Contract
between
Enertrag AG
Gut Dauerthal
17291 Dauerthal
- in the following ,,Enertrag "-
and
EU Energy Ltd.
Technology House
151 Silbury Boulevard
Cent ral Xxxxxx Xxxxxx
XX0 0XX
Xxxxxx Xxxxxxx
- in the following "EU Energy " -
- 1. and 2. both in the following "the parties" -
Preamble
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Enertrag intends to participate in the subsidiary of EU Energy, the EU Energy
Service & Maintenance GmbH, by a capital increase. For this purpose the parties
close the following contract:
ss. 1
Obligations of the Enertrag
1. By share holder resolution of 27 September 2006 the capital stock of
the EU Energy service & maintenance GmbH (in the following ,,the
company ") was increased by 25,000.00 (euro) to 50,000.00 (euro).
Enertrag commits itself to take over this new investment at a value of
25,000 (euro).
2. Further Enertrag commits itself to deposit into the capital reserve of
the company an amount at a value of 1,200,000 (euro) (one million two
hundred thousand euros).
3. Enertrag commits itself to integrate the personnel listed in annex 1
into the company and to transfer the appropriate work contracts to the
company.
4. Enertrag commits itself to bring in all business assets as well as all
know-how of their service and of management line of business specified
in annex 3 into the company as according to the business plan closed
between the parties (annex 2).
ss. 2
Obligations of the EU Energy as a shareholder of the company
1. EU Energy commits itself to keep the regular course of business of the
company.
2. EU Energy further commits itself to adjust the capital reserve of the
company for the current loans between the company and other companies
of the EU Energy group of companies to a value of (euro) 729,000.
3. The current long-term loan agreement between the EU Energy and the
company of ... at a value of (euro) 4,168,000 (euro) EU Energy will
change into a medium-term loan and adapt as a book value to the
inventory of the company at a value of (euro) 3,480,000. Basis for this
adaption is the balance from 03 July 2006.
The resulting excess amount of (euro) 688,000 will be paid by EU Energy
into the company's account. This amount is then either depreciated by
the shareholders of the company or adjusted into the capital reserve of
the company or taken as a loan to the usual market conditions. The
parties agree that Enertrag does not take part as a shareholder in the
repayment of the aforementioned sum of 688,000 (euro).
4. The personnel of the company as in annex 4 is to be left in the company
by EU Energy.
5. EU Energy commits itself to acquire by the company as its subsidiary
the business assets of Enertrag energy service GmbH as according to
annex 3 to the existing book value at the time of conclusion of this
contract (approximately 200,000 (euro)) .
ss. 3
Obligations of both parties
1. The parties commit themselves to participate to the necessary extent in
the notarial recording, in particular regarding the declaration of the
capital increase of the company by Enertrag, as well the necessary
amendments of the present articles of association and bye-laws.
2. The parties agree that the name of the company is changed in the
context of an amendment of the articles of association to "E Energy
Service GmbH".
3. The parties commit themselves to implement the bye-laws attached here
as annex 4 after the capital increase by Enertrag into the company.
4. The parties agree that the operational management is to be determined
by a four-eye principle, i.e. that all decisions are decided together
by the two managing directors of the company.
5. Further the parties will appoint an advisor for the company comprising
of 4 members. Two of the members of the advisory board are to be
appointed by EU Energy, the other two members of the advisory board are
to be determined by Enertrag.
6. The parties agree that E Energy service GmbH with effect from October
1, 2006 service agreements between both parties are concluded, wherein
exclusive co-operation between the company and the parties is
regulated. The conditions of these exclusive service agreements are to
be regulated here in agreement of both parties.
7. Future Investments regarding the company will take place by investment
plans which are to be entered into by the parties. Half of the
respective investments are carried in each case by the parties as
shareholders of the company.
ss. 4
Warranties of Enertrag
1. Enertrag guarantees that the assumption of the capital increase of the
company to a value of 25, 000.00 (euro) as well as the deposit into the
capital reserve of the company at a value of 1.2 million (euro) will be
accomplished within 10 days from the capital increase. Should Enertrag
not fulfil this obligation timely, Enertrag will be immediately in
delay these obligations. Interests will then amount to 6%.
2. The right of EU Energy to withdraw or reverse the contract in the
context of the compensation for damages should the aforementioned
assurances not occur, is excluded.
ss. 5
Warranties of EU Energy
1. EU Energy ensures in the context of the restrictions specified in ss. 5
exp. 2 that
a) the capital stock at a value of 25,000 (euro) is completely
paid in.
b) the company is not in arrears with payments of due taxes.
c) the company has no further pending law cases with any party
except those mentioned in annex 5.
d) With completion of the end-of-year procedure as well as during
recording of the individual business transactions the basics
of normal record keeping were adhered to.
e) Stock determined by stocktaking
f) Intrinsic value of claims against third parties
2. The right of Enertrag to withdraw or reverse the contract in the
context of the compensation for damages should the aforementioned
assurances not occur, is excluded.
3. EU Energy is liable for any subsequent charges of receiver of revenue
claiming compensation of damages, without the contract being allowed to
be reversed, if these tax liabilities originated before October 1,
2006.
4. Further reaching liabilites, in particular for the yield capacity and
fair value of the company, are excluded.
ss. 6
Execution of the contract
The parties agree to the further business procedure as follows:
1. The time frame of further conclusion of the contract determines itself
according to annex 6.
2. The parties agree that a potential negative result of a potential
merger control by the Federal non competition authorities concerning
the participation of Enertrag in the company applies as a liquidating
condition to this contract.
ss. 7
Mediations and arbitration clause
1. All disputes from and in connection with the present contract,
including disputes over its existence or its completion, are finally
and binding decided under exclusion of the regular courts by an
arbitral tribunal. The parties agree upon the application of the rules
of arbitration of the German institute for arbitration (DIS) in the at
present valid arbitration version with the following modifications:
A) The arbitrator is specified jointly by the parties.
b) The parties are to be heard before decree of the arbitral
award, unless parties decline a verbal negotiation in writing.
C) The arbitral tribunal strives in each procedure to find an
amicable settlement of the law case. It decides according to
valid material right. The arbitral tribunal decides also on
the costs of the arbitration in appropriate application of the
ss. 91 ZPO(Zivilprozessordnung).
D) Defined as the responsible court in line with ss. 1062 ZPO is
the Oberlandesgericht Xxxxxxxxx.
0. Xxxxx of the arbitration is Luebeck. Meetings of the arbitral tribunal
can also take place at other places.
3. Before arbitration is implemented, the parties will attempt mediation.
The Mediator is specified both parties in agreement. By non-agreement,
rules of arbitration apply according to DIS. The place of the mediation
is determined by ss.7 No. 2 of the current contract. The remuneration
of the Mediators applies as according to the regulation of DIS. It is
inadmissible for the Mediator and arbitrator to be the same person. The
arbitrator is to reject the arbitration complaint as inadmissibly, if a
Mediation did not take place.
4. All claims in connection with the current contract are applied
according to German law.
5. The parties agree on German language to be used during the arbitration
as well as the Mediation.
ss. 8
Severability clause
If individual provisions of the current contract should be or become
ineffective, the contract as a whole remains unaffected by it. Furthermore, the
Contracting Parties commit themselves to replace the ineffective determinations
with determinations which come next to the intended purpose.
ss. 9
Written form, special agreements
1. Changes and additions of the current contract require the written form.
This applies also to the writing clause.
2. Verbal special agreements do not exist.
ss. 10
Annexes
The following Annexes are an integral component of the current contract:
- Annex 1: Personnel of Enertrag to be transferred to the company
- Annex 2: Business plan
- Annex 3: Assets and know-how of Enertrag
- Annex 4: Bye-laws
- Annex 5: List of law suits
- Annex 6: Time schedule
_____________, .................. ____________, ...................
/s/ Xxxx Xxxxxxx /s/ illegible
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EU Energy Enertrag
September 27, 2006
