Exhibit 10.27
DATED 20 JULY, 2001
(1) BALANTUM OY
(2) HADWACO LTD OY
(3) XXXXXXX OYJ ABP
---------------------------------------------------
A S S E T P U R C H A S E A G R E E M E N T
---------------------------------------------------
relating to the water remediation business of Hadwaco Ltd Oy
1
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION.......................................... 3
2. AGREEMENT TO SELL AND PURCHASE.......................................... 7
3. ASSETS AND LIABILITIES NOT INCLUDED IN THE SALE......................... 9
4. CONDITIONS PRECEDENT.................................................... 9
5. CONSIDERATION.......................................................... 11
6. COMPLETION............................................................. 12
7. VALUE ADDED TAX........................................................ 12
8. WARRANTIES............................................................. 12
9. INDEMNIFICATION........................................................ 13
10. LIMITATION OF SELLERS LIABILITY........................................ 14
11. THE EMPLOYEES.......................................................... 15
12. THE BUSINESS CONTRACTS................................................. 16
13. OBLIGATIONS OF THE SELLER AFTER COMPLETION............................. 17
14. CONFIDENTIALITY........................................................ 18
15. ANNOUNCEMENTS AND PUBLICITY............................................ 18
16. RESTRICTIVE COVENANTS.................................................. 18
17. GUARANTEE.............................................................. 19
18. NOTICES................................................................ 19
19. SUCCESSORS AND ASSIGNS................................................. 20
20. VARIATION.............................................................. 20
21. SEVERANCE.............................................................. 21
22. FURTHER ASSURANCE...................................................... 21
23. WAIVERS................................................................ 21
24. ENTIRE AGREEMENT....................................................... 21
25. COUNTERPARTS........................................................... 22
26. GOVERNING LAW.......................................................... 22
27. SETTLEMENT IN GOOD FAITH............................................... 22
28. ARBITRATION............................................................ 22
2
29. POST-COMPLETION EFFECT................................................. 22
SCHEDULE 1 - COMPLETION REQUIREMENTS......................................... 24
SCHEDULE 2 - CONTRACTS....................................................... 26
SCHEDULE 3 - EMPLOYEES....................................................... 27
SCHEDULE 4 - THE TANGIBLE ASSETS............................................. 28
SCHEDULE 5 - WARRANTIES...................................................... 29
SCHEDULE 6 - APPORTIONMENT OF ASSET VALUE.................................... 37
SCHEDULE 7 - INTELLECTUAL PROPERTY ASSIGNMENT................................ 38
3
THIS AGREEMENT is made the 20th day of July 2001.
PARTIES:
(1) HADWACO LTD OY (registered in Finland under Company Number:561.812) the
registered office of which is at Xxxxxxxxx 000, 00000 Xxxxxxxx
("Seller");
(2) BALANTUM OY (registered in Finland under Company Number: 1646698-0 the
registered office of which is at x/x Xxxxxxxx & Xxxx Xxxxxxxxx-xx-Xxx,
Xxxxxxxxxxxxxx 00 X, 00000 Xxxxxxxx ("Purchaser"); and
(3) XXXXXXX OYJ ABP (registered in Finland under Company Number: 4.510)
with its registered office at Xxxxxxxxx 000, 00000 Xxxxxxxx ("Xxxxxxx")
WHEREAS:
(A) The Business (as defined below) is now and has for some time past been
carried on by the Seller as legal and beneficial owner under the
Business Name.
(B) The Seller has agreed to sell and transfer, or cause to be sold and
transferred, and the Purchaser has agreed to purchase the Business
(together with the Assets) as a going concern on the terms and
conditions of this Agreement and in particular on the basis of the
representations, warranties, undertakings, agreements and indemnities
set out in this Agreement.
(C) Xxxxxxx has agreed to guarantee the obligations of the Seller hereunder.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless the context requires otherwise, the following
words shall have the following meanings:
"Agreed Form" means in relation to any document, such document in the
form agreed between the Seller and the Purchaser and initialled by the
Purchaser's Solicitors and the Seller's Solicitors for the purpose of
identification;
"Aquamax Licence" means the exclusive licence dated 18 October 1994 and
the amendment to the license dated 20 April 1998, between the Seller
and Aquamax (International) Holdings B.V.;
"Aquamax Technology" means the evaporation technology licensed to the
Seller pursuant to the Aquamax Licence;
"Assets" means the assets of the Business agreed to be sold and
purchased pursuant to this Agreement as described in Clause 2.1 and as
set out in Schedule 4;
"Assumed Contracts" means the Contracts set out in Part A Schedule 2
4
"Business" means the part of the Seller's business consisting of
developing, producing and marketing of plants and equipment for the
remediation of water from process industry and leachate from landfill
sites, using the Aquamax Technology and the Hadwaco Later Developed
Technology.
"Business Contracts" means all the contracts (which include all
agreements, arrangements, offers and commitments) relating to the
Business current at Completion to which the Seller is a party or has
been assigned to it, but excluding:
(i) contracts with employees;
(ii) the Non-Assumed Contracts;
(iii) the Aquamax License;
(iv) any contracts relating to any Excluded Liabilities.
"Business Day" means any day which is not a Saturday, a Sunday or a
bank or public holiday in Finland, London and New York;
" Business Information" means all information, know-how, books,
accounts, cost records, advertising and all other relevant documents
papers and records (however stored) which relate to: (i) all or any
part of the Business and Assets; (ii) any products of or services
rendered by the Business; (iii) any relevant designs, specifications,
drawings, data, manuals or instructions; (iv) the operations,
management, administration, or financial affairs of the Business
(including any business plans or forecasts, information relating to
future business development ); and (v) the sale or marketing of any
products of or services rendered by the Business, including, but
without limiting the generality of the foregoing words, all customer
names and lists, sales and marketing information (including but not
limited to targets, sales, market share and user hits statistics,
market surveys and reports and research);
"Business Name" means Hadwaco Ltd Oy or any other name including the
word Hadwaco, any Domain Name, or, in each case, any colourable
imitation or permutation of such, but excluding all names including the
word "Xxxxxxx";
"Claim" means any claim by the Purchaser in connection with this
Agreement, , or any other relevant agreement;
"Completion" means the completion of the sale and purchase of the
Business and the Assets in accordance with Clause 6 and Schedule 1;
"Completion Date" means the date specified in Clause 6.1 as being the
date on which Completion will take place;
"Consideration Shares" means the ordinary shares of the Purchaser to be
issued to the Seller pursuant to Clause 5.1.2;
"Cut-Off Date" shall mean 30 June 2001 at 23:59;
"Disclosed" means fully and fairly disclosed to the Purchaser in the
Due Diligence Binders;
5
"Domain Names" means the domain names xxx.xxxxxxx.xx and
xxx.xxxxxxx.xxx;
"Due Diligence Binders" means the material disclosed in December 2000
and in 2001 concerning the Business, initialled by the parties and
stored at Xxxxxx Xxxxxxxx Attorneys at Law Ltd;
"Employees" means the persons employed in the Business at the date of
this Agreement (all of whose names and addresses are set out in Part A
of Schedule 3 together with certain particulars of their respective
employment);
"Excluded Assets" means the assets referred to in Clause 3.1 as being
excluded from the sale pursuant to this Agreement;
"Excluded Liabilities" means all liabilities or obligations relating to
the Business or Assets and outstanding on or accrued or referable to
the period up to the Cut-Off Date, or arising by virtue of the sale and
purchase recorded by this Agreement, including but not limited to any
and all liabilities in respect of employee related charges, VAT or
other Taxation attributable to the Seller's Group in respect of the
Business, the Assets or the Employees in respect of the period ending
on the Cut-Off Date and all bank and other overdrafts and loans owing
by the Seller's Group, except for the following liabilities::
(i) employee related liabilities incurred after the Cut-Off Date
(excluding liabilities relating to the termination of the Specified
Employees);
(ii) the liabilities for the Assumed Contracts as set out in Schedule
2;
(iii) liabilities relating to the projects and works in progress
referred to in Section 2.1(E);
(iv) accounts payable falling due after the Cut-Off Date;
(v) the Tekes Loan Liability.
"Hadwaco Licence" means the non-exclusive licence of even date of the
Hadwaco Later Developed Technology and the Aquamax Technology between
the Purchaser and the Seller;
"Hadwaco Later Developed Technology" means all the Intellectual
Property relating to the Aquamax Technology developed by the Seller
after the date of the Aquamax Licence;
"Intellectual Property" means patents, know-how, registered and
unregistered trade marks and service marks (including any trade, brand
or business names) other than those including the name Xxxxxxx, domain
names, registered designs, design rights, copyright (including all such
rights in owned computer software, the Business Information and any
databases), moral rights and topography rights (in each case for the
full period thereof and all extensions and renewals thereof),
applications for any of the foregoing and the right to apply for any of
the foregoing in any part of the world and any similar rights situated
in any country;
"Intellectual Property Assignment" means the assignment of intellectual
property rights agreement of even date, in the form attached as
Schedule 7, relating to all Intellectual Property owned by the Seller
or any member of the Seller's Group in connection with the Business,
including without limitation, the Hadwaco Later Developed Technology,
among the Seller, and the Purchaser, to be entered into prior to
Completion;
6
"Non-Assumed Contracts" means the contracts set out in Part B of
Schedule 2;
"Ocean Power Licence" means the non-exclusive licence of even date of
the Hadwaco Later Developed Technology and the Aquamax Technology
between the Purchaser and Ocean Power;
"Purchaser's Solicitors" means Xxxxxx & Xxxxxxx of 00 Xxxxxxxxxxx,
Xxxxxx, XX0X 0XX;
"Security Interest" means and includes encumbrance, mortgage, charge,
assignment for the purpose of security, claim, pledge, lien, right of
set-off, retention of title or hypothecation for the purpose, or which
has the effect, of granting security interest of any kind whatsoever
and any agreement, whether conditional or otherwise, to create any of
the foregoing;
"Specified Employees" means those Employees who are listed in Part B of
Schedule 3;
"Seller's Group" means the Seller, any holding company of the Seller
and all companies and undertakings which are now subsidiaries or
subsidiary undertakings of the Seller or of any such holding company
(and, for the purposes of Clauses 13, 14 and 16 only, "Seller's Group"
shall also include all companies and undertakings which in the future
become subsidiaries or subsidiary undertakings of the Seller or any
holding company of the Seller);
"Seller's Solicitors" means Xxxxxx Xxxxxxxx of Xxxxxxxxxx 0, 00000,
Xxxxxxxx;
"Shareholders' Agreement" means the agreement of even date between the
Ocean Power Corporation and the Seller relating to the Purchaser;
"Tangible Assets" the tangible assets of the Business, as listed in
Schedule 4;
"Tax" or "Taxation" means all taxes, levies, duties, imposts, charges
and withholdings of any nature whatsoever or wheresoever imposed and
all penalties, charges and interest relating thereto;
"Tekes Loan Liability" means all amounts outstanding under the loans
made to the Seller by the Technology Development Fund (Teknologian
kehittamiskeskus) on 3 August 1998 and 30 August 1999 (loan No.
3037-167 and 3035-10254) on the Cut-Off Date;
"Total Consideration" means (i) the Cash Consideration; and (ii) the
Consideration Shares Price as such term is defined in the Shareholders
Agreement;
7
"Transfer Regulations" means the Finnish Act on Employment Contracts
(No. 55/2001);
"VAT" means Value Added Tax or any similar tax from time to time
replacing it or performing a similar fiscal function; and
"Warranties" means the warranties, representations and undertakings set
out in Clause 8 and Schedule 5.
1.2 References to Clauses or Schedules are to Clauses or Schedules to this
Agreement and references to sub-clauses are to sub-clauses of the
relevant Clause, and the Schedules are deemed to be incorporated in
this Agreement, and a reference to "this Agreement" includes a
reference to the Schedules.
1.3 In this Agreement:
(A) the index and the clause headings are included for convenience only and
shall not affect the construction of this Agreement;
(B) words denoting the singular shall include the plural and vice versa;
(C) words denoting any gender shall include a reference to each other
gender; and
(D) references to persons shall be deemed to include references to natural
persons, firms, partnerships, companies, corporations, associations,
organisations, foundations and trusts (in each case whether or not
having separate legal personality).
1.4 References in this Agreement to statutory provisions shall (where the
context so admits and unless otherwise expressly provided) be construed
as references to those provisions as respectively amended,
consolidated, extended or re-enacted as at the date of this Agreement
(as the context requires) and to any orders, regulations, instruments
or other subordinate legislation made under the relevant statutes.
1.5 Any statement qualified by the expression "to the best of the
knowledge, information and belief of the Seller" or "so far as the
Seller is aware" or any similar expression shall be deemed to include
an additional statement that it has been made after due, diligent and
careful enquiry by the Seller or any of its agents and employees.
2. AGREEMENT TO SELL AND PURCHASE
2.1 The Seller shall sell with full title guarantee and transfer or cause
the sale and transfer (which expression shall where appropriate include
an assignment or novation) and the Purchaser (relying on the
Warranties, representations and undertakings in this Agreement) shall
purchase with effect from Completion the Business as a going concern
free from all Security Interests together with the following assets:
(A) the Tangible Assets;
(B) all of the intangible assets of the Seller including, without
limitation, EDP and moulds owned by the Seller;
8
(C) the shares in Hadwaco (US) Inc;
(D) all of the inventories of the Seller at the date of Completion,
including, without limitation, raw materials and consumables;
(E) the following projects/works in progress: "Lohja", Xxxxx, Nexans Canada
and Nexans France.
(F) all Intellectual Property owned by the Seller or any member of the
Seller's Group in connection with the Business, including without
limitation, the Hadwaco Later Developed Technology and the Domain
Names;
(G) the Business Information; and
2.2 Title in each of the Assets will pass to the Purchaser on Completion
2.3 The only liabilities of the Seller to be transferred to and assumed by
the Purchaser at Completion are as follows:
(A) employee related liabilities accrued after the Cut-Off Date (but not
including liabilities relating to the termination of the Specified
Employees);;
(B) liabilities related to the Assumed Contracts as set out in Schedule 2
and ongoing quotations, orders and purchases related to the Business;
(C) liabilities relating to the projects / works in progress listed in
Clause 2.1 (E) ;
(D) accounts payable falling due after the Cut-Off Date;
(E) The TEKES Loan Liability .
2.4 The benefit from and burden of the Business shall belong to and be
carried by the Purchaser as from the Cut-Off Date. The parties shall
prepare interim audited accounts subject to the approval of the
Seller's and the Purchaser's auditors as per 30 June 2001 on 31 August
2001 at the latest.
2.5 Advance payments received by the Seller prior to the Cut-Off Date less
accounts receivable on the Cut-Off Date related to the projects Nexans
Canada and Nexans France less all the costs and expenses incurred prior
to the Cut-Off Date, including internal planning and production costs
according to the project follow-up system, shall be credited to or
debited from the Purchaser on 31 August 2001 at the latest.
2.6 The parties shall prepare on 21 September 2001 at the latest accounts
on the costs incurred and income received, excluding the Non-Assumed
Contracts as set out in Schedule 2, between the Cut- Off Date and the
Completion Date subject to the approval of the Seller's and the
Purchaser's auditors.
Income exceeding the costs shall be credited to the Purchaser,
correspondingly, costs exceeding the income and financing costs shall
be credited to the Seller within one week from 21 September 2001.
9
2.7 The sale and purchase of each of the Assets is inter-dependent and
shall be completed simultaneously.
2.8 Sub-clause 2.1 shall operate as an assignment of such of the
Intellectual Property owned by the Seller or any member of the Seller's
Group in connection with the Business, including without limitation,
the Hadwaco Later Developed Technology, as is not the subject of
registration or an application for registration with effect from
Completion. Any Intellectual Property owned by the Seller or any member
of the Seller's Group in connection with the Business, including
without limitation, the Hadwaco Later Developed Technology, which is
registered or which is the subject of an application for registration
shall be assigned to the Purchaser pursuant to the Intellectual
Property Assignment.
2.9 The value of the Assets has been set out in Schedule 6.
3. ASSETS AND LIABILITIES NOT INCLUDED IN THE SALE
3.1 The following are expressly excluded from the sale and purchase of the
Business and the Assets:
(A) Excluded Liabilities;
(B) all the Seller's cash in hand or at the bank or at any other financial
institution and
(C) receivables other than receivables related to following projects
referred to above in Section 2.1.(E).
The Seller's receivable of approx. US$ 252,000 from Hadwaco (US) Inc.
will be credited to Hadwaco U.S. Inc. by the Seller to the extent the
receivable is not related to certain receivables which Hadwaco (US)
Inc. has or will have in the future for work to be completed under the
project "Nexans Canada".
3.2 Nothing in this Agreement shall pass to the Purchaser, or shall be
construed as acceptance by the Purchaser, of any liability, debt or
other obligation or right of the Seller's Group, other than as
expressly set out in this Agreement.
3.3 For the avoidance of doubt the Seller shall discharge:
(A) all outstanding Security Interests relating to any Asset and subsisting
at Completion; and
(B) all supplier accounts relating to any Asset acquired by and delivered
to or any service supplied to the Business before the Cut-Off Date,
whether such accounts are rendered prior to or after the date hereof.
4. CONDITIONS PRECEDENT
4.1 Completion of this Agreement is in all respects conditional upon:
(A) Completion of the acquisition by the Purchaser of the Aquamax
Technology;
10
(B) execution by the Seller and Ocean Power of the Shareholders' Agreement;
(C) execution by the Seller, the Purchaser and Varma-Sampo Oy of the
assignment of the lease of the Seller's Helsinki Headquarters;
(D) execution by the Purchaser and Xxxxxxx Kiinteistot Oy of the lease of
the assembly factory and cassette factory situated at Leppavirta
Sorsakoski;
(E) execution by the Purchaser and the relevant parties of the transitional
services agreement(s);
(F) execution by the Purchaser and Ocean Power of the Ocean Power Licence;
(G) execution by the Purchaser and the Seller of the Hadwaco License;
(H) completion of the valuation of the Seller's assets which must be
undertaken prior to the issue of the Purchaser's shares to the Seller
under Clause 5.1.2.
(I) the Purchaser's shareholders meeting having passed the resolutions
referred to below in Clause 6;
(J) the Seller's shareholders meeting having passed the resolutions
referred to below in Clause 6
(K) an opinion by Xxxxx & Xxxxx satisfactory to Ocean Power
(L) the Ocean Power board meeting having approved the entering to
shareholders' agreement for the Purchaser.
(M) execution by the Purchaser and Aquamax (International) Holdings B.V.
and Xxxxxx Corporation N.V. of the AK Licence and a co-operation
agreement
(N) execution by the Seller and Aquamax (International) Holdings B.V. of a
settlement agreement in the agreed form;
(O) execution by Ocean Power Corporation and Aquamax (International)
Holdings B.V. of a mutual release in the agreed form;
(P) execution of the Co-operation Sales and Services Agreement between the
Seller and the Purchaser;
(Q) finalizing the Schedules to this Agreement;
(R) Payment of US$ 50,000 to Hadwaco according to OPC letter dated July
20th 2001; and
11
(S) the Seller having caused Hadwaco (US) Inc. to:
(a) discharge any and all indebtedness of
Hadwaco (US) Inc. incurred or outstanding
immediately prior to Completion, save for
(i) that part of the loan from the Seller to
Hadwaco (US) Inc. outstanding on Completion
in relation to which Hadwaco (US) Inc. has
or will have in the future for work to be
completed certain receivables under the
"Nexans Canada" project and (ii) all costs
and liabilities which were incurred in the
ordinary course of the business to be
transferred under this Agreement and which
are outstanding on Completion; and
(b) perform in full any and all obligations of
Hadwaco (US) Inc. as of Completion, save for
(i) obligations to be performed by Hadwaco
(US) Inc. under the "Nexans Canada" project
and (ii) obligations to be performed by
Hadwaco (US) Inc. which were assumed in the
ordinary course of the business to be
transferred under this Agreementin either
case whether in favour of the Seller or any
third party.
4.2 The Seller and the Purchaser shall respectively use all reasonable
endeavours to fulfil or procure the fulfilment of the conditions set
out in Clause 4.1 so far as lies within their respective powers so to
do.
4.3 Each of the parties may waive all or any of the conditions, aimed for
that party's benefit specified in Clause 4.1 at any time on or before
the Completion Date.
4.4 If any of the above mentioned conditions are not fulfilled or waived in
accordance with Clauses 4.3 or 4.4 on or before the Completion Date (or
such other date as the Seller and the Purchaser in their absolute
discretion may agree in writing) this Agreement (save for sub-clauses
14.2 and 14.3 which shall remain in force) shall become null and void
and no party shall be entitled to make a claim against another party in
connection with this Agreement save for any claim against the other
party which forms an antecedent breach or which arises in respect of
Clause 14.
5. CONSIDERATION
5.1 The consideration for the sale and transfer of the Business hereunder
shall be satisfied by the Purchaser at Completion by:
5.1.1 payment by the Purchaser to the Seller of US$1,500,000 (the "Cash
Consideration") ; and
5.1.2 issue of 19 shares in the Purchaser, representing 19 per cent. of the
issued share capital of the Purchaser after the issue (the
"Consideration Shares").
5.2 The consideration payable to Clause 5.1 shall be satisfied by the
Purchaser at Completion by:
5.2.1 transfer of the Cash Consideration into the Seller's bank account with
Xxxxxx Bank , Account number 209518-27260, Reference "Cash
Consideration" freely available for the Seller; and
5.2.2 delivery to Sellers Solicitors (who are hereby authorised to receive
the same and whose receipt shall be an absolute discharge of the
Purchaser) of a share certificate (or interim share certificate), made
out to the Seller, for the Consideration Shares.
12
6. COMPLETION
6.1 Completion will take place in accordance with Schedule 1 at 1p.m. on
the 31 August 2001 at Xxxxxx Xxxxxxxx Attorneys at Law Ltd., Xxxxxxxxxx
0, 00000 Xxxxxxxx, Xxxxxxx when the business described in Schedule 1
will be transacted.
6.2 The Seller hereby undertakes to the Purchaser that in the period prior
to Completion the Business will be carried on as a going concern in the
ordinary course and it will use its endeavours to maintain its trade
and trade connections.
7. VALUE ADDED TAX
7.1 The sale and purchase of the Assets and the Business contemplated
hereunder constitutes a transfer of business for purposes of Section 62
of the Finnish Act on Value Added Tax ( No. 1501/1993), and the Seller
and the Purchaser shall use their best endeavours to cause that the
sale of the Assets and the Business is treated as neither a supply of
goods nor a supply of services under that Section.
7.2 The Purchaser covenants to the Seller that after Completion the
Business will be carried on by it as a going concern and the Assets
will be used by it in carrying on the Business or a business of the
same kind.
7.3 The Consideration is exclusive of VAT and in the event that any VAT is
payable on the sale of the Business or the Assets, following receipt of
a valid VAT invoice, the Purchaser shall pay to the Seller an amount
equal to the VAT payable either five Business Days prior to the date on
which the Seller is due to account for the same or, if later, five
Business Days following the receipt of the tax invoice.
7.4 VAT payable in respect of goods and services supplied or deemed to be
supplied by the Seller prior to the date of Completion and all interest
payable and penalties attributable to such VAT shall be paid by the
Seller.
8. WARRANTIES
8.1 The Seller represents, warrants and undertakes to the Purchaser that
each of the Warranties is accurate in all material respects and not
misleading at the date of this Agreement.
8.2 The Seller represents, warrants and undertakes to the Purchaser that
each of the Warranties will be accurate in all material respects and
not misleading at the Completion Date as if they had been made or given
at Completion and on the basis that a reference to the Completion Date
were substituted for any express or implied reference to the date of
this Agreement;
8.3 The Warranties are given subject only to matters which have been
Disclosed.
8.4 The Seller undertakes to disclose in writing to the Purchaser anything
which is or may constitute a breach of or be inconsistent with any of
the Warranties immediately it comes to its notice both before, at the
time of and after Completion.
13
8.5 The Seller acknowledges that the Purchaser is entering into this
agreement in reliance upon the information received amongst others in
the Purchaser's investigations of the Seller and the representations in
the terms of the Warranties, made by the Seller.
9. INDEMNIFICATION
9.1 The Seller will fully indemnify and keep indemnified the Purchaser its
successors and permitted assigns (the "Indemnified Persons") for, and
will pay to the Indemnified Persons the amount of any direct loss,
cost, action, award, penalty, proceeding (whether or not involving a
third party claim), demands (including without limitation any liability
to Tax), direct expenses (including, without limitation, reasonable and
legal or other professional fees and expenses) suffered by the
Purchaser arising from or in connection with:
(A) any breach of the Warranties;
(B) any failure by the Seller to comply with its obligations under clause
11;
(C) the termination of the employment of the Specified Employees provided
that the Purchaser has given notice to terminate their employment
within three Business Days after Completion and complied in all
material respects with the written directions delivered to the
Purchaser by the Seller;
(D) any claim or other legal recourse by all or any of the Employees in
respect of any fact or matter concerning or arising from such
Employees' employment with the Seller prior to the date of Completion;
(E) the termination of engagement prior to Completion of any agent,
consultant or contractor or employee of any member of the Seller's
Group (other than the Employees) whose employment is transferred to the
Purchaser by the Transfer Regulations; and
(F) any act or omission prior to the date of Completion by the Seller in
relation to the Employees or any other employee of the Seller which by
virtue of the Transfer Regulations is deemed to be an act or omission
of the Purchaser;
(G) any VAT payable in relation to goods and services supplied or deemed to
be supplied prior to the date of Completion and all interest payable
and penalties attributable to such VAT;
(H) the exclusion of any Contract from the sale under this Agreement
pursuant to Clause 12;
(I) failure by the Seller to perform the Non-Assumed Contracts;
(J) any act or omission on the part of any member of the Seller's Group in
relation to the Business Contracts;
(K) failure to promptly pay and discharge the Excluded Liabilities in
accordance with their terms;
14
(L) ailure to discharge any indebtedness of Hadwaco (US) Inc. or perform
any obligations of Hadwaco (US) Inc. in accordance with Clause 4.1(S);
(M) failure by the Seller to discharge all outstanding Security Interests
relating to any Asset and subsisting at Completion;
(N) costs arising from the Purchaser being required to clear the Xxxxx site
on expiry or termination of the Xxxxx Contract less the value of the
equipment at the time of clearing the site.
9.2 The remedies provided by this clause 9 will not be exclusive of or
limit any other remedies available to the Purchaser although, subject
to Clause 10. The Purchaser agrees that it shall not be entitled to,
and will not seek, recission of this Agreement.
10. LIMITATION OF SELLERS LIABILITY
10.1 In the absence of fraud or dishonesty on the part of the Seller or its
agents or advisers, the Seller's liability under this Agreement is
limited as provided in this Clause 10
10.2 The Seller shall be under no liability in respect of breaches of the
Warranties unless the aggregate liability of the Seller in respect of
all breaches of the Warranties exceeds US$100,000, provided that if
such amount is exceeded, the Seller shall (subject to Clause 10.3) be
liable for the whole amount claimed in respect of breaches of the
Warranties and not only for the excess.
If any deficiency, cost or loss referred to in Clause 9.1 and 9.2 above
is a tax deductible item, the Claim that the Purchaser may make shall
be reduced by an amount equivalent to the deficiency, cost or loss
multiplied with the corporate income tax rate in Finland, applicable at
the time of the reimbursement.
10.3 The aggregate liability of the Seller under this Agreement including
breach of any undertaking and/or breach of the Warranties shall not
exceed the Total Consideration paid or payable and due, together with
the amount of any interest and costs in respect of such liability.
10.4 The Purchaser shall not be entitled to make any claim against the
Seller in respect of any breach of the Warranties unless the Purchaser
has given written notice of its intention to make such a claim to the
Seller on or before the first (1st ) anniversary of Completion.
10.5 If any breach of the Warranties arises by reason of some liability of
the Business which, at the time such breach or claim is notified to
each Seller, is contingent only, then the Seller shall not be under any
obligation to make any payment in respect of such breach or claim
unless and until such liability ceases to be contingent.
10.6 No liability shall arise in respect of any breach of any Warranties if
and to the extent that liability for such breach occurs as a result of
any legislation not in force at the date of this Agreement or to the
extent that such breach occurs as a result of a voluntary act, of the
Purchaser.
15
10.7 (A) Where the Purchaser is entitled to recover from some other
person any sum in respect of any matter giving rise to a claim
under the Warranties the Purchaser shall, and the Purchaser in
fact recovers any amount from such other person, the amount of
the claim against the Seller shall be reduced by the amount
recovered, less all reasonable costs, charges and expenses
incurred by the Purchaser recovering that sum from such other
person. Alternatively (at the Seller's option), if the Seller
has paid costs, charges and expenses hereunder to the
Purchaser, the Seller shall have the right to receive from the
Purchaser all rights to recovery related to the claim.
(B) If the Seller pays at any time to the Purchaser an amount
pursuant to a claim in respect of the Warranties and the
Purchaser subsequently recovers from some other person any sum
in respect of any matter giving rise to such claim, the
Purchaser shall forthwith repay to the Seller so much of the
amount paid by the Seller to the Purchaser as does not exceed
the sum recovered from such other person less all reasonable
costs, charges and expenses incurred by the Purchaser
recovering that sum from such other person.
10.8 Any payment made by the Seller in respect of any claim made under the
Warranties or otherwise under this Agreement shall be deemed to be a
reduction in the Total Consideration.
10.9 All sums payable by the Seller to the Purchaser for breach of any
undertaking and/or breach of the Warranties shall be paid free and
clear of all Taxes, deductions or withholdings whatsoever, save only as
may be required by law.
10.10 If any deduction or withholding in respect of Tax or otherwise is
required by law to be made from any of the sums payable as mentioned in
Clause 10.2 the Seller shall be obliged to pay to the Purchaser such
greater sum as will, after such deduction or withholding as is required
to be made has been made, so as to leave the Purchaser with the same
amount as it would have been entitled to receive in the absence of any
such requirement to make a deduction or withholding.
11. THE EMPLOYEES
11.1 The Seller and the Purchaser acknowledge and agree that the sale and
purchase pursuant to this Agreement will constitute a relevant transfer
of business for the purposes of Chapter 1 Section 10 of the Transfer
Regulations.
11.2 The Employees employed by the Seller at Completion will in accordance
with Chapter 1 Section 10 of the Transfer Regulations transfer to the
Purchaser on unchanged terms of employment.
11.3 All employer liabilities relating to the Employees (the "Employer
Liabilities") accrued but unpaid or unsettled at Cut-Off Date, whether
contractual or statutory in nature, shall be the liability of the
Seller.
11.4 The Seller undertakes to the Purchaser (for itself and as trustee for
all other possible owners for the time being of the whole or any part
of the Business and/or the Assets)
16
11.4.1 by 31 August 2001 to deliver to the Purchaser a computation (the
"Employer Liability Computation") of any Employer Liabilities due at
Cut-Off Date but not yet paid and discharged by the Seller;
11.4.2 within thirty (30) days from the date of actual payment by the
Purchaser to the Employee(s), to pay to the Purchaser any Employer
Liability by the Employer Liability Computation at Cut-Off Date
demonstrated to be outstandingly unpaid and undischarged at Completion
and thereafter paid by the Purchaser; and
11.4.3 as and when due, promptly upon the Purchaser's first demand, to pay and
discharge to the Purchaser any Employer Liability not earlier settled
to the Purchaser in accordance with this Clause 11.4.2 above.
11.5 The Purchaser will fully indemnify and keep indemnified the Seller's
Group in respect of any failure by the Purchaser to provide information
to the Seller (which it was legally obliged to provide) so as to permit
the Seller's Group to meet their obligations under the Transfer
Regulations.
11.6 The Seller agrees to compensate the Purchaser for actually paid
severance payments and dismissal costs related to the Specified
Employees provided that the Purchaser follows the Seller's
instructions.
12. THE BUSINESS CONTRACTS
12.1 The Purchaser shall become entitled to the benefits of the Seller under
the Assumed Contracts and this Agreement shall constitute an assignment
of the benefit of all Assumed Contracts to the Purchaser with effect
from Completion, provided that this Agreement shall not constitute an
assignment or attempted assignment if it would constitute a breach of
such Assumed Contract.
12.2 Where a third party consent is required to the assignment of the
benefit of any of the Assumed Contracts to the Purchaser, the Parties
shall use their best efforts to obtain any such third party consent.
Upon any such third party consent being obtained, this Agreement shall
constitute an assignment of the benefit of the Assumed Contract to
which that third party consent relates.
12.3 The Purchaser shall not be liable for any liabilities, losses, charges,
costs, claims or demands whatsoever arising from the absence of or any
failure to obtain any third party consent in accordance with this
Agreement. To the extent such agreements cannot be assigned or novated,
the Parties shall agree to the extent possible on an arrangement
whereby such agreement is performed by the Purchaser on its own behalf,
but in the name of the Seller, or on any other arrangement whereby the
Purchaser may obtain the benefit of the arrangement in exchange of
assuming the liabilities related thereto. The Seller shall at the
Purchaser's request immediately, but subject to customer's approval
terminate any of the agreements.
12.4 The benefit and burden of the Non-Assumed Contracts shall remain with
the Seller and shall not pass to the Purchaser under this Agreement or
otherwise. The Seller and the Purchaser shall agree, by the Completion
Date, upon a basis on which performance of the Non-Assumed Contracts
shall be sub-contracted to the Purchaser.
17
12.5 The Seller undertakes to perform the Non-Assumed Contracts to the
extent that performance has not been sub-contracted to the Purchaser
pursuant to arrangements made in accordance with clause 12.4.
12.6 If the Seller has omitted to give full, complete and accurate details
of or to disclose the existence of a Contract to the Purchaser, then
the Purchaser may elect in writing, within three months after becoming
aware of such details or the existence of such Contract (as the case
may be), that such Contract shall be excluded from the sale under this
agreement so that the parties' obligations in respect of that Contract
shall end immediately after such election is made.
13. OBLIGATIONS OF THE SELLER AFTER COMPLETION
13.1 The Seller undertakes to pass to the Purchaser forthwith upon receipt
any orders or enquiries in relation to the Business which it may
receive at any time after Completion.
13.2 Upon Completion the Seller and the Purchaser shall cause to be sent to
each of the Employees a letter, in the Agreed Form, explaining that his
employment has been transferred to the Purchaser pursuant to the
Transfer Regulations.
13.3 The Seller will give to the Purchaser's auditors reasonable access to
the books, accounts, records and returns of the Seller relating to or
in connection with the Business as the Purchaser may reasonably require
for the business and will keep them in good order.
13.4 The Seller shall promptly notify the Purchaser of any claims against
any member of the Seller's Group brought by any third party in respect
of any products developed within the Business, or services supplied by
the Seller and the Seller shall, subject to the Purchaser assuming the
liability for such claim and the costs related thereto, not without the
Purchaser's prior written consent take any other steps in relation to
such claims which might reasonably be expected to damage the commercial
interests of the Purchaser. If the Purchaser considers that it is
desirable to take preventative action with a view to avoiding such
claims against a member of the Seller's Group or the Purchaser, the
Purchaser shall bear all reasonable costs and expenses of that action
where such claims are not attributable to any breach of the Warranties.
13.5 The Seller shall (at its own expense) provide and cause that:
(A) the Seller and each member of the Seller's Group shall give
the Purchaser such assistance that the Purchaser may
reasonably require, for the adoption by the Purchaser of the
Business Name, or any trade xxxx relating to the Business; and
(B) The Seller's Group shall cease in any manner whatsoever to use
or display any trade or service marks, trade or service names
or logos used specifically in the Business Name or the
Business or any confusingly similar marks, domain name, name
or logo other than with the express written consent of the
Purchaser.
18
13.6 From Completion the Seller shall, and shall cause all members of the
Seller's Group, to promptly pay and discharge all Excluded Liabilities
in accordance with their terms.
14. CONFIDENTIALITY
14.1 The Seller undertakes to, and to cause that all members of the Seller's
Group along with the, agents and professional advisers of the Seller
and the Seller's Group, keep confidential and not at any time to
disclose or make known to anyone whatsoever or use for their own or any
other person's benefit all Business Information, except as may be
required by any legal or regulatory authority to which the Seller is
subject.
14.2 The Purchaser undertakes to, and to cause that its employees, agents
and professional advisors shall keep confidential and not disclose or
make known to any third party whatsoever nor use for its or any other
person's benefit any Business Information which may have been disclosed
to the Purchaser , its employees, agents and professional advisors or
which may otherwise have come to the attention of the Purchaser, its
employees, agents and professional advisors and which relates to the
business or affairs of the Seller or any company in the Seller's Group,
except as may be required by any legal or regulatory authority to which
the Purchaser, its employees, agents and professional advisors is
subject.
14.3 The obligations imposed by the provisions of sub-clauses 14.1 and 14.2
shall not apply to the extent that the Business Information in
question:
(A) is or comes into the public domain without fault on the part of the
party to whom the same was disclosed, or to whose attention the
same has come;
(B) was already known to the relevant party at the time the same, was
disclosed to it or came to its attention; or
(C) has been lawfully disclosed to the relevant party by a third party.
15. ANNOUNCEMENTS AND PUBLICITY
No announcement or circular or other publicity in connection with the
subject matter and transactions referred to in this Agreement (other
than as permitted by this Agreement) shall be made by or on behalf of
any of the parties hereto without the approval of the other Parties
hereto as to its content, form and manner of publication (such approval
not to be unreasonably withheld or delayed) save as may be required by
any applicable law, any applicable regulatory authority (including the
Securities and Exchange Commission and the Helsinki and Securities and
Derivatives Exchange, Clearing House Ltd.,) to which the Purchaser's
and the Seller's respective parent companies are subject, where such
requirement has the force of law, and provided that nothing shall
restrict the Purchaser from publicising after Completion and in a
manner and form acceptable to the Seller, that the Purchaser has
acquired the Business and communicating as otherwise necessary to
operate and develop the Business.
19
16. RESTRICTIVE COVENANTS
16.1 Each of Xxxxxxx and the Seller covenants with the Purchaser that it
will not and will cause that its subsidiaries or affiliates from time
to time will not either on its or their own account or in conjunction
with or on behalf of any person or persons whether directly or
indirectly for the period of:
(A) two (2) years, directly or indirectly, whether as principal, agent,
shareholder (other than as a shareholder of the Purchaser),
consultant, partner, employee, member, or in any other capacity
whatsoever, participate in, engage in, or be in any manner
associated with the Business as carried out at the time of
Completion. This shall not, however, prevent the Seller or Seller's
Group to fulfil its liabilities based upon the Non-Assumed
Contracts and upon the Assumed Contracts, to the extent the
Purchaser has not fulfilled its obligations;
(B) two (2) years from Completion, solicit or entice away or endeavour
to solicit or entice away from the Purchaser any officer, manager,
servant or other employee, not being a Specified Employee, who was
at Completion engaged in the Business, unless such employee's
employment has been terminated by the Purchaser, whether or not
such person would commit a breach of his contract of employment by
reason of leaving service.
16.2 Each of Xxxxxxx and the Seller acknowledges and agrees that the
provisions of Clause 16.1 are reasonable with respect to the scope of
restriction, duration and the geographic scope and are reasonably
necessary to protect the value of the goodwill and Assets of the
Business.
16.3 Whilst the covenants in Clause 16.1 are considered by the parties to be
reasonable in all the circumstances, if any one or more should for any
reason be held to be invalid but would have been held to be valid if
part of the wording thereof was deleted or the period thereof reduced
or the range of activities or area covered thereby reduced in scope,
the said covenants shall apply with the minimum modifications necessary
to make them valid and effective.
17. GUARANTEE
Xxxxxxx guarantees, as for its own debt (absolute suretyship), to the
Purchaser the due fulfilment by the Seller of the obligations of the
Seller under this Agreement.
The guarantee of Xxxxxxx is limited to a maximum aggregate amount of
USD 1,500,000 and the possibly paid and received price for the
Consideration Shares being at maximum USD 2,000,000.
Any claim under this guarantee shall be presented by the Purchaser on
the 3rd anniversary of Completion at the latest.
18. NOTICES
18.1 Any notice required to be given under this Agreement shall be in
writing signed by (or by some person duly authorised by) the person
giving it and may be served by leaving it or sending it by facsimile,
pre-paid recorded delivery to the address of the relevant party set out
in sub-clause 18.2. Any notice so served shall be deemed to have been
received:
20
(A) if delivered personally, at the time of delivery;
(B) in the case of a notice sent by pre-paid recorded delivery, 48
hours after the date or posting; or
(C) in the case of a notice sent by facsimile copier or other
electronic means of communication, if the notice was sent during
the business hours of the addressee then on the day of
transmission, and otherwise on the next following Business Day.
For the purposes of this Clause "business hours" means the hours of
9.00 a.m. to 5.30 p.m. local time in the country of the addressee.
18.2 Any notice required to be given under this Agreement shall be sent:
(A) to the Seller at: Hadwaco Ltd Oy
Facsimile No: x000 00 00 00 000
For the attention of: Tapio Hintikka, chairman of the Board
(B) to the Purchaser at: Balantum Oy
c/o Waselius & Wist
Facsimile No: x000 0 000 00000
For the attention of: CEO Xxxxxx Xxxxxx
(C) to Xxxxxxx at: Xxxxxxx Oyj
Facsimile No: x000 00 00 00 000
For the attention of: CEO Tapio Hintikka
or to such other address or facsimile number as is notified in writing
from time to time by the Seller, the Purchaser or Xxxxxxx (as the case
may be) to the other parties to this Agreement.
19. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and enure for the benefit of each
party's successors but shall not be assignable by either party without
the other party's consent. Save as aforesaid, this Agreement shall not
be assignable.
21
20. VARIATION
No variation of this Agreement shall be effective unless made in
writing and signed by or on behalf of each of the parties.
21. SEVERANCE
If at any time any provision of this Agreement is or becomes invalid or
illegal in any respect, such provision shall be deemed to be severed
from this Agreement but the validity, legality and enforceability of
the remaining provisions of this Agreement shall not be affected or
impaired thereby.
22. FURTHER ASSURANCE
The Seller shall do, execute and perform and shall cause to be done,
executed and performed all such further acts, deeds, documents and
things as the Purchaser may require from time to time effectively to
vest the beneficial ownership of the Assets in the Purchaser or as it
directs free from all liens, charges, options, encumbrances or adverse
rights or interests of any kind and otherwise to give to the Purchaser
the full benefit of this Agreement.
23. WAIVERS
A failure by any party to exercise and any delay, forbearance or
indulgence by any party in exercising any right, power or remedy under
this Agreement shall not operate as a waiver of that right, power or
remedy or preclude its exercise at any subsequent time or on any
subsequent occasion. The single or partial exercise of any right, power
or remedy shall not preclude any other or further exercise of that
right, power or remedy. No custom or practice of the parties at
variance with the terms of this Agreement shall constitute a waiver of
the rights of any party under this Agreement. The rights, powers and
remedies provided in this Agreement are cumulative and not exclusive of
any rights, powers or remedies provided by law.
24. ENTIRE AGREEMENT
24.1 This Agreement, the Intellectual Property Assignment, the documents in
the Agreed Form, the Shareholders Agreement and all agreements entered,
or to be entered into, pursuant to the terms of this Agreement or
entered into between the parties, or the Seller and the Purchaser, in
writing and expressly referring to this Agreement:
(A) together constitute the entire agreement and understanding between
the parties with respect to the subject matter of this Agreement;
and
(B) (in relation to such subject matter) supersede all prior
discussions, understandings and agreements between the parties and
their agents (or any of them) and all prior representations and
expressions of opinion by any party (or its agent) to any other
party (or its agent), including without limitation the Letter of
Intent dated 20 June, 2001 between the Seller, the Guarantor and
Ocean Power Corporation Inc.
24.2 Each of the parties acknowledges that the Schedules to this Agreement
have not been finalized on the signing date of the Agreement and that
agreeing on the content of the Schedules is a condition precedent for
Completion. The parties undertake to contribute to the finalizing of
the Schedules between the signing date and the Completion.
22
24.3 Each of the parties acknowledges that it is not relying on any
statements, warranties or representations given or made by any of them
in relation to the subject matter hereof, save those expressly set out
in this Agreement, and other documents referred to above, and that it
shall have no rights or remedies with respect to such subject matter
otherwise than under this Agreement (and the documents executed at the
same time as it or referred to in it) save to the extent that they
arise out of the fraud or fraudulent misrepresentation of any party.
25. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, and which together shall
constitute one and the same Agreement. Unless otherwise provided in
this Agreement, this Agreement shall become effective and be dated (and
each counterpart shall be dated) on the date on which this Agreement
(or a counterpart of this Agreement) is signed by the last of the
parties to execute this Agreement or, as the case may be, a counterpart
thereof.
26. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of Finland.
27. SETTLEMENT IN GOOD FAITH
In the event of any dispute concerning this Agreement or the
interpretation of same, it is hereby agreed that the Seller and
Purchaser shall use their best endeavours to settle such disputes,
without recourse to law, by means of negotiations in good faith under
the spirit of fair treatment of one another, but should this not be
found possible, then such disputes shall be referred to arbitration in
accordance with Clause 28 herein below.
28. ARBITRATION
Any dispute, controversy or claim arising out of or relating to this
Agreement or the breach, termination or invalidity thereof shall be
settled by arbitration in accordance with the Finnish Act on
Arbitration Procedure. The arbitration tribunal shall consist of three
arbitrators one of whom shall be appointed by Xxxxxxx Oyj Abp and one
of whom shall be appointed by the Purchaser. The arbitrators so
appointed shall jointly appoint the third arbitrator to act as
chairman. Unless a party has appointed its arbitrator or the
arbitrators have failed to appoint the third arbitrator within
twenty-one (21) days from being requested to appoint its arbitrator of
from the date the second arbitrator was appointed, as the case may be,
the relevant arbitrator shall be appointed by the Committee of
Arbitration of the Central Chamber of Commerce of Finland. The place of
arbitration shall be Helsinki and the arbitration proceedings shall be
carried out in the English language.
23
29. POST-COMPLETION EFFECT
This Agreement shall remain in full force and effect after and
notwithstanding Completion in respect of all obligations, agreements,
covenants, undertakings or conditions contained in or implied by this
Agreement which have not been done, observed or performed at or prior
to Completion and all warranties, representations and indemnities
contained in or implied by this Agreement (including the warranties)
shall continue in full force and effect after and notwithstanding
Completion and the parties may take action for any breach or
non-fulfilment of any of them either before or after Completion
(whether or not such breach or non-fulfilment may have been known to or
discoverable by the party taking action prior to Completion).
AS WITNESS the hands of the parties to this Agreement or their duly
authorised representatives on the date written on page 1 of this
Agreement.
24
SCHEDULE 1
Completion Requirements
1. Matters to dealt with by the Seller
At Completion, the Seller shall:
(A) Transfer of Business Assets capable of delivery/allow the Purchaser
to take control over
Deliver to the Purchaser all the Business Assets which are capable
of transfer by delivery with the intent that legal and beneficial
title to these Business Assets shall pass by and upon delivery.
(B) Transfer of Business Properties
Deliver to the Purchaser or the Purchaser's Solicitors in respect
of the Business Properties:
(i) Lease counterpart; and
(ii) Lease assignment.
(C) Other Matters
Deliver to the Purchaser's Solicitors:
(i) assignments in the Agreed Form of all Intellectual Property
owned by the Seller or any member of the Seller's Group in
connection with the Business, including without limitation,
the Hadwaco Later Developed Technology, ;
(ii) the transitional services agreement duly executed by the
Seller;
(iii) a copy of the minutes of a shareholders' meeting of the
Seller in a form approved by the Purchaser authorising the
execution by the Seller of this Agreement and all other
relevant documents referred to in this Agreement endorsed
with a certificate by the secretary of the Seller that those
copy minutes are a true and accurate record of the meeting
and that the authority conferred remains valid and
outstanding;
(iv) a certified copy of a resolution changing the name of the
Seller from Hadwaco Ltd Oy to a name not including the word
Hadwaco;
(v) a copy of the minutes of a meeting of the directors of
Xxxxxxx in a form approved by the Purchaser authorising the
execution by the Guarantor of this agreement and all other
relevant documents referred to in this Agreement endorsed
with a certificate by the secretary of the Guarantor that
those copy minutes are a true and accurate record of the
meeting and that the authority conferred remains valid and
outstanding;
25
(vi) evidence satisfactory to the Purchaser of compliance by the
Seller of its obligations under Clause 4.1(S).
(D) Vacant Possession of Business Properties
The Seller shall give vacant possession of all the Business
Properties (and of the other Business Assets capable of possession)
to the Purchaser.
2. Matters to be dealt with by the Purchaser
Following compliance by the Seller with its obligations under paragraph
1 above;
(A) The Purchaser shall have issued and allotted to the Seller the
Consideration Shares to be subscribed for and cause a certificate
or an interim certificate for the Consideration Shares in the name
of the Seller to be executed by the Purchaser to be delivered to
the Seller's Solicitors.
(B) The Purchaser shall transfer and pay into the Sellers account the
Cash Consideration as stated in Section 5.2.1.
(C) Approval of the shareholders' agreement for the Purchaser by the
board of Ocean Power
26
SCHEDULE 2
PART A
The Assumed Contracts
PART B
The Non-Assumed Contracts
27
SCHEDULE 3
PART A
(The Employees)
Name and address Date of start of Salary Pension Bonus Holidays
employment
----------------- ------------------ ------------- ------------- ------------- ------------------
PART B
(The Specified Employees)
28
SCHEDULE 4
The Tangible Assets
29
SCHEDULE 5
Warranties
PART A
GENERAL
1 INFORMATION SUPPLIED
The Purchaser and Ocean Power Corporation have performed a legal and
commercial Due Diligence investigation of the Company and its
subsidiary's affairs, and have investigated and assessed the
Intellectual Property, including the Aquamax Technology and the Hadwaco
Later Developed Technology. The Purchasers representatives have had the
opportunity to interview the Employees and have received access to all
the information requested by the Purchaser. So far as the Seller is
aware, all information contained in this Agreement, all matters
contained in the Due Diligence Binders relating to the Business given
by the Seller or its accountants or the Seller's Solicitors to the
Purchaser or its accountants or the Purchaser's Solicitors are true,
accurate and complete in all material respects and there is no material
fact or matter relating to the Business which is known or ought on
reasonable enquiry to be known to the Seller which has not been
disclosed in the Due Diligence Binders or which renders any such
matters or information untrue, incomplete or misleading in any material
respect.. It is explicitly understood and accepted by the Purchaser
that the Seller however takes no liability for or in relation to any
financial or other budgets, plans or estimates relating to the future.
2 CAPACITY OF THE SELLER
2.1 Each of the Seller and Xxxxxxx has full power and authority and has
taken all necessary corporate action to enable it effectively to enter
into and perform this Agreement and all agreements entered into, or to
be entered into, pursuant to the terms of this Agreement, and such
agreements when executed, will constitute valid, binding and
enforceable obligations on the Seller in accordance with their
respective terms and it does not require the consent, approval or
authority of any other person to enter into or perform its obligations
under this Agreement and its entry into and performance of this
Agreement will not constitute any breach of or default under any
contractual, governmental or public obligation binding upon it, and it
is not engaged in any litigation or arbitration proceedings which might
have an effect upon its capacity or ability to perform its obligations
under this Agreement and no such legal or arbitration proceedings have
been threatened against it.
2.2 The Business is not carried on by or for the benefit of any person,
firm or corporation other than the Seller.
3 RECORDS
3.1 All books, accounts and records required by law to be maintained in
connection with the Business have at all times been properly and
accurately maintained and are properly written up to date and will be
so kept up to Completion and all returns and payments for the purposes
of VAT have been made.
30
4 THE ASSETS
4.1 The Assets comprise all assets now used in the Business and which are
necessary for the continuation of the Business as now carried on.
Notwithstanding the foregoing, the parties acknowledge and approve of
the fact that the Assets do not include the license agreement signed in
1994 and as later amended between the Seller and Aquamax
(International) Holdings B.V..
4.2 The Assets are in good repair and condition, reasonable wear and tear
expected, regularly maintained and fully serviceable and capable of
being used in connection with the Business. The Purchaser is aware of
that the pilot plant units are in need of repair.
4.3 The Seller has good and marketable title to, and has in its possession
and under its control, all of the Assets which are sold free from any
Security Interest, agreement of hire or hire purchase or for payment on
deferred terms, xxxx of sale or any obligation to pay any outstanding
sums in respect of them and no person other than the Seller has or
claims any rights in relation to the Assets or any of them or the
proceeds of any sale of the Assets or any of them and the Assets are
not subject to or potentially subject to any floating charge or
guarantee given by the Seller or by any person or company connected
with the Seller. The Seller is aware of the arrangements related to
Xxxxx and Lohja.
4.4 All documents which in any way affect the right, title or interest of
the Seller in or to any of the Assets and which attract stamp duty have
been duly stamped within the requisite period for stamping.
5 THE BUSINESS CONTRACTS
5.1 All the Business Contracts are in full force and effect and have been
duly complied with and the Seller is not aware of anything having
occurred whereby any of them is or could be subject to early
termination or which has given or that any claim under any of them
would have been presented against the Seller except for ordinary claims
relating to project deliveries, within the ordinary course of business.
5.2 All the terms of each of the Business Contracts are on arms' length
terms and have been fully Disclosed.
5.3 Neither the Seller nor any persons connected with the Seller has any
direct or indirect interest in any business which has a close trading
relationship with the Business or which is or is likely to become
competitive with the Business.
6 EMPLOYEES AND CONSULTANTS
6.1 Particulars of Employees and Terms of Employment
6.2 No person is employed or engaged in the Business (whether under a
contract of service or contract for services) other than the Employees.
31
6.3 The Seller has Disclosed copies of all service contracts and contracts
for services and full particulars of the current and any future agreed
terms of employment or engagement of all Employees or of any other
person engaged in the Business under a contract of service
("Consultant") including, but not limited to, details of all benefits,
(whether contractual or discretionary and whether current or future)
and all of such particulars are true and accurate and complete in all
material respects.
6.4 In respect of each of the Employees each member of the Seller's Group
has:
(a) performed and observed all its obligations under or in connection with
the contracts of employment of the Employees;
(b) abided by the terms of any agreement concluded by the Seller or on its
behalf with any trade union, staff association or similar organisation
recognised by the Seller for the purposes of collective bargaining, so
far as the same shall be applicable to any of the Employees; and
(c) fully complied with any of its statutory obligations to inform and
consult with employees, trade union or other employee representatives
on any matter concerning or arising from this Agreement.
6.5 There are no outstanding Employer Liabilities on the part of the
Business to or for the benefit of any person who is an Employee of the
Business, save for accrued but not due vacation rights.
6.6 No member of the Seller's Group has offered, promised or agreed for the
future any variation in any contract of employment or any contract for
services in respect of the Employees or any other person employed by
the Seller's Group in respect of whom liability is deemed by the
Transfer Regulations to pass to the Purchaser.
6.7 Each member of the Seller's Group has paid to the appropriate authority
all taxes, National Insurance contributions and other levies due in
respect of the Employees in respect of their employment by the Seller's
Group up to the date of Completion.
6.8 No Employee or consultant has given or received notice terminating his
employment and no Employee or consultant is entitled or intends or is
likely to terminate such employment or engagement as a result of the
parties entering into this Agreement on Completion.
6.9 There is no person previously employed by the Seller's Group in the
Business who now has or may in the future have a right to return to
work (whether for reasons connected with maternity leave or absence by
reason of illness or incapacity or otherwise) or a right to be
reinstated or re-engaged in the Business or to any other compensation.
6.10 Save as disclosed in the Due Diligence Binders no member of the
Seller's Group is under any legal liability or obligation to pay
bonuses, gratuities, superannuation, allowances or the like to any of
the Employees or to their dependants or persons formerly employed or
engaged in the Business or their dependants nor is it a party to any
arrangements or promise to make or in the habit of making ex gratia or
voluntary payments by way of bonus, gratuity, superannuation, allowance
or the like to any such persons and other than the compulsory pension
32
insurance arrangements there are no schemes or arrangements (whether
legally enforceable or not) for payment of retirement, pension,
disability, life assurance, death benefit or sickness or accident
benefit or similar schemes or arrangements in operation or contemplated
in respect of any of the Employees or their dependants or persons
formerly employed or engaged in the Business or their dependants under
which the Purchaser or any of the owners for the time being of the
Business or the Assets or any part thereof may become liable to make
payments or to provide equivalent benefits.
6.11 There are not in existence and the Seller's Group has not proposed or
is not proposing to introduce any profit-sharing scheme, share option
scheme, share incentive scheme or any other scheme or arrangement under
which the Employees or any of them are or is or would be entitled to
participate in the profits of the Business.
6.12 There are no arrangements, whether contractual or otherwise, entitling
any of the Employees to any payment or other benefit arising from the
sale of the Business to the Purchaser, and there are no amounts
outstanding or promised to any of the Employees and no liability has
been incurred by the Seller which remains undischarged for breach of
any contract of service or for services or for redundancy payments
(including protective awards) or for compensation under any employment
legislation or regulations or for wrongful dismissal, unfair dismissal,
equal pay, sex, race or disability discrimination or otherwise and no
order has been made at any time for the reinstatement or re-engagement
of any of the Employees or any person formerly employed or engaged in
the Business.
6.13 The Seller's Group is not engaged or involved in any dispute, claim or
legal proceedings (whether arising under contract, common law, statute
or in equity) with any of the Employees nor with any other person
employed by the Seller in respect of whom liability is deemed to pass
to the Purchaser by virtue of the Transfer Regulations.
6.14 There is no official industrial action or official dispute threatened
or existing or anticipated in respect of or concerning any of the
Employees.
6.15 The Seller's Group is member of the Employers' Association within the
Metal Industry and applies the collective agreements of the said
industry.
6.16 The Seller's Group has not undertaken to provide any of the employees
pension rights exceeding the Finnish mandatory pension rights (TEL).
7 INSURANCE
7.1 All the Assets are and have at all material times been insured in
accordance with the Xxxxxxx Group insurance policy (a copy of which has
been supplied to the Purchaser) the terms of which are in accordance
with generally accepted practice with a well established and reputable
insurer against fire and all other risks customarily insured against
and there are and have at all material times been in force policies of
insurance giving adequate cover against accident, damage, injury, third
party loss (including product liability) and all other risks normally
insured against by persons carrying on a similar business to the
Business.
33
7.2 None of the such policies of insurance is subject to any special or
unusual terms or restrictions or to the payment of any premium in
excess of the normal rate.
8 STATUTORY RESTRICTIONS
The Seller is not aware of that, neither it nor any of its officers,
agents or employees has done or omitted to do any act or thing which is
or could be in contravention or breach of or the subject of enquiry,
investigation or proceedings under the provisions of any Act, Order,
Regulation in or pertaining to the Finland or elsewhere giving rise to
any fine, penalty, default, proceedings or other such liability in
relation to the Business or any of the Assets.
9 DEFECTIVE PRODUCTS/ SERVICES
The Purchaser has received information of the outstanding issues
relating to the projects assumed by the Purchaser.
10 LITIGATION
10.1 Neither the Seller nor any person for whose acts or omissions it may be
vicariously liable is engaged in or subject to any other civil,
criminal or arbitration proceedings in relation to the Business or the
Assets or any of them and there are no such proceedings pending or
threatened by or against the Seller or against any such person and
there are no judgments outstanding against the Seller which affect or
might affect any of the Assets, other than the arbitration against
Aquamax International (Holding) B.V. relating to the Aquamax Licence.
11 INSOLVENCY OF SELLER
11.1 No order has been made or petition presented, meeting convened or
resolution passed for the winding up of any member of the Seller's
Group nor has any receiver been appointed or any distress, execution or
other process been levied in respect of the Business or the Assets or
any of them.
11.2 No composition in satisfaction of the debts of the Seller's Group or
scheme of arrangement of its affairs or compromise or arrangement
between it and either or both of its creditors or members or any class
of either or both of its creditors or members has been proposed,
sanctioned or approved.
11.3 No distress, distraint, charging order, garnishee order, execution or
other process has been levied or applied for in respect of the whole or
any part of the Business or the Assets.
11.4 No event has occurred causing, or which upon intervention or notice by
any third party may cause, any floating charge created by the Seller's
Group to crystallise over the Business or the Assets or any of them or
any charge created by it to become enforceable over the Business or the
Assets or any of them nor has any such crystallisation occurred nor is
such enforcement in process.
34
12 COMPLIANCE
12.1 All legislation and all orders, provisions, directions and conditions
relating to the Assets or the conduct of the Business (including VAT)
have been duly complied with in all material respects.
12.2 All necessary Finnish licences, consents, permits, agreements,
arrangements and authorities (public and private) have been obtained to
enable the Seller to carry on the Business in the manner in which it is
now carried on and all such licences, consents, permits, agreements,
arrangements and authorities are valid and subsisting and the Seller
knows of no reason why any of them should be suspended, cancelled or
revoked or the benefit of them should not continue to be enjoyed by the
Purchaser or other owners for the time being of the Business and the
Assets or any part of them.
13 U.S. SUBSIDIARY
13.1 The Seller holds all of the legal and beneficial interest in all of the
issued shares in Hadwaco (US) Inc. and such shares are held free from
any interest or equity of any person, including any right to acquire,
option, right of pre-emption, mortgage, charge, pledge, lien,
assignment, hypothecation or any other security agreement or
arrangement.
13.2 Hadwaco (US) Inc. has no liabilities, actual or contingent (including
contingent liabilities to customers and contingent liabilities for
taxation), save for those Disclosed.
14 EFFECT OF AGREEMENT
14.1 The execution and delivery of this Agreement and the fulfilment and
performance of and compliance with the terms of this Agreement do not
and will not conflict with, violate or result in a breach of the terms,
provisions or conditions of any of the Business Contracts or any law,
undertaking to or judgment, order, injunction or decree of any court.
35
SCHEDULE 5
PART B
Intellectual Property
1. The Seller is the sole owner of all rights, title and interests in and
to all Intellectual Property owned by the Seller or any member of the
Seller's Group in connection with the Business, including without
limitation, the Hadwaco Later Developed Technology, , subject to a
non-exclusive license to Aquamax pursuant to Article 13 of the Aquamax
License .
2. The Seller has the right, power and authority to assign all right and
title to all Intellectual Property owned by the Seller or any member of
the Seller's Group in connection with the Business, including without
limitation, the Hadwaco Later Developed Technology, to the Purchaser
including all patents and patent applications related thereto, subject
to the rights of Aquamax stated in section 1 above..
3. None of the Intellectual Property owned by the Seller or any member of
the Seller's Group in connection with the Business, including without
limitation, the Hadwaco Later Developed Technology, , to the best of
Seller's knowledge after due investigation, infringes or violates any
rights held by any third parties including without limitation any
patent, copyright, trade secret or other intellectual or industrial
property rights, including without limitation, U.S. patent number
5,587,053 (the "Xxxxx patent").
4. Notwithstanding the warranties given above in Schedule 5 Part B, the
parties acknowledge and approve of the facts that the Assets do not
include the license agreement signed in 1994 and as later amended
between the Seller and Aquamax (International) Holdings B.V. and
neither do the assets include the Finnish patent No 94217 (the "Shippax
patent").
36
SCHEDULE 5
PART C
Taxation
1. The Seller is not involved in any dispute in relation to Tax concerning
any matter in any way affecting either the Business or any of the
Assets to be transferred under this Agreement.
2. The Seller, with respect to the Business and the Assets, has on a
timely basis filed all tax returns and any related and supporting
documents required to be filed by the Seller, and the Seller has paid
in full all Taxes required to be paid by the Seller by any tax
authority for all periods up to and including the Completion and all
Taxes that the seller, with respect to the Business and the Assets, is
required to withhold or collect by Completion, have been duly withheld
or collected and have been paid to the proper governmental authorities
or insurance companies.
37
SCHEDULE 6
Apportionment Of Asset Value
Tangible Assets FIM[ ]
Intangible Assets FIM[ ]
Fixed Financial Assets FIM[ ]
Inventories FIM[ ]
TOTAL FIM[ ]
38
SCHEDULE 7
Intellectual Property Assignment
The Seller hereby transfers and assigns to the Purchaser, at the Completion
Date, all right, title and interest in and to all of the intellectual property
assets listed below, the same to be held and enjoyed by Purchaser for
Purchaser's own use and enjoyment and the use and enjoyment of Purchaser's
affiliates, successors, assigns or other legal representatives, in perpetuity,
as fully and entirely as the same would have been held and enjoyed by Seller if
this assignment had not been made:
A. patents and patent applications
B. trademarks
C. all know-how, brand or business name other than those including the name
Xxxxxxx, domain names, drawings, registered designs, design rights,
copyrights (including all such rights in owned computer software and
databases), moral rights and topography rights, applications for any of the
foregoing and the right to apply for any of the foregoing in any part of
the world and any similar rights situated in any country and
D. the Business Information
SIGNED by )
for and on behalf of )
BALANTUM OY )
SIGNED by )
for and on behalf of )
HADWACO LTD OY )
SIGNED by )
for and on behalf of )
XXXXXXX OYJ ABP )
39
SIGNED by )
for and on behalf of )
BALANTUM OY )
SIGNED by )
for and on behalf of )
HADWACO LTD OY
)
SIGNED by )
for and on behalf of )
XXXXXXX OYJ ABP )
40
