Ex99-12 to 2003 Form U5S

EX-99 14 ex99-12.htm 99-12 Ex99-12 to 2003 Form U5S

Ex99-12




                                              Articles of Association

                                                        of

                                                "SOFIA ENERGY" EAD

                                                JOINT-STOCK COMPANY







Adopted by the Single Founder, namely HORIZON ENERGY BULGARIA EOOD by
the Memorandum of Association done on 7 July 2003.  .

I. GENERAL PROVISIONS

Status

Art. 1. (1) On this 7th day of July 2003 in Sofia a joint-stock company, Sofia Energy EAD (hereinafter,
the "Company"), was founded as a single-member company.
(2) The Company is incorporated for an indefinite term. The Company is a legal entity distinct from its
shareholder(s). The Company shall be liable for its debts with its assets. The Company shall not be liable for
the debts and obligations of its shareholder(s) and its shareholder(s) shall not be liable for the Company's
obligations, save up to the value of his/her/its/their contributions unpaid, if any, against the shares
subscribed.
(3) The affairs of the Company shall be run in compliance with the laws of Bulgaria in effect, this
Articles, and in accordance with the resolutions of the General Meeting of Shareholders of the Company.

Business name

Art. 2. (1) The business name of the Company shall be "Copur Ehbpdchcu" EAII and shall be spelled in
English as "Sofia Energy" EAD.
(2) The business name, the seat and address of the head office, the court where the Company is
registered and the registration number, as well as a bank account of the Company shall be always disclosed in the
business correspondence of the Company.

Company's seat and headquarters' address

Art. 3. The Company's seat shall be in the city of Sofia, Triaditsa Region, and its headquarters'
address shall be: 16 Vitosha blvd., 1st floor, apartment 2, Triaditsa Region, 1000 Sofia, Bulgaria.

Scope of business and powers to transact

Art. 4. (1) The Company's scope of business shall include: researches on the possibilities for
development of energy projects, as well as any other activities permitted under the Bulgarian laws in effect,
subject to compliance with any licensing, registration or other requirements that may be in place.
(2) The Company shall have full legal powers to transact and perform activity as a joint-stock company
under Bulgarian law.

II. SHARE CAPITAL. SHARES AND SHARE CERTIFICATES. ALTERATION OF THE SHARE CAPITAL. ADDITIONAL CAPITAL.
REACQUISITION OF OWN SHARES

Share capital

Art. 5. The Company's share capital with which it shall be registered and which is fully subscribed is
BGN 50,000 (fifty thousand leva).

Shares and classes

Art. 6. (1) The Company's share capital shall be divided into 500 (five hundred) shares with a nominal
value of BGN 100 each.
(2) All shares shall form one class of ordinary registered shares, and each share shall bear rights
equal to those borne by any other share. No bearer shares shall be issued.

Share certificates and interim share certificates

Art. 7. (1) The Company's shares may be issued in share certificates for 1, 10 or 100 shares. Share
certificates shall be issued in accordance with the legislation in force.
(2) Until the Company is incorporated through registration, and until share certificates shall be
issued, each shareholder shall be entitled to receive, as proof of his/her/its shareholding and as document
necessary for the exercise of shareholder rights, an interim share certificate for the shares held. The interim
share certificate shall be signed by one of the members of the Board of Directors, as shall be designated by the
Board of Directors, and shall be stamped with the stamp of the Company.
(3) Each interim certificate shall indicate the number and the nominal value of the shares subscribed,
and the contributions made for the shares subscribed.

Increase of the share capital

Art. 8. (1) The registered capital of the Company may be increased in accordance with the procedures and
requirements of the applicable legislation.

Right as to newly issues shares

Art. 9. Each shareholder shall be entitled to subscribe, as at share capital increase, a
proportion of the newly issued shares that corresponds to his/her/its shareholding prior to the share capital
increase. This pre-emptive right can only be waived where allowed by the laws in force, and cannot be waived if
the capital increase is through retained earnings.

Reduction of the share capital

Art. 10. The share capital of the Company may be reduced in compliance with the procedures required
under the laws in force.

Additional capital

Art. 11. The General Meeting may resolve to form an additional capital, which shall not be subject to
registration with the court, and shall be used as may be designated in the resolution for its creation and in
accordance with applicable company and accounting legislation.

Reacquisition of own shares by the Company

Art. 12. The Company may reacquire the shares it has issued, upon resolution of the General Meeting of
Shareholders adopted by majority of the shares represented, and in accordance with the requirements and
procedures provided for in the laws in effect.

III. SHAREHOLDERS. RIGHTS AND OBLIGATIONS OF THE SHAREHOLDERS. RESTRICTIONS ON TRANSFER OF SHARES

Shareholders' rights

Art. 13. (1) Each share shall entitle its holder to one vote at the General Meeting, to dividends and to
liquidation proceeds on termination, in proportion to its nominal value.
(2) The right to vote shall not be exercisable unless 25 per cent of the issue value of the share have
been paid-up and no penalty interest has been accrued for late payment under Art. 14 below.

Payment for the shares

Art. 14. (1) A payment of 25 per cent of the issue value of each share should be made by its holder
immediately after its subscription, unless otherwise resolved by the founder(s), respectively by the General
Meeting, and the remaining 75 per cent shall be paid up within two years as of the registration of the Company,
respectively of the share capital increase.
(2) Failure to contribute amounts due on the shares shall entitle the Company to claim interest at 5 per
cent per annum on the unpaid amounts, this interest to accrue after the Board of Directors have called the
payment of such amounts.

Art. 15. Any benefits, that may derive from the payments made for shares subscribed (such as interest or
foreign exchange gains) until the Company, respectively the increase of its capital, shall have been registered,
shall belong to the shareholder who/which has made the payment, and the Company shall be obligated to repay such
benefits.

Transfer of shares

Art. 16.Any transfer of shares from the share capital of the Company shall be made in accordance with
the laws in effect.

IV. MANAGEMENT

Bodies of the Company

Art. 17. The Company shall have the following bodies:
1. General Meeting of Shareholders ("the General Meeting"); and
2. Board of Directors (the "Board").

General Meeting

Art. 18. (1) The General Meeting shall consist of all shareholders entitled to a vote.
(2) Shareholders may attend the General Meeting either personally, or by a proxy. The proxy shall
always be appointed in a written form. The written instrument of authorisation shall be deposited and kept in the
Company.
(3) The members of the Board of Directors shall be free to attend the General Meeting but shall not be
entitled to a vote, unless they are shareholders.
(4) The chairman of the Board of Directors shall be a chairman of the General Meeting. In case of
absence of the chairman of the Board of Directors, the General Meeting shall be chaired by a person, appointed by
the same General Meeting.
(5) The General Meeting shall elect a secretary to keep the minutes of the General Meeting and the
register of members, as well as any other documentation in relation to the General Meetings' holding, and to
personally verify the proceedings of the Company's bodies.

Competence of the General Meeting

Art. 19. (1) The General Meeting shall be empowered to:
1. Amend the Articles of Association;
2. Increase and reduce the share capital of the Company;
3. Reorganise and terminate the Company;
4. Elect and release the members of the Board of Directors, the Company's Secretary, and determine their
remuneration;
5. Appoint and release a certified public accountant or audit firm;
6. Approve the Company's annual financial statements after their certification by the certified public
accountant or audit firm;
7. Resolve on the issuance of debentures;
8. Resolve on the creation of additional capital;
9. Appoint liquidators upon termination of the Company, except in the case of bankruptcy;
10. Discharge the members of the Board of Directors from liability;
11. Resolve on the reacquisition of own shares;
12. Resolve on any other matter reserved for its competence by virtue of a law and/or the Articles.
(2) The General Meeting shall resolve on the above items in accordance with the provision of Art. 25 of
the Articles.

Sessions of the General Meeting.
Convocation.

Art. 20. (1) The General Meeting shall be held at least once a year at the Company's seat.
(2) The General Meeting shall be convened by the Board of Directors. It may also be convened by motion
from the Company's shareholders as provided for in Art. 223. (2) of the Commerce Act.
(3) The General Meeting shall be convened by a written notice sent by registered express mail to each
shareholder, to the address advised by him/her/it in accordance with Art. 38. (3), 1 below. Invitations may
additionally be faxed or delivered by electronic mail ("e-mail"). No invitations need be mailed where a fax or
e-mail message, confirming receipt of the invitation by fax or e-mail, has been sent by the addressee of the
invitation.
(4) The sessions cannot be held earlier than 10 days from the date of mailing of the invitations, unless
all shareholders have confirmed, in accordance with the preceding paragraph, the invitation by fax or e-mail and
have agreed in their return fax or e-mail message to holding the General Meeting earlier.

Access to information

Art. 21. All written materials related to the agenda of the General Meeting shall be available to the
shareholders in the Company's registered office not later than on the date of mailing of the invitations. All
written materials related to the agenda of the General Meeting shall be mailed or sent by fax to the
shareholders, having requested in writing the Board to do so.

List of participants

Art. 22. Before the beginning of the session of the General Meeting a list of the attending shareholders
and proxies and the respective shares owned and represented, shall be drawn up. The shareholders and proxies
shall attest their presence by signature and shall certify their identity.

Quorum

Art. 23. A session of the General Meeting shall legitimately take place on condition that more than
fifty percent of the Company's share capital is represented. In case of such quorum absence, a new session shall
be scheduled within up to a month term but not earlier than 14 (fourteen) days and it shall be legitimate,
regardless of the shares represented at it. The date of the new session can be given in the invitation for the
originally scheduled session.

Conflict of interests

Art. 24. A shareholder or a proxy shall not be entitled to a vote on:

1. Filing claims on behalf of the Company against such shareholder; or
2. Undertaking steps, or renouncing steps, for engaging such shareholder's liability to the Company.

Majority

Art. 25. (1) Resolutions on amending the Articles, increase and reduction of the share capital,
reorganisation and termination of the Company shall be adopted by a majority of 2/3 (two-thirds) of the shares
represented.
(2) All other resolutions shall be adopted by a simple majority of more than 50 per cent of the shares
represented, unless otherwise required under the laws in force or these Articles.

Resolutions

Art. 26 A resolution of the General Meeting shall come into effect immediately, unless postponed by the
same General Meeting or unless related to matters, which are declared by law to take effect upon registration. In
the latter case the resolution shall come into effect on registration.

Minutes

Art. 27 (1) The minutes of the General Meeting shall be kept in accordance with the requirements of the
law in force.
(2) The minutes and the documents relating to the General Meeting shall be stored in a special book, and
shall be kept at least 5 (five) years.

Powers of the single member of the Company

Art. 28. Where the Company would have one shareholder only, he/she/it shall have all the powers vested
in the General Meeting, under the applicable laws and these Articles. The powers of the General Meeting under
these Articles shall be construed to be the powers of the single member. The single member can exercise such
powers at any time he/she/it decides appropriate and for each decision minutes shall be drawn up.

Board members and general rules of procedure of the Board

Art. 29. (1) The Board of Directors shall consist of 3 (three) members. The mandate of the Board of
Directors shall be three years, without any limitation on re-elections. Members of the Board of Directors can be
either natural or juristic persons. In the latter case, the juristic person shall designate and authorise a
natural person to perform its rights and obligations as Board of Director's member.
(2) The mandate of the first Board of Directors shall be 1 (one) year.
(3) The Board of Directors shall manage and represent the Company in accordance with the provisions set
out below and the law requirements.
(4) The Board of Directors shall adopt its own rules of procedure, unless the General Meeting resolves
otherwise.
(5) The Board of Directors shall meet regularly, but not less than once every three months, to discuss
the Company's affairs and prospects.
(6) The minutes of the Board of Directors' proceedings shall be kept in a special book for at least 5
(five) years. The chairman of the Board of Directors shall be in charge to keep this book. The minutes shall be
confidential.
(7) To hold Board meetings a quorum of at least of two directors is required. The resolutions of the
Board shall be adopted by a majority of two directors, unless higher majority is required under these Articles or
the Board's rules of procedure.

Chairman, deputy chairman,
executive director(s)

Art. 30. (1) The Board of Directors shall elect a chairman and a deputy chairman from amongst its
members.
(2) The management of the Company may be delegated by the Board of Directors to one or more executive
directors, which shall manage and represent the Company, as resolved by the Board of Directors. The executive
directors shall be a minority from amongst the Board's members and may at any time be replaced upon a decision of
the Board of Directors.
(3) Each executive director shall immediately and independently inform the chairman of all circumstances
material to the Company, which have arisen.
(4) Each director may request that the chairman calls a Board meeting to discuss particular matters.

Termination of a Board's member mandate

Art. 31. (1) The mandate of each member of the Board of Directors may be terminated in case of:
1. Expiration of the mandate, unless renewed;
2. His/her/its release upon resolution of the General Meeting;
3. Filing of a written notice of release from office as a member of the Board of Directors in accordance
with the requirements of the Commerce Act;
(2) Upon termination of the mandate of a member of the Board, the Board of Directors shall, except for
the case of item 2 in the above paragraph, convene a General Meeting to appoint a new member.
(3) The members whose mandate has been terminated under items 2 or 3 of paragraph 1 above shall be
obliged to render any reasonable assistance that may be required of him/her/it by the Board of Directors.

Special cases for holding of Board meetings and passing of resolutions by the Board

Art. 32. (1) The members may partake in the Board meetings and adopt legitimate resolutions by means of
a conference telephone or other similar communications equipment whereby the members of the Board of Directors
meeting can hear each other. Partaking in a Board meeting in the above manner shall be deemed participation in
person and the quorum requirements shall have to be met.
(2) The Board of Directors may pass valid resolutions without holding a meeting, provided that all
members of the Board of Directors agree in writing to the respective resolution.
(3) The members of the Board of Directors are entitled to remuneration as resolved by the General
Meeting, which shall be entitled to determine the amount and the rules in accordance with which the remuneration
shall be paid.
(4) The members of the Board of Directors shall give a guarantee for their stewardship at an amount
determined by the General Meeting but not less than the respective director's three months gross remuneration.

Representation

Art. 33 (1) The Company shall be represented in respect of third parties by the Board of Directors. The
Company's representation may be assigned to one or more executive directors as may be resolved by the Board of
Directors. The performance of certain actions in the name of the Company may be assigned to a given director
and/or to third parties, by the Board or by the executive director(s), entitled to represent the Company.
(2) The representative authority of the executive director(s) shall be entered into the Companies
register and the executive director(s) shall present specimen of his/her/their signature(s) thereto.

V. ANNUAL FINANCIAL STATEMENT. ANNUAL REPORT. RESERVES AND DISTRIBUTION OF EARNINGS

Annual financial statements.
Annual report

Art. 34. (1) Not later than the end of February each year the Board of Directors shall prepare the
financial statements for the previous financial year and an annual report, which shall describe the affairs and
the state of the Company and shall provide explanations to the annual financial statements.
(2) The Board of Directors shall submit the financial statements and the annual report to one or more
certified public accountants, having been appointed by the General Meeting to review in accordance with
applicable accounting legislation

Resolution on distribution of earnings

Art. 35. Not later than as at the date of sending of the invitations for the annual General Meeting, the
Board of Directors shall prepare a draft resolution on the distribution of earnings. The draft resolution,
together with the annual financial statements, the auditor's report thereto and the annual report of the Company
shall be presented to the annual General Meeting.

Statutory reserves

Art. 36. The Company shall maintain and utilise reserve funds in accordance with the requirements of the
applicable laws.

Distribution of earnings

Art. 37. The General Meeting shall resolve on the distribution of dividends after approval of the
financial statements, and in accordance with the limitations on distributions provided for by the laws in force.

VI. MISCELLANEOUS

Notices, addresses

Art. 38. (1) Unless otherwise indicated in these Articles, each notice or invitation by virtue of the
present Articles of Association shall be forwarded in a written form.
(2) Unless no specific requirements for the sending of notices are provided for in these Articles,
sending shall take place simultaneously by registered mail and, where possible, fax or e-mail. Any duly
forwarded notification shall be considered received by the time when in normal circumstances it can be expected
to have been technically received.
(3) The addresses for delivery shall be:
1. For shareholders - the addresses set out in the register of members, unless a shareholder notifies in
writing the Board of Directors for another address, which shall become the delivery address and
be recorded in the register of members.
2. For the members of the Board of Directors - the addresses given by them from time to time to the
chairman of the Board of Directors and to the Company's secretary.
(4) Failure on the part of any shareholder or director to notify the Company of the change of his/her
address shall not invalidate the effects of any notice or invitation sent in good faith.

Books of the Company

Art. 39. (1) The Company shall keep the following books:
1. Book for the minutes of the General Meeting/books of decisions of the single member;
2. Book for the minutes of the Board of Directors;
3. Register of members;
4. Register of debenture holders, if any debentures shall have been issued;
5. Books of accounts;
6. Other books as may be required by the laws in effect.
(2) The register of members shall include the names and the addresses of all holders of shares, the
numbers of the shares held, details on the issued certificates, the contributions made, the transfers made, the
dividends paid, if any, as well as any other details as may be prescribed by the laws in force or considered
relevant by the Board of Directors. The register of members shall be kept by the chairman of the Board of
Directors or by the Company's secretary, if the chairman explicitly so delegates. The signatures of the chairman
of the Board of Directors and of the Company's secretary, if any, shall be required for each recording made in
the register of members.

Inapplicable clauses. Headings

Art. 40. (1) Where any part of these Articles shall be considered to contravene the statutory laws in
effect, the latter shall apply.
(2) The headings in the Articles shall not be binding for the purposes of construing the texts to which
they relate, and shall only be considered as inserted in order to make reading easier.

Application of the Commerce Act 1991

Art. 41. The provisions of the Commerce Act 1991, or any applicable legislation that may replace, amend
or supplement it, shall apply to all matters not addressed by these Articles.

These Articles are signed in English and in Bulgarian language. In case of a dispute as regards to the
interpretation of the provisions of these Articles, the Bulgarian text shall be considered prevailing.

For and on behalf of
FOUNDER/ SOLE
MEMBER,
HORIZON ENERGY BULGARIA EOOD,
a company incorporated and duly existing under the laws of Bulgaria, registered under
company file number 9015/2001 in Sofia City Court, with seat and registered office at 16
Fr. Joliot Curie Str., bl. 155, Izgrev
Region, Sofia

Name: Dimitar Tchavdarov Totev

Signature: /s/ Dimitar Tchavdarov Totev