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Exhibit 4.1

MERCER INTERNATIONAL INC.  

 9.25% SENIOR NOTES DUE 2013

FIRST
SUPPLEMENTAL INDENTURE 

Dated
as of February 14, 2005 

to
Indenture dated as of December 10, 2004 

Wells
Fargo Bank, N.A. 

Trustee 

 
 

CROSS-REFERENCE TABLE*    

	 Trust Indenture

Act Section	 	

Indenture Section
	310	(a)(1)	 	N.A.
	 	(a)(2)	 	N.A.
	 	(a)(3)	 	N.A.
	 	(a)(4)	 	N.A.
	 	(a)(5)	 	N.A.
	 	(b)	 	N.A.
	 	(c)	 	N.A.
	311	(a)	 	N.A.
	 	(b)	 	N.A.
	 	(c)	 	N.A.
	312	(a)	 	2.05
	 	(b)	 	N.A.
	 	(c)	 	N.A.
	313	(a)	 	N.A.
	 	(b)(1)	 	N.A.
	 	(b)(2)	 	N.A.
	 	(c)	 	12.02
	 	(d)	 	N.A.
	314	(a)	 	4.03; 12.02
	 	(b)	 	N.A.
	 	(c)(1)	 	N.A.
	 	(c)(2)	 	N.A.
	 	(c)(3)	 	N.A.
	 	(d)	 	N.A.
	 	(e)	 	N.A.
	 	(f)	 	N.A.
	315	(a)	 	N.A.
	 	(b)	 	12.02
	 	(c)	 	N.A.
	 	(d)	 	N.A.
	 	(e)	 	6.11
	316	(a) (last sentence)	 	2.09
	 	(a)(1)(A)	 	6.05
	 	(a)(1)(B)	 	6.04
	 	(a)(2)	 	N.A.
	 	(b)	 	6.07
	 	(c)	 	2.12
	317	(a)(1)	 	6.08
	 	(a)(2)	 	6.09
	 	(b)	 	2.04
	318	(a)	 	12.01
	 	(b)	 	N.A.
	 	(c)	 	12.01

N.A.
means not applicable.

*    This Cross Reference Table is not part of the Indenture. 

  

 
 

TABLE OF CONTENTS    
    

	 	 	 	 	Page
	ARTICLE 1

DEFINITIONS AND INCORPORATION

BY REFERENCE
	
 	
 	

 	
 	

 
	Section 1.01	 	Definitions.	 	1
	Section 1.02	 	Other Definitions.	 	19
	Section 1.03	 	Incorporation by Reference of Trust Indenture Act.	 	19
	Section 1.04	 	Rules of Construction.	 	20
	Section 1.05	 	Conflicts with Base Indenture.	 	20
	
ARTICLE 2

THE NOTES
	
 	
 	

 	
 	

 
	Section 2.01	 	Form and Dating.	 	20
	Section 2.02	 	Execution and Authentication.	 	21
	Section 2.03	 	Registrar and Paying Agent.	 	21
	Section 2.04	 	Paying Agent to Hold Money in Trust.	 	22
	Section 2.05	 	Holder Lists.	 	22
	Section 2.06	 	Transfer and Exchange.	 	22
	Section 2.07	 	Replacement Notes.	 	26
	Section 2.08	 	Outstanding Notes.	 	26
	Section 2.09	 	Treasury Notes.	 	27
	Section 2.10	 	Temporary Notes.	 	27
	Section 2.11	 	Cancellation.	 	27
	Section 2.12	 	Defaulted Interest.	 	27
	
ARTICLE 3

REDEMPTION AND PREPAYMENT
	
 	
 	

 	
 	

 
	Section 3.01	 	Notices to Trustee.	 	28
	Section 3.02	 	Selection of Notes to Be Redeemed or Purchased.	 	28
	Section 3.03	 	Notice of Redemption.	 	28
	Section 3.04	 	Effect of Notice of Redemption.	 	29
	Section 3.05	 	Deposit of Redemption or Purchase Price.	 	29
	Section 3.06	 	Notes Redeemed or Purchased in Part.	 	30
	Section 3.07	 	Optional Redemption.	 	30
	Section 3.08	 	Mandatory Redemption; No Sinking Fund.	 	30
	Section 3.09	 	Offer to Purchase by Application of Excess Proceeds.	 	31
	
ARTICLE 4

COVENANTS
	
 	
 	

 	
 	

 
	Section 4.01	 	Payment of Notes.	 	32
	Section 4.02	 	Maintenance of Office or Agency.	 	32
	Section 4.03	 	Reports.	 	33
	Section 4.04	 	Compliance Certificate.	 	34
	Section 4.05	 	Taxes.	 	34
	Section 4.06	 	Stay, Extension and Usury Laws.	 	34
	Section 4.07	 	Restricted Payments.	 	35
	Section 4.08	 	Dividend and Other Payment Restrictions Affecting Subsidiaries.	 	39
	Section 4.09	 	Incurrence of Indebtedness and Issuance of Preferred Stock.	 	40

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	Section 4.10	 	Asset Sales.	 	44
	Section 4.11	 	Transactions with Affiliates.	 	45
	Section 4.12	 	Liens.	 	47
	Section 4.13	 	Business Activities.	 	47
	Section 4.14	 	Corporate Existence.	 	47
	Section 4.15	 	Offer to Repurchase Upon Change of Control.	 	47
	Section 4.16	 	No Amendment to Subordination Provisions.	 	49
	Section 4.17	 	Limitation on Sale and Leaseback Transactions.	 	49
	Section 4.18	 	Payments for Consent.	 	50
	Section 4.19	 	Limitation on Issuances of Guarantees of Indebtedness.	 	50
	Section 4.20	 	Note Guarantees.	 	50
	Section 4.21	 	Designation of Restricted and Unrestricted Subsidiaries.	 	50
	
ARTICLE 5

SUCCESSORS
	
 	
 	

 	
 	

 
	Section 5.01	 	Merger, Consolidation, or Sale of Assets.	 	51
	Section 5.02	 	Successor Corporation Substituted.	 	52
	
ARTICLE 6

DEFAULTS AND REMEDIES
	
 	
 	

 	
 	

 
	Section 6.01	 	Events of Default.	 	52
	Section 6.02	 	Acceleration.	 	54
	Section 6.03	 	Other Remedies.	 	54
	Section 6.04	 	Waiver of Past Defaults.	 	55
	Section 6.05	 	Control by Majority.	 	55
	Section 6.06	 	Limitation on Suits.	 	55
	Section 6.07	 	Rights of Holders of Notes to Receive Payment.	 	55
	Section 6.08	 	Collection Suit by Trustee.	 	56
	Section 6.09	 	Trustee May File Proofs of Claim.	 	56
	Section 6.10	 	Priorities.	 	56
	Section 6.11	 	Undertaking for Costs.	 	57
	
ARTICLE 7

[INTENTIONALLY OMITTED]
	
ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE
	
 	
 	

 	
 	

 
	Section 8.01	 	Option to Effect Legal Defeasance or Covenant Defeasance.	 	57
	Section 8.02	 	Legal Defeasance and Discharge.	 	57
	Section 8.03	 	Covenant Defeasance.	 	58
	Section 8.04	 	Conditions to Legal or Covenant Defeasance.	 	58
	Section 8.05	 	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.	 	59
	Section 8.06	 	Repayment to Company.	 	60
	Section 8.07	 	Reinstatement.	 	60
	
ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER
	
 	
 	

 	
 	

 
	Section 9.01	 	Without Consent of Holders of Notes.	 	60
	Section 9.02	 	With Consent of Holders of Notes.	 	61
	Section 9.03	 	Compliance with Trust Indenture Act.	 	63

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	Section 9.04	 	Revocation and Effect of Consents.	 	63
	Section 9.05	 	Notation on or Exchange of Notes.	 	63
	Section 9.06	 	Trustee to Sign Amendments, etc.	 	63
	
ARTICLE 10

NOTE GUARANTEES
	
 	
 	

 	
 	

 
	Section 10.01	 	Guarantee.	 	63
	Section 10.02	 	Limitation on Guarantor Liability.	 	64
	Section 10.03	 	Execution and Delivery of Note Guarantee.	 	65
	Section 10.04	 	Guarantors May Consolidate, etc., on Certain Terms.	 	65
	Section 10.05	 	Releases.	 	66
	
ARTICLE 11

SATISFACTION AND DISCHARGE
	
 	
 	

 	
 	

 
	Section 11.01	 	Satisfaction and Discharge.	 	66
	Section 11.02	 	Application of Trust Money.	 	67
	
ARTICLE 12

MISCELLANEOUS
	
 	
 	

 	
 	

 
	Section 12.01	 	Trust Indenture Act Controls.	 	68
	Section 12.02	 	Notices.	 	68
	Section 12.03	 	Governing Law.	 	69
	Section 12.04	 	No Adverse Interpretation of Other Agreements.	 	69
	Section 12.05	 	Successors.	 	69
	Section 12.06	 	Severability.	 	70
	Section 12.07	 	Counterpart Originals.	 	70
	Section 12.08	 	Table of Contents, Headings, etc.	 	70
	

EXHIBITS
	
 	
 	

 	
 	

 
	Exhibit A	 	FORM OF NOTE
	Exhibit B	 	FORM OF NOTATION OF GUARANTEE
	Exhibit C	 	FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS

iii

  

        FIRST SUPPLEMENTAL INDENTURE dated as of February 14, 2005 between Mercer International Inc., a Washington business trust,
and Wells Fargo Bank, N.A., as trustee. 

        WHEREAS,
the Company and the Trustee entered into an indenture in respect of the issuance of Debt Securities by Mercer International Inc., dated as of December 10, 2004
(the "Base Indenture"); 

        WHEREAS,
Section 10.01(g) of the Base Indenture provides that the Company and Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the
Base Indenture to establish the form or terms of Debt Securities of any series as permitted by Sections 2.01 and 2.03 thereof; 

        WHEREAS,
the Company has duly authorized the creation of a series of its Debt Securities denominated as the "9.25% Senior Notes due 2013" (the
"Notes"); 

        WHEREAS,
the entry into this Supplemental Indenture by the parties hereto is in all respects authorized by the provisions of the Base Indenture; and 

        WHEREAS,
the Company has duly authorized the execution and delivery of this Supplemental Indenture, to establish the Notes as provided for in this Supplemental Indenture, and to make
this Supplemental Indenture a valid agreement of the Company, in accordance with their and its terms. 

        NOW,
THEREFORE, the Company and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the Notes: 

 
 

ARTICLE 1
  DEFINITIONS AND INCORPORATION
  BY REFERENCE    
    

Section 1.01    Definitions.

        "Acquired Debt" means, with respect to any specified Person: 

        (1)   Indebtedness
of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person; and 

        (2)   Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person. 

        "Acquisition" means the acquisition by 0706906 B.C. Ltd. of substantially all of the assets of Stone Venepal (Celgar)
Pulp Inc., a corporation organized under the laws of Canada. 

        "Additional Notes" means Notes (other than the Initial Notes) issued under this Supplemental Indenture in accordance with
Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes. 

        "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of more than 15% (measured on a fully diluted basis) of the Voting Stock of a Person (except as reportable on Form 13-F or Form 13-G of the
SEC) will be deemed to be control. For purposes of this definition, the terms "controlling," "controlled
by" and "under common control with" have correlative meanings. 

1

 

        "Agent" means any Registrar, co-registrar, Paying Agent or additional paying agent. 

        "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, and the rules
and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange. 

        "Asset Sale" means: 

        (1)   the
sale, lease, conveyance or other disposition of any assets or rights; provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of Section 4.15 and/or
Section 5.01 hereof and not by the provisions of Section 4.10 hereof; and 

        (2)   the
issuance of Equity Interests in any of the Company's Restricted Subsidiaries or the sale of Equity Interests in any of its Subsidiaries. 

        Notwithstanding
the preceding, none of the following items will be deemed to be an Asset Sale: 

        (1)   any
single transaction or series of related transactions that involves assets having a Fair Market Value of less than $2.0 million; 

        (2)   a
transfer of assets between or among the Company and its Restricted Subsidiaries; 

        (3)   an
issuance of Equity Interests by a Restricted Subsidiary of the Company to the Company or to a Restricted Subsidiary of the Company; 

        (4)   the
sale or lease of products, services, accounts receivable or current assets in the ordinary course of business and any sale or other disposition of damaged,
worn-out or obsolete assets in the ordinary course of business; 

        (5)   the
sale or other disposition of cash or Cash Equivalents; 

        (6)   any
release of intangible claims or rights in connection with the loss or settlement of a bona fide lawsuit, dispute or other controversy; 

        (7)   leases
or subleases to third persons not interfering in any material respect with the business of the Company or any of its Restricted Subsidiaries; 

        (8)   a
Restricted Payment that does not violate the provisions of Section 4.07 hereof or a Permitted Investment; and 

        (9)   purchases,
sales or other transfers of pulp, fibre, chemicals and other consumables between or among the Company or any Restricted Subsidiary and any Unrestricted
Subsidiary at market prices pursuant to arrangements approved by the Company's Board of Directors as being fair, from a financial point of view, to the Company or the applicable Restricted Subsidiary,
as the case may be; purchases, sales or other transfers of spare parts or mill consumables between any Restricted Subsidiary and any Unrestricted Subsidiary at book value; and other transactions with
customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Supplemental Indenture,
that are fair to the Company or the Restricted Subsidiary, as the case may be, in the reasonable determination of the Company's Board of Directors. 

2

 

        "Attributable Debt" means in respect of a sale and leaseback transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or
may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with
GAAP; provided, however, that if such sale and leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented
thereby will be determined in accordance with the definition of "Capital Lease Obligation." 

        "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. 

        "Base Indenture" has the meaning specified in the recitals of this Supplemental Indenture. 

        "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" will be deemed to have
beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only
after the passage of time. The terms "Beneficially Owns" and "Beneficially Owned" have a corresponding
meaning. 

        "Board of Directors" means: 

        (1)   with
respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board; 

        (2)   with
respect to a partnership, the Board of Directors of the general partner of the partnership; 

        (3)   with
respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and 

        (4)   with
respect to any other Person (including a business trust), the board of trustees or committee of such Person serving a similar function. 

        "Borrowing Base" means, as of any date, an amount equal to: 

        (1)   80%
of the face amount of all accounts receivable owned by the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such
date, calculated on a consolidated basis and in accordance with GAAP; plus

        (2)   50%
of the book value of all inventory owned by the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date,
calculated on a consolidated basis and in accordance with GAAP. 

        "Business Day" means any day other than a Legal Holiday. 

3

 

        "Capital Lease Obligation" means, at the time any determination is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP. 

        "Capital Stock" means: 

        (1)   in
the case of a corporation, corporate stock; 

        (2)   in
the case of an association or business entity or trust, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate
stock, including shares of beneficial interest; 

        (3)   in
the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and 

        (4)   any
other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing
Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock. 

        "Cash Equivalents" means: 

        (1)   United States
dollars, Canadian dollars or Euros; 

        (2)   securities
issued or directly and fully guaranteed or insured by the United States, Canadian, German or United Kingdom government or any agency or
instrumentality of the United States, Canadian, German or United Kingdom government (provided that the full faith and credit of the
United States, Canada, Germany or the United Kingdom is pledged in support of those securities) having maturities of not more than six months from the date of acquisition; 

        (3)   certificates
of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case, with any lender party to the Credit Agreements or with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of "B" or better; 

        (4)   repurchase
obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into
with any financial institution meeting the qualifications specified in clause (3) above; 

        (5)   commercial
paper having one of the two highest ratings obtainable from Moody's or S&P and, in each case, maturing within six months after the date of acquisition; and 

        (6)   money
market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition. 

        "Change of Control" means the occurrence of any of the following: 

        (1)   the
direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of the Company and its Subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d) of the Exchange Act); 

4

 

        (2)   the
adoption of a plan relating to the liquidation or dissolution of the Company; 

        (3)   the
consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any "person" (as defined above) becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Company, measured by voting power rather than number of shares;  provided that, however, it is not a Change in
Control if, pursuant to such transaction, all of the Voting Stock of the Company is changed into or
exchanged for securities of a parent corporation that after such transaction owns all of the Capital Stock of the Company and no person is the Beneficial Owner, directly or indirectly, of more than
50% of the Voting Stock of such parent corporation; 

        (4)   during
any consecutive two-year period, individuals who at the beginning of that two-year period constituted the Company's Board of Directors
(together with any new persons whose election to the Company's Board of Directors, or whose nomination for election by the Company's shareholders, was approved by a vote of a majority of the directors
who were either directors at the beginning of such period or whose election or nomination for election was approved by the Company's Board of Directors or the nominating committee thereof, the
majority of the members of which meet the above criteria) cease for any reason to constitute a majority of the Company's Board of Directors then in office; or 

        (5)   the
Company consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, the Company, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the Company or such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction
where the Voting Stock of the Company outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such issuance). 

        "Clearstream" means Clearstream Banking, S.A. 

        "Company" means Mercer International Inc., and any and all successors thereto. 

        "Consolidated EBITDA" means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such
period plus, without duplication: 

        (1)   an
amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale, to the extent
such losses were deducted in computing such Consolidated Net Income; plus

        (2)   provision
for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted
in computing such Consolidated Net Income; plus

        (3)   the
Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net
Income; plus

5

 

        (4)   depreciation,
amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other
non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income; plus

        (5)   any
expenses directly related to consummation of the Acquisition, the offering of these Notes and concurrent offering of Capital Stock of the Company, to the extent such
amounts were deducted in computing such Consolidated Net Income; plus

        (6)   the
following expenses, losses or gains to the extent such amounts were included in the computation of Consolidated Net Income: 

        (a)   nonrecurring
or unusual recruiting, severance and restructuring costs or gains during such period, as determined in good faith by the Board of Directors of the Company;  provided that the total of such costs shall
not exceed $2.0 million per twelve-month period; 

        (b)   foreign
exchange gains or losses incurred with respect to receivables (net of the impact on payables) on product sales; 

        (c)   expenses
related to any special meetings of shareholders, including any proxy solicitation costs, settlement and related costs; and 

        (d)   expenses
related to equipment failures (including, without limitation, costs of repair, equipment replacement or addition) where a good faith application for the
recovery of such costs from the vendor or an insurer has been made, less any such recovery and the amount of any such claim to the extent it has been finally determined to be uncollectible, the net
amount not to exceed $2.0 million in the aggregate over any twelve-month period; minus

        (7)   non-cash
items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business, 

in
each case, on a consolidated basis for such Person and its Restricted Subsidiaries and determined in accordance with GAAP. 

        Notwithstanding
the preceding, the provision for taxes based on the income or profits of, and the depreciation and amortization and other non-cash expenses of, a Restricted
Subsidiary of the Company will be added to Consolidated Net Income to compute Consolidated EBITDA of the Company only to the extent that a corresponding amount would be permitted at the date of
determination to be dividended or distributed, directly or indirectly, to the Company by such Restricted Subsidiary without prior governmental approval (that has not been obtained), and without direct
or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its stockholders. 

        "Consolidated Net Income" means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and
its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that: 

6

 

        (1)   the
Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the
extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person; 

        (2)   the
Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders; 

        (3)   the
cumulative effect of a change in accounting principles will be excluded; 

        (4)   any
goodwill impairment charges pursuant to Financial Accounting Standards Board Statement No. 142 will be excluded; and 

        (5)   notwithstanding
clause (1) above, the Net Income of any Unrestricted Subsidiary or Landqart AG (including, without limitation, the impact of any Hedging
Obligations) will be excluded, whether or not distributed to the specified Person or one of its Subsidiaries. 

        "Corporate Trust Office of the Trustee" will be at the address of the Trustee specified in Section 12.02 hereof or such other
address as to which the Trustee may give notice to the Company. 

        "Credit Agreements" means (i) that certain Credit Agreement by and among 0706906 B.C. Ltd. and Royal Bank of Canada, as
Agent, providing for up to $30.0 million of revolving credit borrowings, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection
therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities
to institutional investors) in whole or in part from time to time, and (ii) that certain Credit Agreement by and among Zellstoff-und Papierfabrik
Rosenthal GmbH & Co. KG and Bayerische Hypo-und Vereinsbank AG, as Lead Arranger, providing for up to €40.0 million of revolving credit
borrowings, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed,
refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time. 

        "Credit Facilities" means, one or more debt facilities (including, without limitation, the Credit Agreements) or commercial paper
facilities, in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or
to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon
or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time. 

        "Custodian" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. 

        "Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default. 

7

 

        "Definitive Note" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06
hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global
Note" attached thereto. 

        "Depositary" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in
Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision
of this Supplemental Indenture. 

        "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature.
Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 hereof. The amount of Disqualified Stock deemed to be outstanding at
any time for purposes of this Supplemental Indenture will be the maximum amount that the Company and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any
mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends. 

        "Domestic Subsidiary" means any Restricted Subsidiary of the Company that was formed under the laws of the United States or any
state of the United States or the District of Columbia or that guarantees or otherwise provides direct credit support for any Indebtedness of the Company. 

        "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock). 

        "Euroclear" means Euroclear Bank, S.A./N.V., as operator of the Euroclear system. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "Existing Indebtedness" means the Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit
Agreements) in existence on the date of this Supplemental Indenture, until such amounts are repaid. 

        "Fair Market Value" means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving
distress or necessity of either party. In the case of a transaction not exceeding $10.0 million, Fair Market Value may be determined in good faith by the Chief Financial Officer, Controller or
Treasurer of the Company, and in the case of a transaction exceeding $10.0 million, Fair Market Value shall be determined in good faith by the Board of Directors of the Company (unless
otherwise provided in this Supplemental Indenture). 

        "Fixed Charge Coverage Ratio" means, with respect to any specified Person for any period, the ratio of the Consolidated EBITDA of such
Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays,
repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings, including working capital borrowings under Credit Facilities) or issues,
repurchases or redeems preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption
of preferred stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period. 

8

 

        In
addition, for purposes of calculating the Fixed Charge Coverage Ratio: 

        (1)   acquisitions
that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations, or any Person or any of its
Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including any related financing transactions and including increases in ownership of Restricted
Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect (in accordance
with Regulation S-X under the Securities Act) as if they had occurred on the first day of the four-quarter reference period; 

        (2)   the
Consolidated EBITDA which is attributable to discontinued operations (as determined in accordance with GAAP), and operations or businesses (and ownership interests
therein) disposed of prior to the Calculation Date, will be excluded; 

        (3)   the
Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed
of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its
Restricted Subsidiaries following the Calculation Date; 

        (4)   any
Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter
period; 

        (5)   any
Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such
four-quarter period; and 

        (6)   if
any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had
been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in
excess of 6 months). 

        "Fixed Charges" means, with respect to any specified Person for any period, the sum, without duplication, of: 

        (1)   the
consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market
valuation of Hedging Obligations in accordance with GAAP), the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect
of all payments made or received pursuant to Hedging Obligations in respect of interest rates (excluding, for the avoidance of doubt, amounts due upon settlement of any such Hedging Obligations);  plus

9

 

        (2)   the
consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period;  plus

        (3)   any
interest on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries (other than Indebtedness of the Paper
Subsidiaries, not to exceed €4.7 million, in existence as of the date of this Supplemental Indenture and guaranteed by the Company) or secured by a Lien on assets of such Person
or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus

        (4)   the
product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of the Company (other than Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company,  times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with GAAP. 

        "Foreign Subsidiary" means any Restricted Subsidiary that is not a Domestic Subsidiary. 

        "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in effect from time to time. 

        "Global Note Legend" means the legend set forth in Section 2.06(f)(1) hereof, which is required to be placed on all Global Notes
issued under this Supplemental Indenture. 

        "Global Notes" means, individually and collectively, each of the Global Notes deposited with or on behalf of and registered in the name of
the Depository or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the "Schedule of Exchanges of Interests in the Global
Note" attached thereto, issued in accordance with Sections 2.01 and 2.06 hereof. 

        "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America, and the payment
for which the United States pledges its full faith and credit. 

        "Guarantee" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business,
direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any
Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain
financial statement conditions or otherwise). 

        "Guarantor" means each Subsidiary of the Company that executes a Note Guarantee in accordance with the provisions of this Supplemental
Indenture, and its successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of this Supplemental Indenture. 

10

 

        "Hedging Obligations" means, with respect to any specified Person, the obligations of such Person under: 

        (1)   interest
rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; 

        (2)   other
agreements or arrangements designed to manage interest rates or interest rate risk; and 

        (3)   other
agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates (including, without limitation, foreign currency futures
and options, currency swaps, currency forwards and related interest rate swaps and/or forwards) or commodity prices (including, without limitation, commodity futures, swaps or options). 

        "Holder" means a Person in whose name a Note is registered. 

        "Indebtedness" means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade
payables), whether or not contingent: 

        (1)   in
respect of borrowed money; 

        (2)   evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); 

        (3)   in
respect of banker's acceptances; 

        (4)   representing
Capital Lease Obligations or Attributable Debt in respect of sale and leaseback transactions; 

        (5)   representing
the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services
are completed, except any balance that constitutes an accrual of expenses or trade payable; or 

        (6)   representing
any Hedging Obligations (the amount of any such Hedging Obligations to be equal at any time to the termination value of the agreement or arrangement giving
rise to such Hedging Obligations that would be payable by such Person at such time), 

if
and to the extent any of the preceding items (other than letters of credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person
prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. 

        "Indirect Participant" means a Person who holds a beneficial interest in a Global Note through a Participant. 

11

 

        "Initial Notes" means the first $310.0 million aggregate principal amount of Notes issued under this Supplemental Indenture on the
date hereof. 

        "Investments" means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates)
in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all
items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Company,
the Company will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Company's Investments in such Restricted Subsidiary that were
not sold or disposed of in an amount determined as provided in the final paragraph of Section 4.07 hereof. The acquisition by the Company or any Restricted Subsidiary of the Company of a Person
that holds an Investment in a third Person will be deemed to be an Investment by the Company or such Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held
by the acquired Person in such third Person in an amount determined as provided in the final paragraph of Section 4.07 hereof. Except as otherwise provided in this Supplemental Indenture, the
amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value. 

        "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment
are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue on such payment for the intervening period. 

        "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option
or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction. 

        "Moody's" means Moody's Investors Service, Inc. 

        "Net Income" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and
before any reduction in respect of preferred stock dividends, excluding, however: 

        (1)   any
gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: 

        (a)   any
Asset Sale; or 

        (b)   the
disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries; 

12

 

        (2)   any
extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss); 

        (3)   any
foreign exchange gain (loss) on Indebtedness; and 

        (4)   any
marked to market gain (loss) whether realized or accrued, without duplication, on Hedging Obligations. 

        "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts required to be applied to the
repayment of Indebtedness, other than Indebtedness under a Credit Facility, secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect
of the sale price of such asset or assets established in accordance with GAAP. 

        "Non-Recourse Debt" means Indebtedness: 

        (1)   as
to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender, other than the guarantees by the Company of
Indebtedness of the Paper Subsidiaries not to exceed €4.7 million in existence as of the date of this Supplemental Indenture; and 

        (2)   no
default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would
permit upon notice, lapse of time or both any holder of any other Indebtedness of the Company or any of its Restricted Subsidiaries (other than Credit Facilities and the Subordinated Notes) to declare
a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity. 

        "Note Guarantee" means the Guarantee by each Guarantor of the Company's obligations under this Supplemental Indenture and the Notes,
executed pursuant to the provisions of this Supplemental Indenture. 

        "Notes" has the meaning assigned to it in the preamble to this Supplemental Indenture. The Initial Notes and the Additional Notes shall be
treated as a single class for all purposes under this Supplemental Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional
Notes. 

        "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness. 

        "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person. 

13

 

        "Paper Subsidiaries" means Dresden Papier GmbH and Fährbrücke GmbH. 

        "Participant" means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear
or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream). 

        "Permitted Business" means any business conducted by the Company and its Restricted Subsidiaries on the date of this Supplemental
Indenture, including the pulp and paper manufacturing and sales business and any business reasonably related thereto, ancillary or complimentary to reasonable extensions thereof, including, without
limitation, transportation, logistics and wood harvesting and procurement. 

        "Permitted Investments" means: 

        (1)   any
Investment in the Company or in a Restricted Subsidiary of the Company; 

        (2)   any
Investment in Cash Equivalents; 

        (3)   any
Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment: 

        (a)   such
Person becomes a Restricted Subsidiary of the Company; or 

        (b)   such
Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company; 

        (4)   any
Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with
Section 4.10 hereof; 

        (5)   any
acquisition of assets or Capital Stock solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company or out of the net
proceeds of an issue or sale of Equity Interest of the Company (other than Disqualified Stock) so long as such acquisition occurs within 60 days thereafter; 

        (6)   any
Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of
the Company or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or
(B) litigation, arbitration or other disputes; 

        (7)   Investments
represented by Hedging Obligations; 

        (8)   loans
or advances to employees made in the ordinary course of business of the Company or any Restricted Subsidiary of the Company in an aggregate principal amount not to
exceed $2.0 million at any one time outstanding; 

        (9)   repurchases
of the Notes; 

        (10) extensions
of trade credit or advances to customers on commercially reasonable terms in the ordinary course of business; 

14

 

        (11) Guarantees
of Indebtedness of the Company or any of its Restricted Subsidiaries issued in accordance with Section 4.09 hereof; 

        (12) Investments
resulting from payment of consolidated taxes that include Unrestricted Subsidiaries; and 

        (13) other
Investments in any Person (other than an Affiliate of the Company that is not a Subsidiary of the Company) having an aggregate Fair Market Value (measured on the
date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (13) that are at the
time outstanding not to exceed $15.0 million. 

        "Permitted Liens" means: 

        (1)   Liens
on assets of the Company or any of its Restricted Subsidiaries securing Indebtedness and other Obligations under Credit Facilities that was permitted by the terms
of this Supplemental Indenture to be incurred and/or securing Hedging Obligations related thereto; 

        (2)   Liens
in favor of the Company; 

        (3)   Liens
on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or any Subsidiary of the Company;  provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with the Company or the Subsidiary; 

        (4)   Liens
on property (including Capital Stock) existing at the time of acquisition of the property by the Company or any Subsidiary of the Company;  provided that such Liens were in existence prior to, such
acquisition, and not incurred in contemplation of, such acquisition; 

        (5)   Liens
to secure the performance of statutory obligations, surety or appeal bonds, performance bonds, letters of credit or other obligations of a like nature incurred in
the ordinary course of business; 

        (6)   Liens
to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of Section 4.09 hereof covering only the
assets acquired with or financed by such Indebtedness; 

        (7)   Liens
existing on the date of this Supplemental Indenture or from contractual commitments existing on the date of this Supplemental Indenture; 

        (8)   Liens
for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made
therefor; 

        (9)   Liens
imposed by law, such as carriers', warehousemen's, landlord's and mechanics' Liens, in each case, incurred in the ordinary course of business; 

        (10) survey
exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate
materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person; 

15

 

        (11) Liens
created for the benefit of (or to secure) the Notes; 

        (12) Liens
to secure any Permitted Refinancing Indebtedness permitted to be incurred under this Supplemental Indenture; provided,
however, that: 

        (a)   the
new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose,
could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and 

        (b)   the
Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed
amount, of the Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement,
defeasance or discharge; 

        (13) Liens
securing Hedging Obligations made in the ordinary course of business and not for speculation; provided that such
Hedging Obligations are permitted under this Supplemental Indenture; 

        (14) Liens
resulting from sale and leaseback transactions otherwise permitted by Section 4.17 hereof at any one time outstanding that do not exceed
$15.0 million; and 

        (15) Liens
incurred in the ordinary course of business of the Company or any Subsidiary of the Company with respect to obligations at any one time outstanding that do not
exceed $20.0 million. 

        "Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for,
or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge other Indebtedness of the Company or any of its Restricted Subsidiaries (other than intercompany
Indebtedness); provided that: 

        (1)   the
principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including
premiums, incurred in connection therewith); 

        (2)   such
Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; 

        (3)   if
the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the holders of Notes as those
contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and 

16

 

        (4)   such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary who is the obligor on the Indebtedness being renewed, refunded, refinanced, replaced,
defeased or discharged. 

        "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated
organization, limited liability company or government or other entity. 

        "Responsible Officer," when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee
(or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. 

        "Restricted Investment" means an Investment other than a Permitted Investment. 

        "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. 

        "Rosenthal" means Zellstoff-und Papierfabrik Rosenthal GmbH & Co. KG and any and all successors thereto. 

        "S&P" means Standard & Poor's Ratings Group. 

        "SEC" means the Securities and Exchange Commission. 

        "Securities Act" means the Securities Act of 1933, as amended. 

        "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Supplemental Indenture. 

        "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the
payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the date of this Supplemental Indenture, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. 

        "Subordinated Note Indenture" means the indenture governing the Subordinated Notes. 

        "Subordinated Notes" means the Company's 8.5% Convertible Senior Subordinated Notes Due 2010. 

        "Subsidiary" means, with respect to any specified Person: 

        (1)   any
corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers or
trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or
a combination thereof); and 

17

 

        (2)   any
partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof). 

        "Supplemental Indenture" means this First Supplemental Indenture, as amended or supplemented from time to time. 

        "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb). 

        "Trading Day" means: 

        (1)   if
the Company's common Capital Stock is quoted on NASDAQ, a day on which trades may be made on NASDAQ; or 

        (2)   if
the Company's common Capital Stock is not so listed, admitted for trading or quoted, any day other than a Saturday or Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law, executive order or otherwise to close. 

        "Trustee" means Wells Fargo Bank, N.A. until a successor replaces it in accordance with the applicable provisions of this Supplemental
Indenture and thereafter means the successor serving hereunder. 

        "Unrestricted Subsidiary" means each of Dresden Papier GmbH, Stendal Pulp Holding GmbH, Zellstoff Stendal GmbH,
Zellstoff Stendal Holz Service GmbH, Zellstoff Stendal Holz GmbH & Co. KG, ZS Beteiligungs GmbH, Zellstoff Stendal Transport Service GmbH, Zellstoff Stendal
Transport GmbH & Co. KG, ZS Transport Beteiligungs GmbH (or any successor to any of them) or any other Subsidiary of the Company that is designated by the Board of
Directors of the Company as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary: 

        (1)   has
no Indebtedness other than Non-Recourse Debt; 

        (2)   except
as permitted by Section 4.11 hereof, is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company; 

        (3)   is
a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional
Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results; and 

        (4)   has
not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries. 

        "Voting Stock" of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the
election of the Board of Directors of such Person. 

18

 

        "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing: 

        (1)   the
sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment; by

        (2)   the
then outstanding principal amount of such Indebtedness. 

        "Wholly-Owned Restricted Subsidiary" of any specified Person means a Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares) will at the time be owned by such Person or by one or more Wholly-Owned Restricted Subsidiaries of such Person. 

Section 1.02    Other Definitions.

	Term
 
	 	Defined in Section

	"Affiliate Transaction"	 	4.11
	"Asset Sale Offer"	 	3.09
	"Authentication Order"	 	2.02
	"Change of Control Offer"	 	4.15
	"Change of Control Payment"	 	4.15
	"Change of Control Payment Date"	 	4.15
	"Covenant Defeasance"	 	8.03
	"DTC"	 	2.03
	"Event of Default"	 	6.01
	"Excess Proceeds"	 	4.10
	"incur"	 	4.09
	"Legal Defeasance"	 	8.02
	"Offer Amount"	 	3.09
	"Offer Period"	 	3.09
	"Paying Agent"	 	2.03
	"Permitted Debt"	 	4.09
	"Payment Default"	 	6.01
	"Purchase Date"	 	3.09
	"Registrar"	 	2.03
	"Restricted Payments"	 	4.07

        Other
capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Base Indenture. 

Section 1.03    Incorporation by Reference of Trust Indenture Act.

        Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. 

        The
following TIA terms used in this Indenture have the following meanings: 

19

 

        "indenture securities" means the Notes; 

        "indenture security Holder" means a Holder of a Note; 

        "indenture to be qualified" means this Indenture; 

        "indenture trustee" or "institutional trustee" means the Trustee; and 

        "obligor" on the Notes and the Note Guarantees means the Company and the Guarantors, respectively, and any successor obligor upon the
Notes and the Note Guarantees, respectively. 

        All
other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to
them. 

Section 1.04    Rules of Construction.

        Unless
the context otherwise requires: 

        (1)   a
term has the meaning assigned to it; 

        (2)   an
accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; 

        (3)   "or"
is not exclusive; 

        (4)   words
in the singular include the plural, and in the plural include the singular; 

        (5)   "will"
shall be interpreted to express a command; 

        (6)   provisions
apply to successive events and transactions; and 

        (7)   references
to sections of or rules under the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time
to time. 

Section 1.05    Conflicts with Base Indenture.

        In
the event that any provision of this Indenture limits, qualifies or conflicts with a provision of the Base Indenture, such provision of this Indenture shall control. 

 
 

ARTICLE 2
  THE NOTES    
    

Section 2.01    Form and Dating.

        (a)   General.    The Notes and the Trustee's certificate of authentication will be substantially in the form of
Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note will be dated the date of its authentication. The Notes shall be
in denominations of $1,000 and integral multiples thereof. 

        The
terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Supplemental Indenture and the Company and the Trustee, by their execution
and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express
provisions of this Supplemental Indenture, the provisions of this Supplemental Indenture shall govern and be controlling. 

20

 

        (b)   Global Notes.    Notes issued in global form will be substantially in the form of Exhibit A
hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes issued in definitive form will be substantially in the
form of Exhibit A hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note will
represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon
and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of
a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof. 

Section 2.02    Execution and Authentication.

        At
least one Officer must sign the Notes for the Company by manual or facsimile signature. 

        If
an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid. 

        A
Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this
Supplemental Indenture. 

        The
Trustee will, upon receipt of a written order of the Company signed by an Officer (an "Authentication Order"), authenticate Notes for
original issue that may be validly issued under this Supplemental Indenture, including any Additional Notes. The aggregate principal amount of Notes outstanding at any time may not exceed the
aggregate principal amount of Notes authorized for issuance by the Company pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof. 

        The
Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Supplemental Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company. 

Section 2.03    Registrar and Paying Agent.

        The
Company will maintain an office or agency where Notes may be presented for registration of transfer or for exchange ("Registrar") and
an office or agency where Notes may be presented for payment ("Paying Agent"). The Registrar will keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent"
includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company will notify the Trustee in writing of the name and address of any
Agent not a party to this Supplemental Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar. 

21

  

        The Company initially appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Notes. 

        The
Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes. 

Section 2.04    Paying Agent to Hold Money in Trust.

        The
Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by
the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) will have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it will
segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee
will serve as Paying Agent for the Notes. 

Section 2.05    Holder Lists.

        The
Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with
TIA § 312(a). If the Trustee is not the Registrar, the Company will furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise
comply with TIA § 312(a). 

Section 2.06    Transfer and Exchange.

        (a)   Transfer and Exchange of Global Notes.    A Global Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if: 

        (1)   the
Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary; 

        (2)   the
Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to
such effect to the Trustee; or 

        (3)   there
has occurred and is continuing a Default or Event of Default with respect to the Notes. 

        Upon
the occurrence of either of the preceding events in (1) or (2) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee.
Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of,
a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.06(b), (c) or (d) hereof. 

22

 

        (b)   Transfer and Exchange of Beneficial Interests in the Global Notes.    The transfer and exchange of beneficial
interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Supplemental Indenture and the Applicable Procedures. Transfers of beneficial interests
in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: 

        (1)   Transfer of Beneficial Interests in the Same Global Note.    Beneficial interests in any Global Note may be
transferred to Persons who take delivery thereof in the form of a beneficial interest in a Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(1). 

        (2)   All Other Transfers and Exchanges of Beneficial Interests in Global Notes.    In connection with all transfers
and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar either: 

        (A)  both:

        (i)    a
written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and 

        (ii)   instructions
given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or 

        (B)  both:

        (i)    a
written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to
be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and 

        (ii)   instructions
given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (1) above. 

Upon
satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Supplemental Indenture and the Notes or otherwise applicable under the
Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof. 

23

 

        (c)   Transfer or Exchange of Beneficial Interests in Global Notes for Definitive Notes. If any holder of a beneficial interest
in a Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note,
then, upon satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(g) hereof, and the Company will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c) will be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect
Participant. 

        (d)   Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes. A Holder of a Definitive Note may
exchange such Note for a beneficial interest in a Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Definitive Note and increase or cause to be increased the aggregate principal amount of one of
the Global Notes. 

        (e)   Transfer and Exchange of Definitive Notes for Definitive Notes.    Upon request by a Holder of Definitive Notes
and such Holder's compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar
duly executed by such Holder or by its attorney, duly authorized in writing. A Holder of Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of a Definitive
Note. 

        (f)    Legends.    The following legends will appear on the face of all Global Notes and Definitive Notes issued under
this Supplemental Indenture unless specifically stated otherwise in the applicable provisions of this Supplemental Indenture. 

        (1)   Global Note Legend.    Each Global Note will bear a legend in substantially the following form: 

"THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE SUPPLEMENTAL INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE SUPPLEMENTAL INDENTURE,
(2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE SUPPLEMENTAL INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE SUPPLEMENTAL INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. 

UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE
OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN." 

24

 

        (g)   Cancellation and/or Adjustment of Global Notes.    At such time as all beneficial interests in a particular
Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is
being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an
endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. 

        (h)   General Provisions Relating to Transfers and Exchanges.

        (1)   To
permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an
Authentication Order in accordance with Section 2.02 hereof or at the Registrar's request. 

        (2)   No
service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof). 

        (3)   The
Registrar will not be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part. 

        (4)   All
Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits under this Supplemental Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or
exchange. 

        (5)   Neither
the Registrar nor the Company will be required: 

        (A)  to
issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of
Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection; 

25

 

        (B)  to
register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or 

        (C)  to
register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date. 

        (6)   Prior
to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary. 

        (7)   The
Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof. 

        (8)   All
certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration
of transfer or exchange may be submitted by facsimile. 

Section 2.07    Replacement Notes.

        If
any mutilated Note is surrendered to the Trustee or the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Note, the Company will
issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee's requirements are met. If required by the Trustee or the Company, an indemnity bond
must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note. 

        Every
replacement Note is an additional obligation of the Company and will be entitled to all of the benefits of this Supplemental Indenture equally and proportionately with all other
Notes duly issued hereunder. 

Section 2.08    Outstanding Notes.

        The
Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest
in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09
hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed
to be outstanding for purposes of Section 3.07(a) hereof. 

        If
a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a
protected purchaser. 

26

 

        If
the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. 

        If
the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that
date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest. 

Section 2.09    Treasury Notes.

        In
determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or any Guarantor, or by any
Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, will be considered as though not outstanding, except that for the purposes of
determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded. 

Section 2.10    Temporary Notes.

        Until
certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes.
Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes. 

        Holders
of temporary Notes will be entitled to all of the benefits of this Supplemental Indenture. 

Section 2.11    Cancellation.

        The
Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will destroy canceled
Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all canceled Notes will be delivered to the Company. The Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for cancellation. 

Section 2.12    Defaulted Interest.

        If
the Company defaults in a payment of interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company will fix or cause to be fixed each such special record date and payment
date; provided that no such special record date may be less than seven (7) days prior to the related payment date for such defaulted interest. At
least ten (10) days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will mail or cause to be
mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. 

27

 
 
 

ARTICLE 3
  REDEMPTION AND PREPAYMENT    
    

Section 3.01    Notices to Trustee.

        If
the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30 days but not more
than 60 days before a redemption date, an Officers' Certificate setting forth: 

        (1)   the
clause of this Supplemental Indenture pursuant to which the redemption shall occur; 

        (2)   the
redemption date; 

        (3)   the
principal amount of Notes to be redeemed; and 

        (4)   the
redemption price. 

Section 3.02    Selection of Notes to Be Redeemed or Purchased.

        If
less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee will select Notes for redemption or purchase pursuant to the rules of DTC,
if applicable, or on a pro rata basis except: 

        (1)   if
the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are
listed; or 

        (2)   if
otherwise required by law. 

        In
the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased will be selected, unless otherwise provided herein, not less than 30 nor more than
60 days prior to the redemption or purchase date by the Trustee from the outstanding Notes not previously called for redemption or purchase. 

        The
Trustee will promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the
principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected will be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to
be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except as provided in the preceding sentence,
provisions of this Supplemental Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase. 

Section 3.03    Notice of Redemption.

        Subject
to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company will mail or cause to be mailed,
by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Supplemental Indenture pursuant to Articles 8 or 11 hereof. 

28

 

        The
notice will identify the Notes to be redeemed and will state: 

        (1)   the
redemption date; 

        (2)   the
redemption price; 

        (3)   if
any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a
new Note or Notes in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note; 

        (4)   the
name and address of the Paying Agent; 

        (5)   that
Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; 

        (6)   that,
unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; 

        (7)   the
paragraph of the Notes and/or Section of this Supplemental Indenture pursuant to which the Notes called for redemption are being redeemed; and 

        (8)   that
no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. 

        At
the Company's request, the Trustee will give the notice of redemption in the Company's name and at its expense; provided, however, that
the Company has delivered to the Trustee, at least 45 days prior to the redemption date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in the preceding paragraph. 

Section 3.04    Effect of Notice of Redemption.

        Once
notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption
price. A notice of redemption may not be conditional. 

Section 3.05    Deposit of Redemption or Purchase Price.

        One
Business Day prior to the redemption or purchase date, the Company will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of
and accrued interest on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly return to the Company any money deposited with the Trustee or the Paying Agent
by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest on, all Notes to be redeemed or purchased. 

        If
the Company complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes
called for redemption or purchase. If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest
shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or purchase is not so paid upon surrender for
redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such
principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. 

29

 

Section 3.06    Notes Redeemed or Purchased in Part.

        Upon
surrender of a Note that is redeemed or purchased in part, the Company will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the
expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered. 

Section 3.07    Optional Redemption.

        (a)   At
any time prior to February 15, 2008, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under this
Supplemental Indenture at a redemption price of 109.25% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of a sale of Equity
Interests (other than Disqualified Stock) of the Company; provided that: 

        (1)   at
least 65% of the aggregate principal amount of Notes originally issued under this Supplemental Indenture (excluding Notes held by the Company and its Subsidiaries)
remains outstanding immediately after the occurrence of such redemption; and 

        (2)   the
redemption occurs within 90 days of the date of the closing of such sale of Equity Interests. 

        (b)   Except
pursuant to the preceding paragraph, the Notes will not be redeemable at the Company's option prior to February 15, 2009. 

        (c)   On
or after February 15, 2009, the Company may redeem all or a part of the Notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest on the Notes redeemed to the applicable redemption date, if redeemed during the twelve-month
period beginning on February 15 of the years indicated below, subject to the rights of Holders on the relevant record date to receive interest on the relevant interest payment date: 

	Year
 
	 	Percentage

	2009	 	104.6250%
	2010	 	102.3125%
	2011 and thereafter	 	100.0000%

        (d)   Any
redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. 

Section 3.08    Mandatory Redemption; No Sinking Fund.

        The
Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes. 

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Section 3.09    Offer to Purchase by Application of Excess Proceeds.

        In
the event that, pursuant to Section 4.10 hereof, the Company is required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below. 

        The
Asset Sale Offer shall be made to all Holders and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in this Supplemental Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain open
for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the
"Offer Period"). No later than three Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company will apply all Excess Proceeds (the "Offer Amount") to the purchase of Notes and such other  pari passu
Indebtedness (on a pro rata basis, if applicable) or, if less than the Offer
Amount has been tendered, all Notes and other Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased will be made in the same manner as interest payments are
made. 

        If
the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a
Note is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Notes pursuant to the Asset Sale Offer. 

        Upon
the commencement of an Asset Sale Offer, the Company will send, by first class mail, a notice to the Trustee and each of the Holders. The notice will contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the terms of the Asset Sale Offer, will state: 

        (1)   that
the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer will remain open; 

        (2)   the
Offer Amount, the purchase price and the Purchase Date; 

        (3)   that
any Note not tendered or accepted for payment will continue to accrue interest; 

        (4)   that,
unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest after the Purchase
Date; 

        (5)   that
Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only; 

        (6)   that
Holders electing to have Notes purchased pursuant to any Asset Sale Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect
Purchase" attached to the Notes completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the address specified in the
notice at least three days before the Purchase Date; 

        (7)   that
Holders will be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration
of the Offer Period, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased; 

31

 

        (8)   that,
if the aggregate principal amount of Notes and other pari passu Indebtedness surrendered by holders thereof
exceeds the Offer Amount, the Company will select the Notes and other pari passu Indebtedness to be purchased on a  pro rata basis based on the
principal amount of Notes and such other pari passu
Indebtedness surrendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, will be purchased); and 

        (9)   that
Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer). 

        On
or before the Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to
be delivered to the Trustee the Notes properly accepted together with an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with
the terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company will promptly issue a new Note,
and the Trustee, upon written request from the Company, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of
the Asset Sale Offer on the Purchase Date. 

        Other
than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01
through 3.06 hereof. 

 
 

ARTICLE 4
  COVENANTS    
    

Section 4.01    Payment of Notes.

        The
Company will pay or cause to be paid the principal of, premium, if any, and interest on, the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any,
and interest will be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 11:00 a.m. Eastern Time on the due date money deposited
by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. 

        The
Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess
of the then applicable interest rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful. 

Section 4.02    Maintenance of Office or Agency.

        The
Company will maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate or agent of the Trustee,
Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this
Supplemental Indenture may be served, if and to the extent required by the rules and regulations of the SEC or other relevant regulatory body. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or agency. If at any time the Company fails to maintain any such required office or agency or fails to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. 

32

 

        The
Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or rescission will in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency. 

        The
Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 hereof. 

Section 4.03    Reports.

        (a)   Whether
or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company will furnish to the Holders of Notes or cause the
Trustee to furnish to the Holders of Notes, within the time periods specified in the SEC's rules and regulations: 

        (1)   all
quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if the Company were
required to file such reports; and 

        (2)   all
current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports. 

        All
such reports shall be prepared in all material respects in compliance with all of the rules and regulations applicable to such reports. Each annual report on
Form 10-K shall include a report on the Company's consolidated financial statements by the Company's certified independent accountants. In addition, the Company will file a
copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to
such reports (unless the SEC will not accept such a filing). The Company will at all times comply with TIA § 314(a). 

        If,
at any time, the Company is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, the Company will nevertheless continue filing the reports
specified in the preceding paragraphs with the SEC within the time periods specified above unless the SEC will not accept such a filing. The Company will not take any action for the purpose of causing
the SEC not to accept any such filings. If, notwithstanding the foregoing, the SEC will not accept the Company's filings for any reason, the Company will post the reports referred to in the preceding
paragraph on its website within the time periods that would apply if the Company were required to file those reports with the SEC. 

        (b)   If
the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by paragraph (a)
of this Section 4.03 will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Management's Discussion and Analysis of
Financial Condition and Results of Operations, of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the consolidated financial condition
and results of operations of the Company. 

33

 

        (c)   For
so long as any Notes remain outstanding, if at any time they are not required to file with the SEC the reports required by paragraphs (a) and (b) of
this Section 4.03, the Company and the Guarantors will furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act. 

Section 4.04    Compliance Certificate.

        (a)   The
Company and each Guarantor (to the extent that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 90 days after the end of each
fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing
Officers (in their capacities as such and not in their personal capacities) with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this
Supplemental Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Supplemental Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Supplemental Indenture (or, if a
Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect
thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto. 

        (b)   So
long as any of the Notes are outstanding, the Company will deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. 

Section 4.05    Taxes.

        The
Company will pay, and will cause each of its Restricted Subsidiaries and any other Subsidiary with whom the Company or any Restricted Subsidiary is jointly and severally liable to
pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the Notes. 

Section 4.06    Stay, Extension and Usury Laws.

        The
Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Supplemental Indenture; and
the Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted. 

34

 

Section 4.07    Restricted Payments.

        (a)   The
Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly: 

        (1)   declare
or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company's or any
of its Restricted Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company and other
than dividends or distributions payable to the Company or a Restricted Subsidiary of the Company); 

        (2)   purchase,
redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity
Interests of the Company or any direct or indirect parent of the Company; 

        (3)   make
any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Company or any Guarantor that is
contractually subordinated to the Notes or to any Note Guarantee (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except a payment of
interest or principal at the Stated Maturity thereof; or 

        (4)   make
any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as
"Restricted Payments"), 

unless,
at the time of and after giving effect to such Restricted Payment: 

        (1)   no
Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; 

        (2)   the
Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning
of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09(a) hereof; and 

        (3)   such
Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries since the date of this
Supplemental Indenture (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (7) and (8) of paragraph (b) of this Section 4.07), is less than the sum,
without duplication of: 

        (A)  50%
of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the
date of this Supplemental Indenture to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

35

 

        (B)  100%
of the aggregate net cash proceeds received by the Company since the date of this Supplemental Indenture (i) as a contribution to its common equity capital
or from the issue or sale of Equity Interests of the Company including upon exercise of stock options whether issued before or after the date of this Supplemental Indenture (other than Disqualified
Stock) (excluding the issue or sale of common stock of the Company being used to finance, in part, the Acquisition, other than any common stock of the Company issued pursuant to any
over-allotment option granted to the underwriters in connection therewith) or (ii) from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company); plus

        (C)  to
the extent that any Restricted Investment that was made after the date of this Supplemental Indenture is sold for cash or otherwise liquidated or repaid for cash, the
lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment;  plus

        (D)  to
the extent that any Unrestricted Subsidiary of the Company designated as such after the date of this Supplemental Indenture is redesignated as a Restricted Subsidiary
after the date of this Supplemental Indenture, the lesser of (i) the Fair Market Value of the Company's Investment in such Subsidiary as of the date of such redesignation or (ii) such
Fair Market Value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary after the date of this Supplemental Indenture;  plus

        (E)  50%
of (i) any dividends, interest, intercompany loan payments or other distributions received in cash by the Company or a Wholly-Owned Restricted Subsidiary of
the Company after the date of this Supplemental Indenture from an Unrestricted Subsidiary of the Company, to the extent that such dividends, interest, intercompany loan payments or other distributions
were not otherwise included in the Consolidated Net Income of the Company for such period; (ii) without duplication, any amounts received in cash by the Company or a Wholly-Owned Restricted
Subsidiary of the Company after the date of this Supplemental Indenture representing the proceeds of any settlement of any Hedging Obligations, to the extent that such dividends or cash proceeds
represent gains previously recognized under GAAP and were not otherwise included in calculating the Consolidated Net Income of the Company; and (iii) the amount of any marketing, administration
or other fee received in cash by the Company or a Wholly Owned Restricted Subsidiary from an Unrestricted Subsidiary to the extent such amounts were not included in the Consolidated Net Income of the
Company for such period; less 100% of any payment made in settlement of any Hedging Obligations of the Company and its Restricted Subsidiaries to the
extent such payment represents cumulative net losses previously recognized under GAAP and not previously deducted in calculating the Consolidated Net Income of the Company. 

        (b)   So
long as no Default has occurred and is continuing or would be caused thereby, the provisions of Section 4.07(a) hereof will not prohibit: 

        (1)   the
payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or giving of the
redemption notice, as the case may be,, if at the date of declaration or notice the dividend or redemption payment would have complied with the provisions of this Supplemental Indenture; 

36

 

        (2)   the
making of any Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company)
of, Equity Interests of the Company (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to the Company;  provided that the amount of any such net
cash proceeds that are utilized for any such Restricted Payment will be excluded from clause (3)(B) of
Section 4.07(a) hereof; 

        (3)   the
repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of the Company or any Guarantor that is contractually subordinated to
the Notes or to any Note Guarantee with (i) the net cash proceeds from a substantially concurrent incurrence of Permitted Refinancing Indebtedness or (ii) after the completion of a
Change in Control Offer pursuant to the terms of Section 4.15 hereof, to the extent required pursuant to any similar change of control offer provision of the indenture or other agreement
governing Subordinated Indebtedness (including the Subordinated Notes); 

        (4)   the
repurchase, redemption, defeasance or other acquisition or retirement for value of the Company's Subordinated Notes in the event that the daily closing sale price
per share of the Company's common stock on the Nasdaq National Market (or, if the Company's common stock is no longer traded on the Nasdaq National Market, the principal public trading market,
including the Toronto Stock Exchange, for such common stock) for a period of at least ten (10) consecutive Trading Days exceeds 120% of the then-applicable conversion price of the
Subordinated Notes, determined in accordance with the terms of the Subordinated Note Indenture as in effect on the date of this Supplemental Indenture; 

        (5)   the
payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the
holders of its Equity Interests who are not Affiliates of the Company, except Restricted Subsidiaries of the Company, on a pro rata basis; 

        (6)   the
repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any
current or former officer, trustee, director or employee of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, shareholders'
agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not
exceed $2.0 million in any twelve-month period; 

        (7)   the
repurchase of Equity Interests deemed to occur upon the exercise of stock options or stock appreciation rights to the extent such Equity Interests represent a
portion of the exercise price of those stock options or stock appreciation rights; 

        (8)   the
declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company issued on or after the
date of this Supplemental Indenture in accordance with the Fixed Charge Coverage test set forth in Section 4.09 hereof; 

        (9)   payments
or distributions to shareholders exercising appraisal or discount rights pursuant to applicable law pursuant to or in connection with a merger, consolidation or
transfer of all or substantially all of the Company and its Restricted Subsidiary assets that complies with the provisions of this Supplemental Indenture; 

37

 

        (10) in
the event of a Change of Control, and if no Default or Event of Default shall have occurred and be continuing, the payment, purchase, redemption, defeasance or other
acquisition or retirement of Indebtedness of the Company or any Guarantor that is subordinated or junior in right of payment to the Notes or the Guarantee of such Guarantor, in each case, at a
purchase price not greater than 101% of the principal amount of such Indebtedness, plus any accrued and unpaid interest therein; provided that prior or
contemporaneously with such payment, purchase, redemption or defeasance or other acquisition or retirement, the Company (or a third party to the extent permitted by the indenture) has made the Change
of Control Offer with respect to the Notes and has repurchased all Notes validly tendered and not withdrawn in connection with such Change of Control Offer; 

        (11) in
the event of an Asset Sale which requires the Company to make an Asset Sale Offer, and if no Default or Event of Default shall have occurred and be continuing, the
payment, purchase, redemption, defeasance or other acquisition or retirement of Indebtedness of the Company or any Guarantor that is subordinated or junior in right of payment to the Notes or the
Guarantee of such Guarantor, in each case, at a purchase price not greater than 100% of the principal amount of such Indebtedness, plus any accrued and unpaid interest therein;  provided that prior or
contemporaneously with such payment, purchase, redemption or defeasance or other acquisition or retirement, the Company has made
an Asset Sale Offer with respect to the Notes and has repurchased all Notes validly tendered and not withdrawn in connection with such Asset Sale Offer; 

        (12) the
purchase, redemption, acquisition, cancellation or other retirement for a nominal value per right of any rights granted to all the holders of Common Stock of the
Company pursuant to any shareholders' rights plan adopted for the purpose of protecting shareholders from unfair takeover practices; provided that any
such purchase, redemption, acquisition, cancellation or other retirement of such rights shall not be for the purpose of evading the limitations of this covenant (as determined in good faith by the
Board of Directors of the Company); and 

        (13) other
Restricted Payments in an aggregate amount not to exceed $15.0 million since the date of this Supplemental Indenture. 

        The
amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or
issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any assets or securities that are required to be valued by this
Section 4.07 will be determined in good faith (a) in the case of assets or securities of $5.0 million or less by the Chief Financial Officer, Controller or Treasurer of the
Company set forth in a certificate delivered to the Trustee, and (b) in the case of assets or securities valued at more than $5.0 million by the Board of Directors of the Company, and
set forth in an Officers Certificate delivered to the Trustee. The Board of Directors' determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing in the United States or Canada if the Fair Market Value of any such non-cash Restricted Payment exceeds $20.0 million. 

38

   
Section 4.08    Dividend and Other Payment Restrictions Affecting Subsidiaries.

        (a)   The
Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to: 

        (1)   pay
dividends or make any other distributions on its Capital Stock to the Company or any of its Restricted Subsidiaries or with respect to any other interest or
participation in, or measured by, its profits, or pay any indebtedness owed to the Company or any of its Restricted Subsidiaries; 

        (2)   make
loans or advances to the Company or any of its Restricted Subsidiaries; or 

        (3)   sell,
lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries. 

        (b)   The
restrictions in Section 4.08(a) hereof will not apply to encumbrances or restrictions existing under or by reason of: 

        (1)   agreements
governing Existing Indebtedness and Credit Facilities as in effect on the date of this Supplemental Indenture and any amendments, restatements, modifications,
renewals, supplements, refundings, replacements or refinancings of those agreements; provided that the amendments, restatements, modifications,
renewals, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained
in those agreements on the date of this Supplemental Indenture; 

        (2)   this
Supplemental Indenture, the Notes and the Note Guarantees; 

        (3)   applicable
law, rule, regulation or order; 

        (4)   any
instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of this Supplemental Indenture to be incurred; 

        (5)   customary
non-assignment provisions in contracts and licenses entered into in the ordinary course of business; 

        (6)   purchase
money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property purchased or
leased of the nature described in clause (3) of Section 4.08(a) hereof; 

        (7)   any
agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending the sale or other
disposition; 

        (8)   Permitted
Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced; 

39

 

        (9)   Liens
permitted to be incurred under the provisions of Section 4.12 hereof that limit the right of the debtor to dispose of the assets subject to such Liens; 

        (10) provisions
limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements,
Capital Stock sale agreements and other similar agreements entered into with the approval of the Company's Board of Directors, which limitation is applicable only to the assets, or (in the case of
Capital Stock sales) entities, that are the subject of such agreements; 

        (11) restrictions
on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and 

        (12) agreements
governing Indebtedness permitted to be incurred by Restricted Subsidiaries of the Company under the provisions of Section 4.09 hereof;  provided that such agreements (except those agreements entered
into pursuant to clause (14) of the definition of "Permitted Debt") are not
materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in the agreements governing Credit Facilities as in effect on the date
of this Supplemental Indenture. 

Section 4.09    Incurrence of Indebtedness and Issuance of Preferred Stock.

        (a)   The
Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and the
Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided,  however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Company's Restricted Subsidiaries
that are Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as the case
may be, would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been
incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period. 

        (b)   The
provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"): 

        (1)   the
incurrence by the Company and its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount
at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) not to exceed the greater of (x) $85.0 million less the aggregate amount of all Net Proceeds of Asset Sales
applied by the Company or any of its Restricted Subsidiaries since the date of this Supplemental Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit
Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof, or (y) the amount of the Borrowing Base on the date of
incurrence; 

40

 

        (2)   the
incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; 

        (3)   the
incurrence by the Company of Indebtedness represented by the Notes to be issued on the date of this Supplemental Indenture; 

        (4)   the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, project financing or
purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or
equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund,
refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed at any time outstanding $20.0 million plus an amount, not to exceed
$10.0 million, equal to all German federal and state grant receivables in connection therewith; 

        (5)   the
incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to
refund, refinance, replace, defease or discharge any Indebtedness that was permitted by this Supplemental Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4),
(5) or (14) of this Section 4.09(b); 

        (6)   the
incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries;  provided, however, that: 

        (A)  if
the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be expressly subordinated to
the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and 

        (B)  (1)
any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary of the Company and (2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in
each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6); 

        (7)   the
issuance by any of the Company's Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock;  provided, however, that: 

        (A)  any
subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary
of the Company; and 

41

 

        (B)  any
sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, 

will
be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7); 

        (8)   the
incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations (which may, but need not be, under Credit Facilities) in the ordinary course
of business and not for speculation; 

        (9)   the
guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by
another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or  pari passu with the Notes, then
the Guarantee shall be subordinated or pari passu, as applicable,
to the same extent as the Indebtedness guaranteed; 

        (10) the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, self-insurance obligations,
bankers' acceptances, performance and surety bonds in the ordinary course of business; 

        (11) the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft
or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; 

        (12) Indebtedness
of a Restricted Subsidiary incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than
Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary of or was otherwise acquired by the Company); provided, however, that for any such
Indebtedness outstanding at any time under this clause (12), on the date that such Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of additional
Indebtedness pursuant to Section 4.09(a) hereof and the Company's Fixed Charge Coverage Ratio would not be reduced after giving effect to the incurrence of such Indebtedness pursuant to this
clause (12); 

        (13) Indebtedness
arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in
each case incurred or assumed in connection with the disposition of any assets or property or Capital Stock of a Restricted Subsidiary; and 

        (14) the
incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness (which may, but need not, be pursuant to Credit Facilities) in an
aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or
discharge any Indebtedness incurred pursuant to this clause (14), not to exceed $20.0 million. 

        The
Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other
Indebtedness of the Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical
terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness solely by
virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. 

42

 

        For
purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of
Permitted Debt described in clauses (1) through (14) above or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of
Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit
Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially be deemed to have been incurred on such date in reliance on the
exception provided by clause (1) of the definition of Permitted Debt. Indebtedness permitted by this covenant need not be permitted solely by reference to one provision permitting such
Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness. The accrual of interest, the accretion or
amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness
due to a change in accounting principles, and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred
stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.09;  provided, in each such case, that the amount
of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. For
purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated
in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in
the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign
currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such
refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal
amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Supplemental Indenture, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
incur pursuant to this Section 4.09 shall not be or be deemed to be exceeded as a result of fluctuations in exchange rates or currency values. 

        The
amount of any Indebtedness outstanding as of any date will be: 

        (1)   the
accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; 

        (2)   the
principal amount of the Indebtedness, in the case of any other Indebtedness; and 

        (3)   in
respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of: 

        (A)  the
Fair Market Value of such assets at the date of determination; and 

        (B)  the
amount of the Indebtedness of the other Person. 

43

 

Section 4.10    Asset Sales.

        The
Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless: 

        (1)   the
Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets
or Equity Interests issued or sold or otherwise disposed of (provided that Fair Market Value shall be determined on the date of contractually agreeing
to such Asset Sale); and 

        (2)   at
least 75% of the consideration received in the Asset Sale by the Company or such Restricted Subsidiary is in the form of cash. For purposes of this provision, each of
the following shall be deemed to be cash: 

        (A)  Cash
Equivalents; 

        (B)  any
liabilities, as shown on the Company's most recent consolidated balance sheet, of the Company or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets pursuant to an agreement that releases the Company or such
Restricted Subsidiary from, or indemnifies the Company or such Restricted Subsidiary against, further liability; 

        (C)  any
securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted within 60 days by the
Company or such Restricted Subsidiary into cash or Cash Equivalents, to the extent of the cash or Cash Equivalents received in that conversion; and 

        (D)  any
stock or assets of the kind referred to in clauses (2) or (4) of the next paragraph of this Section 4.10. 

        Within
365 days after the receipt of any Net Proceeds from an Asset Sale, the Company (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds: 

        (1)    to
permanently repay or prepay Indebtedness and other Obligations under a Credit Facility and, if the Indebtedness repaid is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto; 

        (2)    to
acquire (including by way of a purchase of assets or stock, merger, consolidation or otherwise), or enter into a binding commitment to acquire within 120 days
thereafter, all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is
or becomes a Restricted Subsidiary of the Company; 

        (3)    to
make, or enter into a binding commitment to make within 60 days thereafter, a capital expenditure; or 

        (4)    to
acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business. 

44

 

Pending
the final application of any Net Proceeds, the Company or a restricted Subsidiary may temporarily reduce revolving credit borrowings (under Credit Facilities or otherwise) or otherwise invest
the Net Proceeds in any manner that is not prohibited by this Supplemental Indenture. 

        Any
Net Proceeds from Asset Sales that are not applied or invested as provided in the second paragraph of this Section 4.10 will constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $15.0 million, within five days thereof, the Company will make an Asset Sale Offer to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this
Supplemental Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets in accordance with Section 3.09 hereof to purchase the maximum principal amount of Notes
and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to
100% of the principal amount plus accrued and unpaid interest to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company
may use those Excess Proceeds for any purpose not otherwise prohibited by this Supplemental Indenture. If the aggregate principal amount of Notes and other  pari passu Indebtedness tendered into
such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such
other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each
Asset Sale Offer, the amount of Excess Proceeds will be reset at zero. 

        The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the
provisions of Section 3.09 hereof or this Section 4.10, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its
obligations under Section 3.09 hereof or this Section 4.10 by virtue of such compliance. 

Section 4.11    Transactions with Affiliates.

        (a)   The
Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the Company (each an "Affiliate Transaction"), unless: 

        (1)   the
Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have reasonably been obtained
in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and 

        (2)   the
Company delivers to the Trustee: 

        (A)  with
respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5.0 million, a resolution of
the Board of Directors of the Company set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a) and that
such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of the Company; and 

45

 

        (B)  with
respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $20.0 million, an opinion as
to the fairness to the Company or such Restricted Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national
standing in the United States or Canada. 

        (b)   The
following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 4.11(a) hereof: 

        (1)   any
employment agreement, employee benefit plan, trustee or director indemnification agreement or any similar arrangement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto; 

        (2)   transactions
between or among the Company and/or its Restricted Subsidiaries; 

        (3)   transactions
with a Person (other than an Unrestricted Subsidiary of the Company) that is an Affiliate of the Company solely because the Company owns, directly or
through a Restricted Subsidiary, an Equity Interest in, or controls, such Person; 

        (4)   payment
of reasonable compensation or fees to trustees, directors or officers of the Company and its Restricted Subsidiaries; 

        (5)   any
issuance of Equity Interests (other than Disqualified Stock) of the Company to Affiliates of the Company; 

        (6)   Restricted
Payments that do not violate Section 4.07 hereof; 

        (7)   Permitted
Investments that are permitted by this Supplemental Indenture; 

        (8)   provision
of corporate-level administrative, marketing, tax, accounting, budgeting, treasury, finance, employee benefits, legal, risk management and other similar
services for the benefit of Unrestricted Subsidiaries of the Company on substantially the same terms provided to Restricted Subsidiaries of the Company; 

        (9)   payment
of consolidated taxes on behalf of Restricted Subsidiaries and Unrestricted Subsidiaries; 

        (10) (a)
purchases, sales or other transfers of pulp, fibre, chemicals and other consumables between or among the Company or any Restricted Subsidiary and any Unrestricted
Subsidiary at market prices pursuant to arrangements approved by the Company's Board of Directors as being fair, from a financial point of view, to the Company or the applicable Restricted Subsidiary,
as the case may be; (b) purchases, sales or other transfers of spare parts or mill consumables between any Restricted Subsidiary and any Unrestricted Subsidiary at book value; (c) the
provision of logistics, planning, and transportation services between and/or among any Restricted Subsidiary and Unrestricted Subsidiary at cost; and (d) other transactions with customers,
clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Supplemental Indenture, that are
fair to the Company or the Restricted Subsidiary, as the case may be, in the reasonable determination of the Company's Board of Directors; 

46

 

        (11) payment
of sales agency, administration, management and other fees, payment of interest, principal, dividends or other distributions, in case from an Unrestricted
Subsidiary to the Company or a Restricted Subsidiary to the Company; and 

        (12) loans
or advances to employees in the ordinary course of business not to exceed $2.0 million in the aggregate at any one time outstanding. 

Section 4.12    Liens.

        The
Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist any Lien of any kind on any asset now
owned or hereafter acquired, except Permitted Liens, unless all payments due under this Supplemental Indenture and the Notes are secured on an equal and ratable basis with the obligations so secured
until such time as such obligations are no longer secured by a Lien. 

Section 4.13    Business Activities.

        The
Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to
the Company and its Restricted Subsidiaries taken as a whole. 

Section 4.14    Corporate Existence.

        Subject
to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect: 

        (1)   its
corporate existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as
the same may be amended from time to time) of the Company or any such Subsidiary; and 

        (2)   the
rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; 

provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other
existence of any of its Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes. 

Section 4.15    Offer to Repurchase Upon Change of Control.

        (a)   Upon
the occurrence of a Change of Control, the Company will make an offer (a "Change of Control Offer") to each Holder
to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000) of that Holder's Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes
repurchased plus accrued and unpaid interest, if any, on the Notes repurchased to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the
relevant interest payment date (the "Change of Control Payment"). Within ten days following any Change of Control, the Company will mail a notice to
each Holder describing the transaction or transactions that constitute the Change of Control and stating: 

47

 

        (1)   that
the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered will be accepted for payment; 

        (2)   the
purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the
"Change of Control Payment Date"); 

        (3)   that
any Note not tendered will continue to accrue interest; 

        (4)   that,
unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest after the Change of Control Payment Date; 

        (5)   that
Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled "Option of Holder
to Elect Purchase" attached to the Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Payment Date; 

        (6)   that
Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the
Change of Control Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have the Notes purchased; and 

        (7)   that
Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof. 

        The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws
and regulations are applicable in connection with the repurchase of the Notes as a result of a Change in Control. To the extent that the provisions of any securities laws or regulations conflict with
the provisions of Sections 3.09 or 4.15 hereof, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under
Section 3.09 hereof or this Section 4.15 by virtue of such compliance. 

        (b)   On
the Change of Control Payment Date, the Company will, to the extent lawful: 

        (1)   accept
for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; 

        (2)   deposit
with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and 

        (3)   deliver
or cause to be delivered to the Trustee the Notes properly accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or
portions of Notes being purchased by the Company. 

        The
Paying Agent will promptly mail (but in any case not later than five days after the Change of Control Payment Date) to each Holder of Notes properly tendered the Change of Control
Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 

48

 

        (c)   Notwithstanding
anything to the contrary in this Section 4.15, the Company will not be required to make a Change of Control Offer upon a Change of Control if
(1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.15 and Section 3.09
hereof and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to Section 3.07(c) hereof,
unless and until there is a default in payment of the applicable redemption price. 

Section 4.16    No Amendment to Subordination Provisions.

        Without
the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, the Company will not amend, modify or alter the Subordinated Note
Indenture in any way to: 

        (1)   increase
the rate of or advance the time for payment of interest on any Subordinated Notes; 

        (2)   increase
the principal of, advance the final maturity date of or shorten the Weighted Average Life to Maturity of any Subordinated Notes; 

        (3)   alter
the redemption provisions, increase the price or otherwise alter terms at which the Company is required to offer to purchase any Subordinated Notes; or 

        (4)   amend
the provisions of Article 5 of the Subordinated Note Indenture (which relate to subordination); 

provided that none of the foregoing shall prohibit amendments to the Subordinated Note Indenture that provide for satisfaction of any obligation
thereunder solely in common stock of the Company. 

Section 4.17    Limitation on Sale and Leaseback Transactions.

        The
Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided
that the Company or any Restricted Subsidiary may enter into a sale and leaseback transaction if: 

        (1)   the
Company or that Restricted Subsidiary, as applicable, could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale
and leaseback transaction under the Fixed Charge Coverage Ratio test in Section 4.09(a) hereof and (b) incurred a Lien to secure such Indebtedness pursuant to the provisions of
Section 4.12 hereof; 

        (2)   the
gross cash proceeds of that sale and leaseback transaction are at least equal to the Fair Market Value of the property that is the subject of that sale and leaseback
transaction; and 

        (3)   the
transfer of assets in that sale and leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with,
Section 4.10 hereof. 

49

  

Section 4.18    Payments for Consent.

        The
Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of
Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Supplemental Indenture or the Notes unless such consideration is offered to be paid and is
paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. 

Section 4.19    Limitation on Issuances of Guarantees of Indebtedness.

        The
Company will not permit any of its Restricted Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to secure the payment of any other Indebtedness of the Company
(except Permitted Liens) unless such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to this Supplemental Indenture providing for the Guarantee of the payment of
the Notes by such Restricted Subsidiary, which Guarantee will be senior to or pari passu with such Restricted Subsidiary's Guarantee of or pledge
to secure such other Indebtedness. 

Section 4.20    Note Guarantees.

        If
the Company or any of its Restricted Subsidiaries acquires or creates a Domestic Subsidiary after the date of this Supplemental Indenture, then the Company will cause that newly
acquired or created Domestic Subsidiary (other than a Domestic Subsidiary the sole business of which is the direct or indirect ownership of one or more Foreign Subsidiaries) to execute a Note
Guarantee pursuant to a supplemental indenture in the form and substance of Exhibit C attached hereto and deliver an Opinion of Counsel, reasonably satisfactory to the Trustee, to the Trustee
within 10 Business Days of the date on which it was acquired or created to the effect that such supplemental indenture has been duly authorized, executed and delivered by that Domestic Subsidiary and
constitutes a valid and binding agreement of that Domestic Subsidiary, enforceable in accordance with its terms (subject to customary exceptions);  provided that any Domestic Subsidiary that does not
constitute a Significant Subsidiary need not become a Guarantor until such time as it has become a
Significant Subsidiary based on the financial statements of the Company and such Domestic Subsidiary as of and for the Company's most recently completed fiscal year. The Company may designate any
Restricted Subsidiary as a Guarantor at any time. The form of such Note Guarantee is attached as Exhibit B hereto. 

        Section 4.21    Designation of Restricted and Unrestricted Subsidiaries.

        The
Board of Directors of the Company may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary
is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary designated as
Unrestricted will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under Section 4.07 hereof or under one or
more clauses of the definition of Permitted Investments, as determined by the Company. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors of the Company may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if that
redesignation would not cause a Default. 

50

 

        Any
designation of a Restricted Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of
the Board of Directors giving effect to such designation and an Officers' Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07
hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes
of this Supplemental Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09 hereof, the Company will be in default of such covenant. The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if (1) such Indebtedness is permitted under
Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or
Event of Default would be in existence following such designation. 

 
 

ARTICLE 5
  SUCCESSORS    
    

Section 5.01    Merger, Consolidation, or Sale of Assets.

        The
Company shall not, directly or indirectly: (i) consolidate or merge with or into another Person (whether or not the Company is the surviving corporation); or (2) sell,
assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person, unless: 

        (1)   either:

        (A)  the
Company is the surviving corporation; or 

        (B)  the
Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other
disposition has been made is a corporation organized or existing under the laws of the United States, any state of the United States or the District of Columbia, or the laws of Canada or
any province or territory thereof; 

        (2)   the
Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance or
other disposition has been made assumes all the obligations of the Company under the Notes, this Supplemental Indenture and pursuant to agreements reasonably satisfactory to the Trustee; 

        (3)   immediately
after such transaction, no Default or Event of Default exists; and 

        (4)   the
Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or
other disposition has been made would, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning
of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a)
hereof. 

        In
addition, the Company will not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. 

51

 

        This
Section 5.01 will not apply to: 

        (1)   a
merger of the Company with an Affiliate solely for the purpose of reincorporating the Company in another jurisdiction; 

        (2)   a
conversion of the Company from a business trust into a corporation organized or existing under the laws of the United States, any state of the
United States or the District of Columbia, including by way of a merger with an Affiliate; or 

        (3)   any
consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the Company and its Restricted
Subsidiaries. 

Section 5.02    Successor Corporation Substituted.

        Upon
any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of the Company in a
transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the successor Person formed by such consolidation or into or with which the Company is merged or
to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition, the provisions of this Supplemental Indenture referring to the "Company" shall refer instead to the successor Person and not to the
Company), and may exercise every right and power of the Company under this Supplemental Indenture with the same effect as if such successor Person had been named as the Company herein;  provided, however,
 that the predecessor Company shall not be relieved from the obligation to pay the principal of and interest on the Notes except in
the case of a sale of all of the Company's assets in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof. 

 
 

ARTICLE 6
  DEFAULTS AND REMEDIES    
    

Section 6.01    Events of Default.

        Each
of the following is an "Event of Default": 

        (1)   default
for 30 days in the payment when due of interest on the Notes; 

        (2)   default
in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes; 

        (3)   failure
by the Company or any of its Restricted Subsidiaries to comply with the provisions of Sections 4.10, 4.15 or 5.01 hereof; 

        (4)   failure
by the Company or any of its Restricted Subsidiaries for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding voting as a single class to comply with any of the other agreements in this Supplemental Indenture; 

        (5)   default
under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by
the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is
created after the date of this Supplemental Indenture, if that default: 

52

 

        (A)  is
caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default"); or 

        (B)  results
in the acceleration of such Indebtedness prior to its express maturity, 

and,
in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $15.0 million or more; 

        (6)   failure
by the Company or any of its Restricted Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of
$15.0 million, which judgments are not paid, discharged or stayed for a period of 60 days; 

        (7)   the
Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law: 

        (A)  commences
a voluntary case, 

        (B)  consents
to the entry of an order for relief against it in an involuntary case, 

        (C)  consents
to the appointment of a custodian of it or for all or substantially all of its property, or 

        (D)  makes
a general assignment for the benefit of its creditors; 

        (8)   a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: 

        (A)  is
for relief against the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary in an involuntary case; 

        (B)  appoints
a custodian of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any
group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary; or 

        (C)  orders
the liquidation of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary; 

and
the order or decree remains unstayed and in effect for 60 consecutive days; and 

53

 

        (9)   except
as permitted by this Supplemental Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be
in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee. 

Section 6.02    Acceleration.

        In
the case of an Event of Default specified in clause (7) or (8) of Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary of the Company that
is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding
Notes may declare all the Notes to be due and payable immediately. 

        Upon
any such declaration, the Notes shall become due and payable immediately. 

        The
Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of all of the Holders, rescind an acceleration and
its consequences, if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived. 

        If
an Event of Default occurs by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that
the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium shall also
become and be immediately due and payable, to the extent permitted by law, anything in this Supplemental Indenture or in the Notes to the contrary notwithstanding. If an Event of Default occurs prior
to February 15, 2009 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes
prior to such date, then, upon acceleration of the Notes, an additional premium shall also become and be immediately due and payable, to the extent permitted by law, in an amount, for each of the
years beginning on February 15 of the years set forth below, as set forth below (expressed as a percentage of the principal amount of the Notes on the date of payment that would otherwise be
due but for the provisions of this sentence): 

	Year
 
	 	Percentage

	2005	 	113.8750%
	2006	 	111.5625%
	2007	 	109.2500%
	2008	 	106.9375%

Section 6.03    Other Remedies.

        If
an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce
the performance of any provision of the Notes or this Supplemental Indenture. 

54

 

        The
Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of
a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law. 

Section 6.04    Waiver of Past Defaults.

        Holders
of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium, if any, or interest on, the Notes
(including in connection with an offer to purchase); provided, however, that the Holders of a majority in aggregate principal amount of the then
outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Supplemental Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon. 

Section 6.05    Control by Majority.

        Holders
of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available
to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Supplemental Indenture that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. 

Section 6.06    Limitation on Suits.

        A
Holder may pursue a remedy with respect to this Supplemental Indenture or the Notes only if: 

        (1)   such
Holder gives to the Trustee written notice that an Event of Default is continuing; 

        (2)   Holders
of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy; 

        (3)   such
Holder or Holders offer and, if requested, provide to the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or
expense; 

        (4)   the
Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and 

        (5)   during
such 60-day period, Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent
with such request. 

        A
Holder of a Note may not use this Supplemental Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. 

Section 6.07    Rights of Holders of Notes to Receive Payment.

        Notwithstanding
any other provision of this Supplemental Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and interest on the Note, on or
after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder. 

55

 

Section 6.08    Collection Suit by Trustee.

        If
an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal of, premium, if any, and interest remaining unpaid on, the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel. 

Section 6.09    Trustee May File Proofs of Claim.

        The
Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such
claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.06 of the Base Indenture. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 7.06 of the Base Indenture out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be
secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding. 

Section 6.10    Priorities.

        If
the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money and property in the following order: 

First:    to the Trustee, its agents and attorneys for amounts due under Section 7.06 of the Base Indenture, including payment of all
compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; 

Second:    to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any and interest, respectively; and 

Third:    to the Company or to such party as a court of competent jurisdiction shall direct. 

56

 

        The
Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. 

Section 6.11    Undertaking for Costs.

        In
any suit for the enforcement of any right or remedy under this Supplemental Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in
its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does
not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then
outstanding Notes. 

 
 

ARTICLE 7
  [INTENTIONALLY OMITTED]    
    

 
 

ARTICLE 8
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE    
    

Section 8.01    Option to Effect Legal Defeasance or Covenant Defeasance.

        The
Company may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, elect to have either Section 8.02
or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8. 

Section 8.02    Legal Defeasance and Discharge.

        Upon
the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the Guarantors will, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees)
on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that the Company
and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Supplemental Indenture referred to in clauses (1) and (2) below, and to have satisfied
all their other obligations under such Notes, the Note Guarantees and this Supplemental Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder: 

        (1)   the
rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium, if any, on, such Notes when such payments are due
from the trust referred to in Section 8.04 hereof; 

        (2)   the
Company's obligations with respect to such Notes under Article 2 and Section 4.02 hereof; 

        (3)   the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's and the Guarantors' obligations in connection therewith; and 

57

 

        (4)   this
Article 8. 

        Subject
to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof. 

Section 8.03    Covenant Defeasance.

        Upon
the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and each of the Guarantors will, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their obligations under the covenants contained in Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.17., 4.18, 4.19, 4.20, and 4.21 hereof and clause (4) of Section 5.01 hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 hereof are satisfied (hereinafter, "Covenant Defeasance"), and the Notes will thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be
deemed "outstanding" for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that,
with respect to the outstanding Notes and Note Guarantees, the Company and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth
in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this
Supplemental Indenture and such Notes and Note Guarantees will be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(6) hereof will not constitute Events of Default. 

Section 8.04    Conditions to Legal or Covenant Defeasance.

        In
order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03 hereof: 

        (1)   the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm, or firm of independent public accountants, to
pay the principal of, premium, if any, and interest on, the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date; 

        (2)   in
the case of an election under Section 8.02 hereof, the Company must deliver to the Trustee an Opinion of Counsel, reasonably acceptable to the Trustee,
confirming that: 

        (A)  the
Company has received from, or there has been published by, the Internal Revenue Service a ruling; or 

        (B)  since
the date of this Supplemental Indenture, there has been a change in the applicable federal income tax law, 

58

 

in
either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; 

        (3)   in
the case of an election under Section 8.03 hereof, the Company must deliver to the Trustee an Opinion of Counsel, reasonably acceptable to the Trustee,
confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; 

        (4)   no
Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a
party or by which the Company or any Guarantor is bound; 

        (5)   such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than
this Supplemental Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound; 

        (6)   the
Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes
over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and 

        (7)   the
Company must deliver to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance
or the Covenant Defeasance have been complied with. 

Section 8.05    Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.

        Subject
to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the outstanding
Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Supplemental Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the extent required by law. 

        The
Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited
pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the
outstanding Notes. 

59

 

        Notwithstanding
anything in this Article 8 to the contrary, the Trustee will deliver or pay to the Company from time to time upon the request of the Company any money or
non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. 

Section 8.06    Repayment to Company.

        Any
money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on, any Note and
remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) will be
discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect
to such trust money, and all liability of the Company as trustee thereof, will thereupon cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Company. 

Section 8.07    Reinstatement.

        If
the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof,
as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's and the Guarantors'
obligations under this Supplemental Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;  provided, however, that, if the
Company makes any payment of principal of, premium, if any, or interest on, any Note following the reinstatement of its
obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. 

 
 

ARTICLE 9
  AMENDMENT, SUPPLEMENT AND WAIVER    
    

Section 9.01    Without Consent of Holders of Notes.

        Notwithstanding
Section 9.02 hereof, the Company, the Guarantors and the Trustee may amend or supplement this Supplemental Indenture or the Notes or the Note Guarantees without
the consent of any Holder of Note: 

        (1)   to
cure any ambiguity, defect or inconsistency; 

        (2)   to
provide for uncertificated Notes in addition to or in place of certificated Notes, in order to comply with any Applicable Procedures, or otherwise alter the
provisions of Article 2 hereof in a manner that does not materially adversely affect any Holder; 

60

 

        (3)   to
provide for the assumption of the Company's or a Guarantor's obligations to the Holders of the Notes and Note Guarantees by a successor to the Company or such
Guarantor pursuant to Article 5 or Article 10 hereof; 

        (4)   to make
any change that would provide any additional rights or benefits to the Holders of the Notes or that does not, in the good faith opinion of the Board of
Directors of the Company, adversely affect the legal rights hereunder of any Holder in any material respect; 

        (5)   to
comply with requirements of the SEC in order to effect or maintain the qualification of this Supplemental Indenture under the TIA; 

        (6)   to
conform the text of this Supplemental Indenture or the Notes to any provision of the "Description of Notes" section of the Company's Prospectus Supplement dated
February 8, 2005, relating to the initial offering of the Notes, to the extent that such provision in that "Description of Notes" was intended to be a verbatim recitation of a provision of this
Supplemental Indenture, the Note Guarantees or the Notes; 

        (7)   to
provide for the issuance of Additional Notes in accordance with the limitations set forth in this Supplemental Indenture as of the date hereof; or 

        (8)   to
allow any Restricted Subsidiary to execute a supplemental indenture and/or a Note Guarantee with respect to the Notes. 

        Upon
the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 14.04 of the Base Indenture, the Trustee will join with the Company and the Guarantors in the execution of any amended or supplemental indenture
authorized or permitted by the terms of this Supplemental Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated
to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Supplemental Indenture or otherwise. 

Section 9.02    With Consent of Holders of Notes.

        Except
as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Supplemental Indenture (including, without limitation, Section 3.09,
4.10 and 4.15 hereof) and the Notes and the Note Guarantees with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including, without
limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes),
and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or
interest on, the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Supplemental Indenture or the Notes or the Note
Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a
single class (including, without limitation, consents obtained in connection with the purchase of, or tender offer or exchange offer for, the Notes). Section 2.08 hereof shall determine which
Notes are considered to be "outstanding" for purposes of this Section 9.02. 

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        Upon
the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with
the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 14.04 of the Base
Indenture, the Trustee will join with the Company and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the
Trustee's own rights, duties or immunities under this Supplemental Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amended or
supplemental indenture. 

        It
is not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but
it is sufficient if such consent approves the substance thereof. 

        After
an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company will mail to the Holders of Notes affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental
indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive
compliance in a particular instance by the Company with any provision of this Supplemental Indenture or the Notes or the Note Guarantees. However, without the consent of each Holder affected, an
amendment, supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder): 

        (1)   reduce
the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; 

        (2)   reduce
the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (except as provided above with
respect to Sections 3.09, 4.10 and 4.15 hereof); 

        (3)   reduce
the rate of or change the time for payment of interest, including default interest, on any Note; 

        (4)   waive
a Default or Event of Default in the payment of principal of, or premium, if any, or interest on, the Notes (except a rescission of acceleration of the Notes by
the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration); 

        (5)   make
any Note payable in money other than that stated in the Notes; 

        (6)   make
any change in the provisions of this Supplemental Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal
of, or interest or premium, if any, on, the Notes; 

        (7)   waive
a redemption payment with respect to any Note (other than a payment required by Sections 3.09, 4.10 or 4.15 hereof); 

        (8)   release
any Guarantor from any of its obligations under its Note Guarantee or this Supplemental Indenture, except in accordance with the terms of this Supplemental
Indenture; or 

        (9)   make
any change in the preceding amendment and waiver provisions. 

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Section 9.03    Compliance with Trust Indenture Act.

        Every
amendment or supplement to this Supplemental Indenture or the Notes will be set forth in a amended or supplemental indenture that complies with the TIA as then in effect. 

Section 9.04    Revocation and Effect of Consents.

        Until
an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds every Holder. 

        Section 9.05    Notation on or Exchange of Notes.

        The
Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the
Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. 

        Failure
to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment, supplement or waiver. 

        Section 9.06    Trustee to Sign Amendments, etc.

        The
Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amended or supplemental indenture until the Board of Directors of the Company approves it. In executing any amended or
supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 of the Base Indenture) will be fully protected in relying upon, in addition to the documents
required by Section 14.04 of the Base Indenture, an Officers' Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or
permitted by this Supplemental Indenture. 

 
 

ARTICLE 10
  NOTE GUARANTEES    
    

Section 10.01    Guarantee.

        (a)   Subject
to this Article 10, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Supplemental Indenture, the Notes or the obligations of the Company hereunder
or thereunder, that: 

        (1)   the
principal of, premium, if any, and interest on, the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid
in full or performed, all in accordance with the terms hereof and thereof; and 

63

 

        (2)   in
case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. 

        Failing
payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. 

        (b)   The
Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this
Supplemental Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenant that this Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Supplemental Indenture. 

        (c)   If
any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar
official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, will be
reinstated in full force and effect. 

        (d)   Each
Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment
in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the
maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors will have the
right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee. 

Section 10.02    Limitation on Guarantor Liability.

        Each
Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to
the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to
any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10,
result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance. 

64

 

Section 10.03    Execution and Delivery of Note Guarantee.

        To
evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached as
Exhibit B hereto will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Supplemental Indenture will be executed on behalf
of such Guarantor by one of its Officers. 

        Each
Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 hereof will remain in full force and effect notwithstanding any failure to endorse on each
Note a notation of such Note Guarantee. 

        If
an Officer whose signature is on this Supplemental Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Note
Guarantee is endorsed, the Note Guarantee will be valid nevertheless. 

        The
delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Supplemental Indenture on behalf
of the Guarantors. 

        In
the event that the Company or any of its Restricted Subsidiaries creates or acquires any Domestic Subsidiary after the date of this Supplemental Indenture, if required by
Section 4.20 hereof, the Company will cause such Domestic Subsidiary to comply with the provisions of Section 4.20 hereof and this Article 10, to the extent applicable. 

Section 10.04    Guarantors May Consolidate, etc., on Certain Terms.

        Except
as otherwise provided in Section 10.05 hereof, no Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person) another Person, other than the Company or another Guarantor, unless: 

        (1)   immediately
after giving effect to such transaction, no Default or Event of Default exists; and 

        (2)   either:

        (a)   subject
to Section 10.05 hereof, the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or
merger unconditionally assumes all the obligations of that Guarantor under this Supplemental Indenture, its Note Guarantee on the terms set forth herein or therein, pursuant to a supplemental
indenture in the form and substance set forth in Exhibit C hereto; or 

        (b)   the
Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this Supplemental Indenture, including without limitation,
Section 4.10 hereof. 

65

 

        In
case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and in the
form and substance set forth in Exhibit C hereto, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Supplemental
Indenture to be performed by the Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such
successor Person thereupon may cause to be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Note Guarantees so issued will in all respects have the same legal rank and benefit under this Supplemental Indenture as the Note Guarantees theretofore and
thereafter issued in accordance with the terms of this Supplemental Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof. 

        Except
as set forth in Articles 4 and 5 hereof, and notwithstanding clauses 2(a) and (b) above, nothing contained in this Supplemental Indenture or in any of
the Notes will prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or will prevent any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor. 

Section 10.05    Releases.

        (a)   In
the event of any sale or other disposition of all or substantially all of the assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the Capital Stock of any Guarantor, in each case to a Person that is not (either before or after giving effect to such transactions) the Company or a Restricted Subsidiary
of the Company, then such Guarantor (in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the Capital Stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor) will be released and relieved of any obligations under its Note
Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this
Supplemental Indenture, including without limitation Section 4.10 hereof. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Company in accordance with the provisions of this Supplemental Indenture, including without limitation Section 4.10 hereof, the Trustee will
execute any documents reasonably requested by the Company, at the Company's expense, in order to evidence the release of any Guarantor from its obligations under its Note Guarantee. 

        (b)   Upon
designation of by the Company of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Supplemental
Indenture, such Guarantor will be released and relieved of any obligations under its Note Guarantee. 

        (c)   Upon
Legal Defeasance in accordance with Article 8 hereof or satisfaction and discharge of this Supplemental Indenture in accordance with Article 11
hereof, each Guarantor will be released and relieved of any obligations under its Note Guarantee. 

        Any
Guarantor not released from its obligations under its Note Guarantee as provided in this Section 10.05 will remain liable for the full amount of principal of and interest and
premium, if any, on the Notes and for the other obligations of any Guarantor under this Supplemental Indenture as provided in this Article 10. 

 
 

ARTICLE 11
  SATISFACTION AND DISCHARGE    
    

Section 11.01    Satisfaction and Discharge.

        This
Supplemental Indenture will be discharged and will cease to be of further effect as to all Notes issued hereunder, when: 

66

 

        (1)   either:

        (a)   all
Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or 

        (b)   all
Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or
will become due and payable within one year and the Company has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in
U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and
discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption; 

        (2)   no
Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by
which the Company or any Guarantor is bound; 

        (3)   the
Company or any Guarantor has paid or caused to be paid all sums payable by it under this Supplemental Indenture; and 

        (4)   the
Company has delivered irrevocable instructions to the Trustee under this Supplemental Indenture to apply the deposited money toward the payment of the Notes at
maturity or on the redemption date, as the case may be. 

In
addition, the Company must deliver an Officers' Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied. 

        Notwithstanding
the satisfaction and discharge of this Supplemental Indenture, if money has been deposited with the Trustee pursuant to subclause (b) of clause (1) of this
Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive. In addition, nothing in this Section 11.01 will be deemed to discharge those provisions of
Section 7.06 of the Base Indenture, that, by their terms, survive the satisfaction and discharge of this Supplemental Indenture. 

Section 11.02    Application of Trust Money.

        Subject
to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Supplemental Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be
segregated from other funds except to the extent required by law. 

        If
the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 11.01 hereof by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's and any Guarantor's obligations under this Supplemental
Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof; provided that if the
Company has made any payment of principal of, premium, if any, or interest on, any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders
of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent. 

67

  

 
 

ARTICLE 12
  MISCELLANEOUS    
    

Section 12.01    Trust Indenture Act Controls.

        If
any provision of this Supplemental Indenture limits, qualifies or conflicts with the duties imposed by TIA §318(c), the imposed duties will control. 

Section 12.02    Notices.

        Any
notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered in Person or by first class mail (registered or
certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery, to the others' address: 

If
to the Company and/or any Guarantor: 

Mercer
International, Inc.

14900 Interurban Avenue South, Suite 282

Seattle, Washington 98168

Attention: Chief Financial Officer

Facsimile No.: (604) 683-3205 

with
copies to: 

Mercer
International, Inc.

Suite 2840

650 West Georgia Street

Vancouver, British Columbia

Canada V6B 4N8

Attention: Chief Financial Officer

Facsimile No.: (604) 684-1094 

and

Sangra,
Moller

Barristers & Solicitors

1000 Cathedral Place

925 West Georgia Street

Vancouver, British Columbia

Canada V6C 3L2

Attention: Harjit Sangra

Facsimile No.: (604) 669-8803 

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If
to the Trustee: 

Wells
Fargo Bank, N.A.

Sixth and Marquette, N9303-120,

Minneapolis, Minnesota 55479

Attention: Corporate Trust Services

Facsimile No.: (612) 667-9825 

        The
Company, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications. 

        All
notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery. 

        Any
notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery
to its address shown on the register kept by the Registrar. Any notice or communication will also be so mailed to any Person described in TIA § 313(c), to the extent required by the
TIA. Failure to mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders. 

        If
a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. 

        If
the Company mails a notice or communication to Holders, it will mail a copy to the Trustee and each Agent at the same time. 

Section 12.03    Governing Law.

        THE
INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND EACH NOTE GUARANTEE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 

Section 12.04    No Adverse Interpretation of Other Agreements.

        This
Supplemental Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan
or debt agreement may not be used to interpret this Supplemental Indenture. 

Section 12.05    Successors.

        All
agreements of the Company in this Supplemental Indenture and the Notes will bind its successors. All agreements of the Trustee in this Supplemental Indenture will bind its
successors. All agreements of each Guarantor in this Supplemental Indenture will bind its successors, except as otherwise provided in Section 10.05 hereof. 

69

 

Section 12.06    Severability.

        In
case any provision in this Supplemental Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not
in any way be affected or impaired thereby. 

Section 12.07    Counterpart Originals.

        The
parties may sign any number of copies of this Supplemental Indenture. Each signed copy will be an original, but all of them together represent the same agreement. 

Section 12.08    Table of Contents, Headings, etc.

        The
Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Supplemental Indenture and will in no way modify or restrict any of the terms or provisions hereof. 

[Signatures on following page]

70

 
 
 

SIGNATURES    
    

Dated
as of February 14, 2005 

	 	 	MERCER INTERNATIONAL, INC.
	
 	
 	

By:	

/s/ DAVID M. GANDOSSI
 Name: David M. Gandossi

Title: Secretary and Chief Financial Officer
	 	 	 	 
	
 	
 	
WELLS FARGO BANK, N.A. 
	
 	
 	

By:	

/s/ TIMOTHY P. MOWDY
 Name: Timothy P. Mowdy

Title: Assistant Vice President

71

   EXHIBIT A  

[Face of Note]

	

 	

 
	 	CUSIP/CINS                     
	

 	

 
	9.25% Senior Notes due 2013
	

 	

 
	No.             	                $
                        
	

 	

 
	MERCER INTERNATIONAL INC.
	

 	

 
	promises to pay to [                ] or registered assigns,
	

 	

 
	the principal sum of
                                         
                                          
                                          
                    DOLLARS

on February 15, 2013.
	

 	

 
	Interest Payment Dates: February 15 and August 15
	

 	

 
	Record Dates: February 1 and August 1
	

 	

 
	Dated:                                  ,
                

	
 	
 	

 	
 	

 
	 	 	MERCER INTERNATIONAL INC.
	

 	
 	

 	
 	

 
	 	 	By:	 	 
	 	 	 	 	
 Name:

Title:
	

 	
 	

 	
 	

 
	This is one of the Notes referred to

in the within-mentioned Supplemental Indenture:	 	 	 	 
	

 	
 	

 	
 	

 
	[TRUSTEE],

as Trustee

	 	 	 	 

	

 	

 	

 
	By:	 	 
	 	
 Authorized Signatory	 
	

 	

 	

 

A-1

 
EXHIBIT A  

[Back of Note]

9.25% Senior Notes due 2013 

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Supplemental Indenture]

        Capitalized
terms used herein have the meanings assigned to them in the Supplemental Indenture referred to below unless otherwise indicated. 

        (1)   INTEREST.    Mercer International, Inc., a Washington Business trust (the
"Company"), promises to pay interest on the principal amount of this Note at 9.25% per annum from February 14, 2005 until maturity. The Company
will pay interest semi-annually in arrears on February 15 and August 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided
further that the first Interest Payment Date shall be August 15, 2005. The Company will pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect to the extent lawful; it will pay
interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 

        (2)   METHOD OF PAYMENT.    The Company will pay interest on the Notes (except defaulted interest) to the Persons who
are registered Holders of Notes at the close of business on the February 1 or August 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in Section 2.12 of the First Supplemental Indenture with respect to defaulted interest. The Notes will be payable as to
principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company,
payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect to principal of and interest, and premium, if any, on, all Global Notes and all other Notes the Holders of which will have
provided wire transfer instructions to the Company or the Paying Agent. Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender
for payment of public and private debts. 

        (3)   PAYING AGENT AND REGISTRAR.    Initially, Wells Fargo Bank, N.A., the Trustee under the First Supplemental
Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity. 

        (4)   INDENTURE.    The Company issued the Notes under a First Supplemental Indenture dated as of February 14,
2005 and a Base Indenture dated as of December 10, 2004 (collectively, the "Indenture") between the Company and the Trustee. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture by reference to the TIA. The Notes are subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. To the extent any provision of this Note is inconsistent with or conflicts with the express provisions of the Indenture, the provisions of the First Supplemental
Indenture shall govern and be controlling. The Notes are unsecured obligations of the Company. The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder. 

A-2

 
EXHIBIT A  

        (5)   OPTIONAL REDEMPTION. 

        (a)   Except
as set forth in subparagraph (b) of this Paragraph 5, the Company will not have the option to redeem the Notes prior to February 15, 2009. On
or after February 15, 2009, the Company will have the option to redeem all or a part of the Notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid interest on the Notes redeemed to the applicable redemption date, if redeemed during the twelve-month period beginning on
February 15 of the years indicated below, subject to the rights of Holders on the relevant record date to receive interest on the relevant interest payment date: 

	Year
	 	Percentage

	2009	 	104.6250%
	2010	 	102.3125%
	2011 and thereafter	 	100.0000%

        Unless
the Company defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption
date. 

        (b)   Notwithstanding
the provisions of subparagraph (a) of this Paragraph 5, at any time prior to February 15, 2008, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture with the net cash proceeds of a sale of Equity Interests (other than Disqualified Stock) of the Company
at a redemption price equal to 109.25% of the aggregate principal amount thereof, plus accrued and unpaid interest to the redemption date; provided that
at least 65% in aggregate principal amount of the Notes originally issued under the Indenture (excluding Notes held by the Company and its Subsidiaries) remains outstanding immediately after the
occurrence of such redemption and that such redemption occurs within 90 days of the date of the closing of such sale of Equity Interests. 

        (6)   MANDATORY REDEMPTION.    The Company is not required to make mandatory redemption or sinking fund payments with
respect to the Notes. 

        (7)   REPURCHASE AT THE OPTION OF HOLDERS. 

        (a)   If
there is a Change of Control, as and to the extent required by Section 4.15 of the First Supplemental Indenture, the Company will be required to make an offer
(a "Change of Control Offer") to each Holder to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest thereon to the date of purchase, subject to the rights of Holders on the relevant record
date to receive interest due on the relevant interest payment date (the "Change of Control Payment"). Within 10 days following any Change of
Control, the Company will mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture. 

A-3

 

EXHIBIT A  

        (b)   If
the Company or a Restricted Subsidiary of the Company consummates any Asset Sales, within five days of each date on which the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Company will commence an offer to all Holders of Notes and all holders of other Indebtedness that is pari passu
with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets (an "Asset
Sale Offer") pursuant to Section 3.09 of the First Supplemental Indenture to purchase the maximum principal amount of Notes (including any Additional Notes) and such
other pari passu Indebtedness that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest thereon to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of
Notes (including any Additional Notes) and other pari passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company (or such Restricted Subsidiary) may use such deficiency for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and other  pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such
other pari passu Indebtedness to be purchased on a pro rata basis. Holders of Notes that
are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" attached to the Notes. 

        (8)   NOTICE OF REDEMPTION.    Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction or discharge of the Indenture. Notes in denominations larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. 

        (9)   DENOMINATIONS, TRANSFER, EXCHANGE.    The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need
not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not
exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest
Payment Date. 

        (10) PERSONS DEEMED OWNERS.    The registered Holder of a Note may be treated as its owner for all purposes. 

A-4

 
EXHIBIT A  

        (11) AMENDMENT, SUPPLEMENT AND WAIVER.    Subject to certain exceptions, the Indenture or the Notes or the Note
Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, voting
as a single class, and any existing Default or Event or Default or compliance with any provision of the Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, voting as a single class. Without the consent of any Holder of a Note, the Indenture or the
Notes or the Note Guarantees may be amended or supplemented: (i) to cure any ambiguity, defect or inconsistency; (ii) to provide for uncertificated Notes in addition to or in place of
certificated Notes, or in order to comply with any Applicable Procedures, or otherwise alter the provisions of Article 2 of the Indenture in a manner that does not materially adversely affect
any Holder; (iii) to provide for the assumption of the Company's or a Guarantor's obligations to Holders of the Notes and Note Guarantees in case of a merger or consolidation; (iv) to
make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not, in the good faith opinion of the Board of Directors of the Company, adversely affect
the legal rights under the Indenture of any Holder in any material respect; (v) to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture
under the TIA; (vi) to conform the text of the Indenture or the Notes to any provision of the "Description of Notes" section of the Company's Prospectus Supplement dated February 8, 2005
relating to the initial offering of the Notes, to the extent that such provision in that "Description of Notes" was intended to be a verbatim recitation of a provision of the Indenture, the Note
Guarantees or the Notes; (vii) to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture; or (viii) to allow any Restricted Subsidiary
to execute a supplemental indenture to the Indenture and/or a Note Guarantee with respect to the Notes. 

        (12) DEFAULTS AND REMEDIES.    Events of Default include: (i) default for 30 days in the payment when
due of interest on the Notes; (ii) default in the payment when due of the principal of, or premium, if any, on, the Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure by the Company or any of its Restricted Subsidiaries to comply with Section 4.10, 4.15 or 5.01 of the
First Supplemental Indenture; (iv) failure by the Company or any of its Restricted Subsidiaries for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes including Additional Notes, if any, then outstanding voting as a single class to comply with any of the other agreements in the Indenture or the Notes;
(v) default under certain other agreements relating to Indebtedness of the Company or its Restricted Subsidiaries which default is caused by a failure to pay principal of, or interest or
premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default, or results in the acceleration of such Indebtedness prior
to its express maturity; (vi) certain final judgments for the payment of money that remain undischarged for a period of 60 days; (vii) certain events of bankruptcy or insolvency
with respect to the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary; and (viii) except as permitted by the Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force
and effect or any Guarantor or any Person acting on its behalf denies or disaffirms its obligations under such Guarantor's Note Guarantee. If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the
payment of principal or interest or premium, if any,) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the then outstanding
Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest or premium, if any, on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or
Event of Default. 

A-5

 
EXHIBIT A  

        (13) TRUSTEE DEALINGS WITH COMPANY.    The Trustee, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 

        (14) NO RECOURSE AGAINST OTHERS.    A director, trustee, officer, employee, incorporator or stockholder of the
Company or any of the Guarantors, as such, will not have any liability for any obligations of the Company or the Guarantors under the Notes, the Note Guarantees or the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for
the issuance of the Notes. 

        (15) AUTHENTICATION.    This Note will not be valid until authenticated by the manual signature of the Trustee or
an authenticating agent. 

        (16) ABBREVIATIONS.    Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act). 

        (17) CUSIP NUMBERS.    Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to
the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon. 

        (18) GOVERNING LAW.    THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE,
THIS NOTE AND EACH NOTE GUARANTEE WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 

        The
Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: 

Mercer
International, Inc.

14900 Interurban Avenue South, Suite 282

Seattle, Washington 98168

Attention: Chief Financial Officer 

A-6

 

EXHIBIT A  

with
a copy to: 

Mercer
International, Inc.

Suite 2840

650 West Georgia Street

Vancouver, British Columbia

Canada V6B 4N8

Attention: Chief Financial Officer 

A-7

  

EXHIBIT A  

 
 

ASSIGNMENT FORM

        To assign this Note, fill in the form below: 

	(I) or (we) assign and transfer this Note to:	 
	 	
(Insert assignee's legal name)
	

 (Insert assignee's soc. sec. or tax I.D. no.)
	

	

	

	

 (Print or type assignee's name, address and zip code)

and
irrevocably
appoint                                        
                                          
                                         
             to transfer this Note on the books of the Company. The agent may substitute another to act for him.
 

Date:
                                   

	 	 	Your Signature:	 
	 	 	 	
(Sign exactly as your name appears on the face of this Note)
	
 	
 	

 	

 

Signature
Guarantee*:
                                         
               

	*
	Participant
in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

A-8

 
EXHIBIT A  

 
 

OPTION OF HOLDER TO ELECT PURCHASE

        If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the First Supplemental Indenture, check the
appropriate box below: 

	 o    Section 4.10	 	o    Section 4.15

        If
you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the First Supplemental Indenture, state the amount
you elect to have purchased: 

$                                  

Date:
                                   

	 	 	Your Signature:	 
	 	 	 	
(Sign exactly as your name appears on the face of this Note)
	

 	
 	
Tax Identification No.:	

 
	 	 	 	

Signature Guarantee*:
                                         
                  

	*
	Participant
in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

A-9

 
EXHIBIT A  

 
 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

        The
following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note
for an interest in this Global Note, have been made: 

	Date of Exchange
 
	 	Amount of decrease in Principal Amount of this Global Note
	 	Amount of increase in Principal Amount of this Global Note
	 	Principal Amount of this Global Note following such decrease (or increase)
	 	Signature of authorized officer of Trustee or Custodian

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

*  This schedule should be included only if the Note is issued in global form. 

A-10

  

EXHIBIT B  

 
 

FORM OF NOTATION OF GUARANTEE    
    

        For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the
extent set forth in the Indenture and subject to the provisions in the First Supplemental Indenture dated as of February 14, 2005 (the
"Indenture") among Mercer International, Inc. (the "Company"), [the Guarantors party
thereto] and Wells Fargo Bank, N.A., as trustee (the "Trustee") to the Base Indenture dated as of December 10, 2004, (a) the
due and punctual payment of the principal of, premium, if any, and interest on, the Notes, whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on
overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in accordance with the
terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the
Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article 10 of the First Supplemental Indenture and reference is hereby made to the Indenture for the precise
terms of the Note Guarantee. 

        Capitalized
terms used but not defined herein have the meanings given to them in the Indenture. 

	 	 	[NAME OF GUARANTOR(S)]
	
 	
 	

By:	

 
	 	 	 	
 Name:

Title:

B-1

  

EXHIBIT C  

 
 

FORM OF SUPPLEMENTAL INDENTURE
  TO BE DELIVERED BY SUBSEQUENT GUARANTORS    
    

        SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of                                       ,
200          , among
                                         
   (the "Guaranteeing
Subsidiary"), a subsidiary of
                                         
   (or its permitted successor), a                          corporation (the
"Company"), the Company, the other Guarantors (as defined in the Indenture referred to herein) and
                                         
  , as
trustee under the Indenture referred to below (the "Trustee"). 

W I T N E S S E T H 

        WHEREAS,
the Company has heretofore executed and delivered to the Trustee an indenture dated as of December 10, 2004 (the "Base
Indenture") providing for the issuance of debt securities of the Company; 

        WHEREAS,
the Company has heretofore executed and delivered to the Trustee a First Supplemental Indenture (the "Indenture"), dated as of
February 14, 2005, to the Base Indenture, providing for the issuance of 9.25% Senior Notes due 2013 (the "Notes"); 

        WHEREAS,
the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company's Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the
"Note Guarantee"); and 

        WHEREAS,
pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. 

        NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee
mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 

        1.     CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the
Indenture. 

        2.     AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and
subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof. 

        4.     NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of
the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of
the SEC that such a waiver is against public policy. 

        5.     NEW
YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 

C-1

 
EXHIBIT C  

        6.     COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement. 

        7.     EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof. 

        8.     THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company. 

        IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written. 

        Dated:
                                  ,
20           

	 	 	[GUARANTEEING SUBSIDIARY]
	
 	
 	

By:	

 
	 	 	 	
 Name:

Title:
	
 	
 	
MERCER INTERNATIONAL, INC.
	
 	
 	

By:	

 
	 	 	 	
 Name:

Title:
	
 	
 	
[EXISTING GUARANTORS]
	
 	
 	

By:	

 
	 	 	 	
 Name:

Title:
	
 	
 	
[TRUSTEE],

as Trustee
	
 	
 	

 	

 
	
 	
 	

By:	

 
	 	 	 	
 Authorized Signatory

C-2

QuickLinks

CROSS-REFERENCE TABLE

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

ARTICLE 2 THE NOTES

ARTICLE 3 REDEMPTION AND PREPAYMENT

ARTICLE 4 COVENANTS

ARTICLE 5 SUCCESSORS

ARTICLE 6 DEFAULTS AND REMEDIES

ARTICLE 7 [INTENTIONALLY OMITTED]

ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER

ARTICLE 10 NOTE GUARANTEES

ARTICLE 11 SATISFACTION AND DISCHARGE

ARTICLE 12 MISCELLANEOUS

SIGNATURES

ASSIGNMENT FORM

OPTION OF HOLDER TO ELECT PURCHASE

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

FORM OF NOTATION OF GUARANTEE

FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORSQuickLinks
 -- Click here to rapidly navigate through this document

	 
	 	Exhibit 10.1
 

	

 	
 	

 	
 	

 
	 	 	Dated                                       
         2005	 	 
	

 	
 	
D&Z HOLDING GMBH

as the Parent	
 	

(1)
	

 	
 	

ZELLSTOFF-UND PAPIERFABRIK

ROSENTHAL GMBH & CO. KG

as Original Borrower	
 	

(2)
	

 	
 	

ZPR BETEILIGUNGS GMBH

and others

as Original Guarantors	
 	

(3)
	

 	
 	

and	
 	

 
	

 	
 	

BAYERISCHE HYPO-UND VEREINSBANK AG

as Arranger, Agent, Security Agent,

Original Lender and Issuing Bank	
 	

(4)
	

 	
 	

                                         
                               	
 	

 
	

 	
 	

MULTICURRENCY REVOLVING

CREDIT FACILITY AGREEMENT

in the amount of

EURO 40,000,000	
 	

 
	

 	
 	

                                         
                               	
 	

 

	 

	 

	 

  

Contents  

	Clause
 
	 	Page

	
SECTION 1 — INTERPRETATION	
 	

2
	 1	 	Definitions and interpretation	 	2
	
SECTION 2 — THE FACILITY	
 	

22
	 2	 	The Facility	 	22
	 3	 	Purpose	 	23
	 4	 	Conditions of Utilisation	 	23
	
SECTION 3 — UTILISATION	
 	

24
	 5	 	Utilisation — Loans	 	24
	 6	 	Utilisation — Bank Guarantees	 	25
	 7	 	Bank Guarantees	 	27
	 8	 	Optional Currency	 	29
	
SECTION 4 — REPAYMENT, PREPAYMENT AND CANCELLATION	
 	

30
	 9	 	Repayment	 	30
	 10	 	Prepayment and cancellation	 	30
	
SECTION 5 — COSTS OF UTILISATIONS	
 	

33
	 11	 	Interest	 	33
	 12	 	Interest Periods	 	34
	 13	 	Changes to the calculation of interest	 	34
	 14	 	Fees	 	35
	
SECTION 6 — ADDITIONAL PAYMENT OBLIGATIONS	
 	

37
	 15	 	Tax gross up and indemnities	 	37
	 16	 	Increased costs	 	39
	 17	 	Other indemnities	 	40
	 18	 	Mitigation by the Lenders	 	41
	 19	 	Costs and expenses	 	41

	
SECTION 7 — GUARANTEE	
 	

43
	 20	 	Guarantee (Selbstschuldnerische Bürgschaft)	 	43
	
SECTION 8 — REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT	
 	

47
	 21	 	Representations	 	47
	 22	 	Information undertakings	 	51
	 23	 	Financial covenants	 	55
	 24	 	General undertakings	 	57
	 25	 	Events of Default	 	64
	
SECTION 9 — CHANGES TO PARTIES	
 	

70
	 26	 	Changes to the Lenders	 	70
	 27	 	Changes to the Obligors	 	73
	
SECTION 10 — THE FINANCE PARTIES	
 	

74
	 28	 	Role of the Agent, the Arranger, the Issuing Bank and others	 	74
	 29	 	Conduct of business by the Finance Parties	 	79
	 30	 	Sharing among the Finance Parties	 	79
	
SECTION 11 — ADMINISTRATION	
 	

81
	 31	 	Payment mechanics	 	81
	 32	 	Set-off	 	83
	 33	 	Notices	 	83
	 34	 	Calculations and certificates	 	84
	 35	 	Partial invalidity	 	85
	 36	 	Remedies and waivers	 	85
	 37	 	Amendments and waivers	 	85
	 38	 	Counterparts	 	86
	 39	 	Statute of limitations (Verjährung)	 	86
	 40	 	Money laundering	 	86

	
SECTION 12 — GOVERNING LAW AND ENFORCEMENT	
 	

87
	 41	 	Governing law	 	87
	 42	 	Jurisdiction	 	87
	
  Schedule 1 The Original Parties	
 	

88
	 Schedule 2 Conditions precedent	 	90
	 Schedule 3 Utilisation Request	 	94
	 Schedule 4 Mandatory Cost Formulae	 	95
	 Schedule 5 Form of Assignment and Assumption Certificate	 	97
	 Schedule 6 Form of Accession Letter	 	99
	 Schedule 7 Form of Resignation Letter	 	100
	 Schedule 8 Form of Compliance Certificate	 	101
	 Schedule 9 Existing Security	 	102
	 Schedule 10 Existing Indebtedness	 	106
	 Schedule 11 Structure	 	108
	 Schedule 12 Timetables	 	110
	 Schedule 13 Existing Bank Guarantees	 	111

  

THIS AGREEMENT is made on                        2005 

BETWEEN  

	(1)
	D&Z HOLDING GMBH (formerly known as Dresden Papier Holding GmbH), a limited liability company incorporated under the laws of the
Federal Republic of Germany (Gesellschaft mit beschränkter Haftung), having its registered seat at Königstrasse 5,
01097 Dresden, Federal Republic of Germany and registered in the commercial register (Amtsgericht) of Dresden, number HRB 10484 (the
"Parent");

	(2)
	ZELLSTOFF- UND PAPIERFABRIK ROSENTHAL GMBH & CO. KG, a limited partnership established under the laws of the Federal
Republic of Germany having its registered seat at Hauptstrasse 16, 07366 Blankenstein, Federal Republic of Germany and registered in the commercial register
(Amtsgericht) of Gera, number HRA 1607 (the "Original Borrower" or
"ZPR KG");

	(3)
	D&Z BETEILIGUNGS GMBH (formerly known as Dresden Papier GmbH), a limited liability company incorporated under the laws of the
Federal Republic of Germany (Gesellschaft mit beschränkter Haftung) having its registered seat at Königstrasse 5,
01097 Dresden, Federal Republic of Germany and registered in the commercial register (Amtsgericht) of Dresden, number HRB 17804
("D&Z Beteiligung");

	(4)
	ZPR GESCHÄFTSFÜHRUNGS GMBH (formerly known as LK Einundachtzigste
Vermögensverwaltungs GmbH), a limited liability company incorporated under the laws of the Federal Republic of Germany (Gesellschaft mit
beschränkter Haftung) having its registered seat at Hauptstrasse 16, 07366 Blankenstein, Federal Republic of Germany and registered in the
commercial register (Amtsgericht) of Gera, number HRB 9855 ("ZPRG");

	(5)
	ZPR BETEILIGUNGS GMBH, a limited liability company incorporated under the laws of the Federal Republic of Germany
(Gesellschaft mit beschränkter Haftung) having its registered seat at Hauptstrasse 16, 07366 Blankenstein, Federal Republic
of Germany and registered in the commercial register (Amtsgericht) of Gera, number HRB 9027
("ZPR Beteiligung");

	(6)
	ZPR LOGISTIK GMBH, a limited liability company incorporated under the laws of the Federal Republic of Germany
(Gesellschaft mit beschränkter Haftung) having its registered seat at Hauptstrasse 16, 07366 Blankenstein, Federal Republic
of Germany and registered in the commercial register (Amtsgericht) of Gera, number HRB 7851 ("ZPR
Logistik");

	(7)
	BAYERISCHE HYPO-UND VEREINSBANK AG, having its office at Am Tucherpark 1, 80538 Munich, Federal Republic of
Germany and registered in the commercial register (Amtsgericht) of Munich, number HRB 42148 (the
"Arranger");

	(8)
	BAYERISCHE HYPO-UND VEREINSBANK AG (the "Agent" and
"Security Agent");

	(9)
	BAYERISCHE HYPO-UND VEREINSBANK AG (the "Original Lender"); and

	(10)
	BAYERISCHE HYPO-UND VEREINSBANK AG as issuing bank (the "Issuing Bank"). 

(together
referred to as the "Parties"). 

WHEREAS  

	(A)
	ZPR
KG was established as a special purpose limited partnership in 1998. 

1

 

	(B)
	ZPR
KG operates an ISO 9002 certified pulp mill for the production of northern bleached softwood kraft pulp located in Blankenstein, Thüringen, Federal Republic
of Germany which has been financed through certain credit facilities.

	(C)
	The
Existing Indebtedness (as defined below) will be discharged (erfüllt) through the Refinancing (as defined below).

	(D)
	The
Original Lender has agreed to provide the Borrower (as defined below) with the Facility (as defined below) subject to the terms and conditions set out below.

	(E)
	The
Original Lender acknowledges that the Obligors (as defined below) have conducted a reorganisation for the purpose of optimising the corporate structure, as more closely described
in the Reorganisation Letter (as defined below).

	(F)
	It
is further considered that, subsequent to the Permitted Reorganisation (as defined below), a merger (Verschmelzung) of ZPR
Beteiligung into ZPRG (hereinafter the "merger") would be filed with the commercial register of the competent local court
(Amtsgericht). As a consequence of the registration of the merger, ZPR Beteiligung would cease to exist without being liquidated and merge into ZPRG
(Verschmelzung unter Auflösung ohne Abwicklung) which would assume all assets and liabilities of ZPR Beteiligung by operation of law.
Further, as a consequence of the merger becoming effective upon registration, ZPR KG would merge into ZPRG by operation of law by (Anwachsung
gemäß § 738 Bürgerliches Gesetzbuch analog) with ZPRG assuming all assets and liabilities of the ZPR KG
including all existing contractual rights and obligations of ZPR KG under the Finance Documents (the "ZPR Merger").

	(G)
	Each
of the Parent and the Borrower acknowledges that the Facility will initially be provided by the Original Lender, but that the Original Lender may elect to syndicate the Facility. 

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 Cost Rate" has the meaning given to it in Schedule 4 (Mandatory Cost Formulae); 

"Additional Guarantor" means a company which becomes an Additional Guarantor in accordance with clause 27 (Changes to the
Obligors); 

"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; 

2

 

"Assignment and Assumption Certificate" means a certificate substantially in the form set out in Schedule 5 (Form of
Assignment and Assumption Certificate) or any other form agreed between the Agent and the Borrower; 

"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration; 

"Availability Period" means the period from and including the date of this Agreement to and including the date falling one month before the Termination
Date; 

"Available Cash" means all cash, cash equivalents and securities held by any member of the ZPR Group (other than the Borrower) on
8 February 2005 whether in the Shareholder Distribution Account or otherwise; 

"Available Commitment" means a Lender's Commitment minus: 

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

	(b)
	in
relation to any proposed Utilisation, the Base Currency Amount of its participation in any Utilisation that are due to be made on or before the proposed Utilisation Date, 

other
than that Lender's participation in any Utilisation that are due to be repaid or prepaid on or before the proposed Utilisation Date; 

"Available Facility" means the aggregate for the time being of each Lender's Available Commitment; 

"Bank Guarantee" means a Bank Guarantee (selbstschuldnerische Bürgschaft) or any other
form of guarantee in a form agreed by the Issuing Bank, the Borrower and the Agent and includes each Existing Bank Guarantee; 

"Base Currency" means EURO; 

"Base Currency Amount" means, in relation to a Utilisation, the amount specified in the Utilisation Request delivered by the Borrower for that
Utilisation (or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent's Spot Rate of Exchange on the date which is five Business
Days before the Utilisation Date or, if later, on the date the Agent receives the Utilisation Request and, in the case of a Bank Guarantee, as adjusted under clause 6.7
(Revaluation of Bank Guarantees)) adjusted to reflect any repayment, prepayment, consolidation or division of the Utilisation; 

"Blitz" means Blitz 01-858 GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany
(Gesellschaft mit beschränkter Haftung) having its registered seat at Charlottenstraße 59, 10117 Berlin,
Federal Republic of Germany and registered in the commercial register (Amtsgericht) of Charlottenburg, number HRB 83943; 

"Borrower" means the Original Borrower and any successor in title to the Original Borrower pursuant to a succession of title; 

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

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

3

 

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, Munich, New York 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) any TARGET Day; 

"Calculation Date" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Cash Flow" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Change of Control" means if: 

	(a)
	the
Ultimate Parent ceases to Control the Parent;

	(b)
	the
Ultimate Parent ceases to Control the Borrower; or

	(c)
	any
other person or group of persons acting in concert gains direct or indirect Control of the Parent and the Borrower (or any of them); 

For
the purposes of this definition, "acting in concert" means, a group of persons who, pursuant to an agreement or understanding (whether formal or
informal), actively co-operate, through the acquisition of shares or partnership interests in a person, either directly or indirectly, to obtain or consolidate Control of such person; 

"Closing Date" means the date on which the Agent gives notice to the Borrower under clause 4.1 (Initial conditions
precedent); 

"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

	(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); 

"Conditions Governing Guarantees" means the terms and conditions (i) under which the Existing Bank Guarantees have been issued, (ii) under
which the Bank Guarantees will be issued and (iii) which shall govern the Surviving Guarantees after the Termination Date; 

4

 

"Control" means the direct or indirect power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to: 

	(a)
	cast,
or control the casting of, 51 per cent or more of the maximum number of votes that might be cast at a general meeting of such body corporate or another entity; or

	(b)
	appoint
or remove all, or the majority, of the partners, directors, management board members, or other equivalent officers of such body corporate; or

	(c)
	give
directions with respect to the operating and financial policies of such body corporate or another entity with which the partners, directors, management board members, or other
equivalent officers of such body corporate are obliged to comply; and/or 

the
holding of 51 per cent or more of the issued share capital of such body corporate or holding the post of managing partner of a limited partnership or legal partnership (excluding any
part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital) and
"Controlled" shall be construed accordingly; 

"Current Assets" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Current Liabilities" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Current Ratio" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Dangerous Substance" means any chemical, biological, industrial, toxic, contaminant, explosive, radioactive, hazardous or dangerous emissions, noise
and any natural or artificial substance (in whatever form) including asbestos, oil, petroleum, warfare agents (Kampfstoffe) other waste and any
genetically modified organism the generation, transportation, storage, treatment, use or disposal of which (whether alone or in combination with any other substance) gives rise to a risk of causing
harm to man or any other living organism or damaging the Environment or public health or welfare or gives rise to the reduction of the value or use of at any site owned, leased, occupied or used by
any member of the ZPR Group when applying the latest technical and scientific standards or requires remediation under Environmental Law, in each case including any controlled, special, hazardous,
toxic, radioactive or dangerous waste; 

"DSRA Balance" means the balance standing to the credit of the Historic Debt Service Reserve Account; 

"Default" means an Event of Default or any event or circumstance specified in clause 25 (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; 

"Domination Agreements" means: 

	(a)
	the
domination and profit and loss absorption agreement (Beherrschungs- und Gewinnabführungsvertrag) entered into on
7 May 1999 between ZPR Logistik (as the dominated company (beherrschte Gesellschaft)) and ZPR KG; and

	(b)
	the
profit and loss absorption agreement (Gewinnabführungsvertrag) entered into on 12 July 2004 (as
amended on 8 November 2004) between ZPRG and D&Z Beteiligung; 

"Dresden Papier" means Dresden Papier GmbH (formerly known as Papierfabrik Fährbrücke GmbH), a limited
liability company incorporated under the laws of the Federal Republic of Germany (Gesellschaft mit beschränkter Haftung) having its
registered seat at Pirnaer Strasse 31-33, 01809 Heidenau, Federal Republic of Germany and registered in the commercial register
(Amtsgericht) of Dresden, number HRB 18925; 

5

 

"EBITDA" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Environment" means all, or any of, the following media: the air (including the air within buildings and the air within other natural or
man-made structures above or below ground, such as soil-vapor), water (including ground and surface water, coastal or inland waters, acquifers, leachates, pipes, drains and
sewers) and land (including buildings and other structures in, on or under it and any surface and sub-surface soil) and human health or safety, living organism and ecological systems; 

"Environmental Claim" means any claim by any person: 

	(a)
	in
respect of any loss or liability suffered or incurred by that person as a result of or in connection with any violation of Environmental Law; or

	(b)
	that
arises as a result of or in connection with Environmental Contamination and that could give rise to any remedy or penalty (whether interim or final) that may be enforced or
assessed by private or public legal action or administrative order or proceedings; 

"Environmental Contamination" means each of the following and their consequences: 

	(a)
	any
release, discharge, emission, leakage or spillage of any Dangerous Substance at or from any site owned, leased, occupied or used by any member of the ZPR Group into any
part of the Environment; or

	(b)
	any
accident, fire, explosion or sudden event at any site owned, leased, occupied or used by any member of the ZPR Group which is directly or indirectly caused by or attributable to
any Dangerous Substance; or

	(c)
	any
other pollution of the Environment; 

other
than those in compliance with Environmental Law or any Environmental Licence; 

"Environmental Law" means all regulations (including the applicable World Bank Environmental Health and Safety Guidelines and the "Equator Principles"),
agreements with the authorities and the like having legal effect concerning the protection of, or the prevention of damage to, human health, the Environment, the conditions of the work place or the
generation, transportation, storage, treatment or disposal of Dangerous Substances or the regulation or control of Dangerous Substances or Environmental Contamination or the provision of remedies in
relation to harm or damage to the Environment; 

"Environmental Licence" means any permit and other Authorisation and the filing of any notification, report or assessment required under any
Environmental Law for the operation of the business of any member of the ZPR Group conducted on or from any site owned, leased, occupied or used by any member of the ZPR Group; 

"Environmental & Technical Adviser" means Jaakko Pöyry (JP Management Consulting (Europe) OY, Vantaa, Finland) and its successors
as advisers to the Lenders in relation to technical and environmental issues appointed by the Agent; 

"Environmental & Technical Report" means a final environmental and technical report prepared by the Environmental & Technical Adviser, in
form and substance satisfactory to the Agent dated on or about the date of this Agreement and addressed to, and/or capable of being relied upon by, the Arranger and the other Finance Parties; 

6

 

"EURIBOR" means, in relation to any Loan in EURO: 

	(a)
	the
applicable Screen Rate; or

	(b)
	(if
no Screen Rate is available for the Interest 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 25 (Events of
Default); 

"Existing Bank Guarantee" means each guarantee issued by the Issuing Bank before the Closing Date to the beneficiary of such Bank Guarantee, each of
which is set out in Schedule 13 (Existing Bank Guarantees); 

"Existing Indebtedness" means the Indebtedness of the ZPR Group set out in Schedule 10 (Existing
Indebtedness); 

"Existing Security" means the Security of the ZPR Group set out in Schedule 9 (Existing
Security); 

"Expiry Date" means, in relation to any Bank Guarantee, the date on which the maximum aggregate liability under that Bank Guarantee is to be reduced to
zero; 

"Facility" means the revolving loan facility made available under this Agreement as described in clause 2 (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' written notice) as the office or offices through which it will perform its obligations under this Agreement; 

"Fee Letter" means any letter or letters dated on or about the date of this Agreement between the Arranger and the Original Borrower or the Agent and
the Original Borrower or the Issuing Bank and the Original Borrower setting out any of the fees referred to in clause 14 (Fees); 

"Finance Document" means: 

	(a)
	this
Agreement;

	(b)
	an
Assignment and Assumption Certificate;

	(c)
	a
Bank Guarantee;

	(d)
	each
Fee Letter;

	(e)
	each
Hedging Agreement;

	(f)
	the
Hedging Strategy Letter;

	(g)
	each
Security Document;

	(h)
	the
Security Pooling Agreement; 

7

 

	(i)
	the
Shareholders' Undertaking Agreement; and

	(j)
	any
other document agreed to be a "Finance Document" by both the Agent and the Borrower; 

"Finance Party" means the Agent, the Arranger, the Security Agent, the Issuing Bank, the Hedging Bank or a Lender; 

"Financial Indebtedness" means 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 lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance lease, capital lease or operating lease;

	(e)
	receivables
sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

	(f)
	any
amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;

	(g)
	any
derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken into account);

	(h)
	any
counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary bank guarantee or any other instrument issued by a bank or financial institution;
and

	(i)
	the
amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above; 

"Fiscal Unity Agreements" means the Domination Agreements and the Trust Agreement; 

"GAAP" means generally accepted accounting principles in the Federal Republic of Germany; 

"German Obligor" means any Obligor that is incorporated or established (as the case may be) in the Federal Republic of Germany; 

"Guarantee Amount" means: 

	(a)
	each
sum paid, or due and payable, by the Issuing Bank to the beneficiary of a Bank Guarantee pursuant to the terms of that Bank Guarantee; and

	(b)
	all
liabilities, costs (including any costs incurred in funding any amount which falls due from the Issuing Bank under a Bank Guarantee), claims, losses and expenses which the Issuing
Bank incurs or sustains in connection with or arising out of a Bank Guarantee, 

in
each case which has not been reimbursed pursuant to clause 9.2 (Borrower's indemnity to the Issuing Bank); 

8

 

"Guarantee Proportion" means, in relation to a Lender in respect of any Bank Guarantee and save as otherwise provided in this Agreement, the proportion
(expressed as a percentage) borne by that Lender's Available Commitment to the Available Facility immediately prior to the issue of that Bank Guarantee; 

"Guarantor" means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with clause 27
(Changes to the Obligors); 

"Hedging Agreements" means the agreements to be concluded in relation to any Treasury Transaction entered into under the Hedging Master Agreement in
accordance with the Hedging Strategy; 

"Hedging Bank" means Bayerische Hypo- und Vereinsbank AG; 

"Hedging Master Agreement" means the Master Agreement for Financial Derivatives Transactions (Rahmenvertrag für
Finanztermingeschäfte) entered into between the Original Borrower and the Hedging Bank on 20 November 2000; 

"Hedging Strategy" means the strategy agreed between the Borrower and the Arranger for the hedging of the interest, currency or pulp price risks of the
Borrower in accordance with the Hedging Strategy Letter; 

"Hedging Strategy Letter" means the letter dated on or about the date of this Agreement between the Hedging Bank and the Original Borrower setting out
the Hedging Strategy; 

"Historic Debt Service Reserve Account" means the account named "Debt Service Reserve Account" held by ZPR KG with Bayerische Hypo- und
Vereinsbank AG; 

"Holding Company" means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary; 

"Information Memorandum" means the document in the form approved by the Parent and the Borrower concerning the ZPR Group which will be prepared in
relation to this transaction and distributed by the Arranger to selected financial institutions for the purposes of syndication; 

"Insurances" means any and all of the contracts of insurance and reinsurance that the Borrower is required to procure and maintain; 

"Interest Cover Ratio" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Interest Expense" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Interest Period" means, in relation to a Loan, each period determined in accordance with clause 12 (Interest
Periods) and, in relation to an Unpaid Sum, each period determined in accordance with clause 11.3 (Default interest); 

"Interest Receivable" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Joint Venture" means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership (limited
or otherwise) or any other entity; 

"Lender" means: 

	(a)
	any
Original Lender; and 

9

 

	(b)
	any
bank, financial institution, trust, fund or other entity which has become a Party in accordance with clause 26 (Changes to the
Lenders), 

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

"Leverage Ratio" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"LIBOR" means, in relation to any Loan: 

	(a)
	the
applicable Screen Rate; or

	(b)
	(if
no Screen Rate is available for the currency or Interest 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; 

"LK 82" means LK Zweiundachtzigste Vermögensverwaltungs GmbH GmbH, a limited liability company incorporated under the laws
of the Federal Republic of Germany (Gesellschaft mit beschränkter Haftung) having its registered seat at
Königstraße 5, 01097 Dresden, Federal Republic of Germany and registered in the commercial register
(Amtsgericht) of Dresden, number HRB 20878; 

"Loan" means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan; 

"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 Utilisations then outstanding, aggregated more than 662/3 per cent of the Total Commitments immediately prior to
the reduction); or

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

"Management Fee Agreement" means the strategic, marketing and sales agreement entered into on 1 January 2000 between ZPR KG and the
Ultimate Parent; 

"Mandatory Cost" means the percentage rate per annum calculated by the Agent in accordance with Schedule 4 (Mandatory
Cost Formulae); 

"Margin" means 1.55 per cent. per annum; 

"Material Adverse Effect" means an event, occurrence or condition which has materially impaired or which will materially impair (as compared with the
situation which would have prevailed but for such event, occurrence or condition): 

	(a)
	the
business, operation, property and financial condition of the Borrower and/or the other Obligors and as a result, the ability of the Borrower to perform any of its obligations
under the Finance Documents; or

	(b)
	the
validity or enforceability of the Finance Documents; 

10

 

"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)
	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; and

	(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; 

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

"Net Debt" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Obligations" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Obligor" means the Borrower or a Guarantor; 

"Old Shareholder Loan Agreements" means: 

	(a)
	the
shareholder agreement for the aggregate amount of DM 39,623,327.03 carrying an interest rate of 7 per cent per annum entered into on
21 July 1998 between D&Z Beteiligung as the lender and ZPR KG as the borrower; and

	(b)
	the
shareholder agreement for the aggregate amount of DM 25,000,000 carrying an interest rate of 7 per cent per annum entered into on
20 December 2000 between D&Z Beteiligung as the lender and ZPR KG as the borrower; 

"Operating Costs" means any cost incurred in respect of any payment, whether directly or by way of set-off or otherwise, of assets of an
Obligor in relation to: 

	(a)
	any
marketing sales fees in respect of pulp sales payable by the Borrower to the Ultimate Parent in accordance with the Management Fee Agreement (in its form at the date of this
Agreement); and

	(b)
	any
other operating cost and expenses reasonably incurred in the ordinary course of business; 

"Optional Currency" means USD; 

"Original Financial Statements" means the financial statements in respect of the entities and the financial years as described in Part A of
Schedule 11 (Structure); 

"Original Guarantors" means the parties listed under the heading "Original Guarantors" in Part I of Schedule 1
(The Original Parties); 

"Original Obligor" means the Original Borrower or an Original Guarantor; 

"Participating Member State" means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with
legislation of the European Union relating to the European Economic and Monetary Union; 

"Party" means a party to this Agreement; 

"Permitted Encumbrances" means: 

11

 

	(a)
	any
Permitted Existing Security except to the extent the principal amount secured by that Security exceeds the amount stated in part B of Schedule 9
(Existing Security);

	(b)
	any
lien arising by operation of law or in the ordinary course of trading;

	(c)
	any
Security arising by operation of any retention of title agreement entered into in the ordinary course of trading;

	(d)
	any
Security over assets in connection with operating lease agreements having, when taken together with any Permitted Security set out in paragraph (a) above, an aggregate
contract value of EUR 10,000,000 at any time;

	(e)
	any
Security over or affecting any asset acquired by a member of the ZPR Group after the date of this Agreement if:

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

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

	(iii)
	the
Security is removed or discharged within 3 Months of the date of acquisition of such asset;

	(f)
	any
Security over or affecting any asset of any company which becomes a member of the ZPR Group after the date of this Agreement, where the Security is created prior to the date on
which that company becomes a member of the ZPR Group, 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 3 Months of that company becoming a member of the ZPR Group;

	(g)
	any
Transaction Security; or

	(h)
	any
Security securing any Financial Indebtedness permitted in accordance with paragraph (g) of the definition of Permitted Indebtedness. 

"Permitted Existing Security" means the Security of the ZPR Group set out in part B of Schedule 9 (Existing
Security); 

"Permitted Indebtedness" means any: 

	(a)
	any
Existing Indebtedness set out in part B of Schedule 10 (Existing Indebtedness);

	(b)
	Financial
Indebtedness incurred under, or as expressly permitted by, the Transaction Documents;

	(c)
	Financial
Indebtedness incurred under the hedging transactions contemplated by the Hedging Strategy and documented by the Hedging Agreements; 

12

 

	(d)
	Financial
Indebtedness incurred as Subordinated Liabilities by the Borrower, or if made available to any other Obligor than the Borrower, to the extent on-lent or
otherwise passed on to the Borrower, which is legally and structurally subordinated to any liabilities (including contingent liabilities) of the Borrower and the relevant Obligor under the Finance
Documents in accordance with the Shareholders' Undertaking Agreement;

	(e)
	Financial
Indebtedness incurred by the Borrower in the ordinary course of business which does not exceed, when taken together with any Existing Indebtedness set out in
paragraph (a) above, in aggregate, EUR 10,000,000 (or the equivalent in any other currency) at any time;

	(f)
	any
other Financial Indebtedness permitted by the Majority Lenders from time to time; and

	(g)
	any
Financial Indebtedness the principal amount of which does not exceed EUR 5,000,000 (or its equivalent in another currency or currencies) at any time. 

"Permitted Reorganisation" means the reorganisation of the corporate structure in accordance with the Reorganisation Letter implemented in accordance
with the Reorganisation Documents; 

"Permitted Transaction" means: 

	(a)
	the
Permitted Reorganisation;

	(b)
	the
Refinancing;

	(c)
	any
transaction contemplated by the Fiscal Unity Agreements;

	(d)
	transactions
(other than the granting or creation of Security or the incurring or permitting to subsist of Financial Indebtedness) conducted in the ordinary course of trading on arm's
length terms; and

	(e)
	any
other disposal required, Financial Indebtedness incurred, guarantee, indemnity or Security given, or other transaction arising, under the Finance Documents or as permitted by the
Majority Lenders; 

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

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

	(b)
	(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); 

"Reduction Date" means any day on which a prepayment or cancellation in accordance with clause 10 (Prepayment and
cancellation) is to occur; 

"Reduction Instalment" means the aggregate amount to be repaid or cancelled on any Reduction Date; 

"Reference Banks" means, in relation to LIBOR, the principal London offices of Bayerische Hypo- und Vereinsbank AG, Dresdner Bank AG and
Deutsche Bank AG and, in relation to EURIBOR, the principal office in Munich of Bayerische Hypo- und Vereinsbank AG and of the principal offices in Frankfurt am Main of Dresdner Bank AG
and Deutsche Bank AG or such other banks as may be appointed by the Agent in consultation with the Borrower; 

13

 

"Refinancing" means the discharge (Erfüllung) of the Existing Indebtedness from the
proceeds of: 

	(a)
	the
Refinancing Contribution;

	(b)
	the
release of the DSRA Balance;

	(c)
	cash
on hand of the Borrower; and

	(d)
	a
draw down under the Facility (as defined below) of not more than EUR 20,000,000; 

"Refinancing Contribution" means an amount no less than the euro equivalent of USD 150,000,000 to be contributed to ZPR KG by virtue of and in
accordance with the Refinancing Shareholder Loan Agreements; 

"Refinancing Documents" means the documents entered into or to be entered into and any Authorisation required for the purpose of effecting the
Refinancing; 

"Refinancing Shareholder Loan Agreements" means: 

	(a)
	the
shareholder agreement in the agreed form for the aggregate amount of no less than USD 150,000,000 entered into on or about the date hereof between the Ultimate Parent as
lender and D&Z Beteiligung as the borrower;

	(b)
	the
shareholder agreement in the agreed form for the aggregate amount of no less than USD 150,000,000 entered into on or about the date hereof between D&Z Beteiligung as lender
and ZPRG as the borrower; and

	(c)
	the
shareholder agreement in the agreed form for the aggregate amount of no less than USD 150,000,000 entered into on or about the date hereof between ZPRG as lender and ZPR KG
as the borrower; 

"Relevant Interbank Market" means in relation to EURO, the European interbank market and, in relation to any other currency, the London interbank
market; 

"Relevant Undertaking" has the meaning given to it in clause 24.28 (Limitations of undertakings); 

"Reorganisation Documents" means: 

	(a)
	the
Reorganisation Letter;

	(b)
	the
Reorganisation Tax Opinion; and

	(c)
	any
other document entered into or to be entered into and any Authorisation required for the purpose of effecting the Permitted Reorganisation; 

"Reorganisation Letter" means the letter dated 9 July 2004 from the Ultimate Parent to Bayerische Hypo- und Vereinsbank AG
setting out the steps and undertakings required to implement the Reorganisation; 

"Reorganisation Tax Opinion" means a tax opinion from Ernst & Young (in form and substance satisfactory to the Agent and addressed to the Finance
Parties) being an updated version of the of the tax opinion delivered by Ernst & Young in August 2004 as contemplated under item 9 under the heading "Undertakings" of the
Reorganisation Letter; 

14

 

"Renewal Request" means a written notice delivered to the Agent in accordance with clause 6.6 (Renewal of a Bank
Guarantee);

"Repeating Representations" means each of the representations set out in clause 21.2 (Status),
clause 21.3 (Binding obligations), clause 21.4 (Non-conflict with other
obligations), clause 21.5 (Power and authority), clause 21.6 (Validity and admissibility
in evidence), clause 21.7 (Governing law and enforcement), clause 21.10 (No
default), clause 21.11.3 (No misleading information), clause 21.12.3 and clause 21.12.4
(Financial statements), clause 21.13 (Pari passu ranking) and clause 21.16
(Good title to assets); 

"Resignation Letter" means a letter substantially in the form set out in Schedule 7 (Form of Resignation
Letter); 

"Rollover Utilisation" means one or more Utilisations: 

	(a)
	made
or to be made on the same day that (i) a maturing Loan is due to be repaid or (ii) the Borrower is obliged to pay to the Agent for the Issuing Bank the amount of
any claim under a Bank Guarantee;

	(b)
	the
aggregate amount of which is equal to or less than (i) the maturing Loan or (ii) the amount of the claim under the Bank Guarantee;

	(c)
	in
the same currency as (i) the maturing Loan (unless it arose as a result of the operation of clause 8.2 (Unavailability of a
currency) or (ii) the claim under the Bank Guarantee; and

	(d)
	made
or to be made to the Borrower for the purpose of (i) refinancing a maturing Loan or (ii) satisfying the obligations of the Borrower to pay the amount of a claim
under the Bank Guarantee to the Agent for the Issuing Bank; 

"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, 

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 Borrower and the Lenders; 

"Security" means a mortgage, charge, pledge, lien, assignment by way of security, guarantee, parallel debt obligation or other security interest
securing any obligation of any person or any other agreement or arrangement having a similar effect; 

"Security Documents" means: 

	(a)
	German
law global assignment agreement (Globalzession) between the Borrower and the Security Agent;

	(b)
	German
law transfer of assets by way of security (Raumsicherungsübereignung) between the Borrower and the Security
Agent; 

15

 

	(c)
	German
law pledge of bank accounts (Kontenverpfändung) between the Borrower and the Security Agent; and

	(d)
	German
law pledge of claims under the Hedging Agreements (Verpfändung) between the Borrower and the Security Agent; and

	(e)
	any
other document agreed to be a "Security Document" by both the Agent and the Borrower; 

"Security Pooling Agreement" means the security pooling agreement entered into on or about the date of this Agreement between,  inter alia, the Agent, the Security
Agent, the Hedging Bank, the Original Lender and the Original Obligors; 

"Shareholder Distribution Account" the account named "Shareholder Distribution Account" held by the Borrower with Bayerische Hypo- und
Vereinsbank AG; 

"Shareholder Loan Agreements" means: 

	(a)
	each
Refinancing Shareholder Loan Agreement;

	(b)
	each
Old Shareholder Loan Agreement; and

	(c)
	any
other document, entered into on substantially the same terms as the Refinancing Shareholder Loan Agreements and agreed to be a "Shareholder Loan Agreement" by both the Agent and
the Borrower; 

"Shareholders' Undertaking Agreement" means the shareholders' undertaking agreement entered into on or about the date of this Agreement between,  inter alia, the
Ultimate Parent, the Security Agent, the Parent, ZPRG and the Original Borrower; 

"Specified Time" means a time determined in accordance with Schedule 12 (Timetables); 

"Subordinated Agreements" means any instruments under which Subordinated Liabilities arise or are regulated (including the Shareholder Loan Agreements); 

"Subordinated Creditor" means the Ultimate Parent, the Parent (as a creditor in respect of Subordinated Debt) and each other person to whom a member of
the ZPR Group owes Subordinated Liabilities and that is from time to time party to the Shareholders' Undertaking Agreement as a Subordinated Creditor and any other person, not being a member of the
ZPR Group, that may from time to time hold shares in any member of the ZPR Group; 

"Subordinated Debt" means any debt incurred by a member of the ZPR Group pursuant to a Shareholder Loan Agreement including interest and accrued
interest; 

"Subordinated Liabilities" means all or any (as the context may require) of any and all obligations for the payment or repayment of money, whether as
principal or as surety and whether present or future, actual or contingent, but excluding any obligations for the payment or repayment of Operating Costs, of any member of the ZPR Group to the
Subordinated Creditors on any account whatsoever including any Subordinated Debt and the share capital of any member of the ZPR Group; 

"Subsidiary" means companies which are dependent enterprises of the relevant Holding Company, or any company in respect of which such term is used,
within the meaning of Sec. 17 German Stock Corporation Act and subsidiaries within the meaning of Sec. 290 German Commercial Code (but for the purpose of the definition of "ZPR Group",
excluding Dresden Papier); 

16

 

"Surviving Bank Guarantee" has the meaning given to it in clause 7.2.5 (Claims under a Bank
Guarantee); 

"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); 

"Term" means, in relation to any Bank Guarantee, the period from its Utilisation Date until its Expiry Date; 

"Termination Date" means 15 February 2010. 

"Total Commitments" means the aggregate of the Commitments, being EURO 40,000,000 at the date of this Agreement; 

"Transaction Documents" means the Finance Documents, the Reorganisation Documents, any Shareholder Loan Agreement, any other Subordinated Agreement, any
Fiscal Unity Agreement, the Management Fee Agreement, any ZPR Merger Document and any other document agreed to be a "Transaction Document" by both the Agent and the Parent; 

"Transaction Security" means the Security created or purported to be created under or pursuant to the Security Documents or any other Finance Document; 

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

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

	(b)
	the
date on which the Agent executes the Assignment and Assumption Certificate; 

"Treasury Transactions" means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or
price; 

"Trust Agreement" means the trust agreement in respect of ZPR KG entered into on 28 May 2001 between ZPR Beteiligung and Spezialfabrik
Blankenstein GmbH (as the legal predecessor to D&Z Beteiligung); 

"Ultimate Parent" means Mercer International Inc., a Massachusetts business trust, organised under the laws of the State of Washington,
United States of America having its office at 14009 Interurban Avenue, Suite 282, Seattle, Washington 98168, United States of America; 

"Unencumbered Cash" has the meaning ascribed to it in clause 23.1 (Financial definitions); 

"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents; 

"USD"/"Dollar"/"$" means the lawful currency of the
United States of America and, in respect of all payments to be made under the Finance Documents in Dollars, funds which are for same day settlement in the New York Clearing House
Interbank Payments System (or such other funds as may at the relevant time be customary for the settlement of international banking transactions denominated in Dollars); 

17

 

"Utilisation" means a Loan or a Bank Guarantee; 

"Utilisation Date" means, subject to clause 6.8 (Treatment of Existing Bank Guarantees), the date
on which a Utilisation is made; 

"Utilisation Request" means a notice substantially in the form set out in Schedule 3 (Utilisation
Request); 

"VAT" shall be construed as a reference to value added tax and any other tax of a similar nature which may be imposed from time to time in any relevant
jurisdiction; 

"ZPR Group" means the Parent and its Subsidiaries for the time being and "member of the ZPR Group" shall
be construed accordingly; 

"ZPR Merger" has the meaning given to that term in paragraph (F) of the Preamble; 

"ZPR Merger Documents" means the documents to be entered into by (among others) ZPRG, ZPR KG and ZPR Beteiligung and any Authorisation required for the
purpose of effecting the ZPR Merger; 

	1.2
	Construction  
	1.2.1
	Unless a contrary indication appears, any reference in this Agreement to: 
	(a)
	the
"Agent", the "Arranger", the
"Borrower", any "Finance Party", any "Guarantor", the
"Issuing Bank", any "Lender", any "Obligor" or any
"Party" shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

	(b)
	"assets" includes present and future properties, revenues and rights of every description;

	(c)
	"assignment" means Abtretung;

	(d)
	"authorised signatory" means Geschäftsführer or  Prokurist insofar as any company incorporated or limited
partnership established in the Federal Republic of Germany is concerned;

	(e)
	"board of directors" means Geschäftsführung insofar as
any company incorporated or limited partnership established in the Federal Republic of Germany is concerned;

	(f)
	"control" means the power to direct the management and policies of an entity, whether through the ownership of voting capital, by
contract or otherwise;

	(g)
	a
reference to a "director" means Geschäftsführer insofar
as any company incorporated or limited partnership established in the Federal Republic of Germany is concerned;

	(h)
	"disposal" or "dispose" means a sale, lease, licence, transfer or loan (but not
including by way of loan of money) or other disposal by a person of any asset, undertaking or business (whether by a voluntary or involuntary single transaction or series of transactions);

	(i)
	the
"equivalent" of an amount specified in a particular currency (the "specified currency
amount") shall be construed as a reference to the amount of the other relevant currency which can be purchased with the specified currency amount Agent's Spot Rate of Exchange; 

18

 

	(j)
	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;

	(k)
	"gross negligence" means grobe Fahrlässigkeit;

	(l)
	"guarantee" means any guarantee, letter of credit, bond, indemnity or similar assurance against loss including a third party security
arrangement, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets
of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;

	(m)
	"including" means "including without limitation";

	(n)
	"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;

	(o)
	a
reference to a "limited partnership" means, insofar as it is established under the laws of the Federal Republic of Germany, a  GmbH & Co. KG;

	(p)
	"management" means Geschäftsführung insofar as any
company incorporated or limited partnership established in the Federal Republic of Germany is concerned;

	(q)
	references
to something being in the "ordinary course of business" of a person means in  gewöhnlichem Geschäftsgang;

	(r)
	"pay", "prepay" or "repay" in
clause 24 (General undertakings) includes by way of set-off, combination of accounts or otherwise;

	(s)
	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;

	(t)
	"promptly" means unverzüglich;

	(u)
	a
"regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any
governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

	(v)
	"rights" include all rights, whether actual or contingent, present or future, arising under contract or law;

	(w)
	the
"share capital" of a company includes in the case of a partnership, partnership interests and in any case includes any equity or
other ownership interest;

	(x)
	"trustee", "fiduciary" and "fiduciary
duty" has in each case the meaning given to such term under applicable law;

	(y)
	"wilful default" and "wilful misconduct" means  Vorsatz;

	(z)
	references
(i) to the "winding up", "dissolution", or
"administration" of a person or (ii) to a "receiver" or "administrative
receiver" in the context of insolvency proceedings or security enforcement actions in respect of a person shall be construed so as to include any equivalent or analogous
proceedings or any equivalent and analogous person or appointee (respectively) under the law of the jurisdiction in which such person is established or incorporated or any jurisdiction in which such
person carries on business including (in respect of proceedings) the seeking or occurrence of liquidation, winding up, reorganisation, dissolution, administration, arrangement, adjustment, protection
or relief of debtors; 

19

 

	(aa)
	the
Borrower "repaying" or "prepaying" a Bank Guarantee means:

	(i)
	the
Borrower providing cash cover for that Bank Guarantee;

	(ii)
	the
maximum amount payable under the Bank Guarantee being reduced in accordance with its terms; or

	(iii)
	the
Issuing Bank being satisfied that it has no further liability under that Bank Guarantee, 

and
the amount by which a Bank Guarantee is repaid or prepaid under clause 1.2.1(aa)(i) and clause 1.2.1(aa)(ii) above is the amount of the relevant cash cover or reduction; 

	(bb)
	the
Borrower providing "cash cover" for a Bank Guarantee means the Borrower paying an amount in the currency of the Bank Guarantee to
an interest-bearing account in the name of the Borrower and the following conditions are met:

	(i)
	the
account is with the Agent or the Issuing Bank (if the cash cover is to be provided for all the Lenders) or with a Lender (if the cash cover is to be provided for
that Lender);

	(ii)
	withdrawals
from the account may only be made to pay a Finance Party amounts due and payable to it under this Agreement in respect of that Bank Guarantee until no
amount is or may be outstanding under that Bank Guarantee; and

	(iii)
	the
Borrower has executed a security document, in form and substance satisfactory to the Agent or the Finance Party with which that account is held, creating a first
ranking security interest over that account;

	(cc)
	the
Interest Period of a Bank Guarantee will be construed as a reference to the Term of that Bank Guarantee;

	(dd)
	an
amount borrowed includes any amount utilised by way of Bank Guarantee;

	(ee)
	a
Utilisation made or to be made to the Borrower includes a Bank Guarantee issued on its behalf;

	(ff)
	a
Lender funding its participation in a Utilisation includes a Lender participating in a Bank Guarantee;

	(gg)
	amounts
outstanding under this Agreement include amounts outstanding under or in respect of any Bank Guarantee;

	(hh)
	an
outstanding amount of a Bank Guarantee at any time is the maximum amount that is or may be payable by the Borrower in respect of that Bank Guarantee at that time;

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

	(jj)
	a
time of day is a reference to Central European time (CET) or, as the context requires, London time; and 

20

 

	(kk)
	words
importing the plural shall include the singular and vice versa.

	1.2.2
	Section,
clause and Schedule headings are for ease of reference only.

	1.2.3
	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.

	1.2.4
	A
Default or an Event of Default is "continuing" if it has not been remedied or waived.

	1.2.5
	In
any calculation or determination done for the purposes of a Finance Document, no amount shall be double-counted or duplicated.

	1.3
	Language  

This
Agreement is made in the English language. The English language version of this Agreement shall prevail over any translation of this Agreement, save for where a German translation of a word or
phrase appears in the text of this Agreement, in which case the German translation of such word or phrase shall prevail. 

	1.4
	Shareholder Distribution Account  

Notwithstanding
any provision of this Agreement or any other Security Document to the contrary, each Obligor, the Agent and the Lenders agree that: 

	1.4.1
	the
Shareholder Distribution Account shall not be subject to any Security from, by or under any Security Document;

	1.4.2
	nothing
herein or in any Security Document shall restrict, prohibit or otherwise limit the Borrower from paying, disbursing or transmitting all or parts of any moneys or assets in
the Shareholder Distribution Account or any other Available Cash in its sole discretion from time to time and at any time; and

	1.4.3
	in
the event of any conflict or inconsistency between this Agreement and the Security Documents as regards the Shareholder Distribution Account or any other Available Cash, the
provisions of this Agreement shall take precedence and govern for all purposes. 

21

  

 
 

SECTION 2
  THE FACILITY    
    

2      The Facility  

	2.1
	The Facility  

Subject
to the terms of this Agreement, the Lenders make available to the Borrower a multicurrency revolving credit facility in an aggregate amount equal to the Total Commitments. 

	2.2
	Finance Parties' rights and obligations

 
	2.2.1
	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
(Ausschuß der Gesamtschuldnerischen Haftung).

	2.2.2
	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. The formation of joint property (Gesamthandsvermögen) shall be excluded.

	2.2.3
	A
Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

	2.3
	Obligors' Agent

 
	2.3.1
	Each Obligor (other than the Borrower) by its execution of this Agreement or an Accession Letter irrevocably appoints and authorises
(bevollmächtigt) the Borrower, and each German Obligor (other than the Borrower) hereby releases the Borrower from the restrictions of
Section 181 of the German Civil Code (BGB):

	(a)
	as
agent for such Obligor to receive all notices, requests, demands or other communications under this Agreement which shall, without prejudice to any other effective mode of serving
the same, be properly served on such Obligor if served on the Parent in accordance with clause 33 (Notices); and

	(b)
	to
supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, in the case of the Borrower,
Utilisation Requests), to execute on its behalf any Accession Letter, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected
by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; 

and
in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including any Utilisation Requests) or executed or made the agreements or effected the
amendments, supplements or variations, or received the relevant notice, demand or other communication. 

	2.3.2
	Every
act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors' Agent or given to
the Obligors' Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after
such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of
any conflict between any notices or other communications of the Obligors' Agent and any other Obligor, those of the Obligors' Agent shall prevail. 

22

 

3      Purpose  

	3.1
	Purpose  

The
Borrower shall apply all amounts borrowed by it under the Facility: 

	3.1.1
	towards
the financing of its working capital requirements; and

	3.1.2
	up
to a maximum aggregate amount of EUR 20,000,000, to partly finance the Refinancing.

	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  

The
Borrower may not deliver a Utilisation Request unless the Agent has received all of the documents and other evidence listed in Part I of Schedule 2
(Conditions precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so
satisfied. 

	4.2
	Further conditions precedent  

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: 

	4.2.1
	in
the case of a Rollover Utilisation, no Event of Default is continuing or would result from the proposed Loan and, in the case of any other Loan, no Default is continuing or
would result from the proposed Loan; and

	4.2.2
	the
Repeating Representations to be made by each Obligor are true in all material respects.

	4.3
	Maximum number of Utilisation

 
	4.3.1
	The Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation 10 or more Loans would be outstanding.

	4.3.2
	Any
Loan made by a single Lender under clause 8.2 (Unavailability of a currency) shall not be taken into account in this
clause 4.3. 

23

 
 
 

SECTION 3
  UTILISATION    
    

5      Utilisation — Loans  

	5.1
	Delivery of a Utilisation Request for Loans  

The
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 for Loans

 
	5.2.1
	Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

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

	(b)
	the
currency and amount of the Utilisation comply with clause 5.3 (Currency and amount); and

	(c)
	the
proposed Interest Period complies with clause 12 (Interest Periods).

 

	5.3
	Currency and amount

 
	5.3.1
	The currency specified in a Utilisation Request must be the Base Currency or the Optional Currency.

	5.3.2
	The
amount of the proposed Loan must be:

	(a)
	a
minimum of EUR 1,000,000 (or its equivalent) (and an integral multiple of EUR 250,000) (or its equivalent); or

	(b)
	in
any event such that its Base Currency Amount is less than or equal to the Available Facility.

 

	5.4
	Lenders' participation

 
	5.4.1
	If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the Utilisation Date through
its Facility Office.

	5.4.2
	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 the
Loan.

	5.4.3
	The
Agent shall determine the Base Currency Amount of each Loan which is to be made in the 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.

	5.4.4
	The
Borrower irrevocably authorises (bevollmächtigt) and directs the Agent to remit the proceeds of each Loan as
follows:

	(a)
	in
the case of a Loan to be used to repay Existing Indebtedness, to the account of the relevant bank or financial institution in respect of the Existing Indebtedness to be repaid as
previously notified to the Agent by the Borrower; 

24

 

	(b)
	in
the case of all other Loans, to the account specified in the relevant Utilisation Requests.

	5.4.5
	For
the purposes of this clause 5.4 each Party, which is incorporated or established under the laws of the Federal Republic of Germany, hereby releases the Agent from the
restrictions of section 181 of the German Civil Code (BGB). 

6      Utilisation — Bank Guarantees  

	6.1
	Bank Guarantees

 
	6.1.1
	The Facility may be utilised by way of Bank Guarantees.

	6.1.2
	Clause 5
(Utilisation — Loans) does not apply to Utilisations by way of Bank
Guarantees.

	6.2
	Delivery of a Utilisation Request for Bank Guarantees  

The
Borrower (or the Parent on its behalf) may request a Bank Guarantee to be issued by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time. 

	6.3
	Completion of a Utilisation Request for Bank Guarantees

 
	6.3.1
	Each Utilisation Request for a Bank Guarantee is irrevocable and will not be regarded as having been duly completed unless:

	(a)
	it
specifies that it is for a Bank Guarantee;

	(b)
	the
proposed Utilisation Date is a Business Day within the Availability Period applicable to the Revolving Facility;

	(c)
	the
currency and amount of the Bank Guarantee comply with clause 6.4 (Currency and amount);

	(d)
	the
Expiry Date of the Bank Guarantee falls on or before the Termination Date;

	(e)
	the
delivery instructions for the Bank Guarantee are specified; and

	(f)
	the
identity of the beneficiary and purpose of the Bank Guarantee have been approved by the Agent and the Issuing Bank.

	6.3.2
	Multiple
Utilisations may be requested in a Utilisation Request where the proposed Utilisation Date is the Closing Date. Only one Utilisation may be requested in each subsequent
Utilisation Request.

	6.4
	Currency and amount

 
	6.4.1
	The currency specified in a Utilisation Request for a Bank Guarantee must be the Base Currency or the Optional Currency.

	6.4.2
	The
amount of the proposed Bank Guarantee must be such that its Base Currency Amount is less than or equal to the Available Facility.

	6.5
	Issue of Bank Guarantees

 
	6.5.1
	If the conditions set out in this Agreement have been met, the Issuing Bank shall issue the Bank Guarantee on the Utilisation Date. 

25

 
	6.5.2
	The
Issuing Bank will only be obliged to comply with clause 6.5.1 above if on the date of the Utilisation Request or Renewal Request and on the proposed Utilisation Date:

	(a)
	in
the case of a Bank Guarantee to be renewed in accordance with clause 6.6 (Renewal of a Bank Guarantee), no action has been
taken under clause 25.19 (Acceleration) and, in the case of any other Utilisation, no Default is continuing or would result from the proposed
Utilisation; and

	(b)
	in
relation to any Utilisation on the Closing Date, all the representations and warranties in clause 21 (Representations) or, in
relation to any other Utilisation, the Repeating Representations to be made by each Obligor are true.

	6.5.3
	The
amount of each Lender's participation in each Bank Guarantee will be equal to the Guarantee Proportion.

	6.5.4
	The
Agent shall notify the Issuing Bank and each Lender of the details of the requested Bank Guarantee and its participation in that Bank Guarantee by the Specified Time.

	6.6
	Renewal of a Bank Guarantee

 
	6.6.1
	The Borrower (or the Parent on its behalf) may request that any Bank Guarantee issued on its behalf be renewed by delivery to the Agent of a Renewal Request
in substantially similar form to a Utilisation Request for a Bank Guarantee by the Specified Time.

	6.6.2
	The
Finance Parties shall treat any Renewal Request in the same way as a Utilisation Request for a Bank Guarantee.

	6.6.3
	The
terms of each renewed Bank Guarantee shall be the same as those of the relevant Bank Guarantee immediately prior to its renewal, except that:

	(a)
	its
amount may be less than the amount of the Bank Guarantee immediately prior to its renewal; and

	(b)
	its
Term shall start on the date which was the Expiry Date of the Bank Guarantee immediately prior to its renewal, and shall end on the proposed Expiry Date specified in the Renewal
Request.

	6.6.4
	If
the conditions set out in this Agreement have been met, the Issuing Bank shall amend and re issue any Bank Guarantee pursuant to a Renewal Request.

	6.7
	Revaluation of Bank Guarantees

 
	6.7.1
	If any Bank Guarantee is denominated in the Optional Currency, the Agent shall at six monthly intervals after the date of this Agreement recalculate the
Base Currency Amount of that Bank Guarantee by notionally converting into the Base Currency the outstanding amount of that Bank Guarantee on the basis of the Agent's Spot Rate of Exchange on the date
of calculation.

	6.7.2
	The
Borrower shall, if requested by the Agent following any calculation under clause 6.7.1 above, ensure that within five Business Days sufficient Utilisations are prepaid
to prevent the Base Currency Amount of the Utilisations exceeding the Total Commitments following any adjustment to a Base Currency Amount under clause 6.7.1 above.

	6.8
	Treatment of Existing Bank Guarantees  

On
and from the Closing Date: 

26

 
	6.8.1
	each
Existing Bank Guarantee shall be deemed to be a Bank Guarantee issued under this Agreement subject to the provisions of clause 6.5 (Issue of
Bank Guarantee) which shall apply mutatis mutandis to the deemed issue of a Bank Guarantee under this clause 6.8;

	6.8.2
	that
date shall be deemed to be the Utilisation Date for each Existing Bank Guarantee; and

	6.8.3
	in
addition to the Conditions Governing Guarantees all the terms of this Agreement relating to Bank Guarantees shall apply to the Existing Bank Guarantees. 

7      Bank Guarantees  

	7.1
	Immediately payable  

If
a Bank Guarantee or any amount outstanding under a Bank Guarantee is expressed to be immediately payable, the Borrower shall repay or prepay that amount immediately. 

	7.2
	Claims under a Bank Guarantee

 
	7.2.1
	The Borrower irrevocably and unconditionally authorises the Issuing Bank to pay any claim made or purported to be made under a Bank Guarantee requested by
it (or requested by the Parent on its behalf) and which appears on its face to be in order (in this clause 7.2, a "claim").

	7.2.2
	The
Borrower shall immediately on demand or, if such payment is being funded by a Loan, shall within five Business Days of demand, pay to the Agent for the Issuing Bank an amount
equal to the amount of any claim paid.

	7.2.3
	The
Borrower acknowledges that the Issuing Bank:

	(a)
	is
not obliged to carry out any investigation or seek any confirmation from any other person before paying a claim; and

	(b)
	deals
in documents only and will not be concerned with the legality of a claim or any underlying transaction or any available set off, counterclaim or other defence of any person.

	7.2.4
	The
obligations of the Borrower under this clause will not be affected by:

	(a)
	the
sufficiency, accuracy or genuineness of any claim or any other document; or

	(b)
	any
incapacity of, or limitation on the powers of, any person signing a claim or other document.

	7.2.5
	If
a Bank Guarantee remains outstanding after the Termination Date (a "Surviving Bank Guarantee") but has on or before that date
been repaid by way of provision of cash cover as set out in clause 1.2.1(aa)(i) (Construction), that Bank Guarantee shall be treated as being
outstanding under a bilateral guarantee facility provided by the Issuing Bank, the terms of which (including the fee) are to be set out in a separate document between the Issuing Bank and the
Borrower.

	7.3
	Indemnities

 
	7.3.1
	The Borrower shall immediately on demand indemnify the Issuing Bank against any cost, loss or liability incurred by the Issuing Bank (otherwise than by
reason of the Issuing Bank's gross negligence or wilful misconduct) in acting as the Issuing Bank under any Bank Guarantee requested by (or on behalf of) the Borrower. 

27

 
	7.3.2
	Each
Lender shall (according to its Guarantee Proportion) immediately on demand indemnify the Issuing Bank against any cost, loss or liability incurred by the Issuing Bank
(otherwise than by reason of the Issuing Bank's gross negligence or wilful misconduct or after the Termination Date under or in connection with a Surviving Bank Guarantee) in acting as the Issuing
Bank under any Bank Guarantee (unless the Issuing Bank has been reimbursed by an Obligor pursuant to a Finance Document).

	7.3.3
	If
any Lender is not permitted (by its constitutional documents or any applicable law) to comply with clause 7.3.2 above, then that Lender will not be obliged to comply with
clause 7.3.2 above and shall instead take all steps required to ensure that, on the date the Bank Guarantee is issued (or if later, on the date the Lender's participation in the Bank Guarantee
is transferred or assigned to the Lender in accordance with the terms of this Agreement), it assumes a participation in the Bank Guarantee in an amount equal to its Guarantee Proportion of that Bank
Guarantee. On receipt of demand from the Agent, that Lender shall pay to the Agent (for the account of the Issuing Bank) an amount equal to its Guarantee Proportion of the amount demanded.

	7.3.4
	The
Borrower which requested (or on behalf of which the Parent requested) a Bank Guarantee shall immediately on demand reimburse any Lender for any payment it makes to the Issuing
Bank under this clause 7.3 in respect of that Bank Guarantee.

	7.3.5
	The
obligations of each Lender under this clause 7.3 are continuing obligations and will extend to the ultimate balance of sums payable by that Lender in respect of any Bank
Guarantee, regardless of any intermediate payment or discharge in whole or in part.

	7.3.6
	The
obligations of any Lender or Borrower under this clause 7.3 will not be affected by any act, omission, matter or thing which, but for this clause, would reduce, release
or prejudice any of its obligations under this clause 7.3 (whether or not known to it or any other person) including:

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

	(b)
	the
release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor or any member of the ZPR 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,
any beneficiary under a Bank Guarantee 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 beneficiary under a Bank Guarantee or any
other person;

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

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

	(g)
	to
the extent legally possible, any insolvency or similar proceedings.

 

	7.4
	Rights of contribution  

No
Obligor will be entitled to any right of contribution or indemnity from any Finance Party in respect of any payment it may make under this clause 7. 

28

 
	7.5
	Settlement conditional  

Any
settlement or discharge between a Lender and the Issuing Bank shall be conditional upon no security or payment to the Issuing Bank by a Lender or any other person on behalf of a Lender being
avoided or reduced by virtue of any laws relating to bankruptcy, insolvency, liquidation or similar laws of general application and, if any such security or payment is so avoided or reduced, the
Issuing Bank shall be entitled to recover the value or amount of such security or payment from such Lender subsequently as if such settlement or discharge had not occurred. 

	7.6
	Exercise of rights  

The
Issuing Bank shall not be obliged before exercising any of the rights, powers or remedies conferred upon it in respect of any Lender by this Agreement or by law: 

	7.6.1
	to
take any action or obtain judgment in any court against any Obligor;

	7.6.2
	to
make or file any claim or proof in a winding up or dissolution of any Obligor; or

	7.6.3
	to
enforce or seek to enforce any other security taken in respect of any of the obligations of any Obligor under this Agreement. 

8      Optional Currency  

	8.1
	Selection of currency  

The
Borrower (or the Parent on its behalf) shall select the currency of a Utilisation in a Utilisation Request. 

	8.2
	Unavailability of a currency  

If
before the Specified Time on any Quotation Day: 

	8.2.1
	a
Lender notifies the Agent that the Optional Currency (if requested) is not readily available to it in the amount required; or

	8.2.2
	a
Lender notifies the Agent that compliance with its obligation to participate in a Loan in the 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 8.2 will be required to
participate in the Utilisation in the Base Currency (in an amount equal to that Lender's proportion of the Base Currency Amount or, in respect of a Rollover Utilisation, an amount equal to that
Lender's proportion of the Base Currency Amount of the maturing Utilisation that is due to be made or in respect of a Bank Guarantee, an amount equal to that Lender's Guarantee Proportion) and its
participation will be treated as a separate Utilisation, without further action of the Borrower, denominated in the Base Currency during that Interest Period. 

	8.3
	Participation in a Utilisation  

Each
Lender's participation in a Utilisation will be determined in accordance with 5.4.2 (Lenders' participation) in case of a Loan and in accordance
with clause 6.5 (Issue of Bank Guarantees) in case of a Bank Guarantee. 

29

 
 
 

SECTION 4
  REPAYMENT, PREPAYMENT AND CANCELLATION    
    

9      Repayment  

	9.1
	Repayment of Loans  

The
Borrower shall repay each Loan on the last day of its Interest Period and all Loans in full on the Termination Date. 

	9.2
	Repayment of Guarantees  

The
Borrower shall repay each Bank Guarantee on its Expiry Date and all Bank Guarantees in full on the Termination Date. 

10    Prepayment and cancellation  

	10.1
	Illegality  

If
it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Utilisation: 

	10.1.1
	that
Lender shall promptly notify the Agent upon becoming aware of that event;

	10.1.2
	upon
the Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; and

	10.1.3
	the
Borrower shall repay that Lender's participation in the Utilisations made to it on the last day of the Interest Period for each Utilisation occurring after the Agent has
notified the Borrower 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).

	10.2
	Change of Control  

Upon
the occurrence of a Change of Control: 

	10.2.1
	the
Borrower shall promptly notify the Agent upon becoming aware of that event;

	10.2.2
	a
Lender shall not be obliged to fund a Utilisation (except for a Rollover Utilisation); and

	10.2.3
	if
the Majority Lenders so require, the Agent shall, by not less than 30 Business Days notice to the Parent, cancel the Total Commitments and declare all outstanding Utilisations,
together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Total Commitments will be cancelled and all such outstanding
amounts will become immediately due and payable.

	10.3
	Voluntary cancellation  

The
Borrower (or the Parent on its behalf) may, if: 

	10.3.1
	in
respect of the last day of any Interest Period, it gives the Agent not less than 10 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice; or 

30

 
	10.3.2
	at
any other time, it gives the Agent not less than 30 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 EUR 1,000,000 (or its equivalent)) of the Available Facility. Any cancellation under this clause 10.3 shall reduce the Commitments of the
Lenders rateably. 

	10.4
	Voluntary prepayment of Loans  

The
Borrower (or the Parent on its behalf) may, if it gives the Agent not less than 30 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 EUR 1,000,000 (or its equivalent)). 

	10.5
	Applications of Prepayments  

Prepayments
made under this clause 10 shall be applied as follows: 

	10.5.1
	first,
in prepayment of the Loans in order of maturity until repaid or prepaid in full; and

	10.5.2
	second,
in prepayment of the Bank Guarantees in accordance with the notice delivered under clause 10.2 (Change of Control)
or clause 10.3 (Voluntary cancellation), as the case may be.

	10.6
	Right of repayment and cancellation in relation to a single Lender

 
	10.6.1
	If:

	(a)
	any
sum payable to any Lender by an Obligor is required to be increased under clause 15.2.3 (Tax gross-up); or

	(b)
	any
Lender claims indemnification from the Borrower under clause 15.3 (Tax indemnity) or clause 16.1
(Increased costs), 

the
Borrower 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 Utilisations. 

	10.6.2
	On
receipt of a notice referred to in clause 10.6.1(a) above, the Commitment of that Lender shall immediately be reduced to zero.

	10.6.3
	On
the last day of each Interest Period which ends after the Borrower has given notice under clause 10.6.1(a) above (or, if earlier, the date specified by the Borrower in
that notice), the Borrower shall repay that Lender's participation in that Utilisation.

	10.7
	Restrictions

 
	10.7.1
	Any notice of cancellation or prepayment given by any Party under this clause 10 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. Any such cancellation or prepayment
shall oblige the Borrower to make the cancellation or prepayment of the specified amount on the specified date.

	10.7.2
	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. 

31

 
	10.7.3
	Unless
a contrary indication appears in this Agreement, any part of the Facility which is prepaid may be reborrowed in accordance with the terms of this Agreement.

	10.7.4
	The
Borrower shall not repay or prepay all or any part of the Utilisations or cancel all or any part of the Commitments except at the times and in the manner expressly provided
for in this Agreement.

	10.7.5
	No
amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated. 

If
the Agent receives a notice under this clause 10 it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate. 

32

 
 
 

SECTION 5
  COSTS OF UTILISATIONS    
    

11    Interest  

	11.1
	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: 

	11.1.1
	Margin;

	11.1.2
	in
relation to any Loan in EURO, EURIBOR or, in relation to any Loan in USD, LIBOR; and

	11.1.3
	Mandatory
Cost, if any.

	11.2
	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. 

	11.3
	Default interest

 
	11.3.1
	If the Borrower fails to pay any amount (other than interest) 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 1.5 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 reasonably selected by the Agent.

	11.3.2
	If
the Borrower fails to pay any interest payable by it under a Finance Document, it shall make a liquidated damages payment (pauschalierter
Schadensersatz) for all amounts of interest overdue equal to the amount which is payable by applying the rate to be determined in accordance with this clause 11.3 on the
amount of interest overdue for the period from the due date of the relevant interest payment up to the date of actual payment (both before and after judgment), provided that the Borrower shall be free
to prove that no damage has arisen, or that damage has not arisen in the asserted amount.

	11.3.3
	Any
interest accruing or damages payable under this clause 11.3 shall be immediately payable by the Borrower on demand by the Agent.

	11.3.4
	Any
further damages and indemnities shall be dealt with in accordance with clause 17.2 (Other indemnities).

	11.4
	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. 

33

 

12    Interest Periods  

	12.1
	Selection of Interest Periods

 
	12.1.1
	Unless the Borrower (or the Parent on its behalf) has selected an Interest Period in accordance with clause 12.1.2 and clause 12.1.3 below
and subject to this clause 12, each Interest Period shall be six Months.

	12.1.2
	The
Borrower (or the Parent on its behalf) may select an Interest Period for a Loan in the Utilisation Request for that Loan.

	12.1.3
	Subject
to this clause 12, the Borrower (or the Parent on its behalf) may select an Interest Period of 1, 3 or 6 Months or any other period agreed between the Borrower and
the Agent (acting on the instructions of all the Lenders).

	12.1.4
	An
Interest Period for a Loan shall not extend beyond the Termination Date.

	12.1.5
	Each
Interest Period for a Loan shall start on the Utilisation Date.

	12.1.6
	A
Loan has one Interest Period only.

	12.2
	Consolidation of Loans  

If,
prior to the expiry of the Availability Period, two or more Interest Periods end on the same date the Loans to which those Interest Periods relate shall be consolidated into, and treated as, a
single Loan on the last day of the relevant Interest Period. 

	12.3
	Changes to Interest Periods

 
	12.3.1
	Prior to determining the interest rate for a Utilisation, the Agent may shorten the Interest Period for any Loan to ensure that, when aggregated with the
Available Facility, there are sufficient Loans (with an aggregate Base Currency Amount equal to or greater than the Reduction Instalment) which have an Interest Period ending on a Reduction Date for
the scheduled reduction to occur.

	12.3.2
	If
the Agent makes any of the changes to an Interest Period referred to in this clause 12.3, it shall promptly notify the Borrower and the Lenders.

	12.4
	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). 

13    Changes to the calculation of interest  

	13.1
	Absence of quotations  

Subject
to clause 13.2 (Market disruption), if EURIBOR or, if applicable, LIBOR 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 EURIBOR or LIBOR shall be determined on the basis of the quotations of the remaining Reference
Banks. 

34

 
	13.2
	Market disruption

 
	13.2.1
	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:

	(a)
	the
Margin;

	(b)
	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 of funding its participation in that Loan from whatever source it may reasonably select; and

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

	13.2.2
	In
this Agreement "Market Disruption Event" means:

	(a)
	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 EURIBOR or, if applicable, LIBOR for the relevant currency and Interest Period; or

	(b)
	before
close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan
exceed 40 per cent. of that Loan) that the cost to it of obtaining matching deposits in the Relevant Interbank Market would be in excess of EURIBOR or, if applicable, LIBOR.

 

	13.3
	Alternative basis of interest or funding

 
	13.3.1
	If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of
not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

	13.3.2
	Any
alternative basis agreed pursuant to clause 13.3.1 above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

	13.4
	Break Costs

 
	13.4.1
	The Borrower shall, within five 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 it on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

	13.4.2
	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. 

14    Fees  

	14.1
	Commitment fee

 
	14.1.1
	The Borrower shall pay to the Agent (for the account of each Lender) a fee in the Base Currency computed at the rate of 0.35 per cent. per
annum on that Lender's Available Commitment for the Availability Period. 

35

 
	14.1.2
	The
accrued commitment fee is payable quarterly in arrear on each 31 March, 30 June, 30 September and 31 December during the Availability Period, on
the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.

	14.2
	Arrangement fee  

The
Borrower shall pay to the Arranger an arrangement fee in the amount and at the times agreed in a Fee Letter. 

	14.3
	Agency fee  

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

	14.4
	Fees payable in respect of Bank Guarantees

 
	14.4.1
	The Borrower (or the Parent on its behalf) shall pay to the Issuing Bank (for its own account) a fronting fee in respect of each Bank Guarantee requested
in accordance with the Fee Letter.

	14.4.2
	The
Borrower (or the Parent on its behalf) shall pay to the Agent (for the account of each Lender) a Bank Guarantee fee at an annual rate of 125 basis points on the outstanding
amount of each Bank Guarantee requested by it for the period from the issue of that Bank Guarantee until such Bank Guarantee is repaid or prepaid in full. This fee shall be distributed according to
each Lender's Guarantee Proportion of that Bank Guarantee.

	14.4.3
	The
accrued Bank Guarantee fee on a Bank Guarantee shall be payable on the first day of each successive period of three Months (or such shorter period as shall end on the Expiry
Date for that Bank Guarantee) starting on the date of issue of that Bank Guarantee. The accrued Bank Guarantee fee is also payable to the Agent on the cancelled amount of any Lender's Commitment at
the time the cancellation is effective if that Commitment is cancelled in full and the Bank Guarantee is prepaid or repaid in full. 

36

 
 
 

SECTION 6
  ADDITIONAL PAYMENT OBLIGATIONS    
    

15    Tax gross up and indemnities  

	15.1
	Definitions

 
	15.1.1
	In this clause 15: 

"Protected Party" means a Finance Party that is or will be subject to any liability, or required to make any payment, for or on account of Tax 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. 

"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 15.2 (Tax
gross-up) or a payment under clause 15.3 (Tax indemnity). 

	15.1.2
	In
this clause 15 a reference to "determines" or "determined" means a
determination made in the absolute discretion of the person making the determination.

	15.2
	Tax gross-up

 
	15.2.1
	Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

	15.2.2
	Each
of the Parent and the Borrower 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. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a
Lender it shall notify the Parent, the Borrower and that Obligor.

	15.2.3
	If
a Tax Deduction is required by law to be made by an Obligor, 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.

	15.2.4
	An
Obligor is not required to make an increased payment to a Lender under clause 15.2.3 above for a Tax Deduction in respect of tax imposed on a payment of interest on a
Loan, if on the date on which the payment falls due, the Obligor making the payment is able to demonstrate that the payment:

	(a)
	relates
to a Tax referred to in clause 15.3.2 (Tax indemnity); or

	(b)
	could
have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under clause 15.2.7 below.

	15.2.5
	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. 

37

 
	15.2.6
	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 that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the
relevant taxing authority.

	15.2.7
	A
Finance Party and each Obligor that makes a payment to which that Finance Party is entitled shall, to the extent practicable, co-operate in completing any procedural
formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.

	15.3
	Tax indemnity

 
	15.3.1
	The Borrower shall (within five Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost that that
Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

	15.3.2
	Clause 15.3.1
above shall not apply 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
in either case that Tax is imposed on or calculated by reference to the net income or profit (or similar calculation) received or receivable (but not any sum deemed to be received or receivable) by
that Finance Party. 

	15.3.3
	A
Protected Party making, or intending to make, a claim pursuant to clause 15.3.1 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 Borrower.

	15.3.4
	A
Protected Party shall, on receiving a payment from an Obligor under this clause 15.3, notify the Agent.

	15.4
	Tax Credit

 
	15.4.1
	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, 

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. 

	15.4.2
	If
such a Tax Credit by reference to which a Finance Party has made a payment to an Obligor under clause 15.4.1(a) above is subsequently disallowed or cancelled, the
Obligor must reimburse any payment made under clause 15.4.1(a) above to the relevant Finance Party.

	15.4.3
	If
an Obligor makes a Tax Payment, a Finance Party will be under no obligation whatsoever to claim a Tax Credit if in the opinion of that Finance Party the making of such claim
might have an adverse effect on its business, operations, property, condition or prospects (financial or otherwise). The relevant Obligor shall bear any out of pocket costs incurred by a Finance Party
in making such a claim. 

38

 
	15.5
	Stamp taxes  

The
Borrower shall pay and, within five Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration
and other similar Taxes payable in respect of any Finance Document. 

	15.6
	Value added tax

 
	15.6.1
	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.

	15.6.2
	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. 

16    Increased costs  

	16.1
	Increased costs

 
	16.1.1
	Subject to clause 16.3 (Exceptions) the Borrower shall, within five Business Days of a demand by the
Agent, pay for the account of a Finance Party the amount of any substantiated 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, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement.

	16.1.2
	In
this Agreement "Increased Costs" means:

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

	(b)
	an
additional or increased cost; or

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

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. 

	16.2
	Increased cost claims

 
	16.2.1
	A Finance Party intending to make a claim pursuant to clause 16.1 (Increased costs) shall notify the
Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.

	16.2.2
	Each
Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs. 

39

 
	16.3
	Exceptions

 
	16.3.1
	Clause 16.1 (Increased costs) does not apply to the extent any Increased Cost is:

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

	(b)
	compensated
for by clause 15.3 (Tax indemnity) (or would have been compensated for under clause 15.3
(Tax indemnity) but was not so compensated solely because any of the exclusions in 15.3.2 (Tax
indemnity) applied);

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

	(d)
	attributable
to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.

	16.3.2
	In
this clause 16.3, a reference to a "Tax Deduction" has the same meaning given to the term in clause 15.1
(Definitions). 

17    Other indemnities  

	17.1
	Currency indemnity

 
	17.1.1
	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:

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

	(b)
	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. 

	17.1.2
	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.

	17.2
	Other indemnities  

The
Borrower shall (or the Parent shall procure that an Obligor will), within five Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance
Party as a result of: 

	17.2.1
	the
occurrence of any Event of Default;

	17.2.2
	a
failure by an Obligor to pay any amount due under a Finance Document on its due date, including any cost, loss or liability arising as a result of clause 30
(Sharing among the Finance Parties);

	17.2.3
	funding,
or making arrangements to fund, its participation in a Utilisation requested by a Borrower (or the Parent on its behalf) in a Utilisation Request but not made by reason
of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); 

40

 
	17.2.4
	a
Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice of prepayment given by a Borrower (or the Parent on its behalf); or

	17.2.5
	any
Environmental Claim or breach of Environmental Law relating to any member of the ZPR Group.

	17.3
	Indemnity to the Agent  

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

	17.3.1
	investigating
any event which it reasonably believes is a Default; or

	17.3.2
	acting
or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised (unless such cost, loss or liability
incurred is a direct result of he Agent's gross negligence or wilful misconduct). 

18    Mitigation by the Lenders  

	18.1
	Mitigation

 
	18.1.1
	Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in
any amount becoming payable under or pursuant to, or cancelled pursuant to, any of clause 10.1 (Illegality), clause 15
(Tax gross-up and indemnities), clause 15.1 (Increased costs) or paragraph 3
of Schedule 4 (Mandatory Cost Formulae) including transferring its rights and obligations under the Finance Documents to another Affiliate or
Facility Office.

	18.1.2
	Clause 18.1.1
above does not in any way limit the obligations of any Obligor under the Finance Documents.

	18.2
	Limitation of liability

 
	18.2.1
	The Borrower shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under
clause 18.1 (Mitigation).

	18.2.2
	A
Finance Party is not obliged to take any steps under clause 18.1 (Mitigation) if, in the opinion of that Finance Party
(acting reasonably), to do so might be prejudicial to it. 

19    Costs and expenses  

	19.1
	Transaction expenses  

The
Borrower shall promptly on demand pay the Agent and the Arranger the amount of all costs and expenses (including legal fees, but excluding any out of pocket expenses incurred by the Agent or the
Arranger until 31 March 2005) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution and syndication of: 

	19.1.1
	this
Agreement and any other documents referred to in this Agreement; and

	19.1.2
	any
other Finance Documents executed after the date of this Agreement. 

41

 
	19.2
	Amendment costs  

If
(a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to clause 31.9 (Change of
currency), the Borrower shall, within five Business Days of demand, reimburse the Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by
the Agent in responding to, evaluating, negotiating or complying with that request or requirement. 

	19.3
	Enforcement costs  

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

42

   SECTION 7

GUARANTEE  

	20
	Guarantee (Selbstschuldnerische Bürgschaft)

 
	20.1
	 Guarantee (Selbstschuldnerische Bürgschaft)  

Each
Guarantor irrevocably and unconditionally jointly and severally: 

	20.1.1
	guarantees
(verbürgt sich im Wege einer selbstschuldnerischen Bürgschaft) to each Finance Party
punctual performance by each other Obligor of all that Obligor's obligations under the Finance Documents;

	20.1.2
	undertakes
with each Finance Party that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall pay that
amount as if it was the principal obligor; and

	20.1.3
	indemnifies
each Finance Party against any cost, loss or liability suffered by that Finance Party if any obligation guaranteed
(verbürgt) 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.

	20.2
	Continuing guarantee  

This
guarantee (Selbstschuldnerische Bürgschaft) 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. 

	20.3
	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: 

	20.3.1
	the
liability of each Obligor shall continue as if the payment, discharge, avoidance or reduction had not occurred; and

	20.3.2
	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.

	20.4
	Waiver of defences

 
	20.4.1
	The obligations of each Guarantor under this clause 20 will not be affected by an act, omission, matter or thing which, but for this
clause 20, would reduce, release or prejudice any of its obligations under this clause 20 (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 ZPR 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; 

43

 

	(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 or replacement of a Finance Document or any other document or security;

	(f)
	any
amendment, replacement or release of security (waiver of rights under Section 776 of the German Civil Code (BGB));

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

	(h)
	any
insolvency or similar proceedings.

	20.4.2
	In
addition, each Guarantor hereby expressly waives:

	(a)
	its
defence pursuant to Section 770(1) German Civil Code (BGB) that any of the Obligors' obligations secured by this guarantee
may be avoided (Einrede der Anfechtung);

	(b)
	its
defence that the respective Finance Party may satisfy or discharge any of the relevant Obligors' obligations secured by this guarantee by the way of set-off (waiver of
the defence under Section 770(2) German Civil Code (BGB)); and

	(c)
	to
the extent possible, its defence pursuant to Section 768(1) German Civil Code (BGB)) that relevant Obligor has a defence
against any of the of the Obligors' obligations secured by this guarantee (Einreden des Hauptschuldners).

 

	20.5
	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 20 (Verzicht auf die Einrede der Vorausklage
(Section 771] German Civil Code (BGB))). This waiver applies irrespective of any provision of a Finance Document to the contrary. 

	20.6
	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: 

	20.6.1
	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

	20.6.2
	hold
in an interest bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this clause 20.

	20.7
	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 directs, no
Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents: 

44

 
	20.7.1
	to
be indemnified by an Obligor;

	20.7.2
	to
claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents; and/or

	20.7.3
	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.

	20.8
	Release of Guarantors' right of contribution  

If
any Guarantor (a "Retiring Guarantor") ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or
other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor: 

	20.8.1
	that
Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any
other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and

	20.8.2
	each
other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents 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 any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such
rights or security are granted by or in relation to the assets of the Retiring Guarantor.

	20.9
	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. 

	20.10
	German Obligors

 
	20.10.1
	To the extent a German Obligor guarantees liabilities other than its own liabilities or liabilities of its Subsidiaries (up-stream or
cross-stream guarantees), the Security Agent agrees to release any amounts resulting from the enforcement of this Guarantee if and only to the extent the relevant German Obligor demonstrates, by
evidence reasonable satisfactory to the Lenders, that the application of the proceeds resulting from the enforcement of this Guarantee would otherwise lead to a reduction of:

	(a)
	its
Net Assets (as defined below) (Reinvermögen) to an amount less than its stated share capital
(Stammkapital); or

	(b)
	if
its net assets have already fallen below the registered share capital, causing such amount to be further reduced.

	20.10.2
	If,
at any time prior to a demand under the security, a German Obligor demonstrates to the satisfaction of the Security Agent that payment in full of an amount due from it under
this Guarantee would lead to one of the effects referred to in clause 20.10.1 above, then the amount due for payment at that time hereunder by that German Obligor will be reduced to the extent
necessary to ensure compliance by that German Obligor with its obligations to preserve its stated share capital. 

45

 
	20.10.3
	If
the Security Agent is not satisfied with the evidence given by a German Obligor pursuant to clause 20.10.1 above and/or clause 20.10.2 above, such German Obligor
may within 15 calendar days (or such longer period as has been agreed between that German Obligor and the Security Agent for such purpose) from the date the Security Agent has given such German
Obligor written notice to this effect (the "Notice"), request a determination by auditors of international standing and reputation of the amount of the
available Net Assets, as defined below (the "Auditor's Determination"). If the Security Agent and that German Obligor do not agree on the appointment of
a joint auditor within 5 Business Days from the date the Security Agent has given the Notice the Security Agent is entitled to appoint auditors of international standing and reputation. The amount
determined as the available Net Assets in the Auditor's Determination shall be (except for manifest error) binding for all Parties. The costs of the Auditor's Determination shall be borne by that
German Obligor.

	20.10.4
	No
release or reduction of any of the proceeds resulting from the enforcement of this Guarantee in accordance with 20.10.1 above or clause 20.10.2 above will prejudice the
rights of the Security Agent to claim (again) under this Guarantee in respect of any of the released or reduced amount.

	20.10.5
	The
calculation of net assets (Reinvermögen) shall include the assets pursuant to Paragraph 266(2)(A)
and (B) of the German Commercial Code (HGB) less liabilities pursuant to Paragraph 266(3)(B) and (C) of the German Commercial Code
(HGB) (the "Net Assets") provided that for the purposes of the calculation of the Net Assets in this
clause 20.10 the following balance sheet items shall be adjusted as follows:

	(a)
	the
amount of any increase of registered share capital after the date hereof that has been effected contrary to the provisions of the Finance Documents shall be deducted from the
registered share capital;

	(b)
	loans
made available to the relevant German Obligor (and/or, as the case may be, its general partner) by any members of the ZPR Group as far as such loans are subordinated or qualify
under Section 32a of the German Limited Liability Companies Act (GmbHG) (or, as the case may be, the respective provision of the German
Commercial Code (HGB)) shall be disregarded;

	(c)
	loans
and other contractual liabilities incurred by the relevant German Obligor (and/or, as the case may be, its general partner) in violation of the provisions of any of the Finance
Documents shall be disregarded; and

	(d)
	any
asset that is shown in the balance sheet with a book value (Buchwert) that is significantly lower than the market value of such
asset and that can be realised, to the extent legally permitted and commercially justifiable with regard to costs and efforts involved, shall be taken into account with its market value.

	20.10.6
	The
limitations set out in this clause 20.10 shall not apply (i) to any proceeds resulting from the enforcement of this Guarantee which relate to any amounts owed
under this Agreement which have been on-lent, or otherwise passed on, to the respective German Obligor or any of its Subsidiaries and which are still outstanding and (ii) if and for
so long as the relevant German Obligor is subject to a domination agreement (Beherrschungsvertrag) as a dominated company
(beherrschte Gesellschaft). 

46

 
SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT  

21    Representations  

	21.1
	 General

 
	21.1.1
	Each Obligor makes the representations and warranties set out in this clause 21 to each Finance Party on the date of this Agreement.

	21.1.2
	Each
Obligor acknowledges that the Finance Parties have entered into this Agreement in reliance on those representations and warranties.

	21.2
	Status

 
	21.2.1
	It and each of its Subsidiaries:

	(a)
	(other
than in respect of any limited partnership) is duly incorporated and validly existing under the laws of the respective jurisdictions of their incorporation as limited liability
companies;

	(b)
	(in
case of any limited partnership only), is duly established and validly existing as a limited partnership under the laws of the Federal Republic of Germany; and

	(c)
	(in
the case of a German Obligor only) the place from which it is administered and where all managerial decisions are taken (tatsächlicher
Verwaltungssitz) is located within the Federal Republic of Germany.

	21.2.2
	It
and each of its Subsidiaries has the power to own its assets.

	21.2.3
	It
and each of its Subsidiaries has all material Authorisations necessary to carry on its business as it is being conducted.

	21.3
	Binding obligations  

The
obligations expressed to be assumed by it in each Finance Document are legal, valid, binding and enforceable obligations subject to and limited by the provisions of any applicable bankruptcy,
insolvency, liquidation, reorganisation, moratorium or other laws of general application from time to time in effect relating to or affecting the creditors' rights and remedies generally. 

	21.4
	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: 

	21.4.1
	any
law or regulation applicable to it;

	21.4.2
	its
or any of its Subsidiaries' constitutional documents; or

	21.4.3
	any
agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries' assets (other than any such agreements, instruments or assets that
form part of or are related to the facilities agreements being paid out and discharged by virtue of the Refinancing); 

where,
in respect of clause 21.4.1 above or clause 21.4.2 above, such non-performance or conflict might reasonably be expected to have a Material Adverse Effect. 

47

 
	21.5
	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 of, the Finance Documents to which it is a party and the
transactions contemplated by those Finance Documents. 

	21.6
	Validity and admissibility in evidence  

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

	21.7
	Governing law and enforcement  

The
choice of German law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation. 

	21.8
	Deduction of Tax  

It
is not required under the law of its jurisdiction of incorporation or establishment, any jurisdiction in which it carries on business or any jurisdiction in which it is tax resident to make any
deduction for or on account of Tax from any payment it may make under any Finance Document. 

	21.9
	No filing or stamp taxes  

Under
the law of its jurisdiction of incorporation or establishment 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. 

	21.10
	No default

 
	21.10.1
	No Event of Default is continuing or might reasonably be expected to result from the making of any Utilisation.

	21.10.2
	No
other event or circumstance is outstanding which constitutes a default (howsoever defined) under any other agreement or instrument which is binding on it or any of its
Subsidiaries or to which its (or any of its Subsidiaries') assets are subject which might have a Material Adverse Effect.

	21.11
	No misleading information

 
	21.11.1
	Any factual information provided by any member of the ZPR Group for the purposes of any Permitted Transaction was true and accurate in all material
respects as at the date it was provided or as at the date (if any) at which it is stated.

	21.11.2
	No
information has been given or withheld that results in the information contained in the Reorganisation Documents or the Restructuring Documents being untrue or misleading in
any material respect.

	21.11.3
	So
far as it is aware after making due and diligent enquiries, all other written information provided by any member of the ZPR Group (including its advisers) to a Finance Party or
the Environmental & Technical Adviser was true, complete and accurate in all material respects as at the date it was provided and, except as may be superseded by subsequent written information
provided to such Finance Party, is not misleading in any material respect. 

48

 
	21.12
	Financial statements

 
	21.12.1
	Its Original Financial Statements were prepared in accordance with GAAP consistently applied.

	21.12.2
	Its
Original Financial Statements fairly and truly represent its financial condition and operations for the period to which they refer.

	21.12.3
	Its
most recent financial statements (delivered in accordance with clause 22.1 (Financial statements) fairly and truly
represent its financial condition and operations during the relevant financial year.

	21.12.4
	There
has been no material adverse change in its business or financial condition (or the business or consolidated financial condition of the ZPR Group, in the case of the Parent)
since the delivery of the latest financial statements in accordance with this Agreement.

	21.13
	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. 

	21.14
	No proceedings pending or threatened  

No
litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect
have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries. 

	21.15
	Insurances  

It
maintains Insurance on and in relation to its business and assets with reputable underwriters or insurance companies against such risks and to such extent as is usual for prudent companies carrying
on a business such as that carried on by it and, so far as it is aware, no event or circumstance has occurred, nor has there been any omission to disclose a fact, which would in either case entitle
any insurer to avoid or otherwise reduce its liability under any policy relating to the Insurances. 

	21.16
	Good title to assets  

It
and each of its Subsidiaries has a good, valid and marketable title to, or valid leases or licences of, the assets necessary to carry on its business in all material respects as presently
conducted. 

	21.17
	Environmental compliance

 
	21.17.1
	It and each of its Subsidiaries has obtained all requisite Environmental Licences required for the carrying on of its business as currently conducted and
has at all times complied with:

	(a)
	all
applicable Environmental Laws;

	(b)
	the
terms and conditions of such Environmental Licences; and

	(c)
	all
other covenants, conditions, restrictions and agreements directly or indirectly concerned with any Environmental Contamination, 

where
failure to do so might reasonably be expected to have a Material Adverse Effect. 

49

 
	21.17.2
	There
are to its knowledge no circumstances which prevent or interfere, or which may reasonably be expected to prevent or interfere, with the compliance in the future of it and
each of its Subsidiaries with all applicable Environmental Laws, the terms of all Environmental Licences referred to in clause 21.17.1 above and all covenants, conditions, restrictions and
agreements referred to in such clause.

	21.18
	Environmental Claims  

No
Environmental Claim which, if determined against it or any of its Subsidiaries, might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief) been
started or threatened against it or any of its Subsidiaries. 

	21.19
	Taxation

 
	21.19.1
	It and each of its Subsidiaries has duly and punctually paid and discharged all Taxes imposed upon it or its assets or, as the case may be, upon such
Subsidiary or the assets of such Subsidiary within the time period allowed without incurring penalties (save to the extent that (i) payment is being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance with GAAP and (ii) payment can be lawfully withheld) and to the extent that any Taxes are not due and payable, the
Borrower has provided adequate reserves for the payment of those Taxes in accordance with GAAP.

	21.19.2
	It
and each of its Subsidiaries is not materially overdue in the filing of any Tax returns.

	21.19.3
	No
claims are being or are reasonably likely to be asserted against it or any of its Subsidiaries with respect to Taxes which might reasonably be expected to have a Material
Adverse Effect.

	21.20
	Indebtedness  

No
Obligor and no other member of the ZPR Group has any Financial Indebtedness other than Permitted Indebtedness. 

	21.21
	No Security  

Save
for any Permitted Encumbrances: 

	21.21.1
	no
Security exists over any of the assets of any Obligor or any other member of the ZPR Group; and

	21.21.2
	no
arrangement or transaction as described in clause 24.14.2 (Negative pledge) has been entered into by any Obligor or any
other member of the ZPR Group and is outstanding.

	21.22
	Permitted Reorganisation

 
	21.22.1
	Subject to the registration of the filing of the mergers of Blitz and LK 82 into D&Z Beteiligung as contemplated by the "Fifth Step" in accordance with the
Reorganisation Letter, the Permitted Reorganisation has been carried out in accordance with (a) all applicable law, (b) the Reorganisation Letter and (c) the other Reorganisation
Documents.

	21.22.2
	All
Reorganisation Documents have been delivered to the Agent.

	21.23
	Consents etc. relating to any Permitted Transaction  

All
material Authorisations which are required to be obtained under any applicable law or regulation for the consummation of each Permitted Transaction (including approval from shareholders, third
parties and all applicable competition and anti-trust regulations authorities) have been obtained and are in full force and effect and all conditions of any such Authorisation have been
complied with or will be complied with in accordance with their terms. 

50

 
	21.24
	ZPR Group structure

 
	21.24.1
	Subject to the registration of the filing of the mergers of Blitz and LK 82 into D&Z Beteiligung as contemplated by the "Fifth Step" in accordance with the
Reorganisation Letter, the table in Part B of Schedule 11 (Structure) correctly reflects the ownership structure of the ZPR Group.

	21.24.2
	No
Change of Control has occurred.

	21.25
	Repetition

 
	21.25.1
	The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on:

	(a)
	the
date of each Compliance Certificate and the date of each Utilisation Request; and

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

	21.25.2
	Each
Repeating Representations to be made after the date of this Agreement shall be made or deemed to be made by reference to the facts and circumstances existing at the date the
Repeating Representations is made.

	22
	Information 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
	Financial statements  

The
Parent and/or the Borrower shall supply to the Agent in sufficient copies for all the Lenders: 

	22.1.1
	as
soon as they become available, but in any event within 90 days of the end of its financial years the Parent's audited consolidated financial statements (including
balance sheet, profit and loss statement, cash flow statement and related auditors' report);

	22.1.2
	as
soon as they become available, but in any event within 90 days of the end of its financial years the pro forma consolidated financial statements for the ZPR Group
(including balance sheet, profit and loss statement and cash flow statement);

	22.1.3
	as
soon as they become available, but in any event within 90 days of the end of its financial years the balance sheet, profit and loss statement, cash flow statement and
related auditors' report for the Borrower (and, on the Agent's request, each Obligor individually) for such financial year, audited by a recognised firm of independent auditors licensed to practise in
the Federal Republic of Germany;

	22.1.4
	as
soon as available, but no later than 45 days after the end of each financial quarter year, the balance sheet, profit and loss statement and cash flow statement for the
Borrower for such period which will be in a form reasonably acceptable to the Lenders;

	22.1.5
	30 days
prior to the beginning of the relevant financial year, the budgeted balance sheet, the budgeted profit and loss statement and the budgeted cash flow statement for
the next following financial year for the Borrower; and 

51

 
	22.1.6
	any
financial statements delivered in accordance with clause 22.1.1 above and clause 22.1.4 above shall be accompanied by the production report for the respective
period, including, inter alia, actual production figures, operating cost figures, sales and sales price figures and the budgeted figures thereof.

	22.2
	Compliance Certificate

 
	22.2.1
	The Borrower shall supply to the Agent, with each set of financial statements delivered pursuant to clause 22.1.1 (Financial
statements) and clause 22.1.4 (Financial statements), a Compliance Certificate setting out (in reasonable detail)
computations as to compliance with clause 23 (Financial covenants) as at the date as at which those financial statements were drawn up.

	22.2.2
	Each
Compliance Certificate shall be signed by two directors of the Borrower.

	22.2.3
	In
case of a dispute between the Agent and the Borrower in respect to the data or computations set out in the Compliance Certificate the Agent may request an independent auditor
to certify such data and calculations.

	22.3
	Requirements as to financial statements

 
	22.3.1
	Each set of financial statements delivered pursuant to clause 22.1 (Financial statements) shall be
certified by a director of the relevant company as fairly representing its financial condition as at the date as at which those financial statements were drawn up.

	22.3.2
	Each
of the Parent and the Borrower will at the request of the Agent require and authorise its auditors to discuss with the Lenders matters reasonably related to or arising out of
the annual audit of the Parent or the Borrower by such auditors.

	22.3.3
	The
Parent shall procure that each set of financial statements delivered pursuant to clause 22.1 (Financial statements) is
prepared using GAAP.

	22.3.4
	The
Parent shall procure that each set of financial statements of an Obligor delivered pursuant to clause 22.1 (Financial
statements) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements
for that Obligor unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in GAAP, the accounting practices, reference periods or its auditors (or, if
appropriate, the auditors of the Obligor) and delivers to the Agent:

	(a)
	a
description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which that Obligor's Original Financial
Statements were prepared; and 

sufficient
information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether clause 23 (Financial
covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and that Obligor's Original Financial
Statements, 

provided
that the Agent shall be entitled, in order for it to fulfil its duties under the Finance Documents (acting reasonably) to consult with the auditors of the relevant Obligor and the Borrower
shall, at its cost, cause the auditors to assist and support the Agent. 

Any
reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial
Statements were prepared. 

52

 
	22.4
	Information: miscellaneous  

Each
of the Parent and the Borrower shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests): 

	22.4.1
	promptly,
the details of any newly created Permitted Encumbrances (save for the creation of any Security in accordance with paragraph (b) of the definition of Permitted
Encumbrances);

	22.4.2
	promptly,
upon the request of the Agent, a certified copy of any agreement between an Obligor and any other Subsidiary of the Ultimate Parent;

	22.4.3
	promptly,
the details of any newly created Permitted Indebtedness;

	22.4.4
	promptly
upon becoming aware of it, the details of any tax field audit (Betriebsprüfung) which is current,
threatened or pending against any member of the ZPR Group;

	22.4.5
	promptly
upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the
ZPR Group, and which might, if adversely determined, have a Material Adverse Effect; and

	22.4.6
	promptly,
the details of any change of its constitutional documents, any Transaction Document or any shareholders' agreement.

	22.5
	Notification of default

 
	22.5.1
	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
that Obligor is aware that a notification has already been provided by another Obligor).

	22.5.2
	Promptly
upon a request by the Agent, the Parent shall supply to the Agent a certificate signed by two of its directors or senior officers 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).

	22.6
	Use of websites

 
	22.6.1
	Each of the Parent and the Borrower may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the
"Website Lenders") who accept this method of communication by posting this information onto an electronic website designated by the Parent and the Agent
(the "Designated Website") if:

	(a)
	the
Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;

	(b)
	both
the Borrower and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and

	(c)
	the
information is in a format previously agreed between the Borrower and the Agent. 

If
any Lender (a "Paper Form Lender") does not agree to the delivery of information electronically then the Agent shall notify the Borrower accordingly
and the Borrower shall supply the information to the Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Parent and the Borrower shall supply the Agent with at
least one copy in paper form of any information required to be provided by them. 

53

 
	22.6.2
	The
Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the
Borrower and the Agent.

	22.6.3
	The
Borrower shall promptly upon becoming aware of its occurrence notify the Agent if:

	(a)
	the
Designated Website cannot be accessed due to technical failure;

	(b)
	the
password specifications for the Designated Website change;

	(c)
	any
new information which is required to be provided under this Agreement is posted onto the Designated Website;

	(d)
	any
existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or

	(e)
	the
Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software. 

If
the Borrower notifies the Agent under clause 22.6.3(a) above or clause 22.6.3(e) above, all information to be provided by the Parent and/or the Borrower under this Agreement after the
date of that notice shall be supplied in paper form. 

	22.6.4
	Any
Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The
Borrower shall comply with any such request within ten Business Days.

	22.7
	"Know your customer" checks

 
	22.7.1
	If:

	(a)
	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;

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

	(c)
	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 clause 22.7.1(c) 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 clause 22.7.1(c) above, on behalf of
any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in clause 22.7.1(c) 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. 

	22.7.2
	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. 

54

 
	22.7.3
	The
Parent shall, by not less than 10 Business Days' prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that
one of the Subsidiaries becomes an Additional Guarantor pursuant to clause 27 (Changes to the Obligors).

	22.7.4
	Following
the giving of any notice pursuant to clause 22.7.1(c) above, if the accession of such Additional Guarantor obliges the Agent or any Lender to comply with "know
your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Parent 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 on behalf of
any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with the results of all necessary "know your customer" or
other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Guarantor.

	22.8
	German Banking Act (Kreditwesengesetz)  

Upon
request of the Agent, the Borrower shall provide the Agent with all such further information about its financial and business affairs, as well as the financial and business affairs of any of its
Subsidiaries, in each case to the extent necessary for any Lender to comply with its duties under section 18 of the German Banking Act
(Kreditwesengesetz). 

	23
	Financial covenants

 
	23.1
	 Financial definitions

 
	23.1.1
	In this clause 23: 

"Calculation Date" means each 31 March, 30 June, 30 September and 31 December in each calendar year commencing with
30 June, 2005; 

"Cash Flow" means, for any period, the sum of total operating cash flows generated by the Borrower (excluding, for the avoidance of doubt, any proceeds
received from the sale or exercise of warrants or any other equity interests) after all operating expenses (including production and capital costs, royalties, general and administration costs, taxes
and exploration and other expenses); 

"Current Assets" means, on any date, the aggregate of the current assets of the Borrower at such date (excluding any amount standing to the credit of
the Shareholder Distribution Account); 

"Current Liabilities" means, on any date, the aggregate of the current liabilities of the Borrower at such date (but excluding any such liabilities
relating to the Obligations); 

"Current Ratio" means, on any date, the ratio, expressed as a percentage, of: 

	(a)
	Current
Assets 

to

	(b)
	Current
Liabilities. 

"EBITDA" means, for any period, the consolidated earnings of the Borrower (together with any distribution by way of dividend or similar return on
capital received by the Borrower from any person which is not a Subsidiary of the Parent), in each case for such period: 

	(a)
	before
any deduction for or on account of corporation tax or other taxes on income or gains; 

55

 

	(b)
	before
any deduction for Interest Expense;

	(c)
	after
deducting (to the extent included) Interest Receivable;

	(d)
	excluding
extraordinary items;

	(e)
	after
deducting (to the extent otherwise included) any gain over book value arising in favour of an Obligor on the disposal of any business or asset (not being any disposals made in
the ordinary course of business) during such period and any gain arising on any revaluation of any business or asset during such period;

	(f)
	after
adding back (to the extent otherwise deducted) any loss against book value incurred by an Obligor on the disposal of any business or asset (not being any disposals made in the
ordinary course of business) during such period and any loss on any revaluation of any business or assets during such period;

	(g)
	after
adding back depreciation of fixed assets and amortisation of goodwill or intangible assets during that period, to the extent deducted. 

"Interest Cover Ratio" means, for any period on any Calculation Date, the ratio, expressed as a percentage, of: 

	(a)
	EBITDA
for such period, 

to 

	(b)
	Interest
Expense for such period; 

"Interest Expense" means, for any period, the amount in EUR which will be necessary in order to pay in full all interest, premium and similar amounts
(howsoever characterised and including (a) the interest element of finance leases, (b) interest on and repayment and prepayment of Subordinated Debt, (c) discount and acceptance
fees payable (or deducted), (d) fees payable in connection with the issue or maintenance of any bond or bank guarantee, guarantee or other insurance against Financial Indebtedness and issued by
a third party on behalf of the Obligors, (e) repayment and prepayment premiums payable or incurred in repaying or prepaying any Financial Indebtedness, and (f) commitment, utilisation
and non-utilisation fees payable or incurred in respect of Financial Indebtedness) accruing in respect of, this agreement and all other Financial Indebtedness of the Obligors which have
become due and payable during such period; 

"Interest Receivable" means, for any period, the amount of interest (which for this purpose shall include all payments of the type described in the
definition of Interest Expense) accrued due to the Obligors during such period whether or not paid; 

"Leverage Ratio" means the ratio of Net Debt to EBITDA; 

"Net Debt" means, on any date, the excess of: 

the sum of:

the
principal amount of Utilisations outstanding on such date; 

the
principal amount of other Financial Indebtedness (except current payables to suppliers) of the Obligors outstanding on such date; 

less

56

 

Unencumbered
Cash at such date. For the avoidance of doubt, Subordinated Debt is not accounted for Net Debt; 

"Obligations" means, with respect to each Obligor, all obligations of such Obligor with respect to the repayment or performance of all obligations
(monetary or otherwise) of such Obligor arising under or in connection with the Finance Documents and each other loan document and where the term "Obligations" is used without reference to a
particular Obligor, such term means the Obligations of all Obligors. 

"Unencumbered Cash" means, at any date, the principal amount of freely available cash balances maintained by the Borrower in bank accounts maintained
with financial institutions located in approved locations on such date (and, for the avoidance of doubt, a cash balance shall not be freely available if it is subject to any lien in favour of any
third party (excluding, however, any such lien arising by way of set-off rights under mandatory principles of applicable law). 

	23.2
	Leverage Ratio  

The
Borrower shall ensure (and the Parent will procure) that the Leverage Ratio in respect of any twelve months period on any Calculation Date shall not exceed 3.00:1. 

	23.3
	Interest Cover Ratio  

The
Borrower shall ensure (and the Parent will procure) that the Interest Cover Ratio in respect of each six months period on any Calculation Date shall equal or exceed 1.40:1. 

	23.4
	Current Ratio  

The
Borrower shall ensure (and the Parent will procure) that the Current Ratio on any Calculation Date shall equal or exceed 110 per cent. 

	23.5
	Calculations  

All
calculations made for the purposes of the covenants set out in clause 23.2 (Leverage ratio) and clause 23.4
(Current Ratio) shall be made for the Borrower. 

	24
	General undertakings  

The
undertakings in this clause 24 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. 

	24.1
	Authorisations  

Each
Obligor shall (and the Parent shall ensure that each other member of the ZPR Group will) promptly: 

	24.1.1
	obtain,
comply with and do all that is necessary to maintain in full force and effect; and

	24.1.2
	supply
certified copies to the Agent of, 

any
Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity,
enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document. 

57

 
	24.2
	Compliance with laws  

Each
Obligor shall (and the Parent shall ensure that each other member of the ZPR Group will) comply in all respects with all laws to which it may be subject, if failure so to comply would materially
impair its ability to perform its obligations under the Finance Documents. 

	24.3
	Insurance

 
	24.3.1
	The Borrower shall (and the Parent shall ensure that each other member of the ZPR Group will) at all times effect and maintain insurance on and in relation
to its business and assets with reputable underwriters or insurance companies against such risks and to such extent as is usual for prudent companies carrying on a business such as that carried on by
it or such other member of the ZPR Group.

	24.3.2
	The
Borrower shall (and the Parent shall ensure that each other member of the ZPR Group will) pay all premiums and do all other things necessary to keep on foot the insurances
required to be effected and maintained by it pursuant to clause 24.3.1 above.

	24.4
	Transactions with third parties  

Each
Obligor shall (and the Parent shall ensure that each other member of the ZPR Group will) conclude any transaction with a third party, irrespective of whether or not it is a Subsidiary of the
Ultimate Parent, only on terms no less beneficial to it than those obtainable on an arm's length basis. It will further waive any Financial Indebtedness owed by any person to it only for valuable
market consideration. 

	24.5
	Syndication  

The
Borrower shall provide at its own cost assistance to the Original Lender in the syndication of the Facility, including by taking all reasonable steps to make management available for the purpose
of making presentations to, or meeting, potential lending institutions and comply with all reasonable requests for information from potential syndicate members. 

	24.6
	Information Memorandum  

Each
of the Parent and the Borrower shall use reasonable best endeavours to assist the Arranger in the preparation of the Information Memorandum and ensure that, save as otherwise disclosed in the
Information Memorandum, the factual information contained in the Information Memorandum is true and accurate and complete in all material respects on the date thereof (or, if different, as of the date
when it is stated) and that the Borrower and the Obligors do not omit to make any disclosure which would make the Information Memorandum misleading in any material respect, and in the case of any
financial projections or expressions of opinion contained in the Information Memorandum, procure that such projections and expressions are prepared or made in good faith and on the basis of
assumptions believed by the Parent or any of its Subsidiaries to be reasonable and ensure that, if in the opinion of the Arranger it is necessary for the purpose of syndication, the Information
Memorandum is updated immediately prior to syndication. 

	24.7
	Pari passu ranking  

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

	24.8
	Environmental compliance

 
	24.8.1
	Each Obligor shall (and the Parent shall ensure that each other member of the ZPR Group will) obtain and maintain all requisite Environmental Licences and
comply with: 

58

 

	(a)
	all
applicable Environmental Laws;

	(b)
	the
terms and conditions of all Environmental Licences applicable to it; and

	(c)
	all
other covenants, conditions, restrictions and agreements directly or indirectly concerned with any Environmental Contamination, 

and
take all reasonable steps in anticipation of known or expected future changes to or obligations under the same, in each case where failure to do so might reasonably be expected to have a Material
Adverse Effect. 

	24.8.2
	Each
Obligor shall (and the Parent shall ensure that each other member of the ZPR Group will) take all action necessary to prevent the sites from being affected by Environmental
Contaminations. In particularly, the Obligor shall (and the Parent shall ensure that each other member of the ZPR Group will) carry out investigation measures for purposes of risk assessment,
clean-up measures, protective containment measures or measures to eliminate, reduce or otherwise remedy an immediate danger to life or health, provided, however, that such measures
(i) have to be performed pursuant to a final or immediate ordinance by any authorities, court judgment, or an agreement with an authority relating to clean-up measures or
(ii) are necessary to eliminate, reduce or otherwise remedy an immediate danger to life or health.

	24.9
	Environmental Claims  

The
Borrower shall inform the Agent in writing as soon as reasonably practicable upon its becoming aware of: 

	24.9.1
	any
Environmental Claim which has been commenced or threatened against any member of the ZPR Group; or

	24.9.2
	any
facts or circumstances which will or are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the ZPR Group, 

where
the claim might, if determined against that member of the ZPR Group, reasonably be expected to have a Material Adverse Effect. 

	24.10
	Taxation

 
	24.10.1
	Each Obligor shall (and the Parent shall ensure that each other member of the ZPR Group will) duly and punctually pay and discharge all Taxes imposed upon
it or its assets within the time period allowed without incurring penalties (save to the extent that (i) payment is being contested in good faith, (ii) adequate reserves are being
maintained for those Taxes and (iii) payment can be lawfully withheld).

	24.10.2
	No
Obligor shall (and the Parent shall ensure that no other member of the ZPR Group will) be materially overdue in the filing of any Tax returns.

	24.10.3
	Each
Obligor shall (and the Parent shall ensure that each other member of the ZPR Group will) do all such things as are necessary to ensure that no claims are or are reasonably
likely to be asserted against any member of the ZPR Group with respect to Taxes which might reasonably be expected to have a Material Adverse Effect.

	24.11
	Permitted Reorganisation  

Each
of the Parent and the Borrower will procure that all acts and things (including the execution of powers of attorney, assignments or other instruments) as are reasonably required to give effect to
the purposes of Permitted Reorganisation are, or will promptly be, done (and do nothing to jeopardise the same). 

59

 
	24.12
	Refinancing  

Each
of the Parent and the Borrower will procure that all acts and things (including the execution of powers of attorney, assignments or other instruments, but excluding the injection of funds from
the Ultimate Parent) as are reasonably required to give effect to the purposes of Refinancing are, or will promptly be, done (and do nothing to jeopardise the same). 

	24.13
	Capitalisation  

Each
Obligor shall (and the Parent shall ensure that each other member of the ZPR Group will) ensure that, at all times after the date of this Agreement or, if later, the date it becomes a Party, it
and each of its Subsidiaries have sufficient equity to be and remain in compliance with all thin capitalisation rules applicable to it and them. 

	24.14
	Negative pledge

 
	24.14.1
	No Obligor shall (and the Parent shall ensure that no other member of the ZPR Group will) create or permit to subsist any Security over all or any of its
assets or create any restriction or prohibition on encumbrances over all or any of its assets.

	24.14.2
	No
Obligor shall (and the Parent shall ensure that no other member of the ZPR Group will):

	(a)
	sell,
transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the ZPR Group;

	(b)
	sell,
transfer or otherwise dispose of any of its receivables on recourse terms;

	(c)
	enter
into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

	(d)
	enter
into any other preferential arrangement having a similar effect, 

in
circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset. 

	24.14.3
	Clause 24.14.1
above and clause 24.14.2 above do not apply to any Permitted Encumbrances.

	24.15
	Disposals

 
	24.15.1
	Except as permitted under clause 24.15.2, no Obligor shall (and the Parent shall ensure that no other member of the ZPR Group will), enter into a
single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset, including any material
investment (Beteiligungen) or divisions (Betriebsteile).

	24.15.2
	Clause 24.15.1
above does not apply to any sale, lease, transfer or other disposal:

	(a)
	made
in the ordinary course of business of the disposing entity;

	(b)
	of
assets in exchange for other assets comparable or superior as to type, value and quality;

	(c)
	of
assets that are worn out, obsolete or redundant; 

60

 

	(d)
	which
is a Permitted Transaction;

	(e)
	which
is the ZPR Merger, effected and implemented in accordance with clause 24.19 (ZPR Merger);

	(f)
	to
which the Majority Lenders have given their prior written consent; or

	(g)
	where
the higher of the market value or consideration receivable (when aggregated with the higher of the market value or consideration receivable for any other sale, lease, transfer
or other disposal, other than any permitted under clause 24.15.2(a), clause 24.15.2(b) and clause 24.15.2(c) above) does not exceed EUR 1,000,000 (or its equivalent in another
currency or currencies) in any financial year.

 

	24.16
	Financial Indebtedness  

No
Obligor shall incur, create or permit to subsist or have outstanding any Financial Indebtedness or enter into any agreement or arrangement whereby it is entitled to incur, create or permit to
subsist any Financial Indebtedness other than, in each case, Permitted Indebtedness. 

	24.17
	Treasury Transactions

 
	24.17.1
	No Obligor shall (and the Parent will procure that no members of the ZPR Group will) enter into any Treasury Transaction, other than the hedging
transactions contemplated by the Hedging Strategy and documented by the Hedging Agreements.

	24.17.2
	The
Borrower shall ensure that all hedging arrangements contemplated by the Hedging Strategy are implemented in accordance with the terms of the Hedging Strategy and that such
arrangements are not terminated, varied or cancelled without the prior consent of the Agent (acting on the instructions of the Majority Lenders), save (in the case of arrangements documented by the
Hedging Agreements) as permitted by the Security Pooling Agreement.

	24.18
	Merger; agreement on profit  

No
Obligor shall (and the Parent shall ensure that no other member of the ZPR Group will) enter into: 

	24.18.1
	any
amalgamation, demerger, merger, consolidation or corporate reconstruction or any transaction with the commercial effect of the foreging; or

	24.18.2
	any
profit and loss transfer agreement (Ergebnisabführungsvertrag), any partnership agreements
(stille Beteiligungen), any other intercompany agreement (Unternehmensvertrag) or any similar
arrangement having as a consequence that a third party shares in the profits of any member of the ZPR Group or exercises control over any member of the ZPR Group, 

in
each case other than: 

	(a)
	a
Permitted Transaction;

	(b)
	the
ZPR Merger, effected in accordance with clause 24.19 (ZPR Merger); or

	(c)
	with
the prior written consent of the Majority Lenders. 

61

 

	24.19
	ZPR Merger

 
	24.19.1
	The Parent will procure that, no less than 20 Business Days prior to the contemplated implementation of the ZPR Merger it shall:

	(a)
	first
obtain the written approval of the Agent (acting on instructions of the Majority Lenders) of the terms of the transaction comprising the same having provided the Agent with such
evidence that the Agent deems relevant and appropriate (including due diligence reports and legal and tax opinions) in each case satisfactory in form and substance to the Agent and, if applicable,
addressed to and/or capable of being relied upon by, it and the other Finance Parties; and

	(b)
	in
any event that the relevant transactions occur in accordance with (x) all applicable law and (y) the ZPR Merger Documents.

	24.19.2
	ZPRG
will do all acts and things requested by the Agent in order to ensure that the Transaction Security granted by ZPRG, ZPR Beteligung and ZPR KG in any Finance Document
survive, and are not adversely affected by, the ZPR Merger including, if requested by the Agent, procuring that ZPRG and the Parent enter into such further Finance Documents as the Agent shall require
for such purposes. Further, ZPRG will, upon the Agent's request, procure the prompt delivery to the Agent of a legal opinion in respect of all such Finance Documents (including as to the continued
enforceability of the surviving Transaction Security) and the legality, validity and effectiveness of the ZPR Merger, confirming that the ZPR Merger has been effected in accordance with all applicable
law.

	24.19.3
	The
Parent will deliver to the Agent on the date of execution thereof execution copies of all ZPR Merger Documents having previously given the Agent an opportunity to comment on
drafts of such documents.

	24.19.4
	The
Parent will procure that no member of the ZPR Group party to ZPR Merger Documents will (i) waive (in whole or in part) any condition precedent under the such documents
or (ii) determine or declare or accept that any such condition precedent is satisfied where it is not actually satisfied or (iii) declare any such agreement is unconditional if any such
condition precedent is not fulfilled.

	24.20
	Major investment  

No
Obligor shall (and the Parent will procure that no members of the ZPR Group will) without the prior written consent of the Agent acquire any assets (separately or in a series of related
acquisitions): 

	24.20.1
	the
aggregate value of which exceeds EUR 10,000,000; and

	24.20.2
	that
the funding of which is fully or partially provided for by the proceeds of a Loan.

	24.21
	Joint Ventures

 
	24.21.1
	Except as permitted under clause 24.21.2 below, no Obligor shall (and the Parent shall ensure that no member of the ZPR Group will):

	(a)
	enter
into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or

	(b)
	transfer
any assets or lend to or guarantee or give an indemnity for or give Security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to
any Joint Venture (or agree to do any of the foregoing). 

62

  

	24.21.2
	Clause 24.21.1
above does not apply to any acquisition (or agreement to acquire) any interest in a Joint Venture or transfer of assets (or agreement to transfer assets) to
a Joint Venture or loan made to or guarantee given in respect of the obligations of a Joint Venture if such transaction is a Permitted Transaction.

	24.22
	Change of business

 
	24.22.1
	No Obligor shall (and the Parent shall ensure that no other member of the ZPR Group will) make any substantial change to the general nature of its business
from that carried on at the date of this Agreement.

	24.22.2
	The
Parent shall procure that no substantial change is made to the general nature of the business of the ZPR Group from that carried on at the date of this Agreement.

	24.23
	Share capital  

No
Obligor shall (and the Parent shall ensure that no other member of the ZPR Group will) without the prior consent of the Majority Lenders: 

	24.23.1
	redeem,
purchase, return or make any repayment in respect of any of its share capital or make any capital distribution or enter into any agreement to do so; or

	24.23.2
	issue
any shares or grant any person any right (whether conditional or unconditional) to call for the issue or allotment of any shares in the capital of such Obligor (including an
option or a right of pre-emption or conversion) or enter into any agreement to do any of the foregoing, 

in
each case, other than in accordance with the terms hereof and the terms of the Shareholders' Undertaking Agreement. 

	24.24
	Dividends and withdrawals  

No
Obligor shall pay dividends and any other returns to any of its investors (including in relation to any debt instruments) other than in accordance with the terms hereof and the terms of the
Shareholders' Undertaking Agreement. 

	24.25
	Subordinated Liabilities  

No
Obligor shall (and the Parent shall procure that no other member of the ZPR Group will): 

	24.25.1
	pay
interest on any Subordinated Liabilities; and/or

	24.25.2
	prepay,
repay, redeem, purchase or otherwise acquire any Subordinated Liabilities prior to the Termination Date; 

in
each case, other than in accordance with the terms hereof and the terms of the Shareholders' Undertaking Agreement. 

	24.26
	No other obligations  

No
Obligor shall (and the Parent shall procure that no other member of the ZPR Group will), without the prior consent of the Majority Lenders, incur any material obligations that are not contemplated
by or permissible under any Finance Document or which the relevant member of the ZPR Group does not assume in the ordinary course of business. 

63

 
	24.27
	Conditions precedent to other documentation  

The
Parent will procure that no member of the ZPR Group party to such documents will (i) waive (in whole or in part) any condition precedent under the Shareholder Loan Agreements, the Fiscal
Unity Documents or the Reorganisation Documents or (ii) determine or declare or accept that any such condition precedent is satisfied where it is not actually satisfied or (iii) declare
any such agreement is unconditional if any such condition precedent is not fulfilled. 

	24.28
	Limitations of undertakings  

Notwithstanding
the foregoing provisions of this clause 24 (General undertakings) (but without prejudice to any of the obligations thereunder of
any Obligor not incorporated in Germany), the undertakings set out in clause 24.15 (Disposals), clause 24.18
(Merger; agreement on profit), clause 24.21 (Joint Ventures), clause 24.22
(Change of business), clause 24.23 (Share capital), clause 24.24
(Dividends and withdrawals) and clause 24.25 (Subordinated Debt) (the
"Relevant Undertakings") are not and shall not be given by any German Obligor. However: 

	24.28.1
	each
German Obligor shall give to the Agent not less than twenty (20) Business Days' prior written notice if it or any of its Subsidiaries proposes to take or permit any
action or circumstance which, if all the Relevant Undertakings had been given by that German Obligor on the date of this Agreement and had thereafter remained in force, would constitute a breach of
any of the Relevant Undertakings;

	24.28.2
	the
Agent shall be entitled, within ten (10) Business Days of receipt of notice under clause 24.28.1 above, to request that the relevant German Obligor
supplies to the Agent, in sufficient copies for the Lenders, such further relevant information as the Agent (acting reasonably) may consider necessary for the purposes of this clause 24.28
and such German Obligor shall supply such further information promptly and in any event within ten (10) Business Days of the request therefor, subject to any relevant confidentiality
obligations (provided that the relevant Obligor has used all reasonable endeavours to procure a release from any such confidentiality obligations);

	24.28.3
	if
any Lender considers that the relevant action or circumstance (taken alone or together with other actions or circumstances, whether or not permitted hereunder) may have a
Material Adverse Effect or materially and adversely affects its interests as a Lender under the Finance Documents, it may so notify the Agent in writing;

	24.28.4
	if,
by not later than the date ten (10) Business Days after receipt by the Agent of notice pursuant to clause 24.28.1 above (or, if later and additional information
has been requested pursuant to clause 24.28.2 above, by not later than the date ten (10) Business Days after receipt by the Agent of such additional information if received within the
prescribed time or the date ten (10) Business Days after the request therefor if not), the Agent has received notices pursuant to clause 24.28.3 above from Lenders which constitute the
Majority Lenders, the Agent shall promptly notify the Borrower and the Lenders; and

	24.28.5
	if
the Agent gives notice to the Borrower pursuant to clause 24.28.4 above or the relevant action is undertaken or circumstance is permitted before the date two
(2) Business Days after the latest time for the receipt by the Agent of notices pursuant to clause 24.28.4 above, the undertaking of the relevant action or permitting of the relevant
circumstances shall immediately constitute an Event of Default provided that, for the avoidance of doubt, no failure of any German Obligor to perform or
comply with an obligation under a Relevant Undertaking shall of itself constitute an Event of Default.

	25
	Events of Default  

Each
of the events or circumstances set out in clause 25 is an Event of Default. 

64

 
	25.1
	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: 

	25.1.1
	its
failure to pay is caused by administrative or technical error; and

	25.1.2
	payment
is made within 10 Business Days of its due date.

	25.2
	Financial covenants  

Any
requirement of clause 23 (Financial covenants) is not satisfied. 

	25.3
	Other obligations

 
	25.3.1
	An Obligor does not comply with any provision of the Finance Documents (other than those referred to in clause 25.1
(Non-payment) and clause 25.2 (Financial covenants)).

	25.3.2
	A
German Obligor does not comply with a Relevant Undertaking after the Agent has confirmed, within the periods set out in clause 24.28 (Limitation
of undertakings), that it considers the relevant action or step to have material adverse consequences for the Lenders' risk or security position.

	25.3.3
	An
Obligor does not comply with any provision of any Security Document.

	25.3.4
	No
Event of Default under clause 25.3.1 above and clause 25.3.3 above will occur if:

	(a)
	the
Agent considers that the relevant non-compliance is capable of remedy; and

	(b)
	the
relevant non-compliance is remedied within 20 Business Days of the earlier of (i) the Agent giving notice to the Borrower and (ii) the date on which the
Borrower became aware or ought reasonably to have become aware of such non-compliance.

 

	25.4
	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 or misleading in any material respect when made or deemed to be made. 

	25.5
	Cross default

 
	25.5.1
	Any Financial Indebtedness of any Obligor is not paid when due nor within any originally applicable grace period.

	25.5.2
	Any
Financial Indebtedness of any Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however
described).

	25.5.3
	Any
commitment for any Financial Indebtedness of any Obligor is cancelled or suspended by a creditor of any Obligor as a result of an event of default (however described).

	25.5.4
	Any
creditor of any Obligor becomes entitled to declare any Financial Indebtedness of any Obligor due and payable prior to its specified maturity as a result of an event of
default (however described).

	25.5.5
	No
Event of Default will occur under this clause 25.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within
clause 25.5.1 above to clause 25.5.4 above is less than EUR 1,000,000 (or its equivalent in any other currency or currencies) at any one time. 

65

 
	25.6
	Insolvency  

If:

	25.6.1
	any
German Obligor or other member of the ZPR Group that is incorporated or established or has a place of business in the Federal Republic of Germany:

	(a)
	is
unable to pay its debts as they fall due (Zahlungsunfähigkeit);

	(b)
	commences
negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness or, for any of the reasons set out in
sections 17 to 19 of the German Insolvency Act (InsO);

	(c)
	files
for insolvency (Antrag auf Eröffnung eines Insolvenzverfahrens) or the board of directors or management of any
such German Obligor or member of the ZPR Group is required by law to file for insolvency; or

	(d)
	the
competent court takes any of the actions set out in section 21 of the German Insolvency Act (InsO) or the competent court
institutes insolvency proceedings against any such German Obligor or member of the ZPR Group (Eröffnung des Insolvenzverfahrens); or

	25.6.2
	any
non-German Obligor or other member of the ZPR Group:

	(a)
	is
declared bankrupt or enters into a preliminary or definitive moratorium pursuant to the applicable bankruptcy laws;

	(b)
	becomes,
or admits to being, unable generally to pay its debts as they fall due; or

	(c)
	otherwise
becomes insolvent or stops or suspends making payments (whether of principal or interest) with respect to all or any class of its debts or announces an intention to do so or
a moratorium is declared in respect of any of its Indebtedness.

 

	25.7
	Insolvency and similar proceedings  

Any
corporate action, legal proceedings or other procedure or step is taken in relation to: 

	25.7.1
	the
suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of
arrangement or otherwise) of any member of the ZPR Group other than (i) a solvent liquidation or reorganisation of any member of the ZPR Group which is not an Obligor (ii) in the case of
such action by a creditor, the Parent or the Borrower can demonstrate, by providing opinion of a reputable lawyer to that effect, to the reasonable satisfaction of the Agent, such action is frivolous,
vexatious or an abuse of the process of the court or relates to a claim for which a good defence exists which is being vigorously defended or (iii) any step or procedure contemplated by the
Permitted Reorganisation;

	25.7.2
	a
composition, assignment or arrangement with any creditor of any member of the ZPR Group;

	25.7.3
	the
appointment of a liquidator (other than in respect of a solvent liquidation of a member of the ZPR Group which is not an Obligor), receiver, administrator, administrative
receiver, compulsory manager or other similar officer in respect of any member of the ZPR Group or any of its assets (including the directors of any member of the ZPR Group requesting a person to
appoint any such officer in relation to it or any of its assets); or 

66

 
	25.7.4
	enforcement
of any Security over any assets of any member of the ZPR Group, 

or
any analogous procedure or step is taken in any jurisdiction. 

	25.8
	Execution or distress  

Any
execution (Zwangsvollstreckung) or distress (Beschlagnahme) (or any event which under the laws under
of any other jurisdiction that has a similar effect) is levied against, or an encumbrancer takes possession of the whole, or any material part, of the assets of any Obligor is not discharged within
30 days. 

	25.9
	Shareholders' Undertaking Agreement

 
	25.9.1
	The Ultimate Parent fails to comply with the provisions of, or does not perform its obligations under, the Shareholders' Undertaking Agreement.

	25.9.2
	A
representation or warranty given by the Ultimate Parent in the Shareholders' Undertaking Agreement is incorrect in any material respect and, if the non-compliance or
circumstances giving rise to such misrepresentation are capable of remedy, it is not remedied within 30 days of the earlier of the Agent giving notice to the Ultimate Parent or the Ultimate
Parent becoming aware of the non-compliance or misrepresentation.

	25.10
	Cessation of business  

Any
member of the ZPR Group or the Ultimate Parent suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business except as a result of a disposal
which is a Permitted Transaction. 

	25.11
	Audit qualification

 
	25.11.1
	The Borrower's auditors qualify the Borrower's audited annual financial statements.

	25.11.2
	The
auditors of the ZPR Group qualify the audited annual consolidated financial statements of the Parent.

	25.12
	Expropriation  

The
authority or ability of any member of the ZPR Group to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention,
restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any member of the ZPR Group or any of its material assets. 

	25.13
	Repudiation and rescission of agreements

 
	25.13.1
	An Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or any of the
Transaction Security or evidences an intention to rescind or repudiate a Finance Document or any Transaction Security.

	25.13.2
	Any
party to the Transaction Documents (other than a Finance Party) rescinds or purports to rescind or repudiates or purports to repudiate any of those agreements or instruments
in whole or in part where to do so has or is, in the reasonable opinion of the Majority Lenders, likely to have a Material Adverse Effect. 

67

 
	25.14
	Litigation  

Any
litigation, alternative dispute resolution, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the
Transaction Documents or the transactions contemplated in the Transaction Documents or against any member of the ZPR Group or its assets which has or is reasonably likely to have a Material Adverse
Effect. 

	25.15
	Ownership of the Obligors

 
	25.15.1
	An Obligor (other than the Parent) is not or ceases to be a Subsidiary of the Parent.

	25.15.2
	A
Change of Control occurs.

	25.16
	Unlawfulness  

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

	25.17
	Environmental matters

 
	25.17.1
	Any Environmental Contamination is discovered on any site owned, leased, occupied or used by any member of the ZPR Group which might reasonably be expected
to have a Material Adverse Effect.

	25.17.2
	Any
member of the ZPR Group fails to comply with any Environmental Law or any Environmental Licence or an Environmental Claim is made against any member of the ZPR Group and as a
result a Material Adverse Effect occurs or is reasonably likely to occur.

	25.17.3
	As
a result of any Environmental Law any of the claims and rights of any Finance Party in respect of any Finance Document becomes subordinated to an extent considered material by
the Majority Lenders to an Environmental Claim.

	25.17.4
	Any
Finance Party becomes subject to any actual or potential liability or obligation in relation to any site owned, occupied or used by any member of the ZPR Group.

	25.18
	Material adverse change  

Any
situation or event occurs or series of events occur (including a change to any regulation) which, in the reasonable opinion of the Majority Lenders, has materially impaired or which would
reasonably likely be expected to materially impair (as compared with the situation which would have prevailed but for such event, occurrence or condition): 

	25.18.1
	the
business, operation, property and financial condition of the Borrower and/or the other Obligors and as a result, the ability of the Borrower to perform any of its obligations
under the Finance Documents; or

	25.18.2
	the
validity or enforceability of the Finance Documents.

	25.19
	Acceleration  

At
any time after the occurrence of (i) an Event of Default set out in clause 25.1 (Non-payment), clause 25.2
(Financial covenants), clause 25.6 (Insolvency), clause 25.7
(Insolvency proceedings), clause 25.8 (Execution or distress) in relation to the Borrower and
clause 25.16 (Unlawfulness) or (ii) any other Event of Default and at any time thereafter while such Event of Default is continuing and
either the Agent, or as the case may be, the Majority Lenders has or have determined in its or their reasonable opinion taking into account the enforcement value of any guarantee and Security, that
due to said Event of Default the ability of any Obligor to perform any of its obligations under the Finance Documents has been materially impaired and/or the Agent or the Majority Lenders have given
consideration to the reasonable concerns of the relevant Obligor and to avoid such notice, the Agent may, and will if so directed by the Majority Lenders, by written notice to the Borrower do all or
any of the following in addition and without prejudice to any other rights or remedies which it or any other Finance Party may have under this Agreement or any of the other Finance Documents: 

68

 
	25.19.1
	cancel
the Total Commitments whereupon they shall immediately be cancelled;

	25.19.2
	declare
that all or part of the Utilisations, 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;

	25.19.3
	declare
that all or part of the Utilisations be payable on demand, whereupon they shall immediately become payable on demand by the Agent on the instructions of the Majority
Lenders;

	25.19.4
	require
the Borrower to:

	(a)
	procure
that the liabilities of each of the Lenders and the Issuing Bank under or in connection with each Bank Guarantee are promptly reduced to zero; or

	(b)
	provide
Cash Collateral for each Bank Guarantee in an amount specified by the Agent and in the currency of that Bank Guarantee, 

whereupon
the Borrower will do so; and/or 

	(c)
	exercise
all or any of its rights, remedies, powers or discretions under any of the Finance Documents.

 

	25.20
	Demand basis  

If
all or part of the Loans and/or the Bank Guarantees have become due and payable on demand pursuant to clause 25.19 (Acceleration), the Agent,
if so instructed by the Majority Lenders, shall by notice to the Borrower call for repayment and discharge of all or such part of the Loans and/or the Bank Guarantees on such date as may be specified
in such notice whereupon all or such part of the Loans and/or the Bank Guarantees shall become due and payable and/or, as appropriate, due for discharge on the date so specified together with all
interest, ancillary and other fees and commitment commission accrued and all other sums payable under the Finance Documents. 

69

 
SECTION 9

CHANGES TO PARTIES  

26    Changes to the Lenders  

	26.1
	 Assignments and transfers by the Lenders

 
	26.1.1
	Subject to this clause 26, a Lender (the "Existing Lender") may transfer any of its rights and
obligations by way of assignment and assumption (Vertragsübernahme) under any Finance Document to another bank or financial institution
or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the
"New Lender").

	26.1.2
	Subject
to clause 26.2 (Conditions of assignment and transfer), each Party hereby give their consent in advance to any
assignment and transfer as referred to in clause 26.1.1 above. Receipt of an Assignment and Assumption Certificate by the Agent shall constitute notice of the assignment and transfer and each
Party irrevocably authorises (bevollmächtigt) and instructs the Agent to receive each such notice on its behalf and irrevocably agrees
that each such notice to be given to such party may be given to the Agent of such party.

	26.1.3
	For
the purposes of this clause 26.1 each Finance Party, which is incorporated or established under the laws of the Federal Republic of Germany, and each German Obligor
hereby releases the Agent from the restrictions of section 181 of the German Civil Code (BGB).

	26.2
	Conditions of assignment or assumption

 
	26.2.1
	The consultation with the Borrower is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is to another Lender
or an Affiliate of a Lender.

	26.2.2
	The
consent of the Issuing Bank (which shall not be unreasonably withheld) is required for any assignment or transfer by an Existing Lender.

	26.2.3
	An
assignment will only be effective on:

	(a)
	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 Existing Lender; and

	(b)
	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.

	26.2.4
	A
transfer will only be effective if the procedure set out in clause 26.5 (Procedure for transfer) is complied with.

	26.2.5
	If:

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

	(b)
	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 15 (Tax gross-up and indemnities) or clause 16 (Increased
costs), 

70

 

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. 

	26.3
	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 EUR 2,000. 

	26.4
	Limitation of responsibility of Existing Lenders

 
	26.4.1
	Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

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

	(b)
	the
financial condition of any Obligor;

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

	(d)
	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. 

	26.4.2
	Each
New Lender confirms to the Existing Lender and the other Finance Parties that it:

	(a)
	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

	(b)
	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.

	26.4.3
	Nothing
in any Finance Document obliges an Existing Lender to:

	(a)
	accept
a re-transfer from a New Lender of any of the rights and obligations assigned or transferred under this clause 26; or

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

 

	26.5
	Procedure for transfer

 
	26.5.1
	Subject to the conditions set out in clause 26.2 (Conditions of assignment or transfer) a transfer
is effected in accordance with clause 26.5.3 below when the Agent executes an otherwise duly completed Assignment and Assumption Certificate delivered to it by the Existing Lender and the
New Lender. The Agent shall, subject to clause 26.5.2 below, as soon as reasonably practicable after receipt by it of a duly completed Assignment and Assumption 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 Assignment and Assumption Certificate. 

71

 
	26.5.2
	Each
Party (other than the Existing Lender and the New Lender) irrevocably authorises (bevollmächtigt) the
Agent to execute and thereby ratify on its behalf any duly completed Assignment and Assumption Certificate.

	26.5.3
	The
Agent shall only be obliged to execute an Assignment and Assumption 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.

	26.5.4
	On
the Transfer Date:

	(a)
	to
the extent that in the Assignment and Assumption 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 under the Finance Documents shall be
cancelled (being the "Discharged Rights and Obligations");

	(b)
	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;

	(c)
	the
Agent, the Arranger, the New Lender and 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 Arranger and the
Existing Lender shall each be released from further obligations to each other under the Finance Documents; and

	(d)
	the
New Lender shall become a Party as a "Lender".

	26.5.5
	For
the purposes of this clause 26.5 each Party which is incorporated or established under the laws of the Federal Republic of Germany hereby releases the Agent from the
restrictions of section 181 of the German Civil Code (BGB).

	26.6
	Copy of Assignment and Assumption Certificate to the Borrower  

The
Agent shall, as soon as reasonably practicable after it has executed an Assignment and Assumption Certificate, send to the Borrower a copy of that Assignment and Assumption Certificate. 

	26.7
	Disclosure of information  

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

	26.7.1
	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;

	26.7.2
	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

	26.7.3
	to
whom, and to the extent that, information is required to be disclosed by any applicable law or regulation, 

72

 

any
information about any Obligor, the ZPR Group and the Transaction Documents as that Lender shall consider appropriate. 

	27
	Changes to the Obligors

 
	27.1
	 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. 

	27.2
	Additional Guarantors

 
	27.2.1
	Subject to compliance with the provisions of clause 22.7.3 ("Know your customer" checks) and
clause 22.7.4 ("Know your customer" checks), the Parent may request that any of its Subsidiaries become an Additional Guarantor. That Subsidiary
shall become an Additional Guarantor if:

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

	(b)
	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.

	27.2.2
	The
Agent shall notify the Parent, the Lenders and the Issuing Bank 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).

	27.3
	Repetition of representations  

Delivery
of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations 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. 

	27.4
	Resignation of a Guarantor

 
	27.4.1
	The Parent may request that a Guarantor (other than the Parent, the Original Borrower and ZPRG) ceases to be a Guarantor by delivering to the Agent a
Resignation Letter.

	27.4.2
	The
Agent shall accept a Resignation Letter and notify the Parent, the Lenders and the Issuing Bank of its acceptance if:

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

	(b)
	all
the Lenders and the Issuing Bank have consented to the Parent's request. 

73

 

SECTION 10

THE FINANCE PARTIES  

28    Role of the Agent, the Arranger, the Issuing Bank and others  

	28.1
	 Appointment of the Agent

 
	28.1.1
	Each of the Arranger, the Lenders and the Issuing Bank appoints the Agent to act as its agent under and in connection with the Finance Documents.

	28.1.2
	Each
of the Arranger, the Lenders and the Issuing Bank 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.

	28.1.3
	The
Agent shall be released from the restrictions of section 181 of the German Civil Code (BGB) and may grant substitute
powers of attorney and release any sub-agent from such restrictions and revoke such substitute powers of attorney. Upon request by the Agent, each Finance Party shall grant a special power
of attorney to the Agent to enter into any Finance Document on its behalf.

	28.2
	Duties of the Agent

 
	28.2.1
	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.

	28.2.2
	Except
where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to
another Party.

	28.2.3
	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
other Finance Parties.

	28.2.4
	If
the Agent is aware of the non payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, the Arranger or the Security
Agent) under this Agreement it shall promptly notify the other Finance Parties.

	28.2.5
	The
Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

	28.3
	Role of the Arranger  

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

	28.4
	No fiduciary duties

 
	28.4.1
	Nothing in this Agreement constitutes the Agent, the Arranger and/or the Issuing Bank as a trustee or fiduciary of any other person. The relationship
between the Agent and each of its appointors is that of agent and principal only.

	28.4.2
	None
of the Agent, the Arranger or the Issuing Bank 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. 

74

 
	28.4.3
	Except
where and to the extent expressly stated in a Finance Document, the Agent need not hold in trust any moneys paid to it for a party to a Finance Document or be liable to
account for interest on those monies.

	28.5
	Business with the ZPR Group  

Any
Finance Party may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the ZPR Group. 

	28.6
	Rights and discretions

 
	28.6.1
	The Agent and the Issuing Bank may rely on:

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

	(b)
	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.

	28.6.2
	The
Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

	(a)
	no
Default has occurred (unless it has actual knowledge of a Default arising under clause 25.1 (Non payment));

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

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

	28.6.3
	The
Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

	28.6.4
	The
Agent may act in relation to the Finance Documents through its personnel and agents.

	28.6.5
	The
Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

	28.6.6
	Notwithstanding
any other provision of any Finance Document to the contrary, none of the Agent, the Arranger or the Issuing Bank is obliged to do or omit to do anything if it
would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

	28.7
	Majority Lenders' instructions

 
	28.7.1
	Unless a contrary indication appears in a Finance Document, the Agent shall (i) exercise any right, power, authority or discretion vested in it as
Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in
it as Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders.

	28.7.2
	Unless
a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties other than the Security
Agent. 

75

 
	28.7.3
	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.

	28.7.4
	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.

	28.7.5
	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.
This clause 28.7.5 shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of
Transaction Security or the Security Documents.

	28.8
	Responsibility for documentation  

None
of the Agent, the Arranger or the Issuing Bank: 

	28.8.1
	is
responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, the Issuing Bank, an Obligor or any
other person given in or in connection with any Transaction Document, the Information Memorandum or the Environmental & Technical Report or the transactions contemplated by the Transaction
Documents; or

	28.8.2
	is
responsible for the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, any Transaction Security or any other agreement, arrangement or
document entered into, made or executed in anticipation of or in connection with any Transaction Document.

	28.9
	Exclusion of liability

 
	28.9.1
	Without limiting clause 28.9.2 below, none of the Agent, the Arranger or the Issuing Bank will be liable for any action taken by it under or in
connection with any Transaction Document, unless directly caused by its gross negligence or wilful misconduct.

	28.9.2
	No
Party (other than the Agent, the Arranger or the Issuing Bank (as applicable)) may take any proceedings against any officer, employee or agent of the Agent, the Arranger or the
Issuing Bank, in respect of any claim it might have against the Agent, the Arranger or the Issuing Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation
to any Transaction Document and any officer, employee or agent of the Agent, the Arranger or the Issuing Bank may rely on this clause 28.9.2 (Vertrag zugunster
Dritter).

	28.9.3
	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.

	28.9.4
	Nothing
in this Agreement shall oblige the Agent or the Arranger 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 Arranger 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 Arranger.

	28.10
	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 five 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). 

76

 
	28.11
	Resignation of the Agent

 
	28.11.1
	The Agent may resign and appoint one of its Affiliates as successor by giving notice to the Lenders and the Borrower.

	28.11.2
	Alternatively
the Agent may resign by giving notice to the Lenders and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a
successor Agent.

	28.11.3
	If
the Majority Lenders have not appointed a successor Agent in accordance with clause 28.11.2 above within thirty (30) days after notice of resignation was given,
the Agent (after consultation with the Borrower) may appoint a successor Agent.

	28.11.4
	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.

	28.11.5
	The
Agent's resignation notice shall only take effect upon the appointment of a successor and receipt by the retiring Agent of written confirmation from the successor (in form and
substance to the retiring Agent) that the successor Agent agrees to be bound by the provisions of the Finance Documents and all related agreements to which the Agent is party in its capacity as agent.

	28.11.6
	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 28.11. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an
original Party.

	28.11.7
	After
consultation with the Borrower, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with clause 28.11.2 above. In this event, the
Agent shall resign in accordance with clause 28.11.2 above.

	28.12
	Confidentiality

 
	28.12.1
	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.

	28.12.2
	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.

	28.12.3
	Notwithstanding
any other provision of any Finance Document to the contrary, none of the Agent and the Arranger 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.

	28.13
	Relationship with the Lenders

 
	28.13.1
	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 (5) Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

	28.13.2
	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). 

77

 
	28.13.3
	Each
Lender shall supply the Agent with any information that the Security Agent may reasonably specify (through the Agent) as being necessary or desirable to enable the Security
Agent to perform its functions as Security Agent. Each Lender shall deal with the Security Agent exclusively through the Agent and shall not deal directly with the Security Agent.

	28.14
	Credit appraisal by the Lenders and the Issuing Bank  

Without
affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Lender and the Issuing Bank confirms to the Agent,
the Arranger or the Issuing Bank 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 Transaction Document including: 

	28.14.1
	the
financial condition, status and nature of each member of the ZPR Group;

	28.14.2
	the
legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, any Transaction Security and any other agreement, arrangement or document entered
into, made or executed in anticipation of, under or in connection with any Transaction Document;

	28.14.3
	whether
that Finance Party 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 Transaction
Document or the transactions contemplated by any Transaction Document, any Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under
or in connection with any Transaction Document;

	28.14.4
	the
adequacy, accuracy and/or completeness of the Information Memorandum, the Environmental & Technical Report and any other information provided by the Agent any Party or
by any other person under or in connection with any Transaction Document, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made
or executed in anticipation of, under or in connection with any Transaction Document; and

	28.14.5
	the
right or title of any person in or to, or the value or sufficiency of any part of the assets that are subject to the Transaction Security, the priority of any of the
Transaction Security or the existence of any Security affecting the assets that are subject to Transaction Security.

	28.15
	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 Borrower) appoint another Lender
or an Affiliate of a Lender to replace that Reference Bank. 

	28.16
	Agent's management time  

Any
amount payable to the Agent under clause 17.3.1 (Indemnity to the Agent) (provided that it is evidenced that a Default pursuant to
clause 25.1 (Non-payment) has occurred) and clause 19.3 (Costs and expenses)
shall, if the Agent so requires, include the cost of utilising the Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Agent
may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Agent under clause 14 (Fees). 

	28.17
	Deduction from amounts payable by the Agent  

If
any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which
the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that
Party shall be regarded as having received any amount so deducted. 

78

 
	28.18
	Security Agent as creditor — parallel debt

 
	28.18.1
	Each of the Parties agrees, and each of the Obligors acknowledges by way of an abstract acknowledgement of debt (abstraktes
Schuldanerkenntnis) (the "Acknowledgement"), that each and every obligation of any such Obligor (and any of its successors
pursuant to this Agreement) under this Agreement and the other Finance Documents shall also be owing in full to the Security Agent (and each of the latter's successors under this Agreement), and that
accordingly the Security Agent will have its own independent right to demand performance by such Obligor of those obligations. The Security Agent undertakes towards the relevant Obligor that in case
of any discharge of any such obligation owing to one of the Security Agent or a Finance Party, it will, to the same extent, not make a claim against that Obligor under the Acknowledgement at any time,
provided that any such claims can be made against an Obligor if such discharge is made by virtue of any set off, counterclaim or similar defence invoked by that Obligor
vis-à-vis the Security Agent.

	28.18.2
	Without
limiting or affecting the Security Agent's rights against any Obligor (whether under this clause 28.18 or under any other provision of the Finance
Documents), the Security Agent agrees with each other Finance Party (on a several and divided basis) that, subject as set out in the next sentence, it will not exercise its rights under the
Acknowledgement with a Finance Party except with the consent of the relevant Finance Party. However, for the avoidance of doubt, nothing in the previous sentence shall in any way limit the Security
Agent's right to act in the protection or preservation of rights under or to enforce any Security Document as contemplated by this Agreement, the relevant Security Document or any other Finance
Document (or to do any act reasonably incidental to the foregoing).

	29
	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.

 

	30
	Sharing among the Finance Parties

 
	30.1
	 Payments to Finance Parties  

If
any amount owing by an Obligor under the Finance Documents to a Finance Party (the "Recovering Finance Party") is discharged by payment,
set-off or any other manner other than through the Agent in accordance with clause 31 (Payment mechanics) (a
"Recovery"), then: 

	30.1.1
	the
Recovering Finance Party shall, within 3 Business Days, notify details of the Recovery to the Agent;

	30.1.2
	the
Agent shall determine whether the Recovery is in excess of the amount which the Recovering Finance Party would have received had the Recovery been received by the Agent and
distributed in accordance with clause 31 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation
to the Recovery; and 

79

 
	30.1.3
	subject
to clause 30.5 (Exceptions), the Recovering Finance Party shall, within 3 Business Days of demand by the Agent, pay
to the Agent an amount (the "Redistribution") equal to the excess.

	30.2
	Redistribution of payments  

The
Agent shall treat the Redistribution as if it were a payment by the Obligor concerned under clause 31 (Payment mechanics) and shall pay the
Redistribution to the Finance Parties (other than the Recovering Finance Party) in accordance with clause 31.5 (Partial payments). 

	30.3
	Recovering Finance Party's rights  

After
payment of the full Redistribution, the Recovering Finance Party will be subrogated to the portion of the claims paid under clause 30.2 (Redistribution of
payments) by each Finance Party (other than the Recovering Finance Party) assigning (abtreten) to the Recovering Finance Party
that part of its own corresponding claim hereunder which is allocable to its portion of the Redistribution, and subsequently to such assignments being effected that Obligor will owe the Recovering
Finance Party a debt which is equal to the Redistribution, immediately payable and of the type originally discharged. 

	30.4
	Reversal of redistribution  

If
under clause 30.2 (Redistribution of payments): 

	30.4.1
	a
Recovering Finance Party must subsequently return a Recovery, or an amount measured by reference to a Recovery, to an Obligor; and

	30.4.2
	the
Recovering Finance Party has paid a Redistribution in relation to that Recovery, 

each
Finance Party shall, within 3 Business Days of demand by the Recovering Finance Party through the Agent, reimburse the Recovering Finance Party all or the appropriate portion of the
Redistribution paid to that Finance Party. Thereupon the subrogation in clause 30.2 (Redistribution of payments) will operate in reverse to the
extent of the reimbursement (including the reversals of the assignments contemplated therein). 

	30.5
	Exceptions

 
	30.5.1
	This clause 30 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this clause, have a
valid and enforceable claim against the relevant Obligor.

	30.5.2
	A
Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal
or arbitration proceedings, if:

	(a)
	it
notified that other Finance Party of the legal or arbitration proceedings; and

	(b)
	that
other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did
not take separate legal or arbitration proceedings. 

80

 

SECTION 11

ADMINISTRATION  

31    Payment mechanics  

	31.1
	 Payments to the Agent

 
	31.1.1
	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.

	31.1.2
	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) with such bank as the Agent specifies.

	31.2
	Distributions by the Agent  

Each
payment received by the Agent under the Finance Documents for another Party shall, subject to clause 31.3 (Distributions to an Obligor) and
clause 31.4 (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 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). 

	31.3
	Distributions to an Obligor  

The
Agent may (with the consent of the Obligor or in accordance with clause 32 (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. 

	31.4
	Clawback

 
	31.4.1
	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.

	31.4.2
	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.

	31.5
	Partial payments

 
	31.5.1
	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:

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

81

 

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

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

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

	31.5.2
	The
Agent shall, if so directed by the Majority Lenders, vary the order set out in clause 31.5.1(b) above to clause 31.5.1(d) above.

	31.5.3
	Clause 31.5.1
above and clause 31.5.2 above will override any appropriation made by an Obligor.

	31.6
	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. 

	31.7
	Business Days

 
	31.7.1
	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).

	31.7.2
	During
any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the
original due date.

	31.8
	Currency of account

 
	31.8.1
	Subject to clause 31.8.2 below to clause 31.8.5 below, the Base Currency is the currency of account and payment for any sum due from an
Obligor under any Finance Document.

	31.8.2
	A
repayment of a Utilisation or Unpaid Sum or a part of a Utilisation or Unpaid Sum shall be made in the currency in which that Utilisation or Unpaid Sum is denominated on its due
date.

	31.8.3
	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.

	31.8.4
	Each
payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

	31.8.5
	Any
amount expressed to be payable in a currency other than the Base Currency shall be paid in that other currency.

	31.9
	Change of currency

 
	31.9.1
	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:

	(a)
	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 Borrower); and

	(b)
	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). 

82

  

	31.9.2
	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 Borrower) 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. 

32    Set-off  

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. 

33    Notices  

	33.1
	 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. 

	33.2
	Addresses  

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: 

	33.2.1
	in
the case of an Original Obligor, that identified with its name below;

	33.2.2
	in
the case of each Lender or any other Obligor, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and

	33.2.3
	in
the case of the Agent, that identified with its name below, or any substitute address or 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.

	33.3
	Delivery

 
	33.3.1
	Unless otherwise specifically provided, any communication or document made or delivered by one person to another under or in connection with the Finance
Documents will only be effective:

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

	(b)
	if
by way of letter, when it has been left at the relevant address or five 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 33.2 (Addresses), if addressed to
that department or officer. 

83

 
	33.3.2
	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).

	33.3.3
	All
notices from or to an Obligor shall be sent through the Agent.

	33.3.4
	Any
communication or document made or delivered to the Parent in accordance with this clause will be deemed to have been made or delivered to each of the Obligors.

	33.4
	Notification of address and fax number  

Promptly
upon receipt of notification of an address or fax number or change of address or fax number pursuant to clause 33.2 (Addresses) or
changing its own address or fax number, the Agent shall notify the other Parties. 

	33.5
	Electronic communication

 
	33.5.1
	Unless otherwise specifically provided, any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may
be made by electronic mail or other electronic means, if the Agent and the relevant Lender:

	(a)
	agree
that, unless and until notified to the contrary, this is to be an accepted form of communication;

	(b)
	notify
each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

	(c)
	notify
each other of any change to their address or any other such information supplied by them.

	33.5.2
	Any
electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication
made by a Lender to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.

	33.6
	English language

 
	33.6.1
	Any notice given under or in connection with any Finance Document must be in English.

	33.6.2
	All
other documents provided under or in connection with any Finance Document must be:

	(a)
	in
English; or

	(b)
	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. 

34    Calculations and certificates  

	34.1
	 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. 

84

 
	34.2
	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. 

	34.3
	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
any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice. 

35    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. 

36    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. 

37    Amendments and waivers  

	37.1
	 Written form  

Changes
to and amendments of this Agreement including this clause 37.1 must be made in writing. 

	37.2
	Required consents

 
	37.2.1
	Subject to clause 37.3 (Exceptions), any term of the Finance Documents may be amended or waived only
with the consent of the Majority Lenders and the Obligors' Agent and any such amendment or waiver will be binding on all Parties.

	37.2.2
	The
Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause 37.

	37.3
	Exceptions

 
	37.3.1
	An amendment or waiver that has the effect of changing or which relates to:

	(a)
	the
definition of "Majority Lenders" in clause 1.1 (Definitions);

	(b)
	an
extension to the date of payment of any amount under the Finance Documents;

	(c)
	a
reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

	(d)
	an
increase in or an extension of any Commitment; 

85

 

	(e)
	a
change to the Borrower or Guarantors other than in accordance with clause 27 (Changes to the Obligors);

	(f)
	any
provision which expressly requires the consent of all the Lenders; or

	(g)
	clause 2.2
(Finance Parties' rights and obligations), clause 26 (Changes to the
Lenders) or this clause 37; 

shall
not be made without the prior consent of all the Lenders. 

	37.3.2
	An
amendment or waiver which relates to the rights or obligations of the Agent, the Arranger or the Issuing Bank may not be effected without the consent of the Agent, the Arranger
or the Issuing Bank.

	37.3.3
	Notwithstanding
clause 37.3.1 above and clause 37.3.2 above, the Agent may make technical amendments to the Finance Documents arising out of manifest errors on the
face of the Finance Documents, where such amendments would not prejudice or otherwise be adverse to the interests of any Finance Party without any reference or consent of the Finance Parties.

	37.3.4
	For
the purposes of this clause 37.3 each Party, which is incorporated or established under the laws of the Federal Republic of Germany, hereby releases the Agent from the
restrictions of section 181 of the German Civil Code (BGB). 

38    Counterparts  

Each
Finance Document may be executed in any number of counterparts (including by facsimile or other electronic transmission, provided that the original version of any such execution by way of
facsimile or other electronic transmission is promptly delivered to the Agent), and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document. 

39    Statute of limitations (Verjährung)  

Any
claim for payment arising under this Agreement shall become time barred (verjährt) five years after its coming into existence. 

40    Money laundering  

The
Borrower confirms to each Finance Party that each Utilisation made or to be made available to it under this Agreement will be solely for its own account and that, accordingly, the Borrower
qualifies as economic beneficiary (wirtschaftlich Berechtiger) (within the meaning of section 8 of the German Money Laundering Act
(Gesetz über das Aufspüren von Gewinnen aus schweren Straftaten (Geldwäschegesetz)). 

86

 
 
 

SECTION 12
  GOVERNING LAW AND ENFORCEMENT    
    

41    Governing law  

This
Agreement is governed by and construed in accordance with the laws of the Federal Republic of Germany. 

42    Jurisdiction  

	42.1
	The courts of Munich, Federal Republic of Germany, have exclusive jurisdiction to settle any dispute arising out of, or in connection with, any Finance
Document (including a dispute regarding the existence, validity or termination of any Finance Document) (a "Dispute").

	42.2
	The
Parties agree that the courts of Munich, Federal Republic of Germany, are the most appropriate and convenient courts to settle Disputes and accordingly no Party will dispute to
the contrary.

	42.3
	This
clause 42.3 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 in any other
courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions. 

        This
Agreement has been entered into on the date stated at the beginning of this Agreement. 

87

 
 
 

Schedule 1
  The Original Parties
  
    Part I
  The Original Obligors    
    

	Name of Original Borrower
 
	 	Registration details
 

	ZELLSTOFF- UND PAPIERFABRIK ROSENTHAL GMBH & CO. KG	 	Court of Gera, HRA 1607

	Name of Original Guarantors
 
	 	Registration details
 

	D&Z HOLDING GMBH	 	Court of Dresden,
	(formerly known as Dresden Papier Holding GmbH)	 	HRB 10484
	
D&Z BETEILIGUNGS GMBH

(formerly known as Dresden Papier GmbH)	
 	

Court of Dresden,

HRB 17804
	
ZPR GESCHÄFTSFÜHRUNGS GMBH

(formerly known as LK Einundachtzigste Vermögensverwaltungs GmbH)	
 	

Court of Gera, HRB 9855
	ZPR BETEILIGUNGS GMBH	 	Court of Gera, HRB 9027
	ZPR LOGISTIK GMBH	 	Court of Gera, HRB 7851

88

 
 
 

Part II
  The Original Lenders    
    

	Name of Original Lender
 
	 	Commitment
 

	BAYERISCHE HYPO – UND VEREINSBANK AG	 	EURO 40,000,000

89

  

 
 

Schedule 2
  Conditions precedent    
    

 
 

Part I
  Conditions precedent to initial Utilisation    
    

1      Original Obligors  

	1.1
	A copy of the constitutional documents of each Original Obligor in the form required by the Agent, including in relation to a German Obligor, an
up-to-date officially certified commercial register extract (beglaubigter Handelsregisterauszug) and the articles of association
(Satzung). 
	1.2
	A
copy of a resolution of the shareholders of each Original Obligor: 
	1.2.1
	approving
the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a
party; 
	1.2.2
	authorising
a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and 
	1.2.3
	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 to which it is a party. 

2      Finance Documents  

	2.1
	Each of the following documents duly executed by all the parties thereto: 
	2.1.1
	this
Agreement; 
	2.1.2
	each
Existing Bank Guarantee; 
	2.1.3
	each
Fee Letter; 
	2.1.4
	the
Hedging Strategy Letter; 
	2.1.5
	each
Security Document; 
	2.1.6
	the
Security Pooling Agreement; 
	2.1.7
	the
Shareholders' Undertaking Agreement; 
	2.1.8
	any
other document agreed to be a "Finance Document" by both the Agent and the Borrower; and 
	2.2
	evidence
that the Borrower has been released from any obligation owed to the Issuing Bank under any documentation entered into between the Issuing Bank and the Borrower (other than a
Finance Document) in connection with the Existing Bank Guarantees. 

3      Transaction Documents  

Each
of the following documents duly executed by all the parties thereto (and unless an original and if required by the Agent) certified to be a true copy by a director of the Borrower: 

90

 
	3.1
	the
Reorganisation Tax Opinion (in original); 
	3.2
	the
Reorganisation Letter (in original); 
	3.3
	each
Shareholder Loan Agreement; 
	3.4
	the
Management Fee Agreement; 
	3.5
	each
Domination Agreement; and 
	3.6
	the
Trust Agreement. 

4      Accounts  

	4.1
	Delivery of the Original Financial Statements of each Original Obligor. 
	4.2
	Delivery
of the annual management accounts in respect of each Original Obligor for the period ending on 31 December 2004. 

5      Environmental and technical  

Delivery
of the Environmental & Technical Report. 

6      Refinancing  

	6.1
	Evidence that all payments required to facilitate the Refinancing, other than any amounts payable in accordance with a Utilisation of the Facility, have been
received. 
	6.2
	Evidence
that the Existing Indebtedness (other than Permitted Indebtedness) has been discharged in full. 
	6.3
	Evidence
that the Existing Security (other than Permitted Encumbrances) has been discharged in full. 
	6.4
	Delivery
of a copy of each Refinancing Document. 
	6.5
	Any
other evidence as may be required by the Agent that the Refinancing has been implemented. 

7      Legal opinions  

Legal
opinions addressed to the Finance Parties: 

	7.1
	from
Cleary, Gottlieb, Steen & Hamilton in respect of German law as to: 
	7.1.1
	the
legality and effectiveness of the Permitted Reorganisation, (containing a description of the various steps of the Permitted Reorganisation, confirming that each step has been
duly taken and implemented); and 
	7.1.2
	the
structure of the ZPR Group following the complete implementation of the Permitted Reorganisation being reflected in the table in part B of Schedule 11
(Structure); 
	7.2
	from
Luther Menold in respect of the Original Obligors, as to: 

91

 
	7.2.1
	the
due capacity of (including the power to enter into, perform and take all necessary action to authorise its entry into and performance of, the Finance Documents to which it is a
party and the transactions contemplated by those Finance Documents) and the due execution by each Original Obligor in relation to each Finance Document to which it is a party; and 
	7.2.2
	its
due incorporation or (as the case may be) establishment, its valid existence, its ability to assume rights and liabilities, sue and be sued in its own name and the power to own
its assets and carry on its business as it is being conducted; 
	7.3
	from
Sangra Moller in respect of the Ultimate Parent: 
	7.3.1
	its
due incorporation, its valid existence, its ability to assume rights and liabilities and be sued in its own name and the power to own its assets and carry on its business as it
is being conducted; 
	7.3.2
	the
due capacity of (including the power to enter into, perform and take all necessary action to authorise its entry into and performance of, the Shareholder Loan Agreement to
which it is a party and the Shareholders' Undertaking Agreement and the transactions contemplated by those Transaction Documents) and the due execution by the Ultimate Parent in relation to each of
the Shareholder Loan Agreement to which it is a party and the Shareholders' Undertaking Agreement; 
	7.3.3
	the
choice of the laws of the Federal Republic of Germany to govern the Shareholder Loan Agreement to which it is a party and the Shareholders' Undertaking Agreement being upheld
by the relevant state and federal courts; and 
	7.3.4
	recognition
and acceptance of final and conclusive judgment against it from any court in the Federal Republic of Germany by the relevant state and federal courts without
re-trial or examination of the merits of the case; and 
	7.4
	from
the Lender's legal advisers. 

8      Other documents and evidence  

	8.1
	A copy of any other Authorisation or other document, opinion or assurance which the Agent reasonably considers to be necessary or desirable (if it has
notified the Borrower 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. 
	8.2
	Evidence
that the fees, costs and expenses then due from the Borrower pursuant to clause 14 (Fees) and clause 19
(Costs and expenses) have been paid or will be paid by the first Utilisation Date. 
	8.3
	A
solvency certificate given by the directors of each Original Obligor. 
	8.4
	A
certificate from the Obligors' Agent, signed by two of its directors: 
	8.4.1
	evidencing
that there has been no material adverse change in the financial condition of the ZPR Group since 31 December 2004; and 
	8.4.2
	confirming
compliance with all representations and warranties to be given by the Borrower; 
	8.5
	Provision
by each Original Obligor of all information necessary to comply with any money laundering regulations. 

92

 
 
 

Part II
  Conditions precedent required to be delivered by an Additional Guarantor    
    

	1
	An
Accession Letter, duly executed by the Additional Guarantor and the Parent.

	2
	A
copy of the constitutional documents of the Additional Guarantor in the form required by the Agent, including in relation to a German Obligor, an up-to-date
officially certified commercial register extract (beglaubigter Handelsregisterauszug) and the articles of association
(Satzung).

	3
	A
copy of a resolution of the shareholders of the Additional Guarantor:

	(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
	A
certificate of an authorised signatory of the Additional Guarantor 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.

	6
	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.

	7
	If
available, the latest audited financial statements of the Additional Guarantor.

	8
	A
legal opinion of Norton Rose, legal advisers to the Arranger and the Agent in Germany.

	9
	If
the Additional Guarantor is incorporated in a jurisdiction other than the Federal Republic of Germany, a legal opinion of the legal advisers to the Arranger and the Agent in the
jurisdiction in which the Additional Guarantor is incorporated.

	10
	If
the proposed Additional Guarantor is incorporated in a jurisdiction other than the Federal Republic of Germany, evidence that a process agent, if not an Obligor, has accepted its
appointment in relation to the proposed Additional Guarantor. 

93

 
 
 

Schedule 3
  Utilisation Request    
    

	From:

To:

Dated:

	 	[Borrower]

[Agent]

Dear
Sirs 

Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG — EURO 40,000,000

Multicurrency Revolving Credit Facility Agreement dated [                        ] (the "Agreement")  

	1
	We
refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this
Utilisation Request.

	2
	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:	 	[    ]

	3
	We
confirm that each condition specified in clause 4.2 (Further conditions precedent) is satisfied on the date of this Utilisation
Request.

	4
	The
proceeds of this Loan should be credited to [account].

	5
	This
Utilisation Request is irrevocable. 

Yours
faithfully 

	
	 	

	authorised signatory for
 [name of Borrower]	 	authorised signatory for
 [name of Borrower]

94

 
 
 

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 is the rate 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: 

	 	E × 0.01	 	 
	 	
	 	per cent. per annum.
	 	300	 	 

Where
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 Lender to the Agent pursuant to paragraph 6 below and expressed in euros per euro 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
	If
requested by the Agent, each Reference Lender shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by
that Reference Lender 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 Lender as being the average of the Fee Tariffs applicable to that Reference Lender for that financial year) and expressed in euros per euro 1,000,000 of the Tariff Base of that
Reference Bank. 

95

 
	7
	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 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 of any change to the information provided by it pursuant to this paragraph. 

	8
	The
rates of charge of each Reference Lender for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraphs 6
and 7 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender's obligations in relation to cash 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.

	9
	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 Lender pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects.

	10
	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 Lender pursuant to paragraphs 3, 6 and 7 above.

	11
	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.

	12
	The
Agent may from time to time, after consultation with the Borrowers 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 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. 

96

 
 
 

Schedule 5
  Form of Assignment and Assumption Certificate    
    

	To:	 	Bayerische Hypo- und Vereinsbank AG as Agent
	From:	 	[The Existing Lender] (the "Existing Lender") and [The
New Lender] (the "New Lender")
	Dated:	 	 

Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG — EURO 40,000,000

Multicurrency Revolving Credit Facility Agreement dated [                        ]
(the "Agreement")  

	1
	We
refer to the Agreement. This is an Assignment and Assumption Certificate. Terms defined in the Agreement have the same meaning in this Assignment and Assumption Certificate unless
given a different meaning in this Assignment and Assumption Certificate.

	2
	We
refer to clause 26.5 (Procedure for transfer):

	(a)
	the
Existing Lender assigns to the New Lender all the rights of the Existing Lender under the Finance Documents (including the Security Pooling Agreement and the Shareholders
Undertaking Agreement) which correspond to that portion of the Existing Lender's Commitments under the Agreement specified in the Schedule;

	(b)
	the
New Lender assumes all the obligations of the Existing Lender which correspond to the rights assigned under paragraph (a) above;

	(c)
	the
Existing Lender is released from those obligations; and

	(d)
	on
the Transfer Date, the New Lender shall become a Party as a Lender.

	3
	[The
consent of the Issuing Bank required pursuant to clause 26.2.2 (Conditions of assignment and assumption) has been
obtained.]

	4
	The
Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of clause 33.2
(Addresses) are set out in the Schedule.

	5
	The
proposed Transfer Date is [    ].

	6
	The
New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in clause 26.4.3 (Limitation of responsibility
of Existing Lenders).

	7
	The
New Lender confirms (i) that it becomes a party to the Security Pooling Agreement and the Shareholders Undertaking Agreement by virtue of the assignment and assumption
hereunder and (ii) that it is bound by, and entitled to all benefits arising from, the provisions of such agreements as if it had been an original party to such agreements.

	8
	This
Assignment and Assumption Certificate 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
this Assignment and Assumption Certificate.

	9
	This
Assignment and Assumption Certificate is governed by German law. 

97

 
 
 

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,] 

	 	 	[Existing Lender]	 	[New Lender]
	 	 	By:	 	By:

This Assignment and Assumption Certificate is accepted by the Agent and the Transfer Date is confirmed as  [            ].

[Agent]

By:

98

  

Schedule 6

Form of Accession Letter  

	To:	 	Bayerische Hypo- und Vereinsbank AG as Agent
	
 From:	
 	
[Subsidiary] and [Parent]
	
 Dated:	
 	

 
	
 Dear Sirs	
 	

 

Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG — EURO 40,000,000 Multicurrency Revolving

Credit Facility Agreement dated [                        ] (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 Guarantor and to be bound by the terms of the Agreement as an Additional Guarantor pursuant to clause 27.2 (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 governed by German law.
	
 	
 	

[Parent]
                                         
                 [Subsidiary]

99

 
Schedule 7

Form of Resignation Letter  

	To:	 	Bayerische Hypo- und Vereinsbank AG as Agent
	
 From:	
 	
[resigning Obligor] and [Parent]
	
 Dated:	
 	

 
	
 Dear Sirs	
 	

 

Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG — EURO 40,000,000 Multicurrency Revolving

Credit Facility Agreement dated [                        ] (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 27.4 (Resignation of a Guarantor), we request that [resigning Guarantor] be released from its obligations as a 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 governed by German law.
	
 	
 	

[Parent]                                      [Subsidiary]

	
 	
 	

By:                                         
     By:

	*
	Insert any other conditions required by the Facility Agreement. 

100

 

Schedule 8

Form of Compliance Certificate  

	To:	 	Bayerische Hypo- und Vereinsbank AG as Agent
	
 From:	
 	
[Parent]
	
 Dated:	
 	

 

Dear
Sirs 

Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG — EURO 40,000,000 Multicurrency Revolving

Credit Facility Agreement dated [                        ] (the "Agreement")

	1.	 	We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance
Certificate.
	
2.	
 	

We confirm that each financial covenant referred to in clause 23 (Financial covenants) is as set out in the table below:

	Financial covenant
 
	 	Actual ratio

	Leverage ratio	 	[    ]
	Interest Cover Ratio	 	[    ]
	Current Ratio	 	[    ]

	
 3.	
 	

We confirm that each condition specified in clause 4.2 (Further conditions precedent) is satisfied on the date of this Compliance Certificate.
	
 4.	
 	

[We confirm that no Default is continuing.] *

	
 Signed:	
 	

 	
 	

 
	 	 	
 Director

of
 [Borrower]	 	
 Director

of
 [Borrower]

in
its capacity as Borrower and, in respect of paragraph 3 above, in its capacity as Obligors' Agent 

	*
	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. 

101

 
 
 

Schedule 9
  Existing Security    
    Part A
  Existing Security to be discharged    
    

	Name of Obligor
 
	 	Name of security recipient
	 	Security

	ZPR KG	 	HVB in its capacity as Security Agent on behalf of the Finance Parties under the DM 508,000,000 facilities agreement listed in Schedule 10 (Existing Indebtedness)	 	Security assignment regarding claims under project and delivery contracts dated 28 July 1998 as amended on 13.12.2000
	
 ZPR KG	
 	

As above	
 	

Security assignment in respect of insurance claims dated 28 July 1998 as amended on 13.12.2000, insurance certificate (Sicherungsschein) of FM Insurance Company Ltd. dated
13 July 2004
	
 ZPR KG	
 	

As above	
 	

Transfer of title by way of security no. 1 regarding motor vehicles dated 28 July 1998 as amended on 13.12.2000
	
 ZPR KG	
 	

As above	
 	

Storage transfer of title by way of security no. 1 in respect of machinery / equipment dated 28 July 1998 as amended on 13.12.2000
	
 ZPR KG	
 	

As above	
 	

Storage transfer of title by way of security no. 2 RHB (Roh-, Hilfs- und Betriebsstoffe) dated 28 July 1998 as amended on 13.12.2000
	
 ZPR KG	
 	

As above	
 	

Agreements on the creation of land charges amounting to DM 15,000,000 and DM 548,000,000 including assumption of of personal liability (numbers 0565/1998 and 0566/1998 of roll of deeds of the notary Dr. Hans Frieder Krauß in Hof)
dated 5 March 1998, land charge insurance certificate (Zubehör-Hypothekensicherungsschein) of FM Insurance Company Ltd. dated 13 July 2004 and a security purpose agreement
dated 28 July 1998
	
 D&Z Beteiligung (under its former name Spezialpapierfabrik Blankenstein GmbH)	
 	

As above	
 	

Agreement on the pledge on the general partner's interest in ZPR KG dated 12 September 2001/26 October 2001
	
 D&Z Beteiligung (under its former name Spezialpapierfabrik Blankenstein GmbH)	
 	

As above	
 	

Agreement on the pledge on the limited partner's interest in ZPR KG dated 28 July 1998 as amended on 13 December 2000
	
 D&Z Beteiligung (under its former name Spezialpapierfabrik)	
 	

As above	
 	

Pledge agreement in respect of the equity account (Eigenkapitalkonto) no. 85903861 with HVB Dresden dated 28 July 1998
	
 Blankenstein GmbH	
 	

 	
 	

Dresden dated 28 July 1998
	
 	
 	

 	
 	

 

102

 

	
 Parent (under its former ZPR Zellstoff- und Papierfabrik Rosenthal Holding GmbH)	
 	

As above	
 	

Agreement on the pledge of its shares in D&Z Beteiligung (number 2731 C/2001 of the notary Dr. Heinz Korte in Munich) dated 5 November
	
 D&Z Beteiligung (under its former name Spezialpapierfabrik Blankenstein GmbH)	
 	

As above	
 	

Agreement on the pledge of its shares in ZPR Beteiligung as well as offer to assign the relevant share (number 2730 C/2001 of the notary Dr. Heinz Korte in Munich) dated 5 November 2001
	
 D&Z Beteiligung (under its former name Dresden Papier GmbH)	
 	

As above	
 	

Agreement on the pledge of the share in ZPRG (number 2150/2004 of roll of deeds of the notary Dr. Hans-Frieder Krauß in Hof/Saale) dated 12 July 2004
	
 D&Z Beteiligung (under its former name Dresden Papier GmbH)	
 	

As above	
 	

Agreement on the offer to assign shares in ZPRG (number 2151/2004 of roll of deeds of the notary Dr. Hans-Frieder Krauß in Hof/Saale) dated 12 July 2004
	
 ZPR KG	
 	

As above	
 	

Pledge agreement in respect of the proceeds accounts (Erlössammelkonten) no. 5927129 and 5927145, the related account no. 876035898 as well as the depository account no. 5927129
each with HVB Dresden dated 13 December 2000
	
 ZPR KG	
 	

As above	
 	

Pledge agreement in respect of the time deposit (investment account in connection with the proceeds account) no. 550220 with HVB Luxembourg S.A. dated 13 December 2000
	
 ZPR KG	
 	

As above	
 	

Pledge agreement in respect of the debt service reserve account (Schuldendienstdeckungskonto) no. 5927374, the time deposit no. 85903810 and the securities deposit no. 5927374 each
with HVB Dresden dated 13 December 2000
	
 ZPR KG	
 	

As above	
 	

Pledge agreement in respect of the time deposit (investment account in connection with the debt service reserve account no. 558056 with HVB Luxembourg S.A.) dated 13 December 2000
	
 ZPR KG	
 	

As above	
 	

Pledge agreement in respect of the investment reserve account (Investitionsrücklagenkonto) no. 5927382 with HVB Dresden dated 28 July 1998 as amended on 13.12.2000
	
 Ultimate Parent	
 	

As above	
 	

Shareholders undertaking agreement dated 6 July 1998, as amended by amendment agreement No. 2 dated 26 October 2001
	
 D&Z Beteiligung (under its former name Spezialpapierfabrik Blankenstein GmbH)	
 	

 	
 	

 
	
 ZPR Beteiligung	
 	

 	
 	

 
	
 	
 	

 	
 	

 

103

 

	
 ZPR KG	
 	

As above	
 	

Pledge agreement in respect of claims under hedging agreements dated 28 July 1998
	
 ZPR KG	
 	

As above	
 	

Pledge agreement in respect of hedging agreements dated 13 December 2000

104

  

 
 

Part B
  
    Permitted Existing Security    
    

	Name of Obligor
 
	 	Name of security recipient
 
	 	Security by way of asset

transfer in respect of
 
	 	Total principal amount

of indebtedness secured
 

	ZPR KG	 	Disko Leasing	 	Sennebogen Umschlagbagger 835 MHD	 	EUR 328,260.00
	ZPR KG	 	SüdLeasing	 	4 MAN 18.413 FLS	 	EUR 337,659.24
	ZPR KG	 	Disko Leasing	 	Komatsu-Radlader	 	EUR 265,938.00
	ZPR KG	 	HVB Investitionsbank	 	Darlehen 4 BEFA-Sattelauflieg	 	EUR 189,575.40
	ZPR KG	 	HVB Leasing	 	Two Mercedes Benz;

one Zanner trailer chassi	 	EUR 246,420.00
	ZPR Logistik	 	Hanseatische Leasing GmbH	 	Five Mercedes Benz trucks as well as five twin-axle trailer chassis	 	EUR 826,836.00
	ZPR Logistik	 	Hanseatische Leasing GmbH	 	Five Mercedes Benz trucks as well as five triple-axle tipping semi-trailers	 	EUR 842,355.00
	ZPR Logistik	 	Hanseatische Leasing GmbH	 	Five Mercedes Benz trucks as well as four Zanner short wood superstructures	 	EUR 646,150.80
	ZPR Logistik	 	Hanseatische Investitionsbank GmbH	 	One semi-trailer chassi and one triple-axle semi-trailer	 	EUR 142,773.00
	ZPR Logistik	 	VR-Leasing AG	 	One twin-axle short wood combination with bolsters (low bed trailers)	 	EUR 34,694.40

105

 
 
 

Schedule 10
  Existing Indebtedness
  
    Part A
  
    Existing Indebtedness to be discharged    
    

	Name of Obligor
 
	 	Name of creditor
 
	 	Total principal amount outstanding
 

	ZPR KG	 	Bayerische Hypo- und Vereinsbank AG on behalf of the banks	 	EUR 171,599,014.24
	 	 	(Kreditvertrag in Höhe von DM 508.000.000,00 vom 06.07.1998)	 	 
	ZPR KG	 	Bayerische Hypo- und Vereinsbank AG; land fill facility	 	EUR 7,092,000.00
	 	 	(Deponiefinanzierung: Kreditvertrag in Höhe von EUR 7.600.000,00 vom 24./27.05.2002)	 	 

106

 
 
 

Part B
  
    Existing Indebtedness to remain    
    

	Name of Obligor
 
	 	Name of creditor
 
	 	Asset
 
	 	Total principal

amount outstanding
 

	ZPR KG	 	Vattenfall	 	Loan agreement entered into with Vattenfall in respect of an energy recovery investment cost take-over reboiler	 	EUR 1,282,278
	ZPR KG	 	Audi Leasing	 	Operating lease of Audi car, reg. no. SOK-ZP 250	 	EUR 9,315
	ZPR KG	 	Volkswagen Leasing GmbH	 	Operating lease of VW car, reg. no. SOK-ZP 219	 	EUR 558
	ZPR KG	 	Volkswagen Leasing GmbH	 	Operating lease of VW car, reg. no. SOK-ZP 300	 	EUR 14,004
	ZPR KG	 	Volkswagen Leasing GmbH	 	Operating lease of VW car, reg. no. SOK-ZP 333	 	EUR 17,275
	ZPR KG	 	Linde	 	Operating lease of oxygen plant	 	EUR 5,185,018
	ZPR Logistik	 	Volvo Financial Service GmbH	 	Operating lease of 14 lorries	 	EUR 22,656
	ZPR Logistik	 	VR Leasing Nuremberg	 	Operating lease of 14 lorries	 	EUR 246,264
	ZPR Logistik	 	Süd Leasing	 	Operating lease of three lorries	 	EUR 61,056
	ZPR Logistik	 	Renault Leasing	 	Operating lease of Renault car, reg. no. SOK-ZP 221	 	EUR 2,773
	ZPR Logistik	 	 	 	Service agreement	 	EUR 94,413

107

 
 
 

Schedule 11
  Structure    
    

 
 

Part A
  STRUCTURE BEFORE REORGANISATION    
    

         

  

108

 

  

109

 
 
 

Schedule 12
  Timetables    
    

	 
	 	First Utilisation in EURO or in the Optional Currency
 
	 	Any subsequent Utilisations in EURO or in the Optional Currency
 

	Delivery of a duly completed Utilisation Request (clause 5.1 (Delivery of a Utilisation Request for Loans)	 	U - 2

9.30 a.m.	 	U - 5

9.30 a.m.
	Delivery of a duly completed Utilisation Request (clause 6.2 (Delivery of a Utilisation Request for Bank Guarantees)	 	U - 2

9.30 a.m.	 	U - 5

9.30 a.m.
	Agent determines (in relation to a Utilisation) the Base Currency Amount of the Loan, if required under clause 5.4 (Lenders' participation) and notifies the Lenders of
the Loan in accordance with clause 5.4 (Lender's participation)	 	U - 2

Noon	 	U - 3

Noon
	Agent notifies the Issuing Bank and each Lender of the details of the requested Bank Guarantee and its participation in that Bank Guarantee in accordance with clause 6.5.4 (Issue of Bank
Guarantees)	 	U - 2

Noon	 	U - 3

Noon
	Delivery of a duly completed Renewal Request (clause 6.6.1 (Renewal of Bank Guarantees)	 	U - 2

9.30 a.m.	 	U - 3

9.30 a.m.
	Agent receives a notification from a Lender under clause 8.2 (Unavailability of a currency)	 	Q - 2

5.30 p.m.	 	Q - 3

5.30 p.m.
	Agent gives notice in accordance with clause 8.2 (Unavailability of a currency)	 	Q - 1

9.30 a.m.	 	Q - 2

9.30 a.m.
	EURIBOR or LIBOR is fixed	 	Quotation Day as of 11:00 a.m. for EURO and Quotation Day as of 11:00 a.m. (London time)	 	Quotation Day as of 11:00 a.m. for EURO and Quotation Day as of 11:00 a.m. (London time)

U = date of Utilisation
 Q = Quotation Date 

U - X = X Business Days prior to the Utilisation Date
 Q - X = X Business Days prior to the Quotation Date 

110

 
 
 

Schedule 13
  Existing Bank Guarantees    
    

	Name of Obligor
 
	 	Name of beneficiary
	 	Total amount guaranteed
	 	Date of issue
	 	Time of liability

	ZPR KG	 	Customs authorities (Hauptzollamt), Erfurt	 	EUR 22,080	 	22.11.2001	 	23.11.2001 — unlimited
	ZPR KG	 	Ministry for Environmental Protection (Ministerium für Naturschutz) in Erfurt; Freistaaat Thüringen	 	EUR 270,000	 	28.01.2004	 	21.05.2003 — 15.02.2005
	ZPR KG	 	Forestry Directorate (Forstdirektion) Oberbayern — Schwaben	 	EUR 70,000	 	28.01.2004	 	04.02.2004 — 31.03.2005
	ZPR KG	 	Environmental and Agricultural Ministry in Saxony (Sächsische Staatsministerium für Umwelt und Landwirtschaft (Abt. Forsten.)), Freistaat Sachsen	 	EUR 220,000	 	12.02.2004	 	10.02.2004 — 14.11.2007

111

  

 
 

SIGNATURES    
    

THE ORIGINAL BORROWER  

ZELLSTOFF- UND PAPIERFABRIK ROSENTHAL GMBH & CO. KG  

	By:	 	/s/ Werner Stueber

/s/ Leonhard Nossol
	
 Address:	
 	

Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG

Hauptstrasse 16

07366 Blankenstein

Federal Republic of Germany
	
 Fax:	
 	

+49 (0) 36642 8-2270
	
 Attention:	
 	

Mr. Leonhard Nossol

THE ORIGINAL GUARANTORS  

D&Z HOLDING GMBH  

	By:	 	/s/ Jimmy S.H. Lee

/s/ Leonhard Nossol
	
 Address:	
 	

D&Z Holding GmbH

c/o Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG

Hauptstrasse 16

07366 Blankenstein

Federal Republic of Germany
	
 Fax:	
 	

+49 (0) 36642 8-2270
	
 Attention:	
 	

Mr. Leonhard Nossol

D&Z BETEILIGUNGS GMBH  

	By:	 	/s/ Jimmy S.H. Lee

/s/ Leonhard Nossol
	
 Address:	
 	

D&Z Beteiligungs GmbH

c/o Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG

Hauptstrasse 16

07366 Blankenstein

Federal Republic of Germany
	
 Fax:	
 	

+49 (0) 36642 8-2270
	
 Attention:	
 	

Mr. Leonhard Nossol

112

 

ZPR GESCHÄFTSFÜHRUNGS GMBH  

	By:	 	/s/ Werner Stueber

/s/ Leonhard Nossol
	
 Address:	
 	

ZPR Geschäftsführung GmbH

c/o Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG

Hauptstrasse 16

07366 Blankenstein

Federal Republic of Germany
	
 Fax:	
 	

+49 (0) 36642 8-2270
	
 Attention:	
 	

Mr. Leonhard Nossol

ZPR BETEILIGUNGS GMBH  

	By:	 	/s/ Werner Stueber

/s/ Leonhard Nossol
	
 Address:	
 	

ZPR Beteligungs GmbH

c/o Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG

Hauptstrasse 16

07366 Blankenstein

Federal Republic of Germany
	
 Fax:	
 	

+49 (0) 36642 8-2270
	
 Attention:	
 	

Mr. Leonhard Nossol

ZPR LOGISTIK GMBH  

	By:	 	/s/ Werner Stueber

/s/ Leonhard Nossol
	
 Address:	
 	

ZPR Logistik GmbH

c/o Zellstoff- und Papierfabrik Rosenthal GmbH & Co. KG

Hauptstrasse 16

07366 Blankenstein

Federal Republic of Germany
	
 Fax:	
 	

+49 (0) 36642 8-2270
	
 Attention:	
 	

Mr. Leonhard Nossol

113

 

THE ARRANGER  

BAYERISCHE HYPO- UND VEREINSBANK AG  

	By:	 	/s/ Claudia Schmidt

/s/ Frank Segger
	
 Address:	
 	

Bayerische Hypo- und Vereinsbank AG

Am Tucherpark 1

80538 Munich

Federal Republic of Germany
	
 Fax:	
 	

+49 89 378 - 415 18
	
 Department:	
 	

MCS 2L P2
	
 Attention:	
 	

Mr. Thomas Baier/ Ms. Claudia Schmidt

THE AGENT  

BAYERISCHE HYPO- UND VEREINSBANK AG  

	By:	 	/s/ Claudia Schmidt

/s/ Frank Segger
	
 Address:	
 	

Bayerische Hypo- und Vereinsbank AG

Am Tucherpark 1

80538 Munich

Federal Republic of Germany
	
 Fax:	
 	

+49 89 378 - 415 17
	
 Department:	
 	

MCS4LA
	
 Attention:	
 	

Ms. Jitka Svarc
	
 Email:	
 	

jitka.svarc@HVB.de

THE SECURITY AGENT  

BAYERISCHE HYPO- UND VEREINSBANK AG  

	By:	 	/s/ Claudia Schmidt

/s/ Frank Segger
	
 Address:	
 	

Bayerische Hypo- und Vereinsbank AG

Am Tucherpark 1

80538 Munich

Federal Republic of Germany
	
 Fax:	
 	

+49 89 378 - 415 17
	
 Department:	
 	

MCS4LA
	
 Attention:	
 	

Ms. Jitka Svarc
	
 Email:	
 	

jitka.svarc@HVB.de

114

 

THE ISSUING BANK  

BAYERISCHE HYPO- UND VEREINSBANK AG  

	By:	 	/s/ Claudia Schmidt

/s/ Frank Segger
	
 Address:	
 	

Bayerische Hypo- und Vereinsbank AG

Am Tucherpark 1

80538 Munich

Federal Republic of Germany
	
 Fax:	
 	

+49 89 378 - 415 18
	
 Department:	
 	

MCS 2L P2
	
 Attention:	
 	

Mr. Thomas Baier

THE LENDERS  

BAYERISCHE HYPO- UND VEREINSBANK AG  

	By:	 	/s/ Claudia Schmidt

/s/ Frank Segger
	
 Address:	
 	

Bayerische Hypo- und Vereinsbank AG

Am Tucherpark 1

80538 Munich

Federal Republic of Germany
	
 Fax:	
 	

+49 89 378 - 275 89
	
 Department:	
 	

MCS2P2
	
 Attention:	
 	

Mr. Thomas Baier
	
 Email:	
 	

thomas.baier@HVB.de

115

QuickLinks

SECTION 1 INTERPRETATION

SECTION 2 THE FACILITY

SECTION 3 UTILISATION

SECTION 4 REPAYMENT, PREPAYMENT AND CANCELLATION

SECTION 5 COSTS OF UTILISATIONS

SECTION 6 ADDITIONAL PAYMENT OBLIGATIONS

SECTION 12 GOVERNING LAW AND ENFORCEMENT

Schedule 1 The Original Parties Part I The Original Obligors

Part II The Original Lenders

Schedule 2 Conditions precedent

Part I Conditions precedent to initial Utilisation

Part II Conditions precedent required to be delivered by an Additional Guarantor

Schedule 3 Utilisation Request

Schedule 4 Mandatory Cost Formulae

Schedule 5 Form of Assignment and Assumption Certificate

THE SCHEDULE Commitment/rights and obligations to be transferred

Schedule 9 Existing Security Part A Existing Security to be discharged

Part B Permitted Existing Security

Schedule 10 Existing Indebtedness Part A Existing Indebtedness to be discharged

Part B Existing Indebtedness to remain

Schedule 11 Structure

Part A STRUCTURE BEFORE REORGANISATION

Schedule 12 Timetables

Schedule 13 Existing Bank Guarantees

SIGNATURES

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