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ACT No. XVIII of 2011 AN ACT to amend the Participation and Guarantees under the European Financial Stability Facility Act (Cap. 505) and to amend the Government Borrowing and the Granting of Loans to the Hellenic Republic Act (Cap. 502).
Table of Provisions (23)
Statutory Text (23 Articles)
I assent.
G EORGE A BELA
(L.S.)
President
18th October, 2011
ACT No. XVIII of 2011
AN ACT to amend the Participation and Guarantees under the
European Financial Stability Facility Act (Cap. 505) and to amend
the Government Borrowing and the Granting of Loans to the Hellenic
Republic Act (Cap. 502).
BE IT ENACTED by the President, by and with the advice and
consent of the House of Representatives, in this present Parliament
assembled, and by the authority of the same, as follows:-
The short title of this Act is the Participation and
Guarantees under the European Financial Stability Facility and the
Government Borrowing and the Granting of Loans to the Hellenic
Republic (Amendment) Act, 2011, and this Act shall be read and
construed as one with the Participation and Guarantees under the
European Financial Stability Facility Act and the Government
Borrowing and the Granting of Loans to the Hellenic Republic Act,
hereinafter referred to as "the principal Act".
European Financial Stability Facility Framework Agreement signed in Malta by
the Minister of Finance on the 6th September, 2011
Execution Version
AMENDMENT TO THE EFSF FRAMEWORK AGREEMENT
Between
KINGDOM OF BELGIUM
FEDERAL REPUBLIC OF GERMANY
REPUBLIC OF ESTONIA
IRELAND
HELLENIC REPUBLIC
KINGDOM OF SPAIN
FRENCH REPUBLIC
ITALIAN REPUBLIC
REPUBLIC OF CYPRUS
GRAND DUCHY OF LUXEMBOURG
REPUBLIC OF MALTA
KINGDOM OF THE NETHERLANDS
REPUBLIC OF AUSTRIA
PORTUGUESE REPUBLIC
REPUBLIC OF SLOVENIA
SLOVAK REPUBLIC
REPUBLIC OF FINLAND
AND
EUROPEAN FINANCIAL STABILITY FACILITY
THIS AMENDMENT (the
"Amendment")
TO
THE
EFSF
FRAMEWORK AGREEMENT
is made by and between
(A) Kingdom of Belgium, Federal Republic of Germany, Republic of
Estonia, Ireland, Hellenic Republic, Kingdom of Spain, French Republic, Italian
Republic, Republic of Cyprus, Grand Duchy of Luxembourg, Republic of Malta,
Kingdom of the Netherlands, Republic of Austria, Portuguese Republic, Republic
of Slovenia, Slovak Republic and Republic of Finland (the "euro-area Member
States" or "EFSF Shareholders"); and
(B) European Financial Stability Facility ("EFSF"), a société anonyme
incorporated in Luxembourg, with its registered office at 43, avenue John F.
Kennedy, L-1855 Luxembourg (R.C.S. Luxembourg B153.414) (the euro-area
Member States and EFSF referred to hereafter as the "Parties").
PREAMBLE
Whereas
(1) The euro-area Member States and EFSF have entered into a framework
agreement to set out the terms and conditions upon which EFSF may make Loans
to euro-area Member States, finance such Loans by issuing or entering into
Funding Instruments backed by Guarantees issued by the Guarantors, the terms
and conditions on which the Guarantors shall issue Guarantees in respect of the
Funding Instruments issued by or entered into by EFSF, the arrangements entered
into between them in the event that a Guarantor is required to pay under a
Guarantee more than its required proportion of liabilities in respect of a Funding
Instrument and certain other matters relating to EFSF (hereinafter referred to as the
"Framework Agreement").
(2) The euro-area Member States have by a unanimous decision on 11
March 2011 decided that EFSF may provide stability support to euro-area Member
States by arranging for the purchase of bonds of such euro-area Member States on
the primary market as financial assistance.
(3) In accordance with Article 13(8) of the Framework Agreement, the
Republic of Estonia shall become a party to the Framework Agreement with effect
from the Effective Date of the Amendments (as defined in Article 3(1) of this
Amendment) by adhering to the Framework Agreement and entering into this
Amendment.
(4) In a statement dated 21 July 2011 the Heads of State or Government of
the euro area and EU institutions stated their intention to improve the effectiveness
of EFSF and address contagion and that they had agreed to increase the flexibility
of EFSF linked to appropriate conditionality. As a consequence, whilst originally
financial assistance was provided solely by way of loan facility agreements,
financial assistance may now be granted in the form of financial assistance facility
agreements ("Financial Assistance Facility Agreements", each a "Financial
Assistance Facility Agreement") to provide financial assistance by way of loan
disbursements, precautionary facilities, facilities to finance the recapitalisation of
financial institutions in a euro-area Member State (through loans to the
governments of such Member States including in non-programme countries),
facilities for the purchase of bonds in the secondary markets on the basis of an
ECB analysis recognizing the existence of exceptional financial market
circumstances and risks to financial stability or facilities for the purchase of bonds
in the primary market (each such utilization of a Financial Assistance Facility
Agreement being a "Financial Assistance") with the Financial Assistance to be
made under all Financial Assistance Facility Agreements being financed with the
benefit of guarantees in an amount of up to EUR 779,783.14 million to be used
within a limited period of time. This is intended to result in an effective capacity
for EFSF to provide Financial Assistance of EUR 440,000 million.
(5) The euro-area Member States and EFSF have agreed that the
Framework Agreement shall be amended on the terms set out in this Amendment
and that such amendments shall take effect prospectively on the Effective Date of
the Amendments (as defined in Article 3(1) of this Amendment).
Now, therefore, the Parties have agreed as follows
1. AMENDMENTS TO THE FRAMEWORK AGREEMENT
With effect from the Effective Date of the Amendments (as defined below),
the Framework Agreement shall be amended as follows
(1) The Republic of Estonia shall be listed in the list of euro-area Member
States set out on the cover page and in paragraph (A) of the list of parties to the
Framework Agreement and the Hellenic Republic shall be moved in the list of
parties and signature pages to be listed after Ireland.
(2) In paragraph (B) of the list of parties the registered address of EFSF will
be replaced as "43, avenue John F. Kennedy, L-1855, Luxembourg".
(3) Paragraph (1) of the preamble of the Framework Agreement shall be
amended as follows
(a)
the words "euro-area" shall be added after the words "beyond
such";
(b) the words "with the aim of safeguarding the financial stability of
the euro area as a whole and of its Member States" shall be added at the end
of the first sentence;
(c)
the words "on 8 May 2010 or on such other terms as may be
agreed" are added after "the Hellenic Republic".
(4) Paragraph (2) of the preamble of the Framework Agreement shall be
deleted and replaced by the following paragraphs (2) and (2)(a)
"EFSF has been incorporated on 7 June 2010 for the purpose of making
stability support to euro-area Member States. In a statement dated 21 July
2011 the Heads of State or Government of the euro area and EU institutions
stated their intention to improve the effectiveness of EFSF and address
contagion and they had agreed to increase the flexibility of EFSF linked to
appropriate conditionality. As a consequence, whilst originally financial
assistance was provided solely by way of loan facility agreements, financial
assistance may now be granted in the form of financial assistance facility
agreements ("Financial Assistance Facility Agreements", each a
"Financial Assistance Facility Agreement") to provide financial assistance
by way of loan disbursements, precautionary facilities, facilities to finance
the recapitalisation of financial institutions in a euro-area Member State
(through loans to the governments of such Member States including in non-
programme countries), facilities for the purchase of bonds in the secondary
markets on the basis of an ECB analysis recognizing the existence of
exceptional financial market circumstances and risks to financial stability or
facilities for the purchase of bonds in the primary market (each such
utilization of a Financial Assistance Facility Agreement being a "Financial
Assistance") with the Financial Assistance to be made under all Financial
Assistance Facility Agreements being financed with the benefit of guarantees
in an amount of up to EUR 779,783.14 million to be used within a limited
period of time. This is intended to result in an effective capacity for EFSF to
provide Financial Assistance of EUR 440,000 million. The availability of
such Financial Assistance Facility Agreements will be conditional upon the
relevant euro-area Member States which request such Financial Assistance
Facility Agreements entering into memoranda of understanding (each an
"MoU") with the European Commission, acting on behalf of the euro-area
Member States, including conditions such as budgetary discipline and
economic policy guidelines and their compliance with the terms of such
MoU. With respect to each Financial Assistance Facility Agreement, the
relevant beneficiary euro-area Member State shall be referred to as the
"Beneficiary Member State". If Financial Assistance is in the form of
facilities for the purchase of bonds in the primary or secondary market, the
nature and terms, including as to pricing, policy conditionality, conditions to
utilization and documentation of such arrangements shall be in accordance
with guidelines adopted by the board of directors of EFSF acting
unanimously pursuant to Article 2(1)(b). Similarly, if Financial Assistance is
in the form of precautionary facilities and facilities to finance the
recapitalisation of financial institutions of a euro-area Member State, the
board of directors of EFSF acting unanimously shall adopt guidelines under
Article 2(1)(c) in relation to such arrangements. The terms of an MoU shall
impose appropriate policy conditionality for the full duration of a Financial
Assistance Facility Agreement and not just limited to the period in which
Financial Assistance is made available. The conditions attached to the
provision of Financial Assistance by EFSF as well as the rules which apply
to monitoring compliance must be fully consistent with the Treaty on the
Functioning of the European Union and the acts of EU law.
(2) (a)
On 20 June 2011, euro area Finance Ministers agreed that the
pricing structure for EFSF loan facility agreements should be as follows
"(a)
EFSF Cost of Funding; plus
(b)
the Margin.
The margin shall be equal to 200 basis points with such Margin being
increased to 300 basis points in respect of any Loan which remains
outstanding after the third anniversary of the date of disbursement.
In respect of fixed rated Loans with a scheduled maturity which exceeds
three (3) years, the Margin shall be equal to the weighted average of 200
basis points for the first three (3) years and 300 basis points for the period
from (and including) the third anniversary of its drawdown and ending on
(but excluding) the scheduled maturity date of such Loan."
Subsequently, on 21 July 2011, Heads of State or Government of the euro
area stated
"We have decided to lengthen the maturity of future EFSF loans to
Greece to the maximum extent possible from the current 7.5 years to a
minimum of 15 years and up to 30 years with a grace period of 10 years. In
this context, we will ensure adequate post programme monitoring. We will
provide EFSF loans at lending rates equivalent to those of the Balance of
Payments facility (currently approx. 3.5%), close to, without going below,
the EFSF funding cost. We also decided to extend substantially the maturities
of the existing Greek facility. This will be accompanied by a mechanism
which ensures appropriate incentives to implement the programme."
They also stated
"The EFSF lending rates and maturities we agreed upon for Greece will
be applied also for Portugal and Ireland." "
(5) Paragraph (3) of the preamble of the Framework Agreement shall be
amended by adding the words "European Union" after the words "the 27".
(6) Paragraph (4) of the preamble of the Framework Agreement shall be
amended as follows
(a)
the words "such loans" in the first line shall be replaced by the
term "Financial Assistance"; and
(b) the words "It is not anticipated that a request under Article 2(7) of
this Agreement would be made by a euro-area Member State which has
requested Financial Assistance in the form of a precautionary facility, so long
as such facility is not drawn or utilised, a facility to finance the
recapitalisation of financial institutions in such Member State by way of a
loan made to such Member State or a facility for the purchase of bonds of
such Member State in the secondary market." shall be added at end of the
paragraph.
(7) Paragraph (6) of the preamble to the Framework Agreement shall be
amended as follows
(a)
the words "enter into Financial Assistance Facility Agreements"
shall be added after the words "the terms and conditions upon which EFSF
may";
(b) in line three the word "Loans" is replaced by the words "Financial
Assistance available";
(c)
after the words "finance such", the word "Loans" is deleted and
replaced by "Financial Assistance".
(8) The Title of Article 2 shall be deleted and replaced by the words
"Financial Assistance Facility Agreements, Grant of Financial Assistance,
Funding Instruments and issuance of Guarantees".
(9) Article 2(1) shall be amended by
(a)
adding "(a)" after "2(1)";
(b) in sub-paragraph (a), the words "stability support loan" falling
after the words "made by a euro-area Member State to the other euro-area
Member States for a" and prior to the words "(i) the Commission" shall be
deleted and replaced by "Financial Assistance Facility Agreement";
(c)
in sub-paragraph (a) the reference to "Article 136" shall be
replaced by a reference to "Article 136(1)".
(d) in sub-paragraph (a), each occurrence of the words "Loan Facility
Agreement" or "Loan Facility Agreements" shall be replaced by the words
"Financial Assistance Facility Agreement" or "Financial Assistance Facility
Agreements", and each occurrence of the word "Borrower" shall be replaced
by the term "Beneficiary Member State";
(e)
in sub-paragraph (a), the words "(each adapted to the particular
form of financial assistance being provided to the relevant euro-area Member
State)" shall be added after the words "shall be substantially in the form of
template Financial Assistance Facility Agreements" and the word "a" prior to
the word "template" shall be deleted and prior to the words "which shall be
approved by the euro-area Member State for the purpose of this Agreement
and the financial parameters of such";
(f)
in sub paragraph (a) the word "available" shall be added after the
phrase "The terms of Article 3(2) set out the basis upon which decisions shall
be made in relation to Financial Assistance to be made";
(g) in sub-paragraph (a), the words "subject to any other procedures
which may be adopted pursuant to guidelines adopted by the board of
directors of EFSF pursuant to Articles 2(1)(b) or 2(1)(c)" shall be added after
the words "The terms of Article 3(2) set out the basis upon which decisions
shall be made in relation to Financial Assistance to be made under an
existing Financial Assistance Facility Agreement" and prior to the full stop;
(h)
adding a sub-paragraph (b) as follows: "(b) Financial Assistance
to a euro-area Member State may consist of facilities for the purchase of
bonds in the secondary market to avoid contagion, on the basis of an ECB
analysis recognising the existence of exceptional financial market
circumstances and risks to financial stability or by way of facilities for the
purchase of bonds in the primary market. The nature and terms, including as
to pricing, conditions to and procedures for disbursement or utilisation,
administration, documentation and monitoring of compliance with policy
conditionality of such arrangements shall be in accordance with guidelines
adopted by the board of directors of EFSF acting with unanimity. Bonds
purchased by EFSF in the primary or secondary markets can either be held to
maturity or sold in accordance with the applicable guidelines";
(i)
adding a sub-paragraph (c) as follows: "To improve the
effectiveness of EFSF and address contagion, Financial Assistance Facility
Agreements to a euro-area Member State may consist of precautionary
facilities or facilities to finance the re-capitalisation of financial institutions
in a euro-area Member State by way of a loan to the government of such
Member State (whether or not it is a programme country). If a Financial
Assistance Facility Agreement covers such Financial Assistance, the nature
and terms of such agreement, including as to pricing, conditions to and
procedures for disbursement or utilisation, compliance with policy
conditionality, administration, documentation and monitoring of compliance
with policy conditionality shall be in accordance with guidelines to be
adopted by the board of directors of EFSF acting with unanimity."
(10) Article 2(2) shall be amended as follows
(a)
the words "Loan Facility Agreement" falling after the words "In
respect of each" and prior to the words "and the Loans to be made thereunder,
the euro-area Member States agree that EFSF" shall be deleted and replaced
by "Financial Assistance Facility Agreement";
(b) the words "Loans to Borrowers" shall be deleted and replaced by
the words "Financial Assistance to Beneficiary Member States";
(c)
the word "Loans" which appears after the words "substantially
the same financial profile as the related and after the phrase "the amounts it
recovers in respect of" and the word "Loan" after the phrase "the interest rate
which will apply to each" shall all be replaced by the term "Financial
Assistance";
(d) the third sentence shall be deleted and replaced by the following
sentence
"The pricing which will apply to each Loan is intended to cover
the cost of funding and operations incurred by EFSF and shall include a
margin (the "Margin").";
(e)
the following sentences shall be added as fourth and fifth
sentences prior to the words "The Service Fee"
"This shall provide remuneration for the Guarantors and shall be
specified in the relevant Financial Assistance Facility Agreement. The
EFSF shall review periodically the pricing structure applicable to its
Financial Assistance Facility Agreements and any changes thereto shall
be agreed by the Guarantors acting unanimously in accordance with
Article 10(5)."
(f)
in the final sentence, the words "retained in respect of Financial
Assistance disbursed prior to the Effective Date of the Amendments" shall be
added after the words "The Service Fee";
(g) in the final sentence, the word "Borrower" shall be replaced by
"Borrower Member State".
(11) In Article 2(3)
(a)
after the words "the percentage set out next to each Guarantor's
name in the third column (the "Contribution Key") in Annex 2", a footnote
is added drafted as follows "In respect of Funding Instruments issued or
entered into prior to the Effective Date of the Amendments the Contribution
Key and Adjusted Contribution Key Percentage shall be determined by the
terms of this Agreement (including Annex 2) prior to the amendments.";
(b) in item (b), "120%" shall be replaced by "up to 165% (the "Over-
Guarantee Percentage") in respect of Funding Instruments issued or
entered into after the Effective Date of the Amendments";
(c)
in item (b), a footnote shall be added after "(b)" drafted as follows
"The percentage of 120% shall continue to apply to Funding Instruments
issued or entered into prior to the Effective Date of the Amendments.";
(d) after the words "No Guarantor shall be required to issue
Guarantees which would result in it", the words "having a Guarantee
Exposure in excess of its aggregate guarantee commitment (its "Guarantee
Commitment") set out alongside its name in Annex 1 or" shall be deleted
and shall be replaced by the words "having a Guarantee Notional Exposure in
excess of its guarantee commitment ("Guaranteed Commitment") set
alongside its name in Annex 1. For the purposes of this Agreement, a
Guarantor’s "Guarantee Notional Exposure" is equal to the aggregate of
(i) the principal amount of Funding Instruments issued or entered into
(including Funding Instruments issued or entered into pursuant to any
Diversified Funding Strategy approved pursuant to Article 4(5), and other
principal amounts guaranteed under Guarantees issued for other purposes
pursuant to Article 2(3)) which benefit from Guarantees issued under this
Agreement and which remain outstanding; and (ii) without double counting,
the aggregate amounts paid by the Guarantors following demands made
under Guarantees issued under this Agreement which paid amounts have not
been reimbursed to the Guarantors.";
(e)
in the final paragraph, the words "Guarantor's Guarantee
Exposure" shall be replaced by the words "Guarantor's Guarantee Notional
Exposure"; and
(f)
a new paragraph is added after the final paragraph, drafted as
follows "It is acknowledged and agreed that the amendments to this Article
2(3) apply to Funding Instruments issued or entered into on or after the
Effective Date of the Amendments. These amendments do not in any respect
affect or reduce the liability of Guarantors (including any Guarantors which
became Stepping-Out Guarantors) under Guarantees which guarantee
Funding Instruments issued or entered into prior to the Effective Date of the
Amendments in respect of which the Contribution Key and Adjusted
Contribution Key Percentage and Guarantee Commitment of each Guarantor
is that which applied on the date of issue of or entry into the relevant Funding
Instrument.".
(12) In Article 2(5)(a), the term "Loan(s)" shall be replaced by the term
"Financial Assistance".
(13) In Article 2(5)(b), each occurrence of the words "Loan Facility
Agreement" shall be replaced by the following words "Financial Assistance
Facility Agreement".
(14) In Article 2(5)(d), after the phrase "the liability of the Guarantor under
such Guarantee", the following words are added "gives rise to a Guarantee
Notional Exposure" and the words "is for a maximum amount" are deleted.
(15) Article 2(7) shall be amended as follows
(a)
the words "stability support" falling after the words "If a euro-
area Member State encounters financial difficulties such that it makes a
demand for a" and prior to the words "loan from EFSF," shall be deleted and
replaced by the following: "Financial Assistance Facility Agreement";
(b) the words "or incurring new liabilities as a Guarantor" shall be
added after the words "to accept that the Guarantor in question does not
participate in issuing a Guarantee"; and
(c)
the words "Loan Facility Agreements or further Loans" falling
after the words "The decision of the euro-area Member States in relation to
such a request is to be made at the latest when they decide upon making any
further" shall be deleted and replaced by the following: "Financial Assistance
Facility Agreements or make available further Financial Assistance".
(16) Article 2(8) shall be amended by
(a)
adding the words "In respect of Financial Assistance disbursed
prior to the Effective Date of the Amendments," prior to the words "an
upfront service fee (the "Service Fee") calculated as being";
(b) each occurrence of the word "Borrower" shall be replaced by
"Borrower Member State" and each occurrence of the word "Loan" shall be
replaced by the term "Financial Assistance";
(c)
adding the words "(the "Prepaid Margin")" after the words "of
the anticipated Margin that would accrue on each Financial Assistance to its
scheduled maturity date" and before the words "shall be deducted from the
cash amount to be remitted to the Borrower";
(d) replacing the words "net present value of the anticipated" with
the word "Prepaid"; and
(e)
adding the phrase "the amounts credited to the Cash Reserve
under Article 2(9)" after the phrase "The "Cash Reserve" shall include these
retained amounts".
(17) A new Article 2(9) shall be added after Article 2(8) (the "New Article
2(9)"), and the previous Article 2(9) shall become the new Article 2(10) (the "New
Article 2(10)"). The New Article 2(9) shall be drafted as follows
"In respect of Financial Assistance disbursed after the Effective Date of
the Amendments, if on the date of disbursement of such Financial
Assistance, the Notes issued to finance such Loan obtain the highest credit
ratings (without any additional credit enhancement), then, unless otherwise
agreed
(a) subject to Article 2(9)(c), the Margin shall be payable on
such Financial Assistance in arrear at the end of each interest period;
(b) an amount calculated as being 50 basis points on the
aggregate principal amount of each Financial Assistance shall be
charged to the Borrower as an advance payment of a portion of the
Margin on such Financial Assistance (the "Advance Margin") and
shall be deducted from the cash amount to be remitted to the
Beneficiary Member State in respect of such Financial Assistance;
(c) on the first (and/or subsequent) interest payment date(s) of
a Financial Assistance the amount payable in respect of Margin shall be
reduced by an amount equal to the Advance Margin and the interest cost
related to the funding of the Advance Margin; and
(d) the only deduction from the cash amount of the Financial
Assistance shall be the amount of the Advance Margin and any fees and
costs incurred in connection with the issue of Funding Instruments to
finance such Financial Assistance and any adjustment for Funding
Instruments being issued for an issue price less than par value
("Issuance Costs") and the Net Disbursement Amount shall be equal to
the principal amount of the Financial Assistance less (i) the amount of
Advance Margin and (ii) the Issuance Costs.
The deduction of an amount equal to the Issuance Costs and the amount
of Advance Margin shall not reduce the principal amount of a Financial
Assistance that the Borrower is liable to repay and on which interest accrues.
Advance Margin and Margin amounts retained or received in respect of
a Financial Assistance shall be credited to the Cash Reserve.
If, on the date of disbursement of a Financial Assistance, the Notes
issued to finance such Loan would not obtain the highest quality credit
ratings (without any additional credit enhancement), then the euro-area
Member States may adopt additional credit enhancement mechanisms under
Article 5(3) of this Agreement and make consequent modifications to the
relevant Financial Assistance Facility Agreement.".
(18) The New Article 2(10) shall be amended by
(a)
replacing each occurrence of the words "Loan Facility
Agreement" by the following words "Financial Assistance Facility
Agreement" and each reference to the term "Loans" by "Financial
Assistance";
(b) adding the phrase "then, unless otherwise agreed" prior to the
phrase "these amounts shall be paid to the Guarantors as consideration for the
issuance of their Guarantees"; and
(c)
adding after the words "anticipated Margin retained in respect of
each Loan Facility Agreement" the words "and the amounts credited to the
Cash Reserve under Article 2(9) and the".
(19) In Article 2(11), each occurrence of the words "Loan Facility
Agreement" shall be replaced by the following words "Financial Assistance
Facility Agreement", the word "Loan" shall be replaced by the term "Financial
Assistance" and the word "Borrower" by "Beneficiary Member State".
(20) In Article 2(12), the words "Loan Facility Agreement" falling after the
words "(i) the Guarantees, (ii) the" and prior to the words ", (iii) the documentation
for the Funding Instruments" shall be deleted and replaced by the following
"Financial Assistance Facility Agreements (adapted as appropriate pursuant to
guidelines adopted by the board of directors of EFSF under Articles 2(1)(b) or
2(1)(c))";
(21) The word "Loan" shall be deleted from the title to Article 3.
(22) Article 3(1) shall be amended as follows
(a)
the words "Loan Facility Agreement" falling after the words
"Before each disbursement of a Loan under a" and prior to the words "the
Commission will, in liaison with the ECB," shall be deleted and replaced by
the following
"Financial Assistance Facility Agreement, unless otherwise
agreed or unless otherwise specified in guidelines adopted by the board
of directors of EFSF pursuant to Articles 2(1)(b) or 2(1)(c) and
applicable to the relevant category of Financial Assistance Facility
Agreement";
(b) in the third sentence, the words "Loan Facility Agreement"
falling after the words "The first Loan to be made available to a Borrower
under a" shall be replaced by the following words "Financial Assistance
Facility Agreement";
(c)
each occurrence of the word "Borrower" shall be replaced by
"Beneficiary Member State" and the word "Loan" replaced by "Financial
Assistance";
(d) in the third sentence, the word "is" falling after the words "Loan
Facility Agreement" and prior to the words "released following the initial
signature" shall be replaced by the words "shall be";
(e)
in the third sentence, the words "or utilised" shall be added after
the word "released"; and
(f)
a last sentence shall be added as follows: "The board of directors
of EFSF shall adopt guidelines under Article 2(1)(b) and 2(1)(c) regarding
the conditions to and procedures for the disbursement and on-going
monitoring of compliance with policy conditionality of Financial Assistance
in the form of precautionary facilities, facilities for the re-capitalisation of
financial institutions in a Member State and facilities for the purchase of
bonds in the primary or secondary markets.".
(23) Article 3(2) shall be amended as follows
(a)
the first word "Following" shall be deleted;
(b) the words "Unless otherwise specified in the relevant Financial
Assistance Facility Agreement (in accordance with guidelines adopted by the
board of directors of EFSF under Articles 2(1)(b) or 2(1)(c) and applicable to
the relevant category of Financial Assistance Facility Agreement)," shall be
added in the first sentence prior to the words "following a request for";
(c)
the words "funds (a "Request for Funds")" shall be replaced by
"financial assistance (a "Request for Financial Assistance")";
(d)
the words "and requesting a Loan thereunder" shall be deleted;
and
(e)
each occurrence of the words "Loan Facility Agreement" shall be
replaced by the following words "Financial Assistance Facility Agreement"
each occurrence of the word "Loan" shall be replaced by "Financial
Assistance" and the word "Borrower" by the term "Beneficiary Member
State".
(24) Article 3(3) shall be amended as follows
(a)
the words "Loan Facility Agreement" shall be replaced by the
following words "Financial Assistance Facility Agreement"; and
(b) the word "Loan" falling prior to the full stop shall be replaced by
the words "Financial Assistance".
(25) Article 3(5) shall be amended as follows
(a)
the words "unless otherwise specified in the relevant Financial
Assistance Facility Agreement (in accordance with guidelines adopted by the
board of directors of EFSF under Articles 2(i)(b) or 2(i)(c) and applicable to
the relevant category of Financial Assistance Facility Agreement)" shall be
added after the words "On the relevant Disbursement Date," and prior to the
words "EFSF shall make the relevant Loan available to the Beneficiary
Member State": and
(b) the words "Loan Facility Agreement" shall be replaced by the
following words "Financial Assistance Facility Agreement", the word
"Loan" by "Financial Assistance" and the word "Borrower" by "Beneficiary
Member State".
(26) In Article 4(1) the words "(including the Over-Guarantee Percentage
applicable to such issue of Funding Instruments)" shall be added after the words
"setting out the detailed financial terms of each issue" and the term "Loans" shall
be replaced by "Financial Assistance".
(27) In Article 4(2) the term "Loan(s)" shall be replaced by "Financial
Assistance".
(28) In Article 4(3) the term "ESFS" shall be replaced by "EFSF" and the
term "bookrunners" by "book-runners".
(29) In Articles 4(4) and 4(5) the terms "Loans" shall be replaced by the
words "Financial Assistance" and in Article 4(5), the words "under an existing
Loan Facility Agreement" shall be replaced by the following words "under
Financial Assistance Facility Agreements".
(30) In Article 5(1)(a), the term "120%" shall be deleted and replaced with
"an Over-Guarantee Percentage of up to 165% (as required to ensure the highest
credit-worthiness for Funding Instruments issued or entered into by EFSF on the
date of issue) in respect of Funding Instruments issued or entered into after the
Effective Date of the Amendments".
(31) Article 5(1)(b) shall be amended by
(a)
adding the words "(retained in respect of Financial Assistance
disbursed prior to the Effective Date of the Amendments)" after the words
"the Cash Reserve" and prior to the words "shall act as a cash buffer",
(b) the word "Loans" be replaced by "Financial Assistance" and the
word "Borrowers" by "Beneficiary Member States"; and
(c)
replacing the words "Article 2(9)" by the words "Article 2(10)".
(32) In the opening sentence of Article 5(2), the term "Borrower" shall be
replaced by "Beneficiary Member State" and the term "Loan" by "Financial
Assistance".
(33) In Article 5(2)(a), "120%" shall be replaced with "the applicable Over-
Guarantee Percentage".
(34) Article 5(2)(b) shall be amended by adding the words "(provided that
EFSF may not use any amounts credited to the Cash Reserve prior to the Effective
Date of the Amendments to cover shortfalls arising in respect of Financial
Assistance Facility Agreements entered into after such date)" after the words "an
amount from the Cash Reserve".
(35) Article 5(3) shall be amended by adding the phrase "and/or the adoption
of available credit enhancement mechanisms used by EFSF in relation to Financial
Assistance disbursed prior to the Effective Date of the Amendments" in the final
sentence.
(36) A new Article 5(7) shall be added after Article 5(6) as follows: "In
respect of Financial Assistance disbursed after the Effective Date of the
Amendments
(a)
the Beneficiary Member States shall cover Issuance Costs (as
described in Article 2(9));
(b) EFSF shall cover costs and expenses incurred in relation to a
Financial Assistance Facility Agreement out of the Cash Reserve; Provided
that, EFSF may not use any of the Cash Reserve established prior to the
Effective Date of the Amendments to cover costs or expenses incurred in
relation to Financial Assistance Facility Agreements entered into after such
date unless the Cash Reserve is no longer required to serve as credit
enhancement; and
(c)
This Article 5(7) shall be without prejudice to any undertaking of
the Borrower under the Financial Assistance Facility Agreement to cover
costs and expenses of EFSF."
(37) A new Article 5(8) shall be added after the new Article 5(7) as follows
"The euro-area Member States may, by a decision made pursuant to
Article 10(6), agree that EFSF may use part of the sums credit to the Cash
Reserve under Article 2(9) to cover the general non-loan specific operating
expenses or exceptional costs of EFSF. Provided that, EFSF may not release
any Prepaid Margin which has been credited to the Cash Reserve to
constitute credit enhancement prior to the Effective Date of the Amendments
to cover such operating or exceptional costs so long as such portion of the
Cash Reserve is needed to constitute credit enhancement."
(38) A new Article 5(9) shall be added "It is acknowledged and agreed that
the provisions of Article 5(7) and 5(8) are without prejudice to the general
budgetary procedures of EFSF."
(39) Article 6(1) shall be amended by replacing the term "Loan" by
"Financial Assistance".
(40) Article 6(4) shall be amended by replacing the words "under a Loan" by
the phrase "in respect of a Financial Assistance".
(41) In Articles 6(7), 6(8) and 6(9) the words "Borrower" and "Borrowers"
shall be replaced respectively by "Beneficiary Member State" or "Beneficiary
Member States".
(42) In Articles 6(7) and 6(8) the terms "Loan" and "Loans" shall be replaced
by the term "Financial Assistance".
(43) In Article 6(7) the words "or otherwise recovered by EFSF" shall be
added after the words "actually received from the underlying Beneficiary Member
States".
(44) Article 7(1) shall be amended by adding the words "as it applies to the
relevant guaranteed obligation of EFSF. For the avoidance of doubt, in respect of
the Republic of Estonia, it is only required to make or to receive contributions
under this Article 7 in respect of Funding Instruments issued or entered into after
the Effective Date of the Amendments." after the words "The "Required
Proportion" is equal to the Adjusted Contribution Key Percentage applicable to
the relevant Guarantee" and prior to the words "Any indemnity or contribution
payment from one Guarantor to another".
(45) Article 7(3)(v) shall be amended by replacing the words "Loan Facility
Agreement" by the following words "Financial Assistance Facility Agreement"
and replacing the word "Loan" by "Financial Assistance".
(46) Article 8(1) shall be amended by replacing each occurrence of the
words "Loan Facility Agreement" by the following words "Financial Assistance
Facility Agreement", replacing the word "Loan" by "Financial Assistance" and
replacing the word "Borrower" by "Beneficiary Member State".
(47) Article 8(2) shall be amended by
(a)
adding the words "or incur any new liabilities as Guarantor" after
the words "the Stepping-Out Guarantor shall not be required to issue its
Guarantee";
(b) adding the words "or any new liabilities to be incurred as
Guarantor" after the words "and any further Guarantees to be issued under
this Agreement";
(c)
adding the words "and/or incurred" after the words "shall be
issued" and prior to the words "by the remaining Guarantors";
(d) adding the words "or incurrence of any new liabilities as
Guarantor" after the words "and the Adjusted Contribution Key Percentage
for the issuance of further Guarantees"; and
(e)
adding the words "Ireland became a Stepping-Out Guarantor with
effect from 3 December 2010 and Portugal, with effect from 16 May 2011"
after the words "Stepping-Out Guarantor with effect from the entry into force
of this Agreement".
(48) In Article 9
(a)
the Title of Article 9 shall be amended by replacing the words
"Loan Facility Agreement" by the words "Financial Assistance Facility
Agreement"; and
(b) each occurrence of the words "Loan Facility Agreement" shall be
replaced by the following words "Financial Assistance Facility Agreement",
each occurrence of the word "Loan" by "Financial Assistance" and each
occurrence of the word "Borrower" by "Beneficiary Member State".
(49) Article 10(5) shall be amended by
(a)
replacing each occurrence of the words "Loan Facility
Agreement" by the following words "Financial Assistance Facility
Agreement" and each occurrence of the word "Loan" by "Financial
Assistance";
(b) in sub-paragraph (a), adding the words ", any decisions to change
the pricing structure applicable to Financial Assistance Facility Agreements,
and any decisions to include in a Financial Assistance Facility Agreement the
faculty of providing Financial Assistance by way of the purchase of bonds in
the primary markets or the purchase of bonds in the secondary markets based
on an ECB analysis recognising the existence of exceptional financial market
circumstance and risk to financial stability";
(c)
in sub-paragraph (b), deleting the words "on the basis of a report
of the Commission" and by adding the sentence "For secondary market
purchases, the Financial Assistance Facility Agreement for the purchase of
bonds in the secondary market adopted on the basis of Article 10(5)(a) may
provide for alternative procedures for the technical implementation of
individual bond purchases under such Financial Assistance Facility
Agreement, in line with guidelines referred to in Article 2(1)(b)" after the
words "are satisfied";
(d) adding a new sub-paragraph as follows: "(j) any transfer of rights,
obligations and/or liabilities of EFSF to ESM pursuant to Article 13(10)";
and
(e)
adding a new sub-paragraph as follows: "(k) the adoption and the
amendment of any guideline referred to in Article 2(1)(b) or 2(1)(c).".
(50) Article 10(6) shall be amended by replacing each occurrence of the
words "Loan Facility Agreement" by the following words "Financial Assistance
Facility Agreement, each occurrence of the word "Loan" by "Financial Assistance"
and by adding the word "and" between sub-paragraphs (d) and (e)".
(51) Article 10(8) shall be amended by replacing each occurrence of the
words "Loan Facility Agreement" by the following words "Financial Assistance
Facility Agreement".
(52) Article 10(10) shall be amended by replacing the words "Loan Facility
Agreement" by the following words "Financial Assistance Facility Agreement"
and the word "Borrower" by "Beneficiary Member State".
(53) Article 11(1) shall be amended by replacing the words "Loan Facility
Agreement" by the following words "Financial Assistance Facility Agreement", by
replacing the term "Loans" by "Financial Assistance" and by replacing the words
"Article 2(9)" by the words "Article 2(10)".
(54) Article 12 shall be amended by replacing each occurrence of the word
"Borrowers" by the words "Beneficiary Member States" and the word "Loans" by
"Financial Assistance".
(55) Article 13(1) shall be amended by replacing the word "Borrowers" by
"Beneficiary Member States".
(56) Article 13(3) shall be amended by replacing the words "Loan Facility
Agreements" by the following words: "Financial Assistance Facility Agreements".
(57) In Article 13(9) is added " - The terms "Financial Assistance Facility
Agreement" and "Financial Assistance" shall apply respectively to "Loan Facility
Agreements" and "Loans" entered into or disbursed by EFSF prior to the Effective
Date of the Amendments."
(58) A new Article 13(10) shall be added as follows
"Following the constitution of the European Stability Mechanism (the
"ESM"), EFSF may, with the approval of a decision of the euro-area Member
States acting with unanimity and after obtaining any requisite consents from
investors in Funding Instruments, transfer all and any of its rights,
obligations and liabilities, including under Financial Instruments, Financial
Assistance Facility Agreements and/or Financial Assistance, to ESM.".
(59) Annex 1 (List of Guarantor euro-area Member States with their
respective Guarantee Commitments) shall be amended as from the Effective Date
of the Amendments as set out in Annex 1 to this Amendment in respect of
Financial Instruments issued as from the Effective Date of the Amendments.
(60) Annex 2 (Contribution Key) shall be amended as from the Effective
Date of the Amendments as set out in Annex 2 to this Amendment in respect of
Financial Instruments issued as from the Effective Date of the Amendments.
(61) All other Articles and Annexes remain unchanged.
2. GOVERNING LAW AND JURISDICTION
(1) This Amendment and any non-contractual obligations arising out of or
in connection with it shall be governed by and shall be construed in accordance
with English law.
(2) Any dispute arising from or in the context of this Amendment shall be
settled amicably. In the absence of such amicable agreement, the euro-area
Member States agree that to the extent it constitutes a dispute between them only,
it shall be submitted to the exclusive jurisdiction of the Court of Justice of the
European Union. To the extent there is a dispute between one or more euroarea
Member States and EFSF, the Parties agree to submit the dispute to the exclusive
jurisdiction of the Courts of the Grand Duchy of Luxembourg.
3. ENTRY INTO FORCE AND TRANSITIONAL PROVISIONS
(1) The Parties agree that the amendments to the Framework Agreement
shall enter into force and become binding between EFSF and the Parties on the
date (the "Effective Date of the Amendments") all of the Parties have provided
written confirmation to EFSF substantially in the form of Annex 3 that they have
concluded all procedures necessary under their national laws to ensure that their
obligations under this Amendment shall come into full force and effect (an
"Amendment Confirmation").
(2) It is acknowledged and agreed that the amendments to the Framework
Agreement shall not alter or affect the rights and obligations of the Parties in
relation to any Funding Instruments issued by EFSF with the benefit of a
Guarantee issued under the Agreement prior to the Effective Date of the
Amendments (the "Existing Funding Instruments"). The rights and obligations
between the parties in relation to such Existing Funding Instruments shall continue
to be governed by the terms and conditions of the Framework Agreement which
applied prior to the Effective Date of the Amendments.
(3) It is acknowledged and agreed that the amendments to the Framework
Agreement shall not alter or affect the rights and obligations of the Parties in
relation to any Loans disbursed prior to the Effective Date of the Amendments (the
"Existing Loans"). The rights and obligations between the parties in relation to
such Existing Loans shall continue to be governed by the terms and conditions of
the Framework Agreement which applied prior to the Effective Date of the
Amendments.
(4) It is acknowledged and agreed that EFSF did not receive Amendment
Confirmations from all of the Parties in relation to the agreement to amend the
EFSF Framework Agreement signed between the parties in July 2011 (the "July
Amendment Agreement"). Accordingly, the July Amendment Agreement did not
enter into force and the parties agree that it shall be cancelled and of no legal
effect.
(5) It is acknowledged and agreed that the Amendment Confirmation of a
Member State may be of provisional application in accordance with the laws and
legislation of the relevant Member State.
4. EXECUTION OF THE AMENDMENT
This Amendment may be executed in any number of counterparts signed by
one or more of the Parties. The counterparts each form an integral part of the
original Amendment and the signature of the counterparts shall have the same
effect as if the signatures on the counterparts were on a single copy of the
Amendment.
EFSF shall promptly after the signature of this Amendment supply
conformed copies of the Amendment to each of the Parties, together with
consolidated versions of the Framework Agreement including the amendments
effected under this Amendment.
5. ANNEXES
The Annexes to this Amendment shall constitute an integral part hereof
1. List of Guarantors with their respective Guarantee Commitments;
2. Contribution Key; and
3. Template for Amendment Confirmation.
For the euro-area Member States,
Kingdom of Belgium
Represented by
Name
Title
Date
Federal Republic of Germany
Represented by
Name
Title
Date
Republic of Estonia
Represented by
Name
Title
Date
Ireland
Represented by
Name
Title
Date
Hellenic Republic
Represented by
Name
Title
Date
Kingdom of Spain
Represented by
Name
Title
Date
French Republic
Represented by
Name
Title
Date
Italian Republic
Represented by
Name
Title
Date
Republic of Cyprus
Represented by
Name
Title
Date
Grand Duchy of Luxembourg
Represented by
Name
Title
Date
Republic of Malta
Represented by
Name
Title
Date
Kingdom of the Netherlands
Represented by
Name
Title
Date
Republic of Austria
Represented by
Name
Title
Date
Portuguese Republic
Represented by
Name
Title
Date
Republic of Slovenia
Represented by
Name
Title
Date
Slovak Republic
Represented by
Name
Title
Date
Republic of Finland
Represented by
Name
Title
Date
For the EFSF
EUROPEAN FINANCIAL STABILITY FACILITY
Represented by
Name
Title
Date
ANNEX 1
LIST OF GUARANTOR EURO-AREA MEMBER STATES WITH THEIR
RESPECTIVE GUARANTEE COMMITMENTS AS FROM THE
EFFECTIVE DATE OF THE AMENDMENTS
Guarantee
Country
Commitments
EUR (millions)
27,031.99
Kingdom of Belgium
Federal Republic of Germany
211,045.90
Ireland
12,378.15 *
Kingdom of Spain
92,543.56
French Republic
158,487.53
Italian Republic
139,267.81
Republic of Cyprus
1,525.68
Grand Duchy of Luxembourg
1,946.94
Republic of Malta
704.33
Kingdom of the Netherlands
44,446.32
Republic of Austria
21,639.19
Portuguese Republic
19,507.26 *
Republic of Slovenia
3,664.30
Slovak Republic
7,727.57
Republic of Finland
13,974.03
Hellenic Republic
21,897.74 *
Republic of Estonia
1,994.86
Total Guarantee Commitments
779,783.14
* The Hellenic Republic, Ireland and the Portuguese Republic have become
Stepping-Out Guarantors. Portugal remains liable as Guarantor in respect of
Notes issued prior to the time it became a Stepping-Out Guarantor. The Republic
of Estonia is only a Guarantor in respect of Notes issued after the Effective Date of
the Amendments.
This means that as of the Effective Date of the Amendments the aggregate of
the active Guarantee Commitments for the Guarantors which are not Stepping-Out
Guarantors is EUR 726,000.00 million.
ANNEX 2
CONTRIBUTION KEY IN RESPECT OF FUNDING INSTRUMENTS
ISSUED OR ENTERED INTO AS FROM
THE EFFECTIVE DATE OF THE AMENDMENTS
ECB Capital
Member State
subscription
Contribution Key
key %
3.4666%
Kingdom of Belgium
2.4256
Federal Republic of Germany
18.9373
The definition "the European Financial Stability Facility
Framework Agreement" in article 2 of the principal Act shall be
substituted by the following new definition
" "the European Financial Stability Facility Framework
Agreement" means the agreement entered into in Luxembourg
on the 7th June 2010, which is reproduced in the First Schedule,
between the Euro Area Member States and the European
Financial Stability Facility regarding the terms and conditions
upon which the European Financial Stability Facility may make
loans to Euro Area Member States who are in financial
difficulties, finance such loans backed up by guarantees issued
by the other Euro Area Member States, and other matters
regulated therein, as amended by the European Financial
Stability Facility Framework Agreement signed in Malta by the
Minister of Finance on the 6th September, 2011, which
Agreement is reproduced in the Second Schedule. Both
agreements being reproduced in the English language;".
Loan Facility Agreement entered into in Brussels
on the 14th June 2011
Article 4 of the principal Act is to be amended as follows
Amendment of
article 4 of the
principal Act.
(a)
in the Maltese version of the marginal note thereof,
for the words "Ħlas u āruā ta’ garanziji" there shall be
substituted the words "Ħlas u ħruā ta’ garanziji"; and
(b) in the proviso to subarticle (1) thereof, for the words
"Euro 398.44 million" there shall be substituted the words "Euro
704.33 million".
Intercreditor Agreement entered into in Brussels on the 8th May 2010
".
Passed by the House of Representatives at Sitting No. 390 of the 10th
October, 2011.
M ICHAEL F RENDO
Speaker
Clerk to the House of Representatives
€12.60
Immediately after article 4 of the principal Act, there shall Addition of new
Schedules to the
be added the following new Schedules
principal Act.
"FIRST SCHEDULE
The European Financial Stability Facility Framework Agreement entered into in
Luxembourg on the 7th June 2010
Execution Version
EFSF FRAMEWORK AGREEMENT
between
KINGDOM OF BELGIUM
FEDERAL REPUBLIC OF GERMANY
IRELAND
KINGDOM OF SPAIN
FRENCH REPUBLIC
ITALIAN REPUBLIC
REPUBLIC OF CYPRUS
GRAND DUCHY OF LUXEMBOURG
REPUBLIC OF MALTA
KINGDOM OF THE NETHERLANDS
REPUBLIC OF AUSTRIA
PORTUGUESE REPUBLIC
REPUBLIC OF SLOVENIA
SLOVAK REPUBLIC
REPUBLIC OF FINLAND
HELLENIC REPUBLIC
AND
EUROPEAN FINANCIAL STABILITY FACILITY
7 June 2010
EFSF FRAMEWORK AGREEMENT (the "Agreement") is made by and
between
(A) Kingdom of Belgium, Federal Republic of Germany, Ireland, Kingdom
of Spain, French Republic, Italian Republic, Republic of Cyprus, Grand Duchy of
Luxembourg, Republic of Malta, Kingdom of the Netherlands, Republic of
Austria, Portuguese Republic, Republic of Slovenia, Slovak Republic, Republic of
Finland and the Hellenic Republic (the "euro-area Member States" or "EFSF
Shareholders"); and
(B) European Financial Stability Facility ("EFSF"), a société anonyme
incorporated in Luxembourg, with its registered office at 3, rue de la Congrégation,
L-1352 Luxembourg (the euro-area Member States and EFSF referred to hereafter
as the "Parties").
PREAMBLE
Whereas
(1) On 9 May 2010 a comprehensive package of measures has been decided
including (a) a Council Regulation establishing the European Financial
Stabilisation Mechanism ("EFSM") based on Article 122(2) of the Treaty on the
functioning of the European Union and (b) the EFSF in order to financially support
euro-area Member States in difficulties caused by exceptional circumstances
beyond such Member States’ control. It is envisaged that financial support to euro-
area Member States shall be provided by EFSF in conjunction with the IMF and
shall be on comparable terms to the stability support loans advanced by euro-area
Member States to the Hellenic Republic.
(2) EFSF has been incorporated on 7 June 2010 for the purpose of making
stability support to euro-area Member States in the form of loan facility
agreements ("Loan Facility Agreements") and loans ("Loans") made thereunder
of up to EUR 440 billion within a limited period of time. The availability of such
Loan Facility Agreements will be conditional upon the relevant euro-area Member
States which request such loans entering into memoranda of understanding (each
an "MoU") with the European Commission, acting on behalf of the euro-area
Member States, in relation to budgetary discipline and economic policy guidelines
and their compliance with the terms of such MoU. With respect to each Loan
Facility Agreement, the relevant beneficiary euro-area Member State shall be
referred to as the "Borrower".
(3) By a decision of the representatives of the governments of the 16 euro-
area Member States dated 7 June 2010, acting on the basis of the conclusions of
the 27 Member States of 9 May 2010, the Commission was tasked with carrying
out certain duties and functions as contemplated by the terms of this Agreement.
(4) EFSF shall finance the making of such loans by issuing or entering into
bonds, notes, commercial paper, debt securities or other financing arrangements
("Funding Instruments") which are backed by irrevocable and unconditional
guarantees (each a "Guarantee") of the euro-area Member States which shall act
as guarantors in respect of such Funding Instruments as contemplated by the terms
of this Agreement. The guarantors (the "Guarantors") of Funding Instruments
issued or entered into by EFSF shall be comprised of each euro-area Member State
(excluding any euro-area Member State which is or has become a Stepping-Out
Guarantor under Article 2(7) prior to the issue of such Funding Instruments).
(5) A political decision has been taken by all euro-area Member States to
provide Guarantee Commitments (as defined in Article 2(3)) pursuant to the terms
of this Agreement.
(6) The euro-area Member States and EFSF have entered into this
Agreement to set out the terms and conditions upon which EFSF may make Loans
to euro-area Member States, finance such Loans by issuing or entering into
Funding Instruments backed by Guarantees issued by the Guarantors, the terms
and conditions on which the Guarantors shall issue Guarantees in respect of the
Funding Instruments issued by or entered into by EFSF, the arrangements entered
into between them in the event that a Guarantor is required to pay under a
Guarantee more than its required proportion of liabilities in respect of a Funding
Instrument and certain other matters relating to EFSF.
Now, therefore, the Parties have agreed as follows
1. ENTRY INTO FORCE
(1) This Agreement (with the exception of the obligation of euro-area
Member States to issue Guarantees under this Agreement) shall, upon at least five
(5) euro-area Member States comprising at least two-thirds (2/3) of the total
guarantee commitments set out in Annex 1 (the "Total Guarantee
Commitments") providing written confirmation substantially in the form of
Annex 3 to EFSF that they have concluded all procedures necessary under their
respective national laws to ensure that their obligations under this Agreement shall
come into immediate force and effect (a "Commitment Confirmation"), enter
into force and become binding between EFSF and the euro-area Member Sates
providing such Commitment Confirmations.
(2) The obligation of euro-area Member States to issue Guarantees under
this Agreement shall enter into force and become binding between EFSF and the
euro-area Member States which have provided Commitment Confirmations only
when Commitment Confirmations have been received by EFSF from euro-area
Member States whose Guarantee Commitments represent in aggregate ninety per
cent (90%) or more of the Total Guarantee Commitments. Any euro-area Member
State which applies for stability support from the euro-area Member States or
which benefits from financial support under a similar programme or which is
already a Stepping-Out Guarantor shall be excluded in computing whether this
ninety per cent (90%) threshold of the Total Guarantee Commitments is satisfied.
(3) This Agreement and the obligation to provide Guarantees in accordance
with the terms of this Agreement shall enter into force and become binding on any
remaining euro-area Member States (which have not provided their Commitment
Confirmations at the time the Agreement or the obligation to provide Guarantees
comes into force pursuant to Article 1(1) or 1(2)) at the time when such euro-area
Member States provide their Commitment Confirmation to EFSF copies of which
should be addressed to the Commission.
2. GRANT OF LOANS,
FUNDING
INSTRUMENTS
AND
ISSUANCE OF GUARANTEES
(1) The euro-area Member States agree that in the event of a request made
by a euro-area Member State to the other euro-area Member States for a stability
support loan (i) the Commission (in liaison with the ECB and the IMF) shall be
hereby authorised to negotiate the MoU with the relevant Borrower which shall be
consistent with a decision the Council may adopt under Article 136 of the Treaty
on the functioning of the European Union following a proposal of the Commission
and the Commission shall be hereby authorised to finalise the terms of such MoU
and to sign such MoU with the Borrower on behalf of the euro-area Member States
once such MoU has been approved by the Eurogroup Working Group (unless an
MoU has been already entered into between the Borrower and the Commission
under the EFSM which MoU has been approved by all euro-area Member States in
which case this latter MoU shall apply, provided that it covers both EFSM and
EFSF stability support); (ii) following such approval of the relevant MoU, the
Commission, in liaison with the ECB, shall make a proposal to the Eurogroup
Working Group of the main terms of the Loan Facility Agreement to be proposed
to the Borrower based on its assessment of market conditions and provided that the
terms of such Loan Facility Agreement contain financial terms compatible with the
MoU and the compatibility of maturities with debt sustainability; (iii) following a
decision of the Eurogroup Working Group, EFSF (in conjunction with the
Eurogroup Working Group) shall negotiate the detailed, technical terms of the
Loan Facility Agreements under which Loans will, subject to the terms and
conditions set out therein, be made available to the relevant Borrower, provided
that such Loan Facility Agreements shall be substantially in the form of a template
Loan Facility Agreement which shall be approved by the euro-area Member States
for the purpose of this Agreement and the financial parameters of such Loan
Facility Agreements shall be based on the financial terms proposed by the
Commission, in liaison with the ECB, and approved by the Eurogroup Working
Group and (iv) EFSF shall collect, verify and hold in safe custody the conditions
precedent to such Loan Facility Agreements and the executed versions of all
related documents. The terms of Article 3(2) set out the basis upon which
decisions shall be made in relation to Loans to be made under an existing Loan
Facility Agreement. Given that EFSF is not a credit institution, Borrowers shall
represent and warrant in each Loan Facility Agreement that no regulatory
authorisation is required for EFSF to grant Loans to such Borrower under its
applicable national law or that an exemption to such regulatory authorisation
requirement exists under applicable national law. The Guarantors hereby authorise
EFSF to sign such Loan Facility Agreements, subject to the prior unanimous
approval by all of them participating in the relevant votes of Guarantors.
(2) In respect of each Loan Facility Agreement and the Loans to be made
thereunder, the euro-area Member States agree that EFSF (in consultation with the
Eurogroup Working Group) shall be authorised to structure and negotiate the terms
on which EFSF may issue or enter into Funding Instruments on a stand-alone basis
or pursuant to a debt issuance programme or programmes or facility (each an
"EFSF Programme(s)") to finance the making of Loans to Borrowers. So long as
market conditions permit and save as otherwise stated in this Agreement, such
Funding Instruments shall have substantially the same financial profile as the
related Loans (provided that (x) for operational reasons there will need to be
delays between issue dates and payment dates to facilitate the transfers of funds
and calling Guarantees and (y) notwithstanding the liability of each Guarantor to
pay any amounts of interest and principal due but unpaid under the Funding
Instruments, the recourse of investors against EFSF under the Funding Instruments
shall be limited to the assets of EFSF including, in particular, the amounts it
recovers in respect of the Loans. The interest rate which will apply to each Loan is
intended to cover the cost of funding incurred by EFSF and shall include a margin
(the "Margin") which shall provide remuneration for the Guarantors. The Service
Fee may be used to cover the operational costs of EFSF and any costs and fees
directly related to the issuance of Funding Instruments which have not otherwise
been charged to the relevant Borrower.
(3) In respect of Funding Instruments issued or entered into under an EFSF
Programme or on a stand-alone basis, each Guarantor shall be required to issue an
irrevocable and unconditional Guarantee in a form to be approved by the
Guarantors for the purpose of this Agreement and in an amount equal to the
product of (a) the percentage set out next to each Guarantor's name in the third
column (the "Contribution Key") in Annex 2 (as such percentage is adjusted from
time to time in accordance with the terms of this Agreement and/or to reflect any
euro-area Member State not yet having provided its Commitment Confirmation
during the implementation period pursuant to Article 1 and notified in writing by
EFSF to the Guarantors) (the "Adjusted Contribution Key Percentage"), (b)
120%, and (c) the obligations of EFSF (in respect of principal, interest or other
amounts due) in respect of the Funding Instruments issued or entered into by EFSF
on a stand-alone basis or under an EFSF Programme. If EFSF issues Funding
Instruments under an EFSF Programme, each Guarantor shall issue its Guarantee
to guarantee all Funding Instruments issued or entered into pursuant to the relevant
EFSF Programme. The Offering Materials or contractual documentation for each
issue or contracting of Funding Instruments made under an EFSF Programme shall
confirm which Guarantors have Guarantees which cover the relevant Funding
Instruments or issue or series thereof. EFSF may also request the Guarantors to
issue Guarantees under this Agreement for other purposes which are closely-linked
to an issue of Funding Instruments and which facilitates the obtaining and
maintenance of a high quality rating for Funding Instruments issued by EFSF and
efficient funding by EFSF. The decision to issue Guarantees for such other
purposes in connection with an EFSF Programme or a stand-alone issue of or entry
into Funding Instruments shall be taken by a unanimous decision of the
Guarantors. No Guarantor shall be required to issue Guarantees which would
result in it having a Guarantee Exposure in excess of its aggregate guarantee
commitment (its "Guarantee Commitment") set out alongside its name in Annex
1. For the purposes of this Agreement a Guarantor's "Guarantee Exposure" is
equal to the aggregate of (i) the amount of Guarantees which it has issued but
which are undrawn and (ii) the amount it has paid and not been reimbursed under
Guarantees it has issued under this Agreement. Accordingly, if an outstanding,
undrawn Guarantee expires or if an amount drawn under a Guarantee is
reimbursed this will reduce a Guarantor’s Guarantee Exposure and replenish its
capacity to issue Guarantees under this Agreement.
(4) (a)
The Guarantees shall irrevocably and unconditionally guarantee
the due payment of scheduled payments of interest and principal due on Funding
Instruments issued by EFSF. In the case of EFSF Programmes, the Guarantors
shall issue Guarantees which guarantee all series of Funding Instruments issued
from time to time under the relevant EFSF Programme. The Offering Materials
and/or contractual documentation of each series shall confirm which Guarantees
cover that series, in particular, if a Guarantor under the relevant EFSF Programme
has subsequently become a Stepping-out Guarantor and no longer guarantees
further issues or series under such EFSF Programme.
(b) The Guarantees may be issued to a bond trustee or other representative
of bondholders or creditors (a "Noteholder Representative") who shall be entitled
to make demands under the Guarantees on behalf of holders of Funding
Instruments and enforce the claims of holders of Funding Instruments so as to
facilitate the management of making demands on the Guarantees. The detailed
terms and conditions of each issue of Funding Instruments and the Guarantees
relating thereto shall be agreed by EFSF, subject to the approval of the Guarantors,
and shall be as described in the relevant Offering Materials (as defined in Article
4(1) applicable thereto) and applicable contractual documentation.
(5) A Guarantor shall only be required to issue a Guarantee in accordance
with this Agreement if
(a) it is issued in respect of Funding Instruments issued or entered into
under an EFSF Programme or on a stand-alone basis and such Funding
Instruments finance the making of Loan(s) approved in accordance with the terms
of this Agreement and the Articles of Association of EFSF or it is issued for such
other closely-linked purpose as are approved under Article 2(3);
(b) the Guarantee is issued to facilitate the financing under Loan Facility
Agreements entered into on or prior to 30 June 2013 (including the financing of
Loans made pursuant to an existing Loan Facility Agreement after such date and
any related issue of bonds or debt securities related thereto) and the Guarantee is in
any event issued on or before 30 June 2013;
(c) the Guarantee is in the form approved by euro-area Member States for
the purpose of this Agreement and the EFSF Programme;
(d) the liability of the Guarantor under such Guarantee is for a maximum
amount which complies with the terms of Article 2(3); and
(e) it is denominated in euros or such other currency as is approved by the
Guarantors for the purpose of this Agreement.
(6) The Guarantee Commitment of each Guarantor to provide Guarantees is
irrevocable and firm and binding. Each Guarantor will be required, subject to the
terms of this Agreement, to issue Guarantees up to its Guarantee Commitment for
the amounts to be determined by EFSF and at the dates specified by EFSF in order
to facilitate the issuance or entry into of Funding Instruments under the relevant
EFSF Programme or stand-alone Funding Instrument in each case in accordance
with the EFSF funding strategy.
(7) If a euro-area Member State encounters financial difficulties such that it
makes a demand for a stability support loan from EFSF, it may by written notice
together with supporting information satisfactory to the other Guarantors request
the other Guarantors (with a copy to the Commission, the Eurogroup Working
Group Chairman) to accept that the Guarantor in question does not participate in
issuing a Guarantee in respect of any further debt issuance by EFSF. The decision
of the euro-area Member States in relation to such a request is to be made at the
latest when they decide upon making any further Loan Facility Agreements or
further Loans.
(8) An up-front service fee (the "Service Fee") calculated as being 50 basis
points on the aggregate principal amount of each Loan shall be charged to each
Borrower and deducted from the cash amount to be remitted to the Borrower in
respect of each such Loan. In addition, the net present value (calculated on the
basis of the internal rate of return of the Funding Instruments financing such Loan
(or such other blended internal rate of return as is deemed appropriate in case of a
Diversified Funding Strategy), the "Discount Rate") of the anticipated Margin that
would accrue on each Loan to its scheduled maturity date shall be deducted from
the cash amount to be remitted to the Borrower in respect of such Loan. The
Service Fee and the net present value of the anticipated Margin, together with such
other amounts as EFSF decides to retain as an additional cash buffer, will be
deducted from the cash amount remitted to Borrower in respect of each Loan (such
that on the disbursement date (the "Disbursement Date") the Borrower receives
the net amount (the "Net Disbursement Amount")) but shall not reduce the
principal amount of such Loan that the Borrower is liable to repay and on which
interest accrues under the relevant Loan. These retained amounts shall be retained
to provide a cash reserve to be used as credit enhancement and otherwise as
described in Article 5 below. The "Cash Reserve" shall include these retained
amounts together with all income and investments earned by investment of these
amounts. The Cash Reserve shall be invested in accordance with investment
guidelines approved by the board of directors of EFSF.
(9) If, following the repayment of all Loans made under Loan Facility
Agreements and all Funding Instruments issued by or entered into by EFSF, there
remain amounts in the Cash Reserve (including amounts representing interest or
investment income earned by investment of the Cash Reserve), these amounts shall
be paid to the Guarantors as consideration for the issuance of their Guarantees.
EFSF shall maintain ledger accounts and other records of the amounts of Service
Fee and anticipated Margin retained in respect of each Loan Facility Agreement
and the amount of all Guarantees issued by each Guarantor pursuant to this
Agreement. These ledger accounts and records shall permit EFSF to calculate the
consideration due to each Guarantor in respect of the Guarantees issued under this
Agreement which shall be payable on a pro rata proportional basis to each
Guarantor by reference to its participation in all the Guarantees issued under this
Agreement.
(10) Euro-area Member States which are potential Borrowers may only
request and enter into Loan Facility Agreements in the period commencing on the
date this Agreement enters into force and ending on 30 June 2013 (provided that
Loans may be disbursed after this date under Loan Facility Agreements entered
into prior to this date).
(11) Following the execution of this Agreement, the Parties shall agree upon
forms of (i) the Guarantees, (ii) the Loan Facility Agreements, (iii) the
documentation for the Funding Instruments, (iv) the arrangements in respect of the
appointment of Noteholder Representatives, (v) the dealer and subscription
agreements for Funding Instruments and (vi) any agency or service level
agreement with EIB or any other agency, institution or person.
3. PREPARATION
AND
AUTHORISATION
OF
LOAN
DISBURSEMENTS
(1) Before each disbursement of a Loan under a Loan Facility Agreement,
the Commission will, in liaison with the ECB, present a report to the Eurogroup
Working Group analysing compliance by the relevant Borrower with the terms and
the conditions set out in the MoU and in the Council Decision (if any) relating to
it. The Guarantors will evaluate such compliance and will unanimously decide on
whether to permit disbursement of the relevant Loan. The first Loan to be made
available to a Borrower under a Loan Facility Agreement is released following the
initial signature of the relevant MoU and will not be the object of such a report.
(2) Following a request for funds (a "Request for Funds") from a
Borrower complying with the terms of the relevant Loan Facility Agreement and
requesting a Loan thereunder, the Guarantors shall (other than in respect of the
first Loan) consider the report of the Commission regarding the Borrower’s
compliance with the MoU and the relevant Council decision (if any). If, acting
unanimously, the Guarantors consider that the Borrower has complied with the
conditions to drawdown under the Loan Facility Agreement and are satisfied with
its compliance with the terms and conditions of the MoU then the Eurogroup
Working Group Chairman shall request in writing EFSF to make a proposal of
detailed terms of the Loan it would recommend to make to the Borrower within the
parameters of the Loan Facility Agreement, the MoU, taking into account debt
sustainability and the market situation for bond issuance. The EFSF proposal shall
specify the amount which EFSF is authorised to make available by way of a Loan
under the Loan Facility Agreement and on what terms including as to the amount
of the Loan, the Net Disbursement Amount, the term, the redemption schedule and
the interest rate (including the Margin) in relation to such Loan. If the Eurogroup
Working Group accepts this proposal the Eurogroup Working Group Chairman
shall request EFSF to communicate an acceptance notice (an "Acceptance
Notice") to the Borrower confirming the terms of the Loan.
(3) At the latest following the signature of a Loan Facility Agreement,
EFSF shall commence the process for the issuance of or entry into Funding
Instruments under the EFSF Programme(s) or otherwise and, to the extent
necessary, shall request the Guarantors to issue Guarantees in accordance with
Article 2 (above) such that EFSF has sufficient funds when needed to make
disbursements under the relevant Loan.
(4) If applicable, and prior to the delivery of any Acceptance Notice, the
Eurogroup Working Group Chairman shall communicate to the Commission and
EFSF whether any Guarantor has notified it that the circumstances described in
Article 2(7) apply to it and the decision of the euro-area Member States relating
thereto. The Eurogroup Working Group Chairman shall communicate the decisions
of the Guarantors to EFSF, the Commission and the euro-area Member States at
least thirty (30) Business Days prior to the date of any related issue of or entry into
Funding Instruments.
(5) On the relevant Disbursement Date, EFSF shall make the relevant Loan
available to the Borrower by making available the Net Disbursement Amount
through the accounts of EFSF and the relevant Borrower opened for the purpose of
the Loan Facility Agreement with the ECB.
4. ISSUANCE OF OR ENTRY INTO FUNDING INSTRUMENTS
(1) In compliance with its funding strategy, EFSF may issue or enter into
Funding Instruments benefitting from the Guarantees on a stand-alone basis or
shall establish one or more EFSF Programme(s) for the purpose of issuing Funding
Instruments benefitting from Guarantees which shall finance the making of Loans
in accordance with the terms of this Agreement. EFSF may establish a base
prospectus (the "Base Prospectus") for each EFSF Programme with each
individual issue of Funding Instruments being issued pursuant to final terms
("Final Terms") setting out the detailed financial terms of each issue.
Alternatively, EFSF may establish information memoranda (the "Information
Memoranda") for the purpose of issuing Funding Instruments (which would not
be prospectuses for the purposes of the Prospectus Directive 2003/71/EC). Any
Base Prospectus, Final Terms, prospectus, Information Memorandum or related
materials relating to the placement or syndication of Funding Instruments shall be
referred to as "Offering Materials". It shall also enter into relevant contractual
documentation relating to such Funding Instruments.
(2) EFSF shall devise standard terms and conditions for the Funding
Instruments issued or entered into by EFSF. These may include provisions for the
calling of Guarantees either by EFSF if it anticipates a shortfall prior to a
scheduled payment date or by the relevant Noteholder Representative (if EFSF has
failed to make a scheduled payment of interest or principal under a Funding
Instrument when due). The standard terms and conditions shall clarify that there is
no acceleration of Funding Instruments in the event that the Loan(s) financed by
such Funding Instruments are accelerated or pre-paid for whatever reason.
(3) In connection with the structuring and negotiation of Funding
Instruments on a stand-alone basis or under EFSF Programme(s) ESFS may
(a) appoint, liaise and negotiate with arranging banks, lead managers and
bookrunners;
(b) appoint, liaise and negotiate with rating agencies and rating agency
advisers and supply them with such data and documentation and make such
presentations as necessary to obtain requisite ratings;
(c) appoint, liaise and negotiate with paying agents, listing agents,
Noteholder Representative, lawyers and other professional advisers;
(d) appoint, liaise and negotiate with common depositaries and clearing
systems such as Euroclear and/or Clearstream for the settlement of Funding
Instruments;
(e) attend investor presentations and road shows to assist in the placement
or syndication of Funding Instruments pursuant to the EFSF Programme(s);
(f) negotiate, execute and sign all legal documentation related to the
Funding Instruments and any EFSF Programme(s); and
(g) generally do such other things necessary for the successful structuring
and implementation of the EFSF Programme(s) and the issuance of or entry into
Funding Instruments.
(4) EFSF shall, subject to market conditions and the terms of this Article 4,
fund Loans by the issuance of or entry into Funding Instruments on a matched
funding basis such that the Funding Instruments financing a Loan have
substantially the same financial profile as to amount, time of issue, currency,
repayment profile, final maturity and interest basis, provided that, to the extent
feasible, the scheduled payment dates for Loans shall be at least fourteen (14)
Business Days prior to the scheduled payment dates under the related Funding
Instruments to permit processing of payments.
(5) If, due to market condition or the volume of Funding Instruments to be
issued or entered into by EFSF under the EFSF Programme(s) it is not practicable
or feasible to issue or enter into Funding Instruments on a strict matched-funding
basis, EFSF may request the Guarantors to permit EFSF certain flexibilities as to
funding such that its funding is not matched to the Loans it makes, in particular as
to (a) currency of Funding Instruments, (b) timing for the issue or entry into of
Funding Instruments, (c) interest rate bases and/or (d) maturity and repayment
profile of the Funding Instruments to be issued or entered into (including the
possibility of issuing short term debt instruments, commercial paper or other
financing arrangements supported by Guarantees) and (e) the possibility of pre-
funding of Loans under an existing Loan Facility Agreement. The Guarantors,
acting unanimously, may permit EFSF to use a degree of funding flexibility and
shall specify within which parameters and limits EFSF may adopt a non-matched
funding strategy (a "Diversified Funding Strategy").
(6) Given that a Diversified Funding Strategy would require the
management of transformation and basis risks, in the event that a Diversified
Funding Strategy is authorised in relation to EFSF it may delegate the management
of such funding activities, related asset and liability management activities and the
conclusion of any related currency, interest rate or maturity mis-match hedging
instruments to one or more debt management agencies of euro-area Member State
or such other agencies or institutions as are approved unanimously by the
Guarantors which shall be entitled to be compensated at an arm's length
commercial rate for the provision of such services which remuneration shall
constitute an operating cost for EFSF.
CREDIT ENHANCEMENT, LIQUIDITY AND TREASURY
(1) The credit enhancement for the EFSF Programme shall include the
following elements
(a) the Guarantees and, in particular, the fact that the participation of each
Guarantor in issuing Guarantees shall be made on the basis of the Adjusted
Contribution Key Percentage and that the Guarantee issued by each Guarantor is
for 120% of its Adjusted Contribution Key Percentage of the amounts of the
relevant Funding Instruments;
(b) the Cash Reserve shall act as a cash buffer. The Cash Reserve shall,
pending its use, be invested in high quality liquid debt instruments. Upon
repayment of all Loans made by EFSF and Funding Instruments issued by EFSF,
the balance of the Cash Reserve shall be used firstly to repay any amounts paid by
Guarantors which have not been repaid out of recoveries from the relevant
underlying Borrowers and secondly, shall be paid to the Guarantors as
consideration for their issuance of Guarantees under this Agreement as described
in Article 2(9); and
(c) such other credit enhancement mechanisms as may be approved under
this Article 5.
(2) In the event that there is a delay or failure to pay by a Borrower of a
payment under a Loan and accordingly there is a shortfall in funds available to
meet a scheduled payment of interest or principal under a Funding Instrument
issued by EFSF then EFSF shall
(a) first, make a demand on a pro rata pari passu basis on the Guarantors
which have guaranteed such Funding Instrument up to 120% of their respective
Adjusted Contribution Key Percentage of the amount due but unpaid;
(b) second, if the steps taken in Article 5(2)(a) do not fully cover the
shortfall, to release an amount from the Cash Reserve to cover such shortfall; and
(c) third, take such other steps as may be available in the event that
additional credit enhancement mechanisms have been approved under Article 5(3).
(3) The euro-area Member States may by unanimous decision approve and
adopt such other credit enhancement mechanisms as they consider appropriate or,
as the case may be, modify the existing credit enhancement mechanisms in order
to enhance or to maintain the creditworthiness of the Funding Instruments issued
or contracted by EFSF or to enhance the efficiency of funding of EFSF. Such other
credit enhancement measures might include, amongst other techniques, the
provision of subordinated loans, warehousing arrangements, liquidity lines or
backstop facilities to EFSF or the issuance by EFSF of subordinated notes.
(4) If a Guarantor has failed to make a payment which is due and payable in
respect of a Guarantee and, as a consequence EFSF makes a withdrawal from the
Cash Reserve to cover the shortfall pursuant to Article 5(2)(b) then such Guarantor
shall reimburse such amount to EFSF on first written demand together with
interest on such amount at a rate equal to one month EURIBOR plus 500 basis
points from the date the amount is withdrawn from the Cash Reserve to the date
such Guarantor reimburses such amount to EFSF together with such accrued
interest. EFSF shall apply such reimbursed amounts (and the interest accrued
thereon) to replenish the Cash Reserve.
(5) In order to facilitate the availability of adequate liquidity for the funding
needs of EFSF
(a) each euro-area Member State will ensure that EFSF will be eligible for
receiving a counterparty limit for cash management operations of the debt
management operations of the debt management agency of such euro-area Member
State; and
(b) each euro-area Member State shall co-operate to assist EFSF to ensure
that its Funding Instruments comply with applicable criteria to be eligible as
collateral in Eurosystem operations.
(6) In order to minimise any negative-carry costs in the event of any
Diversified Funding Strategy EFSF shall be entitled to make deposits or other
placements which, in accordance with the investment strategy agreed by the board
of directors of EFSF, minimise the risk of a funding mis-match or negative-carry
costs.
CLAIMS UNDER A GUARANTEE
(1) If EFSF becomes aware that it has not received in full a scheduled
payment under a Loan and such shortfall will give rise to a shortfall in available
funds to make a scheduled payment of principal or interest under Funding
Instruments issued by EFSF or scheduled payment due from EFSF under any other
instrument or agreement which benefits from a Guarantee issued under this
Agreement, it shall immediately notify in writing the Chairman of the Eurogroup
Working Group, the Commission and each Guarantor and inform each Guarantor
of its share of the shortfall under the terms of this Agreement and the relevant
Guarantee and demand in writing each Guarantor to remit to EFSF its share of
such shortfall on the date (the "Guarantee Payment Date") which is at least two
(2) Business Days prior to the scheduled date for payment of the relevant amounts
by EFSF (an "EFSF Guarantee Demand").
(2) Each Guarantor shall remit to EFSF (or, if so specified in the relevant
documentation, to the paying agent of the relevant Funding Instrument) its share of
the amount demanded in the EFSF Guarantee Demand addressed to it by EFSF in
cleared funds on the Guarantee Payment Date.
(3) In the event that EFSF fails to pay a scheduled payment of interest or a
scheduled payment of principal on a date when such amount is due and payable
under a Funding Instrument issued by EFSF then the relevant Noteholder
Representative shall be entitled to demand in writing (a "Noteholder
Representative Guarantee Demand") the Guarantors (with a copy to EFSF) to
pay the unpaid amount of such scheduled payment of interest and/or such
scheduled payment of principal. Similarly, in the event of a failure by EFSF to pay
a scheduled payment under any other instrument or agreement entered into
between EFSF and a counterparty (a "Counterparty") which benefits from a
Guarantee issued under this Agreement (which has been issued for a purpose
closely-linked to an issue of Funding Instruments pursuant to Article 2(3)) the
relevant Counterparty shall be entitled to demand in writing (a "Counterparty
Guarantee Demand") the Guarantors (with a copy to EFSF) the unpaid amount of
such scheduled payment. In the event of receipt by the Guarantors and EFSF of a
Noteholder Representative Guarantee Demand or a Counterparty Guarantee
Demand each Guarantor shall in accordance with the terms of its Guarantee remit
in cleared funds its share of the amount duly demanded in such Noteholder
Representative Guarantee Demand or, as the case may be such Counterparty
Guarantee Demand. The detailed payment mechanics for co-ordinating payments
under the Guarantees shall be set out in the documentation for the issue of Funding
Instruments and the related Guarantees.
(4) In the event that a shortfall of receipts under a Loan gives rise both to an
EFSF Guarantee Demand and a Noteholder Representative Guarantee Demand (or
Counterparty Guarantee Demand) the relevant Guarantors shall only be liable to
make one payment under their respective Guarantees, without double counting.
(5) The Parties acknowledge and agree that each Guarantor shall be entitled
to make payment in respect of any EFSF Guarantee Demand, Noteholder
Representative Guarantee Demand or Counterparty Guarantee Demand which
appears to be valid on its face without any reference by it to EFSF or any other
Party or any other investigation or enquiry. EFSF irrevocably authorises each
Guarantor to comply with any Guarantee Demand.
(6) EFSF and each of the other Parties acknowledges and agrees that each
Guarantor
(i) is not obliged to carry out any investigation or seek any confirmation
prior to paying a claim;
(ii) is not concerned with
(1) the legality of a claim or any underlying transaction or any setoff,
defence or counterclaim which may be available to any person;
(2)
any amendment to any underlying document; or
(3)
any unenforceability, illegality or invalidity of any document or
security.
(7) EFSF shall be liable to reimburse each Guarantor in respect of any
claim paid in respect of a Guarantee and shall indemnify each Guarantor in respect
of any loss or liability incurred by a Guarantor in respect of a Guarantee. EFSF’s
reimbursement obligation is subject to and limited to the extent of funds actually
received from the underlying Borrowers in respect of the Loans which gave rise to
a shortfall of funds.
(8) In addition to the reimbursement obligation of EFSF under Article 6(5),
if a Guarantor makes a payment under its Guarantee, EFSF shall assign and
transfer to the relevant Guarantor an amount of EFSF’s rights and interests under
the relevant Loan corresponding to the shortfall in payments made by the
Borrower and the related payment made by the Guarantor under the Guarantee.
EFSF shall remain servicer of such portion of the Loan which has been assigned
and transferred to the relevant Guarantor so as to facilitate the co-ordinated
management of the Loan and the treatment of all Guarantors on a pari passu basis.
(9) All Guarantors shall rank equally and pari passu amongst themselves,
in particular in respect of reimbursement of amounts paid by them under their
Guarantees provided that, if a Guarantor owes sums to EFSF pursuant to Article
5(4) or sums to the other Guarantors pursuant to Article 7(1), sums recovered from
underlying Borrowers which would otherwise be due from EFSF to such
Guarantor shall be applied to repaying the amount due under 5(4) or paying the
amount due to other Guarantors under Article 7(1) in priority to being applied to
reimburse such Guarantor.
CONTRIBUTION BETWEEN GUARANTORS
(1) (a)
If a Guarantor meets claims or demands in respect of any
Guarantee it has issued or incurs costs, losses, expenses or liabilities in connection
therewith ("Guarantee Liabilities"), and the aggregate amount of Guarantee
Liabilities it makes or incurs exceeds its Required Proportion for the given
Guarantee then it shall be entitled to be indemnified and receive contribution, upon
first written demand, from the other Guarantors, in respect of such Guarantee
Liabilities such that each Guarantor ultimately bears only its Required Proportion
of such aggregate Guarantee Liabilities, provided that if the aggregate Guarantee
Liabilities of any Guarantor in respect of any Guarantee is not reduced to its
Required Proportion within three (3) Business Days, the other Guarantors
(excluding Stepping-Out Guarantors) shall indemnify such Guarantor in an amount
such that the excess over the Required Portion is allocated to each of the
Guarantors (excluding Stepping-Out Guarantors) on a pro rata basis. The
"Required Proportion" is equal to the Adjusted Contribution Key Percentage
applicable to the relevant Guarantee. Any indemnity or contribution payment from
one Guarantor to another under this Article 7 shall bear interest at a rate equal to
one month EURIBOR plus 500 basis points which shall accrue from the date of
demand of such payment to the date such payment is received by such Guarantor.
(b) The provisions of this Article 7 shall apply mutatis mutandis if a euro-
area Member State issues any Guarantees according to an Adjusted Contribution
Key Percentage in excess of that which would apply to it once 100% Total
Guarantee Commitments have been obtained provided that the term "Guarantor"
shall include any euro-area Member State which has not yet provided its
Commitment Confirmation prior to EFSF issuing or entering into the relevant
Funding Instrument.
(2) The obligations of each Guarantor to make contributions or indemnity
payments under this Article are continuing obligations which extend to the
ultimate balance of sums due regardless of any intermediate payment or discharge
in whole or in part.
(3) The indemnity and contribution obligations of any Guarantor under this
Article will not be affected by any act, omission, matter or thing which, but for this
Article, would reduce, release or prejudice any of its obligations under this Article
(without limitation and whether or not known to it or any other person) including
(i)
any time, waiver or consent granted to, or composition with, any
person;
(ii) the release of any person under the terms of any composition or
arrangement;
(iii) the taking, variation, compromise, exchange, renewal or release of, or
refusal or neglect to perfect, take up or enforce, any rights against, or security over
assets of, any person; or any non-presentation or non-observance of any formality
or other requirement in respect of any instrument or any failure to realise the full
value of any security;
(iv) any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of any person;
(v) any amendment (however fundamental) or replacement of any Loan
Facility Agreement, Loan or any document or security;
(vi) any unenforceability, illegality or invalidity of any obligation of any
person under any document or security; or
(vii) any insolvency or similar proceedings.
CALCULATIONS AND ADJUSTMENT OF THE GUARANTEES
(1) The Parties agree that EFSF may appoint EIB (or such other agency,
institution, EU institution or financial institution as is approved unanimously by
the Guarantors) with the task of making the calculations for the purposes of this
Agreement, each Loan Facility Agreement, the financing of EFSF by issuing or
entering into Funding Instruments (or otherwise) and the Guarantees. If EIB (or
such other agency, institution, EU institution or financial institution) accepts such
appointment, it shall calculate the interest rate for each Loan in accordance with
the terms of the relevant Loan Facility Agreement, calculate the amounts payable
on each interest payment date and notify the relevant Borrower and EFSF thereof
and make all such other calculations and notifications as are necessary for the
purposes of this Agreement, the Guarantees and the Funding Instruments.
(2) In the event that a Guarantor experiences severe financial difficulties
and requests a stability support loan or benefits from financial support under a
similar programme, it (the "Stepping-Out Guarantor") may request the other
Guarantors to suspend its commitment to provide further Guarantees under this
Agreement. The remaining Guarantors, acting unanimously and meeting via the
Eurogroup Working Group may decide to accept such a request and in this event,
the Stepping-Out Guarantor shall not be required to issue its Guarantee in respect
of any further issues of or entry into Funding Instruments by EFSF and any further
Guarantees to be issued under this Agreement shall be issued by the remaining
Guarantors and the Adjusted Contribution Key Percentage for the issuance of
further Guarantees shall be adjusted accordingly. Such adjustments shall not affect
the liability of the Stepping-Out Guarantor under existing Guarantees. It is
acknowledged and agreed that the Hellenic Republic is deemed to be a Stepping-
Out Guarantor with effect from the entry into force of this Agreement.
BREACH OF OBLIGATIONS UNDER A LOAN FACILITY
AGREEMENT AND AMENDMENTS AND/OR WAIVERS
(1) If EFSF becomes aware of a breach of an obligation under a Loan
Facility Agreement, it shall promptly inform the Guarantors (through the
Eurogroup Working Group Chairman), the Commission and the ECB about this
situation and shall propose how to react to it. The Euro Working Group Chairman
will coordinate the position of the Guarantors and will inform EFSF, the
Commission and the ECB of the decision taken. EFSF will thereafter implement
the decision in accordance with the relevant Loan Facility Agreement.
(2) If EFSF becomes aware of a situation where amendments, a
restructuring and/or waivers relating to any Loan made under a Loan Facility
Agreement may become necessary, it shall inform the Guarantors through the
Eurogroup Working Group Chairman, the Commission and the ECB about this
situation and shall propose how to react to it. The Eurogroup Working Group
Chairman will coordinate the position of the Guarantors and will inform EFSF, the
Commission and the ECB of the decision taken. EFSF will thereafter implement
the decision and, following instructions of the Guarantors, negotiate and sign a
corresponding amendment, a restructuring or waiver or a new loan agreement with
the relevant Borrower or any other arrangement needed.
(3) In other cases than those referred to in Article 9(1) and 9(2), if EFSF
becomes aware of a situation where there is a need for the Guarantors to express an
opinion or take an action in relation to a Loan Facility Agreement, it shall inform
the Guarantors through the Eurogroup Working Group Chairman about this
situation, and shall propose how to react to it. The Eurogroup Working Group
Chairman will coordinate the position of the Guarantors and will inform EFSF, the
Commission and the ECB of the decision taken. EFSF will thereafter implement
the decision taken in whichever form is needed.
(4) In the event that the euro-area Member States consent to the
modification of any MoU entered into with a Borrower, the Commission shall be
authorised to sign the amendment(s) to such MoU on behalf of the euro-area
Member States.
EFSF, INTER-GUARANTOR DECISIONS, DIRECTORS AND
GOVERNANCE
(1) EFSF shall have a board of directors consisting of as many directors as
there are EFSF Shareholders. Each EFSF Shareholder shall be entitled to propose
for nomination one person to act as a director of EFSF and the other EFSF
Shareholders hereby irrevocably undertake that they shall use their votes as
shareholders of EFSF in the relevant general meetings to approve as a director the
person proposed by such euro-area Member State. They shall equally use their
votes as EFSF Shareholders to remove a person as director of EFSF if this is so
requested by the euro-area member State which proposed such director for
nomination.
(2) Each EFSF Shareholder shall propose for nomination to the board of
directors of EFSF its representative in the Eurogroup Working Group from time to
time (or such person’s alternate as representative on such group). The Commission
and ECB shall each be entitled to appoint an observer who may take part in the
meetings of the board of directors and may present its observations, without
however having the power to vote. The board of directors may permit other
institutions of the European Union to appoint such observers.
(3) In the event of a vacancy of a member of the board of directors each
euro-area Member State shall ensure that the member of the Board nominated upon
its proposal approves as a replacement director the person proposed for nomination
by the relevant euro-area Member State which does not have a director nominated
upon its proposal.
(4) The euro-area Member States acknowledge and agree that, in the event
of a vote of the board of directors of EFSF, each director which has been proposed
for nomination by a euro-area Member State shall have a weighted number of the
total number of votes which corresponds to the number of shares which his/her
nominating euro-area Member State holds in the issued share capital of EFSF.
(5) The Guarantors agree that the following matters affecting their roles and
liabilities as Guarantors shall require to be approved by them on a unanimous
basis
(a) decisions in relation to the grant of a Loan Facility Agreement to a euro-
area Member State including the approval of the relevant MoU and Loan Facility
Agreement;
(b) decisions regarding the disbursement of Loans under an existing Loan
Facility Agreement in particular as to whether conditionality criteria for a
disbursement are satisfied on the basis of a report of the Commission;
(c) any modification to this Agreement including as to the availability
period to grant Loan Facility Agreements;
(d) any modification to the following terms of any Loan Facility
Agreement: aggregate principal amount of a Loan Facility Agreement, availability
period, repayment profile or interest rate of any outstanding Loan;
(e) the terms of the EFSF Programme, the programme size and the approval
of any Offering Materials;
(f) any decision to permit an existing Guarantor to cease to issue further
guarantees;
(g) significant changes to the credit enhancement structure;
(h) the funding strategy of each EFSF Programme and any decision to
permit a Diversified Funding Strategy (including the manner in which EFSF
allocates its operating costs and the funding costs of Funding Instruments to Loans
and Loan Facility Agreements if a Diversified Funding Strategy is adopted); or
(i) any increase in the aggregate amount of Guarantees which might be
issued under this Agreement.
For the purpose of this Article 10(5) and any other provision of this
Agreement which requires a unanimous decision of the Guarantors, unanimity
means a positive or negative vote of all those Guarantors which are present and
participate (by voting positively or negatively) in the relevant decision (ignoring
any abstentions or absences) provided that any Guarantor which is no longer
issuing new Guarantees (in particular, the Stepping-Out Guarantors) shall not be
entitled to vote on any decision to make a new Loan Facility Agreement, a new
Loan or a new issuance of Funding Instruments which are not guaranteed by it
provided that it shall continue to have the right to vote on decisions in relation to
Loans or Funding Instruments in respect of which it has issued a Guarantee which
remains outstanding. It is a condition precedent to the validity of any such vote
that a quorum of a majority of Guarantors able to vote whose Guarantee
Commitments represent no less than 2/3 of the Total Guaranteed Commitments are
present at the meeting.
(6) The Guarantors agree that all matters which are not reserved to
unanimity decision of the Guarantors pursuant to Article 10(5) (above) or
unanimity decision of the euro-area Member States pursuant to Article 10(7)
(below) and, in particular, the following matters affecting their roles and liabilities
as Guarantors shall be decided by a majority of Guarantors (excluding however the
Stepping-Out Guarantors) (i) whose Guarantee Commitments represent 2/3 of the
Total Guarantee Commitments (in the event that no Guarantees have been issued)
or (ii) if Guarantees have been issued, 2/3 of the aggregate maximum face amount
of Guarantees which have been issued and remain outstanding provided that, in
calculating the satisfaction of this threshold the face amount of Guarantees of a
Guarantor which is a Stepped-Out Obligor or which has failed to pay under a
Guarantee shall not be taken into account (a "2/3 Majority")
(a) all decisions in relation to existing Loan Facility Agreements or Loans
which are not specifically reserved to unanimity pursuant to Article 10(5)
including decisions on breaches, waivers, restructurings and whether to declare
defaults in relation to Loan Facility Agreements or Loans;
(b) issuances under an existing EFSF Programme (which programme has
been approved unanimously by the Guarantors);
(c) operational matters in relation to debt issuance (including appointment
of arrangers, lead managers, rating agents, trustees etc);
(d) detailed implementation of an approved Diversified Funding Strategy;
(e) detailed implementation of any additional credit enhancement approved
pursuant to Article 10(5).
The proviso to Article 10(5) relating to euro-area Member States which no
longer issue new Guarantees and/or are Stepping-Out Guarantors shall apply to
votes on decisions within the scope of this Article 10(6).
(7) The following corporate matters in relation to EFSF shall require the
unanimous decision of all euro-area Member States
-
increases in authorized and/or issued and paid-up share capital;
-
increase in the level of commitments to subscribe for share capital;
-
reductions in share capital;
-
dividends;
-
employment of the CEO of the EFSF;
-
approving accounts;
-
prolonging duration of company;
-
liquidation;
-
changes to the Articles of Association;
-
any other matter not specifically dealt with in the Articles of
Association or in this Agreement.
(8) The Guarantors or the euro-area Member States (as the case may be)
shall take the decisions affecting the Guarantors and EFSF contemplated by
Articles 10(5), (6) and (7) at meetings within the framework of the Eurogroup with
the possibility to delegate the decision-making to the Eurogroup Working Group.
All their decisions shall be communicated in writing by the Eurogroup Working
Group Chairman to EFSF. For such decision-making, the Commission provides
input on matters relating, in particular, to the MoU and the terms and conditions of
the Loan Facility Agreements and other policy issues. The EFSF shall provide
input relating, in particular, to the implementation of the Loan Facility
Agreements, the issue of or entry into Financial Instruments and its general
corporate matters.
(9) Each euro-area Member State hereby undertakes to the other euro-area
Member States that it shall vote as shareholder of EFSF consistently with the
decisions taken by the requisite majority of Guarantors or euro-area Member
States (as the case may be) within the framework of such Eurogroup meetings and
that it shall ensure that the director which has been proposed for nomination to the
board of EFSF by it acts consistently with such decisions.
(10) Any decisions by the euro-area Member States to approve any MoU
relating to a Loan Facility Agreement and Borrower and regarding any proposed
modification to an MoU shall be taken by them acting unanimously.
(11) Euro-area Member States may, to the extent permissible under their
national laws, provide indemnities to the persons proposed by them to be
nominated as directors of EFSF.
(12) In the event that euro-area Member States agree unanimously to
increase the issued paid-up capital of EFSF, each euro-area Member State shall
subscribe and pay in full a percentage of such increase in paid up capital equal to
its Contribution Key percentage of such increase in paid-up capital on or prior to
the date specified by EFSF.
(13) Matters referred to decisions by euro-area Member State or Guarantors
under this Agreement shall be decided as soon as reasonably practicable and
necessary. In due course, operational guidelines may be adopted which may set out
timelines for decisions to be taken in relation to this Agreement.
TERM AND LIQUIDATION OF EFSF
(1) This Agreement shall remain in full force and effect so long as there are
amounts outstanding under any Loan Facility Agreements or Funding Instruments
issued by EFSF under an EFSF Programme or under any reimbursement amounts
due to Guarantors.
(2) The euro-area Member States undertake that they shall liquidate EFSF
in accordance with its Articles of Association on the earliest date after 30 June
2013 on which there are no longer Loans outstanding to a euro-area Member State
and all Funding Instruments issued by EFSF and any reimbursement amounts due
to Guarantors have been repaid in full.
(3) In the event that there are any residual liabilities of EFSF on its
liquidation the euro-area Member States shall in a final meeting of shareholders
decide on what basis these may be divided between the euro-area Member States.
(4) In the event there is a surplus on liquidation of EFSF it shall be
distributed to its shareholders on a pro rata basis calculated by reference to their
participation in the share capital of EFSF.
Prior to the determination of whether there is such a surplus
(a) the credit balance of the Cash Reserve shall be paid to the Guarantors as
described in Article 2(9); and
(b) any operating profit or surplus derived by EFSF which results from its
issuance of Funding Instruments guaranteed by the Guarantors shall be paid as
additional remuneration to the Guarantors by reference to their respective
Adjusted Contribution Key Percentage.
APPOINTMENT
OF
EIB,
ECB,
OUTSOURCING
AND
DELEGATION
(1) EFSF may appoint EIB (or such other agencies, institution, EU
institution, financial institution or other persons as is approved unanimously by the
euro-area Member States) for the purpose of
(a) managing the receipt of funds from investors following the issue of
bonds or securities under an EFSF Programme, the management of the
transmission of these funds to Borrowers in the form of Loans and the receipt of
funds from Borrowers and the application of such funds to meet scheduled
payments of principal and interest under the bonds and debt securities and,
following the making of payments under a Guarantee, the management of funds
received from Borrowers and the distribution of reimbursement amounts to the
Guarantors;
(b) the related management of the treasury of EFSF including in particular
the Cash Reserve and any funds received by way of early repayment or
prepayment of Loans pending the application of such funds to repay Funding
Instruments;
(c) such other related cash and treasury management tasks as may be
delegated from time to time;
(d) providing legal services, accounting services, human resources services,
facilities management, procurement services, internal audit and such other services
as require outsourcing and/or logistical support.
These appointments may be effected pursuant to a Service Level Contract
between EFSF and EIB (or the relevant agency or institution).
(2) EFSF may contract the ECB to act as its paying agent. EFSF may
appoint ECB (or another agency, institution, EU institution, financial institution or
other persons approved unanimously by the Guarantors) to maintain its bank and
securities accounts.
(3) EFSF shall, in the event of the adoption of a Diversified Funding
Strategy and subject to the unanimous approval of the Guarantors (other than
Stepping-Out Guarantors), be entitled to and may delegate asset and liability
management functions and the other activities and functions described in Article
4(6) to one or more debt management agencies of a euro-area Member State or
such other agencies, institutions, EU institutions or financial institutions as are
approved unanimously by the Guarantors.
(4) EFSF shall be entitled to delegate and/or outsource on arm's length
commercial terms to any agency, institution, EU institution, financial institution or
other persons such other functions as its board of directors consider desirable for
the efficient discharge of its functions.
ADMINISTRATIVE PROVISIONS
(1) The operating and out-of-pocket costs of EFSF shall be paid by EFSF
out of its general revenues and resources. Fees and expenses directly related to
funding may be re-invoiced to the relevant Borrowers (as appropriate).
(2) Upon the incorporation of EFSF it shall assume full responsibility for
all costs and expenses incurred in its setting-up and incorporation. In addition, it
shall assume all liabilities and obligations (including indemnity obligations) under
contracts and arrangements entered into on its behalf and for its benefit (whether
by a shareholder or a third party) prior to its incorporation.
(3) EFSF shall report to the euro-area Member States and the Commission
on the outstanding claims and liabilities under the Loan Facility Agreements,
EFSF Funding Instrument issues and the Guarantees on a quarterly basis.
(4) EFSF will report to the Guarantors and request instructions from the
Eurogroup Working Group Chairman regarding unsettled claims and liabilities or
any other issues that may arise under this Agreement or in connection with any
Guarantee.
(5) The Parties shall not assign or transfer any of their rights or obligations
under this Agreement without the prior written consent of all the other Parties to
this Agreement.
(6) (a)
The euro-area Member States hereby agree that the shares they
hold in EFSF cannot be transferred by any EFSF Shareholder during a period of 10
(ten) years from the date of acquisition of the shares by the relevant EFSF
Shareholder except with the unanimous consent of all EFSF Shareholders. Such
restriction does not apply to (i) the initial transfer by the sole founding shareholder
(if any) to the other euro-area Member States and (ii) proportionate transfers by
each EFSF Shareholder to any new euro-area Member State which adopts the Euro
as its currency after the incorporation of the Company.
(b) In the event that a euro-area Member State wishes to dispose of its
shares in EFSF after expiry of the lock-up period in Article 6.4 of the Articles of
Association of EFSF, it shall offer such shares to be purchased by the other
shareholders of EFSF on a pro rata basis to their shareholdings in EFSF. Any
shares which are not purchased by a shareholder to whom they are offered may be
offered to and acquired by any other EFSF Shareholder. If no EFSF Shareholder
wishes to purchase such shares then, to the extent it has funds available for this
purpose, EFSF may acquire such shares at their fair market value.
(7) In the event that a new country becomes a euro-area Member State, the
Parties hereto shall permit such new euro-area Member State to become a
shareholder of EFSF by receiving a transfer of shares from other shareholders of
EFSF such that its aggregate percentage holding of shares in EFSF corresponds
with its Contribution Key and to adhere to the terms of this Agreement. The Parties
shall negotiate in good faith as to the basis upon which such new adhering euro-
area Member State shall accede to this Agreement.
(8) In the event that one euro-area Member State incorporates EFSF, it shall
promptly upon execution and entry into force of this Agreement transfer shares to
the other euro-area Member States such that their respective percentage holdings
of shares in EFSF corresponds with their respective Contribution Keys.
(9) The terms
-
"Business Day" means a day on which Target 2 is open for settlement of
payments in Euro.
-
"Target 2" means the Trans-European Automated Real-Time Gross
Settlement Express Transfer payment system which utilises a single shared
platform and which was launched on 19 November 2007.
COMMUNICATIONS
All notices in relation to this Agreement shall be validly given if in writing
and sent to the addresses and contact details to be set out in the operating
guidelines which shall be adopted by the Parties for the purpose of this Agreement.
MISCELLANEOUS
(1) If any one or more of the provisions contained in this Agreement should
be or become fully or in part invalid, illegal or unenforceable in any respect under
any applicable law, the validity, legality and enforceability of the remaining
provisions contained in this Agreement shall not be affected or impaired thereby.
Provisions which are fully or in part invalid, illegal or unenforceable shall be
interpreted and thus implemented according to the spirit and purpose of this
Agreement.
(2) The Preamble to this Agreement forms an integral part of this
Agreement.
(3) Each of the Parties hereby irrevocably and unconditionally waives all
immunity to which it is or may become entitled, in respect of itself or its assets or
revenues, from legal proceedings in relation to this Agreement, including, without
limitation, immunity from suit, judgment or other order, from attachment, arrest,
detention or injunction prior to judgment, and from any form of execution and
enforcement against it, its assets or revenues after judgment to the extent not
prohibited by mandatory law.
(4) A person who is not a party to this Agreement shall not be entitled
under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the
benefit of any term of this Agreement.
(5) This Agreement may be amended by the Parties in writing.
GOVERNING LAW AND JURISDICTION
(1) This Agreement and any non-contractual obligations arising out of or in
connection with it shall be governed by and shall be construed in accordance with
English law.
(2) Any dispute arising from or in the context of this Agreement shall be
settled amicably. In the absence of such amicable agreement, the euro-area
Member States agree that to the extent it constitutes a dispute between them only,
it shall be submitted to the exclusive jurisdiction of the Court of Justice of the
European Union. To the extent there is a dispute between one or more euro-area
Member States and EFSF, the Parties agree to submit the dispute to the exclusive
jurisdiction of the Courts of the Grand Duchy of Luxembourg.
EXECUTION OF THE AGREEMENT
This Agreement may be executed in any number of counterparts signed by
one or more of the Parties. The counterparts each form an integral part of the
original Agreement and the signature of the counterparts shall have the same effect
as if the signatures on the counterparts were on a single copy of the Agreement.
EFSF is authorised to promptly after the signature of this Agreement supply
conformed copies of the Agreement to each of the Parties.
ANNEXES
The Annexes to this Agreement shall constitute an integral part thereof
1. List of Guarantors with their respective Guarantee Commitments;
2. Contribution Key; and
3. Template Commitment Confirmation.
Signed in Luxembourg on 7 June 2010
For the euro-area Member States,
Kingdom of Belgium,
represented by Vice Prime Minister and Minister of Finance
- signed -
Didier Reynders
Federal Republic of Germany,
represented by Minister Dr. Wolfgang Schäuble
- signed -
Ireland,
represented by Mr. Brian Lenihan, T.D., Minister for Finance
- signed -
Kingdom of Spain,
represented by Minister of Economy and Finance
- signed -
Elena Salgado Mendez
French Republic,
represented by Minister Christine Lagarde
Ministre de l’Economie, de l’Industrie et de l’Emploi
- signed -
Italian Republic,
represented by Minister Giulio Tremonti, Ministro dell'economia e delle
finanze
- signed -
Minister Giulio Tremonti
Republic of Cyprus,
represented by Minister of Finance
- signed -
Mr. Charilaos Stavrakis
Grand Duchy of Luxembourg,
represented by Minister
- signed -
Luc Frieden
Republic of Malta,
represented by Minister Tonio Fenech
Minister for Finance the Economy and Investment
- signed -
Kingdom of the Netherlands,
represented by Minister of Finance
- signed -
Mr. drs. J.C. de Jager
Republic of Austria,
represented by Federal Minister of Finance
- signed -
Josef Pröll
Portuguese Republic,
represented by Minister of State and Finance, Fernando Teixeira dos Santos
- signed -
Republic of Slovenia,
represented by Minister of Finance
- signed -
Franc Križanic
Slovak Republic,
represented by Minister Ján Pociatek
- signed -
Republic of Finland,
represented by Minister of Finance
- signed -
Jyrki Katainen
Hellenic Republic
Represented by Minister of Finance
- signed -
Minister Giorgos Papakonstantinou
For the EFSF
EUROPEAN FINANCIAL STABILITY FACILITY
Represented by its sole Director
- signed -
M Georges Heinrich
ANNEX 1
LIST OF GUARANTOR EURO-AREA MEMBER STATES WITH THEIR
RESPECTIVE GUARANTEE COMMITMENTS
ECB Capital
Member State
subscription
key %
Kingdom of Belgium
2.4256
Federal Republic of Germany
119,390.07
Ireland
7,002.40
Kingdom of Spain
52,352.51
French Republic
89,657.45
Italian Republic
78,784.72
Republic of Cyprus
863.09
Grand Duchy of Luxembourg
1,101.39
Republic of Malta
398.44
Kingdom of the Netherlands
25,143.58
Republic of Austria
12,241.43
Portuguese Republic
11,035.38
Republic of Slovenia
2,072.92
Slovak Republic
4,371.54
Republic of Finland
7,905.20
Hellenic Republic
12,387.70
Total Guarantee Commitments
440,000.00
ANNEX 2
CONTRIBUTION KEY
ECB Capital
Member State
subscription
Contribution Key
key %
Kingdom of Belgium
2.4256
3,475494866853410%
Federal Republic of Germany
18.9373
27,134106588911300%
Ireland
1.1107
1,591454546757130%
Kingdom of Spain
8.3040
11,898297070560200%
French Republic
14.2212
20,376693436879900%
Italian Republic
12.4966
17,905618879089900%
Republic of Cyprus
0.1369
0,196155692312101%
Grand Duchy of Luxembourg
0.1747
0,250317015682425%
Republic of Malta
0.0632
0,090555440132394%
Kingdom of the Netherlands
3.9882
5,714449467342010%
Republic of Austria
1.9417
2,782143957358700%
Portuguese Republic
1.7504
2,508041810249100%
Republic of Slovenia
0.3288
0,471117542967267%
Slovak Republic
0.6934
0,993530730819656%
Republic of Finland
1.2539
1,796637126297610%
Hellenic Republic
1.9649
2,815385827787050%
Total
67.8266
100,000000000000000%
ANNEX 3
TEMPLATE FOR COMMITMENT CONFIRMATION
[Letter-head of Authorities of Euro Area Member State]
By fax followed by registered mail
European Financial Stability Facility
[●]
Fax: [●]
Copy to
[●]
[●]
Fax: [●]
Re: European Financial Stability Facility ("EFSF") – Confirmation
Commitment
Dear Sirs,
We refer to the EFSF Framework Agreement between the Kingdom of
Belgium, Federal Republic of Germany, Ireland, Kingdom of Spain, French
Republic, Italian Republic, Republic of Cyprus, Grand Duchy of Luxembourg,
Republic of Malta, Kingdom of the Netherlands, Republic of Austria, Portuguese
Republic, Republic of Slovenia, Slovak Republic, Republic of Finland, the
Hellenic Republic and EFSF
(the "Parties") signed on [●] 2010.
We hereby notify you that we are duly authorised under our national laws to
permit us to be bound by the above mentioned Agreement with effect from [date].
Yours faithfully,
[Name of euro-area Member State]
[●] [●]
0647%
Republic of Estonia
0.1790
0.2558%
Ireland*
1.1107
1.5874%
Hellenic Republic*
1.9649
2.8082%
Kingdom of Spain
8.3040
11.8679%
French Republic
14.2212
20.3246%
Italian Republic
12.4966
17.8598%
Republic of Cyprus
0.1369
0.1957%
Grand Duchy of Luxembourg
0.1747
0.2497%
Republic of Malta
0.0632
0.0903%
Kingdom of the Netherlands
3.9882
5.6998%
Republic of Austria
1.9417
2.7750%
Portuguese Republic*
1.7504
2.5016%
Republic of Slovenia
0.3288
0.4699%
Slovak Republic
0.6934
0.9910%
Republic of Finland
1.2539
1.7920%
Total
69.9705
100.0000%
* As at the Effective Date of the Amendments, the Hellenic Republic, Ireland
and Portugal have become Stepping-Out Guarantors.
ANNEX 3
TEMPLATE FOR AMENDMENT CONFIRMATION
[Letter-head of Authorities of Euro Area Member State]
By fax followed by registered mail
European Financial Stability Facility
43, avenue John F. Kennedy, L-1855 Luxembourg
Fax: +352 260 962 62
Copy to
Secretariat of the Eurogroup Working Group
DG ECFIN BU-24 03/027, 1049 Brussels, Belgium
Fax: +32-2-295 68 41
Re: European Financial Stability Facility ("EFSF") - Amendment
Confirmation
Dear Sirs,
We refer to (i) the EFSF Framework Agreement between the Kingdom of
Belgium, Federal Republic of Germany, Ireland, Kingdom of Spain, French
Republic, Italian Republic, Republic of Cyprus, Grand Duchy of Luxembourg,
Republic of Malta, Kingdom of the Netherlands, Republic of Austria, Portuguese
Republic, Republic of Slovenia, Slovak Republic, Republic of Finland, the
Hellenic Republic and EFSF (the "Parties"), and (ii) to the Amendment to the
EFSF Framework Agreement between the Parties and the Republic of Estonia.
We hereby notify you that we are duly authorised under our national laws to
permit us to be bound by the Amendment to the EFSF Framework Agreement with
effect from [date].
Yours faithfully,
[Name of euro-area Member State]
[●] [●]".
5. The Government Borrowing and Granting of Loans to the Consequential
amendments to
Hellenic Republic Act shall be amended as follows
the Government
Borrowing and
Granting of
(a)
article 2 thereof shall be amended as follows
Loans to the
Hellenic
Republic Act.
(i) the definition "Loan Facility Agreement"
shall be substituted by the following new definition
" "Loan Facility Agreement" means the
agreement entered into in Brussels on the 8th May
2010, which is reproduced in the First Schedule,
approved by the Euro Area Member States in
pursuance of a decision of the Council of the
European Union providing for the lending of
money to the Hellenic Republic, as amended by
the agreement entered into in Brussels on the 14th
June, 2011, which agreement is reproduced in the
Second Schedule. Both agreements being
reproduced are in the English language;"; and
(ii) the definition "Intercreditor Agreement" shall
be substituted by the following new definition
" "Intercreditor Agreement" means the
agreement entered into in Brussels on the 8th May
2010, between the Euro Area Member States and
the European Commission regarding pooled
bilateral loans by Euro Area Member States to the
Hellenic Republic, which agreement is reproduced
in the Third Schedule. The agreement being
reproduced is in the English language;"; and
(b) immediately after article 4 thereof, there shall be
added the following new Schedules
"FIRST SCHEDULE
Loan Facility Agreement entered into in Brussels
on the 8th May, 2010