Town Council
State Administration
of
No.
of " " , 1998
Deputy Head
-------------------------
STATUTARY AGREEMENT OF ASSOCIATION
OF LIMITED LIABILITY COMPANY
WITH FOREIGN INVESTMENTS
"EURODONGAS"
Makyivka 1998
The present Statutory Agreement of Association whose purpose is creation of the
Limited Liability Company with Foreign Investments "EURODONGAS" is concluded on
"17" June 1998 between
(1) "Eurogas Inc." Company, registered on "1" August 1985 under No. CO117160,
in the commercial register, in Salt Lace City, Utah, USA located at
address: 00 Xxxxx Xxxxxx Xxxxxxxxx Xxx Xxxx 0000 XXX, represented by
President Xxxxxxxx Xxxxxxx.
and
(2) Limited Liability Company "Makyivs'ke Girs'ke Tovarystvo" (MGT),
identification Code 21952070, registered by Girnyts'ki District Executive
Committee, Makyivka, on January 22, 1992, located at address: Xxxxxxxxx
Xxx. 00, Xxxxxxxx, Xxxxxxxx Xxxxxx, 000000 Xxxxxxx, represented by Director
General Xxxx Xxxxxxxxxxxx Xxxxxxx.
Each of the Parties is referred to in the texts of the present Statutory
Agreement of Association and the Articles of Association separately as Founder
or Participant and together as Founders or Participants. The Founders of the
Company are its primary Participants.
Since the Participants wish to conclude the Statutory Agreement of Association
with the purpose of the creation of the Limited Liability Company with Foreign
Investments "EURODONGAS",
now they agreed as follows:
ARTICLE 1
DEFINITIONS
The following terms used in the present Statutory Agreement of Association have
the following meanings:
1.1. the term "Company" means the Limited Liability Company with Foreign
Investments "EURODONGAS";
1.2. the term "Articles of Association" means the Articles of Association of the
Limited Liability Company with Foreign Investments "EURODONGAS";
1.3. the term "date of registration" means the date of registration of the
Company as a legal entity by competent state agencies of Ukraine;
1.4. the term "Statutory Agreement" means the Statutory Agreement of Association
concluded between the Founders of the Company.
ARTICLE 2
NAME AND LOCATION OF THE COMPANY
2.1. The Company has:
2.1.1. Full name:
- in Ukrainian: TOBapHCTBO 3 OOMeKeHoIo BiJIIoBiJibHiCTIo 3
iHo3Emhhmmh iHBeCTHUiRMH "CBpOJOHra3",
- in English: Limited Liability Company with Foreign Investments
"EURODONGAS".
2. 1.2. Short name:
- in Ukrainian: TOB "CbpoJoHra3",
- in English: LLC "EURODONGAS".
2.2. Location of the Company:
Xxxxxxxxx Xxx. 00, Xxxxxxxx, Xxxxxxxx Xxxxxx, 339004 Ukraine.
ARTICLE 3
LEGAL STATUS, SUBJECT AND
OBJECTIVES OF THE COMPANY
REGULATORY DEEDS
3.1. The Company is a legal entity established for an indefinite period from the
moment of its registration by state agencies for business activity in
Ukraine and abroad.
3.2. The Company has own balance, settlement accounts in foreign and national
currency and other necessary bank accounts, official seal, other seals and
stamps which bear its name, trade marks and other requisites (if exist)
that are approved by the Director General.
3.3. The Company disposes its property, may accrue proprietary and
non-proprietary interests, bear responsibility, be a plaintiff or a
defendant in a court, arbitration court in own name.
3.4. The Founders hereby agreed that the Company has subject and objectives of
activity stated in the Article 4 of the Articles of Association.
3.5. The activity of the Company is regulated by the present Statutory Agreement
of Association, the Articles of Association and the Laws of Ukraine "On
Business Companies", "On Enterprises", other acting laws of Ukraine.
3.6. The Company is entitled to create in Ukraine and abroad subsidiaries,
affiliates and branch offices in accordance with laws of Ukraine
3.7. The Company is entitled without restrictions to take decisions relating to
its activity.
3.8. The Company bears responsibility on own debts and obligations by own
property to which fine may be imposed in accordance with laws of Ukraine.
Responsibility of the Participants is limited by their shares in the
Authorized Fund.
ARTICLE 4
RIGHTS AND OBLIGATIONS OF THE PARTICIPANTS
4.1. The Participants of the Company have right:
4.1.1. to participate personally or through representatives in the Meeting of
Participants and in making decisions according to an order of the day;
4.1.2. to participate in the management of the Company in accordance with the
Articles of Association;
4.1.3. to obtain dividends declared by the Meeting of Participants for
distribution among the Participants in the amount of 70 % (Eurogas)
and 30% ( M G T) to the complete compensation of Eurogas investments
and in the future in the proportion to the amount of the full paid
shares in the Authorized Fund.
4.1.4. to obtain any information as for activity of the Company, in
particular from the Board of Directors;
4.1.5. to obtain any information relating to activity of the Company? in
particular from the Board of Directors;
4.1.6. to participate in distribution of property of the Company in the case
of its liquidation;
4.1.7. to exercise other rights given to them by the present Articles of
Association, the Statutory Agreement of Association or acting laws of
Ukraine.
4.2. The Participants are obliged:
4.2.1. to fulfill obligations against the Company;
4.2.2. to refrain from disclosure of confidential information and commercial
secrets relating to activity of the Company;
4.2.3. to pay shares obtained in accordance with the Articles of Association
and the Statutory Agreement of Association;
4.2.4. to promote activity of the Company.
ARTICLE 5
THE AUTHORIZED FUND,
SHARES OF THE PARTICIPANTS
5.1. The Parties agreed to create the Authorized Fund through making
contributions by each Participant. The Authorized Fund in amount 30000
(thirty thousand) grivnas that amounts to US dollars at
the rate of the National Bank of Ukraine (hereinafter referred to as NBU)
per 100 US dollars on " " 199 is
created for support of activity of the Company.
5.2. The contribution to the Authorized Fund may be done by the Participants in
the form of buildings, constructions, equipment, materials and other
tangible assets (or interests in them), securities, other proprietary
interests, know-how, foreign and/or national currency investments.
5.3. Shares of the Participants in the Authorized Fund are:
"Eurogas" possesses 50% (fifty per cent) of the Authorized Fund of the
Company that amounts to 15000 (fifteen thousand) grivnas or
US dollars at the rate of the NBU
per 100 US dollars on " " 199 ;
LLC "MGT" possesses 50% (fifty per cent) of the Authorized Fund of the
Company that amounts to 15000 (fifteen thousand) grivnas or
US dollars at the rate of the NBU
per 100 US dollars on " " 199 .
5.4. Each Participant has to make at least 30% (thirty per cent) of contribution
at the moment of registration of the Company. The payments are to be
confirmed by the bank.
5.5. The Participants are to make their contribution not later than 1 (one) year
after the moment of registration of the Company.
5.6. Should any Participant not make his contribution for the period determined
in article 5.3. of the present Statutory Agreement of Association, a fine
in amount of 10% (ten per cent) of annual indebtedness is imposed to such
Participant.
5.7. The Board of Directors issues to every Participant a Certificate verifying
that he made his contribution to the Authorized Fund completely. Such
Certificate is not a security. Such Certificate verifies membership of a
Participant in the Company and his right to participate in management of
the Company and his right for obtaining a relevant part of profits in the
form of dividends and for participation in distribution of property and
proprietary interests in the case of liquidation of the Company.
5.8. During 2 years after registration of the Company none Participant may sell,
transfer, cede, dispose in another way or stop holding any shares of the
Company at any time which are held by Participant at present or in future,
except for cases when consent of other Participants of the Company was
obtained.
5.9. In 2 years after registration of the Company every Participant may sell its
share to third person at market price provided that such Participant
proposed to another Participant the right of prior purchase of the share at
market price. In the case of withdrawal of any Participant from the
Company a part of the Company's assets is paid to such Participant in
proportion to his share. Payment is made after approval of annual account
for the year when such withdrawal took place. On demand of Participant and
on consent of the Company the contribution may be returned partially or
completely in natural form. Assets transferred by Participant to the
Company for use are to be returned in the form of property without
compensation.
5.10. None Participant may mortgage, debit or pawn in another way share in
the Company which he possesses at present or in future without written
consent of another Participant of the Company.
5.11. The Company may increase or decrease the Authorized Fund by means of
approval of the Meeting of Participants in accordance with acting laws
of Ukraine.
5.12. The Authorized Fund may be increased after making contributions
completely by all Participants according to their shares. Decision of
the Company on increasing the Authorized Fund is valid from the date of
making changes thereto in the state register according to laws of
Ukraine.
5.13. The Authorized Fund may be decreased provided absence of objections
from creditors of the Company. Decision for decreasing the Authorized
Fund is valid not earlier than 3 months after the appropriate state
registration.
5.14. A relevant part of profits obtained by the Company in current year
before withdrawal of Participant from the Company should be paid to the
said Participant.
ARTICLE 6
MANAGING BODIES OF THE COMPANY
6.1. The highest body of the Company is the Meeting of Participants.
6.2. The executive body of the Company is the Board of Directors which consists
of 4 persons and headed by the Director General.
6.3. The Auditing Commission controls the financial and commercial activity of
the Company as well as activity of the Board of Directors.
6.4. The order of creation, competence and activity of the managing bodies are
determined by the Articles of Association.
ARTICLE 7
THE FIRST MEETING
7.1. The First Meeting of the Company is called by the Founders and valid only
if Participants are present who own more than 60% (sixty per cent) of the
Authorized Fund of the Company.
7.2. The First Meeting takes decision on the following matters:
7.2.1. approval of establishment of the Company;
7.2.2. approval of the Articles of Association of the Company;
7.2.3. approval of appointment of the first managing bodies of the Company;
7.2.4. approval if necessary of agreements concluded by the Founders before
the establishment of the Company;
7.2.5. determination of privileges granted to the Founders;
7.2.6 other matters.
ARTICLE 8
ALTERATIONS AND ADDITIONS
8.1. The Participants may make alterations to the present Statutory Agreement of
Association and/or Articles of Association in accordance with acting laws
of Ukraine. None addition, denial or alteration of any provision of the
present Articles of Association is valid unless it made in writing and
signed by both Participants of their representatives.
8.2. After signing the present Statutory Agreement of Association all preceding
correspondence or arrangements connected with this Statutory Agreement of
Association become invalid.
8.3. In the case when any Participant changes his address, he has to notify
another Participant thereto in writing for 7 (seven) days.
8.4. Expenses of the Participants for registration of EURODONGAS Company are to
be compensated by the Company during 1 (one) month from the moment of
registration of the Company.
ARTICLE 9
CONFIDENTIAL INFORMATION
9.1. The Parties of the present Statutory Agreement of Association, for time
being the Participants of the Company and for 5 (five) years after being
so, have to keep in secret the information about the Company as well as all
confidential information, trade secrets and know-how (both in written and
non-written form) given to or taken from another party, its affiliates or
by the Company, whose confidential information, trade secrets and know-how
may be used only for benefit of the Company, for purposes of the present
Articles of Association. Obligation of confidentiality is not spread to
information which became available to public or information whose
disclosure is required by law or by any provision about exchange of
contributions.
9.2. Participants may disclose the information to third parties in the case when
they carry out such activity which requires such information and in such
amount which is necessary to reach objectives of the Company.
ARTICLE 10
FORCE MAJEURE CIRCUMSTANCES
10.1. The Participants may completely or partially be free from fulfillment
of provisions of the present Statutory Agreement of Association if such
non-fulfillment is caused by force majeure circumstances which are beyond
control of the Participants. Such circumstances include: war, revolt,
earthquake, flood, acts of God and the similar phenomena.
10.2. Every Participant which refers to the force majeure circumstances is
to send without delay a written notification to another Participant.
In this case, this Participant may demand for a certificate issued by
appropriate agency of the country that confirms the said circumstances.
10.3. The Participant who is unable to fulfill his obligations in connection
with arising force majeure circumstances has to take all possible
measures for the fastest compensation of such non-fulfillment.
10.4. After stopping the said circumstances the Participant has to notify
another Participant in writing about such stopping subject to such
Participant will be responsible for further non-fulfillment of his
obligations after stopping force majeure circumstances.
10.5. In the case of arising force majeure circumstances period of
fulfillment of obligations is delayed for the time of the said
circumstances or their consequences being in force.
10.6. Starting the force majeure circumstances is to be confirmed by the
Chamber of Trade and Industry of Ukraine.
ARTICLE 11
SETTLLEMENT OF DISPUTES
11.1. The Participants have to take all possible measures to settle disputes
arising from the present Statutory Agreement of Association by means of
negotiations.
11.2. Should the Participants not reach consent for 30 (thirty) days from
the day of their arising, the disputes are to be transferred for
consideration to the International Commercial Arbitration Court at the
Chamber of Trade and Industry of Ukraine. The Parties agreed that under
consideration and settlement of the disputes Rules of International
Commercial Arbitration Court at the Chamber of Trade and Industry of
Ukraine will be applied.
11.3. The arbitration court should consist of three arbiters.
11.4. The place of holding the arbitrage is Kiev, Ukraine.
11.5. The official language of arbitration proceedings is Ukrainian.
11.6. The present Statutory Agreement of Association is guided and
interpreted in accordance with acting laws of Ukraine. Legal
regulations of Ukraine are applicable to all legal relations which
arise from the present Statutory Agreement of Association.
ARTICLE 12
DURATION AND TERMINATION
OF THE STATUTARY AGREEMENT OF ASSOCIATION
12.1. The present Statutory Agreement of Association is valid from the date
of its signing by the Participants.
12.2. The present Statutory Agreement of Association is concluded for an
indefinite period.
12.3. The present Statutory Agreement of Association may be terminated:
12.3.1. in the case of reaching objective of the Company;
12.3.2. in the case of liquidation, reorganization or bankruptcy of the
Company;
12.3.3. on written consent of the Participants;
12.3.4. by written notification sent by any Participant to another Party about
termination of the Statutory Agreement of Association not later than 6
months before such termination;
12.3.5. by court decision.
ARTICLE 13
LICENSES
13.1. According to Deposits Code, MGT has a license for mining methane from
coalbed deposits at sites Butovs'ka Glyboka No.2, Oktiabrs'ka Glyboka
No.3, Chaikino Glyboka No.2.
After Company registration and approval of Investments Commitment Protocol MGT
submit to State Geology Committee the documents needed for reregistration of the
above mentioned licenses of the Company. After the approval Investments
Commitment Protocol becomes the integral part of the Statutory Agreement.
ARTICLE 14
OTHER PROVISIONS
14.1. Any additions to the present Statutory Agreement of Association are
its integral part.
14.2. Any notification which is required or allowed by the present Statutory
Agreement of Association is to be made in writing. Such notifications
are considered as made (i) if they were handed personally; (ii) in
twenty four hours after sending by fax; (iii) after seven days after
sending by messenger mail.
14.3. The present Statutory Agreement of Association is concluded in 6 copies,
3 copies in English and 3 copies in Ukrainian which are of equal
legal force.
ARTICLE 15
SIGNATURES OF THE FOUNDERS
"Eurogas Inc." Company, registered on "1" August 1985 under No. CO117160, in the
commercial register, in Salt Lake City, Utah, USA located at address: 00 Xxxxx
Xxxxxx Xxxxxxxxx Xxx Xxxx 0000 XXX, represented by President Xxxxxxxx Xxxxxxx.
President /s/ X. Xxxxxxx
X. Xxxxxxx
Limited Liability Company "Makyivs'ke Girs'ke Tovarystvo" (MGT), identification
Code 21952070 registered by Girnyts'ki District Executive Committee, Makyivka,
on January 22, 1992, located at address: Xxxxxxxxx Xxx. 00, Xxxxxxxx, Xxxxxxxx
Xxxxxx, 000000 Xxxxxxx.
Director General /s/ I.N. Averkin
I.N. Averkin
under letter of attorney
of " " 1998
