STOCK PURCHASE AGREEMENT
DATED AS OF AUGUST 5, 1996
AMONG
UNITED AUTO GROUP, INC.,
UAG ATLANTA IV, INC.,
XXXXXXX XXXXX NISSAN, INC.,
AND
XXXXXXX X. XXXXX
This STOCK PURCHASE AGREEMENT, dated as of August 5, 1996 is by and
among United Auto Group, Inc., a Delaware corporation ("UAG"), UAG Atlanta IV,
Inc., a Delaware corporation ("Sub"), Xxxxxxx Xxxxx Nissan, Inc., a Georgia
corporation (the "Company"), and Xxxxxxx X. Xxxxx ("Xxxxx" or the
"Stockholder").
W I T N E S S E T H:
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WHEREAS, the Company operates a Nissan automobile dealership and related
businesses in Conyers, Georgia;
WHEREAS, the Stockholder owns all of the issued and outstanding shares
of common stock of the Company (the "Common Stock");
WHEREAS, Sub is a wholly-owned subsidiary of UAG; and
WHEREAS, Sub desires to purchase all of the issued and outstanding
shares of the Common Stock from the Stockholder (such shares being collectively
referred to herein as the "Shares"), and the Stockholder desires to sell the
Shares to Sub (upon the terms and subject to the conditions set forth in this
Agreement), such that immediately after giving effect to such purchase and
sale, Sub will own one hundred (100%) percent of all of the issued and
outstanding shares of Common Stock, on a fully diluted basis;
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
1.1 PURCHASE AND SALE OF THE SHARES.
(a) PURCHASE AND SALE. Upon the terms and subject to the conditions
set forth in this Agreement, the Stockholder shall sell to Sub, and Sub shall
purchase from the Stockholder, the Shares for an aggregate purchase price equal
to Two Million Dollars ($2,000,000) (the "Base Price"), which Base Price is
subject to adjustment after Closing as provided in SECTION 1.2 hereof. At the
Closing referred to in SECTION 1.1(b) hereof:
(i) the Stockholder shall sell, assign, transfer and deliver to Sub
the Shares representing 100% of the outstanding Common Stock, free and
clear of all Liens (as defined in SECTION 10.11), and shall deliver the
certificates representing such Shares accompanied by stock powers duly
executed in blank; and
(ii) Sub shall accept and purchase the Shares from the Stockholder and
in payment therefor shall deliver to the Stockholder immediately available
funds in an
aggregate amount equal to the Base Price by wire transfer to an account
designated in writing by the Stockholder or by certified funds.
(b) CLOSING. Subject to the conditions set forth in this Agreement,
the purchase and sale of the Shares pursuant to this Agreement (the "Closing")
shall take place at the offices of Xxxxxx & Xxxxxx, 2700 Xxxx Tower, Peachtree
Center, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, or such other
location as the parties shall agree, within ten (10) Business Days of the UAG
Public Offering Date (as defined in SECTION 10.11) or on November 30, 1996,
whichever occurs first (the "Closing Date"). The date on which the Closing
occurs is herein referred to as the "Closing Date". The Closing shall take
place on the same date as the closing of the Stock Purchase Agreement dated as
of August 5, 1996 between UAG, Sub, Xxxxxxx Xxxxx BMW, Inc. and Xxxxx (the "BMW
Stock Purchase Agreement").
(c) DELIVERIES AT THE CLOSING. Subject to the conditions set forth in this
Agreement, at the Closing:
(i) The Stockholder shall deliver to Sub (A) certificates representing
the Shares bearing the restrictive legend customarily placed on securities
that have not been registered under applicable federal and state securities
laws and accompanied by stock powers as required by SECTION 1.1(a)(i)
hereof, and any other documents that are necessary to transfer to Sub good
title to all the Shares, and (B) all opinions, certificates and other
instruments and documents required to be delivered by the Stockholder at or
prior to the Closing or otherwise required in connection herewith;
(ii) Sub shall pay and deliver to the Stockholder funds as required by
SECTION 1.1(a)(ii) hereof and all opinions, certificates and other
instruments and documents required to be delivered by Sub at or prior to
the Closing or otherwise required in connection herewith;
(iii) the Stockholder and Sub shall enter into a real estate purchase
agreement in a form mutually acceptable to the parties (the "Real Estate
Purchase Agreement") pursuant to which Sub shall agree to purchase the real
property used in the business of the Company and commonly known as 0000
Xxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000 (the "Nissan Property") on or before the
eighteenth month anniversary of the Closing Date for a purchase price equal
to Two Million Nine Hundred Forty-Five Thousand Dollars ($2,945,000). The
closing of the purchase of the Nissan Property shall take place on the same
date as the Real Estate Closing as that term is defined in the BMW Stock
Purchase Agreement;
(iv) the Stockholder, Sub and the Company shall enter into a lease for
the Nissan Property in a form mutually acceptable to the parties (the
"Nissan Lease"). The initial lease rate shall be $20,000 per month and on
the one year anniversary of the Closing Date shall increase by a percentage
equal to the percentage increase in the Consumer Price Index published by
the United States Department of Labor for the
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preceding twelve months. The Nissan Lease payments shall be paid
monthly commencing on the Closing Date. The Lease shall terminate at the
Real Estate Closing.
1.2 NET WORTH ADJUSTMENT.
(a) As soon as practicable after the Closing Date, the Stockholder
shall deliver to Sub a balance sheet of the Company dated as of the Closing Date
(such balance sheet so delivered is referred to herein as the "Closing Date
Balance Sheet"). The Closing Date Balance Sheet shall be prepared in good faith
on the same basis and in accordance with the accounting principles, methods and
practices used in preparing the Company Financial Statements (as defined in
SECTION 2.5 hereof), subject to the modifications, adjustments and exceptions to
such accounting principles, methods and practices set forth on SCHEDULE 1.2(a)
hereto (such accounting principles, methods and practices as so modified and
adjusted, and such procedures, are referred to herein as the "Accounting
Principles"). In connection with the preparation of the Closing Date Balance
Sheet, the Stockholder and the Company and the Reviewer (as defined below) and
other representatives of Sub will conduct a physical inventory at each location
where inventory is held by the Company. From the results of such inventory and
prior to the Closing Date, Sub and the Stockholder (or the respective
representatives thereof) will prepare a schedule, which shall be signed by each
of Sub and the Stockholder, setting forth the nature and quality of such
inventory and such other items as shall be agreed upon by Sub and the
Stockholder to be included in the Closing Date Balance Sheet.
(b) Within forty-five (45) days after delivery of the Closing Date
Balance Sheet, (i) Coopers & Xxxxxxx or such other national accounting firm (the
"Reviewer") selected by Sub, shall audit or otherwise review the Closing Date
Balance Sheet in such manner as Sub and the Reviewer deem appropriate, and (ii)
Sub shall deliver such reviewed balance sheet (the "Reviewed Balance Sheet"),
together with the Reviewer's report thereon, to the Stockholder. The Reviewed
Balance Sheet (i) shall be prepared on the same basis and in accordance with the
Accounting Principles and (ii) shall include a schedule showing the computation
of the Final Net Worth (as defined in SECTION 1.2(g)(i) hereof), computed in
accordance with the definition of Net Worth set forth in SECTION 1.2(g)(iii)
hereof. Sub and the Reviewer shall have the opportunity to consult with the
Stockholder, the Company and each of the accountants and other representatives
of the Stockholder and the Company and examine the work papers, schedules and
other documents prepared by the Stockholder, the Company and each of such
accountants and other representatives during the preparation of the Closing Date
Balance Sheet. The Stockholder and the Stockholder's independent public
accountants shall have the opportunity to consult with the Reviewer and examine
the work papers, schedules and other documents prepared by Sub and the Reviewer
during the preparation of the Reviewed Balance Sheet.
(c) The Stockholder shall have a period of forty-five (45) days after
delivery to the Stockholder of the Reviewed Balance Sheet to present in writing
to Sub all objections the Stockholder may have to any of the matters set forth
or reflected therein, which objections
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shall be set forth in reasonable detail. During said forty-five (45) day period,
the Stockholder, their accountants and other representatives of the
Stockholder may, at the office of the Company or the office of the Reviewer,
as determined by Stockholder, examine Reviewer's work papers, schedules,
research notes and all correspondence between Reviewer and Sub or UAG or any
representative of Sub or UAG, which relate to the Closing Date Balance Sheet
or Reviewed Balance Sheet and any entry thereto made, considered or proposed
by Reviewer. If no objections are raised within such 45-day period, the
Reviewed Balance Sheet shall be deemed accepted and approved by the
Stockholder and a supplemental closing (the "Supplemental Closing") shall
take place within five (5) Business Days following the expiration of such
45-day period, or on such other date as may be mutually agreed upon in
writing by Sub and the Stockholder.
(d) If the Stockholder shall raise any objection within the 45-day
period, Sub and the Stockholder shall attempt to resolve the matter or matters
in dispute and, if resolved, the Supplemental Closing shall take place within
five (5) Business Days following such resolution.
(e) If such dispute cannot be resolved by Sub and the Stockholder
within sixty (60) days after the delivery of the Reviewed Balance Sheet, then
the specific matters in dispute shall be submitted to a firm of independent
certified public accountants having a reputation for special expertise in
automobile dealership accounting and mutually acceptable to Sub and the
Stockholder, which firm shall make a final and binding determination as to such
matter or matters. Such accounting firm shall send its written determination to
Sub and the Stockholder and the Supplemental Closing, if any, shall take place
five (5) Business Days following the receipt of such determination by Sub and
the Stockholder. The fees and expenses of the accounting firm referred to in
this SECTION 1.2(e) shall be paid one half by Sub and one half by the
Stockholder.
(f) Sub and the Stockholder agree to cooperate with each other and
each other's authorized representatives and with any accounting firm selected by
Sub and the Stockholder pursuant to SECTION 1.2 (e) hereof in order that any and
all matters in dispute shall be resolved as soon as practicable.
(g) (i) If the Net Worth as shown on the Reviewed Balance Sheet as
finally determined through the operation of SECTIONS 1. 2 (a) through (e) hereof
shall be less than the net worth of the Company as set forth on the Company
Balance Sheet (the "December 31 Net Worth") (the amount of any such deficiency
being referred to herein as the "Net Worth Deficiency"), the Stockholder shall
pay to Sub at the Supplemental Closing, by wire transfer of immediately
available funds to an account designated in writing by Sub within two (2)
Business Days of the date of the Supplemental Closing, an amount equal to the
Net Worth Deficiency, together with interest on such amount from the date the
Reviewed Balance Sheet is delivered to the Stockholder until paid at the prime
rate or its equivalent (as announced from time to time by Citibank, N.A.).
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(ii) If the Net Worth as shown on the Closing Date Balance Sheet is
equal to or greater than the December 31 Net Worth and the Net Worth as shown on
the Reviewed Balance Sheet as finally determined through the operation of
SECTIONS 1.2(a) THROUGH (e) hereof shall be greater than the Net Worth as shown
on the Closing Date Balance Sheet, then Sub shall pay to the Stockholder at the
Supplemental Closing an amount equal to the difference between the Net Worth as
shown on the Reviewed Balance Sheet of the Net Worth as shown on the Closing
Date Balance Sheet.
(iii) "Net Worth" computed in connection with the Closing Date
Balance Sheet and the Reviewed Balance Sheet shall mean the amount by which the
total assets exceed the total liabilities reflected, in each case, on the
balance sheet of Company comprising the Closing Date Balance Sheet or the
Reviewed Balance Sheet, as the case may be.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE STOCKHOLDER
Subject to the parties' agreement and acknowledgment that the Schedule
referred to in ARTICLE 2 are to be delivered by the Company and the Stockholder
no later than August 15, 1996, the Company and the Stockholder hereby jointly
and severally represent and warrant to UAG and Sub as follows:
2.1 ORGANIZATION AND GOOD STANDING.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Georgia and has the corporate
power and authority to own, lease and operate the properties used in its
business and to carry on its business as now being conducted. The Company
has not conducted its business under any assumed names during the last five
years. Attached as SCHEDULE 2.1(b) are complete and correct copies of the
Company's ARTICLEs of Incorporation and Bylaws as amended and presently in
effect.
2.2 SUBSIDIARIES.
The Company does not have any interest or investment in any Person (as
defined in SECTION 10.11 hereof).
2.3 CAPITALIZATION.
The authorized stock of the Company and the number of shares of capital
stock that are issued and outstanding are set forth on SCHEDULE 2.3 hereto.
The shares listed on SCHEDULE 2.3 hereto constitute all the issued and
outstanding shares of capital stock of the Company and have been validly
authorized and issued, are fully paid and nonassessable, have not been issued
in violation of any preemptive rights or of any federal or state securities
law
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and no personal liability attaches to the ownership thereof. There is no
security, option, warrant, right, call, subscription, agreement, commitment
or understanding of any nature whatsoever, fixed or contingent, that directly
or indirectly (i) calls for the issuance, sale, pledge or other disposition
of any shares of capital stock of the Company or any securities convertible
into, or other rights to acquire, any shares of capital stock of the Company,
or (ii) obligates the Company to grant, offer or enter into any of the
foregoing, or (iii) relates to the voting or control of such capital stock,
securities or rights, except as provided in this Agreement. The Company has
not agreed to register any securities under the Securities Act.
2.4 AUTHORITY; APPROVALS AND CONSENTS.
The Company has the corporate power and authority to enter into this
Agreement and to perform its obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby and thereby have been duly authorized
and approved by the Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize and approve
this Agreement and the transactions contemplated hereby and thereby. This
Agreement has been duly executed and delivered by, and constitutes a valid
and binding obligation of, the Company, enforceable against the Company in
accordance with its terms. The execution, delivery and performance by the
Company and the Stockholder of this Agreement and Real Estate Purchase
Agreement and the consummation of the transactions contemplated hereby and
thereby do not and will not:
(i) contravene any provisions of the ARTICLEs of Incorporation or By-
Laws of the Company;
(ii) (after notice or lapse of time or both) conflict with, result in a
breach of any provision of, constitute a default under, result in the
modification or cancellation of, or give rise to any right of termination
or acceleration in respect of, any Company Agreement (as defined in SECTION
2.15 hereof) or, require any consent or waiver of any party to any Company
Agreement (except for the rights of [Nissan] ("Nissan") under the Dealer
Agreement between Nissan and Xxxxx (the "Nissan Agreement");
(iii) result in the creation of any Lien upon, or any Person obtaining
any right to acquire, any properties, assets or rights of the Company
(other than the rights of Sub to acquire the Shares pursuant to this
Agreement);
(iv) violate or conflict with any Legal Requirements (as defined in
SECTION 2.9 hereof) applicable to the Company or any of its businesses or
properties; or
(v) require any authorization, consent, order, permit or approval of,
or notice to, or filing, registration or qualification with, any
governmental, administrative or judicial authority, except in connection
with or in compliance with the provisions of the H-S-R Act (as defined in
SECTION 5.11 hereof).
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Except as referred to above, no permit or approval of, or notice to any
governmental, administrative or judicial authority is necessary to be
obtained or made by the Company to enable the Company to continue to conduct
its business and operations and use its properties after the Closing in a
manner which is in all material respects consistent with that in which they
are presently conducted.
2.5 FINANCIAL STATEMENTS.
Attached as SCHEDULE 2.5 are true and complete copies of:
(i) (A) the audited balance sheet of the Company as of December
31, 1995 (the "Company Balance Sheet"), and the related statements of
income, stockholders' equity and cash flow for the fiscal year ended
December 31, 1995, together with the notes thereto, in each case examined
by and accompanied by the report of independent certified public
accountants, and (B) the audited balance sheet of the Company as of
December 31, 1994, and the related statements of income, stockholders'
equity and cash flow for the fiscal year ended December 31, 1994, together
with the notes thereto, in each case examined by and accompanied by the
report of independent certified public accountants; and
(ii) the most recent unaudited balance sheet of the Company and the
unaudited statements of income and stockholders' equity for the periods
ended on such date, together with the notes thereto;
(iii) the most recent monthly and year-to-date financial statements
provided to Nissan (the "Company Factory Statements");
(the financial statements referred to in clauses (i) and (ii) above,
including the notes thereto, being referred to herein collectively as the
"Company Financial Statements"). The Company Financial Statements are in
accordance with the books and records of the Company, fairly present the
consolidated financial position, results of operations, stockholders'
equity and changes in the financial position of the Company as of the
dates and for the periods indicated, in the case of the financial
statements referred to in clauses (i) and (ii) above in conformity with
GAAP consistently applied (except as otherwise indicated in such
statements) during such periods, and can be legitimately reconciled with
the financial statements and the financial records maintained and the
accounting methods applied by the Company for federal income tax purposes,
and the unaudited financial statements included in the Company Financial
Statements include all adjustments, which consist of only normal recurring
accruals, necessary for such fair presentations. The statements of income
included in the Company Financial Statements do not contain any items of
special or nonrecurring income except as expressly specified therein, and
the balance sheets included in the Company Financial Statements do not
reflect any write-up or revaluation increasing the book value of any
assets except as expressly stated therein. The books and accounts of the
Company are complete and correct in all material respects and fairly
reflect all of the transactions, items of
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income and expense and all assets and liabilities of the businesses of
the Company consistent with prior practices of the Company.
2.6 ABSENCE OF UNDISCLOSED LIABILITIES.
The Company does not have any liability of any nature whatsoever
(whether asserted or unasserted, due or to become due, accrued, absolute,
contingent or otherwise), including, without limitation, any unfunded
obligation under employee benefit plans or arrangements as described in
SECTION 2.17 AND 2.18 hereof or liabilities for Taxes (as defined in SECTION
2.8 hereof), except for (i) liabilities reflected or reserved against in the
most recent Company Financial Statement, (ii) current liabilities incurred in
the ordinary course of business and consistent with past practice after the
date of the Company Balance Sheet which, individually and in the aggregate,
do not have, and cannot reason-ably be expected to have, a Material Adverse
Effect, and (iii) liabilities disclosed on SCHEDULE 2.6 hereto. The Company
is not a party to any Company Agreement, or subject to any articles of
incorporation or bylaw provision, any other corporate limitation or any Legal
Requirement which has, or can reasonably be expected to have, a Material
Adverse Effect.
2.7 ABSENCE OF MATERIAL ADVERSE EFFECT; CONDUCT OF BUSINESS.
(a) Since December 31, 1995, except as set forth on SCHEDULE 2.7(a)
hereto, the Company has operated in the ordinary course of business
consistent with past practice and there has not been:
(i) any material adverse change in the assets, properties,
business, operations, prospects, net income or financial condition of
the Company and no factor, event, condition, circumstance or prospective
development exists which threatens or may threaten to have a Material
Adverse Effect;
(ii) any material loss, damage, destruction or other casualty to
the property or other assets of the Company, whether or not covered by
insurance;
(iii) any change in any method of accounting or accounting
practice of the Company; or
(iv) any loss of the employment, services or benefits of any key
employee of the Company (except for any such loss occurring after the
execution of this Agreement but prior to the Closing Date and disclosed
to UAG on or before the Closing Date).
(b) Since December 31, 1995, except as set forth in Schedule 2.7(b)
hereto, the Company has not:
(i) incurred any material obligation or liability (whether
absolute, accrued, contingent or otherwise), except in the ordinary
course of business consistent with past practice;
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(ii) failed to disclose or satisfy any lien or pay or satisfy
any obligation or liability (whether absolute, accrued, contingent or
otherwise), other than liabilities being contested in good faith and for
which adequate reserves have been provided;
(iii) mortgaged, pledged or subjected to any lien any of its
property or other assets except for mechanics' liens and liens for taxes
not yet due and payable;
(iv) sold or transferred any assets or cancelled any debts or
claims or waived any rights, except in the ordinary course of business
consistent with past practice;
(v) defaulted on any material obligation;
(vi) entered into any material transaction, except in the
ordinary course of business consistent with past practice;
(vii) written down the value of any inventory or written off as
uncollectible any accounts receivable or any portion thereof not
reflected in the Company Financial Statements;
(viii) granted any increase in the compensation or benefits of
employees other than increases in accordance with past practice not
exceeding 10% or entered into any employment or severance agreement or
arrangement with any of them (except for agreements or arrangements that
are in the ordinary course of business consistent with past practices,
that will be reflected as expenses on the Company's financial statements
prior to the Closing Date and that will not bind the Company after the
Closing Date);
(ix) made any individual capital expenditure in excess of
$75,000, or aggregate capital expenditures in excess of $200,000, or
additions to property, plant and equipment other than ordinary repairs
and maintenance;
(x) discontinued any franchise or the sale of any products or
product line;
(xi) incurred any obligation or liability to any employee for
the payment of severance benefits; or
(x) entered into any agreement or made any commitment to do any
of the foregoing.
2.8 TAXES.
The Company and, for any period during all or part of which the tax
liability of any other corporation was determined on a combined or
consolidated basis with the Company any such other corporation, have filed
timely all federal, state, local and foreign tax returns, reports and
declarations required to be filed correctly reflecting the Taxes (as defined
below) and all other information required to be reported thereon and have
paid, or made adequate
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provision for the payment of, all Taxes which are due pursuant to such
returns or pursuant to any assessment received by the Company or any such
other corporation. As used herein, "Taxes" shall mean all taxes, fees,
levies or other assessments, including but not limited to income, excise,
property (including property taxes paid by the Company pursuant to any
lease), sales, franchise, withholding, social security and unemployment taxes
imposed by the United States, any state, county, local or foreign government,
or any subdivision or agency thereof or taxing authority therein, and any
interest, penalties or additions to tax relating to such taxes, charges,
fees, levies or other assessments. Copies of all tax returns for each fiscal
year since the formation of the Company have been furnished or made available
to UAG or its representatives and such copies are accurate and complete as of
the date hereof. The Company has also furnished or made available to UAG
correct and complete copies of all notices and correspondence sent or
received since the formation of the Company by the Company to or from any
federal, state or local tax authorities. The Company filed all returns and
paid all taxes for the period ending December 31, 1995. In the ordinary
course, the Company makes adequate provision on its books for the payment of
all Taxes (including for the current fiscal period) owed by the Company.
Except to the extent reserves therefor are reflected on the Company Balance
Sheet, the Company is not liable, or will not become liable, for any Taxes
for any period ending on, prior to or through the date of the Company Balance
Sheet. On the Closing Date Balance Sheet, the Company will have adequately
reserved for the payment of any Taxes for any period ending on, prior to or
through the date of the Closing Date Balance Sheet. Except as set forth on
SCHEDULE 2.8 hereto, the Company has not been subject to a federal or state
tax audit of any kind, and no adjustment has been proposed by the Internal
Revenue Service ("IRS") with respect to any return for any subsequent year.
With respect to the audits referred to on SCHEDULE 2.8 hereto, no such audit
has resulted in an adjustment in excess of $50,000. Neither the Company nor
the Stockholder knows of any basis for an assertion of a deficiency for Taxes
against the Company. The Stockholder will cooperate with the Company in the
filing of any returns and in any audit or refund claim proceedings involving
Taxes for which the Company may be liable or with respect to which the
Company may be entitled to a refund.
2.9 LEGAL MATTERS.
(a) Except as set forth on SCHEDULE 2.9(a) hereto and except for Claims
(as defined below) that do not exceed Thirty Thousand Dollars ($30,000), (i)
there is no claim, action, suit, litigation, investigation, inquiry, review
or proceeding (collectively, "Claims") pending against, or, to the knowledge
of the Company or the Stockholder, threatened against or affecting, the
Company, any ERISA Plan (as defined in SECTION 2.18(a) hereof) or any of
their respective assets, properties or rights before or by any court,
arbitrator, panel, agency or other governmental, administrative or judicial
entity, domestic or foreign, nor is any basis known to the Stockholder or the
Company for any such Claims, and (ii) the Company is not subject to any
judgment, decree, writ, injunction, ruling or order (collectively,
"Judgments") of any governmental, administrative or judicial authority,
domestic or foreign. SCHEDULE 2.9(a) hereto identifies each Claim and
Judgment disclosed thereon which is fully covered by an insurance policy.
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(b) The businesses of the Company are being conducted in compliance
with all laws, ordinances, codes, rules, regulations, standards, judgments
and other requirements of all governmental, administrative or judicial
entities (collectively, "Legal Requirements") applicable to the Company or
any of its respective businesses or properties. The Company holds, and is in
compliance with, all franchises, licenses, permits, registrations,
certificates, consents, approvals or authorizations (collectively, "Permits")
required by all applicable Legal Requirements. A list of all such permits is
set forth on Schedule 2.9(b) hereof.
(c) The Company owns or holds all Permits material to the conduct of
its business. No event has occurred and is continuing which permits, or
after notice or lapse of time or both would permit, any modification or
termination of any Permit.
2.10 PROPERTY.
(a) The properties and assets owned by or leased to the Company are
adequate for the conduct of the respective businesses of the Company as
presently conducted. Set forth on SCHEDULE 2.10 hereto is a list of all
interests in real property owned by or leased to the Company (including all
real property owned or leased by the Stockholder (directly or indirectly) and
used in the businesses of the Company) and of all options or other contracts
to acquire any such interest (collectively, the "Real Property "). All
improvements to the Real Property ("Improvements") and all machinery,
equipment and other tangible property owned or used by or leased to the
Company are in good operating condition and in good repair and are fit for
the particular purposes for which they are used by the Company, subject only
to ordinary wear and tear. Such tangible properties and all Improvements
owned or leased by the Company conform in all material respects with all
applicable laws, ordinances, rules and regulations and other Legal
Requirements and such Improvements do not encroach in any respect on property
of others. There are no latent defects with respect to the Improvements.
The Real Property is currently zoned to permit the conduct of the respective
businesses of the Company as presently conducted. A Certificate of Occupancy
has been issued with respect to the Improvements without special conditions
or restrictions. All utilities servicing the Real Property and the
Improvements are provided by publicly-dedicated utility lines and are located
within public rights-of-way and do not cross or encumber any private land.
No notice of any pending, threatened or contemplated action by any
governmental authority or agency having the power of eminent domain has been
given to the Company or the Stockholder with respect to the Real Property.
2.11 ENVIRONMENTAL MATTERS.
(a) Except as set forth on SCHEDULE 2.11(a) hereto, (i) the Company,
the Real Property, the Improvements and any property formerly owned, occupied
or leased by the Company are in full compliance with all Environmental Laws
(as defined below), (ii) the Company has obtained all Environmental Permits
(as defined below), (iii) such Environmental Permits are in full force and
effect, and (iv) the Company is in full compliance with all terms and
conditions of such Environmental Permits. As used herein, "Environmental
Laws" shall mean all applicable requirements of environmental, public or
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employee health and safety, public or community right-to-know, ecological or
natural resource laws or regulations or controls, including all applicable
requirements imposed by any law (including without limitation common law),
rule, order, or regulations of any federal, state, or local executive,
legislative, judicial, regulatory, or administrative agency, board, or
authority, or any applicable private agreement (such as covenants, conditions
and restrictions), which relate to, (i) noise, (ii) pollution or protection
of the air, surface water, groundwater, or soil, (iii) solid, gaseous, or
liquid waste generation, treatment, storage, disposal or transportation, (iv)
exposure to Hazardous Materials (as defined below), or (v) regulation of the
manufacture, processing, distribution and commerce, use, or storage of
Hazardous Materials. As used herein, "Environmental Permits" shall mean all
permits, licenses, approvals, authorizations, consents or registrations
required under applicable Environmental Law in connection with the ownership,
use and/or operation of the Company's business or the Real Property or
Improvements.
As used in this SECTION 2.11, "Hazardous Materials" shall mean,
collectively, (i) those substances included within the definitions of or
identified as "hazardous chemicals," "hazardous waste," "hazardous
substances," "hazardous materials," "toxic substances" or similar terms in or
pursuant to, without limitation, the Comprehensive Environmental Response
Compensation and Liability Act of 1980 (42 U.S.C. 9601 ET SEQ.) ("CERCLA"),
as amended by Superfund Amendments and Reauthorization Act of 1986 (Pub. L.
99-499, 100 State, 1613), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. 6901 ET SEQ.) ("RCRA"), the Occupational Safety and Health Act
of 1970 (29 U.S.C. SECTION 651 ET SEQ.) ("OSHA"), and the Hazardous Materials
Transportation Act, 49 U.S.C. SECTION 1801 ET SEQ. ("HMTA"), and in the
regulations promulgated pursuant to such laws, all as amended, (ii) those
substances listed in the United States Department of Transportation Table (49
CFR 172.101 and amendments thereto) or by the Environmental Protection Agency
(or any successor agency) as hazardous substances (40 CFR part 302 and
amendments thereto), (iii) any material, waste or substance which is or
contains (A) petroleum, including crude oil or any fraction thereof, natural
gas, or synthetic gas usable for fuel or any mixture thereof, (B) asbestos,
(C) polychlorinated biphenyls, (D) designated as a "hazardous substance"
pursuant to SECTION 311 of the Clean Water Act, 33 U.S.C. SECTION 1251 ET
SEQ. (33 U.S.C. SECTION 1321) or listed pursuant to SECTION 307 of the
Clean Water Act (33 U.S.C. SECTION 1317), (E) flammable explosives, (F)
radioactive materials, and (iv) such other substances, materials and wastes
which are or become regulated or classified as hazardous, toxic or as
"special wastes" under any Environmental Laws.
(b) The Company and the Stockholder have not violated, done or suffered
any act which could give rise to liability under, and are not otherwise
exposed to liability under, any Environmental Law. No event has occurred
with respect to the Real Property, the Improvements or any property formerly
owned, occupied or leased by the Company, which, with the passage of time or
the giving of notice, or both, would constitute a violation of or
non-compliance with any applicable Environmental Law. The Company has no
contingent liability under any Environmental Law. There are no liens under
any Environmental Law on the Real Property.
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(c) Except as set forth on SCHEDULE 2.11(c) hereto, (i) neither the
Company, the Real Property or any portion thereof, the Improvements or any
property formerly owned, occupied or leased by the Company, nor, to the
knowledge of the Company or the Stockholder, any property adjacent to the
Real Property is being used or has been used for the treatment, generation,
transportation, processing, handling, production or disposal of any Hazardous
Materials or as a landfill or other waste disposal site and there has been no
spill, release or migration of any Hazardous Materials on or under the Real
Property and no Hazardous Material is present on or under the Real Property
(provided, however, that certain petroleum products are stored and handled on
the Real Property in the ordinary course of the Company's business in full
compliance with all Environmental Laws including the existing regulations of
the United States Environmental Protection Agency and the State of Georgia
requiring spill protection, overfill protection and corrosion protection by
December 22, 1998), (ii) none of the Real Property or portion thereof, the
Improvements or any property formerly owned, occupied or leased by the
Company has been subject to investigation by any governmental authority
evaluating the need to investigate or undertake Remedial Action (as defined
below) at such property, and (iii) none of the Real Property, the
Improvements or any property formerly owned, occupied or leased by the
Company, or, to the knowledge of the Company or the Stockholder, any site or
location where the Company sent waste of any kind, is identified on the
current or proposed (A) National Priorities List under 00 X.X.X. 000 Xxxxxxxx
X, (X) Comprehensive Environmental Response Compensation and Liability
Inventory System list, or (C) any list arising from any statute analogous to
CERCLA. As used herein, "Remedial Action" shall mean any action required to
(i) clean up, remove or treat Hazardous Materials, (ii) prevent a release or
threat of release of any Hazardous Material, (iii) perform pre-remedial
studies, investigations or post-remedial monitoring and care, (iv) cure a
violation of Environmental Law or (v) take corrective action under sections
3004(u), 3004(v) or 3008(h) of RCRA or analogous state law.
(d) Except as set forth on SCHEDULE 2.11(d) hereto, there have been and
are no (i) aboveground or underground storage tanks, subsurface disposal
systems, or wastes, drums or containers disposed of or buried on, in or under
the ground or any surface waters, (ii) asbestos or asbestos containing
materials or radon gas, (iii) polychlorinated biphenyls ("PCB") or
PCB-containing equipment, including transformers, or (iv) wetlands (as
defined under any Environmental Law) located within any portion of the Real
Property, nor have any liens been placed upon any portion of the Real
Property, the Improvements or any property formerly owned, occupied or leased
by the Company in connection with any actual or alleged liability under any
Environmental Law.
(e) Except as set forth on SCHEDULE 2.11(e) hereto, (i) there is no
pending or threatened claim, litigation, or administrative proceeding, or
known prior claim, litigation or administrative proceeding, arising under any
Environmental Law involving any of the Company, the Real Property, the
Improvements, any property formerly owned, leased or occupied by the Company,
any offsite contamination affecting the business of the Company or any
operations conducted at the Real Property, (ii) there are no ongoing
negotiations with or agreements with any governmental authority relating to
any Remedial Action or other environmentally related claim, (iii) the Company
has not submitted notice pursuant to SECTION
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103 of CERCLA or analogous statute or notice under any other applicable
Environmental Law reporting a release of a Hazardous Material into the
environment, and (iv) the Company has not received any notice, claim, demand,
suit or request for information from any governmental or private entity with
respect to any liability or alleged liability under any Environmental Law,
nor to knowledge of the Stockholder and the Company, has any other entity
whose liability therefor, in whole or in part, may be attributed to the
Company, received such notice, claim, demand, suit or request for information.
(f) The Stockholder and the Company have provided to UAG all
environmental studies and reports obtained by them or known to them
pertaining to the Real Property, the Improvements, the Company and any
property formerly owned, occupied or leased by the Company, and have
permitted (or will have permitted as of the Closing Date), the testing of the
soil, groundwater, building components, tanks, containers and equipment on
the Real Property, the Improvements, and any property formerly owned,
occupied or leased by the Company, by UAG or UAG's agents or experts as they
have or shall have deemed necessary or appropriate to confirm the condition
of such properties.
2.12 INVENTORIES.
The values at which inventories are carried on the Company Balance Sheet
reflect the normal inventory valuation policies of the Company, and such
values are in conformity with GAAP consistently applied. All inventories
reflected on the Company Balance Sheet and Company Factory Statement or
arising since the date thereof are currently marketable and can reasonably be
anticipated to be sold at normal xxxx-ups within 120 days after the date
hereof in the ordinary course of business (subject to the reserve for
obsolete, off-grade or slow-moving items that is reflected in the Company
Balance Sheet or will be reflected in the Closing Date Balance Sheet), except
for spare parts inventory which inventory is good and usable.
2.13 ACCOUNTS RECEIVABLE.
All accounts receivable reflected on the Company Balance Sheet are, and
all accounts receivable that will be or will have been reflected on the
Closing Date Balance Sheet will be, good and have been or will have been
collected or are collectible, without resort to litigation, within 90 days of
the Closing Date, and are subject to no defenses, setoffs or counterclaims
other than normal cash discounts accrued in the ordinary course of business.
2.14 INSURANCE.
All material properties and assets of the Company which are of an
insurable character are insured against loss or damage by fire and other
risks to the extent and in the manner reasonable in light of the risks
attendant to the businesses and activities in which the Company is engaged
and customary for companies engaged in similar businesses or owning similar
assets. Set forth on SCHEDULE 2.14 hereto is a list and brief description
(including the
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name of the insurer, the type of coverage provided, the amount of the annual
premium for the current policy period, the amount of remaining coverage and
deductibles and the coverage period) of all policies for such insurance and
the Company has made or will make available to UAG true and complete copies
of all such policies. All such policies are in full force and effect
sufficient for all applicable requirements of law and will not in any way be
effected by or terminated or lapsed by reason of the consummation of the
transactions contemplated by this Agreement and the Lease. No notice of
cancellation or non-renewal with respect to, or disallowance of any claim
under, any such policy has been received by the Company.
2.15 CONTRACTS; ETC.
As used in this Agreement, the term "Company Agreements" shall mean all
mortgages, indenture notes, agreements, contracts, leases, licenses,
franchises, obligations, instruments or other commitments, arrangements or
understandings of any kind, whether written or oral, binding or non-binding,
(including all leases and other agreements referred to on SCHEDULE 2.10
hereto) to which the Company is a party or by which the Company or any of its
assets or properties (including the Real Property and the Improvements) may
be bound or affected, including all amendments, modifications, extensions or
renewals of any of the foregoing. Set forth on SCHEDULE 2.15 hereto is a
complete and accurate list of each Company Agreement which is material to the
businesses, operations, assets, condition (financial or otherwise) or
prospects of the Company. True and complete copies of all written Company
Agreements referred to on SCHEDULE 2.15 and SCHEDULE 2.10 hereto have been
delivered or made available to UAG, and the Company has provided UAG with
accurate and complete written summaries of all such Company Agreements which
are unwritten. Except as set forth on SCHEDULE 2.15, the Company is not,
nor, to the knowledge of the Company and the Stockholder is, any other party
thereto, in breach of or default under any Company Agreement, and no event
has occurred which (after notice or lapse of time or both) would become a
breach or default under, or would permit modification, cancellation,
acceleration or termination of, any Company Agreement or result in the
creation of any Lien upon, or any Person obtaining any right to acquire, any
properties, assets or rights of the Company. There are no material
unresolved disputes involving the Company under any Company Agreement.
2.16 LABOR RELATIONS.
(a) The Company has paid or made provision for the payment of all
salaries and accrued wages and has complied in all material respects with all
applicable laws, rules and regulations relating to the employment of labor,
including those relating to wages, hours, collective bargaining and the
payment and withholding of taxes, and has withheld and paid to the
appropriate govern-mental authority, or is holding for payment not yet due to
such authority, all amounts required by law or agreement to be withheld from
the wages or salaries of its employees.
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(b) Except as set forth on SCHEDULE 2.16(b) hereto, the Company is not
a party to any (i) outstanding employment agreements or contracts with
officers or employees that are not terminable at will, or that provide for
payment of any bonus or commission, (ii) agreement, policy or practice that
requires it to pay termination or severance pay to salaried, non-exempt or
hourly employees (other than as required by law), (iii) collective bargaining
agreement or other labor union contract applicable to persons employed by the
Company, nor do the Stockholder or the Company know of any activities or
proceedings of any labor union to organize any such employees. The Company
has furnished to UAG complete and correct copies of all such agreements
("Employment and Labor Agreements"). The Company has not breached or
otherwise failed to comply with any provisions of any Employment or Labor
Agreement.
(c) Except as set forth in SCHEDULE 2.16(c) hereto, (i) there is no
unfair labor practice charge or complaint pending before the National Labor
Relations Board ("NLRB"), (ii) there is no labor strike, material slowdown or
material work stoppage or lockout actually pending or, to the Stockholder's
or the Company's knowledge, threatened, against or affecting the Company, and
the Company has not experienced any strike, material slow down or material
work stoppage, lockout or other collective labor action by or with respect to
employees of the Company, (iii) there is no representation claim or petition
pending before the NLRB or any similar foreign agency and no question
concerning representation exists relating to the employees of the Company,
(iv) there are no charges with respect to or relating to the Company pending
before the Equal Employment Opportunity Commission or any state, local or
foreign agency responsible for the prevention of unlawful
employment-practices and (v) the Company has not received formal notice from
any federal, state, local or foreign agency responsible for the enforcement
of labor or employment laws of an intention to conduct an investigation of
the Company and, to the knowledge of the Company, no such investigation is in
progress.
(d) The Company has never caused any "plant closing" or "mass layoff"
as such actions are defined in the Worker Adjustment and Retraining
Notification Act, as codified at 29 U.S.C. SECTIONS 2101-2109, and the
regulations promulgated therein.
2.17 EMPLOYEE BENEFIT PLANS.
(a) Set forth on SCHEDULE 2.17(a) hereto is a true and complete list of:
(i) each employee pension benefit plan, as defined in SECTION
3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA"),
maintained by the Company or to which the Company is required to make
contributions ("Pension Benefit Plan"); and
(ii) each employee welfare benefit plan, as defined in SECTION
3(i) of ERISA, maintained by the Company or to which the Company is
required to make contributions ("Welfare Benefit Plan").
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True and complete copies of all Pension Benefit Plans and Welfare
Benefit Plans (collectively, "ERISA Plans") have been delivered to or made
available to UAG together with, as applicable with respect to each such ERISA
Plan, trust agreements, summary plan descriptions, all IRS determination
letters or applications therefor with respect to any Pension Benefit Plan
intended to be qualified pursuant to SECTION 401 (a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and valuation or actuarial reports,
accountant's opinions, financial statements, IRS Form 5500s (or 5500-C or
5500-R) and summary annual reports for the last three years.
(b) With respect to the ERISA Plans:
(i) no event has occurred or (to the knowledge of the Company
or the Stockholder) is threatened or about to occur which would
constitute a prohibited transaction under SECTION 406 of ERISA or under
SECTION 4975 of the Code;
(ii) each ERISA Plan has operated since its inception in
accordance with the reporting and disclosure requirements imposed under
ERISA and the Code and has timely filed Form 5500e (or 5500-C or 5500-R)
and predecessors thereof; and
(iii) no ERISA Plan is liable for any federal, state, local or
foreign Taxes.
(c) Each Pension Benefit Plan intended to be qualified under SECTION
401(a) of the Code:
(i) has been qualified, from its inception, under SECTION
401(a) of the Code, and the trust established thereunder has been exempt
from taxation under SECTION 501(a) of the Code and is currently in
compliance with applicable federal laws;
(ii) has been operated, since its inception, in accordance with
its terms and there exists no fact which would adversely affect its
qualified status; and
(iii) is not currently under investigation, audit or review by
the IRS or (to the knowledge of the Company or the Stockholder) no such
action is contemplated or under consideration and the IRS has not
asserted that any Pension Benefit Plan is not qualified under SECTION
401(a) of the Code or that any trust established under a Pension Benefit
Plan is not exempt under SECTION 501(a) of the Code.
(d) With respect to each Pension Benefit Plan which is a defined
benefit plan under SECTION 414(j) and, for the purpose solely of SECTION
2.17(d)(iv) hereof, each defined contribution plan under SECTION 414(i) of
the Code:
(i) no liability to the Pension Benefit Guaranty Corporation
("PBGC") under SECTIONs 4062-4064 of ERISA has been incurred by the
Company since the effective date of ERISA and all premiums due and owing
to the PBGC have been timely paid;
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(ii) the PBGC has not notified the Company or any Pension
Benefit Plan of the commencement of proceedings under SECTION 4042 of
ERISA to terminate any such plan;
(iii) no event has occurred since the inception of any Pension
Benefit Plan or (to the knowledge of the Company or the Stockholder) is
threatened or about to occur which would constitute a reportable event
within the meaning of SECTION 4043(b) of ERISA;
(iv) no Pension Benefit Plan ever has incurred any "accumulated
funding deficiency" (as defined in SECTION 302 of ERISA and SECTION 412
of the Code); and
(v) if any of such Pension Benefit Plans were to be terminated
on the Closing Date (A) no liability under Title IV of ERISA would be
incurred by the Company and (B) all benefits accrued to the day prior to
the Closing Date (whether or not vested) would be fully funded in
accordance with the actuarial assumptions and method utilized by such
plan for valuation purposes.
(e) With respect to each Pension Benefit Plan, SCHEDULE 2.17(e)
contains a list of all Pension Benefit Plans to which ERISA has applied which
have been or are being terminated, or for which a termination is
contemplated, and a description of the actions taken by the PBGC and the IRS
with respect thereto.
(f) The estimated aggregate amounts of contributions to be paid or
accrued by the Company under ERISA Plans for the current fiscal year is set
forth on SCHEDULE 2.17(f). To the extent required in accordance with GAAP,
the Company Balance Sheet reflects in the aggregate an accrual of all amounts
of employer contributions accrued but unpaid by the Company under the ERISA
Plans as of the date of the Company Balance Sheet.
(g) With respect to any Multiemployer Plan (1) the Company has not,
since its formation, made or suffered a "complete withdrawal" or "partial
withdrawal" as such terms are respectively defined in SECTIONs 4203 and 4205
of ERISA; (2) there is no withdrawal liability of the Company under any
Multiemployer Plan, computed as if a "complete withdrawal" by the Company had
occurred under each such Plan as of December 31, 1995; and (3) the Company
has not received notice to the effect that any Multiemployer Plan is either
in reorganization (as defined in SECTION 4241 of ERISA) or insolvent (as
defined in SECTION 4245 of ERISA).
(h) With respect to the Welfare Benefit Plans:
(i) There are no liabilities of the Company under Welfare
Benefit Plans with respect to any condition which relates to a claim
filed on or before the Closing Date.
(ii) No claims for benefits are in dispute or litigation.
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2.18 OTHER BENEFIT AND COMPENSATION PLANS OR ARRANGEMENTS.
(a) Set forth on SCHEDULE 2.18(a) hereto is a true and complete list
of:
(i) each employee stock purchase, employee stock option,
employee stock ownership, deferred compensation, performance, bonus,
incentive, vacation pay, holiday pay, insurance, severance, retirement,
excess benefit or other plan, trust or arrangement which is not an ERISA
Plan whether written or oral, which the Company maintains or is required
to make contributions to;
(ii) each other agreement, arrangement, commitment and
understanding of any kind, whether written or oral, with any current or
former officer, director or consultant of the Company pursuant to which
payments may be required to be made at any time following the date
hereof (including, without limitation, any employment, deferred
compensation, severance, supplemental pension, termination or consulting
agreement or arrangement); and
(iii) each employee of the Company whose aggregate compensation
for the fiscal year ended December 31, 1995 exceeded, and whose
aggregate compensation for the fiscal year ended December 31, 1996 is
likely to exceed, $50,000. True and complete copies of all of the
written plans, arrangements and agreements referred to on SCHEDULE
2.18(a) ("Compensation Commitments") have been provided to UAG together
with, where prepared by or for the Company, any valuation, actuarial or
accountant's opinion or other financial reports with respect to each
Compensation Commitment for the last three years. An accurate and
complete written summary has been provided to UAG with respect to any
Compensation Commitment which is unwritten.
(b) Each Compensation Commitment:
(i) since its inception, has been operated in all material
respects in accordance with its terms;
(ii) is not currently under investigation, audit or review by
the IRS or any other federal or state agency and (to the knowledge of
the Company or the Stockholder) no such action is contemplated or under
consideration;
(iii) has no liability for any federal, state, local or foreign Taxes;
(iv) has no claims subject to dispute or litigation;
(v) has met all applicable requirements, if any, of the Code; and
(vi) has operated since its inception in material compliance
with the reporting and disclosure requirements imposed under ERISA and
the Code.
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2.19 TRANSACTIONS WITH INSIDERS.
Set forth on SCHEDULE 2.19 hereto is a complete and accurate description
of all material transactions between the Company or any ERISA Plan, on the
one hand, and any Insider, on the other hand, that have occurred since
January 1, 1995. For purposes of this Agreement:
(i) the term "Insider" shall mean the Stockholder, any director
or officer of the Company, and any Affiliate, Associate or Relative of
any of the foregoing persons;
(ii) the term "Associate" used to indicate a relationship with
any person means (A) any corporation, partnership, joint venture or
other entity of which such person is an officer or partner or is,
directly or indirectly, through one or more intermediaries, the
beneficial owner of 30% or more of (1) any class or type of equity
securities or other profits interest or (2) the combined voting power of
interests ordinarily entitled to vote for management or otherwise, and
(B) any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a
similar fiduciary capacity; and
(iii) a "Relative" of a person shall mean such person's spouse,
such person's parents, sisters, brothers, children and the spouses of
the foregoing, and any member of the immediate household of such person.
2.20 PROPRIETY OF PAST PAYMENTS.
No funds or assets of the Company have been used for illegal purposes;
no unrecorded funds or assets of the Company have been established for any
purpose; no accumulation or use of the Company's corporate funds or assets
has been made without being properly accounted for in the respective books
and records of the Company; all payments by or on behalf of the Company have
been duly and properly recorded and accounted for in their respective books
and records; no false or artificial entry has been made in the books and
records of the Company for any reason; no payment has been made by or on
behalf of the Company with the understanding that any part of such payment is
to be used for any purpose other than that described in the documents
supporting such payment; and the Company has not made, directly or
indirectly, any illegal contributions to any political party or candidate,
either domestic or foreign. Neither the IRS nor any other federal, state,
local or foreign government agency or entity has initiated or threatened any
investigation of any payment made by the Company of, or alleged to be of, the
type described in this SECTION 2.20.
2.21 INTEREST IN COMPETITORS.
Except as set forth on SCHEDULE 2.21, neither the Company nor the
Stockholder, nor any of their Affiliates, have any interest, either by way of
contract or by way of investment (other than as holder of not more than 2% of
the outstanding capital stock of a
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publicly traded Person, so long as such holder has no other connection or
relationship with such Person) or otherwise, directly or indirectly, in any
Person other than the Company that is engaged in the retail sale of light
duty trucks or automobiles in Georgia.
2.22 BROKERS.
Neither the Company, nor any director, officer or employee thereof, nor
the Stockholder or any representative of the Stockholder, has employed any
broker or finder or has incurred or will incur any broker's, finder's or
similar fees, commissions or expenses, in each case in connection with the
transactions contemplated by this Agreement or the Real Estate Purchase
Agreement, except that the Stockholder has employed Xxxxxxx XxXxxxx as a
broker (the "Broker") in connection with this transaction. The Stockholder
will satisfy any obligations of UAG, Sub, the Stockholder or the Company
relating to the employment of the Broker, and will hold UAG, Sub and the
Company harmless therefrom.
2.23 ACCOUNTS.
SCHEDULE 2.23 hereof correctly identifies each bank account maintained
by or on behalf or for the benefit of the Company and the name of each person
with any power or authority to act with respect thereto.
2.24 DISCLOSURE.
Neither the Company nor the Stockholder has made any material
misrepresentation to UAG relating to the Company or the Shares and neither
the Company nor the Stockholder has omitted to state to UAG any material fact
relating to the Company or the Shares which is necessary in order to make the
information given by or on behalf of the Company or the Stockholder to UAG
not misleading or which if disclosed would reasonably affect the decision of
a person considering an acquisition of the Shares. No fact, event, condition
or contingency exists or has occurred which has, or in the future can
reasonably be expected to have, a Material Adverse Effect, which has not been
disclosed in the Company's Financial Statements or the schedules to this
Agreement.
2.25 NET WORTH AND WORKING CAPITAL.
On the Closing Date, the Net Worth of the Company, as determined in
accordance with the Accounting Principles, will be equal to or greater than
the December 31 Net Worth. On the Closing Date, the net working capital of
the Company, as reflected on the Estimated Closing Date Balance Sheet (as
defined in SECTION 6.6 hereof) will be equal to or greater than the net
working capital of the Company as of December 31, 1995 as reflected on the
Company Balance Sheet and such net working capital will be sufficient to
operate the businesses of the Company consistent with past practice.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
Subject to the parties' agreement and acknowledgment that the SCHEDULEs
referred to in this ARTICLE 3 are to be delivered by the Stockholder to UAG
and Sub not later than August 15, 1996, the Stockholder hereby represents and
warrants to UAG and Sub as follows:
3.1 OWNERSHIP OF SHARES; TITLE.
The Stockholder is the owner of record and beneficially of the Shares
set forth on SCHEDULE 3.1 hereof and has, and shall transfer to Sub at the
Closing, good and marketable title to the Shares owned by him, free and clear
of any and all Liens, claims and encumbrances and free and clear of any
restrictions on transfer (other than restrictions on transfer imposed by
applicable federal and state securities laws), proxies and voting or other
agreements.
3.2 AUTHORITY.
The Stockholder has all requisite power and authority and has full legal
capacity and is competent to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby (including the disposition
of the Shares to Sub as contemplated by this Agreement). This Agreement has
been duly executed and delivered by the Stockholder and constitutes a valid
and binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms. Except as set forth on SCHEDULE
3.2, the execution, delivery and performance of this Agreement by the
Stockholder and the consummation of the transactions contemplated hereby do
not and will not:
(i) (after notice or lapse of time or both) conflict with,
result in a breach of any provision of, constitute a default under,
result in the modification or cancellation of, or give rise to any right
of termination or acceleration in respect of, any material contract,
agreement, commitment, understanding, arrangement or restriction to
which the Stockholder is a party or to which the Stockholder or the
Stockholder's property is subject;
(ii) violate or conflict with any Legal Requirements applicable
to the Stockholder or the Stockholder's businesses or properties; or
(iii) require any authorization, consent, order, permit or
approval of, or notice to, or filing, registration or qualification
with, any governmental, administrative or judicial authority, except in
connection with or in compliance with the provisions of the H-S-R Act.
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3.3 REAL PROPERTY AND IMPROVEMENTS.
The Stockholder owns the Real Property and Improvements in fee simple,
free and clear of all Liens, claims and encumbrances, except those disclosed
in SCHEDULE 3.3(a), none of which currently or, to the Stockholder's
knowledge, in the future will affect the use of the Real Property or the
Improvements for the conduct of the respective businesses of the Company as
presently conducted. No assessments have been made against any portion of
the Real Property which are unpaid (except ad valorem taxes for the current
year that are not yet due and payable), whether or not they have become
Liens. There are no disputes concerning the location of the lines and
corners of the Real Property. Except as set forth in ARTICLE 1 hereof, no
one has been granted any right to purchase or lease the Real Property or
Improvements other than the existing lease in favor of the Company, which is
to be terminated at Closing. Attached as SCHEDULE 3.3 are all surveys, title
binders, title policies and copies of any exceptions to title.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UAG AND SUB
Subject to the parties' agreement and acknowledgment that the Schedules
referred to in this ARTICLE 4 are to delivered by UAG and Sub no later than
August 15, 1996, UAG and Sub hereby represent and warrant to the Company and
the Stockholder as follows:
4.1 ORGANIZATION AND GOOD STANDING.
Each of UAG and Sub is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation and has
the corporate power and authority to own, lease and operate the properties
used in its business and to carry on its business as now being conducted.
Each of UAG and Sub is duly qualified to do business and is in good standing
as a foreign corporation in each state and jurisdiction where qualification
as a foreign corporation is required, except for such failures to be
qualified and in good standing, if any, which when taken together with all
other such failures of UAG and its subsidiaries would not, or could not
reasonably be expected to, in the aggregate have a material adverse effect on
UAG and its subsidiaries, taken as a whole.
4.2 AUTHORITY; APPROVALS AND CONSENTS.
UAG and Sub have the corporate power and authority to enter into this
Agreement and to perform their respective obligations hereunder. This
Agreement has been duly executed and delivered by, and constitutes valid and
binding obligation of, UAG and Sub, enforceable against UAG and Sub in
accordance with its terms. Except as set forth on SCHEDULE 4.3 hereto, the
execution, delivery and performance by UAG and Sub of this Agreement and the
consummation of the transactions contemplated hereby do not and will not:
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(i) contravene any provisions of the certificate of
incorporation or bylaws of UAG or Sub;
(ii) (after notice or lapse of time or both) conflict with,
result in a breach of any provision of, constitute a default under,
result in the modification or cancellation of, or give rise to any right
of termination or acceleration in respect of, any UAG Agreement (as
defined below) or, require any consent or waiver of any party to any UAG
Agreement other than agreements the breach or violation of which could
not reasonably be expected to have a material adverse effect on UAG and
its subsidiaries, taken as a whole;
(iii) violate or conflict with any Legal Requirements applicable
to UAG or any of its subsidiaries or any of their respective businesses
or properties; or
(iv) require any authorization, consent, order, permit or
approval of, or notice to, or filing, registration or qualification
with, any governmental, administrative or judicial authority, except in
connection with or in compliance with the provisions of the H-S-R Act.
4.3 BROKERS.
Neither UAG, Sub nor any of their directors, officers or employees has
employed any broker or finder or has incurred or will incur any broker's,
finder's or similar fees, commissions or expenses, in each case in connection
with the transactions contemplated by this Agreement or the Real Estate
Purchase Agreement.
4.4 DISCLOSURE.
Neither UAG nor Sub has made any material misrepresentation to the
Stockholder and neither UAG nor Sub has omitted to state to the Stockholder
any material fact relating to UAG or Sub which is necessary in order to make
the information given by UAG or Sub not misleading or which if disclosed
would reasonably affect the decision of a person considering the sale of the
Shares.
ARTICLE 5
COVENANTS AND ADDITIONAL AGREEMENTS
5.1 ACCESS; CONFIDENTIALITY.
Between the date hereof and the Closing Date, the Stockholder and the
Company will (i) provide to the officers and other authorized representatives
of UAG and Sub full access, during normal business hours, to any and all
files, books, records, documents, and other information of the Company and
will cause the Company's officers to furnish to UAG and its authorized
representatives any and all financial, technical and operating data and other
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information pertaining to the businesses and properties of the Company
(including the Real Property and the Improvements), (ii) provide to the
officers and other authorized representatives of UAG and Sub reasonable
access to any and all premises and properties of the Company (including the
Real Property and Improvements) provided that such access shall not
unreasonably disrupt the normal business of the Company; and (iii) make
available for inspection and copying by UAG and Sub true and complete copies
of any documents relating to the foregoing. UAG and Sub will hold, and will
cause their representatives to hold, in confidence (unless and to the extent
compelled to disclose by judicial or administrative process or, in the
opinion of its counsel, by other requirements of law) all Confidential
Information (as defined below) and will not disclose the same to any third
party except in connection with obtaining financing and otherwise as may
reasonably be necessary to carry out this Agreement and the transactions
contemplated hereby, including any due diligence review by or on behalf of
UAG and Sub. If this Agreement is terminated, UAG and Sub will, and will
cause their representatives to, promptly return to the Company, upon the
reasonable request of the Company, all Confidential Information furnished by
the Company, including all copies and summaries thereof. As used herein,
"Confidential Information" shall mean all information concerning the Company
obtained by UAG, Sub and their representatives from the Company in connection
with the transactions contemplated by this Agreement, except information (x)
ascertainable or obtained from public information, (y) received from a third
party not employed by or otherwise affiliated with the Company or (z) which
is or becomes known to the public, other than through a breach by UAG or Sub
or any of their representatives of this Agreement.
5.2 FURNISHING INFORMATION; ANNOUNCEMENTS.
The Stockholder and the Company, on the one hand, and UAG and Sub, on
the other hand, will, as soon as practicable after reasonable request
therefor, furnish to the other all the information concerning the Stockholder
and the Company or UAG and Sub, respectively, required for inclusion in any
statement or application made by UAG or Sub or the Company or the Stockholder
to any governmental or regulatory body or to any manufacturer or distributor
or in connection with obtaining any third party consent in connection with
the transactions contemplated by this Agreement. Neither the Stockholder or
the Company, on the one hand, nor UAG or Sub, on the other hand, nor any
representative thereof, shall issue any press releases or otherwise make any
public statement with respect to the transactions contemplated hereby without
the prior consent of the other, except as may be required by law.
5.3 CERTAIN CHANGES AND CONDUCT OF BUSINESS.
(a) From and after the date of this Agreement and until the Closing
Date, the Company shall, and the Stockholder shall cause the Company to,
conduct its businesses solely in the ordinary course consistent with past
practices and, without the prior written consent of UAG, neither the
Stockholder nor the Company will, except as required or permitted pursuant to
the terms hereof, permit the Company to:
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(i) make any material change in the conduct of its businesses
and operations or enter into any transaction other than in the ordinary
course of business consistent with past practices;
(ii) make any change in its ARTICLEs of Incorporation or Bylaws,
issue any additional shares of capital stock or equity securities or
grant any option, warrant or right to acquire any capital stock or
equity securities or issue any security convertible into or exchangeable
for its capital stock or alter any material term of any of its
outstanding securities or make any change in its outstanding shares of
capital stock or other ownership interests or its capitalization,
whether by reason of a reclassification, recapitalization, stock split
or combination, exchange or readjustment of shares, stock dividend or
otherwise;
(iii) (A) incur, assume or guarantee any indebtedness for
borrowed money, issue any notes, bonds, debentures or other corporate
securities or grant any option, warrant or right to purchase any
thereof, except pursuant to transactions in the ordinary course of
business consistent with past practices, (B) issue any securities
convertible or exchangeable for debt securities of the Company, or (C)
issue any options or other rights to acquire from the Company, directly
or indirectly, debt securities of the Company or any security
convertible into or exchangeable for such debt securities;
(iv) make any sale, assignment, transfer, abandonment or other
conveyance of any of its assets or any part thereof, except transactions
pursuant to existing contracts (which will be set forth in SCHEDULE 2.15
hereto) and dispositions in the ordinary course of business consistent
with past practices;
(v) subject any of its assets, or any part thereof, to any lien
or suffer such to be imposed other than such liens as may arise in the
ordinary course of business consistent with past practices;
(vi) declare, set aside or pay any dividends or other
distribution (whether in cash, stock, property or any combination
thereof) in respect of any shares of its capital stock which would
decrease the Net Worth of the Company below the December 31, 1995 Net
Worth or redeem, retire, purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock;
(vii) acquire any assets, raw materials or properties, or enter
into any other transaction, other than in the ordinary course of
business consistent with past practices;
(viii) enter into any new (or amend any existing) employee benefit
plan, program or arrangement or any new (or amend any existing)
employment, severance or consulting agreement (other than agreements in
the ordinary course of business consistent with past practices that will
be reflected on the Company's financial statement prior to the Closing
Date and that will not bind the Company after the Closing Date), grant
any general increase in the compensation of officers or employees
(including any
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such increase pursuant to any bonus, pension, profit-sharing or other
plan or commitment) or grant any increase in the compensation payable or
to become payable to any employee, except in accordance with
pre-existing contractual provisions or consistent with past practices;
(ix) make or commit to make any individual material capital
expenditure in excess of $50,000, or aggregate capital expenditures in
excess of $150,000, except in the ordinary course of business;
(x) pay, loan or advance any amount to, or sell, transfer or
lease any properties or assets to, or enter into any agreement or
arrangement with, any of its Affiliates, except in the ordinary course
of business;
(xi) guarantee any indebtedness for borrowed money or any other
obligation of any other Person, other than in the ordinary course of
business consistent with past practice;
(xii) fail to keep in full force and effect insurance comparable
in amount and scope to coverage maintained by it (or on behalf of it) on
the date hereof;
(xiii) make any loan, advance or capital contribution to or
investment in any Person, except in the ordinary course of business;
(xiv) make any change in any method of accounting or accounting
principle, method, estimate or practice except for any such change
required by reason of a concurrent change in GAAP or write-down the
value of any inventory or write-off as uncollectible any accounts
receivable except in the ordinary course of business consistent with
past practices;
(xv) settle, release or forgive any material claim or litigation
or waive any material right;
(xvi) make, enter into, modify, amend in any material respect or
terminate any material commitment, bid or expenditure, other than in the
ordinary course of business consistent with past practice; or
(xvii) commit itself to do any of the foregoing.
(b) From and after the date hereof and until the Closing Date, the
Stockholder and the Company will use their reasonable best efforts to cause
the Company to:
(i) continue to maintain, in all material respects, the
Company's properties, the Real Property and the Improvements in
accordance with present practices in a condition suitable for their
current use;
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(ii) comply with all applicable Environmental Laws, and, in the
event it shall receive notice that there exists a violation of any
Environmental Law with respect to its operations, the Improvements or
any Real Property, promptly (and in any event within the time period
permitted by the applicable governmental authority) remove or remedy
such violation in accordance with all applicable Environmental Laws;
(iii) file, when due or required, federal, state, foreign and
other tax returns and other reports required to be filed and pay when
due all taxes, assessments, fees and other charges lawfully levied or
assessed against it unless the validity thereof is contested in good
faith and by appropriate proceedings diligently conducted;
(iv) keep its books of account, records and files in the
ordinary course and in accordance with existing practices;
(v) preserve its business organization intact and continue to
maintain existing business relationships with suppliers, customers and
others with whom business relationships exist other than relationships
that are, at the same time, not economically beneficial to it; and
(vi) continue to conduct its business in the ordinary course
consistent with past practices.
5.4 NO INTERCOMPANY PAYABLES OR RECEIVABLES.
At the Closing there will be no intercompany payables or intercompany
receivables due and/or owing between the Stockholder and any of their
Affiliates, on the one hand, and the Company, on the other hand.
5.5 NEGOTIATIONS.
Until the earlier of 180 days from the date hereof and the
termination of this Agreement pursuant to SECTION 8.1 hereof, neither
the Stockholder nor the Company, nor the Company's officers, directors,
employees, advisors, agents, representatives, Affiliates or anyone
acting on behalf of the Stockholder, the Company or such persons, shall,
directly or indirectly, encourage, solicit, initiate or engage in
discussions or negotiations with, or provide any information to, any
person (other than UAG or its representatives) concerning any merger,
sale of assets (other than in the ordinary course of business), purchase
or sale of shares of capital stock or similar transaction involving the
Company. The Stockholder shall promptly communicate to UAG any
inquiries or communications concerning any such transaction (including
the identity of any person making such inquiry or communication) which
the Stockholder may receive or of which the Stockholder may become aware.
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5.6 CONSENTS; COOPERATION.
Subject to the terms and conditions hereof, the Stockholder and the
Company and UAG and Sub will use their respective best efforts at their own
expense:
(i) to obtain prior to the earlier of the date required (if so
required) or the Closing Date, all waivers, permits, licenses,
approvals, authorizations, qualifications, orders and consents of all
third parties and governmental authorities, and make all filings and
registrations with governmental authorities which are required on their
respective parts for (A) the consummation of the transactions
contemplated by this Agreement, (B) the ownership or leasing and
operating after the Closing by the Company of all its material
properties and (C) the conduct after the Closing by the Company of its
businesses as conducted by it on the date hereof.
(ii) to defend, consistent with applicable principles and
requirements of law, any lawsuit or other legal proceedings, whether
judicial or administrative, whether brought derivatively or on behalf of
third persons (including governmental authorities) challenging this
Agreement or the transactions contemplated hereby; and
(iii) to furnish each other such information and assistance as
may reasonably be requested in connection with the foregoing.
5.7 ADDITIONAL AGREEMENTS.
Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees to use its best efforts at its own expense to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this
Agreement. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers of the Company shall take all such necessary action.
5.8 INTERIM FINANCIAL STATEMENTS.
Within thirty (30) days after the end of each calendar month after May
31, 1996, the Company will deliver to UAG unaudited consolidated balance
sheets of the Company at the end of such calendar month and at the end of the
corresponding calendar month of the preceding fiscal year, together with the
related unaudited consolidated statements of income and cash flow for the
fiscal months then ended. The Company will also deliver to UAG copies of the
Company Factory Statements provided to nissan after the date hereof within
five days of their delivery to Nissan. All such financial statements shall
fairly present the financial position and results of operations of the
Company as of the date or for the periods indicated. All unaudited financial
statements delivered pursuant to this SECTION 5.9 shall be prepared on a
basis consistent with the Company Financial Statements.
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5.9 NOTIFICATION OF CERTAIN MATTERS.
Between the date hereof and the Closing, each party to this Agreement
will give prompt notice in writing to the other party hereto of: (i) any
information that indicates that any representation and warranty of such party
contained herein was not true and correct as of the date made or will not be
true and correct as of the Closing, (ii) the occurrence of any event which
could result in the failure to satisfy a condition specified in ARTICLE 6 or
ARTICLE 7 hereof, as applicable, (iii) any notice or other communication from
any third person alleging that the consent of such third person is or may be
required in connection with the transactions contemplated by this Agreement,
and (iv) in the case of the Stockholder and the Company, any notice of, or
other communication relating to, any default or event which, with notice or
lapse of time or both, would become a default under any Company Agreement set
forth on SCHEDULE 2.15. The Company and the Stockholder will (x) promptly
advise UAG of any event that has, or could reasonably be expected in the
future to have, a Material Adverse Effect on the Company, (y) confer on a
regular and frequent basis with one or more designated representatives of UAG
to report operational matters and to report the general status of ongoing
operations, and (z) notify UAG of any emergency or other change in the normal
course of business or relating to the Real Property or Improvements of the
Company and of any governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated) or adjudicatory
proceedings involving the Company, the Real Property or the Improvements and
will keep UAG fully informed of such events and permit UAG's representatives
access to all materials prepared in connection therewith. The Stockholder
shall give prompt notice to UAG of any notice or other communication from any
third person asserting any right, title or interest in any of the Shares held
by the Stockholder (including, without limitation, any threat to commence, or
notice of the commencement of any action or other proceeding with respect to
the Shares) or the occurrence of any other event of which such Stockholder
has knowledge which could result in any failure to consummate the sale of the
Shares as contemplated hereby.
5.10 ASSURANCE BY THE STOCKHOLDER.
The Stockholder shall use its best efforts to cause the Company to
comply with its respective covenants set forth in this Agreement.
5.11 ANTITRUST IMPROVEMENTS ACT COMPLIANCE.
UAG, the Stockholder and the Company, as applicable, shall each file or
cause to be filed with the Federal Trade Commission and the United States
Department of Justice any notifications required to be filed by the respective
"ultimate parent" entities under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the "H-S-R Act"), and the rules and regulations
promulgated thereunder, with respect to the transactions contemplated herein.
The parties shall use their best efforts to make such filings promptly, to
respond to any requests for additional information made by either of such
agencies, to cause the waiting periods under the H-S-R Act to terminate or
expire at the earliest possible date and to resist vigorously (including,
without limitation, the institution or defense of legal proceedings), any
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assertion that the transactions contemplated herein constitute a violation of
the antitrust laws, all to the end of expediting consummation of the
transactions contemplated herein; PROVIDED, HOWEVER, that if UAG or the
Stockholder shall determine after issuance of any preliminary injunction that
continuing such resistance is not in its or their best interests, UAG or the
Stockholder, as the case may be, may, by written notice to the other party,
terminate this Agreement with the effect set forth in SECTION 8.2 hereof. In
the event that the Stockholder incurs any expense in connection with any
assertion that the transactions contemplated herein constitute a violation of
the antitrust laws, UAG shall reimburse the Stockholder for such expense unless
the Stockholder incurred such expense after UAG notified the Stockholder that
UAG intended to terminate the Agreement.
5.12 USE OF XXXXXXX XXXXX NAME.
UAG, Sub and the Company shall have the right to use the name "Xxxxxxx
Xxxxx" in connection with the business of the Company for up to one year after
the Closing Date. After the Closing and until the one year anniversary of the
Closing Date, Xxxxx shall not use the name "Xxxxxxx Xxxxx" or "Xxxxx" in
connection with the sale of new or used automobiles or light duty trucks in the
metropolitan Atlanta area.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS
OF UAG AND SUB TO EFFECT THE CLOSING
The obligations of UAG and Sub required to be performed by them at the
Closing shall be subject to the satisfaction, at or prior to the Closing, of
each of the following conditions, each of which may be waived by UAG and Sub as
provided herein except as otherwise required by applicable law:
6.1 REPRESENTATIONS AND WARRANTIES; AGREEMENTS; COVENANTS.
Each of the representations and warranties of the Company and the
Stockholder contained in this Agreement shall be true and correct on the date
made and shall be true and correct in all material respects as of the Closing.
Each of the obligations of the Company and the Stockholder required by this
Agreement to be performed by them at or prior to the Closing shall have been
duly performed and complied with in all material respects as of the Closing. At
the Closing, Sub shall have received a certificate, dated the Closing Date and
duly executed by the Stockholder and the chief financial officer of the Company,
to the effect that the conditions set forth in the two preceding sentences have
been satisfied.
6.2 AUTHORIZATION; CONSENTS.
(a) All corporate action necessary to authorize the execution, delivery
and performance of this Agreement and the Real Estate Purchase Agreement, and
the consummation of the transactions contemplated hereby shall have been duly
and validly taken
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by the Company. All filings required to be made under the H-S-R Act in
connection with the transactions contemplated hereby shall have been made and
all applicable waiting periods with respect to each such filing, including
extensions thereof, shall have expired or been terminated.
(b) All notices to, and declarations, filings and registrations with,
and consents, authorizations, approvals and waivers from, governmental and
regulatory bodies and third persons (including, but not limited to, all
automobile manufacturers with whom the Company has a franchise agreement (or
comparable instrument)) required to consummate the transactions contemplated
hereby and all consents or waivers shall have been made or obtained.
6.3 OPINIONS OF THE COMPANY'S AND THE STOCKHOLDER' COUNSEL.
UAG and Sub shall have been furnished with the opinion of the Company's
and the Stockholder' counsel, dated the Closing Date, in form and substance
satisfactory to UAG and Sub and their counsel, which opinion shall have been
rendered with respect to those matters contained in SECTIONs 2.1, 2.3, 2.4,
2.9, 3.1 AND 3.2 hereof. In rendering the foregoing opinion, such counsel
may rely as to factual matters upon certificates or other documents furnished
by officers and directors of the Company and by government officials and upon
such other documents and data as such counsel deem appropriate as a basis for
their opinions. Such opinions may be limited to Georgia and federal laws.
6.4 ABSENCE OF LITIGATION.
No order, stay, injunction or decree of any court of competent
jurisdiction in the Untied States shall be in effect (i) that prevents or
delays the consummation of any of the transactions contemplated hereby or
(ii) would impose any limitation on the ability of UAG or Sub effectively to
exercise full rights of ownership of the Shares. No action, suit or
proceeding before any court or any governmental or regulatory entity shall be
pending (or threatened by any governmental or regulatory entity), and no
investigation by any governmental or regulatory entity shall have been
commenced (and be pending), seeking to restrain or prohibit (or questioning
the validity or legality of) the consummation of the transactions
contemplated by this Agreement or seeking damages in connection therewith
which UAG or Sub, in good faith and with the advice of counsel, believes
makes it undesirable to proceed with the consummation of the transactions
contemplated hereby.
6.5 NO MATERIAL ADVERSE EFFECT.
During the period from December 31, 1995 to the Closing Date, there
shall not have been any material adverse change in the assets, properties,
business, operations, prospects, net income or financial condition of the
Company.
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6.6 WORKING CAPITAL REQUIREMENTS.
On the Closing Date, the Stockholder shall deliver to Sub a balance
sheet of the Company dated as of the most recent practicable date preceding
the Closing Date, prepared in accordance with the Accounting Principles (the
"Estimated Closing Date Balance Sheet"). The Estimated Closing Date Balance
Sheet shall show as of the date thereof, after taking into account the
payment of any of the fees, costs and expenses by the Company incurred in
connection with this Agreement, consolidated net working capital equal to or
greater than the consolidated net working capital of the Company as set forth
on the Company Balance Sheet.
6.7 COMPLETION OF DUE DILIGENCE.
UAG and Sub shall have completed their due diligence examination of the
Company, the Real Property and the Improvements and the results of such
examination, including any Phase I or Phase II environmental audits of the
Company, shall be satisfactory to UAG and Sub. Sub will pay the costs for a
Phase I environmental audit. If, after obtaining the results of the Phase I
environmental audit, Sub determines that a Phase II environmental audit is
required, the expenses of the Phase II environmental audit shall be paid one-
half by Sub and one-half by the Stockholder.
6.8 LEASE AND REAL ESTATE PURCHASE AGREEMENT.
The Stockholder and the Company shall have agreed up the terms of the
Nissan Lease and the Real Estate Purchase Agreement on or before August 15, 1996
and shall have entered into the Nissan Lease and the Real Estate Purchase
Agreement at the time of the Closing.
6.9 BOARD APPROVAL.
The Board of Directors of UAG and Sub shall have approved the
consummation of all of the transactions contemplated by this Agreement.
6.10 CERTIFICATES.
The Stockholder and the Company shall have furnished UAG and Sub with a
certificate, dated as of the Closing Date, executed by the Stockholder
certifying to the fulfillment of the conditions set forth in SECTIONs 6.5, 6.6
AND 6.13 hereof and shall have furnished UAG and Sub with such any other
certificates of its officers and others as UAG and Sub may reasonably request to
evidence compliance with the conditions set forth in this ARTICLE 6.
6.11 LEGAL MATTERS.
All certificates, instruments, opinions and other documents required to
be executed or delivered by or on behalf of the Stockholder and the Company
under the provisions of this
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Agreement, and all other actions and proceedings required to be taken by or
on behalf of the Stockholder and the Company in furtherance of the
transactions contemplated hereby, shall be reasonably satisfactory in form
and substance to counsel for UAG and Sub.
6.12 APPROVAL OF MANUFACTURER AND DISTRIBUTOR.
The Stockholder and the Company shall have obtained the consent,
authorization and approval of Nissan and [Nissan distributor] on terms no less
favorable to those granted to the Company immediately prior to the execution of
this Agreement.
6.13 ENVIRONMENTAL LAWS.
The Company shall be in compliance with all applicable Environmental
Laws.
6.14 TITLE INSURANCE.
The Company shall have obtained title insurance with respect to the Real
Property in form and substance satisfactory to UAG. UAG shall pay the title
insurance premium.
6.15 LEASE TERMINATION AGREEMENT/MEMORANDUM OF LEASE.
The appropriate parties shall have executed a Lease Termination
Agreement and a Memorandum of Lease in form and substance satisfactory to UAG
and the Company.
6.16 RESIGNATION OF THE COMPANY'S DIRECTORS.
Each of the persons who is a director of the Company on the Closing Date
shall have tendered to Sub in writing his resignation as such in form and
substance satisfactory to UAG.
6.17 SCHEDULEs.
The Company and the Stockholder shall have delivered to UAG and Sub all
Schedules referred to in ARTICLEs 2 and 3 and such Schedules shall be reasonably
acceptable in form and substance to UAG and Sub.
6.18 BMW Purchase.
The transactions contemplated by the BMW Stock Purchase Agreement shall
have been consummated.
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ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF
THE STOCKHOLDER TO EFFECT THE CLOSING
The obligations of the Stockholder and the Company required to be
performed by them at the Closing shall be subject to the satisfaction, at or
prior to the Closing, of each of the following conditions, each of which may be
waived by the Company and the Stockholder as provided herein except as otherwise
required by applicable law:
7.1 REPRESENTATIONS AND WARRANTIES; AGREEMENTS.
Each of the representations and warranties of UAG and Sub contained in
this Agreement shall be true and correct on the date made and shall be true and
correct in all material respects as of the Closing. Each of the obligations of
UAG and Sub required by this Agreement to be performed by them at or prior to
the Closing shall have been duly performed and complied with in all material
respects as of the Closing. At the Closing, the Stockholder shall have received
a certificate, dated the Closing Date and duly executed by the chief financial
officer of UAG and of Sub to the effect that the conditions set forth in the
preceding two sentences have been satisfied.
7.2 AUTHORIZATION OF THE AGREEMENT, CONSENTS.
(a) All corporate action necessary to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby shall have been duly and validly taken by UAG and Sub. All
filings required to be made under the H-S-R Act in connection with the transac-
tions contemplated hereby shall have been made and all applicable waiting
periods with respect to each such filing, including extensions thereof, shall
have expired or been terminated.
(b) All notices to, and declarations, filings and registrations with,
and consents, authorizations, approvals and waivers from, governmental and
regulatory bodies and third persons (including, but not limited to, all
automobile manufacturers with whom the Company has entered into a franchise
agreement (or comparable instrument)) required to consummate the transactions
contemplated hereby and all consents or waivers shall have been made or
obtained.
7.3 OPINIONS OF UAG'S AND SUB'S COUNSEL.
The Stockholder shall have been furnished with the opinion of Xxxxxx &
Xxxxxx, counsel to UAG and Sub, dated the Closing Date, in form and substance
satisfactory to the Stockholder and their counsel, which opinions, when taken
together, shall have been rendered with respect to those matters contained in
SECTIONs 4.1 AND 4.2 hereof. In rendering the foregoing opinions, such counsel
may rely as to factual matters upon certificates or other documents furnished by
officers and directors of UAG and Sub and by government officials, and upon such
other documents and data as such counsel deems appropriate as a basis for its
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opinion. Such opinions may be limited to Georgia and federal laws and the
General Corporation Law of the State of Delaware.
7.4 ABSENCE OF LITIGATION.
No order, stay, judgment or decree shall have been issued by any court
and be in effect restraining or prohibiting the consummation of the transactions
contemplated hereby.
7.5 LEASE AND REAL ESTATE PURCHASE AGREEMENT.
The Company and Sub shall have agreed upon the terms of the Nissan Lease
and Real Estate Purchase Agreement on or before August 15, 1996. The Company
and Sub shall have entered into the Nissan Lease and Sub shall have entered into
the Real Estate Purchase Agreement at the time of the Closing.
7.6 CERTIFICATES.
UAG and Sub shall have furnished the Stockholder with such certificates
of its officers and others to evidence compliance with the conditions set forth
in this ARTICLE 7 as may be reasonably requested by the Stockholder.
7.7 LEGAL MATTERS.
All certificates, instruments, opinions and other documents required to
be executed or delivered by or on behalf of UAG or Sub under the provisions
of this Agreement, and all other actions and proceedings required to be taken
by or on behalf of UAG or Sub in furtherance of the transactions contemplated
hereby, shall be reasonably satisfactory in form and substance to counsel for
the Stockholder.
ARTICLE 8
TERMINATION
8.1 TERMINATION.
This Agreement may be terminated at any time prior to Closing:
(i) by mutual consent of UAG, Sub and the Stockholder;
(ii) by either UAG, Sub, or the Stockholder if the Closing shall not
have taken place on or prior to November 30, 1996, or such later date as
shall have been approved by UAG, Sub and the Stockholder (provided that the
terminating party is not otherwise in material breach of its represen-
tations, warranties, covenants or agreements under this Agreement);
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(iii) by UAG, Sub, or the Stockholder if any court of competent
jurisdiction in the United States or other United States governmental body
shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contem-
plated by this Agreement, and such order, decree, ruling or other action
shall have become final and non-appealable;
(iv) by UAG or Sub if any of the conditions specified in ARTICLE 6
hereof have not been met or waived by UAG and Sub at such time as such
condition is no longer capable of satisfaction (provided that neither UAG
nor Sub is otherwise in material breach of its representations, warranties,
covenants or agreements under this Agreement);
(v) by the Stockholder if any of the conditions specified in ARTICLE 7
hereof have not been met or waived by the Stockholder at such time as such
condition is no longer capable of satisfaction (provided that neither the
Stockholder nor the Company is otherwise in material breach of his or its
representations, warranties covenants or agreements under this Agreement);
or
(vi) by either UAG, Sub or the Stockholder if there has been a material
breach on the part of the other of any representation, warranty, covenant or
agreement set forth in this Agreement, which breach has not been cured
within ten (10) Business Days following receipt by the breaching party of
written notice of such breach.
If UAG, Sub or the Stockholder shall terminate this Agreement pursuant
to the provisions hereof, such termination shall be effected by notice to the
other parties specifying the provision hereof pursuant to which such termination
is made.
8.2 EFFECT OF TERMINATION.
Except (i) for any breach of this Agreement prior to its termination,
and (ii) for the obligations contained in SECTIONS 5.1 AND 10.2 hereof, and
(iii) as set forth in SECTION 9.1 and SECTION 9.2 hereof, upon the termination
of this Agreement pursuant to SECTION 8.1 hereof, this Agreement shall forthwith
become null and void and none of the parties hereto or any of their respective
officers, directors, employees, agents, Affiliates, consultants, stockholders or
principals shall have any liability or obligation hereunder or with respect
hereto.
ARTICLE 9
INDEMNIFICATION
9.1 INDEMNIFICATION BY THE STOCKHOLDER.
Notwithstanding the Closing or the delivery of the Shares, the Stockholder
indemnifies and agrees to fully defend, save and hold harmless on an
after-tax basis UAG,
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Sub, the Company (after the Closing), and any of their respective officers,
directors, employees, stockholders, advisors, representatives, agents and
Affiliates (other than the Stockholder) (each a "UAG Indemnified Party"), if
a UAG Indemnified Party (including the Company after the Closing Date) shall
at any time or from time to time suffer any Costs (as defined in SECTION 9.6
below) arising, directly or indirectly, out of or resulting from, or shall
pay or become obligated to pay any sum on account of, (i) any and all
Stockholder Events of Breach (as defined below) or, (ii) any Claim before or
by any court, arbitrator, panel, agency or other governmental, administrative
or judicial entity, which Claim involves, affects or relates to any assets,
properties or operations of the Company or the conduct of the business of the
Company prior to the Closing Date (a "Stockholder Third Party Claim"). As
used herein, "Stockholder Event of Breach" shall be and mean any one or more
of the following: (i) any untruth or inaccuracy in any representation of the
Stockholder or the Company or the breach of any warranty of the Stockholder
or the Company contained in this Agreement, including, without limitation,
any misrepresentation in, or omission from, any statement, certificate,
schedule, exhibit, annex or other document furnished pursuant to this
Agreement by the Stockholder or the Company (or any representative of the
Stockholder or the Company) to UAG or Sub (or any representative of UAG or
Sub) and any misrepresentation in or omission from any document furnished to
UAG or Sub in connection with the Closing, and (ii) any failure of the
Stockholder or the Company duly to perform or observe any term, provision,
covenant, agreement or condition on the part of the Stockholder or the
Company to be performed or observed.
9.2 INDEMNIFICATION BY UAG.
Notwithstanding the Closing, UAG indemnifies and agrees to fully defend,
save and hold harmless on an after-tax basis the Stockholder, the Company
(prior to the Closing), and any of their respective officers, directors,
employees, advisors, representatives, agents and Affiliates (each a
"Stockholder Indemnified Party"), if a Stockholder Indemnified Party
(including the Company prior to Closing) shall at any time or from time to
time suffer any Costs arising, directly or indirectly, out of or resulting
from, or shall pay or become obligated to pay any sum on account of, (i) any
and all UAG Events of Breach (as defined below) or (ii) any Claim before or
by any court, arbitrator, panel, agency or other governmental, administrative
or judicial entity, which Claim involves, affects or relates to any assets,
properties or operations of UAG or Sub or the conduct of the business of UAG
prior to the Closing Date or any Claim relating to or arising out of any
violation of the Environmental Laws by the Company after the Closing Date (a
"UAG Third Party Claim"). As used herein, "UAG Event of Breach" shall be and
mean any one or more of the following: (i) any untruth or inaccuracy in any
representation of UAG or Sub or the breach of any warranty of UAG or Sub
contained in this Agreement, including, without limitation, any
misrepresentation in, or omission from, any statement, certificate, schedule,
exhibit, annex or other document furnished pursuant to this Agreement by UAG
or Sub (or any representative of UAG or Sub) to the Stockholder (or any
representative of the Stockholder) and any misrepresentation in or omission
from any document furnished to the Stockholder in connection with the
Closing, and (ii) any failure of UAG or Sub duly to perform or observe
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any term, provision, covenant, agreement or condition on the part of UAG or
Sub to be performed or observed.
9.3 PROCEDURES.
If (i) any Stockholder Event of Breach occurs or is alleged and a UAG
Indemnified Party asserts that the Stockholder have become obligated to a UAG
Indemnified Party pursuant to SECTION 9.1, or if any Stockholder's Third
Party Claim is begun, made or instituted as a result of which the Stockholder
may become obligated to a UAG Indemnified Party hereunder, or (ii) a UAG
Event of Breach occurs or is alleged and a Stockholder Indemnified Party
asserts that UAG has become obligated to a Stockholder Indemnified Party
pursuant to SECTION 9.2, or if any UAG Third Party Claim is begun, made or
instituted as a result of which UAG may become obligated to a Stockholder
Indemnified Party hereunder (for purposes of this ARTICLE 9, any UAG
Indemnified Party and any Stockholder Indemnified Party is sometimes referred
to as an "Indemnified Party" and UAG and the Stockholder are sometimes
referred to as an "Indemnifying Party," and any UAG Third Party Claim and any
Stockholder Third Party Claim is sometimes referred to as a "Third Party
Claim," in each case as the context so requires), such Indemnified Party
shall give written notice to the Indemnifying Party of its or his obligation
to provide indemnification hereunder, provided that any failure to so notify
the Indemnifying Party shall not relieve them from any liability that it or
he may have to the Indemnified Party under this ARTICLE 9. If such notice
relates to a Third Party Claim, each Indemnifying Party, jointly and
severally, agrees to defend, contest or otherwise protect such Indemnified
Party against any such Third Party Claim at his or its sole cost and expense.
Such Indemnified Party shall have the right, but not the obligation, to
participate at its own expense in the defense thereof by counsel of such
Indemnified Party's choice and shall in any event cooperate with and assist
the Indemnifying Party to the extent reasonably possible. If the
Indemnifying Party fails timely to defend, contest or otherwise protect
against such Third Party Claim, such Indemnified Party shall have the right
to do so, including, without limitation, the right to make any compromise or
settlement thereof, and such Indemnified Party shall be entitled to recover
the entire Cost thereof from the Indemnifying Party, including, without
limitation, attorneys' fees, disbursements and amounts paid (or of which
such Indemnified Party has become obligated to pay) as the result of such
Third Party Claim. Failure by the Indemnifying Party to notify such
Indemnified Party of its or their election to defend any such Third Party
Claim within fifteen (15) days after notice thereof shall have been given to
the Indemnifying Party shall be deemed a waiver by the Indemnifying Party of
its or their right to defend such Third Party Claim. If the Indemnifying
Party assumes the defense of the particular Third Party Claim, the
Indemnifying Party shall not, in the defense of such Third Party Claim,
consent to entry of any judgment or enter into any settlement, except with
the written consent of such Indemnified Party. In addition, the Indemnifying
Party shall not enter into any settlement of any Third Party Claim (except
with the written consent of such Indemnified Party) which does not include as
an unconditional term thereof the giving by the claimant or the plaintiff to
such Indemnified Party a full release from all liability in respect of such
Third Party Claim. Notwithstanding the foregoing, the Indemnifying Party
shall not be entitled to control (but shall be entitled to participate at
their own expense in the defense of), and the
-39-
Indemnified Party shall be entitled to have sole control over, the defense or
settlement of any Third Party Claim to the extent the Third Party Claim seeks
an order, injunction or other equitable relief against the Indemnified Party
which, if successful, could materially interfere with the business,
operations, assets, condition (financial or otherwise) or prospects of the
Indemnified Party.
9.4 OFFSET.
In addition to and not in limitation of all rights of offset that an
Indemnified Party may have under applicable law, the parties agree that, at any
Indemnified Party's option, any or all amounts owing to such Indemnified Party
under this ARTICLE 9 or any other provision of this Agreement or any other
liability of the other parties (or any Affiliate of the other parties) to such
Indemnified Party in connection with this Agreement or the transactions
contemplated hereby, may be recovered by the Indemnified Party by an offset
against any or all amounts due to such other parties pursuant to this Agreement
or the transactions contemplated hereby.
9.5 REMEDIES.
The rights of an Indemnified Party under this ARTICLE 9 are in addition
to such other rights and remedies which such Indemnified Party may have under
this Agreement, applicable law or otherwise.
9.6 DEFINITIONS.
For purposes of this ARTICLE 9, "Costs" shall mean all liabilities,
losses, costs, damages (not including consequential damages), expenses, claims,
attorneys' fees, experts' fees, consultants' fees, and disbursements of any kind
or of any nature whatsoever. For purposes of application of the indemnity
provisions of this ARTICLE 9, the amount of any Cost arising from the breach of
any representation, warranty, covenant or agreement shall be the entire amount
of any Cost suffered, paid or required to be paid by the respective Indemnified
Party as a result of such breach.
ARTICLE 10
MISCELLANEOUS
10.1 SURVIVAL OF PROVISIONS.
(a) The respective representations, warranties, covenants and
agreements of each of the parties to this Agreement (except covenants and
agreements which are expressly required to be performed and are performed in
full on or before the Closing Date) shall survive the Closing Date and the
consummation of the transactions contemplated by this Agreement. In the event
of a breach of any such representations, warranties or covenants, the party to
whom such representations, warranties or covenants have been made shall have,
subject to ARTICLE 9 hereof, all rights and remedies for such breach available
to it under the
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provisions of this Agreement or otherwise, whether at law or in
equity, regardless of any disclosure to, or investigation made by or on behalf
of, such party on or before the Closing Date.
(b) The representations and warranties contained in SECTION 2.11 shall
survive (and not be affected in any respect by) the Closing for a period
terminating on the later of (i) the date five years after the Closing Date,
and (ii) with respect to any claim asserted with respect to any breach of
such representation or warranty or pursuant to SECTION 9.3 hereof before the
expiration of such representation or warranty, on the date such claim is
finally liquidated or otherwise resolved.
10.2 FEES AND EXPENSES.
Except as otherwise expressly provided in this Agreement, all legal
and other fees, costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby through the Closing Date shall be
paid by the party incurring such fees, costs or expenses; PROVIDED, HOWEVER,
that if SECTION 5.5 hereof is breached, then the Stockholder or the Company
shall pay to UAG, within five (5) Business Days after receipt of a request
therefor, an amount equal to all of the legal and other fees, costs and
expenses incurred by UAG in connection with this Agreement and the
transactions contemplated hereby.
10.3 HEADINGS.
The section headings herein are for convenience of reference only,
do not constitute part of this Agreement and shall not be deemed to limit or
otherwise affect any of the provisions hereof.
10.4 NOTICES.
All notices or other communications required or permitted hereunder
shall be given in writing and shall be deemed sufficient if delivered by hand,
recognized overnight delivery service or facsimile transmission or mailed by
registered or certified mail, postage prepaid (return receipt requested), as
follows:
If to the Company before the Closing Date:
Xxxxxxx Xxxxx Nissan, Inc.
0000 Xxxxxxx Xxxx
Xxxxx 0
Xxxxxxx, Xxxxxxx 00000
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with a copy to:
Xxxxx & Associates
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxx Xxxxx, Esq.
Fac # 000-000-0000
If to the Company after the Closing Date:
United Auto Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Executive Vice President
with a copy to:
Xxxxxx & Xxxxxx
0000 Xxxx Xxxxx, Xxxxxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx Xxxxxxxxxx, Esq.
If to the Stockholder:
Xxxxxxx X. Xxxxx
0000 Xxxxxxx Xxxx
Xxxxx 0
Xxxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxx & Associates
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx Xxxx Xxxxx, Esq.
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If to UAG or Sub:
United Auto Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Executive Vice President
with a copy to:
Xxxxxx & Xxxxxx
0000 Xxxx Xxxxx, Xxxxxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx Xxxxxxxxxx, Esq.
or such other address as shall be furnished in writing by such party, and any
such notice or communication shall be effective and be deemed to have been
given as of the date so delivered or three (3) days after the date so mailed;
provided, however, that any notice or communication changing any of the
addresses set forth above shall be effective and deemed given only upon its
receipt.
10.5 ASSIGNMENT.
This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto (and with respect to the
Stockholder, the personal representatives and heirs of the Stockholder) and
their respective successors and permitted assigns, and the provisions of
ARTICLE 9 hereof shall inure to the benefit of the Indemnified Parties
referred to therein; PROVIDED, HOWEVER, that neither this Agreement nor any
of the rights, interests, or obligations hereunder may be assigned by any of
the parties hereto without the prior written consent of the other parties
which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, UAG and Sub shall have the unrestricted right to assign this
Agreement and to delegate all or any part of their obligations hereunder, but
in such event UAG shall remain fully liable for the performance of all of
such obligations in the manner prescribed in this Agreement.
10.6 ENTIRE AGREEMENT.
This Agreement (including the Schedules hereto) and the Real Estate
Purchase Agreement embody the entire agreement and understanding of the
parties with respect to the transactions contemplated hereby and supersede
all prior written or oral commitments, arrangements or understandings between
the parties with respect thereto and all prior drafts of this Agreement.
There are no restrictions, agreements, promises, warranties, covenants
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or undertakings with respect to the transactions contemplated hereby other than
those expressly set forth herein or in the Lease. Prior drafts of this
Agreement shall not be used as a basis for interpreting this Agreement.
10.7 WAIVER AND AMENDMENTS.
Each of the Stockholder, the Company, UAG and Sub may by written
notice to the other parties (i) extend the time for the performance of any of
the obligations or other actions of the other parties, (ii) waive any
inaccuracies in the representations or warranties of the other parties
contained in this Agreement, (iii) waive compliance with any of the covenants
of the other parties contained in this Agreement, (iv) waive performance of
any of the obligations of the other parties created under this Agreement, or
(v) waive fulfillment of any of the conditions to its own obligations under
this Agreement. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach, whether or not similar. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the parties
hereto.
10.8 Counterparts.
This Agreement may be executed in any number of counterparts, all of
which shall be considered one and the same agreement and each of which shall
be deemed an original.
10.9 GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Georgia.
10.10 ACCOUNTING TERMS.
All accounting terms used herein which are not expressly defined in
this Agreement shall have the respective meanings given to them in accordance
with GAAP.
10.11 CERTAIN DEFINITIONS.
For purposes of this Agreement:
(a) "Affiliate" of a specified Person shall mean a Person that
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified, and in
the case of a specified Person who is a natural person, his spouse, his
issue, his parents, his estate and any trust entirely for the benefit of his
spouse and/or issue.
(b) "best efforts" shall be deemed to not include any obligation on
the part of any Person to undertake any liabilities, expend any funds or
perform acts (except liabilities, expenditures or performance, other than any
best efforts obligations, expressly required to be undertaken by the terms of
this Agreement) which are materially burdensome to such Person;
- 44 -
PROVIDED, HOWEVER, that notwithstanding the foregoing, the term "best
efforts" shall include an obligation to take such actions which are normally
incident to or reasonably foreseeable in connection with such obligation or
the transactions contemplated hereby.
(c) "Business Day" shall mean any day excluding Saturday, Sunday and
any day which is a legal holiday under Federal law.
(d) "GAAP" shall mean generally accepted accounting principles which
are in effect in the United States on the Closing Date.
(e) "Liens" shall mean any mortgages, pledges, title defects or
objections, liens, claims, security interests, conditional and installment sale
agreements, encumbrances or charges of any kind.
(f) "Material Adverse Effect" shall mean any change in, or effect on,
the Company (including the business thereof) which is, or could reasonably be
expected to be, materially adverse to the business, operations, assets,
condition (financial or otherwise) or prospects of the Company.
(g) "Person" shall mean and include an individual, corporation,
limited liability company, partnership, joint venture, association, trust, any
other incorporated or unincorporated organization or entity and a governmental
entity or any department or agency thereto.
(h) "UAG Public Offering Date" shall mean the date of the consummation
of an underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offering
and sale of shares of common stock, par value $.0001 per share of UAG. on a firm
commitment basis.
10.12 SCHEDULES.
Disclosure of any matter in any Schedule hereto or in the Financial
Statements shall not be considered as disclosure pursuant to any other
provision, subprovision, section or subsection of this Agreement or SCHEDULE
to this Agreement.
10.13 SEVERABILITY.
If any one or more of the provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this Agreement shall not be
affected thereby. To the extent permitted by applicable law, each party
waives any provision of law which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.
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10.14 REMEDIES.
None of the remedies provided for in this Agreement, including
termination of this Agreement as set forth in ARTICLE 8, indemnification as
set forth in ARTICLE 9, the payment of certain fees, costs and expenses as
set forth in SECTION 10.2 or specific performance as set forth in this
SECTION 10.14, shall be the exclusive remedy of either party for a breach of
this Agreement, the parties hereto having the right to seek any other remedy
in law or equity in lieu of or in addition to any remedies provided in this
Agreement, including an action for damages for breach of contract.
10.15 TIME IS OF THE ESSENCE.
Time is of the essence for purposes of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
UNITED AUTO GROUP, INC.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------------
Title: Executive Vice-President
----------------------------------
UAG ATLANTA IV, INC.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------------
Title: Executive Vice-President
----------------------------------
XXXXXXX XXXXX NISSAN, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------
Title: President
----------------------------------
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx, Individually
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