EXHIBIT 10.5.12
SHAREHOLDERS' AGREEMENT
This Shareholders' Agreement, dated as of July 31, 1996, among United
Auto Group, Inc., a Delaware corporation ("UAG"), UAG Atlanta, Inc., a
Delaware corporation and a wholly owned subsidiary of UAG ("UAG/Atlanta"),
Atlanta Toyota, Inc., a Texas corporation (the "Company") and John R. Smith,
an individual resident of the State of Georgia ("Smith"). UAG/Atlanta and
Smith and each other person or entity that may become a party hereto as
contemplated hereby, are hereinafter individually referred to a "Shareholder"
and collectively referred to as the "Shareholders".
W I T N E S S E T H :
WHEREAS, immediately prior to consummation of the UAG Purchase (as
defined below), UAG/Atlanta will own 1,000 shares of Common Stock of the
Company, $.01 par value ("Common Stock"), which will constitute all of the
issued and outstanding capital stock of the Company as of such time; and
WHEREAS, Smith, UAG, UAG/Atlanta and the Company have entered into a
Stock Purchase Agreement, dated as of July 26, 1996 (the "Stock Purchase
Agreement"), pursuant to which Smith has agreed to purchase 50 shares (the
"Shares") of Common Stock from UAG/Atlanta (the "Smith Purchase"), such that
immediately after giving effect to the Smith Purchase, UAG and Smith will own
ninety-five (95%) percent and five (5%) percent, respectively, of all of the
issued and outstanding shares of Common Stock, on a fully-diluted basis; and
WHEREAS, pursuant to the Stock Purchase Agreement it is a condition
precedent to the obligations of UAG, UAG/Atlanta and Smith to consummate the
Smith Purchase that UAG, UAG/Atlanta, the Company and Smith shall have entered
into this Agreement; and
WHEREAS, UAG, UAG/Atlanta, the Company and Smith desire, INTER ALIA,
to provide certain rights and set certain restrictions in connection with the
transfer of the Shareholders' shares of Common Stock;
NOW, THEREFORE, in consideration of the mutual terms, conditions,
covenants and agreements made herein, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
"AFFILIATE" shall mean, with respect to any Shareholder, (i) in all
cases, any Person that, directly or indirectly, controls, is controlled by or
is under common control with such Shareholder and (ii) in the case of a
Shareholder who is a natural person, his spouse, his issue, his estate and
any trust entirely for the benefit of his spouse and/or issue. Neither the
Company nor any of its Subsidiaries shall be deemed an Affiliate of any
Shareholder. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with") as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.
"BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday, excluding Federal holidays.
"COMMON STOCK" shall have the meaning specified in the first recital
hereof.
"COMMON STOCK EQUIVALENTS" shall mean all rights, warrants, options,
indebtedness or other securities exercisable or exchangeable for, or convertible
into, directly or indirectly, Common Stock.
"COMPANY" shall have the meaning set forth in the preamble hereof.
"EFFECTIVE DATE" shall have the meaning set forth in Section 2.1 hereto.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"FIRST OFFER" shall have the meaning specified in Section 3.3(a) hereof.
"FIRST OFFER PERIOD" shall have the meaning specified in Section 3.3(a)
hereof.
"FULLY-DILUTED SHARES" shall mean, at any time, the outstanding Common
Stock plus (without duplication) all shares of Common Stock issuable, whether at
such time, upon the passage of
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time or occurrence of future events, upon the exercise, conversion or
exchange of all then outstanding Common Stock Equivalents.
"GAAP" shall mean generally accepted accounting principles which are in
effect in the United States at the time.
"MANAGING UNDERWRITER" shall have the meaning specified in Section
4.1(b) hereof.
"MINORITY INTEREST PERCENTAGE" shall have the meaning specified in
Section 4.1(c) hereof.
"MINORITY SHARES" shall have the meaning specified in Section 4.1(c)
hereof.
"OFFERED SHARES" shall have the meaning specified in Section 3.3(a)
hereof.
"OTHER MINORITY HOLDERS" shall have the meaning specified in Section
4.1(c) hereof.
"OTHER MINORITY INTEREST" shall have the meaning specified in Section
4.1(c) hereof.
"OUTSTANDING UAG SHARES" shall have the meaning specified in Section
4.1(c) hereof.
"PERSON" shall mean an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind.
"PUBLIC FLOAT DATE" shall mean the date on which shares of Common Stock
shall have been sold by the Company or its shareholders pursuant to a Public
Offering.
"PUBLIC OFFERING" shall mean the completion of a sale of Common Stock
pursuant to a registration statement which has become effective under the
Securities Act, excluding registration statements on Form S-4, S-8 or similar
forms.
"PURCHASE OFFER" shall have the meaning specified in Section 3.3(a)
hereof.
"PURCHASER" shall have the meaning specified in Section 3.3(a) hereof.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
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"SELLING SHAREHOLDER" shall have the meaning specified in Section 3.3(a)
hereof.
"SHAREHOLDERS" shall have the meaning specified in the preamble hereof.
"SHARES" shall have the meaning specified in the third recital hereof.
"SMITH EXCHANGED SHARES" shall have the meaning specified in Section
4.1(c) hereof.
"SMITH INTEREST" shall have the meaning specified in Section 4.1(a)
hereof.
"SMITH INTEREST PERCENTAGE" shall have the meaning specified in Section
4.1(c) hereof.
"SMITH INTEREST VALUE" shall have the meaning specified in Section
4.1(b) hereof.
"SMITH" shall have the meaning specified in the preamble hereof.
"SMITH PURCHASE" shall have the meaning specified in third recital
hereof.
"STOCK PURCHASE AGREEMENT" shall have the meaning specified in the third
recital hereof.
"SUBSIDIARY" shall mean (i) a corporation a majority of whose capital
stock with voting power, under ordinary circumstances, to elect directors is
at the time, directly or indirectly, owned by the Company, by a Subsidiary or
by the Company and a Subsidiary or (ii) any other Person (other than a
corporation) in which the Company, a Subsidiary or the Company and a
Subsidiary, directly or indirectly, at the date of determination thereof, has
at least a majority ownership interest.
"TAG-ALONG OFFER" shall have the meaning specified in Section 3.3(b)
hereof.
"TAG-ALONG PARTICIPATION NOTICE" shall have the meaning specified in
Section 3.3(b) hereof.
"TAG-ALONG SALE" shall have the meaning specified in Section 3.3 (b)
hereof.
"TAG-ALONG SALE NOTICE" shall have the meaning specified in Section
3.3(b) hereof.
"TAKE-ALONG SALE" shall have the meaning specified in Section 3.3(c)
hereof.
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"TOTAL EXCHANGED SHARES" shall have the meaning specified in Section
4.1(c) hereof.
"TOTAL INTEREST PERCENTAGE" shall have the meaning specified in Section
4.1(c) hereof.
"TRANSFER" shall have the meaning specified in Section 4.1(a) hereof.
"UAG" shall have the meaning specified in the preamble hereof.
"UAG/ATLANTA" shall have the meaning specified in the preamble hereof.
"UAG COMMON STOCK" shall have the meaning specified in Section 4.1(a)
hereof.
"UAG COMMON STOCK EQUIVALENTS" shall have the meaning specified in
Section 4.1(c) hereof.
"UAG COMMON STOCK PRICE" shall have the meaning specified in Section
4.1(b) hereof.
"UAG EXCHANGE" shall have the meaning specified in Section 4.1(a)
hereof.
"UAG EXCHANGE DATE" shall have the meaning specified in Section 4.1(c)
hereof.
"UAG Public Offering" shall have the meaning specified in Section 4.1(c)
hereof.
"UAG SHAREHOLDERS AGREEMENT" shall mean the Stockholders' Agreement,
dated as of October 15, 1993, among UAG and certain shareholders of UAG named
therein.
ARTICLE 2
EFFECTIVENESS OF AGREEMENT
SECTION 2.1. EFFECTIVE DATE.
This Agreement shall become effective as of the date and time (the
"Effective Date") the Smith Purchase shall have been consummated, and this
Agreement shall have no effect for any purpose unless and until the Smith
Purchase shall have occurred.
SECTION 2.2. STOCK PURCHASE AGREEMENT RESTRICTIONS.
Notwithstanding anything contained in this Agreement to the contrary,
Smith shall not transfer the Shares unless the
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Transfer is in accordance with the provisions of Section 1.3 of the Stock
Purchase Agreement.
ARTICLE 3
TRANSFER OF SECURITIES
SECTION 3.1. CONSENT OF UAG.
(a) Subject to the rights of Smith contained in Sections 3.3(b) and
4.1 hereof and for as long as UAG/Atlanta (or an Affiliate thereof) shall own
35% of the Fully-Diluted Shares, no Shareholder other than UAG/Atlanta shall
directly or indirectly Transfer (as defined below) any shares of capital
stock of the Company now or hereafter at any time owned by such Shareholder
or any interest therein, or the stock certificate or certificates
representing any such shares, or any voting trust certificate or certificates
issued with respect to such shares, without the prior written consent of UAG.
Any Transfer effected, or purported or attempted to be effected, not in
accordance with the terms and conditions of this Section 3.1, or to a Person
prohibited by law from holding shares of capital stock of the Company, shall
be void and shall not bind the Company. As used in this Agreement, the term
"Transfer" shall mean and include (i) when used as a verb, the act of
selling, pledging, mortgaging, hypothecating, giving, transferring, creating
a security interest, lien or trust (voting or otherwise), assigning or
otherwise encumbering or disposing of, and (ii) when used as a noun, any
sale, pledge, mortgage, hypothecation, gift, transfer, creation of security
interest, lien or trust, any assignment or other encumbrance or disposition.
(b) Notwithstanding the provisions of Section 3.1(a) hereof, but
subject to the provisions of Section 3.2(a) and (b) hereof, a Shareholder may
effect a Transfer of shares of capital stock of the Company by will or the laws
of descent and distribution to the legal representative of such Shareholder or
to such Shareholder's spouse, immediate family members or lineal descendants or
a trust the primary beneficiaries of which are such persons.
SECTION 3.2. GENERAL RESTRICTIONS.
No Shareholder (including UAG/Atlanta and any other Shareholder
permitted to Transfer shares of capital stock of the Company or any interest
therein in accordance with Section 3.1 hereof) shall, directly or indirectly,
Transfer any shares of capital stock of the Company or any interest therein,
whether voluntarily or involuntarily, unless:
(a) (i) such Transfer complies with the provisions of this Agreement,
including Section 3.3 hereof, if applicable, and (ii) the transferee (if other
than another Shareholder) agrees to
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be bound by this Agreement and executes a counterpart hereof and such further
documents as may be necessary, in the opinion of the Company, to make it a
party hereto (any such transferee shall be deemed to be a Shareholder for
purposes of this Agreement); and
(b) such Transfer is made pursuant to either (i) an effective
registration statement under the Securities Act and any applicable state
securities laws, or (ii) an available exemption from the registration
requirements of the Securities Act and such laws and, prior to any such
Transfer (other than a Transfer to another Shareholder), the Person proposing
the Transfer provides to the Company a written opinion of legal counsel
satisfactory in form and substance to the Company and its counsel to the
effect that the proposed Transfer may be effected without registration under
the Securities Act and any applicable state securities laws.
SECTION 3.3. RIGHT OF FIRST REFUSAL AND CO-SALE RIGHTS AND OBLIGATIONS.
(a) RIGHT OF FIRST REFUSAL.
(i) FIRST OFFER NOTICE. Except as otherwise permitted by Section
3.1(b) hereof, subject to Section 3.1(a) hereof, at any time prior to the
Public Float Date, no Shareholder (other than UAG/Atlanta (or an Affiliate
thereof)) shall transfer all or any of his shares of Common Stock (which
shall include all or any Common Stock Equivalents) (the "Offered Shares")
unless (x) such Shareholder (the "Selling Shareholder") has received a bona
fide written offer (the "Purchase Offer") from the proposed transferee of
the Offered Shares (the "Purchaser") to purchase the Offered Shares, which
offer shall be in writing signed by the Purchaser, and (y) the Selling
Shareholder first offers to sell to UAG/Atlanta the Offered Shares. Prior
to making any transfer that is subject to this Section 3.3(a), the Selling
Shareholder shall give UAG/Atlanta written notice (the "Offer Notice") which
shall include (x) the identity of the Purchaser, (y) a copy of the Purchase
Offer, and (z) an offer (the "First Offer") to sell to UAG/Atlanta the
Offered Shares upon the same terms and conditions as those provided for in
the Purchase Offer. The First Offer shall be irrevocable for a period of
thirty (30) days following receipt by UAG/Atlanta of the Offer Notice (the
"First Offer Period").
(ii) ACCEPTANCE OF FIRST OFFER. At any time during the First Offer
Period, UAG/Atlanta may accept the First Offer of the Offered Shares by
giving written notice to the Selling Shareholder of such acceptance. In the
event UAG/ Atlanta accepts the First Offer, the closing of the sale of the
Offered Shares shall take place within thirty (30) days after the First
Offer is accepted by UAG or, if later, the date of closing set forth in the
Purchaser Offer. At such
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closing, the Selling Shareholder will deliver certificates for such Offered
Shares against payment of the purchase price therefor, and UAG/Atlanta will
acquire the Offered Shares free and clear of all liens, pledges,
encumbrances, restrictions and security interests of any kind. If
UAG/Atlanta does not accept the First Offer, the Selling Shareholder may sell
the Offered Shares to the Purchaser at any time within thirty (30) days after
the last day of the First Offer Period, provided that such sale shall be made
on terms no less favorable to the Selling Shareholder than the terms
contained in the Purchase Offer and provided further that such sale complies
with the terms, conditions and restrictions of this Agreement. In the event
that the Offered Shares are not sold in accordance with the terms of the
preceding sentence, the Offered Shares shall again be subject to all of the
conditions and restrictions of this Section 3.3(a).
(b) TAG-ALONG-RIGHT.
(i) TAG-ALONG SALE NOTICE. If, at any time prior to the Public
Float Date, UAG/Atlanta (or an Affiliate thereof) receives a bona fide offer
(a "Tag-Along Offer") from a third party to purchase shares of Common Stock
from UAG (or an Affiliate thereof) or UAG/Atlanta otherwise proposes to sell
shares of Common Stock for value, in each case other than in connection with
a Public Offering (a "Tag-Along Sale"), UAG/Atlanta shall be required to
notify Smith, not less than fifteen (15) days prior to such proposed Tag-
Along Sale, of such Tag-Along Offer or proposed Tag-Along Sale and Smith
shall have the option to participate in such Tag-Along Sale as set forth in
clause (ii) of this Section 3.3(b). The notice from UAG/Atlanta (the "Tag-
Along Sale Notice") shall set forth: (A) the number of shares of Common
Stock proposed to be transferred, (B) the name and address of the proposed
purchaser, (C) the proposed amount of consideration and terms and conditions
of payment offered by or to such proposed purchaser, and (D) that the
proposed purchaser has been informed of the "tag-along" rights provided for
in this Section 3.3(b) and has agreed to purchase shares of Common Stock in
accordance with the terms hereof.
(ii) TAG-ALONG RIGHT. Any time prior to the Public Float Date,
Smith shall have the right to require the proposed purchaser to purchase
from him a number of whole shares of Common Stock up to the number of shares
equal to the total number of shares to be sold to the proposed purchaser
multiplied by a fraction, the numerator of which is the number of shares of
Common Stock held by him and the denominator of which is the total number of
shares of Common Stock held by him and UAG (or an Affiliate thereof). Any
shares of Common Stock purchased from Smith pursuant to this Section 3.3(b)
shall be paid for upon the same terms and conditions (includ-
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ing as to price and type of consideration) received by UAG/Atlanta.
(iii) TAG-ALONG NOTICE. If Smith elects to exercise the tag-along
right provided for in this Section 3.3(b), he must deliver written notice to
UAG/Atlanta (the "Tag-Along Participation Notice") within five (5) days
following receipt by him of the Tag-Along Sale Notice. If Smith does not
deliver a Tag-Along Participation Notice within such five-day period he
shall be deemed to have waived his tag-along right with respect to the
proposed Tag-Along Sale. Each Tag-Along Participation Notice shall state
the number of shares of Common Stock that Smith proposes to include in such
transfer to the proposed purchaser up to the number of shares determined in
accordance with Section 3.3(b)(ii) hereof.
(c) TAKE-ALONG RIGHT.
(i) TAKE-ALONG NOTICE. If UAG/Atlanta (or an Affiliate thereof)
at any time receives a bona fide offer from a third party to purchase shares
of Common Stock from UAG/Atlanta (or an Affiliate thereof) or UAG/Atlanta
(or an Affiliate thereof) otherwise proposes to sell shares of Common Stock
for value (a "Take-Along Sale"), UAG/Atlanta can require the other
Shareholders, to participate in such Take-Along Sale as set forth in clause
(ii) of this Section 3.3(c). If UAG/Atlanta elects to exercise the take-
along right provided for in this Section 3.3(c), it must provide, at least
twenty (20) days before the date of consummation of the proposed Take-Along
Sale, notice to each other Shareholder setting forth: (i) the number of
shares of Common Stock proposed to be transferred, (ii) the number of shares
of Common Stock that such Shareholder must include in such transfer to the
proposed purchaser as determined in accordance with clause (ii) of this
Section 3.3(c), (iii) the name and address of the proposed purchaser, (iv)
the proposed amount of consideration and terms and conditions of payment
offered by or to such proposed purchaser, and (v) that the proposed
purchaser has been informed of the "take-along" rights provided for in this
Section 3.3(c) and has agreed to purchase shares of Common Stock in
accordance with the terms hereof.
(ii) TAKE-ALONG RIGHT. UAG/Atlanta shall at any time have the
right to require each other Shareholder to sell to the proposed purchaser a
number of whole shares of Common Stock up to the number of shares equal to
the total number of shares to be sold to the proposed purchaser multiplied
by a fraction, the numerator of which is the number of shares of Common
Stock held by such other Shareholder and the denominator of which is the
total number of shares of Common Stock held by all of the Shareholders,
including UAG/Atlanta (or an Affiliate thereof). Any shares of Common Stock
purchased
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from Shareholders other than UAG/Atlanta pursuant to this Section
3.3(c) shall be paid for upon the same terms and conditions (including price
and type of consideration) received by UAG/Atlanta.
SECTION 3.4. LEGENDS ON STOCK CERTIFICATES.
For so long as shares of capital stock of the Company held by a Share-
holder are subject to this Agreement, all certificates representing such shares
shall bear the following legend:
The securities represented by this certificate are subject to
restrictions on transfer and certain other provisions of the
Shareholders' Agreement, dated as of July 26, 1996, as the same
may be amended from time to time, by and among United Auto
Group, Inc., UAG Atlanta, Inc., Inc., Atlanta Toyota (the
"Company"), John Smith and certain other shareholders of the
Company who may from time to time become parties to such
Shareholders' Agreement, a copy of which may be obtained at the
offices of the Company.
SECTION 3.5. IMPROPER TRANSFERS INEFFECTIVE.
Any purported transfer of Common Stock by a Shareholder which is not
permitted by the foregoing provisions of this Article 3, or which is in
violation of such provisions, shall be void and of no force and effect
whatsoever.
ARTICLE 4
EXCHANGE; LOAN TO SMITH
SECTION 4.1. EXCHANGE FOR UAG COMMON STOCK.
(a) In the event of an underwritten public offering pursuant to an
effective registration statement under the Securities Act covering the offering
and sale of common stock, par value $.0001 per share, of UAG ("UAG Common
Stock") for the account of UAG on a firm commitment basis (the "UAG Public
Offering"), Smith (and any transferee or Affiliate of Smith holding shares of
Common Stock) shall be required to exchange all shares of Common Stock
beneficially owned by them (and their transferees and Affiliates) (the "Smith
Interest") immediately prior to the closing of the UAG Public Offering for
shares of UAG Common Stock under the terms and conditions set forth below, and
UAG shall be required to exchange the Smith Interest for UAG Common Stock (such
exchange is hereinafter referred to as the "UAG Exchange").
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(b) If the parties are required to consummate the UAG Exchange, the
value of UAG (the "UAG Value") and the Company (the "Company Value") shall be
determined by the investment banking firm which is acting as managing
underwriter (the "Managing Underwriter") for the UAG Public Offering and such
determination shall be binding upon the parties hereto. In determining the
Company value, the Managing Underwriter shall satisfy itself that UAG's
overhead expenses are attributed to the Company and UAG's other subsidiaries
equitably. The value of the Smith Interest (the "Smith Interest Value") shall
be an amount equal to (A) the Company Value multiplied by (B) a fraction, the
numerator of which shall be equal to the aggregate number of shares of Common
Stock comprising the Smith Interest immediately prior to the UAG Exchange,
and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the UAG Exchange. The additional cost
which the Managing Underwriter charges to compute the UAG Value and the
Company Value shall be paid by UAG.
(c) The number of shares of UAG Common Stock to which Smith is
entitled upon the consummation of the UAG Exchange (the "Smith Exchanged
Shares") shall be determined by multiplying the Smith Interest Percentage (as
defined below) by the total number of shares of UAG Common Stock outstanding
immediately prior to the closing of the UAG Public Offering, which such
number of shares shall include all shares of UAG Common Stock issued in
respect of the Smith Interest pursuant to this Section 4.1 and to holders of
minority interests (the "Other Minority Holders") in subsidiaries of UAG (the
"Other Minority Interests") pursuant to agreements comparable to the
agreement contained in this Section 4.1 (collectively, the "Minority
Shares"), but shall not include any other shares of UAG Common Stock issuable
upon the exercise, conversion or exchange of all then outstanding rights,
warrants, options, indebtedness or other securities exercisable or
exchangeable for, or convertible into, directly or indirectly, UAG Common
Stock (collectively, "UAG Common Stock Equivalents"). Specifically, the
number of Smith Exchange Shares shall be determined by multiplying (A) the
number of Total Exchanged Shares (as defined below) by (B) a fraction, the
numerator of which shall be equal to the Smith Interest Percentage, and the
denominator of which shall be equal to the Total Interest Percentage (as
defined below). For purposes of this Section 4.1, (i) the "Smith Interest
Percentage" shall be determined by dividing the Smith Interest Value by the
UAG Value, (ii) the "Total Interest Percentage" shall equal the sum of all of
the "Minority Interest Percentages," each of which shall be determined
pursuant to the agreements between UAG and the Other Minority Holders
relating to the exchange of the Other Minority Interests for shares of UAG
Common Stock in connection with the UAG Public Offering, and (iii) the "Total
Exchanged Shares" shall be determined by dividing (A) the product of (x) the
Total Interest Percentage and (y) the total number of shares of UAG Common
Stock outstanding immediately prior to the closing of the UAG Public Offering
(the
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"Outstanding UAG Shares") (not including the Minority Shares and any shares
of UAG Common Stock issuable upon the exercise, conversion or exchange of any
UAG Common Stock Equivalent) by (B) an amount equal to 1 minus the Total
Interest Percentage. Expressed as a formula, the number of Smith Exchanged
Shares shall be determined as follows:
(TIP X OUS) WIP
-------------- x ---
(1 - TIP) TIP,
where "TIP" refers to the Total Interest Percentage, "OUS" refers to the
Outstanding UAG Shares and "WIP" refers to the Smith Interest Percentage.
(d) The Smith Exchanged Shares shall be issued immediately prior to the
occurrence of the UAG Public Offering and UAG shall not be required to issue
such shares if the UAG Public Offering is not consummated for any reason.
(e) Upon consummation of the UAG Exchange, (i) if the UAG Public
Offering is not a Qualified Public Offering (as such term is defined in UAG's
Amended and Restated Certificate of Incorporation) or the UAG Shareholders
Agreement otherwise remains in full force or effect, then Smith shall become a
party to the UAG Shareholders Agreement and (ii) Smith agrees to take such
actions and to execute such instruments as UAG may reasonably request to
evidence the consummation of the UAG Exchange and the change in the agreement
between the parties hereto as a result of the UAG Exchange.
SECTION 4.2. LOAN TO SMITH.
If the Smith Interest is exchanged for UAG Common Stock pursuant to
Section 4.1 hereof prior to the third anniversary of the date of this
Shareholders' Agreement, then UAG shall, at Smith's request, loan to Smith an
amount equal to fifty (50%) percent of the amount of any income taxes that
Smith incurs as a result of the exchange if Smith is required to make a tax
payment within 120 days after the date of the exchange, such loan to bear
interest at the prime rate set by NationsBank, N.A. on the date of the
exchange with interest and principal payable in full 120 days after the date
of the exchange.
ARTICLE 5
MISCELLANEOUS
SECTION 5.1. TERM.
All provisions of this Agreement shall terminate upon consummation of
the UAG Exchange or, in respect of any Shareholder, when such Shareholder no
longer owns any capital stock of the Company.
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SECTION 5.2. AMENDMENT; WAIVER.
This Agreement may be altered or amended only with the written consent
of all of the parties hereto. Any term of this Agreement and the observance
of any term herein may be waived (either generally or in a particular
instance and either retroactively or prospectively) by any party hereto only
with the written consent of such party, provided that any such waiver by any
party hereto shall not operate or be construed as a waiver of any other term
or observance of any term herein, whether or not similar.
SECTION 5.3. SPECIFIC PERFORMANCE.
The parties recognize that the obligations imposed on them in this
Agreement are special, unique and of extraordinary character, and that in the
event of breach by any party, damages will be an insufficient remedy;
consequently, it is agreed that the parties hereto may have specific
performance (in addition to damages) as a remedy for the enforcement hereof,
without proving damages.
SECTION 5.4. ASSIGNMENT.
Except as otherwise expressly provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and permitted assigns of the parties hereto.
This Agreement may be assigned by a Shareholder only in connection with a
Transfer of any shares of Common Stock in accordance with the terms of this
Agreement; PROVIDED, HOWEVER, that the rights of Smith contained in Sections
3.3 and 4.2 hereof cannot be assigned or otherwise transferred in connection
with any Transfer of shares of Common Stock by Smith without the prior
written consent of UAG. No assignment of this Agreement shall relieve the
assignor from any liability hereunder.
SECTION 5.5. SHARES SUBJECT TO THIS AGREEMENT.
All shares of capital stock of the Company now owned or hereafter
acquired by any of the Shareholders shall be subject to the terms of this
Agreement.
SECTION 5.6. ADDITIONAL SHAREHOLDERS.
The Company covenants that it shall not issue or cause to be issued at
any time prior to the Public Float Date any shares of capital stock of the
Company to any Person in any transaction not involving a Public Offering of
such shares, unless as a condition to such issuance such Person agrees to
become a party to this Agreement and to be bound by all the obligations of a
Shareholder under this Agreement. Stock certificates issued to
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such Persons shall be marked as provided in Section 3.4 hereof. No shares of
capital stock of the Company shall be transferred on the books of the Company
until all the applicable provisions of this Agreement have been complied with.
SECTION 5.7. LEGEND.
Certificates evidencing shares of capital stock shall bear such legends
as the Company shall reasonably deem necessary to protect the rights of the
parties hereunder.
SECTION 5.8. NOTICES.
All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered, or
express mail, postage prepaid, to the parties at the addresses sent forth
below. Notices or other communications given by certified, registered, or
express mail shall be deemed given three (3) Business Days after the date of
mailing. Notices or other communications sent in any other manner shall be
deemed given only when actually received.
If to Smith:
Mr. John Smith
c/o Atlanta Toyota, Inc.
2345 Pleasant Hill Road
Duluth, Georgia 30136
If to UAG or UAG/Atlanta or the Company:
United Auto Group, Inc.
375 Park Avenue
New York, New York 10022
Facsimile No.: (212) 223-5148
Attn: George G. Lowrance, Esq.,
Executive Vice President and
General Counsel
with a copy to:
Rogers & Hardin
229 Peachtree Street, N. E.
Suite 2700
Atlanta, Georgia 30303
Attn: Michael Rosenzweig, Esq.
or such other address as shall be furnished in writing by such party, and any
such notice or communication shall be effective and be deemed to have been
given as of the date so delivered or three (3) days after the date so mailed;
PROVIDED, HOWEVER, that
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any notice or communication changing any of the addresses set forth above
shall be effective and deemed given only upon its receipt.
SECTION 5.9. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, and which counterparts together shall
constitute one and the same agreement of the parties hereto.
SECTION 5.10. SECTION HEADINGS.
Headings contained in this Agreement are inserted only as a matter of
convenience and in no way define, limit or extend the scope or intent of this
Agreement or any provisions hereof.
SECTION 5.11. GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Georgia, without giving effect to the choice-of-law
provisions thereof.
SECTION 5.12. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the parties hereto
respecting the subject matter hereof and supersedes all prior agreements,
discussions, and understandings among such parties with respect to such subject
matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
UNITED AUTO GROUP, INC.
By: /s/ Carl Spielvogel
--------------------------------
Name: Carl Spielvogel
------------------------------
Title: CEO
-----------------------------
UAG ATLANTA, INC.
By: /s/ Carl Spielvogel
-------------------------------
Name: Carl Spielvogel
Title: CEO
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ATLANTA TOYOTA, INC.
By: /s/ Carl Spielvogel
------------------------------
Name: Carl Spielvogel
John Smith
----------------------------------
JOHN R. SMITH, Individually
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