<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 23, 1996
REGISTRATION NO. 333-09429
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
UNITED AUTO GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 5511 22-3086739
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification
organization) No.)
</TABLE>
--------------------------
375 PARK AVENUE
NEW YORK, NEW YORK 10152
(212) 223-3300
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
--------------------------
CARL SPIELVOGEL
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
UNITED AUTO GROUP, INC.
375 PARK AVENUE
NEW YORK, NEW YORK 10152
(212) 223-3300
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
--------------------------
COPIES TO:
<TABLE>
<S> <C>
Laurence D. Weltman, Esq. Gerald S. Tanenbaum, Esq.
Willkie Farr & Gallagher Cahill Gordon & Reindel
One Citicorp Center 80 Pine Street
153 East 53rd Street New York, New York 10005
New York, New York 10022 (212) 701-3000
(212) 821-8000
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
--------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Amendment consists of only Part II to the Registration Statement and is
filed solely
for the purpose of filing exhibits.
<PAGE>
PART II
Information Not Required In Prospectus
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses in connection with the sale
and distribution of the securities being registered which will be paid solely by
the Company. All the amounts shown are estimates, except the Commission
registration fee and the NASD filing fee:
<TABLE>
<S> <C>
SEC Registration Fee.................................................... $ 64,029
NASD Fees............................................................... 19,250
NYSE Listing Fee........................................................ 140,000
Transfer Agent and Registrar Fees and Expenses.......................... 12,000
Printing and Engraving Expenses......................................... 485,000
Legal Fees and Expenses................................................. 1,000,000
Accounting Fees and Expenses............................................ 850,000
Blue Sky Fees and Expenses.............................................. 40,000
Miscellaneous Expenses.................................................. 14,721
----------
Total........................................................... $2,625,000
----------
----------
</TABLE>
Item 14. Indemnification of Directors and Officers
Section 145 of the DGCL empowers a Delaware corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of another
corporation or enterprise. A corporation may indemnify such person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, has no
reasonable cause to believe his conduct was unlawful. A corporation may, in
advance of the final disposition of any civil, criminal, administrative or
investigative action, suit or proceeding, pay the expenses (including attorneys'
fees) incurred by any officer or director in defending such action, provided
that the director or officer undertake to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
corporation.
A Delaware corporation may indemnify officers and directors in an action by or
in the right of the corporation to procure a judgment in its favor under the
same conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses (including attorneys' fees) which he actually or reasonably
incurred in connection therewith. The indemnification provided is not deemed to
be exclusive of any other rights to which an officer or director may be entitled
under any corporation's bylaw, agreement, vote or otherwise.
The Company has adopted provisions in its Certificate of Incorporation and
Bylaws that provide that the Company shall indemnify its officers and directors
to the maximum extent permitted under the DGCL. The Spielvogel Employment
Agreement provides for indemnification of Mr. Spielvogel to the maximum extent
legally permitted or authorized by the Company's Certificate of Incorporation or
Bylaws or resolutions of the Board of Directors. The Stockholders Agreement
provides that in the event that a director elected pursuant thereto is made or
threatened to be made a party to any action, suit or proceeding with respect to
which such director may be entitled to indemnification by the Company, such
director will be entitled to be represented by counsel of his choice and the
reasonable expenses of such representation will be reimbursed by the Company to
the extent provided in or authorized by its Certificate of Incorporation or
Bylaws. Certain directors are also entitled to indemnification from the
organizations that employ them.
II-1
<PAGE>
In addition, the Underwriting Agreement filed as Exhibit 1.1 to the Registration
Statement provides for indemnification of the Company, its officers and its
directors by the Underwriters under certain circumstances.
The Company has purchased insurance on behalf of its officers and directors for
liabilities arising out of their capacities as such.
Item 15. Recent Sales of Unregistered Securities
In the three years preceding the filing of this Registration Statement, the
Company has issued the following securities that were not registered under the
Securities Act.
In connection with the Equity Facility, the Company issued shares of its capital
stock in multiple transactions between December 28, 1993 and July 10, 1996.
Montgomery Securities acted as the placement agent for the Equity Facility and
received fees in the amount of $1.4 million in connection therewith. In
addition, on July 10, 1996, the Company issued additional shares of its capital
stock to its existing stockholders on terms substantially similar to those of
the Equity Facility. After giving effect to the Preferred Stock Conversion, the
number of shares of Common Stock purchased and the aggregate offering price paid
by each investor are set forth in the following table:
<TABLE>
<CAPTION>
Aggregate
Shares of Offering
Investor Common Stock Price
- ------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Trace International Holdings, Inc........................................ 3,531,156 $ 28,436,560
Aeneas Venture Corporation............................................... 2,843,656 28,436,560
AIF II, L.P.............................................................. 1,843,656 18,436,560
Ezra P. Mager............................................................ 163,240 1,319,900
Jeremy Grantham.......................................................... 104,474 1,044,740
Jules Kroll.............................................................. 104,474 1,044,740
Andrea Farace............................................................ 52,237 522,370
Natio Vie Developpment................................................... 52,237 522,370
Assu Venture............................................................. 36,566 365,660
Natio Fonds Venture 2.................................................... 36,566 365,660
Carl Spielvogel.......................................................... 26,118 261,180
Jerome Markowitz......................................................... 5,572 55,720
Philip Halperin.......................................................... 5,572 55,720
Derek Lemke-von Ammon.................................................... 2,786 27,860
Frank Dunlevy............................................................ 2,786 27,860
</TABLE>
Pursuant to the Securities Purchase Agreements, the Company issued its Senior
Notes and Warrants in multiple transactions between September 22, 1995 and July
11, 1996. J.P. Morgan Securities Inc. acted as the placement agent for sales to
non-affiliated investors and received fees in the amount of $0.9 million in
connection therewith. In addition, on July 10, 1996, the Company issued
Additional Warrants to such investors. The amount of securities purchased and
the aggregate offering price paid by each investor are set forth in the
following table:
<TABLE>
<CAPTION>
Shares of
Common Stock Aggregate
Principal Amount Subject to Offering
Investor of Senior Notes Warrants Price
- ---------------------------------------------------- ---------------- ----------------- -------------
<S> <C> <C> <C>
J.P. Morgan Capital Corporation (and its
affiliates)........................................ $ 20,000,000 634,198 $ 20,535,164
The Equitable Life Assurance Society
of the United States............................... 15,000,000 475,648 15,401,368
</TABLE>
On April 3, 1996, the Company granted Carl Spielvogel an option to purchase up
to 400,000 shares of Common Stock at an exercise price of $10.00 per share. The
stock option vests in four equal installments beginning on the first anniversary
of October 18, 1994, the date of Mr. Spielvogel's employment with the Company.
Under the Stock Option Plan, adopted April 23, 1996, the Company granted options
to purchase 473,000 shares of Common Stock at an exercise price of $10.00 per
share to employees of the Company and its affiliates. Such options vest in five
equal installments on each of the first five anniversaries of the later of
December 29, 1993 and the optionee's date of employment. See "Management --
Stock Option Plan." The grants of options under the Stock Option Plan were
effected in reliance on Rule 701 promulgated under the Securities Act for offers
and sales pursuant to certain compensatory benefit plans.
II-2
<PAGE>
On July 31, 1996, the Company issued 10,000 shares of Class A Preferred Stock to
Richard Sinkfield for an aggregate offering price of $100,000.
In addition to any exemptions specified above, each of the foregoing offerings
was effected in reliance on Section 4(2) of the Securities Act as a transaction
not involving any public offering.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
<TABLE>
<CAPTION>
No. Description
- ------------ ------------------------------------------------------------------------------------------
<C> <S> <C>
*1.1 Form of Underwriting Agreement.
*3.1 Form of Restated Certificate of Incorporation.
*3.2 Form of Restated Bylaws.
*4.1 Specimen Common Stock certificate.
*5.1 Opinion of Willkie Farr & Gallagher.
*10.1.1.1 Registration Rights Agreement, dated as of October 15, 1993, among the Company and the
investors listed therein.
*10.1.1.2 Amendment to Registration Rights Agreement, dated as of July 31, 1996, among the Company
and the investors listed therein.
*10.1.2 Waiver, Consent and Modification Agreement, dated as of September 22, 1995, among the
Company and its stockholders.
*10.1.3 Letter Agreement, dated September 22, 1996, between the Company and J.P. Morgan Capital
Corporation.
*10.1.4 Form of Warrant.
*10.1.5 Form of Additional Warrant.
*10.1.6 Employment Agreement, dated as of June 21, 1996, between the Company and Carl Spielvogel.
*10.1.7 Severance Agreement, dated April 5, 1996, among the Company, Trace and Ezra P. Mager.
*10.1.8 Stock Option Plan of the Company.
*10.1.9 Registration Rights Agreement, dated as of August 1, 1995, among the Company and the
parties listed on Schedule I thereto.
*10.1.10 Sublease, dated August 1994, between Overseas Partners, Inc. and the Company.
*10.1.11 Letter, dated July 24, 1996, from Chrysler Corporation to the Company.
*10.1.12 Agreement, dated July 24, 1996, between the Company and Toyota Motor Sales U.S.A., Inc.
*10.1.13 Non-employee Director Compensation Plan of the Company.
*10.1.14 Form of Agreement among the Company, certain of its affiliates and American Honda Motor
Co., Inc.
*10.1.15 Form of Option Certificate of the Company in favor of Samuel X. DiFeo and Joseph C. DiFeo.
*10.1.16 Form of Registration Rights Agreement among the Company and the parties listed on Schedule
I thereto.
*10.2.1.1 Honda Automobile Dealer Sales and Service Agreement, dated October 5, 1995, between
American Honda Motor Co. Inc. and Danbury Auto Partnership (standard provisions are in
Exhibit 10.2.1.2 hereto).
*10.2.1.2 American Honda Motor Co. Standard Provisions.
*10.2.2.1 Lexus Dealer Agreement, dated October 5, 1992, between Lexus, a division of Toyota Motor
Sales, U.S.A., Inc. and Somerset Motors Partnership (standard provisions are in Exhibit
10.2.2.2 hereto).
*10.2.2.2 Lexus Dealer Agreement Standard Provisions.
*10.2.3.1 Mitsubishi Motor Sales of America, Inc. Dealer Sales and Service Agreement, dated August
29, 1994, between Mitsubishi Motor Sales of America, Inc. and Rockland Motors Partnership,
as amended August 20, 1996 (standard provisions are in Exhibit 10.2.3.2 hereto).
*10.2.3.2 Mitsubishi Motor Sales of America, Inc. Dealer Sales and Service Agreement Standard
Provisions.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
No. Description
- ------------ ------------------------------------------------------------------------------------------
*10.2.4.1 BMW of North America, Inc. Dealer Agreement, dated January 1, 1994, between BMW of North
America, Inc. and DiFeo BMW Partnership, as amended October 21, 1996 (standard provisions
are in Exhibit 10.2.4.2 hereto).
<C> <S> <C>
*10.2.4.2 BMW of North America, Inc. Dealer Standard Provisions Applicable to Dealer Agreement.
*10.2.5.1 Term Dealer Sales and Service Agreement, dated July 3, 1996, between American Suzuki Motor
Corporation and Fair Hyundai Partnership, as amended September 6, 1996 (standard
provisions are in Exhibit 10.2.5.2)
*10.2.5.2 Suzuki Dealer Sales and Service Agreement Standard Provisions.
*10.2.6.1 Toyota Dealer Agreement, dated May 5, 1995, between Toyota Motor Distributors, Inc. and
Hudson Motors Partnership (standard provisions are in Exhibit 10.2.6.2 hereto).
*10.2.6.2 Toyota Dealer Agreement Standard Provisions.
*10.2.7.1 Oldsmobile Division Dealer Sales and Service Agreement, dated October 2, 1992, between
General Motors Corporation, Oldsmobile Division and J & F Oldsmobile-Isuzu Partnership, as
amended December 20, 1993 and July 23, 1996 (standard provision are in Exhibit 10.2.7.2
hereto).
*10.2.7.2 General Motors Dealer Sales and Service Agreement Standard Provisions.
*10.2.8.1 Chevrolet-Geo Dealer Sales and Service Agreement, dated November 1, 1995, between General
Motors Corporation, Chevrolet Motor Division and Fair Chevrolet-Geo Partnership
(substantially similar to Exhibit 10.2.7.1).
*10.2.9.1 Nissan Dealer Term Sales and Service Agreement, between the Nissan Division of Nissan
Motor Corporation in U.S.A. and DiFeo Nissan Partnership (standard provisions are in
Exhibit 10.2.9.2 hereto).
*10.2.9.2 Nissan Dealer Sales and Service Agreement Standard Provisions.
*10.2.10.1 Chrysler Corporation Term Sales and Service Agreement, dated August 16, 1995, between Fair
Chrysler Plymouth Partnership and Chrysler Corporation, (standard provisions are in
Exhibit 10.2.10.2).
*10.2.10.2 Chrysler Corporation Sales and Service Agreement Additional Terms and Provisions.
*10.2.11 Chrysler Corporation Eagle Sales and Service Agreement, dated October 8, 1992, between
DiFeo Jeep-Eagle Partnership and Chrysler Corporation (substantially similar to Exhibit
10.2.10.1).
*10.2.12 Chrysler Corporation Chrysler Sales and Service Agreement, dated August 16, 1995, between
DiFeo Chrysler Plymouth Jeep Eagle Partnership and Chrysler Corporation (substantially
similar to Exhibit 10.2.10.1).
*10.2.13 Chrysler Corporation Plymouth Sales and Service Agreement, dated November 13, 1992,
between DiFeo Chrysler Plymouth Jeep Eagle Partnership and Chrysler Corporation
(substantially similar to Exhibit 10.2.10.1).
*10.2.14 Toyota Dealer Agreement, dated May 5, 1995, between Toyota Motor Distributors, Inc. and
County Auto Group Partnership (substantially similar to Exhibit 10.2.6.1).
*10.2.15.1 Hyundai Motor America Dealer Sales and Service Agreement, dated October 12, 1992, between
Hyundai Motor America and Fair Hyundai Partnership as amended November 22, 1993, October
12, 1995, March 14, 1996 and September 18, 1996 (standard provisions are in Exhibit
10.2.15.2 hereto).
*10.2.15.2 Hyundai Motor America Dealer Sales and Service Agreement Standard Provisions.
*10.2.16 Hyundai Motor America Dealer Sales and Service Agreement, dated November 22, 1993, as
amended April 1, 1994, and November 3, 1995, between Hyundai Motor America and DiFeo
Hyundai Partnership (substantially similar to Exhibit 10.2.15.1).
*10.2.17 Toyota Dealer Agreement, dated August 23, 1995, between Toyota Motor Distributors, Inc.
and OCT Partnership (substantially similar to Exhibit 10.2.6.1).
*10.2.18 Mitsubishi Motor Sales of America, Inc. Sales and Service Agreement, dated June 30, 1994,
between Mitsubishi Motor Sales of America, Inc. and OCM Partnership (substantially similar
to Exhibit 10.2.3.1).
*10.2.19 Chrysler Corporation Jeep Sales and Service Agreement, dated October 8, 1992, between
DiFeo Jeep-Eagle Partnership and Chrysler Corporation (substantially similar to Exhibit
10.2.10.1).
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
No. Description
- ------------ ------------------------------------------------------------------------------------------
*10.2.20 Chevrolet-Geo Dealer Sales and Service Agreement, dated November 1, 1995 between General
Motors Corporation, Chevrolet Motor Division and DiFeo Chevrolet-Geo Partnership
(substantially similar to Exhibit 10.2.7.1).
<C> <S> <C>
*10.2.21 Isuzu Dealer Sales and Service Agreement, dated as of September 16, 1996 between American
Isuzu Motors Inc. and Fair Cadillac--Oldsmobile--Isuzu Partnership (standard provisions
are in Exhibit 10.2.22 hereto).
*10.2.22 Isuzu Dealer Sales and Service Agreement Additional Provisions.
10.2.23 Loan and Security Agreement, dated as of October 1, 1992, between General Motors
Acceptance Corporation and Hudson Motors Partnership, as amended April 7, 1993 (a
substantially similar agreement exists with each other operating partnership in the DiFeo
Group).
*10.2.24 Unconditional, Continuing Guaranty of Payment of the Company and its affiliates named
therein, dated as of October 1, 1992, in favor of General Motors Acceptance Corporation,
as amended April 7, 1993.
*10.2.25 Term Loan and Borrowing Base Credit Line Loan Agreement, dated as of April 7, 1993,
between General Motors Acceptance Corporation and DiFeo-EMCO Management Partnership.
*10.2.26 Settlement Agreement, dated as of October 3, 1996, among the Company and certain of its
affiliates, on the one hand, and Samuel X. DiFeo, Joseph C. DiFeo and certain of their
affiliates, on the other hand.
*10.2.27 Form of Agreement and Plan of Merger used in the Minority Exchange of the DiFeo Group.
*10.2.28 Form of Lease of certain facilities in the DiFeo Group.
*10.2.29 Lease Agreement, dated September 27, 1990, between J & F Associates and TJGHCC Associates.
*10.2.30 Lease Agreement, dated October 1, 1992, between Manly Chevrolet, Inc. and County Toyota,
Inc.
*10.2.31 Sublease, dated October 1, 1992, between DiFeo BMW, Inc. and DiFeo BMW Partnership.
*10.3.1 Receivables Purchase Agreement, dated as of June 28, 1995, between Atlantic Auto Funding
Corporation and Atlantic Auto Finance Corporation.
*10.3.2 Loan and Security Agreement, dated as of June 28, 1995, among Atlantic Auto Funding
Corporation, Atlantic Auto Finance Corporation and Citibank, N.A.
*10.3.3 Support Agreement of the Company, dated as of June 28, 1995, in favor of Atlantic Auto
Funding Corporation.
*10.3.4 Purchase Agreement, dated as of June 14, 1996, between Atlantic Auto Finance Corporation
and Atlantic Auto Second Funding Corporation.
*10.3.5 Transfer and Administration Agreement, dated as of June 14, 1996, among Atlantic Auto
Second Funding Corporation, Atlantic Auto Finance Corporation and Morgan Guaranty Trust
Company of New York.
*10.3.6 Support Agreement of the Company, dated as of June 18, 1996, in favor of Atlantic Auto
Second Funding Corporation.
*10.3.7 Pooling and Servicing Agreement relating to Atlantic Auto Grantor Trust 1996-A, dated as
of June 20, 1996, among Atlantic Auto Third Funding Corporation, Atlantic Auto Finance
Corporation and The Chase Manhattan Bank.
*10.3.8 Insurance and Indemnity Agreement, dated as of June 20, 1996, among Financial Security
Assurance Inc., Atlantic Auto Third Funding Corporation and Atlantic Auto Finance
Corporation.
*10.3.9 Master Spread Account Agreement, dated as of June 20, 1996, among Atlantic Auto Third
Funding Corporation, Financial Security Assurance Inc. and The Chase Manhattan Bank.
*10.3.10 Lease Agreement, dated as of March 18, 1994, between Perinton Hills and the Company,
including guaranty of lease of Atlantic Auto Finance Corporation.
*10.4.1 Amended and Restated Stock Purchase Agreement, dated as of July 1, 1995, among the
Company, Landers Auto Sales, Inc., Steve Landers, John Landers and Bob Landers.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
No. Description
- ------------ ------------------------------------------------------------------------------------------
*10.4.2 Promissory Note of the Company, dated August 1, 1995, in favor of Steve Landers and John
Landers.
<C> <S> <C>
*10.4.3 Promissory Note of the Company, dated August 1, 1995, in favor of Steve Landers and John
Landers.
*10.4.4 Guarantee of the Company, dated as of August 1, 1995, in favor of Steve Landers and John
Landers.
*10.4.5 Employment Agreement, dated as of August 1, 1995, between Landers Auto Sales, Inc. and
Steve Landers.
*10.4.6 Lease, dated as of August 1, 1995, among Steve Landers, John Landers, Bob Landers and
Landers Auto Sales, Inc., regarding Jeep-Eagle premises.
*10.4.7 Lease, dated as of August 1, 1995, among Steve Landers, John Landers, Bob Landers and
Landers Auto Sales, Inc., regarding Oldsmobile-GMC premises.
*10.4.8 Shareholders' Agreement, dated as of August 1, 1995, among the Company, United Landers,
Inc., Landers Auto Sales, Inc., Steve Landers and John Landers.
*10.4.9 Chrysler Corporation Eagle Sales and Service Agreement, dated August 16, 1995, between
United Landers Auto Sales, Inc. and Chrysler Corporation (standard provisions are in
Exhibit 10.2.10.2).
*10.4.10 Chrysler Corporation Jeep Sales and Service Agreement, dated August 16, 1995, between
United Landers Auto Sales, Inc. and Chrysler Corporation (substantially similar to Exhibit
10.4.9).
*10.4.11 Chrysler Corporation Dodge Sales and Service Agreement, dated August 16, 1995, between
United Landers Auto Sales, Inc. and Chrysler Corporation (substantially similar to Exhibit
10.4.9).
*10.4.12 Chrysler Corporation Plymouth Sales and Service Agreement, dated August 16, 1995, between
United Landers Auto Sales, Inc. and Chrysler Corporation (substantially similar to Exhibit
10.4.9).
*10.4.13 Chrysler Corporation Chrysler Sales and Service Agreement, dated August 16, 1995, between
United Landers Auto Sales, Inc. and Chrysler Corporation (substantially similar to Exhibit
10.4.9).
*10.4.14 Oldsmobile Division Dealer Sales and Service Agreement, dated November 1, 1995, between
General Motors Corporation, Oldsmobile Division and United Landers Auto Sales, Inc.
(substantially similar to Exhibit 10.2.7.1).
*10.4.15 GMC Truck Division Dealer Sales and Service Agreement, dated November 1, 1995, between
General Motors Corporation, GMC Truck Division and United Landers Auto Sales, Inc.
(substantially similar to Exhibit 10.2.7.1).
*10.4.16 Security Agreement and Master Credit Agreement, dated October 25, 1993, between Landers
Oldsmobile-GMC Inc. and Chrysler Credit Corporation.
*10.4.17 Security Agreement and Master Credit Agreement, dated May 17, 1989, between Landers
Jeep-Eagle, Inc. and Chrysler Credit Corporation.
*10.4.18 Continuing Guaranty of United Landers, Inc., dated August 15, 1994, in favor of Chrysler
Credit Corporation.
*10.4.19 Commercial Loan Agreement, dated December 5, 1994, between Landers Oldsmobile-GMC, Inc.
and The Benton State Bank.
*10.4.20 Commercial Security Agreement, dated December 5, 1994, between Landers Oldsmobile-GMC,
Inc. and The Benton State Bank.
*10.4.21 Agreement, dated July 31, 1995, between the Company and General Motors Corporation,
Oldsmobile Division.
*10.5.1 Stock Purchase Agreement, dated as of November 17, 1995, among the Company, UAG Atlanta,
Inc., Atlanta Toyota, Inc. and Carl H. Westcott.
*10.5.2 Promissory Note of UAG Atlanta, Inc., dated January 16, 1996, in favor of Carl H.
Westcott.
*10.5.3 Guaranty of the Company, dated as of January 16, 1996, in favor of Carl Westcott.
*10.5.4 Promissory Note of Atlanta Toyota, Inc., dated January 16, 1996, in favor of First
Extended Service Corporation.
*10.5.5 Guaranty of the Company, dated as of January 16, 1996, in favor of Carl Westcott.
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
No. Description
- ------------ ------------------------------------------------------------------------------------------
*10.5.6 Lease Agreement, dated as of January 3, 1996, between Carl Westcott and Atlanta Toyota,
Inc.
<C> <S> <C>
*10.5.7 Lease Guaranty of the Company, dated as of January 16, 1996, in favor of Carl Westcott.
*10.5.8 Toyota Dealer Agreement, dated January 16, 1996, between Southeast Toyota Motor
Distributors, Inc. and Atlanta Toyota, Inc. (substantially similar to Exhibit 10.2.6.1).
*10.5.9 Wholesale Floor Plan Security Agreement, dated May 24, 1996, between World Omni Financial
Corp. and Atlanta Toyota, Inc.
*10.5.10 Continuing Guaranty of the Company in favor of World Omni Financial Corp. and certain
affiliates.
*10.5.11 Inventory Financing Payment Agreement, dated May 24, 1996, among Atlanta Toyota, Inc.,
Fidelity Warranty Services, Inc. and World Omni Financial Corp.
*10.5.12 Shareholders' Agreement, dated as of July 31, 1996, among the Company, UAG Atlanta, Inc.,
Atlanta Toyota and John Smith.
*10.5.13 Employment Agreement, dated as of January 16, 1996, among the Company, UAG Atlanta, Inc.
and John Smith.
*10.6.1 Stock Purchase Agreement, dated as of March 1, 1996, among the Company, UAG Atlanta II,
Inc., Steve Rayman Nissan, Inc., Steven L. Rayman and Richard W. Keffer, Jr.
*10.6.2 Employment Agreement, dated as of May 1, 1996, among the Company, UAG Atlanta II, Inc.,
Steve Rayman Nissan, Inc. and Bruce G. Dunker.
*10.6.3 Lease Agreement, dated as of May 1, 1996, among Steven L. Rayman, Richard W. Keffer, Jr.
and Steve Rayman Nissan, Inc.
*10.6.4 Nissan Dealer Term Sales and Service Agreement, between the Nissan Division of Nissan
Motor Corporation in U.S.A. and United Nissan, Inc. (substantially similar to Exhibit
10.2.9.1).
*10.6.5 Wholesale Floor Plan Security Agreement, dated April 29, 1996, between World Omni
Financial Corp. and United Nissan, Inc. (substantially similar to Exhibit 10.5.9).
*10.6.6 Continuing Guaranty of the Company, dated April 29, 1996, in favor of World Omni Financial
Corp. and certain affiliates (substantially similar to Exhibit 10.5.10).
*10.7.1 Stock Purchase Agreement, dated as of June 7, 1996, among the Company, UAG Atlanta III,
Inc., Hickman Nissan, Inc., Lynda Jane Hickman and Lynda Jane Hickman as Executrix under
the will of James Franklin Hickman, Jr., deceased.
*10.7.2 Nissan Dealer Term Sales and Service Agreement, between the Nissan Division of Nissan
Motor Corporation in U.S.A. and Peachtree Nissan, Inc. (substantially similar to Exhibit
10.2.9.1).
*10.7.3 Automotive Wholesale Financing and Security Agreement, dated July 12, 1996, between Nissan
Motor Acceptance Corporation and Peachtree Nissan, Inc.
*10.7.4 Guaranty of the Company and UAG Atlanta III, Inc., dated July 12, 1996, in favor of Nissan
Motor Acceptance Corporation.
*10.7.5 Promissory Note of UAG Atlanta III, Inc., dated July 12, 1996, in favor of Lynda Jane
Hickman, as Executrix under the will of James Franklin Hickman, Jr.
*10.7.6 Guaranty of Note of Hickman Nissan, Inc., dated July 12, 1996, in favor of Lynda Jane
Hickman, as Executrix under the will of James Franklin Hickman, Jr.
*10.7.7 Guaranty of Note of the Company, dated July 12, 1996, in favor of Lynda Jane Hickman, as
Executrix under the will of James Franklin Hickman, Jr.
*10.7.8 Lease Agreement, dated July 12, 1996, between Lynda Jane Hickman, as Executrix under the
will of James Franklin Hickman, Jr., and Hickman Nissan, Inc.
*10.7.9 Lease Agreement, dated July 12, 1996, between Argonne Enterprises, Inc. and Hickman
Nissan, Inc.
*10.7.10 Guaranty of Lease of the Company, dated July 12, 1996, in favor of Lynda Jane Hickman, as
Executrix under the will of James Franklin Hickman, Jr.
*10.7.11 Guaranty of Lease of the Company, dated July 12, 1996, in favor of Argonne Enterprises,
Inc.
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
No. Description
- ------------ ------------------------------------------------------------------------------------------
*10.8.1 Stock Purchase Agreement, dated as of June 6, 1996, among the Company, UAG West, Inc.,
Scottsdale Jaguar, LTD., SA Automotive, LTD., SL Automotive, LTD., SPA Automotive, LTD.,
LRP, LTD., Sun BMW, LTD., Scottsdale Management Group, LTD., 6725 Dealership, LTD., Steven
Knappenberger Revocable Trust Dated April 15, 1983, as amended, Brochick 6725 Trust dated
December 29, 1992, Beskind 6725 Trust dated December 29, 1992, Steven Knappenberger, Jay
P. Beskind December 29, 1992, Knappenberger 6725 Trust dated and George W. Brochick, as
amended on October 21, 1996 by Amendment No. 1, Amendment No. 2 and Amendment No. 3.
<C> <S> <C>
*10.8.2 Purchase and Sale Agreement, 6905 E. McDowell Road, dated June 6, 1996, among Steven
Knappenberger, as Trustee of the Steven Knappenberger Revocable Trust II, Bruce
Knappenberger, as Trustee of the Bruce Knappenberger Trust and UAG West, Inc.
*10.8.3 Form of Employment Agreement between the Company, UAG West, Inc. and Steven Knappenberger.
*10.8.4 Form of Broker's Agreement between UAG West, Inc. and KBB, Inc.
*10.8.5.1 Form of Audi Dealer Agreement (standard provisions are in Exhibit 10.8.5.2 hereto).
*10.8.5.2 Audi Standard Provisions.
*10.8.6.1 Form of Acura Automobile Dealer Sales and Service Agreement (standard provisions are in
Exhibit 10.8.6.2 hereto).
*10.8.6.2 Acura Standard Provisions.
*10.8.7.1 Form of BMW of North America Dealer Agreement (substantially similar to Exhibit 10.2.4.1).
*10.8.8.1 Form of Porsche Sales and Service Agreement.
10.8.8.2 Form of Addendum to Porsche Sales and Service Agreement.
10.8.9.1 Form of Land Rover North America, Inc. Dealer Agreement.
10.8.9.2 Land Rover Standard Provisions.
*10.8.10 Sublease, dated June 7, 1988, between Max of Switzerland and Scottsdale Porsche & Audi,
Ltd.
*10.8.11 Lease, dated October 1990, between Lisa B. Zelinsky and R. J. Morgan Corporation of
America and Scottsdale Hyundai, Ltd.
*10.8.12 Sublease, dated July 1, 1995, between Camelback Automotive, Inc. and LRP Ltd.
*10.8.13 Lease, dated February 27, 1995, between Lee S. Maas and Sun BMW Ltd.
*10.8.14 Form of Shareholders' Agreement among UAG West, Inc., SK Motors, Ltd., and the
Knappenberger Revocable Trust.
*10.8.15 Form of Management Agreement among the Company, UAG West, Inc. and Scottsdale Jaguar, Ltd.
*10.8.16 Form of Lease Agreement between 6725 Agent and Scottsdale Jaguar, Ltd.
10.8.17 Form of Indemnification Agreement among the Company, UAG West, Inc., Scottsdale Jaguar,
Ltd., Steven Knappenberger, and certain other individuals and trusts.
*10.8.18 Form of Real Estate Loan and Security Agreement, made by SA Automotive, Ltd. for the
benefit of Chrysler Financial Corporation.
*10.8.19 Form of Security Agreement and Master Credit Agreement of Chrysler Credit Corporation
(substantially similar to Exhibit 10.4.16).
*10.8.20 Form of Continuing Guaranty of each of the Company and UAG West, Inc. in favor of Chrysler
Credit Corporation (substantially similar to Exhibit 10.4.18).
*10.9.1 Stock Purchase Agreement, dated August 5, 1996, among the Company, UAG Atlanta IV, Inc.,
Charles Evans BMW, Inc. and Charles F. Evans.
*10.9.2 Stock Purchase Agreement, dated August 5, 1996, among the Company, UAG Atlanta IV, Inc.,
Charles Evans Nissan, Inc. and Charles F. Evans.
*10.9.3 Form of Dealer Agreement between BMW North America, Inc. and Charles Evans BMW Inc.
(substantially similar to Exhibit 10.2.4.1).
*10.9.4 Form of Nissan Dealer Term Sales and Service Agreement between Nissan Motor Corporation in
U.S.A. and Charles Evans Nissan, Inc. (substantially similar to Exhibit 10.2.9.1).
*10.9.5 Form of Lease Agreement between Charles F. Evans and Charles Evans
BMW, Inc.
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
No. Description
- ------------ ------------------------------------------------------------------------------------------
*10.9.6 Form of Lease Guaranty of the Company in favor of Charles F. Evans.
<C> <S> <C>
*10.9.7 Form of Lease Agreement between Charles F. Evans and Charles Evans Nissan, Inc.
10.9.8 Form of Lease Guaranty of the Company in favor of Charles F. Evans.
*10.9.9 Form of Purchase and Sale Agreement for Charles Evans BMW Property between Charles F.
Evans and the Company.
*10.9.10 Form of Purchase and Sale Agreement for Charles Evans Nissan Property between Charles F.
Evans and the Company.
*10.9.11 Form of Inventory Financing and Security Agreement between BMW Financial Services NA, Inc.
and UAG Atlanta IV Motors, Inc.
*10.9.12 Form of Guaranty of the Company in favor of BMW Financial Services NA, Inc.
*10.9.13 Form of Inventory Financing and Security Agreement between BMW Financial Services NA, Inc.
and Conyers Nissan, Inc. (substantially similar to Exhibit 10.9.11).
*10.9.14 Form of Guaranty of the Company in favor of BMW Financial Services NA, Inc. (substantially
similar to Exhibit 10.9.12).
*10.10.1 Stock Purchase Agreement, dated September 5, 1996, among the Company, UAG Tennessee, Inc.,
Standefer Motor Sales, Inc., Charles A. Standefer and Charles A. Standefer and Karen S.
Nicely, trustees under the Irrevocable Trust Agreement of Charles B. Standefer for the
primary benefit of children, dated December 21, 1992.
10.10.2 Form of Nissan Dealer Term Sales and Service Agreement between Nissan Motor Corporation in
U.S.A. and Conyers Nissan, Inc. (standard provisions are in Exhibit 10.2.9.2).
*10.10.3 Form of Lease Agreement between Standefer Investment Company and Standefer Motor Sales,
Inc.
10.10.4 Form of Lease Guaranty of the Company in favor of Standefer Investment Company.
*10.10.5 Form of Security Agreement and Master Credit Agreement between Chrysler Credit Corporation
and Standefer Motor Sales, Inc. (substantially similar to Exhibit 10.4.16).
*10.10.6 Form of Continuing Guaranty of each of the Company and UAG Tennessee, Inc. in favor of
Chrysler Credit Corporation (substantially similar to Exhibit 10.4.18).
*11.1 Statement re computation of per share earnings.
*21.1 List of subsidiaries of the Company.
*23.1.1 Consent of Coopers & Lybrand L.L.P.
*23.1.2 Consent of Coopers & Lybrand L.L.P.
*23.1.3 Consent of Coopers & Lybrand L.L.P.
*23.1.4 Consent of Coopers & Lybrand L.L.P.
*23.1.5 Consent of Coopers & Lybrand L.L.P.
*23.1.6 Consent of Coopers & Lybrand L.L.P.
*23.1.7 Consent of Coopers & Lybrand L.L.P.
*23.1.8 Consent of Coopers & Lybrand L.L.P.
*23.2 Consent of Willkie Farr & Gallagher (included in Exhibit 5.1).
*24.1 Powers of Attorney.
*27.1 Financial Data Schedules.
</TABLE>
- ------------------------
*Previously filed.
(b) Financial Statement Schedule
Schedule II--Valuation and Qualifying Accounts
Item 17. Undertakings
(1) The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreements certificates for the
Common Stock in such denominations and registered in such names as required
by the Underwriters to permit prompt delivery to each purchaser.
(2) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to its Bylaws, the Underwriting Agreements or otherwise,
the Registrant has been advised that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director,
II-9
<PAGE>
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(3) The Registrant hereby undertakes that:
(a)For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of the
Registration Statement as of the time it was declared effective.
(b)For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Post-effective Amendment No. 1 to be signed on its behalf by
the undersigned, thereunto duly authorized, in New York, New York on October 23,
1996.
UNITED AUTO GROUP, INC.
By: /s/ PHILIP N. SMITH, JR.
-----------------------------------
Philip N. Smith, Jr.
VICE PRESIDENT, SECRETARY
AND GENERAL COUNSEL
Pursuant to the requirements of the Securities Act of 1933, this Post-effective
Amendment No. 1 has been signed by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------------------------ ------------------------------------------------- ------------------
<C> <S> <C>
*
--------------------------------- Chairman of the Board and Chief Executive Officer October 23, 1996
Carl Spielvogel (Principal Executive Officer)
*
--------------------------------- Executive Vice President and Chief Financial October 23, 1996
Arthur J. Rawl Officer (Principal Financial Officer)
/s/ ROBERT W. THOMPSON
--------------------------------- Vice President-Finance (Principal Accounting October 22, 1996
Robert W. Thompson Officer)
*
--------------------------------- Director October 23, 1996
Marshall S. Cogan
*
--------------------------------- Director October 23, 1996
Michael R. Eisenson
*
--------------------------------- Director October 23, 1996
John J. Hannan
*
--------------------------------- Director October 23, 1996
Jules B. Kroll
*
--------------------------------- Director October 23, 1996
Robert H. Nelson
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------------------------ ------------------------------------------------- ------------------
<C> <S> <C>
*
--------------------------------- Director October 23, 1996
John M. Sallay
*
--------------------------------- Director October 23, 1996
Richard Sinkfield
*By: /s/ PHILIP N. SMITH, JR.
----------------------------
Attorney-in-fact
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------------ ---------------------------------------------------------------------------------------------
<C> <S> <C>
*1.1 Form of Underwriting Agreement.
*3.1 Form of Restated Certificate of Incorporation.
*3.2 Form of Restated Bylaws.
*4.1 Specimen Common Stock certificate.
*5.1 Opinion of Willkie Farr & Gallagher.
*10.1.1.1 Registration Rights Agreement, dated as of October 15, 1993, among the Company and the
investors listed therein.
*10.1.1.2 Amendment to Registration Rights Agreement, dated as of July 31, 1996, among the Company and
the investors listed therein.
*10.1.2 Waiver, Consent and Modification Agreement, dated as of September 22, 1995, among the Company
and its stockholders.
*10.1.3 Letter Agreement, dated September 22, 1996, between the Company and J.P. Morgan Capital
Corporation.
*10.1.4 Form of Warrant.
*10.1.5 Form of Additional Warrant.
*10.1.6 Employment Agreement, dated as of June 21, 1996, between the Company and Carl Spielvogel.
*10.1.7 Severance Agreement, dated April 5, 1996, among the Company, Trace and Ezra P. Mager.
*10.1.8 Stock Option Plan of the Company.
*10.1.9 Registration Rights Agreement, dated as of August 1, 1995, among the Company and the parties
listed on Schedule I thereto.
*10.1.10 Sublease, dated August 1994, between Overseas Partners, Inc. and the Company.
*10.1.11 Letter, dated July 24, 1996, from Chrysler Corporation to the Company.
*10.1.12 Agreement, dated July 24, 1996, between the Company and Toyota Motor Sales U.S.A., Inc.
*10.1.13 Non-employee Director Compensation Plan of the Company.
*10.1.14 Form of Agreement among the Company, certain of its affiliates and American Honda Motor Co.,
Inc.
*10.1.15 Form of Option Certificate of the Company in favor of Samuel X. DiFeo and Joseph C. DiFeo.
*10.1.16 Form of Registration Rights Agreement among the Company and the parties listed on Schedule I
thereto.
*10.2.1.1 Honda Automobile Dealer Sales and Service Agreement, dated October 5, 1995, between American
Honda Motor Co. Inc. and Danbury Auto Partnership (standard provisions are in Exhibit
10.2.1.2 hereto).
*10.2.1.2 American Honda Motor Co. Standard Provisions.
*10.2.2.1 Lexus Dealer Agreement, dated October 5, 1992, between Lexus, a division of Toyota Motor
Sales, U.S.A., Inc. and Somerset Motors Partnership (standard provisions are in Exhibit
10.2.2.2 hereto).
*10.2.2.2 Lexus Dealer Agreement Standard Provisions.
*10.2.3.1 Mitsubishi Motor Sales of America, Inc. Dealer Sales and Service Agreement, dated August 29,
1994, between Mitsubishi Motor Sales of America, Inc. and Rockland Motors Partnership, as
amended August 20, 1996 (standard provisions are in Exhibit 10.2.3.2 hereto).
*10.2.3.2 Mitsubishi Motor Sales of America, Inc. Dealer Sales and Service Agreement Standard
Provisions.
*10.2.4.1 BMW of North America, Inc. Dealer Agreement, dated January 1, 1994, between BMW of North
America, Inc. and DiFeo BMW Partnership, as amended October 21, 1996 (standard provisions are
in Exhibit 10.2.4.2 hereto).
*10.2.4.2 BMW of North America, Inc. Dealer Standard Provisions Applicable to Dealer Agreement.
*10.2.5.1 Term Dealer Sales and Service Agreement, dated July 3, 1996, between American Suzuki Motor
Corporation and Fair Hyundai Partnership, as amended September 6, 1996 (standard provisions
are in Exhibit 10.2.5.2)
*10.2.5.2 Suzuki Dealer Sales and Service Agreement Standard Provisions.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------------ ---------------------------------------------------------------------------------------------
*10.2.6.1 Toyota Dealer Agreement, dated May 5, 1995, between Toyota Motor Distributors, Inc. and
Hudson Motors Partnership (standard provisions are in Exhibit 10.2.6.2 hereto).
<C> <S> <C>
*10.2.6.2 Toyota Dealer Agreement Standard Provisions.
*10.2.7.1 Oldsmobile Division Dealer Sales and Service Agreement, dated October 2, 1992, between
General Motors Corporation, Oldsmobile Division and J & F Oldsmobile-Isuzu Partnership, as
amended December 20, 1993 and July 23, 1996 (standard provision are in Exhibit 10.2.7.2
hereto).
*10.2.7.2 General Motors Dealer Sales and Service Agreement Standard Provisions.
*10.2.8.1 Chevrolet-Geo Dealer Sales and Service Agreement, dated November 1, 1995, between General
Motors Corporation, Chevrolet Motor Division and Fair Chevrolet-Geo Partnership
(substantially similar to Exhibit 10.2.7.1).
*10.2.9.1 Nissan Dealer Term Sales and Service Agreement, between the Nissan Division of Nissan Motor
Corporation in U.S.A. and DiFeo Nissan Partnership (standard provisions are in Exhibit
10.2.9.2 hereto).
*10.2.9.2 Nissan Dealer Sales and Service Agreement Standard Provisions.
*10.2.10.1 Chrysler Corporation Term Sales and Service Agreement, dated August 16, 1995, between Fair
Chrysler Plymouth Partnership and Chrysler Corporation, (standard provisions are in Exhibit
10.2.10.2).
*10.2.10.2 Chrysler Corporation Sales and Service Agreement Additional Terms and Provisions.
*10.2.11 Chrysler Corporation Eagle Sales and Service Agreement, dated October 8, 1992, between DiFeo
Jeep-Eagle Partnership and Chrysler Corporation (substantially similar to Exhibit 10.2.10.1).
*10.2.12 Chrysler Corporation Chrysler Sales and Service Agreement, dated August 16, 1995, between
DiFeo Chrysler Plymouth Jeep Eagle Partnership and Chrysler Corporation (substantially
similar to Exhibit 10.2.10.1).
*10.2.13 Chrysler Corporation Plymouth Sales and Service Agreement, dated November 13, 1992, between
DiFeo Chrysler Plymouth Jeep Eagle Partnership and Chrysler Corporation (substantially
similar to Exhibit 10.2.10.1).
*10.2.14 Toyota Dealer Agreement, dated May 5, 1995, between Toyota Motor Distributors, Inc. and
County Auto Group Partnership (substantially similar to Exhibit 10.2.6.1).
*10.2.15.1 Hyundai Motor America Dealer Sales and Service Agreement, dated October 12, 1992, between
Hyundai Motor America and Fair Hyundai Partnership as amended November 22, 1993, October 12,
1995, March 14, 1996 and September 18, 1996 (standard provisions are in Exhibit 10.2.15.2
hereto).
*10.2.15.2 Hyundai Motor America Dealer Sales and Service Agreement Standard Provisions.
*10.2.16 Hyundai Motor America Dealer Sales and Service Agreement, dated November 22, 1993, as amended
April 1, 1994, and November 3, 1995, between Hyundai Motor America and DiFeo Hyundai
Partnership (substantially similar to Exhibit 10.2.15.1).
*10.2.17 Toyota Dealer Agreement, dated August 23, 1995, between Toyota Motor Distributors, Inc. and
OCT Partnership (substantially similar to Exhibit 10.2.6.1).
*10.2.18 Mitsubishi Motor Sales of America, Inc. Sales and Service Agreement, dated June 30, 1994,
between Mitsubishi Motor Sales of America, Inc. and OCM Partnership (substantially similar to
Exhibit 10.2.3.1).
*10.2.19 Chrysler Corporation Jeep Sales and Service Agreement, dated October 8, 1992, between DiFeo
Jeep-Eagle Partnership and Chrysler Corporation (substantially similar to Exhibit 10.2.10.1).
*10.2.20 Chevrolet-Geo Dealer Sales and Service Agreement, dated November 1, 1995 between General
Motors Corporation, Chevrolet Motor Division and DiFeo Chevrolet-Geo Partnership
(substantially similar to Exhibit 10.2.7.1).
*10.2.21 Isuzu Dealer Sales and Service Agreement, dated as of September 16, 1996 between American
Isuzu Motors Inc. and Fair Cadillac--Oldsmobile--Isuzu Partnership (standard provisions are
in Exhibit 10.2.22 hereto).
*10.2.22 Isuzu Dealer Sales and Service Agreement Additional Provisions.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------------ ---------------------------------------------------------------------------------------------
10.2.23 Loan and Security Agreement, dated as of October 1, 1992, between General Motors Acceptance
Corporation and Hudson Motors Partnership, as amended April 7, 1993 (a substantially similar
agreement exists with each other operating partnership in the DiFeo Group).
<C> <S> <C>
*10.2.24 Unconditional, Continuing Guaranty of Payment of the Company and its affiliates named
therein, dated as of October 1, 1992, in favor of General Motors Acceptance Corporation, as
amended April 7, 1993.
*10.2.25 Term Loan and Borrowing Base Credit Line Loan Agreement, dated as of April 7, 1993, between
General Motors Acceptance Corporation and DiFeo-EMCO Management Partnership.
*10.2.26 Settlement Agreement, dated as of October 3, 1996, among the Company and certain of its
affiliates, on the one hand, and Samuel X. DiFeo, Joseph C. DiFeo and certain of their
affiliates, on the other hand.
*10.2.27 Form of Agreement and Plan of Merger used in the Minority Exchange of the DiFeo Group.
*10.2.28 Form of Lease of certain facilities in the DiFeo Group.
*10.2.29 Lease Agreement, dated September 27, 1990, between J & F Associates and TJGHCC Associates.
*10.2.30 Lease Agreement, dated October 1, 1992, between Manly Chevrolet, Inc. and County Toyota, Inc.
*10.2.31 Sublease, dated October 1, 1992, between DiFeo BMW, Inc. and DiFeo BMW Partnership.
*10.3.1 Receivables Purchase Agreement, dated as of June 28, 1995, between Atlantic Auto Funding
Corporation and Atlantic Auto Finance Corporation.
*10.3.2 Loan and Security Agreement, dated as of June 28, 1995, among Atlantic Auto Funding
Corporation, Atlantic Auto Finance Corporation and Citibank, N.A.
*10.3.3 Support Agreement of the Company, dated as of June 28, 1995, in favor of Atlantic Auto
Funding Corporation.
*10.3.4 Purchase Agreement, dated as of June 14, 1996, between Atlantic Auto Finance Corporation and
Atlantic Auto Second Funding Corporation.
*10.3.5 Transfer and Administration Agreement, dated as of June 14, 1996, among Atlantic Auto Second
Funding Corporation, Atlantic Auto Finance Corporation and Morgan Guaranty Trust Company of
New York.
*10.3.6 Support Agreement of the Company, dated as of June 18, 1996, in favor of Atlantic Auto Second
Funding Corporation.
*10.3.7 Pooling and Servicing Agreement relating to Atlantic Auto Grantor Trust 1996-A, dated as of
June 20, 1996, among Atlantic Auto Third Funding Corporation, Atlantic Auto Finance
Corporation and The Chase Manhattan Bank.
*10.3.8 Insurance and Indemnity Agreement, dated as of June 20, 1996, among Financial Security
Assurance Inc., Atlantic Auto Third Funding Corporation and Atlantic Auto Finance
Corporation.
*10.3.9 Master Spread Account Agreement, dated as of June 20, 1996, among Atlantic Auto Third Funding
Corporation, Financial Security Assurance Inc. and The Chase Manhattan Bank.
*10.3.10 Lease Agreement, dated as of March 18, 1994, between Perinton Hills and the Company,
including guaranty of lease of Atlantic Auto Finance Corporation.
*10.4.1 Amended and Restated Stock Purchase Agreement, dated as of July 1, 1995, among the Company,
Landers Auto Sales, Inc., Steve Landers, John Landers and Bob Landers.
*10.4.2 Promissory Note of the Company, dated August 1, 1995, in favor of Steve Landers and John
Landers.
*10.4.3 Promissory Note of the Company, dated August 1, 1995, in favor of Steve Landers and John
Landers.
*10.4.4 Guarantee of the Company, dated as of August 1, 1995, in favor of Steve Landers and John
Landers.
*10.4.5 Employment Agreement, dated as of August 1, 1995, between Landers Auto Sales, Inc. and Steve
Landers.
*10.4.6 Lease, dated as of August 1, 1995, among Steve Landers, John Landers, Bob Landers and Landers
Auto Sales, Inc., regarding Jeep-Eagle premises.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------------ ---------------------------------------------------------------------------------------------
*10.4.7 Lease, dated as of August 1, 1995, among Steve Landers, John Landers, Bob Landers and Landers
Auto Sales, Inc., regarding Oldsmobile-GMC premises.
<C> <S> <C>
*10.4.8 Shareholders' Agreement, dated as of August 1, 1995, among the Company, United Landers, Inc.,
Landers Auto Sales, Inc., Steve Landers and John Landers.
*10.4.9 Chrysler Corporation Eagle Sales and Service Agreement, dated August 16, 1995, between United
Landers Auto Sales, Inc. and Chrysler Corporation (standard provisions are in Exhibit
10.2.10.2).
*10.4.10 Chrysler Corporation Jeep Sales and Service Agreement, dated August 16, 1995, between United
Landers Auto Sales, Inc. and Chrysler Corporation (substantially similar to Exhibit 10.4.9).
*10.4.11 Chrysler Corporation Dodge Sales and Service Agreement, dated August 16, 1995, between United
Landers Auto Sales, Inc. and Chrysler Corporation (substantially similar to Exhibit 10.4.9).
*10.4.12 Chrysler Corporation Plymouth Sales and Service Agreement, dated August 16, 1995, between
United Landers Auto Sales, Inc. and Chrysler Corporation (substantially similar to Exhibit
10.4.9).
*10.4.13 Chrysler Corporation Chrysler Sales and Service Agreement, dated August 16, 1995, between
United Landers Auto Sales, Inc. and Chrysler Corporation (substantially similar to Exhibit
10.4.9).
*10.4.14 Oldsmobile Division Dealer Sales and Service Agreement, dated November 1, 1995, between
General Motors Corporation, Oldsmobile Division and United Landers Auto Sales, Inc.
(substantially similar to Exhibit 10.2.7.1).
*10.4.15 GMC Truck Division Dealer Sales and Service Agreement, dated November 1, 1995, between
General Motors Corporation, GMC Truck Division and United Landers Auto Sales, Inc.
(substantially similar to Exhibit 10.2.7.1).
*10.4.16 Security Agreement and Master Credit Agreement, dated October 25, 1993, between Landers
Oldsmobile-GMC Inc. and Chrysler Credit Corporation.
*10.4.17 Security Agreement and Master Credit Agreement, dated May 17, 1989, between Landers Jeep-
Eagle, Inc. and Chrysler Credit Corporation.
*10.4.18 Continuing Guaranty of United Landers, Inc., dated August 15, 1994, in favor of Chrysler
Credit Corporation.
*10.4.19 Commercial Loan Agreement, dated December 5, 1994, between Landers Oldsmobile-GMC, Inc. and
The Benton State Bank.
*10.4.20 Commercial Security Agreement, dated December 5, 1994, between Landers Oldsmobile-GMC, Inc.
and The Benton State Bank.
*10.4.21 Agreement, dated July 31, 1995, between the Company and General Motors Corporation,
Oldsmobile Division.
*10.5.1 Stock Purchase Agreement, dated as of November 17, 1995, among the Company, UAG Atlanta,
Inc., Atlanta Toyota, Inc. and Carl H. Westcott.
*10.5.2 Promissory Note of UAG Atlanta, Inc., dated January 16, 1996, in favor of Carl H. Westcott.
*10.5.3 Guaranty of the Company, dated as of January 16, 1996, in favor of Carl Westcott.
*10.5.4 Promissory Note of Atlanta Toyota, Inc., dated January 16, 1996, in favor of First Extended
Service Corporation.
*10.5.5 Guaranty of the Company, dated as of January 16, 1996, in favor of Carl Westcott.
*10.5.6 Lease Agreement, dated as of January 3, 1996, between Carl Westcott and Atlanta Toyota, Inc.
*10.5.7 Lease Guaranty of the Company, dated as of January 16, 1996, in favor of Carl Westcott.
*10.5.8 Toyota Dealer Agreement, dated January 16, 1996, between Southeast Toyota Motor Distributors,
Inc. and Atlanta Toyota, Inc. (substantially similar to Exhibit 10.2.6.1).
*10.5.9 Wholesale Floor Plan Security Agreement, dated May 24, 1996, between World Omni Financial
Corp. and Atlanta Toyota, Inc.
*10.5.10 Continuing Guaranty of the Company in favor of World Omni Financial Corp. and certain
affiliates.
*10.5.11 Inventory Financing Payment Agreement, dated May 24, 1996, among Atlanta Toyota, Inc.,
Fidelity Warranty Services, Inc. and World Omni Financial Corp.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------------ ---------------------------------------------------------------------------------------------
*10.5.12 Shareholders' Agreement, dated as of July 31, 1996, among the Company, UAG Atlanta, Inc.,
Atlanta Toyota and John Smith.
<C> <S> <C>
*10.5.13 Employment Agreement, dated as of January 16, 1996, among the Company, UAG Atlanta, Inc. and
John Smith.
*10.6.1 Stock Purchase Agreement, dated as of March 1, 1996, among the Company, UAG Atlanta II, Inc.,
Steve Rayman Nissan, Inc., Steven L. Rayman and Richard W. Keffer, Jr.
*10.6.2 Employment Agreement, dated as of May 1, 1996, among the Company, UAG Atlanta II, Inc., Steve
Rayman Nissan, Inc. and Bruce G. Dunker.
*10.6.3 Lease Agreement, dated as of May 1, 1996, among Steven L. Rayman, Richard W. Keffer, Jr. and
Steve Rayman Nissan, Inc.
*10.6.4 Nissan Dealer Term Sales and Service Agreement, between the Nissan Division of Nissan Motor
Corporation in U.S.A. and United Nissan, Inc. (substantially similar to Exhibit 10.2.9.1).
*10.6.5 Wholesale Floor Plan Security Agreement, dated April 29, 1996, between World Omni Financial
Corp. and United Nissan, Inc. (substantially similar to Exhibit 10.5.9).
*10.6.6 Continuing Guaranty of the Company, dated April 29, 1996, in favor of World Omni Financial
Corp. and certain affiliates (substantially similar to Exhibit 10.5.10).
*10.7.1 Stock Purchase Agreement, dated as of June 7, 1996, among the Company, UAG Atlanta III, Inc.,
Hickman Nissan, Inc., Lynda Jane Hickman and Lynda Jane Hickman as Executrix under the will
of James Franklin Hickman, Jr., deceased.
*10.7.2 Nissan Dealer Term Sales and Service Agreement, between the Nissan Division of Nissan Motor
Corporation in U.S.A. and Peachtree Nissan, Inc. (substantially similar to Exhibit 10.2.9.1).
*10.7.3 Automotive Wholesale Financing and Security Agreement, dated July 12, 1996, between Nissan
Motor Acceptance Corporation and Peachtree Nissan, Inc.
*10.7.4 Guaranty of the Company and UAG Atlanta III, Inc., dated July 12, 1996, in favor of Nissan
Motor Acceptance Corporation.
*10.7.5 Promissory Note of UAG Atlanta III, Inc., dated July 12, 1996, in favor of Lynda Jane
Hickman, as Executrix under the will of James Franklin Hickman, Jr.
*10.7.6 Guaranty of Note of Hickman Nissan, Inc., dated July 12, 1996, in favor of Lynda Jane
Hickman, as Executrix under the will of James Franklin Hickman, Jr.
*10.7.7 Guaranty of Note of the Company, dated July 12, 1996, in favor of Lynda Jane Hickman, as
Executrix under the will of James Franklin Hickman, Jr.
*10.7.8 Lease Agreement, dated July 12, 1996, between Lynda Jane Hickman, as Executrix under the will
of James Franklin Hickman, Jr., and Hickman Nissan, Inc.
*10.7.9 Lease Agreement, dated July 12, 1996, between Argonne Enterprises, Inc. and Hickman Nissan,
Inc.
*10.7.10 Guaranty of Lease of the Company, dated July 12, 1996, in favor of Lynda Jane Hickman, as
Executrix under the will of James Franklin Hickman, Jr.
*10.7.11 Guaranty of Lease of the Company, dated July 12, 1996, in favor of Argonne Enterprises, Inc.
*10.8.1 Stock Purchase Agreement, dated as of June 6, 1996, among the Company, UAG West, Inc.,
Scottsdale Jaguar, LTD., SA Automotive, LTD., SL Automotive, LTD., SPA Automotive, LTD., LRP,
LTD., Sun BMW, LTD., Scottsdale Management Group, LTD., 6725 Dealership, LTD., Steven
Knappenberger Revocable Trust Dated April 15, 1983, as amended, Brochick 6725 Trust dated
December 29, 1992, Beskind 6725 Trust dated December 29, 1992, Steven Knappenberger, Jay P.
Beskind December 29, 1992, Knappenberger 6725 Trust dated and George W. Brochick, as amended
on October 21, 1996 by Amendment No. 1, Amendment No. 2 and Amendment No. 3.
*10.8.2 Purchase and Sale Agreement, 6905 E. McDowell Road, dated June 6, 1996, among Steven
Knappenberger, as Trustee of the Steven Knappenberger Revocable Trust II, Bruce
Knappenberger, as Trustee of the Bruce Knappenberger Trust and UAG West, Inc.
*10.8.3 Form of Employment Agreement between the Company, UAG West, Inc. and Steven Knappenberger.
*10.8.4 Form of Broker's Agreement between UAG West, Inc. and KBB, Inc.
*10.8.5.1 Form of Audi Dealer Agreement (standard provisions are in Exhibit 10.8.5.2 hereto).
*10.8.5.2 Audi Standard Provisions.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
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*10.8.6.1 Form of Acura Automobile Dealer Sales and Service Agreement (standard provisions are in
Exhibit 10.8.6.2 hereto).
<C> <S> <C>
*10.8.6.2 Acura Standard Provisions.
*10.8.7.1 Form of BMW of North America Dealer Agreement (substantially similar to Exhibit 10.2.4.1).
*10.8.8.1 Form of Porsche Sales and Service Agreement.
10.8.8.2 Form of Addendum to Porsche Sales and Service Agreement.
10.8.9.1 Form of Land Rover North America, Inc. Dealer Agreement.
10.8.9.2 Land Rover Standard Provisions.
*10.8.10 Sublease, dated June 7, 1988, between Max of Switzerland and Scottsdale Porsche & Audi, Ltd.
*10.8.11 Lease, dated October 1990, between Lisa B. Zelinsky and R. J. Morgan Corporation of America
and Scottsdale Hyundai, Ltd.
*10.8.12 Sublease, dated July 1, 1995, between Camelback Automotive, Inc. and LRP Ltd.
*10.8.13 Lease, dated February 27, 1995, between Lee S. Maas and Sun BMW Ltd.
*10.8.14 Form of Shareholders' Agreement among UAG West, Inc., SK Motors, Ltd., and the Knappenberger
Revocable Trust.
*10.8.15 Form of Management Agreement among the Company, UAG West, Inc. and Scottsdale Jaguar, Ltd.
*10.8.16 Form of Lease Agreement between 6725 Agent and Scottsdale Jaguar, Ltd.
10.8.17 Form of Indemnification Agreement among the Company, UAG West, Inc., Scottsdale Jaguar, Ltd.,
Steven Knappenberger, and certain other individuals and trusts.
*10.8.18 Form of Real Estate Loan and Security Agreement, made by SA Automotive, Ltd. for the benefit
of Chrysler Financial Corporation.
*10.8.19 Form of Security Agreement and Master Credit Agreement of Chrysler Credit Corporation
(substantially similar to Exhibit 10.4.16).
*10.8.20 Form of Continuing Guaranty of each of the Company and UAG West, Inc. in favor of Chrysler
Credit Corporation (substantially similar to Exhibit 10.4.18).
*10.9.1 Stock Purchase Agreement, dated August 5, 1996, among the Company, UAG Atlanta IV, Inc.,
Charles Evans BMW, Inc. and Charles F. Evans.
*10.9.2 Stock Purchase Agreement, dated August 5, 1996, among the Company, UAG Atlanta IV, Inc.,
Charles Evans Nissan, Inc. and Charles F. Evans.
*10.9.3 Form of Dealer Agreement between BMW North America, Inc. and Charles Evans BMW Inc.
(substantially similar to Exhibit 10.2.4.1).
*10.9.4 Form of Nissan Dealer Term Sales and Service Agreement between Nissan Motor Corporation in
U.S.A. and Charles Evans Nissan, Inc. (substantially similar to Exhibit 10.2.9.1).
*10.9.5 Form of Lease Agreement between Charles F. Evans and Charles Evans
BMW, Inc.
*10.9.6 Form of Lease Guaranty of the Company in favor of Charles F. Evans.
*10.9.7 Form of Lease Agreement between Charles F. Evans and Charles Evans Nissan, Inc.
10.9.8 Form of Lease Guaranty of the Company in favor of Charles F. Evans.
*10.9.9 Form of Purchase and Sale Agreement for Charles Evans BMW Property between Charles F. Evans
and the Company.
*10.9.10 Form of Purchase and Sale Agreement for Charles Evans Nissan Property between Charles F.
Evans and the Company.
*10.9.11 Form of Inventory Financing and Security Agreement between BMW Financial Services NA, Inc.
and UAG Atlanta IV Motors, Inc.
*10.9.12 Form of Guaranty of the Company in favor of BMW Financial Services NA, Inc.
*10.9.13 Form of Inventory Financing and Security Agreement between BMW Financial Services NA, Inc.
and Conyers Nissan, Inc. (substantially similar to Exhibit 10.9.11).
*10.9.14 Form of Guaranty of the Company in favor of BMW Financial Services NA, Inc. (substantially
similar to Exhibit 10.9.12).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------------ ---------------------------------------------------------------------------------------------
*10.10.1 Stock Purchase Agreement, dated September 5, 1996, among the Company, UAG Tennessee, Inc.,
Standefer Motor Sales, Inc., Charles A. Standefer and Charles A. Standefer and Karen S.
Nicely, trustees under the Irrevocable Trust Agreement of Charles B. Standefer for the
primary benefit of children, dated December 21, 1992.
<C> <S> <C>
10.10.2 Form of Nissan Dealer Term Sales and Service Agreement between Nissan Motor Corporation in
U.S.A. and Conyers Nissan, Inc. (standard provisions are in Exhibit 10.2.9.2).
*10.10.3 Form of Lease Agreement between Standefer Investment Company and Standefer Motor Sales, Inc.
10.10.4 Form of Lease Guaranty of the Company in favor of Standefer Investment Company.
*10.10.5 Form of Security Agreement and Master Credit Agreement between Chrysler Credit Corporation
and Standefer Motor Sales, Inc. (substantially similar to Exhibit 10.4.16).
*10.10.6 Form of Continuing Guaranty of each of the Company and UAG Tennessee, Inc. in favor of
Chrysler Credit Corporation (substantially similar to Exhibit 10.4.18).
*11.1 Statement re computation of per share earnings.
*21.1 List of subsidiaries of the Company.
*23.1.1 Consent of Coopers & Lybrand L.L.P.
*23.1.2 Consent of Coopers & Lybrand L.L.P.
*23.1.3 Consent of Coopers & Lybrand L.L.P.
*23.1.4 Consent of Coopers & Lybrand L.L.P.
*23.1.5 Consent of Coopers & Lybrand L.L.P.
*23.1.6 Consent of Coopers & Lybrand L.L.P.
*23.1.7 Consent of Coopers & Lybrand L.L.P.
*23.1.8 Consent of Coopers & Lybrand L.L.P.
*23.2 Consent of Willkie Farr & Gallagher (included in Exhibit 5.1).
*24.1 Powers of Attorney.
*27.1 Financial Data Schedules.
</TABLE>
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* Previously filed.
<PAGE>
Exhibit 10.2.23
LOAN AND SECURITY AGREEMENT
THE PARTIES
This Loan and Security Agreement (the "Agreement") is made effective the 1st day
of October, 1992, by and between General Motors Acceptance Corporation, a New
York corporation with a branch operations offices located at (i) 325 Columbia
Turnpike, Florham Park, New Jersey 07932; (ii) 2700 Westchester Avenue,
Purchase, New York 10577-2535; (iii) 90 Woodbridge Center Drive, Woodbridge, New
Jersey 07095; and (iv) 555 Long Wharf Drive, New Haven, Connecticut 06511
("GMAC") and Hudson Motors Partnership t/a Hudson Toyota, of 585 Route 440,
Jersey City, New Jersey 07304, a New Jersey general partnership with its
principal administrative office located at Attention: Chief Financial Officer,
EMCO Group, 947 Communipaw Avenue, Jersey City, New Jersey 07306 (the "Dealer").
II. THE RECITALS
A. WHEREAS, GMAC is in the business of providing various credit accommodations
to motor vehicle dealers to facilitate their purchase, sale, lease, rental,
and servicing of motor vehicles; and
B. WHEREAS, Dealer is a newly formed entity created by its partners for the
purpose of acquiring, selling, leasing, renting, and servicing new and used
motor vehicles; and
C. WHEREAS, Dealer is an affiliate of approximately twenty-four motor vehicle
dealerships having substantially similar, financial, ownership, and
management interests as Dealer. Dealer and each such affiliate existing on
the date hereof is listed on the attached Schedule "A" which schedule
contains the name, local business address, and the underlying ownership
interest of the Dealer and each such affiliate. (With the exception of the
Dealer, all such affiliates are hereinafter collectively referred to as
"Affiliates" and each individually referred to as "Affiliate"); and
D. WHEREAS, the Dealer has requested GMAC to provide various credit
accommodations to finance its purchase, sale, lease, and rental of vehicles
(the "Dealership Financing"); and
E. WHEREAS, each of the Affiliates has requested GMAC to provide various
credit accommodations to finance its purchase, sale, lease, and rental of
vehicles (the "Affiliate Financing"); and
<PAGE>
F. WHEREAS, GMAC is willing to provide Dealership Financing, but only in
accordance with the terms and conditions of this Agreement and may, from
time to time, provide Affiliate Financing.
III. THE AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual promises herein
contained, the sufficiency of which is hereby acknowledged, Dealer and GMAC
hereby agree as follows:
1. FINANCING ACCOMMODATIONS
(a) ESTABLISHMENT OF A WHOLESALE LINE OF CREDIT. GMAC hereby establishes
a wholesale floorplan line of credit for Dealer for the exclusive
purpose of enabling Dealer to acquire new and used motor vehicles from
manufacturers, distributors, customers, dealers, and other sellers
thereof (the "Wholesale Financing"). The Wholesale Financing shall be
subject to this Agreement and the terms and conditions provided in the
agreements and instruments set forth in subparagraph 1(g) below.
(b) AMOUNT OF WHOLESALE FINANCING. The total maximum number of vehicles
for which GMAC will provide Wholesale Financing is 560, including 500
for new motor vehicles and 60 for used motor vehicles, although the
number may increase or decrease at the discretion of GMAC.
(c) OTHER FINANCING. From time to time, GMAC may also provide other
categories of vehicle inventory financing for Dealer, including,
without limitation, financing under GMAC's so-called Delayed Payment
Privilege, Shop Rental Plan, Rental Plan, Wholesale Demonstration, and
the like (the "Other Financing").
(d) RETAIL FINANCING. GMAC may also provide retail finance and lease
accommodations to Dealer or customers of the Dealer in accordance with
its customary practices (the "Retail Financing").
(e) DEALER OBLIGATIONS. The amounts and obligations now or hereafter
owing to GMAC by Dealer for Wholesale Financing, Other Financing,
Retail Financing, and any and all other indebtedness, obligations, or
liabilities of Dealer, whether direct or indirect, liquidated or
contingent (including obligations of Dealer for any other loans or for
guaranties of Affiliates or Affiliate Financing, or otherwise) shall
be referred to herein as "Dealer Obligations." Dealer hereby promises
to pay to GMAC all Dealer Obligations promptly on demand, or otherwise
in accordance with the express
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<PAGE>
terms and conditions of this Agreement and the Documentation.
(f) ABSOLUTE DISCRETION OF GMAC. The amount, terms, conditions, interest
rate, repayment terms, advance rate, existence, documentation, and
administration of the Wholesale Financing shall, at all times, be
subject to change, suspension, and cancellation at the sole, absolute
discretion of GMAC, notwithstanding anything herein or otherwise to
the contrary.
(g) DOCUMENTATION OF DEALER OBLIGATIONS. Dealer shall duly execute and
deliver to GMAC at least one original version of each of the following
documents, instruments, or agreements customarily provided by GMAC to
evidence the parties' intentions as to all Dealer Obligations, copies
of which are attached hereto as Exhibit "A" (the "Documentation").
Wholesale Financing GMAC Form No.
------------------- -------------
(i) Wholesale Security Agreement 178
(ii) UCC-1 Financing Statement
(iii) Signature Card 524
(iv) Amendment to Wholesale
Security Agreement
(v) Non-GM Manufacturing Letter
(vi) Addendum to Financial
Statement 505 C
(vii) Loan Agreement 176 GLA
(viii) Promissory Note 176 GPN
(ix) Agreement Amending the
Wholesale Security Agreement 570
(x) Factory Authorization Letter
(xi) Wholesale Demonstration Plan 135
Other Financing GMAC Form No.
--------------- -------------
(xii) GMAC Shop Rental Plan
Agreement 269 R
(xiii) GMAC Rental Plan Master
Lease Agreement 370 DR
(xiv) Certificate of Resale for
Rental Plan
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<PAGE>
Retail Financing GMAC Form No.
---------------- -------------
(xv) GMAC Retail Plan RP-1
(xvi) Non Recourse Confirmation
Letter
(xvii) Mechanical Service Agreement
Letter
(xviii) Credit Life and A&H Agreement
Letter
(xix) Participation Agreement
for Special Retail
Finance Rate Incentive
Program
(xx) National Quality Finance
Plan/Participating Discount
Confirmation Letter
(xxi) GMAC Lease Plan Dealer
Agreement 682 DLP
(xxii) Power of Attorney
(xxiii) Dealer Credit Accounts
Adjustment Letter
(xxiv) GMAC MAPS Dealer Agreement
(xxv) SmartBuy Dealer Agreement
(xxvi) Landlord's Waiver of
Rights to Distrain
(xxvii) Agency Agreement with
MIC Life 5215
(xxviii) MRP Membership MRP 501
(xxix) Value Guard Participation
Agreement MRP 309
(xxx) Signature Card-DLP 686 DLP
Dealer shall duly execute and deliver to GMAC such other documents,
instruments, or agreements and any amendments thereto, as GMAC
customarily require from time to time. The existence of Agreement,
representations, covenants, terms of default, and the like is in no
way intended to alter the demand nature of all Dealer Obligations
which in every instance are subject to change, suspension and
cancellation at the sole, absolute discretion of GMAC.
(h) GMAC'S ACCOUNTS. GMAC shall maintain on its books in accordance with
its usual practice an account or accounts with respect to the Dealer
Obligations, which account or accounts shall include, without
limitation, (i) the outstanding principal amounts of the Wholesale
Financing, Other Financing, and Retail Financing, including the amount
of principal and interest due, (ii) all other fees, costs, expenses,
losses, and indemnities due from Dealer under this Agreement, and all
amounts received by GMAC with respect to the foregoing. Provided
that regular statements of the account information is provided by GMAC
to Dealer in
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<PAGE>
the ordinary course of business, for purposes of any ?? action or
proceeding arising out of or in connection with this Agreement and for
all other purposes, the entries made in such account or accounts
maintained by GMAC pursuant to this paragraph shall constitute, in the
absence of manifest error, conclusive evidence as to the existence and
amounts of the foregoing, however, failure to maintain its books with
respect to such account or accounts shall not affect Dealer's
obligations to GMAC.
2. GRANT OF SECURITY INTEREST AND ASSIGNMENT. To secure the payment and
performance of any and all Dealer Obligations, and subject to liens
permitted by this Agreement. Dealer hereby grants to GMAC a first and
perfected security interest in and a collateral assignment of any and all
of the following described property in which Dealer now or hereafter has an
interest, wherever located, and any and all proceeds thereof, in form (the
"Collateral"):
(a) inventory of all types and kinds including new and used motor
vehicles, chassis, trailers, cars and trucks, service parts and
accessories.
(b) equipment of all types and kinds including fixtures, tools, signs,
furniture, electronic and computer devices, software programs,
analyzers, and goods.
(c) all types and kinds of general intangibles, contract rights,
receivable, rebates, refunds, open accounts, reserve accounts, chattel
paper, franchise rights, cash, instruments, goodwill, accounts
documents, and contracts.
Upon demand by GMAC, Dealer shall segregate and account for the
Collateral and the proceeds thereof.
3. DEFAULT AND CROSS-DEFAULT. The occurrence of any default in or material
breach of any term or condition (including any misrepresentation of
material facts) of (a) this Agreement; or (b) the Documentation; or (c) any
other agreement between Dealer and GMAC now existing or hereafter arising;
or (d) any agreement or documentation pertaining to Affiliate Financing
(including any guaranty thereof) now existing or hereafter arising, shall
constitute an immediate default of this Agreement, the Documentation, and
all such other agreements, irrespective of whether such occurrence is
caused by Dealer or any Affiliate.
4. REQUIRED GUARANTY OF DEALER OBLIGATIONS. All Dealer Obligations must
immediately and continuously be supported by the unconditional, continuing
guaranty of payment of each and every one of the following persons and
entities now or hereafter arising (the "Supporting Guaranties");
- 5 -
<PAGE>
(a) all Affiliates; and
(b) all general partners of the Affiliates (the "General Partners"; and
(c) all shareholders of any general partner of the Affiliates which
general partner is or becomes a corporate entity (the "Shareholders");
and
(d) all legal entities owned by any Shareholder (A) which is operated as a
motor vehicle dealership, or (B) which owns, leases, rents, or deals
in real estate of or pertaining to such motor vehicle dealership, the
Affiliate or the Dealer (the "Related Entities"); and
The Supporting Guaranties shall be on a form substantially similar to
the one attached to this Agreement as Exhibit "B". Unless waived by
GMAC (which it hereby does for individual Guarantors), the Supporting
Guaranties shall be secured with the grant to GMAC of a first
perfected security interest in and/or a collateral assignment of all
tangible and intangible, real and personal property of the issuer
thereof, in which the issuer now or hereafter has an interest,
excluding any partnership interest of a guarantor in any Dealer or
Affiliate (the "Additional Collateral").
5. CONDITIONS OF INITIAL FINANCING. The initial extension of credit
accommodations hereunder is subject to the following conditions precedent:
(a) GMAC shall have received a certified copy of all corporate and
partnership action taken by the Dealer, Affiliates, and issuers of all
Supporting Guaranties authorizing the execution, delivery, and
performance of this Agreement, the Documentation, and all other
documents, agreements, instruments, and obligations attendant thereto.
(b) GMAC shall have received an opinion of counsel to the Borrower, in
form and substance satisfactory to counsel to GMAC as to the matters
referred to in subparagraphs 7(a) and (b) and further to the effect
that this Agreement and the Documentation has been duly authorized,
executed and delivered and is a legal, valid, binding, and enforceable
agreement of the Dealer and other signatories thereto (excepting
GMAC).
(c) GMAC shall have received an opinion of counsel to the Borrower, in
form and substance satisfactory to counsel to GMAC as to the matters
referred to in subparagraphs 7(a) and (b) and further to the effect
that this Agreement and the Documentation has been duly
- 6 -
<PAGE>
authorized, executed, and delivered and is a legal, valid, binding,
and enforceable agreement of the Dealer and other signatories thereto
(excepting GMAC).
(d) GMAC shall have received each of the Supporting Guaranties required in
paragraph 4 of this Agreement.
(e) Dealer shall have duly executed and delivered to GMAC the
Documentation.
(f) Dealer shall certify, to the satisfaction of GMAC, its initial
capitalization of $1,769,000.00, consisting of as cash or its
equivalent and tangible personal property. This initial minimum
capitalization amount shall be maintained by Dealer at all times.
Neither vehicle inventory nor intangible assets shall be considered as
part of the initial capitalization.
(g) Dealer shall be duly and continuously approved (i) by the original
manufacturer or distributor to sell and service the brand of new motor
vehicles contemplated by the parties hereto; and (ii) by any pertinent
local, state, or federal government agency to purchase, sell, lease,
and service motor vehicles as a new and used dealer thereof.
(h) 21 International Holdings, Inc., a New York corporation and partial
owner of EMCO Motors Holdings, Inc. a Delaware Corporation, shall
confirm and recognize that GMAC is a third party beneficiary of a one
million dollar payment guaranty provided by it to certain of the
Related Entities pursuant to the lease of properties by Dealer or one
or more Affiliate.
(i) Execution by GMAC of the customary vehicle factory (i) drafting the
delivery instructions and (ii) repurchase agreement between GMAC and
the manufacturer or distributor of the new motor vehicles which Dealer
intends to acquire.
6. ADDITIONAL COVENANTS. Until full and faithful payment and performance of
all Dealer Obligations, Dealer agrees that, unless GMAC shall otherwise
consent in writing:
(a) FINANCIAL REPORTS. Dealer will furnish GMAC:
(i) the first full calendar month after the date of this Agreement,
its financial statement which fairly and accurately reflects a
condition not adversely and materially changed from the PRO FORMA
statement last provided to GMAC by Dealer prior to the date of
this Agreement.
- 7 -
<PAGE>
(ii) within ninety days after the end of each fiscal year of the
Dealer, copies of balance sheets, statements of income and
retained earnings, and financial statements reviewed by
independent certified public accountants selected by Dealer and
satisfactory to GMAC.
(iii) within thirty days of each period beginning on December 31, 1992,
and every six months thereafter, at least every six months
beginning after the date of this Agreement, detailed balance,
operating, and financial statements of the Dealer.
(iv) from time to time, such further information regarding the
business affairs and financial condition of the Dealer as GMAC
may reasonably request.
(v) within thirty days after the end of each calendar year, current
financial statements of all issuers of Supporting Guaranties.
All financial statements delivered hereunder shall be prepared on the
basis of generally accepted accounting principles and practices
applied on a basis consistent with those used in the preparation of
the audited financial statements of Dealer.
(b/c) WORKING CAPITAL. Dealer will at all times maintain minimum net
working capital of current assets in excess of consolidated current
liabilities of the Dealer of $2,075,000.00, which amount shall
increase or decrease only in conformity with the minimum net working
capital standards required from time to time by the Dealer's motor
vehicles franchisor.
(d) LIENS, ETC. Dealer will not create, incur, or suffer any lien,
mortgage, pledge, assignment, or other encumbrance on, or security
interest in, any of its properties, assets, or receivables, now owned
or hereafter acquired, securing Dealer Obligations (all such security
being herein called "liens"), except:
(i) liens to GMAC;
(ii) materialmen's, suppliers', tax, and other like liens arising in
the ordinary course of business and securing obligations that are
not overdue or are being contested in good faith by appropriate
proceedings.
(iii) purchase money security interests in [I] property described on
the attached Exhibit "C" or [II]
- 8 -
<PAGE>
property hereafter acquired by Dealer, provided that absolutely
no interest shall be granted or allowed to any other person for
any motor vehicles.
(e) TAXES, ETC. All taxes, levies, and assessments of whatever
description will be paid before interest or penalties accrue thereon,
unless the same is being contested in good faith by appropriate
proceedings.
(f) Dividends. Dealer will not, after the date hereof, authorize or allow
any withdrawal, loans, disbursements, or distributions of any assets
or capital of Dealer, or make any payment on account of the purchase,
acquisition, redemption, or other retirement of any partnership
interest, without the prior written consent of GMAC; provided that
such consent is unnecessary if the aforementioned financial covenants
are not breached by such distribution or if necessary to ensure
compliance with subparagraph (e) above.
(g) REORGANIZATIONS, ACQUISITIONS, CHANGE OF NAME. Dealer will not, (i)
merge or consolidate with or into any partnership, trust, or
corporation with the exception of EMCO Motor Holdings, Inc. or any
affiliate, general partner, or shareholder of Dealer; (ii) sell,
lease, transfer, or otherwise dispose of all or any substantial part
of its assets (except in the ordinary course of business), whether now
owned or hereafter acquired; or (iii) change its name, except with the
prior written authorization of GMAC, which consent shall not be
unreasonably withheld.
(h) MANAGEMENT; Ownership. Except in the case of unforeseen death,
disability, or other similar emergency, Dealer will not make any
significant change in its structure or management without a minimum
thirty day's prior written notification to GMAC. Dealer will not
permit a transfer of its capital or other ownership interest to others
than the present holders thereof.
(i) ADMINISTRATIVE RELEASE PERIOD. The administrative release period
within which Dealer shall promptly and faithfully remit the principal
amount financed for Wholesale Financing and Manufacturer Financing
shall in no event exceed three business days for the time a vehicle is
sold or leased by Dealer.
(j) RESTRICTION ON OTHER Indebtedness. Dealer shall not incur any
indebtedness for borrowed money or extensions of credit except:
(i) the Dealer Obligations;
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<PAGE>
(ii) indebtedness incurred by Dealer in the ordinary course of
business for necessary merchandise, services, equipment,
materials, and supplies, all of which shall be paid not more than
ninety days from the date of invoice and none of which shall be
past due more than forty-five days;
(iii) any other indebtedness the repayment of which is expressly
subordinated, in writing, to the repayment to GMAC of all Dealer
Obligations;
(iv) indebtedness for purchase money financing permitted by
subparagraph 6(d)(iii).
(k) POSSESSION OF TITLES. Dealer shall permit GMAC upon demand to hold
all invoices, manufacturer certificates of origin, and titles for its
motor vehicles.
(l) APPLICATION TO FUTURE AFFILIATES. Any motor vehicle dealership entity
which comes into existence, is not listed on the attached Schedule and
has substantially similar financial, ownership, and management
interest as the Affiliates shall, upon execution of a Loan and
Security Agreement substantially to this Agreement, be deemed to be an
"Affiliate" within the meaning of this Agreement for all intents and
purposes.
7. REPRESENTATIONS. Dealer hereby represents to GMAC that:
(a) EXISTENCE AND POWER. Dealer is general partnership duly formed,
validly existing, and in good standing under the laws of the State of
New Jersey and is duly qualified to transact business or own real
property in each state or other jurisdiction in which its principal
real properties are located or in which it conducts any important or
material part of its business; and Dealer has power to make this
Agreement and to borrow hereunder.
(b) AUTHORITY. The making and performance by Dealer of this Agreement
Documentation and Deal`er Obligations have been duly authorized by all
necessary action and will not violate any provision of law or of its
charter, or result in the breach of or constitute a default or require
any consent under, or result in the creation of any lien, charge, or
encumbrance upon any property or assets of the Borrower pursuant to
any indenture or other agreement or instrument to which the Dealer is
a party or by which Dealer or its property may be bound or affected,
other than as specifically provided herein.
(c) FINANCIAL Condition. The balance sheets and statements of income and
retained earnings of Dealer and
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<PAGE>
Affiliates, heretofore furnished to GMAC, are complete and correct and
fairly represent the financial condition of Dealer and Affiliate as at
the dates of said financial statements and the results of their
operations for the periods ending on said dates. Neither Dealer nor
the Affiliates has any material contingent obligations, liabilities
for taxes, long-term leases, or unusual forward or long-term
commitments not disclosed by, or reserved against in, said balance
sheets or the notes thereto; and at the present time, there are no
material realized or anticipated losses from any unfavorable
commitments of Dealer or Affiliates. Said financial statements were
prepared in accordance with generally accepted principles and
practices of accounting consistently maintained throughout the periods
involved. Since the date of the latest of such statements, there has
been no material adverse change in the financial condition from that
set forth in said balance sheets as at that date.
(d) LITIGATION. There are no suits or proceedings pending, or to the
knowledge of the Dealer threatened, against or affecting Dealer that,
if adversely determined, would have a material adverse effect on the
financial condition or business of Dealer and its subsidiaries; and
there are no proceedings by or before any governmental commission,
board, bureau, or other administrative agency pending or to the best
of Dealer's knowledge and belief, threatened against Dealer or
Affiliates, which is adversely determined, would have a material
adverse effect on the financial condition or business of Dealer.
(e) NO OTHER FINANCING STATEMENTS. No UCC-1 or other financing statements
covering the Collateral described in paragraph 2 have been executed or
are on file in any public office except the financing statements of
GMAC and any other secured party permitted under subparagraph
6(d)(iii).
8. CONSENT AND WAIVER. Dealer recognizes that GMAC has ongoing business
relationships with others including certain Shareholders and Related
Entities. GMAC's dealings with these others may require it to act in
providing and administering credit different than its dealings with Dealers
or Affiliates. Dealer hereby acknowledges, consents to, and waives any
claim or defense it may have with respect to such differences.
9. NOTICES. All notices, requests, and demands shall be in writing and be
given to or made upon the respective parties at the addresses set forth in
Section I of this Agreement, or to such other address as either party shall
designate for
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<PAGE>
itself in writing to the other party. Notice shall be deemed given when
received by the addressee and may include hand delivery, overnight courier,
certified mail, or electronic written transmission by public or private
means.
10. ADOPTION AND RATIFICATION. Any and all acts, disclosures, notices,
executions, and deliveries which may have been made by Dealer to or in
favor of GMAC prior to (a) the execution of this Agreement or (b) the legal
formation of Dealer's existence as a general partnership, is hereby
ratified and adopted as the legal, valid, and binding act of the Dealer as
though authorized and empowered as of such act, etc. This ratification and
adoption includes, without limitation, the execution and delivery of UCC-1
financing statements and the delivery of financial information concerning
the Dealer.
11. RIGHTS AND REMEDIES OF GMAC UPON DEFAULT. Upon the occurrence of default
as set forth in Paragraph 3 herein or if any substantial portion of
Collateral is in imminent danger of misuse, loss, seizure or confiscation,
GMAC may take immediate possession of the Collateral without demand or
further notice and without legal process. In furtherance thereof, Dealer
shall, if GMAC so requests, assemble Collateral and make it available to
GMAC at a reasonable, convenient place designated by GMAC. GMAC shall have
the right, and Dealer hereby authorizes and empowers GMAC, to enter upon
the premises wherever Collateral may be and remove same. In addition,
after default, GMAC shall have the right to exercise one or more of the
following remedies:
(a) institute proceedings to collect all or a portion of the Dealer
Obligation and to recover a judgment for the same and to collect upon
such judgment out of any property of the Dealer wherever situated;
(b) to offset and apply any monies, credits or other proceeds of property
of Dealer that has or may come into possession or under the control of
GMAC against any amount owing by Dealer to GMAC;
(c) with respect to accounts, contract rights, chattel paper, tax refund
and general intangibles constituting Collateral herein, GMAC
(i) may settle, adjust and compromise all present and future claims
arising thereunder or in connection therewith,
(ii) may sell, assign, pledge or make any other agreement with respect
thereto or the proceeds thereof;
(iii) may notify all such account, contract right, etc., debtors of
GMAC's interest therein and
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<PAGE>
require direct payment to GMAC of such obligations;
(iv) may receive, sign, endorse, and deliver in its name or the name
of the Dealer any and all notes, instruments, documents, titles,
negotiable instruments and the like necessary and appropriate to
effect the collection of such intangibles, and Dealer hereby
waives notice of presentment, protest and non-payment of any
instrument so endorsed.
(v) is hereby constituted and appointed by Dealer as Dealer's
attorney-in-fact with power to accept and to receipt and endorse
Dealer's name upon any notes, acceptances, checks, drafts, money
orders or other evidences of payment or Collateral that may come
into GMAC's possession; to notify the Post Office authorities to
change the address for delivery of mail addressed to Dealer to
such address as GMAC may designate; to do all other acts and
things necessary to carry out this Agreement. Except for gross
negligence and willful misconduct, all acts of said attorney or
designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or
commission, nor for any error of judgment or mistake of fact or
law made in good faith; this power being coupled with an interest
is irrevocable while any of the Dealer Obligations remains
unpaid.
(d) sell or lease the Collateral, or any portion thereof, after five days'
written notice at public or private sale for the account of the
Dealer.
Dealer agrees that the sale by GMAC of any new or unused property repossessed by
GMAC to the original seller thereof, or to any person designated by such seller
at the invoice cost thereof to Dealer less any credits granted to Dealer with
respect thereto and reasonable costs of transportation and reconditioning, shall
be deemed to be a commercially reasonable means of disposing of the same.
Dealer further agrees that if GMAC shall solicit bids from three or more other
dealers in the type of property repossessed by GMAC hereunder, any sale by GMAC
of such property in bulk or in parcels to the bidder submitting the highest cash
bid therefor also shall be deemed to be a commercially reasonable means of
disposing of the same. Notwithstanding the foregoing, it is expressly
understood that such means of disposal shall not be exclusive, and that GMAC
shall have the right to dispose of any property repossessed hereunder by any
commercially reasonable means. GMAC's remedies hereunder are cumulative and may
be enforced successively or concurrently. Dealer shall pay all
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<PAGE>
expenses and reimburse GMAC for any expenditures, including reasonable attorney
fees and legal expenses, in connection with GMAC's exercise of any of its rights
and remedies under this Agreement. In addition to the rights specified herein,
all the rights and remedies afforded GMAC by applicable law shall apply.
Nothing herein contained shall be construed to constitute Dealer as agent
of GMAC for any purpose whatsoever, and GMAC shall not be responsible nor
liable for any shortage, discrepancy, damage, loss or destruction of any
part of the Collateral wherever the same may be located and regardless of
the cause thereof, except to the extent the same results from GMAC's own
gross negligence or willful misconduct. GMAC shall not, under any
circumstances or in any event whatsoever, have any liability for any error
or omission or delay of any kind occurring in the settlement, collection or
payment of any of the Collateral or any instrument received in payment
thereof or for any damage resulting therefrom, except to the extent the
same results from GMAC's own gross negligence or willful misconduct. GMAC
does not by anything herein or in any assignment or otherwise, assume any
of Dealer's obligations under any contract or agreement assigned to GMAC,
and GMAC shall not be responsible in any way for the performance by Dealer
of any of the terms and conditions thereof.
12. TERMINATION. Dealer or GMAC may elect to terminate this Agreement at any
time, in its sole and absolute discretion, by providing the other party
hereto with written notice of its intent to terminate this Agreement no
less than ninety days prior to the effective date of the election to
terminate. In addition, GMAC may elect to immediately terminate this
Agreement upon (a) the termination of any Supporting Guaranty or (b) the
occurrence of any Default. All debts, obligations, and remedies extant
upon any election to terminate this Agreement by either party shall
continue in full force and effect until fully discharged, subject to the
terms and conditions of this Agreement.
13. RIGHTS AND REMEDIES NOT WAIVED. No course of dealing between the Dealer
and GMAC or any failure or delay on the part of GMAC in exercising any
rights or remedies hereunder shall operate as a waiver of any rights or
remedies of GMAC and no single or partial exercise of any rights or
remedies hereunder shall operate as a waiver or preclude the exercise of
any other rights or remedies hereunder.
14. COMPLETE AGREEMENT. Except as otherwise provided or referred to herein
(e.g., the Documentation), there are no other agreements or understandings,
either oral or in writing, between the parties affecting this Agreement or
relating to any of the subject matters covered by this Agreement. No
agreement between GMAC and Dealer which relates to matters covered herein,
and no change in,
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<PAGE>
addition to (except the filling in of blank lines), or erasure of any
printed portion of this Agreement will be binding unless it is approved in
a written agreement executed by a duly authorized representative of each
party.
15. BINDING EFFECT. This Agreement shall be binding upon the parties'
successors and assigns provided, however, that Dealer shall have no right
of assignment absent prior written consent of GMAC.
16. SEVERABILITY. Any provision hereof prohibited by law shall be ineffective
to the extent of such prohibitions without invalidating the remaining
provisions hereof.
17. GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the laws of the State of New Jersey.
18. CAPTIONS. The captions of the various sections and paragraphs of this
Agreement have been inserted only for the purposes of convenience; such
captions are not a part of this Agreement and shall not be deemed in any
manner to modify, explain, enlarge or restrict any of the provisions of
this Agreement.
19. Counterparts. This Agreement may be executed by the parties hereto
individually or in any combination, in one or more counterparts, each of
which shall be an original and all of which shall together constitute one
and the same agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
by its duly authorized representatives this 1st day of October, 1992.
GENERAL MOTORS ACCEPTANCE CORPORATION
("GMAC")
By: /s/ Paul A. Given
-----------------------------------------
Paul A. Given, Control Branch Manager
HUDSON MOTORS PARTNERSHIP T/A HUDSON
TOYOTA ("Dealer")
By: /s/ Ezra Mager
-----------------------------------------
Its Erza P. Mager CEO
-----------------------------------------
and
By: /s/ Samuel X. DiFeo
-----------------------------------------
Its Samuel X. DiFeo Exec. V.P.
-----------------------------------------
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<PAGE>
Page 1 of 3 Pages
SCHEDULE "A"
County Auto Group Partnership
t/a County Toyota
115 Route 59
Nyack, NY 10960
Rockland Motors Partnership
t/a Rockland Mitsubishi
73 North Highland Avenue
P.O. Box 724
Nyack, NY 10960
Somerset Motors Partnership
t/a DiFeo Lexus
P.O. Box 310
Bound Brook, NJ 08805
DiFeo Oldsmobile Partnership
t/a DiFeo Volkswagen of Bridgewater
Route 22 East
P.O. Box 310
Bound Brook, NJ 08805
Fair Motors Partnership
t/a Fair Mitsubishi
100 Federal Road
Danbury, CT 06813
Fair Chevrolet-Geo Partnership
100 Federal Road
Danbury, CT 06813
Fair Hyundai Partnership
t/a Fair Suzuki
102D Federal Road
Danbury, CT 06813
Fair Infiniti Partnership
100B Federal Road
Danbury, CT 06813
Fair Imports Partnership
t/a Fair Acura
100A Federal Road
Danbury, CT 06813
Danbury-Mt. Kisco Saturn Partnership
t/a Saturn of Danbury
102C Federal Road
Danbury, CT 06813
<PAGE>
Page 2 of 3 Pages
Fair Cadillac-Oldsmobile-Isuzu Partnership
102 Federal Road
Danbury, CT 06813
DiFeo Jeep-Eagle Partnership
315 Clendenny Avenue / Route 440
Jersey City, NJ 07304
DiFeo Autocenter Partnership
t/a DiFeo Mazda
Hudson Mall & Route 440
Jersey City, NJ 07304
DiFeo Subaru Partnership
315 Clendenny Avenue
Jersey City, NJ 07304
DiFeo Hyundai Partnership
Hudson Mall & Route 440
Jersey City, NJ 07304
DiFeo Buick-Pontiac-GMC Truck Partnership
919 Communipaw Avenue
Jersey City, NJ 07304
DiFeo BMW Partnership
301 County Road
Tenafly, NJ 07670
DiFeo Imports Partnership
t/a Jersy City Mitsubishi
947 Communipaw Avenue
Jersey City, NJ 07304
J & F Oldsmobile-Isuzu Partnership
315 Clendenny Avenue/Route 440
Jersey City, NJ 07304
Hudson Motors Partnership
t/a Hudson Toyota
585 Route 440
Jersey City, NJ 07304
DiFeo Volkswagen Partnership
599 Route 440
Jersey City, NJ 07304
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<PAGE>
Page 3 of 3 Pages
Danbury Auto Partnership
t/a Fair Honda
[TO BE FORMED]
102D Federal Road
Danbury, CT 06813
DiFeo Nissan Partnership
[TO BE FORMED]
977 Communipaw Avenue
Jersey City, NJ 07304
DiFeo Chevrolet-Geo Partnership
[TO BE FORMED]
315 Clendenny Avenue
Route 440
Jersey City, NJ 07304
J&S Ford Partnership
[TO BE FORMED]
599 Route 440
Jersey City, NJ 07304
North Jersey Manhattan Saturn Partnership
[TO BE FORMED]
943 Communipaw Avenue
Jersey City, NJ 07304
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<PAGE>
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
I. THE PARTIES
The First Amendment to Loan and Security Agreement (the "First Amendment") is
made effective the 7th day of April, 1993, by and between General Motors
Acceptance Corporation, a New York corporation with branch operations offices
located at (i) 325 Columbia Turnpike, Florham Park, New Jersey 07932; (ii) 2700
Westchester Avenue, Purchase, New York 10577-2535; (iii) 90 Woodbridge Center
Drive, Woodbridge, New Jersey 07095; and (iv) 555 Long Wharf Drive, New Haven,
Connecticut 06511 ("GMAC"); and Hudson Motors Partnership t/a Hudson Toyota, a
New Jersey general partnership with its principal administrative office located
at 585 Route 440, Jersey City, New Jersey 07306, and with a local operating
office located at 585 Route 440, Jersey City, NJ 07304 ("Dealer").
II. RECITALS
A. WHEREAS, on or after October 1, 1992, GMAC and Dealer executed a Loan and
Security Agreement and related documents by which GMAC agreed to provide
various credit accommodations to Dealer (the "Dealer Agreement"); and
B. WHEREAS, Dealer is an affiliate of twenty-six or more other dealerships
having similar and common ownership, management, and financial interests
(the "Affiliates"); and
C. WHEREAS, the Dealer and Affiliates have hired and retained DiFeo-EMCO
Management Partnership, a New Jersey general partnership (the "Management
Company"), for the purpose of coordinating, managing, and supervising
various business, financial, organizational, management, and operational
matters for Dealer and Affiliates; and
D. WHEREAS, GMAC and Management Company executed a Term Loan and Borrowing
Base Credit Line Loan Agreement and related documents, of even date
herewith (the "Management Company Loan Agreement") by which GMAC agreed to
provide various credit accommodations to Management Company (the
"Management Company Financing") which credit accommodations have been
guaranteed by Dealer and Affiliates all as of the date of this First
Amendment; and
E. WHEREAS, GMAC and Dealer desire and intend to amend the Dealer Agreement,
partially in response to the Management Company Financing.
<PAGE>
III. THE AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual promises herein
contained, the sufficiency of which is hereby acknowledged, Dealer and GMAC
hereby agree as follows:
1. The Dealer Agreement is hereby amended, effective immediately, in the
following way:
(a) No direct floorplan finance accommodations shall be made available to
Dealer for any used vehicles now or hereafter owned by Dealer.
(b) The "administrative release period" set forth in subparagraph 6(i)
shall be increased from three (3) business days to four (4) business
days.
(c) The second sentence of subparagraph 5(e) shall be substituted with the
following language: "This initial minimum capitalization amount, in
addition to all such amounts for Affiliates, shall at all times be
maintained by Dealer, Affiliates, DiFeo Leasing Partnership, a New
Jersey general partnership, and DiFeo-EMCO Management Partnership, a
New Jersey general partnership, in an amount not less than Ten Million
Five Hundred Thousand Dollars ($10,500,000)."
(d) The entirety of subparagraph (b/c) shall be substituted with the
following language: "Dealer will at all times maintain minimum net
working capital in conformity with the standards required from time to
time by the Dealer's motor vehicle manufacturer/distributor
franchisor."
2. In all other respects, the Dealer Agreement remains unchanged and in full
force and effect.
3. Dealer hereby acknowledges and agrees that Dealer has carefully examined
the Management Company Loan Agreement, understands how it works and the
implications thereof, and consents to, affirms, and supports each and every
representation, warranty, and covenant undertaken by Management Company
thereunder.
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<PAGE>
IN WITNESS WHEREOF, GMAC and Dealer have caused this First Amendment to be
executed by its duly authorized representative.
GENERAL MOTORS ACCEPTANCE CORPORATION
("GMAC")
By:
-----------------------------------------
Paul A. Given, Control Branch Manager
HUDSON MOTORS PARTNERSHIP
T/A HUDSON TOYOTA
By:
-----------------------------------------
Title:
---------------------------------------
and
By:
-----------------------------------------
Title:
---------------------------------------
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<PAGE>
ADDENDUM TO SALES AND SERVICE AGREEMENT
THIS ADDENDUM ("Addendum") is entered into effective as of the date set
forth below by and between SK MOTORS LTD., INC. d/b/a/ SCOTTSDALE PORSCHE
("Dealer"), UNITED AUTO GROUP WEST, INC. ("Dealer Owner"), UNITED AUTO GROUP,
INC. ("Public Company"), and PORSCHE CARS NORTH AMERICA, INC., a Delaware
Corporation ("Porsche Cars N.A.").
RECITALS
WHEREAS, Porsche Cars N.A. is the importer and distributor of Porsche
automobiles and parts in the United States and has the exclusive right to
authorize the establishment and operation f Porsche franchised dealer; and
WHEREAS, Porsche Cars N.A. believes it is in its best interests to enter
into Sales and Service Agreements only with dealerships in which at least a
twenty-five percent (25%) interest is owned by an individual knowledgeable in
the auto sales and leasing business who will operate or oversee the operation of
the dealerships (a "Dealer Principal"), a requirement that is set forth in every
Porsche Sales and Service Agreement; and
WHEREAS, it is the policy and practice of Porsche Cars N.A. that Sales and
Service Agreement shall not be executed with entities whose controlling
ownership includes trusts, holding companies, foundations or other impersonal
entities; and
WHEREAS, the Porsche Sales and Service Agreement requires that Porsche Cars
N.A. approve all changes in ownership of a Porsche dealership; and
WHEREAS, the Dealer will conduct its operations at 6725 East McDowell Road,
Scottsdale, Arizona 85257, with facilities, employees and certain assets that
may be shared with dealerships of other manufacturer/distributors (said
facilities and all approved successor facilities hereinafter referred to as the
"Shared Facility"); and
WHEREAS, the Dealer Owner and/or the Dealer Principal also own and operate
the other dealerships conducting their operations at the Shared Facility; and
WHEREAS, it is the policy and practice of Porsche Cars; N.A. to receive
balance sheets and income statements in connection with the operation of Porsche
dealerships; and
WHEREAS, the Porsche Dealer Operating Standards require that dealership
facilities must be satisfactory as to appearance, size, layout and equipment for
the total dealership operations; and
<PAGE>
WHEREAS, a stock purchase and sale agreement has been executed by, among
others, Steven Knappenberger (who is the Dealer Principal of the existing
dealer) ("Knappenberger"), Dealer Owner, and Public Company, which amounts to a
change of ownership under the terms of the Sales and Service Agreement; and
WHEREAS, following consummation of such stock purchase and sale agreement,
Knappenberger will only have a nineteen percent (19%) stock ownership interest
in Dealer, and thereby Knappenberger will not satisfy the requirement in the
Sales and Service Agreement requiring a twenty-five percent (25%) ownership
interest in Dealer; and
WHEREAS, Public Company, the parent company of Dealer Owner, has requested
approval to have its stock publicly traded; and
WHEREAS, Dealer is desirous of entering into a Sales and Service Agreement
with Porsche Cars N.A., and
WHEREAS, Porsche Cars N.A. is willing to make an exception to its policy of
requiring a twenty-five percent (25%) ownership interest in Dealer as to
Knappenberger, and successor Dealer Principals and to enter into a Sales and
Service Agreement with Dealer, but only if, among other things, the terms and
conditions of this Addendum modifying Porsche Cars N.A.'s standard Sales and
Service Agreement is executed by Dealer, Dealer Owner, and Public Company, and
the terms hereof are continually satisfied throughout the term of the Sales and
Service Agreement and all extensions, renewals, and successor agreements
thereto;
NOW THEREFORE, in consideration of these premises and the mutual covenants,
conditions and agreements herein, the parties hereto agree as follows:
SECTION 1
COVENANTS
1.1 DEALER STOCK. Public Company, Dealer Owner and Dealer each represent
and warrant that there is only one class of common voting stock of Dealer and
that no additional common voting stock of Dealer will be issued nor will any
other class of stock of Dealer be created during the initial or subsequent terms
of the Sales and Service Agreement, nor shall such Dealer Stock be sued as
collateral or otherwise encumbered except as may be provided in the
Shareholders' Agreement referred to in Section 2.6. below, or as may be
permitted pursuant to the provisions of Section 4. below. Said stock shall
hereinafter be referred to in this Addendum as "Dealer Stock." In addition,
throughout the term of this Addendum and the Sales and Service Agreement and all
successor agreements thereto, Dealer Owner and Public Company agree that Dealer
Stock shall bear a legend which shall indicate that it may be transferred only
in compliance with the terms of this Addendum.
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<PAGE>
1.2. OWNERSHIP AND TRANSFER OF DEALER STOCK. Except as otherwise permitted
herein, at all times during the continuance of said Sales and Service Agreement
and al extensions and successor agreements thereto, (i) Dealer Stock shall be
owned nineteen percent (19%) b then current Dealer Principal and eighty-one
percent (81%) by Dealer Owner; (ii) each Dealer Principal shall have an Equity
Interest in the Dealership as described in Section 2 of this Addendum; and (iii)
Dealer Stock may only be transferred in accordance with the terms of this
Agreement.
1.3. OWNERSHIP AND TRANSFER OF DEALER ASSETS. Except as otherwise
permitted herein, Public Company, Dealer Owner and Dealer each agree that there
shall be no sale, encumbrance or other direct or indirect transfer of the assets
of Dealer except in the ordinary course of its business.
1.4. AUTHORITY TO MAKE DECISIONS. Public Company and Dealer Owner hereby
represent that each Dealer Principal of Dealer (including, but not limited to,
Knappenberg), shall, during the term of the Sales and Service Agreement and all
extensions thereof or successor agreements thereto, have complete and
irrevocable authority to make all decisions and enter into any and all necessary
business commitments required in the normal course of conducting dealership
operations on behalf of Dealer, and may take all actions normally required of a
Dealer Principal pursuant to Part II. A of the Sales and Service Agreement.
Neither Dealer Owner, Public Company nor Dealer will revoke, modify or amend
such authority without the prior written approval of Porsche Cars N.A.
1.5. NOTICE OF CERTAIN EVENTS. Public Company, Dealer Owner, and Dealer
each agree to inform Porsche Cars, N.A. of (i) any occurrence which may
constitute a Dealer Principal Termination Event (as that phrase is defined in
Section 2, below, (ii) any event which may constitute a "Change of Ownership or
Control" as that phrase is defined in Section 3, below, and (iii) any event
which may give Porsche Cars N.A. a Right of First Refusal as described in
Section 4, below within such periods of time of the occurrence of such events as
are set forth herein.
1.6 CHANGE OF KEY MANAGEMENT. Dealer, Dealer Owner, and Public Company
each agree to provide to Porsche Cars N.A. at least sixty (60) days prior
written notice of any proposed change in the key management of Dealer, Dealer
Owner or Public Company, or any material change in the authorities, duties or
responsibilities of such key management. Such proposal shall include sufficient
information to permit Porsche Cars N.A. to evaluate the proposed change in a
manner which is consistent with its normal policies and procedures. As of the
date of this Addendum, the phrase "key management" shall mean, with respect to
Dealer Owner and Public Company, Carl Spielvogel - Chairman and CEO, Arthur J.
Rawl - Executive Vice President, and George Lowrance - Executive Vice President,
but such phrase shall also
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<PAGE>
be deemed to include any successors of such individuals. With respect to
Dealer, such phrase shall mean the Dealer Principal and the general manager and
all successor Dealer Principals and general managers.
1.7. AUTHORITY. Dealer, Dealer Owner, and Public Company hereby warrant
that the representations and assurances of each herein are within their
respective authority to make and do not contravene any further directive,
policy, or procedure of any other person or entity.
1.8. ACCURACY OF INFORMATION. Dealer, Dealer Owners, and Public Company
each represent and warrant that all information, whether written or oral,
delivered to Porsche Cars N.A. prior to or as of the date of execution of this
Addendum was at the time of delivery and is as of the date of execution of this
Addendum accurate and complete in all respects and acknowledge that the accuracy
and completeness of such information is a condition precedent to the execution
of this Addendum and the Sales and Service Agreement by Porsche Cars N.A.
1.9. COMPLIANCE WITH LAWS. Dealer, Dealer Owner and Public Company each
represent and warrant that at all times during the continuance of the Addendum
and the Sales and Service Agreement, that the purchases and sales of Dealer
Stock undertaken referred to in this Addendum shall comply with all relevant
state and federal laws, including state and federal securities laws.
SECTION 2
PRINCIPAL OWNER EQUITY OWNERSHIP IN DEALER
2.1. COMMON STOCK OWNERSHIP BY DEALER PRINCIPAL. At all times during the
period a person is a Dealer Principal, such person shall own at least nineteen
percent (19%) of the Dealer Stock. Such Dealer Principal shall purchase such
stock from Dealer Owner as of the effective date of his or her nomination by
Dealer Owner and the acceptance of such nomination by Porsche Cars N.A. The
purchase price for such Dealer Stock shall be the Initial Value of Dealer Stock.
Upon a subsequent Dealer Principal Termination Event, the then Dealer Principal
shall be required to sell to Dealer Owner, and Dealer Owner shall be required to
purchase, such Dealer Stock at the Subsequent Value of Dealer Stock.
2.2. PAYMENT. Unless otherwise agreed in a writing signed by the parties
hereto or in the Shareholders' Agreement referred to in Section 2.5, below, the
payment to Dealer Owner by a Dealer Principal or to a Dealer Principal by a
Dealer Owner as required by Section 2.1, above, shall be made in cash within 15
days of the occurrence of the relevant event which requires the transfer of such
Dealer Stock.
2.3. DEFINITIONS. For purposes of this Agreement, the following phrases
used in this Section 2 shall have the following
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<PAGE>
meanings unless otherwise agreed in a writing signed by the parties hereto:
(a) "Dealer Principal Termination Event" shall mean (i) the actual
termination of employment of a Dealer Principal by Dealer, or (ii) a
materiel diminution of the duties of any such Dealer Principal as
described in Section 1.2, above.
(b) "Initial Value of Dealer Stock" shall mean the value of the
Dealer Stock transferred to a Dealer Principal at the time of his or
her assumption of that position of employment with Dealer. Unless
there has been a material adverse change in the financial condition of
Dealer, the "Subsequent Value of Dealer Stock" as to the predecessor
Dealer Principal may be used as the "Initial Value of Dealer Stock"
for the next succeeding Dealer Principal.
(c) "Subsequent Value of Dealer Stock" shall mean the value of Dealer
Stock upon the occurrence of a Dealer Principal Termination Event.
2.4. DETERMINATION OF VALUE OF DEALER STOCK. Unless otherwise agreed by
the parties hereto, the value of Dealer Stock shall, for purposes of this
Section, be determined by appraisal, with such arbitrator chosen by mutual
agreement of the parties hereto. If the parties are unable to so agree, Porsche
Cars N.A. shall appoint one arbitrator and Dealer Owner shall appoint one
arbitrator. The two arbitrators so appointed shall appoint a third arbitrator.
The decision of a majority vote of the three arbitrators shall be binding on all
of the parties hereto and upon the then Dealer Principal. The cost of
arbitration under this Section 2.4 shall be paid equally by Porsche Cars N.A.
and by Dealer Owner.
2.5. SPECIAL RULES APPLICABLE TO KNAPPENBERGER. Notwithstanding the
foregoing, upon a Dealer Principal Termination Event as to Knappenberg,
Knappenberg shall be required to sell, and Dealer Owner shall be required to
buy, Knappenberger's Dealer Stock for a payment equal to the Subsequent Value of
Dealer Stock multiplied by one-hundred fifteen percent (115%) minus the sum of
the Initial Value of Dealer Stock and an amount equal to fifteen percent (15%)
thereof per annum.
2.6. SHAREHOLDERS' AGREEMENT. The terms of this Section 2 shall be
evidenced by a Shareholders' Agreement approved by Porsche Cars N.A. and which
(i) shall be entered into by and between Knappenberger and Dealer Owner upon
execution of this Addendum and which (ii) shall be entered into by Dealer Owner
and each successor Dealer Principal upon the transfer of Dealer Stock as
provided above. Such Shareholders' Agreement shall be
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<PAGE>
specifically enforceable by Porsche Cars N.A. and once approved by Porsche Cars
N.A. may not thereafter be modified except by written agreement of the parties
hereto.
SECTION 3
CHANGE OF OWNERSHIP OF CONTROL
3.1 CHANGE OF OWNERSHIP OR CONTROL DEFINED. For purposes of this Addendum
to the Sales and Service Agreement, the phrase "Change of Ownership or Control"
shall mean the occurrence of any one or more of the following events:
(a) The transfer by a Dealer Principal directly or indirectly, of any
of his or her Dealer Stock to any person other than Dealer Owner as
provided in this Addendum, provided, however, this prohibition on
transfer shall not apply to Knappenberger if such transfer is to a
trust controlled by him established primarily for the purpose of
estate planning or such transfer has been approved in advance in
writing by Porsche Cars, N.A. which approval shall not be unreasonably
withheld; or
(b) The transfer by Dealer Owner, directly or indirectly, of any of
its Dealer Owner Stock such that following such transfer Dealer Owner
owns less than eighty-one percent (81%) thereof, unless such transfer
is pursuant to Section 4, below, or unless such transfer has been
approved in advance in writing by Porsche Cars, N.A., which approval
shall not be unreasonably withheld; or
(c) The sale, encumbrance or other direct or indirect transfer of the
assets of Dealer except in the ordinary course of its business; unless
such transfer is pursuant to Section 5, below, or unless such transfer
has been approved in advance in writing by Porsche Cars, N.A., which
approval shall not be unreasonably withheld; or
(d) The acquisition of twenty percent (20%) or more of the number or
value of the outstanding stock of Public Company if Item 4 of Schedule
13D filed with the Securities and Exchange Commission discloses that
such person or entity intends or may intend either: (i) an
acquisition of additional securities of Public Company or (ii) an
extraordinary corporate transaction such as a merger, reorganization
or liquidation, involving Public Company or any of its subsidiaries or
(iii) a sale or transfer of a material amount of assets of Public
Company or any of its subsidiaries or (iv) any change in the present
Board of Directors or management of Public Company or (v) any other
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<PAGE>
material change in Public Company's business or corporate structure or
(vi) any action determined by Porsche N.A. to be similar to the events
noted in (i) - (v), above; or
(e) A change in the key management of Public Company, Dealer Owner or
Dealer described in Section 1.6, above, which is not approved in
advance in writing by Porsche Cars N.A., provided that such approval
shall not be unreasonably withheld; or
(f) A failure of Dealer Owner or a Dealer Principal or both to
perform any of the duties required of them pursuant to this Addendum
or the Sales and Service Agreement; or
(g) A material breach of any of the Covenants of Public Company,
Dealer Owner or Dealer set forth in Section 1; or
(h) The occurrence of a Dealer Principal Termination Event unless,
within 60 days thereof, nineteen percent (19%) of the Dealer Common
Stock is transferred to a successor Dealer Principal acceptable to
Porsche Cars N.A. in accordance with its policies and terms and
conditions set forth in Section 2, above.
3.2. RIGHTS OF PORSCHE CARS N.A. UPON A CHANGE OF OWNERSHIP OR CONTROL. If
a Change of Ownership or Control described in Section 3.1 shall occur during the
initial term of this Sales and Service Agreement or any extension of said
Agreement or successor Agreement thereto, and such Change of Ownership or
Control is reasonably determined by Porsche Cars N.A. to adversely affect its
interests, then Dealer, Dealer Owner and Public Company agree that within
ninety(90) days of receipt of written notice form Porsche Cars N.A. of such a
determination, Dealer, Dealer Owner, Public Company and Dealer Principal shall,
at the reasonably exercised direction of Porsche Cars N.A. (i) revoke and
rescind any third party agreement pertaining to any sale of Dealer Stock or
Dealer assets subject to this Agreement to a third party acceptable to Porsche
Cars N.A.; (ii) voluntarily terminate the Sales and Service Agreement between
Porsche Cars N.A. and Dealer; or (iii) provide evidence satisfactory to Porsche
Cars N.A. that actions have subsequently been taken by Dealer, Dealer Owner,
Public Company and/or Dealer Principal so that such Change of Ownership or
Control has been effectively cured or revoked or rescinded to the satisfaction
of Porsche Cars N.A.
SECTION 4
RIGHT OF FIRST REFUSAL - DEALER STOCK
4.1. RIGHT OF FIRST REFUSAL. In addition to the restrictions on
transferability of Dealer Stock elsewhere set
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forth in this Addendum, Dealer Owners shall not sell, transfer, exchange or
otherwise dispose of any of the shares of Dealer Stock by it unless such Dealer
Stock shall first be offered to Porsche Cars N.A.
4.2. DISCLOSURE OF POTENTIAL SALE. If Dealer Owner shall desire to sell,
encumber, or otherwise dispose of its Dealer Stock, Dealer Owner shall deliver a
written notice to Porsche Cars N.A., which notice shall specify the person to
whom the shares are to be disposed or encumbered, the purchase price or other
consideration to be received by Dealer Owner for such shares, and the terms upon
which such purchase price or other consideration is to be paid. The delivery of
such written notice to Porsche Cars N.A. shall constitute an irrevocable offer
to sell all of its Dealer Stock to Porsche Cars N.A.
4.3. EXERCISE OF RIGHT OF FIRST REFUSAL. Porsche Cars N.A. may accept such
offer by delivering a written acceptance to Dealer Owner within thirty (30) days
after receipt of the written notice specified in Section 4.2. If Porsche Cars
N.A. elects to accept such offer, the purchase of such shares shall be closed
within thirty (30) days upon the same terms as are specified in such notice, or
upon such other terms as are mutually acceptable to the parties, except if the
offer set forth in such notice pertains to less than all of the Dealer Stock
held by Dealer Owner, then the purchase price for all of such Dealer Stock shall
be the price per share set forth in such notice. If Porsche Cars N.A. elects
not to exercise such offer or if Porsche Cars N.A. allows such offer to expire
without being accepted, Dealer Owner shall be able to transfer such shares on
the terms specified in the written notice to the person identified therein,
subject to the written consent of Porsche Cars N.A. which shall not be
unreasonably withheld as set forth in Section 3.2. If such transaction is not
consummated within sixty (60) days, such shares shall again be subject to the
restrictions and the repurchase option described in this Section 4.
4.4. ASSIGNMENT OF RIGHT OF FIRST REFUSAL. In the event Porsche Cars N.A.
determines to exercise its Right of First Refusal, Porsche Cars N.A. may assign
any resulting stock purchase agreement to any party. Porsche Cars N.A. hereby
agrees to guarantee the purchase price to be paid by any such assignee.
4.5. REIMBURSEMENT OF REASONABLE EXPENSES. If Porsche Cars N.A. exercises
its Right of First Refusal hereunder, Porsche Cars N.A. will reimburse Dealer
Owner for reasonable expenses up to $25,000, excluding brokerage commissions,
for which Dealer Owner is liable to the initial offeree related to the
development of any stock purchase agreement. Dealer Owner will supply Porsche
Cars N.A. with appropriate documentation to support all such expenses and copies
of all material generated during the negotiation and development of the stock
purchase agreement in anticipation of such sale (including but not limited to,
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<PAGE>
environmental reports, title search, invoices of attorneys, property inspection
reports and accounting reviews.)
4.6. LIMITATION OF RIGHT OF FIRST REFUSAL. Notwithstanding the foregoing,
Porsche Cars N.A. shall not have a Right of First Refusal as to any sale to
Knappenberger or a nominee successor of Dealer approved in advance by Porsche
Cars N.A. (which approval shall not be unreasonably withheld) or to an employee
of Dealer who is determined by Porsche Cars N.A. to be qualified and who has
been employed by Dealer for more than two (2) years.
SECTION 5
RIGHT OF FIRST REFUSAL - ASSETS
5.1. RIGHT OF FIRST REFUSAL. Dealer shall not sell, encumber or in any
other manner. direct or indirect, transfer the assets of Dealer except in the
ordinary course of business unless such Dealer asset shall first be offered to
Porsche Cars N.A. financial statement for each entity conducting business at
such location. Dealer agrees to provide such financial statements in accordance
with the terms contained in the Sales and Service Agreement and that such
financial statements shall be prepared in accordance with generally accepted
financial principles and shall disclose the method used to allocate the assets,
liabilities and expenses among the dealership entities conducting business at
the Shared Facility.
SECTION 7
CHANGE OF OTHER DEALERSHIPS AT SHARED ENTITY
Dealer Principal and Dealer Owner agree that any addition or deletion of
other automobile dealerships at the Shared Facility shall constitute a change in
the use or purpose of the Shared Facility and shall require the Dealer and
Dealer Principal to give prior written notice thereof to Porsche Cars N.A. and
shall also require the prior written approval of Porsche Cars N.A. as set forth
in Section II, Part II(B) of the Sales and Service Agreement.
SECTION 8
NON-PERFORMANCE
Porsche Cars N.A., Dealer, Dealer Owner and Public Company each agree that
the terms and conditions of this Addendum are a material inducement to Porsche
Cars N.A. to enter a Sales and Service Agreement with Dealer and constitute a
consent of Porsche Cars N.A. on an exception basis, to the ownership and
management structure of Dealer, Dealer Owner and Public Company. Porsche Cars
N.A. represents that without the assurances made by Dealer, Dealer Owner and
Public Company that the terms and conditions herein will be satisfied, Porsche
Cars N.A. would not have entered into a Sales and Service Agreement with Dealer.
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<PAGE>
This failure of Dealer, Dealer Owner, a Dealer Principal and/or Public
Company to meet any of the material terms, conditions and restrictions set forth
in this Addendum shall constitute a material breach of the Porsche Sales and
Service Agreement and shall justify termination of the Agreement. Porsche Cars
N.A.'s right to terminate under this Addendum shall be without any liability to
Porsche Cars N.A. Dealer, Dealer Owner and Public Company acknowledge that
their failure to satisfy any of the terms and conditions set forth above shall
constitute reasonable cause or good cause as those phrases are used in all
applicable statutes and regulations for termination, cancellation or failure to
renew the Sales and Service Agreement by Porsche Cars N.A.
SECTION 9
SPECIFIC PERFORMANCE
Dealer, Dealer Owner, and Public Company each acknowledge and agree that
Porsche Cars N.A. would be damaged irreparably in the event any of the
provisions of this Addendum are not performed in accordance with their specific
terms or are otherwise breached. Accordingly, each of Dealer, Dealer Owner and
Public Company agree, that in addition to any other remedy available to it under
applicable law, Porsche Cars N.A. shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Addendum and to
enforce specifically this Addendum and the terms and provisions hereof in any
action institute in any court having jurisdiction over the parties and matter
hereto.
SECTION 10
APPLICATION
This Addendum shall affect only those provisions of the Porsche Sales and
Service Agreement, and any extensions thereof of successor agreements thereto,
which are specifically modified by the terms of the Addendum. This Addendum
shall not modify, waive or otherwise vary the other terms of the Porsche Sales
and Service Agreement. If the Dealer, Dealer Owner or Public Company becomes a
party in any merger, consolidation, acquisition, or reorganization, the terms of
this Addendum and the Sales and Service Agreement shall remain in full force and
effect according to their respective terms.
SECTION 11
MODIFICATION
This Addendum has been executed in two or more copies, each of which is
deemed an original and contains the entire understanding between the parties
with respect to the subject matter of the Addendum and supersedes all oral
agreements and negotiations between the parties and the alterations, variations,
modification or waiver of the provisions of this Addendum shall
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be valid only when they have been reduced to writing and duly signed by the
parties.
SECTION 12
SEVERABILITY
If any provisions of this Addendum are deemed to be invalid, such
provisions shall be severed from this Addendum and the other provisions shall
remain in full force and effect. A waiver of a breach or default under this
Addendum shall not be deemed to be a waiver of any subsequent breach or default.
IN WITNESS WHEREOF, each of the parties has executed this Addendum as of
the day of 1996.
----- --------
PORSCHE CARS NORTH AMERICAN, INC.
By:
------------------------------
Its:
-----------------------------
SK MOTORS, LTD., INC. UNITED AUTO GROUP WEST, INC.
By: By:
------------------------------- -----------------------------
Its: Its:
----------------------------- ----------------------------
UNITED AUTO GROUP, INC. STEVEN KNAPPENBERGER
By:
------------------------------ --------------------------------
Its:
----------------------------- --------------------------------
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<PAGE>
Dealer Agreement
Grant of the Franchise
This Dealer Agreement ("Agreement") is entered into effective the ___ day of
19__ (the "Commencement Date") by and between Land Rover North America, Inc., a
Delaware Corporation with its principal place of business located at 4390
Parliament Place, Lanham, Maryland 20706 (hereafter "Company") and
Dealer Name:
(hereafter "Dealer")
Business Entity:
(corporation, partnership, sole proprietor, etc.)
Place of Incorporation/Registration:
Principal Business Address:
(Street, City, County, State, Zip Code):
Doing Business As:
Dealer Principal: Name
Residence Address
Phone Number
Purpose and Expectation
The purpose of this Agreement is to:
A. Authorize Dealer to sell and service Land Rover Products and to display the
Land Rover marque and represent itself as a Dealer of Land Rover Products,
all in accordance with the terms of this Agreement.
B. Describe the basic rights and obligations of the parties to the
relationship and the terms and conditions upon which the rights are granted
and the obligations imposed.
C. Affirm an expectation between the parties that each of the parties will
perform its obligations in a relationship of trust and confidence with the
other and recognize that a successful long-term relationship will result
from the mutual performance of such obligations.
D. Combine Dealer with Company and with other dealers into a distribution
system dedicated to delivering to the automotive consumer in the United
States an ownership experience that has never been previously enjoyed
resulting in unparalleled repeat purchases of Land Rover Products.
Joint Undertaking
In addition to fulfilling the terms and conditions of this Agreement, the
parties agree to work jointly to achieve their
<PAGE>
goals, and to maintain the standards of excellence inherent to Land Rover
products.
Company will plan and oversee strategic marketing initiatives to ensure
successful development of the Land Rover brand and distribution of products in
the marketplace.
One such initiative is development of the Land Rover brand. Enjoying a truly
unique position in automotive markets throughout the world, the Land Rover brand
is best characterized by its Marque Values. These principles embody the quality
and craftsmanship built into every Land Rover product. They also serve as the
cornerstone of marketing efforts worldwide.
Land Rover Marque Values
INDIVIDUALISM - Knowing your own mind: independence
AUTHENTICITY - Fit for purpose: the original
FREEDOM - Go where you want to go: choice
ADVENTURE - Exploring the unknown: with care for the environment
GUTS - Giving everything you've got: endurance
SUPREMACY - Superior to all competitors: leadership
To ensure integrated and consistent promotion of the Land Rover brand, Company
will provide Dealer comprehensive training, marketing and product development
programs as well as overall brand development strategies.
Selected by Land Rover for exceptional business practice, Dealer Principal is an
ethical operator of a retail motor vehicle sales and service facility staffed
with personnel experienced in the automotive business and recognized as the best
in the community.
The Land Rover Customer is a discriminating consumer with high quality and
service expectations. Dealer, therefore, is expected by Company to:
Require the personal involvement of the Dealer Principal, all individuals
connected with Dealer and recognize Company's reliance on representations
with respect to that personal involvement made elsewhere in this Agreement.
Conduct sales and promotional efforts consistent with Land Rover's elite
image.
Provide a facility that is immediately identifiable as Land Rover and one
that evokes excitement and enthusiasm about Land Rover Products.
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<PAGE>
Maintain a staff of highly trained professionals who are genuinely
enthusiastic about Land Rover Products and equally dedicated to deliver the
ultimate ownership experience.
Implement operating procedures applicable to all Dealers so that the
customer will receive consistent, quality service from every Land Rover
Product Dealer, regardless of location.
Standards of Performance
Dealer and Company agree that the performance standards contained and/or
referred to in this Agreement describe minimums only.
To achieve the highest level of customer satisfaction possible in the sales,
performance of warranty and maintenance process, as well as to achieve the
repeat sales level that the parties need to properly and successfully develop
the Land Rover marque in the U.S., the parties agree to achieve exceptional
standards of performance.
In addition to meeting these high standards, the parties agree that the
standards themselves will move to even higher levels as competition increases
and consumer tastes and demands change.
Thus the parties recognize that customer satisfaction is dependent upon
Company's development of the Marque Values and that Dealer will provide the
highest level of sales and service satisfaction through a dedicated, well-
trained staff that meets and/or exceeds customer expectations.
Grant
Based upon the mutual representations contained herein, Company is pleased to
grant to Dealer the right to sell Land Rover Products and to make Dealer a part
of the Land Rover distribution system, together with such rights, privileges and
obligations that accompany said appointment.
Term
Subject to the provisions of this Agreement, it shall commence on the
Commencement date and continue for a period until ____________. The Agreement
shall be renewable annually for a _________ year period from ___________ of the
year in which the renewal review is conducted. On or before __________ of each
year the parties will meet and conduct a review of Dealer's performance for the
year of the review against that year's previously agreed performance goals.
Dealer is assured the opportunity to renew the Dealer Agreement with Company at
the expiration date, subject to Company's determination that Dealer continues to
fulfill its obligations under the Agreement and subject to Article 12.4.12 and
Article 12.4.13.
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<PAGE>
Modifications
In accordance with the terms of section 14.5 hereof, section 1.1 "Agreement" is
modified by the addition of the Shareholders Agreement Exhibit and Article 8 is
amended by the deletion of section 8.3 and the substitution of a new section 8.3
attached hereto.
"Company"
By
------------------------
"Dealer'
By
------------------------
"Dealer Principal"
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<PAGE>
EXHIBIT 10.8.9.2
[LAND ROVER LOGO]
LAND ROVER NORTH AMERICA, INC.
DEALER AGREEMENT
STANDARD TERMS AND CONDITIONS
<PAGE>
TABLE OF CONTENTS
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marque Values, Advertising and Promotions Trademarks . . . . . . . . . . . . .
Supply of Product. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Primary Area of Responsibility/Facilities. . . . . . . . . . . . . . . . . . .
Customer Relations and Retention . . . . . . . . . . . . . . . . . . . . . . .
Dealer Performance, Operations and Personnel . . . . . . . . . . . . . . . . .
Obligation of Company to Dealer. . . . . . . . . . . . . . . . . . . . . . . .
Ownership, Succession, Transfer and Assignment . . . . . . . . . . . . . . . .
Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communications and Disputes. . . . . . . . . . . . . . . . . . . . . . . . . .
Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effects of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
Standard Terms and Conditions
LAND ROVER NORTH AMERICA, Inc.
ARTICLE 1 - DEFINITIONS
The following definitions shall apply in
this agreement. Any reference to the
singular shall, where appropriate,
include the plural and vice versa.
Agreement 1.1 "Agreement" means the combination
of the text of the Grant of the
Franchise executed by the parties
hereto, these Standard Terms and
Conditions and the Dealer Ownership and
Management Exhibit, Dealer Primary Area
of Responsibility Exhibit, Dealer
Facilities and Location Exhibit, Dealer
Financial Requirements Exhibit, Dealer
Succession Plan Exhibit together with
any other exhibit incorporated by
reference.
Company 1.2 "Company" means Land Rover North
America, Inc., a corporation organized
under the laws of the state of Delaware
with its principal place of business
located at 4390 Parliament Place,
Lanham, Maryland 20706.
Commencement Date 1.3 "Commencement Date" means the
effective date of this Agreement as
specified in the Grant of the Franchise.
Dealer 1.4 "Dealer" means the business entity
together with the individual(s) and/or
organization(s) described in the Dealer
Ownership and Management Exhibit.
Dealer Premises 1.5 "Dealer Premises" means the
physical location described in the
Dealer Facilities and Location Exhibit
and none other.
1
<PAGE>
Dealer Principal 1.6 "Dealer Principal" means the person
designated as such in the Dealer
Ownership and Management Exhibit.
General Manager 1.7 "General Manager" means the
individual named as such in the Dealer
Ownership and Management Exhibit.
Manufacturer 1.8 "Manufacturer" means Rover Group
Limited, a corporation organized under
the laws of England under Registration
No. 48324 with its registered office at
Fletchampstead Highway, Coventry,
CV49DB, United Kingdom.
Primary Area of
Responsibility 1.9 "Primary Area of Responsibility"
means the geographic area described in
the Dealer Primary Area of
Responsibility Exhibit.
Land Rover Centre 1.10 "Land Rover Centre" means a Dealer
Premises which is a free standing
facility designed and constructed in
accordance with Company guidelines
offering sales, service and parts
available to Customers and dedicated
exclusively to the sales and service of
Land Rover Products, with staff trained
in accordance with Company guidelines
and designated as a Centre by Company.
Such designation as a Centre may be
withdrawn by Company if Dealer fails to
maintain the requirements of a Centre.
Land Rover Vehicle 1.11 "Land Rover Vehicle" means a four
wheel drive vehicle assembled by
Manufacturer bearing the trademark Land
Rover and imported by Company.
Land Rover Parts
Accessories 1.12 "Land Rover Parts & Accessories"
means replacement parts and optional
equipment marketed by Company for Land
Rover Vehicles. The optional equipment
2
<PAGE>
will be referred to for marketing
purposes as "Gear", as "Land Rover Gear"
or "Vehicle Gear".
Land Rover Products 1.13 "Land Rover Products" means the
combination of Land Rover Vehicles and
Land Rover Parts and Accessories.
Warranty 1.14 "Warranty" means that certain
undertaking issued by Company which
describes the limited obligation of
Company with respect to repair and
service of Land Rover Vehicles in
accordance with the written terms of
such undertaking as described in Article
9.
Article 2 - Marque Values, Advertising
and Promotions Trademarks
----------------------------------------
Marque Values 2.1 Dealer and Company, as part of a
national Land Rover distribution system,
agrees to adhere to the Marque Values
and promote Land Rover Products and
conduct their operations in a manner
consistent with those values.
Advertising 2.2 Advertising will be done
consistently and regularly in compliance
with Company guidelines and Dealer will
correct and/or withdraw, as required by
Company, any advertising or promotional
material which Company, in its sole
opinion, deems objectionable.
Promotions 2.3 Dealer will conduct, on a regular
basis, promotional events such as off-
road events, service clinics, lifestyle
and press events and support local civic
and cultural events, all to further
enhance the image of the Dealer and
other Land Rover dealers.
Signs 2.4 Dealer will purchase, illuminate,
promptly repair and maintain at the
Dealer Premises, signs and displays of
the type developed by Company as well as
such other types of signs necessary
3
<PAGE>
to effectively identify the Dealer and
the Dealer Premises. The parties will
cooperate so as to adhere to local laws
and ordinances which relate to the
placement, size and general appearance
and control of signs. Dealer will
provide Company with sufficient
information concerning local laws and
ordinances to allow for proper design
and placement of signs.
Advertising Groups 2.5 To the maximum extent permitted by
law, Dealer will participate in
promotional, advertising and public
relations programs and groups developed
by Company and will further develop and
actively utilize programs for the
advertising, promotion and media
coverage of Land Rover Products.
Use of Trademark 2.6 Dealer will not use or display any
Company trademark except in the
following fashion:
2.6.1 In connection with the
promotion, sale and service
of Land Rover Products
exclusively; and
2.6.2 Only in such manner and for
such purposes incident to
such promotion, sale, and
service as Company may
specify from time-to-time.
Limitation 2.7 Dealer agrees not to use any word,
symbol or abbreviation which is similar
to, or may be confused with Company's
trademark. Dealer may use the
designations "Land Rover Authorized
Dealer," "Land Rover Genuine Parts," and
"Land Rover Authorized Service" and the
vehicle names "Range Rover",
"Discovery", "Defender 90" and "Defender
110". No Company trademark may be used
except in the color, size, form and
style as
4
<PAGE>
uniformly approved by Company. Dealer
is not authorized to offer any resale
items displaying Company's trademark
except those items offered by Company.
Infringement 2.8 The parties agree to cooperate with
each other in preventing any acts of
trademark infringement or misuse.
Dealer will advise Company of any
potential non-compliance which comes to
Dealer's attention and Company will
properly address any violation or
infringement or perceived infringement
in order to assure the integrity and
values of the Land Rover marque.
Article 3 - Supply of Product
----------------------------------------
New Vehicle Order 3.1 Subject to their availability,
Company will sell and deliver Land Rover
Products to Dealer in accordance with
the terms of this Agreement. Dealer
will place orders in accordance with
procedures established by the Company.
All orders are subject to acceptance by
Company and may be accepted in whole or
in part. Orders will be accepted by
formal notice or by shipment. All
orders are deemed firm except Dealer may
cancel all or part of its order by
notice, if such notice is received by
Company prior to notice of acceptance
being issued by Company or prior to
shipment of the order if shipment is
used by Company as the method of
acceptance of Dealer's order. If such
notice of cancellation is issued orally,
it shall be immediately confirmed in
writing.
Delivery 3.2 Company will select the
distribution point for delivery. Dealer
shall be responsible for the costs of
shipping from the Company nominated
distribution point on a nationwide
equalized cost basis. If diversions are
made at Dealer's request, or as a result
of Dealer's failure or refusal to accept
5
<PAGE>
delivery, except as provided in section
3.7 below, all costs of such diversion
shall be for Dealer's account and shall
be paid promptly.
Dealer Cost 3.3 All acceptances of Dealer's orders
will be at the prevailing Company price.
Company retains the right, subject to
notice, to revise prices from time to
time. Such revised prices shall be
effective as of the date stated and will
apply to all unfilled orders of Land
Rover Products which have not yet been
shipped to Dealer. Company will protect
retail Customers with orders in place
secured by deposits from price increases
in accordance with local law. In
agreeing to provide such protection,
Company retains the right to set
reasonable requirements on such orders
(including methods of reporting and
accepting deposits) to audit all such
claims for price protection and to
recharge Dealer for any price protection
given to a Customer that is not
subsequently substantiated. The amount
recharged will be the difference between
the price to the Customer as represented
and what the price would have been but
for the protection.
Payment 3.4 Dealer will pay for Land Rover
Products in cash, by electronic funds
transfer, by sight draft, on an account
maintained by Dealer for such purpose,
or in such other manner as specified by
Company at the time and upon the
conditions specified in terms of payment
established by Company. Delivery of
checks or of instruments other than cash
will not constitute payment until cash
has actually been collected. All
collection charges, transfer charges and
exchange costs, if any, together with
attorney fees, shall be for Dealer's
account.
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Title 3.5 Title to all Land Rover Products
will pass to Dealer upon full payment by
Dealer. Dealer will execute and
deliver, and authorizes Company to
execute on its behalf, any financing
statements or other documents necessary
to evidence its ownership. Company may
take possession of any Land Rover
Product to which it has title. Company
is entitled to all the rights and
remedies of a secured party under the
provisions of the Uniform Commercial
Code in addition to its rights under
this Agreement.
Risk of Loss 3.6 Risk of Loss to all Land Rover
Products shall pass to Dealer at the
same time as their delivery to Dealer at
Company's distribution point or to a
carrier at the place of delivery
specified in Company's terms of
delivery. Dealer will promptly advise
Company of any damage incurred in
transit on unloading Land Rover
Vehicles. In order to receive payment
for any transit damage, Dealer will
adhere to carrier and insurance company
requirements with respect to inspection
and documentation to assure proper
reporting of any damage. Company will
handle all claims for transit damage
with the relevant insurance carrier and
turn over to Dealer all amounts, if any,
collected upon receipt by Company. No
Land Rover Products will be sold by
Dealer in a damaged condition under any
circumstances.
Repair/Replacement 3.7 Dealer will promptly repair any
transportation damage to a Land Rover
Vehicle. In the event damage is in
excess of six percent (6%) of the
Manufacturer's Suggested Retail Price,
exclusive of glass, tires, wheels and
lighting components, or has sustained
damage which under applicable state law
requires disclosure by Dealer to
Customer, Dealer may, at its discretion,
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return the vehicle to Company and
Company may either substitute a
different vehicle or credit Dealer's
account for the cost of the unit.
Distribution 3.8 Company retains the right to
distribute Land Rover Vehicles in
accordance with its best judgment for
maximum sales benefit, will at all times
make the distribution fair and equitable
and will consider Dealer preferences
recognizing the variances in regional
sales performance and taking into
consideration Dealer investment and
performance. Company will provide
Dealer with a written explanation of the
allocation methods. Dealer agrees that
distribution includes Dealer accepting a
representative selection of all Company
models and color and trim specifications
for all Land Rover Vehicles.
Inventory 3.9 Subject to Company's ability to
deliver, Dealer will maintain a pre-
agreed level of inventory of Land Rover
Vehicles amounting to sixty (60) days
sales of each model based on Dealer's
annual objective. The parties agree
that such inventory is reasonable in the
circumstances. Such inventory level
will be subject to adjustment based on
actual sales and projections made by the
Company.
Demonstrators 3.10 Dealer will maintain a specific
number of Land Rover Vehicles for
demonstration purposes and shall at all
times keep such vehicles in clean,
first-class working condition and shall
register such vehicle as demonstrator
with Company. The specific number
required will be based on volume and
subject to adjustment annually. One (1)
vehicle for each model must be available
at Dealer's Premises during normal
business hours.
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ARTICLE 4 - PRIMARY AREA OF
RESPONSIBILITY/FACILITIES
Description 4.1 Dealer and Company have agreed that
Dealer is responsible for actively
marketing, promoting, selling and
servicing Land Rover Products in a
professional manner, that will enhance
the image and reputation of Land Rover
Products and all dealers of Land Rover
Products, within a geographic territory
referred to as the Dealer's Primary Area
of Responsibility ("PAR"). Dealer's
PAR, more fully described in attached
Primary Area of Responsibility Exhibit,
contains sufficient potential for sales
and service of Land Rover Products to
justify the investment Dealer has made
and agrees to continue to make to
profitably develop the market. Dealer
agrees to devote the necessary
resources, including advertising, market
research, promotional events and sales
and service activities to the
development of this market. In the case
of a Land Rover Centre, Dealer will
devote all of its resources to the
development of the PAR.
Exclusivity of Territory 4.2 In consideration of Dealer's
devoting and continuing to devote the
resources necessary to develop the
Primary Area of Responsibility, Company
agrees that it will not locate another
dealer of Land Rover Products within
Dealer's Primary Area of Responsibility.
In the event Dealer fails to develop the
Primary Area of Responsibility, or to
complete any remodeling or expansion to
the Dealer Premises, or addition of
other facilities, as agreed to meet
demand and achieve and maintain customer
satisfaction, or reduces the amount of
the Dealer Premises described in the
Dealer Facilities and Location Exhibit
dedicated to Land Rover Products or, in
the case of a Land Rover Centre, begins
conducting any other
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type of business at the premises other
than that devoted to Land Rover Products
exclusively, Company may, at its sole
option, either terminate this Agreement,
or reallocate the Primary Area of
Responsibility to match Dealer's
Premises as they have been revised or
reduced.
Facilities Location 4.3 Dealer Premises requirements and
location(s) are more fully described in
the attached Dealer Facilities and
Location Exhibit. Dealer agrees to
conduct operations from such facilities
and none other.
Facilities Design 4.4 Dealer fully recognizes and agrees
that part of the success of the sale of
Land Rover Products is the provision of
a unique retail experience to Owners and
Customers. This unique experience,
while made up of many elements, is
symbolized by a consistent, recognizable
design and layout. The overall approach
to the design and its elements have been
jointly developed by Company and Dealers
to be instantly recognizable as a
facility that is customer friendly and
yet efficient to operate. Therefore,
Dealer agrees not to alter the design,
layout, space allocation or other part
of the retail environment from that
described in the Dealer Facilities and
Location Exhibit unless specifically
agreed with Company in advance and
further agrees to develop future
facilities in accordance with the plans
and specifications provided by Company
recognizing local restrictions as to
signage, design, building
specifications, etc.
ARTICLE 5 - CUSTOMER RELATIONS AND
RETENTION
Satisfaction 5.1 Customer satisfaction is the key to
the development and maintenance of a
unique retail
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environment. Dealer will provide
prompt, professional, considerate
service to all Owners of Land Rover
Products, regardless of the selling
dealer and recognizes that Dealer's
obligations of training, supply of spare
parts and service capacity are the
foundation to satisfactory Customer
relations. Dealer agrees to participate
in Company's programs to measure and
improve Customer Satisfaction.
Dealer Complaint Resolution 5.2 Dealer will investigate and resolve
in a manner satisfactory to Company all
complaints by Owners of Land Rover
Vehicles in a prompt and businesslike
fashion. Any complaint which Dealer
cannot remedy promptly shall be reported
to Company and Dealer will keep Company
informed of progress on its resolution
of such problems. Dealer will at all
times of operation designate one
employee at the Dealer Premises whose
responsibility shall be Customer
relations and will serve as the
interface with the Company on the
resolution of any Customer complaints.
Dealer and Company will develop remedial
programs as necessary to improve Dealer
rating in Customer satisfaction and
Dealer will implement these Programs.
ARTICLE 6 - DEALER PERFORMANCE,
OPERATIONS AND PERSONNEL
Performance 6.1 On an annual basis, Company and
Dealer will agree on sales, service and
customer satisfaction goals and
objectives for Dealer. The parties
intent in setting such goals and
objectives is to provide a continuing
incentive to achieve the highest
standard of excellence among all dealers
of Land Rover Products and to reconfirm
on an ongoing basis Company's and
Dealer's joint commitments to
maintaining those high standards in all
aspects of Dealer's operations. The
criteria for setting the goals
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and objectives will include comparisons
with other dealers of Land Rover
Products and dealers of competing
models.
Reports 6.2 Dealer agrees to maintain books and
records of account in accordance with
accepted accounting principles and
provide Company with financial
statements and other operating reports
in a format supplied by Company. Dealer
will transmit such accounts and records
on the data processing system selected
by Company separate from the accounts,
reports, etc., required by any
organization with which Dealer may have
a relationship, so as to reflect Land
Rover business on a stand alone basis.
At a minimum a Dealer operating a shared
facility will report Land Rover revenues
separately and by category and allocate
expenses on a reasonable and consistent
basis which will be described to
Company.
Time of Reporting 6.3 Dealer will deliver on or before
the tenth (10th) day of each calendar
month the required financial statements
for the preceding month and year-to-
date, and within ninety (90) days of the
close of Dealer's fiscal year, a
consolidated balance sheet and a profit
and loss statement for the Dealer as a
whole and for Land Rover Products.
Company may require such year-end
statement to be certified by a Certified
Public Accountant, at Dealer's expense,
and will notify Dealer of such
requirement at least thirty (30) days
prior to the close of such fiscal year.
Financial Requirements 6.4 Dealer agrees to maintain and
employ in its operation at all times
financial resources sufficient to enable
Dealer to perform Dealer's obligations
under this Agreement. The resources
shall include the amounts of
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working capital, debt to equity ratio,
minimum net worth, new vehicle financing
and other financial resources which
Company requires. Company and Dealer
have reached agreement on certain
minimum acceptable financial
requirements applicable to Dealer and
such minimum standards are contained in
the Dealer Financial Requirements
Exhibit. The minimum requirements are
subject to adjustment from time to time
by Company on the basis of Dealer
performance.
General Manager 6.5 Dealer agrees to employ at all
times a fully qualified and trained
General Manager having principal
responsibility for the overall
management of Dealer to oversee the day-
to-day operations and designated as such
in the Dealer Ownership and Management
Exhibit. This person shall devote full
time and attention to the management of
Dealer's overall operation and shall
have full authority to make decisions
and act on behalf of Dealer with
Company. In the case of a Land Rover
Centre, the General Manager shall be
referred to as the Centre Manager and
his/her efforts will be directed
exclusively to the operation of the
Dealer's Land Rover Centre. Dealer
agrees to inform Company in writing of
any change in the name of the person
having such responsibility and
authority. No change shall be made or
be effective without the prior written
consent of Company, which consent will
not be unreasonably withheld. The
Dealer Principal may be designated
General Manager if he/she devotes full
time to the Dealer operations.
Sales Personnel 6.6 Dealer shall at all times employ a
sufficient number of fully trained and
qualified personnel to allow Dealer to
fulfill its sales obligations. At a
minimum, Dealer will continuously employ
one (1)
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fully trained sales representative for
Land Rover Vehicles who is acceptable to
Company and shall primarily sell Land
Rover Vehicles. The Land Rover Products
Sales Manager shall be authorized to
order Land Rover Products and approve
all transactions with customers in the
absence of the General Manager. The
total number of sales personnel employed
and their training requirements will be
determined by Company, based on sales
history and planning volumes.
Service Personnel 6.7 Dealer shall at all times employ a
sufficient number of fully qualified and
trained technicians, service advisers,
and other required personnel to fulfill
its service and customer relations and
customer retention obligations. Dealer
will continuously employ at a minimum,
one (1) factory trained technician, such
technician having attended training
courses conducted by Manufacturer at its
assembly plant at Solihull, England,
U.K., to repair and service Land Rover
Vehicles. The total number of service
personnel employed will be determined by
Company based on Dealer's sales history
and the number of other types of
vehicles the service personnel are to be
competent to repair.
Training 6.8 Dealer shall, at its own expense,
have its employees attend and complete
Company and Manufacturer provided
training courses in sales, service,
parts, warranty and computer systems
which shall be conducted from time to
time.
Parts Sales 6.9 Dealer will use its best efforts to
promote the sale of Land Rover Parts and
Accessories in Dealer's Primary Area of
Responsibility.
Parts Inventory 6.10 Dealer will maintain a three (3)
month supply of Land Rover
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Parts and Accessories at the Dealer
Premises in storage areas maintained
exclusively for such purpose. The
parties agree that such inventory level
is reasonable in the circumstances. The
adequacy of the supply of spare parts
and of the storage area will be
determined by Company.
Genuine Parts 6.11 In the performance of Warranty
service, Dealer will only use genuine
Land Rover Parts and Accessories
together with parts that have been
approved by Company so as not to
jeopardize the Owner's Warranty. Dealer
will maintain all required records so as
to track all repairs and warranty
service performed on a Land Rover
Vehicle. Dealer will not sell, offer
for sale or represent as genuine, Land
Rover Parts and Accessories which are
not in fact new, genuine Land Rover
Parts and Accessories.
Systems 6.12 Dealer will purchase, maintain and
upgrade as required a data processing
system, together with related software
and telecommunications as specified by
Company for use exclusively with Land
Rover Products. Dealer will employ
fully qualified data entry and operating
personnel to update all information as
required, adhere to Company provided
operating practices and procedures, and
generally employ the system to the
maximum effective advantage of Company
and Dealer. The system called for will
serve as Dealer's primary link with
Company and be used for vehicle and
parts ordering, warranty claims
processing, filing of reports,
information storage and retrieval, sales
reporting, etc. The purchase will be
made from Company to assure uniformity
of hardware and software throughout
Company's network of Dealers. Dealer
will at all times keep the system
confidential
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including the software and data stored
therein.
Compliance with Law 6.13 Dealer will, at all times,
maintain current and valid all licenses
required for operation of the Dealer and
occupancy of the Dealer Premises and
will adhere to all applicable laws,
rules, regulations and codes relating to
the conduct of the business. In
addition, Dealer will comply with all
applicable provisions of the National
Traffic and Motor Vehicle Safety Act of
1966, the Federal Clean Air Act and
Magnusson-Moss Warranty Act, all as
amended including regulations issued
thereafter, together with any other
Federal, state and local and vehicle
emission, safety and warranty
legislation.
Operating Hours 6.14 Dealer will open the Dealer
Premises for business during such hours
as other dealerships in the vicinity are
customarily open.
Service 6.15 Dealer will designate a separate
service area for the repair and service
of Land Rover Vehicles, including the
installation of special lifting
device(s), and keep and make use of a
full complement of Company specified
tools and equipment. The size of the
service area dedicated to Land Rover
Products will be a function of Dealer's
sales and service volumes. All Company
required shop manuals and training
manuals shall be complete and up-to-date
at all times.
Vehicle Inspection 6.16 Company will specify a system of
inspection and services to be completed
on all Land Rover Vehicles sold by the
Dealer prior to their delivery to the
Owner and Dealer will keep records
required by Company to establish the
performance of such inspection and
services.
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ARTICLE 7 - OBLIGATION OF COMPANY TO
DEALER
Sales and Service Support 7.1 To assist Dealer in the promotion,
sales and service of Land Rover
Products, Company will provide, or cause
to be provided to the Dealer the
following:
7.1.1 General and specialized
product information and trained
field assistance to respond to
inquiries, train Dealer sales
personnel and provide special
advice and counsel with respect to
sales and marketing strategies,
techniques and organizations.
7.1.2 Trained field assistance to
respond to inquiries, train Dealer
service personnel and provide
advice and counsel with respect to
maintenance and repair of Land
Rover Vehicles and operations and
managerial advice and assistance on
parts and service organizations.
7.1.3 A spare parts supply depot.
Supply of Materials 7.2 At reasonable cost to Dealer,
Company will also provide:
7.2.1 Sales training courses for
Dealer personnel and refresher
courses for previously trained
Dealer personnel as well as updates
on product development.
7.2.2 Service and maintenance
training courses for Dealer
personnel in all aspects of
inspection and preparation prior to
sale, Warranty claims and repairs
and other service and repairs
including training
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at the Manufacturer's facilities
together with refresher and
supplemental training courses at
Company's facilities.
7.2.3 Manuals on operating
procedures, including updates on
service and parts information.
Brochures, special tools and
equipment and other data on Land
Rover Products as required for
performing the Dealer obligations
are under.
7.2.4 A data processing system to
communicate and transmit
information, orders, reports,
claims, etc., between Dealer and
Company in a timely fashion.
National Advertising 7.3 Company will develop a marketing
program for each model of Land Rover
vehicles that will position each product
in the market place and provide
consistent high quality advertising on a
national level, as well as materials
useful for the individual Dealers at the
local Level.
ARTICLE 8 - OWNERSHIP, SUCCESSION,
TRANSFER AND ASSIGNMENT
Ownership 8.1 Dealer has provided Company with a
description of the ownership of Dealer,
including names, addresses, percentage
of ownership and description of holdings
of all individuals and/or business
entities (corporation, partnership,
etc.) with direct ownership in Dealer
and said information is contained in the
Dealer Ownership and Management Exhibit.
Dealer recognizes that Company has
entered into this Agreement on the basis
of and in reliance on the
representations contained in such
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Exhibit. Dealer will not make or agree
to any changes in ownership from that
described in such Exhibit, except in the
instances of 8.2 and 8.3 below.
Death of the Dealer
Principal 8.2 Upon the death of the Dealer
Principal:
8.2.1 If the ownership interest of
the Dealer Principal in Dealer
passes as specified in a written
succession agreement previously
approved by Company in writing and
the management of Dealer remains in
the persons named in the Dealer
Ownership and Management Exhibit,
or in such written succession
agreement, Company will enter into
a new Dealer Agreement with such
named approved successor and the
process of 8.2 will not apply; or
8.2.2 If no written succession
agreement has been approved by
Company but the ownership interest
in Dealer of such Dealer Principal
passes directly to the surviving
spouse and the children, or any of
them, of the Dealer Principal and,
either Dealer's General Manager
remains as stated in the Dealer
Ownership and Management Exhibitor,
or within ninety (90) days after
the death of such Dealer Principal,
a successor General Manager is
appointed in accordance with
Article 6.5 and the other
management of Dealer remains as
stated in the Dealer Ownership and
Management Exhibit, then Company
will enter into a new Dealer
Agreement with Dealer for a period
of twelve (12)
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months. After the expiration of
this twelve (12) month period,
Company will review with Dealer the
changes, if any, in the management
or equity interest of Dealer
required by Company as a condition
of entering into a new Dealer
Agreement with Dealer.
8.2.3 Any new Dealer Agreement
entered into pursuant to this
paragraph will be in substantially
the same form as the Dealer
Agreement then currently offered by
Company to its other dealers.
8.2.4 Unless one of the above
provisions is complied with, the
death of the Dealer Principal will
result in the immediate termination
of the Dealer Agreement and the
provisions of Article 13, Effects
of Termination, will apply.
Company's Right of First
Refusal 8.3.1 Upon completion and signature of
any buy/sell or other transfer
agreement, Dealer will provide a copy of
the complete buy/sell documentation to
Company. Such buy/sell documentation
should contain all the necessary terms
and conditions to effect a complete,
enforceable contract with the
prospective purchaser. The Company will
have thirty (30) days from the receipt
of such full buy/sell documentation to
advise Dealer if it intends to exercise
its right of first refusal.
8.3.2 In the event Company elects to
exercise its right of first refusal, the
purchase price shall be that amount
contained in the
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buy/sell agreement, subject to any
adjustments for inventory and other
offsets plus any offsets that are
Company specific. Company shall
reimburse Dealer for any brokerage
commission contractually incurred by
Dealer in securing the prospective
purchaser and shall reimburse Dealer for
any other cost reasonably incurred by
Dealer in the negotiation of the
buy/sell agreement. Such costs may
include attorney's fees, accounting fees
and appraisal fees incurred by the
prospective buyer, so long as such
services benefit company in the
evaluation of the transaction, and any
other services which Company would have
otherwise had to perform and is not
obligated to re-perform and which Dealer
remains obligated to pay if Company does
not exercise the right of first refusal.
8.3.3 Once Company has elected to
exercise its right of first refusal, it
may assign such right to another.
However, Company shall remain
responsible to guarantee such assignee's
performance of the buy/sell agreement.
8.3.4 This provision will not apply to
a disposition with a member of the
Dealer Principal's immediate family
(spouse, child, brother, sister,
parent), to an individual named in the
succession addendum prepared pursuant to
the provisions of the Transfer in the
Event of Death of the Dealer provisions
in Article 8.2.1 of this Agreement, or
to an individual listed in the Ownership
and Management Exhibit who has been so
listed for the three previous years and
who is otherwise qualified to be a
Dealer Principal.
8.3.5 Company's rights under this
provision shall survive the filing of
any bankruptcy or insolvency proceeding
contemplated by section 12.5 hereof.
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Assignment 8.4 This Agreement may be freely
assigned by Company. This Agreement may
not be assigned or transferred in whole
or in part by Dealer.
ARTICLE 9 - WARRANTY
Company Warranty 9.1 The only warranty applicable to
Land Rover Products will be the written
Warranty as may be furnished by Company.
Except for the express liability
undertaken under such written Warranty,
Company neither assumes nor authorizes
any other person or party to assume any
other obligation or liability in
connection with Land Rover Products.
Provision of Warranty 9.2 Company will supply Dealer with a
copy of such written Warranty and Dealer
will supply a copy of such Warranty to
each customer of Land Rover Vehicles or
Land Rover Parts and Accessories as
applicable at the time of sale. Dealer
will also maintain a supply of Warranty
booklets to provide to Customers at
their request. Dealer will make all
sales in a manner so that Owner acquires
all rights under the Warranty and Dealer
will incorporate the terms of the
Warranty as part of each order form and
other contract for sale of Land Rover
Products by Dealer.
Delivery to Customer 9.3 Upon delivery to an Owner of a Land
Rover Vehicle, Dealer will also deliver
a completed Warranty booklet, supplied
by Company with each Land Rover Vehicle.
Upon presentation of a Warranty booklet
by an Owner, Dealer will perform the
required warranty services for the
appropriate Warranty period and properly
document its performance in the Owner's
Warranty booklet as well as in the
Dealer's own record.
Warranty Services 9.4 Dealer will perform repairs and
service required by Company's
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Warranty on any and all Land Rover
Vehicles for which a Manufacturer's
Certificate of Origin is issued by
Company, whether such vehicle was
purchased from Dealer or another Company
dealer. Dealer will perform all its
Warranty obligations hereunder in
accordance with the Company's then
current policy on Warranty and service
procedures. Dealer further agrees to
perform any and all recall and product
improvement services in compliance with
instructions and directions issued by
Company on such vehicle.
Payment for Warranty
Services 9.5 Company will compensate Dealer for
the labor and parts used by Dealer in
performing its Warranty obligations and
in connection with any recall, product
improvement or product update campaign
which Company may require Dealer to
perform. Such compensation shall be in
reasonable amounts as published from
time to time by Company in accordance
with industry practices and based on
warranty labor rates and hours and parts
prices determined by Company to perform
such work.
Limited Warranty 9.6 EXCEPT AS EXPRESSLY STATED IN THIS
ARTICLE 9, COMPANY MAKES NO WARRANTIES
WHATSOEVER, EXPRESS OR IMPLIED, AS TO
PERFORMANCE, CHARACTERISTICS,
SPECIFICATIONS, OR CONDITION OF LAND
ROVER PRODUCTS TO BE SUPPLIED BY IT TO
THE DEALER, INCLUDING BUT NOT LIMITED
TO, THE MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE AND ASSUMES NO
LIABILITY WHATSOEVER WHETHER FOR DIRECT,
INDIRECT, OR CONSEQUENTIAL DAMAGES, OR
IN ANY OTHER WAY IN CONNECTION WITH SUCH
PERFORMANCE, CHARACTERISTICS,
SPECIFICATIONS OR CONDITION AND
COMPANY'S MAXIMUM LIABILITY IS TO REPAIR
OR, AT COMPANY'S OPTION, REPLACE THE
LAND ROVER PRODUCT.
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ARTICLE 10 - INDEMNIFICATION
Indemnity by
Company 10.1 Company will indemnify and hold
Dealer harmless against any judgment,
which may be rendered against Dealer,
including court costs and reasonable
attorney fees in any litigation
commenced by third parties seeking
monetary damages naming Dealer as a
defendant concerning,
(i) breach of any Company Warranty on
any Land Rover Product;
(ii) bodily injury, death or property
damage claimed to be caused by a defect
in the design, manufacture or assembly
of a Land Rover Product prior to
delivery thereof to Dealer (except a
defect which could have been detected by
Dealer on a reasonable inspection);
(iii) a misrepresentation or misleading
statement made by Company;
(iv) a failure by Company to comply in
whole or in part with any obligation
assumed by Company pursuant to the
Agreement.
10.2 Company will not be obligated to
indemnify Dealer if the above conditions
apply but in addition:
(i) Dealer error or omission in
servicing (including but not limited to
Dealer not having performed recalls of
which Dealer had notice) if the defect
subject to the recall is alleged or
contended to be a contributing cause to
the breach of warranty, injury, death or
property damage which is the subject
matter of the litigation;
(ii) the subject Land Rover Product has
been altered by or for Dealer in a
manner using components not approved by
Company and the
24
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alteration, in whole or in part,
contributes to the incident or injury
that results in the litigation; or
(iii) the alleged defect should have
been detected by Dealer, either as a
result of the Pre-Delivery inspection
called for under this Agreement, or upon
a reasonable inspection.
10.3 Dealer will refund to Company any
amount previously paid by Company for
providing a defense, or any indemnity
payment, if after undertaking to provide
a defense or indemnity, the facts
described in 10.2 are disclosed.
Notification of Claim 10.4 Dealer will promptly notify Company
of any claim within the provision of
10.1 above which Dealer asserts Company
must defend. Dealer will take steps
necessary to protect its own interests
until Company assumes the defense of
Dealer. Upon assuming the defense,
Company will retain and direct counsel
of its own choosing and Dealer will
cooperate in all matters during the
course of the defense.
Indemnity by Dealer 10.5 Dealer will indemnify and hold
Company harmless against any judgment
which may be rendered against Company,
including court cost and reasonable
attorney fees, in any litigation
commenced by third parties seeking
monetary damages, naming Company
concerning:
(i) a failure by Dealer to comply in
whole or in part with any obligation
assumed by Dealer pursuant to this
Agreement;
(ii) Dealer's negligent or improper
repair or service of a Land Rover
Vehicle, including the use of non-
genuine Land Rover Products;
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(iii) Dealer's breach of any agreement
between Dealer and Dealer's Customer;
(iv) Dealer's misrepresentation or
misleading statement to any Customer.
(v) the breach of any warranty, service,
financing or other agreement provided by
Dealer to an Owner and to which Company
is not a party or the provider.
ARTICLE 11 - COMMUNICATIONS AND
DISPUTES
Communications 11.1 The parties agree that in order to
perform at their utmost capability and
to complete effectively in the
marketplace with other manufacturers and
dealers of motor vehicles and provide
the level of Customer satisfaction and
Owner experience that is desired, it is
imperative that Dealer and Company
maintain an open forum with respect to
communications. Company agrees to keep
Dealer advised of plans for future
product and development of the franchise
on an ongoing basis and to address
itself to Dealer concerns. Dealer
agrees to apprise Company of any concern
Dealer has with respect to the ongoing
business and seek to resolve any
concerns or issues by direct, open
communication.
Disputes Resolution 11.2 While the parties agree to seek to
resolve any dispute that may arise
between them at the operational level,
nonetheless the parties recognize that
disputes may arise concerning compliance
with the Agreement and the rights and
obligations of the parties under this
Agreement. The parties agree to attempt
to resolve all such disputes and
differences through good faith
negotiation. However, in the event the
dispute cannot be resolved, the parties
agree to submit such dispute to the
Dispute
26
<PAGE>
Resolution Process ("Process"). This
will be an ongoing, developing Process
prepared and revised jointly by Company
and Dealer on a continuing basis so as
to provide an efficient method, both in
terms of time and expense, of resolving
disputes. The Process will include the
services of a third party facilitator
and the parties agree to share the costs
of the facilitator and to share the
expense of any non parties who agree to
assist in mediating the dispute,
including other dealers and employees of
Company. The parties agree that
referral of any dispute to the Dispute
Resolution Process is mandatory.
However, the outcome of the Process is
not binding except that the parties may
agree to accept all or part of the
results of the Process as a settlement
at any time during the course of the
Process.
ARTICLE 12 - TERMINATION
By Agreement 12.1 This Agreement may be terminated at
any time by the mutual agreement of the
parties.
By Dealer 12.2 Dealer may terminate this Agreement
by giving to the Company prior written
notice specifying the effective date of
termination, provided that the effective
date of such termination shall not be
earlier than thirty (30) days after such
notice of termination has been received.
By Company on Fifteen
(15) Days Notice 12.3 Company may terminate this
Agreement on fifteen (15) days written
notice to Dealer upon the occurrence of
any of the following events:
12.3.1 Dealer's relocation of the
Dealer Premises without the prior
written approval of Company.
27
<PAGE>
12.3.2 Dealer's attempted
assignment or transfer of the
Agreement in violation of
Article 8.1.
12.3.3 The purported transfer of
any ownership interest in violation
of Article 8.4.
12.3.4. Cancellation, suspension
or revocation of any license,
permit, etc., necessary for the
operation of Dealer's business at
the Dealer Premises or Dealer's
failure to secure or renew such
license, permit, etc., within the
above period of time.
12.3.5 Failure of the Dealer
Premises to operate as a going
concern during the normal business
hours customary for automobile
dealerships in the Primary Area of
Responsibility for a period of
seven (7) consecutive business
days, so long as such failure is
not due to causes enumerated in
Article 14.8.
12.3.6 The making of any material
misrepresentation in Dealer's
application for the right to sell
Land Rover Products or relating to
ownership of Dealer.
12.3.7 The submission to Company of
any false or misleading financial
statement, sales report, Warranty
claim, sales incentive or promotion
payments or other request for
reimbursement or payment or any
other form or status report
required by Company's business
practices.
12.3.8 Conviction of Dealer or any
of the individuals named in the
Dealer Ownership and Management
Exhibit of any criminal offense
which, in the sole opinion of
Company, harms
28
<PAGE>
the business image of Land Rover
Products, or adversely affects
Dealer operations.
12.3.9 Cancellation, without
concurrent replacement, of any
credit line, floor plan financing
or other financing facility.
By Company on Ninety
(90) Days Notice 12.4 Company may terminate this
Agreement upon ninety (90) days written
notice if, after receipt of such notice,
Dealer has not corrected the failure(s)
stated in such notice within the ninety
(90) day period or, if not capable of
correction within such period, commenced
and diligently prosecuted a remedy to
correct such failure satisfactory to the
Company for any of the following events:
12.4.1 The failure by Dealer to
provide the level of
representation, promotion, sales or
service of Land Rover Products
required under the terms of this
Agreement.
12.4.2 Dealer's use of deceptive or
misleading practices in the sale of
Land Rover Products as the supply
of service to customers.
12.4.3 The failure to maintain
and/or to improve the Dealer
Premises as reasonably required by
Company to enhance the sales and/or
service capability of Dealer for
Land Rover Products or Dealers
reducing the space in the Dealer
Premises from that described in the
Dealer Facilities and Location
Exhibit without Company's prior
written agreement.
12.4.4 The failure to maintain or
restore working capital or other
financial criteria to
29
<PAGE>
amounts and ratios required by
Company.
12.4.5 Use of unauthorized
advertising as prohibited herein.
12.4.6 Late or incorrect submission
of reports required herein.
12.4.7 Excessive turnover of
personnel in any department in
Dealer's operations for Land Rover
Products resulting in, or likely to
result in, deterioration of
Customer relations or service.
12.4.8 The existence of any dispute
amongst Dealer's owners and/or
management personnel which, in
Company's sole opinion, could
impair, or has impaired, the
operations of Dealer with
consequent adverse effect on
relations with Customers of or for
Land Rover Products.
12.4.9 The failure of Dealer to
adhere to the legal requirements
called for in Article 6.11 hereof.
12.4.10 The importation,
distribution or sale of Land Rover
Vehicles not originally
manufactured or designed for use in
the United States.
12.4.11 Any breach of another
material obligation of this
Agreement.
12.4.12 Termination of Company's
distributorship agreement with
Manufacturer, or Company's decision
to cease distribution of Land Rover
Products.
12.4.13 Withdrawal of Company from
the market area
30
<PAGE>
designated as Dealer's Primary Area
of Responsibility.
Immediate Termination 12.5 Company may terminate this
agreement automatically and without
notice upon any act acknowledging the
insolvency or bankruptcy of the Dealer,
or any assignment for the benefit of
creditors or the filing of any
bankruptcy, reorganization or insolvency
proceedings, either voluntarily or
involuntarily, or the appointment of a
receiver of Dealer or the Dealer
Premises which is not removed within
(30) days of such filing or appointment.
Death of
Dealer Principal 12.6 Death of the Dealer Principal named
in the Dealer Ownership and Management
Exhibit will result in the immediate
termination of this agreement unless the
provisions of Article 8.2 apply.
ARTICLE 13 - EFFECTS OF TERMINATION
Cessation 13.1 Upon receipt of Company's notice of
termination, or the mailing of Dealer's
notice of termination to Company, or
upon expiration of the term of this
Agreement without renewal, Dealer will
immediately cease to be, or act as an
authorized dealer of Land Rover
Products, will no longer make use of any
Land Rover trademark and will
immediately remove all signs, displays,
etc., advertising itself as such.
Non-use of Land Rover
Identification 13.2 Dealer will inventory, package and
ship all Land Rover books, manuals,
etc., to Company at Dealer's expense and
will destroy any and all Dealer
letterhead, business cards, business
forms, etc., indicating Dealer's
previous status as a Dealer of Land
Rover Products.
Outstanding Orders 13.3 The Company may cancel any unfilled
orders for Land Rover Products upon its
receipt of
31
<PAGE>
Dealer's notice of termination even if
previously accepted by Company. The
Company may, at its sole option, accept
orders or conduct business with Dealer
after the effective date of termination.
All such orders or business operations
will be under the same terms and
conditions as this Agreement. The
conduct of any business after
termination or expiration shall not
serve as a waiver or modification of the
termination, or serve to extend the term
of this Agreement.
Repurchase 13.4 Company, subject to Dealer
fulfilling its obligations under this
Article 13, will repurchase form Dealer:
(a) all current model, new, unused,
undamaged Land Rover Vehicles at the net
cost of that vehicle to the Dealer less
the cost of freight, insurance, etc., or
transfer the subject vehicles(s) to
Company or another dealer; (b) all
current, new, properly packaged and
itemized Land Rover Parts and
Accessories at Dealer's net cost of the
item(s), less freight, insurance, etc.,
to Company's warehouse and less a
restocking charge of twenty percent
(20%); (c) special tools, equipment and
signs for Land Rover Products properly
maintained in good working order and
repair, less than five (5) years old at
Dealer's cost less straight line
depreciation of five (5) years useful
life.
Transfer of Title 13.5 Dealer is to take all such action
as may be necessary to: (a) convey good
and marketable title to all such
property to the Company, (b) comply with
the requirements of any applicable state
law relating to bulk sales or transfers
and (c) satisfy and discharge any liens
or encumbrances on the property prior to
delivery to Company.
Inventory 13.6 Within fifteen (15) days of the
receipt by Dealer of the notice of
termination by Company, or
32
<PAGE>
Dealer's issuance of a notice of
termination to Company, or the
expiration of this Agreement, Dealer
will deliver to Company a complete
inventory of all the above items, or
reimburse Company for the cost of
Company preparing such an inventory.
Reconciliation 13.7 As a condition of repurchase,
payments will first be applied against
any money owed by Dealer to Company.
All payment due from Company to Dealer
pursuant to any provisions of this
Agreement or in connection with the
termination of this Agreement will be
made by Company after receipt of the
goods to be repurchased and after all
debits and credits have been ascertained
and applied to Dealer's account and
Dealer has delivered to Company the
Manufacturer's Certificate of Origin or
other document of title for repurchase.
In the event it is found that a balance
is due from Dealer to Company, Dealer
will pay such sum within ten (10) days
of written notice of such Balance.
ARTICLE 14 - MISCELLANEOUS
Independent
Contractor 14.1 Dealer, for all purposes of this
Agreement, is an independent contractor
and Dealer is not the agent or
representative of Company or its
affiliates for any purpose. No other
contractual relationship exists between
Dealer and Company and Dealer have no
contractual relationship with
Manufacturer. Dealer is not granted any
express or implied right or authority to
assume or create any obligation on
behalf of or in the name of Company or
to bind Company in any manner
whatsoever.
Applicable Law 14.2 This Agreement shall be deemed to
be executed by the parties in the state
where the Dealer Premises is located and
the rules of law of that
33
<PAGE>
state govern all questions regarding its
construction and interpretation except
to the extent that stated public policy
of the state where the Dealer Premises
is located shall prohibit any particular
provisions, in which event Article 14.3
shall apply.
Severability 14.3 In the event any provision of this
Agreement is declared unenforceable
under laws of any state, or federal law
enforceable at the time of the execution
of this Agreement, or requires a longer
notice period than called for herein,
the offending provision shall be
reformed in a manner consistent with
such law to the minimum extent required
while continuing to reflect the
allocation of risks and obligations of
the parties hereto. Such declaration
shall not impair or affect the validity
of any other provision in this Agreement
and all such other provisions shall
remain valid and in full force and
effect.
Entire Agreement 14.4 This Agreement contains the entire
agreement between Dealer and Company and
Dealer acknowledges that no
representation or statement has been
made by Company, or anyone acting or
purporting to act for Company that in
any way modifies or changes any terms of
this Agreement and acknowledges that
there is no other agreement or
understanding between the parties,
except as stated herein. This Agreement
cancels, supersedes and annuls any prior
contract, agreement or understanding
between Company and Dealer.
Modification 14.5 No provision of this Agreement may
be changed, amended or deleted except by
the written agreement of authorized
officers of the parties hereto. Without
limiting the foregoing, no course of
dealing will alter the terms of this
Agreement.
34
<PAGE>
Waivers 14.6 The waiver by either party of any
breach of this Agreement, or the failure
of either party to require performance
by the other party of any provision
herein shall not affect the rights of
either party to require performance at
any time thereafter, nor be deemed a
waiver of a subsequent breach of the
same or another provision.
Notices 14.7 Any notice, notification, etc.,
made pursuant to this Agreement shall be
directed to the address of the principal
place of business of the respective
parties of this Agreement. All notices
required will be sent certified mail,
return receipt requested, to the address
reflected in the Agreement for each
party.
Force Majeure 14.8 Performance by each party of their
respective obligations under this
Agreement is subject to those
contingencies which are beyond the
reasonable control of the parties,
including labor disputes or work
stoppage, product delivery delays,
governmental action or inaction, acts of
God and events of force majeure. The
obligations of the party prevented from
performing by virtue of the above shall
be suspended during such contingency
without liability to the other for any
direct or indirect damage and without
extending the term of this Agreement.
Continuity of Supply 14.9 Nothing in this Agreement shall
give Dealer the right to continue to be
supplied with Land Rover Products, which
may at any time be withdrawn or
suspended from importation and sale into
the United States without any obligation
or liability on the part of Company by
reason thereof. Nothing in this
Agreement gives Dealer the right to sell
any products other than Land Rover
Products.
35
<PAGE>
Additional Dealers 14.10 Subject to the provisions of
Article 4 hereof, Company reserves the
right to appoint additional dealers upon
making a survey of marketing factors in
the area of a potential new dealer
location. The final decision whether to
establish an additional dealer shall be
made solely by Company pursuant to its
own business judgment, and nothing in
this Agreement shall be construed to
require Dealer's consent to the
establishment of an additional dealer.
Titles 14.11 Titles and headings appearing in
this Agreement are for convenience only
and shall not affect the construction or
interpretation of any provisions of this
Agreement.
36
<PAGE>
October __, 1996
Steven Knappenberger
6725 E. McDowell Road
Scottsdale, Arizona 85257
George W. Brochick
6825 E. McDowell Road
Scottsdale, Arizona 85257
Jay Beskind
6905 E. McDowell road
Scottsdale, Arizona 85257
Re: Indemnification Agreement
All capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in that certain Stock Purchase Agreement between
United Auto Group, Inc., UAG West, Inc., Scottsdale Jaguar, Ltd., SA Automotive,
Ltd., SL Automotive, Ltd., SPA Automotive, Ltd., LRP, Ltd., Sun BMW, Ltd.,
Scottsdale Management Group, Ltd., 6725 Dealership, Ltd., Steven Knappenberger
Revocable Trust Dated April 15, 1983 as amended, Brochick 6725 Trust Dated
December 29, 1992, Beskind 6725 Trust Dated December 29, 1992, Knappenberger
6725 trust Dated December 29, 1992, Steven Knappenberger, Jay P. Beskind and
George W. Brochick Dated as of June 6, 1996, as thereafter amended (the "Stock
Purchase Agreement").
In consideration for the Stockholders entering into certain amendments
to the Stock Purchase Agreement:
1. Scottsdale Jaguar shall indemnify and hold the Stockholders
harmless from any Costs arising out of any claim by Jaguar Cars ("Jaguar") or
Aston Martin or any parent or affiliate against the Stockholders as a result of
or arising out of transactions and agreements between UAG West and Scottsdale
Jaguar, including that certain Management Agreement between UAG West and
Scottsdale Jaguar of even date herewith and that certain Lease Agreement between
Scottsdale Audi and Scottsdale Jaguar of even date herewith. This
indemnification is limited to claims by Jaguar or Aston Martin alleging that the
Stockholders are personally liable to Jaguar or Aston Martin and does not
include indemnification for any Costs incurred by Scottsdale Jaguar. UAG, UAG
West, Scottsdale Jaguar, and the Stockholders acknowledge and agree that there
can be no assurance that Jaguar or Aston Martin will continue the Jaguar
franchise currently held by Scottsdale Jaguar, Ltd. ("Scottsdale Jaguar").
<PAGE>
October ___, 1996
Page 2
2. Additionally, Scottsdale Jaguar shall indemnify and hold harmless
from, and promptly pay upon request to, each of the Stockholders and Mr.
Knappenberger (without regard to the limitations relating to Mr. Knappenberger
set forth on the signature page to the Stock Purchase Agreement) (collectively,
the "Indemnified Parties") any and all liabilities for Taxes incurred at any
time by one or more of the Indemnified Parties in connection with each and all
of the transactions contemplated by the Stock Purchase Agreement, as amended or
supplemented (as the case may be) by (1) that certain Amendment No. 1 to Stock
Purchase Agreement dated as of October __, 1996 ("Amendment No. 1"),. (2) that
certain Amendment No. 2 to Stock Purchase Agreement dated as of October __, 1996
("amendment No. 2"), (3) that certain Shareholders' Agreement dated as of
October __, 1996, (4) that certain Management Agreement dated as of October __,
1996 (the "Management Agreement"), (5) that certain Lease Agreement dated as of
October __, 1996, (6) any documentation reflecting the grant of an option with
respect to the stock of Scottsdale Jaguar, (7) any documentation relating to the
transfer by 6725 Dealership, Ltd. of its interest in 6725 Agent, an Arizona
general partnership, to Scottsdale Audi, Ltd., and (8) any and all additional
documentation or transactions amending or supplementing the provisions of the
Stock Purchase Agreement (the matters referred to in the preceding clauses (1)
through (8) hereafter collectively referred to as the "Additional Agreements"),
IN EXCESS OF the liabilities for Taxes which would have been due and owing by
the Indemnified Parties had the transactions contemplated by the Stock Purchase
Agreement been consummated without regard to the Additional Agreements.
3. Notwithstanding the foregoing, it is expressly provided that with
respect to the initial $100,000 of increased liabilities for Taxes of the
Indemnified Parties collectively attributable to (a) the acquisition of 19% of
the stock of SK Motors, Ltd., an Arizona corporation, by the Knappenberger Trust
in accordance with Amendment No. 1 and (b) the transfer of the Porsche Assets
and the Audi Assets by Scottsdale Jaguar to SK Motors, Ltd. and Scottsdale Audi,
Ltd. in accordance with Amendment No. 1 and Amendment No. 2 (excluding for such
latter purpose the transfer by Scottsdale Jaguar of Scottsdale Jaguar's interest
in 6725 Agent, an Arizona general partnership, to Scottsdale Audi, Ltd. (the
"Partnership Transfer")), the liability of Scottsdale Jaguar hereunder shall be
50% of the amount of increased liabilities for Taxes of the Indemnified Persons
collectively attributable thereto.
4. Anything hereinabove to the contrary notwithstanding, if, in
connection with either (a) the acquisition by the Knappenberger Trust of 19% of
the Porsche Shares (the "19% Shares") or (b) the Partnership Transfer, (i) the
Indemnified Parties, in conjunction with other transactions the subject hereof,
recognize income in excess of the income that
<PAGE>
October ___, 1996
Page 3
would have been recognized had the transactions contemplated by the Agreement
been consummated without regard to the Additional Agreements, (ii) payment is
made by Scottsdale Jaguar hereunder in connection with the resulting increased
liability for Taxes, and (iii) solely by reason of the recognition of such
income, the Indemnified Parties reduce their liability for Taxes payable in
connection with a subsequent disposition of the 19% Shares or the stock of
Scottsdale Jaguar (a "Disposition") to an amount smaller than would otherwise be
paid by the Indemnified Parties on such a Disposition, the Indemnified Parties
shall, promptly following any Disposition, pay to Scottsdale Jaguar the amount
by which its liabilities for Taxes in connection with such Disposition are
actually reduced. Anything in this paragraph to the contrary notwithstanding,
with respect to the initial $100,000 of reduced liabilities for Taxes in
connection with any Disposition of the 19% Shares, the liability of the
Knappenberger Trust to Scottsdale Jaguar pursuant to this paragraph shall be 50%
of the amount of any such reduction in liabilities for Taxes. It is expressly
provided herein that in determining the actual amount of the reduction of the
Indemnified Parties' liabilities for Taxes in connection with a Disposition, the
liabilities shall be determined by taking into account, to the extent
applicable, any basis adjustments occurring by reason of paragraph 7 below.
5. Anything hereinabove to the contrary notwithstanding, Scottsdale
Jaguar shall not be required to indemnify the Indemnified Parties for any
liability for Taxes arising out of or relating to (a) any dividends or other
distributions received by the Knappenberger Trust with respect to the 19%
Shares, (b) any consideration received by the Knappenberger Trust in connection
with a disposition of the 19% Shares, (c) any dividends or other distributions
with respect to the stock of Scottsdale Jaguar received by an Indemnified Party
following the Closing Date (excluding distributions of the consideration paid to
Scottsdale Jaguar by UAG West for the Porsche Shares, the Audi Shares, and the
Partnership Transfer), and (d) any consideration received by an Indemnified
Party in connection with the grant of an option on, or a sale or other
disposition of, the stock of Scottsdale Jaguar.
6. It is expressly provided herein that UAG and UAG West shall
guaranty the obligations of Scottsdale Jaguar set forth herein and, accordingly,
shall, at the direction of the Indemnified Parties, pay either to the
Indemnified Parties directly or to Scottsdale Jaguar, any portion of the
obligations of Scottsdale Jaguar set forth herein if Scottsdale Jaguar fails to
pay such obligations directly to the Indemnified Parties. It is further
expressly agreed that any amounts paid, at the direction of the Indemnified
Parties, by UAG or UAG West to Scottsdale Jaguar in accordance with the
preceding sentence, shall be immediately distributed by Scottsdale Jaguar to the
Indemnified Parties. The parties acknowledge and agree that
<PAGE>
October___, 1996
Page 4
(a) Scottsdale Jaguar shall make reasonable efforts to make such payments due
hereunder but that any such payments shall be subject to maintenance of
appropriate working capital levels and (b) UAG West may, to facilitate
Scottsdale Jaguar's ability to make such payments, defer the management fees due
under the Management Agreement; provided, however, that nothing herein shall be
deemed to limit the foregoing guaranty.
7. It is expressly agreed that any and all amounts paid by
Scottsdale Jaguar to the Indemnified Parties hereunder which occur within
Scottsdale Jaguar's "post-termination transition period" (within the meaning of
Section 1377(b)(1) of the Internal Revenue Code of 1986, as amended (the
"Code")) shall be treated by Scottsdale Jaguar as distributions within the
purview of Section 1368(e)(1)of the Code.
Sincerely,
SCOTTSDALE JAGUAR, LTD.
__________________________________
By:
Its:
UNITED AUTO GROUP, INC.
(with respect to the guaranty herein)
__________________________________
By:
Its:
UAG WEST, INC.
(with respect to the guaranty herein)
__________________________________
By:
Its:
<PAGE>
October ___, 1996
Page 5
ACCEPTED AND AGREED:
______________________________
Steven Knappenberger
STEVEN KNAPPENBERGER REVOCABLE
TRUST DATED APRIL 15, 1983,
AS AMENDED
By:___________________________
Steven Knappenberger, Trustee
______________________________
Jay P. Beskind
______________________________
Diana R. Beskind, Spouse of
Jay P. Beskind
______________________________
George W. Brochick
______________________________
Christine S. Brochick, Spouse
of George Brochick
BROCHICK 6725 TRUST DATED
DECEMBER 29, 1992
By:___________________________
Robert W. Wyndelts, Trustee
BESKIND 6725 TRUST DATED
DECEMBER 29, 1992
By:____________________________
Robert W. Wyndelts, Trustee
<PAGE>
October ___, 1996
Page 6
KNAPPENBERGER 6725 TRUST DATED
DECEMBER 29, 1992
By:____________________________
Robert W. Wyndelts, Trustee
<PAGE>
LEASE GUARANTY
The undersigned, in order to induce Charles F. Evans, an individual
resident of the state of Georgia ("Landlord") to enter into that certain Lease
Agreement (herein so called) dated as of October ___, 1996, between Landlord and
Charles Evans Nissan, Inc., a Georgia corporation (the "Company") and a
subsidiary of UAG Atlanta V, Inc., Inc., a Delaware corporation that is wholly
owned by the undersigned, hereby irrevocably guarantees the collection of all
rent and other obligations of the Company now or hereafter existing under the
terms of the Lease Agreement.
The undersigned hereby waives presentment, protest, notice of dishonor,
extension of time of payment and notice of acceptance of this Guaranty and
hereby consents to any and all forbearances and extensions of time of payment of
the obligations guaranteed hereby and to any and all of the changes in the
terms, covenants and conditions thereof hereafter made or guaranteed.
No delay or omission by Landlord in exercising any of its rights, remedies,
powers and privileges hereunder and no course of dealing between Landlord, on
the one hand, and the Company, the undersigned or any other person, on the other
hand, shall be deemed a waiver by Landlord of any of its rights, remedies,
powers and privileges, even if such delay or omission is continuous and
repeated; nor shall any single or partial exercise of any right, remedy, power
or privilege preclude any other or further exercise thereof by Landlord or the
exercise of any other right, remedy, power or privilege by Landlord. No notice
or demand on the Company, the undersigned or any other person in any instance
shall entitle the Company, the undersigned or any other person to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of Landlord's right to any other or further action in any circumstances
without notice or demand.
This Guaranty shall remain in full force and effect, and the undersigned
shall continue to be liable for the payment of the obligations under the Lease
Agreement in accordance with the terms of the Lease Agreement and this Guaranty,
notwithstanding the commencement of any bankruptcy, reorganization or other
debtor relief proceedings by or against the Company, and notwithstanding any
modification, discharge or extension of the obligations under the Lease
Agreement, any modification or amendment of the Lease Agreement, or any stay of
the exercise by Landlord of any of its rights and remedies against the Company
with respect to any of the obligations under the Lease Agreement.
Whenever possible, each provision of the Guaranty shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of the Guaranty shall be prohibited by or be invalid under such law,
such provisions shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
This Guaranty shall inure to the benefit of Landlord and his successors and
assigns, and shall be binding upon the undersigned and its successors and
assigns. This instrument constitutes the entire agreement as to the subject
matter contemplated hereby.
<PAGE>
This instrument shall be governed by the laws of the State of Georgia.
WITNESS the undersigned's signature as of the _____ day of October, 1996.
UNITED AUTO GROUP, INC.
a Delaware Corporation
By:
-----------------------------------
Its:
-----------------------------------
<PAGE>
NISSAN
DEALER TERM SALES AND SERVICE AGREEMENT
THIS AGREEMENT is entered into effective the day last set forth below by and
between the Nissan Division of NISSAN MOTOR CORPORATION IN U.S.A., a California
corporation, hereinafter called "Seller," and the natural persons and entities
identified in the Final Article of this Agreement.
INTRODUCTION
The purpose of this Agreement is to establish Dealer as an authorized dealer of
Nissan Products and to provide for the sale and servicing of Nissan Products in
a manner that will best serve owners, potential owners and purchasers of Nissan
Products as well as the interests of Seller, Dealer and other Authorized Nissan
Dealers. This Agreement sets forth: the rights and obligations of Seller and
Dealer that apply to Seller's grant to Dealer of such rights and Dealer's
assumption of such responsibilities. It is understood that Dealer wishes an
opportunity to qualify for a regular Nissan Dealer Sales and Service Agreement
for Nissan Products and understands that for that purpose Dealer first must
fulfill all of Dealer's undertakings hereinafter described.
This is a personal services Agreement. In entering into this Agreement and
appointing Dealer as provided below, Seller is relying, among other things, upon
the personal qualifications, expertise, reputation, integrity, experience,
ability and representations of the individual named in the Final Article of this
Agreement as Dealer Principal (the "Dealer Principal") and the individual named
in the Final Article of this Agreement as Executive Manager and the
representations of UAG Atlanta V, Inc., UAG and the Dealer. In addition to
Dealer, Seller intends to look to UAG Atlanta V, Inc., UAG, the Dealer Principal
and the Executive Manager for the performance of Dealer's obligations hereunder.
Nissan Products are intended for discriminate owners with the expectation that
such owners will be loyal and proud, but also demanding toward Seller and Dealer
with respect to Nissan Products and the manner in which they are sold and
serviced. Owners, potential owners and purchasers of Nissan Products are
expected to want, and are entitled to do business with, dealers who enjoy the
highest reputation in their communities and have well located, attractive and
efficient places of business, courteous personnel and outstanding service and
parts facilities. Nissan Products must be sold by enthusiastic dealers who are
not interested in short term results only but are willing to look toward long
term goals and who are devoted to creating and maintaining a positive total
ownership experience for owners of Nissan Products. Seller's standard of
excellence for Nissan Products must be matched by the dealers who sell them to
the public and who service them during their operative lives.
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Achievement of the purposes of this Agreement is premised upon mutual
understanding and cooperation between Seller and Dealer. Dealer has entered
into this Agreement in reliance upon Seller's integrity and expressed intention
to deal fairly with Dealer and the consuming public. Seller has entered into
this Agreement in reliance upon the integrity and ability of the Dealer
Principal and Executive Manager and their expressed intention to deal fairly
with the consuming public and Seller.
It is the responsibility of Seller to market Nissan Products throughout the
Territory. It is the responsibility of Dealer to actively promote the retail
sale of Nissan Products and to provide courteous and efficient service of Nissan
Products. The success of both Seller and Dealer will depend on how well they
each fulfill their respective responsibilities under this Agreement. It is
recognized that: Seller will endeavor to provide motor vehicles of excellent
quality and workmanship and to establish a network of Authorized Nissan Dealers
that can provide an outstanding sales and service effort at the retail level;
and Dealer will endeavor to fulfill its responsibilities through aggressive,
sound, ethical selling practices and through conscientious regard for customer
service in all aspects of its Nissan Dealership Operations.
Seller and Dealer shall refrain from engaging in conduct or activities which
might be detrimental to or reflect adversely upon the reputation of Seller,
Dealer or Nissan Products and shall engage in no discourteous, deceptive,
misleading or unethical practices or activities.
For consistency and clarity, terms which are used frequently in this Agreement
have been defined in Section 1 of the Standard Provisions. All terms used
herein which are defined in the Standard Provisions shall have the meaning
stated in said Standard Provisions. These definitions should be read carefully
for a proper understanding of the provisions in which they appear.
Principal and Executive Manager and their expressed intention to deal fairly
with the consuming public and Seller.
It is the responsibility of Seller to market Nissan Products throughout the
Territory. It is the responsibility of Dealer to actively promote the retail
sale of Nissan Products and to provide courteous and efficient service of Nissan
Products. The success of both Seller and Dealer will depend on how well they
each fulfill their respective responsibilities under this Agreement. It is
recognized that: Seller will endeavor to provide motor vehicles of excellent
quality and workmanship and to establish a network of Authorized Nissan Dealers
that can provide an outstanding sales and service effort at the retail level;
and Dealer will endeavor to fulfill its responsibilities through aggressive,
sound, ethical selling practices and through
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conscientious regard for customer service in all aspects of its Nissan
Dealership Operations.
Seller and Dealer shall refrain from engaging in conduct or activities which
might be detrimental to or reflect adversely upon the reputation of Seller,
Dealer or Nissan Products and shall engage in no discourteous, deceptive,
misleading or unethical practices or activities.
For consistency and clarity, terms which are used frequently in this Agreement
have been defined in Section 1 of the Standard Provisions. All terms used
herein which are defined in the Standard Provisions shall have the meaning
stated in said Standard Provisions. These definitions should be read carefully
for a proper understanding of the provisions in which they appear.
To achieve the purposes referred to above, Seller, UAG Atlanta V. Inc., Dealer,
the Dealer Principal and the Executive Manager agree as follows:
ARTICLE FIRST: Appointment of Dealer
Subject to the conditions and provisions of this Agreement, Seller:
(a) appoint Dealer as an Authorized Nissan Dealer and grants Dealer
the non-exclusive right to buy from Seller those Nissan Products specified in
Dealer's current Product Addendum hereto, for resale, rental or lease at or from
the Dealership Locations established and described in accordance with Section 2
of the Standard Provisions; and
(b) grants Dealer a non-exclusive right, subject to and in accordance
with Section 6.K of the Standard Provisions, to identify itself as an Authorized
Nissan Dealer, to display the Nissan Marks in the conduct of its Dealership
Operations and to use the Nissan Marks in the advertising, promotion and sale of
Nissan Products in the manner provided in this Agreement.
ARTICLE SECOND: Assumption of Responsibilities by Dealer
Dealer hereby accepts from Seller its appointment as an Authorized
Nissan Dealer and, in consideration of its appointment and subject to the other
conditions and provisions of this Agreement, hereby assumes the responsibility
for:
(a) establishing and maintaining at the Dealership Location the
Dealership Facilities in accordance with Section 2 of the Standard Provisions;
(b) actively and effectively promoting the sale at retail (and, if
Dealer elects, the leasing and rental) of Nissan
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Vehicles within Dealer's Primary Market Area in accordance with Section 3 of the
Standard Provisions;
(c) servicing Nissan Vehicles and for selling and servicing Nissan
Parts and Accessories in accordance with Section 5 of the Standard Provisions;
(d) building and maintaining consumer confidence in Dealer and in
Nissan Products in accordance with Section 5 of the Standard Provisions; and
(e) performance of the additional responsibilities set forth in this
Agreement, including those specified in Section 6 of the Standard Provisions.
ARTICLE THIRD: Ownership
(a) OWNERS. This Agreement has been entered into by Seller in
reliance upon and in consideration of, among other things, the personal
qualifications, expertise, reputation, integrity, experience, ability and
representations with respect thereto of the Dealer Principal and Executive
manager named in the Final Article of this Agreement and in reliance upon the
representations and agreements of UAG Atlanta V, Inc., UAG and the Dealer as
follows:
(i) UAG Atlanta V, Inc. will at all times own 100% of the
capital stock of Dealer and Dealer will at all times be maintained as a separate
entity.
(ii) The Executive Committee of Dealer is set forth in attached
Schedule "A".
(iii) The officers of Dealer are as set forth in attached Schedule
"A".
(iv) United Auto Group, Inc. ("UAG") owns 100% of the outstanding
stock of UAG Atlanta V, Inc. and Conyers Nissan, Inc., (see Attachment "A"
attached).
(b) CHANGES IN OWNERSHIP. In view of the fact that this is a
personal services agreement with the Dealer Principal and Executive Manager and
in view of its objectives and purposes, this Agreement and the rights and
privileges conferred on Dealer hereunder are not assignable, transferable or
salable by UAG Atlanta V, Inc. and Dealer, and no property right or interest is
or shall be deemed to be sold, conveyed or transferred to Dealer, UAG Atlanta V,
Inc. and Dealer under this Agreement. Dealer, UAG Atlanta V, inc., the Dealer
Principal and the Executive Manager agree that any change in the ownership of
Dealer, UAG Atlanta V, Inc. other than specified herein requires the prior
written consent of Seller [IF DEALER DESIRES TO REMAIN AN AUTHORIZED NISSAN
DEALER] and that without the prior written consent of Seller:
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(i) No sale, pledge, hypothecation or other transfer of any of the
currently outstanding capital stock or partnership interest of Dealer will be
made and no additional shares of capital stock, partnership interest or
securities convertible into shares of capital stock, of Dealer will be issued or
sold.
(ii) no sale, pledge, hypothecation or other transfer of any of the
currently outstanding capital stock of UAG Atlanta V, Inc. and Dealer will be
made and no additional shares of capital stock, partnership interest or
securities convertible into shares of capital stock, of UAG Atlanta V, Inc. and
Dealer will be issued or sold.
(iii) neither Dealer nor UAG Atlanta V, Inc. will be merged with or
into, or consolidate with, any other entity and none of the principal assets
necessary for the performance of Dealer's obligations under this Agreement will
be sold, transferred or assigned.
(iv) UAG Atlanta V, Inc. will not enter into any transaction,
including, without limitation, any sale, pledge, hypothecation or other transfer
of any of the currently outstanding capital stock of UAG Atlanta V, Inc. and
Dealer, the issuance or sale of additional shares of capital stock, partnership
interest or securities convertible into shares of capital stock, of UAG Atlanta
V, Inc. and Dealer, or the merger of UAG Atlanta V, Inc. and Dealer with or
into, or the consolidation of UAG Atlanta V, inc. and Dealer with any other
entity, if as a result of such transaction, the UAG Atlanta V, Inc. and Dealer
will cease to own at least 100% of the capital stock or interest of Dealer.
(v) If any person or entity, after the date of the initial public
offering, acquires more than 20% of UAG's common stock issued and outstanding at
any time and Nissan determines that such person or entity does not have
interests comparable with those of Nissan, or is otherwise not qualified to have
an ownership interest in a Nissan dealership (an "Adverse Person"), UAG must
terminate its dealer agreements with Nissan or transfer the Nissan dealerships
to a third party acceptable to Nissan unless, within 90 days after Nissan's
determination, the adverse Person's ownership interest is reduced to less than
20%.
Any transaction involving the capital stock of UAG Atlanta V, Inc. and
Dealer which does not violate subparagraph (iv) above may be effected without
obtaining the prior written consent of Seller and without triggering a
termination event under Section 12.A.(2) of the Standard Provisions.
Dealer shall give Seller prior notice of any proposed change in said
ownership requiring the consent of Seller and immediate notice of the death or
incapacity of any Dealer Principal or Executive Manager. No such change, and no
assignment of this Agreement or of any right or interest herein,
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shall be effective against Seller unless and until embodied in an appropriate
amendment to or assignment of this Agreement, as the case may be, duly executed
and delivered by Seller and by Dealer. Seller shall not, however; unreasonably
withhold its consent to any such change, subject to Seller's rights of first
refusal set forth in Article Tenth of this Agreement. Seller shall have no
obligation to transact business with any person who is not named either as a
Dealer Principal or Executive Manager of Dealer hereunder or otherwise to give
effect to any proposed sale or transfer of the ownership, partnership interest
or management of Dealer and UAG Atlanta V, Inc. (other than changes in the
ownership of UAG Atlanta V, Inc. and Dealer which are expressly permitted by
this Article Third) prior to having concluded the evaluation of such a proposal
as provided in Section 15 of the Standard Provisions. Dealer acknowledges
Seller's right to require consent to any change in the ownership of Dealer, and
agrees that any change or transfer without such consent from Seller is void, and
of no force and effect, and grounds for termination. Dealer and UAG Atlanta V,
Inc. further agree that either will not challenge, contest, dispute or litigate:
(i) any action taken by Seller (including, without limitation, termination
of this Agreement) in response to an attempt to transfer ownership of Dealer
(except as provided by this Agreement) without Seller's consent; or
(ii) any decisions by Seller to withhold consent to a proposed change in
ownership of Dealer.
The stock certificates representing the stock or analogous instrument
demonstrating ownership of Dealer and UAG Atlanta V, Inc. will have legends
which notify a potential purchaser of such stock of the limitations on transfer
set forth in this Article Third. Dealer, and UAG Atlanta V, Inc. represent and
agree that none of UAG Atlanta V. Inc. or Dealer will register their capital
stock, or securities convertible into their capital stock for sale or resale to
the public under any state or federal securities laws. UAG Atlanta V, Inc. and
Dealer agree that no capital stock, or securities convertible into capital
stock, of Dealer will be issued, sold or otherwise transferred by Dealer and UAG
Atlanta V, Inc., directly or indirectly, to any automobile manufacturer,
automobile distributor, any motor vehicle dealer, any other person who could
reasonably be considered a competitor or potential competitor of Seller, or any
affiliate of any of the foregoing. However, with the exception of the
immediately preceding sentence and the stock restriction set forth in Article
Third (b)(v), Nissan does not intend to restrict the transfer of equity or
interests in UAG.
ARTICLE FOURTH: Management
(a) This Agreement has been entered into by Seller in reliance upon, and
in consideration of, among other things, the personal qualifications, expertise,
reputation, integrity,
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experience, ability and representations with respect thereto of the person named
as Dealer Principal in the Final Article of this Agreement and in reliance on
the following representations and agreements of UAG Atlanta V, Inc. and Dealer
that:
(i) each of Thomas Olney ("Olney") and Spielvogel will, subject to any
other obligations set forth in this Agreement, devote 100% of their time to the
business and day-to-day operations of the entity for which they are responsible.
(ii) Olney will devote 100% of his time to the affairs of Dealer.
(b) DEALER. Seller and Dealer agree that the retention by Dealer of
qualified management is of critical importance to the successful operation of
Dealer and to the achievement of the purposes and objectives of this Agreement.
This Agreement has been entered into by Seller in reliance upon, and in
consideration of, among other things, the personal qualifications, expertise,
reputation, integrity, experience, ability and representations with respect
thereto of the persons named as Dealer Principal and Executive Manager in the
Final Article of This Agreement and in reliance on the following representations
and agreements of Dealer and UAG Atlanta V, Inc. that:
(i) Olney is currently employed as the Executive Manger of Dealer. As
long as Spielvogel is employed by UAG Atlanta V, Inc., and Olney is employed by
Dealer, they will have full and complete control over the Dealership Operations,
subject only to the powers of the Board of Directors of Dealer to manage the
business and affairs of Dealer, and they will at all times be members of the
Board of Directors of Dealer. In addition, any replacements for Spielvogel and
Olney will, so long as such replacements are employed by UAG Atlanta V, Inc. and
Dealer, have full and complete control over the Dealership Operations, subject
only to the powers of the Board of Directors of Dealer to manage the business
and affairs of Dealer, and such replacements will at all times be members of the
Board of Directors of Dealers.
(ii) the Board of Directors of Dealer shall delegate the management of the
Dealership Operations to Olney and Dealer will not amend its Certificate of
Incorporation or By-laws to provide that its Board of Directors is entitled to
exercise any extraordinary powers or interfere unduly in the Dealership
Operations.
(iii) Olney will, subject to any other obligations set forth in this
Agreement, continually provide his personal services in operating the dealership
and will be physically present at the Dealership Facilities on a full-time
basis.
(c) CHANGES IN MANAGEMENT. In view of the fact that this is a personal
services Agreement with the Dealer Principal
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and Executive Manager and in view of its objectives and purposes, Dealer and UAG
Atlanta V, Inc. agree that any change in the Dealer Principal or Executive
Manager from that specified in the Final Article of this Agreement requires the
prior written consent of Seller. In addition, UAG Atlanta V, Inc. and Dealer
agree that no chief executive officer, or person performing services and having
responsibilities similar to a chief executive officer of UAG Atlanta V, Inc.
will be appointed, directly or indirectly, without the prior written consent of
Sellers. Dealer shall give Seller prior notice of any proposed change in Dealer
Principal or Executive Manager or the appointment of any chief executive or
similar officer of UAG Atlanta V, Inc. and immediate notice of the death or
incapacity of any Dealer Principal or Executive Manager. No change in Dealer
Principal or Executive Manager and no appointment of a chief executive or
similar officer of UAG Atlanta V, Inc. shall be effective unless and until
embodied in an appropriate amendment to this Agreement duly executed and
delivered by all of the parties hereto. Subject to the foregoing, Dealer and
UAG Atlanta V, Inc. shall make their own, independent decisions concerning the
hiring and firing of its employees, including, without limitation, the Dealer
Principal and Executive Manager.
Dealer shall give Seller prior written notice of any proposed change in Dealer
Principal or Executive Manager and immediate notice of the death or incapacity
of Dealer Principal or Executive Manager. No change in Dealer Principal or
Executive Manager shall be effective unless and until embodied in an appropriate
amendment to this Agreement duly executed and delivered by all of the parties
hereto. Dealer acknowledges Seller's right (as set forth herein and in the
Standard Provisions) to require consent to any change in the management of
Dealer and UAG Atlanta V, Inc. agree that a change without such consent from
Seller is void, of no force and effect, and grounds for termination. Dealer and
UAG Atlanta V, Inc. further agree that either will not challenge, contest,
dispute, or litigate:
(i) any action taken by Seller (including, without limitation, termination
of this Agreement) in response to an attempt to change the management of Dealer
without Seller's consent; or
(ii) any decision by Seller to withhold consent to a proposed change in
management of Dealer; or
(iii) any decision by Seller to withhold approval of proposed
management candidate.
To enable Seller to evaluate and respond to Dealer concerning any proposed
change in Dealer Principal or Executive Manager or the appointment of any chief
executive or similar
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officer of UAG Atlanta V, Inc., UAG Atlanta V, Inc. agrees to provide, in the
form requested by Seller and in a timely manner, all applications and
information customarily requested by Seller to evaluate the proposed change.
While Seller shall not unreasonably withhold its consent to any such change, it
is agreed that any successor Dealer Principal, Executive Manager or chief
executive or similar officer of UAG Atlanta V. Inc. must possess personal
qualifications, expertise, reputation, integrity, experience and ability which
are, in the opinion of Seller, satisfactory. Seller will determine whether, in
its opinion, the proposed change or appointment is likely to result in a
successful dealership operation with capable management that will satisfactorily
perform Dealer's obligations under this Agreement. Seller shall have no
obligation to transact business with any person who is not named as a Dealer
Principal or Executive Manager of Dealer hereunder prior to having concluded its
evaluation of such person.
Any successor Dealer Principal or Executive Manager and any chief executive
or similar officer of UAG Atlanta V, Inc., Inc. must meet the following minimum
requirements in order to be submitted to Seller for approval:
(i) At least three years of experience as a general manager of an
automobile dealer in a major metropolitan area or similar position involving all
aspects of the day-to-day operations of such an automobile dealership
(including, without limitation, new and used vehicle sales, service, parts and
administration); and
(ii) A demonstrated track record of success in his/her prior automobile
dealership activities as measured by the dealerships' performance under his/her
management. The dealership(s) shall have consistently demonstrated at least the
following:
1. An above-average level of sales performance when measured
against regional or zone averages and as measured against sales performance
objectives established by the manufacturer and
2. An above-average level of customer satisfaction when
measured against regional or zone averages for the make; and
3. A history of cooperation and good relations with
manufacturer(s) and/or distributor(s).
(d) EVALUATION OF MANAGEMENT. Dealer and Seller understand and
acknowledge that the personal qualifications, expertise, reputation, integrity,
experience and ability of the Dealer Principal and Executive Manager and their
ability to effectively manage Dealer's day-to-day Dealership Operations is
critical to the success of Dealer in performing its obligations
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under this Agreement. Seller may from time to time develop standards and/or
procedures for evaluating the performance of the Dealer Principal and Executive
Manager and of Dealer's personnel generally. Seller may, from time to time,
evaluate the performance of the Dealer Principal and Executive Manager and will
advise Dealer, the Dealer Principal and the Executive Manager of the results of
such evaluations and the way in which any deficiencies affect Dealer's
performance of its obligations under this Agreement.
(e) COMPENSATION OF EXECUTIVE MANAGER. Olney will have a substantial
portion of his compensation tied to Dealer's overall performance with respect to
objectives for sales, market penetration and customer service which will be
established at quarterly intervals.
ARTICLE FIFTH: Additional Provisions
The additional provisions set forth in the attached "Nissan Dealer Sales
and Service Agreement Standard Provisions," bearing form number NDA-4S/9-88, as
amended in Article Thirteenth of the Agreement, and excepting only the
provisions contained in Sections 4, 14 and 16, are hereby incorporated in and
made a part of this Agreement. The Notice of Primary Market Area, Dealership,
Facilities Addendum, Product Addendum, Dealership Identification Addendum,
Holding Company Addendum, if applicable, and all Guides and Standards referred
to in this Agreement (including references contained in the Standard Provisions
referred to above) are hereby incorporated in and made a part of this Agreement.
Dealer further agrees to be bound by and comply with: the Warranty Manual;
Seller's Manuals or Instructions heretofore or hereafter issued by Seller to
Dealer; any amendment, revision or supplement to any of the foregoing; and any
other manuals heretofore or hereafter issued by Seller to Dealer.
ARTICLE SIXTH: Termination of Prior Agreements
This Agreement cancels, supersedes and annuls all prior contracts,
agreements and understandings except as stated herein, all negotiations,
representations and understandings being merged herein. No waiver, modification
or change of any of the terms of this Agreement or change or erasure of any
printed part of this Agreement or addition to it (except filling of blank spaces
and lines) will be valid or binding on Seller unless approved in writing by the
President or an authorized Vice President of Seller.
ARTICLE SEVENTH: Term
This Agreement shall have a term commencing on the effective date hereof
and, subject to is earlier termination in accordance with the provisions of this
Agreement, expiring on the earlier of: i) 18 months from the effective date of
the
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Agreement; or ii) The acquisition by UAG, or its subsidiaries or affiliates, of
another Atlanta metro Nissan Dealership. This Agreement shall automatically
terminate at the end of such stipulated term without any action by Dealer,
Seller or any of the other parties hereto.
ARTICLE EIGHTH: License Of Dealer
If Dealer is required to secure or maintain a license for the conduct of
its business as contemplated by this Agreement in any state, or jurisdiction
where any of its Dealership Operations are to be conducted or any of its
Dealership Facilities are located, this Agreement shall not be valid until and
unless Dealer shall have furnished Seller with written notice specifying the
date and number, if any, of such license or licenses issued to Dealer, Dealer
shall notify Seller immediately in writing if Dealer shall fail to secure or
maintain any and all such licenses or renewal thereof or, if such license or
licenses are suspended or revoked, specifying the effective date of any such
suspension or revocation.
ARTICLE NINTH: Additional Representations and Warranties
(a) All of the representations and covenants made to Seller by the
other parties to this Agreement have been made jointly and severally by each of
the parties hereto which has made any such representation or covenant.
(b) In addition to the representations set forth elsewhere in this
Agreement, Dealer and UAG Atlanta V, Inc., jointly and severally, represent to
Seller that:
(i) all of the documents and correspondence provided to Seller
by Dealer, UAG Atlanta V, Inc., UAG or any of their agents in connection with
the solicitation of Seller's consent to this Agreement are true and correct
copies of such documents.
(c) In addition to the covenants set forth elsewhere in this
Agreement, Dealer and UAG Atlanta V, Inc., jointly and severally, agree with
Seller that:
(i) Dealer will at all times be involved in the operation of the
Nissan dealership currently operated by it and Dealer will not conduct any other
type of business.
(ii) no distributions will be made to the stockholders or
partners of Dealer and UAG Atlanta V, Inc., if such distributions would cause
Dealer to fail to meet any of the Guides and Standards relating to the
capitalization of Dealer. In particular, UAG Atlanta V, Inc. will not be
permitted to voluntarily redeem any of its preferred stock, if prior to and
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after giving effect to such redemption Dealer fails to meet any of the Guides
and Standards relating to capitalization of Dealer.
(iii) The UAG Atlanta V, Inc. and Dealer hereby, jointly and
severally, indemnify and hold harmless, Seller, its officers, directors,
affiliates and agents, and each person who controls Seller within the meaning of
the Securities Act of 1933, as amended (the "Act"), from and against any and all
losses, claims, damages or liabilities, to which they or any of them may become
subject under the Act, the Securities Exchange Act of 1934, as amended, or any
other federal or state securities law, rule or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities arise out of
the sale by the UAG Atlanta V, Inc. or Dealer of any securities. The
indemnification provided for in this paragraph shall be exclusive of, and in
addition to, any indemnification pursuant to Section 10 of the Standard
Provisions.
(iv) One of the conditions to the effectiveness of this Agreement
by Seller is the delivery of an opinion of counsel to all of the parties hereto
(other than Seller) to the effect that this Agreement has been duly executed and
delivered by each of the parties thereto (other than Seller) and is the legal,
valid and binding obligation of each of such parties enforceable in accordance
with its terms.
ARTICLE TENTH:
A. Right of First Refusal on Sale or Lease of Property to a Third
Party.
(a) In addition to its rights under Articles Third and Fourth and
Section 15 of the Standard Provisions, Dealer agrees that should Dealer seek to
sell or lease all or substantially all of the Approved Site to a third party for
use as a Nissan New Motor Vehicle Dealership, Seller shall have the additional
right and option, but not the obligation, to purchase or lease the Approved Site
pursuant to this Article Thirteenth. A sale or lease for use other than a
Nissan New Motor Vehicle Dealership is void.
(b) If Seller chooses to exercise its right of first refusal, it must
do so by written notice delivered to Dealer within 60 days of Seller's receipt
of notice of the proposed sale or lease by Dealer. Dealer agrees not to
complete any proposed sale or lease prior to the expiration of the period for
exercise of Seller's right of first refusal and without Seller's prior written
consent, and agrees to allow Seller to perform an environmental study of the
property. Such exercise shall be null and void if Dealer withdraws its sale or
lease proposal within thirty (30) days following Dealer's receipt of Seller's
notice exercising its right of first refusal.
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(c) After being exercised, Seller's right to purchase or lease may be
assigned to any party, and Seller hereby agrees to guarantee the full payment of
the purchase price or the rental payment by such assignee. Seller's rights
under this Article Thirteenth shall be binding on and enforceable against any
assignee or successor in interest of Dealer or purchaser of Dealer's assets.
Seller shall have no obligation to exercise its rights hereunder, and Seller may
rescind its offer if the property is determined to be contaminated pursuant to
an environmental study. Such contamination shall be deemed a breach of this
agreement by dealer.
(d) Should Seller actually purchase or lease the facility, Dealer
shall also furnish to Seller copies of any easements, licenses, environmental
studies or other documents affecting the property.
(e) Dealer shall transfer the affected property by deed conveying
marketable title free and clear of liens, claims, mortgages, encumbrances,
tenancies and occupancies, or, if applicable, by an assignment of any existing
lease. The Warranty Deed shall be in proper form for recording. Dealer shall
deliver complete possession of the property at the time of delivery of the Deed
or lease assignment. Dealer shall also furnish to Seller copies of any
easements, licenses, or other documents affecting the property and shall assign
any permits or licenses which are necessary for the conduct of the Dealership
Operations.
(f) In addition to any other rights Seller may have at law, in equity
or hereunder, any sale or lease of the Approved Site in violation of this right
of first refusal shall be voidable by Seller.
B. Exclusivity Provisions.
In order for Dealer to maintain competitive Dealership Facilities to
effectively market Nissan Products, Dealer hereby agrees to abide by and never
challenge the following provisions (hereinafter "Exclusivity Provisions").
These Exclusivity Provisions shall be effective on or before the execution of
the Agreement, and continue in effect thereafter so long as Dealer (or it
principals) are authorized Nissan dealers and these provisions shall be binding
on any successors-in-interest, assigns or purchasers of Dealer:
(a) The only line-make of new, unused motor vehicles which Dealer
shall display and sell at the Approved Site shall be the Nissan line and make of
motor vehicles. Dealer shall not conduct any dealership operations for any
other make or line of vehicles from the Approved Site.
(b) Dealer shall sell and maintain a full line of Genuine Nissan
Parts and Accessories at the Approved Site and shall provide a full range of
automotive servicing for Nissan
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vehicles at the Approved Site pursuant to Section 5 of the Standard Provisions
to the Agreement. Nothing contained herein, however, shall preclude Dealer from
offering parts, accessories or servicing for vehicles of other lines or makes so
long as such products or services are incidental to Dealer's Nissan Dealership
Operations.
(c) Dealer shall not advertise or promote any make or line of new,
unused vehicles from the Approved Site other than the Nissan line.
(d) Dealer shall not install or maintain any sight at or near the
Approved Site which would tend to lead the public into believing that any line
or make of vehicles other than the Nissan line is sold at the Approved Site.
C. Option to Purchase Dealership for Asset Value
Nissan shall have the option to purchase the Dealership for Asset
Value upon the occurrence of any of the following events: i) The expiration of
18 months from the effective date of this Agreement; or ii) The acquisition by
UAG or its subsidiary or affiliate of another Atlanta Metro area Nissan Dealer;
or iii) The negotiation of, or entry into an agreement for the sale of the
Dealership by UAG, UAG Atlanta V or Dealer during the Term of this Agreement.
In the event that Nissan exercises this option to purchase the Dealership, UAG
and Dealer would be responsible for the building and land at the Dealership
Facilities.
For purposes of this option, the term "Asset Value" shall mean the
fair market value of the Dealership's Genuine Nissan parts and special tools
only. In the event that Nissan exercises its option to Purchase the Dealership
in accordance with these provisions, Dealer and Nissan shall attempt, in good
faith, to agree on the Asset Value of the Dealership. If Dealer and Nissan are
unable for any reason to agree on the Asset Value of the Dealership within 30
days of Nissan's exercise of its Option to Purchase, Dealer and Nissan shall
each, within 10 days thereafter, select an appraiser and notify the other party
of the name, address and qualifications of such appraiser. If the two
appraisers agree on the Asset Value, the amount shall be binding upon Dealer and
Nissan. If the two appraisers are unable to agree upon the Asset Value of the
dealership within 15 days of their selection, the two appraisers shall select a
third appraiser to make the determination of Asset Value, which determination
shall be binding on Dealer and Nissan. The costs and expenses of any appraiser
selected by a party shall be borne solely by such party, and the costs and
expenses of a third appraiser shall be shared equally between the Dealer and
Nissan.
Dealer shall transfer the affected property free and clear of all
liens, claims and encumbrances.
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<PAGE>
ARTICLE ELEVENTH: Breach by Dealer
In the event (i) that any of the representations and warranties of
Dealer, UAG Atlanta V, Inc., UAG, Spielvogel or Olney contained in this
Agreement shall prove not to have been true and correct when made or (ii) of any
breach or violation of any of the covenants made by Dealer and UAG Atlanta V,
Inc., UAG, Spielvogel or Olney in Articles Third, Fourth and Ninth of this
Agreement or upon the occurrence of any of the events warranting termination of
this Agreement as set forth in Section 12.A of the Standard Provisions, Seller
may terminate this Agreement, prior to the expiration date hereof, by giving
Dealer written notice thereof, such termination to be effective upon the date
specified in such notice, or such latter date as may be required by any
applicable statute with the effect set forth in Section 13 of the Standard
Provisions.
ARTICLE TWELFTH: Execution of Agreement
This Agreement, and any Addendum or amendment or notice with respect
thereto, shall be valid and binding on Seller only when it bears the signature
of either the President or an authorized Vice President of Seller and, when such
signature is a facsimile, the manual countersignature of an authorized employee
of Seller at the Director level and a duplicate original thereof is delivered
personally or by mail to the Dealership Location. This Agreement shall bind
Dealer and the other parties hereto only when it is signed by: a duly
authorized officer or executive of Dealer or such party if a corporation; one of
the general partners of Dealer or such party if a partnership; or Dealer or such
party if an individual.
ARTICLE THIRTEENTH: Amendments to Standard Provisions
(a) Section 1.O of the Standard Provisions is hereby amended to read
as follows:
"O. 'Principal Owner(s)' shall mean the persons named as Dealer
Principal in the Final Article of this Agreement upon whose personal
qualifications, expertise, integrity, experience, ability and representations
Seller has relied in entering into this Agreement."
(b) Section 6.I of the Standard Provisions is hereby amended to read
as follows:
"Seller shall have the right, at all reasonable times during regular
business hours, to inspect the Dealership Facilities and to examine, audit and
make and take copies of all records, accounts and supporting data relating to
the sale, sales reporting, service and repair of Nissan Products by Dealer.
Whenever possible, Seller shall attempt to provide Dealer with advance notice of
an audit or examination of Dealer's operations. Seller shall also have the
right, at all reasonable times during
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<PAGE>
regular business hours and upon advance notice, to examine, audit and make and
take copies of all records, accounts and supporting date of UAG Atlanta V, Inc.
and Dealer relating to the business, ownership or operations of Dealer."
(c) Section 12.A.(1) of the Standard Provisions is hereby amended to
read as follows:
"(1) Any actual or attempted sale, transfer, assignment or
delegation, whether by operation of law or otherwise, by Dealer or UAG Atlanta
V, Inc. of any interest in or right, privilege or obligation under this
Agreement, or of the principal assets necessary for the performance of Dealer's
responsibilities under this Agreement, without, in either case, the prior
written consent of Seller having been obtained, which consent shall not be
unreasonably withheld."
(d) Section 12.A.(3) of the Standard Provisions is hereby amended to
read as follows:
"(3) Removal, resignation, withdrawal or elimination from Dealer for any
reason of the Executive Manager, or removal, resignation, withdrawal or
elimination from Dealer of Spielvogel as President, or removal, resignation,
withdrawal or elimination from Dealer of Olney as Executive Vice President or
Executive Manager; provided, however, in each case, Seller shall give Dealer a
reasonable period of time within which to replace such person with an individual
satisfactory to Dealer as the case may be, and Seller in accordance with Article
Fourth of this Agreement, or the failure of Dealer to retain an Executive
Manager who, in accordance with Article Fourth of this Agreement, in Seller's
reasonable opinion, is competent, possesses the requisite qualifications for the
position, and who will act in a manner consistent with the continued interests
of both Seller and Dealer."
(e) Section 12.B.(2)(i) of the Standard Provisions is hereby amended to
read as follows:
"(i) any dispute, disagreement or controversy between or among Dealer, UAG
Atlanta V, Inc., or UAG and any third party or between the owners and management
personnel of Dealer relating to the management or ownership of Dealer and UAG
Atlanta V, Inc. develops or exists which, in the reasonable judgment of Seller,
trends to adversely affect the conduct of the Dealership Operations or the
interests of Dealer or Seller; or"
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<PAGE>
(f) Section 12.B.(2)(ii) of the Standard Provisions is hereby amended to
read as follows:
"(ii) any other act or activity of Dealer, UAG Atlanta V, Inc. and/or
UAG, or any of their owners or management occurs, which substantially
impairs the reputation or financial standing of Dealer or any of its
management subsequent to the execution of this Agreement;"
(g) Exhibits A and B are hereby incorporated by reference.
ARTICLE FOURTEENTH: Facility Requirements
Based on the April 1996 Market Study, the existing facility must be expanded and
modernized to include the used vehicle sales building and service department
area in order to comply with current Nissan Motor Corporation facility
guidelines and improve customer service and accessibility.
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<PAGE>
FINAL ARTICLE
The Dealer is Conyers Nissan, Inc., a corporation formed under the laws of the
_____________________. Dealer is located in ________________, Georgia.
The other parties to this Agreement are UAG Atlanta V, Inc., a corporation
incorporated under the laws of the _______________, UAG, a corporation
incorporated under the laws of the state of Delaware, Carl Spielvogel
("Spielvogel") and Thomas Olney ("Olney").
The Dealer Principal is Spielvogel.
The Executive Manager is Olney.
Expiration Date: May 1, 1998
Working Capital Guide Requirement: $ 600,700
Net Worth Guide Requirement: $ 809,425
Flooring Line: $1,783,850
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
triplicate effective as of the _____ day of ____________, 1996 at Carson,
California.
SELLER:
NISSAN DIVISION
NISSAN MOTOR DIVISION CORPORATION IN USA
By:___________________________ By:__________________________
Its:__________________________ Its:_________________________
UAG ATLANTA V, INC.
By:____________________________
Its:____________________
CONYERS NISSAN, INC.
By:____________________________
Its:_____________________
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<PAGE>
CARL SPIELVOGEL
______________________________
THOMAS OLNEY
______________________________
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<PAGE>
SCHEDULE A
UNITED AUTO GROUP, INC.
STOCK OWNERSHIP AS OF FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
Name of the Shareholder Class Number of Percentage
Shares Owned
- --------------------------------------------------------------------------------
Trade Auto Holdings, Inc. Common 2,816.227 40.30%
f/k/a '21' Auto Holdings, Inc.
- --------------------------------------------------------------------------------
Mager, Ezra Common 156,250 2.24%
- --------------------------------------------------------------------------------
Aeneas Venture Corporation Preferred 2,252,983 32.24%
- --------------------------------------------------------------------------------
AIF II, L.P. Preferred 1,433,716 20.52%
- --------------------------------------------------------------------------------
Grantham, Jeremy Preferred 79,858 1.14%
- --------------------------------------------------------------------------------
Spielvogel, Carl Preferred 19,964 .29%
- --------------------------------------------------------------------------------
Farace, Andrea Preferred 39,929 .57%
- --------------------------------------------------------------------------------
Kroll, Juleps Preferred 79,858 1.14%
- --------------------------------------------------------------------------------
Markowitz, Jerome Preferred 4,259 .06%
- --------------------------------------------------------------------------------
Halperin, Philip Preferred 4,259 .06%
- --------------------------------------------------------------------------------
Lemke von-Ammon, Derek Preferred 2,129 .03%
- --------------------------------------------------------------------------------
Dunlevy, Frank Preferred 2,130 .03%
- --------------------------------------------------------------------------------
Assu Venture Preferred 27,951 .40
- --------------------------------------------------------------------------------
Natio Fonds Venture 2 Preferred 27,951 .40%
- --------------------------------------------------------------------------------
Natio Vie Development Preferred 39,927 .57%
- --------------------------------------------------------------------------------
-21-
<PAGE>
- --------------------------------------------------------------------------------
Total Common and 6,987,391 100%
Preferred
- --------------------------------------------------------------------------------
-22-
<PAGE>
LEASE GUARANTY
The undersigned, in order to induce Standefer Investment Company, a
Tennessee Limited Partnership ("SIC") to enter into that certain Lease Agreement
(herein so called) dated as of October ___, 1996, between SIC and Standefer
Motor Sales, Inc., a Tennessee corporation d/b/a Standefer Nissan (the
"Company"), a Tennessee corporation and a subsidiary of UAG Tennessee, Inc., a
Delaware corporation that is wholly owned by the undersigned, hereby
unconditionally and irrevocably guarantees the payment of any amounts required
to be paid by the Company and the performance of all other obligations of the
Company under the Lease Agreement.
The undersigned hereby waives presentment, protest, notice of dishonor,
extension of time of payment and notice of acceptance of this Guaranty and
hereby consents to any and all forbearances and extensions of time of payment of
the obligations guaranteed hereby and to any and all of the changes in the
terms, covenants and conditions thereof hereafter made or guaranteed.
No delay or omission by SIC in exercising any of its rights, remedies,
powers and privileges hereunder and no course of dealing between SIC, on the one
hand, and the Company, the undersigned or any other person, on the other hand,
shall be deemed a waiver by SIC of any of its rights, remedies, powers and
privileges, even if such delay or omission is continuous and repeated; nor shall
any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise thereof by SIC or the exercise of any other right,
remedy, power or privilege by SIC. No notice or demand on the Company, the
undersigned or any other person in any instance shall entitle the Company, the
undersigned or any other person to any other or further notice or demand in
similar or other circumstances or constitute a waiver of SIC's right to any
other or further action in any circumstances without notice or demand.
This Guaranty shall remain in full force and effect, and the undersigned
shall continue to be liable for the payment of the obligations under the Lease
Agreement in accordance with the terms of the Lease Agreement and this Guaranty,
notwithstanding the commencement of any bankruptcy, reorganization or other
debtor relief proceedings by or against the Company, and notwithstanding any
modification, discharge or extension of the obligations under the Lease
Agreement, any modification or amendment of the Lease Agreement, or any stay of
the exercise by SIC of any of its rights and remedies against the Company with
respect to any of the obligations under the Lease Agreement.
Whenever possible, each provision of the Guaranty shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of the Guaranty shall be prohibited by or be invalid under such law,
such provisions shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
<PAGE>
This Guaranty shall inure to the benefit of SIC and its successors and
assigns, and shall be binding upon the undersigned and its successors and
assigns. This instrument constitutes the entire agreement as to the subject
matter contemplated hereby.
This instrument shall be governed by the laws of the State of Tennessee.
WITNESS the undersigned's signature as of the _____ day of October, 1996.
UNITED AUTO GROUP, INC.
a Delaware Corporation
By:
-------------------------------------
Its:
-------------------------------------
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