1
Anlage 24
Englische Ubersetzung des Kreditvertrages
und der Annexe 1, 2, 3, 13, 14, 15, 16, 18 und 20
NON-BINDING ENGLISH TRANSLATION
L O A N A G R E E M E N T
in the amount of
DM 508,000,000
between
ZELLSTOFF- UND PAPIERFABRIK ROSENTHAL GMBH & Co KG,
Blankenstein
(hereinafter called the "Borrower")
on the one hand
and
BAYERISCHE HYPOTHEKEN- UND WECHSEL-BANK AKTIENGESELLSCHAFT,
Munich
and
BAYERISCHE VEREINSBANK AKTIENGESELLSCHAFT,
Munich
(hereinafter referred to as the "Original Lenders")
and
BAYERISCHE VEREINSBANK AKTIENGESELLSCHAFT, Munich
(hereinafter referred to as the "Facility Agent")
on the other hand.
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Table of Contents
-----------------
Page
Article 1 Definitions 170
Article 2 Loan Facility 185
Article 3 Purpose 187
Article 4 Conditions Precedent 187
Article 5 Availability and Drawdown of General Tranche and
Working Capital Tranche 191
Article 6 Special Credit Tranche 193
Article 7 Term of General Tranche and Working Capital Tranche 194
Article 8 Interest under General Tranche and Working Capital
Tranche 194
Article 9 Repayment of General Tranche and Working Capital
Tranche, Schedule 196
Article 10 Prepayment 198
Article 11 Substitute Basis 199
Article 12 Default Interest and Indemnification 200
Article 13 Accounts 201
Article 14 Payments 202
Article 15 Illegality 203
Article 16 Increased Costs 203
Article 17 Tax Gross-Up 204
Article 18 Representations and Warranties 205
Article 19 Covenants 208
Article 20 Cash Collateral Accounts, Assignments and other
Security 216
Article 21 Banking Case, Annual Debt Service Cover Ratio 219
Article 22 Events of Default 220
Article 23 Rights and Obligations of Facility Agent 223
Article 24 Security Trustee 226
Article 25 Fees 227
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Article 26 Costs and Expenses 228
Article 27 Stamp Duties 228
Article 28 Waivers, Remedies Cumulative 228
Article 29 Notices 229
Article 30 Assignability, Transfer, Substitution 229
Article 31 Currency Indemnity 231
Article 32 Pro Rata Sharing 231
Article 33 Set-off 232
Article 34 Miscellaneous 233
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ANNEXES:
Original Lenders' Commitments Annex 1
Drawdown Request Annex 2
Notice to Lenders of Advance Due Annex 3
Original Lenders' Addresses Annex 4
List of Material Project Contracts Annex 5
Form of Assignment Agreement (Project and Annex 6
Delivery Contracts)
Form of Assignment Agreement (Insurances) Annex 7
Form of Pledge Agreement (Hedging Agreements) Annex 8
Mortgage Deed ("Grundschuldbestellung") Annex 9A
Form of Mortgage Purpose Declaration Annex 9B
("Zweckbestimmungserklarung")
Form of Pledge and Title Transfer Agreement of Shares Annex 10A
in the Borrower
Form of Pledge and Title Transfer Agreement of Shares Annex 10B
in Zellstoff- und Papierfabrik Rosenthal Verwaltungs-
GmbH
Form of Title Transfer Agreement (Movable Property) Annex 11A
Form of Title Transfer Agreement (Movable Property) Annex 11B
Form of Proceeds Account Pledge Agreement Annex 12A
Form of Debt Service Reserve Account Pledge Agreement Annex 12B
Form of Investment Reserve Account Pledge Agreement Annex 12C
Form of Security Pooling Agreement Annex 13
Form of Shareholders' Undertakings Annex 14
Minimum Insurance Schedule Annex 15
Performance Criteria Schedule Annex 16
Initial Banking Case Annex 17
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Form of Transfer Agreement Annex 18
Percentage Instalment Schedule Annex 19
Form of Supplemental Agreement Annex 20
Primary Liability Undertaking Declaration Annex 21
General Conditions of DtA and KfW Annex 22
Decision as to the Ausfallburgschaft Annex 23
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PREAMBLE
WHEREAS, the Borrower is a newly founded project company which was
created as a GmbH & Co KG with Zellstoff- und Papierfabrik Rosenthal
Verwaltungs-GmbH as Komplementar (general partner) and
Spezialpapierfabrik Blankenstein GmbH as Kommanditistin (limited
partner) on December 31, 1997; and
WHEREAS, the Borrower intends to convert the existing pulp mill at
Blankenstein/Thuringia to a sulphate based mill for the production
of bleached softwood kraft pulp pursuant to a project memorandum as
dated October 1997; and
WHEREAS, the envisaged total costs for the Project as set out in the
Initial Banking Case (as defined below) in the base case will
initially be DM 707 Mio., whereby this amount is determined as
follows:
DM (MILLION)
572.15 investment costs
39.08 financing costs during construction period
28.00 working capital requirements
15.79 project development costs prior to start of con-
struction
51.93 debt service amount
The Initial Banking Case assumes that in the event of construction
cost overruns, additional financing will be required in the
following amounts:
DM (MILLION)
50.00 additional investment costs
1.53 additional financing costs during construction
period
2.23 additional debt service amount
Such costs are intended to be financed in accordance with the
following finance plan:
DM (MILLION)
45 funds to be provided as equity and/or
subordinated loans by Spezialpapierfabrik
Blankenstein GmbH on the basis set forth in
Article 4.1(h) of this Agreement;
181 government grants, of which it is estimated that
an amount of DM 144 Mio. will be provided by
Thuringer Aufbaubank (Investitionszuschusse) and
an amount of DM 37 Mio. will be provided by the
7
Federal Republic of Germany by means of an in-
vestment subsidy (Investitionszulage);
453 out of the project loan in the amount of DM 508
to be provided by the Lenders hereunder ;
28 out of the project loan in the amount of DM 508
to be provided by the Lenders hereunder for the
financing of working capital;
__________
707
---
27 out of the project loan in the amount of DM 508
to be provided by the Lenders hereunder for the
financing of potential construction cost
overruns;
28.3 additional stand-by equity to be provided by
Spezialpapierfabrik Blankenstein GmbH as limited
partner's equity contribution and/or
subordinated loans, whereby the payment of an
amount DM 25 Mio. will be secured by a first
class guarantee;
10.5 additional stand-by equity to be provided by
Spezialpapierfabrik Blankenstein GmbH as limited
partner's equity contribution and/or
subordinated loans.
WHEREAS, Mercer International, Inc., a company incorporated under
the laws of the state of Washington, United States of America.
having its principal office in Zurich, Switzerland has agreed to act
as sponsor of the Project; and
WHEREAS, the Federal Republic of Germany and the State of Thuringia
have agreed to cover 80 % of the claims of the Lenders under this
Agreement by issuing guarantees in favour of the Lenders, whereby
these guarantees will be administered by C&L Deutsche Revision AG;
and
WHEREAS, Bayerische Hypotheken- und Wechsel-Bank Aktiengesellschaft
has provided the Borrower with a bridge finance facility in the
amount of DM 15 Mio. dated May 19, 1998 for the purpose of financing
parts of the costs for the Project incurred by the Borrower prior to
the date hereof; and
WHEREAS, Bayerische Vereinsbank Aktiengesellschaft and Bayerische
Hypotheken- und Wechsel-Bank Aktiengesellschaft as Original Lenders
have agreed, based upon the foregoing and subject to the terms and
conditions set out below, to provide the Borrower with a fifteen-
year project finance facility; and
WHEREAS, the Borrower acknowledges that the Facility will initially
be granted solely by the Original Lenders; and
WHEREAS, Bayerische Hypotheken- und Wechsel-Bank Aktiengesellschaft
(Hypobank) and Bayerische Vereinsbank Aktiengesellschaft
(Vereinsbank) have announced their intention to merge in 1998
(whereby Vereinsbank will become the surviving com-
8
pany) the Borrower has taken duly note that, after the merger has
become effective, all obligations of Hypobank will be assumed by
Vereinsbank by operation of law;
NOW THEREFORE, the Borrower and the Original Lenders agree as
follows:
ARTICLE 1
DEFINITIONS
In this Agreement the following terms shall have the following
meaning:
1.1 "Lender's Share" shall mean the ratio of a Lender's
Commitment to the aggregate of all Lender's Commitments from
time to time.
1.2 "Suspension Notice" shall have the meaning given to it in
Article 11.1(c).
1.3 "Drawdown Request" shall mean a notice of borrowing
substantially in the form as attached as Annex 2.
1.4 "Business Day" shall mean any day on which commercial banks
in Munich and London are open for business.
1.5 "Construction Cost Overruns" shall mean (i) all project
construction costs (as set out as Total Construction Costs in
the table on page 2 of the Initial Banking Case) in excess of
the amount of DM 572,150,000 and (ii) the maximum amount of
grants from the Federal Republic of Germany that would have
been available to the Borrower, at the time of drawing under
the General Tranche as provided in Article 5.1, under the
Investitionszulagegesetz 1996 and the Investitionszu-
lagegesetz 1999 as applicable on the date hereof, to the
extent such amount has not been received at such time.
1.6 "Construction Period" shall mean the period until the
Completion Date.
1.7 "Encumbrance" shall mean any mortgage, hypothecation, pledge,
lien, charge, assignment, transfer of title or conveyance
over any of the Borrower's present or future assets and any
other security agreement or arrangement for the purpose of
securing any Indebtedness of the Borrower.
1.8 "General Tranche Availability Period" shall mean the period
from the date of this Agreement until the earlier of the
Completion Date or February 15, 2001, subject to Article 5.1.
1.9 "Working Capital Tranche Availability Period" shall mean the
period from the date of this Agreement until the earlier of
the Completion Date or February 15, 2001.
1.10 "Special Credit Tranche Availability Period" shall mean in
respect of a Special Credit Tranche the period from the date
of the fulfilment of the conditions precedent of the
Supplemental Agreement relating to such Special Credit
Tranche until the end of the availability period as set out
in the respective refinancing agreement between DtA or, as
the case may be, KfW and Vereinsbank or February 15, 2001,
whichever is earlier.
1.11 "Working Capital Tranche" shall mean the working capital
tranche referred to in Article 2.1 for the purpose set out in
Article 3.
1.12 "Movable Property" shall mean all machinery and equipment
(Maschinen und maschinelle Anlagen), raw materials and
supplies (Roh-, Hilfs- und Be-
9
triebsstoffe), semi-manufactures and manufactures
(Halbfertig- und Fertigerzeugnisse) and all passenger and
goods vehicles of the Borrower.
1.13 "Guarantors" shall mean the Federal Republic of Germany and
the State of Thuringia as guarantors (Burgen) under the C&L
Ausfallburgschaft.
1.14 "Banking Case" shall mean the annual cash flow projections
for the Borrower prepared initially by the Financial Advisor
of the Borrower and approved by the Facility Agent and
revised by it during the whole lifetime of the Loan (as set
out in Article 21).
1.15 "C&L" shall mean C&L Deutsche Revision Aktiengesellschaft,
Wirtschaftsprufungsgesellschaft, Dusseldorf.
1.16 "C&L Ausfallburgschaft" shall mean the guarantees
("Ausfallburgschaften") in the aggregate amount of DM
406,400,000 plus accrued interest on such amount (i.e. 80%
of DM 508 Mio. plus interest, being the amount of the General
Tranche and the Working Capital Tranche plus interest) of the
Federal Republic of Germany (for a percentage of 48 % of the
loan amount plus interest) and the State of Thuringia (for a
percentage of 32 % of the loan amount plus interest) (and its
successor in that capacity) issued pursuant to the decision
attached to this Agreement as Annex 23 in favour of the
Lenders with respect to this Agreement, administered by C&L,
including the "Allgemeine Bedingungen fur
Burgschaftsubernahmen durch die Bundesrepublik Deutschland
(Bund) und die Lander des Beitrittsgebietes (Lander)"
(General Conditions for the issuing of guarantees by the
Federal Republic of Germany and the Lander of the accession
territory).
1.17 "Advance" shall mean a principal sum drawn down by the
Borrower pursuant to a Drawdown Request under the Loan
Facility or, depending on the context, the principal sum
outstanding as a result of such drawdown.
1.18 "Deutsche Marks" or "DM" shall mean Deutsche Marks or any
other currency which is legal tender in the Federal Republic
of Germany at the time a payment under this Agreement shall
be due.
1.19 "DtA" shall mean Deutsche Ausgleichsbank Anstalt des
offentlichen Rechts, Bonn.
1.20 "Stand-By Equity Funding Guarantee" shall mean the stand-by
equity funding guarantee to be provided by order of the
Shareholder to the Facility Agent (on behalf of the Lenders)
and the Borrower by a bank or financial institution ac-
ceptable to the Facility Agent substantially in the form of
Schedule 2 attached to Annex 14.
1.21 "General Tranche Final Maturity Date" shall have the meaning
given to it in Article 7.1.
1.22 "Working Capital Tranche Final Maturity Date" shall have the
meaning given to it in Article 7.2.
1.23 "Increased Costs" shall have the meaning as defined in
Article 16.
1.24 "Proceeds Account" shall mean the account with Vereinsbank,
Dresden branch opened by the Borrower for the purposes
referred to in Article 20.1.
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1.25 "Original Financial Statements" shall mean the opening
balance sheet of the Borrower as of December 31, 1997.
1.26 "Substitute Basis" shall have the meaning given to it in
Article 11.
1.27 "Initial Banking Case" shall mean the initial Banking Case
dated July 2, 1998 prepared by the Financial Advisor of the
Borrower, approved by the Facility Agent and attached as
Annex 17 hereto.
1.28 "Original Lenders" shall mean Bayerische Hypotheken- und
Wechsel-Bank Aktiengesellschaft and Vereinsbank and
"Original Lender" shall mean each of them.
1.29 "Completion Date" shall mean the date on which the Technical
Consultant certifies that (i) all commissioning and test run
periods as stipulated in the supply contracts have been
successfully completed by the suppliers, (ii) the Project has
been taken over by the Borrower , (iii) no major physical
installation works remain to be effected with respect to the
Project and (iv) in its view the Performance Criteria will
be achieved by the Mill within a period of two (2) years
after the date of its certification.
1.30 "Financial Advisor of the Borrower" shall mean Babcock &
Brown, London, as financial advisor of the Borrower for the
Project or such other financial advisor as appointed by the
Borrower as its financial advisor for the Project from time
to time.
1.31 "Available Cash Flow" shall mean for any 12 months period
ending respectively on the last day of a fiscal year of the
Borrower or, as the case may be, a fiscal half-year of the
Borrower the gross operating revenues (including any
insurance proceeds for loss of revenue or business
interruption and liquidated damages for delayed completion,
but, for the avoidance of doubt, excluding any extraordinary
revenues, in particular amounts paid under the Government
Grants) of the Borrower minus all operating costs (but, for
the avoidance of doubt, excluding depreciation and financing
costs), On-Going Capital Expenditure, Taxes (to the extent
that the Borrower is liable for such Taxes as taxpayer) and
Tax Distributions. For determining the Annual Debt Service
Cover Ratio for the purposes of Articles 19.3 and 20.2 the
Available Cash Flow shall be adjusted by adding a positive
Available Cash Flow of the Borrower, if any, having been
calculated for the preceding 12 months period minus any
amount transferred to the Shareholders' Account pursuant to
Article 20.2 during that period.
1.32 "Guarantee" shall mean any obligation of a Person to pay the
Indebtedness of another Person, including without limitation:
(a) an obligation to pay or purchase such Indebtedness;
(b) an obligation to lend money or to purchase or subscribe
shares or other securities or to purchase assets or
services in order to provide funds for the payment of
such Indebtedness; or
(c) any other agreement to be responsible for such
Indebtedness.
1.33 "Cash Collateral Accounts" shall mean the Proceeds Account,
the Debt Service Reserve Account and the Investment Reserve
Account.
1.34 "Shareholder" shall mean Spezialpapierfabrik Blankenstein
GmbH.
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1.35 "Shareholders' Account" shall have the meaning given to it in
Article 20.2.
1.36 "Primary Liability Undertaking Declaration" shall mean a
declaration by a Lender (other than Vereinsbank) towards DtA
or, as the case may be, KfW assuming primary liability under
a refinancing agreement in relation to a Special Credit in
proportion to its respective Lender's Share, substantially in
the form of Annex 21.
1.37 "General Tranche" shall mean the general tranche referred to
in Article 2.1.
1.38 "Drawdown Date" shall mean a date specified in a Drawdown
Request pursuant to Article 5.3 on which the Lenders shall
make available the requested Advance as specified in Article
5.6.
1.39 "Investment Reserve Account" shall mean the account with
Vereinsbank, Dresden branch opened by the Borrower for the
purposes referred to in Article 20.1.
1.40 "Annual Debt Service Cover Ratio" shall mean the ratio of the
Available Cash Flow for the 12 months period (ending
respectively on the last day of a fiscal year or, as the case
may be, a fiscal half-year of the Borrower), to the total
amount of interest, principal and fees payable under the
Agreement (adjusted by payments or receipts by the Borrower
under interest rate hedging agreements concluded with the
approval of the Facility Agent and excluding any
extraordinary repayment to be effected by the Borrower
pursuant to Article 9.4 and any prepayment to be effected by
the Borrower in accordance with Article 10) for that period.
1.41 "KfW" shall mean Kreditanstalt fur Wiederaufbau (KfW),
Frankfurt/Main.
1.42 "Facility Agent" shall mean Vereinsbank or such other bank as
may from time to time be appointed in its place pursuant to
the provisions of Article 23.14.
1.43 "Account" shall mean the account No. 0000000 with the Dresden
branch of Vereinsbank, banking code 00000000 in the name of
the Facility Agent to which each Lender's Share of the
Advance is to be credited by the Lenders and into which
monies owed from time to time by the Borrower pursuant to
this Agreement shall be paid or such other account as shall
be notified to the Borrower and the Lenders by the Facility
Agent.
1.44 "Lenders" shall mean the Original Lenders and all of their
assignees/transferees pursuant to Article 30.3, and "Lender"
shall mean each one of them.
1.45 "Loan Facility" or "Facility" shall mean the loan facility
referred to in Article 2.1 comprising the General Tranche,
the Working Capital Tranche and the Special Credit Tranche
(if any).
1.46 "Borrower" shall mean Zellstoff- und Papierfabrik Rosenthal
GmbH & Co KG.
1.47 "Security Documents" shall mean the C&L Ausfallburgschaft and
all security agreements concluded between the Borrower or, as
the case may be, any third party and the Lenders which are
based on the forms of the Assignment Agreement (Receivables
and Warranty Claims), the Assignment Agreement (Insurances),
the Pledge Agreement (Hedging Agreements), the Mortgage Deed
(including the Mortgage Purpose Declaration), the Pledge and
Title Transfer Agreements of Shares in the Borrower and in
Zellstoff- und Papierfabrik Rosenthal Verwaltungs-GmbH, the
Title Transfer Agreements for Movable Property, the Proceeds
Accounts Pledge Agreement, the Debt Service
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Reserve Account Pledge Agreement, the Investment Reserve
Account Pledge Agreement, the Shareholders' Undertakings
Agreement and the Stand-By Equity Funding Guarantee attached
hereto as Annexes or, in the case of the Stand-By Equity
Funding Guarantee as Schedule to Annex 14.
1.48 "Lender's Commitment" shall mean (i) with respect to each
Original Lender the amount set forth opposite such Original
Lender's name in Annex 1 respectively, and with the
respective lapse of time and further provided that no such
Advance has been made, the reduced amount as set forth in
Article 2 at such time, and (ii) after assignments/transfers
pursuant to Article 30.3 have been effected with respect to
any assignee/transferee pursuant to Article 30.3, the amount
of the Loan Facility, which has been assigned/transferred to
it and with respect to any assigning/transferring Lender the
amounts of the Loan Facility remaining with it after such
assignment/transfer, in each case as the same may be reduced
from time to time as provided for in this Agreement.
1.49 "Event of Default" shall have the meaning as given to it in
Article 22.1.
1.50 "Notice of Default" shall have the meaning given to it in
Article 22.2.
1.51 "On-Going Capital Expenditure" shall mean expenditure of
the Borrower related to equipment and infrastructure
required for the proper maintenance and operation of the
Mill.
1.52 "Performance Criteria" shall mean the performance criteria,
which have been set up by the Technical Consultant of the
Lenders in the English language and which are attached hereto
as Annex 16.
1.53 "LIBOR" shall be the interest rate published by the Telerate
service (currently Telerate page 3750 or such other page as
may replace page 3750), expressed as an annual interest rate,
at which deposits in Deutsche Marks are being quoted by first
class banks in the London Interbank Eurocurrency Market at
11:00 a.m. London time on the Interest Rate Determination
Day for a period corresponding to the relevant Interest
Period.
1.54 "Margin" shall mean 0.75 % p.a. for the interest accruing
prior to the end of the Interest Period in effect on the
Completion Date and 0.70% p.a. for the interest accruing
thereafter; provided, however, that the Margin shall be 0.60%
p.a. (the "Reduced Margin") for any Interest Period
commencing after the Completion Date if the Annual Debt
Service Cover Ratio was more than 1.7 for the 12-month period
ending on the last day of the fiscal year-end or, as the case
may be, fiscal half year end of the Borrower immediately
preceding the commencement of such Interest Period.
1.55 "Majority Lenders" shall, as long as no part of the Advance
has been drawn down, mean Lenders having at least a majority
of 66 2/3% of the aggregate Lender's Commitments and, after
the Advance has been drawn down, Lenders having made at least
66 2/3 % of the outstanding Advance.
1.56 "Required Balance" shall mean the amount to be maintained as
security in the Debt Service Reserve Account as from February
28, 2001 until the Loan has been repaid in full, which on any
date shall equal the aggregate of (i) the amounts payable by
the Borrower under this Facility as principal on the two
Repayment Dates immediately following such date (but, for the
avoidance of doubt, excluding any extraordinary repayment to
be effected by the Borrower pursuant to Article 9.4), (ii)
the amounts reasonably estimated by the Facility Agent as to
be payable as interest on the outstanding principal during
the 12 month period ending on the second of such Repayment
Dates adjusted by
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payments or receipts by the Borrower under interest rate
hedging agreements concluded with the approval of the
Facility Agent and (iii) the amounts of the fees payable to
C&L in connection with the C&L Ausfallburgschaft during such
period; such aggregate amounts shall be determined by the
Facility Agent for the first time at the latest five (5)
Business Days prior to February 28, 2001 and shall be
recalculated thereafter on each Interest Rate Determination
Date following March 31, 2001 and shall, in each case, be
notified to the Borrower without undue delay.
1.57 "Person" means an individual, corporation, partnership,
trust, unincorporated organisation or any other legal entity
or a national state or any agency or political subdivision
thereof, whether or not having a separate legal personality.
1.58 "Potential Event of Default" shall mean any event which would
be reasonably likely to become (with the passage of time, the
giving of notice, the making of any determination hereunder
or any combination thereof) an Event of Default.
1.59 "Project" shall mean the conversion and extension of the
Borrower's existing (155.000 tonnes p.a.) sulphite pulp mill
at Blankenstein in Thuringia to a sulphate based mill for
the production of northern bleached softwood kraft pulp (with
a new design capacity of 881 air dry metric tonnes ("Adt")
pulp per day and a capacity of 280.000 tonnes pulp per year).
1.60 "Project Costs" shall mean all costs for the design,
development and construction of the Project including all
financing costs until the earlier of the Completion Date or
March 31, 2001 as set out in the Initial Banking Case and all
working capital costs incurred by the Borrower and "Project
Construction Costs" shall mean all Project Costs excluding
the financing costs and working capital costs incurred by the
Borrower.
1.61 "Material Project Contracts" shall mean (i) all contracts of
the Borrower, which are listed in Annex 5 and (ii) all
contracts concluded by the Borrower after the date hereof
relating to the design, development and construction of the
Project with an expected business value in excess of DM 3
Mio., such business value to be determined by the Facility
Agent.
1.62 "Legal Changes" shall have the meaning given to it in Article
15.
1.63 "Reference Bank" shall mean the banks listed in Article 8.4.
1.64 "Reference Interest Rate" shall mean the interest rate
determined by the Facility Agent pursuant to Article 8.3 or
8.4.
1.65 "Refunding Bank" shall have the meaning given to it in
Article 32.3.
1.66 "Repayment Date" shall mean March 31, 2001 and each September
30 and March 31 thereafter until the Loan Facility is repaid
in full, and the General Tranche Final Maturity Date.
1.67 "Repayment Schedule" shall mean the repayment schedule
referred to in Article 9.2.
1.68 "Debt Service Reserve Account" shall mean the account with
Vereinsbank, Dresden branch opened by the Borrower for the
purposes referred to in Article 20.
1.69 "Security Trustee" shall mean Vereinsbank in its capacity as
security agent (in relation to any pledges in favour of the
Lenders) and trustee (in relation to
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any mortgages, assignments or title transfers as security in
favour of the Lenders) on the terms set out in the Security
Pooling Agreement between the Lenders, the Borrower and
Vereinsbank of even date herewith or such other bank or
institution as may from time to time be appointed in its
place pursuant to the provisions of the Security Pooling
Agreement.
1.70 "Special Credit" shall mean a special credit provided by DtA
under its "ERP-Umwelt- und Energiesparprogramm" or its
"Umweltprogramm" and/or KfW under its "Mittelstandsprogramm"
or its "Umweltprogramm".
1.71 "Special Credit Tranche" shall mean a special credit tranche
referred to in Article 2.1, which shall be made available to
the Borrower by the Lenders subject to the concluding of a
Supplemental Agreement.
1.72 "Government Grants" shall mean the grants in the amount of
not less than DM 181 Mio., of which it is estimated that DM
144 Mio. will be given as direct grants by Thuringer
Aufbaubank and DM 37 Mio. as grants by the Federal Republic
of Germany as "Investitionszulage" for the Project in favour
of the Borrower.
1.73 "Tax Distribution" shall mean a distribution to a limited
partner of the Borrower for the payment of its Taxes which
are due on the lower of (i) the taxable income of such
limited partner arising from its partnership share in the
Borrower as set out in the respective tax assessment pursuant
to Section 180 Abgabenordnung (einheitliche und gesonderte
Gewinnfeststellung), or (ii) the overall taxable income of
such partner as set out in its personal tax assessment
(Steuerbescheid), as the case may be, provided such
distribution is made in accordance with Section 10 of the
partnership agreement relating to the Borrower.
1.74 "Taxes" (which term shall include "Taxation") shall mean all
current or future taxes, duties, charges or official fees of
any kind, including any interest, fines or penalties and all
payments in relation to such current or future taxes, duties,
charges or official fees of any kind, unless they are levied
or paid in relation to the net income of a Lender.
1.75 "Technical Consultant" shall mean AF-IPK AB, Stockholm as
technical consultant of the Lenders for the Project or such
other technical consultant as appointed by the Lenders as
their technical consultant for the Project from time to time.
1.76 "Environmental Claim" shall mean any claim, notice,
prosecution, demand, action, official warning, abatement or
other order (conditional or otherwise) relating to
environmental matters or any notification or order requiring
compliance with the terms of any Environmental Licence or
Environmental Law.
1.77 "Environmental Law" shall include all or any law, statute,
rule, regulation, treaty, by-law, code of practice, order,
notice, demand, decision of the courts or of any governmental
authority or agency or any other regulatory or other body in
the Federal Republic of Germany which serves to protect the
environment.
1.78 "Environmental Licence" shall include any permit, licence,
authorisation, consent or other approval required at any
time by any Environmental Law.
1.79 "Judgement Currency" shall have the meaning given to it in
Article 31.1.
1.80 "Indebtedness" shall mean any obligation for the payment or
repayment of money (whether as principal or as surety, and
whether present or future, actual or contingent).
15
1.81 "Related Party" shall mean (i) as of the date hereof, Mercer
International, Inc., Zellstoff- und Papierfabrik Rosenthal
Verwaltungs-GmbH, Spezialpapierfabrik Blankenstein GmbH, and
their direct and indirect majority-owned subsidiaries, (ii)
any other Person becoming the general partner (Komplementar),
a limited partner (Kommanditist) or, as the case may be, a
shareholder of the Borrower and its direct and indirect
Parent Company (as defined below), and (iii) the Borrower's
direct and indirect majority-owned subsidiaries. "Parent
Company" for the purpose of this Definition shall mean any
Person owning directly or indirectly a majority of the shares
of the general partner, a limited partner or, as the case may
be, a shareholder of the Borrower.
1.82 "Vereinsbank" shall mean Bayerische Vereinsbank
Aktiengesellschaft.
1.83 "Insurance Consultant" shall mean Sedgwick Bankrisk, London,
as insurance consultant of the Lenders for the Project or
such other insurance consultant as appointed by the Lenders
as their insurance consultant for the Project from time to
time.
1.84 "Agreement" shall mean this agreement including all its
Annexes.
1.85 "Mill" shall mean the Borrower's existing sulphite pulp mill
or, after completion of the Project, the sulphate based mill
for the production of bleached softwood kraft pulp at
Blankenstein in eastern Thuringia.
1.86 "Interest Period" shall have the meaning given to it in
Article 8.8.
1.87 "Interest Rate" shall mean the sum of the Reference Interest
Rate and the Margin pursuant to the provision of Article 8.1.
1.88 "Interest Rate Determination Day" shall mean the second
Business Day before the commencement of an Interest Period.
1.89 "Interest Payment Date" shall mean the last day of an
Interest Period or such other date as provided for in Article
8.9.
1.90 "Permitted Encumbrances" shall mean
(i) Encumbrances arising in the ordinary course of business
(including any retention of title created under
delivery contracts) or created by operation of law; or
(ii) such other Encumbrances as may be created in relation
to this Agreement or with the prior written consent of
the Majority Lenders, which consent shall not be
unreasonably withheld.
1.91 "Supplemental Agreement" shall mean an agreement concluded
between the Borrower and the Facility Agent (acting on behalf
of the Lenders) relating to a Special Credit Tranche,
substantially in the form of Annex 20.
[ARTICLE 1
DEFINITIONS
IN ALPHABETICAL ORDER]
In this Agreement the following terms shall have the following
meaning:
16
1.1 "Account" shall mean the account No. 0000000, banking code
850 200 86 with the Dresden branch of Vereinsbank in the name
of the Facility Agent to which each Lender's Share of the
Advance is to be credited by the Lenders and into which
monies owed from time to time by the Borrower pursuant to
this Agreement shall be paid or such other account as shall
be notified to the Borrower and the Lenders by the Facility
Agent.
1.2 "Advance" shall mean a principal sum drawn down by the
Borrower pursuant to a Drawdown Request under the Loan
Facility or, depending on the context, the principal sum
outstanding as a result of such drawdown.
1.3 "Agreement" shall mean this agreement including all its
Annexes.
1.4 "Annual Debt Service Cover Ratio" shall mean the ratio of the
Available Cash Flow for the 12 months period (ending
respectively on the last day of a fiscal year or, as the case
may be, a fiscal half-year of the Borrower), to the total
amount of interest, principal and fees payable under the
Agreement (adjusted by payments or receipts by the Borrower
under interest rate hedging agreements concluded with the
approval of the Facility Agent and excluding any
extraordinary repayment to be effected by the Borrower
pursuant to Article 9.4 and any prepayment to be effected by
the Borrower in accordance with Article 10) for that period.
1.5 "Available Cash Flow" shall mean for any 12 months period
ending respectively on the last day of a fiscal year of the
Borrower or, as the case may be, a fiscal half-year of the
Borrower the gross operating revenues (including any
insurance proceeds for loss of revenue or business
interruption and liquidated damages for delayed completion,
but, for the avoidance of doubt, excluding any extraordinary
revenues, in particular amounts paid under the Government
Grants) of the Borrower minus all operating costs (but, for
the avoidance of doubt, excluding depreciation and financing
costs), On-Going Capital Expenditure, Taxes (to the extent
that the Borrower is liable for such Taxes as taxpayer) and
Tax Distributions. For determining the Annual Debt Service
Cover Ratio for the purposes of Articles 19.3 and 20.2 the
Available Cash Flow shall be adjusted by adding a positive
Available Cash Flow of the Borrower, if any, having been
calculated for the preceding 12 months period minus any
amount transferred to the Shareholders' Account pursuant to
Article 20.2 during that period.
1.6 "Banking Case" shall mean the annual cash flow projections
for the Borrower prepared initially by the Financial Advisor
of the Borrower and approved by the Facility Agent and
revised by it during the whole lifetime of the Loan (as set
out in Article 21).
1.7 "Borrower" shall mean Zellstoff- und Papierfabrik Rosenthal
GmbH & Co KG.
1.8 "Business Day" shall mean any day on which commercial banks
in Munich and London are open for business.
1.9 "Cash Collateral Accounts" shall mean the Proceeds Account,
the Debt Service Reserve Account and the Investment Reserve
Account.
1.10 "C&L" shall mean C&L Deutsche Revision Aktiengesellschaft,
Wirtschaftsprufungsgesellschaft, Dusseldorf.
1.11 "C&L Ausfallburgschaft" shall mean the guarantees
("Ausfallburgschaften") in the aggregate amount of DM
406,400,000 (i.e. 80% of DM 508 Mio. plus in-
17
terest, being the amount of the General Tranche and the
Working Capital Tranche plus interest) of C&L as mandatary of
the Federal Republic of Germany (for a percentage of 48 % of
the loan amount) and the State of Thuringia (for a percentage
of 32 % of the loan amount) (and its successor in that
capacity) issued pursuant to the decision attached to this
Agreement as Annex 23 in favour of the Lenders with respect
to this Agreement including the "Allgemeine Bedingungen fur
Burgschaftsubernahmen durch die Bundesrepublik Deutschland
(Bund) und die Lander des Beitrittsgebietes (Lander)"
(General Conditions for the issuing of guarantees by the
Federal Republic of Germany and the Lander of the accession
territory).
1.12 "Completion Date" shall mean the date on which the Technical
Consultant certifies that (i) all commissioning and test run
periods as stipulated in the supply contracts have been
successfully completed by the suppliers, (ii) the Project has
been taken over by the Borrower , (iii) no major physical
installation works remain to be effected with respect to the
Project and (iv) in its view the Performance Criteria will be
achieved by the Mill within a period of two (2) years after
the date of its certification.
1.13 "Construction Cost Overruns" shall mean (i) all project
construction costs (as set out as Total Construction Costs in
the table on page 2 of the Initial Banking Case) in excess of
the amount of DM 572,150,000 and (ii) the maximum amount of
grants from the Federal Republic of Germany that would have
been available to the Borrower, at the time of drawing under
the General Tranche as provided in Article 5.1, under the
Investitionszulagegesetz 1996 and the
Investitionszulagegesetz 1999 as applicable on the date
hereof, to the extent such amount has not been received at
such time.
1.14 "Construction Period" shall mean the period until the
Completion Date.
1.15 "Debt Service Reserve Account" shall mean the account with
Vereinsbank, Dresden branch opened by the Borrower for the
purposes referred to in Article 20.
1.16 "Deutsche Marks" or "DM" shall mean Deutsche Marks or any
other currency which is legal tender in the Federal Republic
of Germany at the time a payment under this Agreement shall
be due.
1.17 "Drawdown Date" shall mean a date specified in a Drawdown
Request pursuant to Article 5.3 on which the Lenders shall
make available the requested Advance as specified in Article
5.6.
1.18 "Drawdown Request" shall mean a notice of borrowing
substantially in the form as attached as Annex 2.
1.19 "DtA" shall mean Deutsche Ausgleichsbank Anstalt des
offentlichen Rechts, Bonn.
1.20 "Encumbrance" shall mean any mortgage, hypothecation, pledge,
lien, charge, assignment, transfer of title or conveyance
over any of the Borrower's present or future assets and any
other security agreement or arrangement for the purpose of
securing any Indebtedness of the Borrower.
1.21 "Environmental Claim" shall mean any claim, notice,
prosecution, demand, action, official warning, abatement or
other order (conditional or otherwise) relating to
environmental matters or any notification or order requiring
compliance with the terms of any Environmental Licence or
Environmental Law.
18
1.22 "Environmental Law" shall include all or any law, statute,
rule, regulation, treaty, by-law, code of practice, order,
notice, demand, decision of the courts or of any governmental
authority or agency or any other regulatory or other body in
the Federal Republic of Germany which serves to protect the
environment.
1.23 "Environmental Licence" shall include any permit, licence,
authorisation, consent or other approval required at any
time by any Environmental Law.
1.24 "Event of Default" shall have the meaning as given to it in
Article 22.1.
1.25 "Facility Agent" shall mean Vereinsbank or such other bank as
may from time to time be appointed in its place pursuant to
the provisions of Article 23.14.
1.26 "Financial Advisor of the Borrower" shall mean Babcock &
Brown, London, as financial advisor of the Borrower for the
Project or such other financial advisor as appointed by the
Borrower as its financial advisor for the Project from time
to time.
1.27 "General Tranche" shall mean the general tranche referred to
in Article 2.1.
1.28 "General Tranche Availability Period" shall mean the period
from the date of this Agreement until the earlier of the
Completion Date or February 15, 2001, subject to Article 5.1.
1.29 "General Tranche Final Maturity Date" shall have the meaning
given to it in Article 7.1.
1.30 "Government Grants" shall mean the grants in the amount of
not less than DM 181 Mio., of which it is estimated that DM
144 Mio. will be given as direct grants by Thuringer
Aufbaubank and DM 37 Mio. as grants by the Federal Republic
of Germany as "Investitionszulage" for the Project in favour
of the Borrower;
1.31 "Guarantee" shall mean any obligation of a Person to pay the
Indebtedness of another Person, including without limitation:
(a) an obligation to pay or purchase such Indebtedness;
(b) an obligation to lend money or to purchase or subscribe
shares or other securities or to purchase assets or
services in order to provide funds for the payment of
such Indebtedness; or
(c) any other agreement to be responsible for such
Indebtedness.
1.32 "Guarantors" shall mean the Federal Republic of Germany and
the State of Thuringia as guarantors under the C&L
Ausfallburgschaft.
1.33 "Increased Costs" shall have the meaning as defined in
Article 16.
1.34 "Indebtedness" shall mean any obligation for the payment or
repayment of money (whether as principal or as surety, and
whether present or future, actual or contingent).
1.35 "Initial Banking Case" shall mean the initial Banking Case
dated] July 2, 1998 prepared by the Financial Advisor of the
Borrower, approved by the Facility Agent and attached as
Annex 17 hereto.
19
1.36 "Insurance Consultant" shall mean Sedgwick Bankrisk, London,
as insurance consultant of the Lenders for the Project or
such other insurance consultant as appointed by the Lenders
as their insurance consultant for the Project from time to
time.
1.37 "Interest Payment Date" shall mean the last day of an
Interest Period or such other date as provided for in Article
8.9.
1.38 "Interest Period" shall have the meaning given to it in
Article 8.8.
1.39 "Interest Rate" shall mean the sum of the Reference Interest
Rate and the Margin pursuant to the provision of Article 8.1.
1.40 "Interest Rate Determination Day" shall mean the second
Business Day before the commencement of an Interest Period.
1.41 "Investment Reserve Account" shall mean the account with
Vereinsbank, Dresden branch opened by the Borrower for the
purposes referred to in Article 20.1.
1.42 "Judgement Currency" shall have the meaning given to it in
Article 31.1.
1.43 "KfW" shall mean Kreditanstalt fur Wiederaufbau (KfW),
Frankfurt/Main.
1.44 "Legal Changes" shall have the meaning given to it in Article
15.
1.45 "Lender's Commitment" shall mean (i) with respect to each
Original Lender the amount set forth opposite such Original
Lender's name in Annex 1 respectively, and with the
respective lapse of time and further provided that no such
Advance has been made, the reduced amount as set forth in
Article 2 at such time, and (ii) after assignments/transfers
pursuant to Article 30.3 have been effected with respect to
any assignee/transferee pursuant to Article 30.3, the amount
of the Loan Facility, which has been assigned/transferred to
it and with respect to any assigning/transferring Lender
the amounts of the Loan Facility remaining with it after such
assignment/transfer, in each case as the same may be reduced
from time to time as provided for in this Agreement.
1.46 "Lender's Share" shall mean the ratio of a Lender's
Commitment to the aggregate of all Lender's Commitments from
time to time.
1.47 "Lenders" shall mean the Original Lenders and all of their
assignees/transferees pursuant to Article 30.3, and "Lender"
shall mean each one of them.
1.48 "LIBOR" shall be the interest rate published by the Telerate
service (currently Telerate page 3750 or such other page as
may replace page 3750), expressed as an annual interest rate,
at which deposits in Deutsche Marks are being quoted by first
class banks in the London Interbank Eurocurrency Market at
11:00 a.m. London time on the Interest Rate Determination
Day for a period corresponding to the relevant Interest
Period.
1.49 "Loan Facility" or "Facility" shall mean the loan facility
referred to in Article 2.1 comprising the General Tranche,
the Working Capital Tranche and the Special Credit Tranche
(if any).
1.50 "Majority Lenders" shall, as long as no part of the Advance
has been drawn down, mean Lenders having at least a majority
of 66 2/3 % of the aggregate
20
Lender's Commitments and, after the Advance has been drawn
down, Lenders having made at least 66 2/3 % of the
outstanding Advance.
1.51 "Margin" shall mean 0.75 % p.a. for the interest accruing
prior to the end of the Interest Period in effect on the
Completion Date and 0.70% p.a. for the interest accruing
thereafter; provided, however, that the Margin shall be 0.60%
p.a. (the "Reduced Margin") for any Interest Period
commencing after the Completion Date if the Annual Debt
Service Cover Ratio was more than 1.7 for the 12-month period
ending on the last day of the fiscal year-end or, as the case
may be, fiscal half year of the Borrower immediately
preceding the commencement of such Interest Period.
1.52 "Material Project Contracts" shall mean (i) all contracts of
the Borrower, which are listed in Annex 5 and (ii) all
contracts concluded by the Borrower after the date hereof
relating to the design, development and construction of the
Project with an expected business value in excess of DM 3
Mio., such business value to be determined by the Facility
Agent.
1.53 "Mill" shall mean the Borrower's existing sulphite pulp mill
or, after completion of the Project, the sulphate based mill
for the production of bleached softwood kraft pulp at
Blankenstein in eastern Thuringia.
1.54 "Movable Property" shall mean all machinery and equipment
(Maschinen und maschinelle Anlagen), raw materials and
supplies (Roh-, Hilfs- und Betriebsstoffe), semi-manufactures
and manufactures (Halbfertig- und Fertigerzeugnisse) and all
passenger and goods vehicles of the Borrower.
1.55 "Notice of Default" shall have the meaning given to it in
Article 22.2.
1.56 "On-Going Capital Expenditure" shall mean expenditure of
the Borrower related to equipment and infrastructure
required for the proper maintenance and operation of the
Mill.
1.57 "Original Financial Statements" shall mean the opening
balance sheet of the Borrower as of December 31, 1997.
1.58 "Original Lenders" shall mean Bayerische Hypotheken- und
Wechsel-Bank Aktiengesellschaft and Vereinsbank and "Original
Lender" shall mean each of them.
1.59 "Performance Criteria" shall mean the performance criteria,
which have been set up by the Technical Consultant of the
Lenders in the English language and which are attached hereto
as Annex 16.
1.60 "Permitted Encumbrances" shall mean
(i) Encumbrances arising in the ordinary course of business
(including any retention of title created under
delivery contracts) or created by operation of law; or
(ii) such other Encumbrances as may be created in relation
to this Agreement or with the prior written consent of
the Majority Lenders, which consent shall not be
unreasonably withheld.
1.61 "Person" means an individual, corporation, partnership,
trust, unincorporated organisation or any other legal entity
or a national state or any agency or political subdivision
thereof, whether or not having a separate legal personality.
21
1.62 "Potential Event of Default" shall mean any event which would
be reasonably likely to become (with the passage of time, the
giving of notice, the making of any determination hereunder
or any combination thereof) an Event of Default.
1.63 "Primary Liability Undertaking Declaration" shall mean a
declaration by a Lender (other than Vereinsbank) towards DtA
or, as the case may be, KfW assuming primary liability under
a refinancing agreement in relation to a Special Credit in
proportion to its respective Lender's Share, substantially in
the form of Annex 21.
1.64 "Proceeds Account" shall mean the account with Vereinsbank,
Dresden branch opened by the Borrower for the purposes
referred to in Article 20.1.
1.65 "Project" shall mean the conversion and extension of the
Borrower's existing (155.000 tonnes p.a.) sulphite pulp mill
at Blankenstein in Thuringia to a sulphate based mill for
the production of northern bleached softwood kraft pulp (with
a new design capacity of 881 air dry metric tonnes ("Adt")
pulp per day and a capacity of 280.000 tonnes pulp per year).
1.66 "Project Costs" shall mean all costs for the design,
development and construction of the Project including all
financing costs until the earlier of the Completion Date or
March 31, 2001 as set out in the Initial Banking Case and all
working capital costs incurred by the Borrower and "Project
Construction Costs" shall mean all Project Costs excluding
the financing costs and working capital costs incurred by the
Borrower.
1.67 "Reference Bank" shall mean the banks listed in Article 8.4.
1.68 "Reference Interest Rate" shall mean the interest rate
determined by the Facility Agent pursuant to Article 8.3 or
8.4.
1.69 "Refunding Bank" shall have the meaning given to it in
Article 32.3.
1.70 "Related Party" shall mean (i) as of the date hereof, Mercer
International, Inc., Zellstoff- und Papierfabrik Rosenthal
Verwaltungs-GmbH, Spezialpapierfabrik Blankenstein GmbH, and
their direct and indirect majority-owned subsidiaries, (ii)
any other Person becoming the general partner (Komplementar),
a limited partner (Kommanditist) or, as the case may be, a
shareholder of the Borrower and its direct and indirect
Parent Company (as defined below), and (iii) the Borrower's
direct and indirect majority-owned subsidiaries. "Parent
Company" for the purpose of this Definition shall mean any
Person owning directly or indirectly a majority of the shares
of the general partner, a limited partner or, as the case may
be, a shareholder of the Borrower.
1.71 "Repayment Date" shall mean March 31, 2001 and each September
30 and March 31 thereafter until the Loan Facility is repaid
in full, and the General Tranche Final Maturity Date.
1.72 "Repayment Schedule" shall mean the repayment schedule
referred to in Article 9.2.
1.73 "Required Balance" shall mean the amount to be maintained as
security in the Debt Service Reserve Account as from February
28, 2001 until the Loan has been repaid in full, which on any
date shall equal the aggregate of (i) the amounts payable by
the Borrower under this Facility as principal on the two
Repayment Dates immediately following such date (but, for the
avoidance of doubt, excluding any extraordinary repayment to
be effected by the Borrower pursuant to Article 9.4), (ii)
the amounts reasonably estimated by the Facility
22
Agent as to be payable as interest on the outstanding
principal during the 12 month period ending on the second of
such Repayment Dates adjusted by payments or receipts by the
Borrower under interest rate hedging agreements concluded
with the approval of the Facility Agent and (iii) the amounts
of the fees payable to C&L in connection with the C&L
Ausfallburgschaft during such period; such aggregate amounts
shall be determined by the Facility Agent for the first time
at the latest five (5) Business Days prior to February 28,
2001 and shall be recalculated thereafter on each Interest
Rate Determination Date following March 31, 2001 and shall,
in each case, be notified to the Borrower without undue
delay.
1.74 "Security Documents" shall mean the C&L Ausfallburgschaft and
all security agreements concluded between the Borrower or, as
the case may be, any third party and the Lenders which are
based on the forms of the Assignment Agreement (Receivables
and Warranty Claims), the Assignment Agreement (Insurances),
the Pledge Agreement (Hedging Agreements), the Mortgage Deed
(including the Mortgage Purpose Declaration), the Pledge and
Title Transfer Agreements of Shares in the Borrower and in
Zellstoff- und Papierfabrik Rosenthal Verwaltungs-GmbH, the
Title Transfer Agreements for Movable Property, the Proceeds
Accounts Pledge Agreement, the Debt Service Reserve Account
Pledge Agreement, the Investment Reserve Account Pledge
Agreement, the Shareholders' Undertakings Agreement and the
Stand-By Equity Funding Guarantee attached hereto as Annexes
or, in the case of the Stand-By Equity Funding Guarantee as
Schedule to Annex 14.
1.75 "Security Trustee" shall mean Vereinsbank in its capacity as
security agent (in relation to any pledges in favour of the
Lenders) and trustee (in relation to any mortgages,
assignments or title transfers as security in favour of the
Lenders) on the terms set out in the Security Pooling
Agreement between the Lenders, the Borrower and Vereinsbank
of even date herewith or such other bank or institution as
may from time to time be appointed in its place pursuant to
the provisions of the Security Pooling Agreement.
1.76 "Shareholder" shall mean Spezialpapierfabrik Blankenstein
GmbH.
1.77 "Shareholders' Account" shall have the meaning given to it in
Article 20.2.
1.78 "Special Credit" shall mean a special credit provided by DtA
under its "ERP-Umwelt- und Energiesparprogramm" or its
"Umweltprogramm" and/or KfW under its "Mittelstandsprogramm"
or its "Umweltprogramm".
1.79 "Special Credit Tranche" shall mean a special credit tranche
referred to in Article 2.1, which shall be made available to
the Borrower by the Lenders subject to the concluding of a
Supplemental Agreement.
1.80 "Special Credit Tranche Availability Period" shall mean in
respect of a Special Credit Tranche the period from the date
of the fulfilment of the conditions precedent of the
Supplemental Agreement relating to such Special Credit
Tranche until the end of the availability period as set out
in the respective refinancing agreement between DtA or, as
the case may be, KfW and Vereinsbank or February 15, 2001,
whichever is earlier.
1.81 "Stand-By Equity Funding Guarantee" shall mean the stand-by
equity funding guarantee to be provided by order of the
Shareholder to the Facility Agent (on behalf of the Lenders)
and the Borrower by a bank or financial institution
acceptable to the Facility Agent substantially in the form of
Schedule 2 attached to Annex 14.
23
1.82 "Substitute Basis" shall have the meaning given to it in
Article 11.
1.83 "Supplemental Agreement" shall mean an agreement concluded
between the Borrower and the Facility Agent (acting on behalf
of the Lenders) relating to a Special Credit Tranche,
substantially in the form of Annex 20.
1.84 "Suspension Notice" shall have the meaning given to it in
Article 11.1(c).
1.85 "Tax Distribution" shall mean a distribution to a limited
partner of the Borrower for the payment of its Taxes which
are due on the lower of (i) the taxable income of such
limited partner arising from its partnership share in the
Borrower as set out in the respective tax assessment pursuant
to Section 180 Abgabenordnung (einheitliche und gesonderte
Gewinnfeststellung), or (ii) the overall taxable income of
such partner as set out in its personal tax assessment
(Steuerbescheid), as the case may be, provided such
distribution is made in accordance with Section 10 of the
partnership agreement relating to the Borrower.
1.86 "Taxes" (which term shall include "Taxation") shall mean all
current or future taxes, duties, charges or official fees of
any kind, including any interest, fines or penalties and all
payments in relation to such current or future taxes, duties,
charges or official fees of any kind, unless they are levied
or paid in relation to the net income of a Lender.
1.87 "Technical Consultant" shall mean AF-IPK AB, Stockholm as
technical consultant of the Lenders for the Project or such
other technical consultant as appointed by the Lenders as
their technical consultant for the Project from time to time.
1.88 "Vereinsbank" shall mean Bayerische Vereinsbank
Aktiengesellschaft
1.89 "Working Capital Tranche" shall mean the working capital
tranche referred to in Article 2.1 for the purpose set out in
Article 3.
1.90 "Working Capital Tranche Availability Period" shall mean the
period from the date of this Agreement until the earlier of
the Completion Date or February 15, 2001.
1.91 "Working Capital Tranche Final Maturity Date" shall have the
meaning given to it in Article 7.2.]
ARTICLE 2
LOAN FACILITY
2.1 COMMITMENT, TRANCHES
Subject to the terms and conditions of this Agreement, the
Lenders shall provide the Borrower with a Loan Facility for
an aggregate principal amount of up to DM 508,000,000 (in
words: five hundred eight million Deutsche Marks). The Loan
Facility shall be divided into the General Tranche in the
amount of up to DM 480,000,000 (in words: four hundred eighty
million Deutsche Marks), the Working Capital Tranche in the
amount of up to DM 28,000,000 (in words: twenty eight million
Deutsche Marks) and, subject to the concluding of
Supplemental Agreements (substantially in the form of Annex
20), one or more Special Credit Tranches, provided, however,
that the maximum amount available to the Borrower under the
General Tranche shall be reduced by the aggregate amounts
available to the Borrower under the Special Credit Tranches,
if any. Each of the Lenders agrees, in the event of a
Drawdown Request under
24
the General Tranche or the Working Capital Tranche pursuant
to Article 5 to contribute during the General Tranche
Availability Period or, as the case may be, the Working
Capital Tranche Availability Period to the Advances to be
provided to the Borrower hereunder an amount corresponding to
its Lender's Share. The sum of all Lender's Commitments is
reduced by such amount by which the sum of all maximum
liability amounts included into the C&L Ausfallburgschaft
falls short of the amounts on the respective dates as set out
below:
- on December 31, 1998: DM 90 Mio.
- on June 30, 1999: DM 225 Mio.
- on December 31, 1999: DM 330 Mio.
- on June 30, 2000: DM 410 Mio.
- on February 28, 2001: DM 508 Mio.
Each Lender's Commitment shall be reduced on a pro rata
basis. As far as C&L agrees to extend the period during which
liability amounts may be included beyond the above mentioned
deadline dates, the Lenders undertake, upon request of the
Borrower, to extend their Lender's Commitments until such
date, but at the latest until February 28, 2001. In the event
that a Special Credit Tranche pursuant to the terms of the
Supplemental Agreement relating to such Special Credit
Tranche shall be made available to the Borrower during the
Special Credit Tranche Availability Period, Vereinsbank (in
its capacity as Facility Agent) agrees to conclude on behalf
of the Lenders with DtA or, as the case may be, KfW the
refinancing agreement relating to such Special Credit Tranche
and each of the other Lenders agrees to contribute in
proportion to its Lender's Share to such Advance by issuing
its Primary Liability Undertaking Declaration substantially
in the form of Annex 21 towards DtA or, as the case may be,
KfW. The aggregate maximum principal amount of the
contributions of each Lender in the General Tranche and the
Working Capital Tranche together with the amount of the
obligations in respect of principal assumed by it under its
Primary Liability Undertaking Declaration shall not exceed
its Lender's Commitment. To the extent a Supplemental
Agreement is concluded for an amount that exceeds the
difference between the aggregate Lender's Commitments and the
aggregate principal amount of the Advances then outstanding,
disbursements exceeding such difference will be applied to
the prepayment of an equal amount of the General Tranche at
the end of the Interest Period then in effect and the
Repayment Schedule referred to in Article 9 shall be amended
accordingly.
2.2 OBLIGATIONS SEVERAL
The obligations of each Lender under this Agreement are
several. Failure of a Lender to carry out its obligations
pursuant to this Agreement in a proper manner does not
relieve any other party of its obligations under this
Agreement. Save as provided for in Article 22 below, the
same shall apply in the event that a Lender terminates its
participation in this Agreement in accordance with this
Agreement or terminates its Lender's Commitment in accordance
with this Agreement, or where performance of the obligations
undertaken by the Lender pursuant to this Agreement would be
invalid or illegal. No Lender is responsible for the
obligations of any other party under this Agreement. Each
Lender shall only be responsible for its Lender's Commitment.
Joint liability, or joint and several liability of the
Lenders is hereby excluded. Notwithstanding the foregoing and
subject to Article 4.3 (b), if any Lender fails to provide
its Lender's Share of an Advance on any Drawdown
25
Date, the nondefaulting Lenders shall provide such defaulting
Lender's Share rateably according to their respective
Lender's Share, except that no Lender shall be required to
advance an aggregate amount exceeding its Lender's
Commitment.
2.3 RIGHTS SEVERAL
The obligations of the Borrower to the Facility Agent and the
individual Lenders hereunder are created vis-a-vis each of
them as separate and independent obligations. Subject to
Articles 22 and 23, the Security Documents and the Security
Pooling Agreement each Lender or the Facility Agent may
separately enforce its rights hereunder. The formation of
jointly owned assets is hereby excluded.
ARTICLE 3
PURPOSE
The Borrower will use the amounts available under the General
Tranche of the Loan Facility for the financing of the Project Costs
including an amount of up to DM 15 Mio. for the payment of all
amounts due under the bridge finance facility provided by Bayerische
Hypotheken- und Wechsel-Bank Aktiengesellschaft to the Borrower
pursuant to the Bridge Finance Facility Agreement dated May 19,
1998. The amounts available under the Working Capital Tranche of
the Loan Facility will be used by the Borrower primarily for the
financing of its working capital needs, but may also be used for the
financing of Project Costs. The Loan Facility may also be used by
the Borrower to finance the Required Balance and to make deposits
into the Investment Reserve Account for the purpose of creating an
investment reserve for such Project Construction Costs, which will
become due after the end of the General Tranche Availability Period
and which have been identified by the Technical Consultant in its
certification issued in relation to the Completion Date.
ARTICLE 4
CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT PRIOR TO FIRST DRAWDOWN
The obligations of the Facility Agent and each Lender to
contribute to the initial Advance are subject to the
condition precedent that the Facility Agent has notified the
Borrower and the Lenders that it has received not later than
five Business Day prior to the first Drawdown Date the
documents and evidences specified below in form and substance
satisfactory to it:
(a) certified copy of the partnership agreement and such
other partnership documents relating to the Borrower as
the Facility Agent may reasonably and timely demand;
(b) certified copy of the by-laws and such other corporate
documents relating to Zellstoff- und Papierfabrik
Rosenthal Verwaltungs-GmbH as the Facility Agent may
reasonably and timely demand;
(c) certified extract of the Commercial Register relating
to the Borrower and Zellstoff- und Papierfabrik
Rosenthal Verwaltungs-GmbH, as of recent date;
(d) specimen signatures of such agents of the Borrower as
shall be authorised to sign this Agreement, the
Security Documents, the Draw-
26
down Requests and any notices required to be given by
the Borrower pursuant to the provisions of this
Agreement;
(e) copies of all material licences, permits and approvals
of all governmental authorities in relation to the
Project or parts of the Project (i.e. concerning a
phase of construction);
(f) the Initial Banking Case attached hereto as Annex 17;
(g) evidence that an interest hedging agreement on the
basis of the standard agreement applied by German banks
("Rahmenvertrag fur Finanztermingeschafte") is in place
as required by the hedging policies agreed between the
Borrower and the Original Lenders with respect to an
amount of DM 448 Mio. to be drawn under the General
Tranche;
(h) evidence that (i) the complete financing of the Project
as set forth in the Preamble has been assured, in
particular that the Government Grants for the Project
as contemplated in the Initial Banking Case in an
amount of not less than DM 181 Mio. are available
(whereby evidence that the Borrower will be entitled to
receive prior to September 30, 2001 grants of the
Federal Republic of Germany under the
Investitionszulagengesetz 1996 and
Investitionszulagengesetz 1999 and the estimated
amounts to be received under such grants may be given
by Xxxxxx Xxxxxxxx, the auditors of the Borrower) and
the equity (which may include the operating cash flow
of the Borrower for the four period ended April 30,
1998 evidenced by the Borrower's auditors on the basis
of audited financial statements of the Borrower for
that period provided to the Facility Agent and Project
Costs incurred by the Borrower and paid by the
Shareholder by means of equity and/or subordinated
loans provided to the Borrower by the Shareholder prior
to the date hereof as agreed by the Technical
Consultant and evidenced to the satisfaction of the
Facility Agent) and/or subordinated loans (including
the subordinated loan outstanding in the amount of DM
7,5 Mio.) in an amount of not less than DM 45 Mio. (as
referred to in the Preamble) have been made available
by the Shareholder to the Borrower on the basis of
documentation, which is satisfactory to the Facility
Agent (providing, inter alia, that the interest payable
under such subordinated loans shall not be more than 7
% p.a.), (ii) that the Shareholder has undertaken
towards the Lenders that in case of Construction Cost
Overruns or in case that Total Financing Costs (as set
out in the table on page 3 of the Initial Banking Case)
will be in excess of the amount of DM 89,709,000,
amounts of up to DM 38,8 Mio. (as referred to in the
Preamble) will be made available by it to the Borrower
as equity contributions and/or subordinated loans on
the basis of documentation agreed for the purpose of
(i) above or which is otherwise satisfactory to the
Facility Agent (providing, inter alia, that the
interest payable under such subordinated loans shall
not be more than 7 % p.a.), and (iii) the Stand-By
Equity Funding Guarantee has been provided to the
Facility Agent (on behalf of the Lenders) and the
Borrower;
(i) commitment of C&L to issue the guarantees under the C&L
Ausfallburgschaft in favour of the Lenders;
(j) assignment agreements, substantially in the form of the
Annexes 6, 7 and 8, respectively, in relation to
(i) all present and future claims of the Borrower
under the Material Project Contracts listed in
Annex 5 and all future Material Project
Contracts;
27
(ii) all claims of the Borrower resulting from present
and future delivery contracts concluded by it,
namely from contracts under which the Borrower is
the buyer (e.g. contracts for raw material) as
well as from contracts under which the Borrower
is the supplier (e.g. contracts for pulp
products), provided such contracts have an
expected business value in excess of DM 1 Mio.,
such business value to be determined by the
Facility Agent;
(iii) the present and future payment claims of the
Borrower under the insurances to be effected by
the Borrower pursuant to Article 19.4.1(j) and
Annex 15 lit. A (such insurances being under form
of policies and with reputable insurance and
reinsurance companies acceptable to the Facility
Agent); and
(iv) all payment claims under the hedging agreements
referred to in lit. (g) above concluded by the
Borrower;
(k) the deed of the mortgage (only with rights ranking
ahead of such mortgages being acceptable to the
Facility Agent), substantially in the form of the deed
of Annex 9 A, and the related
"Zweckbestimmungserklarung" (mortgage purpose
declaration), substantially in the form of Annex 9 B;
(l) the pledge agreements, substantially in the form of
Annex 10 A and 10 B, in relation to the shares of the
Shareholder in the Borrower and in Zellstoff- und
Papierfabrik Rosenthal Verwaltungs-GmbH;
(m) the title transfer agreements, substantially in the
form of Annex 11 A and 11 B, in relation to the Movable
Property;
(n) the pledge agreements, substantially in the form of
Annex 12 A, 12 B and 12 C in relation to the Cash
Collateral Accounts referred to in Article 20;
(o) the Security Pooling Agreement, substantially in the
form of Annex 13;
(p) the agreement relating to the Shareholders'
Undertakings, substantially in the form of Annex 14;
(q) a copy of the Original Financial Statements together
with a copy of the auditor's report regarding the
Original Financial Statements and a confirmation of the
auditors of the Borrower that the equity contribution
in kind of the Shareholder (as limited partner) has
been properly assessed in the Original Financial
Statements at the amount of DM 154,800,366;
(r) the report of the Technical Consultant (not to be older
than one month) containing the confirmation that in its
view the Completion Date will be no later than March
31, 2001 and no Construction Cost Overruns have been
identified as of the date of the report; and
(s) the legal opinion of the Borrower's lawyers in the
Federal Republic of Germany, Cleary Xxxxxxxx Xxxxx and
Hamilton, Frankfurt/Main confirming that this
Agreement, the Security Documents (excluding the C&L
Ausfallburgschaft) and the wood procurement agreement
(Holzliefervertrag) concluded with SCA Holz GmbH,
Aschaffenburg dated April 27, 1998, create legally
binding and enforceable obligations on the part of the
Borrower or, as the case may be, of the parties
28
thereto (other than Bayerische Hypotheken- und Wechsel-
Bank Aktiengesellschaft and Vereinsbank in their
various capacities) and that the programs under which
the C&L Ausfallburgschaft and the Government Grants are
granted do not provide for the inadmissible grant of
state aid within the meaning of Article 92 of the
Treaty establishing the European Union and that grants
paid pursuant to such programs are not incompatible
with the common market within the meaning of such
Article 92.
For purposes of sub-paragraph (h) (i) above, promptly after
the initial Drawdown Date the Borrower shall cause an audit
of its operating cash flow for the period May 1, 1998 through
the initial Drawdown Date to be performed by the auditors of
the Borrower and, upon delivery of the results of such audit
to the Facility Agent, shall be entitled to distribute to the
Shareholder from deposits maintained on the Proceeds Account
(notwithstanding the provisions of Article 20.2 (i) and (ii))
the amount of such operating cash flow up to the amount of
the equity and/or the subordinated loans provided by the
Shareholder to the Borrower pursuant to (h) (i) above.
4.2 FURTHER CONDITIONS
The obligations of the Facility Agent and each Lender to
contribute to any Advance are subject to the further
conditions that at the time of the giving of a Drawdown
Request for such Advance:
(a) nothing has come to the knowledge of the Facility Agent
that the representations and warranties set out in
Article 18 are incorrect or will become incorrect
immediately after such Advance has been made;
(b) nothing has come to the knowledge of the Facility Agent
that an Event of Default set out in Article 22 (or a
Potential Event of Default) has occurred and is
continuing;
(c) sufficient partial guarantees (Teilburgschaften) under
the C&L Ausfallburgschaft to cover (together with all
Advances outstanding) 80% of such Advance have been
issued by C&L and all terms and conditions of the C&L
Ausfallburgschaft are met and no event has occurred, as
a result of which C&L, according to the terms of the
C&L Ausfallburgschaft, refuses to allow disbursements
under the Loan Facility and the C&L Ausfallburgschaft
continues to be valid and in full force and effect;
(d) (i) the Technical Consultant in its latest monthly
report has confirmed that in its view the Completion
Date will be no later than March 31, 2001, and (ii) no
Construction Cost Overruns in excess of an amount of DM
50 Mio. will occur by such date or in case of such
excess Construction Cost Overruns the Facility Agent
is satisfied that such Construction Cost Overruns will
be covered by adequate financings;
(e) performance guarantees and advance payment guarantees
of issuers acceptable to the Facility Agent securing
the obligations of the third party debtors under the
Material Project Contracts listed in Annex 5 towards
the Borrower have been issued, whereby any such
guarantee shall be issued prior to the respective first
payment by the Borrower to the respective creditor
under a Material Project Contract becoming due and
shall be submitted to the Facility Agent in form of a
copy;
29
(f) the complete financing of the Project as set forth in
the Preamble and in Article 4.1 (h) remains to be
assured;
(g) evidence that the fees payable by the Borrower pursuant
to Article 25.1, 25.2, 25.3, 25.4 and 25.5 which have
become due at or prior to the requested Drawdown Date
have been paid by the Borrower; and
(h) the Facility Agent has received a Drawdown Request by
the Borrower in accordance with Article 5.2.
4.3 SPECIAL DRAWING CONDITIONS
The obligations of the Facility Agent and each Lender to
contribute to any Advance are subject to the further
conditions that at the time of the giving of a Drawdown
Request for such Advance
(a) in case of drawings under the General Tranche in excess
of DM 453,000,000, the conditions of Article 5.4 are
met; and
(b) in case of drawings under a Special Credit Tranche, the
following conditions have been fulfilled:
- DtA or, as the case may be, KfW has confirmed to
Vereinsbank its preparedness to refinance such
Special Credit Tranche and Vereinsbank has
concluded a refinancing agreement with DtA or KfW,
respectively, in relation to such Special Credit
Tranche;
- a Supplemental Agreement relating to such Special
Credit Tranche has been concluded and has become
effective; and
- Vereinsbank has received evidence that Primary
Liability Undertaking Declarations substantially in
the form of Annex 21 have been issued by the other
Lenders towards DtA or, as the case may be, KfW.
ARTICLE 5
AVAILABILITY AND DRAWDOWN OF GENERAL AND WORKING CAPITAL TRANCHE
5.1 AVAILABILITY OF GENERAL TRANCHE
Subject to the terms and conditions of this Agreement, the
General Tranche may be drawn down by the Borrower in minimum
amounts of DM 10 Mio. or any larger sum which is an integral
multiple of DM 5 Mio. at any time during the General Tranche
Availability Period. Any amount available under the General
Tranche not drawn down on or before the last day of the
General Tranche Availability Period shall automatically be
cancelled, provided, however, that an amount equal to the
Required Balance shall remain available to the Borrower until
February 28, 2001 for one last drawing for the only purpose
of funding the Required Balance (and the General Tranche
Availability Period shall be deemed to be extended for such
purpose until such date). Upon such cancellation, each
Lender's Commitment in the General Tranche shall be reduced
to such Lender's Share of the Advance outstanding under the
General Tranche.
5.2 AVAILABILITY OF WORKING CAPITAL TRANCHE
Subject to the terms and conditions of this Agreement, the
Working Capital Tranche may be drawn down by the Borrower in
minimum amounts of DM 1
30
Mio. or any larger sum which is an integral multiple thereof
at any time during the Working Capital Tranche Availability
Period. Any amount available under the Working Capital
Tranche not drawn down on or before the last day of the
Working Capital Tranche Availability Period shall
automatically be cancelled. Upon such cancellation, each
Lender's Commitment in the Working Capital Tranche shall be
reduced to such Lender's Share of the Advance outstanding
under the Working Capital Tranche.
5.3 DRAWDOWN REQUEST
Notwithstanding the conditions precedent listed in Article
4.2 and 4.3, requests for the drawdown of Advances under the
General Tranche and the Working Capital Tranche may not be
made by the Borrower until the Facility Agent has confirmed
to the Borrower that it has received all of the documents
listed in Article 4.1 and that each is in form and substance
satisfactory to it. In any case, a request for drawdown will
not be regarded as having been duly completed, unless the
following conditions have been satisfied: The Facility Agent
has received, by no later than 1.00 p.m. Munich time on the
fifth Business Day prior to the requested Drawdown Date the
Drawdown Request substantially in the form of Annex 2 having
the following minimum content:
- the proposed Drawdown Date, which must be a Business Day;
- the term of the Interest Period;
- the amount of the Advance, which in the case of the
General Tranche must be DM 10 Mio. or any larger sum
which is an integral multiple of DM 5 Mio., and in the
case of the Working Capital Tranche must be DM 1 Mio. or
any larger sum which is an integral multiple thereof ;
- the specific purpose for which the Advance will be used
by the Borrower.
The Borrower's Drawdown Request cannot be withdrawn; it binds
and obliges the Borrower to accept the requested Advance.
5.4 DRAWINGS UNDER GENERAL TRANCHE IN EXCESS OF DM 453,000,000
In case the General Tranche has been drawn down in an amount
of DM 453,000,000, further drawings up to the amount of 480
Mio. will only be permitted to cover Construction Cost
Overruns or (to the extent drawings have been made to cover
Construction Cost Overruns) the Required Balance, provided
that simultaneously with any such drawing, an amount equal to
the amount of such drawing has been provided to the Borrower
by the Shareholder as further equity and/or subordinated loan
and such amount has been paid into the Proceeds Account.
5.5 LENDER'S PARTICIPATIONS
If the above conditions have been satisfied, the Facility
Agent shall by notice substantially in the form of Annex 3,
notify in writing by no later than three (3) Business Days
prior to the Drawdown Date each of the Lenders of the amount
of the Advance, the Drawdown Date, the Interest Period and
such Lender's participation in the amount of the Advance.
31
5.6 PAYMENT OF PROCEEDS
Upon receipt of the written notice referred to in Article 5.5
each Lender shall, by no later than 10:00 a.m. Munich time on
the Drawdown Date, credit the Account with its participation
in the Advance corresponding to its Lender's Share and the
Facility Agent shall by no later than 12:00 a.m. Munich time
on the Drawdown Date, transfer the amount of the Advance to
the Proceeds Account.
ARTICLE 6
SPECIAL CREDIT TRANCHE
6.1 REFINANCING AGREEMENTS WITH DTA/KFW
In the event of a positive decision of DtA or, as the case
may be, KfW in relation to the granting of a Special Credit,
Vereinsbank (in its capacity as Facility Agent) is hereby
authorized by the Lenders to conclude in its own name (but on
behalf of the Lenders) a refinancing agreement with DtA or,
as the case may be, KfW in relation to such Special Credit.
After the concluding of such agreement, Vereinsbank will
notify the other Lenders thereof, whereupon each Lender shall
issue a Primary Liability Undertaking Declaration towards DtA
or, as the case may be, KfW in relation to such Special
Credit in proportion to its respective Lender's Share. DtA
or, as the case may be, KfW will conclude such refinancing
agreement subject to their General Conditions (e.g.
"Allgemeine Bestimmungen fur Investitionskredite" of KfW,
"Allgemeine Bedingungen fur DtA-Programme" resp. "Richtlinie
der DtA fur DtA-Umweltprogramm" and "Allgemeine Bedingungen
fur ERP-Programme" of DtA) in force at the date of signing of
such refinancing agreements. The General Conditions of DtA
and KfW (versions for final borrowers and versions for credit
institutions) are attached hereto as Annex 22.
6.2 DRAWDOWN UNDER A SPECIAL CREDIT TRANCHE, SUPPLEMENTAL
AGREEMENT
Subject to Article 4.3 (b) above and subject to the receipt
of a Drawdown Request (substantially in the form of Annex 2)
by the Facility Agent, any amounts available to the Borrower
under a Special Credit Tranche may be drawn down by the
Borrower during the Special Credit Tranche Availability
Period. Any such amounts drawn down shall be repayable by the
Borrower and shall bear interest subject to and in accordance
with, the terms and conditions of the Supplemental Agreement
relating to such Special Credit Tranche. Vereinsbank (in its
capacity as Facility Agent) is hereby authorised by the
Lenders to conclude in the name and on behalf of, the Lenders
such Supplemental Agreement with the Borrower.
6.3 PARTICIPATIONS, DISBURSEMENTS
Vereinsbank (in its capacity as Facility Agent) shall notify
without undue delay DtA or, as the case may be, KfW and by
notice, substantially in the form of Annex 3, each Lender of
the amount of the Advance to be drawn down under a Special
Credit Tranche and such Lender's participation in the amount
of such Advance. After DtA or, as the case may be, KfW has
credited the amount drawn down by the Borrower under such
Special Credit Tranche to Vereinsbank in fulfilment of its
obligations under the respective refinancing agreement with
Vereinsbank, Vereinsbank shall disburse such amount to the
Proceeds Account.
32
ARTICLE 7
TERM OF GENERAL TRANCHE AND WORKING CAPITAL TRANCHE
7.1 TERM OF THE GENERAL TRANCHE
The term of the General Tranche under the Loan Facility shall
lapse on September 30, 2013 or on the date of the expiration
of the C&L Ausfallburgschaft, whichever is earlier (the
"General Tranche Final Maturity Date").
7.2 TERM OF THE WORKING CAPITAL TRANCHE
The term of the Working Capital Tranche under the Loan
Facility shall lapse on September 30 of the seventh calendar
year ending after the first Drawdown Date under the Working
Capital Tranche or on the date of the expiration of the C&L
Ausfallburgschaft, whichever is earlier (the "Working Capital
Tranche Final Maturity Date").
ARTICLE 8
INTEREST UNDER GENERAL TRANCHE AND WORKING CAPITAL TRANCHE
8.1 INTEREST RATE
All Advances outstanding under the General Tranche and the
Working Capital Tranche shall bear interest for the
applicable Interest Period payable in arrears at the
Interest Rate which shall be expressed as an annual interest
rate and shall be the sum of the Margin and the Reference
Interest Rate. Save as provided for in Article 8.4 and
Article 8.6, the Reference Interest Rate shall be LIBOR.
8.2 DUE DATES
Accrued interest for each Interest Period shall be paid on
the Interest Payment Date for that Interest Period.
8.3 DETERMINATION OF REFERENCE INTEREST RATE
LIBOR shall be determined by the Facility Agent as the
applicable Reference Interest Rate on the Interest Rate
Determination Day of each Interest Period.
8.4 ALTERNATIVE DETERMINATION OF REFERENCE INTEREST RATE
In the event that the Facility Agent cannot determine the
Reference Interest Rate for a Interest Period in accordance
with the above provisions, then the Facility Agent shall
without undue delay inform the Borrower that the Reference
Interest Rate for such Interest Period shall be the interest
rate reasonably determined by the Facility Agent by
calculating on the Interest Rate Determination Date the
arithmetical mean (rounded up to the next whole (non-
fractional) multiple of 1/16% if necessary) of offers for
deposits in Deutsche Marks obtained from the following banks
in the London Interbank Eurocurrency Market for such
Interest Period:
- Bayerische Vereinsbank Aktiengesellschaft, London Branch
- Deutsche Bank Aktiengesellschaft, London Branch
- Dresdner Bank Aktiengesellschaft, London Branch
33
8.5 BANK BASIS
Interest shall accrue from day to day and be calculated on
the basis of the actual number of days elapsed in the
relevant Interest Period divided by 360.
8.6 ABSENCE OF QUOTATION
In the event that the Reference Interest Rate must be
determined pursuant to Article 8.4 above, and if more than
one Reference Bank fails to supply any rate hereunder, or in
case another market disturbance, as referred to in Article
11.1 below, has occurred, the Reference Interest Rate shall
be determined on a Substitute Basis as provided for in
Article 11 below.
8.7 CERTIFICATION
The Facility Agent shall without undue delay inform the
Lenders and the Borrower of the Interest Rate it has
determined for each Interest Period and the interest payable
in relation to each Advance. Each determination of the
Interest Rate by the Facility Agent hereunder shall, in the
absence of manifest error, be conclusive and binding on the
Borrower and the Lenders.
8.8 DURATION OF INTEREST PERIODS
(a) Prior to March 31, 2001, the term of each Interest
Period in relation to the Advances under the General
Tranche and the Working Capital Tranche shall be three
or six months at the option of the Borrower. In such
case, the Borrower may select an Interest Period for an
Advance in either the relevant Drawdown Request for
such Advance or, if the Advance has already been
borrowed, a notice to be received by the Facility Agent
not later than 10.00 a.m. (Munich time) on the fifth
Business Day prior to the commencement of that Interest
Period. If the Borrower fails to specify the term of an
Interest Period this term shall be six months. The
first Interest Period with respect to an Advance shall
commence on the first Drawdown Date and, subject to
Article 8.9, shall end on the Interest Payment Date of
such Interest Period. Each subsequent Interest Period
shall commence upon expiry of the previous Interest
Period. Notwithstanding the foregoing, the first
Interest Period for each Advance under the General
Tranche or, as the case may be, the Working Capital
Tranche other than the first Advance shall end on the
same day as the current Interest Period for any
previous Advance under the General Tranche or, as the
case may be, the Working Capital Tranche. On the last
day of those Interest Periods, those Advances shall be
consolidated and treated as one Advance. If any
Interest Period in effect on March 31, 2001 would end
on a day which is later than March 31, 2001, such
Interest Period shall automatically end on March 31,
2001.
(b) After March 31, 2001, the term of each Interest Period
in relation to the Advances under the General Tranche
and/or the Working Capital Tranche shall be six months
provided, however, that any such Interest Period shall
always end on a Repayment Date. If the Interest Period
prior to the General Tranche Final Maturity Date would
end on a day which is later than the General Tranche
Final Maturity Date, such Interest Period shall
automatically end on the General Tranche Final Maturity
Date.
34
(c) In accordance with the determination of the Facility
Agent pursuant to Article 12.2, the Interest Periods
in relation to any amounts in arrears (as referred to
in Article 12.2) shall be of one or three months.
8.9 NON-BUSINESS DAY
In the event that an Interest Payment Date would fall on a
day not being a Business Day, then the following Business Day
shall be the Interest Payment Date and the Interest Period
shall be extended accordingly, unless the Interest Payment
Date would therefore fall in the next calendar month, in
which case the Interest Payment Date shall be the immediately
preceding Business Day and the Interest Period shall be
shortened accordingly.
8.10 NOTIFICATION
The Facility Agent shall notify the Borrower and the Lenders
of the duration of each Interest Period promptly after
ascertaining its duration.
ARTICLE 9
REPAYMENT OF GENERAL TRANCHE AND WORKING CAPITAL TRANCHE, SCHEDULE
9.1 ORDINARY REPAYMENT OF ADVANCE UNDER GENERAL TRANCHE
The Borrower shall repay the Advance outstanding under the
General Tranche and under the Special Credit Tranches, if
any, to the Account in semi-annual increasing repayment
instalments (comprising amounts for the repayment of the
General Tranche and the Special Credit Tranches as set out
below) in such percentages in relation to the principal
amount outstanding at the end of the General Tranche
Availability Period as are set out in the Percentage
Instalment Schedule attached hereto as Annex 19. The first
repayment instalment shall become due on March 31, 2001 and
all subsequent repayment instalments shall become due on each
September 30 and March 31 following March 31, 2001 until the
General Tranche Final Maturity Date. From each repayment
instalment effected by the Borrower hereunder, all amounts
having become due under the Special Credit Tranches shall be
deducted first and the remainder shall be applied for the
repayment of the Advance outstanding under the General
Tranche. Each repayment instalment made under this Agreement
shall reduce each Lender's participation in the Advance
outstanding under the General Tranche and the Special Credit
Tranche in proportion to the application of such repayment
set out in the previous sentence. The final repayment
instalment shall be paid together with all such other sums as
may be due pursuant to the provisions of this Agreement on
the General Tranche Final Maturity Date.
9.2 REPAYMENT SCHEDULE
The Facility Agent will forward to the Borrower a Repayment
Schedule setting out the amount of the repayment instalments
and their respective payment dates in accordance with Article
9.1 and the Percentage Instalment Schedule attached hereto as
Annex 19 at the latest by March 15, 2001. The Repayment
Schedule shall be amended by the Facility Agent after the
Borrower has effected extraordinary repayments in accordance
with Article 9 4. or prepayments in accordance with Article
10, and the Facility Agent shall inform the Borrower and the
other Lenders thereof without delay. The Repayment Schedule
shall be an integral part of this Agreement and be binding
upon the Borrower with the exception of manifest errors.
35
9.3 ORDINARY REPAYMENT OF ADVANCE UNDER WORKING CAPITAL TRANCHE
The Borrower shall repay the Advance outstanding under the
Working Capital Tranche to the Account in four equal annual
repayment instalments. The first repayment instalment shall
become due on September 30 of the fourth calendar year ending
after the first Drawdown Date under the Working Capital
Tranche, and all subsequent repayment instalments shall
become due on September 30 of the next three consecutive
years. Each repayment instalment made under this Agreement
shall reduce each Lender's participation in the Advance
outstanding under the Working Capital Tranche in proportion
to such repayment. The final repayment instalment shall be
paid together with all interest having become due under the
Working Capital Tranche on the Working Capital Tranche Final
Maturity Date.
9.4 EXTRAORDINARY REPAYMENT
(a) Notwithstanding the Borrower's repayment obligation
pursuant to Article 9.1 the Borrower shall use the
amounts referred to in the first sentence of Article
20.2 (b) first for the (partial) repayment of the
Advance under the Working Capital Tranche outstanding
and, after such tranche has been repaid in full, for
the (partial) repayment of the Advance under the
General Tranche outstanding. Any such payment shall be
effected on any such Repayment Date on which amounts
are available for such extraordinary repayment on the
Proceeds Account. Each such repayment shall reduce each
Lender's participation in the Advance outstanding under
the Working Capital Tranche and/or the General Tranche
in proportion to such repayment. Any such repayment
shall be applied against the repayment instalments of
the General Tranche (other than repayment instalments
becoming due under any Supplemental Agreements) and/or
the Working Capital Tranche becoming due under Article
9 above in inverse order of maturity. The Repayment
Schedule referred to in Article 9.2 shall be amended by
the Facility Agent accordingly and shall be submitted
to the Borrower and the Lenders after it has been so
amended.
(b) Any amounts remaining in the Investment Reserve Account
after all Project Construction Costs have been paid
shall be used by the Borrower exclusively for the
(partial) repayment of the Advance under the General
Tranche outstanding. Any such payment shall be effected
on the next Repayment Date after all such Project
Construction Costs have been paid by the Borrower. Any
such repayment shall reduce each Lender's participation
in the Advance outstanding under the General Tranche in
proportion to such repayment. Any such repayment shall
be applied against the repayment instalments of the
General Tranche (other than repayment instalments
becoming due under any Supplemental Agreements) and/or
the Working Capital Tranche becoming due under Article
9 above in inverse order of maturity. The Repayment
Schedule referred to in Article 9.2 shall be amended by
the Facility Agent accordingly and shall be submitted
to the Borrower and the Lenders after it has been so
amended.
9.5 NON-BUSINESS DAY
In the event that a Repayment Date would fall on a day not
being a Business Day, then the following Business Day shall
be the Repayment Date.
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ARTICLE 10
PREPAYMENT
10.1 VOLUMTARY PREPAYMENT
The Borrower may, by giving not less than ten (10) days'
prior notice to the Facility Agent, prepay any Advance under
the General Tranche or, as the case may be, the Working
Capital Tranche of the Loan Facility on the last day of an
Interest Period, or, as the case may be, on any Repayment
Date in whole or in part (but, if in part, in an integral
(non-fractional) multiple of DM 10 Mio.). Any such prepayment
shall reduce each Lender's participation in the Advance
outstanding under the Loan Facility in proportion to such
prepayment and shall be applied against the repayment
instalments becoming due under Article 9 above in inverse
order of maturity.
10.2 ADDITIONAL RIGHT OF PREPAYMENT
If:
(a) the Borrower is required to pay to a Lender any
additional amounts under Article 17 (Taxes); or
(b) the Borrower is required to pay to a Lender any amount
under Article 16 (Increased costs);
then, without prejudice to the obligations of the Borrower
under those provisions and the provisions under Article 12.4,
the Borrower may, whilst the circumstances continue, serve a
notice of prepayment on that Lender through the Facility
Agent. On the date specified in such notice, which shall be
at least thirty (30) Business Days after the date of service
of the notice, the Borrower shall prepay that Lender's Share
of the Advance provided that such prepayment is made together
with any amount payable by the Borrower under Article 12.4
(iii), and such Lender's Lender's Commitment shall be
terminated.
10.3 MISCELLANEOUS PROVISIONS
(a) Any notice of prepayment under this Agreement is
irrevocable. The Facility Agent shall notify the
Lenders promptly of receipt of any such notice.
(b) All prepayments under this Agreement shall be made
together with accrued interest on the amount prepaid
and all other amounts (if any) owing by the Borrower to
such Lender.
(c) No prepayment or cancellation is permitted except in
accordance with the express terms of this Agreement.
(d) No amount prepaid pursuant to the provision of Article
10 or extraordinarily repaid pursuant to the provision
of Article 9.4 of this Agreement may subsequently be
reborrowed.
37
ARTICLE 11
SUBSTITUTE BASIS
11.1 MARKET DISTURBANCE
Notwithstanding anything to the contrary herein contained, if
at any time prior to the commencement of an Interest Period:
(a) none, or only one, of the Reference Banks furnishes a
quotation to the Facility Agent for the purpose of
determining the applicable interest rate in accordance
with Article 8.4; or
(b) the Facility Agent (after consultation with the
Reference Banks) shall have determined (which
determination shall be conclusive and binding upon all
parties hereto) that by reason of circumstances
affecting the London Interbank Eurocurrency Market
generally adequate and fair means do not exist for
ascertaining the rate of interest applicable during
such Interest Period; or
(c) the Facility Agent shall have received written
notification
(i) from Majority Lenders that deposits in Deutsche
Marks and of equal duration to that of such
Interest Period are not readily available in the
London Interbank Eurocurrency Market in
sufficient amounts in the ordinary course of
business to fund their participations in such
borrowing during such Interest Period; or
(ii) from Majority Lenders that, by reason of
circumstances affecting the London Interbank
Eurocurrency Market generally, the cost to them
of deposits obtained in such Market to fund their
participations in such borrowing is in excess of
LIBOR for the relevant Interest Period;
the Facility Agent shall promptly give written notice (the
"Suspension Notice") of such determination or notification to
the Borrower and to each of the Lenders.
11.2 SUSPENSION
During the period of thirty days after the giving of such
Suspension Notice, each Lender, the Facility Agent and the
Borrower shall negotiate in good faith upon an alternative
basis (a "Substitute Basis") for the Advance. Such Substitute
Basis may (without limitation) include an alternative
Interest Period and alternative rate of interest for the
Lenders' participation in the Advance but shall include a
margin above the cost of funding each Lender's participation
in the Advance equivalent to the Margin. lf such Substitute
Basis is agreed between the Borrower and the Lenders, it
shall apply in accordance with its terms. lf such Substitute
Basis is not agreed between the Borrower and the Lenders by
the end of such thirty days the respective Advance must not
be drawn or, as the case may be, the Loan Facility shall be
cancelled forthwith.
11.3 REVIEW
So long as any Substitute Basis is in force, the Facility
Agent, in consultation with the Borrower and each Lender
certifying a Substitute Basis, shall from time to time, but
not less than monthly, review whether or not the
circumstances referred to in Article 11.1 above still prevail
with a view to returning to the normal provisions of this
Agreement.
38
ARTICLE 12
DEFAULT INTEREST AND INDEMNIFICATION
12.1 DEFAULT
In the event that any outstanding payments pursuant to this
Agreement are not made or are only partly made by their due
dates, the Borrower shall in respect of such payments and
without further notice be in default with respect to such
payments.
12.2 DEFAULT INTEREST RATE
Without prejudice to any further rights of the Lenders, in
particular Article 12.4, the Borrower shall for the period an
amount is in default;
(a) pay a default interest rate for all arrears of
principal sums and any other sums in arrears pursuant
to the provisions of this Agreement (with the exception
of interest), in the amount of 1 % per annum above the
Interest Rate determined by the sum of the applicable
LIBOR rate for the relevant Interest Period and the
Margin, or as the case may be, the applicable Reference
Interest Rate and the Margin; and
(b) make a liquidated damages payment for all arrears of
interest in the amount of the sum of 1% per annum above
the LIBOR rate applicable to the relevant Interest
Period.
In the event that the Borrower shall during the term of an
Interest Period default in the payment of any amount due
pursuant to the provisions of this Agreement, then the
applicable LIBOR rate referred to above, shall correspond
with the LIBOR rate determined pursuant to Article 8 until
the end of such Interest Period. Upon expiry of such
Interest Period the term of subsequent Interest Periods for
the amounts in arrears shall be determined by the Facility
Agent from time to time, provided however, that any such
Interest Period shall not exceed three months. The LIBOR rate
applicable to such further Interest Periods shall be
determined by the Facility Agent pursuant to Article 8.
Every amount in arrears shall for the purposes of this
Agreement be treated as a drawndown Advance, and accordingly
the term "Advance" shall include any amount in arrears.
12.3 FIRST DEMAND PAYMENT
All damages and default interest payments shall be made by
the Borrower without undue delay upon first demand of the
Facility Agent.
12.4 INDEMNITY
The Borrower shall compensate the Lenders for any loss,
damage, costs and outlays (including losses of Margin or
losses resulting from refinancing incurred by the Lenders in
the provision or maintenance of the Advance for the relevant
Interest Periods) which have been incurred by the Lenders
because:
(i) the Borrower has failed to pay a sum due pursuant to
this Agreement on the due date; or
39
(ii) an Event of Default described in the provisions of
Article 22 has occurred, or
(iii) the Borrower has made payments on a day which is not an
Interest Payment Date or, as the case may be, a
Repayment Date; or
(iv) the drawdown of the Advance requested by the Borrower
cannot be made because the Borrower has failed to
satisfy a condition precedent or the Borrower refuses
to accept the Advance.
In the case of (iii) and (iv) above, the Borrower shall upon
request by the Facility Agent, pay to each Lender through the
Facility Agent, instead of the losses and damages calculated
pursuant to the above provisions, the amount by which (a) the
interest which would have been payable on such principal
payment or, as the case may be, such amount not having been
drawn down by the Borrower hereunder through the next
Interest Payment Date exceeds (b) the amount of interest
which in the reasonable opinion of such Lender would have
been payable in respect of a deposit in Deutsche Marks and
equal to the amount placed by it with a prime bank in London
for a period starting on the third Business Day following the
date of the proposed borrowing or of such receipt, as the
case may be, and ending on the last day of the Interest
Period then in effect.
ARTICLE 13
ACCOUNTS
13.1 LENDERS' ACCOUNTS
Each of the Lenders shall in its books of account, in
accordance with common banking practice, maintain an account
for the Borrower from which the principal sum, the amount of
interest and other payments owed by the Borrower to such
Lender pursuant to this Agreement can be determined.
13.2 CONTROL ACCOUNT
The Facility Agent shall in its books of account maintain a
control account from which can be determined;
(i) the sum total of the outstanding Advance and each
Lender's Share therein; and
(ii) the sum total of principal, interest and other payments
owed to the Lenders pursuant to this Agreement, as well
as each Lender's Share therein; and
(iii) the sum total of payments received from the Borrower
and the Share of each Lender therein.
Whenever an entry is made in the control account, the
Facility Agent shall prepare an account statement for the
control account and shall provide such statement to each
Lender and the Borrower without undue delay.
40
13.3 ACCOUNTS AS EVIDENCE
For the purposes of judicial, arbitration or other
proceedings in relation to this Agreement the above account
statements shall, in the absence of manifest error, be
conclusive and binding between the parties.
ARTICLE 14
PAYMENTS
14.1 FUNDS, PLACE AND CURRENCY
All payments owed by the Borrower pursuant to this Agreement
plus value added tax, if applicable, shall be made in
Deutsche Marks in immediately available funds and by no later
than 10 a.m. (Munich time) on each due date to the Account,
unless a payment has to be effected to the Proceeds Account.
14.2 NO SET-OFF, COUNTERCLAIM OR RETENTION
All payments to be made shall be made free and clear of
deductions on account of Taxes (unless the Borrower is
compelled by law to make payment subject to Taxes), and to
the exclusion of any set-off, counterclaim, retention or
lien, restriction or condition.
14.3 DISCHARGING EFFECT
The Borrower shall be released from its obligation to make
any particular payment only once the paid sum has been
unconditionally credited to the Account and only in so far as
the amount paid is sufficient to satisfy the Borrower's
payment obligations on any date at which payment is due
pursuant to this Agreement.
14.4 APPROPRIATION
In the event that the Borrower makes a payment which is
insufficient to satisfy all of its payment obligations on a
date on which such payment is due pursuant to this Agreement,
any such payment shall be applied first against any fees,
costs and expenses, then against any amount of interest, then
against any amount of principal having become due and payable
under a Special Credit Tranche and then against any amount of
principal having become due and payable under the General
Tranche and the Working Capital Tranche of the Loan Facility.
Any contrary instruction given by the Borrower shall have no
effect.
14.5 DISTRIBUTION
The Facility Agent shall, without prejudice to other
provisions of this Agreement, distribute without delay the
appropriate share of principal, interest and other payments
owed pursuant to this Agreement to the relevant individual
Lenders in their respective Lender's Shares, as they are
received by the Facility Agent.
41
ARTICLE 15
ILLEGALITY
lf any change in or introduction of any law, regulation or treaty,
or any change in the official interpretation or application thereof
(hereinafter referred to as "Legal Changes"), shall make it unlawful
or contrary to any regulation for any Lender to make available or
fund or maintain its Lender's Commitment or its participation in any
outstanding Advance or to give effect to its obligations as
contemplated hereby, the following provisions shall apply:
15.1 Such Lender may terminate the totality of its Lender's
Commitment and its participation in the outstanding Advance
by notice to the Facility Agent effective as from the date of
which performance becomes unlawful or contrary to any
regulation or, as far as this is legally possible pursuant to
the Legal Changes, at the end of the applicable Interest
Periods such notice stating exactly which contractual
obligations became illegal, the date on which such illegality
will arise and which Legal Changes have given rise to the
illegality. The Facility Agent shall without undue delay upon
receipt of such notice of termination inform all other
Lenders, the Borrower and C&L.
15.2 The Borrower shall repay or prepay (as the case may be) such
Lender's participation in the outstanding Advance plus
accrued interest and any other sums outstanding pursuant to
this Agreement, at the end of the applicable Interest Period
or in the event termination is effective pursuant to Article
15.1 before the end of an Interest Period at such earlier
date (unless the Borrower is notified of termination after
such earlier date in which case payment shall be made within
three (3) Business Days of the Borrower's receipt of such
notice). Upon effective termination all obligations of the
terminating Lender pursuant to this Agreement shall end and
the sum total of the Loan Facility shall be reduced by the
amount of the terminated Lender's Commitment.
15.3 If any Lender (through the Facility Agent) gives notice to
the Borrower pursuant to Article 15.1 requiring prepayment,
then, but without prejudice to the obligations of the
Borrower to effect such prepayment pursuant to Article 15.2,
the Borrower, the Facility Agent and such Lender shall
forthwith commence negotiations in good faith with a view to
agreeing on terms (which shall not in any way be prejudicial
to such Lender ) for making such Lender's participation in
the Advances available from another jurisdiction or for
restructuring its participation in the Advances on a basis
which is not so unlawful, provided that neither the Facility
Agent nor such Lender shall be under any obligation to
continue such negotiations if terms have not been agreed
within 30 days after the date of such Lender's notice.
ARTICLE 16
INCREASED COSTS
If, as a result of Legal Changes (including, for the purposes of
this Article 16, rules, orders or directives in relation to required
reserves, special deposits, liquidity or capital adequacy
requirements, any requirement relating to the manner in which the
Lender is required to allocate financial resources to provide for
the making of or in relation to any Advance or any other form of
banking or monetary controls (whether or not having the force of
law)) promulgated by a governmental authority that are of general
applicability, a Lender at any time in the future in relation to its
Lender's Commitment or its participation in the outstanding Advance
made to the Borrower,
42
(a) suffers an increase of the cost of making or funding the
Advance or of maintaining its Lender's Commitment hereunder;
or
(b) suffers a reduction of any amount payable to it or to the
Facility Agent or of the effective return; or
(c) makes any payment, either directly or through the Facility
Agent, or forgoes any interest or other return on or
calculated by reference to any amount received or receivable
by it from the Borrower hereunder;
(collectively referred to as "Increased Costs") then, without
prejudice to the provisions of Article 17, the following provisions
shall apply:
16.1 Such Lender shall have the right, upon giving notice to the
Facility Agent, to request payment of a sum compensating it
for its Increased Costs. Such notice shall state in
reasonable detail the reasonably determined amount of such
Increased Costs, the date upon which such Increased Costs
were or began to be incurred and the Legal Changes which led
to the Increased Costs. The Facility Agent shall upon receipt
of such notice without undue delay inform the Borrower of the
contents of such notice.
16.2 The Borrower shall no more than ten days after receiving the
notice referred to in Article 16.1 pay all of the Lender's
substantiated Increased Costs incurred prior to receipt of
the said notice.
16.3 If any Lender (through the Facility Agent) gives notice to
the Borrower pursuant to Article 16.1 demanding compensation,
then, but without prejudice to the Borrower to pay such
compensation, the Borrower, the Facility Agent and such
Lender shall forthwith commence negotiations in good faith
with a view to agreeing on terms (which shall not in any way
be prejudicial to such Lender) for making such Lender's
participation in the Advances available from another
jurisdiction which will result in no such compensation being
payable or for finding a bank or financial institution in
substitution for such Lender, provided that neither the
Facility Agent nor such Lender shall be under any obligation
to continue such negotiations if terms have not been agreed
within 30 days after the date of such Lender's notice.
ARTICLE 17
TAX GROSS-UP, TAX RECEIPTS
In the event that the Borrower or the Facility Agent is obliged by
law to deduct or withhold Taxes, the Borrower shall
(i) pay any such Taxes by their due date and, no less than thirty
(30) days after such payment provide to the Facility Agent
the original or a certified copy of the receipt of the
relevant authority evidencing the payment to such authority
of all amounts so required to be deducted or withheld; and
(ii) indemnify and keep harmless the Lenders in relation to all
such Taxes or any additional funding costs they may incur as
a result of the deduction or withholding of such Taxes; and
(iii) make such additional payments to Lenders not having a
permanent establishment within the Federal Republic of
Germany with which payments hereunder are effectively
connected as may be necessary in order that the net amount
remaining after the said deduction or withholding,
corresponds with the sum due to be paid.
43
ARTICLE 18
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to each of the Facility
Agent and the Lenders that on the date of this Agreement:
(a) STATUS
The Borrower is a partnership with limited liability under
the laws of the Federal Republic of Germany, duly organised
and validly existing under the laws of the Federal Republic
of Germany, has the capacity to sue and be sued in its own
name and has the power to own its property and assets and
carry on its business as it is now being conducted.
(b) POWERS AND AUTHORITY
The Borrower has the authority to enter into and execute this
Agreement, the Security Documents and the Material Project
Contracts, to accept the Loan Facility and to perform its
obligations pursuant to this Agreement, and in this regard
all necessary decisions and resolutions of the general
managers (Geschaftsfuhrer) of the Borrower and its
shareholders have been taken.
(c) LEGAL VALIDITY
This Agreement, the Security Documents, and the Material
Project Contracts create legally valid and binding
obligations of the Borrower and the other parties thereto
(other than Bayerische Hypotheken- und Wechsel-Bank
Aktiengesellschaft and Vereinsbank in their various
capacities), enforceable in accordance with the terms and
conditions of the respective agreements and such agreements
are in proper form for enforcement in the courts of the
Federal Republic of Germany, subject to applicable
bankruptcy, reorganisation, insolvency, moratorium or other
laws affecting creditor's rights generally from time to time
in effect.
(d) NON-CONFLICT
The entry into and the execution and performance of this
Agreement, the Security Documents and the Material Project
Contracts do not conflict with the Borrower's or, as the case
may be, the Shareholder's by-laws and resolutions of general
managers (Geschaftsfuhrer) or shareholders, and do not
violate any law, directive, order, decree, arbitral award,
judgement, or any agreement or document to which the Borrower
or, as the case may be, the Shareholder is a party, in a
manner that would have a material adverse effect on the
ability of the Borrower or, as the case may be, the
Shareholder to discharge their respective obligations under
the above agreements.
(e) NO DEFAULT
No event has occurred which constitutes an event of default
under or in respect of any agreement or document to which the
Borrower is a party or by which the Borrower may be bound
(including inter alia, this Agreement) or which, with the
giving of notice or lapse of time might constitute an event
of default under or in respect of any such agreement or
document and in either case which might have a material
adverse effect on the ability of the Borrower to perform or
discharge its obligations hereunder.
44
(f) CONSENTS
All material authorisations, approvals, consents, licences,
exemptions, filings, registrations, notarisations and other
matters, official or otherwise, required for the entry into,
performance, validity and enforceability of this Agreement
and the transactions contemplated hereby and (to the extent
they can at the time be obtained or effected) for the
realisation of the Project have been obtained by the Borrower
or have been effected and are in full force and effect.
(g) INFORMATION TRUE
To the best of the Borrower's knowledge, the factual
information and factual amounts in the project memorandum
dated October 1997 and in the Initial Banking Case were at
the dates thereof true and accurate in all material aspects.
Furthermore the Borrower has not concluded as of the date of
this Agreement any agreement which would qualify as a
Material Project Contract which is not listed in Annex 5.
(h) FINANCIAL STATEMENTS
The Original Financial Statements are complete and correct
and convey a complete and correct picture of the financial
position of the Borrower as at that date. The Original
Financial Statements were prepared in accordance with all
applicable accounting and auditing principles.
(i) LITIGATION
No arbitration, litigation or other proceedings against the
Borrower the result of which, taken as a whole, could be
substantially detrimental to the financial condition or the
business activities of the Borrower, are to the best of the
Borrower's knowledge, currently in progress or threatened
against the Borrower.
(j) NO MATERIAL ADVERSE CHANGE
The financial condition of the Borrower has not deteriorated
in comparison with the Original Financial Statements in a
manner which has or could have a material adverse effect on
the ability of the Borrower to perform its obligations
pursuant to this Agreement.
(k) NO ENCUMBRANCES
Unless permitted by this Agreement, and with the exception of
Permitted Encumbrances, no Encumbrance on any asset or future
asset, or the present or future revenues of the Borrower
exists and the execution and performance of this Agreement
will not result in the creation of such Encumbrances.
(l) PARI PASSU RANKING
The obligations of the Borrower hereunder rank as to priority
of payment at least pari passu with all its other unsecured
and unsubordinated obligations, except those mandatorily
preferred by law.
(m) TAX LIABILITIES
The Borrower has complied in all material respects with all
Taxation laws in all jurisdictions in which it is subject to
Taxation, has paid all Taxes due and payable by it and no
material claims are being asserted against it with respect to
Taxes, except to the extent the Borrower is contesting the
same in good
45
faith or where failure to pay or comply would not have a
material adverse effect; and all amounts payable by the
Borrower hereunder may be made free and clear of and without
deduction for or on account of any Taxes.
(n) STAMP DUTIES
No stamp or registration duty or similar taxes or charges are
payable (or, if payable, all such duties have been paid) in
the Federal Republic of Germany in respect of this Agreement.
(o) NO STATE AID
The C&L Ausfallburgschaft and the Government Grants are
legally valid and do not involve the grant of inadmissible
state aid within the meaning of Article 92 of the Treaty
establishing the European Economic Community, and are not
incompatible with the common market within the meaning of
such Article 92, provided that the grants distributed
thereunder do not in total exceed 35% of the value of the
investments subsided with such grants, and that the approval
of the Investitionszulagennetz 1999 is given by the EU
commission.
(p) MATERIAL PROJECT CONTRACTS
The contracts compiled in the list of Material Project
Contracts as listed in Annex 5 hereof are all the contracts
relating to the design, development and construction of the
Project concluded by the Borrower prior to the date hereof
with a business value of more than DM 3,0 Mio.
(q) VALIDITY OF TREUHANDVERTRAG
The acquisition agreement concerning the shares of Zellstoff-
und Papierfabrik Rosenthal GmbH concluded with the
Treuhandanstalt, Anstalt des offentlichen Rechts, dated July
3, 1994 (the "Treuhandvertrag") is legally valid and binding
in all respects and the Borrower has complied with all
obligations and undertakings in the Treuhandvertrag assumed
by it.
(r) NO ENVIRONMENTAL CLAIMS
No Environmental Claim is pending or has been made or
threatened against the Borrower or any occupier in respect of
any of their respective properties or any of their respective
officers in their capacity as such that could reasonably be
expected to have a material adverse effect on the ability of
the Borrower to discharge its obligations hereunder.
(s) NO RELEVANT SUBSTANCES
No relevant substance has been deposited, disposed of, kept,
treated, imported, exported, transported, processed,
manufactured, used, collected, sorted or produced at any
time, or is present in the environment (whether or not on
property owned, leased, occupied or controlled by the
Borrower) in circumstances which are likely to result in an
Environmental Claim against the Borrower that could
reasonably be expected to have a material adverse effect on
the ability of the Borrower to discharge its obligations
hereunder.
(t) NO WINDING-UP
The Borrower has not taken any corporate action nor to the
best of its knowledge have any other steps been taken or
legal proceedings been started or threatened against it for
its winding-up, dissolution, administration or re-
46
organisation or for the appointment of a receiver,
administrator, administrative receiver, trustee, liquidator
or similar officer of it or of any or all of its assets or
revenues.
(u) REPETITION
Each of the representations and warranties of this Article 18
shall be deemed to be repeated by the Borrower on each
Drawdown Date. Each of the representations and warranties
under Article 18 lit. (a), (b), (c), (o) and (s) will be
correct and complied with so long as any sum remains to be
lent or remains payable by the Borrower under this Agreement
as if repeated then by reference to the then existing
circumstances.
ARTICLE 19
COVENANTS
The Borrower hereby covenants in relation to each Lender, and
insofar as applicable, covenants to bring about that:
19.1 FINANCIAL INFORMATION
So long as any amount is available under this Agreement or
the Loan Facility or any part thereof remains outstanding or
any other sum is payable pursuant to this Agreement, the
Borrower undertakes the following:
(a) The Borrower shall provide the Facility Agent in
sufficient copies for each of the Lenders with the
following statements, prepared in compliance with all
relevant legal and professional requirements and
according to generally accepted accounting principles:
(i) as soon as available, but in any event no later
than ninety (90) days after the end of each
financial year, the audited fiscal year-end
financial statements, including the balance
sheet, the profit and loss account and the
certified auditor's report of the Borrower (which
auditor shall only be appointed by the Borrower
with the consent of the Facility Agent) together
with a confirmation of such auditor that all
transactions effected by the Borrower with
Related Parties in such financial year are in
compliance with its negative undertaking pursuant
to Article 19.4.2 (g);
(ii) as soon as available, but in any event no later
than sixty (60) days after the end of each fiscal
half-year, its half-year reports, including the
balance sheet and the profit and loss account.
The aforementioned financial statements, balance sheets
and profit and loss accounts will be prepared in
accordance with the same principles as the Original
Financial Statements or, in the case of a divergence
therefrom, will be accompanied by a statement
explaining each changed accounting principle and its
effects. All financial information shall be in English
or submitted to the Facility Agent in an English
translation certified by the Borrower as being true and
accurate.
(b) Together with the financial information to be provided
in accordance with sub-paragraph (a) above, the
Borrower shall submit to the Facility Agent the cash
flow projections concerning the Borrower for the period
ending on the General Tranche Final Maturity Date
prepared by the
47
Borrower and certified by the chief financial officer
of the Borrower to give a true picture of the expected
future cash flows of the Borrower.
(c) The Borrower shall submit to the Facility Agent as soon
as available, but in any event no later than 15
(fifteen) days after the end of each calendar quarter a
management report containing operational evaluations
and statistics of actual date, in respect of the
Borrower.
Forthwith upon receiving a request to that effect, the
Borrower will provide to the Facility Agent such additional
financial information or other information relevant to this
Agreement (including evidence with respect to the specific
application of any Advance drawn down hereunder) as the
Facility Agent or a Lender through the Facility Agent may
from time to time reasonably request.
19.2 OTHER INFORMATION
So long as any amount is available under this Agreement or
the Loan Facility or any part thereof remains outstanding or
any other sum is payable pursuant to this Agreement, the
Borrower will promptly provide to the Facility Agent:
(a) all notices or other documents in relation to the
financial condition or business of the Borrower that
are made publicly available;
(b) details of any material litigation, arbitration or
administrative proceedings, which affect the Borrower
as soon as the same are instituted to the knowledge of
the Borrower; and
(c) copies of all licences, permits and approvals of all
governmental authorities in relation to the Project or
parts of the Project (i.e. concerning a phase of
construction) and the operation of the Mill.
In addition to (a) and (b) above, the Borrower shall inform
the Facility Agent during the Construction Period on a
monthly basis about the development of the works related to
the Project and adherence to the time schedule set out in the
Banking Case, in particular, the Borrower shall inform the
Facility Agent, if a substantial delay or obstacle or an
event, which might result in Construction Cost Overruns,
occurs or threatens to occur.
19.3 FINANCIAL COVENANT
So long as any amount is available under this Agreement or
the Loan Facility or any part thereof remains outstanding or
any other sum is payable pursuant to this Agreement the
Annual Debt Service Cover Ratio shall not fall below 1.1. For
the purpose of calculating the Annual Debt Service Cover
Ratio under this Article 19.3 the Available Cash Flow shall
be increased by any balances on the Debt Service Reserve
Account or on any other cash account of the Borrower (other
than the Proceeds Account) pledged to the Lenders, the amount
available under the Stand-By Equity Funding Guarantee and any
funds having been unconditionally and irrevocably deposited
as equity or pursuant to a subordinated loan agreement by the
Shareholder into the Proceeds Account.
48
19.4 FURTHER UNDERTAKINGS
19.4.1 POSITIVE UNDERTAKINGS
(a) PURPOSE
The Borrower shall use the Loan Facility exclusively
for the purposes set out in Article 3.
(b) COMPLETION OF PROJECT
The Borrower undertakes that the Completion Date will
not take place after March 31, 2001 and that the
Performance Criteria will be achieved within a period
of 24 months after the Completion Date.
(c) PARI PASSU RANKING
The Borrower undertakes for so long as any amount
available under this Agreement is outstanding or the
Loan Facility or any part thereof remains outstanding
or any other sum is payable pursuant to this Agreement
that its obligations pursuant to this Agreement will
rank as to priority of payments at least pari passu
with all other unsecured and unsubordinated obligations
of the Borrower, except those mandatorily preferred by
law.
(d) MAINTENANCE OF LEGAL VALIDITY
The Borrower shall obtain, comply in all material
respects with the terms of and do all that is necessary
to maintain in full force and effect all
authorisations, approvals, licences and consents
required in or by the laws and regulations of the
Federal Republic of Germany to enable it lawfully to
enter into and perform its obligations under this
Agreement and the Material Project Contracts in all
material respects and to ensure the legality, validity,
enforceability or admissibility in evidence in the
Federal Republic of Germany of this Agreement.
(e) NOTIFICATION OF DEFAULT
The Facility Agent shall without undue delay be
notified by the Borrower of the occurrence of any Event
of Default as described in Article 22, and the Borrower
shall not later than thirty (30) days after the end of
each fiscal quarter provide the Facility Agent with a
certificate confirming that no Event of Default as
described in Article 22 has occurred and is continuing.
(f) INFORMATION ON PERMITTED ENCUMBRANCES
The Borrower shall provide the Facility Agent with a
list of any Encumbrances being Permitted Encumbrances,
excluding any Encumbrances which are created by
operation of law or in the ordinary course of business,
which exist at the date of signing this Agreement, and
shall ensure that the Facility Agent shall be informed
of any such Permitted Encumbrances as soon as they may
be granted in favour of any third party creditor.
49
(g) COMPLIANCE WITH C&L AUSFALLBURGSCHAFT
The Borrower agrees to fully comply with all conditions
and requirements of, and assumes all undertakings as
they are referred to as undertakings of the Borrower
in, the C&L Ausfallburgschaft, in particular the
Borrower agrees to the following:
- to allow inspections by the Guarantors or C&L
(either by themselves or by agents appointed by
them) at any time for the purpose of checking
whether a drawdown under the C&L Ausfallburgschaft
may be made or whether the conditions for such
drawdown are given or had been given;
- the Facility Agent and the Lenders are authorised
to submit to C&L all documents concerning the Loan
Facility and the collateral provided to secure the
Loan Facility and to give to C&L all information
requested by it;
- to bear all costs and expenses for all inspections,
reports and expert opinions deemed necessary by C&L
in connection with the C&L Ausfallburgschaft; and
- to pay all fees of C&L in connection with the C&L
Ausfallburgschaft, in particular the ones stated in
Article 26.4.
(h) PROVISION OF INFORMATION TO TECHNICAL CONSULTANT
The Borrower undertakes to provide the Technical
Consultant during the Construction Period on a monthly
basis and thereafter upon request, with all information
and documentation concerning the
construction/conversion and operation of the Mill
reasonably required by it for the purposes of this
Agreement and to afford the Technical Consultant access
to all parts of the Project site necessary for such
purposes.
(i) CO-OPERATION WITH FACILITY AGENT
The Borrower shall co-operate with the Facility Agent
in all aspects to set up the (revised) Banking Cases,
in particular the Borrower shall provide the Facility
Agent with all information necessary to update the
Banking Case as required from time to time by the
Facility Agent.
(j) INSURANCES
The Borrower undertakes to keep the Mill in good
working condition and to effect and maintain
insurances, under forms of policies and with reputable
insurance companies reasonably acceptable to the
Facility Agent to be effective during the Construction
Period and after the Completion Date until the Borrower
has completely fulfilled its payment obligations under
the Agreement. Such insurances shall include the
insurances set out in the Minimum Insurance Schedule
prepared by the Insurance Consultant of the Lenders
(attached hereto as Annex 15 in the English language)
and such other insurances as the Facility Agent
specifies are required to be maintained in connection
with the Project in accordance with prudent operating
practice. All rights and claims under such insurances
shall be assigned by the Borrower to the Security
Trustee (on behalf of the Lenders) as collateral for
its payment obligations under the Agreement
substantially in the form of Annex 7. In addition the
following shall apply:
50
(aa) The secured Lenders are to be named as co-
insured in all policies of insurance.
(bb) In case of all policies of insurance other than
those in respect of third party liability the
Security Trustee shall be named as sole loss
payee in respect of claims in excess of DM 2
Mio..
(cc) In the policies, the insurers shall agree to
waive all rights of subrogation or action against
each of the insured and their respective agents,
officers, directors, employees and servants.
(dd) All of the provisions of the policies of
insurance, save for the limits of liability,
shall operate in the same manner as if there was
a separate policy with and covering each insured
and each insured shall be entitled, for his own
respective rights and interest, to be indemnified
for losses arising from claims made by any other
insured.
(ee) The policies of insurance shall be voidable only
in the event of deliberate material
misrepresentation, mis-description or non-
disclosure, it being understood that in such
event the policies may be avoided only as against
those insured parties guilty of deliberate
misrepresentation, mis-description or non-
disclosure.
(ff) The insurers shall waive any right to set-off or
counterclaim against or reduce any insured
proceeds due and payable to the Security Trustee
(on behalf of itself and other beneficiaries) as
co-assured and loss payee save in respect of any
unpaid premium, if so required by insurers.
(gg) In the policies, a 30 (thirty) days notice of
cancellation, non renewal suspension and adverse
change of terms shall be given to the Security
Trustee.
(hh) In the policies it shall be stipulated that the
Security Trustee shall be advised by the insurers
of any act or omission or of any event of which
the insurers have knowledge and which might
reasonably be foreseen to invalidate or render
unenforceable in whole or in part any policy.
(ii) In the policies it shall be stipulated that any
notice or document to be served in relation to
any policy may be delivered or sent by prepaid
recorded delivery post (if within the Federal
Republic of Germany) or by prepaid airmail (if
elsewhere) or telex or facsimile process to the
party to be served at its registered office or at
such other address as it may have notified to the
other parties in writing in accordance with this
clause. Any such notice will be deemed to be
given as follows:
- if in writing, when delivered;
- if by telex, when despatched but only if, at
the time of transmission, the correct
answerback appears, at the start and end of
the sender's copy of the notice; and
- if by fax, when transmitted, but only if,
immediately after the transmission, the
sender's fax machine records the correct
answerback.
(jj) The Security Trustee and the other beneficiaries
shall in no circumstances have any liability for
the payment of premiums or other obli-
51
gations to underwriters or insurers save in
respect of any set off for unpaid premium, if so
required by underwriters or insurers.
(kk) The insurers shall waive all rights of
contribution against any other insurance effected
by the Lenders other than insurance effected
specifically in relation to the Project.
(ll) The governing law of the insurance policies shall
be German law and each of the insurers and co-
assured shall agree that any legal proceedings
arising out of or in connection with the policies
shall be brought in the exclusive jurisdiction of
the courts of Germany.
The Facility Agent shall be entitled to review from
time to time the compliance of the insurances effected
by the Borrower with the above provisions and the
provisions contained in the Minimum Insurance Schedule
of Annex 15, and the Borrower undertakes to co-operate
with the Facility Agent in this respect and to furnish
to it all information requested by it for such purpose.
(k) OPERATING PRACTICE
The Borrower undertakes to operate and maintain the
Project in accordance with prudent operating practices
and that at all times the conditions, obligations,
requirements and technical specifications as set out in
any material authorisations, approvals, consents,
licences or permits are complied with in all material
respects.
(l) ENVIRONMENTAL MATTERS
The Borrower will comply in all material respects with
all requirements of Environmental Law applicable to it
and promptly notify the Facility Agent of
(i) any claim or demand made on, or warning or other
notice given to it or to any occupier of any
property owned or leased by it under any
Environmental Law and which may affect the
compliance with this Agreement.
(ii) any circumstances which arise, whereby any
remedial action is likely to be required to be
taken by, or at the expense of, it under or
pursuant to any Environmental Law applicable to
the business, property or assets of it and which
may materially adversely affect the ability of
the Borrower to discharge its obligations under
this Agreement.
(m) RELEVANT DOCUMENTS
The Borrower shall at all times perform its obligations
under, and comply in all material respects with the
provisions of each Material Project Contract and to
promptly take all such steps as are reasonably
available to it to pursue and enforce its rights under
any Material Project Contracts save where the position
of the Lenders would not be materially adversely
affected by a failure of the part of the Borrower to
pursue and enforce such rights.
52
(n) INFORMATION ON THE OPERATION OF THE MILL
The Borrower shall promptly upon becoming aware of such
facts inform the Facility Agent of any event which
might reasonably result in a material interruption or
reduction in the operation of the Mill.
(o) CERTIFICATE OF CHIEF FINANCIAL OFFICER
As soon as possible, but in any event not later than 30
(thirty) days after the end of each of its business
years and each half-year of its business years, the
Borrower shall provide the Facility Agent with a
certificate of its chief financial officer confirming
that all payments effected by the Borrower out of the
Proceeds Account were in compliance with the priorities
set out in Article 20.2.
(p) COMPLIANCE WITH TREUHANDVERTRAG
The Borrower undertakes to comply in all material
respects with the obligations and undertakings in the
Acquisition Agreement concerning the shares of
Zellstoff- und Papierfabrik Rosenthal GmbH concluded
with the Treuhandanstalt, Anstalt des offentlichen
Rechts, dated July 3, 1994 assumed by it.
(q) PERFORMANCE AND ADVANCE PAYMENT GUARANTEES
The Borrower undertakes to instruct the respective
issuers of the performance and advance payment
guarantees securing the obligations of the third party
debtors under the Material Project Contracts listed in
Annex 5 to effect payment concerning the proceeds under
such guarantees exclusively to the Proceeds Account.
(r) GOVERNMENT GRANTS
The Borrower undertakes to file in due time and form
all applications with the competent authorities of the
Federal Republic of Germany or, as the case may be, the
State of Thuringia in relation to the
Investitionszulagengesetz 1996 and
Investitionszulagengesetz 1999 (if the approval of this
law is not refused by the EU commission) or, as the
case may be, the grants to be provided by Thuringer
Aufbaubank necessary to receive the maximum amount of
Government Grants available thereunder. The Borrower
undertakes further to instruct the competent
authorities of the Federal Republic of Germany or, as
the case may be, the State of Thuringia to effect
payment concerning the Government Grants exclusively to
the Proceeds Account. The Borrower agrees to fully
comply with all conditions and requirements imposed on
it in connection with such Government Grants.
(s) APPLICATIONS TO DTA AND KFW
The Borrower agrees to make applications to DtA and/or
KfW only through Vereinsbank (in its capacity as
Facility Agent).
(t) SYNDICATION PROCESS
The Borrower undertakes to support the Original
Lenders in the syndication of the Loan Facility and to
assist them in the preparation of an Information
Memorandum meeting international standards in relation
to the Project and its financing for distribution to
potential assignees of
53
the Original Lenders, which will be signed by the
Borrower and the Original Lenders.
19.4.2 NEGATIVE UNDERTAKINGS
(a) NEGATIVE PLEDGE
The Borrower will not create any Encumbrance, except
for Permitted Encumbrances, on or over all or any of
its present or future assets or revenues, for the
purpose of granting a security in respect of its
Indebtedness, its Guarantees in respect of
Indebtedness, or the Indebtedness or Guarantees of any
other Person, unless such Encumbrance rateably and
equally secures obligations arising pursuant to this
Agreement at the same or an earlier time.
(b) NO DISPOSAL, NO INVESTMENTS
The Borrower will not sell, transfer or otherwise
dispose of or cease to exercise direct control over any
material part of its present and future assets, rights
and revenues and will not make any new material finance
or asset investments and not incur any new material
obligations, unless with the prior consent of the
Facility Agent (which may only be given subject to the
agreement of C&L).
(c) LIMITATION OF INDEBTEDNESS
The Borrower undertakes not to create any other
Indebtedness with any bank or other financial
institution exceeding in total together with all other
such Indebtedness then outstanding incurred prior
thereto the amount of DM 1 Mio. without the prior
written consent of the Facility Agent.
(d) NO REPAYMENT OF SHAREHOLDER'S LOANS
The Borrower shall effect payments on any amounts due
under the subordinated loans granted by the Shareholder
referred to in the Shareholders' Undertakings Agreement
dated on or about July 6, 1998 (i) in respect of
interest only, if all payment claims then due and
payable under this Loan Facility have been met in full,
such interest not being more than 7 % p.a. and provided
further that the Borrower is in compliance with its
undertaking pursuant to Article 20.3 to deposit the
Required Balance and (ii) in respect of principal only
after all amounts outstanding under this Loan Facility
have been paid in full.
(e) WITHDRAWALS FROM CASH COLLATERAL ACCOUNTS
The Borrower may not withdraw the balance on the Cash
Collateral Accounts other than pursuant to Article 20.
(f) NO MERGER AND SALE OF GROUP COMPANIES
The Borrower will not merge or consolidate with any
other company or Person or create or have any
subsidiary or any other interest in any Person, or sell
or reduce its direct or indirect shareholding or
participation in any company or Person existing at the
date of this Agreement or acquired by it thereafter,
the result of which would (in the opinion of the
Facility Agent) materially adversely affect the
Borrower's ability to
54
perform its obligations under this Agreement or any
Material Project Contract.
(g) TRANSACTIONS WITH RELATED PARTIES
The Borrower will not conclude any transaction
(including loan or credit agreements) with a Related
Party except on terms no less beneficial to the
Borrower than those obtainable on an arms length basis.
All contracts to be concluded by the Borrower with a
Related Party shall be submitted to the Facility Agent
in their final draft form for approval, such approval
not to be unreasonably withheld (which may, however, in
the case of loan or credit agreements, only be given
subject to the agreement of C&L).
(h) TYPE OF BUSINESS
The Borrower shall not engage in any other business
than that of the carrying out of the conversion and
operation of the Mill and any business activities
incidental to the above, and the Borrower undertakes
not to make any material change in the design,
specification or configuration of the Mill the result
of which would (in the opinion of the Facility Agent)
materially adversely affect the Borrower's ability to
perform its obligations under this Agreement or any
Material Project Contract.
(i) NO AMENDMENTS, NO TERMINATION
The Borrower shall not agree to any amendment,
variation or waiver of any Material Project Contract or
any other agreement which would have a material adverse
effect on the ability of the Borrower to discharge its
obligations under this Agreement, nor shall the
Borrower terminate any Material Project Contract
without the prior written consent of the Facility
Agent, which consent shall not be unreasonably
withheld. Furthermore the Borrower shall not conclude
any agreement which would qualify as a Material Project
Contract without the prior written consent of the
Facility Agent.
19.5 DURATION
The undertakings in this Article 19 shall remain in force
from and after the date hereof and so long as any amount is
or may be outstanding hereunder.
ARTICLE 20
CASH COLLATERAL ACCOUNTS, ASSIGNMENTS AND OTHER SECURITY
20.1 PROCEEDS ACCOUNT, DEBT SERVICE RESERVE ACCOUNT, INVESTMENT
RESERVE ACCOUNT
The Borrower will open and maintain the Proceeds Account, the
Debt Service Reserve Account and the Investment Reserve
Account for the following purposes:
- The Proceeds Account will be used to collect (i) all
income ensuing from the operation of the Mill; (ii) all
amounts to be received by the Borrower from the State of
Thuringia and (subject to the provision in the third sub-
paragraph below) the Federal Republic of Germany under
55
their respective grants given in connection with the
Project; (iii) all amounts paid by the Shareholder to the
Borrower to fund its equity or under subordinated loans
extended to the Borrower; and (iv) all funds drawn down
under this Loan Facility and any other loan or facility
available to the Borrower in connection with the Project.
All funds in the Proceeds Account will be pledged in
favour of the Lenders substantially in the form of Annex
12 A.
- The Debt Service Reserve Account will be used to deposit
the Required Balance. All funds in the Debt Service
Reserve Account will be pledged in favour of the Lenders
substantially in the form of Annex 12 B.
- The Investment Reserve Account will be used to deposit
amounts drawn down under the Loan Facility for the
purpose of financing Project Construction Costs becoming
due after the end of the General Tranche Availability
Period. All amounts paid under the
Investitionszulagengesetz 1996 and the
Investititonszulagengesetz 1999 to the Borrower after
February 28, 2001 shall be transferred by the Facility
Agent to the Investment Reserve Account for the purpose
described above. All funds in the Investment Reserve
Account will be pledged in favour of the Lenders
substantially in the form of Annex 12 C.
20.2 WITHDRAWALS FROM PROCEEDS ACCOUNT, DEBT SERVICE RESERVE
ACCOUNT AND INVESTMENT RESERVE ACCOUNT
(a) The Borrower undertakes to make withdrawals from the
Proceeds Account only to effect the following payments
then due and payable in the following order:
(i) payment of Project Costs, Construction Cost
Overruns and operating costs (excluding any
amounts due under the subordinated loans granted
by the Shareholder referred to in the
Shareholders' Undertakings Agreement dated on or
about July 6, 1998), Taxes (to the extent that
the Borrower is liable for such Taxes as
taxpayer), Tax Distributions and On-Going Capital
Expenditure related to the operation of the Mill;
(ii) payment of interest, fees, costs and expenses
under the Loan Facility and of all amounts due
under the hedging agreements concluded by the
Borrower with the approval of the Facility Agent;
(iii) repayment of principal under the Loan Facility in
accordance with Article 9.1 and Article 9.3;
(iv) payments into the Debt Service Reserve Account
necessary to fund the Required Balance
and the Borrower authorises the Security Trustee (on
behalf of the Lenders) to debit the Proceeds Account
with all amounts referred to in Article 20.2 (a) (ii)
through (iv) above when due and, if the funds in the
Proceeds Account are not sufficient to pay any amounts
set out in (i), (ii) and (iii) above, to debit the Debt
Service Reserve Account with any such amount and to
credit any such amount to the Account.
(b) The Borrower undertakes to use 50 % of all amounts
standing to the credit of the Proceeds Account on any
Repayment Date after all amounts referred to in Article
20.2 (a) (i) through (iv) have been paid
56
in full when due (following application of the priority
of payments set forth above) to effect the
extraordinary repayments set out in Article 9.4 (a)
until the amount by which the maximum amount drawn down
under the Loan Facility has exceeded the amount of DM
448 Mio. has been so repaid. The remaining amount and,
after the amount by which the maximum amount drawn down
under the Loan Facility has exceeded the amount of DM
448 Mio. has been so repaid (as aforesaid), all amounts
standing to the credit of the Proceeds Account on any
Repayment Date after all amounts referred to in Article
20.2 (a) (i) through (iv) have been paid in full when
due (following application of the priority of payments
set forth above) may be transferred by the Borrower to
the account of the Borrower opened and maintained with
Vereinsbank Dresden branch for the purpose of crediting
amounts to be distributed by the Borrower to the
Shareholder (the "Shareholders' Account") on or after
such Repayment Date provided that (i) the amount to be
transferred shall not exceed the amount which would
have been available for a transfer to the Shareholders'
Account on such Repayment Date, (ii) the last Annual
Debt Service Cover Ratio determined by the Facility
Agent is not as of a date more than 6 (six) months
prior to such Repayment Date, (iii) such Annual Debt
Service Cover Ratio shall be at least 1.2 and would not
fall below 1.2, if the amounts to be transferred to the
Shareholders' Account were deducted from the Available
Cash Flow being the numerator of such Annual Debt
Service Cover Ratio, and (iv) no Event of Default or
Potential Event of Default has occurred and is
continuing on such Repayment Date.
(c) Any amounts credited to the Shareholders' Account will
be at the free disposal of the Borrower only after (i)
the Borrower has provided the Facility Agent with its
audited financial statements referred to in Article
19.1 (a) (i) (prepared in accordance with the
provisions of Sections 264 through 289 German
Commercial Code) showing a net profit (Bilanzgewinn),
(ii) the Borrower has effected the extraordinary
repayments pursuant to Article 9.4 (a) and (iii) the
Borrower has reached an agreement with C&L, the
Guarantors and the Facility Agent as to the making of a
first distribution to the Shareholder.
(d) The Shareholders' Account will be excluded from the
Lenders' security rights.
(e) Any amount standing to the credit of the Investment
Reserve Account may be used by the Borrower only for
the payment of Project Construction Costs becoming due
after the end of the General Tranche Availability
Period on their respective due dates (upon request of
the Facility Agent against submission of appropriate
evidence). Any amount remaining on the Investment
Reserve Account after all Project Construction Costs
have been paid shall be used by the Borrower to make
the extraordinary repayment as set out in Article 9.4
(b). The Borrower authorises the Security Trustee (on
behalf of the Lenders) to debit the Investment Reserve
Account with any such amount for the purpose of making
such extraordinary repayment.
20.3 DEPOSIT AND RELEASE OF REQUIRED BALANCE
The Borrower undertakes (i) to deposit the Required Balance
into the Debt Service Reserve Account at the latest on
February 28, 2001 and (ii) to make such further deposits in
the Debt Service Reserve Account as are necessary to
maintain the Required Balance. Balances on the Debt Service
Reserve Account may be invested in short term Deutsche Mark
debt securities (maturing in not more than one year) of
issuers having been awarded a short term A1
57
rating or better by Standard & Poor's Corporation, or
equivalent rating from any rating agency approved by the
Facility Agent, in respect of such issuers' most recent
unsecured and unsubordinated long and medium term capital
markets issues. Any amounts to be released from the Debt
Service Reserve Account shall be transferred by the Facility
Agent to the Proceeds Account.
20.4 ASSIGNMENT OF FUTURE MATERIAL PROJECT CONTRACTS, TRANSFER OF
MOVABLE PROPERTY
To further secure its payment obligations under this
Agreement, the Borrower undertakes to assign to the Lenders
or, as the case may be, the Security Trustee all its rights
and claims under all further Material Project Contracts
concluded after the date hereof and all its claims
(notwithstanding whether such claims are payment claims or
other claims) resulting from future delivery contracts for
the supply of raw material and pulp concluded by it after the
date hereof, provided that such contracts have an expected
business value of more than DM 1 Mio., and to transfer by way
of security to the Lenders or, as the case may be, the
Security Trustee all Movable Property acquired by it in the
future. The Borrower shall provide the Facility Agent with
copies of all such future Material Project Contracts and with
respect to all such future delivery contracts with all
information reasonably requested by the Facility Agent
without delay. In all such contracts the Borrower shall
instruct all third party debtors to effect payment concerning
the claims assigned or to be assigned to the Proceeds Account
only. The Borrower shall promptly inform the Security Trustee
of any Movable Property acquired by it after the date hereof
in accordance with the provisions of the Title Transfer
Agreements.
ARTICLE 21
BANKING CASE, ANNUAL DEBT SERVICE COVER RATIO
21.1 BANKING CASE
The Financial Advisor of the Borrower has set up the Initial
Banking Case applicable as of the date hereof, which has been
approved by the Facility Agent. Such Initial Banking Case
shall serve as a model structure for all further (revised)
Banking Cases, which will be prepared by the Facility Agent
on a half-yearly basis until repayment in full of all amounts
due hereunder. Such (revised) Banking Cases will be based on
the financial information and the cash flow projections to
be supplied by the Borrower to the Facility Agent pursuant
to Article 19.1 (a) and (b) (as far as they give in the
opinion of the Facility Agent a true picture of the latest
and future developments of the Mill) and the report of the
Technical Consultant containing the following:
- a review of the On-Going Capital Expenditure spent by the
Borrower in its respective last fiscal year;
- an assessment of the actual technical stage of the
Project; and
- an assessment of the On-Going Capital Expenditure for the
respective current fiscal year of the Borrower including
those necessary to comply with the Environmental Law.
The Facility Agent will prepare the Banking Cases as soon as
possible after receipt by it from the Borrower and the
Technical Consultant of the information as stated above. If
the Facility Agent and the Borrower do not reach agreement on
all assumptions and calculations in the Banking Case, the
opinion of an independent consultant (to be appointed by the
Facility Agent in agreement with the Borrower, such agreement
not to be unreasonably withheld) shall prevail in respect of
any such contested assumption or calculation.
58
21.2 DETERMINATION OF ANNUAL DEBT SERVICE COVER RATIO
During the period from the Completion Date until the date
when all amounts outstanding under this Agreement have been
repaid in full, the Facility Agent will determine the Annual
Debt Service Cover Ratio on the basis of the (revised)
Banking Cases immediately after it has been established and
agreed upon with the Borrower as set out in the preceding
subparagraph.
ARTICLE 22
EVENTS OF DEFAULT
22.1 EVENTS OF DEFAULT
Each of the events set out below is an Event of Default
(whether or not caused by any reason whatsoever within the
control of the Borrower or of any other person):
(a) (i) the Borrower fails to pay any amount payable by it
hereunder as principal or interest on the due date
thereof and this failure is not remedied within seven
(7) Business Days; or (ii) the Borrower fails to pay
any other amount payable by it hereunder on the due
date thereof and this failure is not remedied within
five (5) Business Days of the notification of the
failure to pay, and C&L has expressly agreed to an
Event of Default being declared for one of the reasons
as set out in (i) or (ii) above; or
(b) (i) any representation, warranty or statement made by
the Borrower in, or in connection with, this Agreement,
any Security Document or in any accounts, certificate,
statement or opinion delivered by or on behalf of the
Borrower hereunder or in connection herewith is
incorrect, untrue or misleading in any material respect
when made or is not complied with and such default is
incapable of remedy, or if capable of remedy, is not
remedied within thirty (30) days after receipt of
written notice from the Facility Agent requesting the
same and has a material impact on the Borrower's
payment obligations under this Agreement, and C&L has
expressly agreed to an Event of Default being declared
for that reason; or (ii) any statement as to its
financial or income conditions made by the Borrower in,
or in connection with this Agreement is incorrect,
untrue or misleading in any material respect when made
and has a material impact on the compliance with the
Borrower's payment obligations under this Agreement; or
(c) the Borrower fails to comply with any covenant, in
particular the Annual Debt Service Cover Ratio
undertaking of the Borrower pursuant to Article 19.3,
or any other material provision of this Agreement and
this failure, if capable of remedy, is not remedied
within thirty (30) days after receipt of written
notice from the Facility Agent; or
(d) (i) any other Indebtedness of the Borrower of an
aggregate amount of not less than DM 100,000 (or
its equivalent in any other currency) becomes
prematurely due and payable as a result of a
default thereunder and the Borrower is not
contesting in good faith the validity of the
case; or
59
(ii) any Encumbrance over any assets of the Borrower
securing an Indebtedness of not less than DM
100,000 becomes enforceable; or
(iii) any material event of default (or event which
with giving of notice or lapse of time may
constitute such an event of default) occurs under
any Material Project Contract and such default is
incapable of remedy, or if capable of remedy, is
not remedied within ninety (90) days after
receipt of written notice from the Facility Agent
requesting the same and has a material impact on
the Borrower's payment obligations under this
Agreement; or
(e) any order (provisional or final) is made or resolution
passed for the suspension of payments or dissolution,
termination of existence, liquidation, windingup,
bankruptcy, insolvency, judicial management or
administration of the Borrower; or
(f) a moratorium in respect of all or any debts of the
Borrower, or a composition or an arrangement with
creditors of the Borrower or any similar proceeding or
arrangement by which the assets of the Borrower are
submitted to the control of its creditors is applied
for, ordered or declared; or
(g) a liquidator, trustee, administrator, receiver,
arranger or similar officer is appointed in respect of
the Borrower or in respect of all or a substantial part
of its assets; or
(h) the Borrower becomes or is declared insolvent or is
unable, or admits its inability to pay its debts as
they fall due or becomes insolvent within the terms of
any applicable law; or
(i) there is created a distress, execution, attachment or
other process affecting any asset of the Borrower,
which has a material adverse effect on the ability of
the Borrower to perform its obligations under this
Agreement; or
(j) anything analogous to or having a substantially similar
effect to any of the events specified in paragraphs (e)
to (i) shall occur under the laws of any applicable
jurisdiction; or
(k) the Borrower ceases or threatens to cease, to carry on
its present business or disposes of a substantial part
of its business, property or assets or a substantial
part of its business, property or assets is seized,
nationalised, expropriated or compulsorily acquired by
or under the authority of any government and such
seizure, nationalisation, expropriation or compulsory
acquisition has a material impact on the Borrower's
payment obligations under this Agreement; or
(l) any authorisation, approval, consent, licence,
exemption, filing, registration or notarisation or
other requirement necessary to enable the Borrower to
comply with any of its material obligations hereunder
is modified, revoked or withheld or does not remain in
full force and effect; or
(m) at any time it is unlawful for the Borrower to perform
any of its material obligations hereunder and such
condition continues for a period of 60 days; or
60
(n) the Borrower ceases, without the consent of the
Majority Lenders or compliance with Section 2 (a) of
the Shareholders' Undertakings Agreement, to be a
majority-owned direct or indirect subsidiary of Mercer
International, Inc., and the Guarantors have agreed to
an Event of Default being declared for that reason;
(o) an extraordinary situation or a material adverse change
in the business, assets or financial condition of the
Borrower occurs, which situation or change gives
reasonable grounds to conclude that the Borrower may
not, or will be unable to, perform or observe in the
normal course its obligations under this Agreement; or
(p) without the prior written consent of the Majority
Lenders, otherwise than as a result of expiry of time,
any person terminates, cancels or repudiates any
Material Project Contract relating to the design,
development and construction of the Project to which it
is a party, unless such Material Project Contract is
replaced by a substitute agreement approved by the
Majority Lenders within thirty (30) days notice by the
Borrower from the Facility Agent requesting such
substitution, such approval not to be unreasonably
withheld; or
(q) the Borrower cannot maintain the insurance pursuant to
Article 19.4.1 (j); or
(r) Mercer International, Inc., the Shareholder and/or
Zellstoff- und Papierfabrik Rosenthal Verwaltungs-GmbH
fail to comply with any obligation assumed by them in
the Shareholders' Undertakings Agreement dated on or
about July 6, 1998 and such failure, if capable of
remedy, is not remedied within thirty (30) days after
receipt of written notice from the Facility Agent
requesting the same.
22.2 ACCELERATION
In the case of any such Event of Default, and at any time
thereafter if any such Event of Default shall then be
continuing, the Facility Agent may, and shall, if so directed
by the Majority Lenders, by written notice to the Borrower:
(a) declare that the obligations of the Facility Agent and
the Lenders hereunder and the Lenders' Commitments
shall be cancelled forthwith whereupon the same shall
be so cancelled forthwith; and/or
(b) declare the Advance immediately due and payable
whereupon the same shall become immediately due and
payable together with all interest accrued thereon and
all other amounts payable hereunder. In the case of the
occurrence of an Event of Default according to Article
22.1 (c) on account of a breach of the Borrower's
undertaking in relation to the achievement of the
Performance Criteria contained in Article 19.4.1.(b),
the Advance may also be declared due and payable by the
Facility Agent only in part, in which case the Borrower
shall compensate the Lenders for any loss, damage, cost
and outlay as set out in Article 12.4.
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ARTICLE 23
RIGHTS AND OBLIGATIONS OF FACILITY AGENT
23.1 APPOINTMENT
Vereinsbank is hereby appointed Facility Agent. Each Lender
irrevocably authorises the Facility Agent on such Lender's
behalf to perform such duties and to exercise such rights and
powers under this Agreement as are specifically delegated to
the Facility Agent by the terms of this Agreement, together
with such rights and powers as are reasonably incidental
thereto. The Facility Agent, however, must not commence any
legal action or proceedings on behalf of any Lender without
such Lender's prior written approval. The Facility Agent
shall have only those duties and powers which are expressly
specified in this Agreement. The Facility Agent's duties
hereunder are solely of a mechanical and administrative
nature.
23.2 MAJORITY LENDERS' DIRECTIONS
In the exercise of any right or power and as to any matter
not expressly provided for by this Agreement, the Facility
Agent may act or refrain from acting in accordance with the
instructions of the Majority Lenders and shall be fully
protected in so doing. In the absence of any such
instructions, the Facility Agent may act or refrain from
acting as it shall see fit. Any such instructions shall be
binding on all the Lenders.
23.3 RELATIONSHIP
(a) The relationship between the Facility Agent and each
Lender is that of principal and Facility Agent only.
Nothing herein shall constitute the Facility Agent a
trustee or fiduciary for any Lender, the Borrower or
any other person.
(b) The Facility Agent shall not in any respect be Facility
Agent of the Borrower by virtue of this Agreement.
(c) The Facility Agent shall not be liable to the Borrower
for any breach by any Lender of this Agreement or be
liable to any Lender for any breach by the Borrower
hereof.
23.4 DELEGATION
The Facility Agent may act hereunder through its officers,
employees or agents.
23.5 DOCUMENTATION
Neither the Facility Agent nor the Original Lenders nor any
of their officers, employees or agents shall be responsible
to any Lender or to each other for
(a) the valid execution, genuineness, validity,
enforceability or sufficiency of this Agreement or any
other document in connection herewith, or
(b) the collectability of amounts payable hereunder, or
(c) the accuracy of any statements (whether written or
oral) made in or in connection with this Agreement or
any other document in connection herewith.
62
23.6 DUTIES
The Facility Agent shall not be required to ascertain or
inquire as to the performance or observance by the Borrower
of the terms of this Agreement or any other document in
connection herewith. The Facility Agent shall not be deemed
to have knowledge of the occurrence of any Event of Default
or Potential Event of Default other than in the case of a
payment default, of which the Facility Agent gained actual
knowledge unless the Facility Agent has received written
notice from a party hereto describing such Event of Default
or Potential Event of Default and stating that such notice is
a "Notice of Default" or unless the Facility Agent does not
receive a payment from the Borrower hereunder on its due
date. If the Facility Agent receives such a Notice of
Default, the Facility Agent shall promptly give notice
thereof to the Lenders.
23.7 EXONERATION
Neither the Facility Agent nor any of its officers, employees
or agents shall be liable to any Lender for any action taken
or omitted under or in connection with this Agreement unless
caused by its or their gross negligence or wilful misconduct.
23.8 RELIANCE
(a) The Facility Agent may rely on any communication or
document believed by it to be genuine and correct.
(b) The Facility Agent may engage, pay for and rely on
legal or other professional advisers selected by it and
shall be protected in so relying.
23.9 CREDIT APPROVAL
Each of the Lenders severally represents and warrants to the
Facility Agent that it has made its own independent
investigation and assessment of the financial condition and
affairs of the Borrower and its related entities in
connection with its participation in this Agreement and has
not relied exclusively on any information provided to such
Lender by the Facility Agent in connection herewith. Each
Lender represents, warrants and undertakes to the Facility
Agent that it shall continue to make its own independent
appraisal of the creditworthiness of the Borrower and its
related entities while the Advance is outstanding or its
Lender's Commitment is in force.
23.10 INFORMATION
(a) The Facility Agent shall furnish each Lender with a
copy of any documents received by it under Article 19.1
and Article 19.2 (but the Facility Agent shall not be
obliged to review or check the accuracy or completeness
thereof). If requested by a Lender, the Facility Agent
shall furnish to such Lender a copy of all documents
received by it under Article 4.
(b) Neither the Facility Agent nor the Original Lenders
shall have any duty
(i) either initially or on a continuing basis to
provide any Lender with any credit or other
information with respect to the financial
condition or affairs of the Borrower or any
related entities whether coming into its
possession or that of any related entities of the
Facility Agent before the entry into this
Agreement or at any time thereafter;
63
(ii) unless specifically requested to do so by a
Lender, to request any certificates or other
documents from the Borrower hereunder.
(c) The Facility Agent need not disclose any information
relating to the Borrower if such disclosure would or
might in the opinion of the Facility Agent constitute a
breach of any law or any duty of secrecy or confidence.
23.11 FACILITY AGENT AND ORIGINAL LENDERS INDIVIDUALLY
(a) Each of the Facility Agent and the Original Lenders
shall have the same rights and powers hereunder as any
other Lender and the Facility agent may exercise the
same as though it were not the Facility Agent.
(b) The Facility Agent and the Original Lenders may accept
deposits from, lend money to and generally engage in
any kind of banking, trust, advisory or other business
whatsoever with the Borrower and its related entities
and accept and retain any fees payable by the Borrower
or any of its related entities for its own account in
connection therewith without liability to account
therefor to any Lender.
23.12 INDEMNITY
Each Lender agrees to indemnify the Facility Agent on demand
(to the extent not reimbursed by the Borrower under this
Agreement) for any and all liabilities, losses, damages,
penalties, actions, judgements, costs, expenses or
disbursements of any kind whatsoever which may be imposed on,
incurred by or asserted against the Facility Agent in any way
relating to or arising out of its acting as the Facility
Agent under this Agreement or performing its duties hereunder
or any action taken or omitted by the Facility Agent
hereunder (including, without limitation, the charges and
expenses referred to in Article 26 and all stamp taxes on or
in connection with this Agreement to the extent not
reimbursed by the Borrower). Such indemnification by each
Lender shall be pro rata to its Lender's Commitment or (as
the case may be) participation in the Advance.
Notwithstanding the foregoing, no Lender shall be liable for
any portion of the foregoing resulting from the Facility
Agent's gross negligence or wilful misconduct.
23.13 LEGAL RESTRICTIONS
The Facility Agent may refrain from doing anything which
would or might in its opinion (i) be contrary to the law of
any jurisdiction or any official directive or (ii) render it
liable to any Person or (iii) violate its banker's duty of
secrecy, and may do anything which in its opinion is
necessary to comply with any such law or directive.
23.14 RESIGNATION AND REMOVAL
The Facility Agent may, after prior consultation with the
Borrower and subject to the Borrower's consent (which shall
not be unreasonably withheld), resign by giving written
notice thereof to the Lenders and the Borrower. In addition,
the Majority Lenders may, by giving at least 30 days' notice
to the Facility Agent, the other Lenders and the Borrower, as
appropriate, remove the Facility Agent. In either such event
the Majority Lenders may appoint a successor to such Facility
Agent. If the Majority Lenders have not, within 60 days
after such notice of resignation or removal, appointed a
successor Facility Agent which shall have accepted such
appointment, the retiring or removed Facility
64
Agent shall have the right to appoint a successor Facility
Agent. The resignation or removal of the retiring or removed
Facility Agent and the appointment of any successor Facility
Agent shall both become effective upon the successor
notifying all the parties thereto in writing that it accepts
such appointment, whereupon the successor Facility Agent
shall succeed to the position of the retiring or removed
Facility Agent and the term "Facility Agent" herein shall
mean such successor Facility Agent. This Article 23.14 shall
continue to benefit a retiring or removed Facility Agent in
respect of any action taken or omitted by it hereunder while
it was Facility Agent.
23.15 RECOVERY OF PAYMENTS
Unless the Facility Agent shall have received written notice
from a Lender or the Borrower not less than two Business Days
prior to the date upon which such Lender or the Borrower (the
"party liable") is to pay an amount to the Facility Agent for
transfer to the Borrower or any Lender respectively (the
"payee") that the party liable does not intend to make that
amount available to the Facility Agent, the Facility Agent
may assume that the party liable has paid such amount to the
Facility Agent on the due date in accordance herewith. In
reliance upon such assumption, the Facility Agent may (but
shall not be obliged to) make available a corresponding sum
to the payee(s). In the event that such payment is not made
to the Facility Agent, the payee(s) shall forthwith on demand
repay such sum to the Facility Agent together with interest
on such amount until its repayment at a rate determined by
the Facility Agent reflecting its cost of funds. The
provisions of this Article 23.15 are without prejudice to any
rights the Facility Agent and the payee may have against the
party liable.
23.16 ENTITLEMENT TO PAYMENT
The Facility Agent may treat each Lender named as a party as
entitled to payment hereunder and as acting hereunder through
its office specified in Annex 4 to this Agreement until it
has received written notice from the Lender concerned to the
contrary.
23.17 EXEMPTION FROM ARTICLE 181 GERMAN CIVIL CODE
The Facility Agent is hereby granted exemption from the
restriction of Article 181 of the German Civil Code or any
similar restriction of the applicable laws of any other
country.
ARTICLE 24
SECURITY AGENT/TRUSTEE
Vereinsbank is hereby appointed security agent or, as the case may
be, security trustee of the Lenders on the terms set out in the
Security Pooling Agreement between the Lenders, the Borrower and
Vereinsbank of even date herewith.
65
ARTICLE 25
FEES
25.1 FRONT END FEE
The Borrower shall pay to the Facility Agent for distribution
to Original Lenders a Front End Fee as agreed upon in a side
letter between the Borrower and Vereinsbank of even date
herewith.
25.2 AGENCY FEE
For the performance of its function as facility agent the
Facility Agent shall receive an annual agency fee as agreed
upon in a side letter between the Borrower and Vereinsbank of
even date herewith. The agency fee is payable annually in
advance. The first payment of such fee is payable within
three (3) Business Days after the date hereof and each
subsequent payments are due on January 1 of each calendar
year for so long as any amount is or may be outstanding under
this Agreement or any Lender's Commitment is in force.
25.3 SECURITY TRUSTEE'S FEE
For the performance of its function as security trustee the
Security Trustee shall receive an annual Security Trustee's
Fee to be agreed upon with Vereinsbank in a side letter. The
Security Trustee's Fee is payable annually in advance. The
first payment of such fee is payable within three (3)
Business Days after the date hereof and each subsequent
payments are due on January 1 of each calendar year for so
long as any amount is or may be outstanding under this
Agreement or any Lender's Commitment is in force.
25.4 DOCUMENTATION FEE
For its services in connection with the preparation of the
documentation related to this Agreement, the Borrower shall
pay to Vereinsbank for its own account a front-end fee in an
amount agreed upon between the Borrower and Vereinsbank in a
side-letter of even date herewith, which shall become due
three (3) Business Days after the date hereof.
25.5 COMMITMENT FEE
The Borrower shall pay to the Facility Agent for distribution
to the Lenders a Commitment Fee of 0.375 % p.a. on the
available and undisbursed amounts under the General Tranche
and the Working Capital Tranche of the Loan Facility from the
signing date of this Agreement until the end of the General
Tranche Availability Period or, as the case may be, the
Working Capital Tranche Availability Period, which shall be
payable quarterly in arrears on March 31, June 30, September
30 and December 30 of each calendar year. To the extent that
the Borrower is obliged to pay a commitment fee under any
Special Credit, no Commitment Fee shall be payable in
relation to the General Tranche.
25.6 VALUE ADDED TAX
Any fee referred to in this Article 25 (Fees) is exclusive of
any value added tax or any other Tax which might be
chargeable in connection with that fee. If any value added
tax or other Tax is so chargeable, it shall be paid by the
Borrower at the same time as it pays the relevant fee.
66
ARTICLE 26
COSTS AND EXPENSES
26.1 The Borrower shall reimburse the Facility Agent or the
Original Lenders (through the Facility Agent) their
respective percentages of all reasonable travel and out-of-
pocket costs, charges and expenses incurred by the Facility
Agent and the Original Lenders in connection with the
negotiation, preparation and execution of this Agreement and
the syndication of this Facility (including value added
taxes thereon and including, but not limited to, the fees and
expenses of legal advisers and the costs for the preparation
of an information memorandum) and all costs and expenses
incurred by the Facility Agent in connection with the
activities of C&L referred to in Article 19.4.1 (g).
26.2 The Borrower shall reimburse the Facility Agent or the
Lenders for the reasonable and documented charges and
expenses (including value added tax or any similar tax
thereon and including the fees and expenses of legal
advisers) incurred by them in connection with the
enforcement of or the preservation of any rights under this
Agreement.
26.3 The Borrower shall reimburse the Facility Agent or the
Original Lenders (through the Facility Agent) their
respective reasonable and documented costs, charges and
expenses incurred by them in connection with the appointment
of their external consultants, i.e. the Technical
Consultant, the Insurance Consultant and a market consultant
appointed by them.
26.4 The Borrower will pay to the Facility Agent in respect to the
C&L Ausfallburgschaft the amounts as set out below on the
relevant due dates. The fees of C& L are (i) a non-recurring
amount of 0,25 % calculated on the basis of the most recent
included maximum liability amount under theC&L
Ausfallburgschaft, which is due by the Borrower upon the
first inclusion of such amount under the C&L
Ausfallburgschaft, and (ii) during the lifetime of the C&L
Ausfallburgschaft an amount of 0,25 %, calculated on the
basis of the aggregate total maximum liability amount
outstanding on April 1 and on October 1 of each year (taking
into consideration any amounts repaid under this Agreement),
whereby such amounts shall be payable on every April 1 and
October 1. The Borrower herewith authorises the Facility
Agent, without the Facility Agent hereby assuming any
obligation in this respect, to pay all such fees and charges
on their respective due dates to C&L on behalf of the
Borrower and to debit the Proceeds Account accordingly.
ARTICLE 27
STAMP DUTIES
The Borrower shall pay and forthwith on demand indemnify each of the
Facility Agent and the Lenders against any liability it incurs in
respect of, any stamp, registration and similar tax which is or
becomes payable in connection with the entry into, performance or
enforcement of this Agreement.
ARTICLE 28
WAIVERS; REMEDIES CUMULATIVE
No failure to exercise and no delay in exercising on the part of the
Facility Agent or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege pre-
67
clude any other or further exercise thereof or the exercise of any
other right, power or privilege. No waiver by the Facility Agent or
any Lender shall be effective unless it is in writing. The rights
and remedies of each of the Facility Agent and the Lenders herein
provided are cumulative and not exclusive of any rights or remedies
provided by law.
ARTICLE 29
NOTICES
29.1 Any correspondence, reports, announcements, consultations,
documentation and communication between the parties to this
Agreement shall be in the English language and shall be in
writing, by mail, or by telefax; the latter case requiring
confirmation by mail.
29.2 Without prejudice to any future change of address, all
correspondence from the Borrower to the Lenders shall be sent
to the Facility Agent at the address
set out in Annex 4.
All correspondence from the Lenders or the Facility Agent to
the Borrower shall be sent to the following address:
Zellstoff- und Papierfabrik Rosenthal GmbH & Co KG
Attn.: Xx. Xxx Xxxxxx
Fax: +49/000 00-000 00
29.3 Without prejudice to any future change of address or account,
all correspondence from the Facility Agent to the Lenders
shall be sent and all payments from the Facility Agent to the
Lenders shall be made to the addresses and accounts,
respectively, listed in Annex 4.
ARTICLE 30
ASSIGNMENT AND TRANSFER
30.1 SUCCESSORS
This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Facility Agent and their
respective successors and assignees.
30.2 BORROWER NOT TO ASSIGN OR TRANSFER
The Borrower may not assign or transfer all or any of its
rights, benefits and obligations hereunder.
30.3 TRANSFER BY LENDER
(a) At its own cost any Lender may, with the prior written
consent of the Borrower, such consent not to be
unreasonably withheld, with the prior written consent
of the Guarantors and subject to the conclusion of a
Transfer Agreement in accordance with Article 30.4, at
any time assign and transfer all or any part of its
rights, benefits and obligations (to effect a
"Vertragsubernahme") hereunder, under the Security
Docu-
68
ments and under the Security Pooling Agreement
dated the date hereof to another bank or financial
institution, provided that an amount of principal and
the amount of interest accrued thereon may not be
assigned or transferred separately. The consent of the
Borrower is not required in the case of assignments and
transfers to companies which are affiliated with any of
the Lenders within the meaning of Article 15 of the
German Stock Corporation Act. However, the consent of
the Guarantors is not required for any transfer of
rights, benefits and obligations under this Agreement
to any bank or financial institution having its
registered seat within the European Union (whereby in
this case C&L has to be informed about any such
transfer).
(b) Unless and until an assignee has agreed with the
Lenders in writing that it shall be under the same
obligations towards each of them as it would have been
had it been an original party hereto, no Lender shall
be obliged to recognise such assignee as having the
rights against it, which such assignee would have had
if it had been an original party hereto. For the
purposes of this Article 30.3, each Lender hereby
authorises the Facility Agent to execute on its behalf
any agreement with any assignee pursuant to which such
assignee agrees that it shall be under the same
obligations towards each of the Lenders as it would
have been had it been an original party hereto.
(c) The transfer or assignment by a Lender of part of its
rights and benefits hereunder shall be in a minimum
amount of DM 10 Mio..
(d) Any transfer of any of the rights and benefits of any
Lender hereunder shall be at no cost to the Borrower.
For each assignment effected pursuant to the above
provisions, the Facility Agent shall receive an
assignment registration fee in the amount of DM 2,000
from the respective assignee, failing whom from the
assigning Lender, which shall become due and payable
five Business Days after the date of the agreement
referred to in Article 30.3 (a) above.
30.4 TRANSFER AGREEMENT
If any Lender wishes to transfer its rights, benefits and
obligations hereunder to another bank or financial
institution (the "Assignee") in accordance with Article 30.3
(a), then such transfer shall be effected by the delivery to
the Facility Agent of a duly completed and duly executed
agreement substantially in the form set out in Annex 18 (a
"Transfer Agreement") whereupon:
(a) the Borrower and such Lender shall, to the extent
provided in such Transfer Agreement, each be released
from further obligations to the other hereunder and
their respective rights against each other shall be
cancelled (such rights and obligations being referred
to in this Article 30.4 as "discharged rights and
obligations");
(b) the Borrower and the Assignee thereto shall each assume
obligations towards, and acquire rights from, each
other which differ from the discharged rights and
obligations only insofar as the obligations so assumed
and the rights so acquired by the Borrower are owed to
and constituted by claims against such Assignee and not
such Lender;
(c) the other Lenders shall acquire the same rights and
assume the same obligations between themselves as they
would have acquired and assumed had such Lender been an
original party hereto with the obligations assumed by
it as a result of such transfer; and
69
(d) the Facility Agent shall promptly deliver a copy of any
Transfer Agreement received by it hereunder to the
Borrower requesting its consent pursuant to Article
30.3 (a). In case the Borrower has made drawings under
a Special Credit Tranche, the Facility Agent shall in
addition promptly inform DtA or, as the case may be,
KfW, of such assignment and transfer requesting its
consent in relation to the Primary Liability
Undertaking Declaration of the assigning Lender. If
such consents have been given, the Facility Agent shall
inform the assigning Lender, the Assignee and all other
Lenders hereof without delay.
30.5 CHANGE OF LENDING OFFICE
Each Lender may at any time and at its expense change its
lending office, but such Lender shall give the Facility Agent
prior written notice thereof and until receipt of such notice
the Facility Agent may assume that no such change has
occurred.
30.6 DISCLOSURE
Each Lender may disclose to any proposed assignee, transferee
or subparticipant any information about this Agreement and
any information in the possession of such Lender relating to
the Borrower.
ARTICLE 31
CURRENCY INDEMNITY
31.1 Payment made by the Borrower to the Lenders on the basis of
any judgement in a currency (hereinafter referred to as the
"Judgement Currency") other than Deutsche Marks shall only
discharge the Borrower's obligation to the extent of the
amount in Deutsche Marks that the Lenders, immediately upon
receipt of such payment, would be able to purchase with the
amount so received on a recognised foreign exchange market.
In the event that such amount in the Judgement Currency is
less than the amount due in Deutsche Marks pursuant to the
provisions of this Agreement, then the Borrower shall be
liable to pay the difference; such obligation of the Borrower
being a separate and independent obligation, forming the
basis of a separate cause of action.
31.2 The Borrower waives any rights it may have in any
jurisdiction to pay any amount hereunder in a currency other
than that in which it is expressed to be payable hereunder.
ARTICLE 32
PRO RATA SHARING
32.1 Except for payments to a Lender from the Facility Agent which
were received by the Facility Agent for the account of such
Lender in accordance with this Agreement, if a Lender shall
at any time receive satisfaction by way of payment or
foreclosure of any collateral or security or a declaration of
set-off made by such Lender of all or a part of any amount
payable by the Borrower hereunder in a proportion which, in
relation to any amounts received by any other Lender or
Lenders, represents more than its percentage participation
for the time being in the Advance, then such Lender shall
promptly purchase from the other Lenders their respective
participations in the Advance including the claims for
payment of interest maintained by those other Lenders as may
be
70
necessary to cause the purchasing Lender to share the
amount in excess of its percentage participation for the time
being in the Advance rateably with the other Lenders. Each of
the Lenders hereby agrees to sell and transfer a
participation in its Advance, including the claims for
payment of interest as may be necessary to give effect to
this provision.
32.2 Notwithstanding Article 32.1, no portion of any payment or
satisfaction of all or part of any amount payable to such
Lender hereunder received in connection with or as a result
of legal proceedings brought by or in the name of such Lender
shall be payable pursuant to Article 32.1, to any other
Lender where each other Lender has had an opportunity to join
in such proceedings yet has declined to do so. Each Lender
shall give prior written notice to each other Lender of its
intention to institute legal proceedings in any jurisdiction.
32.3 If at any time any Lender (the "Refunding Bank") shall be
required to refund to the Borrower any amount which has been
paid to or received by it on account of any part of any
amount payable by the Borrower hereunder and in respect of
which it has paid an amount to any other Lender pursuant to
Article 32.1, such other Lender shall against re-transfer of
the purchased participation in the Advance including the
claims for payment of interest repay a proportionate amount
of the sum so refunded together with such amount (if any) as
is necessary to reimburse the Refunding Bank the appropriate
portion of any interest it shall have been obliged to pay
when refunding such amount as aforesaid for the period whilst
such other Lender held the amounts to be refunded.
32.4 If a Lender receives satisfaction as set forth in Article
32.1, it shall give notice thereof to the Facility Agent. The
Facility Agent shall then calculate the amount to be paid
pursuant to Article 32.1. Such Lender shall pay this amount
within the time period set forth by the Facility Agent to the
Facility Agent which will then distribute the amount among
the other Lenders. Each of the Lenders hereby authorises the
Facility Agent to assign to the Lender receiving such
satisfaction and to accept the assignment of, such
participations in the Advance including claims for payment of
interest on their behalf as set forth in Article 32.1. The
Facility Agent shall confirm the assignments to all Lenders
in writing every time such assignments take place. Article
32.4 sentences 1 through 3 apply mutatis mutandis in case of
a refund pursuant to Article 32.3.
ARTICLE 33
SET-OFF
Each Lender may set off any matured obligation owed by the Borrower
under this Agreement (to the extent beneficially owned by that
Lender) against any obligation (whether or not matured) owed by the
Lender to the Borrower, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in
different currencies, the Lender may convert either obligation at a
market rate of exchange in its usual course of business for the
purpose of set-off.
71
ARTICLE 34
MISCELLANEOUS
34.1 AMENDMENTS
Any alteration or amendment to this Agreement and its Annexes
shall be in writing and requires the consent of the Borrower,
of the Majority Lenders and of the Guarantors provided,
however, that any alteration or amendment to Article 1.26,
1.48, 1.51, 2.2, 2.3, 5.3, 7, 8, 11.2, 15, 16, 17, 20.2, 22,
30.2, 32, 34.1 and Article 34.2 requires the consent of all
Lenders. Verbal agreements shall have no legal effect.
34.2 GOVERNING LAW
The form and content of this Agreement, as well as the rights
and obligations of the Lenders, the Borrower and the Facility
Agent shall be subject to and construed in accordance with
the laws of the Federal Republic of Germany in every respect.
34.3 PARTIAL INVALIDITY
Should any provision of this Agreement be or become wholly or
partly, invalid, then the remaining provisions shall remain
valid. Invalid provisions shall be construed in accordance
with the presumable intent of the parties and the purpose of
this Agreement.
34.4 PLACE OF PERFORMANCE
Place of performance of this Agreement shall be Munich.
34.5 JURISDICTION
The applicable place of jurisdiction for all disputes arising
out of or in connection with this Agreement shall be Munich.
The Lenders and the Facility Agent may however, at their
option, commence proceedings before any other court of law in
which assets of the Borrower are situated. In the latter
case the laws of Federal Republic of Germany shall, pursuant
to Article 34.2, also be applicable.
34.6 DECISION AS TO THE AUSFALLBURGSCHAFT
The resolution by the Federal Republic of Germany and the
State of Thuringia to grant the Ausfallburgschaft to secure
the claims of the Lenders under this Agreement has been taken
in the decision attached to this Agreement as Annex 23. C& L
has confirmed by letter to Vereinsbank dated July 3, 1998
that this Agreement fully and correctly incorporates the
conditions as set out in the respective decision.
34.7 ENGLISH TRANSLATION
This Agreement as well as its Annexes 1, 2, 3, 13, 14, 15,
16, 18 and 20 have been negotiated on the basis of the
English translation attached to the German version of this
Agreement as Annex 24. Such translation shall not be binding
upon the parties hereto, but it may serve for the
interpretation of the original German version of this
Agreement. In case of remaining doubts, the German original
version shall prevail in any case.
72
34.8 ANNEXES
The Annexes 1 through 24 form an integral part of this
Agreement.
34.9 COUNTERPARTS
This Agreement has been executed in the German language in
three (3) counterparts. One copy shall be provided to the
Borrower and to each of the Original Lenders. Each executed
copy shall have the effect of an original.
73
July 6, 1998
--------------------------------------------
Zellstoff- und Papierfabrik Rosenthal GmbH & Co KG
--------------------------------------------
Bayerische Hypotheken- und Wechsel-Bank Aktiengesellschaft
(in its capacity as Original Lender )
--------------------------------------------
Bayerische Vereinsbank Aktiengesellschaft
(in its capacity as Facility Agent and Original Lender)
74
ANNEX 1
ORIGINAL LENDERS' COMMITMENTS
LENDER COMMITMENT IN
DM
Bayerische Hypotheken- und Wechsel-Bank DM 254 Mio.
Aktienge-sellschaft
Bayerische Vereinsbank Aktiengesellschaft DM 254 Mio.
----------------
TOTAL DM 508 Mio.
75
ANNEX 2
DRAWDOWN REQUEST
[Borrower's Letterhead]
To: Bayerische Vereinsbank AG
Attention: [ ]
Telefax: [ ]
Date: []
Pursuant to Article 5.3 of the Agreement dated [ ], 1998 between
us and the Lenders (the "Loan Agreement"), we hereby request the
following drawdown under the
[ ] General Tranche [ ] Special Credit Tranche [ ] Working Capital
Tranche
of the Loan Facility:
(a) Drawdown Date: [ ]
(b) Interest Period: [ ] months
(c) Amount of Advance: DM [ ]
(d) The Advance will be used for the following specific purposes:
- General Tranche, Special Credit Tranche: [] Project Costs,
i.e.
[]
[]
[] Construction
Costs Over-run
[] Project Costs
prior to Signing
Date
[] Funding of
Required Balance
[] Payments to
Investment
Reserve Account
- Working Capital Tranche: [] Funding of
working capital
needs
[] Project Costs,
i.e.
[]
[]
[] Construction
Costs Over-run
[] Project Costs
prior to Signing
Date
76
[] Funding of
Required Balance
[] Payments to
Investment
Reserve Account.
The amount of the Advance has to be transferred to the Proceeds
Account.
We hereby confirm that:
(i) the representations and warranties set out in Article 18 of
the Loan Agreement are correct at the date hereof and will be
correct immediately after the Advance is made; and
(ii) no Event of Default set out in Article 22 of the Loan
Agreement or Potential Event of Default has occurred and is
continuing or might result from the making of the Advance; and
(iii) no material adverse change in the operations and prospects of
the Borrower has occurred and is continuing.
-----------------------------------------
ZELLSTOFF- UND PAPIERFABRIK ROSENTHAL GMBH & Co KG
77
ANNEX 3
NOTICE TO LENDERS OF ADVANCE DUE
[Vereinsbank's Letterhead]
To: [Lender]
Date: [ ]
Pursuant to Article 5.5 resp. 6.3 of the loan agreement dated ......
between Zellstoff- und Papierfabrik Rosenthal GmbH & Co KG and a
consortium of banks (the "Loan Agreement"), we hereby give notice of
the Borrower's Drawdown Request under the
[] General Tranche [] Special Credit Tranche [] Working capital
Tranche
of the Loan Facility:
(a) Drawdown Date:
(b) Amount of Advance: DM
(d) Lender's participation: DM
We confirm that all conditions precedent in accordance with Article
4 of the Loan Agreement have been fulfilled or complied with by the
Borrower.
In case of drawings under the General Tranche or the Working Capital
Tranche, we request that you transfer the above amount, being your
share of the Advance to our Account No........... with Bayerische
Vereinsbank AG, Dresden Branch no later than 10:00 a.m. on Munich
time on the Drawdown Date. In case of drawings under the Special
Credit Tranche we request that you issue a Primary Liability
Undertaking Declaration in the form of the draft of Annex 21 of the
Loan Agreement in favour of DtA or, as the case may be, KfW in the
amount of your a.m. participation in the Special Credit Tranche.
Bayerische Vereinsbank AG
-----------------------------
78
ANNEX 13
FORM OF SECURITY POOLING AGREEMENT
SECURITY POOLING AGREEMENT
between
Bayerische Vereinsbank Aktiengesellschaft, Munich
and
Bayerische Hypotheken- und Wechsel-Bank Aktiengesellschaft, Munich
(hereinafter together referred to as the "Lenders")
and
Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG, Blankenstein
(hereinafter referred to as the "Borrower")
WHEREAS, the Lenders and the Borrower have concluded the Loan
Agreement dated [...] in the amount of DM 508 Mio. for the purpose
of the conversion of the existing pulp mill at Blankenstein/
Thuringia to a sulphate based mill for the production of bleached
softwood kraft pulp (the "Loan Agreement"); and
WHEREAS, the Borrower has granted certain security rights for the
purpose of securing the obligations outstanding under the Loan
Agreement pursuant to the Security Documents; and
WHEREAS, the Borrower will grant certain security rights for the
purpose of securing the obligations outstanding under the Loan
Agreement in accordance with the terms and conditions of the Loan
Agreement; and
WHEREAS, Bayerische Vereinsbank Aktiengesellschaft pursuant to
Article 24 of the Loan Agreement has been appointed Security Trustee
for the Lenders;
NOW THEREFORE, the Lenders and the Borrower agree as follows:
1. DEFINITIONS
Except as otherwise stated herein or as otherwise defined,
terms defined in the Loan Agreement (including the preamble)
shall have the same meaning herein as in the Loan Agreement.
2. SECURITY RIGHTS
The Borrower or, as the case may be, certain third parties
have provided or will immediately provide the following
security rights for the Borrower's obligations under the Loan
Agreement set forth in the following Security Documents:
- the C&L Ausfallburgschaft dated [...]
79
- the Assignment Agreement (Project and Delivery Contracts)
dated [...],
- the Assignment Agreement (Insurances) dated [...],
- the Pledge Agreement (Hedging Agreements) dated [...],
- the Mortgage Deeds in the amounts of DM [...] and DM [...]
dated [...] and the Mortgage Purpose Declarations dated
[...],
- the Pledge and Title Transfer Agreements of Shares in the
Borrower (including the security rights granted concerning
the pledge of the shares in the GmbH) dated [...],
- the Title Transfer Agreements for Movable Property dated
[...] and dated [...],
- the Proceeds Accounts Pledge Agreement dated [...],
- the Debt Service Reserve Account Pledge Agreement dated
[...],
- the Investment Reserve Account Pledge Agreement dated
[...],
- the Stand-By Equity Funding Guarantee dated [...],
- the Shareholders' Undertakings Agreement dated [...], and
- the future pledge agreement related to the cash deposit
account under Section 3. (i) of the Shareholders'
Undertaking.
In accordance with Articles 19.4.1(j) and 20.4 of the Loan
Agreement, the Borrower has undertaken to assign or, as the
case may be, transfer by way of security from time to time
its rights, title and interest under the insurances to be
taken out by the Borrower in the future, under the future
Material Project Contracts or, as the case may be, the future
transfer of Movable Property and to grant to the Lenders such
further security rights to comply with its negative pledge
undertaking contained in Article 19.4.2 (a) of the Loan
Agreement. The security rights granted pursuant to the
Security Documents are jointly referred as the "Security
Rights".
3. PURPOSE OF THE SECURITY DOCUMENTS, RETRANSFER
3.1 The Security Rights shall serve as security for the purposes
set out in the Security Documents and in the security
agreements to be concluded between the Borrower and the
Lenders or, as the case may be, the Security Trustee from
time to time as set out in Section 2 above, the Security
Documents and/or the Loan Agreement.
3.2 After all claims secured in accordance with Section 3.1 above
have been satisfied, the Lenders or, as the case may be, the
Security Trustee shall retransfer the Security Rights
included in this Pooling Agreement, which have not been used
by them to the Borrower or to the respective third party
provider of such Security Right. This shall, however not
apply, if the Lenders or, as the case may be, the Security
Trustee are obliged by law to retransfer any Security Rights
or any excess proceeds to a third party.
4. POWERS OF SECURITY TRUSTEE/AGENT
4.1 Vereinsbank, pursuant to Article 24 of the Loan Agreement,
has been appointed security agent or, as the case may be,
security trustee for the Lenders in connection with the
Security Rights granted or to be granted by the Borrower
(Vereinsbank in both capacities hereinafter referred to as
the "Security Trustee"). In relation to such appointment,
each Lender hereby authorises the Security Trustee:
(a) to make or accept on its behalf any declarations
required for the providing, administration and
management or liquidation of the Security Rights and to
exercise such rights, remedies, powers and discretions
as are specifically delegated to or conferred upon the
Security Trustee by the Loan Agreement, this Pooling
Agreement and/or the Security
80
Documents together with such powers and discretions as
are reasonably incidental thereto; and
(b) to take such action on its behalf as may from time to
time be authorised under or in accordance with the Loan
Agreement, this Pooling Agreement and/or the Security
Documents.
4.2 The Security Trustee shall have no duties, obligations or
liabilities to any of the Lenders beyond those expressly
stated in the Loan Agreement, this Pooling Agreement and/or
any of the Security Documents.
4.3 Each of the Lenders hereby authorises the Security Trustee:
(a) to enter into and execute each of the Security
Documents substantially in the respective forms set out
in the Annexes to the Loan Agreement; and
(b) in each and every case, to hold the Security Rights
thereby created for itself and as agent and/or trustee
for such Lender in the manner contemplated by the Loan
Agreement, this Pooling Agreement or, as the case may
be, by the relevant Security Document.
4.4 Subject to Section 4.5 below, the Security Trustee in the
exercise of any right or power and as to any matter not
expressly provided for by this Pooling Agreement or in any
Security Document, may act or refrain from acting in
accordance with the instructions of the Majority Lenders and
shall be fully protected in so doing. In the absence of any
such instructions, the Security Trustee may act or refrain
from acting as it shall see fit. Any such instructions shall
be binding on all the Lenders.
Subject to Section 4.5 below, any alteration or amendment to
this Pooling Agreement or any of the Security Documents shall
be in writing and requires the consent of the Borrower and of
the Majority Lenders.
4.5 Except with the prior written consent of each Lender and the
Guarantors, the Security Trustee shall not have authority to
agree with the Borrower any amendment to, or on other action
in relation to, any of the Security Documents which would
have the effect of releasing the Borrower from the security
created by any of the Security Documents, unless such release
is required by law or provided for in the Security Documents.
4.6 The Security Trustee shall be solely entitled to enforce any
rights under this Pooling Agreement and the Security
Documents against the Borrower acting in its own name and/or
on behalf of the Lenders.
5. REALISATION OF SECURITY RIGHTS, DISTRIBUTION OF PROCEEDS
With respect to the realisation of the Security Rights the
respective provisions of the Security Documents shall apply.
After the Loan Agreement has been terminated pursuant to
Article 22 thereof the proceeds resulting from the
realisation of the Security Rights shall be applied in
accordance with the following order of priority:
- first, in or towards payment of all costs, charges, fees
and expenses of or incurred by the Security Trustee under
or pursuant to the Security Documents and/or this Pooling
Agreement;
81
- secondly, in or towards payment to the Lenders of any
arrears of interest, any fees payable and any costs and
expenses reimbursable under the Loan Agreement then due
and unpaid;
- thirdly, in payment to the Lenders of all other interest,
payable under the Loan Agreement;
- forthly, in payment to the Lenders of the principal of
the Loan Agreement and any other sum due under the Loan
Agreement;
- fifthly, in payment of the surplus to the Borrower or
other person entitled to it.
6. COSTS, TAXES, COMPENSATION
6.1 The Borrower shall reimburse the Security Trustee of all
costs, charges, fees and expenses incurred or payable by it
in connection with the Security Documents and this Pooling
Agreement. If and to the extent that such costs, charges,
fees and expenses are not recoverable from the Borrower, they
will be allocated to the Lenders pro rata their respective
Lender's Commitment. Article 23.12 of the Loan Agreement
shall apply mutatis mutandis.
6.2 The Borrower shall pay to the Security Trustee a fee as
agreed in Article 25.3 of the Loan Agreement.
7. INFORMATION
Upon request, the Security Trustee shall furnish copies of
the Security Documents to the Lenders and shall inform the
Lenders of the contents of any material notice, certificate
or other document received by the Security Trustee from the
Borrower under or pursuant to any Security Document. In
addition, any material action authorised and effected by the
Security Trustee in accordance with Section 4.4 above shall
be promptly notified to each Lender by the Security Trustee.
8. MISCELLANEOUS
8.1 This Pooling Agreement is concluded for an indefinite period
of time and shall remain in force as long as any amount
under the Loan Agreement remains outstanding.
8.2 The form and content of this Pooling Agreement, as well as
the rights and obligations of the Lenders and the Borrower
shall be subject to and construed in accordance with the laws
of the Federal Republic of Germany in every respect. Place of
performance of this Agreement shall be Munich. The applicable
place of jurisdiction for all disputes arising out of or in
connection with this Agreement shall be Munich. The Security
Trustee may however, at its option, commence proceedings
against the Borrower also before any other court of law in
which assets of the Borrower are situated.
8.3 Should any provision of this Pooling Agreement be or become
wholly or partly invalid, then the remaining provisions shall
remain valid. Invalid provisions shall be construed in
accordance with the intent of the parties and the purpose of
this Pooling Agreement.
8.4 The Security Trustee shall be exempt from the restrictions
set out in Section 181 of the German Civil Code (Burgerliches
Gesetzbuch).
82
8.4 The Lenders are entitled to transfer their respective rights
and obligations under this Pooling Agreement to any such
party, to which portions of the Loan Facility are transferred
pursuant to Article 30 of the Loan Agreement.
8.5 Any amendment to this Pooling Agreement shall be made in
writing.
8.6 In addition the provisions of Article 23 of the Loan
Agreement in relation to the rights and obligations of the
Facility Agent shall apply mutatis mutandis.
[...], [...] -------------------------------------
Zellstoff- und Papierfabrik Rosenthal
Verwaltungs-GmbH
[...], [...] -------------------------------------
Bayerische Hypotheken und Wechsel-
Bank Aktiengesellschaft
[...], [...] -------------------------------------
Bayerische Vereinsbank Aktiengesellaft
83
ANNEX 14
FORM OF SHAREHOLDERS' UNDERTAKINGS
SHAREHOLDERS' UNDERTAKINGS AGREEMENT
between
Mercer International, Inc.
(hereinafter referred to as "Mercer"),
Spezialpapierfabrik Blankenstein GmbH
(hereinafter referred to as "Spezialpapierfabrik"),
Zellstoff- und Papierfabrik Rosenthal Verwaltungs-GmbH
(hereinafter referred to as "Verwaltungs-GmbH")
on the one side
and
Bayerische Vereinsbank Aktiengesellschaft
acting in its own name and in the name of
Bayerische Hypotheken- und Wechsel-Bank Aktiengesellschaft
(hereinafter together referred to as the "Banks")
on the other side
WHEREAS, Zellstoff- und Papierfabrik Rosenthal GmbH & Co KG (the
"Borrower") is a newly founded project company which was created as
a GmbH & Co KG with Zellstoff- und Papierfabrik Rosenthal
Verwaltungs-GmbH as Komplementar (general partner) and
Spezialpapierfabrik Blankenstein GmbH as Kommanditistin (limited
partner) on December 31, 1997; and
WHEREAS, the Borrower intends to convert the existing pulp mill at
Blankenstein/ Thuringia, to a sulphate based mill for the production
of bleached softwood kraft pulp (the "Project"); and
WHEREAS, Mercer has agreed to act as sponsor of the Project; and
WHEREAS, Mercer owns (indirectly through Zellstoff- und Papierfabrik
Xxxxxxxxx Xxxxxxx XxxX, Xxxxxxxx) 00 % of the shares of
Spezialpapierfabrik, (indirectly through Spezialpapierfabrik) 100 %
of the shares of Verwaltungs-GmbH and (indirectly through
Spezialpapierfabrik) 100 % of the limited partner shares
(Kommanditbeteiligung) of the Borrower; and
WHEREAS, Spezialpapierfabrik owns 100 % of the shares of
Verwaltungs-GmbH; and
WHEREAS, Bayerische Vereinsbank Aktiengesellschaft and Bayerische
Hypotheken- und Wechsel-Bank Aktiengesellschaft as Original Lenders
have agreed to provide the Borrower with a fifteen-year project
finance facility in the amount of DM 508 Mio. pursuant to the terms
of the Loan Agreement dated [...] (the "Loan Agreement"); and
84
WHEREAS, the conclusion of this Shareholders' Undertakings Agreement
by the parties hereto is a condition precedent for the obligations
of the Banks under the Loan Agreement;
NOW THEREFORE, each of Mercer, Spezialpapierfabrik and Verwaltungs-
GmbH (hereinafter together referred to as the "Shareholders") agrees
with the Banks as follows:
1. DEFINITIONS
Terms used but not otherwise defined herein shall have the
meaning ascribed to them in the Loan Agreement.
2. UNDERTAKINGS OF MERCER
Mercer undertakes with the Banks:
a) to maintain a direct or indirect ownership in the
capital of each of Spezialpapierfabrik and Verwaltungs-
GmbH and in the limited partner shares of the Borrower
of at least 51% unless, with the prior written consent
of the Agent (as defined below in Section 6(d) hereof)
(not to be unreasonably withheld having regard to the
interests of the Banks), a party owning at least 51% of
such capital and shares has assumed all of the
obligations of Mercer hereunder; and
b) to provide Spezialpapierfabrik with such funds as it may
require to discharge its undertakings under Sections
3(a)and 3(b) hereof and to assure that
Spezialpapierfabrik and Verwaltungs-GmbH comply with
their respective undertakings towards the Banks
hereunder.
3. UNDERTAKINGS OF SPEZIALPAPIERFABRIK
Spezialpapierfabrik undertakes with the Banks:
a) to ensure that the Borrower has an equity capital
contribution and/or subordinated loans of, in aggregate
and on the basis set forth in Article 4.1(h) of the Loan
Agreement, not less than DM 45,000,000 at the latest
prior to the first drawdown by the Borrower of any
amounts under the Loan Agreement;
b) (i) in the event that the Total Construction Costs (as
set out in the table on page 2 of the Initial Banking
Case) shall exceed the amount of DM 572,150,000 (as
certified by the Technical Consultant) and/or in the
event that the Total Financing Costs (as set out in the
table on page 3 of the Initial Banking Case) shall
exceed the amount of DM 89,709,000, to provide the
Borrower at the request of the Agent with additional
limited partner's equity capital contributions or
further subordinated loans in the amount of up to DM
38,800,000, in each case in such amounts as the Agent
reasonably determines to be necessary for the Borrower
to finance such excess amounts (taking into account the
availability of drawings under the General Tranche
pursuant to Article 5.4 of the Loan Agreement), unless
the Borrower has caused sufficient funds to be
transferred from the Shareholders' Account to the
Proceeds Account or otherwise has given evidence
reasonably satisfactory to the Agent that additional
equity and/or subordinated loans are available to the
Borrower for the payment of such excess amounts and (ii)
after the Completion Date to provide the Borrower at
the request of the Agent with additional limited
partner's equity capital contributions or further
subordinated loans in the amount of up to the difference
between DM 25 Mio. and the aggregate amount of all
equity contributions and subordinated loans made
pursuant to (i) above including by way of drawing under
the Standby Equity Funding Guarantee to prevent the
institution of insolvency proceedings ("Konkurs" or
"Vergleich")
85
against the Borrower in such amounts as the Agent
reasonably determines to be necessary for the Borrower
to cure with long lasting effect the situation having
given rise to the threatening of insolvency proceedings
applying the standard of care of a prudent merchant
("Sorgfalt eines ordentlichen Kaufmanns");
c) cause the Borrower to comply in due time and in proper
form as required by applicable law with its undertaking
pursuant to Article 19.4.1 (r) of the Loan Agreement;
d) not to request any payment from the Borrower under the
Subordinated Loans, if such payment would constitute a
breach by the Borrower of its undertaking pursuant to
Article 19.4.2 (d) of the Loan Agreement and procure
that the agreement relating to such Subordinated Loan is
on the terms of the agreed draft (as per Schedule 1
hereto) and that no amendments to the terms of such
agreement are made without the prior written consent of
the Agent;
e) not to agree to a decrease of the limited partner's
equity capital (as defined in the partnership agreement
of the Borrower in Section 3) of the Borrower, whilst
any amount of principal is outstanding under the Loan
Agreement;
f) not to release its direct ownership in the capital of
Verwaltungs-GmbH and in the limited partner shares of
the Borrower below an ownership of at least 51 % (except
with the prior written consent of the Agent, not to be
unreasonably withheld having regard to the interests of
the Banks);
g) (i) not to discharge Xx. Xxx Xxxxxx as general manager
(Geschaftsfuhrer) of Verwaltungs GmbH prior to the date
falling six months after the Completion Date, unless it
has appointed as his replacement an experienced
professional in the paper and pulp industry consented to
by the Agent, such consent not to be unreasonably
withheld and (ii) after such date, only to appoint
experienced professionals in the paper and pulp industry
or experienced finance professionals as general managers
(Geschaftsfuhrer) of Verwaltungs GmbH;
h) not to agree to any amendment, variation or waiver of or
in relation to, the partnership agreement constituting
the Borrower that would materially adversely affect the
rights of the Agent and the Banks under the Loan
Agreement;
i) to procure the issuance of the Stand-By Equity Funding
Guarantee in the amount of DM 25 Mio. in favour of the
Banks and the Borrower as security for the equity
funding obligation of Spezialpapierfabrik under Section
3. (b) (i) and (ii) above, substantially in the form of
the draft of Schedule 2 hereto, which shall be released
by the Banks (A) to the extent that Spezialpapierfabrik
has provided funds pursuant to Section 3 (b) (i) or, as
the case may be, (ii) above and (B) after the Completion
Date shall have occured, in such amounts and to such
extent that amounts have been credited to the cash
deposit account (established in the name of the Borrower
with Vereinsbank Dresden branch to create a security for
the obligations of Spezialpapierfabrik pursuant to
Section 3. (b) (ii)) out of the funds on the
Shareholders' Account, which would otherwise have been
available for distributions to Spezialpapierfabrik
pursuant to Article 20.2 (b) of the Loan Agreement
(which funds may be used whether or not the Borrower has
made a profit in its most recent fiscal year), such cash
deposit account being pledged to the Banks and the
Borrower as security for the equity funding obligation
of Spezialpapierfabrik under Section 3. (b) (ii) of this
Agreement in such form as the Banks may reasonably
require;
j) as long as any amount under the Loan Facility or any
part thereof remains outstanding or any other sum is
payable pursuant to the Loan Agreement, to provide the
Agent in sufficient copies for each of the Lenders with
the following statements, prepared in compliance with
all relevant legal and profes-
86
sional requirements and according to generally accepted
accounting principles:
- as soon as available, but in any event no later than
ninety (90) days after the end of each financial
year, the audited fiscal year-end financial
statements, including the balance sheet, the profit
and loss account, the certified auditor's report of
Spezialpapierfabrik and the supplemental tax balance
sheet (steuerliche Erganzungsbilanz) in relation to
its capacity as limited partner of the Borrower;
- as soon as available, but in any event no later than
sixty (60) days after the end of each fiscal half-
year, its half-year reports, including the balance
sheet and the profit and loss account;
- as soon as available the tax returns
(Steuererklarungen) of Spezialpapierfabrik and the
tax assessments of the Borrower (einheitliche und
gesonderte Gewinnfeststellungsbescheide) and
Spezialpapierfabrik (Steuerbescheide) relating to
the income of Spezialpapierfabrik or, as the case
may be, the Borrower.
All such financial information (except tax returns and
tax assessments) shall be in English or submitted to the
Agent in an English translation certified by
pezialpapierfabrik as being true and accurate; and
k) to provide the Agent with a copy of any Subordinated
Loan concluded by it with the Borrower.
The undertakings of Spezialpapierfabrik under a), b), c) and
i) shall be deemed to be given also in favour of the Borrower
(as third party beneficiary pursuant to Section 328 German
Civil Code).
4. UNDERTAKINGS OF MERCER AND SPEZIALPAPIERFABRIK
Mercer and Spezialpapierfabrik undertake to comply in all
material respects with their respective obligations and
undertakings assumed by them in the Acquisition Agreement
concerning the shares of the Borrower concluded with the
Treuhandanstalt, Anstalt des offentlichen Rechts, dated July
3, 1994, as the same may be amended or modified from time to
time.
5. UNDERTAKINGS OF THE SHAREHOLDERS
Each of the Shareholders undertakes with the Banks:
a) not to request or, in the case of Mercer not to procure
to request, any distribution by way of a dividend or
other payment from the Borrower, if such payment would
constitute a breach by the Borrower of any of its
obligations under the Loan Agreement;
b) not, without the prior written consent of the Agent (not
to be unreasonably withheld having regard to the
interests of the Banks), to sue or commence proceedings
against the Borrower or to seek a resolution or order
for the voluntary winding-up or dissolution of the
Borrower; and
c) promptly to repay to the Borrower any sum received by it
(including by way of set-off) from the Borrower (in its
respective capacity as shareholder, limited partner or,
in the case of Spezialpapierfabrik, as lender of the
Subordinated Loans), where the payment of such sum by
the Borrower breaches its undertakings under the Loan
Agreement or, in the case of a payment under the
Subordinated Loans, if such payment was not due.
87
6. MISCELLANEOUS
a) The form and content of this Agreement, as well as the
rights and obligations of the Shareholders and the Banks
shall be subject to and construed in accordance with the
laws of the Federal Republic of Germany in every
respect. Place of performance of this Agreement shall be
Munich. The applicable place of jurisdiction for all
disputes arising out of or in connection with this
Agreement shall be Munich. The Agent may however, at its
option, commence proceedings before any other court of
law in which assets of the Shareholders are situated.
b) Mercer herewith designates and appoints
Spezialpapierfabrik as its authorized agent upon which
service of process may be served, but only in respect of
legal actions instituted in the Federal Republic of
Germany against Mercer in connection with this
Agreement.
c) Should any provision of this Agreement be or become
wholly or partly, invalid, then the remaining provisions
shall remain valid. Invalid provisions shall be
construed in accordance with the intent of the parties
and the purpose of this Agreement.
d) Bayerische Vereinsbank Aktiengesellschaft shall be the
agent (the "Agent") of Bayerische Hypotheken- und
Wechsel-Bank AG and any other bank, to which rights and
obligations under this agreement are transferred, in
relation to all matters of this agreement.
e) The Banks are entitled to transfer their respective
rights and obligations under this agreement to any such
party, to which portions of the Loan Facility are
transferred pursuant to Article 30 of the Loan
Agreement. The Shareholders acknowledge that the Banks
may be obliged under the general conditions of Deutsche
Ausgleichsbank ("DtA") or, as the case may be,
Kreditanstalt fur Wiederaufbau ("KfW") to transfer the
rights and benefits under this Agreement to DtA and/or
KfW to the extent the Banks assume primary liability
towards DtA and/or KfW for special credits granted by
them to the Borrower.
f) Any amendment to this agreement shall be made in
writing.
g) This Agreement shall remain in effect whilst any amounts
(whether principal, interest, fees or otherwise) remain
outstanding under the Loan Agreement, provided that
Mercer shall be discharged from all further obligations
under this Agreement at such time as, in compliance with
Section 2(a) hereof, it ceases to maintain a direct or
indirect ownership in the capital of Spezialpapierfabrik
und Verwaltungs-GmbH and in the limited partner shares
of the Borrower of at least 51%.
[...], [...] -------------------------------------
Mercer International, Inc.
[...], [...] -------------------------------------
Spezialpapierfabrik Blankenstein GmbH
88
[...], [...] -------------------------------------
Zellstoff- und Papierfabrik Rosenthal
Verwaltungs-GmbH
[...], [...] -------------------------------------
Bayerische Vereinsbank
Aktiengesellschaft
We hereby accept to act as process agent of Mercer International
Inc. as set out in Section 6 b) above.
[...], [...] -------------------------------------
Spezialpapierfabrik Blankenstein GmbH
89
ANNEX 15
MINIMUM INSURANCE SCHEDULE
INSURANCES TO BE EFFECTED BY ZELLSTOFF- UND
PAPIERFABRIK ROSENTHAL GMBH & CO KG:
A. PERIOD UNTIL COMPLETION DATE
1. MARINE CARGO INSURANCE
COVER: All Mill, equipment, machinery, spare parts and
other items for incorporation in the Project
against "All Risks" of physical loss or damage
while in transit by sea, air or the land or
inland waterway portion of the journey from the
time the insured items leave the warehouse or
factory anywhere in the world (including
Germany) for shipment or transit to, and until
they are unloaded at the Project Site at
Blankenstein "Eastern Thuringia, Germany or
vice versa.
To include institute cargo clauses (A),
institute war, clauses (cargo, air cargo),
institute strikes clause (cargo, air cargo) or
equivalent and a 50/50 clause.
SUM INSURED: DM 5 Mio. anyone consignment.
DEDUCTIBLE: Nil but property insured outside Europe DM
10,000.
INSURED: The Borrower, contractors and subcontractors,
the Lenders' Technical Adviser and the Lenders.
2. MARINE ADVANCE LOSS OF REVENUE
COVER: Loss of Debt Service and fixed expenses
following delay in start of commercial
operation of the Mill as a direct result of
physical loss or damage covered under the
Marine insurance.
SUM INSURED: DM 100 Mio.
INDEMNITY
PERIOD: 12 months from the Completion Date.
DEDUCTIBLE: Not more than 30 days.
INSURED: The Borrower and the Lenders.
3. CONTRACTORS' "ALL RISKS"
COVER: The contract works executed and in the course
of execution, the materials and temporary
works, while on or adjacent to
90
the Project site, including the laydown areas,
at Blankenstein, against "all risks" of
physical loss or damage.
SUM INSURED: DM 470,000,000
GEOGRAPHICAL
LIMITS: Germany
DEDUCTIBLES: DM 1 Mio.
PERIOD OF
COVER: From the first Drawdown Date under the Loan
Facility and during the design, engineering,
procurement, construction, testing,
commissioning and start-up of the Plant until
Completion Date plus 24 months defects
liability period.
INSURED: The Borrower, the Borrower's/owner's
representative, the contractors and all
subcontractors, the Lenders Technical Adviser
and the Lenders.
MAIN
EXCLUSIONS: Unexplained shortage, cost of improvement to
design, contractual penalties and consequential
losses, cash, vehicles, vessels, aircraft.
4. ADVANCE LOSS OF REVENUE
COVER: Loss of debt service and fixed expenses
following delay in start of commercial
operations as a direct result of physical loss
or damage covered under the contractors' "All
Risks" policy.
SUM INSURED: DM 100 Mio.
INDEMNITY
PERIOD: 12 months from the scheduled Completion Date.
INSURED: The Borrower and the Lenders.
DEDUCTIBLE: Not more than 30 days.
GENERAL: Cover to include additional costs of working;
denial of access transits (other than sea or
air), off-site storage suppliers extension to
premises of fuel and raw materials suppliers,
plant suppliers, failure of utilities
extension, customers' extension including the
electrical distribution and transmission system
and premises of the REC.
5. GENERAL/THIRD PARTY/PUBLIC/PRODUCTS LIABILITY
COVER: Legal and contractual liability to third
parties for death or bodily injury or loss or
damage to their property arising out of all
activities of the insured parties arising in
connection with
91
the construction, testing and commissioning and
start-up of the Mill.
LIMIT OF
INDEMNITY: DM 30 Mio. any one occurrence.
GEOGRAPHICAL
LIMITS: Worldwide.
DEDUCTIBLE: (a) The first DM 5,000 in respect of damage to
property only.
(b) The first 10 % but not exceeding DM 5,000
in respect of products liability.
INSURED: The Borrower, the Borrower's/owner's
representative, contractors and all
subcontractors, the Lenders' Technical Adviser
and the Lenders.
PERIOD OF
COVER: From the first drawdown under Loan Facility and
during the design, engineering, procurement,
construction, testing, commissioning and start-
up of the Facility, until the Completion Date
plus 24 months defects liability period.
COVER: Worldwide jurisdiction clause; cross liability
clause; sudden and accidental seepage,
pollution and contamination and the costs
incurred of cleaning up (except in USA and
Canada)
6. EXISTING STRUCTURES "ALL RISKS" INSURANCE
COVER: All assets comprising the existing Mill
including but not limited to, the buildings and
their contents, machinery, stock, fixtures,
fittings and all other personal property,
against "All Risks" (including machinery
breakdown) of physical loss or damage.
SUM INSURED: DM 406 Mio.
DEDUCTIBLE: The first DM 1 Mio. in respect of each and
every occurrence.
INSURED: The Borrower, the contractors, subcontractors,
the Lenders' Technical Adviser and the Lenders.
7. BUSINESS INTERRUPTION
COVER: Loss of revenue as a direct consequence of loss
of or damage to the facilities and insured
under paragraph 6 (machinery breakdown) above.
SUM INSURED: DM 65 Mio.
INDEMNITY
PERIOD: 12 months.
92
DEDUCTIBLE: 7 days but in respect of machinery breakdown.
INSURED: The Borrower, the Lenders.
Insurers and reinsurers to waive all rights of
subrogation against each insured and their
respective assigns, employees, agents,
officers, partners and directors.
8. MISCELLANEOUS:
Other insurance as is customary, desirable or necessary to
comply with local or other requirements, such as motor
vehicle liability insurance (capped at a limit of DM 7.5
million bodily injury per person) for all vehicles owned,
hired, leased, used or borrowed in connection with the
Project and Environmental Impairment Cover as required under
Annex 1 of the English Environmental Act.
B. OPERATING PERIOD FROM COMPLETION DATE
1. "ALL RISKS" INSURANCE
COVER: All assets comprising the Project including but
not limited to, the buildings and their
contents, machinery, stock, fixtures, fittings
and all other personal property, against "All
Risks" (including Machinery Breakdown) of
physical loss or damage.
SUM INSURED: a value sufficient to reinstate/restore the
property, to be agreed by the Lenders.
DEDUCTIBLE: The first DM 1 Mio. in respect of each and
every occurrence
INSURED: The Borrower, the Lenders.
2. BUSINESS INTERRUPTION
COVER: Loss of debt service and fixed operating
expenses as a direct consequence of loss of or
damage to the Project facilities and insured
under paragraph 1 (including machinery
breakdown) above.
SUM INSURED: DM 240 Mio..
INDEMNITY
PERIOD: 24 months.
DEDUCTIBLE: 7 days but in respect of machinery breakdown.
INSURED: The Borrower, the Facility Agent and the
Lenders.
3. GENERAL/THIRD PARTY/PUBLIC/PRODUCTS LIABILITY
COVER: Legal and contractual liability of the Insured
parties for death or bodily injury to third
parties or loss or damage to their
93
property arising out of the ownership,
operation, use or maintenance of the
facilities.
LIMIT OF
INDEMNITY: DM 30 Mio..
DEDUCTIBLE: DM 15,000.
INSURED: The Borrower and the Lenders.
COVER: Worldwide jurisdiction clause; cross liability
clause; sudden and accidental seepage,
pollution and contamination, and the costs
incurred of cleaning up.
4. MISCELLANEOUS
Other insurance which,
a) is customary or necessary to comply with local
requirements, such as employers liability insurances in
relation to all workers employed in the Mill or in
connection with its operation; motor vehicle liability
insurance for any vehicle which is owned, hired, leased
or borrowed in connection with the Project and
Environmental Impairment Cover as required under Annex 1
of the English Environmental Act, and
b) are considered by the Borrower/owner to be desirable or
prudent, or required by the Lenders such as directors
and officers insurance.
94
ANNEX 16
PERFORMANCE CRITERIA SCHEDULE
Until the date, which is 24 months after the Completion Date, the
following Performance Criteria shall be achieved by the Mill:
1. PRODUCTION CAPACITY:
The production capacity shall be 280,000 tons pulp per year.
2. PRODUCT QUALITY:
The quality of the products to be produced by the Mill shall
be as follows:
PROPOSED
REFERENCE
Brightness, ECF pulps, mill operation limit 89+
Brightness, ECF pulps, market spec. 89
Brightness, TCF pulps, mill operation limit min 86
Brightness, TCF pulps, market spec. min 85
Dirt specks, mm 2/kg, ECF and TCF max 3
Tear, at tensile 70, ECF and TCF min 13
3. ENVIRONMENTAL EMISSIONS:
The environmental emissions shall comply with the
requirements set out in the permits and licenses relating to
the Project and all other official requirements.
4. ANNUAL COSTS FOR WOOD AND CHEMICALS:
The total annual costs for wood and chemicals shall not
exceed by more than ten (10) % the total costs referred to as
Wood Costs and Chemical Costs on pages 3 and 4 of the Section
titled "OPER" in the Initial Banking Case. Increases in the
prices of wood and chemicals will not be taken into
consideration, i.e. only variations in the input volumina
will be considered.
95
ANNEX 18
FORM OF TRANSFER AGREEMENT
TRANSFER AGREEMENT
between
[....]
(the "Assigning Lender")
and
[....]
(the "Assignee")
PREAMBLE
WHEREAS, by the agreement dated [...], 1998 (the "Loan Agreement")
the Assigning Lender together with the other Lenders has provided to
the Borrower the Loan Facility for an aggregate principal amount of
up to DM 508,000,000. The Assigning Lender has assumed a Lender's
Commitment in the amount of DM [......].
WHEREAS, the Assigning Lender has pursuant to Article 30.3 of the
Loan Agreement the right to assign to a bank or financial
institution its legal position as Lender including all its rights,
benefits and obligations under the Loan Agreement in whole or in
part in amounts of not less than DM 10 Mio..
WHEREAS, the Assigning Lender is desirous to transfer its rights,
benefits and obligations related to an amount of DM [ ]
of the Loan Facility to the Assignee and the Assignee is desirous of
assuming the legal position of the Assigning Lender related thereto
including all rights, benefits and obligations.
NOW THEREFORE, the parties to this Transfer Agreement hereby agree
as follows:
1. DEFINITIONS
Terms used but not otherwise defined herein shall have the
meaning given to them in the Loan Agreement.
2. TRANSFER OF ASSIGNING LENDER'S PARTICIPATION IN THE ADVANCE
Subject to the payment to the Facility Agent of a fee in the
amount of DM 2,000 and to the condition precedent that the
Assignee pays the transfer price on the date of payment as
defined in Section 6.2 and that DtA or, as the case may be,
KfW agrees to the transfer of the obligations assumed by the
Assigning Lender under its Primary Liability Undertaking
Declarations, if any, the Assigning Lender herewith assigns
and transfers and the Assignee herewith assumes, the
Assigning Lender's legal position related to such Lender's
Commitment in the amount set out in Section 6.1 hereof,
including all rights, benefits and obligations of the
Assigning Lender under the Loan Agreement, the Security
Documents and the Security Pooling Agreement as against the
96
Borrower (if transferable) and the other parties thereto and
under any Primary Liability Undertaking Declaration of the
Assigning Lender towards DtA or, as the case may be, KfW (the
"Transferred Position") effective the date of payment as
defined in Section 6.2. Upon the transfer as set forth above
becoming effective, the Assigning Lender shall be released
from the obligations related to the Transferred Position to
the Borrower on the one hand and to the Lenders on the other
hand.
3. CONFIRMATIONS
3.1 The Assignee confirms that it has received a copy of the Loan
Agreement and all other documentation and information
required by it in connection with the transaction
contemplated by this Transfer Agreement.
3.2 The Assignee confirms that it has made and will continue to
make its own assessment of the validity, enforceability and
sufficiency of the Loan Agreement and the Transfer Agreement
and has not relied and will not rely on the Assigning Lender,
the Original Lenders and the Facility Agent or any statements
made by any of them in this respect.
3.3 The Assignee confirms that it has made and will continue to
make its own credit assessment of the Borrower and has not
relied and will not rely on the Facility Agent or the
Original Lenders or any statements made by any of them in
this respect.
3.4 The Assigning Lender hereby confirms that it has fulfilled
its obligations arising out of the Loan Agreement with
respect to the Transferred Position until the date hereof.
The Assigning Lender gives no representation or warranty and
assumes no responsibility with respect to the validity or
enforceability of the Loan Agreement or any document related
thereto and assumes no responsibility for the financial
conditions of the Borrower or any other party to the Loan
Agreement or for the performance and observance by the
Borrower or any other party of any of its obligations under
the Loan Agreement and all such representations and
warranties, whether expressed or implied by law or otherwise,
are hereby excluded.
4. Miscellaneous
4.1 The Assigning Lender shall inform the Facility Agent without
undue delay of the transfer of the Transferred Position
pursuant to Section 2 hereof by sending an executed copy of
this Transfer Agreement to it.
4.2 The Assignee herewith empowers the Facility Agent to exercise
such rights, powers of attorney and discretions as set forth
in the provisions of the Loan Agreement, the Security
Documents and the Security Pooling Agreement.
4.3 Without prejudice to any future change of address, all
correspondence to the Assignee shall be sent to the following
address:
[.......]
Attention:
Fax:
5. LEGAL PROVISIONS
5.1 Any alteration or amendment to this Transfer Agreement shall
be in writing.
5.2 The form and content of this Transfer Agreement shall be
subject to and construed in accordance with, the laws of the
Federal Republic of Germany in
97
every respect. Non-exclusive place of jurisdiction for all
disputes arising out of or in connection with this Transfer
Agreement shall be Munich.
5.3 Should any provision of this Transfer Agreement be or become
wholly or partly invalid, then the remaining provisions shall
remain valid. Invalid provisions shall be construed in
accordance with the intent of the parties and the purpose of
this Transfer Agreement.
5.4 This Transfer Agreement has been executed in the German
language in three (3) counterparts. One executed copy shall
be provided to the Assigning Lender, the Assignee and the
Facility Agent. Each executed copy shall have the effect of
an original.
6. ADVANCE SUBJECT TO TRANSFER
6.1 Advance subject to transfer:
Assigning Lender's Commitment prior to transfer: DM [ ]
Transferred Position to Assignee: DM [ ]
Assigning Lender's Commitment after transfer: DM [ ]
6.2 Date of payment by Assignee to
Assigning Lender: [ ]
6.3 Account of Assigning Lender to which payment
shall be effected: [ ]
[ ], [ ] 199[ ]
--------------------------------------------
[Assigning Lender]
--------------------------------------------
[Assignee]
We hereby confirm the Borrower [and DtA/KfW] has [have] consented to
the above assignment and transfer and we hereby agree on our own
behalf as Lender and on behalf of the other Lenders to the above
Transfer Agreement.
[ ], [ ] 199[ ]
--------------------------------------------
[Facility Agent]
98
ANNEX 20
SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT
to the
Loan Agreement dated [..........] in the amount of DM 508 Mio.
(as defined below)
between
Zellstoff- und Papierfabrik Rosenthal GmbH & Co KG, Blankenstein
(hereinafter called the "Borrower")
and
Bayerische Vereinsbank Aktiengesellschaft, Munich
acting in the name and on behalf of the Lenders of the Loan Agreement
(hereinafter called "Vereinsbank")
WHEREAS, the Borrower and Bayerische Vereinsbank Aktiengesellschaft
and Bayerische Hypotheken- und Wechsel-Bank Aktiengesellschaft are
parties to the Loan Agreement in the amount of DM 508 Mio. dated
[...] (the "Loan Agreement"); and
WHEREAS, reference is made to the Preamble of the Loan Agreement, in
particular to the financing plan described therein, which shall be
deemed to be repeated herein; and
WHEREAS, the Borrower and Vereinsbank have confirmed to have full
knowledge of the contents of the Loan Agreement; and
WHEREAS, Vereinsbank upon the instruction of the Borrower has made
an application to [DtA/KfW] with respect to a Special Credit in
relation to the partial financing of the Project; and
WHEREAS, [DtA/KfW] in its letter dated [...] has confirmed to
Vereinsbank its preparedness to refinance a Special Credit Tranche
in the amount of DM [...] under the Loan Agreement (the "Refinancing
Agreement"); and
WHEREAS, the Borrower has requested Vereinsbank in its capacity as
Facility Agent of the Lenders to conclude this Supplemental
Agreement;
NOW THEREFORE, the Borrower and Vereinsbank agree as follows:
1. DEFINITIONS
Except as otherwise stated herein or as otherwise defined,
terms defined in the Loan agreement shall have the same
meaning herein as in the Loan Agreement.
99
2. SPECIAL CREDIT TRANCHE
Subject to the terms and conditions of the Loan Agreement and
this Supplemental Agreement, the Lenders shall provide the
Borrower with the following Special Credit Tranche:
a) SPECIAL CREDIT PROGRAM: [ERP-Umwelt- und
Energiesparprogramm/Umweltprogramm of DtA /
Mittelstandsprogramm/ Umweltprogramm of KfW].
b) AMOUNT OF SPECIAL CREDIT TRANCHE: DM [...] (in words:
[...] million Deutsche Marks);
c) RATE OF DISBURSEMENT: [..] %;
d) DISBURSEMENTS: Disbursements under this Special Credit
Tranche shall be made [in one amount/in minimum amounts
of not less than DM .....] pursuant to a Drawdown
Request of the Borrower to Vereinsbank. Any amount drawn
down by the Borrower under this Special Credit Tranche
shall exclusively be disbursed to the Proceeds Account;
e) SPECIAL CREDIT TRANCHE AVAILABILITY PERIOD: This Special
Credit Tranche shall be available for drawings by the
Borrower from the date of fulfilment of the conditions
precedent pursuant to Article 4 of the Loan Agreement
until [...being a date not later than the end of the
availability period as set out in the Refinancing
Agreement or February 15, 2001, whichever is earlier];
f) INTEREST: [..] % p.a. as from the date determined by
[DtA/KfW]; interest is payable in arrears on [..], [..],
[..] and [..] of each year, the first time on [..];
g) TERM OF FIXED INTEREST: until [...];
h) COMMITMENT FEE: The Borrower shall pay to Vereinsbank
for distribution to the Lenders a Commitment Fee of
[...] % [p.a./per month] on the undisbursed amounts of
this Special Credit Tranche from the signing date of
this Supplemental Agreement until the end of the Special
Tranche Availability Period, which shall be payable
quarterly in arrears on March 31, June 30, September 30
and December 30 of each calendar year.
i) REPAYMENT: The Borrower shall repay the Advance
outstanding under this Special Credit Tranche to the
Account in semi-annual repayment instalments of DM [...]
(in words: [...] million Deutsche Marks) on [..] and
[..] of each year, the first time on [..] and one final
repayment instalment in the amount of [...] (in words:
[...] million Deutsche Marks) on [..].
j) PREPAYMENT: The Borrower is entitled to prepay the
Advance under this Special Credit Tranche in whole or in
part in accordance with the "General Conditions for
[DtA/ERP-] program" [without giving any notice].
[Partial prepayments must be in the amount of one
repayment instalment or a multiple thereof].
k) SPECIAL CONDITIONS: [.....].
100
3. APPLICABILITY OF FURTHER PROVISIONS
In addition the General Conditions [(Allgemeine Bestimmungen
fur Investitionskredite der KfW/Allgemeine Bedingungen fur
DtA/ERP-Proramme] of [DtA/KfW] attached hereto, which forms
an integral part of this Supplemental Agreement, the terms
and conditions of the Loan Agreement shall be applicable.
[ ], [ ] 199[ ]
--------------------------------------------
Zellstoff- und Papierfabrik Rosenthal GmbH & Co KG
[ ], [ ] 199[ ]
--------------------------------------------
Bayerische Vereinsbank Aktiengesellschaft