EXHIBIT 10.3
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LIQUIDITY AND REGISTRATION RIGHTS AGREEMENT
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This LIQUIDITY AND REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT") is made as of July 13, 2000, by and among Eimo Oyj, a
company organized under the laws of the Republic of Finland (the
"COMPANY"), and A. Christian Schauer, Daniel B. Canavan, and Victor V.
Valentine, Jr. (individually, a "U.S. HOLDER" and collectively, the
"U.S. HOLDERS") and JALO PAANANEN, ELMAR PAANANEN, TOPI PAANANEN, and
ANNAMARI JUKKO (individually, a "FINLAND HOLDER" and collectively, the
"FINLAND HOLDERS").
RECITALS
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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 Agreement and Plan of Merger of even
date herewith (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
simultaneously with the execution and delivery of the Merger Agreement
by the parties thereto.
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:
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.
"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.
"LOCK-UP AGREEMENT" shall mean the Lock-Up Agreement dated as of
July 13, 2000 by and between the parties hereto.
"ORDINARY SHARES" shall mean the ordinary 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, (iii)
the registration rights with respect to such shares have not otherwise
terminated, and (iv) they may be sold in accordance with or without
restriction under the Lock-Up Agreement.
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"REGISTRABLE SHARES" shall mean the American Depository Shares;
PROVIDED, HOWEVER, that the American Depository 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
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144(e)(1) (regardless whether such sale is
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 (in
each case, free of any contractual
restriction on sale under the Lock-Up
Agreement); 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, in
each case, free of any contractual restriction on
sale under the Lock-Up Agreement and the
Registrable Shares sought to be sold, in fact,
have been sold under such applicable provision).
"RELEASED SHARES" shall mean, as to any U.S. Holder, Registrable
Shares, the sale of which is not prohibited by the Lock-Up Agreement.
"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.
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"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.
2. PIGGYBACK/INCIDENTAL REGISTRATION.
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
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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 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).
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.
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:
(i) Whenever the number of shares which may be
registered pursuant to SECTION 2.1 is limited by the
provisions of subsection (a), 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.
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(ii) 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 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.
(iii) 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.
(iv) 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.
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(v) If (A) as a result of the proration provisions of
this SECTION 2.2 (a), 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.
(vi) 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.
(vii) 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.
(b) 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).
(c) 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.
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
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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.
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 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.
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.
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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.
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).
6. INDEMNIFICATION.
6.1 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
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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 The Company may require, as a specific condition to
including any Registrable Shares 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 this 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
subsection 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 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
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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 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
subsection (c) 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 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,
12
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 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.
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.
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.
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9. CO-SALE RIGHTS WITH FINLAND HOLDERS.
9.1 For purposes of this SECTION 9.1, 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 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 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 in violation of the applicable provisions of the
Lock-Up Agreement or which are in excess of the maximum number of
Released 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 or is unable to participate
in the sale of the Co-Sale Securities by virtue of the Lock-Up
Agreement, 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 Released Shares then owned by such U.S. Holder. Any
election under this Section shall be irrevocable. Failure to respond
which such ten 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
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(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 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 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 No transfer in violation of SECTION 9.2 shall be valid.
9.5 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 CLAUSE (I), 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 If a Finland Holder shall transfer Co-Sale Securities
in accordance with the provisions of this SECTION 9 (other than clause
(i)) of SECTION 9.5), , such Securities shall no longer be subject to
the restrictions set forth in this SECTION 9. The provisions of this
15
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.
10. PARTICIPATION IN NON-U.S. COMPANY OFFERINGS OUTSIDE THE
UNITED STATES.
10.1 NOTICE. 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 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 Released 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 Restricted Shares pursuant to
any offering under this Section, or (ii) the date this Agreement
otherwise terminates.
10.2 LIMITATIONS ON PARTICIPATION.
(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.
16
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
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.
11. ASSISTANCE WITH INSTITUTIONAL SALES. 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 (a) 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 (b)
institutional investors whom the Company believes may have an interest
in acquiring the Registrable Shares held by U.S. Holders.
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, 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 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.
17
All actions by the Company under this Section 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.
12. TERMINATION. This Agreement shall terminate upon the sixth
anniversary of the Effective Time (as defined in the Merger
Agreement).
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 12
shall be binding upon each party to this Agreement and each transferee
of securities subject to this Agreement.
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.
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.
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:
16.1 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.
18
16.2 If to the Company, to:
Eimo Oyj
Norokatu 5
P.O. Box 104
FIN-15101 Lahti
FINLAND
Attn: Elmar Paananen
Facsimile: 011-358-3-850-5405
or to such other address as the Company shall have furnished to U.S.
Holders, with a copy to:
Smith, Gambrell & Russell, LLP
Suite 3100, Promenade II
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309-3592
Attn: John D. Saunders, Esq.
Facsimile: 404-685-6982
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.
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.
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.
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.
19
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.
20
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
"COMPANY"
Eimo Oyj
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
21
"U.S. HOLDERS"
_____________________________________________
A. Christian Schauer
_____________________________________________
_____________________________________________
_____________________________________________
Facsimile:___________________________________
_____________________________________________
Victor V. Valentine, Jr.
_____________________________________________
_____________________________________________
_____________________________________________
Facsimile:___________________________________
_____________________________________________
Daniel B. Canavan
_____________________________________________
_____________________________________________
_____________________________________________
Facsimile:___________________________________
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
22
"FINLAND HOLDERS":
_____________________________________________
Jalo Paananen
_____________________________________________
_____________________________________________
_____________________________________________
Facsimile:___________________________________
_____________________________________________
Elmar Paananen
_____________________________________________
_____________________________________________
_____________________________________________
Facsimile:___________________________________
_____________________________________________
Topi Paananen
_____________________________________________
_____________________________________________
_____________________________________________
Facsimile:___________________________________
_____________________________________________
Annamari Jukko
_____________________________________________
_____________________________________________
_____________________________________________
Facsimile:___________________________________
23