Exhibit 10.87
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LOAN AGREEMENT
Dated as of November 3, 2003
Between
Scandinavian Energy Finance Ltd
as Company
and
EIC Electricity SA
as Lender
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TABLE OF CONTENTS
Page
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SECTION 1 DEFINITIONS AND INTERPRETATION ......................................1
SECTION 2 THE LOAN FACILITY ...................................................3
SECTION 3 AVAILABILITY OF THE LOAN FACILITY ...................................3
SECTION 4 INTEREST ............................................................4
SECTION 5 REPAYMENT ...........................................................4
SECTION 6 PAYMENTS BY THE COMPANY .............................................4
SECTION 7 REPRESENTATIONS AND WARRANTIES ......................................5
SECTION 8 COVENANTS ...........................................................5
SECTION 9 EVENTS OF DEFAULT ...................................................6
SECTION 10 NOTICES ............................................................8
SECTION 11 ASSIGNMENTS AND TRANSFERS ..........................................9
SECTION 12 CONFIDENTIALITY ....................................................9
SECTION 13 GOVERNING LAW .....................................................10
SECTION 14 MISCELLANEOUS .....................................................10
(i)
EXHIBITS
Exhibit 1 Form of Drawdown Notice and Receipt
(ii)
This LOAN AGREEMENT (this "Loan Agreement"), dated as of Nov. 3,
2003 is entered into between Scandinavian Energy Finance Ltd., a limited
liability company with its head office at AIB International Centre IFSC Xxxxxx
0, Xxxxxxx (the "Company") and EIC Electricity SA, a cooperation with its head
office at 62, route de Frontenex, 1211 Xxxxxx 0, Xxxxxxxxxxx ("EIC" or the
"Lender") (each, a "Party" and collectively, the "Parties").
RECITALS
WHEREAS, the Company is jointly owned by Endoray Investments B.V.
("Endoray"), a wholly owned subsidiary of US Energy Systems Inc. ("USE"), USE
and EIC Electricity SA.
WHEREAS, Endoray, USE and EIC have entered into a certain
Shareholders' Agreement, dated March 11, 2002 subsequently amended on February
19, 2003 and on October 1, 2003 (the "Shareholders' Agreement").
WHEREAS, on August 20, 2003, USE and the Company entered into a Loan
Agreement for the provision of a loan by USE to the Company of SEK 10'200'000.--
and on August 20, 2003, EIC and the Company entered into a Loan Agreement for
the provision of a loan by EIC to the Company of SEK 9'800'000.-- (together: the
"Shareholder Loan Agreements").
WHEREAS, in order for the Company to increase its funding to
EnergiSystem Sverige AB ("ESS") and fund costs associated with its operation,
the Lender is prepared to make a loan to the Company in accordance with the
terns set out herein;
NOW, THEREFORE, in consideration of the agreements set forth in this
Loan Agreement, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Parties agree as follows:
SECTION 1
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. Unless otherwise defined herein, all
capitalized terms, when used herein or in any Exhibit, shall have the following
meanings:
"Advance" means a disbursement made or to be made by the Lender
hereunder.
"Availability Period" has the meaning set forth in Section 3.1,
"Available Commitment" means, at any time and save as otherwise
provided herein: the Loan Facility, the aggregate amount, which the Lender has
advanced at such time.
"Business Day" means every day of the week except for (i) Saturdays
and Sundays and (ii) bank holidays in Sweden.
"Company" has the meaning set forth in the introductory paragraph
hereto.
"Drawdown Notice" means a notice sent by the Company requesting an
Advance, such notice being substantially in the form attached hereto as Exhibit
1.
"EIC" has the meaning set forth in the introductory paragraph
hereto.
"Endoray" has the meaning set forth in the recitals hereto.
"Event of Default" means each of the events described as such in
Section 9.1.
"Interest Period" means the 3-month period between two immediately
succeeding Interest Payment Dates.
"Interest Payment Date" means with respect to a calendar quarter
March 1, June 1, September 1, December 1, provided, however, that (i) if any
Interest Payment Date would fall on a day which is not a Business Day, such
Interest Payment Date shall be changed to the next succeeding Business Day and
(ii) the first Interest Payment Date shall be December 1, 2003.
"Lender" has the meaning set forth in the introductory paragraph
hereto.
"Loan Agreement" has the meaning set forth in the introductory
paragraph hereto.
"Loan Facility" has the meaning set forth in Section 2.1.
"Outstanding Principal Balance" means at any time the sum of (i) the
aggregate principal amount of Advances extended by the Lender and (ii) the
accrued interest capitalized as set forth in Section 4.3. less the aggregate
repayments as set forth in Section 5.
"Party" and "Parties" has the meaning set forth in the introductory
paragraph hereto.
"Reference Rate" means the 3 months XXXXXX rate as set for the
respective Interest Period on the first Business Day of such Interest Period.
"Shareholders' Agreement" has the meaning set forth in the recitals
hereto.
"Shareholder Loan Agreements" has the meaning set forth in the
recitals hereto.
"SEK" means the lawful currency of Sweden.
"USE" has the meaning set forth in the recitals hereto.
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Section 1.2 Interpretation. In this Loan Agreement:
(a) headings to Sections are given for convenience only and shall
not affect interpretation hereof;
(b) words expressed in the singular number shall include the plural
and vice versa; and the word "person" shall include corporate entities,
unincorporated associations and partnerships; and
(c) the Exhibit to this Loan Agreement shall be an integral part
hereof.
SECTION 2
THE LOAN FACILITY
Section 2.1 Grant of the Loan Facility. The Lender grants to the
Company, upon the terms and subject to the conditions hereof, a loan in an
aggregate maximum amount of SEK 16'000'000.-- (the "Loan Facility").
Section 2.2 Purposes and Application. The Loan Facility is intended
to finance additional funding to ESS AB and/or its subsidiaries to be provided
by the Company in the form of additional loans and to fund costs associated with
the Company's operations. Accordingly, the Company shall apply all amounts
borrowed by it hereunder exclusively in or towards satisfaction of such
purposes.
SECTION 3
AVAILABILITY OF THE LOAN FACILITY
Section 3.1 Availability Period. The Availability Period is the
period during which the Company has the right to request Advances from the
Lender. The Availability Period commences on Nov. 3, 2003 and ends on December
31, 2003. The Available Commitment shall automatically be cancelled at the end
of the Availability Period.
Section 3.2 Conditions Precedent for all Drawdowns. Except to the
extent the Lender shall have waived such conditions, the Lender shall only be
obliged to make an Advance to the Company if
(a) the Lender has received a drawdown notice substantially in the
form of Exhibit 1.
(b) the proposed date for the making of such Advance is a Business
Day falling prior to December 31, 2003;
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(c) the proposed amount of such Advance is less than or equal to
the Available Commitment.
SECTION 4
INTEREST
Section 4.1 Calculation of Interest. Interest on any Outstanding
Principal Balance for any Interest Period is calculated on the basis of the
actual number of days on which interest has accrued and a 365-day year applying
the interest rate determined in accordance with Section 4.2.
Section 4.2 Interest Rate. The Interest Rate per annum is equal to
the Reference Rate plus a credit margin of 2OObp.
Section 4.3 Payment of Interest. Interest shall accrue on the
Outstanding Principal Balance on a quarterly basis and become payable upon the
Company's Board decision taking into account the Distribution Priorities as
defined in the Shareholders' Agreement.
SECTION 5
REPAYMENT
The Company's Board will decide on repayment upon availability of
sufficient cash flow taking into account the Distribution Priorities as defined
in the Shareholders' Agreement.
SECTION 6
PAYMENTS BY THE COMPANY
Section 6.1 General. Payments by the Company hereunder to the Lender
shall be made in SEK, for value on the due date, at such bank or banks, during
business hours and in such place or places, for the account of the Lender, as
the Lender shall from time to time designate.
Section 6.2 No Set-Off. All payments required to be made by the
Company hereunder shall be calculated without reference to any set-off or
counterclaim and shall be made free and clear of and without any deduction for
or on account of any set-off or counterclaim.
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Section 6.3 Currency of Account and Payment. The SEK is the currency
of account and payment for each and every sum at any time due from the Company
hereunder.
SECTION 7
REPRESENTATIONS AND WARRANTIES
Section 7.1 Representations and Warranties. The Company hereby makes
the representations and warranties set out in paragraphs (a) to (c) of this
Section 7.1 as of the date hereof, on each date on which an Advance is made and
on each Interest Payment Date.
(a) Status. The Company is a limited liability company duly
organized and existing under the laws of Ireland.
(b) Due authorization. The Company has power to enter into this
Loan Agreement and to exercise its rights and perform its
obligations hereunder and all corporate and other action
required to authorize its execution of this Loan Agreement has
been duly taken.
(c) Binding obligations. The obligations expressed to be assumed
by the Company in this Loan Agreement are legal and valid
obligations binding on it in accordance with the terms hereof
and thereof.
Section 7.2 Reliance. The Company hereby acknowledges that the
Lender is entering into this Loan Agreement in reliance on the representations
and warranties contained in Section 7.1 above.
Section 7.3 Governmental Authorizations. The Company hereby
acknowledges that all authorizations and other actions by or with any
governmental authority necessary to authorize the borrowings hereunder or
required for the validity of enforceability against the Company of this Loan
Agreement, have been obtained or performed and are valid and existing in full
force.
SECTION 8
COVENANTS
(a) Direct Communications with Auditors. The Company shall
authorise its auditors (whose fees and expenses shall be for
the account of the Company) to communicate directly with the
Lender at any time regarding the Company's accounts and
operations, and furnish to the Lender a copy of such
authorisation.
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(b) Representations and Warranties. The Company shall, before the
making of any Advance requested therein, notify the Lender of
the occurrence of any event, which results in or may
reasonably be expected to result in any of the representations
and warranties contained in Section 7 being untrue at or
before the time of the making of such Advance.
(c) Events of Default. The Company shall promptly inform the
Lender of the occurrence of any Event of Default of which it
is aware (having made all due inquiries) and, upon receipt of
a written request to that effect from the Lender, confirm to
the Lender that, save as previously notified to the Lender or
as notified in such confirmation, no Event of Default has
occurred.
(d) Ranking with Other Creditors. The Company shall ensure that at
all times the claims of the Lender against it under this Loan
Agreement rank senior to the claims of USE and EIC under the
Shareholder Loan Agreements.
(e) Litigation. The Company shall promptly notify the Lender of
the details of any litigation, arbitration or administrative
proceeding issued, pending or (to the best of the Company's
knowledge and belief) threatened against the Company.
SECTION 9
EVENTS OF DEFAULT
Section 9.1 Events of Default. Each of the following, unless
expressly waived in writing by the Lender, is an Event of Default:
(a) Non-payment. Default shall have occurred in the payment of any
principal of, or interest on, the Loan and such default shall
have continued for a period of five days.
(b) Representations and Warranties. Any representation or warranty
confirmed or made in or pursuant to Section 7.1 or in
connection with any request for Advances under this Loan
Agreement shall be found to have been incorrect in any
material respect.
(c) Insolvency and Rescheduling. The Company shall have requested
a moratorium or suspension of payment of debts from any court,
or instituted proceedings or taken action to be liquidated or
adjudicated bankrupt or insolvent, or consented to the
institution of bankruptcy or insolvency proceedings against
it, or filed a petition or answer or consent seeking a
concordat or other form of composition with its creditors or
reorganisation or relief under any applicable law, or
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consented to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or of
any substantial part of its property or other assets, or made
an assignment for the benefit of creditors, or admitted in
writing its inability to pay its debts generally as they
become due.
(d) Winding-Up. The Company takes any corporate action for its
winding-up, dissolution, administration or re-organisation or
for the appointment of a liquidator, receiver, administrator,
administrative receiver, custodian, trustee or similar officer
of it or of any substantial part of its revenues and assets or
there shall have been entered against the Company a decree or
order by a court for any of the above or any petition is filed
by any person seeking any of the above and is not dismissed
within 30 days.
(e) Execution or Distress. Any execution or distress is levied
against, or an encumbrancer takes possession of, the whole or
any substantial part of, the property, undertaking or assets
of the Company.
(f) Analogous Events. Any event happens which under the laws of
any jurisdiction has a similar or analogous effect to any of
those events mentioned in paragraphs (c), (d) or (e) above.
(g) Licences and Approvals. Any license, approval or consent
necessary for the carrying out of the Company's business and
operations generally or for the performance by the Company of
its obligations under this Loan Agreement is not obtained when
required or otherwise ceases to be in full force and effect
and such license, approval or consent is not restored within
30 days after the Lender has given notice thereof to the
Company.
(h) Invalidity of this Loan Agreement. Any provision of this Loan
Agreement is or becomes invalid, illegal or unenforceable, and
such provision has not been replaced by alternative provisions
satisfactory to the Lender within a period of 30 days after
the Lender has given notice thereof to the Company.
(i) Governmental Intervention. By or under the authority of any
government:
(i) the management of the Company is wholly or partially
displaced or the authority of the Company in the conduct
of its business is wholly or partially curtailed; or
(ii) all or a majority of the issued shares of the Company or
the whole or any substantial part of its revenues or
assets are seized, nationalized, expropriated or
compulsorily acquired.
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Section 9.2 Acceleration and Cancellation. Subject to Section 9.3,
if one or more of Events of Default shall have happened and be continuing, then
the Lender may, by written notice to the Company:
(a) declare the Outstanding Principal Balance to be immediately
due and payable (whereupon the same shall become so payable
together with accrued interest thereon and any other sums then
owed by the Company hereunder); and/or
(b) declare that any undrawn portion of the Facility shall be
cancelled, whereupon the same shall be cancelled and the
Available Commitment of the Lender shall be reduced to zero,
Section 9.3 Automatic Acceleration. Notwithstanding Section 9.2
above or any other provision of this Loan Agreement, if (i) the Company shall
have become voluntarily or involuntarily dissolved, or become bankrupt (however
such bankruptcy may be evidenced) or (ii) if substantially all of the assets of
the Company and/or ESS and its direct and indirect subsidiaries are sold:
(a) the Outstanding Principal Balance shall forthwith become
immediately due and payable together with accrued interest
thereon and any other sums then owed by the Company hereunder
to the fullest extent permitted by law; and
(b) any undrawn portion of the Loan Facility shall forthwith be
cancelled and the Available Commitment of the Lender shall be
reduced to zero,
without any presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived by the Company.
SECTION 10
NOTICES
Section 10.1 Addresses. Any notice or correspondence to be sent
hereunder shall be sent in the English language and be either (i) delivered
personally, (ii) sent by registered mail or (iii) sent by fax. The addresses for
service of notice shall be the following or such other address as one Party may
notify to the other in accordance with this Section 10:
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To the Lender: EIC Electricity SA
Address: 62, Route de Xxxxxxxxx
X.X. Xxx 0000
0000 Xxxxxx 0
Xxxxxxxxxxx
Attention: President
To the Company: Scandinavian Energy Finance Ltd.
Address: AIB Xxxxxxxxxxxxx Xxxxxx, XXXX
Xxxxxx 0, Xxxxxxx
Attention: The Company Secretary
Section 10.2 Timing of Notices. A notice given as herein provided
shall:
(a) if delivered by hand or sent by fax, be deemed to have been
received on the day of receipt or, if sent outside 8:30 a.m.
to 6:30 p.m. on any Business Day, at 8:30 a.m. on the next
Business Day; and
(b) if sent by registered mail, be deemed to have been received 10
Business Days after the mailing thereof.
SECTION 11
ASSIGNMENTS AND TRANSFERS
Section 11.1 By the Company. The Company shall not be entitled to
assign or transfer all or any of its rights, benefits or obligations hereunder.
Section 11.2 By the Lender. The Lender shall be entitled to assign
or transfer all or any of its rights, benefits or obligations hereunder to any
of its subsidiaries or affiliated companies.
SECTION 12
CONFIDENTIALITY
The Company shall not disclose any information about this Loan
Agreement without Lender's prior written consent which shall not be unreasonably
withheld or delayed. The Lender shall have the right to disclose any information
about this Loan Agreement to any
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potential transferee of its shares in the Company and to any financial
institution, to its auditors and as required by law.
SECTION 13
GOVERNING LAW
The construction, validity and performance of this Loan Agreement
shall in all respects be governed by the laws of Ireland. The venue is the court
of Dublin.
SECTION 14
MISCELLANEOUS
Section 14.1 Entire Agreement. This Loan Agreement, including the
exhibits hereto, constitutes the entire agreement between the Parties in
relation to the subject matter hereof and supersedes any or all previous
agreements or arrangements, whether oral or written, between the Parties.
Section 14.2 Amendments. No amendment to this Loan Agreement shall
be valid unless it is in writing and signed by a duly authorized representative
of each Party.
Section 14.3 Waiver. The failure with or without intent of any Party
to insist upon the performance by any other Party of any term or provision of
this Loan Agreement in strict conformity with the literal requirements hereof
shall not be treated or deemed to constitute a modification of any term or
provision hereof, nor shall such failure or election be deemed to constitute a
waiver of the right of such Party at any time whatsoever thereafter to insist
upon performance by the other, strictly in accordance with any term or provision
hereof. All terms, conditions and obligations under this Loan Agreement shall
remain in full force and effect at all times during the term of this Loan
Agreement, except as otherwise changed or modified by any mutual written
agreement of the Parties.
Section 14.4 Severability. Should any provision of this Loan
Agreement be declared invalid or unenforceable by any court of competent
jurisdiction or any other entity empowered to do so, the remainder of this Loan
Agreement shall be valid and enforceable to the fullest extent permitted by
applicable law.
Section 14.5 Language. This Loan Agreement is written in English and
English is the binding language of this document.
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IN WITNESS WHEREOF, the Parties have executed this Loan Agreement by
their duly authorised representatives as of the day and year first above
written.
Scandinavian Energy Finance Ltd.
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: FOR AND ON BEHALF OF
AIB INTERNATIONAL FINANCIAL
SERVICES LTD.
AS SECRETARY
EIC Electricity SA
By: /s/ Marcel Bruchwiler
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Name: Marcel Bruchwiler
Title: Director
By: /s/ Xxxxxxxxx Xxxxxxxx
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Name: Xxxxxxxxx Xxxxxxxx
Title: Director
WITNESS:
US Energy Systems Inc.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: CEO
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: UP+GC.
EXHIBIT 1
Form of Drawdown Notice
[LETTERHEAD OF THE COMPANY]
[Date]
EIC Electricity SA
[address]
Ladies and Gentlemen:
Drawdown Notice No. (1)
1. Please refer to (i) the Loan Agreement dated [date], 2003, by and among
Scandinavian Energy Finance Ltd. (the "Company") and EIC Electricity SA
("EIC") ("the Loan Agreement") All terms used but not defined herein are
used as defined in the Loan Agreements.
2. The Company hereby requests an Advance from EIC, on or before [date], of
the amount of (i) [SEK ] in accordance with the provisions of Section
3 of the Loan Agreement. You are requested to pay such respective amount
in accordance with the Company's instructions [Account Name and Number:
Wiring Instructions].
3. Attached hereto as Appendix I is a signed but undated receipt for the
amount hereby requested to be advanced to the Company and the Company
hereby authorizes EIC to date such receipt as of the date of the actual
advance by EIC of the funds hereby requested to be advanced.
4. The Company hereby certifies as follows:
(a) no Event of Default has occurred and is continuing in respect of
which the Lender has not given a written waiver.
(b) The Company is in full compliance with all covenants as outlined in
Section 8 of the Loan Agreement.
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(1) Requests shall be numbered in series.
The above certifications are effective as of the date of this Drawdown Notice
and will continue to be effective as of the date of the Advance hereby
requested. If any of these certifications is no longer valid as of or prior to
the date of Advance hereby requested, the Company will immediately notify the
Lender and will repay the amount advanced upon demand by the Lender if the
Advance is made prior to the receipt of such notice.
Very truly yours,
By: Scandinavian Energy Finance Ltd.
[Name of authorized persons signing for the Company]
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Appendix I
Page 1 of 1
Form of Loan Drawdown Receipt
[LETTERHEAD OF THE COMPANY]
[Date](2)
[LENDER]
[address]
Ladies and Gentlemen:
Drawdown Receipt No.(3)
We, Scandinavian Energy Finance Ltd. hereby acknowledge receipt of the sum
of [__________] advanced to us by you pursuant to the Loan Agreement dated
[__________], 2003 between ourselves and you.
Yours faithfully,
Scandinavian Energy Finance Ltd.
By:
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Authorized Representative
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(2) To be dated by Lender as of the date of advance of relevant funds.
(3) Each receipt must be numbered in series, the number corresponding to the
number in the heading of the relevant drawdown notice.
SCANDINAVIAN ENERGY FINANCE LTD
Appendix 1
November 14, 2003
EIC Electricity SA
x/x XXX Xxxxxxxx XX
Xxxxxxx-Xxxxx Xxx. 00
0000 Xxxxxxxxxx / Xxxxxxxxxxx
Ladies and Gentlemen:
Drawdown Receipt No. 1
We, Scandinavian Energy Finance Ltd. hereby acknowledge receipt of the sum
of SEK 12'000'000 advanced to us by you pursuant to the Loan Agreement dated
November 3, 2003 between ourselves and you.
Yours faithfully,
Scandinavian Energy Finance Lid.
By:
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Authorized Representative
