EXHIBIT 2.2
XXXXXXXX CHALLENGE FORESTS LIMITED
COMPANY
THE BANKS AND FINANCIAL INSTITUTIONS
LISTED IN SCHEDULE ONE
LENDERS
BANK OF NEW ZEALAND
FACILITY AGENT
BANK OF NEW ZEALAND
SECURITY AGENT
BANK OF NEW ZEALAND
LEAD ARRANGER
NZ$300,000,000 SENIOR SECURED REVOLVING
CREDIT FACILITIES AGREEMENT
XXXXXXX XXXXXXX
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CONTENTS
1. INTERPRETATION....................................................... 3
2. FACILITIES........................................................... 15
3. LENDERS.............................................................. 16
4. CONDITIONS PRECEDENT................................................. 16
5. ADVANCES............................................................. 17
6. INTEREST............................................................. 18
7. PREPAYMENT AND FINAL REPAYMENT....................................... 19
8. CANCELLATION......................................................... 20
9. REPRESENTATIONS AND WARRANTIES....................................... 20
10. UNDERTAKINGS......................................................... 23
11. DEFAULT.............................................................. 29
12. CHANGES IN CIRCUMSTANCES............................................. 32
13. PAYMENTS............................................................. 33
14. TAXES................................................................ 34
15. DEFAULT INTEREST..................................................... 36
16. SET-OFF AND DEPOSITS................................................. 37
17. SHARING.............................................................. 37
18. RELATIONSHIP OF LENDERS TO AGENTS.................................... 39
19. INDEMNITIES.......................................................... 43
20. ASSIGNMENT........................................................... 44
21. NOTICES.............................................................. 46
22. FEES................................................................. 47
23. COSTS AND EXPENSES................................................... 48
24. EVIDENCE OF DEBT..................................................... 49
25. MISCELLANEOUS........................................................ 49
26. GOVERNING LAW........................................................ 50
27. COUNTERPARTS......................................................... 50
SIGNATURES...................................................................... 51
SCHEDULE 1...................................................................... 56
Lenders ........................................................... 56
SCHEDULE 2...................................................................... 57
Conditions Precedent................................................. 57
SCHEDULE 3...................................................................... 59
Form of Director's Certificate....................................... 59
SCHEDULE 4...................................................................... 63
Form of Accession Agreement.......................................... 63
SCHEDULE 5...................................................................... 65
Drawdown Request for an Advance denominated in NZ Dollars............ 65
SCHEDULE 6...................................................................... 67
Drawdown Request for an Advance denominated in US Dollars............ 67
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SCHEDULE 7...................................................................... 69
Transfer Certificate................................................. 69
SCHEDULE 8...................................................................... 73
Form of Compliance Certificate....................................... 73
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AGREEMENT dated February 2003
PARTIES
XXXXXXXX CHALLENGE FORESTS LIMITED ("COMPANY")
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE ONE ("LENDERS")
BANK OF NEW ZEALAND ("FACILITY AGENT")
BANK OF NEW ZEALAND ("SECURITY AGENT")
BANK OF NEW ZEALAND ("LEAD ARRANGER")
AGREEMENT
1. INTERPRETATION
1.1 DEFINITIONS: In this agreement, unless the context otherwise requires:
"ADVANCE" means an advance made or to be made by the Lenders under a
Facility or, as the context may require, the principal amount thereof
for the time being outstanding.
"AGENTS" means the Facility Agent and the Security Agent and "AGENT"
means either of them.
"APPROVED ISSUER LEVY" has the meaning given to that term in section 86
F of the Stamp and Cheque Duties Xxx 0000.
"AVAILABILITY PERIOD" means, in relation to a Facility, the period
commencing on the Commencement Date and ending on the earlier of:
(a) the date on which the whole of that Facility is cancelled; and
(b) the Expiry Date of that Facility.
"AVAILABLE FACILITY" means, at any time in relation to a Facility, the
Facility Amount of that Facility less the aggregate of all outstanding
Advances under that Facility at that time (taking any Advance
denominated in US Dollars at its NZ Dollar Equivalent).
"BID SETTLEMENT RATE" means, in relation to a particular period
("SPECIFIED PERIOD") and an amount denominated in NZ Dollars, either:
(a) the bid settlement rate (rounded upwards, if necessary, to the
nearest four decimal places) as displayed at or about 10.45am
on the first day of the specified period on the Reuters
Monitor Screen page BKBM (or its successor page) for bank
accepted Bills having a term approximately equal to the
specified period; or
(b) if there is no such rate displayed for bank accepted Bills
having that term, then the average of the rates quoted by each
of the Reference Banks as being its buy rate for such bank
accepted Bills at or about that time on that date.
4
"XXXX" means a xxxx of exchange as defined in the Bills of Xxxxxxxx Xxx
0000.
"BORROWERS" means the Company and each Subsidiary of the Company which
becomes a borrower under this agreement pursuant to clause 2.4.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are open for business in Wellington and Auckland and, for the
purposes of payments in, and the calculation of rates for amounts
denominated in, US Dollars:
(a) if a payment is to be made, New York City; and
(b) if a rate is to be calculated, London or, if paragraph (b)(ii)
of the definition of LIBOR is applicable, New York City.
"CAPITAL EXPENDITURE" means, in respect of any period, payments for
expenditure of the Group during that period on fixed assets (other than
in the nature of significant improvements on those assets).
"CASH" means all cash on hand, short term deposits and other cash
equivalents.
"CHIEF EXECUTIVE OFFICER" means the chief executive officer for the
time being of the Company.
"CNIFP" means the Central North Island Forest Partnership.
"CNIFP MANAGEMENT AGREEMENT" means the agreement dated 27 September
1996 between the Company and CNIFP relating to the management of CNIFP
(as amended).
"COLLATERAL" means the property, assets and undertaking from time to
time subject to the Security.
"COMMITMENT" means, in relation to a Lender and a Facility, the amount
in respect of that Facility set out opposite that Lender's name in
schedule 1, as varied from time to time in accordance with this
agreement.
"COMPANY" means Xxxxxxxx Challenge Forests Limited.
"COMMENCEMENT DATE" means the earlier of the date on which a drawing is
first made under the Facilities and 28 February 2003.
"DEBT" means any indebtedness present or future, actual or contingent
in respect of money borrowed or raised or any financial accommodation
whatever, including indebtedness under or in respect of a negotiable or
other financial instrument, Guarantee of Debt, interest, currency
exchange, hedge or other arrangement of any kind (calculated on a net
and marked to market basis), Redeemable Share, share the subject of a
Guarantee, discounting arrangement, finance or capital Lease, hire
purchase, deferred purchase price for more than 90 days (other than in
the ordinary course of business) of an asset or service or an
obligation to deliver goods or other property or provide services paid
for in advance by a financier or in relation to another financing
transaction and includes the Facilities. For the avoidance of doubt,
there shall be no double counting.
"DRAWDOWN DATE" means, in relation to an Advance, the date specified in
the relevant Drawdown Request for the making of that Advance.
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"DRAWDOWN REQUEST" means:
(a) in relation to an Advance to be denominated in NZ Dollars, a
request substantially in the form set out in schedule 5; and
(b) in relation to an Advance to be denominated in US Dollars, a
request substantially in the form set out in schedule 6.
"EBIT" means, at any date, in respect of any period ending on that
date, the consolidated earnings of the Group for that period which
would be disclosed by consolidated financial statements of the Group if
they were prepared as at that date for that period:
(a) before any deduction of or provision for Tax;
(b) before any deduction of Interest Expense;
(c) after adjustment for unusual items as disclosed in the notes
to the financial statements;
(d) after adjustment to remove profits or losses of any Group
Member (other than the Company) which have been consolidated
within operating profit but are attributable to any third
party (not being a Group Member);
(e) after excluding unrealised profits or losses on foreign
currency monetary items; and
(f) after eliminating any unrealised revaluations.
"EBITDA" means, at any date, in respect of any period ending on that
date, the sum of:
(a) EBIT;
(b) depreciation on fixed assets;
(c) amortisation of any goodwill, any intangible assets and any
acquisition costs; and
(d) any share of retained surpluses of associated companies
required to be included in accordance with NZ GAAP,
of the Group on a consolidated basis during that period which would be
disclosed by consolidated financial statements of the Group if they
were prepared as at that date for that period.
"ENVIRONMENTAL LAW" means a provision of a law or a law which relates
to any aspect of the environment, health or planning including the
Resource Management Xxx 0000, the Hazardous Substances and New
Organisms Xxx 0000, the Building Act 1991 and the Health and Safety in
Employment Xxx 0000.
"EVENT OF DEFAULT" means any event specified in clause 11.1 or any
event which, with the passing of time or the giving of notice or both,
would constitute such an event.
"EVENT OF REVIEW" means the event or series of events specified in
clause 11.2.
"EXCLUDED SUBSIDIARIES" means Kaingaroa Holdings Limited, Forestry
Corporation of New Zealand Limited and their respective Subsidiaries.
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"EXISTING FACILITIES AGREEMENT" means the US$200 million senior secured
credit facilities agreement dated 2 March 2001 made between, amongst
others, the Company and Credit Suisse First Boston as facility agent,
security agent and lead arranger.
"EXPIRY DATE" means:
(a) in relation to the Three Year Facility, the date falling three
years after the Commencement Date; and
(b) in relation to the Five Year Facility, the date falling five
years after the Commencement Date,
provided that if the Expiry Date would otherwise fall on a day which is
not a Business Day the Expiry Date will be the next Business Day.
"FACILITIES" means the Three Year Facility and the Five Year Facility,
and "FACILITY" means either of them.
"FACILITY AMOUNT" means:
(a) in relation to the Three Year Facility, NZ$150,000,000; and
(b) in relation to the Five Year Facility, NZ$150,000,000,
in each case as reduced from time to time in accordance with this
agreement.
"FINANCIAL MODEL" means the document entitled "Financial Model" dated
December 2002 and posted on the Intralinks website.
"FINANCIAL MODEL BASE CASE" means the document entitled "Financial
Model Base Case" dated December 2002 and posted on the Intralinks
website.
"FIVE YEAR FACILITY" means the facility granted by the Lenders to the
Borrower in this agreement under which the Lenders agree to make
advances to the Borrowers on the terms applicable to that facility.
"FREE CASH FLOW" means, at any date, in respect of the 12 month period
ending on that date, EBITDA for that period:
(a) minus the amount of any increase or plus the amount of any
decrease in working capital for that period;
(b) minus Capital Expenditure during that period (such amount not
to exceed a maximum amount of NZ$10,000,000 or such higher
maximum amount as the Company and the Lenders may agree if the
Total Assets of the Group increase by more than 10% from the
date on which such maximum amount was last agreed);
(c) minus Tax paid or payable in respect of that period; and
(d) minus non cash equity earnings for that period.
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"GEARING RATIO" means, at any date, the ratio calculated as follows:
Gearing Ratio = A /B, where:
"A" = Net Debt (excluding any interest or currency exchange and
hedge arrangement of any kind) of the Group Members
outstanding at that date less Cash at that date; and
"B" = EBITDA in respect of the 12 month period ending on that date.
"GENERAL SECURITY DEED" means the general security deed dated on or
about the date of this agreement made by the Obligors in favour of the
Security Agent.
"GOVERNMENT AGENCY" means any government or any governmental,
semi-governmental or judicial agency or authority, including any
self-regulatory organisation established under statute or any stock
exchange.
"GROUP" means, at any time, the Company and its Subsidiaries at that
time.
"GROUP MEMBER" means a member of the Group.
"GUARANTEE" means any guarantee, indemnity, letter of credit, legally
binding letter of comfort, suretyship or other assurance against loss.
"INTEREST EXPENSE" means, at any date, in respect of the 12 month
period ending on that date, the aggregate net amount (taking into
account amounts payable or receivable under any hedge agreement
relating to interest rate exposure) of all interest and amounts in the
nature of interest or of similar effect to interest paid or payable by
the Group on a consolidated basis during that period and which would be
disclosed by consolidated financial statements of the Group if they
were prepared as at that date for that period including:
(a) any dividend or distribution paid or payable on any Redeemable
Shares included as Debt (for the avoidance of doubt this
excludes any dividend or distribution on any such Redeemable
Share issued on terms approved by the Lenders and in relation
to which dividends or distributions may accrue but are not
required to be paid in cash);
(b) the interest portion of rentals in respect of finance Lease
obligations;
(c) the face amount of bills of exchange or other financial
instruments drawn, issued, endorsed or accepted by a Group
Member less their net proceeds after discount or issue and
payment of any acceptance, endorsement, underwriting or
similar fee apportioned as appropriate between financial
periods;
(d) all line, facility, letter of credit, guarantee and similar
fees and all fees and other amounts of a regular or recurring
nature payable in relation to Debt but not:
(i) unused line fees; and
(ii) establishment arrangement and other fees payable once
only on the initial provision of financial
accommodation and agency fees;
(e) all other expenses and amounts that are required by NZ GAAP to
be treated as interest or financing costs.
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"INTEREST PAYMENT DATE" means, in relation to an Interest Period, the
last day of that Interest Period and, in addition, in relation to an
Interest Period of longer than three months, each day falling at three
monthly intervals during that Interest Period.
"INTEREST PERIOD" means, in relation to an Advance, a period selected
in accordance with clause 6.1.
"LEASE" means any lease, charter, hire purchase or hiring arrangement
of any property or transaction having a similar effect.
"LIQUIDATION" includes liquidation, receivership, compromise,
arrangement, amalgamation, administration, statutory management,
reconstruction, winding up, dissolution, assignment for the benefit of
creditors or bankruptcy.
"LIBOR" means, in relation to a particular period ("SPECIFIED PERIOD"):
(a) the rate displayed on the Telerate Page 3750 (or any
equivalent or successor page) as the London interbank offered
rate for deposits in US Dollars at or about 11am (London time)
two Business Days prior to the commencement of the specified
period for a period comparable to the specified period; or
(b) if US Dollars is not on any relevant date quoted on the
Telerate Page 3750 (or any such equivalent or successor page),
the rate per annum determined by the Facility Agent to be
equal to the arithmetic mean (rounded upwards, if necessary,
to the nearest four decimal places) of the rates notified to
the Facility Agent by each of the Reference Banks as the rate
at which it is offering deposits in US Dollars in the London
interbank market at or about 11am (London time) two Business
Days prior to the commencement of the specified period for a
period comparable to the specified period, provided that if on
any date for the determination of LIBOR:
(i) less than all but not less than two such Reference
Banks provide the Facility Agent with such
quotations, the Facility Agent shall calculate LIBOR
in accordance with the foregoing provisions on the
basis of the quotations of those banks providing such
quotations; or
(ii) less than two Reference Banks provide such
quotations, LIBOR means the rate per annum determined
by the Facility Agent to be the arithmetic mean of
the offered quotations for deposits in US Dollars for
the specified period which three leading banks in New
York City selected by the Facility Agent are quoting
in the New York interbank market to leading European
banks at or about 11am (New York City time) on that
date.
"MAJORITY LENDERS" means a group of Lenders whose aggregate Commitments
under the Facilities amount in aggregate to more than 65% of the Total
Commitments under the Facilities.
"MARGIN" means:
(a) in relation to an Advance made prior to the date of the first
compliance certificate delivered to the Lenders pursuant to
clause 10.1(a)(iv), the percentage rate per annum set out
below applicable to the Facility under which that Advance is
made:
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MARGIN % PER ANNUM
---------------------------------------------
THREE YEAR FACILITY FIVE YEAR FACILITY
---------------------------------------------
0.90 1.00
---------------------------------------------
(b) in relation to an Advance made at any time thereafter, the
percentage rate per annum applicable to the Facility under
which that Advance is made as set out below opposite the
Gearing Ratio which was reported by the Company in the most
recent compliance certificate delivered to the Lenders under
clause 10.1(a)(iv) prior to the Drawdown Date for that
Advance:
MARGIN % PER ANNUM
---------------------------
THREE YEAR FIVE YEAR
GEARING RATIO FACILITY FACILITY
------------------------------------------------------------------------------
Greater than 3.25 times 0.90 1.00
------------------------------------------------------------------------------
Less than or equal to 3.25 times but greater 0.75 0.85
than 2.50 times
------------------------------------------------------------------------------
Less than or equal to 2.50 times but greater 0.60 0.70
than 1.75 times
------------------------------------------------------------------------------
Less than or equal to 1.75 times 0.50 0.50
------------------------------------------------------------------------------
"MATERIAL ADVERSE EFFECT" means a material adverse effect (a) on the
financial condition or business or assets of the Group as a whole and
(b) on the Borrowers' ability to perform and comply with their
obligations under any Transaction Document.
"MATERIAL CONTRACTS" means:
(a) the amended and restated deed relating to assets and
liabilities dated 3 April 2000 between Xxxxxxxx Challenge
Limited and Xxxxxxxx Challenge Paper Limited;
(b) the inter-division agreement dated 5 October 1999 between the
Company and Tasman Pulp and Paper Company Limited (now Norske
Xxxx Tasman Limited), as amended;
(c) the fibre supply agreement dated 28 July 2000 between the
Company, Xxxxxxxx Challenge Forests (Manufacturing) Limited
and Norske Xxxx Tasman Limited as amended;
(d) the supply agreement dated 28 February 2001 between Xxxxxxxx
Challenge Forests Industries Limited and Xxxxxxxx Building
Products Limited;
(e) the supply agreement dated 1 February 1988 between Xxxxxxxx
Challenge Forests Industries Limited and Xxxxxx Xxxx Xxxxxx
Limited trading as Packaging New Zealand;
(f) the supply agreement dated 28 July 2000 between Xxxxxxxx
Challenge Forests Industries Limited and Xxxxxxxx Merchants
Limited;
(g) the agreement relating to the supply of lumber and plywood
dated 25 July 2001 between Tasman KB Pty Limited and Xxxxxxxx
Challenge Forests Industries Limited; and
10
(h) the Tasman supply contracts dated 18 November 1963 and 27
October 1966 and the implementation agreement dated 19
December 1995 between Citic New Zealand Limited (BVI) (In
Receivership), Forestry Corporation of New Zealand Limited (In
Receivership), Xxxxxxxx Challenge Forests Industries Limited
and Xxxxxxxx Challenge Forests (Manufacturing) Limited,
each as modified, novated, supplemented, varied or replaced from time
to time.
"MINIMUM NET TANGIBLE ASSETS" means, at any date, Total Tangible Assets
of the Group less Total Liabilities of the Group as at that date.
"MORTGAGES" means the mortgages made or, as the context may require, to
be made by certain of the Obligors in favour of the Security Agent in
respect of the properties listed in schedule 4 to the General Security
Deed.
"NET DEBT" means, at any time, Debt less Cash at that time.
"NON-RECOURSE LOAN" means Debt which is incurred by any Obligor for the
purpose of, and applied in, making an On-Loan and which gives rise to
no obligation on the part of such Obligor (or any other Obligor) other
than the obligation to pay to the creditor in respect thereof any
moneys actually received or recovered by that Obligor in respect of the
On-Loan.
"NZ DOLLAR EQUIVALENT" means, in relation to an amount of NZ Dollars,
that amount, and, in relation to an amount of US Dollars, the amount of
NZ Dollars which the Facility Agent could purchase with that amount of
US Dollars at the Facility Agent's spot rate of exchange for purchasing
NZ Dollars with US Dollars in the New Zealand interbank market at 11am
(local time) two Business Days prior to the day on which the
calculation is required to be made.
"NZ DOLLARS" and "NZ$" means the lawful currency of New Zealand.
"NZ GAAP" means generally accepted accounting practice as defined in
section 3 of the Financial Reporting Xxx 0000.
"OBLIGORS" means the Borrowers and the Restricted Subsidiaries.
"OBLIGORS' GUARANTEE" means the guarantee and indemnity dated on or
about the date of this agreement made by the Obligors in favour of the
Security Agent.
"ON-LOAN" means Debt advanced by an Obligor to an Other Subsidiary out
of the proceeds of a Non-Recourse Loan.
"ON-LOAN ASSIGNMENT" means a Security Interest created by an Obligor
over its rights in relation to an On-Loan as security for its
obligations in respect of the Non-Recourse Loan out of which such
On-Loan was made.
"ORIGINAL DOLLAR AMOUNT" means, in relation to an Advance denominated
in NZ Dollars, the amount thereof, and in relation to an Advance
denominated in US Dollars, the amount of NZ Dollars which was the basis
for the making of that Advance, in each case as reduced by prepayment.
"OTHER SUBSIDIARY" means a Group Member which is not an Obligor.
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"OUTSTANDING MONEY" means, at any time in relation to a Facility, the
aggregate amount of all Advances, interest (including default
interest), fees, costs and all other amounts payable by the Borrowers
in relation to that Facility under this agreement and outstanding at
that time.
"PERMITTED DISPOSALS" means:
(a) a disposal in the ordinary course of business;
(b) a disposal by one Restricted Subsidiary to any other
Restricted Subsidiary;
(c) the creation of a Permitted Security Interest;
(d) the payment of cash; and
(e) the allotment or issue of share capital (or equivalent).
"PERMITTED SECURITY INTEREST" means:
(a) the Security;
(b) a Security Interest arising by operation of law in the
ordinary course of day-to-day trading and not securing Debt in
respect of which the debtor duly pays the indebtedness secured
by that Security Interest within the customary time for
payment other than indebtedness contested in good faith;
(c) a right of set-off included in a commercial contract in the
ordinary course of business;
(d) a netting or set-off right relating to any bank accounts
maintained by a Group Member or Group Members in the ordinary
course of business (but not including any such right relating
to a dedicated cash collateral account or other arrangement
having similar effect) or included in the terms of any master
agreement relating to derivative transactions entered into by
any Obligor;
(e) a Security Interest on any asset acquired after the
Commencement Date which secures the purchase price of the
asset so long as there is no increase in the amount secured
and the secured Debt is retired and the Security Interest is
released within 12 months of the relevant acquisition;
(f) a Security Interest granted by a Subsidiary acquired after the
Commencement Date created prior to (and not in contemplation
of) the acquisition securing Debt of that Subsidiary so long
as there is no increase in the amount secured and the secured
Debt is retired and the Security Interest is released within
12 months of the acquisition;
(g) a Security Interest approved by all of the Lenders;
(h) any On-Loan Assignment; or
(i) any other Security Interest or Security Interests which in
aggregate secure Debt of an amount not exceeding
NZ$10,000,000.
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"PRO RATA SHARE" means, at any time in relation to a Lender, the
proportion which that Lender's aggregate Commitments bears to the
aggregate Facility Amounts under both Facilities at that time.
"REDEEMABLE SHARES" means:
(a) shares which are redeemable in cash, or by the issue of other
redeemable shares, either compulsorily, or at the option of
the holder or issuer of such shares; and
(b) units in any trust which are analogous in nature to the shares
referred to in paragraph (a), if that unit trust is a Group
Member, or if a Group Member is responsible for the redemption
of those units.
"REFERENCE BANKS" means, for the purposes of the definition of "Bid
Settlement Rate", Bank of New Zealand, ANZ Banking Group (New Zealand)
Limited, Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. acting
through its Rabobank New Zealand Branch and The National Bank of New
Zealand Limited, and, for the purposes of the definition of "LIBOR",
three leading banks offering US Dollars in London in the London
interbank market, as selected by the Facility Agent, or any substitute
or other banks agreed in writing by the Lenders and the Borrowers from
time to time as being Reference Banks for the purposes of this
agreement.
"RELATED ENTITY" means an entity which is related within the meaning of
section 2(3) of the Companies Act, but as if company includes any
entity.
"REPAYMENT DATE" means, in relation to an Advance, the date specified
as such in the Drawdown Request applicable to that Advance.
"RESTRICTED SUBSIDIARY" means:
(a) any wholly-owned Subsidiary of the Company whose Total
Tangible Assets (disregarding any investments in Subsidiaries
and inter-company loans) are 5% or more of Total Tangible
Assets of the Group (based on the last audited consolidated
financial statements); and
(b) any other person to the extent necessary to ensure that at all
times the Total Tangible Assets (disregarding any investments
in Subsidiaries and inter-company loans) of the Obligors are
not less than 95% of Total Tangible Assets of the Group,
but always excluding the Excluded Subsidiaries and Tarawera for the
purposes of these calculations.
"SECURITY" means:
(a) the General Security Deed;
(b) the Obligors' Guarantee;
(c) the Mortgages; and
(d) the Specific Security Agreement,
and any other Security Interest or Guarantee accepted by the Lenders
and/or the Security Agent in their absolute discretion as security for,
amongst other things, the performance of the Borrowers' obligations
under this agreement.
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"SECURITY INTEREST" includes any mortgage, pledge, lien, charge,
finance lease, sale and leaseback or any security interest or
arrangement of any kind the effect of which is to give one creditor
priority over another or other creditors with respect to any asset. It
includes contractual set-off, retention of title other than in the
ordinary course of day-to-day trading and a deposit of money by way of
security but it excludes a charge or lien arising in favour of a
Government Agency by operation of statute unless there is default for
more than 30 days in payment of moneys secured by that charge or lien.
"SPECIFIC SECURITY AGREEMENT" means the specific security agreement
over investment securities dated on or about the date of this agreement
granted by Xxxxxxxx Challenge Forests (Manufacturing) Limited in favour
of the Security Agent.
"SPECIFIED RATE" means:
(a) in relation to an Advance denominated in NZ Dollars, the Bid
Settlement Rate; and
(b) in relation to an Advance denominated in US Dollars, LIBOR.
"SUBSIDIARY" has the meaning given in section 5 of the Companies Xxx
0000, but as if company includes an in-substance subsidiary in
accordance with any approved financial reporting standard.
"TARAWERA" means Tarawera Forests Limited.
"TAX" means Income Tax as defined under SSAP 12.
"TEST DATE" is defined in clause 10.4.
"THREE YEAR FACILITY" means the facility granted by the Lenders to the
Borrower in this agreement under which the Lenders agree to make
advances to the Borrowers on the terms applicable to that facility.
"TOTAL ASSETS" means, on any date in relation to a Subsidiary, the
Obligors or the Group, the aggregate amount on a consolidated basis of
all assets of that Subsidiary, the Obligors or the Group (as
applicable) which would be disclosed by consolidated financial
statements of the Group if they were prepared as at that date.
"TOTAL COMMITMENTS" means, in relation to a Facility, at any time, the
aggregate of the Commitments under that Facility at that time.
"TOTAL LIABILITIES" means, on any date in relation to the Group, the
aggregate amount on a consolidated basis of all liabilities of the
Group which would be disclosed by consolidated financial statements of
the Group if they were prepared as at that date.
"TOTAL TANGIBLE ASSETS" means, on any date in relation to a Subsidiary,
the Obligors or the Group, the Total Assets of that Subsidiary, the
Obligors or the Group (as applicable) as at that date less assets which
in accordance with NZ GAAP are classified as intangible assets.
"TRANSACTION DOCUMENTS" means this agreement and the Security or any
one or more of them.
"US DOLLARS" and "US$" means the lawful currency of the United States
of America.
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"US DOLLAR EQUIVALENT" means, in relation to an amount of NZ Dollars,
the amount of US Dollars which the Facility Agent could purchase with
that amount of NZ Dollars at the Facility Agent's spot rate of exchange
for purchasing US Dollars with NZ Dollars in the New York City
interbank market at 11am (local time) two Business Days prior to the
day on which that calculation is required to be made.
1.2 REFERENCES: Except to the extent that the context otherwise requires,
any reference in this agreement to:
"CONTROL" has the meaning given in NZ GAAP and "CONTROLLED" shall be
construed accordingly.
a "DIRECTIVE" includes any present or future directive, regulation,
request, requirement, voluntary credit restraint programme or
notification by any means or a change in interpretation or application
of any law by any Government Agency (in each case, whether or not
having the force of law but, if not having the force of law, compliance
with which is in accordance with the general practice of persons to
whom the directive is addressed).
"DISPOSAL" includes any sale, assignment, exchange, transfer,
concession, loan, lease, surrender, licence, reservation, waiver,
compromise, release, dealing, parting with possession, or the granting
of any option, right or interest whatever, or any agreement for any of
the same, and "DISPOSE" means to make a disposal, and "ACQUISITION" and
"ACQUIRE" shall be construed accordingly.
the "DISSOLUTION" of a person includes the liquidation or bankruptcy of
that person, or (where the person is a company) its removal from the
register, and any equivalent or analogous procedure under the laws of
any relevant jurisdiction.
"FINANCIAL STATEMENTS" include statements of financial position,
financial performance, movements in equity and cash flows, together
with any statements, reports (including, without limitation, any
directors' and auditors' reports) and notes attached to or intended to
be read with any of them and "CONSOLIDATED FINANCIAL STATEMENTS" has a
corresponding meaning.
"INDEBTEDNESS" includes any obligation (whether present or future,
actual or contingent, secured or unsecured, as principal or surety or
otherwise) for the payment or repayment of money.
a "LAW" includes common or customary law and any constitution, decree,
judgment, legislation, order, ordinance, regulation, by-law, statute,
treaty or other legislative measure.
a "PERSON" includes an individual, firm, company, corporation,
unincorporated body of persons, organisation or trust, and any
government, government agency or authority, in each case whether or not
having separate legal personality.
"TAX" includes any tax, levy, impost, deduction, charge, rate, duty,
compulsory loan or withholding which is levied or imposed by a
Government Agency, and any related interest, penalty, charge, fee or
other amount, and "TAXATION" shall be construed accordingly.
"TAX ON OVERALL NET INCOME" of a person shall be construed as a
reference to tax imposed by any jurisdiction on all or part of the net
income, profits or gains of that person (whether worldwide, or only
insofar as such net income, profits or gains are considered to arise in
or relate to a particular jurisdiction, or otherwise).
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"WRITTEN" and "IN WRITING" include all means of reproducing words in a
tangible and permanently visible form.
1.3 MISCELLANEOUS:
(a) Headings are inserted for convenience only and do not affect
interpretation of this agreement.
(b) Unless the context otherwise requires the singular includes
the plural and vice versa and words denoting individuals
include other persons and vice versa.
(c) A reference to any legislation includes any statutory
regulations, rules, orders or instruments made or issued
pursuant to that legislation and any amendment to, or
re-enactment or replacement of, that legislation.
(d) A reference to any document includes reference to that
document as modified, novated, supplemented, varied or
replaced from time to time.
(e) A reference to any party to a Transaction Document or any
other document includes its successors and permitted assigns.
(f) A reference to a time of day is a reference to New Zealand
time unless otherwise stated.
(g) Except where inconsistent with the context, the expression "at
any time" also means from time to time.
2. FACILITIES
2.1 GRANT OF FACILITIES: The Lenders agree to make each Facility available
to the Borrowers upon the terms and conditions contained in this
agreement.
2.2 MAXIMUM AMOUNT OF FACILITIES: The Original Dollar Amount outstanding in
respect of a Facility may not at any time exceed the Facility Amount of
that Facility at that time.
2.3 PURPOSE: The Borrowers shall apply the proceeds of the Facilities in
and towards refinancing the Group's indebtedness under the Existing
Facilities Agreement and for general corporate purposes, including
funding the working capital and capital expenditure requirements of the
Group.
2.4 FURTHER BORROWERS:
(a) The Company may at any time procure any of its wholly-owned
Subsidiaries to become a Borrower under this agreement by:
(i) executing an accession agreement substantially in the
form set out in schedule 4; and
(ii) delivering to the Facility Agent a director's
certificate in the form set out in schedule 3 in
respect of the new Borrower and, unless the new
Borrower is incorporated in New Zealand, a legal
opinion from counsel acceptable to the Facility Agent
in the new Borrower's jurisdiction of incorporation
in a form satisfactory to the Facility Agent.
(b) On receipt of an accession agreement the Facility Agent shall
notify the Lenders and the Facility Agent shall:
16
(i) countersign the counterparts of the accession
agreement on behalf of all other parties to this
agreement;
(ii) enter the accession agreement in a register kept by
it (which shall be conclusive); and
(iii) retain one counterpart and deliver the others to the
Company and the new Borrower.
(c) On an accession agreement being countersigned by the Facility
Agent the new Borrower shall be bound by the Transaction
Documents as stated in the accession agreement as if it were a
party and named as a Borrower.
(d) Each other party to this agreement irrevocably authorises the
Facility Agent to sign each accession agreement on its behalf.
3. LENDERS
3.1 PARTICIPATION: Subject to the terms of this agreement, each Lender
shall participate in each Advance under a Facility in the proportion
which its Commitment under that Facility at the relevant Drawdown Date
bears to the Total Commitments under that Facility on that date.
3.2 OBLIGATIONS SEVERAL: The obligations of each Lender under this
agreement are several. No party to this agreement shall be responsible
for the obligations of any other party except as expressly provided in
this agreement. The failure of a Lender to perform its obligations
under this agreement shall not release any other party from its
obligations under this agreement.
3.3 RIGHTS SEVERAL: The rights of the Lenders are several. The amount at
any time owing by the Borrowers to any party under this agreement shall
be a separate and independent debt from the amount owing to any other
party.
4. CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT TO FACILITIES: No drawing may be made under the
Facilities until the Facility Agent has confirmed to the Company that
it has received, and found to be satisfactory to it in form and
substance, the documents and evidence specified in schedule 2.
4.2 CONDITIONS PRECEDENT TO EACH ADVANCE: The obligations of the Facility
Agent and the Lenders in relation to each Advance are conditional upon:
(a) DRAWDOWN DATE: the Drawdown Date being a Business Day during
the relevant Availability Period;
(b) ORIGINAL DOLLAR AMOUNT: the Original Dollar Amount of the
Advance being an integral multiple of NZ$1,000,000 and not
less than NZ$2,000,000;
(c) LESS THAN AVAILABLE FACILITY: the Original Dollar Amount of
the Advance, when aggregated with all (if any) other Advances
intended to be made on the same day under the relevant
Facility (taking each Advance at its Original Dollar Amount),
not exceeding the relevant Available Facility;
17
(d) LIMIT ON ADVANCES: no more than one Advance under any Facility
being made on any Business Day and no more than ten Advances
being outstanding at any one time;
(e) REPRESENTATIONS AND WARRANTIES TRUE: the representations and
warranties set out in clause 9.1 (other than paragraphs (h),
(i), (o), (p) and (q) thereof) being true and accurate in all
respects as of the date of the Drawdown Request and the
Drawdown Date by reference to the facts and circumstances
existing on those dates;
(f) NO GUARANTOR RELEASED: no guarantor having been released from,
or having discontinued any liability under, any Guarantee,
except:
(i) in the case of an Obligor under the Obligors'
Guarantee, in accordance with the applicable
provisions of the Obligors' Guarantee and so long as
no Event of Default or Event of Review has occurred
and is continuing unremedied and no Event of Default
or Event of Review has resulted, or will result, from
such release or discontinuance of liability; and
(ii) in any other case, with the prior written consent of
the Security Agent;
(g) NO EVENT OF DEFAULT: no Event of Default having occurred and
remaining unremedied;
(h) NO MARKET DISRUPTION: in the case of an Advance denominated in
US Dollars, none of the circumstances described in clause 4.3
existing;
(i) NO VIOLATION OF LAW: the giving effect to the Drawdown Request
and the making of the Advance requested therein not violating
any applicable law; and
(j) EVENT OF REVIEW: other than for a rollover of an existing
Advance, no Event of Review having occurred and remaining
unremedied.
4.3 DISRUPTED MARKET: An Advance denominated in US Dollars will not be made
if, by reason of any change in national or international financial,
political or economic conditions or currency exchange rates or exchange
controls, it would in the reasonable opinion of the Facility Agent be
impracticable for that Advance to be made in US Dollars.
5. ADVANCES
5.1 AVAILABILITY: Subject to compliance with clause 4, the Lenders shall
make an Advance available to a Borrower if no later than:
(a) if the Advance is to be denominated in NZ Dollars, 9.30am on
the Business Day before the relevant Drawdown Date; and
(b) if the Advance is to be denominated in US Dollars, 10.30am on
the third Business Day before the relevant Drawdown Date,
the Facility Agent has received from that Borrower a duly completed
Drawdown Request (which shall be irrevocable) for that Advance.
5.2 NOTIFICATION TO LENDERS: On receipt of a Drawdown Request for an
Advance, the Facility Agent shall promptly, and in any event:
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(a) if the Advance is to be denominated in NZ Dollars, not later
than 2pm on the Business Day before the relevant Drawdown
Date; and
(b) if the Advance is to be denominated in US Dollars, not later
than 2pm on the third Business Day before the relevant
Drawdown Date,
notify each Lender of:
(c) the relevant Drawdown Date;
(d) the currency and amount of the Advance and that Lender's
participation;
(e) the duration of the first Interest Period; and
(f) the Repayment Date.
5.3 PARTICIPATION: Subject to the provisions of this agreement, each Lender
shall on the Drawdown Date for an Advance make available to the
Facility Agent for the account of the relevant Borrower the amount of
that Lender's participation in the Advance in accordance with clause
13.
5.4 FIRST ADVANCES: The first Advance or Advances drawn under the
Facilities shall be applied in the repayment in full of all amounts
outstanding under the Existing Facilities Agreement.
5.5 REPAYMENT:
(a) A Borrower to whom an Advance is advanced shall repay that
Advance in full on the relevant Repayment Date.
(b) Amounts so repaid will, subject to compliance with the
provisions of this agreement, be available for redrawing.
6. INTEREST
6.1 INTEREST PERIOD: Each Interest Period in relation to an
Advance shall be a period of one, two, three or six months'
duration or any other duration agreed between the Lenders and
the relevant Borrower, and:
(a) the duration of the first Interest Period shall be as selected
by the relevant Borrower in the Drawdown Request;
(b) the duration of each subsequent Interest Period shall be as
selected by the relevant Borrower giving notice to the
Facility Agent:
(i) in the case of an Advance denominated in NZ Dollars,
not later than 9.30am on the Business Day prior to
the commencement of that Interest Period; and
(ii) in the case of an Advance denominated in US Dollars,
not later than 10.30am on the third Business Day
before the commencement of that Interest Period,
provided that if the relevant Borrower fails to give such
notice the Interest Period shall be of three months' duration;
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(c) the first Interest Period shall begin on the Drawdown Date
applicable to that Advance and each subsequent Interest Period
shall commence on the last day of the previous Interest Period
applicable to that Advance;
(d) if an Interest Period would otherwise end on a day which is
not a Business Day it shall be extended to the next Business
Day unless the result of that extension would be to carry the
Interest Period over into another calendar month, in which
event the Interest Period shall end on the immediately
preceding Business Day;
(e) where an Interest Period commences on the last day of a
calendar month or on a day for which there is no numerically
corresponding day in the month in which that Interest Period
would otherwise end, that Interest Period shall, (subject to
paragraphs (d) and (f)) end on the last day of that last
mentioned month;
(f) no Interest Period may extend beyond the Repayment Date for
that Advance.
6.2 INTEREST RATE: Each Borrower shall pay interest on each Advance made to
it, for each Interest Period, at the rate per annum determined by the
Facility Agent to be the aggregate of the Margin applicable to the
relevant Advance on the first day of that Interest Period and the
Specified Rate for that Advance for that Interest Period.
6.3 NOTIFICATION OF THE SPECIFIED RATE: The Facility Agent shall promptly
(and in any event not later than 2pm on the first day of the relevant
Interest Period) notify the relevant Borrower and the Lenders of the
Margin and the Specified Rate for each Advance for each Interest Period
and the amount of interest payable in respect of that Interest Period.
6.4 PAYMENT: Interest on each Advance at the rate determined in accordance
with clause 6.2 shall be calculated on the basis of the actual number
of days elapsed and a 360 or 365 day year (as customary market practice
requires), shall accrue from day to day and shall be paid in arrears on
the Interest Payment Date(s) for the relevant Interest Period unless
otherwise provided in this agreement.
7. PREPAYMENT AND FINAL REPAYMENT
7.1 VOLUNTARY PREPAYMENT: A Borrower may, by giving the Facility Agent no
less than five Business Days' prior written notice (which shall be
irrevocable), prepay the whole or any part of an Advance. Any such
prepayment must be in a minimum amount of NZ$2,000,000 (or the US
Dollar Equivalent thereof on the date of prepayment) and in integral
multiples equal to NZ$1,000,000 (or the US Dollar Equivalent thereof on
the date of prepayment), or such other amount as the Facility Agent may
agree. Amounts so prepaid shall, subject to compliance with the
provisions of this agreement, be available for redrawing.
7.2 EXCHANGE RATE FLUCTUATIONS: If, at any time, the NZ Dollar Equivalent
of all outstanding Advances under a Facility exceeds 105% of the
Facility Amount of that Facility, the Borrowers shall, on the next
Interest Payment Date to occur under that Facility, prepay such part of
the outstanding Advances under that Facility as is equal to that excess
amount.
7.3 AMOUNTS PREPAID UNDER CLAUSE 10.1(h): Any amount prepaid under clause
10.1(h):
(a) shall be applied in and towards prepayment of outstanding
Advances under the Facilities rateably; and
20
(b) may not be redrawn.
7.4 OTHER PAYMENTS ON PREPAYMENT: Where:
(a) the whole or any part of an Advance is prepaid under clauses
7, 10.1(h), 11, 12, or 14.2(f), the Borrowers shall pay to the
Facility Agent for the account of the Lenders:
(i) simultaneously with that prepayment, accrued interest
on that Advance to the date of actual payment; and
(ii) (if the prepayment is made on a day other than the
last day of an Interest Period for the relevant
Advance) upon demand, any amount specified by the
Facility Agent to be necessary to compensate any
Lender for any loss incurred by it (including any
loss incurred in liquidating or redeploying deposits
from third parties acquired, arranged or utilised to
make or maintain that Lender's participation in that
Advance, and any loss of margin); and
(b) all Advances under a Facility are to be prepaid under clauses
7, 10.1(h), 11, 12, or 14.2(f) the Borrowers shall pay to the
Facility Agent for the account of the Lenders, in addition to
any amounts payable under clause 7.4(a), all other Outstanding
Money under that Facility to the date of actual payment.
7.5 FINAL REPAYMENT: The Borrowers shall pay all Outstanding Money under a
Facility on the Expiry Date of that Facility.
8. CANCELLATION
8.1 AT END OF AVAILABILITY PERIOD: Any part of a Facility which remains
undrawn at the end of the Availability Period of that Facility shall be
cancelled and the relevant Facility Amount shall be reduced by the
undrawn amount.
8.2 DURING AVAILABILITY PERIOD: The Company may at any time on giving not
less than five Business Days' irrevocable notice to the Facility Agent
cancel a Facility in whole or in part (and if in part in an integral
multiple equal to the Original Dollar Amount of NZ$1,000,000) and the
Facility Amount of that Facility shall be reduced accordingly at the
end of that five Business Day period. During that five Business Day
period no Borrower may give a Drawdown Request purporting to draw all
or any part of the Facility Amount which is subject to that notice of
cancellation.
8.3 PRO RATA REDUCTION: Any cancellation under clause 8.1 or clause 8.2
shall reduce the Commitments under the relevant Facility rateably. The
Facility Agent shall promptly notify each Lender of any cancellation
under clause 8.1 or any notice received under clause 8.2 and the amount
of that Lender's Commitment which is, or is to be, cancelled.
8.4 ON PREPAYMENT: If any Advance or any part thereof is prepaid pursuant
to clause 10.1(h), the relevant Facility Amount shall be reduced by the
amount of that prepayment (taking any Advance denominated in US Dollars
at its Original Dollar Amount).
9. REPRESENTATIONS AND WARRANTIES
9.1 REPRESENTATIONS AND WARRANTIES: Each Borrower represents and warrants
in relation to itself and the Company represents and warrants in
relation to itself and each of the other Obligors that:
21
(a) STATUS: it is a company duly incorporated and validly existing
under the laws of its jurisdiction of incorporation;
(b) POWER AND AUTHORITY: it has:
(i) the power and authority to own its assets and to
carry on its business as, and in such place or places
as, it is now being conducted;
(ii) the power to enter into, and exercise its rights and
perform and comply with its obligations under, each
Transaction Document to which it is a party; and
(iii) taken all necessary action to authorise the entry
into each Transaction Document to which it is a party
and the performance of all its obligations
thereunder;
(c) OBLIGATIONS: each Transaction Document to which it is a party,
constitutes its legal, valid and binding obligations,
enforceable in accordance with its terms subject to insolvency
laws affecting creditors' rights generally and to equitable
principles of general application;
(d) NO LAWS VIOLATED: neither its entry into the Transaction
Documents, nor the exercise of any right or the performance or
observance of any obligation under the Transaction Documents,
nor any transaction contemplated thereby, will:
(i) violate or contravene any law to which it is subject;
or
(ii) conflict with, or result in a breach of, any
agreement, document, arrangement, obligation or duty
to which it is a party, or by which it or any of its
assets may be bound; or
(iii) violate any of the documents constituting it or cause
any limitation on, or breach of, any of its powers,
or the right or ability of its directors to exercise
those powers;
(e) CONSENTS AND OTHER AUTHORISATIONS: all consents and other
authorisations required by it, or otherwise appropriate for it
to obtain, in connection with each Transaction Document to
which it is a party, and the transactions contemplated by such
documents and which may be necessary for it to conduct its
business properly, have been obtained or effected and are in
full force and effect, and there are no qualifications or
limitations affecting such consents or other authorisations
which have not been notified to the Lenders and which have or
will be likely to have a Material Adverse Effect;
(f) NO DEFAULT: no Event of Default has occurred and remains
unremedied or will result from its entry into the Transaction
Documents;
(g) FULL DISCLOSURE: the information provided by it to the Lenders
at any time in connection with the Facilities or the
Transaction Documents was true and accurate in all material
respects and not misleading in any material respect as at the
date on which it was provided (whether by the omission of
facts known to it or otherwise);
(h) MATERIAL ADVERSE EFFECT: it does not know of any fact, other
than matters of a general economic nature and matters relating
to CNIFP, which has a Material Adverse Effect or, so far as it
now reasonably foresees, will be likely to have a Material
Adverse Effect;
22
(i) TAXES: under applicable law and regulations currently in
effect, there are no taxes (other than withholding taxes and
Approved Issuer Levy) payable in any jurisdiction in which it
is incorporated or carries on business or in respect of the
signing, delivery, registration or performance of the
Transaction Documents or the transactions contemplated
thereunder;
(j) FINANCIAL STATEMENTS: the most recent consolidated financial
statements of the Group comply with the requirements of clause
10.1(b)(i) and (ii), and there has been no change in the
respective assets, indebtedness, conditions or operations of
the companies to which those financial statements relate
(taken as a whole) since the date at which those financial
statements were prepared which has had, or would be likely to
have, a Material Adverse Effect;
(k) RANKING OF OBLIGATIONS: its liabilities under each Transaction
Document to which it is a party rank and will at all times
rank senior to all other indebtedness (actual or contingent)
except indebtedness preferred solely by operation of law;
(l) OWNERSHIP OF ASSETS: it owns its assets free and clear of all
Security Interests except Permitted Security Interests;
(m) SECURITY: the Security is effective to create in favour of the
Security Agent, legal, valid and enforceable Security
Interests in the Collateral and, when the Security Agent and
the relevant Obligor take all action specified in the Security
for the perfection of the Security Interests created by the
Security, the Security will constitute fully perfected
Security Interests in the Collateral ranking in priority to
the claims of any other person except for Permitted Security
Interests;
(n) NO IMMUNITY: it is not, under the laws of its jurisdiction of
incorporation, immune from suit with respect to its
obligations under the Transaction Documents and the entry into
and performance by it of its obligations under the Transaction
Documents constitute private and commercial activities; it
does not, nor does any of its property, assets or revenues,
have any right of immunity from suit, jurisdiction, attachment
(whether before or after judgment), set-off or execution;
(o) SOLVENCY: it is not insolvent and will not be insolvent
immediately following entry into this agreement;
(p) LITIGATION: other than as previously disclosed to the Lenders
in writing (including the claim brought by Citic New Zealand
Limited (BVI) (In Receivership) against the Company and
certain of its Subsidiaries in the High Court of New Zealand
in CP283-SW/99 (Auckland Registry)), it is not party to any
litigation, tax claim or administrative or arbitration
proceedings before or of any court, tribunal, arbitrator or
Government Agency, or to any dispute with any Government
Agency, which, if adversely determined, would have a Material
Adverse Effect; and
(q) EMPLOYMENT DISPUTES: there are no disputes pending or, to the
best of its knowledge after due enquiry, threatened, between
it and any of its senior officers or executives, other than
individual employee grievances or lawsuits arising in the
ordinary course of business which could not reasonably be
expected to have a Material Adverse Effect.
23
9.2 REPETITION: The representations and warranties contained in clause 9.1
(other than paragraphs (h), (i), (o), (p) and (q) thereof) will be
deemed to be repeated on the date of each Drawdown Request and on each
Drawdown Date by reference to the facts and circumstances then
existing.
10. UNDERTAKINGS
10.1 POSITIVE UNDERTAKINGS: The Company shall:
(a) FINANCIAL INFORMATION: deliver to the Lenders:
(i) as soon as practicable (and in any event within 90
days) after the last day of each of its financial
years, the consolidated financial statements of the
Group in respect of that financial year each duly
audited;
(ii) as soon as practicable (and in any event within 75
days) after the last day of the first half of each of
its financial years, the unaudited consolidated
financial statements of the Group, in respect of that
financial half year;
(iii) as soon as practicable (and in any event within 30
days) after the last day of each of its financial
quarters, the management accounts of the Group, in
respect of that financial quarter;
(iv) at the same time as the quarterly management accounts
referred to in paragraph (iii) above are delivered to
the Lenders, a compliance certificate from a director
substantially in the form set out in schedule 8;
(v) from time to time, within seven days after request by
the Facility Agent or any Lender, such information
about the business, assets and financial condition of
the Group, as the Facility Agent or that Lender may
reasonably require; and
(vi) promptly, copies of all notices and related documents
issued by the Company to its shareholders;
(b) ACCOUNTING PRACTICE: ensure that all financial statements
delivered to the Lenders under clause 10.1(a):
(i) with the exception of the quarterly management
accounts delivered to the Lenders under paragraph
(a)(iii) above, are prepared in accordance with NZ
GAAP, consistently applied, except to the extent
disclosed in those financial statements;
(ii) give a true and fair view of the financial position
and performance of the Group and the results of
operations of the Group as at the date, and for the
period ending on the date, to which the financial
statements are made up; and
(iii) in the case of the quarterly management accounts
delivered to the Lenders under paragraph (a)(iii)
above, are signed by the Chief Financial Officer of
the Company, and otherwise, are signed by two
directors of the Company and are accompanied by all
documents and reports required by law to be annexed
to or to accompany them;
24
(c) ENVIRONMENTAL COMPLIANCE: develop, implement and maintain
procedures to ensure compliance in all material respects with
Environmental Laws and equivalent legislation elsewhere;
(d) ADDITIONAL REPORTING REQUIREMENTS: deliver to the Facility
Agent (with sufficient copies for each of the Lenders):
(i) as soon as possible, and in any event within five
days after becoming aware of the occurrence of an
Event of Default or an Event of Review, a statement
of a senior officer setting forth the details of such
Event of Default or Event of Review and the action
which it proposes to take or has taken with respect
thereto;
(ii) copies of all material special audits, opinions or
other material reports relating to accounting
matters, if any, submitted to it by its auditors;
(iii) promptly upon the issuance thereof, copies of all
notices, reports, press releases, circulars, offering
documents and other continuous disclosure documents
filed with, or delivered to, any stock exchange or to
any securities commission or similar Government
Agency in any other jurisdiction;
(iv) promptly upon any change in its auditors, notice of
any change in its auditors;
(v) promptly, and, in any event within ten days, after it
or any Restricted Subsidiary receives notice of any
suit, proceeding or similar action commenced by any
Government Agency or any other person which has a
Material Adverse Effect, copies of such notice of
suit, proceedings or similar action;
(vi) promptly upon obtaining an initial credit rating or
upon any change in its credit rating from any credit
rating agency, copies of such rating or change in
rating; and
(vii) such other information respecting the condition or
operations, financial or otherwise, of its business
and the business of the Restricted Subsidiaries as
the Facility Agent, on behalf of the Lenders, may
from time to time reasonably request;
(e) CORPORATE EXISTENCE: preserve and maintain, and cause each of
its Restricted Subsidiaries to preserve and maintain, its
corporate existence, except (i) to the extent expressly
permitted by this agreement or (ii) to the extent that the
failure to comply with this provision will not, and will not
be likely to, have a Material Adverse Effect;
(f) COMPLIANCE WITH LAWS: comply, and cause each of its Restricted
Subsidiaries to comply, with the requirements of all
applicable laws (including Environmental laws) and orders of
any Government Agency, the non-compliance with which could
have a Material Adverse Effect;
(g) CONDUCT OF BUSINESS: carry on, and cause each of its
Restricted Subsidiaries to carry on, business in a proper,
efficient and business-like manner and diligently maintain,
use and operate its assets where the failure to do so has a
Material Adverse Effect;
25
(h) PROCEEDS OF ASSET DISPOSITIONS: if in any financial year it or
any Restricted Subsidiary disposes of an asset or series of
assets as permitted by clause 10.2(c) (other than a Permitted
Disposal or under the transaction involving the sale of
cutting rights in respect of the Tahorakuri Forest and the
Tauhara Forest to entities managed by UBS Timber Investors for
an amount equal to US$65,000,000 entered into by the Company
and UBS Timber Investors on or about the date of this
agreement) and the net proceeds of such disposal or disposals
exceeds NZ$10,000,000 in aggregate, prepay such part of the
outstanding Advances under the Facilities on the next Interest
Payment Date to occur after the expiry of that financial year,
of an amount equal to the product of:
CR x NP ,
where "CR" = the current ratio of Net Debt to Total Tangible
Assets applicable at the time of the prepayment; and
"NP" = the net proceeds of such asset dispositions during that
financial year less NZ$10,000,000;
(i) AUDITORS: appoint and maintain as its auditors a firm of
accountants nationally recognised in New Zealand;
(j) MAINTENANCE OF BOOKS: keep, and cause each of its Restricted
Subsidiaries to keep, full, proper and accurate books of
record and account in accordance with NZ GAAP or the relevant
jurisdiction of their incorporation, except for immaterial
inaccuracies or discrepancies of any kind which may be
contained or reflected therein;
(k) INSURANCE COVENANTS: maintain, in respect of itself and each
of its Restricted Subsidiaries, insurance at all times with
responsible insurance carriers or on a self-insurance basis in
such amounts and covering such risks as have been approved by
the Chief Executive Officer and disclosed to the Facility
Agent as prudent for companies engaged in similar businesses
and owning similar properties in the same general areas as the
Company or any such Restricted Subsidiary, as the case may be;
(l) AUTHORISATIONS: obtain, and cause each of its Restricted
Subsidiaries to obtain, (to the extent not in existence on the
date hereof) and maintain, and cause each of its Restricted
Subsidiaries to maintain (by the observance and performance of
all obligations thereunder and conditions thereof), all
authorisations, consents, permits and licences required to
carry on their respective businesses where the failure to do
so has a Material Adverse Effect and in any event any material
Crown Forestry licences;
(m) LINE OF BUSINESS: continue, and cause each of its Restricted
Subsidiaries to continue, to conduct and operate businesses
primarily of the same nature as the core business carried on
at the date of this agreement;
(n) ANNUAL BUDGET: provide an annual budget to the Facility Agent
(with sufficient copies for each of the Lenders) in respect of
each financial year on the earlier of (i) the date which is 30
days from the date of final review thereof by its Board of
Directors and (ii) July 31st of such financial year;
26
(o) FURTHER ASSURANCES: at its cost and expense, upon request of
the Facility Agent, duly execute and deliver or cause to be
duly executed and delivered to the Facility Agent such further
instruments and do and cause to be done such further acts as
may be necessary or proper in the reasonable opinion of the
Facility Agent to carry out more effectually the provisions
and purposes of this agreement;
(p) COLLATERAL: promptly notify the Agents:
(i) of any change in the name of any Obligor (and in any
event not to make or permit any such change unless
all filings are made to ensure the Security Interests
created by the Security remain perfected); and
(ii) if any material part of the Collateral is damaged or
destroyed or requisitioned or compulsorily purchased
by any Government Agency;
(q) MATERIAL CONTRACTS AND THE CNIFP MANAGEMENT AGREEMENT: will,
and will ensure that its Subsidiaries will: (i) comply with
its obligations under each Material Contract and the CNIFP
Management Agreement where non-compliance would or would be
likely to have a Material Adverse Effect; (ii) exercise its
rights under, and enforce, each Material Contract and the
CNIFP Management Agreement prudently; and (iii) use all
reasonable endeavours to keep the Material Contracts and the
CNIFP Management Agreement valid and enforceable, provided
that this covenant will cease to apply to the CNIFP Management
Agreement if the Company ceases to be the manager under that
agreement or if that agreement is terminated;
(r) INSPECTION: permit the Agents or any Lender or any agent of
the Agents or any Lender on reasonable notice to inspect its
and each of its Subsidiary's premises and records (including
all accounting records and other documents relating in any way
to their respective businesses) and to take such copies or
record such details thereof as they reasonably request; and
(s) HEDGING POLICY: will promptly advise the Lenders of any change
to the Group's hedging policy as adopted by the Board of
Directors of the Company and which was disclosed to the
Lenders on or before the Commencement Date.
10.2 NEGATIVE UNDERTAKINGS: The Company:
(a) LIMITATION ON SECURITY INTERESTS: will not, and it will
procure that no Restricted Subsidiary will, create or permit
to arise or exist any Security Interest over its assets to
secure any Debt or any indebtedness under any Guarantee of
Debt, other than a Permitted Security Interest;
(b) LIMITATION ON DEBT SECURED BY PERMITTED SECURITY INTERESTS:
will not permit the aggregate principal amount of Debt of the
Group (but excluding Tarawera for these purposes) at any time
which is secured by Permitted Security Interests (other than
the Security), on a consolidated basis, to exceed 2.5% of the
Total Assets of the Obligors at that time;
(c) LIMITATION ON ASSET DISPOSITIONS: will not, and it will
procure that no Restricted Subsidiary will, whether by one
transaction or by a number of transactions taking place in any
financial year (excluding Permitted Disposals), dispose of
assets the book values of which at the time of disposal and
taken together amount to more than 10% of the Total Assets of
the Group at the beginning of that financial year;
27
(d) LIMITATION ON AFFILIATE TRANSACTIONS: will not, and it will
procure that none of the Restricted Subsidiaries will:
(i) dispose of any asset to any Other Subsidiary except
in a bona fide transaction on an arm's length basis,
and for fair market value;
(ii) provide any services to, or be provided with any
services by, or surrender the benefit of any
deduction or credit for taxation purposes to, or
engage in any other transaction with or involving or
for the benefit of, any Other Subsidiary, other than
in a bona fide transaction on an arm's length basis,
evidenced in writing and for a consideration which it
reasonably considers as fair; or
(iii) make any loan or provide any other financial
accommodation to, or give any Guarantee of any of the
indebtedness of, any Other Subsidiary if the
aggregate of the principal amount of all such loans
and the maximum principal amount payable under all
such Guarantees would exceed 2.5% of the Total Assets
of the Obligors (except where such indebtedness
arises under a Guarantee given by any Other
Subsidiary of indebtedness of the Company or of a
Restricted Subsidiary);
provided that nothing in this paragraph shall prohibit:
(aa) anything which is permitted by clause
10.2(e); or
(bb) performance in the ordinary course of
business of certain joint venture and
partnership arrangements (being Tarawera,
American Wood Moulding L.L.C., Inc. and The
Empire Company Inc.) and any similar
arrangements entered into from time to time
in the ordinary course of business of the
Group; or
(cc) financial accommodation of up to
US$2,000,000 in total in relation to
American Wood Moulding L.L.C., Inc. and/or
The Empire Company, Inc.; or
(dd) performance by the Company of its
obligations to manage the business of CNIFP
pursuant to the CNIFP Management Agreement;
(e) LIMITATIONS ON DIVIDENDS, CAPITAL DISTRIBUTIONS AND SHARE
BUY-BACKS: will not, and it will procure that none of the
Restricted Subsidiaries will (without the prior consent of the
Majority Lenders):
(i) make any Distributions (as defined in section 2 of
the Companies Act); or
(ii) acquire any of its own shares (unless it is required
to do so by law) or redeem any of its own shares
which are redeemable at its option or take any other
action to reduce its capital; or
(iii) give financial assistance, directly or indirectly, to
any person for the purpose of, or in connection with,
the purchase of any of its shares or shares in its
holding company, provided that nothing in this clause
shall prohibit any Restricted Subsidiary from
providing such financial assistance to any other
Restricted Subsidiary or to the Company,
28
if an Event of Default or an Event of Review has occurred and
is continuing or would occur as a result thereof;
(f) RESTRICTION ON DEBT OF SUBSIDIARIES: will not permit the
aggregate amount at any time being outstanding of all Debt of
its Subsidiaries to at any time exceed NZ$50,000,000, other
than:
(i) Debt under the Facilities; or
(ii) Debt of the Excluded Subsidiaries subsisting at the
date of this agreement,
and will not take any step which results in the Excluded
Subsidiaries incurring any additional Debt;
(g) LIMITATION ON MERGERS AND ASSET SALES: will not, and it will
procure that none of the Restricted Subsidiaries will,
amalgamate, consolidate or merge (including by means of the
sale of all or substantially all of its assets having an
effect equivalent to that of a merger) with or liquidate,
wind-up or dissolve into any other successor person except if:
(i) (1) the successor person executes, prior to or
contemporaneously with the consummation of
such transaction, such agreements together
with such other instruments as are
satisfactory to the Facility Agent acting
reasonably and in the opinion of the
Facility Agent's counsel necessary or
advisable to evidence the assumption by the
successor person of its obligations under
this agreement and to observe and perform
all of its covenants and obligations under
this agreement; and
(2) no Event of Default or Event of Review has
occurred and is continuing or would occur as
a result thereof; and
(3) there is no breach of clause 10.1(m); and
(4) the successor person is incorporated in New
Zealand or any other jurisdiction approved
by the Majority Lenders; and
(5) there is not, and is not likely to be, any
material adverse variance to the Financial
Model as a result thereof; or
(ii) the amalgamation or merger is a solvent amalgamation
or merger between two or more Obligors; and
(h) MATERIAL CONTRACTS: will not, and it will ensure that none of
its Subsidiaries will: (i) amend or vary in a respect or to an
extent which is material in the context of the Facilities, or
consent to any amendment to or variation of, any Material
Contract in a respect or to an extent which is material in the
context of the Facilities; or (ii) avoid, release, surrender,
terminate, rescind, discharge (other than by performance) or
accept the repudiation of any Material Contract, where this
has, or is likely to have, a Material Adverse Effect.
10.3 FINANCIAL COVENANTS: The Company undertakes that so long as any
Facility remains outstanding:
29
(a) GEARING RATIO: on each Test Date which falls during a period
set out below, the Gearing Ratio shall not exceed the ratio
set out opposite that period:
PERIOD RATIO
-------------------------------------- ----------
The date of this agreement to 30/06/05 3.50 times
-----------------------------------------------------
01/07/05 and thereafter 3.25 times
-----------------------------------------------------
(b) CASH COVER RATIO: the ratio of Free Cash Flow to Interest
Expense shall not be less than 2.75 times on any Test Date;
(c) NET DEBT TO TOTAL TANGIBLE ASSETS RATIO: the percentage of Net
Debt of the Group to Total Tangible Assets of the Group shall
not at any time exceed 30%;
(d) MINIMUM NET TANGIBLE ASSETS: at all times Minimum Net Tangible
Assets shall not be less than NZ$800,000,000;
(e) TOTAL TANGIBLE ASSETS: at all times Total Tangible Assets
(disregarding any investments in Subsidiaries and
inter-company loans) of the Obligors shall be not less than
95% of Total Tangible Assets of the Group.
10.4 TESTING OF FINANCIAL COVENANTS: The financial covenants in clause 10.3
will be tested against the consolidated financial information of the
Company as at the end of each financial quarter of the Company (each a
"TEST DATE") (with covenants (a) and (b) tested on a rolling 12 month
basis) with a first test date of 31 March 2003.
11. DEFAULT
11.1 EVENTS OF DEFAULT: If any of the following occurs, whether or not
within the control of any Obligor:
(a) PAYMENT OF PRINCIPAL: default shall occur in the due and
punctual payment of all or any part an Advance when and as the
same shall become due and payable, whether at stated maturity,
by acceleration, by mandatory prepayment, by notice of
prepayment or otherwise; or
(b) PAYMENT OF INTEREST: default shall occur in the due and
punctual payment of any interest or fees or other amounts
payable when and as such interest or fees or other amounts
payable shall become due and payable, and such default shall
have continued for a period of three Business Days; or
(c) BREACH OF COVENANTS:
(i) default shall occur in the performance or observance
of any of the covenants in clause 10.3;
(ii) default shall occur in the performance or observance
of any other of the covenants, conditions or
agreements contained in this agreement or any of the
Security and, if such default is capable of remedy,
such default shall have continued for a period of 30
days after the earlier of the date on which the
Company shall have actual knowledge of such default
or notice shall have been given by the Facility Agent
to the Company requiring that such default be cured;
or
30
(d) CROSS DEFAULT:
(i) any principal amount of any Debt of any Obligor
becomes due and payable prior to its stated maturity
by reason of the occurrence of a default or event of
default however described (provided, however, that in
any such case such amount is at least NZ$5,000,000 or
its equivalent in any other currency) or any
principal amount of any such Debt is not paid when
due, or as the case may be, within any applicable
grace period (provided, however, that in any such
case such amount is at least NZ$1,000,000 or its
equivalent in any other currency); or any Obligor
fails to pay when due any principal amount payable by
it under any Guarantee of Debt (provided however,
that in any such case such amount is at least
NZ$1,000,000 or its equivalent in any other
currency);
(ii) any amount of interest on any Debt of any Obligor is
not paid when due or, as the case may be, within any
applicable grace period and such default shall have
continued for a period of 30 days thereafter; or any
Obligor fails to pay when due any amount of interest
payable by it under any Guarantee of Debt and such
default shall have continued for a period of 30 days
thereafter (provided, however, that in any such case
the aggregate of all amounts specified in this clause
(ii) is at least NZ$1,000,000 (or its equivalent in
any other currency); or
(e) CESSATION OF BUSINESS OR DISSOLUTION: any Obligor ceases or
threatens to cease to carry on all or substantially all of its
business or operations, or an application or an order is made,
or a resolution is passed or proposed, for the dissolution of
the relevant Obligor except, in each case for the purpose of,
and followed by, an amalgamation or solvent reconstruction on
terms previously approved in writing by the Majority Lenders;
or
(f) RECEIVER, ETC: an encumbrancer takes possession, or a trustee,
receiver, receiver and manager, administrator, inspector under
any companies or securities legislation, or similar official,
is appointed in respect of any Obligor or the whole or any
part of its assets; or
(g) STATUTORY MANAGEMENT: any step is taken to appoint, or with a
view to appointing, a statutory manager (including the making
of any recommendation in that regard by the Securities
Commission) under the Corporations (Investigation and
Management) Xxx 0000 in respect of any Obligor, or any Obligor
or any associated person (as that term is defined in that Act)
of any of them is declared at risk pursuant to the provisions
of that Act; or
(h) DISTRESS OR JUDGMENT: a distress, attachment or other
execution for a sum exceeding NZ$10,000,000 (or its equivalent
in other currencies) is levied or enforced upon, or commenced
against, any assets of any Obligor and is not discharged or
stayed within 30 days, or a judgment for a sum exceeding
NZ$10,000,000 (or its equivalent in other currencies) is
obtained against the relevant Obligor and is not satisfied,
stayed or discharged within 30 days except, in each case,
where the Facility Agent is satisfied that the relevant
Obligor is contesting the same in good faith by appropriate
proceedings; or
(i) INSOLVENCY: any Obligor is declared or becomes bankrupt or
insolvent, is unable to pay its debts when they fall due, or
is presumed unable to pay its debts in accordance with section
287 of the Companies Xxx 0000, or enters into dealings with or
for the benefit of any of its creditors with a view to
31
avoiding, or in expectation of, insolvency, or makes a general
assignment or an arrangement, compromise or composition with
or for the benefit of any of its creditors, or stops or
threatens to stop payments generally; or
(j) INVALIDITY OF TRANSACTION DOCUMENTS: any provision of any
Transaction Document:
(i) ceases to have effect in whole or in part, other than
by performance or as permitted by its terms; or
(ii) becomes wholly or partly void, voidable, illegal,
invalid or unenforceable (other than by reason only
of a party waiving any of its rights), or the
performance of any such provision becomes illegal,
or any Obligor or any person on its behalf, makes any
allegation or claim to that effect; or
(k) REPRESENTATIONS AND WARRANTIES: any representation or warranty
made by or on behalf of an Obligor herein or in any
certificate, agreement, instrument or statement contemplated
by or made or delivered pursuant hereto, as the case may be,
or in connection herewith, as the case may be, shall prove to
have been false or incorrect or breached in any material
respect on the date as of which made; or
(l) GOVERNMENT ACTIONS: any Government Agency shall declare a
moratorium on the payment of any class of indebtedness, or any
Government Agency shall take any action to condemn, seize,
nationalize, assume the management of or appropriate any
material portion of the property, assets or revenues of any
Obligor (either with or without payment or compensation) or
take any other similar action and, in any such case such
action, in the reasonable opinion of the Majority Lenders,
materially adversely affects the ability of the Obligors to
perform their obligations under the Transaction Documents; or
(m) CHANGE OF CONTROL: if any person or group of persons acting
together shall acquire control of the Company unless the
Majority Lenders consent in writing to that acquisition; or
(n) QUALIFIED AUDIT: any qualification of the audited consolidated
financial statements of the Company by the Company's
independent auditors which the Majority Lenders, acting
reasonably, consider is material; or
(o) WITHDRAWAL OF LICENCES: any consent, licence or authorisation
of any Government Agency or any other person which is required
to make the Transaction Documents valid, binding and
enforceable or is required in order to enable any Obligor or
any other party thereto to perform its obligations hereunder
or thereunder shall be withdrawn or ceases to be in full force
and effect; or
(p) RESOLUTION FOR MERGER: if any Obligor shall effect or pass an
effective resolution authorising its consolidation, merger or
amalgamation with any person other than as permitted by clause
10.2(g); or
(q) LITIGATION: any litigation, tax claim or administrative or
arbitration proceedings before or of any court, tribunal,
arbitrator or Government Agency, or any dispute with any
Government Agency is adversely determined (with no further
rights of appeal or which was not appealed within the
prescribed timeframe) which has, or will have, a Material
Adverse Effect,
32
then at any time thereafter, without prejudice to any other remedies
which the Lenders may have, the Facility Agent may (and shall if so
directed by the Majority Lenders) by notice to the Borrowers cancel the
Facilities whereupon the Facility Amounts shall be reduced to zero and
the Borrowers shall prepay each outstanding Advance immediately (or
within any period specified by the Facility Agent).
11.2 EVENT OF REVIEW: If at any time after the first drawing of a Facility,
any event or series of events (other than any event or series of events
which constitutes an Event of Default, or a variation or termination of
the CNIFP Management Agreement or any wood supply contract which any
Obligor and CNIFP are party to as at the date of this agreement),
whether related or not, occurs or any circumstance arises or exists,
which has or would be likely to have, a Material Adverse Effect, the
Majority Lenders may, by notice in writing to the Borrowers, require
that the parties enter into negotiations in good faith with a view to
agreeing terms on which the Lenders are willing to continue making the
Facilities available to the Borrowers. If after 30 days from the date
of the notice the parties have not agreed upon such terms, the Majority
Lenders may, at any time by not less than 60 days' notice to the
Borrowers, cancel the Facilities whereupon the Facility Amounts under
the Facilities shall be reduced to zero and the Borrowers shall prepay
each outstanding Advance immediately (or within any period specified by
the Facility Agent).
11.3 REPATRIATION: If any sum due under any Transaction Document is not paid
when due and the amount concerned is at that time denominated in a
currency other than NZ Dollars, the relevant Lender may by notice to
the Borrowers require the sum to be converted into NZ Dollars. The
relevant Lender may immediately or at any time thereafter liquidate or
redeploy any deposits or funds fixed or acquired in such other currency
in order to fund the sum concerned in NZ Dollars. If a Lender gives
such a notice, the sum concerned shall be immediately due and payable
in NZ Dollars in an amount certified by that Lender to be the NZ Dollar
Equivalent of that sum, together with any penalties, losses, costs or
expenses incurred in the liquidation or redeployment of any deposits or
funds previously fixed (converted into NZ Dollars in the same manner).
12. CHANGES IN CIRCUMSTANCES
12.1 INCREASED COSTS: If by reason of the introduction of, or any change in,
any law, or any change in the interpretation or application thereof by
any Government Agency, after the date of this agreement, or by reason
of compliance by any Lender with any directive (other than a directive
which is applicable to that Lender at the date of this agreement):
(a) the cost to any Lender of making available, maintaining or
funding, the Facilities or any part of any Facility, or of
otherwise giving effect to this agreement, is increased; or
(b) any amount received or receivable by any Lender, or the
effective return to any Lender, under or in connection with
any Transaction Document is reduced; or
(c) any Lender makes any payment or foregoes any interest, fees or
other return on or calculated by reference to any sum received
or receivable by it under or in connection with any
Transaction Document; or
(d) any Lender is unable to obtain the rate of return on capital
in respect of this agreement which might reasonably have been
expected at the date hereof but for its entering into and/or
performing its obligations under this agreement,
then and in any such case:
33
(e) the relevant Lender shall promptly notify the Borrowers of the
occurrence of the relevant event;
(f) the Borrowers shall from time to time pay to the relevant
Lender on demand the amount which that Lender specifies to be
necessary to compensate it for that increased cost, reduction,
payment, foregone interest, fees or other return or reduced
rate of return on capital; and
(g) the Borrowers shall be entitled at any time after the receipt
of any such demand, so long as the circumstances giving rise
to that increased cost, reduction, payment, foregone interest,
fees or other return or reduced rate of return on capital
continue, on giving not less than 15 Business Days' notice to
the Facility Agent and the relevant Lender (which notice shall
be irrevocable), to elect that the relevant Lender's
participation in the Facilities be cancelled whereupon the
Facility Amounts under the Facilities shall be reduced by the
amount of that Lender's respective Commitments and the
Borrowers shall prepay the relevant Lender's participation in
each outstanding Advance immediately (or within any period
specified by the relevant Lender).
12.2 ILLEGALITY AND MARKET CHANGE: If by reason of:
(a) the introduction of or any change in any law or any change in
the interpretation or application thereof by any Government
Agency; or
(b) compliance by any Lender with any directive; or
(c) (in relation to any Advance denominated in NZ Dollars) any
other circumstances affecting the New Zealand domestic funding
market or the availability of finance to lending institutions
in New Zealand; or
(d) (in relation to any Advance denominated in US Dollars) any
other circumstances affecting the London Interbank Market or
the ability of lending institutions in New Zealand to borrow
money in the London Interbank Market in US Dollars,
it becomes impracticable, impossible or illegal for any Lender, to make
available or maintain or fund any Facility or any part of any Facility,
or otherwise to give effect to this agreement:
(e) the relevant Lender may, by notice to the Borrowers, cancel
each affected Facility;
(f) if it becomes unlawful for the relevant Lender to maintain its
participation in any Advance to maturity the relevant Borrower
shall prepay that participation in that Advance immediately
or, if permitted by the law, directive or circumstances, on
the last day of the current Interest Period for that Advance
(or otherwise within any period specified by the relevant
Lender).
13. PAYMENTS
13.1 CURRENCY OF ACCOUNT: The NZ Dollar is the currency of account and
payment for each amount at any time payable by the Borrowers under this
agreement, provided that the repayment of each Advance denominated in
US Dollars and the payment of interest thereon shall be made in US
Dollars.
34
13.2 PAYMENTS BY LENDERS: All payments to be made by a Lender to a Borrower
under this agreement shall be made in the relevant currency for value
in the place of payment on the due date to the account of the Facility
Agent previously notified by the Facility Agent to each Lender,
provided that where a Lender is due to receive any funds from a
Borrower under this agreement on the same day and in the same currency
as that on and in which it is to make a payment to that Borrower, it
may (having given notice to the Facility Agent and the relevant
Borrower no later than the second Business Day before the date of
payment) apply the payment to be made by it in or towards satisfaction
of the payment to be made to it.
13.3 DISTRIBUTION TO BORROWERS: The Facility Agent shall pay to the relevant
Borrower before the close of business in the place of payment on the
due date any amount so paid to the Facility Agent by the Lenders. Such
payment shall be made in the same currency as received by the Facility
Agent to the account in the place of payment specified in the relevant
Drawdown Request.
13.4 PAYMENTS BY BORROWERS: All payments to be made by the Borrowers under
this agreement shall be made for value in the place of payment on the
due date to the accounts of the Lenders (or, where specified, the
Facility Agent) previously notified by the Lenders or the Facility
Agent to the Borrowers.
13.5 DISTRIBUTION TO LENDERS: Each Agent shall pay to each Lender, promptly
upon receipt, each Lender's proportionate share of any amount paid to
the relevant Agent for the account of the Lenders. Such payment shall
be made in the same currency as received by the relevant Agent to the
account specified by the relevant Lender.
13.6 REFUNDING OF PAYMENTS: Where an amount is to be paid to an Agent for
the account of another person, the relevant Agent shall not be obliged
to pay that amount to that other person until it has been able to
establish that it has actually received that amount. If the relevant
Agent does pay that amount and it proves to be the case that it had not
actually received the amount paid out, then the person to whom that
amount was paid shall immediately on request refund it to the relevant
Agent, together with an amount sufficient to indemnify the relevant
Agent against any funding or other cost, loss, expense or liability
sustained or incurred by it as a result of paying out that amount
before receiving it.
13.7 BUSINESS DAYS: If any amount becomes due for payment under this
agreement on a day which is not a Business Day, it shall be paid on the
next following Business Day and any interest shall be adjusted
accordingly (unless customary market practice requires otherwise).
14. TAXES
14.1 PAYMENTS TO BE FREE AND CLEAR: All amounts payable by each Borrower
under this agreement shall be paid:
(a) free and clear of any restriction or condition;
(b) free and clear of and (except to the extent required by law)
without any deduction or withholding on account of any tax;
and
(c) without any deduction or withholding on account of any other
amount, whether by way of set-off, counterclaim or otherwise.
35
14.2 GROSS-UP: If:
(a) any Borrower is required by law to make any deduction or
withholding from any amount paid or payable by it under this
agreement; or
(b) any Lender is required by law to make any payment on account
of tax (other than tax on overall net income of the relevant
Lender) or otherwise on or in relation to any amount received
or receivable by it under this agreement,
then:
(c) the relevant Borrower shall ensure that any such deduction or
withholding does not exceed the legal minimum and shall pay
the amount required to be deducted, withheld or paid to the
relevant authority before the date on which penalties attach
thereto;
(d) unless the requirement is a result of a Lender breaching its
undertaking contained in clause 14.4(a)(ii), the amount
payable by the relevant Borrower in respect of which that
deduction, withholding or payment is required to be made shall
be increased to the extent necessary to ensure that, after
that deduction, withholding or payment is made, the relevant
Lender receives and retains (free from any liability in
respect of any such deduction, withholding or payment) a net
amount equal to the amount which it would have received and so
retained had no such deduction, withholding or payment been
made;
(e) the relevant Borrower shall promptly deliver to the relevant
Lender the receipt issued by the applicable authority
evidencing that such deduction or withholding has been made;
and
(f) the Borrowers may at any time subsequently, so long as a
requirement to pay any additional amount under this clause
14.2 continues and subject to the relevant Lender having
received not less than 15 Business Days' notice of the
Borrowers' intention to do so (which notice shall be
irrevocable), elect that Lender's participation in the
Facilities be cancelled whereupon the Facility Amounts under
the Facilities shall be reduced by the amount of that Lender's
respective Commitments and the Borrowers shall prepay that
Lender's participation in each outstanding Advance, such
prepayment to be effected immediately (or within any period
specified by the relevant Lender).
14.3 TAX CREDIT: Any tax credit or refund received by any Lender in relation
to an additional amount paid by a Borrower to that Lender under clause
14.2 of this agreement shall, immediately on receipt thereof, be
refunded to the relevant Borrower unless the relevant Lender determines
that it would be prejudiced as a result of such payment. Nothing in
this clause, however, shall interfere with any Lender's right to
arrange its taxation affairs in whatever manner it deems fit and, in
particular, no Lender shall, whether by virtue of this clause or
otherwise, be under any obligation to claim relief from its
corporation, profits or similar tax liability in respect of any
deduction, withholding or payment referable to this agreement, in
priority to any other reliefs, claims, credits or deductions available
to it. The certificate of the relevant Lender as to any such tax credit
or refund shall be conclusive and binding on the Borrowers.
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14.4 RESIDENT WITHHOLDING TAX:
(a) Each Lender which is resident, or has a fixed establishment,
in New Zealand:
(i) represents and warrants to the Borrowers that it
holds a valid certificate of exemption ("CERTIFICATE
OF EXEMPTION") issued pursuant to section NF 9 of the
Income Tax Xxx 0000 ("ACT");
(ii) undertakes to maintain a certificate of exemption
during the continuance of the Facilities provided it
is lawfully able to do so.
(b) If, at any time, any such Lender ceases to be entitled
lawfully to hold a certificate of exemption and, as a result,
a Borrower is required to make an additional payment under
clause 14.2, the Borrowers and the relevant Lender shall
negotiate in good faith for a period not exceeding 30 days
with a view to agreeing upon an arrangement which will ensure,
so far as possible, that the Borrowers are not disadvantaged
and that the Lender is not advantaged by reason of the loss of
the certificate of exemption. If no such arrangement is agreed
within the 30 day period, clause 14.2 will continue to apply.
14.5 APPROVED ISSUER STATUS: Each Borrower shall:
(a) maintain its status as an "approved issuer" as defined in
section OB 1 of the Income Tax Xxx 0000 and ensure the
Facilities are registered with the Commissioner of Inland
Revenue under section 86H of the Stamp and Cheque Duties Xxx
0000; and
(b) make all payments of Approved Issuer Levy in respect of all
interest paid to the Lenders under this agreement in
accordance with section 86K of that Act.
15. DEFAULT INTEREST
15.1 DEFAULT INTEREST PAYABLE: If any Borrower fails to pay any amount
payable under this agreement when due (an "OVERDUE AMOUNT"), that
Borrower shall pay interest ("DEFAULT INTEREST") on that overdue amount
from its due date until it is paid in full (both before and after any
judgment).
15.2 RATE OF DEFAULT INTEREST: Default interest shall be calculated and
payable by reference to successive periods, each of which (other than
the first, which shall begin on and include the due date) shall begin
on the last day of the previous period. Each such period shall be of a
duration selected by the Facility Agent or the relevant Lender from
time to time and the rate of default interest applicable to a
particular period shall be the rate per annum determined by the
Facility Agent or the relevant Lender to be equal to the aggregate of
2% per annum, the greatest Margin applicable at that time and the cost
to the Facility Agent or that Lender of funding the overdue amount.
15.3 PAYMENT OF DEFAULT INTEREST: Default interest shall be payable on the
last day of each period in respect of which it is calculated and on the
date of payment of each overdue amount. Any default interest which is
not paid when due shall be added to the overdue amount in respect of
which it is payable and shall itself bear interest in accordance with
this section 15.
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16. SET-OFF AND DEPOSITS
16.1 Without prejudice, and in addition, to any right of set-off,
combination of accounts, lien or other right to which an Agent or any
Lender is at any time entitled (whether by law, contract or otherwise),
each Agent (on behalf of itself and each Lender) and each Lender may at
any time after the occurrence of an Event of Default, without prior
notice or demand, apply any amount owed or to become owing to any
Borrower in or towards satisfaction of any amount payable by any
Borrower under any Transaction Document and, for such purpose, is
authorised to accelerate the date for payment of any amount owing by
the relevant Agent or the relevant Lender to any Borrower,
notwithstanding the terms upon which such amount is so owing. The
relevant Agent or the relevant Lender may exercise such rights
notwithstanding that such liabilities may not be expressed in the same
currency, and the relevant Agent or the relevant Lender is authorised
to effect any necessary conversion at the market rate of exchange then
prevailing.
16.2 DEPOSITS WITH FACILITY AGENT: Any amounts which, under this agreement,
are to be deposited at any time by a Borrower with the Facility Agent
shall, unless otherwise provided, be held by the Facility Agent so
that:
(a) the deposit and all rights of the relevant Borrower relating
to it shall be incapable of assignment by that Borrower, or of
being the subject of any security created by that Borrower
except pursuant to the Security; and
(b) the relevant Borrower shall have no entitlement to withdraw
any moneys from the deposit until all obligations of that
Borrower to the Lenders (present or future, direct or
contingent) have been satisfied and discharged, except:
(i) as expressly permitted by the terms of this
agreement; or
(ii) as permitted by the Facility Agent for the purpose of
meeting the obligations of that Borrower under this
agreement; or
(iii) with the prior consent of the Facility Agent.
16.3 INTEREST: Each amount deposited with the Facility Agent as referred to
in clause 16.2 shall (unless otherwise agreed or provided) bear
interest calculated by reference to successive deposit periods of the
duration agreed between the Facility Agent and the Borrowers (or, in
the absence of agreement, nominated by the Facility Agent). The rate of
interest applicable to a deposit period shall be as agreed by the
Facility Agent and the Borrowers (or, in the absence of agreement, the
rate certified by the Facility Agent as applicable to deposits of
comparable size and maturity placed with it by customers of comparable
standing). Provided that no Event of Default or Event of Review has
occurred (in which case interest shall be added to the deposit) any
such interest shall be paid to the relevant Borrower or as it may
direct (subject to clause 16.1).
16.4 BROKEN DEPOSIT: If the Facility Agent applies any moneys deposited with
it otherwise than on the last day of an applicable deposit period, it
may deduct (for its own account) such amount as in its opinion will
compensate it for breaking that deposit.
17. SHARING
17.1 PRO RATA UTILISATION OF COMMITMENTS:
(a) If, on the date of any distribution under the Security, the
proportion that the amount of a Lender's participation in all
outstanding Advances bears to the aggregate amount of all
outstanding Advances is less than that Lender's Pro
38
Rata Share then, prior to any such distribution being made,
that Lender must pay to the Facility Agent such amount (which
the parties acknowledge will be an Advance) as will result in
the amount of that Lender's participation in all outstanding
Advances being equal to that Lender's Pro Rata Share.
(b) Any amount paid to the Facility Agent under clause 17.1(a)
shall be immediately distributed by the Facility Agent to the
Lenders rateably in accordance with their Pro Rata Shares and
shall be applied by each Lender in reduction of the amount of
all outstanding Advances owing to that Lender.
17.2 PROPORTIONATE SHARING: Whenever any Lender receives or recovers
(whether by way of set-off, banker's lien or otherwise) all or part of
any amount due from any Borrower under any Transaction Document
otherwise than by way of a distribution by the Facility Agent under
this agreement or by the Security Agent under the Security, then:
(a) that Lender shall promptly pay the amount received or
recovered to the Facility Agent; and
(b) that amount shall be deemed to have been a payment to the
Facility Agent for the account of all the Lenders and not a
payment to that Lender for its own account, and to that extent
the liability of the relevant Borrower to that Lender shall
not be reduced by that amount, other than to the extent of any
distribution received by that Lender under this agreement.
17.3 REPAYMENT: If all or part of the amount received or recovered by the
relevant Lender is subsequently rescinded or shall otherwise be
restored to any Borrower, the Lenders shall repay to the Facility Agent
for the account of the relevant Lender the amount necessary to ensure
that all the Lenders share rateably (in accordance with their
Commitments) in the amount received or recovery retained by the
relevant Lender and clause 17.2(b) shall apply only to the retained
amount.
17.4 REFUSAL TO JOIN IN ACTION: If any Lender fails or refuses to join in
any action with the other Lenders against the Borrowers, or does not
pay its share of the costs of any such action, in each case having been
given a reasonable opportunity and being legally entitled to do so, its
failure shall be taken into account when determining its rateable
sharing and that Lender shall not be entitled to share in any amount
recovered as a result of any such action.
17.5 SECURITY SHARING: Notwithstanding:
(a) the respective dates of execution of any Transaction Document
or the order of registration of any Security; or
(b) the respective dates of advance of any moneys under any
Transaction Document; or
(c) the respective dates upon which any moneys may be or become
owing under any Transaction Document; or
(d) the repayment of any of the moneys secured by any Security; or
(e) anything contained in any Transaction Document; or
(f) any rule of law or equity or any other matter or thing
whatever,
39
the Security shall be held by the Security Agent for the benefit of the
Agents and the Lenders without any preference or priority amongst
themselves as continuing security for the payment by the Borrowers of
all moneys owing under the Transaction Documents (including interest
thereon and all other moneys payable to the Agents or the Lenders or
any of them in relation thereto).
18. RELATIONSHIP OF LENDERS TO AGENTS
18.1 AUTHORITY:
(a) Each Lender irrevocably appoints and authorises the Facility
Agent to act as its administrative agent and the Security
Agent to act as its security representative under the
Transaction Documents with the powers expressly given to each
of them under the Transaction Documents together with any
other powers which are reasonably incidental to those powers.
(b) Without limiting the generality of clause 18.1(a) each of the
Agents shall, subject to the Transaction Documents, act as
agent for the Lenders in:
(i) receiving payments from and making payments to the
Borrowers;
(ii) making demand or claim for any moneys payable under
any Transaction Document;
(iii) enforcing or attempting to enforce the Security or
any part of it;
(iv) exercising the rights, powers and remedies of the
Lenders against the Obligors under the Transaction
Documents; and
(v) issuing and receiving notices under the Transaction
Documents on behalf of the Lenders.
(c) Any action taken by an Agent in accordance with this clause
18.1 shall bind all the Lenders.
(d) The Agents shall have no duties or responsibilities except
those expressly set out in the Transaction Documents.
18.2 INSTRUCTIONS; EXTENT OF DISCRETION:
(a) In the exercise of any of its rights, powers and discretions
under the Transaction Documents, each of the Agents shall act
in accordance with the instructions (if any) of the Majority
Lenders or (where specified) of all the Lenders. The Agents
shall not be obliged to seek instructions except where
expressly required by any Transaction Document.
(b) In the absence of any such instructions, each of the Agents
may act as it thinks fit in the best interests of the Lenders
as a whole or may, notwithstanding clause 18.1(b), refrain
from acting until receipt of instructions.
(c) Except where this agreement otherwise expressly provides,
neither of the Agents shall be obliged to consult with the
Lenders before giving any consent, approval or agreement or
making any determination under the Transaction Documents
unless it is practicable to do so and shall not, in the
opinion of the relevant Agent, prejudice the interests of the
Lenders as a whole.
40
(d) Each of the Agents may refrain from doing anything which would
or might in its opinion be contrary to any law or official
directive, or render it liable to any person.
(e) Notwithstanding any other provision in this clause 18.2,
neither of the Agents shall be obliged to take any action
under any Transaction Document until it is first secured to
its satisfaction in accordance with clause 18.11(c).
18.3 NO OBLIGATION TO INVESTIGATE:
(a) No Borrower shall be concerned to enquire as to whether any
instructions have been given to an Agent as required by this
agreement or as to the terms of any such instructions.
(b) As between the Borrowers on the one hand and each of the
Agents and the Lenders on the other hand, all actions taken by
an Agent under the Transaction Documents shall be deemed to be
authorised.
18.4 AGENT NOT A TRUSTEE: Neither of the Agents shall be deemed to be the
trustee for the benefit of any Lender (except, in the case of the
Security Agent, to the minimum extent, if any, required by law to
ensure that the Security secures the Lenders) or the Borrowers or to
have any fiduciary duty other than as expressly provided in any
Transaction Document. Neither of the Agents shall in any respect be the
agent of any Borrower by virtue of any Transaction Document.
18.5 EXONERATION: Neither of the Agents nor any of its directors, officers,
employees, agents, attorneys, subsidiaries or successors shall be
responsible to any Lender or any Borrower for:
(a) any statement, representation or warranty provided to it in
any Transaction Document, or in any document or agreement
referred to or provided for in or received under any
Transaction Document; or
(b) the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any Transaction Document or
any other such document or agreement; or
(c) any failure by any Borrower or any Lender to perform its
obligations; or
(d) any action taken or omitted to be taken by it under any
Transaction Document except in the case of its own wilful
misconduct, gross negligence or fraud; or
(e) any action taken or omitted to be taken by it under any
Transaction Document acting on instructions from all the
Lenders or the Majority Lenders.
18.6 DELEGATION: Each of the Agents may delegate to any person any of the
rights, powers and discretions vested in it by the Transaction
Documents which cannot conveniently be exercised by it or through its
employees, and may appoint attorneys, upon such terms and conditions as
it thinks fit.
18.7 RELIANCE ON DOCUMENTS AND EXPERTS: Each of the Agents may rely on:
(a) any communication or document (including any facsimile
transmission, telegram or telex) reasonably believed by it to
be genuine and correct; and
(b) advice and statements of lawyers, accountants and other
experts selected by it.
41
18.8 NOTICE OF TRANSFER: Each of the Agents may treat each Lender as the
holder of the benefit of that Lender's rights under the Transaction
Documents unless and until the relevant Agent has received a transfer
certificate substantially in the form of schedule 7 or a notice of
assignment of that Lender's rights in a form satisfactory to the
relevant Agent.
18.9 KNOWLEDGE OF DEFAULT:
(a) Neither of the Agents shall be required to keep itself
informed as to the observance or performance by the Borrowers
of any of their obligations under any Transaction Document or
any other document or agreement, or to inspect the assets or
records of any Borrower or any of that Borrower's
Subsidiaries, or to investigate whether or not any Event of
Default or an Event of Review has occurred or might occur.
(b) Each of the Agents may assume that the Borrowers are observing
and performing their obligations, and shall be deemed not to
have knowledge of the occurrence of any Event of Default or an
Event of Review or similar event (whatever called) under any
Transaction Document unless they have received notice from a
Lender or a Borrower stating that an Event of Default or an
Event of Review or similar event has occurred and describing
it, or the officers of the relevant Agent having
responsibility at that time for the administration of the
Facilities actually become aware that an Event of Default or
an Event of Review or similar event has occurred (in which
event the relevant Agent shall, subject to clause 18.13(c),
promptly notify the Lenders).
18.10 AGENT AS LENDER AND BANKER:
(a) Each of the Agents, if a Lender, shall have the same rights
and powers under the Transaction Documents as the other
Lenders and may exercise those rights and powers as if it were
not acting as an Agent.
(b) Each of the Agents may (without having to account to any
Lender) engage in any kind of business with any Borrower and
its Subsidiaries as if it were not an Agent and may accept
fees or other consideration for services without having to
account to the Lenders.
18.11 INDEMNITY TO EACH OF THE AGENTS:
(a) The Lenders indemnify each of the Agents (to the extent not
reimbursed by the Borrowers) rateably in accordance with their
respective Commitments against all costs, losses, expenses and
liabilities of any kind which may be sustained or incurred by
or asserted against the relevant Agent in its capacity as such
relating to or arising out of the Transaction Documents other
than the normal costs incurred by the Agent in the ordinary
course of administration of the Facilities. Each Lender shall,
upon demand, pay to the relevant Agent its proportionate share
of all amounts payable under this indemnity.
(b) No Lender shall be liable under this clause 18.11 for any of
the foregoing to the extent that they arise from the relevant
Agent's wilful misconduct, gross negligence or fraud.
(c) If the Majority Lenders request an Agent to take any
enforcement action the Lenders shall be obliged to pay to the
relevant Agent, within three Business Days of request, each
amount reasonably estimated by the relevant Agent and its
legal advisers as necessary to meet the expenses of legal
proceedings or otherwise in connection with such enforcement.
Each Lender shall be obliged
42
to pay its respective proportion of those amounts. If the
estimated amount exceeds the amount actually required, the
relevant Agent shall repay each Lender's proportion of the
excess.
18.12 INDEPENDENT INVESTIGATION: Each Lender agrees that it has made and
shall continue to make, independently and without reliance on either of
the Agents or any other Lender and based on such documents and
agreements and information as it considers appropriate:
(a) its own investigation into the financial condition and affairs
of each Borrower and its Subsidiaries; and
(b) its own analyses and decisions as to whether or not to take
action under any Transaction Document.
18.13 INFORMATION:
(a) Each of the Agents shall provide to the Lenders as soon as
practicable copies of all notices, reports and other documents
provided to it under the Transaction Documents and copies of
all documents comprising the conditions precedent to this
agreement.
(b) Neither of the Agents shall have any duty or responsibility
(but is authorised by each Borrower) to provide any Lender
with any information concerning the affairs, financial
condition or business of that Borrower or its Subsidiaries
which may otherwise come into the possession of the relevant
Agent.
(c) Nothing in any Transaction Document shall oblige an Agent to
disclose any information relating to any Borrower if that
disclosure would or might in the opinion of the relevant Agent
on the basis of the advice of its legal advisers constitute a
breach of any law or duty of secrecy or confidence.
18.14 REPLACEMENT OF AN AGENT:
(a) Subject to the appointment and acceptance of a successor Agent
as provided in this clause 18.14:
(i) each Agent may resign at any time by giving not less
than 30 days' notice to the Lenders, the other Agent
and the Borrowers; or
(ii) the Majority Lenders may, by giving not less than 30
days' notice to the Borrowers and the Agents, remove
an Agent from office.
(b) Upon any notice of resignation or removal being given the
Majority Lenders shall have the right to appoint a successor
Agent approved by the Borrowers provided that:
(i) the Borrowers may not unreasonably withhold their
consent; and
(ii) no consent shall be required where the proposed
successor Agent is a Lender or an associated company
of a Lender.
(c) If no successor Agent has been appointed by the Lenders or has
accepted an appointment within 30 days after any such notice,
the retiring Agent may on behalf of the Lenders appoint a
successor Agent.
43
(d) Upon the acceptance of any appointment under this clause 18.14
by a successor Agent, the successor Agent shall succeed to and
become vested with all the rights, powers and obligations of
the retiring Agent under the Transaction Documents including,
in the case of the Security Agent, as security representative)
and as from that time the retiring Agent shall be discharged
from its rights, powers and obligations.
(e) After any retiring Agent's resignation or removal, the
provisions of this clause 18.4 shall continue in effect in
respect of any actions taken or omitted to be taken by it
while it was acting as an Agent.
18.15 AMENDMENT TO TRANSACTION DOCUMENTS: Each Lender authorises the Security
Agent, in respect of any Security, and the Facility Agent, in respect
of any other Transaction Document, to agree with the other parties to
the relevant Security or Transaction Document to any amendment to that
Security or, as the case may be, Transaction Document if:
(a) that Lender has notified the Agents in writing of its
agreement to the amendment; or
(b) the amendment will not increase the Commitments or other
obligations of the Lenders, vary the Security, change the
times or amounts of payment of any moneys payable under any
Transaction Document, or amend this clause 18.15 or any
provision under which the agreement or instructions of all
Lenders or the Majority Lenders are required and:
(i) the relevant Agent is satisfied that the amendment is
made to correct a manifest error or is of a minor,
formal or technical nature only; or
(ii) the Majority Lenders have, at the request of the
relevant Agent, notified the relevant Agent of their
agreement to the amendment.
Each Lender shall be bound by any such amendment so agreed to by the
relevant Agent as if it were party to the relevant amendment agreement.
18.16 WAIVERS: With the exception of any agreement requiring (or
incorporating a requirement for) either the consent of, or the Facility
Agent to act on the instructions of, all Lenders, which may only be
waived by the Facility Agent acting on instructions of all Lenders, any
other provision of this agreement may be waived by the Facility Agent
acting on the instructions of the Majority Lenders.
19. INDEMNITIES
19.1 MISCELLANEOUS INDEMNITIES: Each Borrower indemnifies each Agent and
each Lender against any costs, losses, expenses or liabilities
sustained or incurred by the relevant Agent or the relevant Lender as a
result of:
(a) all or any part of any Advance not being made for any reason,
including by reason of non-fulfilment of any of the conditions
precedent in clause 4 or any other condition precedent to an
Advance but excluding by reason of the default of the Facility
Agent or a Lender; or
(b) any amount payable by that Borrower under this agreement not
being paid when due (but, so far as appropriate, credit will
be given for any interest received by the Facility Agent or
the relevant Lender under clause 15); or
44
(c) the occurrence or continuance of any other Event of Default or
an Event of Review; or
(d) the receipt or recovery by an Agent or any Lender of all or
any part of any amount payable under this agreement (by
prepayment or acceleration or otherwise) otherwise than on the
due date relating to such amount (but, so far as appropriate,
credit will be given for any amount paid under clause
7.4(a)(ii)); or
(e) any environmental liability, or non-compliance by that
Borrower or any of its Subsidiaries or any other Obligor with
any requirement or obligation of any nature in respect of any
activity or undertaking carried out or performed on or from
any land owned or occupied by any of those persons,
including but not limited to any costs, losses (including loss of
margin), expenses or liabilities on account of funds borrowed,
contracted for or utilised to fund any amount payable hereunder and any
foreign exchange transactions entered into in anticipation of an
Advance being made.
19.2 CURRENCY INDEMNITY:
(a) If any Outstanding Money is received by an Agent or by any
Lender in a currency ("FIRST CURRENCY") other than the
currency ("SECOND CURRENCY") in which it is payable (whether
as a result of obtaining or enforcing an order or judgment,
Liquidation of any person or otherwise), the amount received
shall only satisfy the relevant Borrower's obligation to pay
the Outstanding Money to the extent of the amount of the
second currency which the relevant Agent or that Lender is
able, in accordance with its usual practice, to purchase with
the amount received in the first currency on the date of that
receipt (or, if it is not practicable to make that purchase on
that date, on the first day upon which it is practicable to do
so).
(b) Each Borrower indemnifies each Agent and the Lenders against:
(i) any loss sustained by the relevant Agent or by the
relevant Lender as a result of the amount purchased
by it in the second currency pursuant to clause
19.2(a) being less than the amount due; and
(ii) all costs and expenses incurred by the relevant Agent
or the relevant Lender in purchasing the second
currency.
19.3 PAYMENT: Each Borrower shall pay to the relevant Agent or the relevant
Lender, upon demand, in the currency stipulated by the relevant Agent
or that Lender, all amounts payable pursuant to the indemnities in
clauses 19.1 and 19.2(b).
20. ASSIGNMENT
20.1 AGREEMENT BINDING: This agreement is binding on, and is for the benefit
of, the parties and their respective successors, permitted assigns and
transferees.
20.2 BORROWERS MAY NOT ASSIGN: No Borrower may assign or transfer any of its
rights or obligations under this agreement or any other Transaction
Document.
20.3 LENDERS MAY ASSIGN AND TRANSFER: Each Lender may assign or transfer all
or part of its rights or obligations, under the Transaction Documents
or any of them to any one or more banks or financial institutions (each
a "TRANSFEREE") subject to:
45
(a) the prior written consent of the Company (which consent will
not be unreasonably withheld and shall not be required if:
(i) the proposed Transferee is associated with or
affiliated to the relevant Lender; or
(ii) an Event of Default or an Event of Review has
occurred and remains unremedied); and
(b) in the case of a transfer of obligations, the prior consent of
the Facility Agent acting on the instructions of the Majority
Lenders (for which purpose the Lender wishing to transfer, and
relevant Commitment, shall be excluded in determining the
Majority Lenders), which consents:
(i) may not be unreasonably withheld;
(ii) shall not be required in relation to an assignment to
an existing Lender;
(iii) shall not be required in relation to an assignment by
a Lender to its wholly owned subsidiary or its
parent; and
(c) in the case of a transfer of obligations, the transfer being
effected in the manner specified in clause 20.4;
(d) any necessary prior authorisation being obtained;
(e) no assignment or transfer taking effect during the three
Business Days prior to the commencement of any Interest Period
applicable to the relevant Commitment; and
(f) the provisions of clause 20.7.
20.4 TRANSFER CERTIFICATE:
(a) If a Lender wishes to transfer all or part of its obligations
under the Transaction Documents, it and the transferee shall
execute and deliver to the Facility Agent 4 counterparts of a
transfer certificate substantially in the form set out in
schedule 7 and shall pay to the Facility Agent the
registration fee referred to therein.
(b) On receipt of a transfer certificate the Facility Agent shall
notify the Borrowers and the other Lenders and, subject to the
prior receipt by it of any consent required under clause
20.3(a), the Facility Agent shall:
(i) countersign the counterparts of the transfer
certificate on behalf of all other parties to this
agreement;
(ii) enter the transfer in a register kept by it (which
shall be conclusive) and notify the other parties to
this agreement of the transfer and the amended
relevant Commitments, if applicable; and
(iii) retain one counterpart and deliver the others to each
Borrower, the transferring Lender and the transferee.
(c) On a transfer certificate being countersigned by the Facility
Agent:
46
(i) the transferring Lender shall be relieved of its
obligations arising after the date of the transfer to
the extent specified in the transfer certificate;
(ii) the Transferee shall be bound by the Transaction
Documents as stated in the transfer certificate as if
it were a party and named as a Lender; and
(iii) the transferring Lender's relevant Commitment shall
be reduced or eliminated (as the case may be) and the
Transferee shall assume a Commitment under the
relevant Facility equal to the reduction or
elimination.
(d) Each other party to this agreement irrevocably authorises the
Facility Agent to sign each transfer certificate on its behalf
provided that the provisions of clauses 20.3 and 20.4 have
been complied with.
20.5 TRANSFEREE TREATED AS LENDER: Any Transferee referred to in clause 20.3
shall be treated as a Lender for all purposes of the Transaction
Documents, and will be bound thereby to the same extent as if it were
an original party in respect of the rights and obligations assigned and
transferred to it.
20.6 LENDING BRANCH: Any Lender may change its lending branch from time to
time in relation to all or any part of a Facility Amount or a Facility
on giving prior written notice to the Company.
20.7 DISCLOSURE: Any Lender may disclose to a potential Transferee or any
other person with whom it wishes to enter into contractual relations in
connection with the Transaction Documents all information held by it
about the Borrowers and their Subsidiaries with the consent of the
Company which consent may not be unreasonably withheld or delayed and
shall not be required where the disclosure is in connection with any
assignment or transfer where the Company's consent is not necessary
under clause 20.3. Any such disclosure requiring consent may be subject
to any confidentiality requirements reasonably requested by the
Company.
20.8 SECURITISATION: In addition to their rights under clause 20.3, each
Lender may, without the consent of the Borrower, assign, transfer,
sub-participate or otherwise deal with all or any part of its rights
and benefits under the Transaction Documents to a trustee, company, or
other entity which in each case is established for the purpose of
securitisation.
20.9 NO INCREASED COSTS: Notwithstanding anything to the contrary in any
Transaction Document, if (other than at the request of any Borrower)
any Lender (or any assignee or transferee from the Lender or any
subsequent assignee or transferee) assigns or transfers any of its
rights or obligations under the Transaction Documents or any of them
the Borrowers shall not be under any greater monetary obligation under
the Transaction Documents, as a direct consequence of that assignment
or transfer, than they would have been but for that assignment or
transfer.
21. NOTICES
21.1 WRITING: Each notice or other communication to be given or made by a
party under this agreement shall:
(a) WRITING: be given or made in writing by facsimile or letter
and be signed by the sender or an authorised officer of the
sender;
47
(b) ADDRESS: be given or made to that party at the address or
facsimile number, and marked for the attention of the person
(if any), from time to time designated by that party to the
other for the purposes of this agreement;
(c) DEEMED DELIVERY: not be effective until received by that
party, and any such notice or communication shall be deemed to
be received by that party:
(i) (if given or made by letter) when left at the address
of that party or five Business Days after being put
in the post (by airmail if to another country),
postage prepaid, and addressed to that party at that
address; or
(ii) (if given or made by facsimile) upon production of a
transmission report by the machine from which the
facsimile was sent which indicates that the facsimile
was sent in its entirety to the facsimile number of
the recipient,
provided that any notice or communication received or deemed
received after 5 pm on a working day in the place to which it
is sent, or on a day which is not a Business Day in that
place, will be deemed not to have been received until the next
Business Day in that place.
21.2 INITIAL ADDRESS AND NUMBERS: The initial address, facsimile number and
person (if any) so designated by each party, are set out under the name
of that party at the end of this agreement.
22. FEES
22.1 ARRANGEMENT FEES: The Company shall pay to the Lead Arranger the
arrangement fees specified in the letter dated on or about the date
of this agreement from the Lead Arranger to the Company.
22.2 COMMITMENT FEES:
(a) The Borrowers shall pay to the Facility Agent for the account
of the Lenders a non-refundable commitment fee on each
Facility:
(i) for the period prior to the date of the first
compliance certificate delivered to the Lenders
pursuant to clause 10.1(a)(iv), at the percentage
rate per annum set out below applicable to the
Facility on which the fee is payable:
COMMITMENT FEE % PER ANNUM
-------------------------------------------
THREE YEAR FACILITY FIVE YEAR FACILITY
-------------------------------------------
0.60 0.65
-------------------------------------------
(ii) thereafter, at the percentage rate per annum
applicable to the relevant Facility set out below
opposite the Gearing Ratio which was reported by the
Company in the most recent compliance certificate
delivered to the Lenders pursuant to clause
10.1(a)(iv) prior to the date on which the fee is
due:
48
COMMITMENT FEE % PER
ANNUM
----------------------------
THREE YEAR FIVE YEAR
GEARING RATIO FACILITY FACILITY
-----------------------------------------------------------------------------------------
Greater than 3.25 times 0.60 0.65
-----------------------------------------------------------------------------------------
Less than or equal to 3.25 times but greater than 2.50 0.50 0.55
times
-----------------------------------------------------------------------------------------
Less than or equal to 2.50 times but greater than 1.75 0.40 0.45
times
-----------------------------------------------------------------------------------------
Less than or equal to 1.75 times 0.40 0.40
-----------------------------------------------------------------------------------------
(b) The commitment fee shall, in relation to each Facility, be
payable on the relevant Facility Amount from day to day during
the period beginning on the date of this agreement and ending
on the later of the Expiry Date of the relevant Facility and
the day on which the last of the Outstanding Money under the
relevant Facility is received by the Lenders.
(c) The commitment fee shall, in relation to each Facility, be
payable quarterly in advance commencing on the Commencement
Date, and thereafter on each Test Date, and shall be divided
amongst the Lenders in proportion to their Commitments under
the relevant Facility.
22.3 ESTABLISHMENT FEE: The Borrowers shall pay to the Facility Agent for
the account of the Lenders, a non-refundable establishment fee in the
amount specified in the letter dated on or about the date of this
agreement from the Lead Arranger to the Company.
22.4 AGENCY FEES: The Borrowers shall pay to each of the Agents for its own
account the fees specified in the letters dated on or about the date of
this agreement from each of the Agents to the Company.
23. COSTS AND EXPENSES
23.1 COSTS AND EXPENSES: The Borrowers shall pay to the Facility Agent or,
as the case may be, the Security Agent upon demand an amount equal to
all costs, losses, expenses and other liabilities on a full indemnity
basis (including legal expenses on a full indemnity basis and goods and
services and similar taxes thereon) incurred or sustained by the
Facility Agent, the Security Agent or the Lenders in connection with:
(a) the negotiation, preparation, signing, delivery and
administration of the Transaction Documents and the
syndication of the Facilities;
(b) the exercise, enforcement or preservation, or the attempted
exercise, enforcement or preservation, of any right under any
Transaction Document, or in suing for or recovering any sum
due under any Transaction Document; and
(c) the granting of any waiver or consent under, or the giving of
any variation or release of any Transaction Document.
23.2 STAMP DUTY AND TAXES: The Borrowers shall pay all stamp, documentary,
transaction, registration and other like duties and taxes (including
fines, interest and penalties), if any, which may be payable or
determined to be payable in connection with the signing, delivery,
registration, performance, exercise of any right under, or enforcement
or variation of, any Transaction Document, and shall indemnify each
Agent and each
49
Lender against all liabilities in relation to, or resulting from, any
delay or omission to pay any such duties or taxes.
23.3 GST INCLUSIVE: If any supply by an Agent or by any Lender to any
Borrower shall, at the time of supply, be subject to goods and services
tax, that Borrower shall pay to the relevant Agent or the relevant
Lender an amount equal to the applicable goods and services tax in
addition to the consideration for that supply.
24. EVIDENCE OF DEBT
24.1 LENDERS TO MAINTAIN ACCOUNTS: Each Lender shall maintain, in accordance
with its usual practice, accounts evidencing the amounts from time to
time lent by and/or owing to each Agent and each Lender under this
agreement.
24.2 ACCOUNTS PRIMA FACIE EVIDENCE: In any legal action or proceedings
arising out of or in connection with any Transaction Document, the
entries made in the accounts maintained pursuant to clause 24.1 shall
be prima facie evidence of the existence and amounts of the obligations
of the Borrowers recorded therein.
24.3 CERTIFICATE OF AGENT/LENDER: A certificate of any officer of an Agent
or of any Lender as to any amount or fact which might reasonably be
expected to be within the knowledge of the relevant Agent or that
Lender shall be prima facie evidence of such amount or fact.
24.4 DETERMINATION OF INTEREST RATES: The determination by the Facility
Agent of the Specified Rate, from time to time for the purposes of this
agreement shall, in the absence of manifest error, be conclusive and
binding upon the Borrowers.
25. MISCELLANEOUS
25.1 PARTIAL INVALIDITY: If at any time any provision of any Transaction
Document is or becomes illegal, invalid or unenforceable in any respect
under the law of any relevant jurisdiction, that illegality, invalidity
or unenforceability shall not affect the enforceability of the
provisions, or (as the case may be) the remaining provisions, of this
agreement, nor shall the legality, validity or enforceability of any of
those provisions under the law of any other jurisdiction be in any way
affected or impaired thereby.
25.2 NO IMPLIED WAIVERS: Time shall be of the essence in respect of
performance by each Borrower of its obligations under any Transaction
Document but no failure on the part of an Agent or any Lender to
exercise, and no delay on any of their parts in exercising, any right,
power or remedy under any Transaction Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any right,
power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.
25.3 REMEDIES CUMULATIVE: The rights, powers and remedies provided in this
agreement are in addition to, and not exclusive of, any rights, powers
or remedies provided by law.
25.4 OBLIGATIONS INDEPENDENT: Each of the obligations of the Borrowers under
clauses 14.2, 19.1 and 19.2 and section 23 shall constitute a
continuing obligation, separate and independent from their other
obligations under any Transaction Document and shall survive payment of
the Outstanding Money and release of the security.
25.5 ENFORCEMENT: It shall not be necessary for an Agent or for any Lender
to incur any expense or make any payment before enforcing any of its
rights in respect of any obligation of any Borrower referred to in
clause 25.4.
50
25.6 PAYMENTS: The obligation of each Borrower to pay any money under this
agreement shall only be discharged when the relevant Agent or the
relevant Lender is satisfied that the relevant Borrower or any other
person or persons making any payment of that money was solvent at the
time of making that payment or after the elapse of the period during
which any such payment may become or be deemed to be avoided or
voidable.
25.7 CONSENTS: The Agents or the Lenders may, unless specifically provided
otherwise in this agreement, give or withhold any approval or consent
in its or their absolute discretion, and either conditionally or
unconditionally.
26. GOVERNING LAW
26.1 This agreement shall be governed by, and construed in accordance with,
the laws of New Zealand, and the parties hereby submit to the
jurisdiction of the courts of New Zealand.
27. COUNTERPARTS
27.1 This agreement may be signed in any number of counterparts, all of
which will together constitute one and the same instrument, and any of
the parties may execute this agreement by signing any such counterpart.
51
SIGNATURES
BORROWER
XXXXXXXX CHALLENGE FORESTS
LIMITED by:
_____________________________________ _____________________________________
Signature of director Signature of director
_____________________________________ _____________________________________
Name of director Name of director
________________________________________________________________________________
ADDRESS FOR NOTICES
0 Xxxxxxxxx Xxxxxx
Xxxxxxx
Xxxxxxxx
Facsimile No: 00 0 000 0000
Telephone No: 00 0 000 0000
Attention: Chief Financial Officer
FACILITY AGENT
SIGNED by BANK OF NEW ZEALAND by
its attorneys in the presence of:
_____________________________________
Signature of Attorney
_____________________________________ _____________________________________
Signature of witness Name of Attorney
_____________________________________ _____________________________________
Name of witness Signature of Attorney
_____________________________________ _____________________________________
Occupation Name of Attorney
_____________________________________
City/town of residence
________________________________________________________________________________
ADDRESS FOR NOTICES
Xxxxx 00, XXX Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxxx
Facsimile No: 00 0 000 0000
Telephone No: 00 0 000 0000
Attention: Manager - Facility Management Unit - Corporate and Institutional
Banking
52
SECURITY AGENT
SIGNED by BANK OF NEW ZEALAND by
its attorneys in the presence of:
_____________________________________
Signature of Attorney
_____________________________________ _____________________________________
Signature of witness Name of Attorney
_____________________________________ _____________________________________
Name of witness Signature of Attorney
_____________________________________ _____________________________________
Occupation Name of Attorney
_____________________________________
City/town of residence
________________________________________________________________________________
ADDRESS FOR NOTICES
Xxxxx 00, XXX Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxxx
Facsimile No: 00 0 000 0000
Telephone No: 00 0 000 0000
Attention: Manager - Facility Management Unit - Corporate and Institutional
Banking
LENDERS
SIGNED by BANK OF NEW ZEALAND by
its attorneys in the presence of:
_____________________________________
Signature Attorney
_____________________________________ _____________________________________
Signature of witness Name of Attorney
_____________________________________ _____________________________________
Name of witness Signature of Attorney
_____________________________________ _____________________________________
Occupation Name of Attorney
_____________________________________
City/town of residence
________________________________________________________________________________
ADDRESS FOR NOTICES
Xxxxx 00, XXX Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxxx
Facsimile No: 00 0 000 0000
Telephone No: 00 0 000 0000
Attention: Xxxx Xxxxxxxxx
53
SIGNED by ANZ BANKING GROUP (NEW
ZEALAND) LIMITED by its attorney in the
presence of:
_____________________________________
Signature of Attorney
_____________________________________ _____________________________________
Signature of witness Name of Attorney
_____________________________________
Name of witness
_____________________________________
Occupation
_____________________________________
City/town of residence
________________________________________________________________________________
ADDRESS FOR NOTICES
Xxxxx 00, XXX Xxxxxx
00-00 Xxxxxx Xxxxxx
Xxxxxxxx
Facsimile No: 00 0 000 0000
Telephone No: 00 0 000 0000
Attention: Xxxxx Xxxxxxxx
54
SIGNED by COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.
acting through its RABOBANK, NEW
ZEALAND BRANCH by its attorneys in the
presence of:
_____________________________________
Signature of Attorney
_____________________________________ _____________________________________
Signature of witness Name of Attorney
_____________________________________ _____________________________________
Name of witness Signature of Attorney
_____________________________________ _____________________________________
Occupation Name of Attorney
_____________________________________
City/town of residence
________________________________________________________________________________
ADDRESS FOR NOTICES
Rabobank Australia Limited
Xxxxx 0, 000 Xxxx Xxxxxx
Xxxxxx, XXX 0000
Xxxxxxxxx
Facsimile No: 00 0 0000 0000
Telephone No: 00 0 0000 0000
Attention: Xxx Xxxxxx, Corporate Loans Administration
WITH A COPY TO:
Rabobank New Zealand Branch
Xxxxx 0, Xxxxx 0,
00-00 Xxxxxxxxx Xxxxxx
Xxxxxxxx
Facsimile No: 00 0 000 0000
Telephone No: 00 0 000 0000
Attention: Xxxxxx Xxxxxxxx, Senior Manager, Corporate
55
SIGNED by THE NATIONAL BANK OF
NEW ZEALAND LIMITED by its attorney in
the presence of:
_____________________________________
Signature of Attorney
_____________________________________ _____________________________________
Signature of witness Name of Attorney
_____________________________________
Name of witness
_____________________________________
Occupation
_____________________________________
City/town of residence
________________________________________________________________________________
ADDRESS FOR NOTICES
Xxxxx 0, 000 Xxxxx Xxxxxx
PO Box 788
Auckland
Facsimile No: 00 0 000 0000
Telephone No: 00 0 000 0000
Attention: Relationship Manager, Corporate
and Commercial Banking
56
SCHEDULE 1
LENDERS
COMMITMENTS
(NZ$)
----------------------------------------------------------------------
LENDER THREE YEAR FACILITY FIVE YEAR FACILITY TOTAL
-----------------------------------------------------------------------------------------------------------
BANK OF NEW ZEALAND 50,000,000 50,000,000 100,000,000
-----------------------------------------------------------------------------------------------------------
ANZ BANKING GROUP 45,000,000 45,000,000 90,000,000
(NEW ZEALAND) LIMITED
-----------------------------------------------------------------------------------------------------------
COOPERATIEVE CENTRALE 32,500,000 32,500,000 65,000,000
RAIFFEISEN-BOERENLEENBANK
B.A. (RABOBANK), NEW ZEALAND
BRANCH
-----------------------------------------------------------------------------------------------------------
THE NATIONAL BANK OF NEW 22,500,000 22,500,000 45,000,000
ZEALAND LIMITED
-----------------------------------------------------------------------------------------------------------
TOTAL 150,000,000 150,000,000 300,000,000
-----------------------------------------------------------------------------------------------------------
57
SCHEDULE 2
CONDITIONS PRECEDENT
(CLAUSE 4.1)
1. TRANSACTION DOCUMENTS: duly executed copies of each Transaction
Document;
2. DIRECTOR'S CERTIFICATE: a certificate by a director of each Obligor in
the form set out in schedule 3 attaching the documents (if any)
referred to in that certificate;
3. REGISTRATION OF SECURITIES: evidence that each Security that is
registerable under the Personal Property Securities Act 1999 has been
duly registered and that each other Security is in a form able to be
registered at the relevant New Zealand or, if applicable, relevant
overseas registries, in each case free from all prior Security
Interests and third party rights and interests other than:
(i) Permitted Security Interests;
(ii) other interests disclosed to, and agreed to in writing by, the
Lenders;
4. STAMPING: if applicable, evidence that any Transaction Document on
which stamp duty is payable has been lodged for stamping in all
relevant jurisdictions with a cheque for the appropriate stamp duty,
and all declarations and other documents required for the purposes of
stamping any such Transaction Documents have been provided to the
Security Agent;
5. CERTIFICATE OF SIGNATORIES: a certificate of a director or the
secretary of each Obligor certifying the names and true signatures of
its officers authorised to sign the Transaction Documents;
6. CERTIFICATE OF INSURANCE: a certificate of the Chief Executive Officer,
certifying the maintenance of insurance with responsible insurance
carriers or on a self-insurance basis in such amounts and covering such
risks as have been recommended by the Chief Executive Officer as
prudent for companies engaged in similar businesses and owning similar
properties in the same general areas in which the Group operates;
7. NO MATERIAL ADVERSE EFFECT: a certificate of the Chief Executive
Officer that from the date of the 30 June 2002 consolidated financial
statements of the Group to the Commencement Date, there has been no
change, condition, event or occurrence which has had or will be likely
to have a Material Adverse Effect;
8. LITIGATION: a certificate from the Chief Executive Officer that, except
as disclosed in writing to the Lenders, there are no material actions,
suits or arbitration proceedings pending or threatened involving any
Obligor nor any litigation or administrative proceedings, governmental
investigations or other legal or regulatory developments, actual or
threatened, that, singly or in the aggregate, would, if adversely
determined, have a Material Adverse Effect;
9. CANCELLATION NOTICE: a copy of a cancellation notice cancelling the
whole of the facilities under the Existing Facilities Agreement with
effect from the date of the proposed date of the first drawdown under
the Facilities;
10. RELEASE OF EXISTING SECURITIES AND GUARANTEES: evidence that all
Security Interests and Guarantees, if any, in support of the Group's
indebtedness under the Existing Facilities Agreement have been
discharged and released or, in either case, arrangements satisfactory
to the Facility Agent (acting reasonably) have been made for the
repayment, termination, discharge and release;
58
11. ENVIRONMENTAL: a certificate from the Chief Executive Officer
confirming that there are no environmental and employee health and
safety exposures to which the Group may be subject which have or will
be likely to have a Material Adverse Effect;
12. FINANCIAL MODEL: the Financial Model, and an audit thereof by
PricewaterhouseCoopers;
13. OBLIGORS' LEGAL OPINIONS: favourable legal opinions of the respective
counsel to the Obligors in the jurisdictions in which the Obligors or
any of their assets are located (other than Japan and Australia);
14. LENDERS' LEGAL OPINION: a favourable legal opinion of the counsel to
the Lenders;
15. FEES AND EXPENSES: evidence that all fees, expenses and other amounts
then due and payable under the Transaction Documents and the mandate
letter dated 5 December 2002 from the Lead Arranger to the Company
shall have been paid in full;
16. APPROVED ISSUER STATUS: evidence that each Borrower has registered as
an approved issuer (as defined in section OB 1 of the Income Tax Act
1994) and that the Facilities are registered under section 86 H of the
Stamp and Cheque Duties Xxx 0000;
17. HEDGING: written confirmation from the Chief Financial Officer of the
Company that the Borrowers are in compliance with the hedging policy of
the Group as adopted by the Board of Directors of the Company and that
as at the Commencement Date all of the Group's hedging is executed with
the Lenders and secured by the Security;
18. AUTHORISATIONS: a certificate from the Chief Executive Officer that all
material authorisations or waivers (including, if required, a waiver
from the New Zealand Stock Exchange of Listing Rule 9.2 in respect of
cross-directorships), consents, permits and licences (including all
crown forestry licences) required by the Group in relation to the
businesses of the Group have been obtained and are in full force and
effect (other than as disclosed to, and agreed to in writing by, the
Lenders);
19, INDEPENDENT REVIEW: an independent review of the valuation of the
forest assets owned by the Group;
20. TAX LOSSES: confirmation from the Group's auditors that under the
Financial Model Base Case there are sufficient tax losses available to
the Group (excluding Tarawera for this purpose) so that under that
Financial Model Base Case no New Zealand Tax will be payable in cash
during the term of the Facility;
21. LOG PRICES: confirmation from a forestry consultant acceptable to the
Lenders that the log prices assumed in the Financial Model are
reasonable; and
22. MISCELLANEOUS: such other certificates and documentation as the
Facility Agent may reasonably request.
59
SCHEDULE 3
FORM OF DIRECTOR'S CERTIFICATE
TO: {NAME AND ADDRESS OF FACILITY AGENT}
I, { }, a director of { } ("COMPANY"), certify as follows:
1. BOARD RESOLUTIONS
1.1 The board of directors of the Company ("BOARD") has passed all
necessary resolutions to:
(a) approve the transactions ("TRANSACTIONS") contemplated by the
document{s} listed in the schedule ("DOCUMENT{S}"), and the
Document{s} {themselves} {itself};
(b) authorise signing of the Document{s} by or on behalf of the
Company in the manner in which {they have} {it has} actually
been signed{; and
(c) authorise the persons specified in paragraph 10 to give any
notices and other communications, and take any other action
required, under or in connection with the Document{s} on
behalf of the Company}.
1.2 The resolutions were duly passed {OPTION 1: ## OPTION 2: ##}
1.3 The resolutions remain in full force and effect.
2. DIRECTORS' SELF INTERESTED TRANSACTIONS
2.1 {OPTION 1: ##
2.2 OPTION 2: ##}
2.3 All of the Company's entitled persons have agreed in writing (pursuant
to section 107(3) of the Act) to the Company's entry into and
performance of the Document{s} and the Transactions (so that nothing in
sections 140 and 141 of the Act will apply to the Transactions.
2.4 In approving the Document{s} and the Transactions, the Board, after
taking into account all relevant factors, is of the view that the
Company is receiving or will receive fair value under them.
60
3. CORPORATE BENEFIT
3.1 In approving the Document{s} and the Transactions, the Board, after
taking into account all relevant factors, is of the view {OPTION 1:
## OPTION 2:
#<(pursuant to an express provision in the constitution of the Company)
that the Company's entry into and performance of the Document[s] and
the Transactions is in the best interests of the Company's holding
company [and as the Company is not a wholly owned subsidiary of the
Company's holding company the prior agreement to the Company's entry
into and performance of the Document{s} and the Transactions has been
obtained from all of the Company's shareholders, other than that
holding company]. >#}
4. SHAREHOLDER RESOLUTIONS
4.1 {IF THE FIRST OPTION FOR PARAGRAPH 4.1 IS INCLUDED, CLAUSE 4.3 MAY BE
DELETED OPTION 1: ##
4.2 OPTION 2: ##}
4.3 {The shareholders of the Company have {unanimously} confirmed, approved
and ratified the resolutions of the Board. {Obviously shareholder
ratification may only be practical in the case of a closely held
company. It is, however, desirable where a corporate benefit issue
arises - for example giving a guarantee, even where the giving of the
guarantee does not involve a major transaction.}
5. }DUE EXECUTION
5.1 {Each of the}{The} Document{s} has been properly signed by the Company.
6. SOLVENCY
6.1 I am not aware of any liquidation proceedings which have been commenced
against the Company by any person, or which are intended or anticipated
by the Company.
6.2 {THE FIRST ALTERNATIVE IS PREFERABLE TO THE SECOND ALTERNATIVE, AS A
CREDITOR HAVING ACCESS TO FINANCIAL INFORMATION IS LIKELY TO BE ABLE TO
FORM ITS OWN OPINIONS AS TO THE MATTERS STATED IN THE SECOND
ALTERNATIVE OPTION 1: ##
6.3 OPTION 2: ##}
7. FINANCIAL ASSISTANCE
7.1 The Transactions do not include or involve any provision by the Company
(directly or indirectly) of financial assistance in connection with the
acquisition of a share issued or to be issued by the Company or its
holding company.
8. CONSTITUTION
8.1 {OPTION 1: ## OPTION 2:
##}
9. AUTHORISATIONS
9.1 {CONSIDER CAREFULLY WHETHER OR NOT EITHER OF THE OPTIONS FOR PARAGRAPH
9 SHOULD BE INCLUDED. THEY SHOULD NOT USUALLY BE INCLUDED OPTION 1:
##
9.2 {OPTION 2: ##}
10. {AUTHORISED SIGNATORIES
10.1 The following are the true signatures of the persons who have been
authorised ({any one of them acting alone/any two of them acting
together}) to give any notices and other communications, and to take
any other action required, under or in connection with the Document{s}
on behalf of the Company.
NAME POSITION SIGNATURE
____________________ _____________________ _______________________
____________________ _____________________ _______________________
____________________ _____________________ _______________________
62
SIGNED by { } in the presence of: _________________________
{ }
___________________________________________
Signature of witness
___________________________________________
Name of witness
___________________________________________
Occupation
___________________________________________
City/town of residence
{SCHEDULE OF DOCUMENTS}
63
SCHEDULE 4
FORM OF ACCESSION AGREEMENT
PARTIES
1. [ ] ("NEW BORROWER")
2. XXXXXXXX CHALLENGE FORESTS LIMITED ("COMPANY")
3. [ ] ("FACILITY AGENT") for itself and on behalf of the other
parties to the Agreement.
AGREEMENT
1. INTERPRETATION
1.1 In this agreement, "AGREEMENT" means the NZ$300,000,000 Senior Secured
Revolving Credit Facilities Agreement dated [ ] February 2003 between
the Company, the banks and financial institutions listed in schedule 1
thereof as Lenders, and Bank of New Zealand as Facility Agent, Security
Agent and Lead Arranger.
1.2 Terms defined in the Agreement have the same meaning in this agreement.
2. ACCESSION
2.1 With effect from the date of this agreement:
(a) the Company designates the New Borrower as a Borrower under
the Agreement; and
(b) the New Borrower agrees to be bound by all the terms and
conditions of the Agreement as if it were a party to the
Agreement with the rights and obligations of a Borrower under
the Agreement.
3. GOVERNING LAW
This agreement will be governed by and construed in accordance with the
laws of New Zealand.
Signed by the authorised representatives of the parties.
NEW BORROWER
[ ]
by:
_____________________________________ _____________________________________
Authorised Signatory Authorised Signatory
COMPANY
Xxxxxxxx Challenge Forests Limited
by:
_____________________________________ _____________________________________
Authorised Signatory Authorised Signatory
64
FACILITY AGENT
[ ]
by:
65
SCHEDULE 5
DRAWDOWN REQUEST FOR AN ADVANCE DENOMINATED IN NZ DOLLARS
TO: Xxxxx 00, XXX Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxxx
Facsimile No: 64 9 375 1285
Attention: Manager - Facility Management Unit - Corporate and
Institutional Banking
NZ$300,000,000 SENIOR SECURED REVOLVING CREDIT FACILITIES AGREEMENT DATED
[ ] FEBRUARY 2003 ("AGREEMENT")
1. Terms defined in the Agreement have the same meaning in this notice.
2. We request you to make us an Advance denominated in NZ Dollars of
NZ$[amount] under the [Three/Five] Year Facility on [Drawdown Date] and
to credit the proceeds of the Advance to our account with [name of bank
and branch] numbered [account number].
3. We select [period(s)] as the duration of the [first] Interest Period in
relation to the Advance[s] and select [date] as the Repayment Date for
the Advance.
4. We confirm that:
(a) the borrowing to be effected is within our powers, has been
validly authorised by appropriate action and will not cause
any limit on our borrowing or other powers (whether imposed by
statute, regulation, agreement or otherwise) to be exceeded;
(b) no Event of Default [or Event of Review(1)] has occurred and
remains unremedied;
(c) the representations and warranties contained in clause 9.1
(other than paragraphs (h), (i), (o), (p) and (q) thereof) of
the Agreement, if repeated on today's date with reference to
the circumstances existing on today's date, would be true and
accurate in all respects; and
(d) there is no subsisting breach of any of the undertakings
contained in clause 10 of the Agreement.
----------
(1) Not required for rollovers of existing Advances.
66
DATED
SIGNED by [ ] in the presence of: _____________________________________
_____________________________________
Signature of witness
_____________________________________
Name of witness
_____________________________________
Occupation
_____________________________________
City/town of residence
67
SCHEDULE 6
DRAWDOWN REQUEST FOR AN ADVANCE DENOMINATED IN US DOLLARS
TO: Xxxxx 00, XXX Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxxx
Facsimile No: 64 9 375 1285
Attention: Manager - Facility Management Unit - Corporate and
Institutional Banking
NZ$300,000,000 SENIOR SECURED REVOLVING CREDIT FACILITIES AGREEMENT DATED
[ ] FEBRUARY 2003 ("AGREEMENT")
1. Terms defined in the Agreement have the same meaning in this notice.
2. We request you to make us an Advance denominated in US Dollars of the
US Dollar Equivalent of NZ$[amount] under the [Three/Five] Year
Facility on [Drawdown Date] and to credit the proceeds of the Advance
to our account with [name of bank and branch] numbered [account
number].
3. We select [period(s)] as the duration of the first Interest Period in
relation to the Advance[s] and select [date] as the Repayment Date for
the Advance.
4. We confirm that:
(a) the borrowing to be effected is within our powers, has been
validly authorised by appropriate action and will not cause
any limit on our borrowing or other powers (whether imposed by
statute, regulation, agreement or otherwise) to be exceeded;
(b) no Event of Default [or Event of Review(2)] has occurred and
remains unremedied;
(c) the representations and warranties contained in clause 9.1
(other than paragraphs (h), (i), (o), (p) and (q) thereof) of
the Agreement, if repeated on today's date with reference to
the circumstances existing on today's date, would be true and
accurate in all respects; and
(d) there is no subsisting breach of any of the undertakings
contained in clause 10 of the Agreement.
----------
(2) Not required for rollovers of existing Advances.
68
DATED
SIGNED by [ ] in the presence of: _____________________________________
_____________________________________
Signature of witness
_____________________________________
Name of witness
_____________________________________
Occupation
_____________________________________
City/town of residence
69
SCHEDULE 7
TRANSFER CERTIFICATE
Transfer Certificate relating to a NZ$300,000,000 Senior Secured Revolving
Credit Facilities Agreement dated [ ] February 2003 between Xxxxxxxx Challenge
Forests Limited as Borrower, the banks and financial institutions named in such
agreement as Lenders, Bank of New Zealand as Facility Agent, Security Agent and
as Lead Arranger ("AGREEMENT").
PARTIES
1. [ ] ("TRANSFEREE") whose address, facsimile number and designated
person are set out below;
2. [ ] ("TRANSFERRING LENDER") being a Lender for the purposes of the
Agreement; and
3. [ ] ("FACILITY AGENT") for itself and on behalf of the other
parties to the Agreement.
IT IS AGREED
1. DEFINITIONS
1.1 Terms defined in the Agreement have the same meaning in this
certificate.
1.2 In this certificate:
"TRANSFERRED RIGHTS AND OBLIGATIONS" means the rights of, and the
obligations to be performed by, the Transferring Lender in its capacity
as a Lender under the Transaction Documents, which rights and
obligations cease under clause 2.1 of this certificate and are to be
assumed by the Transferee.
"TRANSFERRED COMMITMENTS" means [that part of] the Commitments of the
Transferring Lender as shall be assumed by the Transferee hereunder,
namely[specify Commitments to be transferred under each Facility].
"TRANSFER DATE" means the date of countersignature of this certificate
by the Facility Agent.
2. TRANSFER
2.1 The Transferring Lender shall cease to be entitled to its rights and to
be bound by its obligations relating to the Transferred Commitments
with effect from the Transfer Date, but shall remain entitled to those
rights and bound by those obligations which have accrued up to the
Transfer Date.
2.2 With effect from the Transfer Date:
(a) the Transferee and each of the parties to the Agreement shall
assume obligations towards each other and acquire rights
against each other which are identical to the Transferred
Rights and Obligations except in so far as the obligations so
assumed and rights so acquired relate to the identity of or
location of the Transferee and not to the identity of or
location of the Transferring Lender;
70
(b) the Transferee shall be deemed to be a party to the
Transaction Documents, which shall apply as if it were a
Lender, with Commitments equal to the Transferred Commitments;
and
(c) schedule 1 of the Agreement shall be deemed to be amended
accordingly.
3. INDEPENDENT INVESTIGATION
3.1 The Transferee acknowledges that:
(a) it has received a copy of the Agreement together with such
other documents and information as it has required in
connection with this transaction;
(b) it has not relied and shall not in the future rely on the
Transferring Lender or any other party to the Agreement to
check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such
documents or information; and
(c) it has not relied and shall not rely on the Transferring
Lender or any other party to the Agreement to assess or keep
under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of any
Borrower or of any other party to the Transaction Documents.
3.2 The Transferring Lender makes no representation or warranty and assumes
no responsibility with respect to the legality, validity,
effectiveness, adequacy or enforceability of the Transaction Documents
or any document relating thereto and assumes no responsibility for the
financial condition of any Borrower or any other party to the
Transaction Documents or for the performance and observance by any
Borrower or any other such party of any of their respective obligations
under the Transaction Documents or any document relating thereto and
any and all such representations and warranties, and all conditions,
whether express or implied by law or otherwise, are expressly excluded.
4. PAYMENTS
4.1 The Transferring Lender and the Transferee acknowledge and confirm that
they shall make directly between themselves such payments and
adjustments agreed amongst themselves with respect to accrued interest,
costs and other amounts attributable to the Transferred Commitments
prior to the Transfer Date.
5. NOTICES
5.1 The Transferee's initial address, facsimile number and designated
person for notices under the Agreement are as follows:
Address: [ ]
Facsimile No: [ ]
Attention: [ ]
6. REGISTRATION AND PROCESSING FEE
6.1 A registration and processing fee of NZ$1,000 shall be payable by the
Transferring Lender to the Facility Agent on delivery of this
certificate to the Facility Agent.
71
7. GOVERNING LAW
7.1 This certificate shall be governed by and construed in accordance with
the laws of New Zealand.
Signed by the authorised representatives of the parties.
SIGNED by [TRANSFERRING LENDER] in
the presence of: __________________________________
__________________________________
Signature of witness
__________________________________
Name of witness
__________________________________
Occupation
__________________________________
City/town of residence
SIGNED by [TRANSFEREE] in the
presence of: __________________________________
__________________________________
Signature of witness
__________________________________
Name of witness
__________________________________
Occupation
__________________________________
City/town of residence
72
Countersigned by the Facility Agent for itself and on behalf of the other
parties to the Agreement (but without any responsibility or liability except as
expressly provided in clause 20.4 of the Agreement).
SIGNED by [-] in the presence of: __________________________________
__________________________________
Signature of witness
__________________________________
Name of witness
__________________________________
Occupation
__________________________________
City/town of residence
DATED
73
SCHEDULE 8
FORM OF COMPLIANCE CERTIFICATE
(Clause 10.1(a)((iv))
TO: The Lenders under a NZ$300,000,000 Senior Secured Revolving Credit
Facilities Agreement dated [ ] February 2003 between Xxxxxxxx Challenge
Forests Limited, the banks and financial institutions named in such agreement as
Lenders, Bank of New Zealand as Facility Agent, Security Agent and Lead Arranger
("AGREEMENT").
This certificate is given to you pursuant to clause 10.1(a)(iv) of the
Agreement. All terms used in this certificate which are defined in the Agreement
have the same meanings in this certificate.
We certify as at [ ] (the "REPORTING DATE") that to the
best of our knowledge and belief, having made due enquiry:
1. The Gearing Ratio for the Group is [ ] times, which is less than
[3.50/3.25] times.
2. The ratio of Free Cash Flow to Interest Expense for the Group is
[ ] times, which is greater than 2.75 times.
3. The percentage of Net Debt to Total Tangible Assets of the Group is
[ ]%, which is less than 30%.
4. The Minimum Net Tangible Assets of the Group are NZ$[ ]
, which is greater than NZ$800,000,000.
5. Total Tangible Assets (disregarding any investments in Subsidiaries and
inter-company loans) of the Obligors are NZ$[ ], which is not less than
95% of Total Tangible Assets of the Group.
DATED
___________________________________________
Signature of director
___________________________________________
Name of director
