<Page>

                                                                   EXHIBIT 10.16

                                    CONTRACT

                                       FOR

                 ENGINEERING, DESIGN, PROCUREMENT, CONSTRUCTION,

                              ERECTION AND START UP

                                      OF A

                                 KRAFT PULP MILL

                                     BETWEEN

                             ZELLSTOFF STENDAL GMBH

                                       AND

                           RWE INDUSTRIE-LOSUNGEN GMBH*








* Certain non-public information has been omitted from the appendices to
  Exhibit 10.16 pursuant to a request for confidential treatment filed with
  the SEC on March 31, 2003. Such non-public information has been filed with
  the SEC on a confidential basis.

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                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                             PAGE
                                                                                             ----
<S>                                                                                           <C>
ART. 1     DEFINITIONS AND INTERPRETATION......................................................1
ART. 2     CONTRACT APPENDICES................................................................11
ART. 3     OBLIGATIONS OF THE CONTRACTOR-- NATURE AND EXTENT OF THE DELIVERY..................12
ART. 4     OBLIGATIONS OF THE OWNER...........................................................22
ART. 5     PARTIES' REPRESENTATIVES; INDEPENDENT ENGINEER.....................................25
ART. 6     QUALITY CONTROL....................................................................27
ART. 7     PRE-ACTIVITIES; UNFORESEEN SITE CONDITIONS.........................................32
ART. 8     TIME SCHEDULE......................................................................33
ART. 9     CONTRACT PRICE, PAYMENT TERMS AND ADJUSTMENTS TO CONTRACT PRICE....................40
ART. 10    ADVANCE PAYMENT, PERFORMANCE AND WARRANTY SECURITY.................................45
ART. 11    CHANGES IN LAW.....................................................................48
ART. 12    CHANGES............................................................................49
ART. 13    OWNERSHIP AND RISK OF LOSection....................................................54
ART. 14    INSURANCE..........................................................................59
ART. 15    WORK ENVIRONMENT RESPONSIBILITY....................................................62
ART. 16    MECHANICAL COMPLETION..............................................................64
ART. 17    TRAINING; COMMISSIONING, SYSTEM START-UP, START-UP AND SCHEDULE A TESTS............68
ART. 18    72-HOUR TEST AND ACCEPTANCE OF WORKS...............................................72
ART. 19    SCHEDULE B TESTS...................................................................77
ART. 20    DEFECTS LIABILITY..................................................................81
ART. 21    LIQUIDATED DAMAGES.................................................................87
ART. 22    INTELLECTUAL PROPERTY RIGHTS.......................................................89
ART. 23    SUSPENSION.........................................................................91
ART. 24    TERMINATION........................................................................93
ART. 25    CONTRACTORS' SUPPLIERS............................................................101
ART. 26    FORCE MAJEURE.....................................................................104
ART. 27    COPYRIGHT AND CONFIDENTIALITY.....................................................108
ART. 28    GOVERNING LAW; DISPUTES...........................................................112
ART. 29    INDEMNITY OBLIGATIONS.............................................................112
ART. 30    MISCELLANEOUS.....................................................................114
ART. 31    CONTRACT LANGUAGE.................................................................118
ART. 32    COMMENCEMENT DATE.................................................................118
ART. 33    ASSIGNMENT; TRANSFER..............................................................119
</Table>

                                        i
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Contract                                                               Page 1(3)

CONTRACT AGREEMENT

OWNER                                          CONTRACTOR

Zellstoff Stendal GmbH                         RWE Industrie-Losungen GmbH
Niedergorner Damm 1                            Sonnenwall 85
D-39596 Arneburg                               D-47051 Duisburg

Tel. +49 39321 50310                           Tel. +49 203 309 2411
Fax. +49 39321 50320                           Fax. +49 203 309 2478

VAT No. 3108-108-05531                         VAT No. DE 811187276

The following agreement has been concluded between the Contractor and the Owner.

                                    RECITALS

A.             The Owner wishes to build, own, operate and finance a softwood
               kraft pulp mill with a capacity of 552,000 Adt/year and 1,700
               Adt/day BSKP at Arneburg, Germany and wishes to appoint the
               Contractor, upon the terms and subject to the conditions set out
               herein on a lump-sum, fixed price, turnkey basis to perform the
               Works. The Contractor wishes to undertake the Works to the
               standards and in the manner set out herein.

B.             The Owner and the Contractor have entered into this Contract
               after extensive negotiations on the form and substance hereof and
               each confirm that for such purpose the Contract could not in any
               way be considered to be either Party's standard terms and
               conditions.

C.             Each Party has carefully considered and accepted the risks
               allocated to it in this Contract. Accordingly, the Parties
               consider that the terms and conditions hereof, including the
               remuneration payable to the Contractor and the termination rights
               set out in the Contract, are comprehensive and exclusive and
               consider all relevant risks relating to the Works, whether
               foreseeable or not.

ART.1          DEFINITIONS AND INTERPRETATION

SECTION 1.1.   IN THIS CONTRACT, UNLESS THE CONTEXT OTHERWISE REQUIRES, THE
               FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:

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Contract                                                               Page 2(4)

Acceptance                    Means the issuance or deemed issuance by the Owner
                              of the Acceptance Certificate.

Acceptance Certificate        Means the certificate to be issued pursuant to
                              Article 18.

Acceptance Date               Means the date upon which Acceptance has occurred.

Adt                           Means air dry metric tonnes.

Agent                         Means Bayerische Hypo- und Vereinsbank AG in its
                              capacity as agent under the Project Financing
                              Facility Agreement in relation to the Plant
                              entered into between, INTER ALIOS, the Owner and
                              Bayerische Hypo- und Vereinsbank AG, and any of
                              its subsequent successors and permitted
                              transferees and assigns.

Ancillary Facilities          Means those ancillary facilities relating to the
                              Plant as more fully set forth in the
                              Specifications, including offices, utilities,
                              warehousing and shipping facilities.

Appendix                      Means an appendix to this Contract as described in
                              Article 2.

Banks                         Means the financial institutions and other
                              institutions that provide limited recourse
                              financing to the Owner for the construction,
                              testing and operation of the Plant.

BGB                           Means the German Civil Code.

Base Case                     As used in Sections 3.14, 4.5 and 19.3, means the
                              relevant line items in the "Key" and "Oper" sheets
                              in the so-called "base case" scenario (and the
                              assumptions relating thereto) attached hereto as
                              Appendix 4.

BSKP                          Means bleached softwood kraft pulp.

Business Day                  Means a Day that is not a Saturday, Sunday, or
                              Day which is recognized as a legal holiday at the
                              registered office of

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Contract                                                               Page 3(5)

                              the Owner or the Contractor set forth above.

Change                        Means any change, amendment, modification,
                              addition or deletion to or in respect of the
                              Works.

Change in Law                 Has the meaning assigned to that term in
                              Article 11.

Change Order                  Means an order to effect a Change in the
                              Contractor's obligations and/or rights as a result
                              of changed circumstances in relation to the Works.

Commencement Date             Means the date when all conditions specified in
                              Article 32 have been fulfilled or waived.

Commissioning                 Means, with respect to any System, the process of
                              testing all control functions of, and performing
                              water runs or equivalent tests on, such System
                              following Mechanical Completion of such System and
                              the process of making such System ready for
                              operation.

Confidential Information      Means any documents, data or other information
                              furnished directly or indirectly to one Party by
                              the other Party or its affiliates or subsidiaries
                              or acquired from the performance of the Works, or
                              any other information concerning the technical and
                              business activities and know-how of the other
                              Party or its affiliates or subsidiaries, in each
                              case as and to the extent provided in Article 27,
                              whether such information has been furnished prior
                              to, during or following termination of the
                              Contract.

Contract                      Means this Contract entered into between the Owner
                              and the Contractor, together with the Appendices.

Contract Day                  Means the Day on which the Contract is signed by
                              both Parties.

<Page>

Contract                                                               Page 4(6)

Contract Price                Means the sum specified in Section 9.1, subject to
                              such additions and adjustments thereto or
                              deductions therefrom as may be made pursuant to
                              Section 9.8 or Article 12.

Contractor                    Means RWE Industrie-Losungen GmbH and its legal
                              successors or permitted assigns.

Contractor's Equipment        Means machines, tools, apparatus, appliances or
                              things of every kind to be used by the Contractor
                              or any Contractor's Suppliers in or for the Works
                              or for the performance of any tests of the Works
                              or the Plant in accordance with the Contract, all
                              of which are to be provided by the Contractor, but
                              excludes any Materials or equipment intended to
                              form part of the Works.

Contractor's Personnel        Means all personnel the Contractor uses in
                              execution of its obligations under the Contract.

Contractor's Representative   Has the meaning assigned to that term in
                              Section 5.2.

Contractor's Supplier         Means any supplier, agent or subcontractor of the
                              Contractor (including any Key Supplier) for the
                              execution of parts of the Works.

Day                           Means a calendar day of the Gregorian Calendar.

Defect                        Means:

                              (i)   any error, omission or defect in the Works;
                                    or

                              (ii)  anything falling within the meaning of
                                    "Mangel" in Section 633 BGB.

Defects Liability Period      Means the period during which the Contractor is
                              liable for Defects as set forth in Article 20.

Design Documentation          Has the meaning assigned to that term in
                              Section 6.4.

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Contract                                                               Page 5(7)

Detailed Program              Means a program for the execution of the Works,
                              prepared in accordance with Section 8.7.

EPC Price Calculation         Means the Project Cost Summary dated November 28,
                              2001, including the underlying detailed cost
                              estimate, of which both Parties have a copy.

Event of Force Majeure        Has the meaning assigned to that term in
                              Section 26.1.

Excepted Risks                Means the risks specified in Section 13.2 which
                              are not insurable and which are excepted from the
                              Contractor's responsibility for risk of loss.

HGB                           Means the German Commercial Code.

Independent Engineer          Means the independent engineer appointed by the
                              Banks to provide consulting services in connection
                              with the Plant.

Interconnection Points        Those places, to be agreed upon by the Owner and
                              the Contractor in accordance with Appendix 3,
                              Ex. 8 and identified in Appendix 3, Ex. 2.5,
                              drawing 100-0-2102, at which the Owner is required
                              to supply the temporary utilities specified in
                              Appendix 3, Ex. 4.2.

Key Suppliers                 Means suppliers of certain Systems identified in
                              Appendix 3, Ex. 10.

Laws                          Means applicable laws, orders, rules, ordinances,
                              regulations, by-laws, statutory orders, executive
                              orders and decrees, judicial decisions,
                              notifications or other similar directives having
                              the force of law, or legally binding instructions,
                              policy guidelines, codes or standards, in each
                              case adopted or issued by Relevant Authorities
                              (or, if applicable, by the European Union).

<Page>

Contract                                                               Page 6(8)

Major Capital Spares          Means certain spare parts to be supplied by the
                              Contractor as specified in Appendix 3, Ex. 14.4.

Materials                     Means apparatus, materials, articles and things of
                              all kinds to be provided and incorporated in the
                              Works by the Contractor, but does not include
                              Contractor's Equipment.

Mechanical Completion         Means, with respect to a System, a Non-System
                              Department or the Works, as the case may be, the
                              issuance or deemed issuance by the Owner of the
                              Mechanical Completion Certificate pursuant to
                              Article 16.

Mechanical Completion Date    Means the date on which Mechanical Completion of a
                              System, a Non-System Department or the Works, as
                              the case may be, occurs.

Mechanical Completion Tests   Means the tests described in Article 16.

Milestone                     Means an element of the Works identified in
                              Appendix 3, Ex. 20 and in the Detailed Program the
                              timely achievement of which is relevant to the
                              timely completion of the Works.

Milestone Date                Means the targeted date for each Milestone set
                              forth in Appendix 3, Ex. 20.

Minimum Performance           Means the minimum performance levels that must be
Requirements                  achieved for Acceptance or to satisfy the Schedule
                              B Tests, as set forth in Appendix 3, Ex. 12.4 or
                              12.6, as applicable, and referred to therein
                              (after giving effect to the last paragraph under
                              "Scope of Work of Contractor" in Appendix 3, Ex.
                              1.1.) as "absolute requirements," "absolutely
                              required" or "make good."

Month                         Means a calendar month.

Non-System Department         Means a Department listed in Appendix 3, Ex. 2.4
                              that is not included in a System.

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Contract                                                               Page 7(9)

                              included in a System.

Operational Acceptance        Means, with respect to a System or the Works, as
                              the case may be, the issuance or deemed issuance
                              by the Owner of the Certificate of Operational
                              Acceptance pursuant to Article 17.

Owner                         Means Zellstoff Stendal GmbH and its legal
                              successors or permitted assigns.

Owner's Representative        Has the meaning assigned to that term in
                              Section 5.1.

Owner's Scope                 Means those works and services required to be
                              undertaken by the Owner as set forth in Article 4
                              and Appendix 3, Ex. 4.

Party                         Means the Owner or the Contractor.

Parties                       Means the Owner and the Contractor.

Payment Milestone             Means the events or deliveries specified in
                              Appendix 2, Ex. 9, the completion of which shall
                              be the basis for payment under the Contract in the
                              respective percentages specified therein and in
                              accordance with the procedures set forth in
                              Article 9.

Performance Requirements      Means the performance figures set forth in
                              Appendix 3, Ex. 12.4 to be achieved during the
                              Schedule B Tests.

Permits                       Means permits or applications therefor, consents,
                              approvals and licenses from Relevant Authorities.

Plant                         Means the whole and, where the context requires,
                              part of the kraft pulp mill with a net capacity of
                              1,700 Adt/d BSKP and 552,000 Adt/year,
                              respectively, the water intake and output
                              facilities, all interconnection facilities to
                              utilities, transportation and storage facilities,
                              the Ancillary Facilities and all related
                              infrastructure and activities related thereto, to

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Contract                                                              Page 8(10)

                              be constructed at the Site, a summary description
                              of which is set forth in Appendix 3, Ex. 1.2.

Pre-Activities                Means certain activities to be undertaken by the
                              Contractor before the Commencement Date in
                              accordance with Article 7.

Pre-Activity Agreement        Means the contract, in the form of Appendix 3, Ex.
                              22, executed by the Owner and the Contractor in
                              connection with the Pre-Activities.

Punch List                    Means a list of those items or parts of the Works
                              which the Contractor and the Owner agree are not
                              complete, but which are not material to the safe
                              operation of the Works and the Plant at levels
                              consistent with the net capacity requirements set
                              forth in Appendix 3, Ex. 1.2 and Ex. 2.1.

Relevant Authorities          Means:

                              (a)  the Federal Government and State Government
                                   of Sachsen-Anhalt;

                              (b)  any political sub-division of the Federal and
                                   State Government and any local government
                                   authority with jurisdiction over the Plant;
                                   and

                              (c)  any ministry, department, authority,
                                   instrumentality or agency of the Federal and
                                   State Government and/or any such political
                                   sub-divisions, and their respective
                                   successors and permitted assigns.

Schedule A Test(s)            Means the test(s) described in Article 17 to be
                              performed in connection with the Start-up of
                              certain individual Systems, as specified in
                              Appendix 3, Ex. 12.1 and 12.2.

Schedule B Test(s)            Means the test(s) described in Article 19 to
                              confirm the performance of certain individual
                              Systems, as specified in

<Page>

Contract                                                              Page 9(11)

                              Appendix 3, Ex. 12.3 and 12.4.

Scheduled Acceptance Date     Means the date set forth in Section 8.5 by which
                              the Contractor has agreed to achieve Acceptance,
                              as the same may be extended in accordance with
                              Section 8.9 and Article 12.

Scheduled Mechanical          Means the date set forth in Section 8.2 by which
Completion Date               the Contractor has agreed to achieve Mechanical
                              Completion of the Works, as the same may be
                              extended in accordance with Section 8.9 and
                              Article 12.

Security Agent                Means Bayerische Hypo- und Vereinsbank AG in its
                              capacity as agent under the Project Financing
                              Facility Agreement in relation to the Plant
                              entered into between, INTER ALIOS, the Owner and
                              Bayerische Hypo- und Vereinsbank AG, and any of
                              its subsequent successors and permitted
                              transferees and assigns.

Selected Subcontract          Means any contract entered into between the
                              Contractor and a Selected Supplier in relation to
                              the Works.

Selected Supplier             Means Metso Paper, Andritz-Ahlstrom Corporation,
                              Kvaerner Chemetics AB, FFE Minerals Denmark A/S,
                              AE Energietechnik GmbH, MAN Turbomaschinen AG,
                              PURAC GmbH (in a joint venture with Lurgi Bamag
                              GmbH), LINDE-KCA-Dresden GmbH, Hochtief
                              Construction AG and PI-Consulting OYJ.

72-Hour Test                  Means the 72-hour test run to demonstrate
                              fulfillment of the Minimum Performance
                              Requirements as set forth in Article 18 and
                              Appendix 3, Ex. 12.5 and 12.6.

Site                          Means the Owner's site at Arneburg/Sachsen-Anhalt
                              in Germany upon which the Plant is to be
                              installed, including

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Contract                                                             Page 10(12)

                              the water intake/outlet site(s) and
                              interconnecting land all as shown in Appendix 3,
                              Ex. 6.

Specifications                Means the complete technical specifications for
                              the Works contained in Appendix 3, Ex. 6 and Ex.
                              7.

Start-up                      Means cooking of chips using liquor has started in
                              at least four (4) digesters sequentially.

Start-up Period               Means the period from Start-up to the Acceptance
                              Date.

System                        Means each of the Plant systems specified in
                              Appendix 3, Ex. 1.1 and Ex. 6.

System Start-up               Means operation of any System with the respective
                              media/raw material or, with respect to any System
                              that does not require media or raw material,
                              operation of such System for its intended purpose.

Time Schedule                 Means the detailed schedule for carrying out the
                              Works as established in accordance with Article 8.

Warranties                    Means the warranties given by the Contractor to
                              the Owner in respect of the Works as set out in
                              Article 20.

Week                          Means a period of seven (7) consecutive Days.

Works                         Means all or part of the works (including
                              Materials, supplies, machinery, equipment, tools,
                              buildings, roads, ways, Major Capital Spares,
                              and/or other items of whatever nature (excluding
                              the Contractor's Equipment), documents or services
                              to be planned, designed, engineered, manufactured,
                              procured, constructed, erected, installed,
                              commissioned, tested, completed, carried out,
                              undertaken or done by the Contractor in accordance
                              with the Contract (including any part of the Works
                              performed prior to the Contract Day and all
                              Pre-Activities to be performed by the

<Page>

Contract                                                             Page 11(13)

                              Contractor pursuant to the Pre-Activity
                              Agreement), for the provision of a fully operating
                              Plant (but excluding the Owner's Scope) as
                              described in more detail, but without limitation,
                              in the exhibits contained in Appendix 3, including
                              Ex. 3.

SECTION 1.2.   INTERPRETATION

               In this Contract:

1.2.1.         words importing the singular shall include the plural and vice
               versa except where the context otherwise requires;

1.2.2.         references to the word "INCLUDE" or "INCLUDING" are to be
               construed without limitation; and

1.2.3.         an "AFFILIATE" of a person shall be construed as a reference to a
               subsidiary or holding company, or a subsidiary of a holding
               company of such person.

SECTION 1.3.   HEADINGS AND TITLES

               The headings and references thereto in the Contract are included
               for ease of reference and shall not affect the interpretation of
               the Contract.

SECTION 1.4.   OWNER ASSISTANCE

Any obligation imposed on the Owner pursuant to the terms of the Contract to
assist, or to use its best efforts to assist, the Contractor shall not be
construed as any obligation on the Owner to do anything in breach of Laws.

ART. 2         CONTRACT APPENDICES The following appendices form part of this
               Contract:

                              Appendix

                              1:   Direct Agreement

                              2:   Commercial - Comprising Exhibits

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Contract                                                             Page 12(14)

                              3:   Technical - Comprising Exhibits

                              4:   Base Case

                              The text of the Articles of the Contract and the
                              Appendices are intended to supplement each other.
                              In case of incongruity between the text of the
                              Articles of the Contract and any of the
                              Appendices, the text of the Articles of the
                              Contract shall take precedence.

ART. 3         OBLIGATIONS OF THE CONTRACTOR -- NATURE AND EXTENT OF THE
               DELIVERY CONTRACTOR'S GENERAL OBLIGATIONS

SECTION 3.1.   Subject to the terms and conditions of this Contract, the
               Contractor agrees to plan, design, engineer, procure, deliver,
               construct, erect, install, start up and test the Works.

SECTION 3.2.   The works and services to be performed by the Contractor shall
               include the following:

               (a)    all planning, design, engineering, manufacture,
                      procurement, delivery to the Site and erection or
                      installation of all equipment, systems, components and
                      Materials (including the first fill of oils for machinery
                      and ion exchange resin for the feedwater treatment plant,
                      one set of cutter knives, one set of felts and wires, and
                      Major Capital Spares) needed to provide, commission, test,
                      and put into operation the Works, to achieve Acceptance by
                      the Scheduled Acceptance Date and to carry out the
                      Schedule B Tests, all in accordance with the Contract;

               (b)    the performance of, and completion of the Works in
                      accordance with, appropriate detailed design, engineering
                      and construction methods and techniques in accordance with
                      the Contract, the Specifications, all Laws and Permits
                      (including the Permit requirements and any environmental
                      remediation required based on the Environmental

<Page>

Contract                                                             Page 13(15)

                      Impact Assessment Report (UMWELTVERTRAGLICHKEITSSTUDIE)
                      dated September 18, 2001 related to the Works and the
                      permit values contained in the Permits or applications for
                      Permits (or amendments to Permits) listed in items 1-6 of
                      Appendix 3, Ex. 4.4) and recognized rules of sound
                      engineering practice.

               (c)    the scheduling, execution and completion of the Works in
                      accordance with the Detailed Program established pursuant
                      to Section 8.7;

               (d)    the application for and obtaining of all Permits
                      (including the updated emissions Permit for which an
                      application has been filed and any necessary amendments or
                      modifications to Permits obtained by the Contractor, but
                      excluding those Permits to be obtained by the Owner
                      pursuant to Section 4.6) in good time so as not to delay
                      the execution and completion of the Works and the timely
                      initiation and diligent execution of other measures
                      necessary for the granting of the Permits;

               (e)    the timely submission of all data, information and
                      documentation that the Owner may reasonably request,
                      including the provision of such information and assistance
                      to enable the Owner to apply for and obtain the Permits
                      specified in Section 4.6 as set forth in Appendix 3,
                      Ex. 4.4; and

               (f)    the provision of complete documentation, including
                      operation and maintenance manuals in accordance with
                      Appendix 3, Ex. 3.2 and "as built" drawings in accordance
                      with Appendix 3, Ex. 3.2.2.1 and Ex. 19.

<Page>

Contract                                                             Page 14(16)

SECTION 3.3.   THE CONTRACTOR SHALL:

               (a)    at all times exercise (and has exercised) the skill, care
                      and diligence in the carrying out and completion of the
                      Works of a reasonable and prudent contractor, fully
                      skilled and experienced in the carrying out of work
                      similar to the Works, and has and will have the resources,
                      experience, qualifications and capabilities as are
                      required to fully perform its obligations under the
                      Contract;

               (b)    ensure that all Materials, equipment and workmanship shall
                      be of first-class quality, and all equipment, machinery
                      and Materials installed in the Works shall be new and
                      conform to the Specifications. With respect to Materials,
                      equipment and machinery for which a standard is not
                      prescribed in the Specifications or elsewhere in the
                      Contract, such Materials, equipment and components shall
                      conform to quality levels of leading European pulp mills
                      and shall not be of a type generally recognized in the
                      industry as Material, equipment or components to be
                      avoided or unsuitable (including due to susceptibility to
                      erosion or corrosion) for the application in which they
                      are to be used;

               (c)    carry out (and has carried out) the Works as a reasonable
                      and prudent contractor to ensure the safe operation of the
                      Works and Plant at levels consistent with the net capacity
                      requirements set forth in Appendix 3, Ex. 1.2 and Ex.2.1;

               (d)    carry out (and has carried out) the Works so as to comply
                      with the Performance Requirements and the Warranties;

               (e)    liase with the Owner regarding the management of the Works
                      and the coordination of the Owner's Scope with the Works,

               all as further defined in the Contract.

<Page>

Contract                                                             Page 15(17)

               SETTING OUT

SECTION 3.4.   The Contractor shall be responsible for accurate setting out of
               the Works on the Site and for the correctness of the positions,
               levels, dimensions and alignment of all parts of the Works and
               for the provision of all necessary instruments, appliances and
               labor in connection therewith. The Contractor shall carefully
               protect and preserve all benchmarks, sight-rails, pegs and other
               things used in setting out the Works and shall replace the same
               should they become lost, damaged or destroyed in any way.

               The Contractor shall provide such information as the Owner shall
               reasonably require in relation to the setting out of the Works.

               If, at any time during the carrying out and execution of the
               Works, any errors which would affect the Works appear in the
               positions, levels, dimensions or alignment of the Works, the
               Contractor shall rectify the error at its own cost.

SECTION 3.5.   HAZARDOUS SUBSTANCES, MAN-MADE MATERIALS AND ARCHAEOLOGICAL
               FINDINGS

               Upon the discovery of any hazardous or toxic substances, man-made
               materials or fossil, coin, article of value or antiquity or any
               other thing of archaeological interest, the Contractor shall
               promptly:

               (i)    notify the Owner of such conditions;

               (ii)   provide the Owner in a timely manner with any information
                      or documentation required by the Owner to enable the Owner
                      to make any necessary application to any Relevant
                      Authority and comply with any requirements of such
                      Relevant Authority; and

               (iii)  use best efforts to mitigate the effects of any such
                      discovery on the performance of the Works (which efforts
                      shall be at the expense of the Contractor).

<Page>

Contract                                                             Page 16(18)

               Any fossils, coins, objects of value, antiques or objects of
               geological or archaeological value discovered at the Site shall
               in no case be the property of the Contractor and shall be handed
               over to the Owner. The Contractor shall take appropriate
               precautionary measures and prevent its agents and employees or
               the agents and employees of any Contractor's Suppliers from
               misappropriating or damaging any such objects.

               The Contractor shall be responsible for all costs and expenses
               associated with any hazardous substances or man-made materials
               which may be brought onto the Site, or released or deposited at
               the Site by the Contractor, any Contractor's Supplier or their
               respective affiliates, directors, officers, employees or agents
               or otherwise.

               OPPORTUNITIES FOR OTHER CONTRACTORS

SECTION 3.6.   The Contractor recognizes that certain other persons including
               the Owner will, during the carrying out of the Works, require
               access to and use of parts of the Site to carry out works and
               services in connection with or to construct, install, operate and
               maintain parts of the Plant. The Contractor shall not object to
               such access, use and works and shall in accordance with the
               requirements of the Owner afford all reasonable opportunities to
               such persons for carrying out their work and services and to the
               Owner and/or the Independent Engineer for inspecting their work
               and services, provided that such access, use, works or services
               does not unduly interfere with the Works or the Time Schedule. In
               the event and to the extent that such undue interference in
               connection with such access, use, works or services cannot be
               avoided and causes delay or additional expense to the Contractor,
               the Time Schedule and, if necessary, the Contract Price shall be
               adjusted accordingly pursuant to Sections 8.9 and 9.8,
               respectively.

<Page>

Contract                                                             Page 17(19)

               LIAISON WITH THIRD PARTIES

SECTION 3.7.   The Owner shall be responsible for coordination and liaison with
               the Independent Engineer. The Contractor shall fully cooperate
               with the Owner and the Independent Engineer in all matters
               relating to the timely completion of the Plant and all works in
               relation to it for which the Contractor is not responsible and
               shall provide such information, attend such meetings and perform
               such work as is required by the Contract or is reasonably
               requested by the Owner for such purposes.

               TRAINING

SECTION 3.8.   The Contractor shall provide full and comprehensive training in
               the German language for the Owner's personnel in accordance with
               Appendix 3, Ex. 3.5 to enable such personnel to assume operating
               control of the Plant upon Acceptance and operate the Plant
               thereafter as a reasonable and prudent operator in accordance
               with the operation and maintenance manuals and the manufacturers'
               instructions and guidelines.

               CLEARANCE OF SITE

SECTION 3.9.   The Contractor shall keep the Site and adjacent land clean, free
               and clear of all waste, rubble and hazardous substances and in a
               workmanlike condition during the term of the Contract. Prior to
               Mechanical Completion of each System, the Contractor shall clear
               away, remove from that System and (if applicable) dispose of in
               accordance with applicable Laws and Permits all Contractor's
               Equipment, surplus materials, rubbish and temporary works of
               every kind and leave the whole of that System clean, free and
               clear of all waste, rubble and hazardous substances and in a
               workmanlike condition all to the Owner's reasonable satisfaction.

               Prior to Acceptance, the Contractor shall clear away and remove
               from the Site and (if applicable) dispose of in accordance with
               applicable Laws and Permits all Contractor's Equipment, surplus
               materials, rubbish and temporary

<Page>

Contract                                                             Page 18(20)

               works of every kind related to the Works and leave the whole of
               the Site clean, free and clear of all waste, rubble and hazardous
               substances and in a workmanlike condition all to the Owner's
               reasonable satisfaction.

               The Owner may require that any pre-existing buildings, structures
               and other facilities not be cleared or removed by the Contractor
               under this Section.

               UTILITIES

SECTION 3.10.  The Contractor shall be responsible for the distribution within
               the Site, as may be required for the performance of the Works in
               accordance with this Contract, of all temporary utilities
               provided by the Owner pursuant to Section 4.2 or necessary for
               the Contractor to perform the Works. The Contractor shall, at its
               risk and cost, provide any apparatus necessary for the
               connections at the Interconnection Points and its use of such
               utilities within the Site.

               CONTRACTOR'S ADDITIONAL OBLIGATIONS

SECTION 3.11.  The Contractor shall, unless specifically excluded in the
               Contract, perform all such work and/or supply all such items and
               materials (including any spare parts that the Owner is not
               specifically required to provide pursuant to Section 4.5 when and
               as the same may become necessary for replacement of parts of the
               Works), even though not specifically mentioned in the Contract,
               as are required within the battery limits specified in
               Appendix 3, Ex. 8 for the completion, testing, functioning and
               operation of the Plant including attaining Minimum Performance
               Requirements and Acceptance of the Works, remedying any failures
               to achieve the Performance Requirements and remedying any Defects
               until the expiry of the Defects Liability Period as if such work
               and/or items and materials were expressly mentioned in the
               Contract.

<Page>

Contract                                                             Page 19(21)

               OWNER INFORMATION

SECTION 3.12.  The Owner's provision of information and/or data in accordance
               with this Contract, and the Owner's participation in the
               selection of Key Suppliers and equipment in accordance with
               Section 25.2 and in quality control as provided in Article 6 and
               any act or omission by the Owner or the Independent Engineer,
               shall not relieve the Contractor from any obligations under this
               Contract. The Contractor shall independently verify all
               documents, drawings, plans and data relating to the Works,
               whether or not supplied by the Owner, and any flaws therein shall
               not be partly or wholly attributed to the Owner as comparative
               negligence under Section 254 BGB.

               TITLE TO WORKS

SECTION 3.13.  The Contractor shall provide to the Owner good title to the Works
               and all equipment and Materials contained therein (as further
               provided in Section 13.1), and Intellectual Property Rights
               relating thereto, free of all liens, security interests,
               encumbrances or any other rights of third parties.

               The Contractor shall release the Owner from any liabilities
               toward employees of the Contractor and SOZIALKASSEN (social
               funds) pursuant to Section 1a ARBEITNEHMER-ENTSENDEGESETZ (Act
               Concerning the Secondment of Employees), including liabilities
               for making such payments imposed on any Contractor's Supplier or
               hiring agent appointed by the Contractor or any Contractor's
               Supplier.

               CONTRACTOR'S RISK; OPERATION PRIOR TO ACCEPTANCE

SECTION 3.14.  Prior to Acceptance, the Contractor shall have sole
               responsibility for the Works and, subject to the second paragraph
               of Section 13.2, operation of the Plant. Following Mechanical
               Completion, the Contractor shall instruct, supervise and carry
               out, using the Owner's personnel, Commissioning, System Start-up,
               Start-up and testing of the Plant including Schedule A Tests,
               72-Hour Test and Schedule B Tests, all as set forth in the
               Contract.

<Page>

Contract                                                             Page 20(22)

               In carrying out the Start-up and testing of the Plant, the
               Contractor shall use its best efforts (subject to compliance with
               Laws) to have the Plant meet or exceed the production projected
               in the Base Case for the period from Start-up until Acceptance.

               The Contractor shall provide until Acceptance any wear and tear
               parts that are required in excess of the amounts which are normal
               (having regard to the experience of European pulp mills during
               normal operation) for such wear and tear parts in a Plant of this
               type during the period from Commissioning until Acceptance. The
               Contractor shall also provide until expiry of the Defects
               Liability Period all necessary qualified personnel to promptly
               respond to and deal with any correction, replacement or
               rebuilding of Defects which may become apparent in the Works
               during such period.

               PERMITS

SECTION 3.15.  The Contractor (directly or through the Contractor's Suppliers),
               shall acquire and pay for all Permits which are necessary for the
               performance of the Contract, including in relation to the
               start-up, testing and operation of the Plant, in a timely manner
               so as not to delay the execution and completion of the Works,
               provided that the Contractor shall not be responsible for
               obtaining those Permits to be obtained by the Owner as specified
               in Appendix 3, Exhibit 4.4. The Contractor shall comply with all
               Permit conditions and requirements (including the Permit
               requirements and any environmental remediation required based on
               the Environmental Impact Assessment Report
               (UMWELTVERTRAGLICHKEITSSTUDIE) dated September 18, 2001) related
               to the Works and the permit values contained in the Permits or
               applications for Permits (or amendments to Permits) listed in
               items 1-6 of Appendix 3, Ex. 4.4 and, if necessary, obtain such
               amendments or modifications to such Permits as may be required by
               Law and make any modifications to the Works in accordance with
               Article 12 as may be required in order to comply with such
               Permits and/or any modifications thereto; provided that, if such
               amendments

<Page>

Contract                                                             Page 21(23)

               or modifications are required as a result of a Change in Law, the
               provisions of Article 11 shall apply. The Contractor shall also
               ensure that all Contractor's Suppliers have all Permits necessary
               for the performance of their contracts.

               The Contractor shall use its best efforts to assist the Owner
               free of charge in obtaining in a timely and expeditious manner
               the Permits to be obtained by the Owner as specified in Appendix
               3, Exhibit 4.4.

               CONTRACTOR'S INVESTIGATIONS

SECTION 3.16.  The Contractor confirms that, prior to the Commencement Date, it
               will have informed itself about all circumstances relevant to
               fulfill this Contract. The Contractor shall not thereafter make
               any claim on the basis of insufficient knowledge.

               CONTROL MEASURES

SECTION 3.17.  All control measures required by the Relevant Authorities,
               including X-ray tests, pressure testing, and examination of
               calculations and drawings, shall be attended to and paid for by
               the Contractor, who shall submit all relevant certificates and
               reports to the Relevant Authorities and to the Owner and the
               Independent Engineer without delay and in any event no later than
               two (2) Weeks before System Start up (or, if not applicable until
               later, two (2) Weeks before the date they are due).

               FINANCING

SECTION 3.18.  The Contractor shall provide to the Owner free of charge such
               information and assistance as the Owner may reasonably request in
               connection with the financing of the Plant and the Contractor
               shall enter into a direct agreement with the Banks in the form
               attached as Appendix 1.

<Page>

Contract                                                             Page 22(24)

ART. 4         OBLIGATIONS OF THE OWNER

               OWNER INFORMATION

SECTION 4.1.   The Owner shall provide to the Contractor the information and
               data described in Appendix 3, Ex. 4.7. The Owner's provision of
               such information and data shall not relieve the Contractor from
               its obligations under this Contract. The Contractor shall
               independently verify the accuracy of all such information and
               data provided by the Owner. If the Contractor notifies the Owner
               of any inconsistencies or errors in such information or data the
               Owner shall, if it agrees with the Contractor, correct such
               information or data within fifteen (15) Days from the Owner's
               receipt of notice from the Contractor. In the event that the
               Owner fails to make the agreed corrections, or if the Owner and
               the Contractor cannot reach agreement on such information or
               data, the Contractor shall be entitled to proceed on the basis of
               the information and data that were agreed or which it considers
               to be correct, respectively. The Contractor shall remain
               responsible for such information and data and in no event shall
               the Owner's failure to act entitle the Contractor to any relief
               from its obligations under this Contract, including any
               adjustment to the Contract Price or the Time Schedule.

               SITE

SECTION 4.2.   The Owner shall be responsible for acquiring legal and physical
               possession of the Site and providing the Contractor with access
               thereto. The Owner shall also provide at its cost, at the
               Interconnection Points as set forth in Appendix 3, Ex. 2.5,
               temporary utilities as specified in Appendix 3, Ex. 4.2.

               OWNER'S SCOPE

SECTION 4.3.   The Owner shall provide the equipment, Materials and services
               specified in Appendix 3, Ex. 4 and Ex. 6, Depts. 820 and 830. The
               Owner shall arrange for the clearance and removal from the Site
               of the buildings and other items described in Appendix 3, Ex. 4.3
               under "Permanent Demolition Services" in a

<Page>

Contract                                                             Page 23(25)

               manner that will not result in interference with the Works. The
               Owner shall have no obligations other than as expressly included
               in the Owner's Scope. The Owner's Scope shall be provided and
               performed in accordance with the Time Schedule as set forth in
               the Detailed Program and shall be of the quality stipulated in
               Appendix 3, Ex. 4. The Contractor shall notify the Owner of any
               act, omission, event or delay of which it becomes aware that may
               affect the Owner's obligations in respect of the Owner's Scope
               and shall not act or omit to act in such a manner that would
               prejudice the Owner's obligations hereunder. The Contractor shall
               also notify the Owner promptly of any failure by the Owner to
               perform the Owner's Scope of which it becomes aware and that may
               give rise to any extension of time pursuant to Section 8.9 or any
               increase in the Contract Price pursuant to Section 9.8. In such
               event, the Owner may, among other options to avoid or minimize
               any such delay or increase in the Contract Price, request the
               Contractor to undertake the performance of such item(s) of the
               Owner's Scope. Any such request by the Owner shall be handled as
               a Change in accordance with Article 12.

SECTION 4.4.   The Owner shall provide at the Site, upon Mechanical Completion
               of a System the operating personnel, raw material (furnish),
               consumables, wear and tear parts and other items, in each case as
               set forth in Appendix 3, Ex. 4 and Ex. 14 (but in the case of
               wear and tear parts limited to the amounts which are normal
               (having regard to the experience of European pulp mills during
               normal operation) for such parts in a Plant of this type during
               the period from Commissioning until Acceptance). The Owner shall
               have no obligation to provide anything not specified in such
               Appendix (or, in the case of wear and tear parts specified in
               Appendix 3, Ex. 14.3, in excess of the amounts which are normal
               for such parts in a Plant of this type during the period from
               Commissioning until Acceptance), which shall be the obligation of
               the Contractor.

<Page>

Contract                                                             Page 24(26)

               SPARE PARTS

SECTION 4.5.   The Owner shall provide, within the budgeted amount of Seven
               Million Five Hundred Thousand Euros ((euro)7,500,000), at
               Mechanical Completion of a System, the inventory of spare parts,
               other than Major Capital Spares, relating to that System as set
               forth in Appendix 3, Ex. 4.5, Ex. 14.1 and 14.2.

               Prior to Acceptance, the Contractor shall be entitled to use the
               spare parts and wear and tear parts provided by the Owner, as
               well as the Major Capital Spares, in connection with the
               fulfilment of its contractual obligations, including performance
               of tests required by this Contact. After Acceptance and prior to
               the end of the Defects Liability Period, the Contractor shall be
               entitled to use the spare parts, as well as the Major Capital
               Spares, in connection with the fulfillment of its contractual
               obligations, including performance of tests required by this
               Contract. In each case, the Contractor shall replace any spare
               parts (including Major Capital Spares) so used, and any wear and
               tear parts used prior to Acceptance in excess of the amounts
               which are normal (having regard to the experience of European
               pulp mills during normal operation) for such parts in a Plant of
               this type during the period from Commissioning until Acceptance,
               forthwith at its own cost. If the Contractor fails so to replace
               any spare parts (including Major Capital Spares) or any such
               excess wear and tear parts used by it, the Owner shall be
               entitled to withhold, or draw on any performance security issued
               on behalf of the Contractor, for an amount equal to the cost of
               replacing and if necessary installing such spare parts (including
               Major Capital Spares) and excess wear and tear parts.

               PERMITS TO BE OBTAINED BY THE OWNER

SECTION 4.6.   The Owner shall acquire and pay for the Permits specified in
               Appendix 3 Ex. 4.4 upon receipt from the Contractor, in the case
               of Permits relating to the Works, of all necessary documentation
               required for any such Permits. Notwithstanding the foregoing, it
               shall be the Contractor's responsibility to

<Page>

Contract                                                             Page 25(27)

               monitor the progress of all Permit applications and to coordinate
               all its activities to ensure that all Permits are obtained in a
               timely manner. The Owner shall comply with all Permit conditions
               and requirements relevant to its provision of the Owner's Scope.

SECTION 4.7.   If requested by Contractor, the Owner shall, at its own cost, use
               its best efforts to assist the Contractor in obtaining the
               Permits to be obtained by the Contractor or any Contractor's
               Supplier, including providing all technical information relating
               to items within the Owner's Scope that is necessary to prepare
               the Permit applications.

               TRANSFER OF CONTROL OF PLANT

SECTION 4.8.   The Owner shall assume responsibility for the operation of the
               Plant upon Acceptance (other than in connection with the Schedule
               B Tests, the performance of which shall be the responsibility of
               the Contractor with respect to the affected Systems).

ART. 5         PARTIES' REPRESENTATIVES; INDEPENDENT ENGINEER

               OWNER'S SITE REPRESENTATIVE AND CONTRACTOR'S SITE REPRESENTATIVE

SECTION 5.1.   The Owner shall appoint within seven (7) Days from the Contract
               Day a person to act as the Owner's Representative at the Site
               with whom the Contractor may consult whenever necessary. The
               Owner shall, from time to time, be entitled to replace such
               person and notify the Contractor of the new Owner's
               Representative. The Owner's Representative shall have the
               authority to make decisions which are binding on the Owner in
               regard to technical and commercial matters relating to
               performance of activities at the Site and also to receive
               proposals and recommendations from the Contractor concerning the
               Plant in other respects.

SECTION 5.2.   The Contractor shall appoint within seven (7) Days from the
               Contract Day a person to act as the Contractor's Representative
               at the Site with whom the

<Page>

Contract                                                             Page 26(28)

               Owner may consult whenever necessary. The Contractor shall, from
               time to time, be entitled to replace such person and notify the
               Owner of the new Contractor's Representative. In addition, the
               Contractor shall, upon reasonable request by the Owner based on
               the substantive reasons set forth in such request, replace the
               Contractor's Representative with a new Contractor's
               Representative who shall be reasonably satisfactory to the Owner.
               The Contractor's Representative shall have the authority to make
               decisions which are binding on the Contractor in regard to
               technical and commercial matters relating to performance of
               activities at the Site and also to receive proposals and
               recommendations from the Owner concerning the Works in other
               respects.

SECTION 5.3.   All decisions by the Owner's Representative and/or the
               Contractor's Representative shall be documented in the Site log
               book or otherwise as appropriate. Neither the Contractor's
               Representative nor the Owner's Representative shall be authorized
               to change any provision of the Contract, approve any Change or
               agree on any item or matter which would affect the Time Schedule
               or Contract Price (except as specifically authorized in a notice
               provided pursuant to the following sentence), and no decisions by
               either or both of the two Representatives shall be the basis for
               any such changes. At or prior to the Commencement Date, each
               Party shall designate by notice to the other one or more
               individuals who are authorized to approve Changes or agree on
               items or matters which would affect the Time Schedule or Contract
               Price (including any limits on their authorizations to specific
               items). A Party may change such designations from time to time by
               notice to the other, provided that all approvals and agreements
               that were issued by authorized individuals prior to notice of
               such change shall remain valid.

               INDEPENDENT ENGINEER

SECTION 5.4.   The Parties acknowledge that prior to the Commencement Date the
               Banks shall appoint an Independent Engineer. The Contractor shall
               afford the

<Page>

Contract                                                             Page 27(29)

               Independent Engineer unimpeded access to the Site and all
               documentation, and records associated with the Works and fully
               cooperate with the Independent Engineer as contemplated in the
               Contract. No actions or omissions on the part of the Independent
               Engineer or certificates or agreements given by the Independent
               Engineer shall relieve the Contractor of its obligations in this
               Contract.

ART. 6         QUALITY CONTROL

               INSPECTION AND TESTING

SECTION 6.1.   The Owner's representatives and the Independent Engineer shall be
               entitled to inspect and witness any tests in connection with the
               engineering, purchase, manufacture, construction and erection of
               each part of the Works and the Plant to ensure that the
               Contractor is performing its obligations in accordance with, and
               the Works conform with the requirements of, this Contract.

               The Contractor shall adopt the necessary measures to rectify
               Defects (including any nonconformity with the Specifications) and
               failures to maintain the Time Schedule, that are found during its
               inspections or tests or that are pointed out by the Owner. The
               Contractor shall not be entitled to any adjustments in the
               Contract Price or Time Schedule as a result of such measures,
               except to extent provided in Section 8.9 or 9.8.

SECTION 6.2.   The Contractor shall ensure that the Owner and Independent
               Engineer have free access during normal working hours and upon
               reasonable advance notice to workplaces (including those of
               Contractor's Suppliers) where constituent parts of the Works are
               designed, engineered, planned, manufactured, assembled or tested
               so that the Owner and the Independent Engineer can inspect and be
               present at tests of the Works. In addition the Owner and the
               Owner's designated consultants and representatives shall have the
               right to request reasonable additional testing of the Works
               during manufacture, fabrication and construction to verify
               conformance with the Specifications. In the event that such
               request is based on findings of defects

<Page>

Contract                                                             Page 28(30)

               in similar Materials, equipment or Systems or in the event that
               such testing identifies a Defect, the costs of such additional
               testing shall be for the account of the Contractor and shall not
               result in any increase in the Contract Price or extension of the
               Time Schedule. If the request is not based on such findings and
               does not identify a Defect, and provided that the Contractor had
               before such additional tests provided written notice of the
               increase in costs or delay in the Works that would result from
               such additional tests and a reasonable explanation why such
               additional tests were unnecessary or could otherwise be avoided,
               all such costs shall be for the account of the Owner and the
               Contract Price or Time Schedule shall be adjusted accordingly
               pursuant to Section 9.8 or 8.9, respectively.

               In the event that any portion of the Works at the Site will no
               longer be visible or accessible by the time of Acceptance, the
               Contractor shall notify the Owner and the Independent Engineer
               once such portion is completed and give them an opportunity to
               test and inspect such part of the Works. In the event the Owner
               requires additional testing, the Owner shall advise the
               Contractor of such requirements within a reasonable time prior to
               the Contractor's scheduled testing. All additional inspection,
               examination and testing required by the Owner shall to the extent
               possible be carried out in conjunction with the Contractor's
               similar activities and, if not, upon prior consultation with the
               Contractor and in such a manner as to avoid any unnecessary delay
               or interference in the performance of the Works.

SECTION 6.3.   The Contractor shall give the Owner and the Independent Engineer
               reasonable advance notice of any tests together with details of
               the times and locations of such tests. Tests shall be conducted
               in accordance with applicable provisions of the Specifications.
               In the event that the Owner and/or the Independent Engineer are
               not present the Contractor may proceed with the testing. The
               Contractor shall provide to the Owner and the Independent
               Engineer the test protocols, test certificates and any associated
               reports and results upon completion of the relevant tests.
               Contractor shall

<Page>

Contract                                                             Page 29(31)

               also furnish the Owner and the Owner's designated consultants and
               representatives with access to records of all performance
               inspections, tests and examinations undertaken by Contractor
               and/or Contractor's Suppliers.

               The Owner and its designated consultants and representatives
               shall have the right to reject any portion of the Works which is
               defective, deficient, not within Specifications or the standards
               described in Section 3.3(b) or otherwise of inferior quality or
               faulty workmanship (including upon inspection or reinspection
               upon arrival at the Site of Materials or equipment provided by
               Contractor's Suppliers) and require its repair or replacement by
               written notification to Contractor specifying the reasons for
               such rejection. All rejected and other workmanship that is
               defective, not within Specifications or the standards described
               in Section 3.3(b) or otherwise of inferior quality or faulty
               workmanship shall be repaired so as to satisfy the Contractor's
               Warranties and otherwise comply with the provisions of Article
               20. Rejected and other defective Materials or equipment shall be
               repaired or replaced with proper Materials or equipment. The
               costs associated with such repairs and replacements shall be for
               the account of Contractor and not reimbursable. In no event shall
               such rejection, repair or replacement result in any extension of
               the Time Schedule or increase in the Contract Price. After
               completion of the necessary repairs or replacements the relevant
               Materials and equipment shall be subject to further inspection,
               examination and testing, all the expenses of which shall be for
               Contractor's account.

               Should the Owner consider it necessary or advisable at any time
               before Acceptance to make an examination of Work already
               completed, by removing or tearing out same, Contractor shall
               consult with the Owner and take reasonable steps to follow up
               with the appropriate Contractor's Supplier regarding the
               necessity for such action. On request by the Owner, the
               Contractor shall promptly furnish all necessary facilities, labor
               and material for effecting the requested examination; provided,
               however, that the Owner may require removing or tearing out Work
               already completed only in

<Page>

Contract                                                             Page 30(32)

               circumstances where it has reasonable grounds to believe that
               Defects exist in the Works that would not have been identified by
               any tests previously conducted by the Contractor. All costs of
               removing and tearing out any completed work and the costs
               associated with its satisfactory reconstruction in accordance
               with this Contract (including charges for services rendered in
               connection therewith) shall be for the account of Contractor and
               not reimbursable, except in the event that such removal or
               tearing out does not uncover a Defect and the Contractor had
               before such removal or tearing out provided written notice of the
               increase in costs or delay in the Works that would result from
               such removal or tearing out and reasonable evidence from the
               relevant Contractor's Supplier or otherwise (including by
               reference to tests previously conducted by the Contractor) as to
               why such removal or tearing out was unnecessary or could be
               otherwise avoided, in which case all such costs shall be for the
               account of the Owner and the Contract Price or Time Schedule
               shall be adjusted accordingly pursuant to Section 9.8 or 8.9,
               respectively.

               Contractor shall furnish at each location where inspection,
               examination and testing is carried out all reasonable facilities,
               assistance, labor, equipment, materials, utilities, apparatus and
               instruments necessary for the safe and standard inspection and
               testing of material and workmanship that may be required pursuant
               to this Contract (in each case, other than any items comprising
               part of the Owner's Scope).

               The right of inspection, examination and testing by the Owner,
               its designated consultants and representatives provided herein is
               intended solely for the Owner's benefit, it being understood that
               no exercise of or failure to exercise such right shall relieve
               the Contractor of any of its obligations hereunder or prejudice
               any of the Owner's rights under this Contract.

<Page>

Contract                                                             Page 31(33)

               DESIGN

SECTION 6.4.   All working drawings, specifications, flow sheets and other
               designs prepared by the Contractor or Contractor's Supplier
               ("Design Documentation"), test certificates, records of failed
               tests, detailed time schedules, minutes of construction meetings
               and any other documentation that is relevant to the activities at
               the Site or operation of the Plant shall be made available at the
               Site for review by the Owner and the Independent Engineer (with
               all other working drawings, specifications, flow sheets and other
               designs being available for review at the offices or shop of the
               Contractor or the relevant Contractor's Supplier), other than
               proprietary manufacturer's drawings.

               The Owner and the Independent Engineer shall have the right upon
               giving reasonable prior notice to the Contractor at all
               reasonable times to inspect, at the Site or at the premises of
               the Contractor and the premises of the Contractor's Suppliers,
               all the Contractor's and Contractor's Suppliers' drawings,
               documents and other material relating to the Works.

SECTION 6.5.   The Contractor shall, either directly or through the Contractor's
               Suppliers, provide to the Owner, in accordance with this
               Contract, complete documentation relating to the Works. The
               Contractor shall submit to the Owner for approval and make
               available to the Independent Engineer at the Site for review the
               drawings and specifications indicated in Appendix 3 Ex. 3.2.2.1,
               which shall be examined by the Owner as soon as possible. The
               Contractor shall be notified in writing by the Owner of approval
               or any remarks and observations (including remarks or
               observations provided to the Owner by the Independent Engineer)
               within seven (7) Days from the date on which the documents were
               actually received by the Owner. The Contractor shall modify and
               re-submit the Design Documentation to reflect the comments made
               by the Owner. If such notification has not been communicated to
               the Contractor within such period, the respective approval shall
               be deemed as having been given upon the expiry of such seven (7)
               Day period.

<Page>

Contract                                                             Page 32(34)

               Design Documentation approved by the Owner pursuant to Appendix
               3, Ex. 3.2 shall not be departed from without resubmission to and
               re-approval by the Owner in accordance with this Section 6.5.

SECTION 6.6.   The fact that the Owner has approved drawings and specifications
               and participated in the engineering, design (including
               development of the Specifications and selection of Contractor's
               Suppliers and equipment), planning, manufacture, construction and
               erection process shall not relieve the Contractor of any of its
               responsibilities under the Contract.

SECTION 6.7.   Each Party shall bear its own costs incurred in connection with
               the above activities.

ART. 7         PRE-ACTIVITIES; UNFORESEEN SITE CONDITIONS

               PRE-ACTIVITIES

SECTION 7.1.   In order to achieve the Time Schedule as set forth in Article 8,
               the Contractor shall be given the opportunity to carry out prior
               to the Commencement Date the Pre-Activities in accordance with
               and subject to the Pre-Activity Agreement.

               UNFORESEEN GROUND CONDITIONS

SECTION 7.2.   The Contractor confirms that it has, prior to the date hereof,
               inspected and studied the Site and its environs and has fully
               satisfied itself as to all matters affecting the Site and its
               environs. The Contractor has also made itself familiar with the
               investigations that had been conducted in connection with the
               initially intended use of the Site for the construction of a
               nuclear power station, and the additional site investigations
               that were conducted in the fall of 2001 in preparation for the
               Works.

Section 7.3.   The Contractor acknowledges that the Works shall be designed and
               engineered for erection and installation at the Site and that it
               has thoroughly investigated and satisfied itself as to all
               general and local conditions at the

<Page>

Contract                                                             Page 33(34)

               Site and the waters adjacent thereto, including but not limited
               to: river and land transportation and access to the Site,
               including the availability and condition of roads; handling and
               storage of materials; availability and quality of labor, water,
               sand, rock and power; rainfall and other climatic conditions,
               currents, soundings and ground water; topography, ground surface,
               subsurface, seismic, shore and harbor conditions; the nature and
               quantity of surface and subsurface materials or obstacles to be
               encountered, and equipment, machinery and materials required by
               the Contractor prior to and during performance of its obligations
               hereunder. The Contractor acknowledges that all appropriate
               allowances for the matters and conditions referred to in this
               Section have been taken into account in calculating the Contract
               Price and determining the Time Schedule. No increase in the
               Contract Price and/or extension of the Time Schedule shall be
               considered by the Owner or given effect based in whole or in part
               upon any discrepancy between the conditions that the Contractor
               anticipated and the actual conditions encountered by the
               Contractor. Without limiting the generality of the foregoing, the
               Contractor confirms that it is aware of the archaeological
               investigations being conducted at the Site by the LANDESAMT FUR
               ARCHAOLOGIE DES LANDES SACHSEN-ANHALT, that it has taken such
               work into account in developing its workplan, and that it shall
               not be entitled to any adjustment in the Contract Price or Time
               Schedule as a result of any interference with the Contractor's or
               Contractor's Suppliers' work caused by such investigation
               provided that the investigations are completed as indicated in
               the time schedule provided by the LANDESAMT FUR ARCHAOLOGIE DES
               LANDES SACHSEN-ANHALT for such investigations.

ART. 8         TIME SCHEDULE

               The Parties agree to fulfill their obligations as set forth in
               this Contract by the times and dates specified below (as such
               times and dates may be extended in accordance with Section 8.9 or
               an approved Change Order).

<Page>

Contract                                                             Page 34(36)

SECTION 8.1.   The Pre-Activities shall start on the date mutually agreed upon
               between the Parties and shall have a duration of at least 3
               months prior to Commencement Date.

SECTION 8.2.   Mechanical Completion of the Works shall be not later than 22
               (twenty-two) months after Commencement Date ("Scheduled
               Mechanical Completion Date").

SECTION 8.3.   Start-up shall be not later than 23 (twenty-three) months after
               Commencement Date ("Scheduled Start-up Date").

SECTION 8.4.   Production of saleable pulp shall begin not later than 24
               (twenty-four) months after Commencement Date ("Scheduled
               Production Date"). "Saleable pulp" means pulp which can be sold
               at a price of at least seventy percent (70%) of the list price of
               NBSKP (CIF North Sea Port), as reported by NLK. "NBSKP" means
               northern bleached softwood kraft pulp. "NLK" means Nystrom, Lee,
               Kobyashi Ltd.

SECTION 8.5.   All conditions to Acceptance shall be satisfied not later than 28
               (twenty-eight) months after Commencement Date.

SECTION 8.6.   The times for delivery of documentation, including "as built"
               drawings, are set forth in Appendix 3, Ex. 3.2 and Ex. 19.

               DETAILED PROGRAM

SECTION 8.7.   The Contractor shall, no later than thirty (30) Days after the
               Commencement Date submit to the Owner and the Independent
               Engineer for review a draft of a Detailed Program for the
               execution of the Works. The Detailed Program shall be consistent
               with the Milestone schedule set forth in Appendix 3, Ex. 20 and
               shall set out in detail the sequence in which and the techniques
               and resources by which the Contractor intends to perform the
               Works so that the Contractor will achieve each Milestone by the
               applicable Milestone Date, Mechanical Completion by the Scheduled
               Mechanical Completion Date, Start-

<Page>

Contract                                                             Page 35(37)

               up by the Scheduled Start-up Date, commencement of production of
               saleable pulp (as defined in Section 8.4) by the Scheduled
               Production Date, and Acceptance by the Scheduled Acceptance Date.

               In particular, the Detailed Program shall include information
               regarding the planned physical progress of major construction and
               erection activities at the Site, including without limitation
               manpower (by trade) on Site, concrete poured, equipment
               installed, and piping, electrical and instrumentation installed.
               Such information shall include graphs of the planned achievement
               over time of the aggregate unit quantities for such items
               (so-called "S-curves") in order to facilitate measurement and
               reporting of actual progress against planned progress for
               purposes of, among other things, the monthly progress reports to
               be provided pursuant to Section 8.10. The S-curves shall be
               prepared in accordance with good industrial practice as approved
               by the Owner and the Independent Engineer.

               The Contractor shall give due consideration to any comments made
               by the Owner and the Independent Engineer regarding the Detailed
               Program in finalizing the Detailed Program and any portion of the
               Detailed Program that affects the implementation of the Owner's
               Scope or its use of facilities shall be mutually agreed by the
               Owner and the Contractor. The fact that the Owner has reviewed
               and/or made comments regarding the Detailed Program shall not
               relieve the Contractor of any of its obligations under the
               Contract.

               The Parties recognize that it is essential to complete all of the
               items specified in Sections 8.1 through 8.6 by the respective
               dates specified therein and the Contractor undertakes to carry
               out its work diligently and in a timely manner, so that the
               scheduled dates can be achieved. The Contractor shall not be
               entitled to any adjustments in the Time Schedule except as and to
               the extent provided in Section 8.9. Should delays occur, the
               Contractor shall use all diligent means and efforts, including
               but not limited to overtime work and extra resources, at no extra
               cost to the Owner except as provided in Section 9.8

<Page>

Contract                                                             Page 36(38)

               and Article 12 of the Contract, in order to comply with the Time
               Schedule established under this Article 8.

               The Contractor shall revise and update the Detailed Program as
               necessary in order to achieve each Milestone by the applicable
               Milestone Date, Mechanical Completion by the Scheduled Mechanical
               Completion Date, Start-up by the Scheduled Start-up Date,
               commencement of production of saleable pulp (as defined in
               Section 8.4) by the Scheduled Production Date and Acceptance by
               the Scheduled Acceptance Date; provided that any changes to any
               portion of the Detailed Program that affect the implementation of
               the Owner's Scope or its use of facilities shall be mutually
               agreed by the Owner and the Contractor. The Contractor shall use
               its best efforts to meet the Milestone Dates in the execution of
               the Contract, but failure to achieve any Milestone by the
               Milestone Date or to complete any of the items specified in
               Section 8.1 through 8.6 by the respective dates specified therein
               shall not entitle the Owner to any rights or remedies in
               connection with such delay other than as expressly set forth in
               Sections 8.11, 23.1 and 24.1 and Article 21; provided that
               payments in respect of Payment Milestones shall only become due
               upon the completion of such Payment Milestones.

SECTION 8.8.   The Contractor shall carry out all other aspects of the Works in
               accordance with the Detailed Program described in Section 8.7, as
               such program may change from time to time in accordance with
               Section 8.9 or Article 12 of this Contract.

               DELAY AND EXTENSION OF TIME

SECTION 8.9.   If the achievement of the Time Schedule or any Milestone will be,
               or has been, delayed beyond the Milestone Date applicable
               thereto; Mechanical Completion of the Works will be, or has been,
               delayed beyond the Scheduled Mechanical Completion Date; Start-up
               will be, or has been, delayed beyond the Scheduled Start-up Date;
               commencement of production of saleable pulp will be, or has been,
               delayed beyond the Scheduled Production Date, or

<Page>

Contract                                                             Page 37(39)

               Acceptance will be, or has been, delayed beyond the Scheduled
               Acceptance Date by reason of:

               (i)    Change in Law;

               (ii)   suspension of the Works under Article 23 (other than by
                      reason of the Contractor's default or breach of the
                      Contract);

               (iii)  breach of the Contract by the Owner, including the failure
                      by the Owner to perform the Owner's Scope in accordance
                      with Article 4 or Section 17.11 as adjusted for delays
                      (other than by reason of the Contractor's default or
                      breach of the Contract);

               (iv)   a Force Majeure to the extent the provisions of
                      Section 26.4 permit a delay;

               (v)    it is ultimately determined that a modification to any
                      Milestone Date, the Scheduled Mechanical Completion Date,
                      the Scheduled Start-up Date, the Scheduled Production Date
                      or the Scheduled Acceptance Date is warranted as a
                      consequence of a Change Order issued by the Owner pursuant
                      to Section 12.10;

               (vi)   any additional tests performed at the request of the Owner
                      in cases where Section 6.2 provides for an adjustment in
                      the Time Schedule;

               (vii)  any removal or tearing out in cases where the third
                      paragraph of Section 6.3 provides for an adjustment in the
                      Time Schedule; or

               (viii) undue interference with the activities of the Contractor
                      by the Owner in carrying out the Owner's Scope as provided
                      in Section 3.6,

               then the Owner shall (in the case of clause (v), upon settlement
               of the effects of the Change) grant an extension of the relevant
               Milestone Date, the Scheduled Mechanical Completion Date, the
               Scheduled Start-up Date, the Scheduled Production Date and/or the
               Scheduled Acceptance Date

<Page>

Contract                                                             Page 38(40)

               commensurate to the effect of such delay, subject to satisfaction
               by the Contractor of the following conditions:

                      (a)     the Contractor shall have used and continue to use
                              its best efforts to prevent, avoid, overcome and
                              minimize any such delay and to proceed with the
                              Works;

                      (b)     the Contractor shall as soon as practicable and in
                              any event within twelve (12) Days after such
                              occurrence deliver a notice to the Owner which
                              identifies the basis on which an extension of time
                              is claimed and within twenty five (25) Days after
                              the relevant circumstances have occurred, deliver
                              to the Owner full and detailed particulars of any
                              claim for an extension of time to which it
                              reasonably considers itself entitled; to the
                              extent that such full and detailed particulars are
                              not available at that time for reasons not
                              attributable to the Contractor, it shall deliver
                              such full and detailed particulars as soon as
                              practicable;

                      (c)     the Contractor shall be entitled to an extension
                              of time only to the extent that any delay is not
                              attributable to or contributed to by any default,
                              omission, neglect or failure on its part, or on
                              the part of any Contractor's Supplier or to any
                              matters or events which are within the control of
                              the Contractor or Contractor's Supplier;

                      (d)     any addition to the Contract Price granted by the
                              Owner under Section 9.8 shall not of itself
                              entitle the Contractor to any extension of the
                              Time Schedule;

               If the Owner has agreed under Section 12.7 to the Contractor's
               proposals for an extension of the Time Schedule in relation to
               any Change, the Milestone Date, the Scheduled Mechanical
               Completion Date, the Scheduled Start-up

<Page>

Contract                                                             Page 39(41)

               Date, the Scheduled Production Date or the Scheduled Acceptance
               Date shall be extended by the time agreed in the Change Order and
               not otherwise.

               REPORTS

SECTION 8.10.  Monthly progress reports shall be prepared by the Contractor and
               submitted to the Owner in six copies. The first report shall
               cover the period up to the end of the first calendar month
               following the Commencement Date and shall reflect the
               Contractor's performance of the Pre-Activities. Reports shall be
               submitted monthly thereafter, each within fifteen (15) Business
               Days after the end of the calendar month to which it relates.

               Reporting shall continue until the Contractor has achieved
               Acceptance.

               The monthly progress report shall be in the form described in
               Appendix 3, Ex. 23 and shall include all relevant information
               needed to describe the physical and other progress of the Works,
               any problems associated therewith and the main activities for the
               following reporting period, including demand for manpower; in
               addition, the monthly progress report shall note any events which
               may cause delays, claims for increases in the Contract Price or
               Changes and describe corrective actions being taken if deviations
               from the Detailed Program are apparent.

               The Contractor shall also provide to the Owner and the
               Independent Engineer promptly after receipt copies of all
               agreements it may have or enter into with any Contractor's
               Supplier regarding schedule and progress (including any changes
               to same) and, upon request, progress reports it receives from
               specific Contractor's Suppliers.

               Deviations from the Time Schedule by the Contractor or any
               Contractor's Supplier shall be reported by the Contractor without
               delay.

SECTION 8.11.  In the event that the monthly progress reports or other reports
               by the Contractor, the Owner or the Independent Engineer of
               deviations from the

<Page>

Contract                                                             Page 40(42)

               Time Schedule and the Milestone Dates indicate that any activity
               on the "critical path" or the physical progress of major
               activities or groups of activities in the current Detailed
               Program prepared in accordance with Section 8.7 is delayed by
               more than thirty (30) Days, the Contractor shall within fifteen
               (15) Days after notice from the Owner prepare, in consultation
               with the Owner and subject to confirmation by the Independent
               Engineer that such plan is reasonable and achievable, a
               "workaround plan" which will detail additional manpower or other
               resources, resequencing of the workplan and other steps to be
               taken by the Contractor to achieve the Time Schedule and the
               Milestones by the Milestone Dates. The Contractor shall proceed
               in accordance with such plan, and shall not be entitled to any
               additional payment for taking such steps. In the event the
               Contractor fails to prepare and deliver such workaround plan
               within such fifteen (15) Day period, the Owner shall be entitled
               to have such plan prepared by the Independent Engineer or an
               engineering consulting firm at the expense of the Contractor, and
               the Contractor shall comply with such plan. In the event that the
               Contractor does not bring the Works substantially into accord
               with the workaround plan within sixty (60) Days after its
               delivery (by the Contractor or, if applicable, by the Independent
               Engineer or engineering consulting firm), the Owner shall have
               the right, in addition to other rights and remedies under this
               Contract (including, if applicable, Section 24.1.2.), to engage
               third party companies or otherwise arrange for additional
               resources to carry out such part or portion of the Works that are
               behind schedule or affected by delay (including by adding to the
               scope of the relevant Contractor's Supplier with respect to items
               of equipment or components), with the cost of any such additional
               resources to be for the account of the Contractor.

ART. 9         CONTRACT PRICE, PAYMENT TERMS AND ADJUSTMENTS TO CONTRACT PRICE

SECTION 9.1.   For the fulfillment of all obligations and undertakings under the
               terms and conditions of this Contract, the Owner shall pay to the
               Contractor a contract price of:

<Page>

Contract                                                             Page 41(43)

                      Seven Hundred Sixteen Million Euros
                      (EURO 716,000,000)

               The Contract Price is inclusive of all taxes and duties except
               for German value added tax (MEHRWERTSTEUER, MWST.), which shall
               be shown separately on each invoice and added to the Contract
               Price.

               The Contract Price is fixed provided that the Commencement Date
               is not later than September 9, 2002. In the event the
               Commencement Date occurs later than September 9, 2002, the
               Parties shall agree on any adjustment to the Contract Price that
               is appropriate under the circumstances.

               For Contract Price breakdown see Appendix 2, Ex. 2.

               The Contract Price is the total price to be paid by or on behalf
               of the Owner to the Contractor in full consideration for the
               performance by the Contractor of its obligations under the
               Contract (including the Pre-Activities) and, except as
               contemplated in the Contract, encompasses all of the risks
               relating to the Works whether foreseen or unforeseen. The
               Contract Price shall be escalated, increased or decreased only as
               provided in Section 9.8 and any Change Order approved pursuant to
               Article 12. The Contract Price shall be paid to the Contractor
               against invoices received in respect of Payment Milestones
               achieved in accordance with Appendix 2, Ex. 9.

SECTION 9.2.   The Contractor may submit to the Owner on a Monthly basis (with a
               copy to the Independent Engineer), but not more than once per
               Month, its draft invoice for payment in respect of the Payment
               Milestones that have been completed during such Month, together
               with a certificate signed by a duly authorized officer of the
               Contractor confirming that all Payment Milestones in respect of
               which the Contractor is claiming payment have been completed and
               attaching supporting documentation. The form of such invoice
               shall be agreed by the Parties prior to the Commencement Date.
               The Owner shall complete its review (including such input as it
               may receive from the Independent Engineer) within seven (7)
               Business Days of receipt of the draft

<Page>

Contract                                                             Page 42(44)

               invoice. The Owner (or the Owner's Representative) shall, if it
               agrees, approve the draft invoice or, if it disagrees, approve
               only that part of the draft invoice with which it agrees and the
               Contractor shall, upon receipt of the Owner's approval of
               undisputed amounts, issue an invoice for payment of such
               undisputed amounts by the Owner. No approval by the Owner or
               payment of any invoice shall relieve the Contractor of any of its
               obligations hereunder with respect to the Works or prejudice any
               of the Owner's rights under the Contract, including the Owner's
               rights under Article 20 hereof.

               In addition to the foregoing, the Contractor shall provide to the
               Owner at such times and in such form as the Owner requires, such
               information and support as is required to perform and prepare the
               proper accounting and make any subsidy calculations and
               submissions to the Relevant Authorities.

SECTION 9.3.   Each approved invoice for undisputed amounts shall be due and
               payable within thirty (30) Days after receipt by the Owner
               thereof; provided that, if required by Law, the Owner shall
               withhold the required amount of each instalment, to be applied in
               accordance with the relevant Law, unless prior to such payment
               the Contractor delivers to the Owner satisfactory evidence from
               the Relevant Authority confirming that the Contractor or such
               payment is exempt from such withholding requirement. The
               Contractor shall not be entitled to any additional compensation
               for any amounts so withheld. Should the Owner fail to make the
               required payment of undisputed amounts within thirty (30) Days
               after submission of an approved invoice, the Contractor shall be
               entitled to charge interest at a rate equal to Euribor (1 month)
               at the respective due date plus three (3) percentage points,
               accruing from the due date until payment is received.

SECTION 9.4.   In the event of a dispute about any amount invoiced by the
               Contractor, including whether the Contractor has achieved the
               necessary progress, the undisputed amount of the payment shall be
               made in accordance with Section 9.3. Should the Contractor claim
               a right to refuse performance or a

<Page>

Contract                                                             Page 43(45)

               right of retention in respect of amounts in dispute, it shall be
               obligated to state the amount as to which it asserts such right
               and the Owner shall be entitled to prevent such right from being
               enforced by providing to the Contractor security within thirty
               (30) Days after notice from the Contractor of its claim of such
               right, security for the payment of the amounts in dispute in the
               form of a deposit or a standby (not first demand) bank guarantee
               issued by a first class bank acceptable to the Contractor (which
               may be Bayerische Hypo-und Vereinsbank AG) and generally
               consistent with the tenor of the bank guarantees to be provided
               under Section 10.1, provided that the Owner shall not be entitled
               to use such payment security for more than EURO 10,000,000 in
               the aggregate at any one time.

SECTION 9.5.   All bank fees assessed by the payor's bank in connection with the
               payment shall be borne by Owner and all bank fees assessed by
               recipient's bank shall be borne by the Contractor.

SECTION 9.6.   The Contractor shall pay to the Owner all amounts payable by it
               under this Contract at the times specified herein or, if not so
               specified, within thirty (30) Days after such amounts become due.
               If the Contractor fails to pay the Owner any amount due under the
               Contract within the specified period, then the Owner may set off
               the amounts in question against any amounts payable to the
               Contractor under this Contract and/or call on any payment or
               performance security to satisfy, in whole or in part, the
               Contractor's payment obligations.

SECTION 9.7.   All Change Orders issued according to Article 12 shall be
               invoiced separately and in accordance with the terms of payment
               contained in such Change Order.

SECTION 9.8.   If as a result of the effect of any of the following the costs to
               the Contractor of performing its obligations under the Contract
               shall be increased or decreased:

               (i)    Change in Law;

<Page>

Contract                                                             Page 44(46)

               (ii)   suspension of the Works under Article 23 (other than by
                      reason of the Contractor's default or breach of the
                      Contract);

               (iii)  breach of Contract by the Owner, including the failure by
                      the Owner to perform the Owner's Scope in accordance with
                      Article 4 or Section 17.11, as adjusted for delays (other
                      than by reason of the Contractor's default or breach of
                      the Contract);

               (iv)   a Force Majeure to the extent the provisions of
                      Section 26.4 provide for an increase in the Contract
                      Price;

               (v)    it is ultimately determined that an increase in the
                      Contract Price is warranted as a consequence of a Change
                      Order issued by the Owner pursuant to Section 12.10;

               (vi)   any additional tests performed at the request of the Owner
                      in cases where Section 6.2 provides for an increase in the
                      Contract Price;

               (vii)  any removal or tearing out in cases where the third
                      paragraph of Section 6.3 provides for an in the Contract
                      Price; or

               (viii) undue interference with the activities of the Contractor
                      by the Owner in carrying out the Owner's Scope as provided
                      in Section 3.6,

               then the Contract Price shall (in the case of clause (v), upon
               settlement of the effects of the Change) be increased (or
               decreased as the case may be) by the amount of such increase (or
               decrease) subject to satisfaction by the Contractor of the
               following conditions:

               (a)    The Contractor shall have used and continue to use best
                      efforts to prevent, avoid and minimize any such increase
                      in costs;

               (b)    The Contractor shall as soon as practicable and in any
                      event within twelve (12) Days after such occurrence
                      deliver a notice to the Owner which identifies the basis
                      on which the increase in Contract Price is

<Page>

Contract                                                             Page 45(47)

                      claimed and within twenty five (25) Days after the
                      relevant circumstances have occurred, deliver to the Owner
                      full and detailed particulars of any claim for an increase
                      in the Contract Price to which it reasonably considers
                      itself entitled, to the extent that such full and detailed
                      particulars are available at the time or, to the extent
                      that such full and detailed particulars are not available,
                      to deliver such full and detailed particulars as soon as
                      practicable.

               (c)    The Contractor shall be entitled to any increase in the
                      Contract Price only to the extent that the circumstances
                      giving rise to the increase in costs to the Contractor are
                      not attributable to some default, omission, neglect or
                      failure on its part, or on the part of any Contractor's
                      Supplier or to any matters or events which are within the
                      control of the Contractor or such Contractor's Supplier;

               The granting by the Owner of any extension to the Time Schedule
               shall not of itself entitle the Contractor to any increase in the
               Contract Price.

SECTION 9.9.   In any case where the Contractor considers it is entitled to an
               increase in the Contract Price under this Article 9 it shall keep
               full and detailed contemporary records of the Costs it incurs in
               relation to the matter in question. Such records shall be open to
               inspection by designated representatives of the Owner at all
               reasonable times.

ART. 10        ADVANCE PAYMENT, PERFORMANCE AND WARRANTY SECURITY

SECTION 10.1.  On or prior to the Commencement Date, the Contractor shall
               provide the Owner with an irrevocable bank guarantee(s) as
               security for the advance payment by the Owner, for the
               performance by the Contractor of its obligations under the
               Contract and for any Defects arising during the Defects Liability
               Period. Such bank guarantee(s) shall be issued by a first class
               bank acceptable to the Owner and the Banks, shall be in the form
               set forth in Appendix 2, Ex. 4 and in the amounts therein
               specified, and shall be valid and enforceable on the Commencement
               Date.

<Page>

Contract                                                             Page 46(48)

               Such security may be issued as separate bank guarantees or a
               composite bank guarantee provided that such security shall be in
               the respective amounts for the periods and in respect of the
               obligations set forth in Appendix 2, Ex. 4. In the event that the
               bank guarantee is called in respect of the Contractor's liability
               for Defects under Article 20, the Contractor shall within 3 days
               of the date of such call provide to the Owner a replacement bank
               guarantee or confirmation of an increase in the outstanding bank
               guarantee in an amount equal to the applicable percentage of the
               Contract Price as set forth in Appendix 2, Ex. 4.

               Not later than forty-five (45) days prior to September 1, 2006,
               the Contractor shall provide to the Owner (who shall promptly
               furnish a copy to the Agent):

               (i) an additional guarantee in substantially the same form as the
               guarantee set forth in Appendix 2, Exhibit 4, in an amount equal
               to the applicable percentage of the Contract Price as set forth
               in Appendix 2, Ex 4 (being an amount no less than five (5) per
               cent of the Contract Price) and having an expiry date of
               January 1, 2009; or

               (ii) evidence that the expiry date of the guarantee provided by
               the Contractor to the Owner under this Contract as security for
               the advance payment by the Owner, for the performance by the
               Contractor of its obligations under the Contract and for any
               Defects arising during the Defects Liability Period (the
               "Original Guarantee") has been extended from September 1, 2006 to
               January 1, 2009,

               unless the Original Guarantee has already expired in accordance
               with its terms because the Contractor has presented an original
               Expiry of Defects Liability Certificate as set forth in Annex C
               to Appendix 2, Ex. 4 or Annex D to Appendix 2, Ex. 4.

               If the Contractor fails to provide an additional guarantee in
               accordance with either paragraph (i) or (ii) above, it shall be
               in breach of this Contract and the

<Page>

Contract                                                             Page 47(49)

               Owner shall be entitled to call upon the Original Guarantee in
               its full amount, to be held as security for the performance by
               the Contractor of its obligations under the Contract and for any
               Defects arising during the Defects Liability Period.

               To the extent that there are no claims submitted under the bank
               guarantee, the amount shall be reduced and the bank guarantee
               shall be released as set forth in Appendix 2, Ex. 4.

               Thereafter the Contractor shall provide to the Owner, if
               applicable, a bank guarantee as set forth in Appendix 2, Ex. 5,
               to cover any outstanding warranty obligations.

SECTION 10.2.  CHANGE IN CONTRACT PRICE

               If the Contract Price is adjusted under Section 9.8:

               (i)    in the case of an increase, the Contractor shall, within 3
                      days and as a condition precedent to any further payment
                      by the Owner, provide the Owner with a replacement bank
                      guarantee or confirmation of an increase in the
                      outstanding bank guarantee to equal the applicable
                      percentage of the new Contract Price as set forth in
                      Appendix 2, Ex. 4; and

               (ii)   in the case of a decrease, the Contractor may within 3
                      days provide the Owner with a replacement bank guarantee
                      to equal the applicable percentage of the new Contract
                      Price as set forth in Appendix 2, Ex. 4.

SECTION 10.3.  CONSENT TO ASSIGNMENT

               At the same time as it provides any bank guarantee under this
               Article 10, the Contractor shall also provide an acknowledgement
               by the issuer of the bank guarantee, in a form approved by the
               Owner, that the issuer consents to the assignment by the Owner of
               its rights under the guarantee to the Banks.

<Page>

Contract                                                             Page 48(50)

ART. 11        CHANGES IN LAW

SECTION 11.1.  The Contractor shall comply with all Laws and Permits as in
               effect from time to time in relation to the Works (including
               during the Defects Liability Period). Except in relation to any
               income taxes payable by the Contractor, if, after the Contract
               Day, any Law or Permit not reasonably foreseeable on the Contract
               Day, is enacted, promulgated, abrogated or changed (which shall
               be deemed to include any change in interpretation or application
               by the competent authorities but exclude any Law in existence on
               the Contract Day that is to become effective at a later date)
               that affects the Works and as a result the costs and expenses of
               the Contractor (other than increases in direct or indirect labor
               costs of the Contractor or any Contractor's Supplier as a result
               of changes in Law or salary or benefit increases instituted by
               Contractor) are increased or decreased by an amount in excess of
               (euro) 500,000, individually or in the aggregate and/or the Time
               Schedule is affected ("Change in Law"), the Contractor shall
               promptly notify the Owner and supply to the Owner fully details
               of such Change in Law, the manner in which the Contractor
               proposes to comply with the Change in Law, a proposed expenditure
               budget, a revised Time Schedule (if appropriate) and all
               information as the Owner shall reasonably require to assess the
               effect on the Contractor's obligations. The Contractor shall be
               entitled to an adjustment to the Contract Price (which may be
               increased or decreased) and/or the Time Schedule, by the issuance
               of a Change Order as set forth in Article 12, to the extent that
               the Contractor has been affected in the performance of any of its
               obligations under the Contract by such Change in Law.

               The same shall apply for any changes in the Works reasonably
               required due to changes in permitting requirements by the
               Relevant Authorities (not reasonably foreseeable on the Contract
               Day) between the Contract Day and the Acceptance Date. This
               Section shall not, however, apply to any change made or required
               based on the permit values contained in the Permits or

<Page>

Contract                                                             Page 49(51)

               applications for Permits (or amendments to such Permits) listed
               in items 1-6 in Appendix 3, Ex. 4.4.

SECTION 11.2.  The Contractor shall use its best efforts to avoid or minimize
               any delays, cost increases or decreases in performance resulting
               from the foregoing.

ART. 12        CHANGES

SECTION 12.1.  The Contractor shall not be entitled to make any Changes without
               the written approval and consent of the Owner in accordance with
               this Article 12.

SECTION 12.2.  The Owner may require the Contractor from time to time during the
               performance of the Contract to make any Change provided that such
               Change does not constitute unrelated work and that it is
               technically practicable.

SECTION 12.3.  The Contractor may from time to time during its performance of
               the Contract propose to the Owner in writing any Change which the
               Contractor considers necessary or desirable to improve the
               quality, efficiency or safety of the Works. Should any
               improvements or innovations which can be incorporated in the
               design of the Works or used in connection with its operation
               become available, the Contractor shall offer the Owner such
               technological advances in the form of a proposal for a Change
               Order. The Owner shall in its discretion approve or reject any
               Change proposed by the Contractor in writing.

SECTION 12.4.  If the Contractor proposes a Change the Contractor shall submit
               to the Owner a written "Application for Change Proposal," giving
               reasons for the proposed Change and including the information
               specified in Section 12.5.

               The Contractor shall not be entitled to recover any costs for
               preparing the Application for Change Proposal.

<Page>

Contract                                                             Page 50(52)

SECTION 12.5.  If the Owner proposes a Change, it shall send to the Contractor a
               request ("Request for Change Proposal") requiring the Contractor
               to prepare and furnish to the Owner as soon as reasonably
               practicable a proposal ("Change Proposal") which shall include
               the following:

               (a)    description of Change and details of how the Contractor
                      intends to give effect to the Change;

               (b)    effect on the Time Schedule, including the effect on any
                      applicable Milestone;

               (c)    estimated costs of the Change;

               (d)    effect on Performance Requirements, if any;

               (e)    effect on any other provisions of the Contract; and

               (f)    such other information as will reasonably enable the Owner
                      to properly evaluate the proposed Change.

SECTION 12.6.  In the event that it can be foreseen that the cost of preparing
               and submitting the Change Proposal will be in excess of (euro)
               5,000, the Contractor shall, prior to preparing and submitting
               the Change Proposal, submit to the Owner an estimate of the cost
               of preparing and submitting the Change Proposal ("Estimate for
               Change Proposal").

               The Contractor shall use its best efforts to obtain any Change
               Proposal by a Contractor's Supplier at no cost for the Owner.

               Upon receipt of the Contractor's Estimate for Change Proposal,
               the Owner shall either:

               (a)    accept the Contractor's estimate with instructions to the
                      Contractor to proceed with the preparation of the Change
                      Proposal, or

<Page>

Contract                                                             Page 51(53)

               (b)    advise the Contractor of any part of its Estimate for
                      Change Proposal that is unacceptable with a request for
                      the Contractor to review its estimate, or

               (c)    advise the Contractor that the Owner does not intend to
                      proceed with the Change.

SECTION 12.7.  Upon receipt of the Change Proposal, the Owner and the Contractor
               shall mutually agree upon all matters therein contained. Within
               fourteen (14) Days of such agreement the Owner shall, if it
               intends to proceed with the Change, issue the Contractor a Change
               Order, to be executed by the Parties, incorporating the changes
               in question and providing for any change in the Time Schedule
               (including any applicable Milestone) or other dates for
               completion or delivery, any increase or reduction of the Contract
               Price, change in payment terms and any change in the scope of the
               Works, the Contractor's standards of performance, the
               Specifications, Warranties or the Performance Requirements and,
               if necessary to conform provisions of the Contract, enter into an
               amendment to this Contract, in each case resulting from the
               change in the Works. Any adjustment of the Contract Price shall
               be determined on an "open book" basis as described in
               Section 12.11 and shall take into account, among other things,
               requirements of the various financial institutions providing
               funding for the accomplishment of the Works, the elimination or
               avoidance of Works to be performed resulting from the changes in
               the scope of the Works and assistance to be given by the Owner.
               The price of the Change shall be added to the Contract Price and
               shall be invoiced in accordance with Article 9 of the Contract
               based on an agreed payment schedule.

               If the Owner decides not to proceed with a Change for whatever
               reason, it shall, within said period of fourteen (14) Days notify
               the Contractor accordingly. Under such circumstances, the
               Contractor shall be entitled to reimbursement of all costs
               reasonably incurred by it in preparation of any

<Page>

Contract                                                             Page 52(54)

               Change Proposal for which it has submitted an Estimate for Change
               Proposal to the Owner in accordance with Section 12.6, not to
               exceed the amount given by it in such Estimate for Change
               Proposal.

SECTION 12.8.  The Owner shall have the right at its own choice to enter into
               contracts directly with the Contractor's Suppliers or suppliers
               for additional items or modifications it wishes to procure, and
               shall bear the entire risk related thereto.

SECTION 12.9.  Except as provided in 12.10, the Contractor shall not proceed
               with any Changes unless the respective Change Order has been
               issued.

SECTION 12.10. If the Owner and the Contractor fail to agree on the effect of a
               Change and as a result a Change Order is not issued, the Owner
               may direct the Contractor to perform the work involved in that
               Change by delivering to the Contractor a Change Order signed by
               the Owner and making payment for any undisputed amount related to
               such Change when it becomes due, unless the amount in dispute in
               respect of such Change involves a net amount payable to the
               Contractor that, together with all other amounts then in dispute
               under Change Orders issued under this Section 12.10, exceeds
               (euro)50,000 for an individual Change or (euro)500,000 in the
               aggregate. In the event amounts in dispute are greater than the
               respective threshold amounts in the previous sentence, the Owner
               may direct the Contractor to perform such work upon providing a
               standby (not first demand) bank guarantee or other payment
               assurance reasonably satisfactory to the Contractor. In such
               event, the Contractor shall be obligated to carry out the Change
               as instructed with the appropriate adjustment to the Contract
               Price and/or Time Schedule to be determined later on an "open
               book" basis as described in Section 12.11, provided that the
               Contractor shall declare the basis for any claimed additional
               remuneration and/or adjustment to the Time Schedule in writing
               within fourteen (14) Days after receipt of such instruction. The
               Contractor's performance of work pursuant to a Change Order
               issued under this Section 12.10 shall not

<Page>

Contract                                                             Page 53(55)

               prejudice the right of either Party in the settlement of the
               effects of that Change.

SECTION 12.11. The costs for any Change shall be determined using an "open book"
               methodology similar in all pertinent respects to that used in
               determining the Contract Price and based on the same units prices
               and the same margin used for the Contact Price or set forth in
               the EPC Price Calculation.

               With respect to any cost forming the basis for an adjustment in
               the Contract Price, the Contractor agrees to keep records and
               books of account, showing the cost of all items of labor,
               Materials, equipment, supplies, services and all other
               expenditures of whatever nature, and all cash and trade
               discounts, rebates, allowances, credits, salvage and commissions
               in respect thereof, which are reimbursable to the Contractor or
               which are the subject of an adjustment in the Contract Price. The
               system of accounting to be employed by the Contractor shall be in
               accordance with generally accepted accounting principles in
               Germany consistently applied. The Contractor's records and books
               of account referred to above and all supporting documents,
               including all supporting documents required for this purpose to
               be obtained by the Contractor from any Contractor's Supplier,
               shall be maintained in such a manner as to provide an audit trail
               and as to facilitate any examination and audit thereof by the
               Owner.

SECTION 12.12. For all items referred to in Section 12.11, the Owner or its
               authorized representatives or agents shall have the right to
               examine and audit, during business hours, all books, statements,
               accounts, correspondence, instructions, specifications, plans,
               drawings, receipts, memoranda, accounting documents and other
               records of the Contractor, including all supporting documents
               required for this purpose to be obtained by the Contractor from
               any Contractor's Supplier, insofar as they are pertinent.

               The Contractor shall cause all of its documentation specified
               above, including all supporting documents required for this
               purpose to be obtained by the

<Page>

Contract                                                             Page 54(56)

               Contractor from Subcontractors and the Contractor's Suppliers, to
               be preserved and made available for examination and audit,
               without any additional compensation therefor, for a period of
               twelve (12) Months after the earlier of the date of Acceptance
               and the date of any earlier termination of this Contract. The
               foregoing right of examination and audit shall extend, but shall
               not be limited to, calculations of unit rates, percentages per
               diem charges or other similar fixed amounts or man-hours worked
               or estimated to be worked which are to provide that basis of
               reimbursements or indemnifications to the Contractor and
               adjustments of the Contract Price. The foregoing right of
               examination and audit shall survive any early termination of this
               Contract.

SECTION 12.13. Notwithstanding the execution by the Owner of any approval,
               certificate of performance or payment to the Contractor or any
               Contractor's Supplier, the Owner shall be entitled to a refund
               from the Contractor in the event that any examination and audit
               of the documentation referred to in Section 12.11 above establish
               that the Contractor or any Contractor's Supplier did not incur
               any amount claimed. Such right of examination and refund shall
               continue for a period of three years after the earlier of the
               date of Acceptance and the date of any earlier termination of
               this Contract.

SECTION 12.14. Notwithstanding anything contained in this Article 12, no Change
               necessary due to any default of the Contractor in the performance
               of its obligations under the Contract shall result in any
               adjustment of the Contract Price and/or the Time Schedule.

ART. 13        OWNERSHIP AND RISK OF LOSS

               TRANSFER OF TITLE

SECTION 13.1.  The Parties hereby agree that title to all Works, equipment and
               Materials (the "ITEMS") to be provided by the Contractor under
               the Contract and all warrants (TRADITIONSPAPIERE, including
               KONNOSSEMENTS, LADESCHEINE and LAGERSCHEINE (irrespective of the
               law governing such warrants)) issued in relation to such Items
               (the "WARRANTS") shall be transferred to the Owner at the earlier
               of

<Page>

Contract                                                             Page 55(57)

               delivery to the Site or payment in respect thereof. For that
               purpose, the Contractor shall every 6 months (and otherwise from
               time to time as the Owner may reasonably instruct the
               Contractor), notify the Owner of all Items during the preceding 6
               month period (or otherwise since the last such notification
               received by the Owner) in relation to which the Contractor has
               received payment prior to delivery of such Items to the Site, and
               the Contractor shall provide the Owner with a signed protocol
               (each such protocol, a "Transfer Protocol") specifying such Items
               and the Warrants relating thereto. Each Transfer Protocol shall
               provide that (i) the Contractor reconfirms the passing to the
               Owner of title in the Items and the Warrants relating thereto
               specified in the Transfer Protocol and (ii) the Contractor waives
               its right to receive a countersigned copy of the Transfer
               Protocol. The Parties hereby agree that, upon counter signature
               by the Owner of each Transfer Protocol, title to all Items and
               the Warrants relating thereto listed in such Transfer Protocol
               shall be deemed to have passed to the Owner irrespective of
               whether the Contractor has actually received payment for such
               Items.

               The Parties hereby further agree that in the event of title
               passing to the Owner upon payment prior to delivery of the
               relevant Items to the Site as provided herein, for the purpose of
               title passing to the Owner, the transfer of possession in the
               relevant Items and the Warrants relating thereto is hereby
               replaced (BESITZKONSTITUT) as follows. The Contractor shall:

               (i)    hold possession of any Items and the Warrants relating
                      thereto specified in any Transfer Protocol and of which
                      the Contractor has possession on behalf of the Owner free
                      of charge (UNENTGELTLICHE VERWAHRUNG) and, in relation to
                      such Items and the Warrants relating thereto of which the
                      Contractor does not have possession, the Contractor
                      assigns to the Owner any claim of the Contractor for
                      transfer of possession (HERAUSGABEANSPRUCHE); and

<Page>

Contract                                                             Page 56(58)

               (ii)   ensure that such Items will be and will remain:

                      (a)     upon completion of manufacture of any item of such
                              Works, equipment or materials, separated from any
                              other Works, equipment and materials; and

                      (b)     clearly marked and/or reserved as the property of
                              the Owner; and

               (iii)  upon delivery to the Site of any Items in relation to
                      which title has not already passed to the Owner, ensure
                      that such Items are treated in the same manner as set out
                      in paragraph (ii).

               RISK OF LOSS

SECTION 13.2.  Notwithstanding the transfer of title pursuant to Section 13.1
               and except as otherwise provided in Section 18.11, all risk of
               damage to or loss of any item of the Works (other than Excepted
               Risks) shall be borne by and remain with the Contractor until
               Acceptance; provided, however, that the Contractor shall not be
               obligated to repair or restore any portion of the Works that is
               damaged by a risk covered by the insurance to be obtained and
               maintained by the Owner pursuant to Article 14 where the Banks do
               not make the proceeds of such insurance available to the
               Contractor for the purpose of such repair or restoration.

               The Owner shall, upon the written request of the Agent, release
               the Contractor from its obligation to repair or restore any
               portion of the Works that is damaged by a risk covered by the
               insurance to be obtained and maintained by the Owner pursuant to
               Article 14. It is hereby understood that any such release of the
               Contractor from its obligation to repair or restore any portion
               of the Works (the "RELEASED WORKS") shall shift the risk of loss
               in respect of the Released Works to the Owner. The Contractor
               hereby covenants that, in the case of a release pursuant to this
               paragraph, it will not claim any material

<Page>

Contract                                                             Page 57(59)

               interests (VERSICHERTE INTERESSEN) from which it would benefit
               without such release.

               If the Contractor is released from its obligation to repair or
               restore any portion of the Works pursuant to the preceding
               paragraph, the Contractor shall release each Selected Supplier
               from any obligation it may have to repair or restore such portion
               of the Works to the extent that that Selected Supplier has an
               obligation to do so pursuant to a Selected Subcontract. The
               Contractor shall also procure that any such Selected Supplier (i)
               covenants not to claim, in the case of a release, any material
               interests (VERSICHERTE INTERESSEN) from which it would benefit
               without such release and (ii) releases its suppliers from any
               obligation they may have to repair or restore that portion of the
               Works and procures that its suppliers covenant not to claim, in
               the case of a release, any material interests (VERSICHERTE
               INTERESSEN) from which they would benefit without such release.

               If the Contractor reasonably incurs costs related to mitigating
               the effects of the insured event between the date of the
               occurrence of the insured event and the date on which the
               Contractor is released from its obligation to repair or restore
               any of the Works in accordance with this section 13.2, the Owner
               shall, without prejudice to section 26.4, ensure that to the
               extent that insurance proceeds in respect of the Contractor's
               mitigation costs are paid by the insurance company under the
               insurance to be obtained by the Owner pursuant to Article 14, the
               Contractor is provided with any such insurance proceeds.

               The Contractor shall also be responsible for all damages
               resulting from the operation of the Works prior to Acceptance
               unless caused by the wilful misconduct of the Owner's personnel
               and during the Schedule B Tests unless caused by wilful
               misconduct or gross negligence of the Owner's personnel. The
               Contractor shall also be responsible for the consequences of any
               non-compliance by it or any Contractor's Supplier with Laws or
               Permits.

<Page>

Contract                                                             Page 58(60)

               Excepted Risks shall mean each of the following insofar as they
               directly affect the Site:

               (a)    war, hostilities (whether war be declared or not),
                      invasion, act of foreign enemies, terrorist acts (until
                      insurance for such acts is obtained by the Owner),

               (b)    ionizing radiation, or contamination by radioactivity from
                      any nuclear fuel, or from any nuclear waste from the
                      combustion of nuclear fuel, radioactive toxic explosive or
                      other hazardous properties of any explosive nuclear
                      assembly or nuclear component thereof, but not including
                      goods and material such as measuring, monitoring and
                      testing devices, that use low levels of radiation, in each
                      case from a source outside of the Site,

               (c)    pressure waves caused by aircraft or other aerial devices
                      travelling at sonic or supersonic speeds,

               (d)    riot, commotion or disorder, unless restricted to
                      employees or agents of the Contractor or the Contractor's
                      Suppliers,

               (e)    rebellion, revolution, insurrection, or military or
                      usurped power, or civil war;

               except to the extent any of the above (i) existed prior to the
               Contract Day, (ii) are covered by insurance maintained pursuant
               to Article 14 or (iii) are the direct or indirect result of
               actions by the Contractor or any Contractor's Supplier, or the
               failure of the Contractor or any Contractor's Supplier to perform
               any of its obligations under this Contract or the applicable
               subcontract, and provided that the Contractor has taken all
               reasonable precautions, due care, and reasonable alternative
               measures in order to mitigate the consequences thereof.

<Page>

Contract                                                             Page 59(61)

SECTION 13.3.  All of the Contractor's Equipment shall be brought to and kept at
               the Site at the sole cost, risk and expense of the Contractor or
               Contractor's Supplier and the Owner shall not be liable for any
               loss or damage thereto in connection with the performance of the
               Works.

ART. 14        INSURANCE

               The Owner will maintain at its own cost insurance policies taken
               out as at the date hereof consistent with the indicative
               description set out in Appendix 2, Exhibit 6. The Contractor (and
               Contractor's Suppliers) will be added as a named insured party
               for its respective rights and interests in the policy.

               The Owner will be responsible for notifying insurers, filing and
               prosecuting all insurance claims pursuant to any insurance policy
               required under the Contract.

               The Contractor will be required to take out, at its own cost, and
               require all Contractor's Suppliers to take out and maintain, at
               their own cost, insurance in compliance with Law and:

               1)     Workmen's Compensation/Employers' Liability insurance with
                      a minimum sum insured for any one occurrence and in the
                      annual aggregate to a level adequate to cover statutory
                      liability under applicable Laws;

               2)     Motor Vehicle Liability (including Third Party Property
                      Damage) to at least the levels required to comply with
                      Law;

               3)     insurance against loss or damage to the Contractor's
                      Equipment used in performance of the Contract while at,
                      on, adjacent to or in transit to or from the Site;

               4)     material damage insurance against fire, lightning,
                      aircraft, explosion, earthquake, impact, storm, tempest,
                      flood, on all administrative, manufacturing and storage
                      facilities owned leased or hired by the

<Page>

Contract                                                             Page 60(62)

                      Contractor and used by the Contractor for the performance
                      of the Contract; and

               5)     Professional Indemnity insurance to the extent available
                      in accordance with the existing insurance policies of the
                      Contractor or Contractor's Suppliers.

               The Contractor will be required to:

               (a)    bear the deductibles (up to (euro)75,000 per loss and
                      (euro)750,000 in the aggregate per year) where any claim
                      under the Owner's insurance arises by reason of the
                      Contractor's performance of its obligations under the
                      Contract;

               (b)    the Contractor shall be responsible for, and shall
                      compensate the Owner in respect of, any increase in the
                      premium for the Owner's Insurance to the extent that any
                      such increase is attributable to claims made on such
                      insurance by reason of fault of the Contractor;

               (c)    not act or omit to act in a manner which might prejudice
                      such insurance and promptly comply with the
                      recommendations of the insurers of the Owner so that said
                      insurance carriers will continue to provide the cover
                      maintained by the Owner;

               (d)    assist, and cause the Contractor's Suppliers to assist, in
                      the disclosure of information to insurers and will, and
                      will cause the Contractor's Suppliers to disclose all
                      information material to the risks covered by the insurance
                      procured by the Owner under the Contract;

               (e)    fully comply with, and require all Contractor's Suppliers
                      to comply fully with, all procedures and services
                      including completion of all necessary applications for
                      insurance, prompt and full compliance with all audit
                      requests and claim reporting procedures, and full
                      participation in and compliance with safety and loss
                      control programs implemented by, or

<Page>

Contract                                                             Page 61(63)

                      at the request of, the Owner, all of the above to be in
                      accordance with applicable professional standards;

               (f)    any claims with respect to any event covered by the
                      insurance listed in the Contract shall be made on the
                      basis that such insurance is the primary insurance and not
                      in contribution with any other insurance the Contractor or
                      any Contractor's Suppliers may have and thereby will not
                      jeopardize the availability of cover under any delay in
                      start up, business interruption or similar type insurance
                      that the Owner may have;

               (g)    in respect of the insurance obtained pursuant to
                      paragraphs (1), (2) and (3) above, obtain an "Indemnity to
                      Principals" clause and a clause providing for a waiver of
                      insurers' rights of redress against the Owner, the Lenders
                      and such other parties as notified to the Contractor by
                      the Owner;

               (h)    assist and co-operate, and require all Contractor's
                      Suppliers to assist and co-operate, in every manner
                      possible in connection with the adjustment of all claims
                      arising out of the operations conducted under, or in
                      connection with, the Contract and shall co-operate with
                      the insurers of the Owner in all litigated claims and
                      demands which arise out of said operations and which the
                      said insurers are called upon to adjust to resist.

               (i)    obtain certificates of insurance from each Contractor's
                      Supplier evidencing the required cover is in full force
                      and effect and, if requested, provide the Owner with such
                      certificates. The Contractor shall procure by stipulation
                      in all Contractor's Suppliers' contracts that all
                      insurance policies arranged by any Contractor's Suppliers
                      are to comply with this Contract and shall include a
                      provision for "Indemnity to Principals" and a waiver of
                      their insurers rights of redress against the

<Page>

Contract                                                             Page 62(64)

                      Owner, the Banks and such other parties as notified to the
                      Contractor by the Owner;

               (j)    the insurance set out under this Section does not alter
                      the liabilities of the Parties (except insofar as it
                      obligates the Owner to obtain and maintain insurance under
                      the conditions set out herein) or otherwise affect the
                      allocation of risk under this Contract and shall in no way
                      affect, nor are they intended as a limitation of the
                      Contractor's liability with respect to its performance of
                      the Contract.

ART. 15        WORK ENVIRONMENT RESPONSIBILITY

SECTION 15.1.  The responsibility for coordination according to the Work
               Environment Act (BAUSTELLENVERORDNUNG) shall be borne by the
               Contractor. However, this does not derogate from either Party's
               normal employer responsibility, for their own personnel, their
               own or their employee's tools, technical devices and vehicles. In
               accordance with this, the Parties shall be responsible for
               ensuring that their employees and their subcontractors' employees
               have been given the necessary training, received appropriate
               information about regulations concerning order, safety and
               security at the workplace in accordance with Appendix 3, Ex. 16
               and other regulations and instructions (including all TUV
               (Technical Control Board) provisions, all trade law provisions,
               the accident prevention provisions of the social insurance
               associations and all statutes, in particular statutes for
               protection against building noise and other federal and state law
               emission control regulations, ordinances and local by-laws which
               affect the Works) issued by the authorities or the Owner for the
               work concerned.

SECTION 15.2.  Each Party shall participate in the safety organization and joint
               safety inspection rounds, and to comply with all applicable Laws
               concerning order and safety which are applicable at each
               workplace and at the Site. The Contractor shall ensure that all
               Contractor's Suppliers are bound by the same obligation.

<Page>

Contract                                                             Page 63(65)

SECTION 15.3.  The Contractor shall, and shall ensure that each Contractor's
               Supplier take all reasonable steps to protect the environment
               (both on and off the Site) and to limit damage and nuisance to
               people and property resulting from pollution, noise and other
               results of its operations during the performance of the Works.

               During the execution of the Works the Contractor shall ensure
               that emissions, surface discharges and effluent from the Works,
               including operation of the Plant prior to Acceptance and during
               the Schedule B Tests, shall not exceed the values prescribed by
               applicable Laws and Permits for the Plant.

SECTION 15.4.  The Contractor shall indemnify and hold harmless the Owner and
               its employees and officers from and against any and all suits,
               actions or administrative proceedings, claims, demands, losses,
               damages, costs, and expenses of whatsoever nature, including
               attorney's fees and expenses, which the Owner may suffer as a
               result of any allegation, notice of violation, claim, demand,
               order, directive, cost recovery action or other cause of action
               by, or on behalf of, any Relevant Authority or any person for
               damages, injunctive or equitable relief, personal injury
               (including sickness, disease or death), remedial action costs,
               tangible or intangible property damage, natural resource damages,
               nuisance, pollution, any adverse effect on the environment caused
               by any hazardous material, or for fines, penalties or
               restrictions, resulting from or based upon (a) the alleged
               existence, or the continuation of the existence, of a release of
               hazardous material (including sudden or non-sudden, accidental or
               non-accidental releases), (b) the alleged exposure to any
               hazardous material, (c) the alleged presence, use, handling,
               transportation, storage, treatment or disposal of any hazardous
               material or (d) the violation or alleged violation of any
               environmental law or environmental Permit, in the case of each of
               (a) through (d) to the extent caused by the Contractor or any
               Contractor's Supplier. Such indemnity shall not cover the Owner's
               Scope or any use by the Owner of the Works or any part thereof
               other than for the purpose indicated by, or reasonably to be
               inferred from, the Contract.

<Page>

Contract                                                             Page 64(66)

ART. 16        MECHANICAL COMPLETION

SECTION 16.1.  The Contractor shall perform Mechanical Completion Tests and
               verify the satisfaction of the applicable Mechanical Completion
               checklist, each as specified in Appendix 3, Ex. 11.1, to ensure
               that each System, each Non-System Department and, after each
               System and Non-System Department has satisfied the applicable
               Mechanical Completion Test, the Works have been properly
               installed and are in accordance with the Contract. The Contractor
               shall provide all equipment, Materials, supplies, personnel and
               utilities for such tests except for items to be provided by the
               Owner in accordance with Appendix 3, Ex. 4.

SECTION 16.2.  Not later than seventy-five (75) Days prior to anticipated
               Mechanical Completion of a System or Non-System Department, the
               Contractor shall deliver a plan of Mechanical Completion Tests
               (including details of how such tests shall be performed) for the
               systematic checking of all relevant parts of the Works as set
               forth in Appendix 3, Ex. 11.1, together with the Mechanical
               Completion checklist for such System or Non-System Department.
               The Owner shall review such plan and checklist and, within
               fifteen (15) Days after the date on which such documents were
               actually received by the Owner and the Independent Engineer,
               shall either notify the Contractor of its approval (such approval
               not to be unreasonably withheld) or of any remarks and
               observations. If such notification has not been given to the
               Contractor within said period, approval of the plan and checklist
               shall be deemed given upon expiry of said fifteen (15) Day
               period. If the Owner submits any remarks or observations
               (including remarks or observations provided to the Owner by the
               Independent Engineer), the Contractor shall meet with the Owner
               and endeavor to resolve all issues within the next fifteen (15)
               Days (all such issues shall in any event be resolved prior to the
               commencement of the Mechanical Completion Tests).

SECTION 16.3.  The Contractor shall give at least five (5) Business Days' prior
               written notice to the Owner and the Independent Engineer of all
               Mechanical Completion

<Page>

Contract                                                             Page 65(67)

               Tests specified in Appendix 3, Ex. 11.1 and the Owner and the
               Independent Engineer shall have the right to witness all such
               Mechanical Completion Tests. In the event that the Owner or the
               Independent Engineer, after having been notified properly, does
               not attend any such Mechanical Completion Test, the Contractor
               shall be entitled to proceed in accordance with the plans and
               checklists for such tests as established in accordance with
               Section 16.2.

SECTION 16.4.  The Contractor shall certify in writing to the Owner and the
               Independent Engineer that the relevant System, Non-System
               Department or the Works, as the case may be, complies with the
               requirements for Mechanical Completion set forth in Appendix 3,
               Ex. 11.1 and shall submit to the Owner six copies of the
               Mechanical Completion Test results and the completed Mechanical
               Completion checklists, and make a copy of such test results and
               checklists available to the Independent Engineer at the Site, for
               verification that the test results and the completed checklists
               conform to the requirements set forth in the plans prepared in
               accordance with Appendix 3, Ex. 11.1. The Contractor shall give
               the Owner and the Independent Engineer at least two (2) Business
               Days' advance notice of the date on which it anticipates
               submitting the test results for review.

SECTION 16.5.  If the results of the Mechanical Completion Tests and the
               completed Mechanical Completion checklists properly conform to
               the requirements of the Contract, the Owner shall issue three
               original signed copies of a Certificate of Mechanical Completion
               for the applicable System or Non-System Department within five
               (5) Business Days after receipt by the Owner and the Independent
               Engineer of such results and checklists, dated to reflect the
               actual date of Mechanical Completion of the System or Non-System
               Department, one of such copies to be provided to the Contractor.
               If the Owner believes that the test results or the completed
               Mechanical Completion checklists do not properly conform to the
               requirements set forth in the Contract or indicate that the
               System or Non-System Department has not been properly installed,
               the Owner shall notify the Contractor of such results within five
               (5) Business Days

<Page>

Contract                                                             Page 66(68)

               after the Owner and the Independent Engineer have received such
               results or checklists and the Contractor shall promptly take such
               corrective action as is necessary to cure the defects or
               deficiencies. The Contractor shall thereafter re-perform the
               applicable Mechanical Completion Tests and re-submit test results
               or completed checklists to the Owner and the Independent Engineer
               as specified herein. If the Owner neither issues the Certificate
               of Mechanical Completion of such System or Non-System Department
               nor notifies the Contractor that the test results of the
               Mechanical Completion Tests and/or the completed Mechanical
               Completion checklists do not properly conform as aforesaid prior
               to the end of the fifth (5th) Business Day following receipt by
               the Owner and the Independent Engineer of the results of the
               Mechanical Completion Tests (or the re-performance thereof) and
               the completed Mechanical Completion checklists with respect to a
               System or Non-System Department, then a Certificate of Mechanical
               Completion of such System or Non-System Department will be deemed
               to have been issued as of such fifth Business Day.

SECTION 16.6.  The Owner shall not withhold the issue of a Certificate of
               Mechanical Completion of a System or Non-System Department if all
               items required to achieve Mechanical Completion shall have been
               completed except for Punch List items which do not adversely
               affect the Commissioning of the System, Non-System Department or
               any other System or Non-System Department without damage to the
               Works or the environment. All such defects and deficiencies shall
               be listed in the Punch List and all such Punch List items shall
               be remedied by the Contractor as soon as possible but in any
               event within six (6) months after Acceptance.

SECTION 16.7.  The Certificate of Mechanical Completion for the Works shall be
               issued after:

               (a)    Certificates of Mechanical Completion have been issued for
                      (i) all Systems and (ii) all Non-System Departments that
                      are scheduled to be completed by the Scheduled Mechanical
                      Completion Date;

<Page>

Contract                                                             Page 67(69)

               (b)    documentation has been delivered in accordance with and to
                      the extent required by Appendix 3, Ex. 3.2;

               (c)    the training program for the Owner's personnel has been
                      completed to the degree provided in Appendix 3, Ex. 3.5
                      and Ex. 4.6; and

               (d)    the Contractor certifies that all items on the Master
                      Equipment List in Appendix 3, Ex. 5 are as required by the
                      Specifications and have been installed (except as agreed).

               Within five (5) Business Days after the foregoing conditions are
               satisfied, the Owner shall issue three original signed copies of
               the Certificate confirming the date of Mechanical Completion of
               the Works, one such copy to be provided to the Contractor. The
               Certificate of Mechanical Completion of the Works shall be dated
               the same date as and issued (or deemed to be issued as the case
               may be) concurrently with the Certificate of Mechanical
               Completion for the last System or Non-System Department for which
               a Certificate of Mechanical Completion is required to be issued
               by the Scheduled Mechanical Completion Date.

SECTION 16.8.  Within five (5) Business Days after the issuance of the
               Certificate of Mechanical Completion of the Works, the Contractor
               shall either confirm to the Owner that the Owner's Scope,
               including the furnishing of the inventory of spare parts to be
               provided by the Owner pursuant to Section 4.5, has been completed
               or else notify the Owner of those items within the Owner's Scope
               that remain to be completed and/or corrected. If the Contractor
               does not notify the Owner prior to the end of the fifth (5th)
               Business Day after the issuance of the Certificate of Mechanical
               Completion of the Works of any items that remain to be so
               completed and/or corrected, the Owner's Scope shall be deemed to
               be completed as of such date.

<Page>

Contract                                                             Page 68(70)

ART. 17        TRAINING; COMMISSIONING, SYSTEM START-UP, START-UP AND SCHEDULE A
               TESTS

SECTION 17.1.  Upon Mechanical Completion of a System, Commissioning of such
               System as set forth in Appendix 3, Ex. 11.2 shall be carried out
               by the Owner's operating personnel under the instruction,
               supervision and direction of the Contractor as described in
               Appendix 3, Ex. 3.5 and 4.6. The Contractor shall be responsible
               for having sufficient qualified personnel available at the Site
               during Commissioning and until Acceptance to adequately supervise
               the Owner's personnel and determine the cause of any Defects
               which may become apparent and promptly to remedy the same.

SECTION 17.2.  The Contractor shall provide all items required for the
               performance of Commissioning and until Acceptance, except as
               otherwise provided in Appendix 3 Ex. 4.1 and 11. The Owner shall
               provide the operating personnel, the raw materials and other
               consumables for Commissioning, System Start-up and for Start-up
               specified in Appendix 3, Ex. 4.1. All pulp and other output
               produced by the Plant prior to Acceptance, including during test
               runs, shall be property of the Owner.

SECTION 17.3.  After Commissioning of a System has been completed in accordance
               with the Contract and training of the Owner's personnel has
               progressed in accordance with the training program as set forth
               in Appendix 3, Ex. 3.5 and 4.6 and the System is ready for System
               Start-up, the Contractor shall give the Owner and the Independent
               Engineer at least twenty-four (24) hours' prior written notice of
               the scheduled date (and time) for commencement of System
               Start-up.

               The Contractor shall conduct System Start-up for each System as
               set forth in and in the sequence provided in Appendix 3,
               Ex. 11.3.

               Start-up shall be conducted in accordance with Appendix 3,
               Ex. 11.4 following the successful completion of System Start-up
               of all Systems.

<Page>

Contract                                                             Page 69(71)

SECTION 17.4.  System Start-up and Start-up shall be conducted under the
               instruction, supervision and direction of the Contractor by the
               Owner's operating personnel as set forth in Appendix 3, Ex. 3.5
               and 4.6.

SECTION 17.5.  After completion of System Start-up of the respective Systems,
               the Schedule A tests shall be performed pursuant to and in
               accordance with detailed procedures prepared by the Contractor
               and delivered to the Owner and Independent Engineer at least
               sixty (60) Days prior to the anticipated commencement of such
               tests. The Owner shall review such procedures and, within fifteen
               (15) Days after the date on which such documents were actually
               received by the Owner and the Independent Engineer, shall either
               notify the Contractor of its approval (such approval not to be
               unreasonably withheld) or of any remarks and observations. If
               such notification has not been given to the Contractor within
               said period, approval of the detailed procedure shall be deemed
               given upon expiry of said fifteen (15) Day period. If the Owner
               submits any remarks or observations (including remarks or
               observations provided to the Owner by the Independent Engineer),
               the Contractor shall meet with the Owner and endeavor to resolve
               all issues within the next fifteen (15) Days (all such issues
               shall in any event be resolved prior to commencement of the
               Schedule A Tests).

SECTION 17.6.  The Contractor shall give the Owner and the Independent Engineer
               at least twenty-four (24) hours' prior written notice of the
               performance of any Schedule A Test, and the Owner and the
               Independent Engineer shall have the right to witness all such
               tests.

SECTION 17.7.  The Contractor shall submit six copies of the results of the
               Schedule A tests to the Owner and make a copy of such results
               available to the Independent Engineer at the Site for
               verification that the tested System conforms to the requirements
               of Appendix 3, Ex. 12.2. The Contractor shall give the Owner and
               the Independent Engineer at least two (2) Business Days' advance
               notice of the date on which it anticipates submitting such test
               results for review.

<Page>

Contract                                                             Page 70(72)

SECTION 17.8.  If the results of the Schedule A Tests prove the compliance of
               the applicable System with the performance criteria specified in
               Appendix 3, Ex. 12.2, the Owner shall, within two (2) Business
               Days after receiving such results, confirm that such System has
               satisfied the performance criteria for the applicable Schedule A
               Test by issuing three original signed copies of the Certificate
               of Operational Acceptance of the System dated to reflect the
               actual date of Operational Acceptance, two of such copies to be
               provided to the Contractor. If the results of the Schedule A
               tests indicate that the applicable System does not satisfy the
               performance criteria specified in Appendix 3, Ex. 12.2, the Owner
               shall notify the Contractor within two (2) Business Days after
               receiving such results and the Contractor shall promptly take
               such corrective action as is necessary to rectify any defect or
               deficiency. After the Contractor has completed such corrective
               action and determines that the System is ready for re-testing,
               the Contractor shall give the Owner and the Independent Engineer
               at least 24 hours' notice of the date (and time) that the failed
               Schedule A test will be re-performed. Upon completion of the
               re-performed Schedule A tests, the Contractor shall re-submit six
               copies of such test results to the Owner and the Independent
               Engineer as specified herein and the Owner shall, within two (2)
               Days, either advise the Contractor in writing of any additional
               defects or deficiencies that are discovered (in which event the
               Contractor shall promptly take such action as is necessary to
               rectify such defect or deficiency and re-perform the relevant
               Schedule A Test in accordance with the procedures established
               pursuant to Section 17.5) or the Owner shall issue three original
               signed copies of the Certificate of Operational Acceptance of
               such System dated to reflect the actual date of Operational
               Acceptance, two of such copies to be provided to the Contractor.
               If the Owner neither issues the Certificate of Operational
               Acceptance of such System nor notifies the Contractor that the
               applicable System does not conform to the requirements specified
               in Appendix 3, Ex. 12.2 prior to the end of the second (2)
               Business Day following receipt by the Owner and the Independent
               Engineer of the results of

<Page>

Contract                                                             Page 71(73)

               a Schedule A test or of the results of the re-performance of such
               Schedule A test with respect to a System, then a Certificate of
               Operational Acceptance for such System will be deemed to have
               been issued as of such second Business Day.

SECTION 17.9.  The Owner shall not withhold the issuance of a Certificate of
               Operational Acceptance of a System if all items required to
               achieve Operational Acceptance shall have been completed except
               for Punch List items relating to the System, but all such Punch
               List items shall be remedied by the Contractor as soon as
               possible and in any event within six (6) months after Acceptance.

SECTION 17.10. Upon satisfaction of the following conditions the Owner shall
               issue three original signed copies of the Certificate confirming
               the date of Operational Acceptance of the Works (one such copy to
               be provided to the Contractor):

               (a)    Certificates of Operational Acceptance have been issued
                      for all Systems that are subject to Schedule A Tests and
                      any Punch Lists issued;

               (b)    documentation has been delivered in accordance with and to
                      the extent provided in Appendix 3, Ex. 3.2; and

               (c)    the training program for the Owner's personnel has been
                      completed to the degree provided in Appendix 3, Ex. 3.5
                      and Ex. 4.6.

               The Certificate of Operational Acceptance of the Works shall be
               dated the same date as and, provided the conditions in clauses
               (b) and (c) have then been satisfied, issued (or deemed to be
               issued as the case may be) concurrently with the Certificate of
               Operational Acceptance for the last System for which a
               Certificate of Operational Acceptance is required to be issued.

SECTION 17.11. The issuance of the Certificate of Operational Acceptance of the
               Works pursuant to Section 17.10 is the condition precedent for
               commencement of the 72-Hour Test. In the event that a Schedule A
               Test cannot be carried out

<Page>

Contract                                                             Page 72(74)

               or cannot be successfully carried out due to a failure by the
               Owner to perform the Owner's Scope in accordance with the
               Contract (which has not been caused or contributed to by the
               Contractor), then, so long as all other Schedule A tests have
               been successfully completed or waived by the Owner, the
               Contractor shall be entitled to a Change in the Time Schedule
               pursuant to Section 8.9 equal to the period of delay in
               fulfillment by the Owner of such obligations and a Change in the
               Contract Price pursuant to Section 9.8 equal to any additional
               costs reasonably incurred by the Contractor as a result of such
               delay.

ART. 18        72-HOUR TEST AND ACCEPTANCE OF WORKS

SECTION 18.1.  During the period between Mechanical Completion of a System and
               Acceptance of the Works, such System(s) or, upon Mechanical
               Completion of all Systems, the Plant will be operated by the
               Owner's personnel under the instruction, supervision and
               direction of the Contractor in order to fine-tune all Systems in
               preparation for the 72-Hour Test.

SECTION 18.2.  At least seventy-five (75) Days prior to the anticipated
               commencement of the 72-Hour Test, the Contractor shall prepare
               and deliver to the Owner and the Independent Engineer detailed
               procedures for the conduct of the 72-Hour Test (including
               sampling and testing of Materials and consumables to be supplied
               by the Owner for purposes of the 72-Hour Test). The Owner and
               Independent Engineer shall review such procedures and, within
               fifteen (15) Days after the date on which such documents were
               actually received by the Owner and the Independent Engineer, the
               Owner shall either notify the Contractor of its approval (such
               approval not to be unreasonably withheld) or of any remarks and
               observations. If such notification has not been given to the
               Contractor within said period, approval of the detailed procedure
               shall be deemed given upon expiry of said fifteen (15) Day
               period. If the Owner submits any remarks or observations
               (including remarks or observations provided to the Owner by the
               Independent Engineer), the Contractor shall meet with the Owner
               and the Independent Engineer and endeavor to resolve

<Page>

Contract                                                             Page 73(75)

               all issues within the next fifteen (15) Days (all such issues
               shall in any event be resolved prior to the 72-Hour Test).

SECTION 18.3.  At least thirty (30) Days prior to the anticipated commencement
               of the 72-Hour Test, the Parties shall select and jointly engage
               an independent laboratory to conduct split sample testing for
               purposes of the 72-Hour Test in accordance with the test
               procedures. The costs of the independent laboratory shall be
               shared equally by the Parties.

SECTION 18.4.  Fourteen (14) Days prior to the date when the Plant is
               anticipated by Contractor to be ready for the commencement of the
               72-Hour Test, the Contractor shall so notify the Owner and the
               Independent Engineer. When the Plant is ready for the 72-Hour
               Test, and provided that Operational Acceptance of the Works has
               been achieved in accordance with Section 17.10, the Contractor
               shall certify in writing to the Owner that the Works have
               satisfied all required conditions for commencement of the 72-Hour
               Test. The Contractor shall give the Owner and the Independent
               Engineer at least twenty-four (24) hours' prior notice of the
               commencement of such test and the Owner and the Independent
               Engineer shall have the right to witness the test. The 72-Hour
               Test shall be carried out as set forth in Appendix 3, Ex. 12.5 by
               the Owner's personnel under the instruction, supervision and
               direction of the Contractor and in accordance with the detailed
               procedures established pursuant to Section 18.2. All data
               measured and information gathered during the 72-Hour Test shall
               be properly documented and signed by authorized representatives
               of both Parties.

SECTION 18.5.  The results of the 72-Hour Test(s) shall be evaluated in
               accordance with the procedure set forth in Appendix 3, Ex. 12.5
               and Ex. 12.6.

SECTION 18.6.  Following completion of the 72-Hour Test, the Contractor shall
               submit to the Owner as soon as available and in any event within
               thirty (30) Days after completion of the 72-Hour Test, six
               original signed copies of the results of such test (together with
               a written certification by the Contractor that the test

<Page>

Contract                                                             Page 74(76)

               results and, if applicable, the test results from the independent
               laboratory, are true and correct), and make a copy of such test
               results and other items available to the Independent Engineer at
               the Site, for approval that the Minimum Performance Requirements
               for the Works specified in the Contract have been fulfilled. The
               Contractor shall give the Owner and the Independent Engineer at
               least two (2) Business Days' advance notice of the date on which
               it anticipates submitting such test results for review.

SECTION 18.7.  If the following conditions are satisfied:

               (i)    the results of the 72-Hour Test shows that the Works meet
                      all Minimum Performance Requirements set forth in Appendix
                      3, Ex. 12.6,

               (ii)   all Non-System Departments have been successfully
                      completed as described in Article 16,

               (iii)  documentation has been delivered in accordance with and to
                      the extent provided in Appendix 3, Ex. 3.2,

               (iv)   all Permits required to have been obtained by the
                      Contractor by such date have been issued and are in full
                      force and effect, and

               (v)    the Contractor shall have validly assigned to the Owner
                      all its rights with respect to performance or availability
                      guarantees by the Contractor's Suppliers,

               the Owner shall, within five (5) Business Days after receiving
               such results, confirm that the Works have achieved all such
               Minimum Performance Requirements and satisfied the 72-Hour Test
               by issuing the Acceptance Certificate in the form set out in
               Annex A to Appendix 2, Ex. 4 (together with a list of the Punch
               List items from Sections 16.6 and 17.9, and any additional items
               identified during the 72-Hour Test that remain to be completed)
               dated to reflect the actual date of passing the 72-Hour Test.
               Notwithstanding anything to the contrary contained herein, the
               Owner shall be entitled to withhold from

<Page>

Contract                                                             Page 75(77)

               the amount due to the Contractor upon Acceptance one hundred
               fifty percent (150%) of the value of all uncompleted Punch List
               items, which amount shall be paid to the Contractor upon
               completion of such Punch List items.

SECTION 18.8.  If the results of the 72-Hour Test show that the Works do not
               fulfill all of the Minimum Performance Requirements set forth in
               Appendix 3 Ex. 12.6 or the test was not performed in accordance
               with the procedures established pursuant to Section 18.2, the
               Owner shall so notify the Contractor within five (5) Business
               Days after receipt by the Owner and the Independent Engineer of
               such results and the Contractor shall take such corrective action
               as is necessary to correct the deficiencies in the Works without
               delay (and in any event within six (6) months after the results
               of the first test have been given to the Owner and the
               Independent Engineer) so that all of the Minimum Performance
               Requirements are achieved in a repeat 72-Hour Test in accordance
               with this Article 18 or, if acceptable to the Owner, as part of a
               Schedule B Test.

SECTION 18.9.  In no event shall the Acceptance Certificate be given, or deemed
               to be given, unless and until the Works have met all of the
               Minimum Performance Requirements set forth in Appendix 3, Ex.
               12.6. If all of the Minimum Performance Requirements are not
               achieved prior to (i) such time as the Contractor has incurred
               liquidated damages for delay equal to the maximum amount
               permitted under Section 21.1 of the Contract or (ii) in the event
               that an insured event that does not qualify as an Event of Force
               Majeure occurs off-Site with respect to the turbogenerator, steam
               drum for the power boiler or recovery boiler, 33 kV transformer
               or fan pump and proceeds are payable for the delay in Start-up
               resulting from such event under the insurance to be obtained and
               maintained by the Owner pursuant to Article 14, three (3) Months
               after the expiration of the period specified in clause (i) above,
               the Contractor shall pay the applicable performance liquidated
               damages for deficient performance in accordance with Section 21.2
               and, notwithstanding such payment, shall remain obligated to take
               any and all such corrective

<Page>

Contract                                                             Page 76(78)

               actions at its own cost and expense (without regard to any
               limitations that might otherwise be applicable under Section 635
               (3) BGB) as are necessary to correct the deficiencies in the
               Works so as to achieve all of the Minimum Performance
               Requirements.

SECTION 18.10. If the Owner neither issues the Acceptance Certificate nor
               notifies the Contractor that the Works do not satisfy the Minimum
               Performance Requirements set forth in Appendix 3, Ex. 12.6 prior
               to the end of the fifth (5) Business Day following receipt by the
               Owner and the Independent Engineer of the results of the 72-Hour
               Test or the re-performance of such test, then the Acceptance
               Certificate will be deemed to have been issued as of the fifth
               Business Day after completion of the 72-Hour Test, dated to
               reflect the actual date of passing the 72-Hour Test, provided
               that the Contractor shall nevertheless remain obligated to
               satisfy the conditions set forth in clauses (ii) - (vi) of
               Section 18.7. In no event shall Acceptance be replaced by public
               authority acceptance or, except as provided in this
               Section 18.10, by notification of completion by the Contractor.
               The possibilities of a fictitious acceptance provided for in
               Section 640 BGB or of implied acceptance and the right of the
               Contractor to obtain a certificate of completion pursuant to
               Section 641a BGB are excluded.

SECTION 18.11. In the event that, due to the failure of the Owner to perform the
               Owner's Scope in accordance with the Contract (which has not been
               caused or contributed to by the Contractor), the first 72-Hour
               Test cannot be carried out within six (6) months after Mechanical
               Completion (plus any period by which the Time Schedule has been
               extended pursuant to Section 17.11), then, provided that
               Mechanical Completion of the Works has occurred, the Defects
               Liability Period shall commence and risk of loss with regard to
               the Works shall be transferred to the Owner upon the expiry of
               such period, and the Contractor shall be entitled to a Change in
               the Time Schedule pursuant to Section 8.9 equal to the period of
               delay in fulfillment by the Owner of such obligations and a
               Change in the Contract Price pursuant to Section 9.8 equal

<Page>

Contract                                                             Page 77(79)

               to any additional costs reasonably incurred by the Contractor as
               a result of such delay.

SECTION 18.12. After expiry of the six (6) month period described in Section
               18.11 above (as the same may be extended), the Contractor shall
               remain obligated to demonstrate compliance of the Works with the
               Performance Requirements within nine (9) months following
               Mechanical Completion, upon terms to be agreed upon and taking
               into consideration the actual situation of the Plant.

SECTION 18.13. With regard to defects, performance deficiencies or Punch List
               items previously notified to the Contractor, the Owner retains
               its rights under this Contract regardless of whether it made a
               formal reservation pursuant to Section 640 subpara. 2 BGB on the
               occasion of Acceptance.

ART. 19        SCHEDULE B TESTS

SECTION 19.1.  Not later than six (6) months after Acceptance the Contractor
               shall demonstrate that the Systems set forth in Appendix 3, Ex.
               12.3 achieve the Performance Requirements stipulated in Appendix
               3, Ex. 12.4. The Owner shall have the right (in consultation with
               the Independent Engineer) to waive in writing any Schedule B Test
               if satisfied with the performance of the Plant in production.

SECTION 19.2.  The Owner's operating personnel, under the instruction, direction
               and supervision of the Contractor, shall carry out the Schedule B
               Tests in accordance with checklists and detailed test procedures
               prepared by the Contractor and delivered to the Owner and the
               Independent Engineer at least seventy-five (75) Days prior to the
               anticipated commencement of the first Schedule B Test. The Owner
               and the Independent Engineer shall review such procedures and,
               within fifteen (15) Days after the date on which such documents
               were actually received by the Owner and the Independent Engineer,
               the Owner shall either notify the Contractor of its approval
               (such approval not to be unreasonably withheld) or the Owner
               shall notify the Contractor of any remarks and observations
               (including remarks or

<Page>

Contract                                                             Page 78(80)

               observations provided to the Owner by the Independent Engineer).
               If such notification has not been communicated to the Contractor
               within said period, approval of the detailed procedure shall be
               deemed given upon expiry of said fifteen (15) Day period. If the
               Owner submits any remarks or observations (including remarks or
               observations provided to the Owner by the Independent Engineer),
               the Contractor shall meet with the Owner and endeavor to resolve
               all issues within the next fifteen (15) Days (all such issues
               shall in any event be resolved prior to the commencement of the
               Schedule B Test).

SECTION 19.3.  When the Contractor believes that a System is ready for the
               commencement of its Schedule B Test, the Contractor shall provide
               the Owner and the Independent Engineer with at least fourteen 14
               Days' prior written notice of the performance of such test. The
               exact timing of any Schedule B testing, as well as of Plant
               shutdowns following Acceptance, if required, shall be agreed
               between the Parties in due course in order not to interfere with
               the operation of the Plant, taking into account pulp prices, the
               cash flows and revenue anticipated to be generated pursuant to
               the Base Case and other operating considerations and the fact
               that the Contractor is entitled to 3 attempts for each Schedule B
               Test. If, as a result of a written request by the Owner that the
               Contractor not perform a Schedule B Test or the failure by the
               Owner to respond within seven (7) Days to a written request by
               the Contractor to perform a Schedule B Test, the Schedule B Tests
               for one or more Systems have not been conducted within six (6)
               months following Acceptance, the respective Schedule B Test
               Certificate(s) shall be deemed to have been issued as of the
               fifth Day following expiry of such period.

SECTION 19.4.  At least thirty (30) Days prior to the anticipated commencement
               of the Schedule B Tests, the Parties shall select and jointly
               engage an independent laboratory to conduct split sample testing
               for purposes of the Schedule B Tests in accordance with the test
               procedures. The costs of the independent laboratory shall be
               shared equally by the Parties.

<Page>

Contract                                                             Page 79(81)

SECTION 19.5.  The Contractor shall submit to the Owner within thirty (30) Days
               after completion of a Schedule B Test, six (6) copies of the
               results of the Schedule B Test and, if applicable, the results
               from the independent laboratory (together with a written
               certification by the Contractor that the test results and, if
               applicable, the results from the independent laboratory, are true
               and correct), and make available to the Independent Engineer at
               the Site a copy of such test results and other items, for
               approval that the tested System fulfills the Performance
               Requirements set forth in Appendix 3, Ex. 12.4. The Contractor
               will give the Owner and the Independent Engineer at least two (2)
               Business Days' advance notice of the date on which it anticipates
               submitting such test results for review.

SECTION 19.6.  If the results of the Schedule B Test demonstrate compliance of
               the applicable System with the Performance Requirements set forth
               in Appendix 3, Ex. 12.4, the Owner shall, within five (5)
               Business Days after receipt by the Owner of such results, issue
               three original signed copies of the Schedule B Test Certificate
               for such System in the form set out in Annex B to Appendix 2, Ex.
               4, two of such copies to be provided to the Contractor, dated to
               reflect the actual date of passing of the Test.

SECTION 19.7.  If the results of the Schedule B Test indicate that the
               applicable System does not fulfill the Performance Requirements
               set forth in Appendix 3 Ex. 12.4 or the test was not performed in
               accordance with the procedures established pursuant to
               Section 19.2, the Owner shall so notify the Contractor within
               five (5) Business Days after receipt by the Owner of such results
               and, unless the Contractor establishes that such failure is due
               to failure by the Owner to perform the Owner's Scope (which has
               not been caused or contributed to by the Contractor), either:

               (a)    the Contractor shall promptly take such corrective action
                      as is necessary and the Schedule B Test shall be
                      re-performed in accordance with the terms of this
                      Article 19; or

<Page>

Contract                                                             Page 80(82)

               (b)    (i) the Contractor may, at its option, provided that the
                      Minimum Performance Requirements are met, or (ii) after
                      the Contractor has made three attempts as permitted by
                      Section 19.3, the Contractor shall, pay the applicable
                      performance liquidated damages as set forth in
                      Section 21.2.

               As long as the Minimum Performance Requirements are met, payment
               of such liquidated damages pursuant to clause (b) shall satisfy
               the Contractor's performance obligations with respect to such
               Schedule B Test (but the Contractor shall remain obligated to
               remedy any Defects in accordance with Article 20).

SECTION 19.8.  If the results of a Schedule B Test indicate that a System does
               not meet the Minimum Performance Requirements set forth in
               Appendix 3, Ex. 12.4, then the Contractor shall not have the
               option to cure the shortfalls by the payment of liquidated
               damages and shall have an obligation to correct the deficiencies
               in the Works without delay (and in any event within six (6)
               months after the results of the first test have been given to the
               Owner) so that the Minimum Performance Requirements are achieved
               in a repeat Schedule B Test. If the Minimum Performance
               Requirements are not achieved within six months after Acceptance
               or after the Contractor has made three attempts as permitted by
               Section 19.3, whichever occurs first, then, unless it establishes
               that such failure is due to failure by the Owner to perform the
               Owner's Scope in accordance with the Contract (which has not been
               caused or contributed to by the Contractor), the Contractor shall
               pay the applicable liquidated damages for deficient performance
               in accordance with Section 21.2 and, notwithstanding such
               payment, shall remain obligated to take any and all such
               corrective actions at its own cost and expense (without regard to
               any limitations that might otherwise be applicable under Section
               635 (3) BGB) as are necessary to correct the deficiencies in the
               Works so as to achieve the Minimum Performance Requirements.

<Page>

Contract                                                             Page 81(83)

SECTION 19.9.  If the Owner neither issues the Schedule B Test Certificate nor
               notifies the Contractor that the relevant System does not satisfy
               the applicable Performance Requirements set forth in Appendix 3,
               Ex. 12.4 prior to the end of the fifth Business Day following
               receipt by the Owner of the results of a Schedule B Test or of
               the results of the re-performance of such test, then the Schedule
               B Test Certificate will be deemed to have been issued as of the
               fifth Business Day after completion of the Schedule B Test, dated
               to reflect the actual date of passing the Schedule B Test.

SECTION 19.10. The Owner shall not withhold the issuance of a Schedule B Test
               Certificate for a System in case of Punch List items relating to
               the System, but all such Punch List items shall be remedied by
               the Contractor as soon as possible and in any event within (a)
               six months from Acceptance for those Punch List items identified
               at or prior to Acceptance and (b) three months after the issuance
               of the relevant Schedule B Test Certificate for those identified
               in connection with the Schedule B Tests.

ART. 20        DEFECTS LIABILITY

SECTION 20.1.  THE CONTRACTOR WARRANTS UNTIL THE EXPIRY OF THE DEFECTS LIABILITY
               PERIOD THAT:

               (i)    the Works are free from all Defects, whether arising from
                      defective design, engineering, equipment, Materials or
                      workmanship and are suitable for their intended purpose as
                      set forth in the Contract;

               (ii)   the Works conform to the Specifications, the standards set
                      forth in Section 3.3(a) and 3.3(b) and the Design
                      Documentation as approved by the Owner (or any approved
                      revisions thereof) and recognized rules of sound
                      engineering practice (as in effect up to and including the
                      Acceptance Date) and comply with all other requirements of
                      the Contract;

<Page>

Contract                                                             Page 82(84)

               (iii)  the Works comply with the requirements and provisions of
                      all Permits as in effect up to and including the
                      Acceptance Date (including Permit requirements resulting
                      from the Environmental Impact Assessment Report and the
                      updated emissions Permit for which an application has been
                      filed) relating to the construction and operation of the
                      Works;

               (iv)   the Works comply in all material respects with all Laws in
                      effect up to and including the Acceptance Date;

               (v)    the Works meet the Performance Requirements; and

               (vi)   good title to all Works, equipment and Materials and all
                      Intellectual Property Rights relating thereto are vested
                      in the Owner.

               The Contractor's Warranties set out above do not apply to, and
               the Contractor shall not be responsible for the repair,
               replacement or making good of, any Defects or any damage to the
               Plant which is attributable to normal wear and tear, operation or
               maintenance of the Plant by the Owner after Acceptance in
               violation of the instructions in the operation and maintenance
               manuals or use of consumables not within the design range set out
               in the Specifications.

               The Contractor's obligations under this Article 20 shall not
               apply to any Materials or equipment which are supplied by the
               Owner, or which has a normal design life shorter than the Defects
               Liability Period and fails after its normal design life.

SECTION 20.2.  The Defects Liability Period shall be eighteen (18) months from
               Acceptance (or, in the case of specified portions of the Works,
               such longer periods as are set forth in Appendix 3, Ex. 24),
               subject to any extension pursuant to Section 20.7. The provisions
               of Sections 377 and 378 of the German Commercial Code (HGB)
               (requirement to make a complaint in respect of a defect
               immediately on receipt of the Goods) shall not apply.

<Page>

Contract                                                             Page 83(85)

SECTION 20.3.  The Contractor shall, at its own cost, be responsible for making
               good by correction, repair, or replacement (including
               substitution of materials in the event of excessive corrosion or
               erosion) and, where necessary (including in the case of recurring
               Defects), by procuring redesign and reengineering with all
               possible speed and in accordance with the Contract any Defect
               which may appear or occur in any part of the Works (including any
               Defects that appear or occur on or before Acceptance) and which
               arises from either:

               (i)    any breach of the warranties set out in Section 20.1;

               (ii)   any act or omission or breach of Contract of or by the
                      Contractor or any Contractor's Supplier (including as a
                      result of the operation of the Works prior to Acceptance)
                      or damage caused by carrying out of the Works on the Site;
                      or

               (iii)  operation of the Plant in accordance with defective
                      instructions in any operation and maintenance manual
                      (which contains material errors or omissions) that should
                      not reasonably have been apparent to the Owner's operating
                      personnel and such defective instruction or omission is
                      the cause of such Defect where those manuals are
                      subsequently revised in accordance with this clause,

               and also any Defect or damage to the Works caused by or during
               such correction, repair or replacement or by any Defect.

               Section 635 (3) BGB is not applicable to this Contract.

               If the nature or scope of the repair, replacement or redesign is
               such that it might reasonably affect the performance of any
               System, the Owner may require that the Contractor, after having
               completed an appropriate test and checklist of the mechanical
               completion and appropriate start up of the relevant System,
               reperform the relevant Schedule B Tests. The request shall be
               made by notice within thirty (30) Days after completion of the
               making good. The relevant tests shall be repeated under the same
               procedures

<Page>

Contract                                                             Page 84(86)

               (including with regard to costs of the Parties) as those followed
               under the Contract in relation to the relevant original test.

               If the results of the re-performed Schedule B Tests indicate that
               the System(s) do not fulfill the relevant Performance
               Requirements, then the Contractor shall either make such
               additional repairs, replacements and redesign until the
               Performance Requirements are fulfilled, or, at its sole option as
               long as the Minimum Performance Requirements are fulfilled, pay
               the applicable liquidated damages as set forth in Section 21.2
               and payment of such liquidated damages shall satisfy the
               Contractor's obligation in respect of such Performance
               Requirements. Notwithstanding anything to the contrary contained
               herein, other than as expressly set forth in this Section 20.3,
               the Contractor shall have no continuing obligation (including
               under Section 20.1(v)) with respect to the Performance
               Requirements for a System, and shall be deemed to have met the
               relevant Performance Requirements after the Owner has issued a
               Schedule B certificate for such System pursuant to Section 19.6.

SECTION 20.4.  If the Owner becomes aware of a Defect, the Owner shall give the
               Contractor a written notice stating the nature of any such Defect
               referred to in Section 20.3, together with all available
               information related thereto, promptly following the discovery
               thereof. If the Contractor becomes aware of a Defect, it shall
               immediately notify the Owner of the nature and effect of such
               Defect. The Owner shall afford a reasonable opportunity for the
               Contractor to inspect any Defect without undue delay. Promptly
               after this, the Parties shall agree upon the date and duration of
               the repair, which shall be effected without undue delay
               ("UNVERZUGLICH") (taking into account physical access and
               operation of the Plant, but not considerations of cost,
               additional manpower and the like).

SECTION 20.5.  The Contractor shall be afforded all access to the Plant and the
               Site reasonably necessary to enable the Contractor to perform its
               obligations under this Article 20; however, the Contractor shall
               use its best efforts in

<Page>

Contract                                                             Page 85(87)

               connection with the performance of such obligations not to
               interfere with the operations of the Plant.

               The Contractor may, with the consent of the Owner, which consent
               shall not be unreasonably withheld, remove from the Site any part
               of the Works if any Defect is such that permanent repairs cannot
               be expeditiously carried out on the Site.

SECTION 20.6.  If the Contractor fails to commence the work necessary to remedy
               a Defect or any damage to the Plant caused by such Defect, or to
               complete the work, by the date agreed upon in accordance with
               Section 20.4, then, unless the reasons for such delay are
               attributable to the failure by the Owner to permit the Contractor
               to perform as agreed, the Owner may, following expiration of
               fourteen (14) Days' prior written notice to the Contractor,
               proceed to do such work and the reasonable costs incurred by the
               Owner in connection therewith shall be reimbursed by the
               Contractor.

SECTION 20.7.  The warranty and the Defects Liability Period with respect to any
               part of the Works that are repaired, replaced, modified, or
               otherwise altered during the Defects Liability Period shall
               extend for a period of eighteen (18) months from the date of
               completion of such repair, replacement, modification or
               alteration (or such longer period as is set forth in Appendix 3,
               Ex. 24).

               If the Works or any part thereof cannot be used by reason of a
               Defect and/or making good such Defect (the "stand-still" period),
               such stand-still period shall be added to the Defects Liability
               Period of the Works or such part, as the case may be.

               The above notwithstanding, no Defects Liability Period shall
               (except as otherwise set forth in Appendix 3, Ex. 24) extend more
               than a total of 36 (thirty-six) months after Acceptance or more
               than sixty-four (64) months after the Commencement Date plus a
               period equal to the aggregate of all extensions in the Time
               Schedule pursuant to Section 8.9 (other than clause

<Page>

Contract                                                             Page 86(88)

               (iii) of Section 8.9) or Article 12, whichever occurs first,
               provided that (except as provided in Section 20.9), if a Defect
               is discovered by the Contractor or, if discovered by the Owner,
               as long as notice of a Defect is given to the Contractor, in each
               case within the Defects Liability Period, the Contractor shall
               remain liable to complete the making good of such Defect even if
               the time to do so extends beyond the Defects Liability Period.

SECTION 20.8.  The remedies provided for in this Article 20 shall be in lieu of
               any other remedies provided in law with respect to defects
               (MANGEL), except where such defects are the result of fraud,
               criminal or willful act or gross negligence of the Contractor
               (and even in such cases the remedy of rescission shall be
               excluded).

SECTION 20.9.  Upon expiry of the Defects Liability Period as set forth in this
               Article 20, or as soon thereafter as the Contractor has completed
               or deemed to have completed all the Works, including remedying
               any defects, and provided that all Schedule B Tests have been
               completed (or waived by the Owner) and the respective Performance
               Requirements have been achieved or (as long as the Minimum
               Performance Requirements are fulfilled) the applicable liquidated
               damages have been paid by the Contractor, the Owner shall issue
               the Expiry of Defects Liability Period Certificate in the form
               set out in Annex C to Appendix 2, Ex. 4. In the event that at
               such time certain warranty obligations remain outstanding
               (including rights of the Contractor against Contractor's
               Suppliers), the Expiry of Defects Liability Period Certificate
               shall be in the form set out in Annex D to Appendix 2, Ex. 4 and
               shall include a reservation of rights of the Owner with respect
               to any Defects covered by such warranties and shall be issued
               against (i) provision by the Contractor of a bank guarantee in
               the form set forth in Appendix 2, Ex. 5 for any Defects that have
               not been remedied or, upon agreement with the Owner with respect
               to claims against any Contractor's Supplier regarding such
               Defects or (ii) in the case of warranties by Contractor's
               Suppliers extending beyond the Defects Liability Period as set
               forth in Appendix 3, Ex. 24, assignment by the Contractor of the

<Page>

Contract                                                             Page 87(89)

               respective warranty claims against such Contractor's Suppliers in
               accordance with Section 25.8. If the Contractor has, despite the
               exercise of its best efforts, been unable to remedy a Defect
               within the Defects Liability Period, the Contractor may apply to
               the Owner for the Expiry of Defects Liability Certificate if (i)
               the Contractor would, apart from the Defect, be entitled to apply
               for the Expiry of Defects Liability Certificate and (ii) the
               Owner and the Contractor have agreed upon a sum to be paid by the
               Contractor to the Owner as compensation for the Defect and the
               Contractor has paid said compensation.

ART. 21        LIQUIDATED DAMAGES

               LIQUIDATED DAMAGES FOR DELAY

SECTION 21.1.  In the event that Acceptance is not achieved by the Scheduled
               Acceptance Date (as the same may be extended or agreed upon in
               accordance with Section 8.9 or Article 12 of the Contract), the
               Contractor shall be liable to pay liquidated damages for each
               Week of delay in an amount equal to 0.4% (zero point four
               percent) of the Contract Price. In the case of a delay that is
               less than a full Week, the amount of liquidated damages payable
               shall be pro rated for each day of delay (with any part of a day
               being deemed a full day for purposes of such proration).

               The maximum amount of liquidated damages for delay shall be
               limited to twelve percent (12%) of the Contract Price.

               Except as otherwise provided in Section 8.11, 23.1 and 24.1, the
               liquidated damages payable pursuant to this Section 21.1 for
               delay in achieving Acceptance shall be the exclusive remedy for
               such delay (and, in particular, remedies pursuant to Section 286
               ET SEQ. BGB ("VERZUG") shall not be available). Any further
               rights or remedies of the Owner to claim any damages or loss for
               delay in connection with this Contract are expressly excluded.

<Page>

Contract                                                             Page 88(90)

               LIQUIDATED DAMAGES FOR DEFICIENT PERFORMANCE

SECTION 21.2.  In the event that (i) the Minimum Performance Requirements are
               not fulfilled during the 72-Hour Test prior to such time as the
               Contractor has incurred liquidated damages for delay equal to the
               maximum amount permitted under Section 21.1 or, if applicable,
               such later time as is provided in clause (ii) of Section 18.9, or
               (ii) the Performance Requirements are not achieved during the
               Schedule B Tests (or not deemed to be achieved pursuant to the
               last sentence of Section 19.3) within six months after Acceptance
               or after the Contractor has made three attempts as permitted by
               Section 19.3, whichever occurs first, in each case other than for
               reasons which the Contractor can establish are attributable to
               failure by the Owner to perform the Owner's Scope in accordance
               with the Contract (which has not been caused or contributed to by
               the Contractor), the Contractor shall be liable to pay the
               following liquidated damages:

               (a)    with respect to the 72-Hour Test, five percent (5%) of the
                      Contract Price, and

               (b)    with respect to each Schedule B Test, subject to the
                      maximums set forth below and in Section 21.3, an amount
                      equal to twice the applicable amount(s) set forth in
                      Appendix 3, Ex. 12.4.

               The maximum amount of liquidated damages for deficient
               performance shall be limited to ten percent (10%) of the Contract
               Price.

               OVERALL LIQUIDATED DAMAGES

SECTION 21.3.  The aggregate maximum of liquidated damages under Sections 21.1
               and 21.2 hereof shall be limited to seventeen percent (17%) of
               the Contract Price.

               The Parties agree that the liquidated damages constitute a
               genuine and reasonable estimate of the actual damages that would
               be suffered by the Owner in the event of the Contractor's delay
               or non-achievement of

<Page>

Contract                                                             Page 89(91)

               Performance Requirements and such liquidated damages shall not be
               considered as penalties and, subject to the following paragraph
               and except as provided in Sections 8.11, 18.9, 19.8, 23.1 and
               24.1 and Article 20, shall be in lieu of all other rights and
               remedies for delay in achieving Acceptance and non-achievement of
               the Performance Requirements. The Parties agree that it is not a
               precondition for the assertion of a claim to payment of
               liquidated damages that the Owner must have reserved such right
               at the time of Acceptance or established fault ("VERSCHULDEN") on
               the part of the Contractor.

               The Parties further agree that the payment of liquidated damages
               shall not relieve the Contractor from any of its obligations to
               complete the Works, attain the Minimum Performance Requirements,
               or cure Defects and that any other amounts payable pursuant to
               the Contract and any costs incurred by the Contractor to attain
               the Minimum Performance Requirements or cure Defects shall not be
               credited against or otherwise reduce the amounts of liquidated
               damages otherwise payable pursuant to this Article 21.

SECTION 21.4.  Liquidated damages for delay will be invoiced on a weekly basis.
               Liquidated damages for deficient performance will be invoiced
               twenty (20) Days after failure of the last permitted test
               relating to the respective System.

ART. 22        INTELLECTUAL PROPERTY RIGHTS

SECTION 22.1.  In the event that licenses, patents or other intellectual
               property or proprietary rights held by the Contractor, or any
               Contractor's Supplier, or any of their respective affiliates are
               required by the Owner in the operation, maintenance, or repair of
               the Plant in the manner intended and at the design capacity and
               the production of the design output, the Contractor shall deliver
               or cause to be delivered to the Owner such licenses on or before
               the time such licenses, if any, are required. Such licenses shall
               be in such form as shall be reasonably acceptable to the Owner,
               shall be irrevocable, non-exclusive, and royalty free to the
               Owner, and shall be assignable to the Owner and to the other
               parties contemplated in the Direct Agreement.

<Page>

Contract                                                             Page 90(92)

SECTION 22.2.  The Contractor warrants that the Owner (and any successor in
               interest) can use the Works and any parts thereof in Germany for
               its intended purpose (including any modification or expansion of
               the Works, but subject in the case of expansion to payment by the
               Owner of any additional license fees payable in respect of such
               additional capacity) in accordance with the Contract without
               infringing another party's (whether in Germany or in any other
               country) rights and interests in any utility model, unregistered
               or registered design, trademark, copyright or other intellectual
               property right registered or otherwise ("Intellectual Property
               Rights"), and can sell products produced by the Works or by means
               of it within and outside Germany.

SECTION 22.3.  The Contractor shall indemnify and hold harmless the Owner and
               its employees and officers from and against any and all suits,
               actions or administrative proceedings, claims, demands, losses,
               damages, costs, and expenses of whatsoever nature, including
               attorney's fees and expenses, which the Owner may suffer as a
               result of any infringement or alleged infringement of any
               Intellectual Property Rights.

               Such indemnity shall not cover the Owner's Scope or any use of
               the Works or any part thereof other than for the purpose
               indicated by, or reasonably to be inferred from, the Contract.

SECTION 22.4.  If any proceedings are brought or any claim is made against the
               Owner arising out of the matters referred to in Section 22.2, the
               Owner shall promptly give the Contractor a notice thereof, and
               the Contractor shall at its own expense and in the Owner's name
               conduct such proceedings or claim and any negotiations for the
               settlement of any such proceedings or claim.

               If the Contractor fails to notify the Owner within ten (10) Days
               of receipt of such notice that it intends to conduct any such
               proceedings or claim, then the Owner shall be free to conduct the
               same on its own behalf. Unless the Contractor has so failed to
               notify the Owner within the ten (10) Day period,

<Page>

Contract                                                             Page 91(93)

               the Owner shall make no admission which may be prejudicial to the
               defense of any such proceedings or claim.

               The Owner shall, at the Contractor's request, assist the
               Contractor in conducting such proceedings or claim, and shall be
               reimbursed by the Contractor for all expenses incurred in so
               doing. Should any claim in relation to an infringement of any
               Intellectual Property Rights not be discharged, or should the
               Contractor be found to have infringed such Intellectual Property
               Rights the Contractor shall at its own expense (including all
               reasonable direct costs and expenses suffered by the Owner) and
               option either (a) procure the right to use any such Intellectual
               Property Rights and all associated equipment and Materials and
               transfer such rights to the Owner or (b) replace or redesign the
               infringing equipment and Material and provide the Owner with a
               confirmation that all Intellectual Property Rights have been
               correctly obtained. The failure by the Owner to comply with the
               provisions of this Section 22.4 shall not relieve the Contractor
               of its obligations under Section 22.3 except to the extent that
               the Contractor has been prejudiced thereby.

SECTION 22.5.  The Owner shall indemnify and hold harmless the Contractor and
               its employees, officers and the Contractor's Suppliers from and
               against any and all suits, actions or administrative proceedings,
               claims, demands, losses, damages, costs, and expenses of
               whatsoever nature, including attorney's fees and expenses, which
               the Contractor may suffer as a result of any infringement or
               alleged infringement of any Intellectual Property Rights in
               connection with the Owner's Scope. The Contractor shall, at the
               Owner's request, assist the Owner in conducting any proceedings
               or claim, and shall be reimbursed by the Owner for all expenses
               incurred in doing so.

ART. 23        SUSPENSION

SECTION 23.1.  The Owner may, by written notice to the Contractor, order the
               Contractor to suspend performance of any or all of its
               obligations under the Contract. Such notice shall specify the
               obligations as to which performance is to be

<Page>

Contract                                                             Page 92(94)

               suspended, the commencement date of the suspension and the
               reasons therefor. The Contractor shall thereupon suspend
               performance of such obligation (except those obligations
               necessary for the care or preservation of the Works) until
               ordered in writing to resume such performance by the Owner.

               If, by virtue of a suspension order given by the Owner, other
               than by reason of the Contractor's default or breach of the
               Contract, the Contractor's performance of any of its obligations
               is suspended for an aggregate period of more than one hundred
               fifty (150) Days, then at any time thereafter and provided that
               at that time such performance is still suspended, the Contractor
               may give a notice to the Owner requiring that the Owner shall,
               within thirty (30) Days of receipt of the notice, order the
               resumption of such performance or request and subsequently order
               a Change in accordance with Article 12 excluding the performance
               of the suspended obligation from the Contract. If the Owner fails
               to do so within such period, the Contractor may, by a further
               notice to the Owner, elect to treat the suspension as termination
               of the Contract under Article 24.

SECTION 23.2.  If (i) the Owner has failed to pay any approved invoice under the
               Contract within the fourteen (14) Days after the expiry of the
               thirty (30) Day period provided in Section 9.3, (ii) the Owner
               has failed to approve any invoice or supporting document without
               just cause pursuant to Section 9.2 within thirty (30) Days after
               notice to the Owner that the Contractor considers the Owner's
               failure to be without just cause or (iii) an event of default has
               occurred under one or more loan agreements to which the Owner is
               a party and the Owner's creditors thereunder have accelerated the
               debt under such loan agreements, and within sixty (60) Days after
               such acceleration suitable payment assurances reasonably
               satisfactory to the Contractor have not been provided to the
               Contractor, then the Contractor may, in each case by sixteen (16)
               Days' notice to the Owner, suspend performance of all or any of
               its obligations under the Contract, or reduce the rate of
               progress until the Owner has remedied its failure. In the case of
               a claim by the Contractor that the

<Page>

Contract                                                             Page 93(95)

               Owner has failed to approve an invoice or supporting documents
               without just cause, the Owner shall be entitled to prevent such
               suspension of performance by providing to the Contractor security
               for the payment of the amounts in dispute in the form of a
               deposit or a standby bank guarantee (which bank guarantee shall
               not be first demand but shall otherwise be generally consistent
               with the tenor of the bank guarantees to be provided under
               Section 10.1).

SECTION 23.3.  If the Contractor's performance of its obligations is suspended
               or the rate of progress is reduced pursuant to this Section 23
               (other than by reason of a Contractor default or breach of the
               Contract), then the Time Schedule shall be extended accordingly
               pursuant to Section 8.9, and any and all additional costs or
               expenses incurred by the Contractor as a result of such
               suspension or reduction shall be paid by the Owner to the
               Contractor in addition to the Contract Price pursuant to Section
               9.8, except in the case of suspension or reduction in the rate of
               progress by reason of the Contractor's default or breach of the
               Contract.

SECTION 23.4.  During the period of suspension, the Contractor shall not be
               entitled to payment of the Contract Price otherwise payable
               during the period of such suspension (other than previously
               approved invoices that are payable during such period). Upon
               resumption by the Contractor of all activities affected by a
               suspension, the Owner shall resume payments of the Contract Price
               with adjusted payment dates. During any suspension, the
               Contractor shall not remove from the Site any Materials or
               equipment, any part of the Works or any Contractor's Equipment
               without the prior written consent of the Owner and shall, unless
               otherwise instructed by Owner, cover up and continue to preserve
               the Works.

ART. 24        TERMINATION

SECTION 24.1.  TERMINATION BY OWNER FOR CONTRACTOR'S DEFAULT

<Page>

Contract                                                             Page 94(96)

24.1.1.        The Owner, without prejudice to any other rights or remedies it
               may possess under this Contract, may terminate the Contract
               forthwith in the following circumstances by giving a notice of
               termination to the Contractor referring to the relevant provision
               of this Section 24.1.1 and stating the nature of the default:

               (a)    if the Contractor becomes bankrupt or insolvent, has a
                      receiving order issued against it, compounds with its
                      creditors, or, being a corporation, a resolution is passed
                      or order is made for its winding up (other than a
                      voluntary liquidation for the purposes of amalgamation or
                      reconstruction), a receiver is appointed over any part of
                      its undertaking or assets, or if the Contractor takes or
                      suffers any other analogous action in consequence of debt;
                      or

               (b)    if the Contractor assigns or transfers the Contract in
                      violation of the provisions of the Contract.

24.1.2.        If:

               (a)    the Contractor has abandoned or repudiated the Contract;
                      or

               (b)    the Contractor has without valid reason failed to commence
                      the Works promptly or has suspended or materially reduced
                      (other than pursuant to Section 23.2 hereof) the progress
                      of the Works for more than twenty-eight (28) Days after
                      receiving a written instruction from the Owner to proceed;
                      or

               (c)    the Contractor fails to perform or observe any of its
                      material obligations under the Contract and such failure
                      continues for more than thirty (30) Days after notice of
                      same;

               (d)    the workaround plan prepared pursuant to Section 8.11
                      indicates that Acceptance will occur more than four (4)
                      Months after the Scheduled Acceptance Date; or

<Page>

Contract                                                             Page 95(97)

               (e)    the Contractor fails to achieve Acceptance (including
                      achievement of the Minimum Performance Requirements and,
                      if applicable, taking corrective action or payment of
                      applicable liquidated damages for failure to fulfill the
                      Performance Requirements in accordance with Section 21.2)
                      prior to such time as the Contractor has incurred
                      liquidated damages for delay equal to the maximum amount
                      permitted under Section 21.1; or

               (f)    the Independent Engineer's reasonable projections show
                      that the Contractor will fail to achieve Acceptance by the
                      time when the maximum liquidated damages for delay will be
                      applicable.

               then the Owner may, without prejudice to any other rights it may
               possess under the Contract, give a notice to the Contractor
               stating the nature of the default and requiring the Contractor to
               remedy the same. If the Contractor fails to remedy or, in the
               case of clauses (b) and (c) take all necessary and appropriate
               steps to remedy the same within fourteen (14) Days of its receipt
               of such notice, then the Owner may terminate the Contract
               forthwith by giving a notice of termination to the Contractor
               which refers to this Section 24.1.2.

24.1.3.        Upon receipt of the notice of termination under Section 24.1.1 or
               Section 24.1.2 above, the Contractor shall either immediately or
               upon such date as is specified in the notice of termination:

               (a)    cease all further work, except for such work as the Owner
                      may specify in the notice of termination for the sole
                      purpose of protecting that part of the Works already
                      executed, or any work required to leave the Site in a
                      clean and safe condition; and

               (b)    terminate all subcontracts, except those to be assigned to
                      the Owner pursuant to paragraph (d) below; and

               (c)    upon the Owner's request deliver to the Owner the parts of
                      the Works executed by the Contractor up to the date of
                      termination; and

<Page>

Contract                                                             Page 96(98)

               (d)    as may be required by the Owner, to the extent legally
                      possible, assign to the Owner all right, title and benefit
                      of the Contractor to the Works, in any subcontracts
                      concluded between the Contractor and the Contractors
                      Suppliers and any warranties relating thereto, and provide
                      a power of attorney in form satisfactory to the Owner to
                      enforce such rights; and

               (e)    deliver to the Owner all non-proprietary detail and
                      conceptual drawings, specifications and other documents
                      prepared in connection with the Works by, and assign all
                      Intellectual Property Rights arising in connection with
                      the Works from, the Contractor or any Contractor's
                      Supplier as at the date of termination.

24.1.4.        In the case of termination pursuant to Section 24.1.1 or 24.1.2,
               the Owner may enter upon the Site, expel the Contractor, and
               complete the Works itself or by employing any third party. The
               Owner may, to the exclusion of any right of the Contractor over
               the same, take over and use with the payment of a fair rental
               rate (which shall take account of wear and tear) to the
               Contractor, with all maintenance costs to the account of the
               Owner and with an indemnification by the Owner for all liability
               including damage or injury to persons arising out of the Owner's
               use of such equipment, any Contractor's Equipment on the Site in
               connection with the Works for such reasonable period as the Owner
               considers expedient for the completion of the Works.

               Upon Acceptance of the Works or at such earlier date as the Owner
               thinks appropriate, the Owner shall give a notice to the
               Contractor that such Contractor's Equipment will be returned to
               the Contractor at or near the Site and shall return such
               Contractors Equipment to the Contractor in accordance with such
               notice. The Contractor shall thereafter without delay and at its
               cost remove or arrange removal of the same from the Site.

24.1.5.        Subject to Section 24.1.6 below, the Contractor shall be entitled
               to be paid (after the calculations required by Section 24.1.6 are
               completed) the Contract

<Page>

Contract                                                             Page 97(99)

               Price attributable to the Works executed as at the date of
               termination, the value of any unused or partially used Works on
               the Site, and the costs, if any, incurred in protecting the Works
               and in leaving the Site in a clean and safe condition pursuant to
               paragraph (a) of Section 24.1.3 above. Any sums due to the Owner
               from the Contractor accruing prior to the date of termination
               shall be deducted from the amount to be paid to the Contractor
               under this Contract and/or may be drawn from the payment or
               performance security.

24.1.6.        If the Owner completes the Works, the costs of completing the
               Works shall be determined by reference to the costs and expenses
               that were reasonably incurred by the Owner as a consequence of
               the Contractor's failure to perform its obligations in accordance
               with the Contract.

               If the sum which the Contractor is entitled to be paid pursuant
               to Section 24.1.5 above, plus the costs incurred by the Owner in
               completing the Works, exceeds the Contract Price, such excess
               (together with any applicable liquidated damages) shall be offset
               against any amount payable to the Contractor pursuant to Section
               24.1.5 and the Contractor shall pay any balance to the Owner
               together with any applicable liquidated damages. For such
               purpose, the Owner may call upon any payment or performance
               security issued in respect of the Contractor's obligations.

SECTION 24.2.  TERMINATION BY CONTRACTOR FOR OWNER'S DEFAULT

24.2.1.        The Contractor may terminate the Contract, upon ten (10) Days'
               prior notice to the Owner, in the following circumstances by
               giving a notice of termination and its reasons therefor to the
               Owner referring to the relevant provision of this Section 24.2.1
               and stating the nature of the default.

               (a)    if the Owner becomes bankrupt or insolvent, has a
                      receiving order issued against it, compounds with its
                      creditors, or, being a corporation, if a resolution is
                      passed or order is made for its winding up (other than a
                      voluntary liquidation for the purposes of amalgamation or

<Page>

Contract                                                            Page 98(100)

                      reconstruction), or a receiver is appointed over any part
                      of its undertaking or assets, or if the Owner takes or
                      suffers any analogous action in consequence of debt; or

               (b)    if the Owner assigns or transfers the Contract in
                      violation of the provisions of the Contract.

24.2.2.        If:

               (a)    the Owner fails to perform or observe any of its other
                      material obligations under the Contract and such failure
                      continues for more than one hundred twenty (120) Days
                      after notice of the same, or

               (b)    the Contractor has rightfully suspended performance under
                      the Contract pursuant to Section 23.2,

               then the Contractor may give a notice to the Owner of its intent
               to terminate the Contract, and if the Owner has failed to remedy
               the occurrence within thirty (30) Days of such notice, or if the
               Contractor is still unable to carry out such obligations under
               the Contract for reasons attributable to the Owner within thirty
               (30) Days of such notice, the Contractor may by a further notice
               to the Owner referring to this Section 24.2.2, forthwith
               terminate the Contract.

24.2.3.        If the Contract is terminated under Section 24.2.1 or 24.2.2
               above, then the Contractor shall have the obligation to take
               actions in order to minimize the costs and immediately:

               (a)    cease all further work, except for such work as the Owner
                      may specify in the notice of termination for the sole
                      purpose of protecting that part of the Works already
                      executed, or any work required to leave the Site in a
                      clean and safe condition; and

               (b)    terminate all subcontracts; and

<Page>

Contract                                                            Page 99(101)

               (c)    upon the Owner's request, deliver to the Owner the parts
                      of the Works executed by the Contractor up to the date of
                      termination; and

               (d)    subject to payment of any amounts due under Section
                      24.2.4, deliver to the Owner all non-proprietary detail
                      and conceptual drawings, specifications and other
                      documents prepared in connection with the Works by, and
                      assign all Intellectual Property Rights arising in
                      connection with the Works from, the Contractor or any
                      Contractor's Supplier as at the date of termination; and

               (e)    remove all Contractor's Equipment from the Site and
                      repatriate the Contractor's and Contractor's Suppliers'
                      personnel from the Site.

24.2.4.        If the Contract is terminated under Section 24.2.1 or Section
               24.2.2 above, the Owner shall pay to the Contractor as its
               exclusive remedy:

               (a)    the Contract Price properly attributable to the parts of
                      the Works executed by the Contractor as at the date of
                      termination; and

               (b)    the costs reasonably incurred by the Contractor in the
                      withdrawal of the Contractor's and Contractor's Suppliers'
                      personnel; and

               (c)    amounts due to be paid by the Contractor to Contractor's
                      Suppliers in connection with the termination of any
                      subcontracts, including cancellation charges; and

               (d)    costs incurred by the Contractor in protecting the Plant
                      and leaving the Site in a clean and safe condition
                      pursuant to paragraph (a) of Section 24.2.3 above; and

               (e)    the costs of satisfying other due obligations, commitments
                      and claims that the Contractor has reasonably and in good
                      faith undertaken with third parties in accordance with the
                      Contract that are not covered by paragraphs (a) through
                      (d) above.

<Page>

Contract                                                           Page 100(102)

               TERMINATION IN EVENT OF FAILURE TO ACHIEVE COMMENCEMENT DATE

SECTION 24.3.  In the event the conditions to the Commencement Date are not
               satisfied (or waived) for any reason on or prior to September 9,
               2002, either the Owner or the Contractor may terminate this
               Contract upon notice to the other without any further cost or
               obligation.

               TERMINATION BY OWNER FOR CONVENIENCE

SECTION 24.4.  The Owner may terminate this Contract for its convenience at any
               time and without cause upon giving not less than sixty (60) Days'
               prior notice to the Contractor. If the Contract is terminated
               under this Section 24.4, the Owner shall be obligated to pay to
               the Contractor the amounts specified in clauses (a) through (e)
               of Section 24.2.4 plus an amount equal to fifty percent (50%) of
               the agreed margin on the portion of the Works not yet performed
               (determined by proration of the agreed margin specified in the
               EPC Price Calculation, based on the ratio of the amount of the
               Contract Price remaining unpaid (after taking into account the
               amount specified in Section 24.2.4(a)) to the total Contact
               Price).

               CALCULATIONS

SECTION 24.5.  In this Article 24, the expression "Works executed" shall include
               all work executed, services provided, all Works, Materials and
               equipment acquired (or subject to a legally binding obligation to
               purchase) by the Contractor where title has passed to the Owner,
               and used or intended to be used for the purpose of the Plant, up
               to and including the date of termination; provided that the Owner
               shall not be obligated to pay for any Materials or equipment
               pursuant to this Article 24 until such Materials and equipment
               are delivered to the Site.

SECTION 24.6.  In this Article 24, in calculating any monies due from the Owner
               to the Contractor, account shall be taken of any sum previously
               paid by the Owner

<Page>

Contract                                                           Page 101(103)

               to the Contractor under the Contract, including any advance
               payment paid pursuant to Article 9 of the Contract.

ART. 25        CONTRACTORS' SUPPLIERS

SECTION 25.1.  The Contractor is responsible for ensuring that all Contractor's
               Suppliers engaged by it are bound by conditions substantially
               similar to those which apply to the Contractor in this Contract.
               Notwithstanding any approval by the Owner of any Contractor's
               Supplier (including any Key Supplier), the Contractor shall be
               responsible for and warrant the work and services of all
               Contractor's Suppliers as if performed by the Contractor; and any
               such approval by the Owner shall not relieve the Contractor of
               any of its duties, responsibilities, obligations, Warranties or
               liabilities under this Contract.

SECTION 25.2.  The Contractor shall not subcontract the whole of the Works. The
               Contractor may use only suppliers pre-qualified in Appendix 3,
               Ex. 10. All Contractor's Suppliers shall hold any licenses
               required for them to perform the subcontracted work. With respect
               to the Key Suppliers, the Contractor shall use the suppliers and
               equipment designated by the Owner with the consent of the
               Contractor, which consent shall not be unreasonably withheld, and
               the Owner shall have the right to review and approve the
               specifications, including performance and availability guarantees
               and other technical portions of the contracts with such Key
               Suppliers. In the event that the Contractor wishes to use other
               Key Suppliers, the Owner's prior consent shall be required, which
               shall not be unreasonably withheld, and appropriate modifications
               shall be made to Appendix 3 to conform to the subcontracts with
               such Key Suppliers, provided that in no event shall the
               applicable technical specifications and performance requirements
               be reduced below those currently in Appendix 3. To the extent
               that any availability guarantees are contained in Appendix 3,
               Ex. 3.7, the Contractor shall ensure that the same availability
               guarantees are contained in its subcontracts with the relevant
               Key Suppliers.

<Page>

Contract                                                           Page 102(104)

SECTION 25.3.  No subcontract or purchase order shall bind or purport to bind
               the Owner but all subcontracts shall contain a provision
               permitting assignment thereof and all warranties contained
               therein to the Owner upon the Owner's written request as provided
               in the Contract, provided that any security for payments to the
               Contractor's Supplier under the assigned subcontract is not
               adversely affected by such assignment. The Contractor shall
               furnish the Owner with such information relative to the
               Contractor's Suppliers as the Owner may reasonably request. Upon
               termination of this Contract, the Contractor shall deliver to the
               Owner a copy of each subcontract with respect to which the Owner
               has a right of assignment from the Contractor, including the
               price payable thereunder so that the Owner can decide whether or
               not to exercise its right of assignment.

SECTION 25.4.  The Contractor shall include in all subcontracts a prohibition on
               assignment or subcontracting of the entire obligation by any
               Contractor's Supplier of its obligations under its respective
               subcontract.

SECTION 25.5.  The Contractor's contracts with each Contractor's Suppliers shall
               include an initial supply of Major Capital Spares. The Contractor
               will secure the undertaking from Key Suppliers to provide the
               ability to supply Major Capital Spares and any other spare parts
               that are not readily available from other vendors as a standard
               product for a period of at least ten (10) years from Acceptance.
               In the case of data processing equipment the same period of time
               as above shall apply, but instead of "spare parts", "spare parts
               or replacement unit or repair of such part or unit" shall apply.
               Should a Contractor's Supplier's business be discontinued, the
               Contractor shall provide design drawings and other necessary
               manufacturing documentation to the Owner and procure the right
               for the Owner to use such documentation for manufacturing the
               parts in question without hindrance of patents, registered
               designs or other industrial property rights, whereupon the
               Contractor shall be released from its obligations under the
               second sentence of this Section 25.5 in respect of such spare
               parts.

<Page>

Contract                                                           Page 103(105)

               Upon expiry of the Defects Liability Period, the Contractor shall
               validly assign to the Owner such Contractor's Supplier's
               warranties as remain in effect at that time.

SECTION 25.6.  PAYMENT OF CONTRACTOR'S SUPPLIERS; RELEASE OF LIENS;
               ERFULLUNGSGEHILFEN. Contractor's Suppliers shall be deemed
               persons employed by the Contractor in the performance of its
               obligations (ERFULLUNGSGEHILFEN) within the meaning of
               Section 278 BGB. The Contractor shall pay promptly for all its
               labor, equipment, subcontracts and other materials and supplies
               used in connection with the Works. If any liens are filed against
               the Plant or the Site in respect of the Works, the Contractor
               shall immediately either (i) pay the amount in question or (ii)
               cause the release of such liens by arranging for the issuance of
               bonds or other reasonably satisfactory security.

SECTION 25.7.  NO PAYMENTS BY SUPPLIERS. The Contractor shall not, directly or
               indirectly, receive or accept any payments from any suppliers
               (other than as provided in the relevant subcontract) in
               connection with or related to the Works except as may be approved
               in writing by the Owner. The Contractor shall not, without the
               prior written consent of the Owner, reduce the scope of work of
               any Key Supplier. The Contractor shall not offset against
               payments otherwise due to any Supplier, if such offset could
               jeopardize the performance of such Contractor's Supplier's
               obligations relating to this Contract.

SECTION 25.8.  ASSIGNMENT OF WARRANTY CLAIMS. (a) The Contractor hereby makes
               the Owner an irrevocable and indefinite offer to assign all
               warranty claims (including availability guarantees) against Key
               Suppliers. The Owner shall have the right to accept this offer as
               a whole or with regard to (i) individual Contractor's Suppliers
               or (ii) performance guarantees with respect to any Contractor's
               Supplier, by notice to the Contractor. To the extent that the
               Owner accepts the offer of assignment of warranty claims (but not
               in the case of the assignment of the availability guarantees as
               provided in paragraph (b)) with respect to a Contractor's
               Supplier, the Contractor's warranty obligation

<Page>

Contract                                                           Page 104(106)

               with respect to such Contractor's Supplier's scope of work shall
               be extinguished but the Contractor's warranty obligation with
               regard to all warranty claims which are not assigned shall remain
               unaffected.

               (b) Promptly after Acceptance, the Contractor shall assign to the
               Owner the availability guarantees by the relevant Key Suppliers
               under their subcontracts. The valid assignment of such rights by
               the Contractor will satisfy the Contractor's obligations in
               respect of the corresponding availability guarantees in
               Appendix 3, Ex. 3.7.

               (c) In case of assignment of any warranty or performance guaranty
               obligation (including availability guarantees), the Contractor
               shall support the Owner in enforcing the warranty and shall
               supply the Owner promptly upon request with all necessary
               documents and information.

ART. 26        FORCE MAJEURE

SECTION 26.1.  EVENTS OF FORCE MAJEURE. An "Event of Force Majeure" shall mean
               any circumstance not within the reasonable control, directly or
               indirectly, of the Party affected, but only if and to the extent
               that (i) such circumstance, despite the exercise of reasonable
               diligence, cannot be or be caused to be prevented, avoided or
               removed by such Party, (ii) such event or series of the same or
               different events materially adversely affects the ability of the
               Party affected to perform its obligations under this Contract,
               and such Party has taken all reasonable precautions, due care,
               and reasonable alternative measures in order to avoid the effect
               of such event on such Party's ability to perform its obligations
               under this Contract and to mitigate the consequences thereof,
               (iii) such event is not the result of the failure of such Party
               to perform any of its obligations under this Contract.

SECTION 26.2.  "Force Majeure" shall, subject to Section 26.1, include the
               following:

               (a)    war, hostilities or warlike operations (whether a state of
                      war be declared or not), invasion, act of foreign enemy;

<Page>

Contract                                                           Page 105(107)

               (b)    ionizing radiation, or contamination by radioactivity from
                      any nuclear fuel, or from any nuclear waste from the
                      combustion of nuclear fuel, radioactive toxic explosive or
                      other hazardous properties of any explosive nuclear
                      assembly or nuclear component thereof, but not including
                      goods and material such as measuring, monitoring and
                      testing devices, that use low levels of radiation, in each
                      case from a source outside of the Site;

               (c)    rebellion, revolution, insurrection, mutiny, usurpation of
                      civil or military government or civil war, or any, riot,
                      civil commotion or terrorist acts;

               (d)    confiscation, nationalization, mobilization, commandeering
                      or requisition by or under the order of any government or
                      de jure or de facto authority or ruler or any other act or
                      failure to act of any local state or national government
                      authority;

               (e)    strikes, lock outs or other industrial actions (in each
                      case that are national, regional or sector-wide),
                      sabotage, embargo, shipwreck, epidemics, quarantine;

               (f)    earthquake, landslide, volcanic activity, fire, flood or
                      inundation, tidal wave, typhoon or cyclone, hurricane,
                      storm, lightning, nuclear waves and pressure waves caused
                      by aircraft or other aerial devices travelling at sonic or
                      supersonic speeds, or other natural or physical disaster;

               (g)    shortage of labor, materials or shortage or restriction of
                      utilities where caused by circumstances that are
                      themselves Force Majeure.

SECTION 26.3.  The following shall in no event be considered an Event of Force
               Majeure:

               (i)    late performance by the Contractor caused by the acts or
                      omissions of subcontractors or Contractor's Suppliers
                      (other than acts or omissions caused by an Event of Force
                      Majeure), by the Contractor's failure to

<Page>

Contract                                                           Page 106(108)

                      hire an adequate number of personnel or labor or by
                      inefficiencies on the part of the Contractor;

               (ii)   delays resulting from reasonably foreseeable unfavorable
                      weather or sea conditions or other similarly reasonably
                      foreseeable adverse conditions;

               (iii)  delays resulting from ground or soil conditions at the
                      Site or from ground conditions at other sites where Work
                      is being performed or parts of the Works are stored or
                      maintained;

               (iv)   economic hardship of the Contractor or any of its
                      affiliates or its or their inability to pay debts;

               (v)    the late payment by the Owner or the Contractor of money
                      when otherwise due in accordance with the Contract;

               (vi)   infringements by the Contractor or any of the Contractor's
                      Suppliers or their affiliates of any Intellectual Property
                      Rights; and

               (vii)  delays resulting from late submission of documents and/or
                      drawings to either the Independent Engineer or the Owner
                      which does not afford the Independent Engineer and/or the
                      Owner with sufficient time to review, approve or make a
                      judgment on their content (unless such delays are caused
                      by circumstances that are themselves Force Majeure, in
                      which case such delays shall also be considered Force
                      Majeure).

               (viii) delays relating from strikes, lockouts or other industrial
                      action which relate to any dispute between the Contractor,
                      its affiliates or any Contractor's Supplier and their
                      respective directors, officers, employees or agents.

               In the event that the Works or any part thereof are damaged
               pursuant to an Event of Force Majeure which is covered by
               insurance, and provided the

<Page>

Contract                                                           Page 107(109)

               insurance policy provides coverage for such event in accordance
               with the insurance required under Article 14, the Contractor
               shall make good such loss and damage at its own expense insofar
               as such loss and damage exceeds the amount of insurance proceeds,
               unless the Banks elect not to make the insurance proceeds
               available to the Contractor for such purpose and the Contractor
               is released pursuant to Section 13.2.

SECTION 26.4.  If either Party is prevented or delayed from or in performing any
               of its obligations under the Contract by an Event of Force
               Majeure, then it shall promptly (and in any event within fourteen
               (14) Days) after the occurrence of such event notify the other
               Party in writing of the occurrence of such event, the
               circumstances thereof and the measures it is taking to avoid the
               effects or mitigate the consequences thereof. Within a reasonable
               time following the date of termination of such Force Majeure, the
               Party having invoked such Force Majeure as a cause for such delay
               shall submit to the other Party reasonable proof of the nature of
               such delay, its effect upon the time of performance and the
               actions being taken to comply with clause (ii) of Section 26.1.
               The Parties shall thereupon consult with one another concerning
               the effect of such delay upon the Detailed Program and Time
               Schedule and the Time Schedule shall be equitably adjusted by the
               Parties in accordance with Section 8.9 to take into account such
               effect and the ability of the Contractor to reschedule project
               activities to avoid or minimize overall delays resulting from the
               Event of Force Majeure. Both Parties shall use their best efforts
               to prevent and reduce to a minimum and mitigate the effect of any
               delay occasioned by any Force Majeure and to fulfil its
               obligations under the Contract, including recourse to alternate
               acceptable sources of services, equipment, Materials, or
               Contractor's Equipment. In case such mitigating actions or costs
               associated with the reinstatement of performance have any impact
               on the cost, the provisions of Section 9.8 shall apply and the
               Parties shall consider them as Changes and treat them
               accordingly, but without prejudice to either Party's right to
               terminate the Contract pursuant to Section 26.7.

<Page>

Contract                                                           Page 108(109)

SECTION 26.5.  The Party affected by an Event of Force Majeure shall be excused
               from the performance or punctual performance of its obligations
               under the Contract for so long as the relevant event of Force
               Majeure continues and to the extent that such Party's performance
               is prevented, hindered or delayed. The Time Schedule shall be
               extended accordingly, provided that the Party has provided prompt
               notice of such delay in accordance with Section 26.4 and all
               efforts to mitigate the effects as per Section 26.4 above have
               been exhausted.

SECTION 26.6.  No delay or non-performance by either Party hereto caused by the
               occurrence of any event of Force Majeure shall:

               (a)    constitute a default under or breach of the Contract; or

               (b)    give rise to any claim for damages or, except as provided
                      in Section 26.4, additional cost or expense occasioned
                      thereby, by either Party.

SECTION 26.7.  If the performance of the Contract is substantially prevented or
               delayed for a continuous period of more than two hundred thirty
               (230) Days on account of one or more events of Force Majeure, the
               Parties will attempt to develop a mutually satisfactory solution,
               including an appropriate Change Order to reflect any increased
               costs, failing which either Party may terminate the Contract by
               giving a notice to the other, but without prejudice to either
               Party's right to terminate the Contract under Article 24.

SECTION 26.8.  In the event of termination pursuant to Section 26.7 above, the
               rights and obligations of the Parties shall be as specified in
               Sections 24.1.3 and 24.1.5 (but without including the cross
               reference to Section 24.1.6).

ART. 27        COPYRIGHT AND CONFIDENTIALITY

SECTION 27.1.  Subject to Section 27.2, the copyright in all drawings, documents
               and other materials containing data and information furnished to
               one Party by the other Party shall remain vested in the supplying
               Party, or if they are furnished by any third party, directly or
               indirectly, including suppliers of Materials and

<Page>

Contract                                                           Page 109(111)

               equipment, the copyright in such materials shall remain vested in
               such third party.

               CONFIDENTIAL INFORMATION

SECTION 27.2.  The Owner and the Contractor shall keep confidential and shall
               not, without the written consent of the other party hereto,
               divulge to any third party or use, other than on behalf of the
               other party hereto, any Confidential Information. To the extent
               possible, Confidential Information shall be stamped or labeled
               "Confidential" or if designated orally as Confidential
               Information, such indication shall be confirmed in writing within
               thirty (30) Days. Notwithstanding the foregoing, all financial
               information (including the financial model) provided to or
               otherwise obtained by a Party shall be Confidential Information.
               Notwithstanding the above, the Contractor may furnish to its
               Contractor's Suppliers Confidential Information to the extent
               required for the Contractor's Suppliers to perform its/their work
               under the Contract, and the Owner may furnish Confidential
               Information to the Banks in connection with the financing of the
               Plant. If disclosure to a third party is authorized or disclosure
               to the Banks or the Contractor's Suppliers is made under this
               Section 27.2, the Contractor or the Owner, as applicable, shall
               obtain from such third party, Contractor's Supplier or Banks, as
               applicable, a confidentiality undertaking containing terms and
               conditions identical to this Section 27.2 contains.

SECTION 27.3.  The Owner shall not use Confidential Information for any purpose
               other than the management, operation, maintenance, rebuild and
               capacity increase, production optimization, authority inspection
               and divestment of the Plant and in case of termination, for the
               completion of the Plant. In such case, any third party involved
               by the Owner for any of the above purposes shall be bound by a
               similar confidentiality obligation. Similarly, the Contractor
               shall not use Confidential Information for any purpose other than
               the design, procurement

<Page>

Contract                                                           Page 110(112)

               of the Works, construction or such other work and services as are
               required for the performance of the Contract.

SECTION 27.4.  The obligation of a Party under Section 27.2 and 27.3 above,
               however, shall not apply to that information which:

               (a)    now or hereafter enters the public domain through no fault
                      of that Party; or

               (b)    can be proven to have been possessed by that Party at the
                      time of disclosure, either without limitation on
                      disclosure to others or which subsequently becomes free of
                      such limitation, and which was not previously obtained,
                      directly or indirectly, from the other Party hereto; or

               (c)    belongs to the other Party and lawfully becomes available
                      to the Party from a third party that has no obligation of
                      confidentiality to the other Party;

               (d)    is required by the Banks and/or is required by any
                      Relevant Authorities in connection with the Plant, in
                      which case the other Party shall be informed prior to such
                      disclosure so that precautions with respect to proprietary
                      information may be taken; or

SECTION 27.5.  Each of the Contractor and the Owner represent to the other that
               it has a policy and procedure designed to protect trade secret
               rights and its own proprietary information including notices to
               its employees to prevent unauthorized publication and disclosure
               of such information. The Contractor and the Owner respectively
               agree that Confidential Information shall be subject to such
               policy and procedure.

SECTION 27.6.  Each party hereto agrees to safeguard any documents which the
               other party may supply to it hereunder. The Contractor may make
               copies of such documents only to the extent necessary for the
               performance of the Works.

<Page>

Contract                                                           Page 111(113)

               Upon the expiry of the Defects Liability Period, the Contractor
               shall return to the Owner all documents supplied by the Owner and
               destroy all copies thereof. Should the Contractor, however,
               desire to retain certain documents and receives the Owner's
               written approval therefor, the Contractor shall treat said
               documents as it does Confidential Information.

SECTION 27.7.  The Contractor also agrees to enter into confidentiality
               agreements with third parties upon the Owner's request and to
               keep in force confidentiality agreements concerning third
               parties' proprietary information, which agreements shall permit
               the Contractor to use such parties' proprietary information in
               the Works.

SECTION 27.8.  The Contractor agrees to disclose or cause to be disclosed
               promptly to the Owner all inventions which the Contractor, or any
               officer, director, employee, servant or agent of the Contractor
               or any Affiliated Supplier may make which are wholly or in part
               based upon or derived from information proprietary to the Owner.
               All right, title and interest in and to such inventions shall
               belong to the Owner or its designee. The Contractor agrees to
               execute or cause to be executed all documents and perform or
               cause to be performed other lawful acts which the Owner may deem
               desirable or necessary to perfect its or its designee's title
               thereto and to obtain and maintain or cause to be obtained and
               maintained patent coverage thereon, provided that the Contractor
               may condition its compliance with any such request on the Owner's
               agreement to reimburse the Contractor for all reasonable expenses
               incurred in connection therewith. "Affiliated Supplier" means any
               Contractor's Supplier that controls, is controlled by, or is
               under common control with, the Contractor. For purposes hereof,
               control of any entity shall be determined by the beneficial
               ownership of at least fifty percent (50%) in voting power of the
               equity interest in such entity.

<Page>

Contract                                                           Page 112(114)

SECTION 27.9.  The above provisions of this Section 27 shall not in any way
               modify any undertaking of confidentiality given by either of the
               Parties hereto prior to the date of the Contract in respect of
               the Plant or any part thereof.

SECTION 27.10. The provisions of this Section 27 shall survive Acceptance and
               termination of the Contract for whatever reason for a period of
               ten (10) years.

ART. 28        GOVERNING LAW; DISPUTES

SECTION 28.1.  The Parties are obliged to do their utmost to settle any arising
               dispute in good faith. If this is not possible Articles 28.2 and
               28.3 shall apply.

SECTION 28.2.  This Contract shall be governed by, and disputes shall be judged
               and settled in accordance with German law, excluding, however,
               the Vienna Convention of "April 1980" named "Convention of
               Contracts for the International Sale of Goods".

SECTION 28.3.  Any dispute arising out of or in connection with the Contract
               shall be finally and exclusively settled by arbitration pursuant
               to the "DEUTSCHE INSTITUTION FUR SCHIEDSGERICHTSBARKEIT". The
               venue of arbitration proceedings shall be Berlin. The language to
               be used in arbitration proceedings shall be English.

ART. 29        INDEMNITY OBLIGATIONS

               CONTRACTOR'S INDEMNITY OBLIGATIONS

SECTION 29.1.  (a)    The Contractor shall indemnify and hold harmless the Owner
                      and its employees and officers from and against any and
                      all suits, actions or administrative proceedings, claims,
                      demands, losses, damages, costs and expenses of whatsoever
                      nature, including attorneys fees and expenses, for injury
                      to, or sickness, disease or death of, any persons
                      (including employees of the Contractor and the
                      Contractor's Suppliers) and for loss of or damage to the
                      property of third parties which directly or indirectly
                      arise out of or result from any negligent, illegal,
                      reckless or tortious act or omission of the Contractor or
                      any Contractor's Supplier

<Page>

Contract                                                           Page 113(115)

                      or anyone directly or indirectly employed by any of them,
                      or anyone for whose acts such person may be liable in
                      connection with activities under the Contract.

               (b)    The Contractor shall indemnify and hold harmless the Owner
                      and its employees and officers from and against any and
                      all suits, actions or administrative proceedings, claims,
                      losses, and damages by the Relevant Authorities or any
                      third party asserting rights under or by virtue of the
                      relevant Law, and costs and expenses of whatever nature
                      whatsoever relating thereto, including attorneys fees and
                      expenses and any fines or penalties imposed by Relevant
                      Authorities, which directly or indirectly arise out of or
                      result from any violation of Law (including Permits) by
                      the Contractor in connection with its activities under
                      this Contract.

               OWNER'S INDEMNITY OBLIGATIONS

SECTION 29.2.  (a)    The Owner shall indemnify and hold harmless the Contractor
                      and its employees and officers from and against any and
                      all suits, actions or administrative proceedings, claims,
                      demands, losses, damages, costs and expenses of whatsoever
                      nature, including attorneys fees and expenses, for injury
                      to, sickness, disease or death of, any persons (including
                      employees of the Owner) and for loss of or damage to the
                      property of third parties which directly or indirectly
                      arise out of or result from any negligent, illegal,
                      reckless or tortious act or omission of the Owner or any
                      of the Owner's subcontractors (other than the Contractor)
                      or anyone directly or indirectly employed by any of them,
                      or anyone for whose acts such person may be liable in
                      connection with activities under the Contract.

               (b)    The Owner shall indemnify and hold harmless the Contractor
                      and its employees and officers from and against any and
                      all suits, actions or administrative proceedings, claims,
                      losses and damages by the

<Page>

Contract                                                           Page 114(116)

                      Relevant Authorities or any third party asserting rights
                      under or by virtue of the relevant Law, and costs and
                      expenses of whatever nature whatsoever relating thereto,
                      including attorneys fees and expenses and any fines or
                      penalties imposed by Relevant Authorities, which directly
                      or indirectly arise out of or result from any violation of
                      Law (including Permits) by the Owner in connection with
                      its activities under this Contract.

SECTION 29.3.  If any proceedings are brought or any claim is made arising out
               of the matters referred to in Section 29.1 or 29.2 above, the
               Party seeking indemnification (the "Indemnified Party") shall
               promptly give the other Party (the "Indemnifying Party") a notice
               thereof, and the Indemnifying Party shall at its own expense and
               in the Indemnified Party's name conduct such proceedings or claim
               and any negotiations for the settlement of any such proceedings
               or claim.

SECTION 29.4.  If the Indemnifying Party fails to notify the Indemnified Party
               within twenty-eight (28) Days of receipt of such notice that it
               intends to conduct any such proceedings or claim, then the
               Indemnified Party shall be free to conduct the same on its own
               behalf. Unless the Indemnifying Party has so failed to notify the
               Indemnified Party within the twenty-eight (28) Day period, the
               Indemnified Party shall make no admission which may be
               prejudicial to the defense of any such proceedings or claim.

SECTION 29.5.  The Indemnified Party shall, at the Indemnifying Party's request,
               assist the Indemnifying Party in conducting such proceedings or
               claim, and shall be reimbursed by the Indemnifying Party for all
               reasonable expenses incurred.

ART. 30        MISCELLANEOUS

SECTION 30.1.  Notwithstanding anything contained to the contrary in this
               Contract, except to the extent of the liquidated damages provided
               for in this Contract, the Contractor shall in no case be liable
               to the Owner for any indirect and/or consequential loss or
               damage, including loss of production, loss by reason of Plant
               shutdown or inability to operate at a certain capacity, claims of

<Page>

Contract                                                           Page 115(117)

               customers or suppliers, capital interest costs and the like. This
               limitation of liability shall not apply in the event of willful
               misconduct on the part of the Contractor.

SECTION 30.2.  The Contractor shall be an independent supplier performing the
               Contract. The Contract does not create any agency, partnership,
               joint venture or other joint relationship between the Parties
               hereto.

SECTION 30.3.  Subject to the provisions of the Contract, the Contractor shall
               be solely responsible for the manner in which the Contract is
               performed. All employees, representatives or Contractor's
               Suppliers engaged by the Contractor in connection with the
               Performance of the Contract shall be under the complete control
               and responsibility of the Contractor and shall not be deemed to
               be employees of the Owner, and nothing contained in the Contract
               or in any subcontract awarded by the Contractor shall be
               construed to create any contractual relationship between any such
               employees, representatives or Contractor's Suppliers and the
               Owner or relieve the Contractor from any of its obligations
               hereunder.

SECTION 30.4.  Subject to Section 30.5 below, any relaxation, forbearance, delay
               or indulgence by either Party in enforcing any term of this
               Contract or the granting of an extension of time by either Party
               to the other shall not be considered a waiver of any right
               thereafter to insist upon strict adherence to that term or any
               other term of this Contract, nor shall any waiver by either Party
               of any breach of this Contract operate as waiver of any
               subsequent or continuing breach of this Contract.

SECTION 30.5.  Any waiver of a Party's rights, powers or remedies under the
               Contract must be in writing, must be dated and signed by an
               authorized representative of the Party granting such waiver, and
               must specify the right and the extent to which it is being
               waived.

<Page>

Contract                                                           Page 116(118)

SECTION 30.6.  Subject to the payment of any amounts due under Section 24.2.4,
               the Contractor shall not be entitled to claim a right of
               retention with respect to any plans, drawings, or descriptions,
               or, in the event of termination of the Contract, agreements or
               contracts, invoices, accounting records or other documents
               relating to the Works.

SECTION 30.7.  If any provision or condition of the Contract is prohibited or
               rendered invalid or unenforceable, such prohibition, invalidity
               or unenforceability shall not affect the validity or
               enforceability of any other provisions and conditions of the
               Contract. In such event the Parties shall, by amendment to this
               Contract, properly replace such provision by a reasonable new
               provision or provisions which, as far as legally possible, shall
               approximate what the Parties intended by such original provision
               and the purpose thereof.

               The performance criteria and Performance Requirements of the
               Contractor provided in Articles 17, 18, 19 and set forth in
               Appendix 3 and the warranties set forth in Article 20 shall not
               be considered or construed as "GARANTIEN" within the meaning of
               Sections 444 and 639 BGB (new version). The Parties recognize
               that there is presently some uncertainty as to whether
               limitations of liability of the type agreed upon in the Contract
               with respect to such performance standards of the Contractor will
               be held valid under the terms of the new German Civil Code. In
               the event that such limitations of liability are deemed invalid
               or the performance standards are deemed to be "GARANTIEN" under
               Section 444 or 639 BGB (new version), the Owner agrees not to
               claim any rights or assert any claims inconsistent with the
               intended limitations on the liability of the Contractor under the
               Contract.

               Notwithstanding the foregoing, the Parties agree that the Owner
               shall not be required to establish fault ("VERSCHULDEN") on the
               part of the Contractor in connection with a claim for liquidated
               damages or a claim under the warranties contained in Article 20.

<Page>

Contract                                                           Page 117(119)

SECTION 30.8.  Unless otherwise stated in the Contract, all notices to be given
               under the Contract shall be in writing, and shall be sent by
               personal delivery, airmail post, special courier, facsimile or
               e-mail to the address of the relevant Party set out herein in
               accordance with the following provisions.

SECTION 30.9.  Any notice sent by facsimile or e-mail shall be confirmed within
               two (2) Business Days after dispatch by notice to be sent by post
               or special courier, except as otherwise agreed between the
               Parties.

SECTION 30.10. Any notice sent by post or special courier shall be deemed (in
               the absence of evidence of earlier receipt) to have been
               delivered two (2) Business Days after dispatch. In proving the
               fact of dispatch, it shall be sufficient to show that the
               envelope containing such notice was properly addressed, stamped
               and conveyed to the postal authorities or courier service for
               transmission by post or special courier.

SECTION 30.11. Any notice delivered personally or sent by facsimile or e-mail
               shall be deemed to have been delivered on the date of its
               dispatch.

SECTION 30.12. Either Party may change its postal, facsimile or e-mail address
               or addressee for receipt of such notices by ten (10) Days notice
               to the other Party in writing.

SECTION 30.13. Notices shall be deemed to include any approvals, consents,
               instructions, orders and certificates to be given under the
               Contract.

SECTION 30.14. The Contract constitutes the entire Agreement between the Owner
               and the Contractor with respect to the subject matter of the
               Contract. All previous documents, undertakings and agreements,
               whether verbal, written or otherwise, between the Parties
               concerning the subject matter hereof are hereby cancelled and
               shall not affect or modify any of the terms or obligations set
               forth in this Contract. In addition, anything mentioned in the
               text of any Appendix and not shown on the drawings made part
               thereof or shown on such drawings and not mentioned in such
               Appendices shall be of like effect as if shown or mentioned in
               both.

<Page>

Contract                                                           Page 118(120)

SECTION 30.15. No amendment or other variation of the Contract shall be
               effective unless it is in writing, is dated, expressly refers to
               the Contract, and is signed by a duly authorized representative
               of each Party hereto.

ART. 31        CONTRACT LANGUAGE

               Except as otherwise specifically provided to the contrary, all
               documents, notices, waivers and all other communications written
               or otherwise between the Owner and the Contractor in connection
               with this Contract shall be English. However, the Contractor is
               obligated to prepare all documents which are required by the
               respective authorities (including for obtaining Permits), as well
               as the main technical documents and drawings including manuals
               and "as built" drawings, in German. Also, all training and all
               training, operation and maintenance manuals and instructions,
               signs and manuals shall be in German.

ART. 32        COMMENCEMENT DATE

               The Parties shall proceed with the activities under this Contract
               when the conditions set forth below have been fulfilled:

               -      the Contract has been signed by both Parties and the
                      Direct Agreement has been signed by the parties thereto;

               -      loan agreements for the construction of the Plant shall
                      have been executed by the Owner and the Banks and shall be
                      in full force and effect and all conditions for their
                      initial drawdown shall have been met or waived, except for
                      the receipt by the lenders of the Notice of Commencement
                      Date, which shall be executed and delivered to the Banks
                      by the Contractor and the Owner concurrently with the
                      execution and delivery to the Contractor and the Owner of
                      the Banks' declaration of the satisfaction of the
                      conditions precedent for initial drawdown under the loan
                      agreements;

<Page>

Contract                                                           Page 119(121)

               -      the Permits specified in items 1.1, 2, 3 and 5 of Appendix
                      3, Ex. 4.4 have been obtained, are not the subject of
                      pending appeal as of August 22, 2002 and, except as set
                      forth in paragraph 8 of Appendix 3, Ex 4.4, are not the
                      subject of pending modifications;

               -      the bank guarantee as per Section 10.1 hereof has been
                      received by the Owner and is in full force and effect;

               -      the Contractor has delivered to the Owner a Parent Company
                      Guaranty in the form set forth in Appendix 2, Ex. 10;

               -      an advance payment in an amount equal to five percent (5%)
                      of the Contract Price has been received by the Contractor;
                      and

               -      the Pre-Activity Period specified in the Pre-Activity
                      Agreement has expired.

               The Owner and the Contractor shall advise each other regarding
               their progress toward the satisfaction of the foregoing
               conditions and, when the conditions are satisfied, shall execute
               and deliver a joint notice of Commencement Date substantially in
               the form set forth in Appendix 2, Ex. 1 specifying the occurrence
               of the Commencement Date.

ART. 33        ASSIGNMENT; TRANSFER

               Without written permission from the other Party neither the Owner
               nor the Contractor is entitled to assign or transfer the Contract
               or any right, interest or obligation therein to a third party,
               except in the event of assignments in connection with termination
               pursuant to Section 24.1.3(d) and, in the case of the Owner,
               assignment of its rights under the Contract to the Banks and
               except that, for the purpose of financing the construction of the
               Plant, the Owner and the Contractor may assign or create a
               security interest over its rights and interests under or pursuant
               to this Contract. The Contractor agrees to cooperate with the
               Banks and to provide such acknowledgements of any

<Page>

Contract                                                           Page 120(122)

               assignment by the Owner to the Banks in such terms as the Banks
               may reasonably require. Any actual, attempted or purported sale,
               assignment or other transfer by a Party of any of its rights or
               obligations or interests in, under or pursuant to this Contract
               that does not comply with the terms of this Section 33 shall be
               null, void and of no force or effect.

This Contract may be executed in one or more counterparts, each of which when so
executed will be deemed an original, and such counterparts together shall
constitute one and the same instrument.

Frankfurt August 26/02
          -----------------------

/s/ Wolfram Ridder                    /s/ Norbert Kreutzer
--------------------------------------------------------------------------------

/s/ Harald Gatzke                     /s/ Rolf Neuwinger
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Owner                                 Contractor

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH


                                   APPENDIX 1

                                DIRECT AGREEMENT

<Page>

CLIFFORD
CHANGE
PUNDER                                                            EXECUTION COPY

                              DATED    August 2002

                             ZELLSTOFF STENDAL GMBH

                                       and

                           RWE INDUSTRIE-LOSUNGEN GMBH

                                       and

                                RWE SOLUTIONS AG

                                       and

                       BAYERISCHE HYPO-UND VEREINSBANK AG

                      ------------------------------------

                          CONTRACTOR'S DIRECT AGREEMENT

                      ------------------------------------

<Page>

                                    CONTENTS

<Table>
<Caption>
CLAUSE                                                                      PAGE
<S>                                                                           <C>
1.       DEFINITIONS AND INTERPRETATION........................................1

2.       CONSENT TO SECURITY...................................................6

3.       ACKNOWLEDGEMENT.......................................................6

4.       PAYMENT SECURITY......................................................6

5.       NOTIFICATION..........................................................7

6.       SUSPENSION DEFAULT NOTICE AND SUSPENSION OF PERFORMANCE...............7

7.       TERMINATION DEFAULT NOTICE AND TERMINATION............................8

8.       STATEMENT OF AMOUNTS DUE.............................................10

9.       WARRANTY OF ACCURACY.................................................11

10.      STATEMENTS TO BE PRIMA FACIE EVIDENCE................................11

11.      SUSPENSION OF WORKS..................................................12

12.      STEP-IN NOTICE.......................................................13

13.      CONSENT OF THE CONTRACTOR............................................13

14.      ASSUMPTION...........................................................14

15.      RIGHTS AND OBLIGATIONS ON ASSUMPTION.................................14

16.      STEP-OUT.............................................................15

17.      NOVATION PROPOSAL....................................................16

18.      CONSENT OF THE CONTRACTOR............................................16

19.      NOVATION.............................................................16

20.      REVIVAL OF REMEDIES..................................................18

21.      CONSIDERATION........................................................19

22.      GUARANTOR'S CONTINUING OBLIGATIONS...................................19

23.      LEGAL AND BINDING OBLIGATIONS........................................20
</Table>

<Page>

<Table>
<S>                                                                           <C>
24.      STANDARD OF WORK.....................................................20

25.      ACCESS TO SITE AND INFORMATION.......................................20

26.      FORCE MAJEURE........................................................20

27.      INSURANCE............................................................21

28.      RESTRICTIONS ON OWNER'S RIGHTS AND OBLIGATIONS.......................21

29.      ASSIGNMENT...........................................................21

30.      BENEFIT..............................................................22

31.      NO ASSIGNMENT........................................................22

32.      NO WAIVER............................................................22

33.      COUNTERPARTS.........................................................22

34.      NO OTHER CLAIMS......................................................22

35.      NO SET-OFF...........................................................22

36.      PAYMENT OF MONIES....................................................23

37.      CONFIDENTIALITY......................................................23

38.      NOTICES..............................................................23

39.      GOVERNING LAW........................................................25

SCHEDULE 1 ADDITIONAL OBLIGOR ACCESSION MEMORANDUM............................26

SCHEDULE 2 SUBSTITUTE ACCESSION MEMORANDUM....................................28
</Table>

<Page>

THIS AGREEMENT is made on           August 2002

BETWEEN

(1)       ZELLSTOFF STENDAL GMBH (the "OWNER");

(2)       RWE INDUSTRIE-LOSUNGEN GMBH (the "CONTRACTOR");

(3)       RWE SOLUTIONS AG (the "GUARANTOR"); and

(4)       BAYERISCHE HYPO-UND VEREINSBANK AG (the "SECURITY AGENT", which
          expression shall include any trustee for the time being appointed
          pursuant to the Security Pooling Agreement).

WHEREAS

(A)       The Owner and the Contractor have entered into the Construction
          Contract in relation to the Works.

(B)       The Guarantor has entered into the Parent Company Guarantee and the
          Contractor has procured the Advance Payment, Performance and Defects
          Liability Period Guarantees as security for the obligations of the
          Contractor under the Construction Contract.

(C)       Pursuant to the Finance Documents, the Lenders have agreed to make
          financial accommodation available to the Owner for the purpose of
          financing the Plant.

(D)       It is a condition precedent to the financial accommodation being made
          available by the Lenders that this Agreement is executed and delivered
          by the parties hereto.

IT IS AGREED as follows:

                                     PART 1
                         DEFINITIONS AND INTERPRETATION

1.        DEFINITIONS AND INTERPRETATION

1.1       DEFINITIONS
          Except where the context otherwise requires, in this Agreement the
          following terms and expressions shall bear the following meanings:

          "ADDITIONAL OBLIGOR" shall bear the meaning ascribed thereto in
          Clause 12;

                                        1
<Page>

          "ADDITIONAL TERMINATION STANDSTILL PERIOD" shall bear the meaning
          ascribed thereto in Clause 7.3;

          "ADVANCE PAYMENT, PERFORMANCE AND DEFECTS LIABILITY PERIOD GUARANTEES"
          means the bank guarantees provided or to be provided by or on behalf
          of the Contractor in favour of the Owner referred to in clause 10.1 of
          the Construction Contract and in the forms appearing in appendix 2 of
          the Construction Contract (or in such other form as may be agreed by
          the parties hereto);

          "ASSUMPTION DATE" shall bear the meaning ascribed thereto in
          Clause 14;

          "CONSTRUCTION CONTRACT" means the agreement dated on or about the date
          hereof entered into between the Contractor and the Owner for, inter
          alia, the engineering, design, procurement, construction, erection and
          start-up of a kraft pulp mill and the training of certain of the
          Owner's employees;

          "CHANGE ORDERS" shall bear the meaning ascribed thereto in the
          Construction Contract;

          "DEFAULT NOTICE" means, as the case may be, a Suspension Default
          Notice or a Termination Default Notice;

          "EFFECTIVE DATE" shall bear the meaning ascribed thereto in Clause 17;

          "FACILITY AGREEMENT" means the project financing facility agreement
          dated on or about the date hereof made between the Owner, the Security
          Agent, Bayerische Hypo-und Vereinsbank AG as original lender and
          Bayerische Hypo-und Vereinsbank AG as arranger;

          "FINANCE DOCUMENTS" means any agreement entered into with any
          Permitted Subsidiary in connection with the financing of the wood
          supply or logistics aspects of the Project, the Hedging Agreements,
          the Security Agreements, the Shareholders' Undertaking Agreement, the
          RWE Solutions AG Guarantee, any agreement regarding Shareholder Loans
          and the corresponding subordination declarations, the Stand-By Equity
          Security, the Fee Letter, any waiver requests, waivers and other
          binding notifications, the Parent Company Guarantee, the Step-in
          Rights Agreement between SP Holding, RWE-IN, FAHR and the Agent, the
          State Guarantee and any other document in relation to the financing of
          the Project (as each of the foregoing terms is defined in the Facility
          Agreement), the Advance Payment, Performance and Defects Liability
          Period Guarantees, the Facility Agreement and this Agreement;

          "FIRST ADDITIONAL SUSPENSION STANDSTILL PERIOD" shall bear the meaning
          ascribed thereto in Clause 6.3;

                                        2
<Page>

          "INITIAL SUSPENSION STANDSTILL PERIOD" shall bear the meaning ascribed
          thereto in Clause 6.2;

          "INITIAL TERMINATION STANDSTILL PERIOD" shall bear the meaning
          ascribed thereto in Clause 7.2;

          "LENDERS" means the banks or other financial institutions providing
          financial accommodation to or at the request of the Owner which is
          secured by, inter alia, the Security Document;

          "MILESTONES" shall bear the meaning ascribed thereto in the
          Construction Contract;

          "NOVATION NOTICE" shall bear the meaning ascribed thereto in
          Clause 17;

          "PARENT COMPANY GUARANTEE" means the guarantee given by the Guarantor
          in favour of the Owner in respect of, inter alia, the present and
          future obligations of the Contractor to the Owner under the
          Construction Contract;

          "PETITION" shall bear the meaning ascribed thereto in Clause 6.2;

          "PLANT" shall bear the meaning ascribed thereto in the Construction
          Contract;

          "REVIVAL DATE" shall bear the meaning ascribed thereto in Clause 20;

          "SECOND ADDITIONAL SUSPENSION STANDSTILL PERIOD" shall bear the
          meaning ascribed thereto in Clause 6.4;

          "SECURITY DOCUMENT" means the global assignment agreement dated on or
          about the date hereof made between the Owner and the Security Agent.

          "SECURITY POOLING AGREEMENT" means the agreement dated on or about the
          date hereof made between the Owner, the Security Agent, Bayerische
          Hypo- und Vereinsbank AG as original lender and as hedging
          counterparty, RWE Industrie-Losungen GmbH, Stendal Pulp Holding GmbH,
          Mercer International Inc., AIG Altmark Industrie AG, FAHR
          Beteiligungen AG;

          "SHAREHOLDERS' UNDERTAKING AGREEMENT" means the agreement dated on or
          about the date hereof made between the Owner, Bayerische Hypo- und
          Vereinsbank AG (as agent), RWE Industrie-Losungen GmbH, Mercer
          International Inc., AIG Altmark Industrie AG, Stendal Pulp Holding
          GmbH and FAHR Beteiligungen AG;

          "SITE" has the meaning given to it in the Construction Contract;

          "STEP-IN NOTICE" shall bear the meaning ascribed thereto in Clause 12;

                                        3
<Page>

          "STEP-IN DATE" means the date upon which any Step-in Notice is given
          pursuant to Clause 12;

          "STEP-IN PERIOD" in relation to an Additional Obligor means the period
          from and including the Step-in Date to and including the Step-out Date
          relating to such Additional Obligor;

          "STEP-OUT DATE" in relation to an Additional Obligor means the date
          upon which any notice served by such Additional Obligor pursuant to
          Clause 16 expires;

          "SUBSTITUTE" shall bear the meaning ascribed thereto in Clause 17;

          "SUSPENSION DEFAULT NOTICE" shall bear the meaning ascribed thereto in
          Clause 6.2;

          "STANDSTILL PERIOD" means the Initial Suspension Standstill Period,
          First Additional Suspension Standstill Period, Second Additional
          Suspension Standstill Period, Initial Termination Standstill Period
          and/or Additional Termination Standstill Period, as the case may be;

          "TERMINATION DEFAULT NOTICE" shall bear the meaning ascribed thereto
          in Clause 7.2; and

          "WORKS" shall bear the meaning ascribed thereto in the Construction
          Contract.

1.2       INTERPRETATION
          Save where the contrary is indicated, any reference in this Agreement
          to:

1.2.1     words importing the singular shall include the plural and vice versa;

1.2.2     any person (including without limitation, an Additional Obligor,
          Lender or Substitute) shall be construed so as to include its and any
          subsequent successors, transferees and assigns in accordance with
          their respective interests;

1.2.3     this Agreement or any other agreement or document shall be construed
          as a reference to this Agreement or, as the case may be, such other
          agreement or document as the same may have been, or may from time to
          time be, amended, varied, novated, replaced or supplemented;

1.2.4     a Clause and a Part shall, respectively, be construed as a reference
          to a clause or part to this Agreement; and

1.2.5     the "WINDING-UP", "DISSOLUTION", "ADMINISTRATION", "INSOLVENCY" or
          "REORGANISATION" of a company or corporation and references to the
          "LIQUIDATOR", "ASSIGNEE", "ADMINISTRATOR", "RECEIVER", "ADMINISTRATIVE
          RECEIVER", "MANAGER" or "TRUSTEE" of a company or corporation shall be

                                        4
<Page>

          construed so as to include any equivalent or analogous proceedings or,
          as the case may be, insolvency representatives or officers under the
          law of the jurisdiction in which such company or corporation is
          incorporated or constituted or any jurisdiction in which such company
          or corporation or, as the case may be, insolvency representative or
          officer carries on business including without limitation, the seeking
          of liquidation, winding-up, reorganisation, dissolution,
          administration, arrangement, adjustment, protection or relief of
          debtors.

1.3       DISCRETIONS
          Any discretion exercisable under the terms of this Agreement by any
          party hereto shall, unless otherwise provided herein, be exercisable
          by such party in its absolute discretion and shall not be
          challengeable on grounds that such discretion shall not have been
          exercised fairly or reasonably.

1.4       HEADINGS
          Headings are for ease of reference only and shall not affect the
          construction of this Agreement.

                                        5
<Page>

                                     PART 2
                           CONSENT AND ACKNOWLEDGEMENT

2.        CONSENT TO SECURITY

          The Contractor and the Guarantor hereby consent to the Owner's
          assignment by way of security under the Security Document of all its
          right, title, benefit and interest under each of the Construction
          Contract, the Advance Payment, Performance and Defects Liability
          Period Guarantees and the Parent Company Guarantee (provided that the
          assignment under the Security Document of the Construction Contract
          shall not confer on the Security Agent or the Lenders any rights,
          title, benefit and interest greater than those conferred on the Owner
          thereunder) and hereby acknowledge receipt of the respective notices
          of such assignment.

3.        ACKNOWLEDGEMENT

          The Contractor and the Guarantor hereby acknowledge that none of the
          Security Agent, the Lenders or their respective agents or
          representatives accept or assume any liabilities or obligations under
          the Construction Contract, the Advance Payment, Performance and
          Defects Liability Period Guarantees or the Parent Company Guarantee as
          a result of the assignment referred to in Clause 2.

4.        PAYMENT SECURITY

          The Contractor and Guarantor agree that if at any time the Contractor
          requests payment security pursuant to section 648a of the German Civil
          Code (as the same may be amended from time to time) any obligations of
          the Owner pursuant to such section shall be fulfilled by the Guarantor
          in accordance with the terms of the Shareholders Undertaking Agreement
          and shall be a full discharge of the Owner's obligations thereunder.

                                        6
<Page>

                                     PART 3
                             SUSPENSION OF REMEDIES

5.        NOTIFICATION

5.1       The Contractor shall as soon as it becomes aware of any failure of the
          Owner to perform its material obligations under the Construction
          Contract immediately notify the Security Agent of such failure.

5.2       The Contractor shall provide to the Security Agent immediately (and in
          any event within 2 days of the delivery of the relevant notice) a copy
          of any notice given to the Owner in respect of any failure by the
          Owner to comply with its obligations under the Construction Contract.

6.        SUSPENSION DEFAULT NOTICE AND SUSPENSION OF PERFORMANCE

6.1       The Contractor acknowledges that its only rights of suspension under
          the Construction Contract are those set out in sections 23.2 and 26.7
          of the Construction Contract.

6.2       The Contractor undertakes not to take any step to suspend or reduce
          its rate of progress or performance under the Construction Contract or
          its employment under the Construction Contract, exercise any other
          right it may have whether under the Construction Contract or otherwise
          to rescind or terminate the Construction Contract, enforce execution
          against any of the assets of the Owner or present any petition for the
          administration, dissolution or winding up of the Owner (a "PETITION")
          for a period of 30 days (the "INITIAL SUSPENSION STANDSTILL PERIOD")
          after actual receipt by the Security Agent of written notice (a
          "SUSPENSION DEFAULT NOTICE") specifying the grounds under which the
          Contractor may have a right to suspend under section 23.2 (i) - (iii),
          on the giving of notice in accordance with section 23.2, under the
          Construction Contract.

6.3       If on or before the expiry of the Initial Suspension Standstill Period
          the Security Agent (on behalf of the Lenders) by written notice to the
          Contractor agrees to pay 50% of the actual costs of the Contractor
          from the date of expiry of the Initial Suspension Standstill Period
          for a further period 30 days ("FIRST ADDITIONAL SUSPENSION STANDSTILL
          PERIOD") the Contractor undertakes not to take any step to terminate
          the Construction Contract or its employment under the Construction
          Contract, exercise any other right it may have whether under the
          Construction Contract or otherwise to rescind, suspend the performance
          of or terminate the Construction Contract, enforce execution against
          any of the assets of the Owner or present any Petition prior to the
          expiry of the First Additional Suspension Standstill Period.

                                        7
<Page>

6.4       If on or before the expiry of the First Additional Suspension
          Standstill Period the Security Agent (on behalf of the Lenders) by
          written notice to the Contractor agrees to pay 100% of the actual
          costs of the Contractor from the date of expiry of the First
          Additional Suspension Standstill Period for a period to be determined
          by the Security Agent (not to exceed 760 days) ("SECOND ADDITIONAL
          SUSPENSION STANDSTILL PERIOD") the Contractor undertakes not to take
          any step to terminate the Construction Contract or its employment
          under the Construction Contract, exercise any other right it may have
          whether under the Construction Contract or otherwise to rescind,
          suspend the performance of or terminate the Construction Contract,
          enforce execution against any of the assets of the Owner or present
          any Petition prior to the expiry of the Second Additional Suspension
          Standstill Period.

6.5       The Contractor must continue to perform all its obligations under the
          Construction Contract after the service by it of a Suspension Default
          Notice on the Security Agent unless:

6.5.1     the Contractor receives a notice from the Security Agent in accordance
          with Clause 11.1;

6.5.2     the Initial Suspension Standstill Period or First Additional
          Suspension Standstill Period (as the case may be) expires and the
          Security Agent has not agreed to pay the Contractor's costs as
          contemplated in Clauses 6.3 and 6.4 (as the case may be); or

6.5.3     the Second Additional Suspension Standstill Period expires.

6.6       At the same time and in the same manner that the Contractor sends the
          Suspension Default Notice to the Security Agent, the Contractor must
          send a copy of the Suspension Default Notice to the Owner. The
          Contractor shall, at the same time and in the same manner as provided
          in the Construction Contract, send a copy of any notice sent to the
          Owner under section 23.2 of the Construction Contract to the Security
          Agent.

7.        TERMINATION DEFAULT NOTICE AND TERMINATION

7.1       The Contractor acknowledges that its only rights to terminate the
          Construction Contract are those set out in sections 24.2 and 26.7 of
          the Construction Contract.

7.2       The Contractor undertakes not to take any step to terminate the
          Construction Contract or its employment under the Construction
          Contract or reduce its rate of progress or performance under the
          Construction Contract, exercise any other right it may have whether
          under the Construction Contract or otherwise to rescind or terminate
          the Construction Contract, enforce execution against any of the assets
          of the Owner or present any Petition for a period of 30 days in the
          case

                                        8
<Page>

          of any event set out in section 24.2.2 of the Construction Contract
          (the "INITIAL TERMINATION STANDSTILL PERIOD") after actual receipt by
          the Security Agent of written notice from the Contractor together with
          a certified copy of any notice of its intent to terminate the
          Construction Contract given to the Owner under section 24.2.1 or
          24.2.2 of the Construction Contract (a "TERMINATION DEFAULT NOTICE")
          specifying the grounds for termination provided that the Security
          Agent (on behalf of the Lenders) by written notice to the Contractor
          agrees within 10 days of actual receipt of the Termination Default
          Notice to pay 50% of the actual costs of the Contractor from the date
          of receipt of the Termination Default Notice until the expiry of the
          Initial Termination Standstill Period,

          Provided that:

          This Clause 7.2 shall not apply in the case of a termination pursuant
          to section 24.2.2(b) of the Construction Contract where:

          (a)  there has been an expiry of the Initial Suspension Standstill
               Period and no First Additional Suspension Standstill Period is in
               effect; or

          (b)  there has been an expiry of the Initial Suspension Standstill
               Period and the First Additional Suspension Standstill Period and
               the Security Agent (on behalf of the Lenders) has not, by written
               notice to the Contractor, agreed to pay 100% of the actual costs
               of the Contractor from the date of expiry of the First Additional
               Suspension Standstill Period,

          in which case the Contractor shall be entitled to exercise its
          remedies in accordance with the Construction Contract.

7.3       If on or before the expiry of the Initial Termination Standstill
          Period the Security Agent (on behalf of the Lenders) by written notice
          to the Contractor agrees to pay 100% of the actual costs of the
          Contractor from the date of expiry of the Initial Termination
          Standstill Period for a period to be determined by the Security Agent
          (not to exceed 760 days) ("ADDITIONAL TERMINATION STANDSTILL PERIOD")
          the Contractor undertakes not to take any step to terminate the
          Construction Contract or its employment under the Construction
          Contract, exercise any other right it may have whether under the
          Construction Contract or otherwise to rescind, suspend the performance
          of or terminate the Construction Contract, enforce execution against
          any of the assets of the Owner or present any Petition prior to the
          expiry of the Additional Termination Standstill Period.

7.4       The Contractor must continue to perform all its obligations under the
          Construction Contract after the service by it of a Termination Default
          Notice on the Security Agent unless:

                                        9
<Page>

7.4.1     the Contractor receives a notice from the Security Agent in accordance
          with Clause 11.1;

7.4.2     the Security Agent (on behalf of the Lenders) has not, by written
          notice to the Contractor, agreed to pay the Contractor's costs as
          contemplated in Clause 7.2 or the Initial Termination Standstill
          Period expires and the Security Agent has not agreed to pay the
          Contractor's costs as contemplated in Clause 7.3; or

7.4.3     the Additional Termination Standstill Period expires.

7.5       At the same time and in the same manner that the Contractor sends the
          Termination Default Notice to the Security Agent, the Contractor must
          send a copy of the Termination Default Notice to the Owner.

8.        STATEMENT OF AMOUNTS DUE

8.1       Within 10 days after the date of any Default Notice, the Contractor
          shall submit to the Security Agent statements of:

8.1.1     all amounts due and payable to the Contractor under the Construction
          Contract on or before the date of such Default Notice and which remain
          unpaid at such date; and

8.1.2     the nature and the amount of any monetary claim, asserted by the
          Contractor against the Owner under the Construction Contract, which
          arises out of or in connection with the breach for which such Default
          Notice was served.

8.2       The Security Agent may appoint a firm of independent chartered
          accountants:

8.2.1     to verify the statements submitted by the Contractor pursuant to
          Clause 8.1 (other than for amounts that have been approved in
          accordance with section 9.2 of the Construction Contract); or

8.2.2     where the Contractor fails to submit statements in accordance with
          Clause 8.1, to prepare such statements themselves; and

          such firm of independent chartered accountants shall provide its
          determinations as soon as reasonably practicable and in any event
          within 3 months from the date upon which the Contractor is required to
          submit information to the Security Agent in accordance with
          Clause 8.1.

8.3       The Contractor shall permit any firm of independent chartered
          accountants appointed pursuant to Clause 8.2 to have access to and to
          make copies of all records, documents, data and accounting and other
          information not subject to legal (including, without limitation,
          solicitor and own client) and other professional privilege which is
          reasonably required with a view to verifying or

                                       10
<Page>

          preparing the statements referred to in Clause 8.1 (other than for
          amounts that have been approved in accordance with section 9.2 of the
          Construction Contract).

8.4       If a firm of independent chartered accountants is appointed pursuant
          to Clause 8.2 to verify any statements submitted by the Contractor
          pursuant to Clause 8.1 (other than for amounts that have been approved
          in accordance with section 9.2 of the Construction Contract) and such
          firm determines that such statements contain an amount which is in
          excess of the amount which such firm believes to be accurate, fair and
          reasonable, the amount determined by such firm shall be deemed to
          prevail for the purposes of this Part 3.

8.5       If a firm of independent chartered accountants is appointed pursuant
          to Clause 8.2 to prepare any statements which should have been
          submitted by the Contractor pursuant to Clause 8.1, then such
          statements shall be prepared by such firm on the basis of such
          information as may be available to it and shall be treated as having
          been prepared by the Contractor to the purposes of this Part 3.

8.6       The cost and expenses of any firm of independent chartered accountants
          appointed by the Security Agent pursuant to Clause 8.2 shall be for
          the account of the Security Agent except that, if such firm is
          appointed to prepare any statements which should have been prepared by
          the Contractor pursuant to Clause 8.1, then the Contractor shall
          reimburse the Security Agent on demand for any amounts paid by it to
          such firm in respect of the preparation of such statements.

9.        WARRANTY OF ACCURACY

          The Contractor warrants to the Security Agent that the statements
          submitted by it pursuant to Clause 8 shall be (so far as reasonably
          practicable in relation to Clause 8.1.2) true, complete and accurate
          statements of the amounts to which the Contractor considers itself
          entitled.

10.       STATEMENTS TO BE PRIMA FACIE EVIDENCE

          Without prejudice to the rights of the Contractor to pursue any claims
          against the Owner following the Revival Date (if any), any statements
          submitted by:

10.1.1    the Contractor pursuant to Clause 8.1 (as the same may be adjusted
          pursuant to Clause 8.2); or

10.1.2    a firm of independent chartered accountants pursuant to Clause 8.2,

          shall be prima facie evidence for the Security Agent, the Lenders, any
          receiver and manager of the Owner, any Substitute and any Additional
          Obligor that the

                                       11
<Page>

          Contractor has waived and abandoned all claims arising out of or in
          connection with the Construction Contract prior to the date of the
          Default Notice to which such statements relate other than those
          disclosed in such statements.

11.       SUSPENSION OF WORKS

11.1      At any time during any Standstill Period, but before the Security
          Agent issues a Step-in Notice or a Novation Notice, the Security Agent
          may by notice to the Contractor request the Contractor to suspend the
          performance of its obligations under the Construction Contract.

11.2      Immediately after receipt of such a notice the Contractor is obliged
          to suspend the Works, other than the performance of all obligations in
          connection with protection and maintenance of the Works, until:

11.2.1    it receives payment of all amounts due and payable from the Owner to
          the Contractor under the Construction Contract (including amounts
          verified under Clause 8) plus any amounts due and payable from the
          date of the Default Notice to the date on which Security Agent gave
          notice of the suspension (or satisfactory payment security for such
          amounts); or

11.2.2    it receives a Step-in Notice or a Novation Notice; or

11.2.3    the Contractor and the Security Agent otherwise agree; or

11.2.4    the applicable Standstill Period expires and another Standstill Period
          has not become effective.

11.3      If the Contractor receives payment in accordance with Clause 11.2.1,
          without prejudice to Clause 20, any right of suspension or termination
          suspended by virtue of Clauses 6 or 7 shall be of no further effect
          and the Contractor shall not be entitled to present a Petition,
          suspend or terminate the Construction Contract by virtue of any act,
          omission or circumstance prior to the date for such payment.

                                       12
<Page>

                                     PART 4
                           STEP-IN AND STEP-OUT RIGHTS

12.       STEP-IN NOTICE

12.1      At any time:

12.1.1    notwithstanding any rights of the Security Agent or the Contractor
          pursuant to Clause 6, on or after the occurrence of a default by the
          Owner under Clause 24.2 of the Construction Contract (whilst the same
          is continuing unremedied or unwaived) until the Revival Date (if any);

12.1.2    on or after the service of a notice of enforcement of the security
          constituted by the Security Document over the Owner's right, title,
          benefit and interest in the Construction Contract until the Revival
          Date (if any); or

12.1.3    during any Standstill Period,

          the Security Agent may give notice (a "STEP-IN NOTICE") in writing to
          the Contractor in respect of any one of:

          (a)  itself;

          (b)  any receiver, manager or administrative receiver of the Owner
               appointed under the Security Document; or

          (c)  a company substantially the whole of whose issued share capital
               is owned by the Security Agent and/or any one or more of the
               Lenders,

          (each an "ADDITIONAL OBLIGOR"), stating that the Additional Obligor is
          to become a party to the Construction Contract and this Agreement in
          accordance with the terms hereof.

13.       CONSENT OF THE CONTRACTOR

13.1      A Step-in Notice shall not take effect unless approved by the
          Contractor save that the Contractor shall only be entitled to withhold
          its approval to a Step-in Notice where reasonable in accordance with
          Clause 13.2 and such approval shall be deemed to be given in the
          absence of a response from the Contractor, within five days after
          service of a Step-in Notice by the Security Agent.

13.2      Withholding approval of a Step-in Notice shall only be considered to
          be reasonable if the Additional Obligor named therein:

                                       13
<Page>

13.2.1    is not of sound financial standing or is not guaranteed by a person or
          persons of sound financial standing; or

13.2.2    does not have the legal capacity, power and authorisation to become a
          party to and perform the obligations of the Owner under the
          Construction Contract.

14.       ASSUMPTION

          If the Contractor approves a Step-in Notice pursuant to Clause 13 and
          the Additional Obligor named therein executes and delivers to the
          Contractor (with a copy thereof to the other parties to this
          Agreement) a duly completed Additional Obligor Accession Memorandum in
          substantially the form set out in the First Schedule hereto, then such
          Additional Obligor shall become a party to the Construction Contract
          and this Agreement on and from the date of execution and delivery of
          such Accession Memorandum (the "ASSUMPTION DATE").

15.       RIGHTS AND OBLIGATIONS ON ASSUMPTION

15.1      Upon an Additional Obligor becoming a party hereto and to the
          Construction Contract pursuant to Clause 14, then such Additional
          Obligor shall, on and from the Assumption Date and for so long as such
          Additional Obligor remains a party hereto and to the Construction
          Contract, be:

15.1.1    jointly and severally entitled to exercise and enjoy the rights,
          benefits, powers and discretions expressed to be assumed by or granted
          to the Owner under the Construction Contract, Advance Payment,
          Performance and Defects Liability Period Guarantees and Parent Company
          Guarantee;

15.1.2    entitled to exercise and enjoy the rights, benefits, powers and
          discretions expressed to be assumed by or granted to an Additional
          Obligor under this Agreement, Advance Payment, Performance and Defects
          Liability Period Guarantees and Parent Company Guarantee;

15.1.3    subject to Clause 10, jointly and severally liable with the Owner for
          the payment of all sums due from the Owner under the Construction
          Contract as at the Assumption Date and for the performance of all of
          the Owner's obligations under the Construction Contract arising on or
          after the Assumption Date; and

15.1.4    liable for the performance of the obligations expressed to be assumed
          by an Additional Obligor under this Agreement.

15.2      If an Additional Obligor becomes a party hereto and to the
          Construction Contract pursuant to Clause 14, then the Contractor shall
          owe its obligations under the Construction Contract to the Owner and
          such Additional Obligor jointly PROVIDED THAT:

                                       14
<Page>

15.2.1    subject to Clause 15.2.2, the receipt of, or performance by the
          Contractor in favour of, either such Additional Obligor or the Owner
          shall be a good discharge of the Contractor; and

15.2.2    the Security Agent shall be entitled at any time by notice in writing
          to the Contractor to direct (such direction being binding on the
          Contractor and the Owner) that, at all times thereafter whilst such
          Additional Obligor remains a party to the Construction Contract and
          subject to any further notice from the Security Agent, such Additional
          Obligor shall be solely entitled to make any decisions, to give any
          directions, approvals or consents or otherwise to deal with the
          Contractor under the Construction Contract.

15.3      If an Additional Obligor becomes a party hereto and to the
          Construction Contract pursuant to Clause 14, then:

15.3.1    any amount due from the Owner to the Contractor under the Construction
          Contract on the Assumption Date and notified to such Additional
          Obligor prior to the Assumption Date shall be paid to the Contractor
          by the Additional Obligor as soon as reasonably practicable without
          undue delay and in any event within thirty days after the Assumption
          Date, failing which the Contractor shall be entitled to exercise its
          rights under the Construction Contract in respect of the amount so due
          and unpaid; and

15.3.2    subject to payment by the Additional Obligor under Clause 15.3.1 and
          without prejudice to Clause 20, any right of suspension or termination
          suspended by virtue of Clauses 6 or 7 shall be of no further effect
          and the Contractor shall not be entitled to present a Petition,
          suspend or terminate the Construction Contract by virtue of any act,
          omission or circumstance prior to the Assumption Date.

16.       STEP-OUT

          An Additional Obligor may, at any time, by giving not less than sixty
          days prior written notice to the Contractor terminate its obligations
          to the Contractor under the Construction Contract, in which event such
          Additional Obligor shall, upon the expiry of such notice, cease to be
          a party hereto and to the Construction Contract and shall be released
          from all obligations hereunder and under the Construction Contract
          except for any obligation which has arisen on or before the expiry of
          such notice.

                                       15
<Page>

                                     PART 5
                                    NOVATION

17.       NOVATION PROPOSAL

          At any time:

17.1.1    on or after the occurrence of a default by the Owner under Clause 24.2
          of the Construction Contract (whilst the same is continuing unremedied
          or unwaived) until the Revival Date (if any);

17.1.2    on or after the service of a notice of enforcement of the security
          constituted by the Security Document over the Owner's right, title,
          benefit and interest in the Construction Contract until the Revival
          Date (if any);

17.1.3    during any Standstill Period; or

17.1.4    during any Step-in Period,

          the Security Agent may give notice (a "NOVATION NOTICE") in writing to
          the Contractor stating that it wishes another person (a "SUBSTITUTE")
          to assume the obligations of the Owner under the Construction Contract
          and specifying a date falling between the 28th and 35th day (both
          dates inclusive) after the date of such Novation Notice, on which such
          assumption is to be effective (the "EFFECTIVE DATE").

18.       CONSENT OF THE CONTRACTOR

18.1      A Novation Notice shall not take effect unless approved by the
          Contractor save that the Contractor shall only be entitled to withhold
          its approval to a Novation Notice where reasonable in accordance with
          Clause 18.2 and such approval shall be deemed to be given, in the
          absence of a response from the Contractor, within five days after
          service of a Novation Notice by the Security Agent.

18.2      Withholding approval of a Novation Notice shall only be considered
          reasonable if the Substitute named therein:

18.2.1    is not of sound financial standing or is not guaranteed by a person or
          persons of sound financial standing; or

18.2.2    does not have the legal capacity, power and authorisation to become a
          party to and perform the obligations of the Owner under the
          Construction Contract.

19.       NOVATION

          If the Contractor approves a Novation Notice pursuant to Clause 18 and
          the Substitute named therein executes and delivers to the Contractor
          (with a copy

                                       16
<Page>

          thereof to the other parties to this Agreement) a duly completed
          Substitute Accession Memorandum in substantially the form set out in
          the Second Schedule hereto, then:

19.1.1    on and from the Effective Date specified in such Novation Notice, such
          Substitute shall:

          (a)  become a party to the Construction Contract in place of the Owner
               who shall be immediately released from its obligations under, and
               cease to be a party to, the Construction Contract and thereafter
               such Substitute shall be treated as if it had originally been
               named as a party thereto in place of the Owner with the rights,
               benefits, powers, discretions and obligations of the Owner
               thereunder;

          (b)  be entitled to exercise and enjoy the rights, benefits, powers
               and discretions expressed to be in favour of a Substitute under
               this Agreement; and

          (c)  be liable for the performance of the obligations expressed to be
               owing by a Substitute under this Agreement,

          and the Contractor shall owe its obligations (including, without
          limitation, any undischarged liability in respect of any loss or
          damage suffered or incurred by the Owner prior to the Effective Date)
          under the Construction Contract to such Substitute in place of the
          Owner;

19.1.2    any amount due from the Owner to the Contractor under the Construction
          Contract on the Effective Date and notified to such Substitute prior
          to the Effective Date shall be paid to the Contractor by the
          Substitute as soon as reasonably practicable without undue delay and
          in any event within thirty days after the Effective Date, failing
          which the Contractor shall be entitled to exercise its rights under
          the Construction Contract in respect of the amount so due and unpaid;

19.1.3    subject to payment by the Substitute under Clause 19.1.2 any right of
          suspension or termination suspended by virtue of Clauses 6 or 7 shall
          be of no further effect and the Contractor shall not be entitled to
          present a Petition, suspend or terminate the Construction Contract by
          virtue of any act, omission or circumstance prior to such Effective
          Date and, if any Additional Obligor is a party to or has any
          obligations under the Construction Contract on the Effective Date,
          such Additional Obligor shall cease to be a party thereto and shall be
          discharged from all obligations thereunder.

                                       17
<Page>

                                     PART 6
                               REVIVAL OF REMEDIES

20.       REVIVAL OF REMEDIES

20.1      If a Default Notice has been given, the grounds for that notice are
          continuing and either:

20.1.1    the relevant Standstill Period expires and either the Security Agent
          has not agreed to pay the Contractor's costs as contemplated in
          Clause 6.3, 6.4, 7.2 and/or 7.3 (as the case may be) or no Additional
          Obligor or Substitute becomes a party hereto; or

20.1.2    an Additional Obligor becomes a party hereto but the Step-in Period
          relating to such Additional Obligor ends without a Substitute becoming
          a party hereto,

          then, on and from the date (the "REVIVAL DATE") such Standstill Period
          or, as the case may be, such Step-in Period expires, the Contractor
          shall be entitled to:

          (a)  act upon any and all grounds for suspension or termination
               available to it under the Construction Contract in respect of
               breaches not remedied or waived Provided that no account shall be
               taken of the number of days from the date such Default Notice was
               given to such Revival Date (both dates inclusive) when
               determining any time for the exercise of the Contractor's rights
               or the time for the service of any notice by the Contractor under
               the Construction Contract;

          (b)  pursue any and all claims and exercise any and all remedies it
               may have under the Construction Contract against the Owner or the
               Additional Obligor; and

          (c)  (if and to the extent that it is then entitled to do so under the
               Construction Contract) present a Petition.

                                       18
<Page>

                                     PART 7
                  CONSIDERATION AND THE GUARANTOR'S OBLIGATIONS

21.       CONSIDERATION

          The Contractor acknowledges that the Lenders will make advances and
          give other financial accommodation to the Owner in consideration of,
          inter alia, the agreements and undertakings given by the Contractor in
          this Agreement and that the execution of this Agreement is a condition
          precedent to such financial accommodation being made available under
          the Finance Documents.

22.       GUARANTOR'S CONTINUING OBLIGATIONS

          The Guarantor acknowledges and confirms to the Owner, the Security
          Agent, each Substitute and each Additional Obligor and their
          respective successors and assigns that:

22.1.1    its obligations under the Parent Company Guarantee shall continue in
          full force and effect notwithstanding:

          (a)  any Additional Obligor becoming, or ceasing to be, a party to the
               Construction Contract in accordance with the terms hereof; or

          (b)  any Substitute becoming a party to the Construction Contract in
               place of the Owner in accordance with the terms hereof; and

22.1.2    if any Additional Obligor or Substitute becomes a party to the
          Construction Contract pursuant to the terms hereof, then such
          Additional Obligor or, as the case may be, Substitute shall be
          entitled to make claims and otherwise exercise the rights, powers and
          discretions of the Owner under the Parent Company Guarantee in
          accordance with the terms thereof.

                                       19
<Page>

                                     PART 8
                                  MISCELLANEOUS

23.       LEGAL AND BINDING OBLIGATIONS

23.1      The Contractor warrants to each of the other parties to this Agreement
          that each of this Agreement and the Construction Contract is its
          legally binding obligation, is within its powers, has been duly
          authorised by it, and does not conflict with any law or agreement to
          which it is a party and that all consents and authorisations required
          by it in relation to this Agreement and the Construction Contract have
          been obtained.

23.2      The Guarantor warrants to each of the other parties to this Agreement,
          each Substitute and each Additional Obligor that each of this
          Agreement and the Parent Company Guarantee is its legally binding
          obligation, is within its powers, has been duly authorised by it, and
          does not conflict with any law or agreement to which it is a party and
          that all consents and authorisations required by it in relation to
          this Agreement and the Parent Company Guarantee have been obtained.

24.       STANDARD OF WORK

          Each of the Guarantor and the Contractor confirms that the Contractor
          will perform the Works in accordance with the Construction Contract.

25.       ACCESS TO SITE AND INFORMATION

25.1      The Contractor agrees that the Security Agent, the Lenders, and their
          advisers, and representatives shall be entitled to have access to the
          Site during the term of the Construction Contract, at all reasonable
          times upon reasonable notice, provided that the Security Agent, the
          Lenders, and their advisers and representatives do not impede the
          performance of the Contractor and that they comply with health and
          safety regulations applicable to the construction of Works on the
          Site.

25.2      The Contractor agrees to provide to the Security Agent, the Lenders,
          and their advisers and representatives copies of all information which
          the Owner is entitled to receive under the Construction Contract or
          requested by proposed Additional Obligor or Substitute, in each case
          upon receiving written notice from the Security Agent.

26.       FORCE MAJEURE

          The Contractor undertakes not to terminate the Construction Contract
          under section 26.7 of the Construction Contract if and to the extent
          that the Security

                                       20
<Page>

          Agent has provided to the Contractor an undertaking in respect of its
          costs arising from the expiry of the 230 days period referred to
          therein.

27.       INSURANCE

27.1      The Contractor warrants that it has and will continue to maintain in
          full force and effect the insurance coverages required to be taken out
          by the Contractor in accordance with the Construction Contract. The
          Contractor shall ensure that at all times it shall comply with the
          terms of the Owner's insurance policies taken out in accordance with
          the Construction Contract and shall not act or omit to act in a manner
          that would breach or invalidate such policies.

27.2      The Contractor acknowledges that the Owner shall control all claims
          under the insurance policies required to be taken out by the Owner
          under the Construction Contract. The Contractor shall pay to the
          Insurance Account defined in the Facility Agreement all insurance
          proceeds (other than insurance proceeds relating to third party claims
          against the Contractor and any proceeds from the insurance policies
          required to be maintained by the Contractor under the Construction
          Contract) received by the Contractor in respect of losses affecting
          the Works, which shall be distributed in accordance with the terms of
          the Facility Agreement by the Owner.

28.       RESTRICTIONS ON OWNER'S RIGHTS AND OBLIGATIONS

          The Contractor acknowledges that the rights and obligations of the
          Owner are limited by the terms of the Facility Agreement including
          (without limitation) in relation to the issue of the Acceptance
          Certificate (as defined in the Construction Contract), changes to the
          design, specification or configuration of the Plant, amendments to the
          Construction Contract, application of insurance proceeds, and
          satisfaction of performance tests each of which may require the
          consent of the Lenders and/or their designated representatives or
          agent provided that such acknowledgment shall not relieve the Owner of
          its obligations under the Construction Contract.

29.       ASSIGNMENT

          Each of the Contractor and the Guarantor agree not to assign, transfer
          or novate its rights or obligations under the Construction Contract,
          Advance Payment, Performance and Defects Liability Period Guarantees,
          Parent Company Guarantee or this Agreement without the prior written
          consent of the Security Agent.

                                       21
<Page>

30.       BENEFIT

          The benefit of this Agreement (including, without limitation, all
          warranties and undertakings and any sums received by the Security
          Agent pursuant to this Agreement) shall be held by the Security Agent
          upon and subject to the terms of the Security Pooling Agreement for
          the benefit of the Lenders.

31.       NO ASSIGNMENT

          No party to this Agreement shall assign or transfer any part of its
          respective rights or obligations under this Agreement without the
          consent of the others provided that the Security Agent may assign or
          transfer its rights and obligations to a successor Security Agent
          under the Security Document without the consent of the other parties
          to this Agreement.

32.       NO WAIVER

          No failure or delay by the Security Agent in exercising any right
          under this Agreement shall operate as a waiver thereof or prejudice
          any other or further exercise by the Security Agent of any of its
          rights or remedies under this Agreement, the Construction Contract,
          the Advance Payment, Performance and Defects Liability Period
          Guarantees or the Parent Company Guarantee. The rights and remedies
          under this Agreement may be exercised as often as necessary and are
          cumulative and not exclusive of any rights or remedies provided by
          law.

33.       COUNTERPARTS

          This Agreement may be executed in any number of counterparts, all of
          which when taken together shall constitute one and the same
          instrument.

34.       NO OTHER CLAIMS

          The Contractor and the Guarantor separately confirm to the Security
          Agent that it has not received notice of any other assignment or
          charge by the Owner to any third party of any of its right, title,
          benefit or interest under, respectively, the Construction Contract,
          the Advance Payment, Performance and Defects Liability Period
          Guarantees or the Parent Company Guarantee.

35.       NO SET-OFF

          The Contractor and the Guarantor each agrees with the Security Agent
          that it will not exercise any right of set-off or counterclaim it may
          have against the Owner which would reduce any monies payable by the
          Contractor under the Construction Contract or, as the case may be, by
          the Guarantor under the Parent Company Guarantee except where the
          right of set-off or counterclaim is

                                       22
<Page>

          contained within the Construction Contract or, as the case may be, the
          Parent Company Guarantee itself.

36.       PAYMENT OF MONIES

36.1      The Contractor and the Guarantor each agrees with the Security Agent
          that it will pay all monies due from the Contractor under the
          Construction Contract or, as the case may be, by the Guarantor under
          the Parent Company Guarantee to the Revenue Account established
          pursuant to clause 9.2 of the Facility Agreement unless and until,
          after the date of enforcement of the Security Document, the Security
          Agent otherwise directs, whereupon the Contractor or, as the case may
          be, the Guarantor shall comply with the directions of the Security
          Agent.

36.2      Where a payment is made by the Security Agent to the Contractor under
          this Agreement, the Owner acknowledges that the amount of the payment
          shall be treated as if it was an amount borrowed from the Lenders
          under the Facility Agreement and accordingly the payment shall be
          governed by the provisions of the Facility Agreement.

37.       CONFIDENTIALITY

          The Security Agent for and on behalf of the Lenders undertakes to the
          Contractor to be bound to observe, mutatis mutandis, the terms of
          article 27 of the Construction Contract with respect to any
          information or document referred to in article 27 of the Construction
          Contract which shall come into its possession pursuant to this
          Agreement, the Construction Contract, the Finance Documents or the
          Security Document Provided that it is hereby agreed that the Security
          Agent and the Lenders shall be free to disclose any such information
          or document to one another or to any actual or potential assignee,
          transferee or sub-participant of any Lender who shall have been made
          aware of the terms of this Clause and article 27 of the Construction
          Contract.

38.       NOTICES

38.1      Save as otherwise expressly provided in this Agreement, all notices or
          other communications which are required or permitted hereunder shall
          be in writing and sufficient if delivered personally or sent by
          registered or certified mail or telecopier addressed as follows:

                                       23
<Page>

38.1.1    if to the Owner:

               Address:            Niedergorner Damm 1
                                   D-39596 Arneburg

               Attention:          Mr Harald Gatzke
               Telecopier No:      +49 393 21 50322


38.1.2    if to the Contractor:

               Address:            Sonnenwall 85
                                   D-47051 Duisburg

               Attention:          Mr Norbert Kreutzer
               Telecopier No:      +49 203 3091048

38.1.3    if to the Guarantor:

               Address:            Guiollettstra beta e 44-48
                                   60325 Frankfurt am Main
                                   Germany

               Attention:          Mr Ernst Ullrich
               Telecopier No:      +49 69 7135 2180

38.1.4    if to the Security Agent:

               Address:            Am Tucherpark 1 (FPA1)
                                   D-80538 Munchen
               Attention:          Marc Thumecke
               Telecopier No:      +49 89 378 41518

38.1.5    if to any Additional Obligor or Substitute, to the address or
          telecopier number specified in the Additional Obligor Accession
          Memorandum delivered by it pursuant to Clause 14 or, as the case may
          be, the Substitute Accession Memorandum delivered by it pursuant to
          Clause 19.

38.2      All notices shall be deemed delivered upon receipt.

38.3      Any party may by notice of at least fifteen days to the other party
          change the address and/or addresses to which such notice and
          communications to it are to be delivered or mailed.

                                       24
<Page>

39.       GOVERNING LAW

39.1      This Agreement shall be governed by, and construed in accordance with,
          the laws of the Federal Republic of Germany.

39.2      The exclusive place of jurisdiction to hear and determine any suit,
          action or proceeding, and to settle any disputes which may arise out
          of or in connection with this Agreement is Munich. The Lenders and the
          Security Agent may, however, also commence proceedings before any
          other court in which assets of the Owner are located. Mandatory places
          of jurisdiction remain unaffected.

                                       25
<Page>

                                   SCHEDULE 1
                     ADDITIONAL OBLIGOR ACCESSION MEMORANDUM

To:            RWE INDUSTRIE-LOSUNGEN GMBH

               Sonnenwall 85
               D-47051 Duisburg

               For the attention of Mr Norbert Kreutzer

Copied to:     ZELLSTOFF STENDAL GMBH

               Niedergorner Damm l
               D-39596 Arneburg

               For the attention of the Secretary

               RWE SOLUTIONS AG

               Guiollettstra(beta)e 44-48
               60325 Frankfurt am Main

               For the attention of Mr Ernst Ullrich

               BAYERISCHE HYPO-UND VEREINSBANK AG

               Am Tucherpark 1 (FPA1)
               D-80538 Munchen

               For the attention of the Secretary

From:          [Additional Obligor]

                     ADDITIONAL OBLIGOR ACCESSION MEMORANDUM

We [INSERT NAME OF ADDITIONAL OBLIGOR] refer to the construction contract dated
[-] and originally made between Zellstoff Stendal GmbH as the Owner and
Zellstoff Stendal GmbH as the Contractor (the "CONSTRUCTION CONTRACT") and the
direct agreement dated [-] and originally made between the Zellstoff Stendal
GmbH as Owner, RWE Industrie-Losungen GmbH as Contractor, RWE Solutions AG as
Guarantor and Bayerische Hypo-und Vereinsbank AG as Security Agent (the "DIRECT
AGREEMENT"). Terms defined in the Construction Contract or, if not defined
therein, in the Direct Agreement shall have the same meanings in this Accession
Memorandum.

                                       26
<Page>

1.        We hereby confirm that we are an Additional Obligor pursuant to Part 4
          of the Direct Agreement.

2.        We acknowledge and agree that, upon and by reason of our execution and
          delivery of this Additional Obligor Accession Memorandum, we will
          thereby forthwith become a party to the Construction Contract jointly
          and severally with the Owner and a party to the Direct Agreement as an
          Additional Obligor and, accordingly, shall have the rights, benefits,
          powers, discretions and obligations of the Owner under the
          Construction Contract and an Additional Obligor under the Direct
          Agreement.

3.        Our address, telecopier and telephone number for the purpose of
          receiving communications under the Construction Contract and the
          Direct Agreement are as follows:

          Attention:

          Address:

          Telecopier No.:

4.        This Accession Memorandum shall be governed by, and construed in
          accordance with, the laws of the Federal Republic of Germany.

[INSERT NAME OF ADDITIONAL OBLIGOR]

By:
               --------------------                 --------------------
               Name:                                Name:
               Title:                               Title:

Address:

                                       27
<Page>

                                   SCHEDULE 2
                         SUBSTITUTE ACCESSION MEMORANDUM

To:            RWE INDUSTRIE-LOSUNGEN GMBH

               Sonnenwall 85
               D-47051 Duisburg

               For the attention of Mr Norbert Kreutzer

Copied to:     ZELLSTOFF STENDAL GMBH

               Niedergorner Damm l
               D-39596 Arneburg

               For the attention of the Secretary

               RWE SOLUTIONS AG

               Guiollettstra(beta)e 44-48
               60325 Frankfurt am Main

               For the attention of Mr Ernst Ullrich

               BAYERISCHE HYPO-UND VEREINSBANK AG

               Am Tucherpark 1 (FPA1)
               D-80538 Munchen

               For the attention of the Secretary

From:          [Additional Obligor]

                         SUBSTITUTE ACCESSION MEMORANDUM

We [INSERT NAME OF SUBSTITUTE] refer to the construction contract dated [-] and
originally made between Zellstoff Stendal GmbH as Owner and RWE
Industrie-Losungen GmbH as Contractor (the "CONSTRUCTION CONTRACT") and the
direct agreement dated [-] and originally made between the Zellstoff Stendal
GmbH as Owner, RWE Industrie-Losungen GmbH as Contractor, RWE Solutions AG as
Guarantor and Bayerische Hypo-und Vereinsbank AG as Security Agent (the "DIRECT
AGREEMENT"). Terms defined in the Construction Contract or, if not defined
therein, in the Direct Agreement shall have the same meanings in this Substitute
Accession Memorandum.

1.        We hereby confirm that we are a Substitute pursuant to Part 5 of the
          Direct Agreement.

                                       28
<Page>

2.        We acknowledge and agree that, upon and by reason of our execution and
          delivery of this Substitute Accession Memorandum, we will thereby
          forthwith become a party to the Construction Contract as the Owner and
          the Direct Agreement as a Substitute and, accordingly shall have the
          rights, benefits, powers, discretions and obligations of the Owner
          under the Construction Contract and a Substitute under the Direct
          Agreement.

3.        Our address, telecopier and telephone number for the purpose of
          receiving communications under the Construction Contract and the
          Direct Agreement are as follows:

          Attention:

          Address:

          Telecopier No.:

4.        This Accession Memorandum shall be governed by, and construed in
          accordance with, the laws of the Federal Republic of Germany.

[INSERT NAME OF SUBSTITUTE] ACTING BY

By:
               --------------------                 --------------------
               Name:                                Name:
               Title:                               Title:

Address:

                                       29
<Page>

AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written:

THE OWNER

ZELLSTOFF STENDAL GMBH


By:
               --------------------                 -----------------------
               Name:                                Name:
               Title:                               Title:

Address:


THE CONTRACTOR

RWE INDUSTRIE-LOSUNGEN GMBH


By:
               --------------------                 --------------------
               Name:                                Name:
               Title:                               Title:
Address:

               Federal Republic of Germany


THE GUARANTOR

RWE SOLUTIONS AG..


By:
               --------------------                 --------------------
               Name:                                Name:
               Title:                               Title:

Address:

<Page>

THE SECURITY AGENT

BAYERISCHE HYPO- UND VEREINSBANK AG


By:
               --------------------                 --------------------
               Name:                                Name:
               Title:                               Title:

Address:       Am Tucherpark 16
               80538 Munchen
               Federal Republic of Germany

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2
                               COMMERCIAL EXHIBITS
                                TABLE OF CONTENTS

        1.  Form of Notice of Commencement Date

        2.  Schedule of Prices

        3.  Intentionally Omitted

        4.  Form of Down Payment, Performance and Warranty Bank Guarantee

        5.  Form of Extended Defects Liability Period Bank Guarantee

        6.  Insurance

        7.  Intentioanally Omitted

        8.  Key Persons List

        9.  Payment Milestone Schedule

        10. Form of Parent Company Guarantee

<Page>
[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2
                               COMMERCIAL EXHIBITS

                     1. FORM OF NOTICE OF COMMENCEMENT DATE

<Page>
[RWE SOLUTIONS LOGO]

                                   ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                              COMMERCIAL EXHIBITS

                     1. FORM OF NOTICE OF COMMENCEMENT DATE

                                     (Date)

To:      RWE Industrie-Losungen GmbH
         Sonnenwall B5
         D 47051 Dulsburg, Germany
         Attention:

To:      Zellstoff Stendal GmbH
         Niedergorner Damm 1
         D-39596 Ameburg, Germany
         Attention:

Reference is made to the Contract for Engineering, Design, Procuremnt,
Construction, Erection and Start Up for the Stendal Pulp Mill Project dated
(Date of Signature) between RWE Industrie-Losungen GmbH (the "Contractor") and
Zellstoff Stendal GmbH (the "Owner").

Contractor and Owner, respectively, hereby certify that the Commencement Date
(as defined in the Contract) occurred on ___________ (Date of Commencement) in
accordance with Article 32 of the Contract.

Zellstoff Standal GmbH                  RWE Industrie-Losungen GmbH

Date:                                   Date:
      ------------------------                ------------------------

By:                                     By:
      ------------------------                ------------------------

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                               COMMERCIAL EXHIBITS

                              2.Schedule of Prices

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                               Schedule of Prices

<Table>
<Caption>
                                                       Prices
Systems/Non-Systems Departments                        in EUR
<S>                                                    <C>
General Plant                                            *
Water Treatment System                                   *
Effluent Tratment System                                 *
Power Boiler System                                      *
Turbine Generator System                                 *
Wood Handling System                                     *
Fiber Line - Cooking/Brown Stock/Bleaching               *
Fiber Line - Pulp Dewatering/Drying/Baling               *
Chlorine Dioxide System                                  *
Evaporator System                                        *
Recovery Boiler System                                   *
Recausticizing                                           *
Lime Kiln System                                         *
NCGD System                                              *
Tall Oil System                                          *
Administration and Workshop Building                     *
DCS System                                               *
Cooling Tower System                                     *
Underground Installations                                *
Power Distribution System                                *
Emergency Power System                                   *
Oxygen Plant                                             *
Roads and Paved Areas                                    *
Weighbridges and Guardhouse                              *
Pipe Bridges                                             *
Fuel Oil Storage                                         *
Railway                                                  *
                                                       -----------
Grand Total:                                           716,000,000
</Table>

----------
* These prices may be broken down as required for invoicing.
* Mercer has made an application to the SEC to redact this information. The
  information has been filed separately with the SEC.

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                               COMMERCIAL EXHIBITS

                            3. Intentionally Omitted

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                               COMMERICAL EXHIBITS

        4. FORM OF DOWN PAYMENT, PERFORMANCE AND WARRANTY BANK GUARANTEE

<Page>

                                                            APPENDIX 2 EXHIBIT 4

AGREED FORM OF ADVANCE PAYMENT, PERFORMANCE AND DEFECTS LIABILITY PERIOD
GUARANTEE

Zellstoff Stendal GmbH
Niedergorner Damm 1

D-39596 Arneburg

Guarantee No. (_____)


Dear Sirs:

We refer to the Contract for Design, Engineering, Procurement, Construction,
Erection and Start Up made as of (_____), (the 'Contract') between Zellstoff
Stendal GmbH ('the Owner') and RWE Industrie-Losungen GmbH, Duisburg/Germany
(the 'Contractor') for the Stendal Pulp Mill Project.

In accordance with the Contract terms, the Contractor is required to provide to
the Owner a combined Advance Payment, Performance and Defects Liability Period
Guarantee in the amount of (INSERT AMOUNT EQUAL TO 17% OF CONTRACT PRICE) EURO
(EURO _____).

Certain capitalized terms are used herein with the same meanings given to them
in the Contract, as follows:

     'Expiry of Defects Liability Period Certificate' means the certificate
     issued by Owner to Contractor in the form of either Annex C or Annex D, in
     accordance with section 20.9 of the Contract, certifying that the Expiry of
     the Defects Liability Period (as defined in the Contract) has occurred in
     accordance with, and subject to the conditions (including in the case of a
     certificate in the form of Annex D, the reservation of the Owner's rights
     with respect to certain continuing warranties referenced in Attachment A
     thereto) contained in, Section 20.9 of the Contract.

     'Acceptance Certificate' means the certificate issued by Owner to
     Contractor in the form set out in Annex A to this Guarantee, in accordance
     with section 18.7 of the Contract, confirming that Acceptance (as defined
     in the Contract) has occurred in accordance with, and subject to the
     conditions contained in, Section 18.7 of the Contract.

     'Schedule B Test Certificate' means a certificate issued by Owner to
     Contractor, in accordance with article 19 of the Contract, confirming that
     all conditions to the completion of the Schedule B Test (as defined in the
     Contract) for a System (as defined in the Contract) have been satisfied in
     accordance with, and subject to the conditions contained in, Section 19.6
     of the Contract.

<Page>

     'Direct Agreement' means the agreement dated August 2002 between the Owner,
     Contractor, RWE Solutions AG and Bayerische Hypo-und Vereinsbank AG.

In addition, a reference in this Guarantee to a "day" shall be construed as a
reference to a calendar day.

On behalf of the Contractor, we (INSERT NAME OF BANK) hereby give our guarantee
and irrevocably and unconditionally undertake to pay to you any amount you may
claim (by one or more claims) up to but not exceeding (INSERT AMOUNT EQUAL TO
17% OF CONTRACT PRICE) EURO (EURO _____) upon receipt of your first written
demand to us stating the Contractor is in breach of the Contract and details of
the nature of such breach (which we shall consider to be sufficient and rely on
in full without investigation or inquiry).

This Guarantee is a guarantee (GARANTIE) and not a surety (BURGSCHAFT) in terms
of German law, and, accordingly, the provisions relating to sureties and
contained in the German Civil Code shall not apply to this Guarantee. This
guarantee shall in all respects be a continuing, absolute, unconditional and
irrevocable guarantee. Our obligations hereunder shall be absolute and primary
obligations irrespective of the occurrence of any circumstances which might
otherwise constitute a legal or equitable defence. In particular, the release by
the Owner of any other security granted in connection with the Contract in
fulfillment of the Owner's obligation under any other security agreement to
effect such release shall not in any way affect the obligations of the Guarantor
hereunder.

This Guarantee shall be payable in cash without set-off, deduction or
withholding in whole or in part on your first written demand notwithstanding any
defense, contestation, claims, demands or objections by the Contractor or by any
other party.

We hereby waive any right we may have of first requiring you to pursue your
legal remedies against the Contractor and waive notice of acceptance hereof, of
any action taken or omitted in reliance hereon, of any defaults under the
Contract, and any presentation, demand, protest, or notice of any kind. We
hereby agree that the Contract may be modified, amended and supplemented without
our consent in any manner and agree that no such modification, amendment, or
supplement shall release, affect or impair our liability under this Guarantee.
We further agree that no invalidity, irregularity or unenforceability of the
Contract shall affect or impair our liability under this Guarantee.

Our aggregate maximum liability under this Guarantee is in any case limited to
the sum of (INSERT AMOUNT EQUAL TO 17% OF CONTRACT PRICE) EURO (EURO _____).

This Guarantee shall become effective automatically for an amount of (INSERT
AMOUNT EQUAL TO 8.5% OF THE CONTRACT PRICE) EURO (EURO _____) upon the
deposit in the Contractor's account with (INSERT NAME OF BANK AND ACCOUNT
NUMBER) of the amount of EURO (EURO INSERT AMOUNT EQUAL TO 5% ADVANCED
PAYMENT) in funds immediately available to the Contractor.

This Guarantee shall become effective automatically for an additional amount of
(INSERT AMOUNT EQUAL TO 8.5% OF THE CONTRACT PRICE) EURO (EURO _____) upon the
deposit in the Contractor's account WITh (INSERT NAME OF BANK AND ACCOUNT
NUMBER) of the amount of EURO (EURO INSERT AMOUNT EQUAL TO 5% ADVANCED
PAYMENT) in funds immediately available to the Contractor.

<Page>

This Guarantee shall automatically be reduced to the amount of (INSERT AMOUNT
EQUAL TO 10% OF THE CONTRACT PRICE) EURO (EURO _____) after 45 days from the
earliest of the following daTES:

     (i)    the date of presentation to us by the Contractor of a copy of the
            Acceptance Certificate signed and dated by the Owner in the form set
            out in Annex A to this Guarantee;
     (ii)   the date of presentation to us by the Contractor of a copy of a
            certificate signed by the Owner stating that the conditions for
            reduction of this Guarantee upon Acceptance (as defined in the
            Contract) have been satisfied and that all liquidated damages
            payable on or before such date have been paid to the Owner;
     (iii)  the date of presentation to us by the Contractor of the original of
            a certificate or declaration of the Contractor, signed by the
            Contractor, that the works are deemed accepted in accordance with
            section 18.10 of the Contract and that all liquidated damages
            payable on or before such date have been paid to the Owner, such
            certificate or declaration to be accompanied by a statement of one
            of the following audit companies PriceWaterhouseCoopers, KPMG, Ernst
            & Young or Deutsche Treuarbeit, confirming that the statements of
            the Contractor, that the works are deemed to be accepted in
            accordance with section 18.10 of the Contract have been made in
            accordance with the terms and conditions of the Contract and that
            all liquidated damages payable on or before such date have been paid
            to the Owner.

This Guarantee shall automatically be further reduced on the presentation of
copies of the seventeen (17) Schedule B Test Certificates in four successive
steps as follows:

     (i)    by an amount equal to (1.25% OF THE CONTRACT PRICE) EURO
            (EURO _____) 65 days after the dATE of presentation to us by the
            Contractor of copies of four Schedule B Test Certificates in the
            form set out in Annex B to this Guarantee signed and dated by the
            Owner in relation to four different Systems and a certificate to us
            from the Contractor that it has not previously presented copies or
            originals of such Schedule B Test Certificates;
     (ii)   by an amount equal to (1.25% OF THE CONTRACT PRICE) EURO
            (EURO _____) 65 days after the dATE of presentation to us by the
            Contractor of copies of four Schedule B Test Certificates in the
            form set out in Annex B to this Guarantee signed and dated by the
            Owner in relation to four different Systems and a certificate to us
            from the Contractor that it has not previously presented copies or
            originals of such Schedule B Test Certificates;
     (iii)  by an amount equal to (1.25% OF THE CONTRACT PRICE) EURO
            (EURO _____) 65 days after the dATE of presentation to us by the
            Contractor of copies of four Schedule B Test Certificates in the
            form set out in Annex B to this Guarantee signed and dated by the
            Owner in relation to four different Systems and a certificate to us
            from the Contractor that it has not previously presented copies or
            originals of such Schedule B Test Certificates; and
     (iv)   by an amount equal to (1.25% OF THE CONTRACT PRICE) EURO
            (EURO _____) 65 days after the dATE of presentation to us by the
            Contractor of copies of five Schedule B Test Certificates in the
            form set out in Annex B to this Guarantee signed and dated by the
            Owner in relation to five different Systems and a certificate to us
            from the Contractor that it has not previously presented copies or
            originals of such Schedule B Test Certificates,

     provided that, in respect of any of the reductions set out in (i)-(iv)
     above, such reductions may also take place on the date falling 65 days
     after:

<Page>

     (v)    the date of presentation to us by the Contractor of a copy of a
            certificate signed by the Owner stating that the conditions for
            reduction of this Guarantee upon the satisfaction of the relevant
            Schedule B Tests have been satisfied and that all liquidated damages
            payable on or before such date in respect of the relevant Schedule B
            Tests have been paid to the Owner; or
     (vi)   the date of presentation to us by the Contractor of the original of
            a certificate or declaration of the Contractor, signed by the
            Contractor, that the relevant number of Schedule B Tests set out in
            (i)-(iv) above (in respect of which a reduction in this Guarantee
            has not previously been claimed) have been deemed accepted in
            accordance with section 19.9 of the Contract and that all liquidated
            damages payable on or before such date have been paid to the Owner,
            such certificate or declaration to be accompanied by a statement of
            one of the following audit companies PriceWaterhouseCoopers, KPMG,
            Ernst & Young or Deutsche Treuarbeit, confirming that the statements
            of the Contractor, that the relevant Schedule B Tests are deemed to
            be accepted in accordance with section 19.9 of the Contract, have
            been made in accordance with the terms and conditions of the
            Contract, a reduction in this Guarantee has not previously been
            claimed in respect of such Schedule B Tests and that all liquidated
            damages payable on or before such date have been paid to the Owner.

     This Guarantee will expire on the first to occur of:

             (1) presentation to us by the Contractor of a copy of the original
             Expiry of Defects Liability Period Certificate in the form set out
             in Annex C to this Guarantee signed and dated by the Owner to
             reflect the actual date of the expiry of the Defects Liability
             Period;

             (2) presentation to us by the Contractor of a copy of the original
             Expiry of Defects Liability Period Certificate in the form set out
             in Annex D to this Guarantee signed and dated by the Owner to
             reflect the actual date of the expiry of the Defects Liability
             Period together with a confirmation to us by the Owner that it has
             received a guarantee in an amount equal to five percent (5%) of the
             aggregate value of all items with respect to which the Contractor
             has continuing warranty obligations under the Contract;

             (3) (_____);

after which date this Guarantee shall become null and void unless your written
demand under this Guarantee has reached us at (_____) before 5:00 p.m. German
time on such date.

You shall return this Guarantee to us not later than ten (10) days following the
date of its expiry provided that no demands are then outstanding.

The rights under this Guarantee may not be assigned by you or your permitted
assigns or transferees under the Direct Agreement without our prior written
approval, such approval not to be unreasonably withheld or delayed; provided
that no approval shall be required for the assignment of the rights under this
Guarantee to your lenders by way of security or an additional obligor or
substitute appointed under the Direct Agreement and that in case of such

<Page>

assignment, we will provide an acknowledgement thereof on such terms as the
assignee may reasonably require.

This Guarantee shall be governed by and construed in accordance with the laws of
Germany.

<Page>

ANNEX A

                         FORM OF ACCEPTANCE CERTIFICATE

To:     RWE Industrie-Losungen GmbH
        Sonnenwall 85
        D 47051 Duisburg, Germany

        Attention:


From:   Zellstoff Stendal GmbH
        Niedergorner Damm 1
        D 39596 Arneburg, Germany

        Reference is made to the Contract for Engineering, Procurement,
Construction, Erection, Start-up and Testing of a Kraft Pulp Mill dated [-] (the
"Contract") between RWE Industrie-Losungen GmbH ("Contractor") and Zellstoff
Stendal GmbH ("Owner").

        This is the Acceptance Certificate referred to in Section 18.7 of the
Contract. The Owner hereby confirms that Acceptance (as defined in the Contract)
has occurred on [-] in accordance with, and subject to the conditions contained
in, Section 18.7 of the Contract.


                                                    Zellstoff Stendal GmbH


                                                    ---------------------------
                                                    Name:
                                                    Title:

<Page>

ANNEX B

                       FORM OF SCHEDULE B TEST CERTIFICATE

To:     RWE Industrie-Losungen GmbH
        Sonnenwall 85
        D 47051 Duisburg, Germany

        Attention:

From:   Zellstoff Stendal GmbH
        Niedergorner Damm 1
        D 39596 Arneburg, Germany

        Reference is made to the Contract for Engineering, Procurement,
Construction, Erection, Start-up and Testing of a Kraft Pulp Mill dated [-] (the
"Contract") between RWE Industrie-Losungen GmbH ("Contractor") and Zellstoff
Stendal GmbH ("Owner").

        This is the Schedule B Test Certificate referred to in Section 19.6 of
the Contract. The Owner hereby confirms that all conditions to the completion of
the Schedule B Test (as defined in the Contract) for the [INSERT RELEVANT
SYSTEM] have been satisfied on [-] in accordance with, and subject to the
conditions contained in, Section 19.6 of the Contract.


                                                    Zellstoff Stendal GmbH


                                                    ---------------------------
                                                    Name:
                                                    Title:

<Page>

ANNEX C

             FORM OF EXPIRY OF DEFECTS LIABILITY PERIOD CERTIFICATE

To:     RWE Industrie-Losungen GmbH
        Sonnenwall 85
        D 47051 Duisburg, Germany

        Attention:


From:   Zellstoff Stendal GmbH
        Niedergorner Damm 1
        D 39596 Arneburg, Germany

        Reference is made to the Contract for Engineering, Procurement,
Construction, Erection, Start-up and Testing of a Kraft Pulp Mill dated [-] (the
"Contract") between RWE Industrie-Losungen GmbH ("Contractor") and Zellstoff
Stendal GmbH ("Owner").

        This is the Expiry of Defects Liability Period Certificate referred to
in Section 20.9 of the Contract. The Owner hereby certifies that the Expiry of
the Defects Liability Period (as defined in the Contract) has occurred on [-] in
accordance with, and subject to the conditions contained in, Section 20.9 of the
Contract.


                                                    Zellstoff Stendal GmbH


                                                    ---------------------------
                                                    Name:
                                                    Title:

<Page>

ANNEX D

             FORM OF EXPIRY OF DEFECTS LIABILITY PERIOD CERTIFICATE

To:     RWE Industrie-Losungen GmbH
        Sonnenwall 85
        D 47051 Duisburg, Germany

        Attention:


From:   Zellstoff Stendal GmbH
        Niedergorner Damm 1
        D 39596 Arneburg, Germany

        Reference is made to the Contract for Engineering, Procurement,
Construction, Erection, Start-up and Testing of a Kraft Pulp Mill dated [-] (the
"Contract") between RWE Industrie-Losungen GmbH ("Contractor") and Zellstoff
Stendal GmbH ("Owner").

        This is the Expiry of Defects Liability Period Certificate referred to
in Section 20.9 of the Contract. The Owner hereby certifies that the Expiry of
the Defects Liability Period (as defined in the Contract) has occurred on [-] in
accordance with, and subject to the conditions (including the reservation of the
Owner's rights with respect to certain continuing warranties referenced in
Attachment A hereto) contained in, Section 20.9 of the Contract.


                                                    Zellstoff Stendal GmbH


                                                    ---------------------------
                                                    Name:
                                                    Title:

<Page>

IN WITNESS WHEREOF, we have caused this Guarantee to be executed by one or more
to our officers thereunto duly authorized on this        day of August, 2002.

(Name of Guarantor)

By:

Name:
Title:

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                               COMMERCIAL EXHIBITS

           5. FORM OF EXTENDED DEFECTS LIABILITY PERIOD BANK GUARANTEE

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

            Form of Extended Defects Liability Period Bank Guarantee

Zellstof Stendal GmbH
Niedergorner Damm 1
D-39596 Ameburg

Guarantee No. (_____)

Dear Sirs:

     (to be substantially in the form of the guarantee in Appendix 2, Exhibit 4)

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                               COMMERCIAL EXHIBITS

                                  6. Insurance

<Page>

Bankrisk Services                                     Steridal Pulp Mill Project
Insurance Due Diligence                              Arrangers Insurance Concept

                           Minimum Insurance Schedule

                          CONSTRUCTION PHASE INSURANCE

1.        Construction/Erection "All Risks" Material Damage Insurance

1.1       The Insured Parties

(a)       Borrower and any Subsidiary Companies;
(b)       The ERG Contractor AND/OR Contractor's Suppliers in respect of the EPC
          Contract and the Contractor and/or Contractor's Suppliers in respect
          of the non-EPC ancillary Contracts;
(c)       Any consultants and suppliers for their site act ivities only;
(d)       The independent Engineer,

Each for their respective rights and interests.

1.2       The Insured Property

All permanent and temporary works, preliminary works (including associatad works
and site mobilisation) executed or in course of execution, materials, goods,
parts, excavations, spare parts inventory, debris removal, consumables, fuels,
chemicals and oils and all other things equipment of whatsoever nature used for
or intended for incorporation within the Site, including the rail spur,
electricity, steam, gas and water interconnections, all designs drawings
specifications plans to be provided, together with computer and building
services equipment, all other parts or units or equipment plant and machinery of
whatever nature the property of the insured or for which they are responsible,
(but excluding any contractor's or sub contractor's constructional plant and
equipment), while on or adjacent to the Site and all associated and ancillary
works connected to the Plant.

1.3       Geographical Limits

Europe and Scandinavia.

1.4       Sum Insured

EURO * representing the amount equivalent to the total reinstatement value of
the Works and the Plant, including allowance for the costs of demolition and
debris removal and professional fees (including construction management,
Technical Advisers fees and fuel, chemical, raw material and Spares Inventory
at Site at the date of Acceptance), customs duties of the Works and the Plant
(as applicable). The sum insured is to operate in respect of each occurrence
of loss or damage to the insured property.

1.5       Indemnity

All risks of physical loss of or damage to any part of the Insured Property from
any cause not excluded.

1.6       Period of Insurance

From Financial Close (or the Commencement Date under the EPC Contract if
earlier) until the date of Acceptance, extending for an additional 18 months
thereafter with respect to cover during the Defects Liability Period.

* Mercer has made an application to the SEC to redact this information. The
  information has been filed separately with the SEC.

23/08/02                                1                        HypoVereinsbank
<Page>

Bankrisk Services                                     Steridal Pulp Mill Project
Insurance Due Diligence                              Arrangers Insurance Concept

1.7       Main Exclusions

The Insurers shall not be liable for:

(a)       War, Civil War, etc. including Terrorism (until such time as insurance
          against acts of Terrorism becomes available in the international
          market on what the Security Agent accepts to be reasonable commercial
          terms);
(b)       Radioactive Contamination, etc;
(c)       Wear and Tear and gradual deterioration but this shall not exclude
          consequent loss or damage;
(d)       Date Recognition Clause;
(e)       Unexplained Disappearance or Shortages;
(f)       Consequential Losses, loss of use, delay penalties;
(g)       Contractor's or its Subcontractors' Constructional Plant and
          Equipment;
(h)       Loss of cash, banknotes, treasury notes, money orders, cheques or
          stamps;
(i)       Costs incurred arising out of wear, tear, wasting or wearing away,
          gradual deterioration, rust, oxidation, corrosion or erosion but not
          consequent damage;
(j)       Marine and Air transits (but not transits by inland waterways);
(K)       Vehicles licensed for road use.

1.8     Maximum Deductible

Not exceeding EURO 75,000 in respect of each and every occurrence of loss or
damage.

1.9     Main Extensions/Conditions

(a)       Including loss or damage arising from acts of Terrorism, strikes,
          riots, civil commotion and criminal/malicious damage (except that
          insurance against acts of Terrorism will be excluded until such tim.e
          as that insurance becomes available in the international market on
          what the Security Agent accepts to be reasonable commercial terms);
(b)       Natural Hazards Limit; Euro 12,500,000 each event and Euro 25,000,000
          per annum;
(c)       Defective Design cover only excluding the component part that is
          detective but otherwise covering consequential damage;
(d)       Debris removal;
(e)       Expediting expenses;
(f)       Professional and surveyors' fees;
(g)       Automatic reinstatement of sum insured;
(h)       Escalator on Sum Insured;
(i)       Escalator on Limit of liability applied to Sum Insured;
(j)       Seventy-two Hour Clause;
(k)       Plans Specifications Drawings Electronic Records and data Clause;
(1)       50/50 Marine/Construction Loss Sharing Clause; (in) Temporary Repairs
          and Minimising Loss; (n) Offsite Storage and inland Transits; (o)
          Cover during Defects Liability Period to cover loss or damage caused
          to the Works and the Plant by defects or whilst work is being
          undertaken pursuant to the Defects Liability provisions of the
          relevant EPC Contract.

23/08/02                                2                        HypoVereinsbank
<Page>

Bankrisk Services                                     Steridal Pulp Mill Project
Insurance Due Diligence                              Arrangers Insurance Concept

2.        Delay in Start up/Advance Loss of Revenue Insurance (Construction)

2.1       The Insured Parties

Borrower

2.2       PERIOD OF INSURANCE

From Financial Close (OR the Commencement Date under the EPO Contract if
earlier) until the date of Acceptance.

2.3       Indemnity

Fixed operating costs and standing charges including loss of debt service
(interest -including fees- and Principal); plus any minimum take or pay
obligations; plus increased cost of working following delays in the date of
Start Up, incuding in the five month period from the date of Start Up until the
scheduled date of Acceptance, as a direct result of physical loss or damage
covered under Paragraph 1, "Construction! Erection "All Risks' Material Damage
Insurance," of this Minimum lnsurance Schedule including loss or damage, which
would be insured but for the application of any deductible, that causes an
interference in the construction work resulting in a delay to the scheduled date
of Start Up or such later date on which the Insured Business would have become
operational or causes an interruption of the operation as scheduled from the
date of Start Up until scheduled date of Acceptance, respectively.

2.4       Sum Insured

EURO * for any 12 months period of indemnification being an amount sufficient
to cover the Plant's fixed operating costs including interest, fees and
principal payable plus any minimum take or pay obligations for the duration
of the Indemnity Period.

2.5       Indemnity Period

A period of 18 months from the scheduled Start Up date including the period from
the scheduled date of Start Up until the scheduled date of Acceptance for FLEXA
(Fire Lightning Explosion and Aircraft) perils and Acts of God and 12 months
from the scheduled Start Up date including the period from the scheduled date of
Start Up until the scheduled date of Acceptance for Machinery Breakdown & all
other damage.

2.6       Main Exclusions

The insurance excludes any event not insured under paragraph 1 "Construction!
Erection "All Risks" Material Damage Insurance, above.

2.7       Maximum Time Excess

Not exceeding 60 days any one delay.

* Mercer has made an application to the SEC to redact this information. The
  information has been filed separately with the SEC.

23/08/02                                3                        HypoVereinsbank
<Page>

Bankrisk Services                                     Steridal Pulp Mill Project
Insurance Due Diligence                              Arrangers Insurance Concept

3.        Marine Cargo and Inland Transit Insurance

3.1       The Insured Parties

(a)       Borrower and any Subsidiary Companies;
(b)       The ERG Contractor and/or Contractors Suppliers in respect of the ERG
          Contract and the Contractor and/or Contractor's Suppliers in respect
          of the non-EPC ancillary Contracts;
(c)       The Independent Engineer,

Each for their respective rights and interests.

3.2       Period of Insurance

From Financial Close (or the Commencement Date under the EPC Contract if
earlier) until date of delivery of the final consignment to the Site.

3.3       The Insured Property

All imported Cargoes and/or interest and/or stock of whatsoever description
including plant, equipment, machinery, (other than Contractors construction
plant and equipment), spare parts and other items for incorporation within the
Site.

3.4       SUM Insured

EURO 40,000,000 any one shipment but not less than 110% of the maximum value
(including cost of freight and insurance) any one conveyance and/or location of
each shipment and EURO 10,000,000 for Inland Transit.

3.5       Indemnity

Against "All Risks' of physical loss or damage while in transit by sea, air or
land or inland waterway portion of the journey or whilst in storage en route.
From the time the insured items leave the warehouse or factory anywhere in the
world for shipment or transit to, and until they are delivered and unloaded at
the Site, and return.

3.6       MAIN Exclusions

(a)         German Institute Insolvency Exclusion Clause or Equivalent;
(b)         German Institute Radioactive Contamination Exclusion Clause or
            Equivalent;
(c)         Excluding electrical and mechanical derangement unless caused by an
            insured peril.

3.7       Main Extensions/Conditions

(a)         German Institute Cargo and Air Cargo Clauses (A) or Equivalent;
(b)         German Institute War Clauses (Cargo, Air Cargo) or Equivalent;
(c)         German Institute Strikes Clause (Cargo, Air Cargo) or Equivalent;
(d)         German Institute Classification Clause or Equivalent;
(e)         German Institute Replacement Clause or Equivalent;
(f)         50/50 Marine Construction Loss Sharing and Concealed Damage clause;
(g)         Debris Removal Clause;
(h)         Expediting Expenses;
(i)         Transhipment Clause;
(j)         Accumulation Clause/Off- Site Storage.

3.8       Maximum Deductible

23/08/02                                4                        HypoVereinsbank
<Page>

Sankrisk Services                                     Steridal Pulp Mill Project
Insurance Due Diligence                              Arrangers Insurance Concept

Not to exceed EURO 10,000 each and every loss.

23/08/02                                5                        HypoVereinsbank
<Page>

Bankrisk Services                                     Steridal Pulp Mill Project
Insurance Due Diligence                              Arrangers Insurance Concept

4.        Marine Delay in Start Up/ Marine Advance Loss of Revenue

4.1       The Insured Parties

Borrower

4.2       Period of Insurance

From the date of Financial Close or the Commencement Date under the EPC Contract
(if earlier) until the date of Start Up.

4.3       Indemnity

Fixed operating costs and standing charges including loss of debt service
(interest -including fees- and Principal) plus any minimum take or pay
obligations; plus increased cost of working following delays in Start Up as a
direct result of physical loss or damage covered under Paragraph 3, "Marine
CargoiTransit Insurance," of this Minimum insurance Schedule including loss or
damage, which would be insured but for the application of any deductible, that
causes an interference in the construction work resulting in a delay to the
scheduled date of Start Up or such later date on which the Insured Business
would have become operational.

4.4       Sum Insured

EURO * being an amount sufficient to cover the Project's fixed operating
costs including interest, fees and principal payable plus any minimum take or
pay obligations for the duration of the maximum Indemnity Period.

4.5       Indemnity Period

A minimum of 12 months from the scheduled date of Start Up.

4.6       Main Exclusions

The insurance excludes any event Insurance," above. not insured under
paragraph 3, "Marine Cargo/Transit

4.7       Maximum Time Excess

Not exceeding 60 days any one delay.

* Mercer has made an application to the SEC to redact this information. The
  information has been filed separately with the SEC.

23/08/02                                6                        HypoVereinsbank
<Page>

Bankrisk Services                                     Steridal Pulp Mill Project
Insurance Due Diligence                              Arrangers Insurance Concept

5.        Third Party Liability I Environmental Impairment Liability

5.1       The Insured Parties

(a)       Borrower and Subsidiary Company;
(b)       The EPC Contractor and/ar Contractors Suppliers in respect of the EPC
          Contract and the Contractor and/or Contractors Suppliers in respect of
          the non-EF'C ancillary Contracts;
(c)       Any consultants and suppliers for their site activities only;
(d)       The Independent Engineer;
(e)       Each of their respective assigns, employees, agents, officers,
          partners and Directors,

Each for their respective rights and interests.

5.2       Period of Insurance

From Financial Close (or the Commencement Date under the EPC Contract if
earlier) until the date of Acceptance, extending for an additional 18 months
thereafter with respect to cover required in respect of the EPC Contractor/and
or its Suppliers during the Defects Liability Period.

5.3       Indemnity

The legal and contractual liability of an Insured to pay damages, costs and
expenses as a result of:

(a)       Death, bodily injury and dIsease (including mental shock) of any
          person;
(b)       Loss or damage to any third party property and/or loss of use thereof;
(c)       Interference with traffic or property or any easement, right of air,
          light, water, support or way or enjoyment at use by obstruction, loss
          of amenities, nuisance, trespass or any like cause; and
(d)       false arrest, invasion of privacy, detention, eviction or any like
          cause,

Arising out of or in the course of or in connection with the performance of the
Works.

5.4       Geographical Limits

World-wide.

5.5       Limit of Indemnity

Notless than EURO 10,000,000 for any one occurrence or all occurrences of a
series consequent upon or attributable to one source or original source but in
respect of Products Liability EURO 10,000000 in the aggregate.

5.6       Maximum Deductible

Not more than EURO 25,000 in respect of third party property damage only and not
more than EURO 250,000 in respect of EIL.

5.7       Main Extensions/Conditions

(a)       Cross Liabilities Clause;
(b)       World-wide jurisdiction clause;
(c)       legal costs and expenses;
(d)       Contingent Motor Liability.

5.8       Main Exclusions

23/08/02                                7                        HypoVereinsbank
<Page>

Bankrisk Services                                     Steridal Pulp Mill Project
Insurance Due Diligence                              Arrangers Insurance Concept

(a)       Death of, or bodily injury to, or illness or disease contracted by,
          the employees of the Insured claiming indemnity arising out of or in
          the course of their employment;
(b)       Property belonging to, or in the charge, or under the control of, the
          Insured;
(c)       Liability arising out of technical or professional advice given for a
          fee by the Insured or by any person acting on behalf of the Insured
          other than advice relating to the construction and operation of the
          Plant in so far as insured under paragraph 1, "Construction! Erection
          "All Risks" Material Damage Insurance," of this Minimum insurance
          Schedule;
(d)       Liability arising out of the use of mechanically propelled vehicles
          for which compulsory insurance or security is required by legislation,
          except whilst in use as a tool of trade;
(e)       The cost of making good loss of or damage to property indemnified
          under the insurance referred to in paragraph 1 "Construction! Erection
          "All Risks" Material Damage Insurance," of this Minimum Insurance
          Schedule;
(f)       Liability arising from ownership, possession, use or control of any
          aircraft or watercraft; and
(g)       Liquidated damages or penalties under any agreement in connection with
          delay or guarantees of performance or efficiency.

5.9       Environmental Impairment Insurance ("Umwelthaftpflichtversicheruflg")

(a)       All events for which one of the insured becomes liable to pay in
          respect of legal liabilities to third parties arising from
          contamination of the Project Site, which results ri a pollution event
          causing third party bodily injury or property damage;
(b)       Temporary ownership in Cover Component 2.6 of the
          Umwelthaftpflicht-Modefl des H UK-Verbandes;
(c)       36 month extended reporting period after cancellation.

23/08/02                                8                        HypoVereinsbank

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                               COMMERCIAL EXHIBITS

                            7. Intentionally Omitted

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                               COMMERCIAL EXHIBITS

                               8. Key Persons List

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                               COMMERCIAL EXHIBITS

                               8. KEY PERSONS LIST

POSITION                       NAME
--------                       ----
Project Sponsor                Rolf Neuwinger
Project Director               Georg A. Gross
Technical Director             Denis P. Fournier
Commercial Director            Bernd Kildentoft
Engineering Manager            Joe Masella
Site Manager                   Miguel Sanchez
Manager Subcontracts           Amd Pannenbecker
Administration Coordinator     Dagmar Hermes
Commisioning Manager           Phil Ebert
Civil Manager                  Renato Gori
Erection Manager               Hans Koch
Planning / Scheduling          Ulrich kohlhaas
Electrical                     Carlos Goncalves
Authority Coordination         Hans Andres

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                               COMMERCIAL EXHIBITS

                          9. PAYMENT MILESTONE SCHEDULE


<Page>

Appendix 2 Exhibit 9 Payment milestones

<Table>
Activity    System and                                                                                                Months from
#          Department No   Milestone Description                                                           Value   Commencement Date
<S>        <C>             <C>                                                                             <C>     <C>
*                          Advance payment due on or before Commencement Date                              5.00%         0
*                          Advance payment month 1 after Commencement Date                                 5.00%         1
*               *          Foundation for stair case tower poured (completed)                              0.20%         1
*               *          All flow sheets and layout drawings for lst approval                            2.00%         2
*               *          Stair case tower concrete structure completed                                   0.50%         2
*               *          All Pouring of foundations for the departments completed                        0.10%         3
*               *          Pouring of foundations for * completed                                          0.20%         3
*               *          All flow sheets and layout drawings for 1st approval                            1.50%         3
*               *          Pouring of all foundations for * completed                                      0.30%         3
*               *          All Slabs on grade poured                                                       0.10%         4
*               *          Pouring of foundations for * completed                                          0.10%         4
*               *          Pouring of foundations for building (completed)                                 0.20%         4
*               *          Pouring of foundations for building completed                                   0.20%         4
*               *          All flow sheets and layout drawings approved                                    1.00%         5
*               *          Pouring of foundations for * completed                                          0.10%         5
*               *          Pouring of foundations for * completed                                          0.10%         5
*               *          Slab on grade poured (completed)                                                0.20%         5
*               *          Building foundation poured (completed)                                          0.30%         5
*               *          Pouring of foundations for * completed                                          0.30%         5
*               *          Delivery 1, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.30%         5
*               *          Slab on grade poured (completed)                                                0.20%         5
*               *          Slab on grade poured (completed)                                                0.20%         5
*               *          Pouring of foundations for building completed                                   0.10%         5
*               *          Pouring of foundations for * completed                                          0.10%         6
*               *          Slab on grade poured * (completed)                                              0.20%         6
*               *          Slab on grade poured * (completed)                                              0.10%         6
*               *          Slab on grade poured (completed)                                                0.25%         6
*               *          All flow sheets and layout drawings approved                                    1.50%         6
*               *          Pouring of foundations for * completed                                          0.30%         6
*               *          Delivery 1, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         6
*               *          Pouring of foundations for *                                                    0.10%         6
*               *          Pouring of foundations for *                                                    0.20%         6
*               *          Pouring of foundations for *                                                    0.10%         6
*               *          60% of the value of Contractor's Suppliers' subcontracts signed                 0.05%         6
*               *          Superstructures completed                                                       0.20%         7
*               *          Slab on grade poured * (completed)                                              0.20%         7

                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

Payment milestones                                                         1(7)

<Page>

*               *          Pouring of foundations for * completed                                          0.10%         7
*               *          Pouring of foundations for * (completed)                                        0.10%         7
*               *          Delivery 1, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         7
*               *          Slab on grade poured for complete * (completed)                                 0.20%         7
*               *          Delivery 1, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.30%         7
*               *          Slab on grade poured (completed)                                                0.10%         7
*               *          Delivery 2, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  2.00%         7
*               *          Delivery 1, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         7
*               *          Pouring of foundations and piers for * completed                                0.10%         7
*               *          Slabs on grade poured (completed)                                               0.10%         7
*               *          Slab on grade poured (completed)                                                0.20%         7
*               *          Delivery 1, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         8
*               *          All elevated floor slabs poured                                                 0.10%         8
*               *          Slab on grade poured * (completed)                                              0.20%         8
*               *          Superstructure completed for *                                                  0.05%         8
*               *          Superstructure completed for *                                                  0.05%         8
*               *          Pouring of foundations for * storage completed                                  0.10%         8
*               *          Delivery 2, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.70%         8
*               *          Pouring of foundations for * completed                                          0.20%         8
*               *          Delivery 2, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  1.00%         8
*               *          Slab on grade poured for * building completed                                   0.20%         8
*               *          Delivery 2, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         8
*               *          Delivery 2, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         8
*               *          Superstructure completed                                                        0.10%         8
*               *          Superstructure for buildings completed                                          0.10%         8
*               *          Pouring of foundations for all equipment completed                              0.10%         8
*               *          Mill roads rough in place                                                       0.10%         8
*               *          Graphic configuration of all Departments frozen                                 0 20%         9
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         9
*               *          All perimeter walls completed                                                   0.10%         9
*               *          Delivery 1, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         9
*               *          All perimeter walls completed for * building                                    0.05%         9
*               *          All perimeter walls completed for * building                                    0.05%         9
*               *          Delivery 1, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         9
*               *          All superstructure for building completed                                       0.20%         9
*               *          Delivery 3, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                  1.00%         9
*               *          Delivery 3, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  1.00%         9
*               *          Pouring of foundations for building (completed)                                 0.05%         9
*               *          Delivery 3, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  2.00%         9
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         10
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         10
*               *          All * installed                                                                 0.20%         10

                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

Payment milestones                                                         2(7)

<Page>

*               *          Delivery 2, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.35%         10
*               *          Pouring of foundations for * completed                                          0.30%         10
*               *          Delivery 4, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                  1.80%         10
*               *          All * installed                                                                 0.75%         10
*               *          Superstructure (frame) completed for * building                                 0.40%         10
*               *          Delivery 1, 1/3 ot the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         10
*               *          Slab on grade poured (completed)                                                0.05%         10
*               *          Delivery 3, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         10
*               *          All supporting steel structure completed                                        0.30%         10
*               *          All perimeter walls completed                                                   0.10%         10
*               *          Delivery 1, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         10
*               *          Slab on grade poured for all equipment completed                                0.10%         10
*               *          Pouring of foundations for building completed                                   0.10%         10
*               *          * structure completed                                                           0.10%         10
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.40%         11
*               *          Delivery 3, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.65%         11
*               *          All perimeter walls completed                                                   0.20%         11
*               *          Delivery 1, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.40%         11
*               *          * poured for * (completed)                                                      0.20%         11
*               *          Superstructure (frame) for complete * building completed                        0.25%         11
*               *          Delivery 4, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         11
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.20%         11
*               *          Superstructure completed                                                        0.05%         11
*               *          Delivery 4, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         11
*               *          All * installed                                                                 0.40%         11
*               *          Delivery 4, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  1.20%         11
*               *          Delivery 3, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         11
*               *          Delivery 2, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.75%         11
*               *          All perimeter walls completed                                                   0.10%         11
*               *          Delivery 1, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         11
*               *          Delivery 1, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         11
*               *          Slab on grade poured (completed)                                                0.05%         11
*               *          All * installed                                                                 0.30%         12
*               *          * installed                                                                     0.10%         12
*               *          * completed                                                                     0.20%         12
*               *          * installed                                                                     0.15%         12
*               *          All building services mechanically completed                                    0.05%         12
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.90%         12
*               *          * (completed)                                                                   0.20%         12
*               *          Delivery 5, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                  1.30%         12
*               *          Elevated floor slabs poured for complete * building                             0.20%         12
*               *          All * installed                                                                 0.40%         12

                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

Payment milestones                                                         3(7)

<Page>

*               *          All * installation                                                              0.20%         12
*               *          Elevated floor slabs poured for * building completed                            0.20%         12
*               *          Perimeter walls completed for * building                                        0.20%         12
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.30%         12
*               *          All perimeter walls completed                                                   0.05%         12
*               *          * platform poured (completed)                                                   0.10%         12
*               *          Delivery 4, 1/5 of  the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         12
*               *          * ready tor insulation                                                          0.10%         12
*               *          Delivery 3, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.75%         12
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         12
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         12
*               *          All superstructure completed                                                    0.30%         12
*               *          All building services mechanically completed                                    0.30%         13
*               *          * mechanically completed                                                        0.10%         13
*               *          Delivery 4, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.75%         13
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.90%         13
*               *          * poured for * (completed)                                                      0.20%         13
*               *          Slab on grade poured for * (completed)                                          0.10%         13
*               *          Perimeter walls for complete * building completed                               0.20%         13
*               *          *                                                                               0.30%         13
*               *          Delivery 5, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  1.00%         13
*               *          All *                                                                           0.20%         13
*               *          Delivery 5, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         13
*               *          Building services mechanically completed                                        0.10%         13
*               *          Delivery 5, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.50%         13
*               *          Mechanical installation of all * completed                                      0.20%         13
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         13
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.10%         13
*               *          All elevated floor Slabs poured (completed)                                     0.30%         13
*               *          *                                                                               0.05%         13
*               *          * mechanically installed                                                        0.30%         14
*               *          *                                                                               0.10%         14
*               *          *                                                                               0.10%         14
*               *          * installed                                                                     0.40%         14
*               *          * at Site                                                                       1.00%         14
*               *          Slab on grade poured for * (completed)                                          0.20%         14
*               *          Installation of * completed                                                     0.20%         14
*               *          Installation of * completed                                                     0.50%         14
*               *          Installation of * completed                                                     0.50%         14
*               *          * installed                                                                     0.30%         14
*               *          All * ready for insulation                                                      0.10%         14
*               *          All * installation                                                              0.20%         14

                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

Payment milestones                                                         4(7)

<Page>

*               *          All building services mechanically completed                                    0.05%         14
*               *          All building services mechanically completed                                    0.05%         14
*               *          Installation of * completed                                                     0.10%         14
*               *          Building ready for *                                                            0.10%         14
*               *          Final approval of spare part list                                               0.45%         14
*               *          Factory Acceptance Tests completed for all Departments                          0.40%         15
*               *          * mechanically installed                                                        0.10%         15
*               *          Installation of * mechanically completed                                        0.30%         15
*               *          * concrete areas in * completed                                                 0.05%         15
*               *          Slab on grade poured for * (completed)                                          0.20%         15
*               *          * mechanically installed                                                        0.20%         15
*               *          Delivery 6, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                  1.30%         15
*               *          All electrical switch gears mechanically installed                              0.25%         15
*               *          * mechanically installed                                                        0.40%         15
*               *          All * mechanically installed                                                    0.25%         15
*               *          All * mechanically installed                                                    0.20%         15
*               *          * installed                                                                     0.50%         15
*               *          All * installed                                                                 0.20%         15
*               *          Delivery 4, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                  0.30%         15
*               *          All * mechanically installed                                                    0.20%         15
*               *          All * mechanically completed                                                    0.50%         15
*               *          * operational                                                                   0.05%         15
*               *          All * installed                                                                 0.10%         16
*               *          * completed and authority approved                                              0.60%         16
*               *          Installation of * mechanically completed                                        0.50%         16
*               *          * mechanically installed                                                        0.20%         16
*               *          All * completed                                                                 0.10%         16
*               *          Building services mechanically completed for * building                         0.35%         16
*               *          All * installed                                                                 0.20%         16
*               *          All *                                                                           0.35%         16
*               *          All * installed                                                                 0.30%         16
*               *          Installation of * completed                                                     0.10%         16
*               *          All steel structure completed                                                   0.10%         16
*               *          All perimeter walls completed                                                   0.20%         16
*               *          * completed                                                                     0.05%         16
*               *          * mechanically installed                                                        0.10%         16
*               *          All Operation, Maintenance Manuals completed and delivered                      0.30%         16
*               *          All * installed                                                                 0.20%         17
*               *          * mechanically installed                                                      0.20%         17
*               *          * installed                                                                     0.30%         17
*               *          *                                                                               0.50%         17
*               *          Mechanical Completion Certificate                                               0.40%         18


                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

Payment milestones                                                         5(7)

<Page>

*               *          Mechanical Completion Certificate                                               0.40%         18
*               *          * completed and authority approved                                              0.50%         18
*               *          All building services mechanically completed                                    0.15%         18
*               *          Site Installation Tests completed                                               0.40%         19
*               *          Mechanical Completion Certificate                                               0.40%         19
*               *          All architectural finishes completed                                            0.05%         19
*               *          Mechanical Completion Certificate of administration building                    0.30%         19
*               *          * completed                                                                     0.05%         19
*               *          Mechanical Completion Certificate                                               0.15%         19
*               *          * ready for use                                                                 0.05%         19
*               *          System Start-up                                                                 0.10%         20
*               *          Mechanical Completion Certificate                                               0.50%         20
*               *          Mechanical Completion Certificate                                               0.10%         20
*               *          Mechanical Completion                                                           0.40%         20
*               *          Mechanical Completion Certificate                                               0.20%         20
*               *          *                                                                               0.25%         20
*               *          Mechanical Completion Certificate                                               0.10%         20
*               *          * ready for use                                                                 0.20%         20
*               *          * ready for use                                                                 0.20%         20
*               *          System Start-up                                                                 0.10%         21
*               *          System Start-up                                                                 0.10%         21
*               *          Mechanical Completion Certificate                                               0.10%         21
*               *          Mechanical Completion Certificate                                               0.10%         21
*               *          System Start-up                                                                 0.10%         21
*               *          System Start-up                                                                 0.10%         21
*               *          Mechanical Completion Certificate                                               0.10%         21
*               *          Mechanical Completion Certiticate                                               0.10%         21
*               *          System Start-up                                                                 0.10%         22
*               *          System Start-up                                                                 0.10%         22
*               *          Mechanical Completion Certificate                                               0.10%         22
*               *          Mechanical Completion Certificate                                               0.10%         22
*               *          System Start-up                                                                 0.10%         22
*               *          System Start-up                                                                 0.10%         22
*               *          System Start-up                                                                 0.10%         22
*               *          System Start-up                                                                 0.10%         22
*               *          Mechanical Completion Certificate of the Works                                  6.00%         22
*               *          Certificate of Operational Acceptance                                           0.20%         23
*               *          Certificate of Operational Acceptance                                           0.20%         23
*               *          System Start-up                                                                 0.10%         23
*               *          System Start-up                                                                 0.10%         23
*               *          Certiticate of Operational Acceptance                                           0.20%         24
*               *          Certificate of Operational Acceptance                                           0.20%         24


                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

Payment milestones                                                         6(7)

<Page>

*               *          System Start-up and production of  *                                            1.40%         24
*               *          Mill Fence 80% closed                                                           0.05%         24
*               *          Certificate of Operational Acceptance                                           0.20%         25
*               *          Certificate of Operational Acceptance                                           0.20%         25
*               *          Certificate of Operational Acceptance                                           0.20%         25
*               *          Certificate of Operational Acceptance                                           0.20%         25
*               *          Certificate of Operational Acceptance                                           0.20%         25
*               *          Certificate of Operational Acceptance                                           0.20%         25
*               *          Operational Acceptance Certificates for the Works                               1.00%         25
*               *          Acceptance of the Works                                                         5.00%         28
*               *          Roads, paved areas, lawns and landscaping completed                             0.20%         28
*               *          Schedule B Test Certificate                                                     0.10%         30
*               *          Schedule B Test Certificate                                                     0.10%         31
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          Schedule B Test Certificate                                                     0.10%         34
*               *          All Schedule B Tests completed                                                  1.50%         34
                                                                                                         100.00%
                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.
</Table>

Payment milestones                                                         7(7)
<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 2

                               COMMERCIAL EXHIBITS

                      10. FORM OF PARENT COMPANY GUARANTEE

<Page>

                                                           APPENDIX 2 EXHIBIT 10

                     AGREED FORM OF PARENT COMPANY GUARANTEE

Zellstoff Stendal GmbH
Niedergorner Damm 1

D-39596 Arneburg

This Guarantee is provided by RWE Solutions AG (the "Guarantor") pursuant to the
Contract for Engineering, Design, Procurement, Construction, Erection and Start
Up made as of (  ) August, 2002 (the "Contract") between Zellstoff Stendal GmbH,
39596 Arneburg (the "Owner") and RWE Industrie-Losungen GmbH, 47051 Duisburg
(the "Contractor").

Guarantor, being the owner of the capital stock of the Contractor and in
consideration of and in order to induce the execution and delivery of and/or
performance of its obligations under the Contract by Owner, does hereby
unconditionally and irrevocably guarantee to the Owner:

     (1) the due and punctual performance by or on behalf of Contractor of any
         and all obligations of the Contractor contained in the Contract; and

     (2) the payment when due of all sums which may become due on the part of
         the Contractor under or pursuant to the Contract

     (together the "Guaranteed Obligations").

We hereby undertake that if the Contractor fails to perform the Guaranteed
Obligations we shall assume the Guaranteed Obligations (SCHULDMITUBERNAHME) as
though they were our own and perform the Guaranteed Obligations at the place, to
the extent and in the manner as specified in the Contract. Guarantor agrees that
no invalidity or unenforceability of the Contract in breach of the
representations in paragraphs (3) and (4) below shall affect or impair its
liability under this Guarantee. Payments required to be made under this
Guarantee shall be made without set-off or counterclaim and free from deductions
or withholdings.

This Guarantee shall in all respects be a continuing, absolute, unconditional
and irrevocable performance guarantee, irrespective of the occurrence of any
circumstances which might otherwise constitute a legal or equitable defense. In
particular, the release by the Owner of any other security granted in connection
with the Contract in fulfillment of the Owner's obligations under any other
security agreement to effect such release shall not in any way affect the
obligations of the Guarantor hereunder.

The Guarantor in order to fulfill its obligations hereunder shall have the right
to appoint another contractor to complete the works, provided that such
appointment shall be subject to the prior written approval of the Owner, which
approval shall not be unreasonably withheld. At such time as Guarantor is
required to perform Contractor's obligations under the Contract, all rights and
obligations of Contractor under the Contract, including the right to receive all
payments due and owing by Owner to Contractor, shall be deemed to have been
transferred and assigned to it or to such contractor appointed by it; provided,
however, that (i) Guarantor first shall have notified Owner in writing of such
transfer and assignment of rights and

<Page>

obligations, (ii) Owner shall have received Contractor's written acknowledgement
that its rights and obligations under the Contract have been transferred and
assigned, and (iii) Guarantor shall have executed and delivered to Owner an
indemnity reasonably satisfactory to Owner whereby the Guarantor agrees to
indemnify the Owner against and hold it harmless from any and all claims by or
through Contractor for payments from Owner under the Contract.

Guarantor hereby agrees that the Contract may be modified, amended and
supplemented with the written agreement of Contractor without Guarantor's
consent in any manner and agrees that no such modification, amendment or
supplement shall release, affect or impair its liability under this Guarantee.

Guarantor represents that:

(1)    it is a company duly organized under the laws of the Federal Republic of
       Germany and has and will have the necessary power to enable it to enter
       into and perform its obligations under this Guarantee;

(2)    the Contractor is a company duly organized under the laws of Germany and
       has and will have the necessary power to enable it to enter into and
       perform its obligations under the Contract;

(3)    the Contract, as originally executed and delivered, has been duly
       authorized by Contractor and has been duly executed by duly authorized
       officers of Contractor;

(4)    the obligations of Contractor under the Contract are, or when the
       Contract becomes effective in accordance with its terms, will be valid
       obligations of Contractor legally binding upon it and enforceable in
       accordance with the terms and conditions of the Contract;

(5)    this Guarantee has been duly authorized by Guarantor and has been duly
       executed by duly authorized officers of Guarantor;

(6)    Guarantor's obligations under this Guarantee are, or when this Guarantee
       becomes effective in accordance with its terms, will be valid obligations
       of Guarantor enforceable in accordance with the terms and conditions
       hereof;

(7)    all necessary authorisations to enable it to enter into this Guarantee
       have been obtained and are and will remain in full force and effect;

(8)    all necessary authorisations to enable the Contractor to enter into the
       Contract have been obtained and are and will remain in full force and
       effect;

(9)    its obligations under this Guarantee rank and will rank at least equally
       with all its other present and future unsecured and unsubordinated
       obligations save that certain categories of its other obligations will,
       however, be preferred in a liquidation by virtue of mandatory provisions
       of statute;

(10)   no stamp, registration or similar tax is payable, and no filing or
       registration is required, in connection with the execution, performance
       or enforcement of this Guarantee;

<Page>

(11)   the execution, delivery and performance of this Guarantee will not
       conflict with (a) any agreement binding on it or any of its assets; (b)
       its constitutional documents; or (c) any applicable law; and

(12)   the execution, delivery and performance of the Contract by the Contractor
       will not conflict with (a) any agreement binding on it or any of its
       assets; (b) its constitutional documents; or (c) any applicable law.

This Guarantee shall become effective on the date on which all of the conditions
set forth in article 32 of the Contract have been satisfied (the `Commencement
Date') and will expire on the date on which all amounts payable by Contractor
under the Contract have been paid in full and all obligations to be performed by
Contractor under the Contract have been performed, after which date this
Guarantee shall become null and void unless Owner's written demand by registered
letter under this Guarantee has reached Guarantor at Frankfurt, Germany before 5
p.m. German time on such date.

Owner shall return this Guarantee to Guarantor no later than ten (10) days
following the date of its expiry provided that no demands are then outstanding.

This Guarantee may not be assigned or transferred by Guarantor without Owner's
prior written approval.

This Guarantee may not be assigned by Owner without Guarantor's prior written
approval, such approval not to be unreasonably withheld or delayed; provided
that no approval shall be required for the assignment of this Guarantee to
Owner's lenders by way of security and/ or any additional obligor or substitute
appointed pursuant to the Direct Agreement. Guarantor agrees to cooperate with
Owner's lenders and to provide an acknowledgement of any such assignment in such
terms as the lenders may reasonably require. Guarantor hereby waives notice of
acceptance and agrees with Owner that acceptance will be deemed to be effected
with receipt of this Guarantee by Owner.

Any dispute arising out of or in connection with the Guarantee shall be finally
and exclusively settled by arbitration pursuant to the "DEUTSCHE INSTITUTION FUR
SCHIEDSGERICHTSBARKEIT". The venue of arbitration proceedings shall be Berlin.
The language to be used in arbitration proceedings shall be English.

This Guarantee shall be governed by and construed in accordance with the laws of
Germany.

IN WITNESS WHEREOF,[     ] has caused this Guarantee to be executed by its
officers thereunto duly authorized on this (____) day of August, 2002.

By:                                                 By:

Title:                                              Title:


<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 3

                               TECHNICAL EXHIBITS

                        4     OBLIGATIONS OF OWNER

                        4.4   Owner's Permits and Licenses

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 3

                   EXHIBIT 4.4 - OWNER'S PERMITS AND LICENSES

The construction, erection and operation of the new mill is based on five (5)
major permits, see items 1-5 below.

The Owner is responsible for handling, applying and obtaining the following
permits and authorizations. In this activity the Contractor shall supply
assistance to the Owner as set forth in the Contract and according to
Appendix 3, Exhibit 13.

I.   PERMIT BASED ON GERMAN FEDERAL LAW, CONCERNING THE PROTECTION AGAINST
     HARMFUL EFFECTS ON THE ENVIRONMENT

     The permitting Authority is the Regierungsprasidium Magdeburg, Land
     Sachsen-Anhalt (LSA), which obtains assistance from other authorities and
     experts (Sachverstandige) to control technical details.

1.1  The First Partial Permit '1 . Teilgenehmigung fur die Errichtung und den
     Betrieb einer Zellstofffabrik fCir 555,450 ADtId" granted on January 22,
     1998, is still valid to the extent that it has not been altered by the new
     Permit (the "Modifying Permit"). It concerns the erection and operation of
     the whole mill (except the Effluent Treatment Plant). Because Owner has
     made several considerable changes to the original concept, for example *,
     an application for a change in permit (Antrag zur wesentliche Anderung
     der 1 . Teilgenehmiguflg) was submitted to the Authorities on 20 June 2001.

     The Modifying Permit was granted on July 26, 2002 by the
     RegierungspraSiditum Magdeburg, Land Sachsen-Anhalt (LSA). The modification
     (Docket # 46b-44007-227) was made pursuant to Section 1 6 of the German
     Federal Law, concerning the protection against harmful effects on the
     environment.

     The First Partial Permit (to the extent that it has not been altered by the
     Modifying Permit) and the Modified Permit are binding documents for the
     Plant.

1.2  During project execution, the Owner shall, upon receipt of adequate
     information from the Contractor (if related to the Works):

     -    Inform the Authorities in an "Anderungsanzeige", in case of minor
          changes to the mill concept and equipment.

     -    Apply to the Authorities in an "Anderungsantrag", in cases of major
          changes to the mill concept and equipment.

1.3  The Owner shall apply for a second Partial Permit "2. Teilgenehmiguflg'
     according to `Dampfkesselverordnung" (The Steam Boilers Act). Owner shall
     submit this application to the Authorities after Owner has received the
     required design specifications and construction drawings from Contractor.
     The permitting procedure of the Authorities will require considerable time.

      Zellstoff Stendal GmbH Kraft Pulp Mill Projec - Appendix 3 - Exhibit 4.4 -

* Mercer has made an application to the SEC to redact this information. The
  information has been filed separately with the SEC.

                                                                          Page 1
<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

2.   APPROVAL OF THE PLAN TO CONSTRUCT AND OPERATE THE EFFLUENT TREATMENT PLANT
     FOR THE STENDAL PULP MILL (Planteststellungsverfahren)

     The approving Authority is the HegierungsprasidiUrfl Magdeburg, Land
     Sachsen-Anhait (LSA).

     An approval 'Plant esstellungSbesChlUSS fur den Bau und Betrieb einer
     Abwasserbehandlungwsantage der Zellstofffabrik Stendal" was issued on 11
     September 1 998. A new application "Antrag auf Planfeststellung nach
     Section 155 Wasser Gesetz LSA fur Bau und Betrieb einer
     AbwasserbehandluflgSanlage zugehorig zur geplanten Zellstofffabrik rn
     lndustrie- und Gewerbepark Altmark", was submitted to the Authorities on 26
     June 2001.

     The approval for the Plant (PlanfeststellungsbeSchluSS) (Docket #
     43.2.13-62632-62-2001) was granted on July 26, 2002, being a binding
     document for the Plant.

3.   Permit to withdraw surface water FROM THE ELBE River (Wasserrechtliche
     Bewilligung fur die Entnahrne von OberflachenwasSer aus der Elbe)

     Permitting Authority is the Regierungsprasidiufll Magdeburg, Land
     Sachsen-Anhalt (LSA).

     The present permit 'Wasserrechtliche Bewilligung zur Entnahme von Rohwasser
     aus der Elbe" was approved on 6 November 1998 and is still valid, being a
     binding document for the Plant.

     This permit is satisfactory to the Contractor. No change in the permit is
     foreseen or has been applied for.

4.   PERMISSION TO DISCHARGE CLEANED EFFLUENT INTO THE ELBE River (Gehobene
     Erlaubnis zur Einleitung von Abwasser in die Elbe)

     Permitting Authority is the Regierungsprasidiurn Magdeburg, Land
     Sachsen-Anhalt (LSA).

     There is no existing permit.

     An application for "Gehobene Erlaubnis zur Einleitung von Abwasser in die
     Elbe" (permit for discharge of cleaned effluent into the Elbe River) was
     submitted to the Authorities on 24 October 2001. The permit is expected to
     be approved in due course.

     The "Plant esstellungsbeschluss fur den Bau und Betrieb einer
     Abwasserbehandlullgsafllage der Zellstofffabrik Stendal" defines
     environmental compatibility and all limits for the emissions into the Elbe
     River.

5.   PERMIT TO CONSTRUCT AND OPERATE facilities FOR THE WATER INTAKE AND
     EFFLUENT OUTFALL AT THE ELBE RIVER (Genehmigung fur Errichtung von einem
     Em- BZW AUSLAUFBAUWERK am Ufer der Elbe).

     Permitting Authority is the Wasser- und Schifffahrtsarflt (Water and
     Shipping Authority) Magdeburg.

      Zellstoff Stendal GmbH Kraft Pulp Mill Projec - Appendix 3 - Exhibit 4.4 -
                                                                          Page 2
<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

     The present permit `Strom- und Schifffahrtspolizeiliche Genehmigung fur
     Errichtung von einem Em- bzw Auslaufbauwerk am Ufer der Elbe" was granted
     on April 15, 2002, being a binding document for the Plant.

6.   OTHER PERMITS AND APPROVALS

     APPROVAL TO CONSTRUCT PIPELINES AND CABLES FROM MAIN MILL SITE TO THE SITE
     AT THE ELBE RIVER.

     Owner has made agreements with the owner(s) of the land where the pipelines
     and electrical and signal cables will be located between the main site arid
     the Elbe River site. Owner shall secure approval for Contractor's use of
     this road and for construction by Contractor of the piping and electrical
     works between the two sites, and the construction of approximately 50
     meters of access road between these two sites.

     Owner shall apply for certain permits related to water drainage.

7.   OTHER PERMITS.

     With regard to all other registrations, licenses and permits which may be
     required by the authorities and which are required to be in the name of the
     Owner, for the temporary or permanent use of land or facilities,
     construction and operation of the Plant, permission for construction works
     during the night and weekend times, Start-up, testing and operation of the
     Plant (other than those Permits required to be obtained by the Owner as
     specified in this Appendix 3, Exhibit 4.4, except items 1.3 and 5), and if
     directly related to the Works, the Contractor shall;

     a) identify all such registrations, licenses and permits, and;

     b) provide correct and complete information, data, documents and
     applications related thereto, and;

     c) provide all necessary assistance to the Owner to obtain, maintain, and
     if necessary, amend such registrations, licenses and permits, all in due
     time for the completion of the Plant in accordance with the Time Schedule.

     The Contractor is responsible for obtaining any permits, which are required
     to be applied for in the name of the Contractor, and as indicated in
     Appendix 3, Exhibit 13.

     The Contractor shall provide to the Owner for its review, approval and
     signature, one (1) original copy of any applications prepared by Contractor
     pursuant to this Exhibit 4.4.

     The following permits are entirely the responsibility of the Owner and the
     Contractor shall not support or provide assistance to the Owner in any way
     for any research, preparation, submission or any other activity, or be
     involved in any discussion with the authorities, except as otherwise
     provided in the Contract:

          1.   Genehmigung des Landesbeauftragten fur Eisenbahnen in Sachsen -
               Anhalt.

      Zellstoff Stendal GmbH Kraft Pulp Mill Projec - Appendix 3 - Exhibit 4.4 -
                                                                          Page 3

<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

          2.   Bau-/BetirebsgeflehmigUflg fur die Eisenbahnanbindung und die
               eventuell notwendige EisenbahnbrUcke.

          3.   Genehmigung zur Sondernutzung der Oftentlichen Straf3en (except
               as required for Contractor's Works).

          4.   Eventuell riotwenciige BO8 Funkzulassung.

          5.   Gewerbeamtliche Genehmigung fur den Betrieb der Kantine.

          6.   Genehmigung fur Abtransport und Deponie von Abfallen aus der
               Zellstoffproduktion (Abfallwirtschaftsgesetz).

          7.   Forstwirtschaftliche Genehm igungen fur die Holzbeschaffung.

          8.   NutzungsgerlehmigLlflg (Durchleitungsrecht) fur Rohrleitungen auf
               nicht eigenem Gelande.

          9.   Genehmigungen im Zusammenhang mit Personal und Arbeitsrecht fur
               Betriebspersonal.

          10.  Erfullung von Auflagen aus dem Feuerwehrgesetz Sachsen-Anhalt
               (except if part of EPC Contract).

8.   APPLICATIONS FOR PERMIT MODIFICATIONS

     The following applications for Permit modifications have been filed by the
     Owner:

     a)   Building size modifications for the * were FILED on July 16, 2002.

     b)   A building size modification for the * was filed on August 9, 2002.

     c)   Building size modifications for the * and the * were filed on
          August 12, 2002.

     d)   A modification to replace the * with * in the * was filed on
          August 12, 2002.

     e)   Modifications to the size of the * and the * were filed on
          August 21, 2002.

      Zellstoff Stendal GmbH Kraft Pulp Mill Projec - Appendix 3 - Exhibit 4.4 -

* Mercer has made an application to the SEC to redact this information. The
  information has been filed separately with the SEC.

                                                                          Page 1
<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 3

                                   Exhibit 20:

                                  Attachment 1


<Page>

Appendix 3 Exhibit 20 Attachment 1
The milestones set out below and identified by an asterisk, are "Milestones"
for the purposes of the Contract

<Table>
Activity    System and                                                                                          Months from
#          Department No   Milestone Description                                                             Commencement Date
<S>        <C>             <C>                                                                               <C>
*                          Advance payment due on or before Commencement Date                                      0
*                          Advance payment month 1 after Commencement Date                                         1
*               *          Foundation for stair case tower poured (completed)                                      1
*               *          All flow sheets and layout drawings for lst approval                                    2
*               *          Stair case tower concrete structure completed                                           2
*               *          All Pouring of foundations for the departments completed                                3
*               *          Pouring of foundations for boiler completed                                             3
*               *          All flow sheets and layout drawings for 1st approval                                    3
*               *          Pouring of all foundations for * completed                                              3
*               *          All Slabs on grade poured                                                               4
*               *          Pouring of foundations for * completed                                                  4
*               *          Pouring of foundations for building (completed)                                         4
*               *          Pouring of foundations for building completed                                           4
*               *          All flow sheets and layout drawings approved                                            5
*               *          Pouring of foundations for * completed                                                  5
*               *          Pouring of foundations for * completed                                                  5
*               *          Slab on grade poured (completed)                                                        5
*               *          Building foundation poured (completed)                                                  5
*               *          Pouring of foundations for * completed                                                  5
*               *          Delivery 1, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          5
*               *          Slab on grade poured (completed)                                                        5
*               *          Slab on grade poured (completed)                                                        5
*               *          Pouring of foundations for building completed                                           5
*               *          Pouring of foundations for * completed                                                  6
*               *          Slab on grade poured * (completed)                                                      6
*               *          Slab on grade poured * (completed)                                                      6
*               *          Slab on grade poured (completed)                                                        6
*               *          All flow sheets and layout drawings approved                                            6
*               *          Pouring of foundations for * completed                                                  6
*               *          Delivery 1, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          6
*               *          Pouring of foundations for *                                                            6
*               *          Pouring of foundations for *                                                            6
*               *          Pouring of foundations for *                                                            6
*               *          60% of the value of Contractor's Suppliers' subcontracts signed                         6
*               *          Superstructures completed                                                               7
*               *          Slab on grade poured * (completed)                                                      7

                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

App3 Exh 20 Attach 1 Rev 020823                                            1(7)

<Page>

*               *          Pouring of foundations for * completed                                                  7
*               *          Pouring of foundations for * (completed)                                                7
*               *          Delivery 1, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                          7
*               *          Slab on grade poured for complete * (completed)                                         7
*               *          Delivery 1, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          7
*               *          Slab on grade poured (completed)                                                        7
*               *          Delivery 2, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          7
*               *          Delivery 1, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          7
*               *          Pouring of foundations and piers for * completed                                        7
*               *          Slabs on grade poured (completed)                                                       7
*               *          Slab on grade poured (completed)                                                        7
*               *          Delivery 1, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          8
*               *          All elevated floor slabs poured                                                         8
*               *          Slab on grade poured * (completed)                                                      8
*               *          Superstructure completed for *                                                          8
*               *          Superstructure completed for *                                                          8
*               *          Pouring of foundations for * storage completed                                          8
*               *          Delivery 2, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                          8
*               *          Pouring of foundations for * completed                                                  8
*               *          Delivery 2, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          8
*               *          Slab on grade poured for * building completed                                           8
*               *          Delivery 2, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          8
*               *          Delivery 2, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          8
*               *          Superstructure completed                                                                8
*               *          Superstructure for buildings completed                                                  8
*               *          Pouring of foundations for all equipment completed                                      8
*               *          Mill roads rough in place                                                               8
*               *          Graphic configuration of all Departments frozen                                         9
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          9
*               *          All perimeter walls completed                                                           9
*               *          Delivery 1, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          9
*               *          All perimeter walls completed for * building                                            9
*               *          All perimeter walls completed for * building                                            9
*               *          Delivery 1, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          9
*               *          All superstructure for building completed                                               9
*               *          Delivery 3, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                          9
*               *          Delivery 3, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          9
*               *          Pouring of foundations for building (completed)                                         9
*               *          Delivery 3, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          9
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          10
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          10
*               *          All * installed                                                                         10

                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

App3 Exh 20 Attach 1 Rev 020823                                            2(7)

<Page>

*               *          Delivery 2, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          10
*               *          Pouring of foundations for * completed                                                  10
*               *          Delivery 4, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                          10
*               *          All * installed                                                                         10
*               *          Superstructure (frame) completed for * building                                         10
*               *          Delivery 1, 1/3 ot the contractors suppliers' total delivery based on
                             freight tons                                                                          10
*               *          Slab on grade poured (completed)                                                        10
*               *          Delivery 3, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          10
*               *          All supporting steel structure completed                                                10
*               *          All perimeter walls completed                                                           10
*               *          Delivery 1, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          10
*               *          Slab on grade poured for all equipment completed                                        10
*               *          Pouring of foundations for building completed                                           10
*               *          * structure completed                                                                   10
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          Delivery 3, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          All perimeter walls completed                                                           11
*               *          Delivery 1, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          * poured for * (completed)                                                              11
*               *          Superstructure (frame) for complete * building completed                                11
*               *          Delivery 4, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          Superstructure completed                                                                11
*               *          Delivery 4, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          All * installed                                                                         11
*               *          Delivery 4, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          Delivery 3, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          Delivery 2, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          All perimeter walls completed                                                           11
*               *          Delivery 1, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          Delivery 1, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          11
*               *          Slab on grade poured (completed)                                                        11
*               *          All * installed                                                                         12
*               *          * installed                                                                             12
*               *          * completed                                                                             12
*               *          * installed                                                                             12
*               *          All building services mechanically completed                                            12
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          12
*               *          * (completed)                                                                           12
*               *          Delivery 5, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                          12
*               *          Elevated floor slabs poured for complete * building                                     12
*               *          All * installed                                                                         12

                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

App3 Exh 20 Attach 1 Rev 020823                                            3(7)

<Page>

*               *          All * installation                                                                      12
*               *          Elevated floor slabs poured for * building completed                                    12
*               *          Perimeter walls completed for * building                                                12
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          12
*               *          All perimeter walls completed                                                           12
*               *          * platform poured (completed)                                                           12
*               *          Delivery 4, 1/5 of  the contractors suppliers' total delivery based on
                             freight tons                                                                          12
*               *          * ready tor insulation                                                                  12
*               *          Delivery 3, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          12
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          12
*               *          Delivery 2, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          12
*               *          All superstructure completed                                                            12
*               *          All building services mechanically completed                                            13
*               *          * mechanically completed                                                                13
*               *          Delivery 4, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          13
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          13
*               *          * poured for * (completed)                                                              13
*               *          Slab on grade poured for * (completed)                                                  13
*               *          Perimeter walls for complete * building completed                                       13
*               *          *                                                                                       13
*               *          Delivery 5, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          13
*               *          All *                                                                                   13
*               *          Delivery 5, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          13
*               *          Building services mechanically completed                                                13
*               *          Delivery 5, 1/5 of the contractors suppliers' total delivery based on
                             freight tons                                                                          13
*               *          Mechanical installation of all * completed                                              13
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          13
*               *          Delivery 3, 1/3 of the contractors suppliers' total delivery based on
                             freight tons                                                                          13
*               *          All elevated floor Slabs poured (completed)                                             13
*               *          *                                                                                       13
*               *          * mechanically installed                                                                14
*               *          *                                                                                       14
*               *          *                                                                                       14
*               *          * installed                                                                             14
*               *          * at Site                                                                               14
*               *          Slab on grade poured for * (completed)                                                  14
*               *          Installation of * completed                                                             14
*               *          Installation of * completed                                                             14
*               *          Installation of * completed                                                             14
*               *          * installed                                                                             14
*               *          All * ready for insulation                                                              14
*               *          All * installation                                                                      14

                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

App3 Exh 20 Attach 1 Rev 020823                                            4(7)

<Page>

*               *          All building services mechanically completed                                            14
*               *          All building services mechanically completed                                            14
*               *          Installation of * completed                                                             14
*               *          Building ready for *                                                                    14
*               *          Final approval of spare part list                                                       14
*               *          Factory Acceptance Tests completed for all Departments                                  15
*               *          * mechanically installed                                                                15
*               *          Installation of * mechanically completed                                                15
*               *          * concrete areas in * completed                                                         15
*               *          Slab on grade poured for * (completed)                                                  15
*               *          * mechanically installed                                                                15
*               *          Delivery 6, 1/6 of the contractors suppliers' total delivery based on
                             freight tons                                                                          15
*               *          All electrical switch gears mechanically installed                                      15
*               *          * mechanically installed                                                                15
*               *          All * mechanically installed                                                            15
*               *          All * mechanically installed                                                            15
*               *          * installed                                                                             15
*               *          All * installed                                                                         15
*               *          Delivery 4, 1/4 of the contractors suppliers' total delivery based on
                             freight tons                                                                          15
*               *          All * installed                                                                         15
*               *          All * completed                                                                         15
*               *          * operational                                                                           15
*               *          All * installed                                                                         16
*               *          * completed and authority approved                                                      16
*               *          Installation of * mechanically completed                                                16
*               *          * mechanically installed                                                                16
*               *          All * completed                                                                         16
*               *          Building services mechanically completed for * building                                 16
*               *          All * installed                                                                         16
*               *          All *                                                                                   16
*               *          All * installed                                                                         16
*               *          Installation of * completed                                                             16
*               *          All steel structure completed                                                           16
*               *          All perimeter walls completed                                                           16
*               *          * completed                                                                             16
*               *          * mechanically installed                                                                16
*               *          All Operation, Maintenance Manuals completed and delivered                              16
*               *          All * installed                                                                         17
*               *          * mechanically installed                                                                17
*               *          * installed                                                                             17
*               *          *                                                                                       17
*               *          Mechanical Completion Certificate                                                       18


                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

App3 Exh 20 Attach 1 Rev 020823                                            5(7)

<Page>

*               *          Mechanical Completion Certificate                                                       18
*               *          * completed and authority approved                                                      18
*               *          All building services mechanically completed                                            18
*               *          Site Installation Tests completed                                                       19
*               *          Mechanical Completion Certificate                                                       19
*               *          All architectural finishes completed                                                    19
*               *          Mechanical Completion Certificate of administration building                            19
*               *          * completed                                                                             19
*               *          Mechanical Completion Certificate                                                       19
*               *          * ready for use                                                                         19
*               *          System Start-up                                                                         20
*               *          Mechanical Completion Certificate                                                       20
*               *          Mechanical Completion Certificate                                                       20
*               *          Mechanical Completion                                                                   20
*               *          Mechanical Completion Certificate                                                       20
*               *          *                                                                                       20
*               *          Mechanical Completion Certificate                                                       20
*               *          * ready for use                                                                         20
*               *          * ready for use                                                                         20
*               *          System Start-up                                                                         21
*               *          System Start-up                                                                         21
*               *          Mechanical Completion Certificate                                                       21
*               *          Mechanical Completion Certificate                                                       21
*               *          System Start-up                                                                         21
*               *          System Start-up                                                                         21
*               *          Mechanical Completion Certificate                                                       21
*               *          Mechanical Completion Certiticate                                                       21
*               *          System Start-up                                                                         22
*               *          System Start-up                                                                         22
*               *          Mechanical Completion Certificate                                                       22
*               *          Mechanical Completion Certificate                                                       22
*               *          System Start-up                                                                         22
*               *          System Start-up                                                                         22
*               *          System Start-up                                                                         22
*               *          System Start-up                                                                         22
*               *          Mechanical Completion Certificate of the Works                                          22
*               *          Certificate of Operational Acceptance                                                   23
*               *          Certificate of Operational Acceptance                                                   23
*               *          System Start-up                                                                         23
*               *          System Start-up                                                                         23
*               *          Certiticate of Operational Acceptance                                                   24
*               *          Certificate of Operational Acceptance                                                   24


                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.

App3 Exh 20 Attach 1 Rev 020823                                            6(7)

<Page>

*               *          System Start-up and production of  *                                                    24
*               *          Mill Fence 80% closed                                                                   24
*               *          Certificate of Operational Acceptance                                                   25
*               *          Certificate of Operational Acceptance                                                   25
*               *          Certificate of Operational Acceptance                                                   25
*               *          Certificate of Operational Acceptance                                                   25
*               *          Certificate of Operational Acceptance                                                   25
*               *          Certificate of Operational Acceptance                                                   25
*               *          Operational Acceptance Certificates for the Works                                       25
*               *          Acceptance of the Works                                                                 28
*               *          Roads, paved areas, lawns and landscaping completed                                     28
*               *          Schedule B Test Certificate                                                             30
*               *          Schedule B Test Certificate                                                             31
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          Schedule B Test Certificate                                                             34
*               *          All Schedule B Tests completed                                                          34

                           *Mercer has made an application to the SEC to redact this information.
                            The information has been filed separately with the SEC.
</Table>

App3 Exh 20 Attach 1 Rev 020823                                            7(7)


<Page>

[RWE SOLUTIONS LOGO]

                                    ZELLSTOFF
                                  STENDAL GmbH

                                   APPENDIX 4

                                    BASE CASE


<PAGE>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model
Sources & Applications and Key Results

<TABLE>
-----------------------------------------------------------------------------------------------------------------------------
SOURCES OF FUNDS (EURO '000S AT COMPLETION)                              APPLICATION OF FUNDS (EURO '000S AT COMPLETION)
<S>                                         <C>           <C>            <C>                             <C>        <C>

Shlders Share Capital - Initial Equity         15.000       1.4%         Total Construction Costs                           *
Shlders Subordinated Loan                                                Construction Period Costs                          *
  - Initial Equity                             55.000       5.3%                                                      -------
Shlders Subordinated Loan                                                Total Capital Expenditures                   901.800
  - Standby Equity 1 funding Shortfalls             0       0.0%
Shlders Subordinated Loan
  - Standby Equity 1 funding ERA               15.000       1.4%
Shlders Subordinated Loan
  - Standby Equity 2 funding Shortfalls             0       0.0%
Shlders Subordinated Loan                                                Total Financing Charges                            *
  - Standby Equity 2 funding DSRA              15.000       1.4%
                                              -------      -----         DSRA - Debt Funded Amount                     42.000
Shareholders Equity                           100.000       9.6%
                                                                         DSRA - Equity Funded Amount     15.000        15.000
Start-Up Net Oper. Cashflows   Yes                  *          *
                                                                         ERA - Equity Funded Amount      15.000        15.000
Government Grant - Investitionszuschuesse          *          *                                                      -------
Government Grant - Investitionszulage              *          *         Total Finance Costs                                *
                                              -------      -----
Total Grant Funding                           374.168          *         Costs Overrun                                      *

Total Project Senior Debt                                                Total Applications                         1.037.933
  (Excl. Tranche E)                           637.619      61.4%

Total Funding                               1.037.933     100.0%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

          TOTAL SENIOR DEBT FACILITIES - COVER RATIOS (CHART OMITTED)*

<TABLE>
-------------------------------------------------------------------------------
KEY RESULTS
<S>                                                                 <C>     <C>
Pre-Financing, Pre-tax Nominal Project IRR                                   *
Project NPV @     31.Jul 02                                                  *
ASSUMED PRE-TAX NOMINAL DISCOUNT RATE:                               *

Equity NPV @      31.Jul 02                                                  *
ASSUMED POST-TAX NOMINAL DISCOUNT RATE:                              *

Post-Tax Equity IRR                                                          *

Post Tax Debt Service Cover Ratios (After 1st Repay't Date)
Minimum Annual DSCR (Excl. Repay't of WC)                                    *
Average Annual DSCR (Excl. Repay't of WC)                                    *

Pulp Price Coverage (Average Euro/t, 2001 Prices)
Pulp Price after Discount (incl. Power Sales)                                *
Real Pulp Price Covering Opex                                                *
Real Pulp Price Covering DS                                                  *
Real Pulp Price Covering Opex & DS (Excl. Repayment of WC De)                *
-------------------------------------------------------------------------------
</TABLE>

<TABLE>
-------------------------------------------------------------------------------
KEY PROJECT DATES
<S>                                                                   <C>
Financial Close Date                                                 31. Jul 02
Start-Up Date                                                        30. Jun 04
End of Capitalization Date                                           30. Nov 04
End of Start-Up Period                                               30. Nov 04
End of Modelling Date                                                30. Jun 24
-------------------------------------------------------------------------------
</TABLE>

<TABLE>
--------------------------------------------------------------------
SCENARIO SELECTION
<S>                                                              <C>
Base Case                                                         *
Combined Downside Case                                            *
--------------------------------------------------------------------
</TABLE>

*Mercer has made an application to the SEC to redact this information.
The information has been filed separately with the SEC.


Babcock & Brown Limited                                           Page 1 of KEY

<PAGE>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model
Construction Period Assumptions

<TABLE>
-------------------------------------------------------------------------------
CAPITAL EXPENDITURE (EURO '000S)
<S>                                                            <C>       <C>
CONSTRUCTION COSTS

Pulp Mill Construction Costs/EPC Contractor                      *            *
Consumables for Construction/EPC Contractor                      *            *
Construction Period Insurance/EPC Contractor                     *            *
Pulp Mill Construction Costs/ZSG Part                            *            *
Pulp Mill Construction Costs/ZSG Part/Contingency                *            *
Mill Site Acquisition Costs                                      *            *
Site Preparations                                                *            *
Site Infrastructure Connecting Cost                              *            *
                                                            ------      -------
Total Construction Costs                                    100.0%      780.100


CONSTRUCTION PERIOD COSTS

Pre-Development Costs & Engineering Prior to 1/1/99              *            *
Pre-Development Costs & Engineering Post to 1/1/99               *            *
Pre-Development Costs & Engineering - Finance                    *            *
Ongoing Project Development & Permits (Capitalised)              *            *
Ongoing Project Development Costs (Expensed)                     *            *
Construction Period Insurance/ZSG                                *            *
Project & Site Construction Management                           *            *
Project Monitoring/Bank Advisers                                 *            *
Owner Operating Start-Up Procedures, Labor                       *            *
Recruitment & Training Costs                                     *            *
Mobile Equipment                                                 *            *
Working Capital Requirement                                      *            *
                                                            ------      -------
Total Construction Period Costs                             100.0%            *
-------------------------------------------------------------------------------
</TABLE>

<TABLE>
-------------------------------------------------------------------------------
FINANCING COSTS (EURO '000S)
<S>                                                                     <C>
Federal/State On-Going Fee (monthly)                                          *
Federal/State On-Going Fee (six monthly)                                      *
Consulting Fees                                                               *
Interest During Construction                                                  *
Commitment Fees                                                               *
Bank Agency Fees                                                              *
                                                                        -------
Total Financing Charges                                                  64.133
DSRA - Debt Funded Amount                                                42.000
DSRA - Equity Funded Amount                                              15.000
ERA - Equity Funded Amount                                               15.000
                                                                        -------
Total Financing Costs                                                         *
-------------------------------------------------------------------------------
</TABLE>

<TABLE>
-------------------------------------------------------------------------------
FUNDING REQUIREMENT SUMMARY (EURO '000S)
<S>                                               <C>                   <C>
Total Construction Costs                                                      *
Construction Period Costs                                                     *
Total Financing Costs                                                         *
Costs Overrun                                                                 *
                                                                      ---------

Total Funding Requirements                        check: 0.00         1.037.933
-------------------------------------------------------------------------------
</TABLE>

*Mercer has made an application to the SEC to redact this information.
The information has been filed separately with the SEC.


Babcock & Brown Limited                                           Page 2 of KEY

<PAGE>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model
Construction Period Funding (Euro '000s)

<TABLE>
--------------------------------------------------------------------------------------------------------
PROJECT SENIOR DEBT FACILITIES

<S>                                                                           <C>      <C>       <C>
Commitment Amount
Senior Debt - Tranche A                                                       check:   464.550   464.550
Senior Debt - Tranche B                                                       check:   121.691   121.691
Senior Debt - Tranche C                                                       check:    42.000    42.000
Senior Debt - Tranche D1                                                                           9.378
                                                                                                 -------
Senior Debt - Base Amount                                                     check:     0.00    637.619
Senior Debt - Tranche D2                                                                          30.000
                                                                                                 -------
Total Project Senior Debt Facilities before Tranche E                                            667.619
Senior Debt - Tranche E                                                       check:   116.381   160.000
                                                                                                 -------
Total Project Senior Debt Facilities                                                             827.619
Senior Debt - Tranche A is eligible for Long-Term Federal/State Guarantee
Senior Debt - Tranche B is eligible for Short-Term Federal/State Guarantee
Senior Debt - Tranche C & D is not eligible for any Federal/State Guarantee
Senior Debt - Tranche E is the Bridging Debt Facility

Finance Costs
Base Interest Rate - Short Term Floating/Swap                                                          *
Agency Fee (Euro '000s p.s.)                                                                           *

Federal/State Guarantee on Tranche A & B
% of Total Facilities                                                                                  *
Federal/State On-Going Fee (monthly)                                          *                        *
Federal/State On-Going Fee (six monthly)                                                               *

SENIOR DEBT - TRANCHE A

Commitment Fee (annual)                                                                           0.375%
Bank Margin (annual)                                                                              0.750%
Cost of Funds (annual)                                                                                 *

SENIOR DEBT - TRANCHE B                                        -------------------------------
                                                                Tranche B4 Drawdowns   60.000
                                                                Tranche B1 Drawdowns   20.564
Commitment Fee (annual)                                         Tranche B2 Drawdowns   20.564     0.250%
Bank Margin (annual)                                            Tranche B3 Drawdowns   20.564     0.600%
Cost of Funds                                                                  check     0             *
                                                               -------------------------------
SENIOR DEBT - TRANCHE C

Commitment Fee (annual)                                                                           0.375%
Bank Margin (annual)                                                                              1.550%
Cost of Funds (annual)                                                                                 *
--------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
-----------------------------------------------------------------------------
SENIOR DEBT - TRANCHE D
<S>                                                                   <C>
Commitment Fee (annual)                                                0.375%
Bank Margin (annual)                                                    1.55%
Cost of Funds (annual)                                                      *

SENIOR DEBT - TRANCHE E

Used Amount                                                                 *
Commitment Fee (annual)                                                0.375%
Base Interest Rate                                                          *
Bank Margin (annual)                                                    1.25%
Cost of Funds                                                               *

SPONSORS EQUITY

Share Capital - Initial Equity                                         15.000
Subordinated Loan - Initial Equity                                     55.000
                                                                      -------
Total Base Equity                                                      70.000
Subordinated Loss - Standby Equity 1                                   15.000
Subordinated Loss - Standby Equity 2                                   15.000
                                                                      -------
Total Equity Commitment                                               100.000
-----------------------------------------------------------------------------
</TABLE>

*Mercer has made an application to the SEC to redact this information.
The information has been filed separately with the SEC.


Babcock & Brown Limited                                           Page 3 of KEY

<PAGE>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model
Construction Period Funding (Euro '000s)

<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
FUNDING ALLOCATION OF COSTS
                                                   Costs Eligible
                                                   for LT Gtee
                                        Total      (Bemessungsgrundlage   Costs Eligible      Costs Not           Reference Basis
                                        Costs       MSR)                  for ST Gtee         Eligible for Gtee   for Zulage
                                        -------------------------------------------------------------------------------------------
<S>                                     <C>         <C>       <C>         <C>       <C>       <C>       <C>       <C>       <C>
                                                    (l=yes)               (l=yes)              (l=yes)            (l=yes)
Pulp Mill Construction
  Costs/EPC Contractor                        *        *           *         *          *         *         *        *          *
Consumables for Construction/EPC
  Contractor                                  *        *           *         *          *         *         *        *          *
Construction Period Insurance/EPC
  Contractor                                  *        *           *         *          *         *         *        *          *
Pulp Mill Construction Costs/ZSG Part         *        *           *         *          *         *         *        *          *
Pulp Mill Construction Costs/ZSG Part/
  Contingency                                 *        *           *         *          *         *         *        *          *
Mill Site Acquisition Costs                   *        *           *         *          *         *         *        *          *
Site Preparation                              *        *           *         *          *         *         *        *          *
Site Infrastructure Connecting Cost           *        *           *         *          *         *         *        *          *
Pre-Development Costs & Engineering
  Prior to 1/1/99                             *        *           *         *          *         *         *        *          *
Pre-Development Costs & Engineering
  Post to 1/1/99                              *        *           *         *          *         *         *        *          *
Pre-Development Costs & Engineering
  - Finance                                   *        *           *         *          *         *         *        *          *
Ongoing Project Development & Permits
  (Capitalised)                               *        *           *         *          *         *         *        *          *
Ongoing Project Development Costs
  (Expensed)                                  *        *           *         *          *         *         *        *          *
Construction Period Insurance/ZSG             *        *           *         *          *         *         *        *          *
Project & Site Construction Management        *        *           *         *          *         *         *        *          *
Project Monitoring/Bank Advisers              *        *           *         *          *         *         *        *          *
Owner Operating Start-Up Procedures,
  Labor                                       *        *           *         *          *         *         *        *          *
Recruitment & Training Costs                  *        *           *         *          *         *         *        *          *
Mobile Equipment                              *        *           *         *          *         *         *        *          *
Interest During Construction - Tranche A      *        *           *         *          *         *         *        *          *
Other Financing Charges                       *        *           *         *          *         *         *        *          *
DSRA - Debt Funded Amount                     *        *           *         *          *         *         *        *          *
Reserves - Equity Funded Amount               *        *           *         *          *         *         *        *          *
Working Capital Requirement                   *        *           *         *          *         *         *        *          *
Costs Overrun                                 0        *           0         *          *         *         *        *          *
                                      ---------            ---------                                                     --------

Total Funding Requirement             1.037.933                    *                                                            *
Total Base Equity          check 0.00                       (70.000)                  (0)
Start-Up Net Oper. Cashflows                                (26.146)
Total Grant                                                (274.168)
Senior Debt - Tranche D1                                     (9.378)
Senior Debt - Tranche D2                                                               0
                                                          ---------
Senior Debt - Tranche A                                     464.550              -------
Senior Debt - Tranche B                                                          121.691               ------
Senior Debt - Tranche C                                                                                42.000
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

*Mercer has made an application to the SEC to redact this information.
The information has been filed separately with the SEC.


Babcock & Brown Limited                                           Page 4 of KEY

<PAGE>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model
Construction Period Funding (Euro '000s)

<TABLE>
-------------------------------------------------------------------------------
TAX CATEGORISATION
<S>                                                         <C>         <C>
Depreciation over Asset Life
                                                            (l=yes)
Pulp Mill Construction Costs/EPC Contractor                    *        716.000
Consumables for Construction/EPC Contractor                    *              *
Construction Period Insurance/EPC Contractor                   *              *
Pulp Mill Construction Costs/ZSG Part                          *              *
Pulp Mill Construction Costs/ZSG Part/Contingency              *              *
Mill Site Acquisition Costs                                    *              *
Site Preparation                                               *              *
Site Infrastructure Connecting Cost                            *              *
Pre-Development Costs & Engineering Prior to 1/1/99            *              *
Pre-Development Costs & Engineering Post to 1/1/99             *              *
Pre-Development Costs & Engineering - Finance                  *              *
Ongoing Project Development & Permits (Capitalised)            *              *
Ongoing Project Development Costs (Expensed)                   *              *
Construction Period Insurance/ZSG                              *              *
Project & Site Construction Management                         *              *
Project Monitoring/Bank Advisers                               *              *
Owner Operating Start-Up Procedures, Labor                     *              *
Recruitment & Training Costs                                   *              *
Mobile Equipment                                               *              *
Costs Overrun                                                  *              *
IDC (Tranche A, B, C, D, E)              Until Start-Up                       *
                                                                        -------
Costs Depreciated over Asset Life                                             *

COSTS EXPENSED

IDC (Tranche A, B, C, D, E)              After Start-Up                       *
Other Finance Charges                                                         *
Pre-Development Costs & Engineering - Finance                                 *
Ongoing Project Development Costs (Expensed)                                  *
Construction Period Insurance/ZSG                                             *
Project Monitoring/Bank Advisers                                              *
Recruitment & Training Costs                                                  *
Mobile Equipment                                                              *
                                                                        -------
Pre-Completion Costs Expensed                                                 *

COSTS NOT ELIGIBLE FOR DEPRECIATION                                           *

Mill Site Aquisition Costs                                                    *
Site Preparation                                                              *
Site Infrastructure Connecting Cost                                           *
                                                                        -------
Costs not Eligible for Depreciation                                           *
-------------------------------------------------------------------------------
</TABLE>

<TABLE>
-------------------------------------------------------------------------------
EU OWN CONTRIBUTION TEST
                                                              Nominal   Present
Discount Rate:   *                                              Value     Value
<S>                                                           <C>       <C>
Reference Basis for Multi-Sectorial Framework                       *         *

Shareholders' Base Equity                                      70.000    70.000
Shareholders' Equity Funding Shortfalls                             0         0
Start-Up Cashflows Gteed by Shareholders                            *         *
Senior Debt - Unguaranteed Tranche A                                *         *
Senior Debt - Tranche D                                             *         *
Senior Debt - Tranche E                                             *         *
                                                               ------    ------
Total Own Contribution                                              *         *

Own Contribution to Eligible Capital Costs Ratio
  (must be at least 25%)                                            *         *
-------------------------------------------------------------------------------
</TABLE>

<TABLE>
-------------------------------------------------------------------------------
EU MULTI-SECTOR TEST
                                                              Nominal   Present
                                                                Value     Value
<S>                                                           <C>       <C>
Reference Basis for Multi-Sectorial Framework                       *         *
Tranche A Debt - Guaranteed                                         *         *

Total Grant Paid                                                    *         *
Subsidy Equivalent - Guaranty for Tr A                              *         *
                                                               ------    ------
Total State Support                                                 *         *

Total State Support Ratio Test (Must be
  LESS THAN OR EQUAL TO Adjusted Max. Ratio)                                  *

Maximum Theoretical Ratio
Factor 1 Adjustment                                                           *
Factor 2 Adjustment                                                           *
Factor 3 Adjustment                                                           *
Adjusted Maximum Ratio                                                        *
-------------------------------------------------------------------------------
</TABLE>

*Mercer has made an application to the SEC to redact this information.
The information has been filed separately with the SEC.


Babcock & Brown Limited                                           Page 5 of KEY

<PAGE>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model
Operation Period Funding (Euro '000s)

<TABLE>
-------------------------------------------------------------------------------------------------
PROJECT DEBT
<S>                                                                     <C>
Base Interest Rate - Swap (Hedging Agreement)                                                   *
Total Debt Maturity (Years)                                                                 15.17

Debt Servicing Periods
End of month number                         3 of Each Year
End of month number                         9 of Each Year

Reserve Accounts
Required Debt Service Reserve Amount                                    12 Months Looking Forward

Agency Fee (Euro '000s p.s.)                                                                   50

Federal/State Guarantee
% of Total Facilities (Tranche A & B)                                                           *
Federal/State Fee Applied to Gteed Debt Amount                                                  *

First Repayment (Not Applicable to Tranche E)
Total Project Senior Debt Facilities Maximum Amount before Distribution                         *
Repayment Amount to Reduce Tranche A+B+C down to the Required Level                             *
First Repayment Date                                                                    30.Sep 06

SENIOR DEBT - TRANCHE A

Used Amount                                                                                     *
Bank Margin (annual)                                                                       0.750%
Cost of Funds (annual)                                                                          *
Total Debt Maturity (Years)                                                                 15.17

SENIOR DEBT - TRANCHE B

Used Amount                                                                                     *
Bank Margin for Guaranteed Amount (annual)                                                 0.600%
Cost of Funds or Guaranteed Amount (annual)                                                     *
Bank Margin for Unguaranteed Amount (annual)                                               1.500%
Cost of Funds or Unguaranteed Amount (annual)                                                   *
Total Debt Maturity (Years)                                                                 15.17
-------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
-----------------------------------------------------------------------------
SENIOR DEBT - TRANCHE C
<S>                                                                   <C>
Base Interest Rate                                                          *
Used Amount                                                            42.000
Bank Margin (annual)                                                   1.550%
Cost of Funds                                                               *

SENIOR DEBT - TRANCHE D

Base Interest Rate                                                          *
Bank Margin (annual)                                                   1.550%
Cost of Funds                                                               *

SENIOR DEBT - TRANCHE E

Base Interest Rate                                                          *
Bank Margin (annual)                                                   1.250%
Cost of Funds                                                               *

SPONSORS SUBORDINATED LOAN

Sub. Debt Total Interest Rate                                               *
Total Debt Maturity (Years)                                             15.67
-----------------------------------------------------------------------------
</TABLE>

*Mercer has made an application to the SEC to redact this information.
The information has been filed separately with the SEC.


Babcock & Brown Limited                                           Page 6 of KEY

<PAGE>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model
Operating Period Assumptions

<TABLE>
-----------------------------------------------------------------------------------
PULP PRICE (2001 PRICES)

<S>                                                             <C>          <C>
Base CIF Trend Pulp Price - Before Discount (US$/t)                               *
Base CIF Trend Pulp Price - After Discount (US$/t)                                *
Downside CIF Cyclical Pulp Price - After Discount (US$/t)                         *

Long-Term Euro/US$ Exchange Rate - Base Case                    1                 *
Long-Term Euro/US$ Exchange Rate - Downside Case                0                 *

Selected Long-Term Euro/US$ Exchange Rate                                         *

Selected CIF Pulp Price - After Discount (Euro/t)                                 *
Transportation Cost on sold product                                               *
                                                                             ------
Free Delivered Pulp Price - After Discount (Euro/t)                               *
-----------------------------------------------------------------------------------
</Table>

<Table>
-----------------------------------------------------------------------------------------------
OPERATING COSTS (EURO 2001 PRICES)

<S>                                                <C>                        <C>         <C>
Variable Costs
Wood Price (Euro/t) - Base Case Pulp Price                                    *               *
Selected Chemicals Price (Euro/t)                                             *               *
Energy Cost (Euro/t)                                                          *               *
Solid Waste Disposal Cost per Unit (Euro/t)                                   *               *
Other Variable Cost per Unit (Euro/t)                                         *               *
                                                                              ------      -----
Total Variable Costs                                                          *               *

Annual Fixed Costs                                 Total Employees: 580
No. of Employees - White Collar                                               *
Salary per Employee - White Collar (Euro)                                     *
No. of Employees - Blue Collar                                                *
Salary per Employee - Blue Collar (Euro)                                      *
No. of Employees - Trainees                                                   *
Salary per Employee - Trainees (Euro)                                         *
No. of Employees - Logistic Subsidiary (incl. 3 trainees)                     *
Salary per Employee - Logistic Subsidiary (Euro)                              *
No. of Employees - Wood Procurement Subsidiary (incl. 3 trainees)             *
Salary per Employee - Wood Procurement Subsidiary (Euro)                      *

Total Labor Costs (Euro/t)                                                    *               *
Total Other Fixed Costs (Euro/t)                                              *               *
                                                                              ------      -----
Total Fixed Costs                                                             *               *

Distribution Cost
Commission Fees (Euro/t)                                                      *               *
Transportation Cost (Euro/t)                                                  *               *
                                                                              ------      -----
Total Distribution Costs                                                      *               *

Total Operating Costs                                                         *               *
-----------------------------------------------------------------------------------------------
</Table>

<Table>
------------------------------------------------------------------------------------
WOOD PRICE (EURO/SCBM, 2001 PRICE)

<S>                                                                            <C>
Wood Price - Base Case Pulp Price                                                  *
Wood Price Sensitivity to Pulp Price - Base Case                                   *
Wood Price Sensitivity to Pulp Price - Downside Case                               *
Wood Price - Selected Pulp Price                                                   *
------------------------------------------------------------------------------------
</Table>

<Table>
------------------------------------------------------------------------------------
INFLATION

<S>                                                                            <C>
General Revenue Escalation Rate - Base Case                                        *
General Revenue Escalation Rate - Downside Case                                    *
General Revenue Sensitivity Factor                                                 *
General Cost Escalation Rate - Base Case                                           *
General Cost Escalation Rate - Downside Case                                       *
General Cost Sensitivity Factor                                                    *
------------------------------------------------------------------------------------
</Table>

<Table>
-----------------------------------------------------------------------------------------
TAX & ACCOUNTING

<S>                                                            <C>             <C>
Overall Tax Rate
  Taxable Income                                               *
  Tade Tax on Income                                           *                   *
  Taxable Income                                               *
  Corporate Tax                                                *                   *
  Solidarity Tax                                               *                   *
  Net Income                                                   *
  Overall Tax Rate                                             *

Allocation of Costs Depreciated over Asset Life

                                                               % of Cstr       Asset Life
Total Costs         829.281                                       Cost           (Years)

Buildings                                                          *                *
Plant and Equipment                                                *                *
Others Construction Costs                                          *                *

Dividend P/L Restriction                    *
Cashtrap                                    *

Intercompany Loan                           *                 Starting From Sep. 06

Company Fiscal Year End (Month Number)                                             12

Interest Earned
Interest Rate Applied to Cash Balances                                              *
-----------------------------------------------------------------------------------------
</Table>

*Mercer has made an application to the SEC to redact this information.
The information has been filed separately with the SEC.


Babcock & Brown Limited                                           Page 7 of KEY

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                                          Dez     Jun     Dez     Jun     Sep     Dez     Mrz     Jun     Sep
                                                               02      03      03      04      04      04      05      05      05
<S>                                      <C>         <C>      <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year                      Total No.   20.00     *       *       *       *       *       *       *       *       *
                                          of Yrs.

Number of Months in Period from Start-Up                       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Revenues

Pulp Production
  Production Capacity (tpa)                                 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000

  Production Rate - Base Case                *                 *       *       *       *       *       *       *       *       *

  Production Rate - Downside Case            *                 *       *       *       *       *       *       *       *       *

  Selected Production Rate                                     *       *       *       *       *       *       *       *       *

  Pulp Production (tonne)                                      *       *       *       *       *       *       *       *       *


Pulp Sales

  Base CIF Trend Pulp Price - Before Discount (US$/t)   *       *       *       *       *       *       *       *       *       *

  Discount (% Revenue)                                         *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price - After Discount *         *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp Price - After   *         *       *       *       *       *       *       *       *       *       *

  Euro/US$ Exchange Rate                               *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price - After Discount (Euro/t)  *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp Price -
    After Discount (Euro/t)                            *       *       *       *       *       *       *       *       *       *

  Selected CIF Pulp Price - After Discount (Euro/t)    *       *       *       *       *       *       *       *       *       *

  Transportation Cost on sold product                  *       *       *       *       *       *       *       *       *       *

                                                              ----   ----    ----    ----    ----    ----    ----    ----    ----

 Free Delivered Pulp Price - After Discount (Euro/t)   *       *       *       *       *       *       *       *       *       *

 Pulp Revenue                                          *       *       *       *       *       *       *       *       *       *


Power Sales

  Excess Power Sales (kWh/t)                                   *       *       *       *       *       *       *       *       *

  Net Sales Price (Euro/kWh)                                   *       *       *       *       *       *       *       *       *

  Price for Power Sold (Euro/t)                                *       *       *       *       *       *       *       *       *

  Pulp Production (tpm)                                        *       *       *       *       *       *       *       *       *

  Power Revenue                                        *       *       *       *       *       *       *       *       *       *


TOTAL OPERATING REVENUE                                *       *       *       *       *       *       *       *       *       *

  TOTAL UNITARY REVENUE (EURO PER TONNE PRODUCED)      *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>


<Table>
<Caption>
Date                                                          Dez     Mrz     Jan     Sep     Dez
                                                               05      06      06      06      06
<S>                                      <C>         <C>      <C>     <C>     <C>     <C>     <C>
Operating Half Year                      Total No.   20.00     *       *       *       *       *
                                          of Yrs.

Number of Months in Period from Start-Up                       *       *       *       *       *
------------------------------------------------------------------------------------------------
Revenues

Pulp Production
  Production Capacity (tpa)                                 552.000 552.000 552.000 552.000 552.000

  Production Rate - Base Case                *                 *       *       *       *       *

  Production Rate - Downside Case            *                 *       *       *       *       *

  Selected Production Rate                                     *       *       *       *       *

  Pulp Production (tonne)                                      *       *       *       *       *


Pulp Sales

  Base CIF Trend Pulp Price - Before Discount (US$/t)   *       *       *       *       *       *

  Discount (% Revenue)                                         *       *       *       *       *

  Base CIF Trend Pulp Price - After Discount *         *       *       *       *       *       *

  Downside CIF Cyclical Pulp Price - After   *         *       *       *       *       *       *

  Euro/US$ Exchange Rate                               *       *       *       *       *       *

  Base CIF Trend Pulp Price - After Discount (Euro/t)  *       *       *       *       *       *

  Downside CIF Cyclical Pulp Price -
    After Discount (Euro/t)                            *       *       *       *       *       *

  Selected CIF Pulp Price - After Discount (Euro/t)    *       *       *       *       *       *

  Transportation Cost on sold product                  *       *       *       *       *       *

                                                              ----   ----    ----    ----    ----

 Free Delivered Pulp Price - After Discount (Euro/t)   *       *       *       *       *       *

 Pulp Revenue                                          *       *       *       *       *       *


Power Sales

  Excess Power Sales (kWh/t)                                   *       *       *       *       *

  Net Sales Price (Euro/kWh)                                   *       *       *       *       *

  Price for Power Sold (Euro/t)                                *       *       *       *       *

  Pulp Production (tpm)                                        *       *       *       *       *

  Power Revenue                                        *       *       *       *       *       *


TOTAL OPERATING REVENUE                                *       *       *       *       *       *

  TOTAL UNITARY REVENUE (EURO PER TONNE PRODUCED)      *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 1 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        07      07      07      07      08      08      08      08      09      09      09      09
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Revenues

Pulp Production
  Production Capacity (tpa)         552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000

  Production Rate -
   Base Case             *              *       *       *       *       *       *       *       *       *       *       *       *

  Production Rate -
   Downside Case         *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Production Rate              *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *       *       *


Pulp Sales

  Base CIF Trend Pulp Price -
   Before Discount (US$/t)        *      *       *       *       *       *       *       *       *       *       *       *       *

  Discount (% Revenue)                  *       *       *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount        *       *      *       *       *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp
   Price - After         *       *      *       *       *       *       *       *       *       *       *       *       *       *

  Euro/US$ Exchange Rate         *      *       *       *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp Price -
    After Discount (Euro/t)      *      *       *       *       *       *       *       *       *       *       *       *       *

  Selected CIF Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *       *       *

  Transportation Cost on
   sold product                  *      *       *       *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----

 Free Delivered Pulp Price -
  After Discount (Euro/t)        *      *       *       *       *       *       *       *       *       *       *       *       *

 Pulp Revenue                    *      *       *       *       *       *       *       *       *       *       *       *       *


Power Sales

  Excess Power Sales (kWh/t)            *       *       *       *       *       *       *       *       *       *       *       *

  Net Sales Price (Euro/kWh)            *       *       *       *       *       *       *       *       *       *       *       *

  Price for Power Sold (Euro/t)         *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpm)                 *       *       *       *       *       *       *       *       *       *       *       *

  Power Revenue                  *      *       *       *       *       *       *       *       *       *       *       *       *


TOTAL OPERATING REVENUE          *      *       *       *       *       *       *       *       *       *       *       *       *

  TOTAL UNITARY REVENUE (EURO
   PER TONNE PRODUCED)           *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        10      10      10      10      11      11      11      11      12      12      12      12
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Revenues

Pulp Production
  Production Capacity (tpa)         552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000

  Production Rate -
   Base Case             *              *       *       *       *       *       *       *       *       *       *       *       *

  Production Rate -
   Downside Case         *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Production Rate              *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *       *       *


Pulp Sales

  Base CIF Trend Pulp Price -
   Before Discount (US$/t)        *      *       *       *       *       *       *       *       *       *       *       *       *

  Discount (% Revenue)                  *       *       *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount        *       *      *       *       *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp
   Price - After         *       *      *       *       *       *       *       *       *       *       *       *       *       *

  Euro/US$ Exchange Rate         *      *       *       *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp Price -
    After Discount (Euro/t)      *      *       *       *       *       *       *       *       *       *       *       *       *

  Selected CIF Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *       *       *

  Transportation Cost on
   sold product                  *      *       *       *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----

 Free Delivered Pulp Price -
  After Discount (Euro/t)        *      *       *       *       *       *       *       *       *       *       *       *       *

 Pulp Revenue                    *      *       *       *       *       *       *       *       *       *       *       *       *


Power Sales

  Excess Power Sales (kWh/t)            *       *       *       *       *       *       *       *       *       *       *       *

  Net Sales Price (Euro/kWh)            *       *       *       *       *       *       *       *       *       *       *       *

  Price for Power Sold (Euro/t)         *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpm)                 *       *       *       *       *       *       *       *       *       *       *       *

  Power Revenue                  *      *       *       *       *       *       *       *       *       *       *       *       *


TOTAL OPERATING REVENUE          *      *       *       *       *       *       *       *       *       *       *       *       *

  TOTAL UNITARY REVENUE (EURO
   PER TONNE PRODUCED)           *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 2 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        13      13      13      13      14      14      14      14      15      15      15      15
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Revenues

Pulp Production
  Production Capacity (tpa)         552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000

  Production Rate -
   Base Case             *              *       *       *       *       *       *       *       *       *       *       *       *

  Production Rate -
   Downside Case         *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Production Rate              *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *       *       *


Pulp Sales

  Base CIF Trend Pulp Price -
   Before Discount (US$/t)        *      *       *       *       *       *       *       *       *       *       *       *       *

  Discount (% Revenue)                  *       *       *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount        *       *      *       *       *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp
   Price - After         *       *      *       *       *       *       *       *       *       *       *       *       *       *

  Euro/US$ Exchange Rate         *      *       *       *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp Price -
    After Discount (Euro/t)      *      *       *       *       *       *       *       *       *       *       *       *       *

  Selected CIF Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *       *       *

  Transportation Cost on
   sold product                  *      *       *       *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----

 Free Delivered Pulp Price -
  After Discount (Euro/t)        *      *       *       *       *       *       *       *       *       *       *       *       *

 Pulp Revenue                    *      *       *       *       *       *       *       *       *       *       *       *       *


Power Sales

  Excess Power Sales (kWh/t)            *       *       *       *       *       *       *       *       *       *       *       *

  Net Sales Price (Euro/kWh)            *       *       *       *       *       *       *       *       *       *       *       *

  Price for Power Sold (Euro/t)         *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpm)                 *       *       *       *       *       *       *       *       *       *       *       *

  Power Revenue                  *      *       *       *       *       *       *       *       *       *       *       *       *


TOTAL OPERATING REVENUE          *      *       *       *       *       *       *       *       *       *       *       *       *

  TOTAL UNITARY REVENUE (EURO
   PER TONNE PRODUCED)           *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        16      16      16      16      17      17      17      17      18      18      18      18
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Revenues

Pulp Production
  Production Capacity (tpa)         552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000

  Production Rate -
   Base Case             *              *       *       *       *       *       *       *       *       *       *       *       *

  Production Rate -
   Downside Case         *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Production Rate              *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *       *       *


Pulp Sales

  Base CIF Trend Pulp Price -
   Before Discount (US$/t)        *      *       *       *       *       *       *       *       *       *       *       *       *

  Discount (% Revenue)                  *       *       *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount        *       *      *       *       *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp
   Price - After         *       *      *       *       *       *       *       *       *       *       *       *       *       *

  Euro/US$ Exchange Rate         *      *       *       *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp Price -
    After Discount (Euro/t)      *      *       *       *       *       *       *       *       *       *       *       *       *

  Selected CIF Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *       *       *

  Transportation Cost on
   sold product                  *      *       *       *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----

 Free Delivered Pulp Price -
  After Discount (Euro/t)        *      *       *       *       *       *       *       *       *       *       *       *       *

 Pulp Revenue                    *      *       *       *       *       *       *       *       *       *       *       *       *


Power Sales

  Excess Power Sales (kWh/t)            *       *       *       *       *       *       *       *       *       *       *       *

  Net Sales Price (Euro/kWh)            *       *       *       *       *       *       *       *       *       *       *       *

  Price for Power Sold (Euro/t)         *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpm)                 *       *       *       *       *       *       *       *       *       *       *       *

  Power Revenue                  *      *       *       *       *       *       *       *       *       *       *       *       *


TOTAL OPERATING REVENUE          *      *       *       *       *       *       *       *       *       *       *       *       *

  TOTAL UNITARY REVENUE (EURO
   PER TONNE PRODUCED)           *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 3 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

As Base amounts in thousands

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        19      19      19      19      20      20      20      20      21      21      21      21
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Revenues

Pulp Production
  Production Capacity (tpa)         552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000

  Production Rate -
   Base Case             *              *       *       *       *       *       *       *       *       *       *       *       *

  Production Rate -
   Downside Case         *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Production Rate              *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *       *       *


Pulp Sales

  Base CIF Trend Pulp Price -
   Before Discount (US$/t)        *      *       *       *       *       *       *       *       *       *       *       *       *

  Discount (% Revenue)                  *       *       *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount        *       *      *       *       *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp
   Price - After         *       *      *       *       *       *       *       *       *       *       *       *       *       *

  Euro/US$ Exchange Rate         *      *       *       *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp Price -
    After Discount (Euro/t)      *      *       *       *       *       *       *       *       *       *       *       *       *

  Selected CIF Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *       *       *

  Transportation Cost on
   sold product                  *      *       *       *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----

 Free Delivered Pulp Price -
  After Discount (Euro/t)        *      *       *       *       *       *       *       *       *       *       *       *       *

 Pulp Revenue                    *      *       *       *       *       *       *       *       *       *       *       *       *


Power Sales

  Excess Power Sales (kWh/t)            *       *       *       *       *       *       *       *       *       *       *       *

  Net Sales Price (Euro/kWh)            *       *       *       *       *       *       *       *       *       *       *       *

  Price for Power Sold (Euro/t)         *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpm)                 *       *       *       *       *       *       *       *       *       *       *       *

  Power Revenue                  *      *       *       *       *       *       *       *       *       *       *       *       *


TOTAL OPERATING REVENUE          *      *       *       *       *       *       *       *       *       *       *       *       *

  TOTAL UNITARY REVENUE (EURO
   PER TONNE PRODUCED)           *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun
                                        22      22      22      22      23      23      23      23      24      24
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *
------------------------------------------------------------------------------------------------------------------
Revenues

Pulp Production
  Production Capacity (tpa)         552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000 552.000

  Production Rate -
   Base Case             *              *       *       *       *       *       *       *       *       *       *

  Production Rate -
   Downside Case         *              *       *       *       *       *       *       *       *       *       *

  Selected Production Rate              *       *       *       *       *       *       *       *       *       *

  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *


Pulp Sales

  Base CIF Trend Pulp Price -
   Before Discount (US$/t)        *      *       *       *       *       *       *       *       *       *       *

  Discount (% Revenue)                  *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount        *       *      *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp
   Price - After         *       *      *       *       *       *       *       *       *       *       *       *

  Euro/US$ Exchange Rate         *      *       *       *       *       *       *       *       *       *       *

  Base CIF Trend Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *

  Downside CIF Cyclical Pulp Price -
    After Discount (Euro/t)      *      *       *       *       *       *       *       *       *       *       *

  Selected CIF Pulp Price -
   After Discount (Euro/t)       *      *       *       *       *       *       *       *       *       *       *

  Transportation Cost on
   sold product                  *      *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----

 Free Delivered Pulp Price -
  After Discount (Euro/t)        *      *       *       *       *       *       *       *       *       *       *

 Pulp Revenue                    *      *       *       *       *       *       *       *       *       *       *


Power Sales

  Excess Power Sales (kWh/t)            *       *       *       *       *       *       *       *       *       *

  Net Sales Price (Euro/kWh)            *       *       *       *       *       *       *       *       *       *

  Price for Power Sold (Euro/t)         *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpm)                 *       *       *       *       *       *       *       *       *       *

  Power Revenue                  *      *       *       *       *       *       *       *       *       *       *


TOTAL OPERATING REVENUE          *      *       *       *       *       *       *       *       *       *       *

  TOTAL UNITARY REVENUE (EURO
   PER TONNE PRODUCED)           *      *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 4 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                                          Dez     Jun     Dez     Jun     Sep     Dez     Mrz     Jun     Sep
                                                               02      03      03      04      04      04      05      05      05
<S>                                      <C>         <C>      <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year                      Total No.   20.00     *       *       *       *       *       *       *       *       *
                                          of Yrs.

Number of Months in Period from Start-Up                       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Operating Costs

Pulp Production
  Pulp Production (tonne)                                      *       *       *       *       *       *       *       *       *

  Efficiency Factor                                            *       *       *       *       *       *       *       *       *


Wood Cost

  Wood Price (Euro/scbm) - Base Case Pulp Price                *       *       *       *       *       *       *       *       *

  Wood Price (Euro/scbm) - Selected Pulp Price                 *       *       *       *       *       *       *       *       *

  Wood Consumption - Base Case               *                 *       *       *       *       *       *       *       *       *

  Wood Consumption - Downside Case           *                 *       *       *       *       *       *       *       *       *

  Selected Wood Consumption (scbm/t)                           *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)                                  *       *       *       *       *       *       *       *       *

  Wood Consumption (scbm/a)                                    *       *       *       *       *       *       *       *       *

  Wood Cost                                            *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)              *       *       *       *       *       *       *       *       *       *


Chemicals Cost

  Chemicals Price (Euro/t) - Base Case       *                 *       *       *       *       *       *       *       *       *

  Chemicals Price (Euro/t) - Downside Case   *                 *       *       *       *       *       *       *       *       *

  Selected Chemicals Price (Euro/t)                            *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)                                  *       *       *       *       *       *       *       *       *

  Chemicals Cost                                       *       *       *       *       *       *       *       *       *       *

 UNITARY COSTS (EURO PER TONNE PRODUCED)               *       *       *       *       *       *       *       *       *       *


Energy Cost

  Energy Cost (Euro/t)                                         *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)                                  *       *       *       *       *       *       *       *       *

  Power Cost                                           *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)              *       *       *       *       *       *       *       *       *       *


Solid Waste Disposal Cost

  Sold Waste Disposal Cost per Unit (Euro/t)                   *       *       *       *       *       *       *       *       *

  Pulp Production (tpa)                                        *       *       *       *       *       *       *       *       *

  Interim Disposal Costs                               *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)              *       *       *       *       *       *       *       *       *       *


Other Variable Costs

  Other Variable Cost per Unit (Euro/t)                        *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)                                  *       *       *       *       *       *       *       *       *

  Other Variable Costs                                 *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

<Table>
<Caption>
Date                                                          Dec     Mrz     Jun     Sep     Dez
                                                               05      06      06      06      06
<S>                                      <C>         <C>      <C>     <C>     <C>     <C>     <C>
Operating Half Year                      Total No.   20.00     *       *       *       *       *
                                          of Yrs.

Number of Months in Period from Start-Up                       *       *       *       *       *
------------------------------------------------------------------------------------------------
Operating Costs

Pulp Production
  Pulp Production (tonne)                                      *       *       *       *       *

  Efficiency Factor                                            *       *       *       *       *


Wood Cost

  Wood Price (Euro/scbm) - Base Case Pulp Price                *       *       *       *       *

  Wood Price (Euro/scbm) - Selected Pulp Price                 *       *       *       *       *

  Wood Consumption - Base Case               *                 *       *       *       *       *

  Wood Consumption - Downside Case           *                 *       *       *       *       *

  Selected Wood Consumption (scbm/t)                           *       *       *       *       *

  Gross Pulp Production (tpa)                                  *       *       *       *       *

  Wood Consumption (scbm/a)                                    *       *       *       *       *

  Wood Cost                                            *       *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)              *       *       *       *       *       *


Chemicals Cost

  Chemicals Price (Euro/t) - Base Case       *                 *       *       *       *       *

  Chemicals Price (Euro/t) - Downside Case   *                 *       *       *       *       *

  Selected Chemicals Price (Euro/t)                            *       *       *       *       *

  Gross Pulp Production (tpa)                                  *       *       *       *       *

  Chemicals Cost                                       *       *       *       *       *       *

 UNITARY COSTS (EURO PER TONNE PRODUCED)               *       *       *       *       *       *


Energy Cost

  Energy Cost (Euro/t)                                         *       *       *       *       *

  Gross Pulp Production (tpa)                                  *       *       *       *       *

  Power Cost                                           *       *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)              *       *       *       *       *       *


Solid Waste Disposal Cost

  Sold Waste Disposal Cost per Unit (Euro/t)                   *       *       *       *       *

  Pulp Production (tpa)                                        *       *       *       *       *

  Interim Disposal Costs                               *       *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)              *       *       *       *       *       *


Other Variable Costs

  Other Variable Cost per Unit (Euro/t)                        *       *       *       *       *

  Gross Pulp Production (tpa)                                  *       *       *       *       *

  Other Variable Costs                                 *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 5 of OPER

<Page>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        07      07      07      07      08      08      08      08      09      09      09      09
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Operating Costs

Pulp Production
  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *       *       *

  Efficiency Factor                     *       *       *       *       *       *       *       *       *       *       *       *


Wood Cost

  Wood Price (Euro/scbm) -
    Base Case Pulp Price                *       *       *       *       *       *       *       *       *       *       *       *

  Wood Price (Euro/scbm) -
    Selected Pulp Price                 *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Base Case            *              *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Downside Case        *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Wood Consumption (scbm/t)    *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption (scbm/a)             *       *       *       *       *       *       *       *       *       *       *       *

  Wood Cost                      *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Chemicals Cost

  Chemicals Price (Euro/t)
    - Base Case          *              *       *       *       *       *       *       *       *       *       *       *       *

  Chemicals Price (Euro/t)
    - Downside Case      *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Chemicals Price (Euro/t)     *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Chemicals Cost                 *      *       *       *       *       *       *       *       *       *       *       *       *

 UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Energy Cost

  Energy Cost (Euro/t)                  *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Power Cost                     *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Solid Waste Disposal Cost

  Sold Waste Disposal Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpa)                 *       *       *       *       *       *       *       *       *       *       *       *

  Interim Disposal Costs         *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Other Variable Costs

  Other Variable Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Other Variable Costs           *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        10      10      10      10      11      11      11      11      12      12      12      12
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Operating Costs

Pulp Production
  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *       *       *

  Efficiency Factor                     *       *       *       *       *       *       *       *       *       *       *       *


Wood Cost

  Wood Price (Euro/scbm) -
    Base Case Pulp Price                *       *       *       *       *       *       *       *       *       *       *       *

  Wood Price (Euro/scbm) -
    Selected Pulp Price                 *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Base Case            *              *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Downside Case        *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Wood Consumption (scbm/t)    *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption (scbm/a)             *       *       *       *       *       *       *       *       *       *       *       *

  Wood Cost                      *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Chemicals Cost

  Chemicals Price (Euro/t)
    - Base Case          *              *       *       *       *       *       *       *       *       *       *       *       *

  Chemicals Price (Euro/t)
    - Downside Case      *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Chemicals Price (Euro/t)     *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Chemicals Cost                 *      *       *       *       *       *       *       *       *       *       *       *       *

 UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Energy Cost

  Energy Cost (Euro/t)                  *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Power Cost                     *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Solid Waste Disposal Cost

  Sold Waste Disposal Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpa)                 *       *       *       *       *       *       *       *       *       *       *       *

  Interim Disposal Costs         *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Other Variable Costs

  Other Variable Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Other Variable Costs           *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 6 of OPER

<Page>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        13      13      13      13      14      14      14      14      15      15      15      15
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Operating Costs

Pulp Production
  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *       *       *

  Efficiency Factor                     *       *       *       *       *       *       *       *       *       *       *       *


Wood Cost

  Wood Price (Euro/scbm) -
    Base Case Pulp Price                *       *       *       *       *       *       *       *       *       *       *       *

  Wood Price (Euro/scbm) -
    Selected Pulp Price                 *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Base Case            *              *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Downside Case        *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Wood Consumption (scbm/t)    *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption (scbm/a)             *       *       *       *       *       *       *       *       *       *       *       *

  Wood Cost                      *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Chemicals Cost

  Chemicals Price (Euro/t)
    - Base Case          *              *       *       *       *       *       *       *       *       *       *       *       *

  Chemicals Price (Euro/t)
    - Downside Case      *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Chemicals Price (Euro/t)     *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Chemicals Cost                 *      *       *       *       *       *       *       *       *       *       *       *       *

 UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Energy Cost

  Energy Cost (Euro/t)                  *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Power Cost                     *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Solid Waste Disposal Cost

  Sold Waste Disposal Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpa)                 *       *       *       *       *       *       *       *       *       *       *       *

  Interim Disposal Costs         *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Other Variable Costs

  Other Variable Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Other Variable Costs           *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        16      16      16      16      17      17      17      17      18      18      18      18
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Operating Costs

Pulp Production
  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *       *       *

  Efficiency Factor                     *       *       *       *       *       *       *       *       *       *       *       *


Wood Cost

  Wood Price (Euro/scbm) -
    Base Case Pulp Price                *       *       *       *       *       *       *       *       *       *       *       *

  Wood Price (Euro/scbm) -
    Selected Pulp Price                 *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Base Case            *              *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Downside Case        *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Wood Consumption (scbm/t)    *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption (scbm/a)             *       *       *       *       *       *       *       *       *       *       *       *

  Wood Cost                      *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Chemicals Cost

  Chemicals Price (Euro/t)
    - Base Case          *              *       *       *       *       *       *       *       *       *       *       *       *

  Chemicals Price (Euro/t)
    - Downside Case      *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Chemicals Price (Euro/t)     *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Chemicals Cost                 *      *       *       *       *       *       *       *       *       *       *       *       *

 UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Energy Cost

  Energy Cost (Euro/t)                  *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Power Cost                     *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Solid Waste Disposal Cost

  Sold Waste Disposal Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpa)                 *       *       *       *       *       *       *       *       *       *       *       *

  Interim Disposal Costs         *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Other Variable Costs

  Other Variable Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Other Variable Costs           *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 7 of OPER

<Page>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        19      19      19      19      20      20      20      20      21      21      21      21
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Operating Costs

Pulp Production
  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *       *       *

  Efficiency Factor                     *       *       *       *       *       *       *       *       *       *       *       *


Wood Cost

  Wood Price (Euro/scbm) -
    Base Case Pulp Price                *       *       *       *       *       *       *       *       *       *       *       *

  Wood Price (Euro/scbm) -
    Selected Pulp Price                 *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Base Case            *              *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Downside Case        *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Wood Consumption (scbm/t)    *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Wood Consumption (scbm/a)             *       *       *       *       *       *       *       *       *       *       *       *

  Wood Cost                      *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Chemicals Cost

  Chemicals Price (Euro/t)
    - Base Case          *              *       *       *       *       *       *       *       *       *       *       *       *

  Chemicals Price (Euro/t)
    - Downside Case      *              *       *       *       *       *       *       *       *       *       *       *       *

  Selected Chemicals Price (Euro/t)     *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Chemicals Cost                 *      *       *       *       *       *       *       *       *       *       *       *       *

 UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Energy Cost

  Energy Cost (Euro/t)                  *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Power Cost                     *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Solid Waste Disposal Cost

  Sold Waste Disposal Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpa)                 *       *       *       *       *       *       *       *       *       *       *       *

  Interim Disposal Costs         *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *


Other Variable Costs

  Other Variable Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Other Variable Costs           *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun
                                        22      22      22      22      23      23      23      23      24      24
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *
------------------------------------------------------------------------------------------------------------------
Operating Costs

Pulp Production
  Pulp Production (tonne)               *       *       *       *       *       *       *       *       *       *

  Efficiency Factor                     *       *       *       *       *       *       *       *       *       *


Wood Cost

  Wood Price (Euro/scbm) -
    Base Case Pulp Price                *       *       *       *       *       *       *       *       *       *

  Wood Price (Euro/scbm) -
    Selected Pulp Price                 *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Base Case            *              *       *       *       *       *       *       *       *       *       *

  Wood Consumption -
    Downside Case        *              *       *       *       *       *       *       *       *       *       *

  Selected Wood Consumption (scbm/t)    *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *

  Wood Consumption (scbm/a)             *       *       *       *       *       *       *       *       *       *

  Wood Cost                      *      *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *


Chemicals Cost

  Chemicals Price (Euro/t)
    - Base Case          *              *       *       *       *       *       *       *       *       *       *

  Chemicals Price (Euro/t)
    - Downside Case      *              *       *       *       *       *       *       *       *       *       *

  Selected Chemicals Price (Euro/t)     *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *

  Chemicals Cost                 *      *       *       *       *       *       *       *       *       *       *

 UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *


Energy Cost

  Energy Cost (Euro/t)                  *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *

  Power Cost                     *      *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *


Solid Waste Disposal Cost

  Sold Waste Disposal Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *

  Pulp Production (tpa)                 *       *       *       *       *       *       *       *       *       *

  Interim Disposal Costs         *      *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *


Other Variable Costs

  Other Variable Cost per
    Unit (Euro/t)                       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *

  Other Variable Costs           *      *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 8 of OPER


<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                             Dez   Jun   Dez   Jun   Sep   Dez   Mrz   Jun   Sep   Dez   Mrz   Jun   Sep   Dez
                                                  02    03    03    04    04    04    05    05    05    05    06    06    06    06
<S>                            <C>        <C>    <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>   <C>  <C>   <C>   <C>   <C>   <C>
Operating Half Year            Total No.  20.00    *     *     *     *     *     *     *     *     *     *     *     *     *     *
                               of Yrs.

Number of Months in
 Period from Start-Up                              *     *     *     *     *     *     *     *     *     *     *     *     *     *
----------------------------------------------------------------------------------------------------------------------------------

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                             *    *     *     *     *     *     *     *     *     *     *     *     *     *     *

Additional Start-Up Variable
  Costs

  Additional Start-Up Variable
    Cost per Unit (Euro/t)                         *     *     *     *     *     *     *     *     *     *     *     *     *     *

  Gross Pulp Production (tpa)                      *     *     *     *     *     *     *     *     *     *     *     *     *     *

  Additional Start-Up Variable
    Costs                                     *    *     *     *     *     *     *     *     *     *     *     *     *     *     *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                             *    *     *     *     *     *     *     *     *     *     *     *     *     *     *
                                           ---- ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----

Total Variable Production Costs               *    *     *     *     *     *     *     *     *     *     *     *     *     *     *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                             *    *     *     *     *     *     *     *     *     *     *     *     *     *     *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 9 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        07      07      07      07      08      08      08      08      09      09      09      09
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

Additional Start-Up Variable
  Costs

  Additional Start-Up Variable
    Cost per Unit (Euro/t)              *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Additional Start-Up Variable
    Costs                           *   *       *       *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----

Total Variable Production Costs     *   *       *       *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        10      10      10      10      11      11      11      11      12      12      12      12
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

Additional Start-Up Variable
  Costs

  Additional Start-Up Variable
    Cost per Unit (Euro/t)              *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Additional Start-Up Variable
    Costs                           *   *       *       *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----

Total Variable Production Costs     *   *       *       *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                         Page 10 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        13      13      13      13      14      14      14      14      15      15      15      15
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

Additional Start-Up Variable
  Costs

  Additional Start-Up Variable
    Cost per Unit (Euro/t)              *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Additional Start-Up Variable
    Costs                           *   *       *       *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----

Total Variable Production Costs     *   *       *       *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        16      16      16      16      17      17      17      17      18      18      18      18
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

Additional Start-Up Variable
  Costs

  Additional Start-Up Variable
    Cost per Unit (Euro/t)              *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Additional Start-Up Variable
    Costs                           *   *       *       *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----

Total Variable Production Costs     *   *       *       *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                         Page 11 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        19      19      19      19      20      20      20      20      21      21      21      21
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

Additional Start-Up Variable
  Costs

  Additional Start-Up Variable
    Cost per Unit (Euro/t)              *       *       *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *       *       *

  Additional Start-Up Variable
    Costs                           *   *       *       *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----

Total Variable Production Costs     *   *       *       *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *       *       *
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun
                                        22      22      22      22      23      23      23      23      24      24
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *
-------------------------------------------------------------------------------------------------------------------
UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *

Additional Start-Up Variable
  Costs

  Additional Start-Up Variable
    Cost per Unit (Euro/t)              *       *       *       *       *       *       *       *       *       *

  Gross Pulp Production (tpa)           *       *       *       *       *       *       *       *       *       *

  Additional Start-Up Variable
    Costs                           *   *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *

                                       ----   ----    ----    ----    ----    ----    ----    ----    ----    ----

Total Variable Production Costs     *   *       *       *       *       *       *       *       *       *       *

UNITARY COSTS (EURO PER
  TONNE PRODUCED)                   *   *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                         Page 12 of OPER
<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                                          Dez     Jun     Dez     Jun     Sep     Dez     Mrz     Jun     Sep
                                                               03      03      03      04      04      04      05      05      05
<S>                                      <C>         <C>      <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year                      Total No.   20.00     *       *       *       *       *       *       *       *       *
                                          of Yrs.

Number of Months in Period from Start-Up                       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Operating Costs

Labor Cost

  No. of Employee - White Collar                              *       *       *       *       *       *       *       *       *

  Salary per Employee - White Collar (Euro)            *     *       *       *       *       *       *       *       *       *

  No. of Employee - Blue Collar                               *       *       *       *       *       *       *       *       *

  Salary per Employee - Blue Collar (Euro)             *     *       *       *       *       *       *       *       *       *

  No. of Employees - Trainees                                  *       *       *       *       *       *       *       *       *

  Salary per Employees - Trainees (Euro)                *      *       *       *       *       *       *       *       *       *

  No. of Employee - Logistic Subsidiary
      (incl. 3 trainees)                                       *       *       *       *       *       *       *       *       *

  Salary per Employee - Logistic Subsidiary (Euro)     *      *       *       *       *       *       *       *       *       *

  No. of Employees - Wood Procurement Subsidiary
      (incl. 3 trainees)                                       *       *       *       *       *       *       *       *       *

  Salary per Employees - Wood Procurement
      Subsidiary (Euro)                                 *      *       *       *       *       *       *       *       *       *

  Total Labor Costs                                     *      *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)               *       *       *      *       *       *       *       *       *       *


Other Fixed Costs

  Contractor Services                                   *       *       *      *       *       *       *       *       *       *

  Maint. Material & Services                            *       *       *       *      *       *       *       *       *       *

  Back-up Power Fee                                     *       *       *       *      *       *       *       *       *       *

  Insurance                                             *       *       *       *      *       *       *       *       *       *

  Effluent Charge                                       *       *       *       *      *       *       *       *       *       *

  Lease Fees for O2 Plant & Mobile Equipment            *       *       *       *      *       *       *       *       *       *

  Additional Start-Up Costs                             *       *       *       *      *       *       *       *       *       *

  Others (Mill and Head Office)                         *       *       *       *      *       *       *       *       *       *
                                                              -----  -----   -----   -----   -----   -----   -----   -----   -----


  Total Other Fixed Costs                               *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)               *       *       *       *       *       *       *       *       *       *

Total Fixed Production Costs                            *       *       *       *       *       *       *       *       *       *


Distribution Cost

  Sales Commission (% invoiced Production
    after Transp.)                                              *       *       *       *       *       *       *       *       *

  Commission Fees                                       *       *       *       *       *       *       *       *       *       *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                *       *       *       *       *       *       *       *       *       *

  Transportation Cost (Euro/t)                          *       *       *       *       *       *       *       *       *       *

  Pulp Production                                               *       *       *       *       *       *       *       *       *

  Transportation Cost on sold product                   *       *       *       *       *       *       *       *       *       *

  Total Distribution Costs                              *       *       *       *       *       *       *       *       *       *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                *       *       *       *       *       *       *       *       *       *
</Table>

<Table>
<Caption>
Date                                                          Dec     Mrz     Jun     Sep     Dez
                                                               05      06      06      06      06
<S>                                      <C>         <C>      <C>     <C>     <C>     <C>     <C>
Operating Half Year                      Total No.   20.00     *       *       *       *       *
                                          of Yrs.

Number of Months in Period from Start-Up                       *       *       *       *       *
------------------------------------------------------------------------------------------------
Operating Costs

Labor Cost

  No. of Employees - White Collar                              *       *       *       *       *

  Salary per Employee - White Collar (Euro)                    *       *       *       *       *

  No. of Employees - Blue Collar                               *       *       *       *       *

  Salary per Employee - Blue Collar (Euro)                     *       *       *       *       *

  No. of Employees - Trainees                                  *       *       *       *       *

  Salary per Employee - Trainees (Euro)                        *       *       *       *       *

  No. of Employees - Logistic Subsidiary
      (incl. 3 trainees)                                       *       *       *       *       *

  Salary per Employee - Logistic Subsidiary (Euro)             *       *       *       *       *

  No. of Employees - Wood Procurement Subsidiary
      (incl. 3 trainees)                                       *       *       *       *       *

  Salary per Employee - Wood Procurement
      Subsidiary (Euro)                                        *       *       *       *       *

  Total Labor Costs                                            *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)                      *       *       *       *       *


Other Fixed Costs                                              *       *       *       *       *

  Contractor Services                                          *       *       *       *       *

  Maint. Material & Services                                   *       *       *       *       *

  Back-up Power Fee                                            *       *       *       *       *

  Insurance                                                    *       *       *       *       *

  Effluent Charge                                              *       *       *       *       *

  Lease Fees for O2 Plant & Mobile Equipment                   *       *       *       *       *

  Additional Start-Up Costs                                    *       *       *       *       *

  Others (Mill and Head Office)                                *       *       *       *       *
                                                            -----   -----   -----   -----   -----

  Total Other Fixed Costs                                      *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)                      *       *       *       *       *

Total Fixed Production Costs                                   *       *       *       *       *


Distribution Cost                                              *       *       *       *       *

  Sales Commission (% invoiced Production
    after Transp.)                                             *       *       *       *       *

  Commission Fees                                              *       *       *       *       *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                       *       *       *       *       *

  Transportation Cost (Euro/t)                                 *       *       *       *       *

  Pulp Production                                              *       *       *       *       *

  Transportation Cost on sold product                          *       *       *       *       *

  Total Distribution Costs                                     *       *       *       *       *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                         Page 13 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                             Mrz    Jun    Sep    Dez    Mrz    Jun    Sep    Dez    Mrz    Jun    Sep    Dez
                                                  07     07     07     07     08     08     08     08     09     09     09     09
<S>                          <C>         <C>     <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Operating Half Year          Total No.   20.00    *      *      *      *      *      *      *      *      *      *      *      *
                              of Yrs.

Number of Months in Period
  from Start-Up                                   *      *      *      *      *      *      *      *      *      *      *      *
--------------------------------------------------------------------------------------------------------------------------------
Operating Costs

Labor Cost

  No. of Employees - White Collar                 *      *      *      *      *      *      *      *      *      *      *      *

  Salary per Employee - White Collar (Euro) *     *      *      *      *      *      *      *      *      *      *      *      *

  No. of Employees - Blue Collar                  *      *      *      *      *      *      *      *      *      *      *      *

  Salary per Employee - Blue Collar (Euro)   *    *     *      *      *      *      *      *      *      *      *      *      *

  No. of Employees - Trainees                     *     *      *      *      *      *      *      *      *      *      *      *

  Salary per Employee - Trainees (Euro)      *    *     *      *      *      *      *      *      *      *      *      *      *

  No. of Employees - Logistic Subsidiary
      (incl. 3 trainees)                          *     *      *      *      *      *      *      *      *      *      *      *

  Salary per Employee - Logistic
      Subsidiary (Euro)                       *    *     *      *      *      *      *      *      *      *      *      *      *

  No. of Employees - Wood Procurement
      Subsidiary  (incl. 3 trainees)               *     *      *      *      *      *      *      *      *      *      *      *

  Salary per Employee - Wood Procurement
      Subsidiary (Euro)                       *    *     *      *      *      *      *      *      *      *      *      *      *

  Total Labor Costs                           *    *     *      *      *      *      *      *      *      *      *      *      *

  UNITARY COSTS (EURO PER TONNE PRODUCED)     *    *     *      *      *      *      *      *      *      *      *      *      *


Other Fixed Costs

  Contractor Services                         *    *     *      *      *      *      *      *      *      *      *      *      *

  Maint. Material & Services                  *    *     *      *      *      *      *      *      *      *      *      *      *

  Back-up Power Fee                           *    *     *      *      *      *      *      *      *      *      *      *      *

  Insurance                                   *    *     *      *      *      *      *      *      *      *      *      *      *

  Effluent Charge                             *    *     *      *      *      *      *      *      *      *      *      *      *

  Lease Fees for O2 Plant & Mobile
    Equipment                                 *    *     *      *      *      *      *      *      *      *      *      *      *

  Additional Start-Up Costs                   *    *     *      *      *      *      *      *      *      *      *      *      *

  Others (Mill and Head Office)               *    *     *      *      *      *      *      *      *      *      *      *      *
                                                  ---  -----   -----  -----   -----   -----   -----   -----   -----   -----   ----


  Total Other Fixed Costs                     *    *     *      *      *      *      *      *      *      *      *      *      *

  UNITARY COSTS (EURO PER TONNE PRODUCED)     *    *     *      *      *      *      *      *      *      *      *      *      *

Total Fixed Production Costs                  *    *     *      *      *      *      *      *      *      *      *      *      *


Distribution Cost

  Sales Commission (% invoiced Production
    after Transp.)                                 *     *      *      *      *      *      *      *      *      *      *      *

  Commission Fees                             *    *     *      *      *      *      *      *      *      *      *      *      *

 UNITARY COSTS (EURO PER TONNE PRODUCED)      *    *     *      *      *      *      *      *      *      *      *      *      *

  Transportation Cost (Euro/t)                     *     *      *      *      *      *      *      *      *      *      *      *

  Pulp Production                                  *     *      *      *      *      *      *      *      *      *      *      *

  Transportation Cost on sold product         *    *     *      *      *      *      *      *      *      *      *      *      *

  Total Distribution Costs                    *    *     *      *      *      *      *      *      *      *      *      *      *

 UNITARY COSTS (EURO PER TONNE PRODUCED)      *    *     *      *      *      *      *      *      *      *      *      *      *
</Table>

<Table>
<Caption>
Date                                             Mrz    Jun    Sep    Dez    Mrz    Jun    Sep    Dez    Mrz    Jun    Sep    Dec
                                                  10     10     10     10     11     11     11     11     12     12     12     12
<S>                          <C>         <C>     <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Operating Half Year          Total No.   20.00    *      *      *      *      *      *      *      *      *      *      *      *
                              of Yrs.

Number of Months in Period
  from Start-Up                                   *      *      *      *      *      *      *      *      *      *      *      *
---------------------------------------------------------------------------------------------------------------------------------
Operating Costs

Labor Cost

  No. of Employees - White Collar                 *      *      *      *      *      *      *      *      *      *      *      *

  Salary per Employee - White Collar (Euro)       *      *      *      *      *      *      *      *      *      *      *      *

  No. of Employees - Blue Collar                  *      *      *      *      *      *      *      *      *      *      *      *

  Salary per Employee - Blue Collar (Euro)        *     *      *      *      *      *      *      *      *      *      *      *

  No. of Employees - Trainees                     *     *      *      *      *      *      *      *      *      *      *      *

  Salary per Employee - Trainees (Euro)           *     *      *      *      *      *      *      *      *      *      *      *

  No. of Employees - Logistic Subsidiary
      (incl. 3 trainees)                          *     *      *      *      *      *      *      *      *      *      *      *

  Salary per Employee - Logistic
      Subsidiary (Euro)                            *     *      *      *      *      *      *      *      *      *      *      *

  No. of Employees - Wood Procurement
      Subsidiary  (incl. 3 trainees)               *     *      *      *      *      *      *      *      *      *      *      *

  Salary per Employee - Wood Procurement
      Subsidiary (Euro)                            *     *      *      *      *      *      *      *      *      *      *      *

  Total Labor Costs                                *     *      *      *      *      *      *      *      *      *      *      *

  UNITARY COSTS (EURO PER TONNE PRODUCED)          *     *      *      *      *      *      *      *      *      *      *      *


Other Fixed Costs

  Contractor Services                              *     *      *      *      *      *      *      *      *      *      *      *

  Maint. Material & Services                       *     *      *      *      *      *      *      *      *      *      *      *

  Back-up Power Fee                                *     *      *      *      *      *      *      *      *      *      *      *

  Insurance                                        *     *      *      *      *      *      *      *      *      *      *      *

  Effluent Charge                                  *     *      *      *      *      *      *      *      *      *      *      *

  Lease Fees for O2 Plant & Mobile
    Equipment                                      *     *      *      *      *      *      *      *      *      *      *      *

  Additional Start-Up Costs                        *     *      *      *      *      *      *      *      *      *      *      *

  Others (Mill and Head Office)                    *     *      *      *      *      *      *      *      *      *      *      *
                                                      -----   -----  -----   -----   -----   -----   -----   -----   -----   ----


  Total Other Fixed Costs                          *     *      *      *      *      *      *      *      *      *      *      *

  UNITARY COSTS (EURO PER TONNE PRODUCED)          *     *      *      *      *      *      *      *      *      *      *      *

Total Fixed Production Costs                       *     *      *      *      *      *      *      *      *      *      *      *


Distribution Cost

  Sales Commission (% invoiced Production
    after Transp.)                                 *     *      *      *      *      *      *      *      *      *      *      *

  Commission Fees                                  *     *      *      *      *      *      *      *      *      *      *      *

 UNITARY COSTS (EURO PER TONNE PRODUCED)           *     *      *      *      *      *      *      *      *      *      *      *

  Transportation Cost (Euro/t)                     *     *      *      *      *      *      *      *      *      *      *      *

  Pulp Production                                        *      *      *      *      *      *      *      *      *      *      *

  Transportation Cost on sold product              *     *      *      *      *      *      *      *      *      *      *      *

  Total Distribution Costs                         *     *      *      *      *      *      *      *      *      *      *      *

 UNITARY COSTS (EURO PER TONNE PRODUCED)           *     *      *      *      *      *      *      *      *      *      *      *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.

</Table>
Babcock & Brown Limited                                         Page 14 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                                         Mrz   Jun   Sep   Dez   Mrz   Jun   Sep   Dez   Mrz   Jun   Sep   Dez
                                                              13    13    13    13    14    14    14    14    15    15    15    15
<S>                                      <C>         <C>     <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
Operating Half Year                      Total No.   20.00    *     *     *     *     *     *     *     *     *     *     *     *
                                          of Yrs.

Number of Months in Period from Start-Up                      *     *     *     *     *     *     *     *     *    *     *     *
----------------------------------------------------------------------------------------------------------------- -----------------
Operating Costs

Labor Cost

  No. of Employees - White Collar                             *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - White Collar (Euro)            *      *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Blue Collar                              *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Blue Collar (Euro)             *      *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Trainees                                 *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Trainees (Euro)                *      *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Logistic Subsidiary
      (incl. 3 trainees)                                      *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Logistic Subsidiary (Euro)     *      *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Wood Procurement Subsidiary
      (incl. 3 trainees)                                      *     *     *     *     *     *     *     *     *   *      *     *

  Salary per Employee - Wood Procurement
      Subsidiary (Euro)                                 *     *     *     *     *     *     *     *     *     *    *     *     *

  Total Labor Costs                                     *     *     *     *     *     *     *     *     *     *    *     *     *

  UNITARY COSTS (EURO PER TONNE PRODUCED)               *     *     *     *     *     *     *     *     *     *    *     *     *


Other Fixed Costs

  Contractor Services                                   *      *     *     *     *     *     *     *     *    *     *     *    *

  Maint. Material & Services                            *      *     *     *     *     *     *     *     *    *     *     *    *

  Back-up Power Fee                                     *      *     *     *     *     *     *     *     *    *     *     *    *

  Insurance                                             *      *     *     *     *     *     *     *     *    *     *     *    *

  Effluent Charge                                       *      *     *     *     *     *     *     *     *    *     *     *    *

  Lease Fees for O2 Plant & Mobile Equipment            *      *     *     *     *     *     *     *     *    *     *     *    *

  Additional Start-Up Costs                             *      *     *     *     *     *     *     *     *    *     *     *    *

  Others (Mill and Head Office)                         *      *     *     *     *     *     *     *     *    *     *     *    *
                                                              ---   ---   ---   ---   ---   ---   ---   ---   ---   ---   ---   ---

  Total Other Fixed Costs                               *      *     *     *     *     *     *     *     *    *     *     *    *

  UNITARY COSTS (EURO PER TONNE PRODUCED)               *      *     *     *     *     *     *     *     *    *     *     *    *

Total Fixed Production Costs                            *      *     *     *     *     *     *     *     *    *     *     *    *


Distribution Cost

  Sales Commission (% invoiced Production
    after Transp.)                                             *     *     *     *     *     *     *     *     *     *     *    *

  Commission Fees                                       *      *     *     *     *     *     *     *     *     *     *     *    *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                *      *     *     *     *     *     *     *     *     *     *     *    *

  Transportation Cost (Euro/t)                          *      *     *     *     *     *     *     *     *     *     *     *    *

  Pulp Production                                              *     *     *     *     *     *     *     *     *     *     *    *

  Transportation Cost on sold product                   *      *     *     *     *     *     *     *     *     *     *     *    *

  Total Distribution Costs                              *      *     *     *     *     *     *     *     *     *     *     *    *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                *      *     *     *     *     *     *     *     *     *     *     *    *

</Table>

<Table>
<Caption>
Date                                                         Mrz   Jun   Sep   Dez   Mrz   Jun   Sep   Dez   Mrz   Jun   Sep   Dez
                                                              16    16    16    16    17    17    17    17    18    18    18    18
<S>                                      <C>         <C>     <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
Operating Half Year                      Total No.   20.00    *     *     *     *     *     *     *     *     *     *     *     *
                                          of Yrs.

Number of Months in Period from Start-Up                      *     *     *     *     *     *     *     *     *    *     *     *
----------------------------------------------------------------------------------------------------------------- ----------------
Operating Costs

Labor Cost

  No. of Employees - White Collar                      *      *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - White Collar (Euro)            *      *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Blue Collar                       *      *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Blue Collar (Euro)             *      *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Trainees                          *      *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Trainees (Euro)                *      *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Logistic Subsidiary
      (incl. 3 trainees)                               *      *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Logistic Subsidiary (Euro)     *      *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Wood Procurement Subsidiary
      (incl. 3 trainees)                               *      *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Wood Procurement
      Subsidiary (Euro)                                *      *     *     *     *     *     *     *     *     *    *     *     *

  Total Labor Costs                                    *      *     *     *     *     *     *     *     *     *    *     *     *

  UNITARY COSTS (EURO PER TONNE PRODUCED)              *      *     *     *     *     *     *     *     *     *      *     *     *


Other Fixed Costs

  Contractor Services                                   *      *     *     *     *     *     *     *     *     *     *     *     *

  Maint. Material & Services                            *      *     *     *     *     *     *     *     *     *     *     *     *

  Back-up Power Fee                                     *      *     *     *     *     *     *     *     *     *     *     *     *

  Insurance                                             *      *     *     *     *     *     *     *     *     *     *     *     *

  Effluent Charge                                       *      *     *     *     *     *     *     *     *     *     *     *     *

  Lease Fees for O2 Plant & Mobile Equipment            *      *     *     *     *     *     *     *     *     *     *     *     *

  Additional Start-Up Costs                             *      *     *     *     *     *     *     *     *     *     *     *     *

  Others (Mill and Head Office)                         *      *     *     *     *     *     *     *     *     *     *     *     *
                                                              ---   ---   ---   ---   ---   ---   ---   ---   ---   ---   ---  ---

  Total Other Fixed Costs                               *      *     *     *     *     *     *     *     *     *     *     *     *

  UNITARY COSTS (EURO PER TONNE PRODUCED)               *      *     *     *     *     *     *     *     *     *     *     *     *

Total Fixed Production Costs                            *      *     *     *     *     *     *     *     *     *     *     *     *


Distribution Cost

  Sales Commission (% invoiced Production
    after Transp.)                                             *     *     *     *     *     *     *     *     *     *     *     *

  Commission Fees                                       *      *     *     *     *     *     *     *     *     *     *     *     *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                *      *     *     *     *     *     *     *     *     *     *     *     *

  Transportation Cost (Euro/t)                                 *     *     *     *     *     *     *     *     *     *     *     *

  Pulp Production                                              *     *     *     *     *     *     *     *     *     *     *     *

  Transportation Cost on sold product                   *      *     *     *     *     *     *     *     *     *     *     *     *

  Total Distribution Costs                              *      *     *     *     *     *     *     *     *     *     *     *     *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                *      *     *     *     *     *     *     *     *     *     *     *     *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>


Babcock & Brown Limited                                         Page 15 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                                         Mrz   Jun   Sep   Dez   Mrz   Jun   Sep   Dez   Mrz   Jun   Sep   Dez
                                                              19    19    19    19    20    20    20    20    21    21    21    21
<S>                                      <C>         <C>     <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
Operating Half Year                      Total No.   20.00    *     *     *     *     *     *     *     *     *    *     *     *
                                          of Yrs.

Number of Months in Period from Start-Up                      *     *     *     *     *     *     *     *     *    *     *     *
----------------------------------------------------------------------------------------------------------------- ----------------
Operating Costs

Labor Cost

  No. of Employees - White Collar                       *     *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - White Collar (Euro)             *     *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Blue Collar                        *     *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Blue Collar (Euro)              *     *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Trainees                           *     *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Trainees (Euro)                 *     *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Logistic Subsidiary
      (incl. 3 trainees)                                *     *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Logistic Subsidiary (Euro)      *     *     *     *     *     *     *     *     *     *    *     *     *

  No. of Employees - Wood Procurement Subsidiary
      (incl. 3 trainees)                                *     *     *     *     *     *     *     *     *     *    *     *     *

  Salary per Employee - Wood Procurement
      Subsidiary (Euro)                                 *     *     *     *     *     *     *     *     *     *    *     *     *

  Total Labor Costs                                     *     *     *     *     *     *     *     *     *     *    *     *     *

  UNITARY COSTS (EURO PER TONNE PRODUCED)               *     *     *     *     *     *     *     *     *     *     *     *     *

Other Fixed Costs

  Contractor Services                                   *      *     *     *     *     *     *     *     *     *     *     *     *

  Maint. Material & Services                            *      *     *     *     *     *     *     *     *     *     *     *     *

  Back-up Power Fee                                     *      *     *     *     *     *     *     *     *     *     *     *     *

  Insurance                                             *      *     *     *     *     *     *     *     *     *     *     *     *

  Effluent Charge                                       *      *     *     *     *     *     *     *     *     *     *     *     *

  Lease Fees for O2 Plant & Mobile Equipment            *      *     *     *     *     *     *     *     *     *     *     *     *

  Additional Start-Up Costs                             *      *     *     *     *     *     *     *     *     *     *     *     *

  Others (Mill and Head Office)                         *      *     *     *     *     *     *     *     *     *     *     *     *
                                                              ---   ---   ---   ---   ---   ---   ---   ---   ---   ---   ---   ---

  Total Other Fixed Costs                               *      *     *     *     *     *     *     *     *     *     *     *     *

  UNITARY COSTS (EURO PER TONNE PRODUCED)               *      *     *     *     *     *     *     *     *     *     *     *     *

Total Fixed Production Costs                            *      *     *     *     *     *     *     *     *     *     *     *     *


Distribution Cost

  Sales Commission (% invoiced Production
    after Transp.)                                             *     *     *     *     *     *     *     *     *     *     *     *

  Commission Fees                                       *      *     *     *     *     *     *     *     *     *     *     *     *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                *      *     *     *     *     *     *     *     *     *     *     *     *

  Transportation Cost (Euro/t)                                 *     *     *     *     *     *     *     *     *     *     *     *

  Pulp Production                                              *     *     *     *     *     *     *     *     *     *     *     *

  Transportation Cost on sold product                   *      *     *     *     *     *     *     *     *     *     *     *     *

  Total Distribution Costs                              *      *     *     *     *     *     *     *     *     *     *     *     *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                *      *     *     *     *     *     *     *     *     *     *     *     *

</Table>


<Table>
<Caption>
Date                                                         Mrz   Jun   Sep   Dez   Mrz   Jun   Sep   Dez   Mrz   Jun
                                                              22    22    22    22    23    23    23    23    24    24
<S>                                      <C>         <C>     <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
Operating Half Year                      Total No.   20.00    *     *     *     *     *     *     *     *     *    *
                                          of Yrs.

Number of Months in Period from Start-Up                      *     *     *     *     *     *     *     *     *    *
----------------------------------------------------------------------------------------------------------------- -----
Operating Costs

Labor Cost

  No. of Employees - White Collar                      *      *     *     *     *     *     *     *     *     *     *

  Salary per Employee - White Collar (Euro)            *      *     *     *     *     *     *     *     *     *     *

  No. of Employees - Blue Collar                       *      *     *     *     *     *     *     *     *     *    *

  Salary per Employee - Blue Collar (Euro)             *      *     *     *     *     *     *     *     *     *    *

  No. of Employees - Trainees                          *      *     *     *     *     *     *     *     *     *    *

  Salary per Employee - Trainees (Euro)                *      *     *     *     *     *     *     *     *     *    *

  No. of Employees - Logistic Subsidiary
      (incl. 3 trainees)                               *      *     *     *     *     *     *     *     *     *    *

  Salary per Employee - Logistic Subsidiary (Euro)     *      *     *     *     *     *     *     *     *     *     *

  No. of Employees - Wood Procurement Subsidiary
      (incl. 3 trainees)                               *      *     *     *     *     *     *     *     *     *     *

  Salary per Employee - Wood Procurement
      Subsidiary (Euro)                                 *     *     *     *     *     *     *     *     *     *     *

  Total Labor Costs                                     *     *     *     *     *     *     *     *     *     *     *

  UNITARY COSTS (EURO PER TONNE PRODUCED)               *     *     *     *     *     *     *     *     *     *     *


Other Fixed Costs

  Contractor Services                                   *      *     *     *     *     *     *     *     *     *     *

  Maint. Material & Services                            *      *     *     *     *     *     *     *     *     *     *

  Back-up Power Fee                                     *      *     *     *     *     *     *     *     *     *     *

  Insurance                                             *      *     *     *     *     *     *     *     *     *     *

  Effluent Charge                                       *      *     *     *     *     *     *     *     *     *     *

  Lease Fees for O2 Plant & Mobile Equipment            *      *     *     *     *     *     *     *     *     *     *

  Additional Start-Up Costs                             *      *     *     *     *     *     *     *     *     *     *

  Others (Mill and Head Office)                         *      *     *     *     *     *     *     *     *     *     *
                                                       ---    ---   ---   ---   ---   ---   ---   ---   ---   ---   ---


  Total Other Fixed Costs                               *      *     *     *     *     *     *     *     *     *     *

  UNITARY COSTS (EURO PER TONNE PRODUCED)               *      *     *     *     *     *     *     *     *     *     *

Total Fixed Production Costs                            *      *     *     *     *     *     *     *     *     *     *


Distribution Cost

  Sales Commission (% invoiced Production
    after Transp.)                                      *      *     *     *     *     *     *     *     *     *     *

  Commission Fees                                       *      *     *     *     *     *     *     *     *     *     *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                *      *     *     *     *     *     *     *     *     *     *

  Transportation Cost (Euro/t)                          *      *     *     *     *     *     *     *     *     *     *

  Pulp Production                                       *      *     *     *     *     *     *     *     *     *     *

  Transportation Cost on sold product                   *      *     *     *     *     *     *     *     *     *     *

  Total Distribution Costs                              *      *     *     *     *     *     *     *     *     *     *

 UNITARY COSTS (EURO PER TONNE PRODUCED)                *      *     *     *     *     *     *     *     *     *     *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>



Babcock & Brown Limited                                         Page 16 of OPER


<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                                          Dez     Jun     Dez     Jun     Sep     Dez     Mrz     Jun     Sep
                                                               02      03      03      04      04      04      05      05      05
<S>                                      <C>         <C>      <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year                      Total No.   20.00     *       *       *       *       *       *       *       *       *
                                          of Yrs.

Number of Months in Period from Start-Up                       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Total Operating Costs                                 *        *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)             *        *       *       *       *       *       *       *       *       *
</Table>

<Table>
<Caption>
Date                                                          Dez     Mrz     Jan     Sep     Dez
                                                               05      06      06      06      06
<S>                                      <C>         <C>      <C>     <C>     <C>     <C>     <C>
Operating Half Year                      Total No.   20.00     *       *       *       *       *
                                          of Yrs.

Number of Months in Period from Start-Up                       *       *       *       *       *
------------------------------------------------------------------------------------------------
Total Operating Costs                                 *        *       *       *       *       *

  UNITARY COSTS (EURO PER TONNE PRODUCED)             *        *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 17 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        07      07      07      07      08      08      08      08      09      09      09      09
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Total Operating Costs            *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        10      10      10      10      11      11      11      11      12      12      12      12
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Total Operating Costs            *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 18 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        13      13      13      13      14      14      14      14      15      15      15      15
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Total Operating Costs            *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        16      16      16      16      17      17      17      17      18      18      18      18
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Total Operating Costs            *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 19 of OPER

<Page>

Zellstoff-Fabrik Stendal GmbH
Base Case Financial Model

All Euro amounts in Thousands

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez
                                        19      19      19      19      20      20      20      20      21      21      21      21
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *       *       *
----------------------------------------------------------------------------------------------------------------------------------
Total Operating Costs            *      *       *       *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)             *      *       *       *       *       *       *       *       *       *       *       *       *
</Table>

<Table>
<Caption>
Date                                   Mrz     Jun     Sep     Dez     Mrz     Jun     Sep     Dez     Mrz     Jun
                                        22      22      22      22      23      23      23      23      24      24
<S>                   <C>       <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Operating Half Year   Total No. 20.00   *       *       *       *       *       *       *       *       *       *
                       of Yrs.

Number of Months in
 Period from Start-Up                   *       *       *       *       *       *       *       *       *       *
------------------------------------------------------------------------------------------------------------------
Total Operating Costs            *      *       *       *       *       *       *       *       *       *       *

  UNITARY COSTS (EURO PER
    TONNE PRODUCED)              *      *       *       *       *       *       *       *       *       *       *

                                        * Mercer has made an application to the SEC to redact this information.
                                          The information has been filed separately with the SEC.
</Table>

Babcock & Brown Limited                                          Page 20 of OPER