AFFILIATE AGREEMENT
EXHIBIT C
THIS AFFILIATE AGREEMENT is made and effective as of
February ____, 1998, by and among KEYSTONE AUTOMOTIVE INDUSTRIES,
INC., a California corporation ("Keystone"), REPUBLIC AUTOMOTIVE
PARTS, INC., a Delaware corporation ("Republic"), and Xxxxxx X.
Xxxxx, Xxxxxxx X. Xxxxxxx, Xx X. Xxxxx, Xxx X. Xxxx, Xxxx X.
Xxxxxxx, Xxxxxxxxxxx Xxxxxxx, Xxxxx X. Xxxxxxxx, Xxxxxxx X.
XxXxxx, Xxxxxx X. Xxxxxxx and Xxxx Xxxxxxxx (collectively, the
"Shareholders" and individually, a "Shareholder").
A. Keystone and the Shareholders desire that
Keystone, KAI Merger, Inc., a wholly owned subsidiary of Keystone
(the "Subsidiary"), and Republic enter into that certain
Agreement and Plan of Merger (as the same may be amended or
supplemented, the "Merger Agreement"), pursuant to which, among
other things, (i) the Subsidiary will be merged with and into
Republic (the "Merger"), (ii) all shares of the capital stock of
Republic issued and outstanding immediately prior to the Merger
will be converted into the right to receive shares of the Common
Stock of Keystone.
A. Keystone and the Shareholders are entering into
this Agreement as a material inducement to Republic to enter into
the Merger Agreement.
A. The Shareholders are affiliates of Keystone as
that term is defined in Rule 405 promulgated under the Securities
Act of 1933, as amended (the "Securities Act").
NOW, THEREFORE, in consideration of the premises and of the
respective representations, warranties, covenants, agreements and
conditions contained herein and in the Merger Agreement, and
intending to be legally bound hereby, the parties agree as
follows:
1. Representations and Warranties. Each Shareholder
hereby represents and warrants to Republic as follows:
(a) The Shareholder is the holder of record, and
has the sole power to vote, or to direct the voting of, and to
dispose of, or to direct the disposition of, that number of
shares of the Common Stock of Keystone set forth below such
Shareholder's name on the signature page hereof. Except for such
shares, and any stock options held by the Shareholder pursuant to
Keystone's 1996 Employee Stock Incentive Plan, as amended, the
Shareholder has no right, title or interest of any kind
whatsoever in any shares of the capital stock or other securities
of Keystone.
(b) All shares of the capital stock of Keystone
held by the Shareholder are free and clear of all (i) liens,
claims, charges, encumbrances, security interests, equities,
restrictions on transfer or any other defects in title of any
kind or description whatsoever and (ii) preemptive rights,
options, proxies, voting trusts or other agreements,
understandings or arrangements regarding the voting or the
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disposition of such shares, except for any such encumbrances
arising hereunder or under the Securities Act of 1933, as amended
(the "Securities Act").
(c) The Shareholder has the legal right, power,
capacity and authority to execute, deliver and perform this
Agreement without obtaining the approval or consent of any
person, and this Agreement is the legal, valid and binding
obligation of the Shareholder and is enforceable against the
Shareholder in accordance with its terms.
(d) Neither the execution and delivery of this
Agreement nor the consummation by the Shareholder of the
transactions contemplated hereby (i) will, to the knowledge of
the Shareholder, result in a violation of, constitute a default
under, conflict with or require any consent, approval or notice
under, any contract, trust, commitment, agreement, understanding,
arrangement or restriction of any kind, or any judgment, order,
decree, statute, law, rule or regulation, to which the
Shareholder is a party or by which the Shareholder is bound or
(ii) will, to the knowledge of the Shareholder, result in the
creation or imposition of any lien, claim, charge, security
interest, encumbrance or restriction on any shares of the capital
stock of Keystone. If the Shareholder is married and any shares
of the capital stock of Keystone held by the Shareholder
constitute community property, this Agreement has been duly
executed and delivered by, and constitutes the legal, valid and
binding agreement of, the Shareholder's spouse, enforceable
against such person in accordance with its terms.
(e) No broker, investment banker, financial
adviser or other person is entitled to any broker's, finder's,
financial adviser's or other similar fee or commission in
connection with the transactions contemplated hereby or by the
Merger Agreement based upon arrangements made by or on behalf of
the Shareholder.
(f) The Shareholder understands and acknowledges
that Republic is entering into the Merger Agreement in reliance
upon the Shareholder's execution and delivery of this Agreement.
2. Voting of Republic Shares. Each Shareholder
hereby covenants and agrees as follows:
(a) At any meeting of shareholders of Keystone
called to vote upon the Merger Agreement, the Merger or the other
transactions contemplated by the Merger Agreement, or at any
adjournment thereof, or in any other circumstances in which a
vote, consent or other approval with respect to the Merger
Agreement, the Merger or the other transactions contemplated by
the Merger Agreement is sought, the Shareholder shall vote (or
cause to be voted) all shares of the capital stock of Keystone as
to which he has the sole or shared voting power, as of the record
date established to determine the persons who have the right to
vote at such meeting or to grant such vote, consent or approval,
in favor of the Merger, the execution and delivery by Keystone of
the Merger Agreement and the approval of the terms of the Merger
Agreement, the Merger and each other transaction contemplated by
the Merger Agreement.
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(b) At any meeting of shareholders of Keystone,
or at any adjournment thereof, or in any other circumstances in
which the vote, consent or other approval of shareholders of
Keystone is sought, the Shareholder shall vote (or cause to be
voted) all shares of the capital stock of Keystone as to which he
has the sole or shared voting power as of the record date
established to determine the persons who have the right to vote
at such meeting or to grant such vote, consent or the approval
against (i) any merger agreement or merger (other than the Merger
Agreement and the Merger), consolidation, combination, sale or
acquisition of any debt or equity security or of any assets,
reorganization, recapitalization, dissolution, liquidation or
winding up of or by Keystone or (ii) any amendment of Keystone's
Articles of Incorporation or Bylaws or (iii) any other proposal
or transaction involving Keystone, which amendment or other
proposal or transaction would in any manner impede, frustrate,
prevent or nullify the Merger, the Merger Agreement or any of the
other transactions contemplated by the Merger Agreement.
(c) The Shareholder shall retain at all times the
right to vote any shares of the capital stock of Keystone owned
of record by the Shareholder, in his sole discretion, on all
matters (other than those set forth in this Section 2) which are
at any time or from time to time presented to the shareholders of
Keystone generally.
(d) The Shareholder shall not, without the prior
written consent of Republic in each instance, take any action
that would alter or affect in any way the right to vote any
shares of the capital stock of Keystone as to which the
Shareholder has the sole or shared voting power, including, but
not limited to, (i) transferring (whether by sale, gift, pledge
or otherwise), or consenting to the transfer of, any interest in
any such shares, (ii) entering into any contract, option or other
agreement or understanding with respect to the voting of such
shares, (iii) granting any proxy, power of attorney or other
authorization in or with respect to the voting of such shares or
(iv) depositing such shares into a voting trust or entering into
a voting agreement or arrangement with respect thereto. The
provisions of this subsection shall not be applicable to Xxxx
Xxxxxxxx with respect to 50% of his holdings of Keystone Common
Stock.
3. Recommendations to Shareholders. Unless (i) the
board of directors of Keystone determines in good faith after
consultation with outside legal counsel that to do so would
result in a failure to comply with it's fiduciary duties under
applicable law, or (ii) the opinion of X. X. Xxxxxxx & Sons, Inc.
referred to in Section 5.3(b) of the Merger Agreement shall have
been withdrawn by that firm, each Shareholder, in his capacity
as a director of Keystone, (i) shall recommend to the
shareholders of Keystone that they approve the Merger Agreement,
the Merger and the transactions contemplated by the Merger
Agreement at the Keystone Meeting or at any other meeting of the
shareholders of Keystone, or in any other circumstances in which
the vote, consent or approval of shareholders of Keystone is
sought with respect thereto.
4. Accounting Treatment. Notwithstanding any other
provision of this Agreement to the contrary, a Shareholder shall
not take any action which, either alone or together with any
action by any other person, could preclude Keystone from
accounting for the business combination to be effected by the
Merger as a pooling of interests.
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5. Termination. All rights and obligations of the
parties under this Agreement shall terminate upon the date upon
which the Merger Agreement is terminated in accordance with
Article VIII thereof.
6. Successors and Assigns. Neither this Agreement
nor any of the rights or duties hereunder shall be assigned, in
whole or in part, by operation of law or otherwise, by any of the
parties without the prior written consent of each other party
affected by such assignment. Any assignment in violation of the
foregoing shall be void. This Agreement and the obligations of a
Shareholder hereunder shall attach to all shares of the capital
stock of Keystone now held or hereafter acquired by such
Shareholder and shall inure to the benefit of and shall be
binding upon any person to which legal or beneficial ownership of
such shares shall pass, whether by operation of law or otherwise,
including, but not limited to, the Shareholder's permitted heirs,
representatives, successors or assigns. In the event of any
stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of
Keystone, or the acquisition of any interest in additional shares
of the capital stock of Keystone by any Shareholder, the number
of shares subject to the terms of this Agreement shall be
adjusted appropriately and this Agreement and the obligations
hereunder shall attach to any interest in any additional shares
of the capital stock of Keystone issued to or acquired by such
Shareholder.
7. Indemnification.
(a) Each of the Shareholders, solely with respect
to himself with respect to Republic, on the one hand, and
Republic with respect to each of the Shareholders, on the other
hand, shall indemnify the other and hold it harmless against and
in respect of any and all payments, damages, demands, claims,
losses, expenses, costs, obligations and liabilities (including,
but not limited to, reasonable attorneys' fees and costs) which
arise or result from or are related to any material breach by
such indemnifying party or material failure by such indemnifying
party to perform any of its representations, warranties,
commitments, obligations, covenants or conditions hereunder;
provided, however, that no party shall be entitled to seek
indemnification from any other party pursuant to this Section 7
unless the party from whom indemnification is sought is given
written notice of the existence of a claim for indemnification
written six months of the Effective Time of the Merger.
Consummation of the transactions contemplated hereby shall not
be deemed or construed to be a waiver of any right or remedy of
the indemnified party nor shall this section or any other
provision of this Agreement be deemed or construed to be a waiver
of any ground of defense by the indemnified party.
(b) The party indemnified hereunder (the
"Indemnitee") shall promptly notify the indemnifying party (the
"Indemnitor") of the existence of any claim, demand or other
matter involving liabilities to third parties to which the
Indemnitor's indemnification obligations would apply and shall
give the Indemnitor a reasonable opportunity to defend the same
at its own expense and with counsel of its own selection (who
shall be approved by the Indemnitee, which approval shall not be
unreasonably withheld or delayed); provided, however, that the
Indemnitee at all times also shall have the right to fully
participate in the defense at its own expense. If the Indemnitor
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within a reasonable time after such notice fails to defend such
claim, or fails to adequately pursue such defense once commenced,
the Indemnitee shall have the right, but not the obligation, to
undertake the defense of, and to compromise or settle (exercising
reasonable business judgment), the claim or other matter on
behalf, for the account and at the risk and expense of the
Indemnitor. Except as provided in the preceding sentence, the
Indemnitee shall not compromise or settle the claim or other
matter without the prior written consent of the Indemnitor in
each instance. If the claim is one that cannot by its nature be
defended solely by the Indemnitor, the Indemnitee shall make
available all information and assistance that the Indemnitor
reasonably may request; provided, however, that any associated
expenses shall be paid by the Indemnitor.
8. Survival of Representations, Warranties and
Agreements. All representations, warranties and agreements made
by the parties hereto in this Agreement (including, but not
limited to, statements contained in any schedule or certificate
or other instrument delivered by or on behalf of any party hereto
or in connection with the transactions contemplated hereby) shall
survive the date hereof and any investigations, inspections,
examinations or audits made by or on behalf of any party.
9. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto pertaining to the
subject matter hereof, and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or
written, relating to the subject matter of this Agreement. No
supplement, modification, waiver or termination of this Agreement
shall be valid unless executed by the party to be bound thereby.
No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute
a continuing waiver unless otherwise expressly provided.
10. Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be
deemed to have been given (i) if personally delivered, when so
delivered, (ii) if mailed, one (1) week after having been placed
in the mail, registered or certified, postage prepaid, addressed
to the party to whom it is directed at the address set forth on
the signature page hereof or (iii) if given by telex or
telecopier, when such notice or other communication is
transmitted to the telex or telecopier number specified on the
signature page hereof and the appropriate answer back or
telephonic confirmation is received. Any party may change the
address to which such notices are to be addressed by giving the
other parties notice in the manner herein set forth.
11. Governing Law. The validity, construction and
interpretation of this Agreement shall be governed in all
respects by the laws of the State of Delaware applicable to
contracts made and to be performed wholly within that State.
12. Headings. Section and subsection headings are not
to be considered part of this Agreement and are included solely
for convenience and reference and in no way define, limit or
describe the scope of this Agreement or the intent of any
provisions hereof.
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13. Third Parties. Nothing in this Agreement,
expressed or implied, is intended to confer upon any person other
than the parties hereto and their successors and assigns any
rights or remedies under or by reason of this Agreement.
14. Injunctive Relief. Keystone and the Shareholders
each hereby acknowledge and agree that the obligations of the
Shareholders hereunder are unique and Republic would not have an
adequate remedy at law for money damages in the event of the
breach or threatened breach of any provision of this Agreement.
Accordingly, Republic shall be entitled to temporary and
injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions, to enforce
such provisions without the necessity of proving actual damages
or being required to post any bond or undertaking in connection
with any such action. This provision with respect to injunctive
relief shall not diminish, however, the right of Republic to any
other relief or to claim and recover damages.
15. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each one of which
shall be deemed an original, but all of which shall constitute
one and the same instrument.
16. Further Assurances. Each party hereto shall, from
time to time at and after the date hereof, execute and deliver
such instruments, documents and assurances and take such further
actions as the other party may reasonably request to carry out
the purpose and intent of this Agreement.
17. Jurisdiction.
(a) Each party hereto irrevocably submits to the
non-exclusive jurisdiction of any court of the State of Delaware
over any suit, action or proceeding arising out of or relating to
this Agreement. To the fullest extent it may effectively do so
under applicable law, each party irrevocably waives and agrees
not to assert, by way of motion, as a defense or otherwise, any
claim that it is not subject to the jurisdiction of any such
court, any objection that it may now or hereafter have to the
establishment of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit,
action or proceeding brought in any such court has been brought
in an inconvenient forum.
(b) Each party hereto agrees, to the fullest
extent it may effectively do so under applicable law, that a
judgment in any suit, action or proceeding of the nature referred
to hereinabove brought in any such court shall be conclusive and
binding upon such person and its successors and assigns and may
be enforced in the courts of the State of Delaware (or any other
courts to the jurisdiction of which such person is or may be
subject) by a suit upon such judgment.
(c) Each party hereto consents to process being
served in any suit, action or proceeding of the nature referred
to hereinabove by mailing a copy thereof by registered or
certified mail, postage prepaid, return receipt requested, to the
address of the other set forth in Section 15. Each party agrees
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that such service (i) shall be deemed in every respect effective
service of process upon such person in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by
law, be taken and held to be valid personal service upon and
personal delivery to such person.
18. Defined Terms. Capitalized terms used and not
otherwise defined in this Agreement shall have the respective
meanings assigned to them in the Merger Agreement.
19. Severable Provisions. If any term, provision,
covenant or restriction herein, or the application thereof to any
circumstance, shall, to any extent, be held by a court of
competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions
herein and the application thereof to any other circumstances,
shall remain in full force and effect, shall not in any way be
affected, impaired or invalidated, and shall be enforced to the
fullest extent permitted by law.
IN WITNESS WHEREOF, the undersigned parties have executed
and delivered this Agreement as of the day and year first above
written.
KEYSTONE: KEYSTONE AUTOMOTIVE INDUSTRIES, INC.
By_________________________________
Xxxxxxx X. Xxxxxxx,
Chief Executive Officer
000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
REPUBLIC: REPUBLIC AUTOMOTIVE PARTS, INC.
By_________________________________
Xxxxx X. Xxxxxxxx, President
000 Xxxxxx Xxxx Xxxxxx,
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
SHAREHOLDERS:
______________________________
Xxxxxx X. Xxxxx
Number of shares:
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______________________________
Xxxxxxx X. Xxxxxxx
Number of shares:
______________________________
Xx X. Xxxxx
Number of shares:
______________________________
Xxx X. Xxxx
Number of shares:
______________________________
Xxxx X. Xxxxxxx
Number of shares:
______________________________
Xxxxxxxxxxx Xxxxxxx
Number of shares:
______________________________
Xxxxx X. Xxxxxxxx
Number of shares:
______________________________
Xxxxxxx X. XxXxxx
Number of shares:
______________________________
Xxxxxx X. Xxxxxxx
Number of shares:
______________________________
Xxxx Xxxxxxxx
Number of shares:
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SPOUSAL CONSENT
I am the spouse of __________________, a Shareholder in
the above Agreement. I understand that I may consult independent
legal counsel as to the effect of this Agreement and the
consequences of my execution of this Agreement and, to the extent
I felt it necessary, I have discussed it with legal counsel. I
hereby confirm this Agreement and agree that it shall bind my
interest in the Shares, if any.
___________________________________________
(Print Name)
____________________________________________
(Signature)
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