SHARE PURCHASE AGREEMENT
Between
Svein Hestevik, Hafslund Invest AS, Statens Naerings og Ditriktsutviklingsfond
(SND), A. Wilhelmsen AS, Silent Clean Power i Lund AB, Vesta Forsikring AS,
Vesta Liv AS, Atlantis Vest AS, Kjetil S0rensen, H0egh Invest AS, B. Friele &
S0nner, Placentia AS, Erling Thuland, Marina AS, Johan Fredrik Kroepelin,
Nirweco AS, Dag Arvid Hansen, Hilde D. Nilssen, Safari Fantoft AS, Margit Eide,
Bergen Eiendomspartner AS.
(the "Shareholders" of SIGMA Elektroteknisk AS registration no. 970 996 842
(the"Corporation"))
And
Ocean Power Corporation
("Ocean Power")
Whereas:
A. The Corporation is active in the field of trade, manufacturing,
especially the development and manufacturing of the Stirling Energy
Converter, and everything connected to this, including subscription for
shares or otherwise to make themselves interested in other companies
(hereinafter "the Business") and
B. The Corporation, as of the date of this Agreement, has a registered
capital stock of 3,663,327 shares of NOK 1 par value common stock, and
C. The Shareholders wish to offer for sale to Ocean Power 3,663,327 shares
in the Corporation, which is all of the shares in the Corporation, and
D. Ocean Power desires to purchase all of such shares, on the condition
that such purchased shares represent an aggregate equity stake in the
Corporation of 100 %, upon the terms and subject to the conditions
hereinafter set forth and
E. Ocean Power's present intent is to pursue the listing of its stock on a
public exchange;
NOW, THEREFORE, the parties hereto have on this 25th day of July, 2000, made and
entered into this agreement (the "Agreement"), in consideration of the mutual
covenants and agreements as follows:
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1. TRANSFER OF ALL EXISTING AND OUTSTANDING SHARES
1.1 General
Subject to the terms and conditions hereinafter set forth, the Shareholders and
the Corporation shall take all measures needed in order to place Ocean Power in
the position as holder of 100% of the share capital and voting stock of the
Corporation. The shares shall be acquired by Ocean Power by purchasing existing
and outstanding shares of the Corporation. The total price to be paid for the
shares to be acquired by Ocean Power shall amount to USD 5,500,000.
1.2. Sale and purchase of all shares (existing and outstanding)
The Shareholders shall offer a total of 3,663,327 shares which is all of the
existing and outstanding shares of the Corporation, to Ocean Power at a total
aggregate purchase price of USD 5,500,000 (five million five hundred thousand US
dollars), which equals a price of USD 1.501367472 per share. The purchase and
sale of such 3,663,327 existing and outstanding shares (the "Acquired Shares")
shall take place on July 24, 2000 (the Completion Date) or other such mutually
agreeable date, and the Shareholders shall immediately thereafter register such
share transfer in the Norwegian Register of Securities and issue a notification
to Ocean Power in evidence of its registration of Ocean Power as new owner of
the Acquired Shares, cf. the Norwegian Private limited Companies act section
4-4, cf. the Norwegian Public limited Companies Act section 4-7.
The Acquired Shares shall be paid by Ocean Power with Common Stock of Ocean
Power at the agreed value of USD 3.20 per share, presumed no fractional shares
shall be issued. The Ocean Power shares shall be issued to the Shareholders on
the Completion Date and Ocean Power shall immediately thereafter register such
share transfer in its shareholders' register (or similar) and issue a
notification to the Shareholders in evidence of its registration of the
Shareholders as owners of the issued shares.
1.3 Legend for Ocean Power Stock Certificate
Each of the Ocean Power Common Stock issued to the Shareholders on the
Completion Date or other such mutually agreeable date, shall bear the following
legend:
This common stock has not been registered under the Securities Act of 1933 of
the United States of America, has been sold in reliance upon Regulation S (Rule
901 through Rule 905 and preliminary notes, Attachment 1) promulgated under said
Act and shall be transferred only, and the issuer is required to refuse to
register any transfer of the common stock not made, in accordance with the
requirements of said Regulation, pursuant to registration under said Act or
pursuant to an exemption from the registration requirements of said Act. This
common stock shall not be offered or sold in the United States of America, its
territories and possessions, or to a "U.S. Person" as defined in said
Regulation, during the "restricted period" of one year from the issue date of
the common stock. Hedging transactions involving these securities may not be
conducted unless in compliance with said Act.
1.4 The Shareholders
The amount of shares on each shareholder to be sold and the payment addresses
are:
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1.
Svein Hestevik to sell 654,100 shares at a price of USD 1.501367472 at a total
price of USD 982,045, and a total of 306,889 shares in Ocean Power to be issued
to Svein Hestevik
1550 H0LEN
NORWAY
2.
Hafslund Invest AS to sell 892,667 shares at a price of USD 1.501367472 at a
total price of USD 1,340,221, and a total of 418,819 shares in Ocean Power to be
issued to Hafslund Invest AS Postboks 363 Skoyen 0212 OSLO NORWAY
3. SND to sell 639,983 shares at a price of USD 1.501367472 at a total price of
USD 960,850, and a total of 300,265 shares in Ocean Power to be issued to
Statens Naerings- og Distriktutviklingsfond Postboks 448 Sentrum
0104 OSLO
4.
A. Wilhelmsen AS to sell 200,000 shares at a price of USD 1.501367472 to a total
price of USD 300,274, and a total of 93,835 shares in Ocean Power to be issued
to
Wilhelmsen AS
Postboks 1583 Vika
0118 OSLO
5.
Silent Clean Power i Lund AB to sell 197,594 shares at a price of USD
1.501367472 at a total price of USD 296,661, and a total of 92,707 shares in
Ocean Power to be issued to Silent Clean Power i Lund AB V/Curt Schroder Box
4055 S-220 00 LUND SWEDEN
6.
Vesta Forsikring AS to sell 254,000 shares at a price of USD 1.501367472 at a
total price of USD 381,347, and a total of 119,171 shares in Ocean Power to be
issued to Vesta Forsikring AS V/Fondsavd.(Internpost 332) Att: Lisbeth Milde
5020 BERGEN NORWAY
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7.
Vesta Liv AS to sell 194,000 shares at a price of USD 1.501367472 at a total
price of USD 291,265, and a total of 91,020 shares in Ocean Power to be issued
to
Vesta Liv AS
C/oVesta Forsikring AS
Fondsavd/Internpost
5020 BERGEN
8.
Atlantis Vest AS to sell 202,000 shares at a price of USD 1.501367472 at a total
price of USD 303,276, and a total of 94,774 shares in Ocean Power to be issued
to
Atlantis Vest AS
Postboks 985
5808 BERGEN
9.
Kjetil S0rensen to sell 121,500 shares at a price of USD 1.501367472 at a total
price of USD 182,416, and a total of 57,005 shares in Ocean Power to be issued
to Kjetil S0rensen
Nydalen 5
5231 PARADIS
NORWAY
10.
H0egh Invest AS to sell 40,000 shares at a price of USD 1.501367472 at a total
price of USD 60,055, and a total of 18,767shares in Ocean Power to be issued to
Hoegh Invest AS Postboks 2416 SOLLI 0201 OSLO NORWAY
11.
B. Friele & S0nner to sell 33,483 shares at a price of USD 1.501367472 at a
total of USD 50,270, and a total of 15,709 shares in Ocean Power to be issued to
Friele & S0nner
V/B0rge Meidell
Midtunhaugen 6
5224 NESTTUN
NORWAY
12.
Placentia AS to sell 71,000 shares at a price of USD 1.501367472 at a total of
USD 106,597, and a total of 33,312 shares in Ocean Power to be issued to
Placentia AS V/Stein Bendixen August Cappelens gt 0360 OSLO NORWAY
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13.
Erling Thueland to sell 41,000 shares at a price of USD 1.501367472 at a total
of USD 61,556, and a total of 19,236 shares in Ocean Power to be issued to
Erling Thueland
Brattlien 24
5019 BERGEN
NORWAY
14.
Marina AS to sell 10,000 shares at a price of USD 1.501367472 at a total of USD
15,013, and a total of 4,692 shares in Ocean Power to be issued to Marina AS
V/Per Johannesen Farvikvn 9 5124 ULSET NORWAY
15.
Johan Fredrik Kroepelin to sell 13,000 shares at a price of USD 1.501367472 at a
total of USD 19,518, and a total of 6,099 shares in Ocean Power to be issued to
Johan Fredrik Kroepelin
Ekornveien 16
5236 RADAL
NORWAY
16.
Nirweco AS to sell 24,000 shares at a price of USD 1.501367472 at a total of
USD36,033, and a total of 11,260 shares in Ocean Power to be issued to Nirweco
AS Kipeasen 17 5114 TERTNES NORWAY
17.
Dag Arvid Hansen to sell 17,000 shares at a price of USD 1.501367472 at a total
of USD 25,523, and a total of 7,976 shares in Ocean Power to be issued to Dag
Arvid Hansen
Nansens v 34
5063 BERGEN
NORWAY
18.
Hilde D. Nilssen to sell 16,000 shares at a price of USD 1.501367472 at a total
of USD 24,022, and a total of 7,507shares in Ocean Power to be issued to Hilde
Nilssen Kirsten Flagstads vei 34b
5146 FYLLINGSDALEN
NORWAY
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19.
Safari Fantoft AS to sell 10,000 shares at a price of USD 1.501367472 at a total
of USD 15,013, and a total of 4,692 shares in Ocean Power to be issued to Safari
Fantoft AS V/Endre Olav Pedersen Fantoftvn. 16 5072 BERGEN NORWAY
20.
Margit Eide to sell 7,000 shares at a price of USD 1.501367472 at a total of USD
10,510, and a total of 3,284 shares in Ocean Power to be issued to Margit Eide
S0re van derWeldesv 25
5232 PARADIS
NORWAY
21.
Bergen Eiendomspartner AS to sell 25,000 shares at a price of USD 1.501367472 at
a total of USD 37,534, and a total of 11,729 shares in Ocean Power to be issued
to
Bergen Eiendomspartner AS
V/WN- Gruppen
Kalfarveien 76
5018 BERGEN
NORWAY
All Shareholders undertake to waive any existing pre-emption rights or first
rights of refusal on outstanding shares, granted and applicable pursuant to the
Corporation's by-laws (articles of association) or otherwise, in order to fulfil
the transactions set out above.
2. TRANSFER OF WORKING CAPITAL
Ocean Power will transfer initial working capital of USD 500.000 to the
Corporation within thirty days following the closing of the Agreement i.e. the
Completion Date. Additional working capital and timing of this will be related
to mutually agreeable milestones, and schedule. These milestones will be taken
from SIGMA's existing business plan represented in the document "Information
Memorandum", with a compressed schedule of 18 months.
3. CONDITIONS PRECEDENT
The completion of this agreement by Ocean Power is subject to and conditional
upon the waiver by Ocean Power or satisfaction of:
(i) insofar as the transfer of the shares requires the approval of third
persons, such approval having been granted;
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(ii) Mr Svein Hestevik has agreed to stay with the Business for a period of
three (3) years.
(iii) that all employees in the Corporation has agreed to the implementation
of competition clauses in their employment agreements and that such
implementation has been duly executed and documented within the
Completion Date;
(iv) that all emissions prior to the closing of the Agreement equal to a
share capital in the Corporation at a total amount of NOK 3,663,327,
are accordingly registered in the Norwegian Register of Business
Enterprises and that this is duly documented within the Completion
Date;
(v) that all members of the Board of Directors are accordingly registered
in the Norwegian Register of Business Enterprises and that this is duly
documented within the Completion Date;
(vi) that the Board of Directors has not issued share options to the
employees in the Corporation prior to the unrestricted possession of
the Acquired shares by Ocean Power in consistence with this Agreement,
and in any event not without the prior consent of Ocean Power;
(vii) that all natural persons, firms and corporations (except the Norwegian
Company Statoil) who possesses share options in the Corporation , have
waived these options in a written statement within the Completion Date;
(viii) that Mr Trond 0verland, Chairman of the Board of Directors, in a
written statement presented within the Completion Date, withdraws as
member of the Board of Directors at the first General Assembly after
the completed transaction of the shares
4. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each of the Shareholders mentioned in section 1.4 number 1 to 8, hereby warrants
and represents:
4.1 Organisation and Standing
The Corporation is a corporation duly organised, validly existing and
in good standing under Norwegian law and has the corporate power and
authority to carry on its business as it is now being conducted.
The execution, delivery and performance of this Agreement by the
Corporation has been duly authorized by all necessary corporate action
of the Corporation, including but not limited to all requisite
shareholder's approvals.
The Shareholders warrants that the amount of 3,663,327 shares is the
total amount of existing and outstanding shares in the Corporation.
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4.2 Restrictions on stock
The Shareholders are not a party to any agreement, written or oral,
creating rights in respect to the Corporation's Stock in any third
person or relating to the voting of the Corporation's Stock
There are no existing warrants, options, agreements, redemption
agreements, restrictions of any nature, calls or rights to subscribe of
any character relating to the Corporation's Stock, nor any securities
convertible into such Stock (except the right the Norwegian Company
Statoil has to convert a grant to shares in the Corpoartion). The
shareholders especially warrants that the proxy to issue share options
to employees in the Corporation has not been utilized and that it will
not be utilized prior to the election of a new Board of Directors by
Ocean Power after the Completion Date.
4.3 Bankruptcy
Neither bankruptcy nor judicial composition procedures according to
Norwegian or any other laws have been applied for or have been opened
with regard to the Corporation, the Business, the Purchased Assets or
any other of the Corporation's properties. The Corporation is not in a
winding-up arrangement or in a situation which could lead to its
liquidation and no resolution has been passed by its shareholder to
wind-up the Corporation.
4.4 No Conflicts
The execution, delivery and performance by the Shareholders of this
Agreement and the consummation of the transactions contemplate herein
does not (a) conflict with or result in a breach of any of the terms,
provisions or conditions of any contract, corporate document, note,
lease, agreement, judgement, declaration, order, decree, license or
other instrument or obligation to which to the best of the knowledge of
the Shareholders the Shareholders or the Corporation is a party or is
bound or (b) violates the laws of Norway.
4.5 Approvals and Consents
The according to the Norwegian limited Company Act section 4-15
necessary approval from the Board of Directors to the transfer of all
the shares, is given.
No approval, consent or authorization of any natural person, firm,
corporation, court or governmental authority which has not heretofore
been obtained is to the best of the knowledge of the Shareholders
necessary for the execution or delivery of this Agreement or for the
performance by the Shareholders of any of the terms or conditions
hereof.
4.6 Litigation
There is to the best of the knowledge of the Shareholders no claim,
action proceeding or investigation pending or threatened against the
Corporation before any court or governmental agency (or any basis
therefore known to the Shareholders), that might result, either
individually or in the aggregate, in any material effect for the
Business or in any material liability on the part of Ocean Power. Any
claim which might result in a material adverse effect for the Business,
may after prior written consent by the Corporation be settled by Ocean
Power on the costs of the Shareholders.
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4.7 Financial Information
The Corporation has delivered to Ocean Power a financial due diligence
report by Ernst & Young for the years 1997 , 1998 and an audited annual
account for 1999 (hereinafter: the "Annual Accounts" ) The Annual
Accounts have been prepared on the basis of generally accepted
accounting principles under Norwegian law applied on a consistent
basis. These accounts are correct in all material respects and
accurately set out and describe the capitalization, financial
condition, operating results, income and sources and financial
obligations of the Business as of the dates and for the periods
indicated therein and have been prepared in accordance with the laws of
Norway.
4.8 Accounts
The Corporation keeps its accounts regularly and in conformity with
Norwegian law. All financial and operational books and other materials
related to the operation of the Corporation since its inception are
located at the business premises of the Corporation.
4.9 Liabilities and other Obligations
The Corporation has no liabilities absolute, accrued, contingent or
otherwise (individually or in the aggregate) which according to the
general accepted accounting principles under Norwegian law would need
to be listed in the Annual Accounts other than such listed in the
Annual Accounts.
4.10 Proprietary Rights
The Corporation owns and has good marketable title to, or has in effect
licenses to all Intellectual Property. The Corporation has not granted
to third parties (including any of its affiliated parties) the right to
use proprietary or intellectual property rights used or necessary in
the conduct of the Business. The Corporation is not infringing upon or
otherwise acting adversely to the right claimed of any person under or
with respect to any of the foregoing and there is no basis for any
claim by any third party that the Corporation is so infringing or
acting. No employee or contractor to the Corporation is infringing upon
or otherwise acting adversely to the right or claimed right of any
persons under or with respect to any of the foregoing.
4.11 Taxation
All taxation payable with respect to, or resulting from the operation
or ownership of the Business, including but not limited to income taxes
of any kind, taxes withheld from employee's wages, social security
taxes, value added taxes, land, building and other similar taxes
(including any interest, penalty or fine in connection therewith) which
is due, payable or allocable to the period ending as of the Completion
Date, and all prior periods, shall have been or will be paid by the
Corporation and the Shareholders shall be responsible for the timely
filing of all returns, reports or other documents required by any tax
authority claiming jurisdiction with respect to any such taxation.
4.12 Employees
All employees and contractors of the Corporation have been compensated
for services performed for the Corporation. The Corporation does not
maintain or contribute except as required by Norwegian law to any
employee benefit plan including but not limited to medical disability,
unemployment and retirement benefits, nor is the Corporation obligated
to contribute to, accrue or pay benefits under any benefit plans or any
other deferred compensation or retirement funding arrangement except as
required by Norwegian law.
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4.13 Environmental Damage
The Corporation is in full compliance with all laws and regulations
pertaining to the environment; the properties owned or occupied by the
Corporation are to the best of the knowledge of the Shareholders not
affected by any order or notice of proceedings involving any
governmental or local authority regarding the contamination of those
properties and there are nowhere on the properties any deposits, dumps
or tanks of toxic or other poisonous, dangerous or noxious wastes,
fluids, solvents, chemicals or fuels or any other environmental
pollution of whatever nature.
4.14 Disclosures
Neither this Agreement, nor any agreement, documents, or other
information referred to in this Agreement or furnished to Ocean Power
or its legal or financial advisors pursuant to this Agreement contains
any untrue statement of a material fact necessary to make the
statements contained therein not misleading. There are no facts or
circumstances known to the Shareholders which could reasonably result
in any material adverse change in the condition, financial or
otherwise, business or prospects of the Corporation or materially
adversely affect any of the assets of the Corporation.
4.15 Character of representations, warranties
The Shareholders hereby confirms that Ocean Power is relying on the
accuracy of each of the representations and warranties specified in
this Agreement. Each of the representations and warranties hereunder
shall be separate and independent.
5. REPRESENTATION AND WARRANTIES BY OCEAN POWER
The execution, delivery and performance of this Agreement by Ocean Power has
been duly authorised by all necessary corporate action of Ocean Power.
6. REMEDIES
If and to the extent that any representation or warranty of the Shareholders is
untrue, they shall put Ocean Power in a position as if such representation or
warranty were true, by, at Ocean Power's option, either making the
representation, warranty or guarantee true or by paying damages in cash. The
Shareholders responsibility to pay damages, may at the Shareholders option be
fulfilled by returning the Ocean Power shares issued to the Shareholders on the
Completion Date or other such mutually agreeable date at a value of USD 3.20 per
share.
The Shareholders shall hold Ocean Power harmless from and against any and all
claims, damages, penalties, costs or other charges (including reasonable
attorney's fees and expenses) which Ocean Power may sustain and which (i) arise
out or exist in connection with any breach by the Shareholders of the
representations, warranties or other obligations of the Shareholders set forth
in or arising out of this Agreement and (ii) are caused by any acts or omissions
of the Shareholders. Claims of Ocean Power resulting from the breach of
representations and warranties shall be time barred 12 months after the
Completion Date.
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The maximum amount that Ocean Power may recover from the Shareholders under this
agreement shall be limited to USD 5,500,000.
No claim under Section 4 may be made on facts or circumstances which Ocean Power
or its advisors knew as a result of access to documents, information relevant to
the Business or otherwise available to Ocean Power or its advisers prior to the
Completion Date. A table of content regarding documents received by Ocean Power
from the Corporation during the due diligence process is enclosed as Attachment
2.
7. COSTS AND EXPENSES
Except as expressly otherwise provided herein each of the Parties shall bear
their own costs and expenses incurred in connection with this agreement and the
transactions contemplated herein, whether or not such transactions shall be
consummated, including without limitation, all fees of its counsel, accountants
and other consultants.
8. ENTIRE AGREEMENT
This agreement constitutes the entire understanding of the Parties and
supersedes all prior agreements, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of the Parties.
This Agreement may only be amended by an instrument duly executed by the
Parties, No charge, termination or modification of any of the provisions of this
Agreement shall be binding on the Parties unless made in writing.
9. GOVERNING LAW AND VENUE
This Agreement, and all transactions contemplated hereby, shall be governed by,
construed and enforced in accordance with Norwegian law. The venue for any
dispute arising hereunder shall be Oslo City Court.
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IN WITNESS WHEREOF, this Agreement has been executed by each of the individual
parties hereto on the date first above written.
/s/ Joseph P. Maceda, President /s/
- ------------------------------- --------------------------------
for Ocean Power Corporation for Bergen Eiendomspartner AS
/s/ Svein Hestevik /s/
- ------------------------------- --------------------------------
Svein Hestevik for Hafslund Invest AS
/s/ /s/
- ------------------------------- --------------------------------
for SND for A. Wilhelmsen AS
/s/ /s/
- ------------------------------- --------------------------------
for Silent Clean Power i Lund AB for Vesta Forsikring AS
/s/ /s/
- ------------------------------- --------------------------------
for Vesta Liv AS for Atlantis Vest AS
/s/ Kjetil Sorensen /s/
- ------------------------------- --------------------------------
Kjetil Sorensen for Hoegh Invest AS
/s/ /s/
- ------------------------------- --------------------------------
for B. Friele & S0nner for Placentia AS
/s/ Erling Thueland /s/
- ------------------------------- --------------------------------
Erling Thueland for Marina AS
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/s/ Johan Fredrik Kroepelin /s/
- ------------------------------- --------------------------------
Johan Fredrik Kroepelin for Nirweco AS
/s/ Dag Arvid Hansen /s/Hilde D. Nilssen
- ------------------------------- --------------------------------
Dag Arvid Hansen Hilde D. Nilssen
/s/ /s/Margit Eide
- ------------------------------- --------------------------------
for Safari Fantoft AS Margit Eide