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EXHIBIT 10.27
PURCHASE AGREEMENT
by and between
MITSUI & CO., LTD.
and
UNITED AUTO GROUP, INC.
dated as of
January 31, 2001
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PURCHASE AGREEMENT
PURCHASE AGREEMENT (the "Agreement") is dated January 31, 2001, by and
between UNITED AUTO GROUP, INC., a Delaware corporation (the "Company"), and
MITSUI & CO., LTD., a Japanese company, or one of its affiliates (the
"Purchaser").
RECITALS
WHEREAS, the Company desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Company, 1,302,326 shares of Voting
Common Stock, par value $0.0001 per share of the Company, for a purchase price
of $10.75 per share;
NOW, THEREFORE, in consideration of the mutual promises and of the
mutual covenants, representations and warranties 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, subject to the terms and conditions
hereof, the Purchaser shall purchase (the "Purchase") from the Company, and the
Company shall sell to the Purchaser, an aggregate of 1,302,326 shares of Voting
Common Stock of the Company (the "Securities") at a purchase price of $10.75 per
share and an aggregate purchase price of $14,000,004.50 (the "Purchase Price")
payable at the Closing.
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 sale and purchase of the Securities
(the "Closing") shall take place at the offices of Debevoise & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 a.m. on February 28, 2001 unless the
parties otherwise agree in writing (the "Closing Date").
1.4 Actions at the Closing. At Closing, the following actions shall
occur (the "Closing Actions"):
(a) The Company shall issue and deliver to the Purchaser the
Securities, evidenced by stock certificates in the name of the Purchaser, free
and clear of liens and encumbrances thereon.
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(b) The Purchaser shall pay the Purchase Price to the account
of the Company by wire transfer pursuant to instructions provided by the Company
at least five business days prior to the Closing Date.
(c) The Company shall make the other deliveries required by
Article IV.
(d) The Company shall have filed with the New York Stock
Exchange an Application for Listing of Additional Shares with respect to the
Securities.
1.5 Legend.
(a) The parties hereby acknowledge and agree that each of the
certificates representing the Securities 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.
(b) The requirement that the above securities legend be placed
upon certificates evidencing shares of Securities 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 and as of the Closing Date:
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 and deliver this Agreement, to perform its obligations hereunder and carry
out the transactions contemplated by the Agreement.
2.2 Authorization of the Agreement. The execution, delivery and
performance of the Agreement 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 the Agreement 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 Agreement 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
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended) with any
person (governmental or private) is required in connection with the execution
and delivery by the Company of the Agreement 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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2.5 Title to Shares. Upon delivery of the Securities as provided in
Section 1.4, the Securities will be duly authorized and validly issued and the
Purchaser will acquire good and valid title to the Securities free and clear of
any encumbrances and liens. The Securities shall be fully paid and
non-assessable and shall represent approximately 3.17% of the issued and
outstanding capital stock of the Company on a fully-diluted basis.
2.6 Disclosure; Undisclosed Liabilities. This Agreement and each
certificate or other instrument, or document furnished by or on behalf of the
Company to the Purchaser and the filings and reports of the Company under the
Securities Act and the Securities Exchange Act of 1934 do not contain any untrue
statement of a material fact or omit to state a fact required to be stated
herein or therein or necessary to make the statements contained herein or
therein in light of the circumstances in which they were made not misleading.
The financial forecasts furnished by the Company to the Purchaser have been
reasonably prepared and reflect the best currently available estimates and
judgment of the Company's Management as to the expected future financial
performance of the Company and its subsidiaries. The Company has no liabilities
or obligations of any nature, whether known, unknown, absolute, accrued,
contingent or otherwise and whether due or to become due, except (i) as
disclosed in its filings under the Securities Act, and (ii) as could not
reasonably be expected to have a material adverse effect on the properties,
business, results of operations or earnings of the Company.
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 and as of the
Closing Date 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 jurisdiction of its organization and has all power and authority
to enter into this Agreement.
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(e) The execution and delivery of this Agreement has been duly
authorized by all requisite corporate action on the part of the Purchaser, and
the Agreement 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 the Agreement 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.
ARTICLE IV
CONDITIONS
4.1 Conditions to Obligations of the Purchaser. The obligations of the
Purchaser to consummate the Purchase shall be subject to the fulfillment on or
prior to the Closing Date of each of the following conditions:
(a) No statute, rule or regulation or order of any court or
administrative agency shall be in effect which prohibits the consummation of the
transactions to be consummated at Closing;
(b) All requisite corporate proceedings and approvals of
Purchaser in connection with the consummation of the transactions contemplated
to be consummated at Closing shall have been obtained on or prior to the Closing
Date;
(c) Each of the representations and warranties of the Company
contained in this Agreement shall be true and correct as of the Closing (except
to the extent such representations and warranties are made as of a particular
date, in which case such representations and warranties shall have been true and
correct in all material respects of such date) and the Company shall have
delivered to the Purchaser a certificate, dated the Closing Date and signed by
the Company to the effect set forth in this Section 4.1(c);
(d) The Company in all material respects shall have performed,
satisfied and complied with each of its covenants and agreements set forth in
this Agreement to be performed, satisfied and complied with prior to or at
Closing;
(e) Purchaser and the Company shall have executed a mutually
acceptable registration rights agreement that shall grant the Purchaser the
opportunity to
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participate, in any future registration under the Securities Act of the
Company's equity securities, including without limitation any such registration,
resulting from the exercise by Penske Corporation or any of its affiliates of
its right to require registration of equity securities held by it, subject to
terms and conditions to be negotiated;
(f) Purchaser and the Company shall have executed a mutually
acceptable amendment of the Stockholders Agreement pursuant to which, among
other things, Purchaser shall have the right to (i) appoint one of the members
of the Board of Directors of the Company or, at Purchaser's sole discretion, a
non-voting observer to the Board of Director of the Company, and (ii) designate
one of the senior executives of the Company;
(g) the Purchaser and the Company shall have executed a
mutually acceptable collaboration agreement under which both parties shall carry
out joint evaluation for exploration of certain business opportunities within
the retail automobile industry;
(h) At Closing the Company shall have delivered to the
Purchaser all the certificates for the Securities as provided in Section 1.4;
and
(i) The Purchaser shall have received an opinion, addressed to
it, and dated the Closing Date, from counsel to the Company in form and
substance reasonably satisfactory to the Purchaser with respects to completion
of corporate action and enforceability.
4.2 Conditions to Obligations of the Company. The obligation of the
Company to consummate the Purchase shall be subject to the satisfaction or
waiver at or prior to the Closing of each of the following conditions:
(a) Each of the representations and warranties of Purchaser
contained in this Agreement shall be true and correct as of Closing (except to
the extent such representations and warranties are made as of a particular date,
in which case such representations and warranties shall have been true and
correct in all material respects as of such date);
(b) Purchaser in all material respects shall have performed,
satisfied and complied with each of its covenants and agreements set forth in
this Agreement to be performed, satisfied and complied with prior to or at
Closing;
(c) Purchaser shall have executed an amendment to the
Stockholders Agreement, in a form mutually acceptable to the Company and the
Purchaser, which shall serve to add Purchaser as a party to the Stockholders
Agreement;
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(d) Purchaser shall have paid the Purchase Price in accordance
with Section 1.4;
(e) the Purchaser shall have delivered to the Company a
certificate dated the Closing Date and signed by the Purchaser to the effect
that the execution, delivery and performance of the Agreement has been duly
authorized by all requisite corporate action on the part of the Purchaser and
the Agreement 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) Purchaser and the Company shall have executed a mutually
acceptable registration rights agreement that shall grant the Purchaser the
opportunity to participate, in any future registration under the Securities Act
of the Company's equity securities, including without limitation any such
registration, resulting from the exercise by Penske Corporation or any of its
affiliates of its right to require registration of equity securities held by it,
subject to terms and conditions to be negotiated;
(g) Purchaser and the Company shall have executed a mutually
acceptable amendment of the Stockholders Agreement pursuant to which, among
other things, Purchaser shall have the right to (i) appoint one of the members
of the Board of Directors of the Company, or, at Purchaser's sole discretion, a
non-voting observer to the Board of Directors of the Company, and (ii) designate
one of the senior executives of the Company; and
(h) the Purchaser and the Company shall have executed a
mutually acceptable collaboration agreement under which both parties shall carry
out joint evaluation for exploration of certain business opportunities within
the retail automobile industry.
ARTICLE V
TERMINATION
5.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date upon written notice of such termination by the terminating
party to the other party setting forth the basis for such termination:
(a) by mutual written consent of the Company and the
Purchaser; or
(b) by either the Purchaser or the Company if any of the
applicable conditions set forth in Article IV have not been satisfied or waived
as of the Closing Date; or
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(c) by the Purchaser if the requisite corporate approvals of
Purchaser have not been obtained;
(d) by either the Purchaser or the Company if a court of
competent jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued a nonappealable final order, decree or ruling or
taken any other action having the effect of permanently restraining, enjoing or
otherwise prohibiting the transactions contemplated by this Agreement; or
(e) by the Purchaser or the Company, (i) if any representation
or warranty of the other set forth in this Agreement shall be untrue in any
material respect when made to the extent that such first party did not have
actual knowledge of such breach as of the date of this Agreement, or (ii) upon a
breach in any material respect of any covenant or agreement on the part of the
other set forth in this Agreement, in each case which would constitute a failure
of the condition to Closing of the first party.
5.2 Effects of Termination. In the event of termination of this
Agreement pursuant to Section 5.1, this Agreement shall become void and have no
effect, without any liability to any person in respect hereof, except for any
liability resulting from such party's breach of this Agreement. Notwithstanding
anything to the contrary contained herein, Purchaser shall have no liability to
the Company or any other person in the event Purchaser terminates this Agreement
pursuant to Section 5.1(c).
5.3 Survival of Representations. The representations and warranties
made in this Agreement shall survive for a period ending eighteen months after
Closing, provided that the representation and warranties of the Company set
forth in Section 2.5 shall survive without limitation.
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ARTICLE VI
MISCELLANEOUS
6.1 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.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
(ii) if to the Purchaser, to:
Mitsui & Co., Ltd.
First Motor Vehicles Div.
▇-▇, ▇▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇
Attention: General Manager of First Motor
Vehicles Div.
with a copy to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
All such notices, requests, consents and other communications shall be deemed to
have been given when received.
6.2 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.
6.3 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.
6.4 Entire Agreement. This Agreement (with the documents referred to
herein or delivered pursuant hereto and together with the Agreement) embodies
the entire agreement and understanding between the parties hereto and supersedes
all prior agreements and understandings relating to the subject matter hereof.
6.5 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 conflicts of law principles thereof which might result in the
application of the laws of any other jurisdiction.
6.6 Submission to Jurisdiction. Each of the Company and the Purchaser
hereby (i) irrevocably submit to the jurisdiction of the courts of the State of
New York and the Federal courts of the United States of America located in the
State of New York
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solely in respect of the interpretation and enforcement of the provisions of
this Agreement, and in respect of the transactions contemplated hereby, and (ii)
agrees that service of any process, summons or notice by international courier
to the address set forth in Section 6.1 shall be effective service of process
for any action or proceeding brought against it in any such court.
6.7 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.
6.8 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.
6.9 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.
6.10 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.
6.11 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.
[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/ ▇▇▇▇▇ ▇. Penske
--------------------------------
Name: ▇▇▇▇▇ ▇. Penske
Title: Chief Executive Officer
PURCHASER:
MITSUI & CO., LTD.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Motor Vehicles, Marine
& Aerospace Group
