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EXHIBIT 10.17
VOTING AGREEMENT AND IRREVOCABLE PROXY
THIS VOTING AGREEMENT AND IRREVOCABLE PROXY, dated as of August
29,
2003 (the "Agreement"), is by and among
KEYSTONE AUTOMOTIVE HOLDINGS, INC., a
Delaware corporation ("Acquiror"), KEYSTONE
AUTOMOTIVE OPERATIONS, INC., a
Pennsylvania corporation (the "Company"),
the individuals and entities listed in
Exhibit A attached hereto (the
"Shareholders") and LAGE LLC, a Delaware limited
liability corporation (the "Holder
Representative").
W I T N E S S E T H:
WHEREAS, Acquiror, Keystone Merger Sub, Inc., a Pennsylvania
corporation and a wholly-owned subsidiary
of Acquiror ("Merger Sub"), the
Company, and the Holder Representative
propose to enter into an Agreement and
Plan of Merger, dated today's date (as such
agreement may hereafter be amended,
restated or otherwise modified from time to
time, the "Merger Agreement";
capitalized terms used herein and not
defined herein have the respective
meanings ascribed to them in the Merger
Agreement), pursuant to which Merger Sub
will be merged with and into the Company,
with the Company continuing as the
Surviving Corporation and a wholly-owned
subsidiary of Acquiror (the "Merger");
WHEREAS, each of the Shareholders owns the number of shares of
(i)
Common Stock, par value $.01 per share (the
"Common Stock"), and (ii) Series A
Preferred Stock, stated value $649.99 per
share (the "Series A Preferred Stock",
and together with the Common Stock and any
other voting capital stock of the
Company held by such Shareholders, the
"Shares"), of the Company set forth
opposite such Shareholder's name on Exhibit
A hereto; and
WHEREAS,
the Shareholders have agreed to enter into this Agreement
strictly in their capacity as owners of the
Shares and not in their capacity as
directors or officers of the Company.
NOW, THEREFORE, to induce Acquiror and Merger Sub to enter into
the
Merger Agreement, and in consideration of
the premises and the representations,
warranties, covenants and agreements
contained herein, and intending to be
legally bound hereby, the parties hereto
hereby agree as follows:
1. Provisions Concerning the Shares.
(a) Each Shareholder hereby agrees that during the period
commencing
on the date hereof and continuing until
this provision terminates pursuant to
Section 7 hereof, at any meeting of
shareholders of the Company, however called,
or in connection with any written consent
of the shareholders of the Company,
such Shareholder shall vote (or cause to be
voted) the Shares held of record or
beneficially owned by such Shareholder,
whether heretofore owned or hereafter
acquired, and shall exercise (or cause to
be exercised) all consensual rights
attendant thereto (i) in favor of approval
of the Merger Agreement and the
transactions contemplated thereby
(including the Merger) and any actions
required in furtherance thereof and hereof;
(ii) against any
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action or agreement that would result in a
breach in any respect of any
covenant, representation or warranty or any
other obligation or agreement of the
Company under the Merger Agreement; (iii)
in favor of any amounts proposed to be
paid to directors, employees or former
employees of the Company under the
Keystone Automotives Operations, Inc. 2003
Transaction Bonus Plan and submitted
to shareholders of the Company for their
approval in a manner intended to
satisfy the requirements of Section
280G(b)(5) of the Internal Revenue Code; and
(iv) except as otherwise contemplated or
permitted by the Merger Agreement,
against the following actions (other than
the Merger and the transactions
contemplated by the Merger Agreement): (A)
any Alternative Transaction; (B) a
sale, lease or transfer of a material
amount of assets of the Company, or a
reorganization, recapitalization,
dissolution or liquidation of the Company; (C)
any change in a majority of the persons who
constitute the board of directors of
the Company or a change in management of
the Company; (D) any amendment of the
Company's articles of incorporation or
by-laws; or (E) any other action which is
intended, or could reasonably be expected,
to impede, interfere with, delay,
postpone, or adversely affect the Merger
and the transactions contemplated by
this Agreement and the Merger Agreement. In
the event that any corporate action
consistent with this Agreement is taken by
the shareholders of the Company by
written consent (including any action to
approve the Merger Agreement and the
transactions contemplated thereby), each
Shareholder hereby waives any right to
receive notice of the taking of such
corporate action without a meeting pursuant
to Section 1766 of the Pennsylvania
Business Corporation Law of 1988 (the "BCL")
or otherwise.
(b) Each Shareholder hereby agrees that it will execute and
deliver
the Holder Representative Agreement before
the Effective Time of the Merger.
(c) In the event of a stock dividend or distribution, or any change
in
the capital stock of the Company by reason
of any stock split, recapitalization,
reclassification, combination, exchange of
shares, merger or similar event, the
term "Shares" as used in this Agreement
shall be deemed to refer to and include
the Shares as well as all such stock
dividends and distributions and any shares
or other securities into which or for which
any or all of the Shares may be
converted, changed or exchanged.
2. Waiver of Appraisal Rights. Each Shareholder hereby
irrevocably
waives any rights to appraisal of the fair
value of such Shareholder's Shares,
rights to dissent from the Merger or other
similar rights that such Shareholder
may have pursuant to the BCL or otherwise
(collectively, "Appraisal Rights").
3. Representations and Warranties. Each Shareholder hereby
represents
and warrants to Acquiror and the Holder
Representative as follows:
(a) Ownership of Shares. Such Shareholder is the record and, except
as
set forth on Schedule 3(a) attached hereto,
beneficial owner of the number of
Shares set forth opposite such
Shareholder's name on Exhibit A hereto. The
Shares set forth opposite such
Shareholder's name on Exhibit A hereto constitute
all of the Shares owned of record or
beneficially owned by such Shareholder.
Except as set forth on Schedule 3(a)
attached hereto, such Shareholder has the
requisite power (i) to vote and to
issue
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instructions with respect to the matters
set forth in Sections 1 and 5 hereof,
(ii) to dispose of, and (iii) to demand
Appraisal Rights, in each case with
respect to all of the Shares set forth
opposite such Shareholder's name on
Exhibit A hereto.
(b) Power; Binding Agreement. Such Shareholder has the requisite
power
and authority (or, if a natural person, the
legal capacity) to enter into and
perform all of such Shareholder's
obligations under this Agreement. This
Agreement has been duly and validly
authorized, executed and delivered by such
Shareholder and constitutes a valid and
binding agreement of such Shareholder,
enforceable against such Shareholder in
accordance with its terms, subject to
applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization,
moratorium and similar laws affecting
creditors' rights and remedies generally,
and subject, as to enforceability, to
general principles of equity, including
principles of commercial reasonableness,
good faith and fair dealing (regardless
of whether enforcement is sought in a
proceeding at law or in equity). Except as
have been obtained, there is no beneficiary
or holder of a voting trust
certificate or other interest of any trust
of which such Shareholder is settlor
or trustee or any other person whose
consent is required for the execution and
delivery of this Agreement or the
performance by such Shareholder of its
obligations hereunder.
(c) No Conflicts. (i) No filing with, and no permit,
authorization,
consent or approval of, any state or
federal public body or authority is
necessary for the execution of this
Agreement by such Shareholder and the
consummation by such Shareholder of the
transactions contemplated hereby, and
(ii) none of the execution, delivery and
performance of this Agreement by such
Shareholder will (A) result in a violation
or breach of, or constitute (with or
without notice or lapse of time or both) a
default under any declaration of
trust, note, bond, mortgage, indenture,
security or pledge agreement, voting
agreement, shareholders agreement or voting
trust, license, contract,
commitment, arrangement, understanding,
agreement or other instrument or
obligation of any kind to which such
Shareholder is a party or by which such
Shareholder or any of such Shareholder's
properties or assets is bound, (B)
violate any order, writ, injunction,
decree, judgment, order, statute, rule or
regulation of any Governmental Authority
applicable to such Shareholder or any
of such Shareholder's properties or assets,
in each case where any such
violation, breach or default would disable
or prevent such Shareholder from
executing and delivering this Agreement and
performing its obligations
hereunder, or (C) violate any provisions of
the Company's articles of
incorporation or by-laws.
(d) No Encumbrances. Except as applicable in connection with
the
transactions contemplated hereby, such
Shareholder's Shares and the certificates
representing such Shares are now, and will
be, at all times during the term
hereof, beneficially owned and held of
record by such Shareholder, free and
clear of all liens, claims, security
interests, proxies, voting trusts or
agreements, understandings or arrangements
or any other encumbrances whatsoever,
except for any such encumbrances: (i)
arising hereunder; (ii) existing under any
pledge agreement executed by a Shareholder
in favor of Wachovia Bank N.A.
(formerly known as First Union National
Bank), as agent (the "Agent"), in
connection with the Credit Agreement (each,
a "Pledge Agreement"); (iii)
existing under the Shareholders' Agreement
and the Registration
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Rights Agreement; (iv) existing under any
Restricted Stock Agreements or
Restricted Stock Agreement and Amendment to
Stock Option Agreements; and (v)
existing under the Securities Act of 1933,
as amended.
4. No Solicitation.
(a) Immediately after the execution of this Agreement, and
continuing
until this provision terminates pursuant to
Section 7 hereof, each Shareholder
shall terminate and cease, and shall direct
its Affiliates, officers, directors,
Representatives and agents (such Persons
collectively shall be referred to as
the "Shareholder Group") to terminate and
cease, all discussions and
negotiations that may then be ongoing by
any of them with respect to an
Alternative Transaction. From the date
hereof through the earlier of (a) the
Closing or (b) the termination of this
provision pursuant to Section 7 hereof,
the Shareholder shall not, and shall not
knowingly permit any member of the
Shareholder Group to, directly or
indirectly, solicit, participate in or
initiate discussions or negotiations with,
or provide any information to, any
Person or group of Persons (other than
Acquiror, Merger Sub or any of their
respective Affiliates) concerning any
Alternative Transaction. The Shareholder
shall notify Acquiror within two Business
Days if it receives a bona fide,
written offer in respect of an Alternative
Transaction.
(b) Each of Acquiror and the Holder Representative acknowledges
that
this Agreement is entered into by each
Shareholder in such Shareholder's
capacity as an owner of the Shares, and
that nothing in this Agreement shall in
any way restrict or limit a Shareholder who
is also a director or officer of the
Company from taking any action in his
capacity as a director or officer of the
Company or otherwise fulfilling his
fiduciary obligations as a director or
officer of the Company, notwithstanding
that any such action would be
inconsistent with or violative of such
Shareholder's obligations under this
Agreement if taken in his capacity as an
owner of the Shares.
5. Restriction on Transfer; Stop Transfer.
(a) Each Shareholder agrees not to, during the period commencing
on
the date hereof and continuing until this
provision terminates pursuant to
Section 7 hereof: (i) except as
contemplated by the Merger Agreement, offer for
sale, sell, transfer, tender, pledge,
encumber, assign or otherwise dispose of,
or grant or enter into any contract, option
or other arrangement or
understanding with respect to or consent to
the offer for sale, sale, transfer,
tender, pledge, encumbrance, assignment or
other disposition of, any or all of
such Shareholder's Shares or any interest
therein, provided that any Shareholder
may offer to sell, sell, transfer, assign
or otherwise dispose of Shares to such
Shareholder's Affiliate who is, or as a
condition precedent becomes, a party to
this Agreement, or to any other shareholder
of the Company who is, or as a
condition precedent becomes, a party to
this Agreement; (ii) except as
contemplated by this Agreement, grant any
proxies or powers of attorney, deposit
any Shares into a voting trust or enter
into a voting agreement with respect to
any Shares; or (iii) knowingly take any
action that would make any of such
Shareholder's representations or warranties
contained herein untrue or incorrect
or have the effect of preventing or
disabling such Shareholder from performing
such Shareholder's obligations under this
Agreement.
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(b) Without limiting the generality of Section 5(a) above, each
Shareholder agrees with, and covenants to,
the Company and the Holder
Representative that such Shareholder shall
not, during the period set forth in
Section 5(a), request that the Company
register the transfer (book-entry or
otherwise) of any certificate or
uncertificated interest representing the
Shares, unless such transfer is made in
compliance with this Agreement.
6. Grant of Irrevocable Proxy Coupled with an Interest.
(a) During the period commencing on the date hereof and
continuing
until this provision terminates pursuant to
Section 7 hereof, each Shareholder
hereby irrevocably appoints the Holder
Representative or any individual
designated by the Holder Representative as
such Shareholder's agent,
attorney-in-fact and proxy (with full power
of substitution), for in the name,
place and stead of such Shareholder, to
vote (or cause to be voted) the Shares
held of record or beneficially owned by
such Shareholder, whether issued,
heretofore owned or hereafter acquired, or
grant a consent or approval in
respect of such Shares, at any meeting of
Shareholders of the Company or at any
adjournment thereof or in any other
circumstances upon which his, her or its
vote, consent or other approval is sought:
(i) in favor of the approval of the
Merger Agreement and any actions required
in furtherance thereof and hereof;
provided, however, that if the Holder
Representative fails to vote the Shares in
favor of the approval of the Merger
Agreement or any actions required in
furtherance thereof, each Shareholder shall
be deemed to have appointed the
Acquiror as such Shareholder's agent,
attorney-in-fact and proxy (with full
power of substitution), for in the name,
place and stead of such Shareholder, to
vote (or cause to be voted) the Shares held
of record or beneficially owned by
such Shareholder in favor of the approval
of the Merger Agreement and any
actions required in furtherance thereof;
(ii) against any action or agreement
that would result in a breach in any
respect of any covenant, representation or
warranty or any other obligation or
agreement of the Company under the Merger
Agreement; (iii) in favor of any amounts
proposed to be paid to directors,
employees or former employees of the
Company under the Keystone Automotives
Operations, Inc. 2003 Transaction Bonus
Plan and submitted to shareholders of
the Company for their approval in a manner
intended to satisfy the requirements
of Section 280G(b)(5) of the Internal
Revenue Code; and (iv) except as
contemplated or permitted by the Merger
Agreement, against the following actions
(other than the Merger and the transactions
contemplated by the Merger
Agreement): (A) any extraordinary corporate
transaction, such as a merger,
consolidation or other business combination
involving the Company; (B) a sale,
lease or transfer of a material amount of
assets of the Company, or a
reorganization, recapitalization,
dissolution or liquidation of the Company; (C)
any change in a majority of the persons who
constitute the board of directors of
the Company; (D) any amendment of the
Company Articles of Incorporation or
By-Laws; or (E) any other action which is
intended, or could reasonably be
expected, to impede, interfere with, delay,
postpone, or adversely affect the
Merger and the transactions contemplated by
this Agreement and the Merger
Agreement.
(b) Each Shareholder hereby affirms that the proxy set forth in
this
Section 6 is coupled with an interest and
is irrevocable until such time as this
Agreement
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terminates in accordance with its terms.
Such Shareholder hereby further affirms
that the irrevocable proxy is given in
connection with the execution of the
Merger Agreement, and that such irrevocable
proxy is given to secure the
performance of the duties of such
Shareholder under this Agreement. Such
Shareholder hereby ratifies and confirms
all that such irrevocable proxy may
lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is
executed and intended to be irrevocable in
accordance with the provisions of
Section 1759 of the BCL.
(c) The vote of the proxyholder shall control in any conflict
between
the vote by the proxyholder of such
Shareholder's Shares and a vote by such
Shareholder of such Shareholder's
Shares.
7. Termination. Except as otherwise provided herein, the covenants
and
agreements contained in Sections 1, 2, 4, 5
and 6 hereof shall terminate on the
earliest to occur of: (i) in the event the
Merger Agreement is terminated in
accordance with the terms thereof,
concurrently with such termination; (ii) in
the event the Merger is consummated, upon
the Effective Time of the Merger; and
(iii) the date specified in writing by
mutual agreement of the parties hereto.
8. General Release. Effective as of the Closing Date, each
Shareholder
on his or its own behalf and on behalf of
his or its heirs, successors, assigns,
executors, and personal representatives
hereby releases and discharges the
Company and its predecessors, successors
(by merger
