Exhibit 10-7
(Official translation from German)
156
Annex 14
Agreement on the obligations of the shareholders
Agreement on the obligations of the shareholders
Between
▇▇▇▇▇▇ International, Inc.
(hereinafter referred to as "▇▇▇▇▇▇")
Spezialpapierfabrik Blankenstein GmbH
(hereinafter referred to as "SPEZIALPAPIERFABRIK"),
Zellstoff- und Papierfabrik ▇▇▇▇▇▇▇▇▇ Verwaltungs-GmbH
(hereinafter referred to as "VERWALTUNGS-GMBH")
on the one side
and
BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHFT
(hereinafter referred to as "HypoVereinsbank")
on the other side
Zellstoff- und Papierfabrik ▇▇▇▇▇▇▇▇▇ GmbH & Co KG (hereinafter referred to
as "BORROWER") is a joint-venture company founded in the legal form of a GmbH
& Co KG on 31.12.1997, with Zellstoff- und Papierfabrik ▇▇▇▇▇▇▇▇▇
Verwaltungs-GmbH as partner with unlimited liability, and Spezialpapierfabrik
Blankenstein GmbH as limited partner.
The BORROWER intends to convert the existing pulp mill in Blankenstein/
Thuringen into a mill producing on sulphate basis, in which bleached kraft
pulp from softwood is to be produced (hereinafter referred to as "PROJECT").
▇▇▇▇▇▇ agreed to function as a sponsor.
▇▇▇▇▇▇ owns (indirectly through Zellstoff- und Papierfabrik ▇▇▇▇▇▇▇▇▇ Holding
GmbH, Heidenau) 99% of shares in the SPEZIALPAPIERFABRIK, (indirectly through
SPEZIALPAPIERFABRIK) 100% of shares in the VERWALTUNGS-GMBH, and (indirectly
through SPEZIALPAPIERFABRIK) 100% of participation in a limited partnership
of the BORROWER.
SPEZIALPAPIERFABRIK owns 100% of shares in VERWALTUNGS-GMBH.
BAYERISCHE VEREINSBANK AKTIENGESELLSCHAFT and BAYERISCHE HYPOTHEKEN- UND
WECHSEL-BANK agreed, as INITIAL LENDERS, to provide the BORROWER with a
project financing loan in the amount of DM 508 million on the basis of the
LOAN CONTRACT of 6.7.1998 (hereinafter referred to as "LOAN CONTRACT").
Effective as of 31.8.1998, BAYERISCHE HYPOTHEKEN- UND WECHSEL-BANK
AKTIENGESELLSCHAFT merged with BAYERISCHE VEREINSBANK AKTIENGESELLSCHAFT,
wherein the name of the acquiring company was simultaneously changed into
BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHAFT.
The signing of this agreement on the obligations of the shareholders is a
suspense condition for the obligations of the BANKS under the LOAN CONTRACT.
This point having been cleared, ▇▇▇▇▇▇, SPEZIALPAPIERFABRIK, and
VERWALTUNGS-GMBH (hereinafter referred to as "SHAREHOLDERS") have agreed with
the BANKS on the following:
1. DEFINITIONS
The terms and notions used in this Agreement, unless otherwise defined,
shall have the meaning ascribed to them in the LOAN CONTRACT.
2. Obligations of ▇▇▇▇▇▇
▇▇▇▇▇▇ undertakes towards the banks:
a) to maintain a direct or indirect participation interest of at
least 51% in the capital of SPEZIALPAPIERFABRIK and
VERWALTUNGS-GMBH as well as in the limited liability capital
of the BORROWER, unless a third party that owns at least 51%
of the particular capital or of the participation in the
limited liability company, assumes all obligations of ▇▇▇▇▇▇
resulting from this Agreement after consent has been given,
in advance and in writing, by the REPRESENTATIVE (as
subsequently defined in Point 6 (d) of this Agreement), which
must not be wilfully refused taking into account the
interests of the BANKS, and
b) to sufficiently fund SPEZIALPAPIERFABRIK so that
SPEZIALPAPIER-FABRIK can meet its obligations set out under
Points 3 (a) or 3 (b) of this Agreement, and further to
guarantee that SPEZIALPAPIERFABRIK and VERWALTUNGS-GMBH take
proper care to meet their obligations towards the BANKS
resulting from this Agreement.
3. Obligations of Spezialpapierfabrik
Spezialpapierfabrik undertakes towards the banks to do the following:
a) It will ensure that the BORROWER has at its disposal, at the
latest before the BORROWER'S first drawing from the loan under
the LOAN CONTRACT, capital contributions and/or subordinated
partner loans on the basis of the provision under Article 4.1
(h) of the LOAN CONTRACT in the total amount of at least DM 45
millions.
b)
(i) in case the total construction costs (as shown in the
table on page 2 of the FIRST CASH FLOW MODEL under "Total
Construction Costs") exceed the amount of DM 572,150,000
(according to a confirmation issued by the TECHNICAL
ADVISOR) and/or the total financing costs (as shown in
the table on page 3 of the FIRST CASH FLOW MODEL under
"Total Financing Costs") exceed the amount of DM
89,709,000, upon request made by the REPRESENTATIVE,
SPEZIALPAPIERFABRIK shall provide additional funds from
own sources and/or additional subordinated partner loans
in the amount of up to DM 38,800,000, doing so in both
cases to an amount that is reasonably considered
necessary by the REPRESENTATIVE in order for the BORROWER
to be able to finance the amounts exceeding the
abovementioned costs (while taking into consideration the
availability of amounts under the MAIN TRANCHE pursuant
to Article 5.4 of the LOAN CONTRACT); however, this shall
not apply, if the BORROWER has arranged that sufficient
funds are transferred from the PARTNER ACCOUNT to the
REVENUE SUMMARY ACCOUNT, or has otherwise proved, to full
satisfaction of the REPRESENTATIVE, that the BORROWER has
at its disposal additional internal funds and/or
subordinated partner loans to pay for the exceeding costs.
(ii) SPEZIALPAPIERFABRIK further undertakes, after the expiry
of the COMPLETION DATE, upon request made by the
REPRESENTATIVE, to provide the BORROWER with additional
internal funds from own resources and/or subordinated
partner loans up to the amount of the difference of DM 25
million less all actually provided internal funds from
own sources and/or subordinated partner loans including
all amounts actually drawn under the OWN CAPITAL
COLLATERAL, and to prevent the commencement of any
bankruptcy proceedings started against the BORROWER,
doing so to an amount that, in reasonable consideration
of the REPRESENTATIVE and under application of due
diligence of a prudent businessman, is necessary to
permanently ▇▇▇▇ off the circumstances causing the danger
of commencing bankruptcy proceedings against the BORROWER
c) In addition, SPEZIALPAPIERFABRIK undertakes make the BORROWER
meet, in due form and time according to the applicable law,
its obligations pursuant to Article 19.4.1 (r) of the LOAN
CONTRACT.
d) SPEZIALPAPIERFABRIK undertakes not to demand any payment from
the BORROWER under the SUBORDINATED LOANS, should this result
in the BORROWER breaching his obligations under Article
19.4.2 (d). Furthermore, SPEZIALPAPIERFABRIK shall ensure
that the agreement on SUBORDINATED LOANS agree, in form and
content, with the draft agreed upon with the BANKS (in
accordance with Annex 1 to this Agreement), and that
no amendment be made to the agreements regarding the
SUBORDINATED LOANS without a prior written approval by the
REPRESENTATIVE.
e) SPEZIALPAPIERFABRIK undertakes not to approve any reduction in
the limited-liability capital (as defined in Article 3 of the
Memorandum of Association of the BORROWER) of the BORROWER, as
long as principle amounts are owed under the LOAN CONTRACT.
f) SPEZIALPAPIERFABRIK undertakes to maintain its direct
participation interest in the capital of VERWALTUNGS-GMBH and
in the limited-liability capital of the BORROWER in the
amount of at least 51% (unless a prior written consent given
by the REPRESENTATIVE is procured, which must not be wilfully
refused).
g) SPEZIALPAPIERFABRIK undertakes
(i) not to recall ▇▇. ▇▇▇ ▇▇▇▇▇▇ from his position of General
Manager of VERWALTUNGS-GMBH before the expiry of six
months from the COMPLETION DATE, unless another expert
experienced in the pulp and paper industry is appointed
to his position with consent given by the REPRESENTATIVE,
which consent must not be wilfully refused.
(ii) To appoint only experts experienced in the pulp and paper
industry or financial experts to the position of general
manager of VERWALTUNGS-GMBH after the expiry of this
period.
h) SPEZIALPAPIERFABRIK undertakes not to approve any addendum or
amendment to or waive of in relation to the Memorandum of
Association of the BORROWER, if this would substantially affect
the rights of the REPRESENTATIVE and the BANKS under the LOAN
CONTRACT.
i) SPEZIALPAPIERFABRIK undertakes to arrange for the issuance of
an EQUITY COLLATERAL in favour of the BANKS and the BORROWER
in the amount of DM 25 million, that serves as collateral for
its own obligation to provide internal funds from own sources
in accordance with the preceding Point 3 b (1) and (ii), and,
to the extent that it is provided in the form of a collateral
for provision of internal funds from own sources, must
essentially correspond with the draft attached in Annex 2 to
this Agreement. The EQUITY COLLATERAL shall be released by
the BANKS (A) to the extent, to which SPEZIALPAPIERFABRIK
provides funds in accordance with Point 3 (b) (i) or (ii), or
(B) after the COMPLETION DATE to the extent, to which funds -
that would otherwise be available for payout to
SPEZIALPAPIERFABRIK pursuant to Article 20.2 (b) of the LOAN
CONTRACT - the are remitted from the PARTNER ACCOUNT to a
security account held with VEREINSBANK, branch office in
Dresden under the name of the BORROWER, which security
account serves as a collateral for the obligations of
SPEZIALPAPIERFABRIK in accordance with Point 3 (b) (ii)
(irrespective of the fact, whether or not the BORROWER made
any profit in the immediately preceding business year). This
account must be pledged to the BANKS and the BORROWER as a
collateral for the SPEZIALPAPIERFABRIK's obligation to
provide funds from own sources
in accordance with Point 3 (b) (ii) of this Agreement
according to a reasonable pledge contract demanded by the
REPRESENTATIVE.
j) SPEZIALPAPIERFABRIK undertakes, as long as there exist any
due amounts to be repaid under the LOAN CONTRACT or some
other payment obligation under the LOAN CONTRACT, to provide
the REPRESENTATIVE with copies, in sufficient numbers for all
LENDERS, of the following documentation that must be prepared
in conformity with all relevant statutory and professional
requirements as well as according to generally accepted
accounting principles.
- as soon as available, however no later than ninety (90)
days after the end of every business year, a set of its
audited financial statements including a balance sheet,
income statement, auditor's report for
SPEZIALPAPIERFABRIK, and the additional taxation balance
sheet with regard to its participation as
limited-liability partner in the BORROWER;
- as soon as available, however no later than sixty (60)
days after the end of every business half-year, a set of
interim half-year financial statements including a
balance sheet and income statement;
- as soon as available, the tax returns and tax assessments
of SPEZIALPAPIERFABRIK as well as uniform and separate
determination of profits of the BORROWER in relation to
the revenue of SPEZIALPAPIERFABRIK and/or the BORROWER.
This financial information (except for the tax return and the
statements of determination of profits) must be prepared in the
English language or in English translation and certified by
SPEZIALPAPIERFABRIK, and handed over to the REPRESENTATIVE.
k) SPEZIALPAPIERFABRIK undertakes to provide the REPRESENTATIVE
with a copy of any SUBORDINATED LOAN [agreement] agreed upon
with the BORROWER.
The obligations of SPEZIALPAPIERFABRIK in accordance with
paragraphs (a), (b), (c), and (i) are valid also towards the
BORROWER as the beneficiary party pursuant to Section 328 of BGB
[German Civil Code].
4. Obligations of ▇▇▇▇▇▇ and Spezialpapierfabrik
▇▇▇▇▇▇ and SPEZIALPAPIERFABRIK undertake to meet all essential
aspects of the obligations assumed under the PURCHASE CONTRACT of
July 3, 1994 concluded with the TREUHANDANSTALT, ANSTALT DES
OFFENTLICHEN RECHTS, with respect to the participation interests of
the BORROWER (in its subsequently amended version).
5. Obligations of the shareholders
The SHAREHOLDES undertake towards the BANKS:
a) not to demand any distribution of dividends or other payment
from the BORROWER and/or, in the case of ▇▇▇▇▇▇, not to
demand such payout, that would result in the BORROWER to
breach its obligations under the LOAN CONTRACT.
b) Not to initiate any judicial proceedings against the BORROWER
and not to adopt any resolution on the liquidation or
dissolution of the BORROWER without prior written approval by
the REPRESENTATIVE, which must not be wilfully refused while
taking into consideration the interests of the BANKS; and
c) To immediately pay back the BORROWER any amount that they have
received from the BORROWER (including by way of offsetting
mutual receivables) (in their respective functions of a partner
of unlimited liability, partner with limited liability and, in
the case of SPEZIALPAPIERFABRIK, as lender of subordinated
loans), if this payment would result in the BORROWER to breach
its obligations under the LOAN CONTRACT, or - in the case of a
re-payment instalment under the SUBORDINATED LOAN - if such
payment was not yet due.
6. MISCELLANEOUS
a) This Agreement as well as the rights and obligations of the
SHAREHOLDERS and the BANKS are governed by the law of the
Federal Republic of Germany and shall be interpreted in
conformity with the law of the Federal Republic of Germany.
The place of performance of this Agreement shall be Munich.
Munich shall be the place of jurisdiction for any disputes
arising from or in connection with this Agreement. However,
the REPRESENTATIVE has the right, at his discretion, to
initiate judicial proceedings in any other jurisdiction,
where some assets of the SHAREHOLDERS are located.
b) ▇▇▇▇▇▇ herewith appoints SPEZIALPAPIERFABRIK to be its
domestic representative, however, only with regard to such
judicial proceedings that have been initiated against ▇▇▇▇▇▇
in the Federal Republic of Germany in connection with this
Agreement.
c) Should a provision of this Agreement be or become fully or
partially invalid, the remaining provisions shall remain in
force. The invalid provisions shall be interpreted in
conformity with the will expressed by the parties and the
purpose of this Agreement.
d) HypoVereinsbank (called "REPRESENTATIVE" in this capacity)
represents any other bank, to which any rights and
obligations from this Agreement devolve, in all aspects of
this Agreement.
e) The BANKS have the right to transfer their rights and
obligations resulting from this Agreement to a third party,
as long as they transfer to this third party the shares of
their credit line [balances] in accordance with Article 30 of
the LOAN CONTRACT. The SHAREHOLDERS took note that according
to the terms and conditions of the DEUTSCHE AUSGLEICHSBANK
(hereinafter referred to as "DtA")
and/or of the KREDITANSTALT FUR WIEDERAUFBAU (hereinafter
referred to as "KfW) the BANKS my be bound to transfer their
rights and obligations resulting from this Agreement to DtA
and/or KfW, if the BANKS have committed themselves, towards
DtA and/or KfW, to assumption of liability for the loans
provided to the BORROWER.
f) Any addenda and amendments to this Agreement must be made in
writing.
g) This Agreement shall remain in force as long as any amounts
(capital, interest, dues or other) are owed under the LOAN
CONTRACT, wherein ▇▇▇▇▇▇ shall be released from all
obligations as soon as MECER, in conformity with Point 2 (a)
no longer owns at least 51% of shares or limited-liability
partner share in SPEZIALPAPIERFABRIK, VERWALTUNGS-GMBH, and
the BORROWER.
..................... .................................
▇▇▇▇▇▇ International, Inc.
.................... ............................................
Spezialpapierfabrik Blankenstein GmbH
..................... ..........................................................
Zellstoff- und Papierfabrik ▇▇▇▇▇▇▇▇▇ Verwaltungs-GmbH
Munich, 2.11.99
.................... .........................................................
Bayerische Hypo- und Vereinsbank Aktiengesellschaft
We herewith undertake to act a domestic representative of ▇▇▇▇▇▇
International, Inc. in accordance with the above Point 6 b).
.................... ............................................
Spezialpapierfabrik Blankenstein GmbH
