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EXHIBIT 10.26
Execution Copy
PURCHASE AGREEMENT
by and between
PENSKE AUTOMOTIVE HOLDINGS CORP.,
and
UNITED AUTO GROUP, INC.
dated as of
December 22, 2000
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PURCHASE AGREEMENT
PURCHASE AGREEMENT dated as of December 22, 2000, by and between UNITED AUTO
GROUP, INC., a Delaware corporation (the "Company"), and PENSKE AUTOMOTIVE
HOLDINGS CORP., a Delaware corporation (the "Purchaser").
RECITALS
WHEREAS, the Company desires to sell to the Purchaser, and the Purchaser desires
to purchase from the Company, 2,139,535 shares of Voting Common Stock, par value
$0.0001 per share (the "Voting Common Stock") of the Company, for a purchase
price of $10.75 per share;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
obligations hereinafter set forth, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
ARTICLE I
SALE AND PURCHASE OF SECURITIES
1.1. The Purchase. At the Closing on the date hereof, subject to
completion of all of the Closing Actions, the Purchaser shall purchase (the
"Purchase") from the Company, and the Company shall sell to the Purchaser, an
aggregate of 2,139,535 shares of Voting Common Stock (the "Securities") at a
purchase price of $10.75 per share and an aggregate purchase price of
$23,000,001.25 (the "Purchase Price").
1.2. Use of Proceeds. The Company will use the proceeds of the Purchase
[for general corporate purposes].
1.3. The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place simultaneously with the execution and
delivery of this Agreement on the date hereof or on such other date as the
Company and the Purchaser may mutually determine (such date, the "Closing
Date").
1.4. Actions at the Closing. Simultaneously with, or prior to, the
execution and delivery of this Agreement, the following actions shall occur (the
"Closing Actions"):
(a) The Company shall issue the Securities to the Purchaser,
evidenced by stock certificates in the name of the Purchaser, free and clear of
encumbrances thereon other than as provided by the Registration Rights
Agreement.
(b) The Purchaser shall pay the Purchase Price to the Company by
wire transfer pursuant to instructions provided by the Company.
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(c) A registration rights agreement (the "Registration Rights
Agreement") among the Company and the Purchaser, substantially in the form of
Exhibit A or as otherwise agreed to by the parties, will be duly executed and
delivered by the parties thereto. The term "Documents" means collectively this
Agreement and the Registration Rights Agreement.
(d) The Company shall deliver to the Purchaser a stock
certificate executed by its Secretary, substantially in the form of Exhibit B.
(e) The Company has filed with the New York Stock Exchange an
Application for Listing of Additional Shares.
1.5. Legend.
(a) The parties hereby acknowledge and agree that each of the
certificates representing the shares of Voting Common Stock shall be subject to
stop transfer instructions and shall include the following legend and any other
legend required by law:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND MAY BE OFFERED OR SOLD ONLY IF REGISTERED
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THESE
SHARES ARE SUBJECT TO CERTAIN LIMITATIONS ON TRANSFER, SALE,
ASSIGNMENT, PLEDGE OR OTHER DISPOSITION OF SUCH SHARES, AS MORE
FULLY SET FORTH IN THE PURCHASE AGREEMENT DATED AS OF DECEMBER 22,
2000 BY AND BETWEEN UNITED AUTO GROUP, INC. AND PENSKE
CORPORATION. A COPY OF SUCH AGREEMENT IS ON FILE WITH THE
SECRETARY OF THE COMPANY AND IS AVAILABLE FOR INSPECTION BY
STOCKHOLDERS OF THE COMPANY.
(b) The requirement that the above securities legend be placed
upon certificates evidencing shares of Voting Common Stock shall cease and
terminate upon the earliest of the following events: (i) when such shares are
transferred in an underwritten public offering, (ii) when such shares are
transferred pursuant to Rule 144 in compliance with the Securities Act or (iii)
when such shares are transferred in any other transaction if the seller delivers
to the Company an opinion of its counsel, which counsel and opinion shall be
reasonably satisfactory to the Company, or a "no-action" letter from the staff
of the Securities and Exchange Commission, in either case to the effect that
such legend is no longer necessary in order to protect the Company against a
violation by it of the Securities Act upon any sale or other disposition of such
shares without registration thereunder. Upon the consummation of any event
requiring the removal of a legend hereunder, the Company, upon the surrender of
certificates containing such legend, shall, at its own expense, deliver to the
holder of any such shares as to which the requirement for such legend shall have
terminated, one or more new certificates evidencing such shares not bearing such
legend.
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ARTICLE II
REPRESENTATIONS & WARRANTIES CONCERNING THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows as of the
date hereof:
2.1. Organization and Good Standing; Power and Authority;
Qualifications. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has all
requisite corporate power and authority to own, lease and operate its
properties, to carry on its business as presently conducted and as proposed to
be conducted. The Company has all requisite corporate power and authority to
enter into and carry out the transactions contemplated by the Documents.
2.2. Authorization of the Documents. The execution, delivery and
performance of each of the Documents has been duly authorized by all requisite
corporate action on the part of the Company, including by a disinterested
majority of the board of directors of the Company in accordance with Section 144
of the Delaware General Corporation Law, and each of the Documents constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company, in accordance with its terms, except to the extent that enforceability
may be limited by bankruptcy, insolvency or other similar laws affecting
creditors' rights generally.
2.3. No Conflict. The execution, delivery and performance by the
Company of the Documents and the consummation by the Company of the transactions
contemplated hereby and thereby; and the issuance, sale and delivery by the
Company of the Securities will not (a) violate any provision of law, statute,
rule or regulation, or any ruling, writ, injunction, order, judgment or decree
of any court, administrative agency or other governmental body applicable to the
Company or any of its properties or assets, (b) conflict with or result in any
breach of any of the terms, conditions or provisions of, or constitute (with due
notice or lapse of time, or both) a default (or give rise to any right of
termination, cancellation or acceleration) under any agreement of the Company,
or result in the creation of any mortgage, lien, security interest, loan, charge
or encumbrance, upon any of the properties or assets of the Company or (c)
violate the Certificate of Incorporation or the by-laws of the Company.
2.4. Consents. No permit, authorization, consent or approval of or by,
or any notification of or filing (including any filing under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) with any
person (governmental or private) is required in connection with the execution,
delivery and performance by the Company of the Documents or any documentation
relating thereto, the consummation by the Company of the transactions
contemplated hereby or thereby, or the issuance, sale or delivery of the
Securities.
2.5. Closing Actions. Subject to the execution and delivery of the
Documents, the Closing Actions that the Company is required to complete have
been completed.
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ARTICLE III
REPRESENTATIONS & WARRANTIES CONCERNING THE PURCHASER
3.1. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company as of the date hereof as follows:
(a) The Purchaser is acquiring the Securities for its own
account, for investment and not with a view to the distribution thereof within
the meaning of the Securities Act.
(b) The Purchaser understands that (i) the Securities have not
been registered under the Securities Act or any state securities laws, and (ii)
the Securities may not be sold unless such disposition is registered under the
Securities Act and applicable state securities laws or is exempt from
registration and/or regulation thereunder as the case may be.
(c) The Purchaser is an "Accredited Investor" (as defined in Rule
501(a) under the Securities Act).
(d) The Purchaser is duly organized and validly existing under
the laws of the state of its organization and has all power and authority to
enter into and perform the Documents. Each of the Documents has been duly
authorized by all necessary action on the part of the Purchaser. Each of the
Documents constitutes a valid and binding agreement of the Purchaser enforceable
against the Purchaser in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally.
(e) The execution, delivery and performance of each of the
Documents has been duly authorized by all requisite corporate action on the part
of the Purchaser, and each of the Documents constitutes a legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser, in
accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency or other similar laws affecting creditors'
rights generally.
(f) The execution, delivery and performance by the Purchaser of
each of the Documents and the consummation by the Purchaser of the transactions
contemplated thereby will not (a) violate any provision of law, statute, rule or
regulation, or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or other governmental body applicable to the
Purchaser, or any of its properties or assets or (b) violate the certificate of
incorporation or the bylaws of the Purchaser.
(g) No permit, authorization, consent or approval of or by, or
any notification of or filing (including any filing under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended) with any person (governmental or
private) is required in connection with the execution, delivery and performance
by the Company of the Documents or any documentation relating thereto, the
consummation by the Company of the transactions contemplated hereby or thereby,
or the issuance, sale or delivery of the Securities.
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ARTICLE IV
MISCELLANEOUS
4.1. Notices. Except as otherwise provided in this Agreement, all
notices, requests, consents and other communications hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person or by telecopy (with confirmation promptly sent by regular mail),
nationally recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other parties:
(i) if to the Company, to:
United Auto Group, Inc.
13400 Outer Drive, West
Suite B36
Detroit, Michigan 48239-4001
Attention: General Counsel
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Valerie Ford Jacob, Esq.
Robert C. Schwenkel, Esq.
(ii) if to the Purchaser, to:
Penske Corporation
13400 Outer Drive, West
Detroit, Michigan 48239-4001
Attention: General Counsel
All such notices, requests, consents and other communications shall be deemed to
have been given when received.
4.2. Amendments and Waivers. This Agreement may be amended, modified,
supplemented or waived only upon the written agreement of the party against whom
enforcement of such amendment, modification, supplement or waiver is sought.
4.3. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and the personal representatives and assigns of the
parties hereto, whether so expressed or not.
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4.4. Entire Agreement. This Agreement (with the documents referred to
herein or delivered pursuant hereto and together with the Documents) embodies
the entire agreement and understanding between the parties hereto and supersedes
all prior agreements and understandings relating to the subject matter hereof.
4.5. Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York without giving
effect (to the fullest extent permitted by law) to the conflicts of law
principles thereof which might result in the application of the laws of any
other jurisdiction.
4.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. All signatures need not appear on any one
counterpart.
4.7. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
4.8. Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to injunctive relief, including specific performance, to enforce such
obligations without the posting of any bond, and, if any action should be
brought in equity to enforce any of the provisions of this Agreement, none of
the parties hereto shall raise the defense that there is an adequate remedy at
law.
4.9. Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments, and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
4.10. Expenses. Each party to this Agreement shall bear its own cost
and expenses, including fees of consultant(s), accountant(s), counsel, and other
persons acting on behalf of or for such party except as provided for in Article
IV.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
COMPANY:
UNITED AUTO GROUP, INC.
By: /s/ Phillip M. Hartz
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Name: Phillip M. Hartz
Title: Senior Vice President
PURCHASER:
PENSKE AUTOMOTIVE HOLDINGS CORP.
By: /s/ Peter E. Mogk
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Name: Peter E. Mogk
Title: Treasurer
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