EXHIBIT 10.7
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LIQUIDITY AND REGISTRATION RIGHTS AGREEMENT
This LIQUIDITY AND REGISTRATION RIGHTS AGREEMENT (this
"Agreement"") is made as of _______________, by and among EIMO OYJ, a
company organized under the laws of the Republic of Finland (the
"Company"), and A. XXXXXXXXX XXXXXXX, XXXXXX X. XXXXXXX, and XXXXXX X.
XXXXXXXXX, XX. (individually, a "U.S. Holder" and collectively, the
"U.S. Holders") and XXXX XXXXXXXX, XXXXX XXXXXXXX, TOPI XXXXXXXX, and
XXXXXXXX JUKKO (individually, a "Finland Holder" and collectively, the
"Finland Holders").
RECITALS
A. TRIPLE S PLASTICS, INC., a Michigan corporation (the
"Target"), the Company, and Spartan Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of the Company (the "Merger
Sub"), are parties to a certain Amended and Restated Agreement and
Plan of Merger dated as of May 25, 2001 (the "Merger Agreement")
pursuant to which the Company will acquire all of the issued and
outstanding shares of capital stock of the Target through the merger
of the Merger Sub with and into the Target (the "Merger").
B. U.S. Holders hold an equity interest in Target which will be
converted, pursuant to the Merger Agreement, into the right to receive
an equity interest in the Company.
C. It is a condition of the Merger Agreement that the parties
to this Agreement (the U.S. Holders, the Finland Holders and the
Company) shall have executed and delivered this Agreement prior to the
Effective Time as defined in the Merger Agreement.
D. The Company expects to receive substantial benefits as a
result of the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
obligations and covenants hereinafter set forth, the parties hereto
agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the
following respective meanings:
"Affiliate" shall mean, with respect to any person or entity, any
person or entity which directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control
with such person or entity.
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"American Depository Shares" shall mean the American Depository
Shares (which, pursuant to and as further described in SECTION 2.1(C)
of the Merger Agreement, may be evidenced by one or more American
Depository Receipts) representing the right to receive Ordinary Shares
which shall be delivered to U.S. Holders as Merger Consideration
pursuant to SECTION 2.1(c) of the Merger Agreement.
"Commission" shall mean the United States Securities and Exchange
Commission or any other United States agency at the time administering
the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar United States rule or statute and the rules
and regulations of the Commission thereunder, all as the same shall be
in effect at the time.
"Finland Holders" has the meaning set forth in the first
paragraph of this Agreement.
"Initial Shares" means the American Depositary Shares issued
pursuant to the Merger or any Ordinary Shares issued in exchange
therefor, or any American Depositary Receipts or ordinary shares
issuable to a U.S. Holder pursuant to options outstanding as of the
Effective Time.
"Ordinary Shares" shall mean the ordinary Series A shares of the
Company.
"Person" shall mean an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency
thereof.
"Priority Shares" shall mean Registrable Securities senior in
priority of registration rights to the Registrable Shares. The
Registrable Shares shall not constitute Priority Shares.
"Recitals" shall mean the recitals to this Agreement which
constitute integral terms hereof.
"Registrable Securities" shall mean (a) the Registrable Shares
and (b) any other shares of the capital stock of the Company having
registration rights; PROVIDED, HOWEVER, that such securities shall
only be treated as Registrable Securities if and so long as (i) they
have not been registered or sold to or through a broker or dealer or
underwriter in a public distribution or a public securities
transaction, (ii) they have not been sold pursuant to Rule 144 and
(iii) the registration rights with respect to such shares have not
otherwise terminated.
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"Registrable Shares" shall mean the Initial Shares; PROVIDED,
HOWEVER, that the Initial Shares shall only constitute Registrable
Shares if and so long as (i) they have not been registered or sold
through a broker or dealer or underwriter in a public distribution or
a public securities transaction, (ii) they have not been sold pursuant
to Rule 144 or Rule 145, and (iii) the registration rights with
respect to such shares have not otherwise terminated.
The terms "register", "registered" and "registration" shall refer
to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration
or ordering of the effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, except as
otherwise stated below, incurred in complying with SECTION 2.1,
including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursements of
counsel for the Company, blue sky fees and expenses, and expense of
any special audits incident to or required by any such registration,
compensation of regular employees of the Company and expenses of all
marketing and promotional efforts reasonably requested by the managing
Underwriter relating to all securities being offered in an offering
and which are customarily paid by issuers or sellers of securities and
such other fees and disbursements of Underwriters customarily paid by
issuers or sellers of securities (but not the fees and disbursements
of Underwriters' counsel); PROVIDED, HOWEVER, that U.S. Holders shall
bear all fees and expenses of their own counsel, underwriting
discounts and commissions, brokerage fees or commissions and transfer
taxes, in each case, if any, relating to the sale of Registrable
Shares.
"Registration Rights Period" shall mean, as to each U.S. Holder,
the period beginning on the effective date of the Merger and ending on
the earlier to occur of:
(i) (a) in the event the applicable U.S. Holder is not an
Affiliate of the Company, on the first date on
which the American Depository Shares held by such
U.S. Holder cease to constitute Registrable
Securities; PROVIDED, HOWEVER, that,
notwithstanding anything contained herein to the
contrary, the Registration Rights Period shall end
no later than the earlier of:
(A) the date which is four (4) years after the
date of this Agreement;
(B) the first date on which all the Registrable
Shares then held by U.S. Holders may be
publicly sold (x) in a single transaction
within the volume limitations in Rule
144(e)(1) (regardless whether such sale is
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required to be effected within such limits),
(y) in a series of transactions over any six
(6) consecutive months, or (z) the U.S.
Holders hold less than five percent (5%) of
the outstanding shares of the Company; or
(b) in the event the applicable U.S. Holder is an
Affiliate of the Company, on the LATER of (i)
ninety (90) days after such U.S. Holder ceases to
be an Affiliate of the Company, and (ii) the first
date upon which the U.S. Holders would not be
deemed an underwriter under Section 2(11) of the
Securities Act with respect to the sale of the
Registrable Shares;
(ii) the date upon which the Company has either caused all
Registrable Shares to be eligible to be registered
pursuant to SECTION 2 of this Agreement (and, in fact,
all Registrable Shares so registered have been sold) or
has caused not less than eighty percent (80%) of the
aggregate Registrable Shares to be eligible to be
registered pursuant to SECTION 2 of this Agreement
(and, in fact, all Registrable Shares so registered
have been sold) on two separate occasions and pursuant
to two separate registration statements; and
(iii) all of the Registrable Shares shall be eligible for
sale pursuant to SECTION 9 or SECTION 10 and the
Registrable Shares sought to be sold, in fact, have
been sold under such applicable provision.
"Rule 144" shall mean Rule 144 promulgated under the Securities
Act.
"Rule 145" shall mean Rule 145 promulgated under the Securities
Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar United States rule or statute and the rules
and regulations of the Commission thereunder, all as the same shall be
in effect at the time.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal in an underwritten offering and
not as part of such dealer's market-making activities.
"U.S. Holders" has the meaning set forth in the first paragraph
of this Agreement.
SECTION 2. PIGGYBACK/INCIDENTAL REGISTRATION.
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2.1 NOTICE OF REGISTRATION. If at any time or from time to time
during the Registration Rights Period the Company shall determine to
register in the United States any of its equity securities, either for
its own account or the account of stockholders of the Company, other
than (a) registration relating solely to employee benefit plans
registered on Form S-8 or any successor form thereto (but only so long
as securities issuable upon the exercise of transferable options may
not be and are not being registered thereunder), (b) a registration
relating solely to a transaction meeting the requirements of Rule 145
under the Securities Act, (c) a registration in which the only equity
securities being registered are Ordinary Shares issuable upon
conversion of convertible debt securities which are also being
registered, or (d) constituting a registered exchange offer or shelf
registration entered into pursuant to or in connection with an
offering pursuant to Rule 144A under the Securities Act, the Company
will give written notice (the "Company Notice"), at its expense, to
U.S. Holders of its intention to do so at least fifteen (15) days
prior to the filing of a registration statement with respect to such
registration with the Commission. If a U.S. Holder desires to dispose
of all or part of U.S. Holders's Registrable Shares, such U.S. Holder
may request registration thereof in connection with Company's
registration by delivering to the Company, within ten (10) days after
receipt of the Company Notice, written notice of such request (the
"U.S. Holders Notice") stating the number of shares of Registrable
Shares to be disposed of and the intended method of disposition of
such shares by such U.S. Holder. The Company shall use its reasonable
best efforts to cause all of the Registrable Shares specified in the
U.S. Holders Notice to be registered under the Securities Act pursuant
to the registration statement referred to in the Company Notice (and
any related qualification under blue sky laws) so as to permit the
sale or other disposition (in accordance with the intended methods
thereof as aforesaid) by the U.S. Holder of the Registrable Shares so
registered, subject, however, to the limitations set forth in SECTION
2.2; and, PROVIDED, HOWEVER, that the Company shall not be required to
grant any concession or additional rights or other consideration to
any other Person to secure the right of any U.S. Holder to participate
in such registration.
2.2 LIMITATIONS ON PIGGYBACK/INCIDENTAL REGISTRATION. (a) If
the registration of which the Company gives notice pursuant to Section
2.1 above is for the purpose of permitting the disposition of
securities by the Company or any other Person pursuant to a firm
commitment underwritten offering, the Company shall so advise the U.S.
Holders as a part of the Company Notice given pursuant to SECTION 2.1.
In such event, the right of the U.S. Holders to registration pursuant
to SECTION 2.1 shall be conditioned upon the applicable U.S. Holder's
participation in such underwriting (if any), and the inclusion of
Registrable Shares in the offering and/or underwriting shall be
limited to the extent provided herein. U.S. Holders shall sell the
Registrable Shares included in such offering to or through the
Underwriter(s) (if any) of the securities being registered for the
account of the Company (or otherwise selected by the Company, in its
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sole discretion, to manage such underwriting) upon terms generally
comparable to the terms applicable to the Company (except that the
Company shall bear all Registration Expenses to the extent provided in
SECTION 4).
(b) If requested in writing to do so in good faith by the
managing Underwriter of an underwritten offering, the Company shall
have the right to limit the aggregate size of the offering or decrease
the number of Registrable Shares to be included therein by U.S.
Holders to the extent necessary to reduce the number of securities to
be included in the registration to the level recommended by the
managing Underwriter, and only securities which are to be included in
the underwriting may be included in the registration. U.S. Holders
selling Registrable Shares in the underwritten offering shall
(together with the Company and other holders of the Registrable
Securities distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the
managing Underwriter selected for such underwriting by the Company.
(c) Notwithstanding any other provision of this SECTION
2.2, if the managing Underwriter (or, if there is no managing
Underwriter, then the Company) determines that marketing factors or
its contractual obligations with respect to Priority Shares require a
limitation of the number of securities to be underwritten or offered,
then the Company shall so advise all holders of Registrable Securities
requesting to be included in the registration and underwriting, and
the number of shares of Registrable Securities that may be included in
the registration and underwriting shall be allocated among all holders
of Registrable Securities requesting to be included in the
registration and underwriting as follows:
a. Whenever the number of shares which may be
registered pursuant to SECTION 2.1 is limited by the provisions of
SECTION 2.2, the U.S. Holders shall have priority as to sales over the
other holders of the Company's securities without registration rights,
and the Company shall cause such other holders to withdraw from such
offering to the extent necessary to allow the U.S. Holders to include
all of the shares so requested to be included within such
registration.
b. Whenever the number of shares which may be
registered pursuant to SECTION 2.1 is still limited by the provisions
of this SECTION 2.2, after the withdrawal of the other holders of the
Company's securities, the Company, together with the holders of
Priority Shares that have the right to participate in the firm
commitment underwritten offering pursuant to registration rights
granted by the Company (but only to the extent required by the terms
of any grants of such registration rights), shall have priority as to
participation in such registration over U.S. Holders. In furtherance
thereof, each U.S. Holder further agrees that he shall withdraw his
Registrable Shares from such registration to the extent necessary to
allow the Company to include (A) seventy percent (70%) of the
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securities which the Company desires to sell for its own account, and
(B) all shares of Registrable Securities which are required to be
included in such registration pursuant to the exercise of any demand
registration rights which entitle the holder thereof to include
Registrable Securities in such registration.
c. The U.S. Holders, along with the holders of
Registrable Securities that have the right to participate in the firm
commitment underwritten offering pursuant to incidental registration
rights granted by the Company after the date of this Agreement, shall,
unless such incidental registration rights provide to the contrary,
share in the available amount of securities which may be included in
the registration in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by them at the time
of filing the registration statement from and to the extent the
Company may reasonably bind such other holders to do so, except that
Registrable Securities (other than Priority Shares), shall be excluded
in proportion, as nearly as practicable, to the respective amounts of
such securities held by the holders thereof at the time of filing the
registration statement before any Priority Shares requested to be
included in the registration and underwriting are excluded.
d. In making the determinations contemplated by
SECTION 2.1, a managing Underwriter or the Company may consider
whether the inclusion of any securities will affect the number of
securities that can be sold in an orderly fashion within a price range
acceptable to the Company (or, if the Company is not selling any
securities in such registration, to the prospective selling holders)
and the Company shall not be required to grant any concession or
additional rights or pay any additional consideration to any holder of
Registrable Securities to secure the right of U.S. Holders to
participate in any registration.
e. If (A) as a result of the proration provisions of
this SECTION 2.2, a U.S. Holder is not entitled to include all such
Registrable Shares which such U.S. Holder requested to include in such
registration, or (B) the terms of the proposed compensation to the
Underwriters change in a manner materially adverse to the U.S. Holders
from those described in the Company Notice, any U.S. Holders may by
notice in writing elect to withdraw his request to include any
Registrable Shares in such registration (a "Withdrawal Election");
PROVIDED, HOWEVER, that a Withdrawal Election shall be irrevocable and
such U.S. Holder shall no longer have any right to include any
Registrable Shares in the registration as to which such Withdrawal
Election was made. U.S. Holders shall give any Withdrawal Election as
promptly as possible and, in no event, later than five (5) business
days after notice of the terms of the proposed underwriting.
f. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the Underwriters
may round the number of shares allocated to any holder of Registrable
Securities to the nearest 100 shares.
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g. The Company shall use its reasonable best efforts
to provide that the number of shares of Registrable Securities
required to satisfy any Underwriters' over-allotment option shall be
allocated pro rata among the Company and all holders of securities to
be included in the offering on the basis of the relative number of
securities otherwise to be included by each of them in the
registration provided that the Company shall not be required to grant
any concession or additional rights or pay any additional
consideration to any holder of Registrable Securities to secure such
allocation.
2.3 DESIGNATION OF UNDERWRITER. In the case of any registration
which is proposed to be effected as to which SECTION 2.1 is
applicable, the Company shall have the sole and exclusive right to
designate the Underwriter(s) therefor (if any), and U.S. Holders shall
sell Registrable Shares only pursuant to such underwriting (if any).
2.4 RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it or
pursuant to the demand registration rights of any Person, which
registration gives rise to rights of U.S. Holders under SECTION 2.1,
prior to the effectiveness of such registration whether or not any
U.S. Holder has elected to include any Registrable Shares in such
registration.
SECTION 3. LOCK-UP AGREEMENT.
Each U.S. Holder agrees that, if requested in writing by the
Company or by the managing Underwriter of any offering effected
pursuant to this Agreement, and if such U.S. Holder is at such time an
officer or director of the Company, or an Affiliate thereof, or owns
of record more than one percent (1%) of the Ordinary Shares then
outstanding (including for purpose of such calculation all Ordinary
Shares such U.S. Holder has the right to acquire and all Ordinary
Shares represented by American Depositary Shares), each U.S. Holder
shall not sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of or transfer his economic risk
with respect to any securities of the Company (other than those
included in the registration) within seven (7) days before or one
hundred eighty (180) days after the effective date of a registration
statement filed pursuant to this Agreement, unless such limitations
are waived in writing by the Company and the managing Underwriter.
Each U.S. Holder agrees that the Company may instruct its transfer
agent to place stop transfer notations in its records to enforce the
provisions of this SECTION 3.
SECTION 4. EXPENSES OF REGISTRATION.
The Company shall bear all Registration Expenses incurred in
connection with all registrations undertaken pursuant to SECTION 2,
subject to the limitations set forth in the definition of Registration
Expenses. NOTWITHSTANDING THE FOREGOING, THE COMPANY SHALL NOT BE
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REQUIRED TO PAY FOR ANY REGISTRATION EXPENSES OF ANY REGISTRATION
PROCEEDING BEGUN UNDER SECTION 2, THE REQUEST FOR WHICH HAS BEEN
SUBSEQUENTLY WITHDRAWN BY A U.S. HOLDER OTHER THAN PURSUANT TO SECTION
2.2(A)(V) OR IS OTHERWISE NOT SUCCESSFULLY COMPLETED DUE TO NO FAULT
OF THE COMPANY, UNLESS THE WITHDRAWAL IS BASED UPON MATERIAL ADVERSE
INFORMATION CONCERNING THE COMPANY, WHICH THE COMPANY HAD NOT YET
PUBLICLY DISCLOSED AT THE TIME OF SUCH REQUEST.
SECTION 5. REGISTRATION PROCEDURES.
5.1 OBLIGATIONS OF THE COMPANY. In the case of each
registration of any Registrable Shares effected by the Company
pursuant to this Agreement, the Company will keep U.S. Holders advised
in writing as to the initiation of such registration and as to the
completion thereof. The Company will:
(a) Prepare and file with the Commission a registration
statement and such amendments and supplements as may be necessary and
use its reasonable best efforts to cause such registration statement
to become and remain effective for at least ninety (90) days or until
the distribution described in the registration statement has been
completed, whichever first occurs;
(b) Furnish to U.S. Holders and to the Underwriters of the
securities being registered such reasonable number of copies of the
registration statement, preliminary prospectus, final prospectus and
such other documents as such Underwriters may reasonably request in
order to facilitate the public offering of such securities;
(c) Use its reasonable best efforts to register or qualify
the securities covered by such registration statement under such other
securities or state blue sky laws of such U.S. jurisdictions as the
Underwriters or U.S. Holders shall reasonably request, and to do any
and all other acts and things which may be necessary under such
securities or blue sky laws to enable U.S. Holders to consummate the
public sale or other disposition in such jurisdictions of the
securities owned by U.S. Holders; provided that the Company shall not
be required in connection therewith or as an election thereto to
qualify to do business or to file a general consent to service of
process in any such jurisdiction or to take any action which could
subject it to tax, including tax on its corporate income or assets, or
to the service of process (other than in connection with such
registration) in any state where it is not subject thereto; and
(d) Use its reasonable best efforts to cause all such
Registrable Shares registered pursuant hereto to be listed on the
principal securities exchange or automated quotation system on which
similar securities issued by the Company are then listed, if the
listing of such securities is then permitted under the rules of such
exchange, or trading market or quotation system on which such
securities issued by the Company are then listed.
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5.2 OBLIGATIONS OF U.S. HOLDERS. (a) As a condition to
including any Registrable Shares in a registration, the Company may
require (i) that the applicable U.S. Holder furnish to the Company
such information regarding such U.S. Holder and the contemplated
distribution of such U.S. Holder's Registrable Shares as is required
to be included in the Registration Statement, and (ii) that such
information be furnished to the Company in writing and signed by the
U.S. Holder and stated to be specifically for use in the related
registration statement, prospectus, offering circular or other
document incident thereto.
(b) U.S. Holders shall not (until further notice) effect
sales of Registrable Shares after receipt of written notice from the
Company to suspend sales to permit the Company to correct or update a
registration statement or prospectus, and the Company shall make such
amendment in a reasonably commercial manner; provided, that the
Company is able to do so in compliance with applicable securities
laws. The period during which the registration statement remains
effective pursuant to the Agreement shall be extended for a period of
time equal to the period for which U.S. Holders refrained from selling
pursuant to this SECTION 5.2(B).
SECTION 6. INDEMNIFICATION.
6.1 SCOPE OF INDEMNIFICATION. The Company will indemnify U.S.
Holders against all claims, losses, damages or liabilities (or actions
in respect thereof), to which U.S. Holders may be subject under the
Securities Act or under any other statute or at common law, insofar as
such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement (or alleged untrue statement) of any
material fact contained, on the effective date thereof, in a
registration statement under which Registrable Shares were registered
under the Securities Act pursuant to this Agreement, any preliminary
prospectus or final prospectus contained therein, or any summary
prospectus issued in connection therewith, or any amendment or
supplement thereto, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; PROVIDED, HOWEVER, that
the Company shall not be liable to U.S. Holders in any such case to
the extent that any such loss, claim, damage or liability arises out
of or is based upon any such untrue statement or omission made in such
Registration Statement, preliminary prospectus, summary prospectus,
prospectus, or amendment or supplement thereto, or any other document,
in reliance upon and in conformity with written information furnished
to the Company by any U.S. Holder specifically for use therein. The
indemnity provided for herein shall remain in full force and effect
regardless of any investigation made by or on behalf U.S. Holders or
any underwriter or other selling agent and shall survive the transfer
of the Registrable Shares by U.S. Holders.
6.2 REQUIREMENTS; INVESTIGATION NO BAR. The Company may
require, as a specific condition to including any Registrable Shares
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in any registration statement filed pursuant to SECTION 2.1, that each
participating U.S. Holder shall enter into and deliver to the Company
an undertaking satisfactory to it to indemnify and hold harmless (in
the same manner and to the same extent as set forth in SECTION 6) the
Company, each director of the Company, each officer of the Company who
shall sign such Registration Statement and each other Person, if any,
who controls the Company within the meaning of the Securities Act
(except the indemnifying holder, if such indemnifying holder so
controls the Company), and each Person participating in the offering
with respect to any untrue statement of material fact or omission of
material fact from such Registration Statement, any preliminary
prospectus or final prospectus contained therein, any summary
prospectus issued in connection with any Registrable Securities being
registered or offered for sale, or any amendment or supplement
thereto, in each case if such statement or omission was made in
reliance on and in conformity with written information furnished to
the Company by U.S. Holders specifically for use in preparing any such
Registration Statement, preliminary prospectus, final prospectus,
summary prospectus or amendment or supplement thereto. U.S. Holders
shall promptly provide such undertaking to indemnify in accordance
with this SECTION 6.2 upon request. In the event the undertaking to
indemnify under this SECTION 6.2 is given by U.S. Holders, it shall
remain in full force and effect regardless of any investigation made
by or on behalf of the indemnified party and shall survive any
transfer of the Registrable Shares held by the indemnifying party.
6.3 CONTRIBUTION. If the indemnification provided for in
SECTION 6.1 or SECTION 6.2 is unavailable or insufficient to hold
harmless an indemnified party under this SECTION 6, then each
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of the claims, losses, damages or liabilities (or
actions in respect thereof) referred to in SECTION 6.1 or SECTION 6.2:
(a) in such proportion as is appropriate to reflect the relative
benefits received by each indemnifying party from the offering of the
securities or (b) if the allocation provided by clause (a) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (a)
above but also the relative fault of each indemnifying party in
connection with the statements or omissions that resulted in such
claims, losses, damages or liabilities (or actions in respect thereof)
as well as any other relevant equitable considerations. Relative
fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by each indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue
statement or omission. The parties agree that it would not be just
and equitable if contributions pursuant to this SECTION 6.3 were to be
determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred
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to in the first sentence of this SECTION 6.3. The amount paid by an
indemnified party as a result of the claims, losses, damages or
liabilities (or actions in respect thereof) referred to in the first
sentence of this SECTION 6.3 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the
subject of this SECTION 6.3. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Company may
require, as a specific condition to including any Registrable Shares
in any registration statement filed pursuant to SECTION 2 that
participating U.S. Holders shall enter into and deliver to the Company
an undertaking reasonably satisfactory to it to contribute to the
amount paid or payable by an indemnified party hereunder as and to the
extent set forth in this SECTION 6.3, and participating U.S. Holders
shall promptly provide such undertaking upon request.
6.4 CLAIMS PROCEDURES. Each party entitled to indemnification
or contribution under this SECTION 6 (the "Indemnified Party") shall
give notice to the party required to provide indemnification or
contribution (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which
indemnity or contribution may be sought, provided that the failure of
any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement
unless the failure to give such notice is materially prejudicial to an
Indemnifying Party's ability to defend such action, and shall permit
the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified Party may
participate in such defense at such party's expense, and provided
further, that if the defendants in any such action include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party
shall have reasonably concluded that there may be legal defenses
available to it and/or other Indemnified Parties which are materially
different from or additional to those available to the Indemnifying
Party, the Indemnified Party or Parties shall have the right to select
separate counsel to assert such legal defenses (in which case the
Indemnifying Party shall not have the right to direct the defense of
such action on behalf of the Indemnified Party or parties). Upon the
permitted assumption by the Indemnifying Party of the defense of such
action, and approval by the Indemnified Party of counsel, the
Indemnifying Party shall not be liable to such Indemnified Party under
this SECTION 6.4 for any legal or other expenses subsequently incurred
by such Indemnified Party in connection with the defense thereof
(other than reasonable costs of investigation) unless (a) the
Indemnified Party shall have employed separate counsel in connection
with the assertion of legal defenses in accordance with the proviso to
12
the next preceding sentence, (b) the Indemnifying Party shall not have
employed counsel satisfactory to the indemnified party to represent
the Indemnified Party within a reasonable time, or (c) the
Indemnifying Party has authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No
Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party (whose
consent shall not be unreasonably withheld),consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party of a release from all liability in respect to
such claim or litigation.
SECTION 7. INFORMATION TO BE FURNISHED BY U.S. HOLDERS.
If a U.S. Holder has Registrable Shares included in any
registration, such U.S. Holder shall furnish to the Company such
information regarding such U.S. Holder, the Registrable Shares held by
U.S. Holders and the distribution proposed by such U.S. Holder as the
Company may reasonably request in writing and as shall be required in
connection with any registration referred to in this Agreement.
SECTION 8. RULE 144 REPORTING.
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of
the Registrable Shares to the public without registration, so long as
the Company is a reporting company under the Exchange Act, the Company
agrees to furnish to U.S. Holders, upon request, a written statement
executed by the Company as to the steps it has taken to comply with
the current public information requirements of Rule 144.
SECTION 9. CO-SALE RIGHTS WITH FINLAND HOLDERS.
9.1 CO-SALE SECURITIES DEFINED. For purposes of SECTION 9,
unless the context indicates otherwise, "Co-Sale Securities" shall
mean (i) as to U.S. Holders, the Initial Shares, and (ii) as to the
Finland Holders, all Ordinary Shares of the Company held immediately
after the Effective Time by the Finland Holders.
9.2 CO-SALE PROCEDURES. Should any Finland Holder receive a
bona fide offer from any Person to purchase any of the Co-Sale
Securities owned by Finland Holders, or should any Finland Holder make
an offer to any Person to sell Co-Sale Securities, whether in a
private transaction or pursuant to an underwritten transaction (other
than a registered underwritten transaction in the United States to
which SECTION 2 shall instead apply) (for the avoidance of doubt, it
being expressly understood that any sales permitted hereunder pursuant
to SECTION 9.5 by Finland Holders pursuant to Rule 144(e) in the
United States or on the Helsinki Stock Exchange shall not be subject
to the provisions and limitations of this SECTION 9), then the
applicable Finland Holder shall send to U.S. Holders written notice
13
thereof (the "Co-Sale Notice") setting forth the number of Finland
Holder's Co-Sale Securities to be sold, the purchase price, the
proposed closing date and any other material terms. Within ten (10)
days after delivery of the Co-Sale Notice, U.S. Holders, as a group,
may elect to sell up to their pro rata share of the total number of
securities to be purchased by the transferee described in the Co-Sale
Notice by giving written notice thereof to the Company and tendering
to the Company all documentation necessary to effect the sale of the
Co-Sale Securities to be sold, with written instructions to transfer
the Co-Sale Securities to the transferee described in the Co-Sale
Notice upon receipt of payment for such Co-Sale Securities at the
price or prices set forth in the Co-Sale Notice from such transferee
for the benefit of such U.S. Holder; PROVIDED, HOWEVER, that in no
event shall any individual U.S. Holder be permitted to sell any shares
pursuant to this SECTION 9.2 which are in excess of the maximum number
of Registrable Shares then owned by such U.S. Holder, and FURTHER
PROVIDED THAT, if any U.S. Holder elects to not sell securities in the
transaction giving rise to Co-Sale Rights, such U.S. Holder's pro rata
share shall be reallocated pro rata among the participating U.S.
Holders; PROVIDED, HOWEVER, that in the no event shall any individual
U.S. Holder be permitted to sell any shares pursuant to this SECTION
9.2 which are in excess of the maximum number of Registrable Shares
then owned by such U.S. Holder. Any election under this SECTION 9.2
shall be irrevocable. Failure to respond within such ten (10) day
period shall be deemed notice of U.S. Holder's rejection of the offer
and decision not to participate in such transaction. Within three (3)
Business Days after the expiration of the initial notice period, the
Company will give notice of the availability of any additional shares
and any U.S. Holder desiring to sell additional shares shall inform
the Company of the same within two (2) Business Days of such notice.
The applicable Finland Holder shall thereupon notify the transferee of
the co-sale arrangements hereunder, and instruct the transferee to
deliver payment for the shares to be purchased from the U.S. Holders
to the Company, who shall transmit such payment to the U.S. Holders.
For the purpose of the co-sale right set forth in this SECTION 9.2,
the pro rata share of the U.S. Holders shall be the ratio that (i) the
number of shares of Co-Sale Securities then held by the U.S. Holders
bears to (ii) the sum of the total number of shares of Co-Sale
Securities held by the Finland Holders. Each U.S. Holder shall be
required to give, in order to effect a sale pursuant to this
SECTION 9.2, such representations or warranties which are
substantially similar in effect to those to be given by the Finland
Holders, including, without limitation, pertaining to authority to
sell such U. S. Holder's Co-Sales Securities to be sold and title to
such Co-Sale Securities.
9.3 TRANSFER BY FINLAND HOLDERS FOLLOWING CO-SALE NOTICE. In
the event that the U.S. Holders, in the aggregate, elect not to sell
or fail to sell to the proposed transferee the full number of Co-Sale
Securities subject to the Co-Sale Notice, the Finland Holders may,
within ninety (90) days after the expiration of the fifteen (15) day
notice period provided for in SECTION 9.2(B), transfer such Co-Sale
14
Securities of the Finland Holders which are equal to such shortfall,
at a price and on terms no more favorable to the Finland Holders than
specified in the Co-Sale Notice. After the expiration of such ninety
(90) day period, the Finland Holders shall not thereafter transfer any
of Finland Holders' Co-Sale Securities without first complying with
the provisions of SECTION 9.2.
9.4 INVALID TRANSFERS. No transfer in violation of SECTION 9.2
shall be valid.
9.5 CERTAIN EXCEPTIONS. The provisions of SECTION 9.2 shall not
apply to (i) any sale or transfer by Finland Holders to immediate
family members or trusts for the benefit of the Finland Holders or
their immediate family members or their Affiliates, (ii) any sale or
transfer by Finland Holders to a U.S. Holder or to any Affiliate of a
U.S. Holder, (iii) any purchase of the securities of the Company by
the Company tendered by a Finland Holder to the Company in payment of
the exercise price of warrants, stock options or similar derivative
securities granted to Finland Holders by the Board of Directors of the
Company or any committee thereof or (iv) any sales of up to an
aggregate of 100,000 of Ordinary Shares by the Finland Holders on the
Helsinki Stock Exchange during any 90 day period, PROVIDED THAT, in
the case of Co-Sale Securities transferred pursuant to SECTION
9.5, all such transferees shall agree in writing to be subject to this
Agreement and to be bound by all of the restrictions set forth in this
Agreement with respect to the Co-Sale Securities so transferred to
them as fully as if such transferee were a Finland Holder.
9.6 TERMINATION OF CO-SALE RIGHTS ON TRANSFER. If a Finland
Holder shall transfer Co-Sale Securities in accordance with the
provisions of this SECTION 9 (other than SECTION 9.5(I)), such
Securities shall no longer be subject to the restrictions set forth in
this SECTION 9. The provisions of this SECTION 9 shall expire at the
earlier of such time as (i) the U.S. Holders have had the opportunity
to sell all of their Restricted Shares pursuant to any Co-Sale under
this Section, or (ii) the date this Agreement otherwise terminates.
SECTION 10. PARTICIPATION IN COMPANY OFFERINGS OUTSIDE THE UNITED
STATES.
10.1 NOTICE OF COMPANY OFFERINGS OUTSIDE OF UNITED STATES. If at
any time or from time to time during the Registration Rights Period
the Company shall determine to sell outside the United States any of
its Ordinary Shares for its own account for cash (excluding, for the
avoidance of doubt, any transaction which, if effected in the United
States would fall within the transactions described in SECTION 2.1(A)
- (D) of this Agreement), the Company will give written notice (the
"Company Notice"), at its expense, to U.S. Holders of its intention to
do so at least fifteen (15) days prior to the date on which such
offering is to commence. If any U.S. Holder desires to dispose of all
or part of his Registrable Shares, he may request that the number of
Ordinary Shares to be sold by the Company is decreased by thirty
15
percent (30%) in the aggregate and that such offering instead include
a like number of Registrable Securities; PROVIDED, HOWEVER, that in no
event shall any individual U.S. Holder be permitted to sell any shares
pursuant to this SECTION 10.1 which are in excess of the maximum
number of Registrable Shares then owned by such U.S. Holder) in
connection with Company's offering by delivering to the Company,
within ten (10) days after receipt of the Company Notice, written
notice of such request (the "U.S. Holders Notice") stating the number
of shares of Registrable Shares to be disposed of by such U.S.
Holders. The Company shall use its reasonable best efforts to cause
all of the Registrable Shares specified in the U.S. Holders Notice to
be included in such offering so as to permit the sale or other
disposition (in accordance with the intended methods thereof pursuant
to such offering) by U.S. Holders of the Registrable Shares so
included, subject, however, to the limitations set forth in SECTION
10.2; and, PROVIDED, HOWEVER, that the Company shall not be required
to grant any concession or additional rights or other consideration to
any other Person to secure the right of U.S. Holders to participate in
such offering. The provision of this SECTION 10 shall expire at the
earlier of such time as (i) the U.S. Holders have had the opportunity
to sell all of their Registrable Shares pursuant to any offering under
this Section, or (ii) the date this Agreement otherwise terminates.
10.2 CERTAIN LIMITATIONS ON AND REQUIREMENTS FOR PARTICIPATION IN
COMPANY OFFERINGS OUTSIDE THE UNITED STATES. (a) If the offering of
which the Company gives notice pursuant to Section 10.1 above is for
the purpose of permitting the disposition of securities by the Company
pursuant to a firm commitment underwritten offering, the Company shall
so advise U.S. Holders as a part of the Company Notice given pursuant
to Section 10.1. In such event, the right of U.S. Holders to
participate in such offering pursuant to Section 10.1 shall be
conditioned upon the applicable U.S. Holders's participation in such
underwriting (if any), and the inclusion of Registrable Shares in the
offering and/or underwriting shall be limited to the extent provided
herein. U.S. Holders shall sell the Registrable Shares included in
such offering to or through the Underwriter(s) (if any) of the
securities being registered for the account of the Company (or
otherwise selected by the Company, in its sole discretion, to manage
such underwriting) upon terms generally comparable to the terms
applicable to the Company (except that the U.S. Holders, on the one
hand, and the Company, on the other hand, each shall bear their own
costs.
(b) If requested in writing to do so in good faith by the
managing Underwriter of an underwritten offering, the Company shall
have the right to limit the aggregate size of the offering or decrease
the number of shares of the U.S. Holders to be included therein pro
rata to the extent necessary to reduce the number of securities to be
included in the offering to the level recommended by the managing
Underwriter, and only securities which are to be included in the
underwriting may be included in the offering. U.S. Holders shall
(together with the Company and other holders of the Registrable
16
Securities distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the
managing Underwriter selected for such underwriting by the Company.
(c) It will be the responsibility of the U.S. Holders to
convert their Registrable Shares from American Depository Shares into
Ordinary Shares if necessary to participate in any Co-Sale offering.
SECTION 11. ASSISTANCE WITH INSTITUTIONAL SALES. (a) The Company
shall, from time to time, upon the request of one or more U.S. Holders
use its reasonable best efforts to introduce such U.S. Holder or U.S.
Holders to (i) underwriters which may have an interest in assisting
with the sale of some or all of the Registrable Shares of such U.S.
Holder at the then prevailing market price for the Shares, and (ii)
institutional investors whom the Company believes may have an interest
in acquiring the Registrable Shares held by U.S. Holders.
(b) The Company will provide to U.S. Holders and such
potential underwriters and purchasers all such documents and
opportunities to meet with officials of the Company and to discuss
with its principal officers the Company's business pursuant to normal
investor relations practices, such as discussions regarding assets,
liabilities, financial condition, results of operations and business
prospects; it being understood that all such documents and disclosures
may be subject to appropriate confidentiality agreements.
Notwithstanding anything in this SECTION 11 to the contrary, the
Company shall not be required to register the Registrable Shares for
resale (except as set forth in SECTION 2) under the Securities Act or
the securities laws of Finland or any other jurisdiction in connection
with any proposed sale of such Registrable Shares by the U.S. Holders.
(c) All actions by the Company under this SECTION 11 shall
be at the sole cost and expense of the applicable U.S. Holders;
PROVIDED THAT the Company shall not charge U.S. Holders with any
internal expenses of the Company associated with responding to any
reasonable due diligence requests of any potential purchaser and the
Company shall bear all costs associated with the attendance of any
Company officers at no more than three (3) "road shows" in any twelve
month period. The Company shall not be obligated to engage in any
activity which would require it to register as a broker-dealer under
the securities laws of the United States nor shall the Company be
obligated to engage in any activity which could reasonably be expected
to result in any sale by such U.S. Holder being deemed a distribution
by the Company in violation of the securities laws of any applicable
jurisdiction.
SECTION 12. TERMINATION.
This Agreement shall terminate upon the sixth anniversary of the
Effective Time (as defined in the Merger Agreement).
17
SECTION 13. AMENDMENT.
Any provision of this Agreement may be amended or the observance
thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the mutual
written consent of the Company and the U.S. Holders. Any amendment or
waiver effected in accordance with this SECTION 13 shall be binding
upon each party to this Agreement and each transferee of securities
subject to this Agreement.
SECTION 14. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE INTERNAL
LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS.
SECTION 15. ENTIRE AGREEMENT.
This Agreement constitutes the full and entire understanding and
agreement among the parties regarding the matters set forth herein.
Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon the successors,
assigns, heirs, executors and administrators of the parties hereto.
SECTION 16. NOTICES, ETC.
All notices, demands or other communications required or
permitted hereunder shall be in writing and shall be mailed by
registered or certified mail, postage prepaid, or otherwise delivered,
by hand or by messenger, addressed:
If to U.S. Holders or the Finland Holders, to the address set
forth below the individual Holder's signature to this Agreement, or to
such other address as an individual Holder shall have furnished to the
Company.
If to the Company, to:
Eimo Oyj
Xxxxxxxx 0
X.X. Xxx 000
XXX-00000 Xxxxx
XXXXXXX
Attn: Xxxxx Xxxxxxxx
Facsimile: 011-358-3-850-5405
18
or to such other address as the Company shall have furnished to U.S.
Holders, with a copy to:
Xxxxx, Xxxxxxxx & Xxxxxxx, XXX
Xxxxx 0000, Xxxxxxxxx XX
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000
Each such notice or other communication shall for all purposes of
this Agreement be treated as effective or having been given when
delivered if in writing and delivered personally, or, if sent by mail,
postage pre-paid, at the earlier of its receipt or 72 hours after the
same has been deposited in a regularly maintained receptacle for the
deposit of the United States mail, addressed, pre-paid and mailed as
aforesaid. IN ORDER FOR A NOTICE TO BE EFFECTIVE, A SECOND COPY MUST
BE FAXED BY THE SENDER TO THE PARTY TO WHOM IT IS ADDRESSED. Any
party may change by such notice the address to which notices to it are
to be addressed.
SECTION 17. COUNTERPARTS.
This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall
constitute one instrument.
SECTION 18. SEVERABILITY.
In the event that any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and
effect without said provision, which shall be replaced with an
enforceable provision closest in intent and economic effect as the
severed provision; PROVIDED that no such severability shall be
effective if it materially changes the economic benefit of this
Agreement to any party.
SECTION 19. CAPTIONS AND SECTION TITLES.
Section titles or captions contained in this Agreement are
inserted as a matter of convenience and for reference purposes only,
and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof.
SECTION 20. SINGULAR AND PLURAL, ETC.
Whenever the singular number is used herein and where required by
the context, the same shall include the plural, and the neuter gender
shall include the masculine and feminine genders.
19
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
"COMPANY"
Eimo Oyj
By: ____________________________________
Name:___________________________________
Title: _________________________________
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
"U.S. HOLDERS"
________________________________________
A. Xxxxxxxxx Xxxxxxx
________________________________________
________________________________________
________________________________________
Facsimile:______________________________
________________________________________
Xxxxxx X. Xxxxxxxxx, Xx.
________________________________________
________________________________________
________________________________________
Facsimile:______________________________
________________________________________
Xxxxxx X. Xxxxxxx
________________________________________
________________________________________
________________________________________
Facsimile:______________________________
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
20
"FINLAND HOLDERS":
_____________________________________
Xxxx Xxxxxxxx
_____________________________________
_____________________________________
_____________________________________
Facsimile:___________________________
_____________________________________
Xxxxx Xxxxxxxx
_____________________________________
_____________________________________
_____________________________________
Facsimile:___________________________
_____________________________________
Topi Xxxxxxxx
_____________________________________
_____________________________________
_____________________________________
Facsimile:___________________________
_____________________________________
Xxxxxxxx Jukko
_____________________________________
_____________________________________
_____________________________________
Facsimile:___________________________
21
