EXHIBIT 4.1
STOCKHOLDERS' AGREEMENT
BY AND AMONG
FIRSTAMERICA AUTOMOTIVE, INC.
AND
ITS STOCKHOLDERS
Dated as of July 11, 1997
FIRSTAMERICA AUTOMOTIVE, INC.
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement dated as of July 11, 1997 (this
"Agreement") is entered into by and among FirstAmerica Automotive, Inc., a
---------
Delaware corporation (the "Company"), Thomas Price ("Price") and Donald Strough
------- -----
("Strough" and, together with Price, the "Principals"), Steven Hallock, Fred
------- ----------
Cziska, Al Babbington, John Driebe, Embarcadero Automotive, L.L.C., Raintree
Capital LLC and BB Investments (collectively, the "Restricted Holders") and each
of the other parties executing a counterpart signature page hereof. Capitalized
terms used herein shall have the meanings ascribed to them in Section 1.
RECITALS:
WHEREAS, the Company and TCW are parties to a Securities Purchase
Agreement dated as of the date hereof (the "Purchase Agreement"), pursuant to
------------------
which TCW is purchasing from the Company (i) 12% Senior Notes due June 30, 2005
(the "Notes"), (ii) shares of Preferred Stock, and (iii) shares of Common Stock;
WHEREAS, the Stockholders, after giving effect to the transactions
contemplated by the Purchase Agreement own the number of shares of Common Stock
set forth opposite their respective names on Appendix A; and
WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Purchase Agreement that the Company, TCW and the
Stockholders enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants, and conditions set forth in this
Agreement, the parties hereto, intending to be legally bound, hereby agree as
follows:
SECTION 1. CERTAIN DEFINITIONS.
-------------------
As used in this Agreement, the following terms shall have the
following respective meanings:
"Affiliate" of a person shall mean any person, controlling,
---------
controlled by, or under common control with such person.
"beneficial ownership" shall have the meaning specified under
---------------------
Section 13(d) of the Exchange Act on the date hereof; provided, however, that a
person shall beneficially own shares of Common Stock which such person has the
right to acquire without regard to the time period referred to in Rule 13d-3(d)
under the Exchange Act.
"Cause" shall have the meaning set forth in the executive employment
-----
agreements between the Principals and the Company, as of the date hereof.
"Certificate of Designation" means collectively, the Certificate of
--------------------------
Designation of Preferences of Cumulative Redeemable Preferred Stock of the
Company and the Certificate of Designation of Preference of Redeemable Preferred
Stock of the Company.
"Change of Control Transaction" means a transaction, approved or
-----------------------------
agreed to by the Majority Stockholders, in which all the business, stock or
assets of the Company are sold or otherwise transferred to a party that is not
an Affiliate of the Principals or part of a group (as defined in Section
13(d)(3) of the Exchange Act) including the Principals in a bona fide arm's-
length transaction in which the form and amount of consideration per share, if
any, payable to the holders of Common Stock is distributed pro rata based on
ownership of the Common Stock, and in which the other significant terms of the
transaction (including, but not limited to, indemnification or escrow
arrangements) apply, in all material respects, equally to the Principal
Stockholders and the Non-Principal Stockholders. The assumption by the
Principal Stockholders of greater potential liability in a Change of Control
Transaction than the Non-Principal Stockholders shall be deemed to constitute
equal treatment. A Change of Control Transaction may take the form of a sale of
all of the outstanding voting stock of the Company, a merger or consolidation in
which the holders of the outstanding voting stock of the Company before the
transaction do not own a majority of the outstanding voting stock of the
combined entity or a sale of all the assets of the Company (other than an
insignificant amount of immaterial assets).
"Charter Documents" means the Certificate of Incorporation and By-Laws
-----------------
of the Company, attached hereto as Exhibits A and B.
"Class B Common Stock" means the Class B Common Stock, par value
--------------------
$.00001 per share, of the Company.
"Class B Director" means the member of the Board of Directors of the
----------------
Company that the holders of the Class B Common Stock, voting separately as a
class, are entitled to designate.
"Common Stock" means all classes of common stock of the Company.
------------
"Company Debt" means all debt obligations of the Company and its
------------
subsidiaries (excluding debt incurred under Sections II.B, II.D and II.E of the
Loan Agreement, as in effect on the date hereof), and the aggregate liquidation
preference plus accrued and unpaid dividends on all capital stock of the Company
and its subsidiaries (other than Common Stock and capital stock held by the
Company or any of its wholly-owned subsidiaries).
"EBITDA" shall have the meaning ascribed thereto in the Purchase
------
Agreement less net interest and other costs associated with New Vehicle Advances
and Program Vehicle Advances, each as defined in the Purchase Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended, or any similar federal statute, and the rules and regulations of the
SEC thereunder, all as the same shall be in effect at the time.
"Holder" or "Holders" means any person listed on Appendix A hereto
------ -------
holding Securities or Registrable Securities and any person holding Securities
or Registrable Securities to whom the registration rights under this Agreement
have been transferred in accordance with Section 5.10.
"Loan Agreement" means that certain Loan and Security Agreement, dated
--------------
as of July __, 1997, by and among General Electric Capital Corporation and the
borrowers listed on the signature pages
2
thereto, as amended, modified or supplemented from time to time.
"Majority Stockholders" means the holders of more than 50% of the
---------------------
outstanding voting securities of the Company; provided, however, that for
purposes of this Agreement, a person will be deemed to be a holder of voting
securities of the Company if such person has the right to acquire, directly or
indirectly, such securities (upon exercise of warrants, options or otherwise, so
long as such warrants, options or other rights are then exercisable), regardless
of whether such acquisition has actually been effected.
"Non-Principal Stockholders" means any holder or holders of Common
--------------------------
Stock other than Principal Stockholders.
"Permitted Activities" means those activities set forth on Schedule
--------------------
10.2 hereto.
"Preferred Stock" means the Company's Cumulative Redeemable Preferred
---------------
Stock and Redeemable Preferred Stock.
"Principal Stockholders" means the Principals and their Affiliates and
----------------------
those persons to whom the Principals transfer Securities in a manner permitted
by this Agreement.
"Public Securities" shall have the meaning set forth in Section
-----------------
6.2(b).
"Qualified IPO" means a sale by the Company of shares of Common Stock
-------------
in an underwritten (firm commitment) public offering registered under the
Securities Act, with gross proceeds to the Company of not less than $50 million,
resulting in the listing of the Common Stock on a nationally recognized stock
exchange, including, without limitation, the Nasdaq National Market System.
"Restricted Holders" shall have the meaning ascribed thereto in the
------------------
recitals hereto.
"Registrable Securities" means shares of Common Stock (i) previously
----------------------
issued or issuable to the Stockholders, (ii) any Securities issued or issuable
with respect to such Common Stock referred to in clause (i) immediately above by
way of stock dividends or stock splits or in connection with a combination of
shares, recapitalization, merger, consolidation, other reorganization or
otherwise. Shares of Common Stock or other Securities issued with respect to
such Common Stock shall cease to be Registrable Securities (and shall be
excluded from the calculation of the number of outstanding Registrable
Securities) when they have been distributed to the public pursuant to an
offering registered under the Securities Act or sold to the public through a
broker, dealer or market maker in compliance with Rule 144 or Rule 145(d) under
the Securities Act or any successor rules. The foregoing notwithstanding, a
Security will not cease to be a Registrable Security until all stop transfer
instructions and notations and restrictive legends with respect to such Security
have been lifted or removed. For purposes of this Agreement, a person will be
deemed to be a Holder of Registrable Securities whenever such person has the
right to acquire, directly or indirectly, such securities, regardless of whether
such acquisition has actually been effected.
"Registration Expenses" means all expenses incurred by the Company in
---------------------
complying with Section 5, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel for the
Company, reasonable fees and disbursements of a single special counsel to be
selected by TCW, in its sole discretion, for the Holders and Other Holders (as
defined in Section 5.3(a)),
3
blue sky fees and expenses, and accounting and auditing expenses including the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company and excluding Selling Expenses).
"SEC" means the Securities and Exchange Commission or any other
---
federal agency at the time administering the Securities Act.
"Securities" means the shares of Preferred Stock and Common Stock
----------
owned as of any date of determination, directly or beneficially, by one or more
Stockholders (including all options or other securities convertible into, or
exchangeable or exercisable for, shares of Common Stock that are then owned,
directly or beneficially, by any Stockholder).
"Securities Purchase Agreement" means that certain Securities Purchase
-----------------------------
Agreement, dated as of July 8, 1997, by and among the Company and the parties
set forth on the signature page thereto.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time.
"Selling Expenses" means all underwriting discounts and selling
----------------
commissions applicable to the sale.
"Stockholders" means the persons named in Appendix A (including any
------------
person that is added to Appendix A after the date hereof) and any other person
who becomes a party hereto in accordance with the terms hereof.
"TCW" means collectively, TCW/Crescent Mezzanine Partners, L.P., a
---
Delaware limited partnership, TCW/Crescent Mezzanine Investment Partners, L.P.,
a Delaware limited partnership, TCW Mach I Partners, L.P., a Delaware limited
partnership and TCW Shared Opportunity Fund II, L.P., a Delaware limited
partnership, TCW Leveraged Income Trust, L.P., a Delaware limited partnership,
TCW/Crescent Mezanine Trust, a Delaware business trust (collectively, the
"Initial TCW Holders"), and such Persons to whom TCW Transfers Securities in a
manner permitted by this Agreement, provided, that the Principals and their
Affiliates shall not become "TCW" by acquiring Securities from TCW.
"TCW Stockholders" means each Stockholder that is included in the
----------------
definition of TCW.
"Transfer" means a sale, assignment, encumbrance, gift, pledge,
--------
hypothecation or other disposition of Securities or any interest therein.
SECTION 2. CONDUCT OF BUSINESS; CHARTER DOCUMENTS
--------------------------------------
2.1 Business Opportunities. Except as described in Schedule 2.1 hereto,
----------------------
none of the Principal Stockholders, their partners nor any Person controlled by
any of them (other than the Company or its subsidiaries) shall, directly or
indirectly, enter into, or agree or commit to enter into, any material
investment in or otherwise exploit any business opportunity primarily related to
the sale, service or financing of automobiles and other vehicles (other than an
investment in the shares of any public company representing less than 5% of such
company's fully diluted common equity) (a "Business Opportunity")
4
except with the approval of TCW.
2.2 Management Fees. Neither the Company nor any of its subsidiaries shall
---------------
pay to any of the Principal Stockholders or any of their Affiliates compensation
for providing services to the Company and its subsidiaries (or reimbursement of
expenses in connection therewith) other than pursuant to the employment
agreements set forth on Schedule 2.2 hereto, or any similar agreement or
arrangement approved by the Board of Directors and the TCW Nominee or the Class
B Director.
2.3 Charter Documents.
-----------------
(a) Exhibits A and B set forth copies of the Charter Documents, each
in the form in which it is to be in effect on the date hereof, except that
the Company's Certificate of Incorporation shall also include, in addition
to the terms of Exhibit A hereto, the Certificate of Designation, which
shall have been filed with the Secretary of State of Delaware as part of
the Company's Certificate of Incorporation on or prior to the Effective
Date.
(b) The Company covenants that it will act, and each Stockholder
agrees to use its best efforts to cause the Company to act, in accordance
with its Charter Documents and Certificate of Designation in all material
respects. Each Stockholder shall vote all the shares of Common Stock owned
or held of record by it at any regular or special meeting of stockholders
of the Company or in any written consent executed in lieu of such a meeting
of stockholders, and shall take all action necessary, to ensure (to the
extent within the parties' collective control) that (i) the Charter
Documents and Certificate of Designation of the Company do not, at any
time, conflict with the provisions of this Agreement, and (ii) unless an
amendment is approved by the Board and, if required under Section 3.7(h),
the Class B Director, the Charter Documents of the Company continue to be
in effect in the form attached hereto as Exhibits A and B and the
Certificate of Designation continues to be in effect in the form attached
as an exhibit to the Securities Purchase Agreement.
2.4 Issuance of Class B Common Stock. The Company covenants that it will
--------------------------------
not issue Class B Common Stock to any individual or entity that is not an
Initial TCW Holder.
SECTION 3. BOARD OF DIRECTORS.
------------------
3.1 Board Composition. Throughout the term of this Agreement, (a) the
-----------------
Board of Directors (the "Board") of the Company shall consist of five members
-----
(or such lesser number if not all nominees are nominated or such greater number
as may be required by Section 14 of the Certificate of Designation), and (b)
unless otherwise provided in Section 3.7 hereof all actions to be taken by the
Board will require the affirmative vote of a majority of the members of the
Board then in office.
3.2 Nomination Rights. The Principal Stockholders shall be entitled, but
-----------------
not required, to designate four members to the Board (collectively, the
"Principal Nominees"). TCW (or any representative thereof designated by TCW)
shall be entitled, but not required, to designate one member to the Board (the
"TCW Nominee"). The holders of the Class B Common Stock shall be entitled to
designate one member to the Board (such Class B Director together with the TCW
Nominee and the Principal Nominees, the "Nominees"). TCW agrees not to designate
a TCW Nominee if there is a Class B Director.
5
3.3 Election of Nominees. The Stockholders shall take appropriate actions
--------------------
to cause the appointment of the Nominees to become effective upon the date
hereof. The Stockholders shall vote all of the shares of Common Stock owned or
held of record by them at all regular and special meetings of the stockholders
of the Company called or held for the purpose of filling positions on the Board,
and in each written consent executed in lieu of such a meeting of stockholders,
and each party hereto shall take all actions otherwise necessary, to ensure (to
the extent within the parties' collective control) the election to the Board of
the Nominees.
3.4 Vacancies.
---------
(a) Each Nominee will hold his or her office as a director of the
Company for such term as is provided in the Charter Documents or until his
or her death, resignation or removal from the Board or until his or her
successor has been duly elected and qualified in accordance with the
provisions of this Agreement, the Charter Documents and applicable law. If
any Nominee ceases to serve as a director of the Company for any reason
during his or her term (a "Terminating Nominee"), a nominee for the vacancy
-------------------
resulting therefrom will be designated by the party that nominated the
Terminating Nominee.
(b) If any party fails at any time to nominate the maximum number of
persons for election to the Board that such party is entitled to nominate
pursuant to this Agreement, each directorship in respect of which such
party so failed to make a nomination will remain vacant unless such vacancy
results in there being fewer than the minimum number of directors required
by law, in which case such vacancy or vacancies will be filled by a person
or persons selected by a majority of the directors of the Company then in
office.
3.5 Removal of Nominees.
-------------------
(a) The Stockholders shall use their respective best efforts to call,
or cause the appropriate officers and directors of the Company to call, a
special meeting of stockholders of the Company and to vote all of the
shares of Common Stock owned or held of record by them for, or to take all
actions by written consent in lieu of any such meeting necessary to cause,
the removal (with or without cause) of (A) any TCW Nominee, if TCW requests
such director's removal in writing for any reason, and (B) any Principal
Nominee, if the Principals (acting together) request such director's
removal in writing for any reason. TCW and the Principals, shall have the
right to designate a new nominee in the event any TCW Nominee, or Principal
Nominee, respectively, shall be so removed under this Section 3.5(a) or
shall vacate his directorship for any other reason.
(b) The Company shall not, and shall not permit any of its
subsidiaries to, without the consent of holders of a majority of the shares
of Common Stock held by the Principal Stockholders or TCW, as the case may
be, take any action that under this Agreement requires the approval of one
or more Principal Nominees, Class B Director or TCW Nominee, as the case
may be, if any of the Principal Nominees, Class B Director or TCW Nominee,
as the case may be, approving such action are Persons whose removal from
the Board has been requested at or prior to the time of such action by the
party who nominated such director pursuant to this section. Each party
hereto shall use reasonable efforts to prevent any action from being taken
by the Board during the pendency of any vacancy due to death, resignation
or removal of a director, unless the Person entitled to have a person
nominated by it elected to fill such vacancy shall have failed, for a
period of 10 days after
6
notice of such vacancy, to nominate a replacement; provided that the
--------
provisions of this Section 3.5(b) shall not apply in circumstances in which
action must be taken by the Board to protect the best interests of the
Company
.
(c) Subject to the foregoing, no Stockholder shall vote or cause to
be voted any securities that such Stockholder has the power to vote (or in
respect of which such Stockholder has the power to direct the vote) for the
removal of any Nominee nominated by any party without the prior written
consent of such party.
3.6 Committees. The Board may designate one or more committees in
----------
accordance with the bylaws of the Company; provided that at least one of the
members of each committee designated by the Board shall be a TCW Nominee or if
no TCW Nominee, the Class B Director.
3.7 Action by the Board of Directors. Notwithstanding anything to the
--------------------------------
contrary in the bylaws of the Company, all decisions of the Board shall require
the affirmative vote of a majority of the directors of the Company then in
office, or a majority of the members of a committee of the Board, to the extent
such decisions may be lawfully delegated to such committee.
Prior to the consummation of a Qualified IPO, the Company shall not, and
the Company shall cause each of its subsidiaries not to, take (or agree to take)
any action regarding the following matters without the affirmative vote of a
majority of the directors then in office and, if there is a Class B Director,
the affirmative vote of the Class B Director:
(a) any merger or consolidation of the Company or its successors or
any subsidiary of the Company or its successors, other than (i) any merger
between the Company and any direct or indirect wholly owned subsidiary, or
between direct or indirect wholly owned subsidiaries, or (ii) any merger
subject to the bring - along rights set forth in Section 6 hereof;
(b) any Transfer of all or substantially all of the assets of the
Company and its subsidiaries, taken as a whole, or of any automotive
dealership of the Company or any of its subsidiaries (but excluding any
pledge, hypothecation or encumbrance of such assets to provide security for
any bona fide debt);
---- ----
(c) any entry into a line of business other than the sale or service
of automobiles and other vehicles (whether by stock or asset purchase or
otherwise) by the Company or a subsidiary other than as a consequence of a
Permitted Investment (as defined in the Purchase Agreement);
(d) any acquisition of assets other than in the ordinary course of
business (including the acquisition of any automotive dealership or all or
substantially all of its assets), pursuant to a single transaction or
series of related transactions, if the purchase price therefor (including
any debt assumed in connection therewith) exceeds $4,000,000;
(e) any adoption or material amendment of an employee or similar plan
under which capital stock, or rights, options or warrants to acquire
capital stock, of the Company or a subsidiary may be issued;
(f) any issuance or sale of capital stock or rights, options or
warrants to acquire capital
7
stock of the Company or any subsidiary (other than (1) issuances by the
Company pursuant to a Qualified IPO, (2) the issuance of capital stock of
the Company or rights, options or warrants to acquire capital stock of the
Company under employee stock option or stock purchase plans, (3) any such
issuance or sale by a subsidiary to the Company or a wholly owned
subsidiary of the Company, (4) the issuance of any shares of Common Stock
upon the exercise or conversion of any option, warrant or other convertible
security outstanding on the date hereof or issued hereafter in accordance
with the terms of this Agreement;
(g) declaration or payment of any dividend on, distributions with
respect to, or repur chase or redemption of capital stock other than (1)
pro rata dividends on the Common Stock paid from current earnings, (2)
--- ----
payments of dividends on or repurchases of shares of wholly owned
subsidiaries' capital stock or (3) repurchases of Common Stock held by bona
----
fide, full-time employees of the Company or its subsidiaries (other than
----
Tom Price or Donald Strough) in connection with the death, disability or
termination of such employees in accordance with the terms of any employee
stock option or stock purchase plan, provided that the aggregate amount of
--------
all such repurchases shall not exceed $250,000 per fiscal year;
(h) any amendment of the Charter Documents of the Company or any
subsidiary, except as necessary to accommodate a Qualified IPO
(i) any dissolution, liquidation or bankruptcy filing of the Company
or any subsidiary;
(j) any replacement of independent accountants;
(k) any transaction with an Affiliate;
(l) any increase or reduction in the number of authorized members of
the Board or any creation of or appointment of members to a committee of
the Board, or any direct or indirect payment to, or on behalf of, any
member of such board, as compensation for serving thereon or as a member of
any committee thereof (other than reimbursement of expenses in accordance
with Section 3.8 hereof).
3.8 Compensation. The directors shall be entitled to receive reasonable
------------
compensation for their services in accordance with the By-Laws of the Company
and shall be entitled to be reimbursed for reasonable out-of-pocket expenses
incurred in connection therewith; provided that any employee of the Company who
serves as a director, shall not be entitled to receive compensation for such
services but shall be entitled to reimbursement hereunder.
SECTION 4. Transferability.
---------------
4.1 Restrictions on Transferability.
-------------------------------
(a) No Securities may be Transferred except upon compliance with the
provisions of the Securities Act and this Agreement, and any attempted
Transfer other than in accordance with the terms hereof is void ab initio
and transfers no right, title or interest in or to such Securities to the
purported transferee, buyer, donee, assignee or encumbrance holder. A copy
of this Agreement shall be filed with the Secretary of the Company and kept
with the records of the Company.
8
(b) The Company and the Stockholders, as the case may be, shall cause
each Person (other than a transferee of securities sold pursuant to a
registration statement or pursuant to Rule 144 under the Securities Act)
that acquires Securities (as a condition to such acquisition) to execute
this Agreement and be bound by its terms.
(c) Restrictive Legend. Each certificate representing any portion of
the Securities that is held by a party hereto shall be stamped or otherwise
imprinted with a legend in the following form (in addition to any legend
required under applicable state securities laws):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES MAY
NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE
DISTRIBUTED EXCEPT IN CONJUNCTION WITH AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT, OR IN COMPLIANCE WITH RULE 144 OR
PURSUANT TO ANOTHER EXEMPTION. THE SECURITIES ARE ALSO
SUBJECT TO PROVISIONS OF A STOCKHOLDERS' AGREEMENT
DATED JULY 8, 1997, AS IT MAY BE AMENDED FROM TIME TO
TIME IN ACCORDANCE WITH THE PROVISIONS THEREOF (THE
"AGREEMENT"), WHICH CONTAINS RESTRICTIONS ON TRANSFER,
AND BRING-ALONG PROVISIONS. COPIES OF THE AGREEMENT MAY
BE OBTAINED FROM THE SECRETARY OF THE COMPANY."
4.2 Notice of Proposed Transfers Securities Law Compliance. Prior to any
------------------------------------------------------
proposed Transfer, unless there is in effect a registration statement under the
Securities Act covering the proposed Transfer, the Holder thereof shall give
written notice to the Company of such Holder's intention to effect such
Transfer. Each such notice shall describe the manner and circumstances of the
proposed Transfer in sufficient detail, and, if requested by the Company, shall
be accompanied by either (i) a written opinion of legal counsel (who may be
internal counsel) who shall be reasonably satisfactory in form and substance to
the Company's counsel, to the effect that the proposed Transfer may be effected
without registration under the Securities Act, (ii) a "no action" letter from
the staff of the SEC to the effect that the distribution of such securities
without registration will not result in recommendation by the staff of the SEC
that action be taken with respect thereto, or (iii) such other showing that may
be reasonably satisfactory to legal counsel to the Company, whereupon the holder
of such Securities shall be entitled to Transfer such Securities in accordance
with the terms of the notice delivered by the holder to the Company.
Notwithstanding the foregoing, the requirements of clauses (i), (ii), or (iii)
above need not be satisfied with respect to the following transactions: (A)
transactions in compliance with Rule 144 under the Securities Act so long as the
Company is furnished with satisfactory evidence of compliance with such Rule;
(B) Transfers by a Holder which is a partnership or limited liability company on
a pro rata basis in accordance with the terms of the partnership or limited
liability company operating agreement to a general partner, limited partner or
member of such partnership or limited liability company; (C) Transfers by a
Holder which is a corporation to any wholly-owned subsidiary or parent of such
corporation that wholly owns such corporation. In addition, Transfers made by a
Holder that is a state sponsored employee benefit plan to a successor trust or
fiduciary is permitted, and the requirements of clauses (i), (ii) and (iii) of
this Section need not be satisfied.
9
4.3 Permitted Transfers. Subject to compliance with the applicable
-------------------
provisions of the Securities Act and with Sections 4.1 and 4.2, if applicable,
the following Transfers may be made without compliance with the other
provisions of Section 4 or Section 8, subject to the transferee (other than in
the case of clause (A) of Section 4.2), agreeing in writing to be bound by the
terms of this Agreement to the same extent as if such transferee were a party
hereto and subject to any conditions set forth below: (i) Transfers described
in clauses (A), (B) and (C) and the last sentence of Section 4.2; (ii) Transfers
by an individual Stockholder by gift to his or her spouse or to the siblings,
lineal descendants, or parents of such individual or his or her spouse or to any
trust, partnership, limited liability company or other entity of which such
person or persons are the sole beneficiaries, provided, that with respect to all
such Transfers by a Principal, such Principal retains sole voting power of the
Transferred Securities; (iii) Transfers upon death of an individual Non-
Principal Stockholder to such Non-Principal Stockholder's heirs, executors,
administrators, testamentary trustees, legatees or beneficiaries; (iv) Transfers
by present or future management Stockholders to the Company upon termination of
employment or pursuant to agreements permitting the Company to make such
repurchases approved by the Board of Directors of the Company; (v) Transfers
contemplated by Section 6 and Section 8; (vi) redemptions or repurchases of the
Preferred Stock permitted or required by the Certificate of Incorporation of the
Company; or (vii) Transfers in a bona fide public offering pursuant to an
effective registration statement under the Securities Act.
4.4 Transfers by Principal Stockholders. (a) Notwithstanding anything to
-----------------------------------
the contrary in this Agreement, no Principal shall Transfer any Securities if as
a consequence thereof, (i) the Principal would have Transferred, together with
all prior Transfers by such Principal, beneficial ownership or voting power with
respect to more than 15% (if such Transfer occurs prior to a Qualified IPO) or
50% (if such Transfer occurs after a Qualified IPO) of the voting stock of the
Company set forth opposite such Principal's name on Appendix A, as of the date
hereof or (ii) such Transfer would cause a breach or violation of any provision
of any agreements between the Company or any of its subsidiaries and any
automobile manufacturer.
(b) In the event of the death of either Principal, the Company shall have
the option to purchase from such deceased Principal's successor-in-interest that
number of shares of Common Stock equal to 15% of the total number of shares of
Common Stock set forth opposite such Principal's name on Appendix A hereto. The
option provided for herein must be exercised, if at all, by written notice of
exercise given to the executor or other authorized representative of the estate
of such deceased Principal within 30 days of the date of appointment of such
executor or personal representative. Acquisition of the shares upon exercise of
the option is subject to applicable provisions of the Securities Act and
Sections 4.1 and 4.2 hereof. Further, exercise of the option hereunder shall be
subject to the condition that such exercise and purchase of shares shall not
result in a breach or violation of any provision of any agreement between the
Company or its subsidiaries and any automobile manufacturer. The price for each
share purchased upon exercise of the option shall be equal to the value of the
Company, as determined below, divided by the total number of fully diluted
shares (giving effect to the future exercise of all outstanding warrants,
options or any other rights to acquire shares of Common Stock or securities
convertible or exchangeable for Common Stock, regardless of whether such
exercise has occurred or the right to exercise has vested) of Common Stock. The
value of the Company shall be equal to the amount determined in accordance with
clause (i), unless clause (ii) is applicable: (i) the difference derived by
subtracting (y) the Company Debt, from (z) the product derived by multiplying
(a) the EBITDA of the Company for the 12-month period ended as of the last day
of the calendar quarter immediately preceding the death of the Principal (the
"Valuation Date"), by (b) seven, and (ii) if such death occurs after the closing
of a Qualified IPO, and the Common Stock is listed on a
10
nationally recognized stock exchange, including, without limitation, the Nasdaq
National Market System, then 100% of the average closing price on such exchange
for the twenty trading days immediately preceding the death of the Principal. In
the event of a New Acquisition by the Company (or a subsidiary of the Company)
within the 12-months immediately preceding the Valuation Date, the calculation
of EBITDA shall give pro forma effect to such New Acquisition provided that (i)
in the case of a merger or acquisition of stock, such pro forma calculation
shall include the aggregate amount of EBITDA of such acquired company for the
four full fiscal quarters of such acquired company for which financial
information is available immediately preceding the Valuation Date; or (ii) in
the case of a purchase of assets, such pro forma calculation shall include the
EBITDA attributable to the assets acquired in such transaction for the four full
fiscal quarters for which financial information is available immediately
preceding the Valuation Date. The entire purchase price for the shares shall be
paid in full, in cash upon the close of purchase of the shares. Upon the close,
the executor or personal representative of the deceased Principal shall deliver
stock certificates and stock powers for the shares purchased hereunder, duly
endorsed, together with any necessary or appropriate probate or other court
confirmation of the sale. The close shall occur within 90 days or as soon as
practicable thereafter following the date on which notice of exercise is deemed
given by the Company hereunder.
(c) Each Principal shall cause any shares held by the Principal to be
transferred to a voting trust (which trust shall not effect any Transfer of
beneficial ownership or other interest in such shares other than the right to
vote such shares) effective upon the first to occur of the death or incompetence
(as defined below) of such Principal. Any shares held in the name of such
voting trust shall be subject to all of the provisions of this Agreement,
including the provisions of Section 4.4(b) above. The trustee of any such
voting trust established by Price, shall be his nephew, William Price. The
trustee of any such voting trust established by Strough shall be Jeannine
McMechen. In the event that such trust is not in effect or the designated
trustee shall for any reason fail to qualify or cease to act as the trustee of
the voting trust, then each share held in the name of such voting trust shall be
exchanged with the Company for one share of Class C Common Stock. The term
"incompetence" shall refer to the first to occur of (i) judicially declared
incompetence or (ii) certification of incompetence by 3 medical doctors, each of
whom is independent of the Company and the Principal and is qualified and
experienced in rendering determinations of incompetence.
4.5 Transfers by Restricted Holders. Notwithstanding anything to the
-------------------------------
contrary in this Agreement, the Restricted Holders shall not Transfer any
Securities if such Transfer would cause a breach or violation of any provision
of any agreements between the Company or any of its subsidiaries and any
automobile manufacturer.
SECTION 5. Registration Rights.
-------------------
5.1 Requested Registration. If, at any time after the earlier to occur (i)
----------------------
July __, 1998 and (ii) the sale pursuant to a registration statement of any
securities of the Company, the Company receives from TCW a written request to
effect a registration under the Securities Act, the Company will:
(a) promptly give written notice of the proposed registration to all
other Holders; and
(b) as soon as practicable, use its reasonable best efforts to effect
such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws, and appropriate
11
compliance with applicable regulations issued under the Securities Act) as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request as
are specified in a written request given within fifteen (15) days after
receipt of such written notice from the Company; provided that (w) TCW is
entitled to three registrations pursuant to this Section 5.1, no more than
one of which may be effected in any given 12-month period; (x) if TCW
requests a shelf registration pursuant hereto and such Registration
Statement remains effective for less than one year, then if TCW sells less
than 75% of the securities registered in such shelf registration then TCW
shall be entitled to demand another registration in addition to those set
forth in clause (w) above; and (y) the Company shall not be obligated to
take any action to effect any such registration, qualification, or
compliance pursuant to this Section 5.1:
(i) In any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in
effecting such registration, qualification, or compliance unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act;
(ii) During the period of 90 days following the effective date
of the registration statement pertaining to a registered public
offering of equity securities of the Company for cash for its own
account (other than a registration relating solely to a transaction
pursuant to Rule 145 under the Securities Act or a registration
relating solely to employee benefit plans); or
(iii) unless TCW proposes to dispose of Registrable Securities
which it reasonably anticipates will have an aggregate disposition
price (before deduction of underwriting discounts and expenses of
sale) of at least $5,000,000.
Subject to the foregoing clauses (i) and (ii) and to Section 5.1(d),
the Company shall file a registration statement covering the Registrable
Securities so requested to be registered as soon as practicable after
receipt of the request of TCW, and in no event later than ninety (90) days
after receipt of such request.
(c) Underwriting. If TCW intends to distribute the Registrable
------------
Securities covered by their request by means of an underwriting, they shall
so advise the Company as a part of their request made pursuant to this
Section 5.1 and the Company shall include such information in the written
notice referred to in Section 5.1(a). The right of each Holder to
registration pursuant to Section 5.1 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent requested
(unless otherwise mutually agreed by a majority in interest of the Holders
of Common Stock, the holders of a majority of the Common Stock owned by TCW
and such Holder) to the extent provided herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting
agreement in customary form with the underwriter or underwriters selected
for such underwriting by TCW. Notwithstanding any other provision of this
Section 5.1, if the underwriter or underwriters determine that marketing
factors require the number of shares to be underwritten to be reduced and
so advise TCW, in writing, then
12
TCW, shall so advise all Holders who have indicated to the Company that
they intend to participate in such underwriting and the number of
Registrable Securities that may be included in the registration and
underwriting shall be allocated as follows:
(i) Registrable Securities held by any person other than TCW
shall first be excluded on a pro rata basis on the basis of the number
of Registrable Securities requested to be included by such Holders;
(ii) If further reductions are required, Registered Securities
held by TCW shall be excluded.
No Registrable Securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such
registration.
If any Holder disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the Company,
the underwriter and TCW. The Registrable Securities and/or other
securities so withdrawn from such underwriting shall also be withdrawn from
such registration; provided, however, that, if by the withdrawal of such
Registrable Securities a greater-number of Registrable Securities held by
other Holders may be included in such registration (up to the maximum of
any limitation imposed by the underwriters), then the Company shall offer
to all Holders who have included Registrable Securities in the registration
the right to include additional Registrable Securities in the same
proportion used above in determining the underwriter limitation.
If the underwriter or underwriters have not limited the number of
Registrable Securities to be underwritten, the Company may include
securities for its own account or the account of others in such
registration if the underwriter or underwriters so agree and if the number
of Registrable Securities that would otherwise have been included in such
registration and underwriting will not thereby be limited.
(d) Delayed Filing. If the Company shall furnish to TCW a certificate
--------------
signed by the President of the Company stating that, in the good faith
discretion of the Board of Directors of the Company, it would not be in the
best interest of the Company for such registration statement to be filed on
or before the date filing would be required, then the Company may defer the
filing of the registration statement for a period or periods not in excess
of an aggregate of ninety (90) days, such right to delay a filing to be
exercised by the Company not more than once in any calendar year.
(e) Shelf Registration.
------------------
(i) If any registration pursuant to this Section 5.1 is
requested by TCW to be a shelf registration pursuant to Rule 415 under
the Securities Act (a "Shelf Registration"), the Company shall, within
------------------
ninety (90) days use all reasonable efforts to file pursuant to Rule
415 under the Securities Act, a shelf registration statement (a "Shelf
-----
Registration Statement") relating to the securities requested to be so
----------------------
registered. The Company shall keep such Shelf Registration Statement
continuously effective for a period of one hundred eighty (180) days
following the date on which the SEC declares such Shelf Registration
Statement effective under the Securities Act, or such shorter period
ending when all the
13
Registrable Securities covered by such Shelf Registration Statement
have been sold.
(ii) Upon the occurrence of any event that would cause the Shelf
Registration Statement (A) to contain an untrue or alleged untrue
statement of material fact, or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the
statement therein not misleading, or (B) not to be effective and
usable for resale of the Registrable Securities covered by such Shelf
Registration Statement during the period that such Shelf Registration
Statement is required to be effective and usable, the Company shall
promptly file an amendment to the Shelf Registration Statement, in the
case of clause (A), to correct any such misstatement or omission and,
in the case of either clause. (A) or (B), use all reasonable efforts
to cause such amendment to be declared effective and such Shelf
Registration Statement to become usable as soon as practicable
thereafter.
(f) Effective Registration Statement. A registration requested
--------------------------------
pursuant to this Section 5.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective;
provided, however, that if such registration statement does not become
effective after the Company has filed it solely by reason of the refusal to
proceed by TCW (other than a refusal to proceed based upon the advice of
counsel relating to a matter with respect to the Company or the
Registration Statement), then such registration shall be deemed to have
been effected unless TCW shall have elected to pay all Registration
Expenses referred to in Section 5.4 in connection with such registration,
(ii) if, after the registration statement that relates to such registration
has become effective, such registration statement becomes subject to any
stop order, injunction or any order or requirement of the SEC or other
governmental agency or court for any reason and such order, injunction or
requirement is not promptly withdrawn or lifted, or (iii) the conditions to
closing specified in the purchase agreement or underwriting agreement
entered into in connection with such registration are not satisfied, other
than by reason of some act or omission by such Holders.
5.2 Form S-3.
--------
(a) After the Company has qualified for the use of Form S-3, TCW
shall have the right to registrations on Form S-3 (but not more than one
registration in any twelve (12) month period shall be requested by TCW
including registrations requested pursuant to Section 5.1 hereunder) under
this section 5.2 (requests shall be in writing and shall state the number
of Registrable Securities to be disposed of and the intended method of
disposition of such shares by such Holder or Holders); provided, however,
that the Company shall not be required to effect a registration pursuant to
this Section 5.2 unless (i) TCW proposes to dispose of Registrable
Securities which it reasonably anticipates will have an aggregate
disposition price (before deduction of underwriting discounts and expenses
of sale) of at least $5,000,000 and (ii) TCW is not entitled to sell all of
its shares within a three-month period under Rule 144.
(b) The Company shall give notice to all Holders of Registrable
Securities and all other Holders of the receipt of a request for
registration pursuant to this section 5.2 and shall provide a reasonable
opportunity for all Holders and all other Holders to participate in the
registration. Subject to the foregoing, the Company will use all reasonable
efforts to effect promptly the registration of all Registrable Securities
on Form S-3, as the case may be, to the extent
14
requested by the Holder or Holders thereof for purposes of disposition.
5.3 Company Registration.
--------------------
(a) Notice of Registration. If at any time or from time to time, the
----------------------
Company shall determine to register any of its Common Stock (including in a
Qualified IPO), for its own account or for the account of others, other
than a registration pursuant to Section 5.1, a registration relating solely
to employee benefit plans or a registration relating solely to a
transaction pursuant to Rule 145 under the Securities Act or registration
on any registration form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(i) promptly give to (A) each Holder and (B) those other
shareholders of the Company who have "piggyback" registration rights
("Other Holders") written notice thereof; and
-------------
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities
specified in a written request or requests by any Holder or Holders,
and all shares of Common Stock specified in a written request or
requests by the Other Holders; provided such written requests are
received by the Company within twenty (20) days following receipt by
such Holders and the Other Holders of such notice from the Company.
(b) Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving a firm commitment
underwriting, the Company shall so advise the Holders and the Other Holders
as a part of the written notice given pursuant to Section 5.3(a)(i). In
such event, the right of any Holder and the Other Holders to registration
pursuant to this section 5.3 shall be conditioned upon such Holder's and
the Other Holders' participation in such underwriting and the inclusion of
such Holder's Registrable Securities and such Other Holders' Common Stock
in the underwriting to the extent provided herein. All Holders and Other
Holders proposing to distribute their securities through such underwriting
shall (together with the Company and the other holders distributing their
securities through such underwriting) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
Section 5.3, if the Company and the underwriter or underwriters determine
that marketing factors require limitation of the number of shares to be
underwritten, the underwriter may exclude from such underwriting all or
some of the shares proposed for registration on the following basis:
(i) shares held by any person who does not have contractual
rights to cause the Company to register such shares shall first be
excluded;
(ii) if further reductions are required, any shares held by the
Other Holders will next be excluded, such reductions to be allocated
as nearly as practicable among each such Other Holder in the
proportion that the number of shares of Common Stock (on a fully
converted basis) held by such Other Holder bears to the total number
of shares of Common Stock (on a fully converted basis) held by all
Other Holders seeking to register their shares; and
15
(iii) if further reductions are required, Registrable Securities
and any shares held by the Holders (including TCW) will next be
excluded, such reductions to be allocated among the Holders such that
(A) one half of the shares that the underwriter believes can be
underwritten would be allocated solely to TCW and (B) the remaining
half would be allocated among TCW and the remaining Holders on a pro-
rata basis, based on the number of shares TCW and such Holders are
seeking to register (with TCW's share number adjusted to reflect the
shares that are allocated to it under clause (A)); provided, that if
any Registrable Securities held by TCW are excluded from registration
pursuant to this clause (iii), such Registrable Securities shall be
included in any overallotment option granted in connection with such
registration to the maximum extent possible.
Except as provided in the last sentence of this paragraph, no shares
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. If any Holder or other
Holder disapproves of the terms of any such underwriting, such person may
elect to withdraw therefrom by written notice to the Company and the
underwriter. The Registrable Securities and/or other securities so
withdrawn from such underwriting shall also be withdrawn from such
registration; provided, however, that, if by the withdrawal of such shares
a greater number of shares may be included in such registration (up to the
maximum of any limitation imposed by the underwriters), then the Company
shall offer to all Holders and Other Holders who have included shares in
the registration the right to include additional shares in the same
proportion used above in determining the underwriter limitation.
5.4 Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with one registration per year pursuant to Section 5.1 requested by
TCW and all Registration Expenses incurred in connection with a registration
pursuant to Section 5.2 or Section 5.3, including the reasonable fees and
expenses of one counsel for and selected by TCW shall be borne by the Company;
and all Selling Expenses shall be borne by the Holders of the Registrable
Securities so registered pro-rata on the basis of the number of shares so
registered.
5.5 Registration Procedures. Whenever the Company is required to register
-----------------------
Registrable Securities pursuant to Sections 5.1, 5.2 or 5.3, the Company will
use all reasonable efforts to effect the registration to permit the sale of such
Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible:
(a) prepare and file with the SEC as soon as practicable a
registration statement with respect to such Registrable Securities as
prescribed by Section 5 on a form available for the sale of the Registrable
Securities by the Holders thereof in accordance with the intended method or
methods of distribution thereof and use all reasonable efforts to cause
each such registration statement to become and remain effective; provided,
however; that before filing a registration statement, the Company will
furnish the Holders of Registrable Securities covered by such registration
statement, the underwriters, if any, and any attorney, accountant or other
agent required by any such Holders of Registrable Securities or
underwriters (a) copies of all such documents proposed to be filed, which
documents will be subject to the review and comment of such Holders, their
counsel and underwriters, if any, and (ii) if requested, financial and
other information required by the SEC to be included in such registration
statement and all financial and other records, pertinent corporate
documents and properties of the Company customarily reviewed in connection
16
with an underwritten registration; and shall cause the officers, directors
and employees of the Company, counsel to the Company and independent
certified public accountants to the Company, to respond to such inquiries
and supply all information, as shall be necessary, in the opinion of
respective counsel to such Holders and underwriters, to conduct a
reasonable investigation within the meaning of the Securities Act, and will
not file any registration statement to which the holders of a majority of
the shares owned by TCW, the Holders of at least a majority of the
Registrable Securities covered by such registration statement or the
underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments, post-effective
amendments and prospectus supplements to such registration statement as may
be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement until the earlier
of (i) the period provided in Section 5.1 or (ii) such time as all such
securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement; provided, that the Company shall be deemed not to have used all
reasonable efforts to keep a registration statement effective during the
applicable period if it voluntarily takes any action that results in the
selling Holders of the Registrable Securities covered thereby not being
able to sell such Registrable Securities during that period;
(c) furnish to each Holder of Registrable Securities covered by a
registration statement and to each underwriter; if any, such number of
copies of such registration statement, each amendment and post-effective
amendment thereto, the prospectus included in such registration statement
(including each preliminary prospectus and any supplement to such
prospectus and any other prospectus filed under Rule 424 of the Securities
Act), in each case including all exhibits, and such other documents as such
seller or underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller or to be
disposed of by such underwriter (the Company hereby consenting to the use,
in accordance with all applicable laws, of each such registration statement
(or amendment or post-effective amendment thereto) and each such prospectus
(or preliminary prospectus or supplement thereto) by each such seller and
the underwriters, if any, in connection with the offering and sale of the
Registrable securities covered by such registration statement or
prospectus);
(d) use all reasonable efforts to register or qualify and, if
applicable, to cooperate with the selling Holders of Registrable
Securities, the underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of, the securities to be included in a
registration statement for offer and sale under the securities or blue sky
laws of such jurisdictions as any selling Holder or managing underwriters
(if any) shall reasonably request, to keep each such registration or
qualification (or exemption therefrom) effective during the period such
registration statement is required to be kept effective and to do any and
all other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the securities covered by the applicable
registration statement, provided, that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph or (ii) consent to
general service of process in any such jurisdiction;
(e) cause all such Registrable Securities to be listed on each
securities exchange on
17
which securities of the same class as the Registrable Securities are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use all
reasonable efforts to secure designation of all such Registrable Securities
covered by such registration statement as a NASDAQ "national market system
security" within the meaning of Rule llAa2-1 under the Exchange Act or,
failing that, to secure NASDAQ authorization for such Registrable
Securities and, without limiting the generality of the foregoing, to its
reasonable efforts to arrange for at least two market makers to register as
such with respect to such Registrable Securities with the NASD;
(f) provide a transfer agent and registrar for all such Registrable
Securities and a CUSIP number for all such Securities not later than the
effective date of such registration statement;
(g) comply with all applicable rules and regulations of the SEC and
make available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45
days after the end of any 12-month period (or ninety (90) days after the
end of any 12-month period if such period is a fiscal year) (or in each
case within such extended period of time as may be permitted by the SEC for
filing the applicable report with the SEC) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in
a firm commitment or best efforts under written offering or (ii) if not
sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company after the effective date of a
registration statement, which earnings statement shall cover said 12-month
period;
(h) permit any Holder which, in its sole and exclusive judgment,
might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration or
comparable statement and to require the insertion therein of material,
furnished to the Company in writing, which in the reasonable judgment of
such Holder and its counsel should be included;
(i) use all reasonable efforts to prevent the issuance of any order
suspending the effectiveness of a registration statement or suspending the
qualification (or exemption from qualification) of any of the securities
included therein for sale in any jurisdiction, and, in the event of the
issuance of any stop order suspending the effectiveness of a registration
statement, or of any order suspending the qualification of any securities
included in such registration statement for sale in any jurisdiction, the
Company will use all reasonable efforts promptly to obtain the withdrawal
of such order at the earliest possible moment;
(j) obtain "cold comfort" letters and updates thereof (which letters
and updates (in form, scope and substance) shall be reasonably satisfactory
to the managing underwriters, if any, and counsel to the selling Holders of
Registrable Securities) from the independent certified public accountants
of the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data are, or are
required to be, included in the registration statement), addressed to each
of the underwriters, if any, and each selling Holder of Registrable
Securities, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as the
18
underwriters, if any, or the Holders of a majority of the Registrable
Securities being sold may reasonably request;
(k) obtain opinions of independent counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters, if any, and not
objected to by the Holders of a majority of the Registrable Securities
being sold), addressed to each selling Holder and each of the underwriters,
if any, covering the matters customarily covered in opinions of issuer's
counsel requested in underwritten offerings, such as the effectiveness of
the registration statement and such other matters as may be requested by
the underwriters, if any;
(l) promptly (but in any event, within two business days) notify the
selling Holders of Registrable Securities, their counsel and the managing
underwriters, if any, and confirm such notice in writing:
(i) when a prospectus or any supplement or post-effective
amendment to such prospectus has been filed, and, with respect to a
registration statement or any post-effective amendment thereto, when
the same has become effective;
(ii) of any request by the SEC or any other Federal or state
governmental authority for amendments or supplements to a registration
statement or related prospectus or for additional information;
(iii) of the issuance by the SEC of any stop order suspending
the effectiveness of a registration statement or of any order
preventing or suspending the use of any prospectus or the initiation
of any proceedings by any Person for that purpose;
(iv) if at any time the representations and warranties of the
Company contemplated by clause (i) of paragraph (q) below cease to be
true and correct in any material respect,
(v) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of a registration statement or any of the Registrable
Securities for offer or sale under the securities or blue sky laws of
any jurisdiction, or the contemplation, initiation or threatening, of
any proceeding for such purpose;
(vi) of the happening of any event that makes any statement
made in such registration statement untrue in any material respect or
that requires the making of any changes in such registration statement
so that it 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 (in the case of any
prospectus), not misleading; and
(vii) of the Company's reasonable determination that a post-
effective amendment to a registration statement would be appropriate.
19
(m) if requested by the managing underwriters, if any, or a Holder of
Registrable Securities being sold, promptly incorporate in a prospectus,
supplement or post-effective amendment and information as the managing
underwriters, if any and the Holders of a majority of the Registrable
Securities being sold reasonably request to be included therein relating to
the sale of the Registrable Securities, including, without limitation,
information with respect to the number of shares of Registrable Securities
being sold to underwriters, the purchase price being paid thereof or by
such underwriters and with respect to any other terms of the underwritten
offering of the Registrable Securities to be sold in such offering, and
make all required filings of such prospectus, supplement or post-effective
amendment promptly following notification of the matters to be incorporated
in such supplement or post-effective amendment;
(n) furnish to each selling Holder of Registrable Securities and the
managing underwriter, without charge, at least one signed copy of the
registration statement;
(o) cooperate with the selling Holders of Registrable Securities and
the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing the Registrable Securities to be sold
not bearing any restrictive legends and in a form eligible for deposit with
The Depository Trust Company and cause such Registrable Securities to be in
such denominations and registered in such names as the managing
underwriters, if any, or holder of Registrable Securities may request at
least three business days prior to any sale of Registrable Securities to
the underwriters;
(p) as promptly as practicable upon the occurrence of any event
contemplated by clause (l) (vi) above, prepare a supplement or post-
effective amendment to the registration statement, or file any other
required documents so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold hereunder, the prospectus will not
contain an untrue statement of a material fact or an omission to state a
material fact to be required to be stated in a registration statement or
prospectus or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(q) enter into such agreements (including underwriting agreements in
customary form, scope and substance) and take all such other actions in
connection therewith as the Holders of a majority of the Registrable
Securities being sold or the underwriters, if any, reasonably request in
order to expedite or facilitate the registration or the disposition of such
Registrable Securities, and in such connection, whether or not an
underwriting agreement is entered into and whether or not the registration
is an underwritten registration:
(i) make such representations and warranties to the Holders of
such Registrable Securities and the underwriters, if any, with respect
to the business of the Company and the registration statement, in
form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same, if and
when requested;
(ii) if an underwriting agreement is entered into, cause the
same to include the indemnification and contribution provisions and
procedures substantially similar to (and use all reasonable efforts to
assure that such provisions are no less favorable to the selling
Holders of Registrable Securities than) those contained in Section 5.6
with respect to all
20
parties to be indemnified pursuant to said Section (or, with respect
to the indemnification of such underwriters, such similar
indemnification and contribution provisions as such underwriters shall
customarily require); and
(iii) deliver such documents and certificates as may be
requested by the Holders of a majority of the Registrable Securities
being sold and managing underwriters, if any, to evidence compliance
with clause (i) above and with any conditions contained in the
underwriting agreement or other similar agreement entered into by the
Company;
The above shall be done at each closing under such underwriting or
similar agreement or as and to the extent otherwise reasonably requested by
the Holders of a majority of the Registrable Securities being sold.
(r) cooperate with each seller of Registrable Securities covered by
any registration statement and each underwriter, if any, participating in
the disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the NASD;
(s) use all reasonable efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by the
registration statement contemplated hereby.
Each Holder agrees by the acquisition of such Registrable Securities
that, upon receipt of written notice from the Company of the happening of
any event of the kind described in Section 5.5(l) (ii), 5.5(l) (iii),
5.5(l)(v), 5.5(l) (vi), or 5.5(l) (vii), such Holder will forthwith
discontinue disposition of such Registrable Securities covered by such
registration statement until such Holder's receipt of the copies of the
supplemented or amended registration statement contemplated by Section
5.5(p), or until it is advised in writing (the "Advice") by the Company
------
that the use of the applicable prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated or
deemed to be incorporated by reference in such prospectus, and, if so
directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in
such Holder's possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice. If the Company
shall give any such notice, the time periods mentioned in Section 5.1 shall
be extended by the number of days during such periods from and including
the date of the giving of such notice to and including the date when each
seller of Registrable Securities covered by such registration statement
receives (x) the copies of the supplemented or amended prospectus
contemplated by Section 5.5(p) or (y) the Advice, as the case may be.
5.6 Indemnification and Contribution.
--------------------------------
(a) Company Indemnification. The Company will indemnify, to the
-----------------------
fullest extent permitted by law, each Holder (which term, for purposes of
this Section 5.6, shall be deemed to include Other Holders who include
shares in a registration), its Affiliates, each of its and its Affiliates'
officers, directors, employees, counsel, agents, representatives and
partners, and each person controlling within the meaning of Section 15 of
the Securities Act or Section 20 the Exchange Act, such Holder or its
Affiliates, participating in any registration, qualification, or compliance
effected pursuant to this Section 5.6 with respect to Registrable
Securities held by such
21
Holder, each person controlling the Company who is not participating in
such registration, qualification or compliance and each underwriter, if
any, and each person who controls any underwriter, against all claims,
losses, damages, costs (including, without limitation, costs of
investigation and reasonable attorneys' fees and disbursements, expenses
and liabilities (or actions in respect thereof collectively "Losses"),
------
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, to which they may become subject under the
Securities Act, the Exchange Act, or other federal or state law, arising
out of or based on (i) any untrue statement (or alleged untrue statement)
of a material fact contained in any prospectus, offering circular or other
similar document (including any related registration statement,
notification, or the like) incident to any such registration, qualification
or compliance, or based on 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 light of the circumstances under
which they were made, or (ii) any violation by the Company of any federal,
state, or common law rule or regulation applicable to the Company in
connection with any such registration, qualification, or compliance, and
will reimburse each such Holder, each of its Affiliates and its Affiliates'
officers, directors, employees, counsel, agents, representatives and
partners, and each person controlling such Holder or its Affiliates, each
such person controlling the Company who is not participating in such
registration, qualification or compliance, each such underwriter, and each
person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating or defending
any Losses, as incurred, provided that the Company will not be liable to
such Holder in any such case to the extent that any such Losses arise out
of or are based on any untrue statement or omission, made in reliance on
and in conformity with written information furnished to the Company
expressly for use in the registration statement by such Holder.
(b) Holder Indemnification. Each Holder will, if Registrable
----------------------
Securities held by such Holder are included in the securities as to which
such registration, qualification, or compliance is being effected,
indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such
underwriter within the meaning of the Securities Act, each other Holder and
each Other Holder, and each of its officers, directors, and partners and
each person controlling such other Holder or Other Holder, against all
claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue
statement) by such Holder of a material fact contained in any such
registration statement, prospectus, offering circular, or other similar
document, or any omission (or alleged omission) by such Holder to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
under which they were made, and will reimburse the Company, such other
Holders, such directors, officers, persons, underwriters, or control
persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action, as incurred, in each case to the extent, but only to
the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to the Company expressly for
use in the registration statement by such Holder; provided, however, that
the obligations of each such Holder hereunder shall be limited to an amount
equal to the aggregate proceeds (net of payment of all expenses) received
by such Holder in such offering.
(c) Notice of Actions. Each party entitled to indemnification under
-----------------
this Section 5.6
22
(the "Indemnified Party") shall give notice to the party required to
-----------------
provide indemnification (the "Indemnifying Party") promptly after such
------------------
Indemnified Party has received written notice of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense (including the payment of all fees and expenses incurred in
connection thereof) of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld). Each
Indemnified Party shall have the right to employ separate counsel in such
defense but the fees and expenses of such counsel shall be at the expense
of each such Indemnified party unless the representation of both parties by
the same counsel would be inappropriate due to actual or potential
conflicts of interest or if the Indemnifying Party fails to promptly assume
the defense. No Indemnified Party shall be liable for any settlement
effected without its written consent. Each Indemnifying party agrees,
jointly and severally, that it will not, without the indemnified Party's
prior written consent, consent to entry of any judgment or settle or
compromise any pending or threatened claim, action or proceeding in respect
of which indemnification or contribution may be sought hereunder unless the
foregoing contains an unconditional release, in form and substance
reasonably satisfactory to the Indemnified Party, of the Indemnified party
from all liability and obligation arising therefrom.
The Indemnifying Party's liability to any Indemnified Party hereunder
shall not be extinguished solely because any other Indemnified Party is not
entitled to indemnity hereunder.
The Indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf
of the Indemnified Party or any officer, director or controlling person of
such Indemnified Party, and will survive the Transfer of Registrable
Securities. The failure of any Indemnified Party or Parties to give notice
as provided herein shall relieve the Indemnifying Party of its obligations
under this Section 5.6 only to the extent that such failure to give notice
shall materially adversely prejudice the Indemnifying Party in the defense
of any such claim or any such litigation. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(d) Contribution. If the indemnification provided for in this
------------
Section 5.6 is unavailable or insufficient to hold harmless an Indemnified
Party under Section 5.5(a) or (b) above, then each Indemnifying Party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in Section
5.6(a) or (b) above (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Indemnified Party on the other from the offering of the Shares and the
relative fault of the Company on the one hand and the Indemnified Party on
the other in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. Relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Indemnified Party and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Company and the Holders agree that it would not be just and equitable if
contributions pursuant to this Section 5.6(d) were to be
23
determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to
in the first sentence of this Section 5.6(d). The amount paid or payable by
an Indemnified Party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this Section 5.6(d) shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified Party in connection with investigating or defending
against any action or claim which is the subject of this Section 5.6(d).
Notwithstanding the provisions of this Section 5.6(d), no Holder shall be
required to contribute any amount in excess of the proceeds (net of payment
of all expenses) received by such Holder in the registration. 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. The Holders'
obligations in this section 5.6(d) to contribute are several in proportion
to the number of shares sold by each Holder participating in a registration
and not joint. Each party entitled to contribution agrees that upon the
service of a summons or other initial legal process upon it in any action
instituted against it in respect of which contribution may be sought, it
shall promptly give written notice of such service to the party or parties
from whom contribution may be sought, but the omission so to notify such
party or parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise (except as specifically provided in Section 5.6(c)). The
indemnity and contribution agreements contained in this Section 5.6 are in
addition to any indemnity that the Indemnifying Parties may have to the
Indemnified Parties.
5.7 Information by Holder. Each Holder of Registrable Securities included
---------------------
in any registration shall furnish to the Company such information regarding such
Holder and the distribution proposed by such Holder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification, or compliance referred to in this Section 5.
5.8 Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the SEC that may at any time permit the sale of
shares of Common Stock to the public without registration, after such time as a
public market exists for the Common Stock of the Company, the Company agrees to:
(a) use its best efforts to facilitate the sale of shares of Common
Stock to the public, without registration under the Securities Act,
pursuant to Rule 144 under the Securities Act, provided that this shall not
require the Company to file reports under the Securities Act or the
Exchange Act at any time prior to the Company's being otherwise required to
file such reports;
(b) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act at all times
after ninety (90) days after the effective date of the first registration
under the Securities Act filed by the Company for an offering of its
securities to the general public;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act (at any time after it has become subject to such reporting
requirements);
(d) during any period in which the Company is not subject to Section
13 or 15(d) of the Exchange Act, make available the information required to
be provided by Rule 144A(d)(4);
24
(e) so long as a Holder owns any shares of Common Stock which
constitute restricted securities under Rule 144 to furnish to the Holder
forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time
after ninety (90) days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the
general public), and of the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing a
Holder to sell any such securities without registration.
5.9 Market Stand-off Agreement. Each Holder and the Company agree
--------------------------
not to sell or otherwise transfer or dispose of any Common Stock or other
securities of the Company (other than in a private transaction) held by it
during a period of 180 days (or such shorter period as the Company and the
underwriters may agree upon in connection with a Qualified IPO) following the
effective date of a registration statement of the Company filed under the
Securities Act in connection with a Qualified IPO. The Company may impose stop-
transfer instructions with respect to the shares (or securities) subject to the
foregoing restriction until the end of such period.
5.10 Transfer of Registration Rights. Subject to compliance with
-------------------------------
Sections 2 and 4, the rights granted under this Section 5 may be assigned or
otherwise conveyed in whole or in part by any Holder of Registrable Securities
to any transferee; provided that in each case the Company is given written
notice of the transfer, stating the name and address of said transferee and said
transferee's agreement to be bound by the provisions of this Agreement.
5.11 Certain Limitations in Connection with Future Grants of
-------------------------------------------------------
Registration Rights. From and after the date of this Agreement, the Company
- -------------------
shall not enter into any agreement with any holder or prospective holder of any
securities of the Company providing for the granting to such holder of
registration rights unless such agreement:
(a) includes the equivalent of Section 5.9 as a term; and
(b) contains provisions substantially similar to and not in conflict
with those contained in Section 5.3(b) with respect to the allocation of
Registrable Securities to be included in an underwritten public offering if
marketing factors require a limitation on the number of such securities to
be included.
Notwithstanding the foregoing, from and after the date of this
Agreement, without the prior written consent of the Holders of a majority
of the Registrable Securities, and the holders of a majority of the
Registrable Securities owned by TCW, the Company shall not enter into any
agreement with any person or persons providing for the granting to such
holder of registration rights superior to those granted to Holders pursuant
to Section 5.1, 5.2 or 5.3.
5.12 Covenants of Holders.
--------------------
(a) In the event any shares of Common Stock are offered or sold by
any Holder in a registration, each such Holder will: (i) advise the Company
in writing of any offer, sale or other
25
disposition by it of any Common Stock in any manner other than as set forth
in the registration statement or any prospectus included therein on or
before the respective dates thereof; (ii) not effect any stabilization
activity in connection with the Company's Common Stock other than in
transactions permitted pursuant to Regulation M under the Exchange Act;
(iii) not bid for or purchase, for any account in which it has a beneficial
interest, any Common Stock other than in transactions permitted pursuant to
Regulation M under the Exchange Act (if applicable); and (iv) not, until it
has sold all of such shares of Common Stock, attempt to induce any person
to purchase any Common Stock other than in transactions permitted pursuant
to Regulation M under the Exchange Act.
(b) Each Holder shall, if requested by the Company or the managing
underwriter(s) in connection with any proposed registration and
distribution pursuant to this Agreement, (i) agree to sell the Registrable
securities on the basis provided in any underwriting arrangements
satisfactory to such Holder entered into in connection therewith and (ii)
complete and execute all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents customary in similar offerings
(and the Company shall use all reasonable efforts to assure that such
agreements and documents contain provisions that are in no event less
favorable to such Holder than the indemnities provided herein).
SECTION 6. Bring-Along Rights.
------------------
6.1 In the event of a Change of Control Transaction approved by the
Board of Directors of the Company and the Principal Stockholders, then
(following transmittal of a notice to be provided by the Principal Stockholders
or the Company to the Non-Principal Stockholders no less than 20 days before the
consummation of the Change of Control Transaction), subject to the provisions of
this Section 6, all Stockholders shall cooperate in, and shall take all actions
which the Principal Stockholders and the Company deem reasonably necessary or
desirable to consummate the Change of Control Transaction, including, without
limitation, (x) entering into agreements with third parties on terms
substantially identical to or more favorable to the Non-Principal Stockholders
than those applicable to the Principal Stockholders (which agreements may,
subject to the provisions of this Section 6, require a Non-Principal Stockholder
to sell all of his, her or its Common Stock and may require, subject to the
provisions of this Section 6, representations, indemnities, holdbacks and
escrows), and (y) obtaining all governmental consents and approvals reasonably
necessary or desirable to consummate such Change of Control Transaction (to the
extent such consents and approvals may be obtained without any significant
effort or expense by the Non-Principal Stockholder)
6.2 The obligations of the Stockholders pursuant to this Section 6
are subject to the satisfaction of the following conditions, unless such
conditions are waived in writing by a particular Stockholder only with respect
to such Stockholder:
(a) Subject to Section 6.2(b) below, upon the consummation of the
Change of Control Transaction, all of the holders of any class of Preferred
Stock or Common Stock will receive the same form and amount of
consideration per share of such class of Preferred Stock or Common Stock,
respectively, or if any holders of Preferred Stock or Common Stock are
given an option as to the form and amount of consideration to be received,
all holders will be given the same option. Holders of Preferred Stock
shall receive consideration per share of Preferred Stock at least equal to
the face amount or liquidation preference of such Preferred Stock plus any
accrued but unpaid
26
interest or dividends thereon.
(b) The TCW Stockholders shall not be required to accept
consideration in a Change of Control Transaction in which the rights set
forth in this Section 6 are exercised other than for cash or equity
securities registered under the Exchange Act and listed on the New York or
American Stock Exchange or the Nasdaq National Market ("Public
------
Securities"). A Change of Control Transaction involving consideration
----------
other than cash or Public Securities may be effected and the rights
provided in this Section 6 may be exercised if the TCW Stockholders receive
consideration consisting solely of cash and Public Securities in respect of
their Securities, with the value of the consideration receivable in such a
transaction to be determined in the manner described below. The value of
the Securities held by the TCW Stockholders initially shall be determined
in good faith by the Board of Directors of the Company, and the Company
shall provide written notice thereof to the TCW Stockholders. If no
objection is made to such determination within twenty (20) business days by
the TCW Stockholders then holding a majority of the Securities held by the
TCW Stockholders, the value determined by the Board of Directors of the
Company shall be final and binding on all parties. If the holders of a
majority of the Securities owned by the TCW Stockholders object in writing
to such valuation within twenty (20) business days after receipt of notice
from the Company, the Company shall select an independent financial
appraiser, the Holders of a majority of the Securities owned by TCW shall
select an independent financial appraiser, and the two financial appraisers
shall select a third independent financial appraiser to determine the value
of the Securities held by the TCW Stockholders. The cost and expense of
these appraisers shall be paid by the Company.
(c) No Principal Stockholder who holds any debt or other securities
issued by the Company (i.e., securities other than Common Stock) shall,
pursuant to the Change of Control Transaction, receive, in consideration of
such debt or other securities, an amount greater than the sum of, without
duplication, (X) the face amount or liquidation preference of such
securities, plus (Y) any accrued but unpaid interest or dividends thereon
(including cumulative dividends, if applicable), plus (Z) any prepayment or
redemption premium or penalty set forth in the terms of the agreements
evidencing such securities.
(d) No Non-Principal Stockholder shall be obligated to make any out
of pocket expenditure prior to the consummation of the Change of Control
Transaction (excluding modest expenditures for postage, copies, etc.), and
no Non-Principal Stockholder shall be obligated to pay more than his, her
or its pro-rata share of reasonable expenses incurred in connection with a
consummated Change of Control Transaction to the extent such costs are
incurred for the benefit of all Stockholders and are not otherwise paid by
the Company or the acquiring party. Costs incurred by or on behalf of a
Stockholder for his, her or its sole benefit will not be considered costs
of the transaction hereunder.
(e) The only representations, warranties or covenants that TCW shall
be required to make in connection with the Change of Control Transaction
are representations and warranties with respect to its own ownership of the
Securities to be sold by it and its ability to convey title thereto free
and clear of liens, encumbrances or adverse claims; the liability of TCW
with respect to any representation and warranty or covenant made in
connection with a Change of Control Transaction shall be several and not
joint with any other person; such liability shall be limited to the amount
of proceeds actually received by TCW in the Change of Control Transaction,
and TCW shall not be
27
required to provide any indemnification or escrow to anyone in connection
with the Change of Control Transaction, other than with respect to the
representations, warranties and covenants made by TCW in connection with
the Change of Control Transaction; provided, however, that TCW shall not be
obligated to participate in a Change of Control Transaction unless TCW is
provided an opinion of counsel to the effect that the sale in connection
with such Change of Control Transaction is not in violation of the
registration or qualification requirements of federal or applicable state
securities laws, or, if TCW is not provided with such an opinion, the
Company shall indemnify TCW for any violation.
6.3 If the Principal Stockholders enter into any negotiation with respect
to a Change of Control Transaction for which Rule 506 under the Securities Act
(or any similar rule then in effect) may be available, each Non-Principal
Stockholder who is not an accredited investor (as such term is defined in Rule
501 under the Securities Act) will, at the request of the Principal
Stockholders, appoint a purchaser representative (as such term is defined in
Rule 501 of the Securities Act) reasonably acceptable to the Principal
Stockholders.
6.4 Section 6.1 of this Agreement provides that, subject to the provisions
thereof, the Stockholders must sell the Securities owned by them in connection
with a Change of Control Transaction. In order to implement the provisions of
this Section 6, each of the Stockholders by executing this Agreement hereby
agrees to vote or to execute and deliver written consents in respect of all
Securities now owned or hereafter registered in its name in connection with the
approval of such a Change of Control Transaction (provided that the conditions
of Section 6 are satisfied). Each of the Stockholders affirms that its agreement
to vote for the approval of a Change of Control Transaction is given as a
condition of this Agreement and as such is coupled with an interest and is
irrevocable. This voting agreement shall remain in full force and effect and be
enforceable against any donee, transferee or assignee of the Securities that is
required to become a party to this Agreement. This voting agreement shall remain
in full force and effect throughout the time that Section 6 of this Agreement is
in effect. It is understood that this voting agreement relates solely to such a
Change of Control Transaction and does not constitute the agreement to vote or
consent as to any other matters.
SECTION 7. [RESERVED]
SECTION 8. Tag-Along Rights.
----------------
8.1 The Tag-Along Rights Notice. If any Principal Stockholder "Selling
--------------------------- --------
Stockholder") negotiates or receives and elects to accept one or more bona fide
- ------------
offers to purchase or otherwise acquire for value shares of Preferred Stock or
Common Stock (a "Purchase Offer") , such Selling Stockholder, subject to other
--------------
restrictions contained herein, shall promptly notify in writing the TCW
Stockholders (the "Participating Stockholders") and the Company of the terms and
--------------------------
conditions of such Purchase Offer and the number of Securities proposed for sale
pursuant to the Purchase Offer (the "Tag-Along Rights Notice") and must include
-----------------------
therewith a copy of drafts of all materials relating to the Purchase Offer.
8.2 The Rights. The Participating Stockholders shall have the right,
----------
exercisable upon written notice to the Selling Stockholder within twenty (20)
days after the date of receipt of the Tag-Along Rights Notice, to participate in
accordance with the terms and conditions set forth below in the Selling
Stockholder's sale of Preferred Stock or Common Stock pursuant to the specified
terms and conditions of such Purchase Offer. To the extent the Participating
Stockholder exercises such right of participation, the
28
number of shares of Preferred Stock or Common Stock that the Selling Stockholder
may sell pursuant to such Purchase Offer shall be correspondingly reduced. The
right of participation shall be subject to the following terms and conditions:
(a) Each Participating Stockholder may sell all or any part of that
number of Securities owned by such Participating Stockholder that is not in
excess of the product obtained by multiplying (i) the number of shares of
Preferred and/or Common Stock covered by the Purchase Offer that the
Selling Stockholder may sell by (ii) a fraction, the numerator of which is
the number of shares of Preferred and/or Common Stock of the Company at the
time owned by that Participating Stockholder, and the denominator of which
is the aggregate number of shares of Preferred and/or Common Stock of the
Company then outstanding held by the Selling Stockholder and all of the
Participating Stockholders. Fractions shall be computed separately for the
Preferred Stock and Common Stock.
(b) Nothing herein shall prevent the Holders of a majority of the
Securities held by the Principal Stockholders, or the Holders of a majority
of the Securities held by TCW from waiving the rights of such respective
group of Stockholders under this Section 8.
8.3 Procedures.
----------
(a) Each Participating Stockholder may effect his, her or its
participation in the sale by delivering to the Selling Stockholder, with a
copy to the Company, within the twenty-day period specified under Section
8.2 above, for transfer to the maker(s) of the Purchase Offer, one or more
certificates or other instruments, properly endorsed for transfer, which
shall be accompanied by a written election to participate in the sale with
respect to the number of shares of Preferred and/or Common Stock (the
"Election Number").
----------------
(b) The certificates and other instruments that the Participating
Stockholder delivers pursuant to Section 8.2 above shall be transferred by
the Company to the maker(s) of the Purchase Offer in consummation of the
sale of the applicable Securities pursuant to the terms and conditions
specified in the Tag-Along Rights Notice to the Participating Stockholder,
and the Company shall promptly thereafter remit to such Participating
Stockholder that portion of the sale proceeds to which such person is
entitled by reason of his participation in such sale and any stock
certificates representing any remaining securities not sold in such sale;
provided however, that if there is any material change in the terms and
conditions of the transaction described in the Tag-along Rights Notice
(including, without limitation, any decrease in the purchase price) after a
Selling Stockholder makes the election set forth above, then such Selling
Stockholder has the right to withdraw from participation in such
transaction any or all shares of Preferred and/or Common Stock.
8.4 Future Rights. The exercise or non-exercise of the rights of the
-------------
Participating Stockholders to participate in one or more sales of Securities
made by a Selling Stockholder shall not adversely affect the rights of the
Participating Stockholders to participate in subsequent sales by a Selling
Stockholder pursuant to this Section 8.
8.5 Limitation on Liability of TCW. If a sale pursuant to this Section 8
------------------------------
constitutes part of a Change of Control Transaction, then the limitations set
forth in Section 6.2(e) shall apply.
29
SECTION 9. Preemptive Rights.
-----------------
9.1 Right to Purchase New Securities. The Company hereby grants to each
--------------------------------
Stockholder the right to purchase, pro rata, all New Securities (as defined in
Section 9.2) which the Company may, from time to time, propose to sell and issue
at the price and on the terms on which the Company proposes to sell such New
Securities. A Stockholder's pro rata share, for purposes of this Section 9,
shall be equal to a fraction (A) the numerator of which is the number of shares
of Common Stock (on a fully diluted basis assuming exercise of all outstanding
options and warrants to acquire Common Stock) held by such Stockholder on the
date of the Company's written notice pursuant to Section 9.3 below; and (B) the
denominator of which is the number of shares of Common Stock outstanding (on a
fully diluted basis assuming exercise of all outstanding options and warrants to
acquire Common Stock) on such date held by the Stockholders who agree to
purchase such New Securities. The right to purchase New Securities shall be
subject to the following additional provisions of this Section 9.
9.2 Definitions. "New Securities" shall mean any capital stock (including
-----------
Common Stock or Preferred Stock) of the Company whether now authorized or not,
and rights, options or warrants to purchase capital stock, and securities of any
type whatsoever that are, or may become, convertible into or exchangeable for
capital stock; provided, however, that the term New Securities shall not include
-------- -------
(i) securities issued in connection with the acquisition of another corporation
or entity by the Company by merger, purchase of substantially all of the assets
or other reorganization whereby the Company acquires more than fifty percent
(50%) of the voting power or assets of such corporation or entity (including
securities issued as a broker's or finder's fee upon the consummation of such an
acquisition); (ii) Common Stock (including options to purchase Common Stock),
issued to employees, consultants or directors of the Company pursuant to plans
or agreements approved by the board of Directors; (iii) securities issued
pursuant to any stock dividend, stock split, combination or other
reclassification by the Company or any of its capital stock; (iv) securities
covered by a registration statement which has been declared effective under the
Securities Act and sold pursuant to a firm commitment underwriting by a
nationally recognized investment bank; or (v) securities sold to TCW pursuant to
the Purchase Agreement.
9.3 Required Notices. In the event the Company proposed to undertake an
----------------
issuance of New Securities it shall give each Stockholder written notice,
pursuant to the provisions of Section 10.6 hereof, of its intention, describing
the type of New Securities, the price, the number of shares and the general
terms upon which the Company proposes to issue the same. Each Stockholder shall
have thirty (30) days from the date of receipt of any such notice to agree to
purchase any or all of such Stockholder's pro rata share of such New Securities
for the price and upon the general terms specified in the notice by giving
written notice to the Company and stating therein the quantity of New Securities
to be purchased.
9.4 Company's Right to Sell. In the event the existing Stockholders fail
-----------------------
to exercise the right of first refusal as to all New Securities offered within
said thirty (30) day period, the Company shall have sixty (60) days thereafter
to sell or enter into an agreement (pursuant to which the sale of New Securities
covered thereby shall be closed, if at all, within sixty (60) days from the date
of said agreement) to sell all such New Securities respecting which the right to
purchase provided in Section 9.1 was not exercised, at a price and upon the
general terms not more favorable in any material respect to the purchasers
thereof than specified in the Company's notice. In the event the Company has not
sold within said sixty (60) day period or entered into any agreement to sell all
such New Securities within said sixty (60) day period (or sold and issued all
such New Securities in accordance with the foregoing within sixty (60) days from
the date of said
30
agreement), the Company shall not thereafter issue or sell any New Securities,
without first offering such securities to the Stockholders in the manner
provided above.
9.5 Expiration of Right. The rights provided under Section 9 hereof
-------------------
shall not apply to a Qualified IPO and shall expire on the effective date of a
registration statement filed with the Commission in connection with a Qualified
IPO (provided, that such right shall be reinstated if equity securities of the
Company are not sold pursuant to such registration statement).
9.6 Assignment. The rights provided in Section 9 hereof are
----------
nonassessable, except that (a) such rights are assignable by each Stockholder to
another Stockholder (or to a person who becomes a Stockholder upon transfer of
shares to such person) or to an Affiliate of such Stockholder.
SECTION 10. Company and TCW Call Rights
---------------------------
10.1 Termination of the Principals for Cause. If the employment of
---------------------------------------
either of the Principals is terminated for Cause, the Company (and in the event
that the Company does not elect to fully exercise its rights hereunder, the
Initial TCW Holders) shall (within the time periods specified in Section 10.3
hereof) have the right to purchase from such Principal (and such Principal's
transferees of Common Stock pursuant to Section 4.3 hereof (collectively, the
"Permitted Transferees")) and such Principal (and such Principal's Permitted
Transferees) shall have the obligation to sell, up to 100% of the Common Stock
owned by such Principal (and its Permitted Transferees) for a purchase price per
share (such price, the "Reduced Call Price") equal to the amount determined in
accordance with clause (i) below unless clause (ii) is applicable:
(i) the quotient derived by dividing (y) the difference
derived by subtracting (a) Company Debt, from (b) the product
derived by multiplying (i) EBITDA of the Company for the 12-
month period ended as of the last day of the calendar quarter
immediately preceding the date notice is sent pursuant to Section
10.3 hereof, times (ii) four, by (z) the total number of fully
diluted shares (giving effect to the future exercise of all
outstanding warrants, options or any other rights to acquire
shares of Common Stock or securities convertible or exchangeable
for Common Stock, regardless of whether such exercise has
occurred or the right to exercise has vested, the "Fully Diluted
Shares") of Common Stock; and
(ii) if such termination occurs after the occurrence of a
Qualified IPO, and the Common Stock is listed on a nationally
recognized stock exchange, including, without limitation, the
Nasdaq National Market System (an "Exchange"), then 70% of the
average closing price for the Common Stock on such Exchange for
the twenty trading days immediately preceding the date the
employment of such Principal is terminated (the "Average Closing
Price").
10.2 Resignation of the Principals.
-----------------------------
(a) If either of the Principals retires or resigns prior to the
fifth annual anniversary of this Agreement for any reason other than due to
severe physical illness that prohibits such Principal from fulfilling his
obligations under his employment agreement with the Company, the Company (and in
the event that the Company does not elect to fully exercise its rights
hereunder, the Initial TCW Holders) shall (within the time periods specified in
Section 10.3 hereof) have the right to purchase from such Principal
31
(and such Principal's Permitted Transferees) and such Principal (and such
Principal's Permitted Transferees) shall have the obligation to sell, up to 50%
of the Common Stock then owned by such Principal (and its Permitted Transferees)
for a purchase price per share equal to the amount determined in accordance with
clause (i) below unless clause (ii) is applicable:
(i) the quotient derived by dividing (y) the difference
derived by subtracting (a) Company Debt, from (b) the
product derived by multiplying (i) EBITDA of the Company for
the 12-month period ended as of the last day of the calendar
quarter immediately preceding the date notice is sent
pursuant to Section 10.3 hereof, times (ii) 5.5, by (z) the
total number of Fully Diluted Shares; and
(ii) if such termination occurs after the occurrence of a
Qualified IPO, and the Common Stock is listed on an
Exchange, 85% of the Average Closing Price for Common Stock.
(b) If either of the Principals retires or resigns and such
Principal enters into the business of selling, servicing or financing
automobiles or other vehicles (other than Permitted Activities) anywhere in the
United States (which shall include the ownership of greater than 5% of the
equity interests of an entity engaged in such business), the Company (and in the
event that the Company does not elect to fully exercise its rights hereunder,
the Initial TCW Holders) shall (within the time periods specified in Section
10.3 hereof) have the right to purchase from such Principal (and such
Principal's Permitted Transferees) and such Principal (and such Principal's
Permitted Transferees) shall have the obligation to sell, up to 100% of the
Common Stock owned by such Principal (and its Permitted Transferees) for a
purchase price per share equal to the Reduced Call Price, calculated as if the
employment of such Principal were terminated on the date notice is sent pursuant
to Section 10.3 hereof.
10.3 Call Procedures.
---------------
(a) If the Company desires to purchase any of the Principal's
and its Permitted Transferees' Common Stock pursuant to Section 10.1 or Section
10.2(a), it shall notify such Principal not later than ninety (90) calendar days
following the date such Principal's employment is terminated, or if the Company
desires to purchase any of such Common Stock pursuant to Section 10.2(b), it may
notify such Principal at any time, of its intention to purchase such Common
Stock, which notice, in either event, shall specify the number of shares of
Common Stock that the Company desires to purchase, and the price per share to be
paid. The Company shall send concurrently a copy of such notice (the "Company
Notice") to each of the Initial TCW Holders.
(b) Within fifteen (15) calendar days of the date the Company
sends notice pursuant to Section 10.3(a), it shall make payment for the Common
Stock by check to the address to which notices are to be sent under this
Agreement, or in immediately available funds to the account specified by the
Principal.
(c) If the notice provided by the Company pursuant to Section
10.3(a) hereof does not set forth all of the shares of Common Stock which the
Company has the right to purchase pursuant to this Section 10, and the Initial
TCW Holders desire to purchase any of the balance of such shares, the Initial
TCW Holders shall notify such Principal not later than forty-five (45) calendar
days following receipt of the Company Notice of their intention to purchase such
Common Stock, which notice shall specify the number of shares of Common Stock
that the Initial TCW Holders desire to purchase and the price per share to be
32
paid.
(d) Within fifteen (15) calendar days of the date the Initial
TCW Holders send notice pursuant to Section 10.3(c), they shall make payment for
the Common Stock by check to the address to which notices are to be sent under
this Agreement, or in immediately available funds to the account specified by
the Principal.
(e) All shares sold pursuant to this Section 10 shall be free
and clear of liens, encumbrances and adverse claims.
10.4 Noncompetition Agreement. The rights and obligations of the
------------------------
parties with respect to this Section 10, are conditioned upon the execution by
each of the Principals simultaneous with or prior to the execution of this
Agreement of a noncompetition agreement, substantially in the form attached
hereto as Exhibit C.
SECTION 11. Miscellaneous.
-------------
11.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES THEREOF.
11.2 Certain Adjustments. The provisions of this Agreement shall
-------------------
apply to the full extent set forth herein with respect to any and all shares of
capital stock of the Company or any successor or assign of the Company (whether
by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for, or in substitution for the shares of Common Stock,
by combination, recapitalization, reclassification, merger, consolidation or
otherwise and the term "Common Stock" shall include all such other securities.
------------
In the event of any change in the capitalization of the Company, as a result of
any stock split, stock dividend or stock combination or otherwise, the
provisions of this Agreement shall be appropriately adjusted.
11.3 Enforcement. The parties expressly agree that the provisions of
-----------
this Agreement may be specifically enforced against each of the parties hereto
in any court of competent jurisdiction.
11.4 Successors and Assigns. This Agreement shall be binding upon
----------------------
and shall inure to the benefit of the parties hereto, and their respective
successors and permitted assigns; provided that (i) neither this Agreement nor
--------
any rights or obligations hereunder may be transferred or assigned by the
Company (except by operation of law in any merger); (ii) neither this Agreement
nor any rights or obligations hereunder may be transferred or assigned by any
Stockholder except to any Person to whom it has Transferred Securities in
compliance with this Agreement and who has become bound by this Agreement
pursuant to Section 4.1(b) hereof; and (iii) the rights of the parties under
Section 3 hereof may not be assigned to any Person except as explicitly provided
therein. If any party hereto shall acquire additional Securities, such
Securities shall, except as otherwise expressly provided herein, be held subject
to (and entitled to all the benefits of) all of the terms of this Agreement.
11.5 Entire Agreement. This Agreement constitutes the full and
----------------
entire understanding and
33
agreement between the parties with regard to the subject matter hereof and
supersede all prior oral or written (and all contemporaneous oral) agreements or
understandings with respect to the subject matter hereof, except as set forth in
the Purchase Agreement.
11.6 Notices, etc. All notices and other communications required or
------------
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, return receipt requested, postage prepaid or otherwise delivered
by hand, messenger or facsimile transmission, addressed: (a) if to a party
listed on Appendix A or a transferee of such party, at such party's address as
set forth on Appendix A, or at such other address as such party or its
transferee shall have furnished to the Company in writing, (b) if to the
Principals to Mr. Thomas Price, c/o Serramonte Auto Plaza, 1500 Collins Avenue,
Colma, California 94014, and Mr. Donald Strough, c/o Concord Honda, 1300 Concord
Avenue, Concord, California 94520 or (c) if to the Company, at c/o Kay & Merkle,
100 The Embarcadero, San Francisco 94105 Attn: W. Bruce Bercovich.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or as having been given when delivered, if
delivered by hand or by messenger (or overnight courier), 24 hours after
confirmed receipt if sent by facsimile transmission or at the earlier of its
receipt or on the fifth day after mailing, if mailed, as aforesaid.
11.7 Delays or Omissions. No delay or omission to exercise any
-------------------
right, power or remedy accruing to any party hereto upon any breach or default
of the Company under this Agreement, shall impair any such right, power or
remedy of such holder nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or
default thereunder occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default therefore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement, or by law or otherwise afforded to any party, shall be
cumulative and not alternative.
11.8 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which may be executed by less than all of the parties
hereto, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
11.9 Severability. If any provision of this Agreement shall be
------------
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
11.10 No Waivers; Amendments.
----------------------
(a) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
(b) This Agreement may not be amended or modified, nor may any
provision hereof
34
be waived, other than by a written instrument signed by (x) the Principals,
and (y) the holders of a majority of the shares of Common Stock held by TCW
Stockholders.
The parties hereto shall use their best efforts not to effect any
amendments to the Charter Documents that would circumvent the provisions of
this Section 10.10.
11.11 Jurisdiction. The parties hereto irrevocably submit, in any
------------
legal action or proceeding relating to this Agreement, to the jurisdiction of
the courts of the United States or the State of California, in the city of Los
Angeles and consent that any such action or proceeding may be brought in such
courts and waive any objection that they may now or hereafter have to the venue
of such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient forum.
11.12 Termination. The provisions of this Agreement other than
-----------
Sections 3, 4.4, 5, 6, 8, 10 and 11 shall terminate upon the earlier of (a) the
closing of a Qualified IPO and (b) the tenth anniversary of the date of this
Agreement. All of the provisions of this Agreement shall terminate if the Notes
are no longer outstanding, all of the Preferred Stock has been retired, a
Qualified IPO has closed and the Initial TCW Holders beneficially own less than
20% of the shares of the Common Stock set forth opposite their names on Appendix
A hereto.
35
FIRSTAMERICA AUTOMOTIVE, INC.
By:______________________________
Name:____________________________
Title:___________________________
/s/ Thomas Price
_________________________________
Thomas Price
/s/ Donald Strough
_________________________________
Donald Strough
/s/ Steven Hallock
_________________________________
Steven Hallock
/s/ Fred Cziska
_________________________________
Fred Cziska
/s/ Al Babbington
_________________________________
Al Babbington
/s/ John Driebe
_________________________________
John Driebe
EMBARCADERO AUTOMOTIVE, L.L.C.
By:______________________________
Name:____________________________
Title:___________________________
36
RAINTREE CAPITAL, L.L.C.
By:______________________________
Name:
Title:
BB INVESTMENTS
By:______________________________
Name:
Title:
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW ADVISORS (BERMUDA),
LIMITED, as general partner
By:______________________________
Name:
Title:
By: TCW INVESTMENT MANAGEMENT
COMPANY, as Investment Advisor
By:______________________________
Name:
Title:
37
TCW/CRESCENT MEZZANINE
PARTNERS, L.P.
TCW/CRESCENT MEZZANINE TRUST
TCW/CRESCENT MEZZANINE
INVESTMENT PARTNERS, L.P.
By: TCW/CRESCENT MEZZANINE L.L.C.,
its general partner or managing
owner
By: /s/ Jean-Marc Chapus
______________________________
Jean-Marc Chapus
Managing Director
By: /s/ John C. Rocchio
______________________________
John C. Rocchio
Senior Vice President
TCW SHARED OPPORTUNITY FUND II, L.P.
By: TCW INVESTMENT MANAGEMENT
COMPANY, its investment advisor
By: /s/ Jean-Marc Chapus
______________________________
Jean-Marc Chapus
Managing Director
By: /s/ John C. Rocchio
______________________________
John C. Rocchio
Senior Vice President
CRESCENT/MACH I PARTNERS, L.P.
By: TCW ASSEST MANAGEMENT COMPANY,
as investment manager and
attorney-in-fact
By: /s/ Jean-Marc Chapus
______________________________
Jean-Marc Chapus
Managing Director
By: /s/ John C. Rocchio
______________________________
John C. Rocchio
Senior Vice President
38