EXHIBIT 10.5
EXECUTION COPY
STOCKHOLDERS AGREEMENT
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THIS STOCKHOLDERS AGREEMENT (this "Agreement") is made as of October 30,
2003 by and among (i) Keystone Automotive Holdings, Inc., a Delaware corporation
(the "Company"), (ii) each of the Persons listed on Schedule I attached hereto
(collectively, the "Xxxx Group") and (iii) each of the other Persons listed on
the signature pages attached hereto (each such other Person listed on the
signature pages attached hereto, the Xxxx Group and each other Person who from
time to time becomes a party hereto by executing and delivering a joinder
substantially in the form attached hereto as Exhibit A are collectively referred
to herein as the "Stockholders" and each, individually, as a "Stockholder").
WHEREAS, the Company, as of the date hereof, is authorized by its
Certificate of Incorporation to issue capital stock consisting of 20,000,000
shares of its Class L Common Stock, par value $0.01 per share (the "Class L
Common"), and 180,000,000 shares of its Class A Common Stock, par value $0.01
per share (the "Class A Common"). The Class L Common and the Class A Common are
collectively referred to herein as "Common Stock."
WHEREAS, the Xxxx Group and the other Persons listed on the signature pages
attached hereto own as of the date hereof the number of shares of Common Stock
set forth opposite their names on Schedule II attached hereto.
WHEREAS, the parties hereto desire to establish the composition of the
Company's board of directors (the "Board"), to restrict the sale, assignment,
transfer, encumbrance or other disposition of the Common Stock, to provide for
certain additional covenants and to provide for certain rights and obligations
in respect thereto as hereinafter provided. Unless otherwise provided in this
Agreement, capitalized terms used herein shall have the meanings set forth in
Section 12 hereof.
NOW, THEREFORE, the parties to this Agreement hereby agree as follows:
1. Voting Agreement.
(a) Each holder of Stockholder Shares shall vote all of such holder's
Stockholder Shares and shall take all other necessary or desirable actions
within such holder's control (whether in such holder's capacity as a
stockholder, director or officer of the Company or otherwise, and including,
without limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings) and
the Company shall take all necessary and desirable actions within its control
(including, without limitation, calling special meetings of the Board and
stockholder meetings) so that:
(i) the authorized number of directors on the Board shall be
established by the holders of a majority of the Xxxx Shares (the "Xxxx
Holders"), which authorized number of directors shall initially be six;
(ii) the following persons shall be elected to the Board:
(A) any one person (if any) having a contractual right to be
nominated to the Board (so long as such right remains in effect);
(B) so long as Advent and its Permitted Transferees continue to
hold at least 70% of the Advent Shares held by Advent as of the date hereof, one
person designated by Advent Global; and
(C) a number of persons designated by the Xxxx Holders equal to
the remaining number of members of the Board, which depending upon the number of
directors that the Xxxx Holders elect to designate from time to time may, at
their election, constitute a majority of the Board;
(iii) at all times, the composition of the board of directors of each
of the Company's Subsidiaries, if any (each, a "Sub Board"), shall be the same
as that of the Board, unless otherwise approved by the Xxxx Holders;
(iv) any committee or subcommittee of the Board or any Sub Board
(including any compensation committee or compensation subcommittee) shall be
created only upon the approval of the Xxxx Holders and a majority of the members
of such committee shall consist of members of the Board or such Sub Board
designated by the Xxxx Holders pursuant to Section 1(a)(ii)(C) above and any
action taken by such committee or subcommittee shall not cause any conflict with
any provision of this Agreement.
(b) The removal from the Board (with or without cause) of any person
designated under Section 1(a) above by the Xxxx Holders shall be at the written
request of the Xxxx Group and only upon such written request and under no other
circumstances (except as otherwise required by law).
(c) The removal from the Board without cause of any person designated
under Section 1(a) above by the Advent Global shall be at the written request of
Advent Global and only upon such written request and under no other
circumstances (except as otherwise required by law).
(d) In the event that any person designated under Section 1(a) above by
the Xxxx Holders or Advent Global for any reason ceases to serve as a member of
the Board during such person's term of office, the person who will fill the
resulting vacancy on the Board shall be designated by the Xxxx Holders or Advent
Global, respectively, and the Stockholders agree to vote their Common Stock in
furtherance thereof.
(e) If any party eligible to designate a member of the Board under Section
1(a) above fails to so designate, the individual previously holding such
position shall be elected to such position, unless such individual has been
removed as a member of the Board or fails or declines to serve.
(f) So long as the Xxxx Holders have the right to designate members of the
Board, Xxxx Capital VII Coinvestment Fund, L.P. shall have the right to
designate one of the members of the Board designated by the Xxxx Holders.
(g) The Company shall obtain and maintain a directors' and officers'
insurance policy covering the directors and officers of the Company as the Board
reasonably determines in good faith is appropriate giving regard to the
Company's capital structure and business operations.
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(h) In the event that any provision of the Company's bylaws or Certificate
of Incorporation is inconsistent with any provision of this Section 1, the
Company and the Stockholders shall take such action as may be necessary to amend
any such provision in the Company's bylaws or Certificate of Incorporation to
remedy such inconsistency.
2. Provisions Concerning the Transfer of Stockholder Shares.
(a) General Restrictions on Transfer. Without the prior written consent of
the Xxxx Group, no holder of Stockholder Shares (other than holders of Xxxx
Shares) shall directly or indirectly sell, transfer (including by operation of
law), assign, pledge, encumber or otherwise dispose of (including to the Company
or any of its Subsidiaries) any interest in (a "Transfer") any Stockholder
Shares, other than (i) in connection with an Approved Sale, (ii) in connection
with a Put or (iii) in accordance with the provisions of Section 2(b), 2(c), or
2(d) of this Agreement.
(b) Right of First Offer. At least thirty (30) days prior to any Transfer
(other than with respect to a Put, a Public Sale, an Approved Sale or to a
Permitted Transferee) of any Stockholder Shares by any Additional Stockholder or
any of such Person's Permitted Transferees, the Person making such Transfer (the
"Offering Stockholder") shall deliver a written notice (the "Offer Notice") to
the Company, the Xxxx Group and the other Additional Stockholders (the
"Non-Offering Additional Stockholders") specifying in reasonable detail the
number of Additional Stockholder Shares proposed to be Transferred, the proposed
purchase price (which shall be payable solely in cash) and the other material
terms and conditions of the Transfer. The Company may elect to purchase all or
any portion of such Additional Stockholder Shares to be Transferred, upon the
same terms and conditions as those set forth in the Offer Notice, by delivering
a written notice of such election to the Offering Stockholder, the Xxxx Group
and the Non-Offering Additional Stockholders within fifteen (15) days after the
Offer Notice has been delivered to the Company. If the Company has not elected
to purchase all of the Additional Stockholder Shares to be Transferred within
such period, the Xxxx Group may elect to purchase all or any portion of the
Additional Stockholder Shares to be Transferred, upon the same terms and
conditions as those set forth in the Offer Notice, by giving written notice of
such election to the Additional Transferring Stockholder and the Non-Offering
Additional Stockholders within thirty (30) days after the Offer Notice has been
given to the Company. If the Xxxx Group has not elected to purchase all of the
Additional Stockholder Shares to be Transferred within such period, the
Non-Offering Additional Stockholders may elect to purchase all or any portion of
the Additional Stockholder Shares to be Transferred, upon the same terms and
conditions as those set forth in the Transfer Notice, by giving written notice
of such election to the Offering Stockholder within forty-five (45) days after
the Transfer Notice has been given to the Company (the "Election Period"). If
the Non-Offering Additional Stockholders have in the aggregate elected to
purchase more than the number of Additional Stockholder Shares being offered by
the Offering Stockholder, the Additional Stockholder Shares shall be allocated
among the Non-Offering Additional Stockholders electing to purchase shares based
upon each such Non-Offering Additional Stockholder's proportionate ownership of
all Stockholders Shares owned by Stockholders other than the Transferring
Stockholder. If the Company, the Xxxx Group and the Non-Offering Additional
Stockholders elect to purchase fewer than all of the Additional Stockholder
Shares specified in the Transfer Notice and if the terms and conditions of this
Section 2(b) have been met, then the Offering Stockholder may transfer the
remaining
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portion of the Additional Stockholder Shares not specified in the Offer Notice
at a price and on terms no more favorable to the transferee(s) thereof than
specified in the Offer Notice during the thirty-day period immediately following
the expiration of the Election Period. Any Additional Stockholder Shares not
transferred within such thirty-day period will continue to be subject to the
provisions of this Section 2(b). If the Company, Xxxx Group or any of the
Non-Offering Additional Stockholders have elected to purchase Additional
Stockholder Shares hereunder, the transfer of such shares shall be consummated
as soon as practicable after the delivery of the election notice(s) to the
Offering Stockholder, but in any event within fifteen (15) days after the
expiration of the Election Period.
(c) Participation Rights.
(i) At least 15 days prior to any Transfer of any Xxxx Shares, the
holder(s) of Xxxx Shares intending to Transfer Xxxx Shares (the "Transferring
Stockholder") will deliver to the other Stockholders (collectively, the "Other
Stockholders") a written notice (a "Sale Notice") specifying in reasonable
detail the identity of the prospective transferee(s) and the terms and
conditions of the contemplated Transfer. The Other Stockholders may elect to
participate in the contemplated Transfer by delivering written notice to the
Transferring Stockholder within 15 days after delivery of the Sale Notice. If
any Other Stockholders have elected to participate in such Transfer, each of the
Transferring Stockholder and such Other Stockholders will be entitled to sell in
the contemplated Transfer, at the same price and (subject to the last sentence
of this Section 2(c)(i)) on the same terms, a number of shares of each class of
Common Stock being transferred equal to the product obtained by multiplying (A)
the quotient determined by dividing (x) the number of shares of such class of
Common Stock owned by such Person by (y) the aggregate number of shares of such
class of Common Stock then held by all Persons participating in such Transfer,
including the Transferring Stockholder (such Person's "Pro Rata Share") by (B)
the number of shares of such class of Common Stock to be sold in the
contemplated Transfer. If any Person participating in such Transfer elects to
Transfer less than its Pro Rata Share, the shares which such Person had the
right, but did not elect, to Transfer will be reoffered to the Persons
participating in such Transfer who elected to Transfer their full Pro Rata Share
(pro rata among such Persons based on their respective Pro Rata Shares), and so
on until the Persons participating in such Transfer have elected to Transfer all
shares to be sold in the contemplated Transfer. For purposes of determining the
respective Pro Rata Shares, each Person will be deemed to hold all Common Stock
held by them and their Affiliates (provided that no share of Common Stock shall
be counted more than once for this purpose) and all such affiliated Persons
shall be treated as a single Person. Notwithstanding the foregoing, in the event
that a Transferring Stockholder intends to Transfer shares of more than one
class of Common Stock, the Other Stockholders participating in such Transfer
shall, to the extent they hold the classes of Common Stock intended to be
Transferred, be required to sell in the contemplated Transfer a pro rata portion
of shares of all such classes of Common Stock, which portion shall be determined
in the manner set forth immediately above.
(ii) The Transferring Stockholder will use reasonable efforts to
obtain the agreement of the prospective transferee(s) to the participation of
the electing Other Stockholders in any contemplated Transfer, and the
Transferring Stockholder will not Transfer any of its shares of Common Stock to
the prospective transferee(s) unless simultaneously with such Transfer (A) the
prospective transferee(s) purchases, at the same price and on the same terms,
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from the Other Stockholders the shares of Common Stock which they are entitled
to sell to such prospective transferee pursuant to Section 2(c)(i) above or (B)
the Transferring Stockholder purchases, at the same price and on the same terms,
the number of shares of such class of Common Stock from the Other Stockholders
which the Other Stockholders would have been entitled to sell pursuant to
Section 2(c)(i) above.
(iii) The provisions of this Section 2(c) shall not apply to any
Transfer by any holder of Xxxx Shares (A) in a Public Sale, (B) to any employee
of the Company or any of its Subsidiaries as part of any compensation
arrangement, (C) to any member of the Board as part of any compensation
arrangement, (D) to any Affiliate of such holder of Xxxx Shares (other than the
Company and those referred to in clause (E) of this sentence) and (E) to the
partners, members or beneficiaries of the holders of Xxxx Shares. The provisions
of this Section 2(c) will continue to be applicable to Xxxx Shares after any
Transfer thereof pursuant to clause (D) or (E) of the first sentence of this
Section 2(c)(iii). Any transferee of Xxxx Shares shall agree, prior to any
Transfer pursuant to this Section 2(c), in writing to be bound by the provisions
of this Agreement by executing and delivering to the Company a joinder in
substantially the form attached hereto as Exhibit A.
(iv) The Transferring Stockholder and the Other Stockholders will
bear their pro rata share (based upon the proceeds to be received by such
Persons) of the costs of any Transfer pursuant to this Section 2(c) to the
extent such costs are incurred for the benefit of all Persons participating in
the Transfer and are not otherwise paid by the Company or the acquiring party.
Costs incurred by Persons participating in the Transfer on their own behalf will
not be considered costs of the Transfer hereunder.
(d) Permitted Transfers. The restrictions contained in this Section 2
shall not apply with respect to any Transfer of Stockholder Shares by (i) any
Additional Stockholder that is an individual pursuant to applicable laws of
descent and distribution or to any member of such Additional Stockholder's
Family Group and (ii) any Additional Stockholder that is an entity to its
Affiliates; provided, that, in each case, the restrictions contained in this
Section 2 shall continue to be applicable to such Stockholder Shares after any
such Transfer; provided, further, that the transferees of such Stockholder
Shares shall have agreed in writing to be bound by the provisions of this
Agreement which affect the Stockholder Shares so transferred by executing a
joinder in substantially the form attached hereto as Exhibit A. All transferees
permitted under this Section 2(d) are collectively referred to herein as
"Permitted Transferees."
(e) Termination of Restrictions. The restrictions set forth in this
Section 2 shall continue with respect to each Stockholder Share until the
earlier of (i) the Transfer of such Stockholder Share in a Public Sale or an
Approved Sale, or (ii) the consummation of a Public Offering.
3. Approved Sale.
(a) If the Xxxx Holders request and the Board approves (i) a Transfer of a
majority of the Company's assets determined on a consolidated basis or a
majority of the Company's outstanding Common Stock (whether by merger (including
one in which the Company is the surviving corporation), recapitalization,
consolidation, reorganization, combination or otherwise)
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to any Independent Third Party or group of Independent Third Parties or (ii) a
Transfer of any shares of Common Stock to any Independent Third Party or group
of Independent Third Parties in connection with a Strategic Transaction
(collectively an "Approved Sale"), each holder of Stockholder Shares, in such
holder's capacity as a stockholder of the Company and not in such holder's
capacity as a director if such holder then serves on the Board, will vote for,
consent to and raise no objections against such Approved Sale. If the Approved
Sale is structured as (i) a merger (including one in which the Company is the
surviving corporation) or consolidation, each holder of Stockholder Shares will
waive any dissenter's rights, appraisal rights or similar rights in connection
with such merger or consolidation and will not otherwise exercise any such right
or (ii) Transfer of stock (including by recapitalization, consolidation,
reorganization, combination or otherwise), each holder of Stockholder Shares
will agree to sell all of its Stockholder Shares and rights to acquire
Stockholder Shares on the terms and conditions approved by the Xxxx Holders,
provided, that, if a Transfer made pursuant to this clause (ii) involves a
Transfer of less than all of the then outstanding Stockholder Shares, each
holder of Stockholder Shares shall participate in such Transfer on a pro rata
basis (based on the number of Stockholder Shares held by such Stockholder). Each
holder of Stockholder Shares shall be obligated to join on a pro rata basis
(based on the number of Stockholder Shares to be sold) in any indemnification or
other obligations that the sellers of Stockholder Shares are required to provide
in connection with the Approved Sale (other than any such obligations that
relate solely to a particular Stockholder, such as indemnification with respect
to representations and warranties given by a Stockholder regarding such
Stockholder's title to and ownership of Stockholder Shares, in respect of which
only such Stockholder shall be liable); provided, that no holder shall be
obligated in connection with such indemnification or other obligations with
respect to an amount in excess of the consideration received by such holder in
connection with such transfer. Each holder of Stockholder Shares will take all
reasonable actions in connection with the consummation of the Approved Sale as
requested by the Xxxx Holders (which actions may include, at the request of the
Xxxx Holders, continuing arrangements among the stockholders of the Company
substantially similar to the terms of this Agreement).
(b) The obligations of the holders of Common Stock with respect to an
Approved Sale are subject to the satisfaction of the following conditions: (i)
upon the consummation of the Approved Sale, each holder of Common Stock will
Transfer such Common Stock on the same terms and will receive the same form of
consideration and the same portion of the aggregate consideration that such
holders of Common Stock would have received if such aggregate consideration had
been distributed by the Company in a complete liquidation pursuant to the rights
and preferences set forth in the Certificate of Incorporation as in effect
immediately prior to such Approved Sale; (ii) each holder of shares of a class
of Common Stock will be given the same consideration with respect to each share
of such class, and if any holders of a class of Common Stock are given an option
as to the form and amount of consideration to be received, each holder of such
class of Common Stock will be given the same option with respect to each share
of such class; and (iii) each holder of then currently exercisable rights to
acquire shares of a class of Common Stock will be given an opportunity to
exercise such rights prior to the consummation of the Approved Sale and
participate in such sale as holders of such class of Common Stock.
(c) If the Company or the holders of the Company's securities enter into
any negotiation or transaction for which Rule 506 (or any similar rule then in
effect) promulgated by
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the Securities and Exchange Commission may be available with respect to such
negotiation or transaction (including a merger, consolidation or other
reorganization), the holders of Stockholder Shares will, at the request of the
Company, appoint a purchaser representative (as such term is defined in Rule
501) reasonably acceptable to the Company. If any holder of Stockholder Shares
appoints a purchaser representative designated by the Company, the Company will
pay the fees of such purchaser representative, but if any holder of Stockholder
Shares declines to appoint the purchaser representative designated by the
Company such holder will appoint another purchaser representative, and such
holder will be responsible for the fees of the purchaser representative so
appointed. This Section 3(c) shall apply only to holders of Stockholder Shares
that are required to appoint a purchaser representative under Regulation D (or
any successor regulation then in effect) promulgated by the Securities and
Exchange Commission.
(d) Subject to Section 3(c) above, holders of Stockholder Shares will bear
their pro rata share (based upon the proceeds to be received by holders of
Stockholder Shares) of the costs of any sale of Stockholder Shares pursuant to
an Approved Sale to the extent such costs are incurred for the benefit of all
holders of Common Stock and are not otherwise paid by the Company or the
acquiring party. For purposes of this Section 3(d) above, costs incurred in
exercising reasonable efforts to take all necessary actions for the consummation
of an Approved Sale in accordance with Section 3(a) above shall be deemed to be
for the benefit of all holders of Common Stock. Costs incurred by holders of
Stockholder Shares on their own behalf will not be considered costs of the
transaction hereunder.
(e) The terms and conditions of this Section 3 shall terminate upon a
Public Offering.
4. Preemptive Rights.
(a) Except in connection with (i) issuances in a Public Offering, (ii) an
Approved Sale, (iii) upon the conversion or exercise of securities convertible
into or containing options or rights to acquire capital stock of the Company (to
the extent such securities were issued in compliance with the provisions of this
Section 4) and (iv) issuances to the Xxxx Group pursuant to Section 6 hereof, if
the Company authorizes the issuance or sale of any capital stock of the Company,
or any securities convertible into or containing options or rights to acquire
capital stock of the Company, to any holder of Xxxx Shares or any Affiliate of
any member of the Xxxx Group, the Company shall offer to sell to each holder of
Stockholder Shares a portion of such stock or securities equal to the quotient
determined by dividing (A) the number of shares of Common Stock held by such
holder of Stockholder Shares by (B) the total number of shares of outstanding
Common Stock (in each case on a fully diluted basis but excluding any option to
acquire shares of capital stock of the Company other than any such option the
exercise price of which at the time of the issuance giving rise to the
preemptive right is less than the fair market value (as determined by the Board)
of such shares of capital stock). If the holders of Xxxx Shares are also
required to acquire other securities or rights in connection with their
purchase, the holders of Stockholder Shares exercising their rights pursuant to
this Section 4(a) shall also be required to purchase the same types of
securities or rights (on the same terms and in the same ratios) that such other
Persons are required to purchase. The purchase price for all stock and
securities offered to each such holder of Stockholder Shares shall be the same
price per share being paid by the holders of Xxxx Shares and shall be payable at
the same time as the closing of
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the sale to the holders of Xxxx Shares in cash by wire transfer of immediately
available funds. Any Person exercising rights under this Section 4 who defaults
in whole or in part in payment with respect to the purchase of any securities
pursuant to this Section 4 automatically and irrevocably forfeits the right to
participate in any future issuances to which this Section 4(a) is applicable.
(b) In order to exercise its purchase rights hereunder, each holder of
Stockholder Shares must deliver a written notice to the Company describing its
election hereunder within 30 days after receipt of written notice from the
Company describing in reasonable detail the stock or securities being offered,
the purchase price thereof, the payment terms and such holder's percentage
allotment.
(c) Upon the expiration of the offering periods described above, the
Company shall be entitled to sell such stock or securities which the holders of
Stockholder Shares have not elected to purchase during the 270 days following
such expiration on terms and conditions no more favorable to the purchasers
thereof than those offered to holders of Stockholder Shares. Any stock or
securities offered or sold by the Company to any Person after such 270 day
period must be reoffered to the holders of Stockholder Shares pursuant to the
terms of this Section 4.
(d) The provisions of this Section 4 will terminate and be of no further
force or effect upon the consummation of a Public Offering.
(e) In the event that any holder of Stockholder Shares acquires capital
stock or other securities convertible into or containing options or rights to
acquire capital stock pursuant to this Section 4 in a preferred stock or debt
offering by the Company which includes an offering or sale to both a member of
the Xxxx Group and an Independent Third Party, each holder of Stockholder Shares
agrees to exercise all the rights it may have with respect to the Company (such
as covenants and remedies) arising out of such securities acquired pursuant to
this Section 4 in the same manner as the Xxxx Group.
5. Put Right.
(a) With respect to any Management Stockholder, within 90 days following
the later to occur of (i) the date on which such Management Stockholder's
employment with the Company is terminated (A) by reason of such Management
Stockholder's death, disability or retirement, (B) by such Management
Stockholder for Good Reason (as defined in such Management Stockholder's
employment agreement with the Company) or (C) by the Company without Cause and
(ii) the seventh anniversary of the Closing Date if on such date such Management
Stockholder's employment with the Company has terminated, such Management
Stockholder (the "Putting Stockholder") shall have the right to require the
Company to repurchase all (but not less than all) of the Additional Shares held
by the Putting Shareholder (the "Put") by delivering a written notice to the
Company specifying the number of shares to be repurchased (the "Put Notice").
(b) Promptly following delivery of the Put Notice, the Company and the
Putting Stockholder shall in good faith determine the Put Price as provided
hereunder, and subject to the provisions hereof, within ten (10) days after the
determination of the Put Price, the Company
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shall purchase and the Putting Stockholder shall sell the number of the Putting
Shareholder's Additional Stockholder Shares specified in the Put Notice at a
mutually agreeable time and place (the "Put Closing"). Notwithstanding anything
in this Section 5 to the contrary, if (and only if) it is determined, in
accordance with the terms hereof, that the Put Price is less than the Original
Cost of the Additional Stockholder Shares being repurchased, then the Putting
Stockholder shall have the right to rescind the Put Notice within three (3) days
after the determination of the Put Price and such Additional Stockholder Shares
shall remain subject to repurchase pursuant to the terms and conditions of this
Section 5.
(c) At the Put Closing, the Putting Stockholder shall deliver to the
Company certificates representing the Putting Stockholder's Additional
Stockholder Shares to be repurchased by the Company free and clear of all liens
and encumbrances and duly endorsed in blank or accompanied by duly executed
forms of assignment, and the Company shall deliver to the Putting Stockholder
the Put Price by cashier's or certified check payable to the Putting Stockholder
or by wire transfer of immediately available funds to an account designated by
the Putting Stockholder; provided, that the Company shall have no obligation to
so pay the Put Price if and to the extent such payment is prohibited by the
provisions of applicable state law or by the provisions of the Company's debt
instruments (including, without limitation, the Senior Credit Agreement) or
would cause the Company to violate any financial ratio or minimum working
capital level in any such debt instrument, until such time as such prohibitions
are no longer in effect, whereupon such Put Price shall be paid without
interest. Notwithstanding anything to the contrary in this Section 5(c), if and
to the extent that the Put Price exceeds the Original Cost of the Additional
Stockholder Shares to be repurchased, the amount of such excess will not be paid
in cash but instead shall be paid in the form of a subordinated promissory note
(a "Put Note"), bearing interest at the then applicable federal rate and
otherwise in the form attached hereto as Exhibit B.
(d) The "Put Price" of the Putting Stockholders Additional Stockholder
Shares to be repurchased shall mean a price equal to 80% of the Fair Market
Value of such Additional Stockholder Shares. Any fees and expenses of an
Independent Appraiser incurred in connection with the determination of the Put
Price shall be borne equally by the Company and the Putting Stockholder.
6. Further Investment. The parties hereto acknowledge and agree that at any
time and from time to time the Xxxx Group shall have the option to purchase
additional shares of Common Stock at Original Cost for an aggregate purchase
price not to exceed $3,500,000; but only to the extent that the proceeds from
such purchase are used by the Company to satisfy the Company's obligations under
the Holdings Term Loan.
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7. Covenants. The Company covenants and agrees that, so long as the Xxxx Group
continues to hold at least 50% of the Xxxx Shares held by it on the Closing
Date, the Company shall comply with the covenants set forth in this Section 7.
Notwithstanding anything in this Section 7 to the contrary, as long as Bear
Xxxxxxx continues to hold at least 70% of the Additional Stockholders Shares
held by it on the Closing Date, the Company shall deliver to Bear Xxxxxxx the
information described in Sections 7(b), 7(c), 7(d) and 7(e) hereof in accordance
with the terms of such Sections.
(a) The Company shall, and shall cause each of its Subsidiaries to, afford
to the Xxxx Group and its Affiliates, advisors and other representatives
reasonable access during normal business hours upon reasonable advance notice to
the Company and without unreasonably interfering with the Company's and its
Subsidiaries' normal business operations, to the Company's and its Subsidiaries'
respective properties, assets records, files and any other information as the
Xxxx Group may reasonably request and shall permit the Xxxx Group to meet with
the Company's and its Subsidiaries' respective officers and other management
personnel and professional advisors to obtain such information regarding the
Company and its Subsidiaries and their respective businesses and prospects as
the Xxxx Group may reasonably request;
(b) Prior to the beginning of each fiscal year (but in no event later than
December 1 of the prior fiscal year), the Company shall prepare and deliver to
each Stockholder (other than Advent and its Permitted Transferees) an annual
budget for such fiscal year for the Company and its Subsidiaries in form and
substance reasonably satisfactory to the Xxxx Group (each, an "Annual Budget").
(c) The Company shall deliver to each Stockholder (other than Advent and
its Permitted Transferees), as soon as practicable after the last day of each
month (other than any day that is also the last day of a fiscal quarter), but in
no event later than 30 days following the end of such month or such later date
as such financial statements are delivered to the Company's senior lenders
pursuant to the Senior Credit Agreement, a copy of (i) an unaudited consolidated
balance sheet for the Company and its Subsidiaries as at the end of such month
and (ii) unaudited consolidated statements of income, retained earnings and
consolidated cash flows of the Company and its Subsidiaries for such month. The
financial information provided pursuant to this Section 7(c) shall be
accompanied by a report showing the Company's performance during the period and
through the date covered by such financial information relative to the Annual
Budget applicable to such period and relative to the Company's performance
during the prior fiscal year for the equivalent period and through the
equivalent date. The Company shall cease delivering the information required by
this Section 7(c) after the Company is a Public Company.
(d) The Company shall deliver to each Stockholder (other than Advent and
its Permitted Transferees), as soon as practicable after the end of each of the
first three quarterly fiscal periods in each fiscal year of the Company (but in
no event later than 45 days following the end of such periods or such later date
as such financial statements are delivered to the Company's senior lenders
pursuant to the Senior Credit Agreement), a copy of (i) an unaudited
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such fiscal quarter, and (ii) unaudited consolidated statements of income,
retained earnings and consolidated cash flows of the Company and its
Subsidiaries for such quarter and (in the case of the second and third quarters,
for the portion of the fiscal year ending with such quarter), subject to normal
10
year end audit adjustments. Such statements shall be prepared in accordance with
generally accepted accounting principles in the United States of America as in
effect from time to time ("GAAP"). The financial information provided pursuant
to this Section 7(d) shall be accompanied by a report showing the Company's
performance during the period and through the date covered by such financial
information relative to the Annual Budget applicable to such period and relative
to the Company's performance during the prior fiscal year for the equivalent
period and through the equivalent date. The Company shall cease delivering the
information required by this Section 7(d) after the Company is a Public Company.
(e) The Company shall deliver to each Stockholder (other than Advent and
its Permitted Transferees), as soon as practicable after the end of each fiscal
year of the Company (but in no event later than 90 days following the end of
such year or such later date as such financial statements are delivered to the
Company's senior lenders pursuant to the Senior Credit Agreement), a copy of (A)
an audited consolidated balance sheet of the Company and its Subsidiaries as at
the end of such year, and (B) audited consolidated statements of income,
retained earnings and consolidated cash flows of the Company and its
Subsidiaries for such year. Such statements shall be prepared in accordance with
GAAP. The financial information provided pursuant to this Section 7(e) shall be
accompanied by a report showing the Company's performance during the period and
through the date covered by such financial information relative to the Annual
Budget applicable to such period and relative to the Company's performance
during the prior fiscal year. The Company shall cease delivering the information
required by this Section 7(e) after the Company is a Public Company.
(f) The Company shall, and shall cause each of its Subsidiaries to,
provide prompt written notice to the Xxxx Group of any report, notice or other
communication received by the Company or any of its Subsidiaries from any of
their respective accountants or other professional advisors or from any
Governmental Authority. Such notice shall include a copy of such report, notice
or other communication.
(g) The Company shall, with respect to itself and each of its
Subsidiaries, maintain directors' and officer's and other insurance on terms and
conditions (including with respect to premiums, coverage amounts and
deductibles) reasonably satisfactory to the Xxxx Group, in each case naming the
Company or such Subsidiary, as applicable, as the beneficiary thereunder.
(h) The Company shall, and shall cause each of its Subsidiaries to, give
the Xxxx Group prompt written notice of any material development, whether
positive or negative, that affects, or would be reasonably likely to affect, the
respective businesses of the Company and its Subsidiaries.
8. Public Offering.
(a) In the event that the Board approves a Public Offering, the holders of
Stockholder Shares will use reasonable efforts to take all necessary action in
connection with the consummation of a Public Offering. In the event that such
Public Offering is an underwritten offering and the managing underwriters advise
the Company or the holders of the Xxxx shares determine that the Company's then
current Common Stock structure (other than the rights and obligations under this
Agreement) will adversely affect the marketability of the offering, each
11
holder of Stockholder Shares will consent to and vote for a recapitalization,
reorganization and/or exchange of the Common Stock into securities that the
managing underwriters, the Board and holders of a majority of the shares of
Common Stock then outstanding find acceptable and will take all necessary or
desirable actions in connection with the consummation of the recapitalization,
reorganization and/or exchange so long as in such recapitalization,
reorganization and/or exchange, all holders of Stockholder Shares receive the
same equity instruments in the same proportions. The parties agree that the
rights and obligations specified in this Agreement shall survive the
consummation of a Public Offering, except to the extent expressly provided
herein.
(b) In the event the Board approves a public offering or sale of the
Common Stock of the Company (or any other securities representing, or
exercisable for or convertible into, shares of Common Stock) pursuant to the
securities laws of a country other than the United States of America, the Board
shall have the power to amend this Agreement in such manner as it shall deem
reasonably necessary to ensure that the provisions of this Agreement that apply
to or are otherwise implicated by a Public Offering or a sale of securities in
accordance with the securities laws of the United States of America will apply
in a substantially similar manner to any offering or sale under such foreign
securities laws.
9. Confidential Information.
(a) Subject to Section 9(f) below, each Stockholder hereby agrees that it
shall not, and shall cause each member of such Stockholder's Stockholder Group
not to, disclose any part of the Confidential Information to any person or
entity other than (i) as required by law or legal process in accordance with
Section 9(b) below or (ii) to a member of such Stockholder's Stockholder Group.
(b) In the event any Stockholder or member of such Stockholder's
Stockholder Group is compelled by law or legal process to disclose any
Confidential Information, such Stockholder (i) shall promptly notify the Company
prior to the disclosure of such Confidential Information so that the Company may
seek an appropriate protective order or waive compliance with the provisions of
this Section 9 and (ii) in the absence of a protective order, shall permit the
Company to seek an order or other assurance that confidential treatment will be
accorded to such portion of the Confidential Information required to be
disclosed and shall reasonably cooperate in the Company's effort to obtain such
an order or assurance.
(c) Each Stockholder hereby agrees to use its commercially reasonable
efforts to make sure each member of such Stockholder's Stockholder Group is
aware of the confidentiality provisions contained in this Section 9 and agrees
to be bound by them. Notwithstanding the foregoing each Stockholder remains
strictly liable for any breaches hereof by any member of that Stockholder's
Stockholder Group; it being acknowledged that no Stockholder who is an
individual has any members in a Stockholder Group.
(d) If any Stockholder or member of such Stockholder's Stockholder Group
discloses any Confidential Information in violation of the terms and conditions
of this Section 9, then, upon such wrongful disclosure, such Stockholder shall
forfeit any right such Stockholder may have: (i) to designate a member of the
Board pursuant to Section 1(a) hereof of otherwise; (ii) to
12
participate in a Transfer of Stockholder Shares pursuant to Section 2(b) or 2(c)
hereof; (iii) to Transfer Stockholder Shares pursuant to Section 2(d) hereof;
(iv) to purchase Stockholder Shares pursuant to Section 4 hereof; (v) to
exercise a Put pursuant to Section 5 hereof and (vi) to sell Registrable
Securities pursuant to any Demand Registration or any Piggyback Registration (as
such terms are defined in the Registration Rights Agreement). Notwithstanding
anything in this Section 9 to the contrary, upon any forfeiture of the foregoing
rights by any Stockholder, such Stockholder's obligations under each of this
Agreement and the Registration Rights Agreement will remain in effect and
unchanged.
(e) The obligations of confidentiality in this Section 9 shall survive the
termination of this Agreement.
(f) Notwithstanding anything in this Section 9 to the contrary, the terms
of this Section 9 shall not apply to Advent.
10. Certain Approval Rights.
(a) So long as the Xxxx Group continues to hold at least 50% of the Xxxx
Shares held by it on the Closing Date, without the prior approval of the Xxxx
Group, the Company shall not, and shall cause each of its Subsidiaries not to:
(i) other than any transaction pursuant to any Transaction
Document, enter into any transaction or series of transactions with any
stockholder, director, officer, employee or Affiliate;
(ii) other than any securities issued pursuant to the 2003
Executive Stock Option Plan, authorize, create or issue any securities (or any
rights or securities directly or indirectly convertible into or exercisable or
exchangeable for securities);
(iii) invest in or purchase any interest in any company, partnership
or business (whether by a purchase of assets, purchase of stock, merger or
otherwise) or enter into any joint venture or similar transaction, or make any
investment outside the ordinary course of business;
(iv) engage in any transaction outside the ordinary course of
business, including entering into the ownership, active management or operation
of any business other than the businesses of the Company and its Subsidiaries as
of the date hereof or terminating any part of its current business;
(v) amend or modify any stock option plan or employee stock
ownership plan as in existence as of the Closing, including the 2003 Executive
Stock Option Plan, adopt any new stock option plan or employee stock ownership
plan or issue any shares of Common Stock to its employees other than pursuant to
the 2003 Executive Stock Option Plan;
(vi) create, incur, assume or suffer to exist any material
indebtedness other than such indebtedness incurred on or prior to the date
hereof and any amendment, restatement, renewal, replacement or refinancing
thereof;
13
(vii) make material capital expenditures (including material
expenditures under capital leases); or
(viii) initiate or settle any material claim, lawsuit or other legal
proceeding.
11. Legend. Each certificate evidencing Stockholder Shares and each certificate
issued in exchange for or upon the transfer of any Stockholder Shares (if such
shares remain Stockholder Shares as defined herein after such Transfer) shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TRANSFERS AND VOTING RESTRICTIONS PURSUANT TO A STOCKHOLDERS AGREEMENT
DATED AS OF OCTOBER 30, 2003 AMONG THE ISSUER OF SUCH SECURITIES (THE
"COMPANY") AND CERTAIN OF THE COMPANY'S STOCKHOLDERS, AS SUCH AGREEMENT MAY
BE AMENDED FROM TIME TO TIME. A COPY OF SUCH STOCKHOLDERS AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
REQUEST."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares outstanding prior to the date hereof. The legend set forth above shall be
removed from the certificates evidencing any shares which cease to be
Stockholder Shares in accordance with the terms of this Agreement.
12. Definitions.
"2003 Executive Stock Option Plan" means the Company's 2003 Executive Stock
Option Plan as approved by the Board, and as the same may be amended, restated
or otherwise modified from time to time.
"Additional Stockholders" means any Person (other than any member of the
Xxxx Group) who acquires Common Stock and who agrees to be bound by the terms of
this Agreement pursuant to the terms hereof.
"Additional Stockholder Shares" means any Common Stock acquired by
Additional Stockholders and any equity securities issued or issuable directly or
indirectly with respect to such Common Stock by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. Any particular shares constituting
Additional Stockholder Shares that are transferred in compliance with the
provisions of this Agreement shall continue to constitute Additional Stockholder
Shares in the hands of any such transferee; such shares will cease to be
Additional Stockholder Shares only when they have been (i) effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, or (ii) sold to the public pursuant to
Rule 144 (or by similar provisions then in force) under the Securities Act.
14
"Advent" means, collectively, (i) Advent Global, (ii) Advent Partners II
Limited Partnership, a Delaware limited partnership, and (iii) Advent Partners
GPE-IV Limited Partnership, a Delaware limited partnership.
"Advent Global" means Global Private Equity IV Limited Partnership, a
Delaware limited partnership.
"Advent Shares" means any Common Stock acquired by Advent and any equity
securities issued or issuable directly or indirectly with respect to such Common
Stock by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization.
"Affiliate" shall mean with respect to any Person, any other Person
controlling, controlled by or under common control with the Person.
"Agreement" has the meaning set forth in the preamble hereto.
"Annual Budget" has the meaning set forth in Section 7(b) hereof.
"Approved Sale" has the meaning set forth in Section 3 hereof.
"Xxxx Group" has the meaning set forth in the preamble hereto.
"Xxxx Holders" has the meaning set forth in Section 1 hereof.
"Xxxx Shares" means any Common Stock acquired by the Xxxx Group (or its
Affiliates) and any equity securities issued or issuable directly or indirectly
with respect to such Common Stock by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. Any particular shares constituting Xxxx Shares that are
Transferred in compliance with the provisions of this Agreement shall continue
to constitute Xxxx Shares in the hands of any such transferee; such shares will
cease to be Xxxx Shares only when they have been (i) Transferred to any employee
of the Company or any of its Subsidiaries or to any member of the Board, (ii)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, or (iii) sold to the public
pursuant to Rule 144 (or by similar provision then in force) under the
Securities Act.
"Bear Xxxxxxx" means, collectively, (i) Bear Xxxxxxx Merchant Banking
Partners II, L.P., a Delaware limited partnership, (ii) Bear Xxxxxxx Merchant
Banking Investors II, L.P., a Delaware limited partnership, (iii) Bear Xxxxxxx
MB-PSERS II, L.P., a Delaware limited partnership, (iv) The BSC Employee Fund
III, L.P., a Delaware limited partnership, and (v) The BSC Employee Fund IV,
L.P., a Delaware limited partnership.
"Board" has the meaning set forth in the recitals hereto.
"Business Day" means any day that is not a Saturday, a Sunday or any other
day on which banks are required or authorized by law to be closed in the State
of New York.
15
"Cause" means, with respect to any Putting Stockholder, the meaning
assigned to such term in such Putting Stockholder written employment
arrangements with the Company or any of its Subsidiaries or, only in the absence
of any such written employment arrangement, "Cause" shall mean any of the
following: (i) Putting Stockholder commits or is charged with a felony or other
crime involving moral turpitude or commits any other act or omission involving
dishonesty, disloyalty or fraud with respect to the Company or any of its
Subsidiaries or any of their customers or suppliers, (ii) conduct by Putting
Stockholder causing the Company or any of its Subsidiaries substantial public
disgrace or disrepute or economic harm, (iii) Putting Stockholder's repeated
failure to perform duties as reasonably directed by the Board or any executive
officer of the Company or any of its Subsidiaries to whom such Putting
Stockholder reports, (iv) any act or omission aiding or abetting a competitor,
supplier or customer of the Company or any of its Subsidiaries to the material
disadvantage or detriment of the Company and its Subsidiaries, (v) breach of
fiduciary duty, gross negligence or willful misconduct with respect to the
Company or any of its Subsidiaries, (vi) Putting Stockholder's abuse of alcohol
or illegal drugs, (vii) misappropriation by Executive of one or more of the
Company's of its Subsidiaries' assets or business opportunities, (viii) breach
by Putting Stockholder of any confidentiality, non-compete, non-solicitation
agreement with the Company or any of its Subsidiaries or any arrangement dealing
with the ownership or protection of the Company's and its Subsidiaries'
proprietary rights or (ix) any material breach of this or any employment
agreement between the Company or its Subsidiaries and such Putting Stockholder
or any material breach of any executive stock agreement evidencing the purchase
and sale of Common Stock or the grant of options to acquire Common Stock by the
Company to such Putting Stockholder.
"Certificate of Incorporation" means the Company's certificate of
incorporation in effect at the time as of which any determination is being made.
"Class A Common" has the meaning set forth in the recitals hereto.
"Class L Common" has the meaning set forth in the recitals hereto.
"Closing Date" has the meaning set forth in the Merger Agreement.
"Common Stock" has the meaning set forth in the recitals hereto.
"Company" has the meaning set forth in the preamble hereto.
"Confidential Information" means all material confidential, non-public or
proprietary information (whether technical, marketing, business, financial or
otherwise), in whatever form (whether tangible, orally communicated, physically
communicated or disclosed in writing, electronically or otherwise, including,
without limitation, information disclosed by samples or demonstrations of
processes, techniques or equipment) which relates to the Company or any of its
Subsidiaries, including, without limitation, any document or other information
distributed to members of the Board. "Confidential Information" shall not
include: (i) information which can be shown to be in the public domain (provided
that such information has not or does not come into the public domain as the
result of improper disclosure) and (ii) information which becomes available on a
non-confidential basis from a source other than the Company or any of its
16
Subsidiaries (provided that such source is not known by the person receiving
such information to be bound by a confidentiality arrangement with the Company
or any of its Subsidiaries).
"Election Period" has the meaning set forth in Section 2(b) hereof.
"Fair Market Value" means, with respect to any Additional Stockholder
Shares to be repurchased pursuant to Section 5 hereof, the fair market value of
such Additional Stockholder Shares as mutually agreed by the Board and the
Putting Stockholder in good faith. To the extent the Board and the Putting
Stockholder cannot in good faith agree on such fair market value, "Fair Market
Value" shall be determined by an independent appraiser mutually acceptable to
the Board and the Putting Stockholder (the "Independent Appraiser"). The
Independent Appraiser shall determine the fair market value of such Additional
Stockholder Shares in relation to the percentage represented by such Additional
Stockholder Shares of the fair market value of the Company's entire common
equity determined on a going concern basis as between a willing buyer and
willing seller and taking into account all relevant factors determinative of
value; provided, that no discount shall be applied to such Additional
Stockholder Shares for any liquidity associated with such Additional Stockholder
Shares or by reason of by the fact such Additional Stockholder Shares may
represent a minority interest.
"Family Group" means, with respect to any natural person, such person's
spouse, siblings and descendants (whether natural or adopted) and any trust or
other entity solely for the benefit of such person and/or such person's spouse,
their respective ancestors and/or descendants.
"GAAP" has the meaning set forth in Section 7 hereof.
"Governmental Authority" means any Federal, state, municipal, local or
foreign government, governmental authority, regulatory or administrative agency,
governmental commission, board, bureau, agency or instrumentality, court,
tribunal, arbitrator or arbitral body.
"Holdco" has the meaning set forth in Section 17 hereof.
"Holdings Term Loan" means that certain term loan agreement in the
principal amount of $3,500,000, dated as of October 30, 2003, by and between
Bank of America, N.A. and the Company, including any related notes, instruments
and agreements executed in connection therewith, as amended, restated, renewed,
refunded, replaced or refinanced from time to time.
"Independent Third Party" means any Person who, immediately prior to the
contemplated transaction, does not own in excess of 5% of the Company's Common
Stock on a fully-diluted basis (a "5% Owner"), who is not controlling,
controlled by or under common control with any such 5% Owner.
"Management Stockholder" means any Additional Stockholder who is an
employee or member of management of the Company or any of its Subsidiaries.
"Merger Agreement" means that certain Agreement and Plan of Merger, dated
as of August 29, 2003, by and among the Company, Keystone Merger Sub, Inc.,
Keystone Automotive Operations, Inc. and LAGE LLC, as holder representative, as
the same may be amended, restated or otherwise modified from time to time.
17
"Non-Offering Additional Stockholders" has the meaning set forth in Section
2(b) hereof.
"Offer Notice" has the meaning set forth in Section 2(b) hereof.
"Offering Stockholder" has the meaning set forth in Section 2(b) hereof.
"Original Cost" means, (i) with respect to Class A Common, $0.1944 per
share, and (ii) with respect to Class L Common, $15.75 per share.
"Other Stockholders" has the meaning set forth in Section 2(c) hereof.
"Permitted Transferee" has the meaning set forth in Section 2(d) hereof.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Pro Rata Share" has the meaning set forth in Section 2(c) hereof.
"Public Company" means a company whose securities are registered pursuant
to Section 12(b) or 12(g) of the Securities Exchange Act.
"Public Offering" means any underwritten sale of Common Stock pursuant to
an effective registration statement under the Securities Act filed with the
Securities and Exchange Commission on Form S-1 (or a successor form adopted by
the Securities and Exchange Commission); provided, that the following shall not
be considered a Public Offering: (i) any issuance of Common Stock as
consideration or financing for a merger or acquisition and (ii) any issuance of
Common Stock or rights to acquire Common Stock to employees of the Company or
its Subsidiaries as part of an incentive or compensation plan. For the avoidance
of doubt, the term "Common Stock" as used in this definition shall be deemed to
include any securities into which the Common Stock may be restructured in
accordance with Section 8(a) hereof.
"Public Sale" means any sale of Stockholder Shares to the public pursuant
to an offering registered under the Securities Act or to the public pursuant to
the provisions of Rule 144 adopted under the Securities Act.
"Put" has the meaning set forth in Section 5(a) hereof.
"Put Closing" has the meaning set forth in Section 5(b) hereof.
"Put Note" has the meaning set forth in Section 5(c) hereof.
"Put Notice" has the meaning set forth in Section 5(a) hereof.
"Putting Stockholder" has the meaning set forth in Section 5(a) hereof.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date hereof, by and among the Company and stockholders of the
Company parties thereto, as the same may be amended, restated or otherwise
modified from time to time.
18
"Sale Notice" has the meaning set forth in Section 2(c) hereof.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Senior Credit Agreement" means that certain Credit Agreement, dated as of
October 30, 2003, by and among Keystone Automotive Operations, Inc., the
guarantor subsidiaries named therein, Bank of America, N.A., as agent, and Banc
of America Securities LLC and UBS Securities LLC, as co-lead arrangers, and the
other lenders named therein, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time.
"Stockholder" has the meaning set forth in the preamble hereto.
"Stockholder Group" means, with respect to any Stockholder, such
Stockholder's and its Subsidiaries' employees, officers, directors, agents,
representatives, partners, shareholders, members and Affiliates, as applicable,
and any person which such Stockholder designates to serve on the Board pursuant
to any rights such Stockholder may have from time to time to designate a member
of Board pursuant to Section 1(a) hereof or otherwise.
"Stockholder Shares" means the Xxxx Shares and the Additional Stockholder
Shares.
"Strategic Transaction" means the Transfer in connection with an
acquisition by the Company or to a strategic partner, i.e., a Person who, as
determined by the Board, will benefit the Company as a result of experience,
expertise, knowledge or relationships, other than experience, expertise,
knowledge or relationships principally with respect to capital markets
activities.
"Sub Board" has the meaning set forth in Section 1(a) hereof.
"Subsidiary" means with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors is at
the time owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person or a combination thereof, or (ii)
if a partnership, association or other business entity, a majority of the
partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more Subsidiaries of
that Person or a combination thereof. For purposes hereof, a Person or Persons
shall be deemed to have a majority ownership interest in a partnership,
association or other business entity if such Person or Persons shall be
allocated a majority of partnership, association or other business entity gains
or losses or shall be or control the managing director or general partner of
such partnership, association or other business entity.
"Transaction Documents" means, collectively, this Agreement, the
Registration Rights Agreement, the 2003 Executive Stock Option Plan, any option
agreement entered into in
19
connection with the 2003 Executive Stock Option Plan, any written employment
agreement that any Stockholder has entered into with the Company on the date
hereof and the Merger Agreement.
"Transfer" has the meaning set forth in Section 2(a) hereof.
"Transferring Stockholder" has the meaning set forth in Section 2(c)
hereof.
13. Transfers in Violation of Agreement. Any Transfer or attempted Transfer of
any Stockholder Shares in violation of any provision of this Agreement shall be
void, and the Company shall not record such Transfer on its books or treat any
purported transferee of such Stockholder Shares as the owner of such shares for
any purpose.
14. Amendment and Waiver. Except as otherwise provided herein, the provisions
of this Agreement may be amended or waived only upon the prior written consent
of the Company and a majority of each of the Bain Holders and the Additional
Stockholders; provided, that (i) Section 1(a)(ii)(B) hereof may not be amended
without the prior written consent of Advent and (ii) to the extent and so long
as any Stockholder has a contractual right to be nominated to the Board pursuant
to Section 1(a)(ii)(A) hereof, Section 1(a)(ii)(A) hereof may not be amended
without the prior written consent of such Stockholder. 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 its terms.
15. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
16. Entire Agreement. Except as otherwise expressly set forth herein, this
Agreement and the other Transaction Documents embody the complete agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
17. Successors and Assigns. Except as otherwise provided in this Agreement,
this Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and permitted assigns and the Stockholders and any
subsequent holders of Stockholder Shares and the respective successors and
permitted assigns of each of them, so long as they hold Stockholder Shares. If
the holders of Stockholder Shares create a new holding company ("Holdco"), the
result of which is that the shareholders of the Company immediately before such
event become all the shareholders of Holdco, then the provisions of this
Agreement will, in addition to the Company, apply to Holdco in the same manner
as if Holdco were substituted for the Company throughout this Agreement.
20
18. Third Party Beneficiary. Section 1(e) of this Agreement has been entered
into by the parties hereto for the benefit of Xxxx Capital VII Coinvestment
Fund, L.P. and such provision shall be enforceable directly by Xxxx Capital VII
Coinvestment Fund, L.P. The parties hereto will not amend the terms of Section
1(f) without the prior written consent of Xxxx Capital VII Coinvestment Fund,
L.P.
19. Counterparts. This Agreement may be executed in separate counterparts each
of which shall be an original and all of which taken together shall constitute
one and the same agreement.
20. Remedies. The parties hereto agree and acknowledge that money damages may
not be an adequate remedy for any breach of the provisions of this Agreement and
that the Company and any Stockholder shall have the right to injunctive relief,
in addition to all of its rights and remedies at law or in equity, to enforce
the provisions of this Agreement. Nothing contained in this Agreement (other
than the provisions of Sections 1(e) and 16) shall be construed to confer upon
any Person who is not a signatory hereto any rights or benefits, as a third
party beneficiary or otherwise.
21. Notices. All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when personally delivered, sent
by telecopy (with receipt confirmed) on a Business Day during regular business
hours of the recipient (or, if not, on the next succeeding Business Day) or two
Business Days after sent by reputable overnight express courier (charges
prepaid). Such notices, demands and other communications shall be sent to the
following Persons at the following addresses:
If to the Company, to:
---------------------
Keystone Automotive Holdings, Inc.
x/x Xxxx Xxxxxxx XX, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
with a copy (which shall not constitute notice to the
-----------------------------------------------------
Company), to:
------------
Xxxxxxxx & Xxxxx LLP
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxx Xxxx
If to the Xxxx Group, to:
------------------------
Xxxx Capital NY, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
21
Attn: Xxxxxxx X. Xxxx
with a copy (which shall not constitute notice to the Xxxx
----------------------------------------------------------
Group), to:
----------
Xxxxxxxx & Xxxxx LLP
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxx Xxxx
22
If to Advent, to:
----------------
c/o Advent International Corporation
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Xx.
with a copy (which shall not constitute notice to Advent), to:
-------------------------------------------------------------
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
00/xx/ & Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx
If to Bear Xxxxxxx to:
---------------------
c/o Bear Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Xxxx X. Xxxxxx
with a copy (which shall not constitute notice to Bear
------------------------------------------------------
Xxxxxxx), to:
------------
Xxxxxxxx & Xxxxx LLP
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
If to any other Person party to this Agreement, to:
--------------------------------------------------
the address for such Person shown in the books and records
of the Company;
or to such other Person as the recipient party has specified by prior written
notice to the sending party.
22. Delivery by Facsimile. This Agreement and any signed agreement or
instrument entered into in connection thereto or contemplated thereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of a
facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall re-execute original forms thereof and
deliver them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through
23
the use of a facsimile machine as a defense to the formation of a contract and
each such party forever waives any such defense.
23. Governing Law. THE CORPORATE LAW OF THE STATE OF DELAWARE WILL GOVERN ALL
ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL
OTHER ISSUES CONCERNING THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW
YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAW OF
ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
24. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
* * * * *
24
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement on the day and year first above written.
KEYSTONE AUTOMOTIVE HOLDINGS, INC.
By: /s/ Xxxxxx X. Vor Broker
-----------------------------------
Name: Xxxxxx X. Vor Broker
Title: President
[Bain Signature Page to Stockholders Agreement]
XXXX CAPITAL FUND VII, LLC
By: Xxxx Capital Fund VII, L.P.
Its: Sole Member
By: Xxxx Capital Partners VII,L.P.
Its: General Partner
By: Xxxx Capital Investors, LLC
Its: General Partner
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
XXXX CAPITAL VII COINVESTMENT FUND, LLC
By: Xxxx Capital VII Coinvestment Fund, L.P.
Its: Sole Member
By: Xxxx Capital Partners VII,L.P.
Its: General Partner
By: Xxxx Capital Investors, LLC
Its: General Partner
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
BCIP ASSOCIATES III, LLC
By: BCIP Associates III
Its: Manager
By: Xxxx Capital Investors, LLC
Its: Managing Partner
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
BCIP T ASSOCIATES III, LLC
By: BCIP Trust Associates III
Its: Manager
By: Xxxx Capital Investors, LLC
Its: Managing Partner
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
BCIP ASSOCIATES III-B, LLC
By: BCIP Associates III-B
Its: Manager
By: Xxxx Capital Investors, LLC
Its: Managing Partner
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
BCIP T ASSOCIATES III-B, LLC
By: BCIP Trust Associates III-B
Its: Manager
By: Xxxx Capital Investors, LLC
Its: Managing Partner
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
[Bain Signature Page to Stockholders Agreement Continued]
BCIP T ASSOCIATES III-B, LLC
By:
-----------------------------------
Name:
Title:
[Advent Signature Page to Stockholders Agreement]
GLOBAL PRIVATE EQUITY IV LIMITED
PARTNERSHIP
By: Advent International Limited
Partnership
Its: General Partner
By: Advent International Corporation
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
ADVENT PARTNERS II LIMITED PARTNERSHIP
By: Advent International Corporation
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
ADVENT PARTNERS GPE-IV LIMITED
PARTNERSHIP
By: Advent International Corporation
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
[Bear Xxxxxxx Signature Page to Stockholders Agreement]
BEAR XXXXXXX MERCHANT BANKING
PARTNERS II, L.P.
By: Bear Xxxxxxx Merchant
Capital II, L.P.
Its: General Partner
By: JDH Management LLC
Its: Special Limited Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Managing Director
BEAR XXXXXXX MERCHANT BANKING
INVESTORS II, L.P.
By: Bear Xxxxxxx Merchant
Capital II, L.P.
Its: General Partner
By: JDH Management LLC
Its: Special Limited Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Managing Director
BEAR XXXXXXX MB-PSERS II, L.P.
By: Bear Xxxxxxx Merchant
Capital II, L.P.
Its: General Partner
By: JDH Management LLC
Its: Special Limited Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Managing Director
[Bear Xxxxxxx Signature Page to Stockholders Agreement Continued]
THE BSC EMPLOYEE FUND III, L.P.
By: Bear Xxxxxxx Merchant
Capital II, L.P.
Its: General Partner
By: JDH Management LLC
Its: Special Limited Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Managing Director
THE BSC EMPLOYEE FUND IV, L.P.
By: Bear Xxxxxxx Merchant
Capital II, L.P.
Its: General Partner
By: JDH Management LLC
Its: Special Limited Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Managing Director
[Xxxxxxxx Street Signature Page to Stockholders Agreement]
XXXXXXXX STREET PARTNERS VI
By: /s/ Xxxx Xxxx
-----------------------------------
Name: Xxxx Xxxx
Title: Managing Partner
[Individual Stockholder Signature Page to Stockholders Agreement]
/s/ Xxxxxxx Xxxxxxxxxxx
----------------------------------------
XXXXXXX XXXXXXXXXXX
/s/ Xxxxxx X. Xxxxx
----------------------------------------
XXXXXX X. XXXXX
/s/ Xxxxxx Xxxxxxxx
----------------------------------------
XXXXXX XXXXXXXX
/s/ Xxxxxxx Xxxxxxxx
----------------------------------------
XXXXXXX XXXXXXXX
/s/ Xxxxxxx Xxxxx, Sr.
----------------------------------------
XXXXXXX XXXXX, SR.
/s/ Xxxxxxx Xxxxxxxx
----------------------------------------
XXXXXXX XXXXXXXX
/s/ Xxxxxxxx Xxxxxxxx
----------------------------------------
XXXXXXXX XXXXXXXX
/s/ Xxxxx Xxxx
----------------------------------------
XXXXX XXXX
/s/ Xxxxxx X. Vor Broker
----------------------------------------
XXXXXX X. VOR BROKER
SCHEDULE I
Xxxx Group
----------
Xxxx Capital Fund VII, LLC
Xxxx Capital VII Coinvestment Fund, LLC
BCIP Associates III, LLC
BCIP T Associates III, LLC
BCIP Associates III-B, LLC
BCIP T Associates III-B, LLC
SCHEDULE II
Ownership of Company Common Stock
---------------------------------
Number of Number of
Shares of Shares of
Class L Class A
Common Common
Stock Stock
Xxxx Capital Fund VII, LLC 6,410,822 57,697,393
Xxxx Capital VII Coinvestment Fund, LLC 1,058,572 9,527,143
BCIP Associates III, LLC 150,154 1,490,168
BCIP T Associates III, LLC 167,084 1,364,939
BCIP Associates III-B, LLC 37,290 336,095
BCIP T Associates III-B, LLC 7,507 67,119
Global Private Equity IV, LP 1,119,144 10,072,286
Advent Partners II LP 9,543 85,886
Advent Partners GPE-IV LP 14,171 127,543
Bear Xxxxxxx Merchant Banking
Partners II, L.P. 225,268 2,027,401
Bear Xxxxxxx Merchant Banking
Investors II, L.P. 44,702 402,320
Bear Xxxxxxx MB-PSERS II, L.P. 123,774 1,113,968
The BSC Employee Fund III, L.P. 63,985 575,866
The BSC Employee Fund IV, L.P. 113,700 1,023,302
Xxxxxxxx Street Partners VI 42,857 385,714
Xxxxxx X. Vor Broker 80,000 720,000
Xxxxxx X. Xxxxx 40,000 360,000
Number of Number of
Shares of Shares of
Class L Class A
Common Common
Stock Stock
Xxxxxxx Xxxxx, Sr. 74,286 668,571
Xxxxxxx Xxxxxxxxxxx 28,571 257,143
Xxxxxxx Xxxxxxxx 74,286 668,571
Xxxxx Xxxx 28,571 257,143
Xxxxxxx Xxxxxxxx 28,571 257,143
Xxxxxx Xxxxxxxx 28,571 257,143
Xxxxxxxx Xxxxxxxx 28,571 257,143
---------- ----------
Total: 10,000,000 90,000,000
EXHIBIT A
---------
FORM OF JOINDER TO
STOCKHOLDERS AGREEMENT
----------------------
THIS JOINDER (this "Joinder") to that certain Stockholders Agreement,
dated as of October [_], 2003, by and among Keystone Automotive Holdings, Inc.,
a Delaware corporation (the "Company"), and certain stockholders of the Company
(the "Agreement"), is made and entered into as of [__________] by and between
the Company and [Holder] ("Holder"). Capitalized terms used but not otherwise
defined herein shall have the meanings set forth in the Agreement.
WHEREAS, Holder has acquired certain shares of the Company's [Common
Stock] ("Holder Stock"), and the Agreement and the Company requires Holder, as a
holder of [Common Stock], to become a party to the Agreement, and Holder agrees
to do so in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Joinder hereby agree as
follows:
1. Agreement to be Bound. Holder hereby agrees that upon execution of this
Joinder, Holder shall become a party to the Agreement and shall be fully
bound by, and subject to, all of the covenants, terms and conditions of the
Agreement as though an original party thereto and shall be deemed [an
Additional Stockholder] for all purposes thereof. In addition, Holder
hereby agrees that all [Common Stock] held by Holder shall be deemed
[Additional Stockholder Shares] for all purposes of the Agreement. [Section
1 to be changed if Holder is a member of the Xxxx Group or a Management
Stockholder.]
2. Successors and Assigns. Except as otherwise provided herein, this Joinder
shall bind and inure to the benefit of and be enforceable by the Company
and its successors and assigns and Holder and any subsequent holders of
Holder Stock and the respective successors and assigns of each of them, so
long as they hold any shares of Holder Stock.
3. Counterparts. This Joinder may be executed in separate counterparts each of
which shall be an original and all of which taken together shall constitute
one and the same agreement.
4. Governing Law. THE CORPORATE LAW OF DELAWARE WILL GOVERN ALL ISSUES
CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL
OTHER ISSUES CONCERNING THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
A - 1
5. Descriptive Headings. The descriptive headings of this Joinder are inserted
for convenience only and do not constitute a part of this Joinder.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Joinder as
of the date first above written.
KEYSTONE AUTOMOTIVE HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
[HOLDER]
By:
-----------------------------------
Name:
Title:
