.00
Working credit for DM 15,000,000.00
Bridging loan for DM 5,000,000.00
Deutsche Genossenschaftsbank: Loan for DM 5,000,000.00
Working credit for DM 15,000,000.00
Bridging loan for DM 5,000,000.00
National Bank Detroit: Working credit for DM 15,000,000.00
The First National Bank of Chicago: Working credit for DM 10,000,000.00
Sparkasse Miltenberg: Working credit for DM 5,000,000.00
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Total DM 80,000,000.00
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Money-market transactions, Euro-financing business, xxxx purchases or foreign
exchange transactions, for example, can also be performed and bank guarantees
can be accepted in appropriation to the respective business loans.
The two bridging loans of Berliner Bank AG and Deutsche Genossenschaftsbank are
limited to 31/st/ December, 1995 at the latest, and will be paid back when an
additional bank is admitted into this securities pooling agreement.
The business loans granted by the NBD Bank, Frankfurt/Main branch and The First
National Bank of Chicago shall be administered as a unit by the NBD Bank until
revocation by one of the two banks; credit shall be granted individually and
independent of the respective other bank up to the level of participation of the
respective bank. The First National Bank of Chicago hereby revocably authorizes
the NBD to represent it in all respects in connection with this pooling
agreement, to safeguard its rights in connection with this securities pooling
agreement vis-a-vis the other contractual parties to the said agreement, and to
issue such statements on behalf of the First National Bank of Chicago as the NBD
Bank deems necessary or desirable in connection with the loans granted and with
respect to this securities pooling agreement.
Clause 2 Securities
1. The Firm has provided/shall provide the following securities to the pool
principal:
a) Registered land charge for DM 5,000,000.00, jointly registered as
follows: in the Land Register of Fechenbach, leaf 1508, leaf 1810 and
leaf 2152; in the Land Register of Dorfprozelten, leaf 3738; in the
Land Register of Stadtprozelten, leaf 1733; and in the Land Register
of Tappenbeck, leaf 299.
b) Registered land charge for DM 32,500,000.00, jointly registered as
follows: in the Land Register of Fechanbach, leaf 1808, leaf 1810,
leaf 1817 and leaf 2152; in the Land Register of Dorprozelten, leaf
3738; and in the Land Register of Stadtprozelten, leaf 1733.
c) Owner's certified land charge for DM 5,000,000.00, jointly registered
as follows: in the Land Register of Fechenbach, leaf 1608, leaf 1810,
leaf 1817 and leaf 2152; in the Land Register of Dorfprozelten, leaf
3738; and in the Land Register of Stadtprozelten, leaf 1733, assigned
to the pool principal.
d) Owner's certified land charge for DM 7,500,000.00, jointly registered
as follows: Land Register of Fechenbach, leaf 1608, leaf 1810, leaf
1817 and leaf 2152; in the Land Register of Dorfprozelten, leaf 3738;
and in the Land Register of Stadtprozelten, leaf 1733, assigned to the
pool principal.
e) Registered land charge for DM 7,000,000.00, jointly registered as
follows: in the Land Register of Fechenbach, leaf 1608 and leaf 1817.
This registered land charge is currently still entered in the Land
Register in the name of Bankhaus Xxxx Xxxxxxx, and shall be assigned
to the pool principal.
f) Registered land charge for DM 4,000,000.00, jointly registered as
follows: in the Land Register of Fechenbach, leaf 1608 and leaf 1817.
This registered land charge is currently still entered in the Land
Register in the name of Deutsche Genossenschaftsbank, and shall be
assigned to the pool principal.
g) Registered land charges (in some cases for joint and several
liability) for a total of DM 14,450,000.00, which is currently still
entered in the Land Register in the name of Industriekreditbank AG,
Deutsche Industriebank in Dusseldorf and Berlin (IKB) and is to be
assigned to the pool principal, if and as soon as the IKB is obliged
to release these land charges. These registered charges are place on
different items of real estate in Fachenbach, Dorprozelten and
Tappenbeck.
h) Chattels mortgage on machines and fittings according to a new chattels
mortgage agreement to be concluded.
2. For the safeguarding purpose outlined in S3, the Company hereby grants the
individual banks a right of lien existing among one another - equal in
status to the individual rights of lien existing among one another - to the
credit balance that is held with one of the banks either now or in the
future. The rights of lien only apply to credit balances that stem from
business relations in connection with this pooling agreement. Rights of lien
that are based on the General Terms and Conditions of Business of the banks
have priority over the rights of lien named herein.
The situation shall not be affected by any consideration of whether or not
the Banks have acquired the de facto or de jure power of disposal for the
said credit balances.
Notification of the placement of these rights under lien is made to the
Banks herewith.
Up until the time of any revocation on recourse on security by any one of
the Banks, each bank shall be entitled to authorize operations on the credit
balances at its establishment which are under lien to the other Banks, in
the course of normal proper business operations. A General Business
Conditions lien held by any of the Banks may be invoked prior to the lien of
any other bank only for its own credit lines according to this security pool
agreement; the same shall apply to the offsetting of any claims receivable
it has in its own capacity against credit balances of the Firm.
Realization of the liens established under this agreement shall be by
agreement with the banks; it shall be done in accordance with the provisions
of this pool agreement.
3. All other securities previously provided to the Banks participating in this
security pool agreement are hereby cancelled and transferred back to the
firm herewith. To the extent that any further procedures are required for
this purpose, the Banks undertake to perform these.
Clause 3 Purpose of security
The purpose of the securities listed under clause 2 is
as first priority
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and with equal priority for each, to provide Berliner Bank AG and Deutsche
Genossenschaftsbank with security for their Loans listed under clause 1 for DM
5,000,000.00 in each case, and
thereafter in terms of priority
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and with equal priority with respect to each other, to provide the Banks listed
under clause 1 with security for their credit facilities as indicated in clause
1.
In the event of Euroloans having been granted by third-party credit institutions
against the credit lines listed under clause 1 through the agency of the Banks,
the securities listed in clause 2 shall also function as security for all
present and future claims arising from the granting of these credit facilities.
and last ranking
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and of equal rank with respect to one another for the purpose of safeguarding
the claims of the banks arising from overdrawing of the loans/credits in
accordance with S1.
Clause 4 Security trustee
1. The pool principal shall administer the securities incorporated in the pool
agreement with proper business care, also acting as a trustee for each of
the other Banks. The pool principal shall be entitled to this end to
exercise all supervisory, administration and drawing rights arising from the
agreement in its own name. The complete or partial release of securities
shall required the consent of each of the other Banks.
2. Each bank may at any time request information from the pool principal on the
administration of the securities. Independently from that entitlement, the
pool principal shall also keep the Banks informed in this regard in
accordance with its conscientious judgment.
3. The pool principal shall be entitled, after prior notification of the other
Banks, to transfer the administration of the securities to another trustee
deemed by it to be suitable for this purpose.
4. In each case, the trustee shall be exempt from the restrictions pursuant to
s. 181 of the German Civil Code.
S 5 Utilization, Power of Utilization and Distribution of Profits
1. The utilization of the securities referred to in S2 shall be carried out by
the pool manager in its own name, yet for the account of the banks.
2. If the Company is in default with due payments on secured claims despite the
granting of an appropriate period of grace (safeguarding case), the banks
shall decide on the question as to whether and when utilization measures are
to be instituted or put through. Decisions must be taken by a majority of
50.1% based on the shares of the loans and credits referred to in S1. The
banks may only institute other enforcement measures against the Company once
a majority resolution has been passed in accordance with the previous
sentence.
The utilization measures shall be announced by the pool manager of the
Company and the prerequisites for the utilization are to be observed in
accordance with the individual agreements concerning safeguarding.
3. The proceeds from the utilization of the pool securities are to be used in
the following order of priority:
a) to settle costs, pay any taxes due or meet any other costs arising
from the utilization of the securities;
b) to redeem the claims of the banks arising from the granting of
loans/credits, in respect of which the safeguarding took place, that
is
. having higher priority to, and with respect to one another equal
priority, the redemption of the loan referred to in S1 of currently
DM 5,000,000.00 in each case, which was made available by the
Berliner Bank AG and the Deutsche Genossenschaftsbank, however at
most, up to the amount of the loan availed of in each case
. of equal rank in the rank below that in relation to the other
credits availed of during the period in which the decision
concerning utilization was taken, whereby the calculation of the
distribution key is only to be based on those claims that do not
exceed the credit lines referred to in S1.
If a distribution of profits takes place, each of the banks is entitled,
and on request of the other banks acting irrevocably on behalf of the
Company, obliged to bring their credit claims, which do not exceed the
credit lines in accordance with S1, to such a level that credit is
available to the banks in proportion to the said credit lines; this credit
claims level is to be achieved by means of appropriate transfers.
If for legal reasons it is not possible validly to implement and equalization of
balances vis-a-vis the Firm, the Banks, acting by arrangement between
themselves, shall be required to implement an equivalent equalization of
balances. The respective Banks shall first offset their credit claims
receivable on the basis of movements in the credit line as specified in clause 1
against the balances of any accounts not bound to a specific purpose. If any
such offsetting procedures are implemented after the equalization of balances,
further balance equalization procedures must take place.
If the Banks have arranged Euroloans as per clause 3 against the credit lines as
per clause 1 of this agreement, and where the said Euroloans are to be redeemed
by the Bank in question which has arranged the transaction to the third-party
credit institution, the equalization payment shall be imputed to the cash
balance of the credit institution arranging the transaction, provided that this
does not lead to the credit line as per clause 1 of this agreement being
exceeded:
c) to meeting the claims of Banks whose credit lines have been exceeded,
with equal priority and in proportion to the amounts by which the
credit is exceeded in each case;
d) to meeting the claims of the Banks from other credit facilities
granted, with equal priority and in proportion to the amounts of
additional credit facilities taken up, unless these derive from the
proceeds of the realization of securities provided separately for
them;
e) any further proceeds not required for any of the above shall be paid
to the Firm.
4. Guaranteed credits only then count as having been availed of when recourse
has been made to the bank/banks.
5. The amounts taken up shall be imputed to any subsequently arising increases
in balances resulting from reversed debt items and/or returned cheques. This
shall not apply if this would result on the loans/credit facilities listed
in clause 1 being exceeded.
6. If the amount of claims to be considered has not yet been established at the
time of the distribution of proceeds, these shall initially not be taken
into account in the determination of the shares in which the realization
proceeds are to be distributed. Only when the amounts in question have been
definitively established shall a final calculation of the distribution
shares be made. Any resulting changes in the proceeds payable to each of the
Banks shall be adjusted between the Banks, even if payments have already
been made.
7. The Banks shall be entitled to change the above-mentioned distribution
formula at any time by mutual agreement.
S6 Costs
1. All costs incurred by the pool manager in connection with this securities
pooling agreement, and especially in respect of the administration of the
securities, shall only be borne by the firm during the first year of the
term of this agreement. Said costs shall be borne in the form of a flat-rate
payment of DM 50,000.00
2. The Berliner Bank shall only take over the management of the pool following
the first year of the term of the agreement, subject to the proviso that the
said flat-rate costs of DM 50,000.00 shall continue to be paid to it. The
bank is in no way obliged to continue to manage the pool.
3. The costs of any measures that are taken to utilize the securities shall be
borne by the Company.
S7 Obligation to disclose
Each bank is entitled and, at the request of the other banks, obliged to provide
the other banks with information concerning its claims against the Company and
the securities, insofar as this affects this agreement and its completion. Each
bank shall inform the other banks of disturbances in the credit relationship
(e.g. default, etc.) without delay. Each bank is entitled to inspect the
accounts and receive information relating to same on request.
The Company expressly releases the banks from their obligation to observe
banking secrecy vis-a-vis one another. The Company shall put together a report
on loans/credits availed of in accordance with S1 on a twice monthly basis to
the end of the month and shall pass this on to the banks.
S8 Change to the loans/credits and securities, allocation of securities to
third parties
1. The banks shall maintain the loans/credit lines and shall only make
increases, reductions or cancellations with the mutual agreement of the
parties. This shall not apply, however to loans and credits granted outside
the pool.
2. The right of a bank to terminate loans/credits with just cause and the right
of the NBD Bank and The First National Bank of Chicago to terminate credits
granted in the case of an "event of default", or for any other reason, shall
remain thereby unaffected. This shall also apply to the reclaiming of
credits in accordance with the agreement between the NBD Bank, The First
National Bank of Chicago and the Company. In the case of such termination by
one of the banks, the other banks are to be informed thereof in advance,
unless this is not possible due to the particular urgency of the
termination. The pooling agreement shall remain unaffected by the
termination of a credit line or loan.
3. If a bank receives further securities in the future for one of the loans or
credits listed in S1, the parties are already agreed that said securities
shall be incorporated into the pool agreement.
4. The Company undertakes not to furnish third parties with securities until it
has received the unanimous consent of the banks.
5. The Company is entitled to ascribe or terminate the loan/credits in
accordance with S1, either in full or in part, and is empowered to admit an
other bank/other banks into the pool agreement. The admission can only be
refused by the banks with just cause.
S9 Term and termination
1a. Each bank is entitled to terminate the agreement observing a period of
notice of three months to the end of the quarter. The earliest date for
termination, however is 31/st/ December, 2005. The notice of termination is
to be served to the pool manager. The date on which the pool manager
receives the letter providing notice of termination shall be decisive for
deciding whether or not the deadline was adhered to. If this agreement is
terminated by the pool manager, notice of termination must be served to all
the other banks.
b. A balance equalization in accordance with S5, No. 3.b is to be carried out
upon withdrawal of the bank terminating the agreement, even if only one of
the banks is in favor of the same.
In the case of termination, the terminating bank withdraws from the pool
agreement without any claim to a transfer of securities from the pool. This
pool agreement between the remaining banks remains unchanged.
2. Notwithstanding the above, this pool agreement can be annulled for all
contractual parties if a majority of at least 50.1% with respect to the
shares of the loans/credits referred to in S1 are in favor of this. The
remaining contractual parties are to be informed of this decision without
delay.
3. If the Company pays back its loans/credits referred to in S1 to one or
several banks, the bank/banks shall be entitled and, at the request of the
Company, obliged to terminate this pool agreement without notice. In this
case, all of the other banks shall be obliged to transfer part of the
securities to the Company. Said part of the securities shall correspond to
the share of the loans/credits in accordance with S1 belonging to the
withdrawing bank.
S10 Release and appraisal of securities
Once all claims secured by this pool agreement have been satisfied (including
the discharge of any obligations in connection with bank guarantees), the banks
shall be obliged to return the securities made available to them to the
respective guarantor. In addition, they shall be obliged to surrender any
surplus proceeds from their utilization. This shall not apply if the party
providing the securities is also the borrower, and the bank in question is
obliged to transfer the security to a third party (a guarantor that has repaid
the bank, for example).
The Banks shall be obliged, even before full satisfaction of their claims
secured by the pool securities, on request, to release the pool securities
provided to them and any other securities provided to them, at their discretion,
to the party providing the said securities, in full or in part, provided that
the realizable value or all securities does not exceed, except for a short time
only, 120% of the claims of the Banks secured by this pool.
The realizable value of the securities shall be as shown in the relevant
security agreement.
The stipulations formulated in the respective security agreements on cover
limits and release obligations shall be supplemented/replaced for the term of
this pool agreements by the conditions agreed upon hereinabove.
Clause 11 Guarantee
The pool principal and the Bank acting as Trustee do not make any guarantee that
the securities in existence at any time are sufficient to secure the claims of
the Banks, and are not liable for any deficiencies arising from any breaches of
the obligations assumed by the Firm and/or a security provider pursuant to the
security agreements.
The parties are agreed that the pool manager and the bank acting as trustee
shall not be liable for the legal validity of the safeguarding agreements or
their potential to be enforced. Neither shall they be liable for the validity,
preservation, intrinsic value and soundness of the securities, nor for ensuring
that said securities are free from third-party rights, nor for all circumstances
that could detract from the intrinsic value, soundness and utilization of said
securities. Within the framework of the management and examination of the
securities, the liability of the pool manager is to be limited to the due care
to be expected of it when managing its own affairs.
The pool manager and the bank acting as trustee shall therefore submit copies of
the safeguarding agreements referred to in S2 to the other banks, if requested
to do so by them, for the purpose of examination by them at their own liability.
Clause 12 General Business Conditions
For this agreement, the dealings of the Banks with each other and with the Firm
shall be subject to the General Business Conditions of the pool principal, which
are available for inspection at the offices of that Bank and can be sent out on
request.
Clause 13 Saving clause
If any provision of this agreement proves not to be legally valid or is found to
be unenforceable, the validity of the remaining content shall not be affected.
The contracting parties shall replace the invalid or unenforceable provision by
a condition matching the commercial intent and approaching as closely as
possible the content of the provision replaced.
Clause 14 Venue
The venue shall be Munich. For this pool agreement German law will be valid.
Clause 15 Legal validity
This agreement becomes effective on being signed by the pool members and the
Firm.
Munich, 9, Aug. 1995
BERLINER BANK
Aktiengesellschaft
Munich Branch
Frankfurt, 7, Sept. 1995
National Bank Detroit
Frankfurt Branch
Miltenberg, 30, Aug. 1995
Sparkasse Miltenberg-Obernburg
Nuremberg, 25, Aug. 1995
Deutsche Genossenschaftsbank
Nuremberg Branch
Chicago, 8, Sept. 1995
The First National Bank of Chicago, Chicago
Collenberg, 15, Sept. 1995
Xxxxxxxx Xxxx XxxX & Xx. XX
(xxxxxxxxx xxxxx xxxxxx Xxxx XxxX & Xx. XX)
