Prospectus Securities Note for 11% Renewable Energy Corporation ASA Open Putable Bond Issue 2009/2014 Joint Lead Arrangers:

Transcription

1 Prospectus Securities Note for 11% Renewable Energy Corporation ASA Open Putable Bond Issue 2009/2014 Joint Lead Arrangers: Oslo, 9. October 2009

2 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note Important information* The Securities Note has been prepared in connection with listing of the securities at Oslo Børs. Oslo Børs ASA has controlled and approved the Securities Note pursuant to Section 7-7 of the Norwegian Securities Trading Act. New information that is significant for the Borrower or its subsidiaries may be disclosed after the Securities Note has been made public, but prior to the expiry of the subscription period. Such information will be published as a supplement to the Securities Note pursuant to Section 7-15 of the Norwegian Securities Trading Act. On no account must the publication or the disclosure of the Securities Note give the impression that the information herein is complete or correct on a given date after the date on the Securities Note, or that the business activities of the Borrower or its subsidiaries may not have been changed. Only the Borrower and the Arrangers are entitled to procure information about conditions described in the Securities Note. Information procured by any other person is of no relevance in relation to the Securities Note and cannot be relied on. Unless otherwise stated, the Securities Note is subject to Norwegian law. In the event of any dispute regarding the Securities Note, Norwegian law will apply. In certain jurisdictions, the distribution of the Securities Note may be limited by law, for example in the United States of America or in the United Kingdom. Verification and approval of the Securities Note by Oslo Børs implies that the Note may be used in any EEA country. No other measures have been taken to obtain authorisation to distribute the Securities Note in any jurisdiction where such action is required. Persons that receive the Securities Note are ordered by the Borrower and the Arrangers to obtain information on and comply with such restrictions. This Securities Note is not an offer to sell or a request to buy bonds. The content of the Securities Note does not constitute legal, financial or tax advice and bond owners should seek legal, financial and/or tax advice. Contact the Borrower or the Arrangers to receive copies of the Securities Note. *The capitalised words in the section "Important Information" are defined in Chapter 3: "Securities Information". Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 2 of 22

3 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note Index: 1) Risk Factors...4 2) Persons Responsible ) Detailed information about the securities ) Additional Information ) Appendix: Bond Agreement and On Demand Guarantee Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 3 of 22

4 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note 1) Risk Factors The Issuer believes that the factors described below represent the principal market risks inherent in investing in the Loan, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with any Bonds may occur for other reasons and the Issuer does not represent that the statements below regarding the risks of holding any Bonds are exhaustive. Prospective investors should also read the detailed information set out in the Registration Document dated, [5]. October 2009 and reach their own views prior to making any investment decision. Risk related to the market in general All investments in interest bearing securities have risk associated with such investment. The risk is related to the general volatility in the market for such securities, varying liquidity in a single bond issue as well as company specific risk factors. There are four main risk factors that sums up the investors total risk exposure when investing in interest bearing securities: liquidity risk, interest rate risk, settlement risk and market risk (both in general and issuer specific). The price of a single bond issue will fluctuate in accordance with the interest rate and credit markets in general, the market view of the credit risk of that particular bond issue, and the liquidity of this bond issue in the market. In spite of an underlying positive development in the Issuers business activities, the price of a bond may fall independent of this fact. Bond issues with a relatively short tenor and a floating rate coupon rate do however in general carry a lower price risk compared to loans with a longer tenor and/or with a fixed coupon rate. No market-maker agreement is entered into in relation to this bond issue, and the liquidity of bonds will at all times depend on the market participants view of the credit quality of the Issuer as well as established and available credit lines. Factors which are material for the purpose of assessing the market risks associated with Bond The Bonds may not be a suitable investment for all investors. Each potential investor in the Bonds must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should: (i) (ii) (iii) (iv) (v) 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 Securities Note and/or Registration Document or any applicable supplement; 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 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 the 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. Risks related to Bonds in general Set out below is a brief description of certain risks relating to the Bonds generally: Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 4 of 22

5 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note Modification and Waiver The conditions of the Bonds contain 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. The conditions of the Bonds also provide that the Trustee may, without the consent of bondholders, agree to (i) any modification of, or to the waiver or authorisation of any breach or proposed breach of, any of the provisions of Bonds or (ii) determine without the consent of the bondholders that any event of default or potential event of default shall not be treated as such. Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 5 of 22

6 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note 2) Persons Responsible 2.1 Persons responsible for the information Persons responsible for the information given in the Securities Note are: Renewable Energy Corporation ASA, Kjørboveien 29, 1302 Sandvika; REC SOLAR AS, Kjørboveien 29, 1302 Sandvika; REC SILICON AS, Kjørboveien 29, 1302 Sandvika; REC WAFER NORWAY AS, Ørnesveien 3, 8160 Glomfjord; DnB NOR Bank ASA, Stranden 21 Aker Brygge, 0021 Oslo; Nordea Bank Norge ASA, Middelthunsgate 17, 0107 Oslo; and Skandinaviska Enskilda Banken AS (publ) Oslo Branch, Filipstad Brygge 1, 0123 Oslo. 2.2 Declaration by persons responsible Responsiblilty statement: This prospectus has been prepared by Renewable Energy Corporation ASA ( REC ) with a view to providing a description of relevant aspects of REC and the Guarantors in connection with the Bond Issue and an investment therein. We confirm, taken all reasonable care to ensure that such is the case, that the information contained in the prospectus is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. Sandvika, 9. October 2009 Renewable Energy Corporation ASA Statement from the Joint Lead Arrangers: DnB NOR Bank ASA v/dnb NOR Markets ( DnB NOR ), Nordea Bank Norge ASA v/nordea Markets ( Nordea ) and Skandinaviska Enskilda Banken AS (publ) Oslo Branch v/seb Merchant banking ( SEB ) assisted the Borrower in preparing the prospectus. Neither DnB NOR, Nordea nor SEB have separately verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and the Joint Lead Arrangers expressively disclaim any legal or financial liability as to the accuracy or completeness of the information contained in this prospectus or any other information supplied in connection with bonds issued by REC or their distribution. The statements made in this paragraph are without prejudice to the responsibility of the Borrower. Each person receiving this prospectus acknowledges that such person has not relied on the Joint Lead Arrangers nor on any person affiliated with it in connection with its investigation of the accuracy of such information or its investment decision. Oslo, 9. October 2009 DnB NOR Bank ASA, DnB NOR Markets; Nordea Bank Norge ASA, Nordea Markets; and Skandinaviska Enskilda Banken AS (publ) Oslo Branch, SEB Merchant banking. Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 6 of 22

7 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note 3) Detailed information about the securities Clarification and definitions When used in the Bond Agreement and the prospectus, the following words and terms shall have the following meaning and definition: Account Manager: Attachment: Bond Agreement: Bond Issue: Bondholder: Bondholders Meeting: Bonds: Business Day: Business Day Convention: Compliance Certificate: Cost: Coupon: Means a Bondholder s account manager in the Securities Register. Any Attachments to the Bond Agreement. means the Bond Agreement, including any Attachments to which it refers, and any subsequent amendments and additions agreed between the Parties. means the bond issue constituted by the Bonds. means a holder of a Bond or Bonds, as registered in the Securities Register, from time to time. Meeting of Bondholders as set forth in Section 16 of the Bond Agreement. Securities issued pursuant to the Bond Agreement, within the Maximum Amount, and which is registered in the Securities Register, each a Bond. means any day on which Norwegian commercial banks are open for general business, and when Norwegian banks can settle foreign currency transactions, being any day on which the Norwegian Central Bank s Settlement System is open. 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 Day, payments of interest will be made on the first following day that is a Business Day (No Adjustments of Business Day). means a compliance certificate substantially in the form of Attachment 1 in the Bond Agreement. means all costs, expenses, disbursements, payments, charges, losses, demands, claims, liabilities, penalties, fines, damages, judgments, orders, sanctions, fees (including travel expenses, VAT, court fees and legal fees) and any other outgoings of whatever nature. Rate of interest applied to the Bonds; If the Coupon is stated in percentage points, the Bonds shall bear interest at this rate per annum (based on the Day Count Fraction set forth in Section 9) in the Bond Agreement, from and including the Interest Accrual Date to the Maturity Date. If the Coupon is stated as Reference Rate + Margin the Bonds shall bear interest at a rate per annum equal to the Reference Rate + Margin (based on the Day Count Fraction set forth in Section 1 in the Bond Agreement), from and including the Interest Accrual Date to the first Coupon Date, and thereafter from and including each Coupon Date to the next Coupon Date until Maturity Date. Coupon Accrual Date: The date on which interest on the Bond starts to accrue. If NA is specified, Coupon Accrual Date does not apply. Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 7 of 22

8 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note Coupon Date: Currency: Day Count Fraction: Date(s) on which the payment of Coupon falls due. The Coupon Date shall be adjusted pursuant to the Business Day Convention. The currency in which the Bonds are denominated. The convention for calculation of payment of Coupon. (i) If 30/360 is specified, the number of days in the relevant coupon period shall be calculated from and including the Coupon Accrual Date/Coupon Date to the next Coupon Date on basis of a year of 360 days with 12 months of 30 days, unless (a) the last day in the relevant coupon period is the 31st calendar day but the first day of the relevant coupon period is a day other than the 30th or the 31st day of a month, in which case the month that includes that last day shall not be shorted to a 30 day months, or (b) the last day of the relevant coupon period is the last calendar day in February, in which case February shall not be considered to be lengthened to a 30-day month. The number of days shall be divided by 360. (ii) If Actual/360 is specified, the actual number of days in the relevant coupon period shall be from and including the Coupon Accrual Date/Coupon Date to the next Coupon Date. The number of days shall be divided by 360. Event of Default: Exchange: Existing Permitted Financial Indebtedness: Existing Permitted Security: Face Value: Finance Documents: Financial Indebtedness: means the occurrence of an event or circumstance specified in Clause 15.1 in the Bond Agreement. means securities exchange or other reputable marketplace for securities, on which the Bonds are listed, or where the Issuer has applied for listing of the Bonds. means the Financial Indebtedness listed in Part 1 of Attachment 2 to the Bond Agreement. means the security listed in Part 2 of Attachment 2 to the Bond Agreement. The face value of each Bond. means (i) the Bond Agreement, (ii) the Guarantees, (iii) the agreement between the Bond Trustee and the Issuer referred to in Clause 14.2 in the Bond Agreement and (iii) any other document (whether creating a Security Interest or not) which is executed at any time by an Obligor in relation to any amount payable under the Bond Agreement. Means: (a) moneys borrowed; (b) any amount raised by acceptance under any acceptance credit facility (including any dematerialised equivalent); (c) any amount raised pursuant to any note purchase facility of 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) the acquisition cost of any asset or service to the extent payable Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 8 of 22

9 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note before or after its acquisition or possession by the party liable where the advance or deferred payment: (i) is arranged primarily as a method of raising finance or of financing the acquisition of that asset or service or the construction of that asset or service; or (ii) involves a period of more than six months before or after the date of acquisition or supply; (g) any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, except for non-payment of an amount, the then mark-to-market value of the derivative transaction will be used to calculate its amount), excluding, for the avoidance of doubt, any embedded derivatives (as such terms is defined in IAS 39) (except to the extent that these fluctuations relate to a derivative transaction); (h) any counter-indemnity obligation in respect of any guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; (i) (without double counting) the amount of any liability in respect of any guarantee, indemnity or similar assurance against financial loss of any person in respect of any item referred to in the above paragraphs; or (j) any amount raised under any other transaction (including any forward sale or purchase agreement) which has the commercial effect of a borrowing. Financial Statements: GAAP: Initial Amount: ISIN: Issue: Issue Date: Issuer s Bonds: Listing: Material Adverse Effect: means the audited unconsolidated and consolidated annual accounts and 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 report from the Board of Directors. means the generally accepted accounting practice and principles in the country in which the Issuer is incorporated 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. The amount equal to the aggregate Face Value of the Bonds (minimum) issued under the first Issue. means International Securities Identification Numbering system the identification number of the Bonds. Any issue of Bonds pursuant to the Bond Agreement. The date of the first Issue. Bonds owned by the Issuer, any party who has decisive influence over the Issuer, or any party over whom the Issuer has decisive influence. Indicates listing of the Bonds. If YES is specified, the Issuer shall submit an application in order to have the Bonds listed on the Exchange(s). If NO is specified, no obligation for listing apply, but the Issuer may at its own discretion apply for listing. means 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 ability to perform and comply with its obligations under the Bond Agreement; or (c) the validity or enforceability of the Bond Agreement and the Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 9 of 22

10 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note Guarantees. Maturity Date: Borrowing Limit Tap Issue: Outstanding Bonds: Put Option: Quarter Date: Redemption Price: Total Assets: Voting Bonds: The date on which the Bonds fall due. The Maturity Date shall be adjusted pursuant to the Business Day Convention. Amount stating the maximum aggregate Face Value of Bonds which may be issued pursuant to the Bond Agreement. If NA is specified, the aggregate Face Value of the Bonds issued may not exceed the amount specified as the Initial Amount. means the aggregate value of the total number of Bonds not redeemed or otherwise discharged. Bondholders right to demand early redemption of Bonds ref. Clause If NA is specified, the provisions regarding Put do not apply. Each 31 March, 30 June, 30 September and 31 December. The price, stated as percent of Face Value, at which the Bonds shall be redeemed on the Maturity Date. At any time, the aggregate amount which would in accordance with the relevant accounting principles to be shown in the Borrower s financial statements as the total assets of the Group. All Bonds less Issuer s Bonds. Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 10 of 22

11 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note Parties: Issuer/Borrower: The person or entity that has issued the Bonds and is the borrower (debtor): Renewable Energy Corporation ASA, Kjørboveien 29, 1302 Sandvika Company. No ( REC ). Subsidiary: Material 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. means, at any time, a Subsidiary of the Issuer if: (a) the book value of the net assets of that Subsidiary then equals or exceeds 5% of the consolidated book value of the net assets of the Group; and/or (b) the revenues of that Subsidiary then equal or exceed 5% of the consolidated revenues of the Group. For this purpose: (i) subject to paragraph (ii) below: a. the contribution of a Subsidiary of the Issuer will be determined from its financial statements which were consolidated into the latest audited consolidated financial statements of the Issuer; and b. the financial condition of the Group will be determined from the latest audited consolidated financial statements of the Issuer; (ii) if a Subsidiary of the Issuer becomes a member of the Group after the date on which the latest audited consolidated financial statements of the Issuer were prepared: a. the contribution of the Subsidiary will be determined from its latest financial statements; and b. the financial condition of the Group will be determined from the latest audited consolidated financial statements of the Issuer but adjusted to take into account any subsequent acquisition or disposal of a business or a company (including that Subsidiary); (iii) the contribution of a Subsidiary will, if it has Subsidiaries, be determined from its consolidated financial statements; (iv) if a Material Subsidiary disposes of all or substantially all of its assets to another member of the Group, it will immediately cease to be a Material Subsidiary and the other member of the Group (if it is not the Issuer or already a Material Subsidiary) will immediately become a Material Subsidiary; (v) a Subsidiary of the Issuer (if it is not already a Material Subsidiary) will become a Material Subsidiary on completion of any other intra-group transfer or reorganisation if it would have been a Material Subsidiary had the intra-group transfer or reorganisation occurred on the date of the latest audited consolidated financial statements of the Issuer; and (vi) except as specifically mentioned in paragraph (iv) above, a member of the Group will remain a Material Subsidiary until the next audited consolidated Financial Statements of the Issuer show otherwise under paragraph (i) Prepared in cooperation between 11 of 22 DnB NOR Markets, Nordea Markets and SEB Merchant Banking

12 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note above. If there is a dispute as to whether or not a member of the Group is a Material Subsidiary, a certificate of the auditors of the Issuer will be, in the absence of manifest error, conclusive. Group: Group Company: Guarantors: Means the Borrower and its Subsidiaries from time to time. Means the Issuer and or any member of the Group. means REC Silicon AS (a company incorporated in Norway with Company No ), REC Wafer Norway AS (a company incorporated in Norway with Company No ) and REC Solar AS (a company incorporated in Norway with Company No ) and/or any Additional Guarantor. Name: REC SOLAR AS Address: Kjørboveien 29, 1337 Sandvika Contact person for the Oslo Stock Exchange: Jon André Løkke Phone: Cell phone: Fax: Contact person for the Oslo Stock Exchange: irpost@recgroup.com Name: REC SILICON AS Address: Kjørboveien 29, 1337 Sandvika Contact person for the Oslo Stock Exchange: Jon André Løkke Phone: Cell phone: Fax: Contact person for the Oslo Stock Exchange: irpost@recgroup.com Name: REC WAFER NORWAY AS Address: Kjørboveien 29, 1337 Sandvika Contact person for the Oslo Stock Exchange: Jon André Løkke Phone: Cell phone: Fax: Contact person for the Oslo Stock Exchange: irpost@recgroup.com Obligor: Additional Obligor: Bondholder: Means the Issuer or a Guarantor. In the event any other senior debt of the Issuer is to be guaranteed by any Subsidiary other than the Guarantors, the Issuer shall immediately procure that such Subsidiary shall become an Additional Guarantor and delivers a Guarantee to the Bond Trustee, such Guarantee to be supported with a corporate resolution and such other corporate evidence in respect of the Additional Guarantor as the Bond Trustee shall reasonably request. Holder of Bond(s) as registered in the Securities Register. Joint Lead Arrangers: DnB NOR Markets, Stranden 21 Aker Brygge, 0021 Oslo, Company No ( DnB NOR ); Nordea Bank Norge ASA, Middelthunsgate 17, 0107 Oslo, Company No ( Nordea ); and Skandinaviska Enskilda Banken AS (publ) Oslo Branch, Filipstad Brygge 1, 0123 Oslo, Company No ( SEB ). Paying Agent: The entity acting as registrar and paying agent on behalf of the Issuer in the Securities Register: DnB NOR Bank ASA, Verdipapirservice, Stranden 21 Aker Brygge, 0021 Oslo. Bond Trustee: The person or entity acting as bond trustee as described in clause 17 in the Bond Agreement: Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 12 of 22

13 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note Norsk Tillitsmann ASA, Postboks 1470 Vika, 0116 Oslo, Company No ( Trustee ) Calculation Agent: Trustee Exchange: Oslo Børs ASA, Postboks 460 Sentrum, 0105 Oslo, Company No Securities Register: The securities register in which the Bonds are registered: From Payment Date: The Norwegian Central Securities Depository, Verdipapirsentralen ASA (VPS), Biskop Gunnerus gate 14A, 0185 OSLO, Company No Reuters: Financial information electronically transmitted by the news agency Reuters Norge AS. Issuer s Price: 100 % Market-Making: There is no market-making agreement entered into in connection with the Loan. Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 13 of 22

14 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note Facility: 11% Renewable Energy Corporation ASA Open Putable Bond Issue 2009/2014 ISIN: NO Bond: 11% Renewable Energy Corporation ASA Open Putable Bond Issue 2009/2014 Type of Loan: Borrowing Limit Tap Issue: Fixed rate open bond NOK 1,500,000,000 (Onebillionfivehundredmillion) First Tranche / Loan Amount: Denomination á: Securities Form: Coupon: NOK 1,250,000,000 (onebilliontohundredandfiftymillion) NOK each and among themselves pari passu ranking. The Bonds are electronic registered in book-entry form with the Securities Depository. The Issuer shall pay interest on the face value of the Bonds from, and including, the Issue Date at a fixed rate of 11 per cent per annum (the Fixed Rate ). Issue Date: 16 September 2009 Maturity Date: 16 September 2014 Interest Payment Date: Interest payments shall be made in arrears on the Interest Payment Dates each year, the first Interest Payment Date being 16 September Coupon Accrual Date: 16 September 2009 Final cupong date: Issue Price: Day Count Fraction - Cupong: Purpose and utilization: Maturity Date 100% (par value) 30/360 - unadjusted The net proceeds of the Bonds shall be employed for the general financing of the Group. Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 14 of 22

15 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note General Terms: Security: Amortization: Redemption: The Bonds are secured by the Guarantees. The bonds will run without installments and be repaid in full on Maturity Date at par. Matured interest and matured principal will be credited each Bondholder directly from the Securities Registry. Claims for interest and principal shall be limited in time pursuant the Norwegian Act relating to the Limitation Period Claims of May no 18, p.t. 3 years for interest rates and 10 years for principal. Special (distinct) conditions General undertakings: Change of Business and Mergers: The Issuer shall not, and shall ensure that each of the Guarantors and Material Subsidiaries shall not cease to carry out its business, other than permitted Mergers and Disposal of business. The Issuer must ensure that no substantial change is made to the general nature of the business of the Issuer or the Group from that carried on at the date of the Bond Agreement without the prior written consent of the Trustee. No member of the Group may enter into any amalgamation, demerger, merger or reconstruction other than: (a) under an intra-group re-organisation on a solvent basis, provided that if such reorganisation involves a Guarantor, a Guarantor is the sole surviving entity of that re-organisation and if such reorganisation involves the Issuer, the Issuer is the sole surviving entity of that reorganisation; (b) any merger, consolidation or other reorganisation in which a member of the Group is the sole surviving entity and which will not have a Material Adverse Effect; or (c) any other transaction with the prior written consent of the Trustee such consent not to be unreasonably withheld or delayed. Negative Pledge: (a) Except as provided below, no member of the Group may create or allow to exist any Security Interest on any of its assets without the prior written consent of the Trustee. (b) No member of the Group may: (i) sell, transfer or otherwise dispose of any of its assets on terms where it is or may be leased to or reacquired or acquired by a member of the Group or any of its related entities; (ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms; (iii) enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or (iv) enter into any other preferential arrangement having a similar effect, in circumstances where the transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 15 of 22

16 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note an asset without the prior written consent of the Trustee. (c) Paragraphs (a) and (b) do not apply to: (i) any Existing Permitted Security except to the extent the principal amount secured by that Existing Permitted Security exceeds the amount stated in that Attachment; (ii) any Security Interest comprising a netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances; (iii) any lien arising by operation of law and in the ordinary course of trading; (iv) any Security Interest on an asset, or an asset of any person, acquired by a member of the Group after the date of the Bond Agreement but only for the period of 4 months from the date of acquisition and to the extent that (A) the principal amount secured by that Security Interest has not been incurred, increased or changed in nature in contemplation of, or since, the acquisition and (B) there is no transfer of the benefit of such Security Interest to any other person than a person receiving a corresponding transfer of the indebtedness secured by such Security Interest; (v) any Security Interest entered into pursuant to the Bond Agreement; (vi) any Security Interest securing specific, limited non-recourse project debts and/or joint venture projects up to a maximum amount of NOK 100,000,000 or its equivalent at any time; (vii) any Security Interest securing financial indebtedness granted by a governmental agency on subsidised terms and conditions; and (viii) any Security Interest securing indebtedness the amount of which (when aggregated with the amount of any other indebtedness which has the benefit of a Security Interest not allowed under the preceding sub-paragraphs) does not exceed NOK 100,000,000 or its equivalent at any time. Guarantee: means an on demand guarantee (in Norwegian: Selvskyldnergaranti ) from each of the Guarantors securing the Borrower s obligation according to the Bond Agreement in the maximum amount of NOK (Norwegiankroneronethousandfivehundredmillion) plus interest and expenses. For more details see the enclosed On Demand Guarantees enclosed in this prospectus. Disposals: (a) Except as provided below, no member of the Group may, either in a single transaction or in a series of transactions and whether related or not, dispose of all or any part of its assets. (b) Paragraph (a) does not apply to any disposal: (i) made in the ordinary course of trading of the disposing entity on arm's length commercial terms and for fair market value; (ii) of assets in exchange for other assets comparable or superior as to type, value and quality; (iii) by the Company and/or a Material Subsidiary, to another member Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 16 of 22

17 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note of the Group; (iv) made on arm's length commercial terms and for fair market value where the aggregate book value of the assets sold or disposed of does not, in any financial year, exceed an amount equal to 10% of the consolidated book value of the assets of the Group at the beginning of that financial year; or (v) in respect of which the Trustee has provided its prior written consent (not to be unreasonably withheld or delayed); and (vi) For more details se clause 13.3 (d) in the Bond Agreement. Financial Indebtedness Restrictions: (a) Except as provided below, no member of the Group other than the Issuer may incur or permit to be outstanding any Financial Indebtedness without the prior written consent of the Trustee. (b) Paragraph (a) does not apply to: (i) any Financial Indebtedness incurred under the Bond Agreement; (ii) any Existing Permitted Financial Indebtedness ; (iii) any Financial Indebtedness arising in respect of a payment to be made to a member of the Group by a third party pursuant to a supply contract, provided that such payment does not constitute a financial liability in accordance with GAAP; (iv) any Financial Indebtedness owed by a member of the Group to another member of the Group (including any netting and/or setoff arrangements incurred in the ordinary course of the Group's cash management arrangements for the purpose of netting debit and credit balances); (v) any Financial Indebtedness of any person acquired by a member of the Group which is incurred under arrangements in existence at the date of, and not increased in contemplation of, the acquisition, but only for a period of six months from the date of acquisition; (vi) any project debt on a limited, non-recourse basis including through or participation in joint venture projects, which in aggregate does not exceed NOK 100,000,000; (vii) any Financial Indebtedness granted by a governmental agency on subsidised terms and conditions, which in aggregate does not, at any time, exceed NOK 100,000,000; (viii) Financial Indebtedness comprising indebtedness incurred by the Singapore subsidiaries in the Singapore plant investment and export financing arrangements directly incurred in connection with the Singapore plant investment; (ix) any guarantee of the Financial Indebtedness referred to in subparagraph (viii) above; or (x) Financial Indebtedness not permitted under sub-paragraphs (i) to (vii) above which in aggregate does not exceed NOK 100,000,000 or its equivalent at any time. Termination events: Change of Control or de-listing of the Issuer: For the purposes of the below provisions: i) a Change of Control Event occurs if any person or group of persons Acting in Concert (other than a shareholder holding at least ten per cent (10%) of the issued share capital of the Issuer at the date of the Bond Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 17 of 22

18 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note Agreement) gains Control of more than 50% of the issued share capital of the Issuer; and Where: 1) Acting in Concert means acting together pursuant to an agreement or understanding (whether formal or informal); and 2) Control means the power to direct the management and policies of an entity, whether through the ownership of voting capital, by contract or otherwise. ii) A De-listing Event means an event that the Issuers shares are no longer listed on Oslo Stock Exchange (or any other reputable exchange acceptable to the Trustee). Upon the following events (the Put Option Events ): i) A Change of Control Event; or ii) A De-listing Event, each Bondholder shall have a right of pre-payment (a Put Option ) of its Bonds at a price of 100 % of par plus accrued interest. The Put Option must be exercised within two months after the Issuer has given notification to the Bondholders of a Put Option Event. Such notification shall be given as soon as possible after a Put Option Event has taken place The Put Option may be exercised by the Bondholders by giving written notice of the request to its Account Manager. The Account Manager shall notify the Paying Agent of the pre-payment request. The settlement date of the Put Option shall be fifteen 15 Business Days following the date when the Paying Agent received the repayment request. On the settlement date of the Put Option, the Issuer shall pay to each of the Bondholders holding Bonds to be pre-paid, the principal amount of each such Bond (including any premium pursuant to Clause in the Bond Agreement if applicable) and any unpaid interest accrued up to and including the settlement date. Notwithstanding the foregoing provisions of this Clause in the Bond Agreement, the Bondholders Put Option will not apply if a third party offers to purchase all Bonds in respect of which Put Option has been validly requested, at the times and to the price, and otherwise in compliance with the requirements set forth in this Clause in the Bond Agreement. Default Insolvency and insolvency proceedings: Creditor s process: Cross-default: If any Obligor or a Material Subsidiary becomes insolvent or subject to insolvency proceedings. If an Obligor or a Material Subsidiary becomes subject to creditors process or enforcement of a Security Interest effecting any asset(s) of the Group having an aggregate value of a least the higher of (a) NOK 300,000,000 (or its equivalent) and (b) 5% of the consolidated book value of the assets of the Group, and is not discharged within the statutory limit applicable in the jurisdiction where such attachment, distress or execution was commenced, or in case of any Obligor, it 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. Any of the following occurs in respect of any Obligor or any member of the Group: Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 18 of 22

19 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note (a) any of its Financial Indebtedness is not paid when due (after the expiry of any originally applicable grace period); (b) any of its Financial Indebtedness: (i) becomes prematurely due and payable; (ii) is placed on demand; or (iii) is capable of being declared by or on behalf of a creditor to be prematurely due and payable or of being placed on demand, in each case, as a result of an event of default or any provision having a similar effect (howsoever described); or (c) any commitment for its Financial Indebtedness is cancelled or suspended as a result of an event of default or any provision having a similar effect (however described), unless the aggregate amount of Financial Indebtedness falling within all or any of paragraphs (a) to (c) above is less than NOK 100,000,000 or its equivalent. Issuer s acquisition of bonds: Restrictions of Purchase and Transfer of Bonds: 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 used for partial redemption. Eligible purchasers The Bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act ), and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Bonds are being offered in the United States only to qualified institutional buyers ( QIBs ) as defined in, and in reliance on, the exemption from the registration requirements of the Securities Act provided by Rule 144A under the Securities Act ( Rule 144A ) and outside the United States in accordance with Regulation S under the Securities Act ( Regulation S ). Prospective purchasers in the United States are hereby notified that sellers of the Bonds may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. THE BONDS SOLD IN THE UNITED STATES ARE RESTRICTED SECURITIES AND NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH APPLICABLE U.S. SECURITIES LAWS. The Bonds may not be purchased by, or for the benefit of, persons resident in Canada. Transfer restrictions Subject to the restrictions set forth in this section and any other restrictions that may be imposed on Bondholders by 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), the Bonds are freely transferable and may be pledged. Bondholders located in the United States are not permitted to transfer Bonds except (a) subject to an effective registration statement under the US Securities Act, (b) to a person that the Bondholder reasonably believes is a QIB within the meaning of Rule 144A that is purchasing for its own account, or the account of another QIB, to whom notice is given that the resale, pledge or other transfer may be made in reliance on Rule 144A, (c) outside the United States in accordance with Regulation S under the US Securities Act, and (d) pursuant to an exemption from registration under the US Securities Act provided by Rule 144 there under (if available). The Bonds may not, subject to applicable Canadian laws, be traded in Canada Prepared in cooperation between 19 of 22 DnB NOR Markets, Nordea Markets and SEB Merchant Banking

20 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note for a period of four months and a day from the date the Bonds were originally issued. Supplementary information about the status of the loan: Market making: Effective Annual Interest Rate: Legislation: Bond Agreement (s): The Issuers payment obligations under the Bond Agreement shall rank ahead of subordinated capital and shall rank at least pari passu with all other obligations, save for (i) secured obligations to the extent they are secured and (ii) obligations which are mandatory preferred by law. There is no market making agreement entered into in connection with the Loan. Dependent of marked price, but if the market price is 100% the Effective Annual Interest Rate will be 11%. Disputes arising from or in connection with the Bond Agreement, which are not resolved amicably, shall be resolved in accordance with Norwegian law and the Norwegian courts. Legal suits shall be served at the Trustee s competent legal venue. The Bond Agreement (s) has been entered into between the Borrower and the Trustee. The Bond Agreement (s) regulates the Bondholder s rights and obligations in relations with the issue. The Trustee enters into this agreement on behalf of the Bondholders and is granted authority to act on behalf of the Bondholders to the extent provided for in the Bond Agreement. When bonds are subscribed / purchased, the Bondholder has accepted the Bond Agreement and is bound by the terms of the Bond Agreement. The Bond Agreement is available through the Joint Bookrunners or from the Borrower. Availability of the Documentation: Bondholders meeting: At the Bondholders meeting each Bondholder has one vote for each bond he owns. In order for the Bondholders meeting to be able to make valid decisions, Bondholders representing at least 1/2 of the Outstanding Loan must be represented. See also Clause in the Bond Agreement. For more details, see also Bond Agreement clause 16. Approvals and Listing: The power of attorney to the administration to issue the bond were given by the Signed Minutes dated The Bonds will be listed on Oslo Børs ASA soon as the prospectus are controlled and approved by Oslo Børs. Prospectus fee and Listing fee: The prospectus fee is NOK 10,000 per ISIN, and NOK 40,000 for inspection of the Registration document. The Listing fee is for the Loan is: ISIN NO MNOK 1,250*33,75*0.25 = NOK 10, (max. NOK 7.875,-). Total cost is NOK 57,875. Fees and expenses: The Issuer shall pay any stamp duty and other public fees in connection with the loan. Any public fees or taxes on sales of Bonds in the secondary market shall be paid by the Bondholders, unless otherwise decided by law or regulation. The Issuer is responsible for withholding any withholding tax imposed by Norwegian law. THE BONDS SOLD IN THE UNITED STATES ARE RESTRICTED SECURITIES AND NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH APPLICABLE U.S. SECURITIES LAWS. Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 20 of 22

21 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note 4) Additional Information The involved persons in REC or in the Guarantors have no interest, nor conflicting interests that are material to the Loan. REC has mandated, DnB NOR, Nordea and SEB as Joint Bookrunners for the issuance of the Loan. The Joint Bookrunners have acted as advisors to REC in relation to the pricing of the Loan. Listing of the Loan: The prospectus will be published in Norway. An application for listing at Oslo Børs will be sent as soon as possible after the Issue Date. Listing fee 2009 for the Loan will be: NOK 7.875,-. Each bond is negotiable. Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 21 of 22

22 Renewable Energy Corporation ASA, Prospectus dated 9. October 2009 ISIN: NO Securities Note 5) Appendix: Bond Agreement and On Demand Guarantee Prepared in cooperation between DnB NOR Markets, Nordea Markets and SEB Merchant Banking 22 of 22

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