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¨
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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¨
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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For the transition period from __________________ to __________________
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Large accelerated filer
£
|
Accelerated filer
£
|
Non-accelerated filer
þ
|
U.S. GAAP
£
|
International Financial Reporting Standards as issued
þ
|
Other
£
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by the International Accounting Standards Board
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Page | ||
5 | ||
6 | ||
Part I
|
||
8 | ||
8 | ||
8 | ||
Selected Financial Data
|
8 | |
Capitalization and Indebtedness
|
11 | |
Risk Factors
|
11 | |
24 | ||
History and Development of Ellomay
|
24 | |
Business Overview
|
30 | |
Organizational Structure
|
64 | |
Property, Plants and Equipment
|
64 | |
66 | ||
66 | ||
Operating Results
|
68 | |
Liquidity and Capital Resources
|
72 | |
Research and Development, Patents and Licenses, Etc.
|
74 | |
Trend Information
|
74 | |
Off-Balance Sheet Arrangements
|
75 | |
Contractual Obligations
|
75 | |
76 | ||
Directors and Senior Management
|
76 | |
Compensation
|
78 | |
Board Practices
|
81 | |
Employees
|
90 | |
Share Ownership
|
92 | |
97 | ||
Major Shareholders
|
97 | |
Related Party Transactions
|
101 | |
101 | ||
Consolidated Statements and Other Financial Information
|
101 | |
Significant Changes
|
103 |
104 | ||
Offer and Listing Details
|
104 | |
Markets
|
104 | |
105 | ||
Share Capital
|
105 | |
Memorandum of Association and Second Amended and Restated Articles
|
105 | |
Material Contracts
|
113 | |
Exchange Controls
|
117 | |
Taxation
|
117 | |
Dividends and Paying Agents
|
123 | |
Statement by Experts
|
123 | |
Documents on Display
|
123 | |
124 | ||
125 | ||
|
||
Part II
|
||
125 | ||
125 | ||
125 | ||
126 | ||
127 | ||
128 | ||
128 | ||
128 | ||
128 | ||
128 | ||
Part III
|
||
128 | ||
128 | ||
129 |
·
|
the profitability of the photovoltaic market which we have entered;
|
·
|
market, economical and political factors in Italy and generally in Europe, in Israel and worldwide;
|
·
|
our contractors’ technical, professional and financial ability to deliver on and comply with their contractual undertakings with us and our subsidiaries;
|
·
|
our ability to further familiarize ourselves and maintain expertise in the photovoltaic market and the energy market, and to track, monitor and manage the projects which we have undertaken;
|
·
|
our ability to identify, evaluate and consummate additional suitable business opportunities and strategic alternatives;
|
·
|
the price and market liquidity of our ordinary shares;
|
·
|
the fact that we may be deemed to be an “investment company” under the Investment Company Act of 1940 under certain circumstances (including as a result of the investments of assets following the sale of our business), and/or the risk that
we may be required to take certain actions with respect to the investment of our assets or the distribution of cash to shareholders in order to avoid being deemed an “investment company”;
|
·
|
our plans with respect to the management of our financial and other assets; and
|
·
|
the possibility of future litigation.
|
A.
|
Selected Financial Data
|
Year ended December 31,
|
||||||||
2009
|
2010
|
|||||||
General and administrative expenses
|
$ | 1,931 | $ | 3,211 | ||||
Operating loss
|
(1,931 | ) | (3,211 | ) | ||||
Financial income, net
|
1,357 | 1,400 | ||||||
Company’s share of losses of associate accounted for at equity
|
- | (66 | ) | |||||
Loss before taxes on income
|
(574 | ) | (1,877 | ) | ||||
Tax benefit (taxes on income)
|
(69 | ) | 44 | |||||
Loss from continuing operations
|
(643 | ) | (1,833 | ) | ||||
Income (loss) from discontinued operations, net
|
(376 | ) | 7,035 | |||||
Net income (loss)
|
(1,019 | ) | 5,202 | |||||
Other comprehensive income:
|
||||||||
Foreign currency translation adjustments
|
- | 194 | ||||||
Total other comprehensive income
|
- | 194 | ||||||
Total comprehensive income (loss)
|
$ | (1,019 | ) | $ | 5,396 | |||
Basic net earnings (loss) per share:
|
||||||||
Loss from continuing operations
|
$ | (0.01 | ) | $ | (0.02 | ) | ||
Earnings (loss) from discontinued operations
|
*) - | 0.09 | ||||||
Net earnings (loss)
|
$ | (0.01 | ) | $ | 0.07 | |||
Diluted net earnings (loss) per share:
|
||||||||
Loss from continuing operations
|
$ | (0.01 | ) | $ | (0.02 | ) | ||
Earnings (loss) from discontinued operations
|
*) - | 0.08 | ||||||
Net earnings (loss)
|
$ | (0.01 | ) | $ | 0.06 |
Weighted average number of shares used for computing basic earnings (loss) per share
|
73,786,428 | 79,115,508 | ||||||
Weighted average number of shares used for computing diluted earnings (loss) per share
|
73,786,428 | 89,042,496 |
At January 1,
|
At December 31,
|
|||||||||||
2009
|
2009
|
2010
|
||||||||||
Working capital
|
$ | 76,172 | $ | 75,172 | $ | 72,300 | ||||||
Total assets
|
$ | 78,232 | $ | 76,432 | $ | 106,074 | ||||||
Total liabilities
|
$ | 7,303 | $ | 6,404 | $ | 17,508 | ||||||
Total shareholders’ Equity
|
$ | 70,929 | $ | 70,028 | $ | 88,566 | ||||||
Capital stock
|
$ | 89,109 | $ | 89,227 | $ | 102,369 | ||||||
Ordinary shares outstanding
|
7 3 , 786 , 428 | 7 3 , 786 , 428 | 107, 500 , 714 |
Year ended December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Revenues:
|
||||||||||||
Products
|
$ | 72,576 | $ | 80,228 | $ |
$10,568
|
||||||
Services
|
5,392 | 5,379 | 842 | |||||||||
Total revenues
|
77,968 | 85,607 | 11,410 | |||||||||
Cost of revenues:
|
||||||||||||
Products
|
43,060 | 46,549 | 7,927 | |||||||||
Inventory write-off
|
806 | 1,169 | 197 | |||||||||
43,866 | 47,718 | 8,124 | ||||||||||
Services
|
7,379 | 8,759 | 2,862 | |||||||||
Total cost of revenues
|
51,245 | 56,477 | 10,986 | |||||||||
Gross profit
|
26,723 | 29,130 | 424 | |||||||||
Operating expenses:
|
||||||||||||
Research and development, net
|
5,827 | 7,046 | 1,942 | |||||||||
Selling and marketing
|
11,747 | 13,815 | 3,075 | |||||||||
General and administrative
|
9,803 | 11,129 | 9,830 | |||||||||
Doubtful accounts expenses (income)
|
(314 | ) | 942 | 368 | ||||||||
Amortization of other intangible assets
|
167 | 42 | - | |||||||||
Total operating expenses
|
27,230 | 32,974 | 15,215 | |||||||||
Operating loss
|
(507 | ) | (3,844 | ) | (14,791 | ) | ||||||
Gain on sale of Company’s business, net
|
- | - | 95,137 | |||||||||
Financial income (expenses), net
|
(1,316 | ) | (1,738 | ) | 7,596 | |||||||
Income (loss) before taxes on income
|
(1,823 | ) | (5,582 | ) | 87,942 | |||||||
Taxes on income
|
98 | 838 | 966 | |||||||||
Net Income (loss)
|
$ | (1,921 | ) | $ | (6,420 | ) | $ | 86,976 | ||||
Basic earnings (loss) per share
|
$ | (0.03 | ) | $ | (0.09 | ) | $ | 1.19 | ||||
Diluted earnings (loss) per share
|
$ | (0.03 | ) | $ | (0.09 | ) | $ | 1.01 | ||||
Weighted average number of shares used for computing basic earnings (loss) per share
|
60,506,854 | 71,537,501 | 72,972,565 | |||||||||
Weighted average number of shares used for computing diluted earnings (loss) per share
|
60,506,854 | 71,537,501 | 86,102,748 |
At December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Working capital (deficiency)
|
$ | 546 | $ | (4,782 | ) | $ | 76,119 | |||||
Total assets
|
$ | 41,203 | $ | 52,327 | $ | 78,278 | ||||||
Total liabilities
|
$ | 62,206 | $ | 74,506 | $ | 7,349 | ||||||
Total shareholders’ Equity (deficiency)
|
$ | (21,003 | ) | $ | (22,179 | ) | $ | 70,929 | ||||
Capital stock
|
$ | 75,591 | $ | 82,850 | $ | 89,109 | ||||||
Ordinary shares outstanding
|
60,523,886 | 72,710,505 | 7 3 , 786 , 428 |
PV Project Title
|
Expected Output
|
Location
|
Expected/Actual Connection to Grid and Expected/Actual Applicable FiT
|
PV Principal
|
||||
“Del Bianco”
|
734.40 kWp
|
Province of Macerata,
Municipality of Cingoli,
Marche region
|
June 2011
2010 FiT
(expected)
|
Ellomay PV One S.r.l. (“Ellomay PV One”)
|
||||
“Costantini” (together with Del Bianco, the “
Macerata PV Projects
”)
|
734.40 kWp
|
Province of Ancona,
Municipality of Senigallia,
Marche region
|
June 2011
2010 FiT
(expected)
|
Ellomay PV One
|
||||
“Giaché”
|
730.01 kWp
|
Province of Ancona,
Municipality of Filotrano,
Marche region
|
June 2011
2010 FiT
(expected)
|
Ellomay PV Two S.r.l. (“Ellomay PV Two”)
|
||||
“Massaccesi” (together with Giaché, the “
Ancona PV Projects
”)
|
749.7 kWp
|
Province of Ancona,
Municipality of Arcevia,
Marche region
|
June 2011
2010 FiT
(expected)
|
Ellomay PV Two
|
||||
“Troia 8”
|
995.67 kWp
|
Province of Foggia,
Municipality of Troia,
Puglia region
|
January 14, 2011
2010 FiT
|
Ellomay PV Six S.r.l.
|
||||
“Troia 9” (together with Troia 8, the “
Foggia PV Projects
”)
|
995.67 kWp
|
Province of Foggia,
Municipality of Troia,
Puglia region
|
January 14, 2011
2010 FiT
|
Ellomay PV Five S.r.l.
|
|
·
|
an EPC Contract, which governs the installation, testing and commissioning of a photovoltaic plant by the respective Contractor;
|
|
·
|
an O&M Agreement, which governs the operation and maintenance of the photovoltaic plant by the respective Contractor;
|
|
·
|
when applicable, a side agreement between our relevant Italian subsidiary and the Contractor, whereby the panels required for the construction of the photovoltaic plant will be purchased by such Italian subsidiary directly from a third party supplier of such panels, and then transferred to the Contractor;
|
|
·
|
a number of ancillary agreements, including:
|
|
m
|
one or more “surface rights agreements” with the land owners, which provide the terms and conditions for the lease of land on which the photovoltaic plants are constructed and operated;
|
|
m
|
standard “incentive agreements” with Gestore dei Servizi Elettrici (“GSE”), Italy’s energy regulation agency responsible,
inter alia
, for incentivizing and developing renewable energy sources in Italy and purchasing energy and re-selling it on the electricity market. Under such agreement, it is anticipated that GSE will grant the applicable FiT governing the purchase of electricity (FiTs are further detailed in “Item 4.B: Government Regulations - Regulatory Framework of Italian PV Projects”);
|
|
m
|
one or more “power purchase agreements” with GSE, specifying the power output to be purchased by GSE for resale and the consideration in respect thereof (in the event of sale via the “Dedicated Withdrawal System” as more fully described under “Item 4.B: Government Regulations - Regulatory Framework of Italian PV Projects”); and
|
|
m
|
one or more “interconnection agreements” with the Enel Distribuzione S.p.A (“ENEL”), the Italian national electricity grid operator, which provide the terms and conditions for the connection to the Italian national grid.
|
|
·
|
optionally, one or more “project financing agreements” with financing entities, as were already executed with respect to several of the PV Projects and as more fully described below, and as may be executed in the future with respect to the remaining PV Projects;
|
·
|
a stock purchase agreement in the event we acquire an existing company that owns a photovoltaic plant that is under construction or is already constructed.
|
|
m
|
Payment Milestone 1:
(i) completion of procedures and formalities as to the obtaining of the building permits and other applicable permits (except for the FiT); (ii) transfer of the land rights to the PV Principal; (iii) time to connection to the grid is estimated by the Contractor to be within 120 days, and (iv) delivery of a guarantee covering the Contractor’s obligations under the EPC Contract, issued by the Contractor’s parent company, under which such parent company agrees to indemnify the PV Principal against losses and damages incurred up to an amount equal to the Consideration (which guarantee must be effective until the issuance of a “Final Acceptance Certificate” described below).
|
|
m
|
Payment Milestone 2:
(i) satisfactory outcome of the technical inspection of the PV Plant and issuance of the “Technical Acceptance Certificate” described below, (ii) all the conditions precedent to Payment Milestone 1 are still met, and (iii) execution of the O&M Agreement.
|
|
m
|
Payment Milestone 3:
(i) satisfactory outcome of the inspection of the PV Plant’s operations, and issuance of the “Provisional Acceptance Certificate”, (ii) all conditions precedent to Payment Milestones 1 and 2 are still met, and (iii) delivery by the Contractor of a warranty bond issued by an insurance company with S&P A-rating (such bond to be released upon issuance of the Final Acceptance Certificate, provided that the Contractor procures the insurance bond required under the O&M Agreement).
|
|
m
|
Payment Milestone 1:
(i) completion of procedures and formalities as to the obtaining of the building permits and other applicable permits (expect for the FiT), (ii) procurement of land rights in favor of the PV Principal, (iii) completion of purchase order of panels in an amount at least equal to the nominal power of the Plant, (iv) connection to the grid is estimated by the Contractor to be within 150 days and (v) delivery of a guarantee covering the Contractor’s obligations under the EPC Contract, issued by the Contractor’s parent company, under which such parent company agrees to indemnify the PV Principal against losses and damages incurred up to an amount equal to the Consideration (which guarantee must be effective until the issuance of a “Final Acceptance Certificate” described below).
|
|
m
|
Payment Milestone 2:
(i) satisfactory outcome of the technical inspection of the PV Plant and issuance of the “Technical Acceptance Certificate” described below, (ii) all the conditions precedent to Payment Milestone 1 are still met, and (iii) execution of the O&M Agreement.
|
|
m
|
Payment Milestone 3:
(i) satisfactory outcome of the inspection of the PV Plant’s operations, and issuance of the “Provisional Acceptance Certificate”, (ii) all conditions precedent to Payment Milestones 1 and 2 are still met, and (iii) delivery by the Contractor of a warranty bond issued by an insurance company with S&P A-rating (such bond to be released upon issuance of the Final Acceptance Certificate, provided that the Contractor procures the insurance bond required under the O&M Agreement).
|
|
m
|
Payment Milestone 1:
(i) completion of procedures and formalities as to the obtaining of the building permits and other applicable permits (except for the FiT), (ii) transfer of the permits to the PV Principal, (iii) submission by the Contractor of all the relevant technical documentation, (iv) setting up procurement of land rights in favor of the PV Principal, (v) connection to the grid is estimated by the Contractor to take place within January 16, 2011 and the completion of electrical and mechanical works is reasonably estimated by the Contractor to take place within December 31, 2010, (vi) completion of purchase order of panels in an amount at least equal to the nominal power of the PV Plant, and (vii) delivery of a guarantee covering the Contractor’s obligations under the EPC Contract, issued by the shareholders of the Contractor, under which they agree to indemnify the PV Principal against losses and damages incurred up to an amount equal to the Consideration (which guarantee must be effective until the issuance of a “Final Acceptance Certificate” described below).
|
|
m
|
Payment Milestone 2
: (i) all the conditions precedent to Payment Milestone 1 are still met and (ii) an autonomous and first demand bank guarantee, to be issued by a primary and leading bank in favour of the PV Principal ,as guarantee for the obligations undertaken by the Contractor under the EPC Contract is delivered to the PV Principal (which guarantee must be effective until the issuance of a “Preliminary Acceptance Certificate” and the provision of the “Warranty Bond,” both described below).
|
|
m
|
Payment Milestone 3
: (i) all the conditions precedent to Payment Milestones 1 and 2 are still met, and (ii) the PV Plant commences operations.
|
|
m
|
Payment Milestone 4
: (i) satisfactory outcome of the inspection of the PV Plant’s operations, and issuance of the “Provisional Acceptance Certificate”, and (ii) delivery by the Contractor of a warranty bond issued by a primary and leading bank (such bond to become effective on payment of Payment Milestone 4 and released upon issuance of the Final Acceptance Certificate, provided that the Contractor procures all guarantees required under the O&M Agreement).
|
|
m
|
Delay Liquidated Damages
– in the event the Contractor fails to comply with its estimation as to time to connection to the grid following the respective Payment Milestone 1 as set forth above or with the completion date in the event one is set forth in the EPC Contract, the PV Principal will be entitled to apply delay liquidated damages up to an agreed maximum amount. The delay liquidated damages applied in connection with the Macerata PV Projects and Ancona PV Projects amount, as of March 31, 2011, to an aggregate of approximately Euro 450,000 and have reached the agreed upon cap with respect to the Macerata PV Projects. The Foggia PV Projects were connected in accordance with the schedule and therefore no delay liquidated damages were incurred.
|
|
m
|
Discounts
– in the event the 2010 FiT (as more fully set forth under “Government Regulations - Regulatory Framework of Italian PV Projects” below) is not awarded to a PV Plant, the Contractor will grant the PV Principal a discount due to the expected loss of profit. As noted above the Macerata PV Projects and the Ancona PV Projects are expected to be connected under 2010 FiT and the Foggia PV Projects have already been connected with 2010 FiT. The discounts applicable to the Macerata and Ancona PV Projects are determined based on pre-determined payment per every cent reduction in the tariff that will not necessarily cover the economic loss due to the change in tariff.
|
|
m
|
Penalties
– in the event the effective performance ratio disclosed by one of the tests performed following the construction of the PV Plant is less than the applicable minimum guaranteed performance ratio (“MGPR”), the Contractor shall pay to the PV Principal performance liquidated damages in the range of Euro 5.6 – Euro 9.3 per kWp per each percentage point which is lower than the MGPR, up to a certain maximum percentage of the relevant Consideration and, in connection with the Foggia PV Projects, higher penalties in the event the second reassessment test shows a lower MGPR. These penalties will not necessarily cover the entire economic results of lower MGPR results and, as noted below, the O&M Agreements also include a bonus-malus feature covering deviations from certain benchmarks.
|
|
m
|
The PV Principal may terminate the agreement at any time, by giving a 6-month - 12-month prior written notice to the Contractor. In the case of such withdrawal, the PV Principal may pay to the Contractor,
in lieu
of the notice, the amount the Contractor would have been entitled to receive during the applicable notice period.
|
|
m
|
Under the O&M Agreements in connection with the Macerata PV Projects and Ancona PV Projects, the Contractor can withdraw from the O&M Agreement at the tenth anniversary thereof by sending a 12-month prior written notice to the PV Principal.
|
|
(i)
|
a Senior Loan, to be applied to the costs of construction of the PV Plants (up to 80% of the relevant amount), in the amount of Euro 4.1 million, accruing interest at the EURIBOR rate, increased by a margin of 200 basis points per annum, repaid semi annually; and
|
|
(ii)
|
a VAT Line, for payment of VAT due on the costs of construction in the amount of Euro 0.55 million, accruing interest at the EURIBOR rate, increased by 160 basis points per annum, repaid in one payment until December 31, 2013.
|
|
Photovoltaic Industry Background
|
|
·
|
Economic - An increase in solar power generation will reduce dependence on fossil
fuels. Worldwide demand for electricity is expected to nearly double by 2025, according to the U.S. Department of Energy. Additionally, according to International Energy Agency, over 60% of the world’s electricity is generated from fossil fuels such as coal, natural gas and oil. The combination of declining finite fossil fuel energy resources and increasing energy demand is depleting natural resources as well as driving up electricity costs, underscoring the need for reliable renewable energy production. Solar power systems are renewable energy sources that rely on the sun as an energy source and do not require a fossil fuel supply. As such, they are well positioned to offer a sustainable long-term alternative means of power generation. Once a solar power system is installed, the cost of generating electricity is relatively stable over the lifespan of the system. There are no risks that fuel prices will escalate or fuel shortages will develop, although cash paybacks for systems range depending on the level of incentives, electric rates, annualized sun intensity, installation costs and derogation in the efficiency of the panels.
|
|
·
|
Convenience - Solar power systems can be installed on a wide range of sites, including small residential roofs, the ground, covered parking structures and large industrial buildings. Most solar power systems also have few, if any, moving parts and are generally guaranteed to operate for 20-25 years, resulting in low maintenance and operating costs and reliability compared to other forms of power generation.
|
|
·
|
Environmental - Solar power is one of the cleanest electric generation sources, capable of generating electricity without air or water emissions, noise, vibration, habitat impact or waste generation. In particular, solar power does not generate greenhouse gases that contribute to global climate change or other air pollutants, as power generation based on fossil fuel combustion does, and does not generate radioactive or other wastes as nuclear power and coal combustion do. It is anticipated that greenhouse gas regulation will increase the costs and constrain the development of fossil fuel based electric generation and increase the attractiveness of solar power as a renewable electricity source.
|
|
·
|
Security - Producing solar power improves energy security both on an international level (by reducing fossil energy purchases from hostile countries) and a local level (by reducing power strains on local electrical transmission and distribution systems).
|
|
·
|
by way of sale on the electricity market (Italian Power Exchange IPEX), the so called “Borsa Elettrica”;
|
|
·
|
through bilateral contracts with wholesale dealers;
|
|
·
|
via the so-called “Dedicated Withdrawal Plant” introduced by AEEG Resolution no. 280/07 and subsequent amendments. This is the most common way of selling electricity, as it affords direct and quick negotiations with the national energy handler (GSE), which will in turn deal with energy buyers on the market. We envisage selling electricity though this method.
|
·
|
the area to be enslaved (
asservimento
) is at least twice the size of the radiant surface; and
|
·
|
the portion of the plot of land which is not occupied by the photovoltaic plant is used exclusively for agricultural activities.
|
Nominal Power kWp
|
Non-Integrated
|
Partially Integrated
|
Arch. Integrated
|
1 kW ≤ P ≤ 3 kW
|
0.40 Euro/kWh
|
0.44 Euro/kWh
|
0.49 Euro/kWh
|
3 kW < P ≤ 20 kW
|
0.38 Euro/kWh
|
0.42 Euro/kWh
|
0.46 Euro/kWh
|
P > 20 kW
|
0.36 Euro/kWh
1
|
0.40 Euro/kWh
|
0.44 Euro/kWh
|
a)
|
the power capacity of the plant is not higher than 1 MW and - in the case of lands owned by the same owner - the PV plants are installed at a distance of at least 2 km; and
|
b)
|
the installation of the PV plants does not cover more than 10% of the surface of agricultural land which is available to the applicant.
|
PV Project Title
|
Size of Property
|
Location
|
Owners of the PV Plants/Lands
|
|||
“Del Bianco”
|
2.44.96 hectares
|
Province of Macerata,
Municipality of Cingoli,
Marche region
|
PV Plant owned by Ellomay PV One S.r.l.
(1)
/ Building right granted to Ellomay PV One S.r.l. from owners
|
|||
“Costantini”
|
2.25.76 hectares
|
Province of Ancona,
Municipality of Senigallia,
Marche region
|
PV Plant owned by Ellomay PV One S.r.l.
(1)
/ Building right granted to Ellomay PV One S.r.l. from owners
|
|||
“Giaché”
|
3.87.00 hectares
|
Province of Ancona,
Municipality of Filotrano,
Marche region
|
PV Plant owned by Ellomay PV Two S.r.l.
(1)
/ Building right granted to Ellomay PV Two S.r.l. from owners
|
|||
“Massaccesi”
|
3,60,60 hectares
|
Province of Ancona,
Municipality of Arcevia,
Marche region
|
PV Plant owned by Ellomay PV Two S.r.l.
(1)
/ Building right granted to Ellomay PV Two S.r.l. from owners
|
|||
“Troia 8”
|
2.42.15 hectares
|
Province of Foggia,
Municipality of Troia,
Puglia region
|
PV Plant owned by Leasint and leased to Ellomay Six S.r.l. / Building right granted to Ellomay PV Six S.r.l. from owners
|
|||
“Troia 9”
|
2.39.23 hectares
|
Province of Foggia,
Municipality of Troia,
Puglia region
|
PV Plant owned by Leasint and leased to Ellomay Five S.r.l. / Building right granted to Ellomay PV Five S.r.l. from owners
|
|||
“Galatina”
|
4.00.00 hectares
|
Province of Lecce,
Municipality of Galatina,
Puglia region
|
PV Plant and Land owned by Energy Resources Galatina S.r.l.
(1)
|
|||
“Corato”
|
13.59.52 hectares
|
Province of Bari,
Municipality of Corato,
Puglia region
|
Building Right granted to Pedale S.r.l. that will own the PV Plant once constructed
(1)
/ Land held by owners and leased to Pedale S.r.l.
|
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
Revaluation(Devaluation) of the NIS against the U.S. dollar
|
1.1 | % | 0.7 | % | (0.6 | )% | ||||||
Revaluation (Devaluation) of the
Euro against the U.S. dollar
|
(5.3 | )% | 3.5 | % | (7.4 | )% |
|
a)
|
Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet.
|
|
b)
|
Income and expenses for each period presented in the statement of comprehensive income (loss) are translated at average exchange rates for the presented periods; however, if exchange rates fluctuate significantly, income and expenses are translated at the exchange rates at the date of the transactions.
|
|
c)
|
Share capital, capital reserves and other changes in capital are translated at the exchange rate prevailing at the date of issuance.
|
|
d)
|
Retained earnings are translated based on the opening balance translated at the exchange rate at that date and other relevant transactions during the period are translated as described in b) and c) above.
|
|
e)
|
All resulting translation differences are recognized as a separate component of other comprehensive income (loss) in equity “adjustments arising from translating financial statement of foreign operations.”
|
Payments due by period
(in thousands of U.S. dollars)
|
||||||||||||||||||||
Contractual Obligations*
|
Total
|
Less than 1 year
|
1 – 3 years
|
3 – 5 years
|
more than
5 years
|
|||||||||||||||
Finance lease obligations
|
$ | 5,228 | - | $ | 467 | $ | 533 | $ | 4,228 | |||||||||||
Long-term rent obligations (1)
|
1,646 | $ | 68 | 243 | 153 | 1,182 | ||||||||||||||
Provision for tax uncertainties (2)
|
4,600 | - | - | - | 4,600 | |||||||||||||||
Other long-term liabilities (3)
|
14 | - | - | - | 14 | |||||||||||||||
Investment in MVNO (4)
|
236 | 236 | - | - | - | |||||||||||||||
Total
|
$ | 11,724 | $ | 304 | $ | 710 | $ | 686 | $ | 10,024 |
*
|
For contractual obligations related to our investment in the Italian photovoltaic market, please refer to Item 4.
|
(1)
|
Includes land lease agreements of our Italian subsidiaries, lease agreement of our subsidiary NUR America, which was not assumed by HP in connection with the HP transaction. The premises are being sub leased. Rent until April 15, 2013 of our Tel Aviv Office is also included.
|
(2)
|
See Note 14b to our consolidated financial statements included elsewhere in this report.
|
(3)
|
Consists of accrued severance pay relating to obligations to our Israeli employees as required under Israeli labor law. These obligations, among others, are payable, upon termination, retirement or death of the respective employee.
|
(4)
|
Related to our commitment to invest $236,000 in the MVNO project.
|
Name
|
Age
|
Position with Ellomay
|
||
Shlomo Nehama(1)(2)
|
55
|
Chairman of the Board of Directors
|
||
Ran Fridrich(1)(2)
|
58
|
Director and Chief Executive Officer
|
||
Hemi Raphael(2)
|
59
|
Director
|
||
Anita Leviant(2)
|
56
|
Director
|
||
Oded Akselrod(3)
|
64
|
Director
|
||
Alon Lumbroso(3)(4)
|
54
|
Director
|
||
Barry Ben Zeev(1)(3)(4)
|
59
|
Director
|
||
Kalia Weintraub
|
32
|
Chief Financial Officer
|
||
Eran Zupnik
|
42
|
EVP of Business Development
|
______________________
|
(1)
|
Member of Ellomay’s Stock Option and Compensation Committee.
|
(2)
|
Elected pursuant to the Shareholders Agreement, dated as of March 24, 2008, between S. Nechama Investments (2008) Ltd. and Kanir Joint Investments (2005) Limited Partnership (See “Item 7.A. Major Shareholders”).
|
(3)
|
Member of Ellomay’s Audit Committee.
|
(4)
|
External Director.
|
|
·
|
monetary liabilities imposed on, or incurred by, the director or officer for the benefit of another person pursuant to a judgment, including a judgment given in settlement or a court approved arbitrator’s award;
|
|
·
|
reasonable litigation expenses including legal fees, incurred by a director or officer in consequence of an investigation or proceeding filed or conducted against a director or officer by an authority that is authorized to file or conduct such investigation or proceeding, and that has ended without filing an indictment against, or imposing of a financial obligation in lieu of a criminal proceeding on, such director or officer, or that ended without filing an indictment against such director or officer but with imposing a financial obligation on such director or officer in lieu of a criminal proceeding in respect of an offense that does not require the proof of criminal thought;
|
|
·
|
reasonable litigation expenses, including legal fees, incurred by a director or officer or which a director or officer is ordered to pay by a court, in proceedings filed against such director or officer by Ellomay or on its behalf or by another person, or in a criminal charge of which he or she is acquitted, or in a criminal charge of which such director or officer is convicted of an offence that does not require proof of criminal thought; and
|
|
·
|
any other liability and/or litigation expense (including legal fees), which, according to the applicable law and Ellomay’s Amended and Restated Articles of Association, each as shall be in effect from time to time, Ellomay could indemnify a director or officer.
|
Name of Beneficial Owner
|
Number of Shares
Beneficially Held (1)
|
Percent of Class
|
||||||
Shlomo Nehama(2)
|
40,168,422 | 37.3 | % | |||||
Ran Fridrich(3)
|
- | - | ||||||
Hemi Raphael (3)
|
- | - | ||||||
Anita Leviant(4)
|
* | * | ||||||
Alon Lumbroso(4)
|
* | * | ||||||
Oded Akselrod(4)
|
* | * | ||||||
Barry Ben Zeev(4)
|
* | * | ||||||
Eran Zupnik(4)
|
1,100,844 | 1 | % | |||||
Kalia Weintraub
|
- | - |
______________________________
|
(1)
|
As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. For purposes of this table, a person is deemed to be the beneficial owner of securities that can be acquired within 60 days from March 31, 2011 through the exercise of any option or warrant. Ordinary shares subject to options or warrants that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the ownership percentage of the person holding such options or warrants, but are not deemed outstanding for computing the ownership percentage of any other person. The amounts and percentages are based upon 107,778,493 ordinary shares outstanding as of March 31, 2011.
|
(2)
|
According to information provided by the holders, the 40,168,422 ordinary shares beneficially owned by Mr. Nehama consist of: (i) 35,518,695 ordinary shares held by S. Nechama Investments (2008) Ltd., an Israeli company (“Nechama Investments”), which constitute approximately 33% of the outstanding ordinary shares, and (ii) 4,649,727 ordinary shares held directly by Mr. Nehama, which constitute approximately 4.3% of the outstanding ordinary shares. Mr. Nehama, as the sole officer, director and shareholder of Nechama Investments, may be deemed to indirectly beneficially own any ordinary shares beneficially owned by Nechama Investments, which constitute (together with his shares) approximately 37.3% of the outstanding ordinary shares. By virtue of the 2008 Shareholders Agreement between Nechama Investments and Kanir (see “Item 7.A. Major Shareholders”), Mr. Nehama, Nechama Investments, Kanir and Messrs. Raphael and Fridrich may be deemed to be members of a group that holds shared voting power with respect to 71,449,675 ordinary shares, which together constitute approximately 66.3% of the outstanding ordinary shares, and holds shared dispositive power with respect to 53,997,025 ordinary shares, which constitute 50.1% of the outstanding ordinary shares. Accordingly, Mr. Nehama may be deemed to beneficially own (when including the ordinary shares directly held by him and not subject to the 2008 Shareholders Agreement) 76,099,402 ordinary shares, which constitute approximately 70.6% of the outstanding ordinary shares. Mr. Nehama and Nechama Investments both disclaim beneficial ownership of the ordinary shares beneficially owned by Kanir.
|
(3)
|
By virtue of their positions as sole shareholders and directors of Kanir Investments Ltd. (“Kanir Ltd.”), the general partner in Kanir Joint Investments (2005) Limited Partnership (“Kanir”), and limited partners in Kanir, Hemi Raphael and Ran Fridrich may be deemed to indirectly beneficially own the ordinary shares beneficially owned by Kanir. Messrs. Raphael and Fridrich disclaim beneficial ownership of such shares. Kanir owns 35,930,980 ordinary shares, which constitute approximately 33.3% of the outstanding ordinary shares. Please see footnote (2) with respect to the 2008 Shareholders Agreement. Kanir Ltd., Kanir and Messrs. Raphael and Fridrich all disclaim beneficial ownership of the shares held by Nechama Investments.
|
(4)
|
Most directors and some officers also have outstanding options, many of which are currently exercisable. The directors and senior management of Ellomay hold, in the aggregate, options exercisable into 1,487,356 ordinary shares, 1,266,705 of which are currently exercisable or will become exercisable within 60 days from March 31, 2011.
|
Ordinary Shares
Beneficially Owned
(1)
|
Percentage of Ordinary Shares Beneficially Owned
|
|||||||
Shlomo Nehama (2)(4)
|
40,168,422 | 37.3 | % | |||||
Kanir Joint Investments (2005) Limited Partnership (“Kanir”) (3)(4)(5)
|
35,930,980 | 33.3 | % | |||||
Zohar Zisapel (6)
|
5,650,038 | 5.2 | % |
___________________________
|
(1)
|
As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security as determined pursuant to Rule 13d-3 promulgated under the U.S. Securities Exchange Act of 1934, as amended. For purposes of this table, a person is deemed to be the beneficial owner of securities that can be acquired within 60 days from March 31, 2011 through the exercise of any option or warrant. Ordinary shares subject to options or warrants that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the ownership percentage of the person holding such options or warrants, but are not deemed outstanding for computing the ownership percentage of any other person. The amounts and percentages are based on a total of 107,778,493 ordinary shares outstanding as of March 31, 2011.
|
(2)
|
According to information provided by the holders, the 40,168,422 ordinary shares beneficially owned by Mr. Nehama consist of: (i) 35,518,695 ordinary shares held by S. Nechama Investments (2008) Ltd., an Israeli company (“Nechama Investments”), which constitute approximately 33% of the outstanding ordinary shares and (ii) 4,649,727 ordinary shares and held directly by Mr. Nehama, which constitute approximately 4.3% of the outstanding ordinary shares. Mr. Nehama, as the sole officer, director and shareholder of Nechama Investments, may be deemed to indirectly beneficially own any ordinary shares owned by Nechama Investments, which constitute (together with his shares) approximately 37.3% of the outstanding ordinary shares.
|
(3)
|
According to information provided by the holder, Kanir is an Israeli limited partnership. Kanir Investments Ltd. (“
Kanir Ltd.
”), in its capacity as the general partner of Kanir, has the voting and dispositive power over the ordinary shares directly beneficially owned by Kanir. As a result, Kanir Ltd. may be deemed to indirectly beneficially own the ordinary shares beneficially owned by Kanir. Messrs. Hemi Raphael and Ran Fridrich, who are members of our Board of Directors and director nominees, are the sole shareholders and directors of Kanir Ltd. As a result, they may be deemed to indirectly beneficially own the ordinary shares beneficially owned by Kanir. Kanir Ltd. and Messrs. Raphael and Fridrich disclaim beneficial ownership of such ordinary shares.
|
(4)
|
By virtue of the 2008 Shareholders Agreement, Mr. Nehama, Nechama Investments, Kanir, Kanir Ltd., and Messrs. Raphael and Fridrich may be deemed to be members of a group that holds shared voting power with respect to 71,449,675 ordinary shares, which constitute approximately 66.3% of the outstanding ordinary shares, and holds shared dispositive power with respect to 53,997,025 ordinary shares, which constitute 50.1% of the outstanding ordinary shares. Accordingly, taking into account the shares directly held by Mr. Nehama, he may be deemed to beneficially own approximately 70.6% of the outstanding ordinary shares. Each of Mr. Nehama and Nechama Investments disclaims beneficial ownership of the ordinary shares beneficially owned by Kanir. Each of Kanir, Kanir Ltd. and Messrs. Raphael and Fridrich disclaims beneficial ownership of the ordinary shares beneficially owned by Nechama Investments. A copy of the 2008 Shareholders Agreement was filed with the SEC on March 31, 2008 as Exhibit 14 to an amendment to a Schedule 13D.
|
(5)
|
Bonstar, an Israeli company, currently holds 846,905 ordinary shares, which constitute approximately 0.8% of the outstanding ordinary shares. Bonstar is a limited partner of Kanir and assisted Kanir in the financing of the purchase of some of its ordinary shares. Accordingly, Bonstar may be deemed to be a member of a group with Kanir and its affiliates, although there are no agreements between Bonstar and either of such persons and entities with respect to the ordinary shares beneficially owned by each of them. Mr. Joseph Mor and Mr. Ishay Mor are the sole shareholders of Bonstar and Mr. Joseph Mor serves as the sole director of Bonstar. Messrs. Joseph Mor and Ishay Mor also hold, through a company jointly held by them, 1,750,000 ordinary shares, which constitute approximately 1.6% of the outstanding ordinary shares. By virtue of their control over Bonstar and the other company, Messrs. Joseph Mor and Ishay Mor may be deemed to indirectly beneficially own the 2,596,905 ordinary shares beneficially owned by Bonstar and by the other company, which constitute approximately 2.4% of the ordinary shares. Each of Bonstar and Messrs. Joseph Mor and Ishay Mor disclaims beneficial ownership of the ordinary shares beneficially owned by Kanir and Nechama Investments. The information included in this report is based on a Schedule 13D/A filed by, among others, Bonstar, Mr. Joseph Mor and Mr. Ishay Mor on December 22, 2010 and on other previous Schedule 13D filings by these persons.
|
(6)
|
According to public filings, Zohar Zisapel is an Israeli citizen. As of December 31, 2010, the holdings of Mr. Zisapel consisted of: (i) 5,647,538 ordinary shares held by the Mr. Zisapel and (ii) 2,500 ordinary shares held of record by Lomsha Ltd., an Israeli company controlled by Mr. Zisapel. The information included in this report is based on a Schedule 13G/A filed by Mr. Zisapel on January 13, 2011.
|
|
|
2
|
According to information provided by the holders, the “Fortissimo Entities” consist of Fortissimo Capital Fund GP, LP (“FFC-GP”), Fortissimo Capital Fund (Israel), LP (“FFC-Israel”); Fortissimo Capital Fund (Israel-DP), LP (“FFC-Israel-DP”); and Fortissimo Capital Fund, LP (“FFC Cayman”). FFC-GP and FFC Cayman are limited partnerships incorporated in the Cayman Islands. FFC-Israel and FFC-Israel-DP are limited partnerships incorporated in Israel. FFC-GP is the general partner of each of FFC-Israel, FFC-Israel-DP and FFC Cayman, which invest together in the framework of parallel private equity funds.
|
3
|
According to information previously provided by the holders, the Old Lane Funds included Old Lane Luxemburg Master Fund S.a.r.l, a private company registered in Luxemburg, and its shareholders: Old Lane Cayman Master Fund L.P., a limited partnership registered in the Cayman Islands, Old Lane HMA Master Fund, L.P., a limited partnership registered in the Cayman Islands and Old Lane U.S. Master Fund L.P., a limited partnership registered in Delaware, USA.
|
*
|
Including the Depository Trust Company.
|
Year
|
High (US)
|
Low (US)
|
||||||
2006
|
$ | 0.84 | $ | 0.50 | ||||
2007
|
0.84 | 0.43 | ||||||
2008
|
0.75 | 0.47 | ||||||
2009
|
0.66 | 0.45 | ||||||
2010
|
0.75 | 0.51 |
2009
|
||||||||
First Quarter
|
$ | 0.64 | $ | 0.46 | ||||
Second Quarter
|
0.59 | 0.49 | ||||||
Third Quarter
|
0.55 | 0.45 | ||||||
Fourth Quarter
|
0.66 | 0.47 |
2010
|
||||||||
First Quarter
|
$ | 0.72 | $ | 0.58 | ||||
Second Quarter
|
0.70 | 0.51 | ||||||
Third Quarter
|
0.61 | 0.51 | ||||||
Fourth Quarter
|
0.75 | 0.52 |
2011
|
||||||||
First Quarter
|
$ | 0.72 | $ | 0.62 |
Most Recent Six Months
|
||||||||
March 2011
|
$ | 0.68 | $ | 0.62 | ||||
February 2011
|
0.71 | 0.65 | ||||||
January 2011 | 0.72 | 0.67 | ||||||
December 2010
|
0.71 | 0.63 | ||||||
November 2010
|
0.70 | 0.52 | ||||||
October 2010
|
0.55 | 0.53 | ||||||
September 2010
|
0.57 | 0.52 |
|
·
|
any amendment to the articles;
|
|
·
|
an increase in the company’s authorized share capital;
|
|
·
|
a merger; or
|
|
·
|
approval of related party transactions that require shareholder approval.
|
|
·
|
$103.9 million was transferred to us on the HP APA Closing Date.
|
|
·
|
$1.6 million was withheld by HP until final calculation of the net debt as of the HP APA Closing Date. Based on the final net debt calculation we were entitled only to an amount of $1.504 million, which was transferred to us on July 30, 2008.
|
|
·
|
$1.5 million was withheld by HP until the resolution of NUR Europe’s obligations with respect to its capital lease and Government grants. Of the $1.5 million withheld, an amount of $1 million was transferred to us on December 2, 2008 as a result of the assignment of NUR Europe’s facilities and related capital lease to a third party. The remainder $0.5 million withheld in connection with NUR Europe’s obligations with respect to the government grants was transferred to us on August 1, 2010.
|
|
·
|
Of the additional proceeds in the amount of $1.1 million related to NUR Europe’s facilities, a total amount of $0.4 million was transferred to us on December 18, 2008 and an additional amount of approximately $0.7 million was transferred to us on March 13, 2009.
|
|
·
|
The remaining $14.5 million was deposited into an escrow account to secure the indemnity obligations of the Company and its remaining subsidiaries. The escrow funds, net of amounts distributed to HP in satisfaction of indemnity obligations, were to be distributed to us in two installments: $9.5 million was to be released to us eighteen months following the HP APA Closing Date and $5 million was to be released to us twenty-four months following the HP APA Closing Date.
|
|
(1)
|
an individual citizen or resident of the United States,
|
|
(2)
|
a corporation or other entity taxable as a corporation for U.S. federal income tax purposes organized in or under the laws of the United States or any political subdivision thereof,
|
|
(3)
|
an estate the income of which is subject to U.S. federal income tax without regard to its source, or
|
|
(4)
|
a trust, if such trust was in existence on August 20, 1996 and has validly elected to be treated as a U.S. person for U.S. federal income tax purposes, or if (a) a court within the U.S. can exercise primary supervision over its administration and (b) one or more U.S. persons have the authority to control all of the substantial decisions of such trust.
|
|
(1)
|
the excess distribution or gain will be allocated ratably over your holding period for the ordinary shares,
|
|
(2)
|
the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and
|
|
(3)
|
the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
|
|
(i)
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
|
(iii)
|
provide reasonable assurance regarding prevention or timely protection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
|
2009
|
2010
|
|||||||
Audit Fees(1)
|
$ | 78 | $ | 157 | ||||
Audit-Related Fees(2)
|
- | $ | 20 | |||||
Tax Fees(3)
|
$ | 29 | $ | 60 | ||||
All Other Fees
|
- | - | ||||||
Total
|
$ | 107 | $ | 238 |
(1)
|
Professional services rendered by our independent registered public accounting firm for the audit of our annual financial statements or services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements.
|
(2)
|
Professional services related to due diligence investigations.
|
(3)
|
Professional services rendered by our independent registered public accounting firm for international and local tax compliance, tax advice services and tax planning.
|
Number
|
Description
|
1.1
|
Memorandum of Association of the Registrant (translated from Hebrew)(1)*
|
1.2
|
Second Amended and Restated Articles of the Registrant(2)
|
2.1
|
Specimen Certificate for ordinary shares(3)
|
2.2
|
Form of Subscription Agreement, between the Registrant and certain investors, executed in connection with a private placement completed in January and February 2007(4)
|
2.3
|
Form of Warrant Agreement, between the Registrant and certain investors, executed in connection with a private placement completed in January and February 2007
(4)
|
4.1
|
1998 Non-Employee Directors Share Option Plan(4)
|
4.2
|
2000 Stock Option Plan(4)
|
4.3
|
Form of Indemnification Agreement and Form of Exemption Letter between the Registrant and its officers and directors(7)
|
4.4
|
Asset Purchase Agreement, dated December 9, 2007, between the Registrant and Hewlett-Packard Company(8)
|
4.5
|
Management Services Agreement, by and among the Registrant, Kanir Joint Investments (2005) Limited Partnership and Meisaf Blue & White Holdings Ltd., effective as of March 31, 2008(9)
|
4.6
|
Form of Offer to Repurchase Employee Stock Options, dated April 2, 2008(10)
|
4.7
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic System in Cingoli, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 4, 2010 (portions translated from Italian)(11)*
|
4.8
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic System in Senigallia, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 4, 2010 (portions translated from Italian)(11)*
|
4.9
|
Side Agreement, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 5, 2010(12)
|
4.10
|
Giaché Building Right Agreement (summary of Italian version)*
|
4.11
|
Massaccesi Building Right Agreement (summary of Italian version)*
|
4.12
|
Settlement Agreement and Release, dated July 27, 2010, between Ellomay Capital Limited and Hewlett-Packard Company
|
4.13
|
Troia 8 Building Right Agreement (summary of Italian version)*
|
4.14
|
Troia 9 Building Right Agreement (summary of Italian version)*
|
4.15
|
Investment Agreement, among U. Dori Group Ltd., U. Dori Energy Infrastructures Ltd. and Ellomay Clean Energy Ltd. , dated November 25, 2010 (summary of Hebrew version)*
|
4.16
|
Shareholders Agreement, among U. Dori Group Ltd., Ellomay Clean Energy Ltd. and U. Dori Energy Infrastructures Ltd., dated November 25, 2010 (summary of Hebrew version)*
|
4.17
|
Agreement, between U. Dori Energy Infrastructures Ltd. and Israel Discount Bank Ltd., dated January 26, 2011 (summary of Hebrew version)*
|
Number |
Description
|
4.18
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic Plant, between Urbe Techno S.r.l. and Pedale S.r.l., dated March 25, 2011 (portions translated or summarized from Italian)*
|
8
|
List of Subsidiaries of the Registrant
|
11
|
Code of Ethics(13)
|
12.1
|
Certification of Principal Executive Officer required by Rule 13a-14(a) and Rule 15d-14(a) (Section 302 Certification)
|
12.2
|
Certification of Principal Financial Officer required by Rule 13a-14(a) and Rule 15d-14(a) (Section 302 Certification)
|
13
|
Certification of Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(b) and Rule 15d-14(b) (Section 906 Certification)
|
14
|
Consent of Kost Forer Gabbay & Kasierer
|
_____________________________________
|
*
|
The original language version is on file with the Registrant and is available upon request.
|
(1)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2007 and incorporated by reference herein.
|
(2)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2008 and incorporated by reference herein.
|
(3)
|
Previously filed with the Registrant’s Form F-1 (File No. 33-93160) and incorporated by reference herein.
|
(4)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2006 and incorporated by reference herein.
|
(5)
|
Previously filed with the Registrant’s Form F-1 (File No. 333-66103) and incorporated by reference herein.
|
(6)
|
Previously filed with the Registrant’s Form 6-K dated October 14, 1997 and incorporated by reference herein.
|
(7)
|
Previously filed with the Registrant’s Form 6-K dated November 24, 2009 and incorporated by reference herein.
|
(8)
|
Previously filed with the Registrant’s Form 6-K dated January 3, 2008 and incorporated by reference herein.
|
(9)
|
Previously filed with the Registrant’s Form 6-K dated December 1, 2008 and incorporated by reference herein.
|
(10)
|
Previously filed with the Registrant’s Form CB dated April 3, 2008 and incorporated by reference herein.
|
(11)
|
Previously filed with Amendment No. 2 to the Registrant’s Form 20-F for the year ended December 31, 2009 and incorporated by reference herein.
|
(12)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2009 and incorporated by reference herein.
|
(13)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2003 and incorporated by reference herein.
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Ellomay Capital Ltd.
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By:
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/s/ Ran Fridrich
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Ran Fridrich
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Chief Executive Officer
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Page
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F - 2
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F - 3 - F - 4
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F - 5
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F - 6
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F - 7 - F - 8
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F - 9 - F - 49
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/s/ Kost Forer Gabbay & Kasierer | |
Tel-Aviv, Israel
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KOST FORER GABBAY & KASIERER
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April 14, 2011
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A Member of Ernst & Young Global
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Year ended
December 31,
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||||||||
2010
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2009
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|||||||
U.S. dollars in thousands (except per share data)
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||||||||
General and administrative expenses
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$ | 3,211 | $ | 1,931 | ||||
Operating loss
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(3,211 | ) | (1,931 | ) | ||||
Financial income, net
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1,400 | 1,357 | ||||||
Company's share of losses of associate accounted for at equity
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(66 | ) | - | |||||
Loss before taxes on income
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(1,877 | ) | (574 | ) | ||||
Tax benefit (taxes on income)
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44 | (69 | ) | |||||
Loss from continuing operations
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(1,833 | ) | (643 | ) | ||||
Income (loss) from discontinued operations, net
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7,035 | (376 | ) | |||||
Net income (loss)
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5,202 | (1,019 | ) | |||||
Other comprehensive income:
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||||||||
Foreign currency translation adjustments
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194 | - | ||||||
Total other comprehensive income
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194 | - | ||||||
Total comprehensive income (loss)
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$ | 5,396 | $ | (1,019 | ) | |||
Basic net earnings (loss) per share:
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||||||||
Loss from continuing operations
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$ | (0.02 | ) | $ | (0.01 | ) | ||
Earnings (loss) from discontinued operations
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0.09 | *) - | ||||||
Net earnings (loss)
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$ | 0.07 | $ | (0.01 | ) | |||
Diluted net earnings (loss) per share:
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||||||||
Loss from continuing operations
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$ | (0.02 | ) | $ | (0.01 | ) | ||
Earnings (loss) from discontinued operations
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0.08 | *) - | ||||||
Net earnings (loss)
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$ | 0.06 | $ | (0.01 | ) |
Adjustments
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arising from
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||||||||||||||||||||
translating
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||||||||||||||||||||
financial
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||||||||||||||||||||
statements of
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Share
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Share
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Accumulated
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foreign
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|||||||||||||||||
capital
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premium
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deficit
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operations
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Total
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U.S. dollars in thousands
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||||||||||||||||||||
Balance as of January 1, 2010
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$ | 16,820 | $ | 72,407 | $ | (19,199 | ) | $ | - | $ | 70,028 | |||||||||
Net income
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- | - | 5,202 | - | 5,202 | |||||||||||||||
Other comprehensive income
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- | - | - | 194 | 194 | |||||||||||||||
Total comprehensive income
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- | - | 5,202 | 194 | 5,396 | |||||||||||||||
Exercise of warrants
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9,283 | 3,803 | - | - | 13,086 | |||||||||||||||
Cost of share-based payments
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- | 56 | - | - | 56 | |||||||||||||||
Balance as of December 31, 2010
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$ | 26,103 | $ | 76,266 | $ | (13,997 | ) | $ | 194 | $ | 88,566 | |||||||||
Balance as of January 1, 2009
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$ | 16,820 | $ | 72,289 | $ | (18,180 | ) | $ | - | $ | 70,929 | |||||||||
Loss
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- | - | (1,019 | ) | - | (1,019 | ) | |||||||||||||
Total comprehensive loss
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- | - | (1,019 | ) | - | (1,019 | ) | |||||||||||||
Cost of share-based payments
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- | 118 | - | - | 118 | |||||||||||||||
Balance as of December 31, 2009
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$ | 16,820 | $ | 72,407 | $ | (19,199 | ) | $ | - | $ | 70,028 |
Year ended
December 31,
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2010
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2009
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U.S. dollars in thousands
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Cash flows from operating activities:
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Net income (loss)
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$ | 5,202 | $ | (1,019 | ) | |||
Income (loss) from discontinued operations
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7,035 | (376 | ) | |||||
Loss from continuing operations
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(1,833 | ) | (643 | ) | ||||
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities:
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Adjustments to the profit or loss items:
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Depreciation
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22 | 11 | ||||||
Finance income
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(611 | ) | (1,314 | ) | ||||
Cost of share-based payment
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56 | 118 | ||||||
Share of losses of associate accounted for at equity method
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66 | - | ||||||
(467 | ) | (1,185 | ) | |||||
Changes in operating asset and liability items:
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Decrease (increase) in other receivable and prepaid expenses
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(2,827 | ) | 55 | |||||
Increase (decrease) in other long-term liabilities
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(44 | ) | 59 | |||||
Increase in other assets
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(373 | ) | (17 | ) | ||||
Increase in accounts payable
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2,815 | 7 | ||||||
Decrease in other payables and accrued expenses
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(2,118 | ) | (359 | ) | ||||
(2,547 | ) | (255 | ) | |||||
Cash received during the year for:
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Interest received
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412 | 1,782 | ||||||
Net cash used in operating activities from continuing operations
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(4,435 | ) | (301 | ) | ||||
Net cash used in operating activities from discontinued operations
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(432 | ) | (940 | ) | ||||
Net cash used in operating activities
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(4,867 | ) | (1,241 | ) |
Year ended
December 31,
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2010
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2009
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U.S. dollars in thousands
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Cash flows from investing activities
:
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Purchase of property and equipment
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(14,710 | ) | (152 | ) | ||||
Acquisition of Italian subsidiaries with plants under construction
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(55 | ) | - | |||||
Advance on account of investment
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(3,546 | ) | ||||||
Investment in long-terms deposits
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(400 | ) | - | |||||
Investment in restricted cash
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(728 | ) | - | |||||
Proceeds from short term bank deposits
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- | 49,000 | ||||||
Net cash provided by (used in) investing activities from continuing operations
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(19,439 | ) | 48,848 | |||||
Net cash provided by investing activities from discontinued operations
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7,280 | 694 | ||||||
Net cash provided by (used in) investing activities
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(12,159 | ) | 49,542 | |||||
Cash flows from financing activities
:
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Proceeds from sale and finance lease back
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5,228 | - | ||||||
Proceeds from warrants exercised
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13,086 | - | ||||||
Net cash provided by investing activities from continuing operations
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18,314 | - | ||||||
Net cash provided by financing activities
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18,314 | - | ||||||
Exchange differences on balances of cash and cash equivalents
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15 | - | ||||||
Increase in cash and cash equivalents
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1,303 | 48,301 | ||||||
Cash and cash equivalents at the beginning of the year
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75,280 | 26,979 | ||||||
Cash and cash equivalents at the end of the year
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$ | 76,583 | $ | 75,280 |
(a)
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Significant non-cash transactions:
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Purchase of property and equipment on credit
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$ | 5,290 | $ | - |
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a.
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Ellomay Capital Ltd. (the "Company") (formerly: NUR Macroprinters Ltd.), an Israeli Company who has invested in the photovoltaic industry in Italy and in several Israeli entities and whose current plan of operation is to manage its investments in the Italian photovoltaic field and in the Israeli market and with respect to the remaining funds it holds, to identify and evaluate additional suitable business opportunities in the energy and infrastructure fields, including in the renewable energy field, through the direct or indirect investment in energy manufacturing plants, the acquisition of all or part of an existing business, pursuing business combinations or otherwise.
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b.
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Until February 29, 2008, the Company and its subsidiaries developed, manufactured, sold and provided support services for digital wide format and super-wide format printing systems for on-demand, short-run printing as well as related consumable products. On February 29, 2008 (the "Closing Date"), the sale of this business to Hewlett-Packard Company ("HP" and the "HP Transaction") was finalized. Prior to the Closing Date, the Company operated through wholly-owned subsidiaries for sales, support services and marketing of the Company's products in their country or region of domicile, some of which were sold to HP. A majority of the remaining subsidiaries were dissolved during 2008, 2009 and 2010.
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The aggregate consideration in connection with the HP Transaction amounted to $ 122,600. Of the total consideration, an amount of $ 500 was withheld in connection with the obligation of one of the subsidiaries that were sold to HP with respect to the government grants, and an amount of $ 14,500 was deposited into an escrow account to secure the indemnity obligations of the Company and its remaining subsidiaries. The amount deposited in the escrow account, net of amounts distributed to HP in satisfaction of indemnity obligations, was to be distributed to the Company in two installments: $ 9,500 was to be distributed eighteen months following the Closing Date and $ 5,000 was to be distributed twenty-four months following the Closing Date.
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In August 2009, the Company received two officer's certificates from HP requesting the release of funds from the escrow account in the aggregate amounts of $ 8,094 and Euro 2,415,000 (approximately $ 3,200). The claims included in the officer's certificates mainly referred to payments HP made to the Israeli Office of Chief Scientist ("OCS") in connection with the transfer of technology claimed to have been developed with OCS funding, claims made by suppliers and alleged non compliance with different environmental and safety regulations.
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On July 27, 2010, a settlement agreement between the Company and HP with respect to the release of funds deposited in the escrow account (the "Settlement Agreement") was executed. Under the terms of the Settlement Agreement, HP received approximately $ 7,300 of the escrow funds (plus accrued interest) and the Company received approximately $ 7,200 of the escrow funds (plus accrued interest). In addition, HP released to the Company the amount of $ 500 that was withheld in connection with the obligations of one of the subsidiaries that were sold to HP with respect to government grants.
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As such, the Company recorded the amount released from the escrow account pursuant to the Settlement Agreement, net of related costs, as income from discontinued operations for the year ended December 31, 2010.
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In addition, the parties to the Settlement Agreement agreed to waive any current and future claims against each other arising out of or connected with the HP Transaction and further agreed that the Company will not be responsible for any future claims with respect to the HP Transaction and the assets acquired thereunder.
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Following the execution of the Settlement Agreement the Company paid and expects to pay additional payments of approximately $300 to former employees as bonuses and in connection with the repurchase of employee stock options, all as previously approved by the Company's Board of Directors.
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The operating results and cash flows attributed to the digital wide format and super-wide format printing system business were presented in the Company's statements of comprehensive income and cash flows as discontinued operations. Balance sheet amounts related to this business are presented as assets and liabilities attributed to discontinued operations and are expected to be settled in one to two years.
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The following table sets forth the net income from discontinued operations in the amount of $ 7,035 for the year ended December 31, 2010:
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Proceeds from settlement with HP
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$ | 7,280 | ||
Settlement of claims, net of legal fees
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267 | |||
Related expenses
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(512 | ) | ||
Income from discontinued operations, net
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$ | 7,035 |
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The Company did not record taxes related to the income from discontinued operations due to utilization of carryforward tax losses.
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The loss from discontinued operations for the year ended December 31, 2009 is mainly due to expenses incurred in connection with activities relating to liquidating the non operating subsidiaries of the Company following the closing of the HP Transaction.
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The breakdown of current assets and liabilities attributed to discontinued operations of the Company is as follows:
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December 31,
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January 1,
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2010
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2009
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2009
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ASSETS:
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Prepaid expenses and other current assets
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$ | - | $ | 35 | $ | 89 | ||||||
Legal claim receivable
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268 | - | - | |||||||||
Receivable from HP
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- | 500 | 1,183 | |||||||||
Other
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24 | - | - | |||||||||
$ | 292 | $ | 535 | $ | 1,272 |
December 31,
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January 1,
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|||||||||||
2010
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2009
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2009
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LIABILITIES:
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Accrued expenses and other liabilities
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$ | 380 | $ | 156 | $ | 763 | ||||||
$ | 380 | $ | 156 | $ | 763 |
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c.
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Since March 4, 2010, the Company has entered into several Engineering Procurement & Construction Contracts ("EPC Contracts"), with Italian contractors, (the "Contractors"), for the construction, installation, testing, commissioning, operating and maintenance of six photovoltaic plants located in Italy (each, an "PV Project" and, together, the "PV Projects").
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Each of the PV Projects is implemented on the basis of the following agreements:
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-
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An EPC Contract, which governs the installation, testing and commissioning of a photovoltaic plant by the respective Contractor;
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-
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An Operation and Maintenance Agreement (an "O&M Agreement"), which governs the operation and maintenance of the photovoltaic plant by the respective Contractor;
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-
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When applicable, a side agreement between the Company's relevant Italian subsidiary and the Contractor, whereby the panels required for the construction of the photovoltaic plant will be purchased by such Italian subsidiary directly from a third party supplier of such panels, and then transferred to the Contractor;
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-
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A number of ancillary agreements, including:
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*
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One or more "building rights agreements" with the land owners, which provide the terms and conditions for the lease of land on which the photovoltaic plants are constructed and operated.
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*
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Standard "incentive agreements" with Gestoredei Servizi Elettrici ("GSE"), Italy's energy regulation agency responsible, inter- alia, for incentivizing and developing renewable energy sources in Italy and purchasing energy and re-selling it on the electricity market. The incentive agreements will be entered into prior to connection of the each of the EPC Projects to the Italian national grid. Under such agreement, it is anticipated that GSE will grant the applicable feed-in tariff governing the purchase of electricity.
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*
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One or more "power purchase agreements" with GSE, specifying the power output to be purchased by GSE for resale and the consideration in respect thereof.
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*
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One or more "interconnection agreements" with the Enel Distribuzione S.p.A ("ENEL"), the Italian national electricity grid operator, which provide the terms and conditions for the connection to the Italian national grid.
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*
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A stock purchase agreement in the event the Company acquires a plant that is under construction or is already constructed. During 2010 the Company acquired two Italian subsidiaries, each of them was in process of constructing photovoltaic plants.
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In connection with the establishment of the Company's photovoltaic plants, the Company recorded as of December 31, 2010, property, plant and equipment at an aggregate value of approximately $ 21,612, in accordance with actual costs incurred.
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On December 31, 2010, two wholly-owned Italian subsidiaries entered into Financial Leasing Agreements (the "Leasing Agreements") for the financing of their photovoltaic plants in the amount of Euro 3,000,000 (approximately $ 3,975) each. As of December 31, 2010 the first drawdown was received in the amount of Euro 3,900,000 (approximately $ 5,228). (Refer to note 7 for further details).
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d.
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In November 2010, the Company invested in an Israeli Company that is expected to operate or have holdings in companies that are expected to operate in the telecommunications business in Israel with respect to the launch of a virtual mobile operator ("MVNO"). The MVNO is purported to be operated by Alon Cellular Ltd. ("Alon Cellular"), a wholly owned subsidiary of AlonRibua Telecom Ltd. ("Alon Telecom"). The Company holds 25% of Alon Telecom's share capital through its wholly owned subsidiary. In November 2010 the Company extended NIS 38,000 (approximately $ 11), and in January 2011 the Company extended an additional amount of NIS 837,000 (approximately $ 236) to Alon Telecom as a shareholders' loan. The amounts reflect 25% of the aggregate NIS 3,500,000 (approximately $986) shareholders' loan that was extended by all shareholders of Alon Telecom. The investment is accounted for under the equity method.
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e.
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On November 25, 2010, the Company, through its wholly-owned subsidiary ("Ellomay Energy"), entered into an Investment Agreement (the "Dori Investment Agreement") with U. Dori Group Ltd. ("Dori Group"), and U. Dori Energy Infrastructures Ltd. ("Dori Energy"), with respect to an investment in Dori Energy. Dori Energy holds 18.75% of the share capital of Dorad Energy Ltd. ("Dorad"), which plans and promotes the construction of an approximate 800 MWp gas operated power plant in the vicinity of Ashkelon, Israel. The Dori Investment Agreement sets forth that subject to the fulfillment of certain conditions precedent, the Company shall invest a total amount of NIS 50,000,000 (approximately $14,100) in Dori Energy, and receive a 40% stake in Dori Energy's share capital. Ellomay Energy was also granted an option to acquire additional shares of Dori Energy that, if exercised, will increase Ellomay Energy's percentage holding in Dori Energy to 49% and, subject to the obtainment of certain regulatory approvals - to 50%.
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The conditions precedent were fulfilled subsequent to the balance sheet date. As of December 31, 2010 the Company prepaid $ 3,612 on account of this investment that were recorded as advance payments on account of investment. See Note 18a for additional information.
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Concurrently with the execution of the Dori Investment Agreement, Ellomay Energy, Dori Energy and Dori Group have also entered into the Dori Shareholders Agreement ("Dori SHA") that became effective upon the consummation of the Dori Investment. The Dori SHA provides that each of Dori Group and Ellomay Energy is entitled to nominate two directors (out of a total of four directors) in Dori Energy. The Dori SHA also grants each of Dori Group and Ellomay Energy with equal rights to nominate directors in Dorad, provided that in the event Dori Energy is entitled to nominate only one director in Dorad, such director shall be nominated by Ellomay Energy for so long as Ellomay Energy holds at least 30% of Dori Energy. The Dori SHA further includes customary provisions with respect to restrictions on transfer of shares, a reciprocal right of first refusal, tag along, principles for the implementation of a BMBY separation mechanism, veto rights, etc.
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f.
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The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), and are the Company's first annual financial statements reported in accordance with IFRS. In these financial statements, IFRS 1, "
First-time Adoption of International Financial Reporting Standards
", has been applied (see additional details in Note 2a). The impact of the transition to reporting in accordance with IFRS in the Company's financial position, results of operations and cash flows, is detailed in Note 17 below.
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g.
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These financial statements have been approved by the Company's Board of Directors on April 13, 2011.
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h.
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Definitions:
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In these financial statements:
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IFRS - Standards and interpretations that were adopted by the International Accounting Standards Board ("IASB") and which include International Financial Reporting Standards and International Accounting Standards ("IAS") along with the interpretations to these standards of the International Financial Reporting Interpretations Committee ("IFRIC") or interpretations of the Standing Interpretations Committee ("SIC"), respectively.
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US GAAP - Standards and interpretations that were adopted by the Financial Accounting Standards Board (FASB), which include Accounting Standards Codification (ASC), Accounting Standards updates (ASU) and Staff Accounting Bulletins (SAB).
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Subsidiaries/consolidated companies - Companies that are controlled by the Company (as defined in IAS 27 (2008)) and whose accounts are consolidated with those of the Company.
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Associates - Companies over which the Company has significant influence and that are not subsidiaries and are accounted for in these consolidated financial statements in accordance with the equity method of accounting.
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Related party - Within its meaning in IAS 24, "Related Party Disclosures".
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Dollar - The US dollar.
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a.
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Basis of preparation of the financial statements:
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1.
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These consolidated financial statements have been prepared in accordance with IFRS that were published and are effective at the Company's first annual reporting date, December 31, 2010, and were the basis of the Company's accounting policy.
The preparation of the consolidated financial statements in accordance with IFRS resulted in changes to the accounting policies as compared with the most recent annual consolidated financial statements prepared under U.S. GAAP as of December 31, 2009 and for the year then ended.
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2.
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Consistent accounting policies:
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. They also have been applied in preparing an opening IFRS balance sheet as of January 1, 2009, for the purposes of the transition to IFRS, as required by first time adoption of IFRS (IFRS 1
).
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3.
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Presentation of financial statements:
The Company has elected to present a combined statement of income and other comprehensive income.
The Company has elected to present the statement of income using the function of expense method.
Furthermore, the Company presents a statement of changes in equity immediately following the statement of comprehensive income instead of in the notes.
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4.
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Measurement basis:
The consolidated financial statements have been prepared on a cost basis, except for the following:
Investment in associate accounted for using the equity method;
Derivative financial instruments at fair value through profit or loss ;
Provision for tax uncertainties.
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b.
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Significant accounting judgments, estimates and assumptions used in the preparation of the financial statements:
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The preparation of the Company's consolidated financial statements in conformity with IFRS, requires management to make judgments, estimates and assumptions that affect the reported amounts recognized in the financial statements. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. Estimates and underlying assumptions are reviewed on an on going basis. The changes in accounting estimates are recognized in the period of the change in estimate.
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The key assumptions made in the financial statements concerning uncertainties at the balance sheet date and the critical estimates computed by the Company that may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
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Legal claims
|
|
When assessing the possible outcomes of legal claims that were filed against the Company and its subsidiaries, the companies relied on the opinions of their legal counsel. The opinions of their legal counsel are based on the best of their professional judgment, and take into consideration the current stage of the proceedings and the legal experience accumulated with respect to the various matters. As the results of the claims will ultimately be determined by the courts, they may be different from such estimates.
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Classification of leases:
|
|
In order to determine whether to classify a lease as a finance or operating lease, the Company evaluates whether the lease transfers substantially all the risks and benefits incidental to ownership of the leased asset. In this respect, the Company evaluates such criteria as the existence of a "bargain" purchase option, the lease term in relation to the economic life of the asset and the present value of the minimum lease payments in relation to the fair value of the asset.
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Tax
provision:
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The Company recognizes a provision for tax uncertainties. In determining the amount of the provision, assumptions and estimates are made in relation to the probability that the position will be sustained upon examination and the amount that is likely of being realized upon settlement, using the facts, circumstances, and information available at the reporting date. The Company records additional tax charges in a period in which it determines that a recorded tax liability is less than it expects ultimate assessment to be. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evaluation of regulations and court rulings. Therefore, the actual tax liability may be materially different from the Company's estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities.
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c.
|
Functional and presentation currency:
|
1.
|
These consolidated financial statements are presented in dollars, which is the Company's functional currency, and have been rounded to the nearest thousand. The dollar is the currency that represents the principal economic environment in which the Company operates.
|
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2.
|
The functional currency is examined for the Company and for each of the subsidiaries separately. The functional currency of the Company's Italian subsidiaries' was determined to be the EURO and for the equity investment it was determined to be the NIS.
When a company's functional currency differs from parent's functional currency, that entity represents a foreign operation whose financial statements are translated so that they can be included in the consolidated financial statements as follows:
|
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a)
|
Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet.
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b)
|
Income and expenses for each period presented in the statement of comprehensive income (loss) are translated at average exchange rates for the presented periods; however, if exchange rates fluctuate significantly, income and expenses are translated at the exchange rates at the date of the transactions.
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c)
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Share capital, capital reserves and other changes in capital are translated at the exchange rate prevailing at the date of issuance.
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d)
|
Retained earnings are translated based on the opening balance translated at the exchange rate at that date and other relevant transactions during the period are translated as described in b) and c) above.
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e)
|
All resulting translation differences are recognized as a separate component of other comprehensive income (loss) in equity "adjustments arising from translating financial statement of foreign operations".
|
|
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On a total or partial disposal of a foreign operation, the relevant part of the other comprehensive income (loss) is recognized in the statement of comprehensive income (loss).
Intergroup loans for which settlement is neither planned nor likely to occur in the foreseeable future are, in substance, a part of the investment in that foreign operation and are accounted for as part of the investment and the exchange differences arising on these loans are recognized in the same component of equity as discussed in e) above.
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3.
|
Transactions, assets and liabilities in foreign currency:
Transactions denominated in foreign currency (other than the functional currency) are recorded on initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at the end of each reporting period into the functional currency at the exchange rate at that date. Exchange differences, other than those capitalized to qualifying assets or carried to equity in hedging transactions, are recognized in profit or loss. Non-monetary assets and liabilities measured at cost are translated at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated into the functional currency using the exchange rate prevailing at the date when the fair value was determined
.
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d.
|
Basis of consolidation and equity method accounting:
|
|
1.
|
Subsidiaries
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as of December 31, 2010. The Company holds 100% of its subsidiaries.
|
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2.
|
Transactions eliminated upon consolidation
Intercompany balances and expenses not yet realized arising from intercompany transactions, are eliminated when preparing these consolidated financial statements.
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3.
|
Investment in associate accounted for using the equity method accounting
Associates are those entities in which the Company has significant influence or the ability to significantly influence the financial and operating policies, but control was not achieved. Associates are accounted for using the equity method of accounting (equity accounted investees). The Company's consolidated financial statements include the Company's share of net assets including other comprehensive income (loss) of the associate, from the date that significant influence commences until the date that significant influence ceases.
The Company's share of the operating results of the associate are presented in the statement of comprehensive income (loss) as "Company's share of losses of associate accounted for at equity". Profits and losses resulting from transactions between the Company and the associate are eliminated to the extent of the interest in the associate
.
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e.
|
Cash and cash equivalents:
|
|
Cash and cash equivalents in the balance sheet comprise of cash at hand, money market accounts with daily liquidity and unrestricted short-term deposits with original maturity of three months or less from the date of acquisition, which are redeemable on demand without penalty and which form part of the Company's cash management. Cash and cash equivalents value is as provided by bank statements and due to the short maturity approximates the fair value.
|
|
f.
|
Short term and long term deposits:
|
|
Short term bank deposits are deposits with an original maturity of more than three months, but less than one year from the date of acquisition. Long term bank deposits are deposits with an original maturity of more than one year from the date of acquisition. The deposits are presented according to their terms of deposit.
|
|
g.
|
Restricted cash:
|
|
Restricted cash is primarily invested in highly liquid deposits. These deposits were used to secure obligations towards the land owners in two of the Company's PV Projects.
|
|
h.
|
Property, plant and equipment:
|
|
Property, plant and equipment are stated at cost, net of accumulated depreciation and impairment losses (if any). Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates:
|
%
|
Mainly %
|
|||||||
Office furniture and equipment
|
6-33 | 33 | ||||||
Photovoltaic plants under construction
|
* | ) | ||||||
Leasehold improvements
|
Over the shorter of the lease period or the life of the asset
|
7 |
|
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from use or disposal. Any gain or loss arising on de recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognized. The asset's residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.
|
|
*)
|
In connection with the establishment of the Company's photovoltaic plants, the Company had recorded as of December 31, 2010, property, plant and equipment at an aggregate value of approximately $ 21,612, in accordance with actual costs incurred. As the plants were still under construction as of December 31, 2010, this amount was not yet subject to depreciation, which commences upon completion of construction of the photovoltaic plants.
|
|
i.
|
Financial instruments:
|
|
Financial assets within the scope of IAS 39 "
Financial Instruments: Recognition and Measurement
" are initially recognized at fair value plus directly attributable transaction costs, except for investments at fair value through profit or loss in which case transaction costs are expensed as incurred.
|
|
After initial recognition, the subsequent accounting and measurement of financial assets depends on their classification into one of the four categories, as defined in IAS 39.
|
|
The Company's financial assets include cash and cash equivalents, short term and long term deposits, restricted cash, other receivables and advanced payments on account of investment.
|
|
The Company has derivatives, which are not designated as effective hedging instruments, and are classified as held for trading under financial assets at fair value through profit or loss.
|
|
A financial asset is derecognized when: (i) the contractual rights to the cash flows from the financial asset expire or, (ii) the Company has transferred its contractual rights to receive cash flows from the financial asset or assumes an obligation to pay the received cash flows in full without material delay to a third party under a "pass-through" arrangement; and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
|
|
If the Company transfers its rights to receive cash flows from an asset and neither transfers nor retains substantially all the risks and rewards of the asset nor transfers control of the asset, the asset is recognized to the extent of the Company's continuing involvement in the asset. When continuing involvement takes the form of guaranteeing the transferred asset, the extent of the continuing involvement is the lower of the original carrying amount of the asset and the maximum amount of consideration received that the Company could be required to repay.
|
|
Financial liabilities:
|
|
The Company has the following financial liabilities: other payables, finance lease obligation and other long term liabilities.
|
|
Interest-bearing loans and borrowings are initially recognized at fair value less directly attributable transaction costs (such as loan raising costs). After initial recognition, interest-bearing loans and borrowings are measured based on their terms at amortized cost using the effective interest method, taking into account directly attributed transaction costs. Short term borrowings (such as other payables) are measured based on their terms, normally at face value.
|
|
Gains and losses are recognized in the statement of comprehensive income (loss) when the financial liability is derecognized as well as through the systematic amortization process. Financial liabilities are derecognized when the obligation of the Company, as specified in the agreement, expires or when it is discharged or cancelled.
|
|
j.
|
Impairment of non-financial assets:
|
|
The Company evaluates the need to record an impairment of the carrying amount of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable. If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount is the higher of fair value less costs of sale and value in use. In measuring value in use, the expected future cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the asset. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in profit or loss.
|
|
An impairment loss of an asset, other than goodwill, is reversed only if there have been changes in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. Reversal of an impairment loss, as above, shall not be increased above the lower of the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in prior years and its recoverable amount. The reversal of impairment loss of an asset presented at cost is recognized in profit or loss. A reversal of an impairment loss on a revalued asset is recognized in other comprehensive income. However, to the extent that an impairment loss on the same revalued asset was previously recognized in profit or loss, a reversal of that impairment loss is also recognized in profit or loss.
|
|
k.
|
Share-based payment transactions:
|
|
The Company's employees and directors are entitled to remuneration in the form of equity-settled share-based payment transactions. The Company applies the provisions of IFRS 2, "
Share-Based Payment
".
|
|
The cost of equity-settled transactions with employees and directors is measured at the the fair value of the equity instruments at the date on which they are granted. The fair value is determined by using the Black-Scholes option-pricing model taking into account the terms and conditions upon which the instruments were granted, additional details are included in Note 12.
|
|
The cost of equity-settled transactions is recognized in profit or loss, together with a corresponding increase in equity, over the period in which the service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ("the vesting date"). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest.
|
|
l.
|
Employees benefits:
1. Short-term employee benefits:
Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus is recognized when the Company has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made.
2. Post-employment benefits:
The plans are normally financed by contributions to insurance companies and classified as defined contribution plan or as defined benefit plan.
The Company has defined contribution plans pursuant to Section 14 to the Severance Pay Law under which the Company pays fixed contributions and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient amounts to pay all employee benefits relating to employee service in the current and prior periods. Contributions to the defined contribution plan in respect of severance or retirement pay are recognized as an expense when contributed simultaneously with receiving the employee's services and no additional provision is required in the financial statements.
The Company also operates a defined benefit plan in respect of severance pay pursuant to the Severance Pay Law. According to the Law, employees are entitled to severance pay upon dismissal or retirement. The liability for termination of employee-employer relation is measured using the projected unit credit method. The actuarial assumptions include rates of employee turnover and future salary increases based on the estimated timing of payment. The amounts are presented based on discounted expected future cash flows using a discount rate determined by reference to yields on Government bonds with a term that matches the estimated term of the benefit obligation.
The Company makes current deposits in respect of severance pay obligation to pay compensation to certain of its employees in its pension funds and insurance companies (the "plan assets"). Plan assets are not available to the Company's own creditors and cannot be returned directly to the Company.
The liability for employee benefits presented in the statement of financial position presents the present value of the defined benefit obligation less the fair value of the plan assets, less past service costs and any unrecognized actuarial gains and losses.
|
|
m.
|
Leases:
|
|
The criteria for classifying leases as finance or operating leases depend on the substance of the agreements and are made at the inception of the lease in accordance with the following principles as set out in IAS 17.
|
|
Operating leases:
|
|
Lease agreements are classified as an operating lease if they do not transfer substantially all the risks and benefits incidental to ownership of the leased asset.
|
|
Payments made under operating leases are recognized in the statement of comprehensive income (loss) on a straight-line basis over the term of the lease, including the option period, when on the date of the transaction it was reasonably certain that the option will be exercised.
|
|
Finance leases:
|
|
Finance leases transfer to the Company substantially all the risks and benefits incident to ownership of the leased asset. The leased assets are presented in the statement of financial position. The liability for lease payments is presented at its present value and the lease payments are apportioned between finance charges and a reduction of the lease obligation using the effective interest method.
|
|
n.
|
Taxes on income:
|
|
Taxes on income in the statement of comprehensive income (loss) comprise of current taxes. The tax results in respect of current or deferred taxes are recognized in the statement of comprehensive income (loss) except to the extent that the tax arises from items which are recognized directly in equity. In such cases, the tax effect is also recognized in the relevant item in equity.
|
|
Deferred income taxes are computed in respect of temporary differences between the carrying amounts in the financial statements and the amounts attributed for tax purposes, except for a limited number of exceptions.
|
|
Temporary differences (such as carryforward losses) for which deferred tax assets have not been recognized are reassessed and deferred tax assets are recognized to the extent that their recoverability has become probable. Any resulting reduction or reversal is recognized in the line item, "tax benefit (taxes on income)".
|
|
Deferred tax balances are measured at the tax rates that are expected to apply to the period when the taxes are reversed in profit or loss, comprehensive income or equity, based on tax laws that have been enacted or substantively enacted by the balance sheet date.
|
|
o.
|
Earnings (loss) per share:
|
|
The earnings (loss) per share are computed by dividing the net income attributable to the Company's shareholders by the weighted-average number of shares outstanding during the period. Calculation of the basic earnings (loss) per share includes only shares actually outstanding during the period. Potential ordinary shares (convertible securities, such as, warrants and employee options) are included in calculation of the diluted earnings (loss) per share only if their impact dilutes the earnings (loss) per share in that their conversion reduces the earnings per share or increases the loss per share from continuing operations. In addition, potential ordinary shares converted during the period are included in calculation of the diluted earnings (loss) per share only up to the conversion date, and from this date forward they are included in calculation of the basic earnings (loss) per share.
|
|
Financial income includes interest income on bank deposits, an increase in the fair value of financial instruments recognized at fair value through profit or loss, exchange rate differences. Interest income is recognized as it accrues in profit or loss.
|
|
Financial expenses include bank charges and exchange rate differences.
|
|
Gains and losses on exchange rate differences are reported on a net basis.
|
|
q.
|
Provisions:
|
|
A
provision in accordance with IAS 37 is recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are measured according to the estimated future cash flows discounted using a pre-tax interest rate that reflects the market assessments of the time value of money and, where appropriate, those risks specific to the liability.
|
|
Following are the types of provisions included in the financial statements:
|
|
Legal
claims:
|
|
A
provision for claims is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is more likely than not that an outflow of resources embodying economic benefits will be required by the Company to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the effect of the time value of money is material, a provision is measured at its present value. For further details, refer to Note 9c.
|
|
Provision
for
tax uncertainties:
|
|
Refer to Note 14b.
|
|
r.
|
Discontinued operations:
|
|
A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale and represents a separate major line of business or geographic area of operations. The operating results relating to the discontinued operations are separately presented in the statement of comprehensive income (loss), and in the statement of cash flow.
|
|
s.
|
Standards issued but not yet effective:
|
|
IFRS 7 - Financial Instruments: Disclosure:
|
|
The amendments to IFRS 7 deal with the following issues:
|
|
1.
|
Clarification of the Standard's disclosure requirements. In this context, emphasis is placed on the interaction between the quantitative disclosures and the qualitative disclosures about the nature and extent of risks arising from financial instruments. The Standard also reduces the disclosure requirements for collateral held by the Company and revises the disclosure requirements for credit risk. The amendment should be applied retrospectively commencing from the financial statements for periods beginning on January 1, 2011. Earlier application is permitted.
|
|
2.
|
New disclosure requirements about transferred financial assets including disclosures regarding unusual transfer activity near the end of a reporting period. The objective of the amendment is to assist users of financial statements to assess the risks to which the Company may remain exposed from transfers of financial assets and the effect of these risks on the Company's financial position. The amendment is designed to enhance the reporting transparency of transactions involving asset transfers, specifically securitization of financial assets. The amendment should be applied prospectively commencing from the financial statements for periods beginning on January 1, 2012. Earlier application is permitted.
|
|
The relevant disclosures will be included in the Company's financial statements.
|
|
IFRS 9 - Financial Instruments: Classification and Measurement
|
|
IFRS 9 as issued reflects the first phase of the IASBs work on the replacement of IAS 39 and applies to classification and measurement of financial assets as defined in IAS 39. The standard is effective for annual periods beginning on or after January 1, 2013. In subsequent phases, the IASB will address classification and measurement of financial liabilities, hedge accounting and derecognition. The completion of this project is expected in early 2011. The Company is currently evaluating the impact on its consolidated statements of financial position and financial condition.
|
|
The amendment to IAS 24 clarifies the definition of a related party in order to simplify the identification of such relationships and to eliminate inconsistencies in its application.
|
|
The amendment should be applied retrospectively commencing from the financial statements for annual periods beginning on January 1, 2011. Earlier application is permitted.
|
|
The relevant disclosures will be included in the Company's financial statements.
|
December 31,
|
January 1,
|
|||||||||||
2010
|
2009
|
2009
|
||||||||||
Cash for immediate withdrawal
|
$ | 11,196 | $ | 4,279 | $ | 487 | ||||||
Cash equivalents - short-term deposits (*)
|
65,387 | 71,001 | 26,492 | |||||||||
$ | 76,583 | $ | 75,280 | $ | 26,979 |
|
(*)
|
The interest rate for deposits as of December 31, 2010, is 0.25%-1.05% (0.25%-3.5% as of December 31, 2009 and January 1, 2009).
|
December 31,
|
January 1,
|
|||||||||||
2010
|
2009
|
2009
|
||||||||||
Government authorities
|
$ | 223 | $ | 147 | $ | 311 | ||||||
Interest receivable
|
298 | 99 | 567 | |||||||||
Fair value of forward and swap contracts (*)
|
869 | - | - | |||||||||
Receivables in connection with Photovoltaic plants
|
774 | - | - | |||||||||
Prepaid expenses
|
84 | 108 | 33 | |||||||||
Other
|
60 | 55 | 21 | |||||||||
$ | 2,308 | $ | 409 | $ | 932 |
|
(*)
|
As the functional currency of our investment in Dori Energy is NIS, in order to manage the foreign exchange risk resulting from the expected invested amount of NIS 50,000,000, the Company executed two forward transactions, one of $ 6,300 with the exchange rate of 3.6685 NIS/USD and another of $ 7,000 with the exchange rate of 3.6783 NIS/USD, that expired in close proximity to the closing date of the transaction.
|
|
In order to manage the interest-rate risk resulting from financing secured or about to be secured from local financing institutions in Italy for the Company's PV operations, a Euro 8,000,000 interest swap transaction was executed. The interest swap transaction is for a period of 17 years, amortized semi-annually (Euro 250,000) payment date commencing on March 7, 2011 (reflecting a six-month grace period), whereby the Company is the fixed rate payer (the fixed rate is set at 2.67%) and the financing institute is the floating rate payer (the initial floating rate is 1.1065% and is linked to the Euribor BRA.
|
December 31,
|
January 1,
|
|||||||||||
2010
|
2009
|
2009
|
||||||||||
Cost:
|
||||||||||||
Photovoltaic Plants under construction *)
|
$ | 21,612 | $ | - | $ | - | ||||||
Office furniture and equipment
|
107 | 99 | - | |||||||||
Leasehold improvements
|
66 | 53 | - | |||||||||
21,785 | 152 | - | ||||||||||
Accumulated depreciation:
|
||||||||||||
Photovoltaic Plants under construction
|
- | - | - | |||||||||
Office furniture and equipment
|
22 | 8 | - | |||||||||
Leasehold improvements
|
11 | 3 | - | |||||||||
33 | 11 | - | ||||||||||
Property, plant and equipment, net
|
$ | 21,752 | $ | 141 | $ | - |
December 31,
|
January 1,
|
|||||||||||
2010
|
2009
|
2009
|
||||||||||
Employees and payroll accruals
|
$ | 160 | $ | 99 | $ | 64 | ||||||
Government authorities
|
319 | - | 82 | |||||||||
Professional services
|
595 | 99 | 107 | |||||||||
Accrued expenses in connection with Photovoltaic plants
|
2,670 | - | - | |||||||||
Accrued expenses
|
667 | 654 | 958 | |||||||||
$ | 4,411 | $ | 852 | $ | 1,211 |
|
a.
|
Composed as follows:
|
Linkage
|
Interest rate
|
December 31,
|
|||||||
terms
|
2010
|
2010
|
|||||||
%
|
|||||||||
From leasing institution
|
EURIBOR
|
3.43 | $ | 5,228 |
|
1.
|
On December 31, 2010 two wholly-owned Italian subsidiaries entered into Financial Leasing Agreements in the amount of Euro 3,000,000 each (Euro 6,000,000 in total) for the financing of the companies, with the following terms: bear nominal annual interest rate of 3.43%. Monthly payments in the amount of Euro 20,000, commencing 210 days after issuance, for the duration of the Leasing Agreement (17 years) which are linked to the EURIBOR monthly average Euro Interbank Offered Rate. As of December 31, 2010 the first drawdown under the two agreements was received in the aggregate amount of Euro 3,900,000 (approximately $5,228).
|
|
a.
|
A commitment to maintain the debt cover service ratio as defined in the agreement for the entire duration of the transaction;
|
|
b.
|
A declaration that the shareholders credit towards the two Italian wholly-owned subsidiaries will be subordinated to the leasing company’s credit;
|
|
c.
|
The Company undertook not to transfer the entire holdings in two wholly-owned Italian subsidiaries and shares not exceeding 20% of its holdings in the wholly-owned Luxembourgian subsidiary that wholly-owns the two Italian subsidiaries;
|
|
d
|
The Company undertook to assign (as guarantee) the receivables from GSE; and
|
|
e.
|
The Company undertook encumber in favor of the leasing company the rights in connection with the guarantees provided under the EPC and O&M agreements.
|
|
3.
|
The Company accounted for the transaction as a sale and a finance leaseback since the Company retained the significant risks and benefits of ownership related to its photovoltaic plants. The carrying value of the photovoltaic plants was left unchanged, with the sales proceeds recorded as a finance lease obligation accounted for under IAS 39.
|
|
b.
|
The aggregate annual maturities are as follows:
|
December 31,
|
||||
2010
|
||||
First year (current maturities)
|
$ | - | ||
Second year
|
214 | |||
Third year
|
253 | |||
Fourth year
|
262 | |||
Fifth year
|
271 | |||
Sixth year and thereafter
|
4,228 | |||
$ | 5,228 |
December 31,
|
January 1,
|
|||||||||||
2010
|
2009
|
2009
|
||||||||||
Provision for tax uncertainties (refer to Note 14b)
|
$ | 4,600 | $ | 4,644 | $ | 4,584 | ||||||
Liabilities for employees benefits
|
14 | 14 | 14 | |||||||||
$ | 4,614 | $ | 4,658 | $ | 4,598 |
|
a.
|
Operating lease commitments:
|
|
The PV plants are constructed on land leased for 20-21 years under operating lease agreements, which expire on various dates, ranging from 2031 to 2032. In respect to several of the leases the Company has the option to extend the lease until 2040. The Company leases its office space under operating lease that expires in 2013 with additional 3 years optional extension periods. The following table summarizes the minimum annual rental commitments as of the periods indicated under the non-cancelable operating leases and sub-lease arrangements with initial or remaining terms of more than one year, reflecting the terms that were in effect as of December 31, 2010:
|
Year ended December 31,
|
Operating lease
|
Sub-lease
|
Total
|
|||||||||
2011
|
$ | 121 | $ | (53 | ) | $ | 68 | |||||
2012
|
144 | - | 144 | |||||||||
2013
|
99 | - | 99 | |||||||||
2014
|
76 | - | 76 | |||||||||
2015
and thereafter
|
1,259 | - | 1,259 | |||||||||
Total minimum lease payments
|
$ | 1,699 | $ | (53 | ) | $ | 1,646 |
|
b.
|
Commitment related to the MVNO investment- refer to Note 1d.
|
|
c.
|
Legal proceedings:
|
|
1.
|
During 2002, an end-user filed a lawsuit in China against a subsidiary alleging bad quality of products. The court ruled that the subsidiary should reimburse the client with the amount of $ 186. Following an appeal filed by the subsidiary, the court ruled in September 2003 in favor of the end-user. The subsidiary is in the process of liquidation and has no assets; therefore the plaintiff has no remedy against the subsidiary.
The customer may try to start new proceedings against another subsidiary in Hong Kong, that was dissolved in 2010. However, to date, the customer has not filed any claim in Hong Kong. Based on management's estimation and the opinion of its legal counsel, it is less than likely that the Company will be required to pay the amount ruled against the subsidiary in China. Therefore, no provision was recorded with respect to this claim.
|
|
2.
|
During 2002, a client filed a lawsuit in China against a subsidiary seeking reimbursement in the amount of $ 400 alleging bad quality of products. In July 2005, the court ruled that the subsidiary is to reimburse the client an amount of $ 286. The subsidiary no longer operates in China and under current law the ruling in China is not enforceable in Hong Kong. The subsidiary notified the customer in March 2006 that it intends to vigorously defend its claims if submitted to court in Hong Kong. To date, the customer has not filed any claim in Hong Kong. Based on management's estimation and the opinion of its legal counsel, it is less than likely that the Company will be required to pay the amount ruled against it in China. Therefore, no provision was recorded with respect to this claim.
|
|
3.
|
In September 2003, the Company filed a lawsuit against a former distributor of the Company, for the collection of unpaid invoices in the amount of $ 420. In February 2004, the former distributor filed a statement of defense denying the Company's claims and it also filed a counter-claim for alleged damages caused to it by the Company in the amount of $ 210. Based on the opinion of its legal counsel, management believes that the counterclaim filed by the former distributor is without merit and that a loss is not probable. Therefore, a provision was not recorded with respect to this claim.
|
|
4.
|
In December 2003, a client of a subsidiary filed a lawsuit alleging that a machine purchased by it failed to perform. This lawsuit was launched as a counterclaim to lawsuit filed by the subsidiary for the collection of unpaid outstanding invoices. The customer sought reimbursement of the purchase price paid by it in the amount of $ 290. In January 2010 the court dismissed the suit. On May 15, 2010 a settlement agreement was reached between the client and the Company according to which the Company is entitled to receive an aggregate consideration of $270 to be received in installments. The settlement is included within income from discontinued operations for the year ended December 31, 2010.
|
|
5.
|
In February 2007, a claim was filed against the Company and one of its former officers by a person claiming to have been an agent of the Company in West Africa for commissions on sales of printers. The claim is for NIS 3,000 thousand ($ 845 as of December 31, 2010). The Company filed a statement of defense denying all claims, both with respect to the causes of action and with respect to the factual allegations in the claim. The plaintiff's filed a motion with the Court to strike Ellomay's Statement of Defense, which was rejected. The plaintiff's filed an appeal to the Supreme Court. That motion was rejected in July 2010. A pre-trial took place on September 5, 2010, which mainly scheduled technical procedures. Both parties filed their affidavits. Based on management's estimation and the opinion of its legal counsel, no provision was recorded with respect to this claim.
|
|
6.
|
In September 2010 a claim was filed with the Court of Brescia, Italy against the Company and against HP and several of its subsidiaries by a former client asking the declaration of invalidity or voidness or termination of the supply of agreements in connection with 5 printers they purchased between 2004 - 2006 alleging the defectiveness of the printers (in particular, the lack of the essential safety qualifications and relevant certifications) and requesting damages in the aggregate amount of Euro 2,500,000 (approximately $3,313). The Company was sued based on its relationship to the seller of the printers, NUR Europe (which was sold to HP). In March 2011, the Company filed its statement of defense, claiming lack of standing, lack of jurisdiction and sole responsibility of NUR Europe as the seller of the printers. The same former client also filed cautionary proceedings for interim relief in the form of the aforementioned payment with the Court of Brescia, Italy, to which all other parties objected. During March 2011 the judge rejected the interim relief sought. This decision may be appealed until April 8, 2011. The next hearing under the main claim is scheduled for January 2012. The Company has required that HP pay its legal fees in connection with this claim based on the settlement agreement executed with HP in July 2010 and is still in discussions with HP regarding this claim. Based on management's estimation and the opinion of its legal counsel, no provision was recorded with respect to this claim.
|
|
d.
|
From time to time, the Company is party to other various legal proceedings, claims and litigation that arise in the normal course of business. It is the opinion of management that the ultimate outcome of these matters will not have a material adverse effect on the Company's financial position, results of operations or cash flows.
|
|
a.
|
Composition of share capital:
|
December 31, | January 1, | |||||||||||||||||||||||
2010 | 2009 | 2009 | ||||||||||||||||||||||
Authorized
|
Issued and outstanding
|
Authorized
|
Issued and outstanding
|
Authorized
|
Issued and outstanding
|
|||||||||||||||||||
Number of shares
|
||||||||||||||||||||||||
Ordinary shares of NIS 1 par value each
|
170,000,000 | 107,500,714 | 170,000,000 | 73,786,428 | 170,000,000 | 73,786,428 |
|
b.
|
Movement is share capital:
Issued and outstanding share capital:
|
Number of
shares
|
NIS
par value
|
|||||||
Balance at January 1, 2009
|
73,786,428 | 73,786,428 | ||||||
Balance at December 31, 2009
|
73,786,428 | 73,786,428 | ||||||
Exercise of warrants
|
33,714,286 | 33,714,286 | ||||||
Balance at December 31, 2010
|
107,500,714 | 107,500,714 |
|
c.
|
Rights attached to shares:
|
|
1.
|
Voting rights at the general meeting, right to dividend and rights upon liquidation of the Company.
|
|
2.
|
The Ordinary shares of the Company were traded until May 2005 on the NASDAQ Capital Market. From May 19, 2005, the Company's Ordinary shares have been quoted over-the-counter in the "pink sheets".
|
|
d.
|
On March 31, 2008 the principal shareholders, the Fortissimo entities, completed the sale of all of the shares and a majority of the warrants held by them to Kanir Joint Investments (2005) Limited Partnership, which was also previously a controlling shareholder of the Company and S. Nechama Investments (2008) Ltd., which became a controlling shareholder of the Company as a result of the purchase from the Fortissimo entities and from several other shareholders.
|
|
e.
|
Warrants:
|
|
As of December 31, 2010, the Company has 3,520,485 warrants outstanding that are exercisable into 3,520,485 Ordinary shares of NIS 1 par value each for an exercise price of $ 0.65. These warrants are classified in equity. The warrants may be exercised by January- February 2012.
|
|
In October 2010, warrants to purchase 25,714,286 ordinary shares, at an exercise price of $ 0.4 per share, were exercised. In December 2010, warrants to purchase an aggregate number of 8,000,000 ordinary shares at an exercise price of $ 0.35 per share, were exercised. These exercises resulted in the receipt by the Company of aggregate consideration in the amount of $ 13,086.
|
|
In January 2011, warrants to purchase 277,779 ordinary shares, at an exercise price of $ 0.65 per share, were exercised.
|
|
f.
|
Dividends:
|
|
In the event that cash dividends are declared in the future, such dividends will be paid in NIS. A dividend paid to shareholders outside Israel will be converted into dollars, on the basis of the exchange rate prevailing at the date of payment. The Company does not intend to pay cash dividends in the foreseeable future.
|
|
g.
|
Capital management in the Company:
The Company's capital management objectives are:
|
|
1.
|
To preserve the Company's ability to ensure business continuity thereby creating a return for the shareholders, investors and other interested parties.
|
|
2.
|
To ensure adequate return for the shareholders by making reasonable investment decisions based on the level of internal rate of return that is in line with the Company's business activity.
|
|
3.
|
To maintain healthy capital ratios in order to support business activity and maximize shareholders value.
The Company is not under any minimal equity requirements nor is it required to attain a certain level of capital return.
|
|
a.
|
Expenses recognized in the financial statements:
|
|
The expense recognized in the financial statements for services received from employees is shown in the following table:
|
Year ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Equity-settled share-based payment plans
|
$ | 56 | $ | 118 | ||||
Total expense arising from share-based payment transactions
|
$ | 56 | $ | 118 |
|
The share-based payments that the Company granted to its employees are described below. There have been no modifications or cancellations to any of the employee stock options plans during 2010 or 2009.
|
|
The fair value of the options is estimated using a Black-Scholes options pricing model with the following weighted average assumptions:
|
2010
|
2009
|
|||||||
Dividend yield
|
0 | % | 0 | % | ||||
Expected volatility
|
0.5 | 0.5 | ||||||
Risk-free interest
|
0.55 | % | 1.14 | % | ||||
Expected life (in years)
|
2-3 | 2-3 |
|
The amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest.
|
|
All options granted during 2009 and 2010 were granted with exercise price equal or higher than the
market price on the date of grant.
Weighted average fair values and exercise price of options on dates of grant are as follows:
|
Equal market price
|
||||||||
2010
|
2009
|
|||||||
Weighted average exercise prices
|
$ | 0.59 | $ | 0.85 | ||||
Weighted average fair value on grant date
|
$ | 0.16 | $ | 0.14 |
|
b.
|
Stock Option Plans:
|
|
In December 1998, the Company's shareholders approved the non-employee director stock option plan (the "1998 Plan"). Each option granted under the 1998 Plan is vested immediately and expires after 10 years. Generally, the Company grants options under the plan with an exercise price equal to the market price of the underlying shares on the date of grant. An aggregate amount of not more than 750,000 ordinary shares is reserved for grants under the 1998 Plan. The original expiration date of the 1998 Plan pursuant to its terms was December 8, 2008 (10 years after its adoption). At the General Meeting of the Company's shareholders, held on January 31, 2008, the term of the 1998 Plan was extended and as a result it will expire on December 8, 2018, unless earlier terminated by the Board.
|
|
In August 2000, the Company's board of directors adopted the 2000 Stock Option Plan (the "2000 Plan" and, together with the 1998 Plan, the "Plans"). According to the 2000 Plan, 2,000,000 options may be granted to officers, directors, employees and consultants of the Company and its subsidiaries. The Options usually vest over a three or four-year period. The exercise price of the options under the 2000 Plan is determined to be not less than 80% of the fair market value of the Company's Ordinary shares at the time of grant, and they usually expire after 10 years from the date of grant. In June 2008 the Company's board of directors extended the 2000 Plan by an additional 10 years and the current expiration date of the 2000 Plan is August 31, 2018.
|
|
Following increases in shares reserved for issuance under the Company's 2000 Plan, the Company reserved for issuance 17,724,590 ordinary shares under such plan. As a result of a repurchase and cancellation of employee options following with the HP Transaction, the number of shares reserved for issuance under the 2000 was decreased by 9,893,550.
|
|
As of December 31, 2010, 165,863 options are outstanding and 499,970 Ordinary shares are available for future grants under the 1998 Plan and 1,321,493 options are outstanding and 5,950,535 Ordinary shares are available for future grants under the 2000 Plan. Options that are cancelled or forfeited become available for future grant.
|
|
During 2008, in connection with the HP Transaction (see Note 1b), the Board of Directors approved the acceleration of the vesting of all outstanding employee stock options following the Closing Date and the repurchase, subject to the fulfillment of regulatory requirements, of the then outstanding employee stock options to purchase approximately 9.9 million Ordinary shares of the Company. The repurchase was completed in July 2008.
|
|
Any options not repurchased (due to their relatively high exercise price) were canceled during 2008 pursuant to their terms and the terms of the 2000 Plan.
|
|
During 2008, 2009 and 2010, the Company granted to directors 43,333, 45,863 and 40,000 options, respectively.
|
|
During 2009 and 2010 the Company granted to one of its senior employee 1,321,043 and 450 options, respectively. There were no other option grants during 2009 and 2010.
|
|
As of December 31, 2010, the Company had approximately $ 20 of unrecognized compensation expense related to non-vested stock options awards, expected to be recognized over 2 years.
|
|
c.
|
Movement during the year:
|
|
The following table lists the number of share options, the weighted average exercise prices of share options during the current year:
|
2010
|
2009
|
|||||||||||||||
Number of options
|
Weighted average exercise price
|
Number of options
|
Weighted average exercise price
|
|||||||||||||
Outstanding at beginning of year
|
1,513,573 | $ | 0.83 | 146,667 | $ | 0.65 | ||||||||||
Granted during the year
|
40,450 | $ | 0.59 | 1,366,906 | $ | 0.85 | ||||||||||
Exercised during the year
|
- | - | - | - | ||||||||||||
Expired during the year
|
(66,667 | ) | - | - | - | |||||||||||
Outstanding at end of year
|
1,487,356 | $ | 0.83 | 1,513,573 | $ | 0.83 | ||||||||||
Exercisable at end of year
|
1,046,455 | $ | 0.81 | 632,747 | $ | 0.78 |
|
d.
|
The weighted average remaining contractual life for the share options outstanding as of December 31, 2010 was 7.59- 8.05 years (2009 – 3.88- 8.96 years).
|
|
e.
|
The range of exercise prices for share options outstanding as of December 31, 2010 was $0.31- $0.92 (2009 - $0.31- $1.86)).
|
|
a.
|
Financial income and expenses:
|
|
1.
|
Financial income:
|
Year ended
December 31,
|
||||||||
2010
|
2009
|
|||||||
Interest from bank deposits
|
$ | 611 | $ | 1,314 | ||||
Change in fair value of forward and swap contracts
|
869 | - | ||||||
Income from exchange rate differences, net
|
- | 52 | ||||||
Total financial income
|
$ | 1,480 | $ | 1,366 |
|
2.
|
Financial expenses:
|
Year ended
December 31,
|
||||||||
2010
|
2009
|
|||||||
Bank charges
|
$ | 27 | $ | 9 | ||||
Expense from exchange rate differences, net
|
53 | - | ||||||
Total financial expenses
|
$ | 80 | $ | 9 |
|
b.
|
General and administrative expenses:
|
Year ended
December 31,
|
||||||||
2010
|
2009
|
|||||||
Salaries and related compensation
|
$ | 754 | $ | 717 | ||||
Professional services
|
2,144 | 850 | ||||||
Other
|
313 | 364 | ||||||
$ | 3,211 | $ | 1,931 |
|
a.
|
Israeli taxation:
|
|
Corporate tax structure:
|
|
Taxable income of Israeli companies is subject to tax at the rate of 26% in 2009 and 25% in 2010. In July 2009, Israel's Parliament (the Knesset) passed the Economic Efficiency Law (Amended Legislation for Implementing the Economic Plan for 2009 and 2010), 2009, which prescribes, among other things, an additional gradual reduction in the Israeli corporate tax rate and real capital gains tax rate starting from 2011 to the following tax rates: 2011 - 24%, 2012 - 23%, 2013 - 22%, 2014 - 21%, 2015 - 20%, 2016 and thereafter - 18%.
|
|
b.
|
Provision for tax uncertainties:
|
|
As of December 31, 2010, the total amount of unrecognized tax benefits was $ 4,600 which, if recognized, would affect the effective tax rates in future periods. Included in that amount are cumulative accrued interest and penalties in respect to uncertain tax positions of $ 1,278 at December 31, 2010, of which $ 252 for interest and penalties expenses were recorded during 2010. Income tax was recognized in the amount of $ 296 with respect to a decrease in unrecognized tax benefits due to years of assessment that have reached their statute of limitation.
|
|
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|
2010
|
2009
|
|||||||
Beginning balance
|
$ | 4,644 | $ | 4,584 | ||||
Additions for prior year tax positions
|
252 | 60 | ||||||
Reduction for tax positions of prior year
|
(296 | ) | - | |||||
Ending balance
|
$ | 4,600 | $ | 4,644 |
|
Management performs a comprehensive review of its global tax positions on an annual basis and accrues amounts for contingent tax liabilities. Based on these reviews, the result of discussions and resolutions of matters with certain tax authorities and the closure of tax years subject to tax audit, reserves are adjusted as necessary. However, future results may include favorable or unfavorable adjustments to estimated tax liabilities in the period the assessments are determined or resolved. Additionally, the jurisdictions in which earnings and/or deductions are realized may differ from current expectations used as a basis for the above estimates. The Company does not expect that any tax audit would be completed within the next twelve months; therefore, the Company does not anticipate any significant impact on its unrecognized tax benefit balance in 2010. The Company has tax assessments that are considered to be final up to 2002.
|
|
c.
|
Theoretical tax:
Statutory rate applied to corporations in Israel and the actual tax expense, is as follows:
|
|
Year ended
December 31,
|
||||||||
2010
|
2009
|
|||||||
Loss before taxes on income from continuing operations
|
$ | 1,877 | $ | 574 | ||||
Statutory tax rate
|
25 | % | 26 | % | ||||
Theoretical tax benefit
|
$ | 469 | $ | 247 | ||||
Increase (decrease) in taxes:
|
||||||||
Loss subject to different tax rate
|
102 | (26 | ) | |||||
Foreign exchange differences
|
(189 | ) | 20 | |||||
Unrecognized tax losses, reserves and allowances
|
(338 | ) | (310 | ) | ||||
Actual tax benefit (expense)
|
$ | 44 | $ | ( 69 | ) |
|
d.
|
Taxes on income included in the statements of comprehensive income (loss):
|
Year ended
December 31,
|
||||||||
2010
|
2009
|
|||||||
Current:
|
||||||||
Domestic
|
$ | (100 | ) | $ | (45 | ) | ||
Foreign
|
144 | (24 | ) | |||||
$ | 44 | $ | (69 | ) |
|
e.
|
Carry forward tax losses:
|
|
As of December 31, 2010, Ellomay Capital Ltd. had available carry forward tax losses and deductions aggregating to approximately $ 27,000, which have no expiration date.
|
|
NUR Media Solutions had available carry forward losses as of December 31, 2010 aggregating to approximately $ 6,000, which have no expiration date.
|
|
f.
|
Deferred taxes:
Deferred taxes have not been recognized of the Company's and its subsidiaries' carryforward tax losses
|
|
The Company's management currently believes that since the Company has a history of losses it is more likely than not that the deferred tax regarding all losses carry forward will not be utilized in the foreseeable future. Therefore, deferred tax assets were not recorded in the years 2010 and 2009.
|
|
g.
|
Income (loss) before taxes on income from continuing operations consists of the following:
|
Year ended
December 31,
|
||||||||
2010
|
2009
|
|||||||
Domestic
|
$ | (173 | ) | $ | (574 | ) | ||
Foreign
|
(1,704 | ) | - | |||||
$ | (1,877 | ) | $ | (574 | ) |
|
The following table sets forth the computation of basic and diluted earnings per share:
|
Year ended
December 31,
|
||||||||
2010
|
2009
|
|||||||
Net income (loss)
|
$ | 5,202 | $ | (1,019 | ) | |||
Weighted average Ordinary shares outstanding
|
79,115,508 | 73,786,428 | ||||||
Dilutive effect:
|
||||||||
Employee stock options and warrants
|
9,926,988 | - | ||||||
Diluted weighted average Ordinary shares outstanding
|
89,042,496 | 73,786,428 | ||||||
Basic loss per share from continuing operations
|
$ | (0.02 | ) | $ | (0.01 | ) | ||
Diluted loss per share from continuing operations
|
$ | (0.02 | ) | $ | (0.01 | ) | ||
Basic earnings per share from discontinued operations
|
$ | 0.09 | $ | *) - | ||||
Diluted earnings per share from discontinued operations
|
$ | 0.08 | $ | *) - |
|
*)
|
Less than $0.01
|
|
The financial instruments presented at fair value are grouped into classes with similar characteristics using the following fair value hierarchy which is determined based on the source of input used in measuring fair value:
|
Level 1 - |
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
|
Level 2 - |
Inputs other than quoted prices included within Level 1 that are observable either directly or indirectly.
|
|
Level 3 - |
Inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).
|
|
Cash equivalents, short term and long term deposits and forward and swap contracts are classified within level 2. This is because the Company values their cash equivalents, short term and long term deposits and forward and swap contracts using alternative pricing sources and models utilizing market observable inputs.
|
|
Financial assets measured at fair value at December 31, 2010, 2009 and January 1, 2009:
|
Description
|
Level 2
|
|||||||||||
December 31,
|
January 1,
|
|||||||||||
2010
|
2009
|
2009
|
||||||||||
Cash equivalents
|
65,387 | 71,001 | 26,492 | |||||||||
Short term deposits
|
- | - | 49,000 | |||||||||
Long term deposits
|
400 | - | - | |||||||||
Fair value of derivatives
|
869 | - | - |
|
a.
|
General:
|
|
As discussed in Note 2, these consolidated financial statements are the first annual consolidated financial statements in accordance with IFRS. The accounting policies detailed in Note 2 were applied in preparation of the consolidated financial statements for the year ended December 31, 2010, the comparative data for year ended December 31, 2009 and the opening balances sheet as of January 1, 2009 (the "Transition Date").
|
NOTE 17:-
|
DISCLOSURE CONCERNING FIRST ANNUAL ADOPTION OF INTERNATIONAL ACCOUNTING STANDARDS (IFRS) (Cont.)
|
|
b.
|
Reconciliation from US GAAP to IFRS:
|
|
1.
|
IFRS 1 requires the presentation of a reconciliation in respect of the financial statement data that were published in the past and are included as comparative data in these consolidated financial statements, between the amounts of the said financial statement data presented in accordance with US GAAP, as were published in the past, and the amounts that are presented in these consolidated financial statements that are prepared in accordance with IFRS.
|
|
2.
|
Set forth below is a reconciliation note which presents the material effects of application of IFRS on the Company's consolidated balance sheet and equity as of January 1, 2009 and December 31, 2009, and on the Company's consolidated statement of comprehensive income (loss) for the year ended 2009.
|
|
Adjustments resulting from the transition to reporting in accordance with IFRS in the Company's consolidated balance sheet as of December 31, 2009.
|
US GAAP
|
Effect of transition to IFRS
|
IFRS
|
||||||||||
ASSETS
|
||||||||||||
CURRENT ASSETS:
|
||||||||||||
Cash and cash equivalents
|
$ | 75,280 | $ | - | $ | 75,280 | ||||||
Other receivables and prepaid expenses
|
409 | - | 409 | |||||||||
Assets attributed to discontinued operations
|
535 | - | 535 | |||||||||
76,224 | - | 76,224 | ||||||||||
NON-CURRENT ASSETS:
|
||||||||||||
Property, plant and equipment
|
141 | - | 141 | |||||||||
Other assets
|
26 | - | 26 | |||||||||
Assets attributed to discontinued operations
|
41 | - | 41 | |||||||||
208 | - | 208 | ||||||||||
Total
assets
|
$ | 76,432 | $ | - | $ | 76,432 |
NOTE 17:-
|
DISCLOSURE CONCERNING FIRST ANNUAL ADOPTION OF INTERNATIONAL ACCOUNTING STANDARDS (IFRS) (Cont.)
|
|
Adjustments resulting from the transition to reporting in accordance with IFRS in the Company's consolidated balance sheet as of December 31, 2009.
|
US GAAP
|
Effect of transition to IFRS
|
IFRS
|
||||||||||
LIABILITIES
|
||||||||||||
CURRENT LIABILITIES:
|
||||||||||||
Accounts payable
|
$ | 44 | $ | - | $ | 44 | ||||||
Other payables and accrued expenses
|
852 | - | 852 | |||||||||
Liabilities attributed to discontinued operations
|
154 | - | 154 | |||||||||
1,050 | - | 1,050 | ||||||||||
NON-CURRENT LIABILITIES
|
||||||||||||
Other long-term liabilities
|
4,658 | - | 4,658 | |||||||||
Liabilities attributed to discontinued operations
|
696 | - | 696 | |||||||||
5,354 | - | 5,354 | ||||||||||
Total
liabilities
|
6,404 | - | 6,404 | |||||||||
EQUITY:
|
||||||||||||
Share capital
|
16,820 | - | 16,820 | |||||||||
Share premium
|
72,358 | 49 | 72,407 | |||||||||
Accumulated deficit
|
(19,150 | ) | (49 | ) | (19,199 | ) | ||||||
Total
equity
|
70,028 | - | 70,028 | |||||||||
Total liabilities and equity
|
$ | 76,432 | $ | - | $ | 76,432 |
NOTE 17:-
|
DISCLOSURE CONCERNING FIRST ANNUAL ADOPTION OF INTERNATIONAL ACCOUNTING STANDARDS (IFRS) (Cont.)
|
|
Adjustments resulting from the transition to reporting in accordance with IFRS in the Company's consolidated statements of comprehensive income for the year ended December, 31, 2009:
|
US GAAP
|
Effect of transition to IFRS
|
IFRS
|
||||||||||
General and administrative expenses
|
$ | 1,882 | $ | 49 | $ | 1,931 | ||||||
Operating loss
|
(1,882 | ) | (49 | ) | (1,931 | ) | ||||||
Financial income, net
|
1,357 | - | 1,357 | |||||||||
Loss before taxes on income
|
(525 | ) | (49 | ) | (574 | ) | ||||||
Taxes on income
|
(69 | ) | - | (69 | ) | |||||||
Loss from continuing operations
|
(594 | ) | (49 | ) | (643 | ) | ||||||
loss from discontinued operations, net
|
(376 | ) | - | (376 | ) | |||||||
Net loss
|
$ | (970 | ) | $ | (49 | ) | $ | (1,019 | ) |
|
Adjustments resulting from the transition to reporting in accordance with IFRS in the Company's consolidated balance sheet as of January 1, 2009.
|
US GAAP
|
Effect of transition to IFRS
|
IFRS
|
||||||||||
ASSETS
|
||||||||||||
CURRENT ASSETS:
|
||||||||||||
Cash and cash equivalents
|
$ | 26,979 | $ | - | $ | 26,979 | ||||||
Short term deposits
|
49,000 | - | 49,000 | |||||||||
Other receivables and prepaid expenses
|
932 | - | 932 | |||||||||
Assets attributed to discontinued operations
|
1,272 | - | 1,272 | |||||||||
78,183 | - | 78,183 | ||||||||||
NON-CURRENT ASSETS:
|
||||||||||||
Other assets
|
8 | - | 8 | |||||||||
Assets attributed to discontinued operations
|
41 | - | 41 | |||||||||
49 | - | 49 | ||||||||||
Total
assets
|
$ | 78,232 | $ | - | $ | 78,232 |
NOTE 17:-
|
DISCLOSURE CONCERNING FIRST ANNUAL ADOPTION OF INTERNATIONAL ACCOUNTING STANDARDS (IFRS) (Cont.)
|
|
Adjustments resulting from the transition to reporting in accordance with IFRS in the Company's consolidated balance sheet as of January 1, 2009.
|
US GAAP
|
Effect of transition to IFRS
|
IFRS
|
||||||||||
LIABILITIES
|
||||||||||||
CURRENT LIABILITIES:
|
||||||||||||
Accounts payable
|
$ | 37 | $ | - | $ | 37 | ||||||
Other payables and accrued expenses
|
1,211 | - | 1,211 | |||||||||
Liabilities attributed to discontinued operations
|
763 | - | 763 | |||||||||
2,011 | - | 2,011 | ||||||||||
NON-CURRENT LIABILITIES
|
||||||||||||
Other long-term liabilities
|
4,598 | - | 4,598 | |||||||||
Liabilities attributed to discontinued operation
|
694 | - | 694 | |||||||||
5,292 | - | 5,292 | ||||||||||
Total
liabilities
|
7,303 | - | 7,303 | |||||||||
EQUITY:
|
||||||||||||
Share capital
|
16,820 | - | 16,820 | |||||||||
Share premium
|
72,289 | - | 72,289 | |||||||||
Accumulated deficit
|
(18,180 | ) | - | (18,180 | ) | |||||||
Total
equity
|
70,929 | - | 70,929 | |||||||||
Total liabilities and equity
|
$ | 78,232 | $ | - | $ | 78,232 |
|
The abovementioned adjustments result mainly from the differences between US GAAP and IFRS as detailed below:
|
|
Share-based payments
|
|
Under US GAAP, in accordance with ASC 718 (formerly SFAS 123R) "Compensation- Stock Compensation", the Company recognized, pursuant to transition provisions set forth therein, compensation cost for awards granted to employees after January 1, 2006, and compensation cost for the unvested portion of awards granted prior to January 1, 2006 that are outstanding as of that date.
|
|
According to ASC 718, the Company used the straight-line method to account for awards that vest in installments. According to IFRS 2, the accelerated method must be used to account for such awards. Therefore, the impact of the transition from US GAAP to reporting in accordance with IFRS, resulted in recording an additional expense in the amount of $49 for the year ended December 31, 2009 and an increase to the share premium as of December 31, 2009.
|
|
Employee benefits
|
|
Under IFRS acturial gains and losses should have been recognized as other comprehensive income (loss) in the period in which they have occurred. Due to immateriality, no adjustment was recorded by the Company.
|
|
a.
|
The Dori Investment Agreement (also see Note 1e) was finalized on January 27, 2011 whereby Ellomay Energy was issued shares representing 40% of Dori Energy's issued and outstanding share capital on a fully diluted basis.
|
|
b.
|
On February 17, 2011 one of the Company's subsidiaries entered into a project finance facilities credit agreement (the "Finance Agreement") with Centrobanca- Banca di Credito Finanziario e Mobiliare S.p.A ("Centrobanca") to receive lines of credit in the aggregate amount of Euro 4,650,000 (approximately $6,289)
|
|
c.
|
On February 22, 2011 (the "Effective Date") the Company entered into agreements to receive participation interests in four exploration licenses (the "Licenses") in Israel. The consideration paid in connection with the receipt of the participating interests is expected to be an aggregate of $ 710 as reimbursement for past expenditures incurred by the transferors of the participating interests in connection with operations under the Licenses until the Effective Date.
|
|
d.
|
On March 14, 2011, the Company purchased the shares of an Italian Company that owns a fully constructed photovoltaic plant of 994.43 KWp with fixed technology located in province of Lecce, municipality of Galatina, Puglia region, Italy ("Galatina") and entered into an EPC Contract in connection with such plant, for an aggregate consideration of approximately Euro 3,900,000 (approximately $ 5,164) (including the consideration for the shares of the Italian Company).
|
|
e.
|
On March 25, 2011, the Company purchased the shares of an additional Italian Company that holds the permits and plans, and entered into an EPC Contract for the construction of a photovoltaic plant of 3,015 KWp with single tracker technology located in the province of Bari, municipality of Corato, Puglia region Italy ("Corato") for an aggregate consideration of approximately Euro 11,800,000 (approximately $ 15,875) (including the consideration for the shares of the Italian Company).
|
Number
|
Description
|
1.1
|
Memorandum of Association of the Registrant (translated from Hebrew)(1)*
|
1.2
|
Second Amended and Restated Articles of the Registrant(2)
|
2.1
|
Specimen Certificate for ordinary shares(3)
|
2.2
|
Form of Subscription Agreement, between the Registrant and certain investors, executed in connection with a private placement completed in January and February 2007(4)
|
2.3
|
Form of Warrant Agreement, between the Registrant and certain investors, executed in connection with a private placement completed in January and February 2007
(4)
|
4.1
|
1998 Non-Employee Directors Share Option Plan(4)
|
4.2
|
2000 Stock Option Plan(4)
|
4.3
|
Form of Indemnification Agreement and Form of Exemption Letter between the Registrant and its officers and directors(7)
|
4.4
|
Asset Purchase Agreement, dated December 9, 2007, between the Registrant and Hewlett-Packard Company(8)
|
4.5
|
Management Services Agreement, by and among the Registrant, Kanir Joint Investments (2005) Limited Partnership and Meisaf Blue & White Holdings Ltd., effective as of March 31, 2008(9)
|
4.6
|
Form of Offer to Repurchase Employee Stock Options, dated April 2, 2008(10)
|
4.7
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic System in Cingoli, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 4, 2010 (portions translated from Italian)(11)*
|
4.8
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic System in Senigallia, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 4, 2010 (portions translated from Italian)(11)*
|
4.9
|
Side Agreement, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 5, 2010(12)
|
4.10
|
Giaché Building Right Agreement (summary of Italian version)*
|
4.11
|
Massaccesi Building Right Agreement (summary of Italian version)*
|
4.12
|
Settlement Agreement and Release, dated July 27, 2010, between Ellomay Capital Limited and Hewlett-Packard Company
|
4.13
|
Troia 8 Building Right Agreement (summary of Italian version)*
|
4.14
|
Troia 9 Building Right Agreement (summary of Italian version)*
|
4.15
|
Investment Agreement, among U. Dori Group Ltd., U. Dori Energy Infrastructures Ltd. and Ellomay Clean Energy Ltd. , dated November 25, 2010 (summary of Hebrew version)*
|
4.16
|
Shareholders Agreement, among U. Dori Group Ltd., Ellomay Clean Energy Ltd. and U. Dori Energy Infrastructures Ltd., dated November 25, 2010 (summary of Hebrew version)*
|
4.17
|
Agreement, between U. Dori Energy Infrastructures Ltd. and Israel Discount Bank Ltd., dated January 26, 2011 (summary of Hebrew version)*
|
Number
|
Description
|
4.18
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic Plant, between Urbe Techno S.r.l. and Pedale S.r.l., dated March 25, 2011 (portions translated or summarized from Italian)*
|
8
|
List of Subsidiaries of the Registrant
|
11
|
Code of Ethics(13)
|
12.1
|
Certification of Principal Executive Officer required by Rule 13a-14(a) and Rule 15d-14(a) (Section 302 Certification)
|
12.2
|
Certification of Principal Financial Officer required by Rule 13a-14(a) and Rule 15d-14(a) (Section 302 Certification)
|
13
|
Certification of Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(b) and Rule 15d-14(b) (Section 906 Certification)
|
14
|
Consent of Kost Forer Gabbay & Kasierer
|
_____________________________________
|
*
|
The original language version is on file with the Registrant and is available upon request.
|
(1)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2007 and incorporated by reference herein.
|
(2)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2008 and incorporated by reference herein.
|
(3)
|
Previously filed with the Registrant’s Form F-1 (File No. 33-93160) and incorporated by reference herein.
|
(4)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2006 and incorporated by reference herein.
|
(5)
|
Previously filed with the Registrant’s Form F-1 (File No. 333-66103) and incorporated by reference herein.
|
(6)
|
Previously filed with the Registrant’s Form 6-K dated October 14, 1997 and incorporated by reference herein.
|
(7)
|
Previously filed with the Registrant’s Form 6-K dated November 24, 2009 and incorporated by reference herein.
|
(8)
|
Previously filed with the Registrant’s Form 6-K dated January 3, 2008 and incorporated by reference herein.
|
(9)
|
Previously filed with the Registrant’s Form 6-K dated December 1, 2008 and incorporated by reference herein.
|
(10)
|
Previously filed with the Registrant’s Form CB dated April 3, 2008 and incorporated by reference herein.
|
(11)
|
Previously filed with Amendment No. 2 to the Registrant’s Form 20-F for the year ended December 31, 2009 and incorporated by reference herein.
|
(12)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2009 and incorporated by reference herein.
|
(13)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2003 and incorporated by reference herein.
|
1 Execution date
|
July 14, 2010
|
2. Grantors
|
Mr. Claudio Giaché
Mr. Franco Trillini
|
3 Grantee
|
Ellomay PV Two S.r.l.
|
4. Land plot identification
|
Municipality of Filottrano (AN), sheet 15, parcels 283, 288, 289, 290, 291, 292, 84, 85, 86, 87, 294 size:
3.81.02 hectares.
|
5. Consideration
|
The Grantee shall pay the Grantors an annual rent equal to Euro
2,500.00 per hectare
(i.e. Euro 9,525.00) for the entire duration of the agreement ("
Rent
"). The Rent shall be paid as follows:
Euro 6,607,75 each year to Mr. Giaché for the parcels owned by him;
Euro 2,917.75 each year to Mr. Trillini for the parcels owned by him.
The first instalment of Euro 4,763.00 (Euro 2,204.00 to Mr. Giaché and Euro 1,459.00 to Mr. Trillini) for the period from July 14 to December 31, 2010, shall be paid by wire transfer within 10 days from the execution of the building right agreement.
The following annual instalment of the Rent shall be paid by wire transfer by December 31 of each year as an advance payment for the following year.
An indemnity equivalent to
Euro 40,006.00
shall be paid on execution of the building right agreement as compensation for damages caused by the PV Plant to the Land ("
Indemnity
"). The Indemnity was split as follows:
Euro 27,752.00 to Mr. Giaché;
Euro 12,254.00 to Mr. Trillini.
|
6. Consideration adjustment
|
The annual Rent shall be adjusted each year by 100% of the previous year inflation rate as resulting in national official rates.
|
7. Duration
|
21 years
(until July 14, 2031)
|
8. Extension and Renewal
|
6 (six) months before the expiry date, the Grantee may extend the duration of the building right agreement for
further 4 (four) years
. No more extensions of the building right are foreseen.
The rent for the extension shall be equal to the last year’s Rent increased by 15%, and to be re-valuated according to the annual variation of the inflation rate as resulting in national official rates.
|
9. Withdrawal/Termination (Grantee)
|
The Grantee shall be entitled to withdraw at anytime from the agreement by sending a 90 day prior written notice to the Grantors. In such event the Grantee shall pay to the Grantors only the rent for the duration of the notice.
The Grantee shall be entitled to terminate the building right agreement with immediate effect in the case that the Grantors, in breach of their obligations foreseen by the agreement, carry out building works or any activity which might prejudice permanently the PV Plant’s power and efficiency.
|
1 Execution date
|
July 7, 2010
|
2. Grantor
|
Mr. Nazzareno Massaccesi
|
3 Grantee
|
Ellomay PV Two S.r.l.
|
4. Land plot identification
|
Municipality of Arcevia (PU), sheet 24, parcel 254, size:
3.61.91 hectares.
|
5. Consideration
|
The Grantee shall pay the Grantor an annual rent equal to Euro
2,800.00 per hectare
(i.e. Euro 10,133.48) for the entire duration of the agreement ("
Rent
").
The first instalment of Euro 5,066.74 for the period from July 7 to December 31, 2010, shall be paid by wire transfer within 10 days from the execution of the building right agreement.
The following annual instalment of the Rent shall be paid by wire transfer by December 31 of each year as an advance payment for the following year.
An indemnity equivalent to
Euro 38,000.55
shall be paid on execution of the building right agreement as compensation for damages caused by the PV Plant to the Land.
|
11. Easements
|
The Grantor agrees to grant and constitute all the easements necessary for the PV Plant to operate and to be constructed on any neighbouring lands owned by the Grantor.
|
12. Guarantee and Deposit
|
In order to guarantee the PV Plant’s removal or any other works performed on the Land, within 5 days from the date of commencement of works the Grantee shall issue an insurance guarantee (
polizza fideiussoria
) whose amount shall comply with the requirements set out by the Municipality. No additional removal guarantee is to be issued in favour of the Grantor.
In order to guarantee payment of the Rent, the Grantee shall deposit, not later than December 29, 2010, Euro 10,133.48 (“
Deposit
”), which will be withheld by Grantor in the event of failure by the Grantee to pay the annual rent, without prejudice to the Grantee’s obligation to restore the Deposit in such circumstance.
If not used throughout the term of the agreement, such amount shall be deducted from the rent to be paid for the period from January 1, 2030 to December 31, 2030, save for the Grantee’s obligation to pay the Rent relating to the 1.1.2031 – 7.7.2031 period.
|
13. PV Plant removal
|
Within 6 months following the expiry of the building right, the Grantee shall remove the PV Plant at its own expenses.
The ownership of the PV Plant shall remain with the Grantee.
|
14. Assignment
|
The Grantee shall be entitled, at any time whatsoever, to assign the building right
agreement to third parties and/or the rights and obligations arising thereof, sending the relevant notice to Grantors.
Grantor shall be entitled to assign the building right agreement to third parties and/or rights and obligations arising thereof, by a (at least) 10 day prior notice, provided that the third party undertakes to comply with the agreement.
|
15. Governing Law and Competent Court
|
Italian law applies. Exclusive jurisdiction of the court of Ancona.
|
(1)
|
Ellomay Capital Limited (formerly known as Nur Macroprinters Ltd.), whose registered office is 9 Rothschild Blvd., Tel Aviv 66881, Israel (“
Ellomay
”); and
|
(2)
|
Hewlett-Packard Company, whose principal business office is 3000 Hanover Street, Mail Stop 1032, Palo Alto, CA 94304, USA (“
HP
”).
|
a)
|
WHEREAS
pursuant to an Asset Purchase Agreement dated December 9, 2007 between Ellomay and HP (and as amended by the First Amendment to the Asset Purchase Agreement dated February 29, 2008) (together, the “
APA
”), HP acquired certain assets and liabilities from Ellomay (the “
Transaction
”);
|
b)
|
WHEREAS
under the terms of the APA, an Escrow Fund was set up;
|
c)
|
WHEREAS
pursuant to clause 8.2 (f) of the APA, in the absence of any claims for indemnification by HP prior to the Survival Date, USD$9.5 million (plus accrued interest) was due to be released to Ellomay from the Escrow Fund on August 29, 2009 and the balance of $5 million (plus accrued interest) at the end of the Escrow Period;
|
d)
|
WHEREAS
on August 24 and August 28, 2009, HP requested that (i) the Escrow Agent release to it an amount of USD$8,094,392 out of the Escrow Fund (the "
Initial Amount
"), such request attached hereto as Appendix 1; and (ii) the Escrow Agent release to it an amount of €2,415,460 out of the Escrow Fund (the "
Second Amount
"), such request attached hereto as Appendix 2;
|
WHEREAS
on October 21, 2009, Ellomay responded and put forth its position that HP's indemnification claims for the Initial Amount and the Second Amount should be rejected, except for the amount of USD$312,395 (the "
Released Amount
") which Ellomay authorized the Escrow Agent to release to HP (the Released Amount was transferred to HP by the Escrow Agent on October 22, 2009), such response attached hereto as Appendix 3;
|
f)
|
WHEREAS
on December 8, 2009, Ellomay notified HP and the Escrow Agent that of the Released Amount, Ellomay believed HP was not entitled to indemnification with respect to an amount of USD$172,927, such notification attached hereto as Appendix 4;
|
g)
|
WHEREAS
on January 19, 2010, HP sent an additional Officer's Certificate to the Escrow Agent requesting the release of USD$2,786,056 (the "
Third Amount
"), attached hereto as Appendix 5 (the First, Second and Third Amounts are referred to collectively as the "
Claims
"); on January 21, Ellomay responded to the Escrow Agent and to HP with respect to the aforementioned letter, contending HP was not entitled to indemnification with respect to the Third Amount claim; Ellomay's letters to HP and the Escrow Agent are attached hereto as Appendices 6 and 7;
|
h)
|
WHEREAS
in addition to the above, the parties have been discussing and corresponding between them concerning other matters as set out further in Clause 2 of this Agreement (the “
Other Matters
”); and
|
i)
|
WHEREAS
, the Parties understand and accept that resolving any and all the above issues between them likely would involve costly litigation and arbitration proceedings and that further new matters may arise in the future which may then lead to further disputes between the Parties. Therefore, the Parties met and discussed the above Claims and Other Matters and have come to the conclusion that they wish to fully, finally and irrevocably settle and resolve the Claims and Other Matters and any and all outstanding matters and waive, discharge and relieve one another from any responsibility or liability concerning any and all matters which might arise between them in connection with the Transaction, whether known or unknown at the time of this Agreement, all pursuant to the terms and conditions set forth herein.
|
1.
|
SETTLEMENT: RELEASE OF ESCROW FUNDS
|
1.1
|
In consideration for the full, final and irrevocable mutual release as provided pursuant to Clause 3 herein, the Parties agree to authorize the Escrow Agent to allocate the Escrow Amount between the parties as follows:
|
|
(a)
|
An aggregate amount of US$7,400,000 (seven million four hundred thousand US dollars) together with accrued interest thereon shall be allocated to HP and an amount of US$7,100,000 (seven million one hundred thousand US dollars) together with accrued interest thereon, shall be allocated to Ellomay, each amount adjusted in accordance with Clause 1.1 (b) (i) and (ii) below.
|
|
(b)
|
The Escrow Agent shall therefore be authorized and instructed to release the remaining Escrow Fund in accordance with the Notice attached in Appendix 8, as follows:
|
|
(i)
|
an amount of US$7,077,411.94 (representing the amount of US$7,400,000 less the amount of US$312,395 already released to HP, plus accrued interest of US$98,972.94, and less the amount of US$109,166 (being 50% of the amount due to the Employee Severance Funds)) shall be released and transferred to HP; and
|
|
(ii)
|
an amount of US$7,304,126.53 (representing the amount of US$7,100,000 plus accrued interest of US$94,960.53, plus the amount of US$109,166 (being 50% of the amount due to the Employee Severance Funds) shall be released and transferred to Ellomay.
|
1.2
|
The parties shall execute and send a copy of the Notice substantially in the form set out in Appendix 8 to the Escrow Agent concurrently with the signing of this Agreement.
|
1.3
|
Notwithstanding the fact that the Escrow Amount to be released to HP pursuant to Clause 1.1 above is in settlement of the Claims and Other Matters as a whole, the amount released to HP shall be allocated between the Claims and Other Matters as set out in Appendix 9. It is hereby clarified that the allocation of the amounts as set out in Appendix 9 shall not bind Ellomay or serve as evidence in any proceeding between the parties concerning this Agreement or the Transaction.
|
2.
|
OTHER
MATTERS
|
2.2
|
Continuing Business Employees Severance Funds
|
|
(i)
|
Concurrently with the signing of this Agreement, and in accordance with the instructions of the ITA, Ellomay shall deposit the amount of NIS 635,303 into the Continuing Business Employees severance funds resulting in the severance funds being fully funded as of the date of Closing; and
|
|
(ii)
|
Concurrently with the signing of this Agreement Ellomay shall reimburse HP for the amount of NIS 205,061 which HP deposited into the Continuing Business Employees severance funds regarding the Continuing Business Employees whose employment was terminated prior to this Agreement.
|
2.3
|
Litigation involving the Acquired Subsidiaries
|
2.3.1
|
Ellomay confirms, warrants and represents that:
|
(a)
|
to the best of its knowledge, except as set out below, all litigation and enforcement proceedings involving Acquired Subsidiaries that were ongoing at the date of the closing of the APA and that pursuant to its terms were to be managed by Ellomay have been settled or have ended and there exist no outstanding obligations or liabilities in connection with any such proceedings and that, in any event, Ellomay
shall be solely responsible for the litigation proceedings of the Acquired Subsidiaries existing prior to Closing and the results of such litigation shall be for the benefit or liability of Ellomay, as the case may be. Ellomay undertakes to bear all costs and expenses relating to such proceedings and shall fully indemnify and hold HP harmless in the event that HP incurs any liability in connection with such proceedings; and
|
|
(b)
|
as of the date of this Agreement, the Atlantica case conducted in the Brussels courts (details of which are set forth in Appendix 12 (the “
Atlantica Case
”), which is Ellomay's responsibility pursuant to clause (a) above, is the only litigation proceeding that existed prior to Closing that is still in pending court proceedings, and Ellomay undertakes to use commercially reasonable endeavours to conclude the Atlantica Case as soon as reasonably practicable and, once concluded, shall notify HP in writing (including any final court judgement or settlement agreement (as the case may be)); and
|
|
(c)
|
as of the date of this Agreement, Ellomay confirms that it has ceased and it shall not resume the enforcement proceedings Ellomay was conducting on behalf of Nur Europe in the Dataware (Farazis Bros partnership) case. All costs, expenses and liabilities relating to any proceedings relating to the Dataware case shall be borne by Ellomay and Ellomay shall fully indemnify and hold HP harmless in this respect.
|
2.3.2
|
HP undertakes to promptly transfer to Ellomay an amount equal in value to any amount received by HP or any of its affiliates from a party to and in connection with the Atlantica Case and the Image Press settlement, whether such amounts shall be received prior to the signing of this Agreement or after the signing of this Agreement.
|
2.3.3
|
Ellomay confirms and represents that, except as set out above, as from the date of this Agreement, it and its affiliated companies shall refrain from acting on behalf of Nur Europe or any other of the Acquired Subsidiaries.
|
2.4
|
Belgian Government Grants
|
3.
|
RELEASE
|
5.
|
COSTS
|
6.
|
WARRANTIES AND AUTHORITY
|
6.1
|
Each party warrants and represents that it has not sold, transferred, assigned or otherwise disposed of its interest in the Released Claims or in the APA.
|
6.2
|
Each party warrants and represents to the other with respect to itself that it has the full right, power and authority to execute, deliver and perform this Agreement and upon execution and delivery thereof shall constitute the valid and binding obligations of each party enforceable against it in accordance with its terms.
|
7.
|
NO ADMISSION
|
9.
|
ENTIRE AGREEMENT
|
9.1
|
This Agreement constitutes the entire understanding and agreement between the parties in relation to the subject matter of this Agreement and shall be binding upon and inure to the benefit of the executors, administrators, personal representatives, heirs, successors and assigns of each. This Agreement supersedes all other agreements of the parties relating to the subject matter hereof.
|
9.2
|
Each party acknowledges that it has not entered into this Agreement in reliance wholly or partly on any representation or warranty made by or on behalf of the other party (whether orally or in writing) other than as expressly set out in this Agreement.
|
10.1
|
The terms of this Agreement, and the substance of all negotiations in connection with it, are confidential to the parties and their advisers, who shall not disclose them to, or otherwise communicate them to, any third party other than:
|
|
(a)
|
to the parties' respective auditors, insurers, lawyers and the Escrow Agent on terms which preserve confidentiality;
|
|
(b)
|
as required by either party to disclose due to its status as a public company, provided that each party shall inform and consult with the other regarding the text of such disclosure;
|
|
(c)
|
the announcement that Ellomay shall make to the market in its immediate report following the signing of this Agreement, the text of which is to be as set forth in Appendix 13;
|
|
(d)
|
pursuant to an order of a court of competent jurisdiction, or pursuant to any proper order or demand made by any competent authority or body where they are under a legal or regulatory obligation to make such a disclosure or as otherwise required to comply with the requirements of the law, regulation or rules of applicable stock exchange; and
|
|
(e)
|
as far as necessary to implement and enforce any of the terms of this Agreement.
|
10.2
|
HP confirms that it has been informed by Ellomay that Ellomay has certain duties and responsibilities to disclose information with respect to this Agreement (including under certain circumstances filing the Agreement itself), among other things in an immediate report and in its financial reports (and 20-F) which are submitted to the relevant authorities and published to the public, and the Parties shall keep this Agreement and the details thereof confidential until such information has been released by Ellomay or as otherwise agreed to by Ellomay.
|
12.
|
CO-OPERATION
|
14.
|
COUNTERPARTS
|
15.
|
NOTICES
|
ELLOMAY CAPITAL LIMITED
By:
/s/ Ran Fridrich
.
Name:
Title:
|
|
|
HEWLETT-PACKARD COMPANY
By:
/s/ Paul T. Porrini
Name: Paul T. Porrini
Title: Vice President, Deputy General
Counsel and Assistant Secretary
|
1
|
This Agreement is attached as Annex 1 to the Troia 8 EPC Contract.
|
2
|
The original language version is on file with the Registrant and is available upon request.
|
3
|
These developments are not reflected in the building right agreement that appears as Annex 1 to the Toria 8 EPC Contract as such EPC Contract was executed prior to the consummation of the agreement with Leasint S.p.A.
|
1
|
This Agreement is attached as Annex 1 to the Troia 9 EPC Contract.
|
|
(1)
|
special majorities that are required for the passage of the following resolutions in the board and\or general meeting of Dori Energy, or a subsidiary thereof – (a) voluntary dissolution of Dori Energy, (b) material changes in the business of Dori Energy, (c) issuance of shares and\or any instrument convertible into shares of Dori Energy other than in accordance with the Investment Agreement entered into among Dori, Dori Energy and Ellomay Energy on November 25, 2010, (d) sale, transfer and\or termination of the majority of Dori Energy's assets or a material change with respect to such assets, (e) the imposition of liens and\or charges on the assets and\or rights of Dori Energy, other than in accordance with the credit facility agreement among Dorad and a consortium lead by Bank Hapoalim Ltd. (the “Financing Agreement”), (f) the consolidation, merger or reorganization of Dori Energy, (g) the entry into an agreement the value or impact or potential value or impact of which exceeds, in the aggregate, 1,000,000 USD, (h) material changes in the Financing Agreement and\or the shareholders agreement of Dorad, (i) transactions of Dori Energy with related parties, (j) the approval of Dori Energy's annual budget and business plan, (k) the performance of any distributions by Dori Energy, (l), the appointment and employment terms of Dori Energy's officers, and (m) the appointment and employment terms of Dori Energy's auditors;
|
|
(2)
|
a separation mechanism between Dori and Ellomay Energy;
|
|
(3)
|
the purchase, by Dori Energy, of additional shares of Dorad; and
|
|
(4)
|
dividend distribution policies in Dori Energy.
|
(A)
|
The Principal is a company operating in the field of development and operational management of photovoltaic systems.
|
(B)
|
The Contractor is a company operating in the construction of photovoltaic plants and has the expertise to perform the Works, as defined below, in accordance with the terms and conditions hereof.
|
(C)
|
The Principal intends to proceed with the construction and operation of a photovoltaic plant located in the province of Bari, Municipality of Corato, made up of polycrystalline modules, with trackers technology and having a capacity equivalent to 3,015 MWp (the "
Plant
");
|
(D)
|
The Principal holds
inter alia
the following Applicable Permits in relation to the Plant:
|
|
(i)
|
an AU, as defined below, published on 12 August 2010 on the Puglia Regional Bulletin;
|
|
(ii)
|
a STMD, as defined below, issued on 8 February 2010 (goal no. 10484).
|
(E)
|
The Principal has the Land Rights, as defined below, over the Area, set-up by entering into the Land Rights agreement enclosed hereto as
Annex 1
.
|
(F)
|
In order to build the Plant, the Principal needs a partner with high expertise and standing in the construction of photovoltaic plants for the “turn key” planning, construction, operation and connection of the Plant, as defined below, and the Contractor is a leading company operating,
inter alia
, in said field.
|
(G)
|
The Principal is planning to appoint a financial institution (the “
Financing Entity
”), which will grant funding to the Principal in relation to the project on a leasing or project finance basis (the “
Financing
“).
|
(H)
|
The Contractor has confirmed the feasibility and economic convenience of the solution for the connection proposed by ENEL with the STMD referred to under point D (ii) above.
|
(I)
|
The Principal is willing to entrust the Contractor also with the operation and maintenance of the Plant through execution of an
ad hoc
operation and maintenance agreement (the “
O&M Agreement
”), which shall be executed as a condition for Payment Milestone 1, as defined below.
|
1.1
|
Recitals and annexes to this contract (hereinafter known as the “
Contract
” or “
EPC Contract
”) shall represent an integral and substantial part of the same.
|
1.2
|
This Contract replaces and fully supersedes any previous agreement entered into between the Parties, either written or oral, on the matters outlined below.
|
2.1
|
In addition to any other words and expressions defined in this Contract, the terms used in this Contract, where they start with a capital letter, shall have the following meanings:
|
·
|
AEEG
: means the Electrical Energy and Gas Authority incorporated pursuant to the Law No. 481 dated 14
th
November 1995;
|
·
|
Applicable Law
: means each and every law, regulation, measure, ruling, decree (including the Decree) or deed having a binding nature in Italy and issued by every state body and judicial and/or administrative authority, which is in force on the date in which this Contract is entered into or which comes into force thereafter;
|
·
|
Applicable Permits
: means each and every license, authorization, certification, filing, recording, permit,
affidavit
(including the
denuncia di inizio attività,
the
autorizzazione unica
or
permesso di costruire
) or other approval with and/or of any competent authorities that is required by Applicable Law for the construction and connection to the grid (including the
comunicazione conclusione iter autorizzativo
issued by Enel) and admission to the Q-2 Incentives including, without limitation, those required by Applicable Law in zoning, building, environmental, landscaping, planning and/or archaeological matters;
|
·
|
Area
: means the area in the plan referred to in
Annex 2
to this Contract, in which the Plant shall be built;
|
·
|
Autorizzazione Unica
or AU:
means the
autorizzazione unica,
as defined and regulated in Legislative Decree no. 387 of 2003;
|
·
|
Bank Bond:
means the autonomous and first demand renewable guarantee, consistent with the form set forth in
Annex
5/A
, whose maximum amount shall be equal to 10% (ten per cent) of the BoS Consideration, to be issued by a primary and leading bank in favour of the Principal, in compliance with Article 4.2, as guarantee for all the obligations undertaken by the Contractor under this Contract;
|
·
|
BoS Consideration:
means an amount corresponding to the balance between 3,900,000 (three million nine hundred thousand) per Mwp and the price of the panels to be used in relation to the Plant, plus VAT;
|
·
|
Civil Code
: means the Italian Civil Code, introduced with the Royal Decree No. 2, dated 16
th
March 1942, and all subsequent amendments and/or integrations thereto;
|
·
|
Commencement of Operation
: means the commencement of operation (i.e.
entrata in esercizio
) of the Plant pursuant to Article 2(g) of the Ministerial Decree 19 February 2007, and subsequent amendments and integrations;
|
·
|
Communication of the Executive Project’s Approval
: with reference to the Plant, shall have the meaning set out in Article 8.3 below;
|
·
|
Completion Date:
shall have the meaning indicated in Article 9.1;
|
·
|
Confidential Information
: means the information, data, notes, records, agreements, documents, in whatsoever form drawn up, provided by one of the Parties to the other or, in any case, obtained from one of the Parties and connected with the execution of this Contract and, in particular, the Technical Specifications, including, without any limits whatsoever, any technical and contractual documentation inherent in the Works and their object, as well as any document of a commercial or financial nature, data relating to prices and technical knowledge, models, formulas, industrial processes, records, photographs, drawings, contractual conditions, software, programmes and models and any other intellectual property concerning the Party making the communication or, in any case, to whom said data refer, with the exception of any information already made available to the public;
|
·
|
Consideration
: means the all inclusive, invariable, sum that the Principal shall pay to the Contractor to perform the Works with respect to the Plant as per Article 4.1 of this Contract, being it understood that the Consideration shall include
inter alia
procurement of the Land Rights;
|
·
|
Construction Health and Safety Coordinator
(coordinatore in materia di sicurezza e salute durante la realizzazione)
: means the individual appointed by the Principal pursuant to Article 7 below, who has been entrusted with the duties related to this role pursuant to Article 92 of the Legislative Decree No. 81/2008 and subsequent amendments and integrations;
|
·
|
Contract
: means this Contract, including all the Annexes and all amendments hereto as mutually agreed by the Parties;
|
·
|
Delay Liquidated Damages
means the damages referred to in Article 9.3;
|
·
|
Decree
:
means the Ministerial Decree dated 19 February 2007 no. 25336 issued by the Economic Development Minister and whose object is the “Criteria and methods to encourage the production of electrical energy by means of solar photovoltaic conversion in implementation of Article 7 of the Legislative Decree No. 387, dated 29
th
December 2003” (
Criteri e modalità per incentivare la produzione di energia elettrica mediante conversione fotovoltaica della fonte solare, in attuazione dell'articolo 7 del decreto legislativo 29 dicembre 2003, n. 387
), integrated by the AEEG Resolution 90/07, Law no. 129 of 13 August 2010, and supplemented by the Ministerial Decree dated 6 August 2010;
|
·
|
Definitive Project
: means the “
Progetto Definitivo
”, i.e. the project drawings and the relevant annexes, a copy of which is attached hereto, as
Annex 4
;
|
·
|
Design Health and Safety Coordinator (
coordinatore in materia di sicurezza e salute durante la progettazione)
: means the individual appointed by the Principal pursuant to Article 7, who shall draft the PSC and who has been entrusted with the duties related to this role pursuant to Article 91 of the Legislative Decree No. 81/2008 and subsequent amendments and integrations;
|
·
|
Discount:
has the meaning indicated in Article 9.7;
|
·
|
Discretional Variations
: has the meaning indicated in Article 10.2 (b);
|
·
|
Electro-Mechanical Completion
: means, with reference to the Plant, the completion of all Electro- Mechanical Works;
|
·
|
Electro-Mechanical Works
: means, with reference to the Plant, all the mechanical and electrical works, including: (a) supply and installation of the following equipment: inverters, photovoltaic modules and DC installation, mains, pits, cabling, electrical boxes and protection devices, internal connections and interconnections with external installations, weather station, low voltage installation, civil engineering, medium voltage installation (including transformation, protection equipment and utility interconnection equipment, security and monitoring systems); and (b) the grid connection works, i.e. the physical construction of the connection line to the national electricity grid;
|
·
|
ENEL
: means Enel Distribuzione S.p.A.;
|
·
|
Equipment
: means the Contractor’s equipment and components to carry out the Works listed in
Annex 3
of this Contract;
|
·
|
Executive Project
: means the “
Progetto Esecutivo
”, i.e. the project drawings prepared and delivered by the Contractor prior to the commencement of the Works pursuant to Article 8, in compliance with the Technical Specifications and with the Decree provisions;
|
·
|
Expert
: means the arbitrator appointed for the solution of technical and related matters in accordance with Article 24.2;
|
·
|
FAC
: means the Final Acceptance Certificate, i.e. the certificate that shall be issued by Principal in compliance with the outline set forth in
Annex 15
acknowledging the positive outcome of the conditions mentioned in art. 12;
|
·
|
Financing:
means the project loan that may be arranged by the Principal, in compliance with recital G above;
|
·
|
Financing Entity
: means the financing institution or any other equity partner identified by the Principal which could grant the Financing to the Principal;
|
·
|
First Reassessment Test
: means the First Reassessment Test of the MGPR to be performed pursuant to Article 12.6.
|
·
|
Force Majeure
: has the meaning indicated in Article 11;
|
·
|
GSE
: means the
Gestore dei Servizi Elettrici - GSE S.p.A
., i.e. the entity appointed to implement the incentive tariff regime foreseen by the Decree;
|
·
|
Health and Safety Coordinators
: means the Construction Health and Safety Coordinator jointly with the Design Health and Safety Coordinator;
|
·
|
IAC
: means the Incentive Acceptance Certificate, i.e. the certificate that shall be issued by the Principal in accordance with the form set forth in
Annex 14
, acknowledging that the Plant has been admitted to the Incentive scheme and that the agreement with GSE has been entered into;
|
·
|
Incentive Agreement:
(“
Convenzione con GSE
”)
means the agreement between the Principal and GSE in order to obtain the incentives provided under Applicable Law for feed-in-tariffs;
|
·
|
Interconnection Agreement
means the agreement to be entered into between the Principal and the national electricity grid operator which provides the terms and conditions for the connection to the national grid.
|
·
|
Land Rights:
means the surface (
superficie
) right over the Area, free of any encumbrance or burden whatsoever, and compliant with any requirement provided under Applicable Law in order to construct and operate the Plant;
|
·
|
Minimum Guaranteed Performance Ratio
(or
MGPR
): means the minimum performance ratio guaranteed by the Contractor pursuant to
Annex 9
and in accordance with the methodology used for the measurement of the Plant performance according to the standard CEI EN 61724 (CEI 82-15) as described in the same Annex 9;
|
·
|
Necessary Variations
: has the meaning indicated in Article 10.2.(a) below;
|
·
|
O&M Agreement
: means the operation and maintenance agreement referred to in Recital (I);
|
·
|
Operational Inspection
: means, with reference to the Plant, the verification process carried out by the Contractor according to the Technical Specifications, Applicable Law and MGPR, which shall be carried out by the Parties in accordance with
Annex 10
and Article 12 below in order to achieve PAC;
|
·
|
PAC
: means the Provisional Acceptance Certificate, i.e. the certificate that shall be issued by the Principal in compliance with the outline set forth in
Annex 13
acknowledging the positive outcome of the Operational Inspection;
|
·
|
Parent Companies:
means, respectively, Bosques Solares S.L., a company incorporated under the laws of Spain with its registered office at Camino de la VIesca 50, 33429 Siero (Asturias), registration with the
Registro Mercantil of Asturias
, Fiscal Code and Vat No. B-74152497 and Urbezeta Italia S.r.l., a company incorporated under the laws of Italy and having its registered office at via Rodolfo Redi, 3, Bari, Italy, VAT Registration Number and Tax Code 06818300722, the two companies jointly owning 100% of the Contractor’s shares;
|
·
|
Parent Company Guarantee
: means the guarantee, consistent with the form set forth in
Annex
5/B
, whose maximum amount is equal to the amount of the Consideration to be issued in a consolidated form, by the Parent Companies in favour of the Principal, in compliance with Article 4.2, as guarantee for the obligations undertaken by the Contractor under this Contract.
|
·
|
Payment Milestone
: means each of the payment milestones set out to in Art. 4.2;
|
·
|
Performance Liquidated Damages:
means the damages referred to in Article 13.2;
|
·
|
Plant
: means the photovoltaic plant located in the province of Bari, Municipality of Corato, made up of polycrystalline modules, with trackers technology and having a capacity equivalent to 3,015 MWp, which term shall include all the items, such as without limitation, cables, modules, inverters, structures, cabins, etc, that are finalised at the functioning of the plant;
|
·
|
POS
: means the operative safety plan (i.e.
Piano Operativo di Sicurezza
) to be drawn up by the Contractor, with reference to the Plant, in compliance with the CSP, in accordance with Article 89, paragraph 1, letter h) of the Legislative Decree no. 81/2008 and subsequent amendments and integrations thereto, as possibly amended in agreement with the Health and Safety Coordinators;
|
·
|
Power Purchase Agreement (or PPA)
: means the agreement that the Principal will enter into with the energy company of its choice for the sale of the produced electricity;
|
·
|
Project Implementation Schedule
: means the schedule for the implementation of the construction of the Plant, which is attached as
Annex 7
as may be updated, from time to time, in agreement between the Parties;
|
·
|
PSC
: means the coordination and safety plan drawn up by the Design Health and Safety Coordinator during the planning phase, pursuant to Article 100 of Legislative Decree no. 81/2008, which must include,
inter alia
, an estimate for the safety costs, as eventually altered by the Construction Health and Safety Coordinator during the performance phase while the Works are carried out;
|
·
|
Q-2 Incentive
: means the incentive to the tariff for the production and delivery of power to the national electricity grid through a solar power plant set out for the second four months of 2011 in accordance with the Decree;
|
·
|
Reassessment Tests:
means jointly the First Reassessment Test and the Second Reassessment Test of the MGPR will be performed pursuant to Article 12.6.
|
·
|
Second Reassessment Test
: means the Second Reassessment Test of the MGPR to be performed pursuant to Article 12.6.
|
·
|
Service Order
: means the orders given during the execution of the Works;
|
·
|
Site Manager
: means the individual appointed by the Contractor, who shall work with the Works Manager throughout the performance of the Works;
|
·
|
Start of Works
: shall mean the
Dichiarazione di Inizio Lavori
;
|
·
|
STMD:
means the
soluzione tecnica minima di dettaglio
regulated in AEEG Resolution no. 281/05, as subsequently amended and integrated;
|
·
|
STMG:
means the
soluzione tecnica minima generale,
regulated in AEEG Resolution no. 281/05, as subsequently amended and integrated;
|
·
|
TAC
: means the Technical Acceptance Certificate, i.e. the certificate that shall be issued by Principal in accordance with the outline set forth in
Annex 11
following the Technical Inspection;
|
·
|
Technical Consultant:
means the consultant appointed by the Principal and/or the Financing Entity, who has been appointed to monitor the progress of the Works;
|
·
|
Technical Inspection
: means the inspection procedure that the Principal shall carry out pursuant to
Annex 10
and in accordance with Article 12 in order to verify that the Electro-Mechanical Completion complies with the Technical Specifications, Applicable Laws and rules of the trade, and to achieve the TAC;
|
·
|
Technical Specifications
: means the documentation, referred to in
Annex 6
of this Contract, in which the technical specifications on the basis of which the Contractor shall perform the Executive Project and Works to reach the MGPR are indicated;
|
·
|
Variations
: means, jointly, the Discretional and Necessary Variations;
|
·
|
Warranty Bond
: means the autonomous and first demand guarantee equal to 10% (ten per cent) of the Consideration, consistent with the form set forth in
Annex
5/C
, issued by a primary and leading bank or which, in any case, satisfies the Principal and the Financing Entity, as a guarantee for the Contractor’s obligations from issuance of PAC until issuance of FAC;
|
·
|
Warranty Period:
means the period of 2 (two) years starting from execution of the PAC.
|
·
|
Working Day
: means every day except for Fridays, Saturdays, Sundays and public or bank holidays;
|
·
|
Works
: means the activities that have been performed or are to be performed by the Contractor for the Plant pursuant to this Contact, as better described in Article 3 hereof;
|
·
|
Works Manager
: means the “
Responsabile Lavori
”, i.e. the individual appointed by the Principal, in compliance with the Law No. 81/2008, who shall perform the site management duties foreseen by the Applicable Law and/or listed in this Contract.
|
2.2.
|
The following interpretation provisions shall be applied to this Contract, unless otherwise provided for:
|
(a)
|
the articles’ headings are merely indicated for the sake of convenience of reference and cannot be used for the interpretation of the terms contained in this Contract;
|
(b)
|
reference to sections, articles and annexes shall be understood as being made, unless otherwise indicated, to the sections, articles and annexes contained in this Contract;
|
(c)
|
unless explicitly indicated in this Contract,
|
|
(i)
|
any reference to this Contract shall be a reference to the Contract, as validly revised, integrated or amended and
|
|
(ii)
|
any reference made to any other agreement or document shall imply reference to that agreement or document, as validly revised, integrated or amended;
|
(d)
|
unless otherwise explicitly indicated, the words and definitions, used in the singular form shall have the same meaning,
mutatis mutandis
, even when used in the plural form and vice versa;
|
(e)
|
the terms, "herein", "therein" and synonyms in this Contract refer to the entire Contract and not to particular articles in this Contract, unless explicitly provided in this sense, just as the terms “below” or “above” indicate the part below or above in this Contract, with reference to the point in which said terms have been used;
|
(f)
|
the word “included” and the expression “in particular” shall always be considered to be followed by the expressions “without limitations” or “not limited to” even if not effectively followed by said expressions;
|
(g)
|
every reference to each individual shall also refer to his legitimate successors and assignees;
|
(h)
|
if, on the basis of this Contract, an activity must be performed, a communication sent or a term expires on a day other than a Working Day, said activity shall then be performed, the communication be sent or the relative term expire on the Working Day falling immediately after;
|
(i)
|
in the case of conflicts between the provisions of this Contract and of annex hereto, the provisions of this Contract shall prevail.
|
3.1
|
With this Contract, the Principal has entrusted “turn key” the Contractor, who accepts, with the realisation of the Executive Project and the performance of all the Works in a world class manufacturing way and in compliance with the Technical Specifications and Applicable Laws.
|
3.2
|
In particular, and without limitation, the following activities shall be understood as having been included in the invariable Consideration referred to in Article 4:
|
(a)
|
Procurement and transfer in favour of the Principal
:
|
|
(i)
|
Applicable Permits
: perform any activity or prepare any document for the successful procurement and transfer to the Principal of the Applicable Permits, including delivery to the competent Municipality offices of any variation thereto, being it understood that the Contractor shall be liable for the full suitability of the Applicable Permits with respect to the lawful, compete and satisfactory performance of the Works; and
|
|
(ii)
|
Land Rights
: procure that the Principal acquires the Land Rights over the Area and carry out any activity (such as any cadastral parcelling) that may be necessary in relation to the suitability Area in respect of the construction and 20 year operation of the Plant;
|
(b)
|
Engineering
: including without limitation, the performance of the Executive Project in compliance with the Technical Specifications and their amendment as required in order to obtain the Principal’s final, written approval, the Plant “
as-built
” documentation, the electrical single wire and multi-wire diagrams, Technical Specifications, components and operation and maintenance manuals;
|
(c)
|
Civil Works
: including the construction of entries, digging work for the electrical underground cabling, if any, foundations, enclosures and constructions necessary to house the inverters and transformers, fencing, in accordance with the Executive Project and the Technical Specifications and supplying, on his own initiative and expense, the materials, vehicles or any other component and labour necessary. Construction of all the provisional Works, including those located outside the Area (signage, even luminous, placards, crush barriers aimed at defining or limiting the paths of pedestrians and vehicles, in compliance with the traffic and viability provisions), as well as the preparation of the equipment aimed at guaranteeing, for the entire duration of the Works, in compliance with the provisions on safety and health on the workplace and what is contained and has been prescribed in the PSC. Construction of site offices for the Works Manager and the Design Health and Safety Coordinator. Provision of all the utilities required for the supply of water and electricity during the Plant construction works as well as of suitable offices for the Design Health and Safety Coordinator. Payment of all the charges for the consumption of water, and electricity, as described above. Building of barriers or provisional protection for the Works and wherever the safety provisions require them;
|
(d)
|
Supply of the electro-mechanical apparatus
: including supply, installation and start up of the photovoltaic modules, mounting structures, inverters, module boards and electrical connection in direct and alternating current into the national electricity grid, transformation box, interface module boards, grounding system, supervision and control system, monitoring system, video surveillance and weather station.
|
(e)
|
Assembly and installation
: the supply and installation, including the use of labour, of all the materials, accessories and secondary components that might be required for the correct and safe operation and management of the Plant. Maintenance and operative capacity of the site for the entire duration of the Works;
|
(f)
|
Constant inspection and planning
of the states of progress concerning the Works.
|
(g)
|
Grid connection civil works
: the timely construction of all the civil works required by ENEL with reference to the STMD, for the purposes of the Plant’s connection to the grid (merely by way of an example, the construction of the area/cable line and delivery box). The works may include the intervention of ENEL.
|
(h)
|
Delivery to the Principal of all the necessary documentation
, on issue of the Plant’s PAC and as a condition for the issue of the FAC, to be drawn up in compliance with the Applicable Law and in order to obtain the Q-2 Incentive;
|
(i)
|
Post-STMD activities
: relations with the competent authorities (such as,
inter alia
, ENEL) and the individuals appointed by the latter for the Plant’s connection to the grid shall be directly managed by the Contractor, who must constantly monitor ENEL’s activities and those of the other individuals, soliciting them, when necessary, with the means deemed to be most expedient, in order to facilitate and, in any case, make such connection to the national electricity grid possible within the Completion Date established by the Project Implementation Schedule. Furthermore, the Contractor shall carry out all activities and formalities aimed at obtaining the Q-2 Incentive Agreement, the Interconnection Agreement and the PPA (as the case may be), and to prompt the Principal for proper action in connection therewith, when necessary.
|
(j)
|
Custody of the Area
: maintenance, protection, monitoring, security service, custody and conservation of the Area and of the equipment erected or stored therein until issuance of PAC. The protection and security systems and procedures will be in line with the best practice and the minimum standard requested by the insurers. The Contractor shall be the keeper of the Works, as well as of all the materials and equipment to be used during the execution of the Works and shall therefore adopt any necessary measures aimed at avoiding any losses, damages and thefts, as well as providing, at its own initiative and expense, for the replacement of what has been damaged or removed until issue of the PAC and the Plant’s delivery to the Principal.
|
(k)
|
Clearance of the Area
: removal of all tools and materials that are not necessary during the Warranty Period within the first 20 (twenty) Working Days after signing of PAC; cleaning of the Area, including the restoration of the surrounding areas and roads, in order to leave the Plant in the condition necessary for its proper operation and maintenance. Removal and transport to the authorised public dumps, of all waste materials that cannot be re-used, with final delivery to the Principal of the certification of its disposal, in compliance with Applicable Law.
|
3.3
|
The Contractor shall perform, more generally, any other activities that might be necessary to duly perform the Contract, to achieve the standards of world class manufacturing, and MGPR.
|
3.4
|
In addition, the Contractor shall file, at its expenses, any documents and applications necessary to apply for and obtain the Applicable Permits on a timely basis, or in the event that Applicable Law requires that such Applicable Permits be filed by the Principal, the Contractor hereby undertakes to fully cooperate with the Principal in interacting with the public authorities and carry out all the activities to obtain them, as soon as possible, and in any case within the terms set out by the Applicable Law and the Project Implementation Schedule.
|
3.5
|
It is understood that the planning, construction, any inspection and the subsequent management of the Plant may be financed by the Financing Entity in compliance with the project financing or leasing outline, and that this shall require this Contract’s co-ordination with the terms set forth in the financing agreement, by means of entering into a direct agreement with the Financing Entity (the “
Direct Agreement
”). Therefore, the Parties mutually undertake to enter into the Direct Agreement, if necessary.
|
4.1
|
The Principal shall pay the Contractor a Consideration equal to Euro 3,450,000 (three million four hundred fifty thousand) per MWp, plus VAT, in compliance with the following terms and conditions.
|
4.2
|
The Consideration shall be paid to the Contractor in accordance with the following Payment Milestones:
|
a)
|
Payment Milestone 1:
Euro 150,000 (one hundred-fifty thousand) shall become due on fulfilment of the following conditions:
|
(i)
|
completion of all Applicable Permits (excluding admission to the applicable incentives) procedures in a way which is satisfactory to the Principal’s legal advisors, including submission of the variations consequent to the planning and Equipment amendments, if any, and compliance with any provisions established by the competent municipal technical offices; and
|
(ii)
|
transfer of the Applicable Permits (excluding the incentives) and the Land Rights to the Principal; and
|
(iii)
|
submission by the Contractor of all the relevant technical documentation, including variations to the layouts, if any, in a way that is satisfactory to the Principal’s technical advisors; and
|
(iv)
|
evidence of acceptance by the panel supplier of the purchase order of the panels required for the construction of the Plant sent by the Principal (or any third entity indicated by the Principal) or the Contractor, as the case may be; and
|
(v)
|
execution by the Parties of the O&M Agreement; and
|
(vi)
|
delivery of the Parent Company Guarantee in compliance with the following provision of this Article 4.2, letter a).
|
b)
|
Payment Milestone 2:
10% (ten per cent) of the BoS Consideration shall become due, provided that all the conditions in art. 4.2.(a) have been fulfilled, on delivery of the Bank Bond, which shall in any case be delivered by the Contractor within 30 (thirty) days of the first payment.
|
c)
|
Payment Milestone 3:
15% (fifteen per cent) of the BoS Consideration shall become due, provided that all the conditions in art. 4.2. (a) and (b) have been fulfilled, on installation of at least 50% (fifty per cent) of the tracker structures required for the construction of the Plant.
|
d)
|
Payment Milestone 4:
5% (five per cent) of the BoS Consideration shall become due, provided that all the conditions in art. 4.2. (a), (b) and (c) have been fulfilled, on fulfilment of the following conditions:
|
(i)
|
delivery to the Area of at least 80% (eighty per cent) of the panels required for the construction of the Plant; and
|
(ii)
|
installation of at least 50% (fifty per cent) of the panels required for the construction of the Plant.
|
e)
|
Payment Milestone 5:
25% (twenty five per cent) of the BoS Consideration shall become due, provided that all the conditions in art. 4.2. (a), (b), (c) and (d) have been fulfilled, on Commencement of Operation;
|
d)
|
Payment Milestone 6:
the balance of the Consideration shall become due on fulfilment of the following conditions:
|
(i)
|
satisfactory outcome of the Provisional Acceptance Test and issuance of the PAC; and
|
(ii)
|
delivery by the Contractor to the Principal of the Warranty Bond, provided that the Warranty Bond shall become effective on payment of Payment Milestone 6 by the Principal.
|
4.3
|
Once the Contractor believes that any of the Payment Milestones set out under Article 4.2 has been achieved, it shall so notify the Principal in writing. Within 10 (ten) Working Days from receipt of the notice, the Principal shall inspect the Works and verify that the relevant Payment Milestone has been achieved. In the event of objection, the Principal shall indicate to the Contractor the conditions that are outstanding for the relevant Payment Milestone. In the event that no objection is raised in writing by the Principal within such term, the relevant Payment Milestone shall be deemed approved.
|
4.4
|
Payment shall be made within 15 (fifteen) Working Days of the date of receipt by the Principal of the relevant invoices by wire transfer to the bank account indicated by the Contractor. It is understood that the invoice relating to Payment Milestone 4 may not be issued prior to issuance of PAC.
|
4.5
|
The Parties agree that the payments of the Payment Milestones shall constitute mere advance payments and not the single lots in which the Parties intended dividing up the Works, with the exclusion, therefore, of the provision contained in the second paragraph of Article 1666 of the Civil Code.
|
4.6
|
The Parties agree and accept that the Consideration provided in the Contract is fixed and cannot be amended, save as provided in Article 10. Accordingly, the Parties have agreed to exclude the applicability of the Civil Code and every other provision that would entitle the Contractor to obtain a review of the price. Save for art. 10, the risk related to the events referred to in Article 1664 of the Civil Code (burdensomeness or difficulty in performance: i.e. due to an increase of the cost of works and/or materials, or particular performance difficulties due to geological, hydraulic, etc.) and Article 1467 of the Civil Code is fully and expressly undertaken by the Contractor.
|
4.7
|
It is agreed that from Commencement of Operation until payment of Payment Milestone 6, the Principal shall pay to the Contractor an amount equal to 16% (sixteen per cent) of the net production revenue (i.e. the revenue net of any operational expenses) generated by the Plant provided and to the extent that that the Plant reaches MGPR.
|
5.1
|
The Contractor represents and warrants that he has visited the Area, that the same is suitable for the Plant’s construction in a world class manufacturing way and in compliance with the Technical Specifications and the Applicable Law and has already checked the absence of obstacles of a technical and/or geological and/or hydraulic and/or legal and/or administrative nature with reference to the commencement of the Works. Any and all designs, engineering and project specifications produced and delivered by the Contractor shall be prepared and signed by a duly certified engineer and are appropriate to fully accomplish the purpose of this Contract. Therefore, any approval or acknowledgement by the Principal of the technical designs and documentation shall not release the Contractor from its duties, warranties and liabilities as to the exact delivery of the Plant and performance of the Works.
|
5.2
|
The Contractor represents and warrants that at the time of execution hereof the Principal has been transferred a valid AU, an accepted STMD and Enel’s
comunicazione di conclusione iter autorizzativo
in relation to the Plant and that it is unaware of any facts or circumstances, of any kind whatsoever that might prejudice the formation or validity of any Plant’s Applicable Permits, or the transfer or registration thereof in favour of the Principal. The Area is free from any encumbrances or burdens and no third parties (apart from the lawful owners) can raise any claim in relation to the Area and/or hinder the acquisition by the Principal of the Area free from encumbrances or burdens.
|
5.3
|
The Contractor also represents and warrants to the Principal, with reference to the “turn key” nature of this Contract, to be the only Party liable to the Principal concerning the Works’ complete construction in a world class manufacturing way, undertaking, thus, all liability towards the Principal with reference to all the activities whose performance is entrusted to sub-contractors, pursuant to this Contract.
|
5.4
|
The Contractor agrees, as of the date hereof, to the assignment and/or pledge in favour of the Financing Entity (or any third parties appointed by the latter) by the Principal of his receivables deriving from this Contract and shall provide his cooperation in the performance of all the formalities and provide any further consent, necessary or expedient, required as to the assignment and/or pledge's formation.
|
5.5
|
The Contractor guarantees to dedicate to the Plant, at all times, the adequate number of workers and to timely and completely pay all wages, insurance fees and public charges, social securities, etc. for the workers on the sites.
|
5.6
|
There are no impediments, to the Contractor's knowledge, that could compromise the obtaining of the authorizations for the construction of the grid infrastructure necessary to connect the Plant to the grid.
|
6.1
|
The Principal shall make available the areas necessary for the Contractor's offices and warehouses as well as to store the materials.
|
6.2
|
The obligations of the Principal shall be those that are established in this Contract and those resulting from Applicable Law, including, in particular, and without prejudice to the Contractor’s obligations under Article 3, the following:
|
(a)
|
to timely comply with its payment obligations under this Contract;
|
(b)
|
to promptly sign with Enel Distribuzione S.p.A. the Interconnection Agreement for the Plant, upon being prompted by the Contractor;
|
(c)
|
to promptly sign with GSE the Incentive Agreement for the Plant upon being prompted by the Contractor;
|
(d)
|
to promptly sign with the energy company of its choice the PPA upon being prompted by the Contractor;
|
(e)
|
to co-operate, in good faith, with the Contractor in relation to the Contractor's performance of this Contract.
|
7.1
|
Pursuant to Article 89 of the Legislative Decree 81/2008, the Principal shall appoint a Design Health and Safety Coordinator for the planning phase. The Design Health and Safety Coordinator shall be in charge, during the planning phase, of all the obligations and responsibilities pursuant to the Applicable Laws regarding Health and Safety in the workplace. All the fees and expenses relating to said appointment, including his/her consideration shall be borne by the Principal. Pursuant to Article 89 of Legislative decree 81/2008, the Principal shall also appoint a Construction Health and Safety Coordinator for the Executive Project phase, who shall be in charge of all the obligations and responsibilities pursuant to the Applicable Laws regarding health and safety in the workplace. The Principal, pursuant the Article 89 of Legislative Decree 81/2008, shall delegate to a professional duly qualified the duties of supervision and coordination of the manner and timing of the Works (the “
Works Manager
”, i.e. the
Responsabile dei Lavori
). All the fees and expenses relating to the Works Manager and the Health and Safety Coordinators, including their considerations, shall be borne by the Principal.
|
7.2
|
In order to allow the Contractor to draw up the
Piano Operativo di Sicurezza
(the POS) the Principal, pursuant to Article 100 Para 1 of the Legislative Decree 81/2008, through the Design Health and Safety Coordinator, must deliver the
Piano di Sicurezza e Coordinamento
(the PSC) to the Contractor, at least 30 days before the Start of Works. The Contractor shall deliver to the Principal, at least 20 Working Days before the Start of Works the POS, which shall include any integrations related to the specific risks deriving from the execution of the works pursuant to Article 100, Para 1 of the Legislative Decree no. 81/2008 and to the terms set out in Annex 7 thereto. The POS and its amendment are an integral part of this Contract and the Contractor shall comply with them as well as with any statutory provisions and regulations in force, and shall be held directly and autonomously liable in the case of any breach of the same.
|
7.3
|
The Works Manager, who in any case shall not have the powers to represent the Principal, shall supervise the Works to be performed in compliance with the contractual provisions and the law, the terms set out therein and, when the performance is carried out by sub-contractors, he must ensure the coordination between the individual works. In particular, without prejudice to the above, the Works Manager shall be responsible for the following:
|
(a)
|
Represent the Principal on site during the performance of this Contract;
|
(b)
|
Check compliance with the Project Implementation Schedule and, in the case of delay with reference to the latter, agree upon a new programme aimed at guaranteeing compliance with the dates established for the Plant’s final delivery;
|
(c)
|
Monitor the site;
|
(d)
|
Check the effective coordination among the subcontractors, under the Contractor’s liability;
|
(e)
|
Draw up the reports relative to the beginning and end of the Works, any suspensions and anything else that might concern the site Works;
|
(f)
|
Check the partial and final advance payments;
|
(g)
|
Analyse the costs indicated by the Contractor in the case of Discretional Variations;
|
(h)
|
Ensure the execution of the Technical Inspection, the Operational Inspection, the Reassessment Tests, and the delivery of the Works;
|
|
(i)
|
Check that the Contractor’s performance of the Works takes place in compliance with all the provisions of this Contract, of the Applicable Law and the Technical Specifications, and in a world class manufacturing way. In particular, the Works Manager shall:
|
|
(i)
|
impart the technical directions required to guarantee the Contractor’s compliance concerning the Works’ performance conditions and, where necessary, formulate the relative remarks and/or objections and propose Variations;
|
|
(ii)
|
validate the Technical Inspection and the Operational Inspection for the Principal’s approval;
|
|
(iii)
|
supply the Contractor with clarification and/or supplementary technical explanations concerning the projects’ specific elements and/or technical descriptions necessary to carry on the Works;
|
|
(iv)
|
order the amendments, which are necessary for technical reasons, related to specific elements of the Works that do not impair the substance and nature of the Works and that do not constitute Discretional Variations;
|
|
(v)
|
approve the drawings prepared by the Contractor with reference to their compliance with the Technical Specifications and the Executive Project approved by the Principal.
|
7.4
|
Within 5 (five) Working Days of the Communication of the Executive Project’s approval, the Contractor shall inform the Principal in writing about the Site Manager’s name, who must have the technical expertise and professionalism necessary to perform his appointment according to this Contract. In particular, in order to ensure the correct performance of the Contractor’s obligations under this Contract and the Applicable Law, the Site Manager must:
|
(a)
|
cooperate with the Works Manager, the engineer appointed to draw up and sign the Executive Project and with the Health and Safety Coordinators; and
|
(b)
|
observe all the requirements and observations imparted by the above persons in the case they spot any inconsistency between the Works and the Applicable Laws.
|
7.5
|
Any instruction, request, integration or order from the Works Manager, the Health and Safety Coordinators and/or the Safety Coordinator shall be communicated to the Contractor in writing by means of specific Service Orders which must be progressively numbered and delivered to the Site Manager in two copies, one of which must be returned, duly signed, by the Contractor as receipt thereof. The Contractor shall not be entitled to refuse to perform the orders received, save for his right to draw up, in writing, his own remarks or reservations on signing the Service Orders in the case that the latter are unreasonable and/or outside the scope of the Works. Such remarks or reservations shall in any case take place, on penalty of forfeiture, within 5 (five) Working Days of receipt of the Service Orders.
|
7.6
|
The Health and Safety Coordinators, the Works Manager, the Technical Consultant and/or the individuals indicated by the Principal shall be entitled to enter the site, at any time whatsoever, and to carry on the verifications that, at their unquestionable judgement, would be necessary.
|
7.7
|
The personnel employed by the Contractor to carry out the Works must be experienced and of a sufficient number in respect of the obligations undertaken by the Contractor. The Principal shall be entitled to require the immediate removal from the site of the personnel’s members who, at his unquestionable judgement, do not offer sufficient guarantees for the timely performance and quality of the Works and/or whose conduct might prejudice the Plant and its performance. The Contractor’s personnel, operating where the work is carried out, must be equipped with an identity badge.
|
7.8
|
The Contractor undertakes to comply with all the obligations derived from the Applicable Law’s provisions regarding labour and social security, including the general, health rules on the work place, the provisions on accident prevention on the work place, the obligatory insurance for accidents in the work place and professional illnesses, social security for involuntary unemployment, invalidity or old age, tuberculosis and other professional illnesses, the protection of workers in the case of a contract with particular reference to the Legislative Decree No. 81/2008 and to any other provisions in force or which might arise during the Works aimed at protecting the workers. Furthermore, the Contractor shall grant his personnel an economic and juridical status in compliance with the applicable labour collective agreements, and shall provide, upon the Principal’s written request, suitable documentation constituting evidence of the appropriate economic and juridical status and holding the Principal harmless from any claim raised by his consultants and/or employees.
|
7.9
|
Pursuant to Article 26, paragraph 5 of Legislative Decree no. 81/2008,
Annex 8
contains
specific indications of the costs relating to safety in the Area, which shall be included in the Consideration and which the Contractor is obliged to draw up with accuracy and precision.
|
7.10
|
The Parties agree that the prevailing language for any correspondence between them in relation to the entire execution of this Contract, including correspondence, testing and inspections shall be the English language.
|
8.1
|
The Contractor shall deliver to the Principal, within 10 (ten) Working Days of the date on which this Contract is executed, two copies of the Executive Project for the Plant, one on paper and one using editable software, for the Principal’s approval.
|
8.2
|
Within 10 (ten) days from the Executive Project’s delivery date to the Principal, pursuant to Article 8.1 foregoing hereto, the Principal shall provide the Contractor with its consent or remarks and/or proposals for amendment and integration which are necessary in order to bring into line the Executive Project with the Decree and the Technical Specifications. The Contractor shall, at its own expense and without this constituting a reason for requesting any variations to the Consideration, amend the Executive Project in compliance with the Principal’s proposals. The amended/integrated Executive Project shall be delivered to the Principal within the following 10 (ten) Working Days, in order to obtain the Principal’s approval, provided that in the following 10 (ten) days the Principal shall communicate its decision to the Contractor.
|
8.3
|
Once the Executive Project has been approved by the Principal, the latter shall provide the Contractor with a written communication (the “
Communication of the Executive Project’s Approval
”), and the Parties shall meet within 7 (seven) days of the Contractor’s receipt of said communication, in order to proceed with the delivery of the Area to the Contractor. On delivery of the Area, as a condition to allow the Start of Works, the Contractor shall provide the Principal with evidence that it has entered into the insurances provided under Article 15, in accordance with the terms thereof.
|
8.4
|
After delivery of the Area, the Contractor shall set up the site and declare the Start of Works for the Plant.
|
9.1
|
Without prejudice to the provision in Article 9.6, the Contractor undertakes to achieve Electro-Mechanical Completion and Commencement of Operation within 31 May 2011 (
“Completion Date”
).
|
9.2
|
In the case of an envisaged delay in respect of the date referred to in Article 9.1, the Contractor shall within 7 (seven) Working Days from the relevant date, deliver to the Principal a written delay recovery plan, specifying the relevant terms and procedures aimed at safeguarding, inasmuch as possible, the punctual achievement of the Completion Date. For the avoidance of doubt the submission of such recovery plan to the Principal shall not release the Contractor from any of its obligations under this Contract.
|
9.3
|
Without prejudice to the provision in Art. 9.6, should the Contractor fail to comply with the Completion Date, the Principal shall be entitled to apply Delay Liquidated Damages equal to Euro 1.6 (one point six) per kWp per day of delay, save for any further damages. The Contractor acknowledges that the above amounts are a genuine pre-estimate of the Principal’s losses in the event of delays in the Completion Date
.
Delay Liquidated Damages shall be payable on a monthly basis upon receipt by the Contractor of the Principal’s request for payment.
|
9.4
|
Without prejudice to the above, the Principal shall also be entitled (in its absolute discretion) to offset the Delay Liquidated Damages against any monies due, or to become due, to Contractor.
|
9.5
|
The payment shall not release the Contractor from its obligation to complete the Works or from any other duty, obligation or responsibility under the Contract.
|
9.6
|
Without prejudice to the provisions in art. 18.1.(g) and art. 20.2, in the event that, for any reason whatsoever, including but not limited to Force Majeure or change in the Applicable Law, the Q-2 Incentive is not awarded to the Plant, the Contractor shall be liable to grant to Principal a discount equal to the loss of profit discounted to present (“
Discount”
). The Parties agree that any reduction of one Euro cent in the feed-in-tariff that shall apply under applicable law shall cause a reduction of Euro 120,000 (one hundred and twenty thousand) per MWp in the Consideration, provided and to the extent that the reduction of the feed-in-tariff does not exceed 10% (ten per cent) of the value of the Q-2 Incentive.
|
9.7
|
The Discount shall become payable by the Contractor within 30 (thirty) days after it becomes clear that the Plant is not admitted to the Q-2 Incentive.
|
9.8
|
The Contractor explicitly waives any right to offset the amounts due to the Principal, at any title whatsoever, such as by way of Discount or Delay Liquidated Damages, pursuant to this Article 9, or pursuant to Article 20.1 against any amount that the Contractor might claim against the Principal. The Contractor acknowledges and considers that the Discount and the Delay Liquidated Damages are suitable to the Consideration and the prejudice that each delay might cause to the Principal, and waives any claim or action aimed at obtaining a reduction of such Delay Liquidated Damages or Discounts.
|
10.1
|
The Contractor undertakes to perform any Variations to the Works, which are required both for the execution of the Works according to the best quality standards as well as if requested by the Principal.
|
10.2
|
In particular, for the purposes of this Contract, the Variations considered shall be the following:
|
(a)
|
Variations required for the correct fulfilment of the Works in a world class manufacturing way and in compliance with the Technical Specifications and the Applicable Law, pursuant to Article 1660 of the Civil Code (“
Necessary Variations
”);
|
(b)
|
Variations requested by the Principal during the performance of the Works, or alternatively, proposed by the Contractor and accepted in writing by the Principal and/or the Financing Entity, subject to the favourable opinion of the Technical Consultant (“
Discretional Variations
”).
|
10.3
|
In the case of Necessary Variations, the Contractor shall, if at any time whatsoever whilst the Works are being performed the necessity of any kind of quantitative and/or qualitative amendments concerning the same is found, to immediately inform the Principal in writing, indicating the type of Variations proposed with an indication of the relative quantity, materials and price per unit as well as the construction times required for said intervention. It is understood that no Necessary Variation may be performed without the prior consent to do so by the Principal and the Financing Entity (which shall base its consent on the Technical Consultant’s prior positive opinion). Similarly, in the case of Discretional Variations, the Contractor, with the document proposing the same or within 10 (ten) Working Days in the case that the Variations have been proposed by the Principal, shall send to the Principal and to the Technical Consultant a communication setting out the relative quantity, materials, unit prices, construction times connected with said Variations and the relevant higher costs, if any, provided that in any case no Discretional Variation can be performed without the Principal and Financing Entity’s prior written consent, also with regard to the Variations’ cost.
|
10.4
|
It is understood and agreed between the Parties that: (i) the costs related to the Discretional Variations requested by the Principal, once agreed between the Parties in accordance with the above provisions, shall be added to the Consideration and paid according to the terms of Article 4 above; and (ii) the costs related to the Necessary Variations shall be entirely borne by the Contractor. The increase in the Consideration possibly due by the Principal shall not exceed an amount equal to the reasonable costs incurred by the Contractor in relation to the Plant in order to comply with the Applicable Law.
|
10.5
|
The determination of the Variation’s value for the purposes of paying for the additional costs and the application of Article 10.4 above, shall take place in compliance with the following criteria:
|
(a)
|
on the basis of the unit prices in the “Construction Work Price Information” published by the Chamber of Commerce of Bari;
|
(b)
|
the activities that cannot be evaluated according to the above criterion must be agreed on the basis of the market prices applicable to the Works, object of the Contract, as agreed in writing between the Parties.
|
10.6
|
In the case of delay of the Works due to the necessity to carry out any Discretional Variations and Necessary Variations due to a change in the Applicable Law, the Parties accept that the Project Implementation Schedule shall be modified in agreement between the Parties. This extension must be at least equal to the period that the Parties agree as being necessary to perform the Variations.
|
10.7
|
The Contractor waives the termination right foreseen by article 1660 of the Civil Code. Furthermore, Article 1661 of the Civil Code shall not apply to the Discretional Variations requested by the Principal.
|
11.1
|
Force Majeure shall imply any unforeseeable event, fact or circumstances which cannot be directly attributed to the Party invoking it, which is impossible to prevent by employing ordinary diligence and such as to make impossible, objectively and absolutely and either totally or partially, the performance of any of the obligations under this Contract, provided that said events, acts, facts or circumstances:
|
(a)
|
are outside the control, either direct or indirect, of the Party invoking them;
|
(b)
|
could not have been avoided by employing the normal diligence requested by the nature of the activities performed by such Party; and
|
(c)
|
have been invoked by the same as Force Majeure events (“
Force Majeure
”).
|
11.2
|
Merely by way of an example, without limitation and on condition that they satisfy the requirements listed in Article 11.1 above, the Parties mutually acknowledge that the following events constitute causes of Force Majeure:
|
(a)
|
general and category and national and local strikes (other than the Contractor’s corporate strikes);
|
(b)
|
wars or any other hostile acts, including terrorist attacks, revolts, uprisings and other civil disorder;
|
(c)
|
blockages or embargoes, even of a financial nature;
|
(d)
|
exceptional, adverse natural phenomena, including direct lightning on the Plant equipments, whirlwinds, earthquakes, fires, floods, overflows, floods, drought, adverse weather conditions that impede the performance of the Works and which cannot be foreseen on the basis of weather forecast data for the current period, meteorites and volcanic eruptions;
|
(e)
|
explosions, radiation and chemical contamination.
|
11.3
|
The Contractor acknowledges and accepts that the following events do not constitute Force Majeure:
|
(a)
|
non-obtainment, revocation or non-renewal of any Applicable Permit for facts attributable to the Contractor; and
|
(b)
|
any delays in the delivery of supplies and materials by the suppliers; the Parties acknowledge in particular, without limitation, that delays in the supply of panels shall be fully attributable to the Contractor, and no arrangements or agreements currently in place between the Parties may be interpreted in such a way as to affect this circumstance.
|
11.4
|
Each Party shall immediately inform the other one, in writing, about the occurrence of a Force Majeure event that shall hinder his obligations and, in any case, within 48 (forty-eight) hours from becoming aware of the same, indicating the possible impact that said event might have upon the Project Implementation Schedule. The Party concerned shall also promptly inform the other one when said Force Majeure cause ceases. In the case of no or delayed communication as to the existence of the end of a Force Majeure cause, the Party in breach of his obligations shall be liable for the damage sustained by the other Party, which could have been avoided or limited, in the case of the timely receipt of the relevant communication.
|
11.5
|
The Contractor acknowledges and accepts that he shall not be entitled to request any increase in the Consideration or different compensation in relation to the Force Majeure event, except for the costs sustained to adopt the measures referred to in Article 11.7. Subject to the Principal and Financing Entity’s approval (which shall employ the Technical Consultant’s positive prior opinion), the terms established in the Project Implementation Schedule for the Works’ performance will be extended, further to the Contractor’s written request, for a period equivalent to the duration of the Force Majeure even and for the time required to put together the Equipment and stores of materials that have eventually been damaged.
|
11.6
|
Should the aforementioned Force Majeure events continue, uninterruptedly, for a period of more than 90 (ninety) natural, consecutive days, or for more than 120 (one hundred and twenty) natural, non-consecutive days, as accumulated during the period of time in which this Contract is in force, the Principal shall be entitled to terminate this Contract.
|
11.7
|
In any case, the Parties shall use their best endeavours to reduce the consequence of the Force Majeure event and shall do what they can to re-establish normal conditions and mitigate any damages eventually sustained by the other Party.
|
12.1
|
Technical Inspection – TAC.
Once the Electro-Mechanical Works are completed, the Contractor shall deliver to the Principal the notice of Electro-Mechanical Completion. This notice shall imply the suitability of the Plant to be prepared and tested for connection to the national electricity grid. Within 10 (ten) Working Days from the Principal having received said communication, the Parties, together with the Works Manager and the Site Manager, as well as the Technical Consultant appointed by the Principal and/or the Financing Entity, shall start the Technical Inspection, in accordance with the procedure set out in
Annex 10,
in order to verify that the Works have been carried out in accordance with the Technical Specifications, the Applicable Laws and in a world class manufacturing way. If the Technical Inspection is passed, the Principal shall sign the Technical Acceptance Certificate (TAC) substantially in the form attached in
Annex 11
. Should the
Technical Inspection not be passed, the Contractor shall remedy any defects found within a reasonable timeframe which shall be agreed by the Parties.
|
12.2
|
Operational Inspection - PAC.
Save as otherwise agreed in writing by the Parties, the Contractor shall not be entitled to connect the Plant to the national grid before the TAC has been issued. Upon Commencement of Operation, and in any case after TAC, the Contractor will be entitled to send to the Principal the Commencement of Operation notice as described in
Annex 11
. Within the shortest possible delay provided that the Plant has been continuously producing energy for a minimum period of 5 (five) consecutive calendar days with a maximum interruption of 2 (two) blank hours, the Parties, with the co-operation of the Works Manager and the Site Manager, as well as the Technical Consultant appointed by the Principal and/or the Financing Entity, shall begin the Operational Inspection according to the procedure described in
Annex 10
, and in the presence of the Technical Consultant. In order to start the Operational Inspection, the Contractor shall provide all the technical documentation required by the Principal and the Technical Consultant, the “
as built
” drawings of the Works, the instruction manuals and system maintenance documents. During the Operational Inspection, the Principal shall check if (i) the Works have been carried out in a world class manufacturing way and if (ii) they abide by the Technical Specifications and Applicable Law, and (iii) if the Plant performs in accordance with the MGPR. Should the
Operational Inspection not be passed, the Contractor shall remedy any defects found within a reasonable timeframe which shall be agreed by the Parties. Specifically in the case of non compliance of the Plant with the MGPR the Principal shall grant the Contractor, in writing, a period of no more than 10 (ten) Working Days from the relevant communication, within which the Contractor shall remedy said defects and/or carry out any necessary action to achieve a positive result of the Operational Inspection.
|
(a)
|
the Plant is connected in parallel to the distributor’s electricity grid;
|
(b)
|
all the meters required to calculate the energy produced, transferred or exchanged with the grid have been installed;
|
(c)
|
the Power Purchase Agreement is in force;
|
(d)
|
incentive request has been sent to the GSE in compliance with the terms indicated in Decree and GSE has approved the Plant’s admission to the applicable incentive (
comunicazione della tariffa incentivante
by GSE);
|
(e)
|
all obligations related to the regulation of access to the grid have been performed.
|
12.3
|
Transfer of ownership of the Plant in favour of the Principal shall occur on issuance of the Provisional Acceptance Certificate. Without prejudice to the foregoing, or to any Contractor's obligations hereunder, the risk related to the Plant shall not be transferred to the Principal (and therefore shall remain with the Contractor) until PAC and therefore, until execution of the PAC the Contractor shall bear any such risks, including in connection with any destruction, damages, theft or loss occurred to any Equipment.
|
12.4
|
On issuance of the Provisional Acceptance Certificate, the Contractor shall make the O&M Agreement operative in relation to the accepted Plant.
|
12.5
|
Incentive Acceptance Certificate
. The Principal shall issue the IAC as per
Annex 14
after having confirmed that all the following conditions have taken place:
|
(a)
|
Power Purchase Agreement is in force with reference to the collection of the electrical energy produced by the Plant;
|
(b)
|
Incentive Agreement is entered into with GSE in compliance with the terms foreseen by the Decree and the Principal has been informed about the Plant’s admission to the incentive tariff foreseen by the Decree.
|
12.6
|
Reassessment Tests.
The First Reassessment Test of the MGPR shall be performed, in accordance with the procedure described in
Annex 10,
12 (twelve) months after the PAC. The Second Reassessment Test of the MGPR shall be performed 24 (twenty four) months after PAC.
|
12.7
|
Final Acceptance Certificate
. The Principal, with the prior written consent of the Technical Adviser and of the Financing Entity, shall issue the Final Acceptance Certificate as per
Annex 15
upon the satisfaction of the following conditions,
|
·
|
the Plant has passed successfully the First and Second Reassessment Test and/or any related Performance Liquidated Damages have been paid by the Contractor.
|
·
|
IAC has been issued;
|
·
|
the O&M guarantee foreseen under the O&M Agreement is in place.
|
13.1
|
The Contractor shall warrant the Plant’s performances in compliance with the Technical Specifications and the MGPR as foreseen in
Annexes 6
and
9
for the period of 24 (twenty four) months after the issue of the PAC. The Contractor shall undertake, in any case, to promptly remedy the Plant’s lower performance after having checked it by means of the PV Plant monitoring system or having received from the Principal a written communication regarding the unsatisfying performance.
|
13.2
|
Should the effective performance ratio disclosed by the First Reassessment Test or by the Second Reassessment Test be less than the MGPR, the Contractor shall pay to the Principal Performance Liquidated Damages equal to:
|
(i)
|
Euro 8 (eight) per kWp, per each percentage point which is lower than the value indicated in the MGPR for the First Reassessment test;
|
(ii)
|
Euro 78 (seventy-eight) per kWp, per each percentage point which is lower than the value indicated in the MGPR for the Second Reassessment test.
|
13.3
|
Without prejudice to the above, the Contractor shall provide the Principal with a guarantee for any defects concerning the Executive Project and the Works in accordance with Article 1667 and 1669 of the Civil Code. The terms of said guarantee will come into force from the date of issuance of the PAC, in accordance with Article 12 above, for a period of 24 (twenty four) months. The terms to give notice with reference to defects are ruled by Articles 1667 and 1669 of the civil code. Accordingly, the Contractor shall during such time:
|
(a)
|
replace, repair and/or adjust any defective Equipment;
|
(b)
|
guarantee availability of spare parts.
|
13.4
|
In addition to the above, the Contractor shall also provide the following specific guarantees with regard to the photovoltaic modules:
|
(a)
|
install a guaranteed potential by means of the issue of "flash test" certification of the modules. The power effectively installed must reach the quantity established in the relative manuals, in compliance with the Technical Specifications. Otherwise, the Contractor shall be obliged to replace the faulty modules and/or install additional modules in order to reach the nominal power provided in Recital D;
|
(b)
|
a photovoltaic module efficiency guarantee for a minimum period of twenty years after the issue of the PAC, provided that the cumulative deterioration of the photovoltaic modules does not exceed, for the first 10 (ten) years, 10% (ten percent) and for the first 25 (twenty-five) years, overall, 20% (twenty percent). The relevant guarantee’s extension in compliance with the terms of the law has already been taken into consideration in calculating the MGPR.
|
14.1
|
The Contractor shall not be entitled to assign, either totally or partially, the Contract; however, the Contractor may be entitled to subcontract the performance of any portion of the Works to third parties, subject to the Principal’s prior written consent.
|
14.2
|
In the case of subcontracting, it is understood that the Contractor shall be totally and unconditionally liable to the Principal with reference to the complete, precise and punctual performance of the Contract, including with reference to the totality of the subcontracted works and the supplies (including the modules supplies) and also with reference to compliance with the provisions relative to remuneration and social security and the Works meeting the requirements established by this Contract.
|
14.3
|
In any case, each of the subcontractors shall abide by and comply with the provisions set forth in the PSC and the POS, since the Contractor shall be held directly liable to the Principal in relation to this compliance.
|
14.4
|
The Principal shall be entitled to assign this Contract any third company indicated by the Principal, and the Contractor expressly consents as from now to such assignment.
|
15.1
|
The Contractor, without prejudice to his own responsibilities, shall arrange, at his own total expenses, that the Principal enters into the following insurance policies with first-class insurance companies, with an S&P rating of no less than A- or equivalent or, in any case, that satisfies the Principal and the Financing Entity, if appointed, and maintain them operative for the entire period in which this Contract is in force. Said insurance policies must be submitted beforehand to the Principal and the Financing Entity, if appointed, for their approval:
|
(a)
|
Industrial accidents insurance in favour of the Contractor’s employees and/or any workers who are not the Contractor’s employees;
|
(b)
|
employers’ liability, with a minimum limit of no less than Euro 5,000,000.00 per event and 2,000,000.00 per person;
|
(c)
|
Insurance to cover third party civil liability, with a minimum limit per event of no less than Euro 5,000,000.00; the Principal and the Financing Entity, albeit maintaining the qualification of “third party”, must be inserted as “additional party insured” and there must be an explicit clause waiving the party’s insured recovery against the Principal, the Financing Entity and their employees and consultants;
|
(d)
|
Insurance to cover professional civil liability, with a minimum limit per event of no less than Euro 2,500,000.00;
|
(e)
|
Insurance to cover vehicle civil liability, for all owned vehicles and/or in use, which must be provided with the mandatory insurance policy as foreseen by the Law No. 990/69 and subsequent amendments and integration, for a minimum limit of no less than Euro 5,000,000.00 per accident;
|
15.2
|
The Contractor, without prejudice to his own responsibilities shall, at his own total expenses, enter into the following insurance policies, with first-class insurance companies, with an S&P rating of no less than A- or equivalent or, in any case, which satisfy the Principal and the Financing Entity, if appointed, and maintain them operative for the entire period in which this Contract is in force. Said insurance policies must be submitted beforehand to the Principal and the Financing Entity, if appointed, for their approval:
|
(a)
|
E.A.R. “Erection All Risks”
policy to cover the damages derived from the damage to total or partial destruction of the Works, which might occur while the Works are carried out. The cover shall also provide for cover for extended maintenance for a period of 24 months, the supply warranty, the section of third party civil liability (including the crossed liability between the participants and the works) and the advanced loss of profit section. The sum insured for the Works shall be equivalent to the Contract’s value, whilst the civil liability upper limit shall be no less than Euro 5,000,000.00 per accident;
|
(b)
|
transport policy to cover the material damages and aimed at the assets required to construct the Works, including the advanced loss of profit section. The cover shall run from the place of departure anywhere in the world until arrival care off the site where the works are performed.
|
15.3
|
The insurance policies provided under paragraphs 15.1 and 15.2 shall include the Financing Entity, if appointed, the Principal, and any other subcontractor among the insured parties. The Principal shall be entitled, at his own unquestionable judgement, to enter into other covers or policies in integration of and/or besides those foreseen by this Article 15, simply informing the Contractor of the same beforehand.
|
15.4
|
The Contractor acknowledges that the insurance cover referred to in Articles 15.1 and 15.2 may be object of encumbrance in favour of the Financing Entity. In this respect, the Contractor agrees that the Principle, at its discretion, may require that the insurance company issues an endorsement letter in favour of the Financing Entity, for the case that a Financing Entity is appointed. In addition the Contractor agrees to use reasonable endeavours to achieve any requirements of the Financing Entity relating to security over the insurance policies.
|
15.5
|
In any case, the amounts exceeding the upper limits and the indemnity limits insured, as well as the amounts corresponding to any type of excess liability relative to any policy shall be charged to the Contractor.
|
15.6
|
The Contractor shall be responsible for losses exceeding the insured limits and for policy deductibles. He shall also hold the Principal and the Financing Entity harmless from any claims for compensation for damages, liabilities, costs and expenses derived, directly or indirectly, from events covered by the insurance policies but which, for any reason whatsoever, are not compensated or by events that are not covered by the policies themselves.
|
15.7
|
It is understood between the Parties that the Principal shall, in any case, be free to commence legal proceedings against the Contractor to seek compensation of all the eventual and further damages that might result as not being covered by any policy and which can be ascribed to the Contractor by virtue of this Contract.
|
15.8
|
The Contractor shall deliver executed copy the aforementioned policies and evidence of the payment of the premiums for the entire duration of the relative period insured promptly after execution of this Contract and in any case within the terms foreseen in Article 8.3 and hereby undertakes not to make any changes to the policies without the Principal’s prior authorisation to do so. The Contractor shall also undertake to check that sub-contractors underwrite, for the entire duration of the Works, suitable insurance cover in compliance with Articles 15.1 and 15.2 above, charged to the Contractor himself.
|
16.1
|
The Principal, by means of the Works Manager, shall be entitled to suspend the Contract, either totally or partially, at any time whatsoever and on more than one occasion, by providing the Contractor with written communication of the suspension sent by registered mail with return receipt. Said suspension cannot, in any case, exceed, as a whole, the overall duration of 45 (forty-five) calendar days.
|
16.2
|
The Contractor shall be entitled to receive a refund for the costs and expenses sustained due to suspension, which shall be provisionally defined (in order to allow continuation of the Works) by the Works Manager, except for the Parties being entitled to object the Works Manager’s decision pursuant to Article 24. The Parties shall undertake, in any case, to provisionally apply the Works Manager’s decision.
|
16.3
|
In the case of suspension arising pursuant to this Article, the Parties have accepted that the Project Implementation Schedule may be amended in agreement between the Parties. This extension must be at least equal to the period of suspension.
|
17.1
|
The Principal shall be entitled, at any time whatsoever, to unilaterally withdraw from the Contract, informing the Contractor by means of notice sent by registered mail with return receipt.
|
17.2
|
In the case that the Principal’s exercises the unilateral withdrawal right referred to in the previous paragraph and save for Article 17.4 here below, the Principal shall pay the Contractor, in addition to the Consideration for the Works, performed up until that time, an indemnity equal to 10% (ten per cent) of the value of the outstanding Works.
|
17.3
|
The Contractor shall withhold any advance payment on the Consideration made by the Principal in compliance with the Payment Milestones, save for the Contractor’s right to claim payment of any further amounts due to the Contractor for all the Works that have been carried out until receipt of the withdrawal notice.
|
17.4
|
The Principal shall be entitled to withdraw from the Contract pursuant to the above, should the Applicable Law change or should a Force Majeure event occur which renders the construction of the Plant impossible, save for the provision of Article 11.3. However, in this case and in derogation to what has been foreseen in Article 17.2, the Contractor shall only be entitled to payment of the consideration due for the Works carried out until the delivery of the withdrawal notice, excluding any indemnity for the part of the Works that have not been performed.
|
17.5
|
Should the Principal withdraw from the Contract, it shall promptly return the Parent Company Guarantee and the Bank Bond to the Contractor.
|
18.1
|
Without prejudice to any other provisions of this Contract, the Principal shall be entitled to terminate the Contract pursuant to Article 1456 of the Civil Code (
clausola risolutiva espressa
), by giving notice to the Contractor no later than 30 (thirty) calendar days of the Principal becoming aware of any of the following circumstances:
|
(a)
|
non-delivery of the Parent Company Guarantee and/or Bank Bond and/or Warranty Bond and/or non arrangement of all the insurance policies to the Principal within the terms foreseen in Article 15 of this Contract and in compliance with the conditions foreseen therein, and/or the Contractor’s breach of its obligation of maintaining the Parent Company Guarantee and/or Bank Bond and/or Warranty Bond and/or insurance policies in force, at its own expense, in compliance with the terms and conditions foreseen in this Contract;
|
(b)
|
any of the representations or warranties provided in Article 5 is imprecise, untrue or misleading;
|
(c)
|
any Applicable Permit already obtained are not successfully transferred to the Principal pursuant to art. 4.2.(a);
|
(d)
|
failure by the Contractor to procure that the Principal (or any third Party indicated by the Principal) acquires the Land Rights and the Applicable Permits (excluding the Q-2 Incentives) within 10 (ten) days of execution hereof;
|
(e)
|
cancellation, revocation or suspension of the AU, STMD, or any Applicable Permit for any reasons whatsoever, unless attributable to the Principal’s gross misconduct or malice;
|
(f)
|
failure by the Contractor to deliver to the Principal the documentation required to be admitted to the Q-2 Incentives within 20 (twenty) days of the Commencement of Operation;
|
(g)
|
non-admission to the Q-2 Incentive or any case of non-entry into force of the Incentive Agreement, for any reason whatsoever, including but not limited to Force Majeure or changes in the Applicable Law;
|
(h)
|
the Contractor has exceeded the maximum limit of Liquidated Damages and/or Penalties foreseen pursuant to Articles 9 and 13;
|
(i)
|
failure to pass the Operational Inspection and/or non-issue of PAC by 31 May 2011;
|
(j)
|
failure to pass the Reassessment Tests;
|
(k)
|
failure to satisfy the condition in Article 12.7 and consequent non-issue of the FAC within 24 months from the issuance of the PAC.
|
18.2
|
The Principal shall be entitled to send the Contractor notice to perform within the terms of no less than 30 (thirty) calendar days from receipt of the relevant notice (or any longer terms that are considered to be appropriate by the Principal in relation to the circumstances), pursuant to Article 1454 of the Civil Code in all events of the Contractor’s breach, other than those referred to in Article 18.1 above, of his obligations, pursuant to this Contract. Should the Contractor not perform within such terms, the Principal shall be entitled to declare the Contract terminated.
|
18.3
|
The Parties declare that the identity of the Contractor was a material condition for the execution of the Contract and accordingly the Contract shall be terminated pursuant to Article 81 of the Italian Bankruptcy Law (R.D. 267/1942 as amended and/or integrated from time to time), if the Contractor becomes bankrupt or insolvent, goes into liquidation, has a receiving or administration order made against it, compounds with its creditors, or carries on business under a receiver, trustee or manager for the benefit of his creditors, or if any act is done or event occurs which (under Applicable Law) has a similar effect to any of these act or events, unless the Principal consents to continuation of the Contract..
|
19.1
|
In the case of the Principal’s breach of its obligations pursuant to this Contract, the Contractor shall be entitled to send the Principal and the Financing Entity, if appointed, notice to perform within the terms of 30 (thirty) calendar days of receipt of such notice, pursuant to Article 1454 of the Civil Code. The Contractor acknowledges and accepts that termination of the Contract due to facts attributable to the Principal cannot, in any case whatsoever, be declared or requested unless notice demanding performance is sent to the Principal, with the Financing Entity in copy, pursuant to this Article.
|
19.2
|
The Contract shall be terminated pursuant to Article 81 of the Italian Bankruptcy Law (R.D. 267/1942 as amended and/or integrated from time to time), if the Principal becomes bankrupt or insolvent, goes in liquidation, has a receiving or administration order made against it, compounds with its creditors, or carries on business under a receiver, trustee or manager for the benefit of his creditors, or if any act is done or event occurs which (under Applicable Law) has a similar effect to any of these act or events, unless the Contractor consents to continuation of the Contract.
|
20.1
|
In the case of termination of the Contract attributable to the Contractor, in any of the events foreseen by the Applicable Law or by this Contract, the Principal shall be entitled to receive from the Contractor, save for any further damages, payment of a termination penalty equal to 10% (ten percent) of the value of the remaining Works, to be determined in the value of the Consideration less the amounts of the Payment Milestones become due on the time of termination. The Principal shall also be entitled to receive from the Contractor the refund of the amounts corresponding to the balance of the payments which have not been up to that time allocated to the subsequent Works.
|
(a)
|
prepare a report of completed Works setting forth the value thereof, in which case, upon termination, without prejudice to any provisions of this Contract, the Principal shall have the right to:
|
i.
|
keep the completed Works, in which case the Contractor shall promptly abandon the Area and the ownership of any completed Works shall be automatically transferred to the Principal if not already transferred; or alternatively,
|
ii.
|
reject the Works, in which case the Contractor shall dismantle the Works bearing the relevant costs and expenses and return to the Principal any payment of the Consideration received, plus interest in accordance with Article 1224 of the Italian Civil Code.
|
(b)
|
quantify the amount of any and all penalties, Delay Liquidated Damages, Discounts, etc, owed by the Contractor to the Principal, in which case the Principal shall prepare a statement of amounts due to the Principal less any amounts due to the Contractor under this Contract; the statement of amounts outstanding shall be sent to the Contractor which shall send its observations to the Principal within ten (10) days. Failure to send observations within such ten-day period shall be deemed consent to the statement of amounts due to the Principal. Payment of the amounts indicated in the previous paragraph shall be made within 7 (seven) calendar days of receipt of the above-mentioned statement, and the Principal shall be entitled to enforce the Parent Company Guarantee and/or the Warranty Bond to recover any such amounts. In the event that the Contractor disputes the statement of the Principal within ten (10) days, and the Parties fail to reach an amicable settlement, the dispute shall be settled in accordance with Article 24 hereof. As soon as Contractor pays the amount due, Principal shall return the Parent Company Guarantee and the Warranty Bond. On the contrary, where Contractor fails to pay the amount due pursuant to the above statement, Principal shall be entitled to enforce the Parent Company Guarantee and/or the Warranty Bond;
|
(c)
|
have the Area vacated by the Contractor, at his own expenses, from all the material, equipment and machinery belonging to him and from any rubble, debris and rubbish within 15 (fifteen) days of termination.
|
20.2
|
In the case that the incentive provided under applicable law for Plants that achieve Commencement of Operations after 31 May 2011 drops more than 10% (ten per cent) than the value of the Q-2 Incentive, the Principal shall be entitled, by giving written notice to the Contractor within 5 (five) Working Days of the publication of the incentive replacing the Q-2 Incentive, to either:
|
(a)
|
immediately terminate the Contract in accordance with this clause 20.2; or
|
(b)
|
inform the Contractor that it will terminate the Contract unless the Contractor declares in writing within 3 (three) Working Days of receipt of such notice that it is able to achieve Commencement of Operations within 31 May 2011, being it understood that even in such case should Commencement of Operations be not achieved within 31 May 2011 the Principal shall be entitled to terminate the Contract in accordance with this clause 20.2;
|
20.3
|
In the case of termination attributable to the Principal, the Principal shall take definitive delivery of the Works that have been constructed up to the time of termination and the Contractor shall be entitled to withhold any payment made by the Principal in compliance with the Payment Milestones pursuant to Article 4, save for the Contractor’s right to claim payment of any further amounts due to the Contractor for all the Works that have been carried out until termination. On the Principal’s request, the Contractor shall vacate the Area and the site from all the materials, equipment and machinery that belongs to him at the Principal’s expenses and provide for the removal of any rubble, debris and rubbish. On payment of the amounts due to the Contractor, the Principal shall acquire title over the Plant in the status in which it was on termination.
|
20.4
|
Furthermore, in the event of termination attributable to the Principal, the Principal shall immediately return to the Contractor the Parent Company Guarantee and the Bank Bond or the Warranty Bond, as the case may be.
|
21.1
|
Each Party declares that:
|
(a)
|
the Confidential Information, in any form in which it comes to the knowledge of the Parties, shall not be disclosed, in any case whatsoever, either totally or partially, to any third parties except where, further to termination of the Contract, the Contractor shall have to be replaced with another individual or entity in order to complete the Plant, in which case the Confidential Information may be disclosed to the individual appointed to the complete the Works object of this Contract;
|
(b)
|
said Confidential Information shall not be used for any purposes that is not solely and exclusively related to (i) the performance of this Contract or (ii) the drafting of a prospectus addressed to a fund of the Plant.
|
21.2
|
The Confidential Information may only be disclosed to the Parties' shareholders, the directors, executives, employees or consultants employed by the Party receiving the Confidential Information, and the Technical Consultant and the Financing Entity.
|
21.3
|
Neither of the Parties shall be entitled to make any declarations or announcements to third parties, the press or, in general, to the media, in relation to the Contract, without having received the other Party’s prior, written authorisation, with the exception of the disclosure required by the Applicable Law or by the law applicable to the Principal or to the Principal’s group.
|
21.4
|
The provisions contained in this Article 21 shall be effective from the date on which this Contract is entered into or from the date of the first communication of said Confidential Information and shall remain in force even after expiry of this Contract.
|
22.1
|
This Contract cannot be amended or integrated, in any way whatsoever, unless by means of a written agreement between the Parties.
|
22.2
|
The Contractor is aware that the Financing represents a priority for the Principal and represents that the project (including both the EPC and O&M Agreement) is at the time of execution technically and legally bankable. In particular, the Contractor is aware that the Financing Entity may require: (i) a Warranty Bond after PAC, in the form of an autonomous and first demand bank bond covering 15% (fifteen per cent) of the Consideration; (ii) cross default clauses in the event that the Financing covers more than one EPC contract. The Contractor shall encounter such expectations, provided that they are reasonable and substantially in line with the banking standards practiced at the date of execution hereof. In addition, the Contractor shall provide all good faith cooperation as to obtain the Financing in the case that banking standards practiced at the time Financing is negotiated are substantially different from banking standards practiced at the date of execution hereof.
|
22.3
|
The Parties declare that future EPC contracts that they may enter into in the future shall be regulated,
mutatis mutandis
, in accordance with the terms and conditions of this Contract, save as otherwise agreed.
|
22.4
|
In the case that any provision contained in this Contract is declared invalid on the basis of the Applicable Law by a judge or a board of arbitration, this shall not entail the entire Contract being void, it being understood that the Parties shall promptly meet in order to replace the invalid provision with another one which respects, as much as possible, its meaning.
|
22.5
|
The Contractor shall not assign the receivables derived from this Contract to any third parties without the Principal’s prior written consent, it being understood that the term, “third parties”, also implies the companies belonging to the same group as the Contractor.
|
22.6
|
Any communication requested or consented in relation to this Contract must be made in writing and must be (i) delivered by hand, (ii) sent by registered mail with return receipt, or (iii) sent by fax. Any communication shall be considered as having been received (i) if delivered by hand, on its delivery to the addressee Party, (ii) if sent by registered mail with return receipt, on the date indicated in said notice, and (iii) if sent by fax, on receipt of confirmation of sending provided by the fax transmitting it. All communications shall be sent to the following addresses:
|
22.7
|
The risk related to the event referred to in Article 1664 of the Civil Code has been fully and knowingly undertaken by the Contractor. The risk relative to the event referred to in Articles 1660 and following of the Civil Code shall be attributed to the Contractor within the limits agreed in Article 10 of the Contract.
|
22.8
|
The Principal shall be entitled to offset any debt and/or credit that it may have towards the Contractor against respectively any credit and/or debt that the Contractor may have towards the Principal or any other company belonging to the same corporate group as the Principal, at any title whatsoever.
|
23.1
|
The Technical Consultant shall act in the interests of the successful outcome of the Plant in his capacity as technical adviser in the exclusive interests of the Principal and/or the Financing Entity. The Technical Consultant shall have access to the Works, the Area the project documentation and the one relating to the Works’ performance.
|
23.2
|
The Technical Consultant shall be entitled to employ third parties to perform his duties provided that, in this instance, he shall procure that said employees comply with the rules in force on site and given by the Contractor or Works Manager.
|
24.1
|
The Parties undertake to amicably resolve any dispute arising out of or in connection with the interpretation, validity, performance and termination of this Contract.
|
24.2
|
In case of any technical dispute between the Parties in any matter relating
inter alia
to the achievement of a Payment Milestone, the extension of the Project Implementation Schedule, the Commencement of Operation (
entrata in esercizio
), the Technical Inspection, Operational Inspection, the First Reassessment Test and the Second Reassessment Test, the Variation procedure or any change in Applicable Law, the Parties can mutually agree to request the appointment of a technical expert (the "
Expert
") to settle the dispute. The proposal for the appointment of the Expert shall state in detail the technical question and include a list of at least three persons proposed for the appointment as Expert. The Parties agree to meet and discuss on the appointment of the Expert during the following ten (10) Working Days after receipt of the request. In the case that the Expert is not appointed by the Parties within fifteen (15) Working Days after the request, the Expert shall be appointed by the Chairman of the bar of the Engineers of Milan (
Ordine degli Ingegneri di Milano
) upon request of either Party. The Expert shall finally determine the technical matter in accordance with the provisions of this Contract, acting as arbitrator pursuant to Article 1349 of the Italian Civil Code. The Expert shall deliver its determination to the Parties in writing, including an explanation of the underlying reasons, within thirty (30) calendar days after the acceptance of the mandate. The Expert's determination shall (in the absence of patent error or unfairness) be final and binding upon the Parties. The costs of the determination, including fees and expenses of the Expert, shall be borne as determined by the Expert.
|
24.3
|
Without prejudice to Article 24.2 above, in all the other cases where an amicable solution to the disputes cannot be reached, the settlement of said disputes shall be referred to a Board of Arbitration formed of 3 (three) arbitrators, 1 (one) of whom who shall act as the President, in accordance with the National Arbitration Chamber of Milan’s Rules of International Arbitration, which the Parties have declared that they are aware of and fully accept.
|
24.4
|
The Board, which shall sit in Milan, shall decide under the procedure and law within 4 (four) months of it being formed. The award shall become immediately enforceable. The award’s registration costs shall be borne by the non prevailing Party.
|
/s/ Ran Fridrich
|
/s/ Vicente Zaragoza Zaragoza
|
|
Ran Fridrich
|
Vicente Zaragoza Zaragoza
|
|
PRINCIPAL
|
CONTRACTOR
|
Annex 1:
|
Land Rights Agreement
|
Annex 2:
|
Area Map
|
Annex 3:
|
Equipment
|
Annex 4:
|
Definitive Project
|
Annex 5/A:
|
Bank Bond
|
Annex 5/B:
|
Parent Company Guarantee
|
Annex 5/C:
|
Warranty Bond
|
Annex 6:
|
Technical Specifications
|
Annex 7:
|
Project Implementation Schedule
|
Annex 8:
|
Safety Costs
|
Annex 9:
|
Minimum Guaranteed Performance Ratio
|
Annex 10:
|
Testing Procedures
|
Annex 11:
|
Technical Acceptance Certificate model
|
Annex 12:
|
Commencement of Operation notice model
|
Annex 13:
|
Provisional Acceptance Certificate model
|
Annex 14:
|
Incentive Acceptance Certificate model
|
Annex 15:
|
Final Acceptance Certificate model
|
1. Execution date
|
March 18, 2011
|
2. Grantor
|
Ms. Rosa Addario Malcangio
|
3. Grantee
|
Pedale S.r.l.
|
4. Land plot identification
|
Municipality of Corato (BA), sheet 81, parcels 236 and 54, size:
13.59.52 ha.
|
5. Duration
|
1 year
|
6. Extension and Renewal
|
The Grantor grants to the Grantee the option to set up a 20-year
superficie
right. The Grantee shall exercise the option by registered letter.
The Parties shall execute a deed of confirmation of the setting up of the 20-year
superficie
right within 30 days of the exercise of the option right.
Upon the expiry of the 20 year period, the
superficie
right shall be renewed for further 4 years, upon the Grantee’s request, to be submitted by registered letter by no later than 60 days before the expiry date.
|
7. Consideration
|
The consideration for the one-year
superficie
right is equal to
Euro 80,000.00
,
which has been paid upon execution of the agreement.
The consideration for the 20-year
superficie
right is equal to
Euro 630,000.00
and shall be paid in advance by 14 yearly instalments of Euro 45,000.00 by bank transfer. The payments shall be made by April 1 of each year.
The consideration for the 4-year renewal shall be equal to the last annual payment increased by a percentage of 100% of the Italian average inflation rate for the duration of the renewal.
|
8. Consideration adjustment
|
No adjustment to the 20-year consideration is foreseen.
The consideration for the 4-year renewal shall be increased by a percentage of 100% of the Italian official inflation rate (ISTAT).
|
9. Withdrawal / termination right (Grantee)
|
The Grantee shall be entitled to withdraw from the agreement, at any time whatsoever, by means of 6 month prior notice.
Should the Grantor carry out any works on the neighbouring lands owned by the Grantor which might reduce the PV Plant’s power and efficiency, the Grantee shall be entitled to terminate the agreement or, alternatively, to request that any such work be removed / restored to its previous state.
Moreover, the Grantee shall be entitled to terminate the agreement should the Grantor refuse to sign any documents necessary for the construction and operation of the PV Plant.
|
10. Withdrawal / termination right (Grantor) - Step in-clause
|
Should payment of the consideration be delayed for over 3 months, the Grantor shall send written notice to the Grantee and to the bank indicated by the Grantee. Within 30 days of receipt of the above-mentioned notice, the bank shall be entitled to (i) appoint a third party that will replace the Grantee in the agreement, or (ii) inform the Grantor of its intention to cure, directly or through the Grantee, the breach of contract giving rise to the termination. In such events, the Grantor shall be entitled to terminate the agreement, provided that the Grantee has not cured the non-fulfilment within 30 days of the appointment of the third party replacing the Grantee or, as the case may be, of the receipt by the Grantor of the bank’s notice. Regardless of any breach of contract by the Grantee, the bank shall have the faculty to appoint a third party in place of the Grantee in the event that the bank has informed the Grantee of its intention to declare the forfeiture of the term (
decadenza del beneficio del termine
) according to art. 1186 of the Italian Civil Code, or to terminate for breach of contract or to withdraw from the loan agreement.
|
11. Easements
|
The Grantor consents to grant and constitute all the easements for the PV Plant to operate and to be constructed (passage, access and electrical easement) and, especially, an electrical easement over parcel 70, sheet 81.
|
12. Penalties
|
The Grantee shall pay a penalty of Euro 45,000.00 + consideration for the year in course in case of withdrawal from the agreement.
The Grantor shall pay a penalty of Euro 1,000.00 for each day on which it does not permit access to the Land.
|
13. Guarantee
|
None.
|
14. Plant removal
|
At the expiry of the agreement, at the Grantee’s expense.
|
15. Assignment
|
The Grantee shall be entitled at any time whatsoever to assign any obligation arising from the agreement, or to grant the use of the Land or the PV Plant to any third party by sending the relevant notice to the Grantor.
|
16. Pre-emption
|
Should the Grantors decide to sell the Land, it shall send the Grantee notice indicating the terms and conditions of the sale. The Grantee shall exercise its pre-emption right for the purchase of the Land by sending a letter within 60 days of receipt of the notice of sale.
|
17. Competent Court
|
Court of Trani.
|
A.
|
on [ ], [ ] as principal (hereinafter indicated as
Beneficiary
), and Urbe Techno S.r.l., as contractor (hereinafter indicated as
Contractor
), entered into a turn key contract (the
EPC Contract
) for the construction
inter alia
of a photovoltaic plant to be located in the province of [ ], Italy, in the Municipality of [ ], made up of [ ] panels made of [ ], with a generator with a capacity equivalent to [•] KWp (hereinafter the
Plant
);
|
B.
|
under the EPC Contract the Contractor shall be fully responsible for the design, supply, construction, assembly, start-up, operation and maintenance of the Plant;
|
C.
|
The EPC Contract provides,
inter alia
, for the payment of a consideration of Euro [ ] ([ ]/00) per kWp, plus VAT (hereinafter known as the
Consideration
);
|
D.
|
pursuant to Articles 4.2 of the EPC Contract, the Contractor undertook to deliver the Beneficiary a first demand Bank Bond in the mount of Euro [ ] (in words [ ]/00) per kWp, equal to 10% (ten per cent) of the BoS Consideration (the
Guaranteed Amount
), issued by a primary and leading financial institution, to guarantee the due performance of the obligations undertaken by the Contractor under the EPC Contract;
|
E.
|
pursuant to Article 5.4 of the EPC Contract, the Contractor agrees that the Beneficiary assigns and/or pledges all receivables arising from the EPC Contract in favour of the Financing Entity, as defined in the EPC Contract
;
|
F.
|
the definitions used in the EPC Contract shall apply also hereto, unless the context otherwise requires.
|
1.
|
We, [●] (the
Guarantor
), hereby irrevocably and unconditionally undertake to the Beneficiary that, forthwith upon the Beneficiary giving written notice to us (the
Request
), copied to the Contractor, duly signed by an authorised representative of the Beneficiary, countersigned by the Financing Entity, stating that the Contractor has failed to duly perform any of the obligations undertaken under the EPC Contract, notwithstanding any objection that may be raised by the Contractor, we shall pay within 3 (three) working days upon receipt by us of the Request, to the Beneficiary or to the Bank, any sum or sums as the Beneficiary may in such Request require, provided that such amount shall not exceed the Guaranteed Amount.
|
2.
|
The Guarantor shall exclusively rely on the Request and shall not carry out any further analysis of the reasons standing behind the Request or further verification or check of its consents.
|
3.
|
Pursuant to Article
4.2 of the EPC Contract, the Bank Bond shall be replaced by a bank guarantee equal to 10% of the Consideration (the
Warranty Bond
), upon execution of the PAC.
|
4.
|
This Bank Bond will come into force as soon as the Payment Milestone 2 is received on following bank account of the Contractor [
insert bank details
] and shall expire on [
insert date corresponding to 12 months from its entry into force
] or, on the date the Guarantor will receive a notice sent by the Contractor and countersigned by the Beneficiary and the Financing Entity confirming that this Bank Bond has been replaced with the Warranty Bond delivered to the Beneficiary, whichever is earlier (the
Expiry Date
). After the Expiry Date this Bank Bond shall be considered automatically and definitively null and void irrespective of whether the present document is returned to us or not.
|
5.
|
This Bank Bond may be partially or totally enforced;
in case of partial enforcement the maximum Guaranteed Amount shall automatically be reduced proportionally.
|
6.
|
Any payment by us hereunder shall be in immediately available and freely transferable Euro free and clear of and without any deduction for or on account of any present or future taxes, levies, imposts, duties, charges, fees, set-off, counterclaims, deductions or withholdings of any nature whatsoever and by whomsoever imposed.
|
7.
|
Our obligations hereunder constitute direct primary, irrevocable and unconditional obligations, shall not require any previous notice to or claim against the Contractor and shall not be discharged or otherwise prejudiced or adversely affected by:
|
i.
|
any time, indulgence, waiver, concession or forbearance which the Beneficiary may grant to the Contractor or any neglect by the Beneficiary in enforcing any right of action or remedy the Beneficiary may have against the Contractor under the EPC Contract;
|
ii.
|
any amendment, modification or extension which may be made to the EPC Contract;
|
iii.
|
any change in the corporate structure of the Contractor;
|
iv.
|
any termination of the EPC Contract or of the employment of the Contractor;
|
v.
|
any other bond, security or Bank Bond held or obtained by the Beneficiary for any of the obligations of the Contractor under the EPC Contract or any release or waiver thereof';
|
vi.
|
any act or omission of the Contractor under any other arrangement with ourselves;
|
vii.
|
any invalidity or ineffectiveness of the EPC Contract;
|
viii.
|
any other matter or thing which in the absence of this provision would or might have discharged, affected or prejudiced our obligations hereunder except for a discharge or amendment of this Bank Bond expressly made or agreed to by the Beneficiary in writing.
|
8.
|
For the avoidance of doubt, this Bank Bond shall remain valid notwithstanding any inability or failure on our part to exercise our rights of subrogation which we may have against the Contractor as a result of making any payment under this Bank Bond.
|
9.
|
We acknowledge and consent, as of the date hereof, also for the purposes of Article 1248 of the Italian Civil Code, that the benefits arising from this Bank Bond in favour of the Beneficiary may be assigned, together with relevant credit’s rights, by the Beneficiary to the Financing Entity, with simultaneous written communication to us and to the Contractor.
|
10.
|
We also consent for the purpose of Article 1407 of the Italian Civil Code that this Bank Bond, together with relevant credit rights, can be assigned to an “eligible person” which is a person that is notified to us by the Beneficiary and/or the Financing Entity in writing (the
Eligible Person
), with prior written notice to us.
|
11.
|
Any notice hereunder shall be deemed as duly given when delivered in writing by registered letter with advice of receipt (
Raccomandata A.R.
), or by express courier
to our registered office in [●] and shall be duly signed by an authorised representative of the Beneficiary.
|
12.
|
The Guarantor accepts and acknowledges that in the event of
enforcement of this Bank Bond, its subrogation right towards the Contractor is subject to the satisfactory fulfilment of all the
Beneficiary’s
credit obligations towards the Contractor, pursuant to the EPC
Contract.
Therefore, the Guarantor expressly waives article 1949 of Civil Code.
|
13.
|
This Bank Bond is a
Garanzia Autonoma a Prima Richiesta
and implies, whether necessary, a waiver, among other things, to the benefits, rights and exceptions under Articles 1247, 1939,
1944,
1945,
1950,
1953, 1955 and 1957 of the Civil Code.
|
14.
|
All the costs (including legal fees) and all the fiscal expenses (including those related to stamp duty and registration fees) due pursuant to Italian law in relation to this Bank Bond shall be charged to the Guarantor. Any amendment to this Bank Bond shall be ineffective unless approved in writing by the Beneficiary and the Guarantor.
|
15.
|
This Bank Bond shall be governed by and construed in accordance with Italian law. The courts of Milan, Italy, shall have exclusive jurisdiction of all matters arising out of or in connection with this Bank Bond.
|
|
The Guarantor
___________
|
(A)
|
By an agreement dated [
l
] 2011 (the
Contract
, which term includes all amendments to variations of or supplements to it from time to time in force) the Principal has agreed to engage [ ] (the
Contractor
) for the design, supply, construction, assembly and start-up of a photovoltaic plant to be located in the Municipality of [ ] ([ ], Italy). Unless the context otherwise requires, words and expressions defined in the Contract have the same meaning when used in this Guarantee, as defined below.
|
(B)
|
According to the Contract, Contractors shall procure the delivery to Principal of a consolidate parent companies guarantee in the form of this guarantee (the
Guarantee
) within 5 (five) Working Days of execution of the Contract and in any case before having received the first payment milestone.
|
(C)
|
The Guarantors have agreed to guarantee the due performance of the Contract by the Contractor.
|
(D)
|
The Guarantors are the Contractor’s Parent Companies, as defined in the Contract.
|
1.
|
Each of the Guarantors:
|
|
(a)
|
guarantees to the Principal, as primary obligor and not as surety, the due and punctual performance by the Contractor of each and all of the obligations, warranties, duties and undertakings of the Contractor under the Contract when such obligations, duties and undertakings shall become due and performable according to the terms of such Contract;
|
|
(b)
|
agrees, in addition to its obligations set out in clause 1(a) above, to indemnify the Principal against all losses, damages, costs and/or expenses which the Principal may incur by reason of any breach by the Contractor of its obligations, warranties, duties and undertakings under the Contract save that this shall not be construed as imposing greater or different obligations or liabilities on the Guarantor than are imposed on the Contractor under the Contract; and
|
(c)
|
agrees to indemnify the Principal on demand against any loss or liability suffered by it if any obligation guaranteed by the Guarantor is or becomes unenforceable, invalid or illegal as if the obligation guaranteed had not been unenforceable, invalid or illegal provided that each of Guarantor's liability shall be no greater than the Contractor's liability would have been if the obligation guaranteed had not become unenforceable, invalid or illegal.
|
2.
|
The liability of the Guarantors under this Guarantee shall not be reduced or discharged by any act, omission or other thing whereby (in absence of this provision) the liability of the Guarantor under this Guarantee would or might be reduced or discharged in whole or in part as a consequence of:
|
(a)
|
any amendment to the obligations undertaken by the Contractor whether, by way of any addendum or variation referred to in clause 3 below, any suspension of the Works, extension of the time or otherwise; or
|
(b)
|
amendment to, or any variation, waiver or release of, (any part of) the Contract or any security or other guarantee in respect thereof; or
|
(c)
|
the termination of the Contract under the Contract attributable to the Contractor; or
|
(d)
|
any legal limitation, incapacity or other circumstances relating to the Contractor or any other person; or
|
(e)
|
the dissolution, amalgamation, change in status, function, control or ownership, insolvency, liquidation or the appointment of an administrator or receiver of the Contractor or any other person.
|
3.
|
In the event of change in control or ownership of the Contractor, the Guarantee shall remain in full force and effect. In the event of change in control or ownership of the Contractor, the Guarantors shall promptly notify to the Principal the name of the new controlling person or owner of the Contractor.
|
4.
|
By this Guarantee the Guarantors authorise the Contractor and the Principal to make any addendum, variation or amendment to the Contract, the due and punctual performance of which addendum and variation shall be likewise guaranteed by the Guarantors in accordance with the terms of this Guarantee.
|
5.
|
This Guarantee shall be a primary obligation of the Guarantors to perform or to take whatever steps may be necessary to procure the performance of the obligations of the Contractor under the Contract which have been breached, to assume jointly and severally with the Contractor all rights and obligations of the Contractor under the Contract and to pay the Principal from time to time any and all sums of money which the Contractor is at any time liable to pay to the Principal under the Contract; accordingly the Principal shall not be obliged before enforcing this Guarantee to take any action in any court or arbitral proceedings against the Contractors, to make demand or any claim against the Contractor, to enforce any other security held by it in respect of the obligations of the Contractor under the Contract or to exercise, levy or enforce any distress, or other process of execution against the Contractor.
|
6.
|
Each of the Guarantors shall bear the obligations provided under this Guarantee on a joint and several basis, this implying, for the avoidance of doubt, that the Principal shall be entitled to enforce this Guarantee against any or both Guarantors for any amount up to the Maximum Guaranteed Amount, as defined below.
|
7.
|
The maximum amount guaranteed by the Guarantor under this Guarantee shall be equal to the Consideration (the
Maximum Guaranteed Amount
).
|
8.
|
This Guarantee shall be effective upon delivery and shall expire 7 (seven) days following the FAC (the
Expiry Date
). Upon the Expiry Date, this Guarantee must be returned to us for cancellation.
|
9.
|
Until all amounts which may be or become payable under the Contract or this Guarantee have been irrevocably paid in full, the Guarantors shall not, as a result of this Guarantee or any payment or performance under this Guarantee, be subrogated to any right or security of the Principal or claim or prove in competition with the Principal against the Contractor or any person or demand or accept repayment of any monies or claim any right of contribution, set-off or indemnity and any sums received by the Guarantors or the amount of any set-off exercised by the Guarantors in breach of this provision shall be held by the Guarantors in trust for and shall be promptly paid to the Principal.
|
10.
|
The Guarantors shall not hold any security from the Contractor in respect of this Guarantee and any such security which is held in breach of this provision shall be held by the Guarantors in trust for and shall promptly be transferred to the Principal.
|
11.
|
Each payment to be made by the Guarantors under this Guarantee shall be made in Euro, without any set off or counterclaim and free and clear of all deductions or withholdings of any kind whatsoever or howsoever arising. Should any deduction or withholding be made by law (including double taxation treaties) the Guarantors will pay that additional amount which is necessary to ensure that the Principal receives on the due date a net amount equal to the full amount which it would have received if the payment had been made without the deduction or withholding. The Guarantors shall promptly deliver to the Principal any receipts, certificates or other proof evidencing the amounts paid or payable in respect of any such deduction or withholding.
|
12.
|
The Guarantors shall have 5 (five) Working Days from the date of demand to make payment in full to the Principal of any amount due under this Guarantee. The Guarantors shall pay interest on any amount due under this Guarantee from the date which is 5 (five) Working Days from the date of demand until the date of payment in full (as well after as before any judgment) calculated on a daily basis at the six months Euribor plus 3 (three) percentage points.
|
13.
|
The Guarantors shall reimburse the Principal for all legal and other costs (including non-recoverable VAT) incurred by the Principal in connection with the enforcement of this Guarantee.
|
14.
|
Any settlement or discharge between the Principal and the Contractor or the Guarantors shall be conditional upon no order to refund by virtue of any provision of any enactment relating to bankruptcy, insolvency or liquidation being issued by a competent court, in which case the Principal shall be entitled to recover from the Guarantor as if such settlement or discharge had not occurred.
|
15.
|
The Guarantors warrant that this Guarantee is a legally binding obligation, enforceable in accordance with its terms, and that all necessary consents and authorisations for the giving and implementation of this Guarantee have been obtained.
|
16.
|
The Guarantors warrant and undertake to the Principal that it shall take all necessary action directly or indirectly to perform the obligations expressed to be assumed by it or contemplated by this Guarantee and to implement the provisions of this Guarantee.
|
17.
|
The Guarantors warrant and confirm to the Principal that it has not entered into this Guarantee in reliance upon, nor has it been induced to enter into this Guarantee by any representation, warranty or undertaking made by or on behalf of the Principal (whether express or implied and whether under statute or otherwise) which is not set out in this Guarantee.
|
18.
|
The Guarantors acknowledge and consent, also for the purposes of Article 1407 of the Italian Civil Code, that the Principal shall be entitled by notice in writing to the Guarantors to assign this Guarantee at any time in connection with an assignment of the Contract in accordance with the provisions of the Contract, to the Financing Entity.
|
19.
|
Any notice hereunder shall be duly given when delivered in writing by hand (in the case of personal delivery) or by registered letter with advice of receipt (
Raccomandata A.R.
), or by express courier
to the Guarantors or by facsimile, provided an original of such facsimile is also received by us within three (3) Working Days and sent by one of the aforementioned notice methods and shall be duly signed by an authorised representative of the Principal.
|
20.
|
No delay or omission of the Principal in exercising any right, power or privilege under this Guarantee shall impair or be construed as a waiver of such right, power or privilege nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise of such right, power or privilege or the exercise of any other right, power or privilege.
|
21.
|
Without prejudice to Article 1419 (
nullità parziale
) of the Italian Civil Code, if - at any time - any provision of this Guarantee is or becomes illegal, invalid or unenforceable, neither the legality, validity nor enforceability of the remaining provisions of this Guarantee will in any way be affected or impaired thereby.
|
22.
|
The Guarantors shall pay all stamp duties and taxes, if any, to which the execution and delivery of this Guarantee may be subject and shall indemnify the Principal against any and all liabilities with respect to or arising from any delay or omission to pay any such duties and taxes.
|
23.
|
This Guarantee implies, where necessary, a waiver, among other things, to the benefits, rights and exceptions under Articles 1247, 1939, 1945, 1953, 1955 and 1957 of the Civil Code.
|
24.
|
This Guarantee shall be governed by and construed in accordance with Italian law. The courts of Milan, Italy, shall have exclusive jurisdiction of all matters arising out of or in connection with this Guarantee.
|
25.
|
Notices or demands given under this Guarantee shall be sent to the following addresses:
|
(a)
|
If to the Principal
|
(b)
|
If to the Guarantors:
|
|
A.
|
on [•] [ ]. as principal (hereinafter indicated as
[ ]
or
Beneficiary
), and [ ], as contractor, (hereinafter indicated as
Contractor
), entered into a turn key contract (the
EPC Contract
) for the construction
inter alia
of a photovoltaic plant to be located in the province of [ ], Italy, in the Municipalities of [ ], made up of [ ] panels made of [ ], with a generator with a capacity equivalent to [•] KWp (hereinafter the
Plant
);
|
|
B.
|
under the EPC Contract the Contractor shall be fully responsible for the design, supply, construction, assembly, start-up, operation and maintenance of the Plant;
|
|
C.
|
the EPC Contract provides,
inter alia
, for the payment of a consideration of Euro [•] (in words [•]/00 Euro) (hereinafter known as the
Consideration
);
|
|
D.
|
pursuant to Articles 4.2 of the EPC Contract, the Contractor undertook to deliver the Beneficiary a first demand Warranty Bond in the amount of Euro [ ] (in words [ ]/00) per kWp, equal to 10% (ten per cent) of the Consideration (the
Guaranteed Amount
), issued by a primary and leading financial institution, to guarantee the due performance of the obligations undertaken by the Contractor under the EPC Contract;
|
|
E.
|
pursuant to Article 5.4 of the EPC Contract, the Contractor agrees that the Beneficiary assigns and/or pledges all receivables arising from the EPC Contract in favour of the Financing Entity, as defined in the EPC Contract
;
|
|
F.
|
the definitions used in the EPC Contract shall apply also hereto, unless the context otherwise requires.
|
1.
|
We, [●] (the
Guarantor
), hereby irrevocably and unconditionally undertake to the Beneficiary that, forthwith upon the Beneficiary giving written notice to us (the
Request
), copied to the Contractor, duly signed by an authorised representative of the Beneficiary, countersigned by the Bank, stating that the Contractor has failed to duly perform any of the obligations undertaken under the EPC Contract, including but not limited to as a result of Performance Liquidated Damages, notwithstanding any objection that may be raised by the Contractor, we shall pay within 3 (three) working days upon receipt by us of the Request, to the Beneficiary or to the Bank, any sum or sums as the Beneficiary may in such Request require, provided that such amount shall not exceed the Guaranteed Amount.
|
2.
|
The Guarantor shall exclusively rely on the Request and shall not carry out any further analysis of the reasons standing behind the Request or further verification or check of its consents.
|
3.
|
This Warranty Bond will come into force as soon as the Payment Milestone 6 is received in the following bank account of the Contractor [
insert bank details
] and shall expire on [
insert date corresponding to 30 months from its entry into force
] or, on the date the Guarantor will receive a notice sent by the Contractor and countersigned by the Beneficiary and the Financing Entity confirming that FAC, as defined in the EPC Contract, has been issued, whichever is earlier (the
Expiry Date
). After the Expiry Date this Warranty Bond shall be considered automatically and definitively null and void irrespective of whether the present document is returned to us or not.
|
4.
|
This Warranty Bond may be partially or totally enforced;
in case of partial enforcement the maximum Guaranteed Amount shall automatically be reduced proportionally.
|
5.
|
Any payment by us hereunder shall be in immediately available and freely transferable Euro free and clear of and without any deduction for or on account of any present or future taxes, levies, imposts, duties, charges, fees, set-off, counterclaims, deductions or withholdings of any nature whatsoever and by whomsoever imposed.
|
6.
|
Our obligations hereunder constitute direct primary, irrevocable and unconditional obligations, shall not require any previous notice to or claim against the Contractor and shall not be discharged or otherwise prejudiced or adversely affected by:
|
|
i.
|
any time, indulgence, waiver, concession or forbearance which the Beneficiary may grant to the Contractor or any neglect by the Beneficiary in enforcing any right of action or remedy the Beneficiary may have against the Contractor under the EPC Contract;
|
ii.
|
any amendment, modification or extension which may be made to the EPC Contract;
|
iii.
|
any change in the corporate structure of the Contractor;
|
iv.
|
any termination of the EPC Contract or of the employment of the Contractor;
|
v.
|
any other bond, security or Warranty Bond held or obtained by the Beneficiary for any of the obligations of the Contractor under the EPC Contract or any release or waiver thereof';
|
vi.
|
any act or omission of the Contractor under any other arrangement with ourselves;
|
vii.
|
any invalidity or ineffectiveness of the EPC Contract;
|
viii.
|
any other matter or thing which in the absence of this provision would or might have discharged, affected or prejudiced our obligations hereunder except for a discharge or amendment of this Warranty Bond expressly made or agreed to by the Beneficiary in writing.
|
7.
|
For the avoidance of doubt, this Warranty Bond shall remain valid notwithstanding any inability or failure on our part to exercise our rights of subrogation which we may have against the Contractor as a result of making any payment under this Warranty Bond.
|
8.
|
We acknowledge and consent, as of the date hereof, also for the purposes of Article 1248 of the Italian Civil Code, that the benefits arising from this Warranty Bond in favour of the Beneficiary may be assigned, together with relevant credit’s rights, by the Beneficiary to the Financing Entity, with simultaneous written communication to us and to the Contractor.
|
9.
|
We also consent for the purpose of Article 1407 of the Italian Civil Code that this Warranty Bond, together with relevant credit rights, can be assigned to an “eligible person” which is a person that is notified to us by the Beneficiary in writing (the
Eligible Person
), with prior written notice to us.
|
10.
|
Any notice hereunder shall be deemed as duly given when delivered in writing by registered letter with advice of receipt (
Raccomandata A.R.
), or by express courier
to our registered office in [●] and shall be duly signed by an authorised representative of the Beneficiary.
|
11.
|
The Guarantor accepts and acknowledges that in the event of
enforcement of this Warranty Bond, its subrogation right towards the Contractor is subject to the satisfactory fulfilment of all the
Beneficiary’s
credit obligations towards the Contractor, pursuant to the EPC
Contract.
Therefore, the Guarantor expressly waives article 1949 of Civil Code.
|
12.
|
This Warranty Bond is a
Garanzia Autonoma a Prima Richiesta
and implies, whether necessary, a waiver, among other things, to the benefits, rights and exceptions under Articles 1247, 1939,
1944,
1945,
1950,
1953, 1955 and 1957 of the Civil Code.
|
13.
|
All the costs (including legal fees) and all the fiscal expenses (including those related to stamp duty and registration fees) due pursuant to Italian law in relation to this Warranty Bond shall be charged to the Guarantor. Any amendment to this Warranty Bond shall be ineffective unless approved in writing by the Beneficiary and the Guarantor.
|
14.
|
This Warranty Bond shall be governed by and construed in accordance with Italian law. The courts of Milan, Italy, shall have exclusive jurisdiction of all matters arising out of or in connection with this Warranty Bond.
|
|
The Guarantor
___________
|
(L
×
W
×
H):
|
1,668
×
1,000
×
40 mm
|
Cell dimensions:
|
156
×
156mm
|
Number of cells:
|
60
|
Cells:
|
polycrystalline
|
Weight:
|
20kg
|
Certification:
|
in accordance with IEC/EN 61215 Ed. 2 and IEC/EN 61730
|
Product warranty:
|
5 years
|
Warranted power:
|
90% of the nominal power for 10 years
|
80% of the nominal power for 25 years
|
|
Maximum system voltage:
|
1,000V
|
NOCT:
|
44.4
°
C
|
SolarMax 10MT | SolarMax 13MT | SolarMax 15MT | ||
Input values
|
Maximum PV generator output power
1)
|
12
´
000 W
|
15
´
000 W
|
18
´
000 W
|
Max. PV generator output per MPP tracker
|
9
´
000 W
|
9
´
000 W
|
9
´
000 W
|
|
MPP voltage range
|
250 V…750 V
|
250 V…750 V
|
250 V…750 V
|
|
Minimum voltage for rated power
2)
|
320 V
|
280 V
|
320 V
|
|
Maximum DC voltage
|
900 V
|
900 V
|
900 V
|
|
Maximum DC current
|
2
×
16 A
|
3
×
16 A
|
3
×
16 A
|
|
Number of MPP-Trackers
|
2
|
3
|
3
|
|
String connections
|
2
×
2
|
3
×
2
|
3
×
2
|
|
Connection type
|
MC4
|
MC4
|
MC4
|
Output values
|
Rated output power
|
10
´
000 W
|
13
´
000 W
|
15
´
000 W
|
Maximum output power
|
10
´
000 W
|
13
´
000 W
|
15
´
000 W
|
|
Nominal mains voltage
|
3
×
400 V
|
3
×
400 V
|
3 × 400 V
|
|
Maximum AC current
|
3 × 16 A
|
3 × 20 A
|
3 × 22 A
|
|
Mains nominal frequency / range
|
50 Hz / 45 Hz…55 Hz
|
|||
Power factor (cos phl)
|
> 0.98
|
|||
Distortion factor at rated power
|
< 3 %
|
|||
Connection type
|
Amphenol
|
|||
Grid connection
|
Three-phase
|
Efficiency
|
Max. efficiency
|
98.0 %
|
Europ. efficiency
|
97.5 %
|
Power Input
|
Own consumption (night)
|
0 W
|
Ambient conditions
|
Protection type compliant with EN 60529
|
P54
|
Ambient temperature range
|
-20
o
C…+60
o
C
|
|
Ambient temperature range at rated power
|
-20
o
C…+50
o
C
|
|
Relative humidity
|
0…98% (no condensation)
|
Configuration
|
Display
|
Graphic LC display with backlight and status LED
|
Circuit type
|
two-stage, transformerless (no galvanic isolation)
|
|
Data logger
|
Data logger for energy yield, peak output and operating duration for the last 31 days, 12 months and 10 years
|
|
Fault current monitoring
|
Internal, AC/DC sensitive
|
|
Casing
|
Aluminium, cover power-coated
|
|
Overvoltage conductor DC
|
Requirement class C (VDE 0675-6) or type 2 (EN 61643-11)
|
|
Overvoltage conductor AC
|
Requirement class D (VDE 0675-6) or type 3 (EN 61643-11)
|
Standards & guidelines
|
CE-compliant
|
Yes
|
EMC
|
EN 61000-3-2 / EN 61000-3-3 / EN 61000-3-11 / EN 61000-3-12 / EN 61000-6-2 / EN 61000-6-3
|
|
Standard / guideline compliance
|
VDE 0126-1-1 / DK 5940 Ed. 2.2 / RD 661 / G59/2
|
|
Device safety
|
“GS certified safety” VDE with EN 50178
|
Interfaces
|
Data communication
|
RS485 / Ethernet via two RJ45 sockets
|
Status signaling contact
|
M12 connector with relay as N/C contact / N/O contact
|
Weight & dimensions
|
Weight
|
39 kg
|
42 kg
|
42 kg
|
Dimensions in mm (W × H × D)
|
550 × 750 × 200
|
550 × 750 × 200
|
550 × 750 × 200
|
Pcs
|
Concept
|
Cost
|
1
|
Safety Costs
|
351.000,00€
|
1)
|
Guaranteed Gain of the Trackers
|
Guaranteed PR (yearly measures)
|
Minimum PR at Preliminary Acceptance (PAC acceptance test)
|
25%
|
78,83%
|
76,5%
|
G
|
PR
guar
|
PR
min
|
a)
|
PR
≥
PR
min
=>
Performance Ratio acceptable
|
b)
|
PR
<
PR
min
=>
Performance Ratio not acceptable; apply Article 12.8
|
Guaranteed Gain of the Trackers
|
Guaranteed PR
|
PenaltyPR at Intermediate Test
|
Penalty PR at FAC
|
25%
|
78,83%
|
78,04%
|
77,26%
|
G
|
PR
guar
|
PR
pen
Intermediate
|
PR
pen
FAC
|
a.
|
The contractor shall have completed and the Employer and the Technical Advisor (if applicable) shall have attended and confirmed the successful completion of:
|
|
i.
|
the
Preliminary Verifications
|
|
ii.
|
the
Operational Trials
|
|
iii.
|
the
Safety and Protection Verification
|
|
iv.
|
the
Provisional Acceptance Test
|
b.
|
The Contractor shall demonstrate that the installations otherwise operate according to the specifications of this Contract.
|
c.
|
The electrical output infrastructure and the electricity meters function properly while live.
|
d.
|
For explanatory purposes, the perfect functioning of the plant monitoring and surveillance systems will not be considered necessary for the signing of the Provisional Acceptance Certificate, except for those data that should be monitored for the carrying out of the tests, including all of the parameters recorded by the meteorological station, as long as the Contractor commits to completing them in the 60 Work Days following the date of the signing of the Certificate of Provisional Acceptance.
|
1.
|
Preliminary Verifications
|
1.1.
|
The Photovoltaic Energy Station has successfully passed the following preliminary verifications:
|
i.
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Civil works
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ii.
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Inverters
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iii.
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Modules
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iv.
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Trackers
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v.
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Channeling, man holes and wiring
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vi.
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Installation of P.P.C. (Public Power Corporation) transformer
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vii.
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Installation of monitoring system
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viii.
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Weather Station
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ix.
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Supply of Equipment and Finishing of DC installation
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x.
|
AC cabling and connection with the Grid network
|
1.2.
|
The machinery and equipment have been supplied and completely installed.
|
1.3.
|
The internal connections and external interconnections, both mechanical and electrical, have been carried out and proved to function properly.
|
1.4.
|
The electrical installations complete the local requirements and have been verified to be in compliance with that which is indicated in the applicable Regulations.
|
1.5.
|
The monitoring and/or control instruments and devices have been checked.
|
1.6.
|
The security devices have been checked and are ready for operation.
|
1.7.
|
The whole area of the installation has been cleaned and all construction equipment and temporary installations have been removed that may compromise the operation of the installation.
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1.8.
|
All system and component tests required by P.P.C. have been carried out.
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1.9.
|
All inspections required by the authorities have been performed, and all official authorizations for the tests have been acquired.
|
2.
|
Operational Trials
|
2.1.
|
Medium Voltage Installation
|
|
a.
|
Voltage transformers are operating
|
|
b.
|
Low Voltage outputs from connected Inverters
|
|
c.
|
Border switch for all open solar Combiners boxes
|
2.2.
|
Low Voltage Installation
|
a.
|
Inverter connection
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b.
|
Closing of AC switch of the inverter
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c.
|
Connection of fuses to all branches of the solar generator
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d.
|
Closing of DC switch of inverter
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e.
|
Checking intensities of the strings and branches of the solar generator
|
f.
|
Protective relay and equipment tests
|
2.3.
|
Inverter Tests
|
a.
|
Operating test
|
b.
|
Tripping of protections
|
c.
|
Checking of currents and voltages on the photovoltaic strings at the input of every inverter
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d.
|
Checking of currents and voltages at the output of every inverter
|
2.4.
|
Tracker Tests
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a.
|
Connection
|
b.
|
Operating tests
|
2.5.
|
Testing of protection, safety and alarm systems and elements as well as their performance.
|
2.6.
|
Testing of alarms and protections for Low Voltage installations, inverters, trackers.
|
2.7.
|
Start-up and shut down tests at various times during operation
|
2.8.
|
Operating test for Meteorological Station
|
2.9.
|
Operating tests for all systems simultaneously
|
3.
|
Safety and Protection Verification
|
|
·
|
Surge protection for the DC voltage
|
|
·
|
Installed Lightning protection
|
4.
|
Provisional Acceptance Test
|
-
|
The installation of the Station is mechanically completed
|
-
|
Start-up and operating tests have been performed
|
-
|
Instrumentation necessary for the measuring of irradiance and temperature is available
|
-
|
An energy meter is calibrated and verified
|
-
|
Irradiation > 600 W/m
2
.
|
-
|
The proper functioning and condition of instrumentation necessary for measuring will be checked.
|
-
|
The 10 days operating test must be carried out as shown in Annex 9A
|
B.
|
INTERMEDIATE AND FINAL ACCEPTANCE TEST
|
§
|
the Works have been carried out to the satisfaction of the Principal and the Technical Consultant and in accordance with all the provisions of the Contract and its Annexes and Electro-Mechanical Completion shall be deemed as achieved.
|
(a)
|
the Plant is connected in parallel to the distributor’s electricity grid;
|
(b)
|
all the meters required to calculate the energy produced, transferred or exchanged with the grid have been installed;
|
(c)
|
the Power Purchase Agreement is in force;
|
(d)
|
Incentive request has been sent to the GSE in compliance with the terms indicated in Decree and GSE has approved the Plant’s admission to the Incentive pursuant to the Decree (
comunicazione della tariffa incentivante
by GSE);
|
(e)
|
all obligations related to the regulation of access to the grid have been performed.
|
§
|
PAC has been issued;
|
§
|
Power Purchase Agreement is in force with reference to the collection of the electrical energy produced by the Plant;
|
§
|
Incentive Agreement is entered into with GSE in compliance with the terms foreseen in Article 5, paragraph 4, of the Decree Law, together with all the documents foreseen by the AEEG Resolution 90/07 and the Principal has been informed about the Plant’s admission to the incentive tariff foreseen by the Decree.
|
·
|
the Plant has passed successfully the First and Second Reassessment Test and/or any related Performance Liquidated Damages have been paid by the Contractor.
|
·
|
IAC has been issued;
|
Name of Subsidiary
|
Percentage of Ownership
|
Jurisdiction of Incorporation
|
||
Ellomay Capital Communication Ltd.
|
100%
|
Israel
|
||
Ellomay Clean Energy Ltd.
|
100%
|
Israel
|
||
Ellomay Luxemburg Holdings S.àr.l.
|
100%
|
Luxemburg
|
||
Ellomay PV One S.r.l.
|
100%
|
Italy
|
||
Ellomay PV Two S.r.l.
|
100%
|
Italy
|
||
Ellomay PV Five S.r.l.
|
100%
|
Italy
|
||
Ellomay PV Six S.r.l.
|
100%
|
Italy
|
1.
|
I have reviewed this annual report on Form 20-F of Ellomay Capital Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 20-F of Ellomay Capital Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
A)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
B)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Tel Aviv, Israel
April 14, 2011
|
/s/ Kost Forer Gabbay & Kasierer
KOST FORER GABBAY & KASIERER
A Member of Ernst & Young Global
|