Execution Copy
PURCHASE AGREEMENT
by and among
PENSKE AUTOMOTIVE HOLDINGS CORP.
and
COMBINED SPECIALTY INSURANCE COMPANY
dated as of
August 15, 2002
PURCHASE AGREEMENT
PURCHASE AGREEMENT dated as of August 15, 2002, by and among COMBINED
SPECIALTY INSURANCE COMPANY (FORMERLY VIRGINIA SURETY COMPANY, INC.), an
Illinois insurance corporation ("Seller") and PENSKE AUTOMOTIVE HOLDINGS
CORP., a Delaware corporation ("Purchasers").
RECITALS
WHEREAS, Seller beneficially owns shares of voting common stock (the
"Common Stock"), par value $0.0001 per share, of United Auto Group, Inc., a
Delaware corporation (the "Company");
WHEREAS, Purchaser desires to purchase from Seller and Seller desires to
sell to such Purchasers 100,784 Shares of Common Stock (the "Shares") at a
purchase price equal to $15.85 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 (as defined below), subject to
completion of all of the Closing Actions (as defined below), Purchaser
shall purchase (the "Purchase") from Seller, and Seller shall sell to
Purchaser, the Shares at a purchase price of $15.85 per Share (the
"Purchase Price").
1.2 The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of the
Company, 00000 Xxxxx Xxxxx Xxxx, Xxxxxxx, XX 00000 on August 15, 2002 or on
such other date as Seller and Purchasers may mutually determine (such date,
the "Closing Date"), within ten (10) days after the date thereof.
1.3 Actions at the Closing. At the Closing, the following actions
shall occur (the "Closing Actions"):
(a) Seller shall transfer to the Purchaser, stock certificates
representing the Shares and stock powers or such other instruments
reasonably requested by such Purchaser, free and clear of Encumbrances (as
hereinafter defined) thereon.
(b) The Purchaser shall execute a promissory note, in form and
substance reasonably satisfactory to Seller, evidencing Purchaser's
obligation to pay to Seller $1,597,426.40, without interest.
(c) Seller, Penske Corporation, a Delaware corporation ("Penske
Corporation"), and Penske Capital Partners, L.L.C., a Delaware limited
liability company ("Penske Capital"), shall have executed a waiver
agreement in the form of Exhibit C hereto (the "Waiver Agreement").
1.4 Pre-Closing Covenant. Seller and Purchaser hereby covenant
to, and Purchaser hereby covenants to use its best efforts to cause Penske
Corporation and Penske Capital to, enter into the Waiver Agreement prior to
the Closing.
ARTICLE II
SELLER REPRESENTATIONS & WARRANTIES
Seller represents and warrants to Purchaser as follows as of the date
hereof and as of the Closing Date:
2.1 Organization, Power and Authority. Seller is an insurance
corporation duly organized and validly existing under the laws of the State
of Illinois. Seller has all requisite corporate power and authority to
enter into and carry out the transactions contemplated by this Agreement.
2.2 Authorization of the Documents. The execution, delivery and
performance of this Agreement has been duly authorized by all requisite
corporate action on the part of Seller, and this Agreement constitutes a
legal, valid and binding obligation of Seller, enforceable against Seller,
in accordance with its terms.
2.3 No Conflict. The execution, delivery and performance by
Seller of this Agreement and the consummation by Seller of the transactions
contemplated hereby and the sale and delivery by Seller of the Shares 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 Seller, the
Shares or any of Seller's other respective properties or assets, (b) except
as set forth on Schedule 2.3, 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 Seller,
or result in the creation of any Encumbrance, upon any of the properties or
assets of Seller, including the Shares, or (c) violate any provisions of
the Seller's organizational documents, to the extent, with respect to any
of the foregoing, that the same would adversely affect the ability of
Seller to carry out its obligations under this Agreement.
2.4 Consents. Except as would not prevent Seller from
consummating the transactions contemplated hereby or would not subject
Seller to any material penalties for failing to take any of the following
actions, no permit, authorization, consent or approval of or by, or any
notification of or filing with any person (governmental or private) is
required in connection with the execution, delivery and performance by
Seller of this Agreement or any documentation relating hereto, the
consummation by Seller of the transactions contemplated hereby, or the sale
or delivery of the Shares.
2.5 Ownership. As of the Closing, Seller will be the lawful owner
of the Shares, and Seller will have good title to the Shares, free and
clear of any and all mortgages, rights of first refusal or first offer,
security interests liens, mortgages, pledges, charges and similar
restrictions (but other than transfer restriction legend on the Share
certificates, other than as set forth on Schedule 2.5) (collectively,
"Encumbrances"), and upon completion of the transaction contemplated by
this Agreement, Seller will transfer to Purchaser good and valid title to
the Shares free and clear of any Encumbrances.
2.6 Additional Purchases. Seller is aware and acknowledges that
Purchaser and its affiliates may from time to time engage in one or more
transactions involving the purchase of some or all of the Common Stock of
the Company at a purchase price in excess of $15.85 per share. Seller will
not solely by virtue of the completion of any such transaction or
transactions by Purchaser or its affiliates be entitled to any additional
consideration of any kind in exchange for the sale and delivery by Seller
of the Shares to Purchaser, other than as expressly set forth in the
Agreement.
2.7 Due Diligence. Seller has such knowledge and experience in
financial and business matters that Seller is capable of evaluating the
merits and risks of completing the transactions contemplated by this
Agreement. Seller has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to enter into and complete the
transactions contemplated by this Agreement. In evaluating the merits and
risk of the transactions contemplated by this Agreement, Seller has relied
on the advice of its investment advisors and/or its legal counsel.
2.8 Brokers. No agent, broker, investment banker or other person
or entity acting on behalf of Seller or under the authority of Seller is or
will be entitled to any fee or commission directly or indirectly from any
party hereto in connection with any of the transactions contemplated
hereby.
ARTICLE III
PURCHASER REPRESENTATIONS & WARRANTIES
Purchaser represents and warrants to Seller as of the date hereof and as of
the Closing Date as to itself, as follows:
3.1 Organization. Purchaser is duly organized and validly
existing under the laws of the jurisdiction of its organization and has all
power and authority to enter into and perform this Agreement. This
Agreement has been duly authorized by all necessary action on the part of
Purchaser. This Agreement constitutes a valid and binding agreement of
Purchaser enforceable against Purchaser in accordance with its terms.
3.2 No Conflict. The execution, delivery and performance by
Purchaser of this Agreement and the consummation by Purchaser of the
transactions contemplated hereby 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 such Purchaser, 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, lapse of time
or both) a default (or give rise to any right of termination, cancellation
or acceleration) under any agreement of Purchaser or (c) violate its
Certificate of Incorporation or the bylaws, to the extent, with respect to
any of the foregoing, that the same would adversely affect the ability of
Purchaser to carry out its obligations under this Agreement.
3.3 Consents. Except as would not prevent Purchaser from
consummating the transaction contemplated hereby or would not subject
Purchaser to any material penalties for failing to take any of the
following actions, no permit, authorization, consent or approval of or by,
or any notification of or filing with any person (governmental or private)
is required in connection with the execution, delivery and performance by
Purchaser of this Agreement or any documentation relating thereto, or the
consummation by Purchaser of the transactions contemplated hereby.
3.4 Brokers. No agent, broker, investment banker or other person
or entity acting on behalf of Purchaser or under the authority of Purchaser
is or will be entitled to any fee or commission directly or indirectly from
any party hereto in connection with any of the transactions contemplated
hereby.
3.5 Status of Purchaser. Purchaser is an accredited investor
within the meaning of the rules of the Securities Act of 1933, as amended
(the "Act"), with full access to information respecting the business and
affairs of the Company. Further, Purchaser understands and acknowledges the
restrictions imposed by the Act respecting resales of the Shares and
represents that it is acquiring the Shares as principal and not on behalf
of or as agent for others or with a view towards redistribution thereof in
violation of the Act.
ARTICLE IV
MISCELLANEOUS
4.1 Survival of Representations. The representations and
warranties made in this Agreement shall survive for a period ending
eighteen months after the Closing provided that the representation and
warranty of Seller set forth in Section 2.5 shall survive without
limitation.
4.2 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) 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 Seller, to:
Combined Specialty Insurance Company
c/o AON Advisors, Inc.
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxx
(ii) if to Purchaser:
00000 Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
All such notices, requests, consents and other communications shall be
deemed to have been given when received.
4.3 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.
4.4 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 assigns whether so expressed or not.
4.5 Entire Agreement. This Agreement (with the Schedules and
Exhibits hereto) embodies the entire agreement and understanding among the
parties hereto and supersedes all prior agreements and understandings
relating to the subject matter hereof.
4.6 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.
4.7 Submission to Jurisdiction. Each of Seller and Purchasers
hereby (i) irrevocably submits to the jurisdiction of the court of the
State of New York and the Federal courts of the United States of America
located in the City of New York, the State of New York solely for purpose
of any suit, action or other proceeding arising out of, related to or in
connection with this Agreement or the subject matter hereof brought by any
party hereto and (ii) hereby waives and agrees not to assert any right to a
trial by jury in connection with any such suit, action or proceeding. Any
suit or action brought in connection with this Agreement may be brought
only in the courts located in the Southern District of New York.
4.8 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.
4.9 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.
4.10 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.
4.11 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 in negotiating and
executing this Agreement.
4.12 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 might 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, 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.
4.13 Transfer Taxes. All stock transfer taxes, if any, required to
be paid in connection with the transfer by the Seller of the Shares shall
be paid by Purchaser.
4.14 Concurrent Transactions. Concurrent with the transactions
contemplated by this Agreement, Mitsui & Co., Ltd. ("Mitsui Japan") and
Mitsui & Co. (U.S.A.), Inc. ("Mitsui USA" and together with Mitsui Japan,
"Mitsui") purchased shares from Seller pursuant to a Purchase Agreement, of
even date herewith, between the Seller and Mitsui (the "Mitsui
Transaction"). Neither the fact that the Mitsui Transaction and the
transactions contemplated hereby occurred concurrently, nor anything in
this Agreement shall be deemed an admission by the Purchasers or Penske
that a "Group" exists for purposes of Rule 13d promulgated pursuant to the
Securities Exchange Act of 1934, as amended, and the existence of any such
Group is expressly disclaimed. The Purchasers hereby expressly disclaim any
beneficial ownership in any Common Stock beneficially owned by Mitsui.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
SELLER:
COMBINED SPECIALTY INSURANCE COMPANY
By:
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Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
PURCHASER:
PENSKE AUTOMOTIVE HOLDINGS CORP.
By:
--------------------------------------
Name:
Title:
SCHEDULE 2.3
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Reference is hereby made to that certain Second Amended and Restated
Stockholders Agreement, dated as of February 22, 2002, by and between,
among others, Seller and Purchaser (the "Stockholders Agreement").
Section 4.1 of the Stockholders Agreement grants to Penske Corporation, a
Delaware corporation ("Penske Corporation"), certain rights to purchase
shares of Common Stock of Purchaser from Seller under certain conditions.
Pursuant to Section 3.3 of the Stockholders Agreement, Seller is required
to hold at least 1,377,551 shares of Common Stock of Purchaser and is
subject to certain restrictions related to the transferability of such
shares.
SCHEDULE 2.5
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Reference is hereby made to that certain Second Amended and Restated
Stockholders Agreement, dated as of February 22, 2002, by and between,
among others, Seller and Purchaser (the "Stockholders Agreement").
Section 4.1 of the Stockholders Agreement grants to Penske Corporation, a
Delaware corporation ("Penske Corporation"), certain rights to purchase
shares of Common Stock of Purchaser from Seller under certain conditions.
Pursuant to Section 3.3 of the Stockholders Agreement, Seller is required
to hold at least 1,377,551 shares of Common Stock of Purchaser and is
subject to certain restrictions related to the transferability of such
shares.