DRAFT

FINANCIAL ASSISTANCE FACILITY AGREEMENT

between
EUROPEAN STABILITY MECHANISM
and
THE HELLENIC REPUBLIC
as the Beneficiary Member State
and
THE BANK OF GREECE
as Central Bank
and
HELLENIC FINANCIAL STABILITY FUND
as Recapitalisation Fund

TABLE OF CONTENTS
Clause

Page

1.

Definitions and Interpretation ........................................................................................... 2

2.

The Financial Assistance Facility and Specific Facilities ................................................. 6

3.

Variations, Supplements or Replacements to the General Terms ..................................... 7

4.

Variations, Supplements or Replacements to the Facility Specific Terms ..................... 15

5.

Entry into Force of Amendments .................................................................................... 17

6.

Execution of the Agreement ............................................................................................ 18

7.

Schedules ......................................................................................................................... 18

Schedule 1 List of Contacts ..................................................................................................... 21

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THIS FINANCIAL ASSISTANCE FACILITY AGREEMENT is made by and between:
(1)

EUROPEAN STABILITY MECHANISM, an intergovernmental organisation
established by the Treaty Establishing the European Stability Mechanism entered into
between the euro area Member States, having offices at 6a, Circuit de la Foire
Internationale, L-1347 Luxembourg, represented by Mr. Klaus Regling, Managing
Director ("ESM");

(2)

THE HELLENIC REPUBLIC, represented by Mr. Euclid Tsakalotos, Minister of
Finance, as the beneficiary member state (the "Beneficiary Member State");

(3)

THE BANK OF GREECE, represented by Mr. Yannis Stournaras, Governor of The
Bank of Greece (the "Central Bank"); and

(4)

THE HELLENIC FINANCIAL STABILITY FUND, represented by Mr. Aristides
Xenofos, CEO, and Mr. George Koutsos, Deputy CEO (the "Recapitalisation Fund"),

herein jointly referred to as the "Parties" and each of them a "Party".
PREAMBLE
WHEREAS
(A)

ESM was established by the Treaty Establishing the European Stability Mechanism
entered into between the euro area Member States (the "ESM Treaty") for the
purpose of mobilising funding and providing stability support for the benefit of ESM
Members which are experiencing, or are threatened by, severe financial problems, if
indispensable to safeguard the financial stability of the euro area as a whole and of its
member states.

(B)

ESM may grant financial assistance under financial assistance facility agreements by
way of loan disbursements under precautionary conditioned credit lines or enhanced
conditions credit lines, loans to ESM Members under macro-economic adjustment
programmes, facilities to finance the recapitalisation of financial institutions in a state
which is an ESM Member, facilities to finance direct recapitalisation of institutions in
a state which is an ESM Member, facilities for the purchases of bonds of an ESM
Member in the primary or secondary markets, all subject to strict conditionality
appropriate to the financial instrument(s) chosen (each such loan or disbursement
under such a financial assistance facility agreement being a "Financial Assistance").

(C)

ESM shall finance the making of Financial Assistance by issuing or entering into
bonds, notes, commercial paper, debt securities or other financing arrangements
("Funding Instruments") in order to fund Financial Assistance on a pooled basis or
on a dedicated matched-funding basis or out of the Liquidity Buffer, as appropriate.
The Funding Instruments shall be issued or entered into either on a stand-alone basis
or pursuant to one or more debt issuance programmes (each an "ESM Debt Issuance
Programme") in accordance with the ESM Borrowing Guidelines.

(D)

The Beneficiary Member State addressed a request for stability support in the form of
a loan facility to the Chairperson on 8 July 2015.

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(E)

The Beneficiary Member State has addressed a similar request for financial assistance
to the IMF in accordance with Recital (8) of the ESM Treaty. The definitive
Aggregate Financial Assistance Amount and Aggregate Loan Facility Amount to be
made available by ESM to the Beneficiary Member State shall be determined in light
of the amount of financial assistance to be provided by the IMF and shall be set out in
a written notice from ESM to the Beneficiary Member State, the Central Bank and the
Recapitalisation Fund and counter-signed by and on behalf of the Beneficiary
Member State, the Central Bank and the Recapitalisation Fund.

(F)

On [10 July 2015], the European Commission, in liaison with the ECB, assessed (i)
the existence of a risk to the financial stability of the euro area as a whole or of its
member states, (ii) whether the public debt of the Beneficiary Member State was
sustainable, and (iii) the actual or potential financing needs of the Beneficiary
Member State, and on the basis of such assessment the Board of Governors decided in
principle to grant stability support to the Beneficiary Member State in the form of a
Loan Facility.

(G)

On [19 August 2015], a Memorandum of Understanding was entered into between the
European Commission (on behalf of ESM and with the approval of its Board of
Governors) and the Beneficiary Member State. The financial assistance to be provided
to the Beneficiary Member State under this Agreement, including the Facility Specific
Terms shall be dependent upon compliance by the Beneficiary Member State with the
measures set out in the Memorandum of Understanding.

(H)

On [19 August 2015], the Board of Governors has adopted the proposal of the
Managing Director for a financial assistance facility agreement, including the
financial terms and conditions applicable thereto and the choice of instruments, and
the Board of Directors has approved this Agreement.

(I)

The release of Financial Assistance under this Agreement (other than the release of
the first Tranche of Financial Assistance under this Agreement which has already
been approved by the Board of Directors), including the Facility (as defined below),
shall, unless otherwise specified, be conditional upon the Board of Directors deciding,
on the basis of reports from the European Commission (in liaison with the ECB) in
accordance with Article 13(7) of the ESM Treaty, that the Beneficiary Member State
has complied with the conditionality attached to this Agreement, including
compliance with the measures set out in the Memorandum of Understanding.

(J)

It is acknowledged and agreed that the Central Bank is a party to this Agreement for
the purpose of receiving disbursements on behalf of the Beneficiary Member State.

(K)

Appropriate measures related to the prevention of, and the fight against, fraud,
corruption and other irregularities affecting any Financial Assistance shall be
provided for and implemented by the authorities of the Beneficiary Member State.

Now, therefore, the Parties hereto have agreed as follows:
1.

DEFINITIONS AND INTERPRETATION

1.1

Subject to Clauses 1.2 to 1.5 below, Clause 2 (Definitions and Interpretation) of the
General Terms shall apply to this Financial Assistance Facility Agreement.

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1.2

In this Financial Assistance Facility Agreement the following capitalised terms shall
have the following meanings:
"Aggregate Financial Assistance Amount" means up to EUR 86,000,000,000,
provided that the definitive Aggregate Financial Assistance Amount shall be
determined in light of the amount of financial assistance to be provided by the IMF
and shall be set out in a written notice from ESM to the Beneficiary Member State,
the Central Bank and the Recapitalisation Fund and counter-signed by and on behalf
of the Beneficiary Member State, the Central Bank and the Recapitalisation Fund.
"Aggregate Loan Facility Amount" means the Aggregate Financial Assistance
Amount.
"Applicable Facility" means the Facility specified in Clause 2.2 of this Financial
Assistance Facility Agreement.
"Assisted Institution" means an Institution which has been the beneficiary of
Financial Assistance provided by ESM for the purposes of recapitalising financial
institutions and/or covering bank resolution costs.
"Availability Period" means, in relation to the Facility, the period commencing on
and including the date when the Facility enters into force and ending on (and
including) the Availability Period Termination Date.
"Availability Period Termination Date" means 20 August 2018.
"Competent Authority" means, in relation to a Disbursement made for the purpose
of:
(a)

Financing the recapitalisation of financial institutions, either the ECB (acting
in its supervisory function under Regulation 1024/2013) or the Central Bank,
as applicable.

(b)

Covering bank resolution costs, the relevant Resolution Authority for that
bank resolution operation.

"Debt Agency" means the Public Debt Management Agency of the Beneficiary
Member State.
"Designated Euro Account" means, for any Disbursement made in cash, the euro
account of the Beneficiary Member State with the Central Bank having initially the
following account details:
BIC: [ ]
ΙΒΑΝ: [ ]
provided that the Designated Euro Account may be temporarily or permanently
changed by written notice by the Central Bank, as instructed by the Beneficiary
Member State, to ESM and the ECB advising of such change (with a copy addressed
to the Beneficiary Member State) at the latest two (2) Business Days prior to the
Disbursement Date for the first Disbursement to be made to the changed account.

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"Euro Summit Statement" means the statement of the Euro Summit dated
12 July 2015.
"EFSF Agreement" means any of:
(a)

the Master Financial Assistance Facility Agreement dated 15 March 2012
between EFSF, the Beneficiary Member State and the Central Bank, and the
Recapitalisation Fund as amended on 12 December 2012, 19 December 2014
and 27 February 2015;

(b)

the Bond Interest Facility Agreement dated 1 March 2012 between EFSF, the
Beneficiary Member State and the Central Bank, as amended and
supplemented by the amendment agreement signed on 12 December 2012;

(c)

the Private Sector Involvement – Liability Management Facility Agreement
dated 1 March 2012 between EFSF, the Beneficiary Member State and the
Central Bank, as amended and supplemented by the amendment agreement
signed on 12 December 2012;

(d)

the Co-financing Agreement dated 9 March 2012 between EFSF, the
Beneficiary Member State, Wilmington Trust (London) Limited as Bond
Trustee, the Central Bank as Common Paying Agent and as Bond Paying
Agent; and

(e)

any document or agreement arising out of or in connection with any agreement
listed in paragraphs (a) to (d) above or described in such agreement as forming
part of that agreement.

"Facility Specific Terms" means the standard facility terms which apply to a
particular category of facility as set out in the Standard ESM Facility Specific Terms
signed by the Parties for the purpose of authentication on the date hereof.
"General Terms" means the General Terms for ESM Financial Assistance Facility
Agreements signed by the Parties for the purpose of authentication on the date hereof.
"GLF" means the EUR 80,000,000,000 loan facility agreement dated 8 May 2010, as
amended on 14 June 2011, 27 February 2012 and 19 December 2012, between the
Beneficiary Member State, the Central Bank, the Kingdom of Belgium, Ireland, the
Kingdom of Spain, the French Republic, the Italian Republic, the Republic of Cyprus,
the Grand Duchy of Luxembourg, the Republic of Malta, the Kingdom of the
Netherlands, the Republic of Austria, the Portuguese Republic, the Republic of
Slovenia, the Slovak Republic, the Republic of Finland and KfW (acting in the public
interest, subject to the instructions of and with the benefit of the guarantee of the
Federal Republic of Germany) which provides stability support to Greece in an intergovernmental framework via pooled bilateral loans.
"Legal Officer" means the Legal Advisor to the State at the Ministry of Finance of
the Beneficiary Member State.
"Maximum Average Maturity" means 32.5 years.
"Minimum Cancellation Amount" means EUR 100,000,000.

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"Minimum Voluntary Prepayment Amount" means EUR 100,000,000.
"MoU" means the Memorandum of Understanding (as the same may be amended or
supplemented from time to time) entered into between the Commission on behalf of
ESM, the Beneficiary Member State and the Central Bank on [19 August 2015].
"New Greek Bonds" means the sovereign bonds issued by the Beneficiary Member
State in connection with the Voluntary Liability Management Transaction.
"Privatisation Fund" means an independent fund as described in the Euro Summit
Statement, to be established by the Beneficiary Member State to hold valuable Greek
assets and which will monetise such assets through privatisations and other means.
"Privatisation Fund Party" means the Privatisation Fund, if the Privatisation Fund is
a person, and/or any other person forming part of the corporate or governance
structure giving effect to the Privatisation Fund and/or to the elements of the Euro
Summit Statement that relate to the Privatisation Fund including any entity
established for the purpose of holding directly or indirectly any Capital Instruments
the acquisition price of which has been financed in whole or in part using Financial
Assistance provided under this Agreement.
"Recapitalisation Fund Boards" means each of the Executive Board and General
Council of the Recapitalisation Fund.
"Relationship Framework Agreement" means an agreement between the
Recapitalisation Fund and an Assisted Institution, setting out a framework in relation
to various aspects of the relationship between the parties to such agreement, including
in relation to the governance of such Assisted Institution and its implementation of the
Restructuring Plan relevant to it.
"Resolution Fund" means the national resolution fund or a national financing
arrangement established in accordance with the BRRD.
"Resolution Fund Laws" means the laws and/or regulations constituting the
Resolution Fund and/or setting out the parameters under which the Resolution Fund
may manage or participate in the re-organisation or resolution of Institutions, as such
laws or regulations may be amended, supplemented or replaced from time to time.
"Resolution Loan" means any loan or other arrangement under which the
Recapitalisation Fund lends or contributes funds to the Resolution Fund, and which is
made using Financial Assistance provided to the Recapitalisation Fund (whether
directly from ESM or indirectly via the Beneficiary Member State), for the purposes
of covering bank resolution costs.
"Stepped Disbursement Procedure" means the procedure set out in Clause 4.1(b)(ii)
of the Financial Assistance Facility Agreement, under which, following approval of a
Tranche or Sub-Tranche, Disbursements under that Tranche or Sub-Tranche may be
made available over an extended period subject to further conditions.
"Sub-Tranche" means, for any Tranche, a sub-total of that Tranche as set out in the
Acceptance Notice for that Tranche; a Sub-Tranche may be disbursed in one or more
Disbursements.

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"Voluntary Liability Management Transaction" means the voluntary liability
management transaction implemented by way of voluntary bond exchange entered
into between Greece and certain private sector investors as described in the statement
of the Euro Summit dated 26 October 2011.
1.3

The General Terms and, in respect of the Facility referred to in Clause 2.2 of this
Financial Assistance Facility Agreement, the relevant Facility Specific Terms shall be
incorporated into this Financial Assistance Facility Agreement subject to any
variation, supplement or replacement of (a) the General Terms set out in Clause 3 of
this Financial Assistance Facility Agreement or (b) the relevant Facility Specific
Terms set out in Clause 4 of this Financial Assistance Facility Agreement.

1.4

Clause 1.2 of the General Terms and Clause 4 of the Introductory Provisions to the
Facility Specific Terms shall apply in the event of any inconsistency or conflict
between this Financial Assistance Facility Agreement, the General Terms and the
Facility Specific Terms.

1.5

If the Board of Directors adopts new General Terms or Facility Specific Terms or
adopts any amendments to the General Terms or Facility Specific Terms, these shall
not be incorporated automatically into this Financial Assistance Facility Agreement.
If ESM and each of the Parties to this Financial Assistance Facility Agreement intend
to incorporate into this Financial Assistance Facility Agreement the new or amended
General Terms or Facility Specific Terms, this shall be effected by an amendment in
writing to this Financial Assistance Facility Agreement entered into pursuant to
Clause 5 of this Financial Assistance Facility Agreement (following the receipt of all
approvals required under the ESM Treaty to authorise such amendment).

2.

THE FINANCIAL ASSISTANCE FACILITY AND SPECIFIC FACILITIES

2.1

ESM makes available to the Beneficiary Member State under this Financial
Assistance Facility Agreement a financial assistance facility (the "Financial
Assistance Facility") in the Aggregate Financial Assistance Amount subject to the
terms and conditions of the MoU, the General Terms and the relevant Facility
Specific Terms. The Financial Assistance Facility may be made available by ESM to
the Beneficiary Member State by way of Financial Assistance. The aggregate
principal amounts outstanding of the Financial Assistance under all Facilities shall not
at any time exceed the Aggregate Financial Assistance Amount.

2.2

The Financial Assistance Facility is in the form of a Loan Facility having a maximum
Aggregate Loan Facility Amount equal to the Aggregate Financial Assistance
Amount, such Loan Facility being on the terms and subject to the conditions specified
in the Facility Specific Terms entitled "Section 1: Loan Facility: Facility Specific
Terms" (the "Facility"), provided that provisions from other Sections of the Facility
Specific Terms may apply as set out in this Agreement.

2.3

ESM shall not be authorised to provide any Financial Assistance under a Facility
other than in accordance with and upon the terms of the Agreement. The Beneficiary
Member State shall not be under any obligation to make a Request for Funds under a
Facility or to acknowledge any Acceptance Notice.

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2.4

The Preamble and the Schedules to each document which comprise part of the
Agreement do and shall hereafter form an integral part of the Agreement.

3.

VARIATIONS, SUPPLEMENTS OR REPLACEMENTS TO THE GENERAL
TERMS
The following variations, supplements or replacements shall apply in relation to the
General Terms:

3.1

3.2

General
(a)

Each reference to "the Applicable Facilities" in the General Terms shall be
read as a reference to "the Applicable Facility".

(b)

Each reference to "the Facilities" in the General Terms shall be read as a
reference to "the Facility".

Definitions
In Clause 2 (Definitions and Interpretation) of the General Terms:
(a)

the definition of “Acceptance Notice” shall be read as though, after the words
“setting out the amount and the provisional financial terms of the Financial
Assistance under the relevant Tranche”, it included the word “, Sub-Tranche”.

(b)

the definition of “Restructuring Plan” shall be read as though it comprised the
following:
“"Restructuring Plan" means a plan to restore the long-term viability of an
Assisted Institution after recapitalisation and restructuring, as approved by
DG Competition.”

(c)
3.3

the definition of “Tranche” shall be read as though, after the words “a Tranche
may be disbursed in one or more”, it included the words “Sub-Tranches or”.

Requests, Disbursements and Conditions to Disbursement
In addition to the provisions of Clause 5 (Requests, Disbursements and Conditions to
Disbursement) of the General Terms, the following provisions shall apply:
(a)

(Payment to certain accounts) Clause 5.12.1 of the General Terms shall be
read as though, after the words “transfer the Net Disbursement Amount on the
Disbursement Date to the Designated Euro Account of the Beneficiary
Member State,”, it included the words “or such other account as set out in the
relevant Acceptance Notice”.

(b)

(Custody fees) Clause 5.7 of the General Terms shall be read as though, after
the words “including any financing costs, margin, Negative Carry, losses,
costs, hedging costs”, it included the words “, custody or holding costs,”.

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3.4

Undertakings
(a)

In addition to the undertakings set out in Clause 6 (Representations,
Warranties and Undertakings) of the General Terms, until such time as all
commitments of ESM under the Agreement have ceased, all Financial
Assistance has been fully reimbursed and all interest and additional amounts
(if any) due under the Agreement have been fully paid, the following
undertakings shall apply:
(i)

(ii)

(Recapitalisation Fund Boards observer) The Beneficiary Member
State and the Recapitalisation Fund respectively undertake that in the
event that a disbursement of Financial Assistance is disbursed directly
to the Recapitalisation Fund (at the request of the Beneficiary Member
State) or the Beneficiary Member State uses a disbursement of
Financial Assistance to provide financing to the Recapitalisation Fund,
then, during the period when such Financial Assistance is outstanding
and has not been reimbursed, the Beneficiary Member State shall
procure and the Recapitalisation Fund shall permit ESM to appoint an
observer to observe the discussions of each Recapitalisation Fund
Board, provided that:
(A)

ESM’s observer shall not be required to observe every or any
discussion of either Recapitalisation Fund Board and may
select which discussions to observe in its discretion; and

(B)

such observer shall enter into a confidentiality undertaking with
the Recapitalisation Fund in the customary form (if any)
required by the Recapitalisation Fund.

(Changes to Recapitalisation Fund Laws) The Beneficiary Member
State undertakes that:
(A)

any changes which are needed to any Recapitalisation Fund
Laws or to other laws or regulations of the Beneficiary Member
State, in order to give full effect to the obligations of any of the
Beneficiary Member State and the Recapitalisation Fund under
the Agreement, the Resolution Fund under any Resolution
Loan, or to give full effect to the MoU, including, without
limitation, to:
(1)

provide security to ESM or to confer on ESM valid,
enforceable and irrevocable third party rights (if
applicable); or

(2)

perform
undertakings
undertakings),

(including

information

shall be promptly implemented following consultation with
ESM (in consultation with the Commission, ECB and, where
appropriate, the IMF); and

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(B)

other than as required:
(1)

under paragraph (A) boven; and/or

(2)

in order to give effect to any directive, regulation or
other law of the EU,

it shall not make any change to any Recapitalisation Fund Law
where such change to the relevant Recapitalisation Fund Law
adversely affects ESM’s rights or interests under the
Agreement.
(iii)

(iv)

(Assisted Institutions) The Recapitalisation Fund undertakes, in
relation to each Assisted Institution, to preserve and enforce the
Recapitalisation Fund’s rights, comply with its obligations and pursue
actions and defend claims in relation to or arising out of or in
connection with:
(A)

its shareholding in that Assisted Institution;

(B)

the Relationship Framework Agreement relevant to that
Assisted Institution (including, without limitation, in relation to
any powers which the Recapitalisation Fund may have to
review and change the boards and committees of that Assisted
Institution); and

(C)

any Subscription Agreement or Pre-Subscription Agreement
relevant to that Assisted Institution.

(Entry to Resolution Loans) The Recapitalisation Fund undertakes not
to enter into any Resolution Loan unless:
(A)

the terms of such Resolution Loan:
(1)

include ESM as a third party beneficiary with full rights
to enforce all rights and interest of the Recapitalisation
Fund and all covenants, undertakings, representations
and warranties of the Resolution Fund (or, if this is not
possible under the laws of the Beneficiary Member
State, provide rights of equivalent effect, provided that
this shall not reduce the obligations of the Beneficiary
Member State under Clause 3.4(a)(v) onder);

(2)

entitle the Recapitalisation Fund to assign any of its
rights and interest under the Resolution Loan to ESM
(as set out in Clause 3.5(b)(i) onder); and

(3)

include an undertaking from the Resolution Fund
substantially on the terms of Clause 6.2.6 of the General
Terms (provided that such undertaking shall refer to the
Resolution Fund where that Clause refers to the

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Recapitalisation Fund, and to resolution operations
where that Clause refers to recapitalisation operations).
(B)

(v)

it has provided a form of the Resolution Loan agreement to
ESM and ESM has confirmed that the form of Resolution Loan
agreement is satisfactory to ESM in relation to the aspects set
out in paragraphs (1) to (3) boven (inclusive).

(Changes to Resolution Fund Laws) The Beneficiary Member State
undertakes that:
(A)

any changes which are needed to any Resolution Fund Laws or
to other laws or regulations of the Beneficiary Member State, in
order to give full effect to the obligations of any of the
Beneficiary Member State and the Resolution Fund under any
Resolution Loan, including, without limitation, to:
(1)

perform its repayment and other obligations under any
Resolution Loan; and

(2)

ensure that contributions of Institutions to the
Resolution Fund may be directed specifically toward
meeting the Resolution Fund’s obligations under any
Resolution Loan,

shall be promptly implemented following consultation with
ESM (in consultation with the Commission, ECB and, where
appropriate, IMF); and
(B)

other than as required:
(1)

under paragraph (A) boven; and/or

(2)

in order to give effect to any directive, regulation or
other law of the EU,

it shall not make any change to any Resolution Fund Law
where such change to the relevant Resolution Fund Law
adversely affects ESM’s rights or interests under the
Agreement.
(vi)

(Privatisation Fund) Each of the Beneficiary Member State, the
Central Bank and the Recapitalisation Fund undertakes that, upon
request by ESM, it shall (and the Beneficiary Member State shall
procure that the Privatisation Fund will) promptly enter into such
amendments and/or supplements to this Agreement (or such other
arrangements) as ESM may reasonably require, to take account of the
legal and economic nature of the Privatisation Fund and give effect to
the Euro Summit Statement, including, without limitation:
(A)

to include as a party to this Agreement (or to other agreements
with ESM) any Privatisation Fund Party as ESM may require;

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(B)

to include in the Agreement obligations upon the Beneficiary
Member State, the Recapitalisation Fund, and/or such
Privatisation Fund Party as ESM may require, to make
repayment of Financial Assistance by or on behalf of the
Beneficiary Member State, out of or in connection with the
monetisation of the Privatisation Fund’s assets (through
privatisations and other means) or other revenue, and to provide
such other warranties, undertakings (including negative pledge
and information undertakings) or assume such other obligations
or provide such other rights as ESM may require to support its
position; and

(C)

to provide to ESM a guarantee and/or indemnity of the
Beneficiary Member State’s obligation to repay Financial
Assistance, from any Privatisation Fund Party that ESM may
require,

and each of the Beneficiary Member State, the Central Bank and the
Recapitalisation Fund further undertakes to procure that any
Privatisation Fund Party that ESM may require (in order to take
account in the Agreement of the Privatisation Fund) to:
(D)

become a party to this Agreement; and/or

(E)

assume obligations under this Agreement,

becomes a party and/or assumes such obligations in a form and
substance satisfactory to ESM.
(vii)

3.5

(Transfer of Institution shares) Each of the Beneficiary Member State
and the Recapitalisation Fund undertakes that the Recapitalisation
Fund will not transfer any Capital Instruments to any Privatisation
Fund Party without the prior written consent of ESM, in consultation
with the Commission, ECB, and where appropriate, IMF.

Security-related undertakings
(a)

(Provision of security) In Clause 6 (Representations, Warranties and
Undertakings) of the General Terms, Clause 6.4 shall not apply and the
following Clause shall apply instead:
“6.4

The Recapitalisation Fund undertakes, until such time as all principal
under the Agreement has been fully reimbursed and all interest and
additional amounts (if any) due under the Agreement have been fully
paid, that upon the Recapitalisation Fund obtaining title to any Capital
Instruments, and after consulting with the ESM, the Recapitalisation
Fund shall without delay proceed to take all necessary actions to grant
valid first ranking security over all of its rights and interest in and in
relation to such Capital Instruments. Such security shall be provided:

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(b)

6.4.1

as security for the performance of the Recapitalisation Fund’s
obligations under the Agreement; and

6.4.2

in a form and substance satisfactory to ESM, taking into
account the national legal framework.”

In addition to the undertakings set out in Clause 6 (Representations,
Warranties and Undertakings) of the General Terms, until such time as all
commitments of ESM under the Agreement have ceased, all Financial
Assistance has been fully reimbursed and all interest and additional amounts
(if any) due under the Agreement have been fully paid, the following further
undertakings shall apply:
(i)

(Assignment of rights under Resolution Loan) The Recapitalisation
Fund undertakes that, until such time as all principal under the
Agreement has been fully reimbursed and all interest and additional
amounts (if any) due under the Agreement have been fully paid, it shall
upon request by ESM assign or grant valid first ranking security to
ESM over any and all rights and interest it may have in relation to any
Resolution Loan and which ESM may request (or, if this is not
possible under the laws of the Beneficiary Member State, provide
rights of equivalent effect, provided that this shall not reduce the
obligations of the Beneficiary Member State under Clause 3.4(a)(v)
boven). Such assignment:
(A)

may include, without limitation, the right to demand and
receive repayment of such Resolution Loan;

(B)

may only be requested by ESM at a time at which amounts are
overdue and outstanding under this Agreement; and

(C)

shall be in a form and substance satisfactory to ESM, acting in
its discretion.

Amounts received by ESM as a result of such assignment or
arrangement shall be deemed to contribute to the satisfaction of
payment obligations of the Recapitalisation Fund under this Agreement,
in the amount so received.
3.6

Information Undertakings
In addition to the information undertakings set out in Clause 11 (Information
Undertakings) of the General Terms, until such time as all commitments of ESM
under the Agreement have ceased, all Financial Assistance has been fully reimbursed
and all interest and additional amounts (if any) due under the Agreement have been
fully paid, the following information undertakings shall apply (provided that each
undertaking set out in each of Clauses 3.6(a), (b) and (c) below shall apply only to the
extent that the person providing it is entitled (in any of its capacities) to obtain and
provide the information relevant to that undertaking):

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(a)

(Recapitalisation Fund – change of circumstance) Each of the Beneficiary
Member State and the Recapitalisation Fund undertakes, promptly upon
becoming aware of any change to any regulation, or of any occurrence or
circumstance (including any third party claim or liability) that could have a
material adverse effect on the ability of the Recapitalisation Fund to perform
its obligations under this Agreement, the MoU, any Subscription or PreSubscription Agreement, or any other related agreement, or could otherwise
cause an Event of Default, to inform ESM of such circumstances and provide
to ESM such further details of them as ESM may request.

(b)

(Assisted Institution-related undertakings) Each of the Beneficiary Member
State and the Recapitalisation Fund undertakes, promptly upon becoming
aware (as a result of performing its obligations as set out in the laws or
regulations of the Beneficiary Member State or a Relationship Framework
Agreement or otherwise conducting its day to day business) of any:
(i)

circumstances or events which have (or which could potentially have)
a material adverse effect on an Assisted Institution’s financial situation
or on its ability to perform its obligations under the relevant
Relationship Framework Agreement or the relevant Subscription
Agreement;

(ii)

material breach by an Assisted Institution of its obligations under the
Restructuring Plan, Relationship Framework Agreement or any
Subscription Agreement or Pre-Subscription Agreement relevant to
that Assisted Institution;

(iii)

fraudulent or criminal activities within an Assisted Institution, its
subsidiaries and affiliates, or among the staff and/or members of the
board of directors and/or senior managers of such Assisted Institution
and its subsidiaries and affiliates; and

(iv)

material litigation, arbitration, regulatory or administrative proceedings
which are taking place, pending or threatened against or involving the
Recapitalisation Fund or any Assisted Institution,

to inform ESM of such circumstances and provide to ESM such further details
of them as ESM may request, to the extent not prohibited by law or otherwise
privileged.
(c)

(Reporting) Each of the Beneficiary Member State and the Recapitalisation
Fund further undertakes to provide ESM with any information reasonably
required by ESM in respect of the Recapitalisation Fund or any Assisted
Institution (to the extent not prohibited by law or otherwise privileged),
including, but not limited to information regarding the Capital Instruments and
results of any inspections or conclusions of any reports conducted or requested
by any party undertaking such inspections or reports in relation to such
Assisted Institution. Alternatively, the Beneficiary Member State and/or the
Recapitalisation Fund may procure that each Assisted Institution provide such
information directly to ESM.

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(d)

(Issue of Capital Instruments) Promptly upon taking ownership of any
Capital Instruments, the Recapitalisation Fund undertakes to inform ESM in
writing that it has so taken ownership, and it separately undertakes to provide
ESM with details of such Capital Instruments upon request from ESM.

(e)

(Breach of Resolution Loan) The Recapitalisation Fund undertakes to provide
to ESM:

(f)

(i)

promptly upon become aware of any failure to make payment when
due or of any other breach of obligation under any Resolution Loan,
the details of such failure to pay or other breach; and

(ii)

any information relating to such Resolution Loan as ESM may request
from time to time.

(Information for board observer) The Recapitalisation Fund undertakes to
provide to ESM:
(i)

the calendar of meetings and discussions of the board of directors (or
equivalent body) of the Recapitalisation Fund; and

(ii)

the proposed agenda of each such meeting or discussion,

promptly upon any such document being prepared, and the Recapitalisation
Fund also undertakes to circulate any such document to ESM’s observer (as
set out in Clause 3.4(a)(i) boven) at the same time that such document is
circulated to members of each Recapitalisation Fund Board.
(g)

3.7

(General information) Clause 11.5 of the General Terms shall apply as
though it did not include the words “If Financial Assistance is provided in the
form of a Financial Institution Recapitalisation Facility”.

Events of Default
(a)

(b)

In addition to the Events of Default set out in Clause 10 (Events of Default) of
the General Terms, each of the following shall constitute Events of Default:
(i)

(New Greek Bonds) ESM sends the Beneficiary Member State a
declaration of default in circumstances where any payment default has
occurred under any series of New Greek Bonds or any series of New
Greek Bonds are the subject of a declaration of default.

(ii)

(GLF) ESM sends the Beneficiary Member State a declaration of
default in circumstances where the GLF is the subject of a declaration
of default.

(EFSF Facilities) Clause 10.1.5 of the General Terms shall be read as if, after
the words “any agreement for the provision of a loan or any other financial
assistance between the Beneficiary Member State, the Central Bank and ESM,
EFSF” it included the words “, including, without limitation, any EFSF
Agreement”.

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3.8

Notice by electronic means
In Clause 13 (Notices) of the General Terms, Clause 13.2 shall be read as though,
after the words “In case of urgency, they can be given by fax, SWIFT message” it
included the words “, electronic mail”.

3.9

4.

Guarantee and Indemnity
(a)

In Clause 6 (Representations, Warranties and Undertakings) of the General
Terms, Clause 6.2.14 shall be read as though, after the words “(other than
under a DRI Facility)”, it included the words “or to cover resolution costs”.

(b)

In Clause 14 (Guarantee and Indemnity) of the General Terms, each of
Clauses 14.2.1, 14.2.2 and 14.2.3 shall be read as though, after the words
“(including the Financial Institution Recapitalisation Facility)”, it included
the words “or to cover resolution costs”.

VARIATIONS, SUPPLEMENTS OR REPLACEMENTS TO THE FACILITY
SPECIFIC TERMS
The following variations, supplements or replacements shall apply in relation to
Section 1 of the Facility Specific Terms:

4.1

Requests, Disbursements and Conditions to Disbursements
(a)

(Disbursement procedure - Non-recapitalisation/resolution Disbursements)
Clause 4 of Section 1 of the Facility Specific Terms shall be read as if, after
the words “shall apply to this Loan Facility” it included the words “in relation
to Tranches, Sub-Tranches and Disbursements made other than for the
purposes of recapitalising financial institutions or covering bank resolution
costs.”

(b)

(Disbursement procedure - Recapitalisation/resolution Disbursements) In
addition to the provisions of Clause 4 of Section 1 of the Facility Specific
Terms, the following provisions shall apply to the Facility.
Where a Tranche, Sub-Tranche or Disbursement is requested for the purposes
of recapitalising financial institutions or covering bank resolution costs,
Clause 5 (Requests, Disbursements and Conditions to Disbursement) of the
General Terms shall apply to each relevant Request for Funds and each such
Tranche, Sub-Tranche or Disbursement, provided that:
(i)

(Normal disbursements) If the relevant Request for Funds does not
specify a Stepped Disbursement Procedure for any Tranche, SubTranche or Disbursement requested under that Request for Funds, then
Clause 4 of Section 4 of the Facility Specific Terms shall also apply to
such Tranche, Sub-Tranche or Disbursement.

(ii)

(Stepped disbursements) If the relevant Request for Funds specifies a
Stepped Disbursement Procedure for any Tranche, Sub-Tranche or
Disbursement requested under that Request for Funds, then, in relation
to such Tranche, Sub-Tranche or Disbursement:

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(A)

Clause 5.4 of the General Terms shall be read as though, after
the words “If the conditions in Clause 5.3 (or, in the case of a
DRI Facility, the conditions in Clause 5.3.1 to Clause 5.3.6)”, it
included the words “(but excluding the conditions in Clauses
5.3.5)”;

(B)

Clause 5.3.6 shall be read as though it comprised only the
words “the Board of Directors having approved the Tranche or
Sub-Tranche”;

(C)

In respect of a particular Disbursement, Clause 5.6 of the
General Terms shall not apply until:
(1)

ESM has received a request in writing from the
Beneficiary Member State to disburse that
Disbursement under a Tranche or Sub-Tranche and
specifying its amount, which is supported by written
confirmation of its details from the Competent
Authority;

(2)

ESM has received the report described in Clause 4.1 of
Section 4 of the Facility Specific Terms in respect of
that Disbursement;

(3)

the Board of Directors has approved that Disbursement,
and in considering whether to do so, has applied the
principles set out in Clause 4.1 of Section 4 of the
Facility Specific Terms;

(4)

Clauses 4.2, 4.3 and 4.4 of Section 4 of the Facility
Specific Terms have been satisfied;

(5)

Clause 4.5 of Section 4 of the Facility Specific Terms
shall apply;

(6)

Such other conditions as are set out in the Acceptance
Notice for the relevant Tranche or Sub-Tranche have
been satisfied; and

(7)

ESM, the Recapitalisation Fund or Resolution Fund (as
applicable) and any Institutions that will benefit from
the Disbursement have entered into a Subscription
Agreement or Pre-Subscription Agreement in a form
and substance satisfactory to ESM,

provided that the Board of Directors may decide that any of the
requirements set out at paragraphs (2) to (7) (inclusive) boven
shall not apply in respect of a particular Tranche, Sub-Tranche
or Disbursement and this may be reflected in the relevant
Acceptance Notice,
and provided further that, in relation to each of paragraphs (i) and (ii) boven:

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4.2

(iii)

Clause 4.1(b) of Section 4 of the Facility Specific Terms shall not
apply;

(iv)

in the case of a Disbursement made to cover bank resolution costs,
Clause 4.1 of Section 4 of the Facility Specific Terms shall not apply
and Clause 4.3 of Section 4 of the Facility Specific Terms shall be read
as though the reference to bank stress tests instead referred to a
valuation of the relevant Institution;

(v)

in the case of a Disbursement made to finance recapitalisation of a
financial institution, Clause 4.3 of Section 4 of the Facility Specific
Terms shall be read as though the reference to the Commission being
satisfied with bank stress tests instead referred to the Competent
Authority being so satisfied; and

(vi)

in all cases and notwithstanding any other provision of this Agreement,
the total amount of Financial Assistance used to finance the
recapitalisation of financial institutions or to cover bank resolution
costs under this Agreement may not exceed EUR 25,000,000,000
unless otherwise agreed by the Board of Governors.

Representations, Warranties and Undertakings for recapitalisation and
resolution operations
In addition to the provisions of Clause 6 (Representations, Warranties and
Undertakings) in Section 1 of the Facility Specific Terms, the provisions of Clause
5.2 (Representations, Warranties and Undertakings) of Section 4 of the Facility
Specific Terms shall apply, provided that references to “Financial Institution
Recapitalisation Facility” shall be read as references to the Loan Facility.

4.3

Repayment, Early Repayment, Mandatory Repayment and Cancellation
In addition to the provisions of Clause 7 (Repayment, Early Repayment, Mandatory
Repayment and Cancellation) in Section 1 of the Facility Specific Terms, the
provisions of Clause 7 (Repayment, Early Repayment, Mandatory Repayment and
Cancellation) of Section 4 of the Facility Specific Terms shall apply, provided that:

5.

(a)

references to “Financial Institution Recapitalisation Facility” shall be read as
references to the Loan Facility; and

(b)

Clause 7.2 of Section 4 of the Facility Specific Terms shall be read as though,
after the words “if at the end of the Availability Period or such earlier date
specified in the Financial Assistance Facility Agreement” it included the
words “, or the Acceptance Notice for such Financial Assistance”.

ENTRY INTO FORCE OF AMENDMENTS
Any term of this Financial Assistance Facility Agreement may be amended or waived
only by an agreement in writing signed by ESM (following the receipt of all approvals
required under the ESM Treaty to authorise such amendment), the Beneficiary
Member State and each of the other Parties hereto. Following its signature by all
Parties, the entry into force of any amendment to this Financial Agreement which

- 17 -

adds a new Facility and makes additional or replacement Facility Specific Terms
applicable shall be subject to the receipt by ESM of the legal opinion(s) described in
Clause 4.1 of the General Terms in relation to the amendment of this Financial
Assistance Facility Agreement and incorporation of such additional or replacement
Facility Specific Terms and, in the case of a DRI Facility, to the conditions specified
under Clause 4.7 of Section 7 of the Facility Specific Terms.
6.

EXECUTION OF THE AGREEMENT
This Agreement and its relevant Schedules (if applicable) shall be executed by each
Party in three (3) originals in the English language, each of which shall constitute an
original instrument.

7.

SCHEDULES
The Schedule(s) to this Agreement shall constitute an integral part hereof and as of
the date of this Agreement comprise:
Schedule 1:

List of Contacts

- 18 -

Executed in [Athens] on [19 August 2015] and in Luxembourg on [19 August 2015].

EUROPEAN STABILITY MECHANISM

________________________________
Represented by Klaus Regling, Managing Director

THE HELLENIC REPUBLIC

________________________________
Represented by Euclid Tsakalotos, Minister of Finance

THE BANK OF GREECE

________________________________
Represented by Yannis Stournaras, Governor of The Bank of Greece

- 19 -

THE HELLENIC FINANCIAL STABILITY FUND

________________________________
Represented by Aristides Xenofos, CEO

________________________________
Represented by George Koutsos, Deputy CEO

- 20 -

Schedule 1
List of Contacts

[ ]

- 21 -