Document:

exv4w3

 

EXHIBIT 4.3.

AGREEMENT

ON

THE COMBINATION

OF

GENERAL ELECTRIC COMPANY

AND

INSTRUMENTARIUM CORPORATION

Dated 18 December 2002

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	1.	 	
DEFINITIONS
	 	  4
	2.	 	
THE TENDER OFFER
	 	10
	 	 	
2.1
	 	The Tender Offer
	 	10
	 	 	
2.2
	 	Conditions of the Tender Offer
	 	11
	 	 	
2.3
	 	Offer Period
	 	14
	 	 	
2.4
	 	Closing
	 	15
	 	 	
2.5
	 	Company Board Statement
	 	15
	 	 	
2.6
	 	Mandatory Tender Offer
	 	15
	 	 	
2.7
	 	Company Held Shares and Options
	 	16
	3.	 	REPRESENTATIONS AND WARRANTIES	 	16
	4.	 	COVENANTS	 	16
	 	 	
4.1
	 	Reasonable Best Efforts
	 	16
	 	 	
4.2
	 	Cooperation
	 	17
	 	 	
4.3
	 	[Intentionally Omitted]
	 	18
	 	 	
4.4
	 	Conduct of Business Pending the Closing
	 	18
	 	 	
4.5
	 	Notices of Certain Events; Cure
	 	21
	 	 	
4.6
	 	Tender Offer Document
	 	22
	 	 	
4.7
	 	Compliance with Applicable US Regulations
	 	23
	 	 	
4.8
	 	Access to Information; Confidentiality
	 	23
	 	 	
4.9
	 	No Solicitation of Transactions;
Withdrawal of Company Board Statement
	 	24
	 	 	
4.10
	 	Public Announcements
	 	25
	 	 	
4.11
	 	Deio Stock and Options
	 	25
	 	 	
4.12
	 	Retention and Severance Plan
	 	25
	 	 	
4.13
	 	[Intentionally Omitted]
	 	26
	 	 	
4.14
	 	Employee Benefit Matters
	 	26
	 	 	
4.15
	 	Directors’ and Officers Indemnification and Insurance
	 	26
	 	 	
4.16
	 	Discharge from Liability
	 	28
	 	 	
4.17
	 	Business Integration
	 	29
	5.	 	TERMINATION, AMENDMENT AND WAIVER	 	29
	 	 	
5.1
	 	Termination
	 	29
	 	 	
5.2
	 	Effect of Termination
	 	31
	 	 	
5.3
	 	Amendment
	 	33
	6.	 	GENERAL PROVISIONS	 	33
	 	 	
6.1
	 	Survival of Representations and Warranties
	 	33
	 	 	
6.2
	 	Notices
	 	33
	 	 	
6.3
	 	Assignment; Binding Effect; Benefit
	 	35
	 	 	
6.4
	 	Expenses
	 	35
	 	 	
6.5
	 	No Waiver
	 	35
	 	 	
6.6
	 	Provisions Severable
	 	36
	 	 	
6.7
	 	Headings
	 	36
	 	 	
6.8
	 	Governing Law and Arbitration
	 	36
	 	 	
6.9
	 	Entire Agreement
	 	36
	 	 	
6.10
	 	Payments
	 	37
	 	 	
6.11
	 	Counterparts of the Agreement
	 	37

 

 

2

COMBINATION AGREEMENT

THIS COMBINATION AGREEMENT (this “Agreement”) is entered into on 18 December
2002 between

General Electric Company, a corporation organized and existing under the laws
of New York, headquartered in the state of Connecticut (the “Offeror”);

and

Instrumentarium Corporation, a corporation organized and existing under the
laws of Finland, having its registered office in Helsinki, Finland (the
“Company”).

The Offeror and the Company are hereinafter jointly referred to as “Parties”
and each of them as a “Party”.

RECITALS:

	A.	 	The Offeror is a global diversified industrial corporation with common
stock listed on the New York Stock Exchange and the Boston Stock Exchange;
	 
	B.	 	The Company is a company specializing in the development of medical
equipment and technology related to the areas of anesthesia and critical
care with stock listed on the Helsinki Exchanges (“HEX”) and American
Depositary Shares (“ADSs”) listed on the Nasdaq SmallCap Market;
	 
	C.	 	The Boards of Directors of each of the Offeror and the Company have
determined that it is in the best interests of their respective companies
and shareholders to effect the combination as set forth in this Agreement;

 

 

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	D.	 	The Parties intend, upon the terms and subject to the conditions of this
Agreement, that in order to effect the combination, the Offeror will
acquire, pursuant to a voluntary public tender offer made through a newly
formed Finnish entity that is a wholly owned subsidiary of Offeror (the
“Tender Offer”) and, if required, pursuant to a mandatory tender offer and
compulsory acquisition proceedings (including any such proceedings that
may be required under the Articles of Association of the Company), all of
the issued and outstanding shares of the Company, including those
represented by ADSs (the “Company Shares”), and the option rights approved
for issuance at the General Meeting of Shareholders of the Company on 17
June 1998 that have been granted to holders (the “Company 1998 Options”)
and the option rights approved for issuance at the General Meeting of
Shareholders of the Company on 26 March 2001 that have been granted to
holders (the “Company 2001 Options” and, together with the Company 1998
Options, the “Company Options”) entitling holders to subscribe for shares
of the Company, as more fully described below, in accordance with the
Finnish Securities Market Act (495/1989, as amended) and the rules and
regulations thereunder (the “SMA”), the Finnish Companies Act (734/1978,
as amended), the US Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (the “US Exchange Act”), and the rules of
all applicable stock exchanges;
	 
	E.	 	As a result of the transactions described in Recital D., the Company will
become a wholly owned subsidiary of the Offeror;
	 
	F.	 	Having evaluated the Share Offer Price and the Option Offer Price (each
as defined below) to be offered by the Offeror in the Tender Offer, the
Terms and Conditions (as defined below) and the terms and conditions of
this Agreement, and having regard to all other relevant considerations,
the Board of Directors of the Company has concluded that the entering into
of this Agreement and the completion of the transactions contemplated
hereby are in the best interest of the holders of the Company Shares and
the Company Options and has therefore approved this Agreement and
determined to recommend that such holders tender their Company Shares and
Company Options in accordance with the Terms and Conditions.

 

 

4

NOW THEREFORE, the Parties hereby agree as follows:

	1.	 	DEFINITIONS

As used in this Agreement, unless otherwise expressly stated, the following
terms shall have the following meanings, the singular (where appropriate) shall
include the plural and vice versa and references to Exhibits, Schedules and
Sections shall mean Exhibits and Schedules to and Sections of this Agreement:

	 	 	 	 	 
	1.1	 	
“Acquisition Proposal”
	 	shall mean (i) a proposal or offer
from any Person relating to the direct
or indirect acquisition, for
consideration consisting of cash
and/or securities, of (A) all or
substantially all of the assets of the
Company and its Subsidiaries, taken as
a whole, or (B) more than two-thirds
of the capital stock of the Company;
(ii) any tender offer or exchange
offer that, if consummated, would
result in any Person beneficially
owning more than two-thirds of the
capital stock of the Company; or (iii)
any proposal to effect an acquisition
of the Company or all or substantially
all of the assets of the Company and
its Subsidiaries by means of a merger,
consolidation, business combination,
recapitalization or similar
transaction involving the Company,
other than the Tender Offer and the
other transactions contemplated
hereby.
	 	 	 	 	 
	1.2	 	
“Affiliate”
	 	of a specified Person shall mean a
Person that, directly or indirectly
through one or more intermediaries,
Controls, is Controlled by or is under
common Control with, such specified
Person.

 

 

5

	 	 	 	 	 
	1.3	 	
“Business Day”
	 	shall mean any day that is not a
Saturday, a Sunday or any other day on
which banks are required or authorized
by Law to be closed in the City of New
York, New York, United States of
America or the City of Helsinki,
Finland.
	 	 	 	 	 
	1.4	 	
“Closing”
	 	shall mean the consummation of the
sale and purchase of the Company
Shares and the Company Options as
contemplated in Section 2.4.
	 	 	 	 	 
	1.5	 	
“Closing Date”
	 	shall mean the date of the Closing.
	 	 	 	 	 
	1.6	 	
“Company Board
Statement”
	 	shall mean the statement of support
for the Tender Offer by the Board of
Directors of the Company substantially
in the form set forth in Schedule 2.5
	 	 	 	 	 
	1.7	 	
“Control”
	 	(including the terms “Controlled by”
and “under common Control with”) shall
mean the possession, directly or
indirectly, of the power to direct or
cause the direction of the management
and policies of a Person, whether
through the ownership of voting
securities, by contract or otherwise.
	 	 	 	 	 
	1.8	 	
“Disclosure Letter”
	 	shall mean the letter of disclosure
dated the date hereof with respect to
this Agreement.
	 	 	 	 	 
	1.9	 	
“EC Merger Regulation”
	 	shall mean Council Regulation (EEC)
4064/89, as amended.
	 	 	 	 	 
	1.10	 	
“Expenses”
	 	shall mean documented and reasonable
actual out-of-pocket fees and expenses
paid or payable by a Party in
connection with the transactions

 

 

6

	 	 	 	 	 
	 	 	 	 	contemplated by this Agreement,
including but not limited to, all
filing fees, printing fees and
reasonable fees and expenses of law
firms, investment banks, accountants,
experts, consultants and other agents.
	 	 	 	 	 
	1.11	 	
“Governmental
Authorities”
	 	shall mean any supranational,
national, federal, state, provincial,
county or local government,
governmental, regulatory or
administrative authority, agency,
instrumentality or commission, or any
court, tribunal, or judicial or
arbitral body, including, without
limitation, the Finnish Financial
Supervision Authority, the SEC and the
Merger Control Authorities.
	 	 	 	 	 
	1.12	 	
“Joint Defense
Agreement”
	 	shall mean the Joint Defense and
Confidentiality Agreement, dated 12
July 2002, between the Offeror and the
Company.
	 	 	 	 	 
	1.13	 	
“Knowledge of the
Company”
	 	shall mean the actual knowledge of
Olli Riikkala, Ritva Sotamaa, Richard
Atkin, Arto Kontturi, Andrew Krakauer,
Folke Lindberg, Antti Ritvos, Matti
Salmivuori, Karita Salokangas, Lori
Cross, Hannu Ahjopalo, Eero
Hautaniemi, Juhani Lassila, Timo
Koskinen, Aarne Reponen, Brian
Mitchard and Bill Exner.

 

 

7

	 	 	 	 	 
	1.14	 	
“Material Adverse
Change”
	 	shall mean any event, change, effect
or occurrence since the date of this
Agreement that, individually or
together with any other event, change,
effect or occurrence since the date of
this Agreement, is or would likely be
materially adverse to the business,
financial condition or results of
operations of the Company and its
Subsidiaries, taken as a whole, if and
to the extent that such event, change,
effect or occurrence, individually or
together with any other event, change,
effect or occurrence results in a
diminution of enterprise value of the
Company and its Subsidiaries, taken as
a whole, in an amount in excess of EUR
300,000,000 in the aggregate.
	 	 	 	 	 
	1.15	 	
“Material
Adverse Effect”
	 	shall mean any event, change, effect
or occurrence that, individually or
together with any other event, change,
effect or occurrence, is or would
likely be materially adverse to the
business, financial condition or
results of operations of the Company
and its Subsidiaries, taken as a
whole, if and to the extent that such
event, change, effect or occurrence,
individually or together with any
other event, change, effect or
occurrence, results in a diminution of
enterprise value of the Company and
its Subsidiaries taken as a whole in
an amount in excess of EUR 300,000,000
in the aggregate.
	 	 	 	 	 
	1.16	 	
“Merger Control
Authorities”
	 	shall mean the European Commission,
the United States Department of
Justice, the United States Federal
Trade Commission and the other
antitrust and merger control
authorities in

 

 

8

	 	 	 	 	 
	 	 	 	 	jurisdictions in which
the approval of such authorities is
required by Law to be obtained prior
to the consummation of the Tender
Offer.
	 	 	 	 	 
	1.17	 	
“Person”
	 	shall mean an individual, corporation,
partnership, limited partnership,
limited liability company, syndicate,
group (including, without limitation,
a “group” as defined in Section
13(d)(5) of the US Exchange Act or
Article 1, Section 3 of the Finnish
Companies Act), trust, association or
entity or government, political
subdivision, agency or instrumentality
of a government.
	 	 	 	 	 
	1.18	 	
“SEC”
	 	shall mean the US Securities and
Exchange Commission.
	 	 	 	 	 
	1.19	 	
“Subsidiary”
	 	shall mean, with respect to a
specified Person, a Person that,
directly or indirectly through one or
more intermediaries, is Controlled by
such specified Person.
	 	 	 	 	 
	1.20	 	
“Superior Proposal”
	 	shall mean a bona fide written
Acquisition Proposal made by a third
party, not obtained in breach of this
Agreement, on terms and conditions
that the Board of Directors of the
Company determines in good faith, (a)
after having obtained independent
written advice that has not been
withdrawn from an internationally
recognized investment banking firm (a
copy of which shall be provided to the
Offeror, not as an addressee and not
for the purpose of Offeror’s reliance
on the evaluation and other matters
contained therein), to be more
favorable from a financial point of
view to the Company or the

 

 

9

	 	 	 	 	 
	 	 	 	 	holders of
Company Shares and Company Options, as
the case may be, than the Tender
Offer, taking into account at the time
of determination any changes to the
Share Offer Price and Option Offer
Price that as of that time have been
proposed by the Offeror and (b) is
reasonably capable of being financed.
	 	 	 	 	 
	1.21	 	
“Tender Offer Document”
	 	shall mean the documentation prepared
for the Tender Offer in accordance
with the SMA, which shall include the
Terms and Conditions.
	 	 	 	 	 
	1.22	 	
“Tender Offer Period”
	 	shall mean the period between the
commencement of the Tender Offer and
the Expiration Date.
	 	 	 	 	 
	1.23	 	
“US”
	 	shall mean the United States of
America, its territories and
possessions, any state of the United
States of America and the District of
Columbia.
	 	 	 	 	 
	1.24	 	
“US Holder”
	 	shall mean a holder of Company Shares
or Company Options resident in the US.

	 	 	The terms set forth below shall have the meanings ascribed thereto in
the following Sections:

	 	 	 
	Term	 	Section
	
	 	

	Action	 	
4.15(b)
	ADS	 	
Recitals
	Agreement	 	
Preamble
	Annual Dividend	 	
2.1
	Company	 	
Preamble
	Company 1998 Options	 	
Recitals
	Company 2001 Options	 	
Recitals

 

 

10

	 	 	 
	Company Options	 	
Recitals
	Company Shares	 	
Recitals
	Competition Clearances	 	
2.2(iii)(D)
	Confidentiality Agreement	 	
4.8
	Deio	 	
4.11
	End Date	 	
5.1(b)(i)
	Environmental Laws	 	
Schedule 3.1I
	Expiration Date	 	
2.3
	Financial Statements	 	
Schedule 3.1B(b)
	GAAP	 	
Schedule 3.1B(b)
	General Meeting	 	
4.16(a)
	Hazardous Substances	 	
Schedule 3.1I
	HEX	 	
Recitals
	HSR Act	 	
2.2(iii)(A)
	Indemnified Parties	 	
4.15(b)
	Law	 	
Schedule 3.1F
	Minimum Condition	 	
2.2(ii)
	Offeror	 	
Preamble
	Option Offer Price	 	
2.1
	Party	 	
Preamble
	Permits	 	
Schedule 3.1J
	Public Filings	 	
Schedule 3.1B
	SMA	 	
Recitals
	Share Offer Price	 	
2.1
	Tender Offer	 	
Recitals
	Terms and Conditions	 	
2.1
	Transaction Conditions	 	
2.2
	US Exchange Act	 	
Recitals

	2.	 	THE TENDER OFFER
	 
	2.1	 	The Tender Offer
	 
	 	 	Subject to the terms and conditions hereof, the Offeror shall commence
the Tender Offer as promptly as practicable. Subject to the terms and
conditions of this Agreement, including the Terms and Conditions, the
Offeror shall offer to pay and shall pay consideration of EUR 40 in
cash, subject to adjustment as set forth in this Section 2.1, for each
Company Share validly tendered and not withdrawn (the “Share Offer
Price”) and the following consideration for each Company Option
validly tendered and not withdrawn (the “Option Offer Price”):

 

 

11

	 	(a)	 	for the Company 1998 Options:
	 
	 	 	 	EUR 52.29 in cash for each A option;
	 
	 	 	 	EUR 56.65 in cash for each B option;
	 
	 	 	 	EUR 60.36 in cash for each C option; and
	 
	 	(b)	 	for the Company 2001 Options:
	 
	 	 	 	EUR 45.46 in cash for each A warrant; and
	 
	 	 	 	EUR 36.92 in cash for each B warrant.

	 	 	The Share Offer Price shall be adjusted as follows: (i) if the
aggregate amount of dividends approved by Meetings of Shareholders of
the Company between the date hereof and the Closing exceeds EUR 0.70
(such amount up to EUR 0.70, the “Annual Dividend”) per share
(adjusted for any stock split or reclassification after the date
hereof as permitted under this Agreement), the Share Offer Price shall
be reduced by the amount of such excess; and (ii) if the Closing shall
have occurred prior to the approval or record date of the Annual
Dividend by a Meeting of Shareholders of the Company, the Share Offer
Price shall be increased by EUR 0.70.
	 
	 	 	The terms and conditions of the Tender Offer (the “Terms and
Conditions”) are set forth in Schedule 2.1.
	 
	2.2	 	Conditions of the Tender Offer
	 
	 	 	The obligation of the Offeror to accept for payment the Company
Shares and the Company Options tendered pursuant to the Tender Offer
shall be subject to the satisfaction or waiver by the Offeror on or
prior to the Closing Date in

 

 

12

	 	 	accordance with this Section 2.2 of the following conditions (the
“Transaction Conditions”):

	 	(i)	 	This Agreement shall not have been terminated in accordance
with Section 5.1;
	 
	 	(ii)	 	(A) Company Shares and Company Options having a value (as
defined below) representing more than 80% of the aggregate value
(as defined below) and (B) more than 80% of the Company Shares
outstanding as of the Closing Date (representing more than 80% of
the voting power) shall have been validly tendered and not
withdrawn in accordance with the Terms and Conditions (the “Minimum
Condition”). For purposes of determining whether the Minimum
Condition has been satisfied, options and Company Shares held by
the Company shall not be taken into consideration, assuming the
Company shall have complied with its obligations set forth in
Section 2.7. For purposes of this clause, “value” for each Company
Share shall mean the Share Offer Price and “value” for each Company
Option shall mean the Option Offer Price set forth in Sections
2.1(a) or 2.1(b) and “aggregate value” shall mean the sum of (x)
the number of Company Shares outstanding as of the Closing Date
multiplied by the Share Offer Price and (y) the number of Company
Options outstanding as of the Closing Date in each category
multiplied by the relevant Option Offer Price;
	 
	 	(iii)	 	(A) The applicable waiting period (and any extension
thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the
“HSR Act”), shall have expired or been earlier terminated (and no
action to enjoin or restrain the consummation of the Tender Offer,
based on US competition law by the US Department of Justice or
Federal Trade Commission shall be pending and there shall not be in
effect an agreement or commitment not to close the Tender Offer),
(B) the European Commission shall have issued a decision pursuant
to the EC Merger Regulation declaring the transactions contemplated
hereby compatible with the common market

 

 

13

	 	 	 	(or compatibility being deemed under Article 10(6) of the EC
Merger Regulation), (C) the applicable waiting period shall have
expired or been waived and the Commissioner of the Canadian
Competition Bureau shall have advised the Offeror that he does
not intend to oppose the consummation of the transactions
contemplated by the Agreement or shall have issued an advance
ruling certificate in respect of such transactions pursuant to
Section 102 of the Competition Act (Canada), (D) the approvals
of the other Merger Control Authorities shall have been received
and any applicable waiting periods shall have expired or have
been terminated or waived (the expiration, termination or waiver
of such waiting periods (and the absence of such action,
agreement or commitment), the issuance of such decision, if
applicable, the receipt of such advice or issuance of such
certificate and the receipt of such approvals being collectively
referred to as the “Competition Clearances”);
	 
	 	(iv)	 	The approvals of Governmental Authorities other than the
Merger Control Authorities or any other third party necessary for
the consummation of the Tender Offer or the other transactions
contemplated by this Agreement shall have been received, except
where the failure to obtain such approvals would not have a
Material Adverse Effect or, in the case of approvals of
Governmental Authorities, would not expose either Party, or any of
their respective officers or directors, to criminal liability or
other sanctions by such Governmental Authorities;
	 
	 	(v)	 	No order shall have been issued by a court of competent
jurisdiction or other Governmental Authority preventing the
consummation of the Tender Offer or the other transactions
contemplated by this Agreement that remains in effect;
	 
	 	(vi)	 	Since the date of this Agreement, there shall not have
occurred and be continuing as of the Closing Date any (A) Material
Adverse Change, (B) material breach or failure by the Company to
perform or comply in any material respect with any material
agreement or covenant required by

 

 

14

	 	 	 	this Agreement to be performed or complied with by it prior to
the Closing Date, or (C) force majeure event that prevents or
suspends payment of the Share Offer Price and the Option Offer
Price; provided that the End Date shall be extended for such
period of time that payment is so prevented or suspended; and,
	 
	 	(vii)	 	The representations and warranties of the Company
contained in Schedule 3.1 to this Agreement shall be true and
correct as though made on or as of the date of this Agreement and
on or as of the Closing Date (except that representations and
warranties that address matters only as of a specified date shall
have been true and correct as of such date) except where failure to
be true and correct (without giving effect to any limitation as to
“materiality” or “Material Adverse Effect” set forth in individual
representations and warranties) would not have a Material Adverse
Effect.

	 	 	The Offeror may reduce the Minimum Condition to, but not less than,
two-thirds of the total number of Company Shares outstanding as of the
Closing Date plus one Company Share. Subject to the immediately
preceding sentence, the Offeror shall not otherwise have the right to
waive the Minimum Condition. The Offeror shall be obligated to comply
in all respects with Article 11 of the articles of association of the
Company.
	 
	2.3	 	Offer Period
	 
	 	 	The initial expiration date of the Tender Offer shall be the 90th day
after the date on which the Tender Offer commences (such date, as it
may be extended from time to time as hereinafter provided, being
referred to herein as the “Expiration Date”). The Expiration Date
shall be extended by the Offeror if and to the extent permitted by the
Finnish Financial Supervision Authority in accordance with its
statement K/44/2002/PMO from time to time until such time as all of
the Transaction Conditions shall have been satisfied or waived in
accordance with Section 2.2. If all the Transaction Conditions have
been satisfied or, if permitted by the terms of this Agreement, waived
prior to the

 

 

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	 	 	Expiration Date, the Offeror shall consummate the Tender Offer prior to such
Expiration Date in accordance with the Terms and Conditions.
	 
	2.4	 	Closing
	 
	 	 	The Offeror shall accept for payment all Company
Shares and Company Options validly tendered and not
withdrawn as soon as the Transaction Conditions have
been satisfied or waived in accordance with Section
2.2, whether during the initial Tender Offer Period
or any extension thereof.
	 
	 	 	The Offeror shall pay for all Company Shares and
Company Options accepted for payment as soon as
practicable after the Closing Date but in any event
no later than seven Business Days after the Closing
Date. To the extent legally possible, the
consummation of the sale and purchase of the Company
Shares and the Company Options at Closing shall take
place over the HEX. The transfer tax, if any, levied
on the sale and purchase of the Company Shares and
the Company Options shall be borne by the Offeror.
	 
	2.5	 	Company Board Statement
	 
	 	 	The Board of Directors of the Company has determined
(i) to recommend to the holders of the Company Shares
and the Company Options that they accept the Tender
Offer and tender their Company Shares or Company
Options pursuant to the Terms and Conditions and (ii)
to issue the Company Board Statement.
	 
	2.6	 	Mandatory Tender Offer
	 
	 	 	As soon as practicable after the Closing Date, the
Offeror shall, subject to the applicable rules,
regulations and procedures, make a mandatory tender
offer if required by the SMA and take other necessary
action under Finnish Law and any US securities laws
or regulations to acquire all the remaining issued
and outstanding Company Shares and Company Options.

 

 

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	2.7	 	Company Held Shares and Options
	 
	 	 	The Company hereby undertakes to procure that neither
the Company nor its Subsidiaries holding Company
Shares or options approved for issuance at the
General Meeting of Shareholders of the Company on 17
June 1998 and at the General Meeting of Shareholders
of the Company on 26 March 2001 shall tender any such
Company Shares or such options in the Tender Offer or
any subsequent offer.
	 
	3.	 	REPRESENTATIONS AND WARRANTIES
	 
	 	 	The Company makes the representations and warranties to the Offeror set
forth in Schedule 3.1 hereto and the Offeror makes the representations
and warranties to the Company set forth in Schedule 3.2 hereto. Except
for the representations and warranties contained in Schedule 3.1 and
Schedule 3.2, neither the Company nor the Offeror makes any other
express or implied representation or warranty to each other.
	 
	4.	 	COVENANTS
	 
	4.1	 	Reasonable Best Efforts
Each Party agrees in relation to any matter for which it is
responsible expeditiously to make all filings with Governmental
Authorities that such Party is required to make and to use its
reasonable best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done the things necessary or advisable to
complete and make effective, in an expeditious manner, the Tender
Offer and the other transactions contemplated by this Agreement,
including:

	 	(i)	 	the obtaining of all necessary actions or non-actions,
waivers, consents and approvals from all Governmental Authorities
or stock exchanges and the making of all necessary registrations
and filings and the taking of all reasonable steps as may be
necessary to obtain an approval or

 

 

17

	 	 	 	waiver from, or to avoid an Action or proceeding by, any such
Governmental Authority or stock exchange;
	 
	 	(ii)	 	the obtaining of all consents, approvals or waivers from
third parties that are material to the Company and the Company’s
Subsidiaries, taken as a whole; and
	 
	 	(iii)	 	the execution and delivery of such additional instruments
and the taking of such additional actions necessary or advisable to
consummate the transactions contemplated by, and to carry out the
purposes of, this Agreement.

	4.2	 	Cooperation
	 
	 	 	The Parties shall cooperate and assist one another in connection with
all actions to be taken pursuant to Section 4.1, including the
preparation and making of the filings referred to therein and, if
requested, amending or furnishing additional information thereunder,
including, subject to applicable Law, the Confidentiality Agreement
and the Joint Defense Agreement, providing copies of all related
documents to the non-filing Party and their advisors prior to filing,
and to the extent practicable neither of the Parties will file any
such document or have any communication with any Governmental
Authority without prior consultation with the other Party. Each Party
shall keep the other apprised of the content and status of any
communications with, and communications from, any Governmental
Authority with respect to the Tender Offer and the other transactions
contemplated under this Agreement. To the extent practicable and
permitted by a Merger Control Authority, each Party shall permit
representatives of the other Party to participate in meetings and
calls with such Merger Control Authority.

 

 

18

	4.3	 	[Intentionally Omitted]
	 
	4.4	 	Conduct of Business Pending the Closing
	 
	 	 	The Company hereby agrees that, between the date of this Agreement and
the Closing Date, except as (i) set out in Schedule 4.4, (ii) expressly
required by any other provision of this Agreement, (iii) required by
applicable Law, or (iv) the Offeror may agree in writing, the Company
and its Subsidiaries shall conduct its businesses only in the ordinary
course of business consistent with past practice, and shall use
reasonable best efforts to preserve their current businesses and
relationships with customers, suppliers and other similar Persons and
retain the services of their current officers and key employees.
Without limiting the generality of the foregoing, except as set out in
Schedule 4.4, between the date hereof and the Closing Date the Company
shall not, and shall not permit any if its Subsidiaries to, without the
consent of the Offeror (it being understood and agreed by the Offeror
that it shall respond to any request by the Company for such consent
promptly):

	 	(i)	 	(A) declare or pay any dividends on, or make
any other distribution in respect of, any of its capital
stock; provided, however, that (x) subject to adjustment to
the Share Offer Price as set forth in Section 2.1, the
Company may declare or pay the Annual Dividend and dividends
in respect of the Company Shares in excess of the Annual
Dividend if approved by Meetings of the Shareholders of the
Company between the date hereof and the Closing Date, but in
no event shall such excess be greater than EUR 200 million
in the aggregate and (y) any Subsidiary of which the Company
directly holds at least 95% of the voting power of such
Subsidiary may declare or pay dividends to the Company;
provided that the declaration or payment of any such
dividends in the aggregate shall not exceed EUR 60 million,
and in the aggregate will not result in any incremental tax
liability (such as income, withholding or capital tax) to
the Company in excess of EUR 1 million; (B) split or
reclassify any of its capital

 

 

19

	 	 	 	stock or issue any other securities in respect of or in
substitution for shares of its capital stock or (C)
purchase, redeem or otherwise acquire any shares of
capital stock of the Company (including, for the avoidance
of doubt, subscription of shares by virtue of the stock

options issued to or held by the Company or any of its
Subsidiaries) or any rights, warrants or options to
acquire any such shares or other securities;
	 
	 	(ii)	 	(A) issue, sell, pledge, dispose of or
otherwise encumber any shares of its capital stock or any
rights, warrants, options or convertible securities to
acquire any such shares (except for the issuance of the
shares of the Company in an amount not to exceed the
aggregate amounts set forth in Schedule 3.1C(iii) and
Schedule 3.1C(iv), respectively, pursuant to the exercise of
the Company Options); provided that, the Company may grant
and deliver to any employee Company Options previously
granted and delivered to another employee that have been
forfeited by such employee, or (B) distribute or grant to
any Person any of the stock options issued to or held by any
of the Company’s Subsidiaries;
	 
	 	(iii)	 	amend its Articles of Association;
	 
	 	(iv)	 	fail to submit any report required to be
submitted by the HEX or the SEC, in accordance with the
requirements of the SMA and the US Exchange Act,
respectively;
	 
	 	(v)	 	acquire any business or any company or other
business entity or otherwise acquire any material amount of
assets other than operating assets used in the ordinary
course of business consistent with past practice;
	 
	 	(vi)	 	sell, lease or otherwise dispose of any
business or assets in excess of EUR 10 million in the
aggregate other than (x) sales of

 

 

20

	 	 	 	inventory in the ordinary course of business consistent
with past practice, (y) the non-operating real estate
assets set forth in Schedule 4.4 and (z) operating assets
in the ordinary course of business consistent with past
practice;
	 
	 	(vii)	 	except for (A) borrowings under, and
refinancings of, existing credit facilities or outstanding
commercial paper or (B) borrowings made to fund the
aggregate dividends approved by Meetings of the Shareholders
of the Company between the date hereof and the Closing Date
in excess of the Annual Dividend as described in clause
(i)(A) above, incur any indebtedness for borrowed money, or
guarantee any indebtedness, or make any loans or advances or
capital contributions to, or other investments in, any other
entity other than an Affiliate, in excess of EUR 5 million
in the aggregate, unless such guarantees, loans or similar
capital commitments are made to facilitate the Company’s
sales through export financings or similar devices;
	 
	 	(viii)	 	alter (through merger, liquidation, reorganization or
restructuring) the corporate structure or ownership of the
Company or any of its Subsidiaries;
	 
	 	(ix)	 	except as required by employment contracts
entered into in the ordinary course of business consistent
with past practice, embodied in any collective bargaining
agreements or as provided in the Retention and Severance
Plan or other than in accordance with existing policies or
in the ordinary course of business consistent with past
practice, increase in any material respect the compensation
or benefits of any of its directors, officers or employees
or grant any severance or termination pay to, or enter into,
adopt or amend in any material respect any other arrangement
for the benefit of any director, officer or employee;

 

 

21

	 	(x)	 	change in any material respect accounting
policies or procedures other than as required by GAAP or
applicable Law;
	 
	 	(xi)	 	make any material tax election or settle or
compromise any material tax liability;
	 
	 	(xii)	 	enter into, renew or terminate or amend in
any material respect any material agreement other than in
the ordinary course of business consistent with past
practice;
	 
	 	(xiii)	 	except as permitted by clause (vii) of this Section 4.4,
create any material lien or other encumbrance upon any
material asset of the Company;
	 
	 	(xiv)	 	commence any litigation seeking material
recourse, or settle, compromise or enter into any consent
decree or order with respect to any material claim or
litigation for an amount in excess of EUR 10 million in the
aggregate; or
	 
	 	(xv)	 	agree or make a legally binding commitment to
do any of the foregoing.

	4.5	 	Notices of Certain Events; Cure

	 	(a)	 	Each Party shall give prompt notice to the other Party of
any change, event or circumstance, of which such Party has
knowledge (it being understood that for purposes of this Section
4.5(a) as it applies to the Company, the term “knowledge” shall
mean the Knowledge of the Company), that is reasonably likely (i)
to result in (A) any of such Party’s representations or warranties
being untrue or inaccurate in any material respect or (B) a breach
of any such Party’s material covenants or agreements or (ii) to
delay or impede materially its ability to perform its obligations
set forth herein.

 

 

22

	 	(b)	 	Both Parties, being committed to facilitating a successful
Tender Offer and consummation of the transactions contemplated by
this Agreement, agree and covenant to cooperate in good faith to
cure any event or condition that, if uncured, would result in the
failure of any Transaction Condition or give a Party the right to
terminate this Agreement pursuant to Section 5.1 hereof.

	4.6	 	Tender Offer Document

	 	(a)	 	Promptly following execution of this Agreement, the Offeror
shall prepare and submit for approval to the Finnish Financial
Supervision Authority the Tender Offer Document and, subject to
Section 4.6(c), shall take such actions as may be necessary to
obtain such approval; provided that such actions do not require any
change in the substance of the Terms and Conditions. The Offeror
shall file with or furnish to the SEC on the appropriate form the
statements or other documents required by the US Exchange Act. The
Offeror shall mail or otherwise make available the appropriate
Tender Offer Document to the holders of the Company Shares and
Company Options. An English translation of the Tender Offer
Document, or such other Tender Offer documents as may be required
by the US Exchange Act, including any amendments thereto and any
other Tender Offer material, shall be disseminated by the Offeror
to US Holders on a comparable basis as to the Company’s
shareholders and optionholders in Finland and in accordance with
applicable US Law. To the extent that the Company furnishes
information concerning the Company for inclusion in the Tender
Offer Document, such information shall be accurate and complete in
all material respects.
	 
	 	(b)	 	The Tender Offer Document shall include the Company Board
Statement. If required under applicable SEC rules and regulations,
the Company Board Statement will be filed by the Company separately
with the SEC and disseminated to US Holders by the Company on such
form as is appropriate.

 

 

23

	 	(c)	 	The Offeror shall not modify the Terms and Conditions
(other than reduction of the Minimum Condition as permitted under
Section 2.2) and shall not make any substantive amendment or
supplement to the Tender Offer Document without the consent of the
Company, such consent not to be unreasonably withheld or delayed.
Each of the Offeror and the Company will advise the other promptly
after it receives notice of any request by any relevant authorities
for amendment of the Tender Offer Document or comments thereon and
responses thereto or requests by any relevant authorities for
additional information.
	 

	4.7	 	Compliance with Applicable US Regulations
	 
	 	 	The Offeror shall take all action necessary to comply with the rules and
regulations of the SEC, the National Association of Securities Dealers,
the Nasdaq National Market, or any other US Governmental Authority,
including, without limitation: (A) communicating with banks, brokers and
other shareholder nominees to determine the aggregate number of Company
Shares and Company Options held by US Holders as of a date that is 30
days before the commencement of the Tender Offer and (B) preparing, and
furnishing to the SEC under cover of Form CB, or filing with the SEC on
such other form as is appropriate, an English translation of the Tender
Offer Document and any other Tender Offer material provided to
shareholders of the Company or required under US securities laws. The
Company will cooperate and assist the Offeror in connection with the
foregoing.
	 
	4.8	 	Access to Information; Confidentiality
	 
	 	 	Except as required pursuant to any confidentiality agreement to which
the Company or any of its Subsidiaries is a party or pursuant to
applicable Law, including, without limitation, competition Law, from the
date of this Agreement to the Closing Date, the Company shall (and shall
cause its Subsidiaries to) provide to the Offeror and its officers,
employees and authorized representatives reasonable and customary
access, during normal business hours, upon reasonable prior notice and
in a manner not disruptive to any of the

 

 

24

	 	 	businesses or operations of the Company or its Subsidiaries, to such
information concerning the business, properties, contracts, assets,
liabilities and personnel, and to such officers, employees, accountants
and other representatives, of the Company and its Subsidiaries as the
Offeror may reasonably request. In making such requests under this
provision the Offeror shall act proportionally, taking into account the
need for the Company to maintain its independence, to maintain business
confidentiality and to maintain efficient operations pending the
Closing, and taking into account the Company’s need to conduct its
business if the Closing does not occur. All requests by the Offeror
under this Section 4.8 shall be co-ordinated by a committee comprising
three representatives of each of the Parties. The Parties shall each
comply with all of their respective obligations in the Confidentiality
Agreement, dated as of 6 August 2002 (the “Confidentiality Agreement”),
and the Joint Defense Agreement with respect to the information
disclosed. All information provided hereunder to the other Party shall
be covered by the Confidentiality Agreement and the Joint Defense
Agreement, which shall survive the termination or expiration of this
Agreement.

	 	 	No investigation pursuant to this Section 4.8 shall affect any
representation or warranty in this Agreement of either Party or any
condition to the obligations of the Parties under this Agreement.
	 
	4.9	 	No Solicitation of Transactions; Withdrawal of Company Board Statement
	 
	 	 	The Company will immediately terminate any discussions relating to any
Acquisition Proposal and thereafter will not, (i) directly or indirectly
(through advisors or representatives or otherwise), solicit any
Acquisition Proposal (including, without limitation, any proposal or
offer to its shareholders), (ii) except as required by the fiduciary
duties of the Board of Directors of the Company under applicable Law,
participate in any negotiations regarding, or furnish to any Person any
information with respect to, or otherwise cooperate with respect to any
Acquisition Proposal, or (iii) withdraw or modify the Company Board
Statement; provided that the Board of Directors may so

 

 

25

	 	 	withdraw or modify the Company Board Statement if it determines in good
faith, consistent with written advice from a reputable Finnish counsel
(a copy of which advice shall be given to Offeror) with respect to the
Board of Directors’ fiduciary duties under applicable Law, that it has
an obligation to withdraw or modify the Company Board Statement. Each
Party will notify the other promptly of the receipt by it of any
Acquisition Proposal and material terms thereof.
	 
	4.10	 	Public Announcements
	 
	 	 	The initial press release concerning the transactions contemplated
under this Agreement shall be a joint press release in the form set
out in Schedule 4.10 and, thereafter, except as required by Law or
any applicable securities exchange regulations, the Parties shall, to
the extent practicable, consult with one another before issuing any
press release or otherwise making any public statements with respect
to this Agreement or any transactions contemplated hereunder and
shall otherwise not issue any such press release or make any such
public statement that is inconsistent with this Agreement or the
Tender Offer Document. Any press release or public statement shall be
released or made public in the US concurrently with its release or
other dissemination in Finland.
	 
	4.11	 	Deio Stock and Options
	 
	 	 	The Company shall use its commercially reasonable best efforts to
purchase all of the outstanding stock of Deio Corporation, a
subsidiary of the Company organized under the laws of Finland
(“Deio”), and all of the outstanding options to acquire stock of Deio
at fair value on or prior to the Closing Date.
	 
	4.12	 	Retention and Severance Plan
	 
	 	 	Prior to the Closing Date, the Company will adopt the Retention and
Severance Plan substantially in the form set forth in Schedule 4.12.
After the Closing Date, the Offeror shall cause the Company to comply
with the terms and conditions of the Retention and Severance Plan.

 

 

26

	4.13	 	[Intentionally Omitted]
	 
	4.14	 	Employee Benefit Matters
	 
	 	 	The Offeror agrees that, for a period of twenty-four (24) months
following the Closing Date, it shall, or shall cause the Company and
each of its Subsidiaries to, maintain employee benefit and
compensation plans, programs, and arrangements for the benefit of
their respective employees that, when taken as a whole, are at least
as favourable as those received by such employees as of 1 November
2002 and that have been disclosed to the Offeror prior to the date
hereof (except to the extent that such employee benefits are provided
in the ordinary course of business consistent with past practice, are
applicable to each relevant employee population and are not
financially material to the Company and its Subsidiaries). On and
after the Closing Date, the Offeror shall, or shall cause the Company
and each of its Subsidiaries to, with respect to each of their
respective employees, (i) honor all employment, change in control and
severance and retention agreements (except, in the case of such
agreements that are replaced by the Retention and Severance Plan
described in Schedule 4.12, only to the extent set forth in such
Schedule 4.12), arrangements, plans, programs or policies as they
existed on 1 November 2002 and that have been disclosed to the
Offeror prior to the date hereof (except to the extent that such
employee benefits are provided in the ordinary course of business
consistent with past practice, are applicable to each relevant
employee population and are not financially material to the Company
and its Subsidiaries) and (ii) assume or retain, as the case may be,
any and all liabilities under such agreements, arrangements, plans,
programs and policies.
	 
	4.15	 	Directors’ and Officers Indemnification and Insurance

	 	(a)	 	For a period of four years from the Closing Date, the
Offeror shall cause the Company and each of its Subsidiaries to
maintain and honor the provisions and practices with respect to
indemnification or the liability of

 

 

27

	 	 	 	directors consistent with the provisions and practices in effect on
1 November 2002, and such provisions and practices shall not be
amended, repealed or otherwise modified in any manner that would
affect adversely the rights thereunder of individuals who at the
Closing Date were directors, officers, employees, fiduciaries or
agents of the Company and such Subsidiaries, unless such
modification shall be required by applicable Law.
	 
	 	(b)	 	After the Closing Date, the Offeror shall, or shall cause
the Company and each of its Subsidiaries to, continue to indemnify
and hold harmless, consistent with the provisions and practices in
effect on 1 November 2002, each present and former member of the
board of directors, managing director or employee of the Company
and such Subsidiary (collectively, the “Indemnified Parties”)
against all costs and expenses (including attorneys’ fees),
judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any litigation, suit,
claim or proceeding (“Action”) (whether arising before or after the
Closing Date), whether civil, criminal, administrative or
investigative, arising out of or pertaining to any action or
omission in their capacity as a member of the board of directors, a
managing director or an employee (except for actions or omissions
arising out of such director’s or employee’s gross negligence or
willful misconduct), whether occurring before or after the Closing
Date, for a period of four years after the Closing Date. In the
event of any Action, (i) the Offeror shall, or shall cause the
Company or the relevant Subsidiary to, pay the reasonable fees and
expenses of counsel selected by the Indemnified Parties, which
counsel shall be reasonably satisfactory to the Offeror, promptly
after statements therefor are received and (ii) the Offeror shall,
or shall cause the Company or the relevant Subsidiary to cooperate
in the defence of any such matter; provided, however, that neither
the Company nor such Subsidiary shall be liable for any settlement
effected without its written consent (which consent shall not be
unreasonably withheld); and provided, further, that neither the
Company nor any of its Subsidiaries shall be obligated pursuant to
this Section 4.15(b) to pay the fees and expenses of more than one
counsel for all

 

 

28

	 	 	 	Indemnified Parties in any single Action except to the extent that
two or more of such Indemnified Parties shall have conflicting
interests in the outcome of such Action; and provided, further,
that, in the event that any claim for indemnification is asserted
or made within such four year period, all rights to indemnification
in respect of such claim shall continue until the disposition of
such claim.
	 
	 	(c)	 	The Offeror shall or shall cause the Company and each of its
Subsidiaries to maintain in effect for four years from the Closing
Date the members’ of the board of directors and managing director’s
current liability insurance policies maintained by the Company and
such Subsidiary (provided that the Offeror may substitute therefor
policies of at least the same coverage containing terms and
conditions that are not less favorable) with respect to matters
occurring prior to the Closing Date; provided, however, that in no
event shall the Company or any Subsidiary be required to expend
pursuant to this Section 4.15(c) more than an amount per year equal
to 200% of current annual premiums paid by the Company or such
Subsidiary for such insurance (which premiums the Company estimates
to be US $180,000 in the aggregate).
	 
	 	(d)	 	In the event that the Offeror or any of its successors or
assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any Person, then, and in each
such case, proper provision shall be made so that the successors and
assigns of the surviving corporation shall assume the obligations
set forth in this Section 4.15.

	4.16	 	Discharge from Liability

	 	(a)	 	As soon as practicable after the Closing Date the Company
shall convene an Extraordinary General Meeting of the Shareholders
of the Company (the “General Meeting”) to be held within 20 days
after the convocation for

 

 

29

	 	 	 	the purpose of confirming the continued term of office for the
members of the Board of Directors or electing new members to the
Board of Directors.
	 
	 	(b)	 	The Offeror shall at the next Annual General Meeting of the
Shareholders of the Company following the Closing Date, subject to
the recommendation by the auditors of the Company in their report,
vote in favor of discharge of liability for the members of the
Board of Directors and Managing Director of the Company as
constituted prior to the Closing Date (Finnish: myöntää
vastuuvapaus) with respect to their activities conducted during the
relevant period prior to such General Meeting in accordance with
the Articles of Association of the Company and the Finnish
Companies Act.

	4.17	 	Business Integration
	 
	 	 	Upon Closing, the Offeror shall implement the business integration
plan set forth in Schedule 4.17.
	 
	5.	 	TERMINATION, AMENDMENT AND WAIVER
	 
	5.1	 	Termination
	 
	 	 	This Agreement may be terminated with immediate effect at any
time prior to the Closing Date as follows; provided, however, that
the right to terminate under a specific subsection of this Section
5.1 shall not be available to any Party whose failure to fulfill
any obligation under this Agreement has given rise to such
termination right:

	 	(a)	 	by mutual written consent duly authorized by the Board of
Directors of each of the Offeror and the Company;
	 
	 	(b)	 	by either Party,

 

 

30

	 	(i)	 	if the Closing Date shall not have occurred
within twelve (12) months from the date of this Agreement
(the “End Date”), subject to extension in accordance with
Section 2.2(vi)(C);
	 
	 	(ii)	 	if (A) any order or Action preventing the
consummation of the Tender Offer or the implementation of
the other transactions contemplated by this Agreement shall
have been issued or taken by a court of competent
jurisdiction upon application by the United States
Department of Justice or the United States Federal Trade
Commission based on the antitrust Laws of the United States,
(B) any decision prohibiting the consummation of the Tender
Offer shall have been issued by the European Commission or
any other Merger Control Authority or (C) any other order or
Action preventing the consummation of the Tender Offer shall
have been issued or taken and, in the case of clauses (A),
(B) or (C) shall have become final and non-appealable;
	 

	 	(c)	 	by the Company, if
	 

	 	(i)	 	the Board of Directors of the Company determines
to withdraw or modify the Company Board Statement pursuant to
Section 4.9(iii); provided, that (x) there shall be no
Acquisition Proposal pending that has not been rejected by the
Board of Directors of the Company and (y) the Company shall
have given the Offeror five Business Days’ prior notice of its
intention to terminate this Agreement pursuant to this Section
5.1(c)(i) and shall have first consulted with the Offeror
(except where such consultation would be prohibited by Law);
	 
	 	(ii)	 	the Board of Directors of the Company receives a
Superior Proposal and determines in good faith after taking
advice from a reputable Finnish counsel that it is in the best
interests of the holders of the Company Shares and Company
Options for the Board to terminate this Agreement and accept
the Superior Proposal; provided, however, that

 

 

31

	 	 	 	the Company may only terminate the Agreement pursuant to this
Section 5.1(c)(ii) if it shall have complied with its
obligations pursuant to Section 4.9 and; provided, further, that
the Company shall have given the Offeror five Business Days’
prior notice of its intention to terminate this Agreement
pursuant to this Section 5.1(c)(ii);
	 
	 	(iii)	 	at any time after 180 days following receipt of
the notification by the European Commission in accordance with
article 10.1 of the Merger Regulation,, if the Board of
Directors of the Company shall have determined in good faith
after consultation with counsel (A) that the Competition
Clearances referred to Section 2.2(iii) are not likely to be
obtained prior to the End Date and (B) the Company’s operations
or financial condition would be materially harmed if the
Agreement remains in effect; provided that, in making the
determination that any Competition Clearance referred to in
Section 2.2(iii)(D) is not likely to be obtained prior to the
End Date, the Company must determine in good faith that the
Offeror shall have not put forward a reasonable proposal to
address any objections or eliminate any impediments raised by
such Merger Control Authority in connection with such
Competition Clearance; or
	 
	 	(iv)	 	the Tender Offer shall not have been commenced by
the Offeror within 45 days following the date of Agreement;
	 

	 	(d)	 	by the Offeror, if the Board of Directors shall have
modified or withdrawn the Company Board Statement.

	5.2	 	Effect of Termination

	 	(a)	 	If this Agreement is terminated pursuant to Section 5.1,
this Agreement shall forthwith become void and there shall be no
liability for either Party or any of their officers and directors
under this Agreement, except as set forth in Section 5.2(b) or
5.2(c) hereof, and all rights and obligations of either Party
hereto shall cease, provided, however, that

 

 

32

	 	 	 	except as otherwise provided herein, nothing herein shall
relieve either Party from liability for the willful breach of
this Agreement. Upon termination of this Agreement, the Offeror
shall terminate the Tender Offer and return the Company Shares
and Company Options tendered and not withdrawn prior to such
termination; provided, that the Offeror shall not thereafter be
precluded from commencing a tender offer for all of the issued
and outstanding Company Shares and Company Options; and provided
further, that the Trading Prohibition as defined in Section 13
of the Confidentiality Agreement shall not apply to any
acquisition of Company Shares or Company Options by the Offeror
in furtherance of such tender offer.
	 
	 	(b)	 	If this Agreement is terminated pursuant to Section
5.1(c)(i), (ii) or (iii) or 5.1(d), the Company shall reimburse the
Offeror for all of its Expenses and, in addition, if terminated (i)
pursuant to 5.1(c)(ii) or 5.1(d), in the case of 5.1(d) if the
Company shall have modified or withdrawn the Company Board
Statement in connection with an Acquisition Proposal that is
pending and has not been rejected by the Board of Directors of the
Company, shall pay to the Offeror in immediately available funds a
termination fee in the amount of EUR 20 million or (ii) pursuant to
5.1(c)(iii), pay to Offeror in immediately available funds a
termination fee equal to EUR 10 million.
	 
	 	(c)	 	If this Agreement is terminated by the Company or the
Offeror pursuant to Sections 5.1(b)(i), 5.1(b)(ii)(A) or
5.1(b)(ii)(B) and the Parties shall not have obtained the
Competition Clearances prior to the date of such termination, the
Offeror shall reimburse the Company for all of its Expenses and pay
to the Company in immediately available funds a termination fee in
the amount of EUR 70 million and the Company shall be entitled to
the contingent payments in accordance with the terms described in
Schedule 5.2(c). Notwithstanding anything contained in this
Agreement to the contrary, this Section 5.2(c) shall be the
Company’s sole and exclusive remedy, and represents liquidated
damages, for the failure to obtain the Competition Clearances,
including

 

 

33

	 	 	 	any claims of the Company arising out of a purported breach by the Offeror of
Sections 4.1 or 4.2 of this Agreement.

	5.3	 	Amendment
	 
	 	 	This Agreement may not be amended except by an
instrument in writing signed by both Parties.
	 
	6.	 	GENERAL PROVISIONS
	 
	6.1	 	Survival of Representations and Warranties
	 
	 	 	The representations, and warranties, shall terminate at the Closing
Date or upon the termination of this Agreement pursuant to Section
5.1, as the case may be.
	 
	6.2	 	Notices
	 
	 	 	All notices, requests, claims, demands and other communications
hereunder shall be in the English language, in writing and shall be
given by delivery in Person, by telecopy, or by commercial delivery
service to the respective Parties at the following addresses (or at such
other address for a Party as shall be specified in a notice given in
accordance with this Section 6.2):
	 
	 	 	if to the Company:

	 
	Instrumentarium Corporation
	Kuortaneenkatu 2, Helsinki
	P.O. Box 100
	FIN-00031 Instrumentarium
	Attention: General Counsel
	Telecopy: +358 9 146 4172

	 	 	with a copy to:

	 
	Merilampi Marttila Laitasalo, Law Offices
	Eteläesplanadi 22 A, FIN-00130
	Helsinki, Finland
	Telecopy: +358 9 6864 8484

 

 

34

	 	 	 
	Attention:  Matti Ylä-Mononen	 	

	 	 	and

	 
	Shearman & Sterling
	Broadgate West
	9 Appold Street
	London EC2A 2AP
	Telecopy: +44 207 655 5500
	Attention: Bonnie Greaves

	 	 	if to the Offeror:

	 
	GE Medical Systems
	3000 North Grandview Blvd
	Waukesha, WI 53211
	Telecopy: +1 262 544 3186
	Attention: General Counsel

	 	 	with a copy to:

	 
	General Electric Company
	3135 Easton Turnpike
	Fairfield, CT 06431
	Telecopy: +1 203 373 3008
	Attention: Senior Transactions Counsel

	 
	Roschier Holmberg, Attorneys Ltd.
	Keskuskatu 7A, FIN-00100
	Helsinki, Finland
	Telecopy: +358 20 506 6160
	Attention: Tomas Lindholm

	 	 	and

	Gibson, Dunn & Crutcher LLP
	200 Park Avenue
	New York, NY 10166
	Telecopy: +1 212 351 4035
	Attention: Steven R. Shoemate

	 	 	or at such other address as the respective Party may hereafter specify
in writing to the other Party.

 

 

35

	6.3	 	Assignment; Binding Effect; Benefit
	 
	 	 	Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either Party (whether by
operation of law or otherwise) without the prior written consent of
the other Party, except that the Offeror may assign this Agreement to
any wholly owned Subsidiary of the Offeror, provided that no such
assignment shall relieve the Offeror of its obligations hereunder.
Subject to the preceding sentence, this Agreement shall be binding
upon and shall inure to the benefit of the Parties and their
respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this
Agreement, expressed or implied, is intended to confer on any person
other than the Parties or their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
	 
	6.4	 	Expenses
	 
	 	 	Without prejudice to the provisions contained in Sections 5.2(b) and
5.2(c) all expenses incurred in connection with this Agreement and
the transactions contemplated hereunder shall be paid by the Party
incurring such expenses, whether or not the Tender Offer and the
other transactions contemplated by this Agreement are consummated.
	 
	6.5	 	No Waiver
	 
	 	 	Failure by either Party at any time or times to require performance
of any provisions of this Agreement shall in no manner affect its
right to enforce the same, and the waiver by a Party of any breach of
any provision of this Agreement shall not be construed to be a waiver
by such Party of any succeeding breach of such provision or waiver by
such Party of any breach of any other provision hereof. Any waiver
shall be valid if in writing and signed by the Party or Parties to be
bound thereby.

 

 

36

	6.6	 	Provisions Severable
	 
	 	 	If any part of this Agreement is held to be invalid or unenforceable
such determination shall not invalidate any other provision of this
Agreement. The Parties shall, however, attempt, through negotiations
in good faith, to replace any part of this Agreement so held to be
invalid or unenforceable.
	 
	6.7	 	Headings
	 
	 	 	The headings and the table of contents of this Agreement are for
convenience of reference only and shall not in any way limit or
affect the meaning or interpretation of the provisions of this
Agreement.
	 
	6.8	 	Governing Law and Arbitration
	 
	 	 	This Agreement shall be governed by and construed in accordance with
the laws of Finland. Any dispute, controversy or claim arising out of
or relating to this Agreement or the breach, termination or validity
thereof shall be finally settled by arbitration in accordance with
the Rules of Arbitration of the International Chamber of Commerce by
three arbitrators appointed in accordance with such rules. The
arbitration shall be held in Stockholm, Sweden and the arbitration
proceedings shall be conducted in the English language.
	 
	6.9	 	Entire Agreement
	 
	 	 	This Agreement (including the Exhibits, Schedules, Attachment and the
Disclosure Letter), the Confidentiality Agreement and the Joint
Defense Agreement, constitute the entire agreement among the Parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings among the Parties with respect thereto.
No addition to or modification of any provision of this Agreement
shall be binding upon a Party unless made in writing and signed by
both Parties.

 

 

37

	6.10	 	Payments
	 
	 	 	All payments required to be made by one Party to the other Party
pursuant to this Agreement shall be made promptly by wire transfer in
immediately available funds in the currency specified in this Agreement
to an account designated by the receiving Party.
	 
	6.11	 	Counterparts of the Agreement
	 
	 	 	This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, each of which when
executed shall be deemed to be an original.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
Helsinki on the date first written above by their respective officers thereunto
duly authorized.

	 	 	 
	GENERAL ELECTRIC COMPANY	 	
INSTRUMENTARIUM CORPORATIONEXHIBIT 10a

 

Exhibit 10 (a)

Consent of KPMG Accountants N.V.

To the Supervisory Board and Board of Management of Koninklijke Philips Electronics N.V.

We consent to incorporation by reference in the registration statements on Form S-8 (No. 33-65972,
No. 33-80027, No. 333-91287, No. 333-70215, No. 333-91289, No. 333-39204, No. 333-75542, No.
333-87852 and No. 333-104104) and in the registration statement on Form F-3 (No. 333-4582 and No.
333-90686) of Koninklijke Philips Electronics N.V. of our report dated February 7, 2003, relating to
the consolidated balance sheets of Koninklijke Philips Electronics N.V. and subsidiaries as of
December 31, 2002 and 2001, and the related consolidated statements of income, changes in
stockholders’ equity and cash flows for each of the years in the three-year period ended December 31,
2002, included in the December 31, 2002 annual report on Form 20-F of Koninklijke Philips Electronics
N.V.

	 	 	 
	Eindhoven, The Netherlands	 	 
	 	 	 
	June 30, 2003	 	
/s/ KPMG Accountants N.V.

KPMG ACCOUNTANTS N.V.

8

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