Master Joint Venture Agreement - Evergreen Solar Inc., Q-Cells AG, Renewable Energy Corp. and EverQ GmbH
MASTER JOINT VENTURE AGREEMENT
BY AND AMONG
EVERGREEN SOLAR, INC.
Q - CELLS AG
RENEWABLE ENERGY CORPORATION
AND
EVERQ GMBH
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TABLE OF CONTENTS
PAGE
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ARTICLE I. Relation to Existing Agreements; Interpretation, Relation
to Articles, Participation of EverQ........................ 4
1.1 Relation to Existing Agreements......................... 4
1.2 Definitions............................................. 4
1.3 Headings and Other Interpretation....................... 11
1.4 Relation to Articles of Association..................... 11
1.5 German Legal Terms...................................... 11
1.6 Participation of EverQ.................................. 11
ARTICLE II. Purpose of EverQ, Share Sale and Transfer.................. 12
2.1 Purpose of EverQ........................................ 12
2.2 Share Transfer in EverQ................................. 12
ARTICLE III. Management and Operation of EverQ.......................... 13
3.1 Management and Supervision of EverQ..................... 13
3.2 Accounting Matters; Basic Financial Inspection Rights... 13
3.3 Other Financial Matters................................. 14
3.4 Second REC Supply Agreement and REC Option.............. 14
3.5 Capacity Expansion and Additional Financing............. 15
3.6 Directors............................................... 19
3.7 Indemnification......................................... 19
ARTICLE IV. Restrictions on Transfer; Right of First Refusal for Sale
of Shares.................................................. 20
4.1 Restrictions on Transfer; Exceptions.................... 20
4.2 Right to Notice......................................... 20
4.3 Exercise of Right of First Refusal...................... 20
4.4 Right to Sell to Third Party............................ 21
4.5 Reinstatement of Right of First Refusal................. 21
4.6 Change of Control....................................... 21
4.7 Co-Selling Rights....................................... 21
4.8 Adherence by Third Party................................ 21
4.9 Relation to Articles of Association..................... 21
ARTICLE V. Term and Termination....................................... 22
5.1 Term.................................................... 22
5.2 Termination by mutual consent........................... 22
5.3 Expulsion for Breach.................................... 22
5.4 Termination after [****]................................ 26
5.5 Termination in Case of Sale and Transfer................ 26
5.6 Post-Termination Covenants.............................. 26
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ARTICLE VI. Closing Conditions......................................... 27
6.1 Conditions to Obligations of REC........................ 27
6.2 Conditions to the Obligations of E and Q................ 27
ARTICLE VII. Warranties................................................. 27
7.1 Warranties of Q......................................... 27
7.2 Warranties of E......................................... 29
7.3 Warranties of REC....................................... 31
7.4 Additional Representations and Warranties by EVERQ...... 33
7.5 Additional Representations and Warranties by E and Q
pertaining to EverQ..................................... 35
ARTICLE VIII. Liability and Limitations of Liability..................... 36
8.1 Liability............................................... 36
8.2 Definitions............................................. 37
8.3 Determination of the Amount of Damage................... 37
8.4 Limitations of Liability for Breach of Warranties....... 37
8.5 GENERAL LIMITATION OF LIABILITY......................... 38
ARTICLE IX. Additional Agreements...................................... 38
9.1 Marketing............................................... 38
9.2 Q Manufacturing Right of First Refusal.................. 38
9.3 REC Manufacturing Right of First Refusal................ 39
9.4 Relation of Sections 9.2 and 9.3........................ 40
9.5 [****].................................................. 41
9.6 Cooperation to Pursue Tax Efficiencies.................. 42
9.7 Confidentiality......................................... 42
9.8 Reasonable Efforts...................................... 44
9.9 Standstill.............................................. 44
9.10 Employee Matters........................................ 45
9.11 Covenant Regarding REC Services Agreement............... 45
ARTICLE X. Miscellaneous.............................................. 45
10.1 Expenses................................................ 45
10.2 Further Assurances...................................... 46
10.3 Notices................................................. 46
10.4 Governing Law and Dispute Resolution.................... 47
10.5 Binding Effect.......................................... 47
10.6 Assignment.............................................. 48
10.7 No Third Party Beneficiaries............................ 48
10.8 Foreign Corrupt Practices Act........................... 48
10.9 Sarbanes-Oxley and Nasdaq Covenant...................... 48
10.10 Amendment, Waivers...................................... 49
10.11 Entire Agreement........................................ 49
10.12 No Joint Venture or Partnership......................... 49
10.13 Language for Joint Venture and this Agreement........... 49
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10.14 Voting and other rights................................. 49
10.15 Severability............................................ 50
EXHIBITS
Exhibit A Articles of Association
Exhibit A-1 German Translation of Articles of Association
Exhibit 7.4 (a) EverQ Balance sheet as of September 30, 2005
Exhibit 7.4 (e) List of EverQ personnel and pensions
Exhibit 7.4 (f) Material Agreements
Exhibit 7.4 (h) EverQ Insurance
SCHEDULES
Schedule 3.4 Second REC Supply Agreement
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MASTER JOINT VENTURE AGREEMENT
This Master Joint Venture Agreement (the "AGREEMENT") is made and entered
into as of the 4th day of November, 2005, by and between
Evergreen Solar, Inc., a Delaware corporation with its principal executive
offices located at 138 Bartlett Street, Marlboro, Massachusetts, USA
("EVERGREEN" or "E"),
Q-Cells AG, a stock corporation organized under the laws of Germany with
its principal executive offices located at Guardianstr. 16, 06766 Thalheim,
Germany (,,Q-CELLS" or "Q"),
Renewable Energy Corporation, a stock corporation organized under the laws
of Norway with its principal executive offices located at Veritasveien 14,
N-1323 Hovik, NORWAY ("REC")
and
EverQ GmbH, a limited liability company organized under the laws of Germany
with its principal offices located at Guardianstr. 16, 06766 Thalheim, Germany
(,,EVERQ").
Capitalized terms used herein shall have the meaning ascribed to them in
SECTION 1.2.
RECITALS
WHEREAS:
The Parties are each engaged in the manufacture and distribution of solar
products.
A. Evergreen Solar
Evergreen has unique and proprietary String Ribbon wafer manufacturing
technology which, when fully developed, may have a very low cost potential.
Evergreen has an active research program to continue to develop its
advanced string ribbon technology and, assuming the successful growth of
EverQ, intends to channel its main future growth through EverQ.
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B. EverQ
EverQ is a recently created joint venture between Q-Cells and Evergreen to
manufacture String Ribbon wafers, photovoltaic cells and modules
incorporating such wafers based on the combination of their respective
technologies and expertise. Construction of the first 30 MW factory has
started in Thalheim, Germany, which is expected to commence production in
March[****]. Assuming the factory achieves its objectives, Q-Cells and
Evergreen plan on expanding the EverQ joint venture in Thalheim to 120 MW
as soon as practicable, and to look to establish factories in other
locations worldwide.
C. REC
REC is, via its subsidiary Solar Grade Silicon Holding, Inc. with
production at Moses Lake, Washington, USA and Butte, Montana USA ("SGS"),
the world leader in the production of solar grade silicon. REC is currently
performing large scale technology tests with the objective of producing
commercial quantities of the granular form factor of silicon feedstock that
is needed by Evergreen for its wafer manufacturing process. REC is also the
world's largest suppliers of high quality silicon wafers for photovoltaic
applications. At present REC produces silicon wafers through its unique and
proprietary casting and slicing processes.
D. Q-Cells
Q-Cells is the largest independent manufacturer of crystalline silicon
solar cells in the world. Q-Cells is in the midst of a capacity expansion
that will provide them with 350 MW of solar cell manufacturing capacity.
Q-Cells has active programs to increase the efficiency and reduce the cost
to convert wafers into solar cells.
E. Benefits to Parties
The Parties believe that it is in their mutual best interest to have REC
become a shareholder of EverQ and provide additional support via the REC
Supply Agreements and the REC License Agreement, as well as establish a
close collaboration with Evergreen on technology sharing and potentially
String Ribbon wafer production. The Parties further believe that combining
their respective technologies and capabilities would have a number of
benefits including:
(1) REC
(a) Access to String Ribbon wafer technology through EverQ
[****]
(b) Technology transfer/sharing with Evergreen
(c) Equity participation in EverQ
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(d) Secure high value customer for scaling of granular silicon
(e) [****]
(2) Evergreen
(a) Technology transfer/sharing with REC
(b) Secure silicon supply at attractive market related pricing
(c) Accelerated development and proliferation of String Ribbon
technology
(d) Initial substantial majority ownership of EverQ
(3) EverQ
(a) Secure silicon supply at attractive market related pricing
(b) Accelerated String Ribbon technology development (Evergreen
responsibility)
(c) Accelerated technology and manufacturing systems development
(4) Q-Cells
(a) Improved cost position through EverQ
(b) Low-cost supply of String Ribbon wafers
(c) Reduced capital commitment
F. Existing Agreements
On 14 January 2005, E and Q have entered in to the following agreements
regarding EverQ:
(a) Master Joint Venture Agreement (notarial deed nr. 7 / 2005 of the
Berlin notary public Dr. Rudolf von Hanstein) (the "EXISTING MJVA"),
(b) E License Agreement (notarial deed nr. 5 / 2005 of the Berlin
notary public Dr. Rudolf von Hanstein) (the "E LICENSE AGREEMENT"),
(c) Q License Agreement (notarial deed nr. 6 / 2005 of the Berlin
notary public Dr. Rudolf von Hanstein) (the "Q LICENSE AGREEMENT")
(jointly the "EXISTING AGREEMENTS").
The Existing MJVA will be replaced by this Agreement. Certified Copies of
the Existing Agreements have been provided to all Parties who waive reading
and attaching of the Existing Agreements to this Agreement.
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NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations, warranties and indemnities made herein and of the mutual
benefits to be derived herefrom, and for other good and valuable consideration
(the receipt and adequacy of which are hereby acknowledged), the Parties hereto
agree as follows:
ARTICLE I.
Relation to Existing Agreements; Interpretation, Relation to Articles,
Participation of EverQ
1.1 Relation to Existing Agreements. The Existing MJVA is hereby replaced
by this Agreement as of the Signing Date. The other Existing Agreements have in
the meantime been amended by the Parties; such amended versions shall remain in
full force and effect.
1.2 Definitions. For the purposes of this Agreement, capitalized terms
used herein shall have the respective meanings assigned thereto in this SECTION
1.2.
"ACQUISITION PROPOSAL" has the meaning assigned in SECTION 4.2.
"ACQUISITION PROPOSAL NOTICE" has the meaning assigned in SECTION 4.2.
"ACT" has the meaning assigned in SECTION 10.8.
"ACTION" means any claim, action, suit or arbitration, as well as any
inquiry, proceeding or investigation by or before any Governmental Authority.
"ADDITIONAL CAPITAL CONTRIBUTIONS" has the meaning set forth in
SECTION 2.3.
"AFFILIATE" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, a Party at the
relevant time. For the purposes of this definition, "control" means the
beneficial ownership of more than fifty percent (50%) of the voting rights.
"AGGREGATE EQUITY FUNDING" means [****], as adjusted to reflect
additional capital contributions after the Closing of this Agreement.
[****]
"ALTERNATIVE VENTURE" means a [****]
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[****]
[****]
"ANNUAL PLAN" shall mean an annual business and operations plan as
determined by the Supervisory Board.
"ARBITRATOR" has the meaning assigned in SECTION 5.3 (C)(II)(3).
"ARTICLES OF ASSOCIATION" means the Articles of Association
(Gesellschaftsvertrag) of EverQ set forth as EXHIBIT A attached hereto (a German
translation is attached hereto as EXHIBIT A-1), together with any amendments
thereto approved by the Parties. Should there be a discrepancy between the
German and the English versions of the Articles, the English version shall
prevail and the Parties shall amend the German version of the Articles to
reflect the meaning of the English version.
"BANKRUPTCY EVENT" means with regard to any Party:
a) such Party commencing a voluntary case or other
proceeding, or an involuntary case or other proceeding being commenced against
such Party and remaining undismissed and unstayed for a period of [****], in
either case seeking liquidation, reorganization or other relief with respect to
such Party or its debts under any applicable bankruptcy, reorganization,
composition, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of such Party or any substantial part of its property;
b) such Party consenting to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it; or
c) such Party admitting in writing its inability to pay its
debts generally as they become due or generally failing to pay such debts as
they become due or becoming subject to disposition of a clearing-house to
suspend transactions.
"BREACHING PARTY" has the meaning assigned in SECTION 5.3.
"BUSINESS DAY" means any day on which financial institutions are
generally open and available for business, and which is not otherwise a holiday,
in all of the German state of Saxony-Anhalt, the US state of Massachusetts and
Oslo, Norway.
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"BUSINESS YEAR" means the period of time which, according to EverQ's
Articles of Association, or relevant legislation, shall be the annual period
used for accounting and public reporting obligations of EverQ.
"CAPACITY EXPANSION" has the meaning assigned in SECTION 3.5 (A).
"CELL" means a crystalline silicon material substrate that has been
processed to provide electrical output from incident sunlight.
"CHANGE OF CONTROL" means with respect to any entity, the acquisition
of such entity by another Person by means of any transaction or series of
related transactions (including, without limitation, any share acquisition, sale
of all or substantially all of the assets, reorganization, merger or
consolidation, but excluding any sale of shares for capital raising purposes)
other than a transaction or series of transactions in which the holders of the
voting securities of such entity outstanding immediately prior to such
transaction continue to retain (either by such voting securities remaining
outstanding or by such voting securities being converted into voting securities
of the surviving entity), as a result of shares in such entity held by such
holders prior to such transaction, more than 50% of the total voting power
represented by the voting securities of such entity or such surviving entity
outstanding immediately after such transaction or series of transactions.
"CLOSING CONDITIONS" has the meaning assigned in SECTION 6.1 AND 6.2.
"CLOSING DATE" means the day on which fulfillment or waiver of all
Closing conditions has occurred (and which the Parties agree is the Signing
Date).
"CONCURRENT AGREEMENTS" means the Services Agreements, the License
Agreements, the REC Supply Agreements and the Evergreen Supply Agreement.
"CONFIDENTIAL INFORMATION" has the meaning assigned in SECTION 9.7.
"DIRECTOR" means a member of the Supervisory Board
(Aufsichtsratsmitglied) of EverQ.
"DISCLOSING PARTY" has the meaning assigned in SECTION 9.7(A).
"DISTRIBUTION" means the transfer of cash or other property whether by
way of dividend or otherwise to one or more of the Shareholders, or the purchase
or redemption of Shares for cash or other property.
"EU" means European Union.
"E FIRST REFUSAL NOTICE" has the meaning assigned in SECTION 9.2(B).
"ELECTION NOTICE" has the meaning assigned in SECTION 4.3.
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"E LICENSE AGREEMENT" has the meaning assigned in the RECITALS (F).
"E SERVICES AGREEMENT" has the meaning assigned in the RECITALS (F).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING AGREEMENTS" has the Meaning assigned in the RECITALS (F).
"EXISTING MJVA" has the Meaning assigned in the RECITALS (F).
"FAIR MARKET PRICE" has the meaning assigned in SECTION 3.5(D).
"FAIR MARKET VALUE" has the meaning assigned in SECTION 5.3(C).
"EVERGREEN SUPPLY AGREEMENT" means a supply agreement between SGS and
Evergreen entered into on November 22, 2005
"FIRST REC SUPPLY AGREEMENT" means the supply agreement between SGS
and EverQ attached hereto as EXHIBIT C.
"FREE CASH" means, as of any date of determination, the amount of
liquid net assets held in cash and other liquid, short-term investment
instruments in excess of the amount which is sufficient to fund the operations
and investments of EverQ for the following [****] according to EverQ's
then-current budget projections.
"GOVERNMENT INVESTMENT GRANT" means GA-grants (GA-Mittel; Mittel aus
dem Programm "Gemeinschaftsaufgabe Aufbau Neue Laender")
"GOVERNMENTAL AUTHORITY" means any US, German or Norwegian, federal,
national, supranational, state, provincial, municipal, local, or similar
government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body.
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"GRANT IMPUNITY NOTICE" has the meaning assigned in SECTION 3.5
(C)(I).
"IFRS" means International Financial Reporting Standards.
"INDEMNIFIABLE CLAIMS" has the meaning assigned in SECTION 8.2.
"INDEMNIFIED PARTY" has the meaning assigned in SECTION 8.2.
"INDEMNIFYING PARTY" has the meaning assigned in SECTION 8.1.
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"INITIAL CAPACITY" has the meaning assigned in SECTION 3.5(A).
"KNOWLEDGE" shall mean, with respect to a Party, the actual knowledge
of its officers and the members of the Board of Directors or Supervisory Board
of such Party, provided that such persons shall have made reasonable inquiry of
those employees and consultants, as the case may be, whom such officers or
members of the Board of Directors or the Supervisory Board reasonably believe
would have actual knowledge of the matters represented.
"LAW" means any US, German or Norwegian, federal, national,
supranational, state, provincial, municipal, local or similar statute, law,
ordinance, regulation, rule, code, order, requirement or rule of law.
"LIABILITIES" means any and all indebtedness or other liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured or
unmatured or determined or determinable, including those arising under any Law,
Action, Governmental Order and those arising under any contract, agreement,
arrangement, commitment or undertaking.
"LICENSE AGREEMENTS" means the E License Agreement, the Q License
Agreement and the REC License Agreement.
"MANAGEMENT BOARD" shall mean the Management Board of Directors
(Geschaeftsfuerung) of EverQ.
"MATERIAL AGREEMENT" means agreements entered into by EverQ with an
annual value above Euro 500,000.
"MATERIAL BREACH" has the meaning assigned in SECTION 5.3.
"MODULE" means an assembly of multiple, electrically connected Cells.
"NEGOTIATION PERIOD" has the meaning assigned in SECTION 4.3.
"NON-SELLING PARTIES" has the meaning assigned in SECTION 4.2.
"PARTIES" means the parties to this Agreement, from time to time, and
a "PARTY" shall mean either E, Q or REC, as applicable.
"PERCENTAGE INTERESTS" means the percentage interests of the Parties
in EverQ.
"PERSON" means any natural person, firm, partnership, association,
corporation, company, trust, business trust, governmental authority or other
entity.
"Q CONFIRMATION NOTICE" has the meaning assigned in SECTION 9.2(B).
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"Q LICENSE AGREEMENT" means the License & Technology Transfer
Agreement between Q and EverQ attached hereto as EXHIBIT C.
"Q PREFERENTIAL OFFER" has the meaning assigned in SECTION 3.5(C).
[****]
"Q SERVICES AGREEMENT" has the meaning assigned in the RECITALS(F)..
"REC LICENSE AGREEMENT" means the License & Technology Transfer
Agreement between REC and EverQ attached hereto as EXHIBIT B.
"REC OPTION" has the meaning assigned in SECTION 3.4(B).
"REC OPTION EXERCISE LETTER" has the meaning assigned in SECTION
3.4(B).
"REC OFFER DATE" has the meaning assigned in SECTION 3.4(C).
"REC SUPPLY AGREEMENTS" means the First REC Supply Agreement and the
Second REC Supply Agreement.
"RECAPITALIZATION" means any stock dividend, stock split, combination
of shares, reorganization, recapitalization, reclassification or other similar
event.
"RECEIVING PARTY" has the meaning assigned in SECTION 9.7(A).
[****]
"RIBBON TECHNOLOGY" means a technique in which a thin sheet of
silicon, typically polycrystalline silicon, is grown directly from molten
silicon. The sheet is generally grown in a vertical orientation without the use
of foreign substrate on which the silicon is formed, although some processes
grow the silicon in a horizontal direction and can use a substrate on which the
silicon is formed.
[****]
"SALE PERIOD" has the meaning assigned in SECTION 4.4.
"SECOND REC SUPPLY AGREEMENT" has the meaning assigned in SECTION 3.4
(A).
"SECURITIES ACT" means the Securities Act of 1934, as amended.
"SELLING PARTY" has the meaning assigned in SECTION 4.2.
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"SERVICES AGREEMENTS" means the E Services Agreement, the Q Services
Agreement and the REC Services Agreement.
"SGS" has the meaning assigned in the recitals.
"SHAREHOLDER" means each of E, Q and REC and their respective
Affiliates.
"SHARES" means shares of EverQ equity securities or securities
convertible or exchangeable into EverQ equity securities.
"SIGNING DATE" means the date hereof.
"STRING RIBBON TECHNOLOGY" means [****].
"SUBJECT SHARES" has the meaning assigned in SECTION 4.2.
"SUPERVISORY BOARD" means the Supervisory Board of Directors
(Aufsichtsrat) of EverQ.
"TAX" or, collectively, "TAXES" means any and all German, United
States, provincial, state, local and other taxes, assessments and other
governmental charges, duties, impositions and liabilities, including taxes based
upon or measured by gross receipts, income, profits, sales, use and occupation,
and value added, ad valorem, transfer, franchise, withholding, payroll,
recapture, employment, excise and property taxes, together with all interest,
penalties and additions imposed with respect to such amounts, and any
obligations with respect to such amounts arising as a result of being a member
of an affiliated, consolidated, combined or unitary group for any period or
under any agreements or arrangements with any other Person and including any
liability for taxes of a predecessor or transferor entity.
"TERMINATING PARTY" has the meanings assigned in ARTICLE 5, as
applicable.
"TERMINATION CALL RIGHT" has the meanings assigned in SECTION 5.3(D)
AND SECTION 5.4 (B), as applicable.
"TERMINATION SECURITIES" has the meaning assigned in SECTION 5.3(C).
"THIRD PARTY" means a Person who is neither a Party nor an Affiliate
of a Party.
"TRANSFER" has the meaning assigned in SECTION 4.1.
"US GAAP" means the generally accepted accounting principles in the
United States.
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"EVERQ" has the meaning assigned in the RECITALS.
"WAFER" means a crystalline silicon material substrate that is
intended to but has not yet been made into a Cell.
1.3 Headings and Other Interpretation. In this Agreement (a) headings are
for convenience of reference only and shall not affect the interpretation of the
provisions of this Agreement except to the extent that the context otherwise
requires; (b) words importing the singular shall include the plural and vice
versa; (c) words denoting individuals shall include any form of entity and vice
versa; (d) words denoting any gender shall include all genders; (e) where any
act, matter or thing is required by this Agreement to be performed or carried
out on a certain day and that day is not a Business Day then that act, matter or
thing shall be carried out or performed on the next following Business Day; (f)
unless specified otherwise, any reference herein to any Article, Section,
clause, sub-article, sub-clause, Appendix or Exhibit shall be deemed to be a
reference to an Article, Section, clause, sub-article, sub-clause, Appendix or
Exhibit of this Agreement; (g) any reference to any agreement, document or
instrument shall refer to such agreement, document or instrument as amended,
modified, supplemented, or novated; and (h) the words "include," "including" and
the derivations thereof shall not be limiting.
1.4 Relation to Articles of Association. In the event that this Agreement
and the Articles of Association of EverQ should differ in one or several
aspects, in the internal relation between E, Q and REC this Agreement shall
supersede the Articles of Association as far as this is legally permissible. E,
Q and REC hereby undertake that they shall cooperate with respect to the
adjustment of EverQ's Articles of Association in accordance with this Agreement.
The Parties shall whenever necessary exercise all voting and other rights and
powers available to them to procure the alteration of the Articles of
Association to the extent necessary to permit EverQ and its affairs to be
carried out as provided in this Agreement. For the avoidance of doubt, the
Articles of Association of EverQ do not conflict and are not to be treated as
conflicting with any provision of this Agreement by which the Parties agree to
procure that anything be or be not done. Subject as aforesaid, the Parties
hereby undertake to each other to observe and perform the provisions of the
Articles of Association of the Company.
1.5 German Legal Terms. In case of doubt of the meaning of German legal
terms, the German words written in brackets and italics shall be definitive.
1.6 Participation of EverQ. EverQ shall have no rights under this Agreement
and shall not be bound by any obligation hereunder with the exception of the
rights and obligations resulting from the representations and warranties under
ARTICLE VII and ARTICLE VIII.
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ARTICLE II.
Purpose of EverQ, Share Sale and Transfer
2.1 Purpose of EverQ. The purpose of EverQ shall be the manufacturing and
marketing of String Ribbon based photovoltaic products. EverQ shall be a
manufacturing company designed to exploit the combined strengths of E, Q and
REC. The parties intend that EverQ shall:
(a) manufacture Wafers using E's String Ribbon Technology;
(b) process such Wafers into Cells using a fabrication process that
combines each Party's Cell manufacturing technologies;
(c) assemble Cells into Modules;
(d) conduct specific manufacturing and product technology-oriented
development work required to optimize its activities;
(e) conduct all other activities necessary to the manufacture, test
and sale of such solar products with an initial focus on the manufacture, sale
and distribution of Modules; and
(f) in connection with the foregoing activities, subcontract or
outsource to E, Q and/or REC those functions that E, Q and/or REC is able to
perform more efficiently than EverQ.
2.2 Share Transfer in EverQ. On the Signing Date, E and Q shall immediately
after the signing of this Agreement split and transfer to REC their shares in
EverQ as follows:
(a) E shall sell and transfer a split share of 11.1% in EverQ to REC,
and
(b) Q shall sell and transfer a split share of 3.9% in EverQ to REC.
(c) The purchase price per 1% in EverQ shall be calculated as follows:
1% of the Aggregate Equity Funding, plus [****], i.e., the purchase price per 1%
in EverQ shall be [****] In addition, REC shall compensate E and Q for any
adverse tax consequences directly resulting from such transfer.
(d) The Parties shall enter into separate notarial deeds effecting
such sales and transfers.
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ARTICLE III.
Management and Operation of EverQ
3.1 Management and Supervision of EverQ . The Parties shall cause EverQ to
be managed and supervised in accordance with the provisions of the Articles of
Association. In particular, unless otherwise specifically agreed to by the
Parties, the Parties shall cause specific duties and powers of the Supervisory
Board to be as set forth in Articles of Association. Subject to Section 1.4, the
Parties shall not take any action in contravention of the Articles of
Association.
3.2 Accounting Matters; Basic Financial Inspection Rights.
(a) Basic Accounting Matters. (i) The Parties shall cause EverQ to (i)
establish its annual accounts and report its annual results in accordance with
the applicable corporate laws of the Federal Republic of Germany, aiming at the
optimization of tax benefits of the Shareholders and (ii) make adjustments to
its accounts to reflect its financial position and results of operations in
accordance with U.S. GAAP.
(ii) The Parties shall cause EverQ to keep books and records
reflecting all its respective transactions, complete and accurate in all
material respects.
(iii) The Parties shall cause the fiscal year of EverQ to
commence on January 1 and end on December 31.
(b) Basic Financial Information. The Parties shall cause EverQ to
furnish the following reports to each of E, Q and REC:
(i) As soon as practicable after the end of each fiscal year of
EverQ, and in any event within forty (40) days after the end of each fiscal year
of EverQ, an audited consolidated balance sheet of EverQ as at the end of such
fiscal year, and consolidated statements of income and cash flows of EverQ for
such year, prepared in accordance with German GAAP (HGB), IFRS and US GAAP
consistently applied.
(ii) As soon as practicable after the end of the first, second
and third quarterly accounting periods in each fiscal year of EverQ, and in any
event within twenty-five (25) days after the end of the first, second, and third
quarterly accounting periods in each fiscal year of EverQ, an unaudited
consolidated balance sheet of EverQ as of the end of each such quarterly period,
and unaudited consolidated statements of income and cash flows of EverQ for such
period, prepared in accordance with German GAAP (HGB), IFRS and US GAAP
consistently applied, subject to changes resulting from normal year-end audit
adjustments.
(iii) Monthly profit and loss statements as soon as reasonably
practicable.
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(iv) Such other information relating to the financial condition,
business, prospects or corporate affairs of EverQ as E, Q or REC may from time
to time reasonably request.
(c) Basic Financial Inspection Rights. During the regular office hours
of EverQ, and upon twenty-four (24) hours' notice to EverQ, E, Q and REC shall
have (i) full access to all properties, books of account and records of EverQ,
and (ii) the right to make copies from such books and records at their own
expense. Notwithstanding the foregoing, each Party will be entitled to any
inspection rights granted under German law.
3.3 Other Financial Matters.
(a) Annual Plan. The Parties shall cause the Management Board of EverQ
to prepare, and the Supervisory Board to consider and approve, an Annual Plan
with respect to each fiscal year of EverQ no later than thirty (30) days prior
to the commencement of each fiscal year.
(b) Dividend Policy. The shareholders' meeting may declare and pay
Distributions with the approval of a majority of the votes; provided, however,
the Parties shall take all actions necessary to cause EverQ to require unanimous
approval of the shareholders prior to any Distribution (i) declared at any time
that Free Cash does not exist, (ii) if such Distribution shall cause Free Cash
not to exist immediately following such Distribution, or (iii) other than in a
manner proportionate to the respective ownership interests of the equity
securities of EverQ regardless of whether Free Cash exists.
3.4 Second REC Supply Agreement and REC Option.
(a) Second REC Supply Agreement. REC shall use its best endeavours to
increase the production facilities of SGS so that SGS is in a position to offer
to EverQ a second silicon feedstock supply agreement prior to [****], containing
the volumes and other principles and terms as laid down in SCHEDULE 3.4 and to
be sold to EverQ at [****] (the "SECOND REC SUPPLY AGREEMENT).
(b) Subject to the condition precedent that prior to [****] either (i)
SGS and EverQ have signed the Second REC Supply Agreement (and the obligations
thereunder shall be binding in all respects without condition) or (ii) SGS has
offered (which offer remains open and available for [****]) to EverQ to enter
into the Second REC Supply Agreement, REC shall be entitled to increase its
shareholding in EverQ from 15 % to 21 % (the "REC OPTION"). To exercise the REC
Option, REC shall inform both E and Q in writing of its intention (the "REC
OPTION EXERCISE LETTER"). In order to be binding, the REC Option Exercise Letter
must be received by E and Q not later than [****] following the date on which
REC first offers the Second REC Supply Agreement to EverQ. Upon timely receipt
of the REC Option Exercise Letter, E shall sell and transfer one share
representing 6 % of the EverQ share capital to REC by way of notarial deed. To
prepare such
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sale and transfer, E shall split its shares in EverQ correspondingly. The
purchase price of such 6% share shall be the Aggregate Equity Funding times 6%,
[****], calculated from the Signing Date, pro rated on a daily basis for partial
years assuming a 360-day year and 30-day months.
(c) If SGS has not offered the Second REC Supply Agreement to EverQ by
[****], REC shall still be bound to procure that SGS offers to EverQ the Second
REC Supply Agreement at the earliest date by which the production capacity in
SGS allows such an offers. The date such offer is received by EverQ is the "REC
OFFER DATE". The obligation of REC to make such an offer for the Second REC
Supply Agreement in conjunction with future capacity increases and the REC
Option shall both expire on [****].
(i) If by the REC Offer Date EverQ has already entered into one
or more alternative supply agreements that are similar in terms of volume and
duration with one or more third parties, the REC Option shall become void. In
addition, REC will be excluded from participating in future capital increases in
EverQ. REC hereby waives its corresponding subscription rights. In such a case,
all future capital increases shall be conducted [****]. The three preceding
sentences shall not apply to the extent the Q Prefential Offer according to
SECTION 3.5(C) is accepted; in such a case, REC shall be offered shares under
SECTION 3.5(C)(VI) to avoid dilution. If by the REC Offer Date EverQ has already
entered into one or more alternate supply agreements that are similar in terms
of volume and duration with one or more third parties, the REC obligation to
offer the Second REC Supply Agreement shall expire.
(ii) If by the REC Offer Date EverQ has not yet entered into
corresponding supply agreements with a third party, the REC Option shall remain
in place provided, however, that in addition to the purchase price for the 6%
share REC shall pay to EverQ an additional amount of [****] for the [****] of
delay (such amount to be pro rated for any fraction of such month) and [****]
for each [****] (such amount to be pro rated for any fraction of a month),
provided however that total purchase price payable by REC, including any
additional delay amounts, shall in no case be higher then the Fair Market Value
as defined in Article 5.3 (c). The REC subscription rights in future capital
increases shall remain untouched.
3.5 Capacity Expansion and Additional Financing.
(a) It is the intent of the Parties that EverQ shall have an initial
capacity to manufacture 30 MW per year (the "INITIAL CAPACITY"). The Parties
shall use reasonable best efforts to cause EverQ to achieve the Initial Capacity
as soon as practicable. It is also the intent of the Parties that EverQ shall in
the short-term, if economically viable, expand its manufacturing capacity to 120
MW (the "CAPACITY EXPANSION"). Without limiting the foregoing, each of the
Parties shall, and shall cause EverQ to, approve the Capacity Expansion, if
economically viable, and commence substantial activities in furtherance of the
Capacity Expansion within [****].
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(b) A majority of the Supervisory Board which includes at least one
Director designated by each of not less than two of the Parties to this
Agreement shall have the ability to approve a Capacity Expansion following a
determination by such majority of the Supervisory Board that the Capacity
Expansion is in the best interest of EverQ.
(c) Additional Financing. If, be it in relation to a Capacity
Expansion or otherwise, EverQ requests in writing from E, Q and REC additional
financing in addition to the funding as agreed by this Agreement (an "ADDITIONAL
FINANCING"), and the Shareholders approve the corresponding capital increase in
accordance with the Articles of Association (an "ADDITIONAL FINANCING REQUEST"),
the following shall apply:
(i) Subject to REC's rights set forth in paragraph (vii) below, Q
shall be offered in writing to provide such amount of an Additional Financing to
enable it to increase its ownership interest in EverQ to a level equal to (but
not in excess of) the percentage then held by E (the "Q PREFERENTIAL OFFER").
Unless otherwise agreed to by the Parties, the price per 1 % of EverQ equity
share (Stammeinlage) purchased by Q in any financing transaction to be completed
in accordance with the terms of this SECTION 3.5(C)(I) shall be [****]
(1) [****]
(2) [****]
(ii) Within [****] of receipt of the Grant Impunity Notice and
the Q Preferential Offer, Q shall be entitled to accept the Q Preferential Offer
by subscribing, in the form required by German law, to such number of shares in
EverQ [****] as is needed for Q to obtain an ownership interest equal to E in
EverQ. If, within [****] of receipt of the Grant Impunity Notice and the Q
Preferential Offer, Q has not accepted the Q Preferential Offer, then Q's right
to increase its ownership in EverQ to a level equal to the percentage then held
by E and [****] shall terminate.
(iii) Any capital increase of EverQ [****] shall be offered to
the Parties pro rata to their shareholdings. If one of the Parties does not
exercise the corresponding subscription rights in full within [****] of the date
that such subscription rights were offered to such Party, the remainder of the
subscription rights shall be offered to the other Party. Should the Parties
(together), not fully subscribe to the full amount of the capital increase, the
subscription rights to the remainder of the capital increase shall then be
offered to third party financial investors, but not to competitors of either
Party (in the reasonable good-faith determination by the Parties). The
Percentage Interests shall be appropriately and correspondingly adjusted in
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connection with any subscription by a Party of EverQ equity securities pursuant
to this SECTION 3.5(C)(III).
(iv) Without limiting the foregoing, if the Additional Financing
is of an amount that is insufficient to enable Q to increase its ownership in
EverQ to a level equal to E, as provided herein, and Q participates in such
Additional Financing to the full extent possible , then in connection with any
subsequent Additional Financing the Parties shall cause Q to be offered, in
writing, to provide such amount of the Additional Financing to enable Q to
increase its ownership in EverQ to a level equal to E (in accordance with the
terms herein) until such time as Q's ownership in EverQ reaches a level equal to
E.
(v) Except as otherwise specifically set forth in this Agreement,
the nature and material terms of any and all financing activities by EverQ
(including the selection of lenders, if any) shall be determined by the
Supervisory Board and/or pursuant to a resolution adopted at a shareholder
meeting, as applicable under German law.
(vi) Whenever a Q Preferential Offer is made by issuance of new
shares , REC shall be offered to purchase such number of new shares in EverQ
required in order to maintain its percentage interest in EverQ at that time in
order to avoid dilution of REC. The share price shall be the same as the [****].
(d) REC increase to (up to) 33.33%. If an Additional Financing takes
place and subject to the condition precedent that either (i) SGS and EverQ have
signed the Second REC Supply Agreement or (ii) SGS has offered (which offer
remains open and available for at least [****]) to EverQ to enter into the
Second REC Supply Agreement, REC shall be entitled to increase its shareholding
in EverQ to up to 33.33 % through one or more transactions. With the exception
of the subscription price, SECTION 3.5 (B) (including SECTION 3.5 (B) (VI) in
favor of Q and on the basis of the [****]) shall apply mutatis mutandis. Unless
otherwise agreed to by the Parties, the price per [****] of EverQ equity share
(Stammeinlage) purchased by REC in any financing transaction to be completed in
accordance with the terms of this SECTION 3.5(B) shall be the higher of:
(i) [****] of the Aggregate Equity Funding, plus [****] per
annum, calculated from the Closing Date, pro rated on a daily basis for partial
years assuming a 360-day year and 30-day months; and
(ii) [****]
(1) [****]
(2) [****]
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(3) [****]
(e) Relation between Sections 3.5(c) and 3.5(d), compensation
clause. To the extent that REC exercises its rights under Section 3.5 (d), Q's
rights under Section 3.5 (c) shall be limited to 50 % of the share capital in
EverQ not subscribed to by REC. If the resulting capital increases result in
other percentage interests of any Party than intended by Sections 3.5 (c)
through 3.5 (e), the Parties shall agree to sell and transfer split shares in
EverQ in amounts required to achieve the desired result. For the avoidance of
doubt, subject to the exercise of each Party's respective rights under Article
IV and Article V, neither Q nor REC shall be entitled to acquire or maintain a
equity position in EverQ that is in excess of the percentage of the outstanding
equity of EverQ held by E without the prior consent of E, and any holdings in
excess of such amount limitation will be subject to repurchase by E pursuant to
the purchase rights set forth in Section 5.3 hereof.
(f) Compensation for Grant Repayment Obligations. If EverQ is required
to repay part of the Government Investment Grant, the following will occur:
(i) E, Q and REC will loan EverQ the amount to be repaid and
EverQ will repay the part of the Government Investment Grant to the appropriate
government authorities.
(ii) The loan will be at [****].
(iii) The loan will be made in proportion to the cost of capital
ownership of the parents as follows: REC will make a loan in proportion to their
ownership percentage in EverQ and the remainder of the loan will be evenly split
between E and Q.
(iv) [****]
(g) EverQ Debt. E and Q have provided or will provide guarantees to
the EverQ banks. REC will be expected to provide corresponding guarantees. If
such guarantees are executed by the respective banks, the Parties shall share
the burden pro rata to their shareholding in EverQ at the time of such
execution.
(h) No Additional Obligation. No Party shall be required to provide
loan financing, equity contributions or any form of guarantee or credit support
for repayment for any
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funding obtained by EverQ, above their respective Additional Capital
Contribution and the obligations described in SECTION 3.5 (F) AND 3.5 (G). For
the avoidance of doubt, the rules laid down in SECTION 3.5 (C) AND (D) do not
oblige the Parties to provide additional funding to EverQ.
(i) Special expansion scenario. If there is no Capacity Expansion
[****], Q and REC shall each have the right to require a capital increase
sufficient to individually pass the 30 % shareholding threshold for appointing
two board members according to SECTION 3.6, provided that the necessary
requirements of merger regulations for passing that threshold are observed. The
parties will cooperate to exchange information and if necessary to do the
filings in order to accomplish this right. The share prices for Q and E shall be
as laid down in SECTION 3.5 (C)(I) for Q and SECTIONS 3.5 (C)(VI) and 3.5 (D)
for REC.
3.6 Directors. The Parties shall take all actions necessary to establish
the initial number of Directors designated to the Supervisory Board of EverQ at
four (4) and cause E to have the right to nominate and appoint two (2) Directors
including the chairman and Q and REC to have the right to each nominate and
appoint one (1) Director, provided, however, that Q and REC each hold not less
than [****] of the shares in EverQ. In cases of a split Supervisory Board, and
in such cases only, the chairman of the Supervisory Board shall have a deciding
vote. Each Party shall cause each Director appointed by it to perform his duties
as a Director fully in compliance with the terms of this Agreement and the
Articles of Association. None of the Parties shall be excused from the
performance of this Agreement on account of the failure to control such Director
nominated and appointed by it.
In any event of a change of the size or composition of the Supervisory
Board, the Parties shall take all actions necessary, including any amendments of
the Articles of Association, as far as legally admissible, to ensure that E
retains the right to appoint and revoke [****] of the members of the Supervisory
Board including the chairman for as long as E holds more than [****] of the
shares of EverQ.
Notwithstanding the foregoing, any Party holding an ownership interest of
more than [****] in EverQ shall have the right to appoint two (2) directors. If
this applies to all three Parties, all six Directors shall unanimously agree on
one (1) seventh Director which shall then be elected by all Parties. All Parties
shall take all actions necessary, including an amendment of the Articles of
Association, to establish the number of Directors of EverQ accordingly.
3.7 Indemnification. To the fullest extent permitted by German law, E, Q
and REC shall cause EverQ to indemnify and hold harmless each Director
designated to the Supervisory Board nominated by E, Q and REC from all losses,
liabilities, costs and expenses arising out of or relating to such Director's
actions in connection with any action taken within their authority and in their
capacity as a Director, except to the extent that
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such losses, liabilities, costs or expenses are caused by such Director's fraud,
bad faith or willful misconduct, and except to the extent that such Director's
actions comprised or caused breach of this Agreement by the Party who appointed
that Director.
ARTICLE IV.
Restrictions on Transfer; Right of First Refusal for Sale of Shares
4.1 Restrictions on Transfer; Exceptions. Each of the Parties agrees that
it shall not, either directly or indirectly, sell, transfer or dispose of
("TRANSFER") any Shares during the term of this Agreement, without complying
with the terms of this ARTICLE 4; provided, however, that the foregoing
restrictions shall not apply to Transfers of shares or other equity interests of
EverQ (i) in accordance with SECTIONS 3.4 OR 3.5 or (ii) by any Party to any
Affiliate of such Party or (iii) from any Affiliate of such Party to such Party
or to any Affiliate of such Party, provided always that the transferring Party
remains, and the transferee of such transferred Shares or equity interests
agrees in the appropriate form to be, bound by the terms of this Agreement to
the same extent that the original Parties are bound thereby. For the avoidance
of doubt, a Change of Control in a Party does not trigger the other Party's
right of first refusal under this SECTION 4.1.
4.2 Right to Notice. Other than those Transfers excepted under SECTION 4.1,
prior to any Party proposing to Transfer any portion of the Shares held by such
Party (the "SUBJECT SHARES") to a Third Party (an "ACQUISITION PROPOSAL"), the
proposed transferring Party (the "SELLING PARTY") shall provide to the other
Parties (the "NON-SELLING PARTIES") written notice of the Acquisition Proposal,
which notice shall include a reasonable description of all material terms and
conditions of or related to the Acquisition Proposal (the "ACQUISITION PROPOSAL
NOTICE").
4.3 Exercise of Right of First Refusal. Following receipt of the
Acquisition Proposal Notice by the Non-Selling Parties, each of the Non-Selling
Parties shall have [****] to provide written notice to the Selling Party (the
"ELECTION NOTICE") that it intends to elect to exercise its right of first
refusal. After delivery of the Election Notice to the Selling Party, the Parties
agree to negotiate in good faith the terms and conditions under which the
Non-Selling Party or Parties would acquire [****], all (but not less than all)
of the Subject Shares at issue, and the Non-Selling Parties shall have a right
of first refusal to purchase all (but not less than all) of the Subject Shares
on terms that:
(i) are reasonably equivalent to the terms set forth in the in
the Acquisition Proposal Notice, provided that the Non-Selling Parties shall not
have any obligation to agree to any terms which are unique to such Third Party,
or
(ii) are reasonably acceptable to the Selling Party.
The Parties agree that such good-faith negotiations will continue until the
earlier of (i) [****] from the date of delivery of the Election Notice or (ii)
such negotiations are
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terminated earlier by agreement between the Parties (the "NEGOTIATION PERIOD"),
during which period appropriate representatives of each Party shall, in good
faith, make themselves available to meet. During the Negotiation Period, the
Non-Selling Parties shall be permitted to conduct appropriate due diligence.
Delivery of the Election Notice shall not obligate the Non-Selling Party to
purchase the Subject Shares, but shall be delivered in good faith. [****]
4.4 Right to Sell to Third Party. Subject to compliance with the provisions
hereof, including SECTION 4.3 and SECTION 4.5, if (i) all Non-Selling Parties
fail to deliver an Election Notice within the time required, (ii) all
Non-Selling Parties fail to acquire the Subject Shares before the end of the
Negotiation Period and such failure to acquire is not due to the unreasonable
delay of the Selling Party or (iii) such negotiations are terminated earlier by
agreement between or among the Parties (the earlier to occur is referred to
herein as the "LAPSE DATE"), then the Selling Party shall have the right to
enter into a transaction with a Third Party to sell the Subject Shares at a
price and on terms no more favorable than as set forth in the Acquisition
Proposal Notice, provided that such Third Party acquires the Subject Shares
within [****] of the Lapse Date (the "SALE PERIOD"). All Parties shall approve
such transfer in a shareholders' meeting of EverQ.
4.5 Reinstatement of Right of First Refusal. In the event that the Third
Party fails to acquire the Subject Shares within Sale Period as described in
SECTION 4.4, the Selling Party shall not thereafter Transfer any shares without
first again offering such securities to the Non-Selling Party in the manner
provided in this ARTICLE IV.
4.6 Change of Control. The Parties agree that the provisions of this
ARTICLE IV shall not apply to, and shall in no way restrict, any Parties' right
or ability to engage in a Change of Control.
4.7 Co-Selling Rights. In the event that in conjunction with one or a
series of transactions contemplated by this Article IV, [****] or more of the
outstanding equity interest of EverQ are to be transferred to a third party,
such transaction or transactions shall not be completed until such third party
shall offer and, if such offer is accepted, agree to acquire the remaining
outstanding equity interests of EverQ.
4.8 Adherence by Third Party. No third party shall become a shareholder in
EverQ unless such third party signs a deed of adherence to the rights and
obligations imposed by ARTICLE IV, ARTICLE V, SECTIONS 9.5 THROUGH 9.10 AND
ARTICLE X. Such deed of adherence shall be in the form of a notarial deed and,
in addition, in a form acceptable by the Parties. All Parties hereby grant power
of attorney to the chairman of the supervisory board of EverQ, from time to
time, to accept such deed of adherence
4.9 Relation to Articles of Association. The procedure laid down in
SECTIONS 4.2 THROUGH 4.5 above also applies to the offer to the minority
shareholders contemplated in Section
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5.4, sentence 2, of the Articles of Association. This ARTICLE IV does not alter
any provision or provisions contained in the Articles of Association restricting
the transfer of shares. However, the Parties shall exercise all voting and other
rights available to them to ensure the implementation of the foregoing
provisions of this ARTICLE IV and any provisions contained in the Articles of
Association restricting transfers of shares are waived or suspended, if
applicable, to allow such sales and purchases to proceed as provided above.
ARTICLE V.
Term and Termination
5.1 Term. The term of this Agreement shall commence on the date hereof and
shall continue and remain in full force and effect, until this Agreement is
terminated in accordance with this ARTICLE 5.
5.2 Termination by mutual consent.
(a) This Agreement may be terminated by mutual written consent of all
Parties.
(b) In the event of termination pursuant to SECTION 5.2(A), the
consequences of Termination shall be agreed among the Parties in writing, unless
the form of a notarial deed is required under German law.
5.3 Expulsion for Breach
(a) Any of the Parties to this Agreement who are not in Material
Breach of this Agreement (for purposes of this SECTION 5.3, each a "REMOVING
PARTY" and collectively "REMOVING PARTIES") may trigger, pursuant to the terms
of this SECTION 5.3, the repurchase of all shares of EverQ held by such other
Party (an "EXPULSION", and the securities subject to such repurchase, "EXPULSION
Securities") if the Party subject to Expulsion (the "BREACHING PARTY") commits a
Material Breach of this Agreement or if the Breaching Party becomes subject to a
Bankruptcy Event. For the avoidance of doubt, this is an individual right of
each Removing Party which is not a Breaching Party.
(i) If the Breaching Party commits a Material Breach of this
Agreement, and if
(1) the Material Breach is incurable, the notice of
Expulsion ("EXPULSION NOTICE") must be made in writing [****] after the Removing
Party learns about the Material Breach.
(2) the Material Breach is curable, the Removing Party has
to request such cure in writing, [****] after it learns about the Material
Breach, granting the Breaching Party a cure period of another [****]. If the
Removing
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Party fails to cure such Material Breach within the [****], the notice of
Expulsion must be made in writing not later than [****] after the expiry of the
cure period.
(3) For the purposes of this SECTION 5.3, "MATERIAL BREACH"
is defined as (A) a material breach of this Agreement or any of the Concurrent
Agreements or the Second REC Supply Agreement that has had, or is reasonable
likely to have, a material adverse effect on the financial performance or
business prospects of EverQ, either in the short-term or the long-term; provided
that (B) a Material Breach shall include without limitation the failure of the
Breaching Party to comply with its obligation to pay all or any portion of its
Equity Commitment or perform its other obligations in accordance with ARTICLE 2.
(ii) If the Breaching Party becomes subject to a Bankruptcy
Event, the Expulsion Notice must be made in writing [****] after the Removing
Party learns about the Bankruptcy Event.
(b) Within a period of [****] after it has delivered an Expulsion
Notice, any Removing Party is entitled to start a process to determine the Fair
Market Value of the Expulsion Securities by indicating so to the Breaching Party
in writing (the "VALUATION REQUEST"). The Valuation Request may be combined with
the Expulsion Notice.
(c) The "FAIR MARKET VALUE" shall be determined based on the fair
market value for [****], without regard to any additional amount for a possible
control premium, and shall be determined as follows:
(i) If the Expulsion Securities are publicly traded on a national
stock market or exchange, the Fair Market Value shall be deemed [****].
(ii) If there is no active public market for the Expulsion
Securities, the value shall be the Fair Market Value thereof as determined by
good faith negotiation between the Parties. If such negotiation fails to
determine the Fair Market Value [****] after the date of the Valuation Request,
the Fair Market Value shall be determined as follows:
(1) Each Party shall retain at its expense an independent
third party investment bank or M&A advisor with expertise valuing companies such
as EverQ.
(2) Subject to execution of customary confidentiality
agreements by the independent third-party firms, EverQ shall provide or be
caused to provide to each firm all material information, including any material
changes in such information,
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reasonably necessary to value EverQ or reasonably requested by the firms. [****]
(3) Within [****] after the Valuation Request pursuant to
SECTION 5.3(B) above, each Party shall submit a final valuation proposal,
prepared in writing with a supporting analysis by its retained third-party firm,
to the other Party and the other Party's third party firm and to the
"ARBITRATOR." The "ARBITRATOR" shall be a Person with expertise in valuing
companies in the photovoltaic industry, shall not have a material business
relationship with any Party or EverQ and shall be reasonably acceptable to both
Parties. If the Parties agree upon a single Arbitrator, the decision of such
Arbitrator shall be final and binding on the Parties. If the Parties have not
agreed on a single Arbitrator, the Non-Breaching Party or Parties on the one
hand and the Breaching Party or Parties on the other hand will each select an
Arbitrator satisfying the criteria set forth herein and the selected Arbitrators
will select a third. In that case, the decision of a majority of the Arbitrators
will control and shall be final and binding on both Parties. In either case, the
arbitrator shall submit his decision to the Parties in writing within [****]
after receiving the two final valuation proposals.
(4) If one Party does not submit in a timely manner a final
valuation proposal, then the valuation proposal of the other Party shall be used
to establish the Fair Market Value.
(d) If an Expulsion is initiated pursuant to SECTION 5.3(A), the
Removing Party or Parties, notwithstanding any other remedy that they may have
pursuant to this Agreement or otherwise under German law, may, within a period
of [****] following decision of the Arbitrator pursuant to SECTION
5.3(C)(II)(3), purchase all of the Expulsion Securities legally or beneficially
owned by each of the Breaching Parties for a cash amount equal to [****] of such
Expulsion Securities (the "EXPULSION CALL RIGHT"). The Expulsion Call Right must
be exercised in writing or in the form required under German law (notarial deed
if EverQ still is a Limited Liability Company (GmbH)) and delivered to each of
the Breaching Parties. If there is more than one Removing Party, they are
entitled to the Expulsion Call right pro rata to their shareholdings in EverQ.
If one Removing Party does not exercise this right at all or not in full, the
other Removing Party is entitled to purchase the remaining shares as well.
(e) The closing of any purchase and sale of Expulsion Securities shall
take place at the office of EverQ within [****] of the exercise of the Expulsion
Call Right. At such closing, the aggregate purchase price for such purchase and
sale shall be paid in cash or other immediately available funds in exchange for
the Expulsion Securities to be sold.
(f) Promptly upon receiving notice by a Removing Party of its exercise
of its rights pursuant to SECTION 5.3(A), the Breaching Party shall take such
actions, and cause its Affiliates to take such actions, as may be necessary to
enable the Removing Party to consummate its rights.
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(g) Continuation of Business. Subject to SECTION 5.3 (I), during any
period in which a Party has the right to purchase or is purchasing the
Securities of the other Party pursuant to this SECTION 5.3, EverQ shall continue
its business in the ordinary course. The Parties and EverQ shall use their
reasonable best efforts to maintain and preserve the business of EverQ pending
the consummation of such purchase.
(h) In each case of Expulsion according to SECTION 5.3 (A), each Party
shall have the right to demand that all Parties hold a Shareholders' meeting of
EverQ without undue delay and vote in favor of the dissolution and winding up of
EverQ in accordance with applicable law and the Articles of Association, if
either (i) all of the Removing Parties waive their rights under SECTION 5.3(D)
in writing or (ii) none of the Removing Parties has exercised such rights within
the three-month period specified in SECTION 5.3(D), unless the Breaching Party
has offered to purchase the Shares of all of the Removing Parties at [****], has
demonstrated to the Removing Parties' satisfaction that it can complete and
provide payment for the shares within [****] of such offer, and the Removing
Parties have elected to sell their Shares to the Breaching Party,.
(i) If the applicable Expulsion Call Right is exercised, the Parties
shall cause the License Agreements and the REC Supply Agreements to remain in
full force and effect and the Breaching Party's Service Agreement to be
terminated. The Parties shall cause the Concurrent Agreements to be terminated
if the Parties proceed to dissolution of EverQ, as provided in (h) above (on the
effective date of dissolution).
(j) In the event of any Expulsion pursuant to this SECTION 5.3 and
except as otherwise set forth in this Agreement, this Agreement shall cease to
have further force or effect on the Breaching Party, provided that this event
shall not release any Party from any liability or obligation which has already
accrued as of the effective date of such event, and shall not constitute a
waiver or release of, or otherwise be deemed to prejudice or adversely affect,
any rights, remedies or claims, whether for damages or otherwise, which a Party
may have hereunder, at law, equity or otherwise or which may arise out of or in
connection with such event. This Agreement shall remain in full force and effect
among the Removing Parties.
(k) Without limiting any other remedies that may be available to any
Removing Party under this Agreement (but, for the avoidance of doubt, not under
SECTION 5.3. (A) THROUGH (J)) or under German law, in the event of a Material
Breach pursuant to SECTION 5.3(A)(I)(3)(B) in lieu of terminating this Agreement
as provided in this SECTION 5.3, the Removing Parties may, after the expiration
of any cure period applicable with respect to such Material Breach, upon written
notice to EverQ and the Breaching Party, cause the Percentage Interest of the
Breaching Party to be reduced to reflect the relative capital contributions of
the Parties actually contributed under SECTION 2.3 THROUGH 2.4, in which case
the Shares held by the Parties shall be correspondingly adjusted to reflect the
Percentage Interests, as adjusted pursuant to this SECTION 5.3(K). The Breaching
Party is obliged, to the extent required to obtain the result contemplated by
this SECTION 5.3(K), to split its share(s) in EverQ and transfer such share(s)
or
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split share(s), by way of a notarial deed, to the Non-Breaching Parties free of
charge and pro rata to their shareholdings in EverQ.
5.4 Termination after [****].
(a) Any Party may terminate this Agreement with six months written
notice to the other Parties anytime time following [****].
(b) If this Agreement is terminated pursuant to SECTION 5.4 (A) by one
Party, the other Parties may purchase, pro rata to their shareholding in EverQ
at the date of termination, the terminating party's Percentage Interest in EverQ
of [****] (the "TERMINATION CALL RIGHT").
(C) SECTION 5.3 (B) THROUGH (J) shall apply correspondingly, provided,
however, that the period to exercise the Termination Call Right is extended to
[****] following decision of the Arbitrator pursuant to SECTION 5.3. (C) (II)
(3).
5.5 Termination in Case of Sale and Transfer. If one Party (the
"TRANSFERRING PARTY") transfers all of the Shares beneficially owned by it to
the other Parties, any Concurrent Agreements to which such Transferring Party is
a party shall survive in accordance with their respective terms.
5.6 Post-Termination Covenants.
(a) Employee Issues. Each Party shall negotiate in good faith an
agreement providing that employees of the other Party working for EverQ (either
on a part-time or full-time basis) shall be made available full-time to EverQ
for such period as is reasonably required up to three months to effect an
orderly transition following the termination of this Agreement. The Parties
shall use their reasonable best efforts to make all such employees available on
this basis.
(b) Return of Confidential Information. Upon the termination of this
Agreement, each Party, at its own cost, shall promptly return to the Disclosing
Party any and all documents and materials constituting or containing
Confidential Information of the Disclosing Party which are in its possession or
control, or at its option, shall destroy such documents and materials and
certify such destruction in writing to the Disclosing Party.
(c) Survival of Rights and Obligations. The rights and obligations of
the Parties under Articles / Sections 3.7, V, VII, VIII, 9.2, 9.3, 9.4, 9.5,
9.6, 9.7 and X shall survive any termination of this Agreement.
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ARTICLE VI.
Closing Conditions
6.1 Conditions to Obligations of REC. The obligation of REC to fulfill its
obligations under this Agreement shall be subject to the satisfaction of each of
the following conditions, any of which may be waived, in writing, exclusively by
REC:
(a) Articles of Association. E and Q shall have voted to amend the
Articles of Association in accordance with the form set forth in EXHIBIT A-1.
(b) Supervisory Board Composition. The authorized size of the
Supervisory Board of EverQ shall have been established at four (4) positions and
Erik Sauar shall have been appointed to the Supervisory Board.
6.2 Conditions to the Obligations of E and Q. The obligation of E and Q to
fulfill their obligations under this Agreement shall be subject to the
satisfaction of each of the following conditions, any of which may be waived, in
writing, exclusively by E and Q:
(a) Legal Opinion. REC shall have received an opinion addressed to E
andQ, dated 2 November 2005, of REC's external legal adviser, law firm Selmer,
in a form and substance reasonably satisfactory to E and Q.
ARTICLE VII.
Warranties
7.1 Warranties of Q. Q hereby warrants in the form of an independent no
fault guarantee (rechtlich selbstaendiges verschuldensunabhaengiges
Garantieversprechen) within the meaning of Sec. 311 paragraph (1) German Civil
Code (Buergerliches Gesetzbuch) to REC and E as follows:
(a) Organization, Authority and Qualification. Q is a corporation or
other organization duly organized, validly existing and in good standing under
the laws of Germany. Q has all necessary power and authority to enter into this
Agreement and the Concurrent Agreements to which it is a party, to carry out its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. Q is duly licensed or qualified to do business
in Germany. The execution and delivery by Q of this Agreement and the Concurrent
Agreements to which it is a party, the performance by Q of its obligations
hereunder and thereunder and the consummation by Q of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
action on the part of Q, and no other corporate proceedings on the part of Q or
any of its Affiliates are required in connection therewith. This Agreement has
been, and upon its execution, each of the other Concurrent Agreements to which Q
is a party, will be, duly executed and validly delivered by Q, and
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(assuming, if applicable, due authorization, execution and delivery by each of
the other Parties hereto and thereto) this Agreement constitutes and, upon its
execution, each of the other Concurrent Agreements to which Q is a party, shall
constitute, a legal, valid and binding obligation of Q, enforceable against Q in
accordance with its terms.
(b) No Conflict. The execution, delivery and performance by Q of this
Agreement and the Concurrent Agreements to which it is a party do not and will
not (a) violate or conflict with any provision of its Articles of Association,
by-laws or similar organizational documents, or (b) conflict with or violate in
any material respect any German law or Governmental Order applicable to Q or any
of its assets, properties or business.
(c) Consents and Approvals. The execution, delivery and performance by
Q of this Agreement and the Concurrent Agreements to which it is a party do not
and will not require any consent, approval, authorization or other order of,
action by, filing with or notification to, any Governmental Authority or other
Third Party.
(d) Absence of Litigation. There is no legal or regulatory action
pending or, to the knowledge of Q, threatened against Q that seeks to restrain
or enjoin or otherwise challenge the legality, validity or enforceability of
this Agreement or the Concurrent Agreements to which Q is a party.
(e) Compliance with Laws; Permits. To the extent required to execute
and consummate this Agreement and the Concurrent Agreements or except as would
not materially impair Q's ability to perform its obligations hereunder and
thereunder:
(i) Q is not in conflict in any material respect with, in
material default under, or in material violation of, any Laws or Governmental
Orders applicable to Q's business, or by which Q believes it is reasonably
likely to be bound or affected. There is no material judgment, injunction, order
or decree that is binding upon Q which has, or would reasonably be expected to
have, the effect of prohibiting or materially impairing the conduct of EverQ as
currently contemplated to be conducted following the Closing Date.
(ii) Q and its Affiliates currently hold all material permits,
licenses, authorizations, certificates, exemptions, registrations and approvals
of Governmental Authorities (collectively, "PERMITS") necessary or proper for
the current operation of its business, such Permits are in full force and
effect, and no suspension, cancellation or non-renewal of any such Permit is
pending or, to the knowledge of the Q Parties, threatened.
(f) Intellectual Property. To the extent required to execute and
consummate this Agreement and the Concurrent Agreements or except as would not
materially impair Q's ability to perform its obligations hereunder and
thereunder, no contracts, licenses or agreements to which Q is a party
(including, without limitation, this Agreement and the Q License Agreement and
the transactions contemplated herein and therein) or, to the knowledge of Q, by
operation of law, will:
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(i) Result in EverQ, REC or E being bound by, or subject to, any
non-compete, exclusivity restriction or other restriction on the operation or
scope of its businesses; or
(ii) Result in EverQ, REC or E being obligated to pay any
royalties or other amounts to any Third Party.
(iii) Grant to any Third-Party any right to or with respect to
any Intellectual Property owned by, or licensed to, EverQ, REC or E.
(g) No Undisclosed Liabilities. Q has no Liabilities which,
individually or in the aggregate, could be reasonably expected to impair,
prevent or delay Q from performing any of its obligations under this Agreement.
(h) During the period beginning on 1 January 2005 and ending on the
Signing Date, Q has not suffered or been affected by any event (or events) that
has had or is reasonably likely to have a material adverse effect on the
financial performance or business prospects of Q, either in the short-term or
the long-term.
7.2 Warranties of E. E hereby warrants in the form of an independent no
fault guarantee (rechtlich selbstaendiges verschuldensunabhaengiges
Garantieversprechen) within the meaning of Sec. 311 paragraph (1) German Civil
Code (Buergerliches Gesetzbuch) to REC and Q as follows:
(a) Organization, Authority and Qualification. E is a corporation or
other organization duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization. E has all
necessary power and authority to enter into this Agreement and the Concurrent
Agreements to which it is a party, to carry out its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by E of this Agreement and the Concurrent Agreements
to which it is a party, the performance by E of its obligations hereunder and
thereunder and the consummation by E of the transactions contemplated hereby and
thereby have been duly authorized by all requisite action on the part of E, and
no other corporate proceedings on the part of E or any of its Affiliates is
required in connection therewith. This Agreement has been, and upon its
execution, each of the other Concurrent Agreements to which E is a party will
be, duly executed and validly delivered by E, and (assuming, if applicable, due
authorization, execution and delivery by each of the other Parties hereto and
thereto) this Agreement constitutes and, upon its execution, each of the other
Concurrent Agreements to which it is a party shall constitute, a legal, valid
and binding obligation of E, enforceable against E in accordance with its terms.
(b) No Conflict. The execution, delivery and performance by E of this
Agreement and the Concurrent Agreements to which it is a party do not and will
not (a) violate or conflict with any provision of its certificate of
incorporation or by-laws or similar
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organizational documents, or(b) conflict with or violate in any material respect
any Law or Governmental Order applicable to E or any of its assets, properties
or business.
(c) Consents and Approvals. The execution, delivery and performance by
E of this Agreement and the Concurrent Agreements to which it is a party do not
and will not require any consent, approval, authorization or other order of,
action by, filing with or notification to, any Governmental Authority or other
Third Party, where failure to obtain such consent, approval, authorization,
order or action, or to make such filing or notification, would not, individually
or in the aggregate, reasonably be expected to prevent or materially delay E
from performing any of its material obligations under this Agreement or the
Concurrent Agreements to which it is a party.
(d) Absence of Litigation. There is no legal or regulatory action
pending or, to the knowledge of E, threatened against E that seeks to restrain
or enjoin or otherwise challenge the legality, validity or enforceability of
this Agreement or the Concurrent Agreements to which it is a party.
(e) Compliance with Laws; Permits. To the extent required to execute
and consummate this Agreement and the Concurrent Agreements or except as would
not materially impair E's ability to perform its obligation hereunder and
thereunder:
(i) E is not in conflict in any material respect, in material
default under or in material violation of, any Laws or Governmental Orders
applicable to E's business or by which E believes it is reasonably likely to be
bound or subject. There is no material judgment, injunction, order or decree
that is binding upon E which has, or would reasonably be expected to have, the
effect of prohibiting or materially impairing the conduct of EverQ as currently
contemplated to be conducted following the Closing Date.
(ii) E and its Affiliates currently hold all material Permits
necessary or proper for the operation of its business as currently conducted,
such Permits are in full force and effect, and no suspension, cancellation or
non-renewal of any such Permit is pending or, to its knowledge, threatened.
(f) Intellectual Property. To the extent required to execute and
consummate this Agreement and the Concurrent Agreements or except as would not
materially impair E's ability to perform its obligation hereunder and
thereunder, no contracts, licenses or agreements to which E is a party
(including without limitation this Agreement and the E License Agreement and the
transactions contemplated herein or therein) or, to the knowledge of E, by
operation of law, will:
(i) Result in EverQ, REC or Q being bound by, or subject to, any
non-compete, exclusivity restriction or other restriction on the operation or
scope of its businesses; or
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(ii) Result in EverQ, REC or Q being obligated to pay any
royalties or other amounts to any Third Party.
(iii) Grant to any Third-Party any right to or with respect to
any Intellectual Property owned by, or licensed to, EverQ, REC or Q.
(g) No Undisclosed Liabilities. E has no Liabilities which,
individually or in the aggregate, could be reasonably expected to impair,
prevent or delay E from performing any of its obligations under this Agreement.
(h) During the period beginning on 1 January 2005 and ending on the
Signing Date, E has not suffered or been affected by any event (or events) that
has had or is reasonably likely to have a material adverse effect on the
financial performance or business prospects of E, either in the short-term or
the long-term.
7.3 Warranties of REC. REC hereby warrants in the form of an independent no
fault guarantee (rechtlich selbstaendiges verschuldensunabhaengiges
Garantieversprechen) within the meaning of Sec. 311 paragraph (1) German Civil
Code (Buergerliches Gesetzbuch) to E and Q as follows:
(a) Organization, Authority and Qualification. REC is a corporation or
other organization duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization. REC has all
necessary power and authority to enter into this Agreement and the Concurrent
Agreements to which it is a party, to carry out its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by REC of this Agreement and the Concurrent
Agreements to which it is a party, the performance by REC of its obligations
hereunder and thereunder and the consummation by REC of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
action on the part of REC, and no other corporate proceedings on the part of REC
or any of its Affiliates is required in connection therewith. This Agreement has
been, and upon its execution, each of the other Concurrent Agreements to which
REC is a party will be, duly executed and validly delivered by REC, and
(assuming, if applicable, due authorization, execution and delivery by each of
the other Parties hereto and thereto) this Agreement constitutes and, upon its
execution, each of the other Concurrent Agreements to which it is a party shall
constitute, a legal, valid and binding obligation of REC, enforceable against
REC in accordance with its terms.
(b) No Conflict. The execution, delivery and performance by REC of
this Agreement and the Concurrent Agreements to which it is a party do not and
will not (a) violate or conflict with any provision of its certificate of
incorporation or by-laws or similar organizational documents, or(b) conflict
with or violate in any material respect any Law or Governmental Order applicable
to REC or any of its assets, properties or business.
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(c) Consents and Approvals. The execution, delivery and performance by
REC of this Agreement and the Concurrent Agreements to which it is a party do
not and will not require any consent, approval, authorization or other order of,
action by, filing with or notification to, any Governmental Authority or other
Third Party, where failure to obtain such consent, approval, authorization,
order or action, or to make such filing or notification, would not, individually
or in the aggregate, reasonably be expected to prevent or materially delay REC
from performing any of its material obligations under this Agreement or the
Concurrent Agreements to which it is a party.
(d) Absence of Litigation. There is no legal or regulatory action
pending or, to the knowledge of REC, threatened against REC that seeks to
restrain or enjoin or otherwise challenge the legality, validity or
enforceability of this Agreement or the Concurrent Agreements to which it is a
party.
(e) Compliance with Laws; Permits. To the extent required to execute
and consummate this Agreement and the Concurrent Agreements or except as would
not materially impair REC's ability to perform its obligation hereunder and
thereunder:
(i) REC is not in conflict in any material respect, in material
default under or in material violation of, any Laws or Governmental Orders
applicable to REC's business or by which REC believes it is reasonably likely to
be bound or subject. There is no material judgment, injunction, order or decree
that is binding upon REC which has, or would reasonably be expected to have, the
effect of prohibiting or materially impairing the conduct of EverQ as currently
contemplated to be conducted following the Closing Date.
(ii) REC and its Affiliates currently hold all material Permits
necessary or proper for the operation of its business as currently conducted,
such Permits are in full force and effect, and no suspension, cancellation or
non-renewal of any such Permit is pending or, to its knowledge, threatened.
(f) Intellectual Property. To the extent required to execute and
consummate this Agreement and the Concurrent Agreements or except as would not
materially impair REC's ability to perform its obligation hereunder and
thereunder, no contracts, licenses or agreements to which E is a party
(including without limitation this Agreement and the REC License Agreement and
the transactions contemplated herein or therein) or, to the knowledge of REC, by
operation of law, will:
(i) Result in EverQ, E or Q being bound by, or subject to, any
non-compete, exclusivity restriction or other restriction on the operation or
scope of its businesses; or
(ii) Result in EverQ, E or Q being obligated to pay any royalties
or other amounts to any Third Party.
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(iii) Grant to any Third-Party any right to or with respect to
any Intellectual Property owned by, or licensed to, EverQ, E or Q.
(g) No Undisclosed Liabilities. REC has no Liabilities which,
individually or in the aggregate, could be reasonably expected to impair,
prevent or delay REC from performing any of its obligations under this
Agreement.
During the period beginning on 1 January 2005 and ending on the Signing
Date, REC has not suffered or been affected by any event (or events) that has
had or is reasonably likely to have a material adverse effect on the financial
performance or business prospects of REC, either in the short-term or the
long-term.
7.4 Additional Representations and Warranties by EVERQ. EverQ represents
and warrants that, as of the date of this Agreement:
(a) The Accounts and the Opening Balance Sheet.
(i) The Preliminary Balance Sheet of EverQ, a copy of which is
attached hereto as EXHIBIT 7.4.(A) (the "EVERQ BALANCE SHEET"), fairly presents
the financial position of EverQ in all material respects as of 30 September 2005
(the "BALANCE SHEET DATE") and the EverQ Balance Sheet has been prepared in
compliance with generally accepted accounting principles;
(ii) Since the Balance Sheet Date, EverQ has not incurred other
material liabilities other than liabilities which have arisen since the Balance
Sheet Date in the ordinary course of the business of EverQ.
(iii) As of the Balance Sheet Date EverQ has no material debts,
liabilities or obligations which are not disclosed, reflected or reserved in the
EverQ Balance Sheet.
(b) The Assets. With the exception of (aa) securities granted by EverQ
to its banks and (bb) customary reservation of title, EverQ has legal title to
all assets included in the EverQ Balance Sheet, and any such assets are free of
any encumbrance which materially reduces its value;
(c) Real Estate.
(i) EverQ has legal right, through ownership or rent, to use to
all its real property;
(ii) The real property of EverQ has no defects which limit its
use for the business activities carried out by EverQ;
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(d) Intellectual Property Rights.
(i) All intellectual property rights, technology and know how
used in the conduct of the contemplated operational business of EverQ, including
but not limited to the String Ribbon Technology, have been validly licensed by
EverQ
(ii) As of the date of this Agreement, no claims for violation of
intellectual property rights of a third party have been asserted in law suit or
otherwise in writing against EverQ, and to the knowledge of EverQ, the
operations of EverQ do not infringe intellectual property rights of third
parties.
(e) Personnel and Pensions.
(I) EXHIBIT 7.4 (E) contains a anonymous, but otherwise complete
list and description, status November 1st, 2005 of employees and all salary,
pension and other employment benefits and all other benefit plans for the
employees of EverQ;
(ii) There are no schemes in operation entered into or issued by
EverQ under which any employee is entitled to a commission, bonus or other
remuneration calculated by reference to all or part of the turnover, profits or
sales of the operations of EverQ, nor are there any share incentive or share
option schemes proposed or in operation in relation to EverQ, nor are there any
agreements under which any present or former employee, director, agent or
representative is entitled to a sum as a result of the transactions contemplated
hereby.
(f) Agreements and Undertakings.
(i) EverQ is not bound by any Material Agreement other than the
agreements listed in EXHIBIT 7.4 (F);
(ii) To the knowledge of EverQ, the agreements listed in EXHIBIT
7.4 (F) are legally binding and in full force and effect;
(iii) The agreements and undertakings listed in EXHIBIT 7.4 (F)
have been entered into at adequate customary and arms length terms and
conditions and EverQ is not in material breach of its obligations under such
agreements and undertakings;
(iv) Other than as contemplated by these agreements, EverQ has
not entered into any guarantee or similar agreements ensuring the performance of
the obligations of any third party.
(g) The Activities of EverQ.
(i) EverQ's activities have to date been conducted in accordance
with applicable laws, regulations, permits and authorisations;
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(ii) EverQ has all licenses and consents necessary to own and
operate its assets and to carry on its business as currently conducted and, to
the best knowledge of EverQ, there are no circumstances that may result in
revocation, suspension or modification of any of those licenses or consents or
that might prejudice their renewal;
(h) Taxes and Charges. As of the Balance Sheet Date, EverQ has no tax
obligations which are not disclosed in the EverQ Balance Sheet.
(i) Insurance. The insurance coverage purchased by EverQ, status
November 5, 2005 is listed in EXHIBIT 7.4 (H).
(j) Litigation.
(i) EverQ is not involved in any litigation, arbitration or any
other dispute, and EverQ is not aware of anything which may give rise to any
such litigation, arbitration or dispute;
(ii) EverQ is not subject to any investigation, inquiry, or
enforcement proceedings or process by any governmental, administrative of
regulatory bide nor is EverQ aware of anything which may give rise to such
investigation, inquiry, or process.
(k) Environment. To the best knowledge of EverQ, there are no facts or
circumstances which will give rise to any actual or potential environmental
liability on the part of EverQ. EverQ has not received any notice or intimation
of any complaint or claim from any person in respect of any matter which could
give rise to environmental liability on the part of EverQ.
(l) Documentation. As of the Closing Date all documentation concerning
EverQ, such as minutes of meetings of the Board of Directors and the
shareholders, contracts, undertakings, Government permits, books and accounts,
etc., will be freely available to REC.
(m) Suppliers and Customers.
(i) No supplier to EverQ has ceased/reduced or has informed EverQ
that it will cease/reduce supplying EverQ;
(ii) No customer of EverQ has terminated or has informed EverQ
that it will terminate any contract with EverQ or withdrawn or materially
reduced its customs with it.
7.5 Additional Representations and Warranties by E and Q pertaining to
EverQ.
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(a) E and Q represent and warrant, severally and not jointly, that:
(i) EverQ is founded and legally established under the laws of
Germany and registered in the commercial register of the local court at Stendal
with the registration no. HRB 4769 and with a registered share capital of [****]
fully paid in;
(ii) As of Closing Date and subject to registration by the local
court, EverQ will have the articles of association as attached as EXHIBIT A;
(iii) E and Q have good and marketable title to the shares to be
transferred to REC under this Agreement;
(iv) Upon consummation of the transfer of shares as contemplated
herein, REC will acquire from E and Q, respectively, good and marketable title
to the shares, free and clear of all liens and other encumbrances, with the
exception of the transfer restrictions as laid down in this Agreement or the
articles of association. No option has been granted to any other person to
acquire such shares, nor are there any pre-emption rights;
(v) E and Q have the full right, power and authority to transfer,
convey and sell the shares to REC at Closing;
(vi) As of the date of this Agreement, no resolutions have been
made by any of E and Q regarding issue of (i) new shares diluting REC's
ownership interest or requiring any contribution, (ii) convertible debt
instruments, (iii) debt instruments with a right of option to subscribe to new
shares or (iv) participating debt instruments.
(b) EverQ's Representations and Warranties E and Q represent and
warrant, severally and not jointly, that, to the best of their respective
knowledge, the representations and warranties given by EverQ in Section 7.4 are
true and not misleading as of the date of this Agreement.
ARTICLE VIII.
Liability and Limitations of Liability
8.1 Liability. In the event of a breach of any of the Warranties given by
any of the Parties (the "INDEMNIFYING PARTY") in Article VII or in that Party's
License Agreement, the other Parties and EverQ, each individually, shall have
the right to request in writing that the Indemnifying Party puts EverQ in the
position that it would have been in, had there been no breach of Warranty. If,
within eight weeks of such a request, the Indemnifying Party has not
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complied with the request, or if such remedy is impossible, the Indemnifying
Party shall indemnify EverQ in cash. If EverQ has become insolvent as a result
of such breach, or in the case and to the extent that the other Parties have
suffered a damage in excess or outside of the loss in value of their respective
holding in EverQ, the other Parties shall have the right to request in writing
that the Indemnifying Party indemnifies the other Parties in cash. For the
avoidance of doubt: The Indemnifying Party will not be obligated to double
compensate the same loss to either of the other Parties and EverQ.
8.2 Definitions. All of the claims described in SECTION 8.1 above shall be
referred to as the "INDEMNIFIABLE CLAIMS." Any party seeking such
indemnification is hereafter referred to as an "INDEMNIFIED PARTY".
8.3 Determination of the Amount of Damage.
(a) For the purpose of this ARTICLE 8, the damage shall consist of the
amount necessary to cure any event or set of facts causing such Warranty to be
breached or the loss in value of EverQ caused by such breach, whichever amount
is higher.
(b) In case of dispute, the amount of such damage (but for the
avoidance of doubt, not the existence of a breach) shall be determined by an
expert arbitrator ("Schiedsgutachter"). The expert arbitrator shall be a partner
of an internationally recognized accounting firm. If the Parties cannot agree on
the selection of such expert arbitrator within two weeks after receipt of a
request to appoint such arbitrator, the appointment shall be made by the
President of the Chamber of Industry and Commerce of Berlin. The decision of
such arbitrator shall be final and binding on the Parties and EverQ. The costs
of such arbitrator shall be borne by the Indemnifying Party and the Indemnified
Party respectively in proportion to their relative success according to the
determination delivered by the expert arbitrator who shall also determine such
proportion.
8.4 Limitations of Liability for Breach of Warranties.
(a) Each Indemnifying Party shall (in all cases) only be liable for
breach of Warranties under Article 7 to an Indemnified Party in respect of a
claim if the aggregate amount of all claims for which the relevant Indemnifying
Party would otherwise be liable under this Agreement to the relevant Indemnified
Party exceeds EUR 100,000.00 (in which case, however, the relevant Indemnified
Party shall be entitled to claim the total amount of such claims and not merely
the excess above said EUR 100,000.00).
(B) All claims for breach of Warranties are limited in time until
(verjaehren am) December 31, 2007; in the case that a warranty relating to
Intellectual Property is breached, including, without limitation, warranties
under the License Agreements, the period of limitation (Verjaehrungsfrist)
expires one year after the termination of this Agreement.
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8.5 GENERAL LIMITATION OF LIABILITY. EACH PARTY SHALL (IN ALL CASES) ONLY
BE LIABLE TO THE OTHER PARTIES OR EVERQ TO THE EXTENT THAT THE AGGREGATE AMOUNT
OF ITS LIABILITY FOR ALL CLAIMS OF WHATSOEVER NATURE MADE UNDER THIS AGREEMENT
AND THE LICENSE AGREEMENTS IS LIMITED TO EUR 15 MILLION, PROVIDED, HOWEVER, THAT
THE LIMITATIONS SET FORTH IN THIS SECTION 8.5 SHALL NOT APPLY IN THE CASE OF
FRAUD OR WILLFUL INTENT.
ARTICLE IX.
Additional Agreements
9.1 Marketing.
(a) EverQ shall always have the right to directly market its output of
Wafers, Cells, and Modules.
(b) If EverQ determines to market, distribute or sell Cells, Wafers or
Modules, as the case may be, via intermediaries, distribution partners, sales
agents or the like, it shall invite third parties to declare their interest to
participate in such marketing activities. In such a procedure, the Parties shall
be entitled to declare their interest as well. EverQ shall negotiate with all
the interested parties in good faith for not less than [****], and upon mutual
agreement, the negotiation period may be continued as long as necessary or
productive. The final decision shall be subject to approval by the Supervisory
Board.
(c) If any marketing agreement is entered into with E, Q or REC
(individually, the "RECIPIENT PARTY"), the Parties shall take all actions to
cause the pricing of EverQ's output to be based on an arms-length transfer price
to provide a reasonable margin for both EverQ and the Recipient Party, taking
into account the Recipient Party's anticipated marketing and distribution costs
as well as anticipated market prices.
9.2 Q Manufacturing Right of First Refusal.
(a) During the term of this Agreement and only for so long as E
remains a shareholder of EverQ, whenever E or Affiliates (and references to E in
this section 9.2 are deemed to include E Affiliates) wishes to form an
Alternative Venture [****], E will first offer Q a right of first refusal with
respect to participation in such [****] pursuant to the provisions of SECTION
9.2(B) AND (C).
(b) In the event that E determines to pursue the formation of an
[****], E shall deliver written notice to Q, offering Q the right of first
refusal to participate in any such [****], which notice shall refer to this
section of this Agreement and, subject to Q entering into a confidentiality
agreement reasonably satisfactory to E with
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respect to the existence of the notice and the subject matter thereof, provide a
description of the general framework of the [****], including without limitation
the proposed purpose and business objectives of the [****] and the contributions
proposed to be required of the parties to the [****] (the "E FIRST REFUSAL
NOTICE"). Upon the receipt of E First Refusal Notice, Q shall have [****] to
confirm in writing to E that it wishes to commence negotiations relating thereto
(the "Q CONFIRMATION NOTICE"). Upon E's receipt of the Q Confirmation Notice, E
and Q shall commence negotiations in good faith regarding the terms and
conditions of an agreement concerning the [****]. The parties will negotiate in
good faith for not less than [****], and upon mutual agreement, the negotiation
period may be continued as long as necessary or productive.
(c) If the parties execute a definitive agreement concerning the
[****], then the parties will be bound by such agreement. If a definitive
agreement is not executed [****] after the initial [****] negotiation period,
then either party, upon written notice to the other, may end negotiations. Upon
the end of negotiations (or, alternatively, if Q did not provide the Q
Confirmation Notice [****] after receipt of the E First Refusal Notice), the
applicable right of first refusal shall have no further effect and, without
limiting the foregoing, E may enter into an [****] with a Third Party within the
parameters of the general framework set forth in the E First Refusal Notice. The
final conditions may not be materially more favorable to the Third Party, taken
as a whole, than the last conditions offered to Q (and if in fact more
favorable, Q may elect to enter into that [****] on those terms in lieu of the
Third Party). Q shall not have any obligation to agree to any terms which are
unique to the third party. The final agreement with the Third Party is to be
submitted promptly to a person nominated by Q bound by a professional duty of
secrecy (Berufsverschwiegenheit).
(d) For the avoidance of doubt: During the term of this Agreement,
whenever E wishes to form one or more additional [****] after an E First Refusal
Notice has been provided, the procedure pursuant to the provisions of SECTION
9.2(B) THROUGH (C) shall be repeated.
9.3 REC Manufacturing Right of First Refusal .
(a) During the term of this Agreement, and only for so long as E shall
remains a shareholder of EverQ, whenever E or Affiliates (and references to E in
this SECTION 9.3 are deemed to include E Affiliates) wishes to form an
Alternative Venture active [****], E will first offer REC a right of first
refusal with respect to participation in such [****] pursuant to the provisions
of SECTION 9.3(B) AND (C).
(b) In the event that E determines to pursue the formation of an
[****], E shall deliver written notice to REC, offering REC the right of first
refusal to participate in any such [****], which notice shall refer to this
section of
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this Agreement and, subject to REC entering into a confidentiality agreement
reasonably satisfactory to E with respect to the existence of the notice and the
subject matter thereof, provide a description of the general framework of the
[****], including without limitation the proposed purpose and business
objectives of the [****] and the contributions proposed to be required of the
parties to the [****] (the "E FIRST REFUSAL NOTICE"). Upon the receipt of E
First Refusal Notice, REC shall have [****] to confirm in writing to E that it
wishes to commence negotiations relating thereto (the "REC CONFIRMATION
NOTICE"). Upon E's receipt of the REC Confirmation Notice, E and REC shall
commence negotiations in good faith regarding the terms and conditions of an
agreement concerning the [****]. The parties will negotiate in good faith for
not less than [****], and upon mutual agreement, the negotiation period may be
continued as long as necessary or productive.
(c) If the parties execute a definitive agreement concerning the
[****], then the parties will be bound by such agreement. If a definitive
agreement is not executed [****] after the initial [****] negotiation period,
then either party, upon written notice to the other, may end negotiations. Upon
the end of negotiations (or, alternatively, if REC did not provide the REC
Confirmation Notice within [****] after receipt of the E First Refusal Notice),
the applicable right of first refusal shall have no further effect and, without
limiting the foregoing, E may enter into an [****] with a third party within the
parameters of the general framework set forth in the E First Refusal Notice. The
final conditions may not be materially more favorable to the third party, taken
as a whole, than the last conditions offered to REC (and if in fact more
favorable, REC may elect to enter into that [****] on those terms in lieu of the
third party). REC shall not have any obligation to agree to any terms which are
unique to the third party. The final agreement with the third party is to be
submitted promptly to a person nominated by REC bound by a professional duty of
secrecy (Berufsverschwiegenheit).
(d) For the avoidance of doubt: During the term of this Agreement,
whenever E wishes to form one or more additional [****] after an E First Refusal
Notice has been provided, the procedure pursuant to the provisions of SECTION
9.3(B) THROUGH (C) shall be repeated.
(e) REC shall not be entitled to exercise or otherwise avail itself of
the rights set forth in this Section 9.3 if (i) REC or SGS materially breaches
any continuing supply agreement with E or EverQ or (ii) if REC or SGS shall have
failed to offer to EverQ the Second REC Supply Agreement and EverQ shall have
entered into one or more corresponding (in terms of similar duration or volume)
supply agreements with one or more third parties.
9.4 Relation of Sections 9.2 and 9.3. If an Alternative Venture falls under
both SECTION 9.2 AND SECTION 9.3 and both Q and REC submit their respective
Confirmation Notice, the Parties shall commence three partite
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negotiations. Unless agreed otherwise between Q and REC, such part of the
Alternative Venture that shall not remain with E shall be offered to Q and REC
[****].
9.5 [****]. During the term of this Agreement, and for a period of [****]
after its expiration or termination, neither Q nor REC shall, directly or
indirectly, engage in a [****]
(a) Subject to SECTION 9.5(C) below, [****]
(b) [****]
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(c) The covenants contained in SECTION 9.5(A) shall be construed as a
series of separate covenants, one for each county, city, state and country of
the geographic scope. Except for geographic coverage, each such separate
covenant shall be deemed identical in terms to the covenant contained in SECTION
9.5(A). If, in any judicial proceeding, a court refuses to enforce any of such
separate covenants (or any part thereof), then such unenforceable covenant (or
such part) shall be eliminated from this Agreement to the extent necessary to
permit the remaining separate covenants (or portions thereof) to be enforced. In
the event that the provisions of this SECTION 9.5 are deemed to exceed the time,
geographic or scope limitations permitted by applicable law, then such
provisions shall be reformed to the maximum time, geographic or scope
limitations, as the case may be, permitted by applicable laws.
(d) Each Party agrees that if it breaches any provision of this
SECTION 9.5, the other Party shall be entitled to, in addition to any other
right or remedy otherwise available to it, an injunction from a German court
restraining such breach or threatened breach and to seek specific performance of
any such provision of this SECTION 9.5.
(e) If Q or REC wish to engage in a [****], they will need the prior
written approval of E which approval shall not be unreasonably withheld if the
envisaged [****] employs a technology that is, from a jointly appointed
independent expert's point of view, not closely related to the technology
employed by E.
9.6 Cooperation to Pursue Tax Efficiencies. For so long as at least two
Parties beneficially own any Shares, such Parties shall and shall cause their
Affiliates to assist each other and EverQ to pursue any and all tax efficiencies
available to:
(a) EverQ in the operation of its business; and
(b) the other Parties as shareholders of EverQ; provided that neither
Party shall be required to expend any monies or incur any cost or liability in
connection therewith. Without limiting the foregoing, the Parties acknowledge
that E intends to pursue tax efficiencies with respect to its ownership of and
contributions to EverQ within the six month period following the Closing Date,
and Q and REC agree to cooperate with E in the achievement of those
efficiencies, including by amending this Agreement or any of the Concurrent
Agreements, so long as any action taken with respect to the achievement of E's
tax efficiencies neither alters the fundamental agreements of the Parties or
otherwise adversely affects Q or REC or EverQ. Without limiting the foregoing,
the Parties expressly agree that at the discretion of E, the Parties shall cause
EverQ to make an election under Treas. Reg. Section 1.7701-3(c) to be treated as
a partnership for U.S. federal income tax purposes and no Party shall take any
action inconsistent with such election, so long as such election neither alters
the fundamental agreements of the Parties or otherwise adversely affects Q or
REC or EverQ.
9.7 Confidentiality.
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(a) Definition. "CONFIDENTIAL INFORMATION" means any information: (i)
disclosed by one Party (the "DISCLOSING PARTY") to any other Party (the
"RECEIVING PARTY"), which, if in written, graphic, machine-readable or other
tangible form is marked as "CONFIDENTIAL" or "PROPRIETARY", or which, if
disclosed orally or by demonstration, is identified at the time of initial
disclosure as confidential and reduced to writing and marked "CONFIDENTIAL"
within [****] of such disclosure; or (ii) which is otherwise referred to as
Confidential Information under this Agreement or any License Agreement.
(b) Confidential Information and Exclusions. Notwithstanding SECTION
9.5(A) (Definition) above, Confidential Information shall exclude information
that: (i) was independently developed by the Receiving Party without using any
of the Disclosing Party's Confidential Information; (ii) becomes known to the
Receiving Party, without restriction, from a source other than the Disclosing
Party that had a right to disclose it; (iii) was in the public domain at the
time it was disclosed or becomes in the public domain through no act or omission
of the Receiving Party; or (iv) was rightfully known to the Receiving Party,
without restriction, at the time of disclosure.
(c) Confidentiality Obligation. The Receiving Party shall treat as
confidential all of the Disclosing Party's Confidential Information and shall
not use such Confidential Information except as expressly permitted under this
Agreement or a License Agreement or in connection with EverQ's activities.
Without limiting the foregoing, the Receiving Party shall use at least the same
degree of care that it uses to prevent the disclosure of its own confidential
information of like importance, but in no event with less than reasonable care,
to prevent the disclosure of the Disclosing Party's Confidential Information,
subject to SECTION 9.5(D) (Legal Disclosure) below.
(d) Legal Disclosure. Notwithstanding anything herein to the contrary,
a Receiving Party has the right to disclose Confidential Information without the
prior written consent of the Disclosing Party: (i) as required by any court or
other Governmental Authority, or by any stock exchange the shares of any Party
are listed on; (ii) as otherwise required by law, or (iii) as advisable or
required in connection with any government or regulatory filings, including
without limitation, filings with any regulating authorities covering the
relevant financial markets. If a Receiving Party believes that it will be
compelled by a court or other authority to disclose Confidential Information of
the Disclosing Party, it shall give the Disclosing Party prompt written notice
so that the Disclosing Party may take steps to oppose such disclosure.
(e) Remedies. If a Receiving Party breaches any of its obligations
under this SECTION 9.7, the Disclosing Party shall be entitled to seek equitable
relief to protect its interest therein, including injunctive relief, as well as
money damages.
(f) General Knowledge. The Receiving Party shall have no obligation to
limit or restrict the assignment of its employees or consultants as a result of
their having had access to the Disclosing Party's Confidential Information. The
restrictions regarding Confidential
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Information shall not be construed to limit any Party's right to independently
develop or acquire products, processes or concepts without use of the Disclosing
Party's Confidential Information, even if similar. Furthermore, notwithstanding
the restrictions regarding Confidential Information, the Receiving Party shall
be free to use for any purpose the general knowledge resulting from access to
work with or exposure to the Disclosing Party's Confidential Information,
provided that the Receiving Party shall maintain the confidentiality of the
Confidential Information as provided herein. The term "GENERAL KNOWLEDGE" means
information in non-tangible form which may be retained by persons who have had
access to Disclosing Party's Confidential Information, including ideas,
concepts, know-how or techniques contained therein.
9.8 Reasonable Efforts. Subject to the terms and conditions provided in
this Agreement, all Parties shall each use commercially reasonable efforts to
take promptly, or cause to be taken, all actions, and to do promptly, or cause
to be done, all things necessary, proper or advisable under applicable Laws and
regulations to consummate and make effective the transactions contemplated
hereby, to obtain all necessary waivers, consents and approvals and to effect
all necessary registrations and filings and to remove any injunctions or other
impediments or delays, legal or otherwise, in order to consummate and make
effective the transactions contemplated by this Agreement for the purpose of
securing to the other the benefits contemplated by this Agreement.
9.9 Standstill.
(a) For a period commencing with the date hereof and [****], neither Q
nor any of its agents shall,, without the prior written consent of E or its
board of directors: acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of E or any subsidiary thereof,
or of any successor to or person in control of E, or any assets of E or any
subsidiary or division thereof or of any such successor or controlling person;
make, or in any way participate, directly or indirectly, in any "solicitation"
of "proxies" to vote (as such terms are used in the rules of the Securities and
Exchange Commission ("SEC")), or seek to advise or influence any person or
entity with respect to the voting of any voting securities of E; make any public
announcement with respect to, or submit a proposal for, or offer of (with or
without conditions) any extraordinary transaction involving E or any of its
securities or assets; form, join or in any way participate in a "group" as
defined in Section 13(d)(3) of the Exchange Act, in connection with any of the
foregoing; otherwise act or seek to control or influence the management, Board
of Directors or policies of E; take any action that could reasonably be expected
to require E to make a public announcement regarding the possibility of any of
the events described in this SECTION 9.9; or request E or any of its agents,
directly or indirectly, to amend or waive any provision of this SECTION 9.9.
(b) The restrictions in this SECTION 9.9 shall apply, mutatis
mutandis,
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(i) to E and its agents regarding any transactions in any voting
securities of Q and / or REC, and
(ii) to Q and its agents regarding any transactions in any voting
securities of REC.
(iii) to REC and its agents regarding any transactions in any
voting securities of E and / or Q.
9.10 Employee Matters. Pursuant to the Services Agreements, to be entered
into [****] of the Signing Date, the Parties intend to provide certain
infrastructure, management, operational, technology support, engineering,
development and other services to EverQ. In addition, the Parties intend to use
commercially reasonable efforts to hire and retain employees for EverQ. The
Parties shall cause the employees and agents of EverQ to abide by E's, and,
whenever applicable, Q's and REC's, public company policies, including without
limitation E's, and, whenever applicable, Q's and REC's, insider trading policy
and obtain a written acknowledgement from each such employee and agent
acknowledging that such employee or agent is subject to such policies.
9.11 Covenant Regarding REC Services Agreement . The Parties shall, and
shall cause EverQ to enter into the REC Services Agreements within [****]
following the Signing Date. The services provided by REC pursuant to the REC
Services Agreements (i) shall be provided by REC to EverQ on a market-rate or
cost-plus basis, and (ii) shall include, but not be limited to the following
services: general advice regarding management issues in connection with the
establishment and expansion of EverQ; assistance with management staff selection
and recruitment process; advice regarding corporate and organizational structure
considerations; advice and support regarding the EverQ financing activities;
advice and assistance in EverQ and administrative matters, making, where
appropriate, the Parties' suppliers available to EverQ and advising EverQ staff
in this respect; advice and support in connection with the transfer of the
Parties' technology to EverQ; technology support; design and engineering
support; and human resources management and recruitment support. The Services
Agreement shall provide that the provision of services by the Parties prior to
the execution and delivery of the Services Agreement shall be deemed to have
been provided on the terms and conditions of the Services Agreement as if the
Services Agreements were entered into on the Closing Date.
ARTICLE X.
Miscellaneous
10.1 Expenses . Except as specifically provided for in this Agreement, each
of the Parties shall bear its respective expenses, costs and fees (including
attorneys' fees) in connection with the transactions contemplated hereby,
including the preparation, execution and delivery of this Agreement and the
Concurrent Agreements and compliance herewith and therewith, whether
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or not the transactions contemplated hereby or thereby shall be consummated.
However, the costs related to (i) the EverQ representation in the preparation,
execution and delivery of this Agreement and the Concurrent Agreements and
compliance herewith and therewith and (ii) notarization and registration of the
capital increase and amendments of the Articles of Association shall be borne by
EverQ.
10.2 Further Assurances. If, at any time after the Closing Date, any
further action is necessary or desirable to carry out the purposes of this
Agreement or to vest EverQ with full right, title and possession to all assets,
property, rights, privileges, powers and franchises contemplated by this
Agreement, each Party will and will cause its Affiliates to take all such lawful
and necessary action, so long as such action is consistent with this Agreement.
10.3 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) sent by next-day or overnight mail or delivery or (c) sent by
facsimile, as follows:
As to E, Inc.: Evergreen Solar, Inc.
138 Bartlett Street
Marlboro, MA 01752 USA
Attention: Richard Feldt
Richard Chleboski
Phone: +________________
Fax: +_________________
with a copy to: Wilson Sonsini Goodrich & Rosati, Professional Corporation
12 East 49th Street
New York, NY 10017 USA
Attention: Robert Sanchez
Robert O'Connor
Phone: 1 212 999-5800
Fax: 1 650 493-6811
As to Q AG: Q-Cells AG
Guardianstr. 16
D-06766 Thalheim, Germany
Attention: Anton Milner
Dr. Hartmut Schuening
Phone: +49-34 94-66 8-60
Fax: +49-34 94-66 8-777
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with a copy to: VAN AUBEL Rechtsanwaelte
Leibnizstr. 49
D-10629 Berlin, Germany
Attention: Dr. Thomas van Aubel
Phone: +49-30-31 51 90 0
Fax: +49-30-31 51 90 90
As to REC: Renewable Energy Corporation
Veritasveien 14,
N-1323 Hovik, Norway
Attention: ____________
Phone: +________________
Fax: +_________________
with a copy to: ________
or, in each case, at such other address as may be specified in writing to
the other parties hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day
delivered, (x) if by next-day or overnight mail or delivery, on the day
delivered, or (y) if by facsimile, on the day on which such facsimile was sent;
provided that the Party providing notice pursuant to facsimile shall have
received a confirmation of receipt of such facsimile transmission.
10.4 Governing Law and Dispute Resolution.
(a) This Agreement shall be construed in accordance with and governed
by the laws of the Federal Republic of Germany.
(b) The Parties shall try to settle any disputes by way of mediation.
(c) All disputes arising in connection with this Agreement or its
validity or any agreement provided herein which cannot be resolved by mutual
agreement of the Parties or mediation shall be finally settled in accordance
with the Arbitration Rules of the German Institution of Arbitration e.V. (DIS)
without recourse to the ordinary courts of law (except for challenges to the
validity of shareholder resolutions which shall be submitted to the competent
courts). The place of arbitration is Berlin, Germany. The arbitral tribunal
consists of three arbitrators. The arbitrators must be capable of being
appointed a judge in accordance with the relevant German legal rules. The
substantive law of the Federal Republic of Germany is applicable to the dispute.
The language of the arbitral proceedings is English.
10.5 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective heirs, successors and
permitted assigns.
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10.6 Assignment. Other than as expressly otherwise provided herein, this
Agreement shall not be assignable or otherwise transferable by any Party hereto
without the prior written consent of all the other parties hereto, and any
purported assignment or other transfer without such consent shall be void and
unenforceable; provided, however, that any Party may assign this Agreement:
(a) to any of its Affiliates so long as it will be made at the same
time as a transfer of its Shares to such Affiliate specifically permitted by
this Agreement;
(b) in connection with the sale by a Party of all of the Shares
beneficially owned by such Party as specifically provided by this Agreement,
including by way of the Change of Control of such Party.
(c) For the avoidance of doubt, no Party shall be obligated to obtain
the consent of any other Party (under this Section 10.6) solely by virtue of a
Change of Control of such Party.
10.7 No Third Party Beneficiaries. Except as specifically provided by this
Agreement, nothing in this Agreement shall confer any rights upon any Third
Party.
10.8 Foreign Corrupt Practices Act.
(a) The Parties recognize that the United States Foreign Corrupt
Practices Act of 1977 (the "ACT") shall be applicable to EverQ, its Affiliates
and its designated directors, officers and personnel in EverQ, even if EverQ
does not conduct any business in the United States of America. The Parties
recognize that the Act prohibits the payment or giving of anything of value
either directly or indirectly to a government official for the purpose of
influencing an act or decision in his or her official capacity, or for the
purpose of inducing him or her to use his or her influence with his or her
government to assist a company in obtaining or retaining business for or with,
or directing business to, any Person.
(b) Each Party shall each use its reasonable best efforts to ensure
that no part of EverQ capital or other funds will be accepted or used by the
Company for any purpose, nor will it take any action, which would constitute a
violation of any law of the various jurisdictions in which it conducts business
or of the Act.
Should either Party ever receive, directly or indirectly, a request that
any of them believes will or might constitute a violation of the Act, it shall
immediately notify the Supervisory Board of EverQ.
10.9 Sarbanes-Oxley and Nasdaq Covenant. The Parties shall cause EverQ to
perform such acts as any of the Parties shall request as reasonably necessary to
permit such Party to comply with all Laws and regulations applicable to
companies in general and publicly reporting companies in particular including
but not limited to: (i) the Exchange Act and the Securities Act
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and the rules of the SEC promulgated thereunder; (ii) the Sarbanes-Oxley Act of
2002 and the rules and regulations of the SEC promulgated thereunder; (iii) the
Nasdaq Marketplace Rules; (iv) similar laws, regulations or rules under
European, German or Norwegian law. Without limiting the foregoing, the Parties
shall cause EverQ to establish, maintain, adhere to and enforce a system of
internal accounting controls which are effective in providing assurance
regarding the reliability of financial reporting and the preparation of
financial statements in accordance with US GAAP.
10.10 Amendment, Waivers. No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth
in writing and duly executed by each of E, Q and REC.
10.11 Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings both written and oral,
between or among any of the Parties with respect to the subject matter hereof.
10.12 No Joint Venture or Partnership. Notwithstanding anything contained
in this Agreement or the Concurrent Agreements to the contrary, including the
use of the terms "joint venture", "EverQ" and similar terms, nothing contained
in this Agreement or the Concurrent Agreements is intended to, or shall be
deemed to, create a partnership or joint venture relationship among the Parties
or any of their Affiliates for any purpose, including tax purposes. The Parties
shall hold individual shares in EverQ. There shall be no joint ownership of such
shares. Neither of the Parties nor any of the Affiliates will take a position
contrary to the foregoing.
10.13 Language for Joint Venture and this Agreement. All agendas, notices,
other documentation relating to (i) EverQ's interaction with the Parties, (ii)
documentation provided to the Parties and (iii) interaction between the
Shareholders, including without limitation this Agreement, meetings of the
Supervisory Board and the Shareholders of EverQ, and EverQ's financial
statements, shall be prepared in and entered into the English language. In the
event of any dispute concerning the construction or meaning of this Agreement,
the text of the Agreement as written in the English language shall prevail over
any translation of this Agreement that may have been or will be made.
10.14 Voting and other rights. Each of the Parties shall join with the
other Party in exercising all voting rights and other rights and powers of
control as are respectively available to them in relation to EverQ and their
beneficial shareholdings therein under the Articles of Association for the time
being in force and shall each take or refrain from taking all other appropriate
action within their respective powers so as to procure that at all times during
the subsistence of this Agreement all provisions concerning the structure and
organisation of EverQ and the regulation by the Parties of its affairs set out
in this Agreement are duly observed and given full force and effect and all
actions required of the Parties are carried out in a timely manner. Without
prejudice to the generality of the foregoing each Party shall procure that
(subject to their fiduciary duties) each of the directors appointed by the
Parties, as provided
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herein, shall execute and do all acts and things and give and confer all such
powers and authorities as they would have been required to execute, do, give
and/or confer had they been a Party hereto and had consented in the same terms
as the Party which appointed them.
10.15 Severability. In the event that any term, condition or provision of
this Agreement is held to be or become invalid or be a violation of any
applicable Law, statute or regulation, the same shall be deemed to be deleted
from this Agreement and shall be of no force and effect and the Agreement shall
remain in full force and effect as if such term, condition or provision had not
originally been contained in this Agreement. The validity and enforceability of
the other provisions shall not be affected thereby. In such case or in the event
that this Agreement should have a gap, the Parties hereto shall agree on a valid
and enforceable provision completing this Agreement, coming as close as possible
to the economic intentions of the Parties. In the event of a partial invalidity
(Teilnichtigkeit) the Parties agree that this Agreement shall remain in force
without the invalid part. This shall also apply if parts of this Agreement are
partially invalid (teilnichtig).
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SCHEDULE 3.4
Criteria / Main Principles of Second REC Supply Agreement
[****]
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