_____________________________________________________________________
Company Description
in connection with admission
to trading at
First North Bond Market
_____________________________________________________________________
Issue of DKK 500,000,000 Fixed Rate Bonds due 15 May 2018
Certified Advisor
Company Description
First North Disclaimer
First North Bond Market is an alternative marketplace operated by an exchange within the NASDAQ OMX
group. Issuers on First North Bond Market are not subject to the same rules as Issuers on the regulated
main market. Instead they are subject to a less extensive set of rules and regulations. The risk in investing in
an Issuer on First North Bond Market may therefore be higher than investing in an Issuer on the main
market. At least during the listing process all Issuers with financial instruments traded on First North Bond
Market have a Certified Adviser who monitors that the rules are followed. The Exchange approves the
application for admission to trading.
Notice to Prospective Investors
This company description (the “Company Description”) has been prepared by GlobalConnect A/S (the
“Issuer”, “GlobalConnect” or the “Company”) for the admission to trading on First North Bond Market of
the DKK 500,000,000 Fixed Rate Bonds due May 15th 2018 (referred to as the “Bonds” or the “Notes”).
The Company Description has been prepared on the basis that any offer of Bonds in any member state of
the European Economic Area which has implemented Directive 2003/71/EC and amendments thereto (the
“Prospectus Directive” and each such member state, a “Relevant Member State”) will be made pursuant to
an exemption under the Prospectus Directive, as implemented in that Relevant Member State, from the
requirement to publish a prospectus for offers of Bonds.
Accordingly, any person making or intending to make an offer in that Relevant Member State of the Bonds
may only do so in circumstances in which no obligation arises for the Issuer or Pareto Securities AS,
Dronning Mauds gt. 3, NO-0115 Oslo, Norway (“Pareto” or “the Manager”) to publish a prospectus
pursuant to article 3 of the Prospectus Directive or supplement a prospectus pursuant to article 16 of the
Prospectus Directive, in each case, in relation to such offer. Neither the Issuer nor Pareto have authorized,
nor do they authorize, the making of any offer of Bonds in circumstances in which an obligation arises for
the Issuer or Pareto to publish or supplement a prospectus for such offer. No person has been authorized
by the Issuer or Pareto to give any information or to make any representation other than those contained
in this Company Description in connection with the issue or sale of the Bonds and, if given or made, such
information or representation must not be relied upon as having been authorized by the Issuer or Pareto.
The distribution of this Company Description and the offering or sale of the Bonds in certain jurisdictions
may be restricted by law. Persons into whose possession this Company Description comes are required by
the Issuer and Pareto to inform themselves about and to observe any such restriction.
The Bonds have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities
Act”) and may not be offered or sold within the United States or to, or for the account or benefit of, U.S.
persons except in certain transactions exempt from the registration requirements of the Securities Act.
There are no legal restrictions on the transferability of the Bonds in accordance with the procedures of VP
Securities ASA, the minimum denominations described in this Company Description and applicable laws.
This Company Description does not constitute an offer of, or an invitation by or on behalf of the Issuer, the
Manager or any of them to subscribe for or purchase, any Bonds. The Bonds have not been assigned a
rating by a rating agency.
2
Company Description
Table of Contents
1
Company Data and Responsibility Statement .................................................................................. 4
2 Transaction characteristics.............................................................................................................. 5
2.1
Trustee ............................................................................................................................................... 5
3
GlobalConnect in brief..................................................................................................................... 7
4 Key market trends .......................................................................................................................... 8
4.1
Technology ........................................................................................................................................ 8
4.2
Fibre networks and roll-out in Denmark ........................................................................................... 8
5 Strategic positioning ..................................................................................................................... 10
5.1
Fibre and telecom markets – relevant players ................................................................................ 10
5.2
Key competitor characteristics ........................................................................................................ 11
6 The Company................................................................................................................................ 12
6.1
Vision and mission ........................................................................................................................... 12
6.2
Group structure and services .......................................................................................................... 13
6.3
Key events – past, present and future............................................................................................ 13
6.4
Business model ................................................................................................................................ 13
6.5
Network characteristics ................................................................................................................... 15
6.6
GlobalConnect’s competitive strengths .......................................................................................... 15
6.7
Group turnover and market penetration ........................................................................................ 15
6.8
Most significant markets and clients ............................................................................................... 16
6.9
Patents ............................................................................................................................................. 17
6.10
Litigation .......................................................................................................................................... 17
6.11
Reasons for the decision to apply for admission to trading ............................................................ 17
6.12
Most recent development ............................................................................................................... 17
7
Risk factors ................................................................................................................................... 18
8
Financial information .................................................................................................................... 23
9 Board of Directors and Management ............................................................................................ 24
9.1
Statement of past records ............................................................................................................... 26
10 Ownership structure ..................................................................................................................... 27
10.1
Related Parties Transactions ........................................................................................................... 27
10.2
Financial Calendar ........................................................................................................................... 27
11 Certified Advisor ........................................................................................................................... 28
12 Bond Agreement........................................................................................................................... 29
13 Glossary .......................................................................................................................................... 70
3
Company Description
1
Company Data and Responsibility Statement
Company data
GlobalConnect A/S
Hørskætten 3
DK-2630 Taastrup
Phone: +45 7730 3000
CVR no: 26759722
(referred to as the “Issuer”, “GlobalConnect” or the “Company”)
Auditors:
BDO Statsautoriseret revisionsaktieselskab
Havneholmen 29
DK-1561 Copenhagen V
The Issuers responsibility
GlobalConnect A/S is responsible for this Company Description in accordance with Danish law.
The liability statement of the Board of Directors
We declare that, to the best of our knowledge, the information provided in the Company Description is
accurate and that, to the best of our knowledge, the Company Description is not subject to any omissions
that may serve to distort the picture the Company Description is to provide, and that all relevant
information in the minutes of board meetings, auditors’ records and other internal documents is included
in the Company Description.
GlobalConnect A/S, Taastrup, October 30th, 2013.
____________________________
Niels Ravn, Chairman of the Board
______________________________
Niels Zibrandtsen, Managing Director
4
Company Description
2
Transaction characteristics
The key characteristics of the transaction are as follows:
Issuer:
Amount:
Issue Price:
Coupon:
Settlement Date:
Tenor:
Status:
Security:
Guarantors:
Bond Trustee:
Documentation:
Securities Depository:
Trading:
Sole Lead Manager:
GlobalConnect A/S
DKK 500 million
100.00%
5.70% p.a.
15 May 2013
5 years
Senior secured
On-demand guarantees from the Guarantors, share pledge over the shares in
the Guarantors, pledge on any intra-group loans to any Guarantor and pledge/
charge over the Guarantors and Issuers fixed and floating assets in already
issued mortgage deeds. The total amount of mortgage deeds in properties,
equipment and machinery etc. is DKK 347 million. The mortgage deeds have
been established during the period 2000 – 2005 with the value being set by a
financial institution. The pledged amount does not necessarily represent the
market value of the underlying assets and hence it does not provide an idea to
which extent the underlying assets cover the obligations to the bondholders,
as the relationship between the pledged amount and the market value of the
underlying assets has not been re-evaluated since the establishment of the
mortgage deeds during the above-mentioned period of time.
Four 100 per cent owned subsidiaries of the Issuer, GigaContent A/S, Supertel
A/S, GlobalConnect GmbH and GC-BO A/S.
Norsk Tillitsmann ASA
Norwegian law
Verdipapirsentralen ASA
First North Bond
Pareto Securities
Any investor shall be aware that by virtue of being registered as a Bondholder (directly or indirectly) with
the Securities Depository, the Bondholders are bound by the terms of this Bond Agreement and any other
Finance Document. The Finance Documents are in accordance with Norwegian market practice not publicly
available but can be obtained from the Bond Trustee upon request.
The terms and conditions of the issue are described more in detail in the Bond Agreement, which is an
integrated part of this Company Description, c.f. section 12.
2.1
Trustee
The Issuer has entered into an agreement with Norsk Tillitsmann to act as Bond Trustee in this transaction.
The Bond Trustee shall monitor the compliance by the Issuer of its obligations under this Bond Agreement
and applicable laws and regulations which are relevant to the terms of this Bond Agreement, including
supervision of timely and correct payment of principal or interest, (however, this shall not restrict the Bond
Trustee from discussing matters of confidentiality with the Issuer), arrange Bondholders’ Meetings, and
make the decisions and implement the measures resolved pursuant to this Bond Agreement. The Bond
Trustee is not obligated to assess the Issuer’s financial situation beyond what is directly set out in this Bond
Agreement.
5
Company Description
The Issuer may relate to the Bond Trustee as a representative of all the Bondholders, and may reject
Bondholders that make direct claims on the Issuer. In the event of conflict or a demand for renegotiation,
the Issuer may discuss various options regarding procedure with the Bond Trustee in confidence.
For full detail of the role of the Bond Trustee, please refer to Sections 19 and 20 of the Bond Agreement.
There are no other contractual obligations between the Issuer and the Bond Trustee and to the best of the
knowledge of the Board of Directors of the Issuer; the Bond Trustee does not have any conflicts of interest
with respect to representation of the Bondholders vis-á-vis the Issuer.
6
Company Description
3
GlobalConnect in brief
GlobalConnect is the leading alternative provider of tele and data communication services in Denmark. The
Company owns 10,000 km of fibre network in Denmark, Sweden and Germany and has established 7,000
m2 of data centres in different locations in Denmark and Germany.
The Company is headquartered in Taastrup, Denmark, and employs approximately 200 employees.
GlobalConnect has a broad and diversified customer base including wholesale and direct clients like e.g.
TDC, ”3”, British Telecom, Vestas, Danish Crown, Nordea, Verizon, Kabel Deutschland and Vodafone. The
Company has long-term agreements with 99% of all clients. The average contract tenor for wholesale
clients is eight years and approximately 93% of all contracts are renewed.
The Company generated net revenues in 2012 of DKK 433.3 million, which resulted in a net profit of DKK
21.5 million. The Company had by the end of 2012 total assets of DKK 1,699.4 million.
ZS Holding and Paradigm Ventures LLC are the largest shareholders with 82.74% of the shares (GlobalConnect A/S holds 8.53% of own shares). Largest shareholder is ZS Holding (CEO Niels Zibrandtsen and family)
controlling 76.31% of the Company.
7
Company Description
4
Key market trends
According to studies from Cisco, global IP traffic has increased eightfold over the past 5 years, and is
expected to increase threefold over the next five years. IP traffic is expected to grow at a compound annual
growth rate (CAGR) of 29% from 2011 to 2016.
New applications will require more bandwidth with video/TV, E-medicine, Cloud solutions (requiring larger
up-load capacity), browsing and a tendency towards being “always on”, as consumers get more and
increasingly sophisticated devices.
Further to this, a growing amount of internet traffic is originating with non-PC devices. Globalization and
outsourcing is the trend and the industry has seen steady price reduction on equipment.
From a competitive point of view, fibre has virtually no capacity limitations as opposed to wireless
technologies and the industry provides high entry barriers meaning that access to network is imperative;
ownership of core networks provide economies of scale. As time to market is a key factor in this market it is
an interesting fact is that ”money does not help” – it still takes time to dig down fibre!; hence the
imperative of network ownership.
4.1
Technology
Fibre is regarded as a future proof sustainable technology. This is mainly due to the following characteristics:
4.2
Fibre networks and roll-out in Denmark
According to the Danish Erhvervsstyrelsen’s latest overview of the fibre roll-in in Denmark, ”Bredbåndskortlægning 2012”, more than 41% of all homes and enterprises had the possibility to be connected to a fibre
network in 2012.
The largest cities, Copenhagen, Århus, Ålborg and Odense are not yet fully covered with fibre access, as is
the case in other bigger city and industrial areas like Helsingør, Frederikssund, Roskilde, Køge, Nyborg,
Viborg, Holstebro, Herning, Hjørring and others.
The main reason for this is the strategy background for fibre rollout by TDC and the utility companies. The
fibre strategy of the utility companies are different from company to company, however overall, they aim
8
Company Description
to reach as many households as possible within their own region. Approximately 32 utility companies
operate regionally in Denmark.
GlobalConnect’s fibre strategy is based on order driven least cost roll-out. Through strategic focus and
planning GlobalConnect builds out fibre infrastructure in the large cities as well as industrial areas.
In terms of established networks, TDC is by far the largest player in the Danish market, cf. below.
TDC is expected to continue expanding their fibre network until the targeted forecast of 75,000 km is
reached by 2020.The fibre networks of other telecom companies will still be much more limited compared
to that of GlobalConnect.
It is less predictable how the networks of the approx. 32 utility companies will evolve. A more modest
growth is expected, as many of the utility companies are operating locally in more geographic limited areas
focusing on FTTH (Fibre To The Home).
9
Company Description
5
Strategic positioning
The Company is a key player in an industry with high entry barriers and a constant requirement for higher
bandwidth and capacity. The Company’s most important strategic focus areas are as follows:
Full service provider:
 As a full service provider of data and telecommunication solutions for the Danish business market,
GlobalConnect is an integrated and real alternative to TDC, the current market leader – the old
incumbent.
 A more attractive segment with relatively lower competition sensitivity compared to the FTTH and
mobile telephony segment.
Ownership of assets:
 Total ownership of ducts and a state-of-the-art optical fibre backbone and access technology with
virtually unlimited capacity and a Danish/North European footprint is the core for GlobalConnect’s
operational activity.
 Total ownership of own data centres with own fibre access enables attractive cross selling.
 Many competitors base their business on leased lines and are subject to margin squeeze.
High utilization of assets and long-term customer agreements:
 Increased utilization of the network is reached via a structured and strategic expansion to business
customers thus enabling a higher utilization of the network – i.e. CAPEX optimization.
 Long-term inflation-regulated customer agreements (average tenor eight years in Denmark/ slightly
longer in Germany).
 High degree of “re-sale” - currently 92.6% of expired contracts are renewed.
Strategic objective to become #1 or #2 in the different markets:
 Currently, no infrastructure expansion in Sweden, as the market is less attractive compared to the
German market and the Danish Value Adding Services market.
 Services in Sweden solely for Danish and German clients operating in Sweden.
 Geographical expansion in Northern Germany (Schleswig-Holstein and Mecklenburg
Vorpommern) focusing on Tier 2 cities. Fibre penetration in Northern Germany is lagging 57 years compared to the Nordic area.
 Expansion of Cloud solutions based on proven technology and scalability.
5.1
Fibre and telecom markets – relevant players
GlobalConnect is active along the whole value chain and across a number of different markets segments, cf.
below. The key competitors in the Danish market are shown below.
10
Company Description
5.2
Key competitor characteristics
11
Company Description
6
The Company
In 1997 the company Zone Systems broke the state monopolies in the Scandinavian telecommunications
markets by building a transmission link between Sweden and Denmark. The transmission was based on
microwave radio. This was the beginning of GlobalConnect.
In 1998 Zone Systems participated in Denmark's first optic cable trenching operation, and Zone Systems
was restructured by separating the company's activities into two businesses. One company, Zone Systems
A/S, would focus on hardware products for broadcast and telecom. The second company, GlobalConnect
A/S, would focus on fibre optic networks and services for telecommunications.
During 1999 GlobalConnect's fibre optic network expanded to cover most of Denmark and northern
Germany. In order to strengthen its finances GlobalConnect received additional capital from the U.S.
venture fund Paradigm Ventures in March 1999. Later the same year the first major service contract for
fibre optic networking was signed with the first international telecommunications operator, and it was soon
followed by a number of other important contracts.
The first fibre route went from Copenhagen to Esbjerg and began operation in 1999, and the final
deployment of a full ring structure, which connected Copenhagen to Hamburg, was completed in December 2000.
In 2000 GlobalConnect started its actual data and telecommunications business. Prior to this period
GlobalConnect's business was primarily project driven, focusing on the development and construction of
fibre-optic networks, and GlobalConnect was engaged in the pre-selling of network capacity. In 2001
GlobalConnect built an additional fibre ring from Kolding to Sæby, on to Gothenburg in Sweden, and back
to Copenhagen.
In 2001 GlobalConnect's network became fully operational, and the company began offering network
services. Dark fibre had been the main product of GlobalConnect, but transmission capacity was now
rapidly increasing in importance as the main product.
Today GlobalConnect offers a wide range of products and services to innovative, cost-conscious IT and
telecommunications companies and many others who prefer an independent supplier of network solutions.
6.1
Vision and mission
The Company’s vision is to be the leading tele- and data communication service provider in Denmark and a
significant player in the markets in which the Company decides to operate. As an alternative to the market
leaders in Denmark and Germany respectively the Company’s mission is to be the preferred of communication services in Northern Europe.
Preferred:
GlobalConnect wants its customers to buy its services more than once and to choose GlobalConnect as
their preferred future supplier. GlobalConnect wants satisfied customers.
Alternative supplier:
GlobalConnect develops continuously new alternative services to meet the customers changing requirements. GlobalConnect wants the customers to benefit from the latest technology.
Communication services:
GlobalConnect provides leading edge professional tele- and data communication services based on its own
country wide fibre infrastructure. GlobalConnect wants the customers to improve their communication efficiency
Northern Europe:
GlobalConnect provides services in Denmark, northern Germany and south of Sweden on its own network
12
Company Description
and globally via its carrier class partners. GlobalConnect wants to provide the customers a single point of
supply.
6.2
Group structure and services
The Company offers a wide range of products and services from different companies within the Group.
Besides products and services rendered from the parent company, GlobalConnect A/S, products and
services are also offered from four key subsidiaries:
6.3 Key events – past, present and future
1997 –
: Broke the monopoly in Denmark and Sweden.
1998 –
: GlobalConnect A/S is established.
1997 – 2011 : Pioneered with new technology and business models.
2001 –
: First fibre ring established in Denmark and Germany.
2002 –
: Creation of a professional Board of Directors.
2005 –
: First major German contract and first 10 Gbit/s systems (and getting larger).
-> 2012
: Large contracts and strong contracts, IP telephone services and Cloud solutions.
Today –
: Largest supplier of fibre, data centres and cloud solution, fibre network in Denmark,
Sweden and Germany, a significant part of all Danish internet traffic passes through
GlobalConnect’s network.
Future –
: Further expansion in Schleswig-Holstein and Mecklenburg Vorpommern, additional Cloud
and Value Adding Services; further meshing to reach more business in Denmark, content
services part of future portfolio, DKK 1bn in turnover target.
6.4
Business model
The Company’s business model is centred on four key pillars, cf. below.
It is particular worth noting that the Company pursues an investment policy, under which most network
roll-out is solely based on signed customer contracts. In addition to this, most investments are covered by
the first contract or contracts, if needed (one pair of fibres) on a Net Present Value basis. Considering the
fact that one cable typically contains 72 pairs of fibres this illustrates a second important pillar, namely that
the Company can sell additional fibre and transmission capacity without incurring additional material
investments.
13
Company Description
All contracts are irrevocable by the customers and are primarily set up as lease/ rent agreements or as
IRU’s (Indefeasible Rights of Use)
The long-term structure of the contracts with tenors up to 23 years secures a predictable cash flow as
shown in the graph below. The graph shows the Future Contracted Cash Payment, or the value of existing
signed contracts. Most contracts are index-regulated according to the development in the Danish CPI.
The FCCP of the Company’s existing contract portfolio without any renewal of existing contracts or new
sales totalled DKK 1.3bn. For the lifetime of the bond, 2013 – 2018, FCCP totalled DKK 826 million.
14
Company Description
With estimated contract renewal rates of 50% and 85%, FCCP amounts to DKK 3.2bn and DKK 4.5bn,
respectively. These figures do not include any new sales. The Company’s contract renewable rate has
remained stable at a high level and in the years 2010 – 2012 amounted to 92.8%, 94.2% and 92.6%,
respectively.
The strength of the contract portfolio is underlined by the fact that operations can be run with 45 – 50
FTEs, in a no-growth scenario with no CAPEX. This will improve the Company’s cash flow with approximately DKK 250m on an annual basis.
6.5
Network characteristics
The Company operates a 10,000 km duct based, redundant high-end quality optical fibre backbone network, of which 1,600 km is located in Northern Germany. An additional 2,100 km high capacity network
covering Oslo, Stockholm, Gothenburg, Malmo and Copenhagen secures a “Scandinavian” ring, of which
most is leased from national operators.
Maintenance and surveillance are carried out from the Company’s own Network Operation Centre in
Taastrup on a 24/7 basis.
A fine meshed network in Denmark ensures the sale of more products with an efficient CAPEX utilization.
In Germany the network will be further expanded – primarily ”highways”. With the exception of Hamburg
the focus will be on Tier 2 cities in Schleswig-Holstein and subsequently Mecklenburg Vorpommern.
6.6
GlobalConnect’s competitive strengths
The Company’s business model also secures several competitive strengths. In brief these can be
summarized as follows:
6.7
Group turnover and market penetration
In 2012, the turnover of the Group amounted to DKK 433 million. The majority of the turnover was
generated in the parent company and the German subsidiary, GlobalConnect GmbH. A distribution of the
turnover on Group companies is shown below:
15
Company Description
The Company expects that the subsidiaries in the
years to come will contribute with a larger proportion of the overall result.
In the beginning of 2013 Fyns Optiske Net A/S
was demerged and SuperTel A/S renamed to GC
Cloud A/S.
The Company’s estimated market shares based on 2012 turnover are shown below:
Markets
Network services on fibre to enterprises
Fibre networks for tele- and broadcast
GlobalConnect
Total (DKKm)
164
80
Market Size (DKKm)
800
230
GlobalConnect
Market Share
21%
35%
14
5
64
1
62
26
17
433
150
450
360
n/a
n/a
n/a
n/a
n/a
9%
1%
18%
n/a
n/a
n/a
n/a
n/a
Internet on fibre, B2B
IP Transit
Housing
Hosting/Cloud
GmbH
SuperTel A/S
Other
Total
6.8
Most significant markets and clients
The Company has a broad and diversified client portfolio of approx. 1,100 clients of which 680 are serviced
by the Parent Company, GlobalConnect A/S. The Company does not consider any single customer to have a
paramount influence on the Company’s result.
In the early years, the Company primarily focused on indirect sales, i.e. sales to carriers within telecom, ITIntegrators and IT-service providers. The focus on indirect sales established GlobalConnect with a wide
spread fibre backbone and large, long-term contracts.
From 2007 the Company also focused on direct sales, i.e. sales to end-customers. This group includes large
corporate customers in Denmark within segments like Finance, Production and Media. Besides data
network connections, many Added Value Services are developed and sold in this segment (internet, IP
Telephony, hosting, remote backup).
In 2012, the turnover of the Parent Company constituted DKK 328 million. Indirect sales amounted to DKK
217 million distributed on 120 customers, of which Top-10 customers represented 47% of the total indirect
customer turnover. The estimated market share in this segment was approx. 40%.
Likewise, direct sales constituted DKK 111 million distributed on 557 customers, of which Top-10 customers
represented 29% of the direct customer turnover. The estimated market was approx. 15%.
16
Company Description
The corresponding key figures (2012) for the subsidiaries are as follows:
SuperTel A/S:
Turnover DKK 26.3 million, distributed on 287 customers. Corporate and wholesale customers drive the
turnover through interconnects with large telcos.
GigaContent A/S:
Turnover DKK 12.6 million distributed on 28 customers. The turnover is based on broadcasters, production
companies and corporate customers. A large part of the turnover is based on sport events and broadcasting
of financial information.
GlobalConnect GmbH:
Turnover DKK 61.5 million distributed on 96 customers. Telcos/mobile/cable providers are the largest customers. Direct sales were initiated in 2012.
6.9
Patents
The Company has currently not registered any patents.
6.10 Litigation
A customer’s bankruptcy has filed a claim against the company for partial reimbursement for fibre
contracts purchased on IRU-terms of DKK 34.6 million. The Company’s management considers the claim
unjustified. The case has been taken to arbitration and a ruling is expected March 2014.
6.11 Reasons for the decision to apply for admission to trading
The Company considers First North Bond Market as an attractive platform when securing transparency of
the Company’s operations and development.
Admission of the Company’s bond issue to trading on First North Bond Market will contribute to the
spreading of knowledge about the Company and will increase the interest with business partners and
customers.
Admission of the Company’s bonds to trading on First North Bond Market has been approved and the first
trading date is expected to be November 4th, 2013.
6.12 Most recent development
In order to streamline GlobalConnect’s focus on the Business to Business market and related products, it
has become clear to the Issuer that GC-BO, with its focus on Business to Consumer products to antenna
associations, no longer fits into GlobalConnect’s overall strategy. Furthermore, GC-BO has not achieved the
targets set up for the company regarding revenue and customer intake and the market conditions have
changed with the sale of STOFA to Energy Syd.
As GC-BO has not been able to meet its targets, both with respect to revenue and profitability, combined
with changing market conditions, the Issuer is of the opinion that substantial investments in GC-BO will
have to be made. GlobalConnect has therefore decided to sell off the entity. By doing so, the
GlobalConnect group will prevent further losses from the GC-BO activities and at the same time secure the
book value of the net assets.
The Issuer is of the opinion that the sale of GC-BO will be favourable for the Bondholders as it will
strengthen the Issuer’s focus on its core business. Furthermore, the acquiring party will enter into fibre
agreements with the Issuer, which is expected to increase the Issuer’s revenues.
As a consequence of the above decision, the Issuer has requested the Trustee that GC-BO is released from
its guarantee liabilities and security under the Finance Documents in connection with a sale in accordance
with the Share Pledge Agreement between the Issuer and the acquirer of GC-BO. It should be underlined
that none of the pledged assets belong to GC-BO.
17
Company Description
7
Risk factors
Mega Trends
Overall demand for the products and services offered by the Issuer is driven by three global megatrends:
Strong and growing demand for data transmission capacity; strong demand for data security and strong
demand for cost efficiencies. Should either of these trends fail to materialize or diminish in strength or
materialize in a manner unforeseen by the Issuer it could adversely affect the growth of Issuer’s business,
results of operations or financial condition.
Customer Demand
The Issuer enjoys a well-diversified customer base in Denmark and Germany and the Issuer has no
dependence on a single or few contracts or customers. Thus, the Issuer’s financial exposure to adverse
market developments in Denmark and Germany is limited. However, adverse developments in the overall
economy may lead to bankruptcies among the Issuer’s customers, which could adversely affect the Issuer’s
business, results of operations or financial condition.
Competition
The products and services supplied by the Issuer generally represent a small part of the customers’ total
costs. Thus, the primary competitive parameters in the Issuers business, tends to be the quality and
performance of products delivered and services rendered. The Issuer competes with both smaller
specialized companies and large companies, some of which have significantly greater resources than the
Issuer. If the Issuer is unable to sustain the highest standards of quality assurance it may face significant
competitive pressure from other participants in the market resulting in pricing pressures, lower sales and
reduced margins, which could adversely affect the Issuer’s business, results of operations or financial
condition.
Technological Development
To maintain its competitive advantages the Issuer must continue to develop new service offerings and
products, and to update existing technologies in order to meet changing customer demand and to compete
with offerings from other market participants. Rapid and frequent technology and market demand changes
can require substantial new capital expenditures. If the Issuer is unable to successfully address these issues,
it could have an adverse effect on the Issuer’s market position and on its business, results of operations or
financial condition.
Growth
The Issuer has grown and expanded significantly in recent years, and plans to grow further in the coming
years. The Issuer expects that such further expansion, whether organic or acquired, will place significant
demands on the management, as well as on administrative, operational, and financial resources. If the
Issuer is unable to expand it’s operational, financial, and management systems in a manner that supports
the expected growth, or is unable to attract, motivate and manage a skilled workforce, the Issuer may not
be able to continue to satisfy customer demands. If the Issuer expands the business too rapidly in
anticipation of increased customer demand that does not materialize, the increase in operating expenses
could exceed revenue growth and as a result reduce net income. Furthermore the Issuer’s planned growth
will require capital expenditures, which may put pressure on the Issuer’s financial resources. Thus if the
Issuer is unable to manage its growth, it could have an adverse effect on the Issuer’s business, results of
operations or financial condition.
Operational Risks
The Issuer’s products and services are subject to a number of operating risks including:
18
Company Description




mechanical and technology failures;
human error;
acts of God; and
terrorism.
The occurrence of any of these events may disrupt the Issuer’s business or result in damage to or loss of
third party property, injury to personnel as well as reputational damage. If any of these events were to
occur, the Issuer could be exposed to liability for resulting damages, possible penalties or otherwise incur
substantial losses, and insurance or customer indemnifications may be unavailable or inadequate to protect
the Issuer against these risks, all of which could have a material adverse impact on the Issuers business,
operating results or financial condition.
Key Employees
The Issuer depends on the continued services of key employees, including the CEO and senior management
and personnel who possess scientific, marketing, engineering, project management, financial and
administrative skills that are important to the operation of the Issuer’s business. There can be no assurance
that the Issuer will be able to attract, develop or retain personnel with such skills, and the Issuer’s ability to
meet operational requirements and future growth and profitability may be affected by the scarcity of key
employees. The loss or an extended interruption in the services of a substantial number of key employees,
or the inability to attract or develop a new generation of key employees, could have a material adverse
effect on the Issuer’s business, financial condition or results of operations.
Currency
Fluctuations in currency exchange rates, including in Euros and US Dollars, relative to Danish Kroner may
adversely affect the Issuer’s results of operations, cash flows or financial condition. Just 23% of the
company’s turnover is in currency and most of it is in EUR.
Debt Obligations
The Issuer has debt obligations and is required to dedicate a portion of its cash flows to service the debt,
which reduces cash available to fund acquisitions and to finance operations, capital expenditures, working
capital and other general corporate purposes. Furthermore, the level of indebtedness may render the
Issuer unable to secure new credit facilities when required, either on commercially attractive terms or at
all. These or other consequences or events could have a material adverse effect on the Issuer’s ability to
satisfy its debt obligations as they fall due and, as a result, could have a material adverse effect on its
business, results of operations or financial condition.
Besides the DKK 500 million bond issue the company has mortgage loan of DKK 10 million with final
maturity in 2032. The company has also a short term working capital facility of currently DKK 100 million.
The Bond Agreement allows for a maximum Working Capital Facility of DKK 120 million, c.f. section 1 in the
Bond Agreement. Finally, the Issuer has entered into a DKK 50 million short term loan facility with Limb
Finance A/S. This facility matures in December 2013.
Liquidity
The Issuer’s ability to make payments on and to refinance its debt, and to fund planned capital
expenditures and other strategic investments will depend on its ability to generate cash in the future. This,
to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other
factors that are beyond the Issuer’s control. There can be no assurance that the Issuer’s business will
generate sufficient cash flows from operations or that future debt and equity financing will be available in
an amount sufficient to enable the Issuer to pay its debts as they fall due or to fund other liquidity needs.
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Company Description
Suitability
The Bonds may not be a suitable investment for all investors. Each prospective investor in the Bonds must
determine the suitability of that investment in light of its own circumstances. In particular, each
prospective investor should:





have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the
merits and risks of investing in the Bonds and the information contained or incorporated by
reference in this Company Description;
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Bonds and the impact the Bonds will have on its
overall investment portfolio;
have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Bonds, including Bonds where the currency for principal or interest payments is different from the
potential investor’s currency;
understand thoroughly the terms of the Bonds and be familiar with the behaviour of any relevant
indices and financial markets; and
be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear the
applicable risks.
Credit Risks
The Issuer may become unable to pay interest, principal or other amounts on or in connection with the
Bonds, which may affect the value of the Bonds adversely. Changes in the market’s perception of the
Issuer’s creditworthiness may also affect the value of the Bonds adversely.
Registration
The Bonds will be registered with Verdipapirsentralen ASA (VPS) and payment of interest, principal or other
amounts on or in connection with the Bonds will be made through VPS. The Bondholders will thus rely on
VPS’ procedures for transfer, payment and communication with the Issuer.
Modification, Waivers and Substitution
The terms of the Bonds contains provisions for calling meetings of Bondholders to consider matters
affecting their interests generally. These provisions permit defined majorities to bind all Bondholders
including Bondholders who did not attend and vote at the relevant meeting and Bondholders who voted in
a manner contrary to the majority.
Legislative Changes
The terms of the Bonds are based on Norwegian law as in effect on the issue date May 15th 2013 and no
assurance can be given as to the impact of any possible judicial decision or change to Norwegian law or
administrative practice after said date.
Liquidity
The Bonds may have no established trading market when issued, and one may never develop. If an
effective market does not develop, the Bonds may not be very liquid. Therefore, investors may not be able
to sell their Bonds easily or at prices that will provide them with a yield comparable to similar investments
that have a developed secondary market. Illiquidity may have a material adverse effect on the market value
of Bonds. The Issuer expects the liquidity of the Bonds to be limited.
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Company Description
Early Redemption
Under the terms of the Bonds the Issuer may under certain circumstances redeem the Bonds prior to the
Redemption Date, i.e. May 15th 2018.
Restrictions on Resale
The Bonds are subject to certain restrictions on resale and other transfer thereof as set forth in the section
entitled “Notice to Prospective Investors”. As a result of these restrictions, the Issuer cannot be certain of
the existence of a secondary market for the Bonds or the liquidity of such a market if one develops.
Consequently, Bondholders must be able to bear the economic risk of their investment in the Bonds for the
terms of the Bonds.
Market volatility
The market price of the Bonds may be volatile and subject to significant fluctuations caused by various
factors, many of which not directly related to the Issuer. Factors having a potential impact on the price of
the Bonds include actual or anticipated fluctuations in the results of the operations of the Issuer or its
competitors, circumstances, trends or changes in the markets in which the Issuer operates, changes to the
market’s valuation of other corresponding companies, changes to management and as well as general
macroeconomic conditions.
Tax Risk
Prospective investors should be aware that the investment in the Bonds may have unforeseen tax
implications. Prospective investors should seek independent advice relating to tax risks prior to making a
decision to invest in the Bonds.
Exchange Rates
The Issuer will pay principal and interest on the Bonds in Danish Kroner. This presents certain risks relating
to currency conversions if a Bondholder’s financial activities are denominated principally in a currency or
currency unit other than the Danish Kroner. As a result, Bondholders may receive less interest or principal
than expected, or no interest or principal.
Government and monetary authorities may impose (as some have done in the past) exchange controls that
could adversely affect an applicable exchange rate. As a result, Bondholders may receive less interest or
principal than expected, or no interest or principal.
Interest Rate
The Bonds bear a fixed interest rate and subsequent changes in market interest rates may adversely affect
the value of the Fixed Rate Bonds.
Foreign Bondholders
The Issuer is a public limited company (in Danish: Aktieselskab) organised under the Laws of Denmark,
which may make it difficult for Bondholders resident outside Denmark to exercise or enforce certain rights.
For example, it may be difficult or impossible for investors outside Denmark to serve process on or enforce
judgments against the Issuer in connection with the Issue or in connection with their rights as Bondholders.
Legal Investment Considerations
The investment activities of certain investors are subject to legal investment laws and regulations, or
review or regulation by certain authorities. Each potential investor should consult its legal advisers to
determine whether and to what extent (1) the Bonds are legal investments for it, (2) the Bonds can be used
as collateral for various types of borrowing and (3) other restrictions apply to its purchase or pledge of the
21
Company Description
Bonds. Financial institutions should consult their legal advisors or the appropriate regulators to determine
the appropriate treatment of the Bonds under any applicable risk-based capital or similar rules.
22
Company Description
8
Financial information
The Company’s key historical financials are shown below.
The Annual Reports of the Company, which include the audited consolidated financial statements of the
Company and the audit reports hereof have previously been published on the Company’s website
(www.globalconnect.dk/investor.aspx) and shall by reference be incorporated in, and form part of, this
Company Description.
The Annual Reports for 2011 and 2012 have been prepared in accordance with the Danish Financial
Statements Act (in Danish: Årsregnskabsloven). The key figures are prepared in accordance with the
guidance of The Danish Financial Analyst’s Society’s “Recommendation & Key Figures”.
For the ease of reference the documents incorporated by reference into this Company Description can be
found on the following pages of the 2011 and 2012 annual reports of the Company respectively:
2011 Annual Report
Income Statement
Balance Sheet
Cash Flow Statement
Statement of changes in Equity
Notes to Annual Report
Management's Statement
Auditor's Report
2012 Annual Report
page 31
page 32
page 34
page 44
page 36
page 8
page 10
Income Statement
Balance Sheet
Cash Flow Statement
Statement of changes in Equity
Notes to Annual Report
Management's Statement
Auditor's Report
page 31
page 32
page 34
page 44
page 36
page 8
page 10
The consolidated financial statements of the Company for the year 2011 and 2012 have been audited by
BDO Statsautoriseret revisionsaktieselskab. The audits have not resulted in any qualifications.
Unaudited half-year figures for 2012 and 2013 have been published on the Company’s website, c.f. above,
and shall by reference be incorporated in, and form part of, this Company Description.
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Company Description
9
Board of Directors and Management
Members of Board of Directors:
Niels Ravn:
Date of birth: 27-01-1943
Niels Ravn has been a member of the board of directors in GlobalConnect since 2002 and Chairman from
2003. Having graduated with a master’s degree in economics, Niels Ravn worked for Novo Nordisk A/S for
14 years where his last position was as Senior Manager within the group financial management. From 1985
and until the company’s mandatory retirement at the age of 60 in 2003, Niels Ravn worked for VKR Holding
A/S, the last 11 years as Group Director. During many years Niels Ravn has been a member of various
boards and undertaken various consultancy work, and has in the last couple of years been working as
Financial Adviser for one of the largest foundations in Denmark.
Michael Allen Potter:
Date of birth: 1961
Michael Potter serves as Director, of Paradigm Ventures a family investment firm focused on clean
technology, organic food, and social enterprise. Previously Mr Potter was Vice Chairman, founder and
President of Esprit Telecom plc., a pan-European competitive telecommunications services provider. He
was formerly an international telecommunications analyst at the Center for Strategic & International
Studies (CSIS) in Washington, D.C. Mr Potter was also Vice Chairman of the founding Board of the European
Competitive Telecommunications Association (ECTA). Mr Potter serves as a media advisor to the Singularity
University. He is on the Board of Directors of the Manna Energy Foundation, a non-profit foundation that is
focused on clean water solutions in developing countries, and the development of social enterprise
projects. Mr Potter heads up the Geeks Without Frontiers initiative, that has developed, in conjunction
with Google, a new open source mesh 802.11s WiFi protocol, that is targeted at city and village internet
solutions. He is on the board of advisors of Odyssey Moon, the first entrant into the Google Lunar Xprize.
Mr Potter is a Senior Fellow at the International Institute of Space Commerce. His articles on high
technology business and policy have been widely published. Mr Potter received his MSc degree from the
London School of Economics. Michael Potter has been on the board of GlobalConnect from the very
beginning as owner.
Lisbeth Zibrandtsen:
Date of birth 08-07-1957
Lisbeth Zibrandtsen is – together with her family – founder and primary owner of GlobalConnect through ZS
Holding A/S. Lisbeth Zibrandtsen holds the following board positions: ZS Holding A/S (member and CEO),
GlobalConnect A/S (member), GC Cloud A/S (member), Bregnerødgård Aps (member), Zone Systems A/S
(member and chairman). One special interest in her work in these boards is Social Responsibility. Besides
her work in GlobalConnect and subsidiaries, Lisbeth Zibrandtsen runs a big stud farm, Bregnerødgård Aps,
situated in the northern part of Zealand with stabled horses owned by external persons as well as own,
very fine horses. Her own – as well as the daughter’s – very special interest is dressage. The daughter, Anna
Zibrandtsen, being among the very best in the junior category in Europe, gives Lisbeth Zibrandtsen an
opportunity to follow the very best dressage riders in Denmark as well as world-wide. Lisbeth Zibrandtsen
herself is an eager dressage rider.
Niels Zibrandtsen:
Date of birth: 31-05-1956
Niels Zibrandtsen is the founder and primary owner - with his family - of GlobalConnect A/S through ZS
Holding A/S. He is also the founder of ZS Holding, Zone Systems, and Butler Networks. Niels Zibrandtsen has
formerly worked for Brüel & Kjaer, NCR, ABB, Dataco, and Radiometer International before he started his
24
Company Description
own business. Niels Zibrandtsen is on the board of Danish Internet Forum (DIFO/DK-Hostmaster), ITEK
under DI – Confederation of Danish Industry, and Teleforum of the Danish Business Authority under the
Ministry of Business and Growth Denmark. Moreover in March 2013, Niels Zibrandtsen was elected
member of the board of The Danish IT Industry Association (ITB). Formerly, he was a member of the Danish
Export Council’s appropriation committee within the Ministry of Foreign Affairs. Niels Zibrandtsen is
passionate about the development of Denmark as a society, driven by knowledge, communication and
information.
Agner N. Mark:
Date of birth: 05-05-1955
Agner N. Mark has extensive experience as CEO, Chairman and Director for companies in the IT,
telecommunications and media industry, including executive and non-executive positions (board positions).
He has broad international background from working for global companies. He has experience from
venture and private equity transactions, including buy-ins, venture investments and M&As. President &
CEO of international roaming clearing house Dan Net A/S 1990-2002. Executive Chairman of private equity
backed international roaming clearing house MACH S.a.r.l. 2002-2005, including acquisition of and merger
with Dan Net A/S in 2004. Non-executive positions in a number of private equity backed technology
companies like NetTest A/S (2003-05), Netcompany A/S (2006-2001) and TIA Technology A/S (2006-). Hold
chairman positions with companies like Tele Greenland A/S (2010-), DanaWeb A/S (2011-) and Cetrea
(2012-). Agner N. Mark has been on the Board of GlobalConnect since March 2012.
Ole Hvelplund:
Date of birth: 18-05-1961
Ole Hvelplund is CCO, Head of sales and marketing at Naturgas Fyn A/S. Ole Hvelplund is an experienced
Telecom executive with core competencies within Strategic leadership & General Management,
International Executive Sales & Key Account Management, High level negotiations; Experienced Telco
Executive, expert in Wholesale, Carrier Service and Roaming, Cable-TV. Latest position was as CEO of TDC
Wholesale & Carrier Services. Ole Hvelplund has worked as a consultant to start-up companies and is board
member at Voopii Aps and Mima Invent Aps. Ole Hvelplund has been on the Board of GlobalConnect since
October 2012.
Claus Dindler:
Date of birth: 19-03-1953
Claus Dindler has extensive sales experience from Rank Xerox and RE Dataco International in senior
positions, from which he has gained substantial experience in IT systems, telecommunications, and
international management. In 1993 Claus Dindler joined the consultancy company Team Learning A/S as a
senior consultant, and in 1997 he became a partner. Claus Dindler joined GlobalConnect A/S in November
1999 as Sales- and Marketing Officer.
Members of the Management:
Niels Zibrandtsen, CEO:
See bio above.
Pernille Simonsen Ravn, Director:
Date of birth: 26-05-1074
Pernille Ravn holds a degree in Export Engineering from the Engineering College of Copenhagen. Pernille
joined GlobalConnect in the summer of 2000 and has been in charge of building up the areas of both
marketing, sales support and service delivery before taking on the responsibility of heading the technical
organization in 2011.
25
Company Description
The main focus and key objectives have been planning and implementation of processes and tools
necessary to support the business and its readiness to adapt to the development of the market as well as
customer needs.
Allan Reimann, Strategic Financial Director:
Date of birth: 11-12-1951
Allan Reimann has a broad knowledge of financial reporting requirements, financial structuring, equity
funding and M&A. This knowledge was gained from working for 17 years in senior financial management
positions within Danish companies with international exposure followed by 16 years as investment banker
and financial consultant. Allan Reimann has furthermore acted as Certified Advisor to NASDAQ OMX since
2008. Allan Reimann joined GlobalConnect A/S as Strategic Financial Director in September 2012. Allan is
on the Board of DLH-Fonden.
Christian Holm Christensen, Sale and Marketing Director:
Date of birth: 07-05-1968
Christian Holm Christensen has extensive experience from the IT industry, and he has held senior positions
at Mobilix, ButlerNetworks and as an independent consultant specialising in start-up of companies.
Christian Holm Christensen has 14 years of practical experience in negotiating interconnect, regulatory
affairs and management. Christian Holm Christensen has an army background and holds a Master Degree in
Political Science from the University of Århus.
The above information includes all current employment and board positions of the Management and the
Board Members.
9.1
Statement of past records
There have no instances within the last 5 years of any conviction of economic crime, fraud related
convictions, bankruptcies, enforced winding-up or similar insolvency processes where members of the
Issuer’s Management or the Board of Directors have been involved in and no such instances or processes
are on going.
No member of the Management of the Board of Directors have within the last 5 years been disqualified the
right to act as a board member or member of the Issuer’s Management by a court of law.
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Company Description
10 Ownership structure
As of 26 August, 2013, the Company currently has 31 different shareholders of which the five largest
holders own 98 % of the Company. Niels Zibrandtsen is the largest shareholder owning 70% of the shares.
An overview of the largest shareholders is provided below.
Shareholder
ZS Holding A/S*
Paradigm Ventures**
Global Connect A/S
Nordea Bank
CFD ApS
Others
Total
Number of shares
1,774,626
329,000
216,788
120,000
58,750
47,641
2,542,280
Shares in %
69,80%
12.94%
8.53%
4.72%
2.31%
1.87%
100.00%
*) ZS Holding is fully owned by Mr. Niels Zibrandtsen and family.
**) Paradigm Venture is fully owned by Mr. Michael Potter.
10.1 Related Parties Transactions
GlobalConnect A/S’ related parties include:
Controlling interests
ZS Holding A/S, Hørskætten 3, 2630 Taastrup, is the principal shareholder.
Ownership
The following shareholders are recorded in the company’s register of shareholders as owning more than
5% of the votes or the share capital:
ZS Holding A/S
Paradigm Ventures LLC
The Issuer has identified no transactions between the Issuer and related parties with significant influence,
including board members, members of the Management as well as family members. It is the policy of the
Issuer that all potential future transactions between the Issuer and related parties shall be made on market
terms on an arm’s length basis thus not causing any conflict of interests.
10.2 Financial Calendar
Financial statement for the full year 2013 is expected to be published March 13, 2014 and to be approved
at the Annual General Shareholder Meeting the same day.
The Issuer will continuously observe its obligations to disclose all information, which is likely to have a
significant effect on the price of the Bonds.
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Company Description
11 Certified Advisor
The Sole-Lead Manager has acted as Certified Advisor for the Company during the period for application to
admission to trading and will act as advisor during the lifetime of the bond.
Certified Advisor:
Pareto Securities AS,
Copenhagen Branch
Langebrogade 5
1411 København K
CVR no. 34736634
The Sole-Lead Manager has been approved as Certified Advisor by NASDAQ OMX Copenhagen A/S.
28
Company Description
12 Bond Agreement
BOND AGREEMENT
between
GLOBALCONNECT A/S
as Issuer
THE COMPANIES
listed in Attachment 1 as Guarantors
and
NORSK TILLITSMANN ASA
as Bond Trustee
on behalf of
the Bondholders
in the bond issue
5.70 per cent GlobalConnect A/S Senior Secured Bond Issue 2013/2018
dated 14 May 2013
29
Company Description
This agreement has been entered into on 14 May 2013 between:
(1)
GLOBALCONNECT A/S, (a company existing under the laws of Denmark with Company No.
26 75 97 22) as issuer (the "Issuer");
(2)
NORSK TILLITSMANN ASA, (a company existing under the laws of with Company No. 963 342
624) as bond trustee (the "Bond Trustee"); and
(3)
THE COMPANIES listed in Attachment 1 (Guarantors) as guarantors (the "Guarantors").
1.
INTERPRETATION
1.1
Definitions
In this Bond Agreement, the following terms shall have the following meanings:
"Account Manager" means a Bondholder’s account manager in the Securities Depository.
"Acquisition Facilities" means any future secured financial indebtedness provided by
commercial and mortgage banks with the purpose of financing assets not covered by the
Security provided under the Chattel Mortgages and Real Estate Mortgages, for additional
investments in fibre cables and related equipment, telehousing activities and related
equipment.
"Adjustment Mechanism" means with regard to the enforceability of the German Guarantee
under section 13.4 (d) (ii) that for the purpose of the calculation of the enforceable amount
(if any), the following balance sheet items shall be adjusted, (i) any amount of any increase
of stated share capital of the German Guarantor after the effective date of this Agreement
which has been effected from own assets without the prior written consent of the Bond
Trustee or which is not fully paid-up and was effected without the prior consent of the Bond
Trustee, shall be deducted from the stated share capital; (ii) loans and other contractual
liability incurred by the German Guarantor shall be disregarded and (iii) the assets of the
German Guarantor shall be assessed at liquidation value if the managing directors are in
their opinion not able to make a positive prognosis to the business on a going forward
concern basis.
"Attachment" means the attachments to this Bond Agreement.
"Bond Agreement" means this bond agreement, including any Attachments to it, each as
amended from time to time.
"Bond Issue" means the bond issue constituted by the Bonds.
"Bondholder" means a holder of Bond(s), as registered in the Securities Depository, from
time to time.
"Bondholders’ Meeting" means a meeting of Bondholders, as set out in Clause 18.
"Bonds" means the debt instruments issued by the Issuer pursuant to this Bond Agreement.
"Business Day" means any day on which commercial banks are open for general business
and can settle foreign currency transactions in Oslo and Copenhagen.
"Business Day Convention" means that no adjustment will be made, notwithstanding the
period end date occurs on a day that is not a Business Day, and if such date is not a Business
30
Company Description
Day, payments of interest will be made on the first following day that is a Business Day (No
Adjustments of Business Day).
"Change of Control Event" means if and when any person or a group (as such term is defined
in the Danish Companies Act Section 6 and 7) (other than ZS Holding A/S or affiliates or other
related companies indirectly or directly owned by Mr. Niels Zibrandtsen or his family)
becomes the owner, directly or indirectly, of more than 50% of the outstanding shares
and/or voting rights of the Issuer.
"Chattel Mortgages" means the first priority mortgage (DK: "første prioritets underpant")
over:
(a)
the first priority owner's mortgage deed (DK: "ejerpantebrev") over
equipment and machinery in the leased building situated at Hørskætten 3,
Taastrup and condensers etc. (as described in further detail in the mortgage
deed), issued by the Issuer, in the amount of DKK 10,000,000;
(b)
the second priority owner's mortgage deed over containers and
communication cables etc. (as described in further detail in the mortgage
deed), issued by the Issuer, in the amount of DKK 35,000,000; and
(c)
in the third priority owner's mortgage deed over containers and
communication cables etc. (as described in further detail in the mortgage
deed), issued by the Issuer, in the amount of DKK 238,000,000.
"Compliance Certificate" means a certificate substantially in the form set out in Attachment
2.
"Danish Guarantor" means any Guarantor incorporated in Denmark.
"Decisive Influence" means a person having, as a result of an agreement or through the
ownership of shares or interests in another person:
(a)
a majority of the voting rights in that other person; or
(b)
a right to elect or remove a majority of the members of the board of directors
of that other person.
When determining the relevant person's number of voting rights in the other person or the
right to elect and remove members of the board of directors, rights held by the parent
company of the relevant person and the parent company's Subsidiaries shall be included.
"Defeasance Pledge" shall have the meaning given to it in Clause 20.2.
"DKK" means Danish kroner, being the lawful currency of Denmark.
"EBITDA" shall have the meaning given to such term in Clause 15.1.
"Equity" shall have the meaning given to such term in Clause 15.1.
"Equity Ratio" shall have the meaning given to such term in Clause 15.1.
"Escrow Account" means an account(s) in the name of the Issuer (with a bank with presence
in Norway, acceptable to the Bond Trustee), pledged and blocked on first priority as security
for the Issuer's obligations under the Finance Documents.
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Company Description
"Escrow Account Pledge" means the pledge over any claims standing to credit of the Escrow
Account, where the bank operating the account has waived any set-off rights.
"Event of Default" means the occurrence of an event or circumstance specified in Clauses
17.1 – 17.9.
"Exchange" means (i) a securities exchange or other reputable regulated market, or (ii) First
North Bond Market, on which the Bonds are listed, or where the Issuer has applied for listing
of the Bonds.
"Face Value" means the denomination of each of the Bonds, as set out in Clause 2.3 (b).
"Finance Documents" means
(a)
this Bond Agreement;
(b)
the agreement between the Bond Trustee and the Issuer referred to in Clause
16.2;
(c)
the Security Documents (including any notices, acknowledgements and other
ancillary documentation relating thereto);
(d)
any documents executed in relation to the granting of any Security to the
Bond Trustee under the Finance Documents;
(e)
any other document (whether creating a Security or not) which is executed at
any time by the Issuer or any other Party in relation to any amount payable
under this Bond Agreement; and
(f)
any other document the Issuer and the Bond Trustee designate as Finance
Document.
"Financial Indebtedness" means any indebtedness for or in respect of:
(a)
moneys borrowed;
(b)
any amount raised by acceptance under any acceptance credit facility or
dematerialized equivalent;
(c)
any amount raised pursuant to any note purchase facility or the issue of
bonds, notes, debentures, loan stock or any similar instrument;
(d)
the amount of any liability in respect of any lease or hire purchase contract
which would, in accordance with GAAP, be treated as a finance or capital
lease;
(e)
receivables sold or discounted (other than any receivables to the extent they
are sold on a non-recourse basis);
(f)
any amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a borrowing;
(g)
any derivative transaction entered into in connection with protection against
or benefit from fluctuation in any rate or price (and, when calculating the
value of any derivative transaction, only the mark to market value shall be
taken into account); and
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Company Description
(h)
the amount of any liability in respect of any guarantee or indemnity for any of
the items referred to in paragraphs (a) to (g) above.
"Financial Statements" means the audited consolidated annual financial statements of the
Issuer for any financial year, drawn up according to GAAP, such accounts to include a profit
and loss account, balance sheet, cash flow statement and management commentary or
report from the Board of Directors.
"First North Bond Market" means the multilateral trading facility operated by NASDAQ OMX
Stockholm AB and NASDAQ OMX Copenhagen A/S.
"GAAP" means the generally accepted accounting practice and principles in Denmark (DK:
"Årsregnskapsloven") including, if applicable, the International Financial Reporting
Standards (IFRS) and guidelines and interpretations issued by the International Accounting
Standards Board (or any predecessor and successor thereof), in force from time to time.
"Group" means the Issuer and all its (directly or indirectly owned) Subsidiaries.
"Group Company" means the Issuer or any of its Subsidiaries.
"Guarantee" means an unconditional on-demand guarantee on a joint and several basis
from the Guarantors securing the Issuer’s obligations under this Bond Agreement and any
other Finance Document, including interest, costs and expenses (No: påkravsgaranti) as set
out in Clause 13.
"Guarantor" means any entity listed in Attachment 1 to this Agreement.
"German Guarantor" means GlobalConnect GmbH (a company existing under the laws of
Germany with Company No. HRB 74 616 (registered at the local court of Hamburg) and any
of its affiliates, if any.
"Guarantors Share Pledge" means a first priority pledge granted by the Issuer over all
(100%) of the shares in the Guarantors.
"Intercompany Loan" means any unsecured intercompany loan from any Group Company
(as lender) to any of the Guarantors (as borrower). All payments under the relevant
intercompany loan may continue to be made to the respective Group Company under such
intercompany loan until the occurrence of an Event of Default, where perfection shall be
made (subject to any applicable hardening period).
"Intercompany Loan Pledges" means the (non perfected if according to Danish law) first
priority pledge over any existing or future Intercompany Loan.
"Interest Coverage Ratio" shall have the meaning given to such term in Clause 15.1.
"Interest Payment Date" means 15 May and 15 November each year and the Maturity Date.
Any adjustment will be made according to the Business Day Convention.
"Interim Accounts" means the unaudited and consolidated semi-annual financial statements
of the Issuer for the semi-annual period ending on 30 June each year, drawn up according to
GAAP.
"ISIN" means International Securities Identification Number – the identification number of
the Bond Issue.
"Issue Date" means 15 May 2013.
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Company Description
"Issuer’s Bonds" means any Bonds owned by the Issuer, any person or persons who has
Decisive Influence over the Issuer, or any person or persons over whom the Issuer has
Decisive Influence.
"Limb Finance Loan Agreement" means the DKK 50,000,000 loan agreement dated 17
December 2012 between the Issuer (as borrower) and Limb Finance A/S (as lender) (and as
amended from time to time).
"Liquidity" shall have the meaning given to such term in Clause 15.1.
"Manager" means the manager for the Bond Issue, being Pareto Securities AS, Dronning
Mauds gt. 3, NO-0115 Oslo, Norway.
"Material Adverse Effect" means an event or circumstance which has a material adverse
effect on: (a) the business, financial condition or operations of the Issuer and/or the Group
(taken as a whole), (b) the Issuer’s or any Guarantor’s ability to perform and comply with its
obligations under any Finance Document; or (c) the validity or enforceability of the Bond
Agreement or any Security Documents.
"Maturity Date" means 15 May 2018. Any adjustment will be made according to the
Business Day Convention.
"Net Assets" means with respect to the German Guarantor all items set forth in § 266 (2) A
to E of the German Commercial Code less its liabilities, the calculation of which shall include
all items set forth in § 266 (3) B to E of the German Commercial Code.
"Net Interest Cost" shall have the meaning given to it in Clause 15.1.
"NOK" means Norwegian kroner, being the lawful currency of Norway.
"Nordea Facility" means the Kredit- og Rammeavtale dated 13 June 2012 between the Issuer
(as borrower) and Nordea Bank Danmark A/S (as lender) (and as amended from time to
time).
"Obligor" means the Issuer and any Guarantor.
"Outstanding Bonds" means the Bonds not redeemed or otherwise discharged.
"Party" means a party to this Bond Agreement (including its successors and permitted
transferees).
"Paying Agent" means DNB Bank ASA as appointed by the Issuer to act as its paying agent in
the Securities Depository with respect to the Bonds.
"Payment Date" means a date for payment of principal or interest under this Bond
Agreement.
"Permitted Financial Indebtedness" means the following:
(a)
this Bond Issue;
(b)
the Nordea Facility prior to repayment thereof;
(c)
a DKK 20,000,000 facility provided by Jyske Bank A/S prior to repayment
thereof;
(d)
the Limb Finance Loan Agreement;
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Company Description
(e)
the Working Capital Facility;
(f)
existing and future financial or operational leasing liabilities relating to
financing of fibre cables and related equipment;
(g)
the Acquisition Facilities;
(h)
any intercompany loans granted by any Group Company to another Group
Company; and
(i)
any refinancing of any Permitted Financial Indebtedness in (d) – (g) above.
"Quarter Date" means each 31 March, 30 June, 30 September and 31 December.
"Real Estate Mortgages" means the first priority mortgage by the Issuer over:
(a)
the first priority owner's mortgage deed over buildings situated on leased land
at Morelvej, Odense in the amount of DKK 10,000,000. The Trustee shall rank
as first priority mortgagee (DK: "første prioritets underpanthaver") on the
mortgage deed;
(b)
the first priority owner's mortgage deed over buildings situated on leased land
at Kokbjergvej 8, Kolding in the amount of DKK 10,000,000. The Trustee shall
rank as first priority mortgagee (DK: "første prioritets underpanthaver") on
the mortgage deed;
(c)
the first priority owner's mortgage deed over buildings situated on leased land
at Gammel Landevej 135, Væggerløse in the amount of DKK 20,000,000. The
Trustee shall rank as first priority mortgagee (DK: "første prioritets
underpanthaver") on the mortgage deed;
(d)
the first priority owner's mortgage deed over buildings situated on leased land
at Frederik Gybelsvei 4, Sæby in the amount of DKK 1,000,000. The Trustee
shall rank as first priority mortgagee (DK “første prioritets underpanthaver”)
on the mortgage deed;
(e)
the first priority owner's mortgage deed over buildings situated on leased land
at Industrivej 16, Nr. Nebel in the amount of DKK 1,000,000. The Trustee shall
rank as first priority mortgagee (DK “første prioritets underpanthaver”) on the
mortgage deed;
(f)
the first priority owner's mortgage deed over buildings situated on leased land
at Baggeskærvej 18, Heming in the amount of DKK 1,000,000. The Trustee
shall rank as first priority mortgagee (DK: "første prioritets underpanthaver")
on the mortgage deed;
(g)
the first priority owner's mortgage deed over buildings situated on leased land
at Egevej 10, Aabenraa in the amount of DKK 1,000,000. The Trustee shall rank
as first priority mortgagee (DK: "første prioritets underpanthaver") on the
mortgage deed; and
(h)
the second priority owner's mortgage deed over buildings situated on leased
land at Morelvej, Odense in the amount of DKK 20,000,000. The Trustee shall
rank as first priority mortgagee (DK: "første prioritets underpanthaver") on
the mortgage deed.
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Company Description
"Restructuring" means the restructuring of the ownership of GigaContent A/S pursuant to
which the Issuer will acquire 100 % of the shares in GigaContent A/S.
"Securities Depository" means the securities depository in which the Bond Issue is
registered, being Verdipapirsentralen ASA (VPS) in Norway.
"Security Agent" means the Bond Trustee in its capacity as security agent and/or security
trustee pursuant to Clause 19.4.
"Security" means any encumbrance, mortgage, charge, pledge, lien or other security interest
securing any obligation of any person or any other agreement or arrangement having a
similar effect.
"Security and Covenant Defeasance" shall have the meaning given to it in Clause 20.2.
"Security Documents" means, collectively, all the documents evidencing, creating or
granting the Security Interests.
"Security Interests" means
(a)
the Escrow Account Pledge.
(b)
the Guarantees;
(c)
the Guarantors Share Pledge;
(d)
the Intercompany Loan Pledges;
(e)
the Chattel Mortgages; and
(f)
the Real Estate Mortgages.
"Stamdata" means the web site www.stamdata.no, maintained by Norsk Tillitsmann ASA.
"Subordinated Loans" means such loans as described in Clause 14.13.
"Subsidiary" means an entity over which another entity or person has a determining
influence due to (i) direct and indirect ownership of shares or other ownership interests,
and/or (ii) agreement, understanding or other arrangement. An entity shall always be
considered to be the subsidiary of another entity or person if such entity or person has such
number of shares or ownership interests so as to represent the majority of the votes in the
entity, or has the right to vote in or vote out a majority of the directors in the entity.
"Total Assets" shall have the meaning given to it in Clause 15.1.
"US Securities Act" means the U.S. Securities Act of 1933, as amended.
"Voting Bonds" means the Outstanding Bonds less the Issuer’s Bonds.
"Working Capital Facility" means a working capital facility up to DKK 120,000,000 entered
into between the Issuer as borrower and any reputable lender on marketable terms.
"ZS Holding A/S" means a company existing under the laws of Denmark with Company No.
18 86 07 83.
1.2
Construction
In this Bond Agreement, unless the context otherwise requires:
36
Company Description
(a)
headings are for ease of reference only;
(b)
words denoting the singular number shall include the plural and vice versa;
(c)
references to Clauses are references to the Clauses of this Bond Agreement;
(d)
references to a time is a reference to Oslo time unless otherwise stated
herein;
(e)
references to a provision of law is a reference to that provision as it may be
amended or re-enacted, and to any regulations made by the appropriate
authority pursuant to such law, including any determinations, rulings,
judgments and other binding decisions relating to such provision or
regulation;
(f)
an Event of Default is "continuing" if it has not been remedied or waived; and
(g)
references to a "person" shall include any individual, firm, company,
corporation, government, state or agency of a state or any association, trust,
joint venture, consortium or partnership (whether or not having separate legal
personality).
2.
THE BONDS
2.1
Binding nature of this Bond Agreement
By virtue of being registered as a Bondholder (directly or indirectly) with the Securities
Depository, the Bondholders are bound by the terms of this Bond Agreement and any other
Finance Document, without any further action required to be taken or formalities to be
complied with, see also Clause 20.1.
2.2
Availability
This Bond Agreement is available to anyone and may be obtained from the Bond Trustee or
the Issuer. The Issuer shall ensure that this Bond Agreement is available to the general public
throughout the entire term of the Bonds. This Bond Agreement may be published on
Stamdata or such other venues as decided by the Bond Trustee.
2.3
2.4
The Bonds
(a)
The Issuer has resolved to issue a series of Bonds in the maximum amount of
DKK 500,000,000 (Danish kroner five hundred million).
(b)
The Face Value is DKK 1,000,000. The Bonds shall rank pari passu between
themselves.
(c)
The Bond Issue will be described as "5.70 % GlobalConnect A/S Senior Secured
Bond Issue 2013/2018".
(d)
The ISIN of the Bond Issue will be NO0010678782.
(e)
The tenor of the Bonds is from and including the Issue Date to the Maturity
Date.
Purpose and utilization
The net proceeds of the Bonds shall be applied towards refinancing of existing debt,
financing further expansion of the Issuer and for general corporate purposes.
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Company Description
3.
LISTING
(a)
The Issuer shall apply for listing of the Bonds on First North Bond Market.
(b)
If the Bonds are listed, the Issuer shall ensure that the Bonds remain listed
until they have been discharged in full.
4.
REGISTRATION IN THE SECURITIES DEPOSITORY
4.1
Registration
The Bond Issue and the Bonds shall prior to disbursement be registered in the Securities
Depository according to the Norwegian Securities Depository Act (Act 2002/64) and the
terms and conditions of the Securities Depository.
4.2
Notifications
The Issuer shall ensure that correct registration in the Securities Depository is made and shall
notify the Securities Depository of any changes in the terms and conditions of this Bond
Agreement. The Bond Trustee shall receive a copy of the notification. The registration may
be executed by the Paying Agent.
4.3
US Securities Act
The Bonds have not been registered under the US Securities Act, and the Issuer is under no
obligation to arrange for registration of the Bonds under the US Securities Act.
5.
PURCHASE AND TRANSFER OF BONDS
5.1
Bondholders may be subject to purchase or transfer restrictions with regard to the Bonds, as
applicable from time to time under local laws to which a Bondholder may be subject (due
e.g. to its nationality, its residency, its registered address, its place(s) for doing business).
Each Bondholder must ensure compliance with applicable local laws and regulations at its
own cost and expense.
5.2
Notwithstanding the above, a Bondholder which has purchased the Bonds in breach of
applicable mandatory restrictions may nevertheless utilise its rights (including, but not
limited to, voting rights) under this Bond Agreement.
6.
CONDITIONS PRECEDENT
6.1
Conditions Precedent – Issue Date
Transfer of the net proceeds of the Bonds to the Escrow Accounts will be subject to the Bond
Trustee having received the documents listed below, in form and substance satisfactory to it,
at least two Business Days prior to the Issue Date:
(a)
this Bond Agreement, duly executed by all parties thereto;
(b)
certified copies of all necessary corporate resolutions of the Obligors to issue
the Bonds and execute the Finance Documents to and including the Issue
Date;
(c)
a power of attorney from the Obligors to relevant individuals for their
execution of the relevant Finance Documents, or extracts from the relevant
register or similar documentation evidencing such individuals' authorisation to
execute the Finance Documents on behalf of the Issuer;
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Company Description
6.2
(d)
certified copies of (i) the certificate of incorporation or other similar official
document for the Obligors, evidencing that it is validly registered and existing
and (ii) the articles of association of the Obligors;
(e)
the Obligors' latest Financial Statements and Interim Accounts (if any);
(f)
the Escrow Account Pledge, duly executed and perfected by all parties
(including relevant acknowledgement from the bank);
(g)
confirmation from the Manager that the requirements set out in Chapter 7 of
the Norwegian Securities Trading Act (implementing the EU prospectus
directive (2003/71 EC) concerning prospectuses have been fulfilled;
(h)
to the extent necessary, any public authorisations required for the Bond Issue;
(i)
confirmation from the Paying Agent that the Bonds have been registered in
the Securities Depository;
(j)
the Bond Trustee fee agreement set out in Clause 16.2, duly executed;
(k)
copies of any written documentation used in the marketing of the Bonds or
made public by the Issuer or the Manager in connection with the Bond Issue;
and
(l)
any statements or legal opinions reasonably required by the Bond Trustee
(including any capacity corporate opinions for each Obligor and opinions
related to the validity, perfection and enforceability of the Finance
Documents).
Bond Trustee's confirmation of conditions precedent
Settlement of the Bonds is subject to the Bond Trustee's written notice to the Issuer, the
Manager and the Paying Agent that the documents have been controlled and that the
required conditions precedent are fulfilled.
6.3
Settlement
On the Issue Date, and subject to the Bond Trustee's confirmation pursuant to Clause 6.2,
the Manager shall transfer the net proceeds from the Bond Issue to the Escrow Accounts.
6.4
Pre-Disbursement Conditions Precedent
The amount in the Escrow Account shall only be used according to Clause 2.4, and the
release of the net proceeds of the Bonds from the Escrow Account will be subject to the
Bond Trustee having received the following (the "Pre-Disbursement Conditions Precedent"),
in form and substance satisfactory to it:
(a)
a duly executed release notice from the Issuer;
(b)
copies of all necessary corporate resolutions from the Obligors and any
member of the Group (if any) to execute the Security Documents from and
including the Issue Date and thereafter;
(c)
(to the extent required by applicable law) a power of attorney from each
Obligor and any member of the Group (if any) to relevant individuals for their
execution of the Security Documents from and including the Issue Date, or
extracts from the relevant register or similar documentation evidencing that
39
Company Description
such individuals are authorized to sign on behalf of the Obligor and any
member of the Group (if any);
6.5
(d)
the Security Documents duly executed and perfected (to the extent permitted
by applicable law);
(e)
satisfactory evidence to the Bond Trustee that any existing security not
granted to secure Permitted Financial Indebtedness is released;
(f)
satisfactory evidence to the Bond Trustee that any existing security granted to
secure the Nordea Facility will be immediately released upon full repayment,
by the first release of funds from the Escrow Account (if required, according to
acceptable closing procedures);
(g)
confirmation that no potential or actual Event of Default exists under the
Bond Agreement;
(h)
the Finance Documents duly executed, in form, scope and substance
acceptable to the Bond Trustee; and
(i)
any statements or legal opinions reasonably required in any relevant
jurisdiction and in a form and substance satisfactory to the Bond Trustee
Conditions Subsequent
The Restructuring shall be completed no later than by 30 September 2013.
6.6
Waivers
The Bond Trustee may, in its reasonable opinion, waive the deadline or requirements for
documentation as set out in Clause 6.
7.
REPRESENTATIONS AND WARRANTIES
Each Obligor represents and warrants to the Bond Trustee that:
7.1
Status
It is a limited liability company or corporation (as applicable), duly incorporated and validly
existing and registered under the laws of its jurisdiction of incorporation, and has the power
to own its assets and carry on its business as it is being conducted.
7.2
Power and authority
It has the power to enter into, perform and deliver, and has taken all necessary action to
authorise its entry into, performance and delivery of, this Bond Agreement and any other
Finance Document to which it is a party and the transactions contemplated by those Finance
Documents.
7.3
Valid, binding and enforceable obligations
This Bond Agreement and each other Finance Document to which it is a party constitutes (or
will constitute, when executed by the respective parties thereto) its legal, valid and binding
obligations, enforceable in accordance with their respective terms, and (save as provided for
therein) no further registration, filing, payment of tax or fees or other formalities are
necessary or desirable to render the said documents enforceable against it.
40
Company Description
7.4
Non-conflict with other obligations
The entry into and performance by it of this Bond Agreement and any other Finance
Document to which it is a party and the transactions contemplated thereby do not and will
not conflict with:
7.5
7.6
(a)
any law or regulation or judicial or official order;
(b)
its constitutional documents; or
(c)
any agreement or instrument which is binding upon it or any of its assets.
No Event of Default
(a)
No Event of Default exists or is likely to result from the making of any
drawdown under this Bond Agreement or the entry into, the performance of,
or any transaction contemplated by, any Finance Document.
(b)
No other event or circumstance is outstanding which constitutes (or with the
expiry of a grace period, the giving of notice, the making of any determination
or any combination of any of the foregoing, would constitute) a default or
termination event (howsoever described) under any other agreement or
instrument which is binding on it or any of its Subsidiaries or to which its (or
any of its Subsidiaries’) assets are subject which has or is likely to have a
Material Adverse Effect.
Authorizations and consents
All authorisations, consents, approvals, resolutions, licenses, exemptions, filings,
notarizations or registrations required:
(a)
to enable it to enter into, exercise its rights and comply with its obligations
under this Bond Agreement or any other Finance Document to which it is a
party; and
(b)
to carry on its business as presently conducted and as contemplated by this
Bond Agreement,
have been obtained or effected and are in full force and effect.
7.7
Litigation
No litigation, arbitration or administrative proceedings or investigations of or before any
court, arbitral body or agency which, if adversely determined, is likely to have a Material
Adverse Effect have (to the best of its knowledge and belief) been started or threatened
against it or any of its Subsidiaries, save for the Issuer's involvement in a legal dispute of DKK
34,600,000.
7.8
Financial Statements
Its most recent Financial Statements and Interim Accounts fairly and accurately represent
the assets and liabilities and financial condition as at their respective dates, and have been
prepared in accordance with GAAP, consistently applied.
41
Company Description
7.9
No Material Adverse Effect
Since the date of the Financial Statements, there has been no change in its business, assets
or financial condition that is likely to have a Material Adverse Effect.
7.10
No misleading information
Any factual information provided by it to the subscribers or the Bond Trustee for the
purposes of this Bond Issue was true and accurate in all material respects as at the date it
was provided or as at the date (if any) at which it is stated.
7.11
Intellectual property
It has undisputed, valid and good title to (a) its patents, trademarks, service marks, designs,
business names, copyrights, design rights, inventions, confidential information and other
intellectual property rights and interests (whether registered or unregistered), and (b) the
benefit of all applications and rights to use such assets.
7.12
No withholdings
The Obligors are not required to make any deduction or withholding from any payment
which it may become obliged to make to the Bond Trustee or the Bondholders under this
Bond Agreement.
7.13
Pari passu ranking
Its payment obligations under this Bond Agreement or any other Finance Document to which
it is a party rank at least pari passu as set out in Clause 8.1.
7.14
Security
No Security exists over any of the present assets of any Group Company in conflict with this
Bond Agreement.
7.15
Repetition
The representations and warranties set out in this Clause 7 are made on the execution date
of this Bond Agreement, and shall be deemed to be repeated on the Issue Date and on each
drawdown date from the Escrow Account.
8.
STATUS OF THE BONDS AND SECURITY
8.1
Status
The Bonds shall constitute senior debt obligations of the Issuer. The Bonds shall rank at least
pari passu with all other obligations of the Issuer (save for such claims which are preferred
by bankruptcy, insolvency, liquidation or other similar laws of general application) and shall
rank ahead of subordinated debt.
8.2
Security
The Bonds, including accrued but unpaid interest, costs and expenses, shall be secured by
the Security Interests.
9.
INTEREST
9.1
Interest rate
42
Company Description
The Issuer shall pay interest on the par value of the Bonds from, and including, the Issue
Date at a fixed rate of 5.70 per cent per annum (the "Fixed Rate").
9.2
Interest Payment Dates
Interest payments shall be made in arrears on the Interest Payment Dates semi-annually, the
first Interest Payment Date being 15 November 2013.
9.3
Calculation of interest payments
(a)
The relevant interest payable amount shall be calculated based on a period
from, and including, one Interest Payment Date to, but excluding, the next
following applicable Interest Payment Date.
(b)
The day count fraction ("Fixed Rate Day Count Fraction") in respect of the
calculation of the payable interest amount shall be "30/360", which means
that the number of days in the calculation period in respect of which payment
is being made divided by 360 (the number of days to be calculated on the
basis of a year of 360 days with twelve 30-days months (unless (i) the last day
of the calculation period is the 31st day of a month but the first day of the
calculation period is a day other than the 30th or 31st day of a month, in
which case the month that includes that last day shall not be considered to be
shortened to a 30-day month, or (ii) the last day of the calculation period is
the last day of the month of February, in which case the month of February
shall not be considered to be lengthened to a 30-day month)).
(c)
The payable interest amount per Bond for a relevant calculation period shall
be calculated as follows:
Interest Amount = Face Value x Fixed Rate x Fixed Rate Day Count Fraction
10.
MATURITY OF THE BONDS AND REDEMPTION
10.1
Maturity
The Bonds shall mature in full on the Maturity Date, and shall be repaid at par (100%) by the
Issuer.
10.2
Change of control
(a)
Upon the occurrence of a Change of Control Event, each Bondholder shall
have the right to require that the Issuer redeems its Bonds (a "Put Option") at
a price of 101 % of par plus accrued interest.
(b)
The Put Option must be exercised within 60 days after the Issuer has given
notification to the Bond Trustee of a Change of Control Event. Such
notification shall be given as soon as possible after a Change of Control Event
has taken place.
(c)
The Put Option may be exercised by each Bondholder by giving written notice
of the request to its Account Manager. The Account Manager shall notify the
Paying Agent of the redemption request. The settlement date of the Put
Option shall be the third Business Day after the end of the 60 day exercise
period of the Put Option.
(d)
On the settlement date of the Put Option, the Issuer shall pay to each of the
Bondholders holding Bonds to be redeemed, the principal amount of each
43
Company Description
such Bond (including any premium pursuant to Clause 10.2 (a)) and any
unpaid interest accrued up to (but not including) the settlement date.
11.
PAYMENTS
11.1
Covenant to pay
11.2
11.3
(a)
The Issuer will on any Payment Date (or any other due date pursuant to any
Finance Document) unconditionally pay to or to the order of the Bond Trustee
all amounts due under this Bond Agreement or any other Finance Document.
(b)
The covenant contained in Clause 11.1 (a) shall be for the benefit of the Bond
Trustee and the Bondholders.
Payment mechanics
(a)
If no specific order is made by the Bond Trustee under Clause 11.1 (a), the
Issuer shall pay all amounts due to the Bondholders under this Bond
Agreement or any other Finance Document by crediting the bank account
nominated by each Bondholder in connection with its securities account in the
Securities Depository.
(b)
Payment shall be deemed to have been made once the amount has been
credited to the bank which holds the bank account nominated by the
Bondholder in question, but if the paying bank and the receiving bank are the
same, payment shall be deemed to have been made once the amount has
been credited to the bank account nominated by the Bondholder in question,
see however Clause 11.3.
(c)
In case of irregular payments, the Bond Trustee may instruct any Obligor or
Bondholders of other payment mechanisms than described in Clause 11.1 or
11.3. The Bond Trustee may also obtain payment information regarding
Bondholders’ accounts from the Securities Depository or Account Managers.
(d)
Subject to Clause 11.3, payment by the Issuer in accordance with this Clause
11.2 shall constitute good discharge of its obligations under Clause 11.1 (a).
Currency
(a)
If the Bonds are denominated in other currencies than NOK, each Bondholder
has to provide the Paying Agent (either directly or through its Account
Manager) with specific payment instructions, including foreign exchange bank
account details. Depending on any currency exchange settlement agreements
between each Bondholder's bank and the Paying Agent, cash settlement may
be delayed, and payment shall be deemed to have been made at the date of
the cash settlement, provided however, that no default interest or other
penalty shall accrue for the account of the Issuer.
(b)
Except as otherwise expressly provided, all amounts payable under this Bond
Agreement and any other Finance Document shall be payable in the same
currency as the Bonds are denominated in. If, however, the Bondholder has
not given instruction as set out in Clause 11.3 (a) within five Business Days
prior to a Payment Date, the cash settlement will be exchanged into NOK and
credited to the NOK bank account registered with the Bondholders account in
the Securities Depository.
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Company Description
(c)
11.4
Amounts payable in respect of costs, expenses, taxes and other liabilities of a
similar nature shall be payable in the currency in which they are incurred.
Set-off and counterclaims
No Obligor may apply or perform any counterclaims or set-off against any payment
obligations pursuant to this Bond Agreement or any other Finance Document.
11.5
11.6
Interest in the event of late payment
(a)
In the event that any amount due under this Bond Agreement or any Finance
Document is not made on the relevant due date, the unpaid amount shall
bear interest from the due date at an interest rate equivalent to the interest
rate according to Clause 9 plus five per cent per annum.
(b)
The interest charged under this Clause 11.5 shall be added to the defaulted
amount on each respective Interest Payment Date relating thereto until the
defaulted amount has been repaid in full.
(c)
The unpaid amounts shall bear interest as stated above until payment is
made, whether or not the Bonds are declared to be in default pursuant to
Clauses 17.1 – 17.9, cf. Clause 17.10.
Partial payments
If the Bond Trustee or the Paying Agent receives a payment that is insufficient to discharge
all the amounts then due and payable under the Finance Documents, that payment shall be
applied in the following order:
12.
(a)
first, in or towards payment of any unpaid fees, costs and expenses of the
Bond Trustee under the Finance Documents;
(b)
secondly, in or towards payment of any accrued interest due but unpaid under
the Bond Agreement, pro rata and without any preference or priority of any
kind; and
(c)
thirdly, in or towards payment of any principal due but unpaid under the Bond
Agreement, pro rata and without any preference or priority of any kind.
ISSUER’S ACQUISITION OF BONDS
The Issuer has the right to acquire and own Bonds (Issuer’s Bonds). The Issuer’s holding of
Bonds may at the Issuer’s discretion be retained by the Issuer, sold or discharged.
13.
GUARANTEE AND INDEMNITY
13.1
Guarantee
The Guarantors jointly and severally, irrevocably and unconditionally:
(a)
guarantee to the Bond Trustee (on behalf of the Bondholders), as for their
own debt and not merely as surety, the due and punctual performance by the
Issuer of all its obligations under the Finance Documents and accept that the
Bond Trustee may make a demand for payment to any and each of the
Guarantors without any specific order;
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Company Description
13.2
(b)
undertake with the Bond Trustee (on behalf of the Bondholders) that,
whenever the Issuer does not pay any amount when due under or in
connection with any Finance Document, the Guarantors shall, on the Bond
Trustee's first written demand (No: påkravsgaranti) and in no event any later
than five Business Days after the relevant Guarantor's receipt of such demand,
pay that amount to the Bond Trustee or as it directs as if it were the principal
obligor in respect of that amount; and
(c)
agree with the Bond Trustee (on behalf of the Bondholders) that if, for any
reason, any amount claimed by the Bond Trustee under this clause is not
recoverable from the Guarantors, then the Guarantors will be liable as a
principal debtor and primary obligor to indemnify the Bond Trustee and each
Bondholder for any loss each of them may incur as a result of the Issuer failing
to pay any amount expressed to be payable by it under a Finance Document
on the date when it ought to have been paid.
Waivers
Each Guarantor hereby waives:
13.3
(a)
any requirement that the Bond Trustee or any of the Bondholders in case of
an Event of Default first have to make demand upon or seek to enforce
remedies against the Issuer;
(b)
any and all defences or objections from any party in or based on underlying
relationships, agreements and transactions whatsoever, including, without
limitation, any such relationships, agreements or transactions with any third
party for security or otherwise, and right to limit the liability under the
guarantee provided hereunder resulting from any failure to give notice of any
kind;
(c)
any right to exercise a right of subrogation into the rights of the Bondholders
under the Bond Agreement, without the prior written consent of the Bond
Trustee until such time that no amounts are outstanding under this Bond
Agreement and any other Finance Document;
(d)
any right to claim reimbursement from the Issuer and/or any other Obligor for
payment made hereunder until such time that no amounts are outstanding
under this Bond Agreement and any other Finance Document; and
(e)
any requirement that additional Security be provided or maintained.
Continuing guarantee
This guarantee is a continuing guarantee and will extend to the ultimate balance of all sums
payable by the Issuer under the Finance Documents, regardless of (i) any intermediate
payment or discharge in whole or in part or (ii) the Bond Trustee enforcing any other
Security granted for the Issuer's obligations under this Bond Agreement.
13.4
Limitations
(a)
The obligations of each Guarantor under this Guarantee to which it is a party
shall be limited by the mandatory provisions of law applicable to such Obligor
limiting the legal capacity or ability of such Obligor to provide security or grant
guarantees or indemnities for the obligations of another company. If any such
46
Company Description
limitation is no longer applicable as a mandatory provision, that limitation will
no longer apply to the obligations under this Guarantee.
(b)
(c)
Without limiting the generality of paragraph (a) above, the maximum amount
payable by a Danish Guarantor in respect of its Specified Obligations shall be
limited to an amount equal to:
1.
the higher of that Danish Guarantor's Equity (A) on the date of
this Agreement, and (B) the relevant Specified Obligations Call
Date, in either case calculated in accordance with applicable
GAAP for that Danish Guarantor at that time; plus
2.
that Danish Guarantor's Guarantor Indirect Utilisations as of the
relevant Specified Obligations Call Date; plus
3.
that Danish Guarantor's Subsidiary Indirect Utilisations as of the
relevant Specified Obligations Call Date.
For the purposes of this Clause 13.4:
"Equity" means the equity (egenkapital) of the Danish Guarantor, adjusted,
however, to the extent that market value of an asset is higher or lower than
its bookvalue.
"Guarantor Indirect Utilisations" means in respect of any intercompany loan
(a "Guarantor Intercompany Loan") owing by a Danish Guarantor to the
Issuer and originally borrowed by the Issuer under this Agreement and on-lent
by the Issuer to the Danish Guarantor, the total outstanding amount of the
sum, at the time when a claim for payment in respect of Specified Obligations
is made, of
i.
the principal amount of that Guarantor Intercompany Loan;
ii.
accrued and unpaid interest in respect of that Guarantor
Intercompany Loan; and
iii.
costs and fees attributable to that Guarantor Intercompany
Loan,
provided always that any payment made by the Danish Guarantor in respect
of the Specified Obligations on the basis of Guarantor Indirect Utilisations
relating to that Guarantor Intercompany Loan shall reduce that Guarantor
Intercompany Loan correspondingly.
"Specified Obligations" means in respect of a Danish Guarantor, its
obligations and liabilities under this Clause 13 and under any other guarantee,
indemnity, security, collateral, subordination of rights and/or claims,
subordination and/or turnover of rights of recourse, application of proceeds
provision and any other means or direct or indirect financial assistance under
or pursuant to any Finance Document.
"Specified Obligations Call Date" means in respect of a Danish Guarantor, the
date upon which the Bond Trustee or the Security Agent makes a demand for
payment in respect of that Danish Guarantor's Specified Obligations under any
Finance Document.
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Company Description
"Subsidiary Indirect Utilisations" means in respect of any intercompany loan
(a "Subsidiary Intercompany Loan") owing by the Subsidiary of a Danish
Guarantor to the Issuer and originally borrowed by the Issuer under this
Agreement and on-lent by the Issuer to that Subsidiary, the total outstanding
amount of the sum, at the time when a claim for payment in respect of
Specified Obligations is made, of
i.
the principal amount of that Subsidiary Intercompany Loan;
ii.
accrued and unpaid interest in respect of that Subsidiary
Intercompany Loan; and
iii.
costs and fees attributable to that Subsidiary Intercompany
Loan,
provided always that any payment made the Danish Guarantor in respect of
the Specified Obligations on the basis of Subsidiary Indirect Utilisations
relating to that Subsidiary Intercompany Loan shall reduce that Subsidiary
Intercompany Loan correspondingly.
(d)
The Bond Trustee and the Bondholders agree, not to enforce any Guarantee
given by the German Guarantor, if and to the extent that (i) the enforcement
of the Guarantee would cause the German Guarantor’s Net Assets (or any of it
affiliates, if any) to be less than its respective registered share capital
(Begründung einer Unterbilanz) or would cause such amount (meaning the
remaining share capital) to be further reduced (Vertiefung einer Unterbilanz)
by applying the Adjustment Mechanism or (ii) would trigger the obligation of
the managing director(s) of the German Guarantor to file for insolvency due to
inability to pay one’s debt (Zahlungsunfähigkeit).
(e)
The limitations on the enforcement of the German Guarantor shall
discontinue to apply in the event of a (i) conclusion of a profit and loss sharing
agreement and /or (ii) a conclusion of a domination agreement between the
Issuer and the German Guarantor.
(f)
If a payment or the honouring of any Security Document by an Obligor has
been made in contravention of the limitations contained in this Clause 13.4,
the Bond Trustee and the Bondholders shall not be liable for any damages in
relation thereto, and the maximum amount repayable (if any) as a
consequence of such contravention shall be the amount received from that
Obligor.
14.
COVENANTS
14.1
General
The Issuer and, where relevant each Guarantor, undertakes from the date of this Bond
Agreement and until such time that no amounts are outstanding under this Bond Agreement
or any other Finance Document, to the Bond Trustee, as further set out in this Clause 134.
14.2
Information Covenants
The Issuer shall:
(a)
without being requested to do so, promptly inform the Bond Trustee in
writing of any Event of Default, any event or circumstance which the Issuer
48
Company Description
understands or ought to understand may lead to an Event of Default and any
other event which may have a Material Adverse Effect;
14.3
(b)
without being requested to do so, inform the Bond Trustee in writing if the
Issuer agrees to sell or dispose of all or a substantial part of its assets or
operations, or change the nature of its business;
(c)
without being requested to do so, prepare Financial Statements and make
them available on its website in the English language (alternatively by
arranging for publication at Stamdata) as soon as they become available, and
not later than 120 days after the end of the financial year;
(d)
without being requested to do so, prepare Interim Accounts and make them
available on its website in the English language (alternatively by arranging for
publication on Stamdata) as soon as they become available, and not later than
60 days after the end of the half year;
(e)
at the request of the Bond Trustee, report the balance of the Issuer’s Bonds;
(f)
without being requested to do so, send the Bond Trustee copies of any
statutory notifications of the Issuer, including but not limited to in connection
with mergers, de-mergers and reduction of the Issuer’s share capital or Equity;
(g)
if the Bonds are listed on an exchange, without being requested to do so, send
a copy to the Bond Trustee of its notices to the Exchange;
(h)
if the Issuer and/or the Bonds are rated, without being requested to do so,
inform the Bond Trustee of its and/or the rating of the Bond Issue, and any
changes to such rating;
(i)
without being requested to do so, inform the Bond Trustee of changes in the
registration of the Bonds in the Securities Depository; and
(j)
within a reasonable time, provide such information about the Issuer’s
business, assets and financial condition as the Bond Trustee may reasonably
request.
Compliance Certificate
The Issuer shall within a period of 60 days from each Quarter Date confirm to the Bond
Trustee in writing the Issuer’s compliance with the covenants in this Clause 14 and 15, unless
the Bond Trustee explicitly waives such requirement. Such confirmation shall be undertaken
in a certificate, substantially in the form set out in Attachment 2 hereto, signed by the Chief
Executive Officer or Chief Financial Officer of the Issuer (a "Compliance Certificate"). In the
event of non-compliance, the Compliance Certificate shall describe the non-compliance, the
reasons therefore as well as the steps which the Issuer has taken and will take in order to
rectify the non-compliance.
14.4
Pari passu ranking
The Issuer shall ensure that its obligations under this Bond Agreement and any other Finance
Document shall at all time rank at least pari passu as set out in Clause 8.1.
14.5
Dividends restrictions
(a)
The Issuer shall not make any dividend payment, repurchase shares or make
any other distributions to its shareholders including servicing of any
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Company Description
shareholders loans and/or any other subordinated loans exceeding 50 per
cent of Issuer's consolidated net profit after taxes based on the audited
annual accounts for the previous financial year (always subject to the financial
covenants described in Clause 15).
(b)
14.6
Notwithstanding the above the Issuer may purchase or redeem up to five per
cent of its share capital with an amount not exceeding DKK 75,000,000. The
option to purchase or redeem shares does not apply to shares held by ZS
Holding A/S.
Mergers
The Issuer shall not, and shall ensure that no other Group Company shall, carry out any
merger or other business combination or corporate reorganization involving a consolidation
of the assets and obligations of the Issuer or such Group Company with any other companies
or entities being, or not being a member of the Group if such transaction would have a
Material Adverse Effect.
14.7
De-mergers
The Issuer shall not, and shall ensure that no other Group Company shall, carry out any demerger or other corporate reorganization involving a split of the Issuer or such Group
Company into two or more separate companies or entities, if such transaction would have a
Material Adverse Effect.
14.8
14.9
Continuation of business
(a)
The Issuer shall not cease to carry on its business, and shall ensure that no
other Group Company shall cease to carry on its business, if such transaction
would have a Material Adverse Effect.
(b)
The Issuer shall procure that no material change is made to the general nature
or scope of the business of the Group from that carried on at the date of this
Bond Agreement, and/or as set out in this Bond Agreement.
Disposal of business
The Issuer shall not, and shall ensure that no other Group Company shall, sell or otherwise
dispose of all or a substantial part of the Group’s assets or operations, unless:
14.10
(a)
the transaction is carried out at fair market value, on terms and conditions
customary for such transactions; and
(b)
such transaction would not have a Material Adverse Effect.
Negative pledge
The Issuer shall not, and shall ensure that no other Group Company shall, create, permit to
subsist or allow to exist any Security over any of its present or future respective assets of its
revenues, other than the Security granted to secure any of the following:
14.11
(a)
the relevant Permitted Financial Indebtedness; and
(b)
any lien arising from operation of law.
Financial indebtedness restriction
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Company Description
The Issuer shall ensure that no Group Company shall, incur, create, permit to subsist any
Financial Indebtedness (including guarantees) other than Financial Indebtedness created by:
14.12
(a)
the Permitted Financial Indebtedness; and
(b)
any Subordinated Loans.
Financial support restrictions
The Issuer shall not and shall ensure that no other Group Company shall grant any loans,
guarantees or other financial assistance (including but not limited to granting of security)
("Financial Support") to or for the benefit of any third party or other Group Company, other
than any Financial Support granted:
14.13
(a)
in connection with the Permitted Financial Indebtedness; and
(b)
in the ordinary course of business.
Subordinated loans
The Issuer shall ensure that any subordinated loans or shareholder loans to the Issuer or any
other Group Company from any of the Issuer's shareholders or any other third party shall be
subordinated to the Bonds and be made on terms acceptable to the Bond Trustee. Any
subordinated loans to any other Group Company other than the Issuer is furthermore
subject to an agreement with the Bond Trustee to, inter alia, procure turnover of proceeds
to the Bond Trustee in order to give full effect of such subordination in favour of the Bonds.
14.14
14.15
Arm's length transactions
(a)
The Issuer shall not engage in, or permit any other Group Company to engage
in, directly or indirectly, any transaction with any party (without limitation, the
purchase, sale or exchange of assets or the rendering of any service), except in
the ordinary course of business and pursuant to the reasonable requirement
of the Issuer's or such Group Company's business and upon fair and
reasonable terms that are no less favourable to the Issuer or such Group
Company, as the case may be, than those which might be obtained in an arm's
length transaction at the time.
(b)
Notwithstanding the above the Issuer may transfer unpledged assets located
in Germany to a subsidiary domiciled in Germany.
Insurances
The Issuer shall and the Issuer shall procure that each other Group Company will, maintain
with financially sound and reputable insurance companies, funds or underwriters adequate
insurance or captive arrangements with respect to its assets, equipment and business
against such liabilities, casualties and contingencies and of such types and in such amounts
as are consistent with prudent business practice in their relevant jurisdiction.
14.16
Subsidiaries' distributions
Save for restrictions made pursuant to Permitted Financial Indebtedness, the Issuer shall not
permit any Guarantors to create or permit to exist any contractual obligation (or
encumbrance) restricting the right of any Guarantor to (i) pay dividends or make other
distributions to its shareholders, (ii) service any financial indebtedness to the Issuer, or (iii)
make any loans to the Issuer, if the creation of such contractual obligation is reasonably
51
Company Description
likely to prevent the Issuer from complying with its payment obligations under this Bond
Agreement.
14.17
Corporate status
No Obligor shall change its type of organization or jurisdiction of incorporation.
14.18
Compliance with laws
The Issuer shall, and shall ensure that all other Group Companies shall, carry on its business
in accordance with acknowledged, careful and sound practices in all material aspects and
comply in all material respects with all laws and regulations it or they may be subject to from
time to time.
14.19
Conditions Subsequent
The Issuer shall ensure that the Restructuring is completed no later than by 30 September
2013.
15.
FINANCIAL COVENANTS
15.1
Definitions:
"EBITDA" means (on a consolidated basis) the Group's aggregate earnings before interest,
taxes and depreciation and amortization (to be calculated on a 12-month rolling basis).
"Equity" means (on a consolidated basis) the aggregate book value of the Group's total
equity treated as equity in accordance with GAAP (including IFRS if applicable to the Issuer).
"Equity Ratio" means the ration of Equity to Total Assets.
"Liquidity" means the aggregate of
(a)
the book value of the Group's Cash and Cash Equivalents (as defined below)
(on a consolidated basis); and
(b)
undrawn committed revolving credit lines available to the Group (but
excluding committed revolving credit lines with less than three months to
maturity).
where "Cash and Cash Equivalents" means, on any date, the aggregate of the equivalent in
DKK on such date of the then current market value of:
(a)
cash in hand or amounts standing to the credit of any current and/or on
deposit accounts with an Acceptable Bank; and
(b)
time deposits with Acceptable Banks and certificates of deposit issued, and
bills of exchange accepted, by an Acceptable Bank,
in each case, to which any Group Company is beneficially entitled at that time and to which
any such Group Company has free and unrestricted access and which is not subject to any
Security. An "Acceptable Bank" for this purpose is:
(a)
a commercial bank, savings bank and trust company which has a rating of Aor higher by Standard & Poor's, Moody’s or a comparable rating from a
nationally recognised credit ranking agency for its long-term debt obligations;
or
52
Company Description
(b)
a bank or financial institution which is authorised to carry on banking business
in Norway.
"Net Interest Cost" means (on a consolidated basis) the aggregate gross cash interest costs
of the Group related to the Group's interest-bearing debt less the aggregate gross cash
interest income of the Group (to be calculated on a 12-month rolling basis). Realized or
unrealized gains or losses on interest rate, currency or derivative transactions shall not be
considered as interest income or cost.
"Total Assets" means (on a consolidated basis) the aggregate book value of the Group's total
assets treated as assets in accordance with GAAP (including IFRS if applied by the Issuer).
15.1
Equity Ratio
The Issuer shall ensure that the Group maintains an Equity Ratio of minimum 27.50 per cent.
15.2
Liquidity
The Issuer shall ensure that the Group maintains Liquidity of minimum DKK 10 million.
15.3
Interest Coverage Ratio
The Issuer shall ensure that the Group maintains an Interest Coverage Ration of not less than
3.00.
15.4
Calculation and compliance
The Issuer undertakes to comply with the financial covenants in this Clause 15 at all times,
and such compliance shall be calculated on a consolidated basis on each Quarter Date for the
Group and certified by the Issuer through a Compliance Certificate.
16.
FEES AND EXPENSES
16.1
Expenses
The Issuer shall cover all costs and expenses incurred by it or the Bond Trustee (and/or the
Security Agent) in connection with this Bond Agreement and the fulfilment of its obligations
under this Bond Agreement or any other Finance Document, including in connection with the
negotiation preparation, execution and enforcement of this Bond Agreement and the other
Finance Documents and any registration or notifications relating thereto (including any
stamp duty), the listing of the Bonds on an Exchange (if applicable), and the registration and
administration of the Bonds in the Securities Depository. The Bond Trustee may withhold
funds from any escrow account (or similar arrangement) or from other funds received from
the Issuer (or any Guarantor (if any) or any other person), irrespective of such funds being
subject to Security under a Finance Document, set-off cover any such costs and expenses.
16.2
Fee Agreement
The fees, costs and expenses payable to the Bond Trustee (and/or the Security Agent) shall
be paid by the Issuer and are set out in a separate agreement between the Issuer and the
Bond Trustee (and/or the Security Agent).
16.3
Payment deficiency
Fees, costs and expenses payable to the Bond Trustee (or the Security Agent) which, due to
the Issuer’s insolvency or similar circumstances, are not reimbursed in any other way may be
covered by making an equivalent reduction in the proceeds to the Bondholders hereunder of
53
Company Description
any costs and expenses incurred by the Bond Trustee (or the Security Agent) in connection
with the restructuring or default of the Bond Issue and enforcement of any Security.
16.4
Public fees
Any public fees levied on the trade of Bonds in the secondary market shall be paid by the
Bondholders, unless otherwise provided by law or regulation, and the Issuer is not
responsible for reimbursing any such fees.
16.5
Withholding tax
(a)
The Issuer is responsible for withholding any withholding tax imposed by
applicable law on any payments to the Bondholders.
(b)
If the Issuer is required by law to withhold any withholding tax from any
payment under any Finance Document:
(c)
17.
(i)
the amount of the payment due from the Issuer shall be
increased to such amount which is necessary to ensure that the
Bondholders receive a net amount which is (after making the
required withholding) equal to the payment which would have
been due if no withholding had been required; and
(ii)
the Issuer shall at the request of the Bond Trustee deliver to the
Bond Trustee evidence that the required tax reduction or
withholding has been made.
If any withholding tax is imposed due to subsequent changes in applicable law
after the date of this Bond Agreement, the Issuer shall have the right to call all
but not some of the Bonds at par value plus accrued interest. Such call shall be
notified by the Issuer in writing to the Bond Trustee and the Bondholders at
least 30 Business Days prior to the settlement date of the call.
EVENTS OF DEFAULT
The Bond Trustee may declare the Bonds to be in default upon occurrence of any of the
following events:
17.1
Non-payment
Any Obligor fails to fulfil any payment obligation due under this Bond Agreement or any
Finance Document when due, unless, in the opinion of the Bond Trustee, it is likely that such
payment will be made in full within five Business Days following the original due date.
17.2
Breach of other obligations
Any Obligor does not comply with any provision pursuant to this Bond Agreement or any
other Finance Document, unless, in the opinion of the Bond Trustee, such failure is capable
of being remedied and is remedied within 10 Business Days after notice thereof is given to
the Issuer by the Bond Trustee.
17.3
Cross default
If for the Issuer and any other Group Company:
(a)
any Financial Indebtedness is not paid when due nor within any originally
applicable grace period;
54
Company Description
(b)
any Financial Indebtedness is declared to be or otherwise becomes due and
payable prior to its specified maturity as a result of an event of default
(however described);
(c)
any commitment for any Financial Indebtedness is cancelled or suspended by
a creditor as a result of an event of default (however described); or
(d)
any creditor becomes entitled to declare any Financial Indebtedness due and
payable prior to its specified maturity as a result of an event of default
(however described),
always provided that a threshold in the aggregate amount of Financial Indebtedness or
commitment for Financial Indebtedness falling within paragraphs (a) to (d) above of a total
of DKK 25,000,000 or the equivalent thereof in other currencies, shall apply.
17.4
Misrepresentations
Any representation, warranty or statement (including statements in compliance certificates)
made under this Bond Agreement or any other Finance Document or in connection
therewith is or proves to have been incorrect, inaccurate or misleading in any material
respect when made or deemed to have been made.
17.5
17.6
Insolvency
(a)
Any Group Company, is unable or admits inability to pay its debts as they fall
due, suspends making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commences negotiations with one or more of
its creditors with a view to rescheduling any of its indebtedness.
(b)
The value of the assets of any member of the Group is less than its liabilities
(taking into account contingent and prospective liabilities).
(c)
A moratorium is declared in respect of any indebtedness of any member of
the Group.
Insolvency proceedings and dissolution
If for any Group Company, any corporate action, legal proceedings or other procedure step is
taken in relation to:
(a)
the suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration or reorganisation
(by way of voluntary
arrangement, scheme of arrangement or otherwise) other than solvent
liquidation or reorganisation;
(b)
a composition, compromise, assignment or arrangement with any creditor,
having an adverse effect on the Issuer’s ability to perform its payment
obligations hereunder;
(c)
the appointment of a liquidator (other than in respect of a solvent
liquidation), receiver, administrative receiver, administrator, compulsory
manager or other similar officer of any of its assets;
(d)
a resolution is taken in order for it to be dissolved,
or any analogous procedure or step is taken in any jurisdiction.
55
Company Description
17.7
Creditors’ process
Any Group Company has a substantial proportion of the assets impounded, confiscated,
attached or subject to distraint, or is subject to enforcement of any Security over any of its
assets.
17.8
Impossibility or illegality
It is or becomes impossible or unlawful for any Group Company to fulfil or perform any of
the terms of any Finance Document to which it is a party.
17.9
Material Adverse Change
Any other event or circumstance occurs which, in the reasonable opinion of the Bond
Trustee, after consultations with the Issuer, would have a Material Adverse Effect.
17.10
Acceleration
(a)
In the event that one or more of the circumstances mentioned in Clauses 17.1
– 17.9 occurs and is continuing, the Bond Trustee can, in order to protect the
interests of the Bondholders, declare the Outstanding Bonds including
accrued interest, costs and expenses to be in default and due for immediate
payment.
The Bond Trustee may at its discretion take every measure necessary to
recover the amounts due under the Outstanding Bonds, and all other amounts
outstanding under this Bond Agreement and any other Finance Document.
(b)
In the event that one or more of the circumstances mentioned in Clauses 17.1
– 17.9 occurs and is continuing, the Bond Trustee shall declare the
Outstanding Bonds including accrued interest, costs and expenses to be in
default and due for immediate payment if:
(i)
the Bond Trustee receives a demand in writing that a default
shall be declared from Bondholders representing at least 1/5 of
the Voting Bonds, and the Bondholders’ Meeting has not
decided on other solutions, or
(ii)
the Bondholders’ Meeting has with simple majority decided to
declare the Outstanding Bonds in default and due for payment.
In either case the Bond Trustee shall take every measure necessary to recover
the amounts due under the Outstanding Bonds.
(c)
In the event that the Bond Trustee pursuant to the terms of Clause 17.10 (a)
or (b) declares the Outstanding Bonds to be in default and due for payment,
the Bond Trustee shall immediately deliver to the Issuer a notice demanding
payment of interest and principal due to the Bondholders under the
Outstanding Bonds including accrued interest and interest on overdue
amounts and expenses.
18.
BONDHOLDERS’ MEETING
18.1
Authority of the Bondholders’ Meeting
(a)
The Bondholders’ Meeting represents the supreme authority of the
Bondholders community in all matters relating to the Bonds, and has the
56
Company Description
power to make all decisions altering the terms and conditions of the Bonds,
including, but not limited to, any reduction of principal or interest and any
conversion of the Bonds into other capital classes.
18.2
(b)
The Bondholders’ Meeting cannot resolve that any overdue payment of any
instalment shall be reduced unless there is a pro rata reduction of the
principal that has not fallen due, but may resolve that accrued interest
(whether overdue or not) shall be reduced without a corresponding reduction
of principal.
(c)
If a resolution by or an approval of the Bondholders is required, such
resolution shall be passed at a Bondholders’ Meeting, see however Clause
19.1. Resolutions passed at Bondholders’ Meetings shall be binding upon all
Bondholders and prevail for all the Bonds.
Procedural rules for Bondholders’ meetings
(a)
A Bondholders’ Meeting shall be held at the written request of:
(i)
the Issuer;
(ii)
Bondholders representing at least 1/10 of the Voting Bonds;
(iii)
the Exchange, if the Bonds are listed; or
(iv)
the Bond Trustee.
(b)
The Bondholders’ Meeting shall be summoned by the Bond Trustee. A request
for a Bondholders’ Meeting shall be made in writing to the Bond Trustee, and
shall clearly state the matters to be discussed.
(c)
If the Bond Trustee has not summoned a Bondholders’ Meeting within ten
Business Days after having received a valid request, then the requesting party
may summon the Bondholders’ Meeting itself.
(d)
The notice of a Bondholders' Meeting shall be dispatched no later than ten
Business Days prior to the date of the Bondholders’ Meeting. The notice and a
confirmation of each Bondholder’s holdings of Bonds shall be sent to all
Bondholders registered in the Securities Depository at the time of distribution.
The notice shall also be sent to the Exchange for publication if the Bonds are
listed.
(e)
The summons shall specify the agenda of the Bondholders’ Meeting. The Bond
Trustee may in the summons also set out other matters on the agenda than
those requested. If amendments to this Bond Agreement have been
proposed, the main content of the proposal shall be stated in the summons.
(f)
The Bond Trustee may restrict the Issuer from making any changes in the
number of Voting Bonds in the period from distribution of the summons until
the Bondholders’ Meeting, by serving notice to it to such effect.
(g)
Matters that have not been reported to the Bondholders in accordance with
the procedural rules for summoning of a Bondholders’ Meeting may only be
adopted with the approval of all Voting Bonds.
(h)
The Bondholders’ Meeting shall be held on premises designated by the Bond
Trustee. The Bondholders’ Meeting shall be opened and shall, unless
57
Company Description
otherwise decided by the Bondholders’ Meeting, be chaired by the Bond
Trustee. If the Bond Trustee is not present, the Bondholders’ Meeting shall be
opened by a Bondholder, and be chaired by a representative elected by the
Bondholders’ Meeting.
18.3
(i)
Minutes of the Bondholders’ Meeting shall be kept. The minutes shall state
the numbers of Bondholders and Bonds represented at the Bondholders’
Meeting, the resolutions passed at the meeting, and the result of the voting.
The minutes shall be signed by the chairman and at least one other person
elected by the Bondholders’ Meeting. The minutes shall be deposited with the
Bond Trustee and shall be available to the Bondholders.
(j)
The Bondholders, the Bond Trustee and – provided the Bonds are listed –
representatives of the Exchange, have the right to attend the Bondholders’
Meeting. The chairman may grant access to the meeting to other parties,
unless the Bondholders’ Meeting decides otherwise. Bondholders may attend
by a representative holding proxy. Bondholders have the right to be assisted
by an advisor. In case of dispute the chairman shall decide who may attend
the Bondholders’ Meeting and vote for the Bonds.
(k)
Representatives of the Issuer have the right to attend the Bondholders’
Meeting. The Bondholders’ Meeting may resolve that the Issuer’s
representatives may not participate in particular matters. The Issuer has the
right to be present under the voting.
Resolutions passed at Bondholders’ Meetings
(a)
At the Bondholders’ Meeting each Bondholder may cast one vote for each
Voting Bond owned at close of business on the day prior to the date of the
Bondholders’ Meeting in accordance with the records registered in the
Securities Depository. The Bond Trustee may, at its sole discretion, accept
other evidence of ownership. Whoever opens the Bondholders’ Meeting shall
adjudicate any question concerning which Bonds shall count as the Issuer’s
Bonds. The Issuer’s Bonds shall not have any voting rights.
(b)
For this purpose, a Bondholder that has a Bond that is nominee registered
shall be deemed as the Bondholder of such Bond (instead of the nominee)
provided that the Bondholder presents relevant evidence stating that the
relevant Bondholder is the Bondholder of the Bond and the amount of Bonds
held by such Bondholder.
(c)
In all matters, the Issuer, the Bond Trustee and any Bondholder have the right
to demand vote by ballot. In case of parity of votes, the chairman shall have
the deciding vote, regardless of the chairman being a Bondholder or not.
(d)
In order to form a quorum, at least half (1/2) of the Voting Bonds must be
represented at the meeting, see however Clause 18.4. Even if less than half
(1/2) of the Voting Bonds are represented, the Bondholders’ Meeting shall be
held and voting completed.
(e)
Resolutions shall be passed by simple majority of the Voting Bonds
represented at the Bondholders’ Meeting, unless otherwise set out in Clause
18.3 (f).
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Company Description
18.4
(f)
A majority of at least 2/3 of the Voting Bonds represented at the Bondholders’
Meeting is required for any waiver or amendment of any terms of this Bond
Agreement.
(g)
The Bondholders’ Meeting may not adopt resolutions which may give certain
Bondholders or others an unreasonable advantage at the expense of other
Bondholders.
(h)
The Bond Trustee shall ensure that resolutions passed at the Bondholders’
Meeting are properly implemented, however, the Bond Trustee may refuse to
carry out resolutions being in conflict with this Bond Agreement (or any other
Finance Document) or any applicable law.
(i)
The Issuer, the Bondholders and the Exchange shall be notified of resolutions
passed at the Bondholders’ Meeting.
Repeated Bondholders’ meeting
(a)
If the Bondholders’ Meeting does not form a quorum pursuant to Clause 18.3
(d), a repeated Bondholders’ Meeting may be summoned to vote on the same
matters. The attendance and the voting result of the first Bondholders’
Meeting shall be specified in the summons for the repeated Bondholders’
Meeting.
(b)
A valid resolution may be passed at a repeated Bondholders' meeting even
though less than half (1/2) of the Voting Bonds are represented.
19.
THE BOND TRUSTEE
19.1
The role and authority of the Bond Trustee
(a)
The Bond Trustee shall monitor the compliance by the Issuer of its obligations
under this Bond Agreement and applicable laws and regulations which are
relevant to the terms of this Bond Agreement, including supervision of timely
and correct payment of principal or interest, (however, this shall not restrict
the Bond Trustee from discussing matters of confidentiality with the Issuer),
arrange Bondholders’ Meetings, and make the decisions and implement the
measures resolved pursuant to this Bond Agreement. The Bond Trustee is not
obligated to assess the Issuer’s financial situation beyond what is directly set
out in this Bond Agreement.
(b)
The Bond Trustee may take any step it in its sole discretion considers
necessary or advisable to ensure the rights of the Bondholders in all matters
pursuant to the terms of this Bond Agreement and is entitled to rely on advice
from professional advisors. The Bond Trustee may in its sole discretion
postpone taking action until such matter has been put forward to the
Bondholders’ Meeting. The Bond Trustee is not obliged to take any steps to
ascertain whether any Event of Default has occurred and until it has actual
knowledge or express notice to the contrary the Bond Trustee is entitled to
assume that no Event of Default has occurred.
(c)
The Bond Trustee may make decisions binding for all Bondholders concerning
this Bond Agreement, including amendments to this Bond Agreement and
waivers or modifications of certain provisions, which in the opinion of the
Bond Trustee, do not materially and adversely affect the rights or interests of
the Bondholders pursuant to this Bond Agreement.
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Company Description
19.2
(d)
The Bond Trustee may reach decisions binding for all Bondholders in
circumstances other than those mentioned in Clause 19.1 (c) provided that
prior notification has been made to the Bondholders. Such notice shall contain
a proposal of the amendment and the Bond Trustee’s evaluation. Further,
such notification shall state that the Bond Trustee may not reach a decision
binding for all Bondholders in the event that any Bondholder submits a
written protest against the proposal within a deadline set by the Bond
Trustee. Such deadline may not be less than five Business Days following the
dispatch of such notification.
(e)
The Bond Trustee may reach other decisions than set out in Clauses 19.1 (c)
and (d) to amend or rectify decisions which due to spelling errors, calculation
mistakes, misunderstandings or other obvious errors do not have the
intended meaning.
(f)
The Bond Trustee may not adopt resolutions which may give certain
Bondholders or others an unreasonable advantage at the expense of other
Bondholders.
(g)
The Issuer, the Bondholders and the Exchange shall be notified of decisions
made by the Bond Trustee pursuant to Clause 19.1 unless such notice
obviously is unnecessary.
(h)
The Bondholders’ Meeting can decide to replace the Bond Trustee without the
Issuer’s approval, as provided for in Clause 18.2 (e).
(i)
The Bond Trustee may act as bond trustee and/or security agent for several
bond issues relating to the Issuer notwithstanding potential conflicts of
interest. The Bond Trustee may delegate exercise of its powers to other
professional parties.
(j)
The Bond Trustee may instruct the Paying Agent to split the Bonds to a lower
denomination in order to facilitate partly redemptions or restructuring of the
Bonds or other situations.
Liability and indemnity
(a)
The Bond Trustee is liable only for direct losses incurred by Bondholders or
the Issuer as a result of gross negligence or wilful misconduct by the Bond
Trustee in performing its functions and duties as set out in this Bond
Agreement. Such liability is limited to the maximum amount set out in Clause
2.3. The Bond Trustee is not liable for the content of information provided to
the Bondholders on behalf of the Issuer.
(b)
The Issuer is liable for, and shall indemnify the Bond Trustee fully in respect
of, all losses, expenses and liabilities incurred by the Bond Trustee as a result
of negligence by the Issuer (including its directors, management, officers,
employees, agents and representatives) to fulfil its obligations under the
terms of this Bond Agreement and any other Finance Document, including
losses incurred by the Bond Trustee as a result of the Bond Trustee’s actions
based on misrepresentations made by the Issuer in connection with the
establishment and performance of this Bond Agreement and any other
Finance Document.
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Company Description
(c)
19.3
19.4
The Bond Trustee can as a condition for carrying out an instruction from the
Bondholders (including, but not limited to, instructions set out in Clause 17.10
(b) (i) or 18.2 (a) (ii), require satisfactory security and indemnities for any
possible liability and anticipated costs and expenses, from those Bondholders
who requested that instruction and/or those who voted in favour of the
decision to instruct the Bond Trustee. Any instructions from the Bondholders
may be put forward to the Bondholders’ Meeting by the Bond Trustee before
the Bond Trustee takes any action.
Change of Bond Trustee
(a)
Change of Bond Trustee shall be carried out pursuant to the procedures set
out in Clause 18. The Bond Trustee shall continue to carry out its duties as
bond trustee until such time that a new Bond Trustee is elected.
(b)
The fees and expenses of a new bond trustee shall be covered by the Issuer
pursuant to the terms set out in Clause 16, but may be recovered wholly or
partially from the Bond Trustee if the change is due to a breach by the Bond
Trustee of its duties pursuant to the terms of this Bond Agreement or other
circumstances for which the Bond Trustee is liable.
(c)
The Bond Trustee undertakes to co-operate so that the new bond trustee
receives without undue delay following the Bondholders’ Meeting the
documentation and information necessary to perform the functions as set out
under the terms of this Bond Agreement.
Appointment of Security Agent
(a)
The Bond Trustee is appointed to act as Security Agent for the Bond Issue.
(b)
The main functions of the Security Agent may include holding Security on
behalf of the Bondholders and monitoring compliance by the Issuer and other
relevant parties of their respective obligations under this Bond Agreement
and/or the Security Documents with respect to the Security.
(c)
Before the appointment of a Security Agent other than the Bond Trustee, the
Issuer shall be given the opportunity to state its views on the proposed
Security Agent, but the final decision as to appointment shall lie exclusively
with the Bond Trustee.
(d)
The functions, rights and obligations of the Security Agent may be determined
by a Security Agent agreement to be entered into between the Bond Trustee
and the Security Agent, which the Bond Trustee shall have the right to require
each Obligor and any other parties to any Security Document to sign as a
party, or, at the discretion of the Bond Trustee, to acknowledge. The Bond
Trustee shall at all times retain the right to instruct the Security Agent in all
matters.
(e)
Any changes to this Bond Agreement necessary or appropriate in connection
with the appointment of a Security Agent shall be documented in an
amendment to this Bond Agreement, signed by the Bond Trustee.
(f)
If so desired by the Bond Trustee, any or all of the Security Documents shall be
amended, assigned or re-issued, so that the Security Agent is the holder of the
relevant Security (on behalf of the Bondholders). The costs incurred in
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Company Description
connection with such amendment, assignment or re-issue shall be for the
account of the Issuer.
20.
MISCELLANEOUS
20.1
The community of Bondholders
By virtue of holding Bonds, which are governed by this Bond Agreement (which pursuant to
Clause 2.1 is binding upon all Bondholders), a community exists between the Bondholders,
implying, inter alia, that:
20.2
(a)
the Bondholders are bound by the terms of this Bond Agreement;
(b)
the Bond Trustee has power and authority to act on behalf of, and/or
represent; the Bondholders, in all matters, included but not limited to taking
any legal or other action, including enforcement of the Bond Issue and/or any
Security, opening of bankruptcy or other insolvency proceedings;
(c)
the Bond Trustee has, in order to manage the terms of this Bond Agreement,
access to the Securities Depository to review ownership of Bonds registered in
the Securities Depository; and
(d)
this Bond Agreement establishes a community between Bondholders meaning
that:
(i)
the Bonds rank pari passu between each other;
(ii)
the Bondholders may not, based on this Bond Agreement, act
directly towards the Issuer and may not themselves institute
legal proceedings against the Issuer, however not restricting
the Bondholders to exercise their individual rights derived from
this Bond Agreement;
(iii)
the Issuer may not, based on this Bond Agreement, act directly
towards the Bondholders;
(iv)
the Bondholders may not cancel the Bondholders’ community;
and
(v)
the individual Bondholder
Bondholders’ community.
may
not
resign from the
Defeasance
(a)
The Issuer may, at its option and at any time, elect to have certain obligations
discharged (see Clause 20.2 (b) upon complying with the following conditions
("Security and Covenant Defeasance"):
(i)
the Issuer shall have irrevocably pledged to the Bond Trustee
for the benefit of the Bondholders cash or government bonds
accepted by the Bond Trustee (the "Defeasance Pledge") in
such amounts as will be sufficient for the payment of principal
and interest on the Outstanding Bonds to Maturity Date or any
other amount agreed between the Parties;
(ii)
no Event of Default shall have occurred and be continuing on
the date of establishment of the Defeasance Pledge, or insofar
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Company Description
as Events of Default from bankruptcy or insolvency events are
concerned, at any time during any hardening period applicable
to the Defeasance Pledge (or the relevant period for nonNorwegian companies) or any other date agreed between the
Parties;
(b)
(iii)
if the Bonds are secured, the Defeasance Pledge shall be
considered as a replacement of the Security established prior to
the Defeasance Pledge;
(iv)
the Issuer shall have delivered to the Bond Trustee a certificate
signed by its Chief Executive Officer that the Defeasance Pledge
was not made by the Issuer with the intent of preferring the
Bondholders over any other creditors of the Issuer or with the
intent of defeating, hindering, delaying or defrauding any other
creditors of the Issuer or others; and
(v)
the Issuer shall have delivered to the Bond Trustee any
certificate or legal opinion reasonably required by the Bond
Trustee regarding the Security and Covenant Defeasance or
Defeasance Pledge, including any certificate or legal opinion on
(i) the compliance of the conditions of the Security and
Covenant Defeasance, (ii) that the Defeasance Pledge
constitutes a valid, perfected and enforceable Security in favour
of the Bond Trustee for the benefit of the Bondholders, which
will not be subject to any rights of creditors of each Obligor or
any bankruptcy, insolvency, reorganization or similar laws
affecting creditors rights generally under the laws of the
jurisdiction where the Defeasance Pledge was established and
the corporate domicile of the Issuer, (iii) any relevant tax issues
concerning the Bondholders, (iv) any valuation of any assets or
(vii) any other certificate or opinion regarding the Security and
Covenant Defeasance or the Defeasance Pledge.
Upon the exercise by the Issuer of its option under Clause 20.2 (a):
(i)
all Obligors shall be released from their obligations under all
provisions in Clause 14 and 15, except Clauses 14.2(a), 14.2(e),
14.2(h), 14.2(i) and 14.2(j) or otherwise agreed;
(ii)
the Issuer shall not (and shall ensure that all Group Companies
shall not) take any actions that may cause the value of the
Security created by this Security and Covenant Defeasance to
be reduced, and shall at the request of the Bond Trustee
execute, or cause to be executed, such further documentation
and perform such other acts as the Bond Trustee may
reasonably require in order for the Security to remain valid,
enforceable and perfected by the Bond Trustee for the account
of the Bondholders;
(iii)
any Guarantor(s) shall be discharged from their obligations
under the Guarantee(s), and the Guarantee(s) shall cease to
have any legal effect, or as otherwise agreed;
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Company Description
(c)
(iv)
any Security other than the Defeasance Pledge shall be
discharged, and the Bond Trustee shall take all steps reasonably
possible for it to cause such discharge to be effected, by way of
deletion of the relevant Security Document from the relevant
register, notice to third parties or as otherwise required, or as
otherwise agreed; and
(v)
all other provisions of this Bond Agreement (except (i) – (iii)
above) shall remain fully in force without any modifications, or
as otherwise agreed.
All amounts owed by the Issuer hereunder covered by the Defeasance Pledge
shall be applied by the Bond Trustee, in accordance with the provisions of this
Bond Agreement, against payment to the Bondholders of all sums due to
them under this Bond Agreement on the due date thereof.
Any excess funds not required for the payment of principal, premium and interest to the
Bondholders (including any expenses, fees etc. due to the Bond Trustee hereunder) shall be
returned to the Issuer.
20.3
Limitation of claims
All claims under the Bonds and this Bond Agreement for payment, including interest and
principal, shall be subject to the time-bar provisions of the Norwegian Limitation Act of May
18, 1979 No. 18.
20.4
20.5
Access to information
(a)
This Bond Agreement is available to anyone and copies may be obtained from
the Bond Trustee or the Issuer. The Bond Trustee shall not have any obligation
to distribute any other information to the Bondholders or others than
explicitly stated in this Bond Agreement. The Issuer shall ensure that a copy of
this Bond Agreement is available to the general public until all the Bonds have
been fully discharged.
(b)
The Bond Trustee shall, in order to carry out its functions and obligations
under this Bond Agreement, have access to the Securities Depository for the
purposes of reviewing ownership of the Bonds registered in the Securities
Depository.
Amendments
All amendments of this Bond Agreement shall be made in writing, and shall unless otherwise
provided for by this Bond Agreement, only be made with the approval of all parties hereto.
20.6
Notices, contact information
(a)
Written notices, warnings, summons etc. to the Bondholders made by the
Bond Trustee shall be sent via the Securities Depository with a copy to the
Issuer and the Exchange. Information to the Bondholders may also be
published at Stamdata only. Any such notice or communication shall be
deemed to be given or made as follows:
(i)
if by letter via the Securities Depository, when sent from the
Securities Depository; and
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Company Description
(ii)
20.7
if by publication on Stamdata, when publicly available.
(b)
The Issuer’s written notifications to the Bondholders shall be sent via the
Bond Trustee, alternatively through the Securities Depository with a copy to
the Bond Trustee and the Exchange.
(c)
Unless otherwise specifically provided, all notices or other communications
under or in connection with this Bond Agreement between the Bond Trustee
and any Obligor shall be given or made in writing, by letter, e-mail or telefax.
Any such notice or communication shall be deemed to be given or made as
follows:
(i)
if by letter, when delivered at the address of the relevant Party;
(ii)
if by e-mail, when received; and
(iii)
if by fax, when received.
(d)
The Issuer and the Bond Trustee shall ensure that the other party is kept
informed of changes in postal address, e-mail address, telephone and fax
numbers and contact persons.
(e)
When determining deadlines set out in this Bond Agreement, the following
shall apply (unless otherwise stated):
(i)
If the deadline is set out in days, the first day when the deadline is in force
shall not be inclusive, however, the meeting day or the occurrence the
deadline relates to, shall be included.
(ii)
If the deadline is set out in weeks, months or years, the deadline shall end on
the day in the last week or the last month which, according to its name or
number, corresponds to the first day the deadline is in force. If such day is not
a part of an actual month, the deadline shall be the last day of such month.
(iii)
If a deadline ends on a day which is not a Business Day, the deadline is
postponed to the next Business Day.
Dispute resolution and legal venue
(a)
This Bond Agreement and all disputes arising out of, or in connection with this
Bond Agreement between the Bond Trustee, the Bondholders and any
Obligor, shall be governed by Norwegian law.
(b)
All disputes arising out of, or in connection with this Bond Agreement
between the Bond Trustee, the Bondholders and any Obligor, shall, subject to
paragraph (c) below, be exclusively resolved by the courts of Norway, with the
District Court of Oslo as sole legal venue.
(c)
This Clause 20.7 is for the benefit of the Bond Trustee only. As a result, the
Bond Trustee shall not be prevented from taking proceedings relating to a
dispute in any other courts with jurisdiction. To the extent allowed by law, the
Bond Trustee may take concurrent proceedings in any number of jurisdictions.
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Company Description
20.8
Process Agent
Each Obligor shall, prior to the Issue Date, nominate a process agent in Norway for the
purpose of serving a writ of summons and/or any other act of process in respect of the
courts in Norway, or any notices as set out in this Bond Agreement.
*****
This Bond Agreement has been executed in two originals, of which the Issuer and the Bond
Trustee retain one each.
For and behalf of
For and behalf of
GLOBALCONNECT A/S as Issuer
NORSK TILLITSMANN ASA as Bond Trustee
Signature__________________________
Signature________________________
Name with capital letters_____________
Name with capital letters___________
Title______________________________
Title____________________________
For and behalf of
For and behalf of
SUPERTEL A/S as Guarantor
GC-BO A/S as Guarantor
Signature__________________________
Signature________________________
Name with capital letters_____________
Name with capital letters___________
Title______________________________
Title____________________________
For and behalf of
For and behalf of
GIGACONTENT A/S as Guarantor
GLOBALCONNECT GMBH as Guarantor
Signature__________________________
Signature________________________
Name with capital letters_____________
Name with capital letters___________
Title______________________________
Title____________________________
66
Company Description
Attachment 1
THE GUARANTORS
Name of Guarantor
Registration number
Jurisdiction
SuperTel A/S
27 19 56 01
Denmark
GlobalConnect GmbH
HRB 74 616 (registered at the local court of Hamburg)
Germany
GC-BO A/S
34 04 73 24
Denmark
GigaContent A/S
28 33 37 30
Denmark
67
Company Description
Attachment 2
COMPLIANCE CERTIFICATE
Norsk Tillitsmann ASA
P.O. Box 1470 Vika
N-0116 Oslo
Norway
Fax:
+ 47 22 87 94 10
E-mail:
[email protected]
[Date]
Dear Sirs,
GLOBALCONNECT A/S BOND AGREEMENT 2013/2018 - ISIN 001 0678782
We refer to the Bond Agreement for the abovementioned Bond Issue made between Norsk Tillitsmann ASA
as Bond Trustee on behalf of the Bondholders, and the undersigned as Issuer under which a Compliance
Certificate shall be issued. This letter constitutes the Compliance Certificate for the period [PERIOD].
Capitalised terms used herein shall have the same meaning as this Bond Agreement.
With reference to Clause 14.3 we hereby certify that:
1.
all information contained herein is true and accurate and there has been no change which
would have a Material Adverse Effect on the financial condition of the Issuer since the date
of the last accounts or the last Compliance Certificate submitted to you;
2.
the covenants set out in Clauses 14 and 15 are satisfied;
3.
no default is continuing
4.
all relevant Security is established in accordance with this Bond Agreement;
5.
in accordance with Clause 15.1 the Equity Ratio is as of [date] XX;
6.
in accordance with Clause 15.2 Liquidity is as of [date] DKK XX;
7.
in accordance with Clause 15.3 the Interest Coverage Ratio is as of [date] XX; and
Copies of our latest consolidated [Financial Statements] / [Interim Accounts] are enclosed.
Yours faithfully,
GlobalConnect A/S
Name of authorized person________________
Enclosure: [copy of any written documentation]
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Company Description
Attachment 3
RELEASE NOTICE - ESCROW ACCOUNT
Norsk Tillitsmann ASA
P.O. Box 1470 Vika
N-0116 Oslo
Norway
Fax:
+ 47 22 87 94 10
E-mail:
[email protected]
[Date]
Dear Sirs,
GLOBALCONNECT A/S BOND AGREEMENT 2013/2018 - ISIN 001 0678782
We refer to the Bond Agreement for the abovementioned Bond Issue made between Norsk Tillitsmann ASA
as Bond Trustee on behalf of the Bondholders, and the undersigned as Issuer.
Capitalised terms are used herein as defined in this Bond Agreement.
We hereby give you notice that we on [date] wish to draw an amount of [currency and amount] from the
Escrow Account applied pursuant to the purpose set out in the Bond Agreement, and request you to
instruct the bank to release the above mentioned amount.
We hereby represent and warrant that:
(a)
no event which constitutes an Event of Default has occurred or is likely to occur; and
(b)
we repeat the representations and warranties set out in the Bond Agreement as being still
true and accurate at the time hereof.
Yours faithfully,
GlobalConnect A/S
Name of authorized person________________
Enclosure: [copy of any written documentation evidencing the use of funds]
69
Company Description
13 Glossary
Carrier class is a category of equipment and services that is designed or optimized for use by service
providers (carriers of data or media). Carrier class equipment may be more durable and reliable than
consumer class products and services
Cloud is a network or group of devices that can be used to provide communication connections or services
where the connections or services can be provided through the networks or devices in a relatively uniform
manner without the need to control or understand the inner workings of the network or the devices (the
“cloud”)
Co-location is the placement of equipment (such as multiple antennas) at a common physical site to reduce
environmental impact and real estate costs and speed zoning approvals and network deployment. Colocation can be affected by competitive and interference factors
Dark fibre is a fibre strand in a cable that is unused by other light sources. Dark fibre may be used by
customers to send any form or optical transmission (analogue or digital)
DSL, digital subscriber line, transmits digital information, usually on a copper wire pair. Although the transmitted information is in digital form, the transmission medium is usually an analogue carrier signal (or the
combination of many analogue carrier signals) that is modulated by the digital information signal
Ethernet is a packet based transmission protocol that is primarily used in LANs (Local Area Networks).
Ethernet is the common name for the IEEE 802.3 industry specification and it is often characterized by its
data transmission rate and type of transmission medium (e.g., twisted pair is T and fibre is F)
FTTH means “fibre to the home” and is a distribution system that uses fibre optic cable to connect
telephone networks to nodes that are located in the homes of customers. The fibre optic transmission is
used to provide broadband services beyond the central office, through the drop wire to the optical node
that is located in the customer's home
FM means the Danish Ministry of Finance
GSM, global system for mobile communication (GSM), is a wide area wireless communications system that
uses digital radio transmission to provide voice, data, and multimedia communication services. A GSM
system coordinates the communication between a mobile telephones (mobile stations), base stations (cell
sites), and switching systems
Hosting is the providing of application services (such as virtual telephone service or the providing of web
service) for the benefit of a client or customer
IBM DS8800 is a market leading storage system
IP means Internet Protocol, a low-level network protocol that is used for the addressing and routing of
packets through data networks. IP is the common language of the Internet. The IP protocol only has routing
information and no data confirmation rules
ISDN is a structured all digital telephone network system that was developed to replace (upgrade) existing
analogue telephone networks. The ISDN network supports for advanced telecommunications services and
defined universal standard interfaces that are used in wireless and wired communications systems
MaaS means Management as a Service
MPLS means Multi Protocol Label Switching and is the process of assigning labels to carriers that use
different transmission protocols in a transmission system. It is an interim protocol used until a fully global
native Internet Protocol is implemented.
70
Company Description
Microsoft LYNC is a leading enterprise software package containing basic features such as instant
messaging, VoIP and video conferencing and is an important part of Unified Communication.
PBX systems are private local telephone systems that are used to provide telephone service within a
building or group of buildings in a small geographic area. PBX systems contain small switches and advanced
call processing features such as speed dialling, call transfer, and voice mail. PBX systems connect local
telephones (“stations”) with each other and to the public switched telephone network (PSTN)
PSTN, public switched telephone networks, are communication systems that are available for public to
allow users to interconnect communication devices. Public telephone networks within countries and
regions are standard integrated systems of transmission and switching facilities, signalling processors, and
associated operations support systems that allow communication devices to communicate with each other
when they operate
SDH, synchronous digital hierarchy, is a digital transmission format that is used in optical (fibre) networks to
transport high-speed data signals. SDH uses standard data transfer rates and defined frame structures
formats in a synchronous (sequential) format
Mux (multiplexer) is a device that conveys two or more telephone or data conversations or connections on
a single channel or link. Multiplexing may be in the form of frequency division (e.g. multiple radio channels
on a coax line), time division (e.g. slots on a T1 or E1 line), code division (coded channels that share the
same frequency band) or combinations of these
SIP platform, session initiation protocol, is a set of text commands and processes that work with
applications (application layer) to setup, manage, and terminate communication sessions
SIP (trunking) Session Initiation Protocol is a set of text commands and processes that work with
applications (application layer) to setup, manage, and terminate communication sessions. Session Initiation
Protocol (SIP) trunking is the use of voice over IP (VoIP) to facilitate the connection of a private branch
exchange (PBX) to the Internet
SS7, the signalling system #7 (SS7), is an international standard network signalling protocol that allows
common channel (independent) signalling for call-establishment, billing, routing, and information-exchange
between nodes in the public switched telephone network (PSTN). SS7 system protocols are optimized for
telephone system control connections and they are only directly accessible to telephone network operators
SKI means the Danish State’s and the Municipalities’ Purchasing Service
Tbps, Terabit Per Second, is one trillion bits per second or one billion bytes per second. Tbps is a
measurement that prior to the 21st century was unthinkable. As 40 and 100 Gbps Ethernet become the
norm for high-speed backbones, terabit-per-second ratings will become common in the future
A trunk is a line or link designed to handle many aggregated signals simultaneously, and that connects
major switching centres or nodes in a communications system. The transmitted data can be voice (as in the
conventional telephone system) data, computer programs, images, video or control signals
VPN, virtual private networks, are communication systems that create and manage logical communication
channels through other networks such as the public telephone network or Internet as part of their
communication system
VoIP, Voice Over Internet Protocol (VoIP), is a process of sending voice telephone signals over the Internet
or other data network. If the telephone signal is in analogue form (voice or fax) the signal is first converted
to a digital form. Packet routing information is then added to the digital voice signal so it can be routed
through the Internet or data network
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Company Description
Wavelengths is the distance between two successive points of an optical waveform, usually measured in
nanometres (nm). Typical single mode fibre light works at 1310nm and 1550nm, which is suitable for long
distance high speed data transmission. Typical multimode fibre light works at 850nm or 1310nm,
multimode fibre is generally used in short distance signal transmission
xWDM, wavelength-division multiplexing (WDM), is a technology which multiplexes a number of optical
carrier signals onto a single optical fibre by using different wavelengths (i.e. colours) of laser light. This
technique enables bidirectional communications over one strand of fibre, as well as multiplication of
capacity. x can be either C (Coarse) or D (Dense) being an indication of the number of the channels carried
on one single fiber.
4G/LTE, Fourth Generation/Long Term Evolution, wireless networks with bandwidth reaching 100 Mbps
that allow for voice and data applications that will run 50 times faster its predecessor 3G/UMTS (Universal
Mobile Telecommunications System). This capacity will enable three dimensional (3D) renderings and other
virtual experiences on the mobile device
Kilobit per second (kbit/s)
1,000 bit/s
Megabit per second (Mbit/s) 1,000 kbit/s
Gigabit per second (Gbit/s) 1,000 Mbit/s
Terabit per second (Tbit/s)
1,000 Gbit/s
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