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EXHIBIT 10.31
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Autobytel.Europe LLC
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AMENDED AND RESTATED
OPERATING AGREEMENT
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Dated as of January 6, 2000
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I DEFINITIONS .......................................................... 1
1.1 "ABT Contribution" ............................................. 2
1.2 "Act"........................................................... 2
1.3 "Adjusted Capital Account Deficit".............................. 2
1.4 "Affiliate"..................................................... 2
1.5 "Agreement"..................................................... 2
1.6 "Assets"........................................................ 2
1.7 "Authorized Person"............................................. 2
1.8 "Business"...................................................... 2
1.9 "Business Day".................................................. 2
1.10 "Capital Account"............................................... 3
1.11 "Capital Contribution".......................................... 3
1.12 "Certificate"................................................... 3
1.13 "Code".......................................................... 3
1.14 "Company"....................................................... 3
1.15 "Expiration Date"............................................... 3
1.16 "Fair Market Value"............................................. 3
1.17 "Fiscal Year"................................................... 3
1.18 "Majority in Interest".......................................... 3
1.19 "Members"....................................................... 4
1.20 "Member Nonrecourse Debt"....................................... 4
1.21 "Member Nonrecourse Debt Minimum Gain".......................... 4
1.22 "Member Nonrecourse Deductions"................................. 4
1.23 "NASDAQ"........................................................ 4
1.24 "NOC"........................................................... 4
1.25 "Non-ABT Units"................................................. 4
1.26 "Observer"...................................................... 4
1.27 "Original Eligible Owner"....................................... 4
1.28 "Ownership Percentage".......................................... 4
1.29 "Person"........................................................ 4
1.30 "Profit or Loss"................................................ 4
1.31 "Securities Act"................................................ 5
1.32 "Tax Matters Partner"........................................... 5
1.33 "Treasury Regulations".......................................... 5
1.34 "Units"......................................................... 5
II. THE COMPANY........................................................... 5
2.1 Formation of the Company........................................ 5
2.2 Company Name and Office......................................... 6
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2.3 Purposes of the Company......................................... 6
2.4 Term of the Company............................................. 6
2.5 Title to Property............................................... 6
III. CAPITAL CONTRIBUTIONS................................................. 6
3.1 Initial Capital Contribution.................................... 6
3.2 No Further Contributions or Loans............................... 6
3.3 Dilution........................................................ 7
IV. VOTING AGREEMENT...................................................... 7
4.1 Board of Managers of the Company................................ 7
4.2 Member Voting................................................... 9
4.3 Vacancies/Removals.............................................. 9
4.4 No Voting or Conflicting Agreements............................. 9
4.5 Actions Consistent with Agreement............................... 9
4.6 Amendments to Organizational Documents.......................... 9
4.7 Expiration of Rights............................................ 9
V. MANAGEMENT AND OPERATIONS OF THE COMPANY.............................. 9
5.1 Management Generally............................................ 9
5.2 Meetings of the Board of Managers.............................. 10
5.3 Powers of the Board of Managers................................. 10
5.4 Duties and Obligations of the Board of Managers................. 11
5.5 No Compensation for the Board of Managers....................... 11
5.6 Reimbursement of Expenses....................................... 11
5.7 Officers........................................................ 12
VI. POWERS AND WARRANTIES OF THE MEMBERS; ADMISSION OF NEW MEMBERS ....... 12
6.1 Powers of the Members........................................... 12
6.2 Meetings of Members............................................. 12
6.3 Examination of Company Records.................................. 12
6.4 Admission of New Members........................................ 13
VII. RIGHTS AND RESTRICTIONS ON TRANSFERS BY THE MEMBERS................... 13
7.1 Restrictions on Transfers Generally............................. 13
7.2 Right of First Offer............................................ 13
7.3 Tag Along Right................................................. 14
7.4 Drag Along Right................................................ 15
7.5 Transfers to Affiliates......................................... 15
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7.6 Transfer by ABT to Pon.......................................... 15
7.7 Transferees Subject to Agreement................................ 16
7.8 Exchange Rights................................................. 16
7.9 Participation Rights............................................ 16
7.10 Preemptive Rights............................................... 17
7.11 Expiration of Rights and Restrictions........................... 18
7.12 ABT Ownership................................................... 18
7.13 Redemption Right................................................ 18
VIII. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS..................... 18
8.1 Member Representation........................................... 18
8.2 Company Representation.......................................... 20
8.3 Non-Solicitation; Non-Hire...................................... 21
8.4 Disclosure of Member Identity................................... 22
8.5 Annual Budget................................................... 22
8.6 IPO Intent...................................................... 22
8.7 Insurance....................................................... 22
8.8 Right to Offer Products and Services to NOCs.................... 22
IX. DISTRIBUTIONS......................................................... 23
9.1 Distributions................................................... 23
9.2 Establishment of Reserves....................................... 23
9.3 Liquidating Distributions....................................... 23
X. MAINTENANCE OF CAPITAL ACCOUNTS; ALLOCATIONS.......................... 23
10.1 Allocations of Profit or Loss................................... 23
10.2 Tax Allocations; Certain Book/Tax Differences................... 24
10.3 Special Allocations............................................. 24
10.4 Allocations Upon Transfer of Units in the Company .............. 25
XI. ACCOUNTING PROCEDURE; TAX MATTERS..................................... 26
11.1 Fiscal Year..................................................... 26
11.2 Books of Account................................................ 26
11.3 Preparation and Filing of Income Tax Returns and Other
Writings........................................................ 26
11.4 Controversies with the Internal Revenue Service................. 27
XII. LIMITATIONS ON LIABILITIES; INDEMNIFICATION; RIGHT TO CONDUCT
OTHER BUSINESS........................................................ 27
12.1 Liability of Members............................................ 27
12.2 Indemnification................................................. 27
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12.3 Right to Conduct Other Business................................. 28
XIII. POWER OF ATTORNEY..................................................... 28
13.1 Authority to Execute Documents.................................. 28
13.2 Survival of Power............................................... 28
XIV. AMENDMENT AND DISSOLUTION............................................. 29
14.1 Amendment....................................................... 29
14.2 Dissolution..................................................... 29
14.3 Distributions Upon Dissolution.................................. 30
14.4 No Obligation to Restore Deficit Capital Accounts............... 31
XV. MISCELLANEOUS......................................................... 31
15.1 Injunctive Relief............................................... 31
15.2 Further Assurances.............................................. 31
15.3 Governing Law; Dispute Resolution............................... 31
15.4 Entire Agreement................................................ 32
15.5 Binding Effect.................................................. 32
15.6 Invalidity of Provision......................................... 32
15.7 Notices......................................................... 32
15.8 Headings........................................................ 32
15.9 Gender and Number............................................... 32
15.10 Counterparts and Execution...................................... 32
15.11 Consents and Waivers............................................ 33
15.12 Rights and Remedies Cumulative.................................. 33
15.13 Waiver of Right to Partition.................................... 33
Schedule A Capital Contribution and Ownership Percentages..............S-1
Exhibit 1 Intercompany Software License Agreement.....................E-1
Exhibit 2 Legal Opinion...............................................E-2
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AMENDED AND RESTATED
OPERATING AGREEMENT
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THIS AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement")
is dated as of January 6, 2000 by and among Autobytel.Europe LLC, a Delaware
limited liability company (the "COMPANY"), ▇▇▇▇▇▇▇▇▇.▇▇▇ inc., a Delaware
company ("ABT"), GE Capital Equity Holdings, Inc., a Delaware corporation
("GE"), Inchcape Overseas Investments B.V., a Netherlands corporation
("INCHCAPE"), Pon Holdings B.V., a Netherlands corporation ("PON") and any other
Person who shall execute this Agreement or a counterpart thereof and become a
Member (as defined below) on and after the date hereof.
RECITALS
WHEREAS, on or about August 28, 1997, a Certificate of Formation
was filed for the Company with the office of the Secretary of State of the State
of Delaware under the name Auto-By-Tel International LLC.
WHEREAS, on or about March 8, 1999, the name of the Company was
changed to Autobytel.Europe LLC by filing with the Secretary of State of the
State of Delaware an amendment to the Certificate of Formation.
WHEREAS, the parties desire to enter into an agreement with
respect to the management of the Company, the transfer or other disposition of
the Units (as defined below) by any of the Members and certain other matters.
NOW, THEREFORE, in consideration of the mutual premises,
agreements and covenants set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending legally to be bound, hereby agree as follows:
TERMS OF AGREEMENT
I. DEFINITIONS
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The following terms when used in this Agreement, including its
preamble and recitals, shall have the following meanings, such meanings to be
equally applicable to the singular and plural forms thereof:
1.1 "ABT CONTRIBUTION" shall have the meaning ascribed to such
term in footnote 1 to Schedule A.
1.2 "ACT" shall mean the Limited Liability Company Act, Delaware
Code Annotated, Title 6, Sections 18-101 et seq., as from time to time amended.
1.3 "ADJUSTED CAPITAL ACCOUNT DEFICIT" shall mean, with respect
to any Member for any Fiscal Year, the deficit balance, if any, in such Member's
Capital Account as of the end of such Fiscal Year after giving effect to the
following adjustments: (a) crediting to such Capital Account any amounts that
such Member is obligated to restore as described in the penultimate sentences of
Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (b) debiting to
such Capital Account the items described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of "Adjusted
Capital Account Deficit" is intended to comply with the provisions of Treasury
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
1.4 "AFFILIATE" shall mean, with respect to any Person, any
Person that, directly or indirectly, controls, is controlled by, or is under
common control with, such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of (i) the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise, and (ii) more than 50%
of the equity interest entitled to vote for the election of directors or
equivalent governing body.
1.5 "AGREEMENT" shall have the meaning ascribed to such term in
the preamble hereto.
1.6 "ASSETS" shall mean any real, personal or other property,
whether tangible or intangible, acquired or owned by the Company at any time.
1.7 "AUTHORIZED PERSON" shall mean and refer to an authorized
agent of the Members, who is authorized under this Agreement to form the Company
under and pursuant to the Act by filing the Certificate on behalf of the Members
and to be an "authorized person" within the meaning of the Act, with the
authority upon approval by the managers to execute, deliver and file any
certificates (and amendments and restatements thereof) with the Delaware
Secretary of State.
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1.8 "BUSINESS" shall mean any electronic commerce relating to
any automotive-related product or service including, without limitation, the
sale or lease of any new or used vehicle, any related financing, insurance or
warranty product or service, and any after-market product or service.
1.9 "BUSINESS DAY" shall mean any day except Saturday, Sunday or
other day on which commercial banks located in California are authorized by law
to be closed for business.
1.10 "CAPITAL ACCOUNT" shall mean, with respect to each Member,
the account established for such Member on the books of the Company which shall
be (a) increased by (i) the total amount of money and Fair Market Value of
property contributed to the Company by such Member, and (ii) the amount of
Company income and gain attributable to and allocated to such Member pursuant to
this Agreement, and (b) decreased by (i) the amount of cash and the Fair Market
Value of property distributed by the Company to such Member (net of any
liability secured by such property that the Member is considered to assume or
take subject to pursuant to Section 752 of the Code) pursuant to Articles IX and
XIV hereof, and (ii) the amount of Company losses and deductions allocated to
such Member pursuant to this Agreement. Each Member's Capital Account shall be
maintained and adjusted in accordance with Treasury Regulation Sections
1.704-1(b) and 1.704-2.
1.11 "CAPITAL CONTRIBUTION" shall mean, with respect to any
Member, a contribution to the capital (whether in cash or otherwise) of the
Company made by such Member.
1.12 "CERTIFICATE" shall mean that certain Certificate of
Formation of the Company filed with the Office of the Secretary of State of the
State of Delaware, as the same may be amended from time to time.
1.13 "CODE" shall mean the Internal Revenue Code of 1986, as
amended, or any corresponding provision of any succeeding law.
1.14 "COMPANY" shall have the meaning ascribed to such term in
the recitals hereto.
1.15 "EXPIRATION DATE" shall mean the first to occur of (i) the
effective date of an IPO or (ii) excluding the sale and issuance by the Company
of Units prior to January 31, 2000, the effective date of any transaction, which
when aggregated with all other transactions, results in a sale, exchange or
other transfer of more than fifty (50%) percent of the Units for shares or other
interests in a publicly-traded entity that is not an Affiliate of any Member.
1.16 "FAIR MARKET VALUE" shall mean the commercially reasonable
value as determined by the board of managers and confirmed by independent
appraisal performed by an investment banking firm with international expertise
and reputation selected by ABT and consented
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to by the Members holding at least fifty (50%) percent of the total Non-ABT
Units, which consent shall not be unreasonably withheld.
1.17 "FISCAL YEAR" shall mean the twelve (12) month period
ending December 31.
1.18 "IPO" shall mean a public offering, which when aggregated
with all prior public offerings, constitutes an offering registered under the
Securities Act or other foreign securities laws of more than twenty (20%)
percent of the Units, excluding any registration of securities offered pursuant
to any employee benefit plan.
1.19 "MAJORITY IN INTEREST" shall mean any Member or group of
Members holding an aggregate of more than 50% of the total number of Units
outstanding.
1.20 "MEMBERS" shall mean GE, Inchcape, Pon, ABT and each Person
hereafter admitted to the Company as a Member as provided in this Agreement.
1.21 "MEMBER NONRECOURSE DEBT" shall have the meaning set forth
in Treasury Regulation Section 1.704-2(b)(4).
1.22 "MEMBER NONRECOURSE DEBT MINIMUM GAIN" shall mean an
amount, with respect to each Member Nonrecourse Debt, equal to Company Minimum
Gain that would result if such Member Nonrecourse Debt were treated as a
nonrecourse liability, determined in accordance with Treasury Regulation Section
1.704-2(i)(3).
1.23 "MEMBER NONRECOURSE DEDUCTIONS" shall have the meaning set
forth in Treasury Regulation Section 1.704-2(i).
1.24 "NASDAQ" shall mean the Nasdaq National Market System.
1.25 "NOC" shall mean any business operating in Europe which
licenses or sublicenses ABT's brand name, technology or business methodologies
and know-how.
1.26 "NON-ABT UNITS" shall mean Units owned or controlled by
Persons other than ABT or its Affiliates.
1.27 "OBSERVER" shall have the meaning ascribed to such term in
Section 4.1 hereof.
1.28 "ORIGINAL ELIGIBLE OWNER" shall mean each Member, other
than ABT, who becomes a Member and owns at least 10,000 Units of the Company on
January 31, 2000.
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1.29 "OWNERSHIP PERCENTAGE" shall mean, as to each Member, such
Member's allocable share of all income, gains, losses, deductions and credits of
the Company as set forth on SCHEDULE A hereto, as may be amended from time to
time hereafter.
1.30 "PERSON" shall mean and include an individual, a
corporation, a limited liability company, an association, a partnership, a joint
venture, a trust or estate, a government or any department or agency thereof, or
any other entity or governmental body.
1.31 "PROFIT OR LOSS" shall mean, for each Fiscal Year or
portion thereof, an amount equal to the Company's taxable income or loss for
such Fiscal Year or portion thereof, determined in accordance with Section
703(a) of the Code (for this purpose, all items of income, gain, loss, deduction
or credit required to be stated separately pursuant to Section 703(a)(1) of the
Code shall be included in taxable income or loss) with the following
adjustments:
(a) any income of the Company that is attributable to an
Asset and is exempt from federal income tax and not otherwise taken into account
in computing Profits or Losses pursuant to this definition of "Profits" or
"Losses" shall be added to such taxable income or loss;
(b) any expenditures of the Company that are described
in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i), and
not otherwise taken into account computing Profits or Losses pursuant to this
definition of "Profits" or "Losses," shall be subtracted from such taxable
income or loss;
(c) gain or loss resulting from any disposition of an
Asset with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the accounting book basis of the
property disposed of, notwithstanding that the adjusted tax basis of such
property differs from its accounting book basis;
(d) any increase or decrease to Assets as a result of
any adjustment to the accounting book basis of Company assets pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(f) shall be added to or subtracted
from, as the case may be, such taxable income or loss;
(e) in lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account depreciation for such Fiscal Year or
portion thereof, computed in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(g), if applicable; and
(f) any items specially allocated pursuant to Sections
10.2(b) and 10.3 hereof shall not be considered in determining Profit or Loss.
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If such Profit or Loss as calculated hereby is a positive number, it shall
sometimes be referred to herein as "Profit," and if such Profit or Loss as
calculated hereby is a negative number, it shall sometimes be referred to herein
as "Loss."
1.32 "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
1.33 "TAX MATTERS PARTNER" shall have the meaning ascribed to
such term in SECTION 11.4 hereof.
1.34 "TREASURY REGULATIONS" shall mean the income tax
regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
1.35 "UNITS" shall mean equal units of the entire ownership
interest of all Members of the Company, and all rights and liabilities
associated therewith, at any particular time, including, without limitation,
rights to distributions (liquidating or otherwise), allocations, information,
and consent or approval.
II. THE COMPANY
2.1 FORMATION OF THE COMPANY. ABT, as the initial Member, has
authorized the Authorized Person to act as organizer and to form the Company
under and pursuant to the Act by filing the Certificate on behalf of the
Members. This Agreement is subject to, and governed by, the Act and the
Certificate. In the event of a direct conflict between the provisions of this
Agreement and either the mandatory provisions of the Act or the Certificate,
such mandatory provisions of the Act or the Certificate (as the case may be)
will be controlling.
2.2 COMPANY NAME AND OFFICE. The name of the Company shall be
"Autobytel.Europe LLC." The Company shall maintain a registered office in
Delaware, and the name and address of the Company's registered agent in Delaware
is The Corporation Trust Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇. Such office and such agent may be changed from time to time by the board
of managers. If the registered agent is changed, the Certificate shall be
amended to reflect such change. The principal office of the Company is currently
located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, but may be
relocated to a different address by the board of managers. The Company may
maintain such additional offices as may be designated from time to time by the
board of managers for the purpose of carrying out the business of the Company.
2.3 PURPOSES OF THE COMPANY. The purpose of the Company shall be
to engage in all lawful activities (including, without limitation, entering
into, exercising the rights and enjoying the benefits of the Company under, and
discharging the obligations of the Company under, all lawful
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contracts, agreements and documents) that may be necessary, appropriate,
advisable or convenient to the Company.
2.4 TERM OF THE COMPANY. The term of the Company commenced on
the date of the filing of the Certificate as required by Section 18-201 of the
Act and shall continue in existence until the dissolution (and subsequent
termination of the Company after the winding up of its affairs) as provided in
this Agreement.
2.5 TITLE TO PROPERTY. Legal title to all Assets of the Company
shall be taken and at all times held in the name of the Company or any
subsidiary thereof. Attached hereto as Exhibit 1 is an Intercompany Software
License Agreement (the "LICENSE AGREEMENT"), between the Company and ABT dated
January 6, 2000.
III. CAPITAL CONTRIBUTIONS
3.1 INITIAL CAPITAL CONTRIBUTION On or prior to the date hereof,
each Member shall have contributed or cause to be contributed to the Company the
assets specified on Schedule A in exchange for a proportionate share of Units.
No interest shall be paid by the Company on any Capital Contribution. No Member
shall be entitled to withdraw from the Company, or demand the return of any part
of its Capital Contribution or any balance in its Capital Account, or to receive
any distribution, except in accordance with the terms of this Agreement.
3.2 NO FURTHER CONTRIBUTIONS OR LOANS. The liability of the
Members to the Company, in their capacity as Members, is limited to their
initial Capital Contributions made to the Company. Such initial Capital
Contributions constitute the only funds that the Members are required to furnish
to the Company, whether by way of contribution of capital, loan, or otherwise.
Unless agreed to by a Majority in Interest, the Members may not make any
additional Capital Contributions to the Company.
3.3 DILUTION. The initial Ownership Percentage of the Members is
set forth on Schedule A hereto. Upon (i) the admission of a new Member to the
Company, or (ii) the making of additional Capital Contributions to the Company
by an existing Member, the Ownership Percentages set forth on Schedule A hereto
shall be adjusted to reflect any decrease or increase in such Ownership
Percentages caused by such events.
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IV. VOTING AGREEMENT
4.1 BOARD OF MANAGERS OF THE COMPANY.
(a) Prior to the Expiration Date, the board of managers
shall be constituted as follows:
(i) ABT, so long as it, with its Affiliates,
owns (x) a Majority in Interest or (y) at least twice the number of Units held
by any other Member and at least thirty-three and one-third percent (331/3%) of
all Units, shall appoint that number of persons equal to one (1) more than a
majority of the managers of the Company at any given time;
(ii) each Original Eligible Owner shall appoint
one person as a manager of the Company; and
(iii) the Chief Executive Officer of the Company
shall serve as a manager of the Company. Initially, ABT will appoint ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and another individual as
managers, GE and Inchcape will each appoint an individual as a manager. ▇▇▇▇
▇▇▇▇▇▇▇ will serve initially as chairman of the board of managers.
Notwithstanding the foregoing:
(i) each Original Eligible Owner shall have the
option to appoint an observer ("Observer") in lieu of a manager who shall have
the right to receive all notices, information and other materials provided to
the board of managers and to participate in meetings of the board of managers,
but shall not have the right to vote on any matter as a manager;
(ii) the board of managers may revoke any
Original Eligible Owner's right to appoint a manager if such Member sells (other
than to an Affiliate thereof) more than 50% of the Units such Member was issued;
provided however, that the board of managers may not revoke the right of any
Original Eligible Owner that invested more than $15 million to appoint a manager
unless and until such Member sells more than 67% of the Units such Member was
issued; and
(iii) by unanimous vote of the managers
appointed by ABT and the Original Eligible Owners, the board of mangers may
increase the number of managers on the board beyond the number provided in the
foregoing sentence and appoint managers to fill the new positions.
(b) The presence, in person or by proxy, of a majority
of the managers shall constitute a quorum for the transaction of business by the
board of managers. At a meeting of
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the managers in which a quorum is present, the affirmative vote of a majority of
the managers present at the meeting, in person or by proxy, shall constitute a
valid decision of the board of managers.
(c) Except as provided in Section 4.1(d), the written
consent or vote of a majority of both (i) the ABT appointed managers and (ii)
the holders of Non-ABT Units (with each of clauses (i) and (ii) voting
separately) will be required for any decision with respect to:
(i) a material change to, or the Company's
termination of, the License Agreement;
(ii) the issuance of new Units of the Company if
such issuance would dilute the value of the Units (or other equity interests) of
any Member other than ABT or would create Units with rights that are superior in
any material respect to the rights of the Units of any existing Member;
(iii) the payment of any dividend or a change in
any dividend policy that results in any dividend being paid other than on a pro
rata basis;
(iv) any investment in a NOC in an amount
greater than $5 million in United States dollars;
(v) any expense greater than $200,000 in United
States dollars, other than an investment in a NOC or an expense for which an NOC
is obligated to reimburse the Company, where such expense aggregated with other
non-reimbursed expenses for that calendar year in that expense category exceeds
one hundred twenty-five (125%) of the annual budget for that expense category
previously approved by the board of managers;
(vi) any loan in an amount greater than ten
(10%) percent of the Company's gross revenues for the preceding twelve (12)
months;
(vii) any offering of Units pursuant to a
registration statement under the Securities Act of 1933 or the securities laws
of any jurisdiction in the European Community;
(viii) a sale or other disposition of (a) all or
substantially all of the assets of the Company or (b) a portion of the assets of
the Company at a price greater than $20 million in United States dollars;
(ix) a consolidation, reorganization or merger
of the Company with any other entity which would result in the Members
immediately prior to such consolidation, reorganization or merger owning less
than 50% of the resulting entity;
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(x) any other transaction between ABT or any of
its Affiliates controlled by ABT, other than Affiliates controlled by the
Company, and the Company, exclusive of the License Agreement, provided that the
vote of non-ABT appointed managers with regard to such transactions not be
unreasonably withheld; or
(xi) engaging in any business outside the scope
of the Business.
(d) Notwithstanding Section 4.1(c), the written consent
or vote of neither a majority of the ABT appointed managers, nor the holders of
Non-ABT Units, will be required for any decision concerning the Company's
acquisition of all or substantially all of the business of, or merger with,
Auto-By-Tel AB, a Sweedish corporation ("ABT AB"), provided, that (i) such
transaction is completed in the calendar year 2000, (ii) ABT AB has at least
$4.0 million in cash and $4.0 million in shareholders' equity on the closing
date of such transaction and (iii) no more than 16,500 Units are issued to ABT
AB as consideration for such acquisition or merger.
(e) Notwithstanding Section 4.1(b), any action by the
board of managers concerning the enforcement of a contract between the Company
and ABT shall be decided by a vote of a majority of the non-ABT appointed
managers.
4.2 MEMBER VOTING. The presence, in person or by proxy, of a
Majority in Interest shall constitute a quorum for the transaction of business
by the Members. Except as otherwise stated in this Agreement, the affirmative
vote or written consent of a Majority in Interest shall constitute a valid
decision of the Members.
4.3 VACANCIES/REMOVALS. Each Member shall have the right to
remove from the board of managers of the Company, with or without cause, any
person or persons appointed solely by such Member as a manager.
4.4 NO VOTING OR CONFLICTING AGREEMENTS. Each Member agrees that
it will not and will not permit any Affiliate to grant any proxy or enter into
or agree to be bound by any voting trust with respect to its Units or to enter
into any member agreements or arrangements of any kind with any Person with
respect to its Units in any such case in a manner that is inconsistent with the
provisions of this Agreement.
4.5 ACTIONS CONSISTENT WITH AGREEMENT. The managers and Members
shall not take any action inconsistent with the provisions of this Agreement.
4.6 AMENDMENTS TO ORGANIZATIONAL DOCUMENTS. Except as provided
in Section 4.1(c)(ii) hereof, each Member agrees to vote all of its Units in
favor of amending or changing this Agreement or the Certificate as may be
required, in the opinion of the board of managers, to consummate an initial
public offering.
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4.7 EXPIRATION OF RIGHTS. On and after the Expiration Date,
Sections 4.1(a) and (c), 4.4 and 4.6 shall expire and be of no further force and
effect and the Members shall elect not less than seven persons to serve as the
board of managers.
V. MANAGEMENT AND OPERATIONS OF THE COMPANY
5.1 MANAGEMENT GENERALLY. Subject to the provisions of this
Agreement and the Act, the business and affairs of the Company shall be managed
under the sole direction of the board of managers. All powers of the Company may
be exercised by the board of managers, except as conferred on or reserved to the
Members by the Act or this Agreement. The board of managers shall not, except by
a vote of Majority in Interest, take any action on behalf of or in the name of
the Company or enter into any commitment or obligation binding upon the Company,
except for actions authorized under or within the scope of the authority granted
to the board of managers pursuant to this Agreement and the Act.
5.2 MEETINGS OF THE BOARD OF MANAGERS. Meetings of the board of
managers shall be held quarterly or at such other time as the board of managers
may determine by vote of a majority of the managers. Meetings shall be held at
the principal place of business of the Company or at such other place as may be
designated in the notice or waivers of notice of such meeting as determined by
the board of managers. Notice of any meeting of the board of managers shall be
given no fewer than ten (10) Business Days and no more than twenty (20) Business
Days prior to the date of the meeting. The attendance of a manager at any
meeting shall constitute a waiver of notice of such meeting, except where a
manager attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Unless specifically prohibited by the Certificate or the Act, any
action required to be taken at a meeting of the board of managers, or any other
action which may be taken at a meeting of the board of managers, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by (i) the managers having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting if
five (5) days prior written notice of action to be taken by written consent was
delivered to all members of the board of managers or (ii) by all members of the
board of managers. Any such consent signed by the managers having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting shall have the same effect as if such action had been taken
at a duly called meeting of the managers and may be stated as such in any
document filed with the Secretary of State of the State of Delaware or with
anyone else. Any manager may participate in and act at any meeting through the
use of a conference telephone or other communications equipment by means of
which all persons participating in the meeting can hear and speak with each
other.
5.3 POWERS OF THE BOARD OF MANAGERS. Without in any way limiting
the generality of the foregoing, but subject to the express provisions of this
Agreement, the board of managers shall
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have, on behalf of the Company, all rights and powers that may be possessed by a
manager under the Act, to the extent granted by this Agreement, to manage and
administer the Company in accordance with the terms of this Agreement and to
perform all acts which it may, in its sole discretion, deem necessary or
desirable, including, but not limited to, the power to:
(a) Carry out all of the transactions contemplated
hereunder.
(b) Perform all acts, exercise all rights, and make all
decisions for and on behalf of the Company required or permitted to be taken by
the Company.
(c) Acquire, manage and dispose of any and all property,
real or personal, whether tangible or intangible, on behalf of the Company,
including through foreclosure or otherwise.
(d) Borrow money on behalf of the Company from any
Person (including, without limitation, from any Member or any Affiliate of any
Member) or cause the Company to lend money to any Person (including, without
limitation, to any Member or any Affiliate of any Member), and sell, assign,
exchange, transfer, pledge, grant a security interest in, or otherwise encumber
or dispose of, any and all of the Assets of any nature whatsoever.
(e) Compromise, arbitrate or otherwise adjust claims in
favor of or against the Company and initiate, prosecute and defend any
litigation relating to any Company business.
(f) Employ, engage, or subcontract with attorneys,
accountants, bookkeepers, underwriters, escrow agents, depositories, agents for
collection, banks, builders, and any other service provider as the board of
managers may determine to be appropriate, and to terminate the services of any
such entities, all at such time or times as the board of managers may determine.
(g) Negotiate, execute, deliver and perform any and all
contracts and other documents on behalf of the Company, including, but not
limited to, promissory notes, security agreements, contracts of purchase and
sale, deeds and assignments, and to take any and all other action, as the board
of managers deems appropriate, to effectuate any such transaction.
(h) Acquire and enter into any contract of insurance for
the Company that the board of managers deems necessary and proper for the
protection of the Company, either for the conservation of its Assets or for any
purpose convenient or beneficial to the Company.
(i) With reasonable notice and at a mutually agreed time
during regular business hours, to examine the Company's financial records,
including any NOC financial records in the possession of the Company, and
discuss the Company's accounting practices with its independent public
accountants.
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5.4 DUTIES AND OBLIGATIONS OF THE BOARD OF MANAGERS.
(a) The board of managers shall take all reasonable
action that may be necessary or appropriate for the continuation of the
Company's valid existence as a limited liability company under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Members or to enable the
Company to conduct the business in which it is engaged.
(b) The board of managers shall use its best efforts to
at all times conduct the affairs of the Company and its Affiliates in such a
manner that the Members shall limit their liability with respect to any Company
liability or obligation to their respective Capital Contributions.
5.5 NO COMPENSATION FOR THE BOARD OF MANAGERS. No manager shall
receive from the Company any cash or other compensation for the services he/she
shall provide to the Company for his/her services as manager under this
Agreement.
5.6 REIMBURSEMENT OF EXPENSES. Notwithstanding SECTION 5.5
above, each manager shall be entitled to reimbursement from the Company for the
reasonable expenses that he/she pays for or incurs directly on behalf of the
Company in his/her role as a manager.
5.7 OFFICERS. The officers of the Company shall consist of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as President, ▇▇▇▇▇ ▇▇▇▇ as Secretary, a Chief Executive
Officer to be appointed by the board of managers and such other officers as may
be designated by the board of managers. The officers shall be appointed by, and
shall exercise such powers and perform such duties as are prescribed by, the
board of managers. Each officer shall hold office for the term for which he or
she is appointed and until his or her successors are elected and qualified. The
Company may compensate each officer for such officer's services in such amounts
as are determined by the board of managers in its sole and absolute discretion.
The board of managers may remove any officer at any time, with or without cause.
VI. POWERS AND WARRANTIES OF THE MEMBERS;
ADMISSION OF NEW MEMBERS
6.1 POWERS OF THE MEMBERS. Except as expressly provided in this
Agreement, the Members shall take no part in the management of the business or
transact any business for the Company and shall have no power to sign for or
bind the Company solely in their capacity as Members; provided, however, that
the Members shall have the approval and consent rights provided under the Act
and this Agreement.
6.2 MEETINGS OF MEMBERS. A meeting of the Members may be called
by (i) the holders of at least thirty-three percent (33%) of the Units, except
as otherwise provided by the Act,
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(ii) a majority of the managers, (iii) the President of the Company or (iv) two
(2) or more Original Eligible Owners who in the aggregate own at least twenty
(20%) percent of the Units. Meetings shall be held at the principal place of
business of the Company or at such other place as may be designated in the
notice or waivers of notice of such meeting as determined by the Members. Notice
of any meeting of the Members shall be given no fewer than ten (10) Business
Days and no more than twenty (20) Business Days prior to the date of the
meeting. The attendance of any Member at any meeting shall constitute a waiver
of notice of such meeting, except where such Member attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Unless specifically prohibited by
the Certificate or the Act, any action required to be taken at a meeting of the
Members, or any other action which may be taken at a meeting of the Members, may
be taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by (i) holders of Units having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which the holders of all the Interests were present and voting if
five (5) days prior written notice of action to be taken was delivered to all
Members or (ii) by all of the Members. Any such consent shall have the same
effect as if such action had been taken at a duly called meeting of the Members
and may be stated as such in any document filed with the Secretary of State of
the State of Delaware or with anyone else. Any Member may participate in and act
at any meeting through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other.
6.3 EXAMINATION OF COMPANY RECORDS. Each Member or its
representative may, during regular business hours, examine and copy (at such
Member's expense) the minutes of the meetings of Members or the board of
managers and the list of Members (where such records are maintained) of the
Company.
6.4 ADMISSION OF NEW MEMBERS. Except as provided in Section
4.1(b)(ii) hereof, the Company, with the approval of the board of managers may,
admit additional Persons to the Company as Members from time to time and create
and sell and issue Units to those Persons without approval of the existing
Members. Any new Member, prior to its admission as a Member, shall be required
to execute this Agreement or a counterpart to this Agreement, which evidences
such new Member's agreement to be bound to the terms and conditions of this
Agreement.
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VII. RIGHTS AND RESTRICTIONS ON TRANSFERS BY THE MEMBERS
7.1 RESTRICTIONS ON TRANSFERS GENERALLY. Each Member hereby
agrees that such Member shall not, and shall not permit any of its Affiliates
to, directly or indirectly, sell, transfer or otherwise dispose of all or any
part of its Units except: (i) pursuant to the terms and conditions of this
Article VII; (ii) pursuant to an exemption from registration under the
Securities Act and any state securities or blue sky laws; (iii) if the
transferee agrees in writing to be bound by the terms hereof and be deemed to be
a Member under this Agreement; (iv) after the third anniversary of the date of
this Agreement, provided, however, that prior thereto a Member may transfer all
or any part of its Units by offering its Units to each other Member on a
pro-rata basis, based on the percentage of Units owned by each Member electing
to participate in the purchase of such Units; and (v) if to any Person or
Affiliate of any Person that is in competition with ABT, the Company or any
Affiliate of ABT or the Company, with the written consent of ABT.
7.2 RIGHT OF FIRST OFFER.
(a) If a Member desires to sell, transfer or otherwise
dispose of any of its Units (other than to an Affiliate thereof), the Member
(the "SELLER") shall first deliver a written notice to each other Member of such
proposed sale, transfer or other disposition (the "FIRST OFFER NOTICE"). The
First Offer Notice shall contain (i) the proposed purchase price, (ii) the
number of Units proposed to be sold or transferred and (iii) the terms of
payment and other material terms and conditions of the Seller's offer.
(b) Each Member shall have the right, exercisable upon
written notice to the Seller within fifteen (15) days after receipt of the First
Offer Notice, to either: (i) purchase, on the terms and conditions as set forth
in the First Offer Notice all, but not less than all, of the Units that is the
subject of the First Offer Notice on a pro rata basis based on the percentage of
Units owned by each Member electing to participate in the right of first offer
(the "FIRST PURCHASE RIGHT") or (ii) notify the Seller in writing of a price per
share (the "MEMBER STATED PRICE") at which such Member would be willing to
purchase the number of Units specified in the First Offer Notice on the terms
and conditions as set forth in the First Offer Notice other than price (the
"ALTERNATIVE MEMBER OFFER") at the Member Stated Price included in such
Alternative Member Offer. Each Member electing to exercise the First Purchase
Right shall notify the Seller in writing of such election (the "NOTICE OF FIRST
OFFER ACCEPTANCE") and shall complete the First Purchase Right within sixty (60)
days after delivery of the Notice of First Offer Acceptance.
(c) If no Member elects to exercise the First Purchase
Right pursuant to Section 7.2(b) above, the Seller may, not later than one
hundred twenty (120) days following the expiration of the Members' First
Purchase Rights, transfer the Units that were the subject of the First Offer
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Notice on substantially the same terms and conditions as those described in the
First Offer Notice other than price to either (i) the Member that delivered the
Alternative Member Offer with the highest Member Stated Price (an "ALTERNATIVE
MEMBER OFFER SALE") at the Member Stated Price included in such Alternative
Member Offer or (ii) to a third party at a price per share that is at least ten
percent (10%) greater than the highest Member Stated Price, if any (a "PERMITTED
THIRD PARTY SALE"); provided, however, that ABT and its Affiliates must also
comply with the terms of Section 7.3 before transferring Units pursuant to a
Permitted Third Party Sale. Any proposed transfer on terms and conditions
materially different or at a lower price than one hundred ten percent (110%) of
the highest Member Stated Price, as well as any proposed transfer more than one
hundred twenty (120) days following the expiration of the First Purchase Right,
shall again be subject to the First Purchase Right of the other Members as set
forth in this Section 7.2 and shall require compliance with the procedures as
described in this Section 7.2.
7.3 TAG ALONG RIGHT.
(a) If a Permitted Third Party Sale would cause ABT and
its Affiliates (the "SELLING MEMBER") collectively to own less than a Majority
in Interest, then prior to transferring such Units pursuant to such Permitted
Third Party Sale, the Selling Member shall notify each other Member in writing
(the "TAG ALONG NOTICE") of such proposed transfer identifying (i) the name and
address of the proposed buyer and (ii) the proposed purchase price, the terms of
payment and other material terms and conditions of the proposed buyer's offer.
Within fifteen (15) days of receipt of a Tag Along Notice, each Member shall
notify (the "TAG ALONG ELECTION NOTICE") the Selling Member if it elects to
participate in such transfer (the "TAG ALONG RIGHT") and shall state the number
of its Units that such Member desires to sell. Each Member electing to
participate in the Tag Along Right (a "TAG ALONG MEMBER") may elect to sell up
to such number of Units as is equal to the total number of Units held by such
Tag Along Member multiplied by a fraction, the numerator of which shall be the
number of Units proposed to be sold by such Selling Member and the denominator
of which shall be the aggregate number of Units held by such Selling Member.
Each Tag Along Member shall have the right and be obligated to (i) sell to the
proposed buyer, at the same price and on the same terms as the Selling Member,
the number of Units stated in its Tag Along Election Notice and (ii) enter into
a purchase agreement substantially similar in form and substance to the purchase
agreement the Selling Member executes. The number of Units that the Selling
Member may sell will be reduced by the number of Units sold b(a)aby the Tag
Along Members.
(b) In the event that the proposed buyer does not
purchase the portion of the Units that the Tag Along Member elects to sell
pursuant to the foregoing on the same terms and conditions as the Units
purchased from the Selling Member, then the Selling Member shall not be
permitted to sell any Units to the proposed buyer. If no Tag Along Election
Notice is received within fifteen (15) days of the receipt of the Tag Along
Notice, the Selling Member shall have the right for a period of one hundred
twenty (120) days thereafter to transfer the Units to the proposed buyer on
terms and conditions no more favorable to the Selling Member than those stated
in the Tag Along Notice.
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7.4 DRAG ALONG RIGHT.
(a) If ABT and its Affiliates propose to sell in a bona
fide arm's length Permitted Third Party Sale or an Alternative Member Offer Sale
all Units collectively owned by ABT and its Affiliates (the "TRANSFERRING
MEMBER") to any Person or Persons who are not Affiliates of ABT and in which ABT
does not have a five (5%) percent or greater equity interest in (the "PROPOSED
TRANSFEREE"), the Transferring Member shall have the right (the "DRAG ALONG
RIGHT"), subject to applicable law and compliance with any other restrictions
applicable to such transfer, to require all Members to sell all Units then held
by the other Members to the Proposed Transferee, on the same terms and
conditions as are applicable to the Transferring Member.
(b) The Drag Along Right may be exercised only after the
third anniversary of this Agreement, and if prior to the Expiration Date, only
with the written consent of a majority of Non-ABT Units.
(c) To exercise a Drag Along Right, the Transferring
Member shall give each Member (each, a "DRAG ALONG MEMBER"), at least fifteen
(15) days prior to the proposed transfer to the Proposed Transferee, a written
notice (the "DRAG ALONG NOTICE") containing (i) the name and address of the
Proposed Transferee and (ii) the proposed purchase price, the terms of payment
and other material terms and conditions of the Proposed Transferee's offer. Each
Drag Along Member shall thereafter be obligated to (i) sell to the Proposed
Transferee all Units owned by such Drag Along Member and (ii) enter into a
purchase agreement on the same economic terms and substantially similar in form
and substance to the purchase agreement the Transferring Member executes;
provided, however, that in no event shall the purchase agreement provide for an
indemnity payable by a Drag Along Member greater than the proceeds received by
that Drag Along Member from the Proposed Transferee. If the sale is not
consummated within a period of one hundred twenty (120) days following the date
of the Drag Along Notice, then each Drag Along Member shall no longer be
obligated to sell such Member's Units pursuant to such Drag Along Right but
shall remain subject to the provisions of this Section 7.4 with respect to any
subsequent proposed transfer described in this Section 7.4.
7.5 TRANSFERS TO AFFILIATES. Notwithstanding anything to the
contrary contained in this ARTICLE VII, any Member ("TRANSFEROR") may transfer
any or all of its Units to an Affiliate (each a "PERMITTED TRANSFEREE"),
provided, however, that in each case such transfer shall be subject to the
Transferor and Permitted Transferee agreeing in writing, for the benefit of the
Company and the other Members (who shall be third party beneficiaries of such
agreement) that the Transferor will repurchase such Units in the event such
Permitted Transferee ceases to be an Affiliate; and provided, further, that the
Permitted Transferee may only transfer its Units to the Transferor from whom it
received such Units or any of such Transferor's Permitted Transferees or
otherwise in accordance with the terms hereof.
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7.6 TRANSFER BY ABT TO PON. Notwithstanding anything to the
contrary contained in this ARTICLE VII, ABT may transfer up to 1,300 Units to
Pon within six (6) months after the date of this Agreement.
7.7 TRANSFEREES SUBJECT TO AGREEMENT. Any transferor of any
Units shall, as a condition of the consummation of such transfer, sale or other
disposition, require the transferee to agree in writing to be subject to and
bound by the terms of this Agreement as a Member under this Agreement (it being
understood that the transferee shall be subject to the obligations of the
transferor but shall not be entitled to the rights of the transferor unless the
transferor expressly assigns such rights and, with respect to which, if
assigned, the transferor shall cease to be entitled, to the extent of such
assignment). Any transfer made in violation of this Section 7.7 shall be null
and void.
7.8 EXCHANGE RIGHTS.
(a) ABT shall have the right to exchange shares of its
common stock or pay cash, or any combination thereof, for all or any portion of
the Units held by any Member that is not an Original Eligible Owner (the
"EXCHANGE RIGHTS"); provided, however, that within one hundred twenty (120) days
of the Exchange Rights Notice (as defined below), ABT shall file a registration
statement with the United States Securities and Exchange Commission (the "SEC")
to register under the Securities Act any ABT common stock that has been
exchanged pursuant to this Section 7.8. The Company will use its commercially
reasonable best efforts to have such registration statement declared effective
by the SEC as soon thereafter as possible. The Exchange Rights may be exercised
multiple times with respect to the Units of one or more Members, but may not be
exercised prior to the second anniversary date of the effective date of this
Agreement.
(b) To exercise any Exchange Rights, ABT shall give the
relevant Member (each an "EXCHANGE RIGHTS MEMBER") a written notice of ABT's
exercise of the Exchange Rights (the "EXCHANGE RIGHTS NOTICE") stating (i) the
Fair Market Value of the Units of the Exchange Rights and (ii) the number of
shares of ABT common stock and/or the amount of cash to be paid. The value of
ABT common stock shall be based on the ten (10) day average price of ABT common
stock as quoted on NASDAQ immediately prior to the date of delivery of the
Exchange Rights Notice.
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7.9 PARTICIPATION RIGHTS.
(a) Except with respect to (i) a registration relating
solely to employee benefit plans, (ii) a registration relating solely to a
transaction pursuant to Rule 145 of the Securities Act, or (iii) an initial
public offering, if at any time the Company determines to register under the
Securities Act any of its Units in an offering in the United States or any
jurisdiction in Europe and if at such time any Member is not able to transfer or
sell its Units without registration by the Company due to restrictions placed on
such transfer or sale by the securities laws of that jurisdiction (a "Restricted
Member"), the Company will:
(i) give each Restricted Member 20 days prior
written notice of such registration (a "Registration Notice"); and
(ii) include in such registration (and any
related qualification under blue sky laws or other compliance requirement), and
in any underwriting involved therein, all the Units specified in a written
request received by the Company within 15 days after the Company's delivery of
the Registration Notice.
(b) If the registration of which the Company gives
notice is for an offering involving an underwriting, the Company shall so advise
the Restricted Members as part of the Registration Notice. In such event, the
right of any Restricted Member to participate in the registration will be
conditioned upon the Restricted Member's participation in such underwriting and
the inclusion of such Restricted Member's Units in the underwriting to the
extent provided herein. All Restricted Members proposing to distribute their
securities through such underwriting shall (together with the Company) enter
into an underwriting agreement in customary form with the managing underwriter
selected by the Company; provided, however, that in no event shall the
underwriting agreement provide for an indemnity payable by a Restricted Member
greater than the proceeds received by that Restricted Member from the offering.
(c) Notwithstanding any other provision of this Section
7.9, if the managing underwriter determines that marketing factors require
limitation of the number of Units to be underwritten, the managing underwriter
may exclude some or all Units requested to be included in such registration by
the Restricted Members. In the event the managing underwriter determines to
exclude some or all Units, the number of Units held by Restricted Members that
may be included in the registration and underwriting shall be allocated among
all Restricted Members who have requested to be included in the registration in
proportion, as nearly as practicable, to the respective amounts of Units held by
all such requesting Restricted Members at the time of the registration.
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7.10 PREEMPTIVE RIGHTS.
(a) If at any time the Company determines to issue
additional Units (or other equity interests) in the Company, exclusive of the
Company's issuance to Pon of up to six thousand seven hundred (6,700) Units at
no less than ONE THOUSAND DOLLARS ($1,000) per Unit on or prior to January 31,
2000, to any Member (the "PURCHASING MEMBER") it shall deliver a written notice
to each other Member of such proposed issuance (the "PREEMPTIVE NOTICE"). The
Preemptive Notice shall contain (i) the proposed issuance price, (ii) the total
number of Units proposed to be issued, (iii) the identity of the Purchasing
Member, and (iv) any other material terms and conditions of the issuance.
(b) Each other Member shall have the right, exercisable
upon written notice to the Company within fifteen (15) days after receipt of the
Preemptive Notice (the "PREEMPTIVE RIGHTS NOTICE PERIOD"), to purchase, on the
terms and conditions as set forth in the Preemptive Notice the Units (or other
equity interests) proposed to be issued on a pro rata basis based on the
percentage of Units owned by each other Member electing to participate in the
preemptive right (the "PREEMPTIVE RIGHT"). Any and all Members electing to
exercise the Preemptive Right within the Preemptive Rights Notice Period shall
enter into a purchase agreement with the Company and the Purchasing Member
within sixty (60) days following the date of the Preemptive Notice on
substantially similar terms and conditions as described in the Preemptive
Notice.
(c) If no other Member exercises the Preemptive Right
within the Preemptive Rights Notice Period, the Company may, not later than
sixty (60) days following expiration of the Preemptive Rights, conclude the
issuance of Units (or other equity interests) to the Purchasing Member on the
same economic terms and substantially the same terms and conditions as described
in the Preemptive Notice. Any proposed issuance of Units (or other equity
interests) to a Purchasing Member on terms and conditions materially different
from those described in the Preemptive Notice or any proposed issuance more than
sixty (60) days following the expiration of the Preemptive Right, shall again be
subject to the Preemptive Right of the other Members as set forth in this
Section 7.10 and shall require compliance with the procedures as described in
this Section 7.10.
7.11 EXPIRATION OF RIGHTS AND RESTRICTIONS. The provisions set
forth in Article VII hereof, shall expire and be of no further force and effect
on and after the Expiration Date to the extent permitted by law, except that the
provisions of Sections 7.2, 7.3, 7.4, 7.8 and 7.9 shall survive the Expiration
Date. In addition, the rights under Sections 7.2, 7.3, 7.8, 7.9 and 7.10 shall
expire and be of no further force and effect as to each Member on the date such
Member sells, transfers or otherwise disposes, other than to an Affiliate of
such Member, of more than:
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(a) twenty (20%) percent of the aggregate number of
Units it was issued, if the aggregate Capital Contribution it made was less than
$5 million;
(b) thirty (30%) percent of the aggregate number of
Units it was issued, if the aggregate Capital Contribution it made was $5
million or more but less than $10 million;
(c) forty (40%) percent of the aggregate number of Units
it was issued, if the aggregate Capital Contribution it made was $10 million or
more but less than $15 million; or
(d) sixty (60%) percent of the aggregate number of Units
it was issued, if the aggregate Capital Contribution it made was $15 million or
more.
7.12 ABT OWNERSHIP. Without the prior written consent of ABT,
the Company shall not issue Units to cause ABT to own less than fifty-five
percent (55%) of all Units.
7.13 REDEMPTION RIGHT.
(a) Each Original Eligible Owner may elect to redeem its
Units at the price it paid for such Units pursuant to the procedure set forth in
Section 7.13(b) if (i) there has been a change of control (as defined in Section
7.13(c)) of ABT and (ii) there has not been an IPO of the Company prior to the
third anniversary of the date of this Agreement.
(b) In order to exercise its redemption right described
in Section 7.13(a) above, an Original Eligible Owner must give written notice of
that election to the Company within five (5) days after the third anniversary of
the date of this Agreement. If the Company receives proper notice of an Original
Eligible Owner's election to redeem its Units, the Company shall redeem such
Units within eighteen (18) months of receiving such notice.
(c) As used in Section 7.13(a), a "change of control"
shall occur if more than fifty (50) percent of ABT's outstanding shares are
owned, acquired by, sold, or otherwise transferred to any person or group within
the meaning of Section 13(d) of the Securities Exchange Act of 1934, excluding
GE and any Affiliates thereof, within two years after the date of this
Agreement.
VIII. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 MEMBER REPRESENTATION. As of the date hereof, each Member
represents, warrants and covenants as to itself to the Company as follows:
(a) No Other Agreement Concerning Units. It is not,
after giving effect to the transactions occurring on or as of the date hereof, a
party to any other agreement with respect
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to the holding, voting, acquisition or disposition of any Units, except as
contemplated by this Agreement;
(b) Experience; Risk. It has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the purchase of the Units pursuant to this Agreement and
of protecting its interests in connection herewith. It has the ability to bear
the economic risk of the investment, including complete loss of the investment.
It is experienced in evaluating and investing in new companies such as the
Company;
(c) Investment. It is acquiring the Units for its own
account, not as a nominee or agent, and not with a view to, or for resale in
connection with, any distribution thereof, and it has no present intention of
selling, granting any participation in, or otherwise distributing the same. It
understands that the Units have not been registered under the Securities Act by
reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of its representations as expressed
herein;
(d) Restricted Securities. It understands and
acknowledges that the Units are characterized as "restricted securities" under
United States federal securities laws inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under such
laws and applicable regulations the Units may be resold without registration
under the Securities Act or other applicable foreign securities laws only in
certain limited circumstances. It acknowledges that the Units must be held
indefinitely unless subsequently registered under the Securities Act or other
applicable foreign securities laws or an exemption from such registration is
available;
(e) No Public Market. It understands and acknowledges
that no public market now exists for any of the securities issued by the Company
and that there can be no assurance that a public market will ever exist for the
Units;
(f) Authorization. It has the full right, power and
authority to enter into and perform its obligations under this Agreement and,
when executed and delivered by it, this Agreement will constitute its valid and
binding obligation, enforceable in accordance with its terms, subject to the
laws of general application relating to bankruptcy, insolvency and the relief of
debtors, rules of law governing specific performance, injunctive relief and
other equitable remedies;
(g) Government Consents. No consent, approval or
authorization of or designation, declaration or filing with any state, federal,
or any foreign governmental authority on the part of the Member is required in
connection with the valid execution and delivery of this Agreement by the
Member, and the consummation by the Member of the transactions contemplated
hereby;
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(h) Legends. It is understood that each certificate
representing the Units and any securities issued in respect thereof or exchange
therefor shall bear the legends below in substantially the following form (in
addition to any legend required under applicable securities laws).
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "ACT"). NO SALE OR DISPOSITION OF THESE SECURITIES MAY
BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR
RECEIPT OF A NO ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO, AND
MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH AN AGREEMENT AMONG THE
COMPANY AND THE HOLDER OF THESE SECURITIES AND CERTAIN OTHER
HOLDERS OF THE COMPANY'S SECURITIES, A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL OFFICE OF THE COMPANY.
(i) Accredited Investor Status. It presently
qualifies as an "accredited investor" within the meaning of Regulation D (17
C.F.R. 230.501) of the rules and regulations promulgated under the Securities
Act;
(j) Brokers or Finders. It has not incurred, and will
not incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or any similar charges in connection with this Agreement
or any transaction contemplated hereby;
(k) Market Standoff. It agrees that if so requested by
the Company or any representative of the underwriters in connection with
registration of the initial public offering or any secondary offering of any
securities of the Company under the Securities Act or under applicable foreign
securities laws, it shall not sell or otherwise transfer any Units or other
securities of the Company during the 180 day period following the effective date
of such registration statement or other applicable document so long as at least
ninety percent (90%) of all non-ABT Members are similarly restricted. The
Company may impose stop transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such 180 day period; and
(l) Access to Information. It has had the opportunity to
ask questions of, and to receive answers from, appropriate executive officers of
the Company with respect to the terms and conditions of the transactions
contemplated hereby and with respect to the business, affairs, financial
condition and results of operations of the Company. It has had access to such
financial and other information as is necessary in order for it to make a fully
informed decision as to investment
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in the Company, and has had the opportunity to obtain any additional information
necessary to verify any of such information to which it has had access;
8.2 COMPANY REPRESENTATION. As of the date hereof, the Company
represents, warrants and covenants to each Member as follows:
(a) No Other Agreement Concerning Units. Except for this
Agreement, the Company is not a party to any other agreement with respect to the
holding, voting, acquisition or disposition of any Units;
(b) Valid Issuance. The Units when issued in accordance
with the provisions of this Agreement will be validly issued, fully paid and
nonassessable Units of the Company; provided, however, that such Units may be
subject to restrictions on transfer under United States' state and/or federal
securities laws or other foreign securities laws as set forth herein;
(c) Governmental Consent, etc. No consent, approval or
authorization of or designation, declaration or filing with any state or federal
governmental authority on the part of the Company is required in connection with
the valid offer, sale or issuance of the Units, except the qualification under
the California Corporate Securities Law or other applicable state securities
laws, of the offer and sale of the Units, which filing and qualification, if
required, will be effected in a timely manner
(d) Brokers and Finders. The Company has not incurred,
and will not incur, directly or indirectly, any liability for brokerage or
finders' fees or agents' commissions or any similar charges in connection with
this Agreement or any transactions contemplated hereby;
(e) Authorization. The Company has the full right, power
and authority to enter into and perform its obligations under this Agreement
and, when executed and delivered by it, this Agreement will constitute its valid
and binding obligation, enforceable in accordance with its terms, subject to the
laws of general application relating to bankruptcy, insolvency and the relief of
debtors, rules of law governing specific performance, injunctive relief and
other equitable remedies;
(f) Financial Statements. The Company shall maintain,
for each quarter and each fiscal year, statements of income, stockholder's
equity, cash flow and balance sheets of the Company setting forth, in each case,
in comparative form, corresponding consolidated figures from the preceding
fiscal year or corresponding quarter of the preceding fiscal year, as
applicable, all in accordance with generally accepted accounting principles
("GAAP"); and
(g) No Conflicts. Neither the execution and delivery by
the Company of this Agreement nor the consummation of the transactions
contemplated hereby will conflict with or
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result in a breach in any material respect of any agreement or instrument to
which the Company is a party.
(h) Legal Opinion. There shall have been delivered to
each Original Eligible Owner an opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
LLP, counsel to the Company, in substantially the form attached hereto as
Exhibit 2.
(i) Compliance with Law and Regulation. The Company is
and will continue to be in compliance with all applicable laws, statutes,
ordinances, regulations, rules, and other requirements imposed by any United
States federal, state, or local governmental authority ("Governmental
Authority") which could have a material adverse affect on the Company. The
Company has not received any written notice to the effect, or has otherwise been
advised, that it is not in compliance with any of such laws, statutes,
ordinances, regulations, rules or other requirements imposed by an Governmental
Authority.
8.3 NON-SOLICITATION; NON-HIRE. Each Member other than ABT, for
so long as such Member holds the largest equity interest in any NOC and for one
year thereafter, agrees not to directly or indirectly, on its own behalf or on
behalf of or in conjunction with any Person, recruit, solicit, or induce or
attempt to recruit, solicit, hire or induce any employee of the Company, ABT,
any NOC or any subsidiary of the Company, ABT or any NOC (or any Person who was
an employee of the Company, ABT, any NOC or any subsidiary of the Company, ABT
or any NOC within twelve (12) months of the date of solicitation) to become
employed by or to be engaged in a business which is competitive or may be
competitive with the Company, ABT, any NOC or any subsidiary of the Company, ABT
or any NOC.
8.4 DISCLOSURE OF MEMBER IDENTITY. The Company and the Members
will not disclose the terms and conditions of each Member's investment in the
Company without the prior written consent of the affected Member; provided,
however, that the Company and any Member may disclose (i) the name of each
Member to the public, (ii) the terms and conditions of any Member's investment
in the Company to its Affiliates or any other potential Member, and (iii) any
information to the extent required by law.
8.5 ANNUAL BUDGET. By December 31 of each year, the Chief
Executive Officer of the Company shall propose and the board of managers shall
approve an annual budget detailing the expenses of the Company for the following
year.
8.6 IPO INTENT. The Members and the Company currently
contemplate that it is in the best interest of the Company to have an IPO of the
equity of the Company within the next three (3) years, and the parties agree in
good faith to consider proposals for such IPO.
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8.7 INSURANCE. The Company shall maintain insurance covering
actions and omissions by the officers and directors of the Company pursuant to
customary terms approved by the board of managers, to the extent such insurance
is available to the Company.
8.8 RIGHT TO OFFER PRODUCTS AND SERVICES TO NOCS.
(a) The Company shall include a provision in each
license agreement or other agreement between the Company and each NOC (other
than NOCs in the United Kingdom, Sweden, Norway, Denmark and Finland in respect
to which the Company shall use commercially reasonable efforts to accomplish the
following) that each Original Eligible Owner will have the right to offer
automotive-related products and services on the website of each NOC, on a
nonexclusive arm's length commercial basis provided that:
(i) the entity selling such products or services
is an Original Eligible Owner or a bona fide Affiliate thereof;
(ii) an Original Eligible Owner may nominate
only one entity to offer such products and services per country or territory for
such preferred access;
(iii) the offered products or services will not
include the sale or lease of new or used vehicles or detract from the
functionality or user friendliness of the website; and
(iv) the terms and conditions for each NOC will
be substantially the same as those offered other entities providing similar
products or services on such NOC website.
(b) Should the Company either directly or indirectly
(other than through NOCs) operate websites in Europe, then each Original
Eligible Owner will have the right to offer automotive-related products and
services on such websites pursuant to the terms and conditions set out in
SECTION 8.8(A) above.
IX. DISTRIBUTIONS
9.1 DISTRIBUTIONS. Except as provided in SECTION 14.3 hereof, in
connection with the dissolution and liquidation of the Company, the Company
shall make distributions to the Members, in accordance with, and in proportion
to, their respective Ownership Percentages, out of the available net cash flow
(after the establishment of reserves under SECTION 9.2 hereof) within three (3)
months after the end of each calendar year, unless the board of managers
determines, in its sole and absolute discretion, otherwise. Notwithstanding
anything in this Agreement to the contrary, neither the Company nor any person
on behalf of the Company shall make any distributions except to the extent
permitted under the Act or other applicable law.
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9.2 ESTABLISHMENT OF RESERVES. Notwithstanding anything to the
contrary in SECTION 9.1 hereof, the board of managers may retain an amount of
cash it deems reasonably necessary to satisfy the obligations of the Company on
an annual net operating basis including, without limitation, debt payments,
legal fees and expenses, audit costs and unforeseen contingencies. Other Company
funds that the board of managers determines are not needed for Company reserves
or operations shall be distributed to the Members from time to time in the board
of managers' sole and absolute discretion in accordance with SECTION 9.1 hereof.
9.3 LIQUIDATING DISTRIBUTIONS. Notwithstanding SECTIONS 9.1 and
9.2 hereof, cash or other property of the Company available for distribution
upon the dissolution and liquidation of the Company (including cash received
upon the sale or other disposition of the Assets in anticipation of
liquidation), shall be distributed as provided in accordance with the provisions
of SECTION 14.3 hereof.
X. MAINTENANCE OF CAPITAL ACCOUNTS; ALLOCATIONS
10.1 ALLOCATIONS OF PROFIT OR LOSS.
(a) Profit. The Company shall establish for each Member
on the books of the Company a Capital Account. For each Fiscal Year or portion
thereof, Profit shall be allocated among the Members (after giving effect to the
allocations contained in Sections 10.2 and 10.3) first in the proportion and to
the extent that Losses have been allocated to the Members pursuant to Section
10.1(b)(i); and thereafter to the Members in accordance with their respective
Ownership Percentages.
(b) Losses. The Company shall allocate Losses.
(i) first, to the Members, other than ABT, to
the extent of and in accordance with their respective positive Capital Account
balance; and
(ii) thereafter, to the Members in accordance
with their respective Ownership Percentages.
(c) Notwithstanding the foregoing, except in connection
with a sale or disposition of the ABT Contribution, any Profit or Loss
attributable to any appreciation or depreciation in the ABT Contribution shall
be allocated to ABT; provided, however, that for purposes of this Section
10.1(c), a disposition or sale of the ABT Contribution shall not include an
assignment of any such Assets to ABT.
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10.2 TAX ALLOCATIONS; CERTAIN BOOK/TAX DIFFERENCES.
(a) All items of income, gain, loss, deduction and
credit shall be allocated in the manner that the corresponding item of Profit or
Loss was allocated pursuant to Section 10.1.
(b) In accordance with Section 704(c) of the Code and
the applicable Treasury Regulations thereunder, income, gain, loss, deduction
and tax depreciation with respect to any Asset contributed to the capital of the
Company or otherwise revalued on the books of the Company shall, solely for
income tax purposes, be allocated among the Members so as to take into account
any variation between the adjusted tax basis of such property to the Company and
the fair market value of such property as determined at the time of the
contribution or revaluation. In addition, the board of managers, in its sole
discretion, may make, or not make, "curative" or "remedial" allocations (within
the meaning of the Treasury Regulations under Section 704(c) of the Code) in any
manner that reasonably reflects the purpose and intention of this Agreement,
including (i) "curative" allocations which offset the effect of the "ceiling
rule" for a prior taxable year (within the meaning of Treasury Regulation
Section 1.704-3(c)(3)(ii)) and (ii) "curative" allocations from the disposition
of contributed property (within the meaning of Treasury Regulation Section
1.704-3(c)(3)(iii)(B)). The foregoing allocations made pursuant to this Section
10.2(b) shall be as determined by the board of managers in accordance with any
permissible method under Section 704(c) of the Code and any applicable Treasury
Regulations thereunder.
10.3 SPECIAL ALLOCATIONS. The following special allocations
shall be made in the following order of priority:
(a) Minimum Gain Chargeback. Except as otherwise
provided in Treasury Regulations Section 1.704-2(f), notwithstanding any other
provision of this Article X, if there is a net decrease in Company Minimum Gain
during any Fiscal Year, each Member shall be specially allocated items of
Company income and gain for such period in proportion to and to the extent of an
amount equal to the portion of such Member's share of the net decrease in
Company Minimum Gain, determined in accordance with Treasury Regulations
Sections 1.704-2(f) and 2(g). The items so allocated shall be determined in
accordance with Treasury Regulation Sections 1.704-2(f)(6) and 1.704-2(j)(2).
This Section 10.3(a) is intended to comply with the minimum gain chargeback
requirement in Treasury Regulation Section 1.704(f) and shall be interpreted
consistently therewith.
(b) Qualified Income Offset. If any Member unexpectedly
receives an adjustment, allocation or distribution described in Treasury
Regulation Section 1.704-l(b)(2)(ii)(d)(4), (5) or (6), items of Company income
and gain shall be specially allocated to such Member in an amount and manner
sufficient to eliminate, to the extent required by Treasury Regulation Section
1.704-1(b)(2)(ii)(d), the Adjusted Capital Account Deficit of such Member as
quickly as possible, provided that an allocation pursuant to this Section
10.3(b) shall be made only
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if and to the extent that such Member would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Article X have been
tentatively made as if this Section 10.3(b) were not in this Agreement. This
Section 10.3(b) is intended to comply with the "qualified income offset"
provision of such Treasury Regulation Section and shall be interpreted
consistent therewith.
(c) Special Income Allocation. In the event any Member
has a deficit Capital Account balance at the end of any Fiscal Year or portion
thereof that is in excess of the amount such Member is obligated to restore
pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5), each
such Member shall be specially allocated items of Company income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 10.3(c) shall be made only if and to the extent that
such Member would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Agreement have been tentatively made as if this
Section 10.3(c) were not in this Agreement.
(d) Nonrecourse Deductions. Nonrecourse Deductions for
any Fiscal Year or portion thereof in respect of an Asset shall be allocated (as
nearly as possible) under Treasury Regulation Section 1.704-2 among the Members
in accordance with their relative Ownership Percentages in the case of
Nonrecourse Deductions in respect of an Asset.
(e) Member Nonrecourse Deductions. Any Member
Nonrecourse Deductions for any Fiscal Year or other period shall be allocated to
the Member that potentially bears an economic risk of loss with respect to the
Member Nonrecourse Debt to which such Member Nonrecourse Deductions are
attributable in accordance with the principles set forth in Treasury Regulation
Section 1.704-2(i).
(f) Member Minimum Gain Chargeback. Except as otherwise
provided in Treasury Regulation Section 1.704-2(i), if there is a net decrease
in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse
Debt during any Fiscal Year or portion thereof, each Member who has a share of
the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse
Debt, determined in accordance with Treasury Regulation Section 1.704-2(i)(5),
shall be specially allocated items of Company income and gain for such Fiscal
Year (and if necessary, subsequent Fiscal Years) in an amount equal to such
Member's share of the net decrease in Member Nonrecourse Debt, determined in
accordance with Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant
to the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto. The items to be so
allocated shall be determined in accordance with Treasury Regulations Sections
1.704-2(i)(4) and 1.704-2(j)(2). This Section 10.3(f) is intended to comply with
the minimum gain chargeback requirement in Treasury Regulation Section
1.704-2(i)(4) and shall be interpreted consistently therewith.
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10.4 ALLOCATIONS UPON TRANSFER OF UNITS IN THE COMPANY. In the
event of a transfer of any Units in the Company permitted under this Agreement,
all items of income, gain, loss, deduction and credit for the Fiscal Year in
which the transfer occurs shall be allocated for Federal income tax purposes
between the transferor and the transferee on the basis of the ownership of the
Units at the time the particular item is taken into account by the Company for
Federal income tax purposes, except to the extent otherwise required by law.
Distributions made on or after the effective date of transfer shall be made to
the transferee, regardless of when such distributions accrued on the books of
the Company. The effective date of the transfer shall be (a) in the case of a
voluntary transfer, the actual date the transfer is recorded on the books of the
Company, or (b) in the case of an involuntary transfer, the date of the
operative event.
XI. ACCOUNTING PROCEDURE; TAX MATTERS
11.1 FISCAL YEAR. The fiscal year of the Company shall begin on
January 1 and shall end on December 31 of each year.
11.2 BOOKS OF ACCOUNT. At all times during the existence and
continuance of the Company, the board of managers shall cause to be kept
accurate, complete, and proper books, records, and accounts pertaining to the
Company's affairs, including: (a) a list of all Members and their Capital
Contributions, Units, Ownership Percentages, and Capital Accounts, (b) a copy of
the Certificate and all amendments thereto and all powers of attorney pursuant
to which any Certificate has been executed, (c) an original copy of this
Agreement and all amendments thereto, (d) copies of the Company's federal, state
and local tax returns and financial statements, and (e) the Company's books and
records. Such books and records shall be kept on the accrual basis of accounting
in conformity with generally accepted accounting principles. The method of
accounting followed by the Company for Federal income tax purposes shall be the
accrual method. All books, records, and accounts of the Company shall be kept at
its principal office or at such other office as the board of managers may
designate for such purpose.
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11.3 PREPARATION AND FILING OF INCOME TAX RETURNS AND OTHER
WRITINGS.
ABT shall cause the preparation and timely filing of all Company
tax returns, shall on behalf of the Company make such tax elections (including,
without limitation, any election under Section 754 of the Code, which Section
754 election may be made in the Tax Matters Partners' discretion, upon the
written request of any Member), determinations, and allocations which he, in his
sole and absolute discretion, deems to be appropriate, and shall timely make all
other filings required by any governmental authority having jurisdiction to
require such filing, the cost of which shall be borne by the Company. ABT will
furnish copies of such returns to each Member. ABT shall also cause to be
delivered to the Members, within ninety (90) days after the expiration of each
tax year of the Company, a Form K-1 prepared by the Company or the Company's
accountant. This form shall show the allocation of Profit or Loss of the Company
for Federal income tax purposes, including all separately stated items, to each
Member. No election shall be made by the Company or any Member to be excluded
from the application of the provisions of subchapter K of the Code or from any
similar provision of state and local tax laws.
11.4 CONTROVERSIES WITH THE INTERNAL REVENUE SERVICE. In the
event of any controversy with the Internal Revenue Service or any other taxing
authority involving the Company or any individual Member or Members, the outcome
of which may adversely affect the Company, directly or indirectly, or the amount
of the allocation of income, gain, loss, deduction, or credit of the Company to
such Member, the Company may, at its option, incur expenses it deems necessary
or advisable in the interest of the Company in connection with any such
controversy, including, without limitation, reasonable attorneys' and
accountants' fees. ABT is hereby designated by the Members as the "TAX MATTERS
PARTNER" of the Company as defined in Section 6231(a)(7) of the Code and in such
capacity shall represent the Company in any disputes, controversies or
proceedings with the Internal Revenue Service. The Company will promptly send to
each Member a copy of all correspondence sent to or received from the Internal
Revenue Service by the Company.
XII. LIMITATIONS ON LIABILITIES; INDEMNIFICATION;
RIGHT TO CONDUCT OTHER BUSINESS
12.1 LIABILITY OF MEMBERS. The operating or other losses of the
Company shall be solely the liability of the Company, and no Member shall be
obligated personally for any such operating or other loss solely by reason of
being a Member. In no event shall the liability of a Member exceed, in the
aggregate, the amount of its Capital Contributions and no creditors shall have
the right to attach or garnish or compel the contribution by any Member of any
additional sums of capital.
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12.2 INDEMNIFICATION. The Company shall, to the fullest extent
permitted by applicable law, indemnify and hold harmless, the board of managers,
and any manager thereof, any Observer, any Authorized Person and agent, officer,
representative and employee thereof or Person who is deemed to control either
the board of managers or an Authorized Person (hereinafter collectively referred
to as the "INDEMNITEES") from and against any losses, claims, damages,
liabilities or actions, joint or several, to which such Indemnitees may be
subject by virtue of any act performed by such Indemnitee, or omitted to be
performed by any such Indemnitee, in connection with the business of the Company
or its formation and shall reimburse each such Indemnitee for any legal or other
expenses reasonably incurred by such Person in connection with investigating,
defending or preparing to defend any such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable to any
Indemnitee to the extent that in the final non-appealable judgment of a court of
competent jurisdiction such loss, claim, damage, liability or action is found to
arise from such Indemnitee's gross negligence or willful misconduct. Expenses
incurred by an Indemnitee in defending a civil or criminal action, suit or
proceeding arising out of or in connection with this Agreement or the Company's
business or affairs shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
the Indemnitee to repay such amount plus reasonable interest in the event that
it shall ultimately be determined that the Indemnitee was not entitled to be
indemnified by the Company in connection with such action. The foregoing rights
of indemnification shall not be exclusive of any other rights to which such
Indemnitee may be entitled. No amendment of this Agreement shall limit or
eliminate the right to indemnification provided hereunder with respect to acts
or omissions occurring prior to such amendment or repeal. The Company may carry
insurance protecting it and potential Indemnitees from liabilities to third
parties, to the extent practicable.
12.3 RIGHT TO CONDUCT OTHER BUSINESS. Except as provided in
SECTIONS 7.1, 7.2, 7.3, 8.3 AND 8.8 hereof, nothing contained in this Agreement
shall be deemed to restrict in any way the freedom of each Member, the board of
managers, and any manager thereof, and their Affiliates, including any director,
officer, or employee of such person, to conduct any other business or any other
activity whatsoever, including without limitation, the acquisition, holding and
disposing of real estate, securities or assets of any entity without having or
incurring any obligation to offer any interest therein to the Company or any
other Member.
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XIII. POWER OF ATTORNEY
13.1 AUTHORITY TO EXECUTE DOCUMENTS. During the life of the
Company and (to the extent a manager remains) during any additional period
authorized in accordance with this Agreement to dissolve, liquidate and wind up
its affairs of the Company, each of the undersigned Members hereby irrevocably
designates and appoints ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇, and each of them, and
any successors of such managers, and any duly appointed agent of such managers,
with full power of substitution, to be the Member's true and lawful
attorney-in-fact with the power from time to time in the name, place and stead
of the Member to do any ministerial act necessary to qualify the Company to do
business under the laws of any jurisdiction in which it is necessary to file any
instrument in writing in connection with such qualification, and to make,
execute, swear to and acknowledge, amend, file, record, deliver and publish in
conformance with the provisions of this Agreement (i) the Certificate for the
Company, (ii) a counterpart of this Agreement or of any amendment hereto for the
purpose of filing or recording such counterpart in any jurisdiction in which the
Company may own property or transact business, (iii) all certificates and other
instruments necessary to qualify or continue the Company as a limited liability
company in Delaware or in any jurisdiction where the Company may own property or
be doing business, (iv) any fictitious or assumed name certificate required or
permitted to be filed by or on behalf of the Company, (v) any other instrument
that is now or may hereafter be required by law to be filed for or on behalf of
the Company, (vi) any other instruments or documents that the board of managers
deems necessary to conduct the operation of the Com13.1abpany; provided, that,
such instrument or document is not inconsistent with the terms of this Agreement
in effect at that time and does not result in a material liability to such
Member, (vii) any amendment to this Agreement adopted pursuant to SECTION 14.1
hereof and (viii) a certificate or other instrument evidencing the dissolution
or termination of the Company when such shall be appropriate in Delaware and
each other jurisdiction in which the Company shall own property or do business.
13.2 SURVIVAL OF POWER. The existence of this power of attorney
shall not preclude execution of any such instrument by a Member individually on
any such matter. This limited power of attorney shall not be revoked and shall
survive the assignment or transfer by a Member of all or part of its Units in
the Company and, being coupled with an interest, shall survive the death,
incapacity or dissolution of the Member to the extent that it may legally
contract for such survival. Any person dealing with the Company may conclusively
presume and rely upon the fact that any such instrument executed by such agent
and attorney-in-fact is authorized, regular and binding without further inquiry.
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XIV. AMENDMENT AND DISSOLUTION
14.1 AMENDMENT. Any provision of this Agreement may be amended
by the consent of the holders of at least eighty-five percent (85%) of all
Units; provided, however, that no amendment of this Agreement shall, without the
consent of the affected Member, (i) increase the liability of a Member beyond
the liability of such Member expressly set forth in this Agreement or otherwise
modify or affect the limited liability of such Member, (ii) change the method or
calculation of distributions or allocations made under the provisions of
ARTICLES IX AND X hereof to any Member (except as otherwise provided in this
Agreement), (iii) eliminate an Original Eligible Owner's right to appoint a
manager except as provided in Section 4.1(a) or (iv) amend the rights of
Original Eligible Owners granted under Section 8.8.
14.2 DISSOLUTION.
(a) The Company shall be dissolved and its business
wound up and terminated on the earlier of:
(i) The date on which at least eighty percent
(80%) of the Company's Units as of January 1 of any year are transferred (other
than to Affiliates of Members), or all of the Assets (excluding the ABT
Contribution) have been disposed of and, to the extent legally available, the
net proceeds therefrom distributed to the Members; provided, however, such
transfer of Units or disposition of Assets will not be deemed a dissolution of
the Company or an event triggering dissolution or winding up of the Company if
such event is pursuant to a merger, sale, reorganization, reformation or similar
restructuring in which after such event the Members prior to such transaction
collectively own at least 50% of the equity of the entity that owns or controls
substantially all of the Assets after such transaction;
(ii) The date on which the Company is dissolved
by operation of law or judicial decree;
(iii) The date on which all of the Members agree
to terminate the Company; or
(iv) The occurrence of any other event causing
the dissolution of a limited liability company under the Act.
(b) Upon dissolution of the Company created hereunder,
the board of managers shall give written notice of such dissolution to the
Members which shall state that the Assets are to be liquidated in an orderly
fashion with appropriate reserves maintained for then existing and potential
obligations and contingent liabilities of the Company. Upon dissolution for
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any reason whatsoever, the Company shall thereafter engage in no further
business other than that necessary to wind up the business and to distribute the
Assets.
14.3 DISTRIBUTIONS UPON DISSOLUTION.
(a) Upon dissolution of the Company, (i) the ABT
Contribution shall be assigned back to ABT and (ii) the board of managers shall
act as liquidating trustee regarding the disposition of the Assets (excluding
the ABT Contribution, the "Remaining Assets") for cash, to pay and discharge all
liabilities and obligations of the Company and to distribute all cash remaining
and any Remaining Assets which cannot be disposed of to the Members as described
below. The liquidating trustee shall be under no liability with respect to the
Remaining Assets held by the Company upon dissolution except to hold and
maintain the same in the Company until disposed of in accordance with the terms
of this Agreement and the Act. Unless agreed to by all Members, and to the
extent commercially reasonable, every reasonable effort shall be made to dispose
of the Remaining Assets so that the liquidating distributions to the Members
shall be made in cash. If any non-cash Remaining Assets must be distributed in
kind, the liquidating trustee shall ascertain the fair market value of such
Remaining Assets by appraisal or other reasonable means of such Remaining Assets
remaining unsold and each Member's Capital Account shall be charged or credited,
as the case may be, as if such Remaining Assets had been sold at such fair
market value and the net gain or net loss realized thereby had been allocated to
and among the Members in accordance with SECTION 10.2 hereof. All of the
Remaining Assets, including, without limitation, all cash and property, if any,
then on hand in the Company, shall be applied and distributed, with reference to
the fair market value thereof, by the liquidating trustee. A reasonable time
shall be allowed for the orderly liquidation of the Remaining Assets and the
discharge of liabilities to creditors so as to minimize any losses attendant
upon a liquidation. The proceeds from the liquidation, to the extent sufficient
t(a)abherefor, shall be applied and distributed in the following order:
(i) To the creditors of the Company, whether by
payment or the making of an agreement for payment;
(ii) To setting up the reserves that the
liquidating trustee may deem necessary or reasonable for contingent or
unforeseen liabilities or obligations of the Company or of the liquidating
trustee arising out of or in connection with the Company or its liquidation;
(iii) To the non-ABT Members in proportion to,
and to the extent of, each Member's positive Capital Account balance, after
giving effect to all contributions, distributions and allocations for all
periods.
(iv) Thereafter, to ABT and the non-ABT Members
in proportion to, and to the extent of, their positive remaining Capital Account
balances.
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(b) All reasonable attempts shall be made to cause any
distributions to Members under this ARTICLE XIV upon liquidation to be made by
the end of the taxable year in which the liquidation of the Company occurs.
(c) The liquidating trustee shall comply with the terms
of this Agreement and any requirements of the Act or other applicable law
pertaining to the winding up of a limited liability company, at which time the
Company shall stand liquidated.
(d) The liquidating trustee shall be under no liability
with respect to the Assets held by the Company upon dissolution except to hold
and maintain the same in the Company until disposed of in accordance with the
terms of this Agreement and the Act. The Members shall look solely to the Assets
for the return of their respective Capital Contributions and, if the Assets
remaining after the payment or discharge of the debts and liabilities of the
Company are insufficient to return their Capital Contributions, they shall have
no recourse against the liquidating trustee or any Member for that purpose.
14.4 NO OBLIGATION TO RESTORE DEFICIT CAPITAL ACCOUNTS. No
Member with a deficit balance in its Capital Account shall have any obligation
to the Company or any other Member to restore said deficit balance. In addition,
except as expressly provided by agreement or relevant documentation, no venturer
or partner in any Member shall have any liability to the Company or any other
Member for any deficit balance in such venturer's or partner's capital account
in the Member in which it is a partner or venturer. Furthermore, a deficit
Capital Account balance of a Member (or a capital account of a partner or
venturer in a Member) shall not be deemed to be a liability of such Member (or
of such venturer or partner in such Member) or an Asset of the Company or any
Member.
XV. MISCELLANEOUS
15.1 INJUNCTIVE RELIEF. The parties acknowledge that it will be
impossible to measure in money the damages that would be suffered if the parties
fail to comply with certain of the obligations imposed on them by this
Agreement, including without limitation those obligations set forth in ARTICLES
IV, VII AND VIII and that in the event of any such failure, an aggrieved Person
will be irreparably damaged and will not have an adequate remedy at law. Any
such Person shall, therefore, in addition and not in lieu of any other remedy
available to an aggrieved Person, be entitled to injunctive relief and/or
specific performance to enforce such obligations, and if any action is brought
in equity to enforce any of such provisions of this Agreement, none of the
parties hereto shall raise the defense that there is an adequate remedy at law.
15.2 FURTHER ASSURANCES. Each party hereto shall do and perform
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other
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agreements, certificates, instruments and documents as any other party hereto
reasonably may request in order to carry out the intent and accomplish the
purposes of this Agreement.
15.3 GOVERNING LAW; DISPUTE RESOLUTION. This Agreement shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware without regard to principles
of conflict of laws.
(a) If a dispute arises under this Agreement, it should
be referred to the president or chief executive officer of each Member for
resolution, and such persons shall use their best efforts to resolve the matter
for no less than thirty (30) days. Any matter such persons are unable to resolve
within such period must be submitted to the dispute resolution procedure set
forth in Section 15.3(b).
(b) Any dispute or claim arising out of or in connection
with this Agreement not resolved by Section 15.3(a) above, must be finally
settled by binding arbitration under the Rules of Conciliation and Arbitration
of the American Arbitration Association (the "RULES") by one (1) arbitrator
appointed in accordance with such Rules within a period of ninety (90) days from
the date such dispute is submitted to arbitration. Judgment on the award
rendered may be entered in any court having jurisdiction thereof. The place of
arbitration shall be New York, New York. Any monetary award must be calculated
and denominated in United States dollars and the arbitration must be conducted
in the English language. Notwithstanding the other provisions of this Section
15.3, either party may apply to any court of competent jurisdiction for
injunctive or equitable relief.
15.4 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof,
and supersedes all prior and contemporaneous agreements and understandings of
the parties with respect thereto, including the Operating Agreement of the
Company dated September 30, 1997.
15.5 BINDING EFFECT. This Agreement shall be binding on and
inure to the benefit of the parties hereto and, subject to the terms and
provisions hereof, their respective, heirs, administrators, executors, legal
representatives, successors and permitted assigns.
15.6 INVALIDITY OF PROVISION. The invalidity or unenforceability
of any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
15.7 NOTICES. All notices and other communications given or made
hereunder shall be in writing and, unless otherwise provided herein, shall be
deemed to have been given when received by the party to whom such notice is to
be given (i) by an overnight delivery service or by mail at its address set
forth on the signature pages hereto, or such other address for the party as
shall be specified by notice given pursuant hereto, (ii) by electronic facsimile
(fax) to such party at the facsimile number set forth on the signature pages
hereto, or such other facsimile number for the party as shall
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be specified by notice given pursuant hereto, or (iii) by e-mail at the e-mail
address set forth on the signature pages hereto, or such other e-mail address
for the party as shall be specified by notice given pursuant hereto.
15.8 HEADINGS. The descriptive headings of the several sections
of this Agreement are inserted for convenience only and do not constitute part
of this Agreement.
15.9 GENDER AND NUMBER. Whenever required by the context, as
used in this Agreement, the singular number shall include the plural, the neuter
shall include the masculine or the feminine gender and the masculine gender
shall include the neuter or the feminine gender.
15.10 COUNTERPARTS AND EXECUTION. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original agreement
and all of which shall constitute one agreement among each of the parties
hereto, notwithstanding that all of the parties are not signatories to the
original or the same counterpart, to be effective as of the day and year first
set forth above.
15.11 CONSENTS AND WAIVERS. A Member's waiver, consent, failure
to object, failure to seek redress, course of conduct or failure to insist upon
the strict performance of any covenant or condition of this Agreement shall not
be considered or construed as a waiver or consent for subsequent matters or
other obligations or rights of the Member. No waiver of any term or provision of
this Agreement shall be effective unless in writing signed by the party to be
charged.
15.12 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided by this Agreement are cumulative and the use of any one right or remedy
by any party shall not preclude or waive its right to use any or all other
remedies. Such rights and remedies are given in addition to any other rights the
parties may have by law, statute, ordinance, or otherwise.
15.13 WAIVER OF RIGHT TO PARTITION. Each of the parties hereto
irrevocably waives during the term of the Company any right that it may have to
maintain any action for partition with respect to an Asset.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
AUTOBYTEL.EUROPE LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman
Notice Information:
Autobytel.Europe LLC
c/o ▇▇▇▇▇▇▇▇▇.▇▇▇ inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: ▇▇▇▇▇ ▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
MEMBERS:
▇▇▇▇▇▇▇▇▇.▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
Notice Information:
▇▇▇▇▇▇▇▇▇.▇▇▇ inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: ▇▇▇▇▇ ▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
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GE CAPITAL EQUITY HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Notice Information:
GE Equity
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
INCHCAPE OVERSEAS INVESTMENTS B.V.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Notice Information:
Inchcape Motors International plc
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: 011 44 171 546 8441
E-mail: ▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
PON HOLDINGS B.V.
By: /s/ Henk Rottinghuis
---------------------------------
Name: Henk Rottinghuis
Title: Director
Notice Information:
Pon AutomobieHandel B.V.
▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
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Attention: Henk Rottinghuis
Facsimile: 011 33 133 494 8714
E-mail: ▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇
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