EXHIBIT 2.1
MASTER AGREEMENT
PURCHASE OF ASSETS
AND
BUSINESS
BY AND BETWEEN
VALTRA OY AB
TRACFIN HOLDING OY
PARTEK CARGOTEC HOLDING NETHERLANDS B.V.
PARTEK HOLDING INC.
AND
AGCO CORPORATION
10 SEPTEMBER 2003
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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TABLE OF CONTENTS
1. DEFINITIONS.......................................................................................................8
2. SALE AND PURCHASE................................................................................................12
2.1 PURCHASE AND SALE OF THE TARGET ASSETS.....................................................................12
2.2 IMPLEMENTATION OF THE TRANSACTION..........................................................................12
2.3 AGREEMENTS INTEGRATED......................................................................................12
2.4 SELLERS' REPRESENTATIVE....................................................................................12
3. THE TARGET ASSETS AND LIABILITIES................................................................................13
3.1 TARGET ASSETS..............................................................................................13
3.2 STOCK-TAKING...............................................................................................14
3.3 EXCLUDED ASSETS............................................................................................14
3.4 TRANSFER OF TITLE AND POSSESSION...........................................................................14
3.5 LIABILITIES ASSUMED AND EXCLUDED LIABILITIES...............................................................15
3.6 TRANSFER OF RISK...........................................................................................15
4. PURCHASE PRICE...................................................................................................15
4.1 PURCHASE PRICE.............................................................................................15
4.2 PURCHASE PRICE ALLOCATION..................................................................................15
4.3 COMPLETION STATEMENT.......................................................................................16
4.4 VERIFICATION OF COMPLETION STATEMENT.......................................................................16
4.5 INDEPENDENT AUDITOR........................................................................................16
4.6 TRANSFER TAXES.............................................................................................17
4.7 VALUE ADDED TAX............................................................................................17
5. PAYMENT OF THE PURCHASE PRICE....................................................................................17
5.1 PURCHASE PRICE.............................................................................................17
5.2 ADJUSTMENT AMOUNT..........................................................................................17
5.3 NO SET OFF BY BUYER........................................................................................18
6. DUE DILIGENCE REVIEW.............................................................................................18
7. REPRESENTATIONS AND WARRANTIES OF THE SELLERS....................................................................18
7.1 QUALIFICATIONS.............................................................................................18
7.2 REPRESENTATIONS AND WARRANTIES.............................................................................19
7.2.1 Organisation.........................................................................................19
7.2.2 Title and Authority to Transfer the Target Assets....................................................19
7.2.3 Capitalisation.......................................................................................20
7.2.4 Title To and Condition of Assets.....................................................................20
7.2.5 Sufficient Assets....................................................................................20
7.2.6 Consolidated Accounts................................................................................20
7.2.7 Receivables..........................................................................................21
7.2.8 Taxes................................................................................................21
7.2.9 Litigation...........................................................................................22
7.2.10 Real Property........................................................................................22
7.2.11 Permits..............................................................................................22
7.2.12 Environmental Matters................................................................................22
7.2.13 Intellectual Property................................................................................23
7.2.14 Data Processing......................................................................................23
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7.2.15 Product Liability....................................................................................23
7.2.16 Insurance............................................................................................24
7.2.17 Material Contracts...................................................................................24
7.2.18 Agreements with Related Parties......................................................................24
7.2.19 Employee Matters.....................................................................................25
7.2.20 Business Until Signing...............................................................................25
7.2.21 Compliance With Laws.................................................................................25
7.2.22 Information..........................................................................................26
7.3 NO OTHER REPRESENTATIONS AND WARRANTIES....................................................................26
8. COMPLETION.......................................................................................................26
8.1 COMPLETION DATE, LONG STOP DATE AND BREAK-UP FEE...........................................................26
8.2 CONDITIONS PRECEDENT.......................................................................................27
8.3 DELIVERIES AT COMPLETION...................................................................................28
8.4 BEST EFFORTS TO COMPLETE...................................................................................29
8.5 VALTRA TRAKTOR AB (SWEDEN).................................................................................30
9. INDEMNITY........................................................................................................31
9.1 LIABILITY OF THE SELLERS...................................................................................31
9.2 LIMITATIONS................................................................................................31
9.3 CERTAIN INDEMNIFICATIONS...................................................................................33
9.4 THIRD PARTY CLAIMS.........................................................................................34
9.5 RECOVERY...................................................................................................35
9.6 LITIGATION IN BRAZIL.......................................................................................35
10. REPRESENTATIONS AND WARRANTIES OF THE BUYER...................................................................35
10.1 ORGANISATION...............................................................................................35
10.2 POWER AND AUTHORITY OF BUYER...............................................................................35
10.3 SUFFICIENT FINANCING.......................................................................................35
10.4 NO BREACH BY SELLERS.......................................................................................36
11. COVENANTS.....................................................................................................36
11.1 BUSINESS UNTIL COMPLETION..................................................................................36
11.2 NON-COMPETITION, NON-SOLICITATION..........................................................................37
11.3 CONFIDENTIALITY............................................................................................38
11.4 UNENFORCEABILITY...........................................................................................38
11.5 CONTINUED SERVICES.........................................................................................38
11.6 CONTRACT ARRANGEMENTS......................................................................................39
12. CERTAIN UNDERTAKINGS..........................................................................................39
12.1 REVIEW OF THE TARGET BUSINESS..............................................................................39
12.2 TRANSACTION COSTS..........................................................................................40
12.3 CO-OPERATION UNDERTAKING...................................................................................40
12.4 COMPETITION FILING.........................................................................................40
12.5 BANK ACCOUNTS..............................................................................................40
12.6 NO CLAIMS AGAINST KEY EMPLOYEES............................................................................40
12.7 HISTORICAL FINANCIAL STATEMENTS............................................................................40
12.8 FURTHER ASSURANCES.........................................................................................41
13. EMPLOYEES.....................................................................................................41
13.1 TRANSFER OF EMPLOYEES......................................................................................41
13.2 ACCRUED LIABILITIES........................................................................................41
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14. ORDERS AND TENDERS............................................................................................41
15. FORCE MAJEURE.................................................................................................42
16. MISCELLANEOUS.................................................................................................42
16.1 NOTICES....................................................................................................42
16.2 APPENDICES INCORPORATED....................................................................................42
16.3 HEADINGS...................................................................................................43
16.4 ASSIGNMENT.................................................................................................43
16.5 PARENT COMPANY RESPONSIBILITY..............................................................................43
16.6 ENTIRE AGREEMENT...........................................................................................43
16.7 INTERPRETATION.............................................................................................43
16.8 NO WAIVER..................................................................................................44
16.9 GOVERNING LAW..............................................................................................44
16.10 SETTLEMENT IN GOOD FAITH................................................................................44
16.11 DISPUTE RESOLUTION......................................................................................44
16.12 AMENDMENTS..............................................................................................44
16.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES..............................................................44
16.14 PROVISIONS SEVERABLE....................................................................................45
16.15 PUBLICITY...............................................................................................45
16.16 COUNTERPARTS OF THE AGREEMENT...........................................................................45
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LIST OF APPENDICES
APPENDIX
1.1 Accounting principles
1.2 Accounts of the Business Sellers and the Subsidiaries dated 31
December 2002
1.13 Calculation of the Completion Accounts Value
1.19 Consolidated Accounts of the Business Sellers and the
Subsidiaries dated 31 December 2002
1.20 Consolidated Interim Accounts of the Business Sellers and the
Subsidiaries dated 30 June 2003
1.21 List of Subsidiaries directly held by the Sellers
1.47 List of the direct and indirect subsidiaries of the Sellers
1.50 List of the business conducted by the Business Sellers and the
Subsidiaries
2.2(i)-(iii) The Completion Agreements
(i) the Real Property Agreements
(ii) the Share Purchase Agreements
(iii) the Asset Purchase Agreements
3.1(a) List of real property owned by the Business Sellers
3.1(b) List of shares and participations owned by the Sellers
3.1(c)(ii) List of intellectual property rights owned by either
of the Business Sellers on the Completion Date.
3.2 Stock-taking procedure particulars
3.3 List of excluded assets
3.5 Excluded Liabilities
4.2 Purchase Price Allocation
7.2.1 Copies of the articles of association and the trade register
entries of the Sellers and the Subsidiaries
7.2.2 (b) Direct Subsidiaries, exceptions
7.2.2 (f) List of certain approvals
7.2.3 Capitalisation
7.2.6 Certain subsidiaries
7.2.9 Litigation
7.2.11 Permits
7.2.12 Exceptions from Environmental Permits
7.2.13 List of intellectual property rights owned by the Business
Sellers and the Subsidiaries
7.2.14 Data Processing, exceptions
7.2.15 List of product liability claims filed against the Business
Sellers
7.2.17 List of Material Contracts
7.2.18 List of agreements with Related Parties
7.2.19 (a) List of Key Employees
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7.2.19 (b) Key Employee bonus arrangements
7.2.19 (c) Deferred compensation arrangements etc.
7.2.19 (d) Notices or claims regarding non-compliance with any employment,
labour or related laws
9.3 (b) Valtra do Brazil Dispute
13.1 List of Employees of the Business Sellers transferring to the
Buyer
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MASTER AGREEMENT
This Master Agreement on Purchase of Assets and Business, has been
entered into on September 10, 2003, by and between
(i) Valtra Oy Ab, a company organised and existing under the laws
of Finland (the "SELLER");
(ii) Tracfin Holding Oy, a company organised and existing under the
laws of Finland (the "SUBSIDIARY BUSINESS SELLER");
(iii) Partek Cargotec Holding Netherlands B.V., a company organised
and existing under the laws of the Netherlands ("PARTEK
CARGOTEC");
(iv) Partek Holding Inc., a company organised and existing under
the laws of the State of Nevada (the "US SELLER");
(v) AGCO Corporation, a company organised and existing under the
laws of the State of Delaware, (the "BUYER"); and
(vi) KONE Corporation, a public listed company organised and
existing under the laws of Finland (the "GUARANTOR");
(each a "PARTY"; collectively the "PARTIES"; the Parties set out in
items (i) to (iv) the "SELLERS"; the Seller and the Subsidiary Business
Seller collectively the "BUSINESS SELLERS" the Parties set out in items
(iii) to (iv) the "SHARE SELLERS")
WITNESSETH:
WHEREAS, the Business Sellers and the Subsidiaries are engaged in,
inter alia, the production, exportation, importation, distribution,
sale and service of agricultural tractors and engines for agricultural
tractors world-wide.
WHEREAS, the Sellers own all of the assets of the Guarantor's group of
companies engaged in the production, exportation, importation,
distribution, sale and service of agricultural tractors and
agricultural tractor engines and forming the Target Assets and Target
Business.
WHEREAS, the US Seller owns all of the issued and outstanding shares in
Valtra USA, Inc., a company organised and existing under the laws of
the State of Illinois (the "US SUBSIDIARY").
WHEREAS, the Seller, Partek Cargotec and the US Seller own directly or
indirectly all of the issued and outstanding shares in the Subsidiaries
(as defined below).
WHEREAS, the Guarantor is the ultimate parent company of the Sellers
and in that capacity shall, procure the due performance of all the
obligations of the Sellers under this Agreement.
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WHEREAS, the Buyer, desires to purchase and
acquire the Target Assets and the Target
Business, and the Sellers wish to sell such
Target Assets and Target Business to the Buyer
for the consideration and upon the terms and
subject to the conditions set out in this
Agreement.
NOW, THEREFORE, the following is agreed:
1. DEFINITIONS
In this Agreement, unless expressly otherwise
stated or provided, or unless the context
otherwise requires, the following terms shall
have the following meaning, the singular (where
appropriate) shall include the plural and vice
versa and references to Appendices and Sections
shall mean Appendices and Sections of this
Agreement.
1.1 "ACCOUNTING PRINCIPLES" shall mean the accounting principles set out in Appendix 1.1.
1.2 "ACCOUNTS" shall mean the audited or reviewed profit and loss statement and
balance sheet of each of the Business Sellers and the Subsidiaries for
the year ended 31 December 2002, including the notes thereto, as well as
the auditors' statutory reports related thereto, attached hereto as
Appendix 1.2.
1.3 "ADJUSTMENT AMOUNT" shall have the meaning set out in Section 4.1.
1.4 "THIS AGREEMENT" shall mean this Master Agreement on Purchase of Assets and Business and
the Appendices and Enclosures hereto.
1.5 "ASSET PURCHASE AGREEMENT" shall mean the agreement regarding the sale and purchase of the Business
Assets to be entered into between the Seller and Subsidiary Business
Seller respectively and the Buyer as set out in Section 2.2.
1.6 "BUSINESS ASSETS" shall have the meaning set out in Section 3.1 (c).
1.7 "BUSINESS SELLERS" shall have the meaning set out in the introductory paragraph.
1.8 "BUYER" shall have the meaning set out in the introductory paragraph.
1.9 "BUYER AFFILIATE" shall mean any other entity directly or indirectly controlling,
controlled by, or under direct or indirect control of the Buyer.
1.10 "BUYER'S AUDITORS" shall mean KPMG.
1.11 "BUYER'S KNOWLEDGE" shall mean the actual knowledge of Messrs. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ and the financial and legal advisors of the Buyer engaged in the
Transaction.
1.12 "COMPLETION" shall mean the completion of the transactions contemplated by this
Agreement as set out in Section 8.
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1.13 "COMPLETION ACCOUNTS VALUE" shall mean the amount comprising of (i) the sum of the fixed assets and
net working capital (save for cash etc. see Appendix) included in the
Target Assets plus (ii) agreed goodwill plus (iii) cash, cash
equivalents and short term investments less (iv) interest bearing
liabilities as per Completion Date. The calculation of the Completion
Accounts Value shall be made on the basis of the Completion Statement
and the values for assets and liabilities booked therein. The
calculation has been further defined and exemplified as set out in
Appendix 1.13.
1.14 "COMPLETION ACCOUNTS" shall mean the consolidated balance sheet and profit and loss statement of the
Business Sellers and the Subsidiaries as on the Completion Date, to be prepared in
accordance with the Accounting Principles consistently applied.
1.15 "COMPLETION DATE" shall have the meaning set out in Section 8.1.
1.16 "COMPLETION STATEMENT" shall mean the audited statement on the Target Assets and the Liabilities
Assumed to be prepared as on the Completion Date on the basis of the Completion
Accounts and in accordance with the Accounting Principles consistently applied.
1.17 "COMPLETION AGREEMENTS" Shall have the meaning set out in Section 2.2.
1.18 [INTENTIONALLY LEFT BLANK]
1.19 "CONSOLIDATED ACCOUNTS" shall mean the consolidated pro forma profit and loss statement and balance sheet
of the Business Sellers and the Subsidiaries for the year ended 31 December 2002,
including the notes thereto as well as the existing auditors' statutory reports
related thereto, attached hereto as Appendix 1.19.
1.20 "CONSOLIDATED INTERIM shall mean the unaudited consolidated profit and loss statement and
ACCOUNTS" balance sheet of the Business Sellers and the Subsidiaries for the six
month ended 30 June 2003 as set out in Appendix 1.20.
1.21 "DIRECT SUBSIDIARIES" Shall mean those of the Subsidiaries that are directly held by the
Sellers as set out in Appendix 1.21.
1.22 "DISCLOSURE LETTER" shall mean the letter to be given by the Sellers to the Buyer containing
exceptions from the representations and warranties of the Sellers.
1.23 "DISCLOSURE MATERIAL" shall mean all the material in the data room or otherwise provided by
the Sellers, the Guarantor or their representatives to the Buyer for the
Due Diligence Review (including the answers provided to the Buyer's
questions in relation thereto).
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1.24 "DUE DILIGENCE REVIEW" shall mean the environmental, technical,business, financial, tax and
legal due diligence reviews of the Target Assets and the Target Business
carried out by the Buyer and its representatives for the purpose of the
completion of the transactions contemplated by this Agreement.
1.25 "EMPLOYEES" shall have the meaning set out in Section 13.1.
1.26 "EXCLUDED LIABILITIES" shall have the meaning set out in Section 3.5.
1.27 "GUARANTOR" shall have the meaning set out in the introductory paragraph.
1.28 "KEY EMPLOYEES" shall have the meaning set out in Section 7.2.19.
1.29 "LIABILITIES ASSUMED" shall have the meaning set out in Section 3.5.
1.30 "LOSS" shall have the meaning set out in Section 9.
1.31 "MATERIAL ADVERSE EFFECT" or shall mean any material adverse change in or effect on the business,
"MATERIAL ADVERSE CHANGE" assets, results of operation,condition (financial or otherwise) of the
Target Assets and the Target Business taken as a whole,
excluding, however, any effect or change wholly or mainly
arising out of or attributable to general political, economic
or market conditions.
1.32 "MATERIAL CONTRACTS" shall have the meaning set out in Section 7.2.17.
1.33 "PARTEK CARGOTEC" shall have the meaning set out in the introductory paragraph.
1.34 "PARTY" shall have the meaning set out in the introductory paragraph.
1.35 "PURCHASE PRICE" shall mean the aggregate purchase price including goodwill payable by
the Buyer to the Sellers, for the sale and purchase of the Target Assets
and Target Business.
1.36 "REAL PROPERTY" shall have the meaning set out in Section 3.1.(a).
1.37 "REAL PROPERTY AGREEMENT" shall mean the agreement regarding the sale and purchase of the Real
Property to be entered into between the Seller and the Subsidiary
Business Seller as sellers, respectively, and the Buyer, as set out in
Section 2.2.
1.38 "SELLER" shall have the meaning set out in the introductory paragraph.
1.39 "SELLERS" shall mean the Parties set out in the introductory paragraph.
1.40 "SELLERS' AUDITORS" shall mean PricewaterhouseCoopers.
1.41 "SELLER INDEMNIFIED PARTY" shall have the meaning set out in Section 9.1.
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1.42 "SELLERS' KNOWLEDGE" shall mean the actual knowledge of Messrs. Klaus Cawen, ▇▇▇▇ Heinisto, ▇▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, Tuomas Wegelius and the financial and legal advisors of the Sellers
engaged in the Transaction.
1.43 "SHARES AND PARTICIPATIONS" shall have the meaning set out in Section 3.1.(b).
1.44 "SHARE PURCHASE AGREEMENT" shall mean the agreement regarding the sale and purchase of the Shares and Participations to
be entered into by and between the respective Share Sellers and the Buyer.
1.45 "SHARE SELLERS" shall mean the Parties set out in items (iii) to (iv) in the introductory paragraph.
1.46 "SPECIAL AUTHORITY shall have the meaning set out in Section 8.2.
APPROVALS"
1.47 "SUBSIDIARIES" shall mean the direct and indirect subsidiaries of the Sellers as set out in Appendix 1.47.
1.48 "SUBSIDIARY BUSINESS shall have the meaning set out in the introductory paragraph.
SELLER"
1.49 "TARGET ASSETS" shall have the meaning set out in Section 3.1.
1.50 "TARGET BUSINESS" shall mean the business conducted on the date hereof by the Business Sellers and the
Subsidiaries regarding, inter alia, the production, importation, distribution, sale, and
service of the agricultural tractors and engines, as further set out in Appendix 1.50.
1.51 "THIRD PARTY CLAIMS" shall have the meaning set out in Section 9.4.
1.52 "TRANSACTION" shall have the meaning set out in Section 2.2
1.53 "TRANSFER CONTRACTS" shall have the meaning set out in Section 11.6.
1.54 "US SELLER" shall have the meaning set out in the introductory paragraph.
1.55 "US SUBSIDIARY" shall have the meaning set out in the introductory paragraph.
1.56 "VALTRA DO BRAZIL DISPUTE" shall have the meaning set out in Section 9.3.
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2. SALE AND PURCHASE
2.1 PURCHASE AND SALE OF THE TARGET ASSETS
Upon the terms and subject to the conditions set out in this
Agreement, the Sellers hereby agree to sell and the Buyer
agrees to purchase the Target Assets effective on the
Completion Date.
2.2 IMPLEMENTATION OF THE TRANSACTION
This Agreement is made between the Sellers on the one hand
and the Buyer on the other hand. The Sellers are the direct
or indirect parent companies of the Subsidiaries. This
Agreement contains the terms and conditions for the transfer
of the Target Assets from the Sellers to the Buyer and the
arrangement of the Target Business where the Business Sellers
shall cease to engage in the Target Business upon Completion
Date and the Buyer shall commence the Target Business on the
Completion Date (the "TRANSACTION").
To complete the transfer of the Target Assets and the
implementation of the Transaction contemplated by this
Agreement, the Sellers and the Buyer, respectively, will at
the Completion enter into
(i) the Real Property Agreements;
(ii) the Share Purchase Agreements; and
(iii) the Asset Purchase Agreements;
(collectively the "COMPLETION AGREEMENTS").
The Completion Agreements shall, unless otherwise agreed in
writing between the Sellers and the Buyer, be entered into
substantially in the form attached hereto as Appendices 2.2
(i), 2.2 (ii) and 2.2 (iii), respectively.
2.3 AGREEMENTS INTEGRATED
The terms of this Agreement shall, mutatis mutandis, be
deemed to form an integral part of each of the Completion
Agreements once executed, unless otherwise expressly provided
in the relevant Completion Agreement. In case of a conflict
between the terms of this Agreement and the terms of any
Completion Agreement, this Agreement shall govern.
2.4 SELLERS' REPRESENTATIVE
In and for the purpose of the Completion Agreements, the
Sellers are represented by the Guarantor, who shall, jointly
and severally, together with the Sellers, be liable for the
due performance of all the obligations of the Sellers under
the Completion Agreements. In its capacity of the Sellers'
representative, the Guarantor shall be authorised to give,
send, receive or accept or otherwise act on behalf and in the
place of the Sellers in regard to any matter relating to the
Completion Agreements and the completion of the transactions
contemplated under this Agreement.
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3. THE TARGET ASSETS AND LIABILITIES
3.1 TARGET ASSETS
The assets to be transferred from the Business Sellers, and
the shares and participations to be transferred from the
Share Sellers to the Buyer as contemplated hereunder (the
"TARGET ASSETS") shall comprise the following assets and
property of the Sellers, relating to the Target Business:
(a) Real Property
All the land, buildings and constructions owned by the
Business Sellers as listed in Appendix 3.1 (a) (the "REAL
PROPERTY").
(b) Shares and Participations
All the shares and participations owned by the Sellers,
including without limitation all shares in the Direct
Subsidiaries, as listed in Appendix 3.1 (b) (the "SHARES AND
PARTICIPATIONS").
(c) Business Assets
The business assets (the "BUSINESS ASSETS") shall include the
following:
(i) Movable Fixed Assets
The movable fixed assets comprising all machinery,
equipment and furniture and all other movable fixed
assets relating to the Target Business owned by the
Business Sellers on the Completion Date.
(ii) Intellectual Property Rights
The intellectual property rights comprising of (i)
all inventions, whether patented or patentable or
not, (ii) rights to inventions made by employees,
(iii) all other technical know-how related to the
development and operations, (iv) all registered and
unregistered trademarks, trade names, copyrights and
design rights (including any copyright on data
processing software), and (v) all other intellectual
property rights, relating to the Target Business and
owned by either of the Business Sellers on the
Completion Date. The registered patents, patent
applications, trademarks, trade names and design
rights as of the date hereof are listed in Appendix
3.1 (c) (ii).
(iii) Stocks
The stocks comprising all of the Business Sellers'
stocks of tractors, engines, industrial equipments,
spare parts, components,
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materials and other stocks relating to the Target
Business on the Completion Date.
(iv) Financial Assets
The financial assets including, without limitation,
all of the Business Sellers' accounts receivable,
loans receivable, advance payments and accrued
receivables relating to the Target Business on the
Completion Date.
Any collateral, security or pledge given by third
parties in favour of the Business Sellers concerning
loan receivables and/or account receivables shall be
assigned and transferred to the Buyer, and the
Parties shall use their best efforts to complete
such assignment and transfer.
(v) Other Assets
Any and all other tangible assets relating to the
Target Business, held by the Business Sellers on the
Completion Date, not specifically referred to in
this Section 3 and whether or not expressly
mentioned in the Asset Purchase Agreement, this
Agreement or the Appendices hereto, save as
explicitly excluded in Section 3.3.
3.2 STOCK-TAKING
For the purpose of determination of the movable fixed assets
and the stocks included in the Business Assets, the Business
Sellers and the Buyer shall, in co-operation and together
with the Buyer's Auditors and the Sellers' Auditors,
undertake a stock-taking of certain parts of the stocks on
such date(s) preceding the Completion Date as mutually agreed
between the Parties, in respect of which a report shall be
prepared and signed by representatives of the Business
Sellers and the Buyer. This report shall contain information,
inter alia, about the possible obsolescence of the stocks, if
any. The agreed upon findings made at the stock-taking shall
be reflected in the Completion Statement to be prepared
pursuant to Section 4.3. The further particulars of the
procedure for the stock-taking are set out in Appendix 3.2.
3.3 EXCLUDED ASSETS
The assets and rights listed in Appendix 3.3 shall not be
transferred to the Buyer hereunder but shall remain the
property of the respective Sellers, as the case may be.
3.4 TRANSFER OF TITLE AND POSSESSION
Under each Completion Agreement and upon the Completion,
title to, possession of and risk of loss of the Target Assets
shall pass and transfer from the Sellers to the Buyer and the
Buyer will assume responsibility for the Liabilities Assumed
at 24.00 hours on the Completion Date.
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3.5 LIABILITIES ASSUMED AND EXCLUDED LIABILITIES
Save for the Excluded Liabilities, the Buyer shall assume
responsibility for all liabilities of the Business Sellers,
including without limitation the liabilities set out in
Section 13 relating to the Target Assets and the Target
Business as of and from the Completion Date (the "LIABILITIES
ASSUMED"). The Buyer shall hold the Sellers and the Guarantor
harmless for any and all claims related to the Liabilities
Assumed.
The liabilities relating to the Target Business of the
Guarantor, the Business Sellers or any other company
controlled by the Guarantor, which the Buyer shall not assume
liability for are set out in Appendix 3.5 (the "EXCLUDED
Liabilities"). The Excluded Liabilities shall be solely for
the account of the Sellers and shall be handled by and shall
be payable by the Sellers.
3.6 TRANSFER OF RISK
The risk for the Target Assets, the Target Business and
Liabilities Assumed shall pass from the Sellers to the Buyer
at 24.00 hours on the Completion Date.
4. PURCHASE PRICE
4.1 PURCHASE PRICE
The Purchase Price is EUR 600,000,000 and consists of the
aggregate amount of the following items:
(a) an amount representing the purchase price for the
Real Property;
(b) an amount representing the purchase price for the
Shares and Participations; and
(c) an amount representing the purchase price for the
Business Assets.
The Purchase Price shall be adjusted upwards on a
euro-for-euro basis to the extent the Completion Accounts
Value as per the Completion Date is more than EUR
600,000,000, or downwards on a euro-for-euro basis to the
extent the Completion Accounts Value as per the Completion
Date is less than EUR 600,000,000 (the difference, if any,
hereinafter the "ADJUSTMENT AMOUNT").
4.2 PURCHASE PRICE ALLOCATION
The Purchase Price shall be allocated to the various Target
Assets and the Target Business as shown in Appendix 4.2 and
in the various Appendices referred to in Section 3. Such an
allocation shall be as reflected in the relevant Completion
Agreements.
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The allocation of the Purchase Price is made by the Buyer and
the division of the aggregate Purchase Price does not
constitute any representation or statement of the Sellers as
to the separate values so allocated.
4.3 COMPLETION STATEMENT
The Sellers shall within thirty (30) days following the
Completion Date, prepare and deliver to the Buyer and the
Buyer's Auditors a proposed determination of the Completion
Statement and a proposed calculation of the Completion
Accounts Value and its internal allocation in respect of each
of the Completion Agreements.
For the preparation of the Completion Accounts and the
Completion Statement, the foreign currencies shall for
consolidation purposes be converted into euros by applying
applicable foreign exchange rates as on the date hereof.
The Buyer shall ensure that the Sellers are given access to
books and records and personnel to assist the Sellers and to
enable them and their representatives to prepare the
Completion Statement and the Completion Accounts.
4.4 VERIFICATION OF COMPLETION STATEMENT
The Buyer's Auditors shall verify together with the Sellers'
Auditors that the Completion Statement is prepared in
accordance with the principles set out in this Agreement, and
they shall for such purpose have access to all the relevant
records and book-keeping material of the Business Sellers and
the Subsidiaries to the extent needed for purposes of such
verification. The Buyer may dispute the Completion Statement
by notifying the Sellers in writing the amount(s) in dispute
and the basis for such dispute within thirty (30) days from
receipt of the Completion Statement.
4.5 INDEPENDENT AUDITOR
The Sellers and the Buyer shall in good faith endeavour to
resolve any dispute notified by the Buyer pursuant to Section
4.4 within thirty (30) days from the date of receipt by the
Sellers of the Buyer's written notice of dispute. If failing
to reach an agreement, each Party, by a request in writing to
the other Party may refer the matter to Ernst & Young (the
"INDEPENDENT AUDITOR") for the Independent Auditor to give a
determination of the items of the Completion Statement under
dispute and the calculation of the Adjustment Amount together
with a statement of reasons therefore. Such determination by
the Independent Auditor shall be given within thirty (30)
days from its appointment. In the event the sum at dispute is
less than EUR 10 million, the Parties shall be deemed to have
accepted and are bound by the Completion Statement and
Adjustment Amount as determined by the Independent Auditor
for all purposes set out in this Agreement.
17 (45)
4.6 TRANSFER TAXES
Transfer taxes and registration fees payable in respect of
the sale and purchase of the Real Property, shares in
Subsidiaries and the Shares and Participations shall be
payable by the Buyer.
4.7 VALUE ADDED TAX
The transfer of the Seller's businesses contemplated
hereunder constitutes a transfer of business for the purposes
of Article 62 of the Finnish Act on value added tax (30
December 1993/1501, as amended) and the Buyer hereby confirms
that it will use the said assets in its business activities
following Completion. Accordingly, no Finnish value added tax
is payable in Finland on the transfer of the said assets.
Any value added tax levied on the transfer of the businesses
of the Subsidiary Business Seller to the Buyer shall be paid
by the Buyer. The Buyer is responsible for applying any
refund, if any, of such value added tax.
5. PAYMENT OF THE PURCHASE PRICE
5.1 PURCHASE PRICE
The Purchase Price shall, subject to an adjustment pursuant
to the second paragraph of Section 4.1, as estimated by the
Sellers in accordance with the next following paragraph, be
paid by the Buyer to the Sellers on Completion in accordance
with the relevant Completion Agreements reflecting the
allocation of the Purchase Price pursuant to Section 4.2.
The Sellers shall in good faith at least five (5) business
days prior to the Completion Date determine on the basis of
the information available a best estimate of the Completion
Accounts Value and the Adjustment Amount and the Purchase
Price payable at the Completion Date shall be adjusted
accordingly.
5.2 ADJUSTMENT AMOUNT
In the event that the Completion Statement indicates that the
Completion Accounts Value is higher than the Completion
Accounts Value estimated by the Sellers pursuant to Section
4.1 and paid by the Buyer at Completion, the Buyer shall pay
the Sellers the difference between such estimate and such
Completion Accounts Value indicated by the Completion
Statement within two (2) days following the final
determination of the Completion Statement in accordance with
Sections 4.3, 4.4 and 4.5. In the event that the Completion
Statement indicates that the Completion Accounts Value is
lower than the Completion Accounts Value estimated by the
Sellers pursuant to Section 4.1 and paid by the Buyer at
Completion, the Sellers shall pay the Buyer the difference
between such estimate and such Completion Accounts Value
indicated by the Completion Statement within two (2) days
following the final determination of the Completion Statement
in accordance with Sections 4.3, 4.4 and 4.5.
18 (45)
The amount payable pursuant to the next preceding paragraph,
if any, shall carry interest from the Completion Date at a
rate of six (6) per cent per annum. The Adjustment Amount
shall, together with the accrued interest, be paid by the
Sellers or the Buyer, as applicable, within two (2) business
days from the final determination of the Adjustment Amount
pursuant to Section 4 in immediately available funds to a
bank account in accordance with the prior written instruction
by the receiving Party.
The late payment penalty interest rate applying to late
payment of the amount payable pursuant to the first paragraph
of this Section 5.2 and the interest accrued thereon shall
amount to twelve (12) per cent per annum.
5.3 NO SET OFF BY BUYER
The Buyer shall have no right to set off any claims or
receivables it may have against the Sellers or the Guarantor
against any part of the Purchase Price or other payments due
from the Buyer or the Target Business to the Sellers.
6. DUE DILIGENCE REVIEW
The Buyer has performed a Due Diligence Review of the Target
Assets and the Target Business, and the Buyer has for such
purpose been given access to certain facilities, books and
records of the Business Sellers and the Subsidiaries as
concerns the Target Business and to its personnel. The Due
Diligence Review has taken place July 10, 2003 - September 9,
2003. The Sellers hereby confirm that the Buyer, its
representatives and counsel (such as, inter alia, outside
legal counsel and auditors) were given access to such
information and records as requested by the Buyer for the
performance of the Due Diligence Review.
7. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
7.1 QUALIFICATIONS
Each of the Sellers' representations and warranties shall
always be qualified by the following exceptions:
(a) Any provision set out in this Agreement; and/or
(b) Any risk, circumstance or fact fairly disclosed in
the Disclosure Material; and/or
(c) Any risk, circumstance or fact the Buyer is aware
of, taking into account that the Buyer is engaged in
the relevant business.
Subject to Sections 7.1 and 7.3 hereof, the Sellers hereby
give the following representations and warranties set out in
Sections 7.2 as on the date hereof.
19 (45)
7.2 REPRESENTATIONS AND WARRANTIES
7.2.1 ORGANISATION
The Sellers and the Subsidiaries are companies duly organised
and validly existing under the laws of their respective
jurisdiction of incorporation and they have all requisite
corporate power and authority to own, lease and operate their
properties and to carry on their business as presently being
conducted.
True, complete and current copies of the articles of
association and trade register entries of the Sellers and the
Subsidiaries are set out in Appendix 7.2.1. There are no
changes pending to such articles of association or trade
register extracts.
All corporate documentation in respect of the Sellers and the
Subsidiaries, including, without limitation, share and
shareholders' registers, minutes of the board meetings and
shareholders' meetings, exists and is safely kept and is in
all material respects true and complete.
7.2.2 TITLE AND AUTHORITY TO TRANSFER THE TARGET ASSETS
(a) The Sellers (i) have full and unrestricted ownership
of the Target Assets and (ii) have full legal right,
power and authority to sell, convey, assign and
transfer all the Target Assets in accordance with
the terms of this Agreement and to fulfil all their
obligations under this Agreement.
(b) The Sellers have full and unrestricted ownership and
title to the shares in the Direct Subsidiaries
except as set out in Appendix 7.2.2 (b).
(c) The execution and delivery by the Sellers of this
Agreement and the Completion Agreements do not, and
the completion of the, Transaction will not result
in a violation or breach of, constitute a default
(or give rise to any right of termination,
cancellation, payment or acceleration) under, or
result in the creation of any lien or encumbrance on
any of the Target Assets under: (i) any provision of
the articles of association of any Seller or any
Subsidiary; (ii) subject to obtaining and making any
of the approvals, consents, notices and filings
required under Section 8.2 (a), any law or order
applicable to the Sellers, the Subsidiaries, the
Target Business or the Target Assets; (iii) any
Material Contracts.
(d) The Target Assets are freely transferable to the
Buyer and are free and not subject to any claims,
options, liens, charges or other encumbrances of any
kind.
(e) This Agreement has been, and the Completion
Agreements and all other documents to be delivered
by the Sellers to consummate the Transaction as
contemplated hereby will on the Completion Date be,
duly executed and delivered by each of the Sellers
that is a party thereto and constitutes, or will
constitute, the legal, valid and binding obligation
of each of the Sellers that is
20 (45)
a party thereto, enforceable in accordance with its
terms.
(f) Except as set forth in Appendix 7.2.2(f) or
elsewhere in this Agreement, no consent, approval or
authorization of, or declaration, filing or
registration with, any authority, or any other
person or entity, is required to be made or obtained
by the Sellers or the Subsidiaries in connection
with the execution, delivery and performance of this
Agreement or the Completion Agreements or such other
agreements, documents and instruments to be executed
and delivered by the Sellers to consummate the
transactions contemplated hereby or thereby.
7.2.3 CAPITALISATION
The share capital in each Subsidiary is as set out in
Appendix 7.2.3. The shares in the Subsidiaries have been duly
authorised, legally and validly issued, and they are fully
paid and registered in the relevant trade registers. Save for
as set out in Appendix 7.2.3, there are no outstanding
obligations, warrants, options, depository receipts,
subscriptions, pre-emptive rights, contracts or agreements to
which any of the Subsidiaries is bound, providing for the
issuance of any additional shares in any Subsidiary. There
are no plans, contracts or commitments providing for the
issuance or the granting of rights to acquire any share or
other equity of any Subsidiary.
7.2.4 TITLE TO AND CONDITION OF ASSETS
The Sellers and Subsidiaries, as applicable, have title to,
and are the lawful owners of all their assets, including the
Target Assets, free and clear of any liens, encumbrances,
pledges or claims, save for encumbrances and security
interest concerning Liabilities Assumed. All machines and
equipment related to the Target Business are in good
operating condition and repair, ordinary wear and tear
excepted, and are suitable for the purposes for which they
are presently being used.
7.2.5 SUFFICIENT ASSETS
The Target Assets are sufficient for the Buyer to conduct the
Target Business on a stand-alone basis as hereto conducted.
7.2.6 CONSOLIDATED ACCOUNTS
The Consolidated Accounts have been prepared in accordance
with the Accounting Principles, and they present in all
material respects a true and fair view of the consolidated
financial conditions and results of the operations of the
Target Business on 31 December 2002, as required by the
Accounting Principles.
The Accounts of the Subsidiaries listed in Appendix 7.2.6
have been prepared in accordance with the applicable
accounting principles and they represent in
21 (45)
all material respects a true and fair view of the financial
conditions and results of the operations of such Subsidiaries
on 31 December 2002, as required by the applicable accounting
principles.
The Consolidated Interim Accounts have been prepared in
accordance with the Accounting Principles, and they present
in all material respects a true and fair view of the
consolidated financial conditions and results of the
operations of the Business Sellers and the Subsidiaries for
the six months ended 30 June 2003, as required by the
Accounting Principles.
7.2.7 RECEIVABLES
Except for a general tolerance of five (5) per cent of the
aggregate value of the trade receivables of the Business
Sellers and the Subsidiaries, such trade receivables at
Completion are valid and enforceable and the amount of each
such receivable will be paid in full within 90 days outside
Brazil and within 180 days in Brazil after (i) the date it
became due and payable or (ii) the Completion Date, whichever
occurs later.
7.2.8 TAXES
(a) The Subsidiaries have timely filed or caused to be
timely filed with the appropriate tax authorities
all tax returns and tax reports required to be filed
with such tax authorities. All such tax returns are
complete and accurate in all material respects. The
Subsidiaries have paid to the appropriate tax
authorities in due time or accrued all taxes
required to be paid according to filed tax returns
or according to orders to pay issued by tax
authorities.
(b) All taxes required to have been paid by the
Subsidiaries have been paid when due. By the
Completion Date, no Subsidiary has been given or
granted any waiver or extension by any tax authority
of any period of limitation governing the time of
assessment or collection of any taxes.
(c) None of the Subsidiaries have been subject of an
audit or other examination of taxes by the tax
authorities of any nation, state or locality (and no
such audit is pending or contemplated) nor has any
of the Subsidiaries received or is any Subsidiary
expecting to receive any notices from any tax
authority relating to any issue which could affect
the current or future tax liability of any
Subsidiary.
(d) The Consolidated Accounts contain adequate
provisions for unpaid taxes as on 31 December 2002
and, thus, the Subsidiaries will not in aggregate be
liable for taxes exceeding the provisions contained
in the Consolidated Accounts for the financial years
ended on or before 31 December 2002.
22 (45)
7.2.9 LITIGATION
Save for as set out in Appendix 7.2.9, there are no pending
claims, law suits, actions or legal, administrative,
arbitration or other proceedings or governmental
investigations, including but not limited to liquidation,
winding-up, receivership and other proceedings pending or to
the Sellers' Knowledge threatened, against any of the
Subsidiaries or the Sellers with respect to the Target
Business or Target Assets and which could reasonably be
expected to have a Material Adverse Effect.
7.2.10 REAL PROPERTY
(a) The present use of the real property and buildings
used by any of the Sellers or the Subsidiaries in
the Target Business conforms in all material
respects to fire and safety regulations.
(b) All material leases pursuant to which a Subsidiary
is landlord or leaseholder of real property or
premises extending beyond the date hereof, are in
force in accordance with their respective terms and
there exists no material default by the Subsidiaries
or a landlord or leaseholder under any such lease.
7.2.11 PERMITS
All material licenses, permits and authorisations necessary
for the conduct of the Target Business as conducted on the
date hereof are in full force and effect and there are no
currently existing violations of any such licenses, permits
or authorisations which could reasonably be expected to have
a Material Adverse Effect. There is no pending or to the
Sellers' Knowledge threatened action or other proceeding
which seeks the revocation of any such existing license,
permit or authorisation which could reasonably be expected to
have a Material Adverse Effect.
The material permits, licenses, authorisation and approvals
necessary for the Target Business on the date hereof are set
out in Appendix 7.2.11.
7.2.12 ENVIRONMENTAL MATTERS
To the Sellers' Knowledge
(a) save for as set out in Appendix 7.2.12, the Business
Sellers and the Subsidiaries currently hold all the
material environmental licenses, permits and
authorisations of governmental authorities and
agencies necessary for their current operations of
the Target Business, except to the extent that the
lack of such permits, licenses and authorisations
could not reasonably be expected to have a Material
Adverse Effect; and
(b) save for as set out in Appendix 7.2.12, the Target
Business has complied and complies with all
currently relevant environmental laws, regulations
and ordinances and environmental licenses, permits
and authorisations; and
23 (45)
(c) none of the Business Sellers or Subsidiaries has
received written notice of any current violation of
any applicable environmental regulation binding upon
them, which has not been corrected and has a
Material Adverse Effect; and
(d) the environmental site assessment made by ▇▇▇▇▇▇
Associates at Valmetintie, Suolahti and at
Linnavuori, Nokia (reports issued 28 February 2003)
are true and complete and represent a correct
environmental assessment of the relevant facilities.
7.2.13 INTELLECTUAL PROPERTY
The relevant Business Seller or Subsidiary owns the title to
the intellectual property rights set out in Appendix 3.1.(c)
(ii) hereto and each item constituting part of the
intellectual property rights has been duly registered with,
filed in or issued by, as the case may be, the appropriate
authorities in the countries set out in Appendix 3.1.(c)
(ii). There are no pending or, to the Sellers' Knowledge
threatened proceedings or litigation or other adverse written
claims made affecting the said intellectual property rights.
Save for intellectual property rights included in Appendices
3.1.c (ii) AND 7.2.13, there are no intellectual property
rights that would be material for the conduct of the Target
Business.
No Business Seller or Subsidiary has entered into any
license, sublicense or other agreement with any third person
pursuant to which any such person is or will be authorized to
use any of the intellectual property set out in Appendix
3.1.c (ii) or has any outstanding claim or suit for, and has
no knowledge of, any continuing infringement by any other
person of any such intellectual property set out in Appendix
3.1.c (ii).
7.2.14 DATA PROCESSING
Except as set out in Appendix 7.2.14, the computer equipment
and the computer software programs used in the Target
Business are the unencumbered property of the relevant
Business Seller or Subsidiary or are properly used under a
license, or such services are purchased from reputable
data-processing enterprises. To the Sellers' Knowledge, the
computer equipment and computer software programs used in the
Target Business do not infringe upon the rights of any third
parties and are sufficient and not major upgrades, changes,
or purchase of or investment in additional computer equipment
or computer software programs are currently required for the
Buyer to conduct the Target Business on a stand-alone basis
as currently conducted, and no such upgrades, changes or
purchase of or investment in additional computer equipment or
computer software programs have been planned for except in
the ordinary course of business.
7.2.15 PRODUCT LIABILITY
The relevant Business Seller or Subsidiary has to the
Sellers' Knowledge not sold any products which at the time of
selling the product did not in all material respects comply
with the applicable product liability laws in force in
24 (45)
the relevant jurisdiction, which unless complied with could
reasonably be expected to result in a product liability claim
with a Material Adverse Effect. There are no pending or, to
the Sellers' Knowledge, threatened warranty claims against
the Target Business or the Subsidiaries in connection with
the sales of their products, which warranty claims exceed the
aggregate amount of the accruals and provisions made for such
purpose or are not covered by insurance. As used herein, the
phrase "warranty claims" means claims by third parties for
defects in products sold within the Target Business which the
customer claim do not meet the product warranty.
Except as set out in Appendix 7.2.15, no Business Seller or
Subsidiary has received any order from any governmental
entity to recall any of its products, or to inform its
customers of a defect or any danger caused by a defect in any
of its products to the Sellers' Knowledge. Appendix 7.2.15
contains a list of all product liability claims filed or to
the Sellers' Knowledge threatened against any Business Seller
or Subsidiary during the three (3) year period immediately
preceding the date of this Agreement.
7.2.16 INSURANCE
All insurance policies relating to the Target Business to
which any Business Seller or any of the Subsidiaries is party
are valid and in force and effect until 24.00 hours on the
Completion Date. Such policies, with respect to their amounts
and types of coverage, are in the Sellers' view appropriate
to insure against risks to which the Business Sellers and the
Subsidiaries are normally exposed in the Target Business.
7.2.17 MATERIAL CONTRACTS
All the contracts and agreements relating to the Target
Business listed in Appendix 7.2.17 (the "MATERIAL CONTRACTS")
have been entered into on an arm's-length basis. All orders
and tenders for delivery of the products binding on any
Business Seller or Subsidiary have been made in the ordinary
course of business. Save as contracts and agreements included
in Appendix 7.2.17, there are no contracts or agreements that
would be material for the conduct of the Target Business.
Save for as set out in Appendix 7.2.17, there is no breach or
default by the Business Sellers or the Subsidiaries with
respect to any terms of any Material Contract.
7.2.18 AGREEMENTS WITH RELATED PARTIES
Except as set out in Appendix 7.2.18, following the
Completion there are no agreements between (i) any of the
Sellers and (ii) any of the Subsidiaries, except for
agreements entered into in the ordinary course of business on
an arms length basis with normal commercial terms. There is
no guarantee, indemnity, letter of comfort or encumbrance or
other similar liability given or incurred by any Subsidiary
for the benefit of any of the Sellers.
25 (45)
7.2.19 EMPLOYEE MATTERS
Appendix 7.2.19(a) contains a true list of the names,
positions, salaries, and main benefits of all key employees
of the Target Business (the "KEY EMPLOYEES").
No Key Employee has given notice of termination of his or her
employment relationship with the Target Business.
Except as laid out in Appendix 7.2.19(b), there are no
agreements or arrangements for any bonus (including but not
limited to extra salary or fringe benefits) or similar
payment for the benefit of the Key Employees to be paid or
otherwise provided for by the Sellers or to be included in
the Liabilities Assumed upon or as a result of the
Completion.
Except for those required under mandatory law or applicable
collective agreements, there are no material deferred
compensation agreements, pension benefits, profit-sharing,
severance pay or retirement plans, agreements or arrangements
presently in force with respect to any employees of the
Seller or the Subsidiaries other than as set out in Appendix
7.2.19(c).
To the extent required by applicable law and the Accounting
Principles, the pension liabilities of the Subsidiaries on 31
December 2002 have either been paid for in conformity with
applicable pension schemes or other regulations or otherwise
accounted for in the Consolidated Accounts as required under
the Accounting Principles.
Save for as set out in Appendix 7.2.19(d), none the Sellers
or the Subsidiaries has received notice of any claim
remaining current of its non-compliance with any employment,
labour or related laws relating to the Target Business.
7.2.20 BUSINESS UNTIL SIGNING
Since 31 December 2002 there has not been
(a) any Material Adverse Effect;
(b) any material adverse effect in the relationship with
any material customers or suppliers of the Target
Business;
(c) any entering into any material new contracts outside
of the ordinary course of business; and
(d) any agreement or transaction for the sale or
acquisition of any significant assets by the
Business Sellers or the Subsidiaries, except in the
ordinary course of business on commercial terms or
conditions customarily used by the Seller or the
Subsidiaries.
7.2.21 COMPLIANCE WITH LAWS
Each of the Subsidiaries and, in connection with the Target
Business, each of the Sellers, has complied and is in
compliance with all applicable laws and
26 (45)
regulations in all material respects. Neither any of the
Business Sellers nor any of the Subsidiaries has received any
notice that any material violation of applicable laws or
regulations is being made or may be alleged, and no event,
fact or circumstance exists or has occurred which reasonably
could be expected to result in any such violation.
7.2.22 INFORMATION
The Sellers have not omitted to provide the Buyer with any
information with regard to the Target Assets or Target
Business that, to the Sellers' Knowledge, has or could
reasonably be expected to have significance for a reasonable
purchaser or the Target Business and the Target Assets.
7.3 NO OTHER REPRESENTATIONS AND WARRANTIES
The Sellers have not made, and the Buyer has not relied on
any other expressed or implied warranties or representations
regarding the Target Assets or Target Business than those
contained in Section 7. In particular, the Sellers make no
representation or warranty to the Buyer with respect to any
financial projection or forecast relating to the Target
Assets or the Target Business. With respect to any such
projection or forecast delivered by or on behalf of any of
the Sellers to the Buyer in the Information Memorandum
provided to the Buyer, the Buyer acknowledges that (a) there
are uncertainties inherent in attempting to make such
projections and forecasts, (b) it is familiar with such
uncertainties, (c) it is taking full responsibility for
making its own evaluation of the adequacy and accuracy of all
such projections and forecasts so furnished to it and (d) it
shall have no claim against any of the Sellers or the
Guarantor with respect thereto.
8. COMPLETION
8.1 COMPLETION DATE, LONG STOP DATE AND BREAK-UP FEE
The completion date shall be October 31, 2003 or, subject to
Sections 8.2 and 8.3, on the fifth (5th) business day in
Helsinki after all the conditions precedent for Completion as
set out in this Section 8 have been fulfilled or waived (the
"COMPLETION DATE") provided, however that the Completion Date
shall not be a date earlier than six weeks from the date
hereof.
Completion shall take place at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Helsinki, starting at 10.00 a.m. on the Completion
Date.
If the conditions precedent set out in Section 8.2 have not
been fulfilled or waived by the relevant Party prior to or on
first anniversary of the date hereof, this Agreement shall
terminate with immediate effect, unless otherwise agreed by
the Parties in writing prior to such date. Such termination
shall be without prejudice to any remedies available to the
Parties hereunder or under law for breach of contractual
obligation.
27 (45)
Should the Completion under this Agreement not take place
prior to or on the first anniversary of the date hereof due
to breach of the Buyer's obligations hereunder or failure to
receive the Special Authority Approvals, the Buyer shall
promptly pay to the Sellers EUR 20,000,000 as a final and
independent fee.
8.2 CONDITIONS PRECEDENT
The obligation of the Buyer to complete hereunder shall be
subject to the fulfilment, on or before the Completion Date,
of the following conditions (to the extent not waived by the
Buyer), all of which require documentation in form and
substance satisfactory to the Buyer and its counsel in their
reasonable judgement:
(a) Authority Approvals
The relevant authorisations, approvals, clearances and
consents from the EU, Finnish, Swedish and Danish competition
authorities required for the lawful and valid completion of
the transactions contemplated hereunder have been obtained
with conditions that do not frustrate the Transaction taken
as a whole and accepted in form and substance by the Sellers
(the "SPECIAL AUTHORITY APPROVALS").
If other authority approvals than the Special Authority
Approvals have been declined or are pending at the time of
Completion, the Buyer shall pay the Purchase Price and assume
the Liabilities Assumed and the Parties shall complete the
Transaction apart from transferring such assets or business
for which legal approval is not available. Such remaining
transfer shall either be completed once the remaining
approvals have been obtained or in case of being declined,
such assets or parts of business shall be disposed of by the
Sellers in accordance with instructions of the Buyer and at
the Buyer's cost and risk and to the benefit of the Buyer. In
any interim period the Sellers shall act as agents of the
Buyer and the Buyer shall hold the Sellers harmless for any
cost and liability of any nature relating to or arising from
the relevant assets or business. Any net proceeds of such
disposal shall be for the account of the Buyer.
(b) Corporate Action
All corporate action necessary for the lawful and valid
consummation of the transactions contemplated hereby shall
have been duly taken by the Sellers and shall be in full
force and effect.
(c) No Injunction
No court or other government body or public authority, (other
than a competition authority or similar government body or
public authority in a country that is not covered by the
Special Authority Approvals, which shall be addressed in the
manner specified in Section 8.2 (a)) shall have issued an
order which shall then be in effect restraining or
prohibiting the completion of the transactions contemplated
hereby.
28 (45)
8.3 DELIVERIES AT COMPLETION
At the Completion the following deliveries shall be made:
(a) Payment of Purchase Price
The Buyer shall pay to the Sellers the Purchase Price on the
Sellers' bank account(s).
(b) Board of Directors of Subsidiaries
The Sellers shall deliver letters of resignation duly
executed as of the Completion Date by the members of the
Board of Directors of the Subsidiaries representing the
Sellers, in each case acknowledging that the members do not
have any outstanding claims whether for compensation or for
loss of office, or otherwise.
(c) Sellers' company name
The Sellers shall deliver documentation of the appropriate
resolution to change the company name of Valtra Oy Ab so that
the company name is free for the Buyer to register and any
reference to Valtra is removed, and the registration
application shall be delivered to the Buyer for simultaneous
filing.
(d) Auditors of Subsidiaries
The Sellers shall deliver letters of resignation duly
executed as of the Completion Date by the auditors of the
Subsidiaries, in each case acknowledging that the auditors do
not have any outstanding claims whether for compensation or
for loss of office, or otherwise.
(e) Completion Agreements
The Parties shall execute the Completion Agreements.
(f) Share Certificates
The Sellers shall deliver duly assigned share certificates
for the shares in Subsidiaries and the Shares and
Participations, or confirmations that no share certificates
have been issued.
(g) Release of Loans, Guarantees and Undertakings in favour of
Guarantor's Group
Any and all loans, guarantees and undertakings given by any
of the Subsidiaries to or in favour of any of the Sellers
and/or any other company belonging to the Guarantor's group
of companies shall be repaid or released.
29 (45)
(h) Release of Target's Loans, Guarantees and Undertakings
Any and all loans, guarantees and undertakings given by any
company belonging to the Guarantor's group to or in favour of
any of the Subsidiaries shall be repaid or released by the
Buyer.
(i) Floating Charges
The relevant Business Sellers shall present a written consent
from the holders of any floating charges
("yrityskiinnitykset") that such holders release the assets
sold hereunder from the floating charges.
(j) Other
Any other document, condition, amount or matter herein called
for to be produced, delivered, released or fulfilled at
Completion shall be so produced, delivered, released and
fulfilled.
All steps taken in connection with the Completion 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, the Completion will be completed
only after all the steps mentioned above have been taken.
8.4 BEST EFFORTS TO COMPLETE
The Parties shall use their respective best efforts to cause
all necessary actions to be taken in order to have all the
conditions precedent for Completion to be fulfilled as
promptly as practicable and to have all deliveries made
timely and properly.
The Parties undertake to notify the other Parties in writing
immediately, if, after filing of the application, such Party
is notified by the authorities of any circumstances or
events, which will or may prevent the Special Authority
Approvals from being obtained. Any issues or concerns raised
by such authorities shall be handled by the Parties without
delay.
The Buyer, at its own cost and expense, undertakes to carry
out all acts necessary to ensure that the authorities covered
by the Special Authority Approvals clear the transactions
contemplated herein, including without limitation offering
structural (e.g. divestiture of companies and/or businesses)
and/or behavioural undertakings as may be required to remove
any concerns that such authorities may have in respect of the
concentration provided, however, that the Buyer shall not be
required by the authorities covered by the Special Authority
Approvals or the Sellers to enter into any undertaking to
dispose to a third party all or substantially all of (i) the
tractor manufacturing operations of the Target Business in
Finland as a result of the failure of the relevant Finnish
authority to approve the Buyer's acquisition of such
operations or (ii) outside Finland, any business unit now
owned or acquired or proposed to be acquired in connection
with the Transaction that had annual sales in excess of EUR
100 million during the year ended 31 December 2002.
30 (45)
If other consents, approvals or covenants in addition to the
Special Authority Approvals are required for the transfer of
the Target Assets, the Buyer shall in accordance with Section
8.2 (a) proceed with the Completion, but shall, pending the
receipt of such other consents, if any, refrain from taking
other actions prohibited by applicable competition laws.
The Sellers shall, at all times, be given the opportunity to
participate in all negotiations with the authorities
responsible for the Special Authority Approvals.
8.5 VALTRA TRAKTOR AB (SWEDEN)
The Sellers shall use their best efforts to obtain prior to
Completion acceptance by the other shareholders of Valtra
Traktor AB, representing together 60 per cent of the total
shares of Valtra Traktor AB, to the transfer of the Seller's
shares in Valtra Traktor AB to the Buyer. The Buyer accepts
in that event to replace the Seller as party to the Valtra
Traktor AB shareholders' agreement of 2001 upon Completion.
In the event that no acceptance to the transfer of the
Seller's shares in Valtra Traktor AB has been received prior
to Completion, then
(i) the Valtra Traktor AB shares of the Seller shall not
be included in the sale and transfer of Shares and
Participations under this Agreement (without impact
on the agreed way of calculating the Completion
Accounts Value and the aggregate Purchase Price),
(ii) the Buyer shall have an irrevocable call option to
purchase all Valtra Traktor AB shares owned by the
Seller from Completion Date onwards upon written
notice for a consideration of one (1) euro and
subject to the pre-emption and redemption rights
that may follow from the above said shareholders
agreement or the articles of association of Valtra
Traktor AB,
(iii) the Seller shall as owner of the Valtra Traktor AB
shares use its shareholders rights in a manner that
secures the interests of the Buyer as far as
possible in the same manner as if the shares would
have been transferred to the legal ownership of the
Buyer and shall follow the instructions of the Buyer
in respect of such use of shareholders' rights,
(iv) any economical benefit derived from the ownership by
the Seller after the Completion Date is to the
account of the Buyer and shall be credited net of
cost to the Buyer by the Seller promptly and in any
event no later than on the date of Buyer exercising
its call option,
(v) the Parties shall in good faith discuss and agree on
the best conduct of the Target Business in relation
to Sweden to ensure that the interests of the Buyer
are taken into account in the manner requested by
the Buyer, provided however that the Buyer shall not
be required to enter into any agreement or to take
any action that would be likely to cause liability,
breach of laws or detrimental to the business of the
Seller.
31 (45)
9. INDEMNITY
9.1 LIABILITY OF THE SELLERS
The Sellers shall, jointly and severally, hereby indemnify
and hold harmless the Buyer and its affiliates (and any
director, officer, employee or agent of the Buyer or any such
affiliate, whether acting in individual or fiduciary
capacity) (each a "SELLER INDEMNIFIED PARTY") from and
against any and all liabilities and obligations of or claims
made or asserted against (and any and all losses, damages,
costs and expenses resulting from such liabilities,
obligations and claims) (referred to herein as a "LOSS") any
Seller Indemnified Party or whatever nature which may be
suffered as a result or account of any breach of any
representation, warranty, obligation or covenant given by the
Sellers in this Agreement, provided, however, that this
indemnification shall be the sole and exclusive remedy of the
Seller Indemnified Party and the Purchase Price shall be
deemed to be reduced by the amount of any payment received by
the Buyer under this Section. The Sellers shall have no
liability for any indirect or consequential loss of profit or
damages for any breach of this Agreement. The Sellers'
liability shall also always be limited by the qualifications
set out in Sections 7.1, 7.3 and 9. For the avoidance of
doubt, it is agreed that the Subsidiaries shall be considered
a Seller Indemnified Party as from the Completion.
The determination of whether there has been any failure of
any representation or warranty to be true and correct shall
be made without regard to any "materiality" or any "Material
Adverse Effect" or "Material Adverse Change" condition,
exception, modification or qualification, and for purposes of
Section 9, each representation and warranty shall be read as
if all such conditions, exceptions, modifications or
qualifications were deleted from the representation or
warranty.
9.2 LIMITATIONS
Subject to Section 9.3 below, the Sellers' liability under
this Agreement is further limited as follows:
(a) Except as provided in Section 9.1, no remedy
whatsoever, including but not limited to any
adjustment, reduction, set-off, compensation for
losses or alike in connection with the transactions
contemplated in this Agreement, or any other remedy
whatsoever available under the Finnish Sale of Goods
Act (355/1987), including but not limited to the
right to rescind this Agreement, shall be available
to the Buyer.
(b) No claim may be made to the extent provisions,
reserves, or appropriations (whether as specific or
as general provisions, reserves or appropriations)
have been made in the Completion
32 (45)
Accounts, or the same is otherwise accounted for or
reflected in Completion Accounts.
(c) Except for the specific indemnifications made in
Sections 9.3 and 9.6, no indemnification shall be
made as compensation for a Loss unless said Loss,
together with other similar or directly related
losses, amounts to at least one hundred fifty
thousand euro (EUR 150,000). No indemnification
shall be made unless the aggregate amount of Losses,
which the Buyer may claim compensation for, exceeds
three million euro (EUR 3,000,000). If such Losses
amount to more than three million euro (EUR
3,000,000) in aggregate, the indemnification shall
be made for the amount exceeding such threshold
only.
(d) Except for the specific indemnifications made in
Sections 9.3 and 9.6, the Sellers' aggregate,
maximum liability for whatever reason other than
fraud or wilful misconduct, shall always be limited
to fifteen per cent (15 %) of the Purchase Price.
(e) If a Loss is a tax-deductible item, or relates to
untaxed provisions, reserves or appropriations, the
claim that the Buyer may make shall be reduced by an
amount equivalent to the Loss multiplied by the
applicable corporate tax rate.
(f) For the purposes of this Agreement, a liability,
which is contingent, shall not constitute a Loss,
unless and until such contingent liability becomes
an actual liability and is due and payable.
(g) No liability shall arise in respect of any breach of
the representations and warranties or otherwise:
(i) if and to the extent the Loss occurs as a
result of any legislation not in force on
the date hereof, or which takes effect
retroactively, or occurs as a result of any
increase in the rate of tax in force on the
date hereof, or a change in the accounting
principles, or practice of the relevant
fiscal authorities;
(ii) if and to the extent such a Loss had not
arisen but for an act, omission made or
transaction carried out by the Buyer, or
persons controlling or controlled by the
Buyer after Completion;
(iii) if and to the extent the breach has been
corrected or the Loss otherwise
compensated.
(h) No liability shall arise due to a breach of this
Agreement concerning any Loss, which is actually
recovered under an insurance policy in force on or
before the Completion Date.
33 (45)
(i) If the Buyer or any of the Subsidiaries has a right
to compensation relating to the Loss from third
parties, the claim that the Buyer may make shall be
reduced by the amount of such compensation, or, if
such compensation has been received after any of the
Sellers has compensated the Buyer, the amount of
such compensation shall be refunded to the relevant
Sellers, as applicable.
(j) A Seller Indemnified Party shall, within reasonable
time, notify the Seller of any such claim, setting
forth in reasonable detail the facts and
circumstances relating thereto, the basis for the
Seller Indemnified Party right to indemnification,
the amount of Loss for which indemnification is
being asserted, if known, not later than June 30,
2005, whereafter claims shall become time barred,
except for (i) claims based on 7.2.8 (Taxes) where
the claims shall become time barred thirty (30) days
after the statutory time bar applicable to such
taxes and (ii) claims based on 7.2.12 (Environmental
Matters) where claims shall become time barred five
(5) years from the Completion Date and (iii) claims
based on 7.2.2 (Title and Authority to Transfer the
Target Assets) where the indemnification will
survive for an indefinite period.
(k) The Buyer and its group shall take all reasonable
steps to mitigate in accordance with Finnish law
each Loss and none of the Sellers shall be liable
for any Loss to the extent the Buyer's group should
have mitigated such Loss under Finnish law.
9.3 CERTAIN INDEMNIFICATIONS
Subject to the survival period in Section 9.2(j) except in
the case of (b) below, the Sellers shall, jointly and
severally, indemnify and hold the Seller Indemnified Parties
harmless from and against the entirety of all Loss incurred
or suffered as a result or related to:
(a) any breach of the representation and warranty set
forth in Section 7.2.8 (d) (tax - section (d)),
(b) the claim Valtra do Brazil is subject to relating to
certain land which was owned by the said Brazilian
company ("VALTRA DO BRAZIL DISPUTE"), as further
specified in Appendix 9.3 (b),
(c) any Loss arising from any Excluded Liabilities.
The obligations of the Sellers hereunder shall be separate
from and in addition to (but without double counting) any
liability they might have under Section 9.1 and shall not be
subject to any deductible, minimum claim or cap on Losses or
any materiality condition, qualification or exception, or
affected by any disclosure on any appendix.
34 (45)
9.4 THIRD PARTY CLAIMS
If a Seller Indemnified Party becomes aware of any third
party claim, which could lead to a breach of the Sellers'
representations and warranties ("THIRD PARTY Claim"), the
Seller Indemnified Party shall cause that it or the relevant
Subsidiary will:
(a) as soon as reasonably practicable, but in no event
later than ninety (90) days after the date the
Seller Indemnified Party became aware of the
circumstance giving rise to a Third Party Claim,
give notice thereof to the Sellers; provided that
the failure to so notify shall not relieve the
Seller of it is obligations hereunder, except to the
extent that the Sellers are actually and materially
prejudiced thereby;
(b) not make any admission of liability, agreement or
compromise with any person, body or authority in
relation thereto, which would result in a liability
pursuant to Section 9 on the part of any of the
Sellers, without obtaining the prior consent of such
Seller;
(c) in any action use its reasonable efforts to resist,
defend, appeal and compromise such claim in the best
interest of any of the Sellers; provided, however,
that this paragraph (c) does not require the Seller
Indemnified Party to act against its own best
interest; and
(d) give the Sellers and their duly authorised
representatives, reasonable access within ordinary
working hours to the appropriate books and records
and personnel of the Seller Indemnified Party and to
any relevant premises, accounts, documents and
records within their respective power, to enable the
Sellers, or their duly authorised representatives,
to examine such claim, premises, accounts, documents
and records and to take copies or photocopies
thereof.
The Seller shall have, during thirty (30) days after receipt
of a Seller Indemnified Party's notice, the right to assume
the conduct and control of such negotiation, dispute or
litigation to the extent the Sellers acknowledge their
indemnity obligation and assume and hold the Seller
Indemnified Party harmless from and against the full amount
of any Loss resulting therefrom, provided, that the Sellers
shall permit the Seller Indemnified Party to participate in
such defence at its own cost through counsel of its own
choice. If the relevant Seller does not within such thirty
(30) days period undertake to handle such negotiation,
dispute or litigation, then the Seller Indemnified Party
shall have the right to handle such negotiation, dispute or
litigation, but shall not thereby waive any right to
indemnity therefore pursuant to this Agreement. In addition,
the Sellers shall not be entitled to assume the control of
such negotiation, dispute or litigation or settle any such
claims if (i) such Third Party Claim could give rise or the
settlement would give rise to Losses in excess of the amount
indemnified by the Sellers pursuant to Section 9.1 or (ii)
such Third Party Claim seeks or such settlement would result
in an injunction or
35 (45)
equitable relief against the Seller Indemnified Party or
could reasonably be expected to otherwise be materially
detrimental to the Seller Indemnified Party.
9.5 RECOVERY
If any of the Sellers has made a payment to the Buyer as
settlement of a claim and the Buyer has the right to recover
from any third party any amount payable as a result of facts
or circumstances forming the basis of such claim, then the
Buyer shall, upon request of the relevant Seller, either
assign that right to the relevant Seller or, if the relevant
Seller so directs, the Buyer shall at the direction and cost
of the relevant Seller pursue the said recovery and account
to the relevant Seller for any funds or property recovered.
9.6 LITIGATION IN BRAZIL
Valtra do Brazil Ltda is subject to the Valtra do Brazil
Dispute. The Sellers undertake to handle the Valtra do Brazil
Dispute at their discretion, risk, cost and benefit. The
Buyer undertakes to cause that the said company co-operates
in all reasonable respects, at the Sellers' expense, for the
pursuit of the said legal procedures and that any benefit
arising from the lawsuit in its entirety will be immediately
transferred to the Sellers. To the extent the Valtra do
Brazil Dispute is lost by Valtra do Brazil Ltda, the Sellers
will compensate Valtra do Brazil Ltda with any monies payable
by Valtra do Brazil Ltda to the counter party.
10. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby gives the following representations and
warranties to the Sellers.
10.1 ORGANISATION
The Buyer is duly organised, validly existing under the laws
of the jurisdiction of its incorporation and have full
corporate power and all necessary licenses, permits and
authorisations to carry on its businesses.
10.2 POWER AND AUTHORITY OF BUYER
The Buyer has full legal and corporate power to enter into
this Agreement and to complete the transactions contemplated
hereby. The execution of this Agreement, the completion of
the transactions contemplated hereby and the fulfilment of
the terms hereof, will not result in a breach of any
judgement, decree or order of any national or supranational
court, governmental or other body, any applicable law or
regulation, or the articles of association of the Buyer.
10.3 SUFFICIENT FINANCING
The Buyer has arranged for sufficient financing for payment
of the Purchase Price and the completion of the transactions
hereunder and such financing is not subject to any future
conditions beyond the control of the Buyer.
36 (45)
10.4 NO BREACH BY SELLERS
To the Buyer's Knowledge, there is no reason to believe, that
any of the Sellers is in breach of any of the representations
and warranties or any other provision of this Agreement.
11. COVENANTS
11.1 BUSINESS UNTIL COMPLETION
The Sellers shall cause that the Target Business is continued
in the ordinary course of business between the date hereof
and until Completion, and the Sellers shall consult with the
Buyer in the event of investments, divestments or other
actions with a significance level equal to Material Adverse
Effect, always to the extent permitted by applicable
competition laws and regulations.
Notwithstanding the immediately preceding sentence, prior to
the Completion Date, except as may be first approved in
writing by Buyer, the Sellers shall and shall cause the
Subsidiaries to refrain from the following:
(a) declare or pay any dividend or make any other
distribution of funds or assets to its shareholders,
or make any other change in the capital structure;
and
(b) increase the compensation payable (including, but
not limited to wages, bonuses or any other
remuneration) to become payable to any officer or
employee other than in the ordinary course of
business consistent with past practice;
(c) make any bonus, profit sharing, pension, retirement
or insurance payment, distribution or arrangement to
or with any officer or employee, except in the
ordinary course of business, except for payments
that follow from existing employments and agreements
etc.;
(d) enter into, materially amend or become subject to
any contract of a type described in Section 7.2.17
outside the ordinary course of business;
(e) incur, assume or modify any indebtedness, except
indebtedness incurred, assumed or modified in the
ordinary course of business consistent with past
practice;
(f) permit any of its properties or assets to be subject
to any lien or other encumbrance, except in the
ordinary course of business;
(g) sell, transfer, lease or otherwise dispose of any
assets or properties except for (A) sales or
transfers in the ordinary course of business
consistent with past practice and (B) leases entered
37 (45)
into in the ordinary course of business consistent
with past practice;
(h) acquire any business by merger, purchase of
substantial assets or equity interests, or by any
other manner, in a single transaction or a series of
related transactions, or enter into any agreement,
letter of intent or similar arrangement (whether or
not enforceable) with respect of the foregoing;
(i) make any capital expenditure or commitment therefore
in excess of one million euro (EUR 1,000,000)
individually or two million euro (EUR 2,000,000) in
the aggregate or otherwise acquire any assets or
properties (other than inventory in the ordinary
course of business consistent with past practice) or
enter into any agreement, letter of intent or
similar arrangement with respect to the foregoing;
(j) cancel or waive any rights of substantial value;
(k) make any change in any method of accounting or
auditing practice;
(l) settle and/or compromise any tax liability; prepared
any tax returns in a manner which is inconsistent
with the past practices with respect to the
treatment of items on such tax return; incur any
liability for taxes other than in the ordinary
course of business;
(m) pay, discharge, settle or satisfy claims,
liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise),
other than payments, discharges or satisfactions in
the ordinary course of business and consistent with
past practice of liabilities reflected or reserved
against in the Consolidated Interim Accounts; or
(n) enter into, amend or terminate any collective
bargaining, pension plan, agreement, fund, policy or
arrangement for the benefit of any employees other
than in the ordinary course of business consistent
with past practice.
11.2 NON-COMPETITION, NON-SOLICITATION
(a) The Business Sellers shall respectively discontinue
the Target Business as of the Completion. The Buyer
shall continue the Target Business as of the
Completion.
(b) From the date hereof and for a period of three (3)
years after the Completion Date, the Guarantor and
its controlled subsidiaries shall not engage in any
territory, directly or indirectly, in any business
which competes with the Target Business as conducted
on the date hereof.
38 (45)
Notwithstanding the aforesaid, the Guarantor and its
subsidiaries shall not be prevented from making
company or business acquisitions, provided that the
business competing with the Target Business forms a
minor part of the acquired target.
(c) Should the Buyer find out that the Guarantor or any
of its subsidiaries is in violation of the
non-compete covenants set out herein, the Guarantor
and its subsidiaries shall have the right to
correct, cease or otherwise remedy the breaching
activity within ninety (90) days from the date the
claim was made by the Buyer and, if such a remedy is
taken, the Buyer shall not be entitled to
indemnification.
(d) From and after the Completion Date, the Sellers, the
Guarantor and their affiliates shall not, and shall
cause their affiliates not to, for a period of two
(2) years after the Completion Date, solicit for
employment any Key Employee; provided, that this
paragraph shall not preclude the Sellers, the
Guarantor and their affiliate from soliciting for
employment or hiring (i) any such Key Employee who
responds to a general solicitation by or on behalf
of the Sellers, the Guarantor or their affiliates
through a public medium or general or mass mailing
that is not targeted at employees of the Target
Business or (ii) whose contract has been terminated
by the Buyer's group.
11.3 CONFIDENTIALITY
The Sellers hereby undertake at any time, whether before or
after the Completion Date, until 31 December 2008 not without
the written consent of the Buyer to divulge, whether directly
or indirectly, information or knowledge concerning the
operations of the Target Business, including but not limited
to its intellectual property, which information or knowledge
is not in the public domain or generally known or legally
acquired from a third party, except to the extent required by
mandatory laws. If the Seller is required to disclose
confidential information due to requirements in mandatory
laws, the Seller shall first consult with the Buyer as to the
contents and method of such disclosure and shall use all
reasonable efforts to minimize such disclosure and its
impact.
11.4 UNENFORCEABILITY
If any covenant set out in Sections 11.1 to 11.3 above is or
becomes illegal or unenforceable, such covenant shall take
effect to the maximum extent permitted, and the illegality or
unenforceability shall have no effect upon the other
provisions of this Agreement.
11.5 CONTINUED SERVICES
The Sellers shall continue upon request of the Buyer to
provide to the Target Business continued services covered by
the existing Service Agreement between the Seller and Partek
Oyj Abp on the conditions and for the consideration as
previously applied for a maximum period of 12 months. In
39 (45)
the event the services require special resources or capacity,
the Parties shall in connection herewith in good faith agree
on appropriate termination periods and other details that
observe the reasonable interests of respective Party. The
Buyer shall specify its desire to continue such transitional
services no later than five business days prior to
Completion.
11.6 CONTRACT ARRANGEMENTS
The Sellers and the Buyer shall use their best efforts so
that all contracts of either of the Business Sellers relating
to the Target Assets or the Target Business, including
without limitation the Material Contracts to which either of
the Business Sellers are party to, (the "TRANSFER CONTRACTS")
can be transferred to the Buyer on the Completion Date or as
soon as practically possible thereafter. The Business Sellers
undertake to do all reasonable acts and things in order to
validly assign and transfer the Transfer Contracts. The
Business Sellers and the Buyer shall together agree on the
practical matters relating to the transfer of the Transfer
Contracts so as to give the Buyer, as far as possible, the
full benefit of the Transfer Contracts as of the Completion
Date. In particular, the Business Sellers shall use their
respective best efforts so that a consent and confirmation is
obtained from the parties to the Transfer Contracts and that
such Transfer Contracts can transfer to the Buyer upon the
completion of the transactions contemplated hereunder. In
case a third party refuses to transfer a particular Transfer
Contract to the Buyer, the Parties shall agree on an
arrangement whereby the contract is performed by the Buyer on
its own behalf but in the name of the relevant Business
Seller at the cost and risk of the Buyer, or another
arrangement having a similar effect for a period not
exceeding six (6) months.
12. CERTAIN UNDERTAKINGS
12.1 REVIEW OF THE TARGET BUSINESS
To the extent permitted by relevant competition or antitrust
laws, the Buyer may, prior to the Completion Date, directly
or through its representatives, review the properties, books
and records or the Target Business, the Target Assets and the
Subsidiaries, and their financial and legal condition to the
extent it reasonably believes necessary or advisable to
familiarize itself with such properties and other matters.
Such review shall not, however, affect the warranties made by
the Sellers in this Agreement or the remedies of Buyer for
breaches of those Warranties. The Sellers shall cause the
Target Business and the Subsidiaries to permit Buyer and its
representatives to have, after the date of execution of this
Agreement, access to the premises and to the books and
records of the Target Business, the Target Assets and the
Subsidiaries and the Sellers shall cause the officers,
employees, counsel, accountants, consultants and other
representatives of the Target Business and the Subsidiaries
to furnish Buyer with such financial and operating data and
other information with respect to the business and properties
of the Target Business and the Subsidiaries as Buyer shall
from time to time reasonably request.
40 (45)
12.2 TRANSACTION COSTS
Each of the Sellers and the Buyer shall bear its own costs
and expenses relating to the preparation and completion of
the transactions contemplated in this Agreement.
12.3 CO-OPERATION UNDERTAKING
The Sellers agree to co-operate with the Buyer with a view to
ensuring a smooth and successful transfer of the Target
Assets to the Buyer and implementation of the Transaction and
shall towards this end give any reasonable assistance and
promote the interest of the Buyer towards the employees,
customers, suppliers, authorities and other third parties.
12.4 COMPETITION FILING
The Buyer shall be responsible for and shall bear all costs
related to the preparation and filing of all necessary
notices and for the obtaining in a timely manner of
authorisations required under any applicable competition laws
for the completion of the transactions contemplated
hereunder. The Buyer has prior to the signing hereof advised
the Sellers that the Buyer does not expect to encounter any
difficulties in obtaining any such authorisations and that,
in accordance with and subject to Section 8, any unexpected
difficulties or burdensome terms will be on the sole account
of the Buyer.
12.5 BANK ACCOUNTS
Following Completion the Business Sellers and the Buyer
hereby mutually undertake to promptly transfer to the other
Party any customer or other payments erroneously made to them
and to give reasonable access and assistance to the other
Party's auditors to verify the correctness of such transfers.
12.6 NO CLAIMS AGAINST KEY EMPLOYEES
Absent fraud or wilful misconduct the Buyer covenants that
neither it nor any company controlling it or controlled by it
shall present any claims against any of the Key Employees
relating to the Transaction.
12.7 HISTORICAL FINANCIAL STATEMENTS
At any time after the signing of this Agreement, the Sellers
shall permit the Buyer to commence preparing, at the Buyer's
expense, historical audited financial statements for the
Target Business and the Target Assets sufficient for the
Buyer to comply with the financial statement requirements
applicable to it under the securities laws of the United
States of America, as determined by the Buyer's independent
auditors. The Sellers shall ensure that the Buyer is given
reasonable access within ordinary working hours to the
appropriate books and records and personnel of the Sellers
ant the Target Business to assist the Buyer in the
preparation of such historical audited financial statements,
and will authorize the independent auditors of each of the
Business
41 (45)
Sellers to cooperate in the preparation of such financial
statements and to issue an auditor's report in respect of
such financial statements.
12.8 FURTHER ASSURANCES
If at any time prior to or after the Completion any further
action is necessary or desirable to carry out the purposes of
this Agreement, each of the parties hereto will take such
further action (including the execution and delivery of such
further instruments and documents) as any other party
reasonably may request, all at the sole cost and expense of
the requesting party (unless the requesting party is entitled
to indemnification therefore under Section 9).
13. EMPLOYEES
13.1 TRANSFER OF EMPLOYEES
The employees set out in Appendix 13.1 hereto and presently
employed by the Business Sellers in the Target Business (the
"EMPLOYEES") will, subject as provided below, transfer and
become employees of the Buyer as of the Completion Date
according to Chapter 1, Section 10 of the Finnish Act on
Employment Contracts (26.1.2001/55).
13.2 ACCRUED LIABILITIES
All accrued, unpaid liabilities, whether due for payment on
the Completion Date or not, of the Business Sellers relating
to the Employees up to and including the Completion Date,
whether contractual or statutory in nature and including any
amounts payable to the Employees pursuant to any arrangement,
agreement or understanding in existence between the Business
Sellers and the Employees as of the Completion Date as well
as all costs referred to in Section 13.2 (including holiday
pay and holiday return payment, holiday-related charges,
bonus payments, statutory social security and pension
contributions), shall be assumed by the Buyer. Such
liabilities shall be accounted for according to the
Accounting Principles and recorded in the Completion
Statement as part of the Liabilities Assumed or the Excluded
Liabilities, as the case may be.
14. ORDERS AND TENDERS
All orders for delivery of products received by the Business
Sellers relating to the Target Business, partly or wholly
unfulfilled as of the Completion Date ("UNFULFILLED ORDER")
shall be transferred to the Buyer.
The Buyer shall assume responsibility for all tenders
relating to the Target Business binding upon the Business
Sellers, respectively on the Completion Date or thereafter.
The Business Sellers, respectively, undertake to direct all
tender requests and orders relating to the Target Business
received by either of the Business Sellers after the
Completion Date to the Buyer.
42 (45)
15. FORCE MAJEURE
If, for reasons which are not foreseeable and which are
beyond the responsibility and control of the Party concerned,
it becomes impossible or unduly burdensome for a Party to
perform its obligations hereunder ("FORCE MAJEURE"), then the
Party concerned shall be excused for its non-performance
during the duration of the Force Majeure; provided, however,
that should the obligation which cannot be performed by a
Party by reason of the Force Majeure constitute a material
obligation considering the transactions contemplated
hereunder as a whole and should the non-performance continue
for a period exceeding ninety (90) days, then the other Party
shall have the right to terminate this Agreement and any
other agreement entered into in relation hereto forthwith.
16. MISCELLANEOUS
16.1 NOTICES
All notices, requests, demands or other communication to or
upon the respective Parties hereto including, without
limitation, the Completion Accounts, the Completion Statement
and any and all other financial documentation, shall be in
the English language and shall be deemed to have been duly
given or made when delivered by mail, facsimile letter telex,
telefax, telegram or cable to the party in question as
follows:
If to the Buyer:
Address: AGCO Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telefax + 770/813-6599
Attention: The General Counsel
If to any of the Sellers or the Guarantor:
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telefax ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Attention: The General Counsel
or at such other address as the respective Party hereto may
hereafter specify in writing to the other Party.
16.2 APPENDICES INCORPORATED
Each Appendix to which reference is made herein and which is
attached hereto shall be deemed to be incorporated in this
Agreement by such reference.
43 (45)
16.3 HEADINGS
The headings of this Agreement are for convenience of
reference only and shall not in any way limit or affect the
meaning or interpretation of the provisions of this
Agreement.
16.4 ASSIGNMENT
This Agreement and the rights and obligations specified
herein shall be binding upon and inure to the benefit of the
Parties and their respective executors, administrators,
successors and assigns. This Agreement and the rights and
obligations of the Parties hereunder, may not be assigned by
any of the Parties without the prior written consent of the
other Parties. provided, however, that Buyer may designate
one or more Buyer Affiliate(s) reasonably acceptable to the
Sellers as the purchaser(s) of the Target Assets, and shall
provide to the Sellers the name(s) of such designee(s) at
least five (5) days prior to the Completion Date, provided,
however, that if the Buyer designates any such Buyer
Affiliate, such Buyer Affiliate shall be deemed to be
included in the definition of the Buyer for purposes of this
Agreement; and provided, further that if any such Buyer
Affiliate is designated, the Buyer shall not be relieved of
any of its obligations under this Agreement. This provision
shall not, however, restrict the Buyer's right to dispose of
the Target Assets as it deems fit.
16.5 PARENT COMPANY RESPONSIBILITY
The Guarantor shall, jointly and severally with the Sellers,
guarantee and be liable for, in each case, as for its own
debt for all obligations and liabilities of the Sellers under
this Agreement and the due performance of the obligations of
the Sellers under this Agreement and the Completion
Agreements. and for the consummation by the Sellers of the
Transaction. The Guarantor shall be authorized to give,
deliver, receive and accept and otherwise act on behalf of
and in the place of the Sellers with regard to any matter
relating to the Transaction, including, without limitation,
any enforcement action in connection with any award
hereunder, and the Sellers hereby grant the Guarantor an
irrevocable power of attorney to represent the Sellers as
provided for in this Section 16.5.
16.6 ENTIRE AGREEMENT
This Agreement represents the entire understanding and
agreement between the Parties and supersedes all prior
negotiations and understandings relating to the subject
matter hereof.
16.7 INTERPRETATION
The fact that either Party has drafted this Agreement or part
thereof shall not affect the interpretation to the
disadvantage of the drafting Party.
44 (45)
16.8 NO WAIVER
Failure by any Party at any time or times to require
performance of any provisions of this Agreement shall in no
manner affect its right to enforce the same, and the waiver
by any Party of any breach of any provision of this Agreement
shall not be construed to be a waiver by such Party of any
succeeding breach of such provision or waiver by such Party
of any breach of any other provision hereof.
16.9 GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of Finland.
16.10 SETTLEMENT IN GOOD FAITH
In the event of any dispute concerning this Agreement or the
interpretation of the same, it is hereby agreed that the
Sellers and the Buyer shall attempt in good faith to settle
such disputes, but should this not succeed, then such
disputes shall be referred to arbitration in accordance with
Section 16.11 of this Agreement.
16.11 DISPUTE RESOLUTION
Any and all disputes, controversies or claims arising out of
or relating to this Agreement or the Completion Agreements or
any other agreements concluded or to be concluded under the
terms hereof whether appended hereto or not, or the breach,
termination or validity of any such agreement, shall be
finally settled by arbitration in accordance with the rules
of the Arbitration Board of the Central Chamber of Commerce
in Finland. The Parties expressly agree that all disputes may
be settled in single proceedings. The place of arbitration
shall be Helsinki, Finland, and the language to be used in
the arbitral proceedings shall be the English language.
The Parties recognise that they act on behalf of their
respective subsidiaries for purposes of this Agreement and
the transactions contemplated hereunder. As a result, the
Buyer and the Sellers agree to join as a party in any
proceedings involving any of their respective subsidiaries as
if the Buyer and/or the Guarantor, as the case may be, where
itself direct a party to the proceedings instead of its
subsidiary in question.
16.12 AMENDMENTS
Any amendment to this Agreement shall be in writing and shall
have no effect before signed by the duly authorised
representatives of the Parties.
16.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations, warranties, assurances and agreements of
a Party contained herein shall survive the Completion and
remain in full force and effect in
45 (45)
accordance with the respective terms and conditions of any
such representation, warranty, assurance or agreement.
16.14 PROVISIONS SEVERABLE
If any provision of this Agreement is held to be invalid or
unenforceable, partly or wholly, such determination shall not
invalidate any other provision of this Agreement, however,
the Parties shall attempt, through negotiations in good
faith, to replace any provision of this Agreement so held to
be invalid or unenforceable. The failure of the Parties to
reach agreement on a replacement provision shall neither
affect the validity of the remaining provisions of this
Agreement nor the validity of the valid or enforceable part
of any such provision held partly invalid or unenforceable,
which provision shall take effect to the maximum extent
permitted by law.
16.15 PUBLICITY
Save as required by law, governmental decree, stock exchange
rules or other official action, the details of this Agreement
shall remain secret for five (5) years. Any press releases or
information made public during press conferences in relation
hereto shall be subject to prior agreement between the
Parties.
16.16 COUNTERPARTS OF THE AGREEMENT
This Agreement has been executed in three (3) identical
counterparts, one (1) for the Seller, one for the Guarantor
and one (1) for the Buyer.
IN WITNESS WHEREOF, the Parties have duly executed this
Agreement as of the day and year first above written.
KONE Corporation
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on its own behalf and on behalf of the Sellers
AGCO Corporation
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