Exhibit 99.3
--------------------------------------------------------------------------------
UNITED AUTO GROUP, INC.
FORM OF
STOCKHOLDERS AGREEMENT
BY AND AMONG
AIF II, L.P.,
AENEAS VENTURE CORPORATION,
INTERNATIONAL MOTOR CARS GROUP I, L.L.C.,
INTERNATIONAL MOTOR CARS GROUP II, L.L.C.,
TRACE INTERNATIONAL HOLDINGS, INC.,
AND
UNITED AUTO GROUP, INC.
Dated as of _______ __, 1999
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (the "Agreement") dated as of ________ ___, 1999 by
and among AIF II, L.P., a Delaware limited partnership ("Apollo"), Aeneas
Venture Corporation, a Delaware corporation ("Harvard"), International Motor
Cars Group I, L.L.C. ("PCP I"), International Motor Cars Group II, L.L.C. ("PCP
II" and, together with PCP I, the "PCP Entities"), Trace International Holdings,
Inc. ("Trace" and together with Apollo, Harvard and the PCP Entities, the
"Restricted Stockholders"), and United Auto Group, Inc. (the "Company").
WHEREAS, pursuant to the terms of a Securities Purchase Agreement, between
the Company and the PCP Entities, dated as of April 12, 1999 (the "Securities
Purchase Agreement"), the PCP Entities are acquiring Series A Convertible
Preferred Stock, par value $.0001 per share, of the Company (the "Series A
Preferred Stock"), Series B Convertible Preferred Stock, par value $.0001 per
share (the "Series B Preferred Stock") and warrants (the "Warrants") to acquire
the Company's voting Common Stock, par value $.0001 per share, and non-voting
Common Stock, par value $.0001 per share (together, the "Common Stock"), of the
Company;
WHEREAS, Apollo, Harvard and Trace are existing stockholders of the
Company; and
WHEREAS, the parties wish to provide for certain matters relating to the
ownership and transfer of the Common Stock.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. Unless otherwise defined herein, the terms defined in
the introductory paragraph and the Recitals to this Agreement shall have the
respective meanings specified
therein, and the following terms shall have the meanings specified below:
"Adjusted Beneficial Ownership" is defined in Section 2.5.
"Affiliate" means affiliate as defined in Rule 405 promulgated under
the Securities Act.
"Apollo" has the meaning set forth in the preamble.
"Beneficial Ownership" means "beneficial ownership" as defined in Rule
13d-5 promulgated under the Exchange Act. The term "Beneficial Owner"
shall have a correlative meaning.
"Business Day" means a calendar day, other than (a) a Saturday or
Sunday and (b) a day on which commercial banks are required or permitted by
law or other governmental action to close in New York, New York, United
States of America.
"Common Stock" has the meaning set forth in the recitals hereto, and
includes any securities issued with respect to such shares by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, amalgamation, merger, consolidation or other
reorganization or otherwise.
"Company" has the meaning set forth in the recitals hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Harvard" has the meaning set forth in the recitals hereto.
"Independent Directors" (a) initially means two persons who were
members of the Audit Committee of the Company's Board of Directors as of
December 31, 1998 and who shall be
-2-
selected by a majority of said Audit Committee and (b) after the Initial
Closing Dates means persons nominated by the immediately preceding
Independent Directors who are not Affiliates of either the PCP Entities or
their respective Affiliates (other than the Company).
"Initial Closing Date" means the date of the "Initial Closing" (as
defined in the Securities Purchase Agreement).
"PCP Directors" has the meaning set forth in Section 2.1.
"PCP Entities" has the meaning set forth in the recitals hereto.
"PCP I" has the meaning set forth in the recitals hereto.
"PCP II" has the meaning set forth in the recitals hereto.
"Permitted Transferee" of a person means (i) a corporation,
partnership or other entity wholly owned by such person; provided that such
corporation, partnership or other entity shall agree in writing that it
shall transfer to such person any Restricted Securities which it holds
prior to such time as it ceases to be wholly owned by such person, and (ii)
the equity owners of such person to the extent such equity owners receive a
pro rata distribution of Restricted Securities.
"Restricted Securities" means any Common Stock or other equity
security of the Company Beneficially Owned by a Restricted Stockholder and
any securities convertible, exercisable or exchangeable for Common Stock or
such other equity securities, including, without limitation, the Series A
Preferred Stock and the Warrants.
"Restricted Stockholder" has the meaning set forth in the preamble.
-3-
"Second Closing Date" means the date of the "Second Closing" (as
defined in the Securities Purchase Agreement).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Purchase Agreement" has the meaning set forth in the
recitals hereto.
"Series A Preferred Stock" has the meaning set forth in the recitals
hereto.
"Series B Preferred Stock" has the meaning set forth in the recitals
hereto.
"Tag-Along Notice" is defined in Section 4.2.
"Tag-Along Stockholders" is defined in Section 4.2.
"Trace" has the meaning set forth in the recitals hereto.
"Transfer" means any direct or indirect transfer, sale, assignment,
gift, pledge, mortgage, hypothecation or other disposition of any interest.
The term "Transferee" shall have a correlative meaning.
"Warrants" has the meaning set forth in the recitals hereto.
Section 1.2. Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it by this Agreement; (b) an accounting
term not otherwise defined has the meaning assigned to it in accordance with
generally accepted accounting principles in effect in the United States of
America; (c) "or" is not exclusive; and (d) words in the singular include the
plural, and in the plural include the singular. The language used in this
Agreement shall be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction shall be applied against
any party. Any references to any statute or law shall also refer to all rules
-4-
and regulations promulgated thereunder, unless the context requires otherwise.
ARTICLE II.
BOARD COMPOSITION AND VOTING AGREEMENTS
Section 2.1. Board Composition from the Initial Closing Date through the
Second Closing Date. From the Initial Closing Date through and including the
Second Closing Date, the Restricted Stockholders shall use their reasonable best
efforts to have the Board of Directors of the Company consist of seven (7)
persons as follows:
A. Xxxxx Xxxxxx, and two (2) additional directors nominated by the PCP
Entities (nominating as a single group) (Mr. Penske and any additional
directors nominated by the PCP Entities are collectively referred to as the
"PCP Directors").
B. One (1) director nominated by Trace.
C. The chief operating officer of the Company as of the date
immediately prior to the Initial Closing Date, or in his absence, another
person designated by the Independent Directors.
D. Two (2) Independent Directors.
Section 2.2 Board Composition from the Second Closing Date. The Restricted
Stockholders shall use their reasonable best efforts to:
E. Prior to the Second Closing Date:
1) expand the size of the Board of Directors of the Company to
nine (9) persons effective as of the Second Closing Date; and
2) nominate for election by the Company's stockholders two
additional PCP Directors to
-5-
fill the vacancies created by the expansion of the size of
the Board of Directors.
B. On the Second Closing Date, fill the vacancies created by the
expansion of the size of the Board of Directors with the directors elected
by the stockholders.
C. From and after the earlier of (x) the first meeting of stockholders
of the Company following the Second Closing Date, and (y) the first vacancy
on the Board of Directors following the Second Closing Date, cause the Board
of Directors to consist of:
1) Xxxxx Xxxxxx, and four (4) additional PCP Directors.
2) One (1) director nominated by Trace.
3) Three (3) Independent Directors.
Section 2.3. Composition of Committees of the Board of Directors. From the
Initial Closing Date through the Second Closing Date, the Restricted
Stockholders shall use their reasonable best efforts to have PCP Directors
appointed to committees of the Board of Directors of the Company as follows:
A. PCP Directors shall be appointed to constitute no less than one-half
of the members of the Executive Committee, if any.
B. One PCP Director shall be appointed to each other committee of the
Board of Directors and other members of which not less than 2 (two) shall be
Independent Directors.
From and after the Second Closing Date, the Restricted Stockholders shall
use their reasonable best efforts to have the Compensation Committee of the
Board of Directors of the Company consist of four persons as follows:
A. Xxxxx Xxxxxx and one (1) additional PCP Director.
-6-
B. Two (2) Independent Directors.
Section 2.4. Voting Agreement. Each of the Restricted Stockholders agrees to
vote all of the voting securities of the Company Beneficially Owned by it in
favor of the persons to be nominated as directors pursuant to Section 2.1 or
2.2, and to take all other reasonable action to cause such Persons to be elected
as the only directors of the Company.
Section 2.5. Reduction in Right of PCP Entities to Designate Directors.
Notwithstanding anything to the contrary contained in this Agreement, at such
time after the Second Closing Date as the percentage Beneficial Ownership in the
Company of the PCP Entities, taken together, and excluding Common Stock
Beneficially Owned as a result of unexercised Warrants ("Adjusted Beneficial
Ownership") is reduced below 20% then the number of PCP Directors shall be
reduced to the applicable number in the chart below:
If such Adjusted Beneficial Ownership No. of PCP Directors to be
is Equal to or Greater Than: but less than: designated thereafter:
------------------------------------- ------------------------ --------------------------
17.5% 20.0% 4
15.0% 17.5% 3
12.5% 15.0% 2
10.0% 12.5% 1
The number of PCP Directors to be designated shall be further reduced as
such Adjusted Beneficial Ownership is further reduced, as provided in the chart
above. Any reduction resulting from application of this Section 2.5 shall take
place on the earlier to occur of (x) the first meeting of stockholders of the
Company following the determination of such reduction, and (y) the first vacancy
on the Board of Directors following the determination of such reduction.
Section 2.6. Suspension of Right to Designate Directors. Notwithstanding
anything to the contrary contained in this Agreement, the right of the PCP
Entities or Trace to designate directors of the Company shall be suspended at
such time as either:
-7-
A. such Restricted Stockholder's Beneficial Ownership in the Company
(with respect to the PCP Entities, their Adjusted Beneficial Ownership) is
reduced below 10%; or
B. in the case of the PCP Entities, if either (i) they are in default
of Section 5.2(b) other than as a result of the death, incapacity, or
capture and detention of Mr. Penske, or (ii) one or both of the PCP Entities
has requested that the Company repurchase all or a portion of its Restricted
Securities pursuant to the terms of the Securities Purchase Agreement.
Section 2.7. Replacement Directors. During such time as the right of either
the PCP Entities or Trace to nominate directors is reduced or suspended pursuant
to Section 2.5 or 2.6, the Restricted Stockholders shall use their reasonable
best efforts to have the successors to such directors both: (a)be selected by a
majority of the remaining Board of Directors, excluding the director whose
position is no longer entitled to be designated by Trace or the PCP Entities,
and (b) not be Affiliates of the PCP Entities and their Affiliates (other than
the Company and its subsidiaries).
Section 2.8. Resignation of PCP Directors. Upon exercise by the PCP Entities
of their right pursuant to Section 7.2 or 7.4 of the Securities Purchase
Agreement, the PCP Entities shall cause all of the PCP Directors to immediately
resign as members of the Board of Directors of the Company.
Section 2.9. Termination of Article II. The provisions contained in this
Article II shall terminate and be of no further effect from and after the third
anniversary of the Initial Closing Date.
ARTICLE III
STANDSTILL PROVISIONS
Section 3.1. Standstill Provisions. Subject to Section 3.2, at any time prior
to the third anniversary of the Initial Closing Date, each Restricted
Stockholder shall not, and shall cause its
-8-
Affiliates not to, either alone or as part of a "group" (as such term is used in
Section 13d-5 (as such rule is currently in effect) of the Exchange Act),
directly or indirectly:
A. acquire or seek to acquire, by purchase or otherwise, ownership
(including, but not limited to, Beneficial Ownership) of (i) any capital
stock of the Company, or direct or indirect rights (including convertible
securities) or options to acquire such capital stock or (ii) any of the
assets or businesses of the Company, or direct or indirect rights or options
to acquire such assets or businesses;
B. offer, seek or propose to enter into any transaction of merger,
consolidation, sale of substantial assets or any other business combination
involving the Company or any of its Affiliates, whether or not any parties
other than such Restricted Stockholder and its Affiliates are involved;
C. make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" (as such terms are defined or used in Regulation
14A under the Exchange Act) or become a "participant" in any "election
contest" (as such terms are defined or used in Rule 14a-11 under the
Exchange Act) to vote, or seek to advise or influence any person or entity
with respect to the voting of, any voting securities of the Company of any
of its Affiliates, except as set forth in Article II of this Agreement;
D. initiate or propose any stockholder proposals for submission to a
vote of stockholders, whether by action at a stockholder meeting or by
written consent, with respect to the Company or any of its Affiliates, or
except as provided in this Agreement propose any person for election to the
Board of Directors of the Company;
E. disclose to any third party, or make any filing under the Exchange
Act, including, without limitation, under Section 13(d) thereof, disclosing,
any intention, plan or arrangement inconsistent with the foregoing;
-9-
F. form, join or in any way participate in a group to take any actions
otherwise prohibited by the terms of this Agreement;
G. enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the foregoing; or
H. make any public announcement with respect to any of the foregoing.
Section 3.2. Exceptions to the Standstill Provisions. Notwithstanding the
foregoing, the provisions of Section 3.1 shall not prohibit:
A. any transaction by a Restricted Stockholder approved by either (i) a
majority of the members of the Board of Directors who are neither designated
by such Restricted Stockholder nor otherwise affiliated with such Restricted
Stockholder, or (ii) a majority of the stockholders of the Company other
than such Restricted Stockholder and its Affiliates;
B. in the case of the PCP Entities, the acquisition of securities
pursuant to the terms of the Securities Purchase Agreement;
C. in the case of the PCP Entities, Harvard and Apollo, the acquisition
of securities or of Beneficial Ownership of securities if, after giving
effect to such acquisition, the Beneficial Ownership of such Restricted
Stockholder in the Company is less than or equal to 49%;
D. in the case of the PCP Entities, a tender offer for all, but not
less than all, of the outstanding Common Stock of the Company or a merger
with or into the Company;
E. the granting by the Board of Directors of options to Affiliates of
Restricted Stockholders; or
-10-
F. the exercise of stock options.
ARTICLE IV.
TRANSFER RESTRICTIONS
Section 4.1. Restrictions on Transfer of Restricted Securities. Until the
third anniversary of the Initial Closing Date, neither of the PCP Entities nor
Trace shall Transfer any of its Restricted Securities except:
A. as part of a merger, consolidation or amalgamation of the Company
or a tender offer for Common Stock of the Company which is open to all
stockholders of the Company;
B. in the case of a PCP Entity, a Transfer of Common Stock in
compliance with Section 4.2 of this Agreement to a Transferee that has
agreed to comply with the provisions of Section 4.2.
C. to a Permitted Transferee who shall have become a party to this
Agreement by executing a signature page hereto and delivering such signature
page to the Company and the other Restricted Stockholders, which execution
and delivery shall constitute an agreement by such Permitted Transferee that
it and the Restricted Securities that it acquires shall be bound by and
entitled to the benefits of this Agreement;
D. pursuant to a Brokers' Transaction (as such term is defined in Rule
144(g) under the Securities Act) or pursuant to an underwritten public
offering of Common Stock; or
E. to a pledgee of the Restricted Securities pursuant to a pledge (or
other security) agreement existing as of the date of this Agreement.
Section 4.2. Tag-Along Rights.
A. In the event either or both of the PCP Entities desires to Transfer
any Restricted Securities pursuant to Section 4.1(b) at any time prior to
the third anniversary of
-11-
the Initial Closing Date, such PCP Entity shall notify Apollo and Harvard
(the "Tag-Along Stockholders") in writing, of such proposed Transfer and its
terms and conditions (the "Tag-Along Notice").
B. Within ten (10) Business Days of the date of the Tag-Along Notice,
each Tag-Along Stockholder shall notify the PCP Entities if it elects to
participate in such Transfer. Any such Tag-Along Stockholder that fails to
notify either PCP Entity within such ten (10) Business Day period shall be
deemed to have waived its rights to participate in such Transfer. Each such
Tag-Along Stockholder that so notifies the PCP Entities shall have the right
to Transfer, at the same price per share of Common Stock and on the same
terms and conditions as the applicable PCP Entity or Entities, an amount of
shares equal to the shares the Transferee actually proposes to purchase
multiplied by a fraction, the numerator of which shall be the number of
shares of Common Stock issued and owned by such Tag-Along Stockholder and
the denominator of which shall be the aggregate number of shares of Common
Stock issued and owned by such PCP Entity (or both PCP Entities, if both are
selling pursuant to such transaction) and each other Tag-Along Stockholder
exercising its rights under this Section (assuming for purposes of
calculating such fraction the conversion of all convertible securities and
the exercise of all options and warrants held by the PCP Entities and each
other Tag-Along Stockholder exercising its rights under this Section).
Section 4.3. Transferees; Noncomplying Transfers. In the event of any
purported Transfer of any Restricted Securities in violation of Article IV of
this Agreement, such purported Transfer shall be void and of no effect, and no
dividend of any kind whatsoever nor any distribution pursuant to liquidation or
otherwise shall be paid by the Company to the purported transferee in respect of
such Restricted Securities (all such dividends and distributions being deemed
waived), and the voting rights of such Restricted Securities, if any, on any
matter whatsoever shall remain vested in the Transferor, and the Transferor
shall not be relieved of any of its obligations hereunder as the holder of such
Restricted Securities. In the
-12-
event of such a non-complying Transfer, the Company shall not Transfer any such
Restricted Securities on its books or recognize the purported Transferee as a
stockholder, for any purpose, until all applicable provisions of this Agreement
have been complied with.
Section 4.4. Restrictions on Transfers of Interests in the PCP Entities.
Until the second anniversary of the Initial Closing Date:
A. Each of the PCP Entities shall not register or permit any Transfer
of the membership interests in such entity by Penske Corporation or Penske
Capital Partners, L.L.C., except pursuant to a pro rata Transfer by all of
the members of interests valued at up to $15 million to certain members of
the Company's management (a "Management Incentive Transfer").
B. Penske Corporation and Penske Capital Partners, L.L.C. each agrees
not to Transfer any interest in the PCP Entities or Restricted Securities,
except for a Management Incentive Transfer.
ARTICLE V.
CERTAIN COVENANTS
Section 5.1. Legend on Certificates. Each certificate for Restricted Securities
of PCP shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THAT
CERTAIN STOCKHOLDERS AGREEMENT, BY AND AMONG UNITED AUTO GROUP, INC., TRACE
INTERNATIONAL HOLDINGS, INC., INTERNATIONAL MOTOR CARS GROUP I, L.L.C.,
INTERNATIONAL MOTOR CARS GROUP II, L.L.C., AIF II, L.P. AND AENEAS VENTURE
CORPORATION, A COUNTERPART OF WHICH STOCKHOLDERS AGREEMENT HAS BEEN PLACED
ON FILE BY THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS AND ITS
REGISTERED OFFICE. A COPY OF SUCH STOCKHOLDERS AGREEMENT WILL BE FURNISHED
WITHOUT CHARGE BY THE COMPANY TO THE
-13-
**********************
RECORD HOLDER HEREOF UPON WRITTEN
REQUEST TO THE COMPANY AT THE PRINCIPAL PLACE OF BUSINESS OF THE COMPANY."
Section 5.2 Xxxxx Xxxxxx to Serve as Chairman and Chief Executive Officer.
A. On the Initial Closing Date, the Restricted Stockholders shall use
their reasonable best efforts to have Xxxxx Xxxxxx appointed as Chairman and
Chief Executive Officer of the Company.
B. From and after the Initial Closing Date, the PCP Entities shall
cause Xxxxx Xxxxxx:
1) to serve as the Chairman of the Company until the third
anniversary of the Second Closing Date and as Chief
Executive Officer of the Company until the second
anniversary of the Second Closing Date; provided, however,
such obligation shall cease if pursuant to Sections 2.5 or
2.6, PCP Directors shall no longer constitute a majority of
the Company's Board of Directors, and provided further,
that upon exercise by the PCP Entities of their right
pursuant to Section 7.2 or 7.4 of the Securities Purchase
Agreement, Xxxxx Xxxxxx shall promptly, but in no event
later than the Business Day immediately following such
exercise, resign as Chairman, as a Director and as Chief
Executive Officer;
2) to receive compensation payable by the Company no greater
than: (x) salary of $1 per annum, (y) a bonus determined by
the Compensation Committee of the Board of Directors, and
(z) options for 400,000 shares of Common Stock with an
exercise price of $10.00 per share to be granted on the
Second Closing Date. Such options shall vest in equal
installments over a three year period from and after the
Initial Closing Date, so
-14-
long as Mr. Penske continues to serve as Chairman of the
Board of Directors.
Section 5.3 Approval of Company Action Under the Securities Purchase
Agreement. From and after the Initial Closing Date, all consents, waivers,
amendments or other actions on the part of the Company under the Securities
Purchase Agreement and the other agreements with the PCP Entities contemplated
by the Securities Purchase Agreement shall be undertaken under the direction of
a majority of the Board of Directors (excluding for such purposes the PCP
Directors and any other directors Affiliated with either PCP Entity).
Section 5.4 Trace Shelf Registration Statement.
A. From the date hereof through the third anniversary of the Initial
Closing Date, the Company shall use its reasonable best efforts to maintain
effective a registration statement relating to the sale by Trace of its
Restricted Securities, including, without limitation, filing accountants'
consents and updating the disclosure for material developments.
B. Trace shall reimburse the Company for its reasonable out-of-pocket
expenses incurred in connection with keeping such registration statement
effective.
Section 5.5 Further Assurances. Each of the parties hereto shall use
commercially reasonable efforts to do such additional things and execute such
documents as are reasonably necessary or proper to carry out and effectuate the
intent of this Agreement or any part hereof.
ARTICLE VI.
MUTUAL REPRESENTATIONS AND WARRANTIES
Each of the parties hereto represents and warrants to the others as
follows:
-15-
Section 6.1 Organization. It is duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation, and has all requisite
power and authority to own, lease and operate its assets and properties and to
conduct its business as currently being conducted.
Section 6.2 Authorization, Validity and Enforceability. It has full power
and authority to execute, deliver and perform its obligations under this
Agreement. The execution, delivery and performance by it of this Agreement and
the consummation by it of the transactions contemplated hereby have been duly
authorized by its board of directors or other governing body and no other
proceedings on its part are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by it, and constitutes the legal, valid and binding obligation of it,
enforceable against it in accordance with the terms hereof, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting rights of creditors generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
Section 6.3 No Violation or Breach. Except as set forth on Schedule 6.3, the
execution, delivery and performance by it of this Agreement and the consummation
of the transactions contemplated hereby, do not and will not conflict with,
result in a violation or breach of, constitute a default (or an event which with
the giving of notice or the lapse of time or both would constitute a default) or
give rise to any right of termination or acceleration of any right or obligation
of it under, or result in the creation or imposition of any lien, mortgage,
pledge, security interest, claim, right of first refusal or other limitation on
transfer or other encumbrance upon any of its Restricted Securities by reason of
the terms of, (a) its memorandum of association, certificate of incorporation,
by-laws or other charter or organizational document, (b) any contract,
agreement, lease, license, mortgage, note, bond, debenture, indenture or other
instrument or obligation to which it is a party or by or to which it or its
assets or properties may be bound or subject, (c) any order, writ, judgment,
injunction, award, decree, law, statute, rule or regulation applicable to it
-16-
or (d) any license, permit, order, consent, approval, registration,
authorization or qualification with or under any governmental agency, other than
in the case of clauses (b), (c) or (d) above any conflict, violation, breach or
default which would not, individually or in the aggregate together with all
other such conflicts, violations, breaches or defaults, have a material adverse
effect on it or have a material adverse effect on its ability to perform its
obligations, or consummate the transactions contemplated, hereunder.
Section 6.4 Beneficial Ownership of Common Stock. As of the Initial Closing
Date, such Restricted Stockholder Beneficially Owns the shares of Common Stock
set forth opposite its name on Schedule 6.4.
ARTICLE VII.
TERM
Section 7.1 Term. This Agreement shall commence on the date hereof, and
shall terminate on the earliest of (a) the termination of the Securities
Purchase Agreement, (b) in the event that the Second Closing Date does not occur
on or prior to December 31, 1999, January 1, 2000 and (c) December 31, 2009.
This Agreement shall terminate with respect to a Restricted Stockholder at such
time as it ceases to Beneficially Own any Restricted Securities.
Section 7.2 Effects of Termination. Upon termination of this Agreement, this
Agreement (other than Section 8.9) shall thereafter become void and have no
effect, and no party hereto shall have any liability or obligation to any other
party hereto in respect of this Agreement.
ARTICLE VIII.
MISCELLANEOUS PROVISIONS
Section 8.1 Survival. All of the representations, warranties, covenants, and
agreements of the parties contained in this Agreement shall survive the Initial
Closing Date and the Second
-17-
Closing Date and shall continue in full force and effect forever thereafter.
Section 8.2 Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given (a) when delivered
personally to the recipient, (b) when sent to the recipient by telecopy (receipt
electronically confirmed by sender's telecopy machine) if during normal business
hours of the recipient, otherwise on the next Business Day, (c) one Business Day
after the date when sent to the recipient by reputable express courier service
(charges prepaid), or (d) seven Business Days after the date when mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications shall be sent to the
parties at the addresses indicated below:
If to Apollo: Apollo Advisors, L.P.
0000 Xxxxxx xx xxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
If to Harvard: Aeneas Venture Corporation
c/o Charlesbank Capital Partners, LLC
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Facsimile No. (000) 000-0000
With a copy to(which
shall not constitute
notice): Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx Xxxx
Facsimile No. (000) 000-0000
-18-
If to either
PCP Entity: c/o Penske Capital Partners, L.L.C.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
With a copy to(which
shall not constitute
notice): Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
If to Trace: Trace International Holdings, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Facsimile No.: (000) 000-0000
If to the Company: United Auto Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
Telecopy: (000) 000-0000
With a copy to (which
shall not constitute
notice): Xxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
or to such other address as either party hereto may, from time to time,
designate in writing delivered pursuant to the terms of this Section 8.2.
Section 8.3 Amendments. The terms, provisions and conditions of this
Agreement may not be changed, modified or amended in any manner except by an
instrument in writing duly executed by all of the parties hereto.
-19-
Section 8.4 Assignment and Parties in Interest.
A. Except as provided in Section 4.1(c), neither this Agreement nor
any of the rights, duties, or obligations of any party hereunder may be assigned
or delegated (by operation of law or otherwise) by any party hereto except with
the prior written consent of the other parties hereto.
B. This Agreement shall not confer any rights or remedies upon any
person or entity other than the parties hereto and their respective permitted
successors and assigns; provided, however, that (i) the rights set forth in
Article II hereof shall not inure to the benefit of any transferee (other than a
Permitted Transferee) without the prior written consent of each Restricted
Stockholder (other than the Transferor) and (ii) the provisions of this
Agreement shall not be binding on any Transferee of Restricted Securities except
as set forth in Sections 4.1(c) and 4.2.
Section 8.5 Expenses. Each party to this Agreement shall bear all of its
legal, accounting, investment banking, and other expenses incurred by it or on
its behalf in connection with the transactions contemplated by this Agreement,
whether or not such transactions are consummated.
Section 8.6 Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes and is in full substitution for any and all prior agreements and
understandings among them relating to such subject matter, and no party shall be
liable or bound to the other party hereto in any manner with respect to such
subject matter by any warranties, representations, indemnities, covenants, or
agreements except as specifically set forth herein.
Section 8.7 Descriptive Headings. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
-20-
Section 8.8 Counterparts. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by any one or more parties
hereto, and each such executed counterpart shall be, and shall be deemed to be,
an original, but all of which shall constitute, and shall be deemed to
constitute, in the aggregate but one and the same instrument.
Section 8.9 Governing Law; Jurisdiction.
A. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, applicable to contracts made and
performed therein.
B. Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the State of
New York and the United States of America located in the County of New York for
any action or proceeding arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any action or
proceeding relating thereto except in such courts), and further agrees that
service of any process, summons, notice or document by U.S. registered mail to
is respective address set forth in Section 8.2 shall be effective service of
process for any action or proceeding brought against it in any such court. Each
of the parties hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action or proceeding arising out of this
Agreement or the transactions contemplated hereby in the courts of the State of
New York or the United States of America located in the County of New York, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
Section 8.10 Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument. Furthermore, in lieu of
-21-
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar in
terms to such invalid or unenforceable provision as may be possible and be valid
and enforceable.
Section 8.11 Specific Performance.
A. The parties hereto acknowledge and agree that irreparable damage
would occur in the event that any provision of this Agreement was not performed
in accordance with its specific terms or was otherwise breached, and further
acknowledge and agree that money damages are an inadequate remedy for the breach
of this Agreement because of the difficulty of ascertaining the amount of damage
that would be suffered in the event of such breach. The parties hereto
accordingly agree that they each shall be entitled to obtain specific
performance of any provision of this Agreement and injunctive or other equitable
relief to prevent or cure breaches of any provision of this Agreement, this
being in addition to any other remedy to which they may be entitled by law or
equity.
B. The parties hereto further agree that they shall not be permitted
or have the right to terminate or suspend performance of any provision of this
Agreement, it being agreed that all provisions of this Agreement shall continue
and be specifically enforceable in all events and under all circumstances
regardless of any events, occurrences, actions or omissions before or after the
date hereof. In furtherance of the foregoing, the parties hereto agree that
they shall not be permitted to, and shall not, bring any claim seeking to
terminate or suspend performance of any provision of this Agreement or seeking
any determination that any provision of this Agreement (including, without
limitation, this Section 8.11) is invalid, inapplicable or unenforceable.
[The remainder of this page intentionally left blank.]
-22-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
AIF II, L.P.
By:__________________________
Name:
Title:
AENEAS VENTURE CORPORATION
By:__________________________
Name:
Title:
INTERNATIONAL MOTOR CARS GROUP, I, L.L.C.
By:__________________________
Name:
Title:
INTERNATIONAL MOTOR CARS GROUP, II, L.L.C.
By:__________________________
Name:
Title:
-23-
TRACE INTERNATIONAL HOLDINGS, INC.
By:__________________________
Name:
Title:
UNITED AUTO GROUP, INC.
By:__________________________
Name:
Title:
Solely for the purposes
of Section 4.4 hereof:
PENSKE CORPORATION
By:__________________________
Name:
Title:
PENSKE CAPITAL PARTNERS, L.L.C.
By:__________________________
Name:
Title:
-24-
Schedule 6.3
Contraventions
Trace -- Trace has pledged its Common Stock in the Company to the Bank of Nova
Scotia.
-25-
Schedule 6.4
Beneficial Ownership as of Initial Closing Date
Restricted Stockholder Beneficial Ownership
Apollo
Harvard
PCP I
PCP II
Trace
-26-
