EXECUTION COPY
PLEDGE AGREEMENT
AGREEMENT dated as of March 20, 1997 among UNITED AUTO GROUP, INC., a
Delaware corporation (together with its successors, the "Borrower"), UNITED
XXXXXXX, INC., a Delaware corporation ("ULI") and DIFEO PARTNERSHIP, INC., a
Delaware corporation ("DPI"), UAG WEST, INC., a Delaware corporation ("UAG
West"), XXXXXXX AUTO SALES, INC., an Arkansas corporation ("LAS"), UAG ATLANTA,
INC., a Delaware corporation ("UAG Atlanta"), UAG ATLANTA IV, INC., a Delaware
corporation ("UAG Atlanta IV"), UAG NORTHEAST, INC., a Delaware corporation
("UAG Northeast"), DIFEO PARTNERSHIP HCT, INC., a Delaware corporation ("DPI
HCT"), XXXXXX TOYOTA, INC., a New Jersey corporation ("Xxxxxx Toyota"), DIFEO
PARTNERSHIP VIII, INC., a Delaware corporation ("DPI VIII"), DIFEO PARTNERSHIP
IX, INC., a Delaware corporation ("DPI IX"), DIFEO PARTNERSHIP SCT, INC., a
Delaware corporation ("DPI SCT"), SOMERSET MOTORS, INC., a New Jersey
corporation ("Somerset Motors), DIFEO PARTNERSHIP RCT, INC., a Delaware
corporation ("DPI RCT"), UAG NORTHEAST (NY), INC., a New York corporation ("UAG
Northeast (NY)"), DIFEO PARTNERSHIP RCM, INC., a Delaware corporation ("DPI
RCM"), SCOTTSDALE AUDI, LTD., an Arizona corporation ("SA"), SK MOTORS, LTD.,
an Arizona corporation ("SK Motors"), UAG Texas, Inc., a Delaware corporation
("UAG Texas"), UAG Texas II, Inc., a Delaware corporation ("UAG Texas II")
(each together with its successors, a "Pledgor" and collectively the
"Pledgors") and THE BANK OF NOVA SCOTIA, as Administrative Agent.
W I T N E S S E T H :
WHEREAS, the Borrower, the Guarantors party thereto, certain banks,
The Bank of Nova Scotia, as administrative agent for such banks and Xxxxxx
Guaranty Trust Company of New York, as documentation agent for such banks are
parties to a Credit Agreement of even date herewith (as the same may be amended
from time to time, the "Credit Agreement"); and
WHEREAS, in order to induce said banks, The Bank of Nova Scotia, as
administrative agent for such banks and Xxxxxx Guaranty Trust Company of New
York, as documentation agent for such banks, to enter into the Credit
Agreement, the Pledgors have agreed to grant a continuing security interest in
and to the Collateral (as hereafter defined) to secure their obligations under
the Credit Agreement and the Notes issued pursuant thereto;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS
Terms defined in the Credit Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following respective
meanings:
"Collateral" has the meaning assigned to such term in Section 3(A).
"Issuer" means any of the companies identified on Schedule I as the
issuers of the Pledged Stock.
"Partnership" means any of the partnerships listed on Schedule II.
"Partnership Interests" means, as to each Pledgor, the reference to
the partnership interest in each Partnership listed opposite such Pledgor's
name on Schedule II attached hereto.
"Pledged Instruments" means, as to each Pledgor, (i) the Subsidiary
Notes of such Pledgor and (ii) any instrument required to be pledged by such
Pledgor to the Administrative Agent pursuant to Section 3(B).
"Pledged Interest" means, as to each Pledgor, the Partnership
Interests of such Pledgor and any other equity interest required to be pledged
by such Pledgor.
"Pledged Securities" means, as to each Pledgor, the Pledged
Instruments, the Pledged Interests and the Pledged Stock of such Pledgor.
"Pledged Stock" means, as to each Pledgor, (i) the Subsidiary Shares
of such Pledgor and (ii) any other capital stock required to be pledged by such
Pledgor to the Administrative Agent pursuant to Section 3(B).
"Secured Obligations" means the obligations secured under this
Agreement which include: (a) with respect to the Borrower, (i) all principal of
and interest (including, without limitation, any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any loan under, or
any note issued pursuant to, the Credit Agreement, (ii) all other amounts
payable by the Borrower hereunder or under the Credit Agreement and (iii) any
renewals, extensions or modifications of any of the foregoing; and (b) with
respect to each other Pledgor, (i) all obligations of such Pledgor under the
Credit Agreement (including without limitation Article 9 thereof)
-2-
and (ii) any renewals, extensions or modifications of any of the foregoing.
"Security Interests" means, as to each Pledgor, the security interests
in its Collateral granted hereunder securing its Secured Obligations.
"Subsidiary Notes" means, as to each Pledgor, any debt of an Issuer
owing to such Pledgor, whether now existing or hereafter arising, including
without limitation the instruments evidencing obligations owed to such Pledgor
listed on Schedule I hereto.
"Subsidiary Shares" means, as to each Pledgor, the collective
reference to the shares of capital stock of each Issuer listed opposite such
Pledgor's name on Schedule I attached hereto, together with all shares, stocks,
stock certificates, options or rights of any nature whatsoever that currently
exist or which may be issued or granted in respect thereof (or in substitution
for the same) by any Issuer while this Agreement is in effect.
Unless otherwise defined herein, or unless the context otherwise
requires, all terms used herein which are defined in the New York Uniform
Commercial Code as in effect on the date hereof shall have the meanings therein
stated.
SECTION 2. REPRESENTATIONS AND WARRANTIES
Each Pledgor represents and warrants as follows:
(a) Title to Pledged Securities. Such Pledgor owns all of the Pledged
Securities listed on Schedule I and Schedule II across from its name, free and
clear of any Liens other than the Security Interests. Except as set forth on
Schedule I, the Pledged Stock includes all of the issued and outstanding
capital stock of each Issuer. All of the Pledged Stock has been duly authorized
and validly issued, and is fully paid and non-assessable, and is subject to no
options to purchase or similar rights of any Person. Such Pledgor is not and
will not become a party to or otherwise bound by any agreement, other than this
Agreement or various franchise agreements between such Pledgor and automobile
franchisors, which restricts in any manner the rights of any present or future
holder of any of the Pledged Securities with respect thereto.
(b) Validity, Perfection and Priority of Security Interests. Upon the
delivery of its Pledged Instruments and certificates representing its Pledged
Stock to the Administrative Agent in accordance with Section 4 hereof and
assuming that the Administrative Agent will at no time relinquish possession of
such Pledged Instruments and certificates, the Administrative Agent will have
valid and perfected security interests in the Collateral pledged by such
Pledgor hereunder (other than the
-3-
Collateral described in the immediately succeeding sentence) subject to no
prior Lien. When in addition appropriately completed UCC financing statements
shall have been filed as specified in Schedule III hereto, the Security
Interests shall constitute perfected security interests in the Collateral
pledged by such Pledgor hereunder consisting of all right, title and interest
of such Pledgor in Debt of a Subsidiary owing to such Pledgor and not evidenced
by an instrument and the Partnership Interests (and all proceeds thereof).
Except for the filing of such UCC financing statements, no registration,
recordation or filing with any governmental body, agency or official is
required in connection with the execution or delivery of this Agreement or
necessary for the validity or enforceability hereof or for the perfection or
enforcement of the Security Interests. Neither such Pledgor nor any of its
Subsidiaries has performed or will perform any acts which might prevent the
Administrative Agent from enforcing any of the terms and conditions of this
Agreement or which would limit the Administrative Agent in any such
enforcement. On the date hereof, the Pledged Interests pledged by such Pledgor
are not evidenced by any certificates.
(c) UCC Filing Locations. The chief executive office of such Pledgor
is located at its address set forth on the signature pages of the Credit
Agreement.
SECTION 3. THE SECURITY INTERESTS
In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all the obligations of each Pledgor hereunder:
(a) Each Pledgor hereby assigns and pledges to and with the
Administrative Agent for the benefit of the Banks and the Agents and grants to
the Administrative Agent for the benefit of the Banks and the Agents a security
interest in its Pledged Securities, and all of its rights and privileges with
respect to its Pledged Securities, and all income and profits thereon, and all
interest, dividends and other payments and distributions with respect thereto,
all Debt of a Subsidiary owing to such Pledgor from time to time whether or not
evidenced by a Pledged Instrument and all proceeds of the foregoing (the
"Collateral"). Contemporaneously with the execution and delivery hereof, each
Pledgor is delivering its Subsidiary Notes and certificates representing its
Subsidiary Shares in pledge hereunder.
(b) In the event that any Issuer at any time issues to any Pledgor any
additional or substitute shares of capital stock of any class or any substitute
note, or any Partnership issues to any Pledgor any additional or substitute
equity interests of any class or issues certificates representing the Pledged
Interests or any portion thereof, or owes any other Debt to any Pledgor, such
Pledgor will immediately pledge and
-4-
deposit with the Administrative Agent certificates (if any) representing all
such shares and such note or any instrument evidencing such other Debt as
additional security for such Pledgor's Secured Obligations. All such shares,
notes, interests and instruments constitute Pledged Securities and are subject
to all provisions of this Agreement.
(c) The Security Interests granted by each Pledgor are granted as
security only and shall not subject either Agent or any Bank to, or transfer or
in any way affect or modify, any obligation or liability of such Pledgor or any
of its Subsidiaries with respect to any of the Collateral pledged by such
Pledgor hereunder or any transaction in connection therewith.
SECTION 4. DELIVERY OF PLEDGED SECURITIES
All Pledged Instruments delivered to the Administrative Agent by any
Pledgor pursuant hereto shall be endorsed to the order of the Administrative
Agent, and accompanied by any required transfer tax stamps, all in form and
substance satisfactory to the Administrative Agent. All certificates
representing Pledged Stock or Pledged Interests (if any) delivered to the
Administrative Agent by any Pledgor pursuant hereto shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, with signatures appropriately guaranteed,
and accompanied by any required transfer tax stamps, all in form and substance
satisfactory to the Administrative Agent.
SECTION 5. FURTHER ASSURANCES
(a) Each Pledgor agrees that it will, at its expense and in such
manner and form as the Administrative Agent may require, execute, deliver, file
and record any financing statement, specific assignment or other paper and take
any other action that may be necessary or desirable, or that the Administrative
Agent may request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Administrative Agent to exercise and enforce
its rights hereunder with respect to any of the Collateral. To the extent
permitted by applicable law, each Pledgor hereby authorizes the Administrative
Agent to execute and file, in the name of such Pledgor or otherwise, Uniform
Commercial Code financing statements (which may be carbon, photographic,
photostatic or other reproductions of this Agreement or of a financing
statement relating to this Agreement) which the Administrative Agent in its
sole discretion may deem necessary or appropriate to further perfect the
Security Interests.
(b) Each Pledgor agrees that it will not change (i) its name, identity
or corporate structure in any manner or (ii) the location of its chief
executive office unless it shall
-5-
have given the Administrative Agent not less than 30 days' prior notice
thereof.
(c) The Borrower agrees that it will cause any Subsidiary which is
owed (i) Debt evidenced by an instrument, (ii) long-term Debt or (iii) Debt
secured by a Lien by the Borrower or another Subsidiary to immediately assign
and pledge to and with the Administrative Agent for the benefit of the Banks
and the Agents and grant to the Administrative Agent for the benefit of the
Banks and the Administrative Agent a security interest in such Debt and
all proceeds of such Debt, in each case as security for such
Subsidiary's obligations under the Credit Agreement.
SECTION 6. RECORD OWNERSHIP OF PLEDGED STOCK AND PLEDGED INTERESTS.
Subject to the provisions of the final paragraph of Section 10, the
Administrative Agent may at any time or from time to time, in its sole
discretion, cause any or all of (i) the Pledged Stock or (ii) the Pledged
Interests to be transferred of record into the name of the Administrative Agent
or its nominee. Each Pledgor will promptly give to the Administrative Agent
copies of any notices or other communications received by it with respect to
Pledged Stock or Pledged Interests registered in the name of such Pledgor and
the Administrative Agent will promptly give to each Pledgor copies of any
notices and communications received by the Administrative Agent with respect to
its Pledged Stock registered in the name of the Administrative Agent or its
nominee.
SECTION 7. RIGHT TO RECEIVE DISTRIBUTIONS ON COLLATERAL.
Unless an Event of Default shall have occurred and be continuing, each
Pledgor shall have the right to receive all dividends, interest and other
payments and distributions made upon or with respect to Collateral pledged by
it hereunder.
If an Event of Default shall have occurred and be continuing, the
Administrative Agent shall have the right receive and to retain as Collateral
hereunder all dividends, interest and other payments and distributions made
upon or with respect to the Collateral and each Pledgor shall take all such
action as the Administrative Agent may deem necessary or appropriate to give
effect to such right. All such dividends, interest and other payments and
distributions which are received by any Pledgor shall be received in trust for
the benefit of the Agents and the Banks and, if the Administrative Agent so
directs shall be segregated from other funds of such Pledgor and shall,
forthwith upon demand by the Administrative Agent, be paid over to the
Administrative Agent as Collateral in the same form as received (with any
necessary endorsement). After all Events of Defaults have been cured, the
Administrative Agent's right to retain
-6-
dividends, interest and other payments and distributions under this Section 7
shall cease and the Administrative Agent shall pay over to each Pledgor any
such Collateral pledged by such Pledgor hereunder retained by the
Administrative Agent during the continuance of an Event of Default.
SECTION 8. RIGHT TO VOTE PLEDGED STOCK AND PLEDGED INTERESTS.
Unless an Event of Default shall have occurred and be continuing, each
Pledgor shall have the right, from time to time, to vote its Pledged Stock and
Pledged Interests and to give consents, ratifications and waivers with respect
to its Pledged Stock and Pledged Interests, and the Administrative Agent shall,
upon receiving a written request from such Pledgor accompanied by a certificate
signed by its principal financial officer stating that no Event of Default has
occurred and is continuing, deliver to such Pledgor or as specified in such
request such proxies, powers of attorney, consents, ratifications and waivers
in respect of any of its Pledged Stock or Pledged Interests which is registered
in the name of the Administrative Agent or its nominee as shall be specified in
such request and be in form and substance satisfactory to the Administrative
Agent.
If an Event of Default shall have occurred and be continuing, the
Administrative Agent shall have the right to the extent permitted by law and
each Pledgor shall take all such action as may be necessary or appropriate to
give effect to such right, to vote and to give consents, ratifications and
waivers, and take any other action with respect to any or all of the Pledged
Stock or Pledged Interests with the same force and effect as if the
Administrative Agent were the absolute and sole owner thereof.
SECTION 9. GENERAL AUTHORITY
Each Pledgor hereby irrevocably appoints the Administrative Agent its
true and lawful attorney, with full power of substitution, in the name of such
Pledgor, the Agents, the Banks or otherwise, for the sole use and benefit of
the Agents and Banks, but at the expense of such Pledgor, to the extent
permitted by law to exercise, at any time and from time to time while an Event
of Default has occurred and is continuing, all or any of the following powers
with respect to all or any of the Collateral:
(a) Each Pledgor agrees that it will not change (i) its name, identity
or corporate structure in any manner or (ii) the location of its chief
executive office unless it shall have given the Administrative Agent not less
than 30 days' prior notice thereof.
(i) to demand, xxx for, collect, receive and give acquittance for
any and all monies due or to become due upon or by virtue thereof,
-7-
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof, as fully and effectually as if
the Administrative Agent were the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference thereto;
provided that the Administrative Agent shall give each Pledgor not
less than ten days' prior notice of the time and place of any sale or other
intended disposition of any of the Collateral pledged by such Pledgor hereunder
except any Collateral which threatens to decline speedily in value or is of a
type customarily sold on a recognized market. The Administrative Agent and each
Pledgor agree that such notice constitutes "reasonable notification" within the
meaning of Section 9-504(3) of the Uniform Commercial Code.
SECTION 10. REMEDIES UPON EVENT OF DEFAULT
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may exercise on behalf of the Banks and the Agents all the
rights of a secured party under the Uniform Commercial Code (whether or not in
effect in the jurisdiction where such rights are exercised) and, in addition,
the Administrative Agent may, without being required to give any notice, except
as herein provided or as may be required by mandatory provisions of law, (i)
apply the cash, if any, then held by it as Collateral as specified in Section
13 and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Secured Obligations in full, sell the Collateral or
any part thereof at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Administrative Agent may deem satisfactory. Any Bank or
Agent may be the purchaser of any or all of the Collateral so sold at any
public sale (or, if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale). The Administrative Agent is
authorized, in connection with any such sale, if it deems it advisable so to
do, (i) to restrict the prospective bidders on or purchasers of any of the
Pledged Securities to a limited number of sophisticated investors who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Securities, (ii) to cause to be placed on certificates for any or all
of the Pledged Securities or on any other securities pledged hereunder a legend
-8-
to the effect that such security has not been registered under the Securities
Act of 1933 and may not be disposed of in violation of the provision of said
Act, and (iii) to impose such other limitations or conditions in connection
with any such sale as the Administrative Agent deems necessary or advisable in
order to comply with said Act or any other law. Each Pledgor will execute and
deliver such documents and take such other action as the Administrative Agent
deems necessary or advisable in order that any such sale may be made in
compliance with law. Upon any such sale the Administrative Agent shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral
so sold. Each purchaser at any such sale shall hold the Collateral so sold
absolutely and free from any claim or right of whatsoever kind, including any
equity or right of redemption of any Pledgor which may be waived, and each
Pledgor, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal which it has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale required by
Section 9 shall (1) in the case of a public sale, state the time and place
fixed for such sale, (2) in the case of a sale at a broker's board or on a
securities exchange, state the board or exchange at which such sale is to be
made and the day on which the Collateral, or the portion thereof so being sold,
will first be offered for sale at such board or exchange, and (3) in the case
of a private sale, state the day after which such sale may be consummated. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Administrative Agent may fix in the
notice of such sale. At any such sale the Collateral may be sold in one lot as
an entirety or in separate parcels, as the Administrative Agent may determine.
The Administrative Agent shall not be obligated to make any such sale pursuant
to any such notice. The Administrative Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be
so adjourned. In the case of any sale of all or any part of the Collateral on
credit or for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the selling price is paid by the purchaser thereof,
but the Administrative Agent shall not incur any liability in the case of the
failure of such purchaser to take up and pay for the Collateral so sold and, in
the case of any such failure, such Collateral may again be sold upon like
notice. The Administrative Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
Notwithstanding any provision of this Agreement to the contrary, (i)
enforcement of the security interest granted hereby in the Pledged Securities
and the exercise of any right or remedy with respect to any of the shares of
Pledged Securities and the
-9-
grant of any pledge pursuant to Section 5(c) shall be subject to prior approval
of the various automobile franchisors with whom the Pledgor or any of its
Affiliates has franchise agreements pursuant to which such enforcement, or
exercise of any remedy or right, or grant, without prior approval from such
automobile franchisors may result in the termination of one or more of such
franchise agreements and (ii) the enforcement of the security interest granted
hereby in the shares of Atlantic Auto Finance Corporation pledged hereunder and
the exercise of any right or remedy with respect thereto shall be subject to
the prior consent of the requisite financing parties with whom Atlantic Auto
Finance Corporation has financing agreements set forth on Schedule IV hereto to
the extent such enforcement or exercise of any remedy or right without prior
approval from such financing parties may result in a default under one or more
of such agreements.
SECTION 11. EXPENSES
Each Pledgor agrees that it will forthwith upon demand pay to the
Administrative Agent:
(i) the amount of any taxes which the Administrative Agent may
have been required to pay by reason of the Security Interests or to
free any of the Collateral of such Pledgor from any Lien thereon,
and
(ii) the amount of any and all out-of-pocket expenses,
including the reasonable fees and disbursements of counsel and of
any other experts, which the Administrative Agent may incur in
connection with (w) the administration or enforcement of this
Agreement, including such expenses as are incurred to preserve the
value of the Collateral and the validity, perfection, rank and value
of any Security Interest, (x) the collection, sale or other
disposition of any of the Collateral, (y) the exercise by the
Administrative Agent of any of the rights conferred upon it
hereunder or (z) any Default or Event of Default.
Any such amount not paid on demand shall bear interest at the rate
applicable to Base Rate Loans plus 2% and shall be an additional Secured
Obligation hereunder.
SECTION 12. LIMITATION ON DUTY OF ADMINISTRATIVE AGENT IN RESPECT OF COLLATERAL.
Beyond the exercise of reasonable care in the custody thereof, the
Administrative Agent shall have no duty as to any Collateral in its possession
or control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights
-10-
pertaining thereto. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property, and shall not be liable or responsible for
any loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any agent or bailee selected by
the Administrative Agent in good faith and with reasonable care.
SECTION 13. APPLICATION OF PROCEEDS
Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral pledged by any Pledgor hereunder and any cash held shall be applied
by the Administrative Agent in the following order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the
Administrative Agent, and all expenses, liabilities and advances incurred
or made by the Administrative Agent in connection therewith, and any other
unreimbursed expenses for which the Agents or any Bank is to be reimbursed
by such Pledgor pursuant to Section 10.3 and Article 9 of the Credit
Agreement or Section 11 hereof;
second, to the ratable payment of unpaid principal of the Secured
Obligations of such Pledgor;
third, to the ratable payment of accrued but unpaid interest on the
Secured Obligations of such Pledgor in accordance with the provisions of
the Credit Agreement;
fourth, to the ratable payment of all other Secured Obligations of
such Pledgor, until all Secured Obligations of such Pledgor shall have been
paid in full; and
finally, to payment to such Pledgor, or as a court of competent
jurisdiction may direct, of any surplus then remaining from such proceeds.
The Administrative Agent may make distributions hereunder in cash or
in kind or, on a ratable basis, in any combination thereof.
SECTION 14. CONCERNING THE ADMINISTRATIVE AGENT
The provisions of Article VII of the Credit Agreement shall inure to
the benefit of the Administrative Agent in respect of this Agreement and shall
be binding upon the parties to the Credit Agreement in such respect. In
furtherance and not in derogation of the rights, privileges and immunities of
the Administrative Agent therein set forth:
-11-
(a) The Administrative Agent is authorized to take all such action as
is provided to be taken by it as Administrative Agent hereunder and all other
action reasonably incidental thereto. As to any matters not expressly provided
for herein (including, without limitation, the timing and methods of
realization upon the Collateral) the Administrative Agent shall act or refrain
from acting (i) in accordance with the request of the Required Banks or (ii) if
the Loans have been declared due and payable by the Documentation Agent in
accordance with Section 6.1 of the Credit Agreement, in accordance with written
instructions from the Required Banks or, in the absence of such instructions,
in accordance with its discretion.
(b) The Administrative Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Security Interests in any of the
Collateral, whether impaired by operation of law or by reason of any action or
omission to act on its part hereunder. The Administrative Agent shall have no
duty to ascertain or inquire as to the performance or observance of any of the
terms of this Agreement by any Pledgor.
SECTION 15. APPOINTMENT OF CO-ADMINISTRATIVE AGENTS
At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Administrative Agent may appoint another bank or trust
company or one or more other persons, either to act as co-agent or co-agents,
jointly with the Administrative Agent, or to act as separate agent or agents on
behalf of the Agents and the Banks with such power and authority as may be
necessary for the effectual operation of the provisions hereof and may be
specified in the instrument of appointment (which may, in the discretion of the
Administrative Agent, include provisions for the protection of such co-agent or
separate agent similar to the provisions of Section 14).
SECTION 16. TERMINATION OF SECURITY INTERESTS;
Release of Collateral
Upon the repayment in full of all Secured Obligations and the
termination of the Commitments under the Credit Agreement, the Security
Interests shall terminate and all rights to the Collateral pledged by each
Pledgor hereunder shall revert to such Pledgor. At any time and from time to
time prior to such termination of the Security Interests, the Administrative
Agent may release any of the Collateral upon the terms set forth in Section
10.5 of the Credit Agreement. Upon any such termination of the Security
Interests or release of Collateral, the Administrative Agent will, at the
expense of the respective Pledgor, execute and deliver to such Pledgor such
documents as such Pledgor shall reasonably request to evidence the termination
-12-
of the Security Interests or the release of such Collateral, as the case may
be.
SECTION 17. NOTICES
All notices hereunder shall be given in accordance with Section 10.1
of the Credit Agreement.
SECTION 18. WAIVERS, NON-EXCLUSIVE REMEDIES
No failure on the part of the Administrative Agent to exercise, and no
delay in exercising and no course of dealing with respect to, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise by the Administrative Agent of any right under the Credit
Agreement or this Agreement preclude any other or further exercise thereof or
the exercise of any other right. The rights in this Agreement and the Credit
Agreement are cumulative and are not exclusive of any other remedies provided
by law.
SECTION 19. SUCCESSORS AND ASSIGNS
This Agreement is for the benefit of the Agents and the Banks and
their permitted successors and assigns, and in the event of an assignment of
all or any of the Secured Obligations, the rights hereunder, to the extent
applicable to the indebtedness so assigned, shall be transferred with such
indebtedness. This Agreement shall be binding on each Pledgor and its
successors and assigns.
SECTION 20. CHANGES IN WRITING
Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only in writing signed by each
Pledgor to be bound thereby and the Administrative Agent with the consent of
the Required Banks.
SECTION 21. NEW YORK LAW
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies provided by the laws
of any jurisdiction other than New York are governed by the laws of such
jurisdiction.
SECTION 22. SEVERABILITY
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be construed in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (ii) the invalidity or
unenforceability of any
-13-
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
SECTION 23. WAIVER OF JURY TRIAL.
EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 24. COUNTERPARTS.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
-14-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
UNITED AUTO GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
UNITED XXXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
DIFEO PARTNERSHIP, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
UAG WEST, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
XXXXXXX AUTO SALES, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
UAG ATLANTA, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
UAG ATLANTA IV, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
UAG NORTHEAST, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
DIFEO PARTNERSHIP HCT, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
XXXXXX TOYOTA, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
-15-
Title: Vice President
DIFEO PARTNERSHIP VIII, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
DIFEO PARTNERSHIP IX, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
DIFEO PARTNERSHIP SCT, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
SOMERSET MOTORS, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
DIFEO PARTNERSHIP RCT, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
UAG NORTHEAST (NY), INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
DIFEO PARTNERSHIP RCM, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
SCOTTSDALE AUDI, LTD.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
SK MOTORS, LTD.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
UAG TEXAS, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
-16-
UAG TEXAS II, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By: /s/ Xxxxx Xxxxx
-------------------------------
Title: Senior Relationship
Manager
-17-
Schedule I
Pledged Stock
-------------
Issuers Stock Pledged Hereunder
-------------------------------
Percentage
Issuer of Pledged No. of of Shares
Pledgor Stock Class Shares Issued
------- ----- ----- ------ ------
Borrower United Xxxxxxx, Inc. Common Stock 100 100%
Borrower Atlantic Auto Finance Common Stock 43,500 100%
Corporation
XXX Xxxxxxx Auto Sales, Inc. Common Stock 10 100%
DPI DiFeo Partnership HCT, Common Stock 100 100%
Inc.
DPI DiFeo Partnership RCT, Common Stock 100 100%
Inc.
DPI DiFeo Partnership RCM, Common Stock 100 100%
Inc.
DPI DiFeo Partnership SCT, Common Stock 100 100%
Inc.
DPI DiFeo Partnership VIII, Common Stock 100 100%
Inc.
DPI DiFeo Partnership IX, Common Stock 100 100%
Inc.
Borrower DiFeo Partnership X, Inc. Common Stock 100 100%
Borrower UAG Northeast (NY), Inc. Common Stock 100 100%
DPI Xxxxxx Toyota, Inc. Common Stock 45 100%
DPI Somerset Motors, Inc. Common Stock 100 100%
Borrower UAG West, Inc. Common Stock 100 100%
UAG West SA Automotive, Ltd. Common Stock 1,713,010 100%
UAG Xxxx XX Automotive, Ltd. Common Stock 625,000 100%
UAG West SPA Automotive, Common Stock 547,125 100%
Ltd.
UAG West LRP, Ltd. Common Stock 500,000 100%
UAG West Sun BMW, Ltd. Common Stock 900,000 100%
UAG West 6725 Dealership, Ltd. Common Stock 1,250 100%
UAG West Scottsdale Management Common Stock 101,251 100%
Group, Ltd.
UAG West Scottsdale Audi, Ltd. Common Stock 100 100%
LAS Xxxxxxx United Auto Common Stock 10 100%
Group, Inc.
LAS Xxxxxxx United Auto Common Stock 10 100%
Group No. 2, Inc.
LAS Xxxxxxx United Auto Common Stock 10 100%
Group No. 3, Inc.
Borrower UAG Atlanta, Inc. Common Stock 100 100%
UAG Atlanta Toyota, Inc. Common Stock 1,000 100%
Atlanta
Borrower UAG Atlanta IV, Inc. Common Stock 100 100%
UAG UAG Atlanta IV Motors, Common Stock 1,001 100%
Atlanta Inc.
IV
(fka Xxxxxxx Xxxxx BMW,
Inc.)
Borrower UAG Texas, Inc. Common Stock 100 100%
Borrower UAG Texas II, Inc. Common Stock 100 100%
Borrower United AutoCare, Inc. Common Stock 100 100%
Borrower United AutoCare Common Stock 100 100%
Products, Inc.
Borrower UAG Capital Common Stock 100 100%
Management, Inc.
Pledged Instruments
-------------------
Original
Issuer of Pledged Principal
Pledgor Instrument Issue Date Amount
------- ---------- ---------- ------
Borrower UAG Atlanta II, Inc. May 1, 1996 $11,450,000
Borrower UAG Atlanta III, Inc. July 12, 1996 $11,000,000
Schedule II
Pledged Interests
-----------------
Partnership
Interest Pledged
Pledgor Partnership Hereunder
------- ----------- ---------
DPI Fair Hyundai Partnership 70%
UAG Northeast Fair Hyundai Partnership 30%
DPI Fair Chevrolet-Geo Partnership 70%
UAG Northeast Fair Chevrolet-Geo Partnership 30%
DPI Danbury Auto Partnership 70%
UAG Northeast Danbury Auto Partnership 30%
DPI Danbury Chrysler Plymouth Partnership 70%
UAG Northeast Danbury Chrysler Plymouth Partnership 30%
DPI HCT Xxxxxx Motors Partnership 70%
Xxxxxx Toyota Xxxxxx Motors Partnership 30%
DPI DiFeo Hyundai Partnership 70%
UAG Northeast DiFeo Hyundai Partnership 30%
DPI J&F Oldsmobile Partnership 70%
UAG Northeast J&F Oldsmobile Partnership 30%
DPI DiFeo Chevrolet-Geo Partnership 70%
UAG Northeast DiFeo Chevrolet-Geo Partnership 30%
DPI DiFeo Chrysler Plymouth Jeep Eagle 70%
Partnership
UAG Northeast DiFeo Chrysler Plymouth Jeep Eagle 30%
Partnership
DPI VIII OCT Partnership 70%
UAG Northeast OCT Partnership 30%
DPI IX OCM Partnership 70%
UAG Northeast OCM Partnership 30%
DPI SCT Somerset Motors Partnership 70%
Somerset Motors Somerset Motors Partnership 30%
DPI DiFeo BMW Partnership 70%
UAG Northeast DiFeo BMW Partnership 30%
DPI RCT Country Auto Group Partnership 70%
UAG Northeast (NY) Country Auto Group Partnership 30%
DPI RCM Rockland Motors Partnership 70%
UAG Northeast (NY) Rockland Motors Partnership 30%
XX 0000 Agent Partnership 50%
SK Motors 6725 Agent Partnership 50%
UAG Texas Xxxxxxx Automotive, Ltd. 99%
UAG Texas II Xxxxxxx Automotive, Ltd. 1%
DPI DiFeo Leasing Partnership 70%
UAG Northeast DiFeo Leasing Partnership 30%
Schedule III
UCC Filing Locations
--------------------
-------------------------------------------------------------------------------
DEBTOR FILING LOCATION(S)
-------------------------------------------------------------------------------
United Auto Group, Inc. New York Secretary of State
New York City Register
-------------------------------------------------------------------------------
United Xxxxxxx, Inc. New York Secretary of State
New York City Register
Arkansas Secretary of State
Saline County Clerk
Pulaski County Clerk
Garland County Clerk
-------------------------------------------------------------------------------
DiFeo Partnership, Inc. New York Secretary of State
New York City Register
Rockland County Clerk
New Jersey Secretary of State
Xxxxxx County Clerk
Ocean County Clerk
Somerset County Clerk
Bergen County Clerk
Connecticut Secretary of State
Town of Danbury Clerk
-------------------------------------------------------------------------------
UAG West, Inc. New York Secretary of State
New York City Register
Arizona Secretary of State
Maricopa County Clerk
-------------------------------------------------------------------------------
Xxxxxxx Auto Sales, Inc. New York Secretary of State
New York City Register
Arkansas Secretary of State
Saline County Clerk
Pulaski County Clerk
Garland County Clerk
-------------------------------------------------------------------------------
UAG Atlanta, Inc. New York Secretary of State
New York City Register
Gwinnett County Clerk
-------------------------------------------------------------------------------
UAG Atlanta IV, Inc. New York Secretary of State
New York City Register
Gwinnett County Clerk
-------------------------------------------------------------------------------
UAG Northeast, Inc. New York Secretary of State
New York City Register
Rockland County Clerk
New Jersey Secretary of State
Xxxxxx County Clerk
Ocean County Clerk
Connecticut Secretary of State
Town of Danbury Clerk
-------------------------------------------------------------------------------
DiFeo Partnership HCT, Inc. New York Secretary of State
New York City Register
New Jersey Secretary of State
Xxxxxx County Clerk
-------------------------------------------------------------------------------
Xxxxxx Toyota, Inc. New York Secretary of State
New York City Register
New Jersey Secretary of State
Xxxxxx County Clerk
-------------------------------------------------------------------------------
DiFeo Partnership VIII, Inc. New York Secretary of State
New York City Register
New Jersey Secretary of State
Xxxxxx County Clerk
Ocean County Clerk
-------------------------------------------------------------------------------
DiFeo Partnership IX, Inc. New York Secretary of State
New York City Register
New Jersey Secretary of State
Xxxxxx County Clerk
Ocean County Clerk
-------------------------------------------------------------------------------
DiFeo Partnership SCT, Inc. New York Secretary of State
New York City Register
New Jersey Secretary of State
Xxxxxx County Clerk
Somerset County Clerk
-------------------------------------------------------------------------------
DiFeo Partnership RCT, Inc. New York Secretary of State
New York City Register
Rockland County Clerk
New Jersey Secretary of State
Xxxxxx County Clerk
-------------------------------------------------------------------------------
Somerset Motors, Inc. New York Secretary of State
New York City Register
New Jersey Secretary of State
Xxxxxx County Clerk
Somerset County Clerk
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
UAG Northeast (NY), Inc. New York Secretary of State
New York City Register
Rockland County Clerk
-------------------------------------------------------------------------------
DiFeo Partnership RCM, Inc. New York Secretary of State
New York City Register
Rockland County Clerk
New Jersey Secretary of State
Xxxxxx County Clerk
-------------------------------------------------------------------------------
Scottsdale Audi, Ltd. Arizona Secretary of State
Maricopa County Clerk
-------------------------------------------------------------------------------
SK Motors, Ltd. Arizona Secretary of State
Maricopa County Clerk
-------------------------------------------------------------------------------
UAG Texas, Inc. New York Secretary of State
New York City Register
Texas Secretary of State
Houston County Clerk
-------------------------------------------------------------------------------
UAG Texas II, Inc. New York Secretary of State
New York City Register
Texas Secretary of State
Houston County Clerk
-------------------------------------------------------------------------------
Schedule IV
Atlantic Auto Financing Agreements
----------------------------------
1. Support Agreement, dated as of June 28, 1995, between the Borrower
and Atlantic Auto Funding Corporation. (This agreement may not be modified
without the consent of Financial Security Assurance Inc.)
2. Support Agreement, dated as of June 14, 1996, between the Borrower
and Atlantic Auto Second Funding Corporation.
