EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
by and among
EIMO OYJ,
SPARTAN ACQUISITION CORP.
and
TRIPLE S PLASTICS, INC.
dated as of
July 13, 2000
TABLE OF CONTENTS
ARTICLE I THE MERGER...................................................................... 1
Section 1.1 The Merger............................................................... 2
Section 1.2 Effective Time........................................................... 3
Section 1.3 Closing.................................................................. 3
Section 1.4 Directors and Officers of the Surviving Corporation...................... 3
Section 1.5 Subsequent Actions....................................................... 3
Section 1.6 Other Agreements......................................................... 4
ARTICLE II CONVERSION OF SECURITIES....................................................... 4
Section 2.1 Conversion of Capital Stock.............................................. 4
Section 2.2 Exchange of Certificates................................................. 6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................. 9
Section 3.1 Organization; Qualification; Charter Documents........................... 9
Section 3.2 Subsidiaries and Affiliates.............................................. 10
Section 3.3 Capitalization........................................................... 10
Section 3.4 Authorization; Validity of Agreement; Company Action..................... 11
Section 3.5 Board Approvals; Takeover Statutes....................................... 11
Section 3.6 Vote Required............................................................ 12
Section 3.7 Consents and Approvals; No Violations.................................... 12
Section 3.8 SEC Reports and Financial Statements..................................... 12
Section 3.9 No Undisclosed Liabilities............................................... 13
Section 3.10 Absence of Certain Changes............................................... 13
Section 3.11 Litigation............................................................... 14
Section 3.12 Employee Benefit Plans................................................... 14
Section 3.13 Tax Matters; Government Benefits......................................... 16
Section 3.14 Title to Properties; Encumbrances........................................ 17
Section 3.15 Environmental Laws....................................................... 18
Section 3.16 Intellectual Property.................................................... 18
Section 3.17 Compliance with Laws..................................................... 18
Section 3.18 Labor Difficulties....................................................... 19
Section 3.19 Information to be Supplied............................................... 19
Section 3.20 Opinion of Financial Advisor............................................. 19
Section 3.21 Brokers or Finders....................................................... 20
Section 3.22 Company Agreements....................................................... 20
Section 3.23 Interested Party Transactions............................................ 20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND
PURCHASER........................................................................ 20
Section 4.1 Organization; Qualification; Charter Documents........................... 20
Section 4.2 Subsidiaries and Affiliates.............................................. 21
Section 4.3 Capitalization........................................................... 21
Section 4.4 Authorization; Validity of Agreement; Necessary Action................... 22
Section 4.5 Board Approvals; Takeover Statutes....................................... 22
Section 4.6 Vote Required............................................................ 23
Section 4.7 Consents and Approvals; No Violations.................................... 23
Section 4.8 Parent Public Reports and Financial Statements........................... 23
Section 4.9 No Undisclosed Liabilities............................................... 24
Section 4.10 Absence of Certain Changes............................................... 24
Section 4.11 Litigation............................................................... 25
Section 4.12 Tax Matters; Government Benefits......................................... 25
Section 4.13 Title to Properties; Encumbrances........................................ 25
Section 4.14 Environmental Laws....................................................... 26
Section 4.15 Intellectual Property.................................................... 26
Section 4.16 Compliance with Laws..................................................... 27
Section 4.17 Labor Difficulties....................................................... 27
Section 4.18 Information to be Supplied............................................... 27
Section 4.19 Merger Sub's Operations.................................................. 28
Section 4.20 Brokers or Finders....................................................... 28
Section 4.21 Parent Agreements........................................................ 28
Section 4.22 Interested Party Transactions............................................ 28
Section 4.23 Opinion of Financial Advisor............................................. 28
Section 4.24 Accounting Matters....................................................... 29
ARTICLE V COVENANTS....................................................................... 29
Section 5.1 Conduct of the Business of Company....................................... 29
Section 5.2 Conduct of the Business of Parent........................................ 32
Section 5.3 Company Shareholder Meeting; Parent Shareholder Meeting;
Preparation of Proxy Statement/Prospectus........................................ 35
Section 5.4 Access................................................................... 37
Section 5.5 Confidentiality.......................................................... 37
Section 5.6 Reasonable Best Efforts.................................................. 38
Section 5.7 Employee Stock Options................................................... 39
Section 5.8 No Solicitation by the Company........................................... 41
Section 5.9 No Solicitation by the Parent............................................ 42
Section 5.10 Publicity................................................................ 44
Section 5.11 Notification of Certain Matters.......................................... 44
Section 5.12 State Takeover Laws...................................................... 44
Section 5.13 Tax and Accounting Treatment............................................. 45
Section 5.14 Governance Matters....................................................... 45
Section 5.15 Merger Sub Compliance.................................................... 46
Section 5.16 Employee Benefits........................................................ 46
Section 5.17 Indemnification.......................................................... 47
Section 5.18 Control of Other Party's Business........................................ 48
Section 5.19 HSE Listing and Nasdaq Listing; Exchange Act Reports..................... 48
Section 5.20 No Series K Shares....................................................... 49
ARTICLE VI CONDITIONS..................................................................... 49
Section 6.1 Conditions Precedent to Obligations of Parent and Merger Sub............. 49
Section 6.2 Conditions Precedent to Obligations of the Company....................... 51
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Section 6.3 Frustration of Closing Conditions........................................ 53
ARTICLE VII TERMINATION................................................................ 53
Section 7.1 Termination.............................................................. 53
Section 7.2 Effect of Termination.................................................... 55
Section 7.3 Payment of Certain Fees and Expenses..................................... 55
ARTICLE VIII DEFINITIONS AND INTERPRETATION............................................... 57
Section 8.1 Definitions.............................................................. 57
Section 8.2 Interpretation........................................................... 66
ARTICLE IX MISCELLANEOUS.................................................................. 67
Section 9.1 Amendment and Modification............................................... 67
Section 9.2 Representations and Warranties........................................... 67
Section 9.3 Notices.................................................................. 67
Section 9.4 Counterparts; Telecopier................................................. 68
Section 9.5 Entire Agreement; No Third Party Beneficiaries........................... 68
Section 9.6 Severability............................................................. 68
Section 9.7 Governing Law............................................................ 69
Section 9.8 Enforcement and Interpretation........................................... 69
Section 9.9 WAIVER OF JURY TRIAL..................................................... 69
Section 9.10 Time of Essence.......................................................... 69
Section 9.11 Extension; Waiver........................................................ 69
Section 9.12 Assignment............................................................... 69
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Exhibits
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1.1(a) Certificate of Merger - Michigan
1.1(b) Certificate of Merger - Delaware
1.6(a) Form of Company Shareholder Agreement
1.6(b) Form of Parent Shareholder Agreement
1.6(c) Form of Conversion Agreement
1.6(d)(i) Form of Employment Agreement of A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
1.6(d)(ii) Form of Employment Agreement of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
1.6(d)(iii) Form of Employment Agreement of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
1.6(e) Form of Lock-Up Agreement
6.2(m) Form of Liquidity and Registration Rights Agreement
Schedules
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Parent Disclosure Schedule
Company Disclosure Schedule
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 13, 2000, by and among
EIMO OYJ, a company organized under the laws of the Republic of Finland
("Parent"), SPARTAN ACQUISITION CORP., a Delaware corporation and a wholly-owned
subsidiary of Parent ("Merger Sub") and TRIPLE S PLASTICS, INC., a Michigan
corporation (the "Company"). As used in this Agreement, capitalized terms have
the meanings ascribed to them in Article VIII.
WHEREAS, the Board of Directors of each of Parent, Merger Sub and the
Company has approved, and deems it advisable and in the best interests of its
respective shareholders and consistent with and in furtherance of its respective
business strategies and goals, for Parent to acquire all of the outstanding
shares of the Company through the merger of Merger Sub with and into the Company
upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance thereof, the Board of Directors of Parent has
approved this Agreement and the Merger in accordance with the laws of the
Republic of Finland, upon the terms and subject to the conditions set forth
herein;
WHEREAS, in furtherance thereof, the respective Boards of Directors of
Merger Sub and the Company have approved this Agreement and the Merger in
accordance with the DGCL and the MBCA, respectively, and upon the terms and
subject to the conditions set forth herein;
WHEREAS, the parties hereto intend that the Merger shall qualify for
U.S. federal income tax purposes as a reorganization (a "Section 368
Reorganization") within the meaning of Section 368(a) of the U.S. Internal
Revenue Code of 1986, as amended (together with the rules and regulations
promulgated thereunder, the "Code");
WHEREAS, the parties hereto intend that the Merger be accounted for as
a "pooling of interests" for financial reporting purposes under Finnish GAAP;
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger;
WHEREAS, as a condition and inducement to Parent's and Merger Sub's
entering into this Agreement and incurring the obligations set forth herein,
each of the Major Company
1
Shareholders and the other shareholders of the Company who are signatory
thereto, concurrently herewith, is entering into the Company Shareholder
Agreement dated as of the date hereof, with Parent and Merger Sub, pursuant to
which the Major Company Shareholders are agreeing, among other things, to grant
Parent a proxy with respect to the voting of the Shares held by the Major
Company Shareholders all upon the terms and subject to the conditions set forth
in the Company Shareholder Agreement;
WHEREAS, as a condition and inducement to the Company's entering into
this Agreement and incurring the obligations set forth herein, each of the Major
Parent Shareholders, concurrently herewith, is entering into the Parent
Shareholder Agreement dated as of the date hereof, with the Company, pursuant to
which the Major Parent Shareholders are agreeing, among other things, to grant
the Company a proxy with respect to the voting of the Parent Ordinary Shares and
the Parent Series K Shares held by the Major Parent Shareholders, all upon the
terms and subject to the conditions set forth in the Parent Shareholder
Agreement; and
WHEREAS, as a further condition and inducement to the Company's
entering into this Agreement and incurring the obligations set forth herein,
each of the Major Parent Shareholders, concurrently herewith, is entering into
the Conversion Agreement dated as of the date hereof, with the Company, pursuant
to which the Major Parent Shareholders are agreeing, among other things, to
convert the Parent Series K Shares held by the Major Parent Shareholders into
Parent Ordinary Shares, effective as of the Effective Time, all upon the terms
and subject to the conditions set forth in the Conversion Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein,
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Subject to the terms and conditions of this
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Agreement, at the Effective Time, the Company and Merger Sub shall consummate a
merger pursuant to which (a) Merger Sub shall be merged with and into the
Company and the separate corporate existence of Merger Sub shall thereupon
cease, (b) the Company shall be the successor or surviving corporation in the
Merger (the "Surviving Corporation") and shall continue to be governed by the
laws of the State of Michigan, and (c) the separate corporate existence of the
Company with all its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger, except as set forth in this Section 1.1.
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Pursuant to the Merger, (x) the articles of incorporation of the Company shall
be amended at and as of the Effective Time as set forth in the Certificates of
Merger in the form of Exhibit 1.1(a) and Exhibit 1.1(b) hereof (collectively,
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the "Certificate of Merger"), and, as so
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amended, shall be the articles of incorporation of the Surviving Corporation
until thereafter amended as provided by law and such articles of incorporation,
and (y) the bylaws of the Company shall be, at and as of the Effective Time, the
bylaws of the Surviving Corporation until thereafter amended as provided by law,
by the articles of incorporation or by such bylaws. The Merger shall have the
effects specified in the MBCA and the DGCL
Section 1.2 Effective Time. Subject to the terms of this Agreement,
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Parent, Merger Sub and the Company will cause the Merger to be consummated by
causing the Certificate of Merger to be executed and filed on the Closing Date
(or on such other date as Parent and the Company may agree) with the Department
of Consumer and Industry Services of the Corporation Division of the State of
Michigan, as provided in the MBCA, and with the Secretary of State of the State
of Delaware, as provided in the DGCL. The Merger shall become effective on the
later of (a) the time at which the Certificate of Merger is duly filed with the
Department of Consumer and Industry Services of the Corporation Division of the
State of Michigan, (b) the time at which the Certificate of Merger is duly filed
with the Secretary of State of the State of Delaware, or (c) such other time as
is agreed upon by the parties and specified in the Certificate of Merger (the
"Effective Time").
Section 1.3 Closing. The closing of the Merger shall take place at
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10:00 a.m. on a date to be agreed upon by the parties, and if such date is not
agreed upon by the parties, the Closing shall occur on the second Business Day
after satisfaction or waiver of all of the conditions set forth in Article VI,
at the offices of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as shall be agreed upon by the
parties.
Section 1.4 Directors and Officers of the Surviving Corporation.
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The directors of Merger Sub (plus two additional persons acceptable to Parent in
its sole discretion, one of which is to be nominated by the Company and the
other to be nominated by the Parent prior to the Closing) and the officers of
the Company immediately prior to the Effective Time shall, from and after the
Effective Time, be the directors and officers, respectively, of the Surviving
Corporation until their successors shall have been duly elected or appointed or
qualified or until their earlier death, resignation or removal in accordance
with the articles of incorporation and the bylaws of the Surviving Corporation.
If, at the Effective Time, a vacancy shall exist on the Company Board of
Directors or in any office of the Surviving Corporation, such vacancy may
thereafter be filled in the manner provided by law.
Section 1.5 Subsequent Actions. If at any time after the Effective
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Time the Surviving Corporation will consider or be advised that any deeds, bills
of sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Merger Sub acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger, or otherwise to carry out this Agreement, the officers and directors of
the Surviving Corporation shall be authorized to execute
3
and deliver, and shall execute and deliver, in the name and on behalf of either
the Company or Merger Sub, all such deeds, bills of sale, instruments of
conveyance, assignments and assurances and to take and do, and shall take and
do, in the name and on behalf of each of such corporations or otherwise, all
such other actions and things as may be necessary or desirable to vest, perfect
or confirm any and all right, title and interest in, to and under such rights,
properties or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
Section 1.6 Other Agreements. Simultaneously with the execution
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and delivery of this Agreement, the following agreements will be executed and
delivered: (a) the Company Shareholder Agreement in the form of Exhibit 1.6(a)
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hereto among Parent, Merger Sub and each of the Major Company Shareholders and
the other shareholders of the Company who are signatory thereto, (b) the Parent
Shareholder Agreement in the form of Exhibit 1.6(b) hereto among the Company and
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each of the Major Parent Shareholders, (c) the Conversion Agreement in the form
of Exhibit 1.6(c) hereto among the Company, Parent and each of the Major Parent
--------------
Shareholders (the "Conversion Agreement"), (d) the Employment Agreements in the
form of Exhibits 1.6(d)(i), (ii) and (iii) hereto between the Company and each
----------------------------------
of A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.,
respectively (collectively, the "Employment Agreements"), and (e) the
Shareholder Lock-Up Agreement in the form of Exhibit 1.6(e) (the "Lock-Up
--------------
Agreement"). For the avoidance of doubt, E.A.T Invest Oy, an entity under
common control of Parent, and ▇▇▇▇ ▇▇▇▇▇▇▇▇ are not parties to this Agreement,
nor any agreement referred to in this section or elsewhere in this Agreement.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time,
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by virtue of the Merger and without any further action on the part of the
holders of any Shares or holders of Merger Sub Common Stock:
(a) Merger Sub Common Stock. Each issued and outstanding share of
-----------------------
Merger Sub Common Stock shall be converted into and become one fully paid and
non-assessable share of common stock, no par value, of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. All Shares
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that are owned by the Company as treasury stock and any Shares owned by Parent,
Merger Sub or any other wholly-owned Subsidiary of Parent shall be cancelled and
retired and shall cease to exist, and no consideration shall be delivered in
exchange therefor. (For the avoidance of doubt, this Section 2.1(b) shall not
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apply to any Shares owned by E.A.T Invest Oy, an entity under common control
with Parent.
4
(c) Conversion of Shares. Each issued and outstanding Share (other
--------------------
than Shares to be cancelled in accordance with Section 2.1(b)) shall be
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converted into the right to receive from Parent pursuant to Section 2.1(e) a
--------------
number of Parent Ordinary Shares equal to the Exchange Ratio, which shall be
delivered in the form of American Depositary Shares (the "Parent ADSs"), each
representing the right to receive (in book entry form) one Parent Ordinary Share
(the "Merger Consideration"), evidenced by one or more American Depositary
Receipts ("Parent ADRs") issued in accordance with the Deposit Agreement,
provided, however, that the ratio between the number of Parent Shares
-------- -------
represented by each ADS may be adjusted by Parent with the consent of the
Company, which consent shall not be unreasonably withheld or delayed. At the
Effective Time, all Shares shall no longer be outstanding, shall be canceled and
retired and shall cease to exist, and each certificate (a "Certificate")
formerly representing any of such Shares shall thereafter represent only the
right to receive the Merger Consideration and the right, if any, to receive
pursuant to Section 2.2(f) cash in lieu of fractional Parent ADSs and any
--------------
dividend or distribution pursuant to Section 2.2(d), in each case without
--------------
interest. Parent shall, following the Closing, pay all stamp duties, stamp duty
reserve tax and other taxes and similar levies imposed in connection with the
issuance or creation of the Parent Ordinary Shares, Parent ADSs and any Parent
ADRs in connection therewith.
(d) Exchange Ratio. The Exchange Ratio shall be determined as
--------------
follows:
(i) In the event that the Parent Average Price (as defined
below) is less than or equal to $5.00000, the Exchange Ratio shall be 5.700.
(ii) In the event that the Parent Average Price is greater than
$5.00000 but less than $5.22500, the Exchange Ratio shall be the number
determined by dividing (X) $28.4699 by (Y) the Parent Average Price, and
rounding the result to the nearest thousandth of a Parent Ordinary Share.
(iii) In the event that the Parent Average Price is equal to or
greater than $5.22500 but less than or equal to $6.18000, the Exchange Ratio
shall be 5.449.
(iv) In the event that the Parent Average Price is greater than
$6.18000 but less than or equal to $6.93738, the Exchange Ratio shall be the
number determined by dividing (X) $33.6463 by (Y) the Parent Average Price, and
rounding the result to the nearest thousandth of a Parent Ordinary Share.
(v) In the event that the Parent Average Price is greater than
$6.93738, the Exchange Ratio shall be 4.850.
"Parent Average Price" shall mean the average, for a period consisting
of the fifteen (15) consecutive Trading Days ending on (and including) the third
(3rd) Trading Day prior to the Closing Date, of the volume-weighted daily
average price, as reported in the Financial Times, U.S.
5
Edition, or if not reported therein, another authoritative source, expressed in
Euros for a single Parent Ordinary Share on the HSE, converted into U.S. Dollars
at the Exchange Rate for such date.
(e) Issuance of Merger Consideration. In consideration of the
--------------------------------
issuance to Parent by the Surviving Corporation of shares of common stock of the
Surviving Corporation pursuant to Section 2.1(a) hereof, Parent shall issue to
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the depositary for the Parent ADSs such number of Parent Ordinary Shares as is
equal to the number of Shares outstanding immediately prior to the Effective
Time multiplied by the Exchange Ratio under the Deposit Agreement to permit the
issuance of Parent ADSs.
(f) Extraordinary Adjustments. In the event that, subsequent to the
-------------------------
date of this Agreement but prior to the Effective Time, (x) the Company changes
the number of Shares, or Parent changes the number of Parent Ordinary Shares
(other than as a result of converting Series K Shares of Parent into Series A
shares of Parent as elsewhere described herein), issued and outstanding as a
result of a stock split, stock combination, dividend of stock or other
securities (or a record date within such period with respect to such a
dividend), recapitalization, redenomination of share capital or other similar
transaction, the Exchange Ratio and other items dependent thereon shall be
appropriately adjusted to provide to the holders of Shares the same economic
effect and percentage ownership of Parent Ordinary Shares as contemplated by
this Agreement prior to such stock split, stock combination, dividend,
recapitalization, redenomination or similar transaction, or (y) the Company
changes the number of Shares issued and outstanding or issues additional Company
Options, the Exchange Ratio and other items dependent thereon shall be
appropriately reduced.
Section 2.2 Exchange of Certificates.
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(a) Appointment of Exchange Agent. Prior to the Effective Time,
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Parent shall appoint a bank or trust company (which may be the depositary under
the Deposit Agreement) reasonably acceptable to the Company as exchange agent
(the "Exchange Agent") for the purposes of exchanging the Certificates for
Parent ADSs. Promptly after the Effective Time, Parent will send, or will cause
the Exchange Agent to send, to each holder of record of Shares as of the
Effective Time a letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent and shall be in
customary form and have such other customary provisions as the Company and
Parent may reasonably specify) providing instructions for use in effecting the
surrender of Certificates in exchange for certificates representing Parent ADRs
which represent Parent ADSs and cash in lieu of fractional Parent ADSs.
(b) Exchange Fund. Within three Business Days following the Effective
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Time, Parent shall make available to the Exchange Agent for exchange in
accordance with this Article II, certificates for the Parent ADRs representing
the Parent ADSs issuable pursuant to Section 2.1(c) in exchange for outstanding
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Shares and cash in an amount sufficient for payment in lieu of fractional Parent
ADSs pursuant to Section 2.2(f) and any dividends or distributions to which
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holders of Shares
6
may be entitled pursuant to Section 2.2(d). The cash amounts payable pursuant to
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Section 2.2(d) and Section 2.2(f) are referred to collectively as the "Exchange
-------------- --------------
Fund." The Exchange Agent shall invest any cash included in the Exchange Fund as
directed by the Surviving Corporation on a daily basis; provided that no such
investment or loss thereon shall affect the amounts payable to the Company's
shareholders pursuant to this Article. Any interest and other income resulting
from such investments shall promptly be paid to the Surviving Corporation. All
Parent ADSs to be issued and delivered to the holders of Shares in accordance
with this Agreement shall, as of the Effective Time, have been registered under
the Securities Act pursuant to a registration statement on Form F-6 declared
effective by the SEC, and the Parent Ordinary Shares underlying such Parent ADSs
shall, as of the Effective Time, have been registered under the Securities Act
pursuant to a registration statement on Form F-4 declared effective by the SEC.
(c) Exchange Procedures. Upon surrender to the Exchange Agent of a
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Certificate for cancellation, together with the letter of transmittal referred
to in Section 2.2(a) duly executed and completed in accordance with its terms,
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the holder of such Certificate shall be entitled to receive in exchange therefor
(i) a certificate or certificates representing one or more Parent ADRs
representing, in the aggregate, that whole number of Parent ADSs to be received
in accordance with Section 2.1(c), (ii) the amount of dividends or other
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distributions, if any, with a record date on or after the Effective Time which
theretofore became payable with respect to such Parent ADSs in accordance with
Section 2.2(d), and (iii) the cash amount payable in lieu of fractional Parent
--------------
ADSs in accordance with Section 2.2(f), in each case which such holder has the
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right to receive pursuant to the provisions of this Article, and the Certificate
so surrendered shall forthwith be canceled. In no event shall the holder of any
Certificate be entitled to receive interest on any funds to be received in the
Merger. In the event of a transfer of ownership of Shares which is not
registered in the transfer records of the Company, one or more Parent ADRs
representing that whole number of Parent ADSs to be received in accordance with
Section 2.1(c), plus any dividends or other distributions to which the
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transferor would otherwise be entitled pursuant to Section 2.2(d), plus the cash
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amount payable in lieu of fractional Parent ADSs in accordance with Section
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2.2(f), may be issued to a transferee if the Certificate representing such
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Shares is presented to the Exchange Agent accompanied by all documents required
to evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this
Section, and subject to Section 2.2(d), each Certificate shall, after the
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Effective Time, represent for all purposes only the right to receive the whole
number of Parent ADSs into which the number of Shares shown thereon have been
converted as contemplated by this Article plus the cash amount payable in lieu
of fractional Parent ADSs in accordance with Section 2.2(f).
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(d) Distributions With Respect To Unexchanged Shares. No dividends or
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other distributions declared, made or paid after the Effective Time with respect
to Parent Ordinary Shares with a record date on or after the Effective Time
shall be paid to the holder of any unsurrendered Certificate with respect to the
Parent ADSs represented thereby and no cash payment in lieu of fractional Parent
ADSs shall be paid to any such holder pursuant to Section 2.2(f) until the
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holder of record of such Certificate shall surrender such Certificate in
accordance with this Section 2.2.
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Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the record holder of the Parent ADRs which
represent Parent ADSs issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of dividends or other distributions, if any,
with a record date on or after the Effective Time which theretofore became
payable, but which were not paid by reason of the immediately preceding
sentence, with respect to such Parent ADSs, and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a record date on or
after the Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such Parent ADSs. Dividends or other
distributions with a record date on or after the Effective Time but prior to
surrender of Certificates by holders thereof payable in respect of Parent ADSs
held by the Exchange Agent shall be held in trust for the benefit of such
holders of Certificates.
(e) No Further Ownership Rights In Shares. All Parent ADRs (and the
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Parent ADSs represented by such Parent ADRs) issued upon the surrender for
exchange of Certificates in accordance with the terms hereof (including any cash
paid pursuant to Section 2.2(f)) shall be deemed to have been issued at the
--------------
Effective Time in full satisfaction of all rights pertaining to the Shares
represented thereby, subject, however, to the Surviving Corporation's obligation
to pay any dividends which may have been declared by the Company on the Shares
in accordance with the terms of this Agreement and which remained unpaid at the
Effective Time. From and after the Effective Time, the stock transfer books of
the Company shall be closed and there shall be no further registration of
transfers thereon of the Shares which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and exchanged as
provided in this Section.
(f) No Fractional Shares. No certificate or scrip representing
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fractional Parent ADSs will be issued in the Merger upon the surrender for
exchange of Certificates, and such fractional Parent ADS interests will not
entitle the owner thereof to vote or to any rights of a holder of Parent ADSs.
In lieu of any such fractional Parent ADS, each holder of Certificates who would
otherwise have been entitled to a fraction of a Parent ADS in exchange for such
Certificates (after taking into account all Certificates delivered by such
holder) pursuant to this Section shall receive from the Exchange Agent a cash
payment in lieu of such fractional Parent ADS, determined by multiplying (A) the
Parent Average Price by (B) the fractional Parent ADS interest to which such
holder would otherwise be entitled.
(g) Termination of Exchange Fund. Any portion of the Exchange Fund
----------------------------
which remains undistributed to the shareholders of the Company for one (1) year
after the Effective Time shall be delivered to or as directed by Parent, upon
demand, and any holders of Certificates who have not theretofore complied with
this Article II shall thereafter look only to Parent (subject to abandoned
property, escheat and other similar laws) as a general creditor for payment of
their claim for Parent ADSs, any cash in lieu of fractional Parent ADSs and any
dividends or distributions with respect to Parent ADSs. Any amounts remaining
unclaimed by any holder of Certificates formerly representing Shares immediately
prior to such time when such amounts would otherwise escheat to
8
or become the property of any Governmental Entity (as hereinafter defined),
shall, to the extent permitted by applicable laws, become the property of
Parent, free and clear of all claims or interests of any Person previously
entitled thereto. Neither Parent, the Surviving Corporation nor the Exchange
Agent shall be liable to any holder of Certificates formerly representing Shares
with respect to any Parent ADRs (or dividends or distributions with respect
thereto), or cash payable in respect of fractional Parent ADSs, delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law, rule, regulation or Order.
(h) Lost, Stolen or Destroyed Certificates. If any Certificate shall
--------------------------------------
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming such Certificate to be lost, stolen or destroyed
and, if required by Parent in its discretion and as a condition precedent to the
issuance thereof, the posting by such person of a bond in such reasonable amount
as Parent may direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to such
Certificate, the Exchange Agent will deliver in exchange for such lost, stolen
or destroyed Certificate the applicable Merger Consideration with respect to the
Shares formerly represented thereby, any cash in lieu of fractional Parent ADSs,
and unpaid dividends and distributions in respect of or on Parent ADSs
deliverable in respect thereof, pursuant to this Agreement.
(i) Withholding Rights. Each of the Surviving Corporation and Parent
------------------
shall be entitled to deduct and withhold from the Merger Consideration (and any
dividends or distributions thereon) otherwise payable hereunder to any Person
such amounts as it is required to deduct and withhold with respect to the making
of such payment under any provision of federal, state, local or foreign income
or other tax law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Schedule prepared and
signed by the Company and delivered to Parent and Merger Sub simultaneously with
the execution hereof, the Company represents and warrants to Parent and Merger
Sub that all of the statements contained in this Article III are true and
correct as of the date of this Agreement (or, if made as of a specified date, as
of such date). Each exception set forth in the Company Disclosure Schedule is
identified by reference to a specific section of this Agreement and, except as
otherwise specifically stated with respect to such exception, relates only to
such section.
Section 3.1 Organization; Qualification; Charter Documents. (a)
----------------------------------------------
The Company (i) is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation; (ii) has full corporate
power and authority to carry on its business as it is now being conducted and to
own, lease and operate the properties and assets it now owns, leases or operates
or purports to own, lease or operate; and (iii) is duly qualified or licensed to
do business as a foreign
9
corporation in good standing in every jurisdiction in which ownership of
property or the conduct of its business requires such qualification, except
where the failure to have such power and authority or to be so qualified,
licensed or in good standing could not reasonably be expected to, individually
or in the aggregate, have a Company Material Adverse Effect.
(b) The Company has heretofore delivered to Parent complete and
correct copies of the Charter Documents of the Company and each Company
Subsidiary as amended to date. All such Charter Documents are in full force and
effect, and neither the Company nor any Company Subsidiary is in violation of
any provision of its respective Charter Documents except for breaches which
would not materially restrict the ability of Company to consummate the Merger or
could not reasonably be expected to have a Company Material Adverse Effect.
Section 3.2 Subsidiaries and Affiliates. The Company Disclosure
---------------------------
Schedule sets forth the name and jurisdiction of incorporation of each Company
Subsidiary and the jurisdictions in which each such Company Subsidiary is
qualified to do business. The Company does not own, directly or indirectly, any
capital stock or other equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in, any corporation or have any direct or indirect equity or ownership
interest in any business other than publicly traded securities constituting less
than one percent of the outstanding equity of the issuing entity. All the
outstanding capital stock of each Company Subsidiary is owned directly or
indirectly by the Company, free and clear of all pledges, claims, liens,
charges, options, agreements, limitations on voting rights, encumbrances or
security interests of any kind (collectively, "Liens"), and is validly issued,
fully paid and non-assessable, and there are no outstanding options, rights or
agreements of any kind relating to the issuance, sale or transfer of any capital
stock or other equity securities of any such Company Subsidiary to any Person
except the Company. Each Company Subsidiary (i) is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation; (ii) has full corporate power and authority to carry on its
business as it is now being conducted and to own the properties and assets it
now owns; and (iii) is duly qualified or licensed to do business as a foreign
corporation in good standing in every jurisdiction in which ownership of
property or the conduct of its business requires such qualification, except
where the failure to have such power and authority or to be so qualified,
licensed or in good standing could not reasonably be expected to, individually
or in the aggregate, have a Company Material Adverse Effect.
Section 3.3 Capitalization. (a) The authorized capital stock of
--------------
the Company consists of 10,200,000 shares of common stock, no par value per
share, and 1,000,000 shares of preferred stock, no par value per share. As of
the date hereof, (i) 3,763,549 Shares are issued and outstanding, (ii) no Shares
are held in the treasury of the Company or by any Subsidiary of the Company,
(iii) no shares of preferred stock are issued and outstanding, (iv) an
aggregate of 1,008,700 Shares are issuable upon exercise of outstanding Company
Options, including, without limitation, options under the Company's "Employee
Stock Option Plan," the "Outside Director Stock Option Plan," the "Employee
Stock Purchase Plan" and any Company Award (collectively, the "Company Stock
Plans"), and (v) an aggregate of 1,320,000 shares (including the 1,008,700
10
shares referenced in clause (iv)) are reserved for issuance in connection with
the issuance of Shares under Company Stock Plans. All the outstanding shares of
the Company's capital stock are, and all Shares which may be issued pursuant to
the exercise of outstanding Company Options will be, when issued in accordance
with the respective terms thereof, duly authorized, validly issued, fully paid
and non-assessable. There is no Voting Debt of the Company or any Company
Subsidiary issued and outstanding. Except as set forth above and except for the
Transactions, as of the date hereof, (i) there are no shares of capital stock of
the Company authorized, issued or outstanding; (ii) there are no existing
options, warrants, calls, pre-emptive rights, subscriptions or other rights,
agreements, arrangements or commitments of any character, relating to the issued
or unissued capital stock of the Company or any Company Subsidiary, obligating
the Company or any Company Subsidiary to issue, transfer or sell or cause to be
issued, transferred or sold any shares of capital stock or Voting Debt of, or
other equity interest in, the Company or any Company Subsidiary or securities
convertible into or exchangeable for such shares or equity interests, or
obligating the Company or any Company Subsidiary to grant, extend or enter into
any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment and (iii) there are no outstanding obligations
(contingent or otherwise) of the Company or any Company Subsidiary to
repurchase, redeem or otherwise acquire any Shares, or the capital stock of the
Company, or any Company Subsidiary or Affiliate of the Company.
(b) Except as expressly contemplated by this Agreement, there are no
voting trusts or other agreements or understandings to which the Company or any
Company Subsidiary is a party with respect to the voting of the capital stock of
the Company or any of the Subsidiaries.
Section 3.4 Authorization; Validity of Agreement; Company Action.
----------------------------------------------------
The Company has full corporate power and authority to execute and deliver this
Agreement, and, subject in the case of consummation of the Merger to obtaining
the Company Shareholder Approval, to consummate the Transactions. The
execution, delivery and performance by the Company of this Agreement and the
consummation by it of the Transactions, have been duly and validly authorized by
the Company Board of Directors and, except for obtaining the Company Shareholder
Approval and the filing of merger documents as set forth herein, no other
corporate action on the part of the Company is necessary to authorize the
execution and delivery by the Company of this Agreement or the consummation by
it of the Transactions. This Agreement has been duly executed and delivered by
the Company and, assuming due and valid authorization, execution and delivery
thereof by Parent and Merger Sub, this Agreement is a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium and other
similar laws relating to creditors' rights and general principles of equity.
Section 3.5 Board Approvals; Takeover Statutes. The Company Board
----------------------------------
of Directors, at a meeting duly called and held, has (i) unanimously determined
that each of the Agreement and the Merger are in the best interests of the
Company and its shareholders, (ii) adopted this Agreement, and approved the
Merger and the other Transactions, and (iii) resolved to
11
recommend that the shareholders of the Company approve this Agreement and the
Merger, and none of the aforesaid actions by the Company Board of Directors has
been amended, rescinded or modified. The Company Board of Directors has taken
all necessary action such that Chapters 7A and 7B of the MBCA, Article IX of the
Company's Articles of Incorporation, and Article II, Section 8 of the Company's
Bylaws do not, and, unless the Agreement is terminated, shall not in the future,
to the extent within its control, apply to this Agreement, the Merger or the
other Transactions. To the knowledge of the Company, no other state takeover
statute is applicable to the Merger or the other Transactions.
Section 3.6 Vote Required. The affirmative vote of the holders of
-------------
a majority of the outstanding Shares is the only vote of the holders of any
class or series of the Company's capital stock necessary to adopt this Agreement
and approve the Merger and the other Transactions.
Section 3.7 Consents and Approvals; No Violations. Except for the
-------------------------------------
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, the HSR Act,
Finnish corporation and securities law, Non-U.S. Monopoly Laws, state securities
or blue sky laws, the MBCA and the DGCL, none of the execution, delivery or
performance of this Agreement by the Company or the consummation by the Company
of the Transactions will (i) conflict with or result in any breach of any
provision of the articles of incorporation, the bylaws or similar organizational
documents of the Company, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity, (iii) result in
a violation or breach of, or constitute (with or without due notice or the
passage of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any Company Agreement, or (iv) violate any Order, statute, rule or
regulation applicable to the Company, any Company Subsidiary or any of their
properties or assets, except, with respect to the foregoing clauses (ii), (iii)
and (iv), as could not reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect. There are no third party
consents or approvals required to be obtained under the Company Agreements prior
to the consummation of the Transactions, except where the failure to obtain such
consents or approvals could not reasonably be expected to, individually or in
the aggregate, have a Company Material Adverse Effect.
Section 3.8 SEC Reports and Financial Statements. The Company has
------------------------------------
filed with the SEC true and complete copies of the Company SEC Documents. As of
their respective dates or, if amended, as of the date of the last such amendment
filed prior to the date hereof, the Company SEC Documents, including, without
limitation, any financial statements or schedules included therein (a) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. None of the Company
Subsidiaries is required to file any forms, reports or other documents with the
SEC. The Company
12
Financial Statements have been prepared from, and are in accordance with, in
each case, in all material respects, the books and records of the Company and
its consolidated Subsidiaries, and comply as to form, as of their respective
dates of filing with the SEC, in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with U.S. GAAP (except,
in the case of unaudited financial statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the period involved (except as may be
stated in the notes thereto) and fairly present in all material respects the
consolidated financial position and the consolidated results of operations and
cash flows (and changes in financial position, if any) of the Company and its
consolidated Subsidiaries as of the times and for the periods referred to
therein, subject, with respect to interim unaudited financial statements, to
normal and recurring year-end adjustments that are not reasonably likely to be
material in amount.
Section 3.9 No Undisclosed Liabilities. Except (a) as disclosed in
--------------------------
the Company Financial Statements and (b) for liabilities and obligations (i)
incurred in the ordinary course of business and consistent with past practice
since the Balance Sheet Date pursuant to the terms of this Agreement, or (ii)
incurred pursuant to, or in furtherance of, this Agreement or the Transactions,
neither the Company nor any Company Subsidiary has any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise,
which could reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
Section 3.10 Absence of Certain Changes. Since the Balance Sheet
--------------------------
Date, except as disclosed in the Company SEC Documents filed prior to the date
hereof, (i) the Company and each Company Subsidiary has conducted its respective
business only in the ordinary and usual course, (ii) there have not occurred any
events, changes, effects or circumstances (including the incurrence of any
liabilities of any nature, whether or not accrued, contingent or otherwise)
having or which could reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, and (iii) there has not been (1)
any declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of the Company's
capital stock, (2) any split, combination or reclassification of any of the
Company's capital stock or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution for shares of
the Company's capital stock, except for issuances of Company Common Stock upon
the exercise of Company Options awarded prior to the date hereof, (3) (A) any
granting by the Company or any of its Subsidiaries to any current or former
director, executive officer or other key employee of the Company or its
Subsidiaries of any increase in compensation, bonus or other benefits, except
for normal increases in the ordinary course of business or as was required under
any employment agreements identified on the Company Disclosure Schedule in
effect as of the date of the date hereof, (B) any granting by the Company or any
of its Subsidiaries to any such current or former director, executive officer or
key employee of any increase in severance or termination pay, except in the
ordinary course of business, or (C) any entry by the Company or any of its
Subsidiaries into, or any amendment of, any employment, deferred compensation,
consulting, severance, termination or indemnification agreement with any such
13
current or former director, executive officer or key employee, other than in the
ordinary course of business, (4) except insofar as may have been disclosed in
the Company SEC Documents or required by a change in U.S. GAAP, any change in
accounting methods, principles or practices by the Company materially affecting
its assets, liabilities or business or (5) except insofar as may have been
disclosed in the Company SEC Documents, any tax election that individually or in
the aggregate would reasonably be expected to have a Company Material Adverse
Effect on the Company or any of its tax attributes or any settlement or
compromise of any material income tax liability.
Section 3.11 Litigation. There is no action, suit or proceeding by
----------
or before any court or governmental or other regulatory or administrative agency
or commission pending or, to the best knowledge of the Company, threatened
against or involving the Company or any Company Subsidiary; or which questions
or challenges the validity of this Agreement or any action taken or to be taken
by the Company or any Company Subsidiary pursuant to this Agreement or in
connection with the Transactions; other than, in each case, those the outcome
of which, individually or in the aggregate, would not (i) reasonably be expected
to have a Company Material Adverse Effect, or (ii) reasonably be expected to
materially impair or delay the ability of the Company to perform its obligations
under the Agreement.
Section 3.12 Employee Benefit Plans. (a) As used herein, "Plan" shall
----------------------
mean each incentive compensation, stock purchase, stock option and other equity
compensation plan, program, agreement or arrangement; each severance or
termination pay, medical, surgical, hospitalization, life insurance and other
"welfare" plan, fund or program (within the meaning of Section 3(1) of ERISA);
each profit-sharing, stock bonus or other "pension" plan, fund or program
(within the meaning of Section 3(2) of ERISA); each employment, termination or
severance agreement; and each other employee benefit plan, fund, program,
agreement or arrangement, in each case, that is sponsored, maintained or
contributed to or required to be contributed to by the Company or by any ERISA
Affiliate, or to which the Company or an ERISA Affiliate is party, for the
benefit of any director, employee or former employee of the Company or any
Company Subsidiary.
(b) The Company has delivered or made available to the Parent true,
correct and complete copies of all documents relating to the Plans, including
but not limited to: (i) all Plan documents, amendments and trust instruments;
(ii) all insurance and annuity contracts related to any Plans; (iii) COBRA
notices and forms, including election forms used to notify employees and their
dependents of their continuation coverage rights under the Company's group
health plans; (iv) the most recently filed Form 5500 annual reports; and (v)
actuarial reports, summary plan descriptions and favorable determination letters
for the Plans. Since the date these documents were supplied to Parent, no Plan
amendments have been adopted, no changes to these documents have been made, and
no amendments or changes will be adopted or made prior to the Closing Date in
each case that could reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect.
14
(c) All of the Plans subject to ERISA comply in all material respects
and have been administered in compliance in all material respects with (i) the
provisions of ERISA, (ii) all provisions of the Code, applicable to secure the
intended tax consequences, (iii) all applicable state and federal securities
laws and (iv) all other applicable laws, rules, regulations and collective
bargaining agreements, except where the failure to so comply or to be so
administered would not result in any Company Material Adverse Effect. The
Company has not received any written notice from any Governmental Entity
questioning or challenging such compliance that could reasonably be expected to,
individually or in the aggregate, have a Company Material Adverse Effect.
(d) Neither the Company nor its ERISA Affiliates has engaged in any
transaction or acted or failed to act in any manner that could subject the
Company to any direct or indirect liability (by indemnity or otherwise) for a
breach of any fiduciary or co-fiduciary duty under ERISA, or liability for a
prohibited transaction (within the meaning of ERISA Section 406 or Code Section
4975) that could reasonably be expected to, individually or in the aggregate,
have a Company Material Adverse Effect.
(e) No Plan is subject to Title IV of ERISA, and neither the Company
nor any of its ERISA Affiliates has incurred any liability under Title IV of
ERISA arising in connection with the termination of any plan covered or
previously covered by Title IV of ERISA that could become, after the Closing
Date, an obligation of the Company or any of its ERISA Affiliates, in each case,
that could reasonably be expected to, individually or in the aggregate have a
Company Material Adverse Effect.
(f) Neither the Company nor any of its ERISA Affiliates has ever
established, maintained, contributed to or otherwise participated in, or had an
obligation to maintain, contribute to, or otherwise participate in, any multi-
employer plan within the meaning of ERISA Section 4001(a)(3).
(g) To the Company's knowledge, none of the Plans provides welfare
benefits, including, without limitation, death or medical benefits (whether or
not insured), with respect to current or former employees beyond their
retirement or other termination of service (other than coverage required by
COBRA or any similar state law).
(h) Except as described in the Company Disclosure Schedule, there are
no insurance reserves, trusts or escrow accounts that have been established to
provide for payments under welfare plans within the meaning of Section 3(1) of
ERISA.
15
(i) Each Plan which is intended to be qualified under Code Section
401(a) ("Qualified Retirement Plan") has received from the Internal Revenue
Service a favorable determination letter to the effect that the plan in form
satisfies the requirements for qualification under Code Section 401(a) (taking
into account the provisions of the Tax Reform Act of 1986). To the Company's
knowledge, no event has occurred or circumstances exist that will or could give
rise to disqualification of a Qualified Retirement Plan and no amendment to any
Qualified Retirement Plan made since applying for such determination letter
could cause a disqualification of such Plan.
(j) The Company has the right pursuant to the terms of each Plan that
is a welfare plan within the meaning of Section 3(1) of ERISA and all agreements
related to such Plan unilaterally to terminate such Plan (or its participation
in such Plan) or to amend the terms of such Plan at any time.
(k) The transactions contemplated by this Agreement will not result in
any additional payments to or benefit accruals for, or any increase in the
vested interest of, any current or former officer, employee or director or their
dependents under any Plan. The Company is not obligated to reimburse or
increase the compensation of or payments to any current or former officer,
employee or director of the Company in order to make such person whole for any
excise tax such person may pay under Section 4999 of the Code due to an excess
parachute payment under Section 280G of the Code.
(l) Except as expressly provided in this Agreement, there is no
pending or, to the knowledge of the Company, threatened complaint, claim (other
than a routine claim for benefits), proceeding, audit, or investigation of any
kind in or before any Governmental Entity with respect to any Plan that could
reasonably be expected to result in a Company Material Adverse Effect.
Section 3.13 Tax Matters; Government Benefits.
--------------------------------
(a) The Company and each of its Subsidiaries has filed all Tax Returns
that are required to be filed by the Company and its Subsidiaries, and all such
Tax Returns are complete and correct in all material respects, or requests for
extensions to file such returns or reports have been timely filed, granted and
have not expired, except to the extent that such failure to file, to be complete
or correct or to have extensions granted that remain in effect individually or
in the aggregate would not reasonably be expected to have a Company Material
Adverse Effect. The Company and each of its Subsidiaries have duly paid or
caused to be duly paid in full or made provision in accordance with U.S. GAAP
(or there has been paid or provision has been made on their behalf) for the
payment of all Taxes (as hereinafter defined) shown as due on such Tax Returns.
The most recent financial statements contained in the Company SEC Documents
reflect an adequate
16
reserve for all Taxes payable by the Company and the Company Subsidiaries for
all taxable periods and portions thereof accrued through the date of such
financial statements.
(b) No notification has been received by the Company or by any Company
Subsidiary that an audit, examination or other proceeding is pending or, to the
Company's knowledge, threatened with respect to any Taxes due from or with
respect to or attributable to the Company or any Company Subsidiary or any Tax
Return filed by or with respect to the Company or any Company Subsidiary, except
for those that would not reasonably be expected to have a Company Material
Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries has taken any
action or knows of any fact, agreement, plan or other circumstance that is
reasonably likely to prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
(d) None of the Company or any Company Subsidiary has been a member
of any affiliated group within the meaning of Section 1504(a) of the Code, or
any similar affiliated or consolidated group for tax purposes under state, local
or foreign law (other than a group, the common parent of which is the Company),
or has any liability for Taxes of any person (other than the Company and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 or any similar
provision of state, local or foreign law as a transferee or successor, by
contract or otherwise.
Section 3.14 Title to Properties; Encumbrances. Except as set
---------------------------------
forth in the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 2000, each of the Company and the Company Subsidiaries has good and
valid title to, or has valid leasehold interests in or valid rights under
contract to use, all the tangible properties and assets which it purports to own
or use, including all the tangible properties and assets reflected in the
Balance Sheet (except for properties and assets disposed of since the date of
the Balance Sheet in the ordinary course of business consistent with past
practice), in each case, free and clear of all title defects or objections,
liens, claims, charges, security interests or other encumbrances of any nature
whatsoever except, with respect to all such properties and assets, for (a) liens
shown on the Balance Sheet as securing specified liabilities or obligations and
liens incurred in connection with the purchase of property and/or assets, if
such purchase was effected after the date of the Balance Sheet, with respect to
which no default exists; (b) minor imperfections of title, if any, none of which
are substantial in amount, detract from the value or impair the use of the
property subject thereto, or impair the operations of the Company or any Company
Subsidiary and which have arisen only in the ordinary course of business and
consistent with past practice since the date of the Balance Sheet; (c) liens for
current taxes not yet due; and (d) such title defects, failure to have valid
leasehold interest in, or objections, liens, claims, charges, security interests
or other encumbrances of any nature whatsoever, if any, as individually or in
the aggregate could not reasonably be expected to have a Company Material
Adverse Effect.
17
Section 3.15 Environmental Laws. Except as disclosed in the
------------------
Company SEC Documents (a) the Company and each Company Subsidiary is in
compliance with all Environmental Laws, including compliance with any permits or
other governmental authorizations or the terms and conditions thereof, except in
the case of the matters covered by this sentence where the failure to be in
compliance with such laws could not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect; (b) in the
past five (5) years, neither the Company nor any Company Subsidiary has received
any communication or notice, whether from a governmental authority or otherwise,
alleging any violation of or noncompliance with any Environmental Laws by the
Company or any Company Subsidiary or for which any of them is responsible, and
there is no pending or, to the Company's knowledge, threatened Environmental
Claim, except where such communication, notice or Environmental Claim could not
reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect; and (c) to the Company's knowledge, there are no past
or present facts or circumstances that could form the basis of any Environmental
Claim against the Company or any Company Subsidiary or against any person or
entity whose liability for any Environmental Claim the Company or any Company
Subsidiary has retained or assumed either contractually or by operation of law,
except where such Environmental Claim, if made, could not reasonably be expected
to, individually or in the aggregate, have a Company Material Adverse Effect.
Section 3.16 Intellectual Property. Except as could not,
---------------------
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, (i) either the Company or a Company Subsidiary owns, or
is licensed or otherwise possesses legally enforceable rights to use the Company
Intellectual Property, (ii) to the Company's knowledge, the conduct of the
business of the Company and the Company Subsidiaries with the Company
Intellectual Property does not infringe any Intellectual Property rights or any
other proprietary right of any Person, and neither the Company nor any Company
Subsidiary has received any written notice from any other Person pertaining to
or challenging the right of the Company or any Company Subsidiary to use any of
the Company Intellectual Property, and (iii) neither the Company nor any Company
Subsidiary has made any claim of a violation or infringement by others of its
rights to or in connection with the Company Intellectual Property which is still
pending.
Section 3.17 Compliance with Laws. The Company and its
--------------------
Subsidiaries are in compliance with each applicable law, rule or regulation of
any United States federal, state, local, or foreign government or agency thereof
which affects the business, properties or assets of the Company and its
Subsidiaries, and no notice, charge, claim, action or assertion has been
received by the Company or any Company Subsidiary or has been filed, commenced
or, to the Company's knowledge, threatened against the Company or any Company
Subsidiary alleging any such violation, except for any matter otherwise covered
by this sentence which could not reasonably be expected to, individually or in
the aggregate, have a Company Material Adverse Effect. All licenses, permits
and approvals required under such laws, rules and regulations are in full force
and effect, and the Company is in compliance with the terms thereof, except
where the failure to be in full force and
18
effect or to be in such compliance could not reasonably be expected to,
individually or in the aggregate, have a Company Material Adverse Effect.
Section 3.18 Labor Difficulties. (a) There is no unfair labor
------------------
practice complaint against the Company or any Company Subsidiary pending before
the National Labor Relations Board, except for any occurrence that individually
or in the aggregate could not reasonably be expected to have a Company Material
Adverse Effect; (b) there is no labor strike, dispute, slowdown or stoppage
actually pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Company Subsidiary, except where such strike,
dispute, slowdown or stoppage could not reasonably be expected to have a Company
Material Adverse Effect; (c) to the Company's knowledge, there is no
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of the Company and its Subsidiaries; and
(d) no grievance which might have, individually or in the aggregate, a Company
Material Adverse Effect, arising out of or under collective bargaining
agreements is pending.
Section 3.19 Information to be Supplied. None of the information
--------------------------
to be supplied by the Company specifically for inclusion or incorporation by
reference (i) in the registration statement on Form F-4 or on Form F-6 to be
filed with the SEC by Parent in connection with the issuance of Parent ADSs in
the Merger (the "Registration Statement") will, at the time the Registration
Statement becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
in any filing by Parent or Merger Sub with the Finnish Financial Supervision or
the HSE in respect of the Merger (including, without limitation, any listing
particulars under the Securities Market Act of 1989, as amended (the "Market
Act"), Chapter 2, Section 3 relating to Parent Ordinary Shares (the "Listing
Particulars") and any shareholder circular to be distributed to the shareholders
of Parent) (together with any amendments or supplements thereto, the "Parent
Disclosure Documents"), or (iii) in the Proxy Statement will, at the date it is
first mailed to the Company's shareholders or at the time of the Company
Shareholder Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations hereunder and all applicable state laws, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent specifically for inclusion or incorporation by reference in the Proxy
Statement.
Section 3.20 Opinion of Financial Advisor. The Company has
----------------------------
received the opinion of its investment advisor, Pacific Crest Securities Inc.,
dated the date hereof, to the effect that, as of such date, the Exchange Ratio
is fair to the Company's shareholders from a financial point of view, and a copy
of such opinion has been provided to the Parent.
19
Section 3.21 Brokers or Finders. No agent, broker, investment
------------------
banker, financial advisor or other firm or Person acting on behalf of the
Company is or will be entitled to any brokers' or finder's fee or any other
commission or similar fee in connection with any of the Transactions except for
Pacific-Crest Securities, Inc.
Section 3.22 Company Agreements. Except as set forth in the
------------------
Company SEC Documents or as permitted pursuant to this Agreement, neither the
Company nor any of its Subsidiaries is a party to or bound by (i) any agreement
relating to the incurring of indebtedness (including sale and leaseback and
capitalized lease transactions and other similar financing transactions)
providing for payment or repayment in excess of $500,000, (ii) any "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC) or (iii) any non-competition agreement which purports to limit in any
material respect the manner in which, or the localities in which, all or any
portion of the business of the Company and its Subsidiaries, taken as a whole,
is or would be conducted (collectively, the "Company Agreements").
Section 3.23 Interested Party Transactions. To the Company's
-----------------------------
knowledge, since the Company's proxy statement dated June 7, 1999, no event has
occurred that would be required to be reported as a "Certain Relationship" or
"Related Transaction" pursuant to Item 404 of Regulation S-K promulgated by the
SEC.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Except as set forth in the Parent Disclosure Schedule prepared and
signed by the Parent and delivered to the Company simultaneously with the
execution hereof, the Parent represents and warrants to the Company that all of
the statements contained in this Article IV are true and correct as of the date
----------
of this Agreement (or, if made as of a specified date, as of such date). Each
exception set forth in the Parent Disclosure Schedule is identified by reference
to a specific section of this Agreement and, except as otherwise specifically
stated with respect to such exception, relates only to such section.
Section 4.1 Organization; Qualification; Charter Documents. (a)
----------------------------------------------
Each of Parent and Merger Sub (i) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation; (ii) has full corporate power and authority to carry on its
business as it is now being conducted and to own, lease and operate the
properties and assets it now owns, leases or operates or purports to own, lease
or operate; and (iii) is duly qualified or licensed to do business as a foreign
corporation in good standing in every jurisdiction in which ownership of
property or the conduct of its business requires such qualification, except
where the failure to have such power and authority or to be so qualified,
licensed or in good standing could not reasonably be expected to, individually
or in the aggregate, have a Parent Material Adverse Effect.
20
(b) Parent has heretofore delivered or made available to the Company
complete and correct copies of the Charter Documents of Parent and each Parent
Subsidiary, as amended to date. All such Charter Documents are in full force
and effect, and neither Parent nor any Parent Subsidiary is in violation of any
provision of its respective Charter Documents except for breaches which would
not materially restrict the ability of Parent to consummate the Merger or could
not reasonably be expected to have a Parent Material Adverse Effect.
Section 4.2 Subsidiaries and Affiliates. The Parent Disclosure
---------------------------
Schedule sets forth the name and jurisdiction of incorporation of each Parent
Subsidiary and the jurisdictions in which each Parent Subsidiary is qualified to
do business. The Parent does not own, directly or indirectly, any capital stock
or other equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for any equity or similar interest in, any
corporation or have any direct or indirect equity or ownership interest in any
business other than publicly traded securities constituting less than one
percent of the outstanding equity of the issuing entity. All the outstanding
capital stock of each Parent Subsidiary is owned directly or indirectly by the
Parent free and clear of all Liens, and is validly issued, fully paid and non-
assessable, and there are no outstanding options, rights or agreements of any
kind relating to the issuance, sale or transfer of any capital stock or other
equity securities of any such Parent Subsidiary to any person except the Parent.
Each Parent Subsidiary (i) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation; (ii) has
full corporate power and authority to carry on its business as it is now being
conducted and to own the properties and assets it now owns; and (iii) is duly
qualified or licensed to do business as a foreign corporation in good standing
in every jurisdiction in which ownership of property or the conduct of its
business requires such qualification, except where the failure to have such
power and authority or to be so qualified, licensed or in good standing could
not reasonably be expected to, individually or in the aggregate, have a Parent
Material Adverse Effect.
Section 4.3 Capitalization. (a) The authorized capital stock of
--------------
the Parent consists of 160,000,000 Parent Ordinary Shares and 25,000,000
Series K Shares. As of the date hereof, (i) 39,200,000 Parent Ordinary Shares
are issued and outstanding, (ii) no Parent Ordinary Shares are held in the
treasury of the Parent or held by any Subsidiary of Parent, (iii) 7,200,000
Series K Shares are issued and outstanding, and (iv) 1,200,000 Parent Ordinary
Shares are issuable under the Parent's 1999 Warrant Plan. Immediately after the
Effective Time as contemplated by the Conversion Agreement, no Series K Shares
will be outstanding. All the outstanding shares of the Parent's capital stock
are, and all Parent Ordinary Shares which may be issued pursuant to the exercise
of outstanding Parent Options or upon conversion of Series K Shares into Parent
Ordinary Shares will be, when issued in accordance with the respective terms
thereof, duly authorized, validly issued, fully paid and non-assessable and,
except as set forth on the Parent Disclosure Schedule, are free of any pre-
emptive or other similar rights. There is no Voting Debt of the Parent or any
Parent Subsidiary issued and outstanding. Except as set forth above and except
for the Transactions, as of the date hereof, (i) there are no shares of capital
stock of the Parent authorized, issued or outstanding; (ii) except for warrants
issued under the 1999 Warrant Plan, or as expressly contemplated by this
21
Agreement, there are no existing options, warrants, calls, preemptive rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character, relating to the issued or unissued capital stock of the Parent or any
Parent Subsidiary, obligating the Parent or any Parent Subsidiary to issue,
transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Voting Debt of, or other equity interest in, the Parent or any
Parent Subsidiary or securities convertible into or exchangeable for such shares
or equity interests, or obligating the Parent or any Parent Subsidiary to grant,
extend or enter into any such option, warrant, call, subscription or other
right, agreement, arrangement or commitment and (iii) there are no outstanding
obligations (contingent or otherwise) of the Parent or any Parent Subsidiary to
repurchase, redeem or otherwise acquire any Parent Ordinary Shares, the Series K
Shares, or the other capital stock of the Parent, or any Parent Subsidiary or
Affiliate of the Parent.
(b) Except as expressly contemplated by this Agreement, there are no voting
trusts or other agreements or understandings to which the Parent or any Parent
Subsidiary is a party with respect to the voting of the capital stock of the
Parent or any of the Parent Subsidiaries.
(c) The Parent Ordinary Shares underlying the Parent ADSs to be issued as
part of the Merger Consideration, when issued and delivered in accordance with
the terms of this Agreement, will have been duly authorized, validly issued,
fully paid and non-assessable and will be free of any preemptive or other
similar rights, except as set forth on the Parent Disclosure Schedule.
Section 4.4 Authorization; Validity of Agreement; Necessary Action.
------------------------------------------------------
Each of Parent and Merger Sub has full corporate power and authority to execute
and deliver this Agreement and, with respect to Parent, subject in the case of
consummation of the Merger to obtaining the Parent Shareholder Approval, to
consummate the Transactions. The execution, delivery and performance by Parent
and Merger Sub of this Agreement and the consummation of the Merger and the
Transactions have been duly and validly authorized by the Boards of Directors of
Parent and Merger Sub, and by Parent as the sole shareholder of Merger Sub, and
no other corporate action on the part of Parent and Merger Sub is necessary to
authorize the execution and delivery by Parent and Merger Sub of this Agreement
or, except with respect to Parent for obtaining the Parent Shareholder Approval
and the filing of merger documents as set forth herein, the consummation of the
Transactions. This Agreement has been duly executed and delivered by Parent and
Merger Sub, and, assuming due and valid authorization, execution and delivery
hereof by the Company, is a valid and binding obligation of each of Parent and
Merger Sub, enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium and other similar laws
relating to creditors' rights and general principles of equity.
Section 4.5 Board Approvals; Takeover Statutes. The Parent Board
----------------------------------
of Directors, at a meeting duly called and held, has (i) unanimously determined
that each of the Agreement and the Merger are in the best interests of the
Parent and its shareholders, (ii) adopted this Agreement and approved the Merger
and the other Transactions, and (iii) resolved to recommend that the
shareholders of the Parent approve this Agreement and the Merger, and none of
the aforesaid actions
22
by the Parent Board of Directors has been amended, rescinded or modified. To the
knowledge of Parent, no Finnish takeover statute is applicable to the Merger or
the other Transactions.
Section 4.6 Vote Required. The affirmative vote of the holders of
-------------
two-thirds of the Parent Ordinary Shares and the Series K Shares, voting as a
single class, represented at a meeting of shareholders of Parent is the only
vote of the holders of any class or series of the Parent's capital stock
necessary to adopt this Agreement and approve the Merger and the other
Transactions.
Section 4.7 Consents and Approvals; No Violations. Except for the
-------------------------------------
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, the HSR Act, Non-
U.S. Monopoly Laws, Finnish corporation law, the Finnish Companies Act and
Finnish and other securities law, the MBCA and the DGCL, none of the execution,
delivery or performance of this Agreement by Parent or Merger Sub or the
consummation by Parent or Merger Sub of the Transactions will (i) conflict with
or result in any breach of any provision of the respective articles of
association or bylaws or similar organizational documents of Parent or Merger
Sub, (ii) require any filing with, or permit, authorization, consent or approval
of, any Governmental Entity, (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
Parent, or any of its Subsidiaries or Merger Sub is a party or by which any of
them or any of their respective properties or assets may be bound, or (iv)
violate any Order, statute, rule or regulation applicable to Parent, any of its
Subsidiaries or any of their properties or assets, except, with respect to the
foregoing clauses (ii), (iii) and (iv), as could not reasonably be expected to,
individually or in the aggregate, have a Parent Material Adverse Effect. There
are no third party consents or approvals required to be obtained under the
Parent Agreements prior to the consummation of the Transactions, except where
the failure to obtain such consents or approvals could not reasonably be
expected to, individually or in the aggregate, have a Parent Material Adverse
Effect.
Section 4.8 Parent Public Reports and Financial Statements. The
----------------------------------------------
Parent has filed, and has heretofore made available to the Company, true and
complete copies of, all reports, filings, registration statements and other
documents required to be filed by it with the HSE, the Finnish Trade Registry,
the Finnish Financial Supervision and the Decision of the Ministry of Finance
since March 23, 1999. As of their respective dates or, if amended, as of the
date of the last such amendment filed prior to the date hereof, the Parent
Public Reports, including, without limitation, any financial statements or
schedules included therein (a) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading and (b) complied as to
form in all material respects with the applicable requirements of the Finnish
Companies Act and the Market Act, as the case may be, and the applicable rules
and regulations of the HSE and the Finnish Trade Registry. None of the Parent
Subsidiaries is required to file any forms, reports or other documents with the
Finnish Trade Registry or the Finnish
23
Financial Supervision or under the Market Act or the Finnish Companies Act. The
Parent Financial Statements have been prepared from, and are in accordance with,
the books and records of the Parent and its consolidated Subsidiaries, comply in
all material respects with applicable accounting requirements and with the
published rules and regulations of the HSE, the Market Act and the Finnish
Companies Act with respect thereto, have been prepared in accordance with
Finnish GAAP applied on a consistent basis during the period involved (except as
may be stated in the notes thereto) and fairly present in all material respects
the consolidated financial position and the consolidated results of operations
and cash flows (and changes in financial position, if any) of the Parent and its
consolidated Subsidiaries as of the times and for the periods referred to
therein.
Section 4.9 No Undisclosed Liabilities. Except (a) as disclosed in
--------------------------
the Parent Financial Statements, (b) for liabilities and obligations incurred in
the ordinary course of business and consistent with past practice since the
Parent Balance Sheet Date pursuant to the terms of this Agreement, or (c)
incurred pursuant to, or in furtherance of, this Agreement or the Transactions,
neither the Parent nor any Parent Subsidiary has any liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise, which could
reasonably be expected to, individually or in the aggregate, have a Parent
Material Adverse Effect.
Section 4.10 Absence of Certain Changes. Since the Parent Balance
--------------------------
Sheet Date, except as disclosed in the Parent Public Reports filed prior to the
date hereof, (i) the Parent and each Parent Subsidiary has conducted its
respective business only in the ordinary and usual course, (ii) there have not
occurred any events, changes, effects or circumstances (including the incurrence
of any liabilities of any nature, whether or not accrued, contingent or
otherwise) having or which could reasonably be expected to, individually or in
the aggregate, have a Parent Material Adverse Effect, and (iii) there has not
been (1) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of
Parent's capital stock except as set forth on the Parent Disclosure Schedule,
(2) any split, combination or reclassification of any of Parent's capital stock
or any issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of Parent's capital stock,
except for issuances of Parent Ordinary Shares upon the exercise of Parent
Options awarded prior to the date hereof, (3) (A) any granting by Parent or any
of its Subsidiaries to any current or former director, executive officer or
other key employee of Parent or its Subsidiaries of any increase in
compensation, bonus or other benefits, except for normal increases in the
ordinary course of business or as was required under any employment agreements
in effect as of the date of the date hereof, (B) any granting by Parent or any
of its Subsidiaries to any such current or former director, executive officer or
key employee of any increase in severance or termination pay, except in the
ordinary course of business, or (C) any entry by Parent or any of its
Subsidiaries into, or any amendment of, any employment, deferred compensation,
consulting, severance, termination or indemnification agreement with any such
current or former director, executive officer or key employee, other than in the
ordinary course of business, (4) except insofar as may have been disclosed in
Parent Public Reports or required by a change in Finnish GAAP, any change in
accounting methods, principles or practices by Parent materially affecting its
assets, liabilities or business or (5) except insofar as may have been disclosed
24
in Parent Public Reports, any tax election that individually or in the aggregate
would reasonably be expected to have a Parent Material Adverse Effect on Parent
or any of its tax attributes or any settlement or compromise of any income tax
liability.
Section 4.11 Litigation. There is no action, suit, or proceeding
----------
by or before any court or governmental or other regulatory or administrative
agency or commission pending or, to the best knowledge of the Parent, threatened
against or involving the Parent or any Parent Subsidiary, or which questions or
challenges the validity of this Agreement or any action taken or to be taken by
the Parent or any Parent Subsidiary pursuant to this Agreement or in connection
with the Transactions, other than, in each case, the outcome of which,
individually or in the aggregate, would not (i) reasonably be expected to have a
Parent Material Adverse Effect, or (ii) reasonably be expected to materially
impair or delay the ability of the Company to perform its obligations under this
Agreement.
Section 4.12 Tax Matters; Government Benefits.
--------------------------------
(a) The Parent and each of its Subsidiaries have filed all Tax
Returns that are required to be filed by the Parent and its Subsidiaries, and
all such Tax Returns are complete and correct in all material respects, or
requests for extensions to file such returns or reports have been timely filed,
granted and have not expired, except to the extent that such failure to file, to
be complete or correct or to have extensions granted that remain in effect
individually or in the aggregate would not reasonably be expected to have a
Parent Material Adverse Effect. The Parent and each of its Subsidiaries have
duly paid or caused to be duly paid in full or made provision in accordance with
Finnish GAAP (or there has been paid or provision has been made on their behalf)
for the payment of all Taxes shown as due on such Tax Returns.
(b) No notification has been received by the Parent or by any
Parent Subsidiary that an audit, examination or other proceeding is pending or,
to the Parent's knowledge, threatened with respect to any Taxes due from or with
respect to or attributable to the Parent or any Parent Subsidiary or any Tax
Return filed by or with respect to the Parent or any Parent Subsidiary where
there is a reasonable possibility of a materially adverse determination.
(c) Neither the Parent nor any of its Subsidiaries has taken any
action or knows of any fact, agreement, plan or other circumstance that is
reasonably likely to prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
Section 4.13 Title to Properties; Encumbrances. Each of the Parent
---------------------------------
and the Parent Subsidiaries has good and valid title to, or has valid leasehold
interests in or valid rights under contract to use, all the tangible properties
and assets which it purports to own or use, including, without limitation, all
the tangible properties and assets reflected in the Parent Balance Sheet (except
for properties and assets disposed of since the date of the Parent Balance Sheet
in the ordinary course of business consistent with past practice), in each case,
free and clear of all title defects or objections,
25
liens, claims, charges, security interests or other encumbrances of any nature
whatsoever except, with respect to all such properties and assets, for (a) liens
shown on the Parent Balance Sheet as securing specified liabilities or
obligations and liens incurred in connection with the purchase of property
and/or assets, if such purchase was effected after the date of the Parent
Balance Sheet, with respect to which no default exists; (b) minor imperfections
of title, if any, none of which are substantial in amount, materially detract
from the value or impair the use of the property subject thereto, or impair the
operations of the Parent or any Parent Subsidiary and which have arisen only in
the ordinary course of business and consistent with past practice since the date
of the Parent Balance Sheet; (c) liens for current taxes not yet due; and (d)
such title defects or objections, liens, claims, charges, security interests or
other encumbrances of any nature whatsoever, if any, as individually or in the
aggregate could not reasonably be expected to have a Parent Material Adverse
Effect.
Section 4.14 Environmental Laws. Except as disclosed in the Parent
------------------
Public Reports (a) the Parent and each Parent Subsidiary are in compliance with
all Environmental Laws, including, but not limited to, compliance with any
permits or other governmental authorizations or the terms and conditions
thereof, except in the case of the matters covered by this sentence where the
failure to be in compliance with such laws could not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect; (b)
in the past five (5) years neither the Parent nor any Parent Subsidiary has
received any communication or notice, whether from a governmental authority or
otherwise, alleging any violation of or noncompliance with any Environmental
Laws by the Parent or any Parent Subsidiary or for which any of them is
responsible, and there is no pending or, to the Parent's knowledge, threatened
Environmental Claim, except where such communication, notice or Environmental
Claim could not reasonably be expected to, individually or in the aggregate,
have a Parent Material Adverse Effect; and (c) to the Parent's knowledge, there
are no past or present facts or circumstances that could form the basis of any
Environmental Claim against the Parent or any Parent Subsidiary or against any
person or entity whose liability for any Environmental Claim the Parent or any
Parent Subsidiary has retained or assumed either contractually or by operation
of law, except where such Environmental Claim, if made, could not reasonably be
expected to, individually or in the aggregate, have a Parent Material Adverse
Effect.
Section 4.15 Intellectual Property. Except as could not,
---------------------
individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect, (i) either the Parent or a Parent Subsidiary owns, or
is licensed or otherwise possesses legally enforceable rights to use the Parent
Intellectual Property, (ii) to the Parent's knowledge, the conduct of the
business of the Parent and the Parent Subsidiaries with the Parent Intellectual
Property does not infringe any Intellectual Property rights or any other
proprietary right of any Person, and neither the Parent nor any Parent
Subsidiary has received any written notice from any other Person pertaining to
or challenging the right of the Parent or any Parent Subsidiary to use any of
the Parent Intellectual Property, and (iii) neither the Parent nor any Parent
Subsidiary has made any claim of a violation or infringement by others of its
rights to or in connection with the Parent Intellectual Property which is still
pending.
26
Section 4.16 Compliance with Laws. The Parent and its Subsidiaries
--------------------
are in compliance with each applicable law, rule or regulation of any United
States federal, state, local, Finnish, or other foreign government or agency
thereof which affects the business, properties or assets of the Parent and its
Subsidiaries, and no notice, charge, claim, action or assertion has been
received by the Parent or any Parent Subsidiary or has been filed, commenced or,
to the Parent's knowledge, threatened against the Parent or any Parent
Subsidiary alleging any such violation, except for any matter otherwise covered
by this sentence which could not reasonably be expected to, individually or in
the aggregate, have a Parent Material Adverse Effect. All licenses, permits and
approvals required under such laws, rules and regulations are in full force and
effect, and each of Parent and its Subsidiaries is in compliance with the terms
thereof, except where the failure to be in full force and effect or to be in
such compliance could not reasonably be expected to, individually or in the
aggregate, have a Parent Material Adverse Effect.
Section 4.17 Labor Difficulties. (a) There is no unfair labor
------------------
practice complaint against the Parent or any Parent Subsidiary pending before
any Finnish governmental or administrative agency, except for any occurrence
that individually or in the aggregate could not reasonably be expected to have a
Parent Material Adverse Effect; (b) there is no labor strike, dispute, slowdown
or stoppage actually pending or, to the knowledge of Parent, threatened against
or affecting the Parent or any Parent Subsidiary, except where such strike,
dispute, slowdown or stoppage could not reasonably be expected to have a Parent
Material Adverse Effect; (d) to the Parent's knowledge, there is no
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of the Parent and its Subsidiaries; and
(e) no grievance which might have, individually or in the aggregate, a Parent
Material Adverse Effect, arising out of or under collective bargaining
agreements is pending.
Section 4.18 Information to be Supplied. (a) None of the information
--------------------------
supplied or to be supplied by Parent specifically for inclusion or incorporation
by reference in (i) the Registration Statement will, at the time the
Registration Statement becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
or (ii) the Proxy Statement will, at the date it is first mailed to the
Company's shareholders or at the time of the Company Shareholder Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Registration Statement and the Proxy Statement will comply as
to form in all material respects with the requirements of the Securities Act and
the Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by Parent with respect to statements made or
incorporated by reference therein based on information supplied by the Company
specifically for inclusion or incorporation by reference in the Registration
Statement or the Proxy Statement.
(b) The Parent Disclosure Documents will, at all relevant times,
include all information relating to Parent and its Subsidiaries which is
required to enable the Parent Disclosure
27
Documents and the parties hereto to comply in all material respects with all
Finnish statutory and other legal and regulatory provisions (including, without
limitation, the Market Act and the rules and regulations made thereunder, and
the rules and requirements of the HSE) and all such information contained in
such documents will, as of the date of such filing, be in all material respects,
in accordance with the facts and will not omit anything materially likely to
affect the import of such information.
(c) Notwithstanding the foregoing provisions of this Section, no
representation or warranty is made by Parent with respect to statements made or
incorporated by reference in the Registration Statement or the Listing
Particulars based on information supplied by the Company expressly for inclusion
or incorporation by reference therein.
Section 4.19 Merger Sub's Operations. Merger Sub was formed
-----------------------
solely for the purpose of engaging in the Transactions and has not engaged in
any business activities or conducted any operations other than in connection
with the Transactions.
Section 4.20 Brokers or Finders. No agent, broker, investment
------------------
banker, financial advisor or other firm or Person acting on behalf of Parent or
Merger Sub is or will be entitled to any brokers' or finders' fee or any other
commission or similar fee in connection with any of the Transactions, except
Conventum Corporate Finance Oy.
Section 4.21 Parent Agreements. Except as set forth in the Parent
-----------------
Public Reports or as permitted pursuant to this Agreement, neither the Parent
nor any of its Subsidiaries is a party to or bound by (i) any agreement relating
to the incurring of indebtedness (including sale and leaseback and capitalized
lease transactions and other similar financing transactions) providing for
payment or repayment in excess of $500,000, (ii) any "material contract" (as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC, exclusive
of any compensation agreements which would otherwise be included in such term
with respect to a U.S. registrant) or (iii) any non-competition agreement which
purports to limit in any material respect the manner in which, or the localities
in which, all or any portion of the business of the Parent and its Subsidiaries,
taken as a whole is conducted (collectively, the "Parent Agreements").
Section 4.22 Interested Party Transactions. Section 4.22 of the
-----------------------------
Parent Disclosure Schedule sets forth a description of any event that, to
Parent's Knowledge, exists or has occurred since January 1, 1999 that would be
required to be reported as a "Certain Relationship" or "Related Transaction"
pursuant to Item 404 of Regulation S-K promulgated by the SEC, assuming, for
purposes of this section only, that the Parent was and is subject to the
reporting requirements of the Securities Act and the Exchange Act.
Section 4.23 Opinion of Financial Advisor. The Parent has received
----------------------------
the opinion of its investment advisor, Conventum Corporate Finance Oy, dated the
date hereof, to the effect that, as of such date, the Exchange Ratio is
recommended to the Parent from a financial point of view,
28
and a copy of such opinion has been provided to the Company.
Section 4.24 Accounting Matters. The Parent has (a) engaged
------------------
independent public accountants to advise it on the qualification of the Merger
for "pooling of interests" accounting under Finnish GAAP, (b) consulted with
such accountants concerning the requirements therefor, and (c) disclosed to such
accountants all actions taken by it or its Subsidiaries that it, in each case,
reasonably believes, based on such consultations, are likely to affect the
accounting of the business combination to be effected by the Merger as a pooling
of interests. As of the date hereof and based upon consultation with its
accountants, the Parent reasonably believes that the Merger will qualify for
"pooling of interests" accounting under Finnish GAAP.
ARTICLE V
COVENANTS
Section 5.1 Conduct of the Business of Company.
----------------------------------
The Company agrees that, except as set forth in the Company Disclosure
Schedule, or as permitted, required or specifically contemplated by, or
otherwise described in, this Agreement or otherwise consented to or approved in
writing by Parent (which consent or approval shall not be unreasonably withheld
or delayed), during the period commencing on the date hereof until the earlier
of the termination of this Agreement or the Effective Time:
(a) the Company and each of its Subsidiaries shall conduct their
respective operations in all material respects only according to their ordinary
and usual course of business consistent with past practice and shall use their
reasonable best efforts to preserve intact their respective business
organization, keep available the services of their officers, employees and
consultants and maintain satisfactory relationships with licensors, suppliers,
distributors, clients, joint venture partners and others having significant
business relationships with them;
(b) by way of illustration and not limitation, neither the Company
nor any of its Subsidiaries shall:
(i) make any change in or amendment to the Company's
Charter Documents or increase the number of members on the Company Board of
Directors beyond a total of eight members;
(ii) issue, sell, pledge, dispose of or encumber, or
authorize to issue or sell, pledge, dispose of or encumber, any shares of its
capital stock or any other securities, or issue or sell, or authorize to issue
or sell, any securities convertible into, or options, warrants, convertible
securities or other rights to purchase or subscribe to, or enter into any
arrangement or contract with respect to the issuance or sale of, any shares of
its capital stock or any other securities, or make any
29
other changes in its capital structure, other than (i) the issuance of Shares
upon the exercise of Company Options outstanding on the date hereof, in
accordance with their present terms or (ii) issuances by a wholly-owned
Subsidiary of the Company of capital stock to such Subsidiary's parent, the
Company or another wholly-owned Subsidiary of the Company.
(iii) declare, pay or set aside any dividend or other
distribution (whether in cash, stock or property or any combination thereof) or
payment with respect to, or split, combine, redeem or reclassify, or purchase or
otherwise acquire, any shares of its capital stock or its other securities,
other than dividends payable by a wholly-owned Subsidiary of the Company to the
Company or another wholly-owned Subsidiary of the Company;
(iv) other than in connection with transactions permitted
by Section 5.1(b)(v), incur any capital expenditures or any obligations or
-----------------
liabilities in respect thereof, except for those (A) contemplated by the capital
expenditure budgets for the Company and its Subsidiaries made available to
Parent prior to the date hereof, (B) incurred in the ordinary course of business
of the Company and its Subsidiaries or (C) not otherwise described in clauses
(A) and (B) which, as to this subsection (C), do not exceed $1,000,000 in the
--------------
aggregate;
(v) acquire (whether pursuant to merger, stock or asset
purchase or otherwise) in one transaction or series of related transactions (A)
any assets (including any equity interests) having a fair market value in excess
of $1,000,000, in the aggregate, other than acquisitions of inventory in the
ordinary course of business consistent with past practice, or (B) all or
substantially all of the equity interests of any Person or any business or
division of any Person having a fair market value in excess of $1,000,000, in
the aggregate;
(vi) (A) grant any options under the Company Stock Plans or
otherwise grant any Company Option or Company Award, or (B) establish, adopt,
enter into or amend any bonus, profit sharing or similar plan, agreement, trust,
fund, policy or arrangement, or (C) except in the ordinary course of business
consistent with past practice and except to the extent required under existing
employee and director benefit plans, agreements or arrangements as in effect on
the date of this Agreement, increase the compensation or fringe benefits of any
of its directors, officers or employees or grant any severance or termination
pay not currently required to be paid under existing severance plans or enter
into any employment, consulting or severance agreement or arrangement with any
present, former or prospective director, officer or other employee of the
Company or any of its Subsidiaries, or establish, adopt, enter into or amend in
any material respect or terminate any collective bargaining, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any directors, officers or
employees, except as may be required by law;
(vii) transfer, lease, license, guarantee, sell, mortgage,
pledge, renovate, rehabilitate, dispose of, encumber or subject to any Lien, any
assets of the Company or any of its
30
Subsidiaries except for (A) sales of assets or Liens made or granted in the
ordinary course of business, and (B) sales of assets which are not, individually
or in the aggregate, material to the Company and its Subsidiaries, taken as a
whole);
(viii) except as required by applicable law or U.S. GAAP and after
notice to Parent, take any action to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue recognition,
payments of accounts payable and collection of accounts receivable);
(ix) adopt or enter into a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries (other than the Merger)
or any agreement relating to a Company Acquisition Proposal, except as provided
for in Section 7.1(c)(iv);
------------------
(x) (A) incur any material indebtedness for borrowed money, issue
any debt securities, or assume or guarantee any such indebtedness of another
Person (other than indebtedness owing to or guarantees of indebtedness owing to
the Company or any direct or indirect wholly-owned Subsidiary of the Company) or
endorse or otherwise become responsible for the obligations of any Person or (B)
make any loans or advances to any other Person, other than to the Company or to
any direct or indirect wholly-owned Subsidiary of the Company, except, in the
case of clause (A), for borrowings (1) in the ordinary course of business
consistent with past practice, including without limitation borrowings under
existing credit facilities in the ordinary course of business consistent with
past practice, (2) in connection with the Transactions, or (3) in connection
with financing activities relating to activities described in Section 5.1(b) of
--------------
the Company Disclosure Schedule;
(xi) accelerate the payment, right to payment or vesting of any
bonus, severance, profit sharing, retirement, deferred compensation, stock
option (including any options issued pursuant to the Company Stock Plans or
under any Company Award), insurance or other compensation or benefits, or amend
the terms or change the period of exercisability of, purchase, repurchase,
redeem or otherwise acquire, or permit any Subsidiary to amend the terms or
change the period of exercisability of, purchase, repurchase, redeem or
otherwise acquire, any of its securities or any securities of its subsidiaries,
including, without limitation, Shares, or any option, warrant or right, directly
or indirectly, to acquire any such securities;
(xii) settle, pay or discharge any claim, suit or other action
brought or threatened against the Company with respect to or arising out of a
shareholder's equity interest in the Company, or pay, discharge or satisfy any
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise) over $250,000, individually or in the aggregate, other
than the payment, discharge or satisfaction (A) of any such claims, liabilities
or obligations in the ordinary course of business and consistent with past
practice or (B) of claims, liabilities or obligations reflected or reserved
against in, or contemplated by, the consolidated financial statements
31
(or the notes thereto) contained in the Company SEC Documents; provided, in each
case, that any such settlement provides for a complete release of the Company
and its Subsidiaries and imposes no obligation on the Company or its
Subsidiaries other than the payment of money;
(xiii) enter into any agreement, understanding or commitment that
materially restrains, limits or impedes the Company's or any of its
Subsidiaries' ability to compete with or conduct any business or line of
business, including, but not limited to, geographic limitations on the Company's
or any of its Subsidiaries' activities;
(xiv) plan, announce, implement or effect any material reduction in
labor force, lay-off, early retirement program, severance program or other
program or effort concerning the termination of employment of employees of the
Company or its Subsidiaries, provided, however, that routine employee
terminations for cause shall not be considered subject to this clause (xiv);
(xv) knowingly take any action or fail to take any action which
action or failure to act would prevent, or would be reasonably likely to
prevent, the Merger from qualifying (A) for "pooling of interests" accounting
treatment under Finnish GAAP or (B) as a Section 368 Reorganization;
(xvi) take any action including, without limitation, the adoption of
any shareholder rights plan or amendments to its Certificate of Incorporation or
By-Laws (or comparable governing documents), which would, directly or
indirectly, restrict or impair the ability of Parent to vote, or otherwise to
exercise the rights and receive the benefits of a shareholder with respect to,
securities of the Company that may be acquired or controlled by Parent or Merger
Sub or permit any shareholder to acquire securities of the Company on a basis
not available to Parent or Merger Sub in the event that Parent or Merger Sub
were to acquire any shares of the Company Common Stock;
(xvii) materially modify, amend or terminate any material contract to
which it is a party or waive any of its material rights or claims except, in
each case, in the ordinary course of business consistent with past practice;
(xviii) make any tax election or settle or compromise any United
States federal, state, local or non-United States tax liability if the effect
thereof would be adverse in any material respect to the Company; or
(xix) agree, in writing or otherwise, to take any of the foregoing
actions.
Section 5.2 Conduct of the Business of Parent. The Parent agrees
---------------------------------
that, except as set forth in the Parent Disclosure Schedule, or as permitted,
required or specifically contemplated by, or otherwise described in, this
Agreement or otherwise consented to or approved in writing by the Company (which
consent or approval shall not be unreasonably withheld or delayed), during the
32
period commencing on the date hereof until the earlier of the termination of
this Agreement or the Effective Time:
(a) the Parent and each of its Subsidiaries shall conduct their
respective operations in all material respects only according to their ordinary
and usual course of business consistent with past practice and shall use their
reasonable best efforts to preserve intact their respective business
organization, keep available the services of their officers, employees and
consultants and maintain satisfactory relationships with licensors, suppliers,
distributors, clients, joint venture partners and others having significant
business relationships with them;
(b) by way of illustration and not limitation, neither the Parent nor
any of its Subsidiaries shall:
(i) except as contemplated in the Conversion Agreement, make
any change in or amendment to the Parent's articles of association, by-laws, or
similar organizational documents;
(ii) except pursuant to the terms of the Conversion Agreement,
issue, sell, pledge, dispose of or encumber, or authorize to issue or sell,
pledge, dispose of or encumber, any shares of its capital stock or any other
securities, or issue or sell, or authorize to issue or sell, any securities
convertible into, or options, warrants, convertible securities or other rights
to purchase or subscribe to, or enter into any arrangement or contract with
respect to the issuance or sale of, any shares of its capital stock or any other
securities, or make any other changes in its capital structure, other than (i)
the issuance of Parent Ordinary Shares upon the exercise of Parent Options
outstanding on the date hereof, in accordance with their present terms or (ii)
issuances by a wholly-owned Subsidiary of the Parent of capital stock to such
Subsidiary's parent, the Parent or another wholly-owned Subsidiary of the
Parent;
(iii) declare, pay or set aside any dividend or other
distribution (whether in cash, stock or property or any combination thereof) or
payment with respect to, or split, combine, redeem or reclassify, or purchase or
otherwise acquire, any shares of its capital stock or its other securities,
other than dividends payable by a wholly-owned Subsidiary of the Parent to the
Parent or another wholly-owned Subsidiary of the Parent;
(iv) other than in connection with transactions permitted by
Section 5.2(b)(v), incur any capital expenditures or any obligations or
-----------------
liabilities in respect thereof, except for those (A) contemplated by the capital
expenditure budgets for the Parent and its Subsidiaries made available to the
Company prior to the date hereof, (B) incurred in the ordinary course of
business of the Parent and its Subsidiaries, or (C) not otherwise described in
clauses (A) and (B) which, as to this subsection (C), in the aggregate, do not
--------------
exceed $1,000,000 in the aggregate;
(v) acquire (whether pursuant to merger, stock or asset
purchase or otherwise) in one transaction or series of related transactions (A)
any assets (including any equity
33
interests) having a fair market value in excess of $1,000,000, in the aggregate,
other than acquisition of inventory in the ordinary course of business
consistent with past practice, or (B) all or substantially all of the equity
interests of any Person or any business or division of any Person having a fair
market value in excess of $1,000,000, in the aggregate;
(vi) transfer, lease, license, guarantee, sell, mortgage,
pledge, renovate, rehabilitate, dispose of, encumber or subject to any Lien, any
assets of the Parent or any of its Subsidiaries (except for (A) sales of assets
or Liens made or granted in the ordinary course of business, (B) sales of assets
which are not, individually or in the aggregate, material to the Parent and its
Subsidiaries, taken as a whole, and mortgagees, pledgees and similar
encumbrances in connection with the Parent's financing activities consistent
with past practice and which could not reasonably be expected to result in a
Parent Material Adverse Effect;
(vii) adopt or enter into a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of the Parent or any of its Subsidiaries (other than the
Merger) or any agreement relating to a Parent Acquisition Proposal, except as
provided for in Section 7.1(b)(iv);
------------------
(viii) (A) incur any material indebtedness for borrowed money,
issue any debt securities, or assume or guarantee any such indebtedness of
another Person (other than indebtedness owing to or guarantees of indebtedness
owing to the Parent or any direct or indirect wholly-owned Subsidiary of the
Parent) or endorse or otherwise become responsible for the obligations of any
Person or (B) make any loans or advances to any other Person, other than to the
Parent or to any direct or indirect wholly-owned Subsidiary of the Parent,
except for borrowings (1) in the ordinary course of business consistent with
past practice, including without limitation borrowings under existing credit
facilities or for working capital, (2) in connection with the Transactions, (3)
in connection with financing relating to activities described in item 5.2(1),
(2) and (4) of the Parent Disclosure Schedule, and (4) which are not otherwise
described in subclauses (1), (2) or (3) of this clause (viii) and do not exceed
$10,000,000 in the aggregate;
(ix) accelerate the payment, right to payment or vesting of any
bonus, severance, profit sharing, retirement, deferred compensation, stock
option (including any options issued pursuant to the Parent 1999 Warrant Plan,
under any award (including restricted stock, deferred stock, phantom stock,
stock equivalent or stock unit) for capital stock of the Parent, or otherwise),
insurance or other compensation or benefits, or amend the terms or change the
period of exercisability of, purchase, repurchase, redeem or otherwise acquire,
or permit any Subsidiary to amend the terms or change the period of
exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its
securities or any securities of its subsidiaries, including, without limitation,
Parent Ordinary Shares, or any option, warrant or right, directly or indirectly,
to acquire any such securities;
(x) settle, pay or discharge any claim, suit or other action
brought or threatened against the Parent with respect to or arising out of a
shareholder's equity interest in the
34
Parent, or pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise) over
$250,000, individually or in the aggregate, other than the payment, discharge or
satisfaction (A) of any such claims, liabilities or obligations in the ordinary
course of business and consistent with past practice or (B) of claims,
liabilities or obligations reflected or reserved against in, or contemplated by,
the consolidated financial statements (or the notes thereto) contained in the
Parent Public Reports; provided, in each case, that any such settlement provides
for a complete release of the Parent and its Subsidiaries and imposes no
obligation on the Parent or its Subsidiaries other than the payment of money;
(xi) enter into any agreement, understanding or commitment that
materially restrains, limits or impedes the Parent's or any of its Subsidiaries'
ability to compete with or conduct any business or line of business, including,
but not limited to, geographic limitations on the Parent's or any of its
Subsidiaries' activities;
(xii) knowingly take any action or fail to take any action which
action or failure to act would prevent, or would be reasonably likely to
prevent, the Merger from qualifying (A) for "pooling of interests" accounting
treatment under Finnish GAAP or (B) as a Section 368 Reorganization;
(xiii) take any action including, without limitation, the
adoption of any shareholder rights plan or amendments to its articles of
association or bylaws (or comparable governing documents), which would, directly
or indirectly, restrict or impair the ability of the Company's shareholders to
vote, or otherwise to exercise the rights and receive the benefits of a
shareholder with respect to, securities of the Parent that may be acquired by
the Company's shareholders in the Merger;
(xiv) materially modify, amend or terminate any material
contract to which the Parent or any of its Subsidiaries is a party or waive any
of their material rights or claims except, in each case, in the ordinary course
of business consistent with past practice;
(xv) agree, in writing or otherwise, to take any of the
foregoing actions; or
(xvi) amend the Parent's 1999 Warrant Plan or any Parent Option.
Section 5.3 Company Shareholder Meeting; Parent Shareholder Meeting;
--------------------------------------------------------
Preparation of Proxy Statement/Prospectus.
-----------------------------------------
(a) The Company Shareholder Meeting. The Company, acting through
-------------------------------
its Board of Directors, shall, in accordance with applicable law, duly call,
convene and hold a meeting of the holders of the Shares (the "Company
Shareholder Meeting") as soon as reasonably practicable for the purpose of
voting upon the approval and adoption of this Agreement and the Merger, and the
Company agrees that this Agreement and the Merger shall be submitted at such
meeting. Except as
35
provided in Section 5.8: (i) the Company Board of Directors shall recommend
-----------
approval and adoption by its shareholders of this Agreement (the "Company
Recommendation"), and (ii) neither the Company's Board of Directors nor any
committee thereof shall amend, modify, withdraw, condition or qualify the
Company Recommendation in a manner adverse to Parent.
(b) Parent Shareholder Meeting. Parent, acting through its Board
--------------------------
of Directors, shall, in accordance with applicable law, duly call, convene and
hold a meeting of the holders of Parent Ordinary Shares (the "Parent Shareholder
Meeting") at approximately the same time as the Company Shareholder Meeting, but
in no event later than one (1) Business Day after such Company Shareholder
Meeting for the purpose of voting upon the Transactions, including the Merger
and the issuance of Parent Ordinary Shares hereunder and Parent agrees that this
Agreement and the issuance of Parent Ordinary Shares hereunder shall be
submitted at such meeting. Except as provided in Section 5.9: (i) Parent's Board
-----------
of Directors shall recommend approval by its shareholders of the Transactions,
including the issuance of Parent Ordinary Shares pursuant to the Merger and the
election of A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as a member of the Parent's Board of Directors
as contemplated by Section 5.14 (the "Parent Recommendation"), and (ii) neither
------------
Parent's Board of Directors nor any committee thereof shall amend, modify,
withdraw, condition or qualify the Parent Recommendation in a manner adverse to
the Company.
(c) Preparation of Registration Statement and Proxy
-----------------------------------------------
Statement/Prospectus. Promptly after the date hereof, Parent and the Company
--------------------
shall prepare and Parent shall file with the SEC the Registration Statement, in
which the Proxy Statement (which also shall be filed by the Company under
separate cover) and the Prospectus will be included. Each of the Company and
Parent shall use all reasonable efforts to have the Registration Statement
declared effective under the Securities Act as promptly as practicable after
such filing and to keep the Registration Statement effective as long as is
necessary to consummate the Merger. The Company shall mail the Proxy Statement
(including the Prospectus) to its shareholders as promptly as practicable after
the Registration Statement is declared effective under the Securities Act,
comply in all material respects with the proxy solicitation rules and
regulations under the Exchange Act in connection with the solicitation of such
shareholders and, if necessary, after the Proxy Statement shall have been so
mailed, promptly circulate amended, supplemental or supplemented proxy material,
and, if required in connection therewith, resolicit proxies. Parent shall also
take any action required to be taken under any applicable state securities or
blue sky laws in connection with the issuance of Parent ADSs in the Merger. No
filing of, or amendment or supplement to the Proxy Statement, the Prospectus or
the Registration Statement will be made by the Company or Parent without the
approval of the other party, which will not be unreasonably withheld or delayed.
Each party will advise the other party, promptly after it receives notice
thereof, of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of Parent ADSs issuable in connection with the
Merger for offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Proxy Statement, the Prospectus or the Registration Statement
or comments thereon and responses thereto or requests by the SEC for additional
information. If at any time prior to the Effective Time, the
36
Company or Parent discovers any information relating to either party, or any of
their respective Affiliates, officers or directors, that should be set forth in
an amendment or supplement to the Proxy Statement, the Prospectus or the
Registration Statement, so that such document would not include any misstatement
of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party that discovers such information shall promptly notify
the other parties hereto and an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and, to the extent
required by law or regulation, disseminated to the shareholders of the Company
and Parent.
(d) Preparation and Filing of Form F-6. Parent shall promptly
----------------------------------
prepare and cause the depositary under the Deposit Agreement to file with the
SEC a registration statement on Form F-6 (the "Form F-6") with respect to the
registration of the Parent ADSs under the Securities Act and use its reasonable
best efforts to have the Form F-6 declared effective as promptly as possible.
Section 5.4 Access.
------
(a) The Company shall (and shall cause each of its Subsidiaries
to) afford to the officers, employees, accountants, counsel and other
representatives of Parent, reasonable access during normal business hours during
the period prior to the Closing Date, to all its properties, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each of its Subsidiaries to) furnish promptly to the Parent (i) a copy of
each report, schedule, registration statement and other document filed or
received by it during such period pursuant to the requirements of federal
securities laws and (ii) all other information concerning its business,
properties and personnel as Parent may reasonably request for purposes
consistent with this Agreement and the Transactions contemplated hereby.
(b) The Parent shall (and shall cause each of its Subsidiaries to)
afford to the officers, employees, accountants, counsel and other
representatives of the Company, reasonable access during normal business hours
during the period prior to the Closing Date, to all its properties, books,
contracts, commitments and records and, during such period, the Parent shall
(and shall cause each of its Subsidiaries to) furnish promptly to the Company
(i) a copy of each report, schedule, registration statement and other document
filed or received by it during such period pursuant to the requirements of
federal securities laws, and (ii) all other information concerning its business,
properties and personnel as the Company may reasonably request for purposes
consistent with this Agreement and the Transactions contemplated hereby.
(c) Any investigation pursuant to this Section shall be conducted
in a manner which will not interfere unreasonably with the conduct of the
business of the other party.
Section 5.5 Confidentiality. Information concerning (a) the
---------------
Company and its Subsidiaries obtained by the Parent and Merger Sub and (b) the
Parent and its Subsidiaries obtained
37
by the Company and its Subsidiaries, in each case, through their respective
officers, employees, accountants, counsel and other representatives pursuant to
Section 5.4 or otherwise, shall be subject to the provisions of the
-----------
Confidentiality Agreement by and between the Company and Parent dated June 1,
2000 (the "Confidentiality Agreement"), the provisions of which shall continue
through the earlier of the Effective Time or two (2) years after the termination
of this Agreement, subject to all duties applicable to trade secrets.
Section 5.6 Reasonable Best Efforts.
-----------------------
(a) Prior to the Closing, upon the terms and subject to the
conditions of this Agreement, Parent, Merger Sub and the Company agree to use
their respective reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable (subject to any applicable laws) to consummate and make effective the
Merger and the other Transactions as promptly as practicable including, but not
limited to (i) the preparation and filing of all forms, registrations and
notices required to be filed to consummate the Merger and the other Transactions
and the taking of such actions as are necessary to obtain any requisite
approvals, consents, orders, exemptions or waivers by any third party or
Governmental Entity, and (ii) the satisfaction of that party's and the other
parties' conditions to Closing.
(b) Prior to the Closing, each party shall promptly consult with
the other parties hereto with respect to, provide any necessary information with
respect to, and provide the other parties (or their respective counsel) with
copies of, all filings made by such party with any Governmental Entity or any
other information supplied by such party to a Governmental Entity in connection
with this Agreement, the Merger and the other Transactions. Each party hereto
shall promptly inform the other of any communication from any Governmental
Entity regarding any of the Transactions. If any party hereto or Affiliate
thereof receives a request for additional information or documentary material
from any such Governmental Entity with respect to any of the Transactions, then
such party shall endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other parties, an
appropriate response in compliance with such request. To the extent that
transfers, amendments or modifications of permits (including environmental
permits) are required as a result of the execution of this Agreement or
consummation of any of the Transactions, each party shall use its reasonable
best efforts to effect such transfers, amendments or modifications.
(c) The Company and Parent shall file as soon as practicable
notifications under the HSR Act and respond as promptly as practicable to any
inquiries received from the Federal Trade Commission and the Antitrust Division
of the Department of Justice for additional information or documentation and
respond as promptly as practicable to all inquiries and requests received from
any State Attorney General or other Governmental Entity in connection with
antitrust matters. Concurrently with the filing of notifications under the HSR
Act or as soon thereafter as practicable, the Company and Parent shall each
request early termination of the HSR Act waiting period, and each shall use its
reasonable best efforts to take such action as may be required to cause the
38
expiration of the waiting period under the HSR Act or other Non-U.S. Monopoly
Laws with respect to the Transactions as promptly as practicable after the
execution of this Agreement. Each of the Company and the Parent shall use all
reasonable efforts to resolve such objections, if any, as may be asserted by any
Governmental Entity with respect to the Transactions under the HSR Act, the
▇▇▇▇▇▇▇ Act, as amended, the ▇▇▇▇▇▇▇ Act, as amended, the Federal Trade
Commission Act, as amended, and any Non-U.S. Monopoly Laws (collectively,
"Antitrust Laws"). In connection with the filings under the Antitrust Laws, if
any administrative or judicial action or proceeding is instituted (or threatened
to be instituted) challenging any Transaction as violative of any Antitrust Law,
each of Parent and the Company shall cooperate and use all reasonable efforts to
contest and resist any such action or proceeding and to have vacated, lifted,
reversed or overturned any Order, that is in effect and that prohibits, prevents
or restricts consummation of the Merger or any other Transactions, unless either
party, in good faith, determines that litigation is not in their respective best
interests. Notwithstanding the provisions of the immediately preceding sentence,
it is expressly understood and agreed that neither the Company nor Parent shall
have any obligation to litigate or contest any administrative or judicial action
or proceeding or any Order beyond the date of a ruling preliminarily enjoining
the Merger issued by a court of competent jurisdiction.
(d) Notwithstanding anything to the contrary in Section 5.6(a),
---------------
(b) or (c), (i) neither Parent nor any of its Subsidiaries shall be required to
---------------
divest or hold separate any of their respective businesses, product lines or
assets, or to take or agree to take any other action or agree to any limitation,
that could reasonably be expected to have a Parent Material Adverse Effect on
Parent or on Parent combined with the Company after the Effective Time, and (ii)
for purposes of this Section, neither the Company nor any of its Subsidiaries
shall be entitled to divest, nor shall it commit to divest, any of their
respective businesses, product lines or assets, or to take or agree to take any
other action or agree to any limitation, that could reasonably be expected to
have a Company Material Adverse Effect on the Company or on the Company combined
with the Parent after the Effective Time.
Section 5.7 Employee Stock Options. (a) As of the Effective Time
----------------------
(i) each outstanding Company Employee Stock Option, and any other Company Option
(together, the "Adjusted Options") shall be exchanged for an option to purchase
the number of Parent ADSs derived by multiplying the number of Shares subject to
such Company Employee Stock Option or other Company Option immediately prior to
the Effective Time by the Exchange Ratio (rounded to the nearest whole number of
Parent ADSs), at an exercise price per share equal to the exercise price for
each such Share subject to such option divided by the Exchange Ratio (rounded
down to the nearest whole cent), and all references in each such option to the
Company shall be deemed to refer to Parent, where appropriate, and (ii) Parent
shall assume the obligations of the Company under the Company Stock Plans. The
other terms of each Adjusted Option, and the plans under which they were issued,
shall continue to apply in accordance with their terms, subject to Section
-------
5.7(d).
------
(b) As of the Effective Time, each outstanding award (including
restricted stock, deferred stock, phantom stock, stock equivalents and stock
units) ("Company Award") under any
39
Company Stock Plan shall be exchanged for a similar instrument of Parent, in
each case with such adjustments (and no other adjustments) to the terms of such
Company Awards as are necessary to preserve the value inherent in such Company
Awards with no detrimental effects, taken as a whole, on the holder thereof, and
the Parent shall assume the obligations of the Company under the Company Awards.
The other terms of each Company Award, and the plans or agreements under which
they are issued, shall continue to apply in accordance with their terms subject
to Section 5.7(d).
--------------
(c) The Company and Parent agree that each of the Company Stock
Plans and Parent Stock Plans shall be amended, to the extent necessary and
appropriate to reflect the transactions contemplated by this Agreement,
including, but not limited to the exchange of Shares held or to be awarded or
paid pursuant to such benefit plans, programs or arrangements into Parent ADSs
on a basis consistent with the transactions contemplated by this Agreement. The
actions to be taken by the Company and Parent pursuant to this Section 5.7(c)
--------------
shall include the submission by the Company or Parent of the amendments to the
Parent Stock Plans or the Company Stock Plans to their respective shareholders,
if such submission is determined to be necessary by counsel to the Company or
Parent after consultation with one another; provided, however, that such
approval shall not be a condition to the consummation of the Merger.
(d) Notwithstanding anything in subsection (a) or (b) above to the
contrary, if the exchange or conversion of any Adjusted Option or Company Award
shall be prohibited or restricted under any applicable law, rule or regulation
applicable to Parent, Parent shall, in lieu thereof, provide the holder at the
Effective Time with substantially the same economic benefit calculated as of the
Effective Time.
(e) Parent shall (i) reserve for issuance the number of Parent
Ordinary Shares underlying Parent ADSs that will become subject to the benefit
plans, programs and arrangements referred to in this Section and (ii) issue or
cause to be issued the appropriate number of Parent Ordinary Shares to be
represented by Parent ADSs pursuant to applicable plans, programs and
arrangements, upon the exercise or maturation of rights existing thereunder on
the Effective Time or thereafter granted or awarded. No later than the Effective
Time, the Parent shall prepare and file with the SEC a registration statement on
Form S-8 (or other appropriate form) registering a number of Parent Ordinary
Shares underlying Parent ADSs necessary to fulfill Parent's obligations under
this Section. For such period as the Parent shall be a reporting company under
the Exchange Act, Parent shall use its reasonable best efforts to keep such
registration statement effective (and the current status of the prospectus
required thereby to be maintained) for as long as Adjusted Options or the
Company Awards remain outstanding.
(f) As soon as practicable after the Effective Time, Parent shall
deliver to the holders of Company Options and Company Awards appropriate notices
setting forth such holders' rights pursuant to the Company Stock Plans and the
agreements evidencing the grants of such Company Options and Company Awards and
that such Company Options and Company Awards and
40
the related agreements shall be assumed by Parent and shall continue in effect
on the same terms and conditions (subject to the adjustments required by this
Section 5.7 after giving effect to the Merger).
-----------
Section 5.8 No Solicitation by the Company.
------------------------------
(a) Neither the Company nor any Company Subsidiary shall (and the
Company shall cause the officers, directors, employees, representatives and
agents of the Company and each Company Subsidiary, including, but not limited
to, investment bankers, attorneys and accountants, not to), directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any Person or group (other
than Parent, any of its Affiliates or representatives) concerning any Company
Acquisition Proposal, except that nothing contained in this Section 5.8(a) or
--------------
any other provision hereof shall prohibit the Company or the Company Board of
Directors from (i) taking and disclosing to the Company's shareholders a
position with respect to a tender or exchange offer by a third party pursuant to
Rules 14d-9 and 14e-2 promulgated under the Exchange Act, or (ii) making any
disclosure to the Company's shareholders if, in the good faith judgment of the
Board, after consultation with outside counsel, failure to make such disclosures
would be contrary to its obligations under applicable law, provided that the
Company may not, except as permitted by Section 5.8(c), withdraw or modify, or
--------------
propose to withdraw or modify, its position with respect to the Merger. Upon
execution of this Agreement, the Company will immediately cease any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. Notwithstanding the foregoing, prior to
the approval of the Merger and this Agreement at the Company Shareholders
Meeting (or, if the Merger has not been consummated within thirty (30) days
after the Company Shareholders Meeting (except by reason of the Company's
failure to fulfill any obligation under this Agreement), such actions occur more
than thirty (30) days after the Company Shareholder Meeting), the Company may
furnish information concerning its business, properties or assets to any Person
pursuant to appropriate confidentiality agreements, and may negotiate and
participate in discussions and negotiations with such entity or group concerning
a Company Acquisition Proposal if such proposal is a Company Superior Proposal
not solicited in violation of this Agreement. A Company Acquisition Proposal
will be a Company Superior Proposal only if:
(x) a Person has, on an unsolicited basis, submitted a
written proposal to the Company Board of Directors relating to any Company
Acquisition Proposal which the Board determines in good faith (based on the
advice of a financial adviser of nationally recognized reputation) to be more
favorable to the Company and its shareholders and for which financing, to the
extent required, is then committed or which in the good faith judgment of the
Company Board of Directors, is reasonably capable of being obtained by such
Person; and
(y) the Company Board of Directors determines in good faith,
after consultation with outside counsel, that such action is required to act in
a manner consistent with the Board's fiduciary duties to the Company's
shareholders under applicable law.
41
(b) The Company will immediately notify Parent, orally and in writing, of
the existence of any Company Acquisition Proposal, or any modification of or
amendment to any Company Acquisition Proposal, or any request for nonpublic
information relating to the Company or any of its Subsidiaries in connection
with a Company Acquisition Proposal, and the Company will immediately
communicate to Parent, orally and in writing, the terms of any Company
Acquisition Proposal, modification or request which it may receive, the identity
of the party making such Company Acquisition Proposal, modification or request,
and whether the Company is providing or intends to provide the Person making the
Company Acquisition Proposal, modification or request with access to information
concerning the Company, and will immediately provide to Parent copies of any
written materials received by the Company describing or stating such Company
Acquisition Proposal. The Company will promptly provide to Parent any non-public
information concerning the Company provided to any other party which was not
previously provided to Parent.
(c) Except as set forth in this Section 5.8(c), neither the Company Board
--------------
of Directors nor any committee thereof shall (i) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Parent or Merger Sub, the approval
or recommendation by such Board of Directors or any such committee of this
Agreement or the Merger, (ii) approve or recommend or propose to approve or
recommend, any Company Acquisition Proposal, or (iii) enter into any agreement
with respect to any Company Acquisition Proposal. Notwithstanding the foregoing,
prior to the Effective Time, the Company Board of Directors may withdraw or
modify its approval or recommendation of this Agreement or the Merger, approve
or recommend a Company Superior Proposal, or enter into an agreement with
respect to a Company Superior Proposal, and may terminate this Agreement in
order to concurrently enter into an agreement with respect to such Company
Superior Proposal, in each case at any time after the fifth (5th) Business Day
following delivery to Parent of written notice from the Company advising Parent
that the Company Board of Directors has received a Company Superior Proposal
which it intends to accept, specifying the material terms and conditions of such
Company Superior Proposal, and identifying the Person making such Company
Superior Proposal, but only if the Company shall have caused its financial and
legal advisors to, if requested by the Parent, negotiate with Parent to make
such adjustments in the terms and conditions of this Agreement as would enable
the Company to proceed with the transactions contemplated herein on such
adjusted terms and, at the end of such five (5) Business Day period, the Company
Board of Directors, in good faith continues reasonably to believe, that the
Company Acquisition Proposal constitutes a Company Superior Proposal.
Section 5.9 No Solicitation by the Parent. (a) Neither the Parent nor any
-----------------------------
Parent Subsidiary shall (and the Parent shall cause the officers, directors,
employees, representatives and agents of the Parent and each Parent Subsidiary,
including, but not limited to, investment bankers, attorneys and accountants,
not to), directly or indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any Person or
group (other than the Company, any of its Affiliates or representatives)
concerning any Parent Acquisition Proposal,
42
except that nothing contained in this Section 5.9(a) or any other provision
--------------
hereof shall prohibit the Parent or the Parent Board of Directors from making
any disclosure to the Parent's shareholders if, in the good faith judgment of
the Board, failure to so disclose would be inconsistent with the best interests
of its shareholders; provided that the Parent may not, except as permitted by
-------------
Section 5.9(c), withdraw or modify, or propose to withdraw or modify, its
---------------
position with respect to the Merger. Upon execution of this Agreement, the
Parent will immediately cease any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing. Notwithstanding the foregoing, prior to the Effective Time, the
Parent may furnish information concerning its business, properties or assets to
any Person pursuant to appropriate confidentiality agreements, and may negotiate
and participate in discussions and negotiations with such entity or group
concerning a Parent Acquisition Proposal if such proposal is a Parent Inclusive
Superior Proposal. A Parent Acquisition Proposal will be a Parent Superior
Proposal only if a Person has, on an unsolicited basis, submitted a written
proposal to the Parent's Board of Directors relating to any Parent Acquisition
Proposal which the Board reasonably determines in good faith (based on the
advice of a financial adviser of a recognized reputation) to recommend to
Parent's shareholders. A Parent Superior Proposal will be a Parent Inclusive
Superior Proposal only if such Parent Superior Proposal does not contemplate,
provide for, or require termination of this Agreement as a condition to such
proposal, and expressly permits (but need not require) Parent to consummate the
Merger without modification in any adverse respect of this Agreement or the
Transactions. If at any time a Parent Superior Proposal becomes a Parent
Exclusive Superior Proposal, Parent will immediately cease any then existing
activities, discussions or negotiations with respect thereto until after the
earlier of the termination of the Merger Agreement, the Effective Time or such
date as any Parent Superior Proposal ceases to be a Parent Exclusive Superior
Proposal. For purposes of this Agreement, a Parent Exclusive Superior Proposal
means any Parent Superior Proposal that is not a Parent Inclusive Superior
Proposal
(b) The Parent will immediately notify the Company, orally and in writing,
of the existence of any Parent Acquisition Proposal, or any modification of or
amendment to any Parent Acquisition Proposal, or any request for nonpublic
information relating to the Parent or any of its Subsidiaries in connection with
a Parent Acquisition Proposal and the Parent will immediately communicate to the
Company, orally and in writing, the terms of any Parent Acquisition Proposal,
modification or request which it may receive, the identity of the party making
such Parent Acquisition Proposal, modification or request, and whether the
Parent is providing or intends to provide the Person making the Parent
Acquisition Proposal, modification or request with access to information
concerning the Parent, and will immediately provide to the Company copies of any
written materials received by Parent describing or stating such Parent
Acquisition Proposal. The Parent will promptly provide to the Company any non-
public information concerning the Parent provided to any other party which was
not previously provided to the Company.
(c) Except as set forth below in this Section 5.9(c), neither the Parent's
-------------
Board of Directors nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to the Company, the approval
or recommendation by such Board of Directors
43
or any such committee of this Agreement or the Merger, (ii) approve or recommend
or propose to approve or recommend, any Parent Acquisition Proposal, or (iii)
enter into any agreement with respect to any Parent Acquisition Proposal.
Notwithstanding the foregoing, prior to the Effective Time, (i) the Parent's
Board of Directors may withdraw or modify its approval or recommendation of this
Agreement or the Merger, approve or recommend a Parent Inclusive Superior
Proposal, or enter into an agreement with respect to a Parent Inclusive Superior
Proposal, and (ii) may terminate this Agreement in order to concurrently enter
into an agreement with respect to such Parent Inclusive Superior Proposal, in
each case at any time after the fifth (5th) Business Day following delivery to
the Company of written notice from the Parent advising the Company that the
Parent's Board of Directors has received a Parent Inclusive Superior Proposal
which it intends to accept, specifying the terms and conditions of such Parent
Inclusive Superior Proposal, and identifying the Person making such Parent
Inclusive Superior Proposal. In the event the Company has not advised Parent in
writing that the Company objects to the Parent Inclusive Superior Proposal prior
to the expiration of the five (5) Business Day period referred to above, the
Company will be presumed to have not objected to the Parent Inclusive Superior
Proposal and Parent may proceed to consummate the Merger and the Transactions
and the Parent Inclusive Superior Proposal. In the event the Company objects to
the Parent Inclusive Superior Proposal, the Parent shall within two (2) Business
Days thereafter either (A) abandon the Parent Inclusive Superior Proposal and
immediately provide written notice to the Company of such abandonment, or (B)
terminate this Agreement and pay to the Company the Termination Fee and Expenses
as provided in Section 7.3.
-----------
Section 5.10 Publicity. The initial press release with respect to the
---------
execution of this Agreement shall be a joint press release acceptable to Parent
and the Company. Thereafter, until the Effective Time or the date the
Transactions are terminated or abandoned pursuant to Article VII, neither the
-----------
Company, Parent nor any of their respective Affiliates shall issue or cause the
publication of any press release or other announcement with respect to the
Merger, this Agreement or the other Transactions without prior written approval
of the other party, except for references to earlier releases or announcements
and except as may be required by law or by any listing agreement with a national
securities exchange or trading market.
Section 5.11 Notification of Certain Matters. Each of the Company and the
-------------------------------
Parent shall give prompt notice to the other of (i) the occurrence or non-
occurrence of any event, the occurrence or non-occurrence of which would cause
any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Effective Time and (ii)
any material failure of such party to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 5.11
-------- ------- ------------
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
Section 5.12 State Takeover Laws. If any state takeover statute other than
-------------------
Chapter 7A and Chapter 7B of the MBCA becomes or is deemed to become applicable
to the Agreement, the acquisition of Shares or the related voting power pursuant
to the Merger or the other Transactions,
44
the Company and the Parent shall take all action necessary to render such
statute inapplicable to all of the foregoing.
Section 5.13 Tax and Accounting Treatment. (a) Prior to the Effective
----------------------------
Time, each party shall use its reasonable best efforts to cause the Merger to
qualify as a Section 368 Reorganization and to qualify for "pooling of
interests" accounting treatment under Finnish GAAP, and will not take any action
reasonably likely to cause the Merger not so to qualify.
(b) Each of the Parent and the Company shall cooperate with each other in
obtaining the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Company, dated as
of the Closing Date, to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code. In connection
therewith, each of the Company and the Parent shall deliver to ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇ customary representation letters in form and substance reasonably
satisfactory to such counsel, and the Company shall obtain any representation
letters from appropriate shareholders and shall deliver any such letters
obtained to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ (the representation letters referred to in
this sentence are collectively referred to as the "Tax Certificates").
(c) The Company shall prepare and timely file all reports, forms, returns,
or other information required to be filed by it in order for the Merger to
qualify for an exception to the general rule of Section 367(a)(1) of the Code.
After the Merger, Parent shall cause the Surviving Corporation to prepare and
timely file (to the extent legally entitled to do so) all reports, forms,
returns, or other information required to be filed by the Company after the
Merger in order for the Merger to qualify for an exception to the general rule
of Section 367(a)(1) of the Code.
(d) After the Merger, Parent agrees that it shall provide the information
required to be provided by it under Treasury Regulation Section 1.367(a)-8(b)
for the applicable period in order to ensure that any holder of Company Common
Stock that is a five-percent transferee shareholder (as defined in Treasury
Regulation Section 1.367(a)-3(c)(5)(ii)) that filed a gain recognition agreement
(as defined in Treasury Regulation Section 1.367(a)-(8)) with respect to the
Merger is entitled to non-recognition treatment for U.S. federal income tax
purposes.
(e) Parent shall not take, and, after the Merger, Parent shall cause the
Company not to take, any position with respect to Taxes that is inconsistent
with the treatment of the Merger as a Section 368 Reorganization.
Section 5.14 Governance Matters. Prior to the Effective Time, the Board of
------------------
Directors of Parent shall take all action necessary to appoint A. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ to serve as a member of such Board of Directors, effective as of the
Effective time, until the first annual meeting of Parent Shareholders following
the Effective Time.
45
Section 5.15 Merger Sub Compliance. Parent shall cause Merger Sub to
---------------------
comply with all of its obligations under or related to this Agreement.
Section 5.16 Employee Benefits. (a) As of the Effective Time, and subject
-----------------
to subsection (b) Parent shall either (i) cause the Company Plans (as defined in
Section 3.12 of this Agreement) in effect at the date of this Agreement, to
------------
remain in effect as of the Effective Time, or (ii) maintain employee benefit
plans which, in the aggregate, provide a substantially similar level of benefits
as those provided under comparable Company Plans with respect to employees of
the Company covered under such plans as of the date of this Agreement; provided,
--------
however, that the foregoing shall not apply to any provisions of any Company
-------
Plan under which employees may receive, or under which employee benefits are
based on, Company Common Stock or to the extent inconsistent with any employment
agreement with any employee.
(b) Except as set forth in the Employment Agreements to be entered into
with A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.,
Parent has no current plans to institute any salary reduction program applicable
to the employees of the Surviving Corporation. From and after the Effective
Time, Parent shall, or shall cause the Surviving Corporation to, provide to each
continuing employee of the Company and each Company Subsidiary annual salary
(excluding any cash bonus which shall be governed by the next sentence hereof)
in an amount not less than the annual salary such employee was entitled to
receive from the Company or Company Subsidiary for the twelve month period ended
June 30, 2000, plus such annualized increases in such compensation (if any)
instituted prior to the Effective Time, in good faith, in the ordinary course of
business consistent with past practices, except, in no event shall such
increases exceed ten percent (10%) of an employee's cash salary payable during
the twelve month period ended June 30, 2000. Parent shall, or shall cause the
Surviving Corporation to, provide to each continuing employee of the Company and
each Company Subsidiary payments under the Company bonus and incentive Plans
with respect to the fiscal year ending March 31, 2001, based on the greater of
(A) the bonus and incentive compensation to which such employee would have been
entitled pursuant to the Company bonus and incentive Plans in effect immediately
prior to the Effective Time; or (B) the bonus and incentive compensation to
which such employee would be entitled pursuant to any alternative bonus plan as
to which such employee may become entitled to participate, at the option of the
Parent, after the Effective Time. Notwithstanding the foregoing, nothing in this
Agreement shall in any way restrict or limit Parent or the Surviving Corporation
with respect to their ability to terminate one or more of the employees of the
Surviving Corporation from and after the Effective Date or be deemed in any way
to create an employment contract or condition of employment.
(c) Employees of the Company and each Company Subsidiary as of the
Effective Time shall be credited with service accrued prior to the Effective
Time with the Company and any Company Subsidiary for purposes of determining
eligibility to participate, vesting, eligibility for early retirement and
vacation and paid time off entitlement under any employee benefit plan or
arrangement established or maintained by Parent or the Surviving Corporation and
made available to such employees.
46
Section 5.17 Indemnification. (a) From and after the Effective Time, the
---------------
Parent shall, to the fullest extent not prohibited by applicable law, indemnify,
defend and hold harmless each person who is now, or has been at any time prior
to the date hereof, or who becomes prior to the Effective Time, an officer,
director or employee of the Company or any of its Subsidiaries (each, an
"Indemnified Party") against (i) all losses, expenses (including reasonable
attorneys' fees and expenses), claims, damages or liabilities or, subject to the
proviso of the next succeeding sentence, amounts paid in settlement, arising out
of actions or omissions occurring at or prior to the Effective Time (and whether
asserted or claimed prior to, at or after the Effective Time) that are, in whole
or in part, based on or arising out of the fact that such person is or was a
director, officer or employee of the Company or any of its Subsidiaries or
served as a fiduciary under or with respect to any employee benefit plan (within
the meaning of Section 3(3) of ERISA) at any time maintained by or contributed
to by the Company or any of its Subsidiaries ("Indemnified Liabilities"), and
(ii) all Indemnified Liabilities to the extent they are based on or arise out of
or pertain to the transactions contemplated by this Agreement, in each case,
until the expiration of the applicable statute of limitations. In the event of
any such loss, expense, claim, damage or liability (whether or not arising
before the Effective Time), (i) the Parent shall, subject to the limitations set
forth herein, pay the reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably satisfactory to the
Parent, promptly after statements therefor are received and otherwise advance to
such Indemnified Party upon request reimbursement of documented expenses
reasonably incurred, (ii) the Parent and the Company will cooperate in the
defense of such matter, and (iii) any determination required to be made with
respect to whether an Indemnified Party's conduct complies with the standards
set forth under applicable law and the articles of incorporation or bylaws shall
be made by independent counsel mutually acceptable to the Parent and the
Indemnified Party; provided, however, that the Parent shall not be liable for
-------- -------
any settlement effected without its written consent (which consent shall not be
unreasonably withheld or delayed). In the event that any Indemnified Party is
required to bring any action to enforce rights or to collect moneys due under
this Agreement and is successful in such action, the Parent shall reimburse such
Indemnified Party for all of its expenses in bringing and pursuing such action.
Each Indemnified Party shall be entitled to the advancement of expenses to the
full extent contemplated in this Section 5.17(a) in connection with any such
---------------
action, provided that the person to whom expenses are advanced provides an
undertaking to repay such advance if it is ultimately determined that such
person is not entitled to indemnification. The Indemnified Parties, as a group,
may retain only one law firm to represent them in each applicable jurisdiction
with respect to any single action unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Indemnified Parties, in which case each Indemnified Person
with respect to whom such a conflict exists (or group of such Indemnified
Persons who, among them, have no such conflict) may retain one separate law firm
in each applicable jurisdiction. In addition, from and after the Effective
Time, directors and officers of the Company who become directors or officers of
the Parent will be entitled to indemnification under the Parent's Charter
Documents, as the same may be amended from time to time in accordance with their
terms and applicable law, and to all other indemnity rights and protections as
are afforded to other directors and officers of the Parent.
47
(b) In the event that the Parent or any of its successors or assigns (i)
consolidates with or merges into any other person and is not the continuing or
surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets to
any person, then, and in each such case, proper provision will be made so that
the successors and assigns of the Parent assume the obligations set forth in
this Section 5.17.
------------
(c) For six years after the Effective Time, the Parent shall maintain in
effect (x) the Company's current directors' and officers' liability insurance or
other directors' and officers' liability insurance with a reputable and
financially sound insurer that provides coverage that is no less favorable than
the Company's current policy, in each case, covering acts or omissions occurring
prior to the Effective Time with respect to those persons who are currently
covered by the Company's directors' and officers' liability insurance policy on
terms with respect to such coverage and amount no less favorable than those of
such policy in effect on the date hereof, and (y) the Company's current
fiduciary liability insurance policies for employees who serve or have served as
fiduciaries under or with respect to any employee benefit plans described in
Section 5.17(a) with coverages and in amounts no less favorable than those of
---------------
such policy in effect on the date hereof; provided, that in no event shall the
--------
Parent be required to pay aggregate premiums for insurance under this Section
-------
5.17(c) in excess of 150% of the aggregate premiums paid by the Company for its
-------
year ended March 31, 2000 for such insurance; provided, further, that if the
-------- -------
annual premiums of such insurance coverage exceed such amount, the Parent shall
be obligated to obtain a policy with the best coverage reasonably available, in
the reasonable judgment of the Board of Directors of the Parent, for a cost up
to but not exceeding such amount.
(d) The provisions of this Section 5.17 (i) are intended to be for the
------------
benefit of, and will be enforceable by, each indemnified party, his or her heirs
and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
Section 5.18 Control of Other Party's Business. Nothing contained in this
---------------------------------
Agreement shall give the Parent, directly or indirectly, the right to control or
direct the Company's operations prior to the Effective Time. Nothing contained
in this Agreement shall give the Company, directly or indirectly, the right to
control or direct the Parent's operations prior to the Effective Time. Prior to
the Effective Time, each of the Parent and the Company shall exercise,
consistent with the terms and conditions of this Agreement, complete control and
supervision over its respective operations.
Section 5.19 HSE Listing and Nasdaq Listing; Exchange Act Reports. The
----------------------------------------------------
Parent shall use its reasonable best efforts (i) to cause the Parent Ordinary
Shares underlying the Parent ADSs issuable to the Company's shareholders as
contemplated by this Agreement to be approved for listing on the HSE and (ii) to
cause the Parent ADSs issuable to the Company's shareholders as contemplated by
this Agreement to be approved for listing on the Nasdaq National Market, in each
48
case, prior to the Closing Date. The Parent shall use its best efforts to keep
the Parent ADSs listed on the Nasdaq National Market (or, if not then eligible
for listing thereon, on the Nasdaq SmallCap Market, or, if then eligible for
listing thereon), for not less than eighteen months following the Closing Date,
and shall, during such period, use its best efforts to file all reports required
under the Exchange Act.
Section 5.20 No Series K Shares. The Parent shall not, at any time after
------------------
the Closing, issue any Series K Shares.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions Precedent to Obligations of Parent and Merger
--------------------------------------------------------
Sub. The respective obligations of Parent and Merger Sub to effect the Merger
---
shall be subject to the satisfaction or waiver at or prior to the Effective
Time, of each of the following conditions:
(a) Shareholder Approval. Each of the Company Shareholder Approval
--------------------
and the Parent Shareholder Approval shall have been obtained;
(b) Antitrust Approvals. All waiting periods (and any extension
-------------------
thereof) under the HSR Act and the Non-U.S. Monopoly Laws applicable to the
Merger shall have expired or been terminated, and all consents, waivers,
approvals and authorizations required to be obtained, and all filings or notices
required to be made by the parties hereto with any Governmental Entity pursuant
to the HSR Act and the Non-U.S. Monopoly Laws shall have been obtained or made;
(c) Injunction. No preliminary or permanent injunction or other order
----------
shall have been issued by any federal, state or foreign court or by any federal,
state or foreign governmental or regulatory agency, body or authority and be in
effect at the Effective Time which prohibits, restrains, restricts or enjoins
the consummation of the Merger, provided, however, that, in the case of an
injunction or other order, each of the parties shall have used reasonable best
efforts to prevent the entry of any such injunction or other order and to appeal
as promptly as possible any such injunction or other order that may have been
entered;
(d) Statutes. No federal, state or foreign statute, rule, regulation,
--------
executive order, decree or order of any kind shall have been enacted, entered,
promulgated or enforced by any court or governmental authority which prohibits,
restrains, restricts or enjoins the consummation of the Merger or has the effect
of making the Merger illegal;
(e) No Material Adverse Effect. Since the date hereof, no event shall
--------------------------
have occurred that has had, or could reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect;
49
(f) HSE Listing and Nasdaq Listing. The Parent Ordinary Shares to be
------------------------------
issued in the Merger shall have been authorized for listing on the HSE following
the due issuance thereof, and the Parent ADSs representing such Parent Ordinary
Shares shall have been approved for quotation on the Nasdaq National Market;
(g) Pooling Letter. Parent shall have received a letter its auditors,
--------------
Idman & ▇▇▇▇▇ Oy, dated as of the Closing Date and addressed to Parent and the
Company stating that such firm believes that the Merger should be treated as a
"pooling of interests" in conformity with Finnish GAAP and such letter shall not
have been withdrawn or modified in any material respect;
(h) Registration Statement. Each of the Registration Statement and
----------------------
the Form F-6 shall have become effective in accordance with the provisions of
the Securities Act, no stop order suspending the effectiveness of either the
Registration Statement or the Form F-6 shall have been issued by the SEC and no
proceedings for that purpose shall have been initiated by the SEC and not
concluded or withdrawn;
(i) Representations and Warranties True. (A) The representations and
-----------------------------------
warranties of the Company contained herein that are qualified by reference to a
Company Material Adverse Effect shall be true and correct when made and on the
Closing Date (except for representations and warranties made as of a specified
date, which need be true and correct only as of the specified date), as if made
on and as of such date, (B) all other representations and warranties of the
Company shall have been true and correct when made and on and as of the Closing
Date, except for representations and warranties made as of a specified date,
which need be true and correct only as of the specified date, as if made on and
as of such date, in each case, where the failure of such representations and
warranties to be true or correct could not reasonably be expected to,
individually or in the aggregate, result in a Company Material Adverse Effect,
and (C) the failure of any representations and warranties of the Company
contained in this Agreement to be true and correct (disregarding for purposes of
this Section 6.1(i)(C), all qualifications therein which reference a Company
-----------------
Material Adverse Effect) shall not have, or be reasonably likely to have, in the
aggregate, a Company Material Adverse Effect;
(j) Performance. The Company shall have performed or complied in all
-----------
material respects with all material agreements, covenants and undertakings (or,
if any such agreement, covenant or undertaking is qualified as to materiality
then the Company shall have performed or complied with such agreement or
covenant or undertaking in all respects in accordance with its terms) contained
herein required to be performed or complied with by it prior to or at the time
of the Closing;
(k) Compliance Certificate. The Company shall have delivered to
----------------------
Parent a certificate, dated the date of the Closing, signed by the Chief
Executive Officer or Chief Financial Officer of the Company, certifying as to
the fulfillment of the conditions specified in Section 6.1(i) and Section
-------------- -------
6.1(j);
------
50
(l) Lock-Up Agreement. Parent and each of A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
-----------------
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. shall have entered into the Lock-Up
Agreement;
(m) Liquidity and Registration Rights Agreement. Parent and each of the
-------------------------------------------
Major Shareholders shall have entered into the Liquidity and Registration Rights
Agreement in substantially the form set forth as Exhibit 6.2(m) attached hereto;
--------------
and
(n) Consents Obtained. All material consents, waivers, approvals,
-----------------
authorizations or orders required to be obtained, and all filings required to be
made by the Company for the authorization, execution and delivery of this
Agreement and the consummation by it of the transactions contemplated hereby
shall have been obtained and made by the Company, except where the failure to
receive such consents, waivers, approvals, authorizations or orders would not,
individually or in the aggregate with all other such failures, have a Company
Material Adverse Effect.
Section 6.2 Conditions Precedent to Obligations of the Company. The
--------------------------------------------------
obligations of the Company to effect the Merger shall be subject to the
satisfaction or waiver at or prior to the Effective Time, of each of the
following conditions:
(a) Shareholder Approval. Each of the Company Shareholder Approval and the
--------------------
Parent Shareholder Approval shall have been obtained;
(b) Antitrust Approvals. All waiting periods (and any extension thereof)
-------------------
under the HSR Act and the Non-U.S. Monopoly Laws applicable to the Merger shall
have expired or been terminated, and all consents, waivers, approvals and
authorizations required to be obtained, and all filings or notices required to
be made by the parties hereto with any Governmental Entity pursuant to the HSR
Act and the Non-U.S. Monopoly Laws shall have been obtained or made;
(c) Injunction. No preliminary or permanent injunction or other order
----------
shall have been issued by any federal, state or foreign court or by any federal,
state or foreign governmental or regulatory agency, body or authority and be in
effect at the Effective Time which prohibits, restrains, restricts or enjoins
the consummation of the Merger, provided, however, that, in the case of an
injunction or other order, each of the parties shall have used reasonable best
efforts to prevent the entry of any such injunction or other order and to appeal
as promptly as possible any such injunction or other order that may have been
entered;
(d) Statutes. No federal, state or foreign statute, rule, regulation,
--------
executive order, decree or order of any kind shall have been enacted, entered,
promulgated or enforced by any court or governmental authority which prohibits,
restrains, restricts or enjoins the consummation of the Merger or has the effect
of making the Merger illegal;
51
(e) No Material Adverse Effect. Since the date hereof, no event shall have
--------------------------
occurred that has had, or could reasonably be expected to have, individually or
in the aggregate, a Parent Material Adverse Effect;
(f) HSE Listing and Nasdaq Listing. The Parent Ordinary Shares to be
------------------------------
issued in the Merger shall have been authorized for listing on the HSE following
the due issuance thereof, and the Parent ADSs representing such Parent Ordinary
Shares shall have been approved for quotation on the Nasdaq National Market;
(g) Pooling Letters. The Company shall have received a letter from
---------------
Parent's auditors, Idmar & ▇▇▇▇▇ Oy, dated as of the Closing Date and addressed
to Parent and the Company stating that such firm believes that the Merger should
be treated as a "pooling of interests" in conformity with Finnish GAAP and such
letter shall not have been withdrawn or modified in any material respect;
(h) Registration Statement. Each of the Registration Statement and the
----------------------
Form F-6 shall have become effective in accordance with the provisions of the
Securities Act, no stop order suspending the effectiveness of either the
Registration Statement or the Form F-6 shall have been issued by the SEC and no
proceedings for that purpose shall have been initiated by the SEC and not
concluded or withdrawn;
(i) Tax Opinion. The Company shall have received an opinion of Schiff
-----------
▇▇▇▇▇▇ & ▇▇▇▇▇ in form and substance reasonably satisfactory to the Company on
the basis of certain facts, representations and assumptions set forth in such
opinion, dated as of the Closing Date, to the effect that (i) the Merger will be
treated for U.S. federal income tax purposes as a Section 368 Reorganization and
(ii) each of Parent and the Company will be a party to the reorganization within
the meaning of Section 368(b) of the Code. In rendering such opinion, such
counsel shall be entitled to rely upon the Tax Certificates;
(j) Representations and Warranties True. (A) The representations and
-----------------------------------
warranties of the Parent contained herein that are qualified by reference to a
Parent Material Adverse Effect shall be true and correct when made and on the
Closing Date (except for representations and warranties made as of a specified
date, which need be true and correct only as of the specified date), as if made
on and as of such date, (B) all other representations and warranties of the
Parent shall have been true and correct when made and on and as of the Closing
Date, except for representations and warranties made as of a specified date,
which need be true and correct only as of the specified date, as if made on and
as of such date, in each case, where the failure of such representations and
warranties to be true or correct could not reasonably be expected to,
individually or in the aggregate, result in a Parent Material Adverse Effect,
and (C) the failure of any representations and warranties of the Parent
contained in this Agreement to be true and correct disregarding for purposes of
this Section 6.2(j)(C), all qualifications therein which reference a Parent
-----------------
Material Adverse Effect), shall not have, or be reasonably likely to have, in
the aggregate, a Parent Material Adverse Effect;
52
(k) Performance. Parent shall have performed or complied in all material
-----------
respects with all material agreements, undertakings and covenants (or, if any
such agreement, covenant or undertaking is qualified as to materiality then the
Company shall have performed or complied with such agreement or covenant or
undertaking in all respects) contained herein required to be performed or
complied with by it prior to or at the time of the Closing;
(l) Compliance Certificate. Parent shall have delivered to the Company a
certificate, dated the date of the Closing, signed by the Chief Executive
Officer or Chief Financial Officer of Parent, certifying as to the fulfillment
of the conditions specified in Section 6.2(j) and Section 6.2(k);
-------------- --------------
(m) Liquidity and Registration Rights Agreement. Parent and each of the
-------------------------------------------
Major Company Shareholders shall have entered into the Liquidity and
Registration Rights Agreement in substantially the form set forth as Exhibit
6.2(m) attached hereto;
(n) Consents Obtained. All material consents, waivers, approvals,
-----------------
authorizations or orders required to be obtained, and all filings required to be
made, by Parent or Merger Sub for the authorization, execution and delivery of
this Agreement and the consummation by them of the transactions contemplated
hereby shall have been obtained and made by Parent or Merger Sub, except where
the failure to receive such consents, waivers, approvals, authorizations or
orders would not, individually or in the aggregate with all other such failures,
have a Parent Material Adverse Effect; and
(o) Lock-Up Agreement. Parent and each of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
-----------------
▇▇▇▇▇▇▇▇ Jukko and Topi ▇▇▇▇▇▇▇▇ shall have entered into the Lock-Up Agreement.
Section 6.3 Frustration of Closing Conditions. Neither the Parent nor the
---------------------------------
Company may rely on the failure of any condition set forth in Section 6.1 or
-----------
Section 6.2, as the case may be, to be satisfied if such failure was caused by
-----------
such party's failure to use reasonable best efforts to consummate the Merger and
the other Transactions, as required by and subject to Section 5.6.
-----------
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated at any
-----------
time prior to the Effective Time, whether before or after the Company
Shareholder Approval or the Parent Shareholder Approval:
(a) by mutual written consent duly authorized by the respective Boards of
Directors of Parent and the Company; or
53
(b) by Parent:
(i) if, prior to the Effective Time, the Company has breached in any
material respect any representation, warranty, covenant or other agreement
contained in this Agreement, which (A) would give rise to the failure of a
condition set forth in clause (i) or (j) of Section 6.1, (ii) which is not
-----------
cured within thirty (30) days after written notice thereof or is incapable of
being cured by the Company, or (B) has not been waived by Parent pursuant to the
provisions hereof;
(ii) if the Company willfully and materially breaches its obligations
under Section 5.8;
-----------
(iii) if at the Company Shareholder Meeting (including any adjournment or
postponement thereof) the Company Shareholder Approval shall not have been
obtained; or
(iv) in accordance with Section 5.9(c); provided, that, in order for
-------------- --------
the termination of this Agreement pursuant to this Section 7.1(b)(iv) to be
------------------
deemed effective, Parent shall have complied with all provisions contained in
Section 5.9 and Section 7.3, including the payment of the Termination Fee and
----------- -----------
Expenses as provided therein.
(c) by the Company:
(i) if, prior to the Effective Time, Parent or Merger Sub has breached
in any material respect any representation, warranty, covenant or other
agreement contained in this Agreement which (A) would give rise to the failure
of a condition set forth in clauses (j) and (k) of Section 6.2, which
-----------
is not cured within thirty (30) days after written notice thereof or is
incapable of being cured by the Parent; or (B) has not been waived by the
Company pursuant to the provisions hereof;
(ii) if the Parent willfully and materially breaches its obligations
under Section 5.9;
-----------
(iii) if at the Parent Shareholder Meeting (including any adjournment or
postponement thereof), the Parent Shareholder Approval shall not have been
obtained; or
(iv) in accordance with Section 5.8(c); provided, that, in order for
-------------- --------
the termination of this Agreement pursuant to this Section 7.1(c)(iv), to be
------------------
deemed effective, the Company shall have complied with all provisions contained
in Section 5.8 and Section 7.3, including the payment of the Termination Fee and
----------- -----------
Expenses as provided therein.
(d) by either Parent or the Company:
54
(i) if the Effective Time of the Merger has not occurred on or prior
to February 28, 2001 (the "Termination Date"); provided, that the right to
terminate this Agreement pursuant to this clause shall not be available to any
party whose failure to fulfill any material obligation of this Agreement or
other material breach of this Agreement has been the cause of, or resulted in,
the failure of the Effective Time of the Merger to have occurred on or prior to
the aforesaid date; or
(ii) if any court of competent jurisdiction or any Governmental Entity
having authority with respect thereto shall have issued an order, decree or
ruling or taken any other action permanently restricting, enjoining, restraining
or otherwise prohibiting the Transactions and such order, decree, ruling or
other action shall have become final and non-appealable and prior to such
termination and subject to the exclusions under Section 5.6(c), the parties
--------------
shall have used reasonable best efforts to resist, resolve, or lift, as
applicable, such judgment, injunction, order or decree.
Section 7.2 Effect of Termination. In the event of termination of this
---------------------
Agreement by Parent or the Company, as provided in Section 7.1, this
-----------
Agreement shall forthwith become void and there shall be no liability or
obligation hereunder on the part of the Company, Parent or Merger Sub or their
respective officers or directors (except as set forth in Section 3.21, Section
------------ -------
4.20, Section 5.5, this Section 7.2 and Sections 7.3, 9.3, 9.5, 9.6, 9.7, 9.8,
---- ----------- ----------- ------------ --- --- --- --- ---
9.9 and Section 9.10, which shall survive the termination); provided, however,
--- ------------
that nothing contained in this Section 7.2 or in Section 7.3 shall relieve any
----------- -----------
party hereto from any liability for any willful and material breach by such
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
Section 7.3 Payment of Certain Fees and Expenses. (a) Except as set forth
in this Section 7.3, all fees and expenses incurred by Parent and/or
-----------
Merger Sub in connection with this Agreement and the Transactions contemplated
hereby shall be paid by Parent and/or Merger Sub, and all fees and expenses
incurred by the Company in connection with this Agreement and the Transactions
contemplated hereby shall be paid by the Company, in each case, whether or not
the Merger is consummated; provided, however, that Parent and the Company shall
-------- -------
share equally all SEC filing fees and printing expenses incurred in connection
with the printing and filing of the Proxy Statement (including any preliminary
materials related thereto), the Registration Statement, and, in each case, any
amendments or supplements thereto.
(b) If this Agreement is terminated by Parent in accordance with
Section 7.1(b)(i) as a result of a willful breach by the Company, or is
-----------------
terminated by Parent in accordance with Section 7.1(b)(ii), Section
------------------- -------
7.1(b)(iii), or Section 7.1(b)(iv), then the Company shall pay to Parent the
---------------------
Termination Fee and its Expenses. If this Agreement is terminated by Parent in
accordance with Section 7.1(b)(i) hereof as a result of a non-willful breach by
-----------------
Company, then the Company shall pay to Parent its Expenses.
55
(c) If this Agreement is terminated by the Company pursuant to Section
-------
7.1(c)(i) as a result of a willful breach by Parent or is terminated by the
----------
Company in accordance with Section 7.1(c)(ii), Section 7.1(c)(iii) or Section
------------------ ------------------- -------
7.1(c)(iv), then Parent shall pay to the Company the Termination Fee and its
----------
Expenses. If this Agreement is terminated by the Company in accordance with
Section 7.1(c)(i) as a result of a non-willful breach by Parent, then Parent
-----------------
shall pay the Company its Expenses.
(d) The parties acknowledge that the agreements contained in this
Section 7.3(b) and Section 7.3(c) are an integral part of the transactions
-------------- --------------
contemplated by this Agreement, and that, without these agreements, the Company
and Parent would not enter into this Agreement.
(e) Any payment of the Termination Fee and/or the Expenses pursuant to
this Section 7.3 shall be made:
-----------
(1) in the case of a termination pursuant to Section 7.1(b)(i),
-----------------
Section 7.1(b)(ii), Section 7.1(b)(iii), Section 7.1(c)(i) , Section
------- --------- -------
7.1(c)(ii) or Section 7.1(c)(iii), within one Business Day after
---------- -------------------
termination of this Agreement,
(2) in the case of a termination pursuant to Section 7.1(b)(iv), $5.0
million of the Termination Fee will be paid within one Business Day after
termination of this Agreement, and, if a Parent Inclusive Superior Proposal
is consummated within one year from the date of such termination, the
remaining $1.4 million of the Termination Fee, and the Expenses of the
Company, will be paid upon the consummation of the Company Superior
Proposal,
(3) in the case of a termination pursuant to Section 7.1(c)(iv), $5
------------------
million of the Termination Fee will be paid within one Business Day after
termination of this Agreement, and, if a Company Proposal is consummated
within one (1) year from the date of such termination, the remaining $1.4
million of the Termination Fee, and the Expenses of the Parent and Merger
Sub, will be paid upon the consummation of the Company Superior Proposal.
(f) If either party fails to pay to (or reimburse) the other party any fee
or expense due hereunder (including the Termination Fee), such party shall pay
the costs and expenses (including legal fees and expenses) in connection with
any action, including the filing of any lawsuit or other legal action, taken to
collect payment, together with interest on the amount of any unpaid fee and/or
expense at the publicly announced prime rate of Citibank, N.A. from the date
such fee was required to be paid to the date it is paid.
56
ARTICLE VIII
DEFINITIONS AND INTERPRETATION
Section 8.1 Definitions. For all purposes of this Agreement,
-----------
except as otherwise expressly provided or unless the context clearly requires
otherwise:
"Adjusted Option" shall have the meaning set forth in Section 5.7(a).
--------------
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
Exchange Act.
"Agreement" or "this Agreement" shall mean this Agreement and Plan of
Merger, together with the Exhibits hereto and the Parent Disclosure Schedule and
the Company Disclosure Schedule.
"Antitrust Laws" shall have the meaning set forth in Section 5.6(c).
--------------
"Balance Sheet" shall mean the most recent audited balance sheet of
the Company and its consolidated subsidiaries included in the Company Financial
Statements.
"Balance Sheet Date" shall mean the date of the Balance Sheet.
"Business Day" means a day other than a Saturday, a Sunday or a day on
which banks in New York, New York or Helsinki, Finland are permitted or required
to close.
"Certificate" shall have the meaning set forth in Section 2.1(c).
---------------
"Charter Documents" means as to any Person the articles of
incorporation and bylaws or comparable organizational documents.
"Closing" shall mean the closing referred to in Section 1.3.
-----------
"Closing Date" shall mean the date on which the Closing occurs.
"Code" shall have the meaning set forth in the fifth "whereas" clause
of this Agreement.
"Company" shall have the meaning set forth in the first paragraph of
this Agreement.
"Company Acquisition Proposal" shall mean any proposal or offer to
acquire not less than 100% of the business or properties of the Company or a
corresponding portion of the capital stock of the Company, whether by merger,
tender offer, exchange offer, sale of securities or assets,
57
or similar transactions involving the Company or any Subsidiary, division or
operating or principal business unit of the Company.
"Company Agreements" shall have the meaning set forth in Section 3.22.
------------
"Company Award" shall have the meaning set forth in Section 5.7(b).
--------------
"Company Board of Directors" shall mean the board of directors of the
Company.
"Company Disclosure Schedule" shall mean the disclosure schedule of
even date herewith prepared by the Company and delivered to Parent
simultaneously with the execution hereof.
"Company Financial Statements" shall mean the financial statements
(including any related notes thereto) of the Company included in the Company SEC
Documents.
"Company Intellectual Property" shall mean all Intellectual Property
that is necessary to conduct the business of the Company and its Subsidiaries as
presently conducted.
"Company Material Adverse Effect" shall mean any event, change,
occurrence, effect, fact or circumstance that is or may reasonably be expected
to be materially adverse to (i) the ability of the Company to perform its
obligations under this Agreement or to consummate the Transactions, or (ii) the
business, tangible assets, liabilities, results of operations or financial
condition of the Company and its Subsidiaries, taken as a whole, other than any
event, change, occurrence, effect, fact or circumstance (A) relating to the
economy or securities markets of the United States or any other region in
general, (B) relating to changes in conditions generally applicable to the
industries in which the Company and its Subsidiaries are involved, (C) resulting
from entering into this Agreement or the consummation of the Transactions or the
announcement thereof, or (D) relating to its business, financial condition or
results of operations that has been disclosed in writing to the other party
prior to the date of this Agreement.
"Company Option" shall mean an option or other right to purchase
Shares which has been granted by the Company and which is outstanding at the
Effective Time.
"Company Recommendation" shall have the meaning set forth in Section
-------
5.3(a).
------
"Company SEC Documents" shall mean each form, report, schedule,
statement and other document required to be filed by the Company since March 31,
1999 under the Exchange Act or the Securities Act.
58
"Company Shareholder Agreement" shall mean the agreement, dated as of
the date hereof, among the Major Company Shareholders, Parent and Merger Sub,
pursuant to which each Major Company Shareholder has granted Parent a proxy with
respect to the voting of all of the Shares held by the Major Company
Shareholders upon the terms and subject to the conditions set forth therein.
"Company Shareholder Meeting" shall have the meaning set forth in
Section 5.3(a).
---------------
"Company Stock Plans" shall have the meaning set forth in Section
-------
3.3(a).
-----
"Company Subsidiary" shall mean each Person which is a Subsidiary of
the Company.
"Company Superior Proposal" shall mean an Acquisition Proposal which
satisfies both subsection (x) and subsection (y) of Section 5.8(a).
--------------
"Company's knowledge" or "best knowledge of the Company" shall mean
the actual knowledge of A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇.
"Confidentiality Agreement" shall have the meaning set forth in
Section 5.5.
-----------
"Conversion Agreement" shall have the meaning set forth in Section
-------
1.6(c).
------
"Copyrights" shall mean U.S. and foreign registered and unregistered
copyrights (including, but not limited to, those in computer software and
databases), rights of publicity and all registrations and applications to
register the same.
"Deposit Agreement" shall mean the Deposit Agreement to be entered
into among Parent, and either Citibank N.A., The Bank of New York, or ▇▇▇▇▇▇
Guaranty Trust Company, as Parent may select, as depositary, and all holders and
beneficial owners from time to time of the Parent ADSs, which agreement shall be
reasonably acceptable to the Company.
"DGCL" shall mean the Delaware General Corporation Law, as amended.
"Effective Time" shall have the meaning set forth in Section 1.2.
-----------
"Employment Agreements" shall have the meaning set forth in Section
-------
1.6.
---
"Environmental Claim" shall mean any claim, action, investigation or
notice by any person or entity alleging potential liability for investigatory,
cleanup or governmental response costs, or natural resources or property damages
relating to (i) the presence, or release into the environment, of any Materials
of Environmental Concern at any location owned or operated by the Company or
59
any Company Subsidiary, or the Parent or any Parent Subsidiary, as the case may
be, or (ii) any violation of any Environmental Law.
"Environmental Law" shall mean each federal, state, local and foreign
law and regulation relating to pollution, protection or preservation of human
health or the environment, including, without limitation, each law and
regulation relating to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to the generation,
storage, containment (whether above ground or underground), disposal, transport
or handling of Materials of Environmental Concern, or the preservation of the
environment or mitigation of adverse effects thereon and each law and regulation
with regard to record keeping, notification, disclosure and reporting
requirements respecting Materials of Environmental Concern.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with the Company would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" shall have the meaning set forth in Section 2.2(a).
--------------
"Exchange Fund" shall have the meaning set forth in Section 2.2(b).
--------------
"Exchange Rate" for any date shall mean the official exchange rate
between U.S. Dollars and Euros, as announced by the Bank of Finland on such
date.
"Expenses" shall mean the reasonable and documented expenses of a
party incurred in connection with the negotiation and execution of this
Agreement and the transactions contemplated hereby (including but not limited
to, reasonable fees and expenses of counsel and accountants, and out-of-pocket
expenses and reasonable fees of financial advisors), but not exceeding the sum
of $1,000,000 in the aggregate.
"Finnish Companies Act" shall mean the Companies Act of 1978, as
amended, in Finland.
"Finnish Financial Supervision" shall mean the Financial Supervision
Authority of Finland.
"Finnish GAAP" shall mean generally accepted accounting principles of
the Republic of Finland, as in effect from time to time.
60
"Finnish Trade Registry" shall mean the Trade Register Department of
Finnish National Board of Patents and Registration.
"Form F-4" shall have the meaning set forth in Section 3.19(a).
---------------
"Governmental Entity" shall mean a court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency.
"HSE" shall mean the Helsinki Exchanges.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended.
"Indemnified Liabilities" shall have the meaning set forth in Section
-------
5.17(a).
-------
"Indemnified Party" shall have the meaning set forth in Section
-------
5.17(a).
-------
"Intellectual Property" shall mean all of the following: Trademarks,
Patents, Copyrights and Trade Secrets.
"Liens" shall have the meaning set forth in Section 3.2.
-----------
"Listing Particulars" shall have the meaning set forth in Section
-------
3.19.
-----
"Lock-Up Agreement" shall have the meaning set forth in Section
-------
1.6(e).
-----
"Major Company Shareholders" shall mean A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
"Major Parent Shareholders" shall mean Jalo ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ Jukko and Topi ▇▇▇▇▇▇▇▇.
"Market Act" shall have the meaning set forth in Section 3.19.
-------------
"Materials of Environmental Concern" shall mean toxic or hazardous
substances, materials or wastes, solid wastes; petroleum, petroleum derivatives
and petroleum products; asbestos or asbestos-containing materials;
polychlorinated biphenyls; radon or lead or lead-based paints or materials.
"MBCA" shall mean the Michigan Business Corporation Act, as amended.
61
"Merger" shall mean the merger of Merger Sub into the Company
described in Section 1.1.
-----------
"Merger Consideration" shall have the meaning set forth in Section
-------
2.1(c).
------
"Merger Sub" shall have the meaning set forth in the first paragraph
of this Agreement.
"Merger Sub Common Stock" shall mean common stock, par value $.01 per
share, of Merger Sub.
"Non-U.S. Monopoly Laws" shall mean any applicable non-U.S. laws
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade.
"Order" means any decree, judgment, injunction, writ or similar
judicial or administrative action and whether temporary, preliminary or
permanent
"Parent" shall have the meaning set forth in the first paragraph of
this Agreement.
"Parent Acquisition Proposal" shall mean any proposal or offer to
acquire all or a substantial part of the business or properties of the Parent or
all or a substantial portion of the capital stock of the Parent, whether by
merger, tender offer, exchange offer, sale of securities or assets, or similar
transactions involving the Parent or any Subsidiary, division or operating or
principal business unit of the Parent.
"Parent ADRs" shall have the meaning set forth in Section 2.1(c).
--------------
"Parent ADSs" shall have the meaning set forth in Section 2.1(c).
---------------
"Parent Agreements" shall have the meaning set forth in Section 4.21.
------------
"Parent Average Price" shall have the meaning set forth in Section
-------
2.1(d).
------
"Parent Balance Sheet Date" shall mean the date of the most recent
audited balance sheet of the Parent and its consolidated subsidiaries included
in the Parent Financial Statements.
"Parent Disclosure Documents" shall have the meaning set forth in
Section 3.19.
------------
62
"Parent Disclosure Schedule" shall mean the disclosure schedule of
even date herewith prepared and signed by Parent and delivered to the Company
simultaneously with the execution hereof.
"Parent Exclusive Superior Proposal" shall have the meaning set forth
in Section5.9(a).
-------------
"Parent Financial Statements" shall mean the financial statements
(including any related notes thereto) of the Parent included in the Parent
Public Reports.
"Parent Inclusive Superior Proposal" shall have the meaning set forth
in Section 5.9(a).
--------------
"Parent Intellectual Property" shall mean all Intellectual Property
that is necessary to conduct the business of Parent and its Subsidiaries as
presently conducted.
"Parent Material Adverse Effect" shall mean any event, change,
occurrence, effect, fact or circumstance that is or may reasonably be expected
to be materially adverse to (i) the ability of Parent to perform its obligations
under this Agreement or to consummate the Transactions, or (ii) the business,
tangible assets, liabilities, results of operations or financial condition of
Parent and its Subsidiaries, taken as a whole, other than any event, change,
occurrence, effect, fact or circumstance (A) relating to the economy or
securities markets of Finland or any other region in general, (B) relating to
changes in conditions generally applicable to the industries in which Parent and
its Subsidiaries are involved, (C) resulting from entering into this Agreement
or the consummation of the Transactions or the announcement thereof, or (D)
relating to its business, financial condition or results of operations that has
been disclosed in writing to the other party prior to the date of this
Agreement.
"Parent Option" shall mean an option to purchase Parent Ordinary
Shares, including warrants issued under the Parent's 1999 Warrant Plan.
"Parent Ordinary Shares" shall mean validly issued, fully paid and
non-assessable ordinary A shares of Parent.
"Parent Public Reports" shall mean (i) Parent's annual reports for its
fiscal year ended December 31, 1999, as filed with the Finnish Trade Registry,
(ii) Parent's quarterly reports for each fiscal quarter subsequent to December
31, 1999 as submitted to the Finnish Financial Supervision, (iii) the Parent
Disclosure Documents, and (iv) all other reports, schedules, registration
statements and other documents filed by Parent with the Finnish Trade Registry
or the Finnish Financial Supervision or the HSE.
"Parent Recommendation" shall have the meaning set forth in Section
-------
5.3(b).
-------
63
"Parent Shareholder Agreement" shall mean the agreement, dated as of
the date hereof, among the Major Parent Shareholders and the Company pursuant to
which each Major Parent Shareholder has granted the Company a proxy with respect
to the voting of the Parent Ordinary Shares and the Parent Series K Shares upon
the terms and subject to the conditions set forth therein.
"Parent Shareholder Meeting" shall have the meaning set forth in
Section 5.3(b).
--------------
"Parent Superior Proposal" shall mean a Parent Acquisition Proposal
which satisfies both subsection (x) and subsection (y) of Section 5.9(a).
--------------
"Parent's knowledge" or "best knowledge of the Parent" shall mean the
actual knowledge of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇.
"Patents" shall mean issued U.S. and foreign patents and pending
patent applications, patent disclosures, and any and all divisions,
continuations, continuations-in-part, reissues, reexaminations, and extension
thereof, any counterparts claiming priority therefrom, utility models, patents
of importation/confirmation, certificates of invention and like statutory
rights.
"Person" shall mean a natural person, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Entity or other entity
or organization.
"Plan" shall have the meaning set forth in Section 3.12(a).
---------------
"Prospectus" shall mean the prospectus of Parent to be prepared by
Parent and included in the Registration Statement filed by Parent with the SEC
pursuant to Section 5.3(c), together with all amendments and supplements thereto
--------------
and including the exhibits thereto.
"Proxy Statement" shall mean the proxy statement of the Company
prepared by the Company and included in the Registration Statement to be filed
by Parent with the SEC pursuant to Section 5.3(c), together with all amendments
--------------
and supplements thereto and including the exhibits thereto.
"Registration Statement" shall have the meaning set forth in Section
-------
3.19.
-----
"SEC" shall mean the United States Securities and Exchange Commission.
"Section 368 Reorganization" shall have the meaning set forth in the
fifth "whereas" clause of this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
64
"Series K Shares" shall mean validly issued, fully paid and non-
assessable Series K shares of Parent.
"Shares" shall mean shares of common stock, no par value, issued by
the Company.
"Subsidiary" shall mean, with respect to any party, any corporation or
other organization, whether incorporated or unincorporated, of which (a) at
least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries or (b) such party or any other Subsidiary of such party is a
general partner (excluding any such partnership where such party or any
Subsidiary of such party does not have a majority of the voting interest in such
partnership).
"Surviving Corporation" shall have the meaning set forth in Section
-------
1.1.
---
"Tax" or "Taxes" shall mean all taxes, charges, fees, duties, levies,
penalties or other assessments imposed by any federal, state, local or foreign
governmental authority, including, but not limited to, income, gross receipts,
excise, property, sales, gain, use, license, custom duty, unemployment, capital
stock, transfer, franchise, payroll, withholding, social security, minimum
estimated, and other taxes, and shall include interest, penalties or additions
attributable thereto.
"Tax Certificates" shall have the meaning set forth in Section 5.13
------------
(b).
---
"Tax Return" shall mean any material return or report relating to
Taxes.
"Termination Date" shall have the meaning set forth in Section
-------
7.1(d)(i).
---------
"Termination Fee" shall mean the sum of $6,400,000 in U.S. currency.
"Title IV Plan" shall mean a Plan that is subject to Section 302 or
Title IV of ERISA or Section 412 of the Code.
"Trademarks" shall mean U.S. and foreign registered and unregistered
trademarks, trade dress, service marks, logos, trade names, corporate names and
all registrations and applications to register the same.
"Trade Secrets" shall mean all categories of trade secrets as defined
in the Uniform Trade Secrets Act including, but not limited to, business
information.
"Trading Day" shall mean any day on which securities are traded on the
HSE.
65
"Transactions" shall mean the transactions provided for or
contemplated by this Agreement, including, without limitation, the Company
Shareholder Agreement, the Parent Shareholder Agreement, the Conversion
Agreement and the Merger.
"U.S. GAAP" shall mean United States generally accepted accounting
principles.
"Voting Debt" shall mean indebtedness having general voting rights and
debt convertible into securities having such rights.
Section 8.2 Interpretation.
--------------
(a) When a reference is made in this Agreement to a section or
article, such reference shall be to a section or article of this Agreement
unless otherwise clearly indicated to the contrary.
(b) Whenever the words "include", "includes" or "including" are used
in this Agreement they shall be deemed to be followed by the words "without
limitation."
(c) The words "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit and schedule references are to the articles,
sections, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.
(d) The plural of any defined term shall have a meaning correlative to
such defined term, and words denoting any gender shall include all genders.
Where a word or phrase is defined herein, each of its other grammatical forms
shall have a corresponding meaning.
(e) A reference to any party to this Agreement or any other agreement
or document shall include such party's successors and permitted assigns.
(f) A reference to any legislation or to any provision of any
legislation shall include any modification or re-enactment thereof, any
legislative provision substituted therefor and all regulations and statutory
instruments issued thereunder or pursuant thereto.
(g) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
66
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Modification. This Agreement may be
--------------------------
amended by the parties at any time before or after the Company Shareholder
Approval or the Parent Shareholder Approval; provided, however, that after any
--------- -------
such approval, there shall not be made any amendment that by law requires
further approval by the shareholders of the Company or the Parent without the
further approval of such shareholders. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties.
Section 9.2 Representations and Warranties. None of the
------------------------------
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Effective Time. The foregoing sentence shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
Section 9.3 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
Eimo Oyj
▇▇▇▇▇▇▇▇ ▇
▇▇▇-▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
Telecopy No.: 011-3583-850-5405
with a copy (which shall not constitute notice) to:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
Promenade II, Suite 3100
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
67
if to the Company, to:
Triple S Plastics, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.4 Counterparts; Telecopier. This Agreement and the
------------------------
agreements referred to herein may be executed in one or more counterparts, all
of which together shall be considered one and the same agreement. Transmission
by telecopier of an executed counterpart of the Agreement and such other
agreements shall be deemed to constitute due and sufficient delivery of such
counterparts.
Section 9.5 Entire Agreement; No Third Party Beneficiaries. This
----------------------------------------------
Agreement and the Confidentiality Agreement (including the documents and the
instruments referred to herein and therein): (a) constitute the entire agreement
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof and thereof, and (b)
except as provided in Article II, Section 5.7, Section 5.16, Section 5.17 and
---------- ----------- ------------ ------------
Section 5.19 are not intended to confer upon any person other than the parties
-------------
hereto and thereto any rights or remedies hereunder.
Section 9.6 Severability. Any term or provision of this Agreement
------------
that is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible to the
fullest extent permitted by applicable law in an acceptable manner to the end
that the Transactions are fulfilled to the extent possible.
68
Section 9.7 Governing Law. This Agreement shall be governed by and
-------------
construed and interpreted in accordance with the laws of the State of Delaware
without giving effect to the principles of conflicts of law thereof.
Section 9.8 Enforcement and Interpretation. The parties agree that
------------------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
interpret or enforce specifically the terms and provisions of this Agreement in
any court of the United States located in the State of Delaware or in Delaware
state court, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the parties hereto (a)
consents to submit itself to the exclusive personal jurisdiction of any Federal
court located in the State of Delaware or any Delaware state court in the event
any dispute arises out of this Agreement or any of the Transactions contemplated
by this Agreement (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (c) agrees that it will not bring any action relating to this Agreement or
any of the Transactions contemplated by this Agreement in any court other than a
Federal or state court sitting in the State of Delaware.
Section 9.9 WAIVER OF JURY TRIAL. EACH OF PARENT, MERGER SUB AND THE
--------------------
COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.10 Time of Essence. Each of the parties hereto hereby
---------------
agrees that, with regard to all dates and time periods set forth or referred to
in this Agreement, time is of the essence.
Section 9.11 Extension; Waiver. At any time prior to the Effective
-----------------
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) waive
compliance by the other parties with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of those rights.
Section 9.12 Assignment. Neither this Agreement not any of the
----------
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written content of the other parties, except that Merger Sub may
69
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to Parent or to any direct or indirect wholly owned
Subsidiary of Parent. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
70
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
EIMO OYJ
By ____________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice Chairman
SPARTAN ACQUISITION CORP.
By ____________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Secretary
TRIPLE S PLASTICS, INC.
By ____________________________________
Name: A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
71