CLIFFORD CHANCE

DEUTSCHLAND LLP

1.

Definitions and Interpretation

2.

The Facility

3.

Utilisation of the Facility

4.

Interest

5.

Market Disruption

6.

Repayment

7.

Voluntary Prepayments

8.

Cancellation

9.

Blue Mill Investment Accounts

10.

Illegality

11.

Increased Costs

12.

Taxes

13.

Mitigation

14.

Representations And Warranties

15.

Financial Calculations (Wirtschaftlichkeitsberechnungen) and Financial Covenants

16.

Information Requirements

17.

Inspection Rights

18.

Covenants

19.

Insurances

20.

Events of Default

21.

Agent, Arranger and Lenders

22.

Advisers

23.

Fees

24.

Costs and Expenses

25.

Indemnity and Breakage Costs

26.

Set-Off

27.

Pro-Rata Sharing

28.

Assignments and Transfers

29.

Sub-Participations

30.

Calculations and Evidence of Debt

31.

Non-Applicability of § 181 BGB

32.

Form Requirements and Amendments

33.

Conditions of the State Guarantee

34.

Remedies and Waivers, Cumulative Rights, Partial Invalidity

35.

Notices

36.

Governing Law

37.

Jurisdiction

38.

Counterparts

39.

Conclusion of the Agreement (Vertragsschluss)

SCHEDULE 1 Drawdown Request

SCHEDULE 2 Conditions for the First Drawdown

SCHEDULE 3 General Drawdown Conditions

SCHEDULE 4 Lenders and Commitments

SCHEDULE 5 Mandatory Cost Formulae

SCHEDULE 6 State Guarantee

SCHEDULE 7 Minimum Insurance Schedule

SCHEDULE 8 Minimum Insurance Operation Period Schedule

SCHEDULE 9 Sample Table of Content Regarding Quarterly Construction Progress Reports

SCHEDULE 10 Transfer Certificate

SCHEDULE 11 Broker’s Letter of Undertaking

SCHEDULE 12 Investment and Financing Plan

SCHEDULE 13 Shareholders’ Undertaking Agreement

ZELLSTOFF STENDAL GMBH, a limited liability company incorporated, organized and validly existing under the laws of the Federal Republic of Germany, having its office at Goldbecker Strasse 1, 39596 Arneburg, Federal Republic of Germany and registered in the commercial register of the local court (Amtsgericht) of Stendal, number HRB 2446 (the “Borrower”);

UNICREDIT BANK AG, a stock corporation incorporated, organised and validly existing under the laws of the Federal Republic of Germany, having its office at Arabellastrasse 14, 81925 München, Federal Republic of Germany and registered in the commercial register (Amtsgericht) of Munich, number HRB 42148 (the “Arranger”);

UNICREDIT BANK AG (the “Agent” and “Security Agent”);

UNICREDIT BANK AG (the “Original Lender 1”); and

IKB DEUTSCHE INDUSTRIEBANK AG (the “Original Lender 2” and together with the Original Lender 1 the “Original Lenders”)

The Borrower is a project company which was created in 1996 as a limited liability company (Gesellschaft mit beschränkter Haftung) in connection with the financing, construction and operation of a 552,000 tonnes per annum bleached softwood kraft pulp mill located in Arneburg, Sachsen-Anhalt, Federal Republic of Germany (the “Pulp Mill Project”).

In order to finance the Pulp Mill Project, the Borrower entered into a Euro 827,950,000 facility agreement with the Original Lender 1 (as amended from time to time, the “Pulp Mill Facility Agreement” and together with this Agreement the “Facility Agreements”), which was later syndicated to Norddeutsche Landesbank Girozentrale, Landesbank Baden-Württemberg, Bank of Scotland PLC, DZ Bank AG, National Bank of Greece, S.A., London Branch, HSH Nordbank AG and Banca Monte dei Paschi di Siena S.p.A., London Branch as lenders (the “Pulp Mill Lenders”) and which is, among others, secured by guarantees of the Federal Republic of Germany and the State of Sachsen-Anhalt in favour of the Pulp Mill Lenders (the “Pulp Mill Guarantees”).

Following completion of the Pulp Mill Project, the production capacity of the plant has been increased to 620,000 tonnes per annum.

In addition to the investment in further production capacity increase, the Borrower built in 2012 a further 40 MW steam turbine (the “Turbine”) in order to ensure the necessary conversion of high-steam pressure into low-pressure steam, heat and electrical power (together “Project Blue Mill” and together with the Pulp Mill Project the “Projects”).

Mercer International, Inc., a company incorporated under the laws of the state of Washington, United States of America (“Mercer International”) and E&Z (as defined below) have agreed to act as sponsors of Project Blue Mill.

The State of Sachsen-Anhalt has agreed to guarantee 80% of the claims of the Lenders in connection with the financing of Project Blue Mill by issuing guarantees in favour of the Lenders which will be administered by PWC (as defined below).

It is the common understanding of the Lenders and the Pulp Mill Lenders that the Agent and the Security Agent for this Agreement and the Pulp Mill Facility Agreement shall be the same entities.

The parties have agreed to enter into a further amendment and restatement agreement dated       September 2014 in order to, amongst others, implement previous changes to this Agreement in a consolidated amended version of this Agreement.

DEFINITIONS AND INTERPRETATION

Definitions

(in relation to any date for payment or purchase of a sum denominated in a currency other than the euro) a day on which banks are open for general business in the financial centre of the country of such currency; or

(in relation to any date for payment or purchase of a sum denominated in the euro) any TARGET Day.

Any aggregate Project Costs over and above those set out in the Investment and Financing Plan; and

any shortfall in Government Grants definitely determined except if and to the extent that at the same time the funding of the aggregate Project Costs through the remaining Overall Funding Sources (Gesamtfinanzierungsquellen) remains secured. For the avoidance of doubt, a shortfall in Government Grants does not prevent the Borrower from drawing down the Facility in full as long as the funding of the aggregate Project Costs is secured by the remaining Overall Funding Sources (Gesamtfinanzierungsquellen).

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 Reuters screen or any other page it is replaced by at 11.00am; and

if the Agent is unable to access the relevant screen rate or if a rate is not available on the relevant screen for the period, the arithmetic mean (rounded upwards to 4 decimal places) of the rates (as notified to the Agent) at which each of the Reference Banks was offered by prime banks in the European interbank market deposits in euro in such amount and for such period as of 12.00 noon,

the business, operation, property and financial condition of the Borrower and as a result, the ability of the Borrower to perform any of its obligations under the Financing Documents; or

the validity or enforceability of the Financing Documents.

Shareholder Contributions;

Government Grants;

Cash Flow Contributions;

the Facility.

Interpretation

if any such numerically corresponding day is not a Business Day, such period shall end on the immediately succeeding Business Day in that calendar month or, if none, it shall end on the immediately preceding Business Day; and

if there is no numerically corresponding day in that next succeeding calendar month, that period shall end on the last Business Day in that next succeeding calendar month,

which is controlled, directly or indirectly, by the first-mentioned company or corporation and, for these purposes, a company shall be treated as being controlled by a company if that other company is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;

more than half the issued share capital or partnership interest of which is beneficially owned, directly or indirectly, by the first-mentioned company; or

which is a subsidiary of another subsidiary of the first mentioned company;

Currency Symbols

Agreements and Statutes

this Agreement or any other agreement or document is construed as a reference to this Agreement or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended, varied, novated or supplemented and in case an agreement has been terminated, the latest version of such agreement; and

a statute or treaty is construed as a reference to such statute or treaty as the same may have been, or may from time to time be, amended or, in the case of a statute, re-enacted.

Headings

Singular and Plural

Time

Language

THE FACILITY

Granting of the Facility

Availability of Facility

Borrower’s Obligations

The obligations of the Borrower to the Agent and each Lender hereunder are created vis-à-vis each of them as separate and independent obligations (Teilschuldnerschaft).

Unless otherwise provided for under the Financing Documents, the Agent and each Lender may separately enforce their rights hereunder.

Lender’s Obligations

Purpose and Application

The Facility is intended to partly finance Project Blue Mill in accordance with the Investment and Financing Plan.

Without affecting the obligations of the Borrower, neither the Arranger, the Agent, the Security Agent or the Lenders nor any of them is required to monitor or verify the application of any amount borrowed pursuant to this Agreement. The Agent will however require from the Borrower the documents regarding the application of funds in accordance with Clause 3.4.3 (Drawdown Restrictions).

Cash Advances

Substitute Lenders

UTILISATION OF THE FACILITY

Delivery of Drawdown Request

Drawdown Details

the proposed Drawdown Date which must be a Business Day within the Availability Period;

the term of the initial Interest Period;

the amount of any Advance requested which, if it is not for the whole undrawn amount, must be a minimum amount of EUR 1 million or any larger amount which is an integral multiple of EUR 500,000; and

the specific purposes for which the Advance will be used by the Borrower.

Drawdown Conditions

The Borrower may only deliver a Drawdown Request to the Agent if:

the conditions precedent listed in Schedule 2 (Conditions for the First Drawdown) are met with respect to the first Advance and the Agent has notified the Borrower and the Lenders that it has received all of the documents and other evidence to be delivered in respect of such conditions precedent and each is in form and substance satisfactory to the Agent (and the Agent undertakes to promptly after receipt of such documents and evidence notify the Borrower that such conditions are met or inform the Borrower of the reasons they are not met);

the conditions precedent listed in Schedule 3 (General Drawdown Conditions) are met with respect to any Advance; and

Without prejudice to Clause 32.3 (Form Requirements and Amendments), the Agent may waive each drawdown condition with the prior consent of the Lenders upon written request by the Borrower to the Agent.

Drawdown Restrictions

Drawings will only be permitted to the extent that the sum of

the Cash Flow Contributions;

the Shareholder Contributions;

the Government Grants (as available from time to time); and

the amount locked-up on the Debt Service Reserve Account pursuant to clause 11.5 of the Pulp Mill Facility Agreement

Drawings will further only be permitted if:

on the Drawdown Date no Event of Default or Potential Event of Default has occurred and remains uncured or unwaived or would occur as a result of the making of the Advance to be drawn down;

the representations to be made by the Borrower remain true in all respects; and

the Shareholders have made the Shareholder Contributions (except for the Shareholder Cost Overrun Commitment, unless this has been requested by the Agent) and paid the respective amounts into the Blue Mill Investment Account.

Drawings in respect of Project Costs (other than Late Costs) will further only be permitted against submission to the Agent of a list of all invoices (as approved by the Technical Adviser) as well as all detailed documents which the Agent requires in relation to any item listed thereon evidencing the Project Costs for which the Borrower has delivered a Drawdown Request in accordance with Schedule 2 (Conditions for the First Drawdown), paragraphs 6(a) and (b). Upon receipt of the relevant invoice, the Borrower shall deliver to the Agent without undue delay a list of any Project Costs not previously submitted, as well as those detailed documents which the Agent has requested in relation to any item listed thereon.

A drawing in respect of Late Costs will further only be permitted against submission to the Agent of a summary detailing the expected cost items (as approved by the Technical Adviser).

Participation of the Lenders in Advances

Each Lender will contribute to each Advance made hereunder in the proportion of its Commitment to the total Commitments of all the Lenders at the relevant time.

The Agent shall no later than three (3) Business Days prior to the Drawdown Date notify each Lender of the amount of the Advance, the Drawdown Date, the Interest Period and such Lender’s participation in the Advance.

Upon receipt of the written notice pursuant to the previous paragraph, each Lender will, by no later than 10:00 a.m. on the Drawdown Date, credit the account in the name of the Agent with UniCredit Bank AG, which has been notified by the Agent to Lenders at the latest three (3) Business Days prior to such Drawdown Date, with its participation in the Advance and the Agent will, with same day value as the Drawdown Date, transfer the amount of the Advance to the Blue Mill Investment Account.

INTEREST

Interest Period

Prior to the First Repayment Date

Interest Periods will be of one (1), three (3) or six (6) months duration at the option of the Borrower provided that any Interest Period relating to an Advance made under the Facility commencing at the same time as or during another Interest Period relating to an Advance made shall be of such duration that it shall end on the same date as that other Interest Period;

an Interest Period which would otherwise extend beyond the First Repayment Date shall end on the First Repayment Date; and

if the Borrower fails to give notice of an Interest Period, its term will be one (1) month, or any shorter period as the Agent determines to be necessary to comply with the requirements pursuant to Clauses 4.1.5.

Following the First Repayment Date, Interest Periods commencing on or after the First Repayment Date relating to Advances made will end on the next following Repayment Date, thus in each case (other than each first Interest Period which shall start on the respective Drawdown Date and end on the first Repayment Date thereafter) being of six (6) months duration.

The Borrower will, where appropriate, give irrevocable notice to the Agent of the chosen Interest Period in the relevant Drawdown Request or, if the Advance has already been made, in an irrevocable written notice to be received by the Agent no later than 11:00 a.m. on the fifth (5th) Business Day prior to the commencement of that Interest Period. At the latest three (3) Business Days prior to the commencement of the Interest Period chosen by the Borrower, the Agent will give notice to the Lenders and the Guarantors of any notice given by the Borrower pursuant to this Clause 4.1.3.

The first Interest Period with respect to an Advance will commence on its Drawdown Date, and each subsequent Interest Period will commence on the last day of its preceding Interest Period.

If two or more Interest Periods relating to Advances end at the same time, then, on the last day of those Interest Periods, the Advances to which they relate will be consolidated into and treated as a single Advance.

The Agent will notify the Borrower and the Lenders of the duration of each Interest Period in respect of each Advance promptly after having determined the same.

Interest Rate

Payment of Interest

Notification

Default Interest

If the Borrower fails to pay any amount (other than interest) payable by it hereunder on its due date, interest will accrue on the overdue amount from the due date up to the date of actual payment at a rate which is 1 per cent higher than:

in relation to an amount becoming due and payable before expiration of the Interest Period applicable thereto, for the period until the expiration of such Interest Period the rate applicable to such overdue amount immediately prior to the due date; and

in all other cases, the Interest Rate on the most recent Quotation Date for such periods as the Agent may designate, provided, however, that such Interest Period will not exceed three (3) months.

If the Borrower fails to pay any interest payable by it hereunder on its due date, it will pay, at the time of payment of all arrears of interest, lump sum damages (pauschalierter Schadensersatz) on the overdue amount from the due date up to the date of actual payment at a percentage rate which is 1 per cent. higher than the interest rate which would have been payable if the overdue amount had, during the period of non-payment, constituted an Advance for successive Interest Periods, each of a duration selected by the Agent (acting reasonably).

In the case of lump sum damages, the Borrower shall be free to prove that no damages have arisen or that damages have not arisen in the asserted amount and any Finance Party shall be entitled to prove that further damages have arisen. Any interest or lump sum accruing under this Clause 4.5 shall be immediately payable by the Borrower on demand by the Agent.

The right of the Lenders to compensation for any loss arising from the default remains unaffected. Payments made under Clause 4.5.2 will however be deducted from such compensation.

The Agent will promptly notify the Borrower and the Lenders of the determination of any default interest. Each determination by the Agent will, in the absence of a manifest error, be conclusive and binding on the Borrower and the Lenders.

MARKET DISRUPTION

Market Disruption

EURIBOR is to be determined by reference to Reference Banks and at or about 11.00 a.m. on the Quotation Date for the relevant Interest Period none or only one of the Reference Banks supplies a rate for the purpose of determining the EURIBOR for the relevant Interest Period; or

before the close of business in Frankfurt am Main on the Quotation Date for such Advance, the Agent has been notified by Lenders to whom in aggregate 50 per cent. or more of the principal of the relevant Advance is owed that EURIBOR does not, by reason of circumstances affecting the inter-bank market generally, accurately reflect the cost to them of obtaining matching deposits for their participation in such Advance,

Alternative Basis of Interest

If Clause 5.1.1 (Market Disruption) applies, the applicable Interest Period will be one (1), three (3) or six (6) month(s) at the option of the Agent or such shorter period to end on any Repayment Date, and the interest rate applicable will be the weighted average of the interest rates notified by the Lenders to the Agent on or before the last day of the relevant Interest Period to reflect the cost of funding (regardless from what sources a Lender may reasonably select to fund its participation) their participation in the relevant Advance, expressed as a percentage per annum plus the Margin applicable to such Advance and Mandatory Costs, if any.

If Clause 5.1.2 (Market Disruption) applies, the interest rate applicable to the affected Lenders’ participation in the relevant Advance shall be:

in respect of each Lender having notified the Agent in accordance with Clause 5.1.2 (Market Disruption) the interest rate notified by it to the Agent pursuant to the principles as set out in Clause 5.2 (Alternative Basis of Interest); and

in respect of all other Lenders EURIBOR and the Margin applicable to such Advance and Mandatory Costs, if any.

Negotiations

Prepayment

REPAYMENT

General

First Repayment

Repayment Schedule

The repayment instalments set out in the right column of the Repayment Schedule will be reduced pro rata by the Agent following the making of any mandatory prepayments according to this Agreement (or in case the Facility should not be fully drawn by the Final Availability Date) and will be submitted to the Borrower and the Lenders upon its amendment.

As of (and including) the First Repayment Date, the Repayment Schedule shall be as follows:

Deferred Amortisation

No Other Repayments

VOLUNTARY PREPAYMENTS

General

prepay any part of the amount outstanding on the last day of an Interest Period without Breakage Costs, subject to a minimum prepayment amount of EUR 1 million or the total outstanding amount; and

at any time prepay the amount outstanding fully or partially, including Breakage Costs.

Scope of Prepayment

Notice of Prepayment

No Other Voluntary Prepayments

No Re-Borrowing

CANCELLATION

General

The Borrower may, by giving to the Agent not less than fifteen (15) Business Days’ prior written notice to that effect, without premium or penalty, cancel the whole or any part of the undrawn Commitments, provided that such cancellation would not endanger the financing of Project Blue Mill as a whole, in particular the Government Grants.

Any notice of cancellation given by the Borrower pursuant to this paragraph will be irrevocable and specify the date upon which such cancellation is to be made and the amount of such cancellation.

End of Availability Period; End of Period for first Advance

No Re-borrowing

Reduction of Commitments

BLUE MILL INVESTMENT ACCOUNTS

The Borrower will open an account with the Agent, such account to be pledged by the Borrower pari passu in favour of the Lenders and the Pulp Mill Lenders.

The Blue Mill Investment Account will be used to deposit (and the Borrower shall be obliged to procure that the following amounts are so deposited on the Blue Mill Investment Account as and when due)

amounts which are provided by the Shareholders as Shareholder Loans and Repayable Shareholder Loans in connection with Project Blue Mill;

the Shareholder Cost Overrun Commitment upon first demand of the Agent;

any insurance proceeds allocated to Project Blue Mill prior to Final Completion;

any Government Grants;

the Cash Flow Contributions;

any amounts transferred from the Debt Service Reserve Account; and

any amounts drawn under the Facility

Save as otherwise specifically provided herein, the Borrower is entitled to apply any moneys standing to the credit of the Blue Mill Investment Account exclusively, and, in the case of a continuing Event of Default, only with the Agent’s prior written consent, in or towards payment of all due and payable Project Costs.

Following completion of Project Blue Mill (i.e. once all construction works have been completed and no further payments are – in the opinion of the Agent – required to be made by the Borrower), any remaining amount standing to the credit of the Blue Mill Investment Account will be transferred to the Proceeds Account.

ILLEGALITY

the Commitment of such Lender under the Facility will forthwith be reduced to zero; and

the Borrower will prepay to such Lender its participation in any relevant Advances together with accrued interest and all other amounts owing to such Lender hereunder on the next following date on which interest is payable on the relevant Advance, or on such earlier date as such Lender certifies to be necessary having regard to the relevant circumstances.

INCREASED COSTS

Increased Costs

such Lender or any of its affiliated companies incurs a cost in relation to such Lender being a party to and/or performing its obligations and/or exercising its rights under this Agreement;

the cost to such Lender of making available or maintaining or funding its participation in any Advance or maintaining its Commitment is increased;

any sum received or receivable by such Lender under or in connection with this Agreement is reduced;

the effective return of such Lender in connection with this Agreement is reduced; or

such Lender becomes liable to make any payment on account of tax or otherwise (except for taxes imposed on its net income or net worth) or is required to forego any interest or other return on or calculated by reference to the amount of any sum received or receivable by it under or in connection with this Agreement, then in any such case:

a Lender intending to make a claim pursuant to the above will notify the Borrower through the Agent setting forth in reasonable detail the basis for such claim;

the Borrower will pay to the Agent for the account of such Lender upon demand of the Agent such amounts as are certified by such Lender to be necessary to fully compensate such Lender for such cost, reduction, payment or foregone interest or other return, after reduction of benefits which accrue to such Lender directly or indirectly because of such event and reasonably allocable to such costs; and

the Borrower may, by giving irrevocable notice to the Agent, prepay to such Lender its participation in each Advance together with accrued interest and all other amounts owing to such Lender hereunder on the last day of the then current Interest Period for that Advance, or on such earlier date as such Lender certifies to be necessary having regard to the relevant circumstances.

For the avoidance of doubt, this Clause 11 shall not apply in case of a removal of the guarantor’s liability (Gewährträgerhaftung) regarding German public savings banks, state banks and public credit institutions of the Federal Republic of Germany and its states.

TAXES

All payments by the Borrower under this Agreement will be made without any deduction or withholding on account of any taxes unless the Borrower is required by law to make such deduction or withholding, in which case the Borrower will:

ensure that the deduction or withholding does not exceed the minimum amount legally required; and

forthwith pay to the Lenders such additional amounts so as to ensure that the amount received by each Lender will equal the full amount which would have been received by it had no deduction or withholding been made,

any taxes measured or imposed upon the overall net income or the overall capital or net worth of any Lender or its applicable lending office, or any branch or affiliate thereof, and all franchise taxes, branch taxes, or taxes on doing business; or

any taxes that would not have been imposed but for the failure of any Lender to comply with any certification, identification, information, documentation or other reporting requirement, if compliance is required by law, regulation, administrative practice or an applicable treaty as a precondition to exemption from, or reduction in the rate of, such taxes.

The Borrower will pay all stamp, recording or similar taxes payable in respect of the execution, delivery and enforcement of the Transaction Documents promptly when due.

If any Lender or the Agent is obliged to make any payment on account of taxes referred to in Clause 12.2 or if any other additional tax burdens occur in connection with the Transaction Documents the Borrower will indemnify each Lender and the Agent from any payment on account of such taxes.

If, in the good faith determination of a Lender:

such Lender has obtained a tax refund or tax allowance or tax credit as a result of, and directly attributable to, an additional payment of the Borrower under Clause 12.1; and

it can make a lawful payment to the Borrower in an amount leaving it in no better or worse position than it would have been had the payment by the Borrower been made without any deduction or withholding,

If the Borrower is required to make any payment to a relevant tax or other authority for which the Borrower has made a deduction or withholding under Clause 12.1, the Borrower will pay the full amount of the deduction or withholding within the applicable periods to the relevant authority and will deliver to the Agent for the account of each Lender concerned as soon as reasonably practical following the making of such payment the original receipt or a certified copy thereof and/or other evidence reasonably satisfactory to such Lender that the payment has been made.

MITIGATION

Mitigation

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 (Illegality), Clause 11 (Increased Costs) or Clause 12 (Taxes), including, but not limited to, transferring its rights and obligations under the Financing Documents to another affiliate or Facility Office.

Clause 13.1.1 does not in any way limit the obligations of the Borrower under the Financing Documents.

Limitation of Liability

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 13.1.

A Finance Party is not obliged to take any steps under Clause 13.1 if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties

Status: it is a limited liability company duly organised and validly existing under the laws of the Federal Republic of Germany, has the capacity to sue and be sued in its own name and has the corporate power and authority to own its assets and to carry on its business as currently conducted and Project Blue Mill;

Powers and Authority: it has the corporate power and authority to enter into and perform its obligations under the Transaction Documents and has taken all necessary corporate and other action required to authorise the execution, delivery and performance of the Transaction Documents;

Legal Validity: the Transaction Documents that have been executed by the Borrower on or before the date as of which this representation is made or repeated, create legal, valid and binding obligations of the Borrower and the other parties thereto (apart from the Lenders in their various capacities) enforceable in accordance with the terms and conditions of the respective agreements and such agreements are in proper form for enforcement in the courts of the Federal Republic of Germany, subject to applicable bankruptcy, insolvency, liquidation or other laws affecting creditors’ rights generally;

No Event of Default: no Event of Default or Potential Event of Default has occurred and is continuing;

Authorisations: except for such Authorisations not obtainable by the date as of which this representation is made or repeated, as to which the Borrower reasonably believes that they will be obtained as and when necessary for Project Blue Mill, all authorisations required for Project Blue Mill, including, without limitation, the performance of its obligations under the Transaction Documents are in full force and effect, have not been revoked or annulled by a first instance decision, to the best of the Borrower’s knowledge and after inquiry with the relevant authority, have not been contested as a result of which the direct enforceability of such Authorisation has been suspended until a final decision and it has complied with the terms and conditions of such Authorisations in all material respects; and such Authorisations have not been modified or amended and there are no proposals to amend or modify the same unless such modification or amendment is not materially adverse in relation to the Borrower’s ability to perform its obligations under the Transaction Documents and/or the validity or enforceability of the Transaction Documents;

Further Authorisations: to the best of its knowledge, having made due inquiry, it knows of no reason why any Authorisation required for Project Blue Mill or the performance of its obligations under the Transaction Documents (i) will not be granted when applied for or requested, or (ii) will be withdrawn (zurückgenommen) or revoked (widerrufen);

Project Contracts: (i) all existing Project Contracts are or will be in full force and effect at the time of the first drawdown under this Agreement, (ii) no other material Project Contracts, except for the Pulp Mill Project Contracts, have been concluded, which have not been disclosed to the Agent, (iii) the Borrower has no notice of any material breaches by any contracting party under the Project Contracts, and (iv) with regard to Project Contracts, which will not be available before the day on which this representation and warranty is made or repeated, the Borrower assumes that these are produced as soon as and to the extent that they may become necessary for Project Blue Mill;

Information: all financial projections contained in the Financial Model were prepared or made in good faith and on the basis of assumptions believed by the Borrower to be reasonable;

Indebtedness: on the day of signing this Agreement, the Borrower has no indebtedness save for:

Permitted Financial Indebtedness (except for indebtedness named under paragraph (e) of the definition of Permitted Financial Indebtedness);

indebtedness for the ongoing payments which become due at the date the guarantee decision is delivered; and

further indebtedness not exceeding EUR 100,000;

Government Grants: it is not aware of any reason why the aggregate sum of the Government Grants should not be paid in the amounts assumed in the Base Case and no encumbrances exist over any of its claims thereunder or rights and title thereto;

Direct Grants and State Guarantee: subject to the conditions usually applicable in connection therewith, the Direct Grants and the State Guarantee are legal, valid and binding obligations of the State of Saxony-Anhalt and the Guarantor, respectively and no encumbrances (other than as contemplated hereby) exist over any of its claims under the Direct Grants or rights and title thereto;

Intellectual Property: it has, or as the case may be, will have available all material Intellectual Property Rights and is not in material breach of or has not infringed in any material respect any Intellectual Property Rights of any other person;

Insurances: all insurances required to be in place, as provided in the Minimum Insurance Schedule, are in full force and effect and all premia then due in respect thereof have been paid in full or will be paid in full out of the proceeds of the next following Advance;

Assurance of Overall Financing: to the best of its knowledge there is an Assurance of Overall Financing;

Accounts:  the Borrower has no accounts other than those established or to be established in accordance with this Agreement and those accounts established in accordance with the Pulp Mill Facility;

Subsidiaries and Affiliates: it does not have any subsidiaries, other than the Permitted Subsidiaries, or any investments in any other person other than Permitted Investments;

Utilities and Facilities: all utility services, means of transportation, facilities and other materials necessary for the importation, construction, installation, and operation of Project Blue Mill (including, without limitation, gas, wood receiving, pulp dispatching, fuel, electrical, water supply, storm drainage, rail, port, telephone and sewage services and facilities, as necessary) are or, to the

best of the Borrower’s knowledge after due inquiry, will be available to Project Blue Mill (in the case of utility services, at or within the boundaries of the Site) as soon as required for the construction, operation, testing and start-up of Project Blue Mill, and to the extent necessary or desirable, arrangements have been made on commercially reasonable terms for such services, means of transportation, facilities and other materials, except for such arrangements as are not required to be made as of the date hereof by the applicable Transaction Documents, with respect to which arrangements the Borrower has no reason to believe such arrangements will not be made at the time so required;

Adequate Facilities: other than those services to be performed and materials to be supplied that can reasonably be expected to be commercially available as and when required or those described in Clause 14.1.17 (Utilities and Facilities) which are not yet available, the services to be performed, the facilities and materials to be supplied and the property interests and other rights granted pursuant to the Project Contracts comprise all of the property interests and other rights necessary to secure any right or privilege which is material to the acquisition, development, construction, installation, completion, operation and maintenance of Project Blue Mill in accordance in all material respects with the Transaction Documents and all Authorisations required for Project Blue Mill or the performance of its obligations under the Transaction Documents;

No Deduction or Withholdings: under the laws of its jurisdiction of incorporation in force at the date hereof, it will not be required to make any deduction or withholding from any payment it may make hereunder;

Compliance with Representation and Warranties under Pulp Mill Facility Agreement: each of the representations and warranties contained in clause 16.1 (Representations and Warranties) with the exception of clause 16.1.29 of the Pulp Mill Facility Agreement is true and correct.

Repetition

FINANCIAL CALCULATIONS

Annual Debt Service Cover Ratio

Senior Debt/EBITDA Cover Ratio

Ratio default cure right

If, on any relevant date, the required ratios pursuant to Clause 15.1 (Annual Debt Service Cover Ratio) or 15.2 (Senior Debt/EBITDA Cover Ratio) is or would, but for paragraph 15.3.3 below, be breached (the “Ratio Default”), the Borrower may, within twenty Business Days of the breach being notified to the Borrower by the Agent, cure the Ratio Default by means of an Equity Cure Measure.

The right to cure pursuant to paragraph 15.3.1 above may not be exercised more than once in each fiscal year of the Borrower for each of the ratios pursuant to 15.1 (Annual Debt Service Cover Ratio) or 15.2 (Senior Debt/EBITDA Cover Ratio), unless the amount of one of such Equity Cure Measures is equal to or less than EUR 5,000,000.

Subject to paragraph 15.3.2 above, no Event of Default shall arise in respect of any breach of the ratios pursuant to Clause 15.1 (Annual Debt Service Cover Ratio) or 15.2 (Senior Debt/EBITDA Cover Ratio), as the case may be, until the twenty Business Days’ period referred to in paragraph (a) above has expired.

Recalculation

Adjustments to Financial Model

INFORMATION REQUIREMENTS

Financial Statements

The Borrower will deliver to the Agent and PWC in sufficient copies for each of the Lenders:

as soon as available, but no later than 90 days after the end of its financial year:

the balance sheet, profit and loss statement and cash flow statement for the Borrower and (on a consolidated basis) for the Group for such financial year, audited by a recognised firm of independent auditors licensed to practise in the Federal Republic of Germany, together with a statement from the Borrower reconciling such financial statements with the budgeted yearly accounts and explaining all material deviations of such financial statements from the budgeted yearly accounts referred to in Clause 16.3 (Project Budget);

the related auditors’ report; and

a confirmation by such auditors that all transactions effected by the Borrower with Related Parties in such financial year have been made on terms no less beneficial to the Borrower than those obtainable on an arms’ length basis;

as soon as available, but no later than 60 days after the end of its financial half year, the balance sheet, profit and loss statement and cash flow statement for the Borrower and (on a consolidated basis) for the Group for such period which will be in a form reasonably acceptable to the Lenders and will be accompanied by data necessary for the calculation of the Annual Debt Service Coverage Ratio, certified by its independent auditors; and

no later than thirty (30) days after the end of each calendar quarter, a management commentary as to, inter alia, the Borrower’s and the Group’s performance during such calendar quarter and any material developments or proposals affecting the Borrower and the Group or its business.

The Borrower will ensure that each set of accounts delivered by it pursuant to this Clause 16 is prepared on the same basis as was used in the preparation of its Original Financial Statements or, in the case of a divergence therefrom, will be accompanied by a statement explaining each changed accounting principle and its effects.

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 Borrower by such auditors.

The Borrower will provide the financial information required to be provided to the Lenders under this Clause 16 in the German and the English language.

Compliance Certificates

Project Budget

The Borrower will deliver to the Agent, with sufficient copies for each of the Lenders, as soon as available, but no later than 30 days prior to the beginning of the relevant financial year, the updated Financial Model, the budgeted balance sheet, the budgeted profit and loss statement and the budgeted cash flow statement for the next following financial year and the Borrower will be available for a meeting with the Lenders within two (2) weeks thereafter, to discuss such documents with the Lenders. Such statements will forecast the costs of maintenance, overhauls and Capital Expenditure for the next following three years in each case for the Borrower and for the Group.

At Financial Close at the latest, the Borrower will deliver to the Agent updates of the updated Financial Model, the budgeted balance sheet, the budgeted profit and loss statement and the budgeted cash flow statement for the ongoing financial year, which will take into account both Projects. Any further documents submitted to the Agent thereafter in connection with this Clause 16.3 will include the respective financial information regarding both Projects.

Following review by the Agent and if necessary the Technical Adviser, if the Agent is satisfied with the information supplied pursuant to Clause 16.3.1, it will confirm the same to the Borrower. If the Technical Adviser or the Agent is not satisfied with such information, the Borrower shall make such amendments to such documents as may be reasonably required by the Technical Advisor and/or the Agent.

Reports during Construction Period

During the Construction Period the Borrower will provide the Agent and the Technical Adviser with the following information within fifteen (15) days of the last day of each calendar quarter:

quarterly construction progress reports in accordance with the conditions set out in Schedule 9 (Sample Table of Content regarding Quarterly Construction Progress Reports); and

quarterly reports on the development of the costs budgeted for construction, including a confirmation or a proposal for a revised version of the Project Budget including a budgeted cost/actual cost comparison; and

any material reports and other material notifications issued by any of the Contractors and/or any of their sub-contractors to the Borrower in respect of Project Blue Mil, including but not limited to the detailed program and any work around plan.

The Technical Adviser will review such reports as to their compliance with the requirements of this Agreement, the respective Project Contract and the Investment and Financing Plan. If the Technical Adviser is satisfied with such reports, he will confirm the same to the Agent. If the Technical Adviser and/or the Agent is not satisfied with such reports, the Borrower shall consult with the Agent, the respective Contractor and/or any of its subcontractors with a view to rectifying the situation and ensuring that all future reports are satisfactory to the Technical Adviser and/or the Agent.

Reports during Operation Period

Other Financial Information

Reports in connection with Pulp Mill Project

Miscellaneous Information

The Borrower will inform the Agent in writing:

promptly upon a Responsible Officer becoming aware of it, of the occurrence of any Event of Default, Potential Event of Default, Pulp Mill Event of Default or Potential Pulp Mill Event of Default and confirm to the Agent in each Drawdown Request and, after the Facility has been fully drawn, not later than thirty (30) days after the end of each calendar quarter that, save as previously notified to the Agent or as notified in such Drawdown Request or, as the case may be, confirmation, no Event of Default, Potential Event of Default, Pulp Mill Event of Default or Potential Pulp Mill Event of Default has occurred and is continuing;

promptly upon a Responsible Officer becoming aware of it, of any circumstances which are likely to delay in any material respect the completion of Project Blue Mill in accordance with the Base Case, including any event which might reasonably be expected to result in Cost Overruns;

promptly upon a Responsible Officer becoming aware of it, of any material delay in the payment or non-payment of the Government Grants;

promptly upon a Responsible Officer becoming aware of it, of any circumstances which are likely to have a materially adverse impact on the validity, enforceability and continuance of the State Guarantee and the Government Grants;

promptly upon a Responsible Officer becoming aware of it, of any Event of Force Majeure or any other event which might delay construction or operation or which might reasonably be expected to interrupt or reduce the operation of the plant excluding any planned outage or maintenance period previously notified to the Agent or which might reasonably be expected to have a Material Adverse Effect;

promptly upon a Responsible Officer becoming aware of it, of any Environmental Claim commenced or threatened against it;

promptly upon a Responsible Officer becoming aware of it, of any material default of any party to a Project Contract;

within ten (10) Business Days upon a Responsible Officer becoming aware thereof, of the details of each litigation, arbitration or administrative proceeding pending or threatened against it which is likely to result in a liability of the Borrower in an amount or amounts exceeding, in aggregate, EUR 2,000,000 or the equivalent in other currencies;

of any Change of Control;

of any changes in its senior management;

as soon as reasonably possible after a Responsible Officer becoming aware of it, of possible Capital Expenditures in an amount of more than EUR 2 million in excess of the Project Budget for that financial year; and

as soon as reasonably possible after a Responsible Officer becoming aware of it, of possible Capital Expenditures in relation to Project Blue Mill exceeding in aggregate the Capital Expenditure foreseen for Project Blue Mill pursuant to the Investment and Financing Plan by more than EUR 1,5 million.

The Borrower will provide upon request such verbal or written information concerning Project Blue Mill as the Agent or the Lenders may reasonably require including information that is publicly available.

INSPECTION RIGHTS

COVENANTS

Positive Covenants

Maintenance of Legal Validity and Legal Status: do all things necessary to maintain its existence as a legal person and to ensure the legality, validity, enforceability or admissibility in evidence in the Federal Republic of Germany of the Transaction Documents including the obtaining and maintaining of all applicable Authorisations necessary for Project Blue Mill and the performance of its obligations under the Transaction Documents, as and when required, and, on request of the Agent, shall supply copies (certified by a director of the Borrower as true, complete and up to date) of any such Authorisations;

Applicable Laws and Authorisations: with the exception of Environmental Laws and Environmental Permits where the obligations of the Borrower with respect thereto are set out in Clause 18.1.15 (Environmental Compliance) comply in all material respects with all laws and comply with, obtain, maintain and renew, all applicable Authorisations in each case which are applicable in connection with Project Blue Mill and the Borrower’s business and operation generally and required for its ability to perform its obligations under the Transaction Documents. As soon as the Authorisations granted after the conclusion of this Agreement become valid and upon request by the Agent, the Borrower will obtain legal opinions on such validity from a reputable law firm addressed to and for the benefit of the Agent;

Transaction Documents: Subject to Clause 18.2.15(b) (Additional Project Contracts and Amendments to Project Contracts) enter into, maintain in full force and effect and comply with all Transaction Documents;

Authorised signatories: provide the Agent with a list of persons authorised to sign amendments to the Project Contracts;

Relevant Advisers: from time to time and on the reasonable request of the Agent inform the relevant Advisers and co operate with them to enable each such Adviser fully to perform its obligations under its advisory agreement;

Information regarding Permitted Encumbrances and Permitted Financial Indebtedness: provide details to the Agent of any newly created Permitted Encumbrance granted outside the ordinary course of business or any newly incurred Permitted Financial Indebtedness incurred to any person;

Information of Technical Adviser: provide the Technical Adviser during the Construction Period on a quarterly basis and upon request with all information and documentation reasonably required for the purposes of this Agreement and bear the reasonable costs of the report to be provided by the Technical Adviser pursuant to Clause 16.4.2 (Reports during Construction Period);

Preservation of Assets: maintain and preserve all of its assets in good condition and undertake regular maintenance, except disposal of obsolete assets, in accordance with prudent industry practice or the respective Contractor’s and Suppliers’ recommendations;

Transactions with Third Parties: conclude and procure that any subsidiary of the Borrower concludes any transaction with a third party, irrespective of whether or not it is a Related Party, only on terms no less beneficial to it than those obtainable on an arm’s length basis. All contracts to be concluded by it with a Related Party will be submitted to the Agent in their final draft form for approval, such approval not to be unreasonably withheld. It will further waive any Financial Indebtedness owed by any person to it only for valuable market consideration;

Conduct of Business: cause Project Blue Mill to be built, operated and maintained in accordance with good industry practices, the Project Contracts and all conditions, obligations, requirements set out in any Authorisation or technical specifications from time to time agreed with any of the Contractors or by Suppliers, or issued by any Authority in respect of the Borrower or Project Blue Mill and ensure that all staff necessary for the proper and efficient operation of its business or that of its subsidiaries is in place;

Payments and Application of Payments: ensure that all operational revenues received by it in connection with Project Blue Mill are paid to the Proceeds Account and applied in accordance with clause 9.4.3 (Application of Moneys on Proceeds Account) of the Pulp Mill Facility Agreement.

Tax: duly and punctually pay and discharge:

all taxes, assessments and governmental charges imposed upon it or its assets within the time period allowed therefore without imposing penalties and without resulting in an encumbrance having priority to the Lenders or any security purported to be granted by or created pursuant to the Security Agreements; and

all lawful claims which, if unpaid, would by law become encumbrances upon its assets

Filing of Tax Returns: file or cause to be filed all tax returns required to be filed in all jurisdictions in which the Borrower or any of its subsidiaries is situated or carries on business or is otherwise subject to tax;

Claims Pari-Passu: ensure that at all times the claims of the Lenders against it under the Financing Documents rank at least pari passu with the claims of the Pulp Mill Facility Lenders and all its unsecured and unsubordinated creditors save those whose claims are preferred by any bankruptcy, insolvency, liquidation or other similar laws of general application;

Environmental Compliance: comply in all material respects with all Environmental Law and obtain and maintain any Environmental Permits and notify the Agent, promptly after a Responsible Officer becomes aware of the same of:

any material Environmental Claim made on it or to any occupier of any property owned or leased by it under any Environmental Law which may affect the compliance with this Agreement; and

any circumstances which arise whereby any material remedial action is likely to be required to be taken by, or at the expense of, it pursuant to any Environmental Law;

Enforcement: take all reasonable steps to promptly enforce its rights under any Project Contract where failure to do so is material in relation to Project Blue Mill and the rights and obligations of the parties to any of the Financing Documents;

Compliance with Conditions for State Guarantee and Government Grants: comply, at all times, with all conditions, obligations and requirements of, and assume all undertakings in, the State Guarantee and the Government Grants, in particular:

to allow inspections by the Guarantor, PWC, the Federal Ministry of Economics and the Federal Court of Auditors (either by themselves or by agents appointed by them) at any time for the purpose of checking whether a drawdown under the State Guarantee may be made or whether the conditions for such drawdown are satisfied or have been satisfied;

to authorise the Agent and the Lenders to submit to the Guarantor, PWC, the Federal Ministry of Economics and the Federal Court of Auditors all documents concerning the Facility and the Security and to give to the Guarantors and PWC all information requested by each of them;

to pay all fees in connection with the State Guarantee; and

to discharge the Arranger, the Agent, the Security Agent and the Lenders vis-à-vis the Guarantor, PWC, the Federal Ministry of Economics and the Federal Court of Auditors from any duty of discretion (Schweigepflicht) whereby any requests by the Lenders shall be made through the Agent;

Intellectual Property: procure and comply in all material respects with all material Intellectual Property Rights necessary to construct and operate Project Blue Mill and conduct the Borrower’s business;

Security:  provide and maintain the Security and any other security to be provided to the Lenders and the Pulp Mill Lenders pursuant to the Financing Documents and procure that the Security is effective and maintained and upon reasonable request of the Agent provide additional security over its assets in favour of the Lenders and the Pulp Mill Lenders. The Agent will determine the details of the additional security within its reasonable discretion (billiges Ermessen) pursuant to § 315 BGB. The provision of additional security will not affect existing Permitted Encumbrances;

Defects Liability Protection: refrain from any acts which may prejudice materially and adversely any defects liability protection afforded to the Borrower by the Contractors under the Project Contracts or, to the Borrower’s knowledge, by any subcontractor (at any level) to the Contractors and/or the Borrower;

Management: employ experienced professionals in the pulp industry;

Technical Assistance: as and when reasonably requested obtain such assistance as may be necessary prior to Final Completion in connection with the construction, commissioning, testing, start-up, management, operation and maintenance of Project Blue Mill;

Permitted Subsidiaries: save as the Majority Lenders may otherwise agree (such agreement not to be unreasonably withheld) ensure that any Permitted Subsidiaries operate their respective businesses in a proper and efficient manner and in accordance with the principles set out in Schedule 9 (Financing of the Subsidiaries) of the Pulp Mill Facility Agreement;

Shareholder Cost Overrun Commitment: draw on first demand under the Shareholder Cost Overrun Commitment the respective shareholder loan upon the occurrence of Cost Overruns which are not covered by funds otherwise permitted to be drawn upon pursuant to the provisions of this Agreement or the Shareholders’ Undertaking Agreement.

Negative Covenants

Negative Pledge: create or permit to subsist any encumbrance over all or any of its assets other than a Permitted Encumbrance or create any restriction or prohibition on encumbrances over all or any of its assets;

Investments, Loans and Guarantees: make any investment in, make any loans to, grant any credit or other financial accommodation to or for the benefit of any person or give or have outstanding any guarantee or indemnity to or for the benefit of any person other than in respect of product liability assumed in the ordinary course of business or otherwise voluntarily assume any liability, whether actual or contingent, in respect of any obligation of any other person other than Permitted Investments and save as set out in the principles set out in Schedule 9 (Financing of the Subsidiaries) of the Pulp Mill Facility Agreement, nor will it make any material fixed asset investments (Sachinvestitionen) or financial investments (Finanzinvestitionen) without the prior consent of the Guarantor or except as permitted by this Agreement in relation to Project Blue Mill;

Disposals: dispose of the whole or any part of its assets other than in the ordinary course of business or other than by way of Permitted Disposals, nor sell any material investments (Beteiligungen) or divisions of its business (Betriebsteile) without the prior consent of the Combined Majority Lenders and the Guarantors;

Financing: use the proceeds of any Advances for any other purposes than those set out herein;

Transfer of Shares or Shareholder Loans: consent to any transfer of Shares or Shareholder Loans in violation of the Shareholders’ Undertaking Agreement;

Shares in Subsidiaries:

sell or otherwise dispose of (in any transaction or series of transactions whether related or not) its existing shares in any direct subsidiary; and

procure that any direct subsidiary shall sell or dispose of (in any transaction or series of transactions whether related or not) its existing

shares in any of its subsidiaries or issue any new shares to any third party where following any such sale more than 49% of the issued ordinary share capital of the relevant subsidiary would be owned by one or more third parties,

Shareholders’ Account: make any payments to the Shareholders’ Account other than in compliance with the provisions of the Pulp Mill Facility Agreement;

Distributions to shareholders: make any distributions to its shareholders or repay any share capital prior to full and final repayment of the outstanding Advances and expiry of the State Guarantee (other than payments permitted pursuant to clause 9.4.3 (a) (x) and (xii) of the Pulp Mill Facility Agreement);

Capital Expenditures: incur any Capital Expenditures at any time or in any amount of more than EUR 2 million in excess of the Project Budget for that financial year other than with the consent of the Combined Majority Lenders unless the same is required to comply with applicable Environmental Law in Germany;

Shareholder Loans: (a) pay interest on any Shareholder Contributions and any shareholder loan outstanding to the Borrower as at the date of the 2012 Amendment Agreement (as defined in the Pulp Mill Facility Agreement) or (b) prepay, repay, redeem, purchase or otherwise acquire any Shareholder Contributions or any shareholder loan outstanding to the Borrower as at the date of the 2012 Amendment Agreement (as defined in the Pulp Mill Facility Agreement) prior to the Final Maturity Date and the repayment in full of each outstanding Advance hereunder and expiry of the State Guarantee other than payments provided pursuant to clause 9.4.3 (a) of the Pulp Mill Facility Agreement;

Financial Indebtedness: 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 Financial Indebtedness, it being understood and agreed that

non-speculative forward energy sales on fixed price terms for periods of at least up to 12 months are customary and shall not be commodity hedges under this Agreement, nor shall be considered to be Financial Indebtedness under this Agreement, provided that principal energy sales volumes do not exceed the underlying excess power generation of the Borrower, as it may be reasonably assumed to be generated based on the Project Budget;

renewable power generation is a natural co-production of a modern pulp mill and such generation is projected to increase with every increase in pulp production capacity. To the extent such additional electric power will be sold to the general power market, be it directly or indirectly, non-speculative fixed price forward sales are customary (if not essential to successfully sell and compete) and shall be permitted under this Agreement; and

though physical delivery and therefore physical settlement of any contracts for power sales or in relation thereof shall prevail, it cannot be excluded that power sales or parts thereof, be it quantitatively or by quality, may be possible by way of financial settlement only and shall be permitted under this Agreement;

Encumbrances: create or permit to subsist any encumbrance on any of its assets other than Permitted Encumbrances;

Mergers: split, merge or consolidate with any other person, enter into any demerger transaction, or participate in any other type of corporate reconstruction without the prior consent of the Combined Majority Lenders and the Guarantors;

Subsidiaries: create any subsidiary or permit to exist any interest in any person (whether by shareholding, joint venture, partnership, whether any income or profits are, or would be, shared or transferred with any other party or otherwise), other than the Permitted Subsidiaries;

Additional Project Contracts and Amendments to Project Contracts:

enter into any additional material Project Contracts not referred to under the Investment and Financing Plan with an aggregate value of more than EUR 1.50 million save with the prior written consent of the Majority Lenders (such consent not to be unreasonably withheld or delayed);

subject to Clause 18.2.16 (Project Specifications), only, amend in any material respect, or grant any waiver or consent under, any Project Contract if such amendment, waiver or consent would not reasonably be expected to be materially adverse in relation to the Borrower’s ability to

perform its obligations under the Transaction Documents and/or the validity or enforceability of the Transaction Documents. In the case of Project Contracts with a value of more than EUR 2 million, such amendments, waivers and consents will have to be notified to the Agent in writing seven (7) days in advance;

cancel or terminate any Project Contract with a value of more than EUR 2 million (other than any contract for the carrying out of the necessary infrastructure works at the Site), without having given thirty (30) days prior written notice to the Agent and then only so long as a replacement contract is in place on terms no less beneficial to the Borrower as the cancelled/terminated Project Contract; and

cancel, terminate or suspend any contract for the carrying out of the necessary infrastructure works at the Site or (subject to Clause 18.2.16 (Project Specifications)) grant any waiver or consent under or amend the same without Combined Majority Lenders’ prior written consent;

Project Specifications: make any changes to the design, specification or configuration of the plant, including the additional turbine, without the Majority Lenders’ consent except for such amendments and changes which are in conformity with the Project Contracts or are of a minor nature, it being understood that any such change which might result in an increase in the overall Project Costs in an aggregate amount of at least EUR 1 million or a delay in the Final Completion will not be deemed to be of a minor nature;

Waiver of tests under Turbine Contract: waive or materially alter any test procedures or approve any test results in connection with the tests under clauses 7.4 and 9 of the Turbine Contract where this could have an adverse effect on Project Blue Mill without Majority Lenders’ consent (such consent not to be unreasonably withheld or delayed);

Shares: purchase, cancel or redeem any Share Capital, reduce the Share Capital, issue any Shares otherwise than to an existing Shareholder, grant any option over or make any offer of Shares to any person or alter any material rights attaching to the Shares without the Combined Majority Lenders’ and the Guarantor’s consent. Their consent is however not required in relation to the offer of Shares;

Shareholders’ Agreement: change its articles of association in any manner which would be inconsistent with the provisions of any Transaction Document without consent by the Majority Lenders (such consent not to be unreasonably withheld) and the Guarantor;

Change of Business: make any material changes to the general nature of its business as a pulp mill (including wood harvesting and procurement as well as logistic services) and any business incidental thereto or carry on any other business which results in any material change to the nature of such business;

Abandonment: abandon Project Blue Mill;

Withdrawals from Blue Mill Investment Accounts: withdraw any moneys from the Blue Mill Investment Account other than pursuant to the provisions of the Financing Documents;

Accounts: open or operate any bank accounts other than as contemplated by this Agreement or the Pulp Mill Facility Agreement;

Assignment and Encumbrance of Government Grants: assign, pledge or otherwise charge, encumber or dispose of its claims, rights and title under and to the Government Grants except as provided in the Investment Incentives Assignment Agreement listed in Schedule 7 (Security Agreements) of the Pulp Mill Facility Agreement;

Financial Year: change its financial year;

Obligations: incur any material obligations not contemplated by or permissible under this Agreement or which the Borrower assumes in connection with deliveries and services undertaken by it in the ordinary course of business without the prior consent of the Guarantor.

INSURANCES

General

Specific Provisions of the Insurances

Sole Loss Payee: the Security Agent to be named as sole loss payee in all policies save, in relation to policies relating to third party liability, where payment is made directly to the third party claiming thereunder in full and final settlement of his claim. A payment to the loss payee in accordance with this Clause shall, to the extent of that payment, be made to the Insurance Account or any other account specified to the insurers by the Security Agent and discharge the liability of the respective insurer to pay the Borrower or other claimant insured party. The arrangements in this Clause shall continue to apply notwithstanding the liquidation or insolvency of the Borrower or any of the insurers;

Waiver: the insurers to agree to waive all rights of subrogation or action against the Security Agent unless any of the members of the executive board (Vorstand) of the Security Agent acted with gross negligence or wilful misconduct (Vorsatz); if the insurer rejects to include such provision into the insurance policy, the Borrower hereby waives all statutory and contractual subrogation claims it may otherwise have against the Security Agent resulting from any claim raised by the insurance company against the Borrower or the Security Agent. Furthermore, the Borrower hereby indemnifies the Security Agent against any cost, claim, loss, expenses (including reasonable legal fees) or liabilities including VAT which the Security Agent may incur by reason of a claim of the insurance company against the Security Agent, in each case unless any of the members of the executive board (Vorstand) of the Security Agent acted with gross negligence or wilful misconduct (Vorsatz);

Reduction of Insurance Proceeds: the insurers not to reduce any insurance proceeds due and payable to the Security Agent (on behalf of itself and other beneficiaries) as loss payee, save in respect of any unpaid premium if so required by the respective insurer;

Insurance Claims Assignment: cause the insurers to acknowledge that they have noticed that, by the Insurance Claims Assignment Agreement as set out in Schedule 7 (Security Agreements) of the Pulp Mill Facility Agreement, the Borrower assigned to the Security Agent (for and on behalf of the Lenders) all its existing and future rights and claims in and to the Material Insurances (including all claims of whatsoever nature thereunder and return of premiums and proceeds in respect thereof). The insurers shall also confirm that they have not received notice of any other assignment, charge or other encumbrance of the Borrower’s rights and claims under the respective insurance.

Adequate Information: the insurers to acknowledge that they have received adequate information in order to evaluate the risk of insuring the Borrower in respect of the risks hereby insured;

Cancellation: the insurers not to cancel (kündigen) the Material Insurances during the Construction Period;

Notices: the insurers to give in writing to the Security Agent

subject to 19.2.6 a thirty (30) days notice of cancellation, non-renewal (whether for non-payment of premium or otherwise), suspension (if applicable) or adverse change of terms;

a thirty (30) days notice of any reduction in limits or coverage, any increase in deductibles or any termination before the original expiry date is to take effect; and

as soon as any of the insurers becomes aware, notice of any act, event or omission which such insurer considers may invalidate or render unenforceable in whole or in part any insurance.

Delivery of Notices and Documents: the policies to stipulate that any notice or document to be served in relation to any policy may be delivered or sent by prepaid recorded delivery post (if within the Federal Republic of Germany), by prepaid airmail (if elsewhere) or facsimile process to the party to be served at its registered office or at such other address as it may have notified to the other parties in writing in accordance with this Clause. Any such notice will be deemed to be given as follows:

if delivered by hand or by mail, when delivered; and

if by facsimile when transmitted, but only if, immediately after the transmission, the sender’s fax machine records the correct answerback;

Governing Law and Jurisdiction: the insurance policies to be governed by German law and each of the insurers and co-insured to agree that any legal proceedings arising out of or in connection with the policies will be brought in the exclusive jurisdiction of a German court.

Insurance Documentation

Inspection Right

Broker’s Letter of Undertaking

Changes to Insurance Programme

If any variation is proposed to be made to the terms of any insurance, the Borrower will give at least thirty (30) days prior written notice thereof to the Security Agent. No variation to any insurance should be effected or agreed by the Borrower until the Security Agent notifies the Borrower in writing either that the variation is not material to the Lenders or is otherwise agreeable to the Security Agent. The Security Agent will not unreasonably withhold or delay its agreement after obtaining any advice that it deems appropriate in considering the Borrower’s request.

No Event of Default occurs to the extent the Borrower has given notice pursuant to Clause 19.6.1 (Changes to Insurance Programme), and for so long as, cover required to be maintained is not available to the Borrower in the international insurance or reinsurance market on what the Security Agent accepts in writing to the Borrower to be reasonable commercial terms. In determining whether such cover is available on reasonable commercial terms, the Security Agent shall have on-going regard to the scope of such insurance, its cost in the context of the financing of Project Blue Mill and the direct and indirect interests of the Lenders under the Financing Documents.

Notification

Claim Handling

diligently pursue any valid claim under any insurance,

promptly notify the Security Agent and the insurers of any matter for which it may be entitled to a claim under any insurance,

keep the Security Agent informed on a regular basis regarding progress towards settling any such claim,

take account of any representations made by the Security Agent in relation to any such claim, and

not negotiate, compromise or settle any claims with a potential value in excess of EUR 5 million without the written consent of the Security Agent, such consent not to be reasonably withheld or delayed.

Renewals

Changes in Insurer Security

Lender’s Right to Insure if Borrower Defaults

Disputes over Availability of Cover Borrower Defaults

EVENTS OF DEFAULT

Each of following circumstances constitutes an Event of Default for the purposes of this Agreement, irrespective of whether or not caused by any reason within the control of the Borrower or any other person:

Payment Obligations: failure by the Borrower to make:

subject to Clause 6.4, any payment of principal or interest due under the Facility within seven (7) Business Days from the due date thereof;

subject to clause 6.5 of the Pulp Mill Facility Agreement, any payment of principal or interest due under the Pulp Mill Facility within seven (7) Business Days from the due date thereof; and

any other payment due under the Financing Documents within five (5) Business Days from a notification by the Agent of the Borrower’s failure to pay;

Representations and Warranties: any representation, warranty or statement made in any Financing Document, certificate, statement or opinion delivered by or on behalf of the Borrower hereunder or in connection herewith is or proves to have been incorrect, untrue or misleading in any material respect when made and which, if capable of being remedied, has not been remedied within thirty (30) days from notification by the Agent of such breach;

Covenants: the Borrower or any of its Shareholders breaches any covenant or material obligation under the Financing Documents which, if capable of being remedied, has not been remedied within fifteen (15) Business Days from notification by the Agent of such breach;

Pulp Mill Event of Default: a Pulp Mill Event of Default has occurred and is continuing;

Annual Debt Service Cover Ratio: Failure by the Borrower to meet the Annual Debt Service Cover Ratio as provided for in Clause 15.1 (Annual Debt Service Cover Ratio), unless waived by the Majority Lenders.

Senior Debt/EBITDA Cover Ratio: Failure by the Borrower to meet the Senior Debt/EBITDA Cover Ratio as provided for in Clause 15.2 (Senior Debt/EBITDA Cover Ratio), unless waived by the Majority Lenders.

Consents and Approvals: any Authorisation necessary to enable the Borrower to comply with any of its material obligations under the Transaction Documents and Project is revoked, withheld or modified or is limited in a way which materially prejudices the validity and enforceability of the Transaction Documents and/or the ability of the Borrower to meet its obligations thereunder;

State Guarantee and Government Grants: any of the State Guarantee or Government Grants is modified in any material respect, revoked, withdrawn, withheld or suspended, or does not remain in full force and effect;

Insolvency and Rescheduling: any cause exists on the basis of which insolvency proceedings under the German Insolvency Code should be initiated against the Borrower, the Borrower commences negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness or makes a composition with its creditors;

Winding-up: (a) the Borrower, (b) while it has any liability under the Shareholders’ Undertaking Agreement any of the Shareholders or any of the Sponsors takes any corporate action or any other steps are taken or legal proceedings are started for its winding-up, dissolution or reorganisation or for the appointment of a liquidator, receiver, administrator, administrative receiver, conservator, custodian, trustee or similar officer of it or of any part or all of its revenues and assets;

Insolvency or Winding-up of Turbine Supplier: the Turbine Supplier is during the Construction Period unable to pay its debts as they fall due, commences negotiations with any one or more of its creditors with a view to the general readjustments or rescheduling of its indebtedness, makes a composition with its creditors, or takes any corporate action or other steps or legal proceedings are started for its winding-up, dissolution, re-organisation (except for a solvent re-organisation previously approved in writing by the Agent) or for the appointment of a liquidator, receiver, administrator, administrative receiver or similar officer of it or of any or all of its revenues and assets;

Indebtedness: failure by the Borrower to pay any other Financial Indebtedness over EUR 1,000,000 when due or after the expiry of any applicable grace period unless such payment is contested in good faith by the Borrower;

Obligations of the Borrower: at any time it is unlawful for the Borrower to perform any of its material obligations under the Transaction Documents, or to own its material assets or to carry on its business in materially the same fashion as contemplated in the Financing Documents and such condition continues for period of sixty (60) days;

Obligations of the Parties to Shareholders’ Undertaking Agreement: any of the Shareholders or Sponsors (or any of their successors) fails to comply with any obligation assumed by it in the Shareholders’ Undertaking Agreement and such failure, if capable of remedy, is not remedied within thirty (30) days after receipt of written notice from the Agent requesting the same;

Change of Control: a Change of Control occurs without the prior written consent of the Majority Lenders;

The Borrower’s Business: the Borrower ceases or threatens to cease to carry on all or a substantial part of the business it carries on at the date hereof, abandons or threatens to abandon Project Blue Mill or disposes of a substantial part of its business or assets or a substantial part of its business or assets is seized, nationalised or expropriated or compulsorily acquired by or under the authority of any government;

Assets of the Borrower: except as permitted by the Financing Documents, the Borrower ceases to be the sole lawful and beneficial owner of, and having good title to, any material part of its assets, and such assets or part thereof, are not re-acquired or replaced in a manner satisfactory to the Lenders within fifteen (15) days of such cessation;

Final Completion: Final Completion does not occur by 31 December 2013 at the latest;

Default under Transaction Documents: a material default under any of the Transaction Documents which, if capable of being remedied, has not been remedied within thirty (30) days in the case of any Financing Document and ninety (90) days in the case of any Project Contract in each case of notification by the Agent of such default;

Invalid, Non-binding and Non-enforceable Obligations: a material provision of the Financing Documents is not, or is contested by a party other than a Lender to be not, legal, valid, binding and enforceable;

Qualifications in the Auditors’ Report: the auditors have made a qualification in their report and there are reasonable doubts (vernünftige Zweifel) concerning the continuation of the Borrower’s business on a going concern basis unless within twenty (20) Business Days from the date of the auditor’s report the Borrower has presented a certificate from the auditors showing that the reasons for the doubts raised have been remedied or sufficient measures have been taken for their remedy;

Security: any Security ceases to be in full force and effect and the Borrower fails to provide substitute security of equal value for any reason other than:

the assignment of any credit or portion of the finance to which such Security relates; and

the failure to make the required filings or registrations where such filings or registrations are under the control of the Lenders;

Litigation: any material judgement, award or decision on any litigation, arbitration, administrative proceedings or governmental or regulatory investigations, proceedings or disputes is commenced against the Borrower or its assets which is materially adverse in relation to the Borrower’s ability to perform its obligations under the Transaction Documents and/or the validity or enforceability of the Transaction Documents unless such judgement, award or decision is stayed pending appeal without the necessity for the Borrower to provide any security in connection therewith;

Enforceability of Encumbrance: any encumbrance over any assets of the Borrower securing an indebtedness of not less than EUR 100,000 becomes enforceable;

Execution or Distress: any execution (Zwangsvollstreckung) or distress (Beschlagnahme) is levied against, or an encumbrancer takes possession of the whole, or any material part of the assets of the Borrower or any event which under the laws of any jurisdiction has a similar effect is not discharged within thirty (30) days;

Insurances: Subject to Clause 19.6.2 (Changes to Insurance Programme), the Borrower fails to maintain the insurances pursuant to the provisions of Clause 19 (Insurances);

Destruction of Project: Project Blue Mill or any substantial part thereof is destroyed or damaged in a manner which is not covered in full by proceeds of insurance, (excluding any agreed deductibles);

Material Adverse Change: any event or circumstance (or series of events or circumstances) occurs which has a Material Adverse Effect;

Force Majeure: an Event of Force Majeure occurs or a series of Events of Force Majeure occur the effects of which continue (on an aggregated basis) for a period of 120 days under the Turbine Contract.

Acceleration and Cancellation

Pursuant to section 28 of the general conditions for state guarantees of the State of Saxony-Anhalt (“Allgemeine Bestimmungen für Landesbürgschaften zur Wirtschaftsförderung des Landes Sachsen-Anhalt vom 10. Mai 2007

(Runderlass des Ministeriums der Finanzen des Landes Sachsen-Anhalt vom 10. Mai 2007 – 34 – 32901”)), the termination of this Agreement is subject to the prior consent of the guarantee board (Bürgschaftsausschuss) or, in case of urgency, the Ministry of Finance of the State of Sachsen-Anhalt. The guarantee board (Bürgschaftsausschuss) or the Ministry of Finance, as the case may be, will, upon request for approval of termination, examine whether the preconditions for an Event of Default are met as well as whether the Event of Default is consistent with the general conditions for state guarantees of the State of Saxony-Anhalt (“Allgemeine Bestimmungen für Landesbürgschaften zur Wirtschaftsförderung des Landes Sachsen-Anhalt vom 10. Mai 2007 (Runderlass des Ministeriums der Finanzen des Landes Sachsen-Anhalt vom 10. Mai 2007 – 34 – 32901”)) in its current version and the regulations of the guarantee board (Bürgschaftsausschuss). In case of termination based on the general termination rights in accordance with letters a) to e) of the above-mentioned general conditions, it will only be examined as to whether the preconditions for a termination are met. The validity of the termination vis-a-vis the Borrower shall not be affected by the consent right of the guarantee board (Bürgschaftsausschuss) or the Ministry of Finance, as the case may be.

Upon the occurrence of an Event of Default and at any time thereafter while such Event of Default is continuing, the Agent may and shall during the term of the State Guarantee following the prior written consent of the Guarantor, represented by the guarantee board (Bürgschaftsausschuss) and upon the direction of the Combined Majority Lenders and the Majority Lenders by notice to the Borrower:

declare all or any part of the Advances to be immediately due and payable or declare all or any part of the Advances to be due and payable on its demand (whereupon the same will become so payable together with accrued interest thereon and any other sums then owed by the Borrower under the Financing Documents);

declare that any unutilised portion of the Facility will be cancelled, whereupon the Lenders’ undrawn Commitments shall be cancelled and each Lender’s undrawn Commitment will be reduced to zero, provided that, notwithstanding the foregoing, upon the occurrence of an Event of Default specified in Clauses 20.1.9 (Insolvency and Rescheduling), 20.1.10 (Winding Up), the undrawn Commitments of each Lender will immediately be reduced to zero and all Advances and other sums then owed by the Borrower hereunder shall become immediately due and payable; and/or

exercise all rights and remedies under any Financing Document or instruct the Security Agent to do so.

A notice of the Agent pursuant to Clause 20.2.2 may only be given (a) if an Event of Default pursuant to Clauses 20.1.1 (Payment Obligations), 20.1.9 (Insolvency and Rescheduling), 20.1.10 (Winding-Up), 20.1.16 (The Borrower’s Business) and 20.1.27 (Destruction of Project) has occurred and is continuing, or (b) if any other Event of Default has occurred and is continuing only after careful consideration of the reasonable concerns of the Borrower or in case the Majority Lenders have determined in their reasonable opinion that due to such Event of Default the ability of the Borrower to perform any of its obligations under the Financing Documents has been materially impaired.

Advances Due on Demand

require repayment of all or such part of the Advances on such date as it may specify in such notice (whereupon the same will become due and payable on the date specified together with accrued interest thereon and any other sums then owed by the Borrower under the Financing Documents); and/or

select as the duration of any Interest Period which begins whilst such declaration remains in effect a period of six months or less.

Waivers

Participation of the Guarantor

Upon the occurrence of an Event of Default the Agent will promptly inform the Guarantor thereof.

The Lenders may waive any Event of Default pursuant to Clause 20.4 (Waivers) only with the consent of the Guarantor.

AGENT, ARRANGER AND LENDERS

Appointment and Authorisation

No Obligation

to take any action to ascertain whether any Event of Default has occurred or is outstanding;

to ascertain the correctness of any representation made by the Borrower or any other party in connection with this Agreement or any other Transaction Document;

to inquire as to the performance by the Borrower or any other party of its obligations under this Agreement or any other Transaction Document, or any breach of the Borrower or any other party of its obligations under this Agreement or any other Transaction Document; or

to give notice to the Lenders of any information or event of which the Agent becomes aware otherwise than by notice given by a party to this Agreement or to any of the Advisers in accordance with this Agreement.

Reliance

Information Obligations

promptly upon receipt notify each of the Lenders affected thereby and PWC of any material information and notice received by it from the Borrower, any of its Shareholders or any of the Advisers and will, to the extent it has obtained a sufficient number of photocopies from the Borrower, any of its Shareholders or such Adviser, supply photocopies of relevant documents to the Lenders and PWC, together with a statement of the Agent thereto;

promptly notify each of the Lenders and PWC of the occurrence of an Event of Default or any default by the Borrower, any of its Shareholders or any other party in the performance of or compliance with its respective obligations under this Agreement and the other Transaction Documents of which the Agent has received notice from a party to this Agreement or any of the Advisers in accordance with this Agreement.

Compliance with Legal Provisions

Advisers

Liability

Agency

No Verification Duties

the accuracy and/or completeness of any statements, representations or warranties made in or in connection with this Agreement, the Security Agreements, the Shareholders’ Undertaking Agreement or any other Transaction Document;

for any information given to any of the Lenders in respect of the Borrower or any matter relating to the Facility;

the recoverability of any of the sums due or to become due under this Agreement;

any failure, omission or defect in perfecting any Security, or the enforceability or value of any Security; or

the legality, validity, effectiveness, adequacy or sufficiency of this Agreement, the Security Agreements and the other Financing Documents.

Transaction Analysis

Instruction by Majority Lenders

Indemnity

Same Rights and Liabilities, Business with the Borrower

Designation of New Office

Resignation

Appointment of Successor

Acceptance of Appointment

Arranger

Facility Office

Missing Communication

Majority Lenders’ Decisions

ADVISERS

The resignation or dismissal of an Adviser will be in accordance with its respective mandate.

Subject to the terms of the relevant mandate the Agent or the Arranger, as the case may be, will, if so instructed by the Majority Lenders cancel the appointment of an Adviser.

If the mandate of an Adviser is terminated prematurely for whatever reason, the Agent will, with the consent of the Majority Lenders and with the consent of the Borrower, appoint a successor at terms and conditions which are as similar to the terms and conditions on the initial mandate as is reasonably practical, and in such a manner that the duties of the relevant Adviser are continuously performed.

The Borrower hereby consents to the appointment of the Technical Adviser until six (6) months after Final Completion upon the expiry of its existing mandate.

FEES

Commitment Fee

Arranging Fee

Agency Fee

State Guarantee Fee

Upfront Fee

VAT

COSTS AND EXPENSES

Transaction Expenses

the carrying out of all due diligence enquiries and searches in connection with the Transaction Documents;

the negotiation, preparation and execution and translation of each of the Financing Documents and if any such party is involved in the negotiation of any Project Contract, the relevant Project Contract;

the completion and performance of the transactions contemplated in the Transaction Documents;

the activities of PWC pursuant to Clause 18.1.17 (Compliance with Conditions for State Guarantee and Government Grants);

the conduct of any audits; or

any exercise or attempted exercise of any right, power or remedy under any Financing Document or any failure to exercise any right, power or

remedy except where that failure is due to the wilful misconduct or gross negligence of, as the case may be, the Arranger, the Agent or the Security Agent;

Preservation and Enforcement of Rights

Registration Fee

Amendment Costs

Lenders’ Liabilities for Costs

INDEMNITY AND BREAKAGE COSTS

Indemnity

any reasonable cost, claim, loss, expense (including reasonable legal fees) or liability together with any VAT thereon, which it may sustain or incur as a consequence of the occurrence of any Event of Default or any default by the Borrower in the performance of any of the obligations expressed to be assumed by it in any of the Transaction Documents; and

any reasonable cost or loss it may suffer as a result of any claim or proceeding against it relating to its involvement in the transactions contemplated hereby or any use of the proceeds of the Facility.

Breakage Costs

any payment is made otherwise than on the last day of an Interest Period applicable thereto;

any other payment is made otherwise than on the due date therefore;

any Advance requested cannot be made because the Borrower has failed to fulfil a condition precedent; or

the Borrower refuses to accept a requested Advance,

SET-OFF

PRO-RATA SHARING

If at any time the proportion received or recovered by any Lender by way of set-off or otherwise (other than through the Agent in accordance with clause 9 (Payments) of the Pulp Mill Facility Agreement) in respect of its portion of any amounts due from the Borrower to the Lenders under this Agreement is greater than the proportion thereof which the Lender would have received through the Agent if distributed in accordance with clause 9 (Payments) of the Pulp Mill Facility Agreement (the difference between the amount received or recovered (after deduction of any costs incurred by the Lender in connection with such receipt or recovery) by the Lender and the amount which the Lender would have received or recovered had the recovery been received through the Agent if distributed in accordance with clause 9 (Payments) of the Pulp Mill Facility Agreement hereinafter called the “Excess Amount”), then:

such Lender will promptly notify the Agent and pay to the Agent an amount equal to the Excess Amount within three (3) Business Days of such notification;

the Agent will account for such payment to the Lenders (excluding the Lender having received the Excess Amount) as if it were a payment by the Borrower on account of the sum owed to the Lenders under this Agreement; and

the liability of the Borrower to the Lenders will be adjusted in accordance with the distribution of the Excess Amount among the Lenders,

if the Excess Amount or any part thereof thereafter has to be repaid to the Borrower by the Lender having received the Excess Amount, each of the Lenders will repay to the Agent for the account of such Lender such proportion of the amount received by it out of the Excess Amount (plus any interest legally demanded by the Borrower in respect of such proportion) as corresponds to the proportion of the Excess Amount which has to be repaid by the relevant Lender to the Borrower; and

sums recovered as a result of litigation started by a Lender to enforce its rights under this Agreement and resulting in an Excess Amount will only be shared with all Lenders other than Lenders which were aware of such litigation and did not join in such litigation without being legally prevented from doing so.

ASSIGNMENTS AND TRANSFERS

Assignments and Transfers by the Borrower

Assignments and Transfers by the Lenders

Each of the Lenders (a “Transferor”) may at any time assign all its rights and benefits under this Agreement or transfer its rights and obligations under this Agreement in whole or in part to the Guarantor, members of the European Central Bank System, banks, including the European Investment Bank and any promotional banks (Förderbanken), financial service providers, financial institutions, insurance companies, institutional investors, funds, pension funds, public pension schemes and similar institutions (a “Transferee”) subject to Clause 28.2.2 and any such transfer will comprise a pro rata share of the entirety of the Transferor’s rights and obligations in relation to this Agreement. Participations in any disbursement of an Advance may not be transferred independently from corresponding participations in Commitments.

A transfer will only be permissible:

if the amount of the Commitment and/or Advance, as the case may be, under the Facility which is transferred is not less than EUR 1 million applied rateably between the Transferor’s share in each outstanding Advance thereunder and its undrawn Commitment in relation thereto (unless the Transferee is a Lender or a Pulp Mill Lender, in which case a transfer shall be unrestricted as for the amount);

with the consent of the Borrower, such consent not to be unreasonably withheld provided that consent will not be required if such transfer is made following the occurrence of an Event of Default or is made to an affiliate (belonging to the same group of companies within the meaning of § 18 AktG) of a Lender or to another Lender provided there are no adverse tax or other detriments (e.g. Germany’s thin capitalisation rules, § 8a KStG) to the Borrower; and

following such transfer the circumstances envisaged in Clauses 10 (Illegality) or 11 (Increased Costs) would neither apply, nor reasonably be expected to apply and the Borrower would not have, and would not reasonably be expected to have, any obligations under Clause 12.1.2 (Taxes).

A transfer will only become effective upon execution by the Transferor and the Transferee and countersignature by the Agent of a transfer certificate in the form

of Schedule 10 (Transfer Certificate) (the “Transfer Certificate”) or, if later, at the time specified in the Transfer Certificate and the payment by the Transferee of a transfer fee of EUR 1,000. Upon the transfer becoming effective, and for such part of the Transferor’s rights and obligations, as is transferred, the Transferor shall be released from its obligations under the Financing Documents and all other related documentation, and its rights and obligations under such documents shall transfer to and vest in the Transferee provided that it will be the sole responsibility of the Transferee to ensure that any additional action which may be required for securing the valid transfer to it of any rights in respect of Security is taken.

The Transferor will give prompt notice of any proposed transfer to the Agent who will promptly inform the Borrower.

The Agent will promptly inform the Borrower of any perfected transfer.

The Borrower will undertake all reasonable efforts to assist the Arranger in all acts in connection with a syndication pursuant to this Clause 28.2 (Assignments and Transfers by the Lenders).

The Guarantor must consent to any transfer by the Lenders unless the Transferee is a central credit institution (zentrales Kreditinstitut), including the German federal bank (Deutsche Bundesbank), the European Investment Bank (EIB), any other promotional banks (Förderbanken), including KfW, provided that the transfer is undertaken for the purpose of refinancing.

Disclosure of Information

SUB-PARTICIPATIONS

CALCULATIONS AND EVIDENCE OF DEBT

Basis of Accrual

Prima Facie Evidence

In any legal action or proceeding arising out of or in connection with this Agreement, the entries made in the accounts maintained with the Agent and/or the Lenders are, in the absence of manifest error,  prima facie evidence of the existence and amounts of the specified obligations of the Borrowers.

A certificate of and determination by the Agent, Security Agent or a Lender as to the interest rate and amounts owed under the Financing Documents are, in the absence of manifest error, prima facie evidence of the existence and amounts of the specified obligations of the Borrower.

NON-APPLICABILITY OF § 181 BGB

§ 181 BGB does not (to the extent legally permissible) apply to any authorisation the Borrower gives to the Arranger, Agent, Security Agent and Lenders.

Each of the Agent and the Security Agent is entitled to administer the business of the consortium of Lenders in the name and for the account of each Lender. For this purpose, each Lender hereby grants power of attorney to each of the Agent and the Security Agent to submit and accept any declarations in connection with this Agreement and each Lender releases the Agent and the Security Agent (to the extent legally permissible) from the restrictions contained in § 181 BGB. If, and to the extent, a release from the restrictions contained in § 181 BGB is legally impossible, the relevant Lender shall promptly notify the Agent and the Security Agent thereof and shall ratify all acts of the Agent and the Security Agent which fall into the scope of § 181 BGB immediately without notice.

FORM REQUIREMENTS AND AMENDMENTS

No oral side agreements (Nebenabreden) have been made.

Any modification or amendment to this Agreement, including this Clause, and any waiver by the Agent or any of the Lenders of its rights under this Agreement, must be made in writing.

Any material modification or amendment of this Agreement, in particular any material (nicht geringfügig) amendments to the Investment and Financing Plan and any waivers with respect to the payment of principal and interest, require the prior consent of the Guarantor.

CONDITIONS OF THE STATE GUARANTEE

REMEDIES AND WAIVERS, CUMULATIVE RIGHTS, PARTIAL INVALIDITY

Remedies and Waiver

Cumulative Rights

Partial Invalidity

NOTICES

Communications in Writing

Addresses

to the Borrower:

to the Arranger:

to the Agent and/or Security Agent:

to the Lenders:

Communications or documents addressed to PWC in connection with this Agreement or any other Financing Document, not containing a provision corresponding to this Clause 35.2, shall be addressed to it at:

Delivery

Any communication or document made or delivered by one person to another under or in connection with the Financing Documents will only be effective when received (zugegangen), in particular:

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

if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

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 person identified with the Agent’s signature below (or any substitute department or person as the Agent shall specify for this purpose).

All notices from or to the Borrower and from or to the Guarantor shall be sent through the Agent.

GOVERNING LAW

JURISDICTION

COUNTERPARTS

CONCLUSION OF THE AGREEMENT (VERTRAGSSCHLUSS)

The parties to this Agreement may choose to conclude this Agreement by an exchange of signed signature page(s), transmitted by any means of telecommunication (telekommunikative Übermittlung) such as by way of fax or electronic photocopy.

If the parties to this Agreement choose to conclude this Agreement pursuant to sub-Clause 39.1 above, they will transmit the signed signature page(s) of this Agreement to Clifford Chance Partnerschaftsgesellschaft, attention Julia Krystofiak (e-mail: julia.krystofiak@cliffordchance.com, fax: +49 69 7199 4000) (the “Recipient”). The Agreement will be considered concluded once the Recipient has actually received the signed signature page(s) (Zugang der Unterschriftsseite(n)) from the parties to this Agreement (whether by way of fax, electronic photocopy or other means of telecommunication) and at the time of the receipt of the last outstanding signature page(s) by the Recipient.

For the purposes of this Clause 39 only, the Parties appoint the Recipient as their attorney (Empfangsvertreter) and expressly allow (gestatten) the Recipient to collect the signed signature page(s) from all and for all parties to this Agreement. For the avoidance of doubt, the Recipient will have no further duties connected with its position as Recipient. In particular, the Recipient may assume the conformity to the authentic original(s) of the signature page(s) transmitted to it by means of telecommunication, the genuineness of all signatures on the original signature page(s) and the signing authority of the signatories.

UniCredit Bank AG

the representations and warranties pursuant to Clause 14.1 (Representations and Warranties) of the Facility Agreement are correct as at the date hereof and will be correct immediately after the Advance is made;

no Event of Default or Potential Event of Default as set out in Article 20 of the Facility Agreement has occurred and is continuing or might result from the making of the Advance;

no Material Adverse Effect has occurred and is continuing;

the Assurance of Overall Financing is still fulfilled; and

the drawdown conditions for the requested Advance have been met [unless otherwise waived pursuant to Clause 3.3.2 (Drawdown Conditions) of the Facility Agreement].

A certified and up-to-date copy of the commercial register extract and the articles of association of the Borrower and the Sponsors.

A copy of the corporate authorisations and/or shareholder resolutions of the Borrower relating to the execution, delivery and performance of all Financing Documents entered into in connection with Project Blue Mill to which it is a party.

A certified copy of the Secretary Certificates of the Corporate Secretary of Mercer International:

authorising the execution, delivery and performance of all Financing Documents entered into in connection with Project Blue Mill to which Mercer International is a party as approved by Mercer International’s board of trustees; and

setting out the names and signatures of the authorised signatories for the signing of such documents duly certified to be true and correct.

Specimen signatures of the persons authorised to sign the Financing Documents and notices thereunder.

Original executed copies of the Transaction Documents, including any amendment agreements thereto, in each case, in full force and effect other than:

in the case of the Transaction Documents, which will be concluded or be in full force and effect upon first drawdown hereunder;

in the case of the Transactions Documents, which will not be amended in connection with this Agreeement; and

in the case of the Turbine Contract, which will be in full force and effect upon the payment of the down payment under the Turbine Contract,

Evidence that the Shareholders have paid into the Blue Mill Investment Account the following funds:

EUR 4,750,000 in the form of a Shareholder Loan;

EUR 1,750,000 in the form of a Repayable Shareholder Loan,

Evidence that the Government Grants for Project Blue Mill as contemplated in the Investment and Financing Plan will be granted for Project Blue Mill in favour of the Borrower as Direct Grants (GA-Zuschuss (Investment Incentives)) by the State of Saxony-Anhalt and Tax Grants (Investitionszulagen) by the Federal Republic of Germany.

The Financial Model and the agreed Base Case as well as the Investment and Financing Plan.

The Project Budget in accordance with the Financial Model.

All Authorisations required for Project Blue Mill and the performance of the Borrower’s obligations under the Transaction Documents required as of the first Drawdown Date as contemplated by Clause 14.1.5 (Authorisations) have been obtained.

The Borrower will further present copies of the Authorisations required for Project Blue Mill and the performance of the Borrower’s obligations under the Transaction Documents required as of the first Drawdown Date as contemplated by Clause 14.1.5 (Authorisations).

Report by the Insurance Adviser containing, inter alia, the confirmation that the insurances entered into are satisfactory.

Brokers’ letter(s) of undertaking, insurance cover notes and agreed draft policy wordings satisfactory to the Insurance Advisor.

The most recent audited financial statements of the Borrower.

The most recent audited accounts of each of the Sponsors and Shareholders.

All Advisers fees and amounts payable hereunder have been paid in full or will be paid in full out of the first Advance.

The Lenders are satisfied in all respects with the construction and operating arrangements for Project Blue Mill.

Evidence satisfactory to the Agent that SP Holding (on a fully diluted basis) holds at least 70.58 per cent. of the voting rights in the Borrower and has control over the board of directors of the Borrower and that SP Holding is a wholly owned subsidiary of Mercer International.

A legal opinion from the legal advisers to the Borrower, the Shareholders and the Sponsors, respectively, with respect to the obligations of Mercer International, SP Holding, and E&Z under the Transaction Documents to which they are a party.

A legal opinion of the Agent’s German legal counsel regarding the transaction in form and substance satisfactory to the Agent.

The waiver from the Pulp Mill Lenders regarding the application of funds standing to the credit of the civil claims works account in connection with the Shareholder Contributions by E&Z.

The Agent has received a duly completed irrevocable Drawdown Request not later than 11:00 a.m. on the fifth (5th) Business Day before the Drawdown Date proposed in the Drawdown Request.

The representations and warranties continue to be true and correct.

No Event of Default or Potential Event of Default has occurred and remains uncured or unwaived or would occur as a result of the making of the Advance to be drawn down.

Neither of the events mentioned in Clauses 5.1.1 and 5.1.2 has occurred.

All terms and conditions of the State Guarantee are met, no event has occurred, as a result of which PWC refuses to allow disbursements under this Agreement and the State Guarantee continues to be valid and in full force and effect.

Certificate by the Insurance Adviser stating that Project Blue Mill is sufficiently insured in accordance with the construction progress. Such certificate is not needed if the respective insurance company is obliged to inform the Lenders promptly of a termination of any insurance.

The Borrower has:

paid all due and unpaid fees and expenses due under any of the Financing Documents; or

instructed the Lenders to deduct the amount of such fees and expenses from the amount of the Advance to be disbursed to the Borrower and the amount of the Advance is sufficient to satisfy all such outstanding fees and expenses.

Lender

Commitment in Euro

UniCredit Bank AG

Arabellastrasse 14

D – 81925 München

attn.: Ruth Schneider

Tel.:    0049 (0)89 – 378 - 26963

Fax:    0049 (0)89 – 378 - 3326963

IKB Deutsche Industriebank AG

Wilhelm-Bötzkes-Straße 1

D - 40474 Düsseldorf

attn.: Jens Reinicke

Tel.:    0049 (0)211 – 8221 - 4936

Fax:    0049 (0)211 – 8221 - 2936

Total Commitments

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 their functions) or (b) the requirements of the European Central Bank.

On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Advance) and will be expressed as a percentage rate per annum.

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 Advances made from that Facility Office) of complying in respect of Advances made from that Facility Office.

The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom will be calculated by the Agent in accordance with the formula set out below (expressed as a percentage rate per annum):

   A x 0.01  

% per annum.

For the purposes of this Schedule:

“Fee Rules” means the Banking Supervision (Fees) Regulations 2000 or such other law as may be in force from time to time in respect of the payment of fees for banking supervision;

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

“Special Deposits” has the meanings given to it from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;

“Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules; and

the resulting figure will be rounded to four decimal places.

The Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all parties hereto any amendments or variations which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England, the Financial Services Authority and/or the European Central Bank (or, in any case, any other authority which replaces all or any of their functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all the parties hereto.

Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender:

its jurisdiction of incorporation and the jurisdiction of its Facility Office; and

any other information that the Agent may reasonably require for such purpose.

The percentages or rates of charge of each Lender for the purpose of A above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 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, Special Deposits and the Fee Rules 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.

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 pursuant to paragraphs 3 and 7 above is true and correct in all respects.

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 pursuant to paragraphs 3 and 7 above.

Any determination by the Agent pursuant to this Schedule in relation to the 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 of the parties to this Agreement.

[Drafting note: neben der Bürgschaftsurkunde sind an dieser Stelle die Allgemeinen Bestimmungen für Landesbürgschaften zur Wirtschaftsförderung des Landes Sachsen-Anhalt, Richtlinien über Bürgschaften als Regionalbeihilfen für Investitionskredite vom 8. Oktober 2007 (Runderlass des Ministeriums der Finanzen vom 8. Oktober 2007 – 34 – 32901) sowie die Bürgschaftsentscheidung (Schreiben vom 15. November 2011/19. Dezember 2011) einzufügen]

Material Damage All Risks (including Machinery Breakdown)

The Insured Parties

Borrower and any Subsidiary Companies;

The Agent and the Lenders

The Insured Property

Geographical Limits

Sum Insured

Indemnity

Period of Insurance

Main Exclusions

War, Civil War, etc., including Terrorism (until such time as insurance against acts of Terrorism becomes available in the international market on what the Security Agent accepts to be reasonable commercial terms);

radioactive contamination;

Costs incurred arising out of wear, tear, wasting or wearing away, gradual deterioration, rust, oxidation, corrosion or erosion but not consequent damage Wear and Tear and gradual deterioration but this shall not exclude consequent loss or damage;

Date Recognition Clause;

Loss of cash, banknotes, treasury notes, money orders, cheques or stamps

Vehicles licensed for road use.

Maximum Deductible

Main Extensions/Conditions

Including loss or damage arising from acts of Terrorism, strikes, riots, civil commotion and criminal/malicious damage (except that insurance against acts of terrorism will be excluded until such time as that insurance becomes available in the international market on what the Security Agent accepts to be reasonable commercial terms);

Unlimited Natural Perils cover, however for earthquake and flood with a annual maximum limit of EUR 250 million each;

Debris removal;

Professional Fees;

Local Authorities clause;

Waiver of Average;

Escalation Clause;

Expediting Expenses;

Computer Systems, Data Processing and Ancillary Equipment;

Malicious & Accidental Erasure of Data, replacement of computer records;

Full Machinery Breakdown, Pressure Explosion/Collapse; and

Temporary Removal and Inland Transit.

Business Interruption

The Insured Parties

The Borrower; and

The Agent and the Lenders,

Indemnity

Period of Insurance

Sum Insured

Maximum Deductible

Indemnity Period

Main Exclusions

Main Extensions/Conditions

Suppliers’ extension;

Denial of Access;

Failure of utilities extension (Water, Gas, electricity, telecommunications).

Third Party Liability

The Insured Parties

Borrower and any Subsidiary Companies;

The Agent and the Lenders

Period of Insurance

Indemnity

Death, bodily injury and disease (including mental shock) of any person;

loss or damage to any property and/or loss of use thereof;

Geographical Limits World-wide excluding direct exports to USA and Canada.

Limit of Indemnity

Maximum Deductible

Main Extensions/Conditions

Products Liability;

Cross Liabilities Clause;

World-wide jurisdiction clause;

Legal costs and expenses; and

Contingent Motor Liability.

Main Exclusions

Death of, or bodily injury to, or illness or disease contracted by, the employees of the Insured claiming indemnity arising out of or in the course of their employment;

Property belonging to or in the charge or under the control of the Insured;

Liability arising out of the use of mechanically propelled vehicles for which compulsory insurance or security is required by legislation, except whilst in use on private properties or with a special permit of the authorities;

The cost of making good loss of or damage to property indemnified under the insurance referred to in paragraph 1, “Material Damage All Risks Insurance” of this Minimum Insurance Schedule; and,

Liability arising from ownership, possession, use or control of any aircraft or watercraft.

Environmental Impairment Insurance (“Umwelthaftpflichtversicherung”)

The Insured Parties

The Borrower and any Subsidiary Companies;

The Agent and the Lenders

Period of Insurance

Indemnity

Limits of Indemnity

EUR 25,000,000 any one occurrence and in the annual aggregate in respect of liabilities to Third Parties.

Main Exclusions

Main Extensions/Conditions

Blanket coverage for module 2.1, 2.3, 2.4, 2.6 and 2.7 of the Umwelthaftpflicht-Modell des HUK-Verbandes; coverage for module 2.2. according to risk register provided

Loss Mitigation/Avoidance Costs with a sublimit of EUR 5,000,000 per occurrence and in the aggregate;

Gradual pollution (“Normalbetriebsschäden”) with a sublimit of EUR 10,000,000 per occurrence and in the aggregate;

Maximum Deductible Not exceeding EUR 250,000.

Environmental Damage Insurance (“Umweltschadenversicherung”)

The Insured Parties

The Borrower and any Subsidiary Companies;

The Agent and the Lenders

Period of Insurance

Indemnity

Limits of Indemnity

EUR 20,000,000 any one occurrence and in the annual aggregate in respect of liabilities to Third Parties.

EUR 4,000,000 any one occurrence and in the annual aggregate in respect of clean-up costs incurred to clean up the Project Site.

Main Exclusions

Main Extensions/Conditions

Coverage for module 2.1, 2.2, 2.3, 2.4 of the Umwelthaftpflicht-Modell des HUK-Verbandes according to risk register provided, blanket coverage for modules 2.6 and 2.7 within the risk description provided for the insured

Loss Mitigation/Avoidance Costs with a sublimit of EUR 6,000,000 per occurrence and in the aggregate;

Compensatory Measures (“Ausgleichssanierung”) with a sublimit of EUR 4,000,000 per occurrence and in the aggregate

Maximum Deductible Not exceeding EUR 250,000.

Machinery Breakdown Insurance for mobile working Machines

The Insured Parties

Borrower;

The Agent and the Lenders

The Insured Property

Geographical Limits

Sum Insured

Indemnity

Period of Insurance

Main Exclusions

War, Civil War, etc., including Terrorism;

radioactive contamination;

Costs incurred arising out of wear, tear, wasting or wearing away, gradual deterioration, rust, oxidation, corrosion or erosion but not consequent damage Wear and Tear and gradual deterioration but this shall not exclude consequent loss or damage;

Claims resulting from the use of equipment which is known to be in need of repair;

Damage occurring during marine transportation

Damages already present at the inception of the coverage.

Maximum Deductible

Main Extensions/Conditions

72 hours clause

Debris removal;

Protection and Removal Costs;

Automatic Increase Clause;

Waiver of Average;

Expediting Expenses;

Other Required Insurance

Insurance required by Law

Other Insurance