EXHIBIT 10.11
FORM OF SHAREHOLDERS AGREEMENT dated as
of March 1, 2002 (this "Agreement"), among XXXXXX
AUTOMOTIVE GROUP, INC., a Delaware corporation (the
"Company"), XXXXXX AUTOMOTIVE HOLDINGS L.L.C., a
Delaware limited liability company ("AAH"), and the
other stockholders listed on the signature pages hereto
(collectively, the "Specified Shareholders" and,
together with AAH, the "Shareholders").
PRELIMINARY STATEMENTS
WHEREAS, the Shareholders were members of Xxxxxx Automotive
Group L.L.C., a Delaware limited liability company ("Oldco"), and are parties to
the LLC Agreement (as defined below); and
WHEREAS, the LLC Agreement provided for the IPO (as defined
below) and the execution of this Agreement by the Shareholders and the Company;
and
WHEREAS, the Company, as successor to Oldco, currently intends
to consummate the IPO.
NOW THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITION OF CERTAIN TERMS USED HEREIN. (a) As
used herein, the following terms shall have meanings specified below:
"AFFILIATE" shall mean, with respect to any person, any other
person that directly or indirectly through one or more intermediaries controls
or is controlled by or is under common control with such person. For the
purposes of this definition, "control" when used with respect to any particular
person, means the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AAH MATTER" shall mean any matter brought before a
Shareholders Meeting and proposed or sponsored by AAH to be acted upon by the
stockholders of the Company at such Shareholders Meeting.
"AAH NOMINEE" shall mean any person nominated by AAH for
election as a director to the Board of Directors.
"BENEFICIAL OWNER" shall have the meaning assigned to such
term in Rule 13d-3 under the Exchange Act.
"BLACKOUT PERIOD" shall have the meaning specified in Section
5.01(b).
"BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company.
"CLAIMS" shall have the meaning specified in Section 5.06(a).
"COMMON STOCK" shall mean the common stock, par value $0.01
per share, of the Company.
"DEALER NOMINEE" shall mean any person nominated by the
holders of a majority of the Shares held by the Specified Shareholders for
election as a director to the Board of Directors, provided such person is
reasonably acceptable to AAH. AAH agrees that each of the individuals set forth
on Schedule I is an acceptable Dealer Nominee so long as such individual
continues to be employed by the Company or an Affiliate of the Company.
"DEMAND HOLDER" shall mean (i) AAH or (ii) a
Majority in Interest of the Specified Shareholders .
"DEMAND NUMBER" shall mean (i) with respect to AAH, five and
(ii) with respect to the Specified Shareholders, two; PROVIDED that if a
Triggering Event occurs and if the Voting Termination Date has not occurred, the
Demand Number with respect to the Specified Shareholders shall be three;
PROVIDED, FURTHER, that if a Triggering Event is no longer continuing or if the
Voting Termination Date occurs, the Specified Shareholders' Demand Number shall
revert to two. Each Specified Shareholder shall be deemed to have exercised a
Demand Request if a Majority in Interest of the Specified Shareholders make a
Demand Request.
"DEMAND PERIOD" shall have the meaning specified in Section
5.01(a).
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"DEMAND REGISTRATION" shall have the meaning specified in
Section 5.01(a).
"DEMAND REQUEST" shall have the meaning specified in Section
5.01(a).
"DIRECTORS" shall mean members of the Board of Directors.
"DGCL" shall mean the Delaware General Corporation Law, as
amended.
"EFFECTIVE PERIOD" shall have the meaning specified in Section
5.04(a)(iii).
"EFFECTIVE TIME" shall mean one hour prior to the time at
which the IPO is consummated.
"ELECTION MEETING" shall mean any Shareholders Meeting
relating to the election of Directors to the Board of Directors.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder.
"EXERCISING DEMAND HOLDER" shall mean a Demand Holder who has
exercised a Demand Request that it is entitled to exercise under the terms of
this Agreement (together with any Subsidiary Holder thereof whose shares are
included in such Demand Request). If a Majority in Interest of the Specified
Shareholders make a Demand Request, each Specified Shareholder participating in
such Demand Request shall be deemed an Exercising Demand Holder.
"GOVERNMENTAL ENTITY" shall mean any Federal, state or local
government or any court, administrative or regulatory agency or commission or
other governmental authority or agency, domestic or foreign.
"INSPECTORS" shall have the meaning specified in Section
5.04(a)(iv).
"IPO" shall have the meaning assigned to such term in the LLC
Agreement.
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"LIENS" shall mean any pledges, claims, liens, charges,
encumbrances or security interests of any kind or nature whatsoever.
"LLC AGREEMENT" shall mean the Third Amended and Restated
Limited Liability Company Agreement of Xxxxxx Automotive Group L.L.C. dated as
of February 1, 2000, among AAH and the Specified Shareholders.
"MAJORITY IN INTEREST OF THE SPECIFIED SHAREHOLDERS" shall
mean the Specified Shareholders who, at the time in question, hold (together
with their Subsidiary Holders) Shares aggregating more than 50% of all Shares
held by all Specified Shareholders (together with their Subsidiary Holders).
"MATERIAL TRANSACTION" shall have the meaning specified in
Section 5.01(b).
"MAXIMUM NUMBER" shall have the meaning specified in Section
5.02(b).
"OTHER HOLDER" shall have the meaning specified in Section
5.02(b).
"OTHER MATTER" shall mean any matter (including the election
of directors to the Board of Directors) brought before a Shareholders Meeting
and proposed or sponsored by a person other than AAH, to be acted upon by the
stockholders of the Company.
"PIGGY BACK REGISTRATION" shall have the meaning specified in
Section 5.02(a).
"PIGGY BACK REQUEST" shall have the meaning specified in
Section 5.02(a).
"RECORDS" shall have the meaning specified in Section
5.04(a)(iv).
"REGISTERED SHARES" shall have the meaning specified in
Section 5.04(a)(xvii).
"REGISTRATION" shall have the meaning specified in Section
5.02(a).
"REGISTRATION EXPENSES" shall have the meaning specified in
Section 5.05.
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"SEC" shall mean the United States Securities and Exchange
Commission or any other United States federal agency at the time administering
the Securities Act or the Exchange Act, as applicable, whichever is the relevant
statute.
"SECURITIES ACT" shall mean the Securities Act of 1933 and the
rules and regulations thereunder.
"SHAREHOLDERS MEETING" shall mean (i) any annual or special
meeting of the stockholders of the Company or (ii) any action by written consent
of the stockholders of the Company.
"SHARES" shall mean, with respect to a Shareholder, the shares
of Common Stock owned by such Shareholder or any Subsidiary Holder, including
any shares of Common Stock acquired by such Shareholder or any subsidiary Holder
after the date of this Agreement.
"SUBSIDIARY HOLDER" shall mean any Affiliate of a Shareholder
which has beneficial ownership of any of the Shares while this Agreement is in
effect and has executed a counterpart hereto in accordance with Section 7.06
hereof.
"TRIGGERING EVENT" shall mean (i) the declaration,
pronouncement, ruling, order, decision or written opinion of the SEC or a United
States federal court that a voting arrangement factually similar to Section
3.01(a) of this Agreement causes all of the Specified Shareholders collectively
to constitute a single "affiliate" of the Company for purposes of the sale of
Shares by the Specified Shareholders in compliance with the provisions of Rule
144(e)(1) promulgated under the Securities Act or (ii) the Company's refusal to
cause stop transfer restrictions to be released or the legends described in
Section 7.02 to be removed if the Company has taken the position that the
Specified Shareholders collectively constitute a single "affiliate" of the
Company. A Triggering Event shall be deemed to continue (i) for so long as such
declaration, pronouncement, ruling, order, decision or written opinion remains
in effect or is not rescinded, overruled, repealed or superseded or (ii) until
the Company either (x) causes stop transfer restrictions to be released and the
legends described in Section 7.02 to be removed or (y) ceases to take the
position that the Specified Shareholders collectively constitute a single
"affiliate" of the Company.
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"VOTING TERMINATION DATE" shall mean the earlier of the date
that (i) is the fifth anniversary of the Effective Time, (ii) is two years after
the date that AAH and its Subsidiary Holders first are the beneficial owners in
aggregate of less than 20% of the outstanding shares of Common Stock or (iii)
AAH and its Subsidiary Holders first are the beneficial owners in aggregate of
less than 5% of the outstanding shares of Common Stock.
(b) All other terms used herein without definitions shall have
the meanings ascribed to such terms in the LLC Agreement.
SECTION 1.02. USAGE. The definitions in this Article I shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. All references in this Agreement to
Articles, Sections and Exhibits shall be deemed to be references to Articles,
Sections and Exhibits of or to this Agreement, unless the context shall
otherwise require. The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation", regardless of whether
such phrase so appears.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to each other party that it is a
corporation duly organized and validly existing under the laws of the State of
Delaware and has all requisite corporate power and authority to execute and
deliver this Agreement, to carry out the provisions hereof and to perform its
obligations hereunder. The execution, delivery and performance by the Company of
its obligations under this Agreement and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms.
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SECTION 2.02. REPRESENTATIONS AND WARRANTIES OF THE
SHAREHOLDERS. Each Shareholder hereby represents and warrants to the Company and
each other Shareholder that this Agreement has been duly and validly executed
and delivered by such Shareholder and constitutes the legal, valid and binding
obligation of such Shareholder, enforceable against it in accordance with its
terms.
ARTICLE III
VOTING
SECTION 3.01. AGREEMENT TO VOTE. (a) At each and every
Shareholders Meeting held after the Effective Time and prior to the Voting
Termination Date, each Specified Shareholder hereby agrees (x) if any annual or
special meeting of the stockholders of the Company is held, to appear at such
meeting or otherwise cause its Shares to be counted as present thereat for
purposes of establishing a quorum, and to vote or (y) to act by written consent
with respect to (or cause to be voted or acted upon by written consent), (i) all
Shares for which such Specified Shareholder or any Subsidiary Holder thereof is
the record holder or beneficial owner at the time of such vote or action by
written consent and (ii) all Shares as to which such Specified Shareholder or
any Subsidiary Holder thereof at the time of such vote or action by written
consent has voting control, in each case:
(A) In favor of:
(i) All of the AAH Nominees;
(ii) Any AAH Matter; and/or
(iii) Any Other Matter, only if AAH has informed (by
oral or written notice) the Specified Shareholders that AAH
intends to vote in favor of such Other Matter; and
(B) Against:
(i) The election of any person or persons
nominated in opposition to the AAH Nominees;
(ii) Any matter brought before such Shareholders
Meeting to be acted upon by the
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shareholders of the Company that is in opposition to an AAH
Matter; and/or
(iii) Any Other Matter, only if AAH has informed (by
oral or written notice) the Specified Shareholders that AAH
intends to vote against such Other Matter.
(b) At each and every Shareholders Meeting held after the
Effective Time and prior to the Voting Termination Date, each Shareholder hereby
agrees (x) if any annual or special meeting of the stockholders of the Company
is held, to appear at such meeting or otherwise cause its Shares to be counted
as present thereat for purposes of establishing a quorum, and to vote or (y) act
by written consent with respect to (or cause to be voted or acted upon by
written consent), (i) all Shares for which such Shareholder or any Subsidiary
Holder thereof is the record holder or beneficial owner at the time of such vote
or action by written consent and (ii) all shares as to which such Shareholder or
any Subsidiary Holder thereof at the time of such vote or action by written
consent has voting control, in each case in favor of (A) at least one Dealer
Nominee if the total number of Directors (excluding Directors that are employees
of the Company) on the Board of Directors at the time of such Shareholders
Meeting is less than seven and at least two Dealer Nominees if such number of
Directors is more than six and (B) against the election of any person or persons
nominated in opposition to such Dealer Nominee(s).
SECTION 3.02. FINANCIAL AND OTHER INFORMATION. Each
Shareholder shall be entitled to receive, and the Company shall provide to such
Shareholder (i) quarterly unaudited financial statements and reports, (ii)
annual audited financial statements and reports, (iii) budgets and financial
plans and (iv) such other data relating to the business, affairs, prospects or
condition (financial or otherwise) of the Company as is available to the Company
that (A) such Shareholder may reasonably request so long as such Shareholder is
the record holder or beneficial owner of at least 5% of the outstanding shares
of Common Stock or (B) such Shareholder is, or is controlled by, one of the
individuals listed on Schedule I hereto.
SECTION 3.03. GRANT OF IRREVOCABLE PROXY. In the event that
any Specified Shareholder shall fail at any time to vote or act by written
consent with respect to any of such Specified Shareholder's Shares as agreed by
such
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Specified Shareholder in this Agreement, such Specified Shareholder hereby
irrevocably grants to and appoints AAH (and any officer of AAH or each of them
individually), such Specified Shareholder's proxy and attorney-in-fact (with
full power of substitution), for and in the name, place and stead of such
Specified Shareholder, to vote, act by written consent or grant a consent, proxy
or approval in respect of such Shares with respect to such vote or action by
written consent exclusively as agreed by such Specified Shareholder in this
Agreement. Each Specified Shareholder hereby affirms that any such irrevocable
proxy set forth in this Section 3.03 is given in connection with the
consummation of the IPO and that such irrevocable proxy is given to secure the
performance of obligations of such Specified Shareholder under this Agreement.
Each such Specified Shareholder hereby further affirms that any such proxy
hereby granted shall be irrevocable and shall be deemed coupled with an
interest, in accordance with Section 212(e) of the DGCL. Each Specified
Shareholder agrees to execute and deliver any further powers of attorney,
consents, proxies or other agreements necessary or appropriate to give effect to
this Section 3.03. This Section 3.03 shall terminate upon the occurrence of the
Voting Termination Date.
SECTION 3.04. CERTAIN ACTIONS. Each Shareholder agrees that it
will, and will cause its subsidiaries and Affiliates to, take all action as a
stockholder of the Company or as is otherwise within its control as are
necessary to give effect to the provisions of this Agreement and to perform, pay
and satisfy all of their respective obligations and liabilities hereunder as and
when due.
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ARTICLE IV
COVENANTS
SECTION 4.01. LOCK-UP. Each Specified Shareholder hereby
agrees that, without the prior written consent of the Company, it will not,
during the period ending two years after the Effective Time (the "Lock-Up
Period"), (i) offer, pledge, sell, assign, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any of its Shares or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash, property or otherwise (any action
prohibited by the foregoing clauses (i) or (ii), a "Transfer") except that a
Specified Shareholder (x) 180 days or more following the Effective Time, may
Transfer any of its Shares to (A) a person, other than a charity or a trust for
the benefit of a charity, that is a Permitted Transferee (as defined in clauses
(ii) or (iii) of the definition of "Permitted Transferee" in the LLC Agreement)
or (B) a charity or a trust for the benefit of a charity solely controlled by
such Specified Shareholder so long as during the Lock-Up Period such Specified
Shareholder does not Transfer in aggregate pursuant to this clause (x)(B) more
than 15% of the Shares it held at the Effective Time, (y) 180 days or more
following the Effective Time, may pledge Shares to a lender solely in connection
with a recourse loan to such Specified Shareholder so long as the aggregate
principal amount of such recourse loan does not exceed 20% of the fair market
value (determined at the time such recourse loan is made) of the Shares that
such Specified Shareholder pledges as security for such recourse loan pursuant
to this clause (y) and (z) may pledge Shares solely to the extent the pledge of
such Shares is in substitution for and to the same Lender as a pledge by such
Specified Shareholder prior to the Effective Time of all or a portion of its
equity interest in the Company or the predecessor entity of the Company, as
applicable, and such prior pledge complied with Section 7.01(c)(iv) of the LLC
Agreement; PROVIDED that each transferee pursuant to the foregoing clauses (x),
(y) and (z) prior to such Transfer shall agree in writing in a form reasonably
acceptable to the Company to be bound by this Section 4.01. In addition, each
Specified Shareholder agrees that, without the prior written consent of the
Company, it will not during the Lock-
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Up Period exercise any right available to it under Article V of this Agreement
with respect to the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock. Each Specified
Shareholder agrees to enter into a "lockup" agreement with the underwriters of
the IPO for a term equal to the Lock-Up Period and that otherwise is
substantially the same as this Section 4.01.
SECTION 4.02. NONCOMPETITION. This Section 4.02 applies to
each employee of the Company or any subsidiary of the Company who owns Shares,
whether directly or indirectly, in the Company who is a Specified Shareholder of
the Company or is the beneficial owner of interests in a Specified Shareholder
of the Company (or a Subsidiary Holder thereof) and is not bound by a
non-competition restriction contained in a consulting or employment agreement
between such employee and the Company or any of its subsidiaries (each, a
"MANAGEMENT EMPLOYEE"); PROVIDED, HOWEVER, that this Section 4.02 shall not
apply to any Management Employee that is an Affiliate of AAH (including for this
purpose any member of the Board of Directors who was an AAH Nominee). Each
Management Employee shall agree in writing (or if a party to this Agreement,
hereby agrees) that following any termination of his employment by the Company
or a subsidiary thereof "for cause" or his voluntary resignation from such
employment (a) he shall not compete, directly or indirectly (including as an
employee, proprietor, owner, partner, shareholder, member, joint venturer or
agent of, or as a consultant to, any person or entity which competes), with the
retail motor vehicle business of the Company or any of its subsidiaries within
50 miles of any motor vehicle dealership owned by the Company or any of its
subsidiaries where such Management Employee worked during the year prior to the
termination of his employment and (b) he shall not violate Section 4.03 (with
respect to each Management Employee, a "NON-COMPETE COVENANT"). A Management
Employee's Non-Compete Covenant shall become effective on the date that such
Management Employee's employment by the Company or a subsidiary thereof
terminates and shall terminate on the first anniversary of such date. The
Company shall not be obligated to provide any Specified Shareholders with the
benefit of any of the Company's obligations under Section 4.01 or Article V
unless each Management Employee that is a direct or indirect beneficial owner of
such Specified Shareholder has provided the Company with such written agreement
in a form reasonably satisfactory to the Company.
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SECTION 4.03. NONSOLICITATION. No Specified Shareholder (or if
such Specified Shareholder is not a natural person, any natural person that owns
a beneficial interest in such Specified Shareholder or a Subsidiary Holder
thereof) shall, during the time such Specified Shareholder is a Specified
Shareholder and for one (1) year after such Specified Shareholder ceases to be a
Specified Shareholder or such natural person ceases to own a beneficial interest
in such Specified Shareholder or a Subsidiary Holder thereof, (i) directly or
indirectly employ, solicit, entice or encourage to leave the employ of the
Company or any of its subsidiaries, any person who is, or at any time during the
preceding twelve months was, employed by, or otherwise engaged to perform
services for, the Company or any of its subsidiaries or (ii) otherwise
intentionally interfere with the relationship of the Company or any of its
subsidiaries with any person who is employed by or otherwise engaged to perform
services for the Company or any of its subsidiaries; PROVIDED, HOWEVER, that the
restrictions set forth in this Section 4.03 shall not apply to AAH, any
Affiliate of AAH or to any Specified Shareholder or natural person who is bound
by a non-solicitation restriction contained in a consulting or employment
agreement between such Member or natural person or the Company or its
subsidiaries.
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ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01. DEMAND REGISTRATIONS. (a) Any time following the
Effective Time and prior to the date on which the Company shall have obtained a
written opinion of legal counsel reasonably satisfactory to each Demand Holder
and addressed to the Company and such Demand Holder to the effect that the
Shares may be publicly offered for sale in the United States by such Demand
Holder or any Subsidiary Holder thereof without restriction as to manner of sale
and amount of securities sold and without registration or other restriction
under the Securities Act (such period, the "DEMAND PERIOD"), such Demand Holder
shall have the right on a number of occasions equal to the Demand Number for
such Demand Holder to require the Company to file a registration statement under
the Securities Act in respect of all or a portion of the Shares then held by
such Demand Holder and any Subsidiary Holder thereof (so long as such request
covers at least 1% of the shares of Common Stock then outstanding), by
delivering to the Company written notice stating that such right is being
exercised, specifying the number of the Shares to be included in such
registration and describing the intended method of distribution thereof (a
"DEMAND REQUEST"). In the case of any Demand Holder other than AAH, (i) such
Demand Holder may not make a Demand Request during the Lock-Up Period, (ii) such
Demand Holder may only make one Demand Request during each successive one- year
period following the termination of the Lock-Up Period and (iii) the first
Demand Request made by such Demand Holder shall be limited with respect to each
applicable Exercising Demand Holder to a number of Shares that is less than or
equal to 50% of the number of Shares owned at such time by such Exercising
Demand Holder and any Subsidiary Holder thereof; PROVIDED that such Exercising
Demand Holders may not in aggregate register pursuant to such Demand Request
more than 20% of the aggregate number of Shares owned at such time by the
Specified Shareholders and any Subsidiary Holders thereof (the "SHARE LIMIT");
PROVIDED, FURTHER, that if the aggregate number of Shares that such Exercising
Demand Holders have included in their Demand Request exceeds the Share Limit,
the Shares of each Exercising Demand Holder requesting the registration of more
than 20% of the aggregate number of Shares owned at such time by such Exercising
Demand Holder and any Subsidiary Holder thereof (with respect to each Exercising
Demand Holder, its "20% LIMIT") shall be excluded from the Demand Requests, to
the extent necessary to comply with the Share Limit, on a pro rata basis
according to the total number of Shares requested to be registered by all such
Exercising Demand Holders until the Demand Request of each such
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Exercising Demand Holder has been reduced to (and not below) its 20% Limit. As
promptly as practicable, but in no event later than forty-five (45) days after
the Company receives a Demand Request, the Company shall file with the SEC and
thereafter use its reasonable best efforts to cause to be declared effective
promptly a registration statement (a "DEMAND REGISTRATION") providing for the
registration of such number of Shares as such Exercising Demand Holder(s) shall
have demanded be registered for distribution in accordance with such intended
method of distribution.
(b) Anything in this Agreement to the contrary
notwithstanding, the Company shall be entitled to postpone and delay, for a
reasonable period of time, not to exceed forty-five (45) days in the case of
clauses (i) and (ii) below, or fifteen (15) days in the case of clause (iii)
below (each, a "BLACKOUT PERIOD"), the filing of any Demand Registration if the
Company shall determine that any such filing or the offering of any Shares would
(i) in the good faith judgment of the Board, unreasonably impede, delay or
otherwise interfere with any pending or contemplated material acquisition,
corporate reorganization or other material matter involving the Company (each, a
"MATERIAL TRANSACTION"), (ii) based upon advice from the Company's investment
banker or financial advisor, materially adversely affect any pending or
contemplated financing, offering or sale of any class of securities by the
Company, or (iii) in the reasonable and good faith judgment of the Board require
disclosure of material non-public information (other than information relating
to an event described in clause (i) or (ii) of this subsection (b)) which, if
disclosed at such time, would be materially harmful to the interests of the
Company and its stockholders; PROVIDED, HOWEVER, that in the case of a Blackout
Period pursuant to clause (i) or (ii) above, the Blackout Period shall earlier
terminate upon the completion or abandonment of the relevant securities offering
or sale, financing, acquisition, corporate reorganization or other similar
material transaction; and PROVIDED, FURTHER, that in the case of a Blackout
Period pursuant to clause (iii) above, the Company shall give written notice of
its determination to postpone or delay the filing of any Demand Registration and
in the case of clause (iii) above, the Blackout Period shall earlier terminate
upon public disclosure by the Company or public admission by the Company of such
material non-public information or such time as such material non-public
information shall be publicly disclosed without breach by the Exercising Demand
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Holder(s) of the penultimate sentence of this subsection (b); and PROVIDED,
FURTHER, that in the case of a Blackout Period pursuant to clause (i), (ii)
or (iii) above, the Company shall furnish to the Exercising Demand Holder(s)
a certificate of an executive officer of the Company to the effect that an
event permitting a Blackout Period has occurred. Notwithstanding anything
herein to the contrary, the Company shall not exercise pursuant to clause
(i), (ii), or (iii) of the preceding sentence the right to postpone or delay
the filing of any Demand Registration for an aggregate period of more than
ninety (90) days in any twelve (12) month period. Upon notice by the Company
to each Exercising Demand Holder of any such determination, such Exercising
Demand Holder covenants that it shall keep the fact of any such notice
strictly confidential, and, in the case of a Blackout Period pursuant to
clause (iii) above or Section 5.01(c) below, promptly halt any offer, sale,
trading or transfer by it or any of its Affiliates of any Common Stock for
the duration of the Blackout Period set forth in such notice (or until such
Blackout Period shall be earlier terminated in writing by the Company) and
promptly halt any use, publication, dissemination or distribution of the
Demand Registration, each prospectus included therein, and any amendment or
supplement thereto by it and any of its Affiliates for the duration of the
Blackout Period set forth in such notice (or until such Blackout Period shall
be earlier terminated in writing by the Company) and, if so directed by the
Company, will deliver to the Company any copies then in such Exercising
Demand Holder's possession of the prospectus covering such Shares, that was
in effect at the time of receipt of such notice. After the expiration of any
Blackout Period and without further request from any Demand Holder, the
Company shall effect the filing of the relevant Demand Registration and shall
use its reasonable best efforts to cause any such Demand Registration to be
declared effective as promptly as practicable unless such Demand Holder shall
have, prior to the effective date of such Demand Registration, withdrawn in
writing its initial request, in which case such withdrawn request shall not
constitute a Demand Registration for purposes of determining the number of
Demand Registrations to which such Demand Holder is entitled under this
Agreement.
(c) Anything in this Agreement to the contrary
notwithstanding, in case a Demand Registration has been filed, if a Material
Transaction has occurred, the Company may cause such Demand Registration to be
withdrawn and its effectiveness terminated or may postpone amending or
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supplementing such Demand Registration for a reasonable period of time, not to
exceed forty-five (45) days; PROVIDED, HOWEVER, that in no event shall a Demand
Registration so withdrawn by the Company count for the purposes of determining
the number of Demand Registrations to which the applicable Demand Holder is
entitled under Section 5.01(a); PROVIDED FURTHER that the Company shall not so
withdraw or terminate a Demand Registration Statement more than one time or
postpone or delay amending or supplementing any Demand Registration Statements
for an aggregate period of more than ninety (90) days during any twelve (12)
month period.
(d) A Demand Holder may withdraw a Demand Request in
circumstances including, but not limited to, the following: if (i) the Company
is in material breach of its obligations hereunder and has not cured such breach
after having received notice thereof and a reasonable opportunity to do so or
(ii) the withdrawal occurs during a Blackout Period. Any Demand Request
withdrawn (x) pursuant to subsection (d)(ii) prior to such Demand Registration
becoming effective or (y) pursuant to subsection (d)(i) shall not constitute a
Demand Registration for the purposes of determining the number of Demand
Registrations to which such Demand Holder is entitled under Section 5.01(a).
(e) Subject to Section 5.02, the Company may elect to include
in any registration statement filed pursuant to this Section 5.01 any Common
Stock to be issued by it or held by any of its subsidiaries or by any other
shareholders only to the extent such Common Stock is offered and sold pursuant
to, and on the terms and subject to the conditions of, any underwriting
agreement or distribution arrangements entered into or effected by the
applicable Demand Holder and only to the extent the managing underwriter thereof
does not reasonably and in good faith advise each applicable Exercising Demand
Holder prior to the consummation of any Demand Registration that the inclusion
in such registration statement of any such Common Stock to be issued by the
Company or sold by any of its subsidiaries or any other shareholder will not
create a substantial risk that the price per share of Common Stock that the
Exercising Demand Holder(s) will derive from such Demand Registration will be
materially and adversely affected or that the number of shares of Common Stock
sought to be registered (including any shares of Common Stock sought to be
registered at the request of the Company and any other shareholder and those
17
sought to be registered by such Exercising Demand Holder(s)) is a greater number
than can be reasonably sold.
(f) The managing underwriter for any Demand Registration shall
be selected by the Demand Holder exercising the Demand Request, PROVIDED that
such managing underwriter or underwriters shall be of recognized national
standing.
SECTION 5.02. "PIGGY-BACK" REGISTRATIONS. (a) Subject to
Section 4.01, if, at any time following the Effective Time, the Company proposes
to register any Common Stock under the Securities Act, whether or not for sale
for its own account, on a registration statement on Form S-1, Form S-2 or Form
S-3 (or any equivalent general registration form then in effect) for purposes of
a primary offering, secondary offering (including any Demand Registration) or
combined offering of such Common Stock, the Company shall give prompt written
notice to each Shareholder of its intention to do so. Such notice shall specify,
at a minimum, the number of shares of Common Stock so proposed to be registered,
the proposed date of filing of such registration statement, any proposed means
of distribution of such Common Stock, any proposed managing underwriter or
underwriters of such offering and a good faith estimate by the Company of the
proposed maximum offering price thereof, as such price is proposed to appear on
the facing page of such registration statement. Upon the written direction of a
Shareholder (a "PIGGY-BACK REQUEST"), given within thirty (30) business days
following the receipt by such Shareholder of any such written notice (which
direction shall specify the number of the Shares intended to be disposed of by
such Shareholder or any Subsidiary Holder thereof), the Company shall include in
such registration statement (a "PIGGY-BACK REGISTRATION" and, collectively with
a Demand Registration, a "REGISTRATION"), subject to the provisions of Section
5.02 hereof, such number of the Shares as shall be set forth in any such
Piggy-Back Request delivered by a Shareholder.
(b) In the event that the Company proposes to register Common
Stock in connection with an underwritten offering and a nationally recognized
independent investment banking firm selected by the Company or a Demand Holder
to act as managing underwriter thereof reasonably and in good faith shall have
advised the Company, any holder of Common Stock (including a Demand Holder if it
has made a Demand Request) intending to offer such Common Stock in a secondary
offering or combined offering (each, an "OTHER HOLDER") or
18
any Shareholder who submitted a Piggy-Back Request in writing that, in its
opinion, the inclusion in the registration statement of some or all of the
Shares sought to be registered by any such Shareholder making a Piggyback
Request creates a substantial risk that the price per share of Common Stock that
the Company or any Other Holder will derive from such registration will be
materially and adversely affected or that the number of shares of Common Stock
sought to be registered (including any shares of Common Stock sought to be
registered at the request of the Company and any Other Holder and those sought
to be registered by any such Shareholder making a Piggyback Request) is a
greater number than can reasonably be sold, the Company shall include in such
registration statement such number of shares of Common Stock as the Company, any
Other Holder and any such Shareholder making a Piggyback Request are so advised
can be sold in such offering without such an effect (the "MAXIMUM NUMBER") as
follows and in the following order of priority: (A) FIRST, in the case of a
secondary or combined offering, if a Demand Holder has made a Demand Request,
such number of shares of Common Stock as each applicable Exercising Demand
Holder intended to be registered and sold by it (subject to any limitation
pursuant to Section 5.01(a) on the number of Shares that may be registered under
such Demand Request by such Exercising Demand Holder), PROVIDED that if such
number exceeds the Maximum Number, the shares of Common Stock of such
Shareholders will be excluded on a PRO RATA basis according to the total number
of Shares requested to be registered by such persons (after giving effect to any
limitation pursuant to Section 5.01(a)), (B) SECOND, in the case of a secondary
or combined offering, if an Other Holder (other than such Exercising Demand
Holder(s)) has exercised a similar demand registration right and if to the
extent that such number of shares of Common Stock to be registered under clause
(A) is less than the Maximum Number, such number of shares of Common Stock as
the Other Holder intended to be registered and sold by it which, when added to
the number of shares of Common Stock to be registered under clause (A), is less
than or equal to the Maximum Number, (C) THIRD, in the case of a primary or
combined offering and if and to the extent that such number of shares of Common
Stock to be registered under clauses (A) and (B) is less than the Maximum
Number, such number of shares of Common Stock as the Company intended to be
registered and sold by the Company which, when added to the number of shares of
Common Stock to be registered under clauses (A) and (B), is less than or equal
to the Maximum Number, and (D) FOURTH, in the case of a secondary or
19
combined offering and if and to the extent that the number of shares of Common
Stock to be registered under clauses (A) , (B) and (C) is less than the Maximum
Number, such number of shares of Common Stock as the Shareholders who submitted
Piggy-Back Requests shall have intended to register which, when added to the
number of shares of Common Stock to be registered under clauses (A), (B), (C)
and (D), is less than or equal to the Maximum Number; PROVIDED that if such
number exceeds the Maximum Number, the shares of Common Stock of such
Shareholders will be excluded on a PRO RATA basis according to the total number
of Shares requested to be registered by such persons.
(c) No Piggy-Back Registration effected under this Section
5.02 shall be deemed to have been effected pursuant to Section 5.01 hereof or
shall release the Company of its obligations to a Demand Holder to effect any
Demand Registration upon request as provided under Section 5.01 hereof.
(d) Notwithstanding any request under this Section 5.02, each
Shareholder who submitted a Piggy-Back Request may elect in writing to withdraw
its request for inclusion of its Shares in any registration statement PROVIDED,
HOWEVER, that (i) such request must be made in writing prior to the earlier of
the execution of the underwriting agreement or the execution of the custody
agreement with respect to such registration and (ii) such withdrawal shall be
irrevocable and, after making such withdrawal, any such Shareholder shall no
longer have any right to include Shares in the registration as to which such
withdrawal was made.
(e) If, at any time after giving written notice of its
intention to register any Common Stock 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 or to delay registration of such
Common Stock, the Company may, at its election, give written notice of such
determination to each Shareholder who submitted a Piggy-Back Request and (i) in
the case of a determination not to register, shall be relieved of its obligation
to register any Shares in connection with such abandoned registration, without
prejudice, however, to the rights of an Exercising Demand Holder under Section
5.01 and (ii) in the case of a determination to delay such registration of the
Company's Common Stock, shall be permitted to delay the registration
20
of such Shares for the same period as the delay in registering such other Common
Stock.
(f) If, as a result of the proration provisions of this
Section 5.02, each Shareholder who submitted a Piggy-Back Request shall not be
entitled to include all Shares in a registration that each such Shareholder has
requested to be included, each such Shareholder may elect to withdraw his
request to include Shares in such registration or may reduce the number of
Shares requested to be included, PROVIDED that the same limitations in
subsection (d) shall apply.
SECTION 5.03. ADDITIONAL AGREEMENTS. Anything in this
Agreement to the contrary notwithstanding, if at any time the Company shall
obtain a written opinion of legal counsel reasonably satisfactory to AAH and
addressed to the Company and the Shareholders to the effect that the Shares may
be publicly offered for sale in the United States by each Shareholder or any
Subsidiary Holder without restriction as to manner of sale and amount of
securities sold and without registration or other restriction under the
Securities Act, the Company shall no longer be obligated to file or maintain a
registration statement with respect to the Shares pursuant to this Agreement. In
such case, the Company shall issue to each Shareholder certificates representing
the Shares without any legend restricting transfer and shall remove all stop
transfer orders relating to the Shares.
21
SECTION 5.04. REGISTRATION PROCEDURES. (a) In connection with
each registration statement prepared pursuant to this Agreement, and in
accordance with the intended method or methods of distribution of the Shares as
described in such registration statement, the Company shall, as soon as
reasonably practicable (and, in any event, subject to the terms of this
Agreement, including, without limitation, Section 5.01(a), at or before the time
required by applicable laws and regulations):
(i) prepare and file with the SEC a registration statement on
an appropriate registration form of the SEC, with respect to such
Shares, which form shall be selected by the Company with the
Shareholder's reasonable consent, and use its reasonable best efforts
to cause such registration statement to become and remain effective
promptly; PROVIDED that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will
furnish to one counsel selected by the Demand Holder exercising the
Demand Request and one counsel to the Shareholders selling under a
Piggy-Back Registration, and the sales or placement agent or agents, if
any, for the Shares and the managing underwriter or underwriters, if
any, draft copies of all such documents proposed to be filed at least
seven (7) days prior to such filing, which documents will be subject to
the reasonable review of the Shareholders, the sales or placement agent
or agents, if any, for the Shares and the managing underwriter or
underwriters, if any, and their respective agents and representatives
and the Company will not file any Demand Registration or amendment
thereto or any prospectus or any supplement thereto to which such
Demand Holder exercising such Demand Request shall reasonably object in
writing;
(ii) furnish without charge to the Shareholders, the sales or
placement agent or agents, if any, and the managing underwriter or
underwriters, if any, such number of copies of such registration
statement and of each amendment and supplement thereto (in each case
including all exhibits), such number of copies of the summary,
preliminary, final, amended or supplemented prospectuses included in
such registration statement in conformity with the requirements of the
Securities Act and any regulations promulgated thereunder and (upon the
reasonable request by the Shareholders) any documents incorporated
therein by reference and such
22
other documents as the Shareholders may reasonably request in order to
facilitate the public sale or other disposition of such Shares (the
Company hereby consenting to the use in accordance with all applicable
law of the prospectus or any amendment or supplement thereto by the
Shareholders in connection with the offering and sale of the Shares
covered by the prospectus or any amendment or supplement thereto);
(iii) use its reasonable best efforts to keep such
registration statement effective for at least 180 days (not counting
any period that such registration statement is not effective pursuant
to Section 5.01(c)) (the "EFFECTIVE PERIOD"); prepare and file with the
SEC such amendments, post-effective amendments and supplements to the
registration statement and the prospectus as may be necessary to
maintain the effectiveness of the registration for the Effective Period
and to cause the prospectus (and any amendments or supplements thereto)
to be filed pursuant to Rules 424 and 430A under the Securities Act
and/or any successor rules that may be adopted by the SEC, as such
rules may be amended from time to time; and comply with the provisions
of the Securities Act with respect to the disposition of all Shares
covered by such registration statement during the applicable period in
accordance with the intended method or methods of distribution thereof,
as specified in writing by the Shareholder;
(iv) except during any Blackout Period, make available for
inspection by the Shareholders or by any underwriter, attorney,
accountant or other agent retained by the Shareholders (collectively,
the "INSPECTORS") financial and other records and pertinent corporate
documents of the Company (collectively, the "RECORDS"), provide the
Inspectors with opportunities to discuss the business of the Company
with its officers and provide opportunities to discuss the business of
the Company with the independent public accountants who have certified
its most recent annual financial statements, in each case to the extent
customary for transactions of the size and type intended, as specified
by the Shareholders, but only to the extent reasonably necessary to
enable each Shareholder or any underwriter retained by the Shareholders
to conduct a "reasonable investigation" for purposes of Section 11(a)
of the Securities Act.
23
Records which the Company determines, in good faith, to be confidential
and which it notifies the Inspectors are confidential shall not be
disclosed by the Inspector unless (A) the disclosure of such Records is
necessary to avoid or correct a misstatement of a material fact or
omission to state a material fact in the Registration, (B) the
disclosure of such Records is required by any court or governmental
body with jurisdiction over any of the Shareholders or Inspector or (C)
all of the information contained in such Records has been made
generally available to the public. Each Shareholder agrees that it
will, upon learning that disclosure of such Records is sought in a
court of competent jurisdiction or by any governmental body, promptly
give prior notice to the Company and allow the Company, at its expense,
to undertake appropriate action to prevent disclosure of those Records
deemed confidential;
(v) if requested by (i) a Demand Holder exercising a Demand
Request, use reasonable best efforts to participate in and assist with
a "road show" and other customary marketing efforts in connection with
the sale of Shares pursuant to such registration statement, at such
times and in such manner as the Company and such Demand Holder mutually
may determine (and as do not unreasonably interfere with the Company's
operations); PROVIDED that the executives of the Company shall not be
required to participate in a "road show" unless the proposed aggregate
offering price of the Shares being sold pursuant to such registration
statement equals or exceeds $35,000,000 and (ii) a Demand Holder
executing a block trade, use reasonable best efforts to assist with
such block trade, at such times and in such manner as the Company and
such Demand Holder mutually may determine (and as do not unreasonably
interfere with the Company's operations);
(vi) use its reasonable best efforts to register or qualify
the Shares covered by such registration statement under such other
securities or "blue sky" laws of such jurisdictions in the United
States as the Shareholders shall reasonably request, keep such
registrations or qualifications in effect for so long as the
registration statement remains in effect, and do any and all other acts
and things which may be reasonably necessary to enable the Shareholders
or any underwriter to consummate the public sale or other
24
disposition of the Shares in such jurisdictions; PROVIDED, HOWEVER,
that in no event shall the Company be required to qualify to do
business as a foreign corporation in any jurisdiction where it is not
so qualified; to execute or file any general consent to service of
process under the laws of any jurisdiction; to take any action that
would subject it to service of process in suits other than those
arising out of the offer and sale of the Shares covered by the
registration statement; or to subject itself to taxation in any
jurisdiction where it would not otherwise be obligated to do so, but
for this paragraph (vii);
(vii) use its reasonable best efforts to cause the Shares to
be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the Shareholders to
consummate the public sale or other disposition of the Shares;
(viii) use its reasonable best efforts to cause all Shares
covered by such registration statement to be approved for listing on a
national securities exchange or approved for trading on a national
interdealer quotation system or listed on the securities exchanges on
which similar securities issued by the Company are then listed or
traded;
(ix) promptly notify each Shareholder whose Shares are covered
by a Registration, at any time when a prospectus relating to any of the
Shares covered by such registration statement is required to be
delivered under the Securities Act, of the Company's becoming aware
that 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 the light of the
circumstances then existing, and, at the request of the Demand Holder
exercising the Demand Request, promptly prepare and furnish to the
Shareholders a reasonable number of copies of a prospectus supplemented
or amended so that, as thereafter delivered to the purchasers of such
Shares, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the
25
statements therein not misleading in the light of the circumstances
then existing;
(x) promptly notify the Shareholders whose Shares are covered
by a Registration, the sales or placement agent or agents, if any, for
the Shares and the managing underwriter or underwriters, if any,
thereof, after becoming aware thereof, when the registration statement
or any related prospectus or any amendment or supplement has been
filed, and, with respect to the registration statement or any
post-effective amendment, when the same has become effective, (A) of
any request by the SEC for amendments or supplements to the
registration statement or the related prospectus or for additional
information, (B) of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose, (C) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
initiation of any proceeding for such purpose or (D) within the
Effective Period of the happening of any event which makes any
statement in the registration statement or any post-effective amendment
thereto, prospectus or any amendment or supplement thereto, or any
document incorporated therein by reference untrue in any material
respect or which requires the making of any changes in the registration
statement or post- effective amendment thereto or any prospectus or
amendment or supplement thereto so that they will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein (in light of the circumstances under which they were made) not
misleading;
(xi) during the Effective Period, use its reasonable best
efforts to obtain the withdrawal of any order suspending the
effectiveness of the registration statement or any post-effective
amendment thereto;
(xii) permit AAH if, in AAH's sole judgment exercised in good
faith, it believes it might be deemed to be a controlling person of the
Company, to participate in the preparation of such registration
statement and all discussions between the Company and the SEC or its
staff with respect to such registration
26
statement, and to require the insertion therein of material, furnished
to the Company in writing, which in the sole judgment exercised in good
faith of AAH should be included;
(xiii) deliver promptly to each Shareholder whose Shares are
subject to a Registration, upon such Shareholder's request, copies of
all correspondence between the SEC and the Company, its counsel or
auditors and all memoranda relating to discussions with the SEC or its
staff with respect to the registration statement and permit such
Shareholder to do such investigation, with respect to information
contained in or omitted from the registration statement, as it deems
reasonably necessary. Each such Shareholder agrees that it will use its
reasonable efforts not to interfere unreasonably with the Company's
business when conducting any such investigation;
(xiv) provide a transfer agent and registrar for all such
Shares covered by such registration statement not later than the
effective date of such registration statement, which transfer agent and
registrar may be the Company, subject to any applicable law or
regulations;
(xv) cooperate with each Shareholder whose Shares are subject
to a Registration and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates
representing such Shares to be sold under the registration statement,
which certificates shall not bear any restrictive legends except as
required by law; and, in the case of an underwritten offering, enable
such Shares to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, may request in
writing at least two (2) business days prior to any sale of the Shares
to the underwriters;
(xvi) enter into such agreements (including, if the offering
is an underwritten offering, an underwriting agreement) as are
customary in transactions of such kind and take such other actions as
are reasonably necessary in connection therewith in order to expedite
or facilitate the disposition of such Shares; and (A) make such
representations and warranties with respect to the registration
statement,
27
post-effective amendment or supplement thereto, prospectus or any
amendment or supplement thereto, and documents incorporated by
reference, if any, to the managing underwriter or underwriters, if any,
of the Shares and, at the option of each Shareholder whose Shares are
subject to a Registration, make to and for the benefit of such
Shareholder the representations, warranties and covenants of the
Company which are being made to the underwriters, in form, substance
and scope as are customarily made by the Company in connection with
offerings of Shares in transactions of such kind (representations and
warranties by the Other Holders shall also be made as are customary in
agreements of that type); provided that the Company shall not be
required to make any representations or warranties with respect to
information specifically provided by such Other Holders for inclusion
in the registration documents; (B) obtain an opinion of counsel to the
Company (which counsel may be internal counsel for the Company unless
the managing underwriter or underwriters shall otherwise reasonably
request) in customary form and covering matters of the type customarily
covered by such an opinion, addressed to such managing underwriter or
underwriters, if any, and to the Shareholders and dated the date of the
closing of the sale of the Shares relating thereto; (C) obtain a
"comfort" letter or letters from the independent certified public
accountants who have certified the Company's most recent audited
financial statements that are incorporated by reference in the
registration statement which is addressed to the Shareholders and the
managing underwriter or underwriters, if any, and is dated the date of
the prospectus used in connection with the offering of such Shares
and/or the date of the closing of the sale of such Shares relating
thereto, such letter or letters to be in customary form and covering
such matters of the type customarily covered by "comfort" letters of
such type; (D) deliver such documents and certificates as may be
reasonably requested by any Shareholder whose Shares are subject to a
Registration and the managing underwriter or underwriters, if any, of
the Shares to evidence compliance with any customary conditions
contained in the underwriting agreement or other agreement entered into
by the Company; and (E) undertake such obligations relating to expense
reimbursement, indemnification and contribution as provided in Sections
5.05 and 5.06 hereof; and
28
(xvii) comply with all applicable rules and regulations of the
SEC and generally make available to its security holders an earnings
statement (which need not be audited), as soon as reasonably
practicable but in no event later than ninety (90) days after the end
of the period of twelve (12) months commencing on the first day of any
fiscal quarter next succeeding each sale by each Shareholder of Shares
which have been registered pursuant to this Agreement (the "REGISTERED
SHARES") after the date hereof, which earnings statement shall cover
such twelve (12) month period and shall satisfy the provisions of
Section 11(a) of the Securities Act and may be prepared in accordance
with Rule 158 under the Securities Act.
(b) In the event that the Company would be required, pursuant
to Section 5.04(a)(xi)(D) above, to notify any Shareholder, the sales or
placement agent or agents, if any, for the Shares and the managing underwriter
or underwriters, if any, thereof, the Company shall, subject to the provisions
of Section 5.01(b) hereof, as promptly as practicable, prepare and furnish to
each Shareholder, to each placement or sales agent, if any, and to each
underwriter, if any, a reasonable number of copies of a prospectus supplemented
or amended so that, as thereafter delivered to purchasers of Registered Shares,
such prospectus shall not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Each Shareholder agrees that, upon receipt of any notice
from the Company pursuant to Section 5.04(a)(xi)(D) hereof, such Shareholder
shall, and shall use its reasonable best efforts to cause any sales or placement
agent or agents for the Shares and the underwriters, if any, thereof, to
forthwith discontinue disposition of the Shares until such person shall have
received copies of such amended or supplemented prospectus and, if so directed
by the Company, to destroy or to deliver to the Company all copies, other than
permanent file copies, then in its possession of the prospectus (prior to such
amendment or supplement) covering such Shares as soon as practicable after such
Shareholder's receipt of such notice.
(c) Each Shareholder whose Shares are covered by a
Registration shall furnish to the Company in writing such information regarding
such Shareholder and its intended
29
method of distribution of the Shares as the Company may from time to time
reasonably request in writing, but only to the extent that such information is
required in order for the Company to comply with its obligations under all
applicable securities and other laws and to ensure that the prospectus relating
to such Shares conforms to the applicable requirements of the Securities Act and
the rules and regulations thereunder. Each Shareholder whose Shares are covered
by a Registration shall notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by such Shareholder to
the Company or of the occurrence of any event, in either case as a result of
which any prospectus relating to the Shares contains or would contain an untrue
statement of a material fact regarding such Shareholder or its intended method
of distribution of such Shares or omits to state any material fact regarding
such Shareholder or its intended method of distribution of such Shares required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and promptly
furnish to the Company any additional information required to correct and update
any previously furnished information or required so that such prospectus shall
not contain, with respect to such Shareholder or the distribution of the Shares,
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(d) Each Shareholder agrees not to, and shall not cause any
Subsidiary Holder to, effect any public sale or distribution of any Shares,
including any sale pursuant to Rule 144 under the Securities Act, and not to
effect any such public sale or distribution of any other equity security of the
Company or of any security convertible into or exchangeable or exercisable for
any equity security of the Company (in each case, other than as part of such
underwritten public offering) during the ten (10) days prior to, and during the
ninety (90) day period (or such longer period as the Shareholder and/or the
applicable Subsidiary Holder agrees with the underwriter of such offering)
beginning on, the consummation of any underwritten public offering of the Shares
covered by a registration statement referred to in Section 5.02 to the extent
the Shareholder's or Subsidiary Holder's Registered Shares are being sold
thereunder.
30
(e) In the case of any registration under Section 5.01
pursuant to an underwritten offering, or in the case of a Registration under
Section 5.02 if the Company has determined to enter into an underwriting
agreement in connection therewith, all Shares to be included in such
Registration shall be subject to such underwriting agreement and no person may
participate in such Registration unless such person agrees to sell such person's
securities on the basis provided therein which shall be the same for all
Shareholders whose Shares are covered by such Registration and completes and
executes all questionnaires, indemnities, underwriting agreements and other
document s(other than powers of attorney) which must be executed in connection
therewith, and provides such other information to the Company or the underwriter
as may be reasonably requested to register such person's Shares.
SECTION 5.05. REGISTRATION EXPENSES. The Company agrees to
bear and to pay, or cause to be paid, promptly upon request being made therefor,
all expenses incident to the Company's performance of or compliance with this
Agreement, including, without limitation: (a) all fees and expenses in
connection with the qualification of the Registered Shares for offering and sale
under state securities or "blue sky" laws referred to in Section 5.04(a)(vii)
hereof, including reasonable fees and disbursements of counsel for any placement
or sales agent or underwriter in connection with such qualifications, (b) all
expenses relating to the preparation, printing, distribution and reproduction of
the registration statement, each prospectus included therein or prepared for
distribution pursuant hereto, each amendment or supplement to the foregoing, the
certificates representing the Shares and all other documents relating hereto,
(c) the costs and charges of any escrow agent, transfer agent, registrar, any
custodian or attorney-in-fact appointed to act on behalf of the Shareholders
(including, without limitation, all salaries and expenses of the Company's
officers and employees performing legal or accounting duties), (d) fees,
disbursements and expenses of the Company's counsel and its other advisors and
experts and independent certified public accountants of the Company (including
the expenses of any opinions or "comfort" letters required by or incident to
such performance and compliance), (e) the fees and expenses incurred in
connection with the listing of the Shares on The New York Stock Exchange, Inc.
and any other stock exchange or national securities exchange on which Shares
shall at such time be listed, and (f) fees, disbursements and
31
expenses of one counsel selected by a Demand Holder exercising a Demand Request
and retained on behalf of all Shareholders registering Shares in connection with
such Demand Request and any Piggyback Request in connection therewith
(collectively, the "REGISTRATION EXPENSES"). To the extent that any Registration
Expenses are incurred, assumed or paid by the Shareholders, any sales or
placement agent or agents for the Shares and the underwriters, if any, thereof,
the Company shall reimburse such person for the full amount of the Registration
Expenses so incurred, assumed or paid promptly after receipt of a request
therefor. Each Shareholder shall pay its pro rata portion of underwriting
discounts and commissions and any capital gains, income or transfer taxes, if
any, attributable to the sale of such Shareholder's Shares being registered.
SECTION 5.06. INDEMNIFICATION; CONTRIBUTION. (a)
INDEMNIFICATION BY THE COMPANY. The Company shall, and it hereby agrees to,
indemnify and hold harmless each Shareholder, and each person who participates
as a placement or sales agent or as an underwriter in any offering or sale of
the Shares, against any losses, claims, damages or liabilities to which each
such Shareholder or such agent or underwriter may become subject, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) (collectively, "CLAIMS") arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
registration statement pursuant to which any Shares of such Shareholder are
registered pursuant to this Agreement, or any preliminary or final prospectus
contained therein, or any amendment or supplement thereto, or any document
incorporated by reference therein, or arise out of or are based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, and the Company shall,
and it hereby agrees to, reimburse each such Shareholder or any such agent or
underwriter for any legal or other out-of-pocket expenses reasonably incurred by
them in connection with investigating or defending any such Claims; PROVIDED,
HOWEVER, that the Company shall not be liable to any such person in any such
case to the extent that any such Claims arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, or preliminary or final prospectus, or amendment or
supplement thereto, in reliance upon and in conformity with written
32
information furnished to the Company by such Shareholder or any agent,
underwriter or representative of such Shareholder expressly for use therein, or
by such Shareholder's failure to furnish the Company, upon request, with the
information with respect to such Shareholder, or any agent, underwriter or
representative of such Shareholder, or such Shareholder's intended method of
distribution, that is the subject of the untrue statement or omission or if the
Company shall sustain the burden of proving that such Shareholder or such agent
or underwriter sold securities to the person alleging such Claims without
sending or giving, at or prior to the written confirmation of such sale, a copy
of the applicable prospectus (excluding any documents incorporated by reference
therein) or of the applicable prospectus, as then amended or supplemented
(excluding any documents incorporated by reference therein), if the Company had
previously furnished copies thereof to such Shareholder or such agent or
underwriter, and such prospectus corrected such untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement.
(b) INDEMNIFICATION BY THE SHAREHOLDERS AND ANY AGENTS OR
UNDERWRITERS. Each Shareholder shall, and hereby agrees, severally and not
jointly, to (i) indemnify and hold harmless the Company, its directors,
officers, employees and controlling persons, if any, each other Shareholder, and
each underwriter, its partners, officers, directors, employees and controlling
persons, if any, in any offering or sale of Shares, against any Claims to which
the Company, its directors, officers, employees and controlling persons, if any,
may become subject, insofar as such Claims (including any amounts paid in
settlement as provided herein), or actions or proceedings in respect thereof,
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such registration statement, or any preliminary
or final prospectus contained therein, or any amendment or supplement thereto,
or any document incorporated by reference therein, or arise out of or are based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Shareholder
or any agent, underwriter, or representative (as the case may be) expressly for
use therein, and (ii)
33
reimburse the Company for any legal or other out-of-pocket expenses reasonably
incurred by the Company in connection with investigating or defending any such
Claim.
(c) NOTICE OF CLAIMS, ETC. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of written notice of the
commencement of any action or proceeding for which indemnification under
subsection (a) or (b) may be requested, such indemnified party shall, without
regard to whether a claim in respect thereof is to be made against an
indemnifying party pursuant to the indemnification provisions of, or as
contemplated by, this Section 5.06, notify such indemnifying party and the
underwriter in writing of the commencement of such action or proceeding; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party in respect of such action
or proceeding on account of the indemnification provisions of or contemplated by
Section 5.06(a) or 5.06(b) hereof unless the indemnifying party was materially
prejudiced by such failure of the indemnified party to give such notice, and in
no event shall such omission relieve the indemnifying party from any other
liability it may have to such indemnified party. In case any such action or
proceeding shall be brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, unless in the reasonable opinion
of outside counsel to the indemnified party a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, such
indemnifying party shall be entitled to participate therein and, to the extent
that it shall determine, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, 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, such
indemnifying party shall not be liable to such indemnified party for any legal
or any other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation
(unless such indemnified party reasonably objects to such assumption on the
grounds that there may be defenses available to it which are different from or
in addition to the defenses available to such indemnifying party, in which event
the indemnified party shall have the right to control its defense and shall be
reimbursed by the indemnifying party for the expenses incurred in connection
with retaining one separate counsel). If the indemnifying party is not entitled
to, or elects not
34
to, assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel for each indemnified party with respect to
such claim. The indemnifying party will not be subject to any liability for any
settlement made without its consent, which consent shall not be unreasonably
withheld or delayed. No indemnifying party shall, without the prior written
consent of the indemnified party, compromise or consent to entry of any judgment
or enter into any settlement agreement with respect to any action or proceeding
in respect of which indemnification is sought under Section 5.06(a) or (b)
(whether or not the indemnified party is an actual or potential party thereto),
unless such compromise, consent or settlement includes an unconditional term
thereof the giving by the claimant or plaintiff to the indemnified party of a
release from all liability in respect of such claim or litigation and does not
subject the indemnified party to any material injunctive relief or other
material equitable remedy.
(d) CONTRIBUTION. Each Shareholder and the Company agree that
if, for any reason, the indemnification provisions contemplated by Sections
5.06(a) or 5.06(b) hereof are unavailable to or are insufficient to hold
harmless an indemnified party in respect of any Claims referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such Claims in such proportion as is
appropriate to reflect the relative fault of, and benefits derived by, the
indemnifying party and the indemnified party, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The relative benefit derived by the parties shall be
determined by reference to the fact that the Company entered into this Agreement
as an integral part of the transactions pursuant to which the Shares were
acquired. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.06(d) were determined by any method of
allocation which does not take account of the equitable considerations referred
to in this Section 5.06(d). The amount paid or
35
payable by an indemnified party as a result of the Claims referred to above
shall be deemed to include (subject to the limitations set forth in Section
5.06(c) hereof) any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action,
proceeding or claim. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnification and contribution required by this
Section 5.06 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(f) BENEFICIARIES OF INDEMNIFICATION. The obligations of the
Company under this Section 5.06 shall be in addition to any liability that it
may otherwise have and shall extend, upon the same terms and conditions, to each
employee, officer, director and partner of each Shareholder or any Subsidiary
Holder, each agent of such Shareholder or any Subsidiary Holder, each
underwriter of the Shares and each person, if any, who controls such Shareholder
or any Subsidiary Holder or any such agent or underwriter within the meaning of
the Securities Act; and the obligations of such Shareholder and each Subsidiary
Holder and any agents or underwriters contemplated by this Section 5.06 shall be
in addition to any liability that such Shareholder or any Subsidiary Holder or
their respective agents or underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company
(including any person who, with his consent, is named in any registration
statement as about to become a director of the Company) and to each person, if
any, who controls the Company within the meaning of the Securities Act.
SECTION 5.07. UNDERWRITERS. If any of the Shares are to be
sold pursuant to an underwritten offering, the investment banker or bankers and
the managing underwriter or underwriters thereof shall be selected by the
Company except in the case of a Demand Registration, in which the managing
underwriter or underwriters shall be selected by the Demand Holder exercising
the Demand Request, PROVIDED that such managing underwriter or underwriters must
be of recognized national standing.
36
SECTION 5.08. EXCHANGE ACT FILINGS; RULE 144; RULE 144A. (a)
The Company covenants to and with each Shareholder that to the extent it shall
be required to do so under the Exchange Act, the Company shall timely file the
reports required to be filed by it under the Exchange Act or the Securities Act
(including, but not limited to, the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the SEC
under the Securities Act and the rules and regulations adopted by the SEC
thereunder) and shall take such further action as any Shareholder may reasonably
request, all to the extent required from time to time to enable the Shareholders
to sell Shares without registration under the Securities Act within the
limitations of the exemption provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC. Upon the request of a Shareholder, the Company
shall deliver to such Shareholder a written statement as to whether it has
complied with such requirements.
(b) If at any time the Company is not subject to Section 13 or
15(d) of the Exchange Act and is not exempt from reporting pursuant to Rule
12g3-2(b) under the Exchange Act, the Company agrees, upon the request of a
Shareholder seeking to transfer Shares in conformity with Rule 144A under the
Securities Act, to furnish to such Shareholder or prospective purchasers of the
Shares from the Shareholder the information required by Rule 144A(d)(4)(i) under
the Securities Act in the manner and at the times contemplated by such Rule.
(c) The Company covenants to make available "adequate current
public information" concerning the Company within the meaning of Rule 144(c)
under the Securities Act.
SECTION 5.09. AGREEMENTS OF THE SHAREHOLDERS. Each Shareholder
agrees not to, and it shall cause its Affiliates not to, make any sale, transfer
or other disposition of Shares except in compliance with the registration
requirements of the Securities Act and the rules and regulations thereunder,
including exemptions, and in accordance with the terms of this Agreement.
SECTION 5.10. RECAPITALIZATIONS, EXCHANGES, ETC. AFFECTING THE
SHARES. The provisions of this Agreement shall apply to any and all shares of
capital stock of the Company or any successor or assign of the Company (whether
37
by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for, or in substitution of the Shares, by reason of a
stock dividend, stock split, stock issuance, reverse stock split, combination,
recapitalization, reclassification, merger, consolidation or otherwise. Upon the
occurrence of any such event, amounts hereunder shall be appropriately adjusted.
ARTICLE VI
TERM OF AGREEMENT
SECTION 6.01. TERM OF AGREEMENT. This Agreement shall take
effect immediately upon the occurrence of Effective Time. This Agreement (other
than the provisions of Section 5.06) shall terminate with respect to any
Shareholder on the date that such Shareholder and its Subsidiary Holders no
longer own any shares of Common Stock.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01. SPECIFIC PERFORMANCE. The parties hereto hereby
declare that irreparable damage would occur as a result of the failure of any
party hereto to perform any of its obligations under this Agreement in
accordance with the specific terms hereof. Therefore, all parties hereto shall
have the right to specific performance of the obligations of the other parties
under this Agreement and if any party hereto shall institute any action or
proceeding to enforce the provisions hereof, any person against whom such action
or proceeding is brought hereby waives the claim or defense therein that such
party has an adequate remedy at law. The right to specific performance should be
in addition to any other remedy to which a party hereto may be entitled at law
or in equity.
SECTION 7.02. LEGENDS. (a) Each certificate representing
Shares shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
TERMS AND CONDITIONS (INCLUDING RESTRICTIONS ON VOTING AND
TRANSFER) SET FORTH IN A SHAREHOLDERS AGREEMENT DATED AS OF o,
o, A COPY OF WHICH MAY BE OBTAINED FROM [NEWCO], INC. NO
38
TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF, OR
BE EFFECTIVE WITH RESPECT TO, [NEWCO], INC. UNLESS ACCOMPANIED
BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT.
(b) In addition, stop transfer restrictions will be given to
the Company's transfer agent(s) with respect to the Shares and there will be
placed on the certificates or instruments representing the Shares, and on any
certificate or instrument delivered in substitution therefor, a legend stating
in substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO SUCH REGISTRATION OR IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
(c) The Company hereby agrees that it will cause stop transfer
restrictions to be released with respect to any Shares that are transferred in
compliance with the terms and provisions of this Agreement and (i) pursuant to
an effective registration statement under the Securities Act, (ii) pursuant to
Rule 144 or 145 under the Securities Act, (iii) in accordance with the
requirements of Rule 903 or 904 of Regulation S under the Securities Act, or
(iv) pursuant to another exemption from the registration requirements of the
Securities Act; PROVIDED, HOWEVER, that in the case of any transfer pursuant to
clause (ii), (iii) or (iv) above, the request for transfer is accompanied by a
written statement signed by a Shareholder confirming compliance with the
requirements of the relevant exemption from registration; and PROVIDED, FURTHER,
that in the case of any transfer pursuant to clause (iv) above, other than any
transfer by such Shareholder to one or more of such Shareholder's direct or
indirect subsidiaries, or among such subsidiaries, or by any such subsidiary to
such Shareholder, the Company shall have received a written opinion of counsel
reasonably satisfactory to the Company. The Company further agrees that it will
cause the legends described in subsections (a) and (b) of this Section 7.02 to
be removed in the event of any transfer as provided in clause (i), (ii) or (iii)
above.
39
SECTION 7.03. CONFLICTS AND INCONSISTENT AGREEMENTS. Each of
the Shareholders and the Company shall take all action necessary, including but
not limited to the voting of capital stock of the Company, to ensure that the
certificate of incorporation and by-laws of the Company and the certificates of
incorporation and by-laws or other governing documents of the Company's
subsidiaries are consistent with, and do not conflict with, the terms of
this Agreement. Neither the Company nor any Shareholder shall enter into any
agreement inconsistent with the terms of this Agreement.
SECTION 7.04. COMPLETE AGREEMENT. This Agreement constitutes
the entire agreement and understanding among the parties hereto with respect to
the matters referred to herein and supersedes all prior agreements and
understandings among the parties hereto with respect to the matters referred to
herein.
SECTION 7.05. AMENDMENT. This Agreement may not be amended,
modified or supplemented and no waivers of or consents to departures from the
provisions hereof may be given unless consented to in writing by the Company,
AAH and Specified Shareholders holding a majority of all Shares held by
Specified Shareholders.
SECTION 7.06. SUCCESSORS; ASSIGNS; SUBSIDIARY HOLDERS. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned, directly or indirectly, including by operation of law, by any
Shareholder without the prior written consent of the Company. The terms and
conditions of this Agreement shall be binding on and inure to the benefit of the
respective successors and permitted assigns of the parties hereto. Each
Shareholder agrees with respect to any Affiliate that becomes a Subsidiary
Holder hereunder, to promptly thereafter cause such Affiliate to execute a
counterpart hereof agreeing to be bound by all of the terms, conditions and
restrictions of this Agreement, as and to the same extent as such Shareholder.
The execution of a counterpart hereof by an Affiliate who has become a
Subsidiary Holder does not constitute an assignment of any part of this
Agreement prohibited by this Section 7.06, and the Shareholder with which such
Subsidiary Holder is affiliated with will remain bound by all of the terms,
conditions and restrictions of this Agreement.
40
SECTION 7.07. ATTORNEY FEES. A party in breach of this
Agreement shall, on demand, indemnify and hold harmless the other party for and
against all reasonable out-of-pocket expenses, including legal fees and
expenses, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement. The payment of such expenses is
in addition to any other relief to which such other party may be entitled.
SECTION 7.08. NOTICES. All notices or other communications
required or permitted to be given hereunder shall be in writing and shall be
delivered by hand or sent by prepaid telex, cable or telecopy or sent, postage
prepaid, by registered, certified or express mail or reputable overnight courier
service and shall be deemed given when so delivered by hand, telexed, cabled or
telecopied, or if mailed, three days after mailing (one business day in the case
of express mail or overnight courier service), as follows (or at such other
address, telephone number and fax number as a party shall notify each other
party hereto):
(i) if to the Company:
Xxxxxx Automotive Group, Inc.
Three Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: General Counsel
with copies to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
(ii) if to AAH:
c/o Ripplewood Holdings L.L.C.
Xxx Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
with copies to:
41
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
(iii) if to any of the Specified Shareholders, at the
addresses for such Specified Shareholder set forth in the LLC
Agreement.
with copies to:
Patterson, Belknap, Xxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
SECTION 7.09. INTERPRETATION; EXHIBITS AND SCHEDULES. The
headings contained in this Agreement, in any Exhibit or Schedule hereto and in
the table of contents to this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. All
Exhibits and Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise
defined therein, shall have the meaning as defined in this Agreement.
SECTION 7.10. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other party.
SECTION 7.11. SEVERABILITY. If any provision of this Agreement
(or any portion thereof) or the application of any such provision (or any
portion thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstance.
SECTION 7.12. GOVERNING LAW. THIS AGREEMENT AND ALL ACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY AND
42
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
(WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).
SECTION 7.13. SUBMISSION TO JURISDICTION. ANY AND ALL SUITS,
LEGAL ACTIONS OR PROCEEDINGS ARISING OUT OF THIS AGREEMENT SHALL BE BROUGHT IN
THE SUPERIOR COURT OR THE COURT OF CHANCERY OF THE STATE OF DELAWARE OR THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE OR IN THE SUPREME
COURT OF THE STATE OF NEW YORK, NEW YORK COUNTY OR THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND EACH PARTY HEREBY SUBMITS TO AND
ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF SUCH SUITS,
LEGAL ACTIONS OR PROCEEDINGS. IN ANY SUCH SUIT, LEGAL ACTION OR PROCEEDING, EACH
PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLIANT OR OTHER PROCESS AND
AGREES THAT SERVICE THEREOF MAY BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED
TO IT AT ITS ADDRESS SET FORTH IN THE BOOKS AND RECORDS OF THE COMPANY. TO THE
FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OR ANY SUCH
SUIT, LEGAL ACTION OR PROCEEDING IN ANY SUCH COURT AND HEREBY FURTHER WAIVES ANY
CLAIM THAT ANY SUIT, LEGAL ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 7.14. WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY (I) CERTIFIES THAT NO
REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 7.14.
43
SECTION 7.15. NO WAIVER OF RIGHTS. No failure or delay on the
part of any party in the exercise of any power or right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power
or right preclude other or further exercise thereof or of any other right or
power. The waiver by any party or parties hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach hereunder. All rights and remedies existing under this
Agreement are cumulative and are not exclusive of any rights or remedies
otherwise available.
44
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first written above.
XXXXXX AUTOMOTIVE GROUP,
INC.,
by
-----------------------------
Name:
Title:
XXXXXX AUTOMOTIVE HOLDINGS
L.L.C.,
by
-----------------------------
Name:
Title:
SPECIFIED SHAREHOLDERS:
----------------------
XXXXXX AUTOMOTIVE HOLDINGS
L.L.C.,
by
-----------------------------
Name:
Title:
XXXXXX AUTOMOTIVE GROUP,
INC.,
by
-----------------------------
Name:
Title:
XXXXXX MANAGEMENT SERVICES,
INC.
by
-----------------------------
Name:
Title:
XXXXXX CHEVROLET, INC.
by
-----------------------------
Name:
Title:
SPECTRUM SOUND &
ACCESSORIES, INC.
by
-----------------------------
Name:
Title:
XXXXXX XXXXXXXX
AUTOMOBILES, INC.
by
-----------------------------
Name:
Title:
XXXXXX LUXURY IMPORTS, INC.
by
-----------------------------
Name:
Title:
XXXXXX ATLANTA IMPORTS,
INC.
by
-----------------------------
Name:
Title:
SPECTRUM LEASING, INC.
by
-----------------------------
Name:
Title:
XXXXXX X. XXXXXXX III
by
-----------------------------
Name:
Title:
XXXX X. XXXXXXX
by
-----------------------------
Name:
Title:
THE XXXXXXXX X. XXXXXXX
IRREVOCABLE TRUST
by
-----------------------------
Name:
Title:
THE XXXXXXXX FAMILY LIMITED
PARTNERSHIP
by
-----------------------------
Name:
Title:
RIVER RIDGE INVESTMENTS,
LLC
by
-----------------------------
Name:
Title:
THE XXXXX X. XXXXXXXXX
IRREVOCABLE TRUST
by
-----------------------------
Name:
Title:
THE XXXXXXX X. XXXXXXXXX
IRREVOCABLE TRUST
by
-----------------------------
Name:
Title:
XXX XXXXX
by
-----------------------------
Name:
Title:
XXXX XXXXXX
by
-----------------------------
Name:
Title:
XXXXXXX X. XXXXXXXX
by
-----------------------------
Name:
Title:
XXXXXX XXXXXX
by
-----------------------------
Name:
Title:
XXXXXX X. XXXXXXX 1999 ATT
TRUST
by
-----------------------------
Name:
Title:
XXXXXXX X. XXXXXX 1999 ATT
TRUST
by
-----------------------------
Name:
Title:
XXXXX X. XXXXXX 1999 ATT
TRUST
by
-----------------------------
Name:
Title:
XXXXXXX X. XXXXXXXXX
by
-----------------------------
Name:
Title:
XXXXX XXXXXXX
by
-----------------------------
Name:
Title:
XXXXXXXX X. XXXXXX AND
XXXXXXXXX X. XXXXXX,
TENANTS BY THE ENTIRETIES
by
-----------------------------
Name:
Title:
XXXXX X. XXXXXXXX
by
-----------------------------
Name:
Title:
XXXXXXX X. XXXXXXXX
by
-----------------------------
Name:
Title:
XXXXX X. XXXXX
by
-----------------------------
Name:
Title:
XXXXXX X. XXXXX, XX.
by
-----------------------------
Name:
Title:
XXXX X. XXXXX
by
-----------------------------
Name:
Title:
XXXX X. XXXX
by
-----------------------------
Name:
Title:
CHARLIE (C.B.) TOMM AND
XXXXX XXXXXXXXXX TOMM,
TENANTS BY THE ENTIRETIES
by
-----------------------------
Name:
Title:
XXXXXXX X. XXXXXXXX
by
-----------------------------
Name:
Title:
CNC AUTOMOTIVE, LLC
by
-----------------------------
Name:
Title:
DEALER GROUP
by
-----------------------------
Name:
Title:
XXXX X. XXXXX
by
-----------------------------
Name:
Title:
J.I.W. ENTERPRISES, INC.
by
-----------------------------
Name:
Title:
DMCD AUTOS IRVING, INC.
by
-----------------------------
Name:
Title:
DMCD AUTOS HOUSTON, INC.
by
-----------------------------
Name:
Title:
XXXXX XXXXX
by
-----------------------------
Name:
Title:
XXXX XXXXXX
by
-----------------------------
Name:
Title:
CHILDS & ASSOCIATES INC.
by
-----------------------------
Name:
Title:
XXXXX XXXXXXXXXX CARS, INC.
by
-----------------------------
Name:
Title:
XXXX XXXX
by
-----------------------------
Name:
Title:
XXXXXX X. XXXX
by
-----------------------------
Name:
Title:
XXXX XXXXXXX
by
-----------------------------
Name:
Title:
XXXXXX XXXXXXX
by
-----------------------------
Name:
Title:
XXXXXX XXXXXXXX
by
-----------------------------
Name:
Title:
XXXXX XXXXX
by
-----------------------------
Name:
Title:
XXXXXX FAMILY PARTNERSHIP,
L.P.
by
-----------------------------
Name:
Title:
XXXXXX XXXXXX
by
-----------------------------
Name:
Title:
XXXXXX X. XXXXXX
by
-----------------------------
Name:
Title:
XXXXXX X. XXXXXXXX
by
-----------------------------
Name:
Title:
AND EACH OTHER MEMBER OF
THE COMPANY
by: XXXXXX AUTOMOTIVE
HOLDINGS L.L.C., as
attorney-in-fact for the
other Specified
Shareholders pursuant to
the Powers of Attorney
granted pursuant toSection
8.05 of the LLC Agreement.
by
-----------------------------
Name:
Title:
Schedule I
NAMES OF ACCEPTABLE DESIGNEES AS
--------------------------------
DEALER DIRECTORS
----------------
Xxxxx XxXxxxx
Xxxxx Xxxxxxxx
Xxxx Xxxxx
Xxxxxx Xxxxxx
Xxx Xxxxxx
Xxxxxx X. XxXxxxx
Xxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx (X.X.) Tomm
