Exhibit 4.12


 


 


Euro 600,000,000


 


CREDIT AGREEMENT


 


 


dated 29 June 2005


 


 


for


 


 


SAPPI
LIMITED


 


 


arranged by


BNP PARIBAS

J.P. MORGAN PLC

SG CORPORATE & INVESTMENT BANKING


 


 


with


 


 


BNP PARIBAS


acting as Agent


 


 


BRINGING THIS
DOCUMENT OR ANY CERTIFIED COPY OF THIS DOCUMENT INTO THE REPUBLIC OF AUSTRIA AS
WELL AS ANY WRITTEN CONFIRMATION OR WRITTEN REFERENCE TO THIS DOCUMENT MAY
CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY TAX. PLEASE READ CLAUSES 13.5
(STAMP TAXES), 29.1 (PAYMENTS), 31 (NOTICES) AND 37 (PLACE OF PERFORMANCE) OF
THIS AGREEMENT IN CONNECTION WITH THE FOREGOING.


 


 





 


Ref: JCT/JLM/FG


 





















 


CONTENTS


 


	
  CLAUSE

  	
   

  	
  PAGE

  
	
   

  	
  SECTION 1

  	
   

  
	
   

  	
  INTERPRETATION

  	
   

  
	
  1.

  	
  Definitions
  and interpretation

  	
  1

  
	
   

  	
  SECTION 2

  	
   

  
	
   

  	
  THE FACILITY

  	
   

  
	
  2.

  	
  The
  Facility

  	
  13

  
	
  3.

  	
  Purpose

  	
  13

  
	
  4.

  	
  Conditions of Utilisation

  	
  13

  
	
   

  	
  SECTION 3

  	
   

  
	
   

  	
  UTILISATION

  	
   

  
	
  5.

  	
  Utilisation

  	
  15

  
	
  6.

  	
  Optional
  Currencies

  	
  16

  
	
   

  	
  SECTION 4

  	
   

  
	
   

  	
  REPAYMENT, PREPAYMENT AND
  CANCELLATION

  	
   

  
	
  7.

  	
  Repayment

  	
  17

  
	
  8.

  	
  Prepayment
  and cancellation

  	
  17

  
	
   

  	
  SECTION 5

  	
   

  
	
   

  	
  COSTS OF UTILISATION

  	
   

  
	
  9.

  	
  Interest

  	
  20

  
	
  10.

  	
  Interest
  Periods

  	
  21

  
	
  11.

  	
  Changes
  to the calculation of interest

  	
  21

  
	
  12.

  	
  Fees

  	
  22

  
	
   

  	
  SECTION 6

  	
   

  
	
   

  	
  ADDITIONAL PAYMENT OBLIGATIONS

  	
   

  
	
  13.

  	
  Tax
  gross up and indemnities

  	
  25

  
	
  14.

  	
  Increased
  costs

  	
  30

  
	
  15.

  	
  Other
  indemnities

  	
  31

  
	
  16.

  	
  Mitigation
  by the Lenders

  	
  32

  
	
  17.

  	
  Costs
  and expenses

  	
  32

  
	
   

  	
  SECTION 7

  	
   

  
	
   

  	
  GUARANTEE

  	
   

  
	
  18.

  	
  Guarantee
  and indemnity

  	
  34

  
	
   

  	
  SECTION 8

  	
   

  
	
   

  	
  REPRESENTATIONS, UNDERTAKINGS
  AND EVENTS OF DEFAULT

  	
   

  
	
  19.

  	
  Representations

  	
  38

  
	
  20.

  	
  Information
  undertakings

  	
  40

  
	
  21.

  	
  Financial
  covenants

  	
  43

  
	
  22.

  	
  General
  undertakings

  	
  46

  
	
  23.

  	
  Events
  of Default

  	
  51

  
	
   

  	
  SECTION 9

  	
   

  
	
   

  	
  CHANGES TO PARTIES

  	
   

  
	
  24.

  	
  Changes
  to the Lenders

  	
  56

  
	
  25.

  	
  Changes
  to the Obligors

  	
  59

  



 


(i)





















 


	
   

  	
  SECTION 10

  	
   

  
	
   

  	
  THE FINANCE PARTIES

  	
   

  
	
  26.

  	
  Role
  of the Agent and the Mandated Lead Arrangers

  	
  62

  
	
  27.

  	
  Conduct
  of business by the Finance Parties

  	
  66

  
	
  28.

  	
  Sharing
  among the Lenders

  	
  66

  
	
   

  	
  SECTION 11

  	
   

  
	
   

  	
  ADMINISTRATION

  	
   

  
	
  29.

  	
  Payment
  mechanics

  	
  68

  
	
  30.

  	
  Set-off

  	
  70

  
	
  31.

  	
  Notices

  	
  70

  
	
  32.

  	
  Calculations
  and certificates

  	
  72

  
	
  33.

  	
  Partial
  invalidity

  	
  73

  
	
  34.

  	
  Remedies
  and waivers

  	
  73

  
	
  35.

  	
  Amendments
  and waivers

  	
  73

  
	
  36.

  	
  Counterparts

  	
  74

  
	
  37.

  	
  Place
  of performance

  	
  74

  
	
   

  	
  SECTION 12

  	
   

  
	
   

  	
  GOVERNING LAW AND ENFORCEMENT

  	
   

  
	
  38.

  	
  Governing
  law

  	
  75

  
	
  39.

  	
  Enforcement

  	
  75

  
	
   

  	
  THE SCHEDULE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  SCHEDULES

  	
   

  



 


	
  SCHEDULE

  	
   

  	
  PAGE

  
	
   

  	
   

  
	
  SCHEDULE 1 The
  Original Parties

  	
  76

  
	
  SCHEDULE 2
  Conditions Precedent

  	
  78

  
	
  SCHEDULE 3
  Utilisation Request

  	
  82

  
	
  SCHEDULE 4
  Mandatory Cost Formulae

  	
  83

  
	
  SCHEDULE 5 Form of
  Transfer Certificate

  	
  86

  
	
  SCHEDULE 6 Form of
  Accession Letter

  	
  88

  
	
  SCHEDULE 7 Form of
  Resignation Letter

  	
  89

  
	
  SCHEDULE 8 Form of
  Compliance Certificate

  	
  90

  
	
  SCHEDULE 9
  Existing Security (as at 30 September 2004)

  	
  92

  
	
  SCHEDULE 10
  Existing Subsidiary Indebtedness (as at 30 September 2004)

  	
  93

  
	
  SCHEDULE 11
  Timetables

  	
  94

  



 


(ii)





















 


THIS AGREEMENT is
dated 29 June 2005 and made between:


 


(1)                            SAPPI LIMITED (the “Company”);


 


(2)                            THE SUBSIDIARIES of the Company
listed in Part 1 of Schedule 1 as original borrowers (the “Original Borrowers”);


 


(3)                            THE ENTITIES listed in Part 1 of
Schedule 1 as original guarantors (the “Original
Guarantors”);


 


(4)                            BNP PARIBAS, J.P. MORGAN PLC and SG
CORPORATE & INVESTMENT BANKING (the corporate and investment banking
division of the Société Générale) (the “Mandated
Lead Arrangers”);


 


(5)                            THE FINANCIAL INSTITUTIONS listed in
Part II of Schedule 1 (The Original Lenders)
as lenders (the “Original Lenders”);
and


 


(6)                            BNP PARIBAS as agent of the Lenders
(the “Agent”).


 


IT IS AGREED as
follows:


 


SECTION
1


INTERPRETATION


 


1.                                 DEFINITIONS AND INTERPRETATION


 


1.1                           Definitions


 


In this Agreement:


 


“Accession Letter” means a document substantially in the form
set out in Schedule 6 (Form of Accession
Letter).


 


“Additional Borrower” means a company which becomes an
Additional Borrower in accordance with Clause 25 (Changes to the Obligors).


 


“Additional Guarantor” means a company which becomes an
Additional Guarantor in accordance with Clause 25 (Changes to the Obligors).


 


“Additional Obligor” means an Additional Borrower or an
Additional Guarantor.


 


“Affiliate” means, in relation to any
person, a Subsidiary of that person or a Holding Company of that person or any
other Subsidiary of that Holding Company.


 


“Agent’s Spot Rate of Exchange” means the
Agent’s spot rate of exchange for the purchase of the relevant currency with
the Base Currency in the London foreign exchange market at or about 11:00 a.m.
on a particular day.


 


“AO” means the Austrian Business Composition
Act (Ausgleichsordnung-AO)


 


“Austrian Borrower” means a Borrower
incorporated in Austria.


 


“Austrian Guarantor” means a Guarantor
incorporated in Austria.


 


“Authorisation” means an authorisation,
consent, approval, resolution, licence, exemption, filing or registration.


 


“Availability Period” means the period from
and including the date of this Agreement to and including the date falling one
month prior to the Termination Date.


 





















 


“Available Commitment” means a Lender’s
Commitment minus:


 


(a)                                   the Base Currency Amount of its
participation in any outstanding Loans; and


 


(b)                                  in relation to any proposed
Utilisation, the Base Currency Amount of its participation in any Loans that
are due to be made on or before the proposed Utilisation Date, other than that
Lender’s participation in any Loans that are due to be repaid, prepaid or, as
the case may be, expire on or before the proposed Utilisation Date.


 


“Available Facility” means the aggregate for
the time being of each Lender’s Available Commitment.


 


“Base Currency” means euro.


 


“Base Currency Amount” means, in relation to
a Loan, the amount specified in the Utilisation Request delivered by a Borrower
for that Loan (or, if the amount requested is not denominated in the Base
Currency, the amount of such Loan converted into the Base Currency at the Agent’s
Spot Rate of Exchange on the date which is three Business Days before the
Utilisation Date or, if later, on the date the Agent receives the Utilisation
Request) adjusted to reflect any repayment, prepayment or cancellation of the
Loan as the case may be.


 


“Borrower” means an Original Borrower or an Additional
Borrower, unless it has ceased to be a Borrower in accordance with Clause 25 (Changes to the Obligors).


 


“Break Costs” means the amount (if any) by
which:


 


(a)                                   the interest (other than the Margin
and any Mandatory Cost) which a Lender would have received for the period from
the date of receipt of all or any part of its participation in a Loan or Unpaid
Sum to the last day of the current Interest Period in respect of that Loan or
Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the
last day of that Interest Period;


 


exceeds:


 


(b)                                  the amount which that Lender would be
able to obtain by placing an amount equal to the principal amount or Unpaid Sum
received by it on deposit with a leading bank in the Relevant Interbank Market
for a period starting on the Business Day following receipt or recovery and
ending on the last day of the current Interest Period.


 


“Business Day” means a day (other than a
Saturday or Sunday) on which banks are open for general business in London and
in Paris and:


 


(a)                                   (in relation to any date for payment
or purchase of a currency other than euro) the principal financial centre of
the country of that currency; or


 


(b)                                  (in relation to any date for payment
or purchase of euro) which is a TARGET Day.


 


“CO” means the Swiss Federal Code of
Obligation.


 


“Commitment” means:


 


(a)                                   in relation to an Original Lender,
the amount in the Base Currency set opposite its name under the heading “Commitment”
in Part II of Schedule 1 (The Original
Parties) and the amount of any other Commitment transferred to it
under this Agreement; and


 


2





















 


(b)                                  in relation to any other Lender, the
amount in the Base Currency of any Commitment transferred to it under this
Agreement,


 


to the extent not
cancelled, reduced or transferred by it under this Agreement.


 


“Compliance Certificate” means a certificate
substantially in the form set out in Schedule 8 (Form of Compliance Certificate).


 


“Confidentiality Undertaking” means a
confidentiality undertaking substantially in a recommended form of the LMA or
in any other form agreed between the Company and the Agent.


 


“Default” means an Event of Default or any
event or circumstance specified in Clause 23 (Events
of Default) which would (with the expiry of a grace period, the
giving of notice, the making of any determination under the Finance Documents
or any combination of any of the foregoing) be an Event of Default.


 


“Disposal” means a sale, transfer or other
disposal (including by way of lease or loan) by a person of all or part of its
assets, whether by one transaction or a series of transactions.


 


“Environmental Claim” means any claim,
proceeding or investigation by a person in respect of any Environmental Law.


 


“Environmental Law” means any applicable law
in any jurisdiction in which any Group Company conducts business which relates
to the pollution or protection of the environment or harm to or the protection
of human health or the health of animals or plants.


 


“EURIBOR” means, in relation to any Loan in
euro:


 


(a)                                   the applicable Screen Rate; or


 


(b)                                  (if no Screen Rate is available for
the period of that Loan) the arithmetic mean of the rates (rounded upwards to
four decimal places) as supplied to the Agent at its request quoted by the
Reference Banks to leading banks in the European interbank market,


 


as of the Specified
Time on the Quotation Day for the offering of deposits in euro for a period
comparable to the Interest Period of the relevant Loan.


 


“Event of Default” means any event or
circumstance specified as such in Clause 23 (Events
of Default).


 


“Existing Facility” means, the facility made
available to Sappi Papier Holding GmbH (formerly Sappi Papier Holding AG)
pursuant to a credit agreement dated 11 July 2001 made between Sappi Papier Holding
AG as borrower, the guarantors named in it, the lenders named in it, ABN AMRO
Bank N.V., Citibank International plc and J.P. Morgan PLC as lead arrangers and
Citibank International plc as agent.


 


“Facility” means the multicurrency revolving
loan facility made available under this Agreement as described in Clause 2.1 (The Facility).


 


“Facility Office” means the office or
offices notified by a Lender to the Agent in writing on or before the date it
becomes a Lender (or, following that date, by not less than five Business Days’



 


3





















 


written notice) as
the office or offices through which it will perform its obligations under this
Agreement.


 


“Fee Letter” means the letter dated 13 April
2005 addressed by the Mandated Lead Arrangers to Sappi International S.A. and
any other fee letter or letters dated on or about the date of this Agreement
between the Agent and the Company setting out any of the fees referred to in
Clause 12 (Fees).


 


“Finance Document” means this Agreement, any
Fee Letter, any Accession Letter, any Resignation Letter and the Mandate
Letter.


 


“Finance Party” means the Agent, the
Mandated Lead Arrangers or a Lender.


 


“Financial Indebtedness” means (without
double counting) any indebtedness for or in respect of:


 


(a)                                   moneys borrowed;


 


(b)                                  any amount raised by acceptance under
any acceptance credit facility or dematerialised equivalent;


 


(c)                                   any amount raised pursuant to any
note purchase facility or the issue of bonds, notes, debentures, loan stock or
any similar instrument;


 


(d)                                  the amount of any liability in
respect of any hire purchase agreement, conditional sale agreement or lease
which would, in accordance with generally accepted accounting standards in the
relevant jurisdiction be treated as a finance or capital lease;


 


(e)                                   any guarantee, bond, stand-by letter
of credit or other similar instrument issued in connection with the performance
of contracts;


 


(f)                                     any interest rate or currency swap
agreement or any other hedging or derivatives instrument or agreement;


 


(g)                                  any arrangement entered into
primarily as a method of raising finance pursuant to which any asset sold or
otherwise disposed of by that person is or may be leased to or re-acquired by a
Group Company (whether following the exercise of an option or otherwise); or


 


(h)                                  any guarantee, indemnity or similar
insurance against financial loss given in respect of the obligation of any
person falling within any of paragraphs (a) to (g) above,


 


except that
indebtedness owing by one Group Company to another Group Company shall not be
taken into account as Financial Indebtedness.


 


“Group” means the Company and its
Subsidiaries for the time being and “Group
Company” means any one of the same.


 


“Guarantor”
means an Original Guarantor or an Additional Guarantor, unless it has ceased to
be a Guarantor in accordance with Clause 25 (Changes
to the Obligors).


 


“Holding Company” means, in relation to a
company or corporation, any other company or corporation in respect of which it
is a Subsidiary.


 


4





















 


“IFRS” means Standards and
Interpretations adopted by the International Accounting Standards Board (IASB).


 


“Information Package” means the documents in
the form approved by the Company concerning the Group which, at the Company’s
request and on its behalf, was prepared in relation to the syndication of the
Facility and distributed by the Mandated Lead Arrangers to selected financial
institutions before the date of this Agreement.


 


“Interest Period” means, in relation to a
Loan, each period determined in accordance with Clause 10 (Interest Periods) and, in relation to an
Unpaid Sum, each period determined in accordance with Clause 9.3 (Default interest).


 


“Joint Venture” means any joint venture,
partnership or equivalent arrangement.


 


“KO” means the Austrian Bankruptcy Code (Konkursordnung-KO).


 


“Lender” means:


 


(a)                                   any Original Lender; and


 


(b)                                  any bank or financial institution
which has become a Party as a Lender in accordance with Clause 24 (Changes to the Lenders),


 


which in each case
has not ceased to be a Party in accordance with the terms of this Agreement.


 


“LIBOR” means, in relation to any Loan:


 


(a)                                   the applicable Screen Rate; or


 


(b)                                  (if no Screen Rate is available for
the currency or period of that Loan) the arithmetic mean of the rates (rounded
upwards to four decimal places) as supplied to the Agent at its request quoted
by the Reference Banks to leading banks in the London interbank market,


 


as of the Specified
Time on the Quotation Day for the offering of deposits in the currency of that
Loan and for a period comparable to the Interest Period for that Loan.


 


“Loan” means a loan made or to be made under
the Facility or the principal amount outstanding for the time being of that
Loan.


 


“LMA” means the Loan Market Association.


 


“Majority Lenders” means:


 


(a)                                   until the Total Commitments have been
reduced to zero, a Lender or Lenders whose Commitments aggregate more than 662/3
per cent. of the Total Commitments (or, if the Total Commitments have been
reduced to zero, and there are no Loans then outstanding, aggregated more than
662/3 per cent. of the Total Commitments immediately
prior to that reduction); or


 


(b)                                  at any other time, a Lender or
Lenders whose participations in the Facility then outstanding aggregate more
than 662/3 per cent. of all the Facility then
outstanding.


 


5





















 


“Mandate Letter” means the letter dated 13
April 2005 addressed by the Mandated Lead Arrangers to Sappi International S.A.


 


“Mandatory Cost” means the percentage rate
per annum calculated by the Agent in accordance with Schedule 4 (Mandatory Cost Formulae).


 


“Margin” means,
in relation to a particular Interest Period, the rate per annum determined by
reference to the credit ratings assigned as follows:


 


(a)                                   by S&P to the Company’s long-term
senior unsecured debt not credit enhanced; and


 


(b)


 


(i)                                  while Moody’s do not assign a credit
rating to the Company, by Moody’s to Sappi Papier Holdings GmbH’s long-term
senior unsecured debt (benefiting from the guarantee given by Sappi Limited);
or


 


(ii)                               while Moody’s assign a credit rating
to the Company, by Moody’s to the Company’s long-term senior unsecured debt not
credit enhanced,


 


(each a “long-term credit rating”) last published
(and not withdrawn) before the Quotation Day for that Interest Period, in
accordance with the following table:


 


	
  S&P/Moody’s Rating

  	
   

  	
  Margin (% p.a.)

  	
   

  
	
  BB+/Ba1 or
  below

  	
   

  	
  0.60

  	
   

  
	
  BBB-/Baa3

  	
   

  	
  0.40

  	
   

  
	
  BBB/Baa2

  	
   

  	
  0.30

  	
   

  
	
  BBB+/Baa1 or
  above

  	
   

  	
  0.25

  	
   

  



 


However:


 


(a)                                   if the long-term credit ratings
assigned by Moody’s and S&P differ, the Margin will be determined as the
mean of:


 


(i)                                  the Margin that would apply in
relation to the rating provided by S&P; and


 


(ii)                               the Margin that would apply in
relation to the rating provided by Moody’s, and


 


(b)                                  if there is no current long-term
credit rating published by Moody’s or S&P or if an Event of Default occurs
and is continuing on the Quotation Day for that Interest Period, the Margin
will be 0.60 per cent. per annum.


 


“Material Adverse Effect” means a material
adverse effect on the ability of the Obligors (taken together) to perform their
payment obligations under the Finance Documents or the ability of the Company
to comply with the covenants set out in Clause 21.1 (Financial covenants).


 


“Material Subsidiary” means, at any time, a
subsidiary of the Company which has:


 


(a)                                   earnings before interest and tax
representing 10 per cent. or more of the consolidated earnings before interest
and tax of the Group (the “Consolidated
Earnings”); or


 


(b)                                  gross assets representing 10 per
cent. or more of the consolidated gross assets of the Group (the “Consolidated Assets”); and


 


6





















 


(c)                                   in the event that those Group
Companies falling within (a) and (b) above when taken together with the
Obligors do not account for at least 90 per cent. of the Consolidated Earnings
and at least 90 per cent. of the Consolidated Assets, such other Group
Companies as are necessary to ensure that the Material Subsidiaries when taken
together with the Obligors account for at least 90 per cent. of the
Consolidated Earnings and at least 90 per cent. of the Consolidated Assets
(with Group Companies being included as Material Subsidiaries in the order in
which their earnings before interest and tax and/or gross assets are closest to
10 per cent. of the Consolidated Earnings or, as the case may be, the
Consolidated Assets),


 


in each case as set
out, until the first Compliance Certificate is delivered, in the list provided
to the Agent pursuant to Schedule 2 (Conditions
precedent) paragraph (3)(e) and thereafter as calculated by
reference to the latest annual consolidated financial statements of the Group
delivered by the Company to the Agent pursuant to Clause 20.1 (Financial statements) and as updated from
time to time in each Compliance Certificate.


 


“Month” means a period starting on one day
in a calendar month and ending on the numerically corresponding day in the next
calendar month, except that:


 


(a)                                   (subject to paragraph (c) below) if
the numerically corresponding day is not a Business Day, that period shall end
on the next Business Day in that calendar month in which that period is to end
if there is one, or if there is not, on the immediately preceding Business Day;


 


(b)                                  if there is no numerically
corresponding day in the calendar month in which that period is to end, that
period shall end on the last Business Day in that calendar month; and


 


(c)                                   if an Interest Period begins on the
last Business Day of a calendar month, that Interest Period shall end on the
last Business Day in the calendar month in which that Interest Period is to
end.


 


The above rules
will only apply to a period of one Month or the last Month of any period.


 


“Moody’s” means Moody’s Investors Service
Inc.


 


“Obligor Original Financial Statements”
means the audited consolidated financial statements of each Obligor for the
financial year ended 30 September 2004.


 


“Obligor” means a Borrower or a Guarantor.


 


“Optional Currency” means dollars or any
other currency (other than the Base Currency) which complies with the
conditions set out in Clause 4.3 (Conditions
relating to Optional Currencies).


 


“Original Financial Statements” means the
audited consolidated financial statements of the Company for the financial year
ended 30 September 2004.


 


“Original Obligor” means an Original
Borrower or an Original Guarantor.


 


“Outstandings” means the aggregate of the
Base Currency Amount from time to time of each of the Loans.


 


“Paper Business” means, any one or more of
the following businesses:


 


7





















 


(a)                                   the production, manufacture,
distribution, supply, sale, purchase and trading in respect of paper (including
but not limited to fine paper, coated and uncoated woodfree paper, packaging
paper, publication paper and newsprint);


 


(b)                                  pulp (including all chemical or other
manufacturing processes relating to pulp); and


 


(c)                                   wood products (including all initial
processes, manufacturing or otherwise relating to paper, pulp and paper pulp),
the growing of timber supplies,


 


and any other
businesses related or ancillary to any of the foregoing.


 


“Participating Member State” means any
member state of the European Communities that adopts or has adopted the euro as
its lawful currency in accordance with legislation of the European Union
relating to European Monetary Union.


 


“Party” means a party to this Agreement and
includes its successors in title, permitted assigns and permitted transferees.


 


“Quarter” means each period of three months
ending on a Quarter Date.


 


“Quarter Date” means the Company’s quarterly
accounting date on or around the end of any March, June, September or December.


 


“Qualifying Lender” has the meaning given to
it in Clause 13 (Tax gross up and
indemnities).


 


“Quotation Day” means, in relation to any
period for which an interest rate is to be determined:


 


(a)                                   (if the currency is sterling) the
first day of that period;


 


(b)                                  (if the currency is euro) two TARGET
Days before the first day of that period; or


 


(c)                                   (for any other currency) two Business
Days before the first day of that period,


 


unless market
practice differs in the Relevant Interbank Market for a currency, in which case
the Quotation Day for that currency will be determined by the Agent in
accordance with market practice in the Relevant Interbank Market (and if
quotations would normally be given by leading banks in the Relevant Interbank
Market on more than one day, the Quotation Day will be the last of those days).


 


“Reference Banks” means, in relation to
LIBOR, the principal London offices of BNP Paribas, JPMorgan Chase Bank, N.A.
and Société Générale and, in relation to EURIBOR, the principal office in
Brussels of BNP Paribas, JPMorgan Chase Bank, N.A. and Société Générale or such
other banks as may be appointed by the Agent in consultation with the Company.


 


“Relevant Interbank Market” means in
relation to euro, the European interbank market and, in relation to any other
currency, the London interbank market.


 


“Repeating Representations” means each of
the representations set out in Clause 19 (Representations)
other than Clause 19.7 (Deduction of Tax),
Clause 19.8 (No filing or stamp taxes),
Clause 19.9 (No proceedings pending or
threatened), Clause 19.10 (Financial
statements), Clause 19.12 (Pari
passu ranking), Clause 19.13 (Environmental
compliance), Clause 19.14 (Environmental Claim), Clause 19.17 (No misleading information), Clause 19.18 (Ownership of each Obligor) and Clause
19.21 (Representation relating to Belgian
Obligor), but on the basis that the words “or other Default” are
deleted in Clause 19.16 (No Default)
on each 


 


8





















 


repetition of the
representation in Clause 19.16 (No Default)
which occurs on the first day of an Interest Period.


 


“Reservations” means the principle that
equitable remedies are remedies which may be granted or refused at the
discretion of the court, the limitation of enforcement by laws relating to
bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria,
administration and other laws generally affecting the rights of creditors, the
time barring of claims under the Limitations Act, the possibility that an
undertaking to assume liability for or to indemnify a person against
non-payment of United Kingdom stamp duty may be void, defences of set-off or
counterclaim and similar principles, rights and defences under the laws of any
foreign jurisdictions in which relevant obligations may have to be performed,
and any qualifications relating to matters of law contained in or referred to
in the legal opinions to be delivered to the Agent pursuant to paragraph 2 of
Schedule 2 (Conditions Precedent).


 


“Restricted Obligations” means up-stream or
cross-stream benefits granted by a Swiss Obligor without full consideration
under Clause 18 (Guarantee and Indemnity),
13 (Tax gross up and indemnities)
and 15.2 (Other indemnities), in
each case in respect of:


 


(a)                                   a direct or indirect holding company
of that Swiss Obligor; and/or


 


(b)                                  a sister company of that Swiss
Obligor.


 


“Rollover Loan” means one or more Loans:


 


(a)                                   made or to be made on the same day
that one or more maturing Loan(s) is or are due to be repaid;


 


(b)                                  the aggregate amount of which is
equal to or less than the maturing Loan(s) (unless it is more than the maturing
Loan(s) solely because it arose as a result of the operation of Clause 6.2 (Unavailability of a currency));


 


(c)                                   in the same currency as the maturing
Loan(s) (unless it arose as a result of the operation of Clause 6.2 (Unavailability of a currency)); and


 


(d)                                  made or to be made for the purpose of
refinancing a maturing Loan.


 


“SA GAAP” means generally accepted
accounting principles in South Africa.


 


“Sappi Manufacturing” means Sappi
Manufacturing (Pty) Ltd.


 


“Sappi Manufacturing Group” means Sappi
Manufacturing and its Subsidiaries for the time being and “Sappi Manufacturing Group Company” means
any one of the same.


 


“S&P” means Standard & Poor’s Rating
Service.


 


“Screen Rate” means:


 


(a)                                   in relation to LIBOR, the British
Bankers Association Interest Settlement Rate for the relevant currency and
period; and


 


(b)                                  in relation to EURIBOR, the
percentage rate per annum determined by the Banking Federation of the European
Union for the relevant period,


 


9





















 


displayed on the
appropriate page of the Telerate screen. If the agreed page is replaced or
service ceases to be available, the Agent may specify another page or service
displaying the appropriate rate after consultation with the Company and the
Lenders.


 


“Security” means a mortgage, charge, pledge,
lien, right of set-off, retention of title provision, or any other security
interest securing any obligation of any person or any other agreement or
arrangement having the effect of giving security or preferential ranking to a
creditor.


 


“Specified Time” means a time determined in
accordance with Schedule 11 (Timetables).


 


“Subsidiary” means in relation to any
company or corporation, a company or corporation:


 


(a)                                   which is controlled, directly or
indirectly, by the first mentioned company or corporation;


 


(b)                                  more than half the issued share
capital of which is beneficially owned, directly or indirectly, by the first
mentioned company or corporation; or


 


(c)                                   which is a Subsidiary of another
Subsidiary of the first mentioned company or corporation,


 


and for this
purpose, a company or corporation shall be treated as being controlled by
another if that other company or corporation is able to direct its affairs
and/or to control the composition of its board of directors or equivalent body.


 


“Swiss Borrower” means a Borrower
incorporated, or for tax purposes resident in, Switzerland.


 


“Swiss Guarantor” means a Guarantor
incorporated, or for tax purposes resident in, Switzerland.


 


“Swiss Obligor” means a Swiss Borrower or a
Swiss Guarantor.


 


“Swiss Qualifying Lender” means a financial
institution which qualifies as a bank pursuant to the laws of its jurisdiction
of incorporation and which carries on a genuine banking activity as set out in
the explanatory note of the Swiss Federal Tax Administration No. S-02.128 (1.2000)
and S-02.123 (9.86).


 


“Swiss Withholding Tax” means any
withholding tax on the payment of interest and dividends (including
constructive dividends) in accordance with the Swiss Federal Statute on
Anticipatory Tax of 13 October 1965.


 


“TARGET” means Trans-European Automated
Real-time Gross Settlement Express Transfer payment system.


 


“TARGET Day” means any day on which TARGET
is open for the settlement of payments in euro.


 


“Tax” means any tax, levy, impost, duty or
other charge or withholding of a similar nature (including any penalty or
interest payable in connection with any failure to pay or any delay in paying
any of the same).


 


“Ten Non-Bank Regulation” means, at any
time, the explanatory notes of the Swiss Federal Tax Administration No.
S-02.128(1.2000) and S-02.122.1(4.99) or legislation or explanatory notes
addressing the same issues which are in force at such time.


 


10





















 


“Termination Date” means 31 May 2010.


 


“Total Commitments” means the aggregate of the
Commitments, being euro 600,000,000 at the date of this Agreement.


 


“Transfer Certificate” means a certificate
substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed
between the Agent and the Company.


 


“Transfer Date” means, in relation to a
transfer, the later of:


 


(a)                                   the proposed Transfer Date specified
in the Transfer Certificate; and


 


(b)                                  the date on which the Agent executes
the Transfer Certificate.


 


“Unpaid Sum” means any sum due and payable
but unpaid by an Obligor under the Finance Documents.


 


“URG” means the Austrian Business
Reorganisation Act (Unternehmensreorganisationsgesetz-URG).


 


“Utilisation” means a utilisation of the
Facility.


 


“Utilisation  Date” means the date of a Utilisation, being the date on which
a Loan is to be made.


 


“Utilisation  Request” means a notice substantially in the form set out in
Schedule 3 (Utilisation  Request).


 


“VAT” means value added tax as provided for
in the Value Added Tax Act 1994 and any other tax of a similar nature.


 


1.2                           Construction


 


(a)                            Any reference in this Agreement to:


 


(i)                                      “assets”
includes present and future properties, revenues and rights of every
description;


 


(ii)                                   the “European interbank market” means the interbank market for euro
operating in Participating Member States;


 


(iii)                                a “Finance
Document” or any other agreement or instrument is a reference to
that Finance Document or other agreement or instrument as amended or novated;


 


(iv)                               “indebtedness”
includes any obligation (whether incurred as principal or as surety) for the
payment or repayment of money, whether present or future, actual or contingent;


 


(v)                                  a Lender’s “participation”, in relation to: a Loan,
means the amount of such Loan that is owed to such Lender or, as the case may
be, the amount of such Loan that such Lender is obliged to make available;


 


(vi)                               a “person”
includes any person, firm, company, corporation, government, state or agency of
a state or any association, trust or partnership (whether or not having
separate legal personality) or two or more of the foregoing;


 


(vii)                            a “regulation”
includes any regulation, rule, official directive, request or guideline
(whether or not having the force of law but, in so far as the same applies to a
class of 


 


11





















 


financial
institutions of which a Lender is one, if not having the force of law, being a
regulation or the like with which such financial institutions customarily
comply in the ordinary course of their business) of any governmental, intergovernmental
or supranational body, agency, department or regulatory, self-regulatory or
other authority or organisation;


 


(viii)                         a provision of law is a reference to
that provision as amended or re-enacted; and


 


(ix)                                 unless a contrary indication appears,
a time of day is a reference to Paris time.


 


(b)                           where there is reference in this
Agreement to any amount, limit or threshold specified in euro, sterling or
dollars, in ascertaining whether or not that amount, limit or threshold has
been attained, broken or achieved, as the case may be, a non-euro amount shall
be counted on the basis of the equivalent in euro of that amount using the
Agent’s Spot Rate of Exchange.


 


(c)                            Section, Clause and Schedule headings
are for ease of reference only.


 


(d)                           Unless a contrary indication appears,
a term used in any other Finance Document or in any notice given under or in
connection with any Finance Document has the same meaning in that Finance
Document or notice as in this Agreement.


 


(e)                            A Default is “continuing” if it has not been remedied or
waived.


 


1.3                           Currency symbols and definitions


 


“$” and “dollars”
denote lawful currency of the United States of America. “£” and “sterling”
denote lawful currency of the United Kingdom and “EUR” and “euro”
means the single currency unit of the Participating Member States.


 


1.4                           Third party rights


 


A person who is not
a party to this Agreement has no right under the Contract (Rights of Third
Parties) Act 1999 to enforce any term of this Agreement.


 


12





















 


SECTION
2


THE FACILITY


 


2.                                 THE FACILITY


 


2.1                           The Facility


 


Subject to the
terms of this Agreement, the Lenders make available to the Borrowers a
multicurrency revolving loan facility in an aggregate amount of euro
600,000,000.


 


2.2                           Finance Parties’ rights and
obligations


 


(a)                            The obligations of each Finance Party
under the Finance Documents are several. Failure by a Finance Party to perform
its obligations under the Finance Documents does not affect the obligations of
any other Party under the Finance Documents. No Finance Party is responsible
for the obligations of any other Finance Party under the Finance Documents.


 


(b)                           The rights of each Finance Party
under or in connection with the Finance Documents are separate and independent
rights and any debt arising under the Finance Documents to a Finance Party from
an Obligor shall be a separate and independent debt.


 


(c)                            A Finance Party may, except as
otherwise stated in the Finance Documents, separately enforce its rights under
the Finance Documents.


 


3.                                 PURPOSE


 


3.1                           Purpose


 


(a)                            Each Borrower shall apply all amounts
borrowed by it under the Facility towards:


 


(i)                                      the general corporate purposes of the
Group; and


 


(ii)                                   the repayment and discharge of the
Existing Facility.


 


3.2                           Monitoring


 


No Finance Party is
bound to monitor or verify the application of any amount borrowed pursuant to
this Agreement.


 


4.                                 CONDITIONS OF UTILISATION


 


4.1                           Initial conditions precedent


 


No Borrower may
deliver a Utilisation Request unless the Agent has received all of the documents
and other evidence listed in Schedule 2 (Conditions
Precedent) in form and substance satisfactory to the Agent. The
Agent shall notify the Company and the Lenders promptly upon being so
satisfied.


 


4.2                           Further conditions precedent


 


(a)                            The Lenders will only be obliged to
comply with Clause 5.4 (Lenders’
participation) if on the date of the Utilisation Request and on the
proposed Utilisation Date (other than in the case of a Rollover Loan):


 


(i)                                      no Default is continuing or would
result from the proposed Loan; and


 


(ii)                                   the Repeating Representations to be
made by each Obligor are true in all material respects.


 


13





















 


4.3                           Conditions relating to Optional
Currencies


 


(a)                            A currency will constitute an
Optional Currency in relation to a Loan if:


 


(i)                                      it is readily available in the amount
required and freely convertible into the Base Currency in the Relevant
Interbank Market on the Quotation Day and the Utilisation Date for that Loan;
and


 


(ii)                                   it is dollars or has been approved by
the Agent (acting on the instructions of all the Lenders) prior to receipt by
the Agent of the Utilisation Request for that Loan.


 


(b)                           If the Agent has received a written
request from the Company by the Specified Time for a currency to be approved
under paragraph (a)(ii) above, the Agent will confirm to the Company by the
Specified Time:


 


(i)                                      whether or not the Lenders have
granted their approval; and


 


(ii)                                   if approval has been granted, the
minimum amount (and, if required, integral multiples) for any subsequent
Utilisation in that currency.


 


4.4                           Maximum number of Loans


 


(a)                            A Borrower may not deliver a
Utilisation Request if as a result of the proposed Utilisation more than 10
Loans would be outstanding.


 


(b)                           Any Loan made by a single Lender
under Clause 6.2 (Unavailability of a
currency) shall not be taken into account in this Clause 4.4.


 


14





















 


SECTION
3


UTILISATION


 


5.                                 UTILISATION


 


5.1                           Delivery of a Utilisation Request


 


A Borrower may
utilise the Facility by delivery to the Agent of a duly completed Utilisation
Request not later than the Specified Time.


 


5.2                           Completion of a Utilisation Request


 


(a)                            Each Utilisation Request is
irrevocable and will not be regarded as having been duly completed unless:


 


(i)                                      the proposed Utilisation Date is a
Business Day within the Availability Period;


 


(ii)                                   the currency and amount of the
Utilisation comply with Clause 5.3 (Currency
and amount); and


 


(iii)                                the proposed Interest Period complies
with Clause 10 (Interest Periods).


 


(b)                           Only one Loan may be requested in
each Utilisation Request.


 


5.3                           Currency and amount


 


(a)                            The currency specified in a
Utilisation Request must be the Base Currency or an Optional Currency.


 


(b)                           The amount of the proposed Loan must
be an amount whose Base Currency Amount is not more than the Available Facility
and which:


 


(i)                                      if the currency selected is the Base
Currency, is a minimum of euro 50,000,000 or, if less, the Available Facility
and an integral multiple of euro 10,000,000; or


 


(ii)                                   if the currency selected is dollars,
is a minimum of $50,000,000 or, if less, the Available Facility and an integral
multiple of $10,000,000; or


 


(iii)                                if the currency selected is an
Optional Currency other than dollars, is the minimum amount (or an integral
multiple, if required) specified by the Agent pursuant to paragraph (b) (ii) of
Clause 4.3 (Conditions relating to Optional
Currencies) or, if less, the Available Facility.


 


5.4                           Lenders’ participation


 


(a)                            If the conditions set out in this
Agreement have been met, each Lender shall make its participation in each Loan
available through its Facility Office.


 


(b)                           The amount of each Lender’s
participation in each Loan will be equal to the proportion borne by its
Available Commitment to the Available Facility immediately prior to making of
the Loan.


 


(c)                            The Agent shall determine the Base
Currency Amount of each Loan which is to be made in an Optional Currency and
shall notify each Lender of the amount, currency and the Base Currency Amount
of each Loan and the amount of its participation in that Loan, in each case by
the Specified Time.


 


15





















 


6.                                 OPTIONAL CURRENCIES


 


6.1                           Selection of currency


 


A Borrower (or the
Company on behalf of a Borrower) shall select the currency of a Loan in the
Utilisation Request.


 


6.2                           Unavailability of a currency


 


If before the
Specified Time on any Quotation Day in relation to a Loan:


 


(a)                                   the Agent has received notice from a
Lender that the Optional Currency requested is not readily available to it in
the amount required; or


 


(b)                                  a Lender notifies the Agent that
compliance with its obligation to participate in a Loan in the proposed
Optional Currency would contravene a law or regulation applicable to it,


 


the Agent will give
notice to the relevant Borrower to that effect by the Specified Time on that
day. In this event, any Lender that gives notice pursuant to this Clause 6.2
will be required to participate in the Loan in the Base Currency (in an amount
equal to that Lender’s proportion of the Base Currency Amount or, in respect of
a Rollover Loan, an amount equal to that Lender’s proportion of the Base
Currency Amount of the maturing Loan that is due to be repaid) and its
participation will be treated as a separate Loan denominated in the Base
Currency during that Interest Period.


 


6.3                           Participation in a Loan


 


Each Lender’s
participation in a Loan will be determined in accordance with paragraph (b) of
Clause 5.4 (Lenders’ participation).


 


16





















 


SECTION
4


REPAYMENT, PREPAYMENT AND CANCELLATION


 


7.                                 REPAYMENT


 


Each Borrower which
has drawn a Loan shall repay that Loan on the last day of its Interest Period.


 


8.                                 PREPAYMENT AND CANCELLATION


 


8.1                           Illegality


 


If, at any time
after the date of this Agreement, it becomes unlawful in any applicable
jurisdiction for a Lender to perform any of its obligations as contemplated by
this Agreement or to fund its participation in any Loan:


 


(a)                                   that Lender shall promptly notify the
Agent upon becoming aware of that event;


 


(b)                                  upon the Agent notifying the Company,
the Commitment of that Lender will be immediately cancelled; and


 


(c)                                   if the relevant Lender so requires,
each Borrower shall repay that Lender’s participation in the Loans made to that
Borrower on the last day of the Interest Period for each Loan occurring after
the Agent has notified the Company or, if earlier, the date specified by the
Lender in the notice delivered to the Agent (being no earlier than the last day
of any applicable grace period permitted by law).


 


8.2                           Change of Control


 


(a)                            For the purposes of this Clause 8.2, “associated person” means, in relation to
any person, a person who is acting in concert (as defined in The City Code on
Takeover and Mergers) with that person or is a connected person (as defined in
section 839 of the Income and Corporation Taxes Act 1988) of that person.


 


(b)                           If, on any date (an “Obligor Change of Control Date”) the whole
of the issued share capital of any Obligor ceases to be wholly owned, directly
or indirectly, by the Company, then each Lender may by written notice to the
Company and the Agent demand on or following the date falling 30 days after the
Obligor Change of Control Date:


 


(i)                                      that each Borrower shall prepay such
Lender’s participation in each of its Loan(s); and


 


(ii)                                   that such Lenders’ obligations under
this Agreement shall be terminated and such Lender’s Commitments be reduced to
zero.


 


(c)                            If, on any date (a “Change of Control Date”) a person (whether
alone or together with any associated person or persons acting in concert)
becomes the beneficial owner of shares in the issued share capital of the
Company carrying the right to exercise, or control the exercise of, more than
35 per cent. of the maximum number of votes exercisable at a general meeting of
the Company then, each Lender may by written notice to the Company and to the
Agent demand on or following the date falling 30 days after the Change of
Control Date:


 


(i)                                      that each Borrower shall prepay such
Lender’s participation in each of its Loans; and


 


17





















 


(ii)                                   that such Lenders’ obligations under
the Agreement shall be terminated and that Lender’s Commitments be reduced to
zero.


 


8.3                           Voluntary cancellation


 


The Company may, if
it gives the Agent not less than three Business Days’ (or such shorter period
as the Majority Lenders may agree) prior notice, cancel the whole or any part
(being a minimum amount of euro 50,000,000 and in integral multiples of euro
10,000,000) of the Available Facility. Any cancellation under this Clause 8.3
shall reduce the Commitments of the Lenders rateably.


 


8.4                           Voluntary prepayment of Loans


 


The Borrower to
which a Loan has been made may, if it gives the Agent not less than five
Business Days’ (or such shorter period as the Majority Lenders may agree) prior
notice, prepay the whole or any part of a Loan (but if in part, being an amount
that reduces the Base Currency Amount of the Loan by a minimum amount of euro
10,000,000).


 


8.5                           Right of repayment and cancellation
in relation to a single Lender


 


(a)                            If:


 


(i)                                      any sum payable to any Lender by an
Obligor is required to be increased under paragraph (c) of Clause 13.2 (Tax gross-up); or


 


(ii)                                   any Lender claims indemnification
from the Company under Clause 13.3 (Tax
indemnity) or Clause 14.1 (Increased
costs),


 


the Company may,
whilst the circumstance giving rise to the requirement or indemnification
continues, give the Agent notice of cancellation of the Commitment of that
Lender and its intention to procure the repayment of that Lender’s
participation in the Loans.


 


(b)                           On receipt of a notice referred to in
paragraph (a) above, the Commitment of that Lender shall immediately be reduced
to zero.


 


(c)                            On the last day of each Interest
Period in respect of a Loan outstanding under the Facility in respect of which
the Company has given notice under paragraph (a) above (or, if earlier, the
date specified by the Company in that notice), each Borrower to which a Loan is
outstanding shall repay that Lender’s participation in that Loan.


 


8.6                           Restrictions


 


(a)                            Any notice of cancellation or
prepayment given by any Party under this Clause 8 shall be irrevocable and,
unless a contrary indication appears in this Agreement, shall specify the date
or dates upon which the relevant cancellation or prepayment is to be made and
the amount of that cancellation or prepayment.


 


(b)                           Any prepayment under this Agreement
shall be made together with accrued interest on the amount prepaid and, subject
to any Break Costs, without premium or penalty.


 


(c)                            Unless a contrary indication appears
in this Agreement, any part of the Facility which is repaid or prepaid may be
reborrowed in accordance with the terms of this Agreement.


 


18





















 


(d)                           The Borrowers shall not repay or prepay
all or any part of the Loans or cancel all or any part of the Commitments
except at the times and in the manner expressly provided for in this Agreement.


 


(e)                            No amount of the Total Commitments
cancelled under this Agreement may be subsequently reinstated.


 


(f)                              If the Agent receives a notice under
this Clause 8 it shall promptly forward a copy of that notice to either the
Company or the affected Lender, as appropriate.


 


19





















 


SECTION
5


COSTS OF UTILISATION


 


9.                                 INTEREST


 


9.1                           Calculation of interest


 


The rate of
interest on each Loan for each Interest Period is the percentage rate per annum
which is the aggregate of the applicable:


 


(a)                                   Margin;


 


(b)                                  LIBOR or, in relation to any Loan in
euro, EURIBOR; and


 


(c)                                   Mandatory Cost, if any.


 


9.2                           Payment of interest


 


The Borrower to
which a Loan has been made shall pay accrued interest on that Loan on the last
day of each Interest Period (and, if the Interest Period is longer than six
Months, on the dates falling at six Monthly intervals after the first day of
the Interest Period).


 


9.3                           Default interest


 


(a)                            If an Obligor fails to pay any amount
payable by it under a Finance Document on its due date, interest shall accrue
on the overdue amount from the due date up to the date of actual payment (both
before and after judgment) at a rate 1.00 per cent. higher than the rate which
would have been payable if the overdue amount had, during the period of
non-payment, constituted a Loan in the currency of the overdue amount for successive
Interest Periods, each of a duration selected by the Agent (acting
reasonably).  Any interest accruing under
this Clause 9.3 shall be immediately payable by the Obligor on demand by the
Agent.


 


(b)                           Default interest (if unpaid) arising
on an overdue amount will be compounded with the overdue amount at the end of
each Interest Period applicable to that overdue amount but will remain
immediately due and payable.


 


9.4                           Notification of rates of interest


 


The Agent shall
promptly notify the Lenders and the relevant Borrower of the determination of a
rate of interest under this Agreement.


 


9.5                           Minimum Interest


 


When entering into
this Agreement, the Parties have assumed that the interest payable at the rates
set out in this Clause 9 (Interest)
or in other Clauses of this Agreement is not and will not become subject to
Swiss Withholding Tax (Verrechnungssteuer).
Each Borrower acknowledges and agrees that the interest rates provided for in
this Agreement shall constitute minimum interest rates, which, if Swiss
Withholding Tax should apply notwithstanding that the Parties do not anticipate
that any payment of interest will be subject to Swiss Withholding Tax, shall be
adjusted as follows:


 


(a)                                   any payment of interest due by the
Borrowers shall be increased to an amount which (after making any deduction of
the Non-refundable Portion (as defined below) of Swiss Withholding Tax) results
in a payment to each Lender entitled to such payment of an amount equal to the
payment which would have been due had no deduction of Swiss 


 


20





















 


Withholding Tax
been required. For this purpose, the Swiss Withholding Tax shall be calculated
on the full grossed-up interest amount.


 


(b)                                  For the purposes of this Clause 9 (Interest), “Non-refundable Portion” of Swiss Withholding Tax shall mean
Swiss Withholding Tax at the standard rate (being, as at the date of this
Agreement, 35 per cent.) unless a tax ruling issued by the Swiss Federal Tax
Administration confirms that, in relation to a specific Finance Party based on
an applicable double taxation treaty, the Non-refundable Portion is a specified
lower rate in which case such lower rate shall be applied in relation to such
Finance Party.


 


(c)                                   Each Swiss Borrower shall provide to
the Agent the documents required by law and applicable double taxation treaties
for the Lenders to prepare claims for the refund of any Swiss Withholding Tax
so deducted.


 


(d)                                  For the avoidance of doubt, payments
made by a Swiss Borrower in discharge of interest owed by it neither fall under
the term “Restricted Obligations” nor under the exemption from making increased
payments in respect of a Tax Deduction provided for in Clause 13.2 (Tax gross-up), Clause 13.3 (Tax indemnity), Clause 13.9 (Swiss Withholding Tax) and Clause 18.10 (Swiss Restrictions).


 


(e)                                   For the avoidance of doubt, the
operation of this Clause 9.5 and of Clause 13 (Tax
gross up and indemnities) shall not result in any double counting by
the Finance Parties.


 


10.                           INTEREST PERIODS


 


10.1                     Selection of Interest Periods


 


(a)                            A Borrower (or the Company on behalf
of a Borrower) may select an Interest Period for a Loan in the Utilisation
Request for that Loan.


 


(b)                           Subject to this Clause 10, a Borrower
(or the Company) may select an Interest Period of one, two, three or six Months
or any other period agreed between the Company and the Agent (acting on the
instructions of the Majority Lenders).


 


(c)                            An Interest Period for a Loan shall
not extend beyond the Termination Date.


 


(d)                           Each Interest Period for a Loan shall
start on the Utilisation Date.


 


(e)                            A Loan has one Interest Period only.


 


10.2                     Non-Business Days


 


If an Interest
Period would otherwise end on a day which is not a Business Day, that Interest
Period will instead end on the next Business Day in that calendar month (if
there is one) or the preceding Business Day (if there is not).


 


11.                           CHANGES TO THE CALCULATION OF INTEREST


 


11.1                     Absence of quotations


 


Subject to Clause
11.2 (Market disruption), if
LIBOR or, if applicable, EURIBOR is to be determined by reference to the
Reference Banks but a Reference Bank does not supply a quotation by the
Specified Time on the Quotation Day, the applicable LIBOR or EURIBOR shall be
determined on the basis of the quotations of the remaining Reference Banks.


 


21





















 


11.2                     Market disruption


 


(a)                            If a Market Disruption Event occurs
in relation to a Loan for any Interest Period, then the rate of interest on
each Lender’s share of that Loan for the Interest Period shall be the rate per
annum which is the sum of:


 


(i)                                      the Margin;


 


(ii)                                   subject to Clause 11.3 (Alternative basis of interest or funding),
the rate notified to the Agent by that Lender as soon as practicable and in any
event before interest is due to be paid in respect of that Interest Period, to
be that which expresses as a percentage rate per annum the cost to that Lender
as certified by it with a copy to the Agent and the Company of funding its
participation in that Loan from whatever source it may reasonably select; and


 


(iii)                                the Mandatory Cost, if any,
applicable to that Lender’s participation in the Loan.


 


(b)                           In this Agreement, “Market Disruption Event” means:


 


(i)                                      at or about noon on the Quotation Day
for the relevant Interest Period the Screen Rate is not available and none or
only one of the Reference Banks supplies a rate to the Agent to determine LIBOR
or, if applicable, EURIBOR for the relevant currency and Interest Period; or


 


(ii)                                   before close of business in Paris on
the Quotation Day for the relevant Interest Period, the Agent receives
notifications from a Lender or Lenders (whose participations in a Loan exceed
35 per cent. of that Loan) that the cost to it of obtaining matching deposits
in the Relevant Interbank Market would be in excess of LIBOR or, if applicable,
EURIBOR.


 


11.3                     Alternative basis of interest or
funding


 


(a)                            If a Market Disruption Event occurs
and the Agent or the Company so requires, the Agent and the Company shall enter
into negotiations (for a period of not more than 30 days) with a view to
agreeing a substitute basis for determining the rate of interest.


 


(b)                           Any alternative basis agreed pursuant
to paragraph (a) above shall, with the prior consent of all the Lenders and the
Company, be binding on all Parties.


 


11.4                     Break Costs


 


(a)                            Each Borrower shall, within three
Business Days of demand by a Finance Party, pay to that Finance Party its Break
Costs attributable to all or any part of a Loan or Unpaid Sum being paid by
that Borrower on a day other than the last day of an Interest Period for that
Loan or Unpaid Sum.


 


(b)                           Each Lender shall, as soon as
reasonably practicable after a demand by the Agent, provide a certificate
confirming the amount of its Break Costs for any Interest Period in which they
accrue.


 


12.                           FEES


 


12.1                     Commitment fee


 


(a)                            Subject to this Clause 12.1, the
Company shall pay to the Agent (for the account of each Lender) a fee in the
Base Currency computed at a percentage rate per annum on a day to day basis on 


 


22





















 


that
Lender’s Available Commitment for the Availability Period equal to the
percentage rate (the “Commitment Fee Rate”)
of the applicable Margin (determined in accordance with paragraph (b) below),
which would apply to a Loan drawn on that day.


 


(b)         Subject to paragraph (c) below,
the Commitment Fee Rate that shall be used for the purposes of paragraph (a) above
shall be determined on a day to day basis by reference to the credit ratings
assigned by Moody’s and S&P to the Company’s long-term senior unsecured
debt not credit enhanced (each a “long-term
credit rating”) last published (and not withdrawn) prior to that day
in accordance with the following:


 


(i)             subject to paragraph (c) below,
at any time where the long-term credit rating of the Company is BB+ or Ba1 or
below from each of Standard & Poor’s and Moody’s respectively (or, if
the Company has only one long-term credit rating and that long-term credit
rating is BB+ or Ba1 or below from either Standard & Poor’s or Moody’s
respectively), the Commitment Fee Rate shall be 40 per cent.;


 


(ii)            at any time where the Company has a
long-term credit rating from each of Standard & Poor’s and Moody’s and
one of those long-term credit ratings is BB+ or Ba1 or below, the Commitment
Fee Rate shall be 37.5 per cent.; and


 


(iii)           at any other time, the Commitment Fee
Rate shall be 35 per cent..


 


(c)         While Moody’s have not assigned a
credit rating to the Company’s long-term senior unsecured debt not credit
enhanced, the rating assigned by Moody’s to Sappi Papier Holdings GmbH’s
long-term senior unsecured debt (benefiting from the guarantee given by Sappi
Limited) shall be used for the purpose of determining the Commitment Fee Rate
pursuant to paragraph (b) above.


 


(d)         The accrued commitment fee is payable
on the last day of each successive period of three Months which ends during the
Availability Period, on the last day of the Availability Period and on the
cancelled amount of the relevant Lender’s Commitment at the time the
cancellation is effective for the period up to the date of cancellation.


 


12.2       Utilisation fee


 


(a)         The Company shall pay to the Agent
(for the account of each Lender) a utilisation fee in the Base Currency in
respect of such Lender’s participation in the Outstandings computed at the rate
of:


 


(i)             if the Outstandings are in an amount
greater than 33 per cent. but less than or equal to 66 per cent of the maximum
amount of the Facility as at the date of this Agreement, 0.050 per cent per
annum of such Lender’s participation in such Outstandings; and


 


(ii)            if the Outstandings are greater than
66 per cent. of the maximum amount of the Facility as at the date of this
Agreement, 0.075 per cent. per annum of such Lender’s participation in such
Outstandings.


 


(b)         This fee is payable on the last day
of each successive period of three Months which ends during the Availability
Period and on the Termination Date.


 


23





















 


12.3       Arrangement fee


 


The
Company shall pay to the Mandated Lead Arrangers the arrangement fee in the amount
and at the time agreed in a Fee Letter.


 


12.4       Agency fee


 


The
Company shall pay to the Agent (for its own account) an agency fee in the
amount and at the times agreed in a Fee Letter.


 


24





















 


SECTION 6


ADDITIONAL PAYMENT OBLIGATIONS


 


13.         TAX GROSS UP AND INDEMNITIES


 


13.1       Definitions


 


(a)         In this Agreement:


 


“New Qualifying Lender” means a Lender who becomes a Qualifying Lender
after Sappi International S.A. loses the tax status of a Recognised Coordination Centre.


 


“Original Qualifying Lender” means a Lender who is a Qualifying Lender
prior to Sappi
International S.A. losing the tax status of a Recognised Coordination Centre.


 


“Protected Party” means a Finance Party
which is or will be, for or on account of Tax, subject to any liability or
required to make any payment in relation to a sum received or receivable (or
any sum deemed for the purposes of Tax to be received or receivable) under a
Finance Document.


 


“Qualifying Lender” means a Lender which is
(on the date a payment falls due) entitled (subject to the completion of any
necessary procedural formalities) to that payment without a Tax Deduction.


 


“Recognised Co-ordination Centre” means a
Co-ordination Centre within the meaning of the Belgian Royal Decree No. 187
of 30 December 1982 concerning the creation of Co-ordination Centres and
the Act of 11 April 1983 containing tax and budgetary measures, as amended
from time to time.


 


“Tax Credit” means a credit against, relief
or remission for, or repayment of, any Tax.


 


“Tax Deduction” means a deduction or
withholding for or on account of Tax from a payment under a Finance Document.


 


“Tax Payment” means an increased payment
made by an Obligor to a Finance Party under Clause 13.2 (Tax gross-up) or a payment under Clause
13.3 (Tax indemnity).


 


(b)         In this Clause 13 a reference to “determines” or “determined” means a determination made in the absolute
discretion of the person making the determination.


 


13.2       Tax gross-up


 


(a)         Each Obligor shall make all payments
to be made by it without any Tax Deduction, unless a Tax Deduction is required
by law.


 


(b)         An Obligor or a Lender shall promptly
upon becoming aware that an Obligor must make a Tax Deduction (or that there is
any change in the rate or the basis of a Tax Deduction) notify the Agent
accordingly. If the Agent receives such notification from a Lender it shall
notify the relevant Obligor.


 


(c)         If a Tax Deduction is required by law
to be made by an Obligor in one of the circumstances set out in paragraph (d) below,
the amount of the payment due from that Obligor shall be increased to an amount
which (after making any Tax Deduction) leaves an amount equal to the payment
which would have been due if no Tax Deduction had been required.


 


25





















 


(d)         The circumstances referred to in
paragraph (c) above are:


 


(i)             where a person
entitled to receive the payment:


 


(A)         is the Agent or the Mandated Lead
Arrangers (on their own behalf); or


 


(B)          is a Lender which is a Qualifying
Lender in respect of which the completion of procedural formalities is required
before the relevant Obligor can make payments thereto without a Tax Deduction
but such procedural formalities have not been completed; or


 


(C)          is a Lender which would have been a
Qualifying Lender but for any change after the date of this Agreement in (or in
the interpretation, administration, or application of) any law or double
taxation agreement or any published practice or published concession of any
relevant taxing authority.


 


(ii)            where (a) Sappi
International S.A. for any reason loses the tax status of a Recognised
Coordination Centre, including where the status for Recognised Coordination
Centres or the exemption from Tax Deduction on interest payments made by
Recognised Coordination Centres is abolished and (b), in each case, where no
replacement giving equivalent tax status (including exemption from Tax
Deduction) (an “Equivalent Tax Status”)
exists and is applied and continues to be applied to Sappi International S.A.
or no other exemption from Tax Deduction (a “Tax
Exemption”) may be applied and continues to be applied by Sappi
International S.A., and as a result of such circumstances, a Lender has ceased
to be a Qualifying Lender to the extent that this altered status results from
such circumstances.  For the avoidance of
doubt, this paragraph (d)(ii) of Clause 13.2 applies in each of the
following circumstances:


 


(A)         with respect to an Original
Qualifying Lender, where Sappi International S.A. for any reason loses (i) the
tax status of a Recognised Coordination Centre and (ii) its Equivalent Tax
Status or Tax Exemption, and, in each case, there is no subsequent Equivalent
Tax Status or Tax Exemption that may be applied and continues to be applied to
Sappi International S.A., and as a result of such circumstances, that Lender
has ceased to be a Qualifying Lender; and


 


(B)          with respect to a New Qualifying
Lender, where Sappi International S.A. for any reason loses its Equivalent Tax
Status or Tax Exemption, and there is no subsequent Equivalent Tax Status or
Tax Exemption that may be applied and continues to be applied to Sappi
International S.A., and as a result of such circumstances, that Lender has
ceased to be a Qualifying Lender.


 


(e)         If an Obligor is required to make a
Tax Deduction, that Obligor shall make that Tax Deduction and any payment
required in connection with that Tax Deduction within the time allowed and in
the minimum amount required by law.


 


(f)          Within 30 days of making either a Tax
Deduction or any payment required in connection with that Tax Deduction, the
Obligor making that Tax Deduction shall deliver to the Agent for the Finance
Party entitled to the payment evidence reasonably satisfactory to that Finance
Party 


 


26





















 


that
the Tax Deduction has been made or (as applicable) any appropriate payment paid
to the relevant taxing authority.


 


(g)         A Qualifying Lender and each Obligor
which makes a payment to which that Qualifying Lender is entitled shall
co-operate in completing any procedural formalities necessary for that Obligor
to obtain authorisation to make that payment without a Tax Deduction.


 


(h)         A Swiss Borrower shall only be
required to make an increased payment to a Lender pursuant to Clause 13.2(c) for
a Tax Deduction in respect of Swiss Withholding Tax if and to the extent that
such a payment is permitted by applicable Swiss law in force at the relevant
time.  The tax indemnity obligation of
each Obligor (other than a Swiss Obligor) provided for in Clause 13.3 (Tax indemnity) shall be calculated
regardless of whether the Swiss Borrower is prohibited from making an increased
payment under this Clause 13.2.


 


13.3       Tax indemnity


 


(a)         Subject to Clause 13.5 (Stamp Taxes) and Clause 18.10 (Swiss Restrictions), each Obligor shall
(within five Business Days of demand by the Agent) pay to a Protected Party an
amount equal to the loss, liability or cost which that Protected Party
determines will be or has been (directly or indirectly) suffered for or on
account of Tax by that Protected Party.


 


(b)         Paragraph (a) above shall not
apply:


 


(i)             with respect to any Tax assessed on a
Finance Party:


 


(A)         under the law of the jurisdiction in
which that Finance Party is incorporated or, if different, the jurisdiction (or
jurisdictions) in which that Finance Party is treated as resident for tax
purposes; or


 


(B)          under the law of the jurisdiction in
which that Finance Party’s Facility Office is located in respect of amounts
received or receivable in that jurisdiction,


 


if that Tax is imposed on or calculated by reference
to the net income received or receivable (but not any sum deemed to be received
or receivable) by that Finance Party; or


 


(ii)            to a Swiss Obligor in respect of
Swiss Withholding Tax to be withheld by it if it is prohibited from doing so by
applicable Swiss law in force at the relevant time.


 


(c)         A Protected Party making, or
intending to make, a claim pursuant to paragraph (a) above shall promptly
notify the Agent of the event which will give, or has given, rise to the claim,
following which the Agent shall notify the Company.


 


(d)         A Protected Party shall, on receiving
a payment from an Obligor under this Clause 13.3, notify the Agent.


 


13.4       Tax Credit


 


If an
Obligor makes a Tax Payment and the relevant Finance Party determines that:


 


(a)            a Tax Credit is attributable to that
Tax Payment; and


 


(b)           that Finance Party has obtained,
utilised and retained that Tax Credit, on a consolidated Group basis,


 


27





















 


the
Finance Party shall pay an amount to the Obligor which that Finance Party
determines will leave it (after that payment) in the same after-Tax position as
it would have been in had the Tax Payment not been made by the Obligor.


 


13.5       Stamp Taxes


 


(a)         The Company shall pay and, within
five Business Days of demand, indemnify each Finance Party against any cost,
loss or liability that that Finance Party incurs in relation to all stamp duty,
registration and other similar Taxes payable in respect of any Finance Document
or other document which relates to any Finance Document provided, however, that
the Company shall not be so liable to pay and indemnify a Finance Party against
any cost, loss or liability that a Finance Party so incurs to the extent that
such cost, loss or liability results from that Finance Party breaching its
obligations under Clause 13.5(b).


 


(b)         No Party shall bring, send to or
otherwise produce in Austria (1) an original copy, notarised copy or
certified copy of any Finance Document or other document which relates to any
Finance Document, or (2) a copy of any Finance Document or other document
which relates to any Finance Document signed or endorsed by one or more Parties
other than in the event that:


 


(i)             this does not cause a liability of a
Party to pay stamp duty or other Tax in Austria;


 


(ii)            a Party wishes to enforce any of its
rights under or in connection with such Finance Document in Austria and is only
able to do so (including, without limitation, for reason of any objection or
defence raised by an Obligor in any form of proceedings in Austria) by
bringing, sending to or otherwise producing in Austria (1) an original
copy, notarised copy or certified copy of the relevant Finance Document or
other document which relates to any Finance Document or (2) a copy of any
Finance Document or other document which relates to any Finance Document signed
or endorsed by one or more Party and it would not be sufficient for that Party
to bring, send to or otherwise produce in Austria a simple copy (a copy which
is not an original copy, notarised copy or certified copy) of the relevant
Finance Document or other document which relates to any Finance Document for
the purposes of such enforcement; in furtherance of the foregoing, a Party
shall (1) not object to the introduction into evidence of an uncertified
copy of any Finance Document or other document which relates to any Finance
Document or raise a defence to any action or to the exercise of any remedy on
the basis of an original or certified copy of any Finance Document or other
document which relates to any Finance Document not having been introduced into
evidence, unless such uncertified copy actually introduced into evidence does
not accurately reflect the content of the original document and (2) if
such Party is a party to the proceedings before such Austrian court or
authority, stipulate as to the accuracy (Echtheit)
of an uncertified copy of any such Finance Document or other document which
relates to any Finance Document, unless such uncertified copy actually
introduced into evidence does not accurately reflect the content of the
original document; or


 


(iii)           a Party is required by law,
governmental body, court, authority or agency pursuant to any law or legal
requirement (whether for the purposes of initiating, prosecuting, enforcing or
executing any claim or remedy or enforcing any judgment or otherwise), to bring
an 


 


28





















 


original
or certified copy of any Finance Document or other document which relates to
any Finance Document into Austria.


 


(c)         To the extent that a breach by any
Party of its obligations under Clause 13.5(b) results in any cost, loss or
liability being incurred by any of the other Parties in relation to any stamp
duty, registration and other similar Taxes payable in respect of any Finance
Document, the Party responsible for such breach shall indemnify such other
Parties for any such cost, loss or liability incurred.


 


13.6       Value added tax


 


(a)         All consideration payable under a
Finance Document by an Obligor to a Finance Party shall be deemed to be
exclusive of any VAT. If VAT is chargeable, the Obligor shall pay to the
Finance Party (in addition to and at the same time as paying the consideration)
an amount equal to the amount of the VAT.


 


(b)         Where a Finance Document requires an
Obligor to reimburse a Finance Party for any costs or expenses, that Obligor
shall also at the same time pay and indemnify that Finance Party against all
VAT incurred by that Finance Party in respect of the costs or expenses save to
the extent that that Finance Party is entitled to repayment or credit in
respect of the VAT.


 


13.7       Filings


 


In
circumstances where an Obligor is required (or would in the absence of any such
filing be required) to make a deduction or withholding for or on account of
Taxes or any other deduction contemplated by this Clause 13, such Obligor and
each relevant Finance Party shall make reasonable endeavours following a
reasonable request by the relevant Obligor to file such forms and documents as
the appropriate taxation authority may reasonably require in order to enable
such Obligor to make relevant payments under the Finance Documents without
having to make such deduction or withholding.


 


13.8       Exemptions from gross up


 


Notwithstanding
anything contained in this Clause 13 (Tax
gross up and indemnities), no additional amount will be payable to a
Lender under Clause 13.2 (Tax gross-up)
in respect of Taxes to the extent that such additional amount would not be
payable if that Lender had complied with its obligations under Clause 13.7 (Filings) (unless such failure to comply
resulted from a failure by any Obligor to comply with its obligations
thereunder).


 


13.9       Swiss Withholding Tax


 


Each
Swiss Obligor:


 


(a)            if and to the extent required by
applicable law in force at the relevant time:


 


(i)           may, subject to any applicable double
taxation treaty, deduct Swiss Withholding Tax at the rate of 35 per cent. (or
such other rate as in force from time to time) from any payment made by it in
discharge of Restricted Obligations;


 


(ii)          shall pay any such deduction to the
Swiss Federal Tax Administration; and


 


(iii)         shall, in accordance with Clause 13.2
(Tax gross-up), notify (or
procure that the Company notifies) the Agent that such a deduction has been
made and provide 


 


29





















 


the
Agent with evidence that such a deduction has been paid to the Swiss Federal
Tax Administration; and


 


(b)           shall not, to the extent a deduction
or payment for Swiss Withholding Tax is made pursuant to paragraph (a) above,
be obliged to either make an increased payment in accordance with Clause 13.2 (Tax gross-up) or indemnify the Protected
Parties in accordance with Clause 13.3 (Tax
indemnity) in relation to any payment made by it in relation to any
such deduction and payment to the Swiss Federal Tax Administration provided
that, in every case, such increased payment or indemnity is prohibited by
applicable law in force at the relevant time.


 


14.         INCREASED COSTS


 


14.1       Increased costs


 


(a)         Subject to Clause 14.3 (Exceptions) the Company shall, within
three Business Days of a demand by the Agent, pay for the account of a Finance
Party the amount of any Increased Costs incurred by that Finance Party or any
of its Affiliates as a result of (i) the introduction of or any change in
(or in the interpretation or application of) any law or regulation occurring
after the date of this Agreement or (ii) compliance with any law or
regulation made after the date of this Agreement.


 


(b)         In this Agreement, “Increased Costs” means:


 


(i)             a reduction in the rate of return
from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;


 


(ii)            an additional or increased cost; or


 


(iii)           a reduction of any amount due and
payable under any Finance Document,


 


other
than, in each case, any payment on account of Tax imposed on the overall net
income of the relevant Finance Party which is incurred or suffered by a Finance
Party or any of its Affiliates to the extent that it is attributable to that
Finance Party having entered into its Commitment or funding or performing its
obligations under any Finance Document.


 


14.2       Increased cost claims


 


(a)         A Finance Party intending to make a
claim pursuant to Clause 14.1 (Increased
costs) shall notify the Agent of the event giving rise to the claim,
following which the Agent shall promptly notify the Company.


 


(b)         Each Finance Party shall, as soon as
practicable after a demand by the Agent, provide a certificate confirming the
amount of its Increased Costs.


 


14.3       Exceptions


 


(a)         Clause 14.1 (Increased costs) does not apply to the
extent any Increased Cost is:


 


(i)             attributable to a Tax Deduction
required by law to be made by an Obligor;


 


(ii)            attributable to any cost, increased
cost, liability or reduction resulting from any change in the rate of taxation
on the overall net income or gross turnover of a Lender imposed in the
jurisdiction in which the principal office of the relevant Lender is located or
the overall 


 


30





















 


net
income or gross turnover of the Facility Office of the relevant Lender imposed
in the jurisdiction in which such Facility Office is located;


 


(iii)           compensated for by Clause 13.3 (Tax indemnity) (or would have been
compensated for under Clause 13.3 (Tax
indemnity) but was not so compensated solely because one of the
exclusions in paragraph (b) of Clause 13.3 (Tax indemnity) applied);


 


(iv)          compensated for by the payment of the
Mandatory Cost; or


 


(v)           attributable to the breach by the
relevant Finance Party or its Affiliates of any law or regulation or failure to
comply with any request from or requirement of any central bank or other
fiscal, monetary or other authority (whether or not having the force of law).


 


(b)         In this Clause 14.3, a reference to a
“Tax Deduction” has the same
meaning given to the term in Clause 13.1 (Definitions).


 


15.         OTHER INDEMNITIES


 


15.1       Currency indemnity


 


(a)         If any sum due from an Obligor under
the Finance Documents (a “Sum”),
or any order, judgment or award given or made in relation to a Sum, has to be
converted from the currency (the “First
Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:


 


(i)             making or filing a claim or proof
against that Obligor;


 


(ii)            obtaining or enforcing an order,
judgment or award in relation to any litigation or arbitration proceedings,


 


that
Obligor shall as an independent obligation, within five Business Days of
demand, indemnify each Finance Party to whom that Sum is due against any cost,
loss or liability arising out of or as a result of the conversion including any
discrepancy between (A) the rate of exchange used to convert that Sum from
the First Currency into the Second Currency and (B) the rate or rates of
exchange available to that person at the time of its receipt of that Sum.


 


(b)         Each Obligor waives any right it may
have in any jurisdiction to pay any amount under the Finance Documents in a
currency or currency unit other than that in which it is expressed to be
payable.


 


15.2       Other indemnities


 


Each
Obligor will within five Business Days of demand, indemnify each Lender against
any cost, loss or liability incurred by that Lender as a result of:


 


(a)            the occurrence of any Event of
Default;


 


(b)           a failure by an Obligor to pay any
amount due under a Finance Document on its due date, including without
limitation, any cost, loss or liability arising as a result of Clause 28 (Sharing among the Lenders);


 


(c)            funding, or making arrangements to
fund, its participation in a Loan requested by a Borrower in a Utilisation Request
but not made by reason of the operation of any one or 


 


31





















 


more of
the provisions of this Agreement (other than by reason of default or negligence
by that Lender alone); or


 


(d)           a Loan (or part of a Loan) not being
prepaid in accordance with a notice of prepayment given by a Borrower or the
Company.


 


15.3       Indemnity to the Agent


 


The
Company shall promptly indemnify the Agent against any cost, loss or liability
incurred by the Agent (acting reasonably) as a result of:


 


(a)            investigating any event which it
reasonably believes is a Default; or


 


(b)           entering into or performing any
foreign exchange contract for the purposes of Clause 6 (Optional Currencies); or


 


(c)            acting or relying on any notice,
request or instruction which it reasonably believes to be genuine, correct and
appropriately authorised.


 


16.         MITIGATION BY THE LENDERS


 


16.1       Mitigation


 


(a)         Each Finance Party shall, in
consultation with the Company, take all reasonable steps to mitigate any circumstances
which arise and which would result in any amount becoming payable under, or
cancelled pursuant to, any of Clause 8.1 (Illegality),
Clause 13 (Tax gross up and indemnities)
or Clause 14 (Increased costs)
including (but not limited to) transferring its rights and obligations under
the Finance Documents to another Affiliate or Facility Office or any other
financial institution.


 


(b)         Paragraph (a) above does not in
any way limit the obligations of any Obligor under the Finance Documents.


 


16.2       Limitation of liability


 


(a)         The Company shall indemnify each
Finance Party, upon presentation of duly documented evidence thereof, for all
costs and expenses reasonably incurred by that Finance Party as a result of
steps taken by it under Clause 16.1 (Mitigation).


 


(b)         A Finance Party is not obliged to
take any steps under Clause 16.1 (Mitigation)
if, in the opinion of that Finance Party (acting reasonably), to do so might
have an adverse effect on its business, operations or financial condition.


 


17.         COSTS AND EXPENSES


 


17.1       Transaction expenses


 


The
Company shall promptly on demand pay the Agent and the Mandated Lead Arrangers
the amount of all reasonable costs and expenses (including legal fees) incurred
by any of them in connection with the negotiation, preparation, printing,
execution and syndication of:


 


(a)            this Agreement and any other
documents referred to in this Agreement; and


 


(b)           any other Finance Documents executed
after the date of this Agreement.


 


32





















 


17.2       Amendment costs


 


If (a) an
Obligor requests an amendment, waiver or consent or (b) an amendment is
required pursuant to Clause 29.9 (Change of
currency), the Company shall, within three Business Days of demand,
reimburse the Agent for the amount of all reasonable costs and expenses
(including legal fees) incurred by the Agent in responding to, evaluating,
negotiating or complying with that request or requirement.


 


17.3       Enforcement costs


 


The
Company shall, within three Business Days of demand, pay to each Finance Party
the amount of all costs and expenses (including legal fees) properly incurred
by that Finance Party in connection with the enforcement of, or the
preservation of any rights under, any Finance Document.


 


33





















 


SECTION 7


GUARANTEE


 


18.         GUARANTEE AND INDEMNITY


 


18.1       Guarantee and indemnity


 


Each
Guarantor irrevocably and unconditionally jointly and severally:


 


(a)            guarantees to each Finance Party
punctual performance by each Borrower of all that Borrower’s obligations under
the Finance Documents;


 


(b)           undertakes with each Finance Party
that whenever a Borrower does not pay any amount when due under or in
connection with any Finance Document, that Guarantor shall immediately on
demand pay that amount as if it was the principal obligor; and


 


(c)            indemnifies each Finance Party
immediately on demand against any cost, loss or liability suffered by that
Finance Party if any obligation guaranteed by it is or becomes unenforceable,
invalid or illegal.  The amount of the
cost, loss or liability shall be equal to the amount which that Finance Party
would otherwise have been entitled to recover.


 


18.2       Continuing guarantee; Nature of
guarantee


 


(a)         This guarantee is a continuing
guarantee and will extend to the ultimate balance of sums payable by any
Obligor under the Finance Documents, regardless of any intermediate payment or
discharge in whole or in part.


 


(b)         Notwithstanding anything to the
contrary herein or in any other of the Finance Documents, this guarantee is
meant to be and shall be interpreted as “abstract guarantee” (abstrakter Garantievertrag) and the
obligations of the Guarantors hereunder shall be obligations of the Guarantors
as principal debtors and not as sureties (Buergschaft)
and not as a joint obligation as a borrower (Mitschuldner)
and the Guarantors undertake to pay the amounts due under or pursuant to this
guarantee unconditionally, irrevocably, upon first demand and without raising
any defences (unbedingt, unwiderruflich, auf
erste Aufforderung und unter Verzicht auf alle Einwendungen).


 


18.3       Reinstatement


 


If any
payment by an Obligor or any discharge given by a Finance Party (whether in
respect of the obligations of any Obligor or any security for those obligations
or otherwise) is avoided or reduced as a result of insolvency or any similar
event:


 


(a)                                   the liability of each Obligor shall
continue as if the payment, discharge, avoidance or reduction had not occurred;
and


 


(b)                                  each Finance Party shall be entitled
to recover the value or amount of that security or payment from each Obligor,
as if the payment, discharge, avoidance or reduction had not occurred.


 


34





















 


18.4       Waiver of defences


 


The
obligations of each Guarantor under this Clause 18 will not be affected by an
act, omission, matter or thing which, but for this Clause, would reduce,
release or prejudice any of its obligations under this Clause 18 (without
limitation and whether or not known to it or any Finance Party) including:


 


(a)            any time, waiver or consent granted
to, or composition with, any Obligor or other person;


 


(b)           the release of any other Obligor or
any other person under the terms of any composition or arrangement with any
creditor of any member of the Group;


 


(c)            the taking, variation, compromise,
exchange, renewal or release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of, any Obligor or other
person or any non-presentation or non-observance of any formality or other requirement
in respect of any instrument or any failure to realise the full value of any
security;


 


(d)           any incapacity or lack of power,
authority or legal personality of or dissolution or change in the members or
status of an Obligor or any other person;


 


(e)            any amendment (however fundamental)
or replacement of a Finance Document or any other document or security;


 


(f)            any unenforceability, illegality or
invalidity of any obligation of any person under any Finance Document or any
other document or security; or


 


(g)           any insolvency or similar
proceedings.


 


18.5       Immediate recourse


 


Each
Guarantor waives any right it may have of first requiring any Finance Party (or
any trustee or agent on its behalf) to proceed against or enforce any other
rights or security or claim payment from any person before claiming from that
Guarantor under this Clause 18.  This
waiver applies irrespective of any law or any provision of a Finance Document
to the contrary.


 


18.6       Appropriations


 


Until
all amounts which may be or become payable by the Obligors under or in
connection with the Finance Documents have been irrevocably paid in full, each
Finance Party (or any trustee or agent on its behalf) may:


 


(a)            refrain from applying or enforcing
any other moneys, security or rights held or received by that Finance Party (or
any trustee or agent on its behalf) in respect of those amounts, or apply and
enforce the same in such manner and order as it sees fit (whether against those
amounts or otherwise) and no Guarantor shall be entitled to the benefit of the
same; and


 


(b)           hold in an interest-bearing suspense
account any moneys received from any Guarantor or on account of any Guarantor’s
liability under this Clause 18.


 


18.7       Deferral of Guarantors’ rights


 


Until
all amounts which may be or become payable by the Obligors under or in
connection with the Finance Documents have been irrevocably paid in full and
unless the Agent otherwise 


 


35





















 


directs,
no Guarantor will exercise any rights which it may have by reason of
performance by it of its obligations under the Finance Documents:


 


(a)            to be indemnified by an Obligor;


 


(b)           to claim any contribution from any
other guarantor of any Obligor’s obligations under the Finance Documents;
and/or


 


(c)            to take the benefit (in whole or in
part and whether by way of subrogation or otherwise) of any rights of the
Finance Parties under the Finance Documents or of any other guarantee or
security taken pursuant to, or in connection with, the Finance Documents by any
Finance Party.


 


18.8       Additional security


 


This
guarantee is in addition to and is not in any way prejudiced by any other
guarantee or security now or subsequently held by any Finance Party.


 


18.9       Belgian Guarantee Limitation


 


In the
case of Sappi International S.A. (the “Belgian
Guarantor”), with respect to the obligations of any Obligor which is
not a Subsidiary of the Belgian Guarantor, its liability under this Clause 18
(Guarantee and Indemnity) shall be limited, at any time, to a maximum aggregate
amount equal to the greater of (i) an amount equal to 90% of the Belgian
Guarantor’s net assets (as determined in accordance with the Belgian Companies
Code and accounting principles generally accepted in Belgium, but not taking
intra-group debt into account as debts) as shown by its then most recent
audited annual financial statements and (ii) the aggregate amount of the
principal amount borrowed by the Belgian Guarantor pursuant to this Agreement
and the aggregate amount of any intra-group loans or facilities made to it by
any other member of the Group directly and/or indirectly using all or part of
the proceeds of the Facility (whether or not such intra-group loan is retained
by the Belgian Guarantor for its own purposes or on-lent to another Group
company) outstanding at any given time between the first Utilisation Date and
the date on which the relevant demand is made.


 


18.10     Swiss Restrictions


 


The
Restricted Obligations of any Swiss Obligor, if and to the extent required by
any applicable Swiss law in force at the relevant point in time, under:


 


(a)            this Clause 18 (Guarantee and indemnity);


 


(b)           Clause 13.3 (Tax indemnity); and


 


(c)            Clause 15.2 (Other indemnities),


 


shall
be limited to the maximum amount of that Swiss Obligor’s profits available for
distribution as dividends at any given time (being the balance sheet profits
and any reserves made for this purpose, in each case in accordance with
articles 804, 675(2) and 671(1) and (2), no. 3, of the Swiss Federal
Code of Obligations), and further provided that, to the extent permitted by
law, such limitation (as may apply from time to time or not) shall not
(generally or definitively) free the Swiss Obligor from payment obligations
under this Agreement in excess thereof, but merely postpone the payment date of
such payment obligations until such times as payment is again permitted
notwithstanding such limitation.


 


36





















 


18.11     Austrian Guarantee Limitation


 


(a)         Nothing in this Agreement shall be
construed to create any obligation of an Austrian Guarantor to act in violation
of mandatory Austrian capital maintenance rules (Kapitalerhaltungsvorschriften), including,
without limitation, § 82 et seq. of the Austrian Act on Limited Liability
Companies (Gesetz über Gesellschaften mit
beschränkter Haftung — GmbHG) and § 52 et seq. of the Austrian
Act on Joint Stock Companies (Aktiengesetz-AktG)
(the “Austrian Capital Maintenance Rules”),
and all obligations of the Austrian Guarantor under this Agreement shall be
limited in accordance with Austrian Capital Maintenance Rules.


 


(b)         If and to the extent the payment
obligations of the Austrian Guarantor under this Agreement would not be
permitted under Austrian Capital Maintenance Rules or would render the
directors of an Austrian Guarantor personally liable pursuant to Austrian law
to any of the creditors of an Austrian Guarantor as a consequence of paying
such amount, then such payment obligations shall be limited to the maximum
amount permitted to be paid which would not trigger such directors’ liability,
provided that the amount payable shall not be less than (i) the Austrian
Guarantor’s balance sheet profit (including retained earnings) (Bilanzgewinn) as defined in § 224 (3) lit
A no. IV of the Austrian Commercial Code (Handelsgesetzbuch
— HGB) as calculated by reference to the most recent audited
financial statements of the Austrian Guarantor then available plus (ii) any
other amounts which are freely available for distribution to the shareholder(s)
of the Austrian Guarantor under the GmbHG or AktG (as the case may be) and the
HGB at the time or times payment under or pursuant to this Agreement is
requested from the Austrian Guarantor plus, (iii) to the extent
applicable, the equivalent in the Base Currency of the aggregate Utilisations
(plus any accrued interest, commission and fee thereon) borrowed by the
Austrian Guarantor in its capacity as Borrower and amounts payable by the
Austrian Guarantor from Utilisations which were on-lent to the Austrian
Guarantor by any other Borrower.


 


18.12     General Limitation


 


Without
prejudice and in addition to any limitation on the liability of any Additional
Guarantor otherwise provided for herein, the liability of each Additional
Guarantor under this guarantee shall not at any time exceed the lower of the
amount of that Additional Guarantor’s outstanding indebtedness (excluding for
this purpose any indebtedness owing by one Group Company to another Group
Company) or any limits imposed upon its maximum liability under this guarantee
by mandatorily applicable law.


 


37





















 


SECTION 8


REPRESENTATIONS, UNDERTAKINGS
AND EVENTS OF DEFAULT


 


19.         REPRESENTATIONS


 


Each
Obligor makes the representations and warranties set out in this Clause 19 to
each Finance Party on the date of this Agreement.


 


19.1       Status


 


(a)         It is a corporation, duly
incorporated and validly existing under the law of its jurisdiction of
incorporation.


 


(b)         It and each of its Subsidiaries has
the power to own its assets and carry on its business as it is being conducted.


 


19.2       Power and authority


 


It has
the power to enter into, perform and deliver, and has taken all necessary
action to authorise its entry into, performance and delivery by it of, the
Finance Documents to which it is a party and the transactions contemplated by
those Finance Documents.


 


19.3       Binding obligations


 


The
obligations expressed to be assumed by it in each Finance Document are, subject
to the Reservations, legal, valid and binding obligations enforceable in
accordance with their terms.


 


19.4       Non-conflict with other obligations


 


The
entry into and performance by it of, and the transactions contemplated by, the
Finance Documents do not and will not conflict with:


 


(a)            any law or regulation applicable to
it;


 


(b)           the constitutional documents of any
Group Company; or


 


(c)            to an extent which could reasonably
be expected to have a Material Adverse Effect, any agreement or instrument
binding upon it or any Group Company or any of their assets.


 


19.5       Validity and admissibility in evidence


 


All
Authorisations required or desirable:


 


(a)            to enable it lawfully to enter into,
exercise its rights and comply with its obligations in the Finance Documents to
which it is a party; and


 


(b)           to make the Finance Documents to
which it is a party admissible in evidence in its jurisdiction of
incorporation,


 


have
been obtained or effected and are in full force and effect.


 


19.6       Governing law and enforcement


 


Subject
to the Reservations:


 


(a)         The choice of English law as the
governing law of the Finance Documents will be recognised and enforced in its
jurisdiction of incorporation.


 


(b)         Any judgment obtained in England in
relation to a Finance Document will be recognised and enforced in its
jurisdiction of incorporation.


 


38





















 


19.7       Deduction of Tax


 


It is
not required to make any deduction for or on account of Tax from any payment it
may make under any Finance Document.


 


19.8       No filing or stamp taxes


 


Under
the law of its jurisdiction of incorporation it is not necessary that the
Finance Documents be filed, recorded or enrolled with any court or other
authority in that jurisdiction or that any stamp, registration or similar tax
be paid on or in relation to the Finance Documents or the transactions contemplated
by the Finance Documents.


 


19.9       No proceedings pending or threatened


 


No
litigation, arbitration or administrative proceedings of or before any court,
arbitral body or agency have been started against any Group Company which are
reasonably likely to be adversely determined and which, if so determined, are
reasonably likely to have a Material Adverse Effect.


 


19.10     Financial statements


 


The
Original Financial Statements were prepared in accordance with SA GAAP
consistently applied and give a true and fair view of the consolidated
financial position of the Group as at the date they were prepared.


 


19.11     Business Authorisations


 


Each
Authorisation required by each Group Company in connection with its business
has been obtained or effected and each Group Company is in full compliance with
the same, save where failure to obtain or effect such Authorisation or
non-compliance with such Authorisation is not reasonably likely to have a
Material Adverse Effect.


 


19.12     Pari passu ranking


 


Its
payment obligations under the Finance Documents rank at least pari passu with the claims of all its
other unsecured and unsubordinated creditors, except for obligations
mandatorily preferred by law applying to companies generally.


 


19.13     Environmental compliance


 


Each
Group Company has complied in all respects with all Environmental Law save to
the extent that non-compliance would not reasonably be likely to have a
Material Adverse Effect.


 


19.14     Environmental Claim


 


No
Environmental Claim has been commenced where that claim would be reasonably
likely to have a Material Adverse Effect.


 


19.15     No Material Adverse Effect


 


Since
30 September 2004, there has been no change in the business, condition
(financial or otherwise), operations or performance of any Group Company that
has had, or would have, a Material Adverse Effect.


 


19.16     No Default


 


No
Event of Default or other Default is continuing or might reasonably be expected
to result from the making of any Utilisation.


 


39





















 


19.17     No misleading information


 


(a)         The factual information contained in
the Information Package was true and accurate in all material respects as at
the date of the Information Package.


 


(b)         Nothing has occurred or been omitted
from the Information Package and no information has been given or withheld that
results in the information contained in the Information Package being untrue or
misleading in any material respect.


 


19.18     Ownership of each Obligor


 


It is
100 per cent directly or indirectly beneficially wholly owned by the Company.


 


19.19     Representations relating to Guarantee
by Austrian Guarantors


 


The
Austrian Guarantor makes the following representations and warranties to each
Finance Party:


 


(i)             it has performed its own independent
investigation into the financial and commercial standing, creditworthiness, and
legal status of the other Obligors and has not relied on any information from
the Agent, any of the Mandated Lead Arrangers or any Lender in this respect;
and


 


(ii)            any and all transactions entered into
by the Austrian Guarantor in connection with the Finance Documents have been
entered into on arm’s length terms and for the corporate benefit of the
Austrian Guarantor.


 


19.20     Representation relating to Austrian
Borrower


 


Each
Austrian Borrower represents and warrants to each Finance Party that it is
acting as principal and for its own account and not as an agent or trustee or
in any other capacity on behalf of any other party.


 


19.21     Representation relating to Belgian
Obligor


 


Sappi
International S.A. has the status of a co-ordination centre as described in the
Belgian Royal Decree n°187 of 30 December 1982 until 31 December 2005.  As from 1 January 2006 Sappi
International S.A. will meet the conditions of a finance company set forth in article 105
1°c of the Royal Decree implementing the Belgian Income Tax Code.


 


19.22     Repetition


 


The
Repeating Representations (other than Clause 19.19 (Representations relating to Guarantee by Austrian Guarantors))
are deemed to be made by each Obligor and Clause 19.19 (Representations relating to Guarantee by Austrian
Guarantors) is deemed to be made by each Austrian Guarantor (in each
case by reference to the facts and circumstances then existing):


 


(a)            on the date of each Utilisation
Request and the first day of each Interest Period; and


 


(b)           in the case of an Additional Obligor,
the day on which the company becomes (or it is proposed the company becomes) an
Additional Obligor.


 


20.         INFORMATION UNDERTAKINGS


 


The
undertakings in this Clause 20 remain in force from the date of this Agreement
for so long as any amount is outstanding under the Finance Documents or any
Commitment is in force.


 


40





















 


20.1       Financial statements


 


The
Company shall supply to the Agent in sufficient copies for all the Lenders:


 


(a)            as soon as the same become available,
but in any event within 150 days after the end of each of its financial years
the audited consolidated financial statements for the Group and the audited
unconsolidated financial statements of each Obligor (if required to be produced
by law) for that financial year; and


 


(b)           as soon as the same become available,
but in any event within 45 days of each Quarter Date, the unaudited
consolidated interim report for the Group for the period of three months ending
on such Quarter Date.


 


20.2       Compliance Certificate


 


The
Company shall supply to the Agent, with each set of financial statements or
interim report delivered pursuant to paragraph (a) of Clause 20.1 (Financial statements), a Compliance
Certificate signed by a director of the Company setting out (in reasonable
detail) computations as to compliance with Clause 21 (Financial covenants) as at the date as at
which those financial statements were drawn up.


 


20.3       Requirements as to financial
statements


 


(a)         Each set of financial statements
delivered by the Company pursuant to Clause 20.1 (Financial statements) shall be certified by a director of
the Company as fairly representing the financial condition of the Group as at
the date as at which those financial statements were drawn up.


 


(b)         The Company shall procure that each
set of financial statements or interim report delivered pursuant to paragraph (a) of
Clause 20.1 (Financial statements)
is prepared using IFRS (other than any such financial statements or interim
reports delivered in relation to the Company in respect of any period up to and
including the September 2005 Quarter Date which shall be prepared using SA
GAAP) (the “SA GAAP Accounts”),
and accounting practices and financial reference periods consistent with those
applied in the preparation of the Original Financial Statements unless, in
relation to any set of financial statements or interim report, it notifies the
Agent that there has been a material change in IFRS, or the accounting practices
or reference periods and its auditors deliver to the Agent:


 


(i)             a description of any change necessary
for those financial statements to reflect IFRS (or in the case of the SA GAAP
Accounts, SA GAAP), accounting practices and reference periods upon which that
Obligor’s Original Financial Statements were prepared; and


 


(ii)            sufficient information, in form and
substance as may be reasonably required by the Agent, to enable the Lenders to
determine whether Clause 21.1(a) (Financial
covenants) has been complied with and make an accurate comparison
between the financial position indicated in those financial statements or
interim report and the Original Financial Statements.


 


The
reference in Clause 21.3 (Financial testing)
to each of the financial statements and interim reports delivered pursuant to
Clause 20.1(a) (Information
Undertakings) shall be
construed as a reference to such financial statements and interim reports as
adjusted (up to and including the September 2005 Quarter Date) to reflect
the basis upon which the Original Financial Statements were prepared and after
the September 2005 Quarter Date to reflect IFRS.


 


41





















 


(c)         If the Company notifies the Agent of
a change in accordance with paragraph (b) above then the Company and Agent
shall enter into negotiations in good faith with a view to agreeing:


 


(A)         whether or not the change might
result in any material alteration in the commercial effect of any of the terms
of this Agreement; and


 


(B)          if so, any amendments to this
Agreement which may be necessary to ensure that the change does not result in
any material alteration in the commercial effect of those terms.


 


and if any amendments are agreed they shall take
effect and be binding on each of the Parties in accordance with their terms.


 


For the
purposes of Clause 21.3 (Financial Testing)
each of the financial statements and interim reports delivered pursuant to
Clause 20.1(a) (Information
undertakings) in respect of any accounting period falling after 1 October 2005
shall be adjusted to exclude an amount equal to the amount that was reflected
in the first such set of financial statements or interim reports as a
consequence of any reorganisation of pension fund liabilities upon the first
time application of IFRS by the Company which would not otherwise have appeared
in the Original Financial Statements.


 


20.4       Information: miscellaneous


 


Each
Obligor shall supply to the Agent (in sufficient copies for all the Lenders, if
the Agent so requests):


 


(a)       all documents dispatched by it to its shareholders (or any class of them)
or its creditors generally at the same time as they are dispatched;


 


(b)       promptly upon becoming aware of them, the details of any litigation,
arbitration or administrative proceedings which are commenced against any Group
Company which is reasonably likely to be adversely determined and which, if so
determined, is reasonably likely to have a Material Adverse Effect;


 


(c)       promptly upon becoming aware of the same, the details of any Environmental
Claim made against a Group Company which has, or would reasonably be likely to
have, a Material Adverse Effect; and


 


(d)       promptly, such further information regarding the financial condition,
business and operations of the Group as any Lender (through the Agent) may
reasonably request.


 


20.5       Notification of default


 


(a)         Each Obligor shall notify the Agent
of any Default (and the steps, if any, being taken to remedy it) promptly upon
becoming aware of its occurrence (unless the Agent has received such
notification by another Obligor).


 


(b)         Promptly upon a request by the Agent,
the Company shall supply to the Agent a certificate signed by a director or
senior officer on its behalf certifying that no Default is continuing (or if a
Default is continuing, specifying the Default and the steps, if any, being
taken to remedy it).


 


42





















 


20.6       Change in Material Subsidiaries


 


With
the delivery of each Compliance Certificate, the Company shall set out in the
Compliance Certificate the identity and details of the Material Subsidiaries.


 


20.7       “Know your customer” checks


 


(a)         If:


 


(i)             the introduction of or any change in
(or in the interpretation, administration or application of) any law or
regulation made after the date of this Agreement;


 


(ii)            any change in the status of an
Obligor after the date of this Agreement; or


 


(iii)           a proposed assignment or transfer by
a Lender of any of its rights and obligations under this Agreement to a party
that is not a Lender prior to such assignment or transfer,


 


obliges
the Agent or any Lender (or, in the case of paragraph (iii) above, any
prospective new Lender) to comply with “know your customer” or similar
identification procedures in circumstances where the necessary information is
not already available to it, each Obligor shall promptly upon the request of
the Agent or any Lender supply, or procure the supply of, such documentation
and other evidence as is reasonably requested by the Agent (for itself or on
behalf of any Lender) or any Lender (for itself or, in the case of the event
described in paragraph (iii) above, on behalf of any prospective new
Lender) in order for the Agent, such Lender or, in the case of the event
described in paragraph (iii) above, any prospective new Lender to carry out
and be satisfied it has complied with all necessary “know your customer” or
other similar checks under all applicable laws and regulations pursuant to the
transactions contemplated in the Finance Documents.


 


(b)         Each Lender shall promptly upon the
request of the Agent supply, or procure the supply of, such documentation and
other evidence as is reasonably requested by the Agent (for itself) in order
for the Agent to carry out and be satisfied it has complied with all necessary “know
your customer” or other similar checks under all applicable laws and
regulations pursuant to the transactions contemplated in the Finance Documents.


 


21.         FINANCIAL COVENANTS


 


21.1       Financial covenants


 


The
Company shall ensure that:


 


(a)            on each Quarter Date the mean average
of the ratios of EBITDA to Consolidated Net Interest Expense for the Quarter
ending on such Quarter Date and each of the three immediately preceding
Quarters shall not be less than 3.00:1;


 


(b)           on each Quarter Date the mean average
of the ratios of EBITDA to Consolidated Net Interest Expense for the Quarter
ending on such Quarter Date and each of the seven immediately preceding
Quarters shall not be less than 3.50:1;


 


(c)            the ratio of Net Debt to
Capitalisation shall not, on any Quarter Date, be greater than 0.65:1;


 


(d)           the ratio of Sappi Manufacturing Net
Debt to Sappi Manufacturing Capitalisation shall not, on any Quarter Date, be
greater than 0.65:1.


 


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21.2       Financial definitions


 


“Capitalisation” means, at any time, the
aggregate amount of Consolidated Capital and Net Debt at such time.


 


“Consolidated Capital” means, at any time,
the aggregate of:


 


(a)            the aggregate amount of the paid up
share capital of the Company (as consolidated); and


 


(b)           the total of the amount standing to
the credit of the consolidated capital and revenue reserves of the Group but
including any minority interest in a Group Company.


 


“Consolidated Net Interest Expense” means,
in relation to any period, the aggregate of:


 


(a)            all interest, commissions and other
financing charges payable by any Group Company to any person who is not a Group
Company in respect of that period;


 


(b)           to the extent not included in
paragraph (a) above, all finance costs charged to the consolidated profit
and loss account of the Group in respect of that period;


 


(c)            all amounts payable by any Group
Company in respect of that period under any interest rate protection agreement
(less any amounts receivable by any Group Company in respect of that period
under any interest rate protection agreement); and


 


(d)           the interest element of all rentals
or, as the case may be, other amounts payable in respect of that period under
any finance lease entered into by any Group Company,


 


less
any interest receivable (other than interest receivable from Group Companies)
by Group Companies.


 


“EBITDA” means, in respect of any period,
the consolidated profit on ordinary activities of the Group before taxation and
extraordinary items (if applicable) for such period, but adjusted:


 


(a)            by adding back Consolidated Net
Interest Expenses for such period;


 


(b)           by adding back depreciation for such
period;


 


(c)            by adding back any amount amortised
in that period against the consolidated profit and loss account of the Group;
and


 


(d)           for other non-cash items as described
in the Company’s consolidated financial statements.


 


“Net Debt” means the aggregate, on a
consolidated basis, of:


 


(a)            that part of the Financial
Indebtedness of the Group which relates to obligations for the payment or
repayment of money in respect of principal incurred in respect of:


 


(i)           monies borrowed or raised;


 


(ii)          any bond, note, loan stock, debenture
or similar instrument; or


 


(iii)         any acceptance credit, bill
discounting, note purchase, factoring or documentary credit facility
(including, for the avoidance of doubt, any Financial Indebtedness under this
Agreement); and


 


44





















 


(b)           the capital element of all rentals
or, as the case may be, other payments payable under any finance lease entered
into by the Group,


 


less:


 


(i)             cash at hand and at bank of the
Group;


 


(ii)            bonds, notes and commercial paper
beneficially owned by the Group with a maturity of not more than six months and
rated at least A-1 by S&P or at least P-1 by Moody’s (or an equivalent
rating of another agency which the Agent reasonably determines to be
comparable); and


 


(iii)           bonds or notes maturing within six
months and rated at least AA by S&P or at least Aa2 by Moody’s (or an
equivalent rating of another agency which the Agent reasonably determines to be
comparable).


 


“Sappi Manufacturing Capitalisation” means,
at any time, the aggregate amount of Sappi Manufacturing Consolidated Capital
and Sappi Manufacturing Net Debt at such time.


 


“Sappi Manufacturing  Consolidated Capital” means, at any time,
the aggregate of:


 


(a)            the aggregate amount of the paid up
share capital of Sappi Manufacturing (as consolidated); and


 


(b)           the total of the amount standing to
the credit of the consolidated capital and revenue reserves of the Sappi
Manufacturing Group but including any minority interest in a Sappi
Manufacturing Group Company.


 


“Sappi Manufacturing  Net Debt” means the aggregate, on a
consolidated basis at the level of Sappi Manufacturing, of:


 


(a)            that part of the Financial Indebtedness
of the Sappi Manufacturing Group which relates to obligations for the payment
or repayment of money in respect of principal incurred in respect of:


 


(i)           monies borrowed or raised;


 


(ii)          any bond, note, loan stock, debenture
or similar instrument; or


 


(iii)         any acceptance credit, bill
discounting, note purchase, factoring or documentary credit facility
(including, for the avoidance of doubt, any Financial Indebtedness under this
Agreement); and


 


(b)           the capital element of all rentals
or, as the case may be, other payments payable under any finance lease entered
into by the Sappi Manufacturing Group,


 


less:


 


(i)             cash at hand and at bank of the Sappi
Manufacturing Group;


 


(ii)            bonds, notes and commercial paper
beneficially owned by the Sappi Manufacturing Group with a maturity of not more
than six months and rated at least A-1 by S&P or at least P-1 by Moody’s
(or an equivalent rating of another agency which the Agent reasonably
determines to be comparable); and


 


45





















 


(iii)           bonds or notes maturing within six
months and rated at least AA by S&P or at least Aa2 by Moody’s (or an
equivalent rating of another agency which the Agent reasonably determines to be
comparable).


 


21.3       Financial testing


 


The
financial covenants set out in Clause 21.1 (Financial
covenants) shall be tested by reference to each of the financial
statements and interim reports delivered pursuant to Clause 20.1(a) (Information undertakings).


 


21.4       Accounting terms


 


All
accounting expressions which are not otherwise defined herein shall be
construed in accordance with IFRS other than in the case of the SA GAAP
Accounts which shall be construed in accordance with SA GAAP and any financial
statements delivered by the other Obligors which shall be construed in
accordance with current practice in their respective jurisdiction.


 


22.         GENERAL UNDERTAKINGS


 


The
undertakings in this Clause 22 remain in force from the date of this Agreement
for so long as any amount is outstanding under the Finance Documents or any
Commitment is in force.


 


22.1       Authorisations


 


Each
Obligor shall promptly obtain, comply with and do all that is necessary to
maintain in full force and effect any Authorisation required to enable it to
perform its obligations under the Finance Documents and to ensure the legality,
validity and (subject to the Reservations) enforceability or admissibility in
evidence in its jurisdiction of incorporation of each Finance Document.


 


22.2       Compliance with laws


 


Each
Obligor shall procure that each Group Company shall comply with all laws
(including, without limitation, Environmental Law) to which it may be subject
to the extent that failure so to comply does not have, or is not reasonably
likely to have, a Material Adverse Effect.


 


22.3       Pari passu ranking


 


Each
Obligor shall ensure that its payment obligations under the Finance Documents
rank at least pari passu with the claims of all its other unsecured and
unsubordinated creditors, except for obligations mandatorily preferred by law
applying to companies generally.


 


22.4       Insurance


 


Each
Obligor shall procure that each Group Company shall maintain levels of
insurance in respect of its assets and business in a manner customary for
businesses in the same business as the Group.


 


22.5       Negative pledge


 


The
Company shall not (and shall ensure that no other Group Company will) create or
permit to subsist any Security over any of its assets other than:


 


(a)            any Security entered into pursuant to
this Agreement;


 


(b)           any Security arising by operation of
law or in the ordinary course of business;


 


46





















 


(c)            any Security granted in the ordinary
course of trade over accounts created pursuant to any deposit or retention of
purchase price arrangements;


 


(d)           any netting or set-off arrangement
entered into by any Group Company in the ordinary course of its banking
arrangements for the purpose of netting debit and credit balances;


 


(e)            any Security over an asset of a Group
Company established to hold assets of any share option scheme of the Group
securing any loan to finance the acquisition of such assets;


 


(f)            any Security over an asset of a Group
Company, or any company which becomes a Group Company, to secure Financial
Indebtedness incurred by such company for the purpose of purchasing that asset
or of refinancing any such Financial Indebtedness where recourse for that
Financial Indebtedness is limited solely to such Security;


 


(g)           any Security over or affecting any
property or asset of a Group Company after the date of this Agreement, where
the Security is created prior to the date on which that Company becomes a Group
Company, if:


 


(i)           the Security was not created in
contemplation of the acquisition of that company;


 


(ii)          the principal amount secured has not
increased in contemplation of or since the acquisition of that company; and


 


(iii)         the Security is removed or discharged
within six months of that Company becoming a Group Company;


 


(h)           any Security over or affecting any
property or asset acquired by a Group Company after the date of this Agreement
if:


 


(i)           the Security was not created in
contemplation of the acquisition of that asset by a Group Company;


 


(ii)          the principal amount secured has not
been increased in contemplation of or since the acquisition of that asset by a
Group Company; and


 


(iii)         the Security is removed or discharged
within six months of the date of acquisition of such asset;


 


(i)             any Security listed in Schedule 9
(Existing Security) where the
principal amount secured has not been increased since the date of this
Agreement unless expressly permitted by the terms of this Agreement;


 


(j)             any Security granted by a Group
Company over trade receivables as part of any invoice discounting, factoring,
securitisation or like financing which trade receivables have a maturity of
less than 364 days;


 


(k)            any Security granted by a Group
Company (other than an Obligor) in favour of another Group Company or Security
granted by an Obligor in favour of another Obligor;


 


(l)             any Security granted with the prior
consent of the Majority Lenders; and


 


(m)           any Security not falling within any
of paragraphs (a) to (l) above over an asset which secures indebtedness
which when aggregated with any indebtedness the subject of 


 


47










 













 


Security (other
than Security falling within paragraphs (a) to (l) above inclusive) does not
exceed Euro 100,000,000.


 


22.6       Disposals


 


The Company shall
not (and shall ensure that no other Group Company will), enter into a Disposal
other than a Disposal:


 


(a)            made in the ordinary course of day to
day business of a Group Company;


 


(b)           by a Group Company to another Group
Company at fair market value and on arm’s length terms;


 


(c)            of cash on terms not otherwise
prohibited by this Agreement;


 


(d)           of an asset in exchange for an asset
or assets comparable or superior as to type, value and quality;


 


(e)            of an asset or assets in exchange (on
arm’s length terms) for another asset or assets;


 


(f)            of a business in exchange for another
business where the earnings before interest or tax and the gross assets of the
second mentioned business are not less than, respectively, the earnings before
interest and tax and gross assets of the first mentioned business;


 


(g)           of an asset which is obsolete for the
purpose for which such an asset is normally utilised;


 


(h)           to which the Majority Lenders have
given their consent;


 


(i)             occurring directly as a result of any
arrangement permitted by Clause 22.8 (Loans
and Guarantees) to the extent that any such arrangement constitutes
a Disposal;


 


(j)             occurring directly as a result of any
arrangement referred to in paragraph (g) of the definition of Financial
Indebtedness to the extent that such arrangement constitutes a Disposal (each a
“Permitted Sale and Leaseback Disposal”)
provided that:


 


(i)           the only Group Company party to
Permitted Sale and Leaseback Disposals is Sappi Manufacturing; and


 


(ii)          the aggregate principal amount of
Financial Indebtedness to which Permitted Sale and Leaseback Disposals relate
does not exceed euro 100,000,000;


 


(k)            (not falling within paragraphs (a) to
(j) above inclusive) which, does not result in the gross book value of all the
assets the subject of all such Disposals made after the date of this Agreement,
exceeding in aggregate 20 per cent. of the total gross assets of the Group (as
at the date of this Agreement).


 


22.7       Financial Indebtedness


 


(a)         The Company shall ensure that each
Group Company (other than the Obligors and Sappi Manufacturing) shall not incur
any Financial Indebtedness other than Financial Indebtedness:


 


(i)             under any Finance Document or
referred to in Schedule 10 (Existing
Subsidiary Indebtedness);


 


(ii)            incurred pursuant to paragraph (f) of
the definition thereof;


 


48





















 


(iii)           incurred pursuant to paragraph (g) of
the definition thereof in an aggregate principal amount of not more than euro
100,000,000;


 


(iv)          not included in paragraphs (i) to
(iii) above inclusive but which does not exceed, for the Group, euro
200,000,000 in aggregate principal amount.


 


(b)         Each Obligor shall ensure that it is
and will be in compliance with:


 


(i)             the Ten-Non-Bank Regulation; and


 


(ii)            the rule relating to the aggregate
number of persons and legal entities which are not Swiss Qualifying Lenders to
which a Swiss Borrower is permitted to owe interest-bearing financial
indebtedness under all interest bearing instruments (other than bond issues
which are subject to Swiss Withholding Tax) so that no Swiss Withholding Tax is
triggered as described in explanatory note S 02.122.1(4.99) of the Swiss
Federal Tax Administration and any change or amendment thereof which has an
impact on its obligation in respect of Swiss Withholding Tax which, on the date
of this Agreement, requires that the aggregate number of persons and legal
entities which are not Swiss Qualifying Lenders to which any Swiss Borrower
owes interest-bearing financial indebtedness under all interest-bearing
instruments taken together (other than bond issues which are subject to Swiss
Withholding Tax) does not and will not exceed 20 at any time.


 


22.8       Loans and Guarantees


 


(a)         The Company shall not (and shall
ensure that no other Group Company shall) make any loans or grant any credit
(other than to another Group Company but excluding, for this purpose, Sappi Manufacturing)
which would constitute Long Term Financial Indebtedness (as defined below)
unless it is made or granted in compliance with paragraph (b) below or:


 


(i)             the debtor in respect of that Long
Term Financial Indebtedness is Sappi Manufacturing (Pty) Ltd. and the payment
obligations of Sappi Manufacturing (Pty) Ltd. under such Long Term Financial
Indebtedness rank at least pari passu with the claims of all its other
unsecured creditors (except for obligations mandatorily preferred by law
applying to companies generally); or


 


(ii)            the debtor in respect of that Long
Term Financial Indebtedness (the “Debtor”)
has either (1) delivered satisfactory security to the creditor Group Company
(the “Creditor”) or (2) in the
event that the delivery of such satisfactory security by the Debtor would be
(A) unduly onerous or impractical in the reasonable opinion of the Majority
Lenders or (B) unlawful or prohibited, entered into arrangements with the
Creditor approved by the Majority Lenders (such approval not to be unreasonably
withheld or delayed) whereby such arrangements give the same (or reasonably
similar) commercial effect as the granting of satisfactory security pursuant to
(1) above and delivered to the Agent a legal opinion (in form and content
reasonably satisfactory to the Agent) in respect thereof; or


 


(iii)           at the same time as such loans are
made or credit granted, an equivalent amount is made unconditionally available
to the Creditor or any other Group Company from a person (other than a Group
Company) by way of:


 


49





















 


(A)         equity contribution or subscription;
or


 


(B)          loan (but only to the extent
permitted under Clause 22.7 (Financial
Indebtedness)) or


 


(C)          loan subordinated on terms reasonably
acceptable to the Majority Lenders (to the extent that such a loan would not be
permitted under Clause 22.7 (Financial
Indebtedness); nor


 


(b)         The Company shall not (and shall
ensure that no other Group Company shall) give any guarantee or indemnity or
enter into any other instrument of suretyship or make any loans or grant any
credit which would constitute Long Term Financial Indebtedness (as defined
below) other than:


 


(i)             pursuant to the Finance Documents;


 


(ii)            guarantees, indemnities or other
instruments of suretyship given in respect of Long Term Financial Indebtedness
of an Obligor or given in favour of a Group Company in respect of the Long Term
Financial Indebtedness owed by it to another Group Company or owed to it by
another Group Company;


 


(iii)           loans or other forms of credit made by a Group Company to another Group
Company (other than Sappi Manufacturing) or as permitted pursuant to paragraphs
(a)(i), (ii) or (iii) above); or


 


(iv)          guarantees, indemnities or other
instruments of suretyship given in respect of Long Term Financial Indebtedness
of a Group Company or loans or other forms of credit made by a Group Company
where the aggregate (without double counting) of: (1) the aggregate liability
(whether actual or contingent) of Group Companies under all guarantees,
indemnities and instruments of suretyship given by a Group Company not falling
in paragraphs (b)(i) or (ii) above, (2) the amount made unconditionally
available by any Group Company by way of equity contribution or subscription or
loan to or in connection with any Joint Venture and (3) the amount of all loans
or other forms of credit made by any Group Company not falling within
paragraphs (a), (i), (ii) or (iii) or (b)(i) or (iii) above, does not exceed
euro 100,000,000.


 


(c)         No Obligor shall give any guarantee
or indemnity or enter into any other instrument of suretyship in connection
with any Financial Indebtedness of Sappi Manufacturing.


 


For the purposes of
the above,


 


(i)             “Long
Term Financial Indebtedness” means indebtedness for or in respect of
the items specified in paragraphs (a) to (d) inclusive and (h) (to the extent
it relates to indebtedness falling within paragraphs (a) to (d) inclusive) in
each case of the definition of “Financial Indebtedness” other than any such
indebtedness which is payable on demand or has a scheduled maturity of no more
than a year; and


 


(ii)            “satisfactory
security” means documentation creating, evidencing or granting
(subject to any prior interests) Security in respect of the obligation of the
Debtor to the Creditor in respect of such Long Term Financial Indebtedness,
over assets of the Debtor or over 


 


50





















 


assets of any other
person (in each case, such assets shall at least be equivalent in value to the
amount of such Long Term Financial Indebtedness (as valued by, in the case of
such Long Term Financial Indebtedness being less than euro 100,000,000, the
Borrower and in all other cases, Deloitte and Touche (or any other agreed
accountancy firm)), in favour of and on terms reasonably acceptable to the
Creditor together with a legal opinion (in form and content reasonably
satisfactory to the Agent) in respect thereof.


 


22.9       Merger


 


(i)             No Obligor shall enter into any
amalgamation, demerger or merger if such Obligor is not the surviving entity,
unless the liabilities owed to the Lenders under the Finance Documents will
survive.


 


(ii)            No Group Company shall enter into any
amalgamation, demerger or merger with a company that is not a Group Company
without the consent of the Majority Lenders (such consent not to be
unreasonably withheld or delayed).


 


22.10     Change of Business


 


The Obligors shall
procure that the business of the Group, taken as a whole, remains the Paper
Business.


 


22.11     Undertakings relating to Guarantee by
Austrian Guarantor


 


(a)         The Obligors shall procure that the
shareholder(s) of the Austrian Guarantor shall neither increase the stated
share capital (Stammkapital) by
way of capital increase from free reserves (including a profit carry-forward) (Kapitalerhöhung aus Gesellschaftsmitteln)
nor increase any restricted reserves (gebundene
Rücklagen) (unless required by Austrian law) but shall pay any funds
to be paid to the Austrian Guarantor into the free reserves (ungebundene Rücklagen) of the Austrian
Guarantor. Further, the Obligors shall procure that the shareholders of the
Austrian Guarantor shall exercise their shareholder rights in such way that the
Austrian Guarantor covers any possible balance sheet loss (Bilanzverlust) by dissolving restricted
reserves (gebundene Rücklagen)
rather than free reserves (ungebundene
Rücklagen) to the extent possible pursuant to Austrian law and the
Austrian Guarantor shall abide by such requirement when preparing its financial
statements.


 


(b)         The Obligors (other than the Austrian
Guarantor) undertake, subject to Clause 18.7 (Deferral
of Guarantors’ Rights), to reimburse the Austrian Guarantor for any
payments made by the Austrian Guarantor upon demand from a Finance Party or any
other payment made in connection with the guarantee given by the Austrian
Guarantor under Clause 18 (Guarantee and
indemnity), immediately upon the Austrian Guarantor’s first written
demand.


 


23.         EVENTS OF DEFAULT


 


Each of the events
or circumstances set out in Clauses 23.1 to 23.12 inclusive is an Event of Default.


 


23.1       Non-payment


 


An Obligor does not
pay on the due date any amount payable pursuant to a Finance Document at the
place at and in the currency in which it is expressed to be payable unless:


 


51





















 


(a)            its failure to pay is caused by
administrative or technical error; and


 


(b)           payment is made within five Business
Days of its due date.


 


23.2       Financial covenants


 


Any requirement of
Clause 21 (Financial covenants)
is not satisfied.


 


23.3       Other obligations


 


An Obligor does not
comply with any provision of the Finance Documents (other than those referred
to in Clause 23.1 (Non-payment)
and Clause 23.2 (Financial covenants))
and, if the failure to comply is capable of remedy, it is not remedied within
30 days of the Agent giving notice to the Company or an Obligor becoming aware
of the failure to comply.


 


23.4       Misrepresentation


 


Any representation
or statement made or deemed to be made by an Obligor in the Finance Documents
or any other document delivered by or on behalf of any Obligor under or in
connection with any Finance Document is or proves to have been incorrect in any
respect when made and where the circumstances making such representation or
statement incorrect are capable of being altered so that such representation or
statement is correct, such circumstances are not so altered within 30 days of
the Agent notifying the relevant Obligor of such representation or statement
being incorrect.


 


23.5       Cross default


 


(a)         Any Financial Indebtedness of any
Group Company is not paid when due and payable nor within any applicable grace
period.


 


(b)         Any Financial Indebtedness of any
Group Company is declared to be or otherwise becomes due and payable prior to
its specified maturity as a result of a default or an event of default (however
described).


 


(c)         Any creditor of any Group Company
becomes entitled to declare any Financial Indebtedness of any Group Company due
and payable prior to its specified maturity as a result of a default or an
event of default (however described).


 


(d)         No Event of Default will occur under
this Clause 23.5 if the aggregate amount of Financial Indebtedness or
commitment for Financial Indebtedness falling within paragraphs (a) to (c)
above is less than euro 10,000,000.


 


23.6       Creditors’ process


 


Expropriation,
attachment, sequestration, distress or execution affects any asset or assets of
Group Companies having an aggregate value of at least euro 10,000,000 and is
not discharged within 30 days.


 


23.7       Insolvency


 


(a)         An Obligor or any Material Subsidiary
is unable or admits inability to pay its debts as they fall due, suspends
making payments on any of its debts or commences negotiations with one or more
of its creditors with a view to rescheduling any class of its indebtedness.


 


(b)         A moratorium is declared in respect
of any class of indebtedness of an Obligor or any Material Subsidiary.


 


52





















 


(c)         The Austrian Guarantor is declared
(or declares itself) bankrupt, is in a situation of illiquidity (Zahlungsunfähigkeit), within the meaning
of § 66 of the KO, as interpreted by Austrian courts, or over indebtedness (Überschuldung), within the meaning of § 67
of the KO, as interpreted by Austrian courts, is presumably unable to pay its
debts as they fall due (drohende
Zahlungsunfähigkeit), within the meaning of § 1 (1) of the AO, as
interpreted by Austrian courts or the preconditions for the opening of
reorganisation proceedings (Reorganisationsbedarf)
under the URG, as set out in the URG and interpreted by Austrian courts, have
been satisfied in respect of the Austrian Guarantor (save for any solvent
reorganisation previously approved by the Agent in writing, such approval not
to be unreasonably withheld).


 


(d)         Without limitation to paragraphs (a)
and (b) above, in relation to a Swiss Obligor, the following events occur:


 


(i)             it becomes unable to pay its debts (Zahlungsunfähigkeit);


 


(ii)            it suspends making payments (Zahlungseinstellung); or


 


(iii)           half of its share capital and the
legal reserves are not covered or it becomes over-indebted (hälftiger Kapitalverlust oder Überschuldung)
within the meaning of article 725 of the CO;


 


(iv)          its balance sheet is filed with a
judge due to over-indebtedness or insolvency pursuant to article 725a of the
CO;


 


(v)           a moratorium is declared (Stundung and Nachlassstundung); or


 


(vi)          any maturity of its indebtedness is
postponed (Fälligkeitsaufschub).


 


23.8       Insolvency proceedings


 


Any legal
proceeding or other formal procedure is taken or a meeting is convened for the
purpose of considering a resolution in relation to:


 


(a)            the bankruptcy, the suspension of
payments, winding-up, dissolution, liquidation, annulment as a legal entity,
administration or reorganisation (by way of voluntary arrangement, scheme of
arrangement or otherwise) of an Obligor or any Material Subsidiary other than a
solvent liquidation or reorganisation of any Material Subsidiary;


 


(b)           a general composition, assignment or
arrangement with all of the creditors of an Obligor or any Material Subsidiary
relating to a general rescheduling of its financial indebtedness;


 


(c)            the appointment of a liquidator
(other than (i) a winding up petition which is frivolous or vexatious and which
is, in any event, discharged within 30 days of its presentation and (ii) in
respect of a solvent liquidation of any Material Subsidiary), receiver,
administrator, administrative receiver, compulsory manager, an administrateur judiciaire/gerechtelijk bestuurder,
a speciaal commissaris/commissaire spécial,
a séquestre/sekwester or other
similar officer in respect of an Obligor or any Material Subsidiary or all or
any part (having an aggregate value of at least euro 10,000,000) of its assets;
or


 


53





















 


(d)           enforcement of any Security over all
or substantially all of the assets of an Obligor or any Material Subsidiary
which is not discharged within 30 days of the relevant legal proceeding or
formal procedure being taken,


 


or any analogous
procedure or step is taken in any jurisdiction including, without limitation,
if the Austrian Guarantor is subject to:


 


(i)           any bankruptcy proceedings (Konkursverfahren) commenced pursuant to
the KO, unless the application for such proceedings is dismissed within thirty
days from (but excluding) the day it is filed (unless dismissed on the ground
that the costs of the bankruptcy proceedings were likely to exceed the assets
of such person (Abweisung mangels
kostendeckenden Vermögens)); or


 


(ii)          any composition proceedings (Ausgleichsverfahren) commenced pursuant to
the AO; or


 


(iii)         any reorganisation proceedings (Reorganisationsverfahren) under the URG
(save for any solvent reorganisation previously approved by the Majority
Lenders in writing, such approval not to be unreasonably withheld),


 


unless, in relation to sub-paragraphs (ii) and (iii), the
opening of the relevant proceedings is the only action that has occurred,


 


or, without
limitation, if a Swiss Obligor is subject to:


 


(i)                                      bankruptcy proceedings (Betreibung auf Konkurs);


 


(ii)                                   composition with creditors (Nachlassverfahren) including in particular
moratorium (Nachlassstundung),
proceedings regarding composition agreements (Nachlassvertrag)
and emergency moratorium (Notstundung);


 


(iii)                                proceedings regarding postponement of
maturity (Fälligkeitsaufschub);


 


(iv)                               postponement of the opening of
bankruptcy or moratorium proceedings pursuant to article 725a or article 817 of
the CO respectively (Konkursaufschub/Gesellschaftsrechtliches
Moratorium); or


 


(v)                                  a notification to a judge of a
capital loss or over-indebtedness under these provisions.


 


23.9       Unlawfulness


 


It is or becomes
unlawful for an Obligor to perform any of its obligations under the Finance
Documents.


 


23.10     Repudiation


 


An Obligor
repudiates a Finance Document or evidences an intention to repudiate a Finance
Document.


 


23.11     Cessation of business


 


An Obligor or any
Material Subsidiary ceases to carry on all or a substantial part of its
business (other than as a result of a solvent liquidation or reorganisation of
any Material Subsidiary or disposal permitted hereunder) and such cessation
would result in the Group, as a whole, ceasing to carry on the Paper Business.


 


54





















 


23.12     Litigation adversely determined


 


Any litigation is
determined against any Group Company which has, or is reasonably likely to
have, a Material Adverse Effect.


 


23.13     South Africa


 


Any Authorisation
provided by the Exchange Control Department of the South African Reserve Bank
in connection with any Finance Document, the guarantee given by the Company
under this Agreement or the fulfilment by the Company of its obligations under
this Agreement is amended adversely, repealed, revoked or terminated or
expires.


 


23.14     Acceleration


 


On and at any time
after the occurrence of an Event of Default which is continuing the Agent may,
and shall if so directed by the Majority Lenders, by notice to the Company:


 


(a)            cancel the Total Commitments
whereupon they shall immediately be cancelled;


 


(b)           declare that all or part of the
Loans, together with accrued interest, and all other amounts accrued under the
Finance Documents be immediately due and payable, whereupon they shall become
immediately due and payable.


 


55





















 


SECTION
9


CHANGES TO PARTIES


 


24.         CHANGES TO THE LENDERS


 


24.1       Assignments and transfers by the
Lenders


 


(a)         Subject to this Clause 24, a Lender
(the “Existing Lender”) may:


 


(i)             assign any of its rights;


 


(ii)            transfer any of its rights and
obligations;


 


(iii)           enter into a sub-participation or
similar agreement in relation to this Agreement,


 


to another bank or
financial institution (the “New Lender”);


 


provided that no Lender may make any such
assignment or transfer to, or enter into a sub-participation or similar
agreement with, any bank or financial institution which is not a Swiss
Qualifying Lender without the prior written consent of the Majority Lenders.


 


(b)         Any Lender who enters into a
sub-participation agreement in relation to this Agreement shall ensure that:


 


(i)             the terms of such sub-participation
agreement oblige the sub-participant to neither enter into further
sub-participation agreements (in relation to the rights between it and such
Lender) nor assign or grant any interest over the sub-participation agreement,
except in each case to a person who is a Swiss Qualifying Lender;


 


(ii)            the sub-participant enters into an
undertaking in favour of each Lender and each Swiss Obligor to abide by the
terms included in the sub-participation agreement to reflect paragraph (a)
above; and


 


(iii)           the terms of such sub-participation
agreement oblige the sub-participant, in respect of any further
sub-participation, assignment or grant, to include a term identical to the
provisions of this clause mutatis mutandis, including a requirement that any
further sub-participant, assignee or grantee enters into such undertaking.


 


(c)         The Parties acknowledge that pursuant
to the Ten Non-Bank Regulation and subject to applicable double tax treaties,
Swiss Withholding Tax (charged at the rate of 35 per cent. as at the date of
this Agreement) is imposed on interest payments by a Swiss Borrower (such tax
to be withheld at source by the relevant Swiss Borrower) if, at any time before
the Termination Date, (before syndication, upon syndication or at any time
thereafter), more than ten institutions other than Swiss Qualifying Lenders
participate in the Facility regardless of whether they participate directly as
Lenders or indirectly by way of sub-participation or similar arrangements.


 


24.2       Conditions of assignment or transfer


 


(a)         The consent of the Company is
required for an assignment or transfer by a Lender, unless the assignment or
transfer is to another Lender or an Affiliate of a Lender or an Event of
Default has occurred and is continuing.


 


56





















 


(b)         The consent of the Company to an
assignment or transfer must not be unreasonably withheld or delayed. The
Company will be deemed to have given its consent 10 Business Days after the
Lender has requested it unless consent is expressly refused by the Company
within that time.


 


(c)         The consent of the Company to an
assignment or transfer must not be withheld solely because the assignment or
transfer may result in an increase to the Mandatory Cost.


 


(d)         An assignment or transfer by a Lender
of its Commitments under the Facility may be in whole or in part, but if in
part shall be in minimum Base Currency Amounts of euro 10,000,000.


 


(e)         An assignment will only be effective
on:


 


(i)             receipt by the Agent of written
confirmation from the New Lender (in form and substance satisfactory to the
Agent) that the New Lender will assume the same obligations to the other
Finance Parties as it would have been under if it was an Original Lender; and


 


(ii)            performance by the Agent of all “know
your customer” or other checks relating to any person that it is required to
carry out in relation to such assignment to a New Lender, the completion of
which the Agent shall promptly notify to the Existing Lender and the New
Lender.


 


(f)          A transfer will only be effective if
the procedure set out in Clause 24.5 (Procedure
for transfer) is complied with.


 


(g)         If:


 


(i)             a Lender assigns or transfers any of
its rights or obligations under the Finance Documents or changes its Facility
Office; and


 


(ii)            as a result of circumstances existing
at the date the assignment, transfer or change occurs, an Obligor would be
obliged to make a payment to the New Lender or Lender acting through its new
Facility Office under Clause 13 (Tax gross
up and indemnities) or Clause 14 (Increased
costs),


 


then the New Lender
or Lender acting through its new Facility Office is only entitled to receive
payment under those Clauses to the same extent as the Existing Lender or Lender
acting through its previous Facility Office would have been if the assignment,
transfer or change had not occurred.


 


24.3       Assignment or transfer fee


 


The New Lender
shall, on the date upon which an assignment or transfer takes effect, pay to
the Agent (for its own account) a fee of euro 1,500.


 


24.4       Limitation of responsibility of
Existing Lenders


 


(a)         Unless expressly agreed to the
contrary, an Existing Lender makes no representation or warranty and assumes no
responsibility to a New Lender for:


 


(i)             the legality, validity,
effectiveness, adequacy or enforceability of the Finance Documents or any other
documents;


 


(ii)            the financial condition of any
Obligor;


 


57





















 


(iii)           the performance and observance by any
Obligor of its obligations under the Finance Documents or any other documents;
or


 


(iv)          the accuracy of any statements
(whether written or oral) made in or in connection with any Finance Document or
any other document,


 


and any
representations or warranties implied by law are excluded.


 


(b)         Each New Lender confirms to the Existing
Lender and the other Finance Parties that it:


 


(i)             has made (and shall continue to make)
its own independent investigation and assessment of the financial condition and
affairs of each Obligor and its related entities in connection with its participation
in this Agreement and has not relied exclusively on any information provided to
it by the Existing Lender in connection with any Finance Document; and


 


(ii)            will continue to make its own
independent appraisal of the creditworthiness of each Obligor and its related
entities whilst any amount is or may be outstanding under the Finance Documents
or any Commitment is in force.


 


(c)         Nothing in any Finance Document
obliges an Existing Lender to:


 


(i)             accept a re-transfer from a New
Lender of any of the rights and obligations assigned or transferred under this
Clause 24; or


 


(ii)            support any losses directly or
indirectly incurred by the New Lender by reason of the non-performance by any
Obligor of their obligations under the Finance Documents or otherwise.


 


24.5       Procedure for transfer


 


(a)         Subject to the conditions set out in
Clause 24.2 (Conditions of assignment or
transfer) a transfer is effected in accordance with paragraph (c)
below when the Agent executes an otherwise duly completed Transfer Certificate
delivered to it by the Existing Lender and the New Lender. The Agent shall,
subject to paragraph (b) below, within 5 Business Days after receipt by it of a
duly completed Transfer Certificate appearing on its face to comply with the
terms of this Agreement and delivered in accordance with the terms of this
Agreement, execute that Transfer Certificate and hold in accordance with Clause
26.16 (Agent to hold original documents).


 


(b)         The Agent shall only be obliged to
execute a Transfer Certificate delivered to it by the Existing Lender and the
New Lender once it is satisfied it has complied with all necessary “know your
customer” or other similar checks under all applicable laws and regulations in
relation to the transfer to such New Lender.


 


(c)         On the Transfer Date:


 


(i)             to the extent that in the Transfer
Certificate the Existing Lender seeks to transfer its rights and obligations
under the Finance Documents each of the Obligors and the Existing Lender shall
be released from further obligations towards one another under the Finance
Documents and their respective rights against one another shall be cancelled
(being the “Discharged Rights and Obligations”);


 


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(ii)            each of the Obligors and the New
Lender shall assume obligations towards one another and/or acquire rights
against one another which differ from the Discharged Rights and Obligations
only insofar as that Obligor and the New Lender have assumed and/or acquired
the same in place of that Obligor and the Existing Lender;


 


(iii)           the Agent, the Mandated Lead
Arrangers and the other Lenders shall acquire the same rights and assume the
same obligations between themselves as they would have acquired and assumed had
the New Lender been an Original Lender with the rights and/or obligations
acquired or assumed by it as a result of the transfer and to that extent the
Agent, the Mandated Lead Arrangers and the Existing Lender shall each be
released from further obligations to each other under this Agreement; and


 


(iv)          the New Lender shall become a Party
as a “Lender”.


 


24.6       Disclosure of information


 


(a)         Any Lender may disclose to any of its
Affiliates and any other person:


 


(i)             to (or through) whom that Lender
assigns or transfers (or may potentially assign or transfer) all or any of its
rights and obligations under this Agreement;


 


(ii)            with (or through) whom that Lender
enters into (or may potentially enter into) any sub-participation in relation
to, or any other transaction under which payments are to be made by reference
to, this Agreement or any Obligor; or


 


(iii)           to whom, and to the extent that,
information is required to be disclosed by any applicable law or regulation,


 


any information
about any Obligor, the Group and the Finance Documents as that Lender shall consider
appropriate if, in relation to sub-paragraphs (i) and (ii) above, the person to
whom the information is to be given has entered into a Confidentiality
Undertaking.


 


(b)         For the purposes only of and under
the conditions set forth in this Clause 24.6, the Company waives any rights it
may have in respect of banking secrecy pursuant to the Austrian Banking Act
1993, Austrian law gazette 1993/532, as amended from time to time (Bankwesengesetz 1993, BGBI 1993/532 in der jeweils gültigen Fassung).


 


25.         CHANGES TO THE OBLIGORS


 


25.1       Assignments and transfer by Obligors


 


No Obligor may
assign any of its rights or transfer any of its rights or obligations under the
Finance Documents.


 


25.2       Additional Borrowers


 


(a)         The Company may request that any of
its wholly owned Subsidiaries becomes an Additional Borrower.  That Subsidiary shall become an Additional
Borrower if:


 


(i)             all the Lenders approve the addition
of that Subsidiary;


 


(ii)            the Company delivers to the Agent a
duly completed and executed Accession Letter;


 


(iii)           the Company confirms that no Default
is continuing or would occur as a result of that Subsidiary becoming an
Additional Borrower;


 


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(iv)          no Tax Deduction will be required to
be made in respect of any Lender by an Additional Borrower nor will any Lender
suffer any loss, liability or cost on account of Tax pursuant to Clause 13.3 (Tax indemnity) in connection with such
Additional Borrower; and


 


(v)           the Agent has received all of the
documents and other evidence listed in Part II of Schedule 2 (Conditions precedent) in relation to that
Additional Borrower, each in form and substance satisfactory to the Agent.


 


(b)         The Agent shall notify the Company
and the Lenders promptly upon being satisfied that it has received (in form and
substance satisfactory to it) all the documents and other evidence listed in
Part II of Schedule 2 (Conditions precedent).


 


25.3       Resignation of a Borrower


 


(a)         The Company may request that a
Borrower ceases to be a Borrower by delivering to the Agent a Resignation
Letter.


 


(b)         The Agent shall accept a Resignation
Letter and notify the Company and the Lenders of its acceptance if:


 


(i)             no Default is continuing or would
result from the acceptance of the Resignation Letter (and the Company has
confirmed this is the case); and


 


(ii)            the Borrower is under no actual or
contingent obligations as a Borrower under any Finance Documents,


 


whereupon that
company shall cease to be a Borrower and shall have no further rights or
obligations as a Borrower under the Finance Documents.


 


25.4       Additional Guarantors


 


(a)         The Company may request that any of
its wholly owned Subsidiaries become an Additional Guarantor.  That Subsidiary shall become an Additional
Guarantor if:


 


(i)             the Company delivers to the Agent a
duly completed and executed Accession Letter; and


 


(ii)            the Agent has received all of the
documents and other evidence listed in Part II of Schedule 2 (Conditions precedent) in relation to that
Additional Guarantor, each in form and substance satisfactory to the Agent.


 


(b)         The Agent shall notify the Company
and the Lenders promptly upon being satisfied that it has received (in form and
substance satisfactory to it) all the documents and other evidence listed in
Part II of Schedule 2 (Conditions precedent).


 


25.5       Repetition of Representations


 


Delivery of an
Accession Letter constitutes confirmation by the relevant Subsidiary that the
Repeating Representations and each of the representations set out in Clauses
19.5 (Validity and admissibility in evidence),
19.7 (Deduction of Tax) and 19.8
(No filing or stamp taxes) are
true and correct in relation to it as at the date of delivery as if made by
reference to the facts and circumstances then existing.


 


25.6       Resignation of a Guarantor


 


(a)         The Company may request that a
Guarantor (other than the Company) ceases to be a Guarantor by delivering to
the Agent a Resignation Letter.


 


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(b)         The Agent shall accept a Resignation
Letter and notify the Company and the Lenders of its acceptance if:


 


(i)             no Default is continuing or would
result from the acceptance of the Resignation Letter (and the Company has
confirmed this is the case); and


 


(ii)            all the Lenders have consented to the
Company’s request.


 


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SECTION
10


THE FINANCE PARTIES


 


26.         ROLE OF THE AGENT AND THE MANDATED LEAD ARRANGERS


 


26.1       Appointment of the Agent


 


(a)         Each of the Mandated Lead Arrangers
and the Lenders appoints the Agent to act as its agent under and in connection
with the Finance Documents.


 


(b)         Each of the Mandated Lead Arrangers
and the Lenders authorises the Agent to exercise the rights, powers,
authorities and discretions specifically given to the Agent under or in
connection with the Finance Documents together with any other incidental
rights, powers, authorities and discretions.


 


26.2       Duties of the Agent


 


(a)         Subject to Clause 13.5(b) (Stamp Taxes) and Clause 31.5(f) (Electronic communication), the Agent shall
promptly forward to a Party the original or a copy of any document which is
delivered to the Agent for that Party by any other Party.


 


(b)         If the Agent receives notice from a
Party referring to this Agreement, describing a Default and stating that the
circumstance described is a Default, it shall promptly notify the Lenders.


 


(c)         The Agent shall promptly notify the
Lenders of any Default arising under Clause 23.1 (Non-payment).


 


(d)         The Agent’s duties under the Finance
Documents are solely mechanical and administrative in nature.


 


26.3       Role of the Mandated Lead Arrangers


 


Except as
specifically provided in the Finance Documents, each Mandated Lead Arranger has
no obligations of any kind to any other Party under or in connection with any
Finance Document.


 


26.4       No fiduciary duties


 


(a)         Nothing in this Agreement constitutes
the Agent or the Mandated Lead Arrangers as a trustee or fiduciary of any other
person.


 


(b)         Neither the Agent nor the Mandated
Lead Arrangers shall be bound to account to any Lender for any sum or the
profit element of any sum received by it for its own account.


 


26.5       Business with the Group


 


The Agent and the
Mandated Lead Arrangers may accept deposits from, lend money to and generally
engage in any kind of banking or other business with any Group Company.


 


26.6       Rights and discretions of the Agent


 


(a)         The Agent may rely on:


 


(i)             any representation, notice or
document believed by it to be genuine, correct and appropriately authorised;
and


 


(ii)            any statement made by a director,
authorised signatory or employee of any person regarding any matters which may
reasonably be assumed to be within his knowledge or within his power to verify.


 


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(b)         The Agent may assume (unless it has
received notice to the contrary in its capacity as agent for the Lenders) that:


 


(i)             no Default has occurred (unless it
has actual knowledge of a Default arising under Clause 23.1 (Non-payment));


 


(ii)            any right, power, authority or
discretion vested in any Party or the Majority Lenders has not been exercised;
and


 


(iii)           any notice or request made by the
Company (other than a Utilisation Request) is made on behalf of and with the
consent and knowledge of all the Obligors.


 


(c)         The Agent may engage, pay for and
rely on the advice or services of any lawyers, accountants, surveyors or other
experts.


 


(d)         The Agent may act in relation to the
Finance Documents through its personnel and agents.


 


26.7       Majority Lenders’ instructions


 


(a)         Unless a contrary indication appears
in a Finance Document, the Agent shall (a) act in accordance with any
instructions given to it by the Majority Lenders (or, if so instructed by the
Majority Lenders, refrain from acting or exercising any right, power, authority
or discretion vested in it as Agent) and (b) not be liable for any act (or
omission) if it acts (or refrains from taking any action) in accordance with
such an instruction of the Majority Lenders.


 


(b)         Unless a contrary indication appears
in a Finance Document, any instructions given by the Majority Lenders will be
binding on all the Lenders and the Mandated Lead Arrangers.


 


(c)         The Agent may refrain from acting in
accordance with the instructions of the Majority Lenders (or, if appropriate,
the Lenders) until it has received such security as it may require for any cost,
loss or liability (together with any associated VAT) which it may incur in
complying with the instructions.


 


(d)         In the absence of instructions from
the Majority Lenders (or, if appropriate, the Lenders) the Agent may act (or
refrain from taking action) as it considers to be in the best interest of the
Lenders.


 


(e)         The Agent is not authorised to act on
behalf of a Lender (without first obtaining that Lender’s consent) in any legal
or arbitration proceedings relating to any Finance Document.


 


26.8       Responsibility for documentation


 


Neither the Agent
nor the Mandated Lead Arrangers:


 


(a)            is responsible for the adequacy,
accuracy and/or completeness of any information (whether oral or written)
supplied by the Agent, the Mandated Lead Arrangers, an Obligor or any other
person given in or in connection with any Finance Document or the Information
Package; or


 


(b)           is responsible for the legality,
validity, effectiveness, adequacy or enforceability of any Finance Document or
any other agreement, arrangement or document entered into, made or executed in
anticipation of or in connection with any Finance Document.


 


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26.9       Exclusion of liability


 


(a)         Without limiting paragraph (b) below,
the Agent will not be liable for any action taken by it under or in connection
with any Finance Document, unless directly caused by its gross negligence or
wilful misconduct.


 


(b)         No Party may take any proceedings
against any officer, employee or agent of the Agent in respect of any claim it
might have against the Agent or in respect of any act or omission of any kind
by that officer, employee or agent in relation to any Finance Document and any
officer, employee or agent of the Agent may rely on this Clause.


 


(c)         The Agent will not be liable for any
delay (or any related consequences) in crediting an account with an amount
required under the Finance Documents to be paid by the Agent if the Agent has
taken all necessary steps as soon as reasonably practicable to comply with the
regulations or operating procedures of any recognised clearing or settlement
system used by the Agent for that purpose.


 


(d)         Nothing in this Agreement shall
oblige the Agent or the Mandated Lead Arrangers to carry out any “know your
customer” or other checks in relation to any person on behalf of any Lender and
each Lender confirms to the Agent and the Mandated Lead Arrangers that it is
solely responsible for any such checks it is required to carry out and that it
may not rely on any statement in relation to such checks made by the Agent or
the Mandated Lead Arrangers.


 


26.10     Lenders’ indemnity to the Agent


 


Each Lender shall
(in proportion to its share of the Total Commitments or, if the Total
Commitments are then zero, to its share of the Total Commitments immediately
prior to their reduction to zero) indemnify the Agent, within three Business
Days of demand, against any cost, loss or liability incurred by the Agent
(otherwise than by reason of the Agent’s gross negligence or wilful misconduct)
in acting as Agent under the Finance Documents (unless the Agent has been
reimbursed by an Obligor pursuant to a Finance Document).


 


26.11     Resignation of the Agent


 


(a)         The Agent may resign and appoint one
of its Affiliates acting through an office as successor by giving notice to the
Lenders and the Company.


 


(b)         Alternatively the Agent may resign by
giving notice to the Lenders and the Company, in which case the Majority
Lenders (after consultation with the Company) may appoint a successor Agent.


 


(c)         If the Majority Lenders have not
appointed a successor Agent in accordance with paragraph (b) above within 30
days after notice of resignation was given, the Agent (after consultation with
the Company) may appoint a successor Agent.


 


(d)         The retiring Agent shall, at its own
cost, make available to the successor Agent such documents and records and
provide such assistance as the successor Agent may reasonably request for the
purposes of performing its functions as Agent under the Finance Documents.


 


(e)         The Agent’s resignation notice shall
only take effect upon the appointment of a successor.


 


(f)          Upon the appointment of a successor,
the retiring Agent shall be discharged from any further obligation in respect
of the Finance Documents but shall remain entitled to the benefit of this Clause
26. Its successor and each of the other Parties shall have the same rights and 


 


64





















 


obligations amongst
themselves as they would have had if such successor had been an original Party.


 


(g)         After consultation with the Company,
the Majority Lenders may, by notice to the Agent, require it to resign in
accordance with paragraph (b) above. In this event, the Agent shall resign in
accordance with paragraph (b) above.


 


26.12     Confidentiality


 


(a)         In acting as agent for the Finance
Parties, the Agent shall be regarded as acting through its agency division
which shall be treated as a separate entity from any other of its divisions or
departments.


 


(b)         If information is received by another
division or department of the Agent, it may be treated as confidential to that
division or department and the Agent shall not be deemed to have notice of it.


 


(c)         Notwithstanding any other provision
of any Finance Document to the contrary, neither the Agent nor the Mandated
Lead Arrangers are obliged to disclose to any other person (i) any confidential
information or (ii) any other information if the disclosure would or might in
its reasonable opinion constitute a breach of any law or a breach of a
fiduciary duty.


 


26.13     Relationship with the Lenders


 


(a)         The Agent may treat each Lender as a
Lender, entitled to payments under this Agreement and acting through its
Facility Office unless it has received not less than five Business Days’ prior
notice from that Lender to the contrary in accordance with the terms of this
Agreement.


 


(b)         Each Lender shall supply the Agent
with any information required by the Agent in order to calculate the Mandatory
Cost in accordance with Schedule 4 (Mandatory
Cost Formulae).


 


26.14     Credit appraisal by the Lenders


 


Without affecting
the responsibility of any Obligor for information supplied by it or on its
behalf in connection with any Finance Document, each Lender confirms to the
Agent and the Mandated Lead Arrangers that it has been, and will continue to
be, solely responsible for making its own independent appraisal and
investigation of all risks arising under or in connection with any Finance
Document including but not limited to:


 


(a)            the financial condition, status and
nature of each Group Company;


 


(b)           the legality, validity,
effectiveness, adequacy or enforceability of any Finance Document and any other
agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document;


 


(c)            whether that Lender has recourse, and
the nature and extent of that recourse, against any Party or any of its
respective assets under or in connection with any Finance Document, the
transactions contemplated by the Finance Documents or any other agreement, arrangement
or document entered into, made or executed in anticipation of, under or in
connection with any Finance Document; and


 


(d)           the adequacy, accuracy and/or
completeness of the Information Package and any other information provided by
the Agent, any Party or by any other person under or in connection with any
Finance Document, the transactions contemplated by the Finance 


 


65





















 


Documents or any
other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document.


 


26.15     Reference Banks


 


If a Reference Bank
(or, if a Reference Bank is not a Lender, the Lender of which it is an
Affiliate) ceases to be a Lender, the Agent shall (in consultation with the
Company) appoint another Lender or an Affiliate of a Lender to replace that
Reference Bank.


 


26.16     Agent to hold original documents


 


The Agent shall
hold one of each of the complete originals of this Agreement and any Transfer
Certificate at an address outside of Austria for the benefit of the Finance
Parties and each copy shall be clearly marked “Agent’s Copy”.


 


26.17     Representation by Original Lenders


 


The Original
Lenders confirm, for the benefit of the other Original Lenders, on the date of
this Agreement that they are each Swiss Qualifying Lenders.


 


27.         CONDUCT OF BUSINESS BY THE FINANCE PARTIES


 


No provision of
this Agreement will:


 


(a)            interfere with the right of any
Finance Party to arrange its affairs (tax or otherwise) in whatever manner it
thinks fit;


 


(b)           oblige any Finance Party to
investigate or claim any credit, relief, remission or repayment available to it
or the extent, order and manner of any claim; or


 


(c)            oblige any Finance Party to disclose
any information relating to its affairs (tax or otherwise) or any computations
in respect of Tax.


 


28.         SHARING AMONG THE LENDERS


 


28.1       Payments to Lenders


 


If a Lender (a “Recovering Lender”) receives or recovers
any amount from an Obligor other than in accordance with Clause 29 (Payment mechanics) and applies that amount
to a payment due under the Finance Documents then:


 


(a)            the Recovering Lender shall, within
three Business Days, notify details of the receipt or recovery to the Agent;


 


(b)           the Agent shall determine whether the
receipt or recovery is in excess of the amount the Recovering Lender would have
been paid had the receipt or recovery been received or made by the Agent and
distributed in accordance with Clause 29 (Payment
mechanics), without taking account of any Tax which would be imposed
on the Agent in relation to the receipt, recovery or distribution; and


 


(c)            the Recovering Lender shall, within
three Business Days of demand by the Agent, pay to the Agent an amount (the “Sharing Payment”) equal to such receipt or
recovery less any amount which the Agent determines may be retained by the
Recovering Lender as its share of any payment to be made, in accordance with
Clause 29.5 (Partial payments).


 


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28.2       Redistribution of payments


 


The Agent shall
treat the Sharing Payment as if it had been paid by the relevant Obligor and
distribute it between the Finance Parties (other than the Recovering Lender) in
accordance with Clause 29.5 (Partial
payments).


 


28.3       Recovering Lender’s rights


 


(a)         On a distribution by the Agent under
Clause 28.2 (Redistribution of payments),
the Recovering Lender will be subrogated to the rights of the Finance Parties
which have shared in the redistribution.


 


(b)         If and to the extent that the
Recovering Lender is not able to rely on its rights under paragraph (a) above,
the relevant Obligor shall be liable to the Recovering Lender for a debt equal
to the Sharing Payment which is immediately due and payable.


 


28.4       Reversal of redistribution


 


If any part of the
Sharing Payment received or recovered by a Recovering Lender becomes repayable
and is repaid by that Recovering Lender, then:


 


(a)            each Lender which has received a
share of the relevant Sharing Payment pursuant to Clause 28.2 (Redistribution of payments) shall, upon
request of the Agent, pay to the Agent for account of that Recovering Lender an
amount equal to its share of the Sharing Payment (together with an amount as is
necessary to reimburse that Recovering Lender for its proportion of any
interest on the Sharing Payment which that Recovering Lender is required to
pay); and


 


(b)           that Recovering Lender’s rights of
subrogation in respect of any reimbursement shall be cancelled and the relevant
Obligor will be liable to the reimbursing Lender for the amount so reimbursed.


 


28.5       Exceptions


 


(a)         This Clause 28 shall not apply to the
extent that the Recovering Lender would not, after making any payment pursuant
to this Clause, have a valid and enforceable claim against the relevant
Obligor.


 


(b)         A Recovering Lender is not obliged to
share with any other Lender any amount which the Recovering Lender has received
or recovered as a result of taking legal or arbitration proceedings, if:


 


(i)             it notified the other Lenders of the
legal or arbitration proceedings; and


 


(ii)            the other Lenders had an opportunity
to participate in those legal or arbitration proceedings but did not do so as
soon as reasonably practicable having received notice or did not take separate
legal or arbitration proceedings.


 


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SECTION
11


ADMINISTRATION


 


29.         PAYMENT MECHANICS


 


29.1       Payments


 


(a)         On each date on which an Obligor or a
Lender is required to make a payment under a Finance Document, that Obligor or
Lender shall make the same available to the Agent (unless a contrary indication
appears in a Finance Document) for value on the due date at the time and in
such funds specified by the Agent as being customary at the time for settlement
of transactions in the relevant currency in the place of payment.


 


(b)         Payment shall be made to such account
in the principal financial centre of the country of that currency (or, in
relation to euro, in a principal financial centre in a Participating Member
State or London) but, in no event, in Austria, with such bank as the Agent
specifies.


 


(c)         Any payment made by or to Sappi
Papier Holding GmbH or any other Obligor under or in connection with a Finance
Document shall be made from or to an account outside of Austria.


 


(d)         Any payment made by a Finance Party
to another Finance Party under or in connection with a Finance Document shall
be made from or to an account outside of Austria.


 


29.2       Distributions by the Agent


 


Each payment
received by the Agent under the Finance Documents for another Party shall,
subject to Clause 29.3 (Distributions to an
Obligor) and Clause 29.4 (Clawback)
be made available by the Agent as soon as practicable after receipt to the
Party entitled to receive payment in accordance with this Agreement (in the
case of a Lender, for the account of its Facility Office), to such account as
that Party may notify to the Agent in accordance with paragraphs (c) and (d) of
Clause 29.1 (Payments) by not
less than five Business Days’ notice with a bank in the principal financial
centre of the country of that currency (or, in relation to euro, in the
principal financial centre of a Participating Member State or London).


 


29.3       Distributions to an Obligor


 


The Agent may (with
the consent of the Obligor or in accordance with Clause 30 (Set-off)) apply any amount received by it
for that Obligor in or towards payment (on the date and in the currency and
funds of receipt) of any amount due from that Obligor under the Finance
Documents or in or towards purchase of any amount of any currency to be so
applied.


 


29.4       Clawback


 


(a)         Where a sum is to be paid to the
Agent under the Finance Documents for another Party, the Agent is not obliged
to pay that sum to that other Party (or to enter into or perform any related
exchange contract) until it has been able to establish to its satisfaction that
it has actually received that sum.


 


(b)         If the Agent pays an amount to
another Party and it proves to be the case that the Agent had not actually
received that amount, then the Party to whom that amount (or the proceeds of
any related exchange contract) was paid by the Agent shall on demand refund the
same to the Agent together with interest on that amount from the date of
payment to the date of receipt by the Agent, calculated by the Agent to reflect
its cost of funds.


 


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29.5       Partial payments


 


(a)         If the Agent receives a payment that
is insufficient to discharge all the amounts then due and payable by an Obligor
under the Finance Documents, the Agent shall apply that payment towards the obligations
of that Obligor under the Finance Documents in the following order:


 


(i)             first, in or towards payment pro rata of
any unpaid fees, costs and expenses of the Agent under the Finance Documents;


 


(ii)            second, in or towards payment pro rata of
any accrued interest, fee or commission due but unpaid under this Agreement;


 


(iii)           thirdly, in or towards payment pro rata of
amounts of principal due but unpaid under this Agreement; and


 


(iv)          fourthly, in or towards payment pro rata of
any other sum due but unpaid under the Finance Documents.


 


(b)         The Agent shall, if so directed by
the Majority Lenders, vary the order set out in paragraphs(a)(ii) to (iv)
above.


 


(c)         Paragraphs (a) and (b) above will
override any appropriation made by an Obligor.


 


29.6       No set-off by Obligors


 


All payments to be
made by an Obligor under the Finance Documents shall be calculated and be made
without (and free and clear of any deduction for) set-off or counterclaim.


 


29.7       Business Days


 


(a)         Any payment which is due to be made
on a day that is not a Business Day shall be made on the next Business Day in
the same calendar month (if there is one) or the preceding Business Day (if
there is not).


 


(b)         During any extension of the due date
for payment of any principal or an Unpaid Sum under this Agreement interest is
payable on the principal or Unpaid Sum at the rate payable on the original due
date.


 


29.8       Currency of account


 


(a)         Subject to paragraphs (b) to (e)
below, the Base Currency is the currency of account and payment for any sum due
from an Obligor under any Finance Document.


 


(b)         A repayment of a Loan or Unpaid Sum
or a part of a Loan or Unpaid Sum shall be made in the currency in which that
Loan or Unpaid Sum is denominated on its due date.


 


(c)         Each payment of interest shall be made
in the currency in which the sum in respect of which the interest is payable
was denominated when that interest accrued.


 


(d)         Each payment in respect of costs,
expenses or Taxes shall be made in the currency in which the costs, expenses or
Taxes are incurred.


 


(e)         Any amount expressed to be payable in
a currency other than the Base Currency shall be paid in that other currency.


 


69





















 


29.9       Change of currency


 


(a)         Unless otherwise prohibited by law,
if more than one currency or currency unit are at the same time recognised by
the central bank of any country as the lawful currency of that country, then:


 


(i)             any reference in the Finance
Documents to, and any obligations arising under the Finance Documents in, the
currency of that country shall be translated into, or paid in, the currency or
currency unit of that country designated by the Agent (after consultation with
the Company); and


 


(ii)            any translation from one currency or
currency unit to another shall be at the official rate of exchange recognised
by the central bank for the conversion of that currency or currency unit into
the other, rounded up or down by the Agent (acting reasonably).


 


(b)         If a change in any currency of a
country occurs, this Agreement will, to the extent the Agent (acting reasonably
and after consultation with the Company) specifies to be necessary, be amended
to comply with any generally accepted conventions and market practice in the
Relevant Interbank Market and otherwise to reflect the change in currency.


 


30.         SET-OFF


 


Without prejudice
to the rights of the Finance Parties at law, whilst an Event of Default is
continuing unremedied and unwaived, a Finance Party may set-off any matured
obligation due from an Obligor under the Finance Documents (to the extent
beneficially owned by that Finance Party) against any matured obligation owed
by that Finance Party to that Obligor, regardless of the place of payment,
booking branch or currency of either obligation. If the obligations are in different
currencies, the Finance Party may convert either obligation at a market rate of
exchange in its usual course of business for the purpose of the set-off.


 


31.         NOTICES


 


31.1       Communications in writing


 


Any communication
to be made under or in connection with the Finance Documents shall be made in
writing and, unless otherwise stated, may be made by fax or letter.


 


31.2       Addresses


 


Subject to the
other terms of this Agreement, the address and fax number (and the department
or officer, if any, for whose attention the communication is to be made) of
each Party for any communication or document to be made or delivered under or
in connection with the Finance Documents is:


 


(a)            in the case of the Company, that
identified with its name below;


 


(b)           in the case of each Lender or any
other Original Obligor, that notified in writing to the Agent on or prior to
the date on which it becomes a Party; and


 


(c)            in the case of the Agent, that
identified with its name below,


 


or any substitute
address, fax number or department or officer as the Party may notify to the
Agent (or the Agent may notify to the other Parties, if a change is made by the
Agent) by not less than five Business Days’ notice.


 


70





















 


31.3       Delivery


 


(a)         Any communication or document made or
delivered by one person to another under or in connection with the Finance
Documents will only be effective:


 


(i)             if by way of fax, when received in
legible form; or


 


(ii)            if by way of letter, when it has been
left at the relevant address seven Business Days after being deposited in the
post postage prepaid in an envelope addressed to it at that address,


 


and, if a
particular department or officer is specified as part of its address details
provided under Clause 31.2 (Addresses),
if addressed to that department or officer.


 


(b)         Any communication or document to be
made or delivered to the Agent will be effective only when actually received by
the Agent and then only if it is expressly marked for the attention of the
department or officer identified with the Agent’s signature below (or any
substitute department or officer as the Agent shall specify for this purpose).


 


(c)         All notices from or to an Obligor
shall be sent through the Agent.


 


(d)         Any communication or document made or
delivered to the Company in accordance with this Clause will be deemed to have
been made or delivered to each of the Obligors.


 


31.4       Notification of address and fax
number


 


Promptly upon
receipt of notification of an address and fax number or change of address or
fax number pursuant to Clause 31.2 (Addresses)
or changing its own address or fax number, the Agent shall notify the other
Parties.


 


31.5       Electronic communication


 


(a)         Any communication to be made between
the Parties under or in connection with the Finance Documents (other than (i)
delivery of any Utilisation Request, a certificate in accordance with Clause
20.2 (Compliance Certificate) or
any request for an amendment to or waiver of this Agreement, (ii) in the case
of a Guarantor, delivery of any request for an amendment or waiver of this
Agreement) may be made by electronic mail or other electronic means and the
Parties shall notify each other (in particular, the Agent) in writing of their
electronic mail address and/or any other information required to enable the
sending and receipt of information by that means.


 


(b)         Each Party shall promptly notify each
other Party (in particular, the Agent) of any change to their electronic mail
address or any other such information supplied by them.


 


(c)         Any electronic communication made:


 


(i)             by the Agent to another Party will be
effective only when actually received in readable form by the relevant
recipient and then only if it is addressed in such a manner as that relevant
Lender or Obligor, as the case may be, shall specify to the Agent for this
purpose; and


 


(ii)            by a Lender or any Obligor to the
Agent will be effective only when actually received in readable form by the
Agent and then only if it is addressed in such a manner as the Agent shall
specify to that Lender or, as the case may be, that Obligor for this purpose.


 


71





















 


(d)         Each Party shall notify any affected
Parties promptly upon becoming aware that its electronic mail system or other
electronic means of communication cannot be used due to technical failure (and
that failure is continuing for more than 36 hours). Until that Party has
notified the other affected Parties that the failure has been remedied, all
notices between those Parties shall be sent by fax or letter in accordance with
this Clause 31 (Notices).


 


(e)         In the case of notification of rates
of interest by the Agent pursuant to Clause 9.4 (Notification of rates of interest) and in the case of the
delivery of any document by the Agent pursuant to paragraph (a) of Clause 26.2
(Duties of the Agent), the Agent
may refer a Lender or an Obligor (by fax, letter or e-mail) to a web site and
to the location of the relevant information on such web site in discharge of
such notification or delivery obligation.


 


(f)          Each of the Parties agrees that (i)
it will only send notices and written references to any Finance Document or
other document which relates to any Finance Document (including, without
limitation, details of the Parties, the obligations of any Party under any
Finance Document or other document which relates to any Finance Document and
the amount of any payment due under any Finance Document or other document
which relates to any Finance Document, the “Restricted
Information”) to or from Austria by e-mail which does not contain
the signature of any Party (whether manuscript or electronic) and (ii) to the
extent the Party receives in or sends Restricted Information from Austria, it
will ensure that any e-mail containing any Restricted Information received by
it in or sent by it from Austria is only stored electronically and not printed
in Austria. Except as provided above each Party agrees not to send Restricted
Information to or from Austria in a letter, notice, paper or other form of
written communication.


 


31.6       English language


 


(a)         Any notice given under or in
connection with any Finance Document must be in English.


 


(b)         All other documents provided under or
in connection with any Finance Document must be:


 


(i)             in English; or


 


(ii)            if not in English, and if so required
by the Agent, accompanied by a certified English translation and, in this case,
the English translation will prevail unless the document is a constitutional,
statutory or other official document.


 


32.         CALCULATIONS AND CERTIFICATES


 


32.1       Accounts


 


In any litigation
or arbitration proceedings arising out of or in connection with a Finance
Document the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to
which they relate.


 


32.2       Certificates and determinations


 


Any certification
or determination by a Finance Party of a rate or amount under any Finance
Document is, in the absence of manifest error, conclusive evidence of the
matters to which it relates.


 


32.3       Day count convention


 


Any interest,
commission or fee accruing under a Finance Document will accrue from day to day
and is calculated on the basis of the actual number of days elapsed and a year
of 360 days or, in 


 


72





















 


any case where the
practice in the Relevant Interbank Market differs, in accordance with that
market practice.


 


33.         PARTIAL INVALIDITY


 


If, at any time,
any provision of the Finance Documents is or becomes illegal, invalid or
unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.


 


34.         REMEDIES AND WAIVERS


 


No failure to
exercise, nor any delay in exercising, on the part of any Finance Party, any
right or remedy under the Finance Documents shall operate as a waiver, nor
shall any single or partial exercise of any right or remedy prevent any further
or other exercise or the exercise of any other right or remedy. The rights and
remedies provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.


 


35.         AMENDMENTS AND WAIVERS


 


35.1       Required consents


 


(a)         Subject to Clause 35.2 (Exceptions) any term of the Finance
Documents may be amended or waived only with the consent of the Majority
Lenders and the Obligors and any such amendment or waiver will be binding on
all Parties.


 


(b)         The Agent may effect, on behalf of
any Finance Party, any amendment or waiver permitted by this Clause.


 


35.2       Exceptions


 


(a)         An amendment or waiver that has the
effect of changing or which relates to:


 


(i)             the definition of “Majority Lenders”
in Clause 1.1 (Definitions);


 


(ii)            an extension to the date of payment
of any amount under the Finance Documents;


 


(iii)           a reduction in the Margin, the
commission rate, the amount of, or the currency of any payment of principal,
interest, fees or commission payable;


 


(iv)          an increase in Commitment;


 


(v)           a change to the Borrowers or the
Guarantors;


 


(vi)          any provision which expressly
requires the consent of all the Lenders; or


 


(vii)         Clause 2.2 (Finance Parties’ rights and obligations),
Clause 24 (Changes to the Lenders),
Clause 28 (Sharing among the Lenders)
or this Clause 35,


 


shall not be made
without the prior consent of all the Lenders.


 


(b)         An amendment or waiver which relates
to the rights or obligations of the Agent or the Mandated Lead Arrangers may
not be effected without the consent of the Agent or the Mandated Lead
Arrangers.


 


73





















 


36.         COUNTERPARTS


 


36.1       Multiple counterparts


 


Each Finance
Document may be executed in any number of counterparts, and this has the same
effect as if the signatures on the counterparts were on a single copy of the
Finance Document. This Agreement only becomes effective upon the signature of
the Agent and is deemed to become effective in England upon such signature.


 


36.2       Complete originals


 


There shall only be
two complete originals of the Finance Documents (other than the Fee Letter).
For these purposes “complete” means execution by each relevant Party to such
Finance Document in any number of counterparts.


 


37.         PLACE OF PERFORMANCE


 


37.1       Performance


 


The Parties shall
perform their payment and delivery obligations under or in connection with the
Finance Documents exclusively at the Place of Performance (as defined below),
but in no event at a place in Austria. For the purposes of the above, “Place of Performance” means:


 


(a)            in relation to any payment by an
Obligor or a Finance Party under or in connection with a Finance Document, the
place at which such payment is to be made pursuant to Clause 29.1 (Payments); and


 


(b)           in relation to the delivery of any
document under or in connection with the Agreement, the premises of the Agent
at Paris or any other place outside of Austria as the Agent specifies from time
to time.


 


37.2       Delivery of notices by Agent


 


Notwithstanding
Clause 31 (Notices) and Clause
37.1 (Performance) but subject to
Clause 13.5 (Stamp Taxes) and
Clause 31.5(f) (Electronic communication),
each of the Obligors agrees that any notice or document delivered on it under
or in connection with the Finance Documents shall be sent to an address located
outside of Austria which, unless it notifies the Agent otherwise, shall be 154,
Chaussee de la Hulpe, B-1170 Brussels, (Watermael-Boitsfort), Belgium.


 


74





















 


SECTION
12


GOVERNING LAW AND ENFORCEMENT


 


38.         GOVERNING LAW


 


This Agreement is
governed by English law.


 


39.         ENFORCEMENT


 


39.1       Jurisdiction of English Courts


 


(a)         The courts of England have exclusive
jurisdiction to settle any dispute arising out of or in connection with this
Agreement (including a dispute regarding the existence, validity or termination
of this Agreement) (a “Dispute”).


 


(b)         The Parties agree that the courts of
England are the most appropriate and convenient courts to settle Disputes and
accordingly no Party will argue to the contrary.


 


(c)         This Clause 39.1 is for the benefit
of the Finance Parties only. As a result, no Finance Party shall be prevented
from taking proceedings relating to a Dispute (“Proceedings”) in any other courts with jurisdiction. To the
extent allowed by law, the Finance Parties may take concurrent proceedings in
any number of jurisdictions.


 


39.2       Service of process


 


Without prejudice
to any other mode of service allowed under any relevant law, each Obligor
(other than an Obligor incorporated in England and Wales):


 


(a)            irrevocably appoints Sappi (UK)
Limited, Blackburn Mill, Feniscowles, Blackburn Lancashire BB2 5HX as its agent
for service of process in relation to any proceedings before the English courts
in connection with any Finance Document; and


 


(b)           agrees that failure by a process
agent to notify such Obligor of the process will not invalidate the proceedings
concerned.


 


This
Agreement has been entered into on the date stated at the beginning of this
Agreement.


 


75





















 


SCHEDULE 1


The Original Parties


PART I

The Original Obligors


 


	
  Original
  Borrowers

  	
   

  	
  Registration
  number (or equivalent, if any)

  
	
   

  	
   

  	
   

  
	
  Sappi Papier Holding GmbH

  	
   

  	
  FN167931h

  
	
   

  	
   

  	
   

  
	
  Sappi International S.A.

  	
   

  	
  RPM0449.887.582 (Brussels)

  
	
   

  	
   

  	
   

  
	
  Trenfor Trading AG

  	
   

  	
  CH-020.3.927.008-6

  



 


 


 


	
  Original
  Guarantors

  	
   

  	
  Registration
  number (or equivalent, if any)

  
	
   

  	
   

  	
   

  
	
  Sappi Limited

  	
   

  	
  1936/008963/06

  
	
   

  	
   

  	
   

  
	
  Sappi Papier Holding GmbH

  	
   

  	
  FN167931h

  
	
   

  	
   

  	
   

  
	
  Sappi International S.A.

  	
   

  	
  RPM0449.887.582 (Brussels)

  
	
   

  	
   

  	
   

  
	
  Trenfor Trading AG

  	
   

  	
  CH-020.3.927.008-6

  



 


76





















 


PART II


The Original Lenders


 


	
  Name of Original Lender

  	
   

  	
  Commitment (Euro)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BNP Paribas,
  Belgium Branch

  	
   

  	
  65,333,333.33

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan
  Chase Bank, National Association

  	
   

  	
  65,333,333.33

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Société
  Générale

  	
   

  	
  65,333,333.34

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ABN Amro
  Bank N.V., Belgium Branch

  	
   

  	
  36,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Citibank
  International plc

  	
   

  	
  36,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dresdner
  Bank AG, Niederlassung Luxemburg

  	
   

  	
  36,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DZ Bank AG

  	
   

  	
  36,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  HSBC Bank
  plc

  	
   

  	
  36,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NATEXIS
  Banques Populaires

  	
   

  	
  36,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Baden-Württembergische
  Bank AG

  	
   

  	
  25,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Commerzbank
  AG, Brussels Branch

  	
   

  	
  25,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fortis Bank
  S.A./N.V.

  	
   

  	
  25,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  KBC Bank
  N.V.

  	
   

  	
  25,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mizuho
  Corporate Bank, Ltd

  	
   

  	
  25,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Wachovia
  Bank, National Association, London Branch

  	
   

  	
  25,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WestLB AG

  	
   

  	
  25,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Banca Monte
  Paschi Belgio S.A.

  	
   

  	
  13,000,000.00

  	
   

  



 


77





















 


SCHEDULE 2


Conditions Precedent


PART I

Conditions Precedent to Initial Utilisation


 


1.           Obligors


 


(a)         A copy of the constitutional
documents of each Original Obligor (including, in the case of a Swiss Original
Obligor, a certified copy of the articles of association and a certified
extract from the commercial register, dated not earlier than seven days prior
to the date of this Agreement).


 


(b)         A copy of a resolution of the board
of directors of each Original Obligor:


 


(i)                                      approving the terms of, and the
transactions contemplated by, the Finance Documents and resolving that it
execute the Finance Documents;


 


(ii)                                   authorising a specified person or
persons to execute the Finance Documents on its behalf; and


 


(iii)                                authorising a specified person or
persons, on its behalf, to sign and/or despatch all documents and notices
(including, if relevant, any Utilisation Request) to be signed and/or
despatched by it under or in connection with the Finance Documents.


 


(c)         A copy of a resolution signed by all
the holders of the issued shares in each Original Guarantor (except Sappi
Limited and Sappi International S.A.), approving the terms of, and the
transactions contemplated by, the Finance Documents to which the Original
Guarantor is a party.


 


(d)         A copy of a resolution of the
supervisory board (Aufsichtsrat)
or advisory board (Beirat) of
each Obligor incorporated in Austria approving the terms of, and transactions
contemplated by, the Finance Documents to which it is a party and resolving
that it executes the Finance Documents to which it is a party.


 


(e)         A copy of a resolution of the special
shareholders’ meeting of Sappi International S.A. approving any change of
control clause provided by any Finance Document (including Clause 8.2 (Change of Control) of this Agreement)
according to Article 556 of the Belgian Companies Code.


 


(f)          A specimen of the signature of each
person authorised by the resolution referred to in paragraph (b) above.


 


(g)         A certificate of the Company (signed
by a director) confirming that borrowing the Total Commitments would not cause
any borrowing, guaranteeing or similar limit binding on any Obligor to be
exceeded.


 


(h)         A certificate of an authorised
signatory of the relevant Original Obligor certifying that each copy document
relating to it specified in this Part I Schedule 2 is correct, complete and in
full force and effect as at a date no earlier than the date of this Agreement.


 


78





















 


2.           Legal opinions


 


(a)         A legal opinion of Linklaters, legal
advisers to the Mandated Lead Arrangers and the Agent in England, substantially
in the form distributed to the Original Lenders prior to signing this
Agreement.


 


(b)         A legal opinion of Linklaters, legal
advisers to the Mandated Lead Arrangers and the Agent in Belgium, substantially
in the form distributed to the Original Lenders prior to signing this
Agreement.


 


(c)         A legal opinion of Schönherr
Rechtsanwälte, legal advisers to the Mandated Lead Arrangers and the Agent in
Austria, substantially in the form distributed to the Original Lenders prior to
signing this Agreement.


 


(d)         A legal opinion of Bowman Gilfillan
Inc., legal advisers to the Mandated Lead Arrangers and the Agent in South
Africa, substantially in the form distributed to the Original Lenders prior to
signing this Agreement.


 


(e)         A legal opinion of Niederer Kraft
& Frey, legal advisers to the Mandated Lead Arrangers and the Agent in
Switzerland, substantially in the form distributed to the Original Lenders
prior to signing this Agreement.


 


(f)          Legal opinions of each of the legal
advisers to the Original Obligors in Austria, Belgium, Switzerland and South
Africa in relation to the Original Obligors incorporated in such jurisdictions
substantially in the form distributed to the Original Lenders prior to signing
this Agreement.


 


3.           Other documents and evidence


 


(a)         Evidence that the process agent
referred to in Clause 39.2 (Service of
process), if not an Original Obligor has accepted its appointment.


 


(b)         A copy of any other Authorisation or
other document, opinion or assurance which the Agent considers to be necessary
or desirable (if it has notified the Company accordingly) in connection with
the entry into and performance of the transactions contemplated by any Finance
Document or for the validity and enforceability of any Finance Document.


 


(c)         The Original Financial Statements.


 


(d)         Evidence that the fees, costs and
expenses then due from the Company pursuant to Clause 12 (Fees) and Clause 17 (Costs and Expenses) have been paid or will
be paid within five Business Days from the date of this Agreement.


 


(e)         A certificate from the Company duly
executed by an authorised signatory setting out the name and relevant details
of each Material Subsidiary.


 


(f)          Evidence of exchange control approval
of the Exchange Control Department of the South African Reserve Bank in
relation to the guarantee given by the Company and approval for the Company to
fulfil all of its obligations under this Agreement.


 


(g)         Evidence that the Existing Facility
has been, or will be, cancelled and have been or will be prepaid on the first
Utilisation Date under this Agreement.


 


79





















 


PART II


Conditions Precedent
Required to be

Delivered by an Additional Obligor


 


1.           An Accession Letter, duly executed by
the Additional Obligor and the Company.


 


2.           A copy of the constitutional
documents of the Additional Obligor.


 


3.           A copy of a resolution of the board
of directors of the Additional Obligor:


 


(a)            approving the terms of, and the transactions
contemplated by, the Accession Letter and the Finance Documents and resolving
that it execute the Accession Letter;


 


(b)           authorising a specified person or
persons to execute the Accession Letter on its behalf; and


 


(c)            authorising a specified person or
persons, on its behalf, to sign and/or despatch all other documents and notices
(including, in relation to an Additional Borrower, any Utilisation Request) to
be signed and/or despatched by it under or in connection with the Finance
Documents.


 


4.           A specimen of the signature of each
person authorised by the resolution referred to in paragraph 3 above.


 


5.           If the Additional Guarantor is
incorporated in England and Wales, or if so required by the Agent, a copy of a
resolution signed by all the holders of the issued shares of the Additional
Guarantor, approving the terms of, and the transactions contemplated by, the
Finance Documents to which the Additional Guarantor is a party.


 


6.           A certificate of the Additional
Obligor (signed by a director) confirming that borrowing or guaranteeing, as
appropriate, the Total Commitments would not cause any borrowing, guaranteeing
or similar limit binding on it to be exceeded.


 


7.           A certificate of an authorised
signatory of the Additional Obligor certifying that each copy document listed
in this Part II of Schedule 2 is correct, complete and in full force and effect
as at a date no earlier than the date of the Accession Letter.


 


8.           A copy of any other Authorisation or
other document, opinion or assurance which the Agent considers to be necessary
or desirable in connection with the entry into and performance of the
transactions contemplated by the Accession Letter or for the validity and
enforceability of any Finance Document.


 


9.           If available, the latest audited
financial statements of the Additional Obligor.


 


10.         A legal opinion of Linklaters, legal
advisers to the Mandated Lead Arranger and the Agent in England.


 


11.         If the Additional Obligor is
incorporated in a jurisdiction other than England and Wales, a legal opinion of
the legal advisers to the Mandated Lead Arranger and the Agent in the
jurisdiction in which the Additional Obligor is incorporated.


 


80





















 


12.         Legal opinions of each of the
relevant legal advisers to the Additional Obligor in the jurisdiction in which
the Additional Obligor is incorporated.


 


13.         If the proposed Additional Obligor is
incorporated in a jurisdiction other than England and Wales, evidence that the
process agent specified in Clause 38.2 (Service
of process), if not an Obligor, has accepted its appointment in
relation to the proposed Additional Obligor.


 


81





















 


SCHEDULE 3


Utilisation Request


 


 


From:      [                   ]


 


To:          BNP Paribas as Agent


 


Dated:


 


Dear Sirs


 


Sappi Limited - Euro 600,000,000 Credit Agreement

dated [                 ]
2005 (the “Credit Agreement”)


 


We wish to borrow a
Loan on the following terms:


 


	
  Proposed Utilisation Date:

  	
   

  	
  [                 ]
  (or, if that is not a Business Day, the next Business Day)

  
	
   

  	
   

  	
   

  
	
  Currency of Loan:

  	
   

  	
  [                 ]

  
	
   

  	
   

  	
   

  
	
  Amount:

  	
   

  	
  [                 ]
  or, if less, the Available Facility

  
	
   

  	
   

  	
   

  
	
  Interest Period:

  	
   

  	
  [                 ]

  



 


1.           We confirm that each condition
specified in Clause 4.2 (Further conditions
precedent) of the Credit Agreement referred to above is satisfied on
the date of this Utilisation Request.


 


[The proceeds of
this Loan should be credited to [account
[NB Not an account held
in Austria]].].


 


2.           This Utilisation Request is
irrevocable and signed at [place
outside Austria].


 


3.           The Place of Performance shall be
determined according to Clause 37 (Place of
performance), but shall, in any case, be outside of Austria. No
original or certified copy hereof shall be brought into Austria.


 


BRINGING THIS
DOCUMENT OR ANY CERTIFIED COPY OF THIS DOCUMENT INTO THE REPUBLIC OF AUSTRIA AS
WELL AS ANY WRITTEN CONFIRMATION OR WRITTEN REFERENCE TO THIS DOCUMENT MAY
CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY TAX. PLEASE READ CLAUSES 13.5
(STAMP TAXES), 29.1 (PAYMENTS TO THE AGENT), 31 (NOTICES) AND 37 (PLACE OF
PERFORMANCE) OF THE CREDIT AGREEMENT IN CONNECTION WITH THE FOREGOING.


 


	
   

  	
  Yours faithfully

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  authorised
  signatory for

  	
   

  



[•]


 


82





















 


SCHEDULE 4


Mandatory Cost Formulae


 


1.           The Mandatory Cost is an addition to
the interest rate to compensate Lenders for the cost of compliance with (a) the
requirements of the Bank of England and/or the Financial Services Authority
(or, in either case, any other authority which replaces all or any of its
functions) or (b) the requirements of the European Central Bank.


 


2.           On the first day of each Interest
Period (or as soon as possible thereafter) the Agent shall calculate, as a
percentage rate, a rate (the “Additional Cost
Rate”) for each Lender, in accordance with the paragraphs set out
below. The Mandatory Cost will be calculated by the Agent as a weighted average
of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage
participation of each Lender in the relevant Loan) and will be expressed as a
percentage rate per annum.


 


3.           The Additional Cost Rate for any
Lender lending from a Facility Office in a Participating Member State will be
the percentage notified by that Lender to the Agent.  This percentage will be certified by that
Lender in its notice to the Agent to be its reasonable determination of the
cost (expressed as a percentage of that Lender’s participation in all Loans
made from that Facility Office) of complying with the minimum reserve requirements
of the European Central Bank in respect of loans made from that Facility
Office.


 


4.           The Additional Cost Rate for any
Lender lending from a Facility Office in the United Kingdom will be calculated
by the Agent as follows:


 


(a)            in relation to a sterling Loan:


 


	
  AB + C(B – D) +
  E×0.01

  	
   

  	
  per cent. per
  annum

  
	
  100–(A+C)

  	
   

  



 


(b)           in relation to a Loan in any currency
other than sterling:


 


	
  E×0.01

  	
   

  	
  per cent. per
  annum.

  
	
  300

  	
   

  



 


Where:


 


	
  A

  	
   

  	
  is the percentage of Eligible Liabilities (assuming
  these to be in excess of any stated minimum) which that Lender is from time
  to time required to maintain as an interest free cash ratio deposit with the
  Bank of England to comply with cash ratio requirements.

  
	
   

  	
   

  	
   

  
	
  B

  	
   

  	
  is the percentage rate of interest (excluding the
  Margin and the Mandatory Cost and, if the Loan is an Unpaid Sum, the
  additional rate of interest specified in paragraph (a) of Clause 9.3 (Default interest)) payable for the
  relevant Interest Period on the Loan.

  
	
   

  	
   

  	
   

  
	
  C

  	
   

  	
  is the percentage (if any) of Eligible Liabilities
  which that Lender is required from time to time to maintain as interest
  bearing Special Deposits with the Bank of England.

  
	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  is the percentage rate per annum payable by the Bank of
  England to the Agent on interest bearing Special Deposits.

  



 


83





















 


	
  E

  	
   

  	
  is designed to compensate Lenders for amounts payable
  under the Fees Rules and is calculated by the Agent as being the average of
  the most recent rates of charge supplied by the Reference Banks to the Agent
  pursuant to paragraph 7 below and expressed in pounds, per £1,000,000.

  



 


5.           For the purposes of this Schedule:


 


(a)            “Eligible
Liabilities” and “Special Deposits”
have the meanings given to them from time to time under or pursuant to the Bank
of England Act 1998 or (as may be appropriate) by the Bank of England;


 


(b)           “Fees
Rules” means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force from time
to time in respect of the payment of fees for the acceptance of deposits;


 


(c)            “Fee
Tariffs” means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated
fee required pursuant to the Fees Rules but taking into account any applicable
discount rate); and


 


(d)           “Tariff
Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.


 


6.           In application of the above formulae,
A, B, C and D will be included in the formulae as percentages (i.e. 5 per cent.
will be included in the formula as 5 and not as 0.05). A negative result
obtained by subtracting D from B shall be taken as zero. The resulting figures
shall be rounded to four decimal places.


 


7.           If requested by the Agent, each
Reference Bank shall, as soon as practicable after publication by the Financial
Services Authority, supply to the Agent, the rate of charge payable by that
Reference Bank to the Financial Services Authority pursuant to the Fees Rules
in respect of the relevant financial year of the Financial Services Authority
(calculated for this purpose by that Reference Bank as being the average of the
Fee Tariffs applicable to that Reference Bank for that financial year) and
expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.


 


8.           Each Lender shall supply any
information required by the Agent for the purpose of calculating its Additional
Cost Rate.   In particular, but without
limitation, each Lender shall supply the following information in writing on or
prior to the date on which it becomes a Lender:


 


(a)            the jurisdiction of its Facility
Office; and


 


(b)           any other information that the Agent
may reasonably require for such purpose.


 


Each Lender shall
promptly notify the Agent in writing of any change to the information provided
by it pursuant to this paragraph.


 


9.           The percentages of each Lender for
the purpose of A and C above and the rates of charge of each Reference Bank for
the purpose of E above shall be determined by the Agent based upon the
information supplied to it pursuant to paragraphs 7 and 8 above and on the
assumption that, unless a Lender notifies the Agent to the contrary, each
Lender’s obligations in relation to cash 


 


84





















 


ratio
deposits and Special Deposits are the same as those of a typical bank from its
jurisdiction of incorporation with a Facility Office in the same jurisdiction
as its Facility Office.


 


10.         The Agent shall have no liability to
any person if such determination results in an Additional Cost Rate which over
or under compensates any Lender and shall be entitled to assume that the
information provided by any Lender or Reference Bank pursuant to paragraphs 3,
7 and 8 above is true and correct in all respects.


 


11.         The Agent shall distribute the
additional amounts received as a result of the Mandatory Cost to the Lenders on
the basis of the Additional Cost Rate for each Lender based on the information
provided by each Lender and each Reference Bank pursuant to paragraphs 3, 7 and
8 above.


 


12.         Any determination by the Agent
pursuant to this Schedule in relation to a formula, the Mandatory Cost, an
Additional Cost Rate or any amount payable to a Lender shall, in the absence of
manifest error, be conclusive and binding on all Parties.


 


13.         The Agent may from time to time,
after consultation with the Company and the Lenders, determine and notify to
all Parties any amendments which are required to be made to this Schedule in
order to comply with any change in law, regulation or any requirements from time
to time imposed by the Bank of England, the Financial Services Authority or the
European Central Bank (or, in any case, any other authority which replaces all
or any of its functions) and any such determination shall, in the absence of
manifest error, be conclusive and binding on all Parties.


 


85





















 


SCHEDULE 5


Form of Transfer
Certificate


 


	
  To:

  	
   

  	
  BNP Paribas as
  Agent

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  [The Existing Lender] (the “Existing Lender”) and [The New Lender] (the “New Lender”)

  



 


Dated:


 


Sappi Limited - Euro 600,000,000 Credit Agreement

dated [                 ]
2005 (the “Credit Agreement”)


 


1.           We refer to Clause 24.5 (Procedure for transfer) of the Credit
Agreement:


 


(a)            The Existing Lender and the New
Lender agree to the Existing Lender and the New Lender transferring all or part
of the Existing Lender’s Commitment, rights and obligations referred to in the
Schedule in accordance with Clause 24.5 (Procedure
for transfer) of the Credit Agreement.


 


(b)           The proposed Transfer Date is [                 ].


 


(c)            The Facility Office and address, fax
number and attention details for notices of the New Lender for the purposes of
Clause 31.2 (Addresses) of the
Credit Agreement are set out in the Schedule.


 


2.           The New Lender expressly acknowledges
the limitations on the Existing Lender’s obligations set out in paragraph (c)
of Clause 24.4 (Limitation of responsibility
of Existing Lenders) of the Credit Agreement.


 


3.           This Transfer Certificate is governed
by English law.


 


4.           This Transfer Certificate is signed
at [place outside of Austria].


 


5.           The New Lender confirms that it is [a
Swiss Qualifying Lender (as defined in Clause 1.1 of the Agreement) in
accordance with the relevant explanatory note of the Swiss Federal Tax
Administration]/[not a Swiss Qualifying Lender (as defined in Clause 1.1 of the
Agreement) and the consent of the Company has been obtained if such consent is
required pursuant to the provisions of the Finance Documents.]


 


6.           The place of performance of the
rights and obligations of the Existing Lender and the New Lender hereunder
shall be:


 


(i)             in relation to any payment by the New
Lender to the Existing Lender (or vice versa), the place at which payment to
the receiving Lender is to be made pursuant to Clause 29.1 (Payments); and


 


(ii)            in relation to any other obligations
and liabilities of the Existing Lender and the New Lender under or in
connection with this Transfer Certificate, the premises of the Agent at Paris
or any other place outside of Austria as the Agent specifies from time to time.


 


BRINGING THIS
DOCUMENT OR ANY CERTIFIED COPY OF THIS DOCUMENT INTO THE REPUBLIC OF AUSTRIA AS
WELL AS ANY WRITTEN CONFIRMATION OR WRITTEN REFERENCE TO THIS DOCUMENT MAY
CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY TAX. PLEASE 


 


86





















 


READ CLAUSES 13.5
(STAMP TAXES), 29.1 (PAYMENTS), 31 (NOTICES) AND 37 (PLACE OF PERFORMANCE) OF
THE CREDIT AGREEMENT IN CONNECTION WITH THE FOREGOING.


 


THE SCHEDULE


 


Commitment/rights and obligations to be transferred


 


[insert relevant details]


 


[Facility Office address, fax number and attention details
for notices and account details for payments,


 


[NB must be outside
Austria]]


 


 


	
  [Existing Lender]

  	
   

  	
  [New Lender]

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  



 


87





















 


SCHEDULE 6


Form of Accession Letter


 


 


To:          BNP Paribas as Agent


 


From:      [Subsidiary] and Sappi Limited


 


Dated:


 


Dear Sirs


 


Sappi
Limited – Euro 600,000,000 Facility Agreement

dated [                 ] 2005 (the “Agreement”)


 


1.           We refer to the Agreement. This is an
Accession Letter. Terms defined in the Agreement have the same meaning in this
Accession Letter unless given a different meaning in this Accession Letter.


 


2.           [Subsidiary]
agrees to become an Additional [Borrower]/[Guarantor] and to be bound by the
terms of the Agreement as an Additional [Borrower]/[Guarantor] pursuant to
[Clause 25.2 (Additional Borrowers)]/[Clause
25.4 (Additional Guarantors)] of
the Agreement.  [Subsidiary] is a company duly incorporated
under the laws of [name of relevant
jurisdiction].


 


3.           [Subsidiary’s]
administrative details are as follows:


 


Address:


 


Fax No:


 


Attention:


 


4.           This Accession Letter is signed at [place outside of Austria].


 


5.           This Accession Letter is governed by
English law.


 


[This Guarantor Accession
Letter is entered into by deed.]


 


	
  Sappi Limited

  	
   

  	
  [Subsidiary]

  



 


 


BRINGING THIS
DOCUMENT OR ANY CERTIFIED COPY OF THIS DOCUMENT INTO THE REPUBLIC OF AUSTRIA AS
WELL AS ANY WRITTEN CONFIRMATION OR WRITTEN REFERENCE TO THIS DOCUMENT MAY
CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY TAX. PLEASE READ CLAUSES 13.5
(STAMP TAXES), 29.1 (PAYMENTS), 31 (NOTICES) AND 37 (PLACE OF PERFORMANCE) OF
THE CREDIT AGREEMENT IN CONNECTION WITH THE FOREGOING.


 


88





















 


SCHEDULE 7


Form of Resignation Letter


 


 


To:          BNP Paribas as Agent


 


From:      [resigning Obligor] and Sappi Limited


 


Dated:


 


Dear Sirs


 


Sappi
Limited – Euro 600,000,000 Facility Agreement

dated [                 ] 2005 (the “Agreement”)


 


1.           We refer to the Agreement. This is a
Resignation Letter. Terms defined in the Agreement have the same meaning in
this Resignation Letter unless given a different meaning in this Resignation
Letter.


 


2.           Pursuant to [Clause 25.3 (Resignation of a Borrower)]/[Clause 25.6 (Resignation of a Guarantor)], we request
that [resigning Obligor] be
released from its obligations as a [Borrower]/[Guarantor] under the Agreement.


 


3.           We confirm that:


 


(a)            no Default is continuing or would
result from the acceptance of this request; and


 


(b)           [                 ]


 


4.           This Resignation Letter is signed at
[place outside of Austria].


 


5.           This Resignation Letter is governed
by English law.


 


	
  Sappi Limited

  	
   

  	
  [Subsidiary]

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  



 


BRINGING THIS
DOCUMENT OR ANY CERTIFIED COPY OF THIS DOCUMENT INTO THE REPUBLIC OF AUSTRIA AS
WELL AS ANY WRITTEN CONFIRMATION OR WRITTEN REFERENCE TO THIS DOCUMENT MAY
CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY TAX. PLEASE READ CLAUSES 13.5
(STAMP TAXES), 29.1 (PAYMENTS), 31 (NOTICES) AND 37 (PLACE OF PERFORMANCE) OF
THE CREDIT AGREEMENT IN CONNECTION WITH THE FOREGOING.


 


89





















 


SCHEDULE 8


Form of Compliance
Certificate


 


 


	
  To:

  	
   

  	
  BNP Paribas as
  Agent

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Sappi Limited

  



 


Dated:


 


Dear Sirs


 


Sappi Limited - Euro 600,000,000 Credit Agreement

dated [                 ]
2005 (the “Credit Agreement”)


 


1.           We refer to the Credit Agreement.
This is a Compliance Certificate.


 


2.           We confirm that:


 


(i)             in respect of the Quarter ending on [                 ]
and each of the three immediately preceding Quarters the mean average of EBITDA
was [                 ]
and the mean average of Consolidated Net Interest Expense was [                 ].
Therefore EBITDA was [                 ]
times Consolidated Net Interest Expense and the covenant contained in
sub-clause (a) of Clause 21.1 (Financial
covenants) [has/has not] been complied with;


 


(ii)            in respect of the Quarter ending on [                 ]
and each of the seven immediately preceding Quarters the mean average of EBITDA
was [                   ]
and the mean average of Consolidated Net Interest Expense was [                   ].
Therefore EBITDA was [                   ]
times Consolidated Net Interest Expense and the covenant contained in
sub-clause (b) of Clause 21.1 (Financial
covenants) [has/has not] been complied with;


 


(iii)           in respect of the Quarter ending on [                   ]
Net Debt was [                   ]
and Capitalisation for such Quarter was [                   ]
as at the end of that Quarter.  Therefore Net Debt at that time
[was/was not] equal to or in excess of [                   ]
and the covenant contained in sub-clause (c) of Clause 21.1 (Financial covenants) [has/has not] been
complied with; and


 


(iv)          in respect of the Quarter ending on [                   ]
Sappi Manufacturing Net Debt was [                   ]
and Sappi Manufacturing Capitalisation for such Quarter was [                   ]
as at the end of that Quarter.  Therefore Net Debt at that time
[was/was not][ equal to or in excess of [                   ]
and the covenant in sub-clause (d) of Clause 21.1 (Financial covenants) [has/has not] been complied with.


 


3.           [As at end of our financial year, the
Material Subsidiaries are as follows:


 


[                   ]


 


90





















 


We confirm that the
above companies account for at least 90 per cent. of the Consolidated Earnings
and at least 90 per cent. of the Consolidated Assets (as such terms are defined
in the definition of Material Subsidiary set out in the Credit

Agreement).](1)


 


4.           [We confirm that no Default is
continuing.](2)


 


5.           This Compliance Certificate is signed
[place outside of
Austria].


 


 


	
  Signed:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
  for and on behalf
  of

  
	
   

  	
   

  	
  Sappi
  Limited

  



 


BRINGING THIS
DOCUMENT OR ANY CERTIFIED COPY OF THIS DOCUMENT INTO THE REPUBLIC OF AUSTRIA AS
WELL AS ANY WRITTEN CONFIRMATION OR WRITTEN REFERENCE TO THIS DOCUMENT MAY
CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY TAX. PLEASE READ CLAUSES 13.5
(STAMP TAXES), 29.1 (PAYMENTS), 31 (NOTICES) AND 37 (PLACE OF PERFORMANCE) OF
THE CREDIT AGREEMENT IN CONNECTION WITH THE FOREGOING.


 










(1)   Paragraph 3 only included in
the Annual Compliance Certificate, as such term is defined in the Credit
Agreement.


 


(2)   If this statement cannot be
made, the certificate should identify any Default that is continuing and the
steps, if any, being taken to remedy it.


 


91





















 


SCHEDULE 9


Existing Security (as at 30
September 2004)


 


	
  Name of Group Company

  	
   

  	
  Security

  	
   

  	
  Total Principal Amount of

  Indebtedness Secured

  	
   

  
	
  Sappi
  Fine Paper North America

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Town of Skowhegan/Michigan 

  strategic fund/City of Westbrook

  	
   

  	
  Land and
  Buildings

  	
   

  	
  $

  	
  106,610,000

  	
   

  
	
  Sappi
  Germany

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Allianz AG

  	
   

  	
  Plant and
  Equipment

  	
   

  	
  euro

  	
  4,719,000

  	
   

  
	
  Sappi
  Belgium

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rabobank

  	
   

  	
  Mortgage

  	
   

  	
  euro

  	
  2,629,000

  	
   

  
	
  KBC Bank

  	
   

  	
  Leased
  Assets

  	
   

  	
  euro

  	
  1,343,000

  	
   

  
	
  Sappi
  Manufacturing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First National Bank

  	
   

  	
  Plant and
  equipment

  	
   

  	
  ZAR 

  	
  252,000,000

  	
   

  
	
  Standard Bank

  	
   

  	
  Plant and
  equipment

  	
   

  	
  ZAR 

  	
  196,000,000

  	
   

  
	
  Rand Merchant Bank

  	
   

  	
  Plant and
  equipment

  	
   

  	
  ZAR 

  	
  174,000,000

  	
   

  
	
  Nedbank

  	
   

  	
  Plant and
  equipment

  	
   

  	
  ZAR 

  	
  61,000,000

  	
   

  
								



 


92





















 


SCHEDULE 10


Existing Subsidiary
Indebtedness (as at 30 September 2004)


 




	
  Name of Group Company

  	
   

  	
  Total Principal Amount of

  Indebtedness Secured

  	
   

  
	
  Sappi
  Fine Paper North America

  	
   

  	
   

  	
   

  
	
  Town of Skowhegan/Michigan 

  strategic fund/City of Westbrook

  	
   

  	
  $

  	
  106,610,000

  	
   

  
	
  Sappi
  Germany

  	
   

  	
   

  	
   

  
	
  Allianz AG

  	
   

  	
  euro

  	
  4,719,000

  	
   

  
	
  Sappi
  Austria

  	
   

  	
   

  	
   

  	
   

  
	
  OeBB/WVBD

  	
   

  	
  euro

  	
  7,129,000

  	
   

  
	
  Sappi
  Belgium

  	
   

  	
   

  	
   

  	
   

  
	
  RZB

  	
   

  	
  euro

  	
  14,800,000

  	
   

  
	
  Rabobank

  	
   

  	
  euro

  	
  2,629,000

  	
   

  
	
  KBC Bank

  	
   

  	
  euro

  	
  1,343,000

  	
   

  
						






 


93





















 


SCHEDULE 11


Timetables


 


	
   

  	
   

  	
  Loans in euro

  	
   

  	
  Loans in sterling

  	
   

  	
  Loans in other

  currencies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Request for Optional Currency received by the
  Agent (Clause 4.3 (Conditions relating to
  Optional Currencies))

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  U-5 11.00am

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Approval from Lenders for an Optional Currency, if
  required (Clause 4.3 (Conditions relating
  to Optional Currencies))

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  U-4 12.00 noon

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Agent notifies the Company if a currency is
  approved as an Optional Currency in accordance with Clause 4.3 (Conditions relating to Optional Currencies)

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  U-4 3.00 pm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delivery of a duly completed Utilisation Request
  (Clause 5.1 (Delivery of a Utilisation
  Request))

  	
   

  	
  U-3 11.00 am

  	
   

  	
  U-1 11.00 am

  	
   

  	
  U-3 11.00 am

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Agent determines (in relation to a Utilisation)
  the Base Currency Amount of the Loan, if required under Clause 5.4 (Lenders’ participation)

  	
   

  	
   

  	
   

  	
  U-1 11.00 am

  	
   

  	
  U-3 11.00 am

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Agent receives a notification from a Lender under
  Clause 6.2 (Unavailability of a currency)

  	
   

  	
  U-2 11.00 am

  	
   

  	
  U 11.00 am

  	
   

  	
  U-2 11.00 am

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Agent gives notice in accordance with Clause 6.2 (Unavailability of a currency)

  	
   

  	
  U-2 11.00 am

  	
   

  	
  U 11.00 am

  	
   

  	
  U-2 11.00 am

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LIBOR or EURIBOR is fixed

  	
   

  	
  Quotation Day as of 11:00 am Brussels time

  	
   

  	
  Quotation Day as of 11:00 am London time

  	
   

  	
  Quotation Day as of

  11:00 am

  



 


94





















 


	
  “U”

  	
   

  	
  =

  	
   

  	
  date of
  utilisation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “U-X”

  	
   

  	
  =

  	
   

  	
  X Business Days
  prior to date of utilisation

  



 


95





















 


SIGNATURES


 


The
Company


 


SAPPI
LIMITED


 


	
  By:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  48 Amershoff St, Braamfontein, Johannesburg, Republic
  of South Africa

  
	
   

  	
   

  
	
  Fax:

  	
  +27 11 4031 493

  
	
   

  	
   

  
	
  Attention:

  	
  Group Secretary

  



 


 


The
Original Borrowers


 


SAPPI
PAPIER HOLDING GmbH


 


	
  By:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  154 Chaussée de
  la Hulpe, B-1170 Brussels, (Watermael-Boitsfort), Belgium

  
	
   

  	
   

  
	
  Fax:

  	
  +32 2676 9601

  
	
   

  	
   

  
	
  Attention:

  	
  Mr Kaj Burchardi

  
	
   

  	
  Executive
  Director

  
	
   

  	
  Group Treasury

  



 


 


SAPPI
INTERNATIONAL S.A.


 


	
  By:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  154 Chaussée de
  la Hulpe, B-1170 Brussels, (Watermael-Boitsfort), Belgium

  
	
   

  	
   

  
	
  Fax:

  	
  +32 2676 9601

  
	
   

  	
   

  
	
  Attention:

  	
  Mr Kaj Burchardi

  
	
   

  	
  Executive
  Director

  
	
   

  	
  Group Treasury

  



 


 


TRENFOR
TRADING AG


 


	
  By:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Wiesenstrasse 17,
  CH-8008 Zurich, Switzerland

  
	
   

  	
   

  
	
  Fax:

  	
  +41 44421 4450

  
	
   

  	
   

  
	
  Attention:

  	
  Chief Executive
  Officer and Dr H J Schürmann

  



 


96





















 


The
Original Guarantors


 


SAPPI
LIMITED


 


	
  By:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  48 Amershoff St, Braamfontein, Johannesburg, Republic
  of South Africa

  
	
   

  	
   

  
	
  Fax:

  	
  +27 11 4031 493

  
	
   

  	
   

  
	
  Attention:

  	
  Group Secretary

  



 


 


SAPPI
PAPIER HOLDING GmbH


 


	
  By:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  154 Chaussée de
  la Hulpe, B-1170 Brussels, (Watermael-Boitsfort), Belgium

  
	
   

  	
   

  
	
  Fax:

  	
  +32 2676 9601

  
	
   

  	
   

  
	
  Attention:

  	
  Mr Kaj Burchardi

  
	
   

  	
  Executive
  Director

  
	
   

  	
  Group Treasury

  



 


 


SAPPI
INTERNATIONAL S.A.


 


	
  By:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  154 Chaussée de
  la Hulpe, B-1170 Brussels, (Watermael-Boitsfort), Belgium

  
	
   

  	
   

  
	
  Fax:

  	
  +32 2676 9601

  
	
   

  	
   

  
	
  Attention:

  	
  Mr Kaj Burchardi

  
	
   

  	
  Executive
  Director

  
	
   

  	
  Group Treasury

  



 


 


TRENFOR
TRADING AG


 


	
  By:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Wiesenstrasse 17,
  CH-8008 Zurich, Switzerland

  
	
   

  	
   

  
	
  Fax:

  	
  +41 44421 4450

  
	
   

  	
   

  
	
  Attention:

  	
  Chief Executive
  Officer and Dr H J Schürmann

  



 


97





















 


The
Mandated Lead Arrangers


 


BNP
PARIBAS


 


By:


 


 


J.P.
MORGAN PLC


 


By:


 


 


SG
CORPORATE & INVESTMENT BANKING (the corporate and investment banking
division of the Société Générale)


 


By:


 


 


The
Agent


 


BNP
PARIBAS


 


	
  By:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  37, place du Marché St Honoré, 75031 Paris, France

  
	
   

  	
   

  
	
  Fax:

  	
  +33 (0)1 42 98 43
  17

  
	
   

  	
   

  
	
  Attention:

  	
  Agency - CIB
  Structured Finance

  



 


 


The
Original Lenders


 


BNP
PARIBAS, BELGIUM BRANCH


 


By:


 


 


JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION


 


By:


 


 


SOCIÉTÉ
GÉNÉRALE


 


By:


 


 


 


ABN
AMRO BANK N.V., BELGIUM BRANCH


 


By:


 


98





















 


CITIBANK
INTERNATIONAL PLC


 


By:


 


 


DRESDNER
BANK AG, NIEDERLASSUNG LUXEMBURG


 


By:


 


 


DZ BANK AG, DEUTSCHE
ZENTRAL-GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN


 


By:


 


 


HSBC
BANK PLC


 


By:


 


 


NATEXIS
BANQUES POPULAIRES


 


By:


 


 


BADEN-WÜRTTEMBERGISCHE
BANK AG


 


By:


 


 


COMMERZBANK
AG, BRUSSELS BRANCH


 


By:


 


 


FORTIS
BANK S.A./N.V.


 


By:


 


 


KBC
BANK N.V.


 


By:


 


 


MIZUHO
CORPORATE BANK, LTD


 


By:


 


 


WACHOVIA
BANK, NATIONAL ASSOCIATION, LONDON BRANCH


 


By:


 


99





















 


WESTLB
AG


 


By:


 


 


BANCA
MONTE PASCHI BELGIO S.A.


 


By:


 


100