Security Holders
AGREEMENT
between
Scandinavian Energy Finance Limited
and
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INDEX
1. Definitions.................................................................................2
2. Scope of the Agreement......................................................................4
3. The Company.................................................................................5
4. Protective Covenants........................................................................6
5. Option......................................................................................7
6. Dealing in Shares...........................................................................8
7. Indemnification.............................................................................9
8. Compliance with this Agreement.............................................................11
9. Term and termination.......................................................................11
10. Invalidity.................................................................................13
11. Waiver.....................................................................................13
12. Assignment.................................................................................13
13. Counterparts...............................................................................14
14. No Partnership or Agency...................................................................14
15. Applicable Law.............................................................................14
16. Arbitration................................................................................14
17. US Tax Election............................................................................14
AGREEMENT
This Agreement is made this ___ day of March, 2002 between
1. Scandinavian Energy Finance Ltd, an Irish company with the
address c/o ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
International Financial Service Centre, ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ("SEFL");
and
2. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a Swedish citizen with personal code 530710-6210 and
residing at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇, ▇▇-▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
("Ernstson").
WHEREAS, 95 % of the shares of the Gigantissimo 2321 AB to be renamed Narvarme
Acqusition III AB (the "Company") are now held by Ernstson as set out in
Schedule 1; and
WHEREAS, the Company owns all of the outstanding shares of Gigantissimo 2323 AB
(Swedco 2) and Gigantissimo 2324 AB (Swedco 1); and
WHEREAS, the Company has issued one convertible debenture loan which has been
subscribed for by SEFL and one convertible subordinated loan which has been
subscribed for by Lansforsakringar; and
WHEREAS, Ernstson has granted SEFL an option to acquire all of his shares in the
Company.
NOW, THEREFORE, the parties agree as follows.
1. Definitions
1.1 Terms used
a) "Act" means the Swedish Companies Act (1975:1385);
b) the "Agreement" and this "Agreement" shall mean the
agreement between the parties, being the subject hereof;
c) the "Articles of Association" shall mean the articles of
association of the Company as to be seen from the document
attached hereto (Schedule 2);
d) the "Board" shall mean the board of directors of the Company;
e) "Business Day" means any day (other than a Saturday or Sunday)
on which clearing banks in the city of Stockholm are open for
the transaction of normal USD and SEK banking business;
f) "the Company" shall mean Gigantissimo 2321 AB, registered with
number 556614-6642 and whose registered office is at
▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇▇▇;
g) the "Directors" shall mean the directors of the Company;
h) "Group" means the Company and its direct and indirect
subsidiaries from time to time;
i) "Group Company" means the Company or any of its direct or
indirect subsidiaries;
j) "Lansforsakringar Agreement" means the Shareholders Agreement
to be entered into between Ernstson, SEFL and Lansforsakringar
regarding their shareholding in the Company;
k) "Option" shall mean the option granted by Ernstson to SEFL to
acquire his Shares;
l) a "Shareholder" shall mean any holder of Shares from time to
time;
m) the "Shares" shall mean all stocks, convertible bonds,
warrants, debentures, options to subscribe for new shares and
securities of any kind now or hereafter issued by the Company
including for the avoidance of doubt, any preference shares,
whether convertible or not, and carrying a right of
participation in the profit or assets of the company, in each
case including all allotments, offers, rights, bonuses
benefits and advantages whatsoever which accrue, are offered
or arise in respect thereof, and a reference to the Shares of
a party hereto shall mean all Shares held by that party at any
time;
n) "Transferee" means any person to whom Shares or the Option, as
the case may be, have been transferred (except for
Lantbrukskredit or its transferees);
1.2 Schedules
The Schedules form part of this Agreement and shall have the same
force and effect as if set out in the body of this Agreement and
references to this Agreement include the Schedules.
1.3 Clause Headings
Clause headings are for convenience of reference only and shall not
affect the construction of this Agreement.
1.4 Interpretation
In this Agreement, unless the contrary intention appears, a reference
to
a) a clause or schedule shall be construed as a reference
to a clause of this Agreement or a schedule thereto,
respectively;
b) a provision of law is a reference to that law as amended or
re-enacted;
c) a person includes its successors and assigns;
d) a "subsidiary" shall be construed in accordance with the Act;
e) a document in the "agreed form" is a reference to a
document in a form approved and for the purposes of
identification signed by or on behalf of the parties; and
f) "persons" includes a reference to any natural or legal person,
body corporate, unincorporated association, partnership or
governmental entity or authority.
2. Scope of the Agreement
2.1 Purpose
The purpose of this Agreement is to lay down the rights and
obligations by and among SEFL and Ernstson in respect of certain
matters relating to his ownership of Shares and the Option.
2.2 Shareholdings
The shareholding in the Company as of the date hereof will be in
accordance with Schedule 1. In the event that Ernstson shall marry,
he shall use all reasonable efforts to procure that the Shares held
by him shall be the personal property (Sw: enskild egendom) of
Ernstson.
2.3 Priority of Agreement
As between the parties hereto, in case of any inconsistency between
this Agreement and the Articles of Association, this Agreement shall
prevail unless specifically stated herein. For the avoidance of
doubt, the parties hereto agree that in case of any inconsistency
between this Agreement and the Lansforsakringar Agreement, this
Agreement shall have priority with respect to the relations between
the parties hereto.
2.4 Obligation to Comply
The parties hereto shall comply at all times with the provisions of
this Agreement and each party shall procure compliance with the terms
hereof in respect of any agent, attorney or other representative of
such party acting in shareholders' meetings, board meetings or any
other context where the provisions of this Agreement come into
operation and shall instruct such representative accordingly.
3. The Company
Ernstson shall use all reasonable endeavours to cause the Company
and/or the Board to pass all resolutions necessary and to take all
actions necessary so as to ensure compliance with the terms and
provisions of this Agreement.
3.1 Issued Share Capital
The Company shall on a fully diluted base have an issued share
capital of SEK 125.000 divided into 125.000 shares with a par value
of SEK 1.
3.2 Registered Office
The registered office of the Company shall be in Taby.
3.3 Articles of Association
The Articles of Association shall be in accordance with Schedule 2.
4. Protective Covenants
4.1 In order to protect the rights of SEFL under the Option, Ernstson
agrees that he shall not, without the prior written consent of SEFL,
cause any Group Company to or permit any Group Company to:
a) replace, amend or alter the articles of association applicable
to such company;
b) issue any shares, enter into or grant any options to subscribe
for shares or issue any securities convertible into shares or
entering into any agreement for the same other than the
convertible loans issued to ICO and Lansforsakringar;
c) establish any bonus, profit sharing, share option or other
incentive scheme for any director or employee of the Company
or any member of the Group (as appropriate);
d) sell, transfer or dispose their assets outside the ordinary
course of business;
e) effect a merger with a third party;
f) reduce the capital by redemption of shares or any equivalent
procedure;
g) distribute profit by dividends or any other form of
shareholder benefit;
h) voluntarily liquidate or wind-up (except, for the avoidance of
doubt, any actions and measures taken in connection with
mandatory liquidation provisions of the Act or voluntary
liquidation of the Company pursuant to the provisions of
Section 5.1.4);
i) change the place of registered office;
j) enter into any agreement with a director, employee or
shareholder of a Group Company (other than another Group
Company) or an Affiliate of such Persons or effect any
transaction with such Persons;
k) appropriate fees for the Directors or vary the service
agreements of any Directors; or
l) agree or commit to do any of the following.
4.2 The provisions of Section 4.1 shall not prevent (i) any
actions or measures by Ernstson or any Group Company necessary to
comply with the terms and conditions of Section 5 of the
Lansforsakringar Agreement or (ii) any action taken by Ernstson to
cause the Company to pay Ernstson such amount as is necessary to make
Ernstson whole (including settlement costs and reasonable legal,
accounting and other expenses for investigation or defence) on an
after tax basis for any wealth tax payable by him in connection with
his ownership of Shares, provided that Ernstson advises
Lantbrukskredit, SEFL and Lansforsakringar of any such tax assessed
and takes any reasonable lawful action jointly suggested by
Lantbrukskredit, SEFC and Lansforsakringar to reduce such tax
liability before paying such tax.
4.3 It is agreed that the provisions of Section 7.3 hereof will apply to
any matter which SEFL grants its consent to under this Section 4.1 or
under any financing agreement to which SEFL and any Group Company is
a party.
5. Option
5.1 Transfer of Shares
5.1.1 Ernstson shall not be entitled to transfer any of the Shares owned
and held by him, except pursuant to the provisions of this Section 5,
as long as the Option is in force.
5.1.2 SEFL hereby agrees and undertakes with Ernstson to acquire, and
accept sale and transfer from, or to procure the acquisition, and the
acceptance of the sale and transfer from, Ernstson of all the Shares
owned by Ernstson, upon the occurrence of any of the following
events:
(i) if Ernstson's employment in the Company should cease,
irrespective of the reason therefor, provided, however, that
sale and transfer of the Shares shall in such case take
place ninety (90) days after written notice pursuant to
Section 5.1.3 below;
(ii) if SEFL or its affiliates or if any Transferee or its
affiliates should commit a material breach of any agreement
to which Ernstson or any Group Company is a party
(provided that, in the case of a breach of an agreement
to which a Group Company, but not Ernstson, is a party,
such breach, if not cured, would reasonably be expected
to impair the solvency of the Company under Swedish law)
which is not cured within thirty (30) days after written
notice pursuant to Section 5.1.3 below, provided, however,
that the sale and transfer of the Shares shall in such case
take place fifty (50) days after such written notice; and
(iii) if Ernstson gives written notice of his wish to sell and
transfer the Shares, irrespective of the reason therefor,
provided, however, that the sale and transfer of the Shares
shall in such case take place ninety (90) days after written
notice pursuant to Section 5.1.3 below.
5.1.3 To exercise the right to sell and to request the obligation
to acquire the Shares held by him according to Section 5.1.2 above,
Ernstson shall give SEFL a written notice, specifying the relevant
triggering event. The purchase price for the Shares under Section
5.1.2 above and 5.1.4 below shall be SEK one hundred thousand
(100.000).
5.1.4 In the event SEFL should fail to acquire or procure the acquisition
of the Shares following notice pursuant to Section 5.1.3 for any or
the triggering events set forth in Section 5.1.2 (i)-(iii) within the
time-frames set forth therein, despite the obligation to do so
according to Section 5.1.2, then SEFL shall have been deemed to have
automatically acquired the Shares, subject to the Option.
6. Dealing in Shares
6.1 Written Consent
Other than in accordance with the provisions of this Agreement,
Ernstson shall not, except with the prior written consent of SEFL;
6.1.1 pledge, mortgage, charge or otherwise encumber any Share or any
interest in any Share held by Ernstson;
6.1.2 grant an option over any Share or any interest in any Share held by
Ernstson;
6.1.3 enter into any agreement in respect of the votes attached to any Share
held by Ernstson.
6.2 Letter of Undertaking
Except for transfers permitted by Section 5.1.4 above, Ernstson shall
not, except with the prior written consent of SEFL, effect any
transfer without the Transferee accepting to be bound by the terms of
this Agreement by signing a letter of undertaking as if the
Transferee had been a Shareholder at all times for the purposes of
this Agreement and had assumed the benefit of the rights and the
burden of the obligation(s) of a Shareholder under this Agreement.
Such undertaking shall be delivered to the Company at its registered
office and a certified copy shall be delivered to SEFL.
6.3 Other Dealings
Save as specified in this Agreement, if at any time a Shareholder
desires to effect a transfer otherwise than in accordance with this
Clause 6 the Shareholders shall procure that no such transfer shall
take place unless and until the provisions of this Clause 6 have been
complied with.
6.4 Announcement, Communication or Circular
Ernstson shall not without SEFL's written consent, make or send any
announcement, communication or circular relating to the subject
matter of this Agreement such consent not to be unreasonably
withheld, provided that this shall not apply to an announcement,
communication or circular required by law or by any governmental
authority, in which event Ernstson shall, where practicable, first
consult with SEFL as to the content of such announcement.
7. Indemnification
7.1 SEFL shall indemnify and hold Ernstson harmless from and against all
direct or indirect claims, losses, deficits, damages, costs,
liabilities, tax and expenses (including settlement costs and
reasonable legal, accounting and other expenses for investigating or
defending any actions or threatened actions) ("Losses") incurred by
Ernstson which are resulting from, arising out of or relating to:
(i) any action or omission by SEFL or its affiliates or by any
Transferee or its affiliates constituting negligence or
intentional misconduct or breach or non-fulfilment of
agreement to which Ernstson or any Group Company is a party
(provided that this clause shall only apply to Losses
suffered by Ernstson in his personal capacity and not as a
result of a reduction of the value of the shares in the
Company);
(ii) any action or omission by Ernstson which has been directed
by SEFL or its affiliates or by any Transferee or its
affiliates;
(iii) any obligations of Ernstson to purchase Lansforsakringar's
Shares under Sections 6.5.3 and 6.7.2 and 6.7.4 (to the
extent a breach of contract has been expressly consented to
by SEFL) of the Lansforsakringar Agreement, provided that
Ernstson transfers such Shares, or causes such Shares to be
transferred, to SEFL or its designee, for no additional
consideration;
(iv) any such claim described in Section 7.3 below; and
(v) any such tax election described in Section 17 below.
7.2 The liability of SEFL under Section 7.1 above shall not
apply to the extent claims, losses, deficits, damages, costs,
liabilities and expenses have been caused by actions, measures or
omissions taken by Ernstson after the closing date which actions,
measures or omissions constitute gross negligence or fraud or other
criminal acts or breach of any agreement to which Ernstson is a party
or breach of any agreement to which a Group Company is a party
committed by a Group Company (if such breach is knowingly caused by
the acts of Ernstson), except for breaches which are the result of
Ernstson's actions or measures pursuant to the provisions of Sections
4.2 or 5.1.4 above.
7.3 SEFL undertakes not to, and to cause its affiliates and any
Transferee or its affiliates, as well as holders of securities in
SEFL, from time to time not to, make or submit any claim against
Ernstson regarding any matter resulting from, arising out of or
relating to this Agreement or any other agreement to which Ernstson or
any Group Company is a party, provided that this restriction shall not
prevent claims against Ernstson under Swedish law based on actions,
measures or omissions by Ernstson after the closing date which
constitute gross negligence or fraud or other criminal acts or a
breach of an agreement to which Ernstson is a party or breach of any
agreement to which a Group Company is a party committed by a Group
Company (if such breach is knowingly caused by the acts of Ernstson),
except for breaches which are the result of Ernstson's actions or
measures pursuant to the provisions of Sections 4.2 or 5.1.4 above.
7.4 Ernstson shall not settle any claim by a third party which may be
subject to indemnification by SEFL pursuant to this Agreement,
without the consent of SEFL, which shall not be unreasonably withheld
or delayed.
8. Compliance with this Agreement
To the extent not prohibited by Swedish law, Ernstson undertakes to
SEFL that he shall take all practicable steps including, without
limitation, the exercise of votes it directly or indirectly controls
at meetings of the Board and general meetings of the Company and any
Group Company, as the case may be, to ensure that the terms of this
Agreement are complied with and to procure that the Board and the
Company and any Group Company, as the case may be, complies with its
obligations and that it shall do all such other acts and things as
may be necessary or desirable to implement this Agreement.
9. Term and termination
9.1 Entry into Force
This Agreement shall become effective on 5 March 2002.
9.2 Termination
This Agreement shall remain in force for as long as the Option is in
force or as long as SEFL is lending money to any Group Company
whichever later, provided, however, that any termination of the
Agreement pursuant to this Section 9.2 shall not apply to Sections
5.1.2-5.1.4 or Section 7.
9.3 Addresses etc
Any notice or other communication pursuant to, or in connection with,
this Agreement shall be in writing and delivered personally, or sent
by first class pre-paid recorded delivery post (air mail if
overseas), to the party due to receive such notice at its registered
office from time to time (or to such other address as may from time
to time have been notified in writing to the other party in
accordance with this Clause) or by sending it by fax to the fax
number, if any, of the party concerned set out in this Clause, or to
such other fax number as may from time to time have been notified in
writing to the other party in accordance with this Clause) (subject
to the original notice or communication being sent by post on the
same day in the manner specified above):-
9.4 The addresses of each Party for all notices under or in
connection with this Agreement are:
a) in the case of SEFL;
c/o ▇▇▇▇▇▇▇ ▇▇▇▇
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▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
International Financial Service Centre
▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
353 1 824 0010
With a copy to:
President
US Energy Systems Inc.
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Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
With a copy to:
EIC Partners AG
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Fax: ▇▇ ▇▇▇▇ ▇▇▇▇ before 15th April 2002
41 4384 410 01 after 15th April 2002
b) in the case of Goran Erstson;
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or such other as a Party may notify to the other Party by no less
than five (5) business day's notice.
All notices and communication between the Parties shall be in English
unless otherwise agreed.
9.5 Communication Served
Subject to Clause 10.3, any notice or other communication shall
be deemed to have been served:-
a) if delivered personally, when left at the address referred
to in Clause 9.4;
b) if sent by overnight courier, the day after sending it;
c) if a notice is given or deemed given at a time or on a date
which is not a Business Day, it shall be deemed to have been
given on the next Business Day.
10. Invalidity
If any provision of this Agreement is held to be unenforceable or
illegal, in whole or in part, such provision or part shall to that
extent be deemed not to form part of this Agreement but the
enforceability of the remainder of this Agreement shall remain
unaffected.
11. Waiver
The failure to exercise or delay in exercising any right or remedy
under this Agreement shall not constitute a waiver of the right or
remedy or a waiver of any other rights or remedies and no single or
partial exercise of any right or remedy under this Agreement shall
prevent any further exercise of the right or remedy or the exercise
of any other right or remedy.
The parties' rights and remedies contained in this Agreement are in
addition to, and not exclusive of, any other rights or remedies
available at law.
12. Assignment
This Agreement is personal to the parties and neither the Agreement
nor any of the benefits arising under them may be assigned without
the prior written consent of the other party and neither party shall
purport to assign or transfer the same.
13. Counterparts
This Agreement may be executed in any number of counterparts and by
each of the parties on separate counterparts each of which when
executed and delivered shall be deemed to be an original, but all the
counterparts together shall constitute one and the same agreement.
14. No Partnership or Agency
Nothing in this Agreement (or any of the arrangements contemplated
hereby) shall be deemed to constitute a partnership between the
parties nor, save as may be expressly set out herein, constitute any
party the agent of any other party for any purpose.
In addition, unless otherwise agreed in writing between the parties,
none of them shall enter into contracts with third parties as agent
for any member of the Group or for the other party nor shall any
party describe itself as agent as aforesaid or in any way hold itself
out as being an agent as aforesaid.
15. Applicable Law
This Agreement shall be governed by and construed in accordance with
the laws of Sweden.
16. Arbitration
Disputes related to the Agreement shall be finally settled by
arbitration under the rules of the Arbitration Institute of the
Stockholm Chamber of Commerce.
The proceedings shall be held in English.
17. US Tax Election
At the request of SEFL, the Company and every Shareholder shall
execute a "check the box election" under United States tax laws in
the form attached as Schedule 1.
________________
In witness whereof the parties hereto have signed this Agreement on
the date first above written:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
__________________________ -----------------
Scandinavian Energy Finance ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Limited
PRESENT when the Common Seal of SCANDINAVIAN ENERGY FINANCE LIMITED
was affixed hereto:
___________________________
Director
___________________________
Director/Secretary
