EXHIBIT 4.1
FOURTH AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
DATED AS OF MARCH 19, 2003
AMONG
DEALERTRACK HOLDINGS, INC.
AND THE
STOCKHOLDERS IDENTIFIED HEREIN
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS..................................................................... 2
SECTION 2. LIMITATIONS ON TRANSFERS OF STOCK AND INVESTMENTS IN COMPETITORS ............... 13
SECTION 3. RIGHT OF FIRST REFUSAL.......................................................... 14
SECTION 4. RIGHT OF CO-SALE................................................................ 15
SECTION 5. REPURCHASE RIGHT................................................................ 16
SECTION 6. PREEMPTIVE RIGHTS............................................................... 20
SECTION 7. PUT PROVISIONS; SALE OF THE CORPORATION......................................... 21
SECTION 8. COVENANTS OF THE CORPORATION.................................................... 27
SECTION 9. APPROVED SALE OF THE CORPORATION................................................ 28
SECTION 10. ELECTION OF DIRECTORS; VOTING................................................... 29
SECTION 11. REGULATORY MATTERS.............................................................. 32
SECTION 12. REPRESENTATION OF THE STOCKHOLDERS.............................................. 34
SECTION 13. LEGEND; OPINION OF COUNSEL...................................................... 34
SECTION 14. ADDITIONAL SHARES OF STOCK...................................................... 35
SECTION 15. DURATION OF AGREEMENT........................................................... 35
SECTION 16. JOINDERS; AMENDMENT OF ANNEX I.................................................. 36
SECTION 17. SEVERABILITY; GOVERNING LAW..................................................... 37
SECTION 18. SUCCESSORS AND ASSIGNS.......................................................... 37
SECTION 19. NOTICES......................................................................... 37
SECTION 20. MODIFICATION; WAIVER............................................................ 43
SECTION 21. VOTING.......................................................................... 43
SECTION 22. REMEDIES ....................................................................... 44
SECTION 23. NO DISCLOSURE OBLIGATIONS....................................................... 44
SECTION 24. HEADINGS........................................................................ 45
SECTION 25. NOUNS AND PRONOUNS.............................................................. 45
SECTION 26. ENTIRE AGREEMENT................................................................ 45
SECTION 27. COUNTERPARTS.................................................................... 45
SECTION 28. AMENDED AND RESTATED AGREEMENT.................................................. 45
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
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FOURTH AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (the
"Agreement"), dated as of March 19, 2003, among:
I. DEALERTRACK HOLDINGS, INC., a Delaware corporation (the
"Corporation");
II. the STOCKHOLDERS of the Corporation identified on Annex I (each,
a "Stockholder" and, collectively, the "Stockholders"); and
III. DEALERTRACK, INC., WEBALG, INC. and CREDIT ONLINE, INC. each a
Delaware corporation and a wholly-owned Subsidiary (as defined below) of the
Corporation (the Corporation, Stockholders, DealerTrack, Inc., webalg, inc. and
Credit Online, Inc. together, the "Parties").
WHEREAS, the Corporation and certain of the Parties hereto have entered
into those certain Stock Purchase Agreements dated as of January 30, 2003, among
the respective parties thereto (the "Stock Purchase Agreements"), pursuant to
which the Corporation shall issue (i) to the Series A-2 Stockholders (as defined
below) shares of the Corporation's Series A-2 Preferred Stock (as defined below)
and (ii) to the Series C-3 Stockholders (as defined below) shares of the
Corporation's Series C-3 Preferred Stock (as defined below);
WHEREAS, the Corporation and certain of the Parties hereto have entered
into that certain Series C-2 Securities Purchase Agreement, dated as of December
4, 2002, among the Corporation and the Series C-2 Stockholders (as defined
below) (the "Series C-2 Securities Purchase Agreement") pursuant to which the
Corporation issued to such Series C-2 Stockholders shares of the Corporation's
Series C-2 Preferred Stock (as defined below);
WHEREAS, the Corporation and certain of the Parties hereto have entered
into a Series C-1 Securities Purchase Agreement, dated as of April 22, 2002,
among the Corporation and the Series C-1 Stockholders (as defined below) (the
"Series C-1 Securities Purchase Agreement"), pursuant to which the Corporation
issued to such Series C-1 Stockholders shares of the Corporation's Series C-1
Preferred Stock (as defined below);
WHEREAS, the Corporation and certain of the Parties hereto have entered
into a Securities Purchase Agreement, dated as of December 28, 2001, among the
Corporation and the Series C Stockholders (as defined below), pursuant to which
the Corporation issued to such Series C Stockholders shares of the Corporation's
Series C Preferred Stock (as defined below);
WHEREAS, the Corporation and certain of the Parties hereto have entered
into a Stock Exchange Agreement, dated as of August 10, 2001, pursuant to which
the Corporation issued to such parties shares of the Corporation's Series A
Preferred Stock, Series A-1 Preferred Stock, Series B Preferred Stock and Series
B-1 Preferred Stock (each, as defined below), as applicable;
WHEREAS, as a condition to and in connection with the execution of the
Stock Purchase Agreements, the Parties hereto desire to amend and restate the
Third Amended and Restated Stockholders' Agreement, dated as of December 4,
2002, among the Corporation and the holders of the Series A Preferred Stock,
Series A-1 Preferred Stock, Series B Preferred Stock,
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Stockholders' Agreement
the Series B-1 Preferred Stock, the Series C Preferred Stock, Series C-1
Preferred Stock, Series C-2 Preferred Stock and Common Stock (the "Prior
Stockholders' Agreement");
WHEREAS, each Stockholder owns, on the date hereof, that number of shares
of Stock (as defined below) set forth opposite such Stockholder's name on Annex
I hereto; and
WHEREAS, it is deemed to be in the best interest of the Corporation and
the Stockholders that provision be made for the continuity and stability of the
business and policies of the Corporation, and, to that end, the Corporation and
the Stockholders hereby set forth their agreement with respect to the shares of
Stock owned by the Stockholders.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the Parties hereto hereby agree
as follows:
SECTION 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following respective meanings:
"Adjusted Treasury Stock Basis" means assuming the conversion of all
then-outstanding securities convertible into Common Stock, the exercise of all
then-outstanding vested (or which vests as a result of any transaction
contemplated by Section 7 herein) stock options for Common Stock pursuant to the
Stock Option Plan, and the exercise of all then-outstanding options (other than
pursuant to the Stock Option Plan to avoid duplication), warrants and other
rights, if any, exercisable then at any point in the future for Common Stock.
All exercises of options, warrants or any other rights, if any, hereunder shall
be calculated pursuant to the treasury stock method in accordance with GAAP.
"Affiliate" means, with respect to any Person, any (a) director, officer
or stockholder holding 5% or more of the capital stock (on a Fully Diluted
Basis) of such Person, (b) spouse, parent, sibling or descendant of such Person
(or a spouse, parent, sibling or descendant of a director, officer, or partner
of such Person) or (c) other Person that, directly or indirectly, through one or
more intermediaries, controls, or is controlled by, or is under common control
with, such Person. The term "control" includes, without limitation, the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"ALG" means Automotive Lease Guide (alg), LLC.
"ALG Observer" shall have the meaning set forth in Section 10(d) hereof.
"AmeriCredit" means ACF Investment Corp.
"AmeriCredit Director" shall have the meaning set forth in Section
10(a)(iii) hereof.
"Appraiser Trigger Date" shall have the meaning set forth in Section
7(a)(ii) hereof.
"Approved Sale" shall have the meaning set forth in Section 9(a) hereof.
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"Board" means the board of directors of the Corporation.
"Board Observer" shall have the meaning set forth in Section 10(d) hereof.
"Broker" shall have the meaning set forth in Section 7(d) hereof.
"Business Day" means each day other than Saturday, Sunday, any federal
holiday or state recognized holiday in the State of New York.
"By-Laws" means the by-laws of the Corporation, as amended from time to
time.
"Capital One" means Capital One Auto Finance, Inc.
"Capital One Director" shall have the meaning set forth in Section
10(a)(iv) hereof.
"Cause", with respect to a Management Stockholder, (a) shall have the
meaning ascribed to such term in a then-effective written agreement between such
Management Stockholder and the Corporation or any of its Subsidiaries, or (b) in
the absence of such then-effective written agreement, shall mean (1) the
commission by such Management Stockholder of any act of fraud, theft or
financial dishonesty with respect to the Corporation or any of its Subsidiaries,
including the misappropriation (or attempted misappropriation) of any of the
funds or property of the Corporation or any Subsidiary thereof, (2) such
Management Stockholder has been convicted of, or plead guilty to, a felony, the
procedural equivalent thereof or any crime involving moral turpitude or
dishonesty on the part of such Management Stockholder, (3) any material breach
by such Management Stockholder of any agreement or understanding between the
Corporation or any Subsidiary thereof, on the one hand, and such Management
Stockholder, on the other hand (whether written or oral), including, without
limitation, the willful and continued failure or refusal of such Management
Stockholder to perform the material duties required of such Management
Stockholder as a director, officer or employee of, or as an advisor, independent
consultant or independent contractor to, the Corporation or any Subsidiary
thereof, other than as a result of such Management Stockholder having a
Disability (as defined in the Stock Option Plan)), (4) gross negligence or
willful misconduct with respect to the business and affairs of the Corporation
or any Subsidiary or Affiliate thereof (other than neglect solely due to such
Management Stockholder's Disability (as defined in the Stock Option Plan),
including such Management Stockholder's violation of any material policy of the
Corporation and (5) incompetence or negligence in the performance of such
Management Stockholder's duties in the reasonable opinion of the Board.
"Causing Stockholder" shall have the meaning set forth in Section 11(b).
"Certificate" means the Fourth Restated Certificate of Incorporation of
the Corporation, as amended from time to time.
"Closing Date" shall mean the date hereof.
"CMSI" means First American Credit Management Solutions, Inc., a Delaware
corporation.
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"Committee Observer" shall have the meaning set forth in Section 10(c)
hereof.
"Common Stock" means the Common Stock, $0.01 par value per share, of the
Corporation.
"Common Stock Equivalent Basis" means the conversion of all classes of
Preferred Stock of the Corporation convertible into Common Stock, but not the
exercise of any options or warrants for Common Stock.
"Common Stockholders" means all holders of Common Stock, including all
Management Stockholders.
"Corporation" shall have the meaning set forth in the caption to this
Agreement.
"Corporation Group" shall have the meaning set forth in Section 5(a)
hereof.
"Corporation Put Period" shall have the meaning set forth in Section
7(a)(iv) hereof.
"DealerTrack Regulatory Problem" shall have the meaning set forth in
Section 11(b).
"Decedent" shall have the meaning set forth in Section 5(b) hereof.
"Designated Shares" shall have the meaning set forth in Section 5(a)(ii)
hereof.
"Designation Notice" shall have the meaning set forth in Section 5(a)(ii)
hereof.
"Designee" shall have the meaning set forth in Section 5(a)(ii) hereof.
"DGCL" means the General Corporation Law of the State of Delaware.
"Documents" means this Agreement, the Certificate, the Registration Rights
Agreement and the Stock Purchase Agreements.
"Election Notice" shall have the meaning set forth in Section 5(a)(ii)
hereof.
"Equity Financing" shall have the meaning set forth in Section 6(a)
hereof.
"Excluded Securities" shall have the meaning set forth in Section 6(f)
hereof.
"Exempt Transfers" means any Transfer (i) by a party hereto to a member of
such party's Group who agrees in writing to be bound by the provisions of this
Agreement to the same extent as applicable to such transferring party or (ii)
pursuant to Section 7 hereof.
"FAC" shall have the meaning set forth in Section 10(a)(vii) hereof.
"FAC Director" shall have the meaning set forth in Section 10(a)(vii)
hereof.
"Fair Market Value" means the per share fair market value of the
outstanding Common Stock of the Corporation, as last determined in good faith by
the Board prior to the Repurchase
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Event or, if the Board determines in good faith that such fair market value has
materially changed since such determination, the fair market value as determined
in good faith by the Board as of the most recent practicable date prior to the
Repurchase Event. The Fair Market Value of Common Stock as of the date of this
Agreement and until the first determination of the Fair Market Value thereof by
the Board shall, for purposes of this paragraph, be deemed to be $2.80.
"First Potential Put Closing Date" shall have the meaning set forth in
Section 7(e) hereof.
"FMV Determination Date" shall have the meaning set forth in Section
5(a)(i) hereof.
"Fraction" shall have the meaning set forth in Section 7(a)(v) hereof.
"Fully Diluted Basis" means assuming the conversion of all
then-outstanding securities convertible into Common Stock, the exercise of all
stock options then-issued or issuable for Common Stock pursuant to the Stock
Option Plan, and the exercise of all then-outstanding options (other than
pursuant to the Stock Option Plan to avoid duplication), warrants and other
rights, if any, exercisable then or at any point in the future for Common Stock.
"GAAP" means U.S. generally accepted accounting principles.
"Governmental Entity" means any domestic or foreign federal, state,
municipal, or other government, governmental department, commission, board,
bureau, agency or instrumentality, or any court or tribunal.
"Group" means:
(a) in the case of any Stockholder who is an individual, (A) such
Stockholder and any Person one hundred percent (100%) of whose outstanding
securities and equity and beneficial interests are directly or indirectly owned,
controlled or held by such Stockholder, (B) the siblings, spouse, lineal
descendants, adopted children, parents and grandparents of such Stockholder and
(C) any trust for the benefit of any of the foregoing;
(b) in the case of any Stockholder which is a partnership, (A) such
partnership and any of its limited or general partners, (B) any corporation or
other business organization to which such partnership shall sell all or
substantially all of its assets or with which it shall be merged, (C) any
Affiliate of such partnership and (D) with the approval of the Board, which
approval shall not be unreasonably withheld, any employee of such Stockholder or
Affiliate;
(c) in the case of any Stockholder that is a limited liability company,
(A) such limited liability company and any of its members, (B) any corporation
or other business organization to which such limited liability company shall
sell all or substantially all of its assets or with which it shall be merged,
(C) any Affiliate of such limited liability company and (D) with the approval of
the Board, which approval shall not be unreasonably withheld, any employee of
such Stockholder or Affiliate; and
(d) in the case of any Stockholder which is a corporation, (A) such
corporation, (B) any corporation or other business organization to which such
corporation shall sell or transfer all or substantially all of its assets or
with which it shall be merged, (C) any Affiliate of such
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corporation and (D) with the approval of the Board, which approval shall not be
unreasonably withheld, any employee of such Stockholder or Affiliate.
"GRP" means, collectively, GRP II, L.P., GRP II Partners, L.P. and GRP II
Investors, L.P.
"GRP Director" shall have the meaning set forth in Section 10(a)(vi)
hereof.
"Initial Allocation Period" shall have the meaning set forth in Section
7(b) hereof.
"Investor Director" means, for the purpose of the reference made to such
term by Article IX of the Certificate and this Agreement, the AmeriCredit
Director, the Capital One Director, the FAC Director, each X.X. Xxxxxx Director,
the WF Director, the WFS Director, the GRP Director and any other director who
is an Affiliate of an Investor.
"Information" shall have the meaning set forth in Section 23(a) hereof.
"Investors" means ADP, AmeriCredit, ALG, Capital One, CMSI, GRP, X.X.
Xxxxxx, Xxxxx Fargo, Xxxxx Financial, WFS and their respective permitted
transferees in accordance with Section 2, with each of the foregoing an
"Investor."
"X.X. Xxxxxx" means X.X. Xxxxxx Partners (23A SBIC), LLC.
"X.X. Xxxxxx Director" shall have the meaning set forth in Section
10(a)(i) hereof.
"Joinder" shall have the meaning set forth in Section 2(a) hereof.
"Law" means as to any Person, any constitution, law, statute, treaty,
rule, ordinance, permit, certificate, directive, requirement, regulation or
Order of any Governmental Entity.
"Life Insurance Proceeds" shall have the meaning set forth in Section 5(b)
hereof.
"Liquidity Attempt Period" shall have the meaning set forth in Section
7(d) hereof.
"Liquidity Event" shall have the meaning set forth in the Certificate.
"Management Group" shall have the meaning set forth in Section 5(a)
hereof.
"Management Stockholders" means all employees, officers and directors of
and consultants to the Corporation who hold shares of Common Stock, including,
without limitation, any Person who exercises an option to purchase Common Stock
pursuant to the Stock Option Plan.
"Non-Allocated Put Shares" shall have the meaning set forth in Section
7(b) hereof.
"Non-Purchased Put Shares" shall have the meaning set forth in Section
7(b) hereof.
"Notice of Acceptance" shall have the meaning set forth in Section 6(b)
hereof.
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"Offer" shall have the meaning set forth in Section 6(a) hereof.
"Offered Securities" shall have the meaning set forth in Section 6(a)
hereof.
"Orders" means judgments, writs, decrees, injunctions, orders, compliance
agreements or settlement agreements of or with any Governmental Entity or
arbitrator.
"Original Cost" means the Option Price (as such term is defined in the
Stock Option Plan) at which each share of Common Stock subject to an option is
granted under the Stock Option Plan or the purchase price per share of a
security, as applicable, in each case, as adjusted from time to time for stock
splits, stock dividends and the like.
"Other Regulated Investor" shall have the meaning set forth in Section
11(a)(ii).
"Other Regulatory Problem" shall have the meaning set forth in Section
11(a)(ii).
"Participating Put Offerees" shall have the meaning set forth in Section
7(b) hereof.
"Person" shall be construed in the broadest sense and shall include any
natural person, company, partnership, joint venture, corporation, limited
liability company, business trust, unincorporated organization, other entity or
Governmental Entity.
"Preferred Stock" shall have the meaning set forth in the Certificate.
"Preferred Stockholders" means the Series A Stockholders, the Series A-1
Stockholders, the Series A-2 Stockholders, the Series B Stockholders, the Series
B-1 Stockholders, the Series C Stockholders, the Series C-1 Stockholders, the
Series C-2 Stockholders and the Series C-3 Stockholders.
"Prior Stockholders' Agreement" means that certain Third Amended and
Restated Stockholders' Agreement of the Corporation, dated as of December 4,
2002, among the Parties.
"Proportionate Percentage" means:
(a) for the purposes of Section 3 hereof, the pro rata percentage of Stock
being offered by a Selling Group pursuant to Section 3 that each Stockholder
shall be entitled to purchase, and shall be the percentage figure which
expresses the ratio, on a Common Stock Equivalent Basis, between the number of
shares of Stock owned by such Stockholder and the aggregate number of shares of
Stock owned by all Stockholders at the date of determination;
(b) for the purposes of Section 4 hereof, the pro rata percentage of the
number of shares of Stock to which a Section 4 Offer relates that each
Stockholder shall be entitled to Transfer to the Section 4 Offeror, and shall be
the percentage figure which expresses the ratio, on a Common Stock Equivalent
Basis, between the number of shares of Stock owned by such Stockholder and the
aggregate number of shares of Stock owned by all Stockholders;
(c) for the purposes of Section 5 hereof, the pro rata percentage of
Common Stock being designated by the Corporation pursuant to Section 5 that each
Investor shall be entitled to
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purchase, and shall be the percentage figure which expresses the ratio, on a
Common Stock Equivalent Basis, between the number of shares of Stock owned by
such Investor and the aggregate number of shares of Stock owned by all
Investors, at the date of determination;
(d) for the purposes of Section 6 hereof, the pro rata percentage of Stock
subject to purchase pursuant to Section 6 that each Preferred Stockholder shall
be entitled to purchase, and shall be the percentage figure which expresses the
ratio, on a Common Stock Equivalent Basis, between the number of shares of Stock
owned by such Preferred Stockholder and the aggregate number of shares of Stock
owned by all Preferred Stockholders, at the date of determination; and
(e) for the purposes of Section 7 hereof, the pro rata percentage of
Non-Purchased Put Shares subject to purchase during the Stockholder Put Period
pursuant to Section 7 that each Investor (other than GRP) shall be entitled to
purchase, and shall be the percentage figure which expresses the ratio, on a
Common Stock Equivalent Basis, between the number of shares of Stock owned by
such Investor and the aggregate number of Shares of Stock owned by all Investors
(other than GRP), at the date of determination.
"Put Fair Market Value" shall have the meaning set forth in Section
7(a)(ii) hereof.
"Put FMV Determination Date" shall have the meaning set forth in Section
7(a)(ii) hereof.
"Put Period" shall have the meaning set forth in Section 7(a) hereof.
"Put Purchase Price per Put Share" shall have the meaning set forth in
Section 7(a)(v) hereof.
"Put Repurchase Right" shall have the meaning set forth in Section
7(a)(iv) hereof.
"Put Reallocation Notice" shall have the meaning set forth in Section 7(b)
hereof.
"Put Shares" shall have the meaning set forth in Section 7(a) hereof.
"Qualified Investor" shall have the meaning set forth in Section 8(b)
hereof.
"Qualified Public Offering" shall have the meaning set forth in the
Certificate.
"Refused Securities" shall have the meaning set forth in Section 6(d)
hereof.
"Registration Rights Agreement" means that certain Fourth Amended and
Restated Registration Rights Agreement, dated as of the date hereof, among the
Corporation and Investors.
"Regulated Investor" shall have the meaning set forth in Section 11(a)(i)
hereof.
"Regulatory Sideletter" means that certain Regulatory Sideletter, dated
August 10, 2001, among the Corporation, X.X. Xxxxxx and Xxxxx Fargo and attached
hereto as Exhibit A.
"Repurchase Designation" shall have the meaning set forth in Section
5(a)(ii) hereof.
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"Repurchase Event" shall have the meaning set forth in Section 5(a)
hereof.
"Repurchase Notice" shall have the meaning set forth in Section 5(a)(i)
hereof.
"Repurchase Period" shall have the meaning set forth in Section 5(a)(i)
hereof.
"Repurchase Right" shall have the meaning set forth in Section 5(a)(i)
hereof.
"Repurchase Shares" shall have the meaning set forth in Section 5(a)(i)
hereof.
"Requisite Designated Preferred Stockholders" shall have the meaning set
forth in the Certificate.
"Sale of the Corporation" means (i) a sale of all or substantially all of
the assets of the Corporation, (ii) any merger or other business combination
unless in any such case the Corporation's stockholders immediately prior to such
transaction hold more than fifty percent (50%) of the equity of the surviving
entity and the certificate of incorporation or other similar instrument provides
for the preservation of substantially all of the relative rights and preferences
of the Series A Preferred Stock, the Series A-1 Preferred Stock, the Series A-2
Preferred Stock, the Series B Preferred Stock, the Series B-1 Preferred Stock,
the Series C Preferred Stock, the Series C-1 Preferred Stock, the Series C-2
Preferred Stock and the Series C-3 Preferred Stock or (iii) a sale of capital
stock or other securities of the Corporation possessing the voting power to
elect a majority of the Board (whether by merger, consolidation or issuance,
sale or transfer of the Corporation's capital stock).
"Sale Period" shall have the meaning set forth in Section 7(d)(iii)
hereof.
"Sale Price" shall have the meaning set forth in Section 7(d)(vi) hereof.
"Sale Request" shall have the meaning set forth in Section 7(a) hereof.
"Second Potential Put Closing Date" shall have the meaning set forth in
Section 7(f) hereof.
"Section 3 Offer" shall have the meaning set forth in Section 3(a) hereof.
"Section 3 Offer Notice" shall have the meaning set forth in Section 3(a)
hereof.
"Section 4 Notice" shall have the meaning set forth in Section 4(a)
hereof.
"Section 4 Offer" shall have the meaning set forth in Section 4(a) hereof.
"Section 4 Offeree" shall have the meaning set forth in Section 4(a)
hereof.
"Section 4 Offeror" shall have the meaning set forth in Section 4(a)
hereof.
"Section 7 Put Offer" shall have the meaning set forth in Section 7(a)(i)
hereof.
"Section 7 Put Offer Notice" shall have the meaning set forth in Section
7(a)(i) hereof.
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"Securities Act" means the Securities Act of 1933 or any successor Federal
statute, and the rules and regulations of the U.S. Securities and Exchange
Commission thereunder, all as the same shall be in effect from time to time.
"Selling Group" means a Stockholder or a member of the Group of a
Stockholder proposing to Transfer its Stock, or which has delivered a notice of
intention to Transfer, pursuant to Section 3 hereof.
"Series A Preferred Stock" means the Convertible Series A Participating
Preferred Stock, $.01 par value per share, of the Corporation.
"Series A-1 Preferred Stock" means the Convertible Series A-1
Participating Preferred Stock, $.01 par value per share, of the Corporation.
"Series A-2 Preferred Stock" means the Convertible Series A-2
Participating Preferred Stock, $.01 par value per share, of the Corporation.
"Series A Stockholders" means the holders of the Series A Preferred Stock,
and shall include any successor to, or assignee or transferee of Series A
Preferred Stock of any of the Series A Stockholders (in accordance with the
terms of this Agreement) who shall agree in writing to be treated as a Series A
Stockholder and to be bound by the terms and to comply with the provisions of
this Agreement.
"Series A-1 Stockholders" means the holders of the Series A-1 Preferred
Stock, and shall include any successor to, or assignee or transferee of Series
A-1 Preferred Stock of any of the Series A-1 Stockholders (in accordance with
the terms of this Agreement) who shall agree in writing to be treated as a
Series A-1 Stockholder and to be bound by the terms and to comply with the
provisions of this Agreement.
"Series A-2 Stockholders" means the holders of the Series A-2 Preferred
Stock, and shall include any successor to, or assignee or transferee of Series
A-2 Preferred Stock of any of the Series A-2 Stockholders (in accordance with
the terms of this Agreement) who shall agree in writing to be treated as a
Series A-2 Stockholder and to be bound by the terms and to comply with the
provisions of this Agreement.
"Series B Preferred Stock" means the Convertible Series B Participating
Preferred Stock, $.01 par value per share, of the Corporation.
"Series B-1 Preferred Stock" means the Convertible Series B-1
Participating Preferred Stock, $.01 par value per share, of the Corporation.
"Series B Stockholders" means the holders of the Series B Preferred Stock,
and shall include any successor to, or assignee or transferee of Series B
Preferred Stock of any of the Series B Stockholders (in accordance with the
terms of this Agreement) who shall agree in writing to be treated as a Series B
Stockholder and to be bound by the terms and to comply with the provisions of
this Agreement.
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"Series B-1 Stockholders" means the holders of the Series B-1 Preferred
Stock, and shall include any successor to, or assignee or transferee of Series
B-1 Preferred Stock of any of the Series B-1 Stockholders (in accordance with
the terms of this Agreement) who shall agree in writing to be treated as a
Series B-1 Stockholder and to be bound by the terms and to comply with the
provisions of this Agreement.
"Series C Preferred Stock" means the Convertible Series C Preferred Stock,
$.01 par value per share, of the Corporation.
"Series C-1 Preferred Stock" means the Convertible Series C-1 Preferred
Stock, $.01 par value per share, of the Corporation.
"Series C-2 Preferred Stock" means the Convertible Series C-2 Preferred
Stock, $.01 par value per share, of the Corporation.
"Series C-3 Preferred Stock" means the Convertible Series C-3 Preferred
Stock, $.01 par value per share, of the Corporation.
"Series C-1 Securities Purchase Agreement" shall have the meaning set
forth in the third recital hereto.
"Series C-2 Securities Purchase Agreement" shall have the meaning set
forth in the second recital hereto.
"Series C Stockholders" means the holders of the Series C Preferred Stock,
and shall include any successor to, or assignee or transferee of Series C
Preferred Stock of any of the Series C Stockholders (in accordance with the
terms of this Agreement) who shall agree in writing to be treated as a Series C
Stockholder and to be bound by the terms and to comply with the provisions of
this Agreement.
"Series C-1 Stockholders" means the holders of the Series C-1 Preferred
Stock, and shall include any successor to, or assignee or transferee of Series
C-1 Preferred Stock of any of the Series C-1 Stockholders (in accordance with
the terms of this Agreement) who shall agree in writing to be treated as a
Series C-1 Stockholder and to be bound by the terms and to comply with the
provisions of this Agreement.
"Series C-2 Stockholders" means the holders of the Series C-2 Preferred
Stock, and shall include any successor to, or assignee or transferee of Series
C-2 Preferred Stock of any of the Series C-2 Stockholders (in accordance with
the terms of this Agreement) who shall agree in writing to be treated as a
Series C-2 Stockholder and to be bound by the terms and to comply with the
provisions of this Agreement.
"Series C-3 Stockholders" means the holders of the Series C-3 Preferred
Stock, and shall include any successor to, or assignee or transferee of Series
C-3 Preferred Stock of any of the Series C-3 Stockholders (in accordance with
the terms of this Agreement) who shall agree in writing to be treated as a
Series C-3 Stockholder and to be bound by the terms and to comply with the
provisions of this Agreement.
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Stockholders' Agreement
11
"Stock" means (i) the presently issued and outstanding shares of Common
Stock, Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2
Preferred Stock, Series B Preferred Stock, Series B-1 Preferred Stock, Series C
Preferred Stock, Series C-1 Preferred Stock, Series C-2 Preferred Stock and
Series C-3 Preferred Stock and any options or stock subscription warrants
exercisable therefor (which options and warrants shall be deemed to be that
number of outstanding shares of Stock for which they are exercisable), (ii) any
additional shares of capital stock of the Corporation hereafter issued and
outstanding and (iii) any shares of capital stock of the Corporation into which
such shares may be converted or for which they may be exchanged or exercised.
"Stockholder Put Period" shall have the meaning set forth in Section 7(b)
hereof.
"Stockholders" means those persons identified on Annex I and shall include
all Series A Stockholders, Series A-1 Stockholders, the Series A-2 Stockholder,
Series B Stockholders, Series B-1 Stockholders, Series C Stockholders, Series
C-1 Stockholders, Series C-2 Stockholders, Series C-3 Stockholders and Common
Stockholders and any other person who agrees in writing with the Parties hereto
to be bound by and to comply with all applicable provisions of this Agreement as
a Stockholder hereunder.
"Stock Option Plan" means the Corporation's 2001 Stock Option Plan, as
amended from time to time.
"Stock Purchase Agreements" shall have the meaning in the first recital
hereto.
"Subsidiary" means with respect to any Person ("Owner"), a Person of which
the Owner or one or more of its Subsidiaries holds securities or other interests
having the power to elect a majority of that Person's board of directors or
similar governing body, or otherwise having the power to direct the business and
policies of that Person (other than securities or other interests having such
power only upon the happening of some contingency that has not occurred).
"Third Party Offer" shall have the meaning set forth in Section 7(d)(v)
hereof.
"Transfer", as to any Stock, means to sell, or in any other way transfer,
assign, pledge, distribute, encumber or otherwise dispose of, such Stock, either
voluntarily or involuntarily and with or without consideration.
"Xxxxx Fargo" means Xxxxx Fargo Small Business Investment Company, Inc.
"Xxxxx Financial" means Xxxxx Fargo Financial, Inc.
"WF Director" shall have the meaning set forth in Section 10(a)(ii)
hereof.
"WFS" shall mean WFS Web Investments.
"WFS Director" shall have the meaning set forth in Section 10(a)(v)
hereof.
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Stockholders' Agreement
12
SECTION 2. LIMITATIONS ON TRANSFERS OF STOCK AND INVESTMENTS IN
COMPETITORS.
(a) During the term of this Agreement, no Stockholder shall Transfer
any Stock (i) unless such Transfer is in accordance with all applicable
securities laws or pursuant to an exemption therefrom and (ii) without first
complying with the provisions of this Section 2. Any Transfer or attempted
Transfer of any Stock in violation of any of the provisions of this Section 2
shall be void, and the Corporation shall not record such Transfer on its books
or treat any purported transferee of such Stock as the owner of such Stock for
any purpose. In furtherance and not in limitation of the foregoing, no Transfer
of Stock shall become effective unless and until the transferee executes and
delivers to the Corporation a Joinder to this Agreement pursuant to Section 16
below (a "Joinder"), agreeing to be treated in the same manner as the
transferring Stockholder (i.e., as a Preferred Stockholder, a Management
Stockholder or a Common Stockholder), with respect to the Stock so Transferred.
(b) Except as permitted by Section 5 of the Regulatory Sideletter,
prior to August 10, 2003, no Preferred Stockholder shall Transfer any shares of
Stock, whether voluntarily, by operation of law or otherwise, without the prior
approval of the Board; provided, however, that a Preferred Stockholder may make
an Exempt Transfer of Stock without such prior approval of the Board if the
recipient of such stock shall agree in writing with the Parties to this
Agreement to be bound by and to comply with all applicable provisions of this
Agreement and to be deemed a Preferred Stockholder.
(c) In addition to and not in limitation of Sections 2(a) and (b),
during the term of this Agreement:
(i) each Stockholder shall not, at any time during the term of
this Agreement, Transfer any Stock without first complying with the provisions
of Section 3; provided, that a Stockholder may make an Exempt Transfer of Stock
without complying with Section 3 if the recipient of such Stock shall agree in
writing with the Parties to this Agreement to be bound by and to comply with all
applicable provisions of this Agreement and to be deemed a Preferred
Stockholder, a Management Stockholder or a Common Stockholder, as the case may
be; and
(ii) each Preferred Stockholder shall not, at any time during
the term of this Agreement, Transfer any Stock without first complying with the
provisions of Section 4; provided, that a Preferred Stockholder may make an
Exempt Transfer of Stock without complying with Section 4 if the recipient of
such Stock shall agree in writing with the Parties to this Agreement to be bound
by and to comply with all applicable provisions of this Agreement and to be
deemed a Preferred Stockholder.
(d) Notwithstanding the foregoing, no Stockholder shall, at any time
during the term of this Agreement, Transfer any Stock to any competitor of the
Corporation (whether such Person is a competitor to be determined in good faith
by the Board) unless, in the case of a Preferred Stockholder, the proposed
recipient of such Stock is a Subsidiary of the ultimate parent entity of such
Preferred Stockholder or the ultimate parent entity of such Preferred
Stockholder.
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Stockholders' Agreement
13
In addition, the provisions of this Agreement shall in any case be subject in
all respects to the rights and restrictions contained in the Certificate and the
By-Laws.
SECTION 3. RIGHT OF FIRST REFUSAL.
Except as otherwise provided in Section 2, each Stockholder hereby
agrees that he or it shall not Transfer any Stock (other than Exempt Transfers),
except in accordance with the following procedures:
(a) In the event such Stockholder receives and determines to accept
a bona fide arms length offer from a Person who is not an Affiliate of such
Stockholder to acquire any Stock of such Stockholder, the Selling Group shall
first deliver to the Corporation and each other Stockholder a written notice
(the "Section 3 Offer Notice"), which shall be irrevocable for a period of 15
Business Days after delivery thereof, offering (the "Section 3 Offer") all of
the Stock proposed to be Transferred by the Selling Group at the purchase price
and on the terms specified therein (such Notice of Offer shall include the
foregoing information and all other relevant terms of the proposed Transfer).
The Corporation shall have the right and option, for a period of 5 Business Days
after receipt of the Section 3 Offer Notice, to accept all, but not less than
all, of the Stock so offered at the purchase price and on the terms stated in
the Section 3 Offer Notice. Such acceptance shall be made by delivering a
written notice to the Selling Group within said 5 Business Day period.
(b) If the Corporation fails to accept all of the Stock offered for
sale pursuant to, or shall reject in writing, the Section 3 Offer, then the
other Stockholders shall have the right and option, for a period of 10 Business
Days after the expiration of the 5 Business Day period in Section 3(a), to
accept all, but not less than all, of the Stock so offered at the purchase price
and on the terms stated in the Section 3 Offer Notice. Each Stockholder may
exercise such purchase option and purchase all or any portion of its
Proportionate Percentage of the Stock, by notifying the Corporation and the
Selling Group in writing within 10 Business Days as to the shares of Stock (up
to its full Proportionate Percentage) that it wishes to purchase. If one or more
of the Stockholders do not fully exercise their right to purchase their
respective Proportionate Percentage of the Stock pursuant to this subparagraph
(b), the Corporation shall give written notice (the "Reallocation Notice")
within 2 Business Days to all Stockholders, including the Selling Group of such
fact, and the Stockholders who have elected to exercise their rights to purchase
all of their Proportionate Percentage of the Stock pursuant to this subparagraph
(b) (the "Participating Offerees") shall have the opportunity to purchase all of
the shares of Stock with respect to which the right to purchase was not
exercised pursuant to this subparagraph (b) (the "Non-Allocated Stock"). The
Participating Offerees shall negotiate in good faith a written agreement with
each other as to the reallocation of the right to purchase the Non-Allocated
Stock and any such agreement shall be final and binding for purposes of this
Section 3; provided, however, that if the Participating Offerees cannot agree as
to the appropriate reallocation of such Non-Allocated Stock within 3 Business
Days after receipt of the Reallocation Notice, because one or more Participating
Offerees desire to purchase more than their respective pro rata share of the
Non-Allocated Stock, then the portion of the Non-Allocated Stock that each such
Participating Offeree shall be entitled to purchase shall be reduced in
proportion to its respective outstanding ownership interest in the Corporation
on the date of the Reallocation Notice until the sum of the amounts allocated to
the Participating Offerees is equal in total to the Non-Allocated
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Stockholders' Agreement
14
Stock; provided further, that such Participating Offeree that desires to
purchase up to its full pro rata share of the Non-Allocated Stock shall be
allocated the amount it desires to purchase. For purposes of this subparagraph
(b), each Participating Offeree's pro rata share shall be a fraction of the
Non-Allocated Stock, the numerator of which is the shares of Common Stock, on a
Common Stock Equivalent Basis, on the date of the Reallocation Notice held by
each Participating Offeree who desires to purchase any portion of the
Non-Allocated Stock and the denominator of which is the sum of the shares of
Common Stock, on a Common Stock Equivalent Basis, of all such Participating
Offerees. The Participating Offerees shall have until the end of the 10 Business
Day period specified in the first sentence of this subparagraph (b) to accept
all, but not less than all, of the Stock and to deliver to the Corporation and
the Selling Group a written agreement with respect to the purchase of the
Non-Allocated Stock pursuant to the terms of this subparagraph (b).
(c) A notice of acceptance delivered by either the Corporation or a
Stockholder, as the case may be, pursuant to Section 3(a) or Section 3(b), shall
be an irrevocable and binding commitment to purchase the Stock referred to
therein.
(d) Transfers of Stock under the terms of Sections 3(a) and 3(b)
shall be made at the offices of the Corporation on a mutually satisfactory
Business Day within 10 days after the expiration of the last applicable period
described in Section 3(b) above. Delivery of certificates or other instruments
evidencing such Stock duly endorsed for transfer shall be made on such date
against payment of the purchase price therefor.
(e) If effective acceptance shall not be received pursuant to
Sections 3(a) or 3(b) with respect to all Stock offered for sale pursuant to the
Section 3 Offer Notice, then the Selling Group may Transfer all, but not less
than all, of the Stock so offered and not so accepted, but only in compliance
with Section 2(b) hereof and upon terms and conditions in all material respects,
including, without limitation, price and interest rates, which are no more
favorable, in the aggregate, to the purchaser thereof than those set forth in
the Section 3 Offer Notice, at any time within 90 days after the expiration of
the offer required by Sections 3(a) and 3(b). In the event that the Stock is not
Transferred by the Selling Group during such 90-day period, the right of the
Selling Group to Transfer such Stock shall expire and the obligations of this
Section 3 shall be reinstated.
SECTION 4. RIGHT OF CO-SALE.
(a) In the event that any Preferred Stockholder (hereinafter, the
"Section 4 Offeree") receives and determines to accept a bona fide arms length
offer (the "Section 4 Offer") from a third party that is not an Affiliate of
such Preferred Stockholder (the "Section 4 Offeror") to purchase all or any
portion of the shares of Stock held by such Preferred Stockholder (other than
Exempt Transfers) for a specified price payable in cash or otherwise and on
specified terms and conditions, such Section 4 Offeree shall promptly forward a
notice complying with Section 4(b) (the "Section 4 Notice") to the other
Stockholders. Subject to Section 4(c), the Section 4 Offeree shall not Transfer
any Stock to the Section 4 Offeror unless the terms of the Section 4 Offer are
extended to the other Stockholders with respect to their Proportionate
Percentage of the aggregate number of shares of Stock to which the Section 4
Offer relates, whereupon each other Stockholder shall be entitled to Transfer to
the Section 4 Offeror pursuant to the Section 4 Offer,
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Stockholders' Agreement
15
such other Stockholder's Proportionate Percentage of the aggregate number of
shares of Stock to which the Section 4 Offer relates.
(b) The Section 4 Notice shall set forth (i) the number of shares of
Stock to which the Section 4 Offer relates and the name of the Section 4
Offeree, (ii) the name and address of the Section 4 Offeror, (iii) the proposed
amount and type of consideration (including, if the consideration consists in
whole or in part of non-cash consideration, such information available to the
Section 4 Offeree as may be reasonably necessary for the Stockholders to
properly analyze the economic value and investment risk of such non-cash
consideration) and the terms and conditions of payment offered by the Section 4
Offeror and (iv) that the Section 4 Offeror has been informed of the co-sale
rights provided for in this Section 4 and has agreed to purchase Stock in
accordance with the terms of this Section 4.
(c) Anything contained herein to the contrary notwithstanding, but
subject to Section 2, the Section 4 Offeree shall, in addition to complying with
the provisions of this Section 4, comply with the provisions of Section 3 (it
being understood that the Section 3 Offer Notice contemplated by Section 3(a)
and the Section 4 Notice may be included in a single notice), and each
Stockholder, prior to Transferring any Stock to the Section 4 Offeror, shall
comply with the provisions of Section 3.
SECTION 5. REPURCHASE RIGHT.
(a) Repurchase of Common Stock in the Event of Termination of
Employment. In the event of a termination of a Management Stockholder's
employment by or service to the Corporation for any reason whatsoever other than
the death of such Management Stockholder (a "Repurchase Event"), such Management
Stockholder and the transferee(s) thereof following an Exempt Transfer pursuant
to the terms of this Agreement, if any (collectively, the "Management Group"),
shall be required to offer to sell to the Corporation and its Designees (as
defined below, and collectively with the Corporation, the "Corporation Group")
the Common Stock held by such Management Group pursuant to the terms of this
Section 5.
(i) In the event a Repurchase Event occurs, the Corporation
shall have the right (but not the obligation) (the "Repurchase Right")
during the 90-day period following such Repurchase Event (the "Repurchase
Period") to purchase all or any portion of all of the Stock held by the
Management Group (the "Repurchase Shares") in accordance with the
provisions of this Section 5(a). During the Repurchase Period, the
Corporation shall provide written notice of the occurrence of a Repurchase
Event to the Board and the Management Group, which notice shall include
the number of Repurchase Shares held by the Management Group (the
"Repurchase Notice"). The Corporation shall, as promptly as practicable
after a Repurchase Event, provide written notice to the Management Group
of the determination of the Fair Market Value of the Repurchase Shares,
with the date of determination thereof pursuant to the terms of this
Agreement being hereinafter referred to as the "FMV Determination Date."
The Corporation may initially elect to purchase all, or any portion, of
the Repurchase Shares at a price equal to the Fair Market Value thereof by
delivering a written notice of such election to the Management Group at
any time during the Repurchase Period; provided, however, that in the
event of a Repurchase Event caused by the termination for Cause of the
Management
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Stockholders' Agreement
16
Stockholder, the purchase price of the Repurchase Shares shall be equal to
the lower of the Original Cost and the Fair Market Value thereof; provided
further, however, that the Corporation's right to repurchase the Stock at
the lower of Original Cost and the Fair Market Value shall lapse at the
rate of 20% of the shares of Stock per year from the date the option to
purchase such shares of Stock was granted (without respect to the date the
option was exercised or became exercisable). Notwithstanding the
foregoing, the Corporation's Repurchase Right shall expire on the date the
Corporation's securities become publicly traded.
(ii) If the Corporation elects to purchase less than all of
the Repurchase Shares, the Corporation shall be permitted to designate
(the "Repurchase Designation") to one or more designees (each, a
"Designee") the right (but not the obligation) to purchase from the
Management Group the Repurchase Shares not being purchased by the
Corporation (such shares being the "Designated Shares"), subject to terms
of this paragraph and Section 16 below. The Corporation shall, as promptly
as practicable after a Repurchase Designation, provide written notice (the
"Designation Notice") to each Investor of the number of Designated Shares,
the name and address of each Designee and the Fair Market Value of the
Designated Shares. Each Investor may elect to purchase up to such
Investor's Proportionate Percentage of the Designated Shares at a price
equal to the purchase price for such Designated Shares determined pursuant
to Section 5(a)(i) above by delivering a written notice of such election
(the "Election Notice") to the Corporation within 10 Business Days of
receipt of the Designation Notice. If the Corporation receives an Election
Notice from an Investor, then the Corporation shall designate to such
Investor the right to purchase that number of Designated Shares set forth
in the Election Notice, subject to the limitations set forth in the
preceding sentence. The number of Repurchase Shares shall be reduced by
the aggregate number of Designated Shares set forth in the Election
Notices, if any, received by the Corporation from the Investors. Each
Designee shall only be permitted to purchase the number of Repurchase
Shares (if any) equal to such Designee's pro rata portion of the aggregate
number of Designated Shares, minus the aggregate number of shares for
which Election Notices were received by the Corporation.
(iii) The number of shares of Stock to be purchased by the
Corporation, the Designees and/or the Investors (as applicable) shall
first be satisfied to the extent possible from the Repurchase Shares held
by the Management Stockholder at the time of the distribution by the
Corporation of the Repurchase Notice. If the number of Repurchase Shares
then held by the Management Stockholder is less than the total number of
Repurchase Shares the Corporation, the Designees and/or the Investors (as
applicable) have elected to purchase, the Corporation, the Designees
and/or the Investors (as applicable) shall purchase the remaining
Repurchase Shares elected to be purchased from the other members of the
Management Group pro rata according to the number of Repurchase Shares
held by such other members of the Management Group at the time of
distribution of such Repurchase Notice (determined as nearly as
practicable to the nearest share).
(b) Repurchase Upon Death of Management Stockholder. In the event of
the death of any Management Stockholder (including a death that occurs while the
Management
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Stockholders' Agreement
17
Stockholder is employed or retained by the Corporation or an Affiliate thereof)
(a "Decedent"), the provisions of paragraph (a) above shall apply as if a
Repurchase Event had occurred; provided, however, that (i) the Repurchase Notice
required to be delivered by the Corporation to the Board shall be delivered to
the personal representative of the Decedent promptly after being appointed as
such, (ii) the Management Stockholder, for purposes of Section 5(a) above, shall
be the Decedent's personal representative and (iii) the Management Group shall
include the Decedent and the transferee(s) thereof following an Exempt Transfer.
The Corporation may, at its option, maintain life insurance on the lives of any
Management Stockholder for the purpose of financing the acquisition of all or a
portion of Shares being repurchased from such Management Stockholder pursuant to
this Section 5(b). The proceeds of any such life insurance (the "Life Insurance
Proceeds") shall be payable to the Corporation. Each Management Stockholder
agrees to reasonably cooperate with the Corporation in connection with obtaining
any such life insurance.
(c) Payment of Purchase Price.
(i) In the event that the Corporation terminates the
Management Stockholder's employment or service without Cause, the purchase
price payable by the Corporation, the Designees and/or the Investors (as
applicable) pursuant to Section 5(a) or (b) above shall be payable in cash
within 90 days after delivery of the Repurchase Notice.
(ii) In the event that the Management Stockholder terminates
his employment with the Corporation or the Corporation terminates such
employment for Cause, the purchase price payable by the Corporation, the
Designees and/or the Investors (as applicable) pursuant to Section 5(a) or
(b) above shall be payable as follows:
(A) 33.33% in cash within 90 days after delivery of the
Repurchase Notice; and
(B) the remaining portion in the form of a
non-negotiable promissory note delivered within 90 days after
delivery of the Repurchase Notice and payable to the order of the
applicable members of the Management Group which note shall be (1)
dated the date of the closing of the sale transaction, bearing
interest at the prime rate reported by The Chase Manhattan Bank,
N.A. (or the successor thereto) in the Wall Street Journal as of
such date, (2) payable in three equal annual installments of
principal and interest accrued thereon payable on the anniversary of
the date of the note, (3) prepayable at any time without premium,
prepayments to be applied to payments of principal and then interest
next due and (4) subordinated to any funded indebtedness of the
Corporation.
(d) Restrictions on Repurchases. Anything contained in this
Agreement to the contrary notwithstanding, all repurchases of shares of Common
Stock by the Corporation, the Designees and/or the Investors pursuant to this
Section 5 shall be subject to applicable restrictions contained in federal law,
the law of any other applicable jurisdiction and in the Corporation's debt and
equity financing agreements. Anything contained in this Agreement to the
contrary notwithstanding, if any such restrictions prohibit or otherwise delay
the repurchase
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Stockholders' Agreement
18
of shares of Common Stock or any payment of money in connection therewith
pursuant to this Section 5 which the Corporation is otherwise entitled or
required to make, the Corporation may make such repurchases or such payments
within thirty (30) days of the date that it is permitted to do so without
violating such restrictions, and the Repurchase Period shall be deemed extended
until such time.
(e) Fair Market Value of Stock.
(i) Disputes. If the Management Stockholder subject to the
Repurchase Event disputes the Fair Market Value of the Common Stock, then
the Parties shall negotiate the Fair Market Value of the Common Stock in
good faith. If the Parties cannot agree on the Fair Market Value of the
Common Stock within 10 days of the initial dispute, then the Fair Market
Value shall be determined by an independent appraiser, experienced in
valuing businesses comparable to the business of the Corporation. Such
appraiser shall be selected by an agreement of the Corporation and such
Management Stockholder acting in good faith or, if the Parties are unable
to agree, then each of the Parties shall select an appraiser meeting the
requirements of the preceding sentence, and the two appraisers so selected
shall jointly select a third appraiser, also meeting the requirements of
the preceding sentence, which third appraiser (and not the other two)
shall perform the appraisal. If either party fails to appoint an appraiser
within 10 days after receipt of a written demand from the other party to
do so, the appraisal will be conducted by the appraiser selected by the
party making the demand. Within 30 days of the date the appraiser is
selected in accordance with the terms of this definition, such appraiser
shall make a determination of the Fair Market Value. The decision of such
appraiser shall be final and binding. The costs and expenses of
determining the Fair Market Value shall be paid equally by the Management
Stockholder that is subject to the Repurchase Event, on the one hand, and
the party or Parties purchasing such Management Stockholder's Stock, on
the other hand.
(ii) No Liability. Neither the Corporation nor any officer,
director, employee or agent of the Corporation shall have any liability
with respect to valuation of Common Stock that are bought or sold at the
Fair Market Value, as determined pursuant to this Agreement, even though
the Fair Market Value, as so determined, may be more or less than actual
fair market value, and shall be fully protected in relying in good faith
upon the records of the Corporation and upon information, opinions,
reports or statements presented to the Corporation by any Person as to
matters which the Corporation or such director, officer, employee or agent
reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf
of the Corporation.
(f) Consents and Approvals. In the event that shares of Common Stock
are repurchased pursuant to this Section 5, the Management Group and the
purchasers thereof and their respective successors, assigns and representatives
shall take all steps necessary or desirable to obtain, at their sole cost and
expense, all required third-party, governmental and regulatory consents and
approvals (including, without limitation, any actions required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended) and shall take
all other actions necessary or desirable to facilitate consummation of such
repurchase in a timely manner.
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Stockholders' Agreement
19
(g) Inapplicability of Certain Sections. In the event that a
separate written agreement between the Corporation and a Management Stockholder
contains a repurchase right with respect to such Management Stockholder's Stock,
Sections 5(a), (b), (c), (d) and (f) shall not apply to such Management
Stockholder's Stock and the provisions contained in such separate written
agreement shall control and supercede such Sections with respect to such
Management Stockholder's Stock.
SECTION 6. PREEMPTIVE RIGHTS.
(a) Except in the case of Excluded Securities (as defined in Section
6(f) below), the Corporation shall not issue, sell or exchange, agree to issue,
sell or exchange, or reserve or set aside for issuance, sale or exchange, (i)
any Stock, (ii) any other equity security of the Corporation or any instrument
or contractual right, whether or not vested or immediately exercisable which
represents an interest in the Corporation which entitles the holder hereof to
receive capital stock or a return on such interest similar to capital stock
(including but not limited to phantom stock or stock appreciation rights), (iii)
any debt security of the Corporation which by its terms is convertible into or
exchangeable for any equity security of the Corporation or has any other equity
feature, (iv) any security of the Corporation that is a combination of a debt
and equity security or (v) any option, warrant or other right to subscribe for,
purchase or otherwise acquire any security of the Corporation specified in the
foregoing clauses (i) through (iv) (an "Equity Financing"), unless in each case
the Corporation shall have first offered to sell to each Investor such
Investor's Proportionate Percentage of such securities (the "Offered
Securities"), at a price and on such other material terms and conditions as
shall have been specified by the Corporation in writing and delivered to each
Investor (the "Offer"), which Offer by its terms shall remain open and
irrevocable for a period of 15 Business Days from the date it is delivered by
the Corporation to the Investor.
(b) Notice of each Investor's intention to accept, in whole or in
part, an Offer shall be evidenced by a writing signed by such Investor and
delivered to the Corporation prior to the end of the 15 Business Day period of
such Offer, setting forth such portion of the Offered Securities as such
Investor elects to purchase (the "Notice of Acceptance").
(c) In the event that Notices of Acceptance are given by the
Investors in respect of all the Offered Securities, the Investors shall purchase
from the Corporation, and the Corporation shall sell to the Investors, the
Offered Securities in respect of which Notices of Acceptance were delivered to
the Corporation by the Investors, at the terms specified in the Offer, within 15
Business Days of the expiration of the 15 Business Day period set forth in
Section 6(b) above.
(d) In the event that Notices of Acceptance are not given by the
Investors in respect of all the Offered Securities, the Corporation shall have
90 days from the expiration of the 15 Business Day period set forth in Section
6(b) above to sell all or any part of such Offered Securities as to which
Notices of Acceptance have not been given by the Investor (the "Refused
Securities") to any other person or persons, but only upon terms and conditions
in all material respects, including, without limitation, price and interest
rates, which are no more favorable, in the aggregate, to such other person or
persons and no less favorable to the Corporation than those set forth in the
Offer. Upon the closing of the sale to such other Person or Persons of the
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Stockholders' Agreement
20
Refused Securities, which shall occur at a time within 10 Business Days of the
expiration of such 15 Business Day period that is acceptable to the Corporation
and a majority of the participating Investors and which shall include full
payment to the Corporation, the Investors shall purchase from the Corporation,
and the Corporation shall sell to the Investors, the Offered Securities in
respect of which Notices of Acceptance were delivered to the Corporation by the
Investors, at the terms specified in the Offer, within 15 Business Days of the
expiration of the 15 Business Day period set forth in Section 6(b) above.
(e) Any Offered Securities offered under the circumstances described
in clause (a) above and not purchased by the Investors or any other person or
persons in accordance with Section 6(c) or (d) may not be sold or otherwise
disposed of until they are again offered to the Investors under the procedures
specified in Sections 6(a), (b), (c) or (d).
(f) The rights of the Investors under this Section 6 shall not apply
to issuances of the following securities (the "Excluded Securities"):
(i) up to 1,632,625 shares (as adjusted equitably for stock
splits, stock dividends and the like) of Common Stock issuable upon
exercise of stock options or pursuant to stock purchase agreements (the
issuance of which was duly approved by the Board) granted to or entered
into with officers, directors, employees and/or consultants of the
Corporation or its Subsidiaries pursuant to the Stock Option Plan;
(ii) shares of Common Stock issued upon conversion or exercise
of shares of convertible or exercisable securities (other than options or
other securities described in subsection (i) above) outstanding as of the
date hereof;
(iii) shares of Common Stock issued in connection with an
initial public offering;
(iv) shares of Stock issued as the purchase consideration in
connection with any Board-approved merger or business acquisition; and
(v) securities issued as a stock dividend or upon any stock
split or other subdivision or combination of shares of Stock;
SECTION 7. PUT PROVISIONS; SALE OF THE CORPORATION.
(a) Notwithstanding any limitations on Transfers set forth in
Sections 2, 3 and 4 hereof, at any time after April 15, 2007 and prior to April
15, 2008 (the "Put Period"), GRP, provided that (i) GRP, together with its
Affiliates or other members of its Group, holds at least eighty-five (85%)
percent of the Stock of the Corporation held by it as of the Closing Date (as
adjusted for stock splits, stock dividends and the like); (ii) the Put Purchase
Price (as defined below) is at least thirty million dollars ($30,000,000); (iii)
the Corporation has not engaged, or does not have fixed plans to engage within
ninety (90) days of the time of the Section 7 Put Offer Notice (as defined
below), an investment bank of nationally recognized standing to commence a firm
commitment underwritten public offering of Common Stock of the Corporation and
(iv) a recommendation by the Board to the Stockholders to approve a sale of the
Corporation is not then outstanding at the time of the Section 7 Put Offer
Notice, shall have, and is hereby granted,
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Stockholders' Agreement
21
the right and option to request on one occasion (the "Sale Request") that the
Corporation and/or the other Stockholders purchase all, but not less than all,
of the Stock held by GRP and its Affiliates and the other members of its Group
(the "Put Shares") as of the date of the Sale Request upon and subject to the
terms and conditions hereinafter set forth at the Put Purchase Price (as defined
below) per Put Share:
(i) In order to exercise a Sale Request, GRP shall deliver to
the Corporation, who will then forward to each other Investor during the
Put Period a written notice (the "Section 7 Put Offer Notice"), indicating
its desire to sell (the "Section 7 Put Offer") all, but not less than all,
of the Put Shares in accordance with the provisions of this Section 7.
(ii) Upon receipt of the Section 7 Put Offer Notice, the "Put
Fair Market Value" shall be such fair market value of the Corporation on
the date of receipt of the Section 7 Put Offer Notice as shall be agreed
upon between the Corporation, on the one hand, and GRP, on the other hand.
In the absence of such agreement within forty-five (45) days from the
Corporation's receipt of a Section 7 Put Offer Notice (the "Appraiser
Trigger Date"), the Put Fair Market Value shall be determined by an
independent appraiser, selected by mutual agreement of the Corporation and
GRP, acting in good faith. If the parties are unable to agree upon such
appraiser, then each of the Corporation and GRP shall select an appraiser,
and the two appraisers so selected shall jointly select a third appraiser,
which third appraiser (and not the other two) shall perform the appraisal.
If either party fails to appoint an appraiser within fourteen (14) days
after receipt of a written demand from the other party to do so, the
appraisal will be conducted by the appraiser selected by the party making
the demand. Such appraiser shall make a determination of the Put Fair
Market Value as promptly as practicable. The Corporation shall use
commercially reasonable efforts to assist the appraiser in completing its
determination within thirty (30) days of its engagement. Such appraiser
shall value the Corporation by determining the amount a willing buyer
would pay in cash to a willing seller under no compulsion to sell for all
of the shares of Common Stock of the Corporation on a Fully Diluted Basis,
less the reasonably estimated transaction costs that would be incurred in
connection with such a sale (including, without limitation, estimated
investment banking, attorneys and accounting fees, but not taxes). The
decision of such appraiser shall be final and binding. The Corporation and
GRP shall, as promptly as practicable after the determination of the Put
Fair Market Value, provide written notice to the Investors of the
determination of the Put Fair Market Value, the aggregate number of Put
Shares, the Put Purchase Price per Put Share and the aggregate
consideration for the Put Shares, with the date of determination thereof
pursuant to the terms of this Agreement being hereinafter referred to as
the "Put FMV Determination Date."
(a) The costs and expenses of determining the Put Fair Market
Value shall be paid equally by GRP, on the one hand, and the party
or parties purchasing such Put Shares, on the other hand.
(b) In the event that (i) the Put Purchase Price is determined
hereunder to be less than thirty million dollars ($30,000,000) or
(ii) the Put Purchase Price is determined hereunder to be at least
thirty million dollars ($30,000,000) but GRP
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Stockholders' Agreement
22
determines not to extend a written Sale Request within the
applicable period described in the first sentence of subparagraph
(iii) below, then GRP's rights under this Section 7 shall terminate
and the Corporation and the Investors (other than GRP) shall have no
further obligations under this Section 7. Notwithstanding anything
in this Section 7 to the contrary, if either of the events in the
preceding sentence occur, the costs and expenses of determining the
Put Fair Market Value shall be paid by GRP.
(iii) Within ten (10) days after the Put FMV Determination
Date, GRP may extend a written Sale Request to the Corporation (which
shall then notify each other Investor, of such Request) which, if made,
shall be irrevocable during the Corporation Put Period (as defined below)
and the Stockholder Put Period (as defined below).
(iv) If a valid Sale Request has been made by GRP, the
Corporation shall have the exclusive right (but not the obligation) (the
"Put Repurchase Right") during the ninety (90) day period following the
determination of the Put Fair Market Value (as defined below) (the
"Corporation Put Period") to purchase all or any portion of all of the Put
Shares for cash in accordance with the provisions of this Section 7.
(v) The "Put Purchase Price" shall be determined by
multiplying the Put Fair Market Value by a fraction (the "Fraction"), the
numerator of which is the aggregate number of Put Shares then held by GRP
(measured on a Common Stock Equivalent Basis), and the denominator of
which is the aggregate number of shares of Common Stock then outstanding
(determined on a Adjusted Treasury Stock Basis). The "Put Purchase Price
per Put Share" shall be the Put Purchase Price divided by the aggregate
number of Put Shares then held by GRP (measured on a Common Stock
Equivalent Basis).
(vi) The Corporation may elect to purchase all, or any
portion, of the Put Shares at a price equal to the Put Purchase Price per
Put Share by delivering a written notice of such election to GRP and the
other Investors at any time during the Corporation Put Period; provided
that the Corporation shall not be obligated to purchase that portion of
the Put Shares it so elects, if the other Investors do not purchase
pursuant to subparagraph (b) hereof all of the remaining Put Shares not
elected to be purchased by the Corporation.
(b) If the Corporation fails to elect to purchase during the
Corporation Put Period all of the Put Shares offered for sale pursuant to, or
shall reject in writing, the Section 7 Put Offer, then the other Investors shall
have the right (but not the obligation), for a period of thirty (30) days after
the expiration of the Corporation Put Period (the "Stockholder Put Period"), to
accept all, but not less than all, of the remaining Put Shares not purchased by
the Corporation pursuant to subparagraph (a) hereof (the "Non-Purchased Put
Shares") at the Put Purchase Price per Put Share. Each Investor (other than GRP)
may exercise such right and purchase all or any portion of its Proportionate
Percentage of the Non-Purchased Put Shares, by notifying the Corporation in
writing within the twenty (20) day period after the end of the Corporation Put
Period (the "Initial Allocation Period") as to the shares of Non-Purchased Put
Shares (up to its full Proportionate Percentage) that it wishes to purchase. If
one or more of the Investors (other
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Stockholders' Agreement
23
than GRP) do not fully exercise their right to purchase their respective
Proportionate Percentage of the Non-Purchased Put Shares pursuant to this
subparagraph (b), the Corporation shall give written notice (the "Put
Reallocation Notice") within five (5) days after the end of the Initial
Allocation Period to all Investors (other than GRP), and the Investors who have
elected to exercise their rights to purchase all of their Proportionate
Percentage of the Non-Purchased Put Shares pursuant to this subparagraph (b)
(the "Participating Put Offerees") shall have the opportunity to purchase all of
the shares of Stock with respect to which the right to purchase was not
exercised pursuant to this subparagraph (b) (the "Non-Allocated Put Shares"). If
the Non-Allocated Put Shares are oversubscribed for, then the portion of the
Non-Allocated Put Shares that each such Participating Offeree shall be entitled
to purchase shall be reduced in proportion to its respective outstanding
ownership interest in the Corporation on the date of the Put Reallocation Notice
until the sum of the amounts allocated to the Participating Put Offerees is
equal in total to the Non-Allocated Put Shares; provided further, that such
Participating Put Offeree that desires to purchase up to its full pro rata share
of the Non-Allocated Put Shares shall be allocated the amount it desires to
purchase. For purposes of this subparagraph (b), each Participating Put
Offeree's pro rata share shall be a fraction of the Non-Allocated Put Shares,
the numerator of which is the number of shares of Common Stock, on a Common
Stock Equivalent Basis, on the date of delivery of the Put Reallocation Notice
held by such Participating Put Offeree and the denominator of which is the sum
of the number of shares of Common Stock, on a Common Stock Equivalent Basis,
held by all Participating Put Offerees. The Participating Put Offerees shall
have until the end of the Stockholder Put Period to elect to purchase all, but
not less than all, of the Put Shares and to deliver to the Corporation and GRP a
written notice with respect to the purchase of the Non-Purchased Put Shares
(including the Non-Allocated Put Shares) pursuant to the terms of this
subparagraph (b).
(c) A notice of acceptance delivered by either the Corporation or a
Investor (other than GRP), as the case may be, to GRP pursuant to Section 7(a)
or Section 7(b), shall be an irrevocable and binding commitment to purchase the
Put Shares referred to therein; provided that the Corporation and/or the other
Investors, collectively, agree to purchase all, but not less than all, of the
Put Shares from GRP.
(d) If a valid Sale Request has been made by GRP and effective
acceptance shall not be received by GRP pursuant to Sections 7(a) or 7(b) with
respect to all Put Shares offered for sale pursuant to the Section 7 Put Offer
Notice, then (i) notwithstanding anything in this Section 7 to the contrary, the
costs and expenses in determining the Put Fair Market Value shall be paid by the
Corporation and (ii) the Corporation shall retain an independent investment
banker, business broker or other agent of nationally recognized standing
selected by the Board and reasonably satisfactory to GRP (the "Broker") to
attempt during a six (6) month period after the engagement of the Broker (the
"Liquidity Attempt Period") to facilitate either (i) a Qualified Public Offering
or (ii) a Sale of the Corporation as follows:
(i) The Corporation shall enter into an engagement letter with
the Broker within forty-five (45) days after the end of the Stockholder
Put Period.
(ii) After the Corporation enters into an engagement letter
with the Broker, the Corporation shall use commercially reasonable efforts
to cooperate in connection with any potential Qualified Public Offering or
Sale of the Corporation, and
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Stockholders' Agreement
24
the Stockholders agree to comply with the provisions of the Registration
Rights Agreement with respect to a Qualified Public Offering, and with the
provisions of Section 9 hereof, with respect to a Sale of the Corporation,
as applicable. Notwithstanding the foregoing, the Corporation shall afford
to the Broker and prospective purchasers appropriate access to the
management of the Corporation, the Corporation's books and records and the
Corporation 's facilities (it being understood that no party shall be
required to engage in any activity that materially interferes with the
Corporation's business or, on a repeated basis or for an unreasonable
length of time, interferes with an employees regular duties).
(iii) If the Broker obtains a "Third-Party Offer" (as defined
below) during the Liquidity Attempt Period, and the Third-Party Offer is
not accepted by the Corporation and the Stockholders prior to the end of
the Liquidity Attempt Period, or if such Third-Party Offer is received by
the Corporation within sixty (60) days of the end of the Liquidity Attempt
Period, then within sixty (60) days after receipt by the Corporation of
such Third-Party Offer (the "Sale Period"), GRP shall have the option, but
not the obligation, to require the Corporation (and only the Corporation)
to purchase for cash all of the Put Shares then held by GRP at the Put
Purchase Price per Put Share; provided, however, that the Corporation
shall only be obligated to purchase such Put Shares to the extent (i) such
purchase would not cause a violation of, or not result in the Corporation
being in violation of, any Law and (ii) after taking all steps available
to it under Section 154 of the DGCL, the Corporation has sufficient
capital or surplus (as computed in accordance with the DGCL) to make the
purchase required hereunder. The Corporation shall repurchase the
remaining Put Shares, if any, as soon as practicable after the limitations
described in the previous sentence no longer apply, until the
Corporation's then-existing obligations under this Section 7(d)(iii) shall
have been discharged in full. To exercise such option, GRP shall give
notice of such exercise to the Corporation within thirty (30) days after
expiration of the Sale Period. The purchase price for such Put Shares
shall be determined by multiplying the "Sale Price" (as defined below) by
the Fraction.
(iv) In the event that the Corporation complies with the terms
of this Section 7(d) and (i) the Corporation elected to pursue a Qualified
Public Offering, but such Qualified Public Offering does not occur prior
to the end of the Liquidity Attempt Period or (ii) (x) the Corporation
elected to pursue a Sale of the Corporation, but the Corporation does not
receive a Third Party Offer prior to the end of the Liquidity Attempt
Period or (y) the Corporation has used commercially reasonable efforts to
satisfy all closing conditions required of them under the terms of the
Third Party Offer, but such closing conditions are not actually satisfied
by the closing date specified in the Third Party Offer, then GRP shall be
entitled to exercise its registration rights under Section 2 of the
Registration Rights Agreement with respect to all, but not less than all
of its shares and the Corporation shall have no further obligation under
this Section 7 to purchase the Put Shares from GRP.
(v) For purposes of this Section 7, a "Third-Party Offer"
means a bona fide offer (i) presented by the Broker to the Board as a bona
fide offer under the engagement letter, (ii) approved as a bona fide offer
by GRP, (iii) from an unaffiliated
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Stockholders' Agreement
25
third party, (iv) to acquire all of the shares of Stock of the Corporation
at a price and on terms and conditions that are the same for all
Stockholders, subject to confirmatory due diligence and final legal
documentation and no financing conditions, (v) for an amount of cash
and/or freely-tradeable, liquid securities listed on a U.S. national
exchange or quotation system that implies a fair market value of at least
thirty million dollars ($30,000,000) for the Stock (on a Common Stock
Equivalent Basis) then held by GRP, and (vi) which requires the Preferred
Stockholders to give representations, warranties and indemnities only with
respect to their respective organization, authorization, enforceability,
ownership of stock, and noncontravention of contracts customary for a
transaction of such type and not any representations or warranties with
respect to the operations of the Corporation or the Corporation's business
in connection with any Third Party Offer.
(vi) For purposes of this Section 7, the "Sale Price" means
the amount of cash or other consideration permitted under Section 7(d)(v)
that the Person making the Third-Party Offer offers to pay for all the
shares of Stock of the Corporation, less the reasonably estimated
transaction costs to be incurred in connection with such a sale and any
sale of securities received in the transaction (including, without
limitation, estimates of customary investment banking, Broker, attorneys
and accounting fees).
(e) Transfers of Stock under the terms of Sections 7(a) and 7(b)
shall be made at one closing at the offices of the Corporation on a mutually
satisfactory Business Day within thirty (30) days after the expiration of the
last applicable period described in Section 7(b) above (or such longer period
which is reasonably necessary for the requisite parties to receive regulatory
approval) (the "First Potential Put Closing Date"). Each purchaser of the Put
Shares under the terms of Sections 7(a) and 7(b) agrees to pay on the First
Potential Put Closing Date the Put Purchase Price per share for each Put Share
being purchased by such purchaser. Delivery of certificates or other instruments
evidencing such Stock duly endorsed for transfer shall be made on such date
against payment of the purchase price therefor.
(f) Transfers of Stock from GRP to the Corporation under the terms
of Section 7(d)(iii) shall be made at one closing at the offices of the
Corporation on a mutually satisfactory Business Day as soon as commercially
reasonable, but in no event later than six (6) months after the expiration of
the Sale Period (the "Second Potential Put Closing Date"). If the conditions are
met for the Corporation to purchase the Put Shares under the terms of Sections
7(d)(iii), the Corporation agrees to pay on the Second Potential Put Closing
Date the Put Purchase Price per share for each Put Share being purchased by the
Corporation, together with simple interest thereon from the date after the end
of the Sales Period to the Second Potential Put Closing Date at the rate of
eight (8%) percent per annum. Delivery of certificates or other instruments
evidencing such Stock duly endorsed for transfer shall be made on such date
against payment of the purchase price therefor.
(g) In addition to and not in limitation of Section 15 hereof, this
Section 7 shall terminate and be of no force and effect upon a Liquidity Event
or upon any material breach by GRP of this Agreement, the Series C-1 Securities
Purchase Agreement or the Registration Rights Agreement.
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
26
SECTION 8. COVENANTS OF THE CORPORATION.
(a) Financial Information. The Corporation will deliver the
following reports to each Preferred Stockholder so long as such Preferred
Stockholder together with its Affiliates holds shares of Preferred Stock
representing at least 250,000 shares of capital stock of the Corporation (as
adjusted equitably for stock dividends, stock splits, combinations, etc.):
(i) As soon as practicable after the end of each fiscal year,
and in any event within ninety (90) days thereafter, the consolidated
audited balance sheet of the Corporation and its Subsidiaries, if any, as
of the end of such fiscal year, and a consolidated statement of income and
consolidated statement of cash flow of the Corporation and its
Subsidiaries, if any, for such fiscal year, prepared in accordance with
GAAP, consistently applied and setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail
and audited by independent public accountants of national standing
selected by the Corporation, together with a certificate of the
Corporation executed by the chief executive officer or principal financial
or accounting officer of the Corporation certifying that all covenants to
be complied with by the Corporation under this Section 8 have been
complied with (or setting forth in reasonable detail any covenants that
have not been so complied with) and the reasons for such noncompliance.
(ii) As soon as practicable after the end of each quarter and
in any event within forty-five (45) days thereafter, an unaudited
consolidated balance sheet and statements of income and cash flow of the
Corporation and its Subsidiaries, if any, for such quarter and for the
year to date (in each case, compared to the budget for that period and to
the corresponding period of the prior year).
(b) Additional Information. The Corporation will deliver the
following additional items to each Preferred Stockholder so long as such
Preferred Stockholder together with its Affiliates holds shares of Preferred
Stock representing at least (x) five (5%) percent of the total Common Stock of
the Company on a Fully Diluted Basis; provided, however, that if such Preferred
Stockholder together with its Affiliates initially holds shares of Preferred
Stock representing at least five (5%) percent threshold and subsequently goes
below such five (5%) percent threshold solely as a result of the Corporation
issuing additional securities of the Corporation after the date hereof, then
such threshold percentage shall be reduced to three (3%) percent for such
Preferred Stockholder together with its Affiliates; provided further, however,
that such Preferred Stockholder who subsequently goes below such five (5%)
percent threshold has not sold or transferred any shares of Preferred Stock to
any Persons who is not an Affiliate of such Preferred Stockholder as of the date
of determination of rights to additional information hereunder, or (y) 1,250,000
shares of Stock of the Corporation (as adjusted equitably for stock dividends,
stock splits, combinations, etc.) each, a "Qualified Investor"):
(i) As soon as practicable after the end of each month and in
any event within twenty (20) days thereafter, an unaudited consolidated
balance sheet and statements of income and cash flow of the Corporation
and its Subsidiaries, if any, prepared on a trended basis for such month
and for the year to date (in each case compared to the budget for that
period and to the corresponding periods of prior years).
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
27
(ii) At least thirty (30) days prior to each fiscal year, the
Corporation's annual and monthly budget and projections for such fiscal
year.
(iii) As soon as they are made available to the Board, other
budgets or financial plans prepared by the Corporation and presented to
the Board.
(iv) With reasonable promptness, (A) all financial statements,
reports, notices and other documents sent by the Corporation to its
stockholders generally or released to the public and notice of all regular
and periodic reports, if any, filed by the Corporation with any
Governmental Entity, (B) all reports prepared for or delivered to the
management of the Corporation by its accountants with respect to
significant aspects of the Corporation's operations and financial affairs,
and (C) such other information and data any Qualified Investor may from
time to time reasonably request upon prior written notice.
(c) Rights of Inspection. From and after the date hereof, each
Qualified Investor shall have the right to, upon reasonable advance notice,
visit and inspect any of the properties, books or records of the Corporation and
to discuss its affairs, finances and accounts with its officers, all at such
reasonable times during normal business hours and as often as may be reasonably
requested; provided, however, that each such Qualified Investor shall agree to
hold all such materials and information derived therefrom as confidential and
shall not reveal or disclose such materials or information derived therefrom to
any other Person (other than a Subsidiary of the ultimate parent entity of such
Qualified Investor) unless compelled by applicable Law.
SECTION 9. APPROVED SALE OF THE CORPORATION.
(a) If a majority of the Board and the Requisite Designated
Preferred Stockholders approve a Sale of the Corporation (an "Approved Sale"),
each Stockholder shall consent to and raise no objections against the Approved
Sale. If the Approved Sale is structured as a (i) merger or consolidation of the
Corporation or a sale of all or substantially all of the assets of the
Corporation (determined on a consolidated basis), each Stockholder shall waive
any dissenters rights, appraisal rights or similar rights in connection with
such merger, consolidation or asset sale, or (ii) sale of Stock, each
Stockholder shall agree to sell their Stock on the terms and conditions
(including the same price per share) approved by the Board and the Requisite
Designated Preferred Stockholders, subject to the conditions set forth in
Section 9(b). Each Stockholder shall take all necessary and desirable actions in
connection with the consummation of the Approved Sale including, but not limited
to, the execution of such agreements and such instruments and other actions
reasonably necessary to effectuate the allocation and distribution of the
aggregate consideration upon the Approved Sale as set forth in Section 9(b).
(b) The obligations of each Stockholder with respect to an Approved
Sale are subject to the satisfaction of the following conditions: (i) upon the
consummation of the Approved Sale, all of the Stockholders shall receive the
same proportion (without giving effect to any tax consequences of the Approved
Sale to such holders) of the aggregate consideration from such Approved Sale
that each such Stockholder would have received if such aggregate consideration
had been distributed by the Corporation in complete liquidation pursuant to the
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
28
rights and preferences set forth in the Certificate, (ii) if any Stockholders
are given an option as to the form and amount of consideration to be received,
each Stockholder will be given the same option, (iii) subject to the terms and
conditions of the Stock Option Plan, all holders of rights to acquire Stock (to
the extent such rights are vested) shall be given an opportunity to either (A)
exercise such rights prior to the consummation of the Approved Sale and
participate in such sale as holders of Stock or (B) upon the consummation of the
Approved Sale, receive in exchange for such rights consideration equal to the
amount determined by multiplying (1) the number of shares of Stock represented
by such rights by (2) the consideration a holder of such share of Stock would
receive in connection with the Approved Sale less the exercise price per share
of Stock, (iv) no Stockholder shall be required pursuant to the terms of such
sale to accept any consideration that would cause such Stockholder to have a
Regulatory Problem (as such term is defined in the Regulatory Sideletter) and
(v) no Stockholder will be entitled to receive any economic benefits (other than
in connection with such Stockholder's employment with the Corporation) which are
not made available on a pro rata basis to all the other Stockholders (except
that this provision shall not apply to advisory, accounting, legal or other
services rendered for the Corporation by a Stockholder who has been engaged by
the Board for such purpose).
(c) The Preferred Stockholders shall only be required to give
representations, warranties and indemnities with respect to their respective
organization, authorization, enforceability, ownership of stock, and
noncontravention of contracts customary to transactions of such type. In no
event shall the Preferred Stockholders be required to make any representations,
warranties or indemnities with respect to the operations of the Corporation or
the Corporation's business in connection with any Approved Sale.
SECTION 10. ELECTION OF DIRECTORS; VOTING.
(a) The number of directors constituting the Board, as fixed from
time to time by the Board in accordance with the Certificate and the By-Laws,
shall be not less than eleven (11). The number of directors constituting the
board of directors of each Subsidiary shall be not less than eleven (11) and
each member of the Board shall at all times serve as a director on the board of
directors of each Subsidiary. Any vacancy on the Board or on the board of
directors of any Subsidiary from time to time shall not be considered to be a
decrease in the number of directors constituting such board. Notwithstanding any
provision in the Certificate and the By-Laws, the number of directors
constituting the Board shall not be changed without the consent of the Requisite
Designated Preferred Stockholders. At each annual meeting of the holders of any
class of Stock, and at each special meeting of the holders of any class of Stock
called for the purpose of electing directors of the Corporation, and at any time
at which holders of any class of Stock shall have the right to, or shall, vote
for or consent in writing to the election of directors of the Corporation, then,
and in each such event, the Stockholders shall vote all of the shares of Stock
owned by them or their Affiliates, and their respective transferees shall so
vote for, or consent in writing with respect to such shares in favor of, the
election of a Board of the Corporation constituted as follows:
(i) two (2) directors who shall be designated and approved by
X.X. Xxxxxx (each a "X.X. Xxxxxx Director");
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
29
(ii) one (1) director who shall be designated and approved by
Xxxxx Fargo (the "WF Director"); provided that Xxxxx Fargo, together with
its Affiliates, and other members of its Group, holds either (A) equity
securities of the Corporation representing at least five (5%) percent of
the voting power thereof (determined on a Fully Diluted Basis) or (B) at
least seventy-five (75%) percent of the Stock of the Corporation held by
it as of the Closing Date (as adjusted for stock splits, stock dividends
and the like);
(iii) one (1) director who shall be designated and approved by
AmeriCredit (the "AmeriCredit Director"), provided that AmeriCredit,
together with its Affiliates, and other members of its Group, holds either
(A) equity securities of the Corporation representing at least five (5%)
percent of the voting power thereof (determined on a Fully Diluted Basis)
or (B) at least seventy-five (75%) percent of the Stock of the Corporation
held by it as of the Closing Date (as adjusted for stock splits, stock
dividends and the like);
(iv) one (1) director who shall be designated and approved by
Capital One (the "Capital One Director"); provided that Capital One,
together with its Affiliates, and other members of its Group, holds either
(A) equity securities of the Corporation representing at least five (5%)
percent of the voting power thereof (determined on a Fully Diluted Basis)
or (B) at least seventy-five (75%) percent of the Stock of the Corporation
held by it as of the Closing Date (as adjusted for stock splits, stock
dividends and the like);
(v) one (1) director who shall be designated and approved by
WFS (the "WFS Director"); provided that WFS, together with its Affiliates,
and other members of its Group, holds either (A) equity securities of the
Corporation representing at least five (5%) percent of the voting power
thereof (determined on a Fully Diluted Basis) or (B) at least seventy-five
(75%) percent of the Stock of the Corporation held by it as of the Closing
Date (as adjusted for stock splits, stock dividends and the like);
(vi) one (1) director who shall be designated and approved by
GRP (the "GRP Director"); provided that GRP, together with its Affiliates,
and other members of its Group, holds either (A) equity securities of the
Corporation representing at least five (5%) percent of the voting power
thereof (determined on a Fully Diluted Basis) or (B) at least seventy-five
(75%) percent of the Stock of the Corporation held by it as of the Closing
Date (as adjusted for stock splits, stock dividends and the like);
(vii) one (1) director who shall be designated and approved by
The First American Corporation ("FAC") (the "FAC Director"); provided that
FAC, together with its Affiliates, and other members of its Group, holds
either (A) equity securities of the Corporation representing at least five
(5%) percent of the voting power thereof (determined on a Fully Diluted
Basis) or (B) at least seventy-five (75%) percent of the Stock of the
Corporation held by CMSI as of the Closing Date (as adjusted for stock
splits, stock dividends and the like);
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(viii) one (1) director who shall be the Chief Executive
Officer of the Corporation; and
(ix) two (2) directors who shall not be officers of the
Corporation and shall each be designated and approved by AmeriCredit, X.X.
Xxxxxx and Xxxxx Fargo, acting jointly; provided however, that Capital
One, FAC, GRP and WFS, acting jointly, may veto any individual proposed as
a director under this Section 10(a)(viii) within 14 calendar days of
receipt of the name and resume of such proposed director, except that
Capital One, FAC, WFS and GRP agree not to unreasonably veto any such
individual who is designated by AmeriCredit, X.X. Xxxxxx and Xxxxx Fargo
hereunder.
(b) Each respective party designating directors pursuant to Section
10(a) shall have the right (i) to have such director serve as director until his
or her successor is duly elected and qualified, (ii) to designate each such
successor so long as such party has the power to designate such director
pursuant to Section 10(a) above, (iii) to propose the removal from the Board of
any director nominated by such party pursuant to Section 10(a) and (iv) to
propose the removal from the Board of a director nominated by another party in
the event that such other party ceases to possess the power to nominate such
director as a result of the application of any of the provisions of Section
10(a) above. The Stockholders shall vote their shares (i) to remove any director
whose removal is required pursuant to clause (iii) or (iv) of the preceding
sentence by the party or Parties with the power to designate such director
pursuant to Section 10(a) and (ii) to fill any vacancy created by the removal,
resignation or death of a director, in each case for the election of a new
director designated and approved, if approval is required, in accordance with
the provisions of this Section 10.
(c) The members of each committee of the Board shall be selected by
the Board and shall include (i) one (1) X.X. Xxxxxx Director, and (ii) such
other director(s) selected by the Board. The Corporation and the Board shall
ensure that the AmeriCredit Director, the Capital One Director, the FAC
Director, the Xxxxx Fargo Director, the WFS Director and the GRP Director are
each members of the same number of committees as is reasonably possible. The
Corporation and Board shall also ensure that no Stockholder has more than one
representative as a member on a certain committee. In the event that
AmeriCredit, Capital One, FAC, Xxxxx Fargo, WFS or GRP is not a member of a
particular committee, AmeriCredit, Capital One, FAC, Xxxxx Fargo, WFS or GRP, as
the case may be, shall have the right to designate one individual as a
non-voting observer (each a "Committee Observer") to such committee. The
Corporation shall give each Committee Observer and the ALG Observer (as defined
below) the same notice, information and documentation with respect to committee
meetings as the members of such committees receive; provided, however, that each
Committee Observer and the ALG Observer shall agree to hold all information so
provided in confidence and trust; provided further, however, that the
Corporation reserves the right to withhold any information and to exclude any
Committee Observer and or the ALG Observer from any meeting or portion thereof,
without excluding any other Committee Observer and or the ALG Observer, if the
Board determines in good faith that access to such information or attendance at
such meeting would adversely affect the attorney-client privilege between the
Corporation and its counsel.
(d) ALG shall have the right to designate one individual as a
non-voting observer to the Board and to any committees of the Board (the "ALG
Observer"). All other
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Investors shall have the right to designate one individual as a non-voting
observer to the Board, subject to the ability of the Board to determine that no
Investor (other than ALG) shall have such right (each a "Board Observer"). The
Corporation shall give the ALG Observer and each Board Observer the same notice,
information and documentation with respect to Board meetings as the members
receive; provided, however, that the ALG Observer and the Board Observers, if
any, shall agree to hold all information so provided in confidence and trust;
provided further, however, that the Corporation reserves the right to withhold
any information and to exclude the ALG Observer, without excluding any Board
Observer or the ALG Observer, as the case may be, from any meeting or portion
thereof if the Board determines in good faith that access to such information or
attendance at such meeting would adversely affect the attorney-client privilege
between the Corporation and its counsel.
(e) The Stockholders shall cause the Corporation to appoint, replace
and remove the directors of each of its Subsidiaries and each of DealerTrack,
Inc., webalg, inc. and Credit Online, Inc. hereby agrees to such appointment,
replacement and removal, in accordance with the terms of this Section 10 as
applied mutatis mutandis to such Subsidiaries, such that at all times the Board
of the Corporation and of each Subsidiary of the Corporation shall consist of
the same individuals at a minimum.
SECTION 11. REGULATORY MATTERS.
(a) Cooperation of Other Stockholders.
(i) Each Stockholder agrees to cooperate with the Corporation
in all commercially reasonable respects in complying with the terms and
provisions of the Regulatory Sideletter (each of X.X. Xxxxxx and Xxxxx
Fargo, a "Regulated Investor"), regarding regulatory matters in order to
remedy a Regulatory Problem (as defined in the Regulatory Sideletter),
including without limitation, voting to approve amending the Certificate,
the By-Laws or this Agreement in a manner reasonably acceptable to the
Stockholders, the Corporation, each Regulated Investor or any Affiliate of
a Regulated Investor entitled to make such request under the Regulatory
Sideletter.
(ii) Each Stockholder and the Corporation agree to cooperate
in all commercially reasonable respects with each other Stockholder and
the Corporation should any Stockholder or any Affiliate of such
Stockholder (an "Other Regulated Investor") after the date of this
Agreement become directly subject to any regulatory body or fall under the
direct regulatory supervision of any regulatory body solely because of
such Other Regulated Investor's equity interest in the Corporation, as a
result of which the business activities of the such Other Regulated
Investor or its Affiliate are materially and adversely limited or the cost
of such activities are materially increased (an "Other Regulatory
Problem"), to eliminate such Other Regulatory Problem, including without
limitation, voting to approve amending the Certificate, the By-Laws or
this Agreement in a manner reasonably acceptable to the Stockholders, the
Corporation and the Other Regulated Investor.
(iii) Anything contained in this Section 11(a) to the contrary
notwithstanding, the Corporation and each Stockholder hereby agree that no
Stockholder
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or the Corporation shall be required under this Section 11(a) to take any
action that would adversely affect in any material respect (i) such
party's rights under this Agreement or any Stockholder's rights as a
stockholder of the Corporation; (ii) the fair market value of such
Stockholder's investment in the Corporation (but not including any general
affect on the fair market value of the Corporation); or (iii) the
operation of such Stockholder's, any of its Affiliates' or the
Corporation's business.
(b) Each Stockholder agrees to cooperate in all commercially
reasonable respects with each other Stockholder and the Corporation should any
such Stockholder (the "Causing Stockholder") after the date of this Agreement
and as a result of its ownership of securities of the Corporation or other
relationships with the Corporation cause the Corporation to become directly
subject to any regulatory body or fall under the direct regulatory supervision
of any regulatory body, as a result of which the business activities of the
Corporation are materially and adversely limited or the Corporation incurs any
additional costs (a "DealerTrack Regulatory Problem"), to eliminate such
DealerTrack Regulatory Problem, including without limitation, voting to approve
amending the Certificate, the By-Laws or this Agreement in a manner reasonably
acceptable to the Stockholders, the Corporation, each Regulated Investor, any
Affiliate of a Regulated Investor entitled to make such request pursuant to the
Regulatory Sideletter in order to remedy a Regulatory Problem (as defined in the
Regulatory Sideletter) and any Other Regulated Investor. For the purpose of this
Section 11(b) only, commercially reasonable shall include the Causing
Stockholder's (but not any other Stockholder's) disposition of its equity
interest in the Corporation at a loss in the event such DealerTrack Regulatory
Problem has not otherwise been eliminated and cannot be eliminated by other
commercially reasonable efforts of the Causing Stockholder (such as the transfer
of the Causing Stockholder's equity interest in the Corporation to an Affiliate)
or the commercially reasonable efforts of the other Stockholders. Anything
contained in this Section 11(b) to the contrary notwithstanding, the Corporation
and each Stockholder hereby agree that any Stockholder who is not the cause of
the DealerTrack Regulatory Problem, shall not be required under this Section
11(b) to take any action that would adversely affect in any material respect (i)
such Stockholder's rights under this Agreement or as a stockholder of the
Corporation; (ii) the fair market value of such Stockholder's investment (but
not including any general affect on the fair market value of the Corporation) in
the Corporation; or (iii) the operation of such Stockholder's or any of its
Affiliates' business.
(c) Covenant Not to Amend. The Corporation and each Stockholder
agree not to amend or waive the voting or other provisions of the Certificate,
the By-Laws or this Agreement if such amendment or waiver would cause either (i)
either Regulated Investor or any of their respective Affiliates to have a
Regulatory Problem (as defined in the Regulatory Sideletter) or (ii) any other
Stockholder or any of its Affiliates to have an Other Regulatory Problem. Each
Regulated Investor and each other Stockholder agrees to notify the Corporation
as to whether or not it or any of its Affiliates would have a Regulatory Problem
or Other Regulatory Problem promptly after such Regulated Investor and each
other Stockholder has notice of such amendment or waiver. Anything contained in
this Section 11(c) to the contrary notwithstanding, the Corporation and each
Stockholder hereby agree that no Stockholder shall be required under this
Section 11(c) to take any action that would adversely affect in any material
respect (i) such Stockholder's rights under this Agreement or as a stockholder
of the Corporation; (ii) the fair market value of such Stockholder's investment
(but not including any
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general affect on the fair market value of the Corporation) in the Corporation;
or (iii) the operation of such Stockholder's or any of its Affiliate's business.
SECTION 12. REPRESENTATION OF THE STOCKHOLDERS.
Based in part and assuming the accuracy of the representations of
each other Stockholder hereto and assuming that there has been no transfers of
any securities issued by the Company by any Person listed as the legal owner in
the Company's transfer records determined pursuant to Section 4.1(c)(i) of the
Certificate, each Stockholder hereby agrees, solely with respect to such
Stockholder, that:
(a) the post closing capitalization table set forth in Annex II
hereof is a true, accurate and correct calculation of the voting percentages, on
a Fully Diluted Basis, of such Stockholder immediately after the Closing Date;
(b) with respect to any Series of Preferred Stock owned by such
Stockholder, if any, the calculation of the Conversion Rate (as such term is
defined in the Certificate) including deemed dividend accruals (A) with respect
to each share of Series A Preferred Stock and Series B Preferred Stock shall be
1.6321, respectively, (B) with respect to each share of Series A-1 Preferred
Stock and Series B-1 Preferred Stock shall be 1.5688, respectively, (C) with
respect to each share of Series C Preferred Stock shall be 1.1706, (D) with
respect to each share of Series C-1 Preferred Stock shall be 1.0555, (E) with
respect to each share of Series C-2 Preferred Stock shall be 1.0059 and (F) with
respect to each share of Series A-2 Preferred Stock and Series C-3 Preferred
Stock shall be 1.0000, respectively, is a true, accurate and correct calculation
of such Conversion Rate in accordance with the Certificate; and
(c) with respect to any Series of Preferred Stock owned by such
Stockholder, if any, the calculation of the Conversion Rate (as such term is
defined in the Certificate) excluding any deemed dividend accruals (A) with
respect to each share of Series A Preferred Stock, Series A-1 Preferred Stock,
Series B Preferred Stock and Series B-1 Preferred Stock shall be 1.4085,
respectively, (B) with respect to each share of Series C Preferred Stock shall
be 1.0832 and (D) with respect to each share of Series A-2 Preferred Stock,
Series C-1 Preferred Stock, Series C-2 Preferred Stock and Series C-3 Preferred
Stock shall be 1.0000, respectively, is a true, accurate and correct calculation
of such Conversion Rate in accordance with the Certificate.
SECTION 13. LEGEND; OPINION OF COUNSEL.
(a) Legend. In addition to any other legend that may be required
under any of the other Documents and unless not required under the Securities
Act to bear such legend, each certificate representing any shares of Stock shall
be stamped or otherwise imprinted with a legend substantially in the following
form (in addition to any legend required by applicable state securities laws):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY
NOT BE SOLD, TRANSFERRED
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34
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM.
THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, OR ENCUMBRANCE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF THE
HOLDER OF SUCH SECURITIES IN RESPECT OF THE ELECTION OF DIRECTORS
ARE SUBJECT TO THE TERMS AND CONDITIONS OF A STOCKHOLDERS' AGREEMENT
DATED AS OF MARCH 19, 2003 AMONG DEALERTRACK HOLDINGS, INC., ITS
SUBSIDIARIES AND THE HOLDERS OF OUTSTANDING CAPITAL STOCK OF SUCH
CORPORATION, AS AMENDED FROM TIME TO TIME. COPIES OF SUCH AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF DEALERTRACK HOLDINGS,
INC.
DEALERTRACK HOLDINGS, INC. WILL FURNISH WITHOUT CHARGE TO EACH
STOCKHOLDER WHO SO REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL, OR OTHER SPECIAL RIGHTS OF
EACH CLASS OF STOCK OR SERIES THEREOF AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS."
(b) Opinion of Counsel. Unless the requirements of this Section
13(b) are waived by the Corporation with respect to a Transfer, no Stockholder
may consummate a Transfer of any Stock to any Person that is not a party to this
Agreement (except pursuant to an effective registration statement under the
Securities Act) without first delivering to the Corporation an opinion of
counsel (reasonably acceptable in form and substance to the Corporation) that
neither the registration nor qualification under the Securities Act and
applicable state securities laws is required in connection with such Transfer;
provided, however, that the requirements of this Section 13(b) shall not apply
to any Exempt Transfer by a Preferred Stockholder.
SECTION 14. ADDITIONAL SHARES OF STOCK.
In the event additional shares of Stock are issued by the
Corporation after the date hereof, either directly or upon the exercise or
exchange of securities of the Corporation exercisable for or exchangeable into
shares of Stock, the Corporation shall cause such additional shares of Stock, as
a condition to such issuance, to become subject to the terms and provisions of
this Agreement.
SECTION 15. DURATION OF AGREEMENT.
The rights and obligations of each Stockholder under this Agreement
shall terminate as to such Stockholder upon the Transfer of all Stock owned by
such Stockholder. This Agreement shall terminate as to all Parties hereto in any
event immediately prior to the consummation of a Qualified Public Offering.
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SECTION 16. JOINDERS; AMENDMENT OF ANNEX I.
(a) Any transferee of Stock of the Corporation from a Preferred
Stockholder (other than the Corporation, a Common Stockholder or a transferee in
a Qualified Public Offering) shall, as a condition to such Transfer, become a
Preferred Stockholder for purposes of this Agreement, and if such transferee is
not already bound hereby as a Preferred Stockholder, he, she or it shall execute
and deliver to the Corporation a Preferred Stockholder Joinder in substantially
the form of Exhibit B. Any transferee of Stock from a Common Stockholder who is
not a Management Stockholder (other than the Corporation, a Preferred
Stockholder, a transferee in a Qualified Public Offering or an employee,
manager, officer or director of or consultant to the Corporation) shall, as a
condition to such Transfer, become a Common Stockholder for purposes of this
Agreement, and if such transferee is not already bound hereby as a Common
Stockholder, he, she or it shall execute and deliver to the Corporation a Common
Stockholder Joinder in substantially the form of Exhibit C. Any transferee of
Stock from a Management Stockholder (other than the Corporation, a Preferred
Stockholder or a transferee in a Qualified Public Offering) shall, as a
condition to such Transfer, become a Management Stockholder for purposes of this
Agreement, and if such transferee is not already bound hereby as a Management
Stockholder, he, she or it shall execute and deliver to the Corporation a
Management Stockholder Joinder in substantially the form of Exhibit D.
(b) In the event additional shares of Stock are issued by the
Corporation after the date hereof to any Person that is an employee, manager,
officer or director of or consultant to the Corporation (including pursuant to
the exercise of an option to acquire Stock), such Person, as a condition to
receiving such shares of Stock, shall execute and deliver to the Corporation a
Joinder in substantially the form of Exhibit D hereto, and shall be deemed a
Management Stockholder hereunder and shall agree that such shares of Stock will
be subject to the terms and provisions of this Agreement, provided that if such
Person was a Management Stockholder prior thereto, such Person shall be deemed
to continue such status.
(c) In the event shares of Stock are issued by the Corporation after
the date hereof to a third party investor which is not an Affiliate, employee,
manager, officer or director of or consultant to the Corporation, such Person,
as a condition to receiving such shares of Stock, shall agree to execute and
deliver to the Corporation a Joinder in substantially the form of Exhibit C
hereto, and shall be deemed a Stockholder hereunder and agree that such
additional shares will be subject to the terms and provisions of this Agreement
provided that if such Person was a Common Stockholder prior thereto, such Person
shall be deemed to have continued such status and if such Person was a Preferred
Stockholder prior thereto, such Person shall be deemed to have continued such
status.
(d) Notwithstanding anything contained in this Agreement to the
contrary, Annex I shall automatically be amended to reflect the Stock held by
each Preferred Stockholder, Common Stockholder and Management Stockholder upon
the occurrence of (i) the execution and delivery of a Joinder or (ii) the
acquisition of Stock. Within 30 days of any amendment to Annex I, the
Corporation shall deliver the revised Annex I to each Stockholder at the address
held on the books and records of the Corporation.
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SECTION 17. SEVERABILITY; GOVERNING LAW.
It is the desire and intent of the Parties that the provisions of
this Agreement be enforced to the fullest extent permissible under the Laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction. This Agreement shall be governed by and
construed and enforced in accordance with the Laws of the State of New York
(without regard to principles of conflict of Laws), except to the extent that
this Agreement relates to the internal Laws of the Corporation, which shall be
governed by and construed and enforced in accordance with the Laws of the State
of Delaware.
SECTION 18. SUCCESSORS AND ASSIGNS.
Subject to Section 16, this Agreement shall bind and inure to the
benefit of the Parties and their respective successors and assigns, transferees,
legal representatives, heirs and estate.
SECTION 19. NOTICES.
All notices, requests, consents and other communications hereunder
to any party hereto shall be deemed to be sufficient if contained in a written
instrument delivered in person or by telecopy or sent by nationally-recognized
overnight courier or first class registered or certified mail, return receipt
requested, postage prepaid, addressed to such party at the address set forth
below or at such other address as may hereafter be designated in writing by such
party to the other Parties:
(a) If to X.X. Xxxxxx, to:
X.X. Xxxxxx Partners (23 A SBIC), LLC
c/o X.X. Xxxxxx Partners, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
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X.X. Xxxxxx Partners
c/o X.X. Xxxxxx Partners, LLC
Official Notices Clerk
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000; and
X.X. Xxxxxx Partners
c/o J.P. Partners, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxx X.X. Xxxxx
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.;
(b) If to Xxxxx Fargo, to:
Xxxxx Fargo Small Business Investment Company, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxx;
with a copy to:
Pillsbury Winthrop LLP
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx Xxxx, Esq.
(c) If to AmeriCredit, to:
ACF Investment Corp.
c/o AmeriCredit Corp.
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000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxx Xxxxxx, Esq.
c/o AmeriCredit Corp.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(d) If to ALG, to:
Automotive Lease Guide (alg), LLC
000 Xx. Xx Xxxxxx Xxxx
Xxxxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxxxxx, President
with a copy to:
Seed Xxxxxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(e) If to Capital One, to:
Capital One Auto Finance, Inc.
c/o Capital One Services, Inc.
0000 Xxxxx Xxxxxx Xxxxx
00000-0000
XxXxxx, XX 00000
Attention: Xxxxxx Xxxxx, Esq.
with a copy to:
XxXxxxx Xxxx, A Professional Corporation
Eleventh Floor
000 Xxxx Xxxx Xxxxxx
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Richmond, Vg. 23219
Attn: Xxxx X. XxXxxxx, Esq.
(f) If to CMSI or FAC, to:
Credit Management Solutions, Inc.
c/o First American CREDCO
00000 Xxxxx Xxxxxxxx Xxx
Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
The First American Corporation
0 Xxxxx Xxxxxxxx Xxx
Xxxxx Xxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Attention: Xxxxxxx XxXxxxxxx
Facsimile: (000) 000-0000
(g) If to ADP, Inc. to:
ADP Dealer Services
0000 Xxxxxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Automatic Data Processing, Inc.
Xxx XXX Xxxxxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
(h) If to Xxxxx Fargo Financial, Inc., to:
Xxxxx Fargo Financial, Inc.
000 0xx Xxxxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Fourth Amended and Restated EXECUTION
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with a copy to:
Xxxxx Fargo Financial, Inc.
000 0xx Xxxxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
(i) If to WFS, to:
WFS Web Investments
00 Xxxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxx, President
with a copy to:
WFS Web Investments
00 Xxxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxx XxXxxx, Esq.,
General Counsel
(j) If to GRP, to:
GRP II, L.P.
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx
GRP II Partners, L.P.
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx
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GRP II Investors, L.P.
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx
GRP II Investors, L.P.
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(k) If to the Series C-2 Stockholders or the Common Stockholders,
to the address for each such Series C-2 Stockholder or Common
Stockholder set forth in the records of the Corporation.
(l) If to the Corporation, DealerTrack, Inc. or webalg, inc., to:
DealerTrack Holdings, Inc.
000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. X'Xxxx, President and CEO
Fourth Amended and Restated EXECUTION
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with a copy to:
O'Melveny & Xxxxx LLP
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
All such notices, requests, consents and other communications shall
be deemed to have been delivered (a) in the case of personal delivery or
delivery by telecopy, on the date of such delivery, (b) in the case of dispatch
by nationally-recognized overnight courier, on the next business day following
such dispatch and (c) in the case of mailing, on the third business day after
the posting thereof.
SECTION 20. MODIFICATION; WAIVER.
Neither this Agreement nor any provisions hereof can be modified,
changed, discharged, waived or terminated, except by an instrument in writing
signed by the Corporation and the Requisite Designated Preferred Stockholders
(as defined in the Certificate); provided, that any such modification, change,
discharge, waiver or termination shall also require the written consent of any
particular party hereto to the extent, and only to the extent, that any such
modification, change, discharge, waiver or termination materially adversely
affects the rights, privileges, duties or obligations of such party hereunder as
compared to those of the other Parties hereto. No waiver by any party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence. The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with it terms.
SECTION 21. VOTING.
To the extent that the Corporation wishes to take any action
requiring approval under Section 4.1(c)(ii) of the Certificate, if such action
is approved as required by such Section 4.1(c)(ii) then each Stockholder agrees
to vote all shares of capital stock of the Corporation held by such Stockholder
in favor of such action, whether by written consent or at any meeting.
Notwithstanding the foregoing, nothing contained in this Section 21 shall be
construed as requiring a Stockholder to vote its shares in favor of any action
if such Stockholder owns capital stock of any class or series that would be
entitled to vote as a separate class or series with respect to such action under
Section 242(b)(2) of the DGCL.
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
43
SECTION 22. REMEDIES.
(a) Each Stockholder shall have all rights and remedies reserved for
such Stockholder pursuant to this Agreement and all rights and remedies which
such holder has been granted at any time under any other agreement or contract
and all of the rights which such holder has under any Law or equity. Without
limiting the generality of the foregoing, a Person having any rights under any
provision of this Agreement will be entitled to enforce such rights
specifically, to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by Law or equity.
(b) The Parties acknowledge and agree that, solely with respect to
Section 9 and Section 10 hereof, it will be impossible to measure in money the
damages that would be suffered by any party hereto if any Person which is also a
party hereto fails to comply with any of the obligations imposed on it in this
Agreement or in the Certificate or By-Laws, and that in the event of any such
failure, the aggrieved party will be irreparably damaged and will not have an
adequate remedy at law. Any such aggrieved party shall, therefore, be entitled
to equitable relief, including specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any of the
provisions of this Agreement, none of the Parties hereto shall raise the defense
that there is an adequate remedy at law.
SECTION 23. NO DISCLOSURE OBLIGATIONS.
(a) The Corporation and each Stockholder acknowledges that each
Investor will likely have, from time to time, information that may be of
interest to the Corporation ("Information") regarding a wide variety of matters
including, without limitation, (1) the Investor's technologies, products, plans
and services, and plans and strategies relating thereto, (2) current and future
investments the Investor has made, may make, may consider or may become aware of
with respect to other Persons and other technologies, products, plans and
services, and plans and strategies relating thereto, including, without
limitation, those that may be competitive with the Corporation's, and (3)
developments with respect to the technologies, products plans and services, and
plans and strategies relating thereto, of other Persons, including, without
limitation, Persons that may be competitive with the Corporation. The
Corporation and each Stockholder recognizes that a portion of such Information
may be of interest to the Corporation and that such Information may or may not
be known by the applicable Investor Director. The Corporation and each
Stockholder agree that the Investors and each Investor Director shall have no
duty to disclose any Information to the Corporation or permit the Corporation to
participate in any projects or investments based on any Information, or to
otherwise take advantage of any opportunity that may be of interest to the
Corporation if it were aware of such Information, and hereby waives, to the
extent permitted by law, any claim based on the corporate opportunity doctrine
or otherwise that could limit Investor's ability to pursue opportunities based
on such Information or that would require the Investor or the Investor Director
to disclose any such Information to the Corporation or offer any opportunity
relating thereto to the Corporation.
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
44
SECTION 24. HEADINGS.
The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed to be a part of this
Agreement.
SECTION 25. NOUNS AND PRONOUNS.
Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of names and pronouns shall include the plural and vice versa.
SECTION 26. ENTIRE AGREEMENT.
Except as otherwise expressly set forth herein, this Agreement
embodies the complete agreement and understanding among the Parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings or representations by or among the Parties, written or oral,
which may have related to the subject matter hereof in any way.
SECTION 27. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and
each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement.
SECTION 28. AMENDED AND RESTATED AGREEMENT.
The Parties hereto agree that upon the proper and duly authorized
execution and delivery of this Agreement, the Prior Stockholders' Agreement
shall be superceded by this Agreement and cancelled in its entirety.
* * * *
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
45
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
on the date first above written.
"CORPORATION"
DEALERTRACK HOLDINGS, INC.
By:
------------------------------------------
Name:
Title:
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-1
"STOCKHOLDERS"
ACF INVESTMENT CORP.
By:
------------------------------------------
Name:
Title:
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-2
AUTOMOTIVE LEASE GUIDE (ALG), LLC
By: __________________________________________
Name:
Title:
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-3
X.X. XXXXXX PARTNERS (23A SBIC), LLC
By: X.X. Xxxxxx Partners (23A SBIC Manager), Inc.,
its Managing Member
By: __________________________________________
Name:
Title:
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-4
XXXXX FARGO SMALL BUSINESS
INVESTMENT COMPANY, INC.
By:
------------------------------------------
By:
------------------------------------------
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-5
CAPITAL ONE AUTO FINANCE, INC.
By:
------------------------------------------
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-6
FIRST AMERICAN CREDIT MANAGEMENT
SOLUTIONS, INC.
By: __________________________________________
Name:
Title:
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-7
ADP, INC.
By: __________________________________________
Name:
Title:
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-8
XXXXX FARGO FINANCIAL, INC.
By:
------------------------------------------
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-9
WFS WEB INVESTMENTS
By:
------------------------------------------
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-10
GRP II, L.P., a Delaware limited partnership
By: GRPVC, L.P., its General Partner
By: GRP Management Services Corp., a
Delaware corporation, its General Partner
By: __________________________________________
Name:
Title:
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-11
GRP II PARTNERS, L.P., a Delaware limited
partnership
By: GRPVC, L.P., its General Partner
By: GRP Management Services Corp., a Delaware
corporation, its General Partner
By: __________________________________________
Name:
Title:
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-12
GRP II INVESTORS, L.P., a Delaware limited
partnership
By: Merchant Capital, Inc., its General
Partner
By: __________________________________________
Name:
Title:
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-13
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Xxxx Xxxxxxx-Xxxxxxxx
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-14
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Xxxxx Xxxxxx
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-15
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Xxxx X. X'Xxxx
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-16
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Xxxxxx Xxx
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-17
DEALERTRACK, INC.
By:
------------------------------------------
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-18
WEBALG, INC.
By:
------------------------------------------
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-19
CREDIT ONLINE, INC.
By: __________________________________________
Name:
Title:
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-20
"COMMON STOCKHOLDERS"
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Xxxx Xxxxxx
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-21
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Xxxx Xxxx
Fourth Amended and Restated EXECUTION
Stockholders' Agreement
S-22
