Execution Copy
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT ("Agreement") is executed as of this 28th day of
June, 1995 by United Auto Group, Inc., a Delaware corporation ("UAG") in favor
of Atlantic Auto Funding Corporation, a Delaware corporation ("AFC") (AFC and
its respective successors and assigns are referred to herein as the "AFC
Parties").
PRELIMINARY STATEMENTS
1. AFC and Atlantic Auto Finance Corporation, a Delaware corporation
("Atlantic") have executed that certain Receivables Purchase Agreement of even
date herewith (the "AAFC Purchase Agreement") pursuant to which AFC may, from
time to time, purchase Eligible Receivables from Atlantic;
2. Atlantic is a subsidiary of UAG; and
3. It is a condition precedent to the initial Purchase by AFC under
the AAFC Purchase Agreement that UAG execute this Agreement and deliver it to
AFC.
4. It is intended by the parties hereto that this Agreement not
create any recourse against Atlantic or UAG for the payment of any uncollectible
Purchased Receivable.
In consideration of the execution of the AAFC Purchase Agreement by
AFC, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged by UAG, UAG agrees as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1 DEFINITIONS. Unless otherwise defined in this Agreement,
all defined terms used in this Agreement, including the Preliminary Statements
hereof, shall have the meanings ascribed to such terms in the AAFC Purchase
Agreement.
ARTICLE II.
PERFORMANCE SUPPORT OBLIGATION
SECTION 2.1 PERFORMANCE SUPPORT OBLIGATION. UAG hereby
unconditionally and irrevocably guarantees for the benefit of each of the AFC
Parties, the due and punctual performance, observance and payment by Atlantic
and its respective successors
and assigns of all of the terms, covenants, conditions, agreements, undertakings
and obligations on the part of Atlantic (whether individually or as Servicer or
otherwise) to be paid, performed or observed under Sections 2.02, 2.03, 2.04,
2.05, 3.03, 4.01 and 8.06 and Articles V, VI and VII of the AAFC Purchase
Agreement (all such terms, covenants, conditions, agreements, undertakings and
obligations on the part of Atlantic to be paid, performed or observed being
collectively called the "Atlantic Obligations"); PROVIDED, HOWEVER, for purposes
of this Agreement, the "Atlantic Obligations" shall not include (a) any
obligation of Atlantic under Section 7.02(i) of the AAFC Purchase Agreement to
repurchase any Purchased Receivable if the request to make such repurchase
occurs more than 12 months after the breach of a representation and warranty as
described in such Section 7.02(i) except there shall be no such time limit
applicable with respect to any breach of the representation and warranty
contained in Section 4.01(g) of the AAFC Purchase Agreement and (b) Atlantic's
obligations to repurchase any Purchased Receivable under Section 7.02(ii) or
(iii) of the AAFC Purchase Agreement. In the event that Atlantic shall fail in
any manner whatsoever, to perform, observe, or pay any of the Atlantic
Obligations when the same shall be required to be performed, observed or paid,
then UAG will itself duly and punctually perform, observe and pay, or cause to
be duly and punctually performed, observed or paid the Atlantic Obligations, and
it shall not be a condition to the accrual of the obligation of UAG hereunder to
perform, observe or pay any Atlantic Obligation (or to cause the same to be
performed, observed or paid) that any AFC Party shall have first made any
request of or demand upon or given any notice to UAG or to Atlantic or its
respective successors and assigns or have initiated any action or proceeding
against UAG or Atlantic or any of their respective successors and assigns in
respect thereof. Any AFC Party may proceed to enforce the obligations of UAG
under this Section 2.1 without first pursuing or exhausting any right or remedy
which any AFC Party may have against Atlantic, any other Person, the Purchased
Receivables or any other property. Each AFC Party hereby acknowledges that the
Atlantic Obligations do not (i) include any obligation of Atlantic to repurchase
the Purchased Receivables acquired by AFC under the AAFC Purchase Agreement,
except as described in Section 7.02 of the AAFC Purchase Agreement or (ii)
create recourse against Atlantic or UAG for the payment of any uncollectible
Purchased Receivable.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF UAG. UAG hereby
represents and warrants as follows:
i) UAG is a corporation duly organized, validly existing and in good
standing under the laws of the State of
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Delaware and is duly qualified to do business, and in good standing, in every
jurisdiction where the nature of its business requires it to be so qualified.
(ii) The execution, delivery and performance by UAG of this
Agreement and the other instruments and documents to be delivered
hereunder, and the transactions contemplated hereby, are within UAG's
corporate powers, have been duly authorized by all necessary corporate
action, do not contravene (A) UAG's charter or by-laws, (B) any law, rule
or regulation applicable to UAG, (C) any contractual restriction contained
in any indenture, loan or credit agreement, lease, mortgage, security
agreement, bond, note or other agreement or instrument binding on UAG or
its property or (D) any order, writ, judgment, award, injunction or decree
binding on UAG or its property, and do no result in or require the creation
of any Lien upon or with respect to any of its properties.
(iii) This Agreement has been duly executed and delivered on
behalf of UAG and is the legal, valid and binding agreement of UAG
enforceable against UAG in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization and other similar
laws of general applicability relating to or affecting creditor creditor's
rights and general principles of equity.
(iv) UAG is the registered and beneficial owner of each class of
the issued and outstanding capital stock of Atlantic.
ARTICLE IV.
COVENANTS
SECTION 4.1. REPORTING COVENANTS. UAG covenants and agrees that,
until this Agreement is terminated pursuant to Section 5.7, UAG will deliver to
AFC:
(a) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of UAG, a
consolidated balance sheet of UAG and its consolidated Subsidiaries as at the
end of such quarter and the related consolidated statements of income and
retained earnings of UAG and its consolidated Subsidiaries for such quarter and
the then elapsed portion of the fiscal year, certified by the chief financial
officer or the chief accounting officer of UAG; and
(b). as soon as available and in any event within 90 days after the
end of each fiscal year of UAG, a copy of the consolidated balance sheets of UAG
and its consolidated Subsidiaries as of the end of such year and the related
consolidated statements of income and retained earnings of UAG
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and its consolidated Subsidiaries for such year each reported on by nationally
recognized public accountants.
SECTION 4.2 STOCK OWNERSHIP AND MERGER RESTRICTIONS. UAG
covenants and agrees that, until this Agreement is terminated pursuant to
Section 5.7, UAG will continue to be the direct or indirect beneficial owner of
each class of the issued and outstanding capital stock of Atlantic (except for
such capital stock owned by management of Atlantic). UAG shall not merge or
consolidate with any Person unless (i) UAG shall be the surviving entity of any
such merger or consolidation or (ii) such surviving entity expressly assumes the
obligations of UAG hereunder.
SECTION 4.3. DISTRIBUTIONS. UAG covenants and agrees that, until
this Agreement is terminated pursuant to Section 5.7, UAG will not pay any
dividend or make any distribution, directly or indirectly, on account of any
shares of any class of its capital stock now or hereafter outstanding (any of
the foregoing being a "Restricted Payment"), except UAG may make Restricted
Payments on a pro rata basis to all of its shareholders which, in the aggregate,
do not exceed fifty percent (50%) of UAG's cumulative net income during the
period commencing with the fiscal year beginning on January 1, 1995 through the
date of the most recent consolidated statements of income and retained earnings
delivered pursuant to Section 4.1(b) above.
ARTICLE V.
MISCELLANEOUS
SECTION 5.1. VALIDITY OF OBLIGATIONS. UAG agrees that its
obligations under this Agreement shall be unconditional, irrespective of (i) the
validity, enforceability, avoidance, subordination, discharge, or disaffirmance
by any Person (including a trustee in bankruptcy) of the Atlantic Obligations,
any Purchased Receivable or the AAFC Purchase Agreement, (ii) the absence of any
attempt to collect any Purchased Receivables from the Obligor related thereto or
any guarantor, or to collect the Atlantic Obligations from Atlantic or any other
Person, (iii) the waiver, consent, extension, forbearance or granting of any
indulgence by any of the AFC Parties with respect to any provision of any
instrument evidencing the Atlantic Obligations or any Purchased Receivable, (iv)
any change of the time, manner or place of performance of, or in any other term
of any of the Atlantic Obligations or any Purchased Receivable, including
without limitation, any amendment to or modification of the AAFC Purchase
Agreement, (v) any law, regulation or order of any jurisdiction affecting any
term of any of the Atlantic Obligations, any Purchased Receivable, or rights of
any of the AFC Parties with respect thereto, (vi) the failure by any of the AFC
Parties to take any steps to perfect and maintain perfected its respective
interest in any Purchased Receivable or other property acquired by any of the
AFC Parties from Atlantic or in
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any security or collateral related to the Atlantic Obligations, (vii) any
exchange or release of any Purchased Receivable or other property acquired by
the AFC Parties from Atlantic, (viii) any failure to obtain any authorization or
approval from or other action by or to notify or file with, any governmental
authority or regulatory body required in connection with the performance of the
obligations hereunder by UAG or (ix) any impossibility or impracticability of
performance, illegality, force majeure, any act of government, or other
circumstances which might constitute a default available to, or a discharge of
Atlantic or UAG, or any other circumstance, event or happening whatsoever
whether foreseen or unforeseen and whether similar to or dissimilar to anything
referred to above. UAG further agrees that its obligations under this Agreement
shall not be limited by any valuation, estimation or disallowance made in
connection with any proceedings involving Atlantic filed under the Bankruptcy
Code, whether pursuant to Section 502 of the Bankruptcy Code or any other
Section thereof. UAG further agrees that none of the AFC Parties shall be under
any obligation to marshall any assets in favor of or against or in payment of
any or all of the Atlantic Obligations. UAG further agrees that, to the extent
that Atlantic makes a payment or payments to any of the AFC Parties, which
payment or payments (or any part thereof) are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to
Atlantic, its estate, trustee or receiver or any other party, including, without
limitation, UAG, under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such payment or repayment, the Atlantic
Obligation or part thereof which had been paid, reduced or satisfied by such
amount shall be reinstated and continued in full force and effect as of the date
such initial payment, reduction or satisfaction occurred. UAG waives all set-
offs and counterclaims and all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor and notices of
acceptance of this Agreement. UAG's obligations under this Agreement shall not
be limited if the AFC Parties are precluded for any reason (including without
limitation, the application of the automatic stay under Section 362 of the
Bankruptcy Code) from enforcing or exercising any right or remedy with respect
to the Atlantic Obligations, and UAG shall pay to the AFC Parties, upon demand,
the amount of the Atlantic Obligations that would otherwise have been due and
payable had such rights and remedies been permitted to be exercised.
SECTION 5.2. IRREVOCABILITY. UAG agrees that its obligations
under this Agreement shall be irrevocable. In the event that under applicable
law (notwithstanding UAG's agreement regarding the irrevocable nature of its
obligations hereunder), UAG shall have the right to revoke this Agreement, this
Agreement shall continue in full force and effect until a written revocation
hereof specifically referring hereto, signed by UAG is actually received by AFC
at [address]. Any such revocation shall not affect the right of any of the AFC
Parties to enforce their
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respective rights under this Agreement with respect to (i) any Atlantic
Obligation (including any Atlantic Obligation that is contingent or unmatured)
which arose on or prior to the date the aforementioned revocation was received
by AFC or (ii) any Purchased Receivable which was a Purchased Receivable on the
date the aforementioned revocation was received by AFC. If any of the AFC
Parties acquire Purchased Receivables or take other action in reliance on this
Agreement after any such revocation by UAG but prior to the receipt by AFC of
said written notice, the rights of the AFC Parties with respect thereto shall be
the same as if such revocation had not occurred. Without limiting the
foregoing, this Agreement may not be revoked at any time on or after the
Termination Date.
SECTION 5.3. WAIVER. UAG hereby waives promptness, diligence,
notice of acceptance, notice of default by Atlantic, notice of the incurrence of
any Atlantic Obligation and any other notice with respect to any of the Atlantic
Obligations and this Agreement, the AAFC Purchase Agreement, and any other
document related thereto and any requirement that the AFC Parties exhaust any
right or take any action against Atlantic, any other Person or any property.
UAG warrants to the AFC Parties that it has adequate means to obtain from
Atlantic on a continuing basis, all information concerning the financial
condition of Atlantic and the collectibility of the Purchased Receivables, and
that is it not relying on the AFC Parties to provide such information either now
or in the future.
SECTION 5.4. SUBROGATION. UAG will not exercise or assert any
rights which it may acquire by way of subrogation under this Agreement unless
and until all of the Atlantic Obligations shall have been paid and performed in
full and the Termination Date shall have occurred under the AAFC Purchase
Agreement. If any payment shall be made to UAG on account of any subrogation
rights at any time prior to the occurrence of the events described in the
preceding sentence, each and every amount so paid will be held in trust for the
benefit of the AFC Parties and forthwith be paid to AFC to be credited and
applied to the Atlantic Obligations to the extent then unsatisfied, in
accordance with the terms of the AAFC Purchase Agreement or any document
delivered in connection therewith.
SECTION 5.5 COSTS AND EXPENSES. UAG shall pay all reasonable
costs and expenses including, without limitation, all court costs and reasonable
attorneys' fees and expenses paid or incurred by any of the AFC Parties in
connection with (a) the collection of all or any part of the obligations of UAG
hereunder, (b) the enforcement of any term or provision of this Agreement or (c)
the prosecution or defense of any action by or against any of the AFC Parties in
connection with this Agreement or the AAFC Purchase Agreement, whether involving
Atlantic, UAG or any other Person including a trustee in bankruptcy.
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SECTION 5.6. BINDING EFFECT; ASSIGNABILITY. This Agreement shall
be binding upon UAG and upon the successors and assigns of UAG and shall inure
to the benefit of the successors and assigns of the AFC Parties; all references
herein to UAG and to Atlantic shall be deemed to include their respective
successors and assigns. The successors and assigns of Atlantic shall include,
without limitation, a receiver, trustee or debtor-in-possession of or for
Atlantic. UAG may not assign any of its rights and obligations hereunder or any
interest herein without the prior written consent of AFC, such consent not to be
unreasonably withheld. AFC may assign at any time its rights and obligations
hereunder and interests herein to any other Person without the consent of UAG or
Atlantic. UAG agrees that any assignee of AFC (to the extent of its interest so
assigned) shall have the right to enforce this Agreement and to exercise
directly all of AFC's rights and remedies under this Agreement, and UAG agrees
to cooperate fully with any such assignee in the exercise of such rights and
remedies. All references to the singular shall be deemed to include the plural
where the context so requires.
SECTION 5.7. TERMINATION. This Agreement shall terminate after
the latest to occur of (i) the date on which all the Atlantic Obligations are
paid and/or performed in full, (ii) the Termination Date under the AAFC Purchase
Agreement, and (iii) the date on which UAG has satisfied in full its obligations
hereunder.
SECTION 5.8. INTEGRATION; CONDITIONS. This Agreement contains a
final and complete integration of all prior expressions of the parties hereto
with respect to the subject matter hereof, superseding all prior oral or written
understandings. No course of dealing, course of performance or trade usage and
no parol evidence shall be used to supplement or modify any term hereof. This
Agreement is fully effective as of the date set forth above.
SECTION 5.9. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE INTERPRETED AND THE RIGHTS AND REMEDIES OF THE PARTIES HERETO
DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS (AS OPPOSED TO
CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW YORK. UAG HEREBY AGREES TO THE
JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK, AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO UAG AT THE
ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN
THE U.S. MAILS, POSTAGE PREPAID. UAG HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE BETWEEN UAG AND ANY AFC PARTY ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A
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BENCH TRIAL WITHOUT A JURTY. UAG HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 5.9 SHALL AFFECT THE RIGHT OF
ANY AFC PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT THE RIGHT OF ANY AFC PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST UAG
OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 5.10. SEVERABILITY. Wherever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
SECTION 5.11. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by UAG as
of the day and year first above written.
UNITED AUTO GROUP, INC.
By: /s/ Arthur J. Rawl
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Name: Arthur J. Rawl
Title: Exec V.P. & CFO
375 Park Avenue, 22nd Floor
New York, New York 10152
Acknowledged and accepted
this 28th day of June, 1995.
ATLANTIC AUTO FUNDING CORPORATION
By: /S/ SUZANNE A. O'CONNOR
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Name: Suzanne A. O'Connor
Title: Vice President, Treasurer
800 Perinton Hills Office Park
Fairport, New York 14450
Telecopy No.: 716-421-1954
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