EXHIBIT 1
SECURITIES PURCHASE AGREEMENT
by and among
UNITED AUTO GROUP, INC.,
and
INTERNATIONAL MOTOR CARS GROUP 1, L.L.C.
and
INTERNATIONAL MOTOR CARS GROUP 11, L.L.C.
dated as of
April 12, 1999
Table of Contents
Page
ARTICLE I ISSUANCE AND SALE OF PREFERRED STOCK AND
WARRANTS
1.1. Issuance, Purchase and Sale
1.2. The Closing; Deliveries
ARTICLE 11 REPRESENTATIONS AND WARRANTIES OF THE
COMPANY .....................................................3
2.1. Organization; Subsidiaries...........................3
2.2. Due Authorization ...................................5
2.3. Capitalization.......................................5
2.4. SEC Reports .........................................6
2.5. Financial Statements ................................6
2.6. Absence of Certain Changes ..........................7
2.7. Litigation............................................
2.8. Title to Properties; Insurance.......................8
2.9. Consents, No Violations .............................9
2.10. Holding Company Act and Investment Company Act .....10
2.11. Taxes ..............................................10
2.12. Employee Benefit Plans .............................11
2.13. Intellectual Property ..............................14
2.14. Compliance with Laws ...............................14
2.15. Commitments ........................................17
2.16. Acquisitions .......................................18
2.17. Brokers or Finders; Opinion of Financial Advisor ...18
2.18. Proxy Statement ....................................19
2.19. Suppliers ..........................................19
2.20. Related Party Transactions .........................19
2.21. Products ...........................................20
2.22. Section 203 of the DGCL; Takeover Statute ..........20
2.23. Disclosure .........................................20
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER ..................................................21
3.1. Acquisition for Investment..........................21
3.2. Restricted Securities ..............................21
3.3. No Brokers or Finders ..............................21
3.4. Accredited Investor.................................21
3.5 Organization........................................21
3.6. Due Authorization...................................21
3.7. Consents, No Violations.............................22
3.8. Availability of Funds ..............................22
3.9 Due Diligence.......................................22
ARTICLE IV COVENANTS
4.1. Conduct of Business by the Company Pending the
Closings ...........................................23
4.2. No Solicitation ....................................25
4.3. Press Releases; Interim Public Filings .............26
4.4. HSR Act.............................................27
4.5. Proxy Statement; Stockholders Meeting ..............27
4.6. Consents; Approvals ................................28
4.7. Listing.............................................28
4.8. Intentionally Omitted ..............................28
4.9. Certificates of Designation; Amendment to
Certificate of Incorporation .......................28
4.10 Cooperation...........................................
4.11. Access to Property; Records ........................29
4.12 Reserve Shares .....................................29
4.13 Notice of Breach....................................29
4.14 Transfer Taxes .....................................30
4.15 Indemnification.....................................30
4.16 Certain Limitations ................................30
4.17. Acquisition Entities ...............................30
ARTICLE V CONDITIONS
5.1. Conditions to Obligations of the Purchaser and the
Company ............................................31
5.2. Conditions to Obligations of the Purchaser .........31
5.3. Conditions to Obligations of the Company ...........33
ARTICLE VI TERMINATION
6.1. Termination ........................................34
6.2. Effect of Termination; Termination Fee .............36
ARTICLE VII SURVIVAL; CERTAIN REMEDIES .................................37
7.1. Survival . .........................................37
7.2. Right to Require Repurchase ........................37
7.3. Sole and Exclusive Remedy ..........................38
7.4. Termination Following Initial Closing ..............38
ARTICLE VIII MISCELLANEOUS ..............................................39
8.1. Defined Terms; Interpretations .....................39
8.2. Fees and Expenses ..................................47
8.3. Public Announcements ...............................47
8.4. Restrictive Legends ................................48
8.5. Further Assurances .................................48
8.6. Successors and Assigns .............................49
8.7. Entire Agreement ...................................49
8.8. Notice..............................................49
8.9. Amendments..........................................50
8.10 Counterparts........................................50
8.11 Headings............................................50
8.12. Nouns and Pronouns .................................50
8.13. GOVERNING LAW ......................................51
8.14. Submission to Jurisdiction .........................51
8.15. WAIVER OF JURY TRIAL ...............................51
8.16 Severability .......................................51
Exhibits
Exhibit 1.2(b) Forms of Warrant
Exhibit 2.2 Forms of Certificates of Designation
Exhibit 4.5 Form of Certificate of Amendment
Exhibit 5.1(a)(iii) Consents (Initial Closing)
Exhibit 5.1(b)(ii) Consents (Second Closing)
Exhibit 5.2(a)(iv) Form of Stockholders Agreement
Exhibit 5.2(a)(v) Form of Registration Rights Agreement
Exhibit 5.2(a)(viii) Form of Opinion of Xxxxxxx Xxxx & Xxxxxxxxx
INDEX OF DEFINED TERMS
SECTION
1998 Balance Sheet .......................................................2.5
1998 Financial Statements ................................................2.5
Affiliate ................................................................8.1
Agreement ...........................................................preamble
Alternative Transaction ..................................................8.1
Board of Directors .......................................................8.1
Certificate of Amendment .................................................4.9
Certificate of Designation ...............................................2.2
Closing ...............................................................1.2(a)
Closing Date ..........................................................1.2(a)
Closings ..............................................................1.2(a)
Code .....................................................................8.1
Commitments .............................................................2.15
Common Stock ........................................................recitals
Company .............................................................preamble
Company Affiliates .......................................................4.2
Company Fiduciary Out ....................................................4.2
Compensation and Benefit Plans ...........................................8.1
Confidentiality Agreement ...............................................4.11
Consents .................................................................4.6
DGCL .....................................................................8.1
Encumbrances ........................................................2. 1 (b)
Environmental Laws .......................................................8.1
Environmental Matter .....................................................8.1
Environmental Permits ............................................2.14(d)(ii)
ERISA ....................................................................8.1
ERISA Affiliate ..........................................................8.1
Exchange Act..............................................................8.1
GAAP .....................................................................2.5
Governmental Entity.......................................................8.1
Hazardous Substances......................................................8.1
HSR Act...................................................................8.1
IMCG-l ..............................................................preamble
IMCG-1 Initial Closing Purchase Price .....................................1.1
IMCG-l Second Closing Purchase Price ......................................1.1
IMCG-11...............................................................preamble
Independent Directors ...................................................4.16
Initial Closing .......................................................1.2(a)
Initial Closing Purchase Price ...........................................1.1
Initial Purchase .........................................................1.1
Intellectual Property ....................................................8.1
IRS ......................................................................8.1
Knowledge ................................................................8.1
Laws .....................................................................8.1
Leased Real Property .....................................................8.1
Licenses .............................................................2.14(a)
Litigation ............................................................2.7(a)
Losses ...................................................................8.1
Major Suppliers .........................................................2.19
Material Adverse Effect ..................................................8.1
Multi-Employer Plan ..................................................2.12(c)
Non-Voting Common Stock .............................................recitals
NYSE .....................................................................8.1
Owned Real Property ......................................................8.1
PCBs .....................................................................8.1
Permitted Encumbrances ...................................................8.1
Person ...................................................................8.1
Preferred Stock .....................................................recitals
Products ................................................................2.21
Proxy Statement .........................................................2.18
Purchase Price ......................................................recitals
Purchaser ...........................................................preamble
Purchaser Designees ......................................................4.5
Purchaser Expenses .......................................................8.2
Real Property ...................................................2.14(d)(iii)
Registration Rights Agreement ......................................5.2(a)(v)
Related Parties ..........................................................8.1
Release ..................................................................8.1
Return ...................................................................8.1
SEC ......................................................................8.1
SEC Reports ..............................................................2.4
Second Closing ........................................................1.2(a)
Second Closing Failures................................................5,2(a)
Second Closing Purchase Price.............................................1.1
Second Purchase...........................................................1.1
Section 7.2 Put Price.....................................................7.2
Section 7.4 Put Price ....................................................7.4
Securities Act ...........................................................8.1
Series A Preferred Stock ............................................recitals
Series B Preferred Stock ............................................recitals
Shares ...................................................................8.1
Significant Shareholders .................................................8.1
Stockholders Agreement ............................................5.2(a)(iv)
Stockholders Meeting.....................................................2.18
Subsidiaries ........................................................2. 1 (b)
Subsidiary ..........................................................2. 1 (b)
Takeover Proposal ........................................................8.1
Tax ......................................................................8.1
Taxes ....................................................................8.1
Terminating Breach ..................................................6. 1 (d)
Third Party ..............................................................8.1
Transaction Documents ....................................................8.1
Warrants ............................................................recitals
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as
of April 12, 1999, by and among UNITED AUTO GROUP, INC., a Delaware
corporation (the "Company"), INTERNATIONAL MOTOR CARS GROUP 1, L.L.C.
("IMCG-1") and INTERNATIONAL MOTOR CARS GROUP 11, L.L.C. ("IMCG-11"), each
a Delaware limited liability company (IMCG-I and IMCG-11 collectively, the
"Purchaser").
WITNESSETH:
WHEREAS, upon the terms and subject to the conditions set forth
in this Agreement, the Company wishes to sell to the Purchaser, and the
Purchaser wishes to purchase from the Company, an aggregate of 7,903.124
shares of Series A Convertible Preferred Stock, par value $0.0001 per share
(the "Series A Preferred Stock"), an aggregate of 396.876 shares of Series
B Convertible Preferred Stock, par value $0.0001 per share (the "Series B
Preferred Stock", and together with the Series A Preferred Stock, the
"Preferred Stock") and warrants (the "Warrants") to purchase an aggregate
of (i) 3,898,665 shares of the Company's voting Common Stock, par value
$0.0001 per share (the "Common Stock"), and (ii) 1, 101,335 shares of the
Company's non-voting Common Stock, par value $0.0001 per share (the
"Non-Voting Common Stock"), in two separate installments for an aggregate
purchase price of $83,000,000 in cash (the "Purchase Price");
WHEREAS, concurrently with the execution and delivery of this
Agreement, each of the Significant Shareholders are executing and
delivering a voting agreement with the Purchaser; and
WHEREAS, the Purchaser and the Company desire to provide for the
purchase and sale of the Preferred Stock and the Warrants and to establish
certain rights and obligations in connection therewith.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
ISSUANCE AND SALE OF PREFERRED STOCK AND WARRANTS
1. 1. Issuance, Purchase and Sale. Upon the terms set forth
herein,
(a) at the Initial Closing, (i) the Company shall sell to IMCG-I,
and IMCG-I shall purchase from the Company, 2,906.743 shares of Series A
Preferred Stock for an aggregate purchase price of $26,160,687.92 in cash
(the "IMCG-1 Initial Closing Purchase Price"), subject to the conditions set
forth in Sections 5. 1 (a), 5.2(a) and 5.3, and (ii) the Company shall sell
to IMCG-11, and IMCG-11 shall purchase from the Company, 821.1266 shares of
Series A Preferred Stock for an aggregate purchase price of $7,390,139.41
in cash (such amount together with the IMCG-I Initial Closing Purchase
Price, the "Initial Closing Purchase Price"), subject to the conditions
set forth in Sections 5. 1 (a), 5.2(a) and 5.3 (the transactions to occur
at the Initial Closing, the "Initial Purchase"), and
(b) at the Second Closing, (i) the Company shall sell to IMCG-I,
and IMCG-1 shall purchase from the Company, 3,565.04096 shares of Series A
Preferred Stock and Warrants to purchase 3,898,665 shares of Common Stock
for an aggregate purchase price of $38,557,152.74 in cash (the "IMCG-1
Second Closing Purchase Price"), subject to the conditions set forth in
Article V, and (ii) the Company shall sell to IMCG-11, and IMCG-11 shall
purchase from the Company, 610.214 shares of Series A Preferred Stock,
396.876 shares of Series B Preferred Stock and Warrants to purchase 1, 101,
335 shares of Non-Voting Common Stock, for an aggregate purchase price
of $10,892,019.93 in cash (such amount together with the IMCG-l Second
Closing Purchase Price, the "Second Closing Purchase Price"), subject to
the conditions set forth in Article V (the transactions to occur at the
Second Closing, the "Second Purchase").
1.2. The Closing; Deliveries. (a) The closing of the Initial
Purchase (the "Initial Closing") and the closing of the Second Purchase
(the "Second Closing", and together with the Initial Closing, individually,
a "Closing" and collectively, the "Closings") shall take place at the
offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 at 9:00 a.m. on the fourth business day following
the satisfaction or waiver of the conditions to each such Closing set forth
in Article V (other than those conditions that by their nature are to be
satisfied at such Closing, but subject to the satisfaction or waiver of
those conditions) or on such other place, time and/or date as shall be
mutually agreed by the Company and the Purchaser (the date of such Closing,
a "Closing Date").
(b) At each Closing, the Company shall deliver to the Purchaser
certificates representing the shares of Preferred Stock and the Warrants
being purchased by the Purchaser at such Closing, each registered in the
name of the Purchaser or its nominee or designee in such amounts as
Purchaser shall inform the Company prior to such Closing. Delivery of such
certificates shall be made against receipt by the Company of the portion of
the Purchase Price payable in connection with such Closing, which shall be
paid by wire transfer of immediately available funds to an account
designated at least
three business days prior to the applicable Closing Date by the Company.
The Warrants shall be in the forms of Exhibit 1.2(b).
ARTICLE 11
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser, as
of the date hereof and as of each Closing Date, as follows:
2.1. Organization; Subsidiaries. (a) The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to
carry on its business as it is now being conducted. The Company is duly
qualified and licensed as a foreign corporation to do business, and is in
good standing (and has paid all relevant franchise or analogous taxes), in
each jurisdiction where the character of its assets owned or held under
lease or the nature of its business makes such qualification necessary,
except where the failure to so qualify or be licensed could not
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect. The minute books (containing the records of meetings of
stockholders, the Board of Directors, and any committees of the Board of
Directors), stock record books and certificate books of the Company contain
true, complete and accurate records in all material respects of all
corporate actions taken at any such meetings and other corporate governance
matters, the stock ownership of the Company and the transfer of the shares
of its capital stock since the date of inception of the Company. Complete
and correct copies of all of the foregoing (other than, as of the date
hereof, the minutes of the meeting of the Board of Directors on April 9,
1999, which have not yet been approved) have previously been made available
to the Purchaser.
(b) Schedule 2.1(b) sets forth a complete and correct list of
each corporation, limited liability company, partnership, business
association or other Person with respect to which the Company has, directly
or indirectly, ownership of or rights with respect to securities or other
interests having the power to elect a majority of such Person's board of
directors or analogous or similar governing body, or otherwise having the
power to direct the management, business or policies of that corporation,
limited liability company, partnership, business association or other
Person (each, a "Subsidiary" and, collectively, the "Subsidiaries") that is
required to be included in Exhibit 21 to the Company's Annual Report on
Form 10-K for the period ended December 31, 1998. Except as set forth on
Schedule 2.1(b), the Company owns, either directly or indirectly through
one or more Subsidiaries, all of the capital stock or other equity
interests of the Subsidiaries free and clear of all liens, charges, claims,
security interests, restrictions, options, proxies, voting trusts or other
encumbrances ("Encumbrances"), other than
transfer restrictions imposed by applicable federal and state securities
Laws. All of the issued and outstanding shares of capital stock or other
equity interests of each Subsidiary held directly or indirectly by the
Company have been duly authorized and are validly issued, fully paid and
nonassessable. No shares of capital stock or other equity interests of any
Subsidiary are entitled to preemptive rights. Except as set forth on
Schedule 2.1(b) or disclosed in the SEC Reports, there are no outstanding
subscription rights, options, warrants, convertible or exchangeable
securities or other rights of any character whatsoever relating to issued
or unissued capital stock or other equity interests of any Subsidiary, or
any Commitments of any character whatsoever relating to issued or unissued
capital stock or other equity interests of any Subsidiary or pursuant to
which the Company or any Subsidiary is or may become bound to issue or
grant additional shares of its capital stock or other equity interests or
related subscription rights, options, warrants, convertible or exchangeable
securities or other rights, or to grant preemptive rights. Except as set
forth on Schedule 2.1(b) or disclosed in the SEC Reports, there are no
voting trusts, stockholders agreements, proxies or other Commitments or
understandings to which any Subsidiary is a party with respect to the
voting or transfer of any capital stock or other equity interest of any
Subsidiary. Except for (i) the Subsidiaries, (ii) assets held in benefit
plans, (iii) corporate treasury transactions and (iv) as set forth on
Schedule 2.1(b), the Company does not own, directly or indirectly, any
interest in any corporation, limited liability company, partnership,
business association or other Person.
(c) Each Subsidiary is a corporation, limited liability company,
partnership, business association or other Person duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization and has the requisite power and authority to carry on its
business as it is now being conducted. Except as set forth on Schedule 2. 1
(c), each Subsidiary is duly qualified and licensed to do business, and is
in good standing (and has paid all relevant franchise or analogous taxes),
in each jurisdiction where the character of its assets owned or held under
lease or the nature of the business conducted by it makes such
qualification necessary except where the failures of all of such
Subsidiaries to so qualify or be licensed individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. The
minute books or other records (containing the records of meetings of
stockholders or other holders of other equity interests, the board of
directors or other similar governing body, and any committees thereof), the
stock ownership or analogous records and the certificate books of each of
UnitedAuto Finance, Inc., UnitedAuto Care, Inc. and UnitedAuto Care
Products, Inc. contain in all material respects true, complete and accurate
records of all actions taken at any such meetings and other governance
matters, the stock or other equity ownership of each of such Subsidiaries
and the transfer of the shares of its capital stock or other equity
interest since the date of inception of each such Subsidiary. Complete and
correct copies of all of the foregoing have previously been made available
to the Purchaser.
2.2. Due Authorization. The Company has all right, corporate
power and authority to enter into this Agreement and each of the other
Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
the Company of this Agreement and each of the other Transaction Documents
to which it is a party, the issuance and sale of the Preferred Stock and
the Warrants by the Company and the compliance by the Company with each of
the provisions of this Agreement and each of the other Transaction
Documents to which it is a party (including the reservation and issuance of
the Shares and the consummation by the Company of the transactions
contemplated hereby and thereby) (a) are within the corporate power and
authority of the Company and (b) have been duly authorized by all requisite
corporate proceedings on the part of the Company, except for the approval
by the stockholders of the Company referenced in Section 4.5. The Board of
Directors has determined that it is advisable and in the best interest of
the Company's stockholders for the Company to consummate the issuance and
sale of the Preferred Stock and the Warrants upon the terms and subject to
the conditions set forth in this Agreement, and has unanimously recommended
that the Company's stockholders approve and adopt this Agreement and the
other transactions referenced in Section 4.5; provided, however, any such
recommendation of the Board of Directors may be withdrawn, modified or
amended to the extent permitted by Section 4.5 of this Agreement. This
Agreement has been, and each of the other Transaction Documents to which
the Company is a party when executed and delivered by the Company will be,
duly and validly executed and delivered by the Company, and this Agreement
constitutes, and each of such other Transaction Documents when executed and
delivered by the Company will constitute, a valid and binding agreement of
the Company enforceable against the Company in accordance with its terms,
except as enforceability against the Company may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar Laws now or
hereafter in effect relating to the rights of creditors generally and by
legal and equitable limitations on the enforceability of specific remedies
(regardless of whether enforcement is considered in a proceeding in equity
or at law). The Shares have been validly reserved for issuance, and upon
payment of the Purchase Price and issuance in accordance with the
Certificates of Designation, or the Warrant, as the case may be, will be
duly and validly issued and outstanding, fully paid, and nonassessable. The
terms, designations, powers, preferences and relative participation,
optional and other special rights, qualifications, limitations and
restrictions of the Series A Preferred Stock and the Series B Preferred
Stock will be set forth in the Certificate of Designation of the Series A
Preferred Stock and the Certificate of Designation of the Series B
Preferred Stock, respectively (collectively, the "Certificates of
Designation"), the forms of which are attached as Exhibit 2.2.
2.3. Capitalization. The authorized capital stock of the Company
consists of (1) 40,000,000 shares of voting Common Stock, par value $0.0001
per share, of which, as of March 24, 1999, 21,289,619 shares are issued and
outstanding; (ii) 1,125,000 shares
of Non-Voting Common Stock, of which, as of March 24, 1999, 605,454 shares
are issued and outstanding; (iii) 20,000,000 shares of Class C Common
Stock, par value $0.0001 per share, of which, as of the date hereof, no
shares are issued and outstanding; and (iv) 100,000 shares of preferred
stock, par value $0.0001 per share, of which, as of the date hereof, no
shares are issued and outstanding. There have been no changes in such
numbers since March 24, 1999, except as a result of the transactions
contemplated by the Transaction Documents, and the issuance of Common Stock
upon the exercise of rights to acquire Common Stock and Non-Voting Common
Stock set forth on Schedule 2.3. All of the issued and outstanding shares
of Common Stock and Non-Voting Common Stock have been duly authorized and
are validly issued, fully paid and nonassessable. No shares of capital
stock of the Company are entitled to preemptive rights. Except as set forth
on Schedule 2.3 or disclosed in the SEC Reports, there are no outstanding
subscription rights, options, warrants, convertible or exchangeable
securities or other rights of any character whatsoever relating to issued
or unissued capital stock of the Company, or any Commitments of any
character whatsoever relating to issued or unissued capital stock of the
Company or pursuant to which the Company or any of the Subsidiaries is or
may become bound to issue or grant additional shares of its capital stock
or related subscription rights, options, warrants, convertible or
exchangeable securities or other rights, or to grant preemptive rights.
Except as set forth on Schedule 2.3 or disclosed in the SEC Reports, (1)
the Company has not agreed to register any securities under the Securities
Act or under any state securities law or granted registration rights to any
Person or entity and (ii) there are no voting trusts, stockholders
agreements, proxies or other Commitments or understandings in effect to
which the Company is a party or of which it has Knowledge with respect to
the voting or transfer of any of the shares of Common Stock or Non-Voting
Common Stock. To the extent that any options, warrants or any of the other
rights described above are outstanding, neither the issuance and sale of
the Preferred Stock and the Warrants nor any issuance of Shares will result
in an adjustment of the exercise or conversion price or number of shares
issuable upon the exercise or conversion of any such options, warrants or
other rights.
2.4. SEC Reports. The Company has timely filed all proxy
statements, reports and other documents required to be filed by it with the
SEC under the Exchange Act from and after October 23, 1996 (collectively,
the "SEC Reports"). Each SEC Report was on the date of its filing in
compliance as to form in all material respects with the requirements of its
respective report form and did not on the date of filing contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
2.5. Financial Statements. The audited consolidated balance sheet
of the Company and the Subsidiaries as of December 31, 1998 (the " 1998
Balance Sheet") and the related consolidated statements of operations,
changes in stockholders' equity (deficit)
and cash flows for the 12-month period then ended, including the notes
thereto (collectively, the " 1998 Financial Statements"), and all of the
financial statements (including any related schedules and/or notes)
included in the SEC Reports, have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") consistently
followed throughout the periods involved, except as may be noted therein,
and fairly present in all material respects the consolidated financial
condition, results of operations and changes in stockholders' equity of the
Company and the Subsidiaries as of the respective dates thereof and for the
respective periods then ended (in each case subject, as to interim
statements, to changes resulting from year-end adjustments). A complete and
correct copy of the 1998 Financial Statements is set forth on Schedule 2.5.
Except as set forth on Schedule 2.5 or disclosed in the SEC Reports,
neither the Company nor any Subsidiary has any liability or obligation
(whether accrued, absolute, contingent, unliquidated or otherwise, whether
known or unknown, whether due or to become due and regardless of when
asserted), except (i) liabilities and obligations in the respective amounts
reflected or reserved against in the 1998 Balance Sheet, (ii) liabilities
and obligations incurred in the ordinary course of business since December
31, 1998 which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, (iii) under Commitments in
accordance with the terms and conditions thereof which are not required by
GAAP to be reflected on the 1998 Balance Sheet except Commitments that are
required to be disclosed pursuant to Section 2.15 and are not so disclosed,
(iv) in respect of any Loss relating to any Environmental Matter except to
the extent required to be disclosed on Schedule 2.14 and not so disclosed,
or (v) arising out of or in connection with any claim by Person in respect
of any product sold, rented, leased, designed, distributed or marketed at
any time by the Company or its Subsidiaries resulting from an alleged
defect in the design or manufacture thereof, or any alleged failure to warn
with respect thereto, but only to the extent not subject to indemnification
or reimbursement by financially solvent entities.
2.6. Absence of Certain Changes. Except as set forth on Schedule
2.6, as disclosed the SEC Reports, or pursuant to the transactions
contemplated by this Agreement and the other Transaction Documents, since
December 31, 1998: (i) the business of the Company and the Subsidiaries
taken as a whole has been conducted in the ordinary course of business
consistent with past practice, (ii) the Company and its Subsidiaries have
not (a) suffered any change, event or development or series of changes,
events or developments which individually or in the aggregate has had or
could reasonably be expected to have a Material Adverse Effect, (b)
suffered any damage, destruction or casualty loss to its physical
properties (whether or not covered by insurance) which individually or in
the aggregate has resulted or could reasonably be expected to result in a
Material Adverse Effect or (c) been the subject of any material Litigation
or threatened or commenced investigation by a Governmental Entity, and
(iii) there has not been any transaction, act, development, circumstance or
event that if it
had occurred on or after the date of this Agreement without the prior
consent of the Purchaser would constitute a breach of Section 4.1.
2.7. Litigation. (a) Except as set forth on Schedule 2.7(a) or as
disclosed in the SEC Reports, there is no material claim, action, suit,
investigation or proceeding ("Litigation") pending or, to the Knowledge of
the Company, threatened against the Company or any of the Subsidiaries or
involving any of their respective properties or assets by or before any
court, arbitrator or other Governmental Entity.
(b) Except as set forth on Schedule 2.7(b) or as disclosed in the
SEC Reports, neither the Company nor any of the Subsidiaries is in default
under or in breach of any order, judgment or decree of any court,
arbitrator or other Governmental Entity, and neither the Company nor any of
the Subsidiaries is a party or subject to any order, judgment or decree of
any court, arbitrator or other Governmental Entity, which has had or could
reasonably be expected to have a Material Adverse Effect.
2.8. Title to Properties; Insurance. (a) Except as set forth on
Schedule 2.8(a), the Company and the Subsidiaries have good and valid title
to, or, in the case of property leased by them, a valid and subsisting
leasehold interest in, their respective material properties and assets,
free of all Encumbrances except for Permitted Encumbrances.
(b) Schedule 2.8(b) sets forth the address of all Owned Real
Property. With respect to the Owned Real Property, (i) the Company and its
Subsidiaries have good and marketable title in fee simple to the Owned Real
Property, free and clear of all Encumbrances except for Permitted
Encumbrances, (ii) there are no outstanding options or rights of first
refusal in favor of any other Person to purchase the Owned Real Property or
any portion thereof or interest therein, and (iii) there are no leases,
subleases, licenses, options, rights, concessions or other Commitments
affecting any portion of the Owned Real Property.
(c) Schedule 2.8(c) sets forth a complete and correct list of all
material Leased Real Property. With respect to the Leased Real Property,
the Company and the Subsidiaries have good and valid leasehold estates in
the Leased Real Property, free and clear of all Encumbrances except for
Permitted Encumbrances and Encumbrances set forth on Schedule 2.8(a).
Except as set forth on Schedule 2.8(c), (A) each lease or sublease relating
to the Leased Real Property is legal, valid, binding and enforceable and in
full force and effect and (B) the execution and delivery of this Agreement
and the consummation of the transactions contemplated by this Agreement
will not cause a breach or require any third party consent or notification
under any such lease or sublease. The information set forth on Schedule
2.8(c) regarding the Leased Real Property is true and correct in all
material respects.
(d) [Intentionally omitted]
(e) Schedule 2.8(e) sets forth a complete and correct list of all
insurance coverage carried by the Company and the Subsidiaries, including
for each policy the type and scope of coverage, the carrier and the amount
of coverage. All of the assets of the Company and the Subsidiaries and all
aspects of the Company's and the Subsidiaries' businesses that are of
insurable character are covered by insurance with reputable insurers
against risks of liability, casualty and fire and other losses and
liabilities customarily obtained to cover comparable businesses and assets
in amounts, scope and coverage (and with deductibles) which are consistent
with prudent industry practice. Neither the Company nor any of the
Subsidiaries is in default in a material respect with respect to any of its
obligations under any insurance policy maintained by it. All such policies
are in full force and effect and no premiums with respect thereto are past
due and owed. Except as set forth on Schedule 2.8(e), there are no claims
by the Company or any of the Subsidiaries under any of such policies to
which any insurance company is denying liability or defending under a
reservation of rights or similar clause. Except as set forth on Schedule
2.8(e), neither the Company nor any of the Subsidiaries has received notice
of any pending or threatened termination of any of such policies or any
premium increases for the current policy period with respect to any of such
policies, and the consummation of the transactions contemplated by this
Agreement or any of the other Transaction Documents will not result in any
such termination or premium increase. The Company maintains a Directors'
and Officers' insurance policy with National Union Fire Insurance Company,
a complete and correct copy of which has previously been delivered to the
Purchaser.
2.9. Consents, No Violations. Except as set forth on Schedule
2.9, neither the execution, delivery or performance by the Company of this
Agreement or any of the other Transaction Documents to which it is a party
nor the consummation of the transactions contemplated hereby or thereby
will (a) conflict with, or result in a breach or a violation of, any
provision of the certificate of incorporation or by-laws of the Company;
(b) constitute, with or without notice or the passage of time or both, a
breach, violation or default, create an Encumbrance, or give rise to any
right of termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration, under (i) any Law or (ii) any
Commitment to which the Company or any of the Subsidiaries is a party or
pursuant to which any of them or any of their assets or properties is
subject, except, with respect to the matters set forth in this clause (b),
for breaches, violations, defaults, Encumbrances, or rights of termination,
modification, cancellation, prepayment, suspension, limitation, revocation
or acceleration, which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect or adversely
affect the ability of the Company to consummate the transactions
contemplated by this Agreement or any other Transaction Document to which
it is a party; or (c) except for any required filing under the HSR Act or
with respect
to any Environmental Permits, require any consent, approval or
authorization of, notification to, filing with, or exemption or waiver by,
any Governmental Entity or any other Person on the part of the Company or
any of the Subsidiaries.
2. 10. Holding Company Act and Investment Company Act. Neither
the Company nor any of the Subsidiaries is: (i) a "public utility company"
or a "holding company," or an "affiliate" or a "subsidiary company" of a
"holding company," or an "affiliate" of such a "subsidiary company," as
such terms are defined in the Public Utility Holding Company Act of 1935,
as amended, or (ii) a "public utility," as defined in the Federal Power
Act, as amended, or (iii) an "investment company" or an "affiliated person"
thereof or an "affiliated person" of any such "affiliated person," as such
terms are defined in the Investment Company Act of 1940, as amended.
2.11. Taxes. (a) Except as disclosed in Schedule 2.11 (a), the
Company and each of the Subsidiaries has timely filed all Returns required
by Law to have been filed by it and has paid all Taxes shown to be due
thereon or which are otherwise due and payable (or made adequate provision
in accordance with GAAP for all such Taxes on the 1998 Balance Sheet)
including, without limitation, any Tax levied upon any of its properties,
assets, income or franchises. All such Returns were complete and correct in
all material respects. All amounts required to be collected or withheld by
the Company and each of the Subsidiaries has been collected or withheld and
any such amounts that are required to be remitted to any taxing authority
have been duly remitted. The accruals and reserves for Taxes on the 1998
Balance Sheet are complete and adequate in all material respects to cover
any liability of the Company and each of its Subsidiaries for Taxes for
periods through December 31, 1998. The accruals and reserves for deferred
tax liabilities on the 1998 Balance Sheet are adequate to cover any such
liability in accordance with GAAP.
(b) Schedule 2.11(b) contains a list of states, territories and
jurisdictions (whether foreign or domestic) in which the Company or any of
the Subsidiaries currently file an income, franchise, sales or use Return.
Except as set forth on Schedule 2.11 (b), (i) neither the IRS nor any other
taxing authority has asserted in writing any claim involving a material
amount of Taxes, or to the Knowledge of the Company, is threatening to
assert any claims involving a material amount of Taxes, against the Company
or any of the Subsidiaries, (ii) neither the Company nor any of the
Subsidiaries has been a member of a consolidated, combined or unitary group
for federal or state income tax purposes that included any member other
than the current members of the consolidated federal income tax group of
which the Company is the common parent, (iii) neither the Company nor any
of the Subsidiaries is or has been a party to any Tax sharing agreement
(except for agreements with Subsidiaries providing for the sharing of
liabilities on a pro rata basis) that will remain in effect and under which
the Company or any such Subsidiary could have any material liability for
Taxes, (iv) there are no liens for
Taxes upon any assets of the Company or any of the Subsidiaries (other than
liens for Taxes not yet due and payable), except for liens which
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect, (v) neither the Company nor any of the
Subsidiaries has agreed or is required to include in income during the
current year or any future taxable period any material adjustment pursuant
to Section 481 of the Code (or similar provisions of foreign, state or
local law) by reason of a change in accounting method or otherwise, and the
IRS has not proposed any such adjustment, and (vi) complete copies of all
income Tax Returns filed by the Company and each of the Subsidiaries for
taxable periods commencing on or after January 1, 1993 have been provided
to, or made available to, the Purchaser.
2.12. Employee Benefit Plans. (a) Schedule 2.12 sets forth a
complete and correct list of (i) all of the Compensation and Benefit Plans
that are intended to qualify with the applicable requirements of Article
401(a) of the Code and (ii) all employment, severance and change of control
agreements with employees, former employees, officers, former officers,
directors, former directors or the beneficiaries of any of the foregoing or
pursuant to which the Company or any Subsidiary has or may have any
liability in excess of $200,000. Except with respect to any Multi-Employer
Plans, the Company has heretofore delivered or made available to the
Purchaser true and complete copies of all Compensation and Benefit Plans
and any amendments thereto (or if a Compensation and Benefit Plan is not in
written form, a written description thereot), any related trust or other
funding agreement or vehicle, the most recent reports or summaries required
under ERISA or the Code and, with respect to each Compensation and Benefit
Plan intended to qualify under Article 401 of the Code, the most recent
determination letter received from the IRS.
(b) Except where the failure to do so could not individually or
in the aggregate reasonably be expected to have a Material Adverse Effect,
the Company and each Subsidiary have performed all obligations required to
be performed by them under each Compensation and Benefit Plan and neither
the Company nor any Subsidiary is in default under or in violation of, any
Compensation and Benefit Plan. Except with respect to any Multi-Employer
Plans or as otherwise set forth on Schedule 2.12, each Compensation and
Benefit Plan has in all material respects been established, operated,
maintained and administered, as the case may be, in accordance with its
terms and in compliance with all applicable laws, statutes, orders, rules
and regulations, including, but not limited to, ERISA and the Code.
(c) With respect to each Compensation and Benefit Plan which is a
"multi-employer plan" within the meaning of Sections 3(37) or 4001 (a)(3)
of ERISA (a "Multi-Employer Plan"): (i) neither the Company, any Subsidiary
nor any ERISA Affiliate has been required to contribute to, or incurred any
withdrawal liability (within the meaning of Section 4201 of ERISA) to any
such plan which liability has not been
fully paid as of the date hereof, (ii) as of the Closing Date, the Company,
each Subsidiary and each ERISA Affiliate will not have completely or
partially withdrawn from any such plan and will not be subject to any
withdrawal liability as described in Section 4201 of ERISA for withdrawals
that have occurred on or prior to the Closing Date (including, without
limitation, any withdrawal deemed to have occurred as a result of the
transactions contemplated by this Agreement); (iii) no event has occurred
which could result in a "partial withdrawal" under Section 4205 of ERISA
with respect to any such plan and neither the Company, Parent, any
Subsidiary nor any ERISA Affiliate has any contingent liability under
Section 4204 of ERISA; (iv) if the Company, each Subsidiary and each ERISA
Affiliate were to incur a complete withdrawal (as described in Section 4203
of ERISA) from each such plan as of the Closing Date, no withdrawal
liability, as determined under Section 4201 of ERISA, could be incurred
with respect to all such plans that would individually or in the aggregate
have a Material Adverse Effect; and (v) neither the Company, any Subsidiary
nor any ERISA Affiliate has knowledge that any such plan fails to qualify
under Section 401 (a) of the Code, has been terminated, is insolvent or is
in reorganization within the meaning of Part 3 of Subtitle E of Title IV of
ERISA and, to the knowledge of the Company, no condition exists which
presents a risk of any such plan being terminated, becoming insolvent or
going into reorganization.
(d) Neither the Company, any Subsidiary, nor any ERISA Affiliate
presently sponsors, maintains or contributes to, nor is the Company, any
Subsidiary or any ERISA Affiliate required to sponsor, maintain or
contribute to, nor has the Company, any Subsidiary or any ERISA Affiliate
(other than where the Company, such Subsidiary or such ERISA Affiliate has
no continuing material obligation or liability) ever sponsored, maintained,
contributed to or been required to contribute to, any Compensation and
Benefit Plan (other than a Multi-Employer Plan) which is an "employee
pension benefit plan" within the meaning of Article 3(2) of ERISA and which
is subject to Title IV of ERISA.
(e) Neither the Company, any Subsidiary nor any ERISA Affiliate
(i) maintains or contributes to any Compensation and Benefit Plan which
provides, or has any liability to provide, life insurance, medical or
dental benefits to any employee upon his retirement or termination of
employment, except as may be required by Article 4980B of the Code or as
would not reasonably be expected to have individually or in the aggregate a
Material Adverse Effect; or (ii) has ever represented to, promised or
contracted with (whether in oral or written form) any employee (either
individually or to employees as a group) that such employee would be
provided with life insurance, medical or dental benefits upon retirement or
termination of employment, except to the extent required by Article 4980B
of the Code or as would not reasonably be expected to have individually or
in the aggregate a Material Adverse Effect.
(f) There are no pending, or to the Knowledge of the Company,
threatened claims by or on behalf of any Compensation and Benefit Plan by
any employee or beneficiary covered under any such Compensation and Benefit
Plan, or otherwise involving any such Compensation and Benefit Plan, that
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect.
(g) Except as otherwise set forth on Schedule 2.12(g), there is
no Commitment covering any employee or former employee of the Company or
any Subsidiary that, individually or in the aggregate, would be reasonably
likely to give rise to the payment of any amount that would result in a
material loss of tax deductions pursuant to the terms of Article 162(m) of
the Code.
(h) Except where the failure to do so could not individually or
in the aggregate reasonably be expected to have a Material Adverse Effect,
the Company and each Subsidiary (i) is in compliance with all applicable
federal, state and local laws, rules and regulations (domestic and foreign)
respecting employment, employment practices, labor, terms and conditions of
employment and wages and hours, in each case, with respect to employees;
(ii) has withheld all amounts required by Law or by Commitment to be
withheld from the wages, salaries and other payments to employees; (iii) is
not liable for any arrears of wages or any taxes or any penalty for failure
to comply with any of the foregoing; and (iv) is not liable for any payment
to any trust or other fund or to any Governmental Entity with respect to
unemployment compensation benefits, social security or other benefits for
employees.
(i) No work stoppage or labor strike against the Company or any
Subsidiary by employees is pending, or to the knowledge of the Company,
threatened. Except for such matters that could not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect, neither
the Company nor any Subsidiary (i) is involved in, or to the knowledge of
the Company, threatened with any labor dispute, grievance, or Litigation
relating to labor matters involving any employees, including, without
limitation, violation of any federal, state or local labor, safety or
employment laws (domestic or foreign), charges of unfair labor practices or
discrimination complaints or (ii) has engaged in any unfair labor practices
within the meaning of the National Labor Relations Act or the Railway Labor
Act.
(j) Except as set forth in Schedules 2.9, 2.12 and 2.15, the
execution, delivery and performance by the Company of the transactions
contemplated by this Agreement and the other Transaction Documents to which
it is a party will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any Compensation
and Benefit Plan, trust or loan that will or may result in any payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with
respect to any employee. No payment or benefit which will or may be made by
the Company, any Subsidiary, the Purchaser or any of their respective
Affiliates in connection with the transactions contemplated by this
Agreement or any of the other Transaction Documents with respect to any
employee will be characterized as an "excess parachute payment" within the
meaning of Article 28OG(b)(1) of the Code.
2.13. Intellectual Property. (a) Except as disclosed on Schedule
2.13(a), (1) the Company or a Subsidiary owns or has the right to use
pursuant to a valid license, sub-license or other agreement all of the
Intellectual Property used by it, except where the absence of any thereof
could not individually or in the aggregate reasonably be expected to have a
Material Adverse Effect and (ii) neither the Company nor any of the
Subsidiaries has interfered with, infringed upon or misappropriated any
Intellectual Property rights of third parties, except for interferences,
infringements and misappropriations which could not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect, and
neither the Company nor any Subsidiary has received any written claim,
demand or notice alleging any such interference, infringement or
misappropriation. To the Knowledge of the Company, no third party has
interfered with, infringed upon or misappropriated any Intellectual
Property rights of the Company or any Subsidiary, except for interferences,
infringements and misappropriations which could not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect.
(b) The disclosure contained under the heading "IMPACT OF YEAR
2000" in the Company's Annual Report on Form 10-K for the period ended
December 3 1, 1998 is true, correct and complete in all material respects.
2.14. Compliance with Laws. (a) Except as set forth on Schedule
2.14(a) or as disclosed in the SEC Reports, the Company and the
Subsidiaries are in compliance in all material respects with all Laws, and
since January 1, 1996, neither the Company nor any Subsidiary has received
any notice of any alleged violation of Law applicable to it. The Company
and the Subsidiaries have all material licenses, franchise permits,
consents, registrations, certificates, and other governmental or regulatory
permits, authorizations or approvals required for the operation of the
business as presently conducted and for the ownership, lease or operation
of the Company's and its Subsidiaries' properties (collectively,
"Licenses"). Except as set forth on Schedule 2.14(a), the Company and the
Subsidiaries have all Licenses, and all of such Licenses are valid and in
full force and effect, and the Company and the Subsidiaries have duly
performed and are in compliance in all material respects with all of their
obligations under such Licenses. No event has occurred with respect to any
of such Licenses that allows, or after notice or lapse of time or both
would allow, the suspension, limitation, revocation, non-renewal or
termination thereof that, individually or in the aggregate, has had or
would reasonably be expected to have a Material Adverse Effect, and no
terminations of any License or proceedings to
suspend, limit, revoke or terminate any License have been threatened. The
Company has made available for inspection by the Purchaser copies of all
material correspondence between the Company or any of the Subsidiaries, on
the one hand, and the SEC on the other hand.
(b) Without limiting the generality of foregoing, except as set
forth on Schedule 2.14(b), the Company, the Subsidiaries and, to the extent
the Company or any Subsidiary would have any liability with respect
thereto, each of their respective employees, are in compliance in all
material respects with all material Laws relating to consumer financing and
leasing (including, without limitation, the financing and leasing of
vehicles and other consumer products), including, without limitation, (i)
the rules and regulations of any Governmental Entity, (ii) any applicable
federal, state, local or foreign Laws, and any rules or regulations
promulgated thereunder pertaining to unlawful discrimination in lending
(including, without limitation, equal credit opportunity, retail
installment sales, and fair credit reporting), truth-in-lending, truth-in-
leasing or consumer credit (including, without limitation, the Federal
Consumer Credit Protection Act, Federal Truth-in-Lending Act and
Regulation Z thereunder, and the Federal Equal Credit Opportunity Act and
Regulation B thereunder), and (iii) all applicable usury and interest
limitations Laws.
(c) Neither the Company nor any Subsidiary has offered or agreed
to offer anything of value to any government official, political party or
candidate for governmental or political office (or any person that the
Company knows or has reason to know, will offer anything of value to any
governmental official, political party or candidate for governmental or
political office), such that the Company or any of the Subsidiaries have
violated the Foreign Corrupt Practices Act of 1977, as amended.
(d) To the Knowledge of the Company:
(i) Except as set forth on Schedule 2.14(d), the Company and
the Subsidiaries have at all times been operated, and are currently
operated, in compliance in all material respects with all Environmental
Laws.
(ii) Except as set forth on Schedule 2.14(d), the Company
and the Subsidiaries (1) have obtained, and are in compliance in all
material respects with, all material permits, licenses, authorizations,
registrations and other governmental consents required by Environmental
Laws ("Environmental Permits"), and (2) have made all appropriate filings
for the issuance or renewal of such Environmental Permits (other than in
connection with the transactions contemplated hereby).
(iii) Except as set forth on Schedule 2.14(d), all of the
Owned Real Property and Leased Real Property (collectively, "Real
Property") is free of any
material contamination arising out of, relating to, or resulting from the
Release by the Company or any of the Subsidiaries of any Hazardous
Substances, and there has been no material Release at any time of any
Hazardous Substances at, on, about, under or within any Real Property or,
to the Knowledge of the Company, any real property formerly owned, leased,
operated or controlled by the Company or any of the Subsidiaries or any
predecessor of any of the foregoing (other than pursuant to and in
accordance with Environmental Permits).
(iv) Except as set forth on Schedule 2.14(d), there are no
material claims, notices (including, without limitation, notices that the
Company or any of the Subsidiaries (or any predecessors thereof) is or may
be a potentially responsible person or otherwise liable in connection with
any waste disposal or other site containing Hazardous Substances), civil,
criminal or administrative actions, suits, hearings, investigations,
inquiries or proceedings pending or, to the Knowledge of the Company,
threatened that are based on or related to any Environmental Matters
(including, without limitation, the failure to comply with any
Environmental Law or the failure to have, or to comply with, any
Environmental Permits).
(v) Except as set forth on Schedule 2.14(d), there are no
present or past conditions, events, circumstances, facts, activities,
practices, incidents, actions, omissions or plans: (1) that are reasonably
likely to interfere with or prevent, in any material respect, continued
compliance by the Company or any of the Subsidiaries with Environmental
Laws or the requirements of Environmental Permits, or (2) that are
reasonably likely to give rise to any material liability under any
Environmental Laws, or (3) that are reasonably likely to form the basis of
any material claim, action, suit, proceeding, hearing, investigation or
inquiry against or involving the Company or any Subsidiary based on or
related to any Environmental Matter.
(vi) Except as set forth on Schedule 2.14(d), there are no
material Releases or material liabilities arising out of, relating to or
resulting from any underground or aboveground storage tanks, incinerators
or surface impoundments currently or formerly at, on, about, under or
within any Real Property.
(vii) Except as set forth on Schedule 2.14(d), neither the
Company nor any of the Subsidiaries (nor any predecessors thereof) have
used any waste disposal site, or otherwise disposed of, transported, or
arranged for the transportation of, any Hazardous Substances to any place
or location that is now, or was in the past, listed on the National
Priorities List of Superfund Sites or any analogous state lists.
(viii) Except as set forth on Schedule 2.14(d), no
Encumbrance other than Permitted Encumbrances exists, and no condition
exists which could reasonably be expected to result in the filing of an
Encumbrance other than Permitted
Encumbrances, against any Real Property under any Environmental Law or
relating to any Environmental Matter.
(e) The Company has delivered or made available to the Purchaser
true and complete copies and results of any reports, studies, analyses,
tests, or monitoring in the possession of the Company or any of the
Subsidiaries, in each case relating to any Environmental Matters with
respect to the Company or any of the Subsidiaries (including without
limitation any Hazardous Substances at, on, about, under or within any Real
Property or any real property formerly owned, leased, operated or
controlled by the Company or any of the Subsidiaries or any predecessor of
any of the foregoing).
2.15. Commitments. Schedule 2.15 sets forth a complete and
correct list of each written and, if material, oral contract, agreement,
understanding, arrangement and commitment of any nature whatsoever,
including all amendments thereof and supplements thereto ("Commitments") of
the following types to which the Company or any Subsidiary is a party or by
or to which the Company or any Subsidiary or any of their properties may be
bound or subject as of the date hereof. (i) Commitments or related series
of Commitments which are service contracts or equipment leases involving
payments by the Company or any Subsidiary of more than $1,000,000 per year,
(ii) Commitments containing covenants purporting to limit the freedom of
the Company or any Subsidiary to compete in any line of business in any
geographic area or to hire any individual or group of individuals, (iii)
Commitments or related series of Commitments relating to capital
expenditures in excess of $ 1,000,000, (iv) (x) Commitments or related
series of Commitments relating to the lease or sublease of or sale or
purchase of personal property involving any annual expense or price in
excess of $ 1,000,000, and (y) each material lease or sublease of real
property or Commitments relating to the sale or purchase of material real
property, (v) Commitments relating to indentures, mortgages, promissory
notes, loan agreements, guarantees, letters of credit or other agreements
or instruments of the Company or any Subsidiary or Commitments for or
relating to the borrowing or the lending of money by or to the Company or
any Subsidiary in excess of $ 100,000 or providing for any right of first
refusal or the creation of any Encumbrance upon any of the assets or
properties of the Company or any Subsidiary, (vi) Commitments with or
relating to any automobile or other vehicle manufacturer, including,
without limitation, franchise and other dealership agreements, (vii)
Commitments relating to the acquisition or disposition of any operating
business or the capital stock of any Person that has not been consummated
or that has been consummated but contains representations, warranties,
covenants, guarantees, indemnities or other obligations that remain in
effect, (viii) Commitments relating to any material Litigation, (ix)
Commitments under which the Company or any Subsidiary agrees to indemnify
any Person, (x) Commitments in respect of any joint venture, partnership or
other similar arrangement, (xi) Commitments with any Governmental Entity;
(xii) other Commitments or related series of
Commitments which involve payments of over $ 1,000,000, and (xiii) other
Commitments which are otherwise material. All such Commitments are valid
and binding obligations of the Company and each Subsidiary, as the case may
be, and, to the Knowledge of the Company, are the valid and binding
obligation of each other party thereto except such Commitments which if not
so valid and binding individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect. Neither the Company nor any
Subsidiary nor, to the Knowledge of the Company, any other party is in
material violation of or in material default in respect of, nor has there
occurred an event or condition which with the passage of time or giving of
notice (or both) would constitute a material default under, any such
Commitment which in the judgment of the management of the Company would
adversely affect the Company's or any Subsidiary's ability to retain, renew
or otherwise continue the Company's or Subsidiary's contractual
relationship with the parties thereto, except for the loss of contractual
relationships which individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.
2.16. Acquisitions. Schedule 2.16 sets forth a list of all
acquisitions (by purchase of assets, purchase of stock, merger or
otherwise) of any Person or any businesses, business lines or material
assets pending or consummated or agreed to be consummated by the Company or
any of the Subsidiaries since December 31, 1998 or earlier to the extent
the Company or any Subsidiary has continuing liabilities or obligations
with respect to any acquisition. For each such acquisition, Schedule 2.16
also lists the consideration remaining to be paid in connection with such
acquisition (and the form or forms of such consideration), the amount and a
summary of the terms of any earn-out, claw-back, make-whole or similar
provision, the amount and a summary of the terms of any note payable issued
by the Company or any Subsidiary in connection therewith and the amount of
any consideration held in escrow on the date hereof. All continuing
material liabilities or other material obligations of the Company or any
Subsidiary in connection with any acquisition (including, without
limitation, arising out of indemnification, the granting of registration
rights or the terms of any earn-out or make-whole provisions) are
summarized on Schedule 2.16. In connection with any acquisition consummated
by the Company or any Subsidiary in which part or all of the consideration
consisted of shares of capital stock or any other securities (including,
without limitation, capital stock of the Company), such shares of capital
stock or other securities were issued in compliance with the registration
requirements of all applicable federal and state securities laws.
2.17. Brokers or Finders; Opinion of Financial Advisor. (a)
Except pursuant to the letter agreement with X.X. Xxxxxx & Co., dated March
15, 1999, upon the consummation of the transactions contemplated by this
Agreement, no agent, broker, investment banker or other Person is or will
be entitled to any broker's or finder's fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement or the other Transaction Documents based on
arrangements made by or on behalf of the Company or any of the
Subsidiaries, or any Affiliate of any of the foregoing. A complete and
correct copy of all engagement letters and any other Commitment between the
Company or any Subsidiary and X.X. Xxxxxx & Co. or any other Person
relating to the foregoing have previously been delivered to the Purchaser.
(b) The Company has been advised in writing by its financial
advisor, X.X. Xxxxxx & Co., that in its opinion, as of the date hereof, the
transactions contemplated by this Agreement and the other Transaction
Documents are fair to the Company and its stockholders from a financial
point of view.
2.18. Proxy Statement. Any proxy statement to be sent to the
stockholders of the Company in connection with a meeting of the
stockholders of the Company in connection with the transactions
contemplated by this Agreement and the other Transaction Documents (the
"Stockholders Meeting"; such proxy statement as amended or supplemented is
referred to herein as the "Proxy Statement") will comply as to form in all
material respects with Article 14(a) of the Exchange Act and the rules
promulgated thereunder, and it shall not, on the date the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to
stockholders or at the time of the Stockholders Meeting, contain any untrue
statement of a material fact, or, in light of the circumstances under which
made, omit to state any material fact necessary in order to make the
statements made therein not false or misleading. If at any time prior to
the Second Closing any event relating to the Company or any of the
Subsidiaries or any of their respective Affiliates, officers or directors
should be discovered by the Company which is required to be set forth in a
supplement to the Proxy Statement, the Company shall promptly inform the
Purchaser thereof.
2.19. Suppliers. Schedule 2.19 sets forth a list of the Company's
suppliers of $ 1,000,000 or more in materials (other than suppliers of used
cars) or services to the Company and the Subsidiaries taken as a whole
during the twelve month period ended December 31, 1998 ("Major Suppliers").
Since January 1, 1999, there has been no termination, cancellation or
limitation of, or any material adverse modification or change in, the
business relationships of the Company or any of the Subsidiaries with any
Major Supplier.
2.20. Related Party Transactions. Schedule 2.20 sets forth a list
of all transactions and Commitments between or involving the Company or any
of the Subsidiaries, on the one hand, and any Related Party, on the other
hand, engaged in or entered into since December 31, 1996 (including those
initiated prior to such date and continued or continuing following such
date).
2.21. Products. Except as set forth on Schedule 2.21 and except
for any matter with respect to which the Company or any applicable
Subsidiary is indemnified or has the right to be reimbursed by a
financially solvent entity, there are no statements, citations or decisions
by any Governmental Entity stating that any product sold, rented, leased,
designed, distributed or marketed at any time by the Company or any
Subsidiary ("Products") is defective or unsafe or fails to meet any
standards promulgated by any Governmental Entity. Except as set forth on
Schedule 2.21 and except for any matter with respect to which the Company
or any applicable Subsidiary is indemnified or has the right to be
reimbursed by a financially solvent entity, there is no (i) fact relating
to any Product that, to the Knowledge of the Company, may impose upon the
Company or any Subsidiary a duty to recall any Product or a duty to warn
customers of a defect in any Product, (ii) latent or overt design,
manufacturing or other defect in any Product that could reasonably be
expected individually or in the aggregate to have a Material Adverse Effect
or (iii) material liability for warranty claims or returns with respect to
any Product.
2.22. Section 203 of the DGCL; Takeover Statute. The Board of
Directors has taken all actions necessary or advisable so that the
restrictions contained in Section 203 of the DGCL applicable to a "business
combination" (as defined in such Section) will not apply to the execution,
delivery or performance of this Agreement or any of the other Transaction
Documents or the consummation of the transactions contemplated hereby or
thereby. The execution, delivery and performance of this Agreement or any
of the other Transaction Documents and the consummation of the transactions
contemplated hereby or thereby will not cause to be applicable to the
Company any "fair price," "moratorium," "control share acquisition" or
other similar antitakeover statute or regulation enacted under state or
federal laws.
2.23. Disclosure. Neither this Agreement nor any other
Transaction Document, nor any schedule or exhibit hereto or thereto, nor
any certificate furnished to the Purchaser by or on behalf of the Company
in connection with the transactions contemplated hereby and thereby,
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company, as
of the date hereof and as of each Closing Date, as follows:
3.1. Acquisition for Investment. The Purchaser is acquiring the
Preferred Stock and the Warrants for its own account, for investment and
not with a view to the distribution thereof within the meaning of the
Securities Act.
3.2. Restricted Securities. The Purchaser understands that (i)
the Preferred Stock and the Warrants will not be registered under the
Securities Act or any state securities laws by reason of their issuance by
the Company in a transaction exempt from the registration requirements
thereof and (ii) shares of the Preferred Stock and the Warrants and the
Shares may not be sold unless such disposition is registered under the
Securities Act and applicable state securities laws or is exempt from
registration thereunder.
3.3. No Brokers or Finders. No agent, broker, investment banker
or other Person is or will be entitled to any broker's or finder's fee or
any other commission or similar fee in connection with the transactions
contemplated by this Agreement or the other Transaction Documents based on
arrangements made by or on behalf of the Purchaser.
3.4. Accredited Investor. Each of IMCG-l and IMCG-11 is an
"accredited investor" (as defined in Rule 501(a) under the Securities
Act).
3.5 Organization. Each of IMCG-l and IMCG-11 is a limited
liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite power and
authority to carry on its business as it is now being conducted.
3.6. Due Authorization. Each of IMCG-l and IMCG-11 has all right,
power and authority to enter into this Agreement and the other Transaction
Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by each of
IMCG-1 and IMCG-11 of this Agreement and the other Transaction Documents to
which it is a party and the consummation by it of the transactions
contemplated hereby and thereby (a) are within its power and authority and
(b) have been duly authorized by all necessary action on the part of such
entity. This Agreement constitutes, and each of the other Transaction
Documents to which it is a party will constitute upon execution and
delivery by each of IMCG-1 and IMCG-11, a valid and
binding agreement of such entity enforceable against such entity in
accordance with their respective terms.
3.7. Consents, No Violations. Neither the execution, delivery or
performance by each of IMCG-l and IMCG-11 of this Agreement and the other
Transaction Documents nor the consummation of the transactions contemplated
hereby or thereby will (a) conflict with, or result in a breach or a
violation of, any provision of the organizational documents of such entity;
(b) constitute, with or without notice or the passage of time or both, a
breach, violation or default, create an Encumbrance, or give rise to any
right of termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration, under (i) any Law, or (ii) any
Commitment of such entity, or to which such entity or any of its assets or
properties is subject, except, with respect to the matters set forth in
clause (ii), for breaches, violations, defaults, Encumbrances, or rights of
termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration, which, individually or in the
aggregate, could not have a material adverse effect on the ability of such
entity to consummate the transactions contemplated hereby; or (c) except
for any required filing under the HSR Act, require any consent, approval or
authorization of, notification to, filing with, or exemption or waiver by,
any Governmental Entity or any other Person on the part of such entity.
3.8. Availability of Funds. The Purchaser has or will have
available at the date due, sufficient funds to pay its obligations under
this Agreement or arising out of its breach. The Purchaser has delivered to
the Company a true and correct copy of the Limited Liability Agreement of
each of IMCG-l and IMCG-11. Each investor in each of IMCG-1 and IMCG-11 is
a financially solvent entity able to meet its obligations as they become
due.
3.9 Due Diligence. Purchaser has such knowledge and experience
in financial and business matters that it is capable of evaluating the
merits and risks of its investment in the Company as contemplated by this
Agreement, and is able to bear the economic risk of such investment for an
indefinite period of time. Purchaser has had the opportunity to ask
questions of and receive answers from representatives of the Company
concerning the terms and conditions of this Agreement and to obtain any
additional information Purchaser desires or deems relevant. Purchaser has
obtained, to the extent it has deemed necessary, professional advice with
respect to the risks inherent in the investment in the Company.
ARTICLE IV
COVENANTS
4.1. Conduct of Business by the Company Pending the Closings. (a)
The Company covenants and agrees that, during the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Initial Closing, unless the Purchaser otherwise agrees in
writing, the Company shall, and shall cause each of the Subsidiaries to,
(i) conduct its business only in the ordinary course and consistent with
past practice; (ii) use reasonable best efforts to preserve and maintain
its assets and properties and its relationships with its customers,
suppliers, advertisers, distributors, agents, officers and employees and
other Persons with which it has significant business relationships; (iii)
use reasonable best efforts to maintain all of the material assets it owns
or uses in the ordinary course of business consistent with past practice;
(iv) maintain insurance in full force and effect substantially comparable
in amount, scope and coverage to that in effect on the date of this
Agreement; (v) use reasonable best efforts to preserve the goodwill and
ongoing operations of its business; (vi) maintain its books and records in
the usual, regular and ordinary manner, on a basis consistent with past
practice; (vii) perform and comply in all material respects with its
Commitments; and (viii) comply in all material respects with applicable
Laws. Except as expressly contemplated by this Agreement or as set forth on
Schedule 4.1, between the date of this Agreement and the Initial Closing,
the Company shall not, and shall cause each of the Subsidiaries not to, do
any of the following without the prior written consent of the Purchaser:
(A) create any Encumbrance other than (i) Permitted Encumbrances
and (ii) Encumbrances securing indebtedness permitted by clause (D) of this
Section 4.1 (a);
(B) (i) except for inventory in the ordinary course of business
or assets in any transaction or series of related transactions with a book
value of less than $50,000, sell, assign, transfer, lease or otherwise
dispose of or agree to sell, assign, transfer, lease or otherwise dispose
of any assets of the Company or any Subsidiary or (ii) cancel any
indebtedness owed to the Company or any Subsidiary except for indebtedness
owed by Persons that are not Affiliates of the Company or its Affiliates in
the ordinary course of business not in excess of $250,000 in the aggregate;
(C) acquire or dispose of (by merger, consolidation, or
acquisition of stock or assets) any Person, business, business line or any
material amount of assets;
(D) (i) incur any additional indebtedness other than (aa)
endorsements of items for collections, (bb) working capital borrowings in
the ordinary course of business, (cc) purchase money indebtedness not to
exceed $50,000 in any single
transaction or series of related transactions, (dd) revolving floor plan
financing arrangements entered into in order to finance the Company's new
and used vehicle inventory or (ee) any other indebtedness incurred in the
ordinary course of business not to exceed $250,000 in the aggregate, or
(ii) make any loans, advances or capital contributions to, or investments
in, any Person other than (x) to a Subsidiary or (y) advances in the
ordinary course of business to Persons that are not Related Parties not
exceeding $ 10,000 to any one such Person;
(E) change any method of accounting or accounting practice used
by the Company or any Subsidiary, other than such changes required by GAAP;
(F) (i) enter into or adopt or amend any existing agreement or
arrangement relating to severance in which annual payments exceed $ 100,000
individually or $300,000 in the aggregate, (ii) enter into or adopt or
amend any existing severance plan in which annual payments exceed $100,000
individually or $300,000 in the aggregate, (iii) enter into or adopt or
amend any Compensation and Benefit Plans or employee agreement in which
annual payments exceed $ 100,000 individually or $300,000 in the aggregate
or (iv) grant any increases in compensation, except compensation increases
for non-executive employees associated with promotions and annual reviews
in the ordinary course of business;
(G) except as set forth in Schedule 2.20, enter into any
transaction or Commitment with any Related Party;
(H) modify, terminate, amend or grant any waiver in respect of
any material Commitment outside of the ordinary course of business, or
enter into any Commitment with any original equipment manufacturer other
than with respect to obtaining a Consent in accordance with Section 4.6;
(I) allow the lapse of any of the Company's or any Subsidiary's
rights of ownership or use of any material Intellectual Property right
except in the ordinary course of business consistent with past practice;
(J) repurchase, redeem or otherwise acquire or exchange any share
of Common Stock or Non-Voting Common Stock or other equity interests;
except for issuances of Common Stock pursuant to the exercise of options to
purchase Common Stock or pursuant to existing Commitments outstanding on
the date hereof, in each case listed on Schedule 2.3, issue or sell any
additional shares of the capital stock of, or other equity interests in,
the Company or any Subsidiary, or securities convertible into or
exchangeable for such shares or other equity interests, or issue or grant
any subscription rights, options, warrants or other rights of any character
relating to shares of such capital stock, such other equity interests or
such securities; or declare, set aside, make or pay any
dividend, or make any distribution, in respect of any shares of capital
stock of the Company;
(K) amend the Company's certificate of incorporation or by-laws,
except with respect to the filing of the Certificates of Designation and
the Certificate of Amendment, or amend any Subsidiary's charter or by-laws
or other organizational documents in any respect materially adverse to the
Company;
(L) make any material change in the Company's or any Subsidiary's
Tax accounting methods, any material new election with respect to Taxes or
any material modification or revocation of any existing election with
respect to Taxes or settle or otherwise dispose of any material Tax audit,
dispute, or other Tax proceeding, without the consent of the Purchaser,
which consent will not be unreasonably withheld or delayed;
(M) take any action that is reasonably likely to result in any of
the representations and warranties set forth in Article 11 becoming false
or inaccurate in any material respect as of any Closing Date; provided,
however, that (i) the suffering of a condition to exist by the Company
shall not be a breach of this Section 4.1(a)(M) and (ii) for purposes of
Section 7.1 this Section 4.1(a)(M) (and Section 4.1(a)(N) as it relates
to this Section 4.1(a)(M)) shall be deemed a representation and warranty
of the Company and not a covenant of the Company; or
(N) agree to take any of the actions restricted by this Section
4. 1.
(b) Except as expressly contemplated by this Agreement or as set
forth on Schedule 4.1, between the Initial Closing and the Second Closing,
the Company shall not and shall cause each of the Subsidiaries not to, take
any of the actions described in clauses (C), (D), (E), (F), (G), (I), (J),
(K) or (L) of Section 4.1 (a) or clause (N) of Section 4.1 (a) as it
relates to such clauses without the prior written consent of the Purchaser.
4.2. No Solicitation. From the date of this Agreement until the
earlier of the termination of this Agreement or the Second Closing, other
than in connection with the transactions contemplated hereby, neither the
Company nor any of the Subsidiaries shall solicit, propose or facilitate
(including by way of providing information regarding the Company or any of
the Subsidiaries or their respective businesses to any Person), directly or
indirectly, any inquiries, discussions, offers or proposals for, continue
or enter into negotiations looking toward, or enter into or consummate any
Commitment or understanding in connection with any offer or proposal
regarding, any purchase or other acquisition of all or any material portion
of the Company and the Subsidiaries taken as a whole, the business or
assets of the Company and the Subsidiaries taken as a whole, or a material
portion of the capital stock of or equity interests in (whether newly
issued or
currently outstanding) the Company or any of the Subsidiaries (other than
with respect to inquires or discussions (but not offers, proposals,
negotiations, or the entering into of Commitments or understandings)
relating to proposed acquisitions by the Company of businesses for which
the Company would use its capital stock as consideration, but only
following the prior consent of the Purchaser), or any merger, business
combination or recapitalization involving the Company or any of the
material Subsidiaries or their respective businesses; and the Company shall
cause the Subsidiaries and the officers, directors, employees,
representatives and agents of the Company and the Subsidiaries
(collectively, "Company Affiliates") to refrain from engaging in any of the
above activities that the Company is restricted from engaging in.
Notwithstanding the foregoing, the parties agree that in the event the
Company receives a Takeover Proposal by any other Person, the Company may
review and act upon such Takeover Proposal solely as it relates to such
transaction and only in the event that the Board of Directors determines in
good faith, after consultation with and based upon the advice of its
financial and outside legal advisors, that failing to review and act upon
such Takeover Proposal would constitute a breach of the Company's
directors' fiduciary duties under applicable Law (a "Company Fiduciary
Out"). A "Takeover Proposal" shall mean an unsolicited inquiry, offer or
proposal relating to the acquisition of all of the capital stock and other
equity interests in the Company, or all or substantially all of the assets
of the Company and its Subsidiaries or the merger of the Company with or
into a third party. The Company agrees to promptly inform the Purchaser of
the identity of any Person making any inquiry, offer or proposal and the
nature and terms of any such inquiry, offer or proposal, including without
limitation any Takeover Proposal, and to keep the Purchaser promptly and
fully informed as to the status thereof. In addition, the Company shall
promptly inform the Purchaser in writing of any decision to exercise a
Company Fiduciary Out. The Company shall, and shall cause the Company
Affiliates to, promptly cease and cause to be terminated, any inquiry,
discussion, offer or proposal of a type described in this Section 4.2 which
was initiated prior to the date hereof and shall abide, and shall cause the
Company Affiliates to abide, by the provisions of the first sentence of
this Section 4.2 with respect to any such inquiry, discussion, offer or
proposal and the maker or makers thereof. The Company shall be liable to
the Purchaser for any breach of the covenants set forth in this Section 4.2
by any Company Affiliate.
4.3. Press Releases; Interim Public Filings. Subject to Section
8.3, the Company shall deliver to the Purchaser complete and correct copies
of all press releases and public filings relating to the Transaction
Documents, the transactions contemplated thereby and Company corporate
matters made between the date hereof and the Initial Closing, and shall
give the Purchaser the reasonable opportunity to review and comment on such
releases and filings, in each case prior to release in the form in which it
will be issued.
4.4. HSR Act. Each of the Purchaser and the Company shall
cooperate with the other in making filings under the HSR Act and shall use
its best efforts to take, or cause to be taken, all actions necessary,
proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including
using its reasonable best efforts to resolve such objections, if any, as
the Antitrust Division of the Department of Justice or the Federal Trade
Commission or state antitrust enforcement or other Governmental Entities
may assert under antitrust Laws with respect to the transactions
contemplated hereby. In the event an action is instituted by any Person
challenging the transactions contemplated hereby as violative of the
antitrust laws, each of the Purchaser and the Company shall use its
reasonable best efforts to resist or resolve such action.
4.5. Proxy Statement; Stockholders Meeting. The Company shall
hold a meeting of its stockholders as soon as practicable after the date
hereof for the purpose of acting upon this Agreement and the transactions
contemplated hereby and by the other Transaction Documents to the extent
requiring stockholder approval, including, without limitation, the issuance
and sale of Preferred Stock and Warrants to the Purchaser in connection
with the Second Purchase, the amendment of the certificate of incorporation
of the Company as set forth on Exhibit 4.5, and the election to the Board
of Directors of a number of persons designated by the Purchaser who will
constitute a majority of the Board of Directors of the Company immediately
following the Second Closing (the "Purchaser Designees"). Unless the Board
of Directors shall have determined in good faith, after consultation with
and based upon the advice of its financial and outside legal advisors, that
doing so would constitute a breach of their fiduciary duty under applicable
Law, the Company shall recommend that its stockholders approve this
Agreement and such transactions. The Board of Directors shall give the
Purchaser prompt written notice of any determination by the Board of
Directors not to recommend this Agreement and such transactions, or any
determination to withdraw, modify or change any such recommendation. The
Company and the Purchaser shall cooperate in the preparation of the Proxy
Statement to be mailed to the Company's stockholders in connection with the
solicitation of their approval of this Agreement and the transactions
described above, and shall use their reasonable best efforts to take, or
cause to be taken, all actions necessary to prepare the Proxy Statement,
file the Proxy Statement with the SEC and respond to any comments it may
have, and distribute the Proxy Statement to the Company's stockholders as
expeditiously as practicable. At least ten days prior to the filing of the
Proxy Statement with the SEC, Purchaser shall notify the Company of the
identity of the Purchaser Designees designated by the Purchaser to serve on
the Board of Directors at and following the Initial Closing. The Company
shall give the Purchaser a reasonable opportunity to review and comment on
the Proxy Statement and related communications with stockholders of the
Company, and the Purchaser shall have the right to consent to any
descriptions of or references to (i) the Purchaser or the Purchaser
Designees or any
Affiliate of any of the foregoing, and (ii) the Transaction Documents and
the other agreements executed concurrently therewith and the transactions
contemplated thereby in the Proxy Statement or such communications, which
consent shall not be unreasonably withheld or delayed.
4.6. Consents; Approvals. The Company shall use its reasonable
best efforts, not requiring the expenditure of a material sum or the making
of some other material accommodation, to obtain all consents, waivers,
exemptions, approvals, authorizations or orders (collectively, "Consents")
(including, without limitation (i) Consents required to avoid any breach,
violation, default, encumbrance or right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or
acceleration set forth on Schedule 2.9 or required to be set forth thereon,
(ii) all Consents pursuant to the Company's or any Subsidiary's financing
documents, including without limitation, all indentures and credit
agreements of the Company or any Subsidiary, and (iii) all United States
and foreign governmental and regulatory rulings and approvals), and the
Company shall make all filings (including, without limitation, all filings
with United States and foreign governmental or regulatory agencies),
required or desirable in connection with the authorization, execution and
delivery of this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, in each
case as promptly as practicable but in any event prior the Second Closing
if permitted to be filed prior thereto; provided, however, no payment
(other than filing fees related to the matters contemplated hereby) or
other accommodation shall be made by the Company in connection with
obtaining any of the foregoing without the Purchaser's prior written
consent. The Purchaser shall cooperate with the Company in obtaining such
Consents. The Company also shall use its reasonable best efforts, not
requiring the expenditure of a material sum or the making of some other
material accommodation, to obtain all necessary state securities laws or
blue sky permits and approvals required to carry out the transactions
contemplated hereby and shall furnish all information as may be reasonably
requested in connection with any such action.
4.7. Listing. The Company shall use its best efforts to continue
to be listed on the NYSE or a national securities exchange during the term
of this Agreement and for so long as any shares of Preferred Stock,
Warrants or any Shares are outstanding. Prior to the Initial Closing, the
Company shall prepare and submit to the NYSE a listing application covering
the shares of Common Stock issuable upon conversion of the Preferred Stock
and exercise of the Warrants and shall obtain approval for the listing of
such shares, subject to official notice of issuance.
4.8. Intentionally Omitted.
4.9. Certificates of Designation; Amendment to Certificate of
Incorporation. The Company shall, prior to or concurrently with the Initial
Closing, cause
the Certificates of Designation to be filed with the Secretary of State of
the State of Delaware. Subject to the approval of the Company's
stockholders at the Stockholder Meeting, the Company shall, prior to or
concurrently with the Second Closing, cause the Certificate of Amendment to
the certificate of incorporation of the Company providing for the amendment
to the certificate of incorporation of the Company referenced in Section
4.5 (the "Certificate of Amendment") to be filed with the Secretary of
State of the State of Delaware.
4. 10. Cooperation. Each of the Purchaser and the Company agrees
to use its reasonable best efforts to take, or cause to be taken, as
promptly as practicable all such further actions as shall be necessary to
make effective and consummate the transactions contemplated by this
Agreement.
4.11. Access to Property; Records. Between the date hereof and
the Second Closing the Company shall give the Purchaser and its employees,
counsel, accountants, members, investors, financing sources and other
authorized representatives reasonable access, during normal business hours,
to the assets, properties, offices and other facilities, Commitments and
books and records of the Company and of the Subsidiaries, and to the
outside auditors of the Company and their work papers relating to the
Company and the Subsidiaries. The parties hereto agree that except as
expressly set forth herein no investigation by the Purchaser or its
representatives shall affect or limit the scope of the representations and
warranties of the Company contained in this Agreement or in any other
Transaction Document delivered pursuant hereto or limit the liability for
breach of any such representation or warranty. Purchaser agrees to hold all
information obtained pursuant to this Section 4.11 confidential pursuant to
the letter agreement, dated February 27, 1999, between the Company and
Penske Capital Partners, L.L.C. (the "Confidentiality Agreement") as if it
were a party thereto in lieu of Penske Capital Partners, L.L.C.
4.12. Reserve Shares. The Company will at all times reserve and
keep available, solely for issuance and delivery upon conversion of the
Preferred Stock or the exercise of the Warrants, the number of shares of
Common Stock and Non-Voting Common Stock from time to time issuable upon
conversion of all shares of the Preferred Stock and exercise of the
Warrants at the time outstanding. All shares of Common Stock and Non-Voting
Common Stock issuable upon conversion of the Preferred Stock or the
exercise of the Warrants shall be duly authorized and, when issued upon
such conversion or exercise, shall be validly issued, fully paid and
nonassessable.
4.13. Notice of Breach. From the date hereof through the Second
Closing, as promptly as practicable, and in any event not later than two
business days after senior management of the Company becomes aware thereof,
the Company shall provide the Purchaser with written notice of (a) any
representation or warranty of the Company
contained in this Agreement or any other Transaction Document being untrue
or inaccurate in any material respect at any time from the date hereof to
the Second Closing, or (b) any failure of the Company to comply with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by the Company under this Agreement or any other Transaction
Document; provided, however, that (i) any breach of this Section 4.13 shall
be deemed to be a breach of a representation and warranty of the Company
and not a covenant of the Company and (ii) the delivery of any notice
pursuant to this Section 4.13 shall not limit or otherwise affect the
remedies available to the Purchaser, or modify in any way any disclosure
made in this Agreement or any other Transaction Document or the schedules
hereto or thereto as of the date hereof.
4.14. Transfer Taxes. The Company shall be responsible for
liability with respect to any transfer, stamp or similar Taxes which may be
payable in connection with the execution, delivery and performance of this
Agreement including, without limitation, any such Taxes with respect to the
issuance of the Preferred Stock, the Warrant or the Shares.
4.15. Indemnification. From and after the Initial Closing to the
sixth year anniversary of the Initial Closing, except for amendments or
modifications required by Law, the Company shall not amend or modify any
rights to indemnification now existing in favor of the present and former
directors, officers or employees of the Company and its Subsidiaries
provided in the certificate of incorporation and by-laws of the Company or
any Subsidiary in a manner adverse to any such director, officer or
employee, and such parties shall be third party beneficiaries of this
Section 4.15.
4.16. Certain Limitations. Notwithstanding anything to the
contrary contained in this Article IV, a covenant of the Company contained
in this Article IV shall be deemed breached during the period following the
Initial Closing only to the extent the action or omission giving rise to
such potential breach (i) is not authorized, approved or recommended by the
Chief Executive Officer of the Company and (ii) is authorized or approved
by a majority of the members of the Board of Directors not designated by
the Purchaser pursuant to the Stockholders Agreement or otherwise (the
"Independent Directors").
4.17. Acquisition Entities. The Company will cause each entity
over which the Company or a Subsidiary has operational control pursuant to
a management agreement or pending acquisition agreement to not take any
action that would constitute a breach of any covenant of the Company under
this Agreement if such entity were a Subsidiary to the extent it may do so
under the applicable management agreement or acquisition agreement.
ARTICLE V
CONDITIONS
5.1. Conditions to Obligations of the Purchaser and the Company.
(a) The respective obligations of the Purchaser and the Company to
consummate the Initial Purchase and the Second Purchase shall be subject to
the satisfaction or waiver at or prior to the Initial Closing (in the case
of the Initial Purchase) or the Second Closing (in the case of the Second
Purchase) of each of the following conditions:
(i) No statute, rule or regulation or order of any court or
administrative agency shall be in effect which prohibits the
consummation of the transactions to be consummated at such
Closing;
(ii) Any waiting period (and any extension thereof) under
the HSR Act applicable to this Agreement and the transactions
contemplated hereby shall have expired or been terminated; and
(iii) The Consents set forth on Exhibit 5.1(a) (iii) shall
have been obtained or made by the Company.
(b) The respective obligations of the Purchaser and the Company
to consummate the Second Purchase shall be subject to the satisfaction or
waiver at or prior to the Second Closing of the following conditions:
(i) The issuance and sale of the Preferred Stock and the
Warrants to the Purchaser, the amendment to the certificate of
incorporation of the Company referenced in Section 4.5 and the
election to the Board of Directors of the Purchaser Designees
shall have been approved and adopted by the requisite vote of the
stockholders of the Company in accordance with applicable Law,
the applicable rules of the NYSE, unless the NYSE shall have
waived such requirement, and the Company's certificate of
incorporation and by-laws; and
(ii) The Consents set forth on Exhibit 5.1(b) (ii) shall
have been obtained or made by the Company.
5.2. Conditions to Obligations of the Purchaser. (a) The
obligation of the Purchaser to consummate the Initial Purchase and the
Second Purchase shall be subject to the satisfaction or waiver at or prior
to the Initial Closing (in the case of the Initial Purchase) or the Second
Closing (in the case of the Second Purchase) of each of the following
conditions:
(i) Each of the representations and warranties of the
Company contained in this Agreement shall be true and correct
(disregarding for this purpose all references in such
representations and warranties to any materiality, Material
Adverse Effect or Knowledge qualifications) as of the Initial
Closing (except to the extent such representations and warranties
are made as of a particular date, in which case such
representations and warranties shall have been true and correct
in all material respects as of such date), except for failures to
be true and correct which individually or in the aggregate would
not reasonably be expected to have a Material Adverse Effect
(and, for purposes of the Second Closing, this condition shall be
automatically deemed to be satisfied unless both (A) the Company
had Knowledge on or prior to the Initial Closing of matters that
would result in such representations and warranties failing to be
true and correct as of the Initial Closing except for such
failures to be true and correct which individually or in the
aggregate would not have a Material Adverse Effect, and (B) the
Purchaser did not have actual knowledge of such failures as of
the Initial Closing or the Purchaser had such knowledge and
advised the Company in writing and such failures were not waived
by the Purchaser in connection with waiving the satisfaction of
this condition at the Initial Closing (such failures to be true
and correct complying with both of clauses (A) and (B) of this
clause (i), "Second Closing Failures"); and only Second Closing
Failures which continue to fail to be true and correct as of the
Second Closing shall be considered in determining whether this
condition is satisfied at the Second Closing)),
(ii) The Company in all material respects shall have
performed, satisfied and complied with each of its covenants and
agreements (provided that in the case of the Second Closing such
covenants and agreements shall not include those contained in
Sections 4.3, 4.7, 4.9, 4.13, 4.14 and 4.15 and the first
sentence of Section 4.12, subject to Section 4.16) set forth in
this Agreement to be performed, satisfied and complied with prior
to or at such Closing;
(iii) The Company shall have delivered to the Purchaser an
officer's certificate certifying as to the Company's compliance
with the conditions set forth in clauses (i) and (ii) of this
Section 5.2(a);
(iv) The Significant Shareholders and the Company shall have
executed and delivered an agreement in the form of Exhibit
5.2(a) (iv) (the "Stockholders Agreement"), and the Stockholders
Agreement shall be in full force and effect;
(v) The Company shall have executed and delivered a
Registration Rights Agreement in the form of Exhibit 5.2(a)(v)
(the "Registration
Rights Agreement"), and the Registration Rights Agreement shall
be in full force and effect;
(vi) The Certificate of Designation shall have been duly
filed with the Secretary of State of the State of Delaware and
shall be in full force and effect;
(vii) The Shares initially issuable upon conversion or
exercise, as the case may be, of the Preferred Stock and the
Warrants shall have been duly authorized and reserved for
issuance and such Shares shall have been listed on the NYSE,
subject to official notice of issuance;
(viii) The Purchaser shall have received at the Initial
Closing an opinion of Xxxxxxx Xxxx & Xxxxxxxxx, outside counsel
to the Company, in the form of Exhibit 5.2(a)(viii); and
(ix) In the case of the Initial Closing only, except to the
extent set forth on Schedule 2.6, there shall not have occurred
after December 31, 1998 any change or development or series of
changes or developments (including without limitation as a result
of any change in the Law) which has resulted in or could
reasonably be expected to result individually or in the aggregate
in a Material Adverse Effect.
(b) In addition to the conditions set forth in paragraph (a)
above, the obligation of the Purchaser to consummate the Second Purchase
shall be subject to the satisfaction or waiver at or prior to the Second
Closing of the following conditions:
(i) the Certificate of Amendment shall have been duly filed
with the Secretary of State of the State of Delaware and shall be
in full force and effect, and the certificate of incorporation of
the Company shall not have been otherwise amended, modified or
waived, and
(ii) each of the representations and warranties of the
Company contained in Section 2.4 of this Agreement shall be true
and correct (disregarding for this purpose all references in such
representations and warranties as to materiality) as of the
Initial Closing, except for (i) failures to be true and correct
which individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect and (ii) failures to
be true and correct which (A) were known to the Purchaser as of
the Initial Closing, (B) were not disclosed in writing by the
Purchaser to the Company, and (C) could have been asserted by the
Purchaser as a basis for the failure of the condition set forth
in Section 5.2(a)(i).
5.3. Conditions to Obligations of the Company. The obligation of
the Company to consummate the Initial Purchase and the Second Purchase
shall be subject to
the satisfaction or waiver at or prior to the Initial Closing (in the case
of the Initial Purchase) or the Second Closing (in the case of the Second
Purchase) of each of the following conditions:
(a) Each of the representations and warranties of both of IMCG-I
and IMCG-II contained in this Agreement shall be true and correct
(disregarding for this purpose all references in such representations and
warranties to any materiality, material adverse effect or knowledge
qualifications) as of such Closing (except to the extent such
representations and warranties are made as of a particular date, in which
case such representations and warranties shall have been true and correct
in all material respects as of such date), except for failures to be true
and correct which individually or in the aggregate would not reasonably be
expected to have a material adverse effect on the ability of the Purchaser
to fulfill its obligations hereunder;
(b) Both of IMCG-I and IMCG-II in all material respects shall
have performed, satisfied and complied with each of its covenants and
agreements set forth in this Agreement to be performed, satisfied and
complied with prior to or at such Closing, disregarding for this purpose
all references in such covenants and agreements to any materiality or
similar qualifications;
(c) Both of IMCG-I and IMCG-II shall have delivered to the
Company an officer's certificate certifying as to the Purchaser's
compliance with the conditions set forth in clauses (a) and (b) of this
Section 5.3; and
(d) Xxxxx X. Penske shall be serving as the Chief Executive
Officer of the Company as of and since the consummation of the Initial
Closing and as of the Second Closing.
ARTICLE VI
TERMINATION
6.1. Termination. This Agreement may be terminated at any time
prior to the Second Closing, notwithstanding approval thereof by the
stockholders of the Company (other than as set forth in clause (e) below),
upon written notice of such termination by the terminating party to the
other party setting forth the basis for such termination:
(a) by mutual written consent of the Company and the Purchaser at
any time prior to the Closing; or
(b) by either the Purchaser or the Company if the Second Closing
shall not have been consummated by December 31, 1999 (provided that the
right to terminate this Agreement under this Section 6.1(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Second
Closing to occur on or before such date); or
(c) by either the Purchaser or the Company if a court of
competent jurisdiction or governmental, regulatory or administrative agency
or commission shall have issued a nonappealable final order, decree or
ruling or taken any other action having the effect of permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement; or
(d) by the Purchaser or the Company, (i) if any representation or
warranty of the other set forth in this Agreement shall be untrue in any
material respect when made to the extent that such first party did not have
actual knowledge of such breach as of the date of this Agreement, or (ii)
upon a breach in any material respect of any covenant or agreement on the
part of the other set forth in this Agreement, in each case which would
constitute a failure of the condition to Closing of the first party (either
(i) or (ii) above being a "Terminating Breach"); provided, that, if such
Terminating Breach is curable within ten business days after notice of a
party's intent to terminate this Agreement, through the exercise of
reasonable efforts, and for so long as the other party continues to
exercise such reasonable efforts during such ten business day cure period,
the termination shall be effective immediately following notice and such
ten business day cure period and only if the Terminating Breach is not
cured as of such time; or
(e) (i) by the Company in the event of the exercise by the
Company of a Company Fiduciary Out, but only if the Board of Directors has
accepted a Takeover Proposal (following valid exercise of a Company
Fiduciary Out) prior to the approval by the stockholders of this Agreement
and the transactions described in Section 4.5 at the Stockholder Meeting or
(ii) by the Purchaser (x) following the thirtieth day following the
exercise by the Company of a Company Fiduciary Out if the Company has not
ceased all communications with the applicable third party or third parties
regarding a Takeover Proposal or (y) following the acceptance by the
Company of a Takeover Proposal; provided, that the Company agrees that it
shall not exercise a Company Fiduciary Out more than once with respect to
any third party or group of third parties (or any Affiliate of any of the
foregoing);
(f) by either the Company or the Purchaser in the event that the
stockholders of the Company fail to approve this Agreement and the
transactions described in Section 4.5 at the Stockholder Meeting, or by the
Purchaser if the Company's Board of Directors shall fail to recommend that
the stockholders of the Company approve this Agreement and such
transactions, or withdraw, modify or change such
recommendation in a manner adverse to the Purchaser, or shall have
recommended to the stockholders of the Company an Alternative Transaction,
or if the Board of Directors has resolved to do any of the foregoing; or
(g) by the Company on the 90th day following the date of written
notice from the Antitrust Division of the Department of Justice or the
Federal Trade Commission that such entity will seek to enjoin the
transactions contemplated by this Agreement absent an agreement to divest
certain assets of either the Purchaser or the Company, unless the Purchaser
or the Company has agreed to divest assets in accordance with such notice.
6.2. Effect of Termination; Termination Fee. In the event of the
termination of this Agreement pursuant to Section 6.1, this Agreement
shall forthwith become void and there shall be no liability on the part of
any party hereto except as set forth in this Section 6.2, provided that
Sections 7.2, 7.4, 8.3, 8.8, 8.13, 8.14 and 8.15 and this Section 6.2 and
the last sentence of Section 4.11 shall survive any termination of this
Agreement. In addition, in the event of a termination of this Agreement
pursuant to Section 6.1(d)(ii) as a result of a breach by the Company of
the covenants or agreements contained in Xxxxxxx 0, xxxxxxx (X), (X), (X),
(X), (X), (X), (X), (X) or (L) of Section 4.1(a) or clause (N) of Section
4.1(a) as it relates to such clauses, Sections 4.2, 4.4, 4.5, 4.6, or 4.
10, or the second sentence of Section 4.12 (but in any such case, to the
extent such breach occurs prior to the Initial Closing, and only to the
extent the action or omission underlying such breach is either authorized
or approved by the Board of Directors or is an action or omission primarily
of the Company, and not of any Subsidiary) in the event the Purchaser is
the terminating party or Section 6.1(e) or Section 6.1(f) regardless of
the terminating party, the Company shall pay to the Purchaser within five
business days following the date of termination $4,000,000 in cash plus the
Purchaser Expenses in an amount not to exceed $750,000, which payments,
together with any rights of the Purchaser contemplated by Section 7.4,
shall constitute the sole and exclusive remedy of Purchaser in the event of
such a termination. In the event of any other termination by the Purchaser
pursuant to Section 6.1(d), the Company shall pay the Purchaser the
Purchaser Expenses in an amount not to exceed $750,000 within five business
days following the date of termination. Following any termination of this
Agreement by the Company with respect to which the Purchaser is not
entitled to receive the $4,000,000 termination payment and so long as at
the time of such termination the Purchaser had the right to terminate this
Agreement pursuant to Section 6.1(d), the Company shall, without
duplication, pay the Purchaser the Purchaser Expenses in an amount not to
exceed $750,000 within five business days following the date of
termination. With respect to any breach of this Agreement by either party,
the other party shall have the right, which each of the parties hereto
hereby acknowledges and accepts, to obtain specific performance of this
Agreement and injunctive or other equitable relief to cure any such breach
and the parties acknowledge and agree that irreparable damage would occur
in the event that any
related provision of this Agreement is not performed in accordance with its
specific terms or is otherwise breached, and further acknowledge and agree
that money damages are an inadequate remedy for any such breach because of
the difficulty of ascertaining the amount of damage that would be suffered
in the event of such breach.
ARTICLE VII
SURVIVAL; CERTAIN REMEDIES
7.1. Survival. The representations, warranties, covenants and
agreements of the parties hereto contained in this Agreement shall expire
at the Second Closing, except that the parties shall have no rights with
respect to representations and warranties following the Initial Closing
other than pursuant to Sections 5.2(a)(i), 5.2(b)(ii) and 5.3(a), and
except as set forth in Article VII, unless this Agreement is terminated in
accordance with Article VI following the Initial Closing.
7.2. Right to Require Repurchase. Notwithstanding anything to the
contrary contained in Section 7.1, in the event the Company (a) had
breached the representations or warranties contained in Section 2.4 and
such breach or breaches, without giving effect to any qualification as to
materiality contained in such representations and warranties, have had, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, and the Purchaser makes a written claim against
the Company on or before March 31, 2000 relating thereto, then the Company
shall purchase all of the outstanding Preferred Stock, Warrants and Shares
for an amount in cash equal to the sum of (x) the Purchase Price plus (y)
an amount equal to the liquidation preference of any Preferred Stock
received by the Purchaser as a dividend prior to the consummation of the
purchase plus (z) without duplication, all accrued and unpaid dividends
(which if in shares of Preferred Stock shall be valued at the liquidation
preference thereof) on such securities prior to the consummation of the
purchase (the "Section 7.2 Put Price"); provided that a breach shall not be
taken into account for such determination if (i) such breach were actually
known to the Purchaser at either Closing, (ii) were not disclosed in
writing by the Purchaser to the Company, and (iii) constituted a failure of
a condition to such Closing set forth in Section 5.2(a)(i) or 5.2(b)(ii)
hereof. Any such purchase shall be consummated as promptly as reasonably
practicable following the date of such written claim, but in any event
within six months, following receipt of such written claim from the
Purchaser, provided that the Section 7.2 Put Price shall be automatically
due and payable upon a payment default in respect of, or an acceleration
of, any indebtedness of the Company or any Subsidiary for borrowed money in
excess of $5,000,000 in the aggregate.
7.3. Sole and Exclusive Remedy. From the Initial Closing to the
date of any termination of this Agreement in accordance with Article VI, or
if this Agreement is not so terminated, from and after the Initial Closing,
the provisions of Section 7.2 shall constitute the sole and exclusive
recourse and remedy available to the Purchaser with respect to the breach
of any representation, warranty, covenant or agreement contained in this
Agreement or in any related certificate delivered pursuant to this
Agreement, except for matters involving fraud.
7.4. Termination Followina Initial Closing. (a) In the event that
this Agreement is terminated in accordance with Article VI for any reason
by either or both parties following the Initial Closing, the Purchaser
shall have the right, exercisable by written notice to the Company within
15 days following the date of termination, to require that the Company
purchase all of the outstanding Preferred Stock and any outstanding Shares
for an amount in cash equal to the sum of (x) the Initial Closing Purchase
Price plus (y) an amount equal to 111% of the liquidation preference of
any Preferred Stock received as a dividend prior to the consummation of the
purchase plus (z) without duplication, all accrued and unpaid dividends
(which if in shares of Preferred Stock shall be valued at 111% of the
liquidation preference thereof) on the securities being purchased prior to
the consummation of the purchase (the "Section 7.4 Put Price"). Any such
purchase shall be consummated as promptly as reasonably practicable, but in
any event within six months, following receipt of such written claim from
the Purchaser, provided that the Section 7.4 Put Price shall be
automatically due and payable upon a payment default in respect of, or an
acceleration of, any indebtedness of the Company or any Subsidiary for
borrowed money in excess of $5,000,000 in the aggregate.
(b) If the Purchaser does not exercise such right, the Company
shall have the right exercisable within 15 days following the last day the
Purchaser could have given notice under the first sentence of this Section
7.4, to purchase the shares of Preferred Stock that have not been, or in
connection with the exercise by the Company of such purchase right are not,
converted into Shares, at a price equal to the Section 7.4 Put Price within
the time period and subject to the same acceleration as provided in the
immediately preceding sentence. Upon such notice, holders of Preferred
Stock shall have a 15-day period in which to convert any of its outstanding
Preferred Stock into Common Stock in accordance with the Certificate of
Designation for the Series A Preferred Stock.
(c) In the event that both the Purchaser and the Company do not
elect to exercise their purchase right under this Section 7.4, the Company
shall issue to the Purchaser a number of shares of Preferred Stock equal to
11% of the number of shares of Preferred Stock that were received as
dividends or were accrued as dividends and not paid as of the date of
issuance contemplated by this sentence.
(d) Prior to the Second Closing the Purchaser shall not transfer
any of the Preferred Stock unless the transferee shall agree in writing,
which shall have been delivered to the Company, that the shares of
Preferred Stock that it is acquiring shall be subject to this Section 7.4.
(e) Notwithstanding anything in this Section 7.4 to the contrary,
the Section 7.4 Put Price shall be reduced by an amount equal to the
portion of the Initial Purchase Price the Chief Executive Officer of the
Company has approved, authorized or recommended the release or transfer of
from any segregated account set up by the Company to hold the Initial
Purchase Price, which release or transfer was made without the prior
written consent of a majority of the Independent Directors following the
Initial Closing. In the event of any reduction of the Section 7.4 Put Price
pursuant to the immediately preceding sentence, the number of securities
which the Purchaser may require the Company to purchase at such reduced
Section 7.4 Put Price shall be equal to the product of (x) the number of
securities otherwise subject to purchase, and (y) a fraction, the numerator
of which is the Section 7.4 Put Price as reduced pursuant to the
immediately preceding sentence, and the denominator of which is the Section
7.4 Put Price.
ARTICLE VIII
MISCELLANEOUS
8.1. Defined Terms; Intemretations. The following terms, as used
herein, shall have the following meanings:
"1998 Balance Sheet" shall have the meaning ascribed thereto in
Section 2.5.
"1998 Financial Statements" shall have the meaning ascribed
thereto in Section 2.5.
"Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
"Agreement" shall have the meaning ascribed thereto in the
preamble.
"Alternative Transaction" shall mean any of (i) the acquisition,
in one transaction or a series of transactions by any Third Party of more
than 10% of the outstanding shares of Common Stock (or securities
convertible or exchangeable therefor), whether from the Company or pursuant
to a tender offer or exchange offer or otherwise, (ii) a merger or other
business combination involving the Company pursuant to which any
Third Party acquires more than 10% of the voting power of the outstanding
equity securities of the Company or the entity surviving such merger or
business combination, or (iii) any other transaction pursuant to which any
Third Party acquires or would acquire control of assets (including for this
purpose the outstanding equity securities of the Company's Subsidiaries,
and the entity surviving any merger or business combination including any
of them) of the Company or the Subsidiaries having a fair market value
equal to more than 10% of the fair market value of all the assets of the
Company and the Subsidiaries, taken as a whole, immediately prior to such
transaction.
"Board of Directors" shall mean the Board of Directors of the
Company.
"Certificate of Amendment" shall have the meaning ascribed
thereto in Section 4.9.
"Certificate of Designation" shall have the meaning ascribed
thereto in Section 2.2.
"Closing" shall have the meaning ascribed thereto in Section
1.2(a).
"Closing Date" shall have the meaning ascribed thereto in Section
1.2(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commitments" shall have the meaning ascribed thereto in Section
2.15.
"Common Stock" shall have the meaning ascribed thereto in the
recitals.
"Company" shall have the meaning ascribed thereto in the
preamble.
"Company Affiliates" shall have the meaning ascribed thereto in
Section 4.2.
"Company Fiduciary Out" shall have the meaning ascribed thereto
in Section 4.2.
"Compensation and Benefit Plans" shall mean all material bonus,
vacation, deferred compensation, pension, retirement, profit-sharing,
thrift, savings, employee stock ownership, stock bonus, stock purchase,
restricted stock and stock option plans, all employment or severance
contracts, all medical, dental, disability, health and life insurance
plans, all other material employee benefit and fringe benefit plans,
contracts or arrangements and any applicable "change of control" or similar
provisions in any plan, contract or arrangement sponsored, maintained or
contributed to by the Company or any of its Subsidiaries for the benefit of
officers, former officers, employees, former employees, directors, former
directors, or the beneficiaries of any of the foregoing or
pursuant to which the Company or any of its Subsidiaries or ERISA
Affiliates has or may have any liability, contingent or otherwise.
"Confidentiality Agreement" shall have the meaning ascribed
thereto in Section 4.11.
"Consents" shall have the meaning ascribed thereto in Section
4.6.
"DGCL" shall mean the Delaware General Corporation Law.
"Encumbrances" shall have the meaning ascribed thereto in Section
2.1(b).
"Environmental Laws" shall mean, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. xx.xx. 9601 et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. xx.xx. 11001 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. xx.xx. 6901 et seq., the Toxic
Substances Control Act, 15 U.S.C. xx.xx. 2601 et seq., the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. xx.xx. 136 et seq.,
the Clean Air Act, 42 U.S.C. xx.xx. 7401 et seq., the Clean Water Act
(Federal Water Pollution Control Act), 33 U.S.C. xx.xx. 1251 et seq., the
Safe Drinking Water Act, 42 U.S.C. xx.xx. 300f et seq., the Occupational
Safety and Health Act, 29 U.S.C. xx.xx. 641, et seq., the Hazardous
Materials Transportation Act, 49 U. S.C. ss. ss. 1801, et seq., as any of
the above statutes shall be in effect as of each Closing Date, all rules
and regulations promulgated pursuant to any of the above statutes, and any
other foreign, federal, state or local law, statute, ordinance, rule or
regulation governing Environmental Matters, as the same shall be in effect
as of each Closing Date, including any common law cause of action providing
any right or remedy relating to Environmental Matters, and all applicable
judicial and administrative decisions, orders, and decrees relating to
Environmental Matters.
"Environmental Matter" shall mean any matter arising out of,
relating to, or resulting from pollution, contamination, protection of the
environment, human health or safety, health or safety of employees,
sanitation, and any matters relating to emissions, discharges, Releases or
threatened Releases of Hazardous Substances into the air (indoor and
outdoor), surface water, groundwater, soil, land surface or subsurface, or
otherwise arising out of, relating to, or resulting from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
handling, release or threatened release of Hazardous Substances.
"Environmental Permits" shall have the meaning ascribed thereto
in Section 2.14(d)(ii).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean each business or entity which is a
member of a "controlled group of corporations," under "common control" or a
member of an "affiliated service group" with the Company or any of its
Subsidiaries within the meaning of Articles 414(b), (c) or (m) of the
Code, or required to be aggregated with the Company under Article 414(o) of
the Code, or is under "common control" with the Company, within the meaning
of Article 4001(a)(14) of ERISA, and the regulations promulgated and
proposed thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Exchange Act shall include
reference to the comparable section, if any, of any such successor federal
statute.
"GAAP" shall have the meaning ascribed thereto in Section 2.5.
"Governmental Entity" shall mean any supernational, national,
foreign, federal, state or local judicial, legislative, executive,
administrative or regulatory body or authority.
"Hazardous Substances" shall mean any pollutants, contaminants,
toxic or hazardous or extremely hazardous substances, materials, wastes,
constituents, compounds, chemicals (including, without limitation,
petroleum or any by-products or fractions thereof, any form of natural gas,
lead, asbestos and asbestos-containing materials, building construction
materials and debris, polychlorinated biphenyls (PCBs") and PCB-containing
equipment, radon and other radioactive elements, ionizing radiation,
electromagnetic field radiation and other non-ionizing radiation,
pesticides, defoliants, explosives, flammables, corrosives and urea
formaldehyde foam insulation) that are regulated by, or form the basis of
liability under, any Environmental Laws.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
thereunder.
"IMCG-1" shall have the meaning ascribed thereto in the preamble.
"IMCG-1 Initial Closing Purchase Price" shall have the meaning
ascribed thereto in Section 1.1.
"IMCG-1 Second Closina Purchase Price" shall have the meaning
ascribed thereto in Section 1.1.
"IMCG-11" shall have the meaning ascribed thereto in the
preamble.
"Independent Directors" shall have the meaning ascribed thereto
in Section 4.16.
"Initial Closing" shall have the meaning ascribed thereto in
Section 1.2(a).
"Initial Closing Purchase Price" shall have the meaning ascribed
thereto in Section 1.1.
"Initial Purchase" shall have the meaning ascribed thereto in
Section 1.1.
"Intellectual Property" shall mean (i) all patentable inventions
and discoveries (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereto, and all patents and patent
applications, together with all reissuances, continuations, continuations-
in-part, revisions, extensions and reexaminations thereof, (ii) all
trademarks, service marks, trade dress, logos, trade names and corporate
names, together with all translations, derivations and combinations thereof
and including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, (iii) all copyrightable
works, all copyrights and all applications, registrations and renewals in
connection therewith, (iv) all mask works and all applications,
registrations and renewals in connection therewith, (v) all know-how, trade
secrets and confidential business information (including ideas, research
and development, formulas, compositions, manufacturing and production
process and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information and business and
marketing plans and proposals), (vi) all computer software (including data
and related documentation), (vii) all management information systems,
(viii) all other proprietary rights, (ix) all copies and tangible
embodiments thereof (in whatever form or medium) and (x) all licenses and
agreements in connection therewith.
"IRS" shall mean the Internal Revenue Service.
"Knowled~ze", with respect to the Company, shall mean the actual
knowledge of each member of the board of directors of the Company and each
executive officer of the Company.
"Laws" shall include all foreign, federal, state, and local laws,
statutes, ordinances, rules, regulations, orders, judgments, decrees and
bodies of law, including, without limitation, (i) any of the foregoing
promulgated by any Governmental Entity, (ii) Environmental Laws, (iii) the
Federal Truth-in-Lending Act, (iv) Regulation Z, (v) the Equal Credit
Opportunity Act, (vi) the Federal Fair Debt Collection Practices Act and
(vii) state laws, rules and regulations relating to consumer protection,
installment sales, collection and usury.
"Leased Real Property" shall mean the real property leased or
subleased by the Company or any Subsidiary, together with, to the extent
leased or subleased by the Company or any Subsidiary, all buildings and
other structures, facilities or improvements currently or hereafter located
thereon, all fixtures, systems, equipment and items of personal property of
the Company or any Subsidiary attached or appurtenant thereto, and all
easements, licenses, rights and appurtenances relating to the foregoing.
"Licenses" shall have the meaning ascribed thereto in Section
2.14(a).
"Litigation" shall have the meaning ascribed thereto in Section
2.7.
"Losses" shall mean each and all of the following items: claims,
losses, (including, without limitation, losses of earnings) liabilities,
obligations, payments, damages (actual, punitive or consequential),
charges, judgments, fines, penalties, amounts paid in settlement, costs and
expenses (including, without limitation, interest which may be imposed in
connection therewith, costs and expenses of investigation, actions, suits,
proceedings, demands, assessments and fees, expenses and disbursements of
counsel, consultants and other experts).
"Major Suppliers" shall have the meaning ascribed thereto in
Section 2.19.
"Material Adverse Effect" shall mean, subject to Schedule 2.6, a
material adverse effect of at least $ 10,000,000 on the properties,
business, results of operations, or financial condition of the Company and
its Subsidiaries taken as a whole.
"Multi-Employer Plan" shall have the meaning ascribed thereto in
Section 2.12(c).
"Non-Voting Common Stock" shall have the meaning ascribed thereto
in the recitals.
"NYSE" shall meanThe New York Stock Exchange, Inc.
"Owned Real Property" shall mean the real property owned by the
Company or any Subsidiary, together with all buildings and other
structures, facilities or improvements currently or hereafter located
thereon, all fixtures, systems, equipment and items of personal property of
the Company or any Subsidiary attached or appurtenant thereto and all
easements, licenses, rights and appurtenances relating to the foregoing.
"Permitted Encumbrances" shall mean, with respect to any asset,
(i) any imperfection of title with respect to such asset which does not
materially interfere with the present occupancy or use of such asset and
the continuation of the present occupancy or use of such asset; (ii) such
covenants, conditions, restrictions, easements,
encroachments or Encumbrances that are not created pursuant to mortgages or
other financing or security documents, and any other state of facts, which
do not, individually or in the aggregate, materially interfere with the
present occupancy or use of such asset; (111) mechanic's, materialmen's and
similar Encumbrances with respect to amounts not yet due and payable or
which are being contested in good faith through appropriate proceedings;
(iv) Encumbrances for Taxes not yet delinquent or which are being contested
in good faith through appropriate proceedings; and (vi) Encumbrances
securing rental payments under capital lease arrangements.
"Person" shall mean any individual, firm, corporation, limited
liability company, partnership, company or other entity, and shall include
any successor (by merger or otherwise) of such entity.
"Preferred Stock" shall have the meaning ascribed thereto in the
recitals.
"Products" shall have the meaning ascribed thereto in Section 2.21.
"Proxy Statement" shall have the meaning ascribed thereto in
Section 2.18.
"Purchase Price" shall have the meaning ascribed thereto in the
recitals.
"Purchaser" shall have the meaning ascribed thereto in the
preamble.
"Purchaser Designees" shall have the meaning ascribed thereto in
Section 4.5.
"Purchaser Expenses" shall have the meaning ascribed thereto in
Section 8.2.
"Real Property" shall have the meaning ascribed thereto in
Section 2.14(d)(iii).
"Registration Rights Agreement" shall have the meaning ascribed
thereto in Section 5.2(g).
"Related Parties" shall mean (i) Affiliates of the Company and
(ii) directors or officers of the Company and their Affiliates (including
any family members of directors and officers), but shall not include the
Subsidiaries or the directors or officers of the Subsidiaries (except for
directors or officers of the Subsidiaries who are also directors or
officers of the Company).
"Release" shall have the meaning set forth in Section 1021(22) of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. ss.9601(22).
"Return" shall mean any report, return, statement, estimate,
declaration, notice, form or other information required to be supplied to a
taxing authority in connection with Taxes.
"SEC" shall mean the Securities and Exchange Commission.
"Second Closing" shall have the meaning ascribed thereto in
Section 1.2(a).
"Second Closing Failures" shall have the meaning ascribed thereto
in Section 5.2(a).
"Second Closing Purchase Price" shall have the meaning ascribed
thereto in Section 1.1.
"Second Purchase" shall have the meaning ascribed thereto in
Section 1.1.
"SEC Reports" shall have the meaning ascribed thereto in Section
2.4.
"Section 7.2 Put Price" shall have the meaning ascribed thereto
in Section 7.2.
"Section 7.4 Put Price" shall have the meaning ascribed thereto
in Section 7.4.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Act shall include
reference to the comparable section, if any, of such successor federal
statute.
"Series A Preferred Stock" shall have the meaning ascribed
thereto in the recitals.
"Series B Preferred Stock" shall have the meaning ascribed
thereto in the recitals.
"Shares" shall mean the shares of Common Stock issuable upon
conversion of shares of Preferred Stock and exercise of the Warrants.
"Significant Shareholders" shall mean Trace International
Holdings, Inc., Aeneas Venture Corporation and AIF II, L.P.
"Stockholders Agreement" shall have the meaning ascribed thereto
in Section 5.2(a)(iv).
"Stockholders Meeting" shall have the meaning ascribed thereto in
Section 2. 18.
"Subsidiaries" shall have the meaning ascribed thereto in Section
2. 1 (b).
"Subsidiary" shall have the meaning ascribed thereto in Section 2.
1 (b).
"Takeover Proposal" shall have the meaning ascribed thereto in
Section 4.2.
"Tax" and "Taxes" shall mean any federal, state, local or foreign
income, gross receipts, property, sales, use, value added, license, excise,
franchise, capital, net worth, estimated, withholding, employment, payroll,
premium, withholding, alternative or added minimum, ad valorem, inventory,
asset, gains, transfer or excise tax, or any other tax, levy, custom, duty,
impost, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest, penalty or additions to tax,
imposed by any Governmental Entity.
"Terminatina Breach" shall have the meaning ascribed thereto in
Section 6. 1 (d).
"Third Party" shall mean any Person (or group of Persons) other
than the Purchaser.
"Transaction Documents" shall mean this Agreement, the
Stockholders Agreement, the Voting Agreement, the Certificate of
Designation, the Warrants and all other contracts, agreements, schedules,
certificates and other documents being delivered pursuant to or in
connection with this Agreement or such other documents or the transactions
contemplated hereby or thereby.
"Warrants" shall have the meaning ascribed thereto in the
recitals.
8.2. Fees and Expenses. At the Initial Closing or as set forth on
Section 6.2, the Company shall reimburse the Purchaser in cash for its fees
and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including, without limitation, the fees
and disbursements of its attorneys, accountants, consultants and other
advisors) (collectively, "Purchaser Expenses"); provided, however, that the
portion of the Purchaser Expenses for which Purchaser is reimbursed shall
not exceed $750,000 in the aggregate.
8.3. Public Announcements. The Purchaser and the Company shall
consult with each other before issuing any press release with respect to
this Agreement or the transactions contemplated hereby and neither shall
issue any such press release or make any such public statement without the
prior consent of the other, which consent
shall not be unreasonably withheld; provided, however, that a party may,
without the prior consent of the other party, issue such press release or
make such public statement as may upon the advice of counsel be required by
Law or the rules and regulations of the NYSE, if it has used reasonable
efforts to consult with the other party prior thereto.
8.4. Restrictive Leizends. No shares of Preferred Stock, Warrants
or Shares may be transferred without registration under the Securities Act
and applicable state securities laws unless counsel to the Company shall
advise the Company that such transfer may be effected without such
registration. Each certificate representing any of the foregoing shall bear
legends in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH
LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED
PURSUANT TO, AND THE HOLDER HEREOF IS ENTITLED TO CERTAIN RIGHTS
AND SUBJECT TO CERTAIN OBLIGATIONS CONTAINED IN, A SECURITIES
PURCHASE AGREEMENT DATED AS OF APRIL 12,1999, A COPY OF WHICH IS
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE ISSUER
HEREOF, AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF
SUCH SECURITIES UPON WRITTEN REQUEST.
8.5. Further Assurances. At any time or from time to time after
the Initial Closing, the Company, on the one hand, and the Purchaser, on
the other hand, agree to cooperate with each other, and at the request of
the other party, to execute and deliver any further instruments or
documents and to take all such further action as the other party may
reasonably request in order to evidence or effectuate the consummation of
the transactions contemplated hereby or by the other Transaction Documents
and to otherwise carry out the intent of the parties hereunder or
thereunder.
8.6. Successors and Assians. This Agreement shall bind and inure
to the benefit of the Company and the Purchaser and the respective
successors, permitted assigns, heirs and personal representatives of the
Company and the Purchaser, provided that the Company may not assign its
rights or obligations under this Agreement to any Person without the prior
written consent of the Purchaser, and provided further that the Purchaser
may not assign its rights or obligations under this Agreement to any Person
(other than a direct or indirect wholly-owned subsidiary of the Purchaser)
without the prior written consent of the Company, which consent shall not
be unreasonably withheld or delayed. In addition, and whether or not any
express assignment has been made, the provisions of this Agreement which
are for the Purchaser's benefit as a purchaser or holder of Preferred
Stock, Warrants or Shares are also for the benefit of, and enforceable by,
any subsequent holder of such Preferred Stock, Warrants or Shares.
8.7. Entire Aareement. This Agreement and the other Transaction
Documents and the Confidentiality Agreement contain the entire agreement
among the parties with respect to the subject matter hereof and supersede
all prior and contemporaneous arrangements or understandings with respect
thereto.
8.8. Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally recognized overnight courier or first class registered or
certified mail, return receipt requested, postage prepaid, addressed to
such party at the address set forth below or such other address as may
hereafter be designated in writing by such party to the other parties:
(i) if to the Company, to:
United Auto Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
General Counsel
with a copy to (which shall not constitute notice):
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Letkort, Esq.
(ii) if to the Purchaser,
c/o Penske Capital Partners, L.L.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxx X. Xxxxxx
with copies to (which shall not constitute notice):
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxx Jacob, Esq.
Xxxxxx X. Xxxxxxxxx, Esq.
All such notices, requests, consents and other communications
shall be deemed to have been given or made if and when delivered personally
or by overnight courier to the parties at the above addresses or sent by
electronic transmission, with confirmation received, to the telecopy
numbers specified above (or at such other address or telecopy number for a
party as shall be specified by like notice).
8.9. Amendments. The terms and provisions of this Agreement may
be modified or amended, or any of the provisions hereof waived, temporarily
or permanently, in a writing executed and delivered by the Company and the
Purchaser. No waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof
(whether or not similar). No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof.
8.10. Countetparts. This Agreement may be executed in any number
of counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute
but one agreement.
8.11. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.
8.12. Nouns and Pronouns. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice versa.
8.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW.
8.14. Submission to Jurisdiction. Each of the parties hereto
hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and of the United
States of America, in each case located in the County of New York, for any
Litigation arising out of or relating to this Agreement or the other
Transaction Documents and the transactions contemplated hereby and thereby
(and agrees not to commence any Litigation relating hereto or thereto
except in such courts), and further agrees that service of any process,
summons, notice or document by U.S. registered mail to its respective
address set forth in this Agreement shall be effective service of process
for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection
to the laying of venue of any Litigation arising out of this Agreement or
the transactions contemplated hereby in the courts of the State of New York
or the United States of America, in each case located in the County of New
York, hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such Litigation brought in any
such court has been brought in an inconvenient forum.
8.15. WAIVER OF JURY TRIAL. THE COMPANY AND THE PURCHASER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECTOF ANY ACTION,
PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE TRANSACTION DOCUMENTS.
8.16. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid,
but if any provision of this Agreement is held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
render invalid or unenforceable any other provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
UNITED AUTO GROUP, INC.
By: /s/ Xxxxxx X. XxXxx
------------------------------
Name: Xxxxxx X. XxXxx
Title: President and Chief
Operating Officer
INTERNATIONAL MOTOR CARS GROUP I, L.L.C.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman
INTERNATIONAL MOTOR CARS GROUP II, L.L.C.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman
