1
EXHIBIT 10.32
GUARANTEE AGREEMENT (C)
concluded by
UG1 Corporation, 000 Xxxxx Xxxxx Xxxx, Xxxx xx Xxxxxxx, XX 00000, XXX, fax
number 000-000-000-0000 ("UGI") as guarantor
and
Raiffeisen Zentralbank Osterreich Aktiengesellschaft, Am Xxxxxxxxx 0, 0000
Xxxxxx, Xxxxxxx, fax number xx00-0-00000-0000 ("RZB") as beneficiary.
WHEREAS FLAGA Beteiligungs Aktiengesellschaft, Xx xxx Xxxxxxxxxxxx 0, 0000
Xxxxxxxxxx, Xxxxxxx (the "Borrower"), intends to extend to RZB on 21 September
1999 a written offer (the. "Offer") to conclude a Loan Agreement (C) in the
amount of EURO 15,000,000.00 (the "Loan Agreement') as attached to this
Guarantee Agreement as Annex 1;
WHEREAS the Offer has not been extended, and the Loan Agreement has not been
concluded to date;
WHEREAS the Offer provides that UGI guarantees the payment of all amounts
payable by the Borrower under or in connection with the Loan Agreement when due;
WHEREAS UGI is willing to issue, and RZB is willing to accept such guarantee
subject to the terms of this Guarantee Agreement,
NOW, THEREFORE, it is hereby agreed as follows:
1. UGI hereby confirms that it has taken notice of all terms of the Offer.
2. UGI hereby irrevocably agrees that the Loan Agreement be concluded in
accordance with the terms of the Offer.
3. As a guarantor according to Section 1357 of the Austrian Civil Code ("Xxxxx
und Xxxxxx" gemass Section 1357 ABGB), UGI hereby irrevocably guarantees in
favor of RZB that the Borrower will duly fulfill all its present and future
obligations under or in connection with the Loan Agreement including, without
limitation, all obligations to repay principal, to pay interest and fees and,
further, all payment obligations to RZB in the event that the Loan Agreement
or any part thereof is or becomes invalid for any reason whatsoever
(collectively the "Secured Obligations"). Whenever RZB does not receive full
payment in respect of any of the Secured Obligations when due, UGI shall make
such payment(s) under this Guarantee Agreement within 15 (fifteen) calendar
days from receipt of a respective payment request by RZB. Such payment
request shall be in writing and shall be delivered by registered mail, by
2
express mail service or by personal delivery to the address of UGI (to the
attention of the Corporate Secretary) given in this Guarantee Agreement or at
such other address UGI may have notified to RZB in writing. Each payment
request sent by registered mail or by express mail service shall be deemed
duly received by UGI on the fifth calendar day after the date of its dispatch
by RZB, provided that RZB has, on the day of such dispatch, either dispatched
by registered mail or by express mail service, or delivered by personal
delivery, a copy of the same payment request to the lawfirm Bruckhaus
Xxxxxxxx Xxxxxx Xxxxx in Vienna, Austria, to the attention of DDr. Xxxxx
Xxxx or Xx. Xxxx Xxxxx.
4. In addition, UGI hereby irrevocably covenants, undertakes and, further,
guarantees in favor of RZB according to Section 880a second case of the
Austrian Civil Code ("Erfolgsgarantie" xxxx(ss) Section 880a zweiter Fall
ABGB) as follows:
As at the date of the signing of this Guarantee Agreement, the rating by
Standard & Poor's and Moody's mentioned in clause 4.(k) is A- (A minus) in
respect of Standard & Poor's and A3 in respect of Moody's (hereinafter referred
to as "A minus" rating).
From the signing of this Guarantee Agreement until the date an which the Loan
Agreement is terminated and RZB has duly received payment in respect of all
Secured Obligations,
(a) UGI is a corporation duly organized and validly existing under the laws of
any State of the USA; and
(b) UGI has corporate power to enter into this Guarantee Agreement and to
perform its obligations hereunder, and all necessary actions required to
authorize its execution of this Agreement and its performance of its
obligations hereunder have been duly taken; and
(c) no government or other consents or exemptions are required to be obtained
by UGI with respect to this Guarantee Agreement in order to give it
validity, priority or make it enforceable or, if any such consents or
exemptions are required to be obtained in order to give it validity,
priority or make it enforceable, they have been or will be obtained in a
timely manner, and such consents or exemptions are or will be in full
force and effect, and all terms and conditions of any such consents or
exemptions are and will be fully complied with in order to give it
validity, priority or make it enforceable; and
(d) in order to give it validity, priority or make it enforceable, (x) this
Guarantee Agreement is not required to be registered by, or sent to, any
court or other authority, and (xx) no registration dues, taxes or similar
charges are required to be paid in relation to this Guarantee Agreement;
and
(e) UGI's obligations under this Guarantee Agreement are legal, valid and
binding and enforceable in accordance with their terms; such obligations
will rank at least pari passu with all its other obligations, except
obligations to creditors having preference as a matter of mandatory law;
and
-2-
3
(f) UGI's execution and delivery of this Guarantee Agreement and the exercise
of its rights and performance of its obligations hereunder do not:
(x) conflict with any agreement or obligation to which UGI is a party or
which is binding upon it or any of its assets; or
(xx) conflict with UGI's constitutive documents and internal rules and
regulations; or
(xxx) conflict with any law, regulation, judicial order or the like;
to an extent or in a manner having a material adverse effect on UGI; and
(g) UGI is not in breach or in default under any agreement to which it is a
party or which is binding on it (or any of its assets) to an extent or in
a manner which might have a material adverse effect on it; and
(h) to the best of UGI's knowledge, all information supplied by UGI to RZB in
connection with this Guarantee Agreement and the Loan Agreement is true,
complete and accurate in all material respects (this provision, however,
does not apply in respect of financial or other projections provided to
RZB); and
(i) UGI Utilities, Inc., a company duly organized and validly existing under
laws of Pennsylvania, USA ("Utilities") is a company duly organized and
validly existing under the laws of any State of the USA; and
(j) Utilities is a company fully and directly owned and controlled by UGI; and
(k) Utilities has and continues to have a rating by two rating agencies,
namely Standard & Poor's and Moody's or, in the event that Standard &
Poor's and/or Moody's no longer exist, any equivalent rating agency or
rating agencies; and
(l) in the event that both Standard & Poor's and Moody's (or, if Standard &
Poor's and/or Moody's no longer exist, other rating agency or rating
agencies according to clause 4.(k)) decrease the rating of Utilities below
A- (A minus), UGI shall grant RZB an additional security for the Secured
Obligations either in form of a pledge over a cash deposit held with RZB
in the amount of USD 20 million (United States Dollar twenty million) or
in form of a letter of credit (abstract bank guarantee under Austrian law)
in the amount of USD 20 million (United States Dollar twentymillion)
issued by a bank with a rating of at least A- (A minus); such pledge over
a cash deposit shall be established in a legal, valid and binding manner
within one month, and such letter of credit shall be issued in a legal,
valid and binding manner within 45 calendar days, from the day on which
UGI is informed about such decrease of rating. In the event additional
security is granted as set forth in this clause 4.(1), UGI is deemed to be
in compliance with this clause 4.(1). In addition, if any of the
aforementioned agencies thereafter increases the rating of Utilities to at
least A- (A minus), RZB shall be obligated to release the additional
security as obtained under clause 4.(l), and UGI shall be deemed to be in
compliance with this clause 4.(1); this clause 4.(1) cannot result in RZB
receiving an additional security in excess of USD 20 million under
Guarantee Agreements (A), (B) and (C) collectively; and (m)the Borrower is
a company duly organized and validly existing under the laws of Austria
with its corporate seat and headquarters in Austria; and
-3-
4
(n) the Borrower is a company fully owned and controlled, either directly or
indirectly, by UGI; and
(o) the Borrower is not insolvent in terms of the Austrian Insolvency Codes
(Ausgleichs- und Konkursordnung) until and including 31 December 2000; and
(p) UGI shall deliver to RZB copies of its audited accounts within six months
after the end of the financial period for which they have been prepared;
in addition, UGI shall deliver to RZB quarterly reports on its financial
situation and the current rating of Utilities; and
(q) UGI shall immediately inform RZB in writing about any decrease of the
rating of Utilities by Standard & Poor's or Moody's or any other rating
agency.
5. All payments made or to be made by UGI under this Guarantee Agreement
shall be effected in the same currency, in which the respective Secured
Obligations are denominated, by transfer to any account indicated in the
respective payment request of RZB free from and clear of, and without any
deduction for or on account of any present or future taxes, imposts,
levies, duties, charges, fees, withholdings or other deductions of any
kind or nature whatsoever. Should any payments by UGI under this Guarantee
Agreement be subject to any deductions whatsoever, UGI shall pay
additional amounts equal to all amounts deducted with the effect that RZB
receives all amounts it would have received if no deductions were made.
6. If, as a result of a payment made by UGI under clause 5., RZB will receive
or be granted a credit against or remission for or deduction or relief
from or in respect of any tax payable by it, which is both identifiable
and quantifiable by RZB without requiring it to expend a material amount
of time or incur a material cost in so identifying or quantifying (any of
the foregoing, to the extent so identifiable and quantifiable, being
referred to as a "Saving"), RZS shall, to the extent it can do so without
prejudice to the retention of the relevant Saving and subject to UGI's
obligation to repay promptly on demand by RZB the amount to RZB if the
relevant Saving is subsequently disallowed or cancelled, reimburse UGI
promptly after receipt of such Saving by RZB with such amount.
7. Any costs and expenses, taxes and duties arising in connection with this
Guarantee Agreement -including, without limitation, any duties under the
Austrian Duties Act (oGebG) - shall in any event be borne and paid by UGI.
8. This Guarantee Agreement shall immediately enter into full force and
effect. It shall expire when the Loan Agreement is terminated and all
Secured Obligations are duly fulfilled.
9. UGI shall not acquire any rights or claims in connection with the Loan
Agreement, nor shall UGI claim or accept payment or security in respect of
its obligations arising from, or any payment(s) made under this Guarantee
Agreement, until the Loan Agreement is terminated and RZB has duly
received payment in respect of all Secured Obligations.
-4-
5
10. As regards the rights of RZB under clause 12.1 of the Loan Agreement
(collectively the "Rights"), the following shall apply:
(a) Subject to the provisions in clause 10.(b) and 10.(c), RZB shall not
exercise the Rights, provided that and as long as UGI duly complies with
the provisions of this Guarantee Agreement. Under the terms of this
Guarantee Agreement, UGI is deemed to duly comply with the provisions of
this Guarantee Agreement, provided that UGI duly fulfills all present and
future payment or other obligations under this Guarantee Agreement, and
provided further that everything guaranteed by UGI pursuant to clause 4 is
and remains true and correct.
(b) In the event that both Standard & Poor's and Moody's (or, if Standard &
Poor's and/or Moody's no longer exist, other rating agency or rating
agencies according to clause 4.(k)) decrease the rating of Utilities by
one notch from A- (A minus) to BBB+ (triple B plus) in respect of Standard
& Poor's and Baa l in respect of Moody's (hereinafter referred to as
"BBB+" rating), and RZB does not receive an additional security according
to clause 4.(1), RZB shall be entitled to exercise the Rights even if UGI
duly complies with the provisions of this Guarantee Agreement. For the
purpose of clarification, in the event defined in the first sentence of
this clause 10.(b), and subject to clause 10.(c), RZB shall not be
entitled to exercise the Rights, if it has received additional securities
in accordance with clause 4.(l) and UGI duly complies with all other
provisions of this Guarantee Agreement, in which event the Borrower shall
no longer be in default under clause 12.1(e) or clause 12.3 of the Loan
Agreement. In addition, if any of the aforementioned agencies thereafter
increases the rating of Utilities to at least A- (A minus), RZB shall be
obligated to release the additional security as obtained under clause
4.(l) without delay, and the Borrower shall no longer be in default under
clause 12.1 (e) or clause 12.3 of the Loan Agreement.
(c) In the event that both Standard & Poor's and Moody's (or, if Standard &
Poor's and/or Moody's no longer exist, other rating agency or rating
agencies according to clause 4(k)) decrease the rating of Utilities below
BBB+ (triple B plus), RZB shall be entitled to exercise the Rights even if
RZB receives an additional security according to clause 4.(1) and/or UGI
duly complies with all other provisions of this Guarantee Agreement.
11. Upon request of UGI, the parties hereto shall enter into negotiations for
a reduction of the amounts secured under this Guarantee Agreement and/or
for the elimination of the requirement of a minimum rating of Utilities,
subject to the amounts outstanding under the Loan Agreement, the overall
credit standing of the Borrower and the equity ratio of the Borrower.
12. This Guarantee Agreement is governed by and construed in accordance with
the substantive law of Austria.
13. Should any disputes arise in connection with this Guarantee Agreement
(hereinafter referred to as the "Disputes") - including, without
limitation, Disputes regarding the existence or validity of this Guarantee
Agreement or any part hereof, and Disputes arising in the event
-5-
6
that this Guarantee Agreement or any part hereof is or becomes inexistent
or invalid - the following shall apply:
13.1. All Disputes shall be finally settled under the Rules of Arbitration
and Conciliation of the International Arbitral Centre of the
Austrian Federal Economic Chamber (Vienna Rules) by one or more
arbitrators appointed in accordance with such Rules. The proceeding
shall take place, and the arbitral award shall be rendered in
Vienna, Austria. The language of arbitration shall be English.
13.2. Notwithstanding the arbitration clause in clause 13.1., RZB shall
also be entitled to instigate any legal proceedings regarding
Disputes in the Commercial Court of Vienna, Austria (Handelsgericht
Wien), or in any other court - in Austria, in the United States of
America or in any third country - that has or may have or accepts
jurisdiction (either by virtue of any law or legal regulation, or by
virtue of any agreement, or on any other grounds).
13.3. In any arbitral or court proceeding, the substantive law of Austria
shall be applicable.
14. This Guarantee Agreement has been executed, concluded and delivered on 21
September 1999 in Bratislava, Slovakia.
------------------------ ------------------------------------------
UGI Corporation Raiffeisen Zentralbank Osterrich
Aktiengesellshaft
1 Annex (form of Offer)
-6-
