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Exhibit Item 7 (c) 10.2
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement, dated as of October 22nd, 1996, among THE
PARTS SOURCE, INC., a Florida corporation (the "Company"), and AUTOPARTS FINANCE
COMPANY, INC., a Delaware corporation ("AFCO").
1. Definitions. For purposes of this Agreement, the following terms shall
have the following respective meanings:
"Acquisition": The Acquisition of The Parts Source, Inc. pursuant to the
Agreement of Sale.
"Acquisition Agreement": The Agreement of Sale, dated as of October 22,
1996, between The Parts Source, Inc., a Florida corporation, and AFCO.
"Common Stock": The common stock, par value $.001 per share, of the
Company.
"Exchange Act": The Securities Exchange Act of 1934, as amended, or any
successor Federal statute, and the rules and regulations thereunder which shall
be in effect at the time.
"NASD": National Association of Securities Dealers, Inc.
"Registrable Securities": Any Common Stock issued to AFCO pursuant to
the terms of the Acquisition Agreement and any securities issued or issuable
with respect to any Common Stock (i) by way of stock dividend or stock split,
(ii) in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or (iii) otherwise. As to any
particular Registrable Securities, once issued such securities shall cease to
be Registrable Securities when (a) a registration statement, (b) Rule 144 (or
any successor provision) under the Securities Act shall be available to AFCO
for distribution to the public of such portion of the Registrable Securities,
(c) subject to the provisions of Section 3.1(b) hereof, they shall have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, or (d)
they shall have ceased to be outstanding.
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"REGISTRATION EXPENSES": Any expenses incident to the Company's
performance of or compliance with Section 2 hereof, including, without
limitation, all registration and filing fees, all fees and expenses of
complying with securities or blue sky laws, fees and other expenses associated
with filings with the NASD, all printing expenses, the fees and disbursements
of counsel for the Company, but not including (a) the fees and expenses of any
"qualified independent underwriters" and its counsel, any fees associated with
any special auditing fees or disbursements of any counsel or advisors or AFCO,
or (b) any underwriting discounts or commissions or any transfer taxes incurred
with respect to the registration of the Registrable Securities pursuant to
Section 2 hereof.
"SECURITIES ACT": The Federal Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations thereunder which
shall be in effect at the time.
"SECURITIES AND EXCHANGE COMMISSION": The Securities and Exchange
Commission or any other Federal agency at the time administering the Securities
Act or Exchange Act.
2. REGISTRATION.
2.1. (a) REGISTRATION ON REQUEST: Subject to the provisions
of Section 2.6 hereof, at any time or from time to time commencing a date
("Rights Commencement Date") which is at least three hundred sixty-five (365)
calendar days following the Closing Date (as the term "Closing Date" is
defined in the Acquisition Agreement upon written notice from AFCO, AFCO shall
have the right to make one written request that the Company effect the
registration under the Securities Act of one-half or less of the Registrable
Securities of AFCO, which request shall specify the intended method of
disposition thereof by AFCO and the Company will thereupon use its best efforts
to effect the registration of the Registrable Securities under the Securities
Act which the Company has been so requested to register.
(b) REGISTRATION STATEMENT FORM. The registration
requested pursuant to this Section 2.1 shall be effected by the filing of a
registration statement on any of Form X-0, Xxxx X-0 or Form S-3, as chosen by
the Company that is reasonably acceptable to AFCO (or any successor form of
registration statement or other form which includes substantially the same
information as would be required to be included in a registration statement on
such forms as presently constituted).
(c) EXPENSES. The Company will pay all amounts in respect
of (i) any allocation of salaries of Company personnel or other general
overhead expenses of the Company or other expenses for the preparation of
financial statements or other data normally prepared by the Company in the
ordinary course of its business, but not any expenses of AFCO's personnel or
other general overhead expenses of AFCO, (ii) the expenses of any officers' and
directors' liability insurance for the Company, (iii) the expense and fees for
listing the securities to be registered on each exchange on which similar
securities issued by the Company are then listed and (iv) all fees associated
with filings required to be made with the NASD (but not the fees and expenses
of any "qualified independent underwriter" and its counsel as may be required
by the rules and regulations of the NASD).
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(d) INCLUSION OF OTHER SECURITIES. The Company may, at its
sole option or as may be required pursuant to any agreement with other holders
of the Company's securities (should there be any), register securities (other
than Registrable Securities) for sale for the account of the Company or any
person other than the Company in the registration of the Registrable
Securities. If such registration shall be in connection with an underwritten
public offering and the managing underwriters shall advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration (whether by the Company, pursuant to Section 2.1(a) or
pursuant to any other rights granted by the Company to a holder or holders of
its securities ("Other Holders") to request or demand such registration or
inclusion of any securities in any such registration) exceeds the number of
such securities which can be sold in such offering, the Company shall include
in such registration the number (if any) of securities of the Company so
requested to be included which in the opinion of such underwriters can be sold,
and the Registrable Securities requested by AFCO to be included therein and the
securities of the Company requested by the Other Holders to be included
therein shall be included therein pro rata (based on the number of shares if
the requested or demanded registration is to cover only Common Stock and, if
not, based on the proposed offering price of the total number of securities
included in such underwritten public offering requested to be included therein).
(e) EFFECTIVE REGISTRATION STATEMENT. A registration
requested pursuant to this Section 2.1 will not be deemed to have been effected
unless it has become effective for the period specified in Section 2.3(b)
hereof, provided that a registration which does not become effective after the
Company has filed a registration statement with respect thereto solely by reason
of the refusal or the inability to proceed by AFCO shall be deemed to have been
effected by the Company at the request of AFCO.
2.2. INCIDENTAL REGISTRATION. If the Company at any time prior to
the Rights Commencement Date proposes to register any of its equity securities
(as defined in the Exchange Act) under the Securities Act (other than pursuant
to Section 2.1 hereof), whether or not for sale for its own account, and the
registration form to be used may be used for the registration of Registrable
Securities, it will each such time give written notice to AFCO, at least thirty
(30) days prior to the date the registration statement for such registration is
filed with the Securities and Exchange Commission, of its intention to do so
and, upon the written request of AFCO within 30 days after the receipt of any
such notice (which request shall specify the Registrable Securities intended to
be disposed of by such holder and the intended method of disposition thereof),
the Company will use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by AFCO, to the extent required to permit the disposition
(in accordance with the intended methods thereof as aforesaid) of the
Registrable Securities so to be registered, provided that:
(a) if, any time after giving written notice of its
intention to register any equity securities and prior to the effective
date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to
register such securities, the Company may, at its election, give
written notice of such determination to AFCO and,
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thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not
from its obligation to pay the Registration Expenses incurred to the
date of the Company's election to not register the securities), without
prejudice, however, to the rights of AFCO to request that such
registration be effected as a registration under Section 3.1 hereof; and
(b) if such registration shall be in connection with an
underwritten public offering and the managing underwriters shall advise
the Company in writing that in their opinion the number of securities
requested to be included in such registration (whether by the Company,
pursuant to this Section 2.2 or pursuant to any other rights granted by
the Company to a holder or holders of its securities to request or
demand such registration or inclusion of any such securities in any
such registration) exceeds the number of such securities which can be
sold in such offering, the Company shall include in such registration
the number (if any) of securities requested to be included (the "Other
Registrable Securities"), which in the opinion of such underwriters
can be sold and shall not include in such registration any securities
(other than securities being sold by the Company, which shall have
priority in being included in such registration), including the
Registrable Securities, so requested to be included other than Other
Registrable Securities unless all Other Registrable Securities
requested to be so included are included therein (and, if in the
opinion of such underwriters, some but not all of the Other Registrable
Securities may be so included, the holders of such Other Registrable
Securities shall share pro rata in the number of shares of Other
Registrable Securities included in such underwritten public offering on
the basis of the number of Other Registrable Securities requested to be
included therein), and in the case of a registration initially
requested or demanded by a holder or holders of Other Registrable
Securities, the Company shall not register Registrable Securities for
sale in any such registration unless permitted to do so by the written
consent of holders holding at least a majority (by number of shares) of
the Other Registrable Securities proposing to sell their shares in such
registration. If AFCO requests the incidental registration of any or
all of the Registrable Securities pursuant to this Section 2.2 and if,
for any reason other than the fault or request of AFCO or the
provisions of this Section 2.2(b), any or all of the Registrable
Securities requested to be registered in the incidental registration
are not so registered, AFCO thereafter shall have the right, without
prejudice, to request under this Section 2.2 the incidental
registration of such Registrable Securities not so registered provided
the same limitations and restrictions set forth in this Section 2.2
apply in each such request.
The Company and, with respect to an underwritten offering, AFCO, shall pay all
Registration Expenses and expenses of an incidental registration of the
Registrable Securities under this Section 2.2 in the manner and to the same
extent as provided in Section 2.1(c) with respect to a registration on request.
2.3 REGISTRATION PROCEDURES. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2 hereof,
the Company will promptly:
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(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such securities, make all required
filings with the NASD, and use its best efforts to cause such registration
statement to become effective;
(b) prepare and file with the Securities and Exchange Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement, but in no event for a period
of more than six months after such registration statement becomes effective,
subject, however, to the last paragraph of this Section 2.3;
(c) furnish to counsel (if any) for AFCO, copies of all documents
proposed to be filed with the Securities and Exchange Commission in connection
with such registration, which documents will be subject to the review, but not
to any demands of such counsel;
(d) furnish to each seller of such securities such number of conformed
copies of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits, except that the Company shall not
be obligated to furnish any seller of securities with more than two copies of
such exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the Securities Act, and such
other documents, as such seller may reasonably request in order to facilitate
the disposition of the securities owned by such seller;
(e) use its best efforts to register or qualify such securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as each seller shall reasonably request, and do any
and all other acts and things which may be necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the securities
owned by such seller, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified, or to consent to general service of
process in any such jurisdiction;
(f) furnish to each seller a signed counterpart, addressed to the
sellers, of
(i) an opinion of counsel for the Company, dated the
effective date of the registration statement, and
(ii) a "comfort" letter signed by the independent public
accountants who have certified the Company's financial statements
included in the registration
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statement,
covering substantially the same matters with respect to the registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' letter delivered to the
underwriters in underwritten public offerings of securities;
(g) notify each seller of any securities covered by such
registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and at the
request of any such seller, prepare and furnish to such seller a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be state therein or necessary to make the statements
therein not misleading in light of the circumstances then existing; and
(h) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange
Commission.
The Company may require AFCO to furnish to the Company such information
regarding AFCO as the Company may from time to time reasonably request in
writing and as shall be required by law in connection therewith. AFCO hereby
agrees to furnish promptly to the Company all information reasonably requested
by the Company or required to be disclosed in order to make the information
previously furnished to the Company by AFCO not materially misleading.
AFCO hereby agrees that upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 2.3(g) hereof, AFCO
will promptly discontinue its disposition of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until AFCO's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 2.3(g) hereof. If so directed by the Company, AFCO will deliver to the
Company all copies, other than permanent file copies, then in AFCO's possession
of the prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such
notice,the period mentioned in Section 2.3(b) hereof shall be extended by the
number of days equal to the number of days during the period from and including
the date of the giving of such notice to and including the date when each
seller of any Registrable Securities covered by such registration statement
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 2.3(g) hereof. The Company hereby represents and
agrees that the Common Stock is registered under the Securities Exchange Act of
1934, as amended
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("Exchange Act"); as of April 8, 1997, the Company will have been subject to
the reporting reporting requirements of the Exchange Act for a period of at
least twelve (12) calendar months; the Company has filed in a timely manner all
reports required to be filed under the Exchange Act during the period from
April 8, 1996 to the date hereof; and the Company will send to AFCO all
reports and other documents (without exhibits) filed by the Company with the
Securities and Exchange Commission ("SEC") at the same time the Company sends
such reports and other documents to the SEC, provided, that the Company will
send to AFCO upon AFCO's request copies of all exhibits to such reports and
documents.
2.4. UNDERWRITTEN OFFERING.
(a) UNDERWRITTEN OFFERINGS EXCLUSIVE. Should AFCO's
request, pursuant to Section 2.1 hereof, include an underwritten offering, only
securities which are to be distributed by the underwriters may be included in
the registration. If AFCO determines, with respect to any such underwritten
offering, based on consultation with the managing underwriter or, in an
offering which is not underwritten, with an investment banker, that the number
of securities to be sold in any such offering should be limited due to market
conditions or otherwise, AFCO shall, at its sole option, either (i) limit its
sale of Registrable Securities to the number recommended by the managing
underwriters or investment banker, as the case may be or (ii) withdraw such
registration without prejudice to its right to request a registration under
Section 2.1 hereof.
(b) UNDERWRITING AGREEMENT. If requested by the
underwriters for AFCO, if Registrable Securities are to be offered through a
registration requested under Section 2.1 hereof, the Company and AFCO shall
enter into an underwriting agreement with such underwriters for such offering,
such agreement to be satisfactory in substance and form to the Company, AFCO and
to the underwriters and to contain such representations and warranties by the
Company and such other terms and provisions as are customarily contained in
agreements of this type, including, without limitation, indemnities to the
effect and to the extent provided in Section 2.7 hereof. AFCO shall be a party
to such underwriting agreement and may, at its sole option, require that any or
all of the representations and warranties by, and the agreements on the part
of, the Company to and for the benefit of such underwriters be made to and for
the benefit of AFCO and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement shall also
be conditions precedent to the obligations of AFCO.
(c) SELECTION OF UNDERWRITERS. Whenever a registration
requested pursuant to Section 2.1 hereof is for an underwritten offering, the
Company and AFCO shall select the managing underwriters mutually agreeable to
AFCO and the Company to administer the offering. If in connection with any such
underwritten offering, a "qualified independent underwriter" may be required by
the rules and regulations of the NASD, such qualified independent underwriter
shall be selected by the Company.
(d) INCIDENTAL UNDERWRITTEN OFFERINGS. Prior to the
Rights Commencement Date, subject to the provisions of the proviso to Section
2.2 hereof, and if the Company at any time
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proposes to register any of its securities under the Securities Act, whether or
not for its own account, and such securities are to be distributed by or
through one or more underwriters, the Company will use its best efforts, if
requested by AFCO to arrange for such underwriters to include the Registrable
Securities to be offered and sold by AFCO among those to be distributed by such
underwriters. AFCO shall be a party to the underwriting agreement. AFCO shall
not be required to make any representations or warranties other than AFCO's
intended method of distribution.
(e) HOLD BACK AGREEMENTS. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2 hereof,
AFCO hereby agrees not to effect any public sale or distribution, including any
sale pursuant to Rule 144 of the Securities Act, of any Registrable Securities,
and to use AFCO's best efforts not to effect any such public sale or
distribution of any other equity securities of the Company or any securities
convertible into or exchangeable or exercisable for any equity security of the
Company (other than as part of such underwritten public offering) within 30
days prior to and 90 days after the effective date of such registration
statement, and the Company agrees to cause each officer, director or any holder
of ten percent (10%) or more of any equity security, or of any security
convertible into or exchangeable or exercisable for any equity security, of the
Company to enter into a similar agreement with the Company. The Company further
agrees not to effect any public sale or distribution of its equity securities,
or any securities convertible into or exchangeable or exercisable for such
securities, within 30 days prior to and 90 days after the effective date of
such registration statement (except as part of such underwritten public
offering or pursuant to a registration on Form X-0, X-0 or any successor forms).
2.5. PREPARATION: REASONABLE INVESTIGATION. If AFCO should request
the registration of the Registrable Securities pursuant to Section 2.1 hereof,
AFCO shall have the right to select legal counsel (who is reasonably acceptable
to the Company), provided such counsel's work product is reviewed by separate
counsel chosen by the Company before the registration statement for such
registration is filed with the Securities and Exchange Commission, with AFCO's
counsel making such changes to the registration statement as the Company's
separate counsel shall advise, with all legal fees and expenses of AFCO's
counsel to be paid by AFCO, and all legal fees and expenses of the Company's
separate counsel to be paid by the Company. In addition, in connection with the
preparation and filing of a registration statement registering Registrable
Securities under the Securities Act, the Company will give AFCO and their
underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Securities and Exchange
Commission, and each amendment thereof or supplement thereto, and will give
each of them such access to its books and records and such opportunities to
discuss the business of the Company with its officers and the independent
public accountants who have certified its financial statement as shall be
necessary, in the opinion of such holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
2.6. OTHER REGISTRATIONS. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided
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in Sections 2.1 and 2.2 hereof, and if such registration shall not have been
withdrawn or abandoned, the Company shall not be obligated to and shall not
effect any registration of any of its securities (including Registrable
Securities) under the Securities Act, whether of its own accord or at the
request or demand of AFCO, until a period of six months shall have lapsed from
the effective date of such previous registration; and the Company shall so
provide in any registration agreement with respect to any of its securities.
2.7. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any Registrable Securities under the Securities Act pursuant to
Section 2.1 or 2.2 hereof, the Company will indemnify and hold harmless AFCO,
its directors, officers and employees, each other person who participates as an
underwriter, broker or dealer in the offering or sale of such securities and
each other person, if any, who controls AFCO or any such participating person
within the meaning of the Securities Act, against any losses, claims, damages
or liabilities, joint or several, to which AFCO or any such director, officer
or employee or participating person or controlling person may become subject
under the Securities Act, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or (ii) any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse AFCO and each such
director, officer, employee, participating person and controlling person for
any legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding, provided that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by AFCO or
participating person specifically stating that it is for use in the preparation
thereof or arises out of or is based on AFCO's or such participating person's
failure to deliver a copy of the registration statement or prospectus or any
amendment or supplement thereto after the Company has furnished AFCO with a
sufficient number of the same; and provided, further, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the prospectus, if
such untrue statement or alleged untrue statement or omission or alleged
omission is completely corrected in an amendment or supplement to the
prospectus and AFCO thereafter fails to deliver such prospectus as so amended
or supplemented prior to or concurrently with the sale of Registrable
Securities to the person asserting such loss, damage, liability or expense
after the Company had furnished AFCO with a significant number of copies of the
same or if AFCO received notice from the Company of the existence of such
untrue statement or alleged untrue statement or omission or alleged omission
and AFCO continued to dispose of
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Registrable Securities prior to the time of the receipt of either (aa) an
amended or supplemented prospectus which completely corrected such untrue
statement omission or (bb) a notice from the Company that the use of the
existing prospectus may be resumed. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of AFCO or any
such director, officer, employee, participating person or controlling person
and shall survive the transfer of such securities by AFCO.
(b) INDEMNIFICATION BY AFCO. In the event of any
registration of any Registrable Securities under the Securities Act pursuant to
Section 2.1 or 2.2 hereof, AFCO will indemnify and hold harmless the Company,
its directors, officers and employees, each other person who participates as an
underwriter, broker or dealer in the offering or sale of such securities and
each other person, if any, who controls the Company or any such participating
person within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company or any such
director, officer or employee or participating person or controlling person may
become subject under the Securities Act, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact provided the Company by AFCO contained in any registration
statement under which such securities were registered under the Securities Act,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or (ii) any omission or
alleged omission by AFCO to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and in such event
AFCO will reimburse the Company and each such director, officer, employee,
participating person and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding, provided that AFCO shall not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or omission made
in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to AFCO through an instrument
duly executed by the Company or participating person specifically stating that
it is for use in the preparation thereof or arises out of or is based on the
Company's or such participating person's failure to deliver a copy of the
registration statement or prospectus or any amendment or supplement thereto
after AFCO has furnished the Company with a sufficient number of the same; and
provided, further, that AFCO shall not be liable in any such case to the extent
that any such loss, claim, damage or liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission in the prospectus, if such untrue statement or alleged untrue
statement or omission or alleged omission is completely corrected in an
amendment or supplement to the prospectus and the Company thereafter fails to
deliver such prospectus as so amended or supplemented prior to or concurrently
with the sale of Registrable Securities to the person asserting such loss,
damage, liability or expense after AFCO had furnished the Company with a
significant number of copies of the same or if the Company received notice from
AFCO of the existence of such untrue statement or alleged untrue statement or
omission or alleged omission and the Company continued to dispose of
Registrable Securities prior to the time of the receipt of either (aa) an
amended or supplemented prospectus which completely corrected such
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untrue statement or omission or (bb) a notice from AFCO that the use of the
existing prospectus may be resumed.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding paragraphs of this Section 2.7,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action, provided that the failure of any indemnified party
to give notice as provided therein shall not relieve the indemnifying party of
its obligations under the preceding paragraphs of this Section 2.7. In case any
such action is brought against an indemnified party, the indemnifying party
will be entitled to participate in and to assume the defense thereof, to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof, provided that if such indemnified party and the indemnifying
party reasonably determine, based upon advice of their respective independent
counsel, that a conflict of interest may exist between the indemnified party
and the indemnifying party with respect to such action and that it is thus
advisable for such indemnified party to be represented by separate counsel, such
indemnified party may retain other counsel, satisfactory to the indemnifying
party, to represent such indemnified party, and the indemnifying party shall
pay all reasonable fees and expenses of such counsel. No indemnifying party in
the defense of any such claim or litigation, shall, except with the consent of
such indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.
(d) OTHER INDEMNIFICATION. Indemnification similar to
that specified in the preceding paragraphs of this Section 2.7 (with
appropriate modifications) shall be given by the Company and AFCO with respect
to any required registration or other qualification of such Registrable
Securities under any Federal or state law or regulation or governmental
authority other than the Securities Act.
(e) OTHER REMEDIES. If for any reason the foregoing
indemnity is unavailable, or is insufficient to hold harmless and indemnified
party, then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, in such proportion as
is appropriate to reflect not only the relative benefits received by the
indemnifying party on the other hand and the indemnified party on the other but
also the relative fault of the indemnifying party and the indemnified party as
well as any other relevant equitable considerations. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be
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entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. No party shall be liable for contribution under this clause
(e) except to the extent and under such circumstances as such party would have
been liable to indemnify under this Section 2.7 if such indemnification were
enforceable under applicable law.
3. MISCELLANEOUS.
3.1. RULE 144: LEGENDED SECURITIES.
(a) The Company, in compliance with Section 12 of the
Exchange Act, covenants that it will continue to file the reports required to
be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Securities and Exchange Commission thereunder to
enable AFCO to sell shares of Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such Rule may be amended from time to time,
without giving effect to Rule 144A, or (ii) any similar rule or regulation
hereafter adopted by the Securities and Exchange Commission. Should the Company
fail to timely file its reports under the Securities Act and the Exchange Act,
and certain less expensively prepared registration statements thereby becomes
unavailable for use notwithstanding AFCO's obligation with respect to
Registration Expenses, the Company will pay all costs of Registration Expenses
in excess of the cost of using the less expensive unavailable registration
statement.
(b) The Company agrees and AFCO understands that the
Company will not issue original or replacement certificates for shares of
Registrable Securities without a legend restricting further transfer unless
such shares have been sold to the public pursuant to an effective registration
statement under the Securities Act or Rule 144 thereunder, or unless otherwise
permitted under the Securities Act.
3.2 AMENDMENTS AND WAIVERS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have obtained
the written consent to such amendment, action or omission to act, of AFCO.
3.3 SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement and the
rights hereunder shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. In addition, and
whether or not any express assignment shall have been made, the provisions of
this Agreement which are for the benefit of the parties hereto other than the
Company shall also be for the benefit of and enforceable by any subsequent
holder of any Registrable Securities.
3.4 NOTICES. All notices, requests, demands or other
communications provided for hereunder shall be in writing and shall be deemed
to have been duly given to any party (i) when delivered personally (by courier
service or otherwise), (ii) when delivered by telex and confirmed
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by receipt of the proper telex answer back, (iii) five days after being mailed
by first class mail, postage prepaid (registered or certified mail, return
receipt requested), (iv) when receipt acknowledged, if telecopied, or (v) the
next business day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery, in each case to the applicable
address set forth below, or to such other address as such party may have
designated to the other in writing,
The Parts Source, Inc.
0000 X. Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxx, President
or at such other address or addresses as the Company may have designated in
writing to the Company. A copy of any notice or other communication given under
the Agreement shall also be given to:
Schifino & Xxxxxxxxx, P.A.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx, Esquire
All notices to AFCO shall be sent to:
Autoparts Finance Company, Inc.
c/o A.P.S., Inc.
00000 Xxxx X. Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Vice President & General Counsel
or at such other address or addresses as AFCO may have designated in writing to
the Company.
3.5. DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.
3.6. GOVERNING LAW. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the
internal laws of the State of Florida without regard to principles of conflicts
of laws.
3.7. COUNTERPARTS. This Agreement may be executed simultaneously
in one or more counterparts, and by different parties on separate counterparts,
each of which shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
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3.8. SEVERABILITY. Whenever possible, each provision of this
Agreement will 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 prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
THE PARTS SOURCE, INC.
By: /s/ Xxxxxx X. Xxx
------------------------------
Name: Xxxxxx X. Xxx
-----------------------------
Title: President
---------------------------
AUTOPARTS FINANCE COMPANY, INC.
By: /s/ E. Xxxxxx Xxxxxx
------------------------------
Name: E. Xxxxxx Xxxxxx
-----------------------------
Title: Vice President
---------------------------
