SHAREHOLDERS AGREEMENT
This Shareholders Agreement (the "Agreement") is made and entered into
as of _______, 1998 between White River Ventures, Inc., a Delaware corporation
("WRV"), and Capricorn Investors, II L.P., a Delaware limited partnership
("Capricorn" and each of Capricorn and WRV is sometimes referred to herein as a
"Shareholder" and together as the "Shareholders").
R E C I T A L S
WRV owns 7,247,564 shares of Common Stock of the Company.
Capricorn purchased 1,337,000 shares of Common Stock of the Company
from WRV pursuant to a Stock Purchase Agreement (the "Stock Purchase Agreement")
dated as of July 21, 1998.
It was a condition to the closing of the sale of shares of Common Stock
to Capricorn pursuant to the Stock Purchase Agreement that the parties enter
into this Agreement.
The Shareholders wish to specify certain restrictions on the transfer
and voting of Common Shares.
In consideration of the foregoing and of the mutual agreements
contained herein, the parties hereto agree as follows:
1. DEFINITIONS.
"Affiliate" shall have the meaning ascribed to such term in Section
2(g) hereof.
"Capricorn" shall mean Capricorn Investors, II L.P. and its Affiliates,
if any, who have agreed to be bound by the provisions hereof pursuant to Section
2(g) hereof.
"Common Shares" shall mean shares of the Common Stock of the Company,
par value $0.10 per share.
"Company" shall mean CCC Information Services Group Inc., a Delaware
corporation.
"Excluded Sale" shall mean any Sale after February __, 2001 which is
any of (i) a Public Sale, (ii) a Sale pursuant to Rule 144 under the Securities
Act or (iii) a distribution by Capricorn of Common Shares to its investors.
"Person" shall mean and include natural persons, corporations,
partnerships, limited partnerships, limited liability companies, joint stock
companies, joint ventures, associations,
companies, trusts, banks and other organizations, whether or not legal entities,
and governments and agencies and political subdivisions thereof.
"Public Sale" shall mean a Sale of Common Shares pursuant to an
effective registration statement under the Securities Act.
"Sale" shall mean any offer, offer to sell, offer for sale, sale,
assignment, contract of sale, disposition of an interest in or transfer, grant
of a participation in, pledge or other disposal of any Common Shares (or any
solicitation of any offers to buy or otherwise acquire, or take a pledge of, any
Common Shares), other than (i) any pledge of Common Shares in connection with
the extension of credit by a bank, broker-dealer or other financial institution
or (ii) any Excluded Sale.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shareholder" shall mean any of Capricorn and WRV and their respective
Affiliates, if any, who have agreed to be bound by the provisions hereof
pursuant to Section 2(g) hereof.
"WRV" shall mean WRV and its Affiliates, if any, who have agreed to be
bound by the provisions hereof pursuant to Section 2(g) hereof.
2. RESTRICTIONS ON TRANSFER.
(a) GENERAL RESTRICTIONS. Except as otherwise provided in Section
2(g) hereof, each Shareholder agrees that it will not effect any Sale
other than a sale to the other Shareholder, unless the Shareholder
shall have complied with all applicable provisions of this Agreement.
(b) RIGHT OF FIRST OFFER. Except as set forth in Section 2(g)
hereof, neither Shareholder shall effect a Sale unless, at least 30
days prior to the date of such Sale:
i. The Shareholder wishing to effect a sale (the "Offeror")
shall have given to the other Shareholder (the "Offeree")
a notice of the Offeror's intention to effect such Sale
(a "Sale Notice"). The Sale Notice shall include (x) the
number of Common Shares that the Offeror desires to
include in the Sale and (y) an invitation (the
"Invitation") to the Offeree to make an offer to purchase
such Common Shares. Alternatively, if the proposed
transferee and material terms of such proposed Sale are
then known by the Offeror, the Sale Notice shall include
(1) the identity of such transferee, (2) such material
terms and such other information with respect to the Sale
that the Offeree may reasonably request and (3) an Offer
to sell to the Offeree, on terms and conditions
substantially identical to those contained in the Sale
Notice, the number of shares specified in the Sale
Notice.
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ii. If, within 20 days of receipt of the Sale Notice which
includes an Invitation, the Offeree makes an offer to
purchase such Common Shares for cash, the Offeror shall,
by written notice to Offeree, accept or reject such
offer. If the Offeror rejects such offer, for a period of
120 days following such rejection, the Offeror may only
sell such Common Shares to any third party at a price per
share at least five percent (5%) greater than the price
per share offered by the Offeree. If the Offeror accepts
the offer, the Offeree shall purchase the Common Shares
that are the subject of the offer within 30 days of
Offeror's acceptance (which 30-day period shall be
extended to the extent necessary to permit the
preparation and filing of any application for
Xxxx-Xxxxx-Xxxxxx clearance and any other required
regulatory clearance). If the Offeree shall fail to
purchase such Common Shares (other than because of the
Offeror's failure to perform) within such 30-day period
(as the same may be extended for required regulatory
clearances), such Common Shares shall cease to be subject
to this Agreement. If, within 20 days of receipt of the
Sale Notice which includes an Offer, the Offeree does not
notify the Offeror of Offeree's acceptance of the Offer
included in the Sale Notice, the Offeror shall be free,
for a period of 120 days, to consummate such Sale to the
Person(s) identified in the Sale Notice, at a price no
less than the price set forth in the Sale Notice and on
terms otherwise no more favorable to the purchaser(s)
than as set forth therein.
(c) PARALLEL EXIT. Subject to Section 2(g), no Shareholder will
effect a Sale, other than (i) a Sale by WRV to a Purchaser (as later
defined herein) where WRV has elected to exercise its drag-along rights
specified in Section 2(d) and has provided a Drag-Along Notice (as
later defined herein) to Capricorn, (ii) a Public Sale or (iii) a Sale
in "brokers' transactions" (as defined in Rule 144 under the Securities
Act) pursuant to Rule 144 under the Securities Act, unless, prior to
such Sale:
i. At least 30 days prior to the date of the proposed Sale,
the Shareholder wishing to effect a Sale (the "Offeror")
shall have given to the other Shareholder (the "Offeree")
notice (the "Tag-Along Notice") of the Offeror's
intention to effect the Sale. The Tag-Along Notice shall
set forth (x) the amount of Common Shares that the
Offeror desires to include in the Sale, (y) the principal
terms of the Sale, including the name of the proposed
transferee(s) (if known), the price at which such Common
Shares are intended to be sold and such other information
with respect to such Sale as the Offeree shall reasonably
request, and (z) an offer (the "Tag-Along Offer") from
the Offeror to the Offeree to cause to be included in the
Sale, on terms and conditions substantially identical to
those on which the Offeror shall effect the Sale of its
Common Shares and not materially less favorable to such
Offeree than the terms and conditions set forth in the
Tag-
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Along Notice, an amount of Common Shares determined in
accordance with Section 2(c)(iii) hereof.
ii. An Offeree, who shall not have accepted the Tag-Along
Offer by notice in writing delivered to the Offeror
within a period of 20 days from the date of delivery of
the Tag-Along Notice, shall be deemed to have waived all
of its rights under this Section 2(c) with respect to the
Sale of Common Shares described in such Tag-Along Notice;
and the Offeror shall thereafter be free, for a period of
120 days, to effect the Sale to the Person(s) named in
the Tag-Along Notice, at a price no greater than the
price set forth in the Tag-Along Notice and on terms not
materially more favorable to them than those set forth
therein, without any further obligation to such Offeree
under this Section 2(c).
iii. An Offeree who shall have accepted the Tag-Along Offer by
notice in writing delivered to the Offeror within a
period of 20 days from the date of delivery of the
Tag-Along Notice (a "Participating Offeree") shall be
entitled to include in the Sale described in the
Tag-Along Notice, on the same terms and conditions as the
Offeror shall include Common Shares, up to an amount of
Common Shares equal to the product of (x) the number of
Common Shares then held by the Participating Offeree
multiplied by (y) a fraction, the numerator of which is
the aggregate number of Common Shares to be included in
the Sale by the Shareholders and the denominator of which
is the number of Common Shares held by the Offeror plus
the number of Common Shares held by the Participating
Offeree.
(d) RIGHT TO COMPEL SALE; DRAG-ALONG RIGHTS. Subject to Section
2(g) hereof, if WRV proposes to effect a Sale to a third party (the
"Purchaser"), for cash, cash equivalents or readily marketable
securities, of all Common Shares held by WRV (the "Purchase Offer"),
WRV may, at its option, require Capricorn to sell all Common Shares
held by Capricorn to the Purchaser for the same consideration per share
and otherwise on substantially the same terms and conditions upon which
WRV sells its Common Shares.
WRV may exercise the rights described in this Section 2(d) by
providing a written notice (the "Drag-Along Notice") of the Purchase
Offer to Capricorn no later than 30 days prior to the date set for the
Sale in the Purchase Offer. The Drag-Along Notice shall contain written
notice of the exercise of WRV's rights pursuant to this Section 2(d) to
require the Sale of all of the Common Shares held by Capricorn, setting
forth the consideration per share to be paid by the Purchaser and the
other material terms and conditions of the Purchase Offer. No later
than five (5) business days before the date set for the Sale in the
Purchase Offer, Capricorn shall deliver to a representative of WRV
designated in the Drag-Along Notice, or any subsequent notice,
certificates representing all Common Shares held by Capricorn, duly
endorsed in blank for transfer, with signatures
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guaranteed, together with all other documents required to be executed
in connection with such Purchase Offer or, if such delivery is not
permitted by applicable law, an unconditional agreement to deliver such
Common Shares pursuant to this Section 2(d) on the date set for Sale
pursuant to the Purchase Offer against delivery to Capricorn of the
consideration therefor.
(e) CERTAIN OBLIGATIONS IN SALE.
i. A Shareholder electing pursuant to Section 2(c) hereof,
or required by Section 2(d) hereof, to include Common
Shares held by such Shareholder in any Sale hereunder (a
"Participating Shareholder") shall take such actions and
execute such documents and instruments as shall be
necessary or desirable in order to consummate the Sale
expeditiously.
ii. If, for any reason the Shareholder proposing the Sale
(the "Selling Shareholder") determines it cannot complete
the Sale, the Selling Shareholder shall return to the
Participating Shareholder all certificates representing
Common Shares that the Participating Shareholder
delivered for Sale pursuant hereto together with all
other documents delivered pursuant hereto by the
Participating Shareholder, and all the restrictions on
Sale or other disposition contained in this Agreement
with respect to Common Shares shall again be in effect.
iii. At the closing of a Sale of Common Shares pursuant to
Section 2(c) or Section 2(d), the consideration with
respect to the Common Shares of a Participating
Shareholder sold pursuant thereto shall be paid directly
to the Participating Shareholder. The Selling Shareholder
shall furnish such other evidence of the completion and
time of completion of such Sale or other disposition and
the terms thereof as may be reasonably requested by the
Participating Shareholder.
iv. Notwithstanding anything to the contrary herein, there
shall be no liability on the part of the Selling
Shareholder in the event that a Sale of Common Shares
pursuant to Section 2(c) or Section 2(d) is not
consummated for whatever reason. Whether to effect a Sale
of Common Shares pursuant to Section 2(c) or Section 2(d)
shall be in the sole and absolute discretion of the
Selling Shareholder.
v. All costs and expenses incurred by the Selling
Shareholder effecting a Sale pursuant to Section 2(c) or
Section 2(d), including without limitation all attorneys'
fees, costs and disbursements and any finders fees or
brokerage commissions, shall be allocated PRO RATA
between the Selling Shareholder and the Participating
Shareholder, with each bearing the portion of such
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costs and expenses equal to a fraction, the numerator of
which shall be the amount of the gross proceeds received
by such Shareholder from such Sale, and the denominator
of which shall be the total amount of the gross proceeds
received by the Selling Shareholder and the Participating
Shareholder from such Sale.
(f) COMPLIANCE WITH PARTS 2(A), 2(B), 2(C) AND 2(D). A Shareholder
desiring to effect a Sale of Common Shares shall be bound by any and
all of the provisions of Sections 2(a), 2(b), 2(c) and 2(d) applicable
by their terms to such Shareholder and such Sale, and any Sale by such
Shareholder must comply with the terms of each such applicable
provision. Without limiting the generality of the foregoing, a
Shareholder must deliver to the other Shareholder at the appropriate
times both a Tag-Along Notice and a Sale Notice, must permit the
Shareholder accepting the offer made in the Tag-Along Notice to include
its Common Shares in the Sale pursuant to Section 2(c) and must comply
with any limitations applied as a result of Section 2(b).
(g) EXCLUDED TRANSACTIONS. Anything herein to the contrary
notwithstanding, the provisions of Sections 2(a), 2(b) and 2(c) shall
not apply to a Sale by any Shareholder to any Affiliate (as hereinafter
defined) of such Shareholder, if such Affiliate agrees in writing in
connection with such Sale to be bound by all of the provisions of this
Agreement applicable to such Shareholder and such Common Shares.
Furthermore, the rights of WRV set forth in Section 2(d) shall not
apply to a Sale by WRV to any Affiliate of WRV. As used herein, the
term "Affiliate" with respect to any Shareholder shall have the same
meaning as defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended.
3. BOARD OF DIRECTORS.
(a) VOTING. Each Shareholder agrees to vote all Common Shares and
other securities of the Company entitled to vote in the election of the
Company's Board of Directors (the "Board") now owned or hereafter
acquired by such Shareholder (collectively, the "Voting Shares"), and
agrees to take all reasonable action as shareholders to cause, the
election to the Board of one individual designated from time to time by
Capricorn and any individuals designated from time to time by WRV (any
such designee of Capricorn or WRV is referred to herein as a
"Nominee").
(b) SUBSTITUTION. If any Nominee shall be unable or unwilling to
serve prior to his or her election to the Board, the Shareholder
designating such Nominee shall be entitled to designate a replacement
who shall then be a Nominee for the purposes of this Agreement. If,
following election to the Board, any Nominee shall resign or be removed
or be unable to serve by reason of death or disability, the Shareholder
designating such Nominee shall, within 30 days of such event, notify
the other Shareholder in writing of a replacement, and
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the Shareholders shall take all reasonable steps as may be necessary to
elect, or cause the appointment of, such replacement to the Board to
fill the unexpired term of the Nominee.
(c) REMOVAL. If, following the election of a Nominee to the Board,
the Shareholder designating such Nominee desires the removal of such
Nominee, each Shareholder agrees to vote all Voting Shares now owned or
hereafter acquired by such Shareholder at any regular or special
meeting of the shareholders of the Company called for the purpose, for,
or otherwise consent to, the removal of such Nominee from the Board.
Except as set forth in this Section 3(c), no Shareholder shall vote any
Voting Shares in favor of, or consent to, the removal of any Nominee
designated by another Shareholder.
(d) The rights set forth in this Section 3 may be exercised by
Capricorn only so long as Capricorn owns at least 80% of the Common
Shares acquired by Capricorn pursuant to the Stock Purchase Agreement
and may not be assigned by either Shareholder except to an Affiliate of
such Shareholder in connection with a sale of Common Shares pursuant to
Section 2(g) hereof.
4. LEGENDS.
The Shareholders shall use reasonable efforts to cause each certificate
evidencing outstanding Common Shares issued to any Shareholder to bear a legend
substantially in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE PROVISIONS OF A SHAREHOLDERS
AGREEMENT, DATED ______, 1998, AS THE SAME MAY
BE AMENDED, AND MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS SUCH
TRANSFER, SALE OR HYPOTHECATION COMPLIES WITH
THE TERMS OF SUCH AGREEMENT.
5. SPECIFIC PERFORMANCE.
The parties hereto each acknowledge and agree that, in the event of any
breach of this Agreement, the non-breaching party would be irreparably harmed
and could not be made whole by monetary damages. It is accordingly agreed that
such parties, in addition to any other remedy to which they may be entitled at
law or in equity, shall be entitled to compel specific performance of this
Agreement in any action instituted in the United States District Court for the
District of Delaware, or, in the event such court would not have jurisdiction
for such action, in any court of the United States or any state having subject
matter jurisdiction. The parties hereto each consent to personal jurisdiction in
any such action brought in the United States District Court for the District of
Delaware.
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6. ENTIRE AGREEMENT; AMENDMENTS.
This Agreement contains the entire understanding of the parties with
respect to the subject matter of this Agreement. There are no restrictions,
agreements, promises, warranties, covenants or undertakings other than those
expressly set forth herein. This Agreement supersedes all prior agreements and
understandings among the parties with respect to its subject matter. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto. Any agreement on the part of a party hereto to
any extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
7. INTERPRETATION.
The section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. If in the future other holders of Common
Shares become parties to this Agreement (either pursuant to a transfer of Common
Shares from a Shareholder or otherwise), references herein to Shareholder shall
include each such additional party, as appropriate.
8. NOTICES.
All notices hereunder shall be in writing and shall be deemed to have
been given or made when given or made in the manner and at the address set forth
in the Stock Purchase Agreement or such other address as any party hereto may
have furnished to the others in writing in accordance therewith, except that
notices of change of address shall be effective only upon receipt.
9. TERMINATION.
This Agreement shall terminate in its entirety on the earlier to occur
of (i) the agreement to terminate by Capricorn and WRV, (ii) the liquidation of
Capricorn and (iii) the distribution by Capricorn of all of the Common Shares
held by it to its investors (which distribution shall not be deemed a Sale as
defined herein).
10. GOVERNING LAW.
This Agreement shall be governed by and construed in all respects in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of laws thereof which might refer such interpretation to
the laws of a different state or jurisdiction.
11. COUNTERPARTS.
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed to be an original; but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Shareholders Agreement has been duly executed
and delivered as of the date first above written.
CAPRICORN INVESTORS, II L.P.
By: CAPRICORN HOLDINGS, LLC
Its General Partner
By:
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Xxxxxxx X. Xxxxxxx, Xx.
Manager
WHITE RIVER VENTURES, INC.
By:
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Authorizing Signatory
By:
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Authorizing Signatory
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