EXHIBIT 18
STOCKHOLDERS AGREEMENT
BY AND AMONG
INTERNATIONAL MOTOR CARS GROUP I, L.L.C.,
INTERNATIONAL MOTOR CARS GROUP II, L.L.C.,
MITSUI & CO., LTD.,
MITSUI & CO. (U.S.A.), INC.,
PENSKE CORPORATION,
AND
PENSKE AUTOMOTIVE HOLDINGS CORP.
DATED AS OF MARCH 26, 2004
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................. 3
Section 1.2 Rules of Construction....................................... 5
ARTICLE II
VOTING AGREEMENTS
Section 2.1 Voting Agreement of the PCP Entities and Penske............. 5
Section 2.2 Voting Agreement of Mitsui.................................. 5
Section 2.3 Support of the PCP Entities and Penske...................... 5
ARTICLE III
TRANSFER RESTRICTIONS
Section 3.1 Tag-Along Rights............................................ 6
ARTICLE IV
MUTUAL REPRESENTATIONS AND WARRANTIES
Section 4.1 Organization................................................ 7
Section 4.2 Authorization, Validity and Enforceability.................. 7
Section 4.3 No Violation or Breach...................................... 7
ARTICLE V
TERM
Section 5.1 Term........................................................ 8
Section 5.2 Effects of Termination...................................... 8
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Assurances.................................................. 8
Section 6.2 Survival.................................................... 8
Section 6.3 Notices..................................................... 8
Section 6.4 Amendments.................................................. 9
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Section 6.5 Assignment and Parties in Interest.......................... 9
Section 6.6 Entire Agreement............................................ 10
Section 6.7 Descriptive Headings........................................ 10
Section 6.8 Counterparts................................................ 10
Section 6.9 Governing Law; Jurisdiction................................. 10
Section 6.10 Severability................................................ 11
Section 6.11 Specific Performance........................................ 11
Section 6.12 Transfers to Affiliates..................................... 11
Section 6.13 Public Filings.............................................. 12
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THIS STOCKHOLDERS AGREEMENT (the "Agreement") dated as of March 26, 2004 is
by and among INTERNATIONAL MOTOR CARS GROUP I, L.L.C., a Delaware limited
liability company ("PCP I"), INTERNATIONAL MOTOR CARS GROUP II, L.L.C., a
Delaware limited liability company ("PCP II" and, together with PCP I, the "PCP
Entities"), MITSUI & CO., LTD., a Japanese company ("Mitsui Japan"), MITSUI &
CO. (U.S.A.), INC., a New York corporation ("Mitsui USA" and together with
Mitsui Japan, "Mitsui"), PENSKE CORPORATION, a Delaware corporation ("Penske
Corporation"), and PENSKE AUTOMOTIVE HOLDINGS CORP., a Delaware corporation
("Penske Holdings", and together with Penske Corporation, "Penske").
WHEREAS, the parties hereto wish to provide for certain matters relating to
the ownership and transfer of the Common Stock of United Auto Group, Inc.;
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, capitalized terms
used herein shall have the meanings specified below:
"Affiliate" means "affiliate" as defined in Rule 405 promulgated under the
Securities Act.
"Beneficial Ownership" means "beneficial ownership" as defined in Rule
13d-3 promulgated under the Exchange Act. The term "Beneficial Owner" shall have
the 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 or Tokyo, Japan.
"Common Stock" means the voting Common Stock, par value $.0001 per share,
of the Company, 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.
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"Company" means United Auto Group, Inc.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Sale" has the meaning set forth in Section 3.1.
"Mitsui" has the meaning set forth in the preamble.
"Operating Agreements" means each of (i) the Amended and Restated Limited
Liability Company Agreement for PCP I and (ii) the Amended and Restated Limited
Liability Company Agreement for PCP II, each dated as of the date hereof, and
each as amended from time to time.
"PCP Entities" has the meaning set forth in the preamble.
"PCP I" has the meaning set forth in the preamble.
"PCP II" has the meaning set forth in the preamble.
"Penske" has the meaning set forth in the recitals hereto.
"Penske Capital" means Penske Capital Partners, L.L.C.
"Penske Corporation" has the meaning set forth in the preamble.
"Penske Holdings" has the meaning set forth in the preamble.
"Permitted Transferee" of a person means (a) a corporation, partnership or
other entity wholly owned by such person; provided, that such corporation,
partnership or other entity shall agree in writing that it shall transfer to
such person any Restricted Securities which it holds prior to such time as it
ceases to be wholly owned by such person, and (b) the equity owners of such
person to the extent such equity owners receive a pro rata distribution of
Restricted Securities.
"Purchase Agreement" has the meaning set forth in Section 2.3.
"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.
"Restricted Stockholder" means each of Penske, the PCP Entities and Mitsui.
"Securities Act" means the Securities Act of 1933, as amended.
"Tag-Along Notice" has the meaning set forth in Section 3.1.
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"Transfer" means any direct or indirect transfer, sale, assignment, gift,
pledge, mortgage, hypothecation or other disposition of any interest, including,
without limitation, a transfer or sale of securities through a registered
offering. The terms "Transferee," "Transferor," "Transferred," and
"Transferable" shall each have a correlative meaning.
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
and regulations promulgated thereunder, unless the context requires otherwise.
ARTICLE II
VOTING AGREEMENTS
Section 2.1 Voting Agreement of the PCP Entities and Penske. In connection
with any shareholder election of directors of the Company, unless Mitsui has
declined to put forward such a representative, the PCP Entities and Penske shall
vote all of the voting securities of the Company Beneficially Owned by them in
favor of one (1) representative of Mitsui, and shall use their best efforts to
cause one (1) representative of Mitsui to be elected as a director of the
Company.
Section 2.2 Voting Agreement of Mitsui. Provided that the PCP Entities and
Penske are in compliance with the agreements set forth in Section 2.1 hereof,
Mitsui shall, in connection with any such shareholder election of directors,
vote all of the voting securities of the Company Beneficially Owned by it in
favor of up to 14 persons (not including the Mitsui representative referred to
in Section 2.1) voted for by the PCP Entities and Penske for election as
directors of the Company.
Section 2.3 Support of the PCP Entities and Penske. The PCP Entities and
Penske shall (a) not take any action (including by failing to vote against any
amendment to the Company's certificate of incorporation or by-laws) that would
in any way circumvent the agreements set forth in Section 2.1 hereof or the
Company's agreements set forth in Section 6.5 of the Purchase Agreement, dated
as of February 16, 2004, among Mitsui, the PCP Entities, Penske and the Company
(the "Purchase Agreement"); and (b) not take any action inconsistent with, and
shall use their best efforts to cause the Company to comply with (in each case
including by way of exercise of voting rights), the Company's obligations set
forth in Sections 6.3, 6.4, 6.5 and 6.6 of the Purchase Agreement.
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ARTICLE III
TRANSFER RESTRICTIONS
Section 3.1 Tag-Along Rights.
(a) Other than one or more Transfers of Restricted Securities not
exceeding, in the aggregate, 996,204 shares (as such number may be
equitably adjusted to reflect stock splits, reverse stock splits,
reclassifications and other similar changes to the Company's capital
structure) of Common Stock (each, an "Exempt Sale"), in the event that any
of the PCP Entities or Penske desires to Transfer any Restricted Securities
to a third party (other than (i) with respect to any Restricted Securities,
to their respective Permitted Transferees or Affiliates or (ii) with
respect only to those securities Transferred from Penske Corporation's
"Share Account" (as defined in the Operating Agreement(s)) to the "Carry
Account" (as defined in the Operating Agreement(s)) and those securities
held in Penske Capital's "Share Account" (as defined in the Operating
Agreement(s)) to Penske Capital or by Penske Capital to its members or by
such members to their members ad infinitum (it being understood that in no
event will this clause (ii) apply to any Transfer by Penske Corporation))
at any time prior to the termination of this Agreement in accordance with
its terms, such PCP Entity or Penske, as the case may be, shall notify
Mitsui in writing, of such proposed Transfer and its terms and conditions
(the "Tag Along Notice"); and
(b) Within twenty (20) Business Days of the date of the Tag-Along
Notice, Mitsui shall notify the PCP Entities or Penske, as the case may be,
if it elects to participate in such Transfer. If Mitsui fails to notify
such PCP Entity or Penske, as the case may be, within such twenty (20)
Business Day period, Mitsui shall be deemed to have waived its rights to
participate in such Transfer. If Mitsui so notifies the PCP Entities or
Penske, as the case may be, Mitsui 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 Penske, as the case may be, an amount of
shares of Common Stock or Common Stock equivalents equal to the shares of
Common Stock or Common Stock equivalents the Transferee actually proposes
to purchase multiplied by a fraction, the numerator of which shall be the
number of shares of Common Stock and Common Stock equivalents issued and
owned by Mitsui and the denominator of which shall be the aggregate number
of shares of Common Stock and Common Stock equivalents issued and owned by
Mitsui, the PCP Entities and Penske (assuming for purposes of calculating
such fraction the conversion of all convertible securities and the exercise
of all options held by Mitsui, the PCP Entities and Penske).
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ARTICLE IV
MUTUAL REPRESENTATIONS AND WARRANTIES
Each of the parties hereto represents and warrants to the others as
follows:
Section 4.1 Organization. It is duly organized, validly existing and in
good standing under the laws of its jurisdiction of formation.
Section 4.2 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 all necessary corporate action, its board of directors or other
governing body, as applicable, 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 4.3 No Violation or Breach. The execution, delivery and performance
by it of this Agreement and the consummation of the transactions contemplated
hereby, do not and will not conflict with, result in a violation or breach of,
constitute a default (or an event which with the giving of notice or the lapse
of time or both would constitute a default) or give rise to any right of
termination or acceleration of any right or obligation of it under, or result in
the creation or imposition of any lien, mortgage, pledge, security interest,
claim, right of first refusal or other limitation on transfer or other
encumbrance upon any of its Restricted Securities or shares of Common Stock of
the Company, as the case may be, by reason of the terms of, (a) its memorandum
of association, certificate of incorporation, by-laws or other charter or
organizational document, (b) any contract, agreement, lease, license, mortgage,
note, bond, debenture, indenture or other instrument or obligation to which it
is a party or by or to which it or its assets or properties may be bound or
subject, (c) any order, writ, judgment, injunction, award, decree, law, statute,
rule or regulation applicable to it or (d) any license, permit, order, consent,
approval, registration, authorization or qualification with or under any
governmental agency, other than in the case of clauses (b), (c) or (d) above any
conflict, violation, breach or default which would not, individually or in the
aggregate together with all other such conflicts, violations, breaches or
defaults, have a material adverse effect on it or have a material adverse effect
on its ability to perform its obligations, or consummate the transactions
contemplated, hereunder.
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ARTICLE V
TERM
Section 5.1 Term. This Agreement shall commence on the date hereof, and
shall terminate on the tenth anniversary of the date of this Agreement. This
Agreement shall terminate with respect to a Restricted Stockholder at such time
as such entity ceases to Beneficially Own any Restricted Securities or any
shares of Common Stock of the Company, as the case may be.
Section 5.2 Effects of Termination. Upon termination of this Agreement,
this Agreement (other than Section 6.9) shall thereafter become void and have no
effect, and no party hereto shall have any liability or obligation to any other
party hereto in respect of this Agreement, except for any liability resulting
from such party's breach of this Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 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.
Section 6.2 Survival. All of the representations, warranties, covenants,
and agreements of the parties contained in this Agreement shall survive until
this Agreement is terminated.
Section 6.3 Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given (a) when delivered
personally to the recipient, (b) two Business Days after the date when sent to
the recipient by reputable express courier service (charges prepaid), or (c)
seven Business Days after the date when mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications shall be sent to the parties at the addresses
indicated below:
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If to Penske or the PCP Entities:
c/o Penske Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
If to Mitsui Japan:
Mitsui & Co., Ltd.
First Motor Vehicles Div.
0-0, Xxxxxxxxx, X-Xxxxx, Xxxxxxx-Xx
Xxxxx, Xxxxx
Attention: General Manager of First Motor Vehicles Division
If to Mitsui USA:
Mitsui & Co. (U.S.A.), Inc.
Detroit Xxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Detroit Machinery & Automotive Department
With a copy to: (which shall not constitute notice)
Debevoise & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
or to such other address as any party hereto may, from time to time, designate
in writing delivered pursuant to the terms of this Section 6.3.
Section 6.4 Amendments. The terms, provisions and conditions of this
Agreement may not be changed, modified or amended in any manner except by an
instrument in writing duly executed by all of the parties hereto.
Section 6.5 Assignment and Parties in Interest.
(a) 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, other than to an
Affiliate of such party, without the prior written consent of the other
parties hereto.
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(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 inure to the benefit of a Permitted
Transferee; and (ii) the provisions of this Agreement shall be binding on
any Permitted Transferee.
Section 6.6 Entire Agreement. This Agreement and the other documents
executed on the date hereof constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and supersede and are in full
substitution for any and all prior agreements and understandings among them
relating to such subject matter, including without limitation, the Letter
Agreement dated as of April 4, 2003 among the Restricted Stockholders, and no
party shall be liable or bound to the other party hereto in any manner with
respect to such subject matter by any warranties, representations, indemnities,
covenants, or agreements, except as specifically set forth herein or in the
other documents executed on the date hereof.
Section 6.7 Descriptive Headings. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 6.8 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 6.9 Governing Law; Jurisdiction.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to the
conflicts of law principles thereof which might result in the application
of the laws of any other jurisdiction.
(b) Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the jurisdiction of the courts of the State of New
York and the United States of America located in the County of New York
solely in respect of the interpretation and enforcement of the provisions
of this Agreement, and in respect of the transactions contemplated hereby,
and further agrees that service of any process, summons, notice or document
to its respective address set forth in Section 6.3 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
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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 6.10 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 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 6.11 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 until terminated pursuant to the terms of this Agreement,
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 6.11) is invalid, inapplicable or
unenforceable.
Section 6.12 Transfers to Affiliates. In the event of any Transfer of
capital stock of the Company by any party hereto to an Affiliate of such party
(other than with respect only to those securities Transferred from Penske
Corporation's "Share Account" (as defined in the Operating Agreement(s)) to the
Carry Account (as defined in the Operating Agreement(s)) and those securities
held in Penske Capital's "Share Account" (as defined in the Operating
Agreements(s)) to Penske Capital or by Penske Capital to its
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members or by such member to their members ad infinitum (it being understood
that in no event will this exception apply to any Transfer by Penske
Corporation)), prior to the effectiveness of such Transfer, such Transferee
shall execute a joinder to this Agreement and shall otherwise agree to be bound
by the provisions of this Agreement in the same manner as the Transferor. The
Transferor and the Transferee shall be jointly and severally responsible for the
obligations of the Transferor under this Agreement.
Section 6.13 Public Filings. Prior to making any filings required by
Sections 13 of the Securities Exchange Act of 1934, as amended, each of the PCP
Entities and Penske, on the one hand, and Mitsui, on the other hand, shall
provide the other parties with a reasonable opportunity to review such filings
and comment thereon.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
INTERNATIONAL MOTOR CARS GROUP I, L.L.C.
By: Penske Capital Partners, L.L.C.,
as Managing Member
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
INTERNATIONAL MOTOR CARS GROUP II,
L.L.C.
By: Penske Capital Partners, L.L.C.,
as Managing Member
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
MITSUI & CO., LTD.
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: General Manager
First Motor Vehicles Division
MITSUI & CO. (U.S.A.), INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
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PENSKE CORPORATION
By: /s/ Xxxxx X. Penske
------------------------------------
Name: Xxxxx X. Penske
Title: Chairman & Chief Executive
Officer
PENSKE AUTOMOTIVE HOLDINGS CORP.
By: /s/ Xxxxx X. Penske
------------------------------------
Name: Xxxxx X. Penske
Title: Chairman
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