EXHIBIT H
PLEDGE AGREEMENT
PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of February 27,
1998, made by UNITED AUTO GROUP, INC., a Delaware corporation (together with
its successors, the "Borrower"), and each of the Persons (such capitalized term
and all other terms not otherwise defined herein to have the meanings provided
for in Section 1) signatory hereto on the date hereof and each other Person
that may from time to time become, pursuant to the terms of the Credit
Agreement, a party hereto (with each such Person, together with the Borrower,
sometimes referred to individually as "Pledgor" and collectively as the
"Pledgors"), in favor of THE BANK OF NOVA SCOTIA, as administrative agent (in
such capacity, the "Administrative Agent") for each of the Secured Parties.
WITNESSETH :
WHEREAS, pursuant to a Credit Agreement, dated as of February 27, 1998
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the various financial
institutions from time to time party thereto (collectively, the "Lenders") and
the Administrative Agent, the Lenders and the Issuer have extended Commitments
to make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
each Pledgor is required to execute and deliver this Pledge Agreement;
WHEREAS, each Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of each Pledgor to execute this
Pledge Agreement inasmuch as each such Pledgor will derive substantial direct
and indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders and the Issuer pursuant to the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lenders and the Issuer
to make Credit
Extensions (including the initial Credit Extension) to the Borrower pursuant to
the Credit Agreement, each Pledgor agrees, for the benefit of each Secured
Party, as follows:
SECTION 1. Definitions.
Terms defined in the Credit Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following respective
meanings:
"Administrative Agent" is defined in the preamble.
"Borrower" is defined in the preamble.
"Collateral" has the meaning assigned to such term in Section 3(a).
"Credit Agreement" is defined in the first recital.
"Issuer" means any of the companies identified on Schedule I attached
hereto as the issuers of the Pledged Stock.
"Lenders" is defined in the first recital.
"Partnership" means any of the partnerships listed on Schedule II
attached hereto.
"Partnership Interests" means, as to each Pledgor, the reference to
the partnership interest in each Partnership listed opposite such Pledgor's
name on Schedule II attached hereto.
"Pledge Agreement" is defined in the preamble.
"Pledged Instruments" means, as to each Pledgor, (i) the Subsidiary
Notes of such Pledgor and (ii) any instrument required to be pledged by such
Pledgor to the Administrative Agent pursuant to Section 3(b).
"Pledged Interest" means, as to each Pledgor, the Partnership
Interests of such Pledgor and any other equity interest required to be pledged
by such Pledgor.
"Pledged Securities" means, as to each Pledgor, the Pledged
Instruments, the Pledged Interests and the Pledged Stock of such Pledgor.
"Pledged Stock" means, as to each Pledgor, (i) the Subsidiary Shares
of such Pledgor and (ii) any other capital stock required to be pledged by such
Pledgor to the Administrative Agent pursuant to Section 3(b).
"Pledgor" and "Pledgors" are defined in the preamble.
"Secured Obligations" means all Obligations of the Borrower and each
other Obligor.
"Security Interests" means, as to each Pledgor, the security interests
in its Collateral granted hereunder securing its Secured Obligations.
"Subsidiary Notes" means, as to each Pledgor, any debt of an Issuer
owing to such Pledgor, whether now existing or hereafter arising, including
without limitation the instruments evidencing obligations owed to such Pledgor
listed on Schedule I attached hereto.
"Subsidiary Shares" means, as to each Pledgor, the collective
reference to the shares of capital stock of each Issuer listed opposite such
Pledgor's name on Schedule I attached hereto, together with all shares, stocks,
stock certificates, options or rights of any nature whatsoever that currently
exist or which may be issued or granted in respect thereof (or in substitution
for the same) by any Issuer while this Pledge Agreement is in effect.
Unless otherwise defined herein, or unless the context otherwise
requires, all terms used herein which are defined in the U.C.C. as in effect on
the date hereof shall have the meanings therein stated.
SECTION 2. Representations and Warranties.
Each Pledgor represents and warrants as follows:
(a) Title to Pledged Securities. Such Pledgor owns all of the Pledged
Securities listed on Schedule I and Schedule II across from its name, free and
clear of any Liens other than the Security Interests. Except as set forth on
Schedule I, the Pledged Stock includes all of the issued and outstanding
capital stock of each Issuer. All of the Pledged Stock has been duly authorized
and validly issued, and is fully paid and non-assessable, and is subject to no
options to purchase or similar rights of any Person. Such Pledgor is not and
will not become a party to or otherwise bound by any agreement, other than this
Pledge Agreement, various franchise agreements between such Pledgor and
automobile franchisors or various floor plan agreements (or the Guarantees
thereof) between such Pledgor and Floor Plan Financing Providers, which
restricts in any manner the rights of any present or future holder of any of
the Pledged Securities with respect thereto.
(b) Validity, Perfection and Priority of Security Interests. Upon the
delivery of its Pledged Instruments and certificates representing its Pledged
Stock to the Administrative
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Agent in accordance with Section 4 hereof and assuming that the Administrative
Agent will at no time relinquish possession of such Pledged Instruments and
certificates, the Administrative Agent will have valid and perfected security
interests in the Collateral pledged by such Pledgor hereunder (other than the
Collateral described in the immediately succeeding sentence) subject to no
prior Lien. When in addition appropriately completed Uniform Commercial Code
financing statements shall have been filed as specified in Schedule III hereto,
the Security Interests shall constitute perfected security interests in the
Collateral pledged by such Pledgor hereunder consisting of all right, title and
interest of such Pledgor in Indebtedness of a Subsidiary owing to such Pledgor
and not evidenced by an instrument and the Partnership Interests (and all
proceeds thereof). Except for the filing of such Uniform Commercial Code
financing statements, no registration, recordation or filing with any
governmental body, agency or official is required in connection with the
execution or delivery of this Pledge Agreement or necessary for the validity or
enforceability hereof or for the perfection or enforcement of the Security
Interests. Neither such Pledgor nor any of its Subsidiaries has performed or
will perform any acts which might prevent the Administrative Agent from
enforcing any of the terms and conditions of this Pledge Agreement or which
would limit the Administrative Agent in any such enforcement. On the date
hereof, the Pledged Interests pledged by such Pledgor are not evidenced by any
certificates.
(c) UCC Filing Locations. The chief executive office of such Pledgor
is located at its address set forth on Schedule V attached hereto.
(d) Pledged Interests. None of the Pledged Interests are "investment
company securities" under Section 8-103(b) of the U.C.C. or are evidenced by a
certificate.
SECTION 3. The Security Interests.
In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all the obligations of each Pledgor hereunder:
(a) Each Pledgor hereby assigns and pledges to and with the
Administrative Agent for the benefit of the Secured Parties and grants to the
Administrative Agent for the benefit of the Secured Parties a security interest
in its Pledged Securities, and all of its rights and privileges with respect to
its Pledged Securities, and all income and profits thereon, and all interest,
dividends and other payments and distributions with respect thereto, all
Indebtedness of a Subsidiary owing to such Pledgor from time to time whether or
not evidenced by a Pledged Instrument and all proceeds of the foregoing (the
"Collateral"). Contemporaneously with the execution and delivery hereof, each
Pledgor is delivering its Subsidiary Notes and certificates representing its
Subsidiary Shares in pledge hereunder.
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(b) In the event that any Issuer at any time issues to any Pledgor any
additional or substitute shares of capital stock of any class or any substitute
note, or any Partnership issues to any Pledgor any additional or substitute
equity interests of any class or issues certificates representing the Pledged
Interests or any portion thereof, or owes any other Indebtedness to any
Pledgor, such Pledgor will immediately pledge and deposit with the
Administrative Agent certificates (if any) representing all such shares and
such note or any instrument evidencing such other Indebtedness as additional
security for such Pledgor's Secured Obligations. All such shares, notes,
interests and instruments constitute Pledged Securities and are subject to all
provisions of this Pledge Agreement.
(c) The Security Interests granted by each Pledgor are granted as
security only and shall not subject any Secured Party to, or transfer or in any
way affect or modify, any obligation or liability of such Pledgor or any of its
Subsidiaries with respect to any of the Collateral pledged by such Pledgor
hereunder or any transaction in connection therewith.
SECTION 4. Delivery of Pledged Securities.
All Pledged Instruments delivered to the Administrative Agent by any
Pledgor pursuant hereto shall be endorsed to the order of the Administrative
Agent, and accompanied by any required transfer tax stamps, all in form and
substance satisfactory to the Administrative Agent. All certificates
representing Pledged Stock or Pledged Interests (if any) delivered to the
Administrative Agent by any Pledgor pursuant hereto shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, with signatures appropriately guaranteed,
and accompanied by any required transfer tax stamps, all in form and substance
satisfactory to the Administrative Agent.
SECTION 5. Further Assurances.
(a) Each Pledgor agrees that it will, at its expense and in such
manner and form as the Administrative Agent may require, execute, deliver, file
and record any financing statement, specific assignment or other paper and take
any other action that may be necessary or desirable, or that the Administrative
Agent may request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Administrative Agent to exercise and enforce
its rights hereunder with respect to any of the Collateral. To the extent
permitted by applicable law, each Pledgor hereby authorizes the Administrative
Agent to execute and file, in the name of such Pledgor or otherwise, Uniform
Commercial Code financing statements (which may be carbon, photographic,
photostatic or other reproductions of this Pledge Agreement or of a financing
statement relating to this Pledge Agreement) which the Administrative Agent in
its sole discretion may deem necessary or appropriate to further perfect the
Security Interests.
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(b) Each Pledgor agrees that it will not change (i) its name, identity
or corporate structure in any manner or (ii) the location of its chief
executive office unless it shall have given the Administrative Agent not less
than 30 days' prior notice thereof.
(c) The Borrower agrees that it will cause any Subsidiary which is
owed (i) Indebtedness evidenced by an instrument, (ii) long-term Indebtedness
or (iii) Indebtedness secured by a Lien by the Borrower or another Subsidiary
to immediately assign and pledge to and with the Administrative Agent for the
benefit of the Secured Parties and grant to the Administrative Agent for the
benefit of the Secured Parties a security interest in such Indebtedness and all
proceeds of such Indebtedness, in each case as security for such Subsidiary's
obligations under the Credit Agreement and each Loan Document to which it is a
party.
SECTION 6. Record Ownership of Pledged Stock and Pledged Interests.
Subject to the provisions of the final paragraph of Section 10, the
Administrative Agent may at any time or from time to time, in its sole
discretion, cause any or all of (i) the Pledged Stock or (ii) the Pledged
Interests to be transferred of record into the name of the Administrative Agent
or its nominee. Each Pledgor will promptly give to the Administrative Agent
copies of any notices or other communications received by it with respect to
Pledged Stock or Pledged Interests registered in the name of such Pledgor and
the Administrative Agent will promptly give to each Pledgor copies of any
notices and communications received by the Administrative Agent with respect to
its Pledged Stock registered in the name of the Administrative Agent or its
nominee.
SECTION 7. Right to Receive Distributions on Collateral.
Unless an Event of Default shall have occurred and be continuing, each
Pledgor shall have the right to receive all dividends, interest and other
payments and distributions made upon or with respect to Collateral pledged by
it hereunder.
If an Event of Default shall have occurred and be continuing, the
Administrative Agent shall have the right to receive and to retain as
Collateral hereunder all dividends, interest and other payments and
distributions made upon or with respect to the Collateral and each Pledgor
shall take all such action as the Administrative Agent may deem necessary or
appropriate to give effect to such right. All such dividends, interest and
other payments and distributions which are received by any Pledgor shall be
received in trust for the benefit of the Secured Parties and, if the
Administrative Agent so directs shall be segregated from other funds of such
Pledgor and shall, forthwith upon demand by the Administrative Agent, be paid
over to the Administrative Agent as Collateral in the same form as received
(with any necessary endorsement). After all Events of Defaults have been cured,
the Administrative Agent's right to retain dividends, interest and other
payments and distributions under this Section 7 shall cease and the
Administrative Agent shall pay over to each Pledgor any such Collateral pledged
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by such Pledgor hereunder retained by the Administrative Agent during the
continuance of an Event of Default.
SECTION 8. Right to Vote Pledged Stock and Pledged Interests.
Unless an Event of Default shall have occurred and be continuing, each
Pledgor shall have the right, from time to time, to vote its Pledged Stock and
Pledged Interests and to give consents, ratifications and waivers with respect
to its Pledged Stock and Pledged Interests, and the Administrative Agent shall,
upon receiving a written request from such Pledgor accompanied by a certificate
signed by its principal financial officer stating that no Event of Default has
occurred and is continuing, deliver to such Pledgor or as specified in such
request such proxies, powers of attorney, consents, ratifications and waivers
in respect of any of its Pledged Stock or Pledged Interests which is registered
in the name of the Administrative Agent or its nominee as shall be specified in
such request and be in form and substance satisfactory to the Administrative
Agent.
If an Event of Default shall have occurred and be continuing, the
Administrative Agent shall have the right to the extent permitted by law and
each Pledgor shall take all such action as may be necessary or appropriate to
give effect to such right, to vote and to give consents, ratifications and
waivers, and take any other action with respect to any or all of the Pledged
Stock or Pledged Interests with the same force and effect as if the
Administrative Agent were the absolute and sole owner thereof.
SECTION 9. General Authority.
Each Pledgor hereby irrevocably appoints the Administrative Agent its
true and lawful attorney, with full power of substitution, in the name of such
Pledgor, the Secured Parties or otherwise, for the sole use and benefit of the
Secured Parties, but at the expense of such Pledgor, to the extent permitted by
law to exercise, at any time and from time to time while an Event of Default
has occurred and is continuing, all or any of the following powers with respect
to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance
for any and all monies due or to become due upon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, as fully and effectually
as if the Administrative Agent were the absolute owner thereof, and
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(iv) to extend the time of payment of any or all thereof and
to make any allowance and other adjustments with reference thereto;
provided that the Administrative Agent shall give each Pledgor not less than
ten days' prior notice of the time and place of any sale or other intended
disposition of any of the Collateral pledged by such Pledgor hereunder except
any Collateral which threatens to decline speedily in value or is of a type
customarily sold on a recognized market. The Administrative Agent and each
Pledgor agree that such notice constitutes "reasonable notification" within the
meaning of Section 9-504(3) of the U.C.C.
SECTION 10. Remedies upon Event of Default.
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may exercise on behalf of the Secured Parties all the
rights of a secured party under the Uniform Commercial Code (whether or not in
effect in the jurisdiction where such rights are exercised) and, in addition,
the Administrative Agent may, without being required to give any notice, except
as herein provided or as may be required by mandatory provisions of law, (i)
apply the cash, if any, then held by it as Collateral as specified in Section
13 and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Secured Obligations in full, sell the Collateral or
any part thereof at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Administrative Agent may deem satisfactory. Any Secured
Party may be the purchaser of any or all of the Collateral so sold at any
public sale (or, if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale). The Administrative Agent is
authorized, in connection with any such sale, if it deems it advisable so to
do, (i) to restrict the prospective bidders on or purchasers of any of the
Pledged Securities to a limited number of sophisticated investors who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Securities, (ii) to cause to be placed on certificates for any or all
of the Pledged Securities or on any other securities pledged hereunder a legend
to the effect that such security has not been registered under the 1933 Act and
may not be disposed of in violation of the provision of said Act, and (iii) to
impose such other limitations or conditions in connection with any such sale as
the Administrative Agent deems necessary or advisable in order to comply with
said Act or any other law. Each Pledgor will execute and deliver such documents
and take such other action as the Administrative Agent deems necessary or
advisable in order that any such sale may be made in compliance with law. Upon
any such sale the Administrative Agent shall have the right to deliver, assign
and transfer to the purchaser thereof the Collateral so sold. Each purchaser at
any such sale shall hold the Collateral so sold absolutely and free from any
claim or right of whatsoever kind, including any equity or right of redemption
of any Pledgor which may be waived, and each Pledgor, to the extent permitted
by law, hereby specifically
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waives all rights of redemption, stay or appraisal which it has or may have
under any law now existing or hereafter adopted. The notice (if any) of such
sale required by Section 9 shall (1) in the case of a public sale, state the
time and place fixed for such sale, (2) in the case of a sale at a broker's
board or on a securities exchange, state the board or exchange at which such
sale is to be made and the day on which the Collateral, or the portion thereof
so being sold, will first be offered for sale at such board or exchange, and
(3) in the case of a private sale, state the day after which such sale may be
consummated. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Administrative Agent
may fix in the notice of such sale. At any such sale the Collateral may be sold
in one lot as an entirety or in separate parcels, as the Administrative Agent
may determine. The Administrative Agent shall not be obligated to make any such
sale pursuant to any such notice. The Administrative Agent may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be
so adjourned. In the case of any sale of all or any part of the Collateral on
credit or for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the selling price is paid by the purchaser thereof,
but the Administrative Agent shall not incur any liability in the case of the
failure of such purchaser to take up and pay for the Collateral so sold and, in
the case of any such failure, such Collateral may again be sold upon like
notice. The Administrative Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
Notwithstanding any provision of this Pledge Agreement to the
contrary, (i) enforcement of the security interest granted hereby in the
Pledged Securities and the exercise of any right or remedy with respect to any
of the shares of Pledged Securities and the grant of any pledge pursuant to
Section 5(c) shall be subject to prior approval of the various automobile
franchisors with whom the Pledgor or any of its Affiliates has franchise
agreements pursuant to which such enforcement, or exercise of any remedy or
right, or grant, without prior approval from such automobile franchisors may
result in the termination of one or more of such franchise agreements and (ii)
the enforcement of the security interest granted hereby in the shares of
UnitedAuto Finance Inc. pledged hereunder and the exercise of any right or
remedy with respect thereto shall be subject to the prior consent of the
requisite financing parties with whom UnitedAuto Finance Inc. has financing
agreements set forth on Schedule IV attached hereto to the extent such
enforcement or exercise of any remedy or right without prior approval from such
financing parties may result in a default under one or more of such agreements.
SECTION 11. Expenses.
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Each Pledgor agrees that it will forthwith upon demand pay to the
Administrative Agent:
(i) the amount of any taxes which the Administrative Agent
may have been required to pay by reason of the Security Interests or
to free any of the Collateral of such Pledgor from any Lien thereon,
and
(ii) the amount of any and all out-of-pocket expenses,
including the reasonable fees and disbursements of counsel and of any
other experts, which the Administrative Agent may incur in connection
with (w) the administration or enforcement of this Pledge Agreement,
including such expenses as are incurred to preserve the value of the
Collateral and the validity, perfection, rank and value of any
Security Interest, (x) the collection, sale or other disposition of
any of the Collateral, (y) the exercise by the Administrative Agent of
any of the rights conferred upon it hereunder or (z) any Default or
Event of Default.
Any such amount not paid on demand shall bear interest at a rate per annum
equal to the Alternate Base Rate from time to time in effect plus the
Applicable Margin plus an additional margin of 2.00%, and shall be an
additional Secured Obligation hereunder.
SECTION 12. Limitation on Duty of Administrative Agent in Respect of
Collateral.
Beyond the exercise of reasonable care in the custody thereof, the
Administrative Agent shall have no duty as to any Collateral in its possession
or control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which it accords its own property, and shall not be liable or responsible
for any loss or damage to any of the Collateral, or for any diminution in the
value thereof, by reason of the act or omission of any agent or bailee selected
by the Administrative Agent in good faith and with reasonable care.
SECTION 13. Application of Proceeds.
Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral pledged by any Pledgor hereunder and any cash held shall be applied
by the Administrative Agent in the following order of priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Administrative Agent, and all expenses, liabilities and
advances incurred or made by the Administrative Agent in
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connection therewith, and any other unreimbursed expenses for which
the Administrative Agent or any other Secured Party is to be
reimbursed by such Pledgor pursuant to the Credit Agreement, any
other Loan Document or Section 11 hereof;
second, to the ratable payment of accrued but unpaid interest
on the Secured Obligations (including all fees) of such Pledgor in
accordance with the provisions of the Credit Agreement;
third, to the ratable payment of unpaid principal of the
Secured Obligations of such Pledgor;
fourth, to the ratable payment of all other Secured
Obligations of such Pledgor, until all Secured Obligations of such
Pledgor shall have been paid in full; and
finally, to payment to such Pledgor, or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
The Administrative Agent may make distributions hereunder in cash or in kind
or, on a ratable basis, in any combination thereof.
SECTION 14. Concerning the Administrative Agent.
The Provisions of Article IX of the Credit Agreement shall inure to
the benefit of the Administrative Agent in respect of this Pledge Agreement and
shall be binding upon the parties to the Credit Agreement in such respect. In
furtherance and not in derogation of the rights, privileges and immunities of
the Administrative Agent therein set forth:
(a) The Administrative Agent is authorized to take all such action as
is provided to be taken by it as Administrative Agent hereunder and all other
action reasonably incidental thereto. As to any matters not expressly provided
for herein (including, without limitation, the timing and methods of
realization upon the Collateral) the Administrative Agent shall act or refrain
from acting (i) in accordance with the request of the Required Lenders or (ii)
if the Loans have been declared due and payable by the Administrative Agent in
accordance with Section 8.3 of the Credit Agreement, in accordance with written
instructions from the Required Lenders or, in the absence of such instructions,
in accordance with its discretion.
(b) The Administrative Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Security Interests in any of the
Collateral, whether impaired by operation of law or by reason of any action or
omission to act on its part hereunder. The Administrative Agent shall have no
duty to ascertain or inquire as to the performance or observance of any of the
terms of this Pledge Agreement by any Pledgor.
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SECTION 15. Appointment of Co-Administrative Agents.
At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Administrative Agent may appoint another financial
institution or trust company or one or more other persons, either to act as
co-agent or co-agents, jointly with the Administrative Agent, or to act as
separate agent or agents on behalf of the Secured Parties with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment (which may, in the
discretion of the Administrative Agent, include provisions for the protection
of such co-agent or separate agent similar to the provisions of Section 14).
SECTION 16. Termination of Security Interests; Release of Collateral.
Upon the repayment in full of all Secured Obligations and the
termination of the Commitments under the Credit Agreement, the Security
Interests shall terminate and all rights to the Collateral pledged by each
Pledgor hereunder shall revert to such Pledgor. At any time and from time to
time prior to such termination of the Security Interests, the Administrative
Agent may release any of the Collateral upon the terms set forth in Section
10.1 of the Credit Agreement. Upon any such termination of the Security
Interests or release of Collateral, the Administrative Agent will, at the
expense of the respective Pledgor, execute and deliver to such Pledgor such
documents as such Pledgor shall reasonably request to evidence the termination
of the Security Interests or the release of such Collateral, as the case may
be.
SECTION 17. Notices.
All notices hereunder shall be given in accordance with Section 10.2
of the Credit Agreement, and shall be addressed, in the case of any Pledgor, to
such Pledgor care of the Borrower.
SECTION 18. Waivers, Non-Exclusive Remedies.
No failure on the part of the Administrative Agent to exercise, and no
delay in exercising and no course of dealing with respect to, any right under
this Pledge Agreement shall operate as a waiver thereof; nor shall any single
or partial exercise by the Administrative Agent of any right under the Credit
Agreement or this Pledge Agreement preclude any other or further exercise
thereof or the exercise of any other right. The rights in this Pledge Agreement
and the Credit Agreement are cumulative and are not exclusive of any other
remedies provided by law.
SECTION 19. Successors and Assigns.
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This Pledge Agreement is for the benefit of the Administrative Agent
and the other Secured Parties and their permitted successors and assigns, and
in the event of an assignment of all or any of the Secured Obligations, the
rights hereunder, to the extent applicable to the indebtedness so assigned,
shall be transferred with such indebtedness. This Pledge Agreement shall be
binding on each Pledgor and its successors and assigns.
SECTION 20. Changes in Writing.
Neither this Pledge Agreement nor any provision hereto may be changed,
waived, discharged or terminated orally, but only in writing signed by each
Pledgor to be bound thereby and the Administrative Agent with the consent of
the Required Lenders.
SECTION 21. NEW YORK LAW, ENTIRE AGREEMENT, ETC.
THIS PLEDGE AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS
CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO
THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL,
WITH RESPECT THERETO.
SECTION 22. WAIVER OF JURY TRIAL.
EACH PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO
THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
OF THE SECURED PARIES OR EACH PLEDGOR IN CONNECTION HEREWITH OR THEREWITH. EACH
PLEDGOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE
-13-
LENDERS ENTERING INTO THE CREDIT AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 23. Severability.
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be construed in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
SECTION 24. Counterparts.
This Pledge Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
-14-
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
UNITED AUTO GROUP, INC.
By: /s/ Philip N. Smith, Jr.
--------------------------
Title: Senior Vice President
UNITED LANDERS, INC.
DIFEO PARTNERSHIP, INC.
UAG WEST, INC.
LANDERS AUTO SALES, INC.
UAG ATLANTA, INC.
UAG ATLANTA IV, INC.
UAG NORTHEAST, INC.
DIFEO PARTNERSHIP HCT, INC.
HUDSON TOYOTA, INC.
DIFEO PARTNERSHIP VIII, INC.
DIFEO PARTNERSHIP IX, INC.
DIFEO PARTNERSHIP SCT, INC.
SOMERSET MOTORS, INC.
DIFEO PARTNERSHIP RCT, INC.
UAG NORTHEAST (NY), INC.
DIFEO PARTNERSHIP RCM, INC.
SCOTTSDALE AUDI, LTD.
SK MOTORS, LTD.
UAG TEXAS, INC.
UAG TEXAS II, INC.
BPT HOLDINGS, INC.
LANDERS UNITED AUTO GROUP
NO. 5 INC.
LANDERS UNITED AUTO GROUP
NO. 4 INC.
UAG MEMPHIS, INC.
UAG YOUNG, INC.
UAG EAST, INC.
UAG CAROLINA, INC.
UAG GRACELAND, INC.
UAG-CARIBBEAN, INC.
By: /s/ Philip N. Smith, Jr.
-------------------------
Title: Vice President
-15-
ACCEPTED BY:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By: /s/ Brian Allen
-----------------------------
Title:
-16-
Schedule I
Pledged Stock
Issuers Stock Pledged Hereunder
No. of Percentage of
Pledgor Issuer of Pledged Stock Class Shares Shares-Issued
- --------------------------------------------------------------------------------------------------------------------
Borrower United Landers, Inc. Common Stock 100 100%
Borrower UnitedAuto Finance Inc. (fka Common Stock 43,500 100%
Atlantic Auto Finance)
Corporation
ULI Landers Auto Sales, Inc. Common Stock 10 100%
DPI DiFeo Partnership HCT, Inc. Common Stock 100 100%
DPI DiFeo Partnership RCT, Inc. Common Stock 100 100%
DPI DiFeo Partnership RCM, Inc. Common Stock 100 100%
DPI DiFeo Partnership SCT, Inc. Common Stock 100 100%
DPI DiFeo Partnership VIII, Inc. Common Stock 100 100%
DPI DiFeo Partnership IX, Inc. Common Stock 100 100%
Borrower DiFeo Partnership X, Inc. Common Stock 100 100%
Borrower UAG Northeast (NY), Inc. Common Stock 100 100%
DPI Hudson Toyota, Inc. Common Stock 45 100%
DPI Somerset Motors, Inc. Common Stock 100 100%
Borrower UAG West, Inc. Common Stock 100 100%
UAG West SA Automotive, Ltd. Common Stock 1,713,010 100%
UAG West SL Automotive, Ltd. Common Stock 625,000 100%
UAG West SPA Automotive, Ltd. Common Stock 547,125 100%
UAG West LRP, Ltd. Common Stock 500,000 100%
-17-
No. of Percentage of
Pledgor Issuer of Pledged Stock Class Shares Shares-Issued
- --------------------------------------------------------------------------------------------------------------------
UAG West Sun BMW, Ltd. Common Stock 900,000 100%
UAG West 6725 Dealership, Ltd. Common Stock 1,250 100%
UAG West Scottsdale Management Group, Common Stock 101,251 100%
Ltd.
UAG West Scottsdale Audi, Ltd. Common Stock 100 100%
LAS Landers United Auto Group, Inc. Common Stock 10 100%
LAS Landers United Auto Group Common Stock 10 100%
No. 2, Inc.
LAS Landers United Auto Group Common Stock 10 100%
No. 3, Inc.
Borrower UAG Atlanta, Inc. Common Stock 100 100%
UAG Atlanta Atlanta Toyota, Inc. Common Stock 1,000 100%
Borrower UAG Atlanta IV, Inc. Common Stock 100 100%
UAG Atlanta UAG Atlanta IV Motors, Inc. Common Stock 1,001 100%
IV (fka Charles Evans BMW, Inc.)
Borrower UAG Texas, Inc. Common Stock 100 100%
Borrower UAG Texas II, Inc. Common Stock 100 100%
Borrower United AutoCare, Inc. Common Stock 100 100%
Borrower United AutoCare Products, Inc. Common Stock 100 100%
Borrower UAG Capital Management, Inc. Common Stock 100 100%
UAG East Palm Auto Plaza, Inc. Common Stock 250 100%
UAG East West Palm Auto Mall, Inc. Common Stock 200 100%
UAG East Auto Mall Storage, Inc. Common Stock 200 100%
UAG East Florida Chrysler Plymouth, Inc. Common Stock 500 100%
UAG East Northlake Auto Finish, Inc. Common Stock 200 100%
-18-
No. of Percentage of
Pledgor Issuer of Pledged Stock Class Shares Shares-Issued
- --------------------------------------------------------------------------------------------------------------------
UAG East Westbury Superstore, Ltd. Common Stock 200 100%
UAG East Auto Mall Payroll Services, Inc. Common Stock 200 100%
Borrower UAG Carolina, Inc. Common Stock 100 100%
UAG Carolina Gene Reed Chevrolet, Inc. Common Stock 5,000 100%
UAG Carolina Michael Chevrolet-Oldsmobile, Common Stock 100,000 100%
Inc.
UAG Carolina Reed-Lallier Chevrolet, Inc. Common Stock 100,000 100%
LAS Landers United Auto Group No. Common Stock 10 100%
4, Inc.
Landers Landers Buick-Pontiac, Inc. Common Stock 1,000 100%
United Auto
Group No. 4
Borrower UAG Finance Company, Inc. Common Stock 1,000 100%
Borrower UAG Atlanta VI, Inc. Common Stock 100 100%
UAG Atlanta United Jeep Eagle Chrysler Common Stock 1,000 100%
VI, Inc. Plymouth of Stone Mountain,
Inc.
Borrower UnitedAuto Dodge of Shreveport, Common Stock 100 100%
Inc.
Borrower Covington Pike Dodge, Inc. Common Stock 100 100%
LAS Landers United Auto Group Common Stock 10 100%
No. 5, Inc.
Landers BPT Holdings, Inc. Class A Voting 30 100%
United Auto Common Stock
Group No. 5,
Inc.
Landers BPT Holdings, Inc. Class B 39 100%
-19-
No. of Percentage of
Pledgor Issuer of Pledged Stock Class Shares Shares-Issued
- --------------------------------------------------------------------------------------------------------------------
United Auto Non-Voting
Group No. 5, Common Stock
Inc.
BPT Central Ford Center, Inc. Common Stock 69 100%
Holdings, Inc.
Borrower UAG Young, Inc. Common Stock 100 100%
Borrower UAG Young II, Inc. Common Stock 100 100%
UAG Young, Parkway Chevrolet, Inc. Common Stock 1,000 100%
Inc.
UAG Young, Dan Young, Inc. Common Stock 799 100%
Inc.
UAG Young, Young Management Group, Inc. Common Stock 665 100%
Inc.
UAG Young, Young Management Group, Inc. Non-Voting 2 100%
Inc. Common Stock
Borrower UAG Kissimmee Motors, Inc. Common Stock 100 100%
Borrower UAG Paramount Motors, Inc. Common Stock 100 100%
Borrower UAG Century Motors, Inc. Common Stock 100 100%
Borrower UAG Graceland, Inc. Common Stock 100 100%
UAG The New Graceland Dodge, Inc. Common Stock 175,000 100%
Graceland,
Inc.
Borrower UAG Memphis, Inc. Common Stock 1,000 100%
UAG Covington Pike Dodge, Inc. Common Stock 5,525 100%
Memphis, Inc.
Borrower UnitedAuto Dodge of Shreveport, Common Stock 100 100%
Inc.
-20-
No. of Percentage of
Pledgor Issuer of Pledged Stock Class Shares Shares-Issued
- --------------------------------------------------------------------------------------------------------------------
Borrower UAG-Caribbean, Inc. Common Stock 100 100%
UAG- S.H.V.P. Motor Corp. Common Stock 600,000 100%
Caribbean,
Inc.
UAG- PVH Motor Corporation Common Stock 20,000 100%
Caribbean,
Inc.
UAG- HVP Motor Corporation Common Stock 3,000 100%
Caribbean,
Inc.
UAG- VPH Motor Corporation Common Stock 20,000 100%
Caribbean,
Inc.
Borrower UAG Graceland II, Inc. Common Stock 100 100%
Borrower UAG Memphis II, Inc. Common Stock 100 100%
Borrower UAG Memphis III, Inc. Common Stock 100 100%
Borrower UAG Memphis IV, Inc. Common Stock 100 100%
Borrower UAG Memphis V, Inc. Common Stock 100 100%
-21-
Pledged Instruments
Original
Principal
Pledgor Issuer of Pledged Instrument Issue Date Amount
- -------------------------- --------------------------------------------------------------
Borrower UAG Atlanta II, Inc. May 1, 1996 $11,450,000
Borrower UAG Atlanta III, Inc. July 12, 1996 $11,000,000
-22-
Schedule II
Pledged Interests
Partnership
Interest-Pledged
Pledgor Partnership Hereunder
- -------------------------------------------------------------------------------
DPI Fair Hyundai Partnership 70%
UAG Northeast Fair Hyundai Partnership 30%
DPI Fair Chevrolet-Geo Partnership 70%
UAG Northeast Fair Chevrolet-Geo Partnership 30%
DPI Danbury Auto Partnership 70%
UAG Northeast Danbury Auto Partnership 30%
DPI Danbury Chrysler Plymouth Partnership 70%
UAG Northeast Danbury Chrysler Plymouth Partnership 30%
DPI HCT Hudson Motors Partnership 70%
Hudson Toyota Hudson Motors Partnership 30%
DPI DiFeo Hyundai Partnership 70%
UAG Northeast DiFeo Hyundai Partnership 30%
DPI J&F Oldsmobile Partnership 70%
UAG Northeast J&F Oldsmobile Partnership 30%
DPI DiFeo Chevrolet-Geo Partnership 70%
UAG Northeast DiFeo Chevrolet-Geo Partnership 30%
DPI DiFeo Chrysler Plymouth Jeep Eagle 70%
Partnership
UAG Northeast DiFeo Chrysler Plymouth Jeep Eagle 30%
Partnership
DPI VIII OCT Partnership 70%
-23-
Partnership
Interest-Pledged
Pledgor Partnership Hereunder
- -------------------------------------------------------------------------------
UAG Northeast OCT Partnership 30%
DPI IX OCM Partnership 70%
UAG Northeast OCM Partnership 30%
DPI SCT Somerset Motors Partnership 70%
Somerset Motors Somerset Motors Partnership 30%
DPI DiFeo BMW Partnership 70%
UAG Northeast DiFeo BMW Partnership 30%
DPI RCT Country Auto Group Partnership 70%
UAG Northeast (NY) Country Auto Group Partnership 30%
DPI RCM Rockland Motors Partnership 70%
UAG Northeast (NY) Rockland Motors Partnership 30%
SA 6725 Agent Partnership 50%
SK Motors 6725 Agent Partnership 50%
UAG Texas Shannon Automotive, Ltd. 99%
UAG Texas II Shannon Automotive, Ltd. 1%
DPI DiFeo Leasing Partnership 70%
UAG Northeast DiFeo Leasing Partnership 30%
-24-
Schedule III
UCC Filing Locations
DEBTOR FILING LOCATIONS
- -------------------------------------------------------------------------------
United Auto Group, Inc. New York Secretary of State
New York City Register
DiFeo Partnership, Inc. New York Secretary of State
New York City Register
Rockland County Clerk
New Jersey Secretary of State
Hudson County Clerk
Ocean County Clerk
Somerset County Clerk
Bergen County Clerk
Connecticut Secretary of State
Fairfield County Clerk
DiFeo Partnership RCT, Inc. New York Secretary of State
New York City Register
Rockland County Clerk
New Jersey Secretary of State
Hudson County Clerk
DiFeo Partnership RCM, Inc. New York Secretary of State
New York City Register
Rockland County Clerk
New Jersey Secretary of State
Hudson County Clerk
DiFeo Partnership HCT, Inc. New York Secretary of State
New York City Register
New Jersey Secretary of State
Hudson County Clerk
DiFeo Partnership SCT, Inc. New York Secretary of State
New York City Register
-25-
DEBTOR FILING LOCATIONS
- -------------------------------------------------------------------------------
New Jersey Secretary of State
Hudson County Clerk
Somerset Country Clerk
DiFeo Partnership VIII, Inc. New York Secretary of State
New York City Register
New Jersey Secretary of State
Hudson County Clerk
Ocean County Clerk
DiFeo Partnership IX, Inc. New York Secretary of State
New York City Register
New Jersey Secretary of State
Hudson County Clerk
Ocean County Clerk
UAG Northeast, Inc. New York Secretary of State
New York City Register
Rockland County Clerk
New Jersey Secretary of State
Hudson County Clerk
Ocean County Clerk
Connecticut Secretary of State
Fairfield County Clerk
UAG Northeast (NY), Inc. New York Secretary of State
New York City Register
Hudson Toyota, Inc. New York Secretary of State
New York City Register
New Jersey Secretary of State
Hudson County Clerk
Somerset Motors, Inc. New York Secretary of State
New York City Register
-26-
DEBTOR FILING LOCATIONS
- -------------------------------------------------------------------------------
New Jersey Secretary of State
Hudson County Clerk
Somerset County Clerk
UAG Carolina, Inc. New York Secretary of State
New York City Register
North Carolina Secretary of
State
Cumberland County Clerk
South Carolina Secretary of
State
Charleston County Clerk
Dorchester County Clerk
UAG West, Inc. New York Secretary of State
New York City Register
Arizona Secretary of State
Maricopa County Clerk
SK Motors, Ltd. Arizona Secretary of State
Maricopa County Clerk
Scottsdale Audi, Ltd. Arizona Secretary of State
Maricopa County Clerk
United Landers, Inc. New York Secretary of State
New York City Register
Arkansas Secretary of State
Saline County Clerk
Pulaski County Clerk
Garland County Clerk
Landers Auto Sales, Inc. New York Secretary of State
New York City Register
Arkansas Secretary of State
Saline County Clerk
Pulaski County Clerk
Garland County Clerk
-27-
DEBTOR FILING LOCATIONS
- -------------------------------------------------------------------------------
Landers United Auto Group No. 5, Inc. Arkansas Secretary of State
[TO COME]
BPT Holdings, Inc. Arkansas Secretary of State
[TO COME]
UAG Atlanta, Inc. New York Secretary of State
New York City Register
Georgia Secretary of State
Gwinnette County Clerk
UAG Atlanta IV, Inc. New York Secretary of State
New York City Register
Georgia Secretary of State
Gwinnette County Clerk
UAG Atlanta VI, Inc. Georgia Secretary of State
Dekalb County Clerk
UAG Texas, Inc. New York Secretary of State
New York City Register
Texas Secretary of State
Houston County Clerk
UAG Texas II, Inc. New York Secretary of State
New York City Register
Texas Secretary of State
Houston County Clerk
UAG East, Inc. New York Secretary of State
New York City Register
Florida Secretary of State
Palm Beach County Clerk
UAG Young, Inc. New York Secretary of State
New York City Register
UAG Young II, Inc. New York Secretary of State
-28-
DEBTOR FILING LOCATIONS
- -------------------------------------------------------------------------------
New York City Register
Dan Young, Inc. Indiana Secretary of State
Tipton County Clerk
UAG Graceland, Inc. New York Secretary of State
New York City Register
Tennessee Secretary of State
Shelby County Clerk
UAG Graceland II, Inc. New York Secretary of State
New York City Register
Tennessee Secretary State
Shelby County Clerk
UAG Memphis, Inc. New York Secretary of State
New York City Register
Tennessee Secretary of State
Shelby County Clerk
UAG Memphis II, Inc. New York Secretary of State
New York City Register
Tennessee Secretary of State
Shelby County Clerk
UAG Memphis III, Inc. New York Secretary of State
New York City Register
Tennessee Secretary of State
Shelby County Clerk
UAG Memphis IV, Inc. New York Secretary of State
New York City Register
Tennessee Secretary of State
Shelby County Clerk
UAG Memphis V, Inc. New York Secretary of State
New York City Register
-29-
DEBTOR FILING LOCATIONS
- -------------------------------------------------------------------------------
Tennessee Secretary of State
Shelby County Clerk
UAG Knoxville, Inc. New York Secretary of State
New York City Register
[TO COME]
UAG Knoxville II, Inc. New York Secretary of State
New York City Register
[TO COME]
UAG-Caribbean, Inc. New York Secretary of State
New York City Register
[TO COME]
-30-
Schedule IV
Atlantic Auto Financing Agreements
1. Support Agreement, dated as of June 28, 1995, between the Borrower and
Atlantic Auto Funding Corporation. (This agreement may not be modified without
the consent of Financial Security Assurance Inc.)
2. Support Agreement, dated as of June 14, 1996, between the Borrower and
Atlantic Auto Second Funding Corporation.
3. Support Agreement, dated as of February , 1998, between the Borrower and
UnitedAuto Fourth Funding Corporation.
-31-
Schedule V
Chief Executive Offices
UnitedAuto Group, Inc.
375 Park Avenue
New York, NY 10152
-32-