Term Sheet ISIN: NO Nelja Energia AS Senior Unsecured Green Bond Issue 2015/2021 (the Bonds or the Bond Issue )

Transcription

1 Term Sheet ISIN: NO Nelja Energia AS Senior Unsecured Green Bond Issue 2015/2021 (the Bonds or the Bond Issue ) Settlement date: 2 June 2015 Issuer: Green Bond: Group: Restricted Subsidiaries: Currency: Issue Amount: Coupon Rate: Nelja Energia AS, a company incorporated under the laws of Estonia with company registration number The Issuer is issuing the Bond Issue as a green bond and has received a second party opinion from DNV GL. It is DNV GL s opinion that the Issuer s green bond is in line with the stated definition of green bonds within the green bond principles, which is to enable capital-raising and investment for new and existing projects with environmental benefits. The Issuer and all its Subsidiaries from time to time (each a Group Company ). The following Group Companies: VV Tuulepargid OÜ, a company incorporated under the laws of Estonia with company registration number ; Technological Solutions SIA, a company incorporated under the laws of Latvia with company registration number ; and Pellet 4Energia SIA, a company incorporated under the laws of Latvia with company registration number , each a Restricted Subsidiary. EUR EUR 50 million Floating Rate bps p.a., semi-annual interest payments. Settlement Date: 2 June Notice to be given to subscribers a minimum of two (2) Banking Days prior to the Settlement Date (on which date the net proceeds of the Bond Issue shall be credited to the Funding Escrow Account). Maturity Date: Amortization: 2 June 2021 (6 years after Settlement Date). On each Interest Payment Date from and including the Interest Payment Date falling four (4) years after the Settlement Date, Bonds shall be redeemed in equal instalments each of EUR 2,000,000, with the remaining principal amount being repaid on the Maturity Date. Redemption of Bonds shall be made at 100% of par value (plus accrued and unpaid interest on Bonds being redeemed). Redemption shall be carried out pro rata in accordance with the procedures of the Securities 1/ 12

2 Depository. First Interest Payment Day: Last Interest Payment Day: Interest Payments: Issue Price: Nominal value: Floating Rate Status of the Bonds: Purpose of the Bond Issue: Call Options (American): 2 December 2015 (6 months after Settlement Date). The Maturity Date. Interest on the Bonds will commence to accrue on the Settlement Date and shall be payable semi-annually in arrears on the interest payment day in December and June each year and on the Maturity Date (each an Interest Payment Date ). Business day convention is modified following, day count fraction is act/360 and business day is Oslo, Tallinn and a TARGET Day. The Bonds will be issued at % of par value. The Bonds will have a nominal value of EUR 1 each, with a minimum subscription and allotment amount which shall be no less than EUR 100,000 and thereafter in integral multiples of EUR 100, months EURIBOR, however always provided that if the 6 months EURIBOR is below 0% per annum at the time when that rate shall be determined for a consecutive interest period, then the Floating Rate for that interest period shall be 0% per annum (the EURIBOR Floor ). The Bonds shall be senior debt of the Issuer and rank at least pari passu with all other unsecured senior obligations of the Issuer other than obligations which are mandatorily preferred by law. The Bonds shall rank ahead of subordinated capital. The net proceeds from the Bonds (net of legal costs, fees of the Manager and the Bond Trustee and any other agreed costs and expenses) shall exclusively be employed as follows: (iv) Approximately EUR 13,400,000 to repay in full outstanding shareholder loan from Vardar to VV Tuulepargid OÜ, owner of the Viru Nigula and Vanaküla wind parks (the Vardar Loan ); EUR 25,000,000 to finance the Group's combined CHP and pellet production investment project in Latvia to be owned by Technological Solutions SIA and Pellet 4Energia SIA (the Broceni CHP/Pellet Project ); Repayment of the Interim Loans; and The remaining amount for general corporate purposes, including investments in new projects. The Issuer may redeem the Bonds (all or nothing) at any time from and including: the Settlement Date to, but not including, the Interest Payment Date in June 2018 at a price equivalent to the sum of: a) the present value on the relevant record date of 104% of par value as if such payment should have taken place on the Interest Payment Date in June 2018; and b) the present value on the relevant record date of the remaining coupon payments (less any accrued but unpaid interest) through and including the Interest Payment Date in June 2018, both calculated by using a discount rate of 50 basis points over the comparable German Treasury Rate (i.e. comparable to the remaining duration of the Bonds 2/ 12

3 until the Interest Payment Date in June 2018), plus accrued interest on redeemed amount, and where relevant record date shall mean a date agreed upon between the Bond Trustee, the Paying Agent, VPS and the Issuer in connection with such repayment; (iv) the Interest Payment Date in June 2018 to, but not including, the Interest Payment Date in June 2019 at a price equal to 104% of par value (plus accrued interest on the redeemed amount); the Interest Payment Date in June 2019 to, but not including, the Interest Payment Day in June 2020 at a price equal to 103% of par value (plus accrued interest on the redeemed amount); the Interest Payment Date in June 2020 to, but not included, the Maturity Date at a price equal to 102% of par value (plus accrued interest on the redeemed amount). Funding Escrow Account: The Issuer shall prior to the Settlement Date establish an escrow account (in a Nordic bank or a bank acceptable to the Bond Trustee in the Issuer s jurisdiction of incorporation) and an amount of no less than EUR 25,000,000 of the net proceeds from the Bond Issue to be used in accordance with item under the purpose of the Bond Issue shall on the Settlement Date be transferred to the Funding Escrow Account in connection with the issuance of the Bonds. The Funding Escrow Account shall be pledged in favor of the Bond Trustee (on behalf of the bondholders) and blocked (and the bank shall waive any right of set-off). The main purpose of the Funding Escrow Account is to allow timely release of funds to the Issuer for application according to item under the purpose of the Bond Issue. Subject to the satisfaction of the Pre-Disbursement Conditions Precedent, the Issuer may make withdrawals from the Funding Escrow Accounts. Withdrawals shall be made by issuing a drawdown notice to the Funding Escrow Account bank and the Bond Trustee. Each drawdown notice will specify the amount to be released from the Funding Escrow Account and the purpose for employment of released amounts. Conditions precedent: Pre-Settlement: Disbursement of EUR 25,000,000 to the Funding Escrow Account and the remaining net proceeds of the Bond Issue (net of legal costs, fees of the Manager and the Bond Trustee and any other agreed costs and expenses) to the Issuer will be subject to certain conditions precedent as are customary for this type of transaction, received in form and substance satisfactory to the Bond Trustee, including but not limited to: (iv) (v) (vi) the Bond Agreement duly executed; the pledge agreement for the Funding Escrow Account duly executed and perfected; necessary corporate resolutions from the Issuer to approve the relevant Finance Documents and a power of attorney 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; copies of the Issuer's certificate of registration, evidencing that it is validly registered and existing and articles of association; the Issuer s latest financial reports; an agreement between the Bond Trustee and the Issuer related to expenses and fees duly executed; 3/ 12

4 (vii) relevant documentation evidencing that the Vardar Loans will be fully repaid and discharged immediately upon release of funds to the Issuer; (viii) a certificate from the Issuer confirming that no security, Financial Indebtedness or guarantees exist within the Group in violation of the terms of the Bond Issue; (ix) (x) written evidence that a process agent is nominated by the Issuer; and all statements and legal opinions reasonably requested by the Bond Trustee. The Bond Trustee may waive or postpone the delivery of certain conditions precedent at its sole discretion. Pre-Disbursement: The amount on the Funding Escrow Account shall only be used in accordance with item under purpose of the Bond Issue, and release (by one or several disbursements) of EUR 25,000,000 deposited on the Funding Escrow Account to the Issuer shall be subject to certain conditions precedent as customary for these types of transactions, received in form and substance satisfactory to the Bond Trustee, including but not limited to: (iv) (v) (vi) (vii) a duly executed release notice from the Issuer, which includes satisfactory documentation evidencing that the amount to be released will be applied in accordance with the Purpose of the Bond Issue; written confirmation from the Issuer that no Event of Default has occurred, is continuing or is anticipated; satisfactory evidence that CHP design and construction agreement; and/or Pellet Project foundation design and/or construction agreement; and/or Pellet project station supply agreement are duly executed (signed and entered into force) and delivered by the relevant parties (the Broceni Agreements ); satisfactory evidence that Broceni CHP has a building permit giving the right to start construction works; satisfactory evidence that Pellet Project has a building permit giving the right to start construction works; a copy of the commercial invoice(s) issued by the contractor(s) and/or supplier(s) in accordance with the Broceni Agreements; intermediate or final acceptance certificate(s) signed by a duly authorised Broceni CHP/Pellet Project representative; and (viii) approval from the technical consultants on the works accepted with the acceptance certificate(s). The Bond Trustee may waive or postpone the delivery of certain conditions precedent at its sole discretion. Condition subsequent: Finance Documents: The Issuer shall as soon as possible after the end of construction under the Broceni CHP/Pellet Project, deliver satisfactory evidence that the Broceni CHP/Pellet Project have received all necessary permits to put the Broceni CHP/Pellet Project into operation. Means: the Bond Agreement; the Bond Trustee s fee agreement; the Funding Escrow Account pledge; and 4/ 12

5 (iv) any other document the Issuer and the Bond Trustee agree in writing to be a Finance Document. Financial Covenants: Definitions: During the term of the Bonds, the Issuer shall (unless the Bond Trustee or the bondholders meeting (as the case may be) in writing has agreed to otherwise) comply with the following financial covenants: Minimum Liquidity: The Issuer and the Restricted Subsidiaries shall in aggregate at all times maintain a combined Free Cash of minimum EUR 2,500,000. Minimum Interest Coverage Ratio: The Issuer undertakes to maintain a Minimum Interest Coverage Ratio of 1.75 x. Minimum Book Equity: The Group shall, on an consolidated basis, at all times maintain a Book Equity of no less than 30%. Book Equity means the consolidated book equity of the Group (including the Shareholder Loans) divided by the consolidated total assets of the Group at the end of any Relevant Period, both in accordance with IFRS. Distribution means any payment of dividend on shares, repurchase of own shares, redemption of share capital or other restricted equity with repayment to shareholders, or (iv) any other similar distribution or transfers of value to the direct and/or indirect shareholders of any Group Company or the affiliates of such direct and/or indirect shareholders without mutual consideration (including group contributions). EBITDA means, for any Relevant Period, earnings before interest, tax, depreciation and amortization as reported in accordance with IFRS. Existing Intercompany Loans means the outstanding intercompany loans granted to the Issuer by the following Subsidiaries: Roheline Ring Tuulepargid OÜ with a total outstanding principal amount (and unpaid interest) of in aggregate approximately EUR 8,800,000; OÜ Pakri Tuulepargid with a total outstanding principal amount (and unpaid interest) of in aggregate approximately EUR 2,000,000; and Tooma Tuulepark OÜ with a total outstanding principal amount (and unpaid interest) of in aggregate approximately EUR 440,000. Financial Indebtedness means any indebtedness in respect of: (iv) (v) (vi) monies borrowed or raised; receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); any amount raised pursuant to any note purchase facility or the issue of any bond or note or similar instrument; any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; 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); any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability 5/ 12

6 (vii) of an entity which is not a Group Company which liability would fall within one of the other paragraphs of this definition; and (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (vi) above. Free Cash means on any date the amount of unrestricted, unpledged and freely available cash. IFRS means International Financial Reporting Standards, and guidelines and interpretations issued thereto by the International Accounting Standards Board (or any predecessor and successor thereof), in force from time to time. Intercompany Loans means any loans from any Group Company to the Issuer which are fully subordinated to the Bond Issue. Interest Coverage Ratio means, for any Relevant Period, EBITDA on a consolidated basis for the Restricted Group, plus any dividend received by the Issuer from its Subsidiaries (not being Restricted Subsidiaries) including interest received by the Issuer on intercompany loans to Group Companies, divided by the Net Interest Expense of the Issuer. Interim Loans means the outstanding shareholder loans granted by the Issuer s shareholders on 27 March 2015 to the Issuer with a total outstanding principal amount of in aggregate approximately EUR 5,000,000 (plus accrued interest). Net Interest Expense means, for any Relevant Period, the aggregate gross interest costs (excluding interest costs accrued under any Shareholder Loans) less the aggregate gross interest income, in accordance with IFRS. For the avoidance of doubt gains or losses on currency transactions and unrealized gains or losses from interest rate swaps and transaction fees on the Bond Issue is not considered as income or cost. Project Completion Guarantee means any guarantee issued in connection with construction of any renewable energy projects, provided that such guarantee expires (at a specific date as is customary) at the later of the end of the project phase, and the first payment is made from customers from the relevant project or the commissioning has taken place and the taking over certificate is signed. Restricted Group means the Issuer and the Restricted Subsidiaries. Relevant Period means, at the date of calculation, the 12 months immediately preceding such date. Shareholder Loan means any loans from any shareholder to the Issuer which are fully subordinated to the Bond Issue, have payment-in-kind interest, no acceleration rights and where no repayment is permitted until after the Maturity Date (and after full repayment of the Bond Issue, including interests), other than with an amount which may otherwise be subject to Distribution to its shareholders. Subsidiary means a company over which another company has, directly or indirectly, Decisive Influence. TARGET Day means any day on which the Trans-European Automated Realtime Gross Settlement Express Transfer payment system is open for the settlement of payments in euro. Vardar means Vardar AS, a company incorporated under the laws of Norway 6/ 12

7 with company registration number Vardar Loan means the outstanding shareholder loan granted by Vardar to VV Tuulepargid OÜ with a total outstanding principal amount (and unpaid interest) of in aggregate approximately EUR 13,400,000. Information Covenants: The Bond Agreement shall include relevant information undertakings (as customary in the Norwegian high-yield bond market). The Issuer shall, without being requested to do so, prepare: audited unconsolidated and consolidated annual 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; and unaudited consolidated quarterly financial statements 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 relevant quarter, first time for the quarter ending on 30 June 2015, such reports shall also detail the financial performance of the Restricted Subsidiaries. General Covenants: During the term of the Bonds, the Issuer shall unless the Bond Trustee or the bondholders meeting (as the case may be) in writing has agreed to otherwise comply with the following general covenants: a) Mergers: The Issuer shall not, and shall ensure that no 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 any other Group Company with any other companies or entities if such transaction would have a Material Adverse Effect. b) De-mergers: The Issuer shall not, and shall ensure that no Group Company shall, carry out any de-merger or other corporate reorganization involving a split of the Issuer or any other Group Company into two or more separate companies or entities, if such transaction would have a Material Adverse Effect. c) Continuation of business: The Issuer shall not cease to carry on its business. The Issuer shall procure that no substantial change is made to the general nature 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. d) Disposal of business: The Issuer shall not, and shall procure that no other Group Company shall, sell or otherwise dispose of all or a substantial part of the Group s assets or operations, unless: the transaction is carried out at fair market value, on terms and conditions customary for such transactions; and such transaction would not have a Material Adverse Effect. e) Arm s length transactions: The Issuer shall not, and the Issuer shall ensure that no other Group Company shall, enter into any transaction with any person except on arm s length terms and for fair market value. f) Financial assistance: The Issuer shall not, and shall procure that no Restricted Subsidiary shall, grant any loans, guarantees or other financial assistance (including, but not limited to granting security) to or for the benefit of any third party, other than: 7/ 12

8 in the ordinary course of business (including in relation to the Broceni CHP Project/Pellet Project), intercompany loans provided to any other Group Company, Project Completion Guarantees; (iv) the guarantees granted in favour of the lenders under the current loan facilities of Tooma Tuulepark OÜ, not including any refinancing thereof, upwards limited to EUR 12 million; (v) share pledges on the Issuer s shares in its Subsidiaries (excluding the Restricted Subsidiaries) securing the respective Subsidiary s financing arrangements; or (vi) otherwise limited to EUR 3 million in aggregate at any time. g) Negative pledge: The Issuer shall not, and shall procure that no Restricted Subsidiary shall, incur, create or permit to subsist any security over any of its assets or revenues or rights or enter into arrangements having a similar effect, other than the following: any security arising in connection with finance or capital leases of premises, vehicles and other assets incurred by the Issuer or the Restricted Subsidiaries in the ordinary course of business up to an outstanding aggregate amount of EUR 3 million; any netting or set-off arrangement entered into in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances of members of the Group (if applicable); security over any assets acquired by the Issuer or a Restricted Subsidiary after the completion of the Bond Issue, provided the security is discharged within 30 days of the date of such acquisition; (iv) any retention of title or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to the Issuer or a Restricted Subsidiary in the ordinary course of trading; (v) share pledges on the Issuer s shares in its Subsidiaries (excluding the Restricted Subsidiaries) securing the respective Subsidiary s financing arrangements; (vi) any security arising on rental deposits in connection with the occupation of leasehold premises in the ordinary course of business; (vii) any security arising by operation of law; (viii) not otherwise permitted under -(viii) above which in aggregate does not exceed EUR 5 million (or its equivalent in other currencies) at any time. h) Financial Indebtedness restrictions: The Issuer shall not, and shall ensure that no Restricted Subsidiaries shall incur, create or permit to subsist any Financial Indebtedness other than: the Bond Issue; in the period up until release of the net proceeds of the Bond Issue to the Issuer (other than as deposited on the Funding Escrow Account), any amount outstanding under the Vardar Loan and under the Interim Loans; the Existing Intercompany Loans (but no refinancing thereof); (iv) Intercompany Loans; (v) intercompany loans from the Issuer to any Restricted Subsidiary; 8/ 12

9 (vi) any guarantees issued (to governments and other third parties) in the ordinary course of business and otherwise as permitted under f) (Financial Assistance); (vii) any financial indebtedness under any hedging arrangements entered into on market terms and as part of the ordinary course of business of the Issuer and for non-speculative purposes; (viii) any financial indebtedness under any operational leases of real property, vehicles and other assets incurred by the Issuer or the Restricted Subsidiaries in the ordinary course of business up to an aggregate outstanding amount of EUR 5 million; and (ix) any Shareholder Loans. i) Corporate status: The Issuer shall not change its type of organization or jurisdiction of incorporation. j) 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 aspects and comply in all respects with all laws and regulations it or they may be subject to from time to time. Breach of these obligations shall be regarded as non-compliance only if such breach would have a Material Adverse Effect. k) Distributions: Distributions from the Issuer in any financial year shall be limited to 50% of the Group s consolidated net profit (any unutilised part of the Group s net profit from and including the fiscal year 2015 may be carried forward). Any payment of Distribution shall be subject to: no Event of Default is outstanding or would occur from such Distribution; and compliance with the Financial Covenants and continued compliance immediately after such Distribution. l) Restricted Subsidiaries: The Issuer shall procure that the Restricted Subsidiaries remain single purpose companies which sole purpose is to own the Viru Nigula and Vanaküla wind parks and the Broceni CHP/Pellet Project. The Issuer shall procure that all Free Cash of the Restricted Subsidiaries shall (to the extent permitted by applicable law) be transferred to the Issuer without undue delay to the extent reasonably practicable. The Issuer shall not permit any Restricted Subsidiary to create or permit to exist any contractual obligations (or encumbrances) restricting the right of any Restricted Subsidiary to pay dividends or make other distributions to its shareholders, pay any Financial Indebtedness to the Issuer, make any loans to the Issuer or transfer any of its assets and properties to the Issuer. Notwithstanding any other provisions herein, the Issuer shall remain the 100% direct owner of VV Tuulepargid OÜ and Technological Solutions SIA and at least the 80% direct owner of Pellet 4Energia SIA and remain in full control over the entity in all matters. m) Pari Passu Ranking: The Issuer shall ensure that its obligations under the Bond Agreement and any other Finance Document shall at all times rank at least pari passu as set out herein. n) Insurance: The Issuer shall, and the Issuer shall procure that each Group Company will, maintain with financially sound and reputable insurance companies, funds or underwriters adequate insurance or captive arrangements with respect to its properties and business against such liabilities, casualties and contingencies and of such types and in such amounts as are consistent with prudent business practice. Representations and The Bond Agreement shall include relevant representations and warranties by the 9/ 12

10 Warranties: Change of Control Clause: Change of Control Event: Decisive Influence: Issuer as customary in the current Norwegian bond market. Upon a Change of Control Event occurring, each Bondholder has a right of prepayment ( Put Option ) of the Bonds at a price of 101% of par value (plus accrued interest) during a period of 15 days following the notice of a Change of Control Event but subject to the actual occurrence and completion of the Change of Control Event. The payment date of such Put Option is 15 days after the expiry of the 15 days exercise period for the Put Option. A Change of Control Event occurs if Vardar, directly or indirectly, no longer has Decisive Influence over the Issuer. Means a person having, as a result of an agreement or through the ownership of shares or interests in another person: a majority of the voting rights in that other person; or 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. Issuer s ownership of Bonds: Material Adverse Effect: Event of Default: Bond Agreement: The Issuer has the right to acquire and own the Bonds. Such Bonds may at the Issuer s discretion be retained by the Issuer, sold or discharged. An event or circumstances which has a material adverse effect on: (a) the business, financial conditions or operations of the Issuer and/or the Group as a whole, (b) the Issuer s ability to perform and comply with its obligations under the Finance Documents, or (c) the validity or enforceability of any of the Finance Documents. The Bond Agreement will include standard event of default provisions, including cross default provisions for the Issuer and/or any Restricted Subsidiary on any financial indebtedness (alone or in aggregate) in excess of EUR 5 million (or the equivalent thereof in other currencies). A bond agreement (the Bond Agreement ) will be entered into by the Issuer and the Bond Trustee acting as the bondholders representative, and shall be based on Norwegian standard. The Bond Agreement shall regulate the bondholders rights and obligations with respect to the Bonds. If any discrepancy should occur between this Term Sheet and the Bond Agreement, then the Bond Agreement shall prevail. The Bond Agreement shall include provisions where after repayment of principal amount upon default shall be equal to the Call Options prices provided for above. The subscriber is deemed to have granted authority to the Bond Trustee to finalize the Bond Agreement and the other Finance Documents. Although minor adjustments to the structure described in this Term Sheet may occur, the provisions in the Bond Agreement will be substantially consistent with those set forth in this Term Sheet. Governing Law: Taxation: Norwegian law. The Issuer shall pay any stamp duty and other public fees accruing in connection with issuance of the Bonds, but not in respect of trading of the Bonds in the secondary market (except to the extent required by applicable laws), and the Issuer 10/ 12

11 shall deduct before payment to the bondholders at source any applicable withholding tax payable pursuant to law. Approvals: The Bonds will be issued in accordance with the Issuer s board approval dated 13 May Bond Trustee: Manager: Registration: Paying Agent: Stock Exchange listing: Market Making: Terms of Subscription: Nordic Trustee ASA, Postboks 1470 Vika, 0116 Oslo Swedbank Norway, branch of Swedbank AB (publ.), Filipstad brygge 1, NO-0115 Oslo, Norway The Norwegian Central Securities Depository (VPS). Principal and interest accrued will be credited the bondholders through VPS. Swedbank Norway An application will be made for the Bonds to be listed on Oslo Børs within 12 months after the Settlement Date. No market-maker agreement has been made for this Bond Issue. The application for and subscription of the Bonds will occur on the terms of the application terms provided by the Manager (the Application Form ), which specifically authorizes the Bond Trustee to execute and deliver the Bond Agreement and other Finance Documents on behalf of the prospective bondholders, who will execute and deliver such Application Forms by a signed document, taped telephone conversation, , Bloomberg or otherwise as accepted by the Manager prior to receiving Bond allotments. On this basis, the Issuer and the Bond Trustee will execute and deliver the Bond Agreement and other Finance Documents and the latter s execution and delivery is on behalf of all of the subscribers, such that they thereby will become bound by the Bond Agreement. The Bond Agreement specifies 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, without any further action required to be taken or formalities to be complied with. The Bond Agreement shall specify that it shall be made available to the general public for inspection purposes and may, until redemption in full of the Bonds, be obtained on request by the Bond Trustee or the Issuer. By applying and subscribing for Bonds, the applicant will be deemed to have accepted all terms set out in the Application Form, including the representations and acknowledgments set out therein. Please note in this respect that the Bond Issue is based only upon the Investor Documentation as defined therein, and in particular that no prospectus, offering memorandum or similar document have or will be prepared. Subscription Restrictions: The Bonds will only be offered or sold within the United States to Qualified Institutional Buyers ( QIBs ) as defined in Rule 144A under the U.S. Securities Act. The Bonds have not and will not be registered under the U.S. Securities Act, or any state securities law except pursuant to an exemption from the registration requirements of the U.S. Securities Act and appropriate exemptions under the laws of any other jurisdiction. The Bonds may not be offered or sold within the United States to, or for the account or benefit of, any U.S. Person (as such terms are defined in regulations), except pursuant to an exemption from the registration requirements of the U.S. Securities Act. See further details in the Application 11/ 12

12 Form. Failure to comply with these restrictions may constitute a violation of applicable securities legislation. Transfer Restrictions: The Bonds are freely transferable and may be pledged, subject to the following: 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 local laws and regulations applicable at own cost and expense. notwithstanding the above, a bondholder which has purchased the Bonds in contradiction to mandatory restrictions applicable may nevertheless utilize its voting rights under the Bond Agreement. *** Oslo, 22 May 2015 Nelja Energia AS As Issuer Swedbank Norway As Manager 12/ 12