MERCER INTERNATIONAL INC - 8-K - 20050329 - EXHIBIT_99
EXHIBIT 99.1
EXHIBIT 99.1
Final Version
English Translation
Binding Version must be in German
Between
ZELLSTOFF STENDAL GMBH
as Borrower
MERCER INTERNATIONAL, INC.
RWE INDUSTRIE-LÖSUNGEN GMBH
ALTMARK INDUSTRIEPARK AG
MFC INDUSTRIAL HOLDINGS AG
as Sponsors
STENDAL PULP HOLDING GMBH
as Shareholder
and
BAYERISCHE HYPO- UND VEREINSBANK AG
as Arranger, Agent, Security Agent and Original Lender
NORDDEUTSCHE LANDESBANK GIROZENTRALE
LRP LANDESBANK RHEINLAND-PFALZ
GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK
NATIONAL BANK OF GREECE S.A., LONDON BRANCH
HSH NORDBANK AG
BANCA MONTE DEI PASCHI DI SIENA, FRANKFURT AM MAIN BRANCH
INVESTKREDIT BANK AG
as Lenders
AMENDMENT AND RESTATEMENT AGREEMENT NO. 1
relating to a EUR 827,950,000 Project Facility Agreement dated
26 August 2002
and
a Shareholders’ Undertaking Agreement dated 26 August 2002
CLIFFORD CHANCE
PARTNERSCHAFTSGESELLSCHAFT VON RECHTSANWÄLTEN,
WIRTSCHAFTSPRÜFERN, STEUERBERATERN UND SOLICITORS
SITZ: FRANKFURT AM MAIN • AG FRANKFURT AM MAIN PR 1000
CONTENTS
1.
Definitions and Interpretation
2
2.
Amendment and Restatement of the Facility Agreement and the
Shareholders’ Undertaking Agreement
3
3.
Conditions Precedent
4
4.
Representations and Warranties
5
5.
Waiver Provisions
5
6.
Security Agreements
5
7.
Costs and Expenses
5
8.
Notices
5
9.
Miscellaneous
10
10.
Acknowledgement
11
SCHEDULE 1 Conditions Precedent
12
SCHEDULE 2 Amended Facility Agreement
13
SCHEDULE 2 Amended Facility Agreement
13
SCHEDULE 3 Amendments to the Shareholders’ Undertaking Agreement
14
1
THIS AMENDMENT AGREEMENT
(the “
Agreement
”) is made on 23 March 2005
BETWEEN
(1)
MERCER INTERNATIONAL, INC.
(
“Mercer
International”
),
RWE INDUSTRIE-LÖSUNGEN GmbH
(“
RWE-IN
”),
MFC INDUSTRIAL HOLDINGS AG
(“
MFC IH
”)
(formerly FAHR Beteiligungen AG),
ALTMARK INDUSTRIEPARK
AG
(“
Altmark Industriepark AG
”) (formerly AIG Altmark Industrie AG) and
STENDAL PULP HOLDING
GmbH
(“
SP Holding
”) as Sponsors and/or Shareholders;
(2)
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 Goldbecker
Strasse 1, 39596 Arneburg, Federal Republic of Germany and registered in the commercial
register (
Amtsgericht
) of Stendal, number HRB 2446 (the “
Borrower
”);
(3)
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 Tucherpark
16, 80538 München, Federal Republic of Germany and registered in the commercial register
(
Amtsgericht
) of Munich, number HRB 42148 (the “
Arranger
”, “
Agent
”, “
Security Agent
”);
(4)
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 Tucherpark
16, 80538 München, Federal Republic of Germany and registered in the commercial register
(
Amtsgericht
) of Munich, number HRB 42148 (the “
Original Lender
”);
(5)
NORDDEUTSCHE LANDESBANK GIROZENTRALE
, Friedrichswall 10, 30159 Hannover, Federal Republic of
Germany (a “
Lender
”);
(6)
LRP LANDESBANK RHEINLAND-PFALZ
, Grosse Bleiche 54-56, 55098 Mainz, Federal Republic of
Germany (a “
Lender
”);
(7)
GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
, 1
st
Floor, New Uberior House,
Edinburgh EH3 9BN, Scotland, (a “
Lender
”);
(8)
DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN
, Platz der Republik, 60265
Frankfurt am Main, Federal Republic of Germany (a “
Lender
”);
(9)
NATIONAL BANK OF GREECE S.A., LONDON BRANCH
, 11 Charles Street, London W1 J5DW, England (a “
Lender
”);
2
(10)
HSH NORDBANK AG
, Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Federal Republic of Germany (a “
Lender
”);
(11)
BANCA MONTE DEI PASCHI DI SIENA, FRANKFURT AM MAIN BRANCH
, Neue Mainzer Straße 26, 60311
Frankfurt am Main, Federal Republic of Germany (a “
Lender
”); and
(12)
INVESTKREDIT BANK AG
, Renngasse 10, 1013 Vienna, Republic of Austria (a “
Lender
”).
(together referred to as the “
Parties
”).
(The parties under 4 to 12 above are referred to herein together as the “
Lenders
” and each
a “
Lender
”)
WHEREAS
(A)
The Borrower, the Agent, the Security Agent, the Arranger and the Original Lender have
entered into a project financing facility agreement, dated 26 August 2002, in the aggregate
amount of EUR 827,950,000 (the “
Facility Agreement
”) in order to provide financing to build
and operate an 552,000 tones per annum bleached softwood kraft pulp mill located in Arneburg,
Sachsen-Anhalt, Federal Republic of Germany.
(B)
The Original Lender has, pursuant to Clause 31.2 (
Assignments and Transfers by the Lenders
)
of the Facility Agreement, transferred certain of its rights, benefits and obligations under
the Facility Agreement to the Lenders.
(C)
The Original Lender, the Sponsors (as defined in the Facility Agreement), the Shareholders
(as defined in the Facility Agreement) and the Borrower have entered into a shareholders’
undertaking agreement, dated 26 August 2002 (the “
Shareholders’ Undertaking Agreement
”).
(D)
The Parties hereto wish to agree on certain changes to the Facility Agreement and the
Shareholders’ Undertaking Agreement, which shall be implemented by this Agreement.
IT IS AGREED
as follows:
1.
DEFINITIONS AND INTERPRETATION
1.1
Definitions
In this Agreement:
3
“
Amended Facility Agreement
” means the Facility Agreement, as amended by this Agreement,
the terms of which are set out in Schedule 2 (
Amended Facility Agreement
).
“
Amended Shareholders’ Undertaking Agreement
” means the Shareholders’ Undertaking Agreement
as amended by this Agreement.
“
Amendment Date
” means the date on which the Agent confirms to the Borrower and the Lenders
in writing that it has received each of the documents listed in Schedule 1 (
Conditions
Precedent
) in form and substance satisfactory to the Agent.
1.2
Incorporation of Defined Terms, Interpretation
Terms defined in the Facility Agreement shall, unless otherwise defined herein, have the
same meaning herein and the principles of construction set out in the Facility Agreement
shall have effect as if set out in this Agreement.
1.3
Clauses and Schedules
1.3.1
In this Agreement any reference to a “Clause” or “Schedule” is, unless the
context otherwise requires, a reference to a Clause or Schedule of this Agreement.
1.3.2
Clauses and Schedules headings are for ease of reference only.
1.4
Singular and Plural
Words incorporating the singular number include the plural and vice versa.
2.
AMENDMENT AND RESTATEMENT OF THE FACILITY AGREEMENT AND AMENDMENTS TO THE SHAREHOLDERS’
UNDERTAKING AGREEMENT
2.1
Amendment and Restatement of the Facility Agreement
The Facility Agreement shall be amended with effect from the Amendment Date in the form as
set out in Schedule 2 (
Amended Facility Agreement
) so that the rights and obligations of
the parties to the Facility Agreement shall, on and from the Amendment Date, be governed
and construed in accordance with the provisions of the Amended Facility Agreement. Prior to
the Amendment Date, the Facility Agreement in its present form shall govern the rights and
obligations of the parties to the Facility Agreement.
4
2.2
Amendments to the Shareholders’ Undertaking Agreement
The Shareholders’ Undertaking Agreement shall be amended with effect from the Amendment
Date as set out in Schedule 3 (
Amendments to the Shareholders’ Undertaking Agreement
) so
that the rights and obligations of the parties to the Shareholders’ Undertaking Agreement
shall, on and from the Amendment Date, be governed and construed in accordance with the
provisions of the Amended Shareholders’ Undertaking Agreement as so amended. Prior to the
Amendment Date, the Shareholders’ Undertaking Agreement in its present form shall govern
the rights and obligations of the parties to the Shareholders’ Undertaking Agreement.
2.3
Non occurrence of Amendment Date
If the Amendment Date does not occur by 15 April 2005, then this Agreement shall cease to
have effect and shall cease to bind the Parties in respect of any obligations to be
performed under this Agreement on or after such date, but all obligations and liabilities
of the Parties prior to such date, or in respect of acts which are done, or events which
occur, prior to such date, shall remain in full force and effect.
2.4
Continuing Obligations
The provisions of the Amendment Facility Agreement and the Amended Shareholders’
Undertaking Agreement shall, save as amended hereby, continue in full force and effect.
2.5
Further Assurance
The Borrowers, the Sponsors and the Shareholders shall, at the request of the Agent and at
their own expense, do all such acts and things necessary or desirable to give effect to the
amendments effected or to be effected pursuant to this Agreement.
2.6
Financing Document
This Agreement shall be a Financing Document.
3.
CONDITIONS PRECEDENT
The Agent shall notify the Borrower, the Sponsors, the Shareholders and the Lenders of the
occurrence of the Amendment Date. If any of the conditions set out in Schedule 1
(
Conditions Precedent
) are waived or deferred by the Agent the Agent may attach to such
waiver or deferral such requirements and further or other conditions as it may think fit
and the Borrower shall fulfill or procure fulfillment of all such requirements and further
or other conditions as may be
5
notified to the Borrower, the Sponsors and the Shareholders in writing in accordance with
the terms of such notification as if such requirement or further or other condition was a
term of the Amended Facility Agreement or the Amended Shareholders’ Undertaking Agreement.
4.
REPRESENTATIONS AND WARRANTIES
The Borrower herewith represents and warrants to the Lenders that, as of the date of
signing of this Agreement, the statements in Clause 16 of the Facility Agreement are true
and correct. The Borrower makes the representations and warranties as if each reference in
those representations and warranties to “this Agreement” includes a reference to the
Amended Facility Agreement.
5.
WAIVER PROVISIONS
Neither the entry into this Agreement, nor the non-satisfaction of any condition precedent
under Clause 3 (
Conditions Precedent
), nor anything else in this Agreement shall operate as
a waiver of any outstanding Event of Default, unless otherwise provided expressly herein.
6.
SECURITY AGREEMENTS
The Security Agreements shall continue in full force and effect in connection with the
Facility Agreement as amended by this Agreement. The Parties acknowledge that all present
and future, actual and contingent obligations and liabilities in their respective valid,
amended, supplemented, or newly arranged forms of the Borrower, the Sponsors and the
Shareholders to the Lenders, Agent and the Security Agent under each of the Financing
Documents are to be regarded as secured obligations (as defined in each of the Security
Agreements) under the Security Agreements.
7.
COSTS AND EXPENSES
The Borrower shall promptly reimburse each Lender, the Agent and the Security Agent for the
amount of all costs and expenses (including legal fees) incurred in connection with the
negotiation, preparation, printing and execution of this Agreement and any other document
referred to in this Agreement. The Borrower, the Sponsors and the Shareholders shall also
bear their own costs.
8.
NOTICES
8.1
Communications in Writing
Each communication to be made by the Parties under this Agreement shall 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.
8.2
Addresses
6
Any communication, information or document to be made or delivered by the Parties pursuant
to this Agreement 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 Stendal GmbH
Goldbecker Strasse 1
39596 Arneburg
Federal Republic of Germany
Non-Applicability of Section 181 German Civil Code (
Bürgerliches Gesetzbuch
)
The Agent and the Security Agent shall, for the purpose of this Agreement, be exempted from
the restrictions of Section 181 German Civil Code (
Bürgerliches Gesetzbuch
).
9.2
Remedies and Waivers
No failure to exercise, nor any delay in exercising, on the part of any Lender, Agent,
Arranger or Security Agent, any right or remedy under this Agreement 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.
9.3
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
11
or unenforceability of the respective provision. The same shall apply
mutatis mutandis
to
fill possible gaps (
Vertragslücken
) in this Agreement.
9.4
Amendments
Changes to this Agreement, including this Clause 9.4 (
Amendments
) shall be made in writing.
9.5
Governing Law
This Agreement shall be governed by, and construed in accordance with, the laws of the
Federal Republic of Germany.
9.6
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, the Sponsors and
Shareholders are located. Mandatory places of jurisdiction remain unaffected.
9.7
Counterparts
This Agreement may be executed in any number of counterparts all of which taken together
constitute one and the same instrument.
10.
ACKNOWLEDGEMENT
The Parties acknowledge and confirm that
(a)
they have received a copy of the Amended Facility Agreement highlighting the
amendments as a mark up and comprising all amendments; and
(b)
have taken notice of all amendments in the Amended Facility Agreement and
Amended Shareholders’ Undertaking Agreement.
12
SCHEDULE 1
Conditions Precedent
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 of the Borrower, RWE-IN,
MFC IH, Altmark Industriepark AG and SP Holding GmbH.
(2)
An up-to-date certificate of incorporation/authorization issued by the Washington Secretary
of State in respect of Mercer International.
(3)
A copy of the corporate authorizations and/or shareholder resolutions or supervisory board’s
resolutions, as the case may be, of the Borrower, RWE-IN, MFC IH, Altmark Industriepark AG and
SP Holding relating to the execution, delivery and performance of this Agreement.
(4)
A certified copy of the Secretary Certificates of the
Corporate Secretary
of Mercer
International,
a)
authorizing the execution, delivery and performance of this Agreement as
approved by Mercer International’s board of trustees, and
b)
setting out the names and signatures of the authorized signatories for the
signing of this Agreement duly certified to be true and correct.
(5)
Specimen signatures of the persons authorized to sign this Agreement.
(6)
A legal opinion of the Borrower’s counsel in form and substance satisfactory to the Agent
with respect to the due execution and capacity of this Agreement relating to the Borrower, MFC
IH, RWE-IN, Altmark Industriepark AG and SP Holding .
(7)
A legal opinion of Mercer International’s counsel in form and substance satisfactory to
the Agent with respect to the due execution and capacity of this Agreement relating to Mercer
International.
13
SCHEDULE 2
Amended Facility Agreement
CLIFFORD
CHANCE
Final Version
Conformed Copy as amended pursuant to the Amendment and Restatement Agreement No 1
dated 23 March 2005
Binding Version must be in German
ZELLSTOFF STENDAL GMBH
and
BAYERISCHE HYPO- UND VEREINSBANK AG
EURO 827,950,000
PROJECT FINANCING FACILITY AGREEMENT
CLIFFORD CHANCE PARTNERSCHAFTSGESELLSCHAFT VON RECHTSANWäLTEN, WIRTSCHAFTSPRüFERN, STEUERBERATERN UND
SOLICITORS SITZ: FRANKFURT AM MAIN · AG FRANKFURT AM MAIN PR 1000
Remedies and Waivers, Cumulative Rights, Partial Invalidity
98
38.
Notices
98
39.
Governing Law
100
40.
Jurisdiction
100
41.
Counterparts
101
42.
Confirmation pursuant to Section 8 of the German Money Laundering Act (
Geldwäschegesetz
)
101
SCHEDULE 1 Drawdown Request
102
SCHEDULE 2 Conditions for the First Drawdown
105
SCHEDULE 3 General Drawdown Conditions
109
SCHEDULE 4 Conditions Subsequent
110
SCHEDULE 5 Lenders and Commitments
112
CLAUSE
PAGE
SCHEDULE 6 Mandatory Cost Formulae
113
SCHEDULE 7 Form of Account Pledge Agreement
116
SCHEDULE 8 Form of Luxemburg Account Pledge Agreement
138
SCHEDULE 9 Security Agreements
156
SCHEDULE 10 State Guarantee
157
SCHEDULE 11 Financing of the Subsidiaries
158
SCHEDULE 12 Minimum Insurance Schedule
163
SCHEDULE 12a Minimum Insurance Operation Period Schedule
164
SCHEDULE 13 Sample Table of Content Regarding Quarterly Construction Progress Reports
171
SCHEDULE 14 Transfer Certificate
173
SCHEDULE 15 Development Costs
177
SCHEDULE 16 Broker’s Letter of Undertaking
178
SCHEDULE 17 Archeological Sites
181
SCHEDULE 18 Investment and Financing Plan
182
1
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 Goldbecker
Strasse 1, 39596 Arneburg, Federal Republic 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 Tucherpark
16, 80538 München, Federal Republic 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 beschränkter 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)
Mercer International, Inc., a Massachussetts trust incorporated under the laws of the state
of Washington, United States of America (“
Mercer International
”), RWE Industrie-Lösungen GmbH,
a limited liability company incorporated under the laws of the Federal Republic of Germany
(“
RWE-IN
”) and Altmark Industriepark AG (formerly AIG Altmark Industrie AG), a company
incorporated under the laws of the Federal Republic of Germany (“
ALTMARK INDUSTRIEPARK AG
”)
and MFC Industrial Holdings AG (formerly 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
2
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.
“
Acceptance Waiver Agreement
”: The agreement dated [] entered into between the Borrower and
RWE-IN.
“
Additional Works
”: Has the same meaning as set out in the Acceptance Waiver Agreement.
“
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 and currency rate hedging payments related to the debt service or receipts
and excluding those repayments of principal under Tranche E) for that period. In relation
to the First
3
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 proceeding 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 (
Umsatzerlöse
) 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 and
other compensations under the EPC Contract and receipts of any settlement payments in
relation to Hedging Agreements and payments under any currency hedging not related to the
debt service and receipt of payments under pulp price hedging and any receipts from carbon
certificate trading) 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) and
any expenditures of any settlement payments in relation to Hedging Agreements and
expenditures under any currency hedging not related to the debt service and expenditures
under pulp price hedging and any expenditures or payments to be made under carbon
certificate trading. Revenues in the form of Government Grants and recovery of VAT are not
included in the Available Cash Flow.
4
“
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, Wirtschaftsprüfungsgesellschaft, Düsseldorf 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 Mercer 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 MFC IH at Financial Close.
5
“
Commitment
”: In relation to each Lender, the sum of such Lender’s commitments under the
Facility, as specified in
Schedule 5
(
Lenders and 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
completion of the Additional Works over and above those set out in the Investment and
Financing Plan;
(c)
any shortfall in Start Up Cash Flows below the budgeted amount therefore as
set out in the agreed Base Case delivered pursuant to
Schedule 2
(
Conditions
for the First Drawdown
), paragraph 9; and
(d)
any shortfall in Government Grants determined on or before the First
Repayment Date.
“
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 Société Anonyme.
“
Derivative Transaction
”: Any swap agreement, warrant agreement, futures and forward
contracts or similar arrangement with respect to interest rates, currencies, carbon
certificates 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.
6
“
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 Société
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 on the basis of quotations by first
class banks in the European Interbank Euro Market 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
7
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 therefore 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, ALTMARK INDUSTRIEPARK AG and Thyssen Rheinstahl
Technik Projektgesellschaft mbH for ancillary costs for which RWE-IN, ALTMARK
INDUSTRIEPARK AG, 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.
8
“
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)
Sub-Tranches B1, B2 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;
9
(c)
any amount raised pursuant to any note purchase facility or the issue of
bonds, notes, debentures, loan stock 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, MFC IH and the Agent
dated 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
10
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 über die
Durchführung von Infrastrukturmaßnahmen 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 Marsh Ltd. and its successors as advisers to the
Lenders in relation to insurance issues.
11
“
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 Société 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
).
“
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
).
“
Margin
”: For:
(a)
Tranche A:
0.75 % per annum before 31 March 2003 and 1.05 % per annum from
(and including) 31 March 2003;
(b)
Tranche B:
0.60 % per annum before 31 March 2003 and 0.90 % per annum from
(and including) 31 March 2003; (for the guaranteed portion of Tranche B);
1.50 % per annum before 31 March 2003 and 1.80 % per
annum from (and including) 31 March
12
2003; (for the non guaranteed portion of Tranche B);
(c)
Tranche C:
1.55 % per annum before 31 March 2003 and 1.85 % per annum from
(and including) 31 March 2003;
(d)
Tranches D1 and D2:
1.55 % per annum before 31 March 2003 and 1.85 % per
annum from (and including) 31 March 2003; and
(e)
Tranche E:
1.25% per annum before 31 March 2003 and 1.55 % per annum from
(and including) 31 March 2003.
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
) and
Schedule 12a
(
Minimum Insurance Operation Period Schedule
) apart from
any employer’s liability or motor vehicle liability insurance.
13
“
Minimum Insurance Schedule
”: The Schedule prepared by the Insurance Adviser and set out in
Schedule 12
(
Minimum Insurance Schedule
) relating to insurances during the
Construction Period and
Schedule 12a
(
Minimum Insurance Operation Period Schedule
)
relating to insurance during 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;
14
(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.
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 BBB- rating or
better of Standard & Poor’s Corporation or an equivalent rating from such other rating
agency approved by the Agent. The average rating of the investments should be A+ or better
of Standard & Poor’s Corporation or an equivalent rating agency approved by the Agent.
“
Permitted Subsidiaries
”: The two support holding companies, the wood supply company and
the logistic company and any subsidiary approved by the Agent.
“
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.
15
“
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
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 to the extent not capitalised, 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.
16
“
Related Party
”: A company or person related to the Borrower, i.e. part of the “Konzern”
within the meaning of § 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.
17
“
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 MFC IH 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 (
Blatt
) 3129, communal district
(
Gemarkung
) Arneburg, under plot (
Flur
) 18, sub-plots (
Flurstück
) nos. 90, 105/0 and
107/0, under plot (
Flur
) 21, sub-plots (
Flurstück
) nos. 52, 36, 44, 35, 40 and 38,
under plot (
Flur
) 22, sub-plot (
Flurstück
) no. 5 and under plot (
Flur
) 24, sub-plot
(
Flurstück
) no. 14/8;
(b)
more particularly defined in the Land Register (
Grundbuch
) of the Stendal
Local Court (
Amtsgericht
) for Arneburg folio (
Blatt
) 3215, communal district
(
Gemarkung
) Arneburg, under plot (
Flur
) 18, sub-plot (
Flurstück
) no. 108 and under
plot (
Flur
) 21, sub-plot (
Flurstück
) no. 67;
(c)
more particularly defined in the Land Register (
Grundbuch
) of the Stendal
Local Court (
Amtsgericht
) for Arneburg folio (
Blatt
) 3230, communal district
(
Gemarkung
) Arneburg, under plot (
Flur
) 21, sub-plots (
Flurstück
) nos. 1/57 and 33;
(d)
more particularly defined in the Land Register (
Grundbuch
) of the Osterburg
Local Court (
Amtsgericht
) for Altenzaun folio (
Blatt
) 284,
18
communal district (
Gemarkung
) Altenzaun, under plot (
Flur
) 1, sub-plot (
Flurstück
)
324;
(e)
Land Register (
Grundbuch
) of the Stendal Local Court (
Amtsgericht
) for
Schönfeld (for the time being) folio (
Blatt
) 542, plot (
Flur
) 9, sub-plot (
Flurstück
)
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 ALTMARK INDUSTRIEPARK AG and the Borrower
(Land Register (
Grundbuch
) of the Stendal Local Court (
Amtsgericht
) for Arneburg folio
(
Blatt
) 3215, communal district (
Gemarkung
) Arneburg, under plot (
Flur
) 21, sub-plot
(
Flurstück
) no. 61).
“
SP Holding
”: Stendal Pulp Holding GmbH.
“
Sponsors
”: Mercer International, RWE-IN, ALTMARK INDUSTRIEPARK AG and MFC IH 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 Moody’s 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 Société
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 Société Anonyme.
“
Start-up
”: bears the meaning ascribed thereto in the EPC Contract.
“
Start-Up Cash Flows
”: Net operating cash flows generated by the Project from the 18
September 2004 (as end of construction pursuant to the German Commercial Code,
HGB
) until
Acceptance in the amount confirmed by an auditor acceptable to the Agent after Acceptance
including the financing
19
advantages arising out of the provision of funds made available by the European Investment
Bank in the aggregate amount of EUR 4,022,725.80, proceeds resulting from the termination
of a cross currency swap in the amount of EUR 29,394,000.00, proceeds resulting from
forward sales in an amount of EUR 743,010.26 and EUR 1,820,459.00 and a penalty payment in
the amount of EUR 250,000.00 paid by Hochtief AG to the Borrower according to an agreement
dated 26 April 2004 entered into between the Borrower and Hochtief AG in respect of the
installation of an effluent pipe to Elbesite.
“
State Guarantee
”: The guarantees (
Ausfallbürgschaften
) 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 für Bürgschaftsübernahmen durch die Bundesrepublik Deutschland (Bund) und
parallel bürgende Bundesländer” (General Conditions for the issuing of guarantees by the
Federal Republic of Germany and Länder).
“
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.
20
“
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 and funds for cash deposits which
the Borrower needs to provide to banks as a security for the provision of guarantees by
such banks.
“
Works
”: Has the meaning as set out in the EPC Contract.
1.2
Interpretation
Any reference in this Agreement to:
21
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,
Sicherungsübereignung, Sicherungsabtretung,
Eigentumsvorbehalt, Pfandrecht, Grundpfandrechte, Treuhandvereinbarung, Nießbrauch
);
“
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 (
bestandskräftig
) decree,
treaty, regulation, legally binding (
bestands- oder rechtskräftig
)
22
directive, rules or any other legally binding (
bestands- oder rechtskräftig
) 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:
(a)
if any such numerically corresponding day is not a Business Day, such period
shall end on the immediately succeeding Business Day in that calendar month or, if
none, it shall end on the immediately preceding Business Day; and
(b)
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, state or
Bundesland, 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
23
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.
24
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. However, Tranche C will be available until
and including the 30 September 2005. Tranche D2 and E 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-à-vis
each of them as separate and independent obligations (
Teilschuldnerschaft
).
25
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
Schuld
) 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
Sub-Tranches B1, B2 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 the earlier of (i) the completion of Additional Works and (ii) one (1) month prior to
the first Repayment Date, Tranche D2 will be used by the Borrower for the financing of Cost
Overruns. Upto and including the date falling one (1) month prior to the First Repayment Date,
Tranche D2 will be used 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 and 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:
26
(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
27
(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.
28
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 (b), 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 earlier of (i) the completion of the Additional Works
and (ii) one (1) month prior to the First Repayment Date to the extent that such Cost
Overruns are not required to be paid by the Shareholders under the Shareholders’
Undertaking Agreement and in any
29
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 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 30 September 2005 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
).
30
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.
31
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 therefore, 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
32
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.
33
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) at the option of the Agent 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.
34
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
(
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
35
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, with a seven (7) Banking Days prior written notice to the Agent on the
relevant Repayment Date. Should there be less than seven (7) Banking Days between receipt of
Government Grants and/or VAT refunds on Project Costs and/or, as the case may be, drawings
made under Clause 2.6.2 (b) of the Shareholders’ Undertaking Agreement, and the interest
payment date(s) mentioned in the previous sentence, then such repayment shall be made on the
following interest payment date(s). Such repayment is, however, not necessary to the extent
the
36
Borrower uses 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 will,
at the request of the Borrower, subject to Clause 6.1 (
General
), be permitted 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 Tranches D2, D1 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.
37
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.
38
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 relevant
Tranches.
39
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
).
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
therefore 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 transferred by the Borrower on to the
Revenue Account.
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
”).
40
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 Société 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 Luxembourg Account Pledge Agreement
) in respect of the Investment Account maintained with
HVB Banque Luxembourg Société 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
41
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 § 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 therefore not later than 10:00 a.m. If 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
42
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 Tranche D2, Tranche D1, Tranche C,
Tranche B 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 Tranche D2, Tranche D1 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
43
(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
44
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 forward to the Borrower any
insurance proceeds received by them 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.
45
(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 Société 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 Société 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:
46
(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 on 30
September 2005.
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
).
47
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
(taking into consideration the Hedging Agreements entered into for the hedging of the
interest risks and the hedging of the currency rate risk related to the debt service of the
Borrower) 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 the 30 September 2005 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 of
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 Société 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 Société 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 may be held in USD
from time to time.
11.6
Investments
The Borrower may elect to open a further account with HVB Banque Luxembourg Société 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 Société Anonyme and in
the form and substance of the Account
48
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,
49
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.
50
13.2
For the avoidance of doubt, this Clause 13 shall not apply in case of a removal of the
guarantor’s liability (
Gewährträgerhaftung
) 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.
51
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.
52
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 sue 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;
53
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 (
zurückgenommen
) 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;
54
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 therefore 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;
55
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 will not be available before 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
56
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 Financial 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 ALTMARK INDUSTRIEPARK AG 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 ALTMARK INDUSTRIEPARK AG to be
waived at the latest on the day after Financial Close;
57
(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 next 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
and no person will have any right to subscribe for any additional Shares in the
Share Capital;
16.1.31
Liability vis-à-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
ancillary 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)
ALTMARK INDUSTRIEPARK AG in the amount of EUR 1,755,686 plus
VAT purchase price in relation to the Site, EUR 546,794 for ancillary costs
in relation to the purchase of the Site for which ALTMARK INDUSTRIEPARK AG has
provided funds to the Borrower, and the lease agreement dated 16 May 2002
between the Borrower and ALTMARK INDUSTRIEPARK AG all of which (except for the
obligations under the lease agreement) will be repaid under the first Advance;
59
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.
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
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;
61
(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
62
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,
63
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 über 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
64
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.
65
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 21.1.15 (
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;
66
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;
67
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 on a date after the First Repayment
Date on which 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 therefore 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;
68
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-à-vis the Guarantor and C&L from any duty of discretion (
Schweigepflicht
) whereby
any requests by the Lenders shall be made through the Agent;
69
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 § 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;
70
21.1.25
Rented part of the Site
: not terminate the site lease agreement dated 16 May 2002 and made
between the Borrower and ALTMARK INDUSTRIEPARK AG, 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 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 ALTMARK INDUSTRIEPARK AG 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, ALTMARK INDUSTRIEPARK AG and Thyssen Rheinstahl Technik
Projektgesellschaft mbH for the ancillary costs in connection with the purchase of
the Site for which RWE-IN, ALTMARK INDUSTRIEPARK AG, 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.
71
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 in
respect of 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
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
:
(a)
sell or otherwise dispose of (in any transaction or series of transactions
whether related or not) its existing shares in any direct subsidiary; and
(b)
procure that no direct subsidiary shall sell or dispose of (in any
transaction or series of transactions whether related or not) its existing shares in
any of its subsidiaries or issue any new shares to any third party where following any
such sale more than 49% of the issued ordinary share capital of the relevant
subsidiary would be owned by one or more third parties,
72
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 aff
Previous Section