Exhibit 10.7

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of April 30, 2004 by and among Liberté Investors Inc., a Delaware corporation
(“LBI”), and the individuals listed on Exhibit A attached hereto (each a “USAuto
Holder” and collectively, the “USAuto Holders”).

 

WHEREAS, this Agreement is entered into pursuant to the Agreement and Plan of
Merger, dated as of December 15, 2003 (the “Merger Agreement”), by and among
LBI, USAH Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary
of LBI (“Merger Sub”), USAuto Holdings, Inc., a Delaware corporation (“USAuto”),
the USAuto Holders and each of the other stockholders of USAuto set forth on the
Schedule of USAuto Stockholders attached thereto. Capitalized terms used but not
defined in this Agreement shall have the meanings given to such terms in the
Merger Agreement;

 

WHEREAS, the Merger Agreement provides that, subject to the terms and conditions
therein, USAuto will be merged with and into Merger Sub in a transaction (the
“Merger”) in which all outstanding shares of USAuto Common Stock will be
converted into the right to receive, and will be exchangeable for, LBI Common
Stock and/or cash as set forth in the Merger Agreement; and

 

WHEREAS, as an inducement for LBI, USAuto and the USAuto Holders to approve the
Merger Agreement and the transactions contemplated therein, LBI desires to grant
certain registration rights to the USAuto Holders as contained herein.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:

 

1.             REGISTRATION RIGHTS.

 

(A)           DEFINITIONS.

 

(I)            1933 ACT.  THE TERM “1933 ACT” MEANS THE SECURITIES ACT OF 1933,
AS AMENDED.

 

(II)           1934 ACT.  THE TERM “1934 ACT” MEANS THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.

 

(III)          AFFILIATE.  THE TERM “AFFILIATE” MEANS A PERSON THAT DIRECTLY, OR
INDIRECTLY THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS, IS CONTROLLED BY, OR IS
UNDER COMMON CONTROL WITH A SPECIFIED PERSON.

 

(IV)          FORM S-3.  THE TERM “FORM S-3” MEANS SUCH FORM UNDER THE 1933 ACT
AS IS IN EFFECT ON THE DATE HEREOF OR ANY SUCCESSOR REGISTRATION FORM UNDER THE
1933 ACT SUBSEQUENTLY ADOPTED BY THE SEC THAT PERMITS INCLUSION OR INCORPORATION
OF SUBSTANTIAL INFORMATION BY REFERENCE TO OTHER DOCUMENTS FILED BY LBI WITH THE
SEC.

 

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(V)           IMMEDIATE FAMILY.  THE TERM “IMMEDIATE FAMILY” MEANS, WITH RESPECT
TO A NATURAL PERSON, THE SPOUSE, PARENTS, CHILDREN, GRANDCHILDREN, SIBLINGS,
MOTHER- AND FATHER-IN-LAW, SONS- AND DAUGHTERS-IN-LAW, AND BROTHERS- AND
SISTERS-IN-LAW OF SUCH PERSON.

 

(VI)          PERMITTED TRANSFEREE.  THE TERM “PERMITTED TRANSFEREE” MEANS, WITH
RESPECT TO A USAUTO HOLDER, (A) ANY MEMBER OF SUCH USAUTO HOLDER’S IMMEDIATE
FAMILY, (B) ANY AFFILIATE OF SUCH USAUTO HOLDER, (C) SUCH USAUTO HOLDER’S
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR PERSONAL REPRESENTATIVE TO WHOM SUCH
REGISTRABLE SECURITIES ARE TRANSFERRED AT DEATH OR INVOLUNTARILY BY OPERATION OF
LAW, (D) ANY TRUST ESTABLISHED BY SUCH USAUTO HOLDER FOR THE BENEFIT OF SUCH
HOLDER’S IMMEDIATE FAMILY, OR (E) ANY FAMILY LIMITED PARTNERSHIP ESTABLISHED BY
SUCH USAUTO HOLDER FOR ESTATE PLANNING PURPOSES, THE LIMITED PARTNERS OF WHICH
ARE SUCH USAUTO HOLDER’S IMMEDIATE FAMILY.

 

(VII)         PERSON.  THE TERM “PERSON” MEANS ANY HUMAN BEING, ORGANIZATION,
GENERAL PARTNERSHIP, LIMITED PARTNERSHIP, CORPORATION, LIMITED LIABILITY
COMPANY, JOINT VENTURE, TRUST, BUSINESS TRUST, ASSOCIATION, GOVERNMENTAL ENTITY
OR OTHER LEGAL ENTITY.

 

(VIII)        REGISTRATION.  THE TERMS “REGISTER,” “REGISTERED” AND
“REGISTRATION” REFER TO A REGISTRATION EFFECTED BY PREPARING AND FILING A
REGISTRATION STATEMENT IN COMPLIANCE WITH THE 1933 ACT, AND THE DECLARATION OR
ORDERING OF EFFECTIVENESS OF SUCH REGISTRATION STATEMENT.

 

(IX)           REGISTRABLE SECURITIES.  THE TERM “REGISTRABLE SECURITIES” 
MEANS:  (A) ANY SHARES OF LBI COMMON STOCK ISSUED TO A USAUTO HOLDER PURSUANT TO
SECTION 1.7 OF THE MERGER AGREEMENT (THE “MERGER SHARES”); AND (B) ANY
SECURITIES ISSUED OR ISSUABLE WITH RESPECT TO THE MERGER SHARES BY WAY OF STOCK
DIVIDEND OR STOCK SPLIT OR IN CONNECTION WITH A COMBINATION OF SHARES,
RECAPITALIZATION, MERGER, CONSOLIDATION OR OTHER REORGANIZATION OR OTHERWISE.
FOR PURPOSES OF THIS AGREEMENT, ANY REGISTRABLE SECURITIES SHALL CEASE TO BE
REGISTRABLE SECURITIES WHEN (X) A REGISTRATION STATEMENT COVERING SUCH
REGISTRABLE SECURITIES HAS BEEN DECLARED EFFECTIVE AND SUCH REGISTRABLE
SECURITIES HAVE BEEN DISPOSED OF PURSUANT TO SUCH EFFECTIVE REGISTRATION
STATEMENT, OR (Y) SUCH REGISTRABLE SECURITIES ARE TRANSFERRED IN A TRANSACTION
THAT IS EXEMPT FROM REGISTRATION PURSUANT TO RULE 144 UNDER THE 1933 ACT OR A
TRANSACTION IN WHICH THE USAUTO HOLDERS’ RIGHTS UNDER THIS AGREEMENT ARE NOT
ASSIGNED.  IN ADDITION, THE REGISTRABLE SECURITIES HELD BY ANY HOLDER OF
REGISTRABLE SECURITIES SHALL CEASE TO BE REGISTRABLE SECURITIES ON SUCH DATE ON
WHICH ALL OF THE REGISTRABLE SECURITIES HELD BY SUCH HOLDER CAN BE SOLD PURSUANT
TO RULE 144(K) UNDER THE 1933 ACT (OR ANY SIMILAR PROVISION THEN IN FORCE).

 

(X)            SEC.  THE TERM “SEC” OR “COMMISSION” MEANS THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION.

 

(B)           PIGGYBACK REGISTRATIONS.  LBI SHALL NOTIFY ALL HOLDERS OF
REGISTRABLE SECURITIES IN WRITING AT LEAST 30 DAYS PRIOR TO FILING ANY
REGISTRATION STATEMENT UNDER THE 1933 ACT FOR PURPOSES OF EFFECTING A PUBLIC
OFFERING OF SECURITIES OF LBI (INCLUDING, BUT NOT LIMITED TO, REGISTRATION
STATEMENTS RELATING TO SECONDARY OFFERINGS OF SECURITIES OF LBI, BUT EXCLUDING
REGISTRATION STATEMENTS RELATING TO ANY REGISTRATION UNDER SECTION 1(C) OF THIS
AGREEMENT OR ANY

 

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EMPLOYEE BENEFIT PLAN OR A CORPORATE REORGANIZATION) AND WILL AFFORD EACH SUCH
HOLDER OF REGISTRABLE SECURITIES AN OPPORTUNITY TO INCLUDE IN SUCH REGISTRATION
ALL OR ANY PART OF THE REGISTRABLE SECURITIES THEN HELD BY SUCH HOLDER.  EACH
HOLDER OF REGISTRABLE SECURITIES DESIRING TO INCLUDE IN ANY SUCH REGISTRATION
ALL OR ANY PART OF THEIR REGISTRABLE SECURITIES SHALL, WITHIN 20 DAYS AFTER
RECEIPT OF THE ABOVE-DESCRIBED NOTICE FROM LBI, SO NOTIFY LBI IN WRITING, AND IN
SUCH NOTICE SHALL INFORM LBI OF THE NUMBER OF REGISTRABLE SECURITIES SUCH HOLDER
WISHES TO INCLUDE IN SUCH REGISTRATION. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, IF LBI DETERMINES IN GOOD FAITH THAT A LIMITATION OF THE NUMBER
OF SHARES TO BE REGISTERED IS REQUIRED, THEN LBI MAY EXCLUDE SHARES (INCLUDING
REGISTRABLE SECURITIES) FROM THE REGISTRATION, AND THE NUMBER OF SHARES THAT MAY
BE INCLUDED IN THE REGISTRATION SHALL BE ALLOCATED, (X) IN THE CASE OF A PRIMARY
PUBLIC OFFERING OF SECURITIES BY LBI, FIRST, TO LBI, SECOND, TO THE HOLDERS OF
REGISTRABLE SECURITIES REQUESTING INCLUSION OF THEIR REGISTRABLE SECURITIES IN
SUCH REGISTRATION AND, THIRD, TO THE OTHER HOLDERS OF SECURITIES OF LBI
REQUESTING INCLUSION OF THEIR SECURITIES IN SUCH REGISTRATION AND, (Y) IN THE
CASE OF A SECONDARY PUBLIC OFFERING OF LBI SECURITIES, FIRST, TO THE HOLDERS OF
SECURITIES OF LBI REQUESTING REGISTRATION OF THEIR SECURITIES AND, SECOND, TO
THE HOLDERS OF REGISTRABLE SECURITIES REQUESTING INCLUSION OF THEIR REGISTRABLE
SECURITIES IN SUCH REGISTRATION.  IF LBI EXCLUDES SHARES FROM THE REGISTRATION
AS DESCRIBED IN THE PRECEDING SENTENCE, THEN WITH RESPECT TO THE REGISTRABLE
SECURITIES THEN HELD BY ANY HOLDERS OF REGISTRABLE SECURITIES, THE NUMBER OF
REGISTRABLE SECURITIES TO BE INCLUDED IN THE REGISTRATION SHALL BE IN SUCH
PROPORTION AS THE NUMBER OF REGISTRABLE SECURITIES THEN HELD BY SUCH HOLDER OF
REGISTRABLE SECURITIES BEARS TO THE TOTAL NUMBER OF REGISTRABLE SECURITIES THEN
HELD BY ALL HOLDERS OF REGISTRABLE SECURITIES PARTICIPATING IN THE
REGISTRATION.  IF A HOLDER OF REGISTRABLE SECURITIES DOES NOT INCLUDE ALL OF ITS
REGISTRABLE SECURITIES IN ANY REGISTRATION BY LBI, SUCH HOLDER SHALL
NEVERTHELESS CONTINUE TO HAVE THE RIGHT TO INCLUDE ANY REGISTRABLE SECURITIES IN
ANY SUBSEQUENT REGISTRATION OR REGISTRATIONS BY LBI WITH RESPECT TO OFFERINGS OF
ITS SECURITIES, ALL UPON THE TERMS AND CONDITIONS SET FORTH HEREIN.

 

(I)            UNDERWRITING.  IF A REGISTRATION STATEMENT UNDER WHICH LBI GIVES
NOTICE UNDER THIS SECTION 1(B) IS FOR AN UNDERWRITTEN OFFERING, THEN LBI SHALL
SO ADVISE THE HOLDERS OF REGISTRABLE SECURITIES AS A PART OF THE NOTICE REFERRED
TO IN THIS SECTION 1(B).  IN SUCH EVENT, THE RIGHT OF ANY SUCH HOLDER OF
REGISTRABLE SECURITIES TO BE INCLUDED IN A REGISTRATION PURSUANT TO THIS SECTION
1(B) SHALL BE CONDITIONED UPON SUCH HOLDER’S PARTICIPATION IN SUCH UNDERWRITING
AND THE INCLUSION OF SUCH HOLDER’S REGISTRABLE SECURITIES IN THE UNDERWRITING TO
THE EXTENT PROVIDED HEREIN.  ALL HOLDERS OF REGISTRABLE SECURITIES PROPOSING TO
DISTRIBUTE THEIR REGISTRABLE SECURITIES THROUGH SUCH UNDERWRITING SHALL ENTER
INTO AN UNDERWRITING AGREEMENT IN CUSTOMARY FORM WITH THE MANAGING UNDERWRITER
OR UNDERWRITER(S) SELECTED FOR SUCH UNDERWRITING.  NOTWITHSTANDING ANY OTHER
PROVISION OF THIS AGREEMENT, IF LBI OR THE MANAGING UNDERWRITER(S) DETERMINES IN
GOOD FAITH THAT A LIMITATION OF THE NUMBER OF SHARES TO BE UNDERWRITTEN IS
REQUIRED, THEN LBI OR THE MANAGING UNDERWRITER(S) MAY EXCLUDE SHARES (INCLUDING
REGISTRABLE SECURITIES) FROM THE REGISTRATION AND THE UNDERWRITING, AND THE
NUMBER OF SHARES THAT MAY BE INCLUDED IN THE REGISTRATION AND THE UNDERWRITING
SHALL BE ALLOCATED, (X) IN THE CASE OF A PRIMARY PUBLIC OFFERING OF SECURITIES
BY LBI, FIRST, TO LBI, SECOND, TO THE HOLDERS OF REGISTRABLE SECURITIES
REQUESTING INCLUSION OF THEIR REGISTRABLE SECURITIES IN SUCH REGISTRATION AND,
THIRD, TO THE OTHER HOLDERS OF SECURITIES OF LBI REQUESTING INCLUSION OF THEIR
SECURITIES IN SUCH REGISTRATION AND, (Y) IN THE CASE OF A SECONDARY PUBLIC
OFFERING OF LBI SECURITIES, FIRST, TO THE HOLDERS OF SECURITIES OF LBI
REQUESTING REGISTRATION OF THEIR SECURITIES AND, SECOND, TO THE HOLDERS OF
REGISTRABLE SECURITIES REQUESTING INCLUSION OF THEIR REGISTRABLE SECURITIES

 

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IN SUCH REGISTRATION.  IF ANY HOLDER OF REGISTRABLE SECURITIES REQUESTING
INCLUSION OF ITS REGISTRABLE SECURITIES DISAPPROVES OF THE TERMS OF ANY SUCH
UNDERWRITING, SUCH HOLDER MAY ELECT TO WITHDRAW THEREFROM BY WRITTEN NOTICE TO
LBI AND THE MANAGING UNDERWRITER(S), DELIVERED AT LEAST TEN BUSINESS DAYS PRIOR
TO THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.  ANY REGISTRABLE SECURITIES
EXCLUDED OR WITHDRAWN FROM SUCH UNDERWRITING SHALL BE EXCLUDED AND WITHDRAWN
FROM THE REGISTRATION.

 

(II)           EXPENSES.  ALL EXPENSES INCURRED IN CONNECTION WITH REGISTRATIONS
PURSUANT TO THIS SECTION 1(B) (EXCLUDING UNDERWRITERS’ AND BROKERS’ DISCOUNTS
AND COMMISSIONS AND FEES AND EXPENSES OF COUNSEL TO ANY HOLDER OF REGISTRABLE
SECURITIES INCLUDING REGISTRABLE SECURITIES IN ANY SUCH REGISTRATION),
INCLUDING, WITHOUT LIMITATION, ALL FEDERAL AND “BLUE SKY” REGISTRATION AND
QUALIFICATION FEES, PRINTERS’ AND ACCOUNTING FEES, AND FEES AND DISBURSEMENTS OF
COUNSEL FOR LBI, SHALL BE BORNE BY LBI.

 

(C)           FORM S-3 REGISTRATION.  IF AT ANY TIME AFTER THE THIRD ANNIVERSARY
OF THE DATE OF THIS AGREEMENT, LBI RECEIVES FROM ANY HOLDER OF REGISTRABLE
SECURITIES OR GROUP OF HOLDERS OF REGISTRABLE SECURITIES HOLDING AT LEAST 25% OF
ALL REGISTRABLE SECURITIES THEN OUTSTANDING A WRITTEN REQUEST OR REQUESTS THAT
LBI EFFECT A REGISTRATION ON FORM S-3 AND ANY RELATED QUALIFICATION OR
COMPLIANCE, THEN LBI WILL:

 

(I)            NOTICE.  PROMPTLY GIVE WRITTEN NOTICE OF THE PROPOSED
REGISTRATION AND THE HOLDER’S OR HOLDERS’ OF REGISTRABLE SECURITIES REQUEST
THEREFOR, AND ANY RELATED QUALIFICATION OR COMPLIANCE, TO ALL OTHER HOLDERS OF
REGISTRABLE SECURITIES. EACH HOLDER OF REGISTRABLE SECURITIES DESIRING TO
INCLUDE IN ANY SUCH REGISTRATION ALL OR ANY PART OF THE REGISTRABLE SECURITIES
HELD BY SUCH HOLDER SHALL, WITHIN 20 DAYS AFTER RECEIPT OF THE ABOVE-DESCRIBED
NOTICE FROM LBI, SO NOTIFY LBI IN WRITING AND, IN SUCH NOTICE, SHALL INFORM LBI
OF THE MAXIMUM NUMBER OF REGISTRABLE SECURITIES SUCH HOLDER WISHES TO INCLUDE IN
SUCH REGISTRATION.

 

(II)           REGISTRATION.  AS SOON AS PRACTICABLE, EFFECT SUCH REGISTRATION
AND ALL SUCH QUALIFICATIONS AND COMPLIANCES AS MAY BE SO REQUESTED AND AS WOULD
PERMIT OR FACILITATE THE SALE AND DISTRIBUTION OF UP TO ALL OF THE REGISTRABLE
SECURITIES THEN OUTSTANDING.  THE NUMBER OF REGISTRABLE SECURITIES OF EACH
HOLDER INCLUDED IN SUCH REGISTRATION SHALL BE ALLOCATED ON A PRO RATA BASIS
BASED ON THE TOTAL NUMBER OF REGISTRABLE SECURITIES REQUESTED TO BE INCLUDED IN
SUCH REGISTRATION BY THE REQUESTING HOLDERS AND THE HOLDERS OF REGISTRABLE
SECURITIES JOINING IN SUCH REQUEST AS SPECIFIED IN A WRITTEN REQUEST GIVEN
WITHIN 20 DAYS AFTER RECEIPT OF SUCH WRITTEN NOTICE FROM LBI; PROVIDED, HOWEVER,
THAT LBI SHALL NOT BE OBLIGATED TO EFFECT ANY SUCH REGISTRATION, QUALIFICATION
OR COMPLIANCE PURSUANT TO THIS SECTION 1(C):

 

(A)          IF FORM S-3 IS NOT AVAILABLE FOR SUCH OFFERING BY THE HOLDERS OF
REGISTRABLE SECURITIES;

 

(B)           IF THE HOLDERS OF REGISTRABLE SECURITIES PROPOSE TO SELL
REGISTRABLE SECURITIES AT AN AGGREGATE PRICE TO THE PUBLIC OF LESS THAN
$2,000,000;

 

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(C)           IF LBI SHALL FURNISH TO THE HOLDERS OF REGISTRABLE SECURITIES A
CERTIFICATE SIGNED BY THE CHAIRMAN OF LBI STATING THAT IN THE GOOD FAITH
JUDGMENT OF THE BOARD OF DIRECTORS OF LBI, IT WOULD BE MATERIALLY DETRIMENTAL TO
LBI OR ITS BUSINESS FOR SUCH FORM S-3 REGISTRATION TO BE EFFECTED AT SUCH TIME
OR, IF SUCH FORM S-3 REGISTRATION HAS ALREADY BEEN EFFECTED, FOR RESALES OF
REGISTRABLE SECURITIES TO BE MADE PURSUANT TO SUCH FORM S-3 REGISTRATION
STATEMENT, IN WHICH EVENT LBI SHALL HAVE THE RIGHT TO DEFER THE FILING OF THE
FORM S-3 REGISTRATION STATEMENT NO MORE THAN ONCE DURING ANY 12-MONTH PERIOD FOR
A PERIOD OF NOT MORE THAN 180 DAYS AFTER RECEIPT OF THE REQUEST OF THE HOLDER OR
HOLDERS OF REGISTRABLE SECURITIES UNDER THIS SECTION 1(C) AND THE USE OF THE
FORM S-3 REGISTRATION STATEMENT AND THE PROSPECTUS RELATED THERETO WILL BE
DEFERRED OR SUSPENDED AND WILL NOT RECOMMENCE UNTIL (X) THE HOLDERS OF
REGISTRABLE SECURITIES REQUESTING INCLUSION OF THEIR REGISTRABLE SECURITIES IN
SUCH FORM S-3 REGISTRATION RECEIVE FROM LBI COPIES OF THE SUPPLEMENTED OR
AMENDED PROSPECTUS RELATED TO THE REGISTRATION STATEMENT OR (Y) THE HOLDERS OF
REGISTRABLE SECURITIES REQUESTING INCLUSION OF THEIR REGISTRABLE SECURITIES IN
SUCH FORM S-3 REGISTRATION ARE ADVISED IN WRITING BY LBI THAT THE PROSPECTUS
RELATED TO THE REGISTRATION STATEMENT MAY BE USED, AS APPLICABLE; PROVIDED,
HOWEVER, THAT IF LBI SHALL SO DELAY THE FILING OF A REGISTRATION STATEMENT, IT
SHALL PROMPTLY NOTIFY THE APPLICABLE HOLDERS OF REGISTRABLE SECURITIES OF SUCH
DETERMINATION, AND SUCH HOLDERS OF REGISTRABLE SECURITIES SHALL HAVE THE RIGHT
TO WITHDRAW THE RELEVANT REQUEST FOR REGISTRATION, IN WHICH CASE SUCH
REGISTRATION SHALL NOT COUNT TOWARDS THE LIMIT SET FORTH IN SECTION 1(C)(II)(D);

 

(D)          IF LBI HAS ALREADY EFFECTED A REGISTRATION ON FORM S-3 FOR THE
HOLDERS OF REGISTRABLE SECURITIES PURSUANT TO THIS SECTION 1(C) WITHIN THE
TWELVE (12)-MONTH PERIOD IMMEDIATELY PRECEDING RECEIPT OF THE WRITTEN REQUEST
FOR SUCH REGISTRATION;

 

(E)           IF THE SEC REFUSES TO DECLARE SUCH REGISTRATION STATEMENT
EFFECTIVE DUE TO THE PARTICIPATION OF ANY PARTICULAR HOLDER OF REGISTRABLE
SECURITIES IN SUCH REGISTRATION (UNLESS SUCH HOLDER OF REGISTRABLE SECURITIES
WITHDRAWS ALL SUCH HOLDER’S REGISTRABLE SECURITIES FROM SUCH REGISTRATION) OR IF
THE MANNER IN WHICH ANY REGISTRABLE SECURITIES ARE DISPOSED OF PURSUANT TO THE
FORM S-3 REGISTRATION STATEMENT IS NOT INCLUDED WITHIN THE PLAN OF DISTRIBUTION
SET FORTH IN THE PROSPECTUS FOR THE FORM S-3 REGISTRATION STATEMENT; OR

 

(F)           IN ANY PARTICULAR JURISDICTION IN WHICH LBI WOULD BE REQUIRED TO
QUALIFY TO DO BUSINESS OR TO EXECUTE A GENERAL CONSENT TO SERVICE OF PROCESS IN
EFFECTING SUCH REGISTRATION, QUALIFICATION OR COMPLIANCE.

 

Subject to the foregoing, LBI shall file a Form S-3 registration statement
covering the Registrable Securities and other securities so requested to be
registered pursuant to this Section 1(c) as soon as practicable, and in any
event no later than 90 days, after receipt of the request or requests of the
holders of Registrable Securities for such registration.

 

(III)          EXPENSES.  LBI SHALL PAY ALL EXPENSES INCURRED IN CONNECTION WITH
THE REGISTRATION REQUESTED PURSUANT TO THIS SECTION 1(C) (EXCLUDING
UNDERWRITERS’ OR BROKERS’ DISCOUNTS AND COMMISSIONS), INCLUDING, WITHOUT
LIMITATION, ALL FILING, REGISTRATION

 

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AND QUALIFICATION, PRINTERS’ AND ACCOUNTING FEES AND THE REASONABLE FEES AND
DISBURSEMENTS OF ONE (1) COUNSEL FOR THE SELLING HOLDER OR HOLDERS OF
REGISTRABLE SECURITIES AND COUNSEL FOR LBI. EACH HOLDER OF REGISTRABLE
SECURITIES PARTICIPATING IN SUCH REGISTRATION SHALL BEAR SUCH HOLDER’S
PROPORTIONATE SHARE (BASED ON THE NUMBER OF SHARES SOLD BY SUCH HOLDER OVER THE
TOTAL NUMBER OF SHARES INCLUDED IN SUCH REGISTRATION AT THE TIME IT GOES
EFFECTIVE) OF ALL DISCOUNTS, COMMISSIONS OR OTHER AMOUNTS PAYABLE TO
UNDERWRITERS OR BROKERS IN CONNECTION WITH SUCH OFFERING.

 

(IV)          MANNER OF SALES. ANY SALE OF REGISTRABLE SECURITIES PURSUANT TO A
REGISTRATION EFFECTED PURSUANT TO THIS SECTION 1(C) MAY ONLY BE MADE IN
ACCORDANCE WITH THE METHOD OR METHODS OF DISTRIBUTION OF SUCH REGISTRABLE
SECURITIES THAT ARE DESCRIBED IN THE REGISTRATION STATEMENT FOR THE REGISTRATION
AND PERMITTED BY SUCH FORM OF REGISTRATION STATEMENT.  NO SALE OF REGISTRABLE
SECURITIES PURSUANT TO ANY REGISTRATION EFFECTED PURSUANT TO THIS SECTION 1(C)
MAY BE EFFECTED PURSUANT TO ANY UNDERWRITTEN OFFERING WITHOUT LBI’S PRIOR
WRITTEN CONSENT, WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD.

 

Notwithstanding anything to the contrary contained herein, in the event of the
death of either USAuto Holder prior to the third anniversary of the date hereof,
such USAuto Holder’s executor, administrator, trustee, or personal
representative to whom such USAuto Holder’s Registrable Securities are
transferred upon such death shall be entitled to request the registration of
such Registrable Securities pursuant to the terms of this Section 1(c) at any
time thereafter, provided that any such request and registration shall be
subject to all of the other limitations specified herein.

 

(D)           OBLIGATIONS OF LBI.  WHENEVER REQUIRED TO EFFECT THE REGISTRATION
OF ANY REGISTRABLE SECURITIES UNDER THIS AGREEMENT, LBI SHALL, AS EXPEDITIOUSLY
AS REASONABLY PRACTICABLE:

 

(I)            PREPARE AND FILE WITH THE SEC A REGISTRATION STATEMENT RELATING
TO THE APPLICABLE REGISTRATION ON THE APPROPRIATE FORM UNDER THE 1933 ACT, WHICH
FORM SHALL BE AVAILABLE FOR THE SALE OF THE REGISTRABLE SECURITIES IN ACCORDANCE
WITH THE INTENDED METHOD OR METHODS OF DISTRIBUTION THEREOF AND SHALL INCLUDE
ALL FINANCIAL STATEMENTS OF LBI, AND USE COMMERCIALLY REASONABLE EFFORTS TO
CAUSE SUCH REGISTRATION STATEMENT TO BECOME EFFECTIVE; PROVIDED THAT BEFORE
FILING A REGISTRATION STATEMENT OR PROSPECTUS OR ANY AMENDMENTS OR SUPPLEMENTS
THERETO, INCLUDING DOCUMENTS INCORPORATED BY REFERENCE AFTER THE FILING OF THE
REGISTRATION STATEMENT, LBI WILL FURNISH ONE COUNSEL SELECTED BY THE HOLDERS OF
A MAJORITY OF THE SHARES OF REGISTRABLE SECURITIES COVERED BY SUCH REGISTRATION
STATEMENT, COPIES OF ALL SUCH DOCUMENTS PROPOSED TO BE FILED, WHICH DOCUMENTS,
SUBJECT TO COMPLIANCE WITH APPLICABLE SECURITIES LAWS, WILL BE SUBJECT TO THE
REVIEW OF SUCH COUNSEL, AND LBI WILL NOT FILE ANY REGISTRATION STATEMENT OR
AMENDMENT THERETO OR ANY PROSPECTUS OR ANY SUPPLEMENT THERETO (EXCLUDING ANY
DOCUMENTS INCORPORATED BY REFERENCE) TO WHICH SUCH COUNSEL SHALL REASONABLY
OBJECT;

 

(II)           PREPARE AND FILE WITH THE SEC SUCH AMENDMENTS AND POST-EFFECTIVE
AMENDMENTS TO THE REGISTRATION STATEMENT AS MAY BE NECESSARY TO KEEP THE
REGISTRATION STATEMENT EFFECTIVE FOR THE APPLICABLE PERIOD SPECIFIED (BUT IN NO
EVENT SHALL LBI BE REQUIRED TO KEEP SUCH REGISTRATION STATEMENT EFFECTIVE FOR
MORE THAN 12 MONTHS), OR SUCH

 

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SHORTER PERIOD WHICH WILL TERMINATE WHEN ALL REGISTRABLE SECURITIES COVERED BY
SUCH REGISTRATION STATEMENT HAVE BEEN SOLD; CAUSE THE PROSPECTUS TO BE
SUPPLEMENTED BY ANY REQUIRED PROSPECTUS SUPPLEMENT, AND AS SO SUPPLEMENTED TO BE
FILED PURSUANT TO RULE 424 UNDER THE 1933 ACT; AND COMPLY WITH THE PROVISIONS OF
THE 1933 ACT WITH RESPECT TO DISPOSITION OF ALL SECURITIES COVERED BY SUCH
REGISTRATION STATEMENT DURING THE APPLICABLE PERIOD IN ACCORDANCE WITH THE
INTENDED METHOD OR METHODS OF DISTRIBUTION BY THE SELLERS THEREOF SET FORTH IN
SUCH REGISTRATION STATEMENT OR SUPPLEMENT TO THE PROSPECTUS; LBI SHALL NOT BE
DEEMED TO HAVE USED COMMERCIALLY REASONABLE EFFORTS TO KEEP A REGISTRATION
STATEMENT EFFECTIVE DURING THE APPLICABLE PERIOD IF IT VOLUNTARILY TAKES ANY
ACTION THAT WOULD RESULT IN SELLING HOLDERS OF THE REGISTRABLE SECURITIES
COVERED THEREBY NOT BEING ABLE TO SELL SUCH REGISTRABLE SECURITIES DURING THAT
PERIOD UNLESS SUCH ACTION IS REQUIRED UNDER APPLICABLE LAW; PROVIDED THAT THE
FOREGOING SHALL NOT APPLY TO ACTIONS TAKEN BY LBI IN GOOD FAITH AND FOR VALID
BUSINESS REASONS, INCLUDING WITHOUT LIMITATION, MERGER, ACQUISITION OR DIVESTURE
OF ASSETS OR OTHER MATERIAL TRANSACTION, SO LONG AS LBI PROMPTLY THEREAFTER
COMPLIES WITH THE REQUIREMENTS OF SECTION 2(D)(IX) HEREOF, IF APPLICABLE;

 

(III)          NOTIFY THE SELLING HOLDERS OF REGISTRABLE SECURITIES PROMPTLY,
AND (IF REQUESTED BY ANY SUCH PERSON) CONFIRM SUCH NOTIFICATION IN WRITING, (A)
WHEN THE PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT OR POST-EFFECTIVE AMENDMENT HAS
BEEN FILED, AND WITH RESPECT TO THE REGISTRATION STATEMENT OR ANY POST-EFFECTIVE
AMENDMENT, WHEN THE SAME HAS BECOME EFFECTIVE, (B) OF ANY REQUEST BY THE SEC FOR
AMENDMENTS OR SUPPLEMENTS TO THE REGISTRATION STATEMENT OR THE PROSPECTUS OR FOR
ADDITIONAL INFORMATION, (C) OF THE ISSUANCE BY THE SEC OF ANY STOP ORDER
SUSPENDING THE EFFECTIVENESS OF THE REGISTRATION STATEMENT OR THE INITIATION OF
ANY PROCEEDINGS FOR THAT PURPOSE, (D) OF THE RECEIPT BY LBI OF ANY NOTIFICATION
WITH RESPECT TO THE SUSPENSION OF THE QUALIFICATION OF THE REGISTRABLE
SECURITIES FOR SALE IN ANY JURISDICTION OR THE INITIATION OR THREATENING OF ANY
PROCEEDING FOR SUCH PURPOSE AND (E) OF THE HAPPENING OF ANY EVENT WHICH MAKES
ANY STATEMENT MADE IN THE REGISTRATION STATEMENT, THE PROSPECTUS OR ANY DOCUMENT
INCORPORATED THEREIN BY REFERENCE UNTRUE OR WHICH REQUIRES THE MAKING OF ANY
CHANGES IN THE REGISTRATION STATEMENT, THE PROSPECTUS OR ANY DOCUMENT
INCORPORATED THEREIN BY REFERENCE IN ORDER TO MAKE THE STATEMENTS THEREIN NOT
MISLEADING;

 

(IV)          USE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN THE WITHDRAWAL OF
ANY ORDER SUSPENDING THE EFFECTIVENESS OF THE REGISTRATION STATEMENT AT THE
EARLIEST POSSIBLE MOMENT;

 

(V)           FURNISH TO EACH SELLING HOLDER OF REGISTRABLE SECURITIES, WITHOUT
CHARGE, AT LEAST ONE SIGNED COPY OF THE REGISTRATION STATEMENT AND ANY
POST-EFFECTIVE AMENDMENT THERETO, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES,
ALL DOCUMENTS INCORPORATED THEREIN BY REFERENCE AND ALL EXHIBITS (INCLUDING
THOSE INCORPORATED BY REFERENCE);

 

(VI)          DELIVER TO EACH SELLING HOLDER OF REGISTRABLE SECURITIES, WITHOUT
CHARGE, AS MANY COPIES OF THE PROSPECTUS (INCLUDING EACH PRELIMINARY PROSPECTUS)
AND ANY AMENDMENT OR SUPPLEMENT THERETO (IN EACH CASE INCLUDING ALL EXHIBITS) AS
SUCH PERSONS MAY REASONABLY REQUEST IN ORDER TO FACILITATE THE DISPOSITION OF
THE REGISTRABLE SECURITIES OWNED BY SUCH PERSON; LBI CONSENTS TO THE USE OF THE
PROSPECTUS OR ANY AMENDMENT OR

 

7

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SUPPLEMENT THERETO BY EACH OF THE SELLING HOLDERS OF REGISTRABLE SECURITIES IN
CONNECTION WITH THE OFFERING AND SALE OF THE REGISTRABLE SECURITIES COVERED BY
THE PROSPECTUS OR ANY AMENDMENT OR SUPPLEMENT THERETO;

 

(VII)         PRIOR TO ANY PUBLIC OFFERING OF REGISTRABLE SECURITIES, USE
COMMERCIALLY REASONABLE EFFORTS TO REGISTER OR QUALIFY OR COOPERATE WITH THE
SELLING HOLDERS OF REGISTRABLE SECURITIES AND THEIR RESPECTIVE COUNSEL IN
CONNECTION WITH THE REGISTRATION OR QUALIFICATION OF SUCH REGISTRABLE SECURITIES
FOR OFFER AND SALE UNDER THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTIONS
AS ANY SELLER REASONABLY REQUESTS IN WRITING AND DO ANY AND ALL OTHER ACTS OR
THINGS REASONABLY NECESSARY OR ADVISABLE TO ENABLE THE DISPOSITION IN SUCH
JURISDICTIONS OF THE REGISTRABLE SECURITIES COVERED BY THE REGISTRATION
STATEMENT; PROVIDED, HOWEVER, THAT LBI SHALL NOT BE REQUIRED IN CONNECTION
THEREWITH OR AS A CONDITION THERETO TO QUALIFY TO DO BUSINESS OR TO FILE A
GENERAL CONSENT TO SERVICE OF PROCESS IN ANY SUCH STATES OR JURISDICTIONS;

 

(VIII)        COOPERATE WITH THE SELLING HOLDERS OF REGISTRABLE SECURITIES TO
FACILITATE THE TIMELY PREPARATION AND DELIVERY OF CERTIFICATES REPRESENTING
REGISTRABLE SECURITIES TO BE SOLD AND NOT BEARING ANY RESTRICTIVE LEGENDS EXCEPT
AS REQUIRED BY THE CERTIFICATE OF INCORPORATION OF LBI; AND ENABLE SUCH
REGISTRABLE SECURITIES TO BE IN SUCH DENOMINATIONS AND REGISTERED IN SUCH NAMES
AS THE HOLDERS OF SUCH REGISTRABLE SECURITIES MAY REQUEST AT LEAST TWO BUSINESS
DAYS PRIOR TO ANY SALE OF REGISTRABLE SECURITIES;

 

(IX)           UPON THE OCCURRENCE OF ANY EVENT CONTEMPLATED BY SECTION
2(D)(III)(E) ABOVE, SUBJECT TO LBI’S ABILITY TO POSTPONE THE PREPARATION OF SUCH
SUPPLEMENT OR AMENDMENT PENDING THE PUBLIC ANNOUNCEMENT OF A MATERIAL EVENT SUCH
AS A MERGER OR ACQUISITION OR DIVESTITURE OF ASSETS, PREPARE A SUPPLEMENT OR
POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT OR THE RELATED PROSPECTUS
OR ANY DOCUMENT INCORPORATED THEREIN BY REFERENCE OR FILE ANY OTHER REQUIRED
DOCUMENT SO THAT, AS THEREAFTER DELIVERED TO THE PURCHASERS OF THE REGISTRABLE
SECURITIES, THE PROSPECTUS WILL NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL
FACT OR OMIT TO STATE ANY MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS THEREIN
NOT MISLEADING;

 

(X)            CAUSE ALL SHARES OWNED BY THE HOLDERS OF REGISTRABLE SECURITIES
COVERED BY THE REGISTRATION STATEMENT TO BE LISTED ON EACH SECURITIES EXCHANGE
ON WHICH SIMILAR SECURITIES ISSUED BY LBI ARE THEN LISTED; AND

 

(XI)           MAKE AVAILABLE FOR INSPECTION BY REPRESENTATIVES OF THE HOLDERS
OF THE REGISTRABLE SECURITIES AND ANY ATTORNEY OR ACCOUNTANT RETAINED BY THE
SELLERS, ALL FINANCIAL AND OTHER RECORDS, PERTINENT CORPORATE DOCUMENTS AND
PROPERTIES OF LBI AND CAUSE LBI’S OFFICERS, DIRECTORS AND EMPLOYEES TO SUPPLY
ALL INFORMATION REASONABLY REQUESTED BY ANY SUCH REPRESENTATIVE, ATTORNEY OR
ACCOUNTANT IN CONNECTION WITH SUCH REGISTRATION; PROVIDED THAT ANY RECORDS,
INFORMATION OR DOCUMENTS THAT ARE DESIGNATED BY LBI IN WRITING AS CONFIDENTIAL
SHALL BE KEPT CONFIDENTIAL BY SUCH PERSONS UNLESS DISCLOSURE OF SUCH RECORDS,
INFORMATION OR DOCUMENTS IS REQUIRED BY COURT OR ADMINISTRATIVE ORDER.

 

Each holder of Registrable Securities agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from LBI of the happening of any
event of the kind

 

8

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described in Section 2(d)(ix) hereof, such holder will forthwith discontinue
disposition of Registrable Securities until such holder’s receipt of the copies
of the supplemented or amended prospectus contemplated by Section 2(d)(ix)
hereof, or until it is advised in writing (the “Advice”) by LBI that the use of
the prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the prospectus, and,
if so directed by LBI such holder will deliver to LBI (at LBI’s expense), all
copies, other than permanent file copies then in such holder’s possession, of
the prospectus covering such Registrable Securities current at the time of
receipt of such notice.

 

(E)           FURNISH INFORMATION.  IT SHALL BE A CONDITION PRECEDENT TO THE
OBLIGATIONS OF LBI TO TAKE ANY ACTION PURSUANT TO SECTION 1(B) OR 1(C) THAT THE
SELLING HOLDERS OF REGISTRABLE SECURITIES SHALL FURNISH TO LBI SUCH INFORMATION
REGARDING THEMSELVES AND THE REGISTRABLE SECURITIES HELD BY THEM, AND THE
INTENDED METHOD OF DISPOSITION OF SUCH SECURITIES, AS SHALL BE REASONABLY
REQUIRED TO TIMELY EFFECT THE REGISTRATION OF THEIR REGISTRABLE SECURITIES.

 

(F)            INDEMNIFICATION.  IN THE EVENT ANY REGISTRABLE SECURITIES ARE
INCLUDED IN A REGISTRATION STATEMENT UNDER SECTION 1(B) OR (C).

 

(I)            BY LBI.  TO THE EXTENT PERMITTED BY LAW, LBI WILL INDEMNIFY AND
HOLD HARMLESS EACH HOLDER OF REGISTRABLE SECURITIES THAT HAS INCLUDED
REGISTRABLE SECURITIES IN SUCH REGISTRATION STATEMENT, ANY UNDERWRITER (AS
DEFINED IN THE 1933 ACT) FOR SUCH HOLDERS, EACH OF THEIR RESPECTIVE
REPRESENTATIVES AND AGENTS AND SUCH HOLDERS’ OF REGISTRABLE SECURITIES LEGAL
COUNSEL AND INDEPENDENT ACCOUNTANTS, AND EACH PERSON, IF ANY, WHO CONTROLS SUCH
HOLDER OF REGISTRABLE SECURITIES OR UNDERWRITER WITHIN THE MEANING OF THE 1933
ACT OR THE 1934 ACT, AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES OR LIABILITIES
TO WHICH THEY MAY BECOME SUBJECT UNDER THE 1933 ACT, THE L934 ACT OR OTHER
FEDERAL OR STATE LAW, INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR
ACTIONS IN RESPECT THEREOF) ARISE OUT OF OR ARE BASED UPON ANY OF THE FOLLOWING
STATEMENTS, OMISSIONS OR VIOLATIONS (EACH OF THE FOLLOWING BEING A “VIOLATION”):

 

(A)          ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT
CONTAINED IN SUCH REGISTRATION STATEMENT, INCLUDING ANY PRELIMINARY PROSPECTUS
OR FINAL PROSPECTUS CONTAINED THEREIN, OFFERING CIRCULAR, OR OTHER DOCUMENT OR
ANY AMENDMENTS OR SUPPLEMENTS THERETO INCIDENT TO ANY SUCH REGISTRATION,
QUALIFICATION OR COMPLIANCE;

 

(B)           THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT
REQUIRED TO BE STATED THEREIN, OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT
MISLEADING, OR

 

(C)           ANY VIOLATION OR ALLEGED VIOLATION BY LBI OF THE 1933 ACT, THE
1934 ACT, ANY FEDERAL OR STATE SECURITIES LAW OR ANY RULE OR REGULATION
PROMULGATED UNDER THE 1933 ACT, THE 1934 ACT OR ANY FEDERAL OR STATE SECURITIES
LAW IN CONNECTION WITH ANY ACTION OR INACTION BY LBI IN CONNECTION WITH THE
OFFERING COVERED BY SUCH REGISTRATION STATEMENT;

 

9

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and LBI will reimburse each such holder of Registrable Securities, each of their
respective representatives and agents and such holder’s legal counsel and
independent accountants, underwriter or controlling person if any, for any legal
or other expenses reasonably incurred by them, as incurred, in connection with
investigating, preparing or defending any such loss, claim, damage, liability or
action; provided however, that the indemnity agreement contained in this
subsection 1(g)(i) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of LBI (which consent shall not be unreasonably withheld or
delayed), nor shall LBI be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon
a Violation which occurs in reliance upon and in conformity with information
furnished in writing for use in connection with such registration by such holder
of Registrable Securities, representative, agent, legal counsel, independent
accountant, underwriter or controlling person, if any, of such holder of
Registrable Securities.

 

(II)           BY SELLING HOLDERS OF REGISTRABLE SECURITIES.  TO THE EXTENT
PERMITTED BY LAW, EACH SELLING HOLDER OF REGISTRABLE SECURITIES, SEVERALLY BUT
NOT JOINTLY, IF REGISTRABLE SECURITIES HELD BY SUCH HOLDER OF REGISTRABLE
SECURITIES ARE INCLUDED IN THE SECURITIES AS TO WHICH SUCH REGISTRATION,
QUALIFICATION OR COMPLIANCE IS BEING EFFECTED, WILL INDEMNIFY AND HOLD HARMLESS
LBI, EACH OF ITS DIRECTORS, EACH OF ITS OFFICERS WHO HAVE SIGNED THE
REGISTRATION STATEMENT, EACH PERSON, IF ANY, WHO CONTROLS LBI WITHIN THE MEANING
OF THE 1933 ACT, ANY UNDERWRITER AND ANY OTHER HOLDER OF REGISTRABLE SECURITIES
SELLING SECURITIES UNDER SUCH REGISTRATION STATEMENT, EACH OF THEIR RESPECTIVE
REPRESENTATIVES AND AGENTS AND SUCH HOLDER’S LEGAL COUNSEL AND INDEPENDENT
ACCOUNTANTS, OR ANY PERSON WHO CONTROLS SUCH HOLDER WITHIN THE MEANING OF THE
1933 ACT OR THE 1934 ACT, AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES OR
LIABILITIES (JOINT OR SEVERAL) TO WHICH THEY MAY BECOME SUBJECT UNDER THE 1933
ACT, THE 1934 ACT OR OTHER FEDERAL OR STATE LAW, INSOFAR AS SUCH LOSSES, CLAIMS,
DAMAGES OR LIABILITIES (OR ACTIONS IN RESPECT THEREOF) ARISE OUT OF OR ARE BASED
UPON ANY VIOLATION UNDER SUBSECTION 1(G)(I)(A) OR (B), IN EACH CASE TO THE
EXTENT (AND ONLY TO THE EXTENT) THAT SUCH VIOLATION UNDER SUBSECTION 1(G)(I)(A)
OR (B) OCCURS IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION
FURNISHED BY SUCH HOLDER OF REGISTRABLE SECURITIES FOR USE IN CONNECTION WITH
SUCH REGISTRATION; AND EACH SUCH HOLDER OF REGISTRABLE SECURITIES WILL REIMBURSE
ANY LEGAL OR OTHER EXPENSES REASONABLY INCURRED BY LBI OR ANY SUCH DIRECTOR,
OFFICER, CONTROLLING PERSON, UNDERWRITER OR OTHER HOLDER OF REGISTRABLE
SECURITIES, REPRESENTATIVE, AGENT, LEGAL COUNSEL, INDEPENDENT ACCOUNTANT OR
CONTROLLING PERSON OF SUCH OTHER HOLDER OF REGISTRABLE SECURITIES IN CONNECTION
WITH INVESTIGATING, PREPARING OR DEFENDING ANY SUCH LOSS, CLAIM, DAMAGE,
LIABILITY OR ACTION; PROVIDED, HOWEVER, THAT THE INDEMNITY AGREEMENT CONTAINED
IN THIS SUBSECTION 1(G)(II) SHALL NOT APPLY TO AMOUNTS PAID IN SETTLEMENT OF ANY
SUCH LOSS, CLAIM, DAMAGE, LIABILITY OR ACTION IF SUCH SETTLEMENT IS EFFECTED
WITHOUT THE CONSENT OF THE APPLICABLE HOLDER OF REGISTRABLE SECURITIES (WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD); AND PROVIDED FURTHER, THAT THE
TOTAL AMOUNTS PAYABLE IN INDEMNITY BY A HOLDER OF REGISTRABLE SECURITIES UNDER
THIS SECTION 1(G)(II) IN RESPECT OF ANY VIOLATION UNDER SUBSECTION 1(G)(I)(A) OR
(B) SHALL NOT EXCEED THE NET PROCEEDS RECEIVED BY SUCH HOLDER OF REGISTRABLE
SECURITIES IN THE REGISTERED OFFERING OUT OF WHICH SUCH VIOLATION UNDER
SUBSECTION 1(G)(I)(A) OR (B) ARISES.

 

10

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(III)          CONDUCT OF INDEMNIFICATION PROCEEDINGS. ANY PERSON ENTITLED TO
INDEMNIFICATION HEREUNDER WILL (A) GIVE PROMPT NOTICE TO THE INDEMNIFYING PARTY
OF ANY CLAIM WITH RESPECT TO WHICH IT SEEKS INDEMNIFICATION AND (B) PERMIT SUCH
INDEMNIFYING PARTY TO ASSUME THE DEFENSE OF SUCH CLAIM WITH COUNSEL REASONABLY
SATISFACTORY TO THE INDEMNIFIED PARTY; PROVIDED, HOWEVER, THAT ANY PERSON
ENTITLED TO INDEMNIFICATION HEREUNDER SHALL HAVE THE RIGHT TO EMPLOY SEPARATE
COUNSEL AND TO PARTICIPATE IN THE DEFENSE OF SUCH CLAIM, BUT THE FEES AND
EXPENSES OF SUCH COUNSEL SHALL BE AT THE EXPENSE OF SUCH PERSON UNLESS (X) THE
INDEMNIFYING PARTY HAS AGREED TO PAY SUCH FEES OR EXPENSES, (Y) THE INDEMNIFYING
PARTY SHALL HAVE FAILED TO ASSUME THE DEFENSE OF SUCH CLAIM AND EMPLOY COUNSEL
REASONABLY SATISFACTORY TO SUCH PERSON OR (Z) BASED UPON ADVICE OF COUNSEL OF
SUCH PERSON, A CONFLICT OF INTEREST MAY EXIST BETWEEN SUCH PERSON AND THE
INDEMNIFYING PARTY WITH RESPECT TO SUCH CLAIMS (IN WHICH CASE, IF THE PERSON
NOTIFIES THE INDEMNIFYING PARTY IN WRITING THAT SUCH PERSON ELECTS TO EMPLOY
SEPARATE COUNSEL AT THE EXPENSE OF THE INDEMNIFYING PARTY, THE INDEMNIFYING
PARTY SHALL NOT BE PERMITTED TO ASSUME THE DEFENSE OF SUCH CLAIM ON BEHALF OF
SUCH PERSON), IN EACH OF WHICH EVENTS THE FEES AND EXPENSES OF SUCH COUNSEL
SHALL BE AT THE EXPENSE OF THE INDEMNIFYING PARTY. THE INDEMNIFYING PARTY WILL
NOT BE SUBJECT TO ANY LIABILITY FOR ANY SETTLEMENT MADE WITHOUT ITS CONSENT (BUT
SUCH CONSENT WILL NOT BE UNREASONABLY WITHHELD), BUT IF SETTLED WITH ITS WRITTEN
CONSENT, OR IF THERE BE A FINAL JUDGMENT FOR THE PLAINTIFF IN ANY SUCH ACTION OR
PROCEEDING, THE INDEMNIFYING PARTY SHALL INDEMNIFY AND HOLD HARMLESS THE
INDEMNIFIED PARTIES FROM AND AGAINST ANY LOSS OR LIABILITY (TO THE EXTENT STATED
ABOVE) BY REASON OF SUCH SETTLEMENT OR JUDGMENT. NO INDEMNIFIED PARTY WILL BE
REQUIRED TO CONSENT TO ENTRY OF ANY JUDGMENT OR ENTER INTO ANY SETTLEMENT WHICH
DOES NOT INCLUDE AS AN UNCONDITIONAL TERM THEREOF THE GIVING BY THE CLAIMANT OR
PLAINTIFF TO SUCH INDEMNIFIED PARTY OF A RELEASE FROM ALL LIABILITY IN RESPECT
TO SUCH CLAIM OR LITIGATION.

 

(IV)          DEFECT ELIMINATED IN FINAL PROSPECTUS. THE FOREGOING INDEMNITY
AGREEMENTS OF LBI AND THE HOLDERS OF REGISTRABLE SECURITIES ARE SUBJECT TO THE
CONDITION THAT, INSOFAR AS THEY RELATE TO ANY VIOLATION MADE IN A PRELIMINARY
PROSPECTUS BUT ELIMINATED OR REMEDIED IN THE AMENDED PROSPECTUS ON FILE WITH THE
SEC AT THE TIME THE REGISTRATION STATEMENT IN QUESTION BECOMES EFFECTIVE OR THE
AMENDED PROSPECTUS FILED WITH THE SEC PURSUANT TO SEC RULE 424(B) (THE “FINAL
PROSPECTUS”), SUCH INDEMNITY AGREEMENT SHALL NOT INURE TO THE BENEFIT OF ANY
PERSON OR ENTITY IF A COPY OF THE FINAL PROSPECTUS WAS FURNISHED TO THE
INDEMNIFIED PARTY AND WAS NOT FURNISHED TO THE PERSON OR ENTITY ASSERTING THE
LOSS, CLAIM, DAMAGE OR LIABILITY AT OR PRIOR TO THE TIME SUCH ACTION IS REQUIRED
BY THE 1933 ACT.

 

(V)           CONTRIBUTION. IN ORDER TO PROVIDE FOR JUST AND EQUITABLE
CONTRIBUTION TO JOINT LIABILITY UNDER THE 1933 ACT IN ANY CASE IN WHICH EITHER
(A) ANY HOLDER OF REGISTRABLE SECURITIES EXERCISING RIGHTS UNDER THIS AGREEMENT,
OR ANY CONTROLLING PERSON OF ANY SUCH HOLDER OF REGISTRABLE SECURITIES, MAKES A
CLAIM FOR INDEMNIFICATION PURSUANT TO THIS SECTION 1(G) BUT IT IS JUDICIALLY
DETERMINED (BY THE ENTRY OF A FINAL JUDGMENT OR DECREE BY A COURT OF COMPETENT
JURISDICTION AND THE EXPIRATION OF TIME TO APPEAL OR THE DENIAL OF THE LAST
RIGHT OF APPEAL) THAT SUCH INDEMNIFICATION MAY NOT BE ENFORCED IN SUCH CASE
NOTWITHSTANDING THE FACT THAT THIS SECTION 1(G) PROVIDES FOR INDEMNIFICATION IN
SUCH CASE, OR (B) CONTRIBUTION MAY BE REQUIRED ON THE PART OF LBI AND ANY SUCH
SELLING HOLDER OF REGISTRABLE SECURITIES OR ANY SUCH CONTROLLING PERSON IN
CIRCUMSTANCES FOR WHICH

 

11

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INDEMNIFICATION IS PROVIDED UNDER THIS SECTION 1(G); THEN, AND IN EACH SUCH
CASE, SUCH INDEMNIFYING PARTY WILL CONTRIBUTE TO THE AGGREGATE LOSSES, CLAIMS,
DAMAGES OR LIABILITIES TO WHICH THEY MAY BE SUBJECT (AFTER CONTRIBUTION FROM
OTHERS) (X) IN SUCH PROPORTION SO THAT SUCH HOLDER OF REGISTRABLE SECURITIES IS
RESPONSIBLE FOR THE PORTION REPRESENTED BY THE PERCENTAGE THAT THE PUBLIC
OFFERING PRICE OF ITS REGISTRABLE SECURITIES OFFERED BY AND SOLD UNDER THE
REGISTRATION BEARS TO THE PUBLIC OFFERING PRICE OF ALL SECURITIES OFFERED BY AND
SOLD UNDER SUCH REGISTRATION, AND LBI AND OTHER SELLING HOLDERS OF REGISTRABLE
SECURITIES ARE RESPONSIBLE FOR THE REMAINING PORTION OR (Y) IF THE ALLOCATION
PROVIDED BY CLAUSE (X) ABOVE IS NOT PERMITTED BY APPLICABLE LAW, IN SUCH
PROPORTION AS IS APPROPRIATE TO REFLECT NOT ONLY THE RELATIVE BENEFITS REFERRED
TO IN CLAUSE (X) ABOVE BUT ALSO THE RELATIVE FAULT OF LBI AND THE HOLDERS OF
REGISTRABLE SECURITIES IN CONNECTION WITH THE STATEMENTS OR OMISSIONS THAT
RESULTED IN SUCH LOSSES, CLAIMS, DAMAGES OR LIABILITIES, AS WELL AS ANY OTHER
RELEVANT EQUITABLE CONSIDERATIONS. THE RELATIVE FAULT OF LBI AND OF THE HOLDERS
OF REGISTRABLE SECURITIES SHALL BE DETERMINED BY REFERENCE TO, AMONG OTHER
THINGS, WHETHER THE UNTRUE OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT OR THE
OMISSION OR ALLEGED OMISSION TO STATE A MATERIAL FACT RELATES TO INFORMATION
SUPPLIED BY LBI OR BY THE HOLDERS OF REGISTRABLE SECURITIES AND THE PARTIES’
RELATIVE INTENT, KNOWLEDGE, ACCESS TO INFORMATION AND OPPORTUNITY TO CORRECT OR
PREVENT SUCH STATEMENT OR OMISSION. THE HOLDERS’ OF REGISTRABLE SECURITIES
RESPECTIVE OBLIGATIONS TO CONTRIBUTE PURSUANT TO THIS SECTION 1(G)(V) ARE
SEVERAL IN PROPORTION TO THE RESPECTIVE NUMBER OF REGISTRABLE SECURITIES THEY
SELL IN THE OFFERING AS TO WHICH SUCH VIOLATION RELATES, AND NOT JOINT. NO SUCH
HOLDER OF REGISTRABLE SECURITIES WILL BE REQUIRED TO CONTRIBUTE ANY AMOUNT IN
EXCESS OF THE PUBLIC OFFERING PRICE OF ALL SUCH REGISTRABLE SECURITIES OFFERED
AND SOLD BY SUCH HOLDER OF REGISTRABLE SECURITIES PURSUANT TO SUCH REGISTRATION
STATEMENT; AND NO PERSON OR ENTITY GUILTY OF FRAUDULENT MISREPRESENTATION
(WITHIN THE MEANING OF SECTION 11(F) OF THE 1933 ACT) WILL BE ENTITLED TO
CONTRIBUTION FROM ANY PERSON OR ENTITY WHO WAS NOT GUILTY OF SUCH FRAUDULENT
MISREPRESENTATION.

 

(VI)          SURVIVAL. THE OBLIGATIONS OF LBI AND THE HOLDERS OF REGISTRABLE
SECURITIES UNDER THIS SECTION 1(G) SHALL SURVIVE THE COMPLETION OF ANY OFFERING
OF REGISTRABLE SECURITIES IN A REGISTRATION STATEMENT, AND OTHERWISE.

 

(G)           RULE 144. LBI HEREBY AGREES THAT IT WILL FILE THE REPORTS REQUIRED
TO BE FILED BY IT UNDER THE 1933 ACT AND THE 1934 ACT AND THE RULES AND
REGULATIONS ADOPTED BY THE SEC THEREUNDER, AND IT WILL TAKE SUCH FURTHER ACTION
AS ANY HOLDER OF REGISTRABLE SECURITIES MAY REASONABLY REQUEST, ALL TO THE
EXTENT REQUIRED FROM TIME TO TIME TO ENABLE SUCH HOLDER TO SELL REGISTRABLE
SECURITIES WITHOUT REGISTRATION UNDER THE 1933 ACT WITHIN THE LIMITATION OF THE
EXEMPTIONS PROVIDED BY (I) RULE 144 UNDER THE 1933 ACT, AS SUCH RULE MAY BE
AMENDED FROM TIME TO TIME, OR (II) ANY SIMILAR RULE OR REGULATION HEREAFTER
ADOPTED BY THE SEC. UPON THE REQUEST OF ANY HOLDER OF REGISTRABLE SECURITIES,
LBI WILL DELIVER TO SUCH HOLDER A WRITTEN STATEMENT AS TO WHETHER IT HAS
COMPLIED WITH SUCH INFORMATION AND REQUIREMENTS.

 

2.             HOLD-BACK AGREEMENTS. EACH HOLDER OF REGISTRABLE SECURITIES
AGREES THAT, IN CONNECTION WITH AN UNDERWRITTEN PUBLIC OFFERING OF LBI EQUITY
SECURITIES, UPON THE REQUEST OF LBI OR THE PRINCIPAL UNDERWRITER MANAGING SUCH
PUBLIC OFFERING, NO SHARES OF LBI EQUITY SECURITIES HELD BY SUCH HOLDER MAY BE
SOLD, OFFERED FOR SALE OR OTHERWISE DISPOSED OF WITHOUT THE PRIOR WRITTEN
CONSENT OF LBI OR SUCH UNDERWRITER, AS THE CASE MAY BE, FOR UP TO ONE HUNDRED

 

12

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EIGHTY (180) DAYS AFTER THE EFFECTIVENESS OF THE REGISTRATION STATEMENT FILED IN
CONNECTION WITH SUCH OFFERING, IF ALL OF LBI’S DIRECTORS AND OFFICERS AGREE TO
BE SIMILARLY BOUND, AND RELEASES FROM ANY AND ALL LOCK-UP AGREEMENTS IN
CONNECTION WITH SUCH OFFERING ARE GRANTED ON A PRO-RATA BASIS. THIS SECTION 2
SHALL NO LONGER APPLY SIX (6) MONTHS AFTER THE HOLDER CEASES TO BE AN OFFICER,
DIRECTOR OR 5% OR MORE STOCKHOLDER OF LBI, AS THE CASE MAY BE.

 

3.             ASSIGNMENT AND AMENDMENT.

 

(A)           ASSIGNMENT. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY:

 

(I)            REGISTRATION RIGHTS; REFUSAL RIGHTS. THE REGISTRATION RIGHTS OF A
HOLDER OF REGISTRABLE SECURITIES UNDER SECTION 1 HEREOF MAY BE ASSIGNED ONLY TO
A PERMITTED TRANSFEREE OR A PARTY WHO ACQUIRES AT LEAST 940,000 SHARES OF
REGISTRABLE SECURITIES (AS SUCH NUMBER SHALL BE ADJUSTED FOR STOCK SPLITS,
DIVIDENDS, COMBINATIONS AND SIMILAR TRANSACTIONS); PROVIDED, HOWEVER, THAT NO
PARTY MAY BE ASSIGNED ANY OF THE FOREGOING RIGHTS UNLESS LBI IS GIVEN WRITTEN
NOTICE BY THE ASSIGNING PARTY AT THE TIME OF SUCH ASSIGNMENT STATING THE NAME
AND ADDRESS OF THE ASSIGNEE AND IDENTIFYING THE SECURITIES OF LBI AS TO WHICH
THE RIGHTS IN QUESTION ARE BEING ASSIGNED; AND PROVIDED FURTHER THAT ANY SUCH
ASSIGNEE SHALL RECEIVE SUCH ASSIGNED RIGHTS SUBJECT TO ALL THE TERMS AND
CONDITIONS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE PROVISIONS OF
THIS SECTION 3.

 

(II)           AGGREGATION.  SHARES OF LBI COMMON  STOCK OWNED BY HOLDERS OF
REGISTRABLE SECURITIES WHICH ARE PARTNERSHIPS, LIMITED LIABILITY COMPANIES,
CORPORATIONS AND OTHER ENTITIES HAVING SUBSTANTIALLY COMMON OWNERSHIP INTERESTS
OR MANAGED BY THE SAME PRINCIPALS OR INVESTMENT ADVISORS OR OWNED BY INDIVIDUAL
INVESTORS AFFILIATED WITH ONE ANOTHER (“AFFILIATED INVESTORS”) SHALL BE
AGGREGATED FOR THE PURPOSES OF THIS AGREEMENT, AND, NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED IN THIS AGREEMENT, ALL RIGHTS GRANTED TO THE HOLDERS OF
REGISTRABLE SECURITIES PURSUANT TO THIS AGREEMENT MAY BE ASSIGNED BETWEEN
AFFILIATED INVESTORS.

 

(B)           AMENDMENT OF RIGHTS. ANY PROVISION OF THIS AGREEMENT MAY BE
AMENDED AND THE OBSERVANCE THEREOF MAY BE WAIVED (EITHER GENERALLY OR IN A
PARTICULAR INSTANCE AND EITHER RETROACTIVELY OR PROSPECTIVELY) ONLY WITH THE
WRITTEN CONSENT OF LBI AND HOLDERS OF REGISTRABLE SECURITIES (AND/OR ANY OF
THEIR PERMITTED SUCCESSORS OR ASSIGNS) HOLDING SHARES OF LBI COMMON STOCK
REPRESENTING A MAJORITY OF ALL THE REGISTRABLE SECURITIES. ANY AMENDMENT OR
WAIVER EFFECTED IN ACCORDANCE WITH THIS SECTION 3(B) SHALL BE BINDING UPON EACH
HOLDER OF REGISTRABLE SECURITIES AND/OR ANY OF THEIR PERMITTED SUCCESSORS OR
ASSIGNS AND LBI.

 

4.             LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS; NO EXISTING
REGISTRATION RIGHTS.  FROM AND AFTER THE DATE OF THIS AGREEMENT, LBI SHALL NOT,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE PERSONS OWNING IN THE AGGREGATE AT
LEAST A MAJORITY OF THE REGISTRABLE SECURITIES THEN ISSUED AND OUTSTANDING ENTER
INTO ANY AGREEMENT WITH ANY HOLDER OR PROSPECTIVE HOLDER OF ANY SECURITIES OF
LBI WHICH WOULD ALLOW SUCH HOLDER OR PROSPECTIVE HOLDER TO INCLUDE SUCH
SECURITIES IN ANY REGISTRATION FILED UNDER SECTION 1(C) OF THIS AGREEMENT,
UNLESS UNDER THE TERMS OF SUCH AGREEMENT, SUCH HOLDER OR PROSPECTIVE HOLDER MAY
INCLUDE SUCH SECURITIES IN ANY SUCH REGISTRATION ONLY TO THE EXTENT THAT THE
INCLUSION OF SUCH HOLDER’S SECURITIES WILL NOT REDUCE THE

 

13

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AMOUNT OF THE REGISTRABLE SECURITIES OF THE USAUTO HOLDERS AND THEIR PERMITTED
SUCCESSORS AND ASSIGNS WHICH IS INCLUDED.  LBI REPRESENTS AND WARRANTS TO THE
USAUTO HOLDERS THAT OTHER THAN (I) THAT CERTAIN REGISTRATION RIGHTS AGREEMENT,
DATED AS OF JULY 1, 2002, BETWEEN LBI AND DONALD J. EDWARDS AND (II) THAT
CERTAIN REGISTRATION RIGHTS AGREEMENT, DATED AS OF AUGUST 16, 1996, BETWEEN LBI
AND HUNTER’S GLEN/FORD, LTD., A TEXAS LIMITED PARTNERSHIP, THERE ARE NO
“REGISTRATION RIGHTS” RELATING TO SECURITIES OF LBI THAT EXIST ON THE DATE
HEREOF OTHER THAN THOSE PROVIDED HEREIN.

 

5.             MISCELLANEOUS.

 

(A)           NOTICES. ANY AND ALL NOTICES REQUIRED OR PERMITTED TO BE GIVEN TO
A PARTY PURSUANT TO THE PROVISIONS OF THIS AGREEMENT SHALL BE IN WRITING AND
SHALL BE EFFECTIVE AND DEEMED TO PROVIDE SUCH PARTY SUFFICIENT NOTICE UNDER THIS
AGREEMENT ON THE EARLIEST OF THE FOLLOWING: (I) AT THE TIME OF PERSONAL
DELIVERY, IF DELIVERY IS IN PERSON; (II) ONE BUSINESS DAY AFTER DEPOSIT WITH AN
EXPRESS OVERNIGHT COURIER FOR UNITED STATES DELIVERIES, OR THREE BUSINESS DAYS
AFTER SUCH DEPOSIT FOR DELIVERIES OUTSIDE OF THE UNITED STATES, WITH PROOF OF
DELIVERY FROM THE COURIER REQUESTED; OR (III) THREE BUSINESS DAYS AFTER DEPOSIT
IN THE UNITED STATES MAIL BY CERTIFIED MAIL (RETURN RECEIPT REQUESTED) FOR
UNITED STATES DELIVERIES.  ALL NOTICES FOR DELIVERY OUTSIDE THE UNITED STATES
WILL BE SENT BY EXPRESS COURIER. ALL NOTICES NOT DELIVERED PERSONALLY WILL BE
SENT WITH POSTAGE AND/OR OTHER CHARGES PREPAID AND PROPERLY ADDRESSED TO THE
PARTY TO BE NOTIFIED AT THE ADDRESS AS FOLLOWS, OR AT SUCH OTHER ADDRESS AS SUCH
OTHER PARTY MAY DESIGNATE BY ONE OF THE INDICATED MEANS OF NOTICE HEREIN TO THE
OTHER PARTIES HERETO AS FOLLOWS:

 

(I)            IF TO A USAUTO HOLDER, AT SUCH USAUTO HOLDER’S RESPECTIVE ADDRESS
AS SET FORTH ON EXHIBIT A HERETO;

 

(II)           IF TO ANY OTHER HOLDER OF REGISTRABLE SECURITIES, AT SUCH ADDRESS
AND TO THE ATTENTION OF SUCH PERSON AS SUCH HOLDER OF REGISTRABLE SECURITIES HAS
SPECIFIED BY PRIOR WRITTEN NOTICE TO LBI; AND

 

(III)          IF TO LBI, MARKED “ATTENTION: PRESIDENT”, AT 3813 GREEN HILLS
VILLAGE DRIVE, NASHVILLE, TENNESSEE 37215.

 

Any party may change its address or the designation of the intended recipient of
notice provided that it notifies the other party(ies) in accordance with the
terms of this Section 5(a).

 

(B)           ENTIRE AGREEMENT.  THIS AGREEMENT, TOGETHER WITH ALL THE EXHIBITS
HERETO, AND THE MERGER AGREEMENT AND EACH OF THE OTHER AGREEMENTS AND DOCUMENTS
REFERRED TO THEREIN, CONSTITUTE AND CONTAIN THE ENTIRE AGREEMENT AND
UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
SUPERSEDE ANY AND ALL PRIOR NEGOTIATIONS, CORRESPONDENCE, AGREEMENTS,
UNDERSTANDINGS, DUTIES OR OBLIGATIONS BETWEEN THE PARTIES RESPECTING THE SUBJECT
MATTER HEREOF.

 

(C)           GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
EXCLUSIVELY IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION (WHETHER
OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE. 
ALL DISPUTES ARISING OUT OF THIS AGREEMENT OR THE OBLIGATIONS OF THE PARTIES
HEREUNDER, INCLUDING DISPUTES THAT MAY ARISE FOLLOWING TERMINATION OF THIS
AGREEMENT, SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION OF THE CHANCERY OR
OTHER COURTS OF THE STATE OF DELAWARE.

 

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(D)           SEVERABILITY. IF ANY COVENANT OR PROVISION HEREOF IS DETERMINED TO
BE VOID OR UNENFORCEABLE IN WHOLE OR IN PART, IT SHALL NOT BE DEEMED TO AFFECT
OR IMPAIR THE INVALIDITY OF ANY OTHER COVENANT OR PROVISION, EACH OF WHICH IS
HEREBY DECLARED TO BE SEPARATE AND DISTINCT.  IF ANY PROVISION OF THIS AGREEMENT
IS SO BROAD AS TO BE UNENFORCEABLE, SUCH PROVISION SHALL BE INTERPRETED TO BE
ONLY SO BROAD AS IS ENFORCEABLE.  IF ANY PROVISION OF THIS AGREEMENT IS DECLARED
INVALID OR UNENFORCEABLE FOR ANY REASON OTHER THAN OVERBREADTH, THE OFFENDING
PROVISION WILL BE MODIFIED SO AS TO MAINTAIN THE ESSENTIAL BENEFITS OF THE
BARGAIN AMONG THE PARTIES HERETO TO THE MAXIMUM EXTENT POSSIBLE, CONSISTENT WITH
LAW AND PUBLIC POLICY.

 

(E)           THIRD PARTIES. NOTHING IN THIS AGREEMENT, EXPRESS OR IMPLIED, IS
INTENDED TO CONFER UPON ANY PERSON OR ENTITY, OTHER THAN THE PARTIES HERETO AND
THEIR PERMITTED SUCCESSORS AND ASSIGNS, ANY RIGHTS OR REMEDIES UNDER OR BY
REASON OF THIS AGREEMENT.

 

(F)            SUCCESSORS AND ASSIGNS. SUBJECT TO THE PROVISIONS OF SECTION
3(A), THE PROVISIONS OF THIS AGREEMENT SHALL INURE TO THE BENEFIT OF, AND SHALL
BE BINDING UPON, THE SUCCESSORS AND PERMITTED ASSIGNS OF THE PARTIES HERETO
INCLUDING, WITHOUT LIMITATION AND WITHOUT THE NEED FOR AN EXPRESS ASSIGNMENT,
SUBSEQUENT HOLDERS OF REGISTRABLE SECURITIES.

 

(G)           CAPTIONS. THE CAPTIONS TO SECTIONS OF THIS AGREEMENT HAVE BEEN
INSERTED FOR IDENTIFICATION AND REFERENCE PURPOSES ONLY AND SHALL NOT BE USED TO
CONSTRUE OR INTERPRET THIS AGREEMENT.

 

(H)           COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS, EACH
OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH TOGETHER SHALL CONSTITUTE
ONE AND THE SAME INSTRUMENT.

 

(I)            COSTS AND ATTORNEYS’ FEES. IN THE EVENT THAT ANY ACTION, SUIT OR
OTHER PROCEEDING IS INSTITUTED CONCERNING OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREUNDER, THE PREVAILING PARTY SHALL RECOVER ALL
OF SUCH PARTY’S COSTS AND ATTORNEYS’ FEES INCURRED IN EACH SUCH ACTION, SUIT OR
OTHER PROCEEDING, INCLUDING ANY AND ALL APPEALS OR PETITIONS THEREFROM.

 

(J)            ADJUSTMENTS FOR STOCK SPLITS, ETC.. WHEREVER IN THIS AGREEMENT
THERE IS A REFERENCE TO A SPECIFIC NUMBER OF SHARES OF LBI COMMON STOCK, THEN,
UPON THE OCCURRENCE OF ANY SUBDIVISION, COMBINATION OR STOCK DIVIDEND OF SUCH
STOCK OCCURRING AFTER THE DATE OF THIS AGREEMENT, THE SPECIFIC NUMBER OF SHARES
SO REFERENCED IN THIS AGREEMENT SHALL AUTOMATICALLY BE PROPORTIONALLY ADJUSTED
TO REFLECT THE AFFECT ON THE OUTSTANDING SHARES OF SUCH STOCK BY SUCH
SUBDIVISION, COMBINATION OR STOCK DIVIDEND.

 

15

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In Witness Whereof, the parties hereto have executed this Agreement as of the
date first above written.

 

 

LIBERTÉ INVESTORS INC.

 

 

 

 

 

By:

/s/ Donald J. Edwards

 

 

 

 

Name: Donald J. Edwards

 

Title:  Chief Executive Officer and President

 

 

 

 

 

/s/ Stephen J. Harrison

 

 

Stephen J. Harrison

 

 

 

/s/ Thomas M. Harrison

 

 

Thomas M. Harrison

 

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EXHIBIT A

 

Schedule of USAuto Holders

 

Stephen J. Harrison

3813 Green Hills Village Drive

Nashville, Tennessee 37215

Fax:  (615) 327-2266

 

Thomas M. Harrison

3813 Green Hills Village Drive

Nashville, Tennessee 37215

Fax:  (615) 327-2266

 

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