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.
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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 affiliate of a Sponsor unless
previously approved in writing by the Majority Lenders (such approval not to be
unreasonably withheld).
21.2.7
Shareholders’ Account
: make any payments to the Shareholders’ Account other than in
compliance with the provisions of this Agreement;
21.2.8
Capital Expenditures
: incur any Capital Expenditures at any time or in any amount of more
than EUR 2 million in excess of the Project Budget for that financial year other than with the
consent of the Majority Lenders;
21.2.9
Capital Reserves
: repay any capital reserves set up for Kvaerner plc’s, Thyssen Rheinstahl
Technik Projektgesellschaft mbH or any Shareholder’s waivers of repayment claims under the
shareholder loans granted by them to the Borrower unless (a) the tax audit of the accounts has
accepted the amount of such capital reserves and (b) they are funded out of the Shareholders’
Account and identify such capital reserves as a separate balance sheet item;
21.2.10
Shareholder Loans
: (a) prior to the First Repayment Date pay interest on any Shareholder
Loans and thereafter only in accordance with the terms hereof and of the Shareholder Loans and
(b) prepay, repay, redeem, purchase or otherwise acquire any Shareholder Loans prior to the
Tranche A Final Repayment Date and the repayment in full of each outstanding Advance
hereunder;
21.2.11
Financial Indebtedness
: incur, create or permit to subsist or have outstanding any
Financial Indebtedness or enter into any agreement or arrangement whereby it is entitled to
incur, create or permit to subsist any Financial Indebtedness other than, in each case,
Permitted Financial Indebtedness;
21.2.12
Encumbrances
: create or permit to subsist any encumbrance on any of its assets other than
Permitted Encumbrances;
21.2.13
Mergers
: split, merge or consolidate with any other person, enter into any demerger
transaction, or participate in any other type of corporate reconstruction without the prior
consent of the Majority Lenders and the Guarantors;
21.2.14
Subsidiaries
: create any subsidiary or permit to exist any interest in any person (whether
by shareholding, joint venture, partnership, whether any income or profits are, or would be,
shared or transferred with any other party or otherwise), other than the Permitted
Subsidiaries;
21.2.15
Additional Project Contracts and Amendments to Project Contracts
:
73
(a)
enter into any additional material Project Contracts with a value of more
than EUR 4 million or contracts for the sale of energy and the agreement on reserve
electricity services save with the prior written consent of the Majority Lenders (such
consent not to be unreasonably withheld or delayed);
(b)
subject to Clause 21.2.16 (
Project Specifications
), only, amend in any
material respect, or grant any waiver or consent under, any Project Contract if such
amendment, waiver or consent would not reasonably be expected to be materially adverse
in relation to the Borrower’s ability to perform its obligations under the Transaction
Documents and/or the validity or enforceability of the Transaction Documents. In the
case of Project Contracts with a value of more than EUR 4 million or contracts for the
sale of energy and the agreement on reserve electricity services such amendments,
waivers and consents will have to be notified to the Agent in writing seven (7) days
in advance;
(c)
cancel or terminate any Project Contract with a value of more than EUR 4
million or any contract for the sale of energy and the agreement on reserve
electricity services (other than the EPC Contract or any contract for the carrying out
of the necessary infrastructure works at the Site), without having given thirty (30)
days prior written notice to the Agent and then only so long as a replacement contract
is in place on terms no less beneficial to the Borrower as the cancelled/terminated
Project Contract; and
(d)
cancel, terminate or suspend the EPC Contract or any contract for the
carrying out of the necessary infrastructure works at the Site or (subject to Clause
21.2.16 (
Project Specifications
)) grant any waiver or consent under or amend the same
without Majority Lenders’ prior written consent;
21.2.16
Project Specifications
: make any changes to the design, specification or configuration of
the plant without Majority Lenders’ consent except for such amendments and changes which are
in conformity with the EPC Contract or are of a minor nature, it being understood that any
such change which might result in an increase in the Project Costs in an aggregate amount of
at least EUR 1 million or a delay in a System Start-Up as defined in the EPC Contract or in
Acceptance will not be deemed to be of a minor nature;
21.2.17
Waiver of tests under EPC Contract
: waive or materially alter any test procedures or
approve any test results in connection with the tests under Clauses 16 to 19 of the EPC
Contract where this could have an adverse effect on the
74
Project without Majority Lenders’ consent (such consent not to be unreasonably withheld or
delayed);
21.2.18
Acceptance Certificate
: issue the Acceptance Certificate as defined in the EPC Contract
without the Agent’s consent (such consent not to be unreasonably withheld or delayed);
21.2.19
Shares
: purchase, cancel or redeem any Share Capital, reduce the Share Capital, issue any
Shares otherwise than to an existing Shareholder, grant any option over or make any offer of
Shares to any person or alter any material rights attaching to the Shares without the Majority
Lenders’ and the Guarantors’ consent. Their consent is however not required in relation to
the offer of Shares;
21.2.20
Shareholders’ Agreement
: change its articles of association in any manner which would be
inconsistent with the provisions of any Transaction Document without Majority Lenders’ consent
(such consent not to be unreasonably withheld);
21.2.21
Change of Business
: make any material changes to the general nature of its business as a
pulp mill (including wood harvesting and procurement as well as logistic services) and any
business incidental thereto or carry on any other business which results in any material
change to the nature of such business;
21.2.22
Abandonment
: abandon the Project;
21.2.23
Withdrawals from Cash Collateral Accounts
: withdraw any moneys on the Cash Collateral
Accounts other than pursuant to the provisions of the Financing Documents;
21.2.24
Accounts
: open or operate any bank accounts other than as contemplated by this Agreement;
21.2.25
Assignment and Encumbrance of Government Grants
: assign, pledge or otherwise charge,
encumber or dispose of its claims, rights and title under and to the Government Grants except
as provided in the Investment Incentives Assignment Agreement listed in
Schedule 9
(
Security Agreements
);
21.2.26
Financial Year
: change its financial year;
21.2.27
Obligations
: incur any material obligations not contemplated by or permissible under this
Agreement or which the Borrower assumes in connection with deliveries and services undertaken
by it in the ordinary course of business without the prior consent of the Guarantors.
75
22.
INSURANCES
22.1
General
The Borrower will effect through brokers, previously approved in writing by the Agent, pay
the premiums when due, maintain in full force and effect and comply with all provisions of
the insurances for the Construction Period and the Operation Period, under forms of
policies commonly accepted in the industry and with reputable insurance companies
reasonably acceptable to the Agent. Such insurances include the insurances set out in
Schedule 12
(
Minimum Insurance Schedule
) and
Schedule 12a
(
Minimum
Insurance Operation Period Schedule
) and such other insurances as the Agent specifies are
required to be maintained in connection with the Project in accordance with prudent
operating practice.
22.2
Specific Provisions of the Insurances
The Borrower will provide for the following with respect to all Material Insurances:
22.2.1
Sole Loss Payee
: the Security Agent to be named as sole loss payee in all policies save, in
relation to policies relating to third party liability, where payment is made directly to the
third party claiming thereunder in full and final settlement of his claim. A payment to the
loss payee in accordance with this Clause shall, to the extent of that payment, be made to the
Insurance Account or any other account specified to the insurers by the Security Agent and
discharge the liability of the respective insurer to pay the Borrower or other claimant
insured party. The arrangements in this Clause shall continue to apply notwithstanding the
liquidation or insolvency of the Borrower or any of the insurers;
22.2.2
Waiver
: the insurers to agree to waive all rights of subrogation or action against the
Security Agent unless any of the members of the executive board (
Vorstand
) of the Security
Agent acted with gross negligence or wilful misconduct (
Vorsatz
);
22.2.3
Reduction of Insurance Proceeds
: the insurers not to reduce any insurance proceeds due and
payable to the Security Agent (on behalf of itself and other beneficiaries) as loss payee,
save in respect of any unpaid premium if so required by the respective insurer;
22.2.4
Insurance Claims Assignment
: cause the insurers to acknowledge that they have noticed that,
by the Insurance Claims Assignment Agreement as set out in
Schedule 9
(
Security
Agreements
), the Borrower assigned to the Security Agent (for and on behalf of the Lenders)
all its existing and future rights and claims in and to the Material Insurances (including all
claims of whatsoever nature thereunder and return of premiums and proceeds in respect
thereof). The insurers
76
shall also confirm that they have not received notice of any other assignment, charge or
other encumbrance of the Borrower’s rights and claims under the respective insurance.
22.2.5
Adequate Information
: the insurers to acknowledge that they have received adequate
information in order to evaluate the risk of insuring the Borrower in respect of the risks
hereby insured;
22.2.6
Cancellation
: the insurers not to cancel (
kündigen
) the Material Insurances during
the Construction Period;
22.2.7
Notices
: the insurers to give in writing to the Security Agent
(a)
subject to 22.2.6 a thirty (30) days notice of cancellation, non-renewal
(whether for non-payment of premium or otherwise), suspension (if applicable) or
adverse change of terms;
(b)
a thirty (30) days notice of any reduction in limits or coverage, any
increase in deductibles or any termination before the original expiry date is to take
effect; and
(c)
as soon as any of the insurers becomes aware, notice of any act, event or
omission which such insurer considers may invalidate or render unenforceable in whole
or in part any insurance.
22.2.8
Delivery of Notices and Documents
: the policies to stipulate that any notice or document to
be served in relation to any policy may be delivered or sent by prepaid recorded delivery post
(if within the Federal Republic of Germany), by prepaid airmail (if elsewhere) or facsimile
process to the party to be served at its registered office or at such other address as it may
have notified to the other parties in writing in accordance with this Clause. Any such notice
will be deemed to be given as follows:
(a)
if delivered by hand or by mail, when delivered; and
(b)
if by facsimile when transmitted, but only if, immediately after the
transmission, the sender’s fax machine records the correct answerback;
22.2.9
Governing Law and Jurisdiction
: the insurance policies to be governed by German law and each
of the insurers and co-insured to agree that any legal proceedings arising out of or in
connection with the policies will be brought in the exclusive jurisdiction of a German court.
22.3
Insurance Documentation
The Borrower will promptly provide to the Security Agent copies of all cover notes and
policies (including endorsements) issued from time to time in relation
77
to each insurance, and of all changes requested or effected thereto, and, if so requested
by the Security Agent, of placing slips and all documents disclosed or disclosable to the
insurers of each insurance and relating to claims notified or notifiable to insurers or the
insurance brokers. In addition, the Borrower will promptly deliver to the Security Agent
the originals of all policies (including endorsements) and placing slips.
22.4
Inspection Right
The Security Agent or any of its representatives or the Advisers will be entitled to review
from time to time the compliance of the insurances effected by the Borrower with the above
provisions and the provisions contained in the Minimum Insurance Schedule and the Borrower
undertakes to co-operate with the Security Agent or any of its representatives or the
Advisers, respectively, in this respect and to furnish to it all information requested by
it for such purpose.
22.5
Broker’s Letter of Undertaking
The Borrower will procure that every insurance broker who effects an insurance writes a
broker’s letter of undertaking (substantially in the form set out in
Schedule 16
(
Broker’s Letter of Undertaking
)) to the Security Agent. Such letters have to be provided
prior to Financial Close with respect to insurances during the Construction Period and at
least five (5) Banking Days prior to inception with respect to insurances during the
Operation Period.
22.6
Changes to Insurance Programme
22.6.1
If any variation is proposed to be made to the terms of any insurance, the Borrower will
give at least thirty (30) days prior written notice thereof to the Security Agent. No
variation to any insurance should be effected or agreed by the Borrower until the Security
Agent notifies the Borrower in writing either that the variation is not material to the
Lenders or is otherwise agreeable to the Security Agent. The Security Agent will not
unreasonably withhold or delay its agreement after obtaining any advice that it deems
appropriate in considering the Borrower’s request.
22.6.2
No Event of Default occurs to the extent the Borrower has given notice pursuant to Clause
22.6.1 (
Changes to Insurance Programme
), and for so long as, cover required to be maintained
is not available to the Borrower in the international insurance or reinsurance market on what
the Security Agent accepts in writing to the Borrower to be reasonable commercial terms. In
determining whether such cover is available on reasonable commercial terms, the Security Agent
shall have on-going regard to the scope of such insurance, its cost in the context of the
financing of the Project and the direct and indirect interests of the Lenders under the
Financing Documents.
78
22.7
Notification
The Borrower will promptly notify the Security Agent and the insurers of any increase or
material change in any risk insured under any Material Insurance.
22.8
Claim Handling
The Borrower will
(a)
diligently pursue any valid claim under any insurance,
(b)
promptly notify the Security Agent and the insurers of any matter for which
it may be entitled to a claim under any insurance,
(c)
keep the Security Agent informed on a regular basis regarding progress
towards settling any such claim,
(d)
take account of any representations made by the Security Agent in relation to
any such claim, and
(e)
not negotiate, compromise or settle any claims with a potential value in
excess of EUR 5 million without the written consent of the Security Agent, such
consent not to be reasonably withheld or delayed.
22.9
Renewals
The Borrower will, at least thirty (30) days prior to the renewal of any insurance satisfy
the Security Agent that the cover proposed to be effected for the renewal period will, on
and after the renewal date, comply with the requirements of the Minimum Insurance Schedule.
22.10
Changes in Insurer Security
If an insurer under a Material Insurance ceases to carry a claims paying rating from
Standard & Poor’s Corporation of at least A-, or an equivalent rating from such other
rating agency approved by the Security Agent, the Borrower will promptly inform the
Security Agent thereof and, at the request of the Security Agent, promptly replace the
affected cover with cover from another insurer, or insurers, reasonably acceptable to the
Security Agent and terminate the affected insurer’s participation in the risk,
provided
that
there will at no time be any period when any relevant risk is not insured as required
by the Financing Documents.
22.11
Lender’s Right to Insure if Borrower Defaults
If at any time and for any reason any insurance is not in full force and effect on the
terms or for the insured values required under the Financing Documents, then the Security
Agent shall forthwith be entitled, at the cost and expense of the Borrower, to procure and
pay for such insurance as the Borrower should have
79
effected or procured pursuant to the terms hereof or at any time whilst such failure is
continuing.
22.12
Disputes over Availability of Cover Borrower Defaults
Any disagreement between the Borrower and the Security Agent over the availability of cover
in the international insurance market will be referred to an independent expert appointed
with the agreement of the Borrower and the Security Agent, or, if the parties cannot so
agree within 20 days of the notice given by the Borrower under the covenant referred to in
Clause 22.6 (
Changes to Insurance Programme
), to a person nominated at the request of
either party by the President of the German Association of Insurers, in each case acting as
an independent expert. The expert’s decision will be final and binding on the parties
hereto. The expert’s fees and disbursements will be borne by the Borrower.
23.
EVENTS OF DEFAULT
23.1
Each of following circumstances constitutes an Event of Default for the purposes of this
Agreement, irrespective of whether or not caused by any reason within the control of the
Borrower or any other person:
23.1.1
Payment Obligations
: subject to Clause 6.5, failure by the Borrower to make:
(a)
any payment of principal or interest due under the Facility within seven (7)
Business Days from the due date thereof; and
(b)
any other payment due under the Financing Documents within five (5) Business
Days from a notification by the Agent of the Borrower’s failure to pay;
23.1.2
Representations and Warranties
: any representation, warranty or statement made in any
Financing Document, certificate, statement or opinion delivered by or on behalf of the
Borrower hereunder or in connection herewith is or proves to have been incorrect, untrue or
misleading in any material respect when made and which, if capable of being remedied, has not
been remedied within thirty (30) days from notification by the Agent of such breach;
23.1.3
Covenants
: the Borrower or any of its Shareholders breaches any covenant or material
obligation under the Financing Documents which, if capable of being remedied, has not been
remedied within fifteen (15) Business Days from notification by the Agent of such breach;
23.1.4
Consents and Approvals
: any Authorisation necessary to enable the Borrower to comply with
any of its material obligations under the Transaction Documents and Project is revoked,
withheld or modified or is limited in a way which
80
materially prejudices the validity and enforceability of the Transaction Documents and/or
the ability of the Borrower to meet its obligations
thereunder;
23.1.5
EU-Decision, State Guarantee and Government Grants
: any of the EU-Decision, State Guarantee
or Government Grants is modified in any material respect, revoked, withdrawn, withheld or
suspended, or does not remain in full force and effect;
23.1.6
Insolvency and Rescheduling
: any cause exists on the basis of which insolvency proceedings
under the German Insolvency Code should be initiated against the Borrower, the Borrower
commences negotiations with any one or more of its creditors with a view to the general
readjustment or rescheduling of its indebtedness or makes a composition with its creditors;
23.1.7
Winding-up
: (a) the Borrower, (b) while it has any liability under the Shareholders’
Undertaking Agreement any of the Shareholders or any of the Sponsors or (c) while it has any
liability under the RWE Solutions AG Guarantee, the Direct Agreement or the Parent Company
Guarantee RWE Solutions AG takes any corporate action or any other steps are taken or legal
proceedings are started for its winding-up, dissolution or reorganisation or for the
appointment of a liquidator, receiver, administrator, administrative receiver, conservator,
custodian, trustee or similar officer of it or of any part or all of its revenues and assets;
23.1.8
Insolvency or Winding-up of EPC Contractor
: the EPC-Contractor during the Construction
Period is unable to pay its debts as they fall due, commences negotiations with any one or
more of its creditors with a view to the general readjustments or rescheduling of its
indebtedness, makes a composition with its creditors, or takes any corporate action or other
steps or legal proceedings are started for its winding-up, dissolution, re-organisation
(except for a solvent re-organisation previously approved in writing by the Agent) or for the
appointment of a liquidator, receiver, administrator, administrative receiver or similar
officer of it or of any or all of its revenues and assets;
23.1.9
Indebtedness
: failure by the Borrower to pay any other Financial Indebtedness over EUR
1,000,000 when due or after the expiry of any applicable grace period unless such payment is
contested in good faith by the Borrower;
23.1.10
Obligations of the Borrower
: at any time it is unlawful for the Borrower to perform any of
its material obligations under the Transaction Documents, or to own its material assets or to
carry on its business in materially the same fashion as contemplated in the Financing
Documents and such condition continues for period of sixty (60) days;
81
23.1.11
Obligations of the Parties to Shareholders’ Undertaking Agreement and the RWE Solutions AG
Guarantee
: any of the Shareholders or Sponsors (or any of their successors) fails to comply
with any obligation assumed by it in the Shareholders’ Undertaking Agreement and/or RWE
Solutions AG (or any of its successors) fails to comply with any obligation assumed by it in
the RWE Solutions AG Guarantee, the Direct Agreement or the Parent Company Guarantee and such
failure, if capable of remedy, is not remedied within thirty (30) days after receipt of
written notice from the Agent requesting the same;
23.1.12
Change of Control
: a Change of Control occurs without the prior written consent of the
Majority Lenders;
23.1.13
The Borrower’s Business
: the Borrower ceases or threatens to cease to carry on all or a
substantial part of the business it carries on at the date hereof, abandons or threatens to
abandon the Project or disposes of a substantial part of its business or assets or a
substantial part of its business or assets is seized, nationalised or expropriated or
compulsorily acquired by or under the authority of any government;
23.1.14
Assets of the Borrower
: except as permitted by the Financing Documents, the Borrower ceases
to be the sole lawful and beneficial owner of, and having good title to, any material part of
its assets, and such assets or part thereof, are not re-acquired or replaced in a manner
satisfactory to the Lenders within fifteen (15) days of such cessation;
23.1.15
Acceptance
: Acceptance does not occur by the date falling 40 months after Financial Close;
23.1.16
Default under Transaction Documents
: a material default under any of the Transaction
Documents which, if capable of being remedied, has not been remedied within thirty (30) days
in the case of any Financing Document and ninety (90) days in the case of any Project Contract
in each case of notification by the Agent of such default;
23.1.17
Invalid, Non-binding and Non-enforceable Obligations
: a material provision of the Financing
Documents is not, or is contested by a party other than a Lender to be not, legal, valid,
binding and enforceable;
23.1.18
Qualifications in the Auditors’ Report
: the auditors have made a qualification in their
report and there are reasonable doubts (
vernünftige Zweifel
) concerning the continuation of
the Borrower’s business on a going concern basis unless within twenty (20) Business Days from
the date of the auditor’s report the Borrower has presented a certificate from the auditors
showing that the reasons for the doubts raised have been remedied or sufficient measures have
been taken for their remedy;
82
23.1.19
Security
: any Security ceases to be in full force and effect for any reason other than:
(a)
the assignment of any credit or portion of the finance to which such Security
relates;
(b)
the failure to make the required filings or registrations where such filings
or registrations are under the control of the Lenders;
23.1.20
Litigation
: any material judgement, award or decision on any litigation, arbitration,
administrative proceedings or governmental or regulatory investigations, proceedings or
disputes is commenced against the Borrower or its assets which is materially adverse in
relation to the Borrower’s ability to perform its obligations under the Transaction Documents
and/or the validity or enforceability of the Transaction Documents unless such judgement,
award or decision is stayed pending appeal without the necessity for the Borrower to provide
any security in connection therewith;
23.1.21
Enforceability of Encumbrance
: any encumbrance over any assets of the Borrower securing an
indebtedness of not less than EUR 100,000 becomes enforceable;
23.1.22
Execution or Distress
: any execution (
Zwangsvollstreckung
) or distress (
Beschlagnahme
) is
levied against, or an encumbrancer takes possession of the whole, or any material part of the
assets of the Borrower or any event which under the laws of any jurisdiction has a similar
effect is not discharged within thirty (30) days;
23.1.23
Insurances
: Subject to Clause 22.6.2 (
Changes to Insurance Programme
), the Borrower fails
to maintain the insurances pursuant to the provisions of Clause 22 (
Insurances
);
23.1.24
Destruction of Project
: the Project or any substantial part thereof is destroyed or damaged
in a manner which is not covered in full by proceeds of insurance, (excluding any agreed
deductibles);
23.1.25
Material Adverse Change
: any event or circumstance (or series of events or circumstances)
occurs which has a Material Adverse Effect;
23.1.26
Force Majeure
: an Event of Force Majeure occurs or a series of Events of Force Majeure
occur the effects of which continue (on an aggregated basis) for a period of 230 days under
the EPC-Contract.
23.1.27
Registration of Capital Increase
: (i) the Borrower has failed to produce within four (4)
Business Days from receipt by it and the notary (who, in accordance
83
with Clause 2.6.1 of the Shareholders’ Undertaking
Agreement has certified the capital increase) of a
written confirmation by the Agent that the Shareholder
Contributions have been credited to the Disbursement
Account, the confirmation by the notary required as
proof thereof that the registration of the EUR
15,000,000 has been sent to the commercial register,
or (ii) the registration of the capital increase has
been revoked by the Shareholders.
23.2
Acceleration and Cancellation
23.2.1
Upon the occurrence of an Event of Default and at any time thereafter while such Event of
Default is continuing, the Agent may and shall upon the direction of the Majority Lenders by
notice to the Borrower:
(a)
declare all or any part of the Advances to be immediately due and payable or
declare all or any part of the Advances to be due and payable on its demand (whereupon
the same will become so payable together with accrued interest thereon and any other
sums then owed by the Borrower under the Financing Documents);
(b)
declare that any unutilised portion of the Facility will be cancelled,
whereupon the Lenders’ undrawn Commitments shall be cancelled and each Lender’s
undrawn Commitment will be reduced to zero,
provided that
, notwithstanding the
foregoing, upon the occurrence of an Event of Default specified in Clauses 23.1.5
(
Insolvency and Rescheduling
), 23.1.7 (
Winding Up
), the undrawn Commitments of each
Lender will immediately be reduced to zero and all Advances and other sums then owed
by the Borrower hereunder shall become immediately due and payable; and/or
(c)
exercise all rights and remedies under any Financing Document or instruct the
Security Agent to do so.
23.2.2
A notice of the Agent pursuant to Clause 23.2.1 may only be given (a) if an Event of Default
pursuant to Clauses 23.1.1 (
Payment Obligations
), 23.1.6 (
Insolvency and Rescheduling
), 23.1.7
(
Winding-Up
), 23.1.13 (
The Borrower’s Business
) and 23.1.24 (
Destruction of Project
) has
occurred and is continuing, or (b) if any other Event of Default has occurred and is
continuing only after careful consideration of the reasonable concerns of the Borrower or in
case the Majority Lenders have determined in their reasonable opinion that due to such Event
of Default the ability of the Borrower to perform any of its obligations under the Financing
Documents has been materially impaired.
23.3
Advances Due on Demand
If, pursuant to Clause 23.2.1(a), the Agent declares all or any part of the Advances to be
due and payable on demand of the Agent, then, and at any time
84
thereafter within a period of three months, the Agent may by notice to the Borrower:
(a)
require repayment of all or such part of the Advances on such date as it may
specify in such notice (whereupon the same will become due and payable on the date
specified together with accrued interest thereon and any other sums then owed by the
Borrower under the Financing Documents); and/or
(b)
select as the duration of any Interest Period which begins whilst such
declaration remains in effect a period of six months or less.
23.4
Waivers
The Lenders may, subject to Clause 23.5.2, waive any Event of Default with the Majority
Lenders’ consent upon written request by the Borrower to the Agent.
23.5
Participation of Guarantors
23.5.1
Upon the occurrence of an Event of Default the Agent will promptly inform the Guarantors
thereof.
23.5.2
The Lenders may waive any Event of Default pursuant to Clause 23.4 (
Waivers
) only with the
consent of the Guarantors.
24.
AGENT, ARRANGER AND LENDERS
24.1
Appointment and Authorisation
Each Lender hereby irrevocably (except for a removal under Clause 24.15 (
Resignation
))
appoints the Agent to act as its agent in connection with the administration of the
Facility under the Financing Documents, and irrevocably (except for a removal under Clause
24.15 (
Resignation
)) authorises the Agent, to take such action and to exercise and carry
out such rights, discretions, authorities, powers and duties as are specifically delegated
to the Agent in this Agreement, in the Shareholders’ Undertaking Agreement, the Security
Agreements and the RWE Solutions AG Guarantee together with such rights, discretions,
authorities, powers and duties as are reasonably incidental thereto,
provided that
the
Agent will not commence any legal action or proceedings on behalf of any Lender without
such Lenders’ consent. Each Lender hereby relieves the Agent from the restrictions of §
181 BGB in respect of the authority conferred upon it in this Agreement.
24.2
No Obligation
Neither the Agent nor the Arranger is obliged:
85
24.2.1
to take any action to ascertain whether any Event of Default has occurred or is outstanding;
24.2.2
to ascertain the correctness of any representation made by the Borrower or any other party
in connection with this Agreement or any other Transaction Document;
24.2.3
to inquire as to the performance by the Borrower or any other party of its obligations under
this Agreement or any other Transaction Document, or any breach of the Borrower or any other
party of its obligations under this Agreement or any other Transaction Document; or
24.2.4
to give notice to the Lenders of any information or event of which the Agent becomes aware
otherwise than by notice given by a party to this Agreement or to any of the Advisers in
accordance with this Agreement.
The Agent will not be deemed to have knowledge of the occurrence of a Event of Default
until it has received notice thereof from a party to this Agreement describing the Event of
Default and stating that the event is an Event of Default, in which case it will promptly
notify the Lenders.
24.3
Reliance
The Agent is entitled to rely on any communication or document believed by it to be genuine
and correct, and on the advice given in connection with this Agreement by any of the
Advisers appointed in connection with this Agreement, and will not be liable to any of the
parties hereto and any of the Lenders for any of the consequences of such reliance where
such reliance is in good faith.
24.4
Information Obligations
Notwithstanding any specific provisions in this Agreement relating to reporting
requirements, the Agent will within the scope of its appointment:
24.4.1
promptly upon receipt notify each of the Lenders affected thereby of any material
information and notice received by it from the Borrower, any of its Shareholders or any of the
Advisers and will, to the extent it has obtained a sufficient number of photocopies from the
Borrower, any of its Shareholders or such Adviser, supply photocopies of relevant documents to
the Lenders;
24.4.2
promptly notify each of the Lenders of the occurrence of an Event of Default or any default
by the Borrower, any of its Shareholders or any other party in the performance of or
compliance with its respective obligations under this Agreement and the other Transaction
Documents of which the Agent has received notice from a party to this Agreement or any of the
Advisers in accordance with this Agreement.
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24.5
Compliance with Legal Provisions
Nothing in this Agreement obliges the Agent to do anything which would or might in its
opinion be contrary to the law of any relevant jurisdiction or render it liable to any
person, and the Agent may do anything which in its opinion is necessary to comply with any
such law.
24.6
Advisers
The Agent may retain and pay for the advice or services of any of the Advisers or any
expert whose advice in its opinion is necessary or appropriate and rely upon any advice so
obtained and shall not be liable to any of the parties hereto or to any of the Lenders for
any of the consequences where such reliance is in good faith.
24.7
Liability
Neither the Agent nor the Arranger nor any of their respective directors, officers,
employees or agents will be liable for any action taken or omitted by it, him or them under
or in connection with this Agreement, the Security Agreements, the Shareholders’
Undertaking Agreement or any other Transaction Document and any related documentation
except, notwithstanding any other provision of this Agreement, to the extent of its, his,
or their gross negligence, wilful misconduct or bad faith.
24.8
Agency
The Agent will in performing its functions and duties under this Agreement, the Security
Agreements, Shareholders’ Undertaking Agreement and any other Transaction Document solely
act as the agent of the Lenders and will not assume or be deemed to have assumed any
obligation as agent or otherwise for the Borrower or any of its Shareholders, except as
specifically stated herein or in any other Transaction Document. The Agent will have no
liability or responsibility to the Borrower or any Lender in connection with any failure or
delay in performance or breach by any Lender or Lenders (other than the Agent in its
capacity as a Lender) or the Borrower of any of its obligations under this Agreement, the
Security Agreements, the Shareholders’ Undertaking Agreement or any other Transaction
Document.
24.9
No Verification Duties
Neither the Agent nor the Arranger will be responsible for or obliged to verify:
24.9.1
the accuracy and/or completeness of any statements, representations or warranties made in or
in connection with this Agreement, the Security Agreements, the Shareholders’ Undertaking
Agreement or any other Transaction Document;
87
24.9.2
for any information given to any of the Lenders in respect of the Borrower or any matter
relating to the Facility (including, without limitation, the Information Memorandum);
24.9.3
the recoverability of any of the sums due or to become due under this Agreement;
24.9.4
any failure, omission or defect in perfecting any Security, or the enforceability or value
of any Security; or
24.9.5
the legality, validity, effectiveness, adequacy or sufficiency of this Agreement, the
Security Agreements and the other Financing Documents.
24.10
Transaction Analysis
Each Lender acknowledges that it has made its own analysis of this transaction (including,
without limitation, all agreements entered into in connection with this Agreement) without
relying on the Agent or the Arranger and based on such information as it has deemed
appropriate, and has reached its decision to enter into this Agreement based on its own
investigations, and that it will continue to make its decisions in taking or not taking
action under this Agreement based on such investigations as it shall deem appropriate.
Each Lender hereby confirms that it does not have any objections against any agreements
entered into in accordance with this Agreement.
24.11
Instruction by Majority Lenders
In the exercise of any right or power and in relation to any matter not expressly provided
for by this Agreement, the Security Agreements, the Shareholders’ Undertaking Agreement or
any other Transaction Document the Agent may act (or refrain from acting) in accordance
with the instructions of the Majority Lenders to be given by the Lenders within ten (10)
Business Days of the Lenders having received a respective request from the Agent and will
be fully protected in so doing, except to the extent of its own gross negligence, wilful
misconduct or bad faith. In the absence of such instructions being given, or if the Agent
were not provided with security satisfactory to it, whether by way of payment in advance or
otherwise, against any liability or loss which it may incur in taking any proceedings or
action in connection with this Agreement, the Security Agreements, the Shareholders’
Undertaking Agreement or any other Transaction Document, then the Agent may act (or refrain
from acting) as it thinks fit
provided that
it shall only take action while the above
period for the issue of instructions is running if it determines that there is an urgent
need to do so.
24.12
Indemnity
Each Lender will indemnify the Agent and the Arranger on demand from and against any and
all liabilities, losses, damages, costs and expenses of any kind or
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nature whatsoever including any VAT thereon which the Agent or the Arranger may incur other
than by reason of its own gross negligence or wilful misconduct in acting in its respective
capacity as Agent or Arranger. Such indemnification will be made rateably in proportion to
each Lender’s Commitment.
24.13
Same Rights and Liabilities, Business with the Borrower
In relation to its participation in the Facility which the Agent or any Lender and/or the
Arranger will or may have from time to time, each of them will have the same rights,
liabilities and powers under this Agreement as though it had not assumed such capacity.
The Agent, the Arranger or any Lender or any of their respective associated companies may
engage in any kind of business with the Borrower or any of their respective associated
companies as if it were not the Agent, a Lender or, as the case may be, the Arranger.
24.14
Designation of New Office
Subject to Clause 24.5 (
Compliance with Legal Provisions
), the Agent may from time to time
by giving notice to the Borrower and the Lenders designate an office or branch different
from that acting at the time of giving notice, from which its duties under this Agreement
will be performed thereafter
provided that
the Borrower will not be obligated to pay any
fees, taxes or other costs or expenses to the extent the same would not have been payable
in the absence of such designation.
24.15
Resignation
The Agent may resign at any time its appointment under this Agreement by giving written
notice thereof to the other parties hereto, and the Agent may be removed from its position
under this Agreement by the Majority Lenders giving written notice to that effect to the
Borrower and the Agent. Any such resignation or removal shall take effect upon the
notification of the acceptance of the appointment by the successor in its respective
position in accordance with Clause 24.16 (
Appointment of Successor
).
24.16
Appointment of Successor
In the event of a resignation or removal of the Agent, the Majority Lenders will be
entitled to appoint a successor in the position, upon agreement of the Borrower. If no
such successor has been appointed within 30 days from the notice of resignation or notice
of removal then the Agent will be entitled, upon agreement of the Borrower, to appoint any
reputable and experienced bank or other financial institution as its successor.
24.17
Acceptance of Appointment
The acceptance of the appointment will be notified by any Lender being appointed for such
purpose by the Majority Lenders to the Agent and upon such notification the relevant
successor will succeed to and become vested with all
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rights, powers, privileges and duties of its predecessor. The resigning or removed Agent
will do all such things as may be necessary to give effect to the succession and will
thereupon be discharged from its duties and obligations under this Agreement (except for
those under Clause 24.7 (
Liability
)), but shall continue to benefit from the provisions of
this Clause 24.7 (
Liability
) in respect of any actions or omissions taken in its capacity
as Agent. Such discharges do not exempt the Borrower from any of its liabilities.
24.18
Arranger
The Arranger has no duties or responsibilities whatsoever in connection with the operation
or administration of the Facility.
24.19
Facility Office
The Agent may assume that the Facility Office or, as the case may be, each Facility Office
of each Lender is that identified in
Schedule 5
(
Lenders and Commitments
) (or, in
the case of a transferee, at the end of the Transfer Certificate to which it is a party as
transferee) until it has received from such Lender a notice designating some other office
of such Lender to replace any such Facility Office, and the Agent may act upon any such
notice until the same is superseded by a further such notice.
24.20
Missing Communication
The Agent may, if it is unable to obtain instructions or communicate with a Lender after
making reasonable attempts to do so, either refrain from acting as Agent on behalf of such
Lender or take such action on behalf of such Lender as it in its absolute discretion deems
appropriate, and shall not be liable to such Lender as a result of any such action or
inaction.
24.21
Majority Lenders’ Decisions
To the extent not otherwise stated in the Financing Documents, all amendments, consents and
waivers under the Financing Documents may be given by the Agent acting on the direction of
the Majority Lenders. Any changes in maturity, amounts payable, size of Commitments, the
definition of Majority Lenders and this Clause 24.21 will, however, require unanimity of
all Lenders.
25.
ADVISERS
25.1
The resignation or dismissal of an Adviser will be in accordance with its respective mandate.
25.2
Subject to the terms of the relevant mandate the Agent or the Arranger, as the case may be,
will, if so instructed by the Majority Lenders cancel the appointment of an Adviser.
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25.3
If the mandate of an Adviser is terminated prematurely for whatever reason, the Agent will,
with the consent of the Majority Lenders and with the consent of the Borrower, appoint a
successor at terms and conditions which are as similar to the terms and conditions on the
initial mandate as is reasonably practical, and in such a manner that the duties of the
relevant Adviser are continuously performed.
25.4
The Borrower hereby consents to the appointment of the Technical Adviser and the Wood Supply
Adviser until six (6) months after Acceptance upon the expiry of its existing mandate.
26.
FEES
26.1
Commitment Fee
From the date of signing of this Agreement the Borrower will pay to the Lenders quarterly
in arrears on each 31 March, 30 June, 30 September and 31 December on the undrawn portion
of each Tranche a commitment fee to be calculated at the following rates:
Tranche A:
0.375 % per annum
Tranche B:
0.250 % per annum
Tranche C:
0.375 % per annum
Tranche D1:
0.375 % per annum
Tranche D2:
0.375 % per annum
Tranche E:
0.375 % per annum
26.2
Arranging Fee
The Borrower will pay to the Arranger an arranging fee in accordance with the Fee Letter.
26.3
Agency Fee
The Borrower will pay to the Agent an agency fee in accordance with the Fee Letter.
26.4
Federal Guarantee Fee
The Borrower will pay to the Federal Guarantor a guarantee fee on each 1 April and 1
October. The guarantee fee will be calculated for each half year starting at these dates
at a per annum rate of 0.25 % of the amount guaranteed by the Federal Guarantor at those
dates and is payable to C&L Deutsche Revision AG, Düsseldorf, Anderkonto Bundesminister der
Finanzen, account 301 51 12 with Westdeutsche Landesbank Girozentrale, by making reference
to the State Guarantee number. An amount of 0.25 % of the maximum guaranteed amount is due
and payable by the Borrower in accordance with the grading granted by the Federal
Guarantor. The Borrower will promptly inform the Agent of any payments made pursuant to
this Clause 26.4 (
Federal Guarantee Fee
).
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26.5
State Guarantee Fee
The Borrower will pay to the State Guarantor a guarantee fee on each 1 April and 1 October.
The guarantee fee will be calculated for each half year starting at these dates at a per
annum rate of 0.25 % of the amount guaranteed by the State Guarantor at those dates and is
payable to C&L Deutsche Revision AG, Düsseldorf, Anderkonto Bundesminister der Finanzen,
account 301 51 12 with Westdeutsche Landesbank Girozentrale, by making reference to the
State Guarantee number. An amount of 0.25 % of the maximum guaranteed amount is due and
payable by the Borrower in accordance with the sliding scale granted by the State
Guarantor. The Borrower will promptly inform the Agent of any payments made pursuant to
this Clause 26.5 (
State Guarantee Fee
).
26.6
VAT
Any fee referred to in this Clause 26 (
Fees
) is exclusive of any VAT or other tax which
might be chargeable in connection with that fee.
27.
COSTS AND EXPENSES
27.1
Transaction Expenses
The Borrower will, from time to time on demand of the Agent, reimburse the Agent, the
Security Agent and the Arranger for all reasonable external costs and expenses properly
incurred (including travel and out-of-pocket expenses, notarial fees, the reasonable fees
for the Advisers and counsel to the Agent and related expenses) on a full indemnity basis
together with any VAT thereon incurred by them in connection with:
(a)
the carrying out of all due diligence enquiries and searches in connection
with the Transaction Documents;
(b)
the negotiation, preparation and execution and translation of each of the
Financing Documents and if any such party is involved in the negotiation of any
Project Contract, the relevant Project Contract;
(c)
the completion and performance of the transactions contemplated in the
Transaction Documents;
(d)
the activities of C&L pursuant to Clause 21.1.17 (
Compliance with Conditions
for State Guarantee and Government Grants
);
(e)
any initial syndication (excluding any legal counsel’s fees of any transferee
under the syndication);
(f)
the conduct of any audits; or
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(g)
any exercise or attempted exercise of any right, power or remedy under any
Financing Document or any failure to exercise any right, power or remedy except where
that failure is due to the wilful misconduct or gross negligence of, as the case may
be, the Arranger, the Agent or the Security Agent;
in each case subject to the terms of any agreement then made by the Borrower and
the Agent relating to such costs and expenses.
27.2
Preservation and Enforcement of Rights
The Borrower will, from time to time on demand of the Agent reimburse the Lenders, the
Agent, the Security Agent and the Arranger for all reasonable costs and expenses (including
reasonable legal fees) on a full indemnity basis together with any VAT thereon incurred by
them in connection with the preservation and/or enforcement of any of the rights of the
Agent, the Security Agent or the Lenders under the Financing Documents and any document
referred to in the Financing Documents.
27.3
Registration Fee
The Borrower will pay all registration and other fees to which the Financing Documents, any
other document referred to in the Financing Documents or any judgment given in connection
therewith is or at any time may be subject and shall, from time to time on demand of the
Agent, indemnify the Lenders, the Agent and the Security Agent against any liabilities,
costs, claims and expenses resulting from any failure to pay or any delay in paying any
such fees.
27.4
Amendment Costs
If the Borrower requests any amendment, waiver or consent then it will, within five (5)
Business Days of demand by the Agent, reimburse the Lenders for all reasonable external
costs and expenses (including reasonable legal fees of one law firm for the Lenders
selected by the Agent) together with any VAT thereon incurred by such Lender in responding
to or complying with such request.
27.5
Lenders’ Liabilities for Costs
If the Borrower fails to perform any of its obligations under this Clause 27 (
Costs and
Expenses
), each Lender will, in proportion to its aggregate participation in the Advances
(or, if no Advances have been made, the Facility) for the time being (or, if the Advances
have been repaid in full, immediately prior to the final repayment), indemnify the Agent
(or as the case may be the Security Agent) against any loss incurred by it as a result of
the failure and the Borrower will immediately reimburse each Lender for any payment made by
it pursuant to this Clause 27.5 (
Lenders’ Liabilities for Costs
).
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28.
INDEMNITY AND BREAKAGE COSTS
28.1
Indemnity
The Borrower undertakes to indemnify the Lenders, the Agent and the Security Agent, except
where any such costs, loss, expense or liability results from a Lender’s, the Agent’s and
the Security Agent’s gross negligence, wilful default, bad faith or the breach of any of a
Lender’s, the Agent’s and the Security Agent’s obligations under the Financing Documents
against:
28.1.1
any reasonable cost, claim, loss, expense (including reasonable legal fees) or liability
together with any VAT thereon, which it may sustain or incur as a consequence of the
occurrence of any Event of Default or any default by the Borrower in the performance of any of
the obligations expressed to be assumed by it in any of the Transaction Documents; and
28.1.2
any reasonable cost or loss it may suffer as a result of any claim or proceeding against it
relating to its involvement in the transactions contemplated hereby or any use of the proceeds
of the Facility.
28.2
Breakage Costs
28.2.1
If:
(a)
any payment is made otherwise than on the last day of an Interest Period
applicable thereto;
(b)
any other payment is made otherwise than on the due date therefore;
(c)
any Advance requested cannot be made because the Borrower has failed to
fulfil a condition precedent; or
(d)
the Borrower refuses to accept a requested Advance,
then the Borrower will pay to the Agent for the account of each Lender to which such
payment is made or who participated in the Advance requested, such additional amount as the
relevant Lender may reasonably certify as being necessary to compensate it for any loss
(excluding however the Margin) or expense incurred on account of funds borrowed, funds
contracted for or utilised to fund its participation in the amount so paid or the Advance
so requested, which it has suffered or incurred as the result of such amount not having
been paid on the last day of such Interest Period or on its due date or the Advance not
having been disbursed or accepted, as the case may be.
28.2.2
The Borrower will pay to the Agent for the account of the Hedging Counterparty to which such
payment is made, such additional amount as the Hedging Counterparty may reasonably certify as
being necessary to compensate it for any
94
loss or expense arising as a result of the termination, in whole or in part, of any Hedging
Agreement entered into in relation to any amounts cancelled or prepaid hereunder.
29.
SET-OFF
Each Lender may set off any matured obligation owed by the Borrower under this Agreement
against any obligation owed by the Lender to the Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the obligations are in
different currencies, the Lender may convert either obligation at a market rate of exchange
in its usual course of business for the purpose of set-off.
30.
PRO-RATA SHARING
30.1
If at any time the proportion received or recovered by any Lender by way of set-off or
otherwise (other than through the Agent in accordance with Clause 9 (
Payments
)) in respect of
its portion of any amounts due from the Borrower to the Lenders under this Agreement is
greater than the proportion thereof which the Lender would have received through the Agent if
distributed in accordance with Clause 9 (
Payments
) (the difference between the amount received
or recovered (after deduction of any costs incurred by the Lender in connection with such
receipt or recovery) by the Lender and the amount which the Lender would have received or
recovered had the recovery been received through the Agent if distributed in accordance with
Clause 9 (
Payments
) hereinafter called the “
Excess Amount
”), then:
30.1.1
such Lender will promptly notify the Agent and pay to the Agent an amount equal to the
Excess Amount within three (3) Business Days of such notification;
30.1.2
the Agent will account for such payment to the Lenders (excluding the Lender having received
the Excess Amount) as if it were a payment by the Borrower on account of the sum owed to the
Lenders under this Agreement; and
30.1.3
the liability of the Borrower to the Lenders will be adjusted in accordance with the
distribution of the Excess Amount among the Lenders,
provided that:
(a)
if the Excess Amount or any part thereof thereafter has to be repaid to the
Borrower by the Lender having received the Excess Amount, each of the Lenders will
repay to the Agent for the account of such Lender such proportion of the amount
received by it out of the Excess Amount (plus any interest legally demanded by the
Borrower in respect of such
95
proportion) as corresponds to the proportion of the Excess Amount which has to be
repaid by the relevant Lender to the Borrower; and
(b)
sums recovered as a result of litigation started by a Lender to enforce its
rights under this Agreement and resulting in an Excess Amount will only be shared with
all Lenders other than Lenders which were aware of such litigation and did not join in
such litigation without being legally prevented from doing so.
31.
ASSIGNMENTS AND TRANSFERS
31.1
Assignments and Transfers by the Borrower
The Borrower is not entitled to assign or transfer all or any of its rights, benefits and
obligations under the Financing Documents.
31.2
Assignments and Transfers by the Lenders
31.2.1
Each of the Lenders (a “
Transferor
”) may at any time assign all its rights and benefits
under this Agreement or transfer its rights and obligations under this Agreement in whole or
in part to members of the European Central Bank System, banks, financial service providers,
financial institutions, insurance companies, institutional investors, funds, pension funds,
public pension schemes and similar institutions (a “
Transferee
”) subject to Clause 31.2.2 and
any such transfer will comprise a
pro rata
share of the entirety of the Transferor’s rights
and obligations in relation to this Agreement. Participations in any disbursement of an
Advance may not be transferred independently from corresponding participations in Commitments.
31.2.2 A transfer will only be permissible:
(a)
if the amount of the Commitment and/or Advance, as the case may be, under the
Facilities which is transferred is not less than EUR 10 million applied rateably
across the Tranches and in any particular Tranche rateably between the Transferor’s
share in each outstanding Advance thereunder and its undrawn Commitment in relation
thereto;
(b)
with the consent of the Borrower, such consent not to be unreasonably
withheld
provided that
consent will not be required if such transfer is made to an
affiliate (belonging to the same group of companies within the meaning of § 18 AktG)
of a Lender or to another Lender provided there are no adverse tax or other detriments
(e.g. Germany’s thin capitalisation rules, § 8a KStG) to the Borrower; and
(c)
following such transfer the circumstances envisaged in Clauses 12
(
Illegality
) or 13 (
Increased Costs
) would neither apply, nor reasonably
96
be expected to apply and the Borrower would not have, and would not reasonably be
expected to have, any obligations under Clause 14.1.2 (
Taxes
).
31.2.3
A transfer will only become effective upon execution by the Transferor and the Transferee
and countersignature by the Agent of a transfer certificate in the form of
Schedule 14
(
Transfer Certificate
) (the “
Transfer Certificate
”) or, if later, at the time specified in the
Transfer Certificate and the payment by the Transferee of a transfer fee of EUR 1,000. Upon
the transfer becoming effective, and for such part of the Transferor’s rights and obligations,
as is transferred, the Transferor shall be released from its obligations under the Financing
Documents and all other related documentation, and its rights and obligations under such
documents shall transfer to and vest in the Transferee
provided that
it will be the sole
responsibility of the Transferee to ensure that any additional action which may be required
for securing the valid transfer to it of any rights in respect of Security is taken.
31.2.4
The Transferor will give prompt notice of any proposed transfer to the Agent who will
promptly inform the Borrower.
31.2.5
The Agent will promptly inform the Borrower of any perfected transfer.
31.2.6
The Borrower will undertake all reasonable efforts to assist the Arranger in all acts in
connection with a syndication pursuant to this Clause 31.2 (
Assignments and Transfers by the
Lenders
).
31.2.7
The Guarantors must consent to any transfer by the Lenders
provided that
consent shall not
be required if the transfer is to a credit institution or branch of a credit institution
within the European Union and the Transferor assumes the Transferees’ rights and obligations
under the Financing Documents on a fiduciary basis.
31.3
Disclosure of Information
The Agent may disclose to any actual or potential assignee, participant or Transferee or to
any person who may otherwise enter into contractual relations with such bank or financial
institution in relation to any of the Financing Documents such information about the
Borrower or such details of the Project Contracts as the Agent considers appropriate
provided that
such person has executed and delivered to the Borrower a confidentiality
undertaking reasonably satisfactory to the Borrower. The Agent will not in any way be
liable or responsible for such information not being kept confidential by such proposed
assignee, participant or Transferee or other person if a reasonable confidentiality
undertaking was obtained prior to such disclosure.
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32.
SUB-PARTICIPATIONS
32.1
Each Transferor may, in accordance with standard banking practices, grant at any time
sub-participations with respect to all or any part of its rights and claims under this
Agreement to Transferees and may make dispositions with respect to such rights and claims.
32.2
Clauses 31.2.4, 31.2.7 (
Assignment and Transfers by the Lenders
) and 31.3 (
Disclosure of
Information
) apply
mutatis mutandis
.
33.
CALCULATIONS AND EVIDENCE OF DEBT
33.1
Basis of Accrual
Unless otherwise provided, interest and Fees payable per annum will accrue from day to day
and be calculated for the actual number of days elapsed and on the basis of a year of 360
days.
33.2
Prima Facie Evidence
33.2.1
In any legal action or proceeding arising out of or in connection with this Agreement, the
entries made in the accounts maintained with the Agent and/or the Lenders are, in the absence
of manifest error,
prima facie
evidence of the existence and amounts of the specified
obligations of the Borrowers.
33.2.2
A certificate of and determination by the Agent, Security Agent or a Lender as to the
interest rate and amounts owed under the Financing Documents are, in the absence of manifest
error,
prima facie
evidence of the existence and amounts of the specified obligations of the
Borrower.
34.
NON-APPLICABILITY OF § 181 BGB
§ 181 BGB does not apply to any authorisation the Borrower gives to the Arranger, Agent,
Security Agent and Lenders.
35.
FORM REQUIREMENTS AND AMENDMENTS
35.1
No oral agreements (
Nebenabreden
) have been made.
35.2
Any modification or amendment of this Agreement, including this Clause, and any waiver by the
Agent or any of the Lenders of its rights under this Agreement, must be made in writing.
35.3
Any modification or amendment of this Agreement needs the Guarantors’ consent.
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36.
CONDITIONS OF THE STATE GUARANTEE
The conditions of the State Guarantee as set out in
Schedule 10
(
State Guarantee
)
are incorporated in this Agreement, even if they are not explicitly provided for in this
Agreement. In the case of any discrepancies between the conditions of the State Guarantee
and the terms of this Agreement, the former will apply.
37.
REMEDIES AND WAIVERS, CUMULATIVE RIGHTS, PARTIAL INVALIDITY
37.1
Remedies and Waiver
No failure to exercise, nor any delay in exercising, on the part of the Lenders, any right
or remedy under any Financing Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy prevent any further or other exercise
thereof or the exercise of any other right or remedy.
37.2
Cumulative Rights
The rights and remedies provided in the Financing Documents are cumulative and not
exclusive of any other rights and remedies provided in the Financing Documents or by law.
37.3
Partial Invalidity
Should any provision of this Agreement be invalid or unenforceable, in whole or in part, or
should any provision later become invalid or unenforceable, this shall not affect the
validity of the remaining provisions of this Agreement. In lieu of the invalid or
unenforceable provision another reasonable provision shall apply, which as far as legally
possible comes as close as possible to the intention of the contracting parties, or to what
would have been their intention, in correspondence with the spirit and the purpose of this
Agreement, had the parties upon entering into this Agreement taken into consideration the
invalidity or unenforceability of the respective provision. The same shall apply
mutatis
mutandis
to fill possible gaps in this Agreement.
38.
NOTICES
38.1
Communications in Writing
Each communication to be made by the parties hereto under this Agreement or any other
Financing Document that does not contain a provision comparable to this Clause 38.1 will be
made in writing and, unless otherwise stated, will be made by fax, letter or e-mail. Each
communication will be in German or English.
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38.2
Addresses
Any communication or document to be made or delivered by the parties hereto pursuant to
this Agreement or to any other Financing Document that does not contain a provision
comparable to this Clause 38.2 will (unless the recipient of such communication or document
has, by fifteen (15) days’ written notice to the Agent, specified another address or fax
number) be made or delivered to the address set out below:
(a)
to the Borrower:
Zellstoff Stendal GmbH
Goldbecker Strasse 1
D – 39596 Arneburg
Bayerische Hypo- und Vereinsbank AG
Am Tucherpark 1 (MCS3IN)
D – 80538 München
attn.: Claudia Schmidt
Tel.: +49 – 89 378 46740
Fax: +49 – 89 378 41518
(c)
to the Agent and/or Security Agent:
Bayerische Hypo- und Vereinsbank AG
Am Tucherpark 1 (MCS4LA)
D – 80538 München
attn.: Loans Agency
Tel.: +49 –89 – 378 25460
Fax: +49 –89 378 41517
(d)
to the Lenders:
to the contact addresses mentioned in
Schedule 5
(
Lenders and Commitments
).
100
38.2.2
Communications or documents addressed to C&L in connection with this Agreement or any other
Financing Document, not containing a provision corresponding to this Clause 38.2, shall be
addressed to it at:
C&L Deutsche Revision AG
Moskauer Strasse 19
D-40227 Düsseldorf
Any communication or document to be made or delivered by one person to another pursuant to
the Financing Documents will (if by way of fax) be deemed to have been received when
transmission has been completed and evidenced by a positive transmission statement (and, if
such date is not a Business Day or if transmission is completed after 5.30 p.m. in the
place of receipt on a Business Day, will be deemed to have been received on the next
Business Day) or (if by way of letter) deemed to have been delivered when left at that
address or, as the case may be, ten days after being deposited in the post postage prepaid
in an envelope addressed to it at that address,
provided that
any communication or document
to be made or delivered to the Agent will be effective only when received by its agency
division and then only if the same is expressly marked for the attention of the department
or officer identified with the Agent’s signature below (or such other department or officer
as the Agent shall from time to time specify for this purpose).
39.
GOVERNING LAW
This Agreement will be governed by, and construed in accordance with, the laws of the
Federal Republic of Germany.
40.
JURISDICTION
The exclusive place of jurisdiction to hear and determine any suit, action or proceeding,
and to settle any disputes which may arise out of or in connection with this Agreement is
Munich. The Lenders, the Agent and the Security Agent may, however, also commence
proceedings before any other court in which assets of the Borrower are located. Mandatory
places of jurisdiction remain unaffected.
101
41.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which taken together
constitute one and the same instrument.
42.
CONFIRMATION PURSUANT TO SECTION 8 OF THE GERMAN MONEY LAUNDERING ACT (
GELDWäSCHEGESETZ
)
The Borrower expressly confirms to the Finance Parties, that all funds made or to be made
available to it under this Agreement have been drawn for its own account and that it is the
economic beneficiary within the meaning of Section 8 Money Laundering Act
(
Geldwäschegesetz
).
102
SCHEDULE 1
Drawdown
Request
[Borrower’s Letterhead]
To:
Bayerische Hypo- und Vereinsbank AG
Attn: Loans Agency
Telefax: +49 – 89 – 378 – 41517
Date: [ ]
We refer to the EUR 827,950,000 facility agreement dated August 26, 2002 whereby a facility has
been made available to Stendal Zellstoff GmbH by [a group of banks] on whose behalf Bayerische
Hypo- und Vereinsbank AG is acting as agent in connection therewith (such agreement as from time to
time amended being referred to herein as the “
Facility Agreement
”). Terms defined in the Facility
Agreement shall have the same meanings herein unless specified otherwise herein.
Pursuant to Clause 3.1 of the Facility Agreement, we hereby request the following drawdown under
o
Tranche A
o
Tranche B:
o
Sub Tranche B1
o
Sub Tranche B2
o
Sub Tranche B3
o
Sub Tranche B4
o
Tranche C
o
Tranche D1
o
Tranche D2
o
Tranche E
of the Facility Agreement:
103
Draw down Date:
Interest Period:
Amount of Advance: EUR
The Advance will be used for the following specific purposes:
Tranche A:
[Project Construction Costs, Development Costs], in
particular
An amount of EUR [
l
] hereof are Post-Acceptance Costs
regarding Project Construction Costs.
Tranche B[1, 2, 3]:
[Financing Costs, start-up costs as well as construction
costs and development costs which are not financed under
Tranche A], in particular
Tranche B4:
Working Capital Costs of Borrower, in particular
An amount of EUR [
l
] hereof are Post-Acceptance Costs.
Tranche C:
Funding of the Debt Service Reserve Account
Tranche D1:
Financing of Project Construction Costs, in particular
Tranche D2:
Financing of Cost Overruns/shortfall in Government Grants
post Acceptance/prepayment of Tranche A for EU-Equity Test,
in particular
Tranche E:
[Bridge Financing of costs in relation to the Project for
which Government Grants are to be received, recoverable VAT
payments on Project Construction Costs], in particular
104
The amount of the Advance shall be credited to the Disbursement Account.
We hereby confirm that
1.
the representations and warranties pursuant to Clause 16.1 (
Representation and Warranties
) of
the Facility Agreement are correct as at the date hereof and will be correct immediately after
the Advance is made;
2.
no Event of Default or Potential Event of Default as set out in Article 21 of the Facility
Agreement has occurred and is continuing or might result from the making of the Advance;
3.
no Material Adverse Effect has occurred and is continuing;
4.
Assurance of Overall Financing is still fulfilled;
5.
the drawdown conditions for the requested Advance have been met [unless otherwise waived
pursuant to Clause 3.3.2 (
Drawdown Conditions
) of the Facility Agreement].
Zellstoff Stendal GmbH
by:
105
SCHEDULE 2
Conditions for the First Drawdown
The following documentation and information in form and substance satisfactory to the Agent has
been received by the Agent:
1.
A certified and up-to-date copy of the commercial register extract and the articles of
association of the Borrower, RWE-IN, ALTMARK INDUSTRIEPARK AG, MFC IH, Mercer International
and SP Holding.
2.
A copy of the corporate authorisations and/or shareholder resolutions of the Borrower
relating to the execution, delivery and performance of all Financing Documents to which it is
a party.
3.
A certified copy of the Secretary Certificates of the
Corporate Secretary of Mercer
International
:
(a)
authorising the execution, delivery and performance of all Financing
Documents to which Mercer International is a party as approved by Mercer
International’s board of trustees; and
(b)
setting out the names and signatures of the authorised signatories for the
signing of such documents duly certified to be true and correct.
4.
Specimen signatures of the persons authorised to sign the Financing Documents and notices
thereunder.
5.
Original executed copies of the Transaction Documents, in each case, in full force and effect
(with respect to the Hedging Agreements, however, only the agreement for the interest rate
swaps) other than:
(a)
in the case of the Transaction Documents, which will be concluded or be in
full force and effect upon first drawdown hereunder and
(b)
in the case of the EPC Contract, which will be in full force and effect upon
the payment of the down payment under the EPC Contract,
together, in each case, with any necessary notices of assignment and acknowledgements
thereof in form and substance acceptable to the Agent, registrations (save for the land
charges to be created) etc in each case, in full force and effect.
6.
Evidence that the Shareholders have paid into the Disbursement Account the following funds:
106
(a)
EUR 14,744,354 in the form of equity in respect of a subscription for Share
Capital; and
(b)
EUR 37,520,412 million in the form of Shareholder Loans,
and have made Shareholder Loans in the amount of EUR 17,735,234.
7.
Evidence that the Government Grants for the Project as contemplated in the Investment and
Financing Plan in an amount of not less than EUR 274,7 million are available of which EUR
109,2 will be given as direct grants (
GA-Zuschuss (Investment Incentives
)) by the State of
Sachsen-Anhalt and the Agent is satisfied that EUR 165,5 million as
Investitionszulagen
(Tax
Grants) by the Federal Republic of Germany will be granted, both approved by EU notification,
for the Project in favour of the Borrower.
8.
A copy of the EU-Decision the contents of which is satisfactory to the Agent and its legal
advisors.
9.
The audited Financial Model and the agreed Base Case and the model auditors’ report thereon
as well as the Investment and Financing Plan.
10.
Provision of the Amortisation Schedule.
11.
The Project Budget in accordance with the Financial Model setting out all costs over the
Construction Phase.
12.
Execution by the parties thereto of the letter setting out the Hedging Strategy.
13.
Uncontested (
nicht angefochten
) official approval of the subsidies
(
Fördermittelzuwendungsbescheid
) to be granted by the State of Sachsen-Anhalt to the city of
Arneburg with respect to infrastructure measures.
14.
Evidence from RWE-IN satisfactory to the Agent that such part of the Owner’s Scope in
relation to the EPC Contract required to have been completed prior to first drawdown has been
fulfilled.
15.
All Authorisations required for the Project and the performance of the Borrower’s obligations
under the Transaction Documents required as of the first Drawdown Date as contemplated by
Clause 16.1.6 (
Authorisations
) have been obtained.
16.
Written confirmation by the Borrower that the official approval of the plan
(
Planfeststellungsbeschluß
) has not been contested (
nicht angefochten
) and all Authorisations
required for the Project and the performance of the Borrower’s obligations under the
Transaction Documents required as of the first Drawdown Date as contemplated by Clause 16.1.6
(
Authorisations
) have been obtained. The
107
Borrower will further present copies of the official approval of the plan
(
Planfeststellungsbeschluß
) and the other Authorisations required for the Project and the
performance of the Borrower’s obligations under the Transaction Documents required as of
the first Drawdown Date as contemplated by Clause 16.1.6 (
Authorisations
).
17.
Written confirmation from the Technical Adviser and the Wood Supply Adviser and an auditor
acceptable to Agent that the Development Costs are reasonable.
18.
Delivery of final reports from the Technical Adviser and the Wood Supply Adviser and the Pulp
Market Adviser satisfactory to the Agent.
19.
Delivery of plan concepts prepared by the Borrower regarding wood supply, logistics (and
sales).
20.
Presentation of wood supply Letters of Intent (LOI) covering, together with own procured
volumes, 1.25x the required wood volume of 3 Mio. m
3
.
21.
Report by the Insurance Adviser containing,
inter alia
, the confirmation that the insurances
entered into are satisfactory.
22.
Brokers’ letter(s) of undertaking, insurance cover notes and agreed draft policy wordings
satisfactory to the Insurance Advisor.
23.
Presentation of clearance letter by the German Federal Cartel Office (
Bundeskartellamt
)
concerning a positive decision on the capital increase in the Borrower.
24.
The most recent audited financial statements of the Borrower.
25.
The most recent audited accounts of each of the Sponsors and Shareholders.
26.
Written confirmation by Kvaerner plc that, vis-à-vis the Borrower, it only has one claim in
the amount of EUR 478,687, by Thyssen Rheinstahl Technik Projektgesellschaft mbH that it only
has claims in the amount of EUR 2,648,000 (compensation payment) and EUR 570,646 for
ancillary costs for the provision of funds by Thyssen Rheinstahl Technik GmbH and its
successor Thyssen Rheinstahl Technik Projektgesellschaft mbH to the Borrower in connection
with the purchase of the Site.
27.
Written confirmation by RWE-IN that the profit loss transfer agreement between RWE AG and RWE
Solutions AG dated 27/29 June 2000 is in full force and effect at Financial Close.
28.
Evidence that all real estate necessary for the construction of the Project has been acquired
and is free of any right of third parties (save under that certain site
108
lease agreement dated 16 May 2002 and made between the Borrower and ALTMARK INDUSTRIEPARK
AG and except for Permitted Encumbrances) which may interfere with the Project as
contemplated in the Financing Documents.
29.
Delivery of the confirmation by the local office of archeology (
Landesamt für Archäologie
)
declaring that the excavations on locations 1 to 4 as set out in
Schedule 17
(
Archeological Sites
) have been finalised.
30.
All Advisers fees and amounts payable hereunder have been paid in full or will be paid in
full out of the first Advance.
31.
Receipt by the Agent of evidence that the proceeds of the first Advance will be used,
inter
alia
, to repay indebtedness of the Borrower to Dresdner Bank AG; to Kvaerner plc in the amount
of EUR 478,687; to Thyssen Rheinstahl Technik Projektgesellschaft mbH in the amount of EUR
2,648,000; to ALTMARK INDUSTRIEPARK AG in the amount of EUR 546,794; to RWE-IN in the amount
of EUR 1,590,899; and to Thyssen Rheinstahl Technik Projektgesellschaft mbH in the amount of
EUR 570,646 for ancillary costs for the provision of funds by ALTMARK INDUSTRIEPARK AG,
RWE-IN and Thyssen Rheinstahl Technik Projektgesellschaft to the Borrower in connection with
the purchase of the Site; and for payment of the second instalment of the purchase price to
ALTMARK INDUSTRIEPARK AG for the Site.
32.
The Lenders are satisfied in all respects with the construction and operating arrangements
for the Project.
33.
Evidence satisfactory to the Agent that SP Holding (on a fully diluted basis) holds at least
63.58 % of the voting rights in the Borrower and has control over the board of directors of
the Borrower and that SP Holding is a wholly owned subsidiary of Mercer International.
34.
A legal opinion from Cleary, Gottlieb, Steen & Hamilton with respect to the obligations of
Mercer International, SP Holding, ALTMARK INDUSTRIEPARK AG, MFC IH and RWE-IN under the
Transaction Documents to which it is a party.
35.
A legal opinion of the Borrower’s legal counsel with respect to the EU-Decision having been
validly issued together with a report analysing the risks of an appeal from this decision.
36.
A legal opinion of the Agent’s German legal counsel regarding the transaction in form and
substance satisfactory to the Agent.
109
SCHEDULE 3
General Drawdown Conditions
1.
The Agent has received a duly completed irrevocable Drawdown Request not later than 11:00
a.m. on the fifth (5th) Business Day before the Drawdown Date proposed in the Drawdown
Request.
2.
The representations and warranties continue to be true and correct.
3.
No Event of Default or Potential Event of Default has occurred and remains uncured or
unwaived or would occur as a result of the making of the Advance to be drawn down.
4.
Neither of the events mentioned in Clauses 5.1.1 and 5.1.2 has occurred.
5.
All terms and conditions of the State Guarantee are met, no event has occurred, as a result
of which C&L refuses to allow disbursements under this Agreement and the State Guarantee
continues to be valid and in full force and effect.
6.
Certificate by the Insurance Adviser stating that the Project is sufficiently insured in
accordance with the construction progress. Such certificate is not needed if the respective
insurance company is obliged to inform the Lenders promptly of a termination of any insurance.
7.
The Borrower has:
(a)
paid all due and unpaid fees and expenses due under any of the Financing
Documents; or
(b)
instructed the Lenders to deduct the amount of such fees and expenses from
the amount of the Advance to be disbursed to the Borrower and the amount of the
Advance is sufficient to satisfy all such outstanding fees and expenses.
110
SCHEDULE 4
Conditions Subsequent
(A) Wood and Logistic related Issues
6 months after
first drawdown
Employment of a wood supply manager satisfactory to
the Agent
10 months after
first drawdown
Management, in particular a purchasing director and
a harvesting manager, in place satisfactory to the
Agent
10 months after
first drawdown
The wood supply company and the logistic company
have been incorporated
10 months after
first drawdown
Final company agreement of the wood supply company
and the logistic company and final agreements to be
entered into between the Borrower and the Permitted
Subsidiaries in place and heads of terms regarding
the agreements to be entered into between the
Borrower and the Permitted Subsidiaries in place
5 months before
expected Start-up
Presentation of final agreements, including prices
and volume, for 45 % of the required first year
volume of about 2.2 mio. m
3
of round wood and chips
volumes with chips making up at least 20 % of the
contracted volume
3 months before
expected Start-up
All staff required for the Start-up with regard to
the wood supply company and the logistic company has
been contracted
2 months before
expected Start-up
Wood inventory of 230.000 m
3
at the mill or road side
2 months before
expected Start-up
Presentation of final agreements, including prices
and volume, for 55 % in aggregate of the required
first year volume of about 2.2 mio. m
3
of round wood
and chips volumes with chips making up at least 20 %
of the contracted volume
(B) Pulp production related Issues
4 months after
first drawdown
Employment of a Pulp Mill manager satisfactory to the Agent
4 months after
first drawdown
Technical plans regarding railroad and natural gas
connection in place
111
10 months after
first drawdown
Presentation of final personnel recruitment and training plan
11 months after
first drawdown
Employment of senior production, sales and maintenance
management
3 months before
expected Start-up
Presentation of a detailed production start-up and operation
plan showing that the whole corporate structure will be in
place for operation
112
SCHEDULE 5
Lenders and Commitments
Lender
Commitment in Euro
Bayerische Hypo- und Vereinsbank AG
827,950,000
Am Tucherpark 1 (MCS3IN)
D – 80538 München
attn.: Claudia Schmidt
Tel.: +49 –89 – 378 46740
Fax: +49 –89 378 41518
Total Commitments
827,950,000
113
SCHEDULE 6
Mandatory Cost Formulae
1.
The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of
compliance with (a) the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of their
functions) or (b) the requirements of the European Central Bank.
2.
On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall
calculate, as a percentage rate, a rate (the “
Additional Cost Rate
”) for each Lender, in
accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the
Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to
the percentage participation of each Lender in the relevant Advance) and will be expressed as
a percentage rate per annum.
3.
The Additional Cost Rate for any Lender lending from a Facility Office in a Participating
Member State will be the percentage notified by that Lender to the Agent. This percentage
will be certified by that Lender in its notice to the Agent to be its reasonable determination
of the cost (expressed as a percentage of that Lender’s participation in all Advances made
from that Facility Office) of complying in respect of Advances made from that Facility Office.
4.
The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom
will be calculated by the Agent in accordance with the formula set out below (expressed as a
percentage rate per annum):
A
x 0.01
% per annum.
300
Where A is the rate of charge payable by that Lender to the Financial Services Authority
pursuant to the Fees Rules (calculated for this purpose by the Agent as being the average
of the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit
acceptors, ignoring any minimum fee or zero related fee required pursuant to the Fees
Rules) and expressed in pounds per £1,000,000 of the Tariff Base of that Lender.
5.
For the purposes of this Schedule:
(a)
“
Fee Rules
” means the Banking Supervision (Fees) Regulations 2000 or such
other law as may be in force from time to time in respect of the payment of fees for
banking supervision;
114
(b)
“
Participating Member State
” means any member state of the European
Communities that adopts or has adopted the euro as its lawful currency in accordance
with legislation of the European Union relating to European Monetary Union;
(c)
“
Special Deposits
” has the meanings given to it from time to time under or
pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of
England;
(d)
“
Tariff Base
” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules; and
(e)
the resulting figure will be rounded to four decimal places.
6.
The Agent may from time to time, after consultation with the Borrower and the Lenders,
determine and notify to all parties hereto any amendments or variations which are required to
be made to this Schedule in order to comply with any change in law, regulation or any
requirements from time to time imposed by the Bank of England, the Financial Services
Authority and/or the European Central Bank (or, in any case, any other authority which
replaces all or any of their functions) and any such determination shall, in the absence of
manifest error, be conclusive and binding on all the parties hereto.
7.
Each Lender shall supply any information required by the Agent for the purpose of calculating
its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the
following information in writing on or prior to the date on which it becomes a Lender:
(a)
its jurisdiction of incorporation and the jurisdiction of its Facility
Office; and
(b)
any other information that the Agent may reasonably require for such purpose.
Each Lender shall promptly notify the Agent in writing of any change to the information
provided by it pursuant to this paragraph.
8.
The percentages or rates of charge of each Lender for the purpose of A above shall be
determined b the Agent based upon the information supplied to it pursuant to paragraph 7 above
and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender’s
obligations in relation to cash ratio deposits, Special Deposits and the Fee Rules are the
same as those of a typical bank from its jurisdiction of incorporation with a Facility Office
in the same jurisdiction as its Facility Office.
115
9.
The Agent shall have no liability to any person if such determination results in an
Additional Cost Rate which over or under compensates any Lender and shall be entitled to
assume that the information provided by any Lender pursuant to paragraphs 3 and 7 above is
true and correct in all respects.
10.
The Agent shall distribute the additional amounts received as a result of the Mandatory Cost
to the Lenders on the basis of the Additional Cost Rate for each Lender based on the
information provided by each Lender pursuant to paragraphs 3 and 7 above.
11.
Any determination by the Agent pursuant to this Schedule in relation to the formula, the
Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the
absence of manifest error, be conclusive and binding on all of the parties to this Agreement.
116
SCHEDULE 7
Form of Account Pledge Agreement
117
ZELLSTOFF STENDAL GMBH
as Borrower and Pledgor
and
BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHAFT
as Original Pledgee and Security Agent
ACCOUNT PLEDGE AGREEMENT
118
CONTENTS
119
THIS ACCOUNT PLEDGE AGREEMENT
is made on the [Date] (the “
Agreement
”)
BETWEEN:
(1)
ZELLSTOFF STENDAL GMBH
, a limited liability company incorporated, organised and validly
existing under the laws of the Federal Republic of Germany, having its office at Goldbecker
Strasse 1, 39596 Arneburg, Federal Republic of Germany and registered in the commercial
register (
Amtsgericht
) of Stendal, number HRB 2446 (the “
Borrower
” and “
Pledgor
”);
(2)
BAYERISCHE HYPO- UND VEREINSBANK AG
, a stock corporation incorporated, organised and validly
existing under the laws of the Federal Republic of Germany, having its office at Am Tucherpark
16, 80538 München, Federal Republic of Germany and registered in the commercial register
(
Amtsgericht
) of Munich, number HRB 42148 (the “
Original Pledgee
” and “
Security Agent
”).
WHEREAS:
(A)
The Lenders and the Pledgor have concluded a facility agreement dated [·] August 2002 in the
amount of EUR 827,950,000 for the purpose of the design, development, construction and
operation of a pulp mill located in Arneburg, near Stendal in Sachsen-Anhalt (the “
Facility
Agreement
”).
(B)
Pursuant to the Facility Agreement the Pledgor and its shareholders are obliged to grant
certain security for the purpose of securing the obligations under the Financing Documents in
accordance with the terms and conditions therein.
NOW, IT IS HEREBY AGREED
as follows:
1.
DEFINITIONS
1.1
Unless otherwise stated in this Agreement or required by the context the definitions and
principles of interpretation in the Facility Agreement are to be used in this Agreement.
1.2
Definitions:
“
Accounts
”: The bank accounts listed in Schedule 1 hereto and “
Account
” means any of them.
“
Account Bank
”: A bank administering any of the Accounts.
120
“
Advance
”: A principal sum drawn by the Borrower under the Facility Agreement or, depending
on the context, the principal sum outstanding as a result of such drawdown.
“
Agent
”: Bayerische Hypo- und Vereinsbank AG or its successor.
“
ALTMARK INDUSTRIEPARK AG
”: Altmark Industriepark AG, a company incorporated under the laws
of the Federal Republic of Germany.
“
Arranger
”: Bayerische Hypo- und Vereinsbank AG and its successors.
“
Derivative Transaction
”: Any swap agreement, option agreement, futures contract, forward
contract or similar arrangement with respect to interest rates, currencies or commodity
prices.
“
EPC Contract
”: The engineering, procurement and construction agreement dated 26 August
2002 between REW-IN and the Borrower.
“
EPC-Contractor
”: RWE-IN.
“
EU-Decision
”: The decision by the EU-Commission dated 19 June 2002 in respect of the State
Guarantee and the Government Grants.
“
Event of Default
”: Any of the events mentioned in Clause
Error! Reference source not
found.
(
Events of Default
) of the Facility Agreement.
“
Facility
”: The facility comprising Tranche A, Tranche B, Tranche C, Tranche D1, Tranche D2
and Tranche E pursuant to Clause
Error! Reference source not found.
(
Granting of the
Facility
) of the Facility Agreement.
“
Facility Office
”: The office or offices notified by a Lender to the Agent in writing on or
before the date it becomes a Lender (or, following that date, by not less than (5) five
days’ written notice) as the office or offices through which it will perform its
obligations under the Facility Agreement.
“
Fee Letter
”: The fee letter by Bayerische Hypo- und Vereinsbank AG and addressed to the
Borrower dated on or about the date hereof.
“
Financing Documents
”: The Facility Agreement, any agreement entered into with any
Permitted Subsidiary in connection with the financing of the wood supply or logistics
aspects of the Project, the Hedging Agreements, the Security Agreements, the Shareholders’
Undertaking Agreement, the Step-In-Rights Agreement between SP Holding, RWE-In, MFC IH and
the agent on or about the date hereof, the RWE Solutions AG Guarantee, any agreement
regarding Shareholder Loans and the corresponding subordination declarations, the Stand-By
Equity Security, the Fee Letter, any waiver requests, waivers and other
121
binding notifications, the Direct Agreement, the Parent Company Guarantee, the advance
payment, performance and defects liability guarantee issued in favour of the Borrower by a
first class bank in respect of the performance of the EPC Contractor under the
EPC-Contract, the State Guarantee and any other document in relation to the financing of
the Project.
“
Future Pledgees
”: any entity which may become a pledgee hereunder by way of (i) transfer
of the Pledges by operation of law following the transfer or assignment (including by way
of novation or assumption (
Vertragsübernahme
)) of any part of the Secured Obligations (as
defined hereinafter) from the Original Pledgee or any Future Pledgee to such future pledgee
and/or (ii) accession to this Agreement pursuant to Clause 2.6 hereof as pledgee.
“
Government Grants
”: The grants which will be given as direct grants (
GA-Zuschuss
(investment incentives)) by the State of Sachsen-Anhalt and as
Investitionszulagen
(tax
grants) by the Federal Republic of Germany, both as approved by the EU-Decision, for the
Project in favour of the Borrower.
“
Hedging Agreements
”: The Hedging Agreement dated 26 August 2002 between the Hedging
Counterparts and the Borrower in relation to any swap agreements, cap agreements, collar
agreements, future agreements, forward agreements and similar agreements with respect to
interest rates, currencies or commodity prices as well as any single transactions to be
concluded by the Hedging Agreement.
“
Hedging Counterparty
”: Bayerische Hypo- und Vereinsbank AG.
“
Hedging Strategy
”: The hedging strategy in relation to the Facility to be agreed in
writing between the Borrower and the Arranger, as amended from time to time, for the
hedging of the interest, currency and commodity price risks of the Pledgor.
“
Lenders
”: The lenders (including the Original Lender), acting through their respective
Facility Offices, and their successors, transferees and assignees, as permitted under the
Facility Agreement.
“
Mercer International
”: Mercer International Inc., a Massachussetts trust incorporated und
the laws of the state of Washington, United States of America.
“
MFC IH
”: MFC Industrial Holdings AG.
“
Original Lender
”: Bayerische Hypo- und Vereinsbank AG.
122
“
Parent Company Guarantee
”: The parent company guarantee to be granted by RWE Solutions AG
in favour of the Borrower in respect of RWE-IN’s obligations under the EPC Contract.
“
Permitted Subsidiaries
”: The two support holding companies, the wood supply company and
the logistic company.
“
Pledgees
”: the Original Pledgee and the Future Pledgees.
“
Project
”: The design, development, financing, construction and operation of a 552,000
tonnes per annum bleached softwood kraft pulp mill located in Arneburg, near Stendal in
Sachsen-Anhalt, Federal Republic of Germany.
“
RWE Solutions AG Guarantee
”: The guarantee given by RWE Solutions AG in respect of
RWE-IN’s obligations under the Shareholders’ Undertaking Agreement.
“
RWE-IN
”: RWE Industrie-Lösungen GmbH, a limited liability company incorporated under the
laws of the Federal Republic of Germany.
“
Secured Creditors
”: The Lenders and the Hedging Counterparty.
“
Security Agreements
”: The security agreements listed in
Schedule 2
(
Security
Agreements
), the Security Pooling Agreement and any other agreement pursuant to which the
Borrower, the Shareholders, the Sponsors or any third party grant security to the Security
Agent and/or the Lenders (other than the State Guarantee), including security agreements
granting security in favour of or on behalf of the subsidiaries.
“
Security Pooling Agreement
”: The security pooling agreement dated on or about the date
hereof between the Security Agent, the Lenders, the Hedging Counterparty, SP Holding,
RWE-IN, MFC IH and the Borrower.
“
Share Capital
”: The share capital of the Borrower as increased from time to time in
accordance with the Facility Agreement.
“
Share
”: An ordinary fully paid up share in the Share Capital.
“
Shareholder Loans
”: Loans by the Shareholders to the Borrower made and subordinated in
accordance with the terms and conditions of the Shareholders’ Undertaking Agreement.
“
Shareholders’ Undertaking Agreement
”: The agreement of even date between the Sponsors, the
Shareholders, the Borrower and the Agent.
123
“
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.
“
Shareholder’s Account
”: An account in the name of the Borrower over which the Lenders have
no security and to which the Borrower is allowed to make payments in accordance with
Clauses 9.4.3(a) (
Priority of Payments
) and
Error! Reference
source not found.
(
Restricted Application
) of the Facility Agreement.
“
Sponsors
”: Mercer International, RWE-IN and ALTMARK INDUSTRIEPARK AG and any of their
respective successors.
“
Stand-By Equity Security
”:
(a) an unconditional 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
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
substantially in the form set out in
Schedule 7
(
Form of Account Pledge Agreement
)
of the Facility Agreement in case the account is held by the Agent and an account pledge
agreement substantially in the form set out in
Schedule 8
(
Form of Luxembourg
Account Pledge Agreement
) of the Facility Agreement in case the account is held by HVB
Banque Luxembourg Société Anonyme.
“
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 pursuant to the EU-Decision in the form attached to the Facility Agreement as
Schedule 11
(
State Guarantee
) of the Facility Agreement in favour of the Lenders
with respect to this Agreement including the “
Allgemeinen Bestimmungen 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).
2.
PLEDGE
2.1
The Pledgor hereby pledges to the Pledgees:
124
(a)
all present, conditional and future claims including the account balances
(
Salden
) of current accounts (
Kontokorrentkonten
), as the case may be, and all
respective rights of the Pledgor arising under all of its accounts, including the bank
accounts listed in Schedule 1 hereto and all such accounts which will be mentioned in
the relevant Account Lists pursuant to Clause 4;
(b)
all securities and other instruments including all secondary rights, in
particular the rights from interest and profit share coupons, which are or will in the
future be credited into the custody accounts mentioned in Schedule 1 hereto;
(each right of the Pledgees created hereunder is hereinafter referred to as a “
Pledge
”).
2.2
Excluded from the Pledge is the Shareholder’s Account.
2.3
The Original Pledgee hereby accepts its Pledges for itself.
2.4
For the purpose of the Pledges the Pledgor hereby assigns to the Pledgees its claims for
possession regarding the items listed in Clause 2.1(b) above against the account holding bank.
If order papers (
Orderpapiere
) are deposited or will be deposited in the deposit of security
mentioned under Clause 2.1(b) the Pledgor of such order papers will be provided with a blank
endorsement, if it has not been provided with such blank endorsement already.
2.5
The Pledgor undertakes to notify the Account Bank and any other relevant third party of the
Pledges in substantially the form set out in Schedule 4 attached to this Agreement without
undue delay requesting to acknowledge receipt of the notification of and acceptance of the
terms thereof to the Security Agent.
2.6
(a)
Upon transfer or assignment (including by way of assumption
(
Vertragsübernahme
)) of all or part of the Secured Obligations by a Pledgee the
Pledges created hereunder shall transfer by operation of law pursuant to para. 401
BGB. In the event that for any reason such transfer by operation of law is not
totally effective then the Security Agent shall, and hereby does accept, as
representative without power of attorney (
Vertreter ohne Vertretungsmacht
), the
respective Pledges for and on behalf of each Future Pledgee. Each Future Pledgee
ratifies and confirms the declarations and acts so made by the Security Agent on its
behalf by accepting the transfer or assignment (including by way of novation or
assumption (
Vertragsübernahme
)) of the Secured Obligations (or part of them) from a
Pledgee. Upon such ratification
125
(
Genehmigung
) such Future Pledgee becomes a party to this Agreement, it being
understood that any future or conditional claim (
zukünftiger oder bedingter
Anspruch
) of such Future Pledgee arising under the Secured Obligations shall be
secured by the Pledges constituted hereunder.
(b)
All parties hereby confirm that the validity of the Pledges granted hereunder
shall not be affected by the Security Agent acting as representative without power of
attorney for each Future Pledgee.
(c)
The Pledgor herewith authorises the Security Agent to notify the identity of
such Future Pledgee and the new pledges created pursuant to Clause 2.6(a) above to the
Pledgor and the Account Bank. Upon request of the Security Agent, the Pledgor shall
without undue delay give such notice and provide the Security Agent with a copy
thereof.
2.7
The validity and effect of each of the Pledges shall be independent from the validity and the
effect of the other Pledges created hereunder. The Pledges to each of the Pledgees shall be
separate and individual pledges ranking
pari passu
with the other Pledges created hereunder.
2.8
Each of the Pledges is in addition, and without prejudice, to any other security a Pledgee
may now or hereafter hold in respect of the Secured Obligations.
2.9
The Pledgor is not entitled to demand the delivery of interest and profit share coupons with
regard to securities which are pledged hereunder other than provided
in Clause 10.5.1 of the Facility Agreement.
3.
SECURED OBLIGATIONS
The Pledges hereunder shall secure all claims (present and future, actual and contingent)
of the Secured Creditors which are or become owing by the Pledgor pursuant to or in
connection with:
(i)
the Facility Agreement;
(ii)
the Security Agreements and all of the other Financing Documents; and
(iii)
the Hedging Agreements between the Hedging Counterparty and the Pledgor;
in their respective valid, amended, supplemented, novated or newly arranged forms.
(The claims mentioned in this Clause 3 will be hereinafter referred to as the “
Secured
Obligations
”).
126
4.
LIST OF BANK ACCOUNTS
4.1
The Pledgor shall supply at its own expense to the Security Agent a list of the pledged
accounts referred to in this Agreement within a period of ten (10) days from the end of each
calendar quarter. The first list shall be supplied on the [Date] (the “
Account List
”).
4.2
The Account List shall contain the account number, the accounting balances, the bank code
number and the addresses of the banks holding these accounts.
4.3
The parties to this Agreement agree that all claims from the bank accounts that are specified
in the Account List pursuant to Clause 4.1 are pledged to the Pledgees having equal priority.
4.4
The Pledgees are entitled to request further Account Lists from the Pledgor at its expense,
such Account Lists to be supplied by the Pledgor to the Security Agent.
5.
ENFORCEMENT OF THE PLEDGES
5.1
Until the Security Agent gives notice to the contrary to the Pledgor, the Pledgor shall be
authorised to withdraw money from the pledged accounts and to transfer monies within the
ordinary course of its business and pursuant to Clause 9.2 of
the Facility Agreement. The same does apply
mutatis mutandis
with regard to transactions
concerning the pledged custody accounts.
5.2
If the requirements set forth in Section 1204 et seq. of the German Civil Code (
Bürgerliches
Gesetzbuch
) with regard to the enforcement of any of the Pledges are met (
Pfandreife
), in
particular, if any of the Secured Obligations have become due and payable and, in addition, an
Enforcement Event pursuant to the Facility Agreement has occurred, then in order to enforce
the Pledges, the Pledgees (acting through the Security Agent) may at any time hereafter avail
themselves of all rights and remedies to enforce the pledges that a pledgee has upon default
of a pledgor by rights (the “
Enforcement Event
”).
5.3
Notwithstanding Section 1277 of the German Civil Code, the Pledgees, acting through the
Security Agent are entitled to exercise their rights without obtaining enforceable judgment or
other instrument (
vollstreckbarer Titel
).
5.4
The Pledgor hereby expressly agrees that two (2) weeks’ prior written notice to the Pledgor
of the place and time of any such public auction shall be sufficient. The public auction may
take place at any place in the Federal Republic of Germany designated by the Security Agent,
acting for and on behalf of the Pledgees.
127
5.5
The Pledgor hereby expressly waives all defences of voidability and set-off pursuant to
sections 770 and 1211 of the German Civil Code (
Einrede der Anfechtbarkeit und der
Aufrechenbarkeit
).
5.6
Provided that the other requirements in Clause 5.2 are met and to the extent permissible
under the applicable law the Pledgees acting through the Security Agent shall be entitled to:
(a)
collect the monies standing to the credit of the pledged accounts and to
apply them to the satisfaction of the Secured Obligations;
(b)
realise the securities booked on the Accounts;
(c)
request that all documents relating to the Pledge be handed over to the
Security Agent and the Pledgor hereby agrees to comply promptly with any such request;
and
(d)
take any other actions not mentioned in Section 5.5 (a) to 5.5 (c) above
which are necessary or appropriate for the purpose of realising the security granted
by the Pledgor in accordance with this Agreement, to the extent that such actions are
permissible under the applicable law.
5.7
The Pledgees acting through the Security Agent may realise the Pledges only to the extent
necessary to satisfy any outstanding Secured Obligations.
5.8
Among several claims the Pledgees acting through the Security Agent may select at their own
discretion which claims shall be realised. The Pledgees shall, however, use their best efforts
to give priority to actions which will not endanger the ongoing concern of the Pledgor’s
business. Other actions shall only be taken if necessary to satisfy in full the Secured
Obligations.
5.9
The proceeds resulting from the realisation of the Pledges shall be applied pursuant to
Clause 7.7 of the Security Pooling Agreement.
6.
RIGHT OF INSPECTION
6.1
The Security Agent is entitled during usual business-hours and with a reasonable advance
notice to demand and to inspect all information, records and instruments which are required or
useful in order to examine or to assert the value of the Pledges created under this Agreement.
If the Pledgor employs data processing systems it will at its own cost and on reasonable
request of the Security Agent produce print-outs of the information, records and instruments
which are required or useful for the aforementioned purposes or will supply data carriers to
the Security Agent on which such information, records and instruments are recorded.
128
6.2
In case any third party other than the Pledgor has access to information, records and
instruments described in Section 6 the Pledgor already hereby irrevocably authorises the
Security Agent and its successors acting for and on behalf of the Pledgees to obtain such
information, records and instruments in the name of the Pledgor. The Security Agent shall
immediately inform the Pledgor of any such acts under the conditions set out in Clause 6.2.
6.3
The Pledgor shall on request update all information, records and instruments relating to the
claims and securities pledged under this Agreement.
6.4
A consultant or adviser authorised by the Security Agent may exercise the Security Agent’s
rights under this Section 6.
7.
REPRESENTATIONS AND WARRANTIES
7.1
The Pledgor represents and warrants to the Pledgees that:
(a)
it alone holds title to and may freely dispose of the Accounts;
(b)
the Accounts have not been pledged to third parties or encumbered in any
other way in favour of third parties;
(c)
no counterclaims as to which a right to set-off or a right of retention could
be exercised exist to date and, to the extent that this is legally practicable and
from a reasonable business perspective appropriate and within the ordinary course of
business, such counterclaims will not be allowed to come into existence in the future;
and
(d)
it does not hold any bank accounts other than the accounts allowed under the
Facility Agreement.
7.2
If any of the warranties of the Pledgor under Section 7.1 should be incorrect, wholly or in
part, the Pledgor will place the Pledgees in the same position as if the respective warranty
given by the Pledgor had been correct. The aforementioned claim of the Pledgees does not
require negligence on the part of the Pledgor.
8.
PLEDGOR’S UNDERTAKINGS
The Pledgor undertakes:
(e)
unless permitted in this Agreement and the Facility Agreement, not to dispose
of any assets booked on the accounts pledged hereunder other than in the ordinary
course of its business and in accordance with the
Facility Agreement as well as to refrain from encumbrances or any acts or omissions
which might result in a material decline of the aggregate
129
value or in a loss of the
assets and not to enter into obligations to refrain from disposals of assets
(
Verfügungsverbote
);
(f)
to identify the Pledge immediately in its books and records and to refrain
from any acts or omissions which could prevent third parties who may have a legitimate
interest in obtaining knowledge of the Pledge from obtaining knowledge thereof;
(g)
to open a new account only with prior written consent of the Pledgees, which
consent shall not be unreasonably withheld. In such a case, the Pledgor shall grant a
corresponding account pledge to the Pledgees over the newly established account;
(h)
to inform the Security Agent as soon as possible in the case the Pledgees’
rights in respect of the Pledge are prejudiced or jeopardised by attachment or are
prejudiced or jeopardised by other material actions of third parties. Such information
shall be accompanied, in the case of any attachment, by a copy of the order for
attachment as well as all documents required for the filing of an objection against
the attachment, and, in case of any other actions by third parties, by copies
evidencing which actions have or will be taken, respectively, as well as all documents
required for the filing of an objection against such actions. The Pledgor shall
further be obliged to inform as soon as possible the attaching creditors or other
third parties asserting rights with respect to the transferred rights and claims in
writing of the Pledgees’ rights in respect of the assets. All reasonable and
adequately documented costs and expenses for countermeasures of the Pledgees shall be
borne by the Pledgor. This shall also apply to the institution of legal action which
the Pledgees reasonably consider necessary;
(i)
to inform the Security Agent promptly of any subsequent material changes in
the value of the accounts pledged hereunder resulting from any set off or other
reasons, after becoming aware of such changes other than in the ordinary course of
business; and
(j)
to notify the Security Agent promptly of any event or circumstance which
might be expected to have a material adverse effect on the validity or enforceability
of this Agreement.
9.
NOTICES
9.1
Communications in Writing
Each communication to be made by the parties hereto under this Agreement will be made in
writing and, unless otherwise stated, will be made by letter, fax or
130
e-mail. Any
communication to be made by the parties hereto in connection with the enforcement of the
security created hereunder shall, however, only be made by letter. Each communication will
be in German or English.
9.2
Addresses
Any communication, information or document to be made or delivered by the parties hereto
pursuant to this Agreement will (unless the recipient of such communication or document
has, by fifteen (15) days’ written notice to the Security Agent, specified another address
or fax number) be made or delivered to the address set out below:
(a)
to the Pledgor:
Zellstoff Stendal GmbH
Goldbecker Strasse 1
D – 39596 Arneburg
This Agreement shall create rights and obligations of the parties hereto and of their
respective permitted successors.
10.2
The Security Agent may transfer its rights and obligations under this Agreement to third
parties at any time after having resigned from its office as Security
Agent. However, all rights and obligations shall only be transferred collectively to the
same third party. The Borrower hereby irrevocably grants its consent that the relevant
third party shall become a party hereto in lieu and as successor of the Security Agent upon
the transfer becoming effective. The Borrower is
131
obliged not to transfer its rights and
obligations under this Agreement without the prior written consent of the Security Agent.
10.3
This Agreement shall continue to apply in the case of a change of the Pledgor’s shareholders
or legal form and in the case of a universal succession (
Gesamtrechtsnachfolge
) on the part of
the Pledgor or the Security Agent.
11.
AMENDMENTS
Changes to this Agreement and any waiver of rights under this Agreement shall be made in
writing. The parties may waive this form requirement by written agreement only.
12.
RELEASE (
PFANDFREIGABE
)
Upon complete and irrevocable satisfaction of the Secured Obligations, the Pledgees will as
soon as reasonably practical declare the release of the Pledges (
Pfandfreigabe
) to the
Pledgor as a matter of record. For the avoidance of doubt, the parties are aware that upon
full and complete satisfaction of the Secured Obligations the Pledges, due to their
accessory nature (
Akzessorietät
) cease to exist by operation of German mandatory law.
13.
PARTIAL INVALIDITY, WAIVER
13.1
Should any provision of this Agreement be invalid or unenforceable, wholly or in part, or
should any provision later become invalid or unenforceable, this shall not affect the validity
of the remaining provisions of this Agreement. In lieu of the invalid or unenforceable
provision another reasonable and enforceable provision shall apply which corresponds to what
the parties would have agreed taking into account the spirit and purpose of this Agreement had
they considered the invalidity or lack of enforceability of the relevant provision upon
conclusion of this Agreement, and which corresponds to the intentions of the parties in
relation to the spirit and purpose of this Agreement. The above provision shall apply
mutatis
mutandis
to fill possible gaps in this Agreement.
13.2
No failure to exercise, nor any delay in exercising, on the part of the Security Agent, any
right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy prevent any further or other exercise thereof or the exercise
of any other right or remedy. The rights and
remedies provided hereunder are cumulative and not exclusive of any rights or remedies
provided by law.
14.
MISCELLANEOUS
132
14.1
The Security Agent acts as agent for each of the Stendal Creditors against the Borrower in
the event of an assertion of the rights and obligations under this Agreement. The Security
Agent is authorised to authorise a third party if necessary. The Security Agent and the third
party are exempt from the restrictions laid down in Section 181 of the German Civil Code
(
BGB
).
14.2
Each Pledgee authorises the Security Agent to act as agent for the Pledgees in the event of
an assertion of the rights and obligations under this Agreement. The Security Agent is
authorised to authorise a third party if necessary. The Security Agent and the third party
are exempt from the restrictions laid down in Section 181 of the German Civil Code (
BGB
).
14.3
The Security Agent in its capacity as account keeping bank herewith agrees that its lien
pursuant to its general business conditions (
AGB-Pfandrecht
) shall rank behind all the pledges
over the Account granted to the Pledgees by the Pledgor pursuant to this Agreement.
14.4
This Agreement has been translated into the English language for convenience purposes only.
For the avoidance of doubt, the German version of this Agreement shall prevail.
15.
APPLICABLE LAW, JURISDICTION
15.1
This Agreement shall be governed by the laws of the Federal Republic of Germany.
15.2
The courts in Munich shall have exclusive jurisdiction in respect of any dispute out of or in
connection with this Agreement. The Pledgees, however, shall be entitled to take action
against the Pledgor in any other court of competent jurisdiction.
133
Schedule 1
“List Of
Accounts”
Bank
Currency
Account Number
Use
134
Schedule 2
“Security Agreements”
1.
First ranking Land Charge by the Borrower in an aggregate amount of EUR 827,950,000 on the
site of the Borrower dated on or about the date hereof whereby the Borrower submits in a
separate certificate to the immediate enforcement of judgement concerning the Site in an
amount of EUR 60,000,000;
2.
Security Purpose Agreement between the Borrower and the Security Agent dated on or about the
date hereof;
3.
Security Transfer Agreement between the Borrower and the Security Agent as of the date
hereof;
4.
Global Assignment Agreement between the Borrower and the Security Agent dated on or about the
date hereof;
5.
Insurance Claims Assignment Agreement between the Borrower and the Security Agent dated on or
about the date hereof;
6.
Investment Incentives Assignment Agreement between the Borrower and the Security Agent dated
on or about the date hereof;
7.
Account Pledge Agreement between the Borrower and the Security Agent dated on or about the
date hereof;
8.
Pledge of Hedging Claims between the Borrower and the Security Agent dated on or about the
date hereof;
9.
Share Pledge Agreement between SP Holding, RWE-IN and MFC IH and the Security Agent dated on
or about the date hereof; and
We hereby give you notice that by an account pledge agreement dated [Date] (the “
ACCOUNT PLEDGE
AGREEMENT
”) we have pledged in favour of Bayerische Hypo- und Vereinsbank Aktiengesellschaft (the
“
SECURITY AGENT
”) and others as pledgees all of our right, title and interest in and to the above
account (which shall include all sub-accounts, renewals, replacements and redesignations thereof)
and all monies and interest from time to time standing or accruing to the credit thereof.
Until notice to the contrary from the Security Agent to be served on you as Account Bank we may
continue to operate the Account and in particular may dispose over the amounts standing to the
credit of the Account. Upon receipt of such aforesaid notice to the contrary you, as Account Bank,
shall not allow any dispositions by ourselves of amounts standing to the credit of the Account.
Please acknowledge receipt of this notice and your agreement to the terms hereof by signing the
enclosed copy and returning the same to Bayerische Hypo- und Vereinsbank Aktiengesellschaft, Am
Tucherpark 1, MCS4LA, D-80538 München.
Yours faithfully,
For and on behalf of Zellstoff Stendal GmbH
136
Annex to the Notice of Pledge
[Letterhead of the Account Bank]
To:
Bayerische Hypo- und Vereinsbank AG
Am Tucherpark 1 (MCS4LA)
80538 München
We acknowledge receipt of the above notice and our agreement to the terms thereof and confirm that
we have neither received any previous notice of pledge relating to this Account nor are we aware of
any third party rights in relation to this Account. We hereby grant our consent on behalf of
ourselves and our legal successors in title to the pledge of any claims arising out of the Account.
We hereby irrevocably and unconditionally waive our rights in respect of and agree not to make any
set-off or deduction from the Account or invoke any rights of retention in relation to this
Account.
We agree that the pledge in our favour over the Account granted pursuant to our General Business
Conditions shall rank behind all the pledges over the Account granted to the Pledgees by the
Pledgor pursuant to the Account Pledge Agreement of which we have been notified by the Pledgor.
For and on behalf of [Account Bank]
Date
137
EXECUTION PAGE
ACCOUNT PLEDGE AGREEMENT
Zellstoff Stendal GmbH
as “
Borrower
” and “
Pledgor
”)
Name:
Name:
Address: Goldbecker Strasse 1
D-39596 Arneburg
Bayerische Hypo- und Vereinsbank AG
as “
Original Pledgee” and
"
Security Agent
”
Name:
Name:
Address: Am Tucherpark 16
D-80538 München
138
SCHEDULE 8
Form of Luxemburg Account Pledge Agreement
139
ZELLSTOFF STENDAL GMBH
as Pledgor
HVB BANQUE LUXEMBOURG SOCIÉTÉ ANONYME
as Account Bank
BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHAFT
as Security Agent
[
l
]
LUXEMBOURG ACCOUNT PLEDGE AGREEMENT
140
CONTENTS
141
THIS ACCOUNT PLEDGE AGREEMENT
(the “
Pledge Agreement
”) is dated as of 26 August 2002 and made
between:
(1)
ZELLSTOFF STENDAL GMBH
, a limited liability company incorporated, organised and validly
existing under the laws of the Federal Republic of Germany, having its office at Goldbecker
Strasse 1, 39596 Arneburg, Federal Republic of Germany and registered in the commercial
register (
Amtsgericht
) of Stendal, number HRB 2446 (the “
Pledgor
”);
(2)
BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHAFT
, a stock corporation incorporated
organised and validly under the laws of the Federal Republic of Germany as Security Agent and
as such acting for and on behalf of the secured creditors (the “
Security Agent
”);
AND IN THE PRESENCE OF
(3)
HVB BANQUE LUXEMBOURG SOCIÉTÉ
ANONYME
, a company duly organized and existing under the laws of the
Grand Duchy of Luxembourg, having its registered office in 4, rue
Alphonse Weicker, 2099 luxembourg (the “
Account Bank
”);
WHEREAS:
(A)
The Lenders and the Pledgor have concluded a Facility Agreement dated 26 August 2002 in
the amount of EUR 827,950,000 for the purpose of the design, development, construction and
operation of a pulp mill located in Arneburg, near Stendal in Sachsen-Anhalt (the “
Facility
Agreement
”).
(B)
Pursuant to the Facility Agreement the Pledgor is obliged to grant certain security for the
purpose of securing the obligations under the Facility Agreement in accordance with the terms
and conditions therein.
NOW IT IS HEREBY AGREED
as follows:
1.
DEFINITIONS
1.1
Unless otherwise stated in this Agreement the definitions and principles of interpretation in
the Facility Agreement shall apply to this Agreement.
“
2001 Law
” means the Luxembourg law dated 1 August 2001 on the circulation of
securities and other fungible instruments (
loi du 1er août 2001 sur la circulation de
titres et d’autres instruments fongibles
).
142
“
Bank Account
” means the bank account held with the Account Bank as set out in Schedule 1
(
List of Bank Accounts
) including any sub account, renewal, redesignation or replacement
thereof.
“
Eligible Securities
” means investments made in short term [euro] debt securities with a
maximum duration of 3 years of issuers with a short term A1 rating or better of Standard &
Poor’ s Corporation or an equivalent rating from such other rating agency approved by the
agent.
“
Hedging Counterparty
” means Bayerische Hypo- und Vereinsbank AG.
“
Lenders
” means the financial institutions being, from time to time, Lenders under the
Facility Agreement.
“
Pledged Assets
” means the Pledged Account Claims, the Pledged Securities and the Related
Assets.
“
Pledged Account Claims
” means any claim to the cash credit balance of the Bank Account as
well as any other claim the Pledgor may have against the Account Bank in relation to such
Bank Account, including, for the avoidance of doubt, any pecuniary claim for the payment of
the relevant credit balance or for the repayment of a terms deposit (
Festgeld
) as well as
any other claim, regardless of the nature thereof in relation to the Bank Account,
including, for the avoidance of doubt, any claim for the payment of the interests paid into
the Bank Account.
“
Pledged Securities
” means any securities and, in particular, any Eligible Securities
which, from time to time will be deposited by the Pledgor on the securities ledger of the
Bank Account.
“
Related Assets
” means all dividends, interest and other monies payable in respect of the
Pledged Securities and all other rights, benefits and proceeds in respect of or derived
from the Pledged Securities (whether by way of redemption, bonus, preference, option,
substitution, conversion or otherwise).
“
Secured Creditors
” means the Lenders and the Hedging Counterparty.
“
Secured Obligations
” means all present and future, conditional and unconditional claims,
rights, title, interests (whether actual or contingent) of the Secured Creditors or any of
them against the Pledgor or any of its successors which are or become owing by the Pledgor
or any of its successors to the Secured Creditors under or in connection with the Facility
Agreement, the Security Agreements, all other Financing Documents, the Hedging Agreement
between the Hedging Counterparty and the Pledgor and any other agreement including any
renewal, extension, novation or any other amendment,
143
modification or supplement to such
agreements including the Financing Documents concluded between the Pledgor, on the one
hand, and the Secured Creditors or any of them, on the other hand, in connection with or
related to the Financing Documents irrespective of whether any other persons or entities
are parties to such agreements or supplements including letters of credit and/or guarantees
including all obligations of the Pledgor now or hereafter existing under this Agreement
including, without limitation, all fees, costs and expenses whether in connection with a
collection action hereunder or other enforcement action hereunder.
1.2
References to Clauses, Recitals and Schedules are to clauses, recitals and schedules of
this Agreement.
2.
PLEDGE OVER PLEDGED ACCOUNT CLAIMS
2.1
Pursuant to Article 110 et seq. of the Luxembourg Code of Commerce, the Pledgor hereby
irrevocably and unconditionally grants a first priority pledge (“
gage
”) over the Pledged
Account Claims (the “
Pledge over Account
”) in favour of the Security Agent, who accepts, as
security for the due and full payment and discharge of all of the Secured Obligations.
2.2
Pursuant to Article 110 et seq. of the Luxembourg Code of Commerce and Article 9 of the 2001
Law, the Pledgor hereby irrevocably and unconditionally grants a first priority pledge
(“
gage
”) over the Pledged Securities (the “
Pledge over Securities
”, and together with the
Pledge over Accounts, the “
Pledges
”) in favour of the Security Agent, who accepts, as security
for the due and full payment and discharge of all of the Secured Obligations.
2.3
The parties agree, to the extent necessary, that the Pledged Securities shall be subject to
the fungibility regime organised by the 2001 Law.
2.4
The Pledgor undertakes that the Pledge over Securities shall at all times remain perfected in
accordance with article 9 of the 2001 Law and, in particular, that the Pledged Securities
shall be held in a sub-account to the Bank Account which shall be identified as an account
holding securities pledged in favour of the Security Agent (the “
Securities Sub-Account
”).
2.5
Without prejudice to the above provisions, the Pledgor hereby irrevocably authorises and
empowers the Security Agent to cause any formal steps to be taken by the Account Bank or any
other person for the purpose of perfecting the Pledges and, for the avoidance of doubt,
undertakes to take any such steps itself if so directed by the Security Agent. In particular,
should any such steps be required in relation to Pledged Securities acquired in the future,
the Pledgor undertakes to take any such steps immediately upon acquisition or delivery of the
relevant Pledged Securities.
144
2.6
Without prejudice to the restrictions contained in this respect in the Facility Agreement,
the Pledgor shall be allowed to dispose of any monies standing to the credit of the Bank
Account. The parties however expressly agree that the Account Bank shall not be under an
obligation to monitor compliance with the restrictions contained in the Facility Agreement.
3.
UNDERTAKING
The Pledgor undertakes to the Security Agent during the subsistence of this Agreement
that:
3.1
it shall from time to time promptly execute, acknowledge, deliver, file and register all
such additional documents, instruments, agreements, certificates, consents and assurances and
do all such other acts and things as may be necessary or as the Security Agent may reasonably
request from time to time in order to perfect the security constituted by this Agreement and
to exercise and enforce the rights and remedies under this Pledge Agreement or in respect of
the Pledged Assets;
3.2
it shall promptly furnish to the Security Agent such information, reports and records in
respect of the Pledged Assets as the Security Agent may reasonably request from time to time;
3.3
it shall abstain from any act or omissions affecting the enforceability of the pledge or
through which the rights and interests of the Security Agent as the owner of security rights
therein may be impaired;
3.4
it shall not close the Bank Account without the prior written consent of the Security Agent;
3.5
it shall refrain from any acts or omissions including but not limited to, the creation of any
encumbrances, which might result in a material decline of the aggregate value or in a loss of
the Bank Account;
3.6
it shall identify the Pledge immediately in its books and records and refrain from any acts
or omissions which would reasonably be likely to prevent third parties who may have a
legitimate interest in obtaining knowledge of the Pledge;
3.7
it shall inform the Security Agent as soon as possible in case the Security Agent’s rights in
respect of the Bank Account are prejudiced or jeopardised by attachment or are materially
prejudiced or jeopardised by other actions of third parties. Such information shall be
accompanied, in case of any attachment, by a copy of the order for attachment, as well as all
documents required for the filing of an objection against the attachment, and, in case of any
other actions by third parties, by copies evidencing which actions have or will be taken,
respectively,
145
as well as all documents required for the filing of an objection against such
actions. The Pledgor shall further be obliged to promptly inform as soon as possible the
attaching creditors or other third parties asserting rights with respect to the Bank Account
in writing of the Security Agent’s rights in respect of the claims. All reasonable and
adequately documented costs
and expenses for any actions of intervention and countermeasures of the Security Agent
shall be borne by the Pledgor. This shall also apply to the institution of legal action,
which the Security Agent considers necessary;
3.8
it shall inform the Security Agent, forthwith upon becoming aware of such event, in the event
that any Pledged Securities no longer qualify as Eligible Securities;
3.9
it shall sell, if so requested by the Security Agent, any Pledged Securities in accordance
with (i) Clauses 2.3 and 3.5 and (ii) any particular instructions the Security Agent may have
given; and
3.10
it shall notify the Security Agent as soon as possible of any event or circumstance which may
be expected to have a material adverse effect on the validity or enforceability of this
Agreement.
4.
POWER OF ATTORNEY
4.1
The Pledgor irrevocably appoints the Security Agent to be its attorney and in its name and on
its behalf to execute, deliver and perfect all documents and do all things that the Security
Agent may consider to be requisite for (a) carrying out any obligation imposed on the Pledgor
under this Agreement, (b) perfecting or maintaining the security interest created hereunder or
(c) exercising any of the rights conferred on the Security Agent by this Agreement or by law,
it being understood that the enforcement of the pledge over the Pledged Assets must be carried
out as described in Clause 5 (
Remedies upon Default
)
hereunder. The Pledgor shall ratify and confirm all things done and all documents executed by
the Security Agent in the exercise of that power of attorney.
5.
REMEDIES UPON DEFAULT
5.1
Three Eight days after a demand to pay (
mise en demeure
) the Secured Obligations (or any part
thereof) which may only be made if an Event of Default (
Kündigungsgrund
) according to Clause
23.1.1 of the Facility Agreement has occurred and is continuing is
given to the Pledgor in the form provided for in Clause 13, the Security Agent shall be
entitled, and in addition to all other rights and remedies granted hereunder and under any
other instrument or agreement securing, evidencing or relating to the Secured Obligations, to
exercise all rights and remedies of a pledgee under the laws of Luxembourg (or any other
applicable laws) and may enforce the Pledge in the most favourable manner
146
available under
applicable law, including, but not limited to, by using any right of set off arising under
Article 118 (2) of the Code of Commerce or by requesting direct payment from the Account Bank
pursuant to the same provision.
5.2
For that purpose, the Security Agent shall be irrevocably empowered and authorised to
represent the Pledgor in relation to the Account Bank, in particular but not limited to for
the purpose of requesting the temporary closure (“
arrêt de compte
”) of the Bank Accounts or
for the purpose of making any other administrative arrangements necessary for the enforcement
of the Pledge. It may also request the “
attribution judiciaire
” of any claim or asset
pursuant to Article 2078 of the Civil Code, as well as exercise all other rights to which it
is entitled in such circumstances under Luxembourg law or any other applicable laws.
6.
CHANGE OF VALUE
In the event the Bank Account will substantially change in its value due to
objections, suspension or due to set offs or for any other reasons the Pledgor is obliged
to promptly inform the Security Agent thereof.
7.
INDEMNITY
7.1
The Security Agent and the Secured Creditors shall not be liable for any loss or damage
suffered by the Pledgor save in respect of such loss or damage which is suffered as a result
of wilful misconduct or gross negligence of either of them.
7.2
The Pledgor will indemnify the Secured Creditors and the Security Agent and keep the Secured
Creditors and the Security Agent indemnified against all damages, losses, actions, claims,
expenses, demands and liabilities which may be incurred by or made against the Secured
Creditors and the Security Agent for anything done or omitted in the exercise or purported
exercise of the powers contained herein and occasioned by any breach of the Pledgor of any of
its obligations or undertakings herein contained other than to the extent that such damages,
losses, actions, claims, expenses, demands and liabilities are incurred or made against the
Secured Creditors or the Security Agent as a result of gross negligence or wilful misconduct
of the Secured Creditors or the Security Agent.
8.
REPRESENTATIONS AND WARRANTIES
8.1
The Pledgor represents and warrants to the Security Agent that, except as expressly provided
in the Facility Agreement and the Security Documents:
8.1.1 it alone holds title to and may, except for the Pledge created hereunder,
freely dispose of the Bank Account;
147
8.1.2 the Bank Account has not been pledged to third parties or encumbered in any
way in favour of third parties;
8.1.3 the pledgeability of the Bank Account is neither excluded nor restricted in
any way;
8.1.4 it has the power to execute and perform its obligations under this Agreement
and all necessary corporate, shareholder and other action has been taken to authorise
the execution and performance of the same;
8.1.5 no litigation, arbitration or administrative proceeding is presently in
progress, and the Pledgor has not received notice that the initiation of any such
proceedings is intended, to restrain the entry into, exercise of any of the Pledgor’s
rights under and/or performance or enforcement of or compliance with any of its
obligations under this Agreement, which, if adversely determined, is reasonably likely
to have a material adverse effect on the ability of the Pledgor to perform its
obligations under this Agreement; and
8.1.6 no counterclaims as to which a right to set off or right of retention could
be exercised exist with respect to the Bank Account.
8.2
The representations under Clause 8.1 (
Representations and Warranties
) shall be expressly
repeated by the Pledgor by reference to the facts and circumstances then existing at each
Drawdown Date.
8.3
If any of the representations and warranties of the Pledgor under Clause 8.1 (
Representations
and Warranties
) should be incorrect, in whole or in part, the Pledgor will use its best
efforts to place the Security Agent in the same position as if the respective representation
or warranty given by the Pledgor had been correct. The rights and claims of the Security
Agent contained in this Clause 8.3 do not require negligence on the part of the Pledgor.
9.
RELEASE OF SECURITY
The Pledge shall be discharged by, and only by, the express release thereof granted by
the Security Agent. The Pledgor shall be entitled to demand the release and the Security
Agent shall be under the obligation to grant such release upon good and final discharge of
the Secured Obligations.
10.
PARTIAL ENFORCEMENT
The Security Agent shall have the right, pursuant to the procedures set forth in
Clause 5 (
Remedies upon Default
) of this Agreement, to request enforcement of all or part
of the Pledge in its most absolute discretion. In particular, the
148
Security Agent shall, in
its most absolute discretion, be entitled to enforce the Pledge over all or part of the
Pledged Account Claims only and/or over all or part of the Pledged Securities only. No
action, choice or absence of action in this respect, or partial enforcement, shall in any
manner affect the Pledge as it then shall be. The security interest/pledge thereover shall
continue to remain in full and valid existence until the Security Agent releases the
Pledges in accordance with Clause 9.
11.
EFFECTIVENESS OF COLLATERAL
11.1
The Pledge shall be a continuing security and shall not be considered as satisfied or
discharged or prejudiced by any partial payment, satisfaction or settlement of any part of the
Secured Obligations and shall remain in full force and effect until the Security Agent
releases the Pledges in accordance with Clause 9.
11.2
The Pledge shall be cumulative, in addition to and independent of every other security which
the Security Agent may at any time hold as security for the Secured Obligations or any rights,
powers and remedies provided by law and shall not operate so as in any way to prejudice or
affect or be prejudiced or affected by any security interest or other right or remedy which
the Secured Creditors or the Security Agent may now or at any time in the future have in
respect of the Secured Obligations.
11.3
This Pledge shall not be prejudiced by any time or indulgence granted to any person, or any
abstention or delay by the Secured Creditors or the Security Agent in perfecting or enforcing
any security interest or rights or remedies that they may now or at any time in the future
have from or against the Pledgor or any other person having granted security for the Secured
Obligations.
11.4
No failure on the part of the Security Agent to exercise, or delay on its part in exercising,
any of the rights under this Pledge Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right preclude any further or other exercise of that or
any other rights.
11.5
None of the Secured Creditors or the Security Agent or any of their agents shall be liable by
reason of (a) taking any action permitted by this Pledge Agreement or (b) any neglect or
default in connection with the Pledged Assets or (c) the realisation of all or any part of the
Pledged Assets, except in the case of gross negligence or wilful default upon its part.
11.6
The Pledgor hereby expressly renounces the benefit of article 2037 of the Luxembourg Civil
Code.
149
12.
COST AND EXPENSES
12.1
All reasonable costs, charges, fees and expenses incurred in connection with the negotiation,
preparation, execution registration, implementation and preservation and amendments, waivers
or consents of this Agreement and all reasonable costs, charges, fees and expenses incurred in
connection with the enforcement of this Agreement (in each case including fees for legal
advisers to the Security Agent) shall be borne by the Pledgor.
13.
NOTICES
13.1
All notices or communications pursuant, under or in connection with this Agreement shall be
made pursuant to and in accordance with Clause 38 (
Notices
) of
the Facility Agreement.
13.2
Any notice or other communication under or in connection with this Agreement to the Account
Bank shall be made or delivered with a copy to the Security Agent to the following address of
the Account Bank:
For the avoidance of doubt, unless another address has been communicated in accordance with
Clause 38 (
Notices
) of the Facility Agreement the addresses
of any other party to the Agreement shall be determined pursuant to Clause 38
(
Notices
) of the Facility Agreement.
13.3
Any notice or other communication under or in connection with this Agreement shall be in
the English language or, if in any other language, accompanied by a translation into English.
In the event of any conflict between the English text and the text in any other language, the
English text shall prevail.
14.
LEGAL SUCCESSORS
14.1
This Pledge Agreement shall remain in effect despite any amalgamation or merger (howsoever
effected) relating to Secured Creditors or the Security Agent, and references to the Secured
Creditors or the Security Agent shall be deemed to include any assignee or successor in title
of Secured Creditors or the Security Agent and any person who, under any applicable law, has
assumed the rights
150
and obligations of Secured Creditors or the Security Agent hereunder or
under any other agreements or to which under such laws the same have been transferred or
novated or assigned in any manner. To the extent a further notification or registration or
any other step is required by law to give effect to the above, such further registration shall
be made and the Pledgor hereby gives power of attorney to the Security Agent to make any
notifications, or to take any other steps, and undertakes to do so himself if so requested by
the Security Agent.
14.2
For the purpose of Article 1278 of the Luxembourg Civil Code, to the extent required under
applicable law and without prejudice to any other terms hereof or of any other agreements and
in particular paragraph 1 of this Clause, the Security Agent hereby expressly reserve and the
Pledgor agrees to the preservation of this Pledge and the security interest created thereunder
in case of assignment, novation, amendment or any other transfer of the Secured Obligations or
any other rights arising for it under the Financing Documents or any other agreements to which
the Pledgor is a party.
15.
AMENDMENTS AND PARTIAL INVALIDITY
15.1
Changes to this Agreement and any waiver of rights under this Agreement shall require written
form. The parties may waive this form requirement by written agreement only.
15.2
Should any provision of this Agreement be invalid or unenforceable, wholly or in part, or
should any provision later become invalid or unenforceable, this shall not affect the validity
of the remaining provisions of this Agreement. In lieu of the invalid or unenforceable
provision another reasonable and enforceable provision shall apply which corresponds to what
the parties would have agreed taking into account the spirit and purpose of this Agreement had
they considered the invalidity or lack of enforceability of the relevant provision upon
conclusion of this Agreement, and which corresponds to the intentions of the parties in
relation to the spirit and purpose of this Agreement.
16.
LAW AND JURISDICTION
16.1
This Pledge Agreement shall be governed by Luxembourg law and the courts of Luxembourg City
shall have exclusive jurisdiction to settle any dispute which may arise from or in connection
with it.
16.2
To the extent that the Pledgor may in any jurisdiction claim for itself or its assets
immunity from suit, execution, attachment (whether in aid of execution, before judgement or
otherwise) or other legal process and to the extent that in any such jurisdiction there may be
attributed to itself or its assets such immunity (whether or not
claimed), the Pledgor hereby irrevocably agrees not to claim and hereby irrevocably
151
waives such immunity to the full extent
permitted by the laws of such jurisdiction.
152
SCHEDULE 1
List of Bank Accounts
Currency and
Bank
Address
amount outstanding
Account No.:
HVB Banque
Luxembourg
Société Anonyme
4, rue Alphonse
Weicker 2099
Luxembourg
EUR [·]
[·]
153
SIGNATURE PAGE OF THE [·] LUXEMBOURG ACCOUNT PLEDGE AGREEMENT
IN WITNESS WHERE OF
this Pledge Agreement has been duly executed by the parties.
SIGNATORIES TO THE
ACCOUNT PLEDGE AGREEMENT
The Pledgor
ZELLSTOFF STENDAL GMBH
By:
Name: Harald Gatzke
Name: Wolfram Ridder
Title:
Title:
Address:
Goldbecker Strasse Damm 1
D-39596 Arneburg
Federal Republic of Germany
The Security Agent
BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHAFT
By:
Name: Thomas Reppenthien
Title:
Name: Christoph Wagner
Title:
Address:
Am Tucherpark 1
D-80538 München
Federal Republic of Germany
154
SIGNATURE PAGE OF THE [·] LUXEMBOURG ACCOUNT PLEDGE AGREEMENT
By signing below, the Pledgor hereby expressly and specifically accepts the limitation of liability
in favour of the Security Agent (Clauses 4, 7, 11.5 and 11.6) and the jurisdiction of the
Luxembourg courts (Clause 16.2).
The Pledgor
ZELLSTOFF STENDAL GMBH
By:
By:
Name: Harald Gatzke
Name: Wolfram Ridder
Title:
Title:
ACKNOWLEDGEMENT
By signing hereunder for acceptance, the Account Bank acknowledges and accepts the existence of
this Pledge Agreement and of the security interest created hereunder over the Pledged Account
Claims for the purposes of Article 114 of the Luxembourg Code of Commerce and article 2074 of the
Luxembourg Civil Code and takes notice of the terms of the Pledge Agreement.
Furthermore, by signing hereunder for acceptance, the Account Bank acknowledges and accepts the
security interest created hereunder over the Pledged Securities for the purposes of Article 9 of
the 2001 Law and undertakes to mark the Securities Sub-Account in accordance with Clause 2.3 of
this Pledge Agreement.
The Account Bank confirms that it is not aware of any prior encumbrances over the Bank Account or
the Pledged Assets. The Account Bank hereby releases any pledge or lien resulting from the
application of its general terms and conditions or any other agreement over the Bank Account or
Pledged Assets and waives its right of retention, set-off rights and, more generally, any rights
that may adversely affect the Pledge and waives any option to create new pledges or liens over
future accounts of the Pledgor.
The Account Bank
HVB BANQUE LUXEMBOURG SOCIÉTÉ ANONYME
By:
By:
Name:
Name:
Title:
Title:
155
Address:
4, rue Alphonse Weicker
L-2099 Luxembourg
Luxembourg
156
SCHEDULE 9
Security Agreements
1.
First ranking Land Charge by the Borrower in an aggregate amount of EUR 827,950,000 on the
Site of the Borrower dated on or about the date hereof whereby the Borrower submits in a
separate certificate to the immediate enforcement of judgement concerning the Site in an
amount of EUR 60,000,000;
2.
Security Purpose Agreement with regard to the first ranking Land Charge between the Borrower
and the Security Agent dated on or about the date hereof;
3.
Security Transfer Agreement as security transfer of equipment (plant or machinery) and as
security transfer of all assets of the Borrower on the Secured Site between the Borrower and
the Security Agent as of the date hereof;
4.
Global Assignment Agreement (including claims out of pocket and delivery agreements) between
the Borrower and the Security Agent dated on or about the date hereof;
5.
Insurance Claims Assignment Agreement between the Borrower and the Security Agent dated on or
about the date hereof;
6.
Investment Incentives Assignment Agreement between the Borrower and the Security Agent dated
on or about the date hereof;
7.
Account Pledge Agreement between the Borrower and the Security Agent dated on or about the
date hereof;
8.
Pledge of Hedging Claims Agreement between the Borrower and the Security Agent dated on or
about the date hereof; and
9.
Share Pledge Agreement between SP Holding, RWE-IN and MFC IH and the Security Agent dated on
or about the date hereof.
157
SCHEDULE 10
State Guarantee
158
SCHEDULE 11
Financing of the Subsidiaries
Structure
Contractual Matrix
•
All pulp sales contracts entered into by ZSG as principal.
•
Up to 50% of the wood will be sourced through the wood supply
operating company acting as principal. Contracts for the balance
will be entered into by ZSG as principal acting either directly
or through the wood supply operating company as its agent.
•
Profit and Loss Transfer Agreement entered into between ZSG and
support holding companies.
•
Maximum working capital limited to EUR 12mn down-streamed by ZSG
to the support holding companies and, from such companies, to
subsidiaries.
•
Service agreement entered into between ZSG and wood supply
operating company providing for provision of up to 100% of total
wood supply requirement. Payment for wood supplied by wood
supply operating company only against actual delivery at mill.
Average price over any 12 month period not
159
to exceed average market price over similar period as evidenced by contracts
entered into by ZSG as principal unless justified by ZSG to the
reasonable satisfaction of the Majority Lenders for exceptional
reasons (e.g start-up, initial development of new sources of
supply etc.).
•
Support holding companies employ all employees except
management. Support holding companies will enter into leasing
agreements for wood harvesting equipment and trucks with a
maximum exposure of EUR 17 mn.
•
Each support holding company enters into a service agreement
with its respective operating company pursuant to which it will
make available personnel, wood harvesting equipment and trucks
against payment of fee covering annual operating / financing
costs etc. of such Support Holding Company.
Other Issues
•
Pledge of all bank accounts of Support Holding Companies to
secure ZSG debt and of Operating Companies to extent of working
capital loans downstreamed to them from time to time from ZSG.
•
Direct Agreement (substantially in the form annexed hereto)
between ZSG lenders and leasing companies providing that leasing
companies cannot terminate leases without giving prior notice to
ZSG lenders and not at all if the ZSG lenders “step-in” to the
leases making good any existing payment default.
•
The Borrower to deliver to the Agent:
(a)
as soon as possible and no later than ninety (90) days after the close of its
financial year (i) the balance sheet, the profit and loss account and the cashflow
statement for the subsidiaries in respect of that financial year, audited by a
recognised independent firm of accountants with a license to practice in the Federal
Republic of Germany as well as a reconciliation of the annual financial statements
with the annual budgeted accounts made by the Borrower to include an explanation of
all material deviations from the budgeted annual financial statements; and (ii) the
corresponding auditing report of the firm of accountants; and (iii) a certificate of
such firm of accountants certifying that all business contracts of the Borrower with
Related Parties in the relevant financial year have been entered into on conditions
not less advantageous to the Borrower than achievable with third parties;
(b)
upon request by the Agent semi-annually unaudited management accounts (with a
list of sales and outstanding receivables) and a
160
statement of the board of directors in respect of the development of the subsidiaries.
161
Annex
THIS DIRECT AGREEMENT is made
on [ ], 200[ ] between
(1)
[LEASING COMPANY]
(the “
Leasing Company
”)
(2)
ZELLSTOFF STENDAL GmbH
(“
ZSG
”)
(3)
ZSG SUPPORT HOLDING COMPANY
(“
Holding
”) and
(4)
BAYERISCHE HYPO-UND VEREINSBANK AG
(the “
Agent
”)
WHEREAS
A.
ZSG [will build and operate/has built and operates] a bleached softwood kraft pulpmill
located at Arneburg, Sachsen-Anhalt, Federal Republic of Germany (the “
Mill
”).
B.
The Leasing Company has agreed to lease certain [“trucks/harvesters"] (the “
Equipment
”) to
Holding (a wholly-owned subsidiary of ZSG) as more particularly identified in that certain
Leasing Agreement dated
[ ], 200[ ] (the “
Leasing Agreement
”) for use in the operation of the
Mill.
C.
The Agent is agent for a syndicate of banks who have lent money to ZSG to finance the
construction and operation of the Mill.
IT IS AGREED as follows:
1.
The Leasing Company agrees not to take any steps (“
Enforcement Steps
”) to terminate, rescind
or suspend performance of the Leasing Agreement or to repossess or seek to repossess any of
the Equipment without first giving not less that 30 days prior written notice thereof to the
Agent specifying the amount of any existing payment default under the Leasing Agreement.
2.
If during such 30 day period the Agent or its nominee makes good such payment default and
undertakes by notice (a “
Step-in-Notice
”) to the Leasing Company that it will assume together
with Holding responsibility for compliance with the Leasing Agreement from the date of its
notice until the date it serves on the Leasing Company a further notice (a “
Step-out Notice
”)
specifying that it will no longer be responsible for such compliance, the Leasing Company
undertakes not to take any Enforcement Steps in respect of any default by Holding under the
Leasing Agreement which occurred prior to the effective date of the Step-in Notice.
3.
During the 30 day period referred to in Clause 1 and thereafter if the Agent makes good the
payment default and serves a Step-in Notice the Leasing
162
Company shall continue to perform its obligations under the Leasing Agreement. If the
Agent does not make good the payment default and serve a Step-in Notice or if having done
so it serves a Step-out Notice the Leasing Company may take such action as it thinks fit to
enforce its rights against Holding under the Leasing Agreement with effect from the expiry
of such 30 day period or, as the case may be, the effective date of the Step-Out Notice
4.
All notices or other communications required or permitted hereunder shall be in writing
addressed to the relevant party at its address identified with its signature below or such
other address as any party may, by notice to each of the other parties, specify. All notices
shall be deemed delivered upon receipt.
5.
This Direct Agreement shall be governed by and construed in accordance with the laws of the
Federal Republic of Germany.
6.
The exclusive place of jurisdiction to hear and determine any suit, action or proceeding and
to settle any dispute which may arise out of or in connection with this Direct Agreement is
Munich. Mandatory places of jurisdiction remain unaffected.
AS WITNESS
the hands of the parties
[LEASING COMPANY]
ZELLSTOFF STENDAL GmbH
By:
By:
Address:
Address:
Fax No:
Fax No:
BAYERISCHE HYPO-UND VEREINSBANK AG
ZSG SUPPORT HOLDING COMPANY
By:
By:
Address:
Address:
Fax No:
Fax No:
163
SCHEDULE 12
Minimum Insurance Schedule
164
SCHEDULE 12a
Minimum Insurance Operation Period Schedule
OPERATIONAL PHASE INSURANCE
1.
Material Damage All Risks (including Machinery Breakdown)
1.1
The Insured Parties
(a)
Borrower and any Subsidiary Companies;
(b)
The EPC Contractor and/or Contractor’s Suppliers in respect of the ÅÐÑ
Contract and the Contractor and/or Contractor’s Suppliers in respect of the non-ÅÐÑ
ancillary Contracts for the duration of the relevant Defects Liability Periods only;
(c)
Any consultants and suppliers for their site activities only;
(d)
The Independent Engineer;
(e)
The Agent and the Lenders and their technical adviser,
Each for their respective rights and interests.
1.2
The Insured Property
All property comprising the entire Project, including but not limited to: the Plant,
Machinery, Rail, Gas, Water and Electrical Interconnections, buildings and their contents,
stock, fixtures, fittings and all other property being the Insured’s own or in their
custody or control.
1.3
Geographical Limits
Federal Republic of Germany but in respect of temporary removal, Europe and Scandinavia.
1.4
Sum Insured
An amount of EUR 625,000,000 being an amount not less than equivalent to the full
replacement value from time to time of the Project (Including an allowance for professional
fees, removal of debris) and Customs Duties.
A sub-limit representing the new replacement value of machinery and plant may apply for
Machinery Breakdown.
1.5
Indemnity
All risks of physical loss of or damage to any part of the Insured Property from any cause
not excluded in the Policy.
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1.6
Period of Insurance
From the earlier of the time that: cover expires under Part 1, Paragraph 1 “Construction/
Erection All Risks Material Damage insurance” of this Minimum Insurance Schedule and the
date of Start Up and, to be maintained by renewals of the ‘Period of Insurance’, until the
full repayment of the loan.
1.7
Main Exclusions
(a)
War, Civil War, etc., including Terrorism (until such time as insurance
against acts of Terrorism becomes available in the international market on what the
Security Agent accepts to be reasonable commercial terms);
(b)
radioactive contamination;
(c)
Costs incurred arising out of wear, tear, wasting or wearing away, gradual
deterioration, rust, oxidation, corrosion or erosion but not consequent damage Wear
and Tear and gradual deterioration but this shall not exclude consequent loss or
damage;
(d)
Date Recognition Clause;
(e)
Loss of cash, banknotes, treasury notes, money orders, cheques or stamps
(f)
Vehicles licensed for road use.
1.8
Maximum Deductible
Not more than EUR 250,000 each and every loss.
1.9
Main Extensions/Conditions
(a)
Including loss or damage arising from acts of Terrorism, strikes, riots,
civil commotion and criminal/malicious damage (except that insurance against acts of
terrorism will be excluded until such time as that insurance becomes available in the
international market on what the Security Agent accepts to be reasonable commercial
terms);
(b)
Unlimited Natural Perils cover;
(c)
Debris removal;
(d)
Professional Fees;
(e)
Local Authorities clause;
(f)
Automatic Increase Clause;
(g)
Waiver of Average;
166
(h)
Escalation Clause;
(i)
Automatic Capital Additions Clause;
(j)
Expediting Expenses;
(k)
Computer Systems, Data Processing and Ancillary Equipment;
(l)
Malicious & Accidental Erasure of Data, replacement of computer records; Full
Machinery Breakdown, Pressure Explosion/Collapse; and
(m)
Temporary Removal and Inland Transit.
2.
Business Interruption
2.1
The Insured Parties
(a)
The Borrower; and
(b)
The Agent and the Lenders,
Each for their respective rights and interests.
2.2
Indemnity
Fixed operating costs and standing charges including loss of debt service (interest
-including fees- and Principal) ; plus any minimum take or pay obligations; plus increased
cost of working following an interruption to the business as a direct result of physical
loss or damage covered under Paragraph 1, “Material Damage All Risks Insurance” of this
Minimum Insurance Schedule including loss or damage, which would be insured but for the
application of any deductible, that causes interruption to or interference with the
operations of the Project.
2.3
Period of Insurance
From the time that cover expires under Part 1, Paragraph 2 (Delay in Start Up/Advance Loss
of Revenue (construction)” of this Minimum Insurance Schedule and to be maintained by
renewals of the ‘Period of Insurance’, until the full repayment of the loan.
2.4
Sum Insured
EUR 160 million for any 12 months period of indemnification being an amount sufficient to
cover the Project’s fixed operating costs including interest, fees and principal payable
plus any minimum take or pay obligations for the duration of the maximum Indemnity Period.
2.5
Maximum Deductible
167
Not more than 60 days any one occurrence.
2.6
Indemnity Period
Not less than 18 months from the date of the occurrence of loss or damage.
2.7
Main Exclusions
The insurance excludes any event not insured under Paragraph 1, “Material Damage All Risks
Insurance” of this Minimum Insurance Schedule.
2.8
Main Extensions/Conditions
(a)
Suppliers’ extension;
(b)
Denial of Access ;
(c)
Failure of utilities extension (Water, Gas, electricity, telecommunications).
3.
Third Party Liability
3.1
The Insured Parties
(a)
Borrower and any Subsidiary Companies;
(b)
The EPC Contractor and/or Contractor’s Suppliers in respect of the ÅÐÑ
Contract and the Contractor and/or Contractor’s Suppliers in respect of the non-EPC
ancillary Contracts for the duration of the relevant Defects Liability Periods only;
(c)
Any consultants and suppliers for their site activities only;
(d)
The Independent Engineer;
(e)
The Agent and the Lenders and their technical adviser,
Each for their respective rights and interests.
3.2
Period of Insurance
From the earlier of expiry of cover under Part 1, Paragraph 5 “Third Party Liability” of
this Schedule and the date of Start Up and to be maintained by renewals of the ‘Period of
Insurance’, until the full repayment of the loan.
3.3
Indemnity
The legal and contractual liability of an Insured to pay damages, costs and expenses as a
result of:
(a)
Death, bodily injury and disease (including mental shock) of any person;
168
(b)
loss or damage to any property and/or loss of use thereof;
(c)
interference with traffic or property or any easement, right of air, light,
water, support or way or enjoyment of use by obstruction, loss of amenities, nuisance,
trespass or any like cause; and
(d)
libel, slander, defamation, false arrest, invasion of privacy, detention,
eviction or any like cause,
arising out of or in the course of or in connection with the performance, maintenance and
operation of the Project.
3.4
Geographical Limits World-wide.
3.5
Limit of Indemnity
Not less than EUR 30,000,000 for any one occurrence, or all occurrences of a series
consequent upon or attributable to one source or original source, but with respect to
Products Liability in the aggregate.
3.6
Maximum Deductible
Not more than EUR 50,000 in respect of third party property damage only.
3.7
Main Extensions/Conditions
(a)
Products Liability;
(b)
Cross Liabilities Clause;
(c)
World-wide jurisdiction clause;
(d)
Legal costs and expenses; and
(e)
Contingent Motor Liability.
3.8
Main Exclusions
(a)
Death of, or bodily injury to, or illness or disease contracted by, the
employees of the Insured claiming indemnity arising out of or in the course of their
employment;
(b)
Property belonging to or in the charge or under the control of the Insured;
(c)
Liability arising out of the use of mechanically propelled vehicles for which
compulsory insurance or security is required by legislation, except whilst in use as a
tool of trade;`
169
(d)
The cost of making good loss of or damage to property indemnified
under the insurance referred to in paragraph 1, “Material Damage All Risks Insurance”
of this Minimum Insurance Schedule; and,
(e)
Liability arising from ownership, possession, use or control of any aircraft
or watercraft.
The Agent and the Lenders and their technical adviser,
Each of their respective assigns, employees, agents, officers, partners and Directors, Each
for their respective rights and interests.
4.2
Period of Insurance
From the date of Start Up and to be maintained by renewals of the `Period of Insurance’
until the full repayment of the loan.
4.3
Indemnity
All sums for which the Borrower becomes liable to pay in respect of:
(a)
legal liabilities to third parties arising from contamination of the Project
Site, both pre-existing and that which occurs during the Operation of the Project,
which results in a pollution event causing third party bodily injury or property
damage
and/or
(b)
That triggers a statutory requirement to clean up the Project Site
(“
Bodenkasko
”).
4.4
Limits of Indemnity
(a)
EUR 25,000,000 any one occurrence and in the annual aggregate in respect of
liabilities to Third Parties.
(b)
EUR 10,000,000 any one occurrence and in the annual aggregate in respect of
additional (unbudgeted) clean-up costs incurred to clean up the Project Site.
4.5
Main Exclusions
170
Liabilities arising from sudden unintended and unexpected events that are insured under the
Third Party Liability insurance required under Paragraph 4, “Third Party Liability”, of
this Minimum Insurance Schedule.
4.6
Main Extensions/Conditions
(a)
Cover Component 2.6 of the Umwelthaftpflicht-Modell des HUK-Verbandes;
(b)
Loss Mitigation/Avoidance Costs;
(c)
Pure Financial Loss following loss of rights to operate.
4.7
Maximum Deductible Not exceeding EUR 250,000.
5.
Other Required Insurance
5.1
Insurance required by Law
Insurance to comply with all statutory requirements including Motor Vehicle Third Party
Liability insurance for any vehicle owned, hired, leased or borrowed by the Borrower in
connection with the Project.
5.2
Other Insurance
Insurance as is customary, desirable or necessary to comply with the Project Documents, and to
fulfil prudent Developer practice.
171
SCHEDULE 13
Sample Table of Content Regarding
Quarterly Construction Progress Reports
Summary
1.
Inspection Programme
1.1
Visits and Events
1.2
Next Steps
2.
Organisation and Staffing
2.1
Recruitment
2.2
Site Organisation
3.
General Progress and Observations
3.1
Pulp Mill, General
3.2
Pulp Mill, Technical Issues
3.3
Review of Quality of Installations
3.4
Training
3.5
Owner’s Scope of Work
3.5.1
Works
3.5.2
Infrastructure and Connections
3.5.3
Municipalities
3.5.4
Utilities Supply
3.5.5
Administration
3.5.6
Chemicals and Supplies
4.
Permits
4.1
Review of Permit Situation
4.2
New Permits and Inspections
5.
Commissioning Plan
172
5.1
Departmental Plans
5.2
Start-up of Pulp Production
5.3
Operational budget
5.4
Wood Supply
5.5
Wood Transport
6.
Investment Budget Follow-up
7.
Main Events Causing Deviations and Change Orders
8.
Milestones
8.1
Intermediate Steps
8.2
CMC 4
8.3
Start-up
8.4
Operational Acceptance
8.5
PAC 4
8.6
Performance Tests FAC 4
9.
Certificates
9.1
Certificates Issued
9.2
New Certificates
ANNEXES
(A)
Recruitment Plan
(B)
Time Schedules
(C)
Time Schedule Follow-up
173
SCHEDULE 14
Transfer Certificate
Transfer Agreement
Between
[ ]
(the “
Assigning Lender
”)
and
[ ]
(the “
Assignee
”)
Preamble
Whereas
, by the agreement dated 26 August 2002 (the “
Facility Agreement
”) the Assigning Lender
together with the other Lenders has provided to the Borrower the Facility Agreement for an
aggregate principal amount of up to EUR 827,950,000. The Assigning Lender has assumed a Lender’s
Commitment in the amount of EUR [ ].
Whereas
, the Assigning Lender has pursuant to Clause 31.2 of the Facility Agreement the right to
assign to a bank or financial institution its legal position as Lender including all its rights,
benefits and obligations under the Facility Agreement in whole or in part in amounts of not less
than EUR 10 million.
Whereas
, the Assigning Lender is desirous to transfer its rights, benefits and obligations related
to an amount of EUR [ ] of the Facility Agreement to the Assignee and the Assignee is desirous of
assuming the legal position of the Assigning Lender related thereto including all rights, benefits
and obligations.
Now therefore
, the parties to this Transfer Agreement hereby agree as follows:
1.
Definitions
Terms used but not otherwise defined herein shall have the meaning given to them in the
Facility Agreement.
2.
Transfer of Assigning Lender’s Participation in Advances
Subject to the payment to the Agent of a fee in the amount of EUR 1,000 and to the
condition precedent that the Assignee pays the transfer price on the date of payment as
defined in Clause 6.2, the Assigning Lender herewith assigns and
174
transfers and the Assignee herewith assumes, the Assigning Lender’s legal position related
to such Lender’s portion of its participation in each outstanding Advance and/or the
Commitments (applied rateably across the Tranches and in any particular Tranche rateably
between the Assigning Lender’s share in each outstanding Advance thereunder and its undrawn
Commitment in relation thereto) in the amount set out in Clause 6.2 hereof, including but
not limited to all rights, benefits and obligations of the Assigning Lender under the
Facility Agreement, the Shareholders’ Undertaking Agreement, the Security Agreements and
the Security Pooling Agreement as against the Borrower (if transferable) and the other
parties thereto (the “
Transferred Position
”) effective as of the date of payment as defined
in Clause 6.2. Upon the transfer as set forth above becoming effective, the Assigning
Lender shall be released from the obligations related to the Transferred Position to the
Borrower on the one hand and to the Lenders on the other hand.
3.
Confirmations
3.1
The Assignee confirms that it has received a copy of the Facility Agreement and all other
documentation and information required by it in connection with the transaction contemplated
by this Transfer Agreement.
3.2
The Assignee confirms that it has made and will continue to make its own assessment of the
validity, enforceability and sufficiency of the Facility Agreement and the Transfer Agreement
and has not relied and will not rely on the Assigning Lender, the Original Lender and the
Agent or any statements made by any of them in this respect.
3.3
The Assigning Lender hereby confirms that it has fulfilled its obligations arising out of the
Facility Agreement with respect to the Transferred Position until the date hereof. The
Assigning Lender gives no representation or warranty and assumes no responsibility with
respect to the validity or enforceability of the Facility Agreement or any document related
thereto and assumes no responsibility for the financial conditions of the Borrower or any
other party to the Facility Agreement or for the performance and observance by the Borrower or
any other party of any of its obligations under the Facility Agreement and all such
representations and warranties, whether expressed or implied by law or otherwise, are hereby
excluded.
3.4
The Assignee hereby ratifies and confirms the declarations and acts made by the Security
Agent on its behalf pursuant to Clause 4.4 of the Share Pledge Agreement dated 26 August 2002
between the Shareholders as pledgors and the Security Agent as pledgee (as amended from time
to time) and Clause 2.6 of the Account Pledge Agreement dated 26 August 2002 between the
Borrower as pledgor and the Security Agent as pledgee (as amended from time to time).
175
4.
Miscellaneous
4.1
The Assigning Lender shall inform the Agent without undue delay of the transfer of the
Transferred Position pursuant to Clause 2 by sending an executed copy of this Transfer
Agreement to it.
4.2
The Assignee herewith empowers the Agent to exercise such rights, powers of attorney and
discretions as set forth in the provisions of the Financing Documents.
4.3
Without prejudice to any future change of address, all correspondence to the Assignee shall
be sent to the following address:
[ ]
Attn.:
Fax:
5.
Legal Provisions
5.1
Any alteration or amendment to this Transfer Agreement shall be in writing.
5.2
The form and content of this Transfer Agreement shall be subject to and construed in
accordance with the laws of the Federal Republic of Germany in every respect. Non-exclusive
place of jurisdiction for all disputes arising out of or in connection with this Transfer
Agreement shall be Munich.
5.3
Should any provision of this Transfer Agreement be or become wholly or partly invalid, then
the remaining provisions shall remain valid. Invalid provisions shall be construed in
accordance with the intent of the parties and the purpose of this Transfer Agreement.
5.4
This Transfer Agreement has been executed in the German language in three (3) counterparts.
One executed copy shall be provided to the Assigning Lender, the Assignee and the Agent. Each
executed copy shall have the effect of an original.
6.
Commitments and Advances Subject to Transfer
6.1
Assigning Lender’s Commitment prior to transfer:
EUR [ ]
Assigning Lender’s participation in Advances prior to transfer:
EUR [ ]
Position transferred to Assignee:
EUR [ ]
Assigning Lender’s Commitment upon transfer:
EUR [ ]
6.2
Date of payment by Assignee to Assigning Lender:
[ ]
6.3
Account of Assigning Lender to which payment shall be effected:
[ ]
176
[Assigning Lender]
[Assignee]
We hereby confirm the Borrower has consented to the above assignment and transfer and we hereby
agree on our own behalf as Lender and on behalf of the other Lenders to the above Transfer
Agreement.
[place], [date]
[Agent]
177
SCHEDULE 15
Development Costs
Development costs in the amount of EUR 26.5 million which, in the course of the planning of the
project until 31 July 2002, have been confirmed by the Technical Adviser to be project development
costs until Financial Close and which have been incurred mainly in the following areas:
•
project management
•
conceptual pre-planning of the process technology
•
obtaining of authorisations and approval (
Genehmigungsplanung
)
(
Behördenengineering
)
•
availability/provision of wood and logistics
•
financing and subsidies, EU notification, state guarantees
•
ordering/commissioning and legal advice
•
business management and local operating costs
•
archeological excavations
178
SCHEDULE 16
Broker’s Letter of Undertaking
[Letterhead of insurance broker]
LETTER OF UNDERTAKING
To: Bayerische Hypo-und Vereinsbank AG (the “
Agent
” and “
Security Agent
”)
Dear Sirs,
[ ] (the “
Project
”)
We have been requested by Zellstoff Stendal GmbH (the “
Borrower
”), to provide you with certain
confirmations relating to certain insurances arranged by us in relation to the Project. Accordingly
we provide you with the confirmations set out below.
The insurances summarised in Appendix 1 attached to this letter (the “
Insurances
”) are, at the date
hereof, in full force and effect in respect of the risks and liabilities as set out in the
insurance policies evidenced in the policies/cover notes attached as Appendix 2 (the “
Policies
”).
We further confirm in our capacity as insurance brokers to the Borrower that the Insurances are, to
the best of our knowledge and belief placed with insurers, which as at the time of placement, are
reputable and financially sound. We do not, however, make any representations regarding such
insurer’s current or future solvency or ability to pay claims.
We have arranged the Insurances on the basis of information and instructions given by the Borrower.
We have not made any particular or special enquiries regarding the Insurances beyond those that we
normally make in the ordinary course of arranging insurances on behalf of our insurance broking
clients. The confirmations set out in this letter are given by reference to our state of knowledge
at the date hereof.
We shall use our best endeavours to notify the Borrower and the Security Agent as soon as
reasonably practicable after we become aware of an insurer ceasing to carry a claims rating from
Standard & Poors Rating Agency of at least BBB+ or a comparable rating.
Pursuant to instructions received from the Borrower in connection with the Insurances, we hereby
undertake:
(a)
to notify you as soon as reasonably practicable prior to the expiry of the Insurances if we
have not received instructions from the Borrower and/or any insured parties or the agents of
any such party to negotiate renewal, and, in the
179
event of our receiving instructions to renew, to advise you as soon as reasonably
practicable after receipt of the details thereof;
(b)
to notify you as soon as reasonably practicable after giving or receiving notice of
termination of our appointment as brokers in relation to the Insurances;
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