EXHIBIT 2.1
COURTESY TRANSLATION
SHARE PURCHASE AND TRANSFER AGREEMENT
between
Stadtwerke Braunschweig GmbH,
- hereinafter also referred to as
"SWBS or the Seller" -
and
TXU Stadtwerke Holding GmbH & Co. KG,
- hereinafter referred to as
the "Purchaser" -
The Purchaser and the Seller are hereinafter also referred to as the
"(Contractual) Parties".
PREAMBLE
(1) The share capital of Braunschweiger Versorgungs-Aktiengesellschaft
(hereinafter also referred to as "BVAG" or the "Company") with its
registered offices in Brunswick, registered with the commercial
register of the County Court in Brunswick under HRB 655, amounts to DM
120,000,000.00 and is paid up in full. The share capital of the Company
is divided into 120,000 registered shares in the nominal value of DM
1,000.00 each. The Company's Articles of Association dated December 9,
1971, are currently valid in their version dated June 25, 1997 (Deed
No. 267/2002 of the Notary Public ▇▇. ▇▇▇▇).
The sole shareholder of the BVAG is SWBS. The town of Brunswick
(hereinafter also referred to as the "Town") is the sole shareholder of
SWBS with its registered offices in Brunswick, registered with the
commercial register of the County Court in Brunswick under HRB 554.
(2) In order to secure the location of Brunswick and to strengthen BVAG,
the Town and SWBS have decided to sell part of the shares in BVAG held
by SWBS to a strategic investor.
(3) The Purchaser had ample opportunity to view the documentation on the
Company in a call for bids carried out by the Seller. During the due
diligence investigation carried out in this connection the Purchaser
and/or its agents were presented with all requested documentation and
all posed questions were answered. SWBS does not, however, guarantee
that the information which the Purchaser has acquired is exhaustive. It
is therefore only liable to the Purchaser pursuant to this agreement
excluding all other further claims.
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(4) The Parties shall herein agree to grant the Seller, in spite of the
transfer of the majority interest to the Purchaser, an appropriate
amount of influence in the activities of the Company even in the
future.
(5) With a view to the proposed sale of the majority interest to a
strategic investor and thereby losing its financial integration, BVAG
has formed a short business year from January 1 through June 30, 2002,
and registered this with the commercial register.
Based on the facts stated above and in the sense of a fair reconciliation of
interests and mutual regard in business loyalty pursuant to the principles of
good faith, the Parties shall agree to the following - even for circumstances
not regulated by this agreement:
Section 1
OBJECT OF PURCHASE/SALE
(1) SWBS holds all 120,000 shares in a nominal value of DM 1,000 each in
the share capital of BVAG. This corresponds to a 100 % interest in
BVAG's share capital.
(2) SWBS shall sell to the Purchaser hereby accepting this offer an initial
amount of 89,880 shares of the aforementioned shares - Share Register
No. 30,121 through 120,000 - in the total nominal value of DM
89,880,000 (in words: Deutsche ▇▇▇▇ eighty-nine million eight hundred
and eighty thousand). This corresponds to a 74.9 % interest in the
share capital of the Company.
(3) The Parties agree that the Purchaser shall pursuant to the German Law
of Obligations participate as of July 1, 2002, in the profits of the
Company with respect to the shares sold pursuant to the above Paragraph
(2) based on its share of the interest.
The profits of the business year 2001 and of the short business year
from January 1 through June 30, 2002, in consideration of the provision
of the following paragraph 4 sub-paragraph 3 shall be allocated to the
Seller. Any profits from previous business years which are allotted to
the sold shares and any profits from previous business years which have
not yet been distributed and/or paid out are compensated for by the
purchase price irrespective of the termination of the special agreement
establishing the relationship between the two companies.
(4) The Parties agree that the Company shall draw up a statement of accounts
as of June 30, 2002, for the short business year from January 1, 2002,
through June 30, 2002, and have it audited by its auditor pursuant to
commercial law regulations The Purchaser shall be entitled to have the
statement of accounts as of June 30, 2002, reviewed (how it was drawn up
and the audit thereof) by an auditor of their choice. The Parties shall
insure that the auditor commissioned by the Purchaser shall have access
to all documentation necessary for his/her review.
The Parties are obliged to approve the audited statement of accounts by
common consent. If the Parties do not achieve agreement with respect to
the approval within thirty (30) days following the audit of and
certifying the statement of accounts, they shall be obliged to commission
together another auditor who shall decide upon the correctness and the
proper execution of the statement of accounts and who shall suggest any
required changes, if necessary. BVAG shall bear the costs for this
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auditor. If agreement cannot be found within a period of two weeks as to
which auditor should be commissioned, the auditor shall be commissioned
on the basis of a suggestion binding on all parties involved made by the
Auditors' Institute in Germany (Institut der Wirtschaftsprufer in
Deutschland e. V., Dusseldorf). The Parties shall be obliged to accept
bindingly the auditor's decision and to approve the statement of accounts
corresponding to this decision.
Furthermore the Parties are agreed that no reserves shall be dissolved
and no measures with respect to the share capital, in particular no
reduction of the share capital, shall be taken in the short business year
from January 1, 2002, through June 30, 2002.
Section 2
PURCHASE PRICE
(1) The purchase price for the shares of the Company sold pursuant to
Section 1, Paragraph (2), amounts to a total of(euro)384.24 (in words:
Euro three hundred eighty four million two hundred forty thousand). The
purchase price shall earn interest at a rate of 6% p. a. as of July 1,
2002.
(2) The purchase price mentioned in the above Paragraph (1), including
interest, is due for payment two weeks after the conditions of
effectiveness in Section 9 and the standard conditions in Section 3,
Paragraph (3), b) and c), and/or Section 3, Paragraph (4), have
occurred, at the earliest, however, on July 1, 2002, and is to be paid
by the Purchaser into the following account held by the Seller:
Account No.: 216 861
Bank Sort Code: 250 500 00
Name of Bank: Nord/▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
(3) Should the Purchaser default on the payment of the purchase price, it
shall pay interest on the purchase price at a rate of 10 % p. a. as of
the due date in addition to the interest pursuant to the above
Paragraph (1), Sentence 2 - subject to any further rights of the
Seller.
Section 3
ASSIGNMENT
(1) The Seller shall assign to the Purchaser hereby accepting this offer
the shares sold pursuant to Section 1, Paragraph (2), with fiscal and
economic effect as of June 30 (24:00 hours)/July 1, 2002, (00:00 hours)
(Cut-Off Date) and subject to the conditions and time periods listed in
the following Paragraph (3).
(2) It is known to the parties that the Company's general assembly has to
consent to the transfer of the shares pursuant to Section 6,
Paragraph 3, of the Articles of Association (previous version) with
respect to the draft herewith attached to as EXHIBIT 1 and with respect
to the draft attached to this agreement as EXHIBIT 2.
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(3) The assignment of the shares described in the above Section 1,
Paragraph (2), is subject to the following conditions/time periods:
a) Payment in full of the purchase price including interest
pursuant to the above Section 2 and
b) Alternatively
- Notification from the German Anti-Trust Office within
one month since registering with the German Anti-Trust
Office the purchase of the shares sold pursuant to the
above Section 1, Paragraph (2), as an intention to
merge that the purchase of the shares by the Purchaser
does not fulfill the conditions for prohibition
pursuant to Section 36, ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇ Law against
Restraints of Trade (GWB), or
- Expiration of a period of one month since registering
with the German Anti-Trust Office the purchase of the
shares as an intention to merge unless the German
Anti-Trust Office prohibits the intention to merge
before expiration of this period or notifies that it
has started the main examination proceeding pursuant to
Section 14, Paragraph 2, GWB, or
- Expiration of a period of four months or of a longer
period accepted by the registering companies since
registering with the German Anti-Trust Office the
purchase of the shares as an intention to merge unless
the German Anti-Trust Office does not prohibit the
intention to merge before expiration of this period,
and
c) Expiration of June 30, 2002.
d) Resolution of consent of the Company's general assembly as
well as consent of the Company to transfer the shares
mentioned in Section 1, par. 2.
(4) If the Commission of the European Communities is solely responsible
pursuant to Section 35, ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇, for the granting or rejection
of the merger control permit, this agreement is, instead of being
subject to the aforementioned conditions in Paragraph (3), cipher b,
subject to the condition precedent that it may be implemented pursuant
to the Council's EEC Directive No. 4064/89 dated December 21, 1989, in
its currently valid version.
Section 4
REPRESENTATIONS AND WARRANTIES
(1) SWBS shall guarantee by means of an agreement of characteristics -
unless otherwise expressly stipulated in the following - coming into
effect with the conclusion of this agreement that the following
statements are valid:
a) The share capital of the Company will be paid up in full at
the date the assignment of the shares pursuant to Section 3
takes effect. There have been and shall be no repayments of
the share capital.
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b) SWBS holds the legal and economic title to the shares sold
pursuant to Section 1, Paragraph (2), and is entitled without
limitation to dispose over the sold shares. Any limitations of
disposal over or encumbrances on the shares do not exist.
c) The audited statement of accounts of the Company as of
December 31, 2001, (consisting of the balance sheet, profit
and loss account as well as its appendix, cf. EXHIBIT 3,
"STATEMENT OF ACCOUNTS", Notarial Deed A. Prot. 70/2202 of the
acting Notary Public, which is on hand. The appeared state
that they are aware of the content of the deed and waive a
reading hereof.) has been drawn up to the best of the Seller's
knowledge pursuant to the generally accepted accounting
principles as well as preserving the continuity of balance
sheet consistency and valuation and presents a true picture of
the Company's assets, financial and profit situation under the
current circumstances.
d) To the best of the Seller's knowledge the business of the
Company has from December 31, 2001, until the conclusion of
this agreement been operated exclusively within the scope of
ordinary business and while continuing the previous business
practice. There have been no major negative changes in the
business year 2002 until the date of the conclusion of this
agreement to the business operation and/or to the Company's
assets, financial and profit situation or to important assets
of or agreements made by the Company- with the exception of
converting the end of the business year to June 30 and
therefore the formation of the short business year from
January 1, 2002, through June 30, 2002. The Seller shall be
obliged from when this agreement is concluded until the time
when the assignment of the shares pursuant to the above
Section 3 becomes valid not to take any major measures without
consulting the Purchaser until - with the exception of
terminating the Domination and Profit-and-Loss Absorption
Agreement with SWBS. Any decisions regarding the continuation
of the Mehrum joint power station the electricity, gas and
water supplies and the concession agreement are also included
in the aforementioned major measures.
e) At the time of this contract the Company disposes over all
public and other official permits which are required for the
continuation of its business operation. The Company has
operated its business in conformance with these permits. The
Seller shall furthermore be obliged to insure the continuation
of the aforementioned permits until the time when the
assignment of the shares pursuant to the above Section 3
becomes valid.
f) Apart from the legal disputes listed in EXHIBIT 4 ("LEGAL
DISPUTES") of this agreement the Company is not involved in
any legal disputes before state or arbitration courts, whose
outcome could have considerable detrimental effects for the
business operation of the Company; nor has the Company been
threatened with any such legal disputes by third parties or
had any such legal disputes announced to it by third parties.
g) The facts
- which the Purchaser received in the data room set up in
Frankfurt from February 12 through February 14, 2002,
as well as in the supplementary data room set up in
Frankfurt on March 6, 2002 and April 11, 2002 pursuant
to the list attached as EXHIBIT 5 ("DATA ROOM INDEX"
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Notarial Deed A. Prot. 70/2202 of the acting Notary
Public, which is on hand. The appeared state that they
are aware of the content of the deed and waive a
reading hereof.)
- and which the Purchaser subsequently received with the
correspondence via E-mail dated March 8, 2002, and
April 8, 2002
are, to the best of the Seller's knowledge and belief, correct
and not incomplete in any way so as to be misleading. The
aforementioned guarantee of correctness refers expressly to
facts and cannot obviously include budgetary accounting,
evaluations, etc.
A complete set of the information made available in the data
room to, and based on the questions asked by, the Purchaser
shall be held in trust by the Company for a period of two (2)
years in a sealed state. Should differences of opinion occur
regarding the content of the information given, each party
shall, having informed the other party, be entitled to review
the documentation. It should be insured that one or more
representatives and/or consultants of each party are present
at the review. Minutes of each review should be drawn up in an
appropriate way.
(2) Only the knowledge of the Seller's management and of the management
board of BVAG is critical as far as dependence on the Seller's
knowledge is required pursuant to the above regulations.
(3) Should it arise that one or more of the statements for which the Seller
has accepted a warranty pursuant to the above Paragraph (1) is/are not
valid , the Purchaser can demand that the Seller, within an appropriate
time period, at the latest, however, within a period of three months
after receiving the demand, creates the state which would have existed
if the statement(s) had been valid. If the Seller does not create the
contractual state within the set period, the Purchaser can demand a
cash compensation from the Seller.
(4) The Purchaser can claim compensation pursuant to the above Paragraph
(3) only if and as far as the individual damage or the sum of the
individual damage incidents exceed an amount of (euro) 50,000.00
(allowance amount). All compensation claims by the Purchaser are
limited to the amount of the purchase price actually paid pursuant to
▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ (▇), ▇▇▇▇▇▇▇▇ 1.
(5) SWBS does not accept further warranties, representations or indemnities
- with the exception of the following Section 4a and Section 4b. Apart
from the warranties expressly accepted in Paragraph (1), warranty
claims for material defects and defects of title as well as
compensation claims of any type are excluded. If, however, such claims
should be due to the Purchaser, the height of these shall also be
limited to the purchase price pursuant to ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ (▇),
▇▇▇▇▇▇▇▇ 1.
(6) The warranty claims pursuant to the above Paragraphs (1) through (5)
shall be subject to a statute of limitations of 18 months starting from
the date when this agreement becomes effective. Any rescission rights
shall be excluded.
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Section 4a
TERMINATION OF THE DOMINATION AND PROFIT-AND-LOSS ABSORPTION AGREEMENT
A Domination and Profit-and-Loss Absorption Agreement exists between SWBS and
BVAG. The Parties agree that this Domination and Profit-and-Loss Absorption
Agreement shall be terminated as of June 30, 2002, so that the relationship
between the dominated company of BVAG and the dominating company of SWBS also
ends at this time.
Section 4b
RELEASE FROM ADDITIONAL TAX CHARGES
1. The Parties agree that the Seller shall release BVAG from any
conclusively assessed additional tax charges, which affect periods in
the past including the short business year from January 1 through
June 30, 2002, if and as far as the sum of the additional tax charges
exceeds an amount of (euro) 10 million (allowance amount). These claims
by the Purchaser for release shall be limited to the amount of the
purchase price actually paid pursuant to ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ (▇),
▇▇▇▇▇▇▇▇ 1.
2. Additional tax charges in the sense of Paragraph 1 shall include all
taxes based on possession and transactions (in particular, corporate
income tax, trade tax, wealth tax and turnover tax), which taxes have
not yet been paid by the transfer Cut-Off Date in the sense of
Section 3, Paragraph (1), including any such attributable fiscal
collateral performance for which there is no indication of liabilities
or reserves in the statement of accounts as of December 31, 2001,
attached as Exhibit 3, and in the statement of accounts as of June 30,
2002 - as far as they affect the short business year from January 1
through June 30, 2002. Additional charges of individual assessment
periods are first to be balanced with deficit charges of other
assessment periods before the release obligation in the above
Paragraph 1. is enacted.
As far as BVAG has to make subsequent tax payments - especially as a
result of an external tax inspection - affecting the period up to the
transfer Cut-Off Date and based on a simple re-arrangement in time of
the tax basis (including assets in the balance sheet or an upward
evaluation of assets, excluding liabilities from the balance sheet or a
downward evaluation of liabilities), the release obligation in the
above Paragraph 1. shall only apply with respect to such accruable
interest.
3. The claims for release pursuant to the above Paragraph 1. shall be
subject to a period of limitation of three (3) months after the
corresponding notice of assessment has finally become res judicata or
legally valid. Any rights of rescission shall be excluded.
4. The Purchaser is obliged to inform the Seller without undue delay at
any point in the proceeding of the commencement of an external tax
inspection at BVAG, preliminary inspection reports, dates of final
discussion meetings and any type of request for subsequent tax payments
if and as far as the Seller's release obligation pursuant to the above
Paragraph 1. could be affected thereby. The Purchaser is obliged to
arrange for BVAG to take the following measures if tax issues affect
the time up to the transfer Cut-Off Date:
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a) To allow the Seller or a person belonging to the audit or tax
consultancy professions appointed by the Seller to take part
in all aspects of an external tax inspection at BVAG including
the final discussion meetings;
b) To grant the Seller upon its request a power of attorney with
which it can initiate (extra-)judicial legal remedies at its
cost against BVAG regarding the justification of possible
requests for subsequent tax payments as far as the Seller's
obligations pursuant to the above Paragraph 1. could be
affected thereby.
c) To give the Seller all necessary information and submit to it
preliminary and final inspection reports on the external tax
inspection;
d) Not to initiate (extra-)judicial legal remedies without
previously consulting the Seller as far as the legal remedies
and declarations could be significant for the Seller's
obligations pursuant to the above Paragraph 1.
Section 4c
INTEREST IN E.ON AG, AND AVACON AG AS WELL AS FGS
(1) BVAG holds 0.064 % of the shares in E.ON AG, Dusseldorf, 1.4 % of the
shares in Avacon AG, Helmstedt, and 1.7 % of the shares in Ferngas
Salzgitter GmbH, Salzgitter. The Parties are obliged to sell and assign
to the Purchaser or an acquisition company named by the Purchaser the
shares in E.ON AG on the basis of the share purchase and transfer
agreement attached to this Share Purchase and Transfer Agreement as
EXHIBIT 6 ("EON SHARE PURCHASE AND TRANSFER AGREEMENT") through BVAG.
Should the Purchaser name an acquisition company for the purchase of
the shares, it shall be obliged already now by means of a collateral
promise to guarantee that the duties of the acquisition company
resulting from the share purchase and transfer agreement are fulfilled.
The share purchase and transfer agreement regarding the shares in E.ON
AG shall be valid as of June 1, 2002; BVAG shall, however, be entitled
to rescind from the agreement if this Share Purchase and Transfer
Agreement between SWBS and the Purchaser does not finally become valid.
(2) The Parties are aware of the fact that there are disposal restraints in
favor of the respective co-shareholders regarding the shares in Avacon
AG and/or the shares in Ferngas Salzgitter GmbH. It is currently not
clarified whether the co-shareholders will consent to a transfer of the
shares to the Purchaser. With this background the Purchaser offers to
the Seller bindingly and irrevocably to conclude with BVAG the share
purchase and transfer agreement concerning the shares in Avacon AG and
Ferngas Salzgitter GmbH pursuant to EXHIBIT 6B ("AVACON SHARE PURCHASE
AND TRANSFER AGREEMENT") and EXHIBIT 6C ("FERNGAS SALZGITTER GMBH SHARE
PURCHASE AND TRANSFER AGREEMENT") and to pay to BVAG a purchase price
of (euro) 18,754,655 for the shares in Avacon AG and (euro) 3,309,645
for the shares in Ferngas Salzgitter GmbH. The above share purchase and
transfer agreements shall be concluded and completed so as to be valid
as of June 15, 2002. Paragraph 1, Sentences 3 and 4, 2nd half-sentence,
shall apply accordingly. The Parties shall both make their best efforts
to obtain the consent of the previous co-shareholders in the said
companies.
(3) Should the effective transfer of the shares in Avacon AG and/or Ferngas
Salzgitter GmbH not be possible by June 15, 2002, the shares, the
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transfer of which is not possible, shall remain with BVAG. The
Purchaser shall be obliged in this case to pay with respect to the
shares in Avacon AG and/or Ferngas Salzgitter GmbH remaining with BVAG
74.9 % respectively of the purchase price agreed above for the
corresponding interest as an additional purchase price for the sold
shares of the company in the sense of Section 2 above. The provisions
of Section 2 above as well as Section 3, Paragraph 3, above shall apply
accordingly for this additional purchase price.
(4) As far as Paragraphs 1 and 2 above provide the basis for BVAG
obligations or require its cooperation, the Parties shall be obliged to
work within what is legally permitted towards the fact that BVAG
fulfills said obligations and takes the necessary measures for its
cooperation.
Section 5
OTHER SERVICES OF THE PURCHASER
1. The Seller is obliged to find (euro) 1,25 million per year for the
period of five (5) years for the promotion of cultural and sports
purposes in Brunswick. The Purchaser is furthermore obliged to work
towards the fact that BVAG maintains its previous promotion with
respect to cultural and sports activities.
2. Other performance by the Purchaser is regulated in the Consortium
Agreement, VIII. "Further Performance of the Purchaser".
Section 6
CONSORTIUM AGREEMENT
In order to regulate their partner cooperation and their mutual rights and
duties, the Contractual Parties have today concluded in addition to this
agreement an independent consortium agreement (EXHIBIT 7, "CONSORTIUM
AGREEMENT", the attachments to Exhibit 6 as well as Exhibits 7, 8 and 10 hereto
are contained in the Notarial Deed 70/2002 of the acting Notary Public, which is
on hand. The appeared state that they are aware of the content of the deed and
waive a reading hereof) to which reference is herewith made.
Section 7
OPTION RIGHTS
(1) The Purchaser shall herewith irrevocably offer to SWBS the purchase of
the remaining 30,120 shares in BVAG in the nominal value of DM
30,120,000 (in words: Deutsche ▇▇▇▇ thirty million one hundred and
twenty thousand) (Put Option). This corresponds to a 25.1 % interest in
the share capital. This offer can be accepted by SWBS with a written
declaration to the Purchaser once a year with effect from January 1 of
each year, at the latest, however, from January 1, 2006. This
declaration of acceptance must reach the Purchaser three months before
the date when the option is to be exercised. Should the offer be
accepted, the Contractual Parties shall be obliged to work towards the
fact that a permit is granted to the Company pursuant to Section 6 of
the Articles of Association.
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(2) The total purchase price for the shares designated in the above
Paragraph (1) amounts to Euro 128,76 Mio. (in words: one hundred twenty
eight million seventy six thousand).
(3) The provisions of Section 2, Section 3 Paragraphs (3) and (4), Section
4, Paragraph (1) a) and b) as well as Paragraphs (3) through (6) as
well as Section 8 and Section 11 of this agreement shall apply
accordingly for the Share Purchase and Transfer Agreement which shall
exist if the offer pursuant to the aforementioned paragraph (1) is
accepted provided that the assignment becomes effective at the earliest
when the purchase price is credited to an account of the Seller
indicated in the declaration of acceptance pursuant to the
aforementioned Paragraph (2) - including interest from the Cut-Off Date
when the option was exercised. The profit of the shares covered by the
option shall be due to the Purchaser as of the business year for which
the option was exercised.
Both Parties shall have the right to rescind from the Share Purchase
and Transfer Agreement which has come into existence through the
acceptance of the option if necessary permits of the German Anti-Trust
Office pursuant to Section 40, Section 41, GWB, and/or of the
Commission of the European Communities pursuant to the Council's EEC
Directive No. 4046/89 dated December 21, 1989, in its currently valid
version are finally and incontestably refused.
All warranty rights of the Purchaser shall, with the exception of the
warranty of legal defects pursuant to the aforementioned ▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇ (▇), ▇) and b), be excluded.
Section 8
MERGER CONTROL
The Contractual Parties shall, at the latest immediately after signing this
agreement, register with the German Anti-Trust Office or, if the decisive
thresholds have been reached, register with the Commission of the European
Communities the intention to merge which exists based on this agreement pursuant
to Section 37 and Section 39, GWB, and/or the Council's EEC Directive
No. 4046/89 dated December 21, 1989, in its currently valid version. The
Contractual Parties shall be obliged to give the details and information
required of them in due time, completely and correctly. The Purchaser shall also
take over the correct registration on behalf of BVAG.
Section 9
RESERVATIONS OF OFFICIAL AUTHORITIES
This agreement only becomes effective with the exception of the aforementioned
Section 4 paragraph (1) lit. d) as well as Section 8, Section 10 and Section 11,
Paragraph (4), if the City council has consented to it and the authority
supervising the legality of administrative activities has also consented to the
agreement and/or notified that a permit from the authority is not necessary.
Section 10
RESCISSION RIGHTS
If the conditions of effectiveness pursuant to Section 3, Paragraphs (3) and
(4), and/or Section 9 with a view to the shares sold pursuant to Section 1,
Paragraph (2), have not occurred by December 31, 2003, both Parties shall have
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the right to rescind the agreement. The provision regulating the costs in the
following Section 11, Paragraph (4), shall remain effective. The above
Sentences 1 and 2 shall also apply if any necessary permits pursuant to
Section 3, Paragraphs (3) and (4), and/or Section 9 have been conclusively
refused or the implementation of the agreement has been prohibited by the German
Anti-Trust Office.
Section 11
FINAL PROVISIONS
(1) The choice of forum for all disputes connected with this agreement is -
as far as is permitted - exclusively Brunswick.
(2) The Purchaser shall register the transfer of rights to the sold shares
with the Share Register of the Company.
(3) Should individual provisions of this agreement be or become completely
or partially invalid or unenforceable invalid, the effectiveness of the
remaining provisions of the agreement shall remain unaffected. The
appropriate regulation which comes closest to the economic intent of
what would usually have been agreed if the invalidity or
unenforceability had been known takes the place of the invalid or
unenforceable contractual provision by means of a supplementary
interpretation of the agreement. If the interpretation is eliminated
due to legal grounds, the Contractual Parties shall be obliged to make
corresponding supplementary agreements. The above regulation shall also
apply if a gap which must be closed appears while implementing or
interpreting the agreement.
(4) The costs which the Contractual Parties entailed by calling in
consultants for the negotiations preceding this agreement shall be
borne by each Contractual Party itself. This also applies if this
agreement cannot be implemented due to it being prohibited by the
German Anti-Trust Office (Section 3, Paragraphs (3) and (4) in
connection with Section 8). The costs in connection with the conclusion
of this contract, especially the costs for notarization, are to be
borne by the Purchaser.
(5) Modifications or supplements to this agreement must be made in writing
in order to be valid. This also applies should this written requirement
be modified. Oral supplements to this agreement have not been made.
Documentary to this, the aforementioned notarial recording together with the
exhibits was read to the appeared by the Notary Public, approved by the appeared
and personally signed by them and the Notary Public as follows:
Basel/Switzerland, May 15 (fifteen), 2002 (twothousandtwo).
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Brunswick,
------------------------------------------
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Rumetsch /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------- -------------------------------
- SWBS - - Purchaser -
EXHIBITS
Exhibit 1: Resolution of the General Assembly dated..., 2002
Exhibit 2: Consenting Resolution of the Company
Exhibit 3: Statement of Accounts for BVAG as of December 31, 2001
Exhibit 4: Legal Disputes
Exhibit 5: Data Room Index
Exhibit 6: E.ON/Avacon Share Purchase Agreement
Exhibit 6a: FGS Share Purchase Agreement
Exhibit 7: Consortium Agreement
12
OMITTED SCHEDULES
Exhibit 1 Resolution of the General Assembly
Exhibit 2 Consenting Resolution of the Company
Exhibit 3 Statement of Accounts for BVAG as of December 31, 2001
Exhibit 4 Legal Disputes
Exhibit 5 Data Room Index
Exhibit 6a FGS Share Purchase Agreement
The schedules listed above have been omitted from this exhibit; however, each of
TXU Corp. and TXU Europe Limited hereby agrees to furnish supplementally a copy
of any omitted schedule to the Commission upon request by the Commission.
Exhibit 6
kpmg Beiten ▇▇▇▇▇▇▇▇▇ SHARE SALE AND TRANFER AGREEMENT E.ON
Partial Privatization BVAG
May 29, 2002
SHARE SALE AND TRANSFER AGREEMENT
between
the Braunschweiger Versorgungs-Aktiengesellschaft,
represented by its managing director, ▇▇. ▇▇▇▇ ▇▇▇▇▇,
- hereinafter also"BVAG" or"Seller" -
and
TXU Stadtwerke Holding GmbH & Co KG,
represented by -----------------------,
- hereinafter the "Buyer" -
as well as
regarding Section 5
TXU Europe Ltd.,
represented by -----------------------------,
- hereinafter the"Guarantor" -
The Buyer and the Seller are also referred to hereinafter as the "parties" or
the "contracting parties".
Section 1
OBJECT OF SALE/SALE
(1) The Uberlandwerke Braunschweig GmbH, as trustee, holds for the BVAG 490,100
(in words: four hundred ninety thousand one hundred) shares of non-par
bearer common stock with a proportional amount of the capital stock of
EUR 2.60 in the E.ON AG, Dusseldorf (Security certificate no. 761440).
(2) The BVAG sells the aforementioned shares in E.ON AG to the Buyer accepting
this offer.
(3) The profits appertaining to the shares sold pursuant to the above para. 2.
in conjunction with para. 1, in the current fiscal year and profits from
previous years not distributed to the shareholders (i.e. profits carried
forward and profits from earlier years for which no profit distribution
resolution was adopted) belong solely to the Buyer.
Section 2
PURCHASE PRICE
(1) The purchase price for the shares in E.ON AG sold pursuant to Section 1
para. 2 in conjunction with para. 1 total, subject to the following
clause 2, EUR 27,935,700 (in words: EUR twenty-seven million nine hundred
thirty-five thousand seven hundred). Should the closing stock exchange
price of E.ON AG on 1 June 2002 (Xetra closing price) result in a higher
amount, this will be the purchase price owed.
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Partial Privatization BVAG
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(2) The total sale price resulting from the above para. 1 is due on 10 June
2002 to be paid by the Buyer to the Seller's account named below: Account
No. 824706, Sort code: ▇▇▇▇▇▇▇▇, Bank: Nord/ LB
(3) In the event of late payment, the as yet unpaid portion of the purchase
price--subject to any further rights of the seller--is subject to 10%
interest p.a. from the due date.
Section 3
TRANSFER OF OWNERSHIP
(1) The Seller transfers the shares designated in Section 1 para. 1 to the
Buyer thus accepting, with taxation and economic effect as of 31 May
(24:00) / 1 June 2002 (0:00) (cut-off date), subject to the condition for
the delivery claim for the shares designated in Section 1 para. 1
stipulated in the paragraph 3 below.
(2) The transfer of title to the shares designated in the above Section 1
para. 1 is subject to the condition subsequent of complete payment of the
purchase price including any interest penalty pursuant to the above
Section 2.
Section 4
WARRANTIES AND GUARANTIES
(1) The BVAG warrants in the form of an independent guarantee promise effective
on the date this contract is concluded that the BVAG is the legal and
economic owner of the shares sold pursuant to Section 1 para. 2 in
conjunction with para. 1 and entitled without restriction to dispose of
these shares. No restrictions on disposal or encumbrances to the shares
exist.
(2) Should one or more of the statements for which the Seller has given a
warranty pursuant to the above para. 1 should prove incorrect, the Buyer
may demand that the Seller, within an term appropriate to the
circumstances, no later than within three months of receiving such demand,
create the condition which would pertain were the statement or statements
to be correct. If the Seller fails to create the contractually warranted
condition within the term set or should the creation of such contractually
warranted condition be impossible, than the Buyer may withdraw from the
contract.
(3) The Seller assumes no further warranties, guarantees, or indemnifications.
All warranty claims for material and legal defects and claims for damages
of whatever kind, other than those in para. 1 expressly assumed guarantees,
are precluded to the extent allowable by law. Should however, the Buyer be
entitled to such claims, these shall be limited to the purchase price for
the shares pursuant to Section 2 para. 1.
(4) The warranty claims pursuant to the above paragraphs 1 - 3 are subject to a
term of limitations of 18 months commencing with the effective date of this
contract.
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Partial Privatization BVAG
May 29, 2002
Section 5
DUTIES OF THE GUARANTOR
The Guarantor undertakes with respect to the Seller, in the form of a debt
assumption, to satisfy the obligations of the buyer arising from this sale and
transfer agreement and to guarantee completely for every obligation of the Buyer
arising from the purchase and holding of the shares acquired by virtue of this
contract. The Guarantor and Buyer are joint and several debtors with respect to
the aforementioned liabilities.
Section 6
RESERVATIONS PERTAINING TO GOVERNING BODIES
This contract, with the exception of Sections 7 and 8 para. 4, will first take
effect as soon as the city council has given its consent and the legal
regulatory agency has also approved the contract or given notice that no
regulatory approval is required.
Section 7
RIGHT TO WITHDRAWAL
(1) If the effective conditions pursuant to Section 3 para 3 and or Section 6
with respect to the shares sold pursuant to Section 1 para 2 in conjunction
with para. 1 have not been satisfied by 31 December 2002 or the required
approvals pursuant to Section 6 have been conclusively denied, both parties
are entitled to withdraw from the contract.
(2) The same shall apply if the share sale and transfer agreement of 15 May
2002 between the SWBS and the TXU Stadtwerke Holding GmbH & Co KG or the
transfer of the shares in the BVAG should conclusively not take effect.
(3) The cost provisions in the following Section 8 para. 4 also apply in the
event of a withdrawal from the contract.
Section 8
FINAL PROVISIONS
(1) The jurisdiction for all disputes arising in connection with this contract
is--to the extent allowable--exclusively Braunschweig.
(2) The Seller undertakes to obtain the required approvals from the company for
the transfer of title to the shares sold. To the extent required, the Buyer
will perform the report the legal transfer of the shares sold for recording
in the company's share register.
(3) Should any provision of this contract, in whole or in part, be or become
invalid or unenforceable, the remainder of the contract shall remain valid.
In place of the invalid or unenforceable contractual provision, an
appropriate provision shall apply in the form of an additional contractual
construction which comes closest in economic sense to that which would
normally have been agreed were the invalidity or unenforceability to have
been known. To the extent that construction is precluded for legal reasons,
the contracting parties undertake to adopt appropriate additional
agreements. The above provision also applies if in the course of execution
or construction of the contract an omission needs to be satisfied.
(4) The costs which the contracting parties incur through the retention of
consultants during the negotiations preceding this contract are to be borne
by each contracting party respectively.
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(5) Changes or amendments to this contract must be in writing to be valid. This
applies also to any change in the requirement of writing. No ancillary oral
agreements have been concluded.
COURTESY
TRANSLATION
EXHIBIT 7
TO THE SHARE PURCHASE AND TRANSFER AGREEMENT BETWEEN
STADTWERKE BRAUNSCHWEIG GMBH AND TXU STADTWERKE HOLDING GMBH & CO. KG
DATED MAY 15, 2002
CONSORTIUM AGREEMENT
between
Stadtwerke Braunschweig GmbH,
represented by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, born on April 30, 1969, acting to the
exclusion of a personal liability as an unauthorized representative
- hereinafter also referred to as "SWBS" -
and
TXU Stadtwerke Holding GmbH & Co. KG,
represented by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, born on August 11, 1964, acting to the
exclusion of a personal liability as an unauthorized representative
- hereinafter referred to as the "Purchaser" -
as well as with respect to Sections II 6. and III - VII
of Braunschweiger Versorgungs-Aktiengesellschaft
represented by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, born on April 30, 1969, acting to the
exclusion of a personal liability as an unauthorized representative
- hereinafter also referred to as "BVAG" or the "Company" -
as well as with respect to section XIV
of TXU Ltd., Europe
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represented by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, born on August 11, 1964, acting to the
exclusion of a personal liability as an unauthorized representative
as well as with respect to section XV
of the City of Brunswick
represented by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, born on April 30, 1969, acting to the
exclusion of a personal liability as an unauthorized representative
SWBS and the Purchaser are hereinafter also referred to as the "(Contractual)
Parties"; this definition also covers BVAG with respect to Sections II 6. and
III - VII.
I. PREAMBLE
SWBS, a 100 % subsidiary of the City of Brunswick (hereinafter also referred to
as the "City") with registered offices in Brunswick, registered with the
commercial register of the County Court in Brunswick under HRB 554, is the sole
shareholder of Braunschweiger Versorgungs-Aktiengesellschaft with its registered
offices in Brunswick, registered with the commercial register of the County
Court in Brunswick under HRB 655.
In order to secure the location of Brunswick and to strengthen BVAG, the City
and SWBS have decided to sell part of the shares in BVAG held by SWBS to a
strategic investor.
With the Share Purchase and Transfer Agreement dated May 15, 2002, SWBS sold and
assigned to the Purchaser shares in BVAG in the amount of 74.9 % of the share
capital of the Company.
In order to regulate their partner cooperation and their mutual rights and
duties as the sole shareholders of BVAG and with the intention to grant SWBS an
appropriate amount of influence in the activities of BVAG even in the future,
the Parties shall, in the sense of a fair reconciliation of interests and mutual
regard in business loyalty pursuant to the principles of good faith, agree to
the following - even for circumstances not regulated by this agreement:
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II. BVAG'S STRUCTURE
1. BVAG'S BOARD OF DIRECTORS
1.1 Pursuant to BVAG's Articles of Association the Company's Board of Directors
consists of one or more members who are appointed by the Company's
Supervisory Board. The Contractual Parties agree that the Company's Board
of Directors shall consist of three members. The Parties furthermore agree
that one member of the SWBS's Board of Directors may be suggested by the
City while the Chairman of the Board of Directors and one other member of
the Board of Directors shall be suggested by the Purchaser. The Purchaser
shall exercise at least its right of suggestion regarding the other member
of the Board of Directors in coordination with the Seller if possible and
draw on current BVAG management. The City's right of suggestion shall end
as soon as SWBS's interest declines below 25.1 % of the Company's share
capital.
Each Contractual party has a right to object to the suggestion of the other
Contractual Party if important reasons resulting from the name of the
suggested person oppose the nomination. Important reasons in the above
sense are, in particular, justified doubts as to the integrity, reliability
or knowledge of the suggested person. The party entitled to make the
suggestion shall be obliged to make a new suggestion should the right to
object have been validly exercised.
1.2 The Parties shall be obliged, as far as is legally permitted, to work
towards the fact that the BVAG Supervisory Board appoints the members of
the Board of Directors and stipulates the number of said members pursuant
to the above cipher 1.1. With respect to the new appointment of the Board
of Directors made necessary by the assignment of shares and based on the
regulation in the aforementioned cipher 1.1 the parties concluding the
contract agree to work towards the fact that the Supervisory Board of the
Company shall appoint the Company's new Board of Directors at the earliest
possible date, at the latest, however, within three weeks after the
assignment of the shares has become effective pursuant to section 3 of the
Share Purchase and Transfer Agreement.
1.3 The above regulations apply correspondingly for revocations and new
elections and/or renewed appointments. The party entitled to make the
suggestion shall, however, have the right to make the final decision as to
the revocation of the member of the Board of Directors whom the party
suggested. This does not apply for a revocation based on an important
reason.
2. BVAG'S SUPERVISORY BOARD
2.1 The Company's Supervisory Board shall in the future, pursuant to cipher 4
of the revised version of the Articles of Association to be resolved upon,
consist of twelve members who are eligible to vote and of whom eight
represent the shareholders and four the employees.
2.2 The Contractual Parties agree that SWBS is entitled, until the option right
pursuant to section 7 of the Share Purchaser and Transfer Agreement has
been exercised, to suggest three of the members of the Supervisory Board to
be appointed by the shareholders, including, until the option is exercised
pursuant to section 7 of the Share Purchase and Transfer Agreement, the
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Mayor of the City. Even after exercising the option pursuant to section 7
of the Share Purchase and Transfer Agreement or after having otherwise
completely or partially transferred the shares held by SWBS until then, the
Purchaser shall always appoint one person nominated by SWBS to the
Supervisory Board. Otherwise the Purchaser shall have the right of
suggestion with respect to the members of the Supervisory Board to be
appointed by the shareholders.
The Parties assume that the current Supervisory Board which consists of 18
members pursuant to the version of the Company's Articles of Association
valid at the time when this agreement is concluded shall remain in office
until the office of the next Supervisory Board commences. The Contractual
Parties furthermore agree that with respect to the composition of this
Supervisory Board SWBS is, until the option right is exercised pursuant to
section 7 of the Share Purchase and Transfer Agreement, entitled to suggest
four (4) of the members of the Supervisory Board to be appointed by the
shareholders, including the Mayor of the City until the aforementioned
option right is exercised. Even after exercising the option pursuant to
section 7 of the Share Purchase and Transfer Agreement or after having
otherwise completely or partially transferred its shares held until then,
SWBS and/or the City is entitled to suggest a member of the Supervisory
Board to be appointed by the shareholders. Otherwise the Purchaser shall
have the right of suggestion with respect to the members of the Supervisory
Board to be appointed by the shareholders.
2.3 With respect to the provisions to elect the members of the Supervisory
Board pursuant to section 11, Paragraph (2), of the Articles of Association
(new version), the Contractual Parties shall be mutually obliged to consent
to the election of members of the Supervisory Board suggested by the other
Contractual Party in the general assembly deciding on this matter unless
important reasons stemming from the name of the suggested person oppose the
election. Important reasons in the above sense are, in particular,
justified doubts as to the integrity and reliability of the suggested
person. With respect to the aforementioned distribution of the Supervisory
Board duties agreed in the above cipher 2.2, Subparagraph 2, the Seller
shall be obliged to arrange for the fact that immediately after the shares
of the company have been assigned, eight (8) Supervisory Board members
shall resign from the Company's Supervisory Board. SWBS shall furthermore
be obliged to vote, in the first general assembly of the Company following
the assignment of the shares, for the election of eight (8) of the
Supervisory Board members to be suggested by the Purchaser. The Parties
shall be obliged to hold the first general assembly within 14 working days
after the assignment of the shares to the Purchaser and, if necessary, to
waive all formalities and notice periods for this.
2.4 The Parties furthermore agree that SWBS - as long as it holds an interest
in BVAG - is entitled to be represented in any committees which are
established by the Supervisory Board with at least one Supervisory Board
member suggested by SWBS who is eligible to vote.
2.5 The Parties agree that the Mayor of the City is to adopt the chairmanship
of the Supervisory Board for BVAG until the complete sale of all shares
held by SWBS. The Parties furthermore agree that the Purchaser has the
right to suggest the first vice-chairman and the employee representative)
has the right to suggest the second vice-chairman of the Chairman of the
Supervisory Board. With respect to the election of the chairman and of the
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vice-chairman of the chairman required pursuant to section 12, Paragraph
(1) of the BVAG's Articles of Association, the Contractual Parties shall be
obliged, within what is legally permitted, to work towards the fact their
representatives in the Supervisory Board shall vote as provided in the
aforementioned agreement.
2.6 The above regulations apply correspondingly for revocations and new
elections and/or renewed appointments.
3. CONSORTIUM COMMITTEE
3.1 For the purpose of coordinating their shareholder rights and the rights
arising from this Consortium Agreement SWBS and the Purchaser shall form a
Consortium Committee which shall consist of three representatives of SWBS
and three representatives of the Purchaser. The members of the Consortium
Committee must be entitled to make decisions which are binding on the party
they represent. They can delegate their rights to a representative as far
as the latter can also act with binding effect for the party they
represent. The representatives of the parties in the Consortium Committee
should also be members of the Supervisory Board of the Company. The
Company's Board of Directors shall always take part in the meetings of the
Consortium Committee but does not have a right to vote.
The Consortium Committee shall for the parties safeguard the rights
pursuant to Sections II.1. through II.4. as well as all other duties which
are assigned to it in this agreement. It is furthermore responsible for the
questions which are presented for clarification to it by a party in
connection with the execution of this Consortium Agreement. Meetings of the
Consortium Committee shall take place upon the request by a party with an
appropriate time allowed between receiving the invitation to attend the
meeting and the meeting actually taking place, which time period should not
generally exceed ten (10) days. As far as all the members of the Consortium
Committee are in agreement, decisions of the Consortium Committee can also
be made outside a meeting either in writing or via telephone. Written
minutes of the resolutions of the Consortium Committee, a copy of which is
to be submitted to the Parties, are to be drawn up.
3.2 There is agreement between the Parties that their respective
representatives in the Supervisory Board should vote uniformly if at all
possible. In order to guarantee this, the Parties shall be obliged to
discuss in advance important subject matters of the resolutions of the
Supervisory Board in the Consortium Committee with the aim to achieve
agreement in either rejecting or consenting to the subject matter of the
resolution. They shall furthermore be obliged, as far as is legally
permitted, to work towards the fact that the members of the Supervisory
Board suggested by them vote in accordance with the decision made in the
Consortium Committee. Important subject matters of resolutions are in
particular modifications of price structures, the approval of the annual
business plan and of the cash-flow projection, conclusion, modification and
rescission of supply agreements and management service agreements, carrying
out voting rights in holding companies and selling interests.
With respect to modifying the general price structure SWBS may only refuse
its agreement in the Consortium Committee if the modification of the price
structure suggested by the Board of Directors is not consistent with the
statutory regulations. SWBS may only refuse its agreement to the draft of
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the annual business plan (minus the cash-flow projection) which is
presented by the Board of Directors, to the conclusion of the agreements
indicated in section 13, Paragraph (2), No. 3 a), b) and d) of the Articles
of Association, to the voting behavior in subsidiaries and holding
companies as far as the aforementioned subject matters of resolutions are
concerned, to the sale of financial assets of the Company as well as to the
granting and revoking of prokura, if these measures would lead to a
violation against the Purchaser's duties regulated in this Consortium
Agreement ("opposing important matters"). If SWBS would like to refuse its
agreement due to opposing important matters, it must give substantiated
reasons. The Parties furthermore agree that the shareholder, against whom
legal proceedings are to be initiated shall have no right to vote in a
resolution deciding upon whether the legal proceedings are to be initiated.
There shall be no obligation to give consent in all other cases; this also
applies with respect to those resolutions where SWBS is generally subject
to voting in accordance with instructions pursuant to the aforementioned
regulations if these are also covered by section 13 (2), No. 16, of the
Company's Articles of Association and are above the limits stipulated in
section 13, ▇▇▇▇▇▇▇▇▇ ▇, ▇▇. ▇ through 15 of the Articles of Association.
3.3 There is further agreement between the Parties that as far as possible they
intend to achieve a consensus of their voting behavior during the Company's
General Assembly. The Parties are therefore obliged to negotiate in advance
resolutions of the General Assembly in the Consortium Committee with the
aim to achieve a consensus of their voting behavior in the General
Assembly. If the Parties cannot achieve such consensus, the voting can take
place without instructions unless something else results either from the
Partnership Agreement of the non-trading partnership to be established for
the purpose of implementing a special agreement establishing the
relationship between two related companies where several parent companies
are involved pursuant to the following cipher 6.2 or from the following:
If one of the measures referred to in the last paragraph of cipher 3.2 is
presented to the General Assembly by the Board of Directors of the Company
for a decision, SWBS - failing agreement - is obliged to consent to these
proposals if it was obliged to declare its agreement in the Consortium
Committee pursuant to cipher 3.2, second paragraph. The last sentence of
cipher 3.2 applies accordingly.
3.4 The Parties shall inform those members of the Supervisory Board suggested
and sent by them and/or elected by the General Assembly of the principles
and aims stipulated in this agreement.
4. REVISED TEXT OF THE BVAG'S ARTICLES OF ASSOCIATION/RULES OF PROCEDURE OF
THE BOARD OF DIRECTORS
4.1 The Contractual Parties agree that the draft of the BVAG's Articles of
Association which is attached to this agreement as EXHIBIT 1 ("REVISED TEXT
OF THE BVAG'S ARTICLES OF ASSOCIATION") shall be resolved upon within one
month after the effective transfer of the shares and registered with the
commercial register. The Articles of Association (new version) which are to
be resolved upon shall replace the currently existing Articles of
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Association. The Parties are obliged to take all measures which are
necessary for this to happen.
4.2 As soon as the transfer to the Purchaser of the sold shares has become
effective and the Board of Directors has been reformed, the Parties shall,
within what is legally permitted, work towards the fact that the Board of
Directors adopts the rules of procedure for the Board of Directors which
are attached as EXHIBIT 2 ("RULES OF PROCEDURE FOR THE BVAG'S BOARD OF
DIRECTORS") and that the Supervisory Board consents to them.
5. DUTIES TO REPORT TO SWBS
The Parties agree that the BVAG's accounting system should irrespective of the
Purchaser's requirements be organized so that it is possible to fulfill any
duties to report to SWBS which are necessary pursuant to the German regulations
on municipal budgets.
6. SPECIAL AGREEMENTS ESTABLISHING THE RELATIONSHIP BETWEEN TWO RELATED
COMPANIES
6.1 A Domination and Profit-and-Loss Absorption Agreement between SWBS as the
dominating company and BVAG as the dominated company has been in existence
since 1971. The end of the business year of the Company has been converted
to June 30, 2002 (short business year), with a view to the intended sale of
shares in the Company in the amount of 74.9 % of the share capital. The
Parties agree that the existing Domination and Profit-and-Loss Absorption
Agreement shall be terminated as of the end of the short business year.
SWBS shall thus take all necessary measures therefore.
6.2 Special agreements establishing the relationship between two related
companies where several parent companies are involved
Agreement furthermore exists between the Parties that after the termination
of the existing Domination and Profit-and-Loss Absorption Agreement a
special relationship between two related companies where several parent
companies are involved is to be concluded between BVAG and the Parties by
means of the conclusion of a Profit-and-Loss Absorption Agreement between
BVAG and a non-trading partnership to be established between SWBS and the
Purchaser with the content indicated in EXHIBIT 3 ("PROFIT-AND-LOSS
ABSORPTION AGREEMENT") with effect under the German law of obligations from
January 1, 2003, [or - if the financial integration will already be
available - alternatively: July 1, 2002]. The Parties are obliged to work
towards the fact that a corresponding agreement is concluded by the end of
2002 [alternatively: end of June, 2002] at the latest and the shareholder
meetings and/or General Assemblies of SWBS, the Purchaser and BVAG grant
their consent hereto while waiving the presentation of a written report by
the Board of Directors of BVAG and the audit of the agreement. The Parties
are furthermore obliged to conclude supplementary agreements and possibly a
domination agreement on the basis of the regulations agreed for the
Consortium Committee if this proves necessary for the fiscal recognition of
the special relationship between two related companies where several parent
companies are involved.
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6.3 For the purpose of implementing a special relationship between two related
companies where several parent companies are involved pursuant to the
aforementioned cipher 6.2, SWBS and the Purchaser shall, before concluding
the aforementioned Profit-and-Loss Absorption Agreement, establish a
non-trading partnership with the name of "Willensbildungsgesellschaft der
Aktionare der Braunschweiger Versorgungs-Aktiengesellschaft" according to
the partnership agreement attached as EXHIBIT 4 ("GBR PARTNERSHIP
AGREEMENT"). The sole purpose of the non-trading partnership is to
demonstrate uniform intention towards BVAG. The Parties agree that the
regulations in Sections II.1. through II.4. shall apply for the principles
of this uniform intention.
6.4 The parties shall be obliged not to cancel or give notice of termination or
otherwise terminate the Profit-and-Loss Absorption Agreement and the
partnership agreement of the Willensbildung non-trading partnership if the
Parties have not agreed to this in the Consortium Committee.
7. BVAG'S REAL ESTATE
The Parties know that BVAG will conclude with the City the framework agreement
with respect to BVAG's real assets, which agreement is attached to this
agreement as EXHIBIT 5 ("REAL ESTATE FRAMEWORK AGREEMENT") in order to regulate
open real estate issues. It is further known to the Parties that the purchase
contracts enclosed to this contract as EXHIBITS 5A ("Purchase of Real Estate
SBWS") and 5B ("Purchase of Real Estate BVAG") shall be concluded between BVAG
and SWBS.
III. REORGANIZATION OF SWBS
1. Before the conclusion of this agreement SWBS provided services to BVAG on
the basis of the Domination and Profit-and-Loss Agreement, such as, e.g.,
financial arrangements, supplying long- and short-term loans, dealing with
legal, fiscal and insurance matters, personnel administration and dealing
with related questions as well as internal auditing.
2. With respect to the altered interests of SWBS due to the sale of the
majority shareholding in BVAG, the City of Brunswick intends to adapt the
corporate organization of SWBS as of December 31, 2002, to the altered
framework conditions. Operating divisions of SWBS or parts thereof which
mainly served until now to provide services to BVAG as well as the
employment and contractual relationships allocated to these operating
divisions are to be transferred to BVAG within the framework of this
reorganization. BVAG shall retain the use of the SWBS services in the
previous scope until the reorganization of SWBS has been carried out. After
the end of the re-organization BVAG shall provide services to SWBS and
Braunschweiger Verkehrs-AG on the basis of service contracts.
In the draft of the framework agreement which is attached to this agreement
as EXHIBIT 6 ("SWBS RE-ORGANIZATION FRAMEWORK AGREEMENT") BVAG and SWBS
will reach agreement on the legal framework conditions for the
aforementioned transfer of operating divisions, personnel and contracts as
well as for providing services before and after the end of the
re-organization.
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3. The Parties as shareholders of BVAG are obliged, within what is legally
permitted, to work towards the conclusion of the aforementioned framework
agreement and the fact that the obligations of BVAG resulting from the
framework agreement are fulfilled properly.
IV. PRESERVING EMPLOYEE RIGHTS / WORKS AGREEMENT
The parties concluding the contract know that the BVAG Board of Directors has
concluded the works agreement attached to this agreement as EXHIBIT 7 ("WORKS
AGREEMENT") with the BVAG works council with respect to the sale to the
Purchaser of the majority shareholding in BVAG in order to preserve the legal
and possession levels of the BVAG employees.
V. PRESERVING THE MEMBERSHIP OF KAV AND VBL
1. At the time when this agreement is concluded, BVAG is a member of the
Kommunaler Arbeitgeberverband Niedersachsen e. V. (Local Employers'
Association in Lower Saxony - referred to in the following as "KAV"). The
Parties shall be obliged as shareholders to work towards the fact that the
BVAG membership in KAV is maintained. Should the membership in KAV have to
be terminated anyway, the Parties shall be obliged to work towards the fact
that the previous protected privileges which were agreed by means of a
collective bargaining agreement are secured by trade agreements of equal
material value.
2. At the time when this agreement is concluded, BVAG is a member of the
Versorgungsanstalt des Bundes und der Lander (Pension Fund for Employees of
the German Federal Republic and States - referred to in the following as
"VBL"). Even after the assignment to the Purchaser of the sold shares has
become effective, this membership shall continue to exist pursuant to
section 19, Paragraph 1, in connection with Paragraph 2, cipher c, of the
VBL's Articles of Association dated January 1, 1967, in the 41st version of
the Articles of Association modified on February 1, 2002, based on BVAG's
membership in KAV. The Parties shall be obliged as shareholders to work
towards the fact that the BVAG membership in VBL is maintained. Should
maintaining the membership in VBL require security to be provided, this
shall be borne exclusively by the Purchaser.
VI. PRESERVING THE FIRM AT THE BRUNSWICK LOCATION
1. BVAG is obliged to insure that all services offered by it within its area
of supply at the time of signing this contract, in particular in the
sectors of electricity, gas, district heating and water supplies, continue
to be offered and the existing BVAG business sectors shall be further
developed as far as is economically reasonable. BVAG is also obliged to
maintain the economic use of the networks for electricity, gas, water and
district heat in Brunswick.
- 9 -
2. BVAG remains an independent company in the sense of the German Stock
Corporation Law (Aktiengesetz) and is obliged to fulfill its duty pursuant
to the above Paragraph 1.
3. The parties shall continue to insure that Brunswick is maintained as the
offices of BVAG registered by law and as the actual location of the main
administration, of the Board of Directors and of all main corporate
functions.
VII. ADDING VALUE TO THE LOCAL REGION
1. The Parties shall as far as is economically reasonable insure that the
companies located in the region are, while observing legal regulations,
preferred when BVAG, or companies in which BVAG holds an interest of at
least 50 %, gives orders. They shall in particular work towards splitting
more extensive orders into batches. The provisions of the works agreements
are to have priority.
2. The Parties agree to work towards that BVAG will conclude with the
electricians' guild and the plumbing and heating guild both located in
Brunswick the market partner agreement attached to this Consortium
Agreement as EXHIBIT 8 ("MARKET PARTNER AGREEMENT"). This market partner
agreement forms the basis of a partnership between the companies belonging
to the guilds (so-called "market partners") and BVAG with respect to
promoting the conversion of heating systems from heating oil, solid fuels
or liquid gas to district heating, local heating and/or natural gas as well
as with respect to procuring contracts for providing electricity, natural
gas and heat. SWBS and the Purchaser are obliged within what is legally
permitted to work towards the fact that this partnership is actively
further developed and remains on a high level until at least December 31,
2010. They are furthermore obliged within what is legally permitted to work
towards the fact that BVAG does not in future directly offer the services
offered by the market partners either.
VIII. FURTHER PERFORMANCE OF THE PURCHASER
1. The Purchaser shall be obliged to support BVAG with its technical and
corporate knowledge and experience, in particular by making appropriate
personnel available. It shall be obliged as far as is economically
reasonable to insure a transfer of knowledge as well as cooperating with
BVAG in the following areas:
a) Portfolio management in the area of electricity in order to secure the
electricity supply at market prices,
b) Optimizing the supply portfolio, further development of the network
management and of the price structure in the areas of gas and possibly
water,
c) Channeling management in the areas of electricity and gas,
d) Billing and customer care,
e) Services in order to continue to develop the BVAG activities.
- 10 -
2. The Purchaser shall be obliged as far as is possible and economically
reasonable to work towards the fact that BVAG continues to use systems to
produce electricity and heat by means of the environmentally friendly
combined method of capturing heat and electricity at the same time and
promotes applying technologies which favor the environment.
3. The Purchaser shall be obliged to work towards the fact that BVAG sales in
the area of electricity lost during the course of competition are
compensated by the acquisition of new customers or by expanding new areas
of business. SWBS shall support this to the best of its ability.
4. The Purchaser shall in particular but not conclusively support BVAG in its
decentral energy production and heat management.
5. The Purchaser shall be obliged to support the expansion of BVAG in the
region within what is economically reasonable. The Purchaser shall besides
expanding business areas promote the cooperation with other energy
suppliers while appropriately taking into consideration the economic
interests of BVAG and the Purchaser's interests, in particular the purchase
and integration in this context of such companies into BVAG.
6. The Purchaser shall be obliged to expand BVAG into a national center of
responsibility within the TXU Group. The business activity of BVAG should
in this sense be expanded in particular in the areas of:
o Key Account Management and
o Taking care of batch customers.
This covers advising and taking care of key account customers in all
questions of energy supply, in particular energy delivery, connection
measures and system services as well as negotiating contracts through to
their conclusion with large customers. BVAG shall within what is legally
permitted take over the responsibility and product development for the
large customers in the German market.
7. The Purchaser shall be obliged to further develop with BVAG and a partner
company of the TXU Group the national marketing of
o Network services and
o Asset management,
whereby the aim of the asset management shall lie in the technical and
economical optimization of the physical expansion of the network and the
new plans which are actually required.
8. The Purchaser shall be obliged to involve BVAG in the development of a
Stirling Motor in order to be able in particular to use it in the area of
Brunswick. The intellectual property rights are to be observed here. The
technology to be found with the Purchaser in the area of development shall
be used here in order to develop the technology of the Stirling Motor or a
comparable technology so that it is ready to be put on the market. The
Purchaser shall furthermore be obliged to set up a maximum of 50 Stirling
Motors for the "Hi-Tech City" ("Hochtechnologiestadt") as far as is
possible and economically reasonable.
- 11 -
9. The Purchaser shall create fifty (50) new and qualified work places in BVAG
for the fulfillment of its aforementioned duties.
10. The Parties shall be obliged to work towards the fact that BVAG maintains
at the same level its previous promotion of cultural and sports activities
and/or of associations serving such purposes as far as is economically
reasonable (at least EUR 130,000.00 p. a.). The Parties amicably agree upon
the distribution of the aforementioned sponsorship services as well as the
services promised by the Purchaser with regard to section 5 of the Share
Purchase and Transfer Agreement.
IX. AGREEMENT RESTRICTING COMPETITION
1. The Purchaser is prohibited from actively competing directly or indirectly
with BVAG or with companies in which BVAG holds an interest of at least 50%
of the nominal capital on any area where BVAG and/or the aforementioned
companies are active. This prohibition of competition applies for the
municipal area of Brunswick. The prohibition of competition also applies
for companies with which the Purchaser is affiliated (section 15,
Aktiengesetz (German Stock Corporation Law)).
The prohibition of competition applies to companies with which the
Purchaser is affiliated (section 15 et seq., AktG) provided that only
active acts of competition (advertising measures, directly approaching
customers, etc.) are registered by affiliated companies in the areas of gas
and electricity, such actions being aimed at BVAG's and/or the
aforementioned subsidiaries' areas of supply. Passive competition in the
areas both under territorial and pertinent protection which does not
originate from a targeted act of competition of affiliated companies is not
covered by the competition agreement.
The prohibition of competition does not apply to agreements which were
already in existence when the Contractual Parties signed this agreement.
2. If the Purchaser departs from the Company or if its shares are redeemed,
the Purchaser and its affiliated companies shall be prohibited for the
duration of twelve months from competing within the region stated in
Paragraph 1 with BVAG or with companies in which BVAG holds an interest of
at least 50 % on an area where BVAG or a company in which BVAG holds an
interest of at least 50 % is active at the time of the departure of the
Purchaser or when the shares are redeemed.
3. Should the prohibition of competition pursuant to the above Paragraphs 1
and 2 be violated, the Purchaser must for each case of violation pay to
SWBS a contractual penalty of (euro) 100,000.00 independent of who was at
fault. Each period of two weeks in which the violation is continued shall
count as independent and separate violations. The right of the Company to
demand compensation or that the violation be stopped remains unaffected by
the payment of the contractual penalty.
X. BUSINESS TRANSACTIONS WITH SHAREHOLDERS
The Contractual Parties agree that business transactions between the Company and
one of the shareholders or a person closely connected to a shareholder are,
irrespective of the requirements regarding consent and majority stipulations in
- 12 -
section 13, Paragraph (2), of the Articles of Association (new version), only
permitted if the respective business transaction is necessary or sensible in the
economic interests of the Company and the mutual business obligations are in an
appropriate ratio which will stand up to a comparison by a third party.
X.a WASTE ENCUMBRANCES
The Parties agree that BVAG shall be released (to the rate of 50 % each by the
Purchaser and SWBS) from any obligations arising from a possible claim based on
waste encumbrances on real estate which was owned by BVAG at the time of
transferring the shares pursuant to section 3 of the Share Purchase and Transfer
Agreement. This obligation of the Parties shall, however, only be valid if the
value of the claims exceeds EUR 5 million.
XI. PERFORMANCE RECEIVED BY THE CITY OR BY COMPANIES
IN WHICH IT HOLDS AN INTEREST
1. When this agreement is concluded, the concession agreement dated March
29/April 17, 2001, existing between the City and BVAG shall be supplemented
corresponding to EXHIBIT 9 ("SUPPLEMENT TO THE CONCESSION AGREEMENT")
attached to this agreement. The supplement of the concession agreement
becomes valid with the transfer of the shares pursuant to the Share
Purchase and Transfer Agreement entered into by the Parties.
2. The Parties know that BVAG has liabilities towards SWBS which result from
the bank loans taken out by SWBS and transferred to BVAG. They also know
that BVAG has current account debts against SWBS and other group companies
with an interest. It is proposed that with the sale of the majority
shareholding of BVAG by SWBS and the connected alteration of the group
structure BVAG and SWBS will reach an consensus in the draft agreement
attached to this contract as EXHIBIT 10 ("SET-OFF AGREEMENT") to set off
against each other the liabilities and debts existing between BVAG and SWBS
and the other group companies with an interest and to compensate a
remaining balance by the end of 2002 at the latest. BVAG should be able to
finance itself independently of the group. The Parties will work towards
the conclusion of the aforementioned agreement.
XII. RIGHTS OF FIRST REFUSAL
1. The Parties agree the following with respect to the restricted
transferability of the shares pursuant to section 6 of the Company's
Articles of Association:
a) The consent pursuant to section 6 is until December 31, 2010, subject
to the free decision of the co-shareholder and can be refused until
this date without a reason by the latter. The consent is subsequently
to be granted if the rights of the party entitled first refusal
pursuant to the following ciphers b) and c) are preserved and it is
insured that the Buyer or Pledgee takes over all obligations arising
from the shareholder relationship, which obligations are incumbent on
- 13 -
the Seller towards the Company or its shareholders and an important
reason does not oppose the consent. An important reason is, in
particular, if the shares should not be assigned while observing the
right of offer standardized under the following cipher b). The consent
becomes effective when notified in writing by the Board of Directors
to the party wishing to make the sale.
b) If a Contractual Party intends to sell shares, he must first offer
them to the other Contractual Party by means of a written declaration
sent by certified post with a receipt report. In deviance from section
8 of the Articles of Association the value can be determined by the
party wishing to make the sale. The time period for exercising this
right of purchase amounts to four weeks as of receipt of the written
declaration.
c) If the right of purchase is not exercised, the Contractual Party
willing to make the sale can sell to third parties the shares
concerned while observing the above regulations and section 6 of the
Articles of Association. However, as far as imperative statutory
regulations do not oppose the sale and the purchase price falls below
the value determined pursuant to the aforementioned cipher b), the
other Contractual Party again has a right of first refusal.
The right of first refusal can be exercised within a period of four
weeks as of receipt of the purchase agreement transmitted by the
selling party to the other party by the latter making a written
declaration to the selling party.
d) The aforementioned provisions of ciphers a) through c) do not apply
for assignments or other methods of disposal to affiliated companies
in the sense of section 15, AktG. Such methods of disposal to
affiliated companies require the prior consent of the general assembly
which, however, may only be refused when justified with an important
reason. An important reason is, in particular, when the company taking
over the shares does not have the necessary financial backing or the
specialist knowledge required for a successful team in the Company,
and if it cannot be insured that the shares will be transferred back
to the respective shareholder if the buyer can no longer be considered
an affiliated company in the sense of section 15 et seq., AktG.
e) b) and c) apply correspondingly for a sale of shares by means of an
exchange provided that the offer for the exchange is in cases of b)
made in principle against a sum of money and in cases of c) the
shareholder with the right of first refusal is entitled to bring an
equivalent economic value instead of the amount agreed in the
exchange.
2. If one or more new shareholders are to be integrated in the Company, the
Parties can make their consent hereto which is required pursuant to the
BVAG Articles of Association depend on the fact that the new shareholder(s)
join this consortium agreement.
3. If there is a transfer of more than 50 % of the direct voting rights for
one party to a company which is not affiliated in the sense of section 15
et seq., AktG, or if there is a Change of Control by an otherwise direct
purchase of the control in the sense of section 290 et seq., HGB, the other
- 14 -
party can demand that all the shares which the first party holds in BVAG
are transferred to it. If there is a Change of Control before December 31,
2005, the purchase price for each 0.1 % of the interest in the BVAG share
capital shall be the amount which would result as the purchaser price for
0.1 % of the interest in the BVAG share capital if the purchase price for
the option pursuant to section 7 of the Share Purchase and Transfer
Agreement concluded between the parties had been given for the purchase of
100 % of the shares minus the 5 % discount on this amount.
If there is a Change of Control after January 1, 2006, the transfer shall
made if a purchase price is paid which corresponds to the market value. The
market value is to be determined by an expert opinion drawn up by an
independent auditor on the basis of a proper corporate evaluation for
companies not listed on the stock exchange (IdW SI-FN8/2000 while using the
DCF proceeding). The auditor shall decide on the corporate evaluation and
this shall be binding on the Parties. If the Parties cannot agree on an
auditor within six (6) weeks after the desire to make the transfer has been
expressed, the auditor shall be commissioned by the Auditors' Institute in
Germany (Institut der Wirtschaftsprufer in Deutschland e. V.) and this
shall be binding on the Parties. The Parties shall each bear half of the
costs of the auditor.
The above regulation shall also apply to SWBS even if less than 50 % of the
voting rights for SWBS is transferred to a third party and there is no
other purchase of the control in the sense of section 290 et seq., HGB,
and, however, the third party is granted the position of a majority
shareholder with respect to decisions affecting BVAG in the shareholders'
meeting, Supervisory Board and SWBS management. On the other hand, the
above regulations shall not apply to SWBS even if more than 50 % of the
direct voting rights for SWBS are transferred or there is another indirect
purchase of the control in the sense of section 290 et seq., HGB, and,
however, the Purchaser is not entitled to the majority of the voting rights
with respect to decisions affecting BVAG in the shareholders' meeting,
Supervisory Board and SWBS management. The above regulations shall not be
applied to the Purchaser's shareholders if the voting rights for the
Purchaser are transferred completely or partially to the other shareholder
or an affiliated company of this other shareholder in the sense of section
15 et seq., AktG, or if there is another purchase of the control by one of
these companies in the sense of section 290 et seq., HGB, at the level of
TXU Europe Ltd. If the control is changed at the level of the shareholders
of TXU Europe Ltd., this shall not create the facts for a Change of Control
in the above sense.
XIII. GENERAL REGULATIONS
1. TERMINATION
1.1 This contract shall run until December 31, 2027. The agreement can be
extended by ten (10) years if notice of termination has not been given with
a notice period of two (2) years before the end of the respective period.
The regulations of Sections II.2.2 and III: through VIII. shall continue to
apply even after the contract has been terminated. The agreement shall
automatically end, with the exception of the regulations in Sections II,
2.2, and III - VIII, with one of the Contractual Parties departing from the
BVAG. The Purchaser shall be obliged to inform SWBS upon its request how
the aforementioned continuing duties are to be observed after the
termination of this agreement.
- 15 -
1.2 The right of the Parties to terminate this agreement extraordinarily shall
remain unaffected. A reason for an extraordinary termination is, in
particular, if a Contractual Party persistently and seriously contravenes
its duties regulated in this agreement in spite of a warning and the
setting of a suitable time period in order to remedy the situation.
An extraordinary termination of the consortium agreement is valid as an
important reason in the sense of section 7, Paragraph (1), cipher a), of
the BVAG Articles of Association (new version) entitling the shares to be
redeemed.
1.3 If one party makes an ordinary termination of the Consortium Agreement, the
other party is entitled to demand within one month after the termination
has become effective that the first party concurrently buys the BVAG shares
of the other party against payment of the higher of the two following
amounts:
a) The market value of the shares at the time of the termination becoming
effective, whereby Section XII.3 applies accordingly for the
determination of the value.
b) The amount which the Purchaser would have paid for these shares based
on the purchase price it paid for the BVAG shares it bought, which
amount earns interest at a rate of 4 % p. a. as of January 1, 2003,
until the termination becomes effective, whereby the purchase price is
viewed as paid up for 74.9 % of the shares.
The right of an offer does not apply if both parties make an ordinary
termination or if it was rescinded.
2. VALIDITY
This agreement becomes valid as soon as the Share Purchase and Transfer
Agreement concluded between the Parties becomes valid.
3. FINAL PROVISIONS
3.1 Should individual provisions of this agreement be or become completely or
partially invalid or unenforceable, the agreement shall otherwise remain
valid. The appropriate regulation which comes closest to the economic
intent of what would usually have been agreed if the invalidity or
unenforceability had been known takes the place of the invalid or
unenforceable contractual provision by means of a supplementary
interpretation of the agreement. If the interpretation is eliminated due to
legal grounds, the Contractual Parties shall be obliged to make
corresponding supplementary agreements. The above regulation shall also
apply if a gap which must be closed appears while implementing or
interpreting the agreement.
3.2 The costs which are entailed by the negotiations, the conclusion and the
implementation of this agreement shall be borne by each Party itself.
3.3 Modifications or supplements to this agreement must be made in writing in
order to be valid. This also applies should this written requirement be
modified. Oral supplements to this agreement have not been made.
- 16 -
XIV. GUARANTEE DUTY OF THE PURCHASER'S SHAREHOLDER
1. TXU Europe Ltd. shall be obliged by means of a collateral promise to
guarantee that all duties of the Purchaser arising from and in connection
with this agreement, its conclusion and its execution shall be fulfilled.
If and as far as it is not legally possible for the shareholder to fulfill
the Purchaser's duties, the Purchaser's shareholder shall be obliged to put
the Purchaser in such a position that it can fulfill its duties and to work
towards the fulfillment of the Purchaser's duties through its shareholder
position in the Purchaser's corporate bodies.
2. There is agreement between the Parties of this contract and TXU Europe Ltd.
that SWBS can also demand the transfer of all the shares in BVAG held by
the Purchaser pursuant to the above cipher XII. 3. if the Change of Control
described in cipher XII. 3. takes place on the level of the TXU Europe Ltd.
shareholders or one of the companies positioned between TXU Europe Ltd. and
the Purchaser.
XV. GUARANTEE DUTY OF THE SELLER'S SHAREHOLDER
The City of Brunswick shall be obliged by means of a collateral promise to
guarantee the duties of the Seller pursuant to the above cipher X.a as well as
pursuant to section 4b of the Share Purchase and Transfer Agreement. If and as
far as it is not possible for the shareholder to fulfill the Seller's duties,
the Seller's shareholder shall be obliged to fulfill these duties.
Brunswick,
-------------------------
------------------------------------ -----------------------------------
- SWBS - - Purchaser -
EXHIBITS
Exhibit 1: Revised Text of the BVAG's Articles of Association
Exhibit 2: Rules of Procedure for the BVAG's Board of Directors
Exhibit 3: Profit-and-Loss Absorption Agreement
Exhibit 4: GbR Partnership Agreement
Exhibit 5: Real Estate Framework Agreement
Exhibit 5a: Purchase of Real Estate SBWS
Exhibit 5b: Purchase of Real Estate BVAG
Exhibit 6: SWBS Re-Organization Framework Agreement
Exhibit 7: Works Agreement
Exhibit 8: Market Partner Agreement
Exhibit 9: Supplement to the Concession Agreement
Exhibit 10: Netting Agreement
- 17 -
OMITTED SCHEDULES
Exhibit 2 Rules of Procedure for the BVAG's Board of Directors
Exhibit 5a Purchase of Real Estate SBWS
Exhibit 5b Purchase of Real Estate BVAG
Exhibit 8 Market Partner Agreement
Exhibit 9 Supplement to the Concession Agreement
The schedules listed above have been omitted from this exhibit; however, each of
TXU Corp. and TXU Europe Limited hereby agrees to furnish supplementally a copy
of any omitted schedule to the Commission upon request by the Commission.
COURTESY TRANSLATION FROM THE GERMAN
EXHIBIT 1 "BVAG ARTICLES OF ASSOCIATION"
TO THE CONSORTIUM AGREEMENT BETWEEN STADTWERKE BRAUNSCHWEIG GMBH AND
TXU STADTWERKE HOLDING GMBH & CO. KG DATED MAY 15, 2002
ARTICLES OF ASSOCIATION
OF
BRAUNSCHWEIGER VERSORGUNGS-AG
Section 1
TYPE OF LEGAL ENTITY AND CORPORATE NAME
(1) The company is a stock corporation.
(2) The company is listed under the corporate name of:
"Braunschweiger Versorgungs-Aktiengesellschaft".
Section 2
REGISTERED OFFICES OF THE COMPANY
The registered offices of the company are located in Brunswick.
Section 3
BUSINESS PURPOSE OF THE COMPANY
(1) The business purpose of the company is to produce, sell and distribute as
well as to trade with electricity, gas, water, heat and activities in the
area of telecommunication.
(2) The company is entitled to initiate all measures and business
transactions which are connected to or promote the aforementioned
business purpose. In order to carry out its business activities the
company can use other companies, hold an interest in them or set up,
purchase or lease such companies and ancillary plants and conclude
agreements between business enterprises.
Section 4
BUSINESS YEAR
The company's business year is the calendar year.
1
Section 5
SHARE CAPITAL
(1) The share capital of the company amounts to DM 120,000,000.00 (in
words: Deutsche ▇▇▇▇ one hundred and twenty million).
(2) The share capital is divided into 120,000 registered shares in the
nominal value of DM 1,000 each.
Section 6
TRANSFER OF SHARES
The shares can only be transferred, pledged, disposed over in any other way or
encumbered with the written consent of the company. The Board of Directors
requires herefor the approval of the General Assembly. The resolution of the
General Assembly requires a majority of three-quarters of the total share
capital.
Section 7
REDEMPTION
(1) The shares of a shareholder can be redeemed without the consent of the
shareholder pursuant to Section 237, German Stock Corporation Law
(Aktiengesetz ("AktG")), if there is an important reason in accordance
with the following list:
a) Serious and, despite a warning, continuous and/or repeated
violation by a shareholder of major shareholder duties, which
make it impossible to achieve or which considerably endanger
the achievement of the business purpose or make it become
unreasonable to continue the shareholder relationship for the
other shareholder(s).
b) Pledge in or other legal execution measures on shares in the
company unless the execution measure is cancelled within two
months or, at the latest, until the shares are marketed,
c) Initiating an insolvency proceeding regarding the assets of a
shareholder or refusing such initiation due to lack of assets
or
d) Grossly negligent or willful serious violation of the duties
stipulated in the above Section 6 when selling or encumbering
shares.
The possibility to contest the redemption resolution remains
unaffected.
(2) The General Assembly decides on the redemption of shares by means of a
unanimous resolution. The shareholder involved is not eligible to vote
when resolutions which concern the redemption of shares based on an
important reason are considered.
(3) When there is an important reason, instead of redeeming the shares the
company can unanimously resolve that the shares are assigned to the
company itself, to one or more shareholders or to a third party to be
determined by the company.
2
(4) The redemption becomes effective when the redemption resolution is made
known. At least the voting and dividend rights are excluded from this
moment.
(5) The shares are valuated pursuant to the regulations of Section 8 of
these Articles of Association.
Section 8
VALUATION
(1) Should the shares be redeemed based on an important reason which
results from the behavior of the shareholder or from any judicial
execution measures against the shareholder, the value of the shares
shall be measured by means of the equity allotted to them, i.e. the
paid up share capital plus disclosed reserves and plus an annual
surplus and profit brought forward and/or minus an annual deficit and
loss brought forward. The value of the shares calculated in this manner
may not fall below 50 % of the pro rata corporate value.
(2) If there is disagreement about the evaluation pursuant to the above
Paragraph (1), the evaluation shall, while excluding the ordinary
jurisdiction of a court and with a binding effect on both sides, be
determined by a firm of certified auditors, on which firm the
shareholder concerned and the other shareholders must agree within two
weeks after the redemption resolution and/or after receiving
notification of the redemption. The firm of certified auditors shall,
by means of fair judgment and binding on both sides while excluding the
ordinary jurisdiction of a court, also decide which shareholder shall
bear the costs of the expert opinion; it is possible to share the
costs.
If there is no agreement within the two-week period as to which firm of
certified auditors should be commissioned, the auditors shall be
commissioned on the basis of a suggestion which is binding on all
parties involved and which is produced by the Institute of Auditors in
Germany (Institut der Wirtschaftsprufer in Deutschland e. V.) in
Dusseldorf,. The above paragraph applies accordingly regarding the
binding effect and how the costs shall be borne. The suggestion is to
be sent to the shareholders in writing.
As far as a higher value than regulated above is more closely
stipulated by law or through case law, this amount shall be owed.
(3) The value to be determined pursuant to the above paragraphs is to be
paid to the departing shareholder in the case of a redemption in four
equal half-yearly installments, at the longest, the first one half a
year after the departure date. The compensation payment shall not earn
interest until the first installment is due. The outstanding
compensation payment shall earn interest of 2 % p. a. above the base
rate pursuant to the German Discount Rate Transition Act following the
due date of the first installment. The company shall be allowed to make
an earlier payment.
(4) The aforementioned provisions apply accordingly in the cases of
Section 7, Paragraph (3).
3
Section 9
CORPORATE BODIES
The corporate bodies are as follows:
1. The Board of Directors
2. the Supervisory Board
3. the General Assembly
Section 10
BOARD OF DIRECTORS AND REPRESENTATION OF THE COMPANY
(1) The Board of Directors shall consist of one or more members. The
members of the Board of Directors shall be appointed and revoked by the
Supervisory Board; it shall determine the number of members and
conclude the employment agreements with them.
(2) The Board of Directors shall resolve with a simple majority of votes as
far as nothing else results from the Rules of Procedure (Paragraph 4).
The Supervisory Board can appoint a member of the Board of Directors to
be the Chairman of the Board of Directors. If a Chairman of the Board
of Directors is appointed, his vote shall decide if there is an
equality of votes.
(3) The company shall be represented by two members of the Board of
Directors or by one member of the Board of Directors and one prokurist.
If only one member of the Board of Directors is appointed, he/she shall
solely represent the Board of Directors.
(4) The Board of Directors can give itself Rules of Procedure which require
the consent of the Supervisory Board.
(5) Members of the Board of Directors shall be released from the
restrictions of self-contracting [Section 181, German Civil Code
("BGB")], as far as business transactions are carried out with
affiliated companies which they are empowered to represent.
Section 11
COMPOSITION AND TERM OF OFFICE OF THE SUPERVISORY BOARD
(1) The Supervisory Board shall consist of twelve members.
(2) Stadtwerke Braunschweig GmbH shall have the right and duty to send the
mayor of the city of Brunswick to the Supervisory Board of the Company.
The other members of the Supervisory Board shall be elected by the
General Assembly as far as they are not to be elected as members of the
Supervisory Board representing the employees pursuant to other
statutory provisions. Substitute members can be appointed pursuant to
Section ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇.
(3) The term of office of the members of the Supervisory Board shall end at
the latest with the end of the General Assembly which resolves upon the
discharge for the fourth business year after the beginning of their
term of office. The business year in which the term of office begins is
4
not included in this calculation. The office of a member of the
Supervisory Board who is also a member of the Brunswick city council
shall end before the end of the term of office pursuant to the above
Sentence 1 if the election period of the city council ends earlier, if
he/she departs from the city council or if revoked by the general
assembly. The office of a member of the Supervisory Board who is also a
statutory representative of the city of Brunswick shall end before the
end of the term of office if his position as the statutory
representative of the city of Brunswick ends earlier.
(4) If a member of the Supervisory Board departs during his/her term of
office, a subsequent member shall only be appointed for the remainder
of the term of office of the departing member of the Supervisory Board.
It is possible to re-appoint a member of the Supervisory Board.
(5) Each member can resign from his office by means of a written
declaration while observing a one-month notice period. The company can
waive this notice period in agreement with the resigning member.
(6) A member of the Supervisory Board can be revoked before the end of his
term of office by the General Assembly with a three-quarters majority.
(7) Apart from the reimbursement of their actual expenses the members of
the Supervisory Board shall receive an annual lump-sum attendance fee
for meetings, which fee is determined by the General Assembly. Other
remuneration is not given to the Supervisory Board.
Section 12
CHAIRMANSHIP, CALLING MEETINGS, RESOLUTIONS AND
REPRESENTING THE SUPERVISORY BOARD
(1) The Supervisory Board shall elect from its members the chairman of the
Supervisory Board as well as two vice-chairmen for the term of office
stipulated in Section 9. The vice-chairmen shall, in the order
determined in this election, have the rights and duties of the chairman
whenever he/she is prevented from attending meetings. If the chairman
or a vice-chairman departs during his/her term of office, the
Supervisory Board must elect a substitute without undue delay.
(2) A meeting of the Supervisory Board shall be called by the Chairman as
often as business requires and if demanded by a member of the Board of
Directors or by a member of the Supervisory Board giving the purpose
and reasons, but at least once every half calendar year.
(3) Invitations shall be sent in writing enclosing the agenda with a period
of at least two weeks and the relevant documentation with a period of
at least ten (10) days between the date when the invitation was sent
and the date of the Supervisory Board meeting (the postal stamp of the
place from where the invitation was sent is decisive for the time
periods). In urgent cases an invitation can be transmitted with a
shorter time period by telephone or orally, by e-mail or by facsimile.
This also applies for transmitting the documentation.
5
(4) The members of the Board of Directors shall participate in the
Supervisory Board meetings. The Supervisory Board can decide something
different in individual cases.
(5) The Supervisory Board shall be competent to pass a resolution if all
members have been invited and more than half of the members, including
the chairman and one vice-chairman, are present. If a matter is
postponed due to the lack of a quorum in a Supervisory Board meeting
and if a second meeting is called to discuss the same matter, the
Supervisory Board shall be competent to pass a resolution if at least
five members are present. This is to be stated in the invitation.
(6) The Supervisory Board shall make its resolutions with a simple majority
of votes as far as nothing else emerges by law or from these Articles
of Association. If there is an equality of votes, the vote of the
chairman or, if he/she is absent, the vote of the vice-chairman, shall
be decisive. Abstentions and invalid votes shall count in order to
determine the quorum but not towards calculating the majority. Absent
members of the Supervisory Board can vote in writing pursuant to
Section ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇. In elections the person who receives
the most votes is elected. Lots shall be drawn if there is an equality
of votes.
(7) The chairman can initiate a resolution of the Supervisory Board instead
of holding a meeting by accepting votes either in writing (also by
facsimile) or by telephone. This resolution is valid if this procedure
is not contested without undue delay by a member of the Supervisory
Board.
(8) The Supervisory Board shall give itself rules of procedure.
Section 13
TASKS OF THE SUPERVISORY BOARD
(1) The provisions of the German Stock Corporation Law shall apply with
respect to the rights and duties of the Supervisory Board.
(2) The following requires the consent of the Supervisory Board:
1. Business plan as well as the cash-flow projection and
modifications thereto;
2. Stipulating and modifying the general price structure and the
general conditions of supply;
3. Concluding, modifying and rescinding the following:
a) Supply agreements for electricity, gas, water and
heat with a total business value of more
than(euro)15,000,000.00
b) Concession agreements
c) Demarcation agreements
d) Management service agreements with a total business
value of more than(euro) 10,000,000.00
e) Agreements between business enterprises in the sense
of the German Stock Corporation Law; Section 293,
AktG, remains unaffected;
6
4. Purchasing and selling companies and interests with a value
for each business transaction (i.e. the purchase price plus
any accepted debts and other obligations of the Purchaser,
such as, e.g., accepting losses, guarantees, etc.) of more
than(euro) 5.000.000;
5. Electing, nominating and suggesting people for the Supervisory
Board or a corresponding supervisory body in other companies;
6. Calling for and voting in shareholder meetings and general
assemblies of other companies, as far as subject matters are
to be resolved upon there which would, for this Company,
require the consent of the Supervisory Board pursuant to this
Paragraph (2);
7. Purchasing, selling and encumbering real estate and equivalent
rights as far as
a) their value exceeds the amount of(euro)5,000,000 in a
single case or
b) a lower amount stipulated in the Board of Directors'
rules of procedure is exceeded in a single case;
8. Taking out and/or taking over
a) long-term loans (running more than a year) and a loan
value of more than(euro) 10,000,000.00,
b) short-term loans (running less than a year) and
credit lines within the daily cash management as far
as the value exceeds (euro) 15,000,000.00 in a single
case,
c) guarantees, concluding granting agreements and
ordering other securities for companies in which BVAG
holds an interest of more than 50 % in the nominal
share capital if a liability obligation of more than
(euro) 5,000,000.00 and of more than (euro)
1,000,000.00 for other companies could be the result
thereof;
9. Gifts, granting long-term and medium-term loans and waiving
debts as well as sponsoring measures as far as
a) their value exceeds the amount of(euro)1,000,000 in a
single case or
b) a lower amount stipulated in the Board of Directors'
rules of procedure is exceeded in a single case;
10. Purchasing or creating economic fixed assets as far as
a) their value exceeds an amount of(euro) 5.000.000 or
b) a lower amount stipulated in the Rules of Procedure
of the Board of Directors is exceeded
and the economic assets have not already been taken into
consideration in a concrete way in the business plan;
7
11. Concluding other agreements which bind the company for longer
than one year and oblige the company to make payments of more
than (euro) 5,000,000 in a single case or to commit in similar
circumstances more than (euro) 1,000,000 per year as far as
these affect investment measures already included in the
business plan;
12. Granting and revoking prokura;
13. Commencing legal disputes against shareholders or commencing
legal disputes of fundamental importance; fundamental
importance can be assumed in particular with an amount in
contest of (euro) 5.000,000 or more;
14. Business transactions with members of the Supervisory Board
except for those business transactions which are evidently
concluded on the basis of the company's usual conditions
within the course of ordinary business or which result from
the employment relationship of a member of the Supervisory
Board as an employee of the company;
15. Waiving claims of the company against a prokurist or when
concluding a settlement agreement with a prokurist;
16. Concluding agreements with shareholders or with companies who
are connected to this shareholder (Section 15, AktG) as far as
a) this is not within the scope of normal business
activity and
b) the obligations resulting from this exceed a total
of(euro) 250,000 in a single case or in similar
circumstances.
(3) The resolution to extend the catalog of business activities and
measures requiring consent pursuant to the aforementioned Paragraph (2)
requires a majority of two-thirds of the members of the Supervisory
Board.
(4) If business transactions which require consent cannot be postponed, the
Board of Directors may act with the consent of the Chairman of the
Supervisory Board who must inform the Supervisory Board in its next
meeting of the details of the business transaction and the reasons for
the urgent decision.
Section 14
TASKS OF THE GENERAL ASSEMBLY
The General Assembly shall deal with the tasks allocated to it by law and
through the Articles of Association. The following are particularly included in
its tasks:
1. Appropriation of the net earnings;
2. Discharge of the members of the Board of Directors and of the
Supervisory Board;
3. Appointing the auditors;
4. Approval of the annual financial statements.
8
Section 15
CALLING AND CHAIRMANSHIP OF THE GENERAL ASSEMBLY
(1) The General Assembly shall be called by the Board of Directors as far
as nothing else is stipulated by law.
(2) Apart from the cases stipulated in law, the Board of Directors shall
call the General Assembly whenever the Supervisory Board or
shareholders whose shares comprise a total of 5 % of the share capital
demand it. The ordinary General Assembly shall take place within the
first eight months of the business year.
(3) The General Assembly shall be called either by notification in the
Federal Gazette (Bundesanzeiger) or by means of registered mail; the
date when the mail was sent shall be the date of notification. At least
one month must lie between the date when the meeting was called and the
date when the General Assembly actually takes place.
(4) The chairman of the Supervisory Board or his/her vice-chairman or, if
they should be absent, one of the other Supervisory Board members (in
the order of the eldest) shall hold the chairmanship of the General
Assembly.
Section 16
RESOLUTIONS OF THE GENERAL ASSEMBLY
Unless otherwise stipulated by law or by the Articles of Association,
resolutions of the General Assembly require the simple majority of the share
capital represented in the meeting.
Section 17
BUSINESS PLAN
The Board of Directors shall draw up a business plan in due time so that the
Supervisory Board can give its consent before the start of the business year.
The business plan shall consist of both the profit and loss and investment
plans. A five-year cash-flow projection to be amended each year shall further be
attached to the business plan.
Section 18
STATEMENT OF ACCOUNTS, MANAGEMENT REPORT AND AUDIT
(1) The statement of accounts (balance sheet, profit and loss account and
its appendix) and the management report shall be drawn up for the
previous business year by the Board of Directors in the first three
months of the business year.
(2) Immediately after receiving the audit report from the auditors, the
Board of Directors must present the statement of accounts, the
management report and the audit report to the Supervisory Board for its
approval. While approving the annual financial statements the Board of
Directors and the Supervisory Board are not empowered to allocate to
other profit reserves the net earnings which remain after deduction of
9
the amounts to be allocated to legally restricted retained earnings and
a loss brought forward pursuant to ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇,
▇▇▇▇.
The Board of Directors must also present to the Supervisory Board the
suggestion which it will make to the General Assembly for the use of
the profit of the balance sheet as far as an agreement between business
enterprises does not oppose this. The net earnings are to be
distributed as far as is statutorily permitted unless another
appropriation of the net earnings is resolved by a unanimous decision
of the General Assembly.
(3) The statement of accounts shall be prepared, approved, audited and
disclosed pursuant to the regulations of the third volume of the German
Commercial Code (Handelsgesetzbuch - HGB), which regulations apply to
large public limited companies. The auditors' scope of review shall
also cover the subjects to be audited pursuant to ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇▇ ▇, ▇▇. ▇ and 2, German Budgetary Principles Act
(Haushaltsgrundsatzegesetz). A duplicate of the audit report is to be
sent to the city of Brunswick and the competent supervisory authority.
(4) The powers in accordance with Section 54, German Budgetary Principles
Act, shall be granted to the auditing institutions responsible for the
city of Brunswick.
Section 19
NOTIFICATION
The statutory notifications of the company shall be published in the Federal
Gazette.
Section 20
FINAL PROVISIONS
(1) As far as these Articles of Association do not stipulate otherwise, the
statutory provisions in their latest version shall apply.
(2) Any agreements between the shareholders or between the company and the
shareholders must be in writing in order to be valid as far as a
notarial deed is not stipulated by law. This also applies if this
written requirement shall be waived.
(3) This agreement shall remain valid even if individual stipulations in
the Articles of Association prove to be invalid and/or unenforceable.
The invalid provision of the Articles of Association shall then be
supplemented or re-interpreted by a shareholder resolution so that the
economic purpose intended by the invalid and/or unenforceable provision
shall be achieved as far as possible. The same shall be true if a gap
which needs to be filled arises while implementing the Articles of
Association.
Brunswick,..........................
10
ANLAGE "ERGEBNISABFUHRUNGSVERTRAG"
ZUM KONSORTIALVERTRAG (BIETER M)
kpmg Beiten ▇▇▇▇▇▇▇▇▇ Teilprivatisierung BVAG
14. Mai 2002, Seite 3 von 3
ANNEX 3
TO THE CONSORTIAL AGREEMENT BETWEEN THE STADTWERKE BRAUNSCHWEIG AND THE TXU
STADTWERKE HOLDING GMBH & CO KG OF 15 MAY 2002
PROFIT/ LOSS ABSORPTION AGREEMENT
between
1. GbR "Willensbildungsgesellschaft der Aktionare der
Braunschweiger Versorgungs-Aktiengesellschaft"
represented by their shareholders
the Stadtwerke Braunschweig GmbH,
which is jointly represented by the general managers
Messrs. ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ Hinckeldeyn
and
TXU Stadtwerke Holding GmbH & Co. KG,
which is represented by...
- hereinafter "Willensbildungsgesellschaft" -
and
2. the Braunschwieger Versorgungs-Aktiengesellschaft,
represented by its managing director, ▇▇. ▇▇▇▇ ▇▇▇▇▇,
- hereinafter the,,dependent company" -
PREAMBLE
The capital stock of the dependent company totals DM 120,000,000.00. The
Stadtwerke Braunschweig GmbH holds 25.1% (shares with a nominal value of DM
30,120,000.00). TXU Stadtwerke Holding GmbH & Co KG holds 74.9% (shares with a
nominal value of DM 89,880,000.00). The Stadtwerke Braunschweig GmbH and TXU
Stadtwerke Holding GmbH & Co KG have joined together in the partnership,
"Willensbildungsgesellschaft der Aktionare der Braunschweiger
Versorgungs-Aktiengesellschaft" for the purpose of taking uniform decisions with
respect to the dependent company.
ANLAGE "ERGEBNISABFUHRUNGSVERTRAG"
ZUM KONSORTIALVERTRAG (BIETER M)
kpmg Beiten ▇▇▇▇▇▇▇▇▇ Teilprivatisierung BVAG
14. Mai 2002, Seite 3 von 3
Section 1
PROFIT TRANSFER
1. The dependent company undertakes to transfer its entire profit to the
Willensbildungsgesellschaft. To be paid over are, subject to the accrual or
reversal of reserves pursuant to para. 2 following, annual profit generated
without the profit transfer, reduced by any loss carry forward form the
previous year and the amount required for the statutory reserve.
2. The dependent company may, with the consent of the
Willensbildungsgesellschaft, to the extent dictated by prudent commercial
judgment, set aside amounts from the annual profit as retained earnings.
Upon demand of the Willensbildungsgesellschaft retained earnings accrued
for the duration of this contract--other revenue reserves pursuant to
Section 272 para. 3 of the German Commercial Code (HGB) and capital
reserves from shareholder contributions from the
Willensbildungsgesellschaft pursuant to Section 272 para. 2 No. 4 HGB--are
to be reversed and used to balance an annual deficit or paid over as
profit. Pay over of amounts from retained earnings accrued prior to the
conclusion of this agreement is precluded.
Section 2
LOSS ABSORPTION
The Willensbildungsgesellschaft is obliged to balance any deficit incurred
during the term of the contract to the extent that it is not balanced by amounts
taken from retained earnings pursuant to the aforementioned Section 2 para.
which were paid into these during the term of the contract.
Section 3
TERM OF CONTRACT
1. This contract takes effect on 1 January 2003 [1 July 2002](1).
2. The contract is concluded for an initial term of five years and is extended
for one year if not cancelled six months prior to the contract's
expiration. A cancellation my first be exercised only as of 31 December
2007 [30 June 2007] and only at the end of the BVAG fiscal year.
3. The right to cancellation for serious cause remains unaffected thereby.
4. A serious cause is especially if the shareholders of the
Willensbildungsgesellschaft together no longer hold the majority of the
voting rights appertaining to the shares in the dependent company or one of
the shareholders no longer holds at least 25% of the dependent company's
capital stock.
5. In any event the contract expires at the end of the dependent company's
fiscal year in which the Willensbildungsgesellschaft is dissolved.
Section 4
SEPARABILITY
Should one or more provisions or an essential part of this agreement be invalid
or be rendered invalid or unenforceable, either in whole or in part, the
validity of the remaining provisions of this agreement shall remain unaffected
thereby. The same shall apply should an omission be found in the agreement.
Instead of the invalid or unenforceable provision or to cure the omission, an
-------------------
(1) In the event that the financial integration of the BVAG in the Buyer
already be given as of 1 July 2002, a multi-parent dependency should be
implemented from this time on.
ANLAGE "ERGEBNISABFUHRUNGSVERTRAG"
ZUM KONSORTIALVERTRAG (BIETER M)
kpmg Beiten ▇▇▇▇▇▇▇▇▇ Teilprivatisierung BVAG
14. Mai 2002, Seite 3 von 3
appropriate provision shall apply which comes closest in the economic sense to
that which would normally have been agreed were the invalidity, unenforceability
or insufficiency to have been known.-
Braunschweig, ...
---------------------------- ----------------------------
Stadtwerke Braunschweig GmbH
Geschaftsfuhrung
-----------------------------
Braunschweiger Versorgungs-AG
Vorstand
ANNEX 4 "GESELLSCHAFTSVERTRAG GBR"
kpmg Beiten ▇▇▇▇▇▇▇▇▇ ZUM KONSORTIALVERTRAG (BIETER M)
Teilprivatisierung BVAG
14. Mai 2002, Seite 3 von 3
ANNEX 4
TO THE CONSORTIAL AGREEMENT BETWEEN THE STADTWERKE
BRAUNSCHWEIG AND THE TXU STADTWERKE HOLDING GMBH & CO KG OF 15 MAY 2002
PARTNERSHIP AGREEMENT
of the
1. Willensbildungsgesellschaft der Aktionare der Braunschweiger Versorgungs-
Aktiengesellschaft
between
Stadtwerke Braunschweig GmbH
- hereinafter also,,SWBS" -
and
2. TXU Stadtwerke Holding GmbH & Co KG
- hereinafter "Buyer" -
PREAMBLE
The Stadtwerke Braunschweig GmbH holds 25.1% of the capital stock in the
BraunschweigerVersorgungs-Aktiengesellschaft (hereinafter ,,BVAG") amounting to
DM 120,000,000.00 (shares with a nominal value of DM 30,120,000.00). The buyer
holds 74.9% (shares with a nominal value of DM 89,880,000.00). The SWBS and the
Buyer hereby join together in a partnership called "Willensbildungsgesellschaft
der Aktionare der Braunschweiger Versorgungs-Aktiengesellschaft" (hereinafter
"Willensbildungsgesellschaft", for the purpose of uniform decision-making with
respect to the ▇▇▇▇.
▇▇▇▇▇ ▇ "▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇"
kpmg Beiten ▇▇▇▇▇▇▇▇▇ ZUM KONSORTIALVERTRAG (BIETER M)
Teilprivatisierung BVAG
14. Mai 2002, Seite 3 von 3
Section 1
PURPOSE OF PARTNERSHIP
The purpose of the partnership is to make uniform decisions with regard to the
BVAG. For this purpose the partners will exercise uniformly all rights inherent
as shareholders in the BVAG, esp. their voting rights at the annual
shareholders' meeting of the BVAG, as well as all rights inhering in the Profit/
Loss Absorption Agreement between the Willensbildungsgesellschaft and the BVAG.
Section 2
UNIFORM EXERCISE OF RIGHTS
(1) For the purpose of agreeing their shareholder rights and their rights under
the consortial agreement concluded between the shareholders on 15 May 2002,
the SWBS and the Buyer have founded a consortial committee composed of
three representatives of the buyer. The members of the consortial committee
are entitled to make binding decisions on behalf of each respective party.
They can delegate their rights to a representative to the extent that this
person is entitled to act in a binding fashion for his party.
(2) The partners will agree in accordance with the aforementioned consortial
agreement, at least prior to each shareholder meeting or supervisory board
session of the BVAG, and prior to every decision with respect to the
management board of the BVAG, regardless of whether the influence on the
management board is through agreement, guidelines or other means, within
the context of a consortial committee session, to the uniform exercise of
their rights. Decisions of the consortial committee may also be made in
writing or by telephone outside of sessions if all members of the
consortial committee consent.
(3) Each shareholder is obliged to exercise his rights with respect to the BVAG
in accordance with the previously agreed consensus.
Section 3
PROCEDURE IN THE EVENT OF DISSENT
(1) If the parties are unable to reach a consensus, the following shall apply:
a. To the extent that a simple majority of the shareholders' meeting is
sufficient to adopt resolutions, the SWBS is obliged to vote as
prescribed by the Buyer, if not otherwise stipulated hereafter.
b. To the extent that a qualified majority of the shareholders' meeting
is required to adopt a resolution, then it is required to uniformly
vote against the adoption of the proposed resolution if not otherwise
stipulated hereafter.
c. If the management board submits to BVAG shareholders' meeting or the
supervisory board a measure to be decided as mentioned in the last
paragraph of No. II .3.2 of the consortial agreement, then the parties
are obliged to agree this proposal in accordance with No. II of the
consortial agreement to the extent permitted by law to effect a
corresponding vote by the supervisory board members proposed by them.
(2) If the parties cannot achieve a consensus and the consortial agreement does
not stipulate according to which parties specifications the influence right
toward the BVAG is to be exercised the parties are obliged to effect their
representatives in the governing bodies of the BVAG voting as if the
subject to be decided require unanimity and the unanimity were not reached,
i.e. to vote uniformly "no" with respect to the resolution proposed.
Section 4
PROFIT TRANSFER, LOSS ABSORPTION
The profit to be paid over by the BVAG to the Willensbildungsgemeinschaft
belongs to the shareholders in proportion to their participation in the capital
stock of the BVAG. At the same time, the shareholders bear any BVAG loss to be
absorbed by the Willensbildungsgesellschaft, in proportion to their
participation in the capital stock of the BVAG.
Section 5
EFFECTIVE DATE AND DURATION
(1) This contract takes effect on 1 January 2003 [1 July 2002](1).
(2) The contract is concluded for an initial term of five years and is extended
for one year if it has not been cancelled six months prior to its
expiration. A cancellation my first be exercised only as of 31 December
2007 [30 June 2007] and only at the end of the BVAG fiscal year.
(3) The right to cancellation for serious cause remains unaffected thereby.
(4) A serious cause is especially if the shareholders of the
Willensbildungsgesellschaft together no longer hold the majority of the
voting rights appertaining to the shares in the dependent company or one of
the shareholders no longer holds at least 25% of the dependent company's
capital stock.
(5) The partnership terminates automatically with the complete withdrawal of
one of the shareholders from the BVAG.
Section 6
SEPARABILITY
Should one or more provisions or an essential part of this agreement be invalid
or be rendered invalid or unenforceable, either in whole or in part, the
validity of the remaining provisions of this agreement shall remain unaffected
thereby. The same shall apply should an omission be found in the agreement.
Instead of the invalid or unenforceable provision or to cure the omission, an
appropriate provision shall apply which comes closest in the economic sense to
that which would normally have been agreed were the invalidity, unenforceability
or insufficiency to have been known.
Braunschweig,...
---------------------------- ----------------------------
Stradtwerke Braunschweig GmbH Buyer
GEschaftsfuhrung
-------------------
(1) In the event that the financial integration of the BVAG in the Buyer
already be given as of 1 July 2002, a multi-parent dependency should be
implemented from this time on.
"REAL ESTATE FRAMEWORK AGREEMENT"
EXHIBIT TO THE CONSORTIUM AGREEMENT
kmpg Beiten ▇▇▇▇▇▇▇▇▇ Partial Privatization of BVAG
April 23, 2002, Page 1 of 4
DRAFT
EXHIBIT 5: "REAL ESTATE FRAMEWORK AGREEMENT"
TO THE CONSORTIUM AGREEMENT BETWEEN STADTWERKE BRAUNSCHWEIG GMBH AND
.............. DATED ........, 2002
REAL ESTATE FRAMEWORK AGREEMENT
between
the City of Brunswick,
represented by its Mayor,
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇,
- hereinafter referred to as the "City" -
and
Braunschweiger Versorgungs-Aktiengesellschaft,
represented by its Board of Directors, ▇▇. ▇▇▇▇ ▇▇▇▇▇,
- hereinafter referred to as "BVAG" -
The City and BVAG are hereinafter also referred to as the "(Contractual)
Parties".
PREAMBLE
(1) Stadtwerke Braunschweig GmbH (hereinafter also referred to as "SWBS"), a
100 % subsidiary of the City with registered offices in Brunswick,
registered with the commercial register of the County Court in Brunswick
under HRB 554, is the sole shareholder of BVAG with its registered offices
also in Brunswick, registered with the commercial register of the County
Court in Brunswick under HRB 655. The City and/or SWBS intend to sell the
majority of the shares in BVAG to a strategic partner.
(2) With respect to the altered interests of BVAG due to this sale BVAG
transfers to the City the real estate which is defined subsequently. BVAG
furthermore grants to the City in the following a property right of use
regarding certain real estate (rail real estate) as well as a purchase
right and a right of first refusal with respect to certain real estate if
there is public interest.
"REAL ESTATE FRAMEWORK AGREEMENT"
EXHIBIT TO THE CONSORTIUM AGREEMENT
kmpg Beiten ▇▇▇▇▇▇▇▇▇ Partial Privatization of BVAG
April 23, 2002, Page 2 of 4
DRAFT
SECTION 1
RIGHT OF USE OF RAIL REAL ESTATE
(1) BVAG is the owner of the real estate defined in EXHIBIT 1 ("RAIL REAL
ESTATE").
(2) BVAG declares that with the registration of a limited personal servitude in
the above real estate it agrees to the following content:
"The City is entitled to lay and/or to set up a rail line with accessories
free of charge and to operate, use, maintain and replace it on a permanent
basis. The persons authorized by the City are entitled to use and enter at
any time and in the required scope the real estate in order to monitor the
rail line and to carry out all necessary work. The rights can be exercised
by third parties."
(3) The City shall only make use of the servitude as far as the operation of
the thermal power station is not hindered thereby.
(4) As far as manufacturing work on the track system, etc., is necessary for a
use in the sense of the above Paragraph 2, the party taking the measures
shall bear the costs required herefor. The manufacturing work shall be
carried out by the party taking the measures, which party is also obliged
to carry out the measures.
(5) The City shall bear all costs which incur in connection with exercising the
servitude, including other costs and public expenses and duties as far as
these can be allocated to the (parts of the) real estate in use.
(6) The Parties agree that the granting of the limited personal servitude does
not include waiving the rights of the owner of the real estate in a
proceeding granting official approval of a plan or any other public
proceeding to build or operate a rail line.
SECTION 2
TRANSFER OF REAL ESTATE TO THE CITY
(1) BVAG is the owner of the real estate defined in EXHIBIT 2 ("BVAG REAL
ESTATE") which is dedicated to public use. The real estate does not have
any land charges pursuant to categories II. and III. of the land register.
The notary public inspected the land registry today.
(2) BVAG herewith sells to the City the real estate stated in Paragraph 1 with
all the connected rights and fixtures and statutory accessories.
The City is obliged to reimburse to BVAG as the purchase price the book
value of the real estate which is to be determined and proven on June 30,
2002. This purchase price is to be paid into the following BVAG bank
account within ten (10) days after registering the change of ownership in
the land registry:
"REAL ESTATE FRAMEWORK AGREEMENT"
EXHIBIT TO THE CONSORTIUM AGREEMENT
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Account No. ....................
Bank Sort Code: ....................
Name of Bank: ....................
(3) The Parties know that a separation survey and division must still be
carried out for the areas in EXHIBIT 3 marked green, dark blue and ▇▇▇▇▇
and corresponding surveyor's diagrams created. The Parties are also obliged
to take all measures necessary herefor. Following the creation of the land
registry folios the Parties shall declare in due form the completion of the
sale and apply to have the change of ownership registered.
(4) The real estate is deemed to have been transferred when the change of
ownership has been registered. The use and charges as well as the duty of
the owner to make the real estate safe for persons or vehicles are
transferred to the City on this date; from the first day of the following
month the City shall also bear the public expenses and taxes which are
levied herefor.
(5) The City shall bear all costs and taxes arising from the sale and/or the
transfer of the real estate as well as from the completion of these legal
transactions (costs of the notarization and completion of the sale, survey,
property acquisition tax, entries in the land registry, etc.).
SECTION 4
PURCHASE RIGHT AND RIGHT OF FIRST REFUSAL FOR THE CITY
(1) BVAG is obliged to transfer to the City or a third party appointed by the
City the real estate listed in EXHIBIT 4 ("REAL ESTATE WITH PURCHASE
RIGHTS") upon written request by the City against reimbursement of the
market value and as far as the City proves a public interest in the
transfer of the real estate. The obligation only exists as far as the real
estate is not necessary for the BVAG's operation at the time of exercising
the purchase right.
(2) If there is no agreement on the market value to be reimbursed, the market
value shall be determined by the expert committee of an auditor registered
with the valuer's office while excluding the due process of law and have a
binding effect on both sides. BVAG and the City must agree on the
appointment of the auditor within two (2) weeks after receiving the City's
request. The City shall bear the costs of the auditor's expert opinion.
(3) BVAG grants the City a right of first refusal for the purchase of the real
estate stated in the above Paragraph (1) should BVAG intend to sell this
real estate or parts thereof to a third party. If the City does not use its
right of first refusal within a period of 14 days after it has been
informed of the conditions of sale to a third party, BVAG is entitled to
sell the respective real estate to the third party. If the City uses its
"REAL ESTATE FRAMEWORK AGREEMENT"
EXHIBIT TO THE CONSORTIUM AGREEMENT
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April 23, 2002, Page 4 of 4
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right of first refusal, BVAG is obliged to transfer the respective real
estate to the City at those conditions which it agreed with the third
party.
(4) If the City uses its purchase right or right of first refusal, it shall
bear all costs and taxes arising from the sale and/or the transfer of the
real estate and from the completion of these legal transactions (costs of
the notarization and completion of the sale, property acquisition tax,
entries in the land registry, etc.).
SECTION 5
FINAL PROVISIONS
(1) This agreement shall become valid as soon as the Share Purchase and
Transfer Agreement concluded between SWBS and .................... has
become valid.
(2) Should one or more provisions or a significant part of this agreement be or
become completely or partially invalid or unenforceable, the validity of
the other provisions of this agreement shall remain unaffected by this. The
same applies if the agreement should contain a gap in the regulations. An
appropriate regulation which comes closest to the economic intent of what
would usually have been agreed if the invalidity or unenforceability or gap
had been known should then apply instead of the ineffective or
unenforceable provisions or in order to close the legal gap.
(3) Modifications or supplements to this agreement must be made in writing in
order to be valid. This also applies should this written requirement be
modified. Oral supplements to this agreement have not been made.
EXHIBITS:
Exhibit 1: Rail Real Estate
Exhibit 2: BVAG Real Estate
Exhibit 3: Partial Areas of BVAG Real Estate to be Surveyed
Exhibit 4: Real Estate with Purchase Rights
Brunswick, ..., 2002
------------------------------- -----------------------------
City of Brunswick Braunschweiger Versorgungs-AG
Mayor Board of Directors
OMITTED SCHEDULES
Exhibit 1: Rail Real Estate
Exhibit 2: BVAG Real Estate
Exhibit 3: Partial Areas of BVAG Real Estate to be Surveyed
Exhibit 4: Real Estate with Purchase Rights
The schedules listed above have been omitted from this exhibit; however, each of
TXU Corp. and TXU Europe Limited hereby agrees to furnish supplementally a copy
of any omitted schedule to the Commission upon request by the Commission.
EXHIBIT "FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS"
TO THE CONSORTIUM AGREEMENT
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EXHIBIT 6 "REORGANIZATION FRAMEWORK AGREEMENT"
TO THE CONSORTIUM AGREEMENT BETWEEN STADTWERKE BRAUNSCHWEIG GMBH
AND ..................... DATED ........... 2002
FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS
between
Stadtwerke Braunschweig GmbH,
jointly represented by its general managers,
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ Hinckeldeyn,
- hereinafter referred to as "SWBS" -
and
Braunschweiger Versorgungs-Aktiengesellschaft,
represented by its management board member,
▇▇. ▇▇▇▇ ▇▇▇▇▇,
- hereinafter referred to as "BVAG" -
SWBS and BVAG shall also be referred to below as "the Parties".
PREAMBLE
(1) SWBS, a wholly-owned subsidiary of the City of Braunschweig (hereinafter
also referred to as "City"), having its registered office in Braunschweig,
entered in the Commercial Register of the Local Court of Braunschweig under
HRB 554, is the sole shareholder of BVAG, also having its registered office
in Braunschweig, entered in the Commercial Register of the Local Court of
Braunschweig under HRB 655. As the managing holding company, SWBS has so
far provided services for BVAG and its other subsidiaries on the basis of
domination and profit and loss transfer agreements; these include, for
example, financial accounting, credit procurement, resolving legal, tax and
insurance matters, human resources, procurement, EDP services and internal
auditing.
EXHIBIT "FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS"
TO THE CONSORTIUM AGREEMENT
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(2) The City/SWBS intends to sell the majority of shares in BVAG to a strategic
partner. With regard to the change in shareholdings in BVAG occurring as a
consequence of this sale, the City plans to adjust the company structure of
SWBS to the changed basic conditions by December 31, 2002. Within the scope
of this reorganization, divisions and functions of SWBS, which to date have
primarily served to provide services for BVAG, and the related employment
relations, assets and legal relations are to be transferred to BVAG.
(3) In the following Agreement, the legal framework for the planned
reorganization of SWBS, the provision of services by SWBS for BVAG and by
BVAG for SWBS or its subsidiaries prior and subsequent to conclusion of the
planned reorganization shall be set out.
SECTION 1
TRANSFER OF DIVISIONS AND FUNCTIONS, EFFECTIVE DATE
(1) The Parties are in agreement that the transfer of divisions and functions,
the associated assets and legal relationships and corresponding employment
relations planned within the scope of the reorganization of SWBS shall be
conducted effective as of January 1, 2003 ("Effective Date"). The Parties
undertake to make every effort and to reasonably cooperate in order to
implement the transfer of the divisions and functions to BVAG by the
effective date stated.
(2) The detailed transfer of divisions and functions is regulated below in
section 3 to 8. The services to be performed by SWBS for BVAG and to be
utilized by BVAG until the effective data of the transfer are regulated in
the provisions in section 2; sections 9 to 11 finally regulate those legal
relationships between BVAG and SWBS and between BVAG and Braunschweiger
Verkehrs-AG which are to be established effective as of the effective date.
(3) Should, contrary to expectations, the reorganization process not be
completed by December 31, 2002 and, as a result, the divisions and
functions are unable to be transferred to BVAG by January 1, 2003,
divisions and functions shall be alternatively transferred as stipulated in
this Agreement and by no later than July 1, 2003 (effective date 2). SWBS
undertakes to inform BVAG in writing immediately, but no later than six
weeks prior to December 31, 2002, with regard to any delays in the
reorganization process and the alternative implementation of the transfer
of divisions and functions until effective date 2. The following provisions
of this Agreement apply for this case, subject to the proviso that the
effective date is replaced in each case by effective date 2.
EXHIBIT "FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS"
TO THE CONSORTIUM AGREEMENT
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SECTION 2
SERVICES BY SWBS FOR BVAG
UNTIL THE EFFECTIVE DATE
(1) SWBS undertakes to continue rendering the services presently provided for
BVAG until the effective date to at least the extent these services have
been provided to date and to ensure that these services are provided for
BVAG, based on type, extent, quality and deadline, in a way necessary for
BVAG to properly conduct business. The Parties thus hereby conclude a
service agreement based on the following provisions.
(2) The services to be provided by SWBS for BVAG relate to the following
functions (departments):
- Main Department ("Department 11")
- Financial Accounting ("Department 111")
- Tax ("Department 112")
- Controlling ("Department 113")
- Finance ("Department 114")
- Procurement ("Department 121")
- Human Resources ("Department 141")
- Management Department ("Department 101")
- Internal Audit and Organization ("Department 102")
- Occupational Safety and Environmental Protection ("Department 103")
- Legal, Insurance, Real Estate ("Department 104")
- Investments ("Department 105")
- Corporate Planning ("Department 106")
- Corporate Communication ("Department 107")
- Central Information Processing ("Department 108")
- Inventory Management ("Department 122")
- Training ("Department 143")
- Service Center (DSC, "Department 144")
EXHIBIT "FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS"
TO THE CONSORTIUM AGREEMENT
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A detailed description of the services is contained in EXHIBITS I, Nos. 1
to 18 ("Service Description").
(3) For the services described above, BVAG shall pay SWBS a flat service charge
of EUR 6,500,000.00 for six months plus statutory VAT. The charge shall be
due and payable in two quarterly installments on September 30 and December
31, 2002.
(4) The service relationship shall commence on July 1, 2002 and shall cease on
December 31, 2002. It shall be extended until June 30, 2003, should,
pursuant to section 1 (3) above, effective date 2 apply for the transfer of
divisions and functions. For the extended period, a further service charge
of EUR 6.5 million plus VAT is again to be paid by BVAG; half of which
shall, in each case, become due and payable on March 31 and June 30,
respectively.
SECTION 3
DIVISIONS AND FUNCTIONS TO BE TRANSFERRED
(1) The Parties are in agreement that the following named divisions and
functions shall be transferred from SWBS to BVAG in full or part as of the
effective date.
a) Divisions and functions to be transferred in full:
- Main Department 11: Finance and Accounting
- Department 121: Procurement
- Department 101: Management Department, Press
- Department 102: Internal Audit and Organization
- Department 103: Occupational Safety and Environmental Protection
- Department 108: Central Information Processing
- Department 122: Inventory Management
- Department 143: Training
b) Divisions to be partially transferred:
- Department 111: Financial Accounting
- Department 112: Tax
- Department 113: Controlling
- Department 114: Finance
- Department 141: Human Resources
EXHIBIT "FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS"
TO THE CONSORTIUM AGREEMENT
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- Department 104: Legal, Insurance, Real Estate
- Department 106: Corporate Planning
- Department 144: Service Center (DSC)
(2) The full or partial transfer of the above divisions and functions shall be
effective in such a way that the affected employees shall be transferred
from SWBS to BVAG on the basis of a personnel transfer agreement, the
assets belonging to the divisions and functions acquired by BVAG at book
value, and the contractual relationships associated with the divisions and
functions regarding purchased or provided services assumed by BVAG.
SECTION 4
TRANSFER OF PERSONNEL
(1) BVAG undertakes, as of the effective date, to take over up to 180 active,
operating full-time positions (employee years), up to 8.5 dormant
employment relationships and all trainees and interns employed at SWBS as
of the effective date, from SWBS. The distribution of the positions as of
December 31, 2001 over the divisions and functions to be transferred can be
seen in EXHIBIT II 1 ("Staffing Schedule"). As of the effective date, the
188 active, operating full-time positions listed in the exhibit shall be
reduced to 180 on the basis of already fixed retirements. However, the
positions affected by the reduction have yet to be determined.
(2) SWBS shall identify and allocate the employees to the positions stated
above in (1). For this purpose, SWBS shall organize an ordered process
which sufficiently takes account of employees' interests and regularly
inform BVAG about its progress.
(3) The transfer of employees pursuant to (1) and (2) above shall be effected,
under preservation of the acquired rights to which the employees are
entitled under their employment relations, on the basis of a personnel
transfer agreement which must correspond to the model of EXHIBIT II 2 to
this Framework Agreement ("Personnel Transfer Agreement"). However, SWBS
undertakes not to grant any higher salary brackets or other increased
remuneration to the employees to be transferred within the scope of the
transfer.
(4) Were they to remain with SWBS, the active, operational full-time positions
to be transferred to BVAG would reduce to a planned 145 positions by
December 31, 2005 as a result of retirement, pre-retirement part-time work
or similar on the basis of a currently ongoing restructuring program. The
Parties are in agreement that this scheduled reduction in the number of
positions shall also remain possible following the transfer to BVAG. The
planned reduction in the number of positions and its schedule has been
taken into consideration and provided for in the "Works Agreement
EXHIBIT "FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS"
TO THE CONSORTIUM AGREEMENT
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Guaranteeing Future Employment in the Context of the (Partial)
Privatization and Restructuring of Braunschweiger Versorgungs-AG", of which
both Parties are aware.
(5) SWBS and, insofar as possible, BVAG shall make every effort to ensure that
none of the employees to be transferred pursuant to (1) to (3) above oppose
the transfer of their employment relations to BVAG. In the event that
employees oppose the transfer of their employment relations or terminate
their employment relations as of the effective date, SWBS shall bear all
resulting claims of the affected employees relating to a continuation or
termination of their employment relations. In the event that BVAG is
claimed against for such claims, SWBS shall fully release BVAG from this.
Conversely, BVAG shall have no claim for damages it incurs as a result of
employees not agreeing to a transfer of their employment relations to BVAG
and therefore the affected positions not being able to be filled or only
being filled at a later date by BVAG. BVAG shall also have no claims for
damages from SWBS relating to employment relations which are transferred as
of the effective date and which are terminated for whatever legal ground
subsequent to the effective date.
SECTION 5
ACCRUALS FOR PRE-RETIREMENT PART-TIME WORK
(1) BVAG is aware of the currently applicable provisions at SWBS for
pre-retirement part-time work. These pre-retirement part-time work
provisions shall be continued for the employment relations covered by these
and which are transferred to BVAG.
(2) SWBS has set up accruals for the employees covered by the pre-retirement
part-time work provisions and shall also continue these until December 31,
2002. The prorated accrual amount relating to the employment relations to
be transferred shall be determined as of the effective date. BVAG shall
assume this determined prorated accrual amount and, within four weeks
following transmission of the determined amount, shall pay SWBS a
corresponding cash settlement. In this regard, SWBS undertakes to disclose
and substantiate the calculation of the accrual amount relating to the
employment relations to be transferred to BVAG.
SECTION 6
TRANSFER OF FIXTURES, FITTINGS AND OFFICE EQUIPMENT
(1) SWBS shall sell and transfer the fixtures, fittings and office equipment
assets belonging to the divisions and functions as of the effective date to
BVAG. BVAG undertakes to accept the transfer of these assets and to pay
SWBS their book value as of the effective date. EXHIBIT II 3 to this
Agreement ("Book Values") contains an overview of the related book values
of the fixtures, fittings and office equipment as of December 31, 2001 and
EXHIBIT "FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS"
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their estimated allocation to the divisions and functions to be fully or
partially transferred. The book values are still stated in German marks.
(2) SWBS shall perform the final identification and allocation of the assets as
of the effective date. However, SWBS shall undertake to transfer fixtures,
fittings and office equipment to the extent required for the employees
transferred to BVAG as of the effective date to have all assets necessary
to duly continue their tasks in the transferred divisions and functions.
Furthermore, the Parties already agree today, with binding effect, that the
book value as of the effective date, for which BVAG shall remunerate SWBS,
shall not exceed EUR 8,050k.
(3) SWBS undertakes to substantiate the inventory and book value of the
fixtures, fittings and office equipment as of the effective date in
suitable form. The purchase price amounting to the book value shall be due
and payable within four weeks following substantiation concurrently against
procurement of unrestricted title to the related assets.
(4) SWBS assures BVAG that the transferred assets are in a fully functioning
state, are suitable for the intended use and have been subject to normal
wear and tear. The overall book value to be paid shall take into account
all valuation allowances deemed necessary according to prudent commercial
judgment. The sale and transfer of the fixtures, fittings and office
equipment shall also be effected to the exclusion of all warranties.
SECTION 7
TRANSFER OF CONTRACTS FOR PURCHASED SERVICES
(1) BVAG undertakes to take over all of SWBS's contractual relationships for
the purchase of services related to the divisions and functions to be
transferred and to assume all rights and obligations thereunder from the
effective date. EXHIBIT II 4 to this Agreement contains a list of these
contractual relationships.
(2) SWBS undertakes to inform the parties to these contractual relationships
about the agreement transfer and both Parties undertake to make every
reasonable effort to gain the required approval of the contractual partners
to transfer contracts. Nevertheless, should, in individual cases, approval
not be granted by the contractual partner, the Parties shall act between
themselves as if the agreement transfer were conducted effectively. SWBS
thus undertakes to call in all services owed by the contractual partner in
favor of and at the request of BVAG. In return, BVAG undertakes to fulfill
all obligations under these contracts with a discharging effect for SWBS
and/or to release SWBS from such obligations.
(3) Should it become evident that further contractual relationships relating to
purchased services exist, which are not listed in Exhibit II 4 to this
Agreement, but are required for BVAG to operate the divisions and functions
taken over itself, the Parties undertake to cooperate on an additional
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TO THE CONSORTIUM AGREEMENT
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transfer of these contractual relationships by BVAG based on (1) and (2)
above.
SECTION 8
CONTRACTUAL RELATIONSHIPS FOR THE PERFORMANCE OF SERVICES
(1) BVAG undertakes to take over all of SWBS's contractual relationships for
the performance of services related to the transferred divisions and
functions and to assume all rights and obligations thereunder from the
effective date. EXHIBIT II 5 to this Agreement contains a list of these
contractual relationships.
(2) The provisions of the above section 7 (2) shall apply as appropriate to the
assumption of the contractual relationships in accordance with the above
paragraph (1) and to the legal relationship between the Parties in the
event that individual contractual partners do not agree to an agreement
being taken over.
SECTION 9
NEW LEASE AGREEMENTS BETWEEN SWBS AS THE LESSOR AND BVAG
(1) BVAG partly uses business premises in buildings B1 to B4 in Taubenstrasse.
SWBS shall acquire title to the properties on which these buildings are
erected from BVAG by independent notarial deed. In the period from July 1,
2002 to December 31, 2002, SWBS shall not demand any independent rent from
BVAG for the use of the said business premises. The related expenses of
SWBS are contained in the service charge pursuant to the above section 2 of
this Agreement. With effect from the effective date, the Parties shall
conclude the lease agreement pursuant to EXHIBIT II 6 of this Agreement for
the business premises used by BVAG in buildings B1 to B4 in Taubenstrasse.
(2) SWBS currently uses business premises in the Nordbahnhof administrative
building on the street by the northern railway station. This houses the
Occupational Safety and Environmental Protection division in particular.
SWBS shall acquire this property and the building thereon from BVAG by
independent notarial deed. The expenses for this building for the period
from July 1, 2002 to December 31, 2002 are contained in the service charge
pursuant to section 2. As of the effective date, the Parties shall conclude
the lease agreement pursuant to EXHIBIT II 7 of this Agreement for the
premises of SWBS then used by BVAG.
(3) The divisions and functions to be transferred from SWBS to BVAG are
currently housed to some extent in SWBS's administrative building in
Carl-Miele-Strasse. The expenses for the period from July 1, 2002 to
December 31, 2002 are contained in the service charge pursuant to section
2. As of the effective date, the Parties shall conclude the lease agreement
pursuant to EXHIBIT II 8 of this Agreement for the premises then used by
BVAG.
EXHIBIT "FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS"
TO THE CONSORTIUM AGREEMENT
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SECTION 10
SERVICE AGREEMENTS BETWEEN BVAG AND SWBS
(1) The Central Information Processing division shall be transferred to BVAG in
its entirety in accordance with the above section 3. However, SWBS will
still need certain services from this department after the effective date.
BVAG therefore undertakes to conclude a service agreement on the provision
of IT services with SWBS with effect from the effective date.
(2) In the service agreement to be entered into, BVAG shall undertake to
provide services to SWBS in accordance with the Service Description in
EXHIBIT II 9 of this Agreement. For the services described above, BVAG
undertakes to pay SWBS an annual charge of EUR 100,000.00 plus statutory
VAT. The annual charge shall be payable in four equal installments at the
end of each quarter. This service agreement shall initially be concluded
until December 31, 2004.
SECTION 11
SERVICE AGREEMENT BETWEEN BVAG AND BRAUNSCHWEIGER VERKEHRS AG
(1) Like BVAG, Braunschweiger Verkehrs AG has used certain services of SWBS to
date. The transfer of the entire "Central Information Processing" and
"Procurement" divisions to BVAG means that Braunschweiger Verkehrs-AG will
need to use services from both areas of BVAG. BVAG therefore undertakes to
conclude a service agreement for such services with Braunschweiger
Verkehrs-AG with effect from the effective date.
(2) In the service agreement to be entered into, BVAG shall undertake to
provide services to Braunschweiger Verkehrs-AG in accordance with the
Service Description in EXHIBIT II 10 of this Agreement. The initial term of
the service agreement shall run until December 31, 2010.
(3) In return, Braunschweiger Verkehrs-AG undertakes to pay BVAG, from the
effective date, an annual service charge of EUR 620k plus statutory VAT,
which shall increase by 2% annually starting from January 1, 2004, for the
services of the "Central Information Processing" division. The charge shall
be payable in four equal installments at the end of each quarter.
For the procurement services Braunschweiger Verkehrs-AG undertakes to pay
BVAG an annual service charge of EUR 190k which shall remained fixed over
the contractual term plus statutory VAT. This charge shall also be payable
in four equal installments at the end of each quarter.
EXHIBIT "FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS"
TO THE CONSORTIUM AGREEMENT
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SECTION 12
FINAL PROVISIONS
(1) This Agreement shall take effect as soon as the share purchase and
assignment agreement concluded between SWBS and ...... takes effect.
(2) Should one or several provisions or a significant part of this Agreement be
or become wholly or partially invalid or impracticable, the validity of the
remaining provisions shall remain unaffected hereby. The same shall apply
should the Agreement prove to contain a gap in its provisions. To replace
the invalid or impracticable provisions or to fill the gap in the
provisions, an appropriate arrangement shall take effect which comes as
close as possible in economic terms to what would have been agreed had the
invalidity, impracticability or gaps been known.
(3) Amendments and additions to this Agreement must be made in writing to be
effective. This shall also apply to the amendment to the requirement of
written form. No oral side agreements have been made.
EXHIBITS:
Exhibit I: Service Description
Exhibit II 1: Staffing Schedule
Exhibit II 2: Personnel Transfer Agreement
Exhibit II 3: Book Values
Exhibit II 4: Purchased Services
Exhibit II 5: Performed Services
Exhibit II 6: Lease Agreement B1 to B4
Exhibit II 7: Lease Agreement Nordbahnhof
Exhibit II 8: Lease Agreement Carl-Miele-Strasse
Exhibit II 9: Service Description SWBS
Exhibit II 10: Service Description BVAG
Braunschweig, dated...
EXHIBIT "FRAMEWORK AGREEMENT ON THE REORGANIZATION OF SWBS"
TO THE CONSORTIUM AGREEMENT
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April 22, 2002, page 11 of 11
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------------------------------------ ----------------------------
Stadtwerke Braunschweig GmbH Braunschweiger Versorgungs-AG
Management Management Board
OMITTED SCHEDULES
Exhibit I: Service Description
Exhibit II 1: Staffing Schedule
Exhibit II 2: Personnel Transfer Agreement
Exhibit II 3: Book Values
Exhibit II 4: Purchased Services
Exhibit II 5: Performed Services
Exhibit II 6: Lease Agreement B1 to B4
Exhibit II 7: Lease Agreement Nordbahnhof
Exhibit II 8: Lease Agreement Carl-Miele-Strasse
Exhibit II 9: Service Description SWBS
Exhibit II 10: Service Description BVAG
The schedules listed above have been omitted from this exhibit; however, each of
TXU Corp. and TXU Europe Limited hereby agrees to furnish supplementally a copy
of any omitted schedule to the Commission upon request by the Commission.
COURTESY TRANSLATION FOR INFORMATION PURPOSES ONLY
The German original is the only binding version for decision-making purposes
DRAFT
WORKS AGREEMENT GUARANTEEING FUTURE EMPLOYMENT IN THE CONTEXT OF THE
(PARTIAL) PRIVATIZATION AND RESTRUCTURING OF BRAUNSCHWEIGER VERSORGUNGS-AG
PREAMBLE
WHEREAS, the City of Braunschweig as the sole shareholder of Stadtwerke
Braunschweig GmbH, which in turn is the sole shareholder of BVAG intends to
completely or partially sell BVAG to a private investor,
WHEREAS, the parties to this works' Agreement agree that there should be no
disadvantages as a consequence of the (partial) privatization and any related
restructuring of BVAG and subsequent operating measures at BVAG to the employees
employed by BVAG and any employees transferred to the latter from Stadtwerke
Braunschweig GmbH (SWBS) and from Energienetze Braunschweig GmbH (▇▇.▇▇) to the
extent that such employees are employed by BVAG, SWBS or ▇▇.▇▇ on the date this
Agreement takes effect pursuant to section 13 (1) of this Agreement, in terms of
the employees' existing rights and conditions pursuant to the respective
employment agreements,
Now, therefore, the following Agreement is concluded between
BRAUNSCHWEIGER VERSORGUNGS-AG, Taubenstrasse 7, 380106 Braunschweig, represented
by the management board,
- "BVAG" -
and the WORKERS' COUNCIL OF BRAUNSCHWEIGER VERSORGUNGS-AG, represented by the
chairperson of the workers' council:
SECTION 1
SCOPE OF APPLICATION
(1) This Works Agreement applies to all employees who have an employment or
training contract with BVAG at the time this Works Agreement takes effect
pursuant to section 13 (1) of this Works Agreement - regardless of whether
they remain with BVAG or are transferred to a legally independent company,
to the extent they are affected by a restructuring measure related to the
(partial) privatization mentioned in the preamble.
(2) The term employees includes:
- Trainees
- Employees with employment agreements for a limited term or whose
employment relationship has been temporarily suspended
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DRAFT
- Employees who have entered into an Altersteilzeit contract
(special German form of part-time early retirement) regardless of
whether are in the working phase or retirement phase.
(3) The provisions of this Works Agreement also apply to any employees
transferred by Stadtwerke Braunschweig GmbH to BVAG and Energienetze
Braunschweig GmbH who are employed by these companies at the time this
Agreement takes effect pursuant to section 13 (1) of this Works Agreement.
(4) The provisions disallowing terminations for operating reasons (section 3
(2) of this Works Agreement) do not apply to trainees. They only apply to
employees with limited term employment contracts to the extent that
terminations for operating reasons are necessary before expiry of the
employment contract.
(5) The provisions governing trainees/trainees accepted for employment
positions (section 6 of this Works Agreement) only apply to trainees.
SECTION 2
TRANSFER OF EMPLOYMENT AGREEMENTS
In the course of a possible restructuring program at SWBS, BVAG agrees to accept
at the request of SWBS, any business divisions or tasks and those employees
engaged in such sectors who at this time were working indirectly in or for the
interests of BVAG. The employment contracts of the workers transferred to BVAG
from SWBS (either pursuant to section 613 a German Civil Code or in terms of
individual agreements) shall be granted identical terms regarding their function
and position in the company and shall retain their existing rights and
conditions. The details of the transfer shall be governed by a personnel
transfer agreement.
SECTION 3
GUARANTEE OF EMPLOYMENT AND JOBS
(1) In order to ensure that the possible consequences of a (partial)
privatization of BVAG and related changes to the operating structure
are socially acceptable to the group of employees defined in section 1
of this Works Agreement, any necessary personnel-related measure will
be conducted on the basis of the following terms, as an expression of
trusting cooperation and joint responsibility.
(2) Terminations for operating reasons are disallowed if the reason lies
in a sale of shares in BVAG. Moreover, any other terminations of
employees as defined by section 1 of this Works Agreement for
operating reasons are disallowed until December 31, 2010 regardless of
whether the employees remain by BVAG or are transferred to a legal
successor.
(3) Amendments for operating reasons to employment contracts with
employees as defined by section 1 of this Works Agreement may only be
made if they are of benefit to the employee, do not lead to a
deterioration of his or her rights from the existing employment
contract or if such disadvantages are settled in the course of a
redundancy plan or reconciliation of interests. A reasonable offer of
transfer made pursuant to section 5 of this Works Agreement must also
have been declined by the employee concerned before an amendment can
be made to his or her employment contract for operating reasons.
COURTESY TRANSLATION FOR INFORMATION PURPOSES ONLY
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DRAFT
(4) Employment contracts in place at BVAG, including any employees
transferred to BVAG by SWBS and/or ▇▇.▇▇ at the time this Agreement
takes effect, shall remain in terms of number and nature(1) pursuant
to Exhibit 1, which is an integral component of this Works Agreement
at the Braunschweig location and may only be changed by mutual consent
in the interests of retaining the Braunschweig location. In addition,
the workers' council shall be appropriately involved in human
resources planning.
(5) It shall be ensured that BVAG's current location for operations and
training in the City of Braunschweig shall be retained. Changes in
location within the perimeter of the City are not excluded.
(6) Any fall in the number of positions as a result of commercial
developments shall be compensated by creating new business fields,
insourcing any outsourced tasks and reducing overtime hours; and any
need to reduce the headcount shall be performed in a socially
acceptable manner by offering early retirement, Alterteilzeit,
paternal leave arrangements and by using termination agreements that
contain severance payment clauses.
SECTION 4
RIGHT TO RETURN TO BVAG
Employees as defined by section 1 of this Works Agreement who are transferred to
a legally independent entity are entitled to return to BVAG at the same terms
and conditions as their original employment agreement with BVAG, if the company
to which they are transferred becomes insolvent, is liquidated or closes down
its operations.
SECTION 5
TRANSFERS
(1) Transfers of employees as defined by section 1 of this Works Agreement
may only be effected if they are reasonable for the employee, do not
lead to a deterioration of his or her rights and conditions from the
existing employment contract or if such disadvantages are settled in
the course of a redundancy plan or reconciliation of interests.
(2) Transfers are deemed reasonable for employees if the position of the
employee concerned is dismantled and the following steps for
reemployment are observed:
(a) precedence is given to a position of similar value with identical
or similar responsibilities in the same sector
(b) if this is not possible, a position of similar value with similar
responsibilities in another sector is offered,
(c) if there is no possibility of employing the worker in his or her
career to date, a position is offered in a related activity or
career,
(d) if none of the above opportunities are available to employ the
worker concerned, he or she shall be given further training or
retraining or Hospitationen to equip them with the necessary
skills for new responsibilities as long as such action is
reasonable for the employer and can be justified from a
commercial perspective.
----------
(1) This means of the same value or at least comparable value in terms of
function and position in the company.
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DRAFT
(3) Even in the event of an employee being assigned duties of less value
for operating reasons, the employee has a right pursuant to section 1
of this Works Agreement to retain his or existing rights and
conditions. If it is impossible to execute an upwards transition from
probationary positions or promote an employee on the basis of his or
her length of service due to a transfer resulting from a (partial)
privatization of BVAG and related restructuring of BVAG, the employees
concerned shall be treated as if they continued to perform their
current duties. The employees shall be preferred when tasks similar in
nature to their former activities are assigned. This does not apply if
the employee declines without good reason to participate in necessary
training and retraining measures agreed on with the workers' council.
(4) Employees may only be transferred with the prior approval of the
workers' council pursuant to the terms of sec. 99 BetVG (Labor
Management Relations Act). An intended transfer must be discussed
beforehand with the employee concerned by which the employee is
informed of the nature, location and requirements of the new position.
SECTION 6
TRAINING/ACCEPTANCE OF TRAINEES FOR EMPLOYMENT POSITIONS
(1) In the course of a possible restructuring program at SWBS, BVAG agrees
to accept at the request of SWBS, the training sector and those
employees engaged in training as well as the related trainees and
employees as defined by section 1 of this Works Agreement who were
trained or were training indirectly in or for the interests of BVAG at
this time. The employment or trainee contracts concerned shall be
continued by BVAG while retaining all rights and conditions to which
the trainers and trainees are entitled from their existing employment
or trainee contracts.
(2) To the extent that it does not impose an unreasonable economic burden,
the nature and number of traineeships that currently exist in or for
the indirect interests of BVAG shall be retained in the same scope as
present. In any event, a minimum of 50 such traineeships will be
maintained until December 31, 2010. A further 20 traineeships will be
maintained if this does not impose unreasonable economic burden on
BVAG.
(3) Where objectively and legally possible, trainees trained by BVAG shall
enter an employment contract with BVAG with a limited term of 12
months upon successfully completing their traineeship unless there are
good grounds for termination. The management board and the workers'
council shall endeavor to find an opportunity for further employment
agreeable to both parties no later than six months before expiry of
the limited employment contract.
(4) After successful completion of their training, trainees of BVAG shall
be preferred when vacant positions at BVAG are filled.
COURTESY TRANSLATION FOR INFORMATION PURPOSES ONLY
The German original is the only binding version for decision-making purposes
DRAFT
SECTION 7
AUTHORITY OF THE REPRESENTATIVES ON THE WORKERS' COUNCIL
The parties to this Works Agreement agree that the employers of BVAG shall be
permanently represented by a workers' council. Even in the event of any spin-off
or other restructuring measure at BVAG, the representatives in office on the
workers' council shall retain their office, their number, their release from
duty, and their responsibilities for a further 12 months - even with regard to
any transitional offices prolonged to 12 months - in the event that the workers'
council must be reelected after a possible spin-off or restructuring measure due
to legal requirements.
SECTION 8
INDUSTRIAL AGREEMENTS ARE BINDING
BVAG shall ensure that in the event of complete or partial privatization of
BVAG, the BAT/BMT-G industrial agreement or any succeeding agreement shall
continue to apply. At the very least, collective works agreements must be
concluded or industrial agreements applied to ensure that rights provided by
existing industrial agreements are protected and that the current level is
maintained at least materially.
SECTION 9
PROTECTION OF WORKING CONDITIONS
(1) The industrial agreements and works agreements applying to BVAG as
listed in Exhibit 2, which is an integral component of this Works
Agreement, shall not be affected by a change of shareholder or a
partial or complete sale of shares in the company and shall continue
to apply.
(2) The parties of this Works Agreement shall endeavor to find succeeding
agreements to any works agreement that are about to expire which
appropriately represent the interests of the employees and the
concerns of the company.
SECTION 10
ALTERTEILZEIT
In the event of a sale of a majority shareholding, the parties agree that the
current Altersteilzeit arrangements shall be retained on identical terms and
conditions as long as this can be commercially justified and is allowed by the
law.
SECTION 11
COMPANY PENSIONS
The company pension plan in favor of the employees as defined by section 1 of
this Works Agreement will be retained unchanged in its current scope and in
compliance with the respective law. To the extent that BVAG is no longer a
member of the Federal and State Welfare Agency (VBL) due to a (partial)
privatization, an agreement concerning the company pension scheme will be made
with identical content and which does not lead to any deterioration in benefits.
COURTESY TRANSLATION FOR INFORMATION PURPOSES ONLY
The German original is the only binding version for decision-making purposes
DRAFT
SECTION 12
RETROACTIVE EFFECT
This Agreement may not take effect retroactively. This also applies in the event
that this Works Agreement does not come into force or lapses.
SECTION 13
EFFECTIVE DATE
(1) This Works Agreement takes effect upon signature of an agreement for
the sale or assignment of shares between Stadtwerke Braunschweig GmbH
and an investor for the direct sale of shares in BVAG or upon
signature of an agreement for the sale or assignment of shares between
the City of Braunschweig and an investor for the sale of shares in
Stadtwerke Braunschweig GmbH as realization of a "tracking stock
model". This Works Agreement irrevocably lapses as soon as it is
conclusively determined that a direct or indirect (via SWBS, Tracking
Stock) (partial) privatization of BVAG will not eventuate because the
assignment of shares in BVAG, or shares in SWBS respectively, will not
be effective. This is the case if the deal is prohibited by the Fair
Trading Office (Kartellamt) or there is conclusive non-payment of the
agreed purchase price or a party has withdrawn from the contract.
(2) This Works Agreement can be terminated upon notice of three months but
not before December 31, 2010. The right to extraordinary termination
remains unaffected.
SECTION 14
FINAL PROVISIONS
(1) Should one provision of this Agreement prove to be or become invalid,
the validity of the remaining provisions shall remain unaffected. The
Parties to this Agreement agree to find a new legally valid provision
that meets the intended meaning and purpose of the original invalid
provision.
(2) Should any matters not be governed by this Agreement, the Parties to
this Agreement agree to begin negotiations without delay in order to
find an agreement corresponding to the principles of this Agreement.
BRAUNSCHWEIG, DATED
----------------------
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BRAUNSCHWEIGER VERSORGUNGS-AG WORKERS' COUNCIL OF BRAUNSCHWEIGER
VERSORGUNGS-AG
COURTESY TRANSLATION FOR INFORMATION PURPOSES ONLY
The German original is the only binding version for decision-making purposes
DRAFT
EXHIBIT 1
TO THE
WORKS AGREEMENT GUARANTEEING FUTURE EMPLOYMENT IN THE CONTEXT OF THE
(PARTIAL) PRIVATIZATION AND RESTRUCTURING OF BRAUNSCHWEIGER VERSORGUNGS-AG
The number of full-time employee years (FTEY) at BVAG including the FTEY
transferred to BVAG from SWBS and/or from ▇▇.▇▇ at the Braunschweig location:
------------------------------------------------------------------------------------------------------------
CALENDAR YEARS 2001 2002 2003 20004 2005 2006 2007 2008 2009 2010
------------------------------------------------------------------------------------------------------------
FTEY BVAG 340 325 317 313 308 307 307 307 307
------------------------------------------------------------------------------------------------------------
FTEY BVAG transferred 185 160 150 140 140 140 140 140 140 140
from SWBS
------------------------------------------------------------------------------------------------------------
FTEY BVAG returning from 210 210 210 210 210 210 210 210 210
▇▇.▇▇
------------------------------------------------------------------------------------------------------------
NUMBER OF FTEY AS DEFINED 730 695 677 663 658 657 657 657 657
BY SECTION 3(4) OF THE WORKS'
AGREEMENT INCLUDING THE
FTEY TRANSFERRED FROM
SWBS AND THE FTEY
RETURNING FROM ▇▇.▇▇
------------------------------------------------------------------------------------------------------------
The number of full-time employee years (FTEY) listed in the above table
corresponds to the number of full-time positions actively involved in operations
including employees involved in training (trainers).
The number of FTEY at BVAG as defined by section 3 (4) of the Work's Agreement,
including the number of FTEY transferred to BVAG from SWBS and the number of
FTEY returning from ▇▇.▇▇, is reduced by the number of employees (or the number
of FTEY accordingly) of SWBS and ▇▇.▇▇ who at their own discretion decide not to
transfer or return to BVAG.
EXHIBIT "NETTING AGREEMENT"
TO THE CONSORTIUM AGREEMENT (BIDDER M)
Partial Privatization of BVAG
May 14, 2002, page 1 of 4
DRAFT
EXHIBIT 10 "NETTING AGREEMENT"
TO THE CONSORTIUM AGREEMENT BETWEEN STADTWERKE BRAUNSCHWEIG GMBH AND
........... OF........... 2002
NETTING AGREEMENT
between
Stadtwerke Braunschweig GmbH,
jointly represented by the general managers
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ Hinckeldeyn
- hereinafter also referred to as "SWBS" -
and
Braunschweiger Versorgungs-AG;
represented by its Management Board,
▇▇. ▇▇▇▇ ▇▇▇▇▇,
- hereinafter also referred to as "BVAG" -
PREAMBLE
(1) SWBS, a wholly-owned subsidiary of the City of Braunschweig, having its
registered office in Braunschweig, entered in the Commercial Register of
the Local Court of Braunschweig under HRB 554, is the sole shareholder of
BVAG, also having its registered office in Braunschweig, entered in the
Commercial Register of the Local Court of Braunschweig under HRB 655. SWBS
intends to sell the majority of shares in BVAG to a strategic partner.
(2) BVAG discloses liabilities to SWBS resulting from bank loans raised by SWBS
and passed on to BVAG. On the other hand, BVAG has receivables from SWBS
and other group subsidiaries in connection with current account
relationships. In view of the contemplated sale of a majority of shares in
BVAG by SWBS and the related change to the group structure, BVAG and SWBS
have agreed to net the liabilities and receivables between BVAG and SWBS
and other subsidiaries of SWBS and to settle any remaining balance no later
than the end of 2002. This is to make BVAG's financing independent of the
group.
Now, therefore, the parties agree as follows:
SECTION 1
BVAG'S RECEIVABLES
(1) BVAG discloses an account receivable from SWBS of approx. DM 75,388,000
resulting from the current account relationship between the two companies
as of December 31, 2001. The parties agree that the balance of this account
receivable as of June 30, 2002 shall be established by mutual agreement
between the parties by a balance confirmation and shall be due in its
entirety.
(2) BVAG discloses an account receivable from Braunschweiger Verkehrs AG of
approx. DM 19,405,000 as of December 31, 2001. The parties agree that the
balance of this account receivable as of June 30, 2002 shall be established
by mutual agreement between BVAG und Braunschweiger Verkehrs AG by a
balance confirmation. BVAG hereby assigns to SWBS the receivable balance
from Braunschweiger Verkehrs AG as of June 30, 2002 that has yet to be
established. SWBS accepts the assignment.
(3) BVAG discloses in its financial statements as of December 31, 2001 an
account receivable from Braunschweiger Bus- und Bahnbetriebs GmbH of
approx. DM 101,000. The parties agree that the balance of this account
receivable as of June 30, 2002 shall be established by mutual agreement
between BVAG und Braunschweiger Bus- und Bahnbetriebs GmbH by a balance
confirmation. BVAG hereby assigns to SWBS the receivable balance from
Braunschweiger Bus- und Bahnbetriebs GmbH as of June 30, 2002 that has yet
to be established. SWBS accepts the assignment.
(4) The account receivable falls due in accordance with the above paragraph (1)
and the receivables are assigned pursuant to the above paragraphs (2) and
(3) for the purposes of netting these receivable balances with SWBS's
receivables from BVAG resulting from the loans passed on in accordance with
the above ss. 2. SWBS accepts the assigneD receivable balances in
accordance with the above paragraphs (2) and (3) in discharge of the
obligation.
SECTION 2
LOAN LIABILITIES
(1) BVAG discloses in its financial statements as of December 31, 2001 loan
liabilities to SWBS of approx. DM 108,868,000. These are loans raised from
banks by SWBS and passed on to BVAG at the same conditions. Principal
repayments of these loans are made by BVAG in accordance with the
conditions agreed externally by SWBS.
(2) The parties agree that the loans as of June 30, 2002 shall be established
by mutual agreement between the parties by a balance confirmation. They
further agree that the loan balance established shall fall due as of June
30, 2002.
(3) The loans are called in as of June 30, 2002 for the purposes of netting
with receivable balances in accordance with the above ss. 1.
SECTION 3
NETTING COVENANT
(1) The parties hereby agree with binding effect that the receivable balances
of BVAG from SWBS established as of June 30, 2002 in accordance with the
above ss. 1 (1) and thE receivable balances assigned to SWBS pursuant to
the above ss. 1 (2) and (3) shall bE netted with the loan liabilities of
BVAG to SWBS established in accordance with the above ss. 2 and that the
mutual receivables and liabilities shall be deemed settled tO the extent
that the nominal amounts established equal the balances.
(2) The consequences of the Netting Agreement take effect as of June 30, 2002.
Any balance remaining after netting shall be carried forward to new
account.
(3) Payment of any balance carried forward shall be deferred until December 31,
2002 at the latest. Interest of 6% p.a. shall be payable on the deferred
balance. The party owing the deferred balance shall be entitled to
premature repayment of all or part of the deferred amount at any time.
SECTION 4
FINAL PROVISIONS
(1) This Agreement shall take effect as soon as the share purchase and
assignment agreement between SWBS and ........... takes effect.
(2) Should one or several provisions or a significant part of this Agreement be
or become wholly or partially invalid or impracticable, the validity of the
remaining provisions shall remain unaffected hereby. The same shall apply
should the Agreement prove to contain a gap in its provisions. To replace
the invalid or impracticable provisions or to fill the gap in the
provisions the parties undertake to agree on an appropriate arrangement
that comes as close as possible to the economic objective of the present
Agreement.
(3) Amendments and additions to this Agreement must be made in writing to be
effective. This shall also apply to the amendment to the requirement of
written form. No oral side agreements have been made.
Braunschweig, dated
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Stadtwerke Braunschweig GmbH Braunschweiger Versorgungs AG
Management Management Board