EXHIBIT 12
REGISTRATION RIGHTS AGREEMENT
among
UNITED AUTO GROUP, INC.,
INTERNATIONAL MOTOR CARS GROUP I, L.L.C.
and
INTERNATIONAL MOTOR CARS GROUP II, L.L.C.
_______ __, 1999
REGISTRATION RIGHTS AGREEMENT, dated as of _______ __, 1999 among
United Auto Group, Inc., a Delaware corporation (the "Company"),
International Motor Cars Group I, L.L.C. ("IMCG-I") and International Motor
Cars Group II, L.L.C. ("IMCG-II"), each a Delaware limited liability
company (IMCG-I and IMCG-II collectively, "IMCG").
The Company and IMCG are entering into a Securities Purchase
Agreement (the "Purchase Agreement") pursuant to which, among other things,
IMCG is purchasing (i) shares of Series A Convertible Preferred Stock, par
value $0.0001 per share, of the Company (the "Series A Preferred Stock"),
which Series A Preferred Stock is convertible into shares of Common Stock,
(ii) shares of Series B Convertible Preferred Stock, par value $0.0001 per
share, of the Company (the "Series B Preferred Stock", and together with
the Series A Preferred Stock, the "Preferred Stock"), which Series B
Preferred Stock is convertible into shares of Non-Voting Common Stock and
(iii) warrants (the "Warrants") to purchase shares of Common Stock and
Non-Voting Common Stock.
If IMCG, after conversion of the Preferred Stock or exercise of
the Warrants, desires to sell shares of Common Stock, it may be desirable
to register such shares under the Securities Act (as defined below).
As part of, and as consideration for, the acquisition of shares
of the Preferred Stock and the Warrants by IMCG from the Company on the
date hereof and from time to time hereafter, the Company hereby grants to
IMCG certain registration and other rights with respect to its shares of
Common Stock and Non-Voting Common Stock as more fully set forth herein.
Accordingly, the parties hereto agree as follows:
1. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as it may be amended or restated hereafter
from time to time.
"Commission" means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"Common Stock" means any shares of voting common stock, par value
$0.0001 per share, of the Company, now or hereafter authorized to be
issued, and, any and all securities of any kind whatsoever of the Company
which may be issued on or after the date hereof in respect of, in exchange
for, or upon conversion of shares of Common Stock pursuant to a merger,
consolidation, stock split, stock dividend, recapitalization of the Company
or otherwise. Notwithstanding anything to the contrary contained in this
Agreement, the Company shall not be obligated to register any Preferred
Stock, Warrants or Non-Voting Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Exchange Act shall include a
reference to the comparable section, if any, of any such similar Federal
statute.
"Non-Voting Common Stock" means any shares of non-voting common
stock, par value $0.0001 per share, of the Company, now or hereafter
authorized to be issued, and any and all securities of any kind whatsoever
of the Company which may be exchanged for or converted into Non-Voting
Common Stock, any and all securities of any kind whatsoever of the Company
which may be issued on or after the date hereof in respect of, in exchange
for, or upon conversion of shares of Non-Voting Common Stock pursuant to a
merger, consolidation, stock split, stock dividend, recapitalization of the
Company or otherwise.
"Person" means a corporation, an association, a partnership, an
organization, a business, a trust, an individual, or any other entity or
organization, including a government or political subdivision or an
instrumentality or agency thereof.
"Registrable Securities" means (i) any shares of Common Stock
owned by IMCG, (ii) any shares of Common Stock issued or issuable upon the
conversion, exercise or exchange of any shares of Preferred Stock, Warrants
or any other Common Stock equivalents held by IMCG, and (iii) any shares of
Common Stock issued with respect to the Common Stock referred to in clauses
(i), (ii) or (iii) by way of a stock dividend, stock split or reverse stock
split or in connection with a combination of shares, recapitalization,
merger, consolidation or otherwise. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities (a)
when a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration statement,
(b) when such securities shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer
shall have been delivered by the Company and subsequent public distribution
of them shall not require registration of them under the Securities Act, or
(c) when such securities shall have been sold as permitted by, and in
compliance with, the Securities Act. Any certificate evidencing the
Registrable Securities shall bear a legend stating that the securities have
not been registered under the Securities Act and setting forth or referring
to the restrictions on transferability and sale of the securities.
"Registration Expenses" means all expenses incident to the
registration and disposition of the Registrable Securities pursuant to
Section 2 hereof, including, without limitation, all registration, filing
and applicable national securities exchange fees, all fees and expenses of
complying with state securities or blue sky laws (including fees and
disbursements of counsel to the underwriters or IMCG in connection with
"blue sky" qualification of the Registrable Securities and determination of
their eligibility for investment under the laws of the various
jurisdictions), all word processing, duplicating and printing expenses, all
messenger and delivery expenses, the fees and disbursements of counsel for
the Company and of its independent public accountants, including the
expenses of "cold comfort" letters or any special audits required by, or
incident to, such registration, all fees and disbursements of underwriters
(other than underwriting discounts and commissions), all transfer taxes,
and all fees and expenses of counsel to IMCG up to a maximum of $50,000 per
registration; provided, however, that Registration Expenses shall exclude,
and IMCG shall pay, underwriting discounts and commissions in respect of
the Registrable Securities being registered.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
References to a particular section of the Securities Act shall include a
reference to the comparable section, if any, of any such similar Federal
statute.
2. Registration Under Securities Act, etc.
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2.1 Registration on Request.
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(a) Request. IMCG shall have the right to require the
Company to effect the registration under the Securities Act of all or part
of the Registrable Securities, by delivering a written request therefor to
the Company specifying the number of shares of Registrable Securities and
the intended method of distribution. The Company shall (i) use its
reasonable best efforts to effect the registration under the Securities Act
(including by means of a shelf registration pursuant to Rule 415 under the
Securities Act if so requested in such request and if the Company is then
eligible to use such a registration) of the Registrable Securities which
the Company has been so requested to register by IMCG, for distribution in
accordance with the intended method of distribution set forth in the
written request delivered by IMCG, such registration to be effected as
expeditiously as possible, and (ii) if requested by IMCG, use its
reasonable best efforts to obtain acceleration of the effective date of the
registration statement relating to such registration.
(b) Registration of Other Securities. Whenever the
Company shall effect a registration pursuant to this Section 2.1, the
Company may include other securities of the Company or which are held by
Persons who, by virtue of agreements with the Company, are entitled to
include their securities in any such registration. In the case of an
underwritten offering pursuant to Section 2.1, if holders of securities of
the Company other than Registrable Securities who are entitled, by contract
with the Company, to have securities included in such a registration (the
"Other Stockholders") request such inclusion, the Company shall offer to
include the securities of such Other Stockholders in the underwriting and
may condition such offer on their acceptance of the further applicable
provisions of this Agreement. The Company and the Other Stockholders shall
enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected pursuant to
Section 2.1(f). Notwithstanding any other provision of this Section 2, if
the representative advises IMCG in writing that marketing factors require a
limitation on the number of shares to be underwritten, the securities of
the Company held by Other Stockholders shall be excluded from such
registration to the extent so required by such limitation.
(c) Registration Statement Form. Registrations under
this Section 2.1 shall be on such appropriate registration form of the
Commission as, subject to clause (a)(i) above, shall be selected by the
Company and as shall be reasonably acceptable to IMCG.
(d) Expenses. The Company shall pay all Registration
Expenses in connection with any registration requested pursuant to this
Section 2.1.
(e) Effective Registration Statement. A registration
requested pursuant to this Section 2.1 shall not be deemed to have been
effected (including for purposes of paragraph (h) of this Section 2.1) (i)
unless a registration statement with respect thereto has become effective
and has been kept continuously effective for a period of at least 180 days
(or such shorter period which shall terminate when all the Registrable
Securities covered by such registration statement have been sold pursuant
thereto), (ii) if after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement
of the Commission or other governmental agency or court for any reason not
attributable to IMCG and has not thereafter become effective, or (iii) if
the conditions to closing specified in the underwriting agreement, if any,
entered into in connection with such registration are not satisfied or
waived.
(f) Selection of Underwriters. The underwriters of each
underwritten offering of the Registrable Securities so to be registered
shall be selected by IMCG and shall be subject to the approval of the
Company, not to be unreasonably withheld or delayed.
(g) Right to Withdraw. If the managing underwriter of
any underwritten offering shall advise IMCG that the Registrable Securities
covered by the registration statement cannot be sold in such offering
within a price range acceptable to IMCG, then IMCG shall have the right to
notify the Company in writing that they have determined that the
registration statement be abandoned or withdrawn, in which event the
Company shall abandon or withdraw such registration statement. In the event
of such abandonment or withdrawal, such request shall not be counted for
purposes of the requests for registration to which IMCG is entitled
pursuant to this Section 2.1.
(h) Limitations on Registration on Request. IMCG shall
be entitled to require the Company to effect, and the Company shall be
required to effect, three registrations in the aggregate pursuant to this
Section 2.1, provided, however, that the aggregate offering value of the
shares to be registered pursuant to any such registration shall be at least
$10,000,000 unless IMCG then owns shares with an aggregate value less than
$10,000,000 (in which case such lesser number of shares may be registered).
(i) Postponement. The Company shall be entitled once in
any six-month period to postpone for a reasonable period of time (but not
exceeding 90 days) (the "Postponement Period") the filing of any
registration statement required to be prepared and filed by it pursuant to
this Section 2.1 if the Company determines, in its reasonable judgment,
that such registration and offering would materially interfere with any
material financing, corporate reorganization or other material transaction
involving the Company or any subsidiary, or would require premature
disclosure thereof, and promptly gives IMCG written notice of such
determination, containing a general statement of the reasons for such
postponement and an approximation of the anticipated delay. If the Company
shall so postpone the filing of a registration statement, (i) the Company
shall use its reasonable best efforts to limit the delay to as short a
period as is practicable and (ii) IMCG shall have the right to withdraw the
request for registration by giving written notice to the Company at any
time and, in the event of such withdrawal, such request shall not be
counted for purposes of the requests for registration to which IMCG is
entitled pursuant to this Section 2.1.
2.2 Incidental Registration.
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(a) Right to Include Registrable Securities. If the
Company at any time proposes to register any of its securities under the
Securities Act by registration on Form ▇-▇, ▇-▇ or S-3 or any successor or
similar form(s) (except registrations on any such Form or similar form(s)
solely for registration of securities in connection with an employee
benefit plan or dividend reinvestment plan or a merger or consolidation),
whether or not for sale for its own account, it will each such time give
prompt written notice to IMCG of its intention to do so and of IMCG's
rights under this Section 2.2. Upon the written request of IMCG (which
request shall specify the maximum number of Registrable Securities intended
to be disposed of by IMCG), made as promptly as practicable and in any
event within 30 days after the receipt of any such notice (15 days if the
Company states in such written notice or gives telephonic notice to IMCG,
with written confirmation to follow promptly thereafter, stating that (i)
such registration will be on Form S-3 and (ii) such shorter period of time
is required because of a planned filing date), the Company shall use its
reasonable best efforts to include in such registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by IMCG. Notwithstanding anything to the contrary
contained in this Agreement, the Company may in its discretion withdraw any
registration commenced pursuant to this Section 2.2 without liability to
the holders of Registrable Securities. No registration effected under this
Section 2.2 shall relieve the Company of its obligation to effect any
registration upon request under Section 2.1. The Company will pay all
Registration Expenses in connection with any registration of Registrable
Securities requested pursuant to this Section 2.2.
(b) Right to Withdraw. IMCG shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
registration statement pursuant to this Section 2.2 at any time prior to
the execution of an underwriting agreement with respect thereto by giving
written notice to the Company of its request to withdraw.
(c) Priority in Incidental Registrations. If the
managing underwriter of any underwritten offering shall inform the Company
by letter of its belief that the number of Registrable Securities requested
to be included in such registration, when added to the number of other
securities to be offered in such registration, would materially adversely
affect such offering, then the Company shall include in such registration,
to the extent of the number and type which the Company is so advised can be
sold in (or during the time of) such offering without so materially
adversely affecting such offering (the "Section 2.2 Sale Amount"), (i) all
of the securities proposed by the Company to be sold for its own account or
by an Other Stockholder exercising "demand" registration rights; and (ii)
thereafter, to the extent the Section 2.2 Sale Amount is not exceeded, the
Registrable Securities requested by IMCG to be included in such
registration pursuant to Section 2.2(a) and any other securities of the
Company requested to be included in such registration by any Other
Stockholder having the right to include securities on a pro rata basis,
with the amount of securities of IMCG and each such Other Stockholder to be
included based on the pro rata amount of shares of Common Stock held, or
obtainable by exercise or conversion of other securities of the Company, by
IMCG or such Other Stockholder.
(d) Plan of Distribution. Any participation by holders
of Registrable Securities in a registration by the Company shall be in
accordance with the Company's plan of distribution.
2.3 Registration Procedures. If and whenever the Company is
required to use its reasonable best efforts to effect the registration of
any Registrable Securities under the Securities Act as provided in Sections
2.1 and 2.2 hereof, the Company shall as expeditiously as possible:
(a) prepare and file with the Commission as soon as
practicable the requisite registration statement to effect such
registration (and shall include all financial statements required
by the Commission to be filed therewith) and thereafter use its
reasonable best efforts to cause such registration statement to
become effective; provided, however, that before filing such
registration statement (including all exhibits) or any amendment
or supplement thereto or comparable statements under securities
or blue sky laws of any jurisdiction, the Company shall as
promptly as practicable furnish such documents to IMCG and each
underwriter, if any, participating in the offering of the
Registrable Securities and their respective counsel, which
documents will be subject to the reasonable review and comments
of IMCG, each underwriter and their respective counsel; and
provided, further, however, that the Company may discontinue any
registration of its securities pursuant to Section 2.2 or which
are not Registrable Securities at any time prior to the effective
date of the registration statement relating thereto;
(b) notify IMCG of the Commission's requests for amending or
supplementing the registration statement and the prospectus, and
prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the
provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by such registration
statement for such period as shall be required for the
disposition of all of such Registrable Securities in accordance
with the intended method of distribution thereof; provided, that
except with respect to any such registration statement filed
pursuant to Rule 415 under the Securities Act, such period need
not exceed 180 days;
(c) furnish, without charge, to IMCG and each underwriter
such number of conformed copies of such registration statement
and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such
other documents, as IMCG and such underwriters may reasonably
request;
(d) use its reasonable best efforts (i) to register or
qualify all Registrable Securities and other securities covered
by such registration statement under such securities or blue sky
laws of such States of the United States of America where an
exemption is not available and as IMCG or any managing
underwriter shall reasonably request, (ii) to keep such
registration or qualification in effect for so long as such
registration statement remains in effect, and (iii) to take any
other action which may be reasonably necessary or advisable to
enable IMCG to consummate the disposition in such jurisdictions
of the securities to be sold by IMCG, except that the Company
shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subsection
(d) be obligated to be so qualified or to consent to general
service of process in any such jurisdiction;
(e) furnish to IMCG and each underwriter, if any,
participating in the offering of the securities covered by such
registration statement, a signed counterpart of (i) an opinion of
counsel for the Company, and (ii) a "comfort" letter signed by
the independent public accountants who have certified the
Company's or any other entity's financial statements included or
incorporated by reference in such registration statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and,
in the case of the accountants' comfort letter, with respect to
events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in
accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities (and dated the dates
such opinions and comfort letters are customarily dated) and, in
the case of the legal opinion, such other legal matters, and, in
the case of the accountants' comfort letter, such other financial
matters, as the underwriters, may reasonably request;
(f) promptly notify IMCG and each managing underwriter, if
any, participating in the offering of the securities covered by
such registration statement (i) when such registration statement,
any pre-effective amendment, the prospectus or any prospectus
supplement related thereto or post-effective amendment to such
registration statement has been filed, and, with respect to such
registration statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission
for amendments or supplements to such registration statement or
the prospectus related thereto or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or
the initiation of any proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of any of the Registrable
Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such
purpose; (v) at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which,
the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, in the
light of the circumstances under which they were made, and in the
case of this clause (v), at the request of IMCG promptly prepare
and furnish to IMCG and each managing underwriter, if any,
participating in the offering of the Registrable Securities, a
reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus
shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances under which they were made; and (vi)
at any time when the representations and warranties of the
Company contemplated by Section 2.4(a) or (b) hereof cease to be
true and correct;
(g) otherwise comply with all applicable rules and
regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the
first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule
158 promulgated thereunder, and promptly furnish to IMCG a copy
of any amendment or supplement to such registration statement or
prospectus;
(h) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all
Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such
registration;
(i) (i) use its reasonable best efforts to cause all
Registrable Securities covered by such registration statement to
be listed on the principal securities exchange on which similar
securities issued by the Company are then listed (if any), if the
listing of such Registrable Securities is then permitted under
the rules of such exchange, or (ii) if no similar securities are
then so listed, use its reasonable best efforts to (x) cause all
such Registrable Securities to be listed on a national securities
exchange or (y) failing that, secure designation of all such
Registrable Securities as a NASDAQ "national market system
security" within the meaning of Rule 11Aa2-1 of the Commission or
(z) failing that, to secure NASDAQ authorization for such shares
and, without limiting the generality of the foregoing, to arrange
for at least two market makers to register as such with respect
to such shares with the National Association of Securities
Dealers, Inc.;
(j) deliver promptly to counsel to IMCG and each
underwriter, if any, participating in the offering of the
Registrable Securities, copies of all correspondence between the
Commission and the Company, its counsel or auditors;
(k) use its reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of the registration
statement;
(l) provide a CUSIP number for all Registrable Securities,
no later than the effective date of the registration statement;
and
(m) make available its employees and personnel and otherwise
provide reasonable assistance to the underwriters (taking into
account the needs of the Company's business) in their marketing
of Registrable Securities.
The Company may require IMCG to furnish the Company such information
regarding IMCG and the distribution of the Registrable Securities as the
Company may from time to time reasonably request in writing. The Company
shall be released from any obligation to IMCG hereunder for so long as IMCG
has not delivered such information to the extent required for purposes of
the registrations.
IMCG agrees that upon receipt of any notice from the Company of
the happening of any event of the kind described in paragraph (f) (iii),
(iv) or (v) of this Section 2.3, IMCG will, to the extent appropriate,
discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until, in
the case of paragraph (f)(v) of this Section 2.3, its receipt of the copies
of the supplemented or amended prospectus contemplated by paragraph (f)(v)
of this Section 2.3 and, if so directed by the Company, will deliver to the
Company (at the Company's expense) all copies, other than permanent file
copies, then in its possession, of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice. If
the disposition by IMCG of its securities is discontinued pursuant to the
foregoing sentence, the Company shall extend the period of effectiveness of
the registration statement required pursuant to Section 2.1(e) by the
number of days during the period from and including the date of the giving
of notice to and including the date when IMCG shall have received copies of
the supplemented or amended prospectus contemplated by paragraph (f)(v) of
this Section 2.3; and, if the Company shall not so extend such period,
IMCG's request pursuant to which such registration statement was filed
shall not be counted for purposes of the requests for registration to which
IMCG is entitled pursuant to Section 2.1 hereof.
2.4 Underwritten Offerings.
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(a) Requested Underwritten Offerings. If requested by
the underwriters for any underwritten offering by IMCG pursuant to a
registration requested under Section 2.1, the Company shall enter into a
customary underwriting agreement (in the form of underwriting agreement
used at such time by the managing underwriter(s)) with a managing
underwriter or underwriters selected pursuant to Section 2.1(f) which shall
contain such terms as are generally prevailing in agreements of the
managing underwriter(s), including, without limitation, their customary
provisions relating to indemnification and contribution (the "Customary
Terms"). IMCG shall be party to such underwriting agreement and may, at its
option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit
of such underwriters shall also be made to and for the benefit of IMCG and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to
the obligations of IMCG. IMCG shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding
IMCG, its ownership of and title to the Registrable Securities, and its
intended method of distribution and other representations that constitute
Customary Terms, and any liability of IMCG to any underwriter or other
person under such underwriting agreement shall be limited to liability
arising from breach of its representations and warranties and shall be
limited to an amount equal to the proceeds (net of expenses and
underwriting discounts and commissions) that it derives from such
registration.
(b) Incidental Underwritten Offerings. In the case of a
registration pursuant to Section 2.2 hereof, if the Company shall have
determined to enter into any underwriting agreements in connection
therewith, all of the Registrable Securities to be included in such
registration shall be subject to such underwriting agreements.
2.5 Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company will give IMCG, its
underwriters, if any, and its respective counsel, accountants and other
representatives and agents the opportunity to participate in the
preparation of such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or
supplement thereto, and give each of them such reasonable access to its
books and records and such reasonable opportunities to discuss the business
of the Company with its officers and employees and the independent public
accountants who have certified its financial statements, and supply all
other information reasonably requested by each of them, as shall be
necessary or appropriate, in the opinion of IMCG and such underwriters'
respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
2.6 Indemnification.
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(a) Indemnification by the Company. The Company agrees
that in the event of any registration of any securities of the Company
under the Securities Act, the Company shall indemnify and hold harmless
IMCG, its respective directors, officers, members, partners, agents and
affiliates and each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who
controls IMCG or any such underwriter within the meaning of the Securities
Act, against any losses, claims, damages, or liabilities, joint or several,
to which IMCG or any such director, officer, member, partner, agent or
affiliate or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities, joint or several (or actions or proceedings, whether commenced
or threatened, in respect thereof), arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained
in any registration statement under which such securities were registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement
thereto or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made
not misleading, and the Company shall reimburse IMCG and each such
director, officer, member, partner, agent or affiliate, underwriter and
controlling Person for any legal or any other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be
liable in any such case to IMCG or any such director, officer, member,
partner, agent, affiliate, or controlling person to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of IMCG, specifically stating that it is for use in the preparation
thereof; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
person from whom the person asserting any such losses, claims, damages or
liabilities (the "Claimant") purchased securities, or any person
controlling such person, if a copy of the prospectus (as then amended or
supplemented if the Company shall have furnished any amendment or
supplement thereto) was not sent or given by or on behalf of such person to
such Claimant, if required by law to have been so delivered, at or prior to
the written confirmation of the sale of the securities sold to such
Claimant, and if the prospectus (as so amended and supplemented) would have
cured the defect giving rise to such losses, claims, damages or
liabilities. Such indemnity shall remain in full force regardless of any
investigation made by or on behalf of IMCG or any such director, officer,
member, partner, agent, affiliate, underwriter or controlling Person and
shall survive the transfer of such securities by IMCG.
(b) Indemnification by IMCG. As a condition to
including any Registrable Securities in any registration statement, IMCG
shall indemnify and hold harmless (in the same manner and to the same
extent as set forth in paragraph (a) of this Section 2.6) the Company, and
each director of the Company, each officer of the Company and each other
Person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, but only to the extent
such statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company by or on behalf of IMCG specifically stating that it is for
use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement;
provided, however, that the liability of such indemnifying party under this
Section 2.6(b) shall be limited to the amount of proceeds (net of expenses
and underwriting discounts and commissions) received by such indemnifying
party in the offering giving rise to such liability. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or
on behalf of the Company or any such director, officer or controlling
Person and shall survive the transfer of such securities by IMCG.
(c) Notices of Claims, etc. Promptly after receipt by
an indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding subsections of
this Section 2.6, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to
the latter of the commencement of such action or proceeding; provided,
however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under the preceding subsections of this Section 2.6, except to the extent
that the indemnifying party is actually prejudiced by such failure to give
notice, and shall not relieve the indemnifying party from any liability
which it may have to the indemnified party otherwise than under this
Section 2.6. In case any such action or proceeding is brought against an
indemnified party, the indemnifying party shall be entitled to participate
therein and, unless in the opinion of outside counsel to the indemnified
party a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, to assume the defense thereof,
jointly with any other indemnifying party similarly notified to the extent
that it may wish, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if the defendants in any such action or
proceeding include both the indemnified party and the indemnifying party
and if in the opinion of outside counsel to the indemnified party there may
be legal defenses available to such indemnified party and/or other
indemnified parties which are in conflict with or in addition to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to defend such action or
proceeding on behalf of such indemnified party or parties, provided,
however, that the indemnifying party shall be obligated to pay for only one
counsel and one local counsel for all indemnified parties. After notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified
party for any legal expenses subsequently incurred by the latter in
connection with the defense thereof (unless the first proviso in the
preceding sentence shall be applicable). No indemnifying party shall be
liable for any settlement of any action or proceeding effected without its
written consent. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release
from all liability in respect to such claim or litigation.
(d) Contribution. If the indemnification provided for
in this Section 2.6 shall for any reason be held by a court to be
unavailable to an indemnified party under subsection (a) or (b) hereof in
respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under subsection (a)
or (b) hereof, the indemnified party and the indemnifying party under
subsection (a) or (b) hereof shall contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating the same), (i) in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand, and the indemnified party on the other,
which resulted in such loss, claim, damage or liability, or action in
respect thereof, with respect to the statements or omissions which resulted
in such loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as shall be appropriate to reflect not only the relative
fault but also the relative benefits received by the indemnifying party and
the indemnified party from the offering of the securities covered by such
registration statement as well as any other relevant equitable
considerations. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 2.6(d) were to be
determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to
in the preceding sentence of this Section 2.6(d). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. In addition, no Person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's consent,
which consent shall not be unreasonably withheld. Notwithstanding anything
in this subsection (d) to the contrary, no indemnifying party (other than
the Company) shall be required to contribute any amount in excess of the
proceeds (net of expenses and underwriting discounts and commissions)
received by such party from the sale of the Registrable Securities in the
offering to which the losses, claims, damages or liabilities of the
indemnified parties relate.
(e) Other Indemnification. Indemnification and
contribution similar to that specified in the preceding subsections of this
Section 2.6 (with appropriate modifications) shall be given by the Company
and IMCG with respect to any required registration or other qualification
of securities under any federal, state or blue sky law or regulation of any
governmental authority other than the Securities Act. The indemnification
agreements contained in this Section 2.6 shall be in addition to any other
rights to indemnification or contribution which any indemnified party may
have pursuant to law or contract and shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of
any indemnified party and shall survive the transfer of any of the
Registrable Securities by IMCG.
(f) Indemnification Payments. The indemnification and
contribution required by this Section 2.6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or expense, loss, damage or
liability is incurred.
2.7 Unlegended Certificates. In connection with the offering
of any Registrable Securities registered pursuant to this Section 2, the
Company shall promptly after the sale of such Registrable Securities (i)
facilitate the timely preparation and delivery to IMCG and the
underwriters, if any, participating in such offering, of unlegended
certificates representing ownership of such Registrable Securities being
sold in such denominations and registered in such names as requested by
IMCG or such underwriters and (ii) instruct any transfer agent and
registrar of such Registrable Securities to release any stop transfer
orders with respect to any such Registrable Securities.
2.8 Limitation on Sale of Securities. The Company hereby
agrees that if it shall previously have received a request for registration
pursuant to Section 2.1 hereof, and if such previous registration shall not
have been withdrawn or abandoned, (i) the Company shall not effect any
public or private offer, sale or distribution of its securities or effect
any registration of any of its equity securities under the Securities Act
(other than a registration on Form S-8 or any successor or similar form
which is then in effect), for sale for its own account, until a period of
120 days (or such shorter period as the Company shall be advised by the
managing underwriter) shall have elapsed from the effective date of such
previous registration, and the Company shall so provide in any registration
rights agreements hereafter entered into with respect to any of its
securities; and (ii) the Company shall use its reasonable best efforts to
cause each holder of its equity securities purchased from the Company other
than as part of a public offering at any time after the date of this
Agreement to agree not to effect any public sale or distribution of any
such securities during such period, including a sale pursuant to Rule 144
under the Securities Act.
2.9 No Required Sale. Nothing in this Agreement shall be
deemed to create an independent obligation on the part of IMCG to sell any
Registrable Securities pursuant to any effective registration statement.
3. Rule 144. The Company shall take all actions reasonably
necessary to enable holders of Registrable Securities to sell such
securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144, or (ii) any similar
rule or regulation hereafter adopted by the Commission including, without
limiting the generality of the foregoing, filing on a timely basis all
reports required to be filed by the Exchange Act. Upon the request of IMCG,
the Company will deliver to such holder a written statement as to whether
it has complied with such requirements.
4. Amendments and Waivers. This Agreement may be amended,
modified or supplemented only by written agreement of the party against
whom enforcement of such amendment, modification or supplement is sought.
5. Adjustments. In the event of any change in the capitalization
of the Company as a result of any stock split, stock dividend, reverse
split, combination, recapitalization, merger, consolidation, or otherwise,
the provisions of this Agreement shall be appropriately adjusted.
6. Notice. All notices and other communications 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 at its address set forth below, or such other address for the party
as shall be specified by notice given pursuant hereto:
(a) If to IMCG, to:
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇.▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇ Jacob, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(b) If to the Company, to it at:
United Auto Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
7. Assignment; Third Party Beneficiaries; Majority Controls. This
Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned by the Company,
without the prior written consent of IMCG. IMCG may, at its election, at
any time or from time to time, assign its rights under this Agreement, in
whole or in part, to any purchaser or other transferee of Registrable
Securities held by it; provided, however, that any rights to withdraw
shares from inclusion in a registration statement pursuant to Section 2
shall be made only by IMCG for itself and all such purchasers and
transferees; and provided, further, that any decision hereunder made by the
holders of the majority of the Registrable Securities shall be binding on
all other holders of Registrable Securities.
8. Remedies. The parties hereto agree that money damages or other
remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that, in
addition to all other remedies available to them, each of them shall be
entitled to an injunction restraining such breach, violation or default or
threatened breach, violation or default and to any other equitable relief,
including without limitation specific performance, without bond or other
security being required. In any action or proceeding brought to enforce any
provision of this Agreement (including the indemnification provisions
thereof), the successful party shall be entitled to recover reasonable
attorneys' fees in addition to its costs and expenses and any other
available remedy.
9. No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted to IMCG in this
Agreement or otherwise conflicts with the provisions hereof. The Company
represents and warrants to IMCG that it has not previously entered into any
agreement with respect to its securities granting any registration rights
to any Person except as set forth on Schedule 9.
10. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only
and shall not control or otherwise affect the meaning hereof.
11. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights and obligations of the parties hereto
shall be governed by, the laws of the State of New York, without giving
effect to the conflicts of law principles thereof. Each of the parties
hereto hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of New York and the
United States of America located in the County of New York for any action
or proceeding arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any action or
proceeding relating thereto except in such courts), and further agrees that
service of any process, summons, notice or document by U.S. registered mail
to its respective address set forth in Section 6 hereof shall be effective
service of process for any action or proceeding brought against it in any
such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action
or proceeding arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of New York or the United
States of America located in the County of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
13. 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. If any restriction or provision
of this Agreement is held unreasonable, unlawful or unenforceable in any
respect, such restriction or provision shall be interpreted, revised or
applied in a manner that renders it lawful and enforceable to the fullest
extent possible under law.
14. Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all further acts and things and shall
execute and deliver all other 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 and the
consummation of the transactions contemplated hereby.
15. Entire Agreement; Effectiveness. This Agreement constitutes
the entire agreement, and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect
to the subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly
authorized.
UNITED AUTO GROUP, INC.
By:
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Name:
Title:
INTERNATIONAL MOTOR CARS
GROUP I, L.L.C.
By:
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Name:
Title:
INTERNATIONAL MOTOR CARS
GROUP II, L.L.C.
By:
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Name:
Title: