ENGAGEMENT LETTER. Compliance of granting new loans and/or equity contributions with EU state aid law: Offer regarding Legal Advisory Services

Transcription

1 ENGAGEMENT LETTER THIS ENGAGEMENT LETTER is made and entered into as of [...] between Termoelektrarna Šoštanj d. o. o. Cesta Lole Ribarja 18 SI Šoštanj ("TEŠ") and Clifford Chance Deutschland LLP Konigsallee Dusseldorf ("Clifford Chance") TEŠ and Clifford Chance hereinafter together the "Parties" Compliance of granting new loans and/or equity contributions with EU state aid law: Offer regarding Legal Advisory Services Dear Sir or Madam, Thank you for your instruction to advise TEŠ with regard to the compliance of the envisaged granting of new loans and/or equity contributions by Holding Slovenske elektrarne d.o.o. ("HSE") to TEŠ under EU state aid law. We will be delighted to provide you with legal assistance regarding the preparation and the execution of this interesting project. Based on the information currently available to us, we would like to briefly outline the terms of our engagement and how we suggest assisting you in the above matter: V IS A LIMITED LIABILITY PARTNERSHIP WITH REGISTERED OFFICE AT 10 UPPER BANK STREET, LONDON E14 5JJ, REGISTERED IN ENGLAND AND WALES UNDER OC A BRANCH OFFICE OF THE PARTNERSHIP IS REGISTERED IN THE PARTNERSHIP REGISTER AT FRANKFURT AM MAIN LOCAL COURT UNDER PR 2189.

2 1. SCOPE OF SERVICES Clifford Chance would form a team together with the economic consultant CRA International (UK) Limited incorporating Charles River Associates ("CRA") for rendering the services requested by way of subcontracting CRA. 1.1 The Clifford Chance team would organize a kick-off call with CRA and would brief the CRA team on what the particular task is, which structure is needed and what the expected work product should be. 1.2 The relevant business and financial plans and projections provided by TES would be reviewed, and the market-based short-term assumptions based on the latest market information may be updated. For this purpose, the CRA team may need to coordinate with the TES planning team and discuss the respective details with them. 1.3 Following data collection and review, the analysis phase would be commenced. This would involve estimating the Free Cash to Equity for the investment and the associated internal rates of return ("IRR") under a range of assumptions. The estimated IRRs would be compared with a cost of equity benchmark that would be derived by using the so-called Capital Asset Pricing Model ("CAPM"). The cost of equity from the CAPM would be cross-checked against available reported estimates from market commentators. 1.4 TES would be provided with an oral presentation of the preliminary results of the analysis, whereby the underlying assumptions, key sensitivities, and potential areas of concern would be outlined. This oral presentation is anticipated for 16 October Following the oral presentation, the Parties would agree the content and form of the written report. 1.6 The CRA team would prepare for the Clifford Chance team a report setting out how the Private Investor Test has been applied in accordance with the Market Economy Investor Principle. This would then be incorporated by the Clifford Chance team in the final legal assessment on the compliance of the envisaged new loans and/or equity contributions to be granted by HSE to TES with EU state aid rules. 1.7 Out of scope Should material changes occur with regard to the general parameters of the project (scope of service and/or time frame) we would need to discuss such matters as soon as possible in order to reach agreement on any necessary adaptations to the expected fee volume. In any event, any caps are understood to apply only to the subject matter vl.4 _ 2. 40^

3 specified herein and any extra work outside of such scope will be charged separately and on top of such fees. 2. TEAM/CONTACT DETAILS Name Title/Level Telephone Dr. Joachim Schutze Partner, Clifford Chance ance.com Miriam Kammer Senior Associate, Clifford Chance ance.com Dr. Robin Cohen Vice President, CRA Ana Barillas Associate Principal, CRA Knight Sukthaworn Consulting Associate, CRA com 3. TEŠ/CONTACT DETAILS Our main contact person at TEŠ would be Name Title/Level Telephone Zlatka Zorko Director of the Sector for business economics Zlatka.zorko@te-sostanj. si 4. TIMING AND TERM The period for the provision of the services under this Engagement Letter will commence once this Engagement Letter has been signed by both Parties and will continue until either (i) the services are completed or (ii) this Engagement Letter is terminated, whichever is the earlier vl.4. 3 _

4 According to our experience, the rendering of the services 1.1 through 1.6 listed above would all in all take approx. 4 weeks. 5. FEE AND PAYMENT TERMS 5.1 Fee The hourly rates (time fee) of the individual team members for their advice are as follows: Dr. Joachim Schiitze, Clifford Chance Miriam Kammer, CUfford Chance Dr. Robin Cohen, CRA Ana Barillas, CRA Knight Sukthaworn, CRA EUR 600 EUR 400 EUR 450 EUR 315 EUR 240 However, we would offer you to render the services 1.1 through 1.6 listed above for an overall fixed fee of EUR 70,000. All numbers above refer to net fees excluding VAT and any travel/ accommodation expenses which would be agreed in advance in writing with TES. Expenses are charged on the basis on which they incurred. 5.2 Payment of bills and cost transparency With regard to invoicing, we would propose to send you one invoice 60 days after the services 1.1 through 1.6 are completed. 6. GENERAL TERMS AND CONDITIONS To the extent not covered by the foregoing, we will act on the terms set out in our standard Terms of Business. Our standard Terms of Business also apply to any other office bearing the Clifford Chance name. 7. CLIENT Our client and the recipient of our service is TEŠ (the "Client" or "you"). Our lawyerclient relationship is with, and our duty of care is owed to, the Client only and the Client will bear our fees in connection with the project. Should TEŠ intend to forward vl.4. 4 _

5 our advice to third parties, TEŠ will inform Clifford Chance beforehand. You are aware that a change of the Client at a later stage of the project is not possible. The Client is aware of the fact that Clifford Chance within its assessment fully relies on CRA's services as subcontractor without any own factual evaluation. 8. CHOICE OF LAW This letter is governed by English law. 9. ENTIRE AGREEMENT This Engagement Letter constitutes the entire understanding and agreement of the Parties with respect to its subject matter and supersedes all other oral or written communications, understandings, or agreements relating to the Engagement and the Engagement Letter. Should you have any questions regarding the above statements or should you wish to discuss individual aspects of the above in more detail, please do not hesitate to give us a call. If you agree with the content of this letter, we would kindly ask you to counter-sign and return to us an executed copy of this letter in order to indicate your acknowledgement of, and agreement to, these terms of engagement. Again, thank you for instructing us to act for you on this matter and our team and we are looking forward to working with you. Yours sincerel DrXjoachim Schiitze vl ^

6 Agreed by the Parties through their authorised representatives,y By Termoelektrarna Šoštanj dr. Signed: Name: Title: Date, Place: Matjaž Eberlinc Dr ,, Šoštanj TERMOELEKTRARNA ŠOŠTANJ doa By Clifford Chan Signed Name: Title: Date, Place: Joaerrim Schiitze Dr. 2^.^//^..., Di Dusseldorf vl W593806