Exhibit 10.2.26
SETTLEMENT AGREEMENT
Dated as of October 3, 1996
among
TRACE INTERNATIONAL HOLDINGS, INC.
(FORMERLY "21" INTERNATIONAL HOLDINGS, INC.)
UAG NORTHEAST, INC.
DIFEO PARTNERSHIP, INC.
DIFEO PARTNERSHIP RCT, INC.
DIFEO PARTNERSHIP HCM, INC.
DIFEO PARTNERSHIP HCT, INC.
DIFEO PARTNERSHIP DM, INC.
DIFEO PARTNERSHIP SCT, INC.
DIFEO PARTNERSHIP RCM, INC.
UNITED AUTO GROUP, INC. (FORMERLY,
EMCO MOTOR HOLDINGS, INC.)
FAIR CADILLAC-OLDSMOBILE CORP.
FAIR CHEVROLET CORP.
FAIR INFINITI, INC.
FAIR IMPORTS CORP.
FAIR HYUNDAI CORP.
FAIR MOTORS CORP.
DANBURY-MT. KISCO SATURN CORP.
XXXXXX TOYOTA, INC.
J & S FORD INC.
DIFEO VOLKSWAGEN INC.
DIFEO HYUNDAI, INC.
J & F OLDSMOBILE CORP.
DIFEO SUBARU, INC.
DIFEO JEEP-EAGLE, INC.
DIFEO IMPORTS, INC.
DIFEO BUICK, INC.
DIFEO AUTOCENTER, INC.
DIFEO LEASING CORPORATION
SOMERSET MOTORS INC.
GATEWAY OLDSMOBILE INC.
DIFEO B.M.W., INC.
COUNTY AUTO GROUP INC.
ROCKLAND MOTORS CORP.
JS1, INC.
JS2, INC.
JS4, INC.
XXXXXX X. XXXXX
and
XXXXXX X. XXXXX
SETTLEMENT AGREEMENT
This Settlement Agreement (the "Agreement") is made as of October 3, 1996
by and among Trace International Holdings, Inc. (formerly "21" International
Holdings, Inc.), a Delaware corporation, UAG Northeast, Inc. ("UAG Northeast"),
a Delaware corporation, DiFeo Partnership, Inc. ("DPI"), a Delaware corporation,
United Auto Group, Inc. ("UAG") (formerly EMCO Motor Holdings, Inc.), a Delaware
corporation, and DiFeo Partnership RCT, Inc., DiFeo Partnership HCM, Inc., DiFeo
Partnership HCT, Inc., DiFeo Partnership DM, Inc., DiFeo Partnership SCT, Inc.,
DiFeo Partnership RCM, Inc., each a Delaware corporation (individually, a "DPI
Subsidiary" and, collectively, the "DPI Subsidiaries"), and Fair Cadillac-
Oldsmobile Corp., Fair Chevrolet Corp., Fair Infiniti, Inc., Fair Imports Corp.,
Fair Hyundai Corp., Fair Motors Corp., Danbury-Mt. Kisco Saturn Corp., Xxxxxx
Toyota Inc., J & S Ford Inc., DiFeo Volkswagen Inc., DiFeo Hyundai Inc., J & F
Oldsmobile Corp., DiFeo Subaru Inc., DiFeo Jeep-Eagle Inc., DiFeo Imports Inc.,
DiFeo Buick Inc., DiFeo Autocenter Inc., DiFeo Leasing Corporation, Somerset
Motors Inc., Gateway Oldsmobile Inc., DiFeo B.M.W., Inc., County Auto Group,
Inc., Rockland Motors Corp., JS1, Inc., JS2, Inc. and JS4, Inc. (individually a
"Corporation" and, collectively, the "Corporations") and Xxxxxx X. XxXxx and
Xxxxxx X. XxXxx (individually, a "Principal" and, collectively, the
"Principals"). UAG Northeast, DPI, UAG, DPI Subsidiaries, the Corporations and
the Principals are referred to collectively herein as "Parties".
PRELIMINARY STATEMENTS. The Parties hereto make the following preliminary
statements:
A. Pursuant to the terms of a certain Master Agreement made as of March
11, 1992 as amended by Amendment No. 1 to the Master Agreement dated October 1,
1992 and by Amendment No. 2 to the Master Agreement dated July 21, 1993 (as so
amended, the "Master Agreement") by and among the Parties, DPI and certain
wholly-owned subsidiaries of DPI entered into certain partnerships (the
"Partnerships") with the Corporations to operate automobile dealerships, as the
franchisees under franchise agreements with various automobile manufacturers and
to lease real property in connection therewith.
B. This Agreement settles certain disputes, claims and issues among the
Parties relative to the Corporations, the Partnerships and certain third parties
and upon the Closing, as hereinafter defined, is intended to supersede the
Master Agreement and all related agreements thereto (including, but not limited
to, all leases, employment and consulting agreements, pledge agreements and such
other ancillary documents executed in connection with the Master Agreement, but
not including the partnership agreements and subleases executed in connection
with the Master Agreement) (collectively with the Master Agreement, the "1992
Transaction Documents") in their entirety.
C. The Parties desire that the transactions contemplated by this
Agreement be implemented through the execution and simultaneous closing of the
transactions contemplated by the 1996 Transaction Documents (as defined in
Section 1.2(b) hereof).
D. The Parties agree that this Agreement and the transactions contemplated
hereunder are subject to UAG consummating its initial public offering (the
"Initial Public Offering") by December 31, 1996.
NOW, THEREFORE, in consideration of the mutual agreements and on the terms
and conditions contained herein, and intending to be legally bound, the Parties
hereby agree as follows:
ARTICLE 1
EFFECT OF SETTLEMENT AGREEMENT AND CLOSING
Section 1.1 EFFECT OF AGREEMENT. Upon the Closing (as hereinafter
defined) and execution of the 1996 Transaction Documents contemplated hereunder
and subject to the fulfillment (or waiver) of the conditions specified in
Article 5 herein, the 1992 Transaction Documents and the non-binding Memorandum
of Understanding executed by UAG and the Principals on August 7, 1996 shall be
superseded by this Agreement and the 1996 Transaction Documents in their
entirety.
From and after the Closing, the 1992 Transaction Documents and the
Memorandum of Understanding executed by UAG and the Principals on August 7, 1996
shall be
-2-
considered terminated and shall no longer be in force and effect.
Section 1.2 CLOSING. (a) The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Xxxxxx & Xxxxxx, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or at such different location as the
Parties shall mutually agree), at such time and date as the Parties shall
mutually agree, so long as such date is not later than December 31, 1996,
provided that all conditions to the obligations of the Parties to consummate the
transactions contemplated hereby (other than conditions with respect to actions
the Parties will take at the Closing itself) have been satisfied or waived (the
"Closing Date"). All of the actions contemplated to be taken pursuant to this
Agreement on the Closing Date and taken or occurring on such date shall be
deemed to occur simultaneously.
(b) At the Closing, the following transaction documents (the "1996
Transaction Documents") associated with this Agreement shall be delivered by
each of the parties thereto:
(i) A Merger Agreement as to each of the Mergers referred to in
Section 6.2 in the form attached hereto as EXHIBIT 6.2;
(ii) B Reorganization Agreements referred to in Section 6.2;
(iii) UAG Options referred to in Section 6.1 in the form attached
hereto as EXHIBIT 6.1;
(iv) Registration Rights Agreement referred to in Section 6.1 in the
form attached hereto as EXHIBIT 6.1(A);
(v) Consulting Agreements with respect to Xxxxxx XxXxx, Xx. and
Xxxxxx X. XxXxx referred to in Section 7.2;
(vi) Employment Agreement of Xxxxxx X. XxXxx referred to in Section
7.3;
(vii) Partnership Exchange Agreement and related documents and
instruments referred to in Article 8;
-3-
(viii) Leases referred to in Article 11;
(ix) Assignment of Claims Agreement and related documents referred to
in Article 9; and
(x) Assignment and Assumption Agreement and related documents
referred to in Article 13.
(c) ADDITIONAL DELIVERIES OF UAG, UAG NORTHEAST, DPI AND DPI SUBSIDIARIES.
At the Closing, UAG, UAG Northeast, DPI and DPI Subsidiaries shall deliver the
following additional documents to the Principals and Corporations:
(i) A certificate of good standing regarding each of UAG, UAG
Northeast, DPI and DPI Subsidiaries dated as of a recent date and issued by
the Secretary of State of the State of Delaware;
(ii) A closing certificate by UAG, UAG Northeast, DPI and DPI
Subsidiaries dated as of the Closing Date to the effect that each of the
conditions specified in Article 5 are satisfied in all material respects;
(iii) A certificate of authority and incumbency with respect to the
authority of the officers of UAG, UAG Northeast, DPI and DPI Subsidiaries
executing any Closing documents, in a form reasonably acceptable to the
Principals and Corporations;
(iv) A legal opinion of counsel to UAG, UAG Northeast, DPI and DPI
Subsidiaries in a form reasonably acceptable to the Principals and
Corporations; and
(v) Such other documents, certificates and instruments as may
reasonably be requested by the Principals and Corporations.
(d) ADDITIONAL DELIVERIES OF THE PRINCIPALS AND CORPORATIONS. At the
Closing, the Principals and Corporations shall deliver the following additional
documents to UAG, UAG Northeast, DPI and DPI Subsidiaries:
-4-
(i) A certificate of good standing regarding each of the Corporations
dated as of a recent date and issued by the Secretary of State of the State
of its incorporation;
(ii) A closing certificate by the Principals and Corporations dated
as of the Closing Date to the effect that each of the conditions specified
in Article 5 are satisfied in all material respects;
(iii) A certificate of authority and incumbency with respect to the
officers of the Corporations, in a form reasonably acceptable to UAG, UAG
Northeast, DPI and DPI Subsidiaries;
(iv) A legal opinion of counsel to the Principals and Corporations,
in a form reasonably acceptable to UAG, UAG Northeast, DPI and DPI
Subsidiaries; and
(v) Such other documents, certificates and instruments as may
reasonably be requested by UAG, UAG Northeast, DPI and DPI Subsidiaries.
Section 1.3 METHOD OF PAYMENT. Any and all payments to be made under this
Agreement and the agreements related thereto shall, unless otherwise specified
herein or therein, be made in lawful money of the United States and in funds
immediately available by wire transfer to the account specified by the party to
receive such payment.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF
UAG, UAG NORTHEAST, DPI AND DPI SUBSIDIARIES
UAG, UAG Northeast, DPI and DPI Subsidiaries jointly and severally
represent and warrant to the Corporations and the Principals, as of the date of
this Agreement and as of the Closing Date, as follows:
Section 2.1 CORPORATE STATUS. Each of UAG, UAG Northeast, DPI and DPI
Subsidiaries is or upon the Closing shall be a corporation which is duly
-5-
incorporated, validly existing and in good standing under the laws of the State
of Delaware.
Section 2.2 POWER AND AUTHORITY. Each of UAG, UAG Northeast, DPI and DPI
Subsidiaries has or upon the Closing shall have the corporate power and
authority to execute, deliver and perform this Agreement and this Agreement and
all transactions contemplated hereby have or will have been duly and validly
authorized by all necessary corporate action on the part of UAG, UAG Northeast,
DPI and DPI Subsidiaries and by all necessary partnership action on the part of
the Partnerships.
Section 2.3 BINDING AGREEMENT. When executed and delivered by UAG, UAG
Northeast, DPI and DPI Subsidiaries, this Agreement shall be the valid and
binding obligation of each of UAG, UAG Northeast, DPI and DPI Subsidiaries,
enforceable in accordance with its terms.
Section 2.4 CONSENTS. There are no (i) consents, approvals,
authorizations or other actions of, or filings with, any court, governmental
authority or regulatory body and (ii) approvals, authorizations or orders of any
person under any material permits, licenses, contracts, decrees or other
restrictions to which UAG, UAG Northeast, DPI, DPI Subsidiaries or any of the
Partnerships is party, which UAG, UAG Northeast, DPI or DPI Subsidiaries or the
Partnerships shall have not obtained, taken or filed prior to the Closing Date
that are required to be obtained, taken or filed in order for this Agreement to
be executed and delivered and the transactions contemplated hereby to be
consummated.
Section 2.5 ABSENCE OF CONFLICT OR BREACH. The execution, delivery and
performance of this Agreement does not and shall not conflict with or result in
a breach of any of the terms, conditions or provisions of any judgment, order,
injunction, decree or ruling of any court or arbitration tribunal or
governmental authority to which UAG, UAG Northeast, DPI or DPI Subsidiaries is
subject, or of any provision of any agreement or understanding or arrangement to
which UAG, UAG Northeast, DPI or DPI Subsidiaries is a party or by which UAG,
UAG Northeast, DPI or DPI Subsidiaries is bound, which would interfere with
UAG's, UAG
-6-
Northeast's, DPI's or DPI Subsidiaries' ability to execute, deliver and
perform under this Agreement and the 1996 Transaction Documents.
Section 2.6 BROKERS' FEES. Neither UAG, UAG Northeast, DPI nor DPI
Subsidiaries has any liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement for which the Corporations or Principals could become liable or
obligated.
Section 2.7 LITIGATION. There is no outstanding order, writ, judgment,
stipulation, injunction, decree or determination before or by any court or
arbitration tribunal or governmental authority against UAG, UAG Northeast, DPI
and DPI Subsidiaries and there are no claims, actions, suits, investigations or
proceedings of any kind pending, or to the knowledge of the UAG, UAG Northeast,
DPI and DPI Subsidiaries, threatened before any court or arbitration tribunal or
governmental authority that seek to restrain, enjoin, or otherwise prevent the
consummation of the transactions contemplated by this Agreement.
Section 2.8 CAPITALIZATION. The outstanding capital stock of UAG consists
of (a) 3,593,750 shares of Voting Common Stock, par value $0.0001 per share (the
"UAG Common Stock"); (b) 5,227,346 shares of Class A Convertible Preferred
Stock, par value $0.0001 per share (the "Class A Convertible Preferred Stock").
UAG has granted Warrants for 1,016,099 shares of UAG Common Stock and Warrants
for 93,747 shares of Class A Convertible Preferred Stock. UAG has granted
options to purchase 873,000 shares of UAG Common Stock. Except as described in
this Agreement, there are no other options, warrants, conversion privileges or
other contractual rights presently outstanding to purchase any of the authorized
but unissued capital stock of UAG. All outstanding shares of UAG Common Stock
and Class A Convertible Preferred Stock were issued in compliance with all
federal and state securities laws.
In the event that the capitalization of UAG described herein changes on or
prior to the Closing, UAG shall immediately notify the Principals of such
changes, and the consideration to be received by the Principals at the Closing
will be adjusted so that the
-7-
Principals, in fact, receive 2% of the UAG Common Stock as contemplated in
Article 6.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE CORPORATIONS
Each of the Corporations and the Principals jointly and severally represent
and warrant to UAG, UAG Northeast, DPI and DPI Subsidiaries that:
Section 3.1 CORPORATE STATUS. Each of the Corporations is or upon the
Closing shall be a corporation which is duly incorporated, validly existing and
in good standing under the laws of the State of its incorporation.
Section 3.2 POWER AND AUTHORITY. Subject to Section 4.4 of Article 4,
each of the Corporations has or upon the Closing shall have the corporate power
and authority to execute, deliver and perform this Agreement, and this Agreement
and all transactions contemplated hereby have or will have been duly and validly
authorized by all necessary action on the part of each of the Corporations.
Section 3.3 BINDING AGREEMENT. When executed and delivered by the
Corporations and Principals, this Agreement shall be the valid and binding
obligation of the Principals, and, subject to Section 4.4 of Article 4, each of
the Corporations, enforceable in accordance with its terms.
Section 3.4 CONSENTS. There are no (a) consents, approvals,
authorizations, or other actions of, or filings with, any court, governmental
authority or regulatory body and (b) approvals, authorizations or orders of any
person under any material permits, licenses, contracts, decrees or other
restrictions to which any of the Corporations is a party, which the Corporations
or the Principals shall have not obtained, taken or filed prior to the Closing
Date that are required to be obtained, taken or filed in order for this
Agreement to be executed and delivered and the transactions contemplated hereby
to be consummated,
-8-
except for any manufacturer consents which UAG and its affiliates shall have
obtained prior to the Closing.
Section 3.5 ABSENCE OF CONFLICT OR BREACH. The execution, delivery and
performance of this Agreement do not and shall not conflict with or result in a
breach of any of the terms, conditions or provisions of any judgment, order,
injunction, decree or ruling of any court or arbitration tribunal or
governmental authority to which each of the Corporations or the Principals is
subject, or, subject to Section 4.4 of Article 4, of any provision of any
agreement or understanding or arrangement to which each of the Corporations or
the Principals is a party or by which each of the Corporations or the Principals
is bound, which would interfere with the Corporations' and Principals' ability
to execute, deliver and perform under this Agreement and the 1996 Transaction
Documents.
Section 3.6 BROKERS' FEES. Neither any Corporation nor any Principal has
paid or will become obligated to pay any fee or commission to any broker,
finder, consultant or other intermediary for or on account of the transactions
provided for in this Agreement.
Section 3.7 LITIGATION. There is no outstanding order, writ, judgment,
stipulation, injunction, decree or determination before or by any court or
arbitration tribunal or governmental authority against any of the Corporations
or the Principals, and there are no claims, actions, suits, investigations or
proceedings of any kind pending, or to the knowledge of any of the Corporations
or the Principals, threatened, before any court or arbitration tribunal or
governmental authority that would seek to restrain, enjoin or otherwise prevent
the consummation of the transactions contemplated by this Agreement.
Section 3.8 INVESTMENT REPRESENTATIONS.
(a) The UAG Common Stock will be acquired for the Principals' own
accounts not as a nominee or agent, and not with a view to, or for resale in
connection with, any "distribution" thereof for purposes of the Securities Act
of 1933, as amended (the
-9-
"Securities Act"), except in compliance with the Securities Act.
(b) The Principals understand that the UAG Common Stock will not be
registered under the Securities Act for purposes of the sale contemplated
herein.
(c) Each of the Principals is an "accredited investor" as that term
is defined in Regulation D promulgated under the Securities Act.
ARTICLE 4
COVENANTS
The Parties agree as follows with respect to the period from and after
execution of this Agreement:
Section 4.1 FURTHER ASSURANCES. Each of the Parties shall, without
further consideration, take all reasonable actions and do all things reasonably
necessary in order to consummate and make effective the transactions
contemplated by the Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in Article 5 below), and to that end, shall share
such information and documents as reasonably required to adequately address any
tax, accounting, financial and legal issues incident to the agreements provided
herein and the transactions contemplated thereby.
Section 4.2 NOTICE OF DEVELOPMENTS. Each Party will give prompt written
notice to the other of any material adverse development causing a breach of any
of its own representations and warranties in Articles 2 and 3 above.
Section 4.3 THIRD PARTY CONSENTS. The Parties shall cooperate with one
another in obtaining and shall use reasonable efforts to obtain consents and
approvals from third parties with respect to the transactions contemplated by
this Agreement.
Section 4.4 MINORITY SHAREHOLDERS. The Parties acknowledge that UAG and
its affiliates are currently in discussions with certain minority shareholders
of
-10-
the Corporations (the "Minority Shareholders") in connection with securing their
consent to, or as required, their approval of, the transactions contemplated
hereunder. Certain of the representations and warranties and covenants of the
Principals and Corporations hereunder may be subject to UAG and its affiliates
obtaining such consents or approvals. UAG shall use, and shall cause its
affiliates to use, reasonable efforts to obtain such consents and approvals and
the Principals shall reasonably cooperate and assist UAG in such efforts.
ARTICLE 5
CONDITIONS TO CLOSING
Section 5.1 CONDITIONS TO OBLIGATIONS OF UAG, UAG NORTHEAST, DPI AND DPI
SUBSIDIARIES. The obligations of the UAG, UAG Northeast, DPI and DPI
Subsidiaries to consummate the transactions contemplated hereunder shall be
subject to the fulfillment (or waiver by UAG, UAG Northeast, DPI and DPI
Subsidiaries), on or prior to the Closing Date, of the following additional
conditions, which the Corporations and Principals agree to use their respective
reasonable efforts to cause to be fulfilled:
Section 5.1.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in Article 3 hereof shall be true and correct in all
material respects on and as of the date hereof and shall be true and correct in
all material respects on and as of the Closing Date with the same effect as
though made on and as of the Closing Date.
Section 5.1.2 COVENANTS. The Corporations and Principals shall have
performed and complied with all of their covenants contained in Article 4 hereof
in all material respects through the Closing.
Section 5.1.3 CONSENTS. Each of the Corporations and Principals
shall have obtained and delivered to UAG, UAG Northeast, DPI and DPI
Subsidiaries any governmental or third party consents, authorizations or
approvals to the transactions contemplated by this Agreement required to be
obtained by each of the Corporations and Principals.
-11-
Section 5.1.4 INITIAL PUBLIC OFFERING. All conditions to the closing
of the Initial Public Offering shall have been satisfied or waived.
Section 5.1.5 DELIVERY OF ALL DOCUMENTS. At the Closing, the
Corporations and Principals shall have delivered all the documents, certificates
and other deliveries set forth in Article 1 hereof.
Section 5.2 CONDITIONS TO OBLIGATIONS OF THE CORPORATIONS AND PRINCIPALS.
The obligations of the Corporations and Principals to consummate the
transactions contemplated hereunder shall be subject to the fulfillment (or
waiver by the Corporations and Principals), on or prior to the Closing Date, of
the following additional conditions, which UAG, UAG Northeast, DPI and DPI
Subsidiaries agree to use their respective reasonable efforts to cause to be
fulfilled:
Section 5.2.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of UAG, UAG Northeast, DPI and DPI Subsidiaries contained in
Article 2 hereof shall be true and correct in all material respects on and as of
the date hereof and shall be true and correct in all material respects on and as
of the Closing Date with the same effect as though made on and as of the Closing
Date.
Section 5.2.2 COVENANTS. UAG, UAG Northeast, DPI and DPI
Subsidiaries shall have performed and complied with all of their respective
covenants contained in Article 4 hereof in all material respects through the
Closing.
Section 5.2.3 CONSENTS. UAG, UAG Northeast, DPI and DPI Subsidiaries
shall have obtained and delivered to the Corporations and Principals any
governmental or third party consents, authorizations or approvals, including any
manufacturer consents, to the transactions contemplated by this Agreement
required to be obtained by UAG, UAG Northeast, DPI, DPI Subsidiaries or the
Partnerships.
Section 5.2.4 INITIAL PUBLIC OFFERING. All conditions to the closing
of the Initial Public Offering shall have been satisfied or waived.
-12-
Section 5.2.5 DELIVERY OF ALL DOCUMENTS. At the Closing, UAG, UAG
Northeast, DPI and DPI Subsidiaries shall have delivered all the documents,
certificates and other deliveries set forth in Article 1 hereof.
Section 5.2.6 CONSENTS OF MINORITY SHAREHOLDERS. Any consents of the
Minority Shareholders necessary to consummate the transactions contemplated
hereby shall have been obtained.
ARTICLE 6
REORGANIZATIONS
Section 6.1 REORGANIZATIONS. At the Closing, (i) each of the Corporations
identified on SCHEDULE 6.1 hereto will merge with and into a wholly-owned
subsidiary of UAG (collectively, the "Buyers") in reorganizations pursuant to
Section 368(a)(2)(D) of the Internal Revenue Code (the "Code") (collectively,
the "Mergers") and (ii) DiFeo Partnership, Inc. will acquire 100% of the capital
stock of Xxxxxx Toyota, Inc. and DiFeo Partnership, Inc. will acquire 100% of
the capital stock of Somerset Motors Inc. in reorganizations pursuant to Section
368(a)(1)(B) of the Code (the "B Reorganizations"). At the Closing, the
Principals will receive (a) pursuant to the Mergers and the B Reorganizations,
an aggregate number of shares of UAG Common Stock equal to the number of shares
that will represent 2% of the shares of UAG Common Stock outstanding immediately
prior to the Initial Public Offering, on a fully diluted basis (but without
regard to other Minority Roll-ups, as defined in the prospectus for the Initial
Public Offering, options to acquire up to 200,000 shares of UAG Common Stock to
be granted at the public offering price, and the shares issuable hereunder) and
(b) pursuant to the Mergers, options ("UAG Options"), in the form attached
hereto as EXHIBIT 6.1, to acquire an amount of shares of UAG Common Stock equal
to $1,500,000 divided by the initial price to the public of the UAG Common Stock
specified in the final prospectus with respect to the Initial Public Offering.
The UAG Common Stock and the shares of UAG Common Stock issuable on the exercise
of the UAG Options will be entitled to the benefits of the Registration Rights
Agreement by and between UAG and
-13-
the Principals, in the form attached hereto as EXHIBIT 6.1(A), provided however,
that in the event that UAG is unable to provide the registration rights provided
for in Section 1.3 of such Registration Rights Agreement with respect to
registrations demanded by any UAG stockholders having demand registration
rights, then UAG shall provide the Principals with such alternative
consideration as may be agreed upon between UAG and the Principals as
representing the fair value of such rights.
Section 6.2 MERGER AGREEMENTS. Each of the Mergers referred to in Section
6.1 will be evidenced by an Agreement and Plan of Merger substantially in the
form attached hereto as EXHIBIT 6.2 (the "Merger Agreement"). The B
Reorganizations will be evidenced by an agreement, which shall contain
representations and warranties and covenants and other material terms
substantially similar to the terms and conditions in the Merger Agreements (the
"B Reorganization Agreements").
ARTICLE 7
EMPLOYMENT AND CONSULTING ARRANGEMENTS
Section 7.1 CURRENT SALARY ARRANGEMENTS. The current salary arrangements
of each of Xxxxxx X. XxXxx (at a rate of $200,000 per year) and Xxxxxx XxXxx,
Xx. (at a rate of $50,000 per year) shall continue through December 31, 1996.
Xxxxx Xxxxxxxxxxxx'x current salary arrangement shall continue through the
Closing and, thereafter, UAG shall pay or reimburse J&S Ford, Inc. on account of
salary for Xxxxx Xxxxxxxxxxxx through December 31, 1996 at an annual rate of
$50,000. Xxxxxx X. XxXxx shall receive a base salary at the rate of $225,000
per annum for the period October 1, 1995 through December 31, 1996.
Section 7.2 CONSULTING AGREEMENTS. Xxxxxx XxXxx, Xx. and Xxxxxx X. XxXxx
shall enter into 5 year and 3 year consulting agreements ("Consulting
Agreements"), respectively, with UAG at the rate of $50,000 per year. The
Consulting Agreements shall commence on January 1, 1997 and shall be on terms
and conditions mutually satisfactory to the parties and consistent with this
Agreement. Xxxxx Xxxxxxxxxxxx may
-14-
enter into a consulting agreement for the periods after December 31, 1996 with
UAG, if at all, on terms and conditions mutually agreeable to UAG and Xxxxx
Xxxxxxxxxxxx.
Section 7.3 EMPLOYMENT AGREEMENT OF XXXXXX X. XXXXX. From and after
January 1, 1997, Xxxxxx X. XxXxx shall continue to be employed by UAG on terms
and conditions mutually satisfactory to the parties and consistent with this
Agreement ("Employment Agreement").
ARTICLE 8
PARTNERSHIP EXCHANGES
Section 8.1 TRANSFER OF PARTNERSHIP INTERESTS. The Principals and UAG
shall take such steps as shall be necessary to cause the transfer by: J & F
Oldsmobile Corp., Fair Hyundai Corp. and JS1, Inc. of their respective interests
in J&F Oldsmobile-Isuzu Partnership; and Fair Hyundai Partnership and Fair
Chevrolet-Geo Partnership; and DiFeo Nissan Partnership and DiFeo Chevrolet-Geo
Partnership to UAG or its affiliates in exchange for the interests of UAG in
each of DiFeo Imports Partnership ("Mitsubishi"), DiFeo Buick-Pontiac-GMC
Partnership ("Buick"), and North Jersey-Manhattan Saturn Partnership and
Engelwood Saturn Partnership (collectively, "Saturn"), as well as those certain
notes of Xxxxxxx Xxxxx Managment Group, Inc. payable to DPI and DiFeo
Partnership HCM, Inc. in the original principal amounts of $60,957.40 and
$53,842.60 respectively (collectively, the "Xxxxxxx Notes") issued pursuant to
the Amended and Restated Master Agreement dated as of September 15, 1994
(referenced hereinafter). In addition, UAG shall confirm that all prior
advances made by UAG to Buick and Mitsubishi were made as capital contributions
to said Partnerships. Further, in the event UAG shall fail to transfer or cause
the transfer of Saturn by reason of its inability to obtain manufacturer
approval, or otherwise, on or before the Closing Date or such other date as
mutually agreed upon between UAG and the Principals, but in all events not later
than December 31, 1996, UAG and the Principals shall mutually agree on
alternative consideration payable to the Principals commensurate with the value
of UAG's
-15-
interest in Saturn. UAG shall insure that with respect to each of Buick,
Mitsubishi and Saturn the minimum net working capital standard of each
manufacturer shall be met on the date of transfer of each of Buick, Mitsubishi
and Saturn, PROVIDED, HOWEVER, that the Parties acknowledge UAG's objective of
aggregating capital among said Partnerships for purposes of calculating any
amount required to be funded by UAG to satisfy the aggregate minimum net working
capital requirements of said Partnerships, and PROVIDED FURTHER, HOWEVER, that
in the event the holders of the Xxxxxxx interests in said Partnerships shall
fail to exercise their right to additional ownership interests in said
Partnerships, any aggregating of capital shall only occur with respect to Buick
and Mitsubishi, and UAG shall otherwise satisfy the minimum net working capital
requirements of Saturn, PROVIDED FURTHER, HOWEVER, that in the event UAG shall
fail to transfer or cause the transfer of Saturn, UAG shall aggregate capital
only with respect to Buick and Mitsubishi.
Nothing contained in this Section 8.1 or elsewhere in this Agreement shall
affect or otherwise be deemed to amend, modify or supersede in any respect the
rights and obligations of the parties to that certain Amended and Restated
Master Agreement dated as of September 15, 1994 among Xxxxxxx-Xxxxx Management
Group, Inc. and affiliates of UAG and the Principals.
Section 8.2 PARTNERSHIP EXCHANGE AGREEMENT. In order to effectuate the
partnership exchanges contemplated in Section 8.1, the parties referred to
therein shall enter into a partnership exchange agreement (the "Partnership
Exchange Agreement") in a form acceptable to such parties, which shall contain
representations and warranties and covenants and other material terms
substantially similar to the terms and conditions in the Merger Agreements.
ARTICLE 9
ASSIGNMENT OF CLAIMS
Section 9.1 ASSIGNMENT OF CLAIMS. In full settlement and release of
certain disputes between the Principals and certain affiliates of the
Principals, on the one hand, and UAG and affiliates of UAG, on the
-16-
other hand, regarding partnership allocations, capital requirements, accounting
adjustments and other similar matters, UAG and their affiliates shall assign all
claims held by UAG and affiliates of any kind or nature against the Principals
and/or their affiliates to the Principals, and the Principals shall assign all
claims held by the Principals of any kind or nature against UAG and its
affiliates to UAG, in each case to the extent arising prior to the Closing,
pursuant to an assignment of claims agreement (the "Assignment of Claims
Agreement") in a form reasonably satisfactory to said parties.
ARTICLE 10
J & S FORD, INC.
Section 10.1 J & S FORD, INC. The Principals shall not be required to
consummate the legal transfer of J&S Ford, Inc. to UAG as originally
contemplated by the parties to the Master Agreement, and the Principals shall
retain all right, title and interest in J&S Ford, Inc. and UAG shall have no
interest, legal or otherwise, therein. To that end, UAG shall take any and all
of the requisite steps to (i) relinquish control over any cash accounts and
other assets of J&S Ford, Inc. and (ii) insure that J&S Ford, Inc. has net
working capital, as of October 1, 1996 of $1,400,000 determined in accordance
with the manufacturer's accounting method, with an adjustment to said $1,400,000
for delinquent receivables and obsolete parts (obsolete parts shall be parts
regarding which no activity has occurred since December 31, 1995, and delinquent
receivables shall be receivables on the books of J&S Ford, Inc. on December 31,
1995 and remaining outstanding on October 1, 1996), and all calculations shall
be made exclusive of all intercompany accounts.
ARTICLE 11
LEASES
Section 11.1 LEASES. The Principals and UAG shall cause the cancellation
of certain leases identified on SCHEDULE 11.1 hereto among the Principals
-17-
and/or certain affiliates of the Principals, on the one hand, and certain of the
Partnerships, on the other hand, and shall cause the Principals and/or certain
affiliates of the Principals, as landlords, and UAG, or certain affiliates of
UAG, as tenants, to enter into new leases as identified on SCHEDULE 11.1(A), to
be evidenced by leases in the form attached hereto as EXHIBIT 11.1 (the
"Lease"), which leases shall contain INTER ALIA, the following terms:
(a) The term of such leases shall be for a period of 15 years,
commencing as of October 1, 1995;
(b) Effective as of October 1, 1995, an increase in the aggregate
rental rates of such leases of $250,000 over all other minimum rent increases
provided for in the leases among the Principals and/or certain affiliates of the
Principals, on the one hand, and certain of the Partnerships, on the other hand,
which were in full force and effect on September 1, 1995; thus, the rental rate
increase applicable as of October 1, 1995 shall be in the aggregate amount of
$495,000;
(c) Annual rent under such leases shall be increased on October 1 of
each year commencing on October 1, 1996 by the greater of 2% of the rent as of
the September 1 immediately prior thereto, or 75% of (i) the percentage
increase, if any in the Consumer Price Index for Urban Consumers-New
York-Northeastern New Jersey ("CPI-U") for the month of September of the year of
calculation over (ii) the CPI-U for September of the year prior to the year of
calculation;
(d) All obligations of "tenant" under such leases shall be guaranteed
by UAG to the extent UAG is not the actual tenant of any such lease;
(e) UAG shall pay or cause to be paid all rent then due and payable
pursuant to such new leases on or prior to the Closing Date; and
(f) If agreed to by UAG and the Principals, UAG shall provide
security on account of security deposit obligations under the new leases in form
and amount mutually acceptable to UAG and the Principals.
-18-
ARTICLE 12
AUTOMOBILE STORAGE SPACE
Section 12.1 AUTOMOBILE STORAGE SPACE. The lease for the property located
at 000 Xxxxx 000 Xxxx, Xxxxxx Xxxx, Xxx Xxxxxx shall exclude an area sufficient
for the Principals to park up to 250 vehicles and shall include such reservation
of ingress and egress as may be necessary to access the storage area.
Section 12.2 XXXXXXXX BUILDING AND LEASE. At no cost to J&S Ford, Inc.,
UAG shall take such steps as reasonably necessary to (i) allow J&S Ford, Inc. to
use certain real property in Jersey City, New Jersey referred to as the XxXxxxxx
Building, together with its contents, and (ii) undertake and perform all
obligations under the current lease of the XxXxxxxx Building for the benefit of
J&S Ford, Inc., in each instance until the earlier of the expiration of said
lease of the XxXxxxxx Building, the termination of the Principals' majority
ownership of J&S Ford, Inc. or the subletting by UAG of said property to a third
party on six (6) months prior notice to J&S Ford, Inc. on terms and conditions
comparable to the terms and conditions in said lease.
ARTICLE 13
TRANSFER OF GATEWAY PARTNERSHIPS
Section 13.1 TRANSFER OF GATEWAY PARTNERSHIPS. The Principals shall cause
JS4, Inc. to transfer all of its respective partnership interests in the OCT
Partnership (i.e., Gateway Toyota) and the OCM Partnership (i.e., Gateway
Mitsubishi) to UAG or a designated affiliate of UAG on or prior to Closing Date
pursuant to an assignment and assumption agreement (the "Assignment and
Assumption Agreement") in a form reasonably satisfactory to said parties which
shall have representations, warranties and covenants and other material terms
substantially similar to the terms and conditions in the Merger Agreement in
full and final satisfaction of any and all outstanding obligations of the
Principals and/or affiliates of the Principals to UAG and affiliates of UAG,
including the
-19-
respective Partnerships, relative to the acquisition of the automobile
dealerships owned by such Partnerships.
ARTICLE 14
PARTNERSHIP TAX DISTRIBUTIONS
Section 14.1 PARTNERSHIP TAX DISTRIBUTIONS. UAG has paid or has caused
the Partnerships to distribute $600,000 to the Principals on behalf of the
Corporations on account of tax distributions pursuant to Section 5.2 of the
partnership agreements relative to the Partnerships for years 1992, 1993 and
1994 (receipt of which is acknowledged by the Corporations and Principals) and
UAG shall pay or shall cause the Partnerships to make tax distributions to the
Principals on behalf of the Corporations consistent with Section 5.2 of such
partnership agreements on account of tax distributions for 1995 in the aggregate
amount of $206,557, and UAG shall pay or cause the Partnerships to make tax
distributions to the Principals on behalf of the Corporations with respect to
any additional income allocated to the Corporations for the years 1992-1995
pursuant to tax audits, or on account of any income allocated to the
Corporations for 1996 for the period prior to the Closing, including, without
limitation, on account of any LIFO recapture.
ARTICLE 15
DEALERSHIP LIQUIDITY CONTRIBUTIONS
Section 15.1 RETURN OF DEALERSHIP LIQUIDITY CONTRIBUTIONS. UAG has
caused, and the Principals acknowledge that UAG has caused, the Partnerships to
return to the Principals their respective Dealership Liquidity Contributions
referenced in the Master Agreement in the aggregate amount of $400,000, together
with interest thereon at the rate of 6% from October 1, 1992 through the date of
payment hereunder.
-20-
ARTICLE 16
LEGAL FEES
UAG shall directly pay Xxxxxx & Xxxxxx all of its reasonable legal fees and
disbursements charged and incurred by it on behalf of its representation of the
Corporations, the Principals and the affiliates of the Principals in connection
with this Agreement and the transactions contemplated thereby.
ARTICLE 17
INDEMNIFICATION AND RELEASES
Section 17.1 INDEMNIFICATION OF THE CORPORATIONS AND PRINCIPALS. Except
for the Special Tax Indemnity provided for in Section 7.3 of the Merger
Agreements (and the corresponding sections of the B Reorganization Agreements,
Partnership Exchange Agreement and Assignment and Assumption Agreement), UAG,
UAG Northeast, DPI and DPI Subsidiaries, jointly and severally, shall defend,
indemnify and hold the Corporations and the Principals harmless from and against
any and all claims, liabilities, obligations, whether absolute, accrued,
contingent or otherwise and whether a contractual or any other type of
liability, obligation or claim (other than income tax liabilities of the
Principals arising from the transactions contemplated by this Agreement)
including, without limitation, all damages, losses and expenses, reasonable fees
of experts and attorneys and all costs of suit, suffered or incurred or to be
suffered or incurred by the Corporations and Principals (i) arising out of the
breach of any or all representations and warranties and covenants made by or on
behalf of UAG, UAG Northeast, DPI and DPI Subsidiaries in this Agreement or in
any document delivered hereunder; (ii) arising from any and all liabilities,
claims, guarantees or demands with respect to any indebtedness or obligations of
the Partnerships and Corporations; (iii) arising from any and all personal
guarantees of liabilities relative to floor plans and other loans from GMAC or
any other lender with respect to any indebtedness or obligations of the
Partnerships and Corporations; (iv) arising out of or in connection with any
outstanding issues with respect to any of the
-21-
Minority Shareholders relative to their respective ownership interests in
certain of the Corporations, (v) arising out of any claims or demands asserted
by the holders of the Xxxxxxx interests relative to their interests in Buick,
Mitsubishi and Saturn and (vi) arising out of or in connection with any claims
under the Securities Act or any other law administered by the Securities and
Exchange Commission or any State securities commission, whether asserted by a
private party or any such governmental authority relating to any private or
public offering of securities by UAG.
Section 17.2 INDEMNIFICATION OF UAG, UAG NORTHEAST, DPI AND DPI
SUBSIDIARIES. Except for the Special Tax Indemnity provided for in Section 7.3
of the Merger Agreements (and the corresponding sections of the B Reorganization
Agreements, Partnership Exchange Agreement and Assignment and Assumption
Agreement), the Principals jointly and severally, shall defend, indemnify and
hold UAG, UAG Northeast, DPI and DPI Subsidiaries harmless from and against any
and all claims, liabilities, obligations, whether absolute, accrued, contingent
or otherwise and whether a contractual or any other type of liability,
obligation or claim including, without limitation, all damages, losses and
expenses, reasonable fees of experts and attorneys and all costs of suit,
suffered or incurred or to be suffered or incurred by UAG, UAG Northeast, DPI
and DPI Subsidiaries arising out of the breach of any or all representations and
warranties and covenants made by the Principals and the Corporations in this
Agreement and all documents delivered pursuant to this Agreement, including, but
not limited to, the Merger Agreements, the B Reorganization Agreements and the
Partnership Exchange Agreement.
Section 17.3 INDEMNIFICATION PROCEDURE. A party seeking indemnification
pursuant to this Article 17 (an "indemnified party") shall give prompt notice to
the party from whom such indemnification is sought (the "indemnifying party") of
the assertion of any claim, or the commencement of any action or proceeding, in
respect of which indemnity may be sought hereunder. The indemnifying party
shall have the right to assume the defense (in consultation and cooperation with
the indemnified party, in good faith and to the extent appropriate under the
circumstances) of any such suit, action or proceeding at its own expense. If an
-22-
indemnifying party shall elect not to assume the defense of any such suit,
action or proceeding, the indemnified party may assume such defense at the
expense of the indemnifying party. An indemnifying party shall not be liable
under this Article 17 for any settlement effected without its consent of any
claim, litigation or proceeding in respect of which indemnity may be sought
hereunder. No investigation by an indemnified party at or prior to the Closing
shall relieve an indemnifying party of any liability hereunder.
Section 17.4 RELEASE BY LENDERS. UAG shall use its best efforts to cause
the release of each of Xxxxxx XxXxx, Xx., Xxxxxx X. XxXxx, Xxxxxx X. XxXxx,
Xxxxx Xxxxxxxxxxxx, Xxxxx Xxxxxxxx, Xxxxxx Xxxxx and Xxxxxxx Xxxxxxxxxx from any
and all personal guarantees or liabilities relative to floor plans and other
loans from GMAC or any other lender with respect to any indebtedness or
obligations of the Partnerships and Corporations, such release to be evidenced
by releases or other documents and instruments in a form reasonably satisfactory
to each party. Such release shall be effective within ninety (90) days of the
Closing, and provided that if such release is not effective within said period,
UAG shall pay the Principals a fee of $50,000 on the ninety-first (91st) day
following the Closing and quarterly thereafter with each successive payment
being $25,000 greater than the immediately proceeding quarterly payment until
such release has been delivered as required hereunder.
Section 17.5 RELEASE BY UAG. UAG and all of its affiliates shall release
each of Xxxxxx XxXxx, Xx., Xxxxxx X. XxXxx and Xxxxxx X. XxXxx from any and all
liabilities, claims or demands with respect to any indebtedness or obligations
of the Partnerships and Corporations, such release to be evidenced by releases
or other documents and instruments in a form reasonably satisfactory to each
Party except for obligations arising under this Agreement.
-23-
ARTICLE 18
MISCELLANEOUS
Section 18.1 DIFEO LEASING CORPORATION. UAG and the Principals agree that
the disposition of the interests of DPI and DiFeo Leasing Corporation in DiFeo
Leasing Partnership shall be determined by the partners therein without regard
to this Agreement as soon as may be practicable.
Section 18.2 SURVIVAL. The Parties agree that this Agreement, including
without limitation, the representations and warranties of each Party in Articles
2 and 3 and the indemnification and release provisions in Article 17, shall
survive the Closing
Section 18.3 NO WAIVER. No waiver of any term,condition, default, or
breach of this Agreement, or of any document executed pursuant hereto, shall
be effective unless in writing and executed by the party making such waiver;
no such waiver shall operate as a waiver of either (i) such term, condition,
default, or breach on any other occasion, or (ii) any other term, condition,
default, or breach of this Agreement. No delay or failure to enforce any
provision of this Agreement or of any document executed pursuant hereto shall
operate as a waiver of such provision or any other provision herein or
therein. The enforcement by any party of any right it may have under this
Agreement or under applicable laws shall not be deemed an election of
remedies or otherwise prevent such party from enforcement of one or more
other remedies at any time.
Section 18.4 PARTIES BOUND. All of the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of, and be
enforceable by and against, the Parties hereto and their respective heirs,
representatives, successors and permitted assigns.
Section 18.5 NOTICES. Any and all notices, requests, communications, or
demands required or permitted to be given hereunder shall be in writing, and
shall be delivered either (i) in person or by electronic facsimile, (ii) by an
established overnight
-24-
delivery service, or (iii) by certified mail, return receipt requested,
addressed as follows:
If to Principals
or Corporations: Xxxxxx X. XxXxx
and
Xxxxxx X. XxXxx
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
copy to: Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
If to UAG or
its Affiliates: United Auto Group, Inc.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
copy to:
If by Hand: Xxxxxxxx, Xxxxx & Xxxx, P.C.
000 Xxxxxxxx Xxxxxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxx, Esq.
If by Mail: X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000
or to such other address or addresses as any party may designate to the others
by notice given as provided above. Notices delivered in person or by electronic
facsimile shall be deemed to have been given on the date of delivery; notices
delivered by overnight delivery service shall be deemed to have been given on
the business day following the date of deposit with
-25-
such overnight delivery service; and notices given by mail shall be deemed to
have been given three (3) days after the date of mailing.
Section 18.6 GOVERNING LAW. The rights and duties of the parties and the
validity, construction, enforcement, and interpretation of this Agreement shall
be determined according to the laws of the State of New York.
Section 18.7 SUBMISSION TO JURISDICTION. To the extent permitted by law
the Parties hereby consent to the jurisdiction of the Federal courts of the
United States sitting in the Southern District of New York and the courts of the
State of New York sitting in the City of New York in respect of any legal action
or proceeding arising out of or relating to this Agreement or to the
transactions contemplated hereunder.
Section 18.8 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
Section 18.9 THIRD PARTY BENEFICIARIES. The terms and provisions of this
Agreement are for the sole benefit of the Parties hereto and their respective
heirs, personal representatives, successors and permitted assigns and no third
party may benefit from such terms and provisions.
-26-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
TRACE INTERNATIONAL HOLDINGS, INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
-------------------------
Its:
-------------------------
UAG NORTHEAST, INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
-------------------------
Its:
-------------------------
DIFEO PARTNERSHIP, INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
-------------------------
Its:
-------------------------
UNITED AUTO GROUP, INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
-------------------------
Its:
-------------------------
DIFEO PARTNERSHIP RCT, INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
-------------------------
Its:
-------------------------
-27-
DIFEO PARTNERSHIP HCM, INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
-------------------------
Its:
-------------------------
DIFEO PARTNERSHIP HCT, INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
-------------------------
Its:
-------------------------
DIFEO PARTNERSHIP DM, INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
-------------------------
Its:
-------------------------
DIFEO PARTNERSHIP SCT, INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
-------------------------
Its:
-------------------------
DIFEO PARTNERSHIP RCM, INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
-------------------------
Its:
-------------------------
-28-
THE CORPORATIONS:
FAIR CADILLAC-OLDSMOBILE CORP.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
FAIR CHEVROLET CORP.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
FAIR INFINITI, INC.
By: /s/Xxxxxx X. XxXxx
Its:_________________________
FAIR IMPORTS CORP.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
FAIR HYUNDAI CORP.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
-29-
FAIR MOTORS CORP.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
DANBURY-MT. KISCO SATURN CORP.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
XXXXXX TOYOTA, INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
J & S FORD INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
DIFEO VOLKSWAGEN INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
DIFEO HYUNDAI, INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
-30-
J & F OLDSMOBILE CORP.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
DIFEO SUBARU, INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
DIFEO JEEP-EAGLE, INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
DIFEO IMPORTS, INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
DIFEO BUICK, INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
DIFEO AUTOCENTER, INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
-------------------------
-31-
DIFEO LEASING CORPORATION
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
SOMERSET MOTORS INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
GATEWAY OLDSMOBILE INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
DIFEO B.M.W., INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
COUNTY AUTO GROUP INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
ROCKLAND MOTORS CORP.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
-32-
JS1, INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
JS2, INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
JS4, INC.
By: /s/Xxxxxx X. XxXxx
-------------------------
Its:
-------------------------
THE PRINCIPALS:
/s/Xxxxxx X. XxXxx
-----------------------------
Xxxxxx X. XxXxx
/s/Xxxxxx X. XxXxx
-----------------------------
Xxxxxx X. XxXxx
-33-
SCHEDULE 6.1
Merging Entities
CORPORATION
(State of
Incorporation) PARTNERSHIP
-------------- -----------
COUNTY AUTO GROUP, COUNTY AUTO GROUP
INC. (NY) PARTNERSHIP
ROCKLAND MOTORS ROCKLAND MOTORS
CORP. (NY) PARTNERSHIP
DIFEO HYUNDAI, DIFEO HYUNDAI
INC. (NJ) PARTNERSHIP
DIFEO JEEP-EAGLE, DIFEO JEEP-EAGLE
INC. (NJ) PARTNERSHIP
DANBURY-MT. KISCO DANBURY-MT. KISCO
SATURN CORP. (CT) SATURN PARTNERSHIP
DIFEO BMW, INC. (NJ) DIFEO BMW
PARTNERSHIP
JS2, INC. (CT) DANBURY AUTO
PARTNERSHIP
JS2, INC. (CT) DANBURY CHRYSLER
PLYMOUTH
PARTNERSHIP
SCHEDULE 11.1
Cancelled Leases
1. Lease between Fair Realty Company, as Landlord, and Fair Hyundai
Partnership, as Tenant, dated October 1, 1992.
2. Lease between Fair Realty Company, as Landlord, and Danbury-Mt. Kisco
Saturn Partnership, as Tenant, dated October 1, 1992.
3. Lease between Fair Realty Company, as Landlord, and Fair
Cadillac-Oldsmobile-Isuzu Partnership, as Tenant, dated October 1, 1992.
4. Lease between Rockland Realty Associates, as Landlord, and Rockland Motors
Partnership, as Tenant, dated October 1, 1992.
5. Lease between Boundbrook Realty Associates, as Landlord, and DiFeo
Oldsmobile Partnership, as Tenant, dated October 1, 1992.
6. Lease between Boundbrook Realty Associates, as Landlord, and Somerset
Motors Partnership, as Tenant, dated October 1, 1992.
7. Lease between J & S Equity Urban Renewal Corp., as Landlord, and Xxxxxx
Motors Partnership, as Tenant, dated October 1, 1992.
8. Lease between J & S Equity Associates, as Landlord, and DiFeo Jeep-Eagle
Partnership, as Tenant, dated October 1, 1992.
9. Lease between J & S Equity Associates, as Landlord, and J & F
Oldsmobile-Isuzu Partnership, as Tenant, dated October 1, 1992.
10. Lease between J & S Equity Associates, as Landlord, and DiFeo Subaru
Partnership, as Tenant, dated October 1, 1992.
11. Lease between J & S Equity Associates, as Landlord, and DiFeo
Buick-Pontiac-GMC Truck Partnership, as Tenant, dated October 1, 1992,
respecting Xxxxx 0000.X, Xxxx X-0 & S-3; Block 1751, Lots 11-C and 11-D;
Block 1753, Lots 11-23, Jersey City, New Jersey.
12. Lease between J & S Equity Associates, as Landlord, and DiFeo
Buick-Pontiac-GMC Truck Partnership, as Tenant, dated October 1, 1992,
respecting Block 1745, Xxxx 00, 00, 00, 00, 00, 00, 00 & 18, 000 Xxxxxxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx.
13. Lease between J & S Equity Associates, as Landlord, and DiFeo
Buick-Pontiac-GMC Truck Partnership, as Tenant, dated October 1, 1992,
respecting Block 1745, Lots 34-40; Block 1746, Xxxx 00X, 00X, & 00X; Xxxxx
0000, Xxxx 81, 82, 83 and 84, Jersey City, New Jersey.
14. Lease between J & S Equity Associates, as Landlord, and DiFeo Imports
Partnership, as Tenant, dated October 1, 1992.
15. Lease between J & S Equity Associates, as Landlord, and DiFeo Autocenter
Partnership, as Tenant, dated October 1, 1992.
2
SCHEDULE 11.1(A)
Leases
1. Lease between Boundbrook Realty Associates, as Landlord, and Somerset
Motors Partnership, as Tenant
Rent -- $71,799 per month as of October 1, 1995
Property Description -- The automobile dealership buildings of
approximately 25,600 square feet and 18,200 square feet, respectively,
along with parking, display and storage areas located on Xxx 0, Xxxxx 0000
in the Township of Bridgewater, Somerset County, New Jersey.
2. Lease between Rockland Realty Associates, as Landlord, and Rockland Motors
Partnership, as Tenant
Rent -- $12,901 per month as of October 1, 1995
Property Description -- 73, 75 and 00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx, Xxx
Xxxx 00000.
3. Lease between SDJD 37 Realty, Inc., as Landlord, and OCM Partnership, t/a
Gateway Mitsubishi, and OCT Partnership, t/a Gateway Toyota, as Tenants
Rent -- $34,030 per month as of October 1, 1995
Property Description -- Lot 6.01 in Block 691; Xxx 00 xx Xxxxx 000, xxx Xxx
0 xx Xxxxx 690.01, Dover Township, Ocean County, New Jersey
4. Lease between Gateway Associates, as Landlord, and OCT Partnership t/a
Gateway Toyota
Rent -- $18,697 per month
Property Description -- Xxx 00.00, Xxxxx 000, Xxxxx Xxxxxxxx, Xxxxx Xxxxxx,
New Jersey
5. Lease between J & S Equity Associates, as Landlord, and DiFeo Nissan
Partnership, as Tenant
Rent -- $27,817 per month as of October 1, 1995
Property Description -- 000, 000-000 Xxxxxxxxx Xxxxxx; 00 Xxxxx Xxxxxx;
909, 911-913, 915-921 and 000-000 Xxxxxxxxxx Xxxxxx
6. Lease between J & S Equity Urban Renewal Corp., as Landlord, and Xxxxxx
Motors Partnership, as Tenant
Rent -- $30,000 per month as of October 1, 1995
Property Description -- Block 1290.1, Lot A.1 on the Tax Map of Jersey
City, Xxxxxx County, New Jersey
7. Lease between J & S Equity Associates, as Landlord, and Xxxxxx Motors
Partnership, as Tenant
Rent -- $40,000 per month as of October 1, 1995
Property Description -- Block 1290.1, Lot A.2 on the Tax Map of Jersey
City, Xxxxxx County, New Jersey
8. Lease between J & S Equity Associates, as Landlord, and DiFeo Chevrolet-Geo
Partnership, DiFeo Jeep-Eagle Partnership and DiFeo Hyundai Partnership,
as Tenants
Rent -- $57,000 per month as of October 1, 1995
Property Description -- 000 X.X. Xxxxx 000, known as Xxxx 00X0 & 00X0,
Xxxxx 0000, Xxx Xxx xx Xxxx of Jersey City, Xxxxxx County, New Jersey
2
9. Lease between Fair Realty Company, as Landlord, and Danbury-Mt. Kisco
Saturn Partnership, Danbury Auto Partnership, and Fair Chevrolet-Geo
Partnership, as Tenants
Rent -- $80,000 per month as of October 1, 1995
Property Description -- 000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, more
particularly described as a portion of the following described land
currently used as the Fair Cadillac-Oldsmobile-Isuzu car dealership (i.e.,
List 6759, Lot 0009).
10. Lease between Fair Realty Company, as Landlord, and Danbury-Mt. Kisco
Saturn Partnership, Danbury Auto Partnership, and Fair Chevrolet-Geo
Partnership, as Tenants
Rent -- $7,505 per month as of October 1, 1995
Property Description -- Federal Road, Danbury, Connecticut (i.e., List
6758, Lot 0007).
3
