SHARE PURCHASE AGREEMENT
This Share Purchase Agreement made and entered into on this
16th day of February 2000 in Helsinki, Finland by and between
SANTASALO GEARS OY, a company organized and existing under the
laws of Finland having its registered domicile in the City of Jyvaskyla and its
registered address at ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
on the first part, hereinafter referred to as the Seller,
and
▇▇▇▇▇▇▇ INTERNATIONAL, PLC, a company organized and existing
under the laws of England, UK having its registered domicile in London, UK and
its registered address at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇.
on the second part, hereinafter referred to as the Buyer.
W I T N E S S E T H
WHEREAS, the Seller owns all of the Shares of Valmet
Hydraulics Oy (hereinafter referred to as the Company), a company organized and
existing under the laws of Finland (RN:o 683.900) with its registered domicile
in the Municipality of Jyvaskylan maalaiskunta and its registered address at
▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇.
WHEREAS, the Buyer desires to purchase and the Seller desires
to sell all of the Shares of the Company to the Buyer on the terms and subject
to the conditions set forth in this Agreement hereof.
NOW, THEREFORE, in consideration of the mutually good and
valuable premises and conditions set forth herein the Seller and the Buyer this
day have agreed as follows:
ARTICLE I.
DEFINITIONS
As used in this Agreement, unless expressly otherwise stated
or evident in the context, the following terms shall have the following
meanings:
Section 1.1. "Agreement" shall mean this Share Purchase
Agreement and the appendices thereto.
Section 1.2. "Closing" shall mean the event of the
simultaneous transactions specified in Article 7 of this Agreement.
Section 1.3. "Closing Date" shall mean February 29th 2000 or
such later date as specified in Article 7.2 of this Agreement.
Section 1.4. "Closing Date Accounts" shall mean the profit and
loss statement and balance sheet of the Company to be prepared by the Company as
at the Closing Date in conformity with the generally accepted accounting
principles in Finland as applied by the Company in preparation of the Financial
Statements (as defined below) and be reviewed by the auditors of the Company as
provided for in Article 7.3 hereof.
Section 1.5. "Company" shall mean Valmet Hydraulics Oy, a
Finnish joint stock company entered into the Trade Register under No. 683.900.
Section 1.6. "Disclosure Letter" shall mean the letter dated
the same date as this Agreement (together with the documents annexed thereto)
written by the Seller and the Company setting out the disclosures which the
warranties and representations in Article 8 are subject to, attached as Appendix
1 hereto.
Section 1.7. "Financial Statements" shall mean the audited
profit and loss statement and balance sheet of the Company as at December 31,
1999, attached hereto as Appendix 3.
Section 1.8. "Loan" shall mean the loan granted to the Company
by Metso Corporation in the capital amount of Euro 3.363.758,53 as of December
31, 1999 and on such other terms as specified in the deed of loan dated May 1st,
1999.
Section 1.9. "Material Adverse Effect" shall mean material
adverse change in or material adverse effect on the financial condition,
business or operations of the Company, in excess of the amount equal to 15% of
the Purchase Price ie FIM 15.045.000.
Section 1.10. "Material Agreements" shall mean the agreements
of the Company as listed or enclosed as copies in Appendix 9.
Section 1.11. "Net Debt" shall mean the difference between the
Loan and the cash (or its equivalent) of the Company calculated as specified in
Appendix 11.
Section 1.12. "Party" shall mean the Seller or the Buyer, as
required by the context, and "Parties" shall mean the Seller and the Buyer.
Section 1.13. "Purchase Price" shall mean the aggregate
purchase price of the Shares in accordance with Article 3.1 of this Agreement.
Section 1.14. "Shares" shall mean all of the shares of the
capital stock of the Company to be transferred to the Buyer as provided
hereunder, representing one hundred percent (100%) of all shares of the Company.
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Section 1.15. "To the knowledge of the Seller" shall mean the
actual knowledge of management of the Seller or ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Managing
Director of the Company or Messrs ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
Matti Kaarnametsa or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
ARTICLE II.
OBJECT OF THE TRANSACTION
The Seller hereby agrees to sell and the Buyer hereby agrees
to buy the Shares, consisting of 15,000 ordinary shares of capital stock of the
Company, currently held by the Seller, on the terms and conditions herein set
forth.
ARTICLE III.
PURCHASE PRICE
Section 3.1. Purchase Price
The Purchase Price of the Shares shall be the fixed amount of
Finnish Markka One Hundred Million Three Hundred Thousand (FIM 100.300.000).
The Purchase Price is based on the estimated Net Debt position
MFIM 7,698 of the Company as of February 29th 2000 calculated as specified in
Appendix II. Thus, the Purchase Price shall be adjusted as per Article 3.2 below
by the amount equal to any increase or decrease of the Net Debt of the Company
as recorded in the Closing Date Accounts relative to the Net Debt position MFIM
7,698 of the Company as of February 29th 2000.
Section 3.2. Payment of the Purchase Price
Purchase Price shall be paid by the Buyer at the Closing by
bank transfer in immediately available funds into such account or accounts as
designated by the Seller.
Purchase Price adjustment due to the change of the Company's
Net Debt position referred to in Article 3.1 above shall become due and be paid
by the respective party (ie by the Seller should the Net Debt be increased - by
the Buyer should the Net Debt be decreased) to the other within seven (7) days
from the date of submittal of the opinion by PriceWaterhouseCoopers Oy as to the
contents of the Closing Date Accounts.
The Purchase Price adjustment shall be paid in such amount as
stated by PriceWaterhouseCoopers Oy (irrespective of any objections thereto
possibly taken by either Party in accordance with the proceedings described in
Article 7.3).
ARTICLE IV.
TRANSFER OF TITLE
The full ownership of and title to the Shares shall pass to
the Buyer on the Closing Date at the Closing simultaneously with the fulfillment
and completion of the Closing procedures set forth in Article 7 hereunder.
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ARTICLE V.
DUE DILIGENCE
During the period starting on the date of signing of this
Agreement up to the Closing Date, the Seller shall permit the Buyer and its
representatives to conduct during normal business hours an investigation and
inspection of the Company, and the Seller shall in connection therewith provide
the Buyer full access to the books, records, property and personnel of the
Company.
The Buyer shall, on a continuous basis openly communicate with
the Seller with respect to the results of the inspection and investigations of
the Company, and shall prior to Closing disclose to the Seller any findings or
information obtained therein which in its reasonable judgement could affect the
Purchase Price, or lead to or form a basis for a breach of the warranties and
representations given in this Agreement.
ARTICLE VI.
CONDITIONS PRECEDENT FOR CLOSING
Section 6.1. Conditions precedent to the Buyer
The obligation of the Buyer to close hereunder shall be
subject to the satisfaction at or prior to the Closing of each of the following
conditions (which conditions may be waived in whole or in part by the Buyer at
its sole discretion):
(i) All statutory requirements and authorizations as specified
in Appendix 10 shall have been obtained;
(ii) The representations and warranties of the Seller herein
contained shall be true and correct at the Closing so as to
have no Material Adverse Effect;
(iii) From and after the date of this Agreement and through
the Closing no Material Adverse Effect has occurred;
(iv) the Seller has given to the Buyer an access to the
Company as provided for in Article 5 above;
(v) the Seller shall have performed all material obligations
to be performed or complied with by the Seller at or prior to
the Closing.
(vi) All corporate actions necessary for the lawful and valid
consummation of the transaction shall have been duly taken by
the Seller.
(vii) the Seller shall cause the Company to send a notice to
North American Hydraulics Inc. ("NAHI") stating that in the
opinion of the Company the proposed transaction as to
Regulations of Valudraulics, LLC as signed by the Company has
lapsed due to the inactivity by NAHI and its response of
December 12th 1999.
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(viii) no new material adverse findings as to the technical
quality of the Company's products.
(ix) the Parties shall jointly meet with the representatives
of AG-Chem and Denharco prior to the Closing and such
customers indicate they do not intend to discontinue or
substantially decrease the volume of purchases from the
Company within the pending financial year compared to the
budgeted sales of the Company relative to such customers.
Section 6.2. Conditions precedent to the Seller
The obligation of the Seller to close hereunder shall be
subject to the satisfaction at or prior to the Closing of each of the following
conditions (which conditions may be waived in whole or in part by the Seller, at
their sole discretion):
(i) All statutory requirements and authorizations as specified
in Appendix 10 shall have been obtained;
(ii) the Buyer shall cause the Company to repay to Metso
Corporation the full capital amount of the Loan plus the
accrued interest up to the Closing Date thereon;
(iii) the Buyer shall have performed all material obligations
to be performed or complied with by the Buyer at or prior to
the Closing.
Section 6.3. Best Efforts
Each Party undertakes to use its best efforts to cause the
conditions precedent to its own obligations to be fulfilled as soon as possible.
Unless Closing has taken place by May 1st 2000 either party may cancel the
Agreement without prejudice to any remedies available under law.
ARTICLE VII.
CLOSING
Section 7.1. Closing
The Closing shall take place on the Closing Date starting at
9.00 am at the office of Metso Corporation. At the Closing
(i) the Seller shall release and deliver to the Buyer duly
endorsed share certificates corresponding to the Shares;
(ii) the Buyer shall pay the Purchase Price;
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(iii) the Buyer shall provide the Company with adequate
immediately available funds to repay to Metso Corporation the
full capital amount of the Loan plus the accrued interest up
to the Closing Date thereon;
(iv) the Company shall repay to Metso Corporation the full
capital amount of the Loan plus the accrued interest up to the
Closing Date thereon with immediately available funds into
such account(s) as designated by Metso Corporation;
(v) the Buyer shall present a schedule of the breaches in
Seller's representations and warranties under this Agreement
which the Buyer has become aware of in course of the due
diligence inspection and investigation of the Company, or
otherwise prior to the Closing Date;
(vi) each party shall deliver to the other all certificates
and other documents required to be delivered by such party
under this Agreement;
(vii) the Seller shall deliver letters of resignation from the
Board of Directors of the Company effective on the Closing
Date signed by each member of said Board;
(viii) the Buyer shall cause an Extraordinary General Meeting
of Shareholders of the Company be held in order to elect a new
board of Directors chosen by Buyer.
(ix) All steps taken in connection with the Closing will be
considered to have occurred simultaneously as a part of a
single transaction and in the proper sequence and no delivery
will be considered to have been made until each such step has
been completed, and thus Closing will be completed only after
all the steps mentioned above have been taken.
Section 7.2. Closing Date
The Closing Date shall be February 29th, 2000 or a later date
specified by the parties hereto when all conditions precedent for the Closing as
set forth in Article 6 of this Agreement have been fulfilled.
Section 7.3. Closing Date Accounts
The Company shall within thirty (30) days from the Closing
Date draw up Closing Date Accounts in conformity with the generally accepted
accounting principles in Finland as applied by the Company in preparation of the
Financial Statements. The Closing Date Accounts shall be submitted to the audit
of PriceWaterhouseCoopers Oy in order to certify
(i) that the Closing Date Accounts have been drawn up in
accordance with laws and generally accepted accounting principles in Finland
("hyva kirjanpitotapa") consistently applied according to Company's past
practice.
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(ii) the Net Debt of the Company as of the Closing Date and
any decrease or increase thereof relative to Net Debt of the Company as of
February 29th 2000.
All the costs of the aforesaid audit shall be borne by the
Company.
The Closing Date Accounts so certified by
PriceWaterhouseCoopers Oy shall be submitted for the review of the Parties. The
Closing Date Accounts shall be deemed accepted and shall be conclusive for the
purpose of defining the Purchase Price, unless within thirty (30) days after
delivery of the Closing Date Accounts to the Parties, either of the Parties
shall give a written notice to the other Party objecting the certification of
the Closing Date Accounts and submits an adjusted Closing Date Accounts to such
other Party.
The adjusted Closing Date Accounts determined on the basis
thereof shall be deemed to be accepted and shall be conclusive for the purposes
of defining the Purchase Price unless such other Party shall, within thirty (30)
days after the date on which the adjusted Closing Date Accounts were delivered,
deliver a written notice to the disputing Party objecting to the adjusted
Closing Date Accounts.
If the Parties are unable to resolve the dispute as to the
treatment of any item(s) relating to the adjusted Closing Date Accounts within
thirty (30) days after receipt of the notice referred to in above, the dispute
shall be referred for decision to an independent accounting firm ie KPMG Wideri
Oy.
The independent accounting firm shall, within thirty (30) days
of such submission, determine and report to the Parties its resolution on such
remaining disputed items and certify the Net Debt of the Company as at the
Closing Date, accordingly. The resolution and certification shall be final,
binding and indisputable for both the Parties and the payment of Purchase Price
shall be adjusted accordingly.
ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller acknowledges that Buyer is entering into this
agreement in reliance on the representations and warranties given herein by the
Seller to Buyer being true and correct as of the date of this Agreement and on
the Closing Date and consequently the Seller hereby represents and warrants to
and agrees with the Buyer as specified below, however, which warranties and
representations are subject to qualifications given in Article 8.25 below.
Section 8.1. Power
The Seller has full power and authority to own, hold and sell
the Shares and to execute and deliver the Agreement and consummate the
transactions contemplated thereby. The Agreement constitutes the valid and
binding obligation of the Seller.
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Section 8.2. Organization
The Company is duly organized and validly existing under the
laws of Finland, and has the legal capacity and corporate authority to own its
property and carry on its business as now conducted and is not in breach of its
Articles of Association.
Section 8.3. Shareholding and Share Capital
The authorized, issued and outstanding share capital of the
Company is Euro 2.522.818,90 divided into 15.000 ordinary shares with ownership
as stated in Article 2 of the Share Purchase Agreement and there exists no
option, right of conversion or other issue of shares or securities which could
increase or reduce the number of the shares.
The issued and outstanding shares of the Company are fully
paid-up and all the shares of the Company are free and clear of all claims,
liens, encumbrances and security interests whatsoever.
Section 8.4. Books and Records
The Articles of Association and Trade Register information of
the Company attached hereto as Appendix 2 are currently in force and will not be
amended. All necessary meetings and other corporate actions of or by the
Company, its shareholders and directors have been legally and properly held or
taken, and all resolutions passed by the meetings of shareholders and directors
have been duly recorded in the Company's minutes.
The share and shareholder registers of the Company are
accurate, up-to-date, true and complete and all transfer and other taxes levied
on or in relation to transfers of shares of the Company have been duly paid.
Section 8.5. Shareholder Contributions
The Company has no debt or obligation to make payments of any
kind to Seller except such as described in the Disclosure Letter.
Section 8.6. Financial Statements
The Financial Statements of the Company, attached as Appendix
3 hereto, fairly reflect the result of operation, the financial condition, the
assets and liabilities of the Company as at the relevant date and have been
prepared in accordance with laws and generally accepted accounting principles in
Finland ("hyva kirjanpitotapa") consistently applied.
Section 8.7. Absence of certain changes
Since January 1st 2000 until the Closing Date,
a) there has been no change in the share capital of the
Company;
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b) there has been no declaration or payment of dividend,
group contribution (other than in the amount of MFIM 10)
or any other distribution by the Company as of January
1st" 2000;
c) the business and affairs of the Company have been
conducted in accordance with good and sound business
practice and there is no material adverse deviation by
the Company from its ordinary course of business;
d) the Company has not made any change in any method of
accounting practice or policy;
e) the Company has not incurred any additional long-term
debt, except in the ordinary course of business;
f) the Company has not made any major investments or
dispositions of any significant assets other than in the
ordinary course of business or as provided for in the
budget for the year 2000;
g) there has been no destruction or loss of or damage to
any property of the Company, which would result in a
Material Adverse Effect.
h) there has been no action, contract or transactions by
the Company that have had a Material Adverse Effect.
i) there has been no increase in the capital amount of the
Loan.
From and after the date of execution of this Agreement and
through the Closing the Seller will cause the Company to conduct and operate its
business diligently and in the ordinary course of business.
Section 8.8. Indebtedness
True copies of, or an accurate description of material loan,
credit and overdraft facility agreements are attached as Appendix 4.
Section 8.9. Accounts Receivable
All accounts receivable shown in the Financial Statements are
good and collectible in the ordinary course within one hundred twenty (120) days
from the date when they fall due at the recorded amounts. The Buyer shall make
all reasonable efforts to collect the accounts receivable, however, in the event
that any such receivables remain outstanding for more than one hundred (120)
days from its due date, the Seller shall at the Buyer's request pay to the Buyer
such receivable, upon which the Buyer shall assign the receivable(s) concerned
to the Seller.
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Section 8.10. Title to Properties
The Company has good and marketable title to its properties
and assets reflected as being owned by it in the Financial Statements plus any
assets acquired since December 31st 1999.
Section 8.11. Intangible Rights
Trademarks, trade names, patents and registered copyrights,
patent applications and licenses owned or used by the Company are specified in
Appendix 5 ("Intangible Rights"). Except as disclosed in Appendix 5, each
Intangible Right is owned free and clear of all pledges, encumbrances or rights
of third parties. To the knowledge of the Seller, none of the Intangible Rights
infringe any intellectual property rights of any third party and no claim has
been made against the Company of any such infringement.
The Company is entitled to have benefit Metso Corporation's
licenses to use all IT systems being used by it until the Closing. The Parties
shall separately agree whether and how to transfer the said licenses into the
name of the Company. The Seller shall in any event carry out such licenses for
the Company for the period not more than three (3) months after the Closing, if
necessary.
Section 8.12. Fixed Movable Assets
To the knowledge of the Seller, all plant, machinery, vehicles
and equipment owned or used by the Company are in adequate repair, condition and
working order, taking into account their age and wear and tear have been
regularly and properly maintained.
Section 8.13. Premises, Land and Building
All premises, land and building owned, leased, used or
occupied by the Company are specified in Appendix 6 attached hereto and includes
all lease, rent, service and other agreements related to such premises, land and
building.
To the knowledge of the Seller, there is no material physical
defect in any part of the properties or any structure thereon and all structures
thereon are in good and substantial repair and condition and fit for the purpose
for which they are currently used having regard to their age and normal wear and
tear.
Section 8.14. Tax Obligations
The Financial Statements contain adequate reserves for all
unpaid income property and value-added taxes, social security contributions and
governmental charges (collectively the "Taxes") for the Company for the
financial year ended December 31, 1999.
The Company has timely and accurately filed all required
returns and reports covering the Taxes and paid all Taxes fallen due.
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There is no dispute with any tax authority in relation to the
affairs of the Company and to the knowledge of the Seller there are no facts
that may give rise to any dispute.
Section 8.15. Litigation and Claims
There are no civil, criminal or administrative actions,
litigation, arbitration or alternative dispute resolution proceedings or
governmental investigations pending, or to the knowledge of the Seller,
threatened against the Company, nor are there any outstanding or to the
knowledge of the Seller, threatened orders, judgements, awards or decrees of any
governmental body, court or arbitration tribunal.
Section 8.16. No Violation of Material Agreements
This Agreement, nor the transactions contemplated herein, (i)
are not in violation of any Material Agreement, (ii) do not constitute a breach
of or an event of default under such Material Agreement, or (iii) will not
modify in any way the rights and obligations of any of the parties to such
Material Agreements, in each case where the above would result in a Material
Adverse Effect.
Section 8.17. Environmental Matters
The Company has not received notice of any outstanding
prosecution, investigation, inquiry, action or proceeding against it for breach
of any applicable environmental laws, statutes, directives, regulations
("Environmental Laws"), which notice is still outstanding, and the Company has
not at any time in the last five years been party to any such prosecution,
investigation, inquiry, action or proceeding.
The Company has filed all reports, returns and filings
required to be filed under any Environmental Law and has obtained all necessary
permits and licenses under Environmental Laws.
The Company has not been notified of any liability with
respect to, or obligation to clean up or remove, previously released substances,
which may cause a harmful effect on the environment.
Section 8.18. Compliance with Law
The Seller has conducted and conducts its business in all
respects in accordance with the laws of Finland.
The Company has all permits, governmental licenses,
authorizations, registrations and approvals (collectively "the Permits")
necessary for the conduct of its business as are required by the laws of any
Government having jurisdiction over the Company and the Company has not received
notice of any violation of any of the Permits and there are to the knowledge of
the Seller no circumstances that would jeopardize the renewal of any such
Permits.
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Section 8.19. Dividends
No dividend has been declared or paid by the Company as of
January 1st 2000.
Section 8.20. Employment Matters
The employees, their salaries, wages and fringe benefits paid
or granted to the employees of the Company at the date hereof are set forth in
Appendix 7 and there will be no increase, other than provided for in pertinent
collective bargaining agreements, in such salaries, wages or fringe benefits
from the date hereof until the Closing Date.
The Company has not signed, nor is it liable under any policy
of, any life or alike personal insurance in excess of compulsory insurances, nor
do any of the employees enjoy any other material benefits other than those as
stated in Appendix 7.
Section 8.21. Inter-Company Arrangements
Except as set forth in Appendix 8, there are no agreements,
guarantees, indemnity arrangements or other rights or obligations between the
Company on the one hand and the Seller, Metso Corporation or any of subsidiaries
on the other hand. As of Closing, all amounts owed by Seller, Metso Corporation
or any of its subsidiaries to the Company shall have been paid.
Section 8.22. True and Correct Information
Neither the Share Purchase Agreement nor Appendices thereto
contain any untrue statement of a material fact or omits to state any fact
material to an intending buyer.
Section 8.23. Survival of Representations and Warranties
The representations and warranties made by the Seller herein
shall survive the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby.
Section 8.24. No implied representations or warranties
The Seller makes no representation of warranty whatsoever,
express or implied, beyond those expressly given in this Agreement including but
not limited to any implied warranty or representation as to the fitness for
purpose or merchantability with respect to the Company or its assets.
The representations and warranties of the Seller shall be true
and correct on the Closing Date.
Section 8.25. Qualifications of the Warranties and
Representations
The Parties expressly agree and understand that all the
warranties and representations are qualified to the extent that Seller will not
be considered to be in breach of any such representation or warranty
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(a) if disclosed in the Disclosure Letter; or
(b) if the fact or circumstance amounting to a
misrepresentation or breach of warranty has become known
to the Buyer in course of the due diligence inspection
and investigation of the Company; or
(c) unless the liability due to the misrepresentation or
breach of warranty has not been taken into account and
adequately covered by a provision or reservation made in
the Financial Statements specific to the type of
liability in question, it being agreed and understood by
the Parties that any liability of the Seller shall not
materialize until the aggregate value of the specific
provisions or reservations made in the Financial
Statements be exceeded and exhausted.
ARTICLE IX.
INDEMNITY
Section 9.1. Should the Seller be in breach of any of the
warranties or representations given in Article 8 hereof or other obligations of
this Agreement, the Seller undertakes to indemnify, hold harmless and defend the
Buyer from and against the cost, expense, loss or damage including reasonable
attorneys fees (except for any indirect, incidental or consequential damage or
loss) caused to the Buyer directly out of such breach ("Loss") provided that
(i) in any instance in which a third party makes a claim with
respect to which the Buyer desires to make and to preserve the
right to make any claim hereunder, the Buyer shall notify the
Seller in writing within a reasonable period of time of having
become aware of the claim and allow the Seller to participate
in defending such claim. The Buyer shall keep the Seller
informed as to any development of any such claim or related
litigation.
(ii) the amount for which the Buyer is entitled to be
indemnified hereunder shall be the full amount of the Loss
suffered by the Buyer, as a result of the breach of Seller's
representations and warranties under this Agreement.
Should such Loss be (a) deductible in taxation, the amount of
indemnification shall be the net amount after the deduction at
the applicable tax rate, irrespectively of whether the tax
deduction was actually used or (b) recoverable from a thirty
party under indemnity, insurance policy or otherwise such
recovery shall be first deducted from the Loss. The Seller and
the Buyer undertake to collaborate and cooperate in all
respects in an attempt to first recover claim from a third
party under indemnity, insurance policy or otherwise. Upon
failure to initiate recovery of claim from third party, the
Buyer shall be responsible for payment of claim. Upon failure
to recover claim from third party, the Seller shall be
responsible for payment of claim.
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(iii) the Seller shall compensate any Loss for which the Buyer
is entitled to be indemnified hereunder in cash to the Buyer
and the Buyer shall not have the right to rescind this
Agreement.
(iv) in the event of a claim by the Buyer for indemnification
by the Seller hereunder, in respect of a matter which in
Sellers' reasonable opinion is capable of cure, the Seller
shall have the right, exercisable upon thirty (30) days
written notice to Buyer, to attempt to cure the breach of the
representation or warranty in question for a period of 120
days following the date of notice by Buyer to the Seller
claiming indemnification with respect thereto.
(v) notwithstanding any of the foregoing, the Buyer shall not
be entitled to indemnity unless an individual Loss exceeds FIM
200.000 and the aggregate total amount of the Loss amounts to
at least FIM 1.000.000. In case the latter amount is exceeded,
the Buyer shall be indemnified for the total amount of the
Loss exceeding FIM 1.000.000. The aggregate liability of the
Seller under this Agreement shall under no circumstances
exceed 50% of the Purchase Price.
(vi) upon any payment by the Seller pursuant to the provisions
of this Article, it shall be subrogated to all rights to
reimbursement or indemnification against third parties
relating to the amount so paid. The Parties agree that they
will take all such steps as may be necessary or appropriate to
effect such subrogation.
(vii) any claims under this Agreement shall be filed by the
Buyer against the Seller within two (2) years from Closing
Date in order to be valid and enforceable, save for claims
with respect to Taxes which need to be filed on December 31st
2006.
ARTICLE X.
COMPETITION AND SECRECY AGREEMENT
Section 10.1. Non-Competition Commitment
The Seller hereby undertakes for a period of five (5) years
from the Closing Date, without the written consent of the Buyer, not to engage
in the production or sale of any products manufactured and/or sold by the
Company on the Closing Date.
Seller undertakes to cause other companies from time to time
belonging to the Metso Group to abide by the terms of this non-competition
commitment.
Section 10.2. Secrecy Commitment
The Seller hereby undertakes for a period of five (5) years
from the Closing Date, without written consent of the Buyer, to divulge or use,
whether directly or indirectly, for its own benefit or for the benefit of any
person, corporation or business entity other than the Buyer or the Company, any
information or knowledge concerning the operations of the Company, not in the
public domain or generally known.
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ARTICLE XI.
MISCELLANEOUS
Section 11.1. Release from Liability by the Buyer
The Buyer shall, as soon as possible but, however, within
ninety (90) days from the Closing, cause the Seller to be released from
guarantees and liabilities the Seller is subject to or undertaken on behalf of
the Company towards banks, finance institutions and pension institutions.
Section 11.2. Release from Liability of the Director of the
Company
The Buyer undertakes in the Annual General Meeting of
Shareholders of the Company dealing with i.a the adoption of the Company's
accounts for the financial year 2000 to grant discharge to and release of
liability to the members of the Board of Directors for the period of operation
of the Company up to the Closing Date provided that the auditors of the Company
do not object to granting such discharge and release.
Section 11.3. Dividends
Any right of dividend pertaining to any of the Shares shall
belong to the Party owner thereof at the point of time of declaration of any
dividend by the Company. No dividend has been declared in the Annual General
Meeting of Shareholders' Meeting for the financial year 1999 held on February
15, 2000.
Section 11.4. Change of Corporate Name
The Buyer undertakes to change the corporate name of the
Company within a period of twelve (12) months from the Closing Date at the
latest so as to abolish the word "Valmet" thereof.
The Seller grants the Buyer the right to use phrase "Valmet
Hydraulics" in the marketing of the products of the Company within such twelve
(12) month period from the Closing Date whereafter such right shall cease
without further notice. For the sake of clarity, there is no right granted to
use word "Valmet" other than together with the word "Hydraulics".
Section 11.5. Amendments
This Agreement may only be amended by an instrument in writing
signed by both of the parties hereto.
Section 11.6. Appendices
Each appendix attached to this Agreement constitutes an
integral part of this Agreement with the same force and effect as if the content
thereof appeared in the body of this Agreement.
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Section 11.7. Transfer Tax
The transfer tax levied on the purchase of the Shares in
Finland shall be borne by the Buyer.
Section 11.8. Notices
All notices, requests, demands or other communication to or
upon the respective parties hereto shall be deemed to have been duly given or
made when delivered personally, by mail, telefax, telegram or cable to the party
in question as follows:
a) If to the Seller: Metso Corporation
Fabianinkatu 9 A
▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇ Helsinki
telefax: ▇▇▇-▇▇-▇▇▇ 3125
attention: Hannu Korpisaari
b) If to the Buyer: ▇▇▇▇▇▇▇▇ International, Plc
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
telefax: (▇▇▇) ▇▇▇-▇▇▇▇
attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
or at such other address as the respective party hereto may hereafter specify in
writing to the other party.
Section 11.9. Non-disclosure
The parties shall maintain confidentiality and shall not
publicly disclose the subject matter, terms and contents of this Agreement
except pursuant to mutually agreeable press releases or to the extent required
by law or applicable regulations.
Section 11.10. Governing Law; Jurisdiction
This Agreement shall be governed by and construed in
accordance with the laws of Finland.
Section 11.11. Settlement in Good Faith
Any claim, dispute or controversy arising out of or in
connection with or relating to the interpretation or enforcement of this
Agreement shall be settled, insofar as possible, by mutual consultation and
consent of the parties, but should this not be found possible, then such
disputes shall be referred to arbitration in accordance with Article 11.10 of
this Agreement.
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Section 11.12. Arbitration of this Agreement
Section 11.13. All disputes arising out of or in connection
with the present Agreement or agreements, contracts or understandings relating
to it shall be finally settled under the Rules of Arbitration of the Central
Chamber of Commerce, Helsinki by one or more arbitrators appointed in accordance
with the said Rules. The place of the arbitration shall be Helsinki, Finland and
the proceedings shall be conducted in the English language.
Section 11.14. No Assignment
Any purported assignment of this Agreement or assignment or
delegation of all or any of the rights or obligations hereunder by either party
without the written consent of the other party shall be void. However, the Buyer
shall be entitled to assign this Agreement to any company belonging to the
▇▇▇▇▇▇▇ International, Plc group of companies. Such assignment shall not release
the Buyer of its obligations under this Agreement but the Buyer shall remain
liable to the Seller as if such assignment had not taken place.
Section 11.15. Binding Effect
This Agreement and all of the provisions thereof shall be
binding upon and inure to the benefit of the parties thereto and their
respective executors, administrators, successors and permitted assigns.
Section 11.16. Headings
The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement. This Agreement
shall become effective when signed by both of the parties hereto.
Section 11.17. Entire Agreement
This Agreement, the Appendices thereto and the documents to be
delivered thereunder and/or executed and delivered contemporaneously therewith
and/or at the Closing constitute the entire understanding and agreement between
the parties thereto concerning the subject matter thereof.
Section 11.18. Cost and Fees
The Seller and the Buyer shall each bear its own fees and
expenses incurred in connection with the negotiations, preparations and
execution of this Agreement and the transactions contemplated hereby.
This Agreement has been executed in two (2) identical
counterparts, one for the Seller and one for the Buyer.
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IN WITNESS WHEREOF, both of the parties hereto have executed
this Agreement or caused this Agreement to be executed on its behalf by its duly
authorized officers or representatives, all as of the day and year first above
written.
SELLER: BUYER:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇-Mattlia /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------- ---------------------------
SANTASALO GEARS OY ▇▇▇▇▇▇▇ INTERNATIONAL, PLC
18
List of Appendices:
Appendix 1 - Disclosure Letter
Appendix 2 - Articles of Association and Trade Register Extract
Appendix 3 - Financial Statements
Appendix 4 - Indebtedness
Appendix 5 - Intangible Rights
Appendix 6 - Premises, Land and Buildings
Appendix 7 - Employees and their Salaries, Wages and Fringe Benefits
Appendix 8 - Inter-Company Arrangements
Appendix 9 - Material Agreements
Appendix 10 - Statutory Approvals
Appendix 11 - Net Debt - definition and the estimated amount as of February 29th
2000
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