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EXHIBIT 10.26.1
Execution Copy
REGISTRATION RIGHTS AGREEMENT
among
UNITED AUTO GROUP, INC.
and
PENSKE AUTOMOTIVE HOLDINGS CORP.
dated as of
December 22, 2000
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Execution Copy
REGISTRATION RIGHTS AGREEMENT, dated as of December 22, 2000 among
United Auto Group, Inc., a Delaware corporation (the "Company") and Penske
Automotive Holdings Corp. ("Penske"), a Delaware Corporation.
The Company and Penske are entering into a Purchase Agreement (the
"Purchase Agreement") pursuant to which, Penske is purchasing shares of Common
Stock par value 0.0001 per share, of the Company (the "Common Stock").
If Penske, desires to sell shares of Common Stock, it may be desirable
to register such shares under the Securities Act (as defined below).
As part of, and as consideration for, the acquisition of shares of the
Common Stock from the Company on the date hereof and from time to time
hereafter, the Company hereby grants to Penske certain registration and other
rights with respect to its shares of Common Stock.
Accordingly, the parties hereto agree as follows:
1. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
"Certificate of Incorporation" means the Certificate of Incorporation
of the Company, as it may be amended or restated hereafter from time to time.
"Commission" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
"Common Stock" means any shares of voting common stock, par value
$0.0001 per share, of the Company, now or hereafter authorized to be issued,
and, any and all securities of any kind whatsoever of the Company which may be
issued on or after the date hereof in respect of, in exchange for, or upon
conversion of shares of Common Stock pursuant to a merger, consolidation, stock
split, stock dividend, recapitalization of the Company or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
"Person" means a corporation, an association, a partnership, an
organization, a business, a trust, an individual, or any other entity or
organization, including a government or political subdivision or an
instrumentality or agency thereof.
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"Registrable Securities" means (i) any shares of Common Stock owned by
Penske or any direct or indirect subsidiary of Penske or Penske Corporation, a
Delaware corporation and (ii) any shares of Common Stock issued with respect to
the Common Stock referred to in clause (i) by way of a stock dividend, stock
split or reverse stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or otherwise. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
(a) when a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (b) when
such securities shall have been otherwise transferred, new certificates for them
not bearing a legend restricting further transfer shall have been delivered by
the Company and subsequent public distribution of them shall not require
registration of them under the Securities Act, or (c) when such securities
shall have been sold in compliance with Rule 144 of the Securities Act. Any
certificate evidencing the Registrable Securities shall bear a legend stating
that the securities have not been registered under the Securities Act and
setting forth or referring to the restrictions on transferability and sale of
the securities.
"Registration Expenses" means all expenses incident to the registration
and disposition of the Registrable Securities pursuant to Section 2 hereof,
including, without limitation, all registration, filing and applicable national
securities exchange fees, all fees and expenses of complying with state
securities or blue sky laws (including fees and disbursements of counsel to the
underwriters or Penske in connection with "blue sky" qualification of the
Registrable Securities and determination of their eligibility for investment
under the laws of the various jurisdictions), all word processing, duplicating
and printing expenses, all messenger and delivery expenses, the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of "cold comfort" letters or any special
audits required by, or incident to, such registration, all fees and
disbursements of underwriters (other than underwriting discounts and
commissions), all transfer taxes, and all fees and expenses of counsel to Penske
up to a maximum of $50,000 per registration; provided, however, that
Registration Expenses shall exclude, and Penske shall pay, underwriting
discounts and commissions in respect of the Registrable Securities being
registered.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
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2. Registration Under Securities Act, etc.
2.1 Registration on Request.
(a) Request. Penske shall have the right to require the
Company to effect the registration under the Securities Act of all or part of
the Registrable Securities, by delivering a written request therefor to the
Company specifying the number of shares of Registrable Securities and the
intended method of distribution. The Company shall (i) use its reasonable best
efforts to effect the registration under the Securities Act (including by means
of a shelf registration pursuant to Rule 415 under the Securities Act if so
requested in such request and if the Company is then eligible to use such a
registration) of the Registrable Securities which the Company has been so
requested to register by Penske, for distribution in accordance with the
intended method of distribution set forth in the written request delivered by
Penske, such registration to be effected as expeditiously as possible, and (ii)
if requested by Penske, use its reasonable best efforts to obtain acceleration
of the effective date of the registration statement relating to such
registration.
(b) Registration of Other Securities. Whenever the Company
shall effect a registration pursuant to this Section 2.1, the Company may
include other securities of the Company or which are held by Persons who, by
virtue of agreements with the Company, are entitled to include their securities
in any such registration. In the case of an underwritten offering pursuant to
Section 2.1, if holders of securities of the Company other than Registrable
Securities who are entitled, by contract with the Company, to have securities
included in such a registration (the "Other Stockholders") request such
inclusion, the Company shall offer to include the securities of such Other
Stockholders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Agreement. The Company
and the Other Stockholders shall enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected pursuant to Section 2.1(f). Notwithstanding any other provision of this
Section 2, if the representative advises Penske in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
securities of the Company held by Other Stockholders shall be excluded from such
registration to the extent so required by such limitation.
(c) Registration Statement Form. Registrations under this
Section 2.1 shall be on such appropriate registration form of the Commission as,
subject to clause (a)(i) above, shall be selected by the Company and as shall be
reasonably acceptable to Penske.
(d) Expenses. The Company shall pay all Registration
Expenses in connection with any registration requested pursuant to this Section
2.1.
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(e) Effective Registration Statement. A registration
requested pursuant to this Section 2.1 shall not be deemed to have been effected
(including for purposes of paragraph (h) of this Section 2.1) (i) unless a
registration statement with respect thereto has become effective and has been
kept continuously effective for a period of at least 180 days (or such shorter
period which shall terminate when all the Registrable Securities covered by such
registration statement have been sold pursuant thereto), (ii) if after it has
become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to Penske and has not thereafter
become effective, or (iii) if the conditions to closing specified in the
underwriting agreement, if any, entered into in connection with such
registration are not satisfied or waived.
(f) Selection of Underwriters. The underwriters of each
underwritten offering of the Registrable Securities so to be registered shall be
selected by Penske and shall be subject to the approval of the Company, not to
be unreasonably withheld or delayed.
(g) Right to Withdraw. If the managing underwriter of any
underwritten offering shall advise Penske that the Registrable Securities
covered by the registration statement cannot be sold in such offering within a
price range acceptable to Penske, then Penske shall have the right to notify the
Company in writing that they have determined that the registration statement be
abandoned or withdrawn, in which event the Company shall abandon or withdraw
such registration statement. In the event of such abandonment or withdrawal,
such request shall not be counted for purposes of the requests for registration
to which Penske is entitled pursuant to this Section 2.1.
(h) Limitations on Registration on Request. Penske shall be
entitled to require the Company to effect, and the Company shall be required to
effect, three registrations in the aggregate pursuant to this Section 2.1,
provided, however, that the aggregate offering value of the shares to be
registered pursuant to any such registration shall be at least $10,000,000
unless Penske then owns shares with an aggregate value less than $10,000,000 (in
which case such lesser number of shares may be registered).
(i) Postponement. The Company shall be entitled once in any
six-month period to postpone for a reasonable period of time (but not exceeding
90 days) (the "Postponement Period") the filing of any registration statement
required to be prepared and filed by it pursuant to this Section 2.1 if the
Company determines, in its reasonable judgment, that such registration and
offering would materially interfere with any material financing, corporate
reorganization or other material transaction involving the Company or any
subsidiary, or would require premature disclosure thereof, and promptly gives
Penske written notice of such determination, containing a general
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statement of the reasons for such postponement and an approximation of the
anticipated delay. If the Company shall so postpone the filing of a registration
statement, (i) the Company shall use its reasonable best efforts to limit the
delay to as short a period as is practicable and (ii) Penske shall have the
right to withdraw the request for registration by giving written notice to the
Company at any time and, in the event of such withdrawal, such request shall not
be counted for purposes of the requests for registration to which Penske is
entitled pursuant to this Section 2.1.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the Company
at any time proposes to register any of its securities under the Securities Act
by registration on Form X-0, X-0 or S-3 or any successor or similar form(s)
(except registrations on any such Form or similar form(s) solely for
registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger or consolidation), whether or not for
sale for its own account, it will each such time give prompt written notice to
Penske of its intention to do so and of Penske's rights under this Section 2.2.
Upon the written request of Penske (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by Penske), made as
promptly as practicable and in any event within 30 days after the receipt of any
such notice (15 days if the Company states in such written notice or gives
telephonic notice to Penske, with written confirmation to follow promptly
thereafter, stating that (i) such registration will be on Form S-3 and (ii) such
shorter period of time is required because of a planned filing date), the
Company shall use its reasonable best efforts to include in such registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register by Penske. Notwithstanding anything to the
contrary contained in this Agreement, the Company may in its discretion withdraw
any registration commenced pursuant to this Section 2.2 without liability to the
holders of Registrable Securities. No registration effected under this Section
2.2 shall relieve the Company of its obligation to effect any registration upon
request under Section 2.1. The Company will pay all Registration Expenses in
connection with any registration of Registrable Securities requested pursuant to
this Section 2.2.
(b) Right to Withdraw. Penske shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
registration statement pursuant to this Section 2.2 at any time prior to the
execution of an underwriting agreement with respect thereto by giving written
notice to the Company of its request to withdraw.
(c) Priority in Incidental Registrations. If the managing
underwriter of any underwritten offering shall inform the Company by letter of
its belief that the number of Registrable Securities requested to be included in
such registration, when added to the number of other securities to be offered in
such registration, would
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materially adversely affect such offering, then the Company shall include in
such registration, to the extent of the number and type which the Company is so
advised can be sold in (or during the time of) such offering without so
materially adversely affecting such offering (the "Section 2.2 Sale Amount"),
(i) all of the securities proposed by the Company to be sold for its own account
or by an Other Stockholder exercising "demand" registration rights; and (ii)
thereafter, to the extent the Section 2.2 Sale Amount is not exceeded, the
Registrable Securities requested by Penske to be included in such registration
pursuant to Section 2.2(a) and any other securities of the Company requested to
be included in such registration by any Other Stockholder having the right to
include securities on a pro rata basis, with the amount of securities of Penske
and each such Other Stockholder to be included based on the pro rata amount of
shares of Common Stock held, or obtainable by exercise or conversion of other
securities of the Company, by Penske or such Other Stockholder.
(d) Plan of Distribution. Any participation by holders of
Registrable Securities in a registration by the Company shall be in accordance
with the Company's plan of distribution.
2.3 Registration Procedures. If and whenever the Company is
required to use its reasonable best efforts to effect the registration of any
Registrable Securities under the Securities Act as provided in Sections 2.1 and
2.2 hereof, the Company shall as expeditiously as possible:
(a) prepare and file with the Commission as soon as practicable
the requisite registration statement to effect such registration (and
shall include all financial statements required by the Commission to be
filed therewith) and thereafter use its reasonable best efforts to
cause such registration statement to become effective; provided,
however, that before filing such registration statement (including all
exhibits) or any amendment or supplement thereto or comparable
statements under securities or blue sky laws of any jurisdiction, the
Company shall as promptly as practicable furnish such documents to
Penske and each underwriter, if any, participating in the offering of
the Registrable Securities and their respective counsel, which
documents will be subject to the reasonable review and comments of
Penske, each underwriter and their respective counsel; and provided,
further, however, that the Company may discontinue any registration of
its securities pursuant to Section 2.2 or which are not Registrable
Securities at any time prior to the effective date of the registration
statement relating thereto;
(b) notify Penske of the Commission's requests for amending or
supplementing the registration statement and the prospectus, and
prepare and file with the Commission such amendments and supplements to
such
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registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement for such period as shall be required for the disposition of
all of such Registrable Securities in accordance with the intended
method of distribution thereof; provided, that except with respect to
any such registration statement filed pursuant to Rule 415 under the
Securities Act, such period need not exceed 180 days;
(c) furnish, without charge, to Penske and each underwriter such
number of conformed copies of such registration statement and of each
such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as Penske and such
underwriters may reasonably request;
(d) use its reasonable best efforts (i) to register or qualify
all Registrable Securities and other securities covered by such
registration statement under such securities or blue sky laws of such
States of the United States of America where an exemption is not
available and as Penske or any managing underwriter shall reasonably
request, (ii) to keep such registration or qualification in effect for
so long as such registration statement remains in effect, and (iii) to
take any other action which may be reasonably necessary or advisable to
enable Penske to consummate the disposition in such jurisdictions of
the securities to be sold by Penske, except that the Company shall not
for any such purpose be required to qualify generally to do business as
a foreign corporation in any jurisdiction wherein it would not but for
the requirements of this subsection (d) be obligated to be so qualified
or to consent to general service of process in any such jurisdiction;
(e) furnish to Penske and each underwriter, if any, participating
in the offering of the securities covered by such registration
statement, a signed counterpart of (i) an opinion of counsel for the
Company, and (ii) a "comfort" letter signed by the independent public
accountants who have certified the Company's or any other entity's
financial statements included or incorporated by reference in such
registration statement, covering substantially the same matters with
respect to such registration statement
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(and the prospectus included therein) and, in the case of the
accountants' comfort letter, with respect to events subsequent to the
date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' comfort letters
delivered to the underwriters in underwritten public offerings of
securities (and dated the dates such opinions and comfort letters are
customarily dated) and, in the case of the legal opinion, such other
legal matters, and, in the case of the accountants' comfort letter,
such other financial matters, as the underwriters, may reasonably
request;
(f) promptly notify Penske and each managing underwriter, if any,
participating in the offering of the securities covered by such
registration statement (i) when such registration statement, any
pre-effective amendment, the prospectus or any prospectus supplement
related thereto or post-effective amendment to such registration
statement has been filed, and, with respect to such registration
statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission for amendments or
supplements to such registration statement or the prospectus related
thereto or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of such
registration statement or the initiation of any proceedings for that
purpose; (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any of the
Registrable Securities for sale under the securities or blue sky laws
of any jurisdiction or the initiation of any proceeding for such
purpose; (v) at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, upon discovery that, or upon
the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, in the light of the circumstances under which
they were made, and in the case of this clause (v), at the request of
Penske promptly prepare and furnish to Penske and each managing
underwriter, if any, participating in the offering of the Registrable
Securities, a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
under which they were made; and (vi) at any time when the
representations and warranties of the Company contemplated by Section
2.4(a) or (b) hereof cease to be true and correct;
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(g) otherwise comply with all applicable rules and regulations of
the Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve months beginning with the first full calendar month after
the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder, and promptly
furnish to Penske a copy of any amendment or supplement to such
registration statement or prospectus;
(h) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date
not later than the effective date of such registration;
(i) (i) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be listed on the
principal securities exchange on which similar securities issued by the
Company are then listed (if any), if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii)
if no similar securities are then so listed, use its reasonable best
efforts to (x) cause all such Registrable Securities to be listed on a
national securities exchange or (y) failing that, secure designation of
all such Registrable Securities as a NASDAQ "national market system
security" within the meaning of Rule 11Aa2-1 of the Commission or (z)
failing that, to secure NASDAQ authorization for such shares and,
without limiting the generality of the foregoing, to arrange for at
least two market makers to register as such with respect to such shares
with the National Association of Securities Dealers, Inc.;
(j) deliver promptly to counsel to Penske and each underwriter,
if any, participating in the offering of the Registrable Securities,
copies of all correspondence between the Commission and the Company,
its counsel or auditors;
(k) use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of the registration statement;
(l) provide a CUSIP number for all Registrable Securities, no
later than the effective date of the registration statement; and
(m) make available its employees and personnel and otherwise
provide reasonable assistance to the underwriters (taking into account
the
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needs of the Company's business) in their marketing of Registrable
Securities.
The Company may require Penske to furnish the Company such information regarding
Penske and the distribution of the Registrable Securities as the Company may
from time to time reasonably request in writing. The Company shall be released
from any obligation to Penske hereunder for so long as Penske has not delivered
such information to the extent required for purposes of the registrations.
Penske agrees that upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraph (f) (iii), (iv) or (v)
of this Section 2.3, Penske will, to the extent appropriate, discontinue its
disposition of Registrable Securities pursuant to the registration statement
relating to such Registrable Securities until, in the case of paragraph (f)(v)
of this Section 2.3, its receipt of the copies of the supplemented or amended
prospectus contemplated by paragraph (f)(v) of this Section 2.3 and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in its possession, of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice. If the disposition by Penske of its securities is
discontinued pursuant to the foregoing sentence, the Company shall extend the
period of effectiveness of the registration statement required pursuant to
Section 2.1(e) by the number of days during the period from and including the
date of the giving of notice to and including the date when Penske shall have
received copies of the supplemented or amended prospectus contemplated by
paragraph (f)(v) of this Section 2.3; and, if the Company shall not so extend
such period, Penske's request pursuant to which such registration statement was
filed shall not be counted for purposes of the requests for registration to
which Penske is entitled pursuant to Section 2.1 hereof.
2.4 Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by Penske pursuant to a registration
requested under Section 2.1, the Company shall enter into a customary
underwriting agreement (in the form of underwriting agreement used at such time
by the managing underwriter(s)) with a managing underwriter or underwriters
selected pursuant to Section 2.1(f) which shall contain such terms as are
generally prevailing in agreements of the managing underwriter(s), including,
without limitation, their customary provisions relating to indemnification and
contribution (the "Customary Terms"). Penske shall be party to such underwriting
agreement and may, at its option, require that any or all of the representations
and warranties by, and the other agreements on the part of, the Company to and
for the benefit of such underwriters shall also be made to and for the benefit
of Penske and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement be conditions precedent to
the
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obligations of Penske. Penske shall not be required to make any representations
or warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding Penske, its ownership of and
title to the Registrable Securities, and its intended method of distribution and
other representations that constitute Customary Terms, and any liability of
Penske to any underwriter or other person under such underwriting agreement
shall be limited to liability arising from breach of its representations and
warranties and shall be limited to an amount equal to the proceeds (net of
expenses and underwriting discounts and commissions) that it derives from such
registration.
(b) Incidental Underwritten Offerings. In the case of a
registration pursuant to Section 2.2 hereof, if the Company shall have
determined to enter into any underwriting agreements in connection therewith,
all of the Registrable Securities to be included in such registration shall be
subject to such underwriting agreements.
2.5 Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company will give Penske, its
underwriters, if any, and its respective counsel, accountants and other
representatives and agents the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and give each of
them such reasonable access to its books and records and such reasonable
opportunities to discuss the business of the Company with its officers and
employees and the independent public accountants who have certified its
financial statements, and supply all other information reasonably requested by
each of them, as shall be necessary or appropriate, in the opinion of Penske and
such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
2.6 Indemnification.
(a) Indemnification by the Company. The Company agrees that
in the event of any registration of any securities of the Company under the
Securities Act, the Company shall indemnify and hold harmless Penske, its
respective directors, officers, members, partners, agents and affiliates and
each other Person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls Penske or any such
underwriter within the meaning of the Securities Act, against any losses,
claims, damages, or liabilities, joint or several, to which Penske or any such
director, officer, member, partner, agent or affiliate or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities, joint or several (or
actions or proceedings, whether commenced or threatened, in respect thereof),
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any registration
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statement under which such securities were registered under the Securities Act,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading, and the Company shall reimburse Penske and each
such director, officer, member, partner, agent or affiliate, underwriter and
controlling Person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
in any such case to Penske or any such director, officer, member, partner,
agent, affiliate, or controlling person to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of Penske, specifically stating that it is for
use in the preparation thereof; provided, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any person from whom the person asserting any such losses, claims,
damages or liabilities (the "Claimant") purchased securities, or any person
controlling such person, if a copy of the prospectus (as then amended or
supplemented if the Company shall have furnished any amendment or supplement
thereto) was not sent or given by or on behalf of such person to such Claimant,
if required by law to have been so delivered, at or prior to the written
confirmation of the sale of the securities sold to such Claimant, and if the
prospectus (as so amended and supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities. Such indemnity shall remain
in full force regardless of any investigation made by or on behalf of Penske or
any such director, officer, member, partner, agent, affiliate, underwriter or
controlling Person and shall survive the transfer of such securities by Penske.
(b) Indemnification by Penske. As a condition to including
any Registrable Securities in any registration statement, Penske shall indemnify
and hold harmless (in the same manner and to the same extent as set forth in
paragraph (a) of this Section 2.6) the Company, and each director of the
Company, each officer of the Company and each other Person, if any, who controls
the Company within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, but only
to the extent such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of Penske specifically stating that it
is for use in the preparation of such registration statement, preliminary
prospectus, final prospectus,
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summary prospectus, amendment or supplement; provided, however, that the
liability of such indemnifying party under this Section 2.6(b) shall be limited
to the amount of proceeds (net of expenses and underwriting discounts and
commissions) received by such indemnifying party in the offering giving rise to
such liability. Such indemnity shall remain in full force and effect, regardless
of any investigation made by or on behalf of the Company or any such director,
officer or controlling Person and shall survive the transfer of such securities
by Penske.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subsections of this Section 2.6,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action or proceeding; provided, however, that the failure
of any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of this
Section 2.6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice, and shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under this Section 2.6. In case any such action or proceeding is
brought against an indemnified party, the indemnifying party shall be entitled
to participate therein and, unless in the opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
or proceeding include both the indemnified party and the indemnifying party and
if in the opinion of outside counsel to the indemnified party there may be legal
defenses available to such indemnified party and/or other indemnified parties
which are in conflict with or in addition to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to defend such action or proceeding on behalf of such indemnified party
or parties, provided, however, that the indemnifying party shall be obligated to
pay for only one counsel and one local counsel for all indemnified parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by the indemnified party
of such counsel, the indemnifying party shall not be liable to such indemnified
party for any legal expenses subsequently incurred by the latter in connection
with the defense thereof (unless the first proviso in the preceding sentence
shall be applicable). No indemnifying party shall be liable for any settlement
of any action or proceeding effected without its written consent. No
indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
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(d) Contribution. If the indemnification provided for in
this Section 2.6 shall for any reason be held by a court to be unavailable to an
indemnified party under subsection (a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under subsection (a) or (b) hereof, the indemnified
party and the indemnifying party under subsection (a) or (b) hereof shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating the
same), (i) in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand, and the indemnified party on the other,
which resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as shall
be appropriate to reflect not only the relative fault but also the relative
benefits received by the indemnifying party and the indemnified party from the
offering of the securities covered by such registration statement as well as any
other relevant equitable considerations. The parties hereto agree that it would
not be just and equitable if contributions pursuant to this Section 2.6(d) were
to be determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to in the
preceding sentence of this Section 2.6(d). No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. In addition, no Person shall be obligated to
contribute hereunder any amounts in payment for any settlement of any action or
claim effected without such Person's consent, which consent shall not be
unreasonably withheld. Notwithstanding anything in this subsection (d) to the
contrary, no indemnifying party (other than the Company) shall be required to
contribute any amount in excess of the proceeds (net of expenses and
underwriting discounts and commissions) received by such party from the sale of
the Registrable Securities in the offering to which the losses, claims, damages
or liabilities of the indemnified parties relate.
(e) Other Indemnification. Indemnification and contribution
similar to that specified in the preceding subsections of this Section 2.6 (with
appropriate modifications) shall be given by the Company and Penske with respect
to any required registration or other qualification of securities under any
federal, state or blue sky law or regulation of any governmental authority other
than the Securities Act. The indemnification agreements contained in this
Section 2.6 shall be in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to law or contract
and shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the transfer of any of the Registrable Securities by Penske.
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(f) Indemnification Payments. The indemnification and
contribution required by this Section 2.6 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
2.7 Unlegended Certificates. In connection with the offering of
any Registrable Securities registered pursuant to this Section 2, the Company
shall promptly after the sale of such Registrable Securities (i) facilitate the
timely preparation and delivery to Penske and the underwriters, if any,
participating in such offering, of unlegended certificates representing
ownership of such Registrable Securities being sold in such denominations and
registered in such names as requested by Penske or such underwriters and (ii)
instruct any transfer agent and registrar of such Registrable Securities to
release any stop transfer orders with respect to any such Registrable
Securities.
2.8 Limitation on Sale of Securities. The Company hereby agrees
that if it shall previously have received a request for registration pursuant to
Section 2.1 hereof, and if such previous registration shall not have been
withdrawn or abandoned, (i) the Company shall not effect any public or private
offer, sale or distribution of its securities or effect any registration of any
of its equity securities under the Securities Act (other than a registration on
Form S-8 or any successor or similar form which is then in effect), for sale for
its own account, until a period of 120 days (or such shorter period as the
Company shall be advised by the managing underwriter) shall have elapsed from
the effective date of such previous registration, and the Company shall so
provide in any registration rights agreements hereafter entered into with
respect to any of its securities; and (ii) the Company shall use its reasonable
best efforts to cause each holder of its equity securities purchased from the
Company other than as part of a public offering at any time after the date of
this Agreement to agree not to effect any public sale or distribution of any
such securities during such period, including a sale pursuant to Rule 144 under
the Securities Act.
2.9 No Required Sale. Nothing in this Agreement shall be deemed
to create an independent obligation on the part of Penske to sell any
Registrable Securities pursuant to any effective registration statement.
3. Rule 144. The Company shall take all actions reasonably necessary
to enable holders of Registrable Securities to sell such securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144, or (ii) any similar rule or regulation hereafter
adopted by the Commission including, without limiting the generality of the
foregoing, filing on a timely basis all reports required to be filed by the
Exchange Act. Upon the request of Penske, the Company will deliver to such
holder a written statement as to whether it has complied with such requirements.
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17
4. Amendments and Waivers. This Agreement may be amended,
modified or supplemented only by written agreement of the party against whom
enforcement of such amendment, modification or supplement is sought.
5. Adjustments. In the event of any change in the capitalization
of the Company as a result of any stock split, stock dividend, reverse split,
combination, recapitalization, merger, consolidation, or otherwise, the
provisions of this Agreement shall be appropriately adjusted.
6. Notice. All notices and other communications hereunder shall
be in writing and, unless otherwise provided herein, shall be deemed to have
been given when received by the party to whom such notice is to be given at its
address set forth below, or such other address for the party as shall be
specified by notice given pursuant hereto:
(a) If to Penske, to:
Penske Corporation
00000 Xxxxx Xxxxx, Xxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
(b) If to the Company, to it at:
United Auto Group
00000 Xxxxx Xxxxx Xxxx
Xxxxx X00
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
With a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx Jacob, Esq.
Xxxxxx X. Xxxxxxxxx, Esq.
7. Assignment; Third Party Beneficiaries; Majority Controls. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and permitted assigns.
This Agreement may not be assigned by the Company, without the prior written
consent of Penske. Penske may, at its election, at any time or from time to
time, assign its rights under this
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18
Agreement, in whole or in part, to any purchaser or other transferee of
Registrable Securities held by it; provided, however, that any rights to
withdraw shares from inclusion in a registration statement pursuant to Section 2
shall be made only by Penske for itself and all such purchasers and transferees;
and provided, further, that any decision hereunder made by the holders of the
majority of the Registrable Securities shall be binding on all other holders of
Registrable Securities.
8. Remedies. The parties hereto agree that money damages or
other remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that, in addition
to all other remedies available to them, each of them shall be entitled to an
injunction restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including without
limitation specific performance, without bond or other security being required.
In any action or proceeding brought to enforce any provision of this Agreement
(including the indemnification provisions thereof), the successful party shall
be entitled to recover reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.
9. No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted to Penske in this
Agreement or otherwise conflicts with the provisions hereof. The Company
represents and warrants to Penske that it has not previously entered into any
agreement with respect to its securities granting any registration rights to any
Person except to affiliates of Penske Capital Partners, LLC, a Delaware limited
liability company.
10. Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not control or otherwise affect the meaning hereof.
11. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights and obligations of the parties hereto shall
be governed by, the laws of the State of New York, without giving effect to the
conflicts of law principles thereof. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of New York and the United States of America located
in the County of New York for any action or proceeding arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any action or proceeding relating thereto except in such
courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to its respective address set forth in Section
6 hereof 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
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19
transactions contemplated hereby in the courts of the State of New York or the
United States of America located in the County of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
13. Invalidity of Provision. The invalidity or unenforceability
of any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction. If any restriction or provision of this
Agreement is held unreasonable, unlawful or unenforceable in any respect, such
restriction or provision shall be interpreted, revised or applied in a manner
that renders it lawful and enforceable to the fullest extent possible under law.
14. Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all further acts and things and shall execute and
deliver all other agreements, certificates, instruments, and documents as any
other party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
15. Entire Agreement; Effectiveness. This Agreement constitutes
the entire agreement, and supersedes all prior agreements and understandings,
oral and written, between the parties hereto with respect to the subject matter
hereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized.
UNITED AUTO GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
PENSKE AUTOMOTIVE HOLDINGS CORP.
By: /s/ Xxxxx X. Xxxx
-------------------------
Name: Xxxxx X. Xxxx
Title: Treasurer
