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EXHIBIT 10.27.2
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AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
BY AND AMONG
AIF II, L.P.,
AENEAS VENTURE CORPORATION,
INTERNATIONAL MOTOR CARS GROUP I, L.L.C.,
INTERNATIONAL MOTOR CARS GROUP II, L.L.C.,
MITSUI & CO., LTD.,
MITSUI & CO. (U.S.A.), INC.,
AND
UNITED AUTO GROUP, INC.
Dated as of February 28, 2001
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Table of Contents
Page
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ARTICLE I. DEFINITIONS................................................................................2
Section 1.1. Definitions................................................................................2
Section 1.2. Rules of Construction......................................................................3
ARTICLE II. BOARD COMPOSITION AND VOTING AGREEMENTS....................................................4
Section 2.1. Board Composition..........................................................................4
Section 2.2. Composition of Committees of the Board of Directors........................................4
Section 2.3. Voting Agreement...........................................................................4
Section 2.4. Reduction in Right of PCP Entities to Designate Directors..................................4
Section 2.5. Suspension of Right to Designate Directors.................................................5
Section 2.6. Replacement Directors......................................................................5
Section 2.7. Resignation of PCP Directors...............................................................5
Section 2.8. Termination of Article II..................................................................6
Section 2.9. Quorum.....................................................................................6
ARTICLE III. STANDSTILL PROVISIONS......................................................................6
Section 3.1. Standstill Provisions......................................................................6
Section 3.2. Exceptions to the Standstill Provisions....................................................7
ARTICLE IV. TRANSFER RESTRICTIONS......................................................................7
Section 4.1. Restrictions on Transfer of Restricted Securities..........................................7
Section 4.2. Tag-Along Rights...........................................................................8
Section 4.3. Transferees; Noncomplying Transfers........................................................8
Section 4.4. Restrictions on Transfers of Interests in the PCP Entities.................................8
ARTICLE V. CERTAIN COVENANTS..........................................................................9
Section 5.1. Legend on Certificates.....................................................................9
Section 5.2. ▇▇▇▇▇ ▇▇▇▇▇▇ to Serve as Chairman and Chief Executive Officer..............................9
Section 5.3. Approval of Company Action Under the Securities Purchase Agreement........................10
Section 5.4. Confidentiality Obligation................................................................10
Section 5.5. Further Assurances........................................................................10
ARTICLE VI. MUTUAL REPRESENTATIONS AND WARRANTIES.....................................................10
Section 6.1. Organization..............................................................................10
Section 6.2. Authorization, Validity and Enforceability................................................11
Section 6.3. No Violation or Breach....................................................................11
ARTICLE VII. TERM......................................................................................11
Section 7.1. Term......................................................................................11
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Table of Contents
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(continued)
Page
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Section 7.2. Effects of Termination....................................................................11
ARTICLE VIII. MISCELLANEOUS PROVISIONS..................................................................12
Section 8.1. Survival..................................................................................12
Section 8.2. Notices...................................................................................12
Section 8.3. Amendments................................................................................13
Section 8.4. Assignment and Parties in Interest........................................................13
Section 8.5. Expenses..................................................................................14
Section 8.6. Entire Agreement..........................................................................14
Section 8.7. Descriptive Headings......................................................................14
Section 8.8. Counterparts..............................................................................14
Section 8.9. Governing Law; Jurisdiction...............................................................14
Section 8.10. Severability..............................................................................15
Section 8.11. Specific Performance......................................................................15
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AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (the "Agreement")
dated as of February 28, 2001 by and among AIF II, L.P., a Delaware limited
partnership ("Apollo"), Aeneas Venture Corporation, a Delaware corporation
("Harvard"), International Motor Cars Group I, L.L.C., a Delaware limited
liability company ("PCP I"), International Motor Cars Group II, L.L.C., a
Delaware limited liability company ("PCP II" and, together with PCP I, the "PCP
Entities"), Mitsui & Co., Ltd., a Japanese company ("Mitsui Japan"), Mitsui &
Co. (U.S.A.), Inc., a New York corporation (Mitsui USA" and together with Mitsui
Japan, "Mitsui"), and United Auto Group, Inc. (the "Company").
WHEREAS, pursuant to the terms of a Securities Purchase Agreement,
between the Company and the PCP Entities, dated as of April 12, 1999 (the
"Securities Purchase Agreement"), the PCP Entities acquired Series A Convertible
Preferred Stock, par value $.000l per share, of the Company (the "Series A
Preferred Stock"), Series B Convertible Preferred Stock, par value $.0001 per
share (the "Series B Preferred Stock") and warrants (the "Warrants") to acquire
the Company's voting Common Stock, par value $.0001 per share, and non-voting
Common Stock, par value $.0001 per share (together, the "Common Stock"), of the
Company;
WHEREAS, in connection with the completion of the transactions
contemplated by the Securities Purchase Agreement, Apollo, Harvard, the PCP
Entities and Trace International Holdings, Inc. ("Trace") executed and delivered
a Stockholders Agreement, dated as of May 3, 1999 (the "Existing Agreement");
WHEREAS, in December 2000, Penske Corporation ("Penske") purchased all
of the shares of Common Stock formerly held by Trace and Trace is no longer a
shareholder in the Company;
WHEREAS, on December 14, 2000, the Restricted Stockholders (other than
Mitsui) amended the Existing Agreement pursuant to Amendment No. 1 to the
Stockholders' Agreement ("Amendment No. 1");
WHEREAS, on February 28, 2001, conditioned upon the execution and
delivery of this Agreement and pursuant to the terms of a Purchase Agreement,
between the Company and Mitsui, dated as of January 31, 2001 (the "Purchase
Agreement"), Mitsui subscribed for 1,302,326 shares of Voting Common Stock of
the Company; and
WHEREAS, the parties wish to amend and restate in its entirety the
Existing Agreement and Amendment No. 1 to continue to provide for certain
matters relating to the ownership and transfer of the Common Stock, on the terms
and conditions provided in this Agreement.
NOW, THEREFORE, in consideration of the promises, the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS.
Capitalized terms used herein without definition shall have the meanings
specified below:
"Adjusted Beneficial Ownership" is defined in Section 2.5.
"Affiliate" means "affiliate" as defined in Rule 405 promulgated under
the Securities Act.
"Amendment No. 1" has the meaning set forth in the recitals hereto.
"Apollo" has the meaning set forth in the preamble.
"Beneficial Ownership" means "beneficial ownership" as defined in Rule
13d-3 promulgated under the Exchange Act.
The term "Beneficial Owner" shall have a correlative meaning.
"Business Day" means a calendar day, other than (a) a Saturday or
Sunday, and (b) a day on which commercial banks are required or permitted by law
or other governmental action to close in New York, New York, United States of
America and Tokyo, Japan.
"Common Stock" has the meaning set forth in the recitals hereto, and
includes any securities issued with respect to such shares by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, amalgamation, merger, consolidation or other reorganization or
otherwise.
"Company" has the meaning set forth in the recitals hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Harvard" has the meaning set forth in the preamble.
"Independent Directors" (a) initially means two persons who were
members of the Audit Committee of the Company's Board of Directors as of
December 31, 1998 and who shall be selected by a majority of said Audit
Committee, and (b) after the Initial Closing Date means persons nominated by the
immediately preceding Independent Directors who are not Affiliates of either the
PCP Entities or their respective Affiliates (other than the Company).
"Initial Closing Date" means the date of the "Initial Closing" (as
defined in the Securities Purchase Agreement)
"Mitsui" has the meaning set forth in the preamble.
"Mitsui Closing Date" means the "Closing Date" (as defined in the
Purchase Agreement).
"PCP Directors" has the meaning set forth in Section 2.1.
"PCP Entities" has the meaning set forth in the preamble.
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"PCP I" has the meaning set forth in the preamble.
"PCP II" has the meaning set forth in the preamble.
"Penske" has the meaning set forth in the recitals hereto.
"Permitted Transferee" of a person means (a) a corporation, partnership
or other entity wholly owned by such person; provided that such corporation,
partnership or other entity shall agree in writing that it shall transfer to
such person any Restricted Securities which it holds prior to such time as it
ceases to be wholly owned by such person, and (b) the equity owners of such
person to the extent such equity owners receive a pro rata distribution of
Restricted Securities.
"Purchase Agreement" has the meaning set forth in the recitals hereto.
"Registration Rights Agreement" means the Registration Rights Agreement
among the Company, Mitsui Japan and Mitsui USA, dated as of the date hereof.
"Restricted Securities" means any Common Stock or other equity security
of the Company Beneficially Owned by a Restricted Stockholder (other than
Mitsui) and any securities convertible, exercisable or exchangeable for Common
Stock or such other equity securities, including, without limitation, the Series
A Preferred Stock and the Warrants.
"Restricted Stockholder" means each of Apollo, Harvard, the PCP
Entities and Mitsui.
"Second Closing Date" means the date of the "Second Closing" (as
defined in the Securities Purchase Agreement).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Purchase Agreement" has the meaning set forth in the
recitals hereto.
"Series A Preferred Stock" has the meaning set forth in the recitals
hereto.
"Series B Preferred Stock" has the meaning set forth in the recitals
hereto.
"Tag-Along Notice" is defined in Section 4.2.
"Tag-Along Stockholders" is defined in Section 4.2.
"Trace" has the meaning set forth in the recitals hereto.
"Transfer" means any direct or indirect transfer, sale, assignment,
gift, pledge, mortgage, hypothecation or other disposition of any interest. The
term "Transferee" shall have a correlative meaning.
"Warrants" has the meaning set forth in the recitals hereto.
SECTION 1.2. RULES OF CONSTRUCTION.
Unless the context otherwise requires: (a) a term has the meaning assigned to it
by this Agreement; (b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles in
effect in the United States of
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America; (c) "or" is not exclusive; and (d) words in the singular include the
plural, and in the plural include the singular. The language used in this
Agreement shall be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction shall be applied against
any party. Any references to any statute or law shall also refer to all rules
and regulations promulgated thereunder, unless the context requires otherwise.
ARTICLE II.
BOARD COMPOSITION AND VOTING AGREEMENTS
SECTION 2.1. BOARD COMPOSITION.
The Restricted Stockholders will vote their shares of Common Stock to elect the
following directors:
(i) ▇▇▇▇▇ ▇▇▇▇▇▇, and four (4) additional directors
designated by the PCP Entities (the "PCP Directors").
(ii) One (1) director nominated by Mitsui.
(iii) Three (3) Independent Directors.
If Mitsui elects not to designate a person for the position of director
of the Company, Mitsui shall have the right to nominate a non-voting observer to
the Board of Directors of the Company (the "Observer"). The Restricted
Stockholders shall cause their nominees on the Board of Directors of the Company
to permit the Observer to participate in all meetings of the Board of Directors
of the Company. The Observer shall be entitled to receive all materials and
information distributed to directors of the Company and shall have access to the
Company's management and records as if such Observer were a director.
SECTION 2.2. COMPOSITION OF COMMITTEES OF THE BOARD OF DIRECTORS.
The Restricted Stockholders shall use their reasonable best efforts to have the
Compensation and Stock Option Committee of the Board of Directors of the Company
consist of four persons as follows:
(i) ▇▇▇▇▇ ▇▇▇▇▇▇ and one (1) additional PCP Director.
(ii) Two (2) Independent Directors.
SECTION 2.3. VOTING AGREEMENT.
Each of the Restricted Stockholders agrees to vote all of the voting securities
of the Company Beneficially Owned by it in favor of the persons to be nominated
as directors pursuant to Section 2.1 and to take all other reasonable action to
cause such Persons to be elected as the only directors of the Company.
SECTION 2.4. REDUCTION IN RIGHT OF PCP ENTITIES TO DESIGNATE DIRECTORS.
Notwithstanding anything to the contrary contained in this Agreement, at such
time as the percentage Beneficial Ownership in the Company of the PCP Entities
together with the
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Beneficial Ownership in the Company of Penske, taken together, and excluding
Common Stock Beneficially Owned by the PCP Entities as a result of unexercised
Warrants ("Adjusted Beneficial Ownership") is reduced below 20% then the number
of PCP Directors shall be reduced to the applicable number in the chart below:
If such Adjusted Beneficial Ownership No. of PCP Directors to be
is equal to or greater than: But less than: designated thereafter
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17.5% 20.0% 4
15.0% 17.5% 3
12.5% 15.0% 2
10.0% 12.5% 1
Any reduction resulting from application of this Section 2.4 shall take place on
the earlier to occur of (x) the first meeting of stockholders of the Company
following the determination of such reduction, and (y) the first vacancy on the
Board of Directors following the determination of such reduction.
SECTION 2.5. SUSPENSION OF RIGHT TO DESIGNATE DIRECTORS.
Notwithstanding anything to the contrary contained in this Agreement, the right
of the PCP Entities or Mitsui, as the case may be, to designate directors of the
Company shall be suspended as follows:
(a) with respect to the PCP Entities, their Adjusted Beneficial
Ownership combined with the Beneficial Ownership in the Company of Penske is
reduced below 10%; or
(b) with respect to Mitsui together with any of its Affiliates, its
Beneficial Ownership is reduced below 2.5%; or
(c) in the case of the PCP Entities, if either (i) they are in default
of Section 5.2(b) other than as a result of the death, incapacity, or capture
and detention of Mr. Penske, or (ii) one or both of the PCP Entities has
requested that the Company repurchase all or a portion of its Restricted
Securities pursuant to the terms of the Securities Purchase Agreement.
SECTION 2.6. REPLACEMENT DIRECTORS.
During such time as the right of either the PCP Entities or Mitsui to nominate
directors is reduced or suspended pursuant to Section 2.4 or 2.5, the Restricted
Stockholders shall use their reasonable best efforts to have the successors to
such directors both: (a) be selected by a majority of the remaining Board of
Directors, excluding the director whose position is no longer entitled to be
designated by Mitsui or the PCP Entities, and (b) not be Affiliates of the PCP
Entities and their Affiliates (other than the Company and its subsidiaries).
SECTION 2.7. RESIGNATION OF PCP DIRECTORS.
Upon exercise by the PCP Entities of their right pursuant to Section 7.2 or 7.4
of the Securities Purchase Agreement, the PCP Entities shall cause all of the
PCP Directors to immediately resign as members of the Board of Directors of the
Company.
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SECTION 2.8. TERMINATION OF ARTICLE II.
The provisions contained in this Article II shall terminate and be of no further
effect from and after the third anniversary of this Agreement.
SECTION 2.9. QUORUM.
The presence of at least six Directors shall constitute a quorum for the purpose
of meetings of the Board of Directors of the Company.
ARTICLE III.
STANDSTILL PROVISIONS
SECTION 3.1. STANDSTILL PROVISIONS.
Subject to Section 3.2, at any time prior to December 14, 2003, each Restricted
Stockholder shall not, and shall cause its Affiliates not to, either alone or as
part of a "group" (as such term is used in Section 13d-5 (as such rule is
currently in effect) of the Exchange Act), directly or indirectly:
(a) acquire or seek to acquire, by purchase or otherwise, ownership
(including, but not limited to, Beneficial Ownership) of (i) any capital stock
of the Company, or direct or indirect rights (including convertible securities)
or options to acquire such capital stock or (ii) any of the assets or businesses
of the Company, or direct or indirect rights or options to acquire such assets
or businesses;
(b) offer, seek or propose to enter into any transaction of merger,
consolidation, sale of substantial assets or any other business combination
involving the Company or any of its Affiliates, whether or not any parties other
than such Restricted Stockholder and its Affiliates are involved;
(c) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" (as such terms are defined or used in Regulation 14A
under the Exchange Act) or become a "participant" in any "election contest" (as
such terms are defined or used in Rule 14a-11 under the Exchange Act) to vote,
or seek to advise or influence any person or entity with respect to the voting
of, any voting securities of the Company of any of its Affiliates, except as set
forth in Article II of this Agreement;
(d) initiate or propose any stockholder proposals for submission to a
vote of stockholders, whether by action at a stockholder meeting or by written
consent, with respect to the Company or any of its Affiliates, or except as
provided in this Agreement propose any person for election to the Board of
Directors of the Company;
(e) disclose to any third party, or make any filing under the Exchange
Act, including, without limitation, under Section 13(d) thereof, disclosing, any
intention, plan or arrangement inconsistent with the foregoing;
(f) form, join or in any way participate in a group to take any actions
otherwise prohibited by the terms of this Agreement;
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(g) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the foregoing; or
(h) make any public announcement with respect to any of the foregoing.
SECTION 3.2. EXCEPTIONS TO THE STANDSTILL PROVISIONS.
Notwithstanding the foregoing, the provisions of Section 3.1 shall not prohibit:
(a) any transaction by a Restricted Stockholder approved by either (i)
a majority of the members of the Board of Directors who are neither designated
by such Restricted Stockholder nor otherwise affiliated with such Restricted
Stockholder, or (ii) a majority of the stockholders of the Company other than
such Restricted Stockholder and its Affiliates;
(b) in the case of the PCP Entities, the acquisition of securities
pursuant to the terms of the Securities Purchase Agreement;
(c) (i) in the case of the PCP Entities, the acquisition of securities
or of Beneficial Ownership of securities if, after giving effect to such
acquisition, the Beneficial Ownership of the PCP Entities in the Company is less
than or equal to 65% and (ii) in the case of each of Harvard, Apollo and Mitsui,
the acquisition of securities of the Company or of Beneficial Ownership of
securities of the Company if, after giving effect to such acquisition, the
Beneficial Ownership of each such Restricted Stockholder in the Company is less
than or equal to 49%;
(d) the granting by the Board of Directors of options to Affiliates of
Restricted Stockholders; or
(e) the exercise of stock options.
ARTICLE IV.
TRANSFER RESTRICTIONS
SECTION 4.1. RESTRICTIONS ON TRANSFER OF RESTRICTED SECURITIES.
Until the third anniversary of the Initial Closing Date, the PCP Entities shall
not Transfer any of their Restricted Securities except:
(a) as part of a merger, consolidation or amalgamation of the Company
or a tender offer for Common Stock of the Company which is open to all
stockholders of the Company;
(b) a Transfer of Common Stock in compliance with Section 4.2 of this
Agreement to a Transferee that has agreed to comply with the provisions of
Section 4.2; or
(c) to a Permitted Transferee who shall have become a party to this
Agreement by executing a signature page hereto and delivering such signature
page to the Company and the other Restricted Stockholders, which execution and
delivery shall constitute an agreement by such Permitted Transferee that it and
the Restricted Securities that it acquires shall be bound by and entitled to the
benefits of this Agreement.
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SECTION 4.2. TAG-ALONG RIGHTS
(a) In the event either or both of the PCP Entities desires to Transfer
any Restricted Securities pursuant to Section 4.1(b) at any time prior to the
third anniversary of the Initial Closing Date, such PCP Entity shall notify
Apollo and Harvard (the "Tag-Along Stockholders") in writing, of such proposed
Transfer and its terms and conditions (the "Tag-Along Notice"); and
(b) Within ten (10) Business Days of the date of the Tag-Along Notice,
each Tag-Along Stockholder shall notify the PCP Entities if it elects to
participate in such Transfer. Any such Tag-Along Stockholder that fails to
notify either PCP Entity within such ten (10) Business Day period shall be
deemed to have waived its rights to participate in such Transfer. Each such
Tag-Along Stockholder that so notifies the PCP Entities shall have the right to
Transfer, at the same price per share of Common Stock and on the same terms and
conditions as the applicable PCP Entity or Entities, an amount of shares equal
to the shares the Transferee actually proposes to purchase multiplied by a
fraction, the numerator of which shall be the number of shares of Common Stock
issued and owned by such Tag-Along Stockholder and the denominator of which
shall be the aggregate number of shares of Common Stock issued and owned by such
PCP Entity (or both PCP Entities, if both are selling pursuant to such
transaction) and each other Tag-Along Stockholder exercising its rights under
this Section (assuming for purposes of calculating such fraction the conversion
of all convertible securities and the exercise of all options and warrants held
by the PCP Entities and each other Tag-Along Stockholder exercising its rights
under this Section).
SECTION 4.3. TRANSFEREES; NONCOMPLYING TRANSFERS.
In the event of any purported Transfer of any Restricted Securities in violation
of Article IV of this Agreement, such purported Transfer shall be void and of no
effect, and no dividend of any kind whatsoever nor any distribution pursuant to
liquidation or otherwise shall be paid by the Company to the purported
transferee in respect of such Restricted Securities (all such dividends and
distributions being deemed waived), and the voting rights of such Restricted
Securities, if any, on any matter whatsoever shall remain vested in the
Transferor, and the Transferor shall not be relieved of any of its obligations
hereunder as the holder of such Restricted Securities. In the event of such a
non-complying Transfer, the Company shall not Transfer any such Restricted
Securities on its books or recognize the purported Transferee as a stockholder,
for any purpose, until all applicable provisions of this Agreement have been
complied with.
SECTION 4.4. RESTRICTIONS ON TRANSFERS OF INTERESTS IN THE PCP ENTITIES.
Until the second anniversary of the Initial Closing Date:
(a) Each of the PCP Entities shall not register or permit any Transfer
of the membership interests in such entity by Penske or Penske Capital Partners,
L.L.C., except pursuant to a pro rata Transfer by all of the members of
interests valued at up to $15 million to certain members of the Company's
management (a "Management Incentive Transfer").
(b) Penske and Penske Capital Partners, L.L.C. each agrees not to
Transfer any interest in the PCP Entities or Restricted Securities, except for a
Management Incentive Transfer.
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ARTICLE V.
CERTAIN COVENANTS
SECTION 5.1. LEGEND ON CERTIFICATES.
(a) Each certificate for Restricted Securities held by the PCP Entities
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THAT
CERTAIN STOCKHOLDERS AGREEMENT, BY AND AMONG UNITED AUTO GROUP, INC.,
INTERNATIONAL MOTOR CARS GROUP I, L.L.C., INTERNATIONAL MOTOR CARS
GROUP II, L.L.C., AIF II, L.P., AENEAS VENTURE CORPORATION AND MITSUI &
CO., LTD., A COUNTERPART OF WHICH STOCKHOLDERS AGREEMENT HAS BEEN
PLACED ON FILE BY THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS AND
ITS REGISTERED OFFICE. A COPY OF SUCH STOCKHOLDERS AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE RECORD HOLDER HEREOF
UPON WRITTEN REQUEST TO THE COMPANY AT THE PRINCIPAL PLACE OF BUSINESS
OF THE COMPANY."
(b) Each certificate for shares of Common Stock of the Company held by
Mitsui shall include the legend set forth in Section 1.5 of the Purchase
Agreement.
SECTION 5.2. ▇▇▇▇▇ ▇▇▇▇▇▇ TO SERVE AS CHAIRMAN AND CHIEF EXECUTIVE OFFICER.
(a) On the Initial Closing Date, the Restricted Stockholders (other
than Mitsui) shall use their reasonable best efforts to have ▇▇▇▇▇ ▇▇▇▇▇▇
appointed as Chairman and Chief Executive Officer of the Company.
(b) From and after the Initial Closing Date, the PCP Entities shall
cause ▇▇▇▇▇ ▇▇▇▇▇▇:
(i) to serve as the Chairman of the Company until the third
anniversary of the Second Closing Date and as Chief Executive Officer
of the Company until the second anniversary of the Second Closing Date;
provided, however, such obligation shall cease if pursuant to Sections
2.4 or 2.5, PCP Directors shall no longer constitute a majority of the
Company's Board of Directors, and provided further, that upon exercise
by the PCP Entities of their right pursuant to Section 7.2 or 7.4 of
the Securities Purchase Agreement, ▇▇▇▇▇ ▇▇▇▇▇▇ shall promptly, but in
no event later than the Business Day immediately following such
exercise, resign as Chairman, as a Director and as Chief Executive
Officer;
(ii) to receive compensation payable by the Company no greater
than: (x) salary of $1 per annum, (y) a bonus determined by the
Compensation Committee of the Board of Directors, and (z) options for
400,000 shares of Common Stock with an exercise price of $10.00 per
share to be granted on the Second Closing Date.
Such options shall vest in equal installments over a three
year period from and after the Initial Closing Date, so long as Mr.
Penske continues to serve as Chairman of the Board of Directors.
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SECTION 5.3. APPROVAL OF COMPANY ACTION UNDER THE SECURITIES PURCHASE AGREEMENT.
From and after the Initial Closing Date, all consents, waivers, amendments or
other actions on the part of the Company under the Securities Purchase Agreement
and the other agreements with the PCP Entities contemplated by the Securities
Purchase Agreement shall be undertaken under the direction of a majority of the
Board of Directors (excluding for such purposes the PCP Directors and any other
directors Affiliated with either PCP Entity).
SECTION 5.4. CONFIDENTIALITY OBLIGATION.
(a) Mitsui shall treat as secret and confidential any and all
confidential information communicated by the Company to the member of the Board
of Directors designated by Mitsui or the Observer and shall therefore not
disclose or communicate such confidential information to any person or entity,
except to those employees and persons within Mitsui and/or its affiliates who
need to have access to such information for the purpose of monitoring Mitsui's
investment in the Company. Any such employee or person shall be bound by this
confidentiality obligation and shall be informed of the confidential nature of
the information.
(b) The obligations imposed above shall not apply to information.
(i) which becomes publicly available;
(ii) which Mitsui can establish was already in its possession at
the time such information was communicated to it;
(iii) which is received from a third party without restriction and
without breach of this Agreement;
(iv) which Mitsui can establish has been independently developed by
it; or
(v) which is required to be disclosed by applicable law, legal
process or, in connection with any judicial process, arbitration or
other proceeding.
SECTION 5.5. FURTHER ASSURANCES.
Each of the parties hereto shall use commercially reasonable efforts to do such
additional things and execute such documents as are reasonably necessary or
proper to carry out and effectuate the intent of this Agreement or any part
hereof.
ARTICLE VI.
MUTUAL REPRESENTATIONS AND WARRANTIES
Each of the parties hereto represents and warrants to the others as follows:
SECTION 6.1. ORGANIZATION.
It is duly organized, validly existing and in good standing under the laws of
its jurisdiction of formation.
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SECTION 6.2. AUTHORIZATION, VALIDITY AND ENFORCEABILITY.
It has full power and authority to execute, deliver and perform its obligations
under this Agreement. The execution, delivery and performance by it of this
Agreement and the consummation by it of the transactions contemplated hereby
have been duly authorized by its board of directors or other governing body and
no other proceedings on its part are necessary to authorize this Agreement or
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by it, and constitutes the legal, valid and binding obligation of it,
enforceable against it in accordance with the terms hereof, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting rights of creditors generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
SECTION 6.3. NO VIOLATION OR BREACH.
The execution, delivery and performance by it of this Agreement and the
consummation of the transactions contemplated hereby, do not and will not
conflict with, result in a violation or breach of, constitute a default (or an
event which with the giving of notice or the lapse of time or both would
constitute a default) or give rise to any right of termination or acceleration
of any right or obligation of it under, or result in the creation or imposition
of any lien, mortgage, pledge, security interest, claim, right of first refusal
or other limitation on transfer or other encumbrance upon any of its Restricted
Securities or shares of Common Stock of the Company, as the case may be, by
reason of the terms of, (a) its memorandum of association, certificate of
incorporation, by-laws or other charter or organizational document, (b) any
contract, agreement, lease, license, mortgage, note, bond, debenture, indenture
or other instrument or obligation to which it is a party or by or to which it or
its assets or properties may be bound or subject, (c) any order, writ, judgment,
injunction, award, decree, law, statute, rule or regulation applicable to it or
(d) any license, permit, order, consent, approval, registration, authorization
or qualification with or under any governmental agency, other than in the case
of clauses (b), (c) or (d) above any conflict, violation, breach or default
which would not, individually or in the aggregate together with all other such
conflicts, violations, breaches or defaults, have a material adverse effect on
it or have a material adverse effect on its ability to perform its obligations,
or consummate the transactions contemplated, hereunder.
ARTICLE VII.
TERM
SECTION 7.1. TERM.
This Agreement shall commence on the date hereof, and shall terminate on
December 31, 2009. This Agreement shall terminate with respect to a Restricted
Stockholder at such time as it ceases to Beneficially Own any Restricted
Securities or any shares of Common Stock of the Company, as the case may be.
SECTION 7.2. EFFECTS OF TERMINATION.
Upon termination of this Agreement, this Agreement (other than Section 8.9)
shall thereafter become void and have no effect, and no party hereto shall have
any liability or obligation to any other party hereto in respect of this
Agreement, except for any liability resulting from such party's breach of this
Agreement.
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ARTICLE VIII.
MISCELLANEOUS PROVISIONS
SECTION 8.1. SURVIVAL.
All of the representations, warranties, covenants, and agreements of the parties
contained in this Agreement shall survive until this Agreement is terminated.
SECTION 8.2. NOTICES.
All notices, demands or other communications to be given or delivered under or
by reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given (a) when delivered personally to the recipient, (b)
two Business Days after the date when sent to the recipient by reputable express
courier service (charges prepaid), or (c) seven Business Days after the date
when mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
shall be sent to the parties at the addresses indicated below:
If to Apollo Apollo Advisors, LP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Harvard Aeneas Venture Corporation
c/o Charlesbank Capital Partners, LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
With a copy to: Ropes & ▇▇▇▇
(which shall not One International Place
constitute notice) ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to either PCP c/o Penske Capital Partners, LLC
Entity ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
(which shall not One New York Plaza
constitute notice) ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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If to Mitsui Japan: Mitsui & Co., Ltd.
First Motor Vehicles Div.
▇-▇, ▇▇▇▇▇▇▇▇▇, ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇
Attention: General Manager of First Motor
Vehicles Div.
If to Mitsui USA: Mitsui & Co. (U.S.A.), Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Manager,
Detroit Machinery and Automotive
Department, Second Machinery
Division
With a copy to: Debevoise & ▇▇▇▇▇▇▇▇
(which shall not ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
constitute notice) ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company: United Auto Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party hereto may, from time to time,
designate in writing delivered pursuant to the terms of this Section 8.2.
SECTION 8.3. AMENDMENTS.
The terms, provisions and conditions of this Agreement may not be changed,
modified or amended in any manner except by an instrument in writing duly
executed by all of the parties hereto.
SECTION 8.4. ASSIGNMENT AND PARTIES IN INTEREST.
(a) Except as provided in Section 4.1(c), neither this Agreement nor
any of the rights, duties, or obligations of any party hereunder may be assigned
or delegated (by operation of law or otherwise) by any party hereto except with
the prior written consent of the other parties hereto.
(b) This Agreement shall not confer any rights or remedies upon any
person or entity other than the parties hereto and their respective permitted
successors and assigns; provided, however, that (i) the rights set forth in
Article II hereof shall not inure to the benefit of any transferee (other than a
Permitted Transferee) without the prior written consent of each Restricted
Stockholder (other than the Transferor) and (ii) the provisions of this
Agreement shall not be binding on any Transferee of Restricted Securities or
shares of Common Stock of the Company, as the case may be, except as set forth
in Sections 4.1(c) and 4.2.
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SECTION 8.5. EXPENSES.
Each party to this Agreement shall bear all of its legal, accounting, investment
banking, and other expenses incurred by it or on its behalf in connection with
the transactions contemplated by this Agreement, whether or not such
transactions are consummated.
SECTION 8.6. ENTIRE AGREEMENT.
This Agreement and the other documents executed on the date hereof constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof and supersede and are in full substitution for any and all prior
agreements and understandings among them relating to such subject matter, and no
party shall be liable or bound to the other party hereto in any manner with
respect to such subject matter by any warranties, representations, indemnities,
covenants, or agreements except as specifically set forth herein or in the other
documents executed on the date hereof.
SECTION 8.7. DESCRIPTIVE HEADINGS.
The descriptive headings of the several sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
SECTION 8.8. COUNTERPARTS.
For the convenience of the parties, any number of counterparts of this Agreement
may be executed by any one or more parties hereto, and each such executed
counterpart shall be, and shall be deemed to be, an original, but all of which
shall constitute, and shall be deemed to constitute, in the aggregate but one
and the same instrument.
SECTION 8.9. GOVERNING LAW; JURISDICTION.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to the conflicts of
law principles thereof which might result in the application of the laws of any
other jurisdiction.
(b) Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the jurisdiction of the courts of the State of New York
and the United States of America located in the County of New York solely in
respect of the interpretation and enforcement of the provisions of this
Agreement, and in respect of the transactions contemplated hereby, and further
agrees that service of any process, summons, notice or document to its
respective address set forth in Section 8.2 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.
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SECTION 8.10. SEVERABILITY.
In the event that any one or more of the provisions contained in this Agreement
or in any other instrument referred to herein, shall, for any reason, be held to
be invalid, illegal or unenforceable in any respect, then to the maximum extent
permitted by law, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement or any other such instrument.
Furthermore, if lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.
SECTION 8.11. SPECIFIC PERFORMANCE.
(a) The parties hereto acknowledge and agree that irreparable damage
would occur in the event that any provision of this Agreement was not performed
in accordance with its specific terms or was otherwise breached, and further
acknowledge and agree that money damages are an inadequate remedy for the breach
of this Agreement because of the difficulty of ascertaining the amount of damage
that would be suffered in the event of such breach. The parties hereto
accordingly agree that they each shall be entitled to obtain specific
performance of any provision of this Agreement and injunctive or other equitable
relief to prevent or cure breaches of any provision of this Agreement, this
being in addition to any other remedy to which they may be entitled by law or
equity.
(b) The parties hereto further agree that they shall not be permitted
or have the right to terminate or suspend performance of any provision of this
Agreement, it being agreed that all provisions of this Agreement shall continue
and be specifically enforceable in all events and under all circumstances
regardless of any events, occurrences, actions or omissions before or after the
date hereof. In furtherance of the foregoing, the parties hereto agree that they
shall not be permitted to, and shall not, bring any claim seeking to terminate
or suspend performance of any provision of this Agreement or seeking any
determination that any provision of this Agreement (including, without
limitation, this Section 8.11) is invalid, inapplicable or unenforceable.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
AIF II. L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
AENEAS VENTURE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
INTERNATIONAL MOTOR CARS GROUP I, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman
INTERNATIONAL MOTOR CARS GROUP II, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman
MITSUI & CO., LTD.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Operating Officer, Motor Vehicles,
Marine & Aerospace Group
MITSUI & CO. (U.S.A.), INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
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UNITED AUTO GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Solely for the purposes
of Section 4.4 hereof:
PENSKE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
PENSKE CAPITAL PARTNERS, L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman
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