STOCK PURCHASE AGREEMENT
DATED AS OF AUGUST 5, 1996
AMONG
UNITED AUTO GROUP, INC.,
UAG ATLANTA IV, INC.,
CHARLES EVANS BMW, INC.,
AND
CHARLES F. EVANS
This STOCK PURCHASE AGREEMENT, as of August 5, 1996 is by and among
United Auto Group, Inc., a Delaware corporation ("UAG"), UAG Atlanta IV, Inc., a
Delaware corporation ("Sub"), Charles Evans BMW, Inc., a Georgia corporation
(the "Company"), and Charles F. Evans ("Evans" or the "Stockholder").
W I T N E S S E T H:
WHEREAS, the Company operates a BMW automobile dealership and related
businesses in Duluth, Georgia;
WHEREAS, the Stockholder owns all of the issued and outstanding shares of
common stock of the Company (the "Common Stock");
WHEREAS, Sub is a wholly-owned subsidiary of UAG; and
WHEREAS, Sub desires to purchase all of the issued and outstanding
shares of the Common Stock from the Stockholder (such shares being
collectively referred to herein as the "Shares"), and the Stockholder desires
to sell the Shares to Sub (upon the terms and subject to the conditions set
forth in this Agreement), such that immediately after giving effect to such
purchase and sale, Sub will own one hundred (100%) percent of all of the
issued and outstanding shares of Common Stock, on a fully diluted basis;
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
1.1 PURCHASE AND SALE OF THE SHARES.
(a) PURCHASE AND SALE. Upon the terms and subject to the conditions
set forth in this Agreement, the Stockholder shall sell to Sub, and Sub shall
purchase from the Stockholder, the Shares for an aggregate purchase price equal
to Ten Million Dollars ($10,000,000) (the "Base Price"), which Base Price is
subject to adjustment after Closing as provided in SECTION 1.2 hereof. At the
Closing referred to in SECTION 1.1(b) hereof:
(i)the Stockholder shall sell, assign, transfer and deliver to Sub
the Shares representing 100% of the outstanding Common Stock, free and clear
of all Liens (as defined in SECTION 10.11), and shall deliver the
certificates representing such Shares accompanied by stock powers duly
executed in blank; and
(ii) Sub shall accept and purchase the Shares from the Stockholder and
in payment therefor shall deliver to the Stockholder immediately available
funds in an
aggregate amount equal to the Base Price by wire transfer to an
account designated in writing by the Stockholder or by certified funds.
(b) CLOSING. Subject to the conditions set forth in this Agreement, the
purchase and sale of the Shares pursuant to this Agreement (the "Closing") shall
take place at the offices of Rogers & Hardin, 2700 Cain Tower, Peachtree Center,
229 Peachtree Street, N.E., Atlanta, Georgia 30303, or such other location as
the parties shall agree, within ten (10) Business Days of the UAG Public
Offering Date (as defined in SECTION 10.11) or on November 30, 1996, whichever
occurs first (the "Closing Date") The date on which the Closing occurs is
herein referred to as the "Closing Date". The Closing shall take place on the
same date as the closing of the Stock Purchase Agreement dated as of August 5,
1996 between UAG, Sub, Charles Evans Nisan, Inc. and Evans.
(c) DELIVERIES AT THE CLOSING. Subject to the conditions set forth in
this Agreement, at the Closing:
(i) The Stockholder shall deliver to Sub (A) certificates representing
the Shares bearing the restrictive legend customarily placed on securities
that have not been registered under applicable federal and state securities
laws and accompanied by stock powers as required by SECTION 1.1(a)(i)
hereof, and any other documents that are necessary to transfer to Sub good
title to all the Shares, and (B) all opinions, certificates and other
instruments and documents required to be delivered by the Stockholder at or
prior to the Closing or otherwise required in connection herewith;
(ii) Sub shall pay and deliver to the Stockholder funds as required by
SECTION 1.1(a)(ii) hereof and all opinions, certificates and other
instruments and documents required to be delivered by Sub at or prior to the
Closing or otherwise required in connection herewith;
(iii) The Stockholder and Sub shall enter into a real estate purchase
agreement in a form mutually acceptable to the parties (the "Real Estate
Purchase Agreement") pursuant to which Sub shall agree to purchase the real
property used in the business of the Company and commonly known as 3624
Commerce Ave., Duluth, Georgia (the "BMW Property"), on or before the
eighteen-month anniversary of the Closing Date. If the closing of the Real
Estate Purchase Agreement (the "Real Estate Closing") takes place on or
before the six-month anniversary of the Closing Date, the purchase price for
the BMW Property (the "Real Estate Purchase Price") shall be Six Million
Dollars ($6,000,000). If the Real Estate Closing takes place after the six-
month anniversary of the Closing Date but on or before the one-year
anniversary of the Closing Date, then the Real Estate Purchase Price shall
be Six Million Five Hundred Thousand Dollars ($6,500,000). If the Real
Estate Closing takes place after the one-year anniversary of the Closing
Date, the Real Estate Purchase Price shall be Seven Million Five Hundred
Thousand Dollars ($7,500,000).
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(iv) Sub shall pay and deliver to Stockholder a deposit in the amount
of Seven Hundred Thousand Dollars ($700,000) (the "Real Estate Deposit"),
such deposit to be credited against the Real Estate Purchase Price at the
Real Estate Closing. The Real Estate Deposit shall be non-refundable;
PROVIDED, HOWEVER, that the Stockholder shall refund the Real Estate Deposit
if the Stockholder is unwilling or unable to consummate the sale of the BMW
Property pursuant to the terms of the Real Estate Purchase Agreement; and
(v) the Stockholder, Sub and the Company shall enter into a lease for
the BMW Property in a form mutually acceptable to the parties (the "BMW
Lease"). The initial lease rate shall be $45,000 per month and on the six-
month anniversary of the Closing Date shall increase to $55,000 per month.
The BMW Lease payments shall be paid monthly commencing on the Closing Date.
The Lease shall terminate at the Real Estate Closing.
1.2 NET WORTH ADJUSTMENT.
(a) As soon as practicable after the Closing Date, the Stockholder shall
deliver to Sub a balance sheet of the Company dated as of the Closing Date (such
balance sheet so delivered is referred to herein as the "Closing Date Balance
Sheet"). The Closing Date Balance Sheet shall be prepared in good faith on the
same basis and in accordance with the accounting principles, methods and
practices used in preparing the Company Financial Statements (as defined in
SECTION 2.5 hereof), subject to the modifications, adjustments and exceptions to
such accounting principles, methods and practices set forth on SCHEDULE 1.2(a)
hereto (such accounting principles, methods and practices as so modified and
adjusted, and such procedures, are referred to herein as the "Accounting
Principles"). In connection with the preparation of the Closing Date Balance
Sheet, the Stockholder and the Company and the Reviewer (as defined below) and
other representatives of Sub will conduct a physical inventory at each location
where inventory is held by the Company. From the results of such inventory and
prior to the Closing Date, Sub and the Stockholder (or the respective
representatives thereof) will prepare a schedule, which shall be signed by each
of Sub and the Stockholder, setting forth the nature and quality of such inven-
tory and such other items as shall be agreed upon by Sub and the Stockholder to
be included in the Closing Date Balance Sheet.
(b) Within forty-five (45) days after delivery of the Closing Date
Balance Sheet, (i) Coopers & Lybrand or such other national accounting firm (the
"Reviewer") selected by Sub, shall audit or otherwise review the Closing Date
Balance Sheet in such manner as Sub and the Reviewer deem appropriate, and (ii)
Sub shall deliver such reviewed balance sheet (the "Reviewed Balance Sheet"),
together with the Reviewer's report thereon, to the Stockholder. The Reviewed
Balance Sheet (i) shall be prepared on the same basis and in accordance with the
Accounting Principles and (ii) shall include a schedule showing the computation
of the Final Net Worth (as defined in SECTION 1.2(g)(i) hereof), computed in
accordance with the definition of Net Worth set forth in SECTION 1.2(g)(iii)
hereof. Sub and the Reviewer shall have the opportunity to consult with the
Stockholder, the Company and
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each of the accountants and other representatives of the Stockholder and the
Company and examine the work papers, schedules and other documents prepared
by the Stockholder, the Company and each of such accountants and other
representatives during the preparation of the Closing Date Balance Sheet.
The Stockholder and the Stockholder's independent public accountants shall
have the opportunity to consult with the Reviewer and examine the work
papers, schedules and other documents prepared by Sub and the Reviewer during
the preparation of the Reviewed Balance Sheet.
(c) The Stockholder shall have a period of forty-five (45) days after
delivery to the Stockholder of the Reviewed Balance Sheet to present in writing
to Sub all objections the Stockholder may have to any of the matters set forth
or reflected therein, which objections shall be set forth in reasonable detail.
During said forty-five (45) day period, the Stockholder, their accountants and
other representatives of the Stockholder may, at the office of the Company or
the office of the Reviewer, as determined by Stockholder, examine Reviewer's
work papers, schedules, research notes and all correspondence between Reviewer
and Sub or UAG or any representative of Sub or UAG, which relate to the Closing
Date Balance Sheet or Reviewed Balance Sheet and any entry thereto made,
considered or proposed by Reviewer. If no objections are raised within such 45-
day period, the Reviewed Balance Sheet shall be deemed accepted and approved by
the Stockholder and a supplemental closing (the "Supplemental Closing") shall
take place within five (5) Business Days following the expiration of such 45-day
period, or on such other date as may be mutually agreed upon in writing by Sub
and the Stockholder.
(d) If the Stockholder shall raise any objection within the 45-day
period, Sub and the Stockholder shall attempt to resolve the matter or matters
in dispute and, if resolved, the Supplemental Closing shall take place within
five (5) Business Days following such resolution.
(e) If such dispute cannot be resolved by Sub and the Stockholder within
sixty (60) days after the delivery of the Reviewed Balance Sheet, then the
specific matters in dispute shall be submitted to a firm of independent
certified public accountants having a reputation for special expertise in
automobile dealership accounting and mutually acceptable to Sub and the
Stockholder, which firm shall make a final and binding determination as to such
matter or matters. Such accounting firm shall send its written determination to
Sub and the Stockholder and the Supplemental Closing, if any, shall take place
five (5) Business Days following the receipt of such determination by Sub and
the Stockholder. The fees and expenses of the accounting firm referred to in
this SECTION 1.2(e) shall be paid one half by Sub and one half by the
Stockholder.
(f) Sub and the Stockholder agree to cooperate with each other and each
other's authorized representatives and with any accounting firm selected by Sub
and the Stockholder pursuant to SECTION 1.2 (e) hereof in order that any and all
matters in dispute shall be resolved as soon as practicable.
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(g) (i) If the Net Worth as shown on the Reviewed Balance Sheet as
finally determined through the operation of SECTIONS 1. 2 (a) THROUGH (e) hereof
shall be less than Two Million Three Hundred Thousand Dollars ($2,300,000) (the
amount of any such deficiency being referred to herein as the "Net Worth Defi-
ciency"), the Stockholder shall pay to Sub at the Supplemental Closing, by wire
transfer of immediately available funds to an account designated in writing by
Sub within two (2) Business Days of the date of the Supplemental Closing, an
amount equal to the Net Worth Deficiency, together with interest on such amount
from the date that is two Business Days after the Reviewed Balance Sheet is
delivered to the Stockholder until such amount is paid in full at the prime rate
or its equivalent (as announced from time to time by Citibank, N.A.).
(ii) If the Net Worth as shown on the Closing Date Balance Sheet is
equal to or greater than Two Million Three Hundred Thousand Dollars ($2,300,000)
and the Net Worth as shown on the Reviewed Balance Sheet as finally determined
through the operation of SECTIONS 1.2(a) THROUGH (e) hereof shall be greater
than the Net Worth as shown on the Closing Date Balance Sheet, then Sub shall
pay to the Stockholder at the Supplemental Closing an amount equal to the
difference between the Net Worth as shown on the Reviewed Balance Sheet and the
Net Worth as shown on the Closing Date Balance Sheet.
(iii) "Net Worth" computed in connection with the Closing Date
Balance Sheet and the Reviewed Balance Sheet shall mean the amount by which the
total assets exceed the total liabilities reflected, in each case, on the
balance sheet of Company comprising the Closing Date Balance Sheet or the
Reviewed Balance Sheet, as the case may be.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE STOCKHOLDER
Subject to the parties' agreement and acknowledgment that the Schedules
referred to in this ARTICLE 2 are to be delivered by the Company and the
Stockholder no later than August 15, 1996, the Company and the Stockholder
hereby jointly and severally represent and warrant to UAG and Sub as follows:
2.1 ORGANIZATION AND GOOD STANDING.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia and has the corporate power and
authority to own, lease and operate the properties used in its business and to
carry on its business as now being conducted. The Company has not conducted its
business under any assumed names during the last five years. Attached as
SCHEDULE 2.1(b) are complete and correct copies of the Company's Articles of
Incorporation and Bylaws as amended and presently in effect.
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2.2 SUBSIDIARIES.
The Company does not have any interest or investment in any Person (as
defined in SECTION 10.11 hereof).
2.3 CAPITALIZATION.
The authorized stock of the Company and the number of shares of capital
stock that are issued and outstanding are set forth on SCHEDULE 2.3 hereto. The
shares listed on SCHEDULE 2.3 hereto constitute all the issued and outstanding
shares of capital stock of the Company and have been validly authorized and
issued, are fully paid and nonassessable, have not been issued in violation of
any preemptive rights or of any federal or state securities law and no personal
liability attaches to the ownership thereof. There is no security, option,
warrant, right, call, subscription, agreement, commitment or understanding of
any nature whatsoever, fixed or contingent, that directly or indirectly (i)
calls for the issuance, sale, pledge or other disposition of any shares of
capital stock of the Company or any securities convertible into, or other rights
to acquire, any shares of capital stock of the Company, or (ii) obligates the
Company to grant, offer or enter into any of the foregoing, or (iii) relates to
the voting or control of such capital stock, securities or rights, except as
provided in this Agreement. The Company has not agreed to register any
securities under the Securities Act.
2.4 AUTHORITY; APPROVALS AND CONSENTS.
The Company has the corporate power and authority to enter into this
Agreement and to perform its obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby and thereby have been duly authorized and
approved by the Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize and approve
this Agreement and the transactions contemplated hereby and thereby. This
Agreement has been duly executed and delivered by, and constitutes a valid and
binding obligation of, the Company, enforceable against the Company in
accordance with its terms. The execution, delivery and performance by the
Company and the Stockholder of this Agreement and Real Estate Purchase Agreement
and the consummation of the transactions contemplated hereby and thereby do not
and will not:
(i) contravene any provisions of the Articles of Incorporation or By-
Laws of the Company;
(ii) (after notice or lapse of time or both) conflict with, result in a
breach of any provision of, constitute a default under, result in the
modification or cancellation of, or give rise to any right of termination or
acceleration in respect of, any Company Agreement (as defined in SECTION
2.15 hereof) or, require any consent or waiver of any party to any Company
Agreement (except for the rights of BMW of North America, Inc. ("BMW") under
the BMW Dealer Agreement between BMW and Evans (the "BMW Agreement");
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(iii) result in the creation of any Lien upon, or any Person obtaining
any right to acquire, any properties, assets or rights of the Company (other
than the rights of Sub to acquire the Shares pursuant to this Agreement);
(iv) violate or conflict with any Legal Requirements (as defined in
SECTION 2.9 hereof) applicable to the Company or any of its businesses or
properties; or
(v) require any authorization, consent, order, permit or approval of,
or notice to, or filing, registration or qualification with, any
governmental, administrative or judicial authority, except in connection
with or in compliance with the provisions of the H-S-R Act (as defined in
SECTION 5.11 hereof).
Except as referred to above, no permit or approval of, or notice to any
governmental, administrative or judicial authority is necessary to be obtained
or made by the Company to enable the Company to continue to conduct its business
and operations and use its properties after the Closing in a manner which is in
all material respects consistent with that in which they are presently
conducted.
2.5 FINANCIAL STATEMENTS.
Attached as SCHEDULE 2.5 are true and complete copies of:
(i) (A) the audited balance sheet of the Company as of December 31,
1995 (the "Company Balance Sheet"), and the related statements of income,
stockholders' equity and cash flow for the fiscal year ended December 31,
1995, together with the notes thereto, in each case examined by and
accompanied by the report of independent certified public accountants, and
(B) the audited balance sheet of the Company as of December 31, 1994, and
the related statements of income, stockholders' equity and cash flow for the
fiscal year ended December 31, 1994, together with the notes thereto, in
each case examined by and accompanied by the report of independent certified
public accountants; and
(ii) the most recent unaudited balance sheet of the Company and the
unaudited statements of income and stockholders' equity for the periods
ended on such date, together with the notes thereto;
(iii) the most recent monthly and year-to-date financial statements
provided to BMW (the "Company Factory Statements");
(the financial statements referred to in clauses (i) and (ii) above, including
the notes thereto, being referred to herein collectively as the "Company
Financial Statements"). The Company Financial Statements are in accordance with
the books and records of the Company, fairly present the consolidated financial
position, results of operations, stockholders' equity and changes in the
financial position of the Company as of the dates and for the periods indi-
cated, in the case of the financial statements referred to in clauses (i) and
(ii) above in
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conformity with GAAP consistently applied (except as otherwise
indicated in such statements) during such periods, and can be legitimately
reconciled with the financial statements and the financial records maintained
and the accounting methods applied by the Company for federal income tax pur-
poses, and the unaudited financial statements included in the Company Financial
Statements include all adjustments, which consist of only normal recurring
accruals, necessary for such fair presentations. The statements of income
included in the Company Financial Statements do not contain any items of special
or nonrecurring income except as expressly specified therein, and the balance
sheets included in the Company Financial Statements do not reflect any write-up
or revaluation increasing the book value of any assets except as expressly
stated therein. The books and accounts of the Company are complete and correct
in all material respects and fairly reflect all of the transactions, items of
income and expense and all assets and liabilities of the businesses of the
Company consistent with prior practices of the Company.
2.6 ABSENCE OF UNDISCLOSED LIABILITIES.
The Company does not have any liability of any nature whatsoever (whether
asserted or unasserted, due or to become due, accrued, absolute, contingent or
otherwise), including, without limitation, any unfunded obligation under
employee benefit plans or arrangements as described in SECTION 2.17 AND 2.18
hereof or liabilities for Taxes (as defined in SECTION 2.8 hereof), except for
(i) liabilities reflected or reserved against in the most recent Company
Financial Statement, (ii) current liabilities incurred in the ordinary course of
business and consistent with past practice after the date of the Company Balance
Sheet which, individually and in the aggregate, do not have, and cannot reason-
ably be expected to have, a Material Adverse Effect, and (iii) liabilities
disclosed on SCHEDULE 2.6 hereto. The Company is not a party to any Company
Agreement, or subject to any articles of incorporation or bylaw provision, any
other corporate limitation or any Legal Requirement which has, or can reasonably
be expected to have, a Material Adverse Effect.
2.7 ABSENCE OF MATERIAL ADVERSE EFFECT; CONDUCT OF BUSINESS.
(a) Since December 31, 1995, except as set forth on SCHEDULE 2.7(a)
hereto, the Company has operated in the ordinary course of business consistent
with past practice and there has not been:
(i) any material adverse change in the assets, properties, business,
operations, prospects, net income or financial condition of the Company and
no factor, event, condition, circumstance or prospective development exists
which threatens or may threaten to have a Material Adverse Effect;
(ii) any material loss, damage, destruction or other casualty to the
property or other assets of the Company, whether or not covered by
insurance;
(iii) any change in any method of accounting or accounting practice of
the Company; or
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(iv) any loss of the employment, services or benefits of any key
employee of the Company (except for any such loss occurring after the
execution of this Agreement but prior to the Closing Date and disclosed to
UAG on or before the Closing Date).
(b) Since December 31, 1995, except as set forth in SCHEDULE 2.7(b)
hereto, the Company has not:
(i) incurred any material obligation or liability (whether absolute,
accrued, contingent or otherwise), except in the ordinary course of business
consistent with past practice;
(ii) failed to disclose or satisfy any lien or pay or satisfy any
obligation or liability (whether absolute, accrued, contingent or
otherwise), other than liabilities being contested in good faith and for
which adequate reserves have been provided;
(iii) mortgaged, pledged or subjected to any lien any of its property
or other assets except for mechanics' liens and liens for taxes not yet due
and payable;
(iv) sold or transferred any assets or cancelled any debts or claims or
waived any rights, except in the ordinary course of business consistent with
past practice;
(v) defaulted on any material obligation;
(vi) entered into any material transaction, except in the ordinary
course of business consistent with past practice;
(vii) written down the value of any inventory or written off as
uncollectible any accounts receivable or any portion thereof not reflected
in the Company Financial Statements;
(viii) granted any increase in the compensation or benefits of
employees other than increases in accordance with past practice not
exceeding 10% or entered into any employment or severance agreement
or arrangement with any of them (except for agreements or arrangements
that are in the ordinary course of business consistent with past
practices, that will be reflected as expenses on the Company's financial
statements prior to the Closing Date and that will not bind the Company
after the Closing Date);
(ix) made any individual capital expenditure in excess of $75,000, or
aggregate capital expenditures in excess of $200,000, or additions to
property, plant and equipment other than ordinary repairs and maintenance;
(x) discontinued any franchise or the sale of any products or product
line;
(xi) incurred any obligation or liability to any employee for the
payment of severance benefits; or
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(x) entered into any agreement or made any commitment to do any of the
foregoing.
2.8 TAXES.
The Company and, for any period during all or part of which the tax
liability of any other corporation was determined on a combined or consolidated
basis with the Company any such other corporation, have filed timely all
federal, state, local and foreign tax returns, reports and declarations required
to be filed correctly reflecting the Taxes (as defined below) and all other
information required to be reported thereon and have paid, or made adequate
provision for the payment of, all Taxes which are due pursuant to such returns
or pursuant to any assessment received by the Company or any such other cor-
poration. As used herein, "Taxes" shall mean all taxes, fees, levies or other
assessments, including but not limited to income, excise, property (including
property taxes paid by the Company pursuant to any lease), sales, franchise,
withholding, social security and unemployment taxes imposed by the United
States, any state, county, local or foreign government, or any subdivision or
agency thereof or taxing authority therein, and any interest, penalties or
additions to tax relating to such taxes, charges, fees, levies or other
assessments. Copies of all tax returns for each fiscal year since the formation
of the Company have been furnished or made available to UAG or its
representatives and such copies are accurate and complete as of the date hereof.
The Company has also furnished or made available to UAG correct and complete
copies of all notices and correspondence sent or received since the formation of
the Company by the Company to or from any federal, state or local tax
authorities. The Company filed all returns and paid all taxes for the period
ending December 31, 1995. In the ordinary course, the Company makes adequate
provision on its books for the payment of all Taxes (including for the current
fiscal period) owed by the Company. Except to the extent reserves therefor are
reflected on the Company Balance Sheet, the Company is not liable, or will not
become liable, for any Taxes for any period ending on, prior to or through the
date of the Company Balance Sheet. On the Closing Date Balance Sheet, the
Company will have adequately reserved for the payment of any Taxes for any
period ending on, prior to or through the date of the Closing Date Balance
Sheet. Except as set forth on SCHEDULE 2.8 hereto, the Company has not been
subject to a federal or state tax audit of any kind, and no adjustment has been
proposed by the Internal Revenue Service ("IRS") with respect to any return for
any subsequent year. With respect to the audits referred to on SCHEDULE 2.8
hereto, no such audit has resulted in an adjustment in excess of $50,000. Nei-
ther the Company nor the Stockholder knows of any basis for an assertion of a
deficiency for Taxes against the Company. The Stockholder will cooperate with
the Company in the filing of any returns and in any audit or refund claim
proceedings involving Taxes for which the Company may be liable or with respect
to which the Company may be entitled to a refund.
2.9 LEGAL MATTERS.
(a) Except as set forth on SCHEDULE 2.9(a) hereto and except for Claims
(as defined below) that do not exceed Thirty Thousand Dollars ($30,000), (i)
there is no claim, action, suit, litigation, investigation, inquiry, review or
proceeding (collectively, "Claims")
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pending against, or, to the knowledge of the Company or the Stockholder,
threatened against or affecting, the Company, any ERISA Plan (as defined in
SECTION 2.18(a) hereof) or any of their respective assets, properties or
rights before or by any court, arbitrator, panel, agency or other
governmental, administrative or judicial entity, domestic or foreign, nor is
any basis known to the Stockholder or the Company for any such Claims, and
(ii) the Company is not subject to any judgment, decree, writ, injunction,
ruling or order (collectively, "Judgments") of any governmental,
administrative or judicial authority, domestic or foreign. SCHEDULE 2.9(a)
hereto identifies each Claim and Judgment disclosed thereon which is fully
covered by an insurance policy.
(b) The businesses of the Company are being conducted in compliance with
all laws, ordinances, codes, rules, regulations, standards, judgments and other
requirements of all governmental, administrative or judicial entities
(collectively, "Legal Requirements") applicable to the Company or any of its
respective businesses or properties. The Company holds, and is in compliance
with, all franchises, licenses, permits, registrations, certificates, consents,
approvals or authorizations (collectively, "Permits") required by all applicable
Legal Requirements. A list of all such permits is set forth on SCHEDULE 2.9(b)
hereof.
(c) The Company owns or holds all Permits material to the conduct of its
business. No event has occurred and is continuing which permits, or after
notice or lapse of time or both would permit, any modification or termination of
any Permit.
2.10 PROPERTY.
(a) The properties and assets owned by or leased to the Company are
adequate for the conduct of the respective businesses of the Company as
presently conducted. Set forth on SCHEDULE 2.10 hereto is a list of all
interests in real property owned by or leased to the Company (including all
real property owned or leased by the Stockholder (directly or indirectly) and
used in the businesses of the Company) and of all options or other contracts
to acquire any such interest (collectively, the "Real Property"). All
improvements to the Real Property ("Improvements") and all machinery,
equipment and other tangible property owned or used by or leased to the
Company are in good operating condition and in good repair and are fit for
the particular purposes for which they are used by the Company, subject only
to ordinary wear and tear. Such tangible properties and all Improvements
owned or leased by the Company conform in all material respects with all
applicable laws, ordinances, rules and regula-tions and other Legal
Requirements and such Improvements do not encroach in any respect on property
of others. There are no latent defects with respect to the Improvements.
The Real Property is currently zoned to permit the conduct of the respective
businesses of the Company as presently conducted. A Certificate of Occupancy
has been issued with respect to the Improvements without special conditions
or restrictions. All utilities servicing the Real Property and the
Improvements are provided by publicly-dedicated utility lines and are located
within public rights-of-way and do not cross or encumber any private land.
No notice of any pending, threatened or contemplated action by any
governmental authority or agency having the power of eminent domain has been
given to the Company or the Stockholder with respect to the Real Property.
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2.11 ENVIRONMENTAL MATTERS.
(a) Except as set forth on SCHEDULE 2.11(a) hereto, (i) the Company, the
Real Property, the Improvements and any property formerly owned, occupied or
leased by the Company are in full compliance with all Environmental Laws (as
defined below), (ii) the Company has obtained all Environmental Permits (as
defined below), (iii) such Environmental Permits are in full force and effect,
and (iv) the Company is in full compliance with all terms and conditions of such
Environmental Permits. As used herein, "Environmental Laws" shall mean all
applicable requirements of environmental, public or employee health and safety,
public or community right-to-know, ecological or natural resource laws or
regulations or controls, including all applicable requirements imposed by any
law (including without limitation common law), rule, order, or regulations of
any federal, state, or local executive, legislative, judicial, regulatory, or
administrative agency, board, or authority, or any applicable private agreement
(such as covenants, conditions and restrictions), which relate to, (i) noise,
(ii) pollution or protection of the air, surface water, groundwater, or soil,
(iii) solid, gaseous, or liquid waste generation, treatment, storage, disposal
or transportation, (iv) exposure to Hazardous Materials (as defined below), or
(v) regulation of the manufacture, processing, distribution and commerce, use,
or storage of Hazardous Materials. As used herein, "Environmental Permits"
shall mean all permits, licenses, approvals, authorizations, consents or
registrations required under applicable Environmental Law in connection with the
ownership, use and/or operation of the Company's business or the Real Property
or Improvements.
As used in this SECTION 2.11, "Hazardous Materials" shall mean,
collectively, (i) those substances included within the definitions of or
identified as "hazardous chemicals," "hazardous waste," "hazardous
substances," "hazardous materials," "toxic substances" or similar terms in or
pursuant to, without limitation, the Comprehensive Environmental Response
Compensation and Liability Act of 1980 (42 U.S.C. 9601 ET SEQ.) ("CERCLA"),
as amended by Superfund Amendments and Reauthorization Act of 1986 (Pub. L.
99-499, 100 State, 1613), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901 ET SEQ.) ("RCRA"), the Occupational Safety and
Health Act of 1970 (29 U.S.C. Section 651 ET SEQ.) ("OSHA"), and the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 ET SEQ.
("HMTA"), and in the regulations promulgated pursuant to such laws, all as
amended, (ii) those substances listed in the United States Department of
Transportation Table (49 CFR 172.101 and amendments thereto) or by the
Environmental Protection Agency (or any successor agency) as hazardous
substances (40 CFR part 302 and amendments thereto), (iii) any material,
waste or substance which is or contains (A) petroleum, including crude oil or
any fraction thereof, natural gas, or synthetic gas usable for fuel or any
mixture thereof, (B) asbestos, (C) polychlorinated biphenyls, (D) designated
as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33
U.S.C. Section 1251 ET SEQ. (33 U.S.C. Section 1321) or listed pursuant
to Section 307 of the Clean Water Act (33 U.S.C. Section 1317), (E)
flammable explosives, (F) radioactive materials, and (iv) such other
substances, materials and wastes which are or become regulated or classified
as hazardous, toxic or as "special wastes" under any Environmental Laws.
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(b) The Company and the Stockholder have not violated, done or suffered
any act which could give rise to liability under, and are not otherwise exposed
to liability under, any Environmental Law. No event has occurred with respect
to the Real Property, the Improvements or any property formerly owned, occupied
or leased by the Company, which, with the passage of time or the giving of
notice, or both, would constitute a violation of or non-compliance with any
applicable Environmental Law. The Company has no contingent liability under any
Environmental Law. There are no liens under any Environmental Law on the Real
Property.
(c) Except as set forth on SCHEDULE 2.11(c) hereto, (i) neither the
Company, the Real Property or any portion thereof, the Improvements or any
property formerly owned, occupied or leased by the Company, nor, to the
knowledge of the Company or the Stockholder, any property adjacent to the Real
Property is being used or has been used for the treatment, generation,
transportation, processing, handling, production or disposal of any Hazardous
Materials or as a landfill or other waste disposal site and there has been no
spill, release or migration of any Hazardous Materials on or under the Real
Property and no Hazardous Material is present on or under the Real Property
(provided, however, that certain petroleum products are stored and handled on
the Real Property in the ordinary course of the Company's business in full
compliance with all Environmental Laws including the existing regulations of the
United States Environmental Protection Agency and the State of Georgia requiring
spill protection, overfill protection and corrosion protection by December 22,
1998), (ii) none of the Real Property or portion thereof, the Improvements or
any property formerly owned, occupied or leased by the Company has been subject
to investigation by any governmental authority evaluating the need to
investigate or undertake Remedial Action (as defined below) at such property,
and (iii) none of the Real Property, the Improvements or any property formerly
owned, occupied or leased by the Company, or, to the knowledge of the Company or
the Stockholder, any site or location where the Company sent waste of any kind,
is identified on the current or proposed (A) National Priorities List under 40
C.F.R. 300 Appendix B, (B) Comprehensive Environmental Response Compensation and
Liability Inventory System list, or (C) any list arising from any statute
analogous to CERCLA. As used herein, "Remedial Action" shall mean any action
required to (i) clean up, remove or treat Hazardous Materials, (ii) prevent a
release or threat of release of any Hazardous Material, (iii) perform pre-
remedial studies, investigations or post-remedial monitoring and care, (iv) cure
a violation of Environmental Law or (v) take corrective action under sections
3004(u), 3004(v) or 3008(h) of RCRA or analogous state law.
(d) Except as set forth on SCHEDULE 2.11(d) hereto, there have been and
are no (i) aboveground or underground storage tanks, subsurface disposal
systems, or wastes, drums or containers disposed of or buried on, in or under
the ground or any surface waters, (ii) asbestos or asbestos containing
materials or radon gas, (iii) polychlorinated biphenyls ("PCB") or
PCB-containing equipment, including transformers, or (iv) wetlands (as
defined under any Environmental Law) located within any portion of the Real
Property, nor have any liens been placed upon any portion of the Real
Property, the Improvements or any property formerly owned, occupied or leased
by the Company in connection with any actual or alleged liability under any
Environmental Law.
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(e) Except as set forth on SCHEDULE 2.11(e) hereto, (i) there is no
pending or threatened claim, litigation, or administrative proceeding, or
known prior claim, litigation or administrative proceeding, arising under any
Environmental Law involving any of the Company, the Real Property, the
Improvements, any property formerly owned, leased or occupied by the Company,
any offsite contamination affecting the business of the Company or any
operations conducted at the Real Property, (ii) there are no ongoing
negotiations with or agreements with any governmental authority relating to
any Remedial Action or other environmentally related claim, (iii) the Company
has not submitted notice pursuant to Section 103 of CERCLA or analogous
statute or notice under any other applicable Environmental Law reporting a
release of a Hazardous Material into the environment, and (iv) the Company
has not received any notice, claim, demand, suit or request for information
from any governmental or private entity with respect to any liability or
alleged liability under any Environmental Law, nor to knowledge of the
Stockholder and the Company, has any other entity whose liability therefor,
in whole or in part, may be attributed to the Company, received such notice,
claim, demand, suit or request for information.
(f) The Stockholder and the Company have provided to UAG all
environmental studies and reports obtained by them or known to them
pertaining to the Real Property, the Improvements, the Company and any
property formerly owned, occupied or leased by the Company, and have
permitted (or will have permitted as of the Closing Date), the testing of the
soil, groundwater, building components, tanks, containers and equipment on
the Real Property, the Improvements, and any property formerly owned,
occupied or leased by the Company, by UAG or UAG's agents or experts as they
have or shall have deemed necessary or appropriate to confirm the condition
of such properties.
2.12 INVENTORIES.
The values at which inventories are carried on the Company Balance Sheet
reflect the normal inventory valuation policies of the Company, and such
values are in conformity with GAAP consistently applied. All inventories
reflected on the Company Balance Sheet and Company Factory Statement or
arising since the date thereof are currently marketable and can reasonably be
anticipated to be sold at normal mark-ups within 120 days after the date
hereof in the ordinary course of business (subject to the reserve for
obsolete, off-grade or slow-moving items that is reflected in the Company
Balance Sheet or will be reflected in the Closing Date Balance Sheet), except
for spare parts inventory which inventory is good and usable.
2.13 ACCOUNTS RECEIVABLE.
All accounts receivable reflected on the Company Balance Sheet are, and all
accounts receivable that will be or will have been reflected on the Closing
Date Balance Sheet will be, good and have been or will have been collected or
are collectible, without resort to litigation, within 90 days of the Closing
Date, and are subject to no defenses, setoffs or counterclaims other than
normal cash discounts accrued in the ordinary course of business.
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2.14 INSURANCE.
All material properties and assets of the Company which are of an insurable
character are insured against loss or damage by fire and other risks to the
extent and in the manner reasonable in light of the risks attendant to the
businesses and activities in which the Company is engaged and customary for
companies engaged in similar businesses or owning similar assets. Set forth
on SCHEDULE 2.14 hereto is a list and brief description (including the name
of the insurer, the type of coverage provided, the amount of the annual
premium for the current policy period, the amount of remaining coverage and
deductibles and the coverage period) of all policies for such insurance and
the Company has made or will make available to UAG true and complete copies
of all such policies. All such policies are in full force and effect
sufficient for all applicable requirements of law and will not in any way be
effected by or terminated or lapsed by reason of the consummation of the
transactions contemplated by this Agreement and the Lease. No notice of
cancellation or non-renewal with respect to, or disallowance of any claim
under, any such policy has been received by the Company.
2.15 CONTRACTS; ETC.
As used in this Agreement, the term "Company Agreements" shall mean all
mortgages, indenture notes, agreements, contracts, leases, licenses,
franchises, obligations, instruments or other commitments, arrangements or
understandings of any kind, whether written or oral, binding or non-binding,
(including all leases and other agreements referred to on SCHEDULE 2.10
hereto) to which the Company is a party or by which the Company or any of its
assets or properties (including the Real Property and the Improvements) may
be bound or affected, including all amendments, modifications, extensions or
renewals of any of the foregoing. Set forth on SCHEDULE 2.15 hereto is a
complete and accurate list of each Company Agreement which is material to the
businesses, operations, assets, condition (financial or otherwise) or
prospects of the Company. True and complete copies of all written Company
Agreements referred to on SCHEDULE 2.15 and SCHEDULE 2.10 hereto have been
delivered or made available to UAG, and the Company has provided UAG with
accurate and complete written summaries of all such Company Agreements which
are unwritten. Except as set forth on SCHEDULE 2.15, the Company is not,
nor, to the knowledge of the Company and the Stockholder is, any other party
thereto, in breach of or default under any Company Agreement, and no event
has occurred which (after notice or lapse of time or both) would become a
breach or default under, or would permit modification, cancellation,
acceleration or termination of, any Company Agreement or result in the
creation of any Lien upon, or any Person obtaining any right to acquire, any
properties, assets or rights of the Company. There are no material
unresolved disputes involving the Company under any Company Agreement.
2.16 LABOR RELATIONS.
(a) The Company has paid or made provision for the payment of all
salaries and accrued wages and has complied in all material respects with all
applicable laws, rules and
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regulations relating to the employment of labor, including those relating to
wages, hours, collective bargaining and the payment and withholding of taxes,
and has withheld and paid to the appropriate govern-mental authority, or is
holding for payment not yet due to such authority, all amounts required by
law or agreement to be withheld from the wages or salaries of its employees.
(b) Except as set forth on SCHEDULE 2.16(b) hereto, the Company is not a
party to any (i) outstanding employment agreements or contracts with officers
or employees that are not terminable at will, or that provide for payment of
any bonus or commission, (ii) agreement, policy or practice that requires it
to pay termination or severance pay to salaried, non-exempt or hourly
employees (other than as required by law), (iii) collective bargaining
agreement or other labor union contract applicable to persons employed by the
Company, nor do the Stockholder or the Company know of any activities or
proceedings of any labor union to organize any such employees. The Company
has furnished to UAG complete and correct copies of all such agreements
("Employment and Labor Agreements"). The Company has not breached or
otherwise failed to comply with any provisions of any Employment or Labor
Agreement.
(c) Except as set forth in SCHEDULE 2.16(c) hereto, (i) there is no
unfair labor practice charge or complaint pending before the National Labor
Relations Board ("NLRB"), (ii) there is no labor strike, material slowdown or
material work stoppage or lockout actually pending or, to the Stockholder's
or the Company's knowledge, threatened, against or affecting the Company, and
the Company has not experienced any strike, material slow down or material
work stoppage, lockout or other collective labor action by or with respect to
employees of the Company, (iii) there is no representation claim or petition
pending before the NLRB or any similar foreign agency and no question
concerning representation exists relating to the employees of the Company,
(iv) there are no charges with respect to or relating to the Company pending
before the Equal Employment Opportunity Commission or any state, local or
foreign agency responsible for the prevention of unlawful
employment-practices and (v) the Company has not received formal notice from
any federal, state, local or foreign agency responsible for the enforcement
of labor or employment laws of an intention to conduct an investigation of
the Company and, to the knowledge of the Company, no such investigation is in
progress.
(d) The Company has never caused any "plant closing" or "mass layoff" as
such actions are defined in the Worker Adjustment and Retraining Notification
Act, as codified at 29 U.S.C. Sections 2101-2109, and the regulations
promulgated therein.
2.17 EMPLOYEE BENEFIT PLANS.
(a) Set forth on SCHEDULE 2.17(a) hereto is a true and complete list of:
(i) each employee pension benefit plan, as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974 ("ERISA"), maintained by
the
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the Company or to which the Company is required to make contributions
("Pension Benefit Plan"); and
(ii) each employee welfare benefit plan, as defined in Section 3(i) of
ERISA, maintained by the Company or to which the Company is required to make
contributions ("Welfare Benefit Plan").
True and complete copies of all Pension Benefit Plans and Welfare Benefit
Plans (collectively, "ERISA Plans") have been delivered to or made available to
UAG together with, as applicable with respect to each such ERISA Plan, trust
agreements, summary plan descriptions, all IRS determination letters or
applications therefor with respect to any Pension Benefit Plan intended to be
qualified pursuant to Section 401 (a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and valuation or actuarial reports, accountant's opinions,
financial statements, IRS Form 5500s (or 5500-C or 5500-R) and summary annual
reports for the last three years.
(b) With respect to the ERISA Plans:
(i) no event has occurred or (to the knowledge of the Company or the
Stockholder) is threatened or about to occur which would constitute a
prohibited transaction under Section 406 of ERISA or under Section 4975 of
the Code;
(ii) each ERISA Plan has operated since its inception in accordance
with the reporting and disclosure requirements imposed under ERISA and the
Code and has timely filed Form 5500e (or 5500-C or 5500-R) and predecessors
thereof; and
(iii) no ERISA Plan is liable for any federal, state, local or foreign
Taxes.
(c) Each Pension Benefit Plan intended to be qualified under Section
401(a) of the Code:
(i) has been qualified, from its inception, under Section 401(a) of
the Code, and the trust established thereunder has been exempt from taxation
under Section 501(a) of the Code and is currently in compliance with
applicable federal laws;
(ii) has been operated, since its inception, in accordance with its
terms and there exists no fact which would adversely affect its qualified
status; and
(iii) is not currently under investigation, audit or review by the IRS
or (to the knowledge of the Company or the Stockholder) no such action is
contemplated or under consideration and the IRS has not asserted that any
Pension Benefit Plan is not qualified under Section 401(a) of the Code or
that any trust established under a Pension Benefit Plan is not exempt under
Section 501(a) of the Code.
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(d) With respect to each Pension Benefit Plan which is a defined benefit
plan under Section 414(j) and, for the purpose solely of SECTION 2.17(d)(iv)
hereof, each defined contribution plan under Section 414(i) of the Code:
(i) no liability to the Pension Benefit Guaranty Corporation ("PBGC")
under Sections 4062-4064 of ERISA has been incurred by the Company since the
effective date of ERISA and all premiums due and owing to the PBGC have been
timely paid;
(ii) the PBGC has not notified the Company or any Pension Benefit Plan
of the commencement of proceedings under Section 4042 of ERISA to terminate
any such plan;
(iii) no event has occurred since the inception of any Pension Benefit
Plan or (to the knowledge of the Company or the Stockholder) is threatened
or about to occur which would constitute a reportable event within the
meaning of Section 4043(b) of ERISA;
(iv) no Pension Benefit Plan ever has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the
Code); and
(v) if any of such Pension Benefit Plans were to be terminated on the
Closing Date (A) no liability under Title IV of ERISA would be incurred by
the Company and (B) all benefits accrued to the day prior to the Closing
Date (whether or not vested) would be fully funded in accordance with the
actuarial assumptions and method utilized by such plan for valuation
purposes.
(e) With respect to each Pension Benefit Plan, SCHEDULE 2.17(e) contains
a list of all Pension Benefit Plans to which ERISA has applied which have been
or are being terminated, or for which a termination is contemplated, and a
description of the actions taken by the PBGC and the IRS with respect thereto.
(f) The estimated aggregate amounts of contributions to be paid or
accrued by the Company under ERISA Plans for the current fiscal year is set
forth on SCHEDULE 2.17(f). To the extent required in accordance with GAAP, the
Company Balance Sheet reflects in the aggregate an accrual of all amounts of
employer contributions accrued but unpaid by the Company under the ERISA Plans
as of the date of the Company Balance Sheet.
(g) With respect to any Multiemployer Plan (1) the Company has not,
since its formation, made or suffered a "complete withdrawal" or "partial
withdrawal" as such terms are respectively defined in Sections 4203 and 4205 of
ERISA; (2) there is no withdrawal liability of the Company under any
Multiemployer Plan, computed as if a "complete withdrawal" by the Company had
occurred under each such Plan as of December 31, 1995; and (3) the Company has
not received notice to the effect that any Multiemployer Plan is either in
reorganization (as defined in Section 4241 of ERISA) or insolvent (as defined in
Section 4245 of ERISA).
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(h) With respect to the Welfare Benefit Plans:
(i) There are no liabilities of the Company under Welfare Benefit
Plans with respect to any condition which relates to a claim filed on or
before the Closing Date.
(ii) No claims for benefits are in dispute or litigation.
2.18 OTHER BENEFIT AND COMPENSATION PLANS OR ARRANGEMENTS.
(a) Set forth on SCHEDULE 2.18(a) hereto is a true and complete list of:
(i) each employee stock purchase, employee stock option, employee
stock ownership, deferred compensation, performance, bonus, incentive,
vacation pay, holiday pay, insurance, severance, retirement, excess benefit
or other plan, trust or arrangement which is not an ERISA Plan whether
written or oral, which the Company maintains or is required to make
contributions to;
(ii) each other agreement, arrangement, commitment and understanding of
any kind, whether written or oral, with any current or former officer,
director or consultant of the Company pursuant to which payments may be re-
quired to be made at any time following the date hereof (including, without
limitation, any employment, deferred compensation, severance, supplemental
pension, termination or consulting agreement or arrangement); and
(iii) each employee of the Company whose aggregate compensation for the
fiscal year ended December 31, 1995 exceeded, and whose aggregate
compensation for the fiscal year ended December 31, 1996 is likely to
exceed, $50,000. True and complete copies of all of the written plans,
arrangements and agreements referred to on SCHEDULE 2.18(a) ("Compensation
Commitments") have been provided to UAG together with, where prepared by or
for the Company, any valuation, actuarial or accountant's opinion or other
financial reports with respect to each Compensation Commitment for the last
three years. An accurate and complete written summary has been provided to
UAG with respect to any Compensation Commitment which is unwritten.
(b) Each Compensation Commitment:
(i) since its inception, has been operated in all material respects in
accordance with its terms;
(ii) is not currently under investigation, audit or review by the IRS
or any other federal or state agency and (to the knowledge of the Company or
the Stockholder) no such action is contemplated or under consideration;
(iii) has no liability for any federal, state, local or foreign Taxes;
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(iv) has no claims subject to dispute or litigation;
(v) has met all applicable requirements, if any, of the Code; and
(vi) has operated since its inception in material compliance with the
reporting and disclosure requirements imposed under ERISA and the Code.
2.19 TRANSACTIONS WITH INSIDERS.
Set forth on SCHEDULE 2.19 hereto is a complete and accurate description
of all material transactions between the Company or any ERISA Plan, on the one
hand, and any Insider, on the other hand, that have occurred since January 1,
1995. For purposes of this Agreement:
(i) the term "Insider" shall mean the Stockholder, any director or
officer of the Company, and any Affiliate, Associate or Relative of any of
the foregoing persons;
(ii) the term "Associate" used to indicate a relationship with any
person means (A) any corporation, partnership, joint venture or other entity
of which such person is an officer or partner or is, directly or indirectly,
through one or more intermediaries, the beneficial owner of 30% or more of
(1) any class or type of equity securities or other profits interest or (2)
the combined voting power of interests ordinarily entitled to vote for
management or otherwise, and (B) any trust or other estate in which such
person has a substantial beneficial interest or as to which such person
serves as trustee or in a similar fiduciary capacity; and
(iii) a "Relative" of a person shall mean such person's spouse, such
person's parents, sisters, brothers, children and the spouses of the
foregoing, and any member of the immediate household of such person.
2.20 PROPRIETY OF PAST PAYMENTS.
No funds or assets of the Company have been used for illegal purposes; no
unrecorded funds or assets of the Company have been established for any purpose;
no accumulation or use of the Company's corporate funds or assets has been made
without being properly accounted for in the respective books and records of the
Company; all payments by or on behalf of the Company have been duly and properly
recorded and accounted for in their respective books and records; no false or
artificial entry has been made in the books and records of the Company for any
reason; no payment has been made by or on behalf of the Company with the
understanding that any part of such payment is to be used for any purpose other
than that described in the documents supporting such payment; and the Company
has not made, directly or indirectly, any illegal contributions to any political
party or candidate, either domestic or foreign. Neither the IRS nor any other
federal, state, local or foreign government agency or entity has initiated or
threatened any investigation of any
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payment made by the Company of, or alleged to be of, the type described in
this SECTION 2.20.
2.21 INTEREST IN COMPETITORS.
Except as set forth on SCHEDULE 2.21, neither the Company nor the
Stockholder, nor any of their Affiliates, have any interest, either by way of
contract or by way of investment (other than as holder of not more than 2% of
the outstanding capital stock of a publicly traded Person, so long as such
holder has no other connection or relationship with such Person) or otherwise,
directly or indirectly, in any Person other than the Company that is engaged in
the retail sale of light duty trucks or automobiles in Georgia.
2.22 BROKERS.
Neither the Company, nor any director, officer or employee thereof, nor
the Stockholder or any representative of the Stockholder, has employed any
broker or finder or has incurred or will incur any broker's, finder's or similar
fees, commissions or expenses, in each case in connection with the transactions
contemplated by this Agreement or the Real Estate Purchase Agreement, except
that the Stockholder has employed Patrick McNulty as a broker (the "Broker") in
connection with this transaction. The Stockholder will satisfy any obligations
of UAG, Sub, the Stockholder or the Company relating to the employment of the
Broker, and will hold UAG, Sub and the Company harmless therefrom.
2.23 ACCOUNTS.
SCHEDULE 2.23 hereof correctly identifies each bank account maintained by
or on behalf or for the benefit of the Company and the name of each person with
any power or authority to act with respect thereto.
2.24 DISCLOSURE.
Neither the Company nor the Stockholder has made any material
misrepresentation to UAG relating to the Company or the Shares and neither the
Company nor the Stockholder has omitted to state to UAG any material fact
relating to the Company or the Shares which is necessary in order to make the
information given by or on behalf of the Company or the Stockholder to UAG not
misleading or which if disclosed would reasonably affect the decision of a
person considering an acquisition of the Shares. No fact, event, condition or
contingency exists or has occurred which has, or in the future can reasonably be
expected to have, a Material Adverse Effect, which has not been disclosed in the
Company's Financial Statements or the schedules to this Agreement.
2.25 NET WORTH AND WORKING CAPITAL.
On the Closing Date, the Net Worth of the Company, as determined in
accordance with the Accounting Principles, will be equal to or greater than Two
Million Three Hundred
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Thousand Dollars ($2,300,000). On the Closing Date, the net working capital
of the Company, as reflected on the Estimated Closing Date Balance Sheet (as
defined in Section 6.6 hereof) will be equal to or greater than the net
working capital of the Company as of December 31, 1995 as reflected on the
Company Balance Sheet and such net working capital will be sufficient to
operate the businesses of the Company consistent with past practice.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
Subject to the parties' agreement and acknowledgment that the Schedules
referred to in this ARTICLE 3 are to be delivered by the Stockholder to UAG and
Sub no late than August 15, 1996, the Stockholder hereby represents and warrants
to UAG and Sub as follows:
3.1 OWNERSHIP OF SHARES; TITLE.
The Stockholder is the owner of record and beneficially of the Shares set
forth on SCHEDULE 3.1 hereof and has, and shall transfer to Sub at the Closing,
good and marketable title to the Shares owned by him, free and clear of any and
all Liens, claims and encumbrances and free and clear of any restrictions on
transfer (other than restrictions on transfer imposed by applicable federal and
state securities laws), proxies and voting or other agreements.
3.2 AUTHORITY.
The Stockholder has all requisite power and authority and has full legal
capacity and is competent to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby (including the disposition of
the Shares to Sub as contemplated by this Agreement). This Agreement has been
duly executed and delivered by the Stockholder and constitutes a valid and
binding obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms. Except as set forth on SCHEDULE 3.2, the execution,
delivery and performance of this Agreement by the Stockholder and the consum-
mation of the transactions contemplated hereby do not and will not:
(i) (after notice or lapse of time or both) conflict with, result in a
breach of any provision of, constitute a default under, result in the
modification or cancellation of, or give rise to any right of termination or
acceleration in respect of, any material contract, agreement, commitment,
understanding, arrangement or restriction to which the Stockholder is a
party or to which the Stockholder or the Stockholder's property is subject;
(ii) violate or conflict with any Legal Requirements applicable to the
Stockholder or the Stockholder's businesses or properties; or
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(iii) require any authorization, consent, order, permit or approval of,
or notice to, or filing, registration or qualification with, any
governmental, administrative or judicial authority, except in connection
with or in compliance with the provisions of the H-S-R Act.
3.3 REAL PROPERTY AND IMPROVEMENTS.
The Stockholder owns the Real Property and Improvements in fee simple,
free and clear of all Liens, claims and encumbrances, except those disclosed in
SCHEDULE 3.3(a), none of which currently or, to the Stockholder's knowledge, in
the future will affect the use of the Real Property or the Improvements for the
conduct of the respective businesses of the Company as presently conducted. No
assessments have been made against any portion of the Real Property which are
unpaid (except ad valorem taxes for the current year that are not yet due and
payable), whether or not they have become Liens. There are no disputes
concerning the location of the lines and corners of the Real Property. Except
as set forth in ARTICLE 1 hereof, no one has been granted any right to purchase
or lease the Real Property or Improvements other than the existing lease in
favor of the Company, which is to be terminated at Closing. Attached as
SCHEDULE 3.3 are all surveys, title binders, title policies and copies of any
exceptions to title.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UAG AND SUB
Subject to the parties' agreement and acknowledgment that the Schedules
referred to in this ARTICLE 4 are to be delivered by UAG and Sub no later than
August 15, 1996, UAG and Sub hereby represent and warrant to the Company and the
Stockholder as follows:
4.1 ORGANIZATION AND GOOD STANDING.
Each of UAG and Sub is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation and has the
corporate power and authority to own, lease and operate the properties used in
its business and to carry on its business as now being conducted. Each of UAG
and Sub is duly qualified to do business and is in good standing as a foreign
corporation in each state and jurisdiction where qualification as a foreign
corporation is required, except for such failures to be qualified and in good
standing, if any, which when taken together with all other such failures of UAG
and its subsidiaries would not, or could not reasonably be expected to, in the
aggregate have a material adverse effect on UAG and its subsidiaries, taken as a
whole.
4.2 AUTHORITY; APPROVALS AND CONSENTS.
UAG and Sub have the corporate power and authority to enter into this
Agreement and to perform their respective obligations hereunder. This Agreement
has been duly executed and delivered by, and constitutes valid and binding
obligation of, UAG and Sub,
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enforceable against UAG and Sub in accordance with its terms. Except as set
forth on SCHEDULE 4.3 hereto, the execution, delivery and performance by UAG
and Sub of this Agreement and the consummation of the transactions
contemplated hereby do not and will not:
(i) contravene any provisions of the certificate of incorporation or
bylaws of UAG or Sub;
(ii) (after notice or lapse of time or both) conflict with, result in a
breach of any provision of, constitute a default under, result in the
modification or cancellation of, or give rise to any right of termination or
acceleration in respect of, any UAG Agreement (as defined below) or, require
any consent or waiver of any party to any UAG Agreement other than
agreements the breach or violation of which could not reasonably be expected
to have a material adverse effect on UAG and its subsidiaries, taken as a
whole;
(iii) violate or conflict with any Legal Requirements applicable to UAG
or any of its subsidiaries or any of their respective businesses or
properties; or
(iv) require any authorization, consent, order, permit or approval of,
or notice to, or filing, registration or qualification with, any
governmental, administrative or judicial authority, except in connection
with or in compliance with the provisions of the H-S-R Act.
4.3 BROKERS.
Neither UAG, Sub nor any of their directors, officers or employees has
employed any broker or finder or has incurred or will incur any broker's,
finder's or similar fees, commissions or expenses, in each case in connection
with the transactions contemplated by this Agreement or the Real Estate Purchase
Agreement.
4.4 DISCLOSURE.
Neither UAG nor Sub has made any material misrepresentation to the
Stockholder and neither UAG nor Sub has omitted to state to the Stockholder any
material fact relating to UAG or Sub which is necessary in order to make the
information given by UAG or Sub not misleading or which if disclosed would
reasonably affect the decision of a person considering the sale of the Shares.
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ARTICLE 5
COVENANTS AND ADDITIONAL AGREEMENTS
5.1 ACCESS; CONFIDENTIALITY.
Between the date hereof and the Closing Date, the Stockholder and the
Company will (i) provide to the officers and other authorized representatives of
UAG and Sub full access, during normal business hours, to any and all files,
books, records, documents, and other information of the Company and will cause
the Company's officers to furnish to UAG and its authorized representatives any
and all financial, technical and operating data and other information pertaining
to the businesses and properties of the Company (including the Real Property and
the Improvements), (ii) provide to the officers and other authorized
representatives of UAG and Sub reasonable access to any and all premises and
properties of the Company (including the Real Property and Improvements)
provided that such access shall not unreasonably disrupt the normal business of
the Company; and (iii) make available for inspection and copying by UAG and Sub
true and complete copies of any documents relating to the foregoing. UAG and
Sub will hold, and will cause their representatives to hold, in confidence
(unless and to the extent compelled to disclose by judicial or administrative
process or, in the opinion of its counsel, by other requirements of law) all
Confidential Information (as defined below) and will not disclose the same to
any third party except in connection with obtaining financing and otherwise as
may reasonably be necessary to carry out this Agreement and the transactions
contemplated hereby, including any due diligence review by or on behalf of UAG
and Sub. If this Agreement is terminated, UAG and Sub will, and will cause
their representatives to, promptly return to the Company, upon the reasonable
request of the Company, all Confidential Information furnished by the Company,
including all copies and summaries thereof. As used herein, "Confidential
Information" shall mean all information concerning the Company obtained by UAG,
Sub and their representatives from the Company in connection with the trans-
actions contemplated by this Agreement, except information (x) ascertainable or
obtained from public information, (y) received from a third party not employed
by or otherwise affiliated with the Company or (z) which is or becomes known to
the public, other than through a breach by UAG or Sub or any of their
representatives of this Agreement.
5.2 FURNISHING INFORMATION; ANNOUNCEMENTS.
The Stockholder and the Company, on the one hand, and UAG and Sub, on the
other hand, will, as soon as practicable after reasonable request therefor,
furnish to the other all the information concerning the Stockholder and the
Company or UAG and Sub, respectively, required for inclusion in any statement or
application made by UAG or Sub or the Company or the Stockholder to any
governmental or regulatory body or to any manufacturer or distributor or in
connection with obtaining any third party consent in connection with the
transactions contemplated by this Agreement. Neither the Stockholder or the
Company, on the one hand, nor UAG or Sub, on the other hand, nor any
representative thereof, shall issue any press releases or otherwise make any
public statement with respect to
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the transactions contemplated hereby without the prior consent of the other,
except as may be required by law.
5.3 CERTAIN CHANGES AND CONDUCT OF BUSINESS.
(a) From and after the date of this Agreement and until the Closing
Date, the Company shall, and the Stockholder shall cause the Company to, conduct
its businesses solely in the ordinary course consistent with past practices and,
without the prior written consent of UAG, neither the Stockholder nor the
Company will, except as required or permitted pursuant to the terms hereof,
permit the Company to:
(i) make any material change in the conduct of its businesses and
operations or enter into any transaction other than in the ordinary course
of business consistent with past practices;
(ii) make any change in its Articles of Incorporation or Bylaws, issue
any additional shares of capital stock or equity securities or grant any
option, warrant or right to acquire any capital stock or equity securities
or issue any security convertible into or exchangeable for its capital stock
or alter any material term of any of its outstanding securities or make any
change in its outstanding shares of capital stock or other ownership
interests or its capitalization, whether by reason of a reclassification,
recapitalization, stock split or combination, exchange or readjustment of
shares, stock dividend or otherwise;
(iii) (A) incur, assume or guarantee any indebtedness for borrowed
money, issue any notes, bonds, debentures or other corporate securities or
grant any option, warrant or right to purchase any thereof, except pursuant
to transactions in the ordinary course of business consistent with past
practices, (B) issue any securities convertible or exchangeable for debt
securities of the Company, or (C) issue any options or other rights to
acquire from the Company, directly or indirectly, debt securities of the
Company or any security convertible into or exchangeable for such debt
securities;
(iv) make any sale, assignment, transfer, abandonment or other
conveyance of any of its assets or any part thereof, except transactions
pursuant to existing contracts (which will be set forth in SCHEDULE 2.15
hereto) and dispositions in the ordinary course of business consistent with
past practices;
(v) subject any of its assets, or any part thereof, to any lien or
suffer such to be imposed other than such liens as may arise in the ordinary
course of business consistent with past practices;
(vi) declare, set aside or pay any dividends or other distribution
(whether in cash, stock, property or any combination thereof) in respect of
any shares of its capital stock which would decrease the Net Worth of the
Company below Two Million Three
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Million Dollars ($2,300,000) or redeem, retire, purchase or otherwise
acquire, directly or indirectly, any shares of its capital stock;
(vii) acquire any assets, raw materials or properties, or enter into
any other transaction, other than in the ordinary course of business
consistent with past practices;
(viii) enter into any new (or amend any existing) employee benefit plan,
program or arrangement or any new (or amend any existing) employment,
severance or consulting agreement (other than agreements in the ordinary
course of business consistent with past practices that will be reflected on
the Company's financial statement prior to the Closing Date and that will
not bind the Company after the Closing Date), grant any general increase in
the compensation of officers or employees (including any such increase
pursuant to any bonus, pension, profit-sharing or other plan or commitment)
or grant any increase in the compensation payable or to become payable to
any employee, except in accordance with pre-existing contractual provisions
or consistent with past practices;
(ix) make or commit to make any individual material capital expenditure
in excess of $50,000, or aggregate capital expenditures in excess of
$150,000, except in the ordinary course of business;
(x) pay, loan or advance any amount to, or sell, transfer or lease any
properties or assets to, or enter into any agreement or arrangement with,
any of its Affiliates, except in the ordinary course of business;
(xi) guarantee any indebtedness for borrowed money or any other
obligation of any other Person, other than in the ordinary course of
business consistent with past practice;
(xii) fail to keep in full force and effect insurance comparable in
amount and scope to coverage maintained by it (or on behalf of it) on the
date hereof;
(xiii) make any loan, advance or capital contribution to or investment
in any Person, except in the ordinary course of business;
(xiv) make any change in any method of accounting or accounting
principle, method, estimate or practice except for any such change required
by reason of a concurrent change in GAAP or write-down the value of any
inventory or write-off as uncollectible any accounts receivable except in
the ordinary course of business consistent with past practices;
(xv) settle, release or forgive any material claim or litigation or
waive any material right;
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(xvi) make, enter into, modify, amend in any material respect or
terminate any material commitment, bid or expenditure, other than in the
ordinary course of business consistent with past practice; or
(xvii) commit itself to do any of the foregoing.
(b) From and after the date hereof and until the Closing Date, the
Stockholder and the Company will use their reasonable best efforts to cause
the Company to:
(i) continue to maintain, in all material respects, the Company's
properties, the Real Property and the Improvements in accordance with
present practices in a condition suitable for their current use;
(ii) comply with all applicable Environmental Laws, and, in the event
it shall receive notice that there exists a violation of any Environmental
Law with respect to its operations, the Improvements or any Real Property,
promptly (and in any event within the time period permitted by the applic-
able governmental authority) remove or remedy such violation in accordance
with all applicable Environmental Laws;
(iii) file, when due or required, federal, state, foreign and other tax
returns and other reports required to be filed and pay when due all taxes,
assessments, fees and other charges lawfully levied or assessed against it
unless the validity thereof is contested in good faith and by appropriate
proceedings diligently conducted;
(iv) keep its books of account, records and files in the ordinary
course and in accordance with existing practices;
(v) preserve its business organization intact and continue to maintain
existing business relationships with suppliers, customers and others with
whom business relationships exist other than relationships that are, at the
same time, not economically beneficial to it; and
(vi) continue to conduct its business in the ordinary course
consistent with past practices.
5.4 NO INTERCOMPANY PAYABLES OR RECEIVABLES.
At the Closing there will be no intercompany payables or intercompany
receivables due and/or owing between the Stockholder and any of their
Affiliates, on the one hand, and the Company, on the other hand.
5.5 NEGOTIATIONS.
Until the earlier of 180 days from the date hereof and the termination
of this Agreement pursuant to SECTION 8.1 hereof, neither the Stockholder nor
the Company, nor the
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Company's officers, directors, employees, advisors, agents, representatives,
Affiliates or anyone acting on behalf of the Stockholder, the Company or such
persons, shall, directly or indirectly, encourage, solicit, initiate or
engage in discussions or negotiations with, or provide any information to,
any person (other than UAG or its representatives) concerning any merger,
sale of assets (other than in the ordinary course of business), purchase or
sale of shares of capital stock or similar transaction involving the Company.
The Stockholder shall promptly communicate to UAG any inquiries or
communications concerning any such transaction (including the identity of any
person making such inquiry or communication) which the Stockholder may
receive or of which the Stockholder may become aware.
5.6 CONSENTS; COOPERATION.
Subject to the terms and conditions hereof, the Stockholder and the
Company and UAG and Sub will use their respective best efforts at their own
expense:
(i) to obtain prior to the earlier of the date required (if so
required) or the Closing Date, all waivers, permits, licenses, approvals,
authorizations, qualifications, orders and consents of all third parties and
governmental authorities, and make all filings and registrations with
governmental authorities which are required on their respective parts for
(A) the consummation of the transactions contemplated by this Agreement, (B)
the ownership or leasing and operating after the Closing by the Company of
all its material properties and (C) the conduct after the Closing by the
Company of its businesses as conducted by it on the date hereof.
(ii) to defend, consistent with applicable principles and requirements
of law, any lawsuit or other legal proceedings, whether judicial or
administrative, whether brought derivatively or on behalf of third persons
(including governmental authorities) challenging this Agreement or the
transactions contemplated hereby; and
(iii) to furnish each other such information and assistance as may
reasonably be requested in connection with the foregoing.
5.7 ADDITIONAL AGREEMENTS.
Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees to use its best efforts at its own expense to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In case at any time after the Closing any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers of
the Company shall take all such necessary action.
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5.8 INTERIM FINANCIAL STATEMENTS.
Within thirty (30) days after the end of each calendar month after May
31, 1996, the Company will deliver to UAG unaudited consolidated balance sheets
of the Company at the end of such calendar month and at the end of the
corresponding calendar month of the preceding fiscal year, together with the
related unaudited consolidated statements of income and cash flow for the fiscal
months then ended. The Company will also deliver to UAG copies of the Company
Factory Statements provided to BMW after the date hereof within five days of
their delivery to BMW. All such financial statements shall fairly present the
financial position and results of operations of the Company as of the date or
for the periods indicated. All unaudited financial statements delivered
pursuant to this SECTION 5.9 shall be prepared on a basis consistent with the
Company Financial Statements.
5.9 NOTIFICATION OF CERTAIN MATTERS.
Between the date hereof and the Closing, each party to this Agreement
will give prompt notice in writing to the other party hereto of: (i) any
information that indicates that any representation and warranty of such party
contained herein was not true and correct as of the date made or will not be
true and correct as of the Closing, (ii) the occurrence of any event which could
result in the failure to satisfy a condition specified in ARTICLE 6 or ARTICLE 7
hereof, as applicable, (iii) any notice or other communication from any third
person alleging that the consent of such third person is or may be required in
connection with the transactions contemplated by this Agreement, and (iv) in the
case of the Stockholder and the Company, any notice of, or other communication
relating to, any default or event which, with notice or lapse of time or both,
would become a default under any Company Agreement set forth on SCHEDULE 2.15.
The Company and the Stockholder will (x) promptly advise UAG of any event that
has, or could reasonably be expected in the future to have, a Material Adverse
Effect on the Company, (y) confer on a regular and frequent basis with one or
more designated representatives of UAG to report operational matters and to
report the general status of ongoing operations, and (z) notify UAG of any
emergency or other change in the normal course of business or relating to the
Real Property or Improvements of the Company and of any governmental complaints,
investigations or hearings (or communications indicating that the same may be
contemplated) or adjudicatory proceedings involving the Company, the Real
Property or the Improvements and will keep UAG fully informed of such events and
permit UAG's representatives access to all materials prepared in connection
therewith. The Stockholder shall give prompt notice to UAG of any notice or
other communication from any third person asserting any right, title or interest
in any of the Shares held by the Stockholder (including, without limitation, any
threat to commence, or notice of the commencement of any action or other
proceeding with respect to the Shares) or the occurrence of any other event of
which such Stockholder has knowledge which could result in any failure to
consummate the sale of the Shares as contemplated hereby.
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5.10 ASSURANCE BY THE STOCKHOLDER.
The Stockholder shall use its best efforts to cause the Company to comply
with its respective covenants set forth in this Agreement.
5.11 ANTITRUST IMPROVEMENTS ACT COMPLIANCE.
UAG, the Stockholder and the Company, as applicable, shall each file or
cause to be filed with the Federal Trade Commission and the United States
Department of Justice any notifications required to be filed by the respective
"ultimate parent" entities under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "H-S-R Act"), and the rules and regulations
promulgated thereunder, with respect to the transactions contemplated herein.
The parties shall use their best efforts to make such filings promptly, to
respond to any requests for additional information made by either of such
agencies, to cause the waiting periods under the H-S-R Act to terminate or
expire at the earliest possible date and to resist vigorously (including,
without limitation, the institution or defense of legal proceedings), any
assertion that the transactions contemplated herein constitute a violation of
the antitrust laws, all to the end of expediting consummation of the
transactions contemplated herein; PROVIDED, HOWEVER, that if UAG or the
Stockholder shall determine after issuance of any preliminary injunction that
continuing such resistance is not in its or their best interests, UAG or the
Stockholder, as the case may be, may, by written notice to the other party,
terminate this Agreement with the effect set forth in SECTION 8.2 hereof. In
the event that the Stockholder incurs any expense in connection with any
assertion that the transactions contemplated herein constitute a violation of
the antitrust laws, UAG shall reimburse the Stockholder for such expense unless
the Stockholder incurred such expense after UAG notified the Stockholder that
UAG intended to terminate the Agreement.
5.12 USE OF CHARLES EVANS NAME.
UAG, Sub and the Company shall have the right to use the name "Charles
Evans" in connection with the business of the Company for up to one year after
the Closing Date. After the Closing and until the one year anniversary of the
Closing Date, Evans shall not use the name "Charles Evans" or "Evans" in
connection with the sale of new or used automobiles or light duty trucks in the
metropolitan Atlanta area.
5.13 DEMONSTRATOR VEHICLES.
During their lifetimes, Evans and Mrs. Charles Evans shall each be
entitled to the use of one demonstrator vehicle (which vehicle shall be a
750 il equivalent) subject to the same terms and conditions applicable to other
employees of the Company who are provided with a demonstrator vehicle. During
Evans' lifetime, Evans shall also be entitled to an additional demonstrator
vehicle (which vehicle shall be a 740 il equivalent) for the use of Sarah
Pilgrim or, in the event that Ms. Pilgrim ceases to be employed by Evans, any
person who assumes her position. In the event that Evans, directly or
indirectly, acquires an ownership interest in or becomes employed by an entity
that is engaged in the business of
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selling automobiles or light-duty trucks, then Evans', Mrs. Evans' and Ms.
Pilgrim's right to the use of demonstrator vehicles pursuant to this Section
shall terminate.
5.14 MOTOR HOME.
The Company acknowledges that, from time to time, Mr. Michael Spooner
performs maintenance work on Evans' motor home and the Company agrees that to
the extent Mr. Spooner performs such work after the Closing Date, Evans shall
not be liable to the Company for any labor charges relating thereto.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS
OF UAG AND SUB TO EFFECT THE CLOSING
The obligations of UAG and Sub required to be performed by them at the
Closing shall be subject to the satisfaction, at or prior to the Closing, of
each of the following conditions, each of which may be waived by UAG and Sub as
provided herein except as otherwise required by applicable law:
6.1 REPRESENTATIONS AND WARRANTIES; AGREEMENTS; COVENANTS.
Each of the representations and warranties of the Company and the
Stockholder contained in this Agreement shall be true and correct on the date
made and shall be true and correct in all material respects as of the Closing.
Each of the obligations of the Company and the Stockholder required by this
Agreement to be performed by them at or prior to the Closing shall have been
duly performed and complied with in all material respects as of the Closing. At
the Closing, Sub shall have received a certificate, dated the Closing Date and
duly executed by the Stockholder and the chief financial officer of the Company,
to the effect that the conditions set forth in the two preceding sentences have
been satisfied.
6.2 AUTHORIZATION; CONSENTS.
(a) All corporate action necessary to authorize the execution, delivery
and performance of this Agreement and the Real Estate Purchase Agreement, and
the consummation of the transactions contemplated hereby shall have been duly
and validly taken by the Company. All filings required to be made under the H-
S-R Act in connection with the transactions contemplated hereby shall have been
made and all applicable waiting periods with respect to each such filing,
including extensions thereof, shall have expired or been terminated.
(b) All notices to, and declarations, filings and registrations with,
and consents, authorizations, approvals and waivers from, governmental and
regulatory bodies and third persons (including, but not limited to, all
automobile manufacturers with whom the Company has a franchise agreement (or
comparable instrument)) required to consummate the
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transactions contemplated hereby and all consents or waivers shall have
been made or obtained.
6.3 OPINIONS OF THE COMPANY'S AND THE STOCKHOLDER' COUNSEL.
UAG and Sub shall have been furnished with the opinion of the Company's
and the Stockholder' counsel, dated the Closing Date, in form and substance
satisfactory to UAG and Sub and their counsel, which opinion shall have been
rendered with respect to those matters contained in SECTIONS 2.1, 2.3, 2.4, 2.9,
3.1 AND 3.2 hereof. In rendering the foregoing opinion, such counsel may rely
as to factual matters upon certificates or other documents furnished by officers
and directors of the Company and by government officials and upon such other
documents and data as such counsel deem appropriate as a basis for their
opinions. Such opinions may be limited to Georgia and federal laws.
6.4 ABSENCE OF LITIGATION.
No order, stay, injunction or decree of any court of competent
jurisdiction in the Untied States shall be in effect (i) that prevents or delays
the consummation of any of the transactions contemplated hereby or (ii) would
impose any limitation on the ability of UAG or Sub effectively to exercise full
rights of ownership of the Shares. No action, suit or proceeding before any
court or any governmental or regulatory entity shall be pending (or threatened
by any governmental or regulatory entity), and no investigation by any
governmental or regulatory entity shall have been commenced (and be pending),
seeking to restrain or prohibit (or questioning the validity or legality of) the
consummation of the transactions contemplated by this Agreement or seeking
damages in connection therewith which UAG or Sub, in good faith and with the
advice of counsel, believes makes it undesirable to proceed with the
consummation of the transactions contemplated hereby.
6.5 NO MATERIAL ADVERSE EFFECT.
During the period from December 31, 1995 to the Closing Date, there shall
not have been any material adverse change in the assets, properties, business,
operations, prospects, net income or financial condition of the Company.
6.6 WORKING CAPITAL REQUIREMENTS.
On the Closing Date, the Stockholder shall deliver to Sub a balance sheet
of the Company dated as of the most recent practicable date preceding the
Closing Date, prepared in accordance with the Accounting Principles (the
"Estimated Closing Date Balance Sheet"). The Estimated Closing Date Balance
Sheet shall show as of the date thereof, after taking into account the payment
of any of the fees, costs and expenses by the Company incurred in connection
with this Agreement, consolidated net working capital equal to or greater than
the consolidated net working capital of the Company as set forth on the Company
Balance Sheet.
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6.7 COMPLETION OF DUE DILIGENCE.
UAG and Sub shall have completed their due diligence examination of the
Company, the Real Property and the Improvements and the results of such
examination, including any Phase I or Phase II environmental audits of the
Company, shall be satisfactory to UAG and Sub. Sub will pay the costs for a
Phase I environmental audit. If, after obtaining the results of the Phase I
environmental audit, Sub determines that a Phase II environmental audit is
required, the expenses of the Phase II environmental audit shall be paid one-
half by Sub and one-half by the Stockholder.
6.8 LEASE AND REAL ESTATE PURCHASE AGREEMENT.
The Stockholder and the Company shall have agreed upon the terms of the
BMW Lease and the Real Estate Purchase Agreement on or before August 15, 1996
and shall have entered into the BMW Lease and the Real Estate Purchase Agreement
at the time of the Closing.
6.9 BOARD APPROVAL.
The Board of Directors of UAG and Sub shall have approved the
consummation of all of the transactions contemplated by this Agreement.
6.10 CERTIFICATES.
The Stockholder and the Company shall have furnished UAG and Sub with a
certificate, dated as of the Closing Date, executed by the Stockholder
certifying to the fulfillment of the conditions set forth in SECTIONS 6.5, 6.6
AND 6.13 hereof and shall have furnished UAG and Sub with such any other
certificates of its officers and others as UAG and Sub may reasonably request to
evidence compliance with the conditions set forth in this ARTICLE 6.
6.11 LEGAL MATTERS.
All certificates, instruments, opinions and other documents required to
be executed or delivered by or on behalf of the Stockholder and the Company
under the provisions of this Agreement, and all other actions and proceedings
required to be taken by or on behalf of the Stockholder and the Company in
furtherance of the transactions contemplated hereby, shall be reasonably
satisfactory in form and substance to counsel for UAG and Sub.
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6.12 APPROVAL OF MANUFACTURER AND DISTRIBUTOR.
The Stockholder and the Company shall have obtained the consent,
authorization and approval of BMW and BMW distributor on terms no less favorable
to those granted to the Company immediately prior to the execution of this
Agreement.
6.13 ENVIRONMENTAL LAWS.
The Company shall be in compliance with all applicable Environmental
Laws.
6.14 TITLE INSURANCE.
The Company shall have obtained title insurance with respect to the Real
Property in form and substance satisfactory to UAG. UAG shall pay the title
insurance premium.
6.15 LEASE TERMINATION AGREEMENT/MEMORANDUM OF LEASE.
The appropriate parties shall have executed a Lease Termination Agreement
and a Memorandum of Lease in form and substance satisfactory to UAG and the
Company.
6.16 RESIGNATION OF THE COMPANY'S DIRECTORS.
Each of the persons who is a director of the Company on the Closing Date
shall have tendered to Sub in writing his resignation as such in form and
substance satisfactory to UAG.
6.17 SCHEDULES.
The Company and the Stockholder shall have delivered to UAG and Sub all
Schedules referred to in ARTICLES 2 AND 3 and such Schedules shall be reasonably
acceptable in form and substance to UAG and Sub.
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF
THE STOCKHOLDER TO EFFECT THE CLOSING
The obligations of the Stockholder and the Company required to be
performed by them at the Closing shall be subject to the satisfaction, at or
prior to the Closing, of each of the following conditions, each of which may be
waived by the Company and the Stockholder as provided herein except as otherwise
required by applicable law:
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7.1 REPRESENTATIONS AND WARRANTIES; AGREEMENTS.
Each of the representations and warranties of UAG and Sub contained in
this Agreement shall be true and correct on the date made and shall be true and
correct in all material respects as of the Closing. Each of the obligations of
UAG and Sub required by this Agreement to be performed by them at or prior to
the Closing shall have been duly performed and complied with in all material
respects as of the Closing. At the Closing, the Stockholder shall have received
a certificate, dated the Closing Date and duly executed by the chief financial
officer of UAG and of Sub to the effect that the conditions set forth in the
preceding two sentences have been satisfied.
7.2 AUTHORIZATION OF THE AGREEMENT, CONSENTS.
(a) All corporate action necessary to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby shall have been duly and validly taken by UAG and Sub. All
filings required to be made under the H-S-R Act in connection with the transac-
tions contemplated hereby shall have been made and all applicable waiting
periods with respect to each such filing, including extensions thereof, shall
have expired or been terminated.
(b) All notices to, and declarations, filings and registrations with,
and consents, authorizations, approvals and waivers from, governmental and
regulatory bodies and third persons (including, but not limited to, all
automobile manufacturers with whom the Company has entered into a franchise
agreement (or comparable instrument)) required to consummate the transactions
contemplated hereby and all consents or waivers shall have been made or
obtained.
7.3 OPINIONS OF UAG'S AND SUB'S COUNSEL.
The Stockholder shall have been furnished with the opinion of Rogers &
Hardin, counsel to UAG and Sub, dated the Closing Date, in form and substance
satisfactory to the Stockholder and their counsel, which opinions, when taken
together, shall have been rendered with respect to those matters contained in
SECTIONS 4.1 AND 4.2 hereof. In rendering the foregoing opinions, such counsel
may rely as to factual matters upon certificates or other documents furnished by
officers and directors of UAG and Sub and by government officials, and upon such
other documents and data as such counsel deems appropriate as a basis for its
opinion. Such opinions may be limited to Georgia and federal laws and the
General Corporation Law of the State of Delaware.
7.4 ABSENCE OF LITIGATION.
No order, stay, judgment or decree shall have been issued by any court
and be in effect restraining or prohibiting the consummation of the transactions
contemplated hereby.
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7.5 LEASE AND REAL ESTATE PURCHASE AGREEMENT.
The Company and Sub shall have agreed upon the terms of the BMW Lease and
the Real Estate Purchase Agreement on or before August 15, 1996 and the Company
and Sub shall have entered into the BMW Lease and Sub shall have entered into
the Real Estate Purchase Agreement at the time of the Closing.
7.6 CERTIFICATES.
UAG and Sub shall have furnished the Stockholder with such certificates
of its officers and others to evidence compliance with the conditions set forth
in this ARTICLE 7 as may be reasonably requested by the Stockholder.
7.7 LEGAL MATTERS.
All certificates, instruments, opinions and other documents required to
be executed or delivered by or on behalf of UAG or Sub under the provisions of
this Agreement, and all other actions and proceedings required to be taken by or
on behalf of UAG or Sub in furtherance of the transactions contemplated hereby,
shall be reasonably satisfactory in form and substance to counsel for the
Stockholder.
ARTICLE 8
TERMINATION
8.1 TERMINATION.
This Agreement may be terminated at any time prior to Closing:
(i) by mutual consent of UAG, Sub and the Stockholder;
(ii) by either UAG, Sub, or the Stockholder if the Closing shall not
have taken place on or prior to November 30, 1996, or such later date as
shall have been approved by UAG, Sub and the Stockholder (provided that the
terminating party is not otherwise in material breach of its represen-
tations, warranties, covenants or agreements under this Agreement);
(iii) by UAG, Sub, or the Stockholder if any court of competent
jurisdiction in the United States or other United States governmental body
shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contem-
plated by this Agreement, and such order, decree, ruling or other action
shall have become final and non-appealable;
(iv) by UAG or Sub if any of the conditions specified in ARTICLE 6
hereof have not been met or waived by UAG and Sub at such time as such
condition is no
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longer capable of satisfaction (provided that neither UAG
nor Sub is otherwise in material breach of its representations, warranties,
covenants or agreements under this Agreement);
(v) by the Stockholder if any of the conditions specified in ARTICLE 7
hereof have not been met or waived by the Stockholder at such time as such
condition is no longer capable of satisfaction (provided that neither the
Stockholder nor the Company is otherwise in material breach of his or its
representations, warranties covenants or agreements under this Agreement);
or
(vi) by either UAG, Sub or the Stockholder if there has been a material
breach on the part of the other of any representation, warranty, covenant or
agreement set forth in this Agreement, which breach has not been cured
within ten (10) Business Days following receipt by the breaching party of
written notice of such breach.
If UAG, Sub or the Stockholder shall terminate this Agreement pursuant to
the provisions hereof, such termination shall be effected by notice to the other
parties specifying the provision hereof pursuant to which such termination is
made.
8.2 EFFECT OF TERMINATION.
Except (i) for any breach of this Agreement prior to its termination, and
(ii) for the obligations contained in SECTIONS 5.1 AND 10.2 hereof, and (iii) as
set forth in SECTION 9.1 and SECTION 9.2 hereof, upon the termination of this
Agreement pursuant to SECTION 8.1 hereof, this Agreement shall forthwith become
null and void and none of the parties hereto or any of their respective
officers, directors, employees, agents, Affiliates, consultants, stockholders or
principals shall have any liability or obligation hereunder or with respect
hereto.
ARTICLE 9
INDEMNIFICATION
9.1 INDEMNIFICATION BY THE STOCKHOLDER.
Notwithstanding the Closing or the delivery of the Shares, the
Stockholder indemnifies and agrees to fully defend, save and hold harmless on
an after-tax basis UAG, Sub, the Company (after the Closing), and any of
their respective officers, directors, employees, stockholders, advisors,
repre-sentatives, agents and Affiliates (other than the Stockholder) (each a
"UAG Indemnified Party"), if a UAG Indemnified Party (including the Company
after the Closing Date) shall at any time or from time to time suffer any
Costs (as defined in SECTION 9.6 below) arising, directly or indirectly, out
of or resulting from, or shall pay or become obligated to pay any sum on
account of, (i) any and all Stockholder Events of Breach (as defined below)
or, (ii) any Claim before or by any court, arbitrator, panel, agency or other
governmental, administrative or judicial entity, which Claim involves,
affects or relates to any assets, properties or operations of the Company or
the conduct of the
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business of the Company prior to the Closing Date (a "Stockholder Third Party
Claim"). As used herein, "Stockholder Event of Breach" shall be and mean any
one or more of the following: (i) any untruth or inaccuracy in any
representation of the Stockholder or the Company or the breach of any
warranty of the Stockholder or the Company contained in this Agreement,
including, without limitation, any misrepresentation in, or omission from,
any statement, certificate, schedule, exhibit, annex or other document
furnished pursuant to this Agreement by the Stockholder or the Company (or
any representative of the Stockholder or the Company) to UAG or Sub (or any
representative of UAG or Sub) and any misrepresentation in or omission from
any document furnished to UAG or Sub in connection with the Closing, and (ii)
any failure of the Stockholder or the Company duly to perform or observe any
term, provision, covenant, agreement or condition on the part of the
Stockholder or the Company to be performed or observed.
9.2 INDEMNIFICATION BY UAG.
Notwithstanding the Closing, UAG indemnifies and agrees to fully defend,
save and hold harmless on an after-tax basis the Stockholder, the Company (prior
to the Closing), and any of their respective officers, directors, employees,
advisors, representatives, agents and Affiliates (each a "Stockholder
Indemnified Party"), if a Stockholder Indemnified Party (including the Company
prior to Closing) shall at any time or from time to time suffer any Costs
arising, directly or indirectly, out of or resulting from, or shall pay or
become obligated to pay any sum on account of, (i) any and all UAG Events of
Breach (as defined below) or (ii) any Claim before or by any court, arbitrator,
panel, agency or other governmental, administrative or judicial entity, which
Claim involves, affects or relates to any assets, properties or operations of
UAG or Sub or the conduct of the business of UAG prior to the Closing Date or
any Claim relating to or arising out of any violation of the Environmental Laws
by the Company after the Closing Date (a "UAG Third Party Claim"). As used
herein, "UAG Event of Breach" shall be and mean any one or more of the
following: (i) any untruth or inaccuracy in any representation of UAG or Sub or
the breach of any warranty of UAG or Sub contained in this Agreement, including,
without limitation, any misrepresentation in, or omission from, any statement,
certificate, schedule, exhibit, annex or other document furnished pursuant to
this Agreement by UAG or Sub (or any representative of UAG or Sub) to the Stock-
holder (or any representative of the Stockholder) and any misrepresentation in
or omission from any document furnished to the Stockholder in connection with
the Closing, and (ii) any failure of UAG or Sub duly to perform or observe any
term, provision, covenant, agreement or condition on the part of UAG or Sub to
be performed or observed.
9.3 PROCEDURES.
If (i) any Stockholder Event of Breach occurs or is alleged and a UAG
Indemnified Party asserts that the Stockholder have become obligated to a UAG
Indemnified Party pursuant to SECTION 9.1, or if any Stockholder's Third Party
Claim is begun, made or instituted as a result of which the Stockholder may
become obligated to a UAG Indemnified Party hereunder, or (ii) a UAG Event of
Breach occurs or is alleged and a Stockholder
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Indemnified Party asserts that UAG has become obligated to a Stockholder
Indemnified Party pursuant to SECTION 9.2, or if any UAG Third Party Claim is
begun, made or instituted as a result of which UAG may become obligated to a
Stockholder Indemnified Party hereunder (for purposes of this ARTICLE 9, any
UAG Indemnified Party and any Stockholder Indemnified Party is sometimes
referred to as an "Indemnified Party" and UAG and the Stockholder are
sometimes referred to as an "Indemnifying Party," and any UAG Third Party
Claim and any Stockholder Third Party Claim is sometimes referred to as a
"Third Party Claim," in each case as the context so requires), such
Indemnified Party shall give written notice to the Indemnifying Party of its
or his obligation to provide indemnification hereunder, provided that any
failure to so notify the Indemnifying Party shall not relieve them from any
liability that it or he may have to the Indemnified Party under this ARTICLE
9. If such notice relates to a Third Party Claim, each Indemnifying Party,
jointly and severally, agrees to defend, contest or otherwise protect such
Indemnified Party against any such Third Party Claim at his or its sole cost
and expense. Such Indemnified Party shall have the right, but not the
obligation, to participate at its own expense in the defense thereof by
counsel of such Indemnified Party's choice and shall in any event cooperate
with and assist the Indemnifying Party to the extent reasonably possible. If
the Indemnifying Party fails timely to defend, contest or otherwise protect
against such Third Party Claim, such Indemnified Party shall have the right
to do so, including, without limitation, the right to make any compromise or
settlement thereof, and such Indemnified Party shall be entitled to recover
the entire Cost thereof from the Indemnifying Party, including, without
limitation, attorneys' fees, disburse-ments and amounts paid (or of which
such Indemnified Party has become obligated to pay) as the result of such
Third Party Claim. Failure by the Indemnifying Party to notify such
Indemnified Party of its or their election to defend any such Third Party
Claim within fifteen (15) days after notice thereof shall have been given to
the Indemnifying Party shall be deemed a waiver by the Indemnifying Party of
its or their right to defend such Third Party Claim. If the Indemnifying
Party assumes the defense of the particular Third Party Claim, the
Indemnifying Party shall not, in the defense of such Third Party Claim,
consent to entry of any judgment or enter into any settlement, except with
the written consent of such Indemnified Party. In addition, the Indemnifying
Party shall not enter into any settlement of any Third Party Claim (except
with the written consent of such Indemnified Party) which does not include as
an unconditional term thereof the giving by the claimant or the plaintiff to
such Indemnified Party a full release from all liability in respect of such
Third Party Claim. Notwithstanding the foregoing, the Indemnifying Party
shall not be entitled to control (but shall be entitled to participate at
their own expense in the defense of), and the Indemnified Party shall be
entitled to have sole control over, the defense or settlement of any Third
Party Claim to the extent the Third Party Claim seeks an order, injunction or
other equitable relief against the Indemnified Party which, if successful,
could materially interfere with the business, operations, assets, condition
(financial or otherwise) or prospects of the Indemnified Party.
9.4 OFFSET.
In addition to and not in limitation of all rights of offset that an
Indemnified Party may have under applicable law, the parties agree that, at any
Indemnified Party's option, any
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or all amounts owing to such Indemnified Party under this ARTICLE 9 or any
other provision of this Agreement or any other liability of the other parties
(or any Affiliate of the other parties) to such Indemnified Party in
connection with this Agreement or the transactions contemplated hereby, may
be recovered by the Indemnified Party by an offset against any or all amounts
due to such other parties pursuant to this Agreement or the transactions
contemplated hereby.
9.5 REMEDIES.
The rights of an Indemnified Party under this ARTICLE 9 are in addition
to such other rights and remedies which such Indemnified Party may have under
this Agreement, applicable law or otherwise.
9.6 DEFINITIONS.
For purposes of this ARTICLE 9, "Costs" shall mean all liabilities,
losses, costs, damages (not including consequential damages), expenses, claims,
attorneys' fees, experts' fees, consultants' fees, and disbursements of any kind
or of any nature whatsoever. For purposes of application of the indemnity
provisions of this ARTICLE 9, the amount of any Cost arising from the breach of
any representation, warranty, covenant or agreement shall be the entire amount
of any Cost suffered, paid or required to be paid by the respective Indemnified
Party as a result of such breach.
ARTICLE 10
MISCELLANEOUS
10.1 SURVIVAL OF PROVISIONS.
(a) The respective representations, warranties, covenants and agreements
of each of the parties to this Agreement (except covenants and agreements which
are expressly required to be performed and are performed in full on or before
the Closing Date) shall survive the Closing Date and the consummation of the
transactions contemplated by this Agreement. In the event of a breach of any
such representations, warranties or covenants, the party to whom such repre-
sentations, warranties or covenants have been made shall have, subject to
ARTICLE 9 hereof, all rights and remedies for such breach available to it under
the provisions of this Agreement or otherwise, whether at law or in equity,
regardless of any disclosure to, or investigation made by or on behalf of, such
party on or before the Closing Date.
(b) The representations and warranties contained in SECTION 2.11 shall
survive (and not be affected in any respect by) the Closing for a period
terminating on the later of (i) the date five years after the Closing Date, and
(ii) with respect to any claim asserted with respect to any breach of such
representation or warranty or pursuant to SECTION 9.3 hereof before the
expiration of such representation or warranty, on the date such claim is finally
liquidated or otherwise resolved.
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10.2 FEES AND EXPENSES.
Except as otherwise expressly provided in this Agreement, all legal and
other fees, costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby through the Closing Date shall be paid
by the party incurring such fees, costs or expenses; PROVIDED, HOWEVER, that
if SECTION 5.5 hereof is breached, then the Stockholder or the Company shall
pay to UAG, within five (5) Business Days after receipt of a request
therefor, an amount equal to all of the legal and other fees, costs and
expenses incurred by UAG in connection with this Agreement and the
transactions contemplated hereby.
10.3 HEADINGS.
The section headings herein are for convenience of reference only, do not
constitute part of this Agreement and shall not be deemed to limit or otherwise
affect any of the provisions hereof.
10.4 NOTICES.
All notices or other communications required or permitted hereunder shall
be given in writing and shall be deemed sufficient if delivered by hand,
recognized overnight delivery service or facsimile transmission or mailed by
registered or certified mail, postage prepaid (return receipt requested), as
follows:
If to the Company before the Closing Date:
Charles Evans Nissan, Inc.
3180 Zingara Road
Route 1
Conyers, Georgia 30207
Attn: Charles F. Evans
with a copy to:
Lance & Associates
884 Green Street
Conyers, Georgia 30207
Facsimile No.: (770) 388-7944
Attn: Forrest Jack Lance, Esq.
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If to the Company after the Closing Date:
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
with a copy to:
Rogers & Hardin
2700 Cain Tower, Peachtree Center
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Facsimile No.: (404) 525-2224
Attn: Michael Rosenzweig, Esq.
If to the Stockholder:
Charles F. Evans
3180 Zingara Road
Route 1
Conyers, Georgia 30207
with a copy to:
Lance & Associates
884 Green Street
Conyers, Georgia 30207
Facsimile No.: (770) 388-7944
Attn: Forrest Jack Lance, Esq.
If to UAG or Sub:
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
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with a copy to:
Rogers & Hardin
2700 Cain Tower, Peachtree Center
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Facsimile No.: (404) 525-2224
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 any notice or communication changing any of the
addresses set forth above shall be effective and deemed given only upon its
receipt.
10.5 ASSIGNMENT.
This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties hereto (and with respect to the Stockholder,
the personal representatives and heirs of the Stockholder) and their respective
successors and permitted assigns, and the provisions of ARTICLE 9 hereof shall
inure to the benefit of the Indemnified Parties referred to therein; PROVIDED,
HOWEVER, that neither this Agreement nor any of the rights, interests, or
obligations hereunder may be assigned by any of the parties hereto without the
prior written consent of the other parties which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, UAG and Sub shall have
the unrestricted right to assign this Agreement and to delegate all or any part
of their obligations hereunder, but in such event UAG shall remain fully liable
for the performance of all of such obligations in the manner prescribed in this
Agreement.
10.6 ENTIRE AGREEMENT.
This Agreement (including the Schedules hereto) and the Real Estate
Purchase Agreement embody the entire agreement and understanding of the parties
with respect to the transactions contemplated hereby and supersede all prior
written or oral commitments, arrangements or understandings between the parties
with respect thereto and all prior drafts of this Agreement. There are no
restrictions, agreements, promises, warranties, covenants or undertakings with
respect to the transactions contemplated hereby other than those expressly set
forth herein or in the Lease. Prior drafts of this Agreement shall not be used
as a basis for interpreting this Agreement.
10.7 WAIVER AND AMENDMENTS.
Each of the Stockholder, the Company, UAG and Sub may by written notice
to the other parties (i) extend the time for the performance of any of the
obligations or other actions of the other parties, (ii) waive any inaccuracies
in the representations or warranties of the
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other parties contained in this Agreement, (iii) waive compliance with any of
the covenants of the other parties contained in this Agreement, (iv) waive
performance of any of the obligations of the other parties created under this
Agreement, or (v) waive fulfillment of any of the conditions to its own
obligations under this Agreement. The waiver by any party hereto of a breach
of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach, whether or not similar. This Agreement may
be amended, modified or supplemented only by a written instrument executed by
the parties hereto.
10.8 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, all of
which shall be considered one and the same agreement and each of which shall be
deemed an original.
10.9 GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Georgia.
10.10 ACCOUNTING TERMS.
All accounting terms used herein which are not expressly defined in this
Agreement shall have the respective meanings given to them in accordance with
GAAP.
10.11 CERTAIN DEFINITIONS.
For purposes of this Agreement:
(a) "Affiliate" of a specified Person shall mean a Person that directly
or indirectly, through one or more intermediaries, controls, or is controlled
by, or is under common control with, the Person specified, and in the case of a
specified Person who is a natural person, his spouse, his issue, his parents,
his estate and any trust entirely for the benefit of his spouse and/or issue.
(b) "best efforts" shall be deemed to not include any obligation on the
part of any Person to undertake any liabilities, expend any funds or perform
acts (except liabilities, expenditures or performance, other than any best
efforts obligations, expressly required to be undertaken by the terms of this
Agreement) which are materially burdensome to such Person; PROVIDED, HOWEVER,
that notwithstanding the foregoing, the term "best efforts" shall include an
obligation to take such actions which are normally incident to or reasonably
foreseeable in connection with such obligation or the transactions contemplated
hereby.
(c) "Business Day" shall mean any day excluding Saturday, Sunday and any
day which is a legal holiday under Federal law.
(d) "GAAP" shall mean generally accepted accounting principles which are
in effect in the United States on the Closing Date.
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(e) "Liens" shall mean any mortgages, pledges, title defects or
objections, liens, claims, security interests, conditional and installment sale
agreements, encumbrances or charges of any kind.
(f) "Material Adverse Effect" shall mean any change in, or effect on,
the Company (including the business thereof) which is, or could reasonably be
expected to be, materially adverse to the business, operations, assets,
condition (financial or otherwise) or prospects of the Company.
(g) "Person" shall mean and include an individual, corporation, limited
liability company, partnership, joint venture, association, trust, any other
incorporated or unincorporated organization or entity and a governmental entity
or any department or agency thereto.
(h) "UAG Public Offering Date" shall mean the date of the consummation
of an underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offering
and sale of shares of common stock, par value $.0001 per share of UAG. on a firm
commitment basis.
10.12 SCHEDULES.
Disclosure of any matter in any Schedule hereto or in the Financial
Statements shall not be considered as disclosure pursuant to any other
provision, subprovision, section or subsection of this Agreement or Schedule to
this Agreement.
10.13 SEVERABILITY.
If any one or more of the provisions of this Agreement shall be held to
be invalid, illegal or unenforceable, the validity, legality or enforceability
of the remaining provisions of this Agreement shall not be affected thereby. To
the extent permitted by applicable law, each party waives any provision of law
which renders any provision of this Agreement invalid, illegal or unenforceable
in any respect.
10.14 REMEDIES.
None of the remedies provided for in this Agreement, including
termination of this Agreement as set forth in ARTICLE 8, indemnification as set
forth in ARTICLE 9, the payment of certain fees, costs and expenses as set forth
in SECTION 10.2 or specific performance as set forth in this SECTION 10.14,
shall be the exclusive remedy of either party for a breach of this Agreement,
the parties hereto having the right to seek any other remedy in law or equity in
lieu of or in addition to any remedies provided in this Agreement, including an
action for damages for breach of contract.
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10.15 TIME IS OF THE ESSENCE.
Time is of the essence for purposes of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
UNITED AUTO GROUP, INC.
By: /s/ GEORGE LOWRANCE
__________________________________
Name: George G. Lowrance
__________________________________
Title: Executive Vice-President
_________________________________
UAG ATLANTA IV, INC.
By: /s/ GEORGE LOWRANCE
__________________________________
Name: George G. Lowrance
__________________________________
Title: Vice President
_________________________________
CHARLES EVANS BMW, INC.
By: /s/ SARAH H. PILGRIM
__________________________________
Name: Sarah H. Pilgrim
__________________________________
Title: President
_________________________________
/s/ CHARLES F. EVANS
_________________________________
Charles F. Evans, Individually
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