Exhibit 10.3.6
EXECUTION COPY
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT ("Agreement") is executed as of this 18th day
of June, 1996 by United Auto Group, Inc., a Delaware corporation ("UAG") in
favor of Atlantic Auto Second 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 Purchase Agreement of even date herewith
(the "AAFC Purchase Agreement") pursuant to which AFC may, from time to time,
purchase 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
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 meaning 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 2.3, 2.4., 2.6, 2.7, 2.9 and 3.2 and Articles V (other than
Sections 5.1(e)) and VI of the AAFC Purchase Agreement and Sections 2.2, 2.5,
2.8 (other than Section 2.8(b)), 2.10, 2.11, 5.3 (other than Section 5.3(i)) and
5.4 and Article VI of the Transfer and Administration 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
Sections 3.2 and 2.6(b) of the AAFC Purchase Agreement to repurchase any
Receivable if the request to make such repurchase occurs more than 12 months
after the breach of a representation and warranty as described in Section 3.2 or
after the failure to deliver the Custodian Confirmation as described in Section
2.6(b), as the case may be, except there shall be no such time limit applicable
with respect to any breach of the representation and warranty contained in
Section 3.2(c) and (d) of the AAFC Purchase Agreement, (b) Atlantic's
obligations to repurchase any Receivable under Section 2.7(ii) of the AAFC
Purchase Agreement, (c) any obligation of Atlantic under Section 6.1(f) of the
AAFC Purchase Agreement to provide indemnification for its failure to perform in
accordance with any provision of the AAFC Purchase Agreement or any agreement
contemplated by the AAFC Purchase Agreement other than the provisions contained
in those Sections of the AAFC Purchase Agreement and the Transfer and
Administration Agreement enumerated above in this sentence and (d) any
obligation of Atlantic under Section 6.2 or 6.3 of the AAFC Purchase Agreement
to provide indemnification to any entity other than the Buyer, Morgan Guaranty
Trust Company of New York, any Affiliate of Morgan Guaranty Trust Company of New
York and the officers, directors and agents of any of the foregoing. 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
obligations of Atlantic to repurchase the Receivables acquired by AFC under the
AAFC Purchase Agreement,
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except as described in Sections 2.6, 2.7 or 3.2 of the AAFC Purchase Agreement
or (ii) create recourse against Atlantic or UAG for the payment of any
uncollectible Receivable.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS AND WARRANTIES. 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 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 character 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 not 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'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 5.07, 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
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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 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 5.07,
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 5.07, 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, 1996 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 Receivable or the AAFC Purchase Agreement, (ii) the absence of any attempt
to collect any 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 Receivable, (iv) any change of the time, manner or
place of performance of,
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or in any other term of any of the Atlantic Obligations or any 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 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 Receivable or other property acquired by any of the AFC Parties
from Atlantic or in any security or collateral related to the Atlantic
Obligations, (vii) any exchange or release of any 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 Obligations 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.
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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 AFC's address set forth on the signature page hereof. Any such revocation
shall not affect the right of any of the AFC Parties to enforce their 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 Receivable which was a Receivable on the date the aforementioned
revocation was received by AFC. If any of the AFC Parties acquire 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.
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 Receivables, and that it is
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
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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.
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 upon the
earlier to occur of (a) 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 and (b) the termination of that
certain Support Agreement dated as of June 28, 1995 by and among UAG and
Atlantic Auto Funding Corporation.
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
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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 ARISING
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 BENCH TRIAL WITHOUT A JURY. 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 the Agreement.
Section 5.11. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
which when taken together shall constitute one and the same agreement.
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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/ Carl Spielvogel
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Name: Carl Spielvogel
Title: Chairman and CEO
375 Park Avenue, 22nd Floor
New York, New York 10152
Acknowledged and accepted
this 14th day of June, 1996.
ATLANTIC AUTO SECOND FUNDING CORPORATION
By: /s/ Suzanne A. O'Connor
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Name: Suzanne A. O'Connor
Title: Vice President
800 Perinton Hills Office Park
Fairport, New York 14450
Telecopy No.: 716-421-1954
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