LOAN AGREEMENT
THIS
LOAN AGREEMENT (this
“Agreement”)
is
made and entered into as of October 30th
2008, by
and among, the undersigned,
ALGATEC
SOLAR AG,
a
German stock corporation (Aktiengesellschaft)
organized under the laws of Germany, registered with the commercial register
(Handelsregister)
of the
local court (Amtsgericht)
of
Cottbus under registration number HRB 8146 CB and having its registered office
in Röderland, Germany (herein called the “Company”);
and
ALGATEC
EQUITY PARTNERS, L.P.,
a
limited partnership organized under the laws of the State of Delaware, U.S.A.,
having principal place of business at 00, Xxxxxxxx Xxxxxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, XXX (the “Partnership”)
(the
Company and the Partnership herein collectively referred to as the “Parties”
and
each as a “Party”)
Recitals
WHEREAS,
this
Agreement is entered into in connection with a Share Purchase Agreement dated
as
of the date hereof by and among the Company, Xxxxxx Xxxxxxx, Esq.,( as trustee
for Xx. Xxxxxx Xxxxxxx), Xx. Xxxxxxx Xxxxx, Xx. Xxxxxx Xxxxx, Xx. Xxxxx Xxxxx
and the Partnership (as from time to time amended, the “Share
Purchase Agreement”).
All
capitalized terms not separately defined in this Agreement, shall have the
same
meanings as defined in the Share Purchase Agreement.
WHEREAS,
under
the Share Purchase Agreement, and subject to the terms and conditions set forth
herein and therein, the Partnership has undertaken to grant the Company a loan
(the “Loan”)
in the
principal amount of Two Million Euros (€2,000,000).
NOW,
THEREFORE,
the
Parties hereto agree as follows:
1. The
Loan.
(a) The
Partnership agrees to lend to the Company and the Company agrees to borrow
from
the Partnership the principal amount of Two Million Euros (€2,000,000) (the
“Principal
Amount”)
and
the Company, in each case subject to the condition precedent (aufschiebende
Bedingung)
that
the First Closing (as defined under the Share Purchase Agreement) has
occurred.
(b) The
Principal Amount shall be paid out in Euros to the Company by wire transfer
of
immediately available funds free of bank and other charges, to be received
(Wertstellung) at
the
latest on November 30, 2008, to the following bank account: [Note
L&W to Algatec: Please provide account details.]
2. Interest. Interest
shall accrue on the outstanding balance of the Loan at the rate of six percent
(6%) per annum (computed on the basis on the basis of the actual number of
days
elapsed of a 360-day year) from and including the date of receipt of the
Principal Amount by the Company until (and excluding) the date of repayment
of
the Loan. Such interest shall be due and payable in full on the Maturity
Date.
3. Maturity
Date.
(a) The
Company shall (subject to the substitution right set forth in Section [ ] below)
repay the outstanding amount of the Loan (i.e.,
any
outstanding portion of the Principal Amount together with any accrued interest)
on a date (the “Maturity
Date”)
which
shall be the earlier
to occur
of (a) December 31, 2011, or (b) the consummation of the “Algatec Financing” as
hereinafter defined.
(b) Repayment
of the Loan shall be made in Euros by wire transfer of immediately available
funds, free of bank and other charges, to the attorneys’ client trust escrow
account of Xxxxxxx Xxxx LLP, set forth below:
The
Xxxxxxx Xxxx LLP wire instructions for its client’s
trust account.
Please
note that for foreign wires the swift code should be used, because it speeds
up
the receiving of the foreign wire.
Bank
-
Manufacturers and Traders Trust Company
Buffalo
New York
ABA
#000000000
Account
Name- Xxxxxxx Xxxx LLP
Client’s
Trust Account Number #103143
Foreign
Wire - M & T Swift Code XXXXXX00
Wire
Reference - Algatec Equity Partners L.P. (054436.00003)
Wire
Contact: Xxxxx Xxxxx Ext. (000) 000-000-0000
4. Prepayment. The
Company shall have the right, but not the obligation, to prepay all or any
portion of the, prior to the Maturity Date without premium or
penalty.
5. Events
of Default.
An
“Event
of Default”
under
this Agreement shall exist if any of the following conditions or events shall
occur and be continuing:
a. The
Company defaults in the payment of the outstanding Principal Amount or any
interest thereon when the same become due and payable on the Maturity Date
and
such default has not been cured within twenty (20) Business Days;
or
b. The
Management Stockholders are in breach or violation in any material respect
any
of their covenants and agreements contained in the Share Purchase Agreement
and
such default has not been cured for twenty (20) Business Days after written
notice of default is given to the Company; or
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c. any
representation or warranty made by the Management Stockholders in the Share
Purchase Agreement have been false or incorrect in any material respect on
the
date as of which made, and such condition, if capable of being cured, has not
been cured for twenty (20) Business Days after written notice of default is
given to the Company; or
d. the
Company (i) is generally not paying, or admits in writing its inability to
pay,
its debts as they become due, (ii) files, or consents by answer or otherwise
to
the filing against it of, a petition for relief or reorganization or arrangement
or any other petition in bankruptcy, for liquidation or to take advantage of
any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any
jurisdiction, (iii) is adjudicated as insolvent or to be liquidated, or (iv)
takes corporate action for the purpose of any of the foregoing; or
e. a
court
or governmental authority of competent jurisdiction enters an order appointing,
without consent of the Company, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial part
of its property, or constituting an order for relief or approving a petition
for
relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction,
or
ordering the dissolution, winding-up or liquidation of any of the Corporations,
or any such petition shall be filed against the Company and such petition shall
not be dismissed within sixty (60) days.
6. Remedies
on Default
a. Acceleration.
(i) If
an
Event of Default described in paragraph (e) or (f) of Section 5 (other than
an
Event of Default described in clause (i) of paragraph (e) or described in clause
(iv) of paragraph (e) by virtue of the fact that such clause encompasses clause
(i) of paragraph (e)) has occurred, the outstanding amount of the Loan
(i.e.,
any
outstanding portion of the Principal Amount together with any unpaid accrued
interest) shall automatically become immediately due and payable.
(ii) If
any
other Event of Default has occurred and is continuing, the Partnership may
at
any time at its option, by notice to the Company, declare the Loan (i.e.,
any
outstanding portion of the Principal Amount together with any unpaid accrued
interest) to be immediately due and payable.
(iii) Upon
the
Loan (i.e.,
any
outstanding portion of the Principal Amount together with any accrued interest)
becoming due and payable under this Section 6(a), whether automatically or
by
declaration (a “Default”),
it
will forthwith mature and the entire unpaid amount of the Loan (i.e.,
any
outstanding portion of the Principal Amount together with any unpaid accrued
interest) shall all be immediately due and payable, in each and every case
without presentment, demand, protest or further notice, all of which are hereby
waived.
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d. No
Waivers or Election of Remedies, Expenses, Etc.
No
course of dealing and no delay on the part of the Partnership in exercising
any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
the Partnership's rights, powers or remedies, unless the contrary is
specifically stated. No right, power or remedy conferred by this Agreement
shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
7. Substitution
Right.
a. In
the
event (and only in the event) that the Algatec Financing shall not be
consummated prior to December 31, 2011, the Company shall have the right, but
not the obligation, to request, by giving written notice (the “Substitution
Request”)
to the
Partnership within thirty (30) Business Days prior to December 31, 2011, to
request that the Partnership (at the Company’s election) either waives the Loan
or contributes (einlegen)
the
Loan (i.e.,
any
outstanding portion of the Principal Amount together with any unpaid accrued
interest) into the Company, in exchange for either the issuance by the Company
or the sale and assignment by the shareholders of the Company (other than the
Partnership) to the Partnership, in each case, for that number of the ordinary
shares in the Company (the “Substitute
Shares”)
that,
when taken together with and added to the number of shares issued to the
Partnership under the Share Purchase Agreement, shall represent a total of
75%
of the registered capital in the Company at the time of the issuance of the
Substitute Shares, subject to reduction of such percentage in the event of
a
prior share capital increase in the Company approved by the Management
Stockholders and the Partnership and in which the Partnership shall not
participate.
b. The
Substitution Request shall be accompanied by a binding written offer of those
shareholders of the Company which are offering to sell the Substitute Shares
to
the Partnership. Such offer shall provide for (i) the number of Substitute
Shares being offered to be sold by the respective shareholder, (ii) the purchase
price for the Substitute Shares (which shall be equal to their nominal amount
(€.01 per share), and (iii) for no representations and warranties by such
shareholder other than representations and warranties to the effect that (x)
such shareholder is the sole legal and beneficial owner of the Substitute Shares
offered to be sold by him, (y) that such shares are fully paid-up and validly
issued and (z) are free and clear of any third party rights.
c. Following
receipt of a Substitution Request which is accompanied by such binding written
offer, the Partnership, shall accept the offer to acquire the Substitute Shares,
shall no longer be entitled to request repayment of the Loan (i.e.,
any
outstanding portion of the Principal Amount and any unpaid accrued interest)
and
shall enter into such agreements with the Company as may be required to (at
the
Company’s election) waive repayment of the Loan or contribute it to the Company
(provided that if the Partnership refuses to enter into such agreements it
shall
be deemed, for all purposes, to have waived repayment of the Loan upon delivery
to the Partnership of the Substitute Shares).
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8. Assignments.
Neither
Party may not assign, delegate or otherwise transfer any right, claim or
obligation it may have under this Agreement without the other Party’s written
consent.
9. Applicable
Law. This
Agreement shall be construed and enforced in accordance with, and the rights
of
the Parties shall be governed by, the laws of the Germany excluding
choice-of-law that would require the application of the laws of a different
jurisdiction other than such State.
10. Jurisdiction.
For
any
dispute, controversy or claim arising from or in connection with this Agreement
or its the competent courts in Frankfurt am Main shall have exclusive
jurisdiction. The Partnership hereby consents to the personal jurisdiction
of
such courts and shall subject itself to such personal jurisdiction. Any action,
suit or proceeding relating to such matters shall be commenced, pursued,
defended and resolved only in such courts and any appropriate appellate court
having jurisdiction to hear an appeal from any judgment entered in such courts.
The Partnership irrevocably waives the defense of an inconvenient forum to
the
maintenance of such suit or proceeding.
11. Facsimile
Signatures. This
Note
may be executed by facsimile signature which shall, for all purposes be deemed
to be as legally valid and binding upon the Company as a ribbon original
signature.
12. Severability.
Should
any provision of this Agreement be or become, or be deemed to be or become,
invalid or unenforceable as a whole or in part, the validity and enforceability
of the remaining provisions shall not be affected thereby. Any such invalid
or
unenforceable provision shall, to the extent permitted by law, be deemed
replaced by such valid and enforceable provision as comes closest to the
economic intent and purpose of such invalid or unenforceable provision. The
same
shall apply in the event that this Agreement contains any gaps (Vertragslücken).
the
balance of this instrument is intentionally left blank - signature page
follows
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IN
WITNESS WHEREOF, the Company has executed and delivered this Loan Agreement
as
of the date and year first above written.
ALGATEC
SOLAR AG
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By:
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/s/
Xxxxxx Xxxxxxx
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Name:
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Xxxxxx
Xxxxxxx,
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Title:
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President
and Chief Executive Officer
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ALGATEC
EQUITY PARTNERS, L.P.
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By:
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Algatec
Management LLC
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(General
Partner)
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/s/
Xxxxxx X. Xxxxx
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Xxxxxx
X. Xxxxx,
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Title:
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Managing
Member
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