EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
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This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into this 1st day of April, 1997, by and between Cross-Continent Auto Retailers,
Inc., a Delaware corporation (the "Company"), and R. XXXXXXX XXXXXXXX (the
"Stockholder").
Introduction
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In accordance with the Stock Purchase Agreement dated January 23, 1997 (the
"Stock Purchase Agreement"), by and between the Company and the Stockholder, the
Stockholder is being issued shares of restricted common stock, par value $.01
per share, of the Company (the "Common Stock") in connection with the
consummation of the transactions contemplated thereby.
As a condition to the consummation of the transactions contemplated by the
Stock Purchase Agreement, the Company and the Stockholder are entering into this
Agreement.
The parties hereto agree as follows:
1. Definitions. As used herein, the following terms have the following
respective meanings:
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Distribution Period" means (a) in the case of a distribution of
Registrable Shares in a firm commitment underwritten public offering, the period
of time as each underwriter has completed the distribution of all securities
purchased by it, but in any case not more than 30 days, or (b) in the case of
any other distribution of Registrable Shares, the period ending on the earlier
of (i) the sale of all Registerable Shares covered by such registration, or (ii)
21 days following the effective date of the registration statement utilized in
connection with such registration under the Securities Act.
"Registrable Shares" means(a) on the date hereof, 25% of, and (b) on each
subsequent anniversary of the date hereof, the following cumulative amount of;
the shares of Common Stock issued to the Stockholder pursuant to the Stock
Purchase Agreement, including any additional shares issued as a stock dividend
thereon or any shares issued as the result of a stock split (including reverse
stock split), recapitalization, reorganization, stock exchange or other
combination).
Anniversary Date Cumulative Amount
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First 50%
Second 75%
Third 100%
"Securities Act" means the Securities Act of 1933, as amended.
2. Incidental Registration.
(a) If the Company proposes to register any Common Stock under the
Securities Act (other than on Forms X-0, X-0 or any other form which does not
permit registration of securities by selling stockholders for sale to the public
for cash) in connection with the proposed offer and sale for cash either for its
own account or on behalf of any holder of Common Stock, it will give written
notice to the Stockholder of its intention to do so at least 10 business days
prior to the earliest date on which the Company anticipates that such
registration will be declared effective by the Commission. Upon the
Stockholder's written request to the Company, given within 10 business days
after receipt of any such notice, to register any of such Stockholder's
Registrable Shares, the Company will use reasonable efforts to cause the
Registrable Shares as to which registration shall have been so requested to be
included in the shares of Common Stock to be covered by the registration
statement proposed to be filed by the Company; provided that nothing set forth
in this Agreement shall prevent the Company from, at any time, withdrawing,
abandoning or delaying any registration of such Common Stock.
(b) The Company shall have the sole right to select the underwriter or
underwriters for any underwritten offering, including (without limitation) the
managing underwriter. The managing underwriter for such offering shall have the
authority, in its sole discretion, to reduce the number of Registrable Shares to
be included in such registration if and to the extent that it determines that
inclusion of such Registrable Shares would adversely affect the marketing of the
other Common Stock to be sold thereunder or would limit the number of shares of
Common Stock to be included in such registration by the Company. Any such
reduction in the shares included in any such offering shall be effected (i)
first, by excluding (A) shares ("Piggyback Shares") of Common Stock that
otherwise would be included by virtue of incidental or piggyback registration
rights (but not demand registration rights) granted to stockholders of the
Company (including the Stockholder), and (B) shares ("Executive Shares") of
Common Stock that are beneficially owned by Xxxx X. Xxxxxxxxx, Xxxxxx X. Xxxx,
or Xxxxxx X. Xxxx, Xx. and that otherwise would be included, which exclusion
shall be effected on a pro rata basis based upon the number of shares of Common
Stock so requested to be registered in such offering by all such stockholders
proposing to sell Piggyback Shares or Executive Shares, and (ii) second, only to
the extent necessary and after the exclusion of all Piggyback Shares and
Executive Shares, by excluding shares of Common Stock included in such
registration by the Company and any stockholder of the Company who shall have
exercised a demand registration right in connection with such offering, which
exclusion shall be effected on a pro rata basis based upon the number of shares
of Common Stock proposed to be registered on behalf of the Company and on behalf
of any such holder of demand registration rights.
(c) On any offering that is not underwritten, the Company shall have the
authority, in its sole discretion, to reduce the number of Registrable Shares to
be included in such registration if and to the extent that it determines that
inclusion of such Registrable Shares would
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adversely affect the marketing of the other Common Stock to be sold thereunder
or would limit the number of shares of Common Stock to be included in such
registration by the Company. Any such reduction in the shares included in any
such offering shall be effected (i) first, by excluding Piggyback Shares and
Executive Shares, which exclusion shall be effected on a pro rata basis based
upon the number of shares of Common Stock so requested to be registered in such
offering by all such stockholders proposing to sell Piggyback Shares or
Executive Shares, and (ii) second, only to the extent necessary and after the
exclusion of all Piggyback Shares and Executive Shares, by excluding shares of
Common Stock included in such registration by the Company and any stockholder of
the Company who shall have exercised a demand registration right in connection
with such offering, which exclusion shall be effected on a pro rata basis based
upon the number of shares of Common Stock proposed to be registered on behalf of
the Company and on behalf of any such holder of demand registration rights.
(d) If any registration pursuant to this Section 2 shall be underwritten,
in whole or in part, the Company or the managing underwriter or underwriters may
require that the Registrable Shares requested for inclusion pursuant to this
Section 2 be included in the underwriting on the same terms and conditions as
the securities otherwise being sold through the underwriters.
3. Preparation and Filing. If and whenever the Company is under an
obligation pursuant to the provisions of Section 2 to effect the registration of
any Registrable Shares, the Company shall, as expeditiously as practicable:
(a) prepare and diligently pursue the filing with the Commission of a
registration statement with respect to such securities and use reasonable
efforts to cause such registration statement to become and remain effective for
the Distribution Period, but no longer;
(b) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for the
Distribution Period, but no longer;
(c) furnish to the Stockholder such number of copies of a summary
prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as the Stockholder may reasonably request in order to facilitate the public sale
or other disposition of such Registrable Shares;
(d) use reasonable efforts to register or qualify the Registrable Shares
covered by such registration statement under the securities or "blue sky" laws
of such states as the Stockholder shall reasonably request (provided, that the
Company shall not be required to consent to general service of process for all
purposes in any jurisdiction where it is not then qualified) and do any and all
other acts or things which may be necessary or advisable to enable the
Stockholder to consummate the public sale or other disposition in such
jurisdictions of such securities;
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(e) notify the Stockholder at any time during the Distribution Period when
a prospectus relating thereto covered by such registration statement is required
to be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of such Stockholder, prepare and furnish to such Stockholder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing; and
(f) use reasonable efforts to furnish, at the request of the Stockholder on
the date that such Registrable Shares are delivered to the underwriters for sale
in connection with a registration pursuant to Section 2, if such securities are
being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, stating
that such registration statement has become effective under the Securities Act
and that (A) to the best of such counsel's knowledge, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the Securities Act,
(B) the registration statement, the related prospectus, and each amendment or
supplement thereof, comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder (except no opinion or statement is required regarding
financial statements and other financial and statistical data), and (C) to such
other matters as may reasonably be requested by counsel for the underwriters, if
any, and (ii) a letter dated such date, from the independent certified public
accountants of the Company, stating that they are independent public accountants
within the meaning of the Securities Act and that, in the opinion of such
accountants, the financial statements of the Company included or incorporated by
reference in the registration statement or the prospectus, or any amendment or
supplement thereof, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters with respect to the registration
in respect of which such letter is being given as such underwriters, if any, may
reasonably request.
(g) Notwithstanding anything to the contrary contained herein, the Company
shall have the right to deregister any Registerable Shares that remain unsold at
the conclusion of any Distribution Period.
4. Stockholder's Lock-Up; Cooperation. If any Registrable Shares of the
Stockholder are included in an underwritten registration pursuant to Section 2,
the Stockholder, as a condition to receiving the rights granted hereunder, may
be required to, and if required the Stockholder shall, enter into an agreement
with the managing underwriter or underwriters (a "Lock-up
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Agreement"), pursuant to which such Stockholder shall refrain from selling any
shares of Common Stock not included in such registration during the period of
distribution of Common Stock by such underwriters and for a period of up to 180
days following the effective date of such registration. In connection with each
registration pursuant to Section 2 hereof, the Stockholder selling Registrable
Shares shall furnish in writing to the Company and any underwriter participating
in such offering such information with respect to themselves and the proposed
distribution by them as shall be reasonably necessary in order to assure
compliance with Federal and applicable state securities laws.
5. Underwriting Agreement. In connection with each registration pursuant
to Section 2 covering an underwritten public offering, the Company and the
Stockholder agree to enter into a written agreement with the managing
underwriter or underwriters in such form and containing such provisions as are
usual and customary in the securities business for such an arrangement between
reputable underwriters and companies of the Company's size and investment
stature; provided that such agreement shall not contain any such provision
applicable to the Company or the Stockholder which is inconsistent with the
provisions of this Agreement; and provided, further, that the time and place of
the closing under said underwriting agreement shall be as mutually agreed upon
between the Company and such managing underwriter.
6. Expenses. All expenses incurred by the Company in complying with this
Agreement, including, without limitation, all registration and filing fees, fees
and expenses of complying with securities and "blue sky" laws, printing
expenses, and fees and disbursements of the Company's counsel and of the
Company's independent certified public accountants shall be paid by the Company;
provided that counsel to the Stockholder and all underwriting discounts and
selling commissions applicable to the Registrable Shares covered by
registrations effected hereunder shall not be borne by the Company but shall be
borne by the Stockholder.
7. Indemnification.
(a) In the event of any registration of any Registrable Shares under the
Securities Act pursuant to this Agreement or registration or qualification of
any Registrable Shares under state securities or "blue sky" laws pursuant to
this Agreement, the Company shall indemnify and hold harmless the Stockholder
against any losses, claims, damages or liabilities, joint or several, to which
the Stockholder may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any registration statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, or any document prepared or furnished by the Company
incident to the registration or qualification of any Registrable Shares pursuant
to this Agreement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or, with respect to any
prospectus, necessary to make the statements therein in light of the
circumstances under which
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they were made, not misleading, or any violation by the Company of the
Securities Act or state securities or "blue sky" laws applicable to the Company
and relating to action or inaction required of the Company in connection with
such registration or qualification under such state securities or "blue sky"
laws; and shall reimburse the Stockholder for any legal or any other expenses
reasonably incurred by him in connection with investigating or defending any
such loss, claim, damage, liability or action; provided that the Company shall
not be liable (i) in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
registration statement, any preliminary prospectus or final prospectus or any
amendment or supplement or any document incident to the registration or
qualification of any Registrable Shares pursuant to this Agreement in reliance
upon and in conformity with written information furnished to the Company by such
Stockholder or such underwriter specifically for use in the preparation thereof,
and (ii) to any broker or other person acting on behalf of such Stockholder to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any representation or other statement of such broker or other person
that is not in conformity with the preliminary prospectus or final prospectus.
(b) Stockholder hereby indemnifies and holds harmless the Company, each
director of the Company, each officer of the Company who shall sign such
registration statement and any person who controls the Company within the
meaning of the Securities Act, and before Registrable Shares held by such
Stockholder shall be included in any registration pursuant to this Agreement,
any underwriter acting on such Stockholder's behalf shall agree to indemnify and
hold harmless the Company, each director of the Company, each officer of the
Company who shall sign such registration statement and any person who controls
the Company within the meaning of the Securities Act (in each case in the same
manner and to the same extent as set forth in (a) above) with respect to any
untrue statement or omission from such registration statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, if such untrue statement or omission was made in reliance upon and in
conformity with written information furnished to the Company by such Stockholder
specifically for use in the preparation of such registration statement,
preliminary prospectus, final prospectus or amendment or supplement; provided
that the maximum amount of liability in respect of such indemnification shall be
limited, in the case of the Stockholder who, at any time during the registration
or the year preceding the registration, was not an officer or director of the
Company or any of its subsidiaries, to the amount paid for such Registrable
Shares upon the sale thereof pursuant to such registration.
(c) Each party entitled to indemnification hereunder (the "indemnified
party") shall give notice to the party required to provide indemnification (the
"indemnifying party") promptly after such indemnified party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit the
indemnifying party (at its expense) to assume the defense of any 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
reasonably satisfactory to the indemnified party, and the indemnified party may
participate in such defense, but only at such indemnified party's expense; and
provided, further, that the failure of any indemnified party to
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give notice as provided herein shall not relieve the indemnifying party of its
obligations under this Section 7 except to the extent that the omission results
in a failure of actual notice to the indemnifying party and such indemnifying
party is damaged as a result of the failure to give notice. It is understood
that the indemnifying party shall not, in connection with any action or related
actions in the same jurisdiction, be liable for the fees and disbursements of
more than one separate firm qualified in such jurisdiction to act as counsel for
the indemnified party. 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 which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
8. Rule 144 Matters. For so long as the Stockholder holds Registrable
Shares, or shares of Common Stock that will become Registrable Shares, that may
not be sold, without restriction, under Rule 144 under the Securities Act or any
successor rule, the Company shall (a) make and keep public information generally
available, as those terms are defined in Rule 144 under the Securities Act, and
(b) file with the Commission in a timely manner reports and other documents
required of the Company under the Securities Act and the Securities Exchange Act
of 1934, as amended.
9. Representations and Warranties.
(a) The Company hereby represents and warrants to the Stockholder
that:
(i) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the Company. The
Company has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby and has duly
executed and delivered this Agreement. This Agreement constitutes the valid and
binding obligation of the Company, enforceable against the Company in accordance
with its respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equitable principles.
(ii) Neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby nor compliance by the
Company with any of the provisions hereof will (A) conflict with or result in a
breach of the charter, by-laws or other constitutive documents of the Company,
(B) conflict with or result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the provisions of any
note, bond, lease, mortgage, indenture, license, franchise, permit, agreement or
other instrument or obligation to which the Company is a party, or by which the
Company or the Company's properties or assets, may be bound or affected, except
for such conflict, breach or default as to which requisite waivers or consents
shall be obtained before the Closing, (C) violate any law, statute, rule or
regulation or order, writ, injunction or decree applicable to the Company or the
Company's properties or
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assets, or (D) result in the creation or imposition of any security interest,
lien or other encumbrance upon any of the Company's properties or assets. No
consent or approval by, or any notification of or filing with, any person, firm,
corporation, partnership, joint venture, association or entity (governmental or
private) (each, a "person" and collectively, "persons") is required in
connection with the execution, delivery and performance by the Company of this
Agreement or the consummation of the transactions contemplated hereby, except as
set forth in the Stock Purchase Agreement.
(b) Representations and Warranties of the Stockholder. The Stockholder
represents and warrants to the Company that:
(i) The Stockholder has all requisite power, capacity and authority to
enter into this Agreement and to consummate the transactions contemplated hereby
and has duly executed and delivered this Agreement. This Agreement constitutes
the valid and binding obligation of the Stockholder, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability relating to
or affecting creditors' rights and to general equitable principles.
(ii) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby nor compliance by the
Stockholder with any of the provisions hereof will (A) conflict with or result
in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the provisions of any note, bond, lease, mortgage,
indenture, license, franchise, permit, agreement or other instrument or
obligation to which the Stockholder is a party, or by which the Stockholder or
the Stockholder's properties or assets may be bound or affected, except for such
conflict, breach or default to which requisite waivers or consents shall be
obtained before the Closing, (B) violate any law, statute, rule, regulation or
order, writ, injunction, or decree applicable to the Stockholder or the
Stockholder's properties or assets, or (C) result in the creation or imposition
of any security interest, lien or other encumbrance upon any property or assets
of the Stockholder. No consent or approval by, or any notification of or filing
with, any person is required in connection with the execution, delivery and
performance by the Stockholder of this Agreement or the consummation of the
transactions contemplated hereby, except as set forth in the Stock Purchase
Agreement.
10. Termination of Registration Rights. The Stockholder shall not be
entitled to execute any registration right provided for in this Agreement at any
time during which all the Registrable Shares, or shares that will become
Registrable Shares, held by such Stockholder may be sold without restriction of
any kind under Rule 144.
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11. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Stockholder with respect to the transactions
contemplated hereby and supersedes all prior agreements or understandings among
the parties with respect thereto.
(b) Headings. Descriptive headings are for convenience only and shall
not control or affect the meaning or construction of any provision of this
Agreement.
(c) Notices. All notices or other communications provided for in this
Agreement shall be in writing and shall be sent by confirmed telecopy to the
telecopy number set forth below (with an undertaking to provide a hard copy) or
delivered by hand or sent by overnight courier service prepaid to the address
specified below, or to such other telecopy number or address as the party to
whom notice is to be given may have furnished to the other party in writing in
accordance with this subsection.
If to the Company:
Cross-Continent Auto Retailers, Inc.
0000 X. Xxxxxx
Xxxxxxxx, Xxxxx 00000
Telecopy Number: (000) 000-0000
If to the Stockholder:
R. Xxxxxxx Xxxxxxxx
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopy Number: (000) 000-0000
(d) Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(e) Amendments. This Agreement shall not be altered or otherwise
amended except pursuant to an instrument in writing signed by the Company and
the Stockholder.
(f) Transferability. The registration and other rights granted to the
Stockholder hereunder are non-transferable and cannot be assigned or transferred
in any manner to any third party without the prior written consent of the
Company. Notwithstanding the foregoing, the
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Stockholder may assign the registration rights granted to the Stockholder herein
to the Stockholder's spouse or children or trusts, partnerships or corporations
for the sole benefit of such persons and, upon the Stockholder's death to the
Stockholder's estate or to no more than two: (i) private or public foundations
exempt from federal income taxation pursuant to Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, to which shares of Common Stock
issued to the Stockholder pursuant to the Stock Purchase Agreement have been
transferred in transactions that do not result in the recognition of taxable
income or capital gain for federal income tax purposes, or (ii) revocable or
irrevocable inter vivos trusts, partnerships or other entities to which shares
of Common Stock issued to the Stockholder pursuant to the Stock Purchase
Agreement have been transferred in transactions that do not result in the
recognition of taxable income or capital gain for federal income tax purposes.
(g) CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
COMPANY: CROSS-CONTINENT AUTO RETAILERS, INC.
By: /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx, Chairman
STOCKHOLDER:
/s/ R. Xxxxxxx Xxxxxxxx
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R. Xxxxxxx Xxxxxxxx
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