Exhibit 28
REGULATORY SIDELETTER
AGREEMENT dated as of February
22, 2002 by and between ▇.▇. ▇▇▇▇▇▇
PARTNERS (BHCA), L.P. ("Investor"),
INTERNATIONAL MOTOR CARS GROUP I,
L.L.C. ("PCP I"), INTERNATIONAL
MOTOR CARS GROUP II, L.L.C. ("PCP
II," and together with PCP I, the
"PCP Entities") and UNITED AUTO
GROUP, INC. (the "Company")
WHEREAS, Investor is a regulated entity and an indirect
subsidiary of ▇.▇. ▇▇▇▇▇▇ Chase & Co. and in connection therewith Investor
is subject to various regulations that may impose restrictions on the type
and terms of Investor's investment in the Company;
NOW THEREFORE, in connection with the foregoing, the parties
hereby agree as follows:
Section 1. Regulatory Matters Generally.
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(a) Regulatory Cooperation.
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(i) In the event that Investor reasonably determines that it
has a Regulatory Problem, each of the Company and the PCP Entities
agrees to take all such actions as are reasonably requested by
Investor in order (A) to effectuate and facilitate any transfer by
Investor of any securities of the Company then held by Investor or
such PCP Entity for the account of such Investor to any Person
designated by Investor, (B) to permit Investor (or any of its
Affiliates) to exchange or to direct such PCP Entities to exchange all
or any portion of the voting securities then held by such Person on a
share-for-share basis for shares of a class of non-voting securities
of the Company, which non-voting securities shall be identical in all
respects to such voting securities, except that such new securities
shall be non-voting and shall be convertible into voting securities on
such terms as are requested by Investor and reasonably acceptable to
the Company in light of regulatory considerations then prevailing, and
(C) to grant Investor or its designee the reasonable equivalent of any
voting rights arising out of Investor's ownership of voting securities
and/or provided for in the Stockholders Agreement that were diminished
as a result of the transfers and amendments referred to above. If
Investor elects to transfer or directs the PCP Entities to transfer
securities of the Company in order to avoid a Regulatory Problem to an
Affiliate subject to limitations on its voting or total ownership
interest in the Company, each of the Company, the Investor and the PCP
Entities and any Affiliate shall enter into such mutually acceptable
agreements as any such party may reasonably request in order to assist
such Affiliate in complying with and avoiding liability pursuant to
any Laws to which it is subject and / or to give effect to Section
1(b) below. Such agreements may include restrictions on the
redemption, repurchase or retirement of securities of the Company that
would result or be reasonably expected to result in such Affiliate
holding more voting securities or total securities (equity and debt)
than it is permitted to hold under such laws and regulations.
(ii) In the event that Investor has the right to direct the
PCP Entities to acquire any of the Company's securities from the
Company or any other Person (as the result of a preemptive offer, pro
rata offer or otherwise), and Investor reasonably determines that it
has a Regulatory Problem, at Investor's request the Company will offer
to sell to Investor or to the PCP Entities, for the account of the
Investor, non-voting securities (or, if the Company is not the
proposed seller, will arrange for the exchange of any voting
securities for non-voting securities immediately prior to or
simultaneous with such sale) on the same terms as would have existed
had Investor acquired or directed the PCP Entities to acquire the
securities so offered and immediately requested their exchange for
non-voting securities pursuant to subsection (i) above.
(iii) In the event that any Affiliate of the Company ever
offers to issue any of its securities to Investor or to the PCP
Entities for the account of the Investor, then the Company will cause
such Affiliate to enter into an agreement with Investor substantially
similar to this Agreement.
(b) Scope. The parties hereto hereby acknowledge that the purpose
of this Regulatory Sideletter is to address any potential Regulatory
Problem, and it is not intended to, and shall not be interpreted to, alter
the economic arrangements among the parties or create any rights for any
party in addition to those set forth in the Transaction Documents and the
Fundamental Documents of the Company.
Section 2. Cross Marketing Activities.
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The Company hereby represents and warrants that except as
otherwise disclosed, neither the Company nor any of its subsidiaries (i)
offers or markets, directly or through any arrangement, any product or
service of any depository institution owned by ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ & Co., or
(ii) permits any of its products or services to be offered or marketed,
directly or through any arrangement, by or through any depository
institution owned by ▇.▇. ▇▇▇▇▇▇ Chase & Co.
Section 3. Lending Activities.
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The Company hereby represents and warrants that except as
otherwise disclosed on Schedule 3 hereto, neither the Company nor any of
its subsidiaries currently has or is expected to have a loan facility,
credit facility, debt financing, line of credit or any other extension of
credit from any depository institution owned by ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
Section 4. Covenants.
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(a) The Company shall give Investor thirty (30) days prior
written notice before taking any affirmative steps which would cause the
representations and warranties contained in Sections 2 or 3 to be untrue.
(b) The Company shall use its best efforts to notify Investor
promptly at any time in which the Company reasonably believes the
representations contained in Sections 2 or 3 to be untrue whether as a
result of the Company's affirmative action or otherwise.
Section 5. Participation Interests and Pledge.
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(a) Notwithstanding anything to the contrary contained in the
Transaction Documents, Investor shall be permitted to grant participation
interests in the Company's securities held by Investor or by the PCP
Entities for the account of the Investor to Affiliates of Investor without
prior disclosure or consent of the Company or any other Person, so long as
the participation agreement or other agreement or document pursuant to
which such participation interest is granted requires such Affiliate to
comply with the Transaction Documents as if it were a record owner of such
securities and a direct party to the Transaction Documents.
(b) Notwithstanding anything to the contrary contained in the
Transaction Documents, any and all representations and warranties relating
to Investor's ownership of the Company's securities, through the PCP
Entities or otherwise, shall be qualified by the fact that Investor has
granted participation interests in a pro rata portion of all of its
investments, including its purchase of the Company's securities through the
PCP Entities or otherwise, to Affiliates of Investor. Such participation
interests, however, do not affect Investor's status as being the sole
beneficial owner of the Company's securities held by Investor or by the PCP
Entities for the account of the Investor.
Section 6. Definitions.
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Unless otherwise defined herein, each capitalized term used
herein shall have the meaning ascribed to such term in the Stockholders
Agreement.
"Affiliate" means, with respect to any Person, (i) a director or
executive officer of such Person or any Person identified in clause (ii)
below, and (ii) any other Person that, directly or indirectly through one
or more intermediaries, Controls, is Controlled by or is under common
Control with such Person. When such term is used in the context of a
Regulatory Problem, it also has the meaning ascribed to it in any Law.
"Banking Regulations" means all federal, state and foreign Laws
applicable to banks, bank holding companies and their Affiliates, including
without limitation, the Bank Holding Company Act and the Federal Reserve
Act.
"Control" means, with respect to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of
the management or policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
"Fundamental Documents" means (i) a certificate or articles filed
with any state wherein such filing forms a Person and (ii) all agreements,
documents, or instruments governing the internal affairs of a Person,
including such Person's by-laws, codes of regulations, partnership
agreements, limited liability company agreements, operating agreement, or
similar agreements.
"Law" with respect to any Person, means (i) all provisions of all
laws, statutes, ordinances, rules, regulations, permits, certificates or
orders of any governmental authority applicable to such Person or any of
its assets or property or to which such Person or any of its assets or
property is subject, including, without limitation, Banking Regulations and
Section 16 of the Securities Exchange Act of 1934, and the rules and
regulations promulgated thereunder, and (ii) all judgments, injunctions,
orders and decrees of all courts and arbitrators in proceedings or actions
in which such Person is a party or by which it or any of its assets or
properties is or may be bound or subject.
"Person" shall be construed as broadly as possible and shall
include an individual or natural person, a partnership (including a limited
liability partnership), a corporation, an association, a joint stock
company, a limited liability company, a trust, a joint venture, an
unincorporated organization and a governmental authority.
"Regulatory Problem" means any set of facts or circumstances in
which the Investor's ownership of securities issued by the Company (i)
gives rise to a material violation of Law by Investor or any of its
Affiliates, or gives rise to a reasonable belief by Investor that such a
violation is likely to occur or (ii) gives rise to a limitation in Law that
will impair materially the ability of Investor or any Affiliate to conduct
its business or gives rise to a reasonable belief by Investor that such a
limitation is likely to arise.
"Stockholders Agreement" means the Second Amended and Restated
Stockholders Agreement to be entered into on the date hereof among the
Company, the Investor, the PCP Entities and certain shareholders of the
Company.
"Transaction Documents" means the Stockholders Agreement, the
Registration Rights Agreement, the Amended and Restated Limited Liability
Company Agreement for PCP I and the related direction letter, each dated as
of the date hereof, among Penske Capital, Penske Corporation, JPMP and AON,
the Amended and Restated Limited Liability Company Agreement for PCP II and
the related direction letter, each dated as of the date hereof, among
Penske Capital and JPMP, any other documents pursuant to or in furtherance
of any of the foregoing, or other transaction documents relating to
Investor's purchase and ownership of the Company's securities, through the
PCP Entities or otherwise, each as amended.
Section 7. Amendments; Benefit.
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The terms and provisions of this Agreement may not be modified or
amended, unless pursuant to a written agreement executed by each of the
parties hereto. This Agreement shall be for the benefit of Investor and its
Affiliates and shall apply to each acquisition of securities issued by the
Company to Investor or its Affiliates.
Section 8. Counterparts, Facsimile Signatures.
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This Agreement may be executed in any number of counterparts,
including by means of facsimile, and each counterpart hereof shall be
deemed to be an original instrument, but all such counterparts together
shall constitute but one agreement.
Section 9. Notices. All notices, claims, certificates, requests,
demands and other communications to be given to Investor hereunder or
relating to Investor's investment in the Company, through the PCP Entities
or otherwise, shall be addressed as follows:
▇.▇. ▇▇▇▇▇▇ Partners, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Official Notices Clerk
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
UNITED AUTO GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
▇.▇. ▇▇▇▇▇▇ PARTNERS (BHCA), L.P.
By: JPMP Master Fund Manager, L.P.,
its general partner
By: JPMP Capital Corp.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Managing Partner
INTERNATIONAL MOTOR CARS GROUP I, L.L.C.
By: Penske Capital Partners, L.L.C.,
as Managing Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive
Officer
INTERNATIONAL MOTOR CARS GROUP II, L.L.C.
By: Penske Capital Partners, L.L.C.,
as Managing Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive
Officer
SCHEDULE 3
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o $200,000,000 swap arrangement with ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ Bank
o Interest Rate: 4.1%
o Trade Date: 10/11/01
o Effective Date: 10/15/01
o Termination Date: 7/25/05
o Reference Number: 0004450719/59474105
o $200,000,000 swap arrangement with ▇.▇. ▇▇▇▇▇▇ Chase Bank
o Interest Rate: 4.28%
o Trade Date: 10/11/01
o Effective Date: 10/15/01
o Termination Date: 10/31/05
o Reference Number: 0004450548/59474104
o $200,000,000 swap arrangement with ▇▇▇▇▇▇ Guaranty Trust Company of
New York
o Interest Rate: 7.152%
o Trade Date: 1/11/00
o Effective Date: 1/13/00
o Termination Date: 10/31/05
o Reference Number: 421023
