________________________________________________________________________________
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
UPM-KYMMENE CORPORATION,
BLUE ACQUISITION, INC.
AND
CHAMPION INTERNATIONAL CORPORATION
Dated as of February 17, 2000
________________________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................................................................2
Section 1.1 Definitions.................................................................................2
ARTICLE II THE MERGER............................................................................................8
Section 2.1 The Merger..................................................................................8
Section 2.2 Certificate of Incorporation of the Surviving Corporation...................................9
Section 2.3 By-Laws of the Surviving Corporation........................................................9
Section 2.4 Directors and Officers of the Surviving Corporation.........................................9
Section 2.5 Closing.....................................................................................9
ARTICLE III CONVERSION OF SHARES AND RELATED MATTERS.............................................................9
Section 3.1 Exchange Ratio; Fractional Shares; Adjustments..............................................9
Section 3.2 Conversion of Capital Stock.................................................................9
Section 3.3 Procedure for Election.....................................................................10
Section 3.4 Exchange of Certificates...................................................................11
Section 3.5 Company Stock Options and Stock Rights.....................................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................16
Section 4. Representations and Warranties of the Company..............................................16
Section 4.1 Due Organization, Good Standing and Corporate Power........................................16
Section 4.2 Authorization and Validity of Agreement....................................................17
Section 4.3 Capitalization.............................................................................17
Section 4.4 Consents and Approvals; No Violations.....................................................18
Section 4.5 The Company Reports and Financial Statements...............................................19
Section 4.6 Information to be Supplied.................................................................20
Section 4.7 Absence of Certain Events..................................................................21
Section 4.8 Litigation.................................................................................21
Section 4.9 Title to Properties; Encumbrances.........................................................21
Section 4.10 Compliance with Laws.......................................................................22
Section 4.11 Company Employee Benefit Plans.............................................................22
Section 4.12 Employment Relations and Agreement.........................................................24
Section 4.13 Taxes......................................................................................24
Section 4.14 Intellectual Properties....................................................................25
Section 4.15 Broker's or Finder's Fee...................................................................26
Section 4.16 Environmental Laws and Regulations.........................................................26
Section 4.17 State Takeover Statutes; Charter Provisions...............................................27
Section 4.18 Voting Requirements; Board Approval; Appraisal Rights......................................27
Section 4.19 Rights Agreement or Plan...................................................................28
Section 4.20 Pooling Matters; Tax Treatment.............................................................28
Section 4.21 Opinion of Financial Advisor...............................................................28
Section 4.22 Trust Agreement............................................................................28
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB...............................................29
Section 5.1 Due Organization, Good Standing and Corporate Power........................................29
Section 5.2 Authorization and Validity of Agreement....................................................29
Section 5.3 Capitalization.............................................................................30
Section 5.4 Consents and Approvals; No Violations......................................................31
Section 5.5 Parent Reports and Financial Statements....................................................32
Section 5.6 Information to be Supplied.................................................................33
Section 5.7 Absence of Certain Events..................................................................33
Section 5.8 Litigation.................................................................................33
Section 5.9 Title to Properties; Encumbrances..........................................................34
Section 5.10 Compliance with Laws.......................................................................34
Section 5.11 Parent Employee Benefit Plans..............................................................34
Section 5.12 Employment Relations and Agreement.........................................................36
Section 5.13 Taxes......................................................................................37
Section 5.14 Intellectual Property......................................................................38
Section 5.15 Broker's or Finder's Fee...................................................................38
Section 5.16 Environmental Laws and Regulations.........................................................39
Section 5.17 Voting Requirements; Board Approval........................................................39
Section 5.18 Pooling Matters; Tax Treatment.............................................................39
Section 5.19 Ownership of Capital Stock.................................................................40
Section 5.20 No Prior Activities........................................................................40
Section 5.21 Opinion of Financial Advisor...............................................................40
ARTICLE VI TRANSACTIONS PRIOR TO CLOSING DATE...................................................................40
Section 6.1 Access to Information Concerning Properties and Records....................................40
Section 6.2 Confidentiality............................................................................41
Section 6.3 Conduct of the Business of the Company Pending the Closing Date............................41
Section 6.4 Conduct of the Business of Parent Pending the Closing Date.................................44
Section 6.5 The Company Shareholder Meetings; Parent Shareholder Meetings;
Preparation of Proxy Statement/Prospectus; Short Form Merger...............................47
Section 6.6 Reasonable Best Efforts....................................................................49
Section 6.7 No Solicitation............................................................................49
Section 6.8 Notification of Certain Matters............................................................51
Section 6.9 Antitrust Laws.............................................................................52
Section 6.10 Directors' and Officers' Insurance.........................................................53
Section 6.11 Public Announcements.......................................................................54
Section 6.12 Transfer Tax...............................................................................55
Section 6.13 NYSE Listing...............................................................................55
Section 6.14 HSE Listing................................................................................55
Section 6.15 Tax and Accounting Treatment...............................................................55
Section 6.16 Affiliates of Parent and the Company.......................................................56
Section 6.17 Employee Benefits..........................................................................56
Section 6.18 Governance Matters.........................................................................58
Section 6.19 Section 16 Matters.........................................................................58
Section 6.20 Integration Team...........................................................................59
Section 6.21 Parent Treasury Stock Option Agreement.....................................................59
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB........................................59
Section 7.1 Conditions Precedent to Obligations of Parent and Merger Sub...............................59
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.................................................62
Section 8.1 Conditions Precedent to Obligations of the Company.........................................62
ARTICLE IX TERMINATION AND ABANDONMENT..........................................................................64
Section 9.1 Termination................................................................................64
Section 9.2 EffectofTermination........................................................................66
Section 9.3 Payment of Certain Fees....................................................................66
ARTICLE X MISCELLANEOUS.........................................................................................68
Section 10.1 Representations and Warranties............................................................68
Section 10.2 Extension; Waiver.........................................................................68
Section 10.3 Notices...................................................................................68
Section 10.4 Entire Agreement..........................................................................69
Section 10.5 Binding Effect; Benefit; Assignment.......................................................69
Section 10.6 Amendment and Modification................................................................70
Section 10.7 Further Actions...........................................................................70
Section 10.8 Headings..................................................................................70
Section 10.9 Enforcement...............................................................................70
Section 10.10 Counterparts..............................................................................70
Section 10.11 Applicable Law............................................................................70
Section 10.12 Severability..............................................................................70
Section 10.13 Waiver of Jury Trial......................................................................71
EXHIBITS
EXHIBIT A -- Company Stock Option Agreement
EXHIBIT B -- Parent Treasury Stock Option Agreement
EXHIBIT C -- Parent Stock Option Agreement
EXHIBIT D -- Affiliates'Letter Relating to Pooling (Company)
EXHIBIT E -- Affiliates' Letter Relating to Pooling (Parent)
EXHIBIT F -- Amendment to Parent's Articles of Association
SCHEDULE
Company Disclosure Letter
Parent Disclosure Letter
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of February 17, 2000 (this
"Agreement"), by and among UPM-KYMMENE CORPORATION, a company organized under
the laws of the Republic of Finland ("Parent"), BLUE ACQUISITION, INC., a New
York corporation and a direct wholly-owned subsidiary of Parent ("Merger Sub"),
and CHAMPION INTERNATIONAL CORPORATION, a New York corporation (the "Company").
WHEREAS, the Boards of Directors of Parent and the Company each have
determined that it is advisable and in the best interests of each corporation
and their respective shareholders to effect a business combination between
Parent and the Company in a merger of equals in order to achieve long-term
strategic and financial benefits, and accordingly have agreed to effect the
merger of Merger Sub with and into the Company, with the Company as the
surviving corporation, upon the terms and subject to the conditions set forth
herein (the "Merger");
WHEREAS, the parties hereto intend that the Merger provided for herein
shall qualify for U.S. federal income tax purposes as a reorganization (a "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;
WHEREAS, as a condition and inducement to Parent's and Merger Sub's
willingness to enter into this Agreement, Parent and the Company are
simultaneously entering into and delivering the Company Stock Option Agreement
in the form attached hereto as Exhibit A (the "Company Stock Option Agreement");
WHEREAS, as a condition and inducement to the Company's willingness to
enter into this Agreement, Parent and the Company are simultaneously entering
into and delivering (i) the Stock Option Agreement in the form attached hereto
as Exhibit B (the "Parent Treasury Stock Option Agreement") and (ii) the Stock
Option Agreement in the form attached hereto as Exhibit C (the "Parent Stock
Option Agreement", and together with the Parent Treasury Stock Option Agreement,
the "Parent Stock Option Agreements"); and
WHEREAS, by resolutions duly adopted, the respective Boards of Directors of
the Company, Parent and Merger Sub have approved and adopted this Agreement, the
Company Stock Option Agreement, the Parent Stock Option Agreements and the
transactions contemplated hereby and thereby;
NOW THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. When used in this Agreement, the following terms
shall have the respective meanings specified therefor below (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
"Acquisition Agreement" shall have the meaning set forth in Section 6.7(b).
"ADS Consideration" shall have the meaning set forth in Section 3.2(c).
"Affiliate" of any Person shall mean any Person directly or indirectly
controlling, controlled by, or under common control with, such Person; provided
that, for the purposes of this definition, "control" (including with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or partnership
interests, by contract or otherwise.
"Agreement" shall have the meaning set forth in the preamble hereto.
"Amended Articles" shall have the meaning set forth in Section 6.18(a).
"Antitrust Authorities" shall have the meaning set forth in Section 6.9(d).
"Antitrust Law" shall have the meaning set forth in Section 6.9(d).
"Articles Amendment" shall have the meaning set forth in Section 6.18(a).
"Authorization" shall mean any consents, approvals and actions of, filings
with and notices to any Governmental Authority.
"BCL" shall have the meaning set forth in Section 2.1(a).
"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 of Merger" shall have the meaning set forth in Section 2.1(a).
"Certificate" shall have the meaning set forth in Section 3.2(c).
"Claims" shall have the meaning set forth in Section 4.16.
"Closing" shall have the meaning set forth in Section 2.5.
"Closing Date" shall have the meaning set forth in Section 2.5.
"Code" shall have the meaning set forth in the second recital hereto.
"Commission" shall mean the U.S. Securities and Exchange Commission.
"Company" shall have the meaning set forth in the preamble hereto.
"Company Common Stock" shall mean the Company's common stock, par value
$0.50 per share.
"Company Director" shall have the meaning set forth in Section 6.18(b).
"Company Disclosure Letter" shall have the meaning set forth in Section 4.
"Company Employee Benefit Plans" shall have the meaning set forth in
Section 4.11(a).
"Company Intellectual Property" shall have the meaning set forth in Section
4.14(a).
"Company Material Adverse Effect" shall mean any event, change, occurrence,
effect, fact or circumstance that is materially adverse to (i) the ability of
the Company to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby or (ii) the business, assets, liabilities,
results of operations or financial condition of the Company and its
Subsidiaries, taken as a whole, but shall exclude any material adverse effect
arising out of (i) any change in (x) U.S. or global economic or industry
conditions, (y) changes in U.S. or global financial markets or conditions, (z)
any generally applicable change in law, rule or regulation or U.S. GAAP or
interpretation of any of the foregoing and/or (ii) the announcement of this
Agreement or the transactions contemplated hereby.
"Company Multiemployer Plans" shall have the meaning set forth in Section
4.11(b).
"Company Options" shall mean the options to purchase shares of the Company
Common Stock, whether issued pursuant to a Company Employee Benefit Plan or
otherwise.
"Company Property" shall have the meaning set forth in Section 4.16.
"Company Recommendation" shall have the meaning set forth in Section
6.5(a).
"Company SEC Reports" shall have the meaning set forth in Section 4.5(a).
"Company Securities" shall mean shares of the Company Common Stock and the
Company Options.
"Company Shareholder Approval" shall mean the approval of not less than
two-thirds of the vote of all outstanding shares of Company Common Stock of this
Agreement and the Merger at the Company Shareholder Meeting.
"Company Shareholder Meeting" shall have the meaning set forth in Section
6.5(a).
"Company Stock Option Agreement" shall have the meaning set forth in the
fourth recital hereto.
"Company Stock Plans" shall have the meaning set forth in Section
3.5(a)(i).
"Company Stock Rights" shall have the meaning set forth in Section
3.5(a)(ii).
"Competition Act" shall have the meaning set forth in Section 4.4
"Confidentiality Agreement" shall have the meaning set forth in Section
6.2.
"Contracts" shall have the meaning set forth in Section 4.4.
"Deposit Agreement" shall mean the Amended and Restated Deposit Agreement,
dated as of June 29, 1999, among Parent, Citibank N.A., as depositary, and all
holders and beneficial owners from time to time of the Parent ADSs.
"Effective Time" shall have the meaning set forth in Section 2.1(a).
"Election Date" shall have the meaning set forth in Section 3.3(a).
"Environmental Claims" shall have the meaning set forth in Section 4.16.
"Environmental Law" shall have the meaning set forth in Section 4.16.
"ERISA" shall have the meaning set forth in Section 4.11(a).
"European Antitrust Laws" shall have the meaning set forth in Section 4.4.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Agent" shall have the meaning set forth in Section 3.3(a).
"Exchange Fund" shall have the meaning set forth in Section 3.4(a).
"Exchange Rate" means the average currency exchange rate of the Euro to the
US dollar based upon the noon buying rate in the City of New York for cable
transfers in foreign currencies as announced by the Federal Reserve Bank of New
York for customs purposes over the 10 consecutive Trading Days ending on the
second Trading Day immediately prior to the Effective Time.
"Exchange Ratio" shall have the meaning set forth in Section 3.1(a).
"Exon-▇▇▇▇▇▇" shall have the meaning set forth in Section 4.4.
"Expenses" shall have the meaning set forth in Section 9.3(b).
"Finnish GAAP" shall mean generally accepted accounting principles of
Finland, as in effect from time to time.
"Form F-4" shall have the meaning set forth in Section 5.6(a).
"Funding Amount" shall have the meaning set forth in Section 4.22.
"Governmental Authority" shall have the meaning set forth in Section 4.4.
"Hazardous Materials" shall have the meaning set forth in Section 4.16.
"HSE" shall mean the Helsinki Stock Exchange.
"HSR Act" shall have the meaning set forth in Section 4.4.
"Indemnified Parties" shall have the meaning set forth in Section 6.10(b).
"Issuance Obligation" shall have the meaning set forth in Section 4.3(a).
"Laws" shall have the meaning set forth in Section 4.4.
"Liens" shall have the meaning set forth in Section 5.3(b).
"Listing Particulars" shall have the meaning set forth in Section 4.6(b).
"Market Act" shall have the meaning set forth in Section 4.6(b).
"Merger" shall have the meaning set forth in the first recital hereto.
"Merger Consideration" shall have the meaning set forth in Section 3.2(c).
"Merger Sub" shall have the meaning set forth in the preamble hereto.
"Merger Sub Common Stock" shall mean Merger Sub's common stock, par value
$0.01 per share.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Options" shall have the meaning set forth in Section 3.5(a)(i).
"Orders" shall have the meaning set forth in Section 4.4.
"Orders of Disposition" shall have the meaning set forth in Section
6.9(b)(3).
"Ordinary Share Consideration" shall have the meaning set forth in Section
3.2(c).
"Ordinary Share Election" shall have the meaning set forth in Section
3.3(a).
"Ordinary Share Election Form" shall have the meaning set forth in Section
3.3(a).
"Parent" shall have the meaning set forth in the preamble hereto.
"Parent ADRs" shall have the meaning set forth in Section 3.2(c).
"Parent ADSs" shall have the meaning set forth in Section 3.2(c).
"Parent Disclosure Documents" shall have the meaning set forth in Section
4.6(b).
"Parent Disclosure Letter" shall have the meaning set forth in Section 5.
"Parent Employee Benefit Plans" shall have the meaning set forth in Section
5.11(a).
"Parent Intellectual Property" shall have the meaning set forth in Section
5.14(a).
"Parent Material Adverse Effect" shall mean any event, change, occurrence,
effect, fact or circumstance that is materially adverse to (i) the ability of
Parent to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby or (ii) the business, assets, liabilities,
results of operations or financial condition of Parent and its Subsidiaries,
taken as a whole, but shall exclude any material adverse effect arising out of
(i) any change in (x) U.S., Finnish or global economic or industry conditions,
(y) changes in U.S., Finnish or global financial markets or conditions, (z) any
generally applicable change in law, rule or regulation, Finnish GAAP or U.S.
GAAP or interpretation of any of the foregoing and/or (ii) the announcement of
this Agreement or the transactions contemplated hereby.
"Parent Multiemployer Plan" shall have the meaning set forth in Section
5.11(b).
"Parent Options" shall have the meaning set forth in Section 6.4(b)(iii).
"Parent Ordinary Shares" shall mean validly issued, fully paid and
nonassessable ordinary shares, with no nominal value, of Parent.
"Parent Property" shall have the meaning set forth in Section 5.16.
"Parent Public Reports" shall have the meaning set forth in Section 5.5(a).
"Parent Recommendation" shall have the meaning set forth in Section 6.5(b).
"Parent Share Price" shall mean the product of (x) the weighted average
price per Parent Ordinary Share on the HSE for each of the ten consecutive
Trading Days ending on the second Trading Day immediately preceding the date of
the Effective Time multiplied by (y) the Exchange Rate.
"Parent Share Rights" shall have the meaning set forth in Section
3.5(a)(ii).
"Parent Shareholder Approval" shall have the meaning set forth in Section
5.17(a).
"Parent Shareholder Meeting" shall have the meaning set forth in Section
6.5(b).
"Parent Shares" shall have the meaning set forth in Section 3.2(c).
"Parent Stock Option Agreement" and "Parent Stock Option Agreements" shall
have the meanings set forth in the fifth recital hereto.
"Parent Treasury Stock Option Agreement" shall have the meaning set forth
in the fifth recital hereto.
"Permits" shall have the meaning set forth in Section 4.10(b).
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, a limited
liability company, a group and a government or other department or agency
thereof.
"Preferred Stock" shall have the meaning set forth in Section 4.3(a).
"Proxy Statement Prospectus" means the joint statement proxy prospectus
included in the Registration Statement relating to the Company Shareholder
Meeting.
"Registration Statement" shall have the meaning set forth in Section
5.6(a).
"Release" shall have the meaning set forth in Section 4.16.
"Returns" shall have the meaning set forth in Section 4.13(a).
"Rule 145 Affiliates" shall have the meaning set forth in Section 6.16.
"Rule 145 Affiliate Agreement" shall have the meaning set forth in Section
6.16(a).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Significant Subsidiary" with respect to a Person shall mean any Subsidiary
that constitutes a "significant subsidiary" of such Person within the meaning of
Rule 1-02 of Regulation S-X of the Exchange Act.
"Subsidiary" with respect to a Person shall mean (x) any partnership of
which such Person or any of its Subsidiaries is a general partner or (y) any
other entity in which such Person or any of its Subsidiaries owns or has the
power to vote more than 50% of the equity interests in such entity having
general voting power to participate in the election of the governing body of
such entity.
"Superior Proposal" shall have the meaning set forth in Section 6.7(a).
"Surviving Corporation" shall have the meaning set forth in Section 2.1(b).
"Takeover Proposal" shall have the meaning set forth in Section 6.7(a).
"Taxes" shall have the meaning set forth in Section 4.13(a).
"Termination Date" shall have the meaning set forth in Section 9.1(d)(i).
"Third Party Acquisition Event" shall have the meaning set forth in Section
9.3(b).
"368 Reorganization" shall have the meaning set forth in the second recital
hereto.
"Trading Day" shall mean any day on which securities are traded on the NYSE
and the HSE.
"Transfer Taxes" shall have the meaning set forth in Section 6.12.
"Trust Agreement" shall have the meaning set forth in Section 4.22.
"U.S. GAAP" shall mean generally accepted accounting principles of the
United States of America, as in effect from time to time.
"Voting Debt" shall have the meaning set forth in Section 4.3(a).
ARTICLE II
THE MERGER
Section 2.1 The Merger. (a) Upon the terms and subject to the conditions of
this Agreement, as soon as practicable after satisfaction or, to the extent
permitted hereby, waiver of all conditions to the Merger set forth herein, a
certificate of merger (the "Certificate of Merger") shall be duly prepared,
executed and acknowledged by Merger Sub and the Company in accordance with the
New York Business Corporation Law (the "BCL") and shall be filed with the
Secretary of State of New York. The Merger shall become effective upon the
filing of the Certificate of Merger (or at such later time reflected in such
Certificate of Merger as shall be agreed to by Parent and the Company). The date
and time when the Merger shall become effective is hereinafter referred to as
the "Effective Time."
(b) At the Effective Time, Merger Sub shall be merged with and into the
Company and the separate corporate existence of Merger Sub shall cease, and the
Company shall continue as the surviving corporation under the laws of the State
of New York under the name of "Blue Corporation" (the "Surviving Corporation").
Following the Effective Time, Parent shall (i) take all actions necessary to
change its name to "Blue Corporation" and (ii) for such period of time as the
executive management of Parent shall determine, continue to maintain the
headquarters of the Surviving Corporation in Stamford, Connecticut.
(c) From and after the Effective Time, the Merger shall have the effects
set forth in this Agreement and in Section 906 of BCL.
Section 2.2 Certificate of Incorporation of the Surviving Corporation. The
Certificate of Incorporation of the Merger Sub, as in effect immediately prior
to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation.
Section 2.3 By-Laws of the Surviving Corporation. The By-Laws of the Merger
Sub, as in effect immediately prior to the Effective Time, shall be the By-Laws
of the Surviving Corporation.
Section 2.4 Directors and Officers of the Surviving Corporation. At the
Effective Time, the directors of Merger Sub immediately prior to the Effective
Time plus at least one person designated by the Company shall be the directors
of the Surviving Corporation, each of such directors to hold office, subject to
the applicable provisions of the BCL and the Certificate of Incorporation and
By-Laws of the Surviving Corporation, until the next annual shareholders'
meeting of the Surviving Corporation and until their respective successors shall
be duly elected or appointed and qualified. At the Effective Time, the officers
of the Company immediately prior to the Effective Time shall, subject to the
applicable provisions of the Certificate of Incorporation and By-Laws of the
Surviving Corporation, be the officers of the Surviving Corporation until their
respective successors shall be duly elected or appointed and qualified.
Section 2.5 Closing. The closing of the Merger (the "Closing") shall be
held at the offices of White & Case LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as soon as practicable, but in any event within three (3)
Business Days after the last of the conditions (excluding conditions that, by
their nature, cannot be satisfied until the Closing Date) set forth in Articles
VII and VIII hereof is satisfied or waived or at such other time and date as the
parties hereto shall agree in writing. Such date is herein referred to as the
"Closing Date".
ARTICLE III
CONVERSION OF SHARES AND RELATED MATTERS
Section 3.1 Exchange Ratio; Fractional Shares; Adjustments. (a) The
"Exchange Ratio" (as the same may be adjusted pursuant to Section 3.2(e)) shall
be 1.99.
Section 3.2 Conversion of Capital Stock. At the Effective Time, by virtue
of the Merger:
(a) Cancellation of Treasury Stock and Stock Owned by Parent and Merger
Sub. All shares of Company Common Stock owned by the Company as treasury stock
and any shares of Company Common Stock owned by Parent, Merger Sub or any
Subsidiary of Parent or Merger Sub immediately prior to the Effective Time
shall, by virtue of the Merger, and without any action on the part of the holder
thereof, no longer be outstanding, shall be canceled and retired without payment
of any consideration therefor and shall cease to exist.
(b) Capital Stock of Merger Sub. Each share of Merger Sub Common Stock
outstanding immediately prior to the Effective Time shall be converted into and
become one share of common stock of the Surviving Corporation.
(c) Conversion of Company Common Stock. Except as provided in clauses (a)
and (b) of this Section 3.2, each share of Company Common Stock outstanding
immediately prior to the Effective Time shall be converted into and shall be
canceled in exchange for the right to receive from Parent pursuant to Section
3.2(d) a number of Parent Ordinary Shares equal to the Exchange Ratio, which
shall be delivered to the holders of Company Common Stock (i) in the form of
American Depositary Shares (the "Parent ADSs"), each representing the right to
receive one Parent Ordinary Share (the "ADS Consideration"), or (ii) if and to
the extent elected by any such holder, in the manner provided in Section 3.3, in
the form of Parent Ordinary Shares, in book-entry form (the "Ordinary Share
Consideration" and, together with the ADS Consideration, the "Merger
Consideration"); provided, however, that the Parent ADSs may be evidenced by one
or more American Depositary Receipts ("Parent ADRs") issued in accordance with
the Deposit Agreement. At the Effective Time, all Company Common Stock 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 Company
Common Stock shall thereafter represent only the right to receive the Merger
Consideration and the right, if any, to receive pursuant to Section 3.4(e) cash
in lieu of fractional Parent ADSs (or, if applicable, fractional Parent Ordinary
Shares) and any dividend or distribution pursuant to Section 3.4(c), 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 (such Parent Ordinary Shares or
Parent ADSs to be received by a holder may be referred to in this Agreement as
"Parent Shares").
(d) In consideration of the issue to Parent by the Surviving Corporation of
shares of common stock of the Surviving Corporation pursuant to Section 3.2(b)
hereof, Parent shall issue, in accordance with Section 3.4, such number of
Parent Ordinary Shares as is equal to the number of shares of Company Common
Stock outstanding immediately prior to the Effective Time multiplied by the
Exchange Ratio, (i) to the depositary for the Parent ADSs to permit the issuance
of Parent ADSs and (ii) if elected by any holder of Company Common Stock in the
manner provided in Section 3.3, to the holders of such Company Common Stock for
the purpose of giving effect to the delivery of the Merger Consideration
referred to in Section 3.2(c) in the form of Parent Ordinary Shares.
(e) In the event that, subsequent to the date of this Agreement but prior
to the Effective Time, the Company changes the number of shares of Company
Common Stock, or Parent changes the number of Parent Ordinary Shares or Parent
ADSs, issued and outstanding as a result of a stock split, stock combination,
stock dividend, recapitalization, redenomination of share capital or other
similar transaction, the Exchange Ratio and other items dependent thereon shall
be appropriately adjusted.
Section 3.3 Procedure for Election. (a) Prior to the Effective Time, Parent
shall appoint a bank or trust company reasonably acceptable to the Company as
exchange agent (the "Exchange Agent") for the purposes of exchanging the
Certificates for Parent ADSs or, if and to the extent elected by a holder of a
Certificate, in the manner set forth in this Section 3.3, for Parent Ordinary
Shares in book-entry form. Promptly after the Effective Time Parent will send,
or will cause the Exchange Agent to send, to each holder of record of Company
Common Stock as of the Effective Time (i) 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 Surviving Corporation or 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 or Parent
Ordinary Shares and cash in lieu of fractional Parent ADSs or Parent Ordinary
Shares and (ii) an election form and other appropriate materials (collectively,
the "Ordinary Share Election Form") providing for such holder to elect to
receive the Ordinary Share Consideration with respect to all or any portion of
such holder's shares of Company Common Stock (the "Ordinary Share Election").
Any shares of Company Common Stock with respect to which there shall not have
been effected such election by submission to the Exchange Agent of an effective,
properly completed Ordinary Share Election Form on or prior to the date
specified in such form (the "Election Date") which shall be a date that is not
more than 60 days following the date of the Effective Time, shall be converted
in the Merger into the right to receive the ADS Consideration.
(b) Record holders of shares of Company Common Stock who are nominees only
may submit a separate Ordinary Share Election Form for each beneficial owner for
whom such record holder is a nominee; provided, however, that, at the request of
Parent, such record holder shall certify to the reasonable satisfaction of
Parent that such record holder holds such shares as nominee for the beneficial
owner thereof. For purposes of this Agreement, each beneficial owner for which
an Ordinary Share Election Form is submitted will be treated as a separate
holder of shares of Company Common Stock.
Section 3.4 Exchange of Certificates. (a) Exchange Agent. Within three
Business Days following the Effective Time, Parent shall (i) allot to the
Exchange Agent, as nominee for the benefit of the holders of Company Common
Stock converted into the right to receive the Merger Consideration, the
aggregate number of Parent Ordinary Shares to be issued pursuant to Section
3.2(d) and (ii) deposit with the Exchange Agent an amount of cash sufficient to
permit the Exchange Agent to make the necessary payments of cash in lieu of
fractional Parent ADSs and Parent Ordinary Shares in accordance with Section
3.4(e) (such cash and Parent Ordinary Shares, together with any dividends or
distributions with respect thereto being hereinafter referred to as the
"Exchange Fund"), to be held for the benefit of and distributed to the holders
of Company Common Stock in accordance with this Section. The Exchange Agent
shall agree to hold such Parent Ordinary Shares and funds for delivery as
contemplated by this Section, and upon such additional terms as may be agreed
upon by the Exchange Agent, the Surviving Corporation and Parent shall cause the
Depositary to issue through and upon the instructions of the Exchange Agent, for
the benefit of the holders of shares of the Company Common Stock converted into
the ADS Consideration in accordance with Section 3.2(c), Parent ADRs
representing the number of Parent ADSs issuable pursuant to Section 3.2(c).
Neither the Company, its affiliates nor the holders of Company Common Stock
shall be responsible for any stamp duty reserve tax payable in connection with
the ADS Consideration. 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 III. Parent and
the Surviving Corporation shall replace any monies lost through an investment
made pursuant to this Section 3.4. Any interest and other income resulting from
such investments shall promptly be paid to the Surviving Corporation. All Parent
Ordinary Shares and Parent ADSs to be issued and delivered to the holders of
Company Common Stock 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-4 declared effective by the SEC.
(b) Exchange Procedures. Upon surrender of a Certificate for cancellation
to the Exchange Agent, together with the letter of transmittal referred to in
Section 3.3(a) duly executed and completed in accordance with its terms, 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 and/or that whole number of
Parent Ordinary Shares elected to be received in accordance with Section 3.3,
(ii) the amount of dividends or other distributions, if any, with a record date
on or after the Effective Time which theretofore became payable with respect to
such Parent ADSs and Parent Ordinary Shares, and (iii) the cash amount payable
in lieu of fractional Parent ADSs and Parent Ordinary Shares in accordance with
Section 3.4(e), in each case which such holder has the right to receive pursuant
to the provisions of this Article III, 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 Company Common Stock which is not registered
in the transfer records of the Company, a certificate or certificates
representing that whole number of Parent Ordinary Shares elected to be received
in accordance with Section 3.3 and/or one or more Parent ADRs representing, in
the aggregate, that whole number of Parent ADSs, plus the cash amount payable in
lieu of fractional Parent Ordinary Shares and Parent ADSs in accordance with
Section 3.4(e), may be issued to a transferee if the Certificate representing
such Company Common Stock 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 3.4(b) and subject to Section 3.4(c), each
Certificate shall, after the Effective Time, represent for all purposes only the
right to receive the whole number of Parent Ordinary Shares and/or Parent ADSs
into which the number of shares of Company Common Stock shown thereon have been
converted as contemplated by this Article III plus the cash amount payable in
lieu of fractional Parent ADSs and Parent Ordinary Shares in accordance with
Section 3.4(e). Notwithstanding the foregoing, certificates representing Company
Common Stock surrendered for exchange by any Person constituting an "Affiliate"
of the Company for purposes of Section 6.16 shall not be exchanged until Parent
has received an Affiliate Agreement (as defined in Section 6.16) as provided in
Section 6.16.
(c) Distributions With Respect To Unexchanged Shares. No dividends or 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 Ordinary Shares and Parent ADSs represented thereby and no cash payment
in lieu of fractional Parent Ordinary Shares and Parent ADSs shall be paid to
any such holder pursuant to Section 3.4(e) until the holder of record of such
Certificate shall surrender such Certificate in accordance with this Section.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the record holder of the certificates
representing Parent Ordinary Shares and 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 Ordinary Shares and 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 Ordinary Shares and 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 Ordinary Shares and Parent ADSs held by the Exchange Agent
shall be held in trust for the benefit of such holders of Certificates.
(d) No Further Ownership Rights In Company Common Stock. All Parent
Ordinary Shares and Parent ADSs issued upon the surrender for exchange of
Certificates in accordance with the terms hereof (including any cash paid
pursuant to Section 3.4(e)) shall be deemed to have been issued at the Effective
Time in full satisfaction of all rights pertaining to the shares of Company
Common Stock 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 of Company Common Stock 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 of Company Common Stock 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.
(e) No Fractional Shares. No certificate or scrip representing fractional
Parent ADSs or Parent Ordinary Shares will be issued in the Merger upon the
surrender for exchange of Certificates, and such fractional Parent ADS or Parent
Ordinary Share interests will not entitle the owner thereof to vote or to any
rights of a holder of Parent ADSs or Parent Ordinary Shares. In lieu of any such
fractional Parent ADS or Parent Ordinary Share, each holder of Certificates who
would otherwise have been entitled to a fraction of Parent ADS or Parent
Ordinary Share 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, as applicable, a cash payment in lieu of such
fractional Parent ADS or Parent Ordinary Share, as the case may be, determined
by multiplying (A) the Parent Share Price by (B) the fractional Parent ADS
interest or Parent Ordinary Share interest, as the case may be, to which such
holder would otherwise be entitled.
(f) 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 III 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, Parent Ordinary Shares, any cash in lieu of fractional Parent
ADSs and Parent Ordinary Shares and any dividends or distributions with respect
to Parent ADSs and Parent Ordinary Shares. Neither Parent nor the Surviving
Corporation shall be liable to any holder of any Certificate for Parent ADSs or
Parent Ordinary Shares (or dividends or distributions with respect to either),
or cash payable in respect of fractional Parent ADSs or Parent Ordinary Shares,
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. Any securities or amounts remaining unclaimed by holders
of Parent Ordinary Shares five years after the Effective Time (or such earlier
date immediately prior to such time as such amounts would otherwise escheat to
or become property of any governmental entity) shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation free and clear
of any claims or interest of any Person previously entitled thereto.
(g) 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, 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 it 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 of Company Common Stock formerly
represented thereby, any cash in lieu of fractional Parent ADSs or Parent
Ordinary Shares, and unpaid dividends and distributions in respect of or on
Parent ADSs or Parent Ordinary Shares deliverable in respect thereof, pursuant
to this Agreement.
(h) No Liability. None of Parent, the Surviving Corporation or the Exchange
Agent shall be liable to any Person in respect of any shares of Company Common
Stock (or dividends or distributions with respect thereto) for any amounts paid
to a public official pursuant to any applicable abandoned property, escheat or
similar law. Any amounts remaining unclaimed by any holder of Company Common
Stock immediately prior to such time when such amounts would otherwise escheat
to or become the property of any Governmental Authority (as hereinafter
defined), shall, to the extent permitted by applicable laws, become the property
of Parent, free and clear of all claims or interest of any Person previously
entitled thereto.
(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
tax law. To the extent that the Surviving Corporation or Parent so withholds
those amounts, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of Company Common Stock in respect
of which such deduction and withholding was made by the Surviving Corporation or
Parent, as the case may be.
Section 3.5 Company Stock Options and Stock Rights. (a) As soon as
practicable following the date of this Agreement, the Board of Directors of the
Company (or the appropriate committee thereof) shall adopt such resolutions,
take such actions and obtain such consents as may be required to effect the
following, effective at the Effective Time:
(i) each employee, consultant or non-employee director stock
option (each, an "Option") to purchase shares of Company Common Stock
theretofore granted under the Company's stock plans, programs,
arrangements or agreements ("Company Stock Plans") which is outstanding
and unexercised immediately prior to the Effective Time (whether or not
vested or exercisable) shall be deemed to constitute an option to
acquire, on the same terms and conditions as were applicable under such
Option (but taking into account any changes thereto, including the
acceleration thereof, provided for in the applicable Company Stock Plan
resulting from the Merger), with such modifications as may be required
under Finnish law that do not affect the economic benefits under, or
transferability of, such Option, Parent ADSs or, to the extent elected
by the holder thereof prior to the Effective Time, Parent Ordinary
Shares where (x) the number of Parent ADSs or Parent Ordinary Shares,
as applicable, purchasable upon exercise of each such option shall be
equal to the number of shares of Company Common Stock that were
purchasable under such Option immediately prior to the Effective Time
multiplied by the Exchange Ratio, and rounding to the nearest whole
Parent ADS or Parent Ordinary Share, as the case may be, and (y) the
per Parent ADS or per Parent Ordinary Share, as the case may be,
exercise price under each such Option shall be obtained by dividing the
exercise price per Share of Company Common Stock of each such Option by
the Exchange Ratio, and rounding to the nearest ▇▇▇▇▇; provided,
however, that in the case of any Option to which Section 421 of the
Code applies by reason of its qualification under Section 422 of the
Code ("qualified stock options"), the option price, the number of
shares purchasable pursuant to such Option and the terms and conditions
of exercise of such Option shall be determined in order to comply with
Section 424(a) of the Code; and
(ii) each employee and non-employee director stock unit,
deferred stock award, performance share, phantom stock award, stock
appreciation right and other right to acquire Company Common Stock or
restricted stock or any other interest in respect of Company Common
Stock under any Company Stock Plan (whether or not vested or
exercisable), other than Options ("Company Stock Rights"), outstanding
immediately prior to the Effective Time, shall be deemed to constitute
that number of stock units, deferred stock awards, performance shares,
phantom stock awards or stock appreciation rights or other
corresponding rights, including shares of restricted stock, as the case
may be, with respect to Parent ADSs or, to the extent elected by the
holder thereof prior to the Effective Time, Parent Ordinary Shares
("Parent Share Rights") equal to the number of applicable Company Stock
Rights held by such holder immediately prior to the Closing multiplied
by the Exchange Ratio, on the same terms and conditions as were
applicable under such Company Stock Right, as adjusted in accordance
with this Section 3.5(a)(ii) with such modifications as may be required
under Finnish law that do not affect the economic benefits under, or
transferability of, such Company Stock Rights; and rounding to the
nearest Parent ADS or Parent Ordinary Share, and the share value on the
grant date with respect to each Parent Share Right shall be equal to
the share value on the grant date of the corresponding Company Stock
Right as in effect immediately prior to the Effective Time, divided by
the Exchange Ratio, and rounding to the nearest ▇▇▇▇▇.
(b) Prior to the Effective Time, the Company shall use its reasonable best
efforts to take all actions (including, if appropriate, amending the terms of
the Company's stock option or compensation plans or arrangements) and obtain
such consents as are necessary to give the effect to the transactions
contemplated by Section 3.5(a).
(c) Effective at the Effective Time, Parent shall assume each Option and
Company Stock Right in accordance with the terms of the relevant stock option
plan or compensation arrangement under which it was issued and the stock option
agreement by which it is evidenced with such modifications as may be required
under Finnish law that do not affect the economic benefits under, or
transferability of, such Option and Company Stock Rights. At or prior to the
Effective Time, Parent shall take all corporate action necessary to reserve for
issuance and, upon issuance, to list on the NYSE and the HSE a sufficient number
of Parent ADSs and Parent Ordinary Shares, as the case may be, for delivery upon
exercise or vesting of the Options and Company Stock Rights assumed by it in
accordance with this Section 3.5(c). As soon as practicable after the Effective
Time, Parent shall file a registration statement on Form S-8 (or any successor
or other appropriate forms), or another appropriate form (or shall cause such
Options and Company Stock Rights to be deemed to be an option issued pursuant to
a Parent stock option or compensation plan for which a sufficient number of
Parent ADSs or Parent Ordinary Shares have previously been registered pursuant
to an appropriate registration form), with respect to the subject of such
Options and Company Stock Rights, and shall use its reasonable best efforts to
maintain the effectiveness of such registration statement(s) (and maintain the
current status of the prospectus(es) contained therein) for so long as such
Options and Company Stock Rights remain outstanding.
(d) As soon as practicable after the Effective Time, Parent shall deliver
to the holders of Options and Company Stock Rights appropriate notices setting
forth such holders' rights pursuant to the applicable Company Stock Plans, and
the agreements evidencing the grants of such Options and Company Stock Rights
shall continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 3.5 after giving effect to the Merger).
(e) Except as disclosed in writing to Parent prior to the date hereof, the
Company agrees that it will not grant any stock options, stock appreciation
rights, stock units, deferred stock awards or other rights to acquire Company
Common Stock or any other interest in Company Common Stock or any other equity
security of the Company and will not take any action to accelerate the
exercisability of Options or Company Stock Rights, and/or permit cash payments
to holders of Options or Company Stock Rights with respect to such Options or
Company Stock Rights.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4. Representations and Warranties of the Company. Except as
disclosed in (i) the Company disclosure letter delivered concurrently with the
delivery of this Agreement (the "Company Disclosure Letter") or (ii) the Company
SEC Reports (as defined below) made or filed prior to the date of this
Agreement, the Company hereby represents and warrants to Parent and Merger Sub
as follows:
Section 4.1 Due Organization, Good Standing and Corporate Power. Each of
the Company and its Significant Subsidiaries is a corporation duly organized,
validly existing and in good standing (with respect to jurisdictions which
recognize the concept of good standing) under the laws of the jurisdiction of
its incorporation and each such Person has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized, existing
and in good standing or to have such power and authority could not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect. The Company and each of its Significant Subsidiaries is duly qualified
or licensed to do business and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except in such jurisdictions
where the failure to be so qualified or licensed and in good standing could not
reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect. Other than as set forth in Section 4.1 of the Company
Disclosure Letter, the respective Certificates of Incorporation and By-Laws or
other organizational documents of the Significant Subsidiaries of the Company do
not contain any provision limiting or otherwise restricting the ability of the
Company to control its Significant Subsidiaries. Section 4.1 of the Company
Disclosure Letter sets forth a list of all Significant Subsidiaries of the
Company and their respective jurisdictions of incorporation or organization and
identifies the Company's (direct or indirect) percentage of equity ownership
therein.
Section 4.2 Authorization and Validity of Agreement. The Company has full
corporate power and authority to execute and deliver this Agreement and the
Company Stock Option Agreement, to perform its obligations hereunder and
thereunder and, in the case of this Agreement and the Parent Stock Option
Agreement, subject to obtaining the Company Shareholder Approval, to consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement, the Company Stock Option Agreement and the Parent
Stock Option Agreements by the Company, and the consummation by it of the
transactions contemplated hereby and thereby, have been duly authorized and
unanimously approved by its Board of Directors and no other corporate action on
the part of the Company is necessary to authorize the execution, delivery and
performance of this Agreement, the Company Stock Option Agreement or the Parent
Stock Option Agreements by the Company and the consummation of the transactions
contemplated hereby or thereby, other than, in the case of this Agreement,
obtaining the Company Shareholder Approval. This Agreement, the Company Stock
Option Agreement and the Parent Stock Option Agreements have been duly executed
and delivered by the Company and each is a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except to
the extent that its enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
Section 4.3 Capitalization. (a) The authorized capital stock of the Company
consists of 250,000,000 shares of Company Common Stock and 8,531,431 shares of
preferred stock, par value $ 1.00 per share (the "Preferred Stock"). At the
close of business on February 14, 2000: (i) 96,578,064 shares of Company Common
Stock were issued and outstanding; (ii) 12,738,076 shares of Company Common
Stock were reserved for issuance under the Company's stock option and stock
benefit plans and arrangements, (iii) no shares of Preferred Stock were issued
and outstanding and (iv) 15,427,059 shares of Company Common Stock were held by
the Company in its treasury. All issued and outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and nonassessable. Except as set forth in Section 4.3(a) of the Company
Disclosure Letter, there are no outstanding or authorized options, warrants,
rights, subscriptions, claims of any character, agreements, obligations,
convertible or exchangeable securities, or other commitments, contingent or
otherwise, relating to shares of capital stock or other equity interests of the
Company or any of its Subsidiaries, pursuant to which the Company or any of its
Subsidiaries is or may become obligated to issue shares of its capital stock or
other equity interests or any securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of the capital stock or other
equity interests of the Company or any of its Subsidiaries (each an "Issuance
Obligation"). There are no outstanding obligations of the Company to repurchase,
redeem or otherwise acquire any outstanding securities of the Company or any
security described in the foregoing sentence. The Company has no authorized or
outstanding bonds, debentures, notes or other indebtedness the holders of which
have the right to vote (or convertible or exchangeable into or exercisable for
securities the holders of which have the right to vote) with the shareholders of
the Company on any matter ("Voting Debt"). Except as set forth in Section 4.3(a)
of the Company Disclosure Letter, there are no restrictions of any kind which
prevent or restrict the payment of dividends by the Company or any of its
Subsidiaries and there are no limitations or restrictions on the right to vote,
sell or otherwise dispose of such capital stock or other ownership interests.
(b) All of the issued and outstanding shares of capital stock of each
Significant Subsidiary are validly existing, fully paid and non-assessable.
Except as set forth in the Company SEC Reports or Section 4.3(b) of the Company
Disclosure Letter, no Significant Subsidiary of the Company has outstanding
Voting Debt and no Significant Subsidiary of the Company is bound by, obligated
under, or party to an Issuance Obligation with respect to any security of the
Company or any Significant Subsidiary of the Company and there are no
obligations of the Company or any of its Significant Subsidiaries to repurchase,
redeem or otherwise acquire any outstanding securities of any of its Significant
Subsidiaries or any capital stock of, or other ownership interests in, any of
its Significant Subsidiaries.
(c) Except for the Company's interest in its Significant Subsidiaries, and
as set forth in the Company SEC Reports or Section 4.3(c) of the Company
Disclosure Letter, the Company does not directly or indirectly own any equity or
similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation, partnership,
joint venture, limited liability company or other business association or entity
which is material to the Company and its Subsidiaries, taken as a whole.
Section 4.4 Consents and Approvals; No Violations. Assuming (i) the filings
required under applicable Brazilian antitrust or competition laws, the
Competition Act Canada (the "Competition Act") and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), are made and the
waiting period thereunder (if applicable) has been terminated or has expired,
(ii) voluntary notification under Section 721 of the Defense Production Act of
1950, as amended ("Exon-▇▇▇▇▇▇"), is made, (iii) the prior notification and
reporting requirements of the German Act Against Restraints in Competition and
other antitrust laws of the member states of the European Union as may be
applicable (collectively, the "European Antitrust Laws") are satisfied and any
antitrust filings/notifications which must or may be effected at the national
level in countries having jurisdiction are made and any applicable waiting
periods thereunder have been terminated or expired, (iv) the prior notification
and reporting requirements of other antitrust or competition laws as may be
applicable, are satisfied and any antitrust filings/notifications which must or
may be effected in countries having jurisdiction are made, (v) the applicable
requirements of the Securities Act and the Exchange Act are met, (vi) the
requirements under any applicable foreign or state securities or blue sky laws
are met, (vii) the filing of the Certificate of Merger and other appropriate
merger documents, if any, as required by the BCL, are made, (viii) in the case
of this Agreement the Company Shareholder Approval is received, and (ix) the
requirements of any applicable state law relating to the transfer of
contaminated property are met, the execution and delivery of this Agreement, the
Company Stock Option Agreement and the Parent Stock Option Agreements by the
Company and the consummation by the Company of the transactions contemplated
hereby and thereby do not and will not: (A) violate or conflict with any
provision of the Company's Certificate of Incorporation, or the Company's
By-Laws or the comparable governing documents of any of its Subsidiaries; (B)
violate or conflict with any statute, law, ordinance, rule or regulation
(together, "Laws") or any order, judgment, decree, writ, permit or license
(together, "Orders"), of any court, tribunal, arbitrator, authority, agency,
commission, official or other instrumentality of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision (a "Governmental Authority") applicable to the Company or any of its
Subsidiaries or by which any of their respective properties or assets may be
bound; (C) except as set forth in Section 4.4 of the Company Disclosure Letter,
require any filing with, or permit, consent or approval of, or the giving of any
notice to, any Governmental Authority; or (D) except as set forth in Section 4.4
of the Company Disclosure Letter, result in a violation or breach of, conflict
with, constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, payment or
acceleration) under, or result in the creation of any Lien upon any of the
properties or assets of the Company or any of its Significant Subsidiaries
under, or give rise to any obligation, right of termination, cancellation,
acceleration or increase of any obligation or a loss of a material benefit
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, franchise, permit, agreement, contract, lease, franchise
agreement or other instrument or obligation of any kind ("Contracts") to which
the Company or any of its Significant Subsidiaries is a party, or by which any
such Person or any of its properties or assets are bound, excluding from the
foregoing clauses (B), (C) and (D) conflicts, violations, breaches, defaults,
rights of payment and reimbursement, terminations, modifications, accelerations
and creations and impositions of Liens which could not reasonably be expected
to, individually or in the aggregate, have a Company Material Adverse Effect or
prevent, materially impair, or materially delay the ability of the Company to
consummate the transactions contemplated by this Agreement.
Section 4.5 The Company Reports and Financial Statements. (a) Since
December 31, 1997, the Company and, to the extent applicable, its Subsidiaries,
have filed all forms, reports and documents with the SEC required to be filed by
it pursuant to the federal securities laws and the SEC rules and regulations
thereunder, and all forms, reports, schedules, statements, registration
statements and other documents filed with the SEC by the Company and, to the
extent applicable, its Subsidiaries have complied in all material respects with
all applicable requirements of the federal securities laws and the SEC rules and
regulations promulgated thereunder. The Company has, prior to the date of this
Agreement, made available to Parent true and complete copies of all forms,
reports, registration statements and other filings filed by the Company and its
Subsidiaries with the SEC since December 31, 1997 (such forms, reports,
registration statements and other filings, together with any exhibits, any
amendments thereto and information incorporated by reference therein, are
sometimes collectively referred to as the "Company SEC Reports"), which are all
the documents (other than preliminary materials) that the Company and its
Subsidiaries were required to file with the SEC. As of their respective dates,
the Company SEC Reports did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The audited consolidated financial statements and the
unaudited consolidated interim financial statements of the Company included in
the Company SEC Reports were prepared in accordance with U.S. GAAP applied on a
consistent basis (except as may be indicated therein or in the notes or
schedules thereto) and present fairly, in all material respects, the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and their consolidated results of operations and changes
in financial position for the periods then ended. The Company has heretofore
provided Parent with true and correct copies of any amendments and/or
modifications to any the Company SEC Reports which have not yet been filed with
the SEC but that are required to be filed with the SEC in accordance with
applicable federal securities laws and the SEC rules.
(b) Except as set forth or provided in the Company SEC Reports or Section
4.5(b) of the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise), in each case that is required by U.S. GAAP
to be set forth on a consolidated balance sheet of the Company, except for (i)
liabilities and obligations under this Agreement or incurred in connection with
the transactions contemplated hereby and (ii) liabilities and obligations
incurred in the ordinary course of business consistent with past practice since
September 30, 1999 which could not reasonably be expected to, individually or in
the aggregate, have a Company Material Adverse Effect. Neither the Company nor
any of its Subsidiaries is in default in respect of the material terms and
conditions of any indebtedness or other agreement which could reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect.
Section 4.6 Information to be Supplied. (a) The Proxy Statement/Prospectus
and any other documents to be filed by the Company with the SEC in connection
with the Merger and the other transactions contemplated hereby will (in the case
of the Proxy Statement/Prospectus and any such other documents filed with the
SEC under the Exchange Act or the Securities Act), comply as to form in all
material respects with the requirements of the Exchange Act and the Securities
Act, respectively, and will not, on the date of its filing or, in the case of
the Proxy Statement/Prospectus, on the date it is mailed to shareholders of the
Company and 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.
(b) The information supplied by the Company for inclusion in any filing by
Parent or Merger Sub with the Finnish Financial Supervision Authority 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") 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 4.6, no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference in the Registration Statement, the Proxy
Statement/Prospectus or the Parent Disclosure Documents based on information
supplied by Parent, its Subsidiaries, or Merger Sub expressly for inclusion or
incorporation by reference therein.
Section 4.7 Absence of Certain Events. Except as disclosed in the Company
SEC Reports or in Section 4.7 of the Company Disclosure Letter, since December
31, 1998, the Company and its Subsidiaries have operated their respective
businesses only in the ordinary course and, except as disclosed in the Company
SEC Reports or in Section 4.7 of the Company Disclosure Letter, there has not
occurred (i) any event, occurrence or conditions which could reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect; (ii) any damage, destruction or loss which, individually or in the
aggregate, resulted in or could reasonably be expected to result in, a Company
Material Adverse Effect; or (iii) any increase in the compensation of, or change
of control agreement with, any officer of the Company or any of its Subsidiaries
or any general salary or benefits increase to the employees of the Company or
any of its Subsidiaries other than in the ordinary course of business.
Section 4.8 Litigation. Except as disclosed in Section 4.8 of the Company
Disclosure Letter, there are no investigations, actions, suits or proceedings
pending against the Company or its Subsidiaries or, to the knowledge of the
Company, threatened against the Company or its Subsidiaries (or any of their
respective properties, rights or franchises), at law or in equity, or before or
by any federal or state commission, board, bureau, agency, regulatory or
administrative instrumentality or other Governmental Authority or any arbitrator
or arbitration tribunal, that could reasonably be expected to, individually or
in the aggregate, have a Company Material Adverse Effect, and, to the knowledge
of the Company, no development has occurred with respect to any pending or
threatened action, suit or proceeding that could reasonably be expected to
result in a Company Material Adverse Effect or could reasonably be expected to
prevent, materially impair or materially delay the consummation of the
transactions contemplated hereby. Neither the Company nor any of its
Subsidiaries is subject to any judgment, order or decree entered in any lawsuit
or proceeding which could reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect.
Section 4.9 Title to Properties; Encumbrances. Except as disclosed in
Section 4.9 of the Company Disclosure Letter, the Company and each of its
Significant Subsidiaries has good, valid and marketable title to, or, in the
case of leased properties, valid leasehold interests in all of its tangible
properties and assets except where the failure to have such good, valid and
marketable title could not reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect; in each case subject to no
Liens, except for (A) Liens reflected in the consolidated balance sheet as of
September 30, 1999, (B) Liens consisting of zoning or planning restrictions,
easements, permits and other restrictions or limitations on the use of real
property or irregularities in title thereto which do not materially detract from
the value of, or impair the use of, such property by the Company or any of its
Significant Subsidiaries in the operation of its respective business, (C) Liens
for current Taxes, assessments or governmental charges or levies on property not
yet due and delinquent and (D) Liens which could not reasonably be expected to,
individually or in the aggregate, have a Company Material Adverse Effect. Except
as could not reasonably be expected to, individually or in the aggregate, have a
Company Material Adverse Effect, (i) the Company and each of its Significant
Subsidiaries are in compliance with the terms of all leases of tangible
properties to which they are a party and under which they are in occupancy, and
all such leases are in full force and effect and (ii) the Company and each
Significant Subsidiary enjoys peaceful and undisturbed possession under all such
leases.
Section 4.10 Compliance with Laws. Except as disclosed in the Company SEC
Reports and except as disclosed in Section 4.10 of the Company Disclosure
Letter:
(a) The Company and its Subsidiaries are in compliance with all applicable
federal, state, local and foreign statutes, laws, regulations, orders, judgments
and decrees except where the failure to so comply could not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect.
(b) The Company and its Subsidiaries hold, to the extent legally required,
all federal, state, local and foreign permits, approvals, licenses,
authorizations, certificates, rights, exemptions and orders from Governmental
Authorities (the "Permits") that are required for the operation of the
respective businesses of the Company and/or its Subsidiaries as now conducted,
except where the failure to hold any such Permit could not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect, and there has not occurred any default under any such Permit, except to
the extent that such default could not reasonably be expected to, individually
or in the aggregate, have a Company Material Adverse Effect.
Section 4.11 Company Employee Benefit Plans. (a) Set forth in Section
4.11(a) of the Company Disclosure Letter is an accurate and complete list of
each material domestic or foreign employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations thereunder ("ERISA"), whether or not subject to
ERISA, and each stock option, stock appreciation right, restricted stock, stock
purchase, stock unit, performance share, incentive, bonus, profit-sharing,
savings, deferred compensation, health, medical, dental, life insurance,
disability, accident, supplemental unemployment or retirement, employment,
severance or salary or benefits continuation or fringe benefit plan, program,
arrangement, or agreement maintained by the Company or any Affiliate thereof
(including, for this purpose and for the purpose of all of the representations
in this Section 4.11, all employers (whether or not incorporated) that would be
treated together with the Company and/or any such Affiliate as a single employer
within the meaning of Section 414 of the Code) or to which the Company or any
Affiliate thereof contributes (or has any obligation to contribute), has any
liability or is a party (collectively, the "Company Employee Benefit Plans").
(b) Except as set forth in Section 4.11(b) of the Company Disclosure Letter
or disclosed in the Company SEC Reports, (i) each Company Employee Benefit Plan
is in compliance with all applicable laws (including, without limitation, ERISA
and the Code) and has been administered and operated in accordance with its
terms, in each case except as would not have a Company Material Adverse Effect;
(ii) each Company Employee Benefit Plan which is intended to be "qualified"
within the meaning of Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service and, to the best
knowledge of the Company, no event has occurred and no condition exists which
could reasonably be expected to result in the revocation of any such
determination; (iii) the actuarial present value of the accumulated plan
benefits (whether or not vested) under each Company Employee Benefit Plan
covered by Title IV of ERISA, or which otherwise is a pension plan (as defined
in Section 3(2) of ERISA) or provides for actuarially-determined benefits (other
than any Company Employee Benefit Plan which is a "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA) (a "Company Multiemployer Plan")), as of
the close of its most recent plan year did not exceed the market value of the
assets allocable thereto; (iv) no Company Employee Benefit Plan covered by Title
IV of ERISA has been terminated and no proceedings have been instituted to
terminate or appoint a trustee under Title IV of ERISA to administer any such
plan; (v) no Company Employee Benefit Plan (other than any Company Multiemployer
Plan) subject to Section 412 of the Code or Section 302 of ERISA has incurred
any accumulated funding deficiency within the meaning of Section 412 of the Code
or Section 302 of ERISA, or obtained a waiver of any minimum funding standard or
an extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA; (vi) as of the date of this Agreement, neither the Company
nor any of its Affiliates has incurred any unsatisfied withdrawal liability
under Part 1 of Subtitle E of Title IV of ERISA to any Company Multiemployer
Plan, and the aggregate liabilities of the Company and its Affiliates to all
Company Multiemployer Plans in the event of a complete withdrawal therefrom, as
of the close of the most recent fiscal year of each Company Multiemployer Plan
ended prior to the date hereof, would not have a Company Material Adverse
Effect; (vii) the execution of this Agreement and the consummation of the
transactions contemplated hereby do not constitute a triggering event under any
Company Employee Benefit Plan, policy, arrangement, statement, commitment or
agreement, which (either alone or upon the occurrence of any additional or
subsequent event) will result in any "excess parachute payment," as such term is
defined in Section 280G of the Code, or will result in any severance, bonus,
retirement, job security or similar-type benefit, or increase any benefits or
accelerate the payment or vesting of any benefits to any employee or former
employee or director of the Company or its Affiliates, other than any benefits,
payments, accelerations or increases (1) under any Company Employee Benefit Plan
that is subject to the laws of a jurisdiction outside the United States or (2)
mandated by applicable law; (viii) no liability, claim, action, litigation,
audit, examination, investigation or administrative proceeding has been made,
commenced or, to the best knowledge of the Company, threatened with respect to
any Company Employee Benefit Plan (other than routine claims for benefits
payable in the ordinary course) which would have a Company Material Adverse
Effect; (ix) except as required to maintain the tax-qualified status of any
Company Employee Benefit Plan intended to qualify under Section 401(a) of the
Code, no condition or circumstance exists that would prevent the amendment or
termination of any Company Employee Benefit Plan; (x) there has been no
amendment to, written interpretation or announcement (whether or not written)
relating to, or change in employee participation or coverage under, any Company
Employee Benefit Plan which would increase materially the expense of maintaining
such Company Employee Benefit Plan above the level of such expense incurred for
the most recently ended fiscal year.
(c) The Company has delivered or caused to be delivered to Parent or its
counsel true and complete copies of each Company Employee Benefit Plan and any
related trust agreement or funding vehicle, together with all amendments
thereto, and, to the extent applicable with respect thereto, (i) the current
summary plan description; (ii) the most recent annual report on Internal Revenue
Service Form 5500-series, including any attachments thereto; (iv) the most
recent financial report; (v) the most recent actuarial valuation report, and
(vi) the most recent determination letter received from the Internal Revenue
Service.
Section 4.12 Employment Relations and Agreement. Except as could not
reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect or as disclosed in the Company SEC Reports or Section
4.12 of the Company Disclosure Letter, (i) each of the Company and its
Subsidiaries is, and at all times has been, in compliance with all federal,
state or other applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, and has not and is not
engaged in any unfair labor practice; (ii) no unfair labor practice complaint
against the Company or any of its Subsidiaries is pending before the National
Labor Relations Board; (iii) during the last three years there has not been any
labor strike, dispute, slowdown or stoppage or, to the Company's knowledge,
threatened against or involving the Company or any of its Subsidiaries; (iv) no
representation question exists respecting the employees of the Company or any of
its Subsidiaries; (v) no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and no claim therefor has been
asserted; and (vi) no collective bargaining agreement is currently being
negotiated by the Company or any of its Subsidiaries.
Section 4.13 Taxes. Except as set forth in Section 4.13 of the Company
Disclosure Letter:
(a) Tax Returns. The Company and each of its Subsidiaries has timely
filed or caused to be timely filed with the appropriate Taxing authorities
all Federal income and all other material returns, statements, forms and
reports for Taxes (as hereinafter defined) ("Returns") that are required to
be filed by, or with respect to, the Company and such Subsidiaries on or
prior to the Closing Date. The Returns as filed were correct and complete
in all material respects. "Taxes" shall mean all taxes, assessments,
charges, duties, fees, levies or other governmental charges including,
without limitation, all Federal, state, local, foreign and other income,
franchise, profits, capital gains, capital stock, transfer, sales, use,
occupation, property, excise, severance, windfall profits, stamp, license,
payroll, withholding and other taxes, assessments, charges, duties, fees,
levies or other governmental charges of any kind whatsoever (whether
payable directly or by withholding and whether or not requiring the filing
of a Return), all estimated taxes, deficiency assessments, additions to
tax, penalties and interest and shall include any liability for such
amounts as a result either of being a member of a combined, consolidated,
unitary or affiliated group or of a contractual obligation to indemnify any
person or other entity.
(b) Payment of Taxes. All material Taxes and Tax liabilities of the
Company and its Subsidiaries that have become due and payable have been
timely paid or fully provided for as a liability on the financial
statements of the Company and its Subsidiaries in accordance with U.S.
GAAP.
(c) Other Tax Matters. Neither the Company nor any of its Subsidiaries
has been or is the subject of an audit, other examination, matter in
controversy, proposed adjustment, refund litigation or other proceeding
with respect to Taxes by the Tax authorities of any nation, state or
locality which could reasonably be expected to result in a material Tax
liability, nor has the Company or any of its Subsidiaries received any
notices from any Tax authority relating to any issue which could reasonably
be expected to result in a material Tax liability.
(d) Neither the Company nor any of its Subsidiaries has been included
in any "consolidated," "unitary" or "combined" Return (other than Returns
which include only the Company and any Subsidiaries of the Company)
provided for under the laws of the United States, any foreign jurisdiction
or any state or locality with respect to material Taxes for any taxable
period for which the statute of limitations has not expired.
(e) All material Taxes which the Company or any of its Subsidiaries is
(or was) required by law to withhold or collect have been duly withheld or
collected, and have been timely paid over to the proper authorities to the
extent due and payable.
(f) There are no Tax sharing, allocation, indemnification or similar
agreements (in writing) in effect as between the Company, any Subsidiary,
or any predecessor or Affiliate of any of them and any other party under
which the Company (or any of its Subsidiaries) could be liable for any
material Taxes of any party other than the Company or any Subsidiary of the
Company.
(g) Neither the Company nor any of its Subsidiaries has applied for,
been granted, or agreed to any accounting method change for which it will
be required to take into account any adjustment under Section 481 of the
Code or any similar provision of the Tax laws of any nation, state or
locality.
(h) Neither the Company nor any of its Subsidiaries has, as of the
Closing Date, entered into an agreement or waiver extending any statute of
limitations relating to the payment or collection of U.S. federal income
Taxes of the Company or any of its Subsidiaries.
(i) No election under 341(f) of the Code has been made or shall be
made prior to the Closing Date to treat the Company or any of its
Subsidiaries as a consenting corporation, as defined in Section 341 of the
Code.
Section 4.14 Intellectual Properties. Except as could not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect:
(a) The Company or one of its Subsidiaries exclusively owns, without
restrictions, or is licensed to use, the rights to all patents, trademarks,
trade names, service marks, copyrights together with any registrations and
applications therefor, Internet domain names, net lists, schematics,
inventories, technology, trade secrets, source codes, know-how, computer
software programs or applications including, without limitation, all object and
source codes and tangible or intangible proprietary information or material that
are used in the business of the Company and any of its Subsidiaries as currently
conducted (the "Company Intellectual Property"). Neither the Company nor any of
its Subsidiaries is, or as a result of the execution, delivery or performance of
the Company's obligations hereunder will be, in violation of, or lose any rights
pursuant to, any Company Intellectual Property.
(b) No claims with respect to the Company Intellectual Property have been
asserted or, to the knowledge of the Company, are threatened by any Person nor
does the Company or any of its Subsidiaries know of any valid grounds for any
bona fide claims against the use by the Company or any of its Subsidiaries of
any Company Intellectual Property, or challenging the ownership, validity,
enforceability or effectiveness of any of the Company Intellectual Property. All
granted and issued patents and all registered trademarks and service marks and
all copyrights held by the Company or any of its Subsidiaries are valid,
enforceable and subsisting. To the Company's knowledge, there has not been and
there is not any unauthorized use, infringement or misappropriation of any of
the Company Intellectual Property by any third Person, including, without
limitation, any employee or former employee.
(c) Except as set forth in Section 4.14(c) of the Company Disclosure
Letter, no owned Company Intellectual Property is subject to any outstanding
order, judgment, decree, stipulation or agreement restricting in any manner the
licensing thereof by the Company or any of its Subsidiaries.
Section 4.15 Broker's or Finder's Fee. Except for the fees of ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. (whose fees and expenses will be paid by the Company in accordance
with the Company's agreement with such firm, a true and correct copy of which
has been previously delivered to Parent by the Company), no agent, broker,
Person or firm acting on behalf of the Company is, or will be, entitled to any
fee, commission or broker's or finder's fees from any of the parties hereto, or
from any Person controlling, controlled by, or under common control with any of
the parties hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
Section 4.16 Environmental Laws and Regulations. Except as could not
reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect and except as set forth in Section 4.16 of the Company
Disclosure Letter, (i) Hazardous Materials have not been generated, used,
treated or stored on, transported to or from or Released or disposed of on, any
Company Property except in compliance with applicable Environmental Laws, (ii)
the Company and each of its Subsidiaries are in compliance with all applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws with respect to any Company Property, (iii) there are no
past, pending or, to the Company's knowledge, threatened Environmental Claims
against the Company or any of its Subsidiaries or any Company Property and (iv)
there are no facts or circumstances, conditions or occurrences regarding the
business, assets or operations of the Company or any Company Property that could
reasonably be anticipated to form the basis of an Environmental Claim against
the Company or any of its Subsidiaries or any Company Property.
For purposes of this Agreement, the following terms shall have the
following meanings: (i) "Company Property" means any real property and
improvements owned, leased or operated by the Company or any of its
Subsidiaries; (ii) "Hazardous Materials" means (A) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; (B) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "extremely hazardous substances," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," or words of similar import,
under any applicable Environmental Law; and (C) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority; (iii) "Environmental Law" means any federal, state,
foreign or local statute, law, rule, regulation, ordinance, code or rule of
common law and any judicial or administrative interpretation thereof binding on
the Company or its operations or property as of the date hereof and Closing
Date, including any judicial or administrative order, consent decree or
judgment, relating to the environment, health or Hazardous Materials, including,
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. ss. 6901 et seq.; the
Federal Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the Clean Air Act, 42
U.S.C. ss. 7401 et seq.; Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.;
the Safe Drinking Water Act, 42 U.S.C. ss. 300f et seq.; and their state and
local counterparts and equivalents; and (iv) "Environmental Claims" means any
and all administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigations or
proceedings under any Environmental Law or any permit issued under any such
Environmental Law (for purposes of this subclause (iv), "Claims"), including,
without limitation, (A) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (B) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment; and (v) "Release" means disposing, discharging, injecting,
spilling, leaking, leaching, dumping, emitting, escaping, emptying or seeping
into or upon any land or water or air, or otherwise entering into the
environment.
Section 4.17 State Takeover Statutes. The Board of Directors of the Company
has approved the Merger and this Agreement and such approval is sufficient to
render inapplicable to the Merger, this Agreement, the Company Stock Option
Agreement and the other transactions contemplated by this Agreement the
provisions of Section 912 of the BCL. Except for Section 912 of the BCL (which
has been rendered inapplicable), no other takeover statute or similar statute or
regulation of any state is applicable to the Merger, this Agreement, the Company
Stock Option Agreement and the other transactions contemplated hereby and
thereby.
Section 4.18 Voting Requirements; Board Approval; Appraisal Rights. (a) The
affirmative vote of the holders of at least two-thirds of the outstanding shares
of the Company Common Stock (voting as one class, with each share of the Company
Common Stock having one (1) vote) entitled to be cast approving this Agreement
is the only vote of the holders of any class or series of the Company's capital
stock necessary to approve this Agreement, the Merger, the Company Stock Option
Agreement and the transactions contemplated hereby and thereby.
(b) The Board of Directors of the Company has, as of the date of this
Agreement, (i) determined that the Merger is fair to, and in the best interests
of the Company and its shareholders, (ii) approved this Agreement, the Company
Stock Option Agreement and the transactions contemplated hereby and thereby and
(iii) resolved to recommend that the shareholders of the Company approve and
adopt this Agreement and the Company Stock Option Agreement and approve the
Merger.
(c) No holder of Company Common Stock will have appraisal rights under
Section 910 of the BCL as a result of, or in connection with, the Merger.
Section 4.19 Rights Agreement or Plan. The Company is not a party to, and
has no obligation under, any rights agreement or similar shareholder rights
plan.
Section 4.20 Pooling Matters; Tax Treatment. (a) The Company intends that
the Merger be accounted for under the "pooling of interests" method under U.S.
GAAP and the requirements of Opinion No. 16 (Business Combinations) of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and the rules and regulations of the SEC. The Company will request a
letter addressed to it from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP dated as of the Effective Time,
and (if and when obtained) a copy of it will be delivered to Parent. Such letter
shall state that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP believes that the Company is a pooling
candidate for purposes of the transactions contemplated hereby.
(b) Neither the Company nor any of its Affiliates has taken or agreed to
take any action or is aware of any fact or circumstance that would prevent the
Merger from qualifying (i) for "pooling of interests" accounting treatment as
described in Section 4.20(a) above or (ii) as a 368 Reorganization.
Section 4.21 Opinion of Financial Advisor. The Company has received the
opinion of ▇▇▇▇▇▇▇, Sachs & Co. to the effect that, as of the date of this
Agreement, the Exchange Ratio is fair to the holders of the Company Common Stock
from a financial point of view, and a copy of such opinion has been, or promptly
upon receipt thereof will be, delivered to Parent; it being understood and
acknowledged by Parent and Merger Sub that such opinion has been rendered for
the benefit of the Board of Directors of the Company, and is not intended to,
and may not, be relied upon by Parent, its Affiliates or their respective
shareholders.
Section 4.22 Trust Agreement. Section 4.22 of the Company Disclosure Letter
sets forth the total amount of funds (the "Funding Amount") estimated to be
sufficient to fund the Company's obligation under the Trust Agreement, dated as
of February 19, 1987, between the Company and Fleet National Bank of
Connecticut, as amended (the "Trust Agreement"), with respect to the executives
listed therein. The estimate of the Funding Amount was prepared in good faith
based on all relevant information which is reasonably necessary for the Company
to determine the Funding Amount.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 5. Representations and Warranties of Parent and Merger Sub. Except
as disclosed in (i) Parent's disclosure letter delivered concurrently with the
delivery of this Agreement (the "Parent Disclosure Letter") or (ii) the Parent
Public Reports (as defined below) made or filed prior to the date of this
Agreement, each of Parent and Merger Sub hereby represents and warrants, jointly
and severally, to the Company as follows:
Section 5.1 Due Organization, Good Standing and Corporate Power. Each of
Parent and its Significant Subsidiaries is a corporation duly organized, validly
existing and in good standing (with respect to jurisdictions which recognize the
concept of good standing) under the laws of its jurisdiction of incorporation
and each such Person has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, except where the failure to be so organized, existing and in good
standing could not reasonably be expected to, individually or in the aggregate,
have a Parent Material Adverse Effect. Parent and each of its Significant
Subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions where the failure to be so qualified or
licensed and in good standing could not reasonably be expected to, individually
or in the aggregate, have a Parent Material Adverse Effect. Other than as set
forth in Section 5.1 of the Parent Disclosure Letter, the respective
Certificates of Incorporation and By-Laws or other organizational documents of
the Significant Subsidiaries of Parent do not contain any provision limiting or
otherwise restricting the ability of Parent to control its Significant
Subsidiaries. Section 5.1 of the Parent Disclosure Letter sets forth a list of
all Significant Subsidiaries of Parent and their respective jurisdictions of
incorporation or organization and identifies Parent's (direct or indirect)
percentages of equity ownership therein.
Section 5.2 Authorization and Validity of Agreement. Each of Parent and
Merger Sub has full corporate power and authority to execute and deliver this
Agreement and, in the case of Parent, the Parent Stock Option Agreements, to
perform its obligations hereunder and thereunder and (in the case of this
Agreement and the Parent Stock Option Agreement subject to obtaining the Parent
Shareholder Approval) to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement, the Company
Stock Option Agreement and the Parent Stock Option Agreements by Parent and
Merger Sub, and the consummation by each such party of the transactions
contemplated hereby and thereby, have been duly authorized and unanimously
approved by the respective Board of Directors of Parent and the Merger Sub and
no other corporate action on the part of either of Parent or Merger Sub is
necessary to authorize the execution, delivery and performance of this
Agreement, the Company Stock Option Agreement or the Parent Stock Option
Agreements by each of Parent and Merger Sub and the consummation of the
transactions contemplated hereby or thereby, other than, in the case of this
Agreement and the Parent Stock Option Agreement, obtaining the Parent
Shareholder Approval. This Agreement, the Company Stock Option Agreement and the
Parent Stock Option Agreements have each been duly executed and delivered by
each of Parent and Merger Sub and each is a valid and binding obligation of each
of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in
accordance with its terms, except that such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally, and by general equitable principles.
Section 5.3 Capitalization. (a) The authorized share capital of Parent
consists solely of 595,238,095 Parent Ordinary Shares. At the close of business
on February 14, 2000: (i) 267,005,913 Parent Ordinary Shares were issued and
outstanding, (ii) 6,000,000 Parent Ordinary Shares are subject to future
issuance pursuant to Parent's share options and incentive schemes, (iii)
7,538,000 Parent Ordinary Shares are held by Parent in treasury and (iv) a
subordinated convertible bond loan with an initial principal amount of FIM
960,000,000 of which, as of January 31, 2000, FIM 546,820,000 was outstanding.
All of the issued Parent Ordinary Shares are, and all Parent Ordinary Shares to
be issued as the Merger Consideration either as Parent Ordinary Shares or in the
form of Parent ADSs, pursuant to Section 3.2(c) will be, upon issuance, duly
authorized, validly issued and fully paid and entitling the voters thereof to
voting rights (it being understood that a holder of Parent ADSs may not vote the
underlying Parent Ordinary Shares unless such holder first cancels such ADSs and
has the underlying Parent Ordinary Shares registered in the holder's name in the
shareholder register of the Finnish Central Securities Depositary), and either
the holders of any class of outstanding shares of Parent will not be entitled to
preemptive rights or other rights to acquire Parent Ordinary Shares or Parent
ADS to be issued as part of the Merger Consideration or will have duly and
irrevocably waived such rights (as part of the Parent Shareholder Approval)
prior to the Effective Time. Section 5.3(a) of the Parent Disclosure Letter sets
forth the registered owners of more than five percent of the issued and
outstanding shares of each class of capital stock of Parent. Except as set forth
in the Parent Public Reports or on Section 5.3(a) of the Parent Disclosure
Letter, there (i) are no outstanding Issuance Obligations pursuant to which
Parent or any of Parent's Subsidiaries is or may become obligated to issue any
Parent Ordinary Shares or other equity interests of Parent or shares of capital
stock or other equity interests of any of Parent's Subsidiaries or any
securities convertible into, exchangeable for, or evidencing the right to
subscribe for, any Parent Ordinary Shares or other equity interests of Parent or
shares of capital stock or other equity interests of any of its Subsidiaries,
(ii) is no Voting Debt of Parent or any of its Significant Subsidiaries. Except
as set forth in Section 5.3(c) of the Parent Disclosure Letter, Parent does not
own, directly or indirectly, any capital stock or other equity, ownership or
proprietary interest in any Person (other than any Subsidiary of Parent).
(b) The authorized capital stock of Merger Sub consists of 1,000 shares of
common stock, par value $.01 per share, all of which are validly issued and
outstanding, fully paid and nonassessable and are owned by Parent free and clear
of all security interests, liens, claims, pledges, options, rights of first
refusal, agreements, charges or other encumbrances of any nature or any other
limitation or restriction (including any restriction on the right to vote or
sell the same, except as may be provided under applicable Federal or state
securities laws) (collectively, "Liens").
(c) All of the issued and outstanding shares of capital stock of each
Significant Subsidiary are validly existing, fully paid and non-assessable.
Except as set forth in the Parent Public Reports or Section 5.3(c) of the Parent
Disclosure Letter, no Significant Subsidiary of Parent has outstanding Voting
Debt and no Significant Subsidiary of Parent is bound by, obligated under, or
party to an Issuance Obligation with respect to any security of Parent or any
Significant Subsidiary of Parent and there are no obligations of Parent or any
of its Significant Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding securities of any of its Significant Subsidiaries or any capital
stock of, or other ownership interests in, any of its Significant Subsidiaries.
(d) Except for Parent's interest in its Significant Subsidiaries, and as
set forth in the Parent Public Reports or Section 5.3(d) of the Parent
Disclosure Letter, Parent does not directly or indirectly own any equity or
similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation, partnership,
joint venture, limited liability company or other business association or entity
which is material to Parent and its Subsidiaries, taken as a whole.
Section 5.4 Consents and Approvals; No Violations. Assuming (i) the filings
required under applicable Brazilian antitrust or competition laws, the
Competition Act and the HSR Act are made and the waiting period thereunder (if
applicable) has been terminated or has expired, (ii) voluntary notification
under Exon-▇▇▇▇▇▇ is made, (iii) the prior notification and reporting
requirements of the European Antitrust Laws are met and any antitrust
filings/notifications which must or may be effected at the national level in
countries having jurisdiction are made and any applicable waiting periods
thereunder have been terminated or expired, (iv) the prior notification and
reporting requirements of other antitrust or competition laws as may be
applicable are satisfied and any antitrust filings/notifications which must or
may be effected in countries having jurisdiction are made, (v) the applicable
requirements of the Securities Act and the Exchange Act are met, (vi) the
applicable requirements under any applicable foreign or state securities or blue
sky laws are met, (vii) the requirements under the Market Act, any regulations
promulgated thereunder and the rules of the HSE, in respect of the listing of
the Parent Ordinary Shares to be issued hereunder are met, (viii) the filing of
the Certificate of Merger and other appropriate merger documents, if any, as
required by the BCL, are made, (ix) in the case of this Agreement and the Parent
Stock Option Agreement the Parent Shareholder Approval is received, and (x) the
requirements of any applicable state law relating to the transfer of
contaminated property are met, the execution and delivery of this Agreement, the
Stock Option Agreement and the Parent Stock Option Agreements by Parent and
Merger Sub and the consummation by Parent and Merger Sub of the transactions
contemplated hereby do not and will not: (A) violate or conflict with any
provision of the Articles of Association of Parent or the Certificate of
Incorporation or By-Laws of any of its Subsidiaries; (B) violate or conflict
with any Laws or Orders of any Governmental Authority applicable to Parent or
any of its Subsidiaries or by which either of their respective properties or
assets may be bound; (C) except as set forth in Section 5.4 of the Parent
Disclosure Letter, require any filing with, or permit, consent or approval of,
or the giving of any notice to any Governmental Authority; or (D) except as set
forth in Section 5.4 of the Parent Disclosure Letter, result in a violation or
breach of, conflict with, 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, or result in the creation of any Lien upon any of the
properties or assets of Parent or any of its Significant Subsidiaries or give
rise to any obligation, right of termination, cancellation, acceleration or
increase of any obligation or a loss of a material benefit under, any of the
terms, conditions or provisions of any Contracts which Parent or any of its
Significant Subsidiaries is a party, or by which any such Person or any of its
properties or assets may be bound, excluding from the foregoing clauses (B), (C)
and (D) conflicts, violations, breaches, defaults, rights of payment and
reimbursement, terminations, modifications, accelerations and creations and
impositions of Liens which could not reasonably be expected to, individually or
in the aggregate, have a Parent Material Adverse Effect or prevent, materially
impair, or materially delay the ability of Parent to consummate the transactions
contemplated by this Agreement.
Section 5.5 Parent Reports and Financial Statements. (a) Since June 29,
1999, Parent and, to the extent applicable, its Subsidiaries have filed all
forms, reports and documents with the SEC required to be filed by it pursuant to
the federal securities laws and the SEC rules and regulations thereunder, and
all forms, reports, schedules, statements, registration statements and other
documents filed with the SEC by Parent have complied in all material respects
with all applicable requirements of the federal securities laws and the SEC
rules and regulations thereunder. Parent has, prior to the date of this
Agreement, made available to the Company true and complete copies of all forms,
reports, registration statements and other filings filed by Parent and, to the
extent applicable, its Subsidiaries with the SEC since June 29, 1999 and with
the HSE since December 31, 1997, (such forms, reports, registration statements
and other filings, together with any exhibits, any amendments thereto and
information incorporated by reference therein, are sometimes collectively
referred to as the "Parent Public Reports"). As of their respective dates, the
Parent Public Reports did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The audited consolidated financial statements and the
unaudited consolidated interim financial statements of the Company included in
the Parent Public Reports were prepared in accordance with Finnish GAAP applied
on a consistent basis (except as may be indicated therein or in the notes or
schedules thereto) and present fairly, in all material respects, the
consolidated financial position of Parent and its consolidated Subsidiaries as
of the dates thereof and the consolidated results of their operations and
changes in financial position for the periods then ended. Parent has heretofore
provided the Company with true and correct copies of any amendments and/or
modifications to any Parent Public Reports which have not yet been filed with
the SEC but that are required to be filed with the SEC in accordance with
applicable federal securities laws and the SEC rules.
(b) Except as set forth or provided in the Parent Public Reports or Section
5.5(b) of the Parent Disclosure Letter, neither Parent nor any of its
Subsidiaries has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise), in each case that is required by Finnish
GAAP to be set forth on a consolidated balance sheet of Parent, except for (i)
liabilities and obligations disclosed or provided for in the Parent Public
Reports; (ii) liabilities and obligations under this Agreement or incurred in
connection with the transactions contemplated hereby or thereby; and (iii)
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since September 30, 1999 which could not
reasonably be expected to, individually or in the aggregate, have a Parent
Material Adverse Effect. Neither Parent nor any of its Subsidiaries is in
default in respect of the material terms and conditions of any indebtedness or
other agreement which could reasonably be expected to, individually or in the
aggregate, have a Parent Material Adverse Effect.
Section 5.6 Information to be Supplied. (a) The registration statement on
Form F-4 ("Form F-4") to be filed with the SEC by Parent in connection with the
issuance of Parent ADSs and Parent Ordinary Shares in the Merger, as amended or
supplemented from time to time (as so amended and supplemented, the
"Registration Statement"), and any other documents to be filed by Parent with
the SEC or any other Governmental Authority in connection with the Merger and
the other transactions contemplated hereby will (in the case of the Registration
Statement and any such other documents filed with the SEC under the Securities
Act or the Exchange Act) comply as to form, in all material respects, with the
requirements of the Exchange Act and the Securities Act, respectively, and will
not, on the date of its filing or, in the case of the Registration Statement, at
the time it becomes effective under the Securities Act, or at the date the Proxy
Statement/Prospectus is mailed to shareholders of the Company and 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.
(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 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 5.6, 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 or based on information which is not made
in or incorporated by reference in such documents but which should have been
disclosed pursuant to Section 4.6.
Section 5.7 Absence of Certain Events. Except as disclosed in Parent Public
Reports or in Section 5.7 of the Parent Disclosure Letter or as required or
expressly permitted by this Agreement, since December 31, 1998, Parent and its
Subsidiaries have operated their respective businesses only in the ordinary
course consistent with past practices and, except as disclosed in Parent Public
Reports or in Section 5.7 of the Parent Disclosure Letter, there has not
occurred (i) any event, occurrence or conditions which could reasonably be
expected to, individually or in the aggregate, have a Parent Material Adverse
Effect; (ii) any damage, destruction or loss which, individually or in the
aggregate, resulted in or could reasonably be expected to result in, a Parent
Material Adverse Effect; or (iii) any increase in the compensation of any
officer of Parent or any of its Subsidiaries or any general salary or benefits
increase to the employees of Parent or any of its Subsidiaries other than in the
ordinary course of business.
Section 5.8 Litigation. Except as disclosed in Section 5.8 of Parent
Disclosure Letter, there are no investigations, actions, suits or proceedings
pending against Parent or its Subsidiaries or, to the knowledge of Parent,
threatened against Parent or its Subsidiaries (or any of their respective
properties, rights or franchises), at law or in equity, or before or by any
federal or state commission, board, bureau, agency, regulatory or administrative
instrumentality or other Governmental Entity or any arbitrator or arbitration
tribunal, that could reasonably be expected to, individually or in the
aggregate, have a Parent Material Adverse Effect, and, to the knowledge of
Parent, no development has occurred with respect to any pending or threatened
action, suit or proceeding that could reasonably be expected to result in a
Parent Material Adverse Effect or could reasonably be expected to prevent,
materially impair or materially delay the consummation of the transactions
contemplated hereby. Neither Parent nor any of its Subsidiaries is subject to
any judgment, order or decree entered in any lawsuit or proceeding which could
reasonably be expected to, individually or in the aggregate, have a Parent
Material Adverse Effect.
Section 5.9 Title to Properties; Encumbrances. Parent and each of its
Subsidiaries has good, valid and marketable title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its tangible
properties and assets except where the failure to have such good, valid and
marketable title could not reasonably be expected to have a Parent Material
Adverse Effect; in each case subject to no Liens, except for (A) Liens reflected
in the consolidated balance sheet as of September 30, 1999, (B) Liens consisting
of zoning or planning restrictions, easements, permits and other restrictions or
limitations on the use of real property or irregularities in title thereto which
do not materially detract from the value of, or impair the use of, such property
by Parent or any of its Subsidiaries in the operation of its respective
business, (C) Liens for current Taxes, assessments or governmental charges or
levies on property not yet due and delinquent and (D) Liens which could not
reasonably be expected to have a Parent Material Adverse Effect. Except as could
not reasonably be expected to, individually or in the aggregate, have a Parent
Material Adverse Effect, (i) Parent and each of its Significant Subsidiaries are
in compliance with the terms of all leases of tangible properties to which they
are a party and under which they are in occupancy, and all such leases are in
full force and effect and (ii) Parent and each of its Significant Subsidiaries
enjoys peaceful and undisturbed possession under all such leases.
Section 5.10 Compliance with Laws. Except as disclosed in the Parent Public
Reports and except as described in Section 5.10 of the Parent Disclosure Letter:
(a) Parent and its Subsidiaries are in compliance with all applicable
federal, state, local and foreign statutes, laws, regulations, orders, judgments
and decrees except where the failure to so comply could not reasonably be
expected to, individually or in the aggregate, have a Parent Material Adverse
Effect.
(b) Parent and its Subsidiaries hold, to the extent legally required, all
Permits that are required for the operation of the business of Parent and/or its
Subsidiaries as now conducted, except where the failure to hold any such Permit
could not reasonably be expected to, individually or in the aggregate, have a
Parent Material Adverse Effect, and there has not occurred any default under any
such Permit, except to the extent that such default could not reasonably be
expected to, individually or in the aggregate, have a Parent Material Adverse
Effect.
Section 5.11 Parent Employee Benefit Plans. (a) Set forth in Section
5.11(a) of the Parent Disclosure Letter is an accurate and complete list of each
material domestic or foreign employee benefit plan, within the meaning of
Section 3(3) of ERISA, whether or not subject to ERISA, and each stock option,
stock appreciation right, restricted stock, stock purchase, stock unit,
performance share, incentive, bonus, profit-sharing, savings, deferred
compensation, health, medical, dental, life insurance, disability, accident,
supplemental unemployment or retirement, employment, severance or salary or
benefits continuation or fringe benefit plan, program, arrangement, or agreement
maintained by Parent or any Affiliate thereof (including, for this purpose and
for the purpose of all of the representations in this Section 5.11, all
employers (whether or not incorporated) that would be treated together with
Parent and/or any such Affiliate as a single employer within the meaning of
Section 414 of the Code) or to which Parent or any Affiliate thereof contributes
(or has any obligation to contribute), has any liability or is a party
(collectively, the "Parent Employee Benefit Plans").
(b) Except as set forth in Section 5.11(b) of the Parent Disclosure Letter
or disclosed in the Parent Public Reports, (i) each Parent Employee Benefit Plan
is in compliance with all applicable laws (including, without limitation,
applicable under Finnish law, ERISA and the Code) and has been administered and
operated in accordance with its terms, in each case except as would not have a
Parent Material Adverse Effect; (ii) each Parent Employee Benefit Plan which is
intended to be "qualified" within the meaning of Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service and,
to the best knowledge of Parent, no event has occurred and no condition exists
which could reasonably be expected to result in the revocation of any such
determination; (iii) the actuarial present value of the accumulated plan
benefits (whether or not vested) under each Parent Employee Benefit Plan covered
by Title IV of ERISA, or which otherwise is a pension plan (as defined in
Section 3(2) of ERISA) or provides for actuarially-determined benefits (other
than any Parent Employee Benefit Plan which is a "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA) (a "Parent Multiemployer Plan")), as of
the close of its most recent plan year did not exceed the market value of the
assets allocable thereto; (iv) no Parent Employee Benefit Plan has been
terminated and no proceedings have been instituted to terminate or appoint a
trustee to administer any such plan, except for any such termination or
appointment of a trustee that would not have a Parent Material Adverse Effect;
(v) no Parent Employee Benefit Plan (other than any Parent Multiemployer Plan)
subject to Section 412 of the Code or Section 302 of ERISA has incurred any
accumulated funding deficiency within the meaning of Section 412 of the Code or
Section 302 of ERISA, or obtained a waiver of any minimum funding standard or an
extension of any amortization period within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; (vi) as of the date of this Agreement,
neither Parent nor any of its Affiliates has incurred any unsatisfied withdrawal
liability under Part 1 of Subtitle E of Title IV of ERISA to any Parent
Multiemployer Plan, and the aggregate liabilities of Parent and its Affiliates
to all Parent Multiemployer Plans in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each Parent
Multiemployer Plan ended prior to the date hereof, would not have a Parent
Material Adverse Effect; (vii) the execution of this Agreement and the
consummation of the transactions contemplated hereby do not constitute a
triggering event under any Parent Employee Benefit Plan, policy, arrangement,
statement, commitment or agreement, which (either alone or upon the occurrence
of any additional or subsequent event) will result in any "excess parachute
payment," as such term is defined in Section 280G of the Code, or will result in
any severance, bonus, retirement, job security or similar-type benefit, or
increase any benefits or accelerate the payment or vesting of any benefits to
any employee or former employee or director of Parent or its Affiliates, other
than any benefits, payments, accelerations or increases (1) under any Parent
Employee Benefit Plan that is subject to the laws of a jurisdiction outside of
the United States or (2) mandated by applicable law; (viii) no liability, claim,
action, litigation, audit, examination, investigation or administrative
proceeding has been made, commenced or, to the best knowledge of Parent,
threatened with respect to any Parent Employee Benefit Plan (other than routine
claims for benefits payable in the ordinary course) which would have a Parent
Material Adverse Effect; (ix) except as required to maintain the tax-qualified
status of any Parent Employee Benefit Plan intended to qualify under applicable
law, no condition or circumstance exists that would prevent the amendment or
termination of any Parent Employee Benefit Plan; (x) there has been no amendment
to, written interpretation or announcement (whether or not written) relating to,
or change in employee participation or coverage under, any Parent Employee
Benefit Plan which would increase materially the expense of maintaining such
Parent Employee Benefit Plan above the level of such expense incurred for the
most recently ended fiscal year.
(c) Parent has delivered or caused to be delivered to the Company or its
counsel true and complete copies of each Parent Employee Benefit Plan and any
related trust agreement or funding vehicle, together with all amendments
thereto, and, to the extent applicable with respect thereto, (i) the current
summary plan description; (ii) the most recent annual report on Internal Revenue
Service Form 5500-series, including any attachments thereto; (iv) the most
recent financial report; (v) the most recent actuarial valuation report, and
(vi) the most recent determination letter received from the Internal Revenue
Service.
Section 5.12 Employment Relations and Agreement. Except as could not
reasonably be expected to, individually or in the aggregate, have a Parent
Material Adverse Effect or as disclosed in the Parent Public Reports or Section
5.12 of the Parent Disclosure Letter, (i) each of Parent and its Subsidiaries
is, and at all times since December 31, 1998 has been, in compliance with all
federal, state or other applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and has not
and is not engaged in any unfair labor practice; (ii) no unfair labor practice
complaint against Parent or any of its Subsidiaries is pending before the
National Labor Relations Board; (iii) during the last three years there has not
been any labor strike, dispute, slowdown or stoppage or, to Parent's knowledge,
threatened against or involving Parent or any of its Subsidiaries; (iv) no
representation question exists respecting the employees of Parent or any of its
Subsidiaries; (v) no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and no claim therefor has been
asserted; and (vi) no collective bargaining agreement is currently being
negotiated by Parent or any of its Subsidiaries.
Section 5.13 Taxes. Except as set forth in Section 5.13 of the Parent
Disclosure Letter:
(a) Tax Returns. Parent and each of its Subsidiaries has timely filed
or caused to be timely filed with the appropriate taxing authorities all
Finnish income and all other material Returns that are required to be filed
by, or with respect to, Parent and such subsidiaries on or prior to the
Closing Date. The Returns as filed were correct and complete in all
material respects.
(b) Payment of Taxes. All material Taxes and Tax liabilities of Parent
and its Subsidiaries that have become due and payable have been timely paid
or fully provided for as a liability on the financial statements of Parent
and its Subsidiaries in accordance with Finnish GAAP.
(c) Other Tax Matters. Neither Parent nor any of its Subsidiaries has
been or is the subject of an audit, other examination, matter in
controversy, proposed adjustment, refund litigation or other proceeding
with respect to Taxes by the Tax authorities of any nation, state or
locality which could reasonably be expected to result in a material Tax
liability, nor has Parent or any of its Subsidiaries received any notices
from any Tax authority relating to any issue which could reasonably be
expected to result in a material Tax liability.
(d) Neither Parent nor any of its Subsidiaries has been included in
any "consolidated," "unitary" or "combined" Return (other than Returns
which include only Parent and any Subsidiaries of Parent) provided for
under the laws of Finland, or any other jurisdiction or any state or
locality with respect to material Taxes for any taxable period for which
the statute of limitations has not expired.
(e) All material Taxes which Parent or any of its Subsidiaries is (or
was) required by law to withhold or collect have been duly withheld or
collected, and have been timely paid over to the proper authorities to the
extent due and payable.
(f) There are no Tax sharing, allocation, indemnification or similar
agreements (in writing) in effect as between Parent, any Subsidiary, or any
predecessor or Affiliate of any of them and any other party under which
Merger Sub or Parent (or any of its Subsidiaries) could be liable for any
material Taxes of any party other than Parent or any Subsidiary of Parent.
(g) Neither Parent nor any of its Subsidiaries has, as of the Closing
Date entered into an agreement or waiver extending any statute of
limitations relating to the payment or collection of material Taxes of
Parent or any of its Subsidiaries.
(h) No holder of Company Common Stock will be subject to any Tax
imposed by The Republic of Finland as a result of the receipt of Parent
Shares in the Merger unless such holder has a connection to Finland other
than solely the ownership or receipt of Parent Shares.
(i) Parent has no plan or intention to dispose of any Company Common
Stock acquired in the Merger, or to cause the Company to dispose of
substantially all of the Company's assets, in a manner that will cause gain
to be recognized pursuant to Treasury Regulation Section 1.367(a)-8(e) by a
holder that is a 5% transferee shareholder (as defined in Treasury
Regulations Section 1.367(a)-3(c)(5)(ii)).
Section 5.14 Intellectual Property. Except as could not reasonably be
expected to, individually or in the aggregate, have a Parent Material Adverse
Effect:
(a) Parent or one of its Subsidiaries exclusively owns, without
restrictions, or is licensed to use, the rights to all patents, trademarks,
trade names, service marks, copyrights together with any registrations and
applications therefor, internet domain names, net lists, schematics,
inventories, technology, trade secrets, source codes, know-how, computer
software programs or applications including, without limitation, all object and
source codes and tangible or intangible proprietary information or material that
are used in the business of Parent and any of its Subsidiaries as currently
conducted (the "Parent Intellectual Property"). Neither Parent nor any of its
Subsidiaries is, or as a result of the execution, delivery or performance of
Parent's obligations hereunder will be, in violation of, or lose any rights
pursuant to, any Parent Intellectual Property.
(b) No claims with respect to Parent Intellectual Property have been
asserted or, to the best knowledge of Parent, are threatened by any Person nor
does Parent or any of its Subsidiaries know of any valid grounds for any bona
fide claims against the use by Parent or any of its Subsidiaries of any Parent
Intellectual Property, or challenging the ownership, validity, enforceability or
effectiveness of any of the Parent Intellectual Property. All granted and issued
patents and all registered trademarks and service marks and all copyrights held
by Parent or any of its Subsidiaries are valid, enforceable and subsisting. To
Parent's best knowledge, there has not been and there is not any unauthorized
use, infringement or misappropriation of any of the Parent Intellectual Property
by any third Person, including, without limitation, any employee or former
employee.
(c) Except as set forth in Section 5.14(c) of the Parent Disclosure Letter,
no owned Parent Intellectual Property is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting in any material manner
the licensing thereof by Parent or any of its Subsidiaries.
Section 5.15 Broker's or Finder's Fee. Except for Chase Securities Inc.
(whose fees and expenses as financial advisor to Parent and Merger Sub will be
paid by Parent or Merger Sub in accordance with their agreement with such firm,
a true and correct copy of which has been previously delivered to the Company by
Parent), no agent, broker, Person or firm acting on behalf of Parent or Merger
Sub is, or will be, entitled to any fee, commission or broker's or finder's fees
from any of the parties hereto, or from any Person controlling, controlled by,
or under common control with any of the parties hereto, in connection with this
Agreement or any of the transactions contemplated hereby.
Section 5.16 Environmental Laws and Regulations. Except as could not
reasonably be expected to, individually or in the aggregate, have a Parent
Material Adverse Effect and except as set forth in Section 5.16 of the Parent
Disclosure Letter, (i) Hazardous Materials have not been generated, used,
treated or stored on, transported to or from or Released or disposed of, on any
Parent Property except in compliance with applicable Environmental Laws, (ii)
Parent and each of its Subsidiaries are in compliance with all applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws with respect to any Parent Property, (iii) there are no past,
pending or, to Parent's knowledge, threatened Environmental Claims against
Parent or any of its Subsidiaries or any Parent Property and (iv) there are no
facts or circumstances, conditions or occurrences regarding the business, assets
or operations of Parent or any Parent Property that could reasonably be
anticipated to form the basis of an Environmental Claim against Parent or any of
its Subsidiaries or any Parent Property.
For purposes of this Agreement, "Parent Property" means any real property
and improvements owned, leased or operated by Parent or any of its Subsidiaries.
Section 5.17 Voting Requirements; Board Approval. (a) The affirmative vote
of the holders of at least two-thirds of the outstanding Parent Ordinary Shares
(voting as one class, with each Parent Ordinary Share having one (1) vote)
represented and voting at the Parent Shareholder Meeting (as hereinafter
defined) approving (i) the transactions contemplated by this Agreement, the
Company Stock Option Agreement and the Parent Stock Option Agreement, (ii) the
issuance of Parent Ordinary Shares and options exercisable for and other rights
to acquire Parent Ordinary Shares hereunder and thereunder and (iii) the
amendments to Parent's Articles of Association necessary to give effect to the
transactions contemplated by this Agreement ("Parent Shareholder Approval") is
the only vote of the holders of any class or series of shares of Parent
necessary to approve the matters set forth in clause (i), (ii) and (iii) of this
Section 5.17(a).
(b) The Board of Directors of Parent has, as of the date of this Agreement,
(i) determined that the Merger is advisable and fair to, and in the best
interests of Parent and its shareholders, (ii) approved this Agreement, the
Company Stock Option Agreement, the Parent Stock Option Agreements and the
transactions contemplated hereby and thereby and (iii) resolved to recommend
that the shareholders of Parent approve and adopt the transactions contemplated
by this Agreement and the Parent Stock Option Agreement, approve the issuance of
the Parent Ordinary Shares, approve the amendments to the Articles of
Association and approve the Merger.
Section 5.18 Pooling Matters; Tax Treatment. (a) Parent intends that the
Merger be accounted for under the "pooling of interests" method under Finnish
GAAP and U.S. GAAP, as to U.S. GAAP under the principles set forth in Accounting
Principles Board Opinion No. 16, Accounting for Business Combinations, and the
accounting rules of the SEC. Parent will request a letter addressed to it from
SVC PricewaterhouseCoopers Oy as to Finnish GAAP, and PricewaterhouseCoopers
LLP, as to U.S. GAAP dated as of the Effective Time, and (if and when such
letter is obtained) a copy will be delivered to the Company. Such letter shall
state that PricewaterhouseCoopers LLP believes that the Merger should be
accounted for as a "pooling of interests" as described in the first sentence of
Section 4.20(a).
(b) Except as set forth in Section 5.18(b) of the Parent Disclosure Letter,
neither Parent nor any of its Affiliates has taken or agreed to take any action
or is aware of any fact or circumstance that would prevent the Merger from
qualifying (i) for "pooling of interests" accounting treatment as described in
the first sentence of Section 4.20(a) or (ii) as a 368 Reorganization.
Section 5.19 Ownership of Capital Stock. Except as set forth in the Parent
Disclosure Letter, neither Parent nor any of its Subsidiaries beneficially owns,
directly or indirectly, any capital stock of the Company or is a party to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any capital stock of the Company, other than as
contemplated by this Agreement.
Section 5.20 No Prior Activities. Merger Sub was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement, has no
Subsidiaries and has undertaken no business or activities other than in
connection with entering into this Agreement and engaging in the transactions
contemplated hereby.
Section 5.21 Opinion of Financial Advisor. Parent has received the opinion
of Chase Securities, Inc., dated the date of this Agreement, to the effect that,
as of such date, the Exchange Ratio is fair, from a financial point of view, to
the holders of the Parent Ordinary Shares, a copy of which opinion has been, or
promptly upon receipt thereof will be, delivered to the Company; it being
understood and acknowledged by the Company that such opinion has been rendered
for the benefit of the Board of Directors of Parent, and is not intended to, and
may not, be relied upon by the Company, its Affiliates or their respective
shareholders.
ARTICLE VI
TRANSACTIONS PRIOR TO CLOSING DATE
Section 6.1 Access to Information Concerning Properties and Records. During
the period commencing on the date hereof and ending on the earlier of (i) the
Closing Date and (ii) the date on which this Agreement is terminated pursuant to
Section 9.1 hereof, each of the Company and Parent shall, and each shall cause
each of its Subsidiaries to, upon reasonable notice, afford the other party, and
its respective counsel, accountants, consultants and other authorized
representatives, access during normal business hours to its and its
Subsidiaries' employees, properties, books and records in order that they may
have the opportunity to make such investigations as they shall desire of its and
its Subsidiaries' affairs; such investigation shall not, however, affect the
representations and warranties made by the Company or Parent in this Agreement.
The Company shall furnish promptly to Parent and Merger Sub and Parent and
Merger Sub shall furnish promptly to the Company (x) a copy of each form,
report, schedule, statement, registration statement and other document filed by
it or its Subsidiaries during such period pursuant to the requirements of
Federal, state or foreign securities laws and (y) all other information
concerning its or its Subsidiaries' business, properties and personnel as
Parent, Merger Sub or the Company may reasonably request. Each of the Company
and Parent agrees to cause its officers and employees to furnish such additional
financial and operating data and other information and respond to such inquiries
as the other party shall from time to time reasonably request.
Section 6.2 Confidentiality. Information obtained by the Company and Parent
and their respective counsel, accountants, consultants and other authorized
representatives pursuant to Section 6.1 hereof shall be subject to the
provisions of the Confidentiality Agreement by and between the Company and
Parent dated April 20, 1999 (the "Confidentiality Agreement").
Section 6.3 Conduct of the Business of the Company Pending the Closing
Date. The Company agrees that, except 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 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 and
employees and maintain satisfactory relationships with licensors,
suppliers, distributors, clients, joint venture partners and others having
significant business relationships with them;
(b) Except as set forth in Section 6.3(b) of the Company Disclosure
Letter, neither the Company nor any of its Subsidiaries shall:
(i) make any change in or amendment to the Company's Certificate
of Incorporation or its By-Laws (or comparable governing documents);
(ii) issue or sell, or authorize to issue or sell, 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 or 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
Company Common Stock upon the exercise of Options or in connection
with Company Stock Rights outstanding on the date hereof, in each case
in accordance with their present terms or pursuant to Options or other
Company Stock Rights granted pursuant to clause (ii) below, (ii) the
granting of Options or Company Stock Rights granted under the Company
Stock Plans in effect on the date hereof in the ordinary course of
business consistent with past practice not in excess of the amounts
set forth in Section 6.3(b) of the Company Disclosure Letter, (iii)
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, (iv) issuances of Company Common Stock upon
the conversion of convertible securities of the Company outstanding as
of the date of this Agreement or (v) issuances of Company Common Stock
under the Company Stock Option Agreement;
(iii) declare, pay or set aside any dividend or other
distribution 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 (it being understood that the
Company's Board of Directors may declare and the Company may pay
quarterly dividends of not more than $0.25 per share on the schedule
which has been publicly announced by the Company on or prior to the
date of this Agreement);
(iv) other than in connection with transactions permitted by
Section 6.3(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, (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, in the aggregate, do
not exceed $25 million;
(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 $25 million, 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 $25 million;
(vi) 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 or
former 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, bonus, profit
sharing, 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;
(vii) transfer, lease, license, guarantee, sell, mortgage,
pledge, dispose of, encumber or subject to any Lien, any material
assets, other than in the ordinary course of business;
(viii) except as required by applicable law or U.S. GAAP, make
any material change in its method of accounting;
(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
Takeover Proposal, except as provided for in Section 6.7;
(x) (A) incur any material indebtedness for borrowed money 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 (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 in the ordinary course of business consistent with past
practice, including without limitation borrowings under existing
credit facilities described in the Company SEC Reports in the ordinary
course of business consistent with past practice for working capital
purposes;
(xi) accelerate the payment, right to payment or vesting of any
bonus, severance, profit sharing, retirement, deferred compensation,
stock option, insurance or other compensation or benefits;
(xii) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) over $15 million, 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 Company SEC Reports;
(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) 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 or (B) as a 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 the ordinary course of business consistent with past
practice; or
(xviii) agree, in writing or otherwise, to take any of the
foregoing actions.
Section 6.4 Conduct of the Business of Parent Pending the Closing Date.
Parent agrees that, except 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 period commencing on the date
hereof until the Effective Time:
(a) 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 and employees
and maintain satisfactory relationships with licensors, suppliers,
distributors, clients, joint venture partners and others having significant
business relationships with them;
(b) Except as set forth in Section 6.4(b) of the Parent Disclosure
Letter, neither Parent nor any of its Subsidiaries shall:
(i) except as contemplated by this Agreement, make any change in
or amendment to Parent's Articles of Association or other comparable
governing documents (including without limitation the Deposit
Agreement governing the Parent ADSs) that is adverse to the holders of
Parent Ordinary Shares or the Parent ADSs;
(ii) make any material change to Merger Sub's Certificate of
Incorporation;
(iii) issue or sell, or authorize to issue or sell, any of its
capital shares or any other securities, or issue or sell, or authorize
to issue or sell, any securities convertible into, or options,
warrants or rights to purchase or subscribe to, or enter into any
arrangement or contract with respect to the issuance or sale of, any
of its capital shares 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 options to purchase Parent
Ordinary Shares ("Parent Options") or in connection with any Parent
Share Rights outstanding on the date hereof, in each case in
accordance with their present terms or pursuant to Parent Options or
other Parent Share Rights granted pursuant to clause (ii) below, (ii)
the granting of Parent Options or Parent Share Rights granted under
Parent's share schemes, plans, programs, arrangement or agreements in
effect on the date hereof in the ordinary course of business
consistent with past practice not in excess of the amounts set forth
in Section 6.4(b) of the Parent Disclosure Letter, (iii) issuances by
a wholly-owned Subsidiary of Parent of capital stock to such
Subsidiary's parent, the Company or another wholly-owned Subsidiary of
the Company, (iv) issuances of Parent Ordinary Shares upon the
conversion of convertible securities of Parent outstanding as of the
date of this Agreement or (v) issuances of Parent Ordinary Shares
under the Parent Stock Option Agreements;
(iv) declare, pay or set aside any dividend or other distribution
or payment with respect to, or split, combine, redeem or reclassify,
or purchase or acquire, any of its capital shares or its other
securities, other than dividends payable by a wholly-owned Subsidiary
of Parent to Parent or another wholly owned Subsidiary of Parent (it
being understood that the Parent's Board of Directors may recommend a
dividend for the year ending December 31, 1999 in an amount not to
exceed Euro 1.25 per share which may be paid by Parent);
(v) other than in connection with transactions permitted by
Section 6.4(b)(vi), incur any capital expenditures or any obligations
or liabilities in respect thereof, except for those (A) contemplated
by the capital expenditure budgets for Parent's Subsidiaries made
available to the Company, (B) incurred in the ordinary course of
business of Parent and Parent's Subsidiaries or (C) not otherwise
described in clauses (A) and (B) which, in the aggregate, do not
exceed $30 million;
(vi) 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 $30 million, 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 $30 million;
(vii) 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 or
former director, officer or other employee of Parent or any of its
Subsidiaries, or establish, adopt, enter into or amend in any material
respect or terminate any collective bargaining, bonus, profit sharing,
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;
(viii) transfer, lease, license, guarantee, sell, mortgage,
pledge, dispose of, encumber or subject to any lien, any material
assets other than in the ordinary course of business;
(ix) except as required by applicable law, Finnish GAAP or the
International Accounting Standards, make any material change in its
method of accounting;
(x) adopt or enter into a plan or complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of Parent or any of its
Subsidiaries (other than the Merger) or any agreement relating to a
Takeover Proposal, except as provided for in Section 6.7;
(xi) (A) incur any material indebtedness for borrowed money or
guarantee any such indebtedness of another Person, other than
indebtedness owing to or guarantees of indebtedness owing to Parent or
any direct or indirect wholly-owned Subsidiary of Parent or (B) make
any loans or advances to any other Person, other than to Parent or to
any direct or indirect wholly-owned Subsidiary of the Parent, except,
in the case of clause (A), for borrowings in the ordinary course of
business consistent with past practice, including without limitation
borrowings under existing credit facilities described in the Parent
Public Reports in the ordinary course of business consistent with past
practice for working capital purposes;
(xii) accelerate the payment, right to payment or vesting of any
bonus, severance, profit sharing, retirement, deferred compensation,
share option, insurance or other compensation or benefits;
(xiii) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) over $15 million, 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;
(xiv) enter into any agreement, understanding or commitment that
materially restrains, limits or impedes 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
Parent's or any of its Subsidiaries' activities;
(xv) 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 Parent or its Subsidiaries, provided, however, that
routine employee terminations for cause shall not be considered
subject to this clause (xv);
(xvi) take any action including, without limitation, the adoption
of any shareholder rights plan or amendments to its Articles of
Association (or comparable governing documents), which would, directly
or indirectly, restrict or impair the ability of the Company to vote,
or otherwise to exercise the rights and receive the benefits of a
shareholder with respect to, securities of Parent that may be acquired
or controlled by the Company or permit any shareholder to acquire
securities of Parent on a basis not available to the Company in the
event that the Company were to acquire any Parent Ordinary Shares;
(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 the ordinary course of business consistent with past
practice;
(xviii) 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 for "pooling of interests"
accounting treatment or a 368 Reorganization; or
(xix) agree, in writing or otherwise, to take any of the
foregoing actions.
Section 6.5 The Company Shareholder Meetings; Parent Shareholder Meetings;
Preparation of Proxy Statement/Prospectus; Short Form Merger.
(a) The Company Shareholder Meetings. 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 Company Common Stock (the "Company
Shareholder Meeting") as soon as reasonably practicable for the purpose of
voting upon this Agreement and the Merger and the Company agrees that this
Agreement and the Merger shall be submitted at such meeting. The Company shall
take all action necessary to solicit from its shareholders proxies, and shall
take all other action necessary and advisable, to secure the vote of
shareholders required by applicable law and the Company's Certificate of
Incorporation or By-Laws to obtain the approval for this Agreement and the
Merger. Unless the Board of Directors of the Company otherwise determines (based
on a majority vote of the Board of Directors in its good faith judgment that
such other action is necessary to comply with its fiduciary duty to shareholders
under applicable law after receiving the advice of outside legal counsel), (i)
the Company's Board of Directors shall recommend approval and adoption by its
shareholders of this Agreement (the "Company Recommendation"), (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 or take any action or make any statement inconsistent with the Company
Recommendation and (iii) the Company shall take all lawful action to solicit the
Company Shareholder Approval.
(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") as soon as practicable for the purpose of voting upon the transactions
contemplated by this Agreement, including the Merger, the Parent Stock Option
Agreement and the issuance of Parent Ordinary Shares and Options exercisable for
Parent Ordinary Shares hereunder and thereunder and Parent agrees that this
Agreement and the issuance of Parent Ordinary Shares and Options exercisable for
or other rights to acquire Parent Ordinary Shares hereunder and thereunder shall
be submitted at such meeting. Parent shall take all action necessary and
advisable to secure the vote of shareholders required by applicable law and
Parent's Articles of Association to obtain the approval for the transactions
contemplated by this Agreement, including the Merger, the Parent Stock Option
Agreement, the matters referred to in Section 5.17 and the issuance of Parent
Ordinary Shares and Options exercisable for or other rights to acquire Parent
Ordinary Shares. Unless the Board of Directors of Parent otherwise determines
(based on a majority vote of the Board of Directors in its good faith judgment
that such other action is necessary to comply with its fiduciary duty to
shareholders under applicable law after receiving the advice of outside legal
counsel), (i) Parent's Board of Directors shall recommend approval by its
shareholders of the transactions contemplated by this Agreement (the "Parent
Recommendation"), (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 or take any action or make any
statement inconsistent with the Parent Recommendation and (iii) Parent shall
take all lawful action, consistent with past practice, to solicit the Parent
Shareholder Approval.
(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/Prospectus will be included as Parent's prospectus. 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/Prospectus to its shareholders as promptly as practicable after the
Registration Statement is declared effective under the Securities Act and, if
necessary, after the Proxy Statement/Prospectus 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 and Parent Ordinary Shares
in the Merger. No amendment or supplement to the Proxy Statement/Prospectus 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 or Parent Ordinary Shares 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/Prospectus or comments thereon and responses
thereto or requests by the SEC for additional information. If at any time prior
to the Effective Time, the 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/Prospectus, 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.
Section 6.6 Reasonable Best Efforts. Subject to the terms and conditions
provided herein and in Section 6.9, each of the Company and Parent shall, and
shall cause each of its Subsidiaries to, cooperate and use their reasonable best
efforts to take, or cause to be taken, all appropriate action, and to make, or
cause to be made, all filings necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement including, without limitation, the Company's and
Parent's reasonable best efforts to obtain, prior to the Closing Date, all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts with the Company or
Parent, as the case may be, and their respective Subsidiaries as are necessary
for consummation of the transactions contemplated by this Agreement and in order
to comply with applicable Laws, including Laws restricting the foreign ownership
of assets; provided, however, that no loan agreement or contract for borrowed
money shall be repaid except as currently required by its terms, in whole or in
part, and no contract shall be amended to increase the amount payable thereunder
or otherwise to be more burdensome to the Company or any of its Subsidiaries or
Parent or any of its Subsidiaries in order to obtain any such consent, approval
or authorization without first obtaining the written approval of Parent or the
Company, respectively.
Section 6.7 No Solicitation. (a) Each of Parent and the Company shall and
shall use its reasonable best efforts to cause its Affiliates and each of their
respective officers, directors, employees, financial advisors, attorneys and
other advisors, representatives and agents to immediately cease any discussions
or negotiations with third parties with respect to any Takeover Proposal (as
defined below). Each of Parent and the Company shall not, nor shall it authorize
or permit any of its Affiliates to, nor shall it authorize or permit any
officer, director or employee of or any financial advisor, attorney or other
advisor, representative or agent of it or any of its Affiliates, to (i) directly
or indirectly solicit, facilitate, initiate or encourage the making or
submission of, any Takeover Proposal (including without limitation, with respect
to the Company, the taking of any action which would make Section 912 of the BCL
inapplicable to a Takeover Proposal), (ii) enter into any agreement, arrangement
or understanding with respect to any Takeover Proposal or enter into any
agreement, arrangement or understanding requiring it to abandon, terminate or
fail to consummate the Merger or any other transaction contemplated by this
Agreement, (iii) initiate or participate in any way in any discussions or
negotiations regarding, or furnish or disclose to any Person (other than a party
to this Agreement) any information with respect to, or take any other action to
facilitate or in furtherance of any inquiries or the making of any proposal that
constitutes, or could reasonably be expected to lead to, any Takeover Proposal
or (iv) grant any waiver or release under any standstill or similar agreement
with respect to any class of such party's equity securities; provided, that
prior to the Effective Time, in response to an unsolicited Takeover Proposal
that did not result from the breach of this Section 6.7 and following delivery
to the other party of notice of the Takeover Proposal in compliance with its
obligations under Section 6.7(d) hereof, such party may participate in
discussions or negotiations with or furnish information (pursuant to a
confidentiality agreement with customary terms to any third party which makes a
bona fide written Takeover Proposal if (A) a majority of its Board of Directors
reasonably determines in good faith (after consultation with an independent,
nationally recognized investment bank) that taking such action could be
reasonably likely to lead to the delivery to it of a Superior Proposal and (B) a
majority of its Board of Directors determines in good faith (after receiving the
advice of outside legal counsel) that it is necessary to take such actions(s) in
order to comply with its fiduciary duties under applicable law. Without limiting
the foregoing, each of Parent and the Company agrees that any violation of the
restrictions set forth in this Section 6.7(a) by any of such party's, or any of
its Subsidiaries', officers, employees, Affiliates or directors or any advisor,
representative, consultant or agent retained by such party or any of its
Subsidiaries or any of their Affiliates in connection with the transactions
contemplated hereby, whether or not such Person is purporting to act on behalf
of such party or any of its Subsidiaries, shall constitute a breach of this
Section 6.7(a) by such party.
For purposes of this Agreement, "Takeover Proposal" means, with respect to
either Parent or the Company any inquiry, proposal or offer from any Person or
group relating to (i) any direct or indirect acquisition or purchase of 15% or
more of the assets of such party or any of its Significant Subsidiaries or 15%
or more of any class of equity securities of such party or any of its
Significant Subsidiaries, (ii) any tender offer or exchange offer that, if
consummated, would result in any Person beneficially owning all or any portion
of any class of equity securities of such party or any of its Significant
Subsidiaries or (iii) any merger, consolidation, business combination, sale of
all or any substantial portion of the assets, recapitalization, liquidation or a
dissolution of, or similar transaction of such party or any of its Significant
Subsidiaries other than the Merger; and "Superior Proposal" means a bona fide
written Takeover Proposal made by a third party to purchase, in the case of the
Company, at least two-thirds of the outstanding equity securities of the
Company, and in the case of Parent, at least two-thirds of the outstanding
equity securities of Parent, in each case pursuant to a tender offer, exchange
offer, merger or other business combination (x) on terms which a majority of the
members of such party's Board of Directors determine in their good faith
reasonable judgment (after consultation with an independent, nationally
recognized investment bank) to be superior to such party and its shareholders
(in their capacity as shareholders) from a financial point of view (taking into
account, among other things, all legal, financial, regulatory and other aspects
of the proposal and identity of the offeror) as compared to the transactions
contemplated hereby and, in the case of the Company, any alternative proposed by
Parent or Merger Sub in accordance with Section 9.1(c)(ii) and (y) is reasonably
capable of being consummated.
(b) Each of Parent and the Company agrees that, except as set forth in
Section 6.7(c), neither its Board of Directors nor any committee thereof shall
(i) approve or recommend, or propose to approve or recommend, any Takeover
Proposal or (ii) approve, recommend or cause it to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar agreement
(each, an "Acquisition Agreement") related to any Takeover Proposal.
(c) Each of Parent and the Company agrees that, notwithstanding anything to
the contrary herein, prior to the Effective Time, such party and/or such party's
Board of Directors may take the actions otherwise prohibited by Section 6.7(b)
if (i) a third party makes a Superior Proposal, (ii) such party complies with
its obligations under Section 6.7(d), (iii) in the case of the Company, all of
the conditions to the Company's right to terminate this Agreement in accordance
with Section 9.1(c)(ii) hereof have been satisfied (including the expiration of
the three (3) Business Day period described therein and the payment of all
amounts required pursuant to Section 9.3 hereof) and (iv) in the case of the
Company, simultaneously therewith, this Agreement is terminated in accordance
with Section 9.1(c)(ii) hereof.
(d) Each of Parent and the Company agrees that in addition to the
obligations of such party set forth in paragraphs (a), (b) and (c) of this
Section 6.7, promptly on the date of receipt thereof, such party shall advise
the other party in writing of any request for information or any Takeover
Proposal, or any inquiry, discussions or negotiation with respect to any
Takeover Proposal, the terms and conditions of such request, Takeover Proposal,
inquiry, discussion or negotiation and such party shall promptly provide to the
other party copies of any written materials received by such party in connection
with any of the foregoing, and the identity of the Person or group making any
such request, Takeover Proposal or inquiry or with whom any discussion or
negotiations are taking place. Each of Parent and the Company agrees that it
shall keep the other party fully informed of the status and details (including
amendments or proposed amendments) of any such request, Takeover Proposal or
inquiry and keep the other party fully informed as to the material details of
any information requested of or provided by such party and as to the details of
all discussions or negotiations with respect to any such request, Takeover
Proposal or inquiry. Each of Parent and the Company agrees that such party shall
simultaneously provide to the other party any non-public information concerning
such party provided to any other Person or group in connection with any Takeover
Proposal which was not previously provided to Parent.
(e) Each of Parent and the Company agrees that nothing contained in this
Section 6.7 shall prohibit it from taking and disclosing to its shareholders a
position contemplated by Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act with respect to any tender offer.
(f) Each of Parent and the Company agrees that immediately following the
execution of this Agreement, (i) it shall request each Person which has
heretofore executed a confidentiality agreement in connection with such Person's
consideration of acquiring Parent or the Company or any portion thereof to
return or destroy (which destruction shall be certified in writing by an
executive officer of such Person) all confidential information heretofore
furnished to such Person by or on its behalf and (ii) it shall cease and cause
to be terminated immediately all existing discussions or negotiations with any
Person conducted heretofore with respect to, or that could reasonably be
expected to lead to, any Takeover Proposal.
Section 6.8 Notification of Certain Matters. The Company shall give prompt
notice to Parent, and Parent and Merger Sub shall give prompt notice to the
Company, of the occurrence, or failure to occur, of any event, which occurrence
or failure to occur would be likely to cause any representation or warranty
contained in this Agreement to be untrue in any material respect at any time
from the date of this Agreement to the Effective Time. Each of the Company and
Parent shall give prompt notice to the other party of any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement.
Section 6.9 Antitrust Laws. (a) Each party hereto shall (i) take promptly
all actions necessary to make the filings required of it or any of its
Affiliates under any applicable Antitrust Laws in connection with this Agreement
and the transactions contemplated hereby, (ii) comply at the earliest
practicable date with any formal or informal request for additional information
or documentary material received by it or any of its affiliates from any
Antitrust Authority and (iii) cooperate with one another in connection with any
filing under applicable Antitrust Laws and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement initiated by any Antitrust Authority.
(b) Each party hereto shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any Antitrust Law. Without limiting the
generality of the foregoing, "reasonable best efforts" shall include, without
limitation:
(i) in the case of each of Parent and the Company:
(A) filing with the appropriate Antitrust Authorities at the
earliest practicable date a Notification and Report Form or other
applicable notification with respect to the transactions contemplated
by this Agreement;
(B) if Parent or the Company receives a formal request for
information and documents from an Antitrust Authority, substantially
complying with such formal request at the earliest practicable date
following the date of its receipt thereof; and
(C) opposing vigorously any litigation relating to the Merger or
the transactions contemplated hereby, including, without limitation,
promptly appealing any adverse court order, provided, however, that if
any order, injunction or decree prohibiting the Merger or the
transactions contemplated hereby remains in effect on January 31,
2001, Parent may terminate this Agreement provided it is then entitled
to terminate this Agreement pursuant to Section 9.1(d).
(ii) in the case of the Company only, subject to Parent's compliance
with clause (i) above, not frustrating or impeding Parent's strategy or
negotiating positions with any Antitrust Authority; and
(iii) in the case of Parent and Merger Sub only, subject to the
Company's compliance with clause (i) above, to accept an order requiring
Parent, Merger Sub or the Company to agree or commit to divest, hold
separate, offer for sale, abandon, limit its operations of or take similar
action with respect to any assets (tangible or intangible) or any business
interest of it or any of their Subsidiaries (including without limitation,
the Surviving Corporation after consummation of the Merger) as are
necessary to permit Parent and Merger Sub to otherwise fully consummate the
Merger (an "Order of Disposition"); provided, however, that nothing in this
Agreement shall require Parent or any of its Subsidiaries to comply with or
accept Orders of Disposition which, if complied with, could reasonably be
expected to, individually or in the aggregate, have a Parent Material
Adverse Effect.
(c) Each party hereto shall promptly inform the other parties of any
material communication made to, or received by such party from, any Antitrust
Authority or any other governmental or regulatory authority regarding any of the
transactions contemplated hereby.
(d) For purposes of this Agreement, (i) "Antitrust Authorities" means the
Federal Trade Commission, the Antitrust Division, the attorneys general of the
several states of the United States, the antitrust authorities of Brazil,
Canada, Germany and any other governmental authority having jurisdiction with
respect to the transactions contemplated hereby pursuant to applicable Antitrust
Laws and (ii) "Antitrust Law" means the ▇▇▇▇▇▇▇ Act, as amended, the ▇▇▇▇▇▇▇
Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, the
Competition Act (Canada), European Antitrust Laws and all other federal, state
and foreign statutes, rules, regulations, orders, decrees, administrative and
judicial doctrines, and other laws that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade.
Section 6.10 Directors' and Officers' Insurance. (a) The certificate of
incorporation and the by-laws of the Surviving Corporation shall contain the
provisions with respect to indemnification and exculpation from liability set
forth in the Company's certificate of incorporation and by-laws on the date of
this Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who on or prior to
the Effective Time were directors, officers, employees or agents of the Company,
unless such modification is required by law.
(b) For a period of six years from the Effective Time, the Surviving
Corporation shall either (x) maintain in effect the Company's current directors'
and officers' liability insurance covering those Persons who are currently
covered on the date of this Agreement by the Company's directors' and officers'
liability insurance policy (a copy of which has been heretofore delivered to
Parent) (the "Indemnified Parties"); provided, however, that in no event shall
Parent be required to expend in any one year an amount in excess of 225% of the
annual premiums currently paid by the Company for such insurance; provided
further that if the annual premiums of such insurance coverage exceed such
amount, the Surviving Corporation shall be obligated to obtain a policy with the
greatest coverage available for a cost not exceeding such amount; provided
further that the Surviving Corporation may substitute for such the Company
policies with at least the same coverage containing terms and conditions which
are no less advantageous and provided that said substitution does not result in
any gaps or lapses in coverage with respect to matters occurring prior to the
Effective Time or (y) if such insurance coverage is not otherwise available,
cause Parent's directors' and officers' liability insurance then in effect to
cover those Persons who are covered on the date of this Agreement by the
Company's directors' and officers' liability insurance policy with respect to
those matters covered by the Company's directors' and officers' liability
policy.
(c) The Surviving Corporation shall indemnify all Indemnified Parties to
the fullest extent permitted by applicable law with respect to all acts and
omissions arising out of such individuals' services as officers, directors,
employees or agents of the Company or any of its Subsidiaries or as trustees or
fiduciaries of any plan for the benefit of employees of the Company or any of
its Subsidiaries, occurring prior to the Effective Time including, without
limitation, the transactions contemplated by this Agreement. Without limitation
of the foregoing, in the event any such Indemnified Party is or becomes involved
in any capacity in any action, proceeding or investigation in connection with
any matter, including without limitation, the transactions contemplated by this
Agreement, occurring prior to, and including, the Effective Time, the Surviving
Corporation, from and after the Effective Time, shall pay, as incurred, such
Indemnified Party's reasonable legal and other expenses (including the cost of
any investigation and preparation) incurred in connection therewith. Subject to
Section 6.10(d) below, the Surviving Corporation shall pay all reasonable
expenses, including attorneys' fees, that may be incurred by any Indemnified
Party in enforcing this Section 6.10 or any action involving an Indemnified
Party resulting from the transactions contemplated by this Agreement.
(d) Any Indemnified Party wishing to claim indemnification under paragraph
(a) or (c) of this Section 6.10, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify the Surviving Corporation
thereof. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) the
Surviving Corporation shall have the right, from and after the Effective Time,
to assume the defense thereof (with counsel engaged by the Surviving Corporation
to be reasonably acceptable to the relevant Indemnified Party) and the Surviving
Corporation shall not be liable to such Indemnified Party for any legal expenses
of other counsel or any other expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof, (ii) such Indemnified Party will
cooperate in the defense of any such matter and (iii) the Surviving Corporation
shall not be liable for any settlement effected without its prior written
consent; provided that the Surviving Corporation shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent jurisdiction
shall ultimately determine, and such determination shall have become final, that
the indemnification of such Indemnified Party in the manner contemplated hereby
is prohibited by applicable law.
Section 6.11 Public Announcements. Parent and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement and
shall not issue any such press release or make any such public statement prior
to such consultation and review by the other party of such release or statement
or without the prior consent of the other party, which shall not be unreasonably
withheld; provided, however, that a party may, without the prior consent of the
other party, issue such press release or make such public statement as may be
required by law or any listing agreement with a national securities exchange or
automated quotation system which Parent or the Company is a party to, if it has
used all reasonable efforts to consult with the other party and to obtain such
party's consent but has been unable to do so in a timely manner.
Section 6.12 Transfer Tax. The Company and Parent shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees and any similar taxes which become payable in
connection with the transactions contemplated by this Agreement (together with
any related interest, penalties or additions to tax, "Transfer Taxes"). All
Transfer Taxes shall be paid by the Company and expressly shall not be a
liability of any holder of the Company Common Stock.
Section 6.13 NYSE Listing. Parent shall use its reasonable best efforts to
cause Parent Ordinary Shares and Parent ADSs to be issued in connection with the
Merger to be listed on the NYSE, subject to official notice of issuance.
Section 6.14 HSE Listing. Parent shall use its reasonable best efforts to
cause Parent Ordinary Shares to be issued in connection with the Merger to be
listed on the HSE promptly following the due issuance thereof.
Section 6.15 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 368 Reorganization and to qualify for "pooling-of-interests" accounting
treatment, and will not take any action reasonably likely to cause the Merger
not so to qualify. Parent and the Merger Sub acknowledge that the Company shall
have the option of obtaining either a ruling (the "367 Ruling") from the
Internal Revenue Service to the effect that the parties to this Agreement, in
effecting the Merger, would be in substantial compliance with the
"substantiality test" set forth in Treas. Reg. Section 1.367(a)-3(c)(3)(iii) or
an opinion (the "367 Opinion") from counsel to the Company that such
substantiality test is satisfied, it being understood that the Company may
pursue both options simultaneously. The Company shall use its reasonable best
efforts to obtain the ▇▇▇ ▇▇▇▇▇▇ and the 367 Opinion and Parent and Merger Sub
shall use its reasonable best efforts to assist, and shall reasonably cooperate
with, the Company in obtaining the ▇▇▇ ▇▇▇▇▇▇ and the 367 Opinion (including by
providing customary representations).
(b) Each party shall use its reasonable best efforts to obtain the opinions
referred to in Sections 4.20 and 5.18.
(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 by Treasury Regulation Section 1.367(a)-8(b)(1)(vi) 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 nonrecognition 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 368 Reorganization.
Section 6.16 Affiliates of Parent and the Company. (a) Not less than 45
days prior to the Effective Time, the Company shall deliver to Parent a letter
identifying all Persons who, to the Company's knowledge, at the time of the
Company Shareholder Meeting or at the Effective Time, may be deemed to be
"affiliates" of the Company for purposes of Rule 145 under the Securities Act or
who may otherwise be deemed to be Affiliates of the Company (the "Rule 145
Affiliates"). The Company shall use its reasonable best efforts to cause each
Person who is identified as a Rule 145 Affiliate in such list to deliver to
Parent on or prior to the 30th day prior to the Effective Time, a written
agreement, in the form attached hereto as Exhibit D (a "Rule 145 Affiliate
Agreement").
(b) Not less than 45 days prior to the Effective Time, Parent shall deliver
to the Company a letter identifying all persons who, in the judgment of Parent,
may be deemed "affiliates" for purposes of qualifying the Merger for pooling of
interests accounting treatment under Opinion 16 of the Accounting Principles
Board and applicable SEC rules and regulations, and such list shall be updated
as necessary to reflect changes from the date hereof. Parent shall use its
reasonable best efforts to cause each person identified on such list to deliver
to the Company not less than 30 days prior to the Effective Time a written
agreement in the form attached as Exhibit F hereto.
Section 6.17 Employee Benefits. (a) Parent covenants and agrees that,
during the period commencing at the Effective Time through at least December 31,
2001, it will provide (or shall cause the Surviving Corporation to provide)
nonrepresented current and former employees of the Company and its Subsidiaries
with salary and benefits under employee benefit plans that are no less
favorable, in the aggregate, than those currently provided by the Company and
its Subsidiaries to such employees (including benefits pursuant to qualified and
nonqualified retirement plans, savings plans, medical, dental, disability and
life insurance plans and programs, deferred compensation arrangements, bonus and
incentive compensation plans, and retiree benefit plans, policies and
arrangements). For purposes of any employee benefit plan or arrangement
currently maintained by the Surviving Corporation, Parent shall cause the
Surviving Corporation to recognize service with the Company and its Subsidiaries
and any predecessor entities (and any other service credited by the Company
under similar benefit plans) for all purposes (including for vesting,
eligibility to participate, severance, and benefit accrual); and Parent and the
Surviving Corporation shall recognize (or cause to be recognized) service with
the Company and its Subsidiaries and any predecessor entities (and any service
credited by the Company under similar benefit plans) for purposes of vesting,
eligibility to participate and severance under any employee benefit plan or
arrangement maintained by Parent, the Surviving Corporation or any Subsidiary of
Parent and for purposes of benefit accrual under any employee welfare benefit
plan or arrangement maintained by Parent, the Surviving Corporation or Parent;
provided, however, that solely to the extent necessary to avoid duplication of
benefits, amounts payable under employee benefit plans provided by Parent, the
Surviving Corporation or a Parent Subsidiary may be reduced by amounts payable
under similar Company Employee Benefit Plans with respect to the same periods of
service). Any benefits accrued by employees of the Company or any Subsidiary of
the Company prior to the Effective Time under any defined benefit pension plan
currently maintained by the Company or any Subsidiary of the Company that employ
a final average pay formula shall be calculated based on the employees' final
average pay with Parent, the Surviving Corporation or any Parent Subsidiary or
other Affiliate employing the employees for as long as the current final average
pay benefit formula under such plan is in effect. From and after the Effective
Time, Parent and the Surviving Corporation shall, and Parent shall cause the
Subsidiaries of Parent to, (i) waive any pre-existing condition limitations to
the extent that the employees or their beneficiaries are not subject to such
pre-existing condition limitations under the comparable Company Employee Benefit
Plans prior to the Effective Time, and (ii) credit any deductibles and
out-of-pocket expenses that are applicable and/or covered under the Company
Employee Benefit Plans, and are incurred by the employees and their
beneficiaries during the portion of the calendar year prior to participation in
the benefit plans provided by Parent, the Surviving Corporation and any
Subsidiary of Parent. The provisions of this Section 6.17 shall not create in
any employee or former employee of the Company or any Subsidiary of the Company
any rights to employment or continued employment with Parent, the Surviving
Corporation or the Company or any of their respective Subsidiaries or Affiliates
or any right to specific terms or conditions of employment.
(b) During the period commencing at the Effective Time and through at least
December 31, 2001, Parent and the Surviving Corporation shall honor, and Parent
shall cause its Subsidiaries to honor, in accordance with its terms, the
Company's Severance Policy in effect as of the Closing Date as set forth in
Section 6.17 of the Company Disclosure Letter.
(c) In addition, Parent shall cause the Surviving Corporation to honor, in
accordance with their terms, any individual employment, change of control,
severance, retirement or termination agreement between the Company or any
Subsidiary of the Company, and any current or former officer, director or
employee of the Company or any Subsidiary of the Company, including the
Company's incentive programs and change in control agreements between the
Company and certain of its officers, in each case as set forth in Section 6.17
of the Company Disclosure Letter (including the Trust Agreement), except as
otherwise agreed to by any such officer, director or employee.
(d) The provisions of this Section 6.17 shall apply to employees of the
Company and its Subsidiaries whose terms and conditions of employment are not
subject to a collective bargaining agreement and, to the extent required by a
collective bargaining agreement, to employees of the Company and its
Subsidiaries whose terms and conditions of employment are subject to a
collective bargaining agreement.
(e) Parent acknowledges that a "Potential Change in Control" has occurred
as defined in the Trust Agreement and that the Company shall deliver the Funding
Amount to the trustee under the Trust Agreement.
(f) Parent agrees that the consummation of the Merger shall constitute a
"Change in Control" of the Company for all purposes within the meaning of all
applicable compensation or benefit plans or agreements of the Company and its
subsidiaries, including without limitation, the Company Stock Plans and the
employment agreements set forth on the Company Disclosure Letter.
(g) The Company shall deliver to Parent copies of all notices, schedules
and other documents it proposes to deliver to, or receives from, the trustee
under the Trust Agreement after the date hereof, or in connection with the
transactions contemplated hereby, including, without limitation, the Payment
Schedule, as defined in the Trust Agreement. Parent shall have a reasonable
opportunity to review such notices, schedules and other documents proposed to be
delivered to such trustee prior to such delivery thereof.
Section 6.18 Governance Matters. (a) Prior to the Effective Time, the Board
of Directors of Parent shall take all action necessary to cause the Articles of
Association of Parent and the rules of the Management Board to the extent
necessary to be amended as of the Effective Time to incorporate the provisions
set forth in Exhibit F (such amendment, the "Articles Amendment," and Parent's
Articles of Association as so amended, the "Amended Articles").
(b) Prior to the Effective Time, the Board of Directors of Parent shall
take all action necessary to (i) cause the Board of Directors of Parent to
include, as of the Effective Time, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Kenwood ▇. ▇▇▇▇▇▇▇ plus up
to four independent directors of the Company proposed by ▇▇. ▇▇▇▇▇ who are
reasonably acceptable to Parent (each, a "Company Director"); provided, however,
that if any such person declines to serve as a director of Parent, Parent's
obligations under this Section 6.18(b) with respect to such person(s) shall
cease unless another nominee is proposed by the Company who is reasonably
acceptable to Parent, (ii) cause the Board of Directors to consist of up to 17
people, (iii) cause the Management Board of Parent to consist, as of the
Effective Time, of eight persons, (x) five of whom shall be current members of
the Management Board of Parent, and (y) three of whom shall be ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Kenwood ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇. Each Company Director appointed
pursuant to Section 6.18(b)(i) shall serve until the next following annual
meeting of Parent's shareholders or until their successors are duly elected and
qualified.
(c) Promptly after the Effective Time, Parent shall take all actions
necessary to cause each committee of the Board of Directors of Parent to include
at least one Company Director.
(d) Effective as of the Effective Time, Parent shall take all actions
necessary to cause (i) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ to be appointed Executive Vice President
of Parent; (ii) Kenwood ▇. ▇▇▇▇▇▇▇ to be appointed Executive Vice President of
Parent and (iii) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ to be appointed Senior Vice President of
Parent.
Section 6.19 Section 16 Matters. Prior to the Effective Time, Parent and
the Company shall take all such steps as may be required to cause any
dispositions of Company Common Stock (including derivative securities with
respect to the Company Common Stock) resulting from the transactions
contemplated by this Agreement by each individual who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to the
Company to be exempt under Rule 16b-3 promulgated under the Exchange Act, such
steps to be taken in accordance with the No-Action Letter, dated January 12,
1999, issued by the Securities and Exchange Commission to Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP.
Section 6.20 Integration Team. Promptly after the date hereof, Parent will
establish an integration team (the "Integration Team"). The Integration Team
will be comprised of senior executive officers of Parent and the Company and, to
the extent appropriate, other management members from both Parent and the
Company. The Integration Team will review its recommendations with the
Management Board of Parent. The Parent's chief executive officer will work
closely with the Integration Team which is responsible for proposing
alternatives and recommendations regarding the matters and issues arising in
connection with the integration of the two companies and their respective
businesses, assets and organizations. The Parent's chief executive officer
ultimately has the responsibility for approving the recommendations and
alternatives of the Integration Team.
Section 6.21 Parent Treasury Stock Option Agreement. Parent agrees to
reserve a sufficient number of Parent Ordinary Shares held by Parent in treasury
("Treasury Shares") which are the subject of the Parent Treasury Stock Option
Agreement; provided, however, Parent may not sell any of the Treasury Shares
without (i) giving the Company prior written notice that it is required to sell
such Treasury Shares in order to obtain the letter from PricewaterhouseCoopers
LLP referred to in Section 7.1(k) and (ii) obtaining the written consent of the
Company, which consent shall not be unreasonably withheld.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB
Section 7.1 Conditions Precedent to Obligations of Parent and Merger Sub.
The respective obligations of Parent and Merger Sub to effect the Merger are
subject to the satisfaction or waiver (subject to applicable law), at or prior
to the Effective Time, of each of the following conditions:
(a) Approval of Shareholders. Each of the Company Shareholder Approval and
the Parent Shareholder Approval shall have been obtained;
(b) HSR Act. Any waiting period (and any extension thereof) under the HSR
Act applicable to the Merger shall have expired or been terminated;
(c) European Antitrust Laws. Any approvals or consents, including that of
the German Federal Cartel Office, required by European Antitrust Laws, shall
have been received and any waiting periods required by such Laws shall have been
observed;
(d) Competition Act (Canada). The waiting period under Section 123 of the
Competition Act (Canada) shall have expired and Parent shall have been advised
in writing by the Commissioner of Competition that he has determined not to make
an application for an order under Section 92 of the Competition Act (Canada) in
respect of the transactions contemplated by this Agreement that could reasonably
be expected to have a Parent Material Adverse Effect;
(e) Exon-▇▇▇▇▇▇. The review periods, if applicable, under Exon-▇▇▇▇▇▇ shall
have expired or have been terminated;
(f) 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 a decree,
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 decree, injunction or other order that may have
been entered;
(g) 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;
(h) 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;
(i) NYSE Listing. Parent ADSs and Parent Ordinary Shares to be issued in
the Merger shall have been authorized for listing on the NYSE, subject to
official notice of issuance;
(j) HSE Listing. Parent Ordinary Shares to be issued in the Merger shall
have been authorized for listing on the HSE following the due issuance thereof.
(k) Pooling Letters. Parent shall have received a letter from
PricewaterhouseCoopers LLP and SVH PricewaterhouseCoopers Oy each dated as of
the Closing Date and addressed to Parent stating that such firm believes that
the Merger should be treated as a "pooling of interests" in conformity with
Finnish GAAP (with respect to SVH PricewaterhouseCoopers Oy) and U.S. GAAP, as
described in Accounting Principles Board Opinion No. 16 and applicable
accounting rules of the SEC (with respect to PricewaterhouseCoopers LLP), and
such letters shall not have been withdrawn or modified in any material respect
and (ii) the Company shall have received a letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP dated
as of the Closing Date and addressed to the Company and Parent, stating that
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP believes that the Company is a pooling candidate for
purposes of the transactions contemplated in conformity with U.S. GAAP as
described in Accounting Principles Board Opinion No. 16 and applicable rules and
regulations of the SEC and such letter shall not have been withdrawn or modified
in any material respect.
(l) Proxy Statement/Prospectus. (A) The Proxy Statement/Prospectus shall
have become effective in accordance with the provisions of the Securities Act,
no stop order suspending the effectiveness of the Proxy Statement/Prospectus
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 and (B) all state
securities or blue sky authorizations necessary to carry out the transactions
contemplated hereby shall have been obtained and be in effect;
(m) 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 and (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, except for such inaccuracies as are not reasonably likely to,
individually or in the aggregate, result in a Company Material Adverse Effect;
(n) Performance. The Company shall have performed or complied in all
material respects with all agreements and conditions contained herein required
to be performed or complied with by it prior to or at the time of the Closing;
(o) 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 Sections 7.1(m) and (n); and
(p) Other Authorizations. All Authorizations (other than those specified in
Section 7.1(b), (c), (d) and (e) hereof) required in connection with the
execution and delivery of this Agreement and the performance of the obligations
hereunder shall have been made or obtained, and all required waiting periods
shall have been observed, without any limitation, restriction or condition
(including the registration of the capital increase of Parent's share capital
representing Parent Ordinary Shares required to be issued in connection with the
delivery of the Merger Consideration) that has or could reasonably be expected
to, individually or in the aggregate, have a Parent Material Adverse Effect, a
Company Material Adverse Effect (or an effect on Parent and its Subsidiaries
that were such effect applied to the Company and its Subsidiaries, would
constitute a Company Material Adverse Effect), except for such Authorizations
the failure of which to have been made or obtained does not and could not
reasonably be expected to, individually or in the aggregate, have a Parent
Material Adverse Effect, a Company Material Adverse Effect (or an effect on
Parent and its Subsidiaries that were such effect applied to the Company and its
Subsidiaries, would constitute a Company Material Adverse Effect) and except for
such Authorizations that are required by Laws to be obtained, or such waiting
periods required by Laws, to be observed, prior to the Effective Time.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
Section 8.1 Conditions Precedent to Obligations of the Company. The
obligations of the Company to effect the Merger is subject to the satisfaction
or waiver (subject to applicable law), at or prior to the Effective Time, of
each of the following conditions:
(a) Approval of Shareholders. Each of the Company Shareholder Approval and
the Parent Shareholder Approval shall have been obtained;
(b) HSR Act. Any waiting period (and any extension thereof) under the HSR
Act applicable to the Merger shall have expired or been terminated;
(c) European Antitrust Laws. Any approvals or consents, including that of
the German Federal Cartel Office, required by European Antitrust Laws, shall
have been received and any waiting periods required by such Laws shall have been
observed;
(d) Competition Act (Canada). The waiting period under Section 123 of the
Competition Act (Canada) shall have expired and Parent shall have been advised
in writing by the Commissioner of Competition that he has determined not to make
an application for an order under Section 92 of the Competition Act (Canada) in
respect of the transactions contemplated by this Agreement that could reasonably
be expected to have a Parent Material Adverse Effect;
(e) Exon-▇▇▇▇▇▇. The review periods, if applicable, under Exon-▇▇▇▇▇▇ shall
have expired or have been terminated;
(f) 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 a decree,
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 decree, injunction or other order that may have
been entered;
(g) 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;
(h) 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.
(i) HSE Listing. Parent Ordinary Shares to be issued in the Merger shall
have been authorized for listing on the HSE following the due issuance thereof.
(j) NYSE Listing. Parent ADSs and Parent Ordinary Shares to be issued in
the Merger shall have been authorized for listing on the NYSE, subject to
official notice of issuance;
(k) Pooling Letters. The Company shall have received a letter from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP dated as of the Closing Date and addressed to the Company and
Parent stating that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP believes that the Company is a pooling
candidate for purposes of the transactions contemplated in conformity with U.S.
GAAP, as described in Accounting Principles Board Opinion No. 16 and applicable
rules and regulations of the SEC, and such letter shall not have been withdrawn
or modified in any material respect and (ii) Parent shall have received a letter
from PricewaterhouseCoopers LLP and SVH PricewaterhouseCoopers Oy each dated as
of the Closing Date and addressed to Parent stating that such firm believes that
the Merger should be treated as a "pooling of interests" in conformity with
Finnish GAAP (with respect to SVH PricewaterhouseCoopers Oy) and U.S. GAAP, as
described in Accounting Principles Board Opinion No. 16 and applicable
accounting rules of the SEC (with respect to PricewaterhouseCoopers LLP), and
such letters shall not have been withdrawn or modified in any material respect.
(l) Proxy Statement/Prospectus. (A) The Proxy Statement/Prospectus shall
have become effective in accordance with the provisions of the Securities Act,
no stop order suspending the effectiveness of the Registration Statement 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 and (B) all state securities
or blue sky authorizations necessary to carry out the transactions contemplated
hereby shall have been obtained and be in effect;
(m) Tax Opinion. The Company shall have received an opinion of Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP 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 date of the filing of the Certificate of
Merger, to the effect that (i) the Merger will be treated for U.S. Federal
income tax purposes as a 368 Reorganization, (ii) each of Parent, Merger Sub and
the Company will be a party to the reorganization within the meaning of Section
368(b) of the Code and (iii) no gain or loss should be recognized by the Company
as a result of the Merger, such opinion to be premised on, at the Company's
option, the 367 Ruling or the 367 Opinion, in each case, reasonably satisfactory
to the Company. In rendering such opinion, such counsel shall be entitled to
rely upon customary representations of officers of the Company and Parent;
(n) Representations and Warranties True. (A) The representations and
warranties of Parent and Merger Sub contained herein that are qualified by
reference to a Parent Material Adverse Effect shall be 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 and (B) all other
representations and warranties of Parent and Merger Sub 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, except for such
inaccuracies as are not reasonably likely to, individually or in the aggregate,
result in a Parent Material Adverse Effect;
(o) Performance. Parent shall have performed or complied in all material
respects with all agreements and conditions contained herein required to be
performed or complied with by it prior to or at the time of the Closing;
(p) Compliance Certificate. Parent shall have delivered to the Company a
certificate, dated the date of the Closing, signed by the Chief Executive
Officer or any Chief Financial Officer of Parent, certifying as to the
fulfillment of the conditions specified in Sections 8.1(n) and (o).
(q) Other Authorizations. All Authorizations (other than those specified in
8.1(b), (c), (d) and (e) hereof) required in connection with the execution and
delivery of this Agreement and the performance of the obligations hereunder
shall have been made or obtained, and all required waiting periods shall have
been observed, without any limitation, restriction or condition (with the
exception of the registration of the capital increase of Parent's share capital
representing Parent's Ordinary Shares required to be issued in connection with
the delivery of the Merger Consideration) that has or could reasonably be
expected to, individually or in the aggregate, have a Parent Material Adverse
Effect (or an effect on the Company and its Subsidiaries that were such effect
applied to Parent and its Subsidiaries, would constitute a Parent Material
Adverse Effect), except for such Authorizations, the failure of which to have
been made or obtained does not and could not reasonably be expected to,
individually or in the aggregate, have a Parent Material Adverse Effect (or an
effect on the Company and its Subsidiaries that were such effect applied to
Parent and its Subsidiaries, would constitute a Parent Material Adverse Effect)
and except for such Authorizations that are required by Laws to be obtained, or
such waiting period required by Laws to be observed, prior to the Effective
Time.
ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.1 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 of Parent and the Company; or
(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 (i) would give rise to the failure of a
condition set forth in clause (m) or (n) of Section 7.1, (ii) cannot be or
has not been cured prior to the Termination Date and (iii) has not been
waived by Parent pursuant to the provisions hereof;
(ii) if, at any time prior to the Effective Time, (A) the Company, or
its Board of Directors, as the case may be, shall have (w) entered into any
agreement with respect to any Takeover Proposal other than the Merger and
other than a confidentiality agreement permitted under Section 6.7, (x)
amended, conditioned, qualified, withdrawn or modified, or proposed or
resolved to do so, in a manner adverse to Parent or Merger Sub, its
approval and recommendation of the Merger and this Agreement, or (y)
approved or recommended, or proposed to approve or recommend, any Takeover
Proposal other than the Merger, or (B) the Company or the Company's Board
of Directors or any committee thereof shall have resolved to do any of the
foregoing; or
(iii) if the Company breaches any of its obligations under Section 6.7
or Section 9.1(c)(ii) hereof;
(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 (i) would give rise to the
failure of a condition set forth in clauses (n) and (o) of Section 8.1,
(ii) cannot be or has not been cured prior to the Termination Date and
(iii) has not been waived by the Company pursuant to the provisions hereof;
(ii) if a Superior Proposal is received by the Company and the Board
of Directors of the Company reasonably determines in good faith (after
receiving the advice of outside legal counsel) that it is necessary to
terminate this Agreement and enter into an agreement to effect the Superior
Proposal to comply with its fiduciary duties under applicable law;
provided, that the Company may not terminate this Agreement pursuant to
this Section 9.1(c)(ii) unless and until (i) three (3) Business Days have
elapsed following delivery to Parent of a written notice of such
determination by the Board of Directors and during such three (3) Business
Day period the Company has fully cooperated with Parent including, without
limitation, informing Parent of the terms and conditions of such Superior
Proposal, and the identity of the Person making such Superior Proposal,
with the intent of enabling both parties to agree to a modification of the
terms and conditions of this Agreement so that the transactions
contemplated hereby may be effected; (ii) at the end of such three (3)
Business Day period the Takeover Proposal continues to constitute a
Superior Proposal and the Board of Directors of the Company confirms its
determination (after receiving the advice of outside legal counsel) that it
is necessary to terminate this Agreement and enter into an agreement to
effect the Superior Proposal to comply with its fiduciary duties under
applicable law; and (iii) (x) at or prior to such termination, Parent has
received all fees and Expenses set forth in Section 9.3 hereof by wire
transfer in same day funds and (y) immediately following such termination
the Company enters into a definitive acquisition, merger or similar
agreement to effect the Superior Proposal; or
(iii) if, at any time prior to the Effective Time, (A) Parent or
Merger Sub or either of their respective Board of Directors, as the case
may be, shall have (x) entered into any agreement with respect to a
Takeover Proposal other than the Merger and other than a confidentiality
agreement permitted under Section 6.7, (y) amended, conditioned or
qualified, withdrawn or modified, or proposed or resolved to withdraw or
modify, in a manner adverse to the Company, its approval and recommendation
of the Merger and this Agreement or (B) Parent or Parent's Board of
Directors or any committee thereof shall have resolved to do any of the
foregoing.
(d) by either Parent or the Company:
(i) if the Effective Time has not occurred on or prior to January 31,
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 to have occurred on or prior to the
aforesaid date or the basis of such termination;
(ii) if any court of competent jurisdiction or any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently restricting, enjoining, restraining or otherwise prohibiting
the transactions contemplated by this Agreement and such order, decree,
ruling or other action shall have become final and nonappealable and prior
to such termination, the parties shall have used reasonable best efforts to
resist, resolve, or lift, as applicable, such judgment, injunction, order
or decree;
(iii) at the Parent Shareholder Meeting (including any adjournment or
postponement thereof), the Parent Shareholder Approval shall not have been
obtained; or
(iv) at the Company Shareholder Meeting (including any adjournment or
postponement thereof), the Company Shareholder Approval shall not have been
obtained.
Section 9.2 Effect of TerminationSection 8.2 Effect of Termination. In the
event of termination of this Agreement by Parent or the Company, as provided in
Section 9.1, this Agreement shall forthwith become void and there shall be no
liability hereunder on the part of the Company, Parent or Merger Sub or their
respective officers or directors (except as set forth in Section 4.15, Section
5.15, Section 6.2, this Section 9.2 and Sections 9.3, 10.3, 10.4, 10.5, 10.13
and 10.14, which shall survive the termination); provided, however, that nothing
contained in this Section 9.2 or in Section 9.3 shall relieve any party hereto
from any liability for any breach of this Agreement.
Section 9.3 Payment of Certain Fees. (a) If this Agreement is terminated by
Parent in accordance with Section 9.1(b)(i), 9.1(b)(ii)(A)(w), 9.1(b)(ii)(A)(y),
9.1(b)(ii)(B) (unless related to a resolution to take any of the actions set
forth in Section 9.1(b)(ii)(A)(x), in which case Section 9.3(c) shall apply) or
9.1(b)(iii) hereof then the Company shall (A) reimburse Parent for all of its
Expenses and (B) pay to Parent in immediately available funds a termination fee
in an amount equal to $200 million (the "Termination Fee").
(b) If this Agreement is terminated by Parent or the Company pursuant to
Section 9.1(d)(iv) hereof and (x) a Takeover Proposal has been made and publicly
announced or communicated to the Company's shareholders after the date of this
Agreement and prior to the Company Shareholder Meeting and, to the extent
applicable, (y) concurrently with or within twelve (12) months of the date of
such termination a Third Party Acquisition Event occurs, then the Company shall
(i) within one Business Day of the date of termination pursuant to Section
9.1(d)(iv) (A) pay to Parent 50% of the Termination Fee and (B) reimburse Parent
for all of its Expenses, and (ii) within one Business Day of the occurrence of
such a Third Party Acquisition Event (including any revisions or amendments
thereto) pay to Parent 50% of the Termination Fee.
A "Third Party Acquisition Event" means (i) the consummation of a Takeover
Proposal involving the purchase of a majority of either the equity securities of
the Company or of the consolidated assets of the Company and its Subsidiaries,
taken as a whole, or any such transaction that, if it had been proposed prior to
the termination of this Agreement would have constituted a Takeover Proposal or
(ii) the entering into by the Company or any of its Subsidiaries of a definitive
agreement with respect to any such transaction.
"Expenses" shall mean documented and reasonable out-of-pocket fees and
expenses up to a maximum aggregate amount of $10 million incurred or paid in
connection with the Merger or the consummation of any of the transactions
contemplated by this Agreement, including, but not limited to, all filing fees,
printing fees and reasonable fees and expenses of law firms, commercial banks,
investment banking firms, accountants, experts and consultants.
(c) If this Agreement is terminated by Parent pursuant to Section
9.1(b)(ii)(A)(x), then (i) the Company shall (A) pay to Parent 50% of the
Termination Fee and (B) reimburse Parent for all of its Expenses and (ii) if
concurrently with or within 12 months after such termination a Third Party
Acquisition Event occurs, then the Company shall pay to Parent 50% of the
Termination Fee within one Business Day of the occurrence of such a Third Party
Acquisition Event (including any revisions or amendments thereto).
(d) If this Agreement is terminated by the Company pursuant to Section
9.1(c)(i), then Parent shall (A) reimburse the Company for all of its Expenses
and (B) pay to the Company the Termination Fee.
(e) Any payment of the Termination Fee (and reimbursement of Expenses)
pursuant to this Section 9.3 shall be made within one Business Day after
termination of this Agreement (or as otherwise expressly set forth in this
Agreement) by wire transfer of immediately available funds. 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.
ARTICLE X
MISCELLANEOUS
Section 10.1 Representations and Warranties. The respective representations
and warranties of the Company, on the one hand, and Parent and Merger Sub, on
the other hand, contained herein or in any certificates or other documents
delivered prior to or at the Closing shall not be deemed waived or otherwise
affected by any investigation made by any party. Each and every such
representation and warranty shall expire with, and be terminated and
extinguished by, the Closing and thereafter none of the Company, Parent or
Merger Sub shall be under any liability whatsoever with respect to any such
representation or warranty. This Section 10.1 shall have no effect upon any
other obligation of the parties hereto, whether to be performed before or after
the Effective Time.
Section 10.2 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company, Parent or Merger Sub, may (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein by any other applicable party or in any document, certificate or writing
delivered pursuant hereto by any other applicable party or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any 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.
Section 10.3 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows:
(a) if to the Company, to it at:
Champion International Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: 203-358-6562
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. Coco, Esq.
(b) if to either Parent or Merger Sub, to it at:
UPM-Kymmene Corporation
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Telecopy: 011-358-204-150-304
Attention: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
in each case, with a copy (which shall not constitute notice) to:
White & Case LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third (3rd) Business Day after
the mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
Section 10.4 Entire Agreement. This Agreement and the annex, schedules and
other documents referred to herein or delivered pursuant hereto, collectively
contain the entire understanding of the parties hereto with respect to the
subject matter contained herein and supersede all prior agreements and
understandings, oral and written, with respect thereto, other than the
confidentiality provisions of the Confidentiality Agreement.
Section 10.5 Binding Effect; Benefit; Assignment. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and, with respect
to the provisions of Sections 6.10, 6.17(c) and 6.18 hereof, shall inure to the
benefit of the Persons or entities benefiting from the provisions thereof who
are intended to be third-party beneficiaries thereof and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, except
that Merger Sub may assign and transfer its right and obligations hereunder to
any of its Affiliates. Except as provided in the immediately preceding sentence,
nothing in this Agreement, expressed or implied, is intended to confer on any
Person other than the parties hereto or their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
Section 10.6 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented in writing by the parties
hereto in any and all respects before the Effective Time (notwithstanding any
shareholder approval), by action taken by the Board of Directors and the
Executive Board of Parent and the respective Boards of Directors of Merger Sub
and the Company or by the respective officers authorized by such Executive Board
or Boards of Directors or otherwise, as the case may be; provided, however, that
after any such shareholder approval, no amendment shall be made which by law
requires further approval by such shareholders without such further approval.
Section 10.7 Further Actions. Each of the parties hereto agrees that,
except as otherwise provided in this Agreement and subject to its legal
obligations, it will use its reasonable best efforts to fulfill all conditions
precedent specified herein, to the extent that such conditions are within its
control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
Section 10.8 Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only, do not constitute
a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 10.9 Enforcement. 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. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
Section 10.10 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
Section 10.11 Applicable Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflict of laws rules
thereof.
Section 10.12 Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
Section 10.13 Waiver of Jury Trial. Each of the parties to this Agreement
hereby irrevocably waives all right to a trial by jury in any action, proceeding
or counterclaim arising out of or relating to this Agreement or the transactions
contemplated hereby.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each of Parent, Merger Sub and the Company have caused
this Agreement to be executed by their respective officers thereunto duly
authorized, all as of the date first above written.
UPM-KYMMENE CORPORATION
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
By /s/ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
Title: General Counsel
BLUE ACQUISITION, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
By /s/ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
Title: General Counsel
CHAMPION INTERNATIONAL CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive Officer